During and in the aftermath of Covid-19, the US granted a stimulus/emergency fund with payments available to US citizens. What does it mean for your unfiled tax returns or back taxes owed?
1. Haven't Filed Taxes? As we have previously recommended if you haven't filed taxes in a long time, you should consider two paths: filing six years, 2018 to 2024, to get into full compliance or three years, 2021 to 2024, to just focus on available refunds.
* Your 2021 tax refund is actually available UNTIL April 15, 2024!
* To get the $1200 Stimulus Check (single), $2400 (married couple) and $500 per child, your 2020 or 2021 tax return will have to be filed UNLESS your only income is Social Security/Disability/SSI or at poverty level ($12,000 or less) in which you will get the $1200 check without filing a return. To get the check(s), your income as a single person will have to be less than $99,000.00, head of household, $146,500.00, or $198,000.00 as married to get the emergency payments (and those payments are reduced when your income exceeds 75k, single, 112k H of H, 150k married.)
* If you file 2018 to 2024, in most cases, the IRS will consider you "compliant" and not bother asking for the older years. If you owe money, a livable payment plan or settlement can be pursued.
Naturally, self-employed people have a few more things to consider.
2. Back Taxes Owed? The IRS generally prevented new liens or levies until 7/15/20 BUT on select cases where the statute of limitations is in play they may have acted. If you are in a payment plan and can't afford it any longer, you can default and likely have several months to come up with a new plan. In that "default" period, you can also examine with a tax professional to see if you qualify for a settlement or a more attractive remedy than a payment plan.
Does owing back taxes affect getting a 2020 Stimulus Check? Owing back taxes shouldn't impede your ability to get a stimulus payment due to the Covid-19 virus.
