Tax season is upon us again as Americans must declare annual tax returns with the IRS. However, this year is a little different with new terms, new payouts and even bigger consequences.
The federal government has issued trillions of dollars in relief to help the country weather the economic downturn caused by the coronavirus pandemic. Introducing Stimulus Checks Adds Another Layer Of Importance To This Year’s Tax Returns, With All The Stimulus Payments To Come probably based on information filed this spring.
Today is the first day the IRS accepts 2020 tax returns …
For those who are eligible for stimulus checks using 2019 income that earned more in 2020, they may want to delay the 2020 deposit as your most recent income # is used to determine your eligibility for this next round of stimulus measures!
– Mike Fischer, CPA (@MikeProLedgr) February 12, 2021
The adjusted gross income will be used to decide on eligibility for the stimulus check
Congress is gradually working to pass the Covid-19 Economic Relief Bill, the US bailout, proposed by President Joe Biden shortly before he takes office. The $ 1.9 trillion package includes, among other things, a series of $ 1,400 stimulus checks for eligible Americans.
The main determining factor for eligibility is the Adjusted gross income (AGI) of an applicant or of a co-applicant, which is defined by the IRS as âgross income minus income adjustmentsâ.
To break this down: your gross revenue is the total amount of money you receive in a year in the form of salaries, dividends, capital gains, business income, retirement distributions, and any other streams of income you may have .
Adjustments can be accumulated through educator expenses, interest on student loans, payment of child support and contributions to a retirement account; who are all expenses to be deducted of your gross income to reduce your AGI.
This is why your AGI may be less than your gross income, but can never be greater than this. In the case of married couples filing jointly, all income streams and adjustments are grouped together to produce a single digit.
How can I check my adjusted gross income?
Reports suggest that the new round of stimulus checks will be available to individual filers with an AGI below $ 75,000 per year, and to co-applicants with a combined AGI of less than $ 150,000 per year.
To determine your own AGI and see if you’re eligible for full $ 1,400 stimulus checks, the IRS has published this guide:
How to check your AGI:
- Your AGI is activated line 8b of Form 1040 on your last tax return.
- If you are a first-time declarer over 16 years of age then your AGI will be zero.
- Anyone with a Identity protection PIN (IP PIN) can access software information, which is also accessible through this online tool.
- If you don’t have a copy of your tax return, you can use Get the transcript online to display your AGI; simply complete the identity verification process, select Transcription of the income tax return, and see the “Adjusted gross income” line entry
- You can also access the information through Mail, Where call 800-908-9946 to request a tax return transcript
Third dunning check: live updates
You can receive the latest updates on the proposed third dunning check, and other notional support measures such as the Expanded Child Tax Credit, by following our dedicated live blog.