Provided by Blanke Schein Wealth Management
The federal government is providing a little economic relief to many taxpayers.
The Internal Revenue Service is sending millions of Economic Impact Payments – or as they are commonly called, stimulus checks – to households.
Here are some facts to know about these payments. Keep in mind: this article is for informational purposes only. It’s not a replacement for real-life advice, so make sure to consult your tax professional before modifying your strategy.
Who gets a check?
If you have a Social Security Number and have not been claimed as a dependent on another taxpayer’s most recent federal tax return, you may be eligible for a stimulus payment of up to $1,200. Any money you get is tax free, and the payment will not be counted against a federal tax refund coming your way or federal benefits you currently receive.1
Can I get a direct deposit rather than a paper check?
Yes, assuming you provided a bank account number to the I.R.S. when you last filed federal taxes. If you did, the I.R.S. can route the stimulus payment right into that bank account. Another option is to update your account information through the I.R.S. website. Absent of such information, the I.R.S. will mail you a check instead.1
When will my payment arrive?
Secretary of the Treasury Steven Mnuchin expects that most eligible taxpayers will receive their stimulus money in April. Taxpayers waiting for a check in the mail may get their payments later.2
Where can I track my payment?
Visit irs.gov/coronavirus/get-my-payment to check its status.3
Will most eligible taxpayers receive the full $1,200 payment?
Yes. The payment amount is calculated using your adjusted gross income (AGI) from your most recently filed federal tax return. A qualifying single filer with AGI of $75,000 or less will get the full $1,200. The same goes for someone filing as a head of household who has an AGI of $112,500 or less.2,4
Joint filers (i.e., married couples) with an AGI of $150,000 or less will get a total of $2,400. Joint filers and heads of households who have kids may get more – specifically, an additional $500 for every qualifying child younger than 17. (A married couple or head of household with three young children could receive nearly $4,000.)2,4
Single filers with AGIs of more than $99,000, child-free heads of household with AGIs of more than $136,500, and child-free joint filers with AGIs above $198,000 will not receive stimulus checks.2,4
Single filers with gross incomes of $12,200 or less in 2019 and joint filers with gross incomes of $24,400 or less in 2019 must visit irs.gov/coronavirus/non-filers-enter-payment-info-here to facilitate their payments. This also applies to taxpayers who have not yet filed a 1040 form for the 2019 tax year or have no plans to do so.2,5
Do you have to repay the money later?
No. The stimulus payment is not a loan to you from the federal government. Misinformation about this is circulating, and as MarketWatch notes, it may stem from the way the stimulus checks are technically defined. Technically speaking, the stimulus money is a 2020 federal tax credit. The I.R.S. is effectively giving an advance tax refund to eligible taxpayers. One asterisk, though: if you owe child support, the I.R.S. has the option to use some or all of your stimulus payment to reduce the outstanding amount.6
Does this stimulus payment count against your 2020 taxes?
No. It impacts neither federal tax refunds nor federal tax liabilities.6
Robert L. Schein, AIF®
Partner, Managing Director
Blanke Schein Wealth Management | Hightower
Securities offered through HighTower Securities, LLC member FINRA/SIPC. HighTower Advisors, LLC is a SEC registered investment advisor.
HighTower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor before establishing a retirement plan.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1. BusinessInsider.com, April 22, 2020
2. The New York Times, April 16, 2020
3. IRS.gov, April 21, 2020
4. TheBalance.com, April 10, 2020
5. IRS.gov, April 22, 2020
6. MarketWatch.com, April 18, 2020
Blanke Schein Wealth Management is registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.
This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.
All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and Hightower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.
This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of Hightower Advisors, LLC, or any of its affiliates.