WEST PALM BEACH, Fla. — It's less than a week into federal income tax filing season and tax specialists are already talking strategies to maximize your refunds.
Tax specialists say with a looming stimulus bill up in the air, timing your return is important.
Based on ongoing discussions in Washington, co-sponsors of the latest version of the stimulus bill are indicating they'd prefer to see no relief checks for individuals making more than $75,000 a year or couples making more than $150,000.
The IRS will rely on your most recent filing when determining stimulus check eligibility.
"There are both pros and cons to filing early," Chantelle Brown, a tax strategist at A Class Tax Solutions, says. "It's all really going to come down to your income. At this point, I'd say if your income is below the $75,000 threshold, then definitely go ahead and file, because if the next stimulus check is approved then my understanding is that it will more than likely be based off your 2020 filing, so you want to go ahead and get that in so there's no delays in you receiving any additional funding that's going to come out."
Brown says unemployment questions and concerns are more common this tax season and so are reports of people discovering they've been hacked or had their identity stolen when trying to access their 1099-G forms.
Brown's advice is to seek out law enforcement.
"What I would say is, if that's the case, then what you're going to want to do is go and file identity theft with your police department or the sheriff's office and then I'd also contact the IRS immediately so they can flag your account, so if they're doing that, you're not having any issues that can cause you further headache," she says.
Brown further advises to contact the Florida Department of Economic Opportunity, as well, about the possible breach to your account.
Another tip from Brown to ensure you're not left with a big bill on your unemployment payment is to opt to have your federal withholdings taken out of your unemployment money before you get it.
As it stands, the deadline to file taxes is April 15 unless you apply for an extension, which will buy you an additional six months.
Just in time for tax filings, a new rule is in place aimed at saving you money by taking a look back at your earnings from 2019.
"The IRS and Congress, they understand that a lot of people are or were out of work, so a lot of people earned less money in 2020 than they did in 2019, so to make it not as big of a blow to you on your taxes, they are allowing us to get the 'lookback' credit," Brown says.
The "lookback" credit is a new provision that allows you to use either your 2019 or 2020 income when filing your earned income or additional child tax credit.
Brown explains that it's in place "to make sure you are getting the best refund possible for you based on your income for either 2020 or 2019." She says she's "seen that help tremendously with some of our clients [who] were in financial need because they earned less income in 2020."
"If it's a better option for you to use your 2020 income, you don't have to worry about the new rule," she says.
Remember, to get more of your questions answered, be sure to look for the next tax tip Tuesday conversation on the WPTV Facebook page or your streaming platforms.