How to maximize your next stimulus check by filing your taxes this weekend
It often pays to file your taxes early, and this year there may be more benefits than usual.
Not only do you stand to get your tax refund sooner, but you might be able to make sure you get a larger stimulus check next time they go out.
If you’ve been counting on more relief cash to help you take care of bills or pay off debt, here’s why you may want to get your tax return in as soon as the IRS starts accepting them this Friday.
A debate over whether to 'target' the next stimulus checks
The Democrats who control Congress have been considering reducing the income limits to qualify for a relief payment, which could make it tougher to get the full $1,400 proposed for the upcoming round. The IRS would look at your most recent tax return to determine how much money you could receive.
The first two stimulus checks phased out for individuals with annual incomes above $75,000 and married couples earning over $150,000, but Democrats have been looking at "targeting" the next payments to people with lower incomes.
According to multiple media outlets, there's been talk of shrinking the phaseout threshold for singles to $50,000.
That would mean if you made $75,000 in 2019 but only $45,000 in 2020, your 2019 income could disqualify you for a full payment but your 2020 earnings would get you the $1,400 — so you'd want to get your 2020 return in front of the tax agency pronto.
The bill is moving quickly — and so should you
Monday night, House Democrats unveiled a proposal to keep the existing income limits, meaning individuals making $75,000 would still get a full payment. But the matter may not be settled, because the thresholds could still be lowered by the Senate.
Even if the income levels for stimulus checks don't change, you might still want to hustle with your 2020 taxes to get a full payment. For example, maybe you made $95,000 in 2019 but just $65,000 last year because of the pandemic.
Democratic leaders hope to have a COVID rescue bill completed by the end of February, and the IRS will likely get started soon on the administrative work needed to get the checks out rapidly after President Joe Biden signs the legislation into law.
Fortunately for you, electronic filing using today's tax software can get your return into the IRS' system almost instantly. So even though you have until April 15 to file your taxes, you may not want to wait if you’ve got relief money on the line.
What if your return won't help you get the full stimulus check?
If the income barriers for getting stimulus checks keep you from getting a full payment — even if you submit your tax return early — here are some saving and moneymaking options to essentially create your own stimulus check:
Make saving your policy. You don’t always have to pay a, well, premium on the best insurance policies. Before you renew your auto insurance or buy homeowners insurance, shop around and make sure you’re not paying more than you should.
Cut the cost of your debt. If you’ve got a lot of credit card debt, you're probably paying a ton of interest. Tame that debt — and make it go away more quickly — by sweeping up your balances into a single, lower-interest debt consolidation loan.
Stretch your dollars. Look for ways to find a little budge in your budget. Turn down the heat a little to save on electricity. Get rid of your cable or one or two streaming services. Meal-plan for the week and cut back on expensive ingredients. And, download a free browser extension that will automatically find you deals and coupon codes every time you shop online.
Do the hustle. If you’ve got a useful hobby or skill, turning it into a side hustle is as easy as setting up a profile. An online marketplace for gig work can help you connect with the right people to get your freelance business up and running.
