Stimulus-Will you save or spend it?

[PatrickA5]

I mailed in my DS's taxes today in hopes of getting it processed before they send out checks. He didn't file a 2018 return.

 

[vince]

If one shows up we'll probably use it as an additional donation to the local food bank, as we really don't need it. There are a lot of people far worse off than us.

 

[Aerides]

Haven't read all the rules but there's no reason we should be getting a check (no W2 income but good pension + SS). If one shows up we'll get it in the the hands of someone who really needs it and let them stimulate the local economy by spending it.

+1, including extra big tips at restaurants and service folks. If I get it it's not meant for me, I will spend spend spend.

 

[Sittingduck]

I don’t know any of the rules but I can’t imagine I’d get anything. If I did, I’d give it away. Maybe drop one of those huge tips on an unsuspecting waitress, or find a medical worker that is (hopefully was - as in its over soon) on the front lines.

+1

 

[RetiredAt55.5]

I mailed in my DS's taxes today in hopes of getting it processed before they send out checks. He didn't file a 2018 return.

It's not clear how young adults are handled in this.

My 22 year old graduated from college December 2019, so he won't be a dependent on our taxes for tax year 2020. But, he was our dependent for both tax years 2018 and 2019, and he filed both years.

Our 20 year old is still our dependent and filed both years.

I know we won't get additional money since they're both over 17.

I could make an argument our 22 year old should get something since he was working full-time in 2020.

I did quickly efile for both last night since they hadn't used direct deposit in previous filings, and I wanted the ACH info on file just in case.

 

[Sunset]

There is no chance I will receive one, based on whatever "means testing" criteria they use. But if I did, I'd pass it forward to a now-out-of-work restaurant employee I know.

However, I'm going to take a moment to gripe about "means testing". Naturally, the entire concept has always been glaringly inconsistent with the idea of "equal justice under law". It's always been about politicians bribing a selected portion of the electorate to secure their future votes. It's discriminatory, arbitrary, corrupt, and worst of all, I never get any of it.

But in this case, its alleged purpose is to keep demand going so that ordinary businesses don't go belly up during a black swan event. I'm not going to argue whether the free money is an optimum approach, but if that's the one they're taking why stiff those small operators whatever revenue they might have received from the "means tested" crowd? Surely Warren Buffett's thousand bucks would be just as important to the servers at the struggling Mom&Pop pizza parlor as Joe Everyman's thousand bucks. When they exclude X% of earners from getting the check, that means a reduction of X% sales for the targeted small businesses.

When our leaders tell us "we are all in this crisis together", and with the next breath add "except for some of you", then I know they are not serious.

Especially, as some folks who only get SS, may not even file a tax return, so they will get $0 , yet need it more than somebody pulling in $60K/yr from a pension and SS.

I know a person in that situation.

 

[Steeler75]

If we get checks, will hold on to them for a couple of months and then send it back before July 15th!

 

[RetiredAt55.5]

When our leaders tell us "we are all in this crisis together", and with the next breath add "except for some of you", then I know they are not serious.

Yes, it's not perfect, but it's amazing they're getting anything through this quickly. They could debate this for 6 months and it still wouldn't be perfect and it's intended effect would be much too late.

 

[Big_Hitter]

what stimulus check? I didn't get one 10 years ago why should I get one now?

 

[Bir48die]

Oh you mean to pay for the broken water heater and subsequent cleanup from last week? Probably spent

 

[teejayevans]

Since it appears I’ll have to pay it back when I do my 2020 taxes, none of the above, unless the savings is temporary.

 

[W2R]

Has any bill actually passed both the House and Senate and been signed into law? If not, then I decided that for me, even thinking about it right now is in the category of "counting my chickens before they hatch". Plus my AGI might be too high to qualify.

 

[Sunset]

Yes, it's not perfect, but it's amazing they're getting anything through this quickly. They could debate this for 6 months and it still wouldn't be perfect and it's intended effect would be much too late.

Of course the checks might take 6 weeks to actually be sent ....

 

[Lisa99]

Our son is a single dad with two teenage sons and a 3 year old daughter. He bought his first house last June. Our check will be kept to help him with mortgage payments if needed.

 

[SecondCor521]

Has any bill actually passed both the House and Senate and been signed into law? If not, then I decided that for me, even thinking about it right now is in the category of "counting my chickens before they hatch". Plus my AGI might be too high to qualify.

Not yet. A stimulus bill passed the Senate on a vote of 96-0. It is expected to be brought up for debate by the House tomorrow. The President has indicated that he would sign it.

(There is another bill introduced in the House, but I think that bill is, for all practical purposes, not viable at the present time.)

 

[cbo111]

Like many here have stated, we will divvy it out among kids, nieces, nephews who are most impacted. The goal for everyone should be to spend it to maximize the actual "stimulus" effect.

 

[RobbieB]

I'm blowing the whole wad on the "after covid19" celebration. Sushi bars galore! Snake River Farms here I come! Get the Maine Lobster on the plane!

 

[Montecfo]

If we get anything we will give to charity, probably overseas relief.

 

[Bamaman]

I feel bad, but I'll be spending it on 25 large and expensive shrubs when landscaping our new swimming pool. We need a little more privacy behind the house.

 

[USGrant1962]

Since it appears I’ll have to pay it back when I do my 2020 taxes, none of the above, unless the savings is temporary.

I'm not sure why you say that. It is a tax credit, not an early refund. The Tax Foundation, who is really good at analyzing these things says:

The proposed recovery rebates will use 2019 tax returns (2018 if the taxpayer has not filed in 2019) to determine the advanced rebate amount and reconcile the rebate based on 2020 income. This means that taxpayers who receive a smaller rebate than they are eligible for based on 2020 income will receive the difference after filing a 2020 tax return, but overpayments of rebates due to a higher income in 2020 will not be clawed back.

 

[pb4uski]

-1000

+1

 

[USGrant1962]

I read further in the Tax Foundation article and it answers a bunch of questions that have been asked here (bolding mine):

Recovery Rebate for individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Additionally, taxpayers with children will receive a flat $500 for each child. The rebates would not be counted as taxable income for recipients, as the rebate is a credit against tax liability and is refundable for taxpayers with no tax liability to offset. The rebate phases out at $75,000 for singles, $112,500 for heads of household, and $150,000 for joint taxpayers at 5 percent per dollar of qualified income, or $50 per $1,000 earned. It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children (see Chart 1). 2019 or 2018 tax returns will be used to calculate the rebate advanced to taxpayers, but taxpayers eligible for a larger rebate based on 2020 income will receive it in the 2020 tax season. Taxpayers with higher incomes in 2020 will see the overpayment associated with their rebate forgiven. For example, a single taxpayer with $100,000 in 2019 income would not receive an advance rebate but would receive the $1,200 credit on their 2020 return if their income for the year fell below the phaseout. On the other hand, a single taxpayer with $35,000 in income receives a $1,200 advance rebate but would not have to pay the rebate back on the 2020 return if they make $100,000 this year. This is structurally similar to the 2008 rebate design. We estimate the rebate will decrease federal revenue by about $301 billion in 2020, according to the Tax Foundation General Equilibrium Model. This credit is one-time, but policymakers may consider additional rebates if the downturn is prolonged.

https://taxfoundation.org/cares-act-senate-coronavirus-bill-economic-relief-plan/

Folks have also mentioned the issue of college student/dependents in 2018 who graduated and are independent working in 2020. I have that situation. It seems that I might get overpaid $500 for my dependent in 2018, yet he will be able to claim the full amount for his independent 2020 tax return, and I won't have to rebate my payment. Convoluted, but gets cash into the economy for sure.

 

[pb4uski]

Given that we pretty much spend what we want.... incrementally it will be saved.

I might increase donations for organizations helping the working poor.

 

[rockyj]

I voted "give it away" but we'll likely "give it away" via some combination of spending at local businesses in excess of what we'd otherwise do and/or giving to local charities whose missions indirectly support the local economy through benefits they provide to their clients.

 

[youbet]

+1

Spoken by someone who will be getting a nice check........