I started preparing my taxes and showed that I was going to owe the federal money in the amount of $259.00.
As soon as I answered the Stimulus question and entered a total of $3600.00 which is what my wife and I received, The amount I owe for federal jumped from $259.00 to $3859.00. Everything I had read about the stimulus package says we are not going to have to pay it back, so why does the amount I will owe increase by exactly $3600.00.
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 to account for that.
The IRS requires you to report all relevant stimulus information when you’re filing your return.
Ok, so when I am asked to enter the amount we received, it ups what I owe the IRS from $269 to $3869.00. Since we don't have to pay this back, this is were I get confused. Why would it up my federal tax due in this case, to exactly $3600.00, the amount we received. Since we only have to report the stimulus not getting this. Thank you.
In some cases, TurboTax started the return with the assumption that no stimulus payment was received for 2019 or 2020. So it calculated your amount owed by deducting the amount of the stimulus payments from the total owed..
But when you told TurboTax that you already received the stimulus payments then it removed that $3000 credit and showed the amount that you actually owe.