How are you going to spend (or not) your stimulus check?

[harllee]

My 90 year old mother received her paper $600 stimulus check in the mail yesterday. Several of her friends are still waiting to receive their checks. The post office is very slow.

 

[gayl]

Can I bang my head against a brick wall now? GS1 proudly told me he managed to pay off 1/2 his student loans while interest was frozen. I smiled and congratulated him. I think that $$ would have done more good as a 2020 Roth contribution especially if up to 10k is forgiven

 

[Venturer]

Can I bang my head against a brick wall now? GS1 proudly told me he managed to pay off 1/2 his student loans while interest was frozen. I smiled and congratulated him. I think that $$ would have done more good as a 2020 Roth contribution especially if up to 10k is forgiven

Good for him being responsible enough to try to repay the debt he owes as soon as he can. Congrats to him and keep up the good work.

 

[skipro33]

Good for him being responsible enough to try to repay the debt he owes as soon as he can. Congrats to him and keep up the good work.

I agree. After both my sons paying for their college, including a doctorate for one, they are both upset with the idea. They both think that 'forgiving' college debt means that now they'll pay for everyone else's going forward. It is a bitter pill to swallow and I think it is wrong.

 

[rk911]

Good for him being responsible enough to try to repay the debt he owes as soon as he can. Congrats to him and keep up the good work.

s big +1. the US needs more folks with that mindset.

 

[Pellice]

My $600 was divided, as I said in a previous thread, between some for charity and the rest in reserve to pay for some bathroom enhancements. I think I'll get at least some of this next round also, and that will likewise go towards the bathroom work. In fact, with what I'd already saved, that should be enough to go ahead with my purchases. So it will get spent, I guess, within 6 months of receipt. (If I can find a spare handyman/bathroom worker - I understand they are incredibly busy during this enforced period at home).

 

[doneat54]

We gave all of ours last year to charities. Will do it this year if we get a check. There are other people who need that money far worse than we do.

 

[gayl]

We gave all of ours last year to charities. Will do it this year if we get a check. There are other people who need that money far worse than we do.

1000% in agreement

 

[RAE]

My 90 year old mother received her paper $600 stimulus check in the mail yesterday. Several of her friends are still waiting to receive their checks. The post office is very slow.

DW and I have not yet received our $600 stimulus checks, and it doesn't look like we will (although we do qualify). The IRS initially said our check was mailed on Jan 6th. When it didn't arrive in a month, I went back to the IRS website to check again, and it now says they do not have enough information to process our checks. Huh? The first stimulus check from several months back was direct deposited into our checking account, no problem at all. Somehow they screwed that up this time. Not a big deal I guess, I'll just claim the $1200 when I file our income tax return in a month or so.

 

[W2R]

Having just finished my taxes, I discovered that my AGI has gone up. If the future $1400 stimulus is based on our 2020 returns, and if the criteria are the same, I will not qualify to get that stimulus even though I did qualify to get the previous two.

I know, cue the tiniest violins playing the saddest song ever.... I'll be fine.

 

[scrabbler1]

My ladyfriend and I can't seem to figure out why she hasn't gotten her second stimulus check. The first one she received back in May via direct deposit. The latest one she hasn't gotten yet. When we go to the IRS website, we see that "we need more information....we are working on it...." message. She easily qualifies based on her 2018 and 2019 income, so that's not an issue. The only thing I can think of is that the IRS has cashed her check from her 2019 return but never processed her return.

She owes nearly $600 with her 2020 return, so if she hasn't gotten her check by late March, we'll just apply the $600 credit against what she owes and roll the small refund toward her 2021 taxes. Probably the simplest and best outcome for everyone.

 

[SecondCor521]

My ladyfriend and I can't seem to figure out why she hasn't gotten her second stimulus check. The first one she received back in May via direct deposit. The latest one she hasn't gotten yet. When we go to the IRS website, we see that "we need more information....we are working on it...." message. She easily qualifies based on her 2018 and 2019 income, so that's not an issue. The only thing I can think of is that the IRS has cashed her check from her 2019 return but never processed her return.

She owes nearly $600 with her 2020 return, so if she hasn't gotten her check by late March, we'll just apply the $600 credit against what she owes and roll the small refund toward her 2021 taxes. Probably the simplest and best outcome for everyone.

I believe the IRS was going to stop mailing out the EIP2 payments sometime around mid-January. I think the logic was twofold: (a) they wanted to avoid someone filing a tax return claiming the additional EIP there then receiving the advance payment later and either not amending (and thus getting double paid) or having to amend which is a hassle, and (b) In many cases they could just e-file their taxes with direct deposit and get the EIP that way about as quickly and efficiently. I think they simply ran out of time to send out all the direct deposits / checks / debit cards before their self-imposed deadline.

If she hasn't gotten a payment by now, I really doubt she'll get one. As you note, she can just get it with her 2020 tax return, which she can e-file starting about 4 days from now.

 

[scrabbler1]

I believe the IRS was going to stop mailing out the EIP2 payments sometime around mid-January. I think the logic was twofold: (a) they wanted to avoid someone filing a tax return claiming the additional EIP there then receiving the advance payment later and either not amending (and thus getting double paid) or having to amend which is a hassle, and (b) In many cases they could just e-file their taxes with direct deposit and get the EIP that way about as quickly and efficiently. I think they simply ran out of time to send out all the direct deposits / checks / debit cards before their self-imposed deadline.

If she hasn't gotten a payment by now, I really doubt she'll get one. As you note, she can just get it with her 2020 tax return, which she can e-file starting about 4 days from now.

I agree with your logic in (a) but less so in (b) because (b) puts an added burden on the taxpayer, either to have to file sooner (which isn't always possible because many of the forms needed to file are arriving later) and/or it makes the filing somewhat more complicated.

I agree she is unlikely to get a check any time soon, so, as I wrote earlier and you pointed out, she will just apply the credit to her amount owed and claim a small refund. I prepare her tax returns on paper (no E-file for me, I don't trust it or any tax software programs and have been filing on paper for 35 years, hers for 16) and will do so again.

 

[mckittri2000]

Having just finished my taxes, I discovered that my AGI has gone up. If the future $1400 stimulus is based on our 2020 returns, and if the criteria are the same, I will not qualify to get that stimulus even though I did qualify to get the previous two.

I know, cue the tiniest violins playing the saddest song ever.... I'll be fine.

It's based on your 2019 AGI.

 

[REWahoo]

Our stimulus checks (should we qualify) will go directly to the college funds of four of our five grandchildren. The oldest graduated last year and will qualify for his own stimulus check.

 

[REWahoo]

It's based on your 2019 AGI.

Since the bill hasn't been finalized, do we know this for a fact?

EDIT:

According to The Wall Street Journal, checks will be based on household income in either 2020 or 2019 tax returns, whichever is on file with the Internal Revenue Service when the payments are made.

https://www.masslive.com/politics/2...-as-republicans-push-for-40000-threshold.html

 

[PatrickA5]

Well, we won't qualify for the new checks (3rd round) based on 2019. We "may" qualify based on 2020 depending on where the cutoff is. My question is will this 3rd check be "trued up" on 2021 returns (filed in 2022)? Seems like a lot of people will have already filed their 2020 returns before these checks are mailed out.

 

[scrabbler1]

Since the bill hasn't been finalized, do we know this for a fact?

EDIT:



https://www.masslive.com/politics/2...-as-republicans-push-for-40000-threshold.html

Because I would qualify for a check based on my 2020 return but not my 2019 return, I'd have a strong incentive to file my 2020 return as soon as I can or else I'll have to wait a year before I actually see the money.

 

[PatrickA5]

Having just finished my taxes, I discovered that my AGI has gone up. If the future $1400 stimulus is based on our 2020 returns, and if the criteria are the same, I will not qualify to get that stimulus even though I did qualify to get the previous two.

I know, cue the tiniest violins playing the saddest song ever.... I'll be fine.

Same boat here, BUT I still have the option of recharacterizing a 2020 Roth contribution to a Traditional contribution (and taking a deduction) which might get us closer to being qualified for the 3rd round. All depends on the cutoff and what tax year this new round is actually reconciled with (2020 taxes or 2021 taxes?)

 

[harllee]

For those of you still looking for your last stimulus check, I suggest you continue to look for it in your mailbox. My mother just got hers in the mail about a week ago.

 

[GenXguy]

Having just finished my taxes, I discovered that my AGI has gone up. If the future $1400 stimulus is based on our 2020 returns, and if the criteria are the same, I will not qualify to get that stimulus even though I did qualify to get the previous two.

It's based on your 2019 AGI.

Well, we won't qualify for the new checks (3rd round) based on 2019. We "may" qualify based on 2020 depending on where the cutoff is. My question is will this 3rd check be "trued up" on 2021 returns (filed in 2022)? Seems like a lot of people will have already filed their 2020 returns before these checks are mailed out.

I didn't see a complete answer for this in the thread, but the bill says it's a tax credit for the 2021 tax year, for which you would file your return in 2022.

The advanced payments are based on 2019 and 2020 tax returns.

Government Reference:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/7.%20Tax_sxs.pdf

"Treasury is directed to issue this credit as an advance payment based on the information on 2019 or 2020 tax returns."

"Taxpayers receiving an advance payment that exceeds their maximum eligible credit based on 2021 tax return information will not be required to repay any amount of the payment to the Treasury. If a taxpayer’s 2021 tax credit exceeds the amount of the advance payment, taxpayers can claim the difference on their 2021 tax returns."

Government Reference:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/7. Tax.pdf

"8 ‘‘SEC. 6428B. 2021 RECOVERY REBATES TO INDIVIDUALS. 9‘‘(a) IN GENERAL.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2021 an amount equal to the 2021 rebate amount de-termined for such taxable year."

Questions and answers - non-government reference:

https://www.forbes.com/sites/anthon...elated-stimulus-checks-what-you-need-to-know/

Q: Is it determined based on our 2021 tax returns, because if so, we’re going to be waiting awhile, and I’d like that cash ASAP.

A: It works like this, we will all ultimately claim a “credit” equal to the stimulus payments we are owed based on our 2021 tax information, on our 2021 tax returns. But to speed up that process, the checks you receive if the bill becomes law will be based on either your 2019 or 2020 tax return.

 

[Sue J]

DH is a spender and I am a saver. He wants his $600 to buy stuff. The other half will go into our general savings. There’s nothing that I need to spend it on right now.

Then there’s DHs broken crown a few weeks ago. $699 even with our dental discount plan. There goes my half!

We gave away half of our previous stimulus. This time we’re keeping it.

And stimulating the dentist.

And a few days ago he broke another crown! This is a molar way in the back that got a crown many years ago. The old crown could not be reused, the remaining tooth has a few cracks and had to be ground down and some pins inserted. $834 even with our discount plan!!!

So there we go, stimulating the dentist's economy again. I'm glad we have the money to take care of the important things without hesitation.

In all honesty, the stimulus money is a nice addition to the household but we are doing fine without it. Like many here, we don't need it. COVID has been a disruption to our lives and our community but not our ability to support ourselves. If it shows up in our bank account we will make good use of it.

 

[RxMan]

We gave a good chunk of the first one to our local food bank. The most recent $1200 will result in at least half going to our local food bank. I’ve already donated a quarter of it and I plan to make another donation soon.

These food banks were swamped with demand this past year. They do good work and provide necessities to the communities they serve. My wife and I were blessed to remain employed during this pandemic. We’re thankful and wanted to support a good cause that needs the money more than we do.

 

[PatrickA5]

I didn't see a complete answer for this in the thread, but the bill says it's a tax credit for the 2021 tax year, for which you would file your return in 2022.

The advanced payments are based on 2019 and 2020 tax returns.

Government Reference:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/7.%20Tax_sxs.pdf

"Treasury is directed to issue this credit as an advance payment based on the information on 2019 or 2020 tax returns."

"Taxpayers receiving an advance payment that exceeds their maximum eligible credit based on 2021 tax return information will not be required to repay any amount of the payment to the Treasury. If a taxpayer’s 2021 tax credit exceeds the amount of the advance payment, taxpayers can claim the difference on their 2021 tax returns."

Government Reference:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/7. Tax.pdf

"8 ‘‘SEC. 6428B. 2021 RECOVERY REBATES TO INDIVIDUALS. 9‘‘(a) IN GENERAL.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2021 an amount equal to the 2021 rebate amount de-termined for such taxable year."

Questions and answers - non-government reference:

https://www.forbes.com/sites/anthon...elated-stimulus-checks-what-you-need-to-know/

Q: Is it determined based on our 2021 tax returns, because if so, we’re going to be waiting awhile, and I’d like that cash ASAP.

A: It works like this, we will all ultimately claim a “credit” equal to the stimulus payments we are owed based on our 2021 tax information, on our 2021 tax returns. But to speed up that process, the checks you receive if the bill becomes law will be based on either your 2019 or 2020 tax return.

I'm going to try and get my 2020 taxes done so the IRS uses 2020 income.

Of course, this depends on whether or not the next round actually happens.