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8 million Americans to receive stimulus checks via debit card

Campaign 2016 Why It Matters IRS
Posted at 1:38 PM, Jan 07, 2021
and last updated 2021-02-04 19:03:14-05

The IRS said on Thursday that nearly 8 million Americans are slated to receive a stimulus check from the federal government via prepaid debit card.

The IRS says that distributing payments via debit card will expedite getting checks to Americans. The prepaid debit cards will be sent to some of those whose banking information is not on file with the IRS.

The IRS is telling those expecting a paper check or debit card to watch their mail carefully.

“Taxpayers should note that the form of payment for the second mailed (Economic Impact Check) may be different than the first mailed EIP,” the IRS said. “Some people who received a paper check last time might receive a prepaid debit card this time, and some people who received a prepaid debit card last time may receive a paper check.”

If you’re still waiting on your second stimulus check from the federal government, the IRS has launched an online tool to track the payment’s progress by going to IRS.gov.

Two weeks ago, Congress authorized that most Americans making less than $75,000 a year will get a direct payment of $600 (couples making less than $150,000 a year will get $1,200). Heads of households making $124,500 annually also will receive the full $600.

Those making $75,000 to $87,000 ($150,000 to $164,000 for couples) will get a prorated check. Those making over $87,000 ($164,000 for couples) will not receive a check.

Last week, the federal government began dispersing payments via direct deposit. The federal government has also started sending out paper checks and prepaid debit cards for those whose banking information are not on file.

The latest round of payments is the second disbursement of checks amid the pandemic. The $600 checks is half the amount given to most Americans during the spring. While most Americans who received a stimulus check in the spring will receive one again, changes to income between 2018 and 2019 could alter payments.

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Increased Standard Deduction: The new tax law nearly doubles the standard deduction amount. Single taxpayers will see their standard deductions jump from $6,350 for 2017 taxes to $12,000 for 2018 taxes (the ones you file in 2019). Married couples filing jointly see an increase from $12,700 to $24,000. These increases mean that fewer people will have to itemize. Today, roughly 30% of taxpayers itemize. Under the new law, this percentage is expected to decrease.

Increased Child Tax Credit: For, families with children the Child Tax Credit is doubled from $1,000 per child to $2,000. In addition, the amount that is refundable grows from $1,100 to $1,400. The bill also adds a new, non-refundable credit of $500 for dependents other than children. Finally, it raises the income threshold at which these benefits phase out from $110,000 for a married couple to $400,000.

Personal and Dependent Exemptions: The bill eliminates the personal and dependent exemptions which were $4,050 for 2017 and increased to $4,150 in 2018. State and local taxes/Home mortgages: The bill limits the amount of state and local property, income, and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible. The bill also caps the amount of mortgage indebtedness on new home purchases on which interest can be deducted at $750,000 down from $1,000,000 in current law.

Health Care: The bill eliminates the tax penalty for not having health insurance after December 31, 2018. It also temporarily lowers the floor above which out-of-pocket medical expenses can be deducted from the current law floor of 10% to 7.5% for 2017 and 2018. So for 2018, you can deduct medical expenses that are more than 7.5% of your adjusted gross income as opposed to the higher 10%.

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