Why You Didn't Get the Full Stimulus Payment

Local CPA explains why so many Americans didn't get all the money they thought they would in the recent stimulus checks

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There are clear guidelines for which Americans will receive stimulus checks.

There are also clear guidelines on how much those checks might be and they are not all or nothing, according to Bill Dendy, North Texas CPA and Registered Principal-Raymond James Financial Services.

“A person who filed single on their 2018 or 2019 tax returns and their Adjusted Gross Income (AGI) is under $75,000 should have received, or will receive, the full $1,200. That cash decreases incrementally as your AGI goes up. Once that AGI reaches $99,000, you will not get any money,” Dendy said. “That number is $2,400 for those who filed married, with the incremental decreases to $198,000 AGI.”

Some Americans thought they would be getting some extra cash for their children living in their home.

“Keep in mind that the additional $500 for a child on the stimulus is for children under the age of 17. So if you have that high school senior at 17 or 18 years of age, we don’t get that additional $500 credit for that," Dendy said.

While 22 million Americans have filed for some sort of jobless benefits, there are still Americans who are working, while they may be working from home or getting reduced hours. Dendy said this is a great time to start evaluating your finances and getting yourself prepared for what might be to come.

He said there are three things to keep in mind:

“As we continue in these uncertain economic times, it makes sense to have ready cash reserves. The recommended amount is a function of future income outlook and risk tolerance," Dendy explained. "Generally, three to six months of living expenses for those with more stable, more certain incomes and up to 12 months for those with questionable income or who need a better ‘sleep factor’. Second, after sufficient ready cash, then debt should be examined. Paying off credit card debt is like getting a guaranteed, after-tax rate of return equal to the interest rate. Thus, it is so important to eliminate the high-interest debt, especially credit cards with rates of 9.9% or greater. If you can cover those first two, the average person should consider investing. Investing could range from long-term FDIC CDs for an investor concerned with preserving principal, to the aggressive individual stock for the investor looking to hit an investment home run, with the commensurate risk of striking out or total loss of principal.”

He also said now is the time to possibly consider the IRA Conversion Concept.

“The IRA Conversion Concept is to convert traditional IRAs to Roth IRAs, which entails paying tax at today’s rates and never pay taxes again. The conversion will increase taxable income and may also increase tax brackets with the higher income, but for many who are in a period of unemployment and who are blessed with an abundance of savings, this is an opportunity to take advantage of their lower income in this year, which may make this an ideal strategy-especially if they believe taxes are going to go up in the future. People really should consult their CPA, tax attorney, or Financial Planner to determine what may work best for their situation,” Dendy said.

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