Millions of Americans are starting to see Economic Impact Payments – otherwise known as a stimulus payment – deposited directly into their bank accounts. According to the IRS, they have worked with the U.S. Department of Treasury to send tens of millions of direct deposits already and are working to mail out checks in the coming weeks. Taxpayers who filed tax returns in 2018 and 2019, as well as most seniors and retirees will be receiving a stimulus payment.
So you have received your stimulus payment… Now what? What should you do with your check, if you’re not necessarily in tough financial shape?
Let’s hear some advice on what to do with your check from two faculty members at Syracuse University’s Martin J. Whitman School of Management:
“If you don’t necessarily need the money because you continue to work, consider increasing your 401K contribution. If you enhance the 401K deduction from your paycheck to the extent of the stimulus you will receive, it saves you tax dollars and you continue to have the extra funds to pay bills or support your local establishments.
Given the IRS and NYS extension for tax filings, why not make an added contribution to an IRA if you aren’t in a 401k plan at work? You now have the added time to make the contribution to July 1 and contributing today gives you the chance to capitalize on the low stock market prices to enhance your future retirement funds.”
John Petosa, professor of practice
“My personal viewpoint on the stimulus check and how to best use it if one doesn’t need it for basic necessities like rent and groceries, is to put it back into your local economy! Treat you and your family to take out from local restaurants. Tap into local merchants offering delivery and/ or curbside pick-up for gifts and surprises for your family and loved ones. When safe to do so, hire a local contractor to do a special project you’ve been holding off completing. Use your stimulus check to stimulate the local economy and help keep local businesses in business for the future!
Just my thoughts! Although I usually advocate setting a small windfall like this aside and saving it I think in these times it’s more important to put it back into the economy.”
MaryAnn Monforte, professor of accounting practice
For more information about the Economic Impact Payment, please visit the IRS Information Center.