Will the 2020 stimulus check reduce my tax refund in 2021?

by Damon Carr, For New Pittsburgh Courier

I recently read a “Fake News Meme” from Donald Trump. It read, “Check ya bank account. I put a stack ($1,000) in there. Don’t forget to “holla atcha” boy in November.” The Internet has no chill! I don’t know about you —but I’m voting for any candidate running against Donald Trump—Heck! I don’t care if it’s Kanye West!

As I write this article, the first wave of Stimulus checks has been released. Millions of people woke up to an early Christmas. The Gift of a Stimulus check hit their account. A friend of mine sent me a text from a mutual friend. It read, I’m Rich…B.I…. echoing the words from the famed “Dave Chappelle Show”.

With millions of people confirming they’re in receipt of the Stimulus Check, millions more are wondering, “where’s my stimulus money”. This wondering crowd has flooded the IRS website causing it to crash. As you might expect from the IRS trying to rush the Stimulus Payment—glitches have been uncovered causing delays in people receiving their money—or receiving less than expected. The IRS says that they’re aware of the glitches and are trying to remedy the situation. I wonder, “Is the “Cure” to correct the glitch worse than the glitch?

I mean—that’s what President Trump is saying about the “Cure” to mitigate the spread of the Virus that stimulated the need for the Stimulus Check.

They don’t teach us how to Evaluate Life compared to the Global Economy in Financial Class. Therefore, I extrapolate from what I’m hearing from those affected on the health side and those affected on the financial side. Life outweighs Money – when it’s you or your loved one who’s been affected. Money outweighs Life—when it’s you or your loved ones’ money that has come to a halt. The former advocating for continued social distancing, the latter advocating for return to work. Exceptions exist amongst both groups. If you’re a decent human being with a clear mind, rational mindset, and can remove any emotional attachment to both sides—it’s clear —life over money!

For those who are tracking that Stimulus Check like people track their Uber ride, the IRS has made it easier. They’ve launched a website “Get My Payment”. This is supposed to allow you to track your Stimulus check. It’s also supposed to allow people to add their checking account details so that they can get Direct Deposit instead of waiting for the snail mail. As you can imagine, it too is fraught with glitches. Good Luck with that!!

There’s a ton of misinformation regarding this Stimulus Money. I’ve literally turned my Facebook page into a Financial Information Resource Hub in an effort to provide money management guidance in a time of need. As well as be a resource of “accurate information” regarding financial matters. Hit me up on FaceBook. I’d like to be your friend.

The one piece of misinformation that I continue to see pop-up is, “The Stimulus Payment is an advance refund. The money you receive now will reduce your refund when you file next year.” In an upcoming article entitled “The IRS wants your booty”, I will reveal how the IRS is straight taxing that—ask me no questions, and I tell you no lies. Fortunately, this Stimulus Payment isn’t one of them.

Allow me to address some of the misinformation that I’m seeing:

Will the Stimulus Payment reduce, omit, or eradicate my refund next year? NO! Although it’s true that the Stimulus Payment is an advanced credit for your 2020 Tax Return. The IRS is essentially creating a credit that doesn’t exist to offset the Stimulus payment. In other words, it’s a “zero sum gain”—wash! Nothing gained. Nothing owed.

What if I get more than I’m supposed to—do I have to return the money to the IRS? If the over and above payment is 8 million dollars like someone recently received in error this year—there will certainly be a day of reckoning. Those funds will have to be returned. But for the rest of us, payment is based on either 2018 or 2019 tax filing. So if you earned more in 2020—then and only then does this question come into play. Consider yourself Lucky! If you’re one of the few that earned more this year than you did last year—extra change in your wallet. Nothing owed to Uncle Sam. Caveat: That’s what they’re saying now.

What if the government short-changed me by not doling out all that’s rightfully mine? You’ll get your just due!

Again Stimulus Money is based on either 2018 or 2019 Tax Returns. Things were looking UP! Then bam! A freaking Pandemic. Everything has been delayed or put on hold—including our paycheck. So, if 2020 income is less than gratifying in comparison to your last tax return—then you may rightly receive more stimulus money. When you file your 2020 tax return, the credit will be reflected on your tax return. You’ll get the difference from what you received and what you should have received. For example —if you were awarded say $800 because of income phase-out restrictions, your reduced income now suggests that you should have gotten the whole $1,200. You’ll receive $400 extra as a refundable credit on your tax return for 2020. A day late and a couple thousand dollars short, I know. On the positive side, you’ll get it.

Stay safe!

(Money Coach, Damon Carr can be reached at 412-216-1013.)

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