Now that the second impeachment trial of Donald Trump has ended, attention is shifting as Congress, news outlets, and all of us regular laypeople look toward how the government will handle the next rumored/promised economic stimulus package.
This talk comes at an interesting time as the IRS began tax season last Friday and the biggest headline-grabber of all the stimulus packages has been the direct stimulus checks distributed by the agency. That is a lot for one group to handle at once, so knowing its plans and what to expect could become important. But be forewarned that all of this is a bit a tentative and composed of “best guesses” since nothing has actually been passed.
If you want a good roadmap through the potential mess, follow this link to a longer article on it. For the bare-bones bit here, though, the first takeaway is that with Congress aiming to have the stimulus package passed in the middle of next month, many will benefit by filing their 2020 taxes early.
First, this will make sure that your latest information (address, bank account information, etc.) is on file with the IRS, thus avoiding some potential issues if it does not have those bits correct. Second, the eligibility for payments likely will be determined by the latest tax return information the IRS has on file. For the many people who made less in 2020 than they did in 2019, that means they could receive more money quicker (though anyone who would have been eligible for more will get a chance to rectify that on their following year’s tax return).
Of course, there are people who made more last year than they did in 2019, even if this is overall a smaller group. If you find yourself in this situation, you may want to think about waiting to file, because indications are that if you receive more of a stimulus payment than you would have been eligible for under your 2020 income, this money will not need to be paid back.
I want to end with a little public service announcement that will hopefully serve both you and I, though. Even if you find yourself in a position where it will be advantageous for you to wait on filing your taxes – no matter the reason – this does not mean that you need to wait to prepare a return. Getting your information together and entering numbers into a return can be done without submitting it to the IRS. That initial work can be done with a delayed filing and then you will have the weight of knowing it has to get done removed from your shoulders. Pausing a final step could lead to some benefits, procrastination will not.
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