Money experts providing answers in stimulus check confusion
DELMARVA – Many Americans awoke to a deposit in their checking accounts as the governments stimulus checks began rolling out. With the money has come a lot of confusion. 47ABC spoke with money experts and state tax officials to get answers to some of the most common questions.
Where can I check on the status of my stimulus check?
The IRS launched a portal to help people navigate how they can keep track of their stimulus checks. Direct deposits began going out on April 11th, but those waiting for checks in the mail will have to wait. The IRS says it will begin sending paper checks starting April 24th, starting with those with the lowest adjusted gross income. According to accountants, people should make sure their tax information is up to date while they’re waiting for stimulus checks. This helps to ensure that the IRS can more easily give an estimate on when your check should be deposited. “The IRS will use the latest filed tax return, whether it’s 2018 or 2019, and if you file that tax return with a direct deposit of your refund, the IRS will continue to use that information,” said Phillip Cheung of CG Accounting Group.
What should I do with my stimulus check when I get it?
Maryland comptroller Peter Franchot tells 47ABC that when people do get their checks, they should save the money if they can. “It’s a little bit of a false hope that it’s going to tide you over. Much better is to keep the six or seven billion dollars that are right now in peoples control. You know, ask your creditors before you deplete those amounts,” said Franchot. However, money experts also say that if you can’t afford to save, the money is still perfectly good to use for life’s expenses. In an email, Farmers Bank of Willards vice president Bill Tuner said, “Many will have to use these funds to pay non-housing bills (credit cards, vehicle loans), buy groceries, buy essential household items, or pay rent or mortgage payments. Whatever the use, these payments are not considered taxable income for tax year 2020.”
Will spending the money now hurt me in the long run?
Cheung says that looking ahead, for many Americans the stimulus check could affect the amount of money they get in next year’s tax refund. “This is an advance payment for the next tax year. So, a lot of folks that are actually receiving this money may experience smaller refunds when they file their tax returns next year,” said Cheung. Even if the stimulus checks might make a dent in next year’s tax return, Cheung says people should know that they won’t owe anything back to the government. “In the CARES Act, economic impact payments are not to be included in taxpayers’ income for tax purposes,” said Cheung.
How can I avoid scammers during this time?
Money experts say that the biggest thing for people to be aware of right now is phishing and scams that aim to steal personal information. The IRS says that you should never give out personal information to anyone over a phone call because they do most communication through mail. They also say that you shouldn’t click on any links or attachments in emails that claim to be from the IRS.
Who can I turn to if the stimulus check isn’t enough help?
Those needing extra financial aid during this time are encouraged to reach out to their bank or lenders to see if they have any extra resources available. “If you find yourself and your family in financial distress, we recommend that you reach out to your lender(s) to determine if there are any type of relief programs available to assist you with your financial situation,” said Turner. He says right now, some banks are offering forgiveness when it comes to payments. “Many are offering some type of deferred payment programs to provide financial relief during these uncertain times,” said Turner.