Stay Ahead of Law Changes & Protect Yourself Against Being Audited: Corporate Transparency Act and Reasonable Compensation

How to File Your Stimulus Check on Your Tax Return…Correctly!

What do I do with the Stimulus Check Letter for 2021?

Hey folks, I’m Kevin Molen with Molen & Associates. I wanted to give you a quick update on stimulus checks, as many of you would have seen based on the third round of stimulus that was passed and paid in 2021. This would have been around the middle of March or so that you may have received these stimulus checks. That was the $1400 stimulus payment that was sent for each person on your tax return. Basically, you will be getting a letter from the IRS showing for community property rules between you and your spouse. Depending on if you’re married or if you’re single, you may receive one or two letters, but ultimately this letter is indicating exactly how much you received. Now, the IRS sent out some of these letters last year as well regarding the first and second round of stimulus payments paid out in 2020, but these letters did not come to everybody, and the IRS was not consistent in sending them. In some cases, they came two or three months after people had already filed tax returns – so wildly inefficient. This year we’re seeing a lot more of them. In fact, probably seven to eight out of every 10 clients that that come through my door are holding on to that letter that letter. It is going to be super valuable for tax filing purposes. Make sure that you keep it and give it to your tax advisor.

If for whatever reason you did not get a letter. There is an IRS online account that you can log into. If you just go to there are about nine different options that are front and center and the bottom right option is going to be in regards to getting your getting into your online account in order to inform you as to how much exactly you received for stimulus purposes. Now much like on the previous filing, the 2020 filing, if you got less than what you were supposed to get or if your new tax return information would qualify you for more, you can still claim a recovery rebate credit on your tax return. This is why these numbers are so important to know if you got what you were supposed to get or if based on your new information you actually got more than what you should have received, you’re fine. You don’t have to repay anything, even if for example, a divorced couple that has a child that that transitions from parent to parent for tax claiming purposes, actually one parent would have received the stimulus payment and then when filing the tax return, the next parent can claim a recovery rebate credit. So, in fact we’re actually getting the stimulus payment twice and that’s completely legitimate based on the way that these stimulus payment rules were set up. There’s a lot of complexity in regard to this and so if you have questions specific to your scenario, as always give us a call at 281-440-6279, but other than that hopefully this has been helpful!

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