Podcast Episode - Ask Suze Anything


Credit Cards, IRS, Tax Return


April 16, 2020

Listen to Podcast Episode:

In this podcast of Ask Suze Anything, Suze reviews the latest with the economic crisis as a result of COVID-19, gives us an important warning about IRS scams, and more.


Podcast Transcript:

April 16, 2020, and welcome to another edition of Ask Suze Anything. This is where normally you write in to AskSuzePodcast@gmail.com, and you send in a question and I pick a few and then I usually answer them on the Thursday drop of the Women and Money podcast. But today, there are so many things that I want to talk to you about, that I know all of you need and want to know that I decided, OK, we can postpone for a little bit answering personal questions on the podcast. So first of all, I want to say today is a really special day for me, anyway, and KT. It is our 20th anniversary, can you believe it? And I was going to have her on today, we were going to talk about things, then I thought no, no, KT, I have things I really have to talk to everybody about maybe you'll come on Sunday. Because she's now telling me that there are new things that she's learned about me. And I'm like, and so don't you want to tell me first? And she goes, no, I want to tell everybody. So, if you want her to do so, just write to AskSuzePodcast@gmail.com and let me know that and maybe she'll come on Sunday. Now, before I begin, I also just want to tell you that if you go to www.SuzeOrman.com/webinar, then you can sign up starting today for a free one-hour webinar that I gave with Reid Tracy, who is the CEO of Hay House, on how you can heal your financial life, and it's really fabulous. It's absolutely free, but you might want to do that. And while you're at home and who knows what you're watching, I think it would be a great thing for you to watch. You could actually see me rather than just hear me. So I just wanted to tell you about that. All right, let's talk about the stock market, and I'll probably talk more about this on Sunday because then we're going to see what's going to happen Thursday and Friday. But I just want to give you a recap and I want to start educating you. I want you to also know about the stock market and even though I know a little bit ago, I said, I just don't want this to be a podcast about, you know, straight finances like the stock market, stocks and everything. I just think this is an important lesson for all of us to learn. When the market was at its high in February, the Dow Jones Industrial Average was at 29,500. In two or three weeks after that, it dropped 11,300 points, which is when you all got freaked out, to 18,200. And that is when you were writing to me and saying, I have to sell, I have to get out of my 401k plan, I'm pulling everything out. We were down almost 38% at that time, and all of you were absolutely so distraught, it wasn't even funny. And I kept saying to you, no, no, don't do that. Not here, not now. It happened too fast, just be patient, it will go up again. And if you need this money within a year or so, definitely under two years, then when this market spikes again, you should sell. And that's kind of what happened. Since the bottom of 18,200 on the Dow Jones, the market today, April 16, 2020, really ended at approximately 23,500. So, we had from the 11,300 point drop, we've gained 5300 points back. So now that's kind of an increase of 23% from the bottom. All right, everybody? So if you had just stayed in, if you just stayed in rather than freaked and had gotten out, and let your emotions rule what you should do, you wouldn't be so sad right now. Because the truth of the matter is, from the high of the markets in February, we're really only down 6k points as of today, which is about 20% from the top. But here's what's interesting about this. There are many individual stocks such as Amazon that hit its all-time high. It's never, ever been higher, so just because the market itself has gone down, that doesn't mean that the stocks or the mutual funds or the investments that you have in your portfolio have taken now the 20% hit. Some of you may be down only 5%, some of you can still be up from that February high. But if you look back a year or so ago, or even more than that, you really still have a gain. Yes, you lost some of the money that you had made. You didn't make it, actually, because you didn't take it off the table. But you lost this money in your head that what you were worth and then it went down and then you got all depressed. But in reality, if you had been investing over these years, you were still up a considerable amount of money. You did not lose the principal unless you invested in February at that time. And so I'm telling you all this because once again, I want to talk to you about fear. Fear, the main internal obstacle to wealth. When you are stricken with fear you are paralyzed and you don't know what to do. And normally, when it comes to your money, you always make mistakes. You always do. And so what do you do? You get a stimulus check and you're so afraid you pay off all your credit cards when you shouldn't be doing that. You sell stocks when you should be keeping stocks. You do all kinds of things. Now, I'm going to give you another instruction here, so please listen. I do personally believe that these markets are not going to go straight up from here. I hope I am wrong but that I do not believe it. And I myself, even though I bought right after this happened as I told you I did, now, however, I am waiting because I personally think that this run-up, again, was too fast. Now listen to me closely here. Many times you will hear, and you have to be educated on this because you should want to learn this stuff. So you'll hear many people saying, are we going to have a U-shaped recovery? Are we going to have a V-shaped recovery? Will it be a W-shape? And essentially, all that means with a V-shaped recovery is it goes down very quickly and it goes right back up really quickly. It goes bam, bam! I personally think we've just experienced a V-shaped recovery, and a lot of times when I was talking to you on past podcasts, I said, I do expect these markets to snap back. And, I didn't at that time want to use a technical term with all of you known as a V-shaped recovery, but I think we experienced a V-shaped recovery, somewhat, in the stock market.However, I think now we could start to go back down again. A U-shaped recovery, just so you know, it goes down very quickly and then like the letter "U," it kind of hangs out at the bottom and then starts to go up. But it takes time for that to do that. I think we're going to be in a situation now, where given that earnings of these companies, just stick with me here, I'm getting technical with you but you can handle this and you can learn all of this because you need to know this. The earnings of the companies that are listed on the stock market are starting to come out now. They're starting to report, and many of them are really bad, and many of them are showing that this damage that has been done to the economy is far worse than many people thought. Now, I know in the past I have said to you, this was a health crisis that turned in to a financial crisis. It seems like we may get a hold on the health crisis faster than we may get a hold on now, the financial crisis. So now, our attention has to turn to what is really happening in the economy because it is scaring me that many of you and friends of mine are telling me this is the time to buy homes. You're going to go in, you've saved money, you're going to buy one or two homes. You are all looking for stocks that are under $10 a share because you feel like you need to buy a lot of stock here. And the more shares you have, the more money you make. And you say, Suze, you've even said that. Stop thinking this way. You are not to look for stocks that are under $10 a share. You are to look for stocks that are solid, that always will be in demand. Don't go out there looking for bargains. Look for really great cause if you're going to buy individual stocks, look for really great companies that have been seriously hit. I again repeat I would only be investing on a dollar-cost averaging basis where you continue to put money in every single month in what you want to invest in if you have the money to invest, and we'll get to those of you who don't have any money in a second. But I do just want to talk about it because while many of you are unemployed, many of you have no money at all. The truth of the matter is, many of you still are getting a paycheck. You have companies like Apple, you have companies like Salesforce that they're paying you still, you're still getting a check. And so you're not on unemployment, you haven't been furloughed, you are working from home, you still get to contribute to your 401ks or retirement accounts. So just keep doing it, do not stop. Do you hear me?Now here are the things that are starting to concern me. When companies start to report, you have companies such as, you know, companies that sell you things. All right? Department stores, all kinds of things like that. March sales were down 8.79%. Now, what does that mean to you? Well, that's kind of the biggest decline that they've had. Some of these indicators are showing that it is the biggest decline that they've had since 1992, which is a long time ago. Homebuilders, the sentiments on homebuilders, how people feel about home builders and everything, took a really big hit, falling the most they have ever fallen in a one-month period of time since its inception 35 years ago. These are huge hits. And think about it, everybody. Nobody is buying a car, the car industry is down 25.6%. Nobody is buying furniture, they're down 26.8%. Nobody is going out to eat or drink, they're down 26.5%. So, I don't want to go on with all these percentages and make your head swirl because I know when I talk numbers, you go, oh don't talk numbers to me, just tell me what to do. But I need you to learn, all of these numbers are saying that this financial crisis could be worse than any of us have any idea. Now, I don't say that to scare you, I say that to you because you're also writing to me and saying Suze, when do you think this is going to be over? How long do you think before we can go back to work? Suze, how long do you think before I can visit my family. Suze, how long do you think before I could go out to eat again? I don't have a clue to the answer to that question, but I can tell you that I don't think it's going to be much before September. And I don't care if the economy opens up again. I don't care if certain places in the United States say it's OK, it's OK for you to go out and do certain things. I just want to ask you this question. Are you going to feel OK going into a restaurant? Are you going to feel OK going into a bar and getting a drink? Are you going to really feel OK going to get a manicure where you're that close to somebody who's doing your manicure, pedicure, or a massage or whatever? Are you really going to feel OK about that? Because I have to tell you, I don't know if I would, and I'm no different than you. And I'm sitting here going, OK, KT is going to give me a haircut sometime today because I need a haircut and I'm on an island and I'm not going to go to somebody. First of all, there's nobody on the island that could give a haircut but even if I was in Florida, I would not go to somebody to give me a haircut. And I know all the haircutting salons are shut down right now, but there are people I know who have had a hair person come over to give them haircuts. Really, really? Have we all just lost it? I wouldn't be doing that. So I don't know when things will really return back to normal, and that is why it is essential that you hold on to every dollar that you have. Every dollar that you are making, every dollar that you're going to get in the stimulus, every dollar you're going to get in unemployment, all the dollars possible that you're going to get in the paycheck protection program, and the other types of grants that are out there. You make sure that you make every single dollar go as far as you possibly can right now, and you make sure that you only spend it on essentials and do not spend it on non-essentials. Also, it's aggravating me. Yes, I can get aggravated, that some of you are saying, Suze, I applied for unemployment and I don't qualify because they don't take self-employed people. Suze, I owe my mortgage, I paid my mortgage this month, it was the last paycheck I had. I have credit cards with Wells Fargo, I have this and that, and so I'm just paying them. And I'm like, why aren't you people picking up the phone or going to the websites? Because I can tell you I have many others of you that I'm not aggravated with that have business accounts at Wells Fargo, you have personal credit cards at Wells Fargo and Wells Fargo has said, yeah, we'll lower your interest rate to 0% and you don't have to pay us for two or three months. The credit card companies, the banks, the credit unions, everybody is being compassionate with you and you're just being lazy because you're not picking up the phone. So you are wasting precious dollars paying creditors that you don't have to pay. So can you just pick up the phone and get involved? If, in fact, unemployment is telling you that you do not qualify, hang up on the person and call back again. Because remember, there are many different agents that answer the phone. Some will be knowledgeable, some will not be. And just keep trying until you find one that has an understanding of yeah, self-employed people, you can apply for unemployment. And the other thing that I just have to say, you know, is this. Many of you are in occupations that you are considered an essential worker like vets and people like that, and you could go out and you could be working right now, and you could be making money. But you don't want to go out because either your spouse is very vulnerable or high risk, or you just had a new baby and you already have a two-year-old, and you just you can't risk it and so you can't go to work because of the virus. Even though you're allowed to go to work and you're self-employed and you're thinking no, I shouldn't apply for unemployment because I could work. No, you can't. If you can't work because of the virus and because you are afraid you cannot work, so can you just give it a try? All right, next, a lot of you are wondering where is my stimulus check? Am I going to get it? Am I not? And you don't know where to go. Now you do. If you go to www.IRS.gov, there will be someplace on there that you will see that it says, "get my payment" and it will tell you, did they send you your stimulus check, did they not? It's a place that you could also go if you do not have a bank or a direct deposit that was registered with the I.R.S., which means they're going to have to issue you a paper check. And if they issue you a paper check, you are not going to get that check possibly for months to come. So, you want to make sure that at least you register where you would like your direct deposit to go because then you'll get it a lot faster. Maybe you're on Social Security and you haven't filed a tax return. And so what do you do to make sure that you get your checks faster? Possibly you go on to "get my payment" as well. So, I just want to give you a little bit of a timeline as to when you can expect your stimulus checks. So they're starting to send out checks already. And so many of you, especially if you have filed your 2018 and 2019 taxes, you should have, by the way, gotten your stimulus checks already. So if you didn't, can you do me a favor, and can you go on www.IRS.gov and check "get my payment" and then you'll know? All right, everybody? Next, Social Security recipients, you should start to get your stimulus checks between April 17 and April 24. Now, those are people who have their bank accounts or direct deposit registered with the I.R.S. Again, I'm going to repeat, if you do not go to www.IRS.gov, "get my payment" and register. You can also find that if you never filed a tax return, you can figure out how to do it there. Now, the physical stimulus checks, the ones that have to be mailed out, they will start being mailed out April 24 but all the way through the first week of September 2020. So I'm telling you this because that's a really long time. They're only going to be sending out five million checks a week and they have so many to send out, and the way that they're going to do it is by income levels. So you have got to know that your first checks, the ones coming April 24 where they're going to mail it, will be if you have income up to $10k. So they're starting with the lowest going up to the highest. In May, they're only sending out checks from those who are making $10-60k. So, every week it goes up like from $10k to $20k, $20k to $30k. So, if you're making $50k or $60k, you're not going to get your check until May 29. In June, it goes from $60k to $100k. So if you're making $90k to $100k you're not going to get your check until about June 26. In July, they are mailing out checks if your income was $100k to $150k, that's if obviously, you're married, filing jointly. That's a long time. So you get what I'm saying here? So it's really, really important for August, September, all those months that please don't wait for them to mail out a check to you. Just go to www.IRS.gov, "get my payment," and give them direct deposit information so you can get your stimulus check right away. All right, so, many of you have questions that you've written in, so I'm just going in the next few minutes that are left of this podcast, I'm going to just go zip through the questions that you wanted to know.Is my stimulus check going to be taxable to me? No, it will not. It's considered a tax credit, so you're not going to owe income taxes on it.The amount of money that I'm going to make in 2020 would qualify me for the stimulus check, but I did not qualify for 2018 and 2019. Is it possible that I can get it in 2020? And the answer to that question is, yeah. Because it's considered a tax credit to you, it's very possible that if your income is under the limits, $225k married filing jointly for a full $1200, you will probably still get that $1200 credit at that time. You ask, you owe back taxes, and is that going to reduce your check? No. Your stimulus check is not going to be affected by taxes that you owed to the I.R.S. or any other agency. So you're still going to get the full payment. You ask me, I'm behind on student loans, will that impact my stimulus check? No, it won't. You ask, will I have to refund the money if my income rises? No, because this isn't based on 2020, really. It is based on what? Your 2019 or 2018 tax return, so it doesn't matter what you make in 2020. What matters is what you made in 2019 or 2018 if you didn't file your 2019 tax return. So, please stop worrying about it, all right? Now, those are the few questions that really seem to be on many of your minds, I just also want to say something. I've been contacted by the Secret Service and certain organizations saying, please, Suze, can we interview you and really talk about the scams that are starting to happen, because we're afraid that people are going to get taken? Millions and millions of checks are going to go out and people are going to get scammed. Suze, can you help protect them and tell everybody what they need to be aware of? So you have got to understand that this is already going on, everybody. Criminals are already calling you, emailing you, texting you, and communicating with you in all different ways saying that they are from the I.R.S. And the IRS is not going to call you. So please, if somebody calls you, sends you an email, does anything like that, they are not from the I.R.S. So the I.R.S. will not call you and ask you to verify your payment details. So, do not give out your bank account, debit account, PayPal account information. Do not do that. Even if someone claims it's necessary to get your check, it's a scam. What are you going to do? You're going to go to www.IRS.gov, "get my payment," and find out about your payment there. If you do receive a call, I am begging you, do not engage with these scammers or thieves, even if you want to tell them that you know it's a scam. I need you to just hang up, all right? If you receive texts or emails claiming you can get your money faster by sending personal information or clicking on links, just delete them. Do not click on any link in any email or text that you are sent. These are very important things for you to know because you are vulnerable right now. You need this money so badly you are really willing to do anything, anything to get this money as fast as possible. If you want to get this money, the stimulus checks at least, as fast as you possibly can, go to once again, www.IRS.gov, "get my payment," get it so that you give them there the direct deposit information. Or at least, file your tax returns for 2018, 2019 and if you haven't done that yet, please do that. If you haven't filed a tax return at all because you don't make enough money to do so, again, on www.IRS.gov they'll tell you what you can do. There is a website called www.FreeFillableForms.com where you can absolutely go and do that as well. And I know some of you have asked me for that, but I prefer that you stick on the www.IRS.gov website because I don't even know now how many websites look like they're supposed to be legit, but they're not. But the www.IRS.gov website is 100% legit. All right, my time is up, I can't believe it. So what do I want you to do? No, I'm not going to say to you, go to www.IRS.gov, no, I've already said it 10 times, you don't need to hear it again. I do, however, want you to go to www.SuzeOrman.com/webinar, and sign up for the webinar that I've done, and it's called You Can Heal Your Financial Life. We already have 25k people who have signed up, and so I'm so happy about that. So, have you been watching me all over the place? Because I've been everywhere giving interviews, I've given over 29 interviews in the hopes that it really will help all of you. But the best place to get the best information that you can get anywhere is right here on the Women and Money podcast, and the men smart enough to listen. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information. Ready to create your Will and Trust? Get Suze's Must Have Documents Special Offer at https://musthavedocuments.asksuzecommunity.com/. Take advantage of the free stream of the audiobook version of The Ultimate Retirement Guide for 50+ at https://www.suzeormanaudio.com/. To find the right Credit Union for you visit https://www.mycreditunion.gov/.

Suze's Financial Strength Test

Answer Yes or No to the follow statements.

I pay all my credit card bills in full each month.

I have an eight-month emergency savings fund separate from my checking or other bank accounts.

The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!

I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.

I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.

I have term life insurance to provide protection to those who are dependent on my income.

I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.

I have checked all the beneficiaries of every investment account and insurance policy within the past year.

So how did you do?

If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.

As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!

But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.

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