Michelle Singletary

Washington, D.C.

Michelle Singletary writes the nationally syndicated personal finance column The Color of Money, which appears in The Washington Post on Wednesdays and Sundays. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide. She has written three personal finance books, including her latest, “The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.” Singletary was the financial expert for “The Revolution,” a daytime program on ABC. For two years, she was host of her own national television program, “Singletary Says,” on TV One. She is a frequent contributor to various NPR programs and has appeared on national talk shows and television networks, including “Oprah,” NBC’s “Today,” “The Early Show on CBS” and CNN. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges. As part of this ministry, she and her husband also volunteer to teach financial literacy to prison inmates. She is a graduate of the University of Maryland at College Park. She has received the Distinguished Alumni Award from Johns Hopkins University, where she earned a master’s degree in business and management. To stay informed about various money issues subscribe to Michelle’s weekly retirement and personal finance newsletters, which will be delivered to your inbox every Monday and Thursday.

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Recent Articles

MICHELLE SINGLETARY COLUMN

Advance for release Wednesday, April 14, 2021, and thereafter

(For Singletary clients and FOR PRINT USE ONLY)

For Print Use Only.

By MICHELLE SINGLETARY

WASHINGTON - While millions of people still wait and worry about when their stimulus payments will be delivered, there's a group of folks who could receive some much-needed money from another source -- if only they would file a three-year-old tax return.

The IRS says it has unclaimed income tax refunds worth more than $1.3 billion for an estimated 1.3 million taxpayers who never got around to filing a federal return for 2017.

"We want to help people get these refunds, but they will need to quickly file a 2017 tax return," IRS Commissioner Charles Rettig said.

Filers have extra time to claim the refunds because the tax deadline has been extended from April 15 to May 17. The IRS estimates the median or midpoint for the potential refunds for 2017 to be $865.

Live in Alaska and didn't file for 2017? The median potential refund is $960. In Maryland and Virginia, it's $872 and $827, respectively. In the District, it's $878. Massachusetts has the largest median refund at $978.

By law, taxpayers have three years to claim a refund. So May 17 is the last chance to get your money for the 2017 tax year. Filing may also open the door to the earned-income tax credit (EITC) for low- and moderate-income workers. For 2017, the credit was worth as much as $6,318, the IRS points out.

"Even though the May 17 deadline is still a month off, that's not much time when you're looking at making sure you have the old records you need," IRS spokesman Eric Smith said.

If 2017 W-2s or other documents are missing, contact employers, banks or other businesses now. "If subsequent back-year returns, that is, 2018 and 2019 returns, are also unfiled, be sure to file them soon as well," Smith said. "The 2017 refund will be delayed if there are missing returns for those subsequent years. Electronic filing is not available for these back-year returns. Be sure to mail each return to the IRS in a separate envelope."

And what happens, you may wonder, to the money, if people miss the deadline? It goes to the Treasury Department.

Here are some additional tax issues you should be aware of as the filing deadline approaches.

(BEG ITAL)Estimated taxes.(END ITAL) The IRS has not extended the deadline to pay estimated taxes. That due date for the first quarter of 2021 is still April 15. However, gig workers or the self-employed, who are not incorporated, still have until May 17 to file and pay for 2020.

(BEG ITAL)Coronavirus relief and the premium tax credit for health insurance.(END ITAL) If you use a premium tax credit to help pay for health coverage, you should know that the IRS has suspended the requirement to repay excess advance payments for 2020.

The premium tax credit is a refundable credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Affordable Care Act health insurance marketplace, also known as the exchange.

People can use the credit in advance of filing their federal tax returns. How large a credit they get is based on a sliding scale that takes into account family size and projected household income. When people enroll for marketplace insurance, they can choose to apply all or some of the credit to their monthly premium paid to the insurance company to lower what they owe. This is referred to as an advance payment of the premium tax credit (APTC).

If they end up earning too much, however, they could owe the government when they file their tax return. That happens every year. But in 2020, many workers found themselves with larger tax bills because extra coronavirus-related unemployment payments increased their income.

But under the American Rescue Plan enacted in March, excess payments owed for the advance premium tax credit were suspended for last year.

The IRS says taxpayers who have already filed their 2020 tax returns and who have excess APTC do not need to file an amended tax return or contact the IRS. The agency will reduce what they owe to zero with no further action needed. The IRS said the agency will reimburse people who have already repaid any excess advance premium tax credit.

The agency has posted a fact sheet about the suspension and refunds at irs.gov. Search for "More details about changes for taxpayers who received advance payments of the 2020 Premium Tax Credit."

(BEG ITAL)Unemployment.(END ITAL) Many people don't realize that unemployment compensation is subject to federal taxation. The last stimulus package, signed into law by President Joe Biden on March 11, removed the federal taxability of unemployment benefits up to $10,200 for individuals and $20,400 for married couples filing jointly. To get the tax break, your modified adjusted gross income has to be less than $150,000.

One reader wanted to know what happens if a state was late in paying the benefits. She wrote: "I did not receive my 13 weeks of eligible extended benefits for the time period covering late April 2020 to early September 2020 until February 2021, due to the backlog of unemployment claims. Will unemployment compensation monies that were for weeks in 2020 but not paid until 2021 still be eligible for this relief?"

Unfortunately, no, the exclusion applies only to unemployment benefits received in 2020, according to Smith.

As I've recommended to a lot of people, bookmark irs.gov. This has been a challenging tax season. You should regularly visit the agency's website to keep up with issues that may affect your particular situation.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

(c) 2021, Washington Post Writers Group

MICHELLE SINGLETARY COLUMN

Advance for release Sunday, April 11, 2021, and thereafter

(For Singletary clients and FOR PRINT USE ONLY)

For Print Use Only. WRITETHRU: In 3rd graf, changes opening to "Most likely,"

By MICHELLE SINGLETARY

WASHINGTON -- The scammers and schemers are coming for your cash.

No, that's not the government calling with a threat to "suspend" your Social Security number. Yes, you're being swindled if you're asked to pay anybody for anything with a gift card.

Most likely, that work-at-home business or multilevel marketing opportunity will cost you more than you will ever make.

Identity thieves are lying to trick you into giving up your personal financial information, which they will then use to steal from credit card companies by pretending to be you.

Scams have become so sophisticated and ubiquitous that it's hard to know whether the calls, texts and emails are fake. Technology allows hucksters with distant landlines - and now mobile phones - to display local numbers in an effort to trick you to answer.

Now, factor in the pandemic and the massive effort to get people vaccinated.

The scams are coming fast and furious, relentlessly conning people at a time when they are vulnerable.

Billions of dollars in stimulus payments are being sent to Americans, and that makes them a target for fraudsters. Coronavirus-related cons have given crooks another way into people's bank accounts, Rebecca Kelly Slaughter, whom President Joe Biden name acting chair of the Federal Trade Commission, said in an interview with The Washington Post.

"People are desperate," Slaughter said. "They are struggling financially. They're worried about their health. They're dealing with child-care issues. And that's why it's great that the money is coming, but bad guys are seeing that desperation, too, and are taking advantage of it as they do. We're just looking out for people who are trying to take advantage of that stimulus money and other related programs."

The FTC received nearly 2.2 million consumer fraud reports last year, up almost 27% from the year before, including a surge of online shopping complaints in the early days of the pandemic. Consumers reported losing more than $3.3 billion to fraud, up from $1.8 billion a year earlier.

Last year, the FTC introduced ReportFraud.ftc.gov, an updated platform for consumers to file fraud complaints.

The FTC is seeing scams involving personal protective equipment (PPE). The agency has also pursued schemes involving the Paycheck Protection Program (PPP), which provides money to businesses to help them make payroll during the pandemic.

In the interview, Slaughter discussed the role the FTC is playing in chasing down and prosecuting pandemic profiteers.

Tucked in the third round of stimulus aid, largely unnoticed, was $30.4 million allocated to the FTC to fight not just the old consumer scams but also new schemes with a pandemic twist.

Under the American Rescue Plan, signed by Biden on March 11, $24 million went to fund full-time employees at the FTC to address unfair or deceptive acts or practices, including those related to the coronavirus. An additional $4.4 million would go to process and monitor consumer complaints received by the FTC's Consumer Sentinel Network, including increased complaints about schemes related to the pandemic, and $2 million for consumer-related education to help consumers avoid coronavirus scams.

Here is a lightly edited transcript of our conversation about why this money is so important - and why more is probably needed.

Q: What type of covid-related scams are you seeing?

A: There are lots of pandemic profiteering challenges that we have, whether it's scams related to PPE or vaccines or fake cures or economic business opportunities. People are promising desperate folks easy money that it turns out you have to pay a lot of money upfront to access this great new business opportunity. These are things that we see generally, even in normal times, but it's accelerated and amplified by the economic desperation around covid-19.

We are particularly seeing economic scams. We sued a company that targeted struggling small businesses and induced them to submit loan applications by falsely claiming to be an approved lender for the Small Business Administration when they were not. We've sued a business for deceiving customers by sending mailers that featured a seal of the United States and a mock stimulus check and promised to get people federal stimulus benefits but actually just lured them to a used-car sale.

Q: Are there covid scams specifically targeting minorities?

A: Business-opportunity scams where companies target consumers with fake earnings claims. We sued a company that targeted Latino customers with false earning claims in Spanish-language ads. I think that these kinds of scams that particularly target communities of color are especially pernicious because they are doubling down on the disparities that we're seeing across the board in health outcomes and economic fallout and basically everything associated with the pandemic.

Q: How do you get ahead of these scams?

A: It's a two-step process. The first thing we have to do is educate consumers about what to look out for. And we do that in partnership with state and local authorities and in partnership with community advocacy groups. And we just launched a new Community Advocate Center that will help us reach communities that might not otherwise have the FTC immediately on their radar. Consumer education is a huge part of it. We don't want people to fall victim to scams in the first place.

(For more information about the Community Advocate Center and to sign up to participate, visit ReportFraud.ftc.gov/community.)

And then we do actually go after the scammers whenever we find them. We collect complaints and we pursue law enforcement action in coordination with state and local partners. We do that because there are many targets. It is hard to get all of them. But when we bring cases, we send a strong message that we are not going to tolerate predatory, deceptive, unfair behavior targeting communities of color or any other communities.

Q: Why is it important for people to report covid scams to the FTC?

A: Participating in reporting is a hugely important thing to do, both to help themselves and to help the broader community. When we go after companies, one of our top priorities is getting money back for consumers that are wronged. And that starts with knowing about the problem. If people are not reporting to us, we don't know where to look for the next scams.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

MICHELLE SINGLETARY COLUMN

Advance for release Wednesday, April 7, 2021, and thereafter

(For Singletary clients and FOR PRINT USE ONLY)

For Print Use Only.

By MICHELLE SINGLETARY

WASHINGTON -- One thing is clear after multiple rounds of pandemic-related stimulus payments: having a bank account helps deliver the money faster.

People who provided current bank account information to the IRS were among the first to receive direct deposit payments, which began arriving a year ago this month. Although glitches prevented some people with direct-deposit information on file with the IRS from getting their payments right away, electronic delivery decreased wait times exponentially. Direct deposit easily beat receiving a mailed check or prepaid debit card, which, with the slowdowns in the U.S. Postal Service, further increased the possibility of a delay.

Millions of Americans conduct their day-to-day financial business outside the banking system, leaving many to be preyed upon by payday-loan companies or rent-to-own establishments. Or they end up paying unnecessary fees to cash checks.

For decades, various government agencies have struggled to persuade the most economically vulnerable households to open bank accounts. Nearly 95% of U.S. households - about 124 million - have either a bank or credit union account, according to the latest "How America Banks" report by the Federal Deposit Insurance Corporation (FDIC).

But the other 7.1 million households don't have bank accounts. Lower-income and minority populations are disproportionately represented among these unbanked households. Nearly 14% of Black and 12% of Hispanic households are unbanked, compared with 2.5% of White households, according to the report.

Given the economic and social disruptions caused by the pandemic, being able to conduct your financial business electronically is paramount.

"The pandemic is also presenting particular challenges to households that rely on paper instruments to conduct financial transactions; that need or want to visit bank branches; that do not have an adequate savings cushion; or that do not have access to responsible, affordable credit," the FDIC report said.

Then there is the stimulus money. There is a population of people the government is trying to reach. They don't receive federal benefits and typically don't file a tax return. And many are unbanked, which means if and when the IRS finally gets a tax return for them to send a payment, the agency will have to mail them a check or prepaid debit card.

To make it easier for these households to get their stimulus funds, the FDIC has launched a public awareness campaign - #GetBanked - to persuade unbanked individuals of the benefits of having a bank account.

The campaign will run in Atlanta and Houston, where the FDIC says its research finds a disproportionately higher percentage of unbanked Black and Hispanic households.

This summer, more stimulus money is slated to be distributed by the IRS in the form of advance child tax credit payments. Having a bank account will speed up the payments.

President Joe Biden's $1.9 trillion covid-related aid includes a substantial increase to the Child Tax Credit, which for the 2021 tax year expands to a fully refundable $3,600 for children 5 and younger and $3,000 for those ages 6 to 17.

The payments are slated to begin in July. The money is an advance, amounting to roughly half of the tax credit parents can claim when they file their federal returns next year. Having a bank account could mean fewer fees for people who need every dollar delivered to them by the IRS.

The administration wants to ensure unbanked households can get these supersized payments by direct deposit in time for the start of the summertime payments, said Leonard Chanin, deputy to the chairman for consumer protection and innovation at the FDIC.

"When you look more closely at which families are unbanked, the evidence shows a disturbing disparity," Chanin said during a conference call about the #GetBanked initiative. "Simply stated, we have to do better."

When asked, about half of unbanked households said they didn't have an account because they didn't believe they had enough money to meet minimum balance requirements. Others said they didn't trust the financial institutions, Chanin said.

As part of the media campaign starting this week, the FDIC pointed to efforts to create no-cost or low-cost (as little as $5 a month) banking accounts for people afraid that fees and other charges would create a financial burden. The accounts, offered at 75 banks and credit unions under a national initiative called "Bank On," are designed especially for the unbanked. People can open an account for $25 or less. Most importantly, with this type of account, overdraft or non-sufficient funds fees are not allowed. Transactions are declined if the funds are not in the account.

The national Bank On program is run by Cities for Financial Empowerment Fund, which points out that in many states, check cashing fees can be as much as 2.5% of the check amount. So, cashing a $5,600 stimulus check for a family of four in the latest round of relief (married couple with two dependents) would mean $140 in fees.

You can learn about the accounts and the campaign by going to fdic.gov/getbanked. On the site, people can search for participating credit unions and banks offering the Bank On accounts.

"It really is an overlap between communities that are unbanked and those who are eligible for any federal financial assistance," said Elizabeth Ortiz, the FDIC's deputy director for consumer and community affairs in the division of depositor and consumer protection. "That also means there's a disconnect when you want to give people the money they need quickly and safely."

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

About
Michelle Singletary writes the nationally syndicated personal finance column The Color of Money, which appears in The Washington Post on Wednesdays and Sundays. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide. She has written three personal finance books, including her latest, “The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.” Singletary was the financial expert for “The Revolution,” a daytime program on ABC. For two years, she was host of her own national television program, “Singletary Says,” on TV One. She is a frequent contributor to various NPR programs and has appeared on national talk shows and television networks, including “Oprah,” NBC’s “Today,” “The Early Show on CBS” and CNN. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges. As part of this ministry, she and her husband also volunteer to teach financial literacy to prison inmates. She is a graduate of the University of Maryland at College Park. She has received the Distinguished Alumni Award from Johns Hopkins University, where she earned a master’s degree in business and management. To stay informed about various money issues subscribe to Michelle’s weekly retirement and personal finance newsletters, which will be delivered to your inbox every Monday and Thursday.

Archives

Read all of Michelle's Newsletters Read all Color of Money Discussions
Books
  • "The 21 Day Financial Fast: Your Path to Financial Peace and Freedom"
  • "Spend Well, Live Rich: How to Get What You Want with the Money You Have"
Links