One of the main topics surrounding the 3rd stimulus check is overpayments and what to do with them. Families in 2021 with an AGI below $40,000 on a single return or $50,000 on head of household and 60,000 as joint won’t have to repay the credit overpayments that they get. On the other hand, families with in 2021, AGI of at least $80,000 on a single return, a hundred thousand on a head of household and 120 on a joint return will need to repay the entire amount of your overpayment when you do file your tax return for your 2021 tax return in ’22. So be careful of that.
To figure out if you need to pay anything back, check your tax calculator. It will tell you whether or not you’re going to have to pay this back. Keep in mind, if you’re earning $80,000, $100,000 or $120,000, you’re going to have to pay it back. If you’re earning less than those from the beginning stipulations, then you will not. Okay?
Now, the question is if the IRS is up for the challenge. Their very out of date computer systems, their shrunken workforce because of COVID and a myriad of other responsibilities they’re going to have to deal with, especially since a lot of people have filed their tax returns and are now having to amend them because the stimulus package included the first $10,200 of your unemployment to be considered tax free. Now, I did find out that if you have already filed your tax return and you deserve that credit back, you don’t have to actually file an amendment. The IRS will amend it for you on their own, and then send you back the difference. But this could take up within this year to do it.
I’m still filing amendments for my clients, just so that I can get it in the system. I don’t trust the IRS to do it for me. And then you can also file through your tax accountant, through Turbo Tax, through other software programs, you can e-file an amended tax return now through the IRS. Now, you’ll still have to mail in your state the majority of the time. I live in California, and California is very archaic, so we still have to mail everything in.
To learn more or if you would like clarification on the 3rd stimulus check please send us an email at [email protected] or contact us here.
Wiley Financial Services is a full-service accounting firm, specializing in Business Appraisals and Business Valuations, that has over 20 years of experience with a variety of industries ranging from restaurant, biomedical, manufacturing, advisory firms, nurseries, event design firms, IT firms, and many more. Wiley Financial is based in Oceanside, CA and we primarily service clients across the Western United States from our San Diego office.
