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12-30-2020, 02:19 PM
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#21
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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Quote:
Originally Posted by jebmke
I suspect they want to get it out before people start filing so the reconciliation works on the tax return. Otherwise, they might risk a duplicate payment being made as part of a refund on a tax return.
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The new law specifically says January 15, 2021 is the deadline for distribution of the funds, and I assumed the same reasoning as you. It's much harder for the IRS to process a return filed in the first week of February if the taxpayer would be scheduled to get a stimulus payment in mid-March. Either the stimulus payment has to be canceled or the return has to be held and processed after the payment goes through. Much easier to just say "everything that can't be delivered by January 15 will be paid out through a regular tax return" even if that means some people who normally wouldn't file returns now do so.
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12-30-2020, 02:28 PM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Quote:
Originally Posted by GenXguy
Nothing here, yet. I'm still not sure I'll get it.
Based on my 2019 income, I won't qualify, but my 2018 was much lower due to much higher retirement contributions in 2018. I received the first stimulus, and I filed a tax extension in April and filed my 2019 taxes on Oct 15 at the last possible moment in hopes I might get another stimulus, and I received a notice from the IRS about a week ago asking me to confirm the tax return is from me before they will process it. I have until Jan 8th to respond, which I'm holding off on for the same reason. So, I'm hoping my 2018 income will be used in determining my eligibility again since their notice said they haven't processed my return at this point.
I don't need it, but if I can legally qualify for it, I certainly want it!
In another few weeks, I'll get my second dose of the vaccine, so I'll stimulate the economy some by finally eating out again with my stimulus.
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The first $1200 credit in the CARES Act was written to be based on 2018 or 2019 tax returns.
This latest $600 credit that just passed appears to me to have the "2018 tax return" language removed.
Thus a person needs to either qualify for the advance credit based on their 2019 AGI and tax return or claim the credit based on their 2020 AGI and tax return.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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12-30-2020, 02:30 PM
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#23
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Full time employment: Posting here.
Join Date: May 2014
Posts: 979
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Quote:
Originally Posted by cathy63
It is a credit against your 2020 taxes. That's why they're frantically trying to distribute as much as they can by January 15. You are more likely to get a payment for your son this time because they changed the requirements so that more older dependent children are included.
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I am a little confused about the phrase "credit against your 2020 taxes." Is this $600 treated as regular income and where do I enter this amount when I file my taxes in a couple months?
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12-30-2020, 02:34 PM
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#24
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by cbo111
I am a little confused about the phrase "credit against your 2020 taxes." Is this $600 treated as regular income and where do I enter this amount when I file my taxes in a couple months?
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No. If you qualify for the full stimulus based on your 2020 taxes, and yet you only received part of it, then you get to deduct the remainder from any 2020 taxes you still owe by April 15, otherwise you get a larger refund.
__________________
Retired since summer 1999.
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12-30-2020, 02:34 PM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Quote:
Originally Posted by cbo111
I am a little confused about the phrase "credit against your 2020 taxes." Is this $600 treated as regular income and where do I enter this amount when I file my taxes in a couple months?
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It is not income. Conceptually you can get pretty close to thinking of it as withholding that the government paid on your behalf.
Nobody knows for sure yet, because the bill just got passed and the IRS is still working on the instructions. However, I think it is highly probable that you would enter the $600 you received in the worksheet in the instructions for line 30 of Form 1040. It is listed as the Recovery rebate credit. I think that line will be used to handle both the $1200 earlier in the year and this latest $600.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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12-30-2020, 02:36 PM
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#26
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Moderator Emeritus
Join Date: Aug 2007
Location: Northern Illinois
Posts: 16,600
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Stimulus $600
I’m confused. Are we to include this stimulus $ and the previous one as income on our tax returns? In discussing Roth conversions with my tax guy, he said the previous $1200 checks would not be taxed. Maybe he misunderstood my question.
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12-30-2020, 02:38 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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No, not taxed.
__________________
Retired since summer 1999.
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12-30-2020, 02:57 PM
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#28
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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Quote:
Originally Posted by Ronstar
I’m confused. Are we to include this stimulus $ and the previous one as income on our tax returns? In discussing Roth conversions with my tax guy, he said the previous $1200 checks would not be taxed. Maybe he misunderstood my question.
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The stimulus payment amounts are used on your tax return, but they are not income and you do not pay any tax on them. They are a credit, and if you were entitled to more stimulus than you received, you get to subtract that amount from the tax owed.
For example, suppose you got a payment of $800 and a payment of $400 for a total of $1200; but your 2020 income is low enough that you should have gotten the full $1800. The government owes you $1800-$1200 = $600, and when you file your return, that amount will either be subtracted from the tax you owe or added to your refund.
If you get the full $1800 in advance, then the line on your tax return where you claim the additional stimulus amount due to you will just be $0. You won't owe any more tax but you won't get any additional benefit either.
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12-30-2020, 03:00 PM
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#29
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Moderator Emeritus
Join Date: Aug 2007
Location: Northern Illinois
Posts: 16,600
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^ thanks !
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12-30-2020, 03:14 PM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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Mine just showed up as pending but won't be available until Jan 4th. I have been having a lot of back issues so I think I may spend this money on massages.
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12-30-2020, 04:06 PM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,695
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Quote:
Originally Posted by cathy63
The stimulus payment amounts are used on your tax return, but they are not income and you do not pay any tax on them. They are a credit, and if you were entitled to more stimulus than you received, you get to subtract that amount from the tax owed.
For example, suppose you got a payment of $800 and a payment of $400 for a total of $1200; but your 2020 income is low enough that you should have gotten the full $1800. The government owes you $1800-$1200 = $600, and when you file your return, that amount will either be subtracted from the tax you owe or added to your refund.
If you get the full $1800 in advance, then the line on your tax return where you claim the additional stimulus amount due to you will just be $0. You won't owe any more tax but you won't get any additional benefit either.
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You explained this well, and this is how I built it into my skeleton tax form spreadsheet. Because in ER I never have any taxes withheld, I always owe taxes less any ACA premium tax credit in excess of any of it paid throughout the year (which I expect to be the case this year). Then, I expect to be able to offset the remaining amount due against the $600 stimulus amount I won't be getting because the 2019 income on which it is based is too high (they somehow used my 2018 income for the earlier check). Those 2 tax credits taken together, I'll be getting a pretty decent refund for the first time ever!
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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12-30-2020, 07:16 PM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by aaronc879
Mine just showed up as pending but won't be available until Jan 4th. I have been having a lot of back issues so I think I may spend this money on massages.
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That's a great idea!
Mine isn't even pending yet so I am practicing patience right now.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-30-2020, 07:43 PM
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#33
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 2,487
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I won’t be getting any. Both of our kids will. That said, they didn’t lose any income. We lost income from dividends as a few of our companies suspended them. But we still would not qualify, which is a good problem to have, and for which we are grateful. My own personal opinion is that the folks who lost income should be the main beneficiaries of any stimulus, and that would include landlords and banks who cannot evict due to non-payment of rents and mortgages. I have a hard time comprehending the message from congress that “the ‘people’ are suffering so we need to give everyone $xx dollars” when the people who are suffering are the ones that lost their jobs and incomes, not the other 93.xx% of workers who are still employed. I’m not an economist, but when a stimulus check is just banked, it does little good in the way of economic stimulation.
__________________
Find Joy in the Journey...
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12-30-2020, 07:53 PM
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#34
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Thinks s/he gets paid by the post
Join Date: May 2019
Posts: 2,818
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Quote:
Originally Posted by SecondCor521
The first $1200 credit in the CARES Act was written to be based on 2018 or 2019 tax returns.
This latest $600 credit that just passed appears to me to have the "2018 tax return" language removed.
Thus a person needs to either qualify for the advance credit based on their 2019 AGI and tax return or claim the credit based on their 2020 AGI and tax return.
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Yeah, I've since read the same thing when I finally looked into it further.
Unfortunately, I cannot claim the credit to get any $ on my 2020 return because my AGI is above the high threshold where it drops to $0 stimulus despite maxing out my 457B.
Looks like I won't be able to stimulate the economy any extra after-all.
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12-30-2020, 08:09 PM
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#35
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Full time employment: Posting here.
Join Date: Feb 2017
Location: Severn
Posts: 947
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Haven't seen anything but DW sure has being doing her part to support the economy (thanks Amazon!). May not be the AMERICAN economy but it's someone's.
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12-30-2020, 08:15 PM
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#36
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Like I said, it's already spent. I've been stimulating the economy ever since I retired.
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12-30-2020, 08:33 PM
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#37
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by RobbieB
Like I said, it's already spent. I've been stimulating the economy ever since I retired.
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You sure have! Especially the gourmet food ordering sites!
__________________
Retired since summer 1999.
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12-30-2020, 08:46 PM
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#38
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Thinks s/he gets paid by the post
Join Date: Mar 2011
Location: North TX
Posts: 1,833
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It would be less economy-stimulating if only needy people got it. They would only pay the debts that they're behind on & groceries, in theory. Everyone else is expected to be the stimulus...
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12-30-2020, 09:04 PM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,521
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^ very true!!
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12-30-2020, 09:41 PM
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#40
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Full time employment: Posting here.
Join Date: Apr 2016
Location: warren
Posts: 935
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Quote:
Originally Posted by Surewhitey
It would be less economy-stimulating if only needy people got it. They would only pay the debts that they're behind on & groceries, in theory. Everyone else is expected to be the stimulus...
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Most other people will just save it
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