Taxes ?
 

Have a tax question, that maybe this is a CPA on the Forum.

I didn't receive either the $1,200 or the $600 stimulus checks from the
COVID-19 economic relief package, because my income in 2019 was over $150k for my self and wife.

The stimulus checks were based on your 2019 IRS tax return. In 2020, my income was cut in half.

#1 Is there a process I can apply for the second check which was sent out ?

#2 I was told that there is a IRS tax form that can be completed and sent in with my 2020 IRS tax return, that I can get a 'credit' on my return for those stimulus funds I should have received ?

Thanks !

Not alone
 

Quite a few people did not get the second stimulus check for whatever reason. If you go to the IRS site you should get more info on how you should go about getting it. We use TurboTax and the last part of the process allows you to enter in the amount of the stimulus check(s) you missed out on

The simple answer is yes. There is a worksheet that has to be completed based on your 2020 income and the amount of the two stimulus checks you received if any and if you are due stimulus funds you’ll receive a credit on your 2020 tax return for that amount


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Joey, two questions: 1. Does it matter if someone files now, or is there some benefit to waiting to file (assuming all info/forms are available)? 2. Will stimulus payments reduce people's overall tax return? For example, if someone made approximately the same amount of money in '20 as in '19 with the same overall tax paid/write-offs, etc. but received stimulus payments will the return be similar?

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1) not you can file as soon as the IRS starts accepting tax return via efile which is February 12th.

2) Yes it is a refundable tax credit. So if the credit exceeds your tax liability you will be refunded any excess credit. Let say you owe 500 and they owe you a stimulus credit of 1000 you will receive a 500 refund or if you were getting a 500 refund before the credit of 1000 you would then receive a refund of 1500

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Ok, so it's a credit that would be separate from deductions, etc.

What I read about holding off to file is because if the new stimulus reconciliation goes through it would be (presumedly) based on one's latest tax return. So, if we made more in 2020 than in 2019, which we did marginally, any future stimulus check might be reduced by that new income. Does that make sense? I mean, I'm guessing by the time it's actually processed—two weeks—and goes through, it might not matter, but Daddy needs a new pair of shoes, ya dig?

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Yes it’s a credit not a deduction. Additionally it really doesn’t matter when you file. If you receive the next round of stimulus in 2021 you will also need to do a reconciliation with that return and if you receive all or part of a stimulus you are not entitled to you will need to repay

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Are you saying that the new stimulus will be based on 2020's tax returns either way (which means that if I showed an increased income over '19 that I'd have to repay in '21)?

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Yes. Your income 2020 would need to be below the new threshold they set for this upcoming payment. It might be the same threshold as 2019 or not. We won’t know until the bill is signed.

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Gotcha, thanks!

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Thanks GTO for your response, especially the note that "you use TurboTax and the last part of the process allows you to enter in the amount of the stimulus check(s) you missed out on" !

I happen to use HR Block tax software, and currently in the process of entering tax info. I will check if HRB software asks these same type questions regarding 'stimulus' money, but so far nothing mentioned ?

Will report back to all....

Bigdog

Joey,

What I find interesting and strange, the IRS appears to date, to be using only 2019 tax return as the baseline and those amounts for determining if you qualify for any stimulus money. If that's the case I wouldn't qualify because I am over the threshold amount.

That said, if they start sending new stimulus checks based on the 2019 return, as they did before,
I would miss out on any new stimulus checks, based on the above reason.
However, based on my 2020 income I would qualify.

I wonder what tax year filing, the IRS will base any new stimulus checks ?
Use the 2019 tax return as they did in the past, or actually use you 2020 Return if filed ?
Guess we'll have to wait and see ? TBD ?

They used 2019 as a baseline as obviously your income for 2020 was not complete. As a result it is reconciled on a worksheet for 2020. If you didn’t qualify with 2019 but do now in 2020 because you fell below the threshold you will receive a refundable tax credit. Conversely if you qualified based on 2019 but exceeded the threshold in 2020 you will need to repay all or part of what you received which would be completed on the 2020 tax return.

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Use Turbo Tax and you'll be asked at the end about what amount you received!

No thanks, I know the rules I am a CPA and my software is much more inclusive than Turbo Tax

And your brain? :laugh:

Completed my taxes and getting a refund, plus Stimulus money I missed out on last go-round because 2019 AGI pushed me over the threshold to qualify.

I'm using HR Block tax software, and at the end of form, it does ask questions regarding COVID-Stimulus money received or not. This time I qualify for 2020 tax year period.

Joey2665....
I believe there was mention in this Post about whether to file 2020 tax return early, or wait until it is determined when next COVID-Stimulus money (yet to be passed by Congress) is passed before filing tax return ?

Does it really matter that much ? I'll assume the disbursement of stimulus money will be based on your 2020 tax return figures ?

Thoughts ?

No it doesn’t matter. As you your 2020 stimulus was corrected once you filed the 2020 return, the same will be for 2021.

In other words if you receive the stimulus check in January and it ends up that you do not qualify you will have to pay it back when you file your 2021 tax return conversely if you didn’t get the credit and you subsequently qualify you’ll receive a credit when you file your 2021 tax return. So at the end of the day it doesn’t matter when you file your 2020 return it’ll all come out in the wash when you file 2021.

Wow I really need to get paid for all this free advice [emoji23][emoji23][emoji23][emoji23][emoji23][emoji23][emoji33]


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Free advice
 

Yes, you're very generous.
All this doesn't apply to me but it is interesting to have the knowledge so I can join the conversation when we're allowed to go to cocktail parties again. Much better than the usual talk about septic systems.

In the meantime, what good is"stimulus" if I won't get the money until I file my 2021 return, which could be October of 2022...
Ahhh! Now I get it. Just before I vote in November of 2022, I'll get a check.

Joey, can you confirm the following?

My '20 income went up from '19 but I've not yet filed taxes. If the new stimulus check goes through, and my amount is based on my lower '19 income, rendering a higher stimulus check amount, will I owe that money when I file my '21 taxes?

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Isn’t stimulus check eligibility based upon $80k for individual and $160k for a couple’s adjusted gross income (after deductions taken)?

Just reading that the tax due date for 2020 is being pushed out till July 15th. IRS request


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I misread it when glancing quickly too. The deadline for 2021 is April 15th to file your 2020 tax return. The extension to July 15 was last year (2020) to file your 2019 return.

No, there is talk this morning to move the 2020 return date to July. Will see if I can find


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The discussion was started due to the delay the IRS had in January til early February with processing returns. Not see how or why they need to delay until July. Returns are being processed


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Standard deduction...
 

$12,400
The standard deduction for 2020 is $12,400 for singles and $24,800 for married joint filers. There is also an “additional standard deduction,” for older taxpayers and those who are blind. A married filer who is blind or aged 65 and over can claim $1,300 for themselves.

So... what is the total for: married filing jointly, both over 65, neither one blind.
Every review I have read shoots out the "$1,300" thing but never makes clear that the 1,300 is per person (of the joint filing) or a single addition for the joint filing.

Thanks in advance.

Turbo Tax Deluxe, $30.00
Answers all your questions.

$27,400.
Each person over 65 gets an additional $1300 added to the $24,800 for married filing jointly.

Std. vs itemized
 

The increased standard deduction is fine, but I still have to keep track of all eligible expenses, medical deducible, co-pays, etc. which may approach the limit and need to be tracked for the years when we do go over. If you stop tracking these records and then have, say, an un-reimbursed casualty loss, you need all the records. The system needs further simplification, but, at least in 2017, we started heading in the right direction. I hope it continues.

Sorry just saw this been a little busy. Lol. They are telling us yes if you receive stimulus if the next round is based on 2020 which has yet to be filed so they use 2019 and subsequently your 2020 is over the threshold it will be reconciled next tax season and would be paid back when 2021 is filed in the form of a lower refund or additional funds due.

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Is that different from the previous stimulus checks? The reading I have done said that the previous 2 stimulus checks were paid based on the data available at the time and would NOT be clawed back when you actually filed taxes and have an income level that "disqualified" you. Nor would it reduce your refund in any way. It was a tax credit based on best available data at the time it was issued and there was NO second guessing the eligibility later.

The only change could be in your favor. If the government did NOT pay a stimulus to you because available data said you did not qualify HOWEVER when you do your taxes you DO qualify, you would receive a tax credit that "pays" the stimulus to you when you file.

Of course this is the federal government and the IRS. What they said then and what they actually do now are subject to change.

This is also what I've heard and read. My tax preparer is waiting for a few materials, so I'm trying to figure out if I should be rushing to file so I won't get hit next year, though perhaps it's too late either way, since the Senate approved it yesterday...

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This is what we are hearing from IRS and AICPA but until the bill is passed we have no idea. I recommend to my clients if they received the first 2 stimulus checks and their income went over the threshold than try to hold out filing until the 3 round is out.

Additionally an interesting side effect is if you had a dependent that you did not receive stimulus for and they had earned income they should probably file on their own and claim themselves. If they do this they retroactively get $1800. 1200 from the first stimulus and 600 from the second stimulus. But again they have to have enough earn income to file on their own and clam themselves


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My recommendation would definitely be to hold off as long as you can. You can obviously prepare your tax return and know what your results are but I will tell my preparer not to hit the button to electronically file until after the third stimulus is issued


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I'm sorry you think I'm lazy. I didn't need ALL my questions answered- just one.
My post included information, from readings, which still left the final answer unclear/ambiguous.

Because this forum is so helpful, I knew I could get a respectful/decisive response, such as from Susie Cougar. Thank you.

M-Head- naturally using Turbo Deluxe! Good man/woman!

Taxes
 

All this discussion of taxes reminds me of the old joke (at least is was when I first heard it), "How much did you make? Send it in."

Or...you could decide that your chance of going over is reasonably small, pay for all these items with a credit card, then do the tracking at year end only if you need

Correct. I have finished, but not yet filed, our 2020 return using Turbo Tax. Joint return, both over 65 but not blind. Our standard deduction 1040 line 12 is $27,400.

Well, the IRS did move the file date. Now May 15

https://trishintel.com/irs-pushes-back-tax-deadline/


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It is actually May 17th, May 15th is a saturday

I was into taxes 30 years ago. Unless the law has changed (which I doubt), there is no late-filing penalty if you are due a refund, and 90% of you do have a refund. The penalty for late filing is entirely based on the tax due. I always get a chuckle out of the 11 o'clock news on April 15th showing the lines at the Post Office. If you don't file, you'll start getting letters from the IRS sometime in June of 2022. I've been there.

Joey2665, I sent you a PM
 

Hi Joey2665, I sent you a PM, please read.

Thanks !

As soon as I get to my computer. Can’t see pm from the app for some reason

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Simple answer
 

Simple answer: the Winni app is a forum reader, not the full website.

It's been a long time since I used the app, but I seem to remember a link to the full site to where you can see PMs, and other features of the full site.

Dave

I can read PMs on the android app, but not the iOS version.

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Funny
 

Gillygirl, that's funny because years ago, I was using the app on my tablet and stopped for several reasons. First and foremost, someone who was responding to a questions about whatever, that person would put the name in the title line of their post but would not put it in the message section, requiring me to get to my desktop to see what was in the title line. 2nd was not being able to view PMs or the photo gallery. No one can post to the photo gallery any more, so that is moot.
They must have either upgraded the app over the years or I was too dumb to know how to access the PMs. In any case, thanks for letting me (and others) know.

Dave

The really odd thing is I can see that I have a PM in the iOS version, but I haven’t figured out how to access it, if that’s even possible. So I have to grab the phone to read and reply to the PM.

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Same for me. But it has been this way for a long time