The promised stimulus payments are going to hit our bank accounts any minute now, but plenty of us are still wondering what’s going on.
I wanted to know exactly when they are planning to arrive, so I went digging into the specifics.
Here’s what I found out for those of you who have lingering questions on the coronavirus checks.
1. If you file taxes and use direct deposit, there is absolutely nothing you need to do.
The IRS will use the same information you submitted before and just deposit the funds into your account starting the week of April 13.
2. You also won’t need to do anything to receive the stimulus payment even if you don’t file taxes.
As long as you are receiving Social Security or Railroad Retirement benefits via direct deposit, you are all set.
3. You can still sign up for direct deposit if you would like to have the funds directly deposited into your bank account.
The official IRS website to enter your information is here. Those who either didn’t need to file taxes during tax year 2018 and 2019 or didn’t file should absolutely register to be eligible for the stimulus checks to hit their bank account.
4. Those who want to ultimately receive a paper check will begin receiving them in the mail starting in May.
The IRS anticipates to be able to send out 5 million checks per week, and they plan to send the money out to the lowest income families first.
5. On that same IRS website, there will be an option for no later than April 17 to check your payment status.
Update: The site to check payment status is now up. Click here to see when your money is going to be sent to you.
You’ll also be able to confirm whether you want a direct deposit or check, and enter—and I assume you can also change—the direct deposit information if payment hasn’t been sent to you yet.
6. Individuals with an adjusted gross income of $75,000 or less will get $1,200, with each dependent eligible to receive $500.
Therefore, a couple with two dependent children can receive up to $3,400. How much you get will be based on your latest filed tax return. For many, it will be the 2019 tax year, but for someone like myself who plan to file as late as July 15, eligibility will be based on our family’s 2018 tax filing.
As the law is written however, this payment is technically an advance of the refundable tax credit for the 2020 tax year. This means that come 2021, any differences will be calculated and figured out via your tax refunds.
What I mean is, let’s say you weren’t eligible for any payment based on your 2019 tax return but the corona virus badly hit your income in 2020. In this case, you will receive a refundable tax credit come tax time whenever you file your 2020 taxes.
7. On the flip side, it’s unclear whether you will need to give back any of the money the government sends your way.
This is especially unclear if you end up receiving more than you are supposed to based on your previous years’ tax filing. Don’t worry too much about it though. Just cross that bridge when the time comes. Assume, for now, that you will need to pay back the difference so welcome the interest free loan but don’t spend it all needlessly.
Be Diligent In Order to Avoid Stimulus Check Scams
Now that you know that most of you won’t need to do anything to get the stimulus money, you need to be more diligent and not fall for any scams.
Don’t give out any personal information to anyone to sign up for a check. Scammers may try to persuade you to give them your bank account information so they can take money from your account.
They may also want to get your social security number in order to sign up credit cards or file fake returns in the future to grab your refund. I’ve even heard of people getting Facebook messages asking for their social security number in order for them to check whether the person qualifies for a $50,000 coronavirus grant from The Bill & Melinda Gates Foundation.
Ignore any texts and phone calls telling you to visit a website or visit a store to claim a stimulus check. Costco isn’t giving you $100 to spend because of the stimulus, and there certainly isn’t a stimulus rebate check waiting for you at the used car dealership close by.
Do not wire money or send gift cards to anybody upfront. There aren’t stimulus grants of $50,000 or even $300,000 to be unlock, nor should there be any service fees for someone to check whether you qualify or not. The checks are not in the mail yet, and there’s absolutely no way to pay your way to get it sooner.
How to Use Your Stimulus Check
I know many of you already know what to do with the money, but not blowing it on yet another gadget is so important it bears repeating.
This stimulus fund is really a life saving fund. Use it to:
1. Build up that emergency fund.
I hope you realize by now that no job is truly bulletproof. Just look at how this pandemic has decimated entire industries.
Three to six months at the minimum just in case you lose your job, with safe investments like bonds or certificate of deposits on top of that if you have additional funds.
2. Pay down some debt.
Too many people have credit card debt. You really don’t want to be paying 10%+ interest on any money you owe. Even if your debt is 6%, then whatever amount you put in is a guaranteed 6% annual return.
Use this shot in the arm to actually help yourself. Pay down those debts!
3. Invest that sum for the future.
Consider opening a Roth IRA if you don’t have one, or contribute more into that account. If you are still paralyzed by the market swings lately, then this article may be of help.
Originally posted at https://moneyning.com/money-news/stimulus-checks-are-coming-heres-what-you-need-to-know/