News You Can Use

Biden reveals $1.9 trillion stimulus plan: How the headlines can affect your money

Plus, some freelancers might incur a surprise tax bill.

Share
Twenty/20

Markets slipped while investors awaited President-elect Joe Biden's stimulus plan. Plus, some freelancers might incur a surprise tax bill. Here's how the headlines could affect your money.

Markets post slight losses

Markets slipped slightly Thursday. The Dow dropped 0.2%, and the S&P, 0.4%. The Nasdaq, which hit a new record high earlier in the day, fell 0.1%.

Stocks continued to fall Friday morning after President-elect Joe Biden unveiled his $1.9 trillion coronavirus stimulus plan Thursday evening. 

Biden releases stimulus plan

Called the American Rescue Plan, Biden's stimulus package includes $1,400 direct payments to most Americans and an increase of the federal minimum wage to $15 an hour. The plan calls for increasing federal unemployment benefits to $400/week and extending benefits until September.

Fellow Democrats have already come out in support of the proposal, though experts say the price tag is likely to give some Republicans pause. 

VIDEO1:5901:59
Suze Orman on how to use a second stimulus check

Video by Suze Orman

Unemployed freelancers may face unexpected tax bills

Typically, freelancers and self-employed people aren't eligible to receive unemployment benefits. However, if you lost freelance or 1099 income this year, you might have received Pandemic Unemployment Assistance through the CARES Act.

The surprise: Unemployment benefits are taxable, which could mean you'll get a smaller refund or owe taxes come filing time. Be on the lookout for a Form 1099-G this month detailing how much you received in unemployment benefits.

VIDEO2:4702:47
Tax credits vs deductions: Here's the difference

Video by Stephen Parkhurst

Words you've heard: child tax credit

The child tax credit reduces a family's tax liability by up to $2,000 for each qualifying child. Biden's stimulus plan proposes increasing its maximum value to $3,000 for a child under age 17 and $3,600 for a child under age 6. It could also make the credit fully refundable, meaning you would get a refund check if the credit is worth more than your tax liability.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

More from Grow: