Stimulus Update: Your Best Bet for a Stimulus May Be Your Tax Refund
- Although many people are struggling with inflation, the U.S. economy is strong.
- That makes a fourth stimulus check very unlikely.
Many Americans may be banking on a windfall that isn't coming.
When lawmakers issued a third stimulus check back in March of 2021, the U.S. economy was still sluggish and jobs were difficult to come by. On top of that, COVID-19 vaccines weren't yet widely available, so some people had no choice but to stay out of the labor force in order to protect their health. That created a situation where it was easy to justify a third stimulus round.
Fast forward to the spring of 2022, and many Americans are still struggling financially. But unfortunately, consumers should not anticipate a fourth stimulus round hitting their bank accounts anytime soon.
Economic circumstances just don't warrant widespread aid
It's true that inflation is crushing low-income households who could barely make ends meet before living costs started rising. Throw in sky-high gas costs in the wake of the Ukraine crisis, and it's easy to see why so many households may still be banking on a fourth stimulus check. But that aid is highly unlikely to arrive anytime soon, and that's because the economy is not actually in bad shape -- even though it might seem that way.
It's easy to look at rampant inflation as a bad thing. But actually, these days, it's a sign that consumers have money to spend and there's not enough supply of the items they want to spend it on.
Furthermore, at this point, there's an adequate supply of COVID-19 vaccines so that anyone who's eligible for one can get one. Between that and an abundance of jobs, it's hard to justify a fourth stimulus round on the basis of Americans not being able to find work -- because that's just not what we're dealing with.
Can you make your own stimulus?
The last stimulus checks that went out to the public were worth up to $1,400 apiece. But you may have another lump sum of cash coming your way that can serve as your own personal stimulus payment -- your tax refund.
Now that the tax-filing deadline has passed, in the coming weeks, many taxpayers should see their refunds start to roll in. And some of those refunds may be huge.
As of April 8, the average tax refund issued by the IRS this season came to $3,175. That's more than double the amount of the last stimulus check.
Of course, just because the average refund as of early April amounted to $3,175 doesn't mean that's the sum you're getting back from the IRS. But if you have a refund coming your way, you can treat it similarly to a stimulus check. That means using it to catch up on essential bills, tackle important items you may have put off due to missing funds, like home repairs, and sticking whatever portion you don't need immediately into your savings account.
If economic conditions take a major turn for the worse, a fourth stimulus check could come back to the table. But that's not something anyone should hope for. So if you're having a hard time financially, your best bet is to make your own stimulus, whether by putting your tax refund to good use or boosting your income with a second job.
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