Why you might want to file your 2020 taxes before lawmakers approve the stimulus bill

HOUSTON, Texas -- As lawmakers in D.C. debate the stimulus bill, the amount of your stimulus payment could hinge on whether you've completed your taxes.

SEE ALSO: Third stimulus check updates: House gears up for vote on Biden's COVID relief bill with $1,400 payments

IF APPROVED, HOW WILL THE IRS DETERMINE THE 3RD STIMULUS PAYMENT?

According to lawmakers, the IRS will use your tax return. If you haven't filed your 2020 taxes, the IRS will use your 2019 return.



The plan is to send $1,400 to individuals who make less than $75,000 and phase out at $80,000. If you haven't filed in 2021 and had a child last year, you won't see the money for your new child.

"I filed my taxes already, but I didn't know with us filing taxes, I had no idea I would get stimulus money for the child I had in 2020," Houston mom, Ashley Taylor said.

SHOULD YOU RUSH TO FILE YOUR RETURN?

The stimulus bill hasn't been signed into law. However, it could happen within the next few days.

If you want the IRS to use your 2020 return to determine eligibility, lawmakers said you should file soon. If you didn't qualify for previous payments but lost income in 2020, you'd want to file your taxes now because you might qualify for the third payment.

SEE ALSO: Third stimulus check calculator: How much could you get from $1.9 trillion COVID-19 relief package?

WHY WOULD YOU WANT TO HOLD OFF ON FILING?

If you made more money in 2020, and don't qualify, you would want to wait to file your taxes, and let the IRS use your 2019 return.

SHOULD YOU FILE TAXES NOW IF YOU RECEIVED UNEMPLOYMENT?

The bill allows those who received unemployment benefits in 2020 to write off $10,200 to lessen the blow of paying taxes on them. This means, if you haven't filed your taxes, and you received unemployment benefits, you should wait.

The IRS hasn't announced how people will be able to get the money, but it should provide guidance after the bill is signed into law. If you filed your 2020 tax return, it's possible you may have to amend your taxes to receive money back.

SEE ALSO: IRS giving Texans until June to file taxes following winter storm

WILL THIS BE THE LAST STIMULUS PAYMENT?

If approved, this would be the third stimulus payment sent to Americans. Last summer, a $1,200 payment was approved. Last winter, lawmakers approved a $600 payment.

This stimulus check would be $1,400. With millions of Americans receiving the COVID-19 vaccine, and numbers continuing to decline, economists believe this might be the final payment.

"Unless something goes horrifically wrong with the vaccination and the virus, I don't see another big step for something like this. I think this is almost certainly it." University of Houston economics professor, Dietrich Vollrath explained.

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