It is our deepest wish that all of you are staying physically safe. We are also here to do everything possible to keep you FINANCIALLY safe as well. To assist we have attached information of about the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These topics are complex, so Julie has her top ten list:
- The rebates being issued are determined by income. If your 2018 income was lower than your 2019 income and you have not filed yet it may work to your advantage to postpone filing your return. The contrary is true if your income fell in 2019. The income limits for receiving the full rebate are $75,000 for single filers and $150,000 for married filers with a phase out for income above those amounts. If 2019 has not been submitted, the 2018 tax return will be used to determine eligibility. I recommend you prepare 2019 now but hold off on filing if it works in your favor. Take advantage of your Step II planning meeting to review your own unique situation and have your 2019 return prepared now so you can make this determination.
- Self-employed individuals with a drop in business may be able to receive unemployment benefits. These benefits have been extended for 39 weeks. If you file a Schedule C or own any other type of small business, you may now receive help never before available to you. We now have an in-house consultant that provides assistance as part of our CARES Act consulting program if you need support.
- If your retirement account has losses and you do not need the income you are not required to take the required minimum distribution (RMD) in 2020. This is a chance to let your funds recover without withdrawals. We can talk about this on an individual basis during your Step II planning meeting as well.
- If you have rental properties, it is possible that your tenants will not pay on time and there is hope on your end. Many mortgage companies are allowing payments to be suspended, in the case of federally backed mortgages, for up to 12 months. Call your lender to discuss terms and conditions. Foreclosures and evictions are also currently suspended for up to 60 days so this may give both the tenant and landlord needed relief. Late fees are not assessed during the forbearance period, and this will not work against your credit rating if handled properly.
- Federal student loans forbearances are available for up to 60 days and longer under some scenarios, but you need to contact your lender. There will be no interest accessed during the suspension period.
- The SBA is currently out of funding for small business loans, but legislatures are working on additional funds. Our in-house team is available to assist in this process should more funds become available.
- There is greater access to retirement funds to float taxpayers during this crisis. Taxpayers under 59 ½ will be exempt from the 10% early withdrawal penalty on hardship withdrawals of up to $100,000 and the income tax can be paid over three years. This amount can also be replaced back into the account within three years to avoid taxation.
- The state of Pennsylvania and our local tax collectors at Berkheimer and Keystone are following the federal tax date and extending filing and payments until July 15th. We are encouraging preparation now to receive those much-needed refunds or to develop your filing strategy for the best result in light of all of these changes. The deadline for estimated tax payments for the first two quarters of 2020 has been extended to July 15th as well.
- Self employed individuals can carryback net operating losses. We can amend your returns and offset prior income to generate refunds. Take action now if this applies to you.
- If you like a sale, you might want to consider doing some shopping. Staying committed to regular contributions to your retirement plans may pay off significantly as the market begins to recover. My planning team has several strategies in place to participate in market recoveries with limits on further losses. We are here for discussion based on your own personal situation.
- Economic Impact Payments (“stimulus checks”) started to be deposited into people’s accounts on April 14, 2020. If you were not required to file taxes in 2018 or 2019, you can still give the IRS your information to receive your check. If you have not yet received your $1,200 stimulus payment and don’t want to have to wait to get a check in the mail, you have until Wednesday (5/13/20) at 12pm to submit your direct deposit information on the IRS website. Visit https://www.irs.gov/coronavirus/economic-impact-payments for more information.
Additional Phoenix Tax Consultants resources:
Expedited tax preparation for shelter in place via DROP OFF, VIRTUAL, or MAIL.
Your Step II half hour complimentary personalized planning meeting. This offers a review of your tax return, suggestions about how to maximize your outcome in light of the new legislation, and a chance, if desired, to discuss your other planning needs including required minimum and recovery strategies for your savings and retirement accounts.
Our CARES Act Consulting Team: Assistance in applying for unemployment, looking at strategies to improve short term cash flow with forbearances, and other aid navigating loan applications for small businesses.
Think of those that may need us now and if you refer a friend or family member you will receive WAWA gift cards.
If you have any questions or concerns, please contact us at (610) 933-3507 or email email@example.com.