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Coronavirus stimulus payment scams: What you need to know
We know there’s been a flood of information and updates about the government’s economic impact payments, or so-called stimulus checks, lately. But quickly and safely moving massive amounts of money into the hands of those who need it is a big job with a lot of moving parts. Some factors are ripe for Coronavirus stimulus payment scams.
We also know that the more you know about the process, the less likely you’re going to be tripped up by calls, text messages, or emails from scammers trying to steal your money or personal information.
Here’s what you need to know about the stimulus payments and how to avoid scams related to these payments.
Who will get money?
Adult U.S. residents that meet established income limits are eligible to receive money from the government. This includes:
- Taxpayers – people who filed a federal tax return for 2018 or 2019.
- Retirees – people who get Social Security, Railroad, or other retirement benefits.
- Beneficiaries – people who get public benefits like SSDI, disability, or veterans’ benefits.
- Non-filers – people who do not have to file a federal tax return, including people who made no income or made less than $12,200 (or $24,400 for married couples).
How will funds be distributed?
Most people don’t have to do anything to get their money because the IRS will use the same payment method – direct deposit, Direct Express debit card, or paper check – used to send you your tax refund, Social Security, retirement, or other government benefits money. If the IRS doesn’t have your direct deposit information, you can go to the “Get My Payment” feature at irs.gov/coronavirus and let them know where to send your direct deposit.
If you don’t usually file a tax return, go to irs.gov/coronavirus to access the “Non-filer” portal and to figure out what, if anything, you have to do to claim your money.
To check on the status of your payment, you can now use the “Get My Payment” feature at irs.gov/coronavirus.
Avoiding Coronavirus Stimulus Payment Scams
Scammers are using these stimulus payments to try to rip people off. They might try to get you to pay a fee to get your stimulus payment. Or they might try to convince you to give them your Social Security number, bank account, or government benefits debit card account number.
Four Tips for Avoiding a Coronavirus Stimulus Payment Scam
- Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text, or email.
- The IRS won’t contact you by phone, email, text message, or social media with information about your stimulus payment, or to ask you for your Social Security number, bank account, or government benefits debit card account number. Anyone who does is a scammer phishing for your information.
- You don’t have to pay to get your stimulus money.
- The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.
Report scams to the Federal Trade Commission at ftc.gov/complaint.
To keep up with the latest scams, sign up for the FTC’s consumer alerts.
Often Shorter Car Loans Are Better
When It Comes to Car Loans, Shorter Is Often Better
A longer-term loan can make even the most expensive car look affordable. But is it really more cost-effective? You may find that often shorter car loans are better.
By stretching out the loan over many years, your monthly payment is likely lower, but you could end up paying a lot more in interest. Still, many people find such loans attractive.
Auto Loans Getting Longer
In the fourth quarter of 2019, the average auto loan term was over 69 months for new cars and nearly 65 months for used vehicles, according to the Experian State of the Automotive Finance Market report. Additionally, almost 32% of auto loans funded in Q4 of 2019 carried a term of six years or more, compared to just 26% in 2009.
That’s well above the standard three- to four-year loan that used to be typical for new car purchases. Here are some of the problems with taking out a longer car loan:
Higher Interest on Longer Loans
- The longer the term of the loan, the worse your interest is likely to be. Shorter-term loans generally qualify shoppers for a better rate;
- There’s a greater chance you’ll end up underwater. Without a substantial down payment, if you total the car* or need to sell it, you could end up receiving less than you owe on the loan; and
You Might Be Upside Down
- You’re stuck with the car even if you don’t want it anymore. If you want to buy a different vehicle, you likely won’t be able to trade in your car because of the difference between what you owe and what the dealer is willing to pay for it.
If you need a longer car loan just so you can afford to buy the car, that’s probably a good sign that you can’t afford the car in the first place. Strive to keep the length of your car loan shorter to save money, and visit Mid Oregon Credit Union for preapproval on a loan before you even begin shopping.
Preapproved Loans Put You in Control
That way you know exactly how much you can afford, and you can avoid taking out a loan that’s going to be a financial burden long after the new car smell has evaporated.
If you have an auto loan from another financial institution, Mid Oregon can help you refinance to a shorter term and still help you stay with an affordable payment.
* Mid Oregon offers Guaranteed Asset Protection (GAP) Plus, which eliminates “out of pocket” expense for a deficit between loan balance and actual insurance settlement amount should your vehicle be totaled or stolen. Talk to a Mid Oregon Loan Officer for details, or call (541) 382-1795.
Roth IRAs Good for Your Savings Plan
Good things come to those who wait—for a tax break***. Although you fund a Roth individual retirement arrangement (IRA) with after-tax dollars, the money you distribute is completely tax-free as long as it meets certain requirements. And that means a really good thing—you may never pay a cent of tax on your earnings. That might make Roth IRAs good for your savings plan.
*** The IRS Says You Have Until July 15, 2020 To Make 2019 IRA Or HSA Contributions.
Tax Advantage
The Roth IRA is one of the few savings vehicles that gives you this advantage, and it’s a big one. Suppose you put $6,000 a year (the maximum contribution limit for 2019 and 2020) into a Roth IRA for 25 years at a 1% return. You would end up with $142,061—$17,063 of which would be tax-free earnings! It’s the magic of tax-deferred compounding.
You’ve seen how time plays a key role in maximizing Roth IRA potential. That’s exactly what makes the Roth so appealing if you’re just starting out with a savings plan, according to Dennis Zuehlke, compliance manager for Ascensus in Middleton, Wisconsin.
“The younger you are, the longer your money can grow before you take it out,” Zuehlke says.
Saver’s Tax Credit
Zuehlke adds that young savers are likely candidates for the Saver’s Tax Credit.
This nonrefundable tax credit can total up to 50% of the first $2,000 you put into a Roth IRA each year. To qualify, you must be at least age 18 and you cannot be a full-time student or a dependent on someone else’s tax return. And, there are income limits. For example, a single person with 2019 adjusted gross income up to $19,500 would receive a tax credit equal to 50% of the first $2,000 of IRA contributions, and a reduced credit is available up to $32,500.
Roth + Saver’s Tax Credit = Difference
“Combine the Saver’s Tax Credit with all the other tax savings of a Roth IRA and it can really make a difference,” Zuehlke says.
Ask the professionals at Mid Oregon Credit Union and Mid Oregon Wealth Management for information about IRAs. We’d be happy to help you set up a retirement plan for your future.