News is coming fast and furious these days—so much so, it’s difficult to remember the morning news in the evening (much less what happened yesterday or last week). Day-to-day planning has taken priority over long-term financial planning, and it’s getting easier to lose sight of the forest through the trees.
With that in mind, I thought it would be worthwhile to put a few things in one place, so the information doesn’t get lost in the shuffle.
Here are ten recent changes that may affect your financial planning:
Stimulus Checks: The checks will be worth up to $1,200 for each taxpayer ($2,400 for married couples who file a joint return), in addition $500 will be provided for each qualifying child 16 or younger. However, the check amount will be gradually reduced for single filers with AGI above $75,000, joint filers above $150,000, and head-of-household above $112,500.
10% Penalty: The penalty on retirement plan withdrawals before age 59.5 has been waived if you are affected by the virus. Taxes are still due but that can be paid over 3 years. You also have 3 years to recontribute the money and it will be treated as a tax-free rollover.
Retirement plan loans: The max loan amount has doubled from $50,000 to $100,000 if you are infected by the virus, caring for someone, or experiencing financial hardship due to it.
RMD’s: No longer required to be taken in 2020
Tax filing deadline: Delayed to July 15th
Federal student loans: No payments due until after 9/30, and all interest is waived during that time.
Interest rates: Rates have fallen close to all-time lows; the next few months would be a good time to review your current liabilities and to research your refinance options.
Unemployment benefits: Eligibility and filing requirements have eased and the benefit amounts have increased
Sick Leave: Employers with 500 employees or less are required to offer 80 hours of paid sick leave to anyone affected by the virus. There is also a tax credit available for self-employed individuals.
Charitable contributions: A $300 dollar above the line deductions is available if you file using the standard deduction this year. If you itemize the 60% of AGI limit that normally applies to cash contributions is waived allowing for a larger deduction.
We don’t know how long the shut-downs and subsequent market volatility will last—but it’s important to remind ourselves that it will not last forever. If you have any questions about how any of the above information may affect your plan, be sure to discuss it with your advisor. If you have any questions—we’re around to talk.