PEORIA, Ill. (WMBD) – Tax season is quickly approaching and COVID-19 could impact your return.
Like most things in the past year, COVID-19 could make a big difference on taxes. One reason for that is relief provided by the federal government.
President of Total Income Tax, William Sharpe, explained that for people who are still awaiting a stimulus check, tax season could be the time to cash in.
“The one we’re going through right now, the $600 stimulus and the one from April, you can add that to your tax return,” Sharpe said.
Sharpe says these payments will not alter tax refunds, but on the other hand, relief like unemployment can.
“There’s going to be a lot of folks that have a lot less earned income this year, and earned income is from their jobs,” Sharpe said.
He said not only could receiving unemployment mean smaller refunds but if taxes were not withheld from these payments, you could owe the IRS.
“In that scenario, it’s not going to be pretty. It’s going to be a big difference from what they’re used to experiencing,” Sharpe said.
So what should you do if you are expecting a big refund this year? A local financial planning expert says setting it aside is a good idea.
“With 2020, we all learned a lot of unexpected things can happen. So the best thing you can do is save that money,” said Wyatt Wolven, Chief Financial Officer at CEFCU.
One suggestion Wolven has for saving your refund is setting up an emergency fund.
If you are anticipating owing money to the government, he said it’s never too early to set up a plan.
“Go ahead and start planning ahead, set up a savings account now, put some money aside into a certificate,” Wolven said.
Sharpe said he does not believe tax refunds will be delayed but he encourages people to not spend the money until it’s in their account.
On February 12th, the IRS will begin accepting tax returns.
The deadline for filing is April 15th, but Sharpe says that date could be extended.