It’s not unusual for the IRS to recommend filing your tax return as quickly as possible, plus it saves you a big headache. However, now the IRS says that some Americans may find themselves out of a stimulus check.
Lawmakers are considering legislation that would potentially dole out an additional round of direct payments to American households.
To determine eligibility for those payments, which are considered an advance on a 2020 credit, the IRS has referred to the most recent return it has on record for households.
For individuals who earned more in 2020 than in years prior – specifically enough to put them over the expected adjusted gross income threshold – that could be a problem.
Marianela Collado, a certified financial planner at financial planning firm Tobias Financial Advisors, told FOX Business that households in this specific circumstance may “not want to be so quick to file.”
“The IRS would [then] be looking to the 2019 tax return to determine eligibility or 2018 if 2019 hasn’t been filed,” Collado said.
Remember your taxes are due by April 15 if you owe the IRS, however if the IRS owes you, you have up to 3 years to file. But why would you wait?
On the flip side, Collado explained that people who earned less in 2020 than what is recorded on their 2018 or 2019 returns may want to file now. These people can also claim prior stimulus payments they may have missed out on.
Typically, the IRS encourages individuals to file early for security purposes. Year after year, tax season provides a heap of opportunity for criminals to commit fraud. The sooner an individual files their return, the less likely these opportunistic criminals will be able to steal personal information and any refunds due.
And for the obvious, filing your taxes early will also return refunds quicker. The IRS also encourages tax returns to be filed electronically and that any refund due be refunded via direct deposited to the recipients bank account. This will also help in speeding up the refund process. If for some reason, you have to file by mail, by mailing in a paper tax return, you can expect at least an 8 week wait, if not longer before a paper check is mailed out.
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