Are these checks just an advance on our 2020 tax refunds?
Meaning if I get a check for 1k$ now, does that just get deducted from any refund I may get next year? Or, if I owe the irs, does it get added to what I owe them on my 2020 taxes?
Or is this literally free money? Doesn't seem like it could be....
It's free money, and I personally know two people already that have received them.
They did just release a statement that indicates that it will not be added to your tax liability or presumably income for 2020.
From an AP article:
The U.S. Treasury Department and Internal Revenue Service, which are working to deliver the money to people, confirmed to The Associated Press that households will not have to pay back the money in next year’s tax filing.
“This is not an advance and there is absolutely no obligation to pay it back,” Treasury spokeswoman Patricia McLaughlin said in an email.
Ours was deposited into the bank today.
Thank you both!
Mine just arrived today as well
https://www.businessinsider.com/personal-finance/will-we-have-to-pay-back-stimulus-check-2020-4
"Your stimulus payment is technically a refundable tax credit, which reduces your 2020 tax bill on a dollar-for-dollar basis. It's like having store credit at your favorite clothing shop: When you apply it to your total bill, it reduces what you owe. In this case, even if you have no tax liability, the government is "refunding" your credit back to you as a cash payment.
You usually can't claim a tax credit until you file your taxes, since you don't know what you owe until the year is over. Because of the severity of this national crisis, the government is giving qualifying taxpayers their credit early in the form of a cash payment. It's an advance of a refundable tax credit — not an advance of your tax refund itself. It will not lower your tax refund this year or next year."
Sound like there's a bunch of confusing language calling it a tax credit, but the bottom line is that it's free money.
Nothing is free.
While our Gov't up here in Canada is throwing the kitchen sink at the virus, I'm expecting to see 1) increased taxes in 2021, and 2) reduction in services. Money has to come from somewhere.
In reply to wvumtnbkr :
I came here to ask the same question.
Ours showed up today too. Couldn't help but wonder what "strings" may be attached to the money, but maybe there aren't any.
I'm not holding my breath on seeing a check any time soon. I've been self employed for the last several years and haven't had a tax refund in a long time. I pay what I owe and nothing more.
What is weird is that my username for the IRS site suddenly doesn't work. I've been logging in and paying via the direct payment portal for years, but now the IRS is like "new phone, who 'dis?".
Ain't nothing free. Mine showed up yesterday morning.
1- Silly because I'm still working
2- Way more than I expected
3- Screw the politicians.
Hello inflation, my old friend.
Would have been nice to get the full amount, I'll probably just use it on debt instead of anything fun.
Yeah, it's helicopter money.
Oh, and I changed the title of this thread to remove the shade.
SkinnyG (Forum Supporter) said:Nothing is free.
While our Gov't up here in Canada is throwing the kitchen sink at the virus, I'm expecting to see 1) increased taxes in 2021, and 2) reduction in services. Money has to come from somewhere.
Yep, it comes from your government. Which if in these current times wants to throw freely at the people for a little while to keep economies happening, at the risk of devaluing it in the long term, I can get behind. It'll catch up eventually, but who knows when/how that'll actually look like when this shakes out? If the Canadian economy is ticking over and in better shape than other locals, dumping money into it right now may actually be a better way to keep your money's buying power stable/higher than other nations/economies in the long run.
And if they have to borrow to do it, what does that actually mean? Well, I think any entity that purchases that debt is really betting/investing in the (in this example, Canadian) economy to be stronger than others in the long run, and willing to tie their own economy to it as well.
In reply to Tom Suddard :
Thank you.
barefootskater said:Ain't nothing free. Mine showed up yesterday morning.
1- Silly because I'm still working
Yeah I agree that people that are still working are getting it honestly cause we will have to pay it back one day.
We are planning on donating a decent amount of it to charities and spending some at small businesses.
Friend of a friend - wife is a CPA, he is a Pharm.D, so high income - just got theirs for $1,586.32. Appears that they're doing the phase out down to the penny. I don't know why that surprises me other than I read that it is decreased $5 for every $100 in income over the threshold.
We got ours for $2,400. We'll get another $500 at tax time - I think that will be true for any children born during the calendar year 2020. I thought our situation was a mildly interesting one: Our first was born in 2018; she passed away in 2018 also. We obviously claimed her on our 2018 taxes, and obviously did not on our 2019 taxes. Our second daughter was born in March 2020.
Had we not filed our 2019 taxes already, we would have received the $500 credit for our first daughter... Even though we would have had to pay that back at tax time this year. BUT we will receive that again at tax time, for our second daughter.
Just saw mine show up in my account. Single me and claim one kid so I got $1700. Paid off Visa with it, otherwise nothing exciting.
Somebody has to pay it back eventually. Don't let that stop anyone from doing productive things with it, whatever you personally decide that it is.
It would be nice if it were a fair payment scale. The news says $1200 for up to $75k income, then less and less until you reach high 6-figures, then you get nothing.
What they don't report is that if you earn over $1M, you're getting the equivalent of about $1.7M in tax breaks and funds. Per person.
Clearly a partisan report filled with hyperbole and misleading phrases, and I promise I'm not making this political, just food for thought. I'm not a conspiracy theorist, but there has been a lot of "look over here and panic while we shove this legislation through."
Ours came today...
In reply to Curtis73 (Forum Supporter) :
Hmm real quick everyone pay me as much as you can so I've earned over $1mm this year then I'll give it all back plus your proportional share of the $1.7m.
I was listening to an economist just now who likened it to spraying water on a forest fire in that as long as most of the water was hitting the fire, trying to make sure that every individual tree was getting just the right amount of water was a waste of time. And, yeah, nothing is ever free. We the taxpayers will need to pay for it eventually, but I assume the choice is that we either kick the can down the road and maybe have an absolute disaster later or we close up shop and have an absolutely disaster for sure right now. Not that I agree or disagree with that, just that's what was going through the minds of those who decided this was the proper course of action. Not that I do or do not believe that it was or was not.
I'm great with money... my own money. I don't pretend to know things about a trillion-dollar world economy, but parts of the deal stink. Having said that, I am unemployed from a job where I earned just slightly above poverty wages, so I'll take the $1200 so I don't lose my house or get thrown into chaos. My bank is not one of the ones offering mortgage deferrals, so my income stopped but the bills didn't.
Prior to reading that article (and others like it) I felt like the plan was at least quasi-fair given the amount of time they had to throw it together, but like most other things, I have a feeling it's going to slight the poorest, place the burden on middle-income taxpayers, and favor the richest.
Just checked. Mine showed up this morning.
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