The IRS already started processing 2020 federal income tax returns on Friday, February 12.
This year it would be wise to file your tax return as soon as possible because, depending on your current financial situation, you could get a check with more money.
The IRS began processing 2020 federal income tax returns on Friday, Feb. 12, right in the middle of a debate in Congress to see if they would approve a third round of economic stimulus checks to help people get through the economic downturn.
These two issues are linked, because the government relies on tax data to determine how much money to give to each U.S. citizen.
Remember, for the first two stimulus checks, only single taxpayers who earned $75,000 or less and married couples who earned $150,000 or less received the full amount.
Individuals who earned more than these limits had their support money tapered off, down to zero.
However, as expected, people’s incomes in 2020 changed dramatically for most people. For this reason, the government should have updated figures on your earnings from last year, as it will decide how much money to give you in a third stimulus check, which could work in your favor.
Here’s how.
For example, let’s say you earned $200,000 in 2019. Then, the pandemic hit and you had to change jobs and earned only $20,000 in 2020. If a third stimulus check is approved with a $75,000 income limit, and the IRS only has your 2019 wages on record, the government might think you are NOT eligible for the full check.
But if the IRS relies on your 2020 return, it may see that your income decreased, so it could give you the stimulus check with more money.