As the legislation for a third round of stimulus checks winds its way through a Congressional budget reconciliation process this month, there’s one way to increase the amount of your next stimulus check: If your income dropped between 2019 and 2020, file your taxes. Fast.
The upcoming round of stimulus checks is based on your 2019 or 2020 income. It’s worth filing your taxes with the IRS quickly if, along with an income drop, your 2020 income is below $100,000 for individuals or $200,000 for couples.
However, if your 2020 income is above your 2019 income (and below $100,000 for individuals and $200,000 for couples) you might want to wait to file until the next round of stimulus payments is sent out. This will maximize your stimulus check amount.
The new payments will be $1,400 per person for singles with adjusted gross incomes up to $75,000 and for couples with adjusted gross incomes up to $150,000, says Julio Gonzalez, CEO of Engineered Tax Services.
“Many high-earning taxpayers who were eligible for previous stimulus checks will now be excluded,” he explains.
The IRS is moving slowly, bogged down by administrating Economic Impact Payments and implementing the CARES Act—all under pandemic conditions. That’s why today’s start of the tax season was delayed a month later than usual.
The IRS expects to process 160 million returns this year—and you want your return to be at the top of the pile and processed before stimulus checks are sent out.
Democrats hope that the current coronavirus relief bill will be signed into law in early March, before unemployment program extensions expire in mid-March. This is quite likely to happen, because the Senate approved the budget for the bill last Friday. Stimulus payments could appear as early as later March.