topic stimulus payments in Deductions & credits

stimulus payments

tstoner123 — Wed, 07 Apr 2021 17:01:36 GMT

Why do my taxes change from refund to over 2400 owed after entering stimulus payments when asked if I received them?

Re: stimulus payments

JohnW152 — Wed, 07 Apr 2021 17:18:05 GMT

When you begin entering your information into TurboTax, the program starts with the assumption that you haven't received stimulus payment, and are therefore entitled to the Recovery Rebate Credit on your return.

When you enter the amount of stimulus you've actually received, it adjusts your refund or balance due to account for that.

The IRS requires you to report all relevant stimulus information when you’re filing your return.

Re: stimulus payments

NCperson — Wed, 07 Apr 2021 17:42:06 GMT

@tstoner123 -good answer by @JohnW152

I see it as a poor decision by TT to put the stimulus questions at the end of the tax return questions.

The whole time you are doing your taxes and staring at that refund meter, what you don't realize is that it assumes you received no stimulus, so it is overstated. Then your expectations are deflated at the end when you enter the stimulus actually received and the refund meter adjusts to your correct refund.

Alternatively, one of the first questions Taxslayer asks is how much stimulus you received, so their refund meter isn't inflated while you are entering all the other documents.

hopefully TT will change their software for 2021, because we are going to go through the same thing with the 3rd stimulus - and that may be even more inflated because all your dependents get you $1400.