Warning on the Latest Stimulus

Sovereign Grace Family Church

1 view

July 15, 2021

00:01: Welcome to Conversations with a Calvinist.
00:04: This podcast is dedicated to helping believers better understand scripture, defend truth, and engage culture.
00:11: Get your Bible ready and prepare to engage today's topic.
00:16: Here's your host, Pastor Keith Foskey.
00:20: Welcome back to Conversations with a Calvinist.
00:23: My name is Keith Foskey and I am a Calvinist.
00:26: I want to begin today by saying this is the last program I'm going to be doing for the month of July, where I'm taking the rest of the month off to go on vacation.
00:36: My family and I are going to be going north to Kentucky.
00:39: We're going to be going to the Creation Museum.
00:42: Lord willing, we'll be able to see the Creation Museum and the Ark, which was built there in Kentucky.
00:49: So we're looking forward to that.
00:50: And hopefully when I come back in August, I'll have some brand new ideas for programs, brand new ideas for podcasts.
00:56: And during that time, I'll be able to share some of my experience and my adventure in Kentucky.
01:02: But today is the last program for the month of July.
01:07: And I'm joined today by my good friend and friend from high school, friend of the show, he's been on the show before, and accountant, Jarrett Rice.
01:17: Hi, Jarrett.
01:18: How are you? Good.
01:20: How are you? I'm doing very well.
01:22: I'm excited to have you on the program today, as always.
01:25: So thankful for our friendship and thankful for the opportunity to talk to you about an important subject.
01:30: Today, we're going to be talking about the stimulus that is not really a stimulus.
01:37: It's something that is happening in regard to the money that's coming from the government to parents of children.
01:45: And I guess all parents are parents of children, but people who have children in the home, rather.
01:52: And we're going to be talking about the inherent dangers of this latest round of government money that is going out.
02:00: And I know some of you may be saying, hey, this isn't a theological subject.
02:04: But as I noted on last week's program, last week, I had a friend on to talk about meteorology and getting ready for hurricane season.
02:10: As I said, these are what I'm calling helping the brethren shows, because this is not necessarily a theological matter, but it is a matter that is important to you as a Christian in America, who's having to manage your home, who's having to manage your finances.
02:27: And even today, I had a friend of mine post on his Facebook page, asking a question about this particular round of monies going out from the government.
02:37: And he asked, should we opt out? And I typed in, I said, hey, listen to this week's podcast, because that's what we're going to be talking about on this week's program.
02:47: So, Jared, can I ask you a question, just to kind of start out? I know that what we have received so far since COVID began was a round of stimulus payments.
02:59: I think there was one that was $1,400, or I don't remember how much the amounts were, but there've been two or three stimuluses that have been paid out already, correct? Three.
03:10: Three that have come out.
03:12: And are those going to be counted as additional income for somebody like me? At the end of the year for my taxes, am I going to have to claim that as part of my income? No, what they did was they created a special credit and advanced that credit to everyone.
03:36: So, if you receive the money, no harm, no foul.
03:41: It did not really affect your tax return, because the first two payments were in 2020.
03:47: So, that tax return, unless you're on extension now, would already have been filed.
03:51: But if for whatever reason, you did not get the stimulus check, but you were eligible for it, those first two, you could claim it as a credit on your 2020 return and get that additional money as an increased refund.
04:03: But no, those payments are not income to you, additional taxable income, and did not create any type of negative tax consequence to you.
04:15: Okay.
04:15: But that's what's different about this new one that's coming out.
04:22: Because from what I understand, if your children are under the age of six, there's a certain amount of money that's coming.
04:28: And if they're over the age of six, there's a different amount that's coming.
04:32: Is that correct? Right.
04:34: So, this is what a lot of people look at as the fourth round of stimulus payments is very, very different than the others.
04:43: What they've done is completely restructured the child tax credit.
04:47: The child tax credit has been around for years, years and years, as long as I've been doing this, and I'm in my 22nd year.
04:55: And previously, the child tax credit was, it was adjusted about four or five years ago to $2,000 per child under the age of 17.
05:08: And once you filed your tax return, you would claim that credit.
05:12: What the new legislation did, it was the American Rescue Plan Act, it's passed in March, increased the credits to $3,000 for children between the ages of six and 17, and up to $3,600 for children under six.
05:31: But there was another provision in there where they were going to begin advancing the credit starting this week, actually, in monthly payments, $250 a month for children between six and 17, and $300 a month for children under six.
05:51: But this is just an advance on the credit that you will claim on your 2021 tax return.
05:59: Which this is very different than those other three stimulus checks, which were completely new credits that didn't impact anything.
06:09: Other than you, you know, you're getting some cash, but this is taking a credit that you're already used to getting.
06:16: Yes, they're expanding it, but then they're advancing it to you.
06:21: So this could have a major impact on your tax return next tax season, next spring.
06:27: So let's say there's somebody who has, in the past, maybe been right on the border of having to pay.
06:35: Maybe they were, you know, their tax credits were putting them, you know, they weren't getting much of a return, but they weren't having to pay anything.
06:43: It could be that if they get this money every month, they may have a sizable debt at the end of the year, right? That's correct.
06:52: Yes, that's very true.
06:55: Because if you think, you know, $250 a month, let's say you have two kids.
07:00: Let's say it's me, for example.
07:02: I have an eight-year-old daughter and a 10-year-old son.
07:05: So because they're between six and 17, that would be $250 apiece, $500 a month.
07:12: The payments would start in July.
07:14: So then you have six months to receive the payments.
07:17: So $500 times six, that's $3,000 that's being advanced.
07:22: So although the credit is being increased from $2,000 apiece to $3,000 apiece, so that's $4,000 total to $6,000 total, a $2,000 increase.
07:35: I'm being advanced $3,000.
07:38: So that puts me in a negative position of $1,000.
07:41: So if I was relying on those credits to cover my tax, and maybe I was coming out kind of a break-even situation like you were describing, I may very well get to, you know, prepare my tax return next March and find out that I owe $1,000 because of that disparity between the advanced money and the increase in the credit.
08:03: And this is only compounded if you have more children.
08:06: Like kind of in your situation, you have quite a few more children than me.
08:10: So it can be a lot worse the larger your family is.
08:14: And that's really why you called this to my attention.
08:18: You called me and you said, Hey, here's the situation where you need to look out for yourself.
08:24: And when you told me that, I said, Hey, well maybe we should go on to the program and we should tell other people about this because I can't be the only person who's in this situation.
08:33: Exactly.
08:35: Exactly.
08:36: And you told me that your company actually was so concerned that you guys put this on your website.
08:42: Right.
08:43: We did an email blast to all of our clients.
08:45: We posted to our website.
08:47: We had a Facebook post that would go out to the community, just letting them know.
08:52: I mean, we're not trying to scare people.
08:54: We're just trying to let people know that this is something you need to consider because we know that come next March, there are going to be people that are very surprised and they're going to be very upset because they don't realize that this money that they're being advanced, they may very well need to be saving a decent amount of it to turn around and pay back to the government later.
09:17: Makes a lot of sense, right? I'm going to advance you money that you just need to give back to me.
09:21: Yeah.
09:21: So it's not a real credit.
09:25: Well, it is a credit, but it's advancing you something that you would have expected later.
09:31: Exactly.
09:33: Exactly.
09:34: So here's the thing that like you said, at the end of the year, if somebody ends up in a bad situation, they should have saved some of this money.
09:44: And if I know human nature and I think that I understand it a little bit, especially the nature of many folks who live paycheck to paycheck, when they get money like this, it often is used to take care of some kind of maybe paying off a credit card or maybe paying down a loan or maybe buying something that was needed before.
10:04: You know, we've had some things.
10:05: We bought a new house back in December.
10:06: So we've had to put in a water filter.
10:09: We've had to get some limbs cut down for hurricane season.
10:12: There were some things, there was some money that were unexpected expenses that we needed to do here at the house.
10:18: And that, so if somebody's got, like you said, between now and the end of the year, they're given $3,000.
10:24: And let's say they use that to pay off a loan or pay for something.
10:28: And then they end up with themselves a thousand dollar or a $1,500 deficit.
10:34: They're going to be in, they're going to find themselves in a difficult, because when it comes to government, you have to pay that back.
10:42: It's not an option.
10:45: Exactly.
10:47: And where that's going to really cause even more problems is that ever since the COVID situation started, the government has had a lot of trouble.
11:01: When I say government, I mean the IRS specifically, because they furloughed all of their workers and millions and millions of tax returns and correspondence, letters and things sat in trailers, not being touched by the government.
11:21: And they're currently behind on processing tax returns for 2019 and 20 by maybe 16 or 20 million returns and other correspondence.
11:34: So if you were to get a letter from the IRS that said, hey, you have a tax problem and you have to handle it and you write a letter back to respond, that just sits and you can't get it dealt with.
11:44: So imagine let's fast forward to March of next year.
11:47: You have thousands of people that are in a situation where they owe money because of these advanced credits.
11:53: They're trying to get ahold of the IRS to deal with it, set up some type of payment plan because they can't afford the payment, but pay it back all at once.
12:02: The IRS, pretty confident it's not going to be caught up at that point because on top of just being behind and trying to catch up, they keep having to stop what they're doing to deal with all these quote stimulus situations, route resources into these programs so they can't do their normal work.
12:23: So this is just another problem that's coming next spring.
12:29: I understand.
12:30: I understand.
12:31: So let's talk a little bit about solutions.
12:33: I have on my I have on my phone here an actual enrollment deadline payment.
12:41: It's funny.
12:42: It says, or excuse me, unenrollment deadline because you're already enrolled.
12:46: Right.
12:46: In fact, automatically the day of this recording, I know it's not going to go out today because we're doing this so late, but it is today is July the 15th.
12:56: Today is the day that the first set of payments would have gone out.
13:01: So you may have already received it.
13:03: You may have looked in your account and if your automatic deposit may have already hit for you to have gotten out of this, you would have had to have already opted out before June 28th, which was, you know, three, three weeks ago.
13:18: So if you want to opt out of future payments, the next round is coming out August the 13th, and you have to be opted out by August the second.
13:31: That's what I have.
13:31: Is that what you correspond with? Yeah, that sounds about right.
13:35: Yeah.
13:36: And let me ask you this because you may, may or may not know, do you have to opt out of every one or do you opt out once and you're out for the rest of the year? No, once you opt out, you you've opted out of all the payments.
13:49: But one thing that people need to know is that both spouses have to opt out or they will give you half of the payment.
13:58: So if you were to log in and opt out, but your wife didn't, then let's say your payment would have been 500.
14:04: You'll get 250.
14:05: So you have, there's some amount of mitigation that's going on, but you're still going to get half because you both have to opt out.
14:13: But let me just tell you quickly something that happened when we were getting the information out to, to our clients in the community several weeks ago, as of June 17th, they had not even created the opt out portal on their website.
14:30: But yet the deadline to opt out was June 28th for the very first payment.
14:34: By the time the opt out portal was live, I think there was a four or five day window, but many people didn't even know it existed and didn't have the opportunity to opt out.
14:47: So not a really good start.
14:49: Yeah.
14:50: So I said, I didn't get the opt out this time and I don't think you did either right for the first time.
14:56: So let's say you got people who are, who are able to opt out.
15:01: If they opt out them and their spouses, they can opt out for the rest of the year.
15:05: But let's say somebody says, you know what? I'm not going to opt out.
15:09: I'm going to take the money.
15:10: I'm going to put it into an account.
15:12: And if at the end of the year I owe, I owe, but I'll have that money saved.
15:17: And they do that because they say, I just don't want to go through the trouble of opting out.
15:21: I know that's not what you recommend, but would that really change anything other than the fact that it might be something they have to pay back? No, that would work.
15:30: But as, as you're implying, you know, most people are not going to do that.
15:38: Most people are not going to do that.
15:39: They're going to likely spend it because things happen, you know, people, things come up, you know, and if you have money, you use it, whether it be a car repair or a medical bill, something.
15:52: But what people don't expect, you know, your average person doesn't expect to owe the IRS when they file their tax return.
16:01: And even if they don't end up owing money back to the IRS, let's say they're used to getting a refund of 1500 bucks, two grand.
16:09: And all of a sudden it goes to zero.
16:11: A lot of folks are used to taking that and putting it towards something that's their vacation fund, or they put it down as a down payment on a new vehicle, or they use it for a vehicle repair or some improvements to their house.
16:22: And all of a sudden that's going away.
16:25: And I think a lot of people don't realize that's coming and there's going to be surprises.
16:33: Yeah.
16:33: And if nothing else, I think that's part of why we're doing this program.
16:36: We want people to know this is coming, right? So if you do decide to take that money, just know that it's going to drastically decrease what you receive at the end of the year, because it's coming off.
16:47: Basically they're giving you money that you would have gotten later.
16:50: And they're giving it to you early, which is, which is, it's not the same as the stimulus that we got before the stimulus is that we got before were in a sense, free money.
17:01: I know there's no such thing as a free lunch, but in a sense, the money came and it didn't affect our taxes.
17:06: We didn't get added to our bottom line.
17:08: It didn't increase our amount owed.
17:11: It was like you said, it was a, it was a, uh, an additional credit, but this is not, this is applying to the already established tax credit for children.
17:22: And at the end of the year, there may be some people who find themselves in a much different situation than they expected.
17:29: Right.
17:30: I imagine the more common result will be substantially reduced refunds rather than someone owing.
17:38: But still that, like I said, that's going to be a big surprise for people because they're, they're so used to it.
17:44: And, uh, I know you're not supposed to count your chickens before they've hatched, but a lot of people rely on that refund.
17:50: They know every year I get roughly, you know, X amount of dollars back.
17:54: And I know what I'm going to do with it for this year.
17:56: And when it's suddenly gone, it's almost like somebody just wiped out their savings account.
18:02: And I know it's not exactly that, but you're overhaul, you're overhauling what people are used to without warning them.
18:10: I mean, what we're doing now is the warning.
18:12: That's right.
18:13: But, um, this makes me think of a situation that happened four years ago.
18:18: And I don't know if you remember this, but the tax cuts and jobs act, which was Trump's big tax law is big tax revision in 2017 made some changes to tax rates.
18:29: And what happened was the withholding that comes out of everybody's pay went down.
18:35: So folks saw their net pay increase.
18:38: Well, when tax season came, they filed their tax returns.
18:41: They noticed their refunds had dropped or, uh, or they might've, some people might've owed a similar situation to this.
18:48: And they were upset thinking, look at what Trump did to me.
18:51: You know, they felt like this new tax law from him was negative to me, but they didn't realize that they had been advanced that money essentially by way of higher net pay throughout the year.
19:05: And I remember vividly seeing the people on the news being interviewed complaining.
19:11: And to me, this is, this has the potential to be even worse as far as the magnitude of the dollar amounts and just people need to know what's there.
19:20: I mean, I'm not trying to be chicken little on this.
19:23: I just want people to be aware of that.
19:26: Absolutely.
19:27: And that's, and that, and I want to thank you for coming on the program and telling, I mean, like I said, you called me, you had already put out the information on your company's website.
19:36: And, and, and I want to thank you publicly and personally for all the help that you've given me over the years.
19:41: You've been a wonderful friend and you've certainly saved me from a lot of, uh, a lot of problems because, uh, you've been able to help me with my taxes many times.
19:49: And I'm very thankful for that and thankful for your friendship.
19:53: Thank you.
19:53: And thankful for you coming on the program and sharing this information with our, with our viewers and our listeners, because again, nobody, I wouldn't have known anything about this.
20:04: If you hadn't told me, I would not have known.
20:06: I did have one friend several weeks ago at church who said that, um, this is coming off the end of your taxes.
20:14: And that's what made me think, wow, I had no idea.
20:17: And then when you called me that affirmed what he said to me was correct.
20:21: And, uh, you explained it and made it make sense.
20:24: And now I'm glad that our listeners have, have heard that.
20:27: So Jared, before we close out the program today, uh, I'd like to ask, is there anything else about this that you wanted to mention before we, before we close out? Do you think we've kind of covered everything? No, that, that covers everything that covers everything.
20:40: I just, I, I just, I feel bad for folks, you know, out there having to deal with this.
20:48: And I hope that a lot of people listen to this and they take a good look at their situation.
20:53: And, uh, it's not that I'm encouraging people to opt out, but people just need to be aware.
20:59: If you're not going to opt out, just realize what may be on its way and, um, you know, plan accordingly.
21:05: Awesome.
21:06: Now you said you put a thing on your company's Facebook page for people to go and opt out.
21:11: Is it okay if I mentioned the name of that page for the, for the listeners? Yes.
21:17: Yes.
21:17: Well, the firm's name, the firm's name is the Hearst company H U R S T.
21:22: So if you just, if you go to, um, Facebook and type it that in, you'll see the Hearst company CPAs PA, uh, located in Fernandina beach, Florida.
21:32: And, uh, you'll see some numerous posts lately where we've talked about, um, the processing delays that I mentioned, the IRS is behind, you know, millions of returns and also, uh, some other things.
21:43: So you can get an idea of the information where we put out to the public.
21:46: We don't waste people's time with posts like some businesses do.
21:51: We just try to get out good information that we feel is helpful because we don't like to have our time wasted, you know, with useless emails and posts.
21:59: So we try to get out the important stuff.
22:02: Good deal.
22:03: So again, listener, if you are interested in going on to their Facebook page and getting good tax information and also, uh, finding the, uh, place where you can go and opt out of this credit, if you choose to, you can go to the Hearst company on Facebook.
22:18: Just look it up there, uh, in Amelia Island, Florida.
22:21: And, uh, we, again, thank you so much, Jared, for being on the program today.
22:26: I appreciate you very much.
22:28: Yes, sir.
22:29: Thank you.
22:30: And I thank you listener for being with us, uh, during this season, I'm thanking you for staying, uh, a listener through the break.
22:38: And I look forward to having you back as a listener.
22:40: When we come back with brand new shows in the month of August, thank you for listening today to conversations with a Calvinist.
22:48: My name is Keith Foskey and I've been your Calvinist may God bless you.
22:54: Thank you for listening to conversations with the Calvinist.
22:57: If you enjoyed the program, please take a moment to subscribe.
23:01: And if you have a question you would like us to discuss on a future program, please email us at calvinistpodcast at gmail.com.
23:10: As you go about your day, remember this, Jesus Christ came to save centers.
23:16: All who come to him in repentance and faith will find him to be a perfect savior.
23:21: He is the way, the truth and the life.
23:24: And no one comes to the father except through him.
23:28: May God be with you.