Markus Andrews

Smart Tax Planning

In 2022, roughly 23 million filers received $57 billion from the earned income tax credit, a tax break for low- to moderate-income workers.
But nearly 1 in 5 eligible taxpayers don’t claim the credit, which averaged $2,541 last year, according to the IRS.
For tax year 2023, the EITC is worth up to $7,430 for a family with three or more children, up from $6,935 in 2022.

Laylabird | E+ | Getty Images

Tens of millions of Americans file tax returns every year — and many are missing a “valuable credit,” according to the IRS.
In 2022, roughly 23 million filers received $57 billion from the earned income tax credit, or EITC, a tax break for low- to moderate-income workers.

But nearly 1 in 5 eligible taxpayers don’t claim the EITC, which averaged $2,541 in 2022, IRS Commissioner Danny Werfel told reporters during a press call last week.
“This is a lot of money” that millions of Americans are eligible for “and some simply overlook it,” he said.

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For tax year 2023, the EITC is worth up to $7,430 for a family with three or more children, up from $6,935 in 2022, according to the IRS. Eligible workers between ages 25 and 64 without a qualifying child can receive up to $600.
By law, if you claim the EITC, you should receive a refund no earlier than Feb. 27, assuming you’ve filed an error-free return and picked direct deposit for payment.

How the earned income tax credit works

“The credit is reasonably complex,” said Steven Hamilton, assistant professor of economics at The George Washington University. “It has a lot of eligibility requirements.” 

For tax year 2023, you may qualify with wages from employment below $56,838 — $63,398 if married filing jointly — and investment income under $11,000, according to the IRS. The income limits decrease, depending on the number of qualifying children.
These thresholds use adjusted gross income, which is your total income after subtracting pretax 401(k) contributions minus “adjustments,” such as certain pretax individual retirement account contributions and student loan interest.
The EITC is refundable, meaning you can still get a refund even without taxes owed. You can use this tool to check EITC eligibility. 

There are also “qualifying child” guidelines, which can be complicated, including relationship, age and residency tests, Hamilton said.
However, the IRS encourages filers to use resources such as Free File, a tax professional or the agency’s free tax prep programs to claim the credit.

There’s a ‘high improper payments rate’

“Millions of eligible taxpayers fail to claim the EITC, while other taxpayers claim amounts for which they are not eligible, leading to a high improper payments rate,” National Taxpayer Advocate Erin Collins wrote in the 2023 Purple Book of legislative recommendations.
While higher earners are more likely to face an audit, EITC claimants see audits at a 5.5 times higher rate than the rest of U.S. filers, partially due to improper payments, according to a December report from the Bipartisan Policy Center.
This has contributed to racial disparities in audit rates, with Black Americans about three to five times more likely to see an audit, according to a 2023 Stanford University study. The IRS confirmed these findings in May 2023 and said the agency has dedicated “significant resources” to address the issue.

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New government data shows a surprisingly strong job market for January.
However, there are signs of weakness in the labor market, based on tens of thousands of workers who have been laid off since 2024 started.
If you’re one of them, here’s what you can do to find new work faster.

Skynesher | E+ | Getty Images

New government data shows a surprisingly strong job market for the month of January.
But there are signs of weakness in the labor market, based on tens of thousands of workers who have been laid off since 2024 started.

U.S. employers announced 82,307 job cuts in January, up from 34,817 in December, a 136% increase, according to outplacement firm Challenger, Gray & Christmas.
Still, that is down 20% from the 102,943 cuts announced in January 2023 and the all-time high for that month in 2009, with 241,749 job losses.
At the same time, the latest data shows the U.S. job market is still strong, with the unemployment rate holding at 3.7%.
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Moreover, the number of job openings stands at nine million, which is still elevated compared to prior to the Covid-19 pandemic, yet down from a 12 million peak, noted Mark Hamrick, senior economic analyst at Bankrate.

“On the one hand, Americans should have a sense that their job security is generally speaking in a good place,” Hamrick said. “At the same time, we have to understand that certain sectors of the economy may be experiencing more disruption or innovation.”
With that innovation comes a higher risk that workers may suffer from an income loss as the economy adjusts, he said.
For example, retail brands may be shedding positions as they continue to transition from brick-and-mortar stores to online sales. Sectors tied to the mortgage industry are repositioning in the wake of higher interest rates. Areas such as entertainment and media are adjusting to new online streaming and subscription models.

“There’s still the benefit of the elevated number of job openings,” despite the anecdotal evidence that job cuts are happening, Hamrick said.
Companies that have open positions are scrambling to fill them.
“There are still companies that are hiring, and they can’t find talent fast enough,” said Vicki Salemi, career expert at Monster.
If you’re newly out of work, taking these steps may help you get hired faster.

1. Take a moment to grieve

Losing a job typically prompts a feeling of rejection, Salemi said, while getting a job offer instead prompts acceptance and optimism about the future.
To get to that latter phase faster, it helps to take a moment to acknowledge your feelings and shift into a better mindset.
Salemi recalls working as a corporate recruiter to help two candidates who had just been let go to prepare for their job search.
The first candidate who was excited about potential opportunities landed a new job in six weeks. The other who was shell-shocked from the layoff took longer than six months to find a new position.
Mindset and attitude make all the difference, according to Salemi. “Navigating this journey can be challenging, but it can definitely be overcome,” Salemi said.

2. Refine your search strategy

Update your resume with your latest accomplishments based on recent performance reviews, Salemi said.
To refresh your interviewing skills, try practicing with a friend, setting up informational interviews or getting tips from a career coach.
When you see a relevant position advertised, be sure to apply quickly. “Don’t wait more than 24 hours — the job may be gone,” Salemi said.
Also, be sure to include keywords that will help put your applications to the top of a recruiter’s results, she said.

3. Identify the ideal position for you

Start thinking about the ideal job and what that looks like for you by asking yourself some key questions, Salemi advised.
Where is your ideal position based: in office, hybrid or remote? What industry is it in? What tasks does it require? Are there strengths or items you absolutely loved doing in your last position that you want to continue doing?

4. Keep your skills sharp

Use your time away from a full-time role to continue advancing your skills. That may include taking on a part-time role, volunteer work or online class.
When interviewing, be sure to highlight how those experiences have kept your skills fresh and enhanced what you can offer, Salemi said.

5. Know your worth

Just because you’re out of work doesn’t necessarily mean you need to take a lower salary for your next role. Even if you are coming to a new position without a job, do not discount your worth because you’re unemployed, Salemi said.
Employers are more surprised when you don’t negotiate than when you do, according to Salemi.
“Don’t be shy about negotiating that offer,” Salemi said.Don’t miss these stories from CNBC PRO: More

Quiet luxury is out, and the “mob wife” era is in, according to a recent viral TikTok video.
The “mob wife” aesthetic can be achieved with bold accessories such as gold hoop earrings, a leopard print jacket or vintage fur — items that can often be found by shopping secondhand. 

James Gandolfini as Tony Soprano and Edie Falco as Carmela Soprano seek counseling in HBO’s hit television series, “The Sopranos.”
HBO | Hulton Archive | Getty Images

Quiet luxury is out, and the “mob wife” era is in, according to Kayla Trivieri’s viral TikTok video.
“Bold glamour is making a comeback,” she says. Think: Carmela Soprano in HBO’s “Sopranos,” cheetah print and lots of eye liner.

While keeping up with the latest fashion fads may feel increasingly difficult, young adults like it that way, explained Thomaï Serdari, professor of marketing and director of the fashion and luxury program at New York University’s Stern School of Business. 
“The fact that we have such an accelerated transition from one trend to another has to do with Gen Z because they want to put their name on everything,” she said.

How we got to the ‘mob wife’ era

On the heels of the financial crisis, “people who had money wanted to be a little bit more subdued,” Serdari said. In the decade and a half since, fashion has become bigger and bolder, she added.
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The stealth-wealth style was born after the Covid-19 pandemic, as Americans’ economic circumstances became increasingly divided during the so-called K-shaped recovery, which left the wealthiest Americans even better off than before.

Now, if young adults have money to spend, they are putting it on display, Serdari said, regardless of whether they picked up a side gig to help make ends meet.
“That shows that younger people have not lost their taste for opulence,” she said.
But “I also see a little bit of irony in it,” she added. “You can show off that you have money, even if it came from an untraditional route.”

How to achieve the ‘mob wife’ look

Although the character Carmela Soprano wasn’t necessarily frugal, appropriating her style costs a lot less than the quiet luxury looks that emerged after Gwyneth Paltrow’s ski accident trial last March.
In her daily courtroom appearances, Paltrow wore high-end brands such as Celine and The Row along with $1,450 black Prada boots.

Today’s “mob wife” aesthetic is less about cashmere sweaters and camel-hued coats and more about bold accessories such as gold hoop earrings, a leopard print jacket or vintage fur. 
While some of these items can still come with a hefty price tag, much of the look can be achieved through thrifting at local or online resale shops.
Still, “trends come and go and if you are constantly updating your wardrobe based on the trends, that can get expensive,” said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida.

McClanahan, who also is a member of CNBC’s Advisor Council, suggests buying a few well-made items, such as a black silk blouse, which you can work into your wardrobe and update for future fashion trends.
Additionally, tap vintage pieces to achieve the look of “bold glamour,” McClanahan also advised. Shopping secondhand is not only economical, but increasingly in style.
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In 2023, recently unemployed full-time workers applied to an average of 30 jobs, only to receive an average of four callbacks or responses, according to a survey by staffing agency Insight Global.
The same survey found that 55% of unemployed adults are burned out from searching for a new job.
Experts suggest it might be due to the cooling labor market combined with high expectations from job seekers.

The job market looks solid on paper.
Over the course of 2023, U.S. employers added 2.7 million people to their payrolls, according to government data. Unemployment hit a 54-year low at 3.4% in January 2023 and ticked up just slightly to 3.7% by December.

“The labor market has been fairly strong and surprisingly resilient,” said Daniel Zhao, lead economist at Glassdoor. “Especially after 2023 when we had headlines about layoffs and forecasts of recession.”
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But active job seekers say the labor market feels more difficult than ever.
A 2023 survey from staffing agency Insight Global found that recently unemployed full-time workers had applied to an average of 30 jobs, only to receive an average of four callbacks or responses.
“Between the news, the radio, and politicians just talking about how the economy is so great because unemployment is low and just hearing all that, I just want to scream from the rooftops: Then how come no one can find a job?” said Jenna Jackson, a 28-year-old former management consultant from Ardmore, Pennsylvania. She has been actively looking for a job since her layoff four months ago.

“I haven’t quantified how many applications I’ve applied to but it’s definitely in the hundreds at least,” Jackson said.
More than half, 55%, of unemployed adults are burned out from searching for a new job, Insight Global found. Younger generations were affected the most, with 66% complaining of burnout stemming from job search.

A major reason could be the fact that the labor market is cooling.
“There’s less of a frenzy on the part of the employers,” according to Peter Cappelli, a management professor at the University of Pennsylvania. “If you’re somebody who wants a job, you would like a frenzy on the part of the employers because you would like to have lots of people trying to hire you.”
Some experts suggest it might also be due to the expectations of job seekers.
“How people feel about the job market is informed by their recent experiences with the job market,” Zhao said. “In 2021 and 2022, there were labor shortages, so [employers] were offering all kinds of perks and benefits to try to get people in the door. So even if 2024 is shaping up to be a relatively healthy labor market by recent comparison, it doesn’t feel quite as strong.”
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Half of renters in the U.S. are considered cost-burdened, according to a recent study.
Cost-burdened households are those who spend 30% or more of their income on rent and utilities.
“If you go through any sort of life crisis, you’re on the brink of homelessness,” said Whitney Airgood-Obrycki, lead author and senior research associate focused on affordable housing at the Joint Center for Housing Studies of Harvard University.

Sneksy | E+ | Getty Images

Rent prices are coming down in some areas, but not at the pace needed to relieve tenants struggling to pay rent.
Half of renters in the U.S. spent more than 30% of their income in 2022 on rent and utilities, according to the new America’s Rental Housing report by the Joint Center for Housing Studies of Harvard University.

The report considers those who spend 30% or more of their income on housing “rent burdened” or “cost burdened,” which means those high costs may make it difficult for them to meet other essential expenses.
The share of cost-burdened renters increased by 3.2 percentage points from 2019 to 2022.
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“Places in the market that need the most relief are at the very low end, and it’s hard to reach those people through market rate supply alone,” said Whitney Airgood-Obrycki, lead author and senior research associate focused on affordable housing at the Joint Center for Housing Studies of Harvard University.
While cost burden has increased across income levels, the consequences are much higher for low-income households, said Airgood-Obrycki.

‘We have a very unaffordable country right now’

The average residual income, or the amount of money available after paying for rent and utilities to cover other needs, has significantly dropped for lower earners, the study found.
“It’s a really important part of the conversation because … it makes it more humanizing how big this problem is,” Airgood-Obrycki said.
Renter households with annual incomes below $30,000 had a record-low median residual income of $310 a month in 2022, the Harvard study found. For perspective, a single-person household in even the most affordable counties need about $2,000 a month for non-housing needs, according to the Economic Policy Institute.
“The underlying problem is we have a very unaffordable country right now,” she said. “If you go through any sort of life crisis, you’re on the brink of homelessness.”
Most young adults have either stayed at home with their parents or are moving back in because of the cost of living.

Share of young adults living at home goes back to 1940s

Historically, what kept young adults living at home was the lack of a job; today, it’s the lack of affordable housing, according to Susan M. Wachter, a professor of real estate and finance at The Wharton School of the University of Pennsylvania.
The percentage of Gen Z adults living at home “takes us all the way back to 1940, the end of The Great Depression,” said Wachter.

The share of young adults between the ages of 18 and 29 who live at home with parents is almost at 50%, according to a study Wachter co-authored.
That is a result of young adults competing with potential homebuyers, who themselves are being priced out of the single-family housing market.
“They’re competing in a way that they haven’t before,” she said. “The home mortgage market is indirectly causing a huge spillover demand into the rental market, making the rental market not affordable.” More

Smart Tax Planning

House lawmakers on Wednesday passed a child tax credit expansion that could benefit millions of low-income children, experts say.
“There are real benefits here for 16 million kids in low-income families,” said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
While the House overwhelmingly approved the bill, it still needs 60 votes to pass in the Senate.

J_art | Moment | Getty Images

House lawmakers on Wednesday night passed a $78 billion bipartisan tax package, including a child tax credit expansion that could benefit millions of children in low-income families, according to policy experts.
If enacted, the bill would expand access to the child tax credit, or CTC, and retroactively boost the refundable portion for 2023, which could affect taxpayers this filing season.

While less generous than the pandemic-era child tax credit, the proposed changes still represent “real money” for millions of families, according to Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
The House overwhelmingly approved the bill, but it still needs 60 votes to pass in the Senate amid competing priorities.

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“There are real benefits here for 16 million kids in low-income families,” Marr said. “This doesn’t do everything it needs to be done, but it’s definitely an important step in the right direction.”
The bill would expand the child tax credit through 2025 and lift as many as 400,000 children above the poverty line in the first year, and an additional 3 million children would be less poor, according to a recent report from the Center on Budget and Policy Priorities.
If it is enacted, eligible families could see an average tax cut of $680 for 2023 taxes, according to estimates from the Urban-Brookings Tax Policy Center.

2021 expansion dropped child poverty rates

“We know that the child tax credit is an incredibly effective, well-targeted mechanism for delivering relief to families with children,” said Steven Hamilton, assistant professor of economics at The George Washington University. 
The child poverty rate “precipitously dropped” during the 2021 child tax credit expansion, Hamilton said. “And then as soon as that expired, it radically increased.”

The American Rescue Plan boosted the maximum tax break to $3,000 or $3,600 per child, up from $2,000, and sent monthly payments to families. As a result, the child poverty rate fell to a historic low of 5.2% in 2021, largely due to the expansion, a Columbia University analysis found.
After pandemic relief expired, childhood poverty more than doubled in 2022, jumping to 12.4%, according to the U.S. Census Bureau. 

The long-term impact of CTC expansion

A permanent expansion of the child tax credit could also provide long-term benefits, according to research published Thursday by the Urban Institute.  
Modeling a permanent version of the 2021 child tax credit increase, the report projects higher graduation rates and future earnings for children whose families are child tax credit recipients.

Even a small boost of income can pay really big dividends.

Nikhita Airi
Research analyst at the Urban-Brookings Tax Policy Center

“Even a small boost of income can pay really big dividends” throughout life, said Nikhita Airi, research analyst at the Urban-Brookings Tax Policy Center. 
While the model used the bigger child tax credit enacted during the Covid-19 pandemic, the organization would expect “similar results on a smaller scale” with the current version of the expansion, Airi said. 
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Rent costs are beginning to come down from record-high asking prices.
Prices are beginning to come down as supply boosts vacancy and demand slows from record highs in 2022.

Recep-bg | E+ | Getty Images

Rent costs are beginning to come down after record-high asking prices.
“Rental markets are cooling, but in a lot of places, it doesn’t mean they’re falling. It means they’re growing at a slower pace,” said Whitney Airgood-Obrycki, a senior research associate focused on affordable housing at the Joint Center for Housing Studies of Harvard University. 

Prices are beginning to come down as supply boosts vacancy and demand slows from record highs in 2022.
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As of December, the median U.S. asking rent price fell to $1,964, down 0.8% from a year prior. That’s the third consecutive monthly decline, according to real estate site Redfin, following a 2.1% drop in November and 0.3% in October. The rent price reflects the current costs of new leases during each time period and the data includes single-family homes, multifamily units, condos/co-ops and townhouses.

More higher-end units may spur ‘filtering-down effect’

Easing rents are happening indirectly. The new builds that are boosting supply are mostly among higher-end apartment units, which can command higher asking rent prices, said Susan M. Wachter, a professor of real estate and finance The Wharton School of the University of Pennsylvania.
“It’s kind of a ‘filtering-down effect,’ which will eventually affect rents,” Wachter said.

It will take time for boosted supply and slowed demand to significantly improve rent affordability across income levels.

According to Airgood-Obrycki, most of the construction is happening in professionally managed apartment buildings, which are classed by A, B and C categories.
“New apartments are almost always Class A,” she said. “What we’re adding is really at the high end.”
Increasing the supply of higher-rent Class A units often encourages tenants to upgrade to new units, making prices in those units level out and boosting vacancy in Class B and C units, Airgood-Obrycki said.

There are more newly built and under-construction buildings coming to the market than there were a year ago, Redfin found. The amount of completed apartments alone is near the highest level in more than 30 years while those under construction are close to a new record.
Some areas are already seeing these effects. The South and West regions are seeing prices cool due to more new builds and prices in the Midwest and Northeast remain elevated due to less availability, Redfin found.Don’t miss these stories from CNBC PRO: More

The U.S. Department of Education said FAFSA delays may affect the timing of financial aid offers.
Here’s what students and families need to know.

What the FAFSA delays mean to you

In ordinary years, financial aid award letters are sent around the same time as admission letters so students have several weeks to compare offers ahead of National College Decision Day on May 1, which is the deadline many schools set for admitted students to decide on a college.
For most students and their families, which college they will choose hinges on the amount of financial aid offered and the breakdown between grants, scholarships, work-study opportunities and student loans.
This year, schools are now waiting on that FAFSA information to begin building financial aid packages and to give students and families enough time to weigh their options.

It is a real mess.

Mark Kantrowitz
higher education expert

“It is a real mess,” said higher education expert Mark Kantrowitz. “The delay in sending FAFSA data to colleges will cause college financial aid offers to be delayed until at least April, maybe even May.”
Some colleges have already emailed applicants to reassure them that every admitted student will still receive their financial aid package on time — even if that means sending out award letters before the college receives any FAFSA information.
“Making an offer of admission without offering a full financial aid offer really isn’t useful for most families,” said Adam Miller, vice president for admission and financial aid at Whitman College in Walla Walla, Washington.
To do this, Whitman and other colleges would need to leverage the information families provided in their completed CSS Profile. Currently, about 400 schools use the CSS profile in addition to the FAFSA to award nonfederal institutional aid. 
While FAFSA information will ultimately determine whether a student’s financial aid offer includes federal or state grants as opposed to scholarships, Miller said the expected out-of-pocket contribution for families will not be changed. 
“We feel really confident in our financial aid offers, and we’re fortunate to be in a position to stand by those offers regardless of what federal or state funding may come through once we have the FAFSA.”

What students and families can do now

For now, families should continue to complete their 2024-25 FAFSA forms, advised Rick Castellano, a spokesperson for Sallie Mae. And, in the meantime, tap alternative sources for merit-based aid, he added.
Check with the college, or ask your high school counselor about opportunities. You can also search websites such as Scholarships.com and the College Board.
“The frustration is totally understandable and, frankly, justified,” Castellano said, “but the last thing you want to do is bypass college altogether.”

What delays mean for College Decision Day

There’s also a good chance that colleges and universities will extend their decision deadlines to give students and families more time to assess their financial aid packages.
“Given schools will not begin to receive processed FAFSA data until sometime in March, I would not be surprised if the universal reply date is extended to June 1 or later,” said Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”
Several national organizations, including the American association of community colleges and the American association of state colleges and universities, also issued a statement encouraging schools to give students and families more flexibility as they consider their offers of admission and financial aid. 
“During the pandemic, many institutions extended their enrollment, scholarship, and financial aid deadlines beyond the traditional May 1 date, and we urge institutions to make similar accommodations this year,” the groups said in a collective statement. “We all want students and families to have the time they need to consider their financial options before making enrollment decisions.”
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