When the magnitude of the pandemic became obvious for all of us, the U.S government came out with an idea to resurrect the economy: the new stimulus check.
Back in march, 2020, each person making $75.000/year or less received $1.200 ($2.400 for couples making $150.000/year) directly into their bank accounts since the weekend of the 11 and 12 of April. In the second round, back in December, every person received $600 ($1.200 for couples).
Of course, the COVID relief bill measures were a big help for all of us, but if we analyze them closely it is easy to determine that they were not enough. Knowing this, we can’t help but ask ourselves this next question: will there be another stimulus bill? If so, when is it going to arrive?
Even though the tax season is about to start on February 12, it is important to know that the stimulus payment you received doesn’t count as income. This means that you don’t owe any tax on it, so you don’t need to worry about increasing the amount of money you owe when you fill your 2020 tax return, all of this according to the IRS. Either way, it is important to keep ourselves up to date so we can be prepared for every stimulus check update.
First of all, the Congressional Democrats are using a legislative tool to speed up the process of getting a third check. That payment should be a little different from the payments given before, so some people might get a lot of money, and some people are going to receive a smaller check. This entirely depends on the formula used to determine which groups are eligible and which aren’t.
The largest stimulus proposal is 1,400 USD per person. Of course, this is being targeted to families with middle and lower incomes according to the parameters used to determine the range of income. It is clear that not everyone will qualify for a 1,400 USD payment. In fact, the latest stimulus bill details are set to exclude people with an Adjusted Gross Income of 100,000 USD a year or more.
Nonetheless, this cut-off will depend on the nature of the taxpayer – if we are talking about heads of households or married couples, the AGI can increase up to 150,000 USD and 200,000 USD respectively. That being said, a third stimulus payment can possibly arrive in early March, all depending on how fast the bill goes to the Senate.
Naturally, not all people will receive their funds in an immediate way. Some of them will have to wait until late April due to all the variables that can affect each person depending on the tax season.
We need to remember that former President Donald Trump signed a stimulus bill back in December with only a 17-day limit to send all the checks. This caused a lot of direct deposit errors and bureaucratic chaos, so the authorities are entitled to prevent these kinds of mistakes from happening again.
It is possible to find any missing money that you need to claim if you file your taxes sooner. We highly recommend you to finish all your responsibilities with the IRS as soon as you can, mostly because it’s widely known that your possible check and your taxes have a strong relationship. This means that someone who completes the process without any problem will probably get their stimulus check faster than someone who files a tax extension, for instance.
In addition, let’s remember that this third payment will include dependents of any age, like college students and people with disabilities. Besides, this check is set to consider all mixed-status households. For instance, if you are not a US citizen but you have a child born in the United States, then you might be eligible for getting this new stimulus.
Obviously, this new increased margin is not considering undocumented workers, at least not so far. The best advice that we can give you is to keep your documents and taxes up to date so you can get your payment as soon as you can. This pandemic has been a nightmare to most of us, so every help that we can get will be appreciated by the American people.
Let’s include a section where it talks about instances where they really need the stimulus check, maybe they lost their job or the pandemic put them in a worst situation and they have no other choice but to get a loan until they get their stimulus check.
Evendentelly, inflation is something that we, the people, see as a harmful factor for our pockets. However, the Fed has historically considered inflation as something good for the economy because it represents a growth in the general economy while helping the central bank act in time during the next crisis to come.
Yes, we are going to see some volatile prints on inflation coming up, but it all depends on how the market is really going to react to the circumstances at the moment. It’s a cyclical process that has happened before and that will happen (maybe) forever.
The best advantage that we can have is to be financially educated regarding currency issues. The understatement of what we can expect for the future will give us a bigger picture of how to react and how to protect ourselves.
For example, right now, the interest rates for loans are at their lowest. So, it is a pretty good time to borrow money since it’s cheaper than in other periods of the economy. And due to inflation, paying off debt it’s even easier, since what you borrow today will have less value at the end of the year.
Therefore, requesting a loan to fix your house, get the car you want or to pay other debts would be a smart move.