The first declarers can be regaled this year. If you filed your taxes for 2020, you might get one of the “Bonus checks” or “increased payments” the IRS distributed over the past two weeks, according to MoneyWise.
According to a press release from IRS.gov, you may also receive your third Economic Impact Payment this week, as the IRS sent payments through April. The press release says that a seventh batch of nearly 2 million economic impact payments from the American Rescue Plan began processing on April 23, with an official payment date of April 28. Some people may have seen the money in their account, marked as pending, before April 28.
The IRS says these funds total $ 4.3 billion out of nearly 2 million payments.
However, some people who have already received their third check may receive an “increased” payment if their economic situation changes between 2019 and 2020. If their 2020 tax return shows a new child or dependent, or if your income has dropped, you could earn more money.
This is especially true if you don’t qualify for the full $ 1,400 in the third round based on 2019 returns, but you do so based on your 2020 returns, or if you got married in 2020 and that you filed a joint return, with adjusted gross income under $ 150,000 combined.
If you weren’t required to file taxes in previous years, but did in 2020, you might also have more money coming, the IRS says.
While you might be tempted to book a trip for this summer as lockdowns are lifted around the world, don’t rush to spend those funds without taking a close look at your financial situation first. There’s nothing wrong with indulging yourself, but there might be better ways to spend that money.
Pay off high interest credit card debt
Don’t just throw money at your highest interest credit card. Instead, if your credit is good, apply for a credit card with a 0% introductory APR. Consolidate your debt as much as possible, then start paying off what’s left.
You can opt to pay off smaller balances first if you want to feel a sense of accomplishment as you watch your debt go down. Or pay off the cards with the highest interest first, saving even more money faster.
Invest in stocks or crypto
If most of your debt is paid off, consider investing money in stocks or cryptocurrency. Think of investing as a long game, because day trading is not for the faint of heart. Look for an app like Stash or Acorns that allows you to invest in fractions, which are partial shares of expensive stocks.
Invest in yourself
Are you planning to start a business to protect yourself against future income cuts or to put more money in an emergency savings account? Put the extra money into a business website, a course to learn a new marketable skill, or an inventory of materials to make and sell crafts on Etsy.
Whatever you choose to do with the funds, the best way to spend that money is somehow to make your life better in the future. Whether you improve your mental health with a getaway or improve your financial security with less debt or more savings, use the money to start a better future.
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This article was originally published on GOBankingRates.com: More Stimulus Money Can Come In – Here’s What To Do With It