How much are? Eligible adults receive $1,200 each, plus $500 per child. You’ll receive that full amount if you’re a single taxpayer with income less than $75,000 a year or a couple married filing jointly with less than $150,000 a year. Above those amounts, the stimulus funds phaseout to zero for single taxpayers above $99,000, and joint filers above $198,000 a year.
When? The IRS says most of people eligible will have their money within the next two weeks. Unfortunately, it will take much longer if you typically don’t file tax returns or opt to receive paper checks. The IRS has promised to rollout a “Get My Payment” app in mid-April. It will provide payment status, confirm direct deposit or check, and enter your information for direct deposit. Here's a link: https://www.irs.gov/coronavirus/economic-impact-payments
How will I it? If the IRS has direct deposit information for you already, your funds will automatically be deposited in the same bank account. If you’re receiving Social Security retirement, disability, or survivor benefits, your money will automatically be deposited in the same bank account as your benefits. Even if you will not be filing taxes, you may still be eligible to receive the stimulus funds. Here's a link with more information. https://www.freefilefillableforms.com/#/fd/EconomicImpactPayment
What should I do with the money? If you’re already unemployed or might be, spend what you have to on just basic essentials. Reach out to your creditors, contact your landlord, utility companies, or mortgage companies and ask for help. They may be able to temporarily reduce your rent. Many cell phone and utility companies have pledged not to cut service or charge late fees during the pandemic. Mortgage companies may allow you skip some payments without penalty.
If you can add to or start an emergency fund. We don’t know how long the full impact of the Coronavirus will last. So try to put away enough in a savings account now to cover six months’ worth of expenses.
If your job is secure, you have at least six months’ worth of expenses put away in your emergency fund and you don’t need your stimulus funds immediately, here are a few more ideas:
Consider putting your money where your heart is. A lot of people and small businesses are really suffering. You can donate to a charity, such as a local food bank or group fighting the disease. Find ways to support your local small businesses, perhaps buying meals to deliver to healthcare workers on the Coronavirus front lines. Or buy for a gift card or service online to use after social distancing is lifted. It all helps.
If you have high interest credit card debt this could be a good time to pay that down that debt or maybe even pay off completely. Imagine exiting this crisis with that burden lifted and having money freed up for you other goals and priorities?
Still have money on the table, you might consider investing in a Roth IRA. Any future increase in the value would be tax-free if you withdraw after age 59 ½. And you can still make 2019 contributions up to July 15 this year, as well as contributions for 2020. If you have children or grandchildren you might consider establishing a tax advantaged 529 account for a child’s education. Or with interest rates low again, it may be worth using stimulus money to refinance you mortgage.
No matter where you may want or need to spend your stimulus money, this is a good time to contact a financial advisor to help navigate the benefits and pitfalls of different options. Still have questions? Reach out and let’s do this, together. https://www.moneypilotadvisor.com
