SAN ANTONIO — Take another look at your taxes, especially if you filed early. You might find you are owed some extra money for 2020.
“You leave off a benefit, you leave off a credit, you don’t take advantage of this lookback rule and you get a smaller credit than you deserve,” said Mark Steber, chief tax information officer for tax service Jackson Hewitt.
The “look-back rule” allows taxpayer to look back and use their 2019 earned income for their credits if their 2020 earn income is less. It allows you to cherry-pick the better of the two incomes.
“That will help alleviate some of that tax refund shock or a reduced refund because you had a lower income on which a lot of the credits were based,” Steber said.
Only a portion of unemployment benefits are now taxable for 2020.
“The first $10,200 of unemployment benefits are not taxable,” Steber said. “Only the amounts over that are taxable.”
Here is how the stimulus payments work. They are not taxable. Still, report the first two on your 2020 taxes.
“The new payment is 2021 payment so it will be reconciled on next year’s tax return,” Steber said.
Filed early and need to adjust your return because of the new rules? Do not worry. Here is what to do:
“If you have to file an adjustment to amend your tax return, you should wait until after you received your refund so that the tax return is fully processed,” said Jose Garcia, of Mission Tax and Financial Services.
“You have three years from the due date of the return to when you filed to perfect or correct or amend a tax return,” Steber added.
You will need to fix any mistakes that mean more money in your pocket, the government will not catch them.
“It will not happen automatically,” Steber said. “Errors of omission don’t get fixed by the IRS. They don’t automatically send you money.”
You will also want to amend your returned if you left off any income like unemployment benefits. The government has three years to decide to collect any missing money.
The tax deadline for Texans has been extended to June 15, and to May 17 for other states. Steber recommended filing as early as you can for two reasons:
“If you do get a refund, you get that money, you lock up your data from those terrible schemers that might try to steal your refund,” he said.