02 Feb Figuring Out How Stimulus Checks Impact your 2020 Tax Returns
2020 has finally ended which means we now have to think about our 2020 taxes. The issue is complicated by the fact that many of us received a COVID-19 stimulus check during 2020 and now have to figure out how that impacts our federal tax situation.
The Stimulus Isn’t Income
The biggest concern most of us have is whether the stimulus check counts as income. In some of our cases, that simple check is enough to change our tax bracket and can seriously impact how much we owe the IRS.
According to Kathy Pickering, chief tax officer at H&R Block you don’t have to worry about how the stimulus check will impact your income because it doesn’t count as income. That’s a relief for many people who are already struggling to pay their bills and simply can’t afford any more financial blows.
What if You Didn’t Get a Stimulus Check
Where the stimulus check will come into play is if you didn’t get one or if you got one but it was for less than what you were entitled to. There are many reasons this may have happened including having a child in 2020, experiencing an economic setback, the IRS didn’t have the correct information on file. When you file your tax return, the IRS will become aware of the issue. They won’t send you a separate check, but they will add the missing amount to your tax refund.
Seek Professional Assistance
If you didn’t get a stimulus check, it’s in your best interest to hire a professional tax preparer who will go over your return and make sure everything is correct and that it’s very clear that the IRS still owes you a stimulus check. Utilizing a professional tax expert spares you from potentially making a mistake on your tax return which could cost you thousands.
File Early and be Patient
Don’t expect this tax season to be just like the ones before it. The IRS is backlogged and has already pushed the filing start date back by two weeks. You can’t submit your 2020 tax return until February 12. The IRS has said that while it might take them a little longer than normal to process the return, they still hope to have the refunds sent within 21 days of you filing your return.
Things that will shorten the amount of time it takes to get your tax return include filing electronically and accepting direct deposits.