The COVID-19 stimulus checks Americans received over the last couple of months were unprecedented in the country's history, so it's not surprising that they confused some recipients. Even now, when most eligible people have already received their checks, there are still some misconceptions floating around.

One of the most common is that you'll have to pay back your stimulus check funds next tax season. According to a recent TD Ameritrade survey, approximately 32% of Americans believe this -- but it's not true. That said, your tax bill could look different this year for other reasons. It's important to understand why so you can start preparing now.

A woman sitting on park bench with a puzzled facial expression.

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Stimulus checks and your taxes

You don't have to pay your stimulus check back to the government, and it will not reduce your tax refund for the year. The stimulus check is a new federal tax credit available in 2020 that the government has decided to give people now to help them through the pandemic and the recession. Tax credits provide a dollar-for-dollar reduction of your tax liability for the year, resulting in either a smaller tax bill or a larger tax refund. 

People who have already received stimulus checks will still get any normal tax refund to which they're entitled when they file their 2020 taxes. Those who are eligible for stimulus checks but do not receive them before filing their 2020 taxes will end up with a larger refund instead.

That's the good news. The bad news is that unemployment and early retirement withdrawals could affect your 2020 tax bill -- and not for the better.

Unemployment benefits and your taxes

All unemployment benefits you've received this year are taxable, just like the income you earn from your normal job. If you're earning less on unemployment than you were working, you could be looking at a smaller tax bill this year, which means you may get a larger tax refund.

On the other hand, if you are earning more on unemployment than you made while working, you'll have a higher tax bill this year. How much higher depends on how much more you're making and which tax bracket you fall into. If you're unlucky enough to end up in a higher tax bracket, you'll pay a larger percentage of your income to the government. But that doesn't necessarily mean you'll owe money. You could just end up with a smaller refund.

If you're concerned about owing money at tax time, you should try to set aside some now in a designated savings account so you don't accidentally spend it. Alternatively, you could put it in a tax-deferred retirement account. Contributions to these retirement accounts reduce your taxable income for the year and can help keep you in a lower tax bracket. If you're not able to do this, you can always set up a payment plan with the IRS when the time comes to file your taxes.

Retirement account withdrawals and your taxes

The CARES Act, which created the stimulus checks, also waived the early withdrawal penalties on pandemic-related retirement account distributions. But if the money comes from a tax-deferred account, like a 401(k) or traditional IRA, you will still owe taxes on your withdrawals. Again, how much you'll owe in taxes depends on how much you withdrew and which tax bracket you fall into.

Normally, you must pay taxes on all of your retirement account withdrawals in the year you make them, but the government has changed these rules temporarily. You now have up to three years to pay taxes on the money you withdrew, though you can still pay it all on your 2020 tax bill if you prefer. But spreading the tax liability out evenly over three years could help keep you in a lower tax bracket in each of those years, so you keep a larger portion of your earnings.

The new laws also enable you to pay back any money you withdrew for a pandemic-related distribution within three years. These repayments do not count toward your annual retirement account contribution limit. If you are able to put some or all of your distributions back, you can file an amended tax return for the years you paid taxes on the distribution to recoup those funds.

Your stimulus check won't adversely affect your taxes, but if you've received unemployment benefits or taken a retirement account withdrawal this year, your tax bill may look a little different in 2020. Preparing for this now by setting aside money to pay the tax bill will streamline the process.