OKLAHOMA CITY (KFOR) – Filing your taxes can be confusing and frustrating, and you might think about putting the task off, but your potential stimulus may be an incentive to get yours done ASAP.
The amount you and your family receive in the next round of stimulus checks will likely be based on your most recent tax return – which could be critical if your income suffered in 2020.
As it stands – individuals earning $75,000 or less in 2019 or 2020 are eligible for the full $1,400 check.
Married couples making up to $150,000 are eligible for a $2,800 check.
The package includes $1,400 for independents.
If you make more than the thresholds, your check is gradually reduced and hits $0 at $80,000 for individuals and $160,000 for couples.
Local tax attorneys say they are seeing the impacts 2020 has had on their clients.
“We see lots of those tax returns coming through and telling us in preparing those that people need this extra money,” said Oklahoma City-based tax attorney Travis Watkins.
Watkins says many of his clients are filing early as lawmakers continue to finalize the next coronavirus relief package.
“The government is going to go off of your last filed tax return so if you can beat them to the punch before this third round of stimulus money, you may end up actually qualifying whereas you may have not qualified using your 2019 filing,” he said.
Others may want to sit back and wait.
“Let’s say you somehow ended up making some more money in 2020 than you did for 2019 then the opposite of what we’ve been talking about is true you do want to put off your filings until they’ve made that third round of stimulus check payments,” Watkins said.
Watkins says it’s important to be prepared if you did receive unemployment or severance pay in 2020.
“Those are considered to be taxable income whereas the stimulus checks are not,” Watkins said.
That’s yet another facet to the complications of this tax season.
“You’ll want to use a tax professional this year – things are just a little too murky and crazy right now to do these things on your own,” Watkins said.
If you have a small business or are self-employed you have until the end of March to make an application for the second round of the Paycheck Protection Program.
Watkins says the only difference between this year and last year is you have to show that you lost 25% or more of your income over some quarter in 2020 versus that same quarter in 2019.