The 1.9 trillion stimulus package is nearly a done deal. Once the deal is finalized, Americans will be receiving checks very soon. If it follows the pattern of the last package, that means within days or weeks. There are many benefits that are both public (think schools and health care) as well as private (think more cash in your hands). This article will focus on the latter.
According to an article posted on CNBC, Most U.S. households should expect extra cash this year from stimulus checks and expanded tax credits. Those who earn $65,000 or less will be getting on average $3450.00 in benefits. This number will vary based on whether you have children or not. It reflects a total of the stimulus payments, and increases in the earned income tax credit and the child tax credit.
https://www.cnbc.com/2021/03/09/covid-stimulus-update-house-plans-to-pass-relief-bill-wednesday.html
The chart below published on CNBC on March 10, 2021 depicts the average benefits folks in different income levels will get. These numbers are for individuals, not households. Also, these numbers combine several benefits including direct payments, expanded tax credits for children, and the earned income credit.
The article also points out that these numbers are based on amounts that do not reflect all tax deductions or investments losses. Therefore, it is possible that households with a higher income could do a little better by qualifying for a lower bracket.
Direct stimulus payments will be $1,400 per person as long as individual income is less than $75,000 or married couples filing jointly is less than $150,000. There is a quick phase out this time that ends at $80,000 for individuals and $160,000 for married couples filing jointly.
There will be an increase of the child tax credit, from $2000 per child, to $3000 per child. This will be applied to the 2021 tax year. Similar phase-outs will apply to the child tax credit.
According to CNBC, “The bill also raises the income level (to $9,820 from $4,220) at which the earned income tax credit reaches its maximum, as well as changes the phaseout to begin at $11,610 instead of $5,280 for individual tax filers. The ages for qualifying for the credit also would be changed for this year: The minimum age would be 19 instead of 24 and the maximum age of 65 would be eliminated.”
This means more money for most of us. I know that I will be investing some of this money into cryptocurrency. I will probably look to more traditional savings options. As a household, we will probably splurge a bit this summer on a much-needed vacation. Perhaps by then, I will reap a bit from this crypto run. In my humble opinion, I believe that this current run will likely be extended because of the influx of extra cash into the average person’s hands.
As always, buy, sell, trade, and invest at your own risk. If you like this blog, let me know with a thumbs up and follow. I will continue to work hard. Thanks!
