What is The Impact of Coronavirus on Tax Relief?
The Coronavirus has impacted many peoples’ financial situations. That means their ability to handle their tax obligations has also been affected. Fortunately, the IRS has responded with resources that many Americans are eligible to use.
During recessions, government stimulus can help ease the economic burden passed down to individuals and small businesses. For the tax year of 2020, the IRS and Treasury Department have already finished dispersing their 1st and 2nd Economic Impact Payments. According to the IRS, this has covered most people eligible for the Recovery Rebate Credit.
If you’ve already received your full amount under the Economic Impact Payment, you won’t need to claim the Recovery Rebate Credit or include any information from it on your 2020 returns. But if you haven’t received your payments in full, you can still claim the Recovery Rebate Credit.
Even with the help of a government stimulus check, many individuals and families have still taken a hard financial hit. If you need further assistance meeting your IRS obligations, you should consider enlisting the help of tax relief professionals.
How to Perform a Tax Relief Check?
You can take advantage of government programs and initiatives to partially relieve yourself from your tax burdens. Your options may include universal relief options, stimulus programs, and other initiatives aimed at a part of the population.
To find out how much money you can receive from the government based on paid and reported taxes, you need a tax relief check. With the recent Coronavirus stimulus, you can find out how much money you’ll receive. If you haven’t filed your taxes yet, it’s a good time to check how much you could receive.
There are a few factors that go into your tax relief total. First, your marital status will affect your benefits. You can file as married, single, or as head of your household.
Next, your adjusted gross income will be considered. Your adjusted gross income is the amount you declared on your last tax filing.
Lastly, the number of dependents under your care will also be considered. Dependents include dependent children and other relatives that meet the IRS’s qualifications for a dependent.
Calculate On Your Own
You can fill in most of these factors on your own. However, there are a few things beyond the basics which you could overlook. Your income and expenses affect the amount you will pay to or receive from the IRS every year.
If you’re unsure of whether you’ve filed your taxes accurately, tax relief companies can help.
Tax Relief Companies
Tax relief companies offer tax relief services so you don’t have to worry about navigating your relief options. They will look over your financial history before representing you to the IRS.
They understand your qualifications and do what they can to use all the relief available to you. They won’t be able to make magic happen, but they will certainly find anything you missed and ensure the IRS provides the deductions and Economic Impact Payments that you’re entitled to.
When possible, they will also try to reach a tax compromise. Tax relief is a complicated topic. There are always little considerations that you can gloss over.
That’s why going to the right tax relief company is such a game-changer. If you want to minimize what you end up paying in taxes, tax relief companies will know how you can.
2021 Economic Impact Payment
The IRS is receiving the provisions of the American Rescue Plan Act of 2021, which was signed on March 11th. However, you can check to make sure you got what you’re entitled to from the first 2 payments.
You cannot receive new payments right now, but you may be able to claim the 2020 Recovery Rebate Credit. To do so, you must file a 2020 tax return, even if you are not required to file one. The Recovery Rebate Credit is for anyone who received less than the full amount they were eligible for.
Could Tax Relief Affect Your Credit Score?
Technically, going through a tax relief process could affect your credit score. But it will only have an effect if your tax relief company digs too deep.
You shouldn’t have to worry about tax relief affecting your credit score. All the best tax relief companies only perform soft pulls on your credit score.
A soft inquiry is also known as a “soft credit check” or “soft pull”. One of these inquiries may occur without your permission, even if you’re not applying for credit.
Soft inquiries are normally used to screen credit applicants for preapproval. The good thing about soft checks is they do not affect your credit score. That’s because they are meant for informational purposes and aren’t considered part of a formal application.
When you’re receiving tax relief services, you don’t want to sacrifice points on your credit score. Fortunately, all the reputable tax relief companies will only perform a soft inquiry. While soft inquiries don’t require your permission, they aren’t nearly as invasive as hard inquiries. Soft inquiries may still show up on your credit report, but never as a negative. Of course, this means you won’t lose any points as a result of them either.
A hard inquiry, or a “hard pull” is a check on your credit history that requires your permission. You can automatically trigger a hard inquiry when you apply for things like new credit cards or a mortgage. However, you shouldn’t normally go through a hard inquiry if you are only going through a pre-qualification process.
Each hard inquiry is far more consequential than a soft inquiry. When you permit a hard inquiry, the inquiry becomes a part of your credit history. Anyone who makes a soft or hard pull on your credit will see your hard inquiries on your record.
As a part of your credit history, hard inquiries are decidedly negative. They won’t be completely disastrous, but each hard inquiry will be a hit to your credit score. Too many hard inquiries will add up and have a more noticeable impact on your credit score.
Normally, hard inquiries’ effects on your credit score are temporary. But with many FICO models, more than one hard inquiry in a 45-day period will be considered “rate shopping”, which will lower your score.
||Soft Credit Pull
||Hard Credit Pull
||A company or lender checking your credit report as part of a routine background check
||A company or lender determining whether or not to provide credit based on your creditworthiness
||-Prequalified credit card offers
-Tax relief check
-Auto loan applications
-Apartment rental applications
|Effect on Credit Score
||Might lower your score up to 5 points