By Aman Jain. Originally published at ValueWalk.
Now that stimulus talks are back on, there are hopes of getting another round of stimulus checks. If Congress approves coronavirus stimulus checks, then the most important thing that will determine the amount you get is your AGI (adjusted gross income). Thus, it is important for you to know what AGI is and how it is calculated.
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What is AGI and how to calculate it
The AGI is a part of your income that is calculated from your total income to ascertain the tax you owe to the government. Your gross income includes not just the salary you get, but also other things you receive, such as capital gains, interest income, royalties, rent, dividends and more.
To come up with the adjusted gross income, you need to subtract allowable deductions from the gross income. These deductions could be student loan interest, retirement contributions, alimony and more. You have to report your AGI on the IRS tax form 1040.
This AGI is what the IRS used to calculate your stimulus check amount under the CARES Act. The agency will likely use the AGI to calculate the amount for the next coronavirus stimulus check, if Congress passes it.
To know your AGI, you can view your 2019 federal tax return. The AGI will be on line 8b of your 2019 1040 federal tax form. In case you didn’t file your 2019 taxes, you can check your AGI from your 2018 federal tax return. It will be on line 7 of your 2018 1040 federal tax form.
How does AGI determine coronavirus stimulus checks?
If the second relief package follows the same guidelines as the first one, then the amount you get will depend on your AGI, filing status (single or joint) and the number of dependents. If the guidelines for the second coronavirus stimulus checks are also the same as the CARES Act, then eligible single fillers with an AGI of less than $75,000 would get a stimulus check of the full amount, i.e. $1,200.
The amount of your stimulus check will lower as your AGI increases over $75,000. Those with AGI of $99,000 or above won’t be eligible for the stimulus checks, provided rules stay the same as last time.
Those who file as head of household, would get the stimulus check of $1,200 if their AGI is $112,500 or less. However, those with AGI of $146,500 or more won’t be eligible for the payment.
If you file jointly with a spouse and have a joint income of less than $150,000, you will get a stimulus check of $2,400. In case your joint income exceeds $198,000, you won’t be eligible for the payment.
Along with the stimulus checks, you may get additional money if you have dependents. The CARES Act gave $500 per child (below 17 years). The Heroes Act, however, proposes giving $1,200 per dependent, with a maximum of three.
The post What is AGI and why is it crucial for coronavirus stimulus checks? appeared first on ValueWalk.
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