Timing the right time to file your tax return can mean a more serious incentive check-sanewnetworks
The 2020 tax filing deadline is especially important this year – if you do it right, it could lead to a more serious incentive test.
The Senate is expected this week to pass President Joe Biden’s ruling on a $ 1.9 trillion stimulus plan that includes $ 1,400 incentive checks for Americans receiving the full amount.
At this time, payments are based on the same requirements as the first two checks: the entire amount will go to individuals with an adjusted gross income of up to $ 75,000 and married couples filing with income of up to $ 150,000. In addition, children and adult dependents may also be eligible for a check for $ 1,400.
Of course, some details may change in the coming days when the Senate considers the bill. However, the timing of the 2020 tax return before or after the final acceptance of the incentive may affect the size of the check received.
When it makes sense to file as soon as possible
According to Certified Financial Planner Luis Rosa, Registered Agent and Founder of Build, one of the reasons to file your 2020 tax return before the next Covid aid bill is passed is that you encountered something that changed your eligibility to receive payment. or means that you should receive a large amount. Better Financial Future in Henderson, Nevada.
This includes things like falling income from 2019 to 2020, having a child, or having another child or dependent in your household. If so, you can claim the previous incentive payments due from your tax return as a recovery discount and make sure you have the most up-to-date information for the next round, he said. This can result in either an increase in your tax refund or a decrease in the amount you owe to the IRS.
When it makes sense to wait
Of course, it might make sense for some people to wait until filing to get a larger incentive check. If you made more money in 2020, it could void your eligibility for payment or mean that you will receive less.
This means that some people may want to file their tax return after the latest Covid bill has been passed and any incentives have ended, so the payment is calculated using their 2019 information. If you can fall into that category, it might be worth preparing your taxes for 2020 to see what your adjusted gross income was and compare against the guidelines in the latest stimulus proposal, Rosa said.
You can prepare your tax return, rather than file it so that at least you know where you are, he said, adding that if you received payment in this way, you would not be penalized later or asked the IRS to return the money.
Of course, a delay in filing your 2020 tax return means you are delaying returning any refunds due to you. According to Grzes, some should not wait until the law on stimulating payment of payments is passed. You don’t want to unnecessarily delay filing your 2020 return, especially if you’ve already received $ 2,000, he said. And, if you are in debt to the IRS, you still have to pay the bill by April 15th, otherwise you could incur a fine.
Timing the right time to file your tax return can mean a more serious incentive check–sanewnetworks