If you’re one of the many Americans who has fallen behind on your taxes, now is the perfect time to get caught up and potentially receive a significant amount of money. It is estimated that 9 to 10 million people who have not yet received their stimulus payments are still eligible. Are you one of them? The cost of becoming compliant, such as hiring a professional to help you with your taxes, can be covered by the money you receive from the stimulus check. In fact, you may even have money left over after paying for compliance costs. This is especially important for those who are considering renouncing their U.S. citizenship, as the stimulus money can significantly help cover the cost of renouncing. Don’t miss out on this opportunity to receive financial support and become compliant with the IRS. Read on to find out more about the eligibility requirements for stimulus checks, the benefits of being tax compliant, and the steps you can take to get up to date with the IRS.
What is a stimulus check?
Economic Impact Payment, better known as Stimulus Check is a direct payment to American families that the U.S. government provided in response to COVID-19. Three stimulus checks have been paid out from April 2020 to December 2021:
- the first check provided up to $1,200 per eligible adult and $500 per eligible dependent child
- the second stimulus check provided up to $600 per eligible adult and dependent child
- the third stimulus check of up to $1,400 was made available per adult and dependent (there is no age requirement; dependent can be any age)
It’s not too late to claim any stimulus checks you might have missed!
You will need to file a 2020 tax return to get the first and second stimulus checks and a 2021 tax return to get the third one.
Depending on your status, you may be eligible to receive up to $3,200, or more if you have dependents. The actual amount of the payment is based on the individual’s filing status, adjusted gross income, and the number of qualifying children.
Who can claim the stimulus check?
- Citizenship or Residency – You must be a U.S. citizen, Green Card Holder, or qualifying resident alien. Those people who are thinking about renouncing their US citizenship can also claim stimulus checks. They were still considered citizens when the government issued these checks and therefore may also be eligible to receive them.
- Social Security Number – An individual must have a Social Security number (SSN) to receive the stimulus payment. Thus, an individual who has an individual taxpayer Identification number (ITIN) will not receive these checks.
- Dependency – The amount of money you are eligible to receive can be increased even further if you have children or adult dependents. If you are claiming dependents for the 3rd stimulus check, they can be any age as long as they have an SSN or ATIN. Unlike the first and second stimulus checks, there is no age requirement. Additionally, you cannot be claimed as someone else’s dependent on a tax return to get the third stimulus check for yourself.
- Income – Households with adjusted gross income (AGI) up to $75,000 for individuals (or married couples filing separately) will receive the full payment. For those filing as head of household, the threshold is $112,500; and for those filing as married filing jointly, the threshold is $150,000.While there is no minimum income needed to qualify for stimulus checks, the amount of the payment starts to phase out for people with higher earnings. Those with adjusted gross income over a threshold will receive a reduced amount. View the chart below to compare income requirements.
Related: Don’t Miss Out! A Guide to Recovery Rebate Credit for U.S. Expats
Benefits of becoming tax compliant
Being tax compliant has several benefits that can greatly impact your financial well-being.
The first and most obvious one is avoiding hefty fines and penalties imposed by the IRS. By staying up-to-date on your taxes, you can avoid these detriments and save yourself a significant amount of money in the long run.
As we already mentioned, this year is your last chance to receive any stimulus payments you might have missed. If you have fallen behind on your taxes, you may not be eligible to receive these checks, and you could be missing out on a significant amount of money. So don’t let the opportunity slip away! Get your taxes in order and receive the financial support you may be entitled to!
In addition, being tax compliant can also help you with financial planning and organization. When you have a clear picture of your income and expenses, you can make better financial decisions, and plan for your future.
Steps to becoming tax compliant
Don’t let your late filings weigh you down. Get your taxes back on track with these easy steps for catching up on late tax filings:
- Gather all necessary documentation: This includes any tax forms, receipts, and other documentation that you will need to complete your tax returns. Make sure you have everything you need before you start the filing process.
- Determine applicable tax forms and exemptions: Depending on your circumstances, you may be eligible for certain tax forms or exemptions. It’s important to determine which forms and exemptions apply to you in order to ensure that you are filing correctly.
- File taxes for all past years: Once you have gathered all of your necessary documentation and determined which forms and exemptions apply to you, it’s time to start filing your taxes for all past years that you have not yet filed. Make sure to file your taxes for each year separately, as each tax year is treated individually by the IRS.
There are a variety of resources that can help you access important information and guidance on your way to becoming tax compliant. One of these resources is the official website of the Internal Revenue Service (IRS), which provides a wealth of information about taxes, including forms, instructions, and publications. Additionally, our FAQ section is an excellent resource for finding answers to common questions about late filing and other related topics. Lastly, we also offer e-books and other useful tools that provide in-depth information on various tax-related issues. Those looking to gain a deeper understanding of specific topics will find these resources extremely useful.
Overall, becoming tax compliant is not only a legal requirement but also a practical step towards financial stability. One of the best reasons to become tax compliant now is that it may enable you to receive a significant amount of money from the government through stimulus checks. It can help you access government benefits, avoid penalties, and better manage your finances. With the deadline for claiming these checks fast approaching, now is the perfect time to take action and become compliant.
Don’t let the fear of high compliance costs or fees for late filing hold you back – stimulus checks will more than compensate for any of these expenses. And don’t forget to spread the word to friends and family who may be in the same boat. Let’s make sure no one misses out on this opportunity!