Expecting a Stimulus Check? Here's What You Need To Know

Stimulus Check for Self Employed

Fast FAQs About Stimulus Checks (i.e. Economic Impact Payments):

Up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child
Based on 2019 or 2018 data, depending on when you file your 2019 return
Deposit payments will begin to roll out on April 9th, with checks being issued April 24th
Self-employed individuals should look beyond the stimulus payment at other CARES Act benefits

I‘m a writer. I’ve been freelancing for a little over a year now, writing in both the personal finance and travel industries. I absolutely love it. It’s an incredible opportunity to make money while still being the mom, friend, and human I want to be.

The first little while was an uphill climb, finding as many clients as I could, and taking all the work (even the sucky stuff). After a year, I really began to feel like I had my feet solidly under me, great clients, and a steady income.

And then, COVID-19.

With the economy essentially grinding to a halt, it was a chaotic couple of weeks trying to figure out who was suspending all future work, and who was forging ahead. I kept about half my clients, which I expected, because of the travel industry being hit the hardest. But that meant that my income was going to take a major hit.

It’s not as hard for me as some of my friends and family. I didn’t completely lose my income. Having multiple clients means multiple income streams. I’m thankful that, as of writing this, I still have work. However, my husband lost his job in February, making me the breadwinner for our family of eight.

With information overload coming from everywhere, I was inspired to answer some common questions from the perspective of a self-employed freelancer.

Why is the Government Issuing Coronavirus Stimulus Check Payments?

Short answer: to keep our collective heads above water.

The CARES Act was passed to provide money immediately to the lower and middle class, to help pay their bills and keep food on the table in the face of mass layoffs and job loss.

It also provides small businesses with a variety of benefits that I encourage you to explore (see details about the Paycheck Protection Program) to take care of your income and your employees.

While there’s no option to “opt-out” of receiving the payment, I did wonder how we would fare without it.

With freelance clients coming and going in a much more dramatic fashion, the fact that I know, without a doubt, that my rent is paid and my family is fed takes a layer of stress off. It means we can focus on staying healthy, and doing the things we CAN do to move forward through all this.

As someone who freelances, I’m used to the uncertainty of my income. Some months, incredible. Other months, just hoping to get by.

This is a unique position to be in since I’m undeniably used to having two budgets: the bare-bones, and the bare-bones-plus. That second one includes things like entertainment, clothing, and cell phones.

I’m also used to creating my “ideal” budget, and then knowing exactly what to slash first when times get lean. Maybe that’s why I’m less freaked out about this than most – I have ample practice in creating a liquid financial plan.

I don’t speak for all freelancers. For some in my circles, this time has seen absolutely no shift in the amount of work available, and they have aged income and investments, savings and emergency funds.

There are also some who are putting their work on hold because this is an overwhelming time and it’s difficult to focus. For the latter, the stimulus check is a lifeline.

Who Gets a Stimulus Check/Payment?

According to the IRS:

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child. – Source

So, if you are an individual filer and make less than $75,000 per year based on your adjusted gross income (defined by our partners at Taxslayer.com), you’ll receive the full $1200 payment. If you make between $75,000 and $99,000 per year, you’ll receive a portion of the payment. And if earn more than $99,000 per year, you are not eligible.

If you’re married, those thresholds are $150,000 jointly, or $150,000 to $198,000.

You’ll also receive $500 for dependents under the age of 17.

Do My Older Dependents Qualify?

Those 17 or over, but who qualify as a dependent under someone else (i.e. high school seniors, college students, the disabled, some adult children living at home) will not be eligible to receive their own check, nor will they be included in the $500 payment. The government will be using the same criteria as is used to calculate the child tax credit, whether you claim them as a dependent or not. This includes:

The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
The child must be under age 19 at the end of the year and younger than you (and your spouse if filing jointly), OR under the age of 24 AND a student, and younger than you (or your spouse if filing jointly), OR any age if permanently or totally disabled.
The child must have lived with you for more than half the year (some exceptions, including school and military).
The child must not have provided more than half of his or her own support for the year (here’s a helpful calculator from IRS.gov to determine if they’ve provided half or not).
The child must not be filing a joint return for the year (unless it is filed only to claim a refund of withheld income tax or estimated tax paid).

There is hope that this loophole will be closed in the coming weeks, especially for those housing and feeding young adult children, who likely aren’t able to find work on short notice, and during a pandemic.

Because my partner and I make less than $150,000 per year together, we qualify for the full amount. Our taxes are filed up to date, with our current address and direct deposit information, so we don’t have to do anything special at this point to receive the check.

Between us, we have six dependents, so all together, we expect to receive $5,400 in stimulus money. And before your jaw drops a bit at that amount, with six children, our monthly grocery bill is about half of that. This money will cover our rent and food for the month, with my remaining freelance client work covering utilities.

See the latest #IRS information on Economic Impact Payments: No action needed by most people at this time. See https://t.co/hEEWmgHA9V pic.twitter.com/f91EbaKmMV
— IRSnews (@IRSnews) April 3, 2020

How Can I Make Sure I Receive A Stimulus Check?

There are a few things to do to make sure you’re receiving your stimulus money in the fastest way possible.

You’ve filed your tax return for 2019 or 2018
It’s filed with your correct banking information
If you don’t have a bank account, ensure your address is up-to-date on file

If you have not filed your 2019 return yet, as of right now, the government is still issuing tax returns on their regular time schedule. This means you could potentially have your stimulus check deposited, and then another two weeks later, your tax return deposited.

Related Resource: How to File Your Taxes for Free This Year!

Outside of not qualifying for the stimulus check, the only provision in the CARES Act that would prevent someone from receiving their stimulus payment is if that person owes child support.

In that case, the government will apply their stimulus payment to the child support owing. This does not apply if you owe the government money in any other capacity, such as back taxes.

If you are over the age of 17 but also listed as a dependent on someone else’s tax return, you are not eligible to receive the check.

When Will the Stimulus Payment Arrive?

The Secretary of the Treasury announced that checks will begin to go out in two weeks, rather than the three originally promised.

Direct deposit payments will begin to roll out on April 9th, with checks being issued April 24th. The checks will go out in batches and begin with those reporting the lowest income levels. This means, if you receive it by check, it could take months to receive yours.

In fact, according to the legislation, the government has until the end of 2020 to get all the money paid.

The fastest way to receive your money is via direct deposit. The IRS has created a website where you can enter your banking information if they don’t already have it on file because you are a non-filer. If you file but don’t usually include your banking information (or if you simply need to update it) you can also use that website to make those additions/changes.

Can I Track My Stimulus Check/Payment?

Unlike the system they have set up for tracking your tax return, there has been nothing announced that allows you to track your stimulus payment.

If you receive it via direct deposit, you will also be issued a letter within two weeks of payment, identifying that you were paid via direct deposit, and how much the payment was. If you didn’t receive payment in your account, but receive this letter, there will be a number to call to report the error.

If you’ve already filed your 2019 return and received your refund, you’ll know that the IRS already has all your info in place and has made a successful payment.

What Can I Do With My Stimulus Payment?

While it’s called a “stimulus”, it really should be referred to as an “income protection package” or what the IRS is calling an Economic Impact Payment. In 2008/2009, checks were issued to stimulate the economy. Those checks were meant for spending.

Pushing more money through the economy meant existing jobs were stabilized, and continued to grow. In our current case, the money is being offered as a way to keep us all afloat through massive job loss. It’s meant for paying our bills or creating savings.

If you have your bills covered and a healthy savings account already, and you truly don’t need or want the stimulus money, consider donating it to a local food bank, or other charity helping to fight the pandemic.

Will I Have To Pay Back My Stimulus Check?

Generally, no, the money is yours to keep and tax-free. In the event that your 2020 income is vastly higher than your 2019 income, there is a chance you might have to pay back a portion of it. However there was no information released that included amounts, and it would apply very rarely.

Final Thoughts on the Stimulus Check

The upcoming stimulus checks are, in my humble little life, the answer to the big “what am I going to do now” question. The band-aid to the slices this pandemic has cut. It will get us through this month. It buys us time to plan for the next month.

It makes me hopeful that the tunnel we are walking through is short, and we will come out on the other side, a little bruised but mostly intact as a Country.

Need Help Beyond the Stimulus Check?

1. Personal Loan Options

If your personal expenses are mounting, consider a personal loan rather than running up high-interest credit card balances. Check out Fiona to compare offers in less than 60 seconds.

You can also obtain a loan from LendingTree.

Check your credit score now using a service like Nav.com and then use Experian Boost to try to increase your credit score before you apply.

2. Home Equity as Another Option

The traditional way of tapping into home equity is to obtain a home equity loan or HELOC through a bank or a lender. You are charged an interest rate, have to pay assorted closing costs and must commit to making monthly payments – in addition to your regular mortgage payments. If you are interested in a HELOC, consider using Figure. You can apply online and if approved, receive the funds in as little as 5 days.¹

However, in this new exploding FinTech landscape, innovative ways to tap into your home’s equity are popping up. And some of them are quite promising like Unison.

For those who already own your own home and have equity you want to tap into, the Unison HomeOwner program allows you to do that without getting a loan and without monthly payments.

Click here to learn more about Unison’s HomeOwner program and see if you qualify.

3. Consider SBA Loans

If you need funding for your small business, it’s hard to beat SBA loans. They come with favorable terms and may be easier to qualify for than other business loans.

But as with any government-sponsored initiative, the SBA loan program can be confusing. There are multiple SBA loans, each with different purposes and terms. But in this guide, we’ll cut through the clutter to give you the most important answers that you’re looking for.

Read: Everything You Need to Know About SBA Loans

Are you self-employed? What else have you been wondering about the Stimulus Checks? Let me know in the comments and I might update with your question!

¹ Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.

Expecting a Stimulus Check? Here’s What You Need To Know

Why is the Government Issuing Coronavirus Stimulus Check Payments?