- So I am filming this on a Saturday morning
as a somewhat emergency-type video,
I've been getting bombarded with questions on Instagram
and in the YouTube comments about the $1200 stimulus check
that many of us are going to be getting.
So I'm going to be answering the three most common questions
I've been getting which are, whether or not you have
to pay taxes on this money, second of all,
how they are determining whether or not you are eligible
for the credit and third and finally,
how are they actually sending you this money?
Because the truth is guys, if your information
is not current with the IRS, there could be delays
with your payments and depending on what tax year
they are using, for determining eligibility,
you may be eligible for the full payment a partial payment
or no payment at all.
So stick around to the end of this video guys,
if you wanna see the answers to those three questions.
So yesterday, a $2 Trillion stimulus bill
was passed in response to a virus that shall not be named,
so that this video does not get demonetized.
And as part of that bill, they have officially passed
direct payments to Americans which should arrive
within three weeks, and that includes payments of up
to $1200 for single filers and $2400 for married filers,
plus $500 per dependent or child.
But there is a catch here and that is the fact that
if you earn more than $75000 per year,
or $150000 as a married couple filing jointly,
that $1200 check begins to diminish.
And the credit is entirely phased out
at the 99000 dollar mark for single filers
or a 198000 dollars for married filing jointly.
And if you guys are curious how much your check should be,
I'm gonna put a link down below.
CNBC has a pretty handy calculator on their website
where you put in this information and it will tell you
what your rebate check should be.
So for example, if you are a single person
with no kids earning $85000, you will be getting
a check for $700.
But first of all, let's talk about whether or not
you have to pay taxes on the stimulus checks being sent out.
And the short answer here guys is no, you do not have
to pay taxes on this money because it is considered
to be a recovery rebate.
The only situation you might run into here
with this tax rebate is filing your 2020 taxes
in the year 2021.
Because you don't have to pay taxes on this income
but you do have to include it on your tax return
to make sure you got the correct credit.
And if you've got a larger credit than you should have,
you will likely not have to pay it back.
And this is according to Nicole Kaeding,
who is the vice president
of the National Taxpayers Union Association.
So if they end up sending you too much money,
there is a chance that you may have to pay some of it back
but it is unlikely that you will have to do so.
Next up, this is one of the most important parts here
and this is determining eligibility for the credits.
How are they going to determine how much income
you have made?
Well, it is going to be based on
your most recent tax filing.
So if you already filed your taxes for 2019,
they're going to use the number on that tax return.
However, if you have not filed your taxes yet,
you may be at an advantage here, where you can use either
your 2018 return or your 2019 return,
whichever one is a lesser earnings.
And let me explain a scenario
where you might want to do this.
So let's say in 2018 you made $70000 and then in 2019,
you've got a promotion and you made 85000.
Well, if you haven't filed your taxes yet,
you should hold off and have the stimulus check
based on your 2018 earnings,
that way you get the full check.
Whereas if they go off of your 2019 income of 85000,
you would only get $700.
So if your earnings jumped in 2019 and put you over
that threshold and you haven't filed your taxes,
you should hold off for a couple of weeks
to get a larger check.
Now the second scenario is the exact opposite.
Let's say for example you made a boatload of money in 2018,
and then in 2019, you got laid off.
If you haven't filed your taxes yet,
you should file A-S-A-P.
Especially if you are over the threshold for 2018,
but you fall within it or below it, for 2019,
meaning you could get a partial or full credit.
For example, if you made $100000 in 2018,
you would be ineligible for this credit.
But if in 2019 you made 65000, you are eligible
for the whole credit.
So this person would want to file their taxes
as soon as possible, in order to be eligible for that credit
to make sure they are not basing it off
of your 2018 tax return.
And then lastly, how do you actually receive the money?
Well it is helicopter money but it's not gonna come falling
from the sky, they are going to give it to you based
on your payment preference,
from your most recent tax return.
So if you signed up for direct deposit,
it will be direct deposited into whatever bank account
you received your most recent tax refund.
However, if you get a check mailed to you,
it's going to be mailed wherever your last check was mailed
from your previous tax return,
and this is very important because if you have moved
since you filed your last tax return,
you need to fill out Form 8822,
which is a change of address form with the IRS A-S-A-P
and I'll drop a link to that down in the description below,
if this is the case.
Or another option is filing your taxes for 2019,
gives you another opportunity to update this information
and have your current address with the IRS
as long as you're 2019 earnings
don't push you above that limit.
So there you have it guys, those are the answers
to the three most common questions I've been getting
about the $1200 stimulus bill,
and if you enjoyed this video
in this kind of emergency upload here on a Saturday,
all that I ask is that you drop a like on this video
to show your support.
So in a nutshell, since this is a rebate
you do not have to pay taxes on it.
The only situation where you may run into paying it back
is if your 2020 income pushes you above the credit
you were supposed to receive, that is an unknown right now.
And eligibility and the amount you receive is based
on your most recent tax filing, which is 2018 or 2019.
So if you haven't filed your taxes, you do potentially
have some wiggle room here.
And lastly, they're going to pay you based on the way
they sent you your last tax return.
So you may need to file your taxes to get
that information updated or fill out
a change of address form if you have moved.
But thanks so much for watching this video guys,
I hope it helped out and answered your questions.
If you have any other thoughts for future videos,
drop them in the comment section below
and I hope to see you in the next video.