Tax Question! - regarding stimulus checks

[Homerboy]

I'm starting in on my 2020 taxes and I use Turbo Tax Home and Business (wife runs/ran a small business from home.

Anyway, TT is asking about the two rounds of stimulus checks. I got the first round in May of 2020 so that is applicable. However, it's asking about round 2 of the checks, which I DID get, but it was direct deposited in my account on 1/4/2021... not 2020. So I assume I should enter $0 for round two? I mean I DID get it, but it wasn't in 2020. I don't know anyone that got in in 2020... maybe people that got physical checks the date was 2020 on them?

 

[IronWing]

The stimulus checks are refundable tax credits for tax year 2020 so even if you got it in 2021 you should still enter it. If you enter zero then the program will miscalculate your refund.

 

[Homerboy]

The stimulus checks are refundable tax credits for tax year 2020 so even if you got it in 2021 you should still enter it. If you enter zero then the program will miscalculate your refund.

Gotcha. Interesting though that I'd be entering deposited amounts from 2021 in my 2020 taxes. Weird.

 

[Spacehead]

It's not taxable but we still have to claim it?

 

[SKORPI0]

Thanks, I'll do mine ASAP.

 

[IronWing]

It's not taxable but we still have to claim it?

If you didn’t get a check and you were entitled to one, you can claim that amount toward your refund or reduced tax bill. I suspect that is why Turbo Tax was asking about it. I made a quick run through a 1040 form and didn’t notice where to enter it but I was just ballparking my taxes and the instructions for 2020 hadn’t been published yet.

 

[Tweak155]

It's not taxable but we still have to claim it?

My understanding is that it is because the government disbursed those stimulus checks based on your 2019 tax returns (and, the first one - could have been even your 2018 tax returns if you had not filed yet for 2019).

The program is entirely based around your 2020 income, however. So - your final disbursement amount will be based on 2020's income reported. If you made more than you did in 2019, you could be giving some of that stimulus back if you earned an income which reduces stimulus payment. If you made less than 2019, you could get a bigger refund if you had an income in 2019 that reduced your stimulus payment.

They will determine your final over / under with the combination of your 2020 income, and how much of the stimulus you already received, if any.

 

[s0me0nesmind1]

My understanding is that it is because the government disbursed those stimulus checks based on your 2019 tax returns (and, the first one - could have been even your 2018 tax returns if you had not filed yet for 2019).

The program is entirely based around your 2020 income, however. So - your final disbursement amount will be based on 2020's income reported. If you made more than you did in 2019, you could be giving some of that stimulus back if you earned an income which reduces stimulus payment. If you made less than 2019, you could get a bigger refund if you had an income in 2019 that reduced your stimulus payment.

They will determine your final over / under with the combination of your 2020 income, and how much of the stimulus you already received, if any.

This is 100% a False Statement

At NO point will you ever pay-back stimulus money that you received based on making too much money in 2020. That is 100% NOT true and has been confirmed by many tax professionals that I listen to and work with.

From what I can tell, when it asks what you received for the stimulus amounts - it is only referring to the first one in March or whatever of 2020. I don't believe it's asking about the new one that most people got paid out in January. In fact, did anyone get paid their $600 BEFORE January? Anyhow, tax forms aren't yet 100% finalized and won't be until Mid-February, so I might be incorrect here.

Below is what this part of the tax form looks like right now for me:

 

[s0me0nesmind1]

If you didn’t get a check and you were entitled to one, you can claim that amount toward your refund or reduced tax bill. I suspect that is why Turbo Tax was asking about it. I made a quick run through a 1040 form and didn’t notice where to enter it but I was just ballparking my taxes and the instructions for 2020 hadn’t been published yet.

Correct. It is strictly a "recovery" for folks who didn't get what they were meant to receive

A common example would be if you had a child in 2020 - and thus on your 2018/2019 tax returns you didn't have them listed as your dependent, then you likely didn't get paid out the $500 extra for your new 2020 dependent. This is a way to recover that amount that you were originally entitled to.

 

[snoopy7548]

I didn't get either of the stimulus checks (goddamn bonuses brought my 2019 income over the phase-out), but I did make less in 2020 than I did in 2019.

 

[s0me0nesmind1]

I didn't get either of the stimulus checks (goddamn bonuses brought my 2019 income over the phase-out), but I did make less in 2020 than I did in 2019.

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.

 

[Tweak155]

This is 100% a False Statement

At NO point will you ever pay-back stimulus money that you received based on making too much money in 2020. That is 100% NOT true and has been confirmed by many tax professionals that I listen to and work with.

From what I can tell, when it asks what you received for the stimulus amounts - it is only referring to the first one in March or whatever of 2020. I don't believe it's asking about the new one that most people got paid out in January. In fact, did anyone get paid their $600 BEFORE January? Anyhow, tax forms aren't yet 100% finalized and won't be until Mid-February, so I might be incorrect here.

Below is what this part of the tax form looks like right now for me:

View attachment 37937

Settle down buddy, I highlighted that it was my own understanding. I honestly don't care all that much. If you think we're not all going to pay this back at some point in one way or another, you're kidding yourself. Keep on truckin'.

 

[s0me0nesmind1]

Settle down buddy, I highlighted that it was my own understanding. I honestly don't care all that much. If you think we're not all going to pay this back at some point in one way or another, you're kidding yourself. Keep on truckin'.

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.

 

[DainBramaged]

Going back to the original question, Homerboy, you are correct. Unless you have set up an alternative system of tax reporting (i.e. Sep 1, 2020 - Aug 31, 2021), the presumption is for income received Jan 1, 2020 - Dec 31, 2020.

 

[Homerboy]

Going back to the original question, Homerboy, you are correct. Unless you have set up an alternative system of tax reporting (i.e. Sep 1, 2020 - Aug 31, 2021), the presumption is for income received Jan 1, 2020 - Dec 31, 2020.

Wait- so I SHOULDN'T enter the 2nd stimulus (received 1/4/21) into these taxes? @IronWing 's first responses sounded like I should be claiming it on my 2020 taxes.

 

[SunnyD]

They're asking whether you received stimulus checks (presuming you qualified in the first place) as if you for some reason did not but were eligible for one you can claim the credit for it on your 2020 return. This is the IRS's way of getting it to people that it should have gone to but for whatever reason didn't get it. Example: My son never filed taxes for 2019 (don't ask), should have received a stimulus check but didn't because he never filed. Presuming he files 2020 (which he f'n better) he should get a credit for the stimulus.

 

[purbeast0]

I thought everyone on here made 400k/yr?

Why you all talking about stimulus checks?

 

[Homerboy]

I thought everyone on here made 400k/yr?

Why you all talking about stimulus checks?

$399K last year. Fucking COVID!

 

[Homerboy]

They're asking whether you received stimulus checks (presuming you qualified in the first place) as if you for some reason did not but were eligible for one you can claim the credit for it on your 2020 return. This is the IRS's way of getting it to people that it should have gone to but for whatever reason didn't get it. Example: My son never filed taxes for 2019 (don't ask), should have received a stimulus check but didn't because he never filed. Presuming he files 2020 (which he f'n better) he should get a credit for the stimulus.

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.

 

[jmagg]

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.

This completely contradicts all explanations of trustworthy net sources. Maybe TT was tallying a segment.

 

[SunnyD]

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.

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.

 

[Homerboy]

This completely contradicts all explanations of trustworthy net sources. Maybe TT was tallying a segment.

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, like I said, I need to go back and re-read how TT words the entry. That may shed some more light onto this

 

[s0me0nesmind1]

Yeah, like I said, I need to go back and re-read how TT words the entry. That may shed some more light onto this

In Turbotax go to the forms section and actually read what it asks on the official IRS form. I promise you it's more straightforward and easy to understand than most people realize.

It's TTs job to make tax returns seem like a confusing boogeyman.

 

[s0me0nesmind1]

Going back to the original question, Homerboy, you are correct. Unless you have set up an alternative system of tax reporting (i.e. Sep 1, 2020 - Aug 31, 2021), the presumption is for income received Jan 1, 2020 - Dec 31, 2020.

This is correct. 99% of individuals operate based on cash accounting not accrual accounting which is on when the cash is actually received.

For example, both my employer and my wife's employer pays us every 2 weeks, but it's always 1 week late. E.g. On week 3 I receive a pay statement for weeks 1-2. So at the end of the year I've effectively earned a week of pay in December that I wasn't paid until January. No one counts that as income until it's received.

I asked this previously but never got a reply - did anyone get their 2nd stimulus check before the new year?

 

[Homerboy]

In Turbotax go to the forms section and actually read what it asks on the official IRS form. I promise you it's more straightforward and easy to understand than most people realize.

It's TTs job to make tax returns seem like a confusing boogeyman.

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.