Americans may receive another stimulus check of up to $1,400 this spring to help cope with the fallout from the coronavirus pandemic. But that begs a question: Should you file your tax return before or after receiving the check?
First look at the numbers
Before we get into taxes, let’s take a look at how much money you can get based on the current stimulus plan. According to Yahoo! Finance, here is the breakdown of how much money you can receive from the current contingency plan under negotiation:
- Anyone making less than $75,000 gets a full check.
- You will receive a lower amount if you earn between $75,000 and $100,000.
- Couples with incomes of $150,000 but under $200,000 receive a lower amount.
- Heads of households with incomes over $112,500 but less than $150,000 will also see a lower amount.
You will now not get a stimulus check if:
- You make $100,000 or more.
- You and your married partner earn $200,000 or more.
- You are the head of the household earning $150,000 and more.
Why you should submit a file ASAP
All signs indicate that the tax should be filed as soon as possible. Why? The IRS will use the most recent tax return to determine whether or not you will receive a full or partial stimulus check (or, depending on your pay, any check), according to CBS News.
So if you don’t file your 2020 tax returns before the stimulus checks are sent, the IRS will use your 2019 tax information. According to CBS News, the 2019 number may not reflect your losses from the COVID-19 pandemic.
Lisa Greene-Lewis, a tax expert at TurboTax, told CBS News, “I would advise people to file their returns as soon as possible, especially since 75% of taxpayers received a tax refund of nearly $3,000 last year. We hear a lot of people say, ‘ I’ve had a baby in 2020, how does the IRS know? When they released the previous stimulus payment, they didn’t know.’”
New parents may be entitled to some extra money. People who had a child in 2020 could earn an additional $1,100 in incentive money ($500 from the Spring 2020 checks and $600 from the December 2020 checks), which they can claim on their 2020 tax returns, according to CBS News.
If Yahoo! Finance points out that some people may have had a good financial year and could benefit from waiting.
- “But when the stock market soared last year, house prices hit record highs and essential businesses flourished, some people were making more money than they were in 2019. If you’re in that lucky group, you might want to sit down on your tax returns for a bit. several weeks.”
The House Budget Committee recently approved President Joe Biden’s $1.9 trillion COVID-19 emergency response bill, also known as the American Rescue Plan.
The full House is likely to vote on the plan Friday. The Senate will consider the bill in March, but some hiccups on the bill remain, as I wrote for the Deseret News