Report: Why Filing 2020 Tax Return Should be Delayed?
While taxpayers might feel pressured to file their 2020 tax return as soon as possible, given how the IRS has been continuously pushing people to, there's one report providing one reason why a little delay can prove beneficial.
Delaying Filing of 2020 Tax Return Makes Sense For This Group of Taxpayers
According to Fox Business, there is one perfectly good reason why someone should wait to fail his or her 2020 tax return.
This reason is if they believe they would be out of a stimulus check if they do so.
Filing returns as quickly as possible is usually a sound advice, but if a person is likely to find himself or herself out of a stimulus check, then filing immediately might not be a good idea.
At present, lawmakers are considering legislation that would possibly release an additional round of direct payments to American households.
The IRS, in order to identify who has eligibility for those payments referred to the most recent return it has on record for households. It must be noted that these payments are not technically gifts from the government. They are considered an advance on a 2020 credit.
For individuals who earned more in 2020 than in years prior - particularly already enough to put them over the expected adjusted gross income threshold - how IRS determines eligibility could be a problem for them.
File Early if Income for 2020 is Less than 2018, 2019
Marianela Collado, a certified financial planner at financial planning firm Tobias Financial Advisors, revealed this FOX Business. "The IRS would [then] be looking to the 2019 tax return to determine eligibility or 2018 if 2019 hasn't been filed," Collado said.
Taxes are due by April 15.
On the other hand, Collado explained that people who earned less in 2020 than what is recorded on their 2018 or 2019 returns would benefit from filing as soon as possible.
They are also considered the lucky ones who can claim prior stimulus payments they may have missed out on.
Normally, financial experts calls on individual taxpayers to file early for security purposes. Annually, tax season has always been ripe for fraud to happen, and filing early is one of the methods to avoid being scammed.
Tax scams pop up every year - because people get fooled every year.
The scammer typically pretends to be with the IRS claiming a taxpayer owes money or urging to file taxes quickly to avoid being penalized and the whole thing always end up with stolen personal information and lost money. Filing early is usually one of the most effective protection against these wise scammers.
The second way is to immediately report being scammed or almost being scammed so the IRS can swoop in to help.
"If you got scammed, please let the local authorities know about this," Oana Schneider from the Better Business Bureau had said one time.
"Report this as soon as possible because the faster you can do this, the better the chances that we're going to track somebody at some point."
Filing early usually also means getting return refunds quicker. No one will deny that these are normal times.