Quote:
Originally Posted by BigRedChief
I’m not going to get shit. So the details don’t matter to me.
But, I’d bet money that 90% of Americans thought when this was signed that it was free money with no strings attached. Because that’s how it was sold.
Not some complicated sliding scale involving different tax years. Depending on which side of the complex formulas your financials land on whether you get to keep your money or not.
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It’s not complex, and in simple accounting terms, it is free money (yes there’s a larger argument if such an action is really “cost free” in terms of its macro effects, but that’s not what we’re discussing).
I’ll lay it out in 4 scenarios, one where the refund is bigger than the stimulus, one where what is owed is more than the stimulus, and 2 scenarios where what is owed/refunded is less than the stimulus.
For this purpose, imagine a single earner who earned $74K, and had a $10K tax liability.
Here are the scenarios as they would normally be:
Scenario A
Withheld $12K
Refund $2K
Scenario B
Withheld $8K
Owes $2K
Scenario C
Withheld $9,500
Owes $500
Scenario D
Withheld $10,500
Refund $500
Now we add in a 2019 stimulus and a 2020 tax credit of $1200 each
Scenario A
Withheld + Tax Credit $13,200
Refund $3,200
Actual 2020 refund accounting for 2019 stimulus $2k
Scenario B
Withheld + Tax Credit $9,200
Owes $800
Actual 2020 shortfall accounting for 2019 stimulus $2K
Scenario C
Withheld + Tax Credit $10,700
Refund $700
Actual 2020 shortfall accounting for 2019 stimulus $500K
Scenario D
Withheld + Tax Credit $11,700
Refund $1,700
Actual 2020 refund accounting for 2019 stimulus $500
As a result, nothing changes.
Hope that helps.