File now or in July?
The recently passed CARES Act includes a provision to send stimulus checks to eligible Americans and their dependents. Eligibility for stimulus checks is based on your most recently filed tax return.
If your Adjusted Gross Income (AGI) was high in 2018, defined here as over $75,000 for a single filer or $150,000 for joint filers, but your 2019 AGI will be near or below those amounts, you may want to file your taxes as soon as possible.
If your 2018 AGI was below $75,000 for a single filer or $150,000 for joint filers, but your 2019 will be near or above these amounts, you may want to delay filing your taxes. The April 15 deadline has been extended until July 15.
The stimulus payments, called Recovery Rebates, are phased out as AGI rises higher than the limits above. For every $100 above the AGI limits, the rebate is lowered by $5. A single taxpayer with no children would receive no rebate if their AGI exceeds $99,000 and childless couples reach the cut off at $198,000 of AGI. To help you estimate how much you can expect and see the effects of filing now or delaying the filing of your 2019 return, try this calculator from the Washington Post.
Technically, these funds ($1,200 per adult and $500 per child under age 17) are tax credits against your 2020 income. Therefore, if you are eligible but do not receive funds in the coming weeks, you will see your 2020 tax bill reduced when you file your 2020 return in early 2021. Oddly, if you receive funds now and your 2020 income exceeds the limits, it does not appear that you will need to pay it back.
Caution: There are many scam artists preying upon the unwary. The government will not call you or request information from you. These rebates are being disbursed based on information the IRS already has. If you have used direct deposit for a refund on your 2018 or 2019 tax returns and the bank is still currently your bank, then there is nothing else you need to do. The money is supposed to be direct-deposited into your bank account. If your bank has changed or if you have not previously used direct deposit and wish to do so, you can call 800-829-1040 to update that information. Alternatively, in the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to waiting for checks in the mail. If you have moved since filing your most recent return, file a Form 8822.
Lastly, the IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for the most up to date information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.
Moisand Fitzgerald Tamayo, LLC is an Orlando, Tampa and Melbourne, Florida based fee-only financial planner serving central Florida and clients across the country. Moisand Fitzgerald Tamayo, LLC specializes in providing objective financial planning, retirement planning, and investment management to help clients build, manage, grow, and protect their assets through all phases of one’s life and the many transitions in between. If you have any questions or would like to discuss anything further, please give us a call or send us a note. If you are not a client and wish to receive emails notifying you of new posts – no more than once per month – fill out the subscription information in the sidebar to the right. For more frequent updates, follow us on Facebook, LinkedIn, or Twitter.
Important Additional Information & Disclosures
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Moisand Fitzgerald Tamayo, LLC-“MFT”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from MFT.
Please remember that if you are a MFT client, it remains your responsibility to advise MFT, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. MFT is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. Tax advice is given only to clients and only when agreed to by MFT. A copy of the MFT’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request.
Please Note: MFT does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to MFT’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please Note: Limitations: While MFT does NOT pay for recognition, awards, or publicity, neither rankings and/or recognition by unaffiliated rating services, publications, or other organizations, nor the achievement of any designation or certification, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if MFT is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers. No ranking or recognition should be construed as a current or past endorsement of MFT by any of its clients. ANY QUESTIONS: MFT’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including providing the criteria used for any reflected ranking.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your MFT account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your MFT accounts; and, (3) a description of each comparative benchmark/index is available upon request.