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Breaking down second stimulus checks with a tax expert

Stimulus check
Posted at 11:16 PM, Jan 01, 2021
and last updated 2021-01-02 08:03:34-05

BUFFALO, N.Y. (WKBW) — Some Western New Yorkers started off the new year with second stimulus checks.

Christopher Fabian, VP of tax operations at EG Tax, said people who received the first check last spring should expect this one, unless they earned more than the new income cutoff.

The new cutoff is $87,000 for a single filer and $174,000 for married joint filers. The cutoff to receive the maximum payment is $75,000 for a single filer and $150,000 for married joint filers.

The payment is based on 2019 tax returns.

“So I’m hoping that everybody who filed by October 31st will get it,” Fabian said.

Julie Ortega of West Seneca received the payment Friday morning. She said her family's grateful to have the extra money, but dissapointed that once again she is not getting money for her 19 year old son.

“My son Ryan living in this household is no different than my 12 year old," Ortega said. "So I don’t know why we’re able to file for him, and claim him as a dependent on our taxes and what not, but when it comes to things like this he’s not considered.”

Fabian said a new group that could receive the check are college students claimed as dependents in 2019, but won't be claimed for 2020.

“That college child that didn’t get it could get it this year on the 2020 return,” he said.

Some of Fabian's clients are facing roadblocks if they closed the bank account the first stimulus payment went to or ended relationships with someone they shared accounts with.

"So if they changed their bank account, then it will get bounced back to the IRS and the IRS will mail a check," he said. "If they're going to an ex-husband, ex-wife, ex-boyfriend, ex-girlfriend's account play nice and hopefully they'll share and give it to you."

Another thing Fabian said to be aware of is debit card payments. People who received the first stimulus on a debit card should expect the second stimulus to be deposited on that card.

"The money will probably go right on that debit card, so hopefully people didn't throw that away because otherwise they're going to have to get a hold of that institution that was issuing them and get a new one re-issued," Fabian said.

Fabian said if you don't need the stimulus to pay off current bills start pre-paying car loans, mortgage payments and rent, so there's one less thing to worry about when the stimulus money is used up.

As for the rest of the year he said make a budget, find free activities, and save.

“They always say pay yourself first," Fabian said. "Take your paycheck, put money in your savings account, then pay your bills. If you can do 10%, I’d keep 10% aside each paycheck just incase something happens.”

He said the pandemic put a greater emphasis on the need for an emergency fund. The need comes at a time when many face financial hardships.