It’s been a week since filing opened for taxes this year. Have you submitted your tax return yet?
Although of course you have until April 15 to submit your tax return to the IRS, this is the year you might want to file as early as possible.
Besides simply getting rid of tax stress, there are 4 key reasons filing early is more important than ever before for your 2020 federal tax returns.
This year, your taxes do more than define the size of the refund you get. They also play an integral part in both calculating and receiving your stimulus check money!
If you missed your first or second stimulus payment, despite qualifying, filing taxes is what could allow you to finally receive that money. If there was an error, or if you had issues with custody, child support, missing money for dependents, incorrect garnishment… you guessed it; filing your taxes ASAP could be what helps to resolve this!
Previously happily non-filing individuals, about 8 million of them, will also have to file a tax return this year to get their stimulus payment. Moreover, filing NOW will help you set yourself up to get the potential third stimulus check of up to $1,400 per person before 2022.
4 reasons you want to file your taxes as early as possible this year:
1. Speed up your tax refundThe faster you file, the sooner you’ll get your tax refund. That’s a great reason to file early every year!
2. Speed up your stimulus check moneyMissing stimulus payment is tied to your tax return. If you are expecting both a tax refund and stimulus money, you’ll get both at the same time as one payment from the US Treasury. If you owe taxes but are expecting stimulus check money, however, your stimulus check money will be added to the money you owe — so you’ll end up owing less!
3. Set up direct deposit or correct mistakesIf you still haven’t set up direct deposit with the IRS, now’s your chance. People with direct deposit on file have mostly received their stimulus checks faster than those getting them in the mail. The same ought to be true for the third payment too.
4. Improve your chances of getting the full third stimulus paymentIf there’s a new stimulus check in 2021, you might boost the likelihood of getting your full payment by filing early. This is not the law yet but the latest proposal suggests that the IRS base your third stimulus payment on your 2019/2020 taxes, whichever it has most recently on record. If you don’t get any part of the check automatically, you’ll have to claim it a year from now on your 2021 taxes.
Suppose you made less money in 2020 than in 2019. If the IRS calculates your stimulus payment based on 2019, you’d miss out on the rest of the check for a year or more.
To sum up, when your tax refund and missing stimulus check could arrive depends on when you file. The IRS has said that 90% of filers will receive their refunds in 21 days or sooner. The Where’s My Refund tool over on the IRS website will reflect the refund status within 24 hours of filing.
Have you filed yet? If not, what are you waiting for?
Book a FREE appointment with one of our tax experts today to get started: