You aren't alone if you are someone who likes to file their taxes as soon as possible, but this year you may want to hit pause before filing your federal income tax on day one. This is especially so for anyone or couple who made more in 2020 than they did in 2019.
Why, you might ask, should you wait to file taxes if you think you don't owe anything or will get a decent return? Well, it's because Congress is negotiating a 3rd stimulus check right now and if you race to file your taxes before the checks get sent out then it's likely your 2020 income will be used to determine your eligibility. Basically, if you had a tough 2019 but had a good year financially in 2020 then your 3rd stimulus check could be less (possibly significantly so) if you file your taxes early.
The good news is the inverse would be true. So if you had a good year financially in 2019 but were one of millions of Americans who struggled in 2020 then you may want to file your taxes before the 3rd stimulus check is agreed to. (The first day to file your 2020 taxes is Feb. 12, 2021).
My wife and I were lucky enough to have a better year financially in 2020 than we did in 2019, so we may very well wait until late March or early April to file our taxes this year just to see how the 3rd stimulus check talks pan out. However, if we had a worse year in 2020 then we would be filing our taxes as early as possible. I'm not saying it's right, but I'm someone who plays the game as the rules allow.
WyattTown Wrote: Good point. So do we know the income brackets they are considering for the 3rd checks yet? Like how much you can make before they start phasing you out of a check, or how much is the income cap?