4 key reasons why you should file your taxes as soon as possible

As with most tax seasons, you may have till April 15 to file your 2020 federal tax returns this 12 months — until the IRS postpones the deadline. However we all know of a handful of causes to file a lot prior to April 15, in addition to taking good care of the submitting burden sooner reasonably than later.

To begin, you can obtain your tax refund faster, when you’re eligible to get one. Subsequent, your tax returns play a giant roll in calculating the subsequent spherical stimulus check moneyAnd getting your taxes filed might be your ticket to lastly receiving the first or second stimulus payment when you’re one of many thousands and thousands who qualified for a check but didn’t receive all the money — even when it was a clerical error or some other issue that induced your test to by no means arrive. Some folks had issues with custody and child support or lacking cash for child dependents generally. Others had funds accidentally garnished. Submitting your taxes as quickly as attainable may help you claim missing stimulus payment money ASAP, no matter why it wasn’t delivered.

About eight million non-filers will also have to file a tax return this 12 months to get their stimulus payment. However there are additionally advantages for the tens of thousands and thousands of people who’ll be eligible for a third stimulus payment of as much as $1,400 per person — a stimulus check that may arrive sooner than you suppose. By submitting now, you can additionally set your self up so you do not have to wait until 2022 to claim any additional stimulus money from a potential third check. We clarify what you’ll want to know. And this is extra details about stimulus checks and your 2020 taxes and when it is time to contact the IRS or arrange a payment trace in case your stimulus fee would not present up. This story is incessantly up to date with the newest data.

four advantages of submitting your taxes early in 2021

Profit 1: The sooner you file your taxes, the sooner you’ll get your tax refund (you may estimate the total here). That is an ideal cause to file early yearly.

Profit 2: Since any lacking stimulus test cash can be tied to your tax return this time round, submitting early will imply you get any lacking stimulus cash sooner, too. When you’re owed a tax refund and stimulus cash, each will arrive as a part of the identical fee. For instance, for example your tax refund was $500 and your stimulus test allotment was $500. You’d obtain a $1,000 fee from the US Treasury. 

(When you’re on the hook for taxes however you are owed stimulus test cash, the quantity you need to fork over might be diminished. So, when you have been to owe $1,000 in taxes and also you’re lacking $500 in stimulus test cash, you’d solely owe $500 as a substitute of $1,000.)

Profit 3: The prospect to set up direct deposit with the IRS or repair any errors. Folks with direct deposit accounts on file with the IRS have sometimes received their stimulus payments faster than these getting cash within the mail. We suspect the identical might be true with the third stimulus check of up to $1,400 per person (examine why the new check might be “targeted”).

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Stimulus check No. 3: What you need to know

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Benefit 4: You’ll stand a better chance of getting your full payment if, as seems likely, there’s a new stimulus check approved in 2021. According to the latest proposal — which is not law — the IRS would base your third stimulus payment on your 2019 or 2020 taxes, whichever it has most recently on record. Any money you don’t get as part of the automatic payment you’d have to claim a year from now on your 2021 taxes. 

Let’s say you made less money in 2020 than in 2019, or you had a new baby in the last year. If the IRS calculates your sum based on your 2019 life circumstances, you’d miss out on the rest of the check for a year or more, by the time it’s processed.

When your tax refund and missing stimulus check money could arrive depends on when you file

Though you can still technically file your taxes by mail and request a paper check, the fastest way to get the money you’re owed is to file electronically and have funds deposited directly into your bank account. This year, the IRS didn’t begin processing tax returns until Feb. 12, making that the soonest you could have submitted your return (April 15 is the last day to file). The IRS says 90% of filers will receive their refunds in 21 days or sooner. 

The IRS says its Where’s My Refund tool will reflect the status of your refund within 24 hours of filing, which could include a confirmation that your refund has been issued. From there, it could take anywhere from one to three days for the money to appear in your bank account.

Assuming seven days is the soonest you’d get your combined tax refund-stimulus payment and 21 days is the longest, we’ve sketched out what a difference filing sooner rather than later could make. (There’s more below on how to calculate how much money you might get in addition to your tax refund.)

How to find out if the IRS owes you money from a stimulus check

To figure out whether and how much money you’re owed from a previous round of stimulus checks, you first have to determine how much you were owed for each previous payment, then subtract from that any amount you already received. 

Here’s how to calculate the payments you were owed:

Next, you’ll want to check your bank account where your payments were deposited to determine the amount you received. (If you received an EIP card, you can check the balance and transaction history here.) The IRS should’ve sent you a letter within 15 days of issuing your stimulus check, however it was issued, and that letter should show how much money you received. (Here’s what to do if you didn’t get the IRS notice.)

If you no longer have that letter, you can use the IRS’ Get My Payment tool to help figure out when you received the payment. It’ll also show you the last four digits of the bank account it was deposited in if it was deposited directly.

There’s also a form to help you figure out the amount you’re owed on page 59 of this PDF detailing instructions for 1040 and 1040-SR tax forms, but it’s a doozy to follow.

Here’s why the IRS could owe you money, to begin with

There are many reasons why the IRS might still owe you stimulus check money, including:

To claim your missing stimulus payment on your tax return, start here

The IRS requires you to fill out either form 1040 or 1040-SR if you’re going to claim a Recovery Rebate Credit on your 2020 taxes. Once you have the amount you’re owed worked out, you’ll enter it on line 30 of either of those forms. Yes, it’s that simple.

Here’s how you could receive your missing stimulus check money

If you’re due a refund from the IRS, it’ll include both your full refund amount and whatever you’re owed from the Recovery Rebate Credit. In other words, it’ll be bigger. If, however, you owe the IRS money, your Recovery Rebate Credit will be applied to the debt. If the tax credit is more than you owe, you’ll receive the difference as a refund.

Here’s what to do if you’re a non-filer, i.e. you won’t be filing taxes for 2020, and you’re still owed a stimulus check. If you have child dependents, this information about the child tax credit could help put more money in your pocket. And here’s how to calculate your adjusted gross income.