Third Stimulus Check: Biden’s Stimulus Check Bill Could Cut Your Taxes by $ 3,100 | Zoom Fintech

Third Stimulus Check: Biden’s Stimulus Check Bill Could Cut Your Taxes by $ 3,100

Biden’s stimulus check bill could cut your taxes by $ 3,100

Congress has put the stimulus package on a fast track in a race against time to give Americans the relief they need.

Along with the long-discussed stimulus checks, additional proposals in the bill would offer the average household $ 3,100 in tax savings for 2021, according to the Urban-Brookings Tax Policy Center.

As you pass the budget plan, which contains President Joe Biden’s $ 1.9 trillion relief bill, you can also expect to see your $ 1,400 stimulus check as early as next month, as well as extended unemployment benefits and more funding for COVID vaccine deployment.

So whether you need cash to pay down debt or build up your emergency fund, you could get even more back than you planned.

How it works?

William Sawalich / Shutterstock

The House Budget Committee on Monday approved the budget plan, which contains Biden’s stimulus package. The House of Representatives plans to vote on the legislation on Friday, according to a tweet from House Majority Leader Representative Steny Hoyer.

In the bill, families will see savings through four main provisions:

  • Your $ 1,400 stimulus check, which is really just an advance on a tax credit.

  • An expanded tax credit.

  • An expanded child tax credit.

  • More credit for those who pay for child care.

When you file your taxes, these credits will give you a dollar for dollar reduction in the amount you owe in income tax.

Even more than that, some of these credits will be refundable for 2021. This means that if your tax liability drops to zero, the IRS will send you a refund for a fixed amount – putting the money straight into your pocket.

Who benefits from these provisions?

Family saving money in piggy bank / Shutterstock

Most of this relief will go to low- and moderate-income families, according to the tax office’s analysis. Two-thirds of the benefits will go to households earning less than $ 91,000 per year.

Under the plan, the child tax credit is not only increased, but it also becomes refundable, meaning families will receive even more money. Low-income parents can now claim $ 3,600 (instead of $ 2,000) for children under 6 and $ 3,000 for children under 18.

Almost 80% of these benefits will be directed to low and moderate income households. And the proposed credit changes would help lift 11 million children out of poverty, according to the Center for American Progress.

As for the income tax credit, the boost included in the bill would almost triple the maximum credit for working without children and extend eligibility to more people.

This is not to say that higher income households will not benefit from some relief either. About 11% of the proposed benefits will go to families earning more than $ 164,000.

What if I need the money now?

close up of woman showing empty wallet

9nong / Shutterstock

If you’re strapped for cash and can’t wait for these tax breaks, there are a few things you can do to find room in your budget.

  • Get creative with savings. Cut down on your streaming services and get a library card for free entertainment. Instead of ordering takeout for a family pizza night, make them together at home. And download a free browser extension that automatically searches for the best deals and coupons every time you shop online.

  • Get a new rate on insurance. If you drive much less because of the pandemic, ask your auto insurer for a discount. If they don’t want to budge, why not seek a better deal from a more flexible company? And while you’re at it, you could also save hundreds of dollars on your home insurance by comparing rates to find a lower price.

  • Get paid for surfing the web. Sign up for a fun rewards program that gives you money or gift cards for things you already do online, like shopping, watching videos, and taking surveys.

And if you have big debt, don’t let interest get you down. Here are some options to make these loans more affordable:

  • Reduce the cost of your debt. If plastic has held you back throughout the pandemic, you’re probably facing a ton of expensive interest. Make your debt more affordable and easier to eliminate by consolidating your balances into one debt consolidation loan at a lower interest rate.

  • Reduce tuition fees. The average student loan borrower carries $ 32,731 in debt, according to the Federal Reserve. Refinancing your student loan is quick, painless, and could save you thousands of dollars in interest.

  • Get a better interest rate on your mortgage. If it’s been over a year since you refinanced your home loan, you’re late. And rates were the lowest on record, so refinancing your existing mortgage could save you big time. It is estimated that 16.7 million US homeowners could reduce their monthly house payments by an average of $ 303 via a refi, according to mortgage and data technology provider Black Knight.

Third Stimulus Check: Biden’s Stimulus Check Bill Could Cut Your Taxes by $ 3,100

About Dawn Valle

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