Submitted By: someone
Answered: June 20, 2021 11:51 pm

I’m living on Social Security disability payments. Do I need to file a return?

Even if your gross income is below the threshold that ordinarily requires you to file an income tax return, the IRS is encouraging you to do so in order to receive your Economic Impact Payments (EIPs). Fortunately, there is a simplified return option in lieu of a 2020 return so you may receive EIP 3; only a few lines need to be completed. You can file on paper; write “Rev. Proc. 2021-24” at the top of the first page of the return. If you e-file, show $1 of adjusted gross income (even if it really is zero). Other details for the simplified return option may be found in Rev. Proc. 2021-24 at https://www.irs.gov/pub/irs-drop/rp-21-24.pdf.

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Tax Glossary

Installment sale

A sale of property that allows for tax deferment if at least one payment is received after the end of the tax year in which the sale occurs. The installment method does not apply to year-end sales of publicly traded securities. Dealers may not use the installment method. Investors with very large installment balances could face a special tax.

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