The CARES Act Has Changed 2020 RMD Rules

Written by Zachary Morris, CFP® on April 23, 2020.

Required Minimum Distributions are Temporarily Suspended

When President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27, he enacted the largest aid package in American history. One important impact is that Required Minimum Distributions (RMDs) for 2020 are, in essence, suspended. In this way, the federal government chose to sacrifice short-term tax revenue in order to provide immediate financial relief to retirees.

This change bears discussion, however, as there are many questions about what the CARES Act means for those who have already taken their 2020 RMDs, as well as any impact on taxes and inherited accounts.

Let’s begin with a review of the basic tenets of the RMD portion of this new law.

Financial Literacy Month, Coronavirus and Financial Resilience

Written by Zachary Morris, CFP® on April 16, 2020.

How to Focus on Your Finances in the Month of April

Beginning 16 years ago, April was declared Financial Literacy Month as part of a strategy to enhance and increase nationwide financial literacy. It was implemented with the hope that it would lead to increased government advocacy of financial literacy programs, as well as spark more interest in programming already offered through schools, non-profit organizations, and businesses.

The creation of a month-long focus on financial literacy was a pointed acknowledgment of its importance in helping Americans gain necessary financial knowledge – knowledge that proves integral during a time of crisis like we are facing now with the COVID-19 (coronavirus) pandemic.

Though prevention is always preferable over a cure, it’s never too late to learn more and change your financial behaviors. Doing so can help you become more resilient in the face of financial adversity during times of personal or worldwide crisis. So, here are three ways you can personally celebrate Financial Literacy Month this year:

CARES Act Signed into Law –Brings Relief to Millions of Americans

Written by Jeff Diamond on March 30, 2020.

This $2 trillion bill is meant to impact both individuals and businesses and contains significant tax-savings measures. It could affect prior tax years while also creating immediate cash-flow.

Impact on Individuals

Stimulus Checks

Perhaps the most impactful provision for American citizens is the CARES Act’s promise of cash payments of up to $1,200 per single individual and $2,400 for a married couple. Parents will also receive an additional $500 per qualifying child. Payments are phased-out for individuals with incomes greater than $75,000 and for married couples filing jointly with income greater than $150,000.

Provisions are such that payments will be based on 2018 tax returns, though, like the Affordable Care Act’s tax premium credit, there is a true-up related to the amount for which you are eligible on the 2020 tax return. Nonresident aliens, dependents and estates and trusts are not eligible for a stimulus check.

Tax News: IRS Announces Extended Deadline for 2019 Tax Returns

Written by Zachary Morris, CFP® on March 25, 2020.

As we continue to face uncertain times, the IRS has made a welcome announcement.

Treasury Secretary Steven Mnuchin has announced that the IRS has decided to extend the filing and payment deadline for 2019 tax returns, allowing taxpayers to defer until July 15. Mnuchin indicated this move will put $300 billion into the economy during a time of great economic concern over the consequences of the COVID-19 pandemic.

The payment deferment is subject to certain caps, however. Individuals may defer tax payments of up to $1 million, while corporations may defer up to $10 million. The limits were purposefully selected to benefit small businesses that report income through S corporations, partnerships or other pass-through entities.

How to Remain Hopeful and Keep Perspective During the COVID-19 Outbreak

Written by Jeff Diamond on March 19, 2020.

The Coronavirus Pandemic is real and it is scary on many different levels. With news of the pandemic spreading and the recommendations on social distancing getting broader, it can be hard to feel certain or safe about anything.

As troubling as it is to watch the unprecedented market decline, we need to maintain our health and the health and safety of our family, friends, and neighbors as the number one priority. COVID-19 which emerged late in 2019 in China has spread rapidly worldwide since then and is a global pandemic. The measures taken by leaders around the globe have been strong leaving most children without a classroom to go to, many parents working from home or some without a job altogether and investors panicking about what is to come.

This disruption to daily life and to our psyches is substantial. The coming weeks could be difficult, but these measures are practical and prudent.

Coronavirus: What the Viral Epidemic Means for Investors

Written by Zachary Morris, CFP® on March 4, 2020.

Last week saw the worst week on Wall Street since 2008, as the Dow fell into correction likely due to the outbreak and spread of COVID-19, commonly called novel coronavirus. A market correction is a nerve-wracking event for investors, but the current uneasiness in the markets is no cause for panic.

Market Impact

While the spread of COVID-19 is atypical, market correction is not. In fact, it’s an entirely normal process, and not altogether unexpected after experiencing the longest-running bull market on record. There have been 22 market corrections since 1974, and they are aptly named because the market usually “corrects” itself and returns prices to their longer-term trends. While the coronavirus is likely to cause economic impact into at least the second quarter of 2020, historically, Wall Street’s reaction to these types of epidemics has been short-lived, including in the recent past.

The Cash Balance Plan: A Pension Plan for High Earners

Written by Zachary Morris, CFP® on February 10, 2020.

If you’re a business owner, physician or self-employed individual, you likely face higher taxes than the majority of Americans. However, there are strategies you can use to keep more of your hard-earned money by reducing your tax liability and increasing your asset protection. One of these strategies is through a particular type of Defined Benefit Plan called the Cash Balance Plan.

So, You’ve Inherited Money – Now What?

Written by Jeff Diamond on January 22, 2020.

If you’ve been lucky enough to inherit a large sum of money, you probably experienced a flurry of emotions, including excitement at the possibilities it opens up for you and your family. However, once the initial elation wears off, it’s common to feel a bit of trepidation and confusion about how to properly manage your new fortune, especially if you don’t consider yourself particularly savvy when it comes to money.

Luckily, you don’t have to be a finance expert to make your inheritance last. Read on for six simple tips to help you make the most of your newfound financial freedom.

Connor Jabs Promoted to Associate Wealth Advisor

Written by admin on January 20, 2020.

We are pleased to announce the next step in the career path for one of our team members. Please join us in congratulating Connor Jabs on his promotion to Associate Wealth Advisor. From day one, Connor exhibited an incredible commitment to client service and understanding of the Paces Ferry Wealth Advisors’ mission.

Required Minimum Distributions are Temporarily Suspended

How to Focus on Your Finances in the Month of April

Impact on Individuals

Stimulus Checks

Social Media and Viral Laughs are Important for Self-Care, Doctors Say

Market Impact