As the IRS Lets You Know Why You Got Less Money
A year into the coronavirus pandemic, some Americans are still confused about why they received less money for stimulus checks than expected and, in some cases, no money at all.
If you are, there is good news: a refund credit on this year’s tax return will help you claim those funds.
Keep in mind that this does not necessarily mean that you will get exactly what you think you are due.
Here’s how it works: The stimulus checks issued last year for up to $ 1,200 and $ 600 per person were essentially prepayments for the refund credit.
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This ensures you don’t miss any of the $ 1,400 worth of stimulus checks in the mail
A section for claiming that credit has been added to this year’s tax return forms – line 30 of Forms 1040 or 1040-SR.
In this part of the tax return, tax advisors can start with the amount of the economic stimulus money already received and calculate further funds due. This can be done either through a worksheet that accompanies the tax form or through tax preparation software.
Once the IRS receives the return, the tax authority will also enumerate your refund credit, which means they may correct the amount you claimed.
According to the tax authority, if there is a discrepancy it could lead to a “slight delay” in processing the tax return.
For people who still don’t understand why they received less money than they thought was due, or no money at all, the process could help clear the confusion.
In this situation, the IRS sends letters to the filers explaining what caused the correction.
Some reasons the IRS may correct the loan amount is not providing a valid Social Security number or being entitled to be dependent on a 2020 tax return. If a loved one was 17 or older as of January 1, 2020, they will not be eligible for payment under the terms of the first two checks.
Mathematical errors in the discount calculations can also lead to a correction.
The refund credit for this year’s tax return will generally apply to the first two economic reviews.
However, in certain circumstances, the IRS may charge the new payments of $ 1,400, such as: E.g. if your return for 2020 shows that your income has decreased since 2019.
Filing a 2020 tax return can also give you a stimulus check if the government hasn’t kept your information, especially if you don’t normally file tax returns.
It should be noted that federal recipients – such as those receiving social security, supplementary income, or railroad pension benefits – should automatically receive their checks, even if they don’t typically file returns. However, if these beneficiaries are required to provide information about eligible dependents, the IRS will require them to file a tax return.
Federal tax returns are usually due on May 17th of this year.
If your income is $ 72,000 or less, you can file your tax return for free using the IRS Free File program.