Tax Question! - regarding stimulus checks

[s0me0nesmind1]

Funny - with a small business to deal with I've been using TT for years now as it makes doing the taxes WAY easier. It holds your hand through every possible question and scenario. This is the first time I've really had any sort of question in 10+ years. And, based on the comments in this thread, there still seems to be some pretty confused thoughts on the whole stimulus checks/rebates and how they are supposed to be handled.

It's not to say it doesn't have its appeal obviously. Yes, it makes data entry and questions to ask easier. You would just be surprised though the number of people who pay $60+ for tax software and another $20-40 for the "privilege" of e-filing a tax return that just has some very basic things (e.g. Wages reported with standard deduction, and a couple of easy dependent-based tax credits). These are literally entries that can be penciled in to a 1040 for free in a matter of 10 minutes.

My main point is just don't be afraid to look at the actual tax-form. TurboTax is there to dumb it down a bit with its way of questions, but sometimes just reading the form itself help to better understand.

Take a look at the form I took a screenshot of, it clearly indicates (to me at least as a someone that works in tax) - that it's not asking for 2nd Stimulus check information.



Keep in mind the following:

1) DON'T be anxious to file your tax return this year if you had better income in 2020 than you did in 2019. In fact, I plan to delay and even file an extension. If we have more stimulus checks this year, you want them to base it off whichever year you had lower income.

2) The IRS isn't accepting anything until February 12th - which also means that plenty of the forms haven't yet been finalized, so all your questions, etc... can change between now and then. See link below:

IRS to delay tax season until Feb. 12

The Internal Revenue Service plans to open filing season on Feb. 12, although it is making its Free File program available starting Friday.

www.accountingtoday.com

 

[IronWing]

Ohhh so since I DID get it (both of them in fact), I shouldn't enter it.
I have to go back and see how TT worded it. I'm like 95% sure it was worded as "Did you get it, and how much". And, when I entered it (both of them) my taxes due number went way up.

Yes, because when you enter the check amounts you get the correct tax due. If you enter zero, then you will be doubling down on your stimulus entitlement.

 

[Tweak155]

Settle down? At no point was I riled up bud' that's clearly on your end getting butt-hurt for some reason just because your post was labeled as incorrect. It's okay. We all make mistakes in life.

I was simply making sure to declare a corrected statement on the recovery rebate. Check your ego at the door.

You will get whatever money you're entitled to after filling out the tax forms, it literally does not matter if you understand what you'll be getting ahead of time or not. I couldn't care less if it was 100% accurate or not, since I thought about it for 2 seconds and was very clear in the way I worded my post that it was just my understanding.

Sorry you're riled up but in denial.

 

[snoopy7548]

Then you may very well be a perfect example of where you do qualify now.

See the worksheet I posted above and you can calculate it. Line h is your AGI for the year.

Looks like I should expect something, then! Yay for not getting any bonuses in 2020!

FYI, even with blanking out your numbers, they can still be calculated...

 

[s0me0nesmind1]

Looks like I should expect something, then! Yay for not getting any bonuses in 2020!

FYI, even with blanking out your numbers, they can still be calculated...

Good to hear!

Oh - and I fully knew that even when I posted it. I was saying to myself "Eh, I'll just eliminate the easy number for lazy people". Ultimately I don't even really give a shit if someone back-calculates it since AGI really doesn't tell you much given that it doesn't include tax deductions, nontaxable income, etc.. etc...

Nor in general do I think income should be a stupid taboo subject like some make it out to be. It's really powerful information that can be used against employers - which is why employers are the ones who wag the finger at discussing it.

 

[Spacehead]

Out of curiosity, did anyone receive Notice 1444 from the IRS after getting the 1st stimulus money?
All i remember getting was a letter before i received any money saying i was going to get it. I asked a few people at work & no one remembered getting one.

I was looking on the IRS website for some things & i saw this:

You should have received a Notice 1444 from the IRS that shows how much EIP 1 you were issued and a Notice 1444-B that shows how much EIP 2 you were issued (it will take several weeks to receive Notice 1444-B after your EIP 2 has been issued). Have these notices available when you complete the Recovery Rebate Credit Worksheet. If you haven't received Notice 1444 or Notice 1444-B, or you can't locate your notice, you can also go to IRS.gov/Account for the amount(s) to enter on the worksheet.

 

[Homerboy]

Out of curiosity, did anyone receive Notice 1444 from the IRS after getting the 1st stimulus money?
All i remember getting was a letter before i received any money saying i was going to get it. I asked a few people at work & no one remembered getting one.

I was looking on the IRS website for some things & i saw this:

Definitely never got that.

 

[s0me0nesmind1]

Out of curiosity, did anyone receive Notice 1444 from the IRS after getting the 1st stimulus money?
All i remember getting was a letter before i received any money saying i was going to get it. I asked a few people at work & no one remembered getting one.

I was looking on the IRS website for some things & i saw this:

I have yet to get this either.

Sounds like this tax year is going to be a clusterfuck, I honestly wouldn't concentrate on your tax return too much until mid-february at minimum.

Tax forms haven't been finalized, and the IRS has already declared they won't accept tax returns until February 12.

 

[Spacehead]

Glad to hear, i guess, that others haven't received this yet either. Maybe they'll just do 1 mailing with both on it.

I was looking for a form that i hadn't needed to use in a long time & wanted to re-acquaint myself on WTF i need to do with it. I think i have everything i need other than my W2 & while on the IRS site i thought i'd look to see what the 1040 had to say about these stimulus payments.

 

[brianmanahan]

IANA...CPA? I miss @EagleKeeper and @CPA. I may be wrong on how this works, but that's how it was explained to me as to how it was supposed to work by... random internet sources.

yeah i miss those guys too

 

[MtnMan]

Stimulus checks are not taxable.
Unemployment checks are taxable.

 

[Spacehead]

Stimulus checks are not taxable.
Unemployment checks are taxable.

Correct, but apparently you do have to at least acknowledge you received them or not on your taxes. Talking about the stimulus checks here.

 

[s0me0nesmind1]

Correct, but apparently you do have to at least acknowledge you received them or not on your taxes. Talking about the stimulus checks here.

It's really just a calculation though of if the IRS owes you more based on
1) Not receiving a stimulus check to begin with
2) Not receiving enough of a stimulus check based on your 2020 income being lower than your 2019 that your stimulus payout was originally based on.

If you don't fill out that portion I honestly don't think the IRS would care in the slightest since it's 100% based on them paying out more money.

As is the case with me, my 2020 income was > my 2019 income, thus I wouldn't have been entitled to the same stimulus check if they based it on my 2020 income. It doesn't make me "payback" the stimulus amount, it just calculates that I'm not entitled to more.

 

[Spacehead]

It's really just a calculation though of if the IRS owes you more based on
1) Not receiving a stimulus check to begin with
2) Not receiving enough of a stimulus check based on your 2020 income being lower than your 2019 that your stimulus payout was originally based on.

If you don't fill out that portion I honestly don't think the IRS would care in the slightest since it's 100% based on them paying out more money.

As is the case with me, my 2020 income was > my 2019 income, thus I wouldn't have been entitled to the same stimulus check if they based it on my 2020 income. It doesn't make me "payback" the stimulus amount, it just calculates that I'm not entitled to more.

Isn't that only if you're near the cutoff line? Wasn't it 75K for single?
I made way less in 2020 compared to 2019 but i'm not going to get any more stimulus money because of that, i'm i? I'm not near the 75K cutoff in either year. Sorry i had to admit that ATOT

 

[s0me0nesmind1]

Isn't that only if you're near the cutoff line? Wasn't it 75K for single?
I made way less in 2020 compared to 2019 but i'm not going to get any more stimulus money because of that, i'm i? I'm not near the 75K cutoff in either year. Sorry i had to admit that ATOT

It has nothing to do with a "cutoff". You can be $5 off from the calculated amount - if you're entitled to a difference than you're entitled to a difference.

The answer is an absolute YES. You should receive more stimulus in your tax return based on what you said.

The phase out is pretty simple, if you're single you take off $5 from your stimulus check amount for every $100 in income you make over the $75k cutoff.

So if you're single, you make $80,000 AGI, then you are entitled to $950 for the first stimulus check (based on your 2020 AGI).

Full Calculation:

$80k (Your Adjusted Gross Income - AGI for 2020) - $75k (Phase out start)= $5k

$5k / $100 = 50

$50 * 5 = $250 (Phase out Amount)

$1200 (Stimulus check full amount) - $250 = $950

 

[MtnMan]

I got some of my last tax stuff in today's mail. Still waiting on some investment stuff, but I started plugging stuff into H&R Blocks software I use. Much prefer it over turbotax.

Near the end it asks about stimulus checks, stating that the IRS sent Notice 1444 that shows the amount sent. I haven't received it 'yet', but I'm also waiting on other stuff to come. Apparently "if" you didn't get any stimulus money, and you are due, it will increase your 2020 refund.

The software initially added $3600 to my refund, then reduced it when I entered how much I actually received.

 

[Spacehead]

It has nothing to do with a "cutoff". You can be $5 off from the calculated amount - if you're entitled to a difference than you're entitled to a difference.

The answer is an absolute YES. You should receive more stimulus in your tax return based on what you said.

I guess what i'm getting at here is this scenario:
A person(single, no kids) gets their $1200 in May 2020 & $600 in January 2021
Income in 2019 is $50K (AGI)
Income in 2020 is $45K (AGI)
They're not entitled to more stimulus money, correct?
The $1200 & $600 are the max that person can get, correct?

I used the word cutoff with regards to the $75K phase out start in my other post. Maybe that lead to some confusion.

 

[Tweak155]

I guess what i'm getting at here is this scenario:
A person(single, no kids) gets their $1200 in May 2020 & $600 in January 2021
Income in 2019 is $50K (AGI)
Income in 2020 is $45K (AGI)
They're not entitled to more stimulus money, correct?
The $1200 & $600 are the max that person can get, correct?

I used the word cutoff with regards to the $75K phase out start in my other post. Maybe that lead to some confusion.

To put it in a simpler way, assume everyone is entitled to $100.

In 2020, they tried to get this to people early using a priority method, that being their reported 2019 income (2018 if 2019 not available). Those that made more got less of an advance of the $100, while those more in need received more of that $100 in advance of doing their 2020 taxes.

Those with higher income had to wait until they did their 2020 returns to get the full $100 benefit if they received a reduce stimulus payment. So if you received only $50 in stimulus in advance, you get the other $50 come tax time (now).

At the end of the day, everyone gets their $100, just at different times.

That's my new understanding after following the thread a little more. At the end of the day though, just make sure to fill in the forms accurately and don't sweat the rest!

 

[s0me0nesmind1]

I guess what i'm getting at here is this scenario:
A person(single, no kids) gets their $1200 in May 2020 & $600 in January 2021
Income in 2019 is $50K (AGI)
Income in 2020 is $45K (AGI)
They're not entitled to more stimulus money, correct?
The $1200 & $600 are the max that person can get, correct?

I used the word cutoff with regards to the $75K phase out start in my other post. Maybe that lead to some confusion.

In that scenario - You are correct. Since they are nowhere near the threshold for when phase-out starts at $75k, then it won't make a difference.

The main purpose of the tax return is to cover these 3 scenarios:
1) Did you not receive a stimulus check at all - and are entitled to one
2) Did you have something like... say - a dependent that wasn't accounted for because they were born in 2020, and thus are entitled to an additional $600
3) Did you not receive your full stimulus check because it was based on your 2018/2019 income that put you in the phase-out range of income, when in actuality for 2020 you didn't make as much and are entitled to more.

 

[Spacehead]

Got it, thanks guys.