Stimulus package - Plain and Simple

The Treasury and IRS announced that the economic impact payments would be distributed in the next few weeks. Here is what it is, plain and simple:

• Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.

• For filers with income above those amounts, the payment is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.

• Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

• Social Security recipients and railroad retirees, who are otherwise not required to file a tax return, are eligible for the payment without having to file a return.

• Will be paid through direct deposit. The treasury plans to set up a portal for individuals to provide banking information.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.

TIP #1

If you have not yet filed your taxes for 2019, the IRS will use your 2018 tax filing to calculate the payment. If you have not filed your 2018 tax return, you will need to file to get the economic impact payment. If your 2018 (adjusted gross income (AGI) was significantly lower than your 2019 AGI, you should wait to file your 2019 taxes but file before July 15, 2020. 

Tip #2

Because the due date for filing the federal income tax has been postponed to July 15, the deadline for making contributions to IRA is also July, 15th 2020.

Tip #3

Contributions to Health Savings Accounts (HSA's and Archer Medical Savings Accounts (MSAs) contributions are also extended to July 15, 2020.

Tip # 4

Student loan payments are deferred for ninety days. No penalty or interest will be assessed. For most companies, it is automatic. However, check with your lender to see whether you qualify. You may continue making your payments but towards your principal. You may need to log in and assign the amount directly to the principal.

Tip #5

Please call your mortgage company or visit their website if you need to apply for a forbearance. Be sure you get a full understanding of the details.