Even though we are amid a pandemic, The IRS has deemed all taxpayers capable of meeting the April 15, 2021 deadline. That’s to be expected. We have adapted to our unusual circumstances and life goes on as they say.
Congress does not have a firm date. The estimated date of arrival for the stimulus check is late March 2021. However, now is the time for all those who qualified for the first two payments to be strategic.
The IRS keeps it simple. Your portion of the $1,400 check is based on your most recent filed taxes. Tax season started late this year: February 12, 2021. If you choose to file early then your stimulus check would be based on how much you made in 2020. This is where the strategy comes into play.
Ask yourself… how much did I make in 2020? Is it lower, if so, then file your taxes ASAP before Congress gets its act together and sends out the stimulus check.
If you made less in 2019, then you must wait until Congress has sent your stimulus check.
But is it really that big of a difference?
I experienced the difference first hand. I am a big-time procrastinator when it comes to filing my taxes. I take the standard deduction. I spend more time watching an episode of “The Office” than I do on completing my taxes and I do them myself by hand.
In 2020, as soon as the IRS announced the July 15th date, I jumped for joy. That was music to a procrastinator’s ears.
Congress passed the CARES Act on March 27th, 2020 and I received my first stimulus check on April 15th. It was based on your 2019 taxes but only my 2018 were on file with the IRS.
Fast forward January 4th, 2021, I received my second stimulus check based on my delayed filed taxes (2019) and I was surprised at the lower amount. I received 53% less compared to the first because of my procrastinator ways. I didn’t even make that much more money but it was enough to see a drastic reduction in my stimulus check.
Curious? Check out this calculator
With all that in mind, if you know your Adjusted Gross Income (AGI) is higher in 2020 compared to 2019 then your best approach is to have your taxes ready to go but do not hit the send button just yet. Wait until you get the official word loud and clear from Congress.
Once we get the word, then it is off to the races, and time to file your taxes by the official date: April 15th, 2021.
Where to E-File
If you have a simple return and are comfortable doing your own taxes, the IRS has an electronic filing system. I filed my Federal and State taxes for free last year and I received both refunds in 7 days.
There are two options: for those who make less than $72,000 and for those who make above that amount.
The less than $72,000 option assists taxpayers with their return. The other option offers fillable tax forms. I use the latter due to the fact that I am comfortable doing my own return.
If you live in California, use this website to file online for free.
For all those who live outside of California, check out this site for info.
I hope this tip makes it easier for you to make the decision to join the lazy tax filer club at least for one year.