How you can lose your $ 1,400 stimulus check by filing taxes early

How you can lose your $ 1,400 stimulus check by filing taxes early

It’s often beneficial to file your taxes quickly (hello, prepayment), but this year some taxpayers may want to wait a bit – to get more cash in the third round of COVID stimulus checks.

While many Americans may receive a higher payout by quickly submitting their 2020 return, this is not true for everyone. Your 2020 taxes could, in fact, prevent you from receiving the full $ 1,400 in the new round – or prevent you from getting any stimulus check this time.

If you plan to pocket the maximum amount, then you can use the money invest, build up your emergency savings or pay off the debt, here’s why you can suspend your taxes.

You are eligible for a stimulus check based on your income

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The new stimulus checks are part of a $ 1.9 trillion pandemic relief bill that is heading for crucial votes in Congress. If all goes according to plan, those third payments could start to come out during the second half of March.

As with the first two rounds, the next checks have income limits. Payments of $ 1,400 are waived; under the current bill, the lower amounts will go to:

  • Individuals whose adjusted gross income (taxable income before deductions) is greater than $ 75,000 but less than $ 100,000.

  • Married couples who file taxes jointly and have incomes greater than $ 150,000 but less than $ 200,000.

  • Filing heads of household whose income is greater than $ 112,500 but less than $ 150,000.

You get no dunning checks if you are:

  • Single filer earning $ 100,000 or more.

  • Couple earning $ 200,000 or more.

  • Heads of families with an income of $ 150,000 or more.

Did you make more money last year?

The IRS will examine your most recent tax return in its system to determine how much money you can receive, if any.

Due to the coronavirus crisis, many Americans suffered a loss of income last year and could benefit from a bigger stimulus check by getting their 2020 return to the tax agency before new payments are made. carried out.

But as the stock market rose last year, house prices hit record highs and essential businesses flourished, some people made more money than in 2019. If you’re one of that lucky group, you might want to sit on your tax return a few. weeks.

Let’s say you’re a single filer, adjusted gross income to $ 73,000 for 2019 but jumped to $ 90,000 in 2020. Your income from last year would disqualify you from a full stimulus check of $ 1,400, but not your 2019 income.

You would like to delay filing your 2020 return until the IRS sends your next direct payment.

The bill is moving fast, so your return may not have a long wait

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If you were hoping to get your return quickly because you are likely to get a big tax refund, you probably won’t have to postpone your return for too long.

The United States House intends to vote on the COVID rescue legislation by the end of this week, and Democratic leaders who control Congress have set a deadline of March 14 to secure a draft bill. full help on President Joe Biden’s desk.

The IRS will likely begin the administrative work needed to get the checks quickly after the President signs the bill soon. For the latest round of payments, the IRS started making direct deposits in late December – just two days after signing the law.

If you have an upcoming refund, electronic filing using today’s tax software can get your back into the IRS system almost instantly after your economic stimulus money arrives.

What if neither of the two returns gives you a stimulus check?

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If income barriers to getting a stimulus check are preventing you from receiving a payment based on your 2019 or 2020 income, here are some ways to find $ 1,400 within your budget and basically do your own dunning check:

  • Make registration your policy. You don’t always have to pay a premium on the best insurance policies. Of car insurance at home insurance, shop around and make sure you don’t pay more than you should.

  • Reduce the cost of your debt. If you have a lot of credit card debt, you’re probably paying a ton of interest. Tame that debt – and make it go away faster – by wiping out your balances into one, low interest debt consolidation loan.

  • Stretch your dollars. Find the budget within your budget. Turn down the heat a little to save electricity. Get rid of a few streaming services that you never watch. Meal plan for the week and cut back on expensive ingredients. And download a free browser extension which will automatically find you deals and promo codes every time you shop online.

  • Make the agitation. If you have a useful hobby or skill, making it a side activity is as easy as setting up a profile. An online marketplace for gig work can help you connect with the right people to start your freelance business.

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