Filing your taxes early could be beneficial as this year, there may be more benefits than usual. Aside from standing to get your tax refund sooner, you could be able to ensure that you get a larger stimulus check next time they send it out.
Third Stimulus Check Update
Tax professionals stated that some people should file their 2020 taxes ASAP to be eligible for the third series of stimulus checks. A 2020 tax return could prove that an individual's financial status has changed since his previous filing, reported Yahoo News.
With one eye on the aggravating U.S. economy and the other on the ongoing COVID-19 pandemic, Congress is rushing to approve President Joe Biden's $1.9 trillion stimulus package by mid-March to transfer aid to individuals and families as swiftly as possible. This includes a third stimulus check of up to $1,400 per individual.
If House and Senate Democrats hold to that deadline for the new bill, the new stimulus payment will fall mid-tax season: right as it is processing the 2020 federal tax returns, the IRS will also be transferring the next series of checks, reported CNET.
With lawmakers negotiating another wave of coronavirus relief aid, numerous Americans are anticipating to learn and to know the date when they will receive a third stimulus check. Aside from Congress's timeframe for passing the legislation, another factor that could influence a stimulus check is your 2020 tax returns, reported CBS News.
With the completion of former President Donald Trump's impeachment trial, Congress and President Joe Biden could now devote more attention to his proposal of a $1.9 trillion coronavirus relief bill. It is making its initial rounds on Capitol Hill.
Also Read: Third Stimulus Check for the Elderly: Changes, Rules for Retirees, SSI, Veterans
The Democrats who control Congress have been navigating whether to lower the income limits to be eligible for a relief payment. This could make it more difficult to get the full $1,400 proposed for the upcoming third round. The Internal Revenue Service (IRS) would check your latest tax return to identify the amount of money you would receive.
The government makes use of the most recent tax return when ascertaining the amount of stimulus check payments. If one citizen made remarkably less in 2020 than in 2019, or have since divorced, had a child, or other significant changes, and their taxes are filed before the passing of the next novel coronavirus relief bill, their income would be indicated by the most recent and accurate tax return.
According to Lisa Greene-Lewis, a tax expert at TurboTax, "I would suggest that people file as soon as possible, especially with 75% of taxpayers last year receiving a tax refund close to $3,000. We are hearing a lot of people say, 'I had a baby in 2020, how will the IRS know this? When they issued the previous stimulus payment they didn't know that.'"
Congress could also require the agency to evaluate your 2020 tax forms if you have filed them to determine your payment. Through this, the IRS could better understand your economic situation amid the pandemic to assess your eligibility for a stimulus check.
