2020 Fed Taxes / Potential Stimmy Discussion

With potential Stimmy followon –
Assuming 2019 was lower income (or much lower) than 2020 and 2020 would be fully not-qualifying or phaseout…

Available options to get the payment to use 2019 (assuming similar stipulations to prior stimulus payments):

  1. File extension, with an estimate of owing $ks of taxes and paying them. But will this make them use this number as the basis for not qualifying?

  2. File extension, with an estimate that is on the optimistically low side, having reasonably not thought things through since that’s why one’s filing the extension in the first place…. Then, pay the late penalties when filing the taxes later.

Thoughts? Would either of the above choices matter?

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I don’t see how they derive $ of taxes owed to AGI. You could have SE income which is subjected to SE tax and needs to be paid in quarterly installments as well. I would do #1.

Stimulus is based on 2019 tax return they already have. If you haven’t filed 2019 taxes yet, it’s too late to file and have it be in their system in time for the stimulus payout.

If you qualify using 2020 data you get a tax credit when you file your 2020 taxes. Wait until after stimulus is passed before filing 2020 taxes.

If stimulus not passed and updated tax forms are not ready by april 15 then file an extension and wait to file 2020 until stimulus is passed.

If your 2021 income is larger than 2020, get your 2020 tax return in ASAP as soon as stimulus 1 for the year is passed. Because stimulus check 2 coming later in year will look at 2019 or 2020 AGI or if not low enough will look to 2021.

Personally I made >100k in 2019, I made <75k in 2020, and I’ll make >100k in 2021.

So I want my 2020 filing in the books ASAP once this first stimulus passes, so in October when we get stimulus 2, they’ll be able to qualify me based on my 2020 AGI, since I won’t be able to qualify under 2019, nor will I be able to apply for a tax credit on 2021 and I doubt they’ll structure stimulus 2 in a way that allows amending 2020 tax return for it. I imagine it will be a tax credit on 2021.

Form 4868 to file for extension, requires you to enter your estimated total tax liability, then your total payments so far and then the balance that you are paying. So from your total liability, they could very well derive an AGI maybe assuming standard deduction. You’re right that SE income and related taxes would complicate things for them to estimate an AGI since there’s no way to tell what is what in your payment. I doubt that they would for the stimulus since filing for extension is not the same as filing your taxes.

But you simply don’t have to file form 4868 at all. You can simply make a payment of the balance of your estimated tax liability - your payment without saying anything else than the payment is for an extension. That way you don’t have to file a separate form for your extension. Much less for them to go on than if you filed Form 4868.


Personally, I may do just that if the stimulus does not pass by the end of March since I’ll have higher income in 2020 and may go over the threshold while we were still in the middle of the phase out regime based on 2019 income.