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Determined to save money in 2021? Here are some tips

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Posted at 2:32 PM, Dec 30, 2020
and last updated 2020-12-30 19:49:15-05

GREAT FALLS — This year has brought many challenges and one that has affected many people is the financial burden caused by the pandemic and associated restrictions. But the next round of stimulus checks could help start the new year on a better path. One of the most popular resolutions year after year is to save more money. But how can you actually reach your goal to save more and spend less?

“Don’t focus on paying down your credit cards, as much as focusing on putting money into savings, because if you keep paying down your credit cards and putting all your money there, you become like a frog in a well, where you go down two feet but then you’re going to have to come up a foot when you have an unexpected expense,” said Great Falls accountant Katherine Caldwell. “So by doing those savings, you’re going to be able to start breaking the credit card habit.”

Saving money can often seem like a challenge when you feel as though your income is already over committed. But financial experts say that almost everyone can find ways to trim spending, buy more efficiently, and find more money to save.

And with the next round of stimulus checks making their way into bank accounts, there’s no time like the present to start on your saving goal.

“To qualify, it’s mostly based on your 2019 income,” Katherine Caldwell told MTN News. “So if your income was less than $75,000 for a single, you’ll get it all. After that, it phases out.”

And because the stimulus check is not a part of your income, those who receive the check will not be required to pay any federal or state taxes.

The IRS began issuing the second round of stimulus checks on Tuesday, December 29th. Here is some information about the payments:

  • Payments are automatic for eligible taxpayers: Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by November 21, 2020 or who submitted a simplified tax return that has been processed by the IRS.
  • Who is eligible for the second Economic Impact Payment? Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
  • How do I find out if the IRS is sending me a payment? People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers.
  • How will the IRS know where to send my payment? What if I changed bank accounts? The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.

Click here for more information on the IRS website.