In observance of 4th of July, our office will be closed Friday, July 3rd.
We will resume normal business hours on Monday, July 6th.
Wishing all of our clients a happy and safe 4th of July weekend!
The CARES Act suspended interest and payments for most student loans until September 30, 2020. This means that you will not be charged any interest or have to make your payments during that time. If you are fortunate enough to be able to continue to be able to make your student loan payments, you may want to do so. Any payments that you make now will be applied directly to the principal. If you had your student loan payments set up on autopay, these have all been suspended and no payments will be processed until September 30, 2020. You will need to pay your student loan payments directly each month.
The recently passed HEROES Act extends the suspension of interest and payments until September 30, 2021. It also expands the break to all federal student loans. In addition, the HEROES Act will cancel out $10,000 of student loan debt for federal and private loans. Though the HEROES Act has passed it still needs to go through the senate for negotiations. Expect the final legislation sometime in the fall.
Mortgage rates hit historic lows today. I am in the process of refinancing my own home mortgage and thought I'd share how I go about shopping for rates. http://www.mortgagenewsdaily.com/ is the website I check to get an idea of what the lowest zero cost rates are in the marketplace. Mortgage News Daily publishes a daily mortgage rate survey collected from various loan orginators. Today's survey shows 3.04% for 30 year, 2.67% for 15 year, 2.75% for FHA 30 year, and 4.18% for Jumbo 30 year. Then I look at various websites online to see who is advertising rates at or below what Mortgage News Daily survey shows. I find Bank Rate, Zillow, Nerd Wallet, & Mortgage News Daily are the best website to comparision shop. I'll submit about 3 requests online to get quotes. I usually pick the loan orginator that is the cheapest and most responsive. Please feel free to reach out to me if you want the contact information of the loan agent I'm using.
After your taxes are complete it is always a good idea to go through your records and organize what you should keep and what you can get rid of.
How long to keep records is a combination of judgment and state and federal statutes of limitations. Since federal tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported income, it’s wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records. Many records can easily be kept on-line now and downloaded and to your computer, external drive or cloud account.
Records Retention Guideline # 1: Some items should never be thrown out
This is because these items would be hard to replace and you may be asked to provide them later in life. I suggest storing these “permanent records” in an expanding file or wallet – preferably in a fire safe box:
Records Retention Guideline # 2: Everything Else
You should retain these records according to the following guidelines:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. This is a $2 trillion emergency fiscal stimulus package to help reduce the economic damage caused by the virus and “stay at home” policies. The following is a summary of the main provisions for individuals.
Recovery Rebates:
Retirement Accounts:
Unemployment:
There are also several small business and self-employed benefits provided by the CARES Act. We recommend that you discuss with your accountant or business manager the different options and if you should apply and take advantage of them.
Hope you are staying safe, sane, and healthy!
In an effort to help you understand the ever-changing tax deadlines, we went to the source (IRS, CA FTB) to get the details. The following is a summary of the new deadlines that we thought you should know about:
The IRS extended the tax filing deadlines for your 2019 taxes from April 15 to July 15, 2020. The IRS also clarified other details that we thought were important:
California Property tax is still due on April 10, 2020. This is paid to the county that you live in. The state of California is encouraging the counties to waive penalties for late payments. The county tax collectors have the authority to waive penalties resulting from a late payment due to “reasonable cause and circumstances beyond the taxpayer’s control. Relief under this rule is discretionary and will be evaluated on a case-by-case basis. Taxpayers unable to pay by April 10 will need to request relief and demonstrate to the tax collector that the inability to make a timely payment was due to the COVID-19 pandemic. For example, the Los Angeles County Tax Collector has set up a special team to process penalty relief requests, and has advised impacted taxpayers to submit a request for penalty relief online, beginning on April 11.
In Orange County, Shari Freidenrich, the county treasurer-tax collector released the following statement “For taxpayers that do not make payment of property taxes due to COVID-19 by April 10, we expect them to submit a Penalty Cancellation Request Form and documentation to support the cancellation of penalties as allowed in limited circumstances under current state law.”
As soon as the stimulus bill is finally approved, we will post a summary of the final package. This will include the payroll tax, unemployment, small business loans and stimulus check guidelines.
Stay safe, sane and healthy!
Volatility has surged in financial markets, as investors react to the potential economic and earnings fallout from the rapid global spread of the coronavirus. Given what has been historic volatility, we wanted to provide you with a market update that helps to separate fact from fiction and put this market turmoil in the appropriate context.
Over the past month, equity markets have dropped sharply as new cases of the coronavirus burgeon around the world. That is the primary, but not the only, reason for the recent declines. As of this writing, there are just over 200,000 cases of coronavirus worldwide, 100,000 of which are still “active cases.” In the United States, there are approximately 7,000 coronavirus cases.
On March 9, U.S. markets and the economy were dealt another surprise blow, when Saudi Arabia effectively abandoned OPEC-mandated production levels and began to dramatically discount oil prices and increase oil production. The move was in direct response to Russia not agreeing to comply with proposed “OPEC+” production cuts, and essentially, an oil price war broke out between the two countries (Saudi Arabia and Russia) that saw oil futures collapse nearly 25% in a single day.
In the past, low oil and gasoline prices would have been a positive for the U.S. economy, but a lot has changed in the past few years. The U.S. is now the largest oil producer in the world, and the U.S. energy industry is valued at more than $340 billion. With oil prices so low, many U.S. energy firms will have to reduce production and payroll, which will hit both earnings and the economy. This oil price war directly contributed to the markets taking another leg lower during the week ended March 13.
Finally, in the days leading up to this writing (March 18), stocks have dropped even further in response to the extreme social distancing measures being implemented across the country. These measures, which include the cancellation of virtually every major sports season, travel bans from Europe and parts of Asia, the closing of bars and restaurants, the mass instituting of work-from-home practices, school closures, and curfews, are intended to stop the spread of the coronavirus. Yet they also will have a significant and negative economic impact on the travel, leisure, beverage and restaurant industries to name just a few of the segments that will be hardest hit. The cumulative impact of these measures materially increases the chances of a recession in 2020, which is something virtually no one thought possible just six weeks ago.
Positively, the U.S. government is acting to support the economy and that support has ramped up dramatically in the last few weeks. There are two economic supports bills that are currently making their way through Congress and a third has already become law. Each is designed to help a portion of our population bridge the economic gap until the spread of the virus peaks and begins to decline.
The Federal Reserve, meanwhile, has cut interest rates to zero percent to help the economy. The Fed also has implemented several important measures to provide short-term cash for corporations and to ensure there’s plenty of capital for the broader banking system. Those measures are working to help keep the banking and financial systems functioning in an orderly manner.
Yet despite this support, which is an important economic positive, the world understandably looks very scary to many people right now.
Across the nation, and the world, roads are mostly empty, office buildings are vacant, schools are closed and normal life as we have known it has largely shut down. Yet it’s important to remember that this historic market volatility, along with these societal disruptions, are temporary. At some point, the spread of the virus will peak and begin to recede.
Similarly, these social distancing measures, while unsettling, are also only temporary. Our children will once again return to school and adults will return to work. Air travel will resume, cruise ships will set sail again, and the U.S. economy, which is by far the most flexible and resilient in the world, will recover.
Over the past several weeks, we’ve witnessed near panic, both in regular society as well as financial markets. But as we all know, the worst thing to do during a panic is to panic. That’s because panic leads to hasty, short-term decisions that jeopardize your long-term best interests.
Meanwhile, shares of some of the most-profitable, well-run companies in the world are now trading at substantial discounts to levels of just a month ago, and history has shown us that over the longer term, these tumultuous episodes can create fantastic investment opportunities, and some of the most ideal buying conditions the market can offer.
As has been said many times over the past few weeks, we are all in this together. That’s why we remain committed to helping you navigate this difficult environment—and always maintain the primary goal of ensuring you achieve your long-term financial objectives.
The coronavirus has returned volatility to the markets. Last week the major stock indices were either up or down 2-3% daily. Price declines in oil over the weekend rattled the markets on Monday with a historic 2,000 point drop on the Dow but we recovered more than half those losses on Tuesday. We certainly empathize with our clients’ natural worry over this . As your advisors, our job is to remain objective and not panic in regards to making portfolio decisions.
At this time the technical data is pointing to this being a correction as the strength of current economic data shows no sign of a recessionary bear market. There will be some economic fallout from the virus, but we must keep in mind that our economy is robust and diverse. Some sectors were hit very hard by the virus such as travel while other areas are benefiting due to the stock piling of consumer goods. Over the coming days and weeks we will be monitoring the economic data very closely and we will make changes to the portfolio if risks increase or buying opportunities emerge.
We don’t want to add to the mass hysteria that is surrounding the COVID-19 virus and we’re not going to tell you to run to your local Costco to stock pile large amounts of toilet paper and water, but we are concerned for our clients and feel it was important to share some tips that were passed along to us by a pathologist. While not fool proof, taking these precautions may help you avoid not only the Coronavirus but the flu as well!
1) NO HANDSHAKING! Use a fist bump, slight bow, elbow bump, etc.
2) Use ONLY your knuckle to touch light switches. elevator buttons, etc.. Lift the gasoline dispenser with a paper towel or use a disposable glove.
3) Open doors with your closed fist or hip - do not grasp the handle with your hand, unless there is no other way to open the door. Especially important on bathroom and post office/commercial doors.
4) Use disinfectant wipes at the stores when they are available, including wiping the handle and child seat in grocery carts.
5) Wash your hands with soap for 10-20 seconds and/or use a greater than 60% alcohol-based hand sanitizer whenever you return home from ANY activity that involves locations where other people have been.
6) Keep a bottle of sanitizer available at each of your home's entrances. AND in your car for use after getting gas or touching other contaminated objects when you can't immediately wash your hands.
7) If possible, cough or sneeze into a disposable tissue and discard. Use your elbow only if you have to. The clothing on your elbow will contain infectious virus that can be passed on for up to a week or more!
What I have stocked in preparation for the pandemic spread to the US:
1) Latex or nitrile latex disposable gloves for use when going shopping, using the gasoline pump, and all other outside activity when you come in contact with contaminated areas.
Note: This virus is spread in large droplets by coughing and sneezing. This means that the air will not infect you! BUT all the surfaces where these droplets land are infectious for about a week on average - everything that is associated with infected people will be contaminated and potentially infectious. The virus is on surfaces and you will not be infected unless your unprotected face is directly coughed or sneezed upon. This virus only has cell receptors for lung cells (it only infects your lungs). The only way for the virus to infect you is through your nose or mouth via your hands or an infected cough or sneeze onto or into your nose or mouth.
2) Stock up now with disposable surgical masks and use them to prevent you from touching your nose and/or mouth (We touch our nose/mouth 90X/day without knowing it!). This is the only way this virus can infect you - it is lung-specific. The mask will not prevent the virus in a direct sneeze from getting into your nose or mouth - it is only to keep you from touching your nose or mouth.
3) Stock up now with hand sanitizers and latex/nitrile gloves (get the appropriate sizes for your family). The hand sanitizers must be alcohol-based and greater than 60% alcohol to be effective.
4) Stock up now with zinc lozenges. These lozenges have been proven to be effective in blocking coronavirus (and most other viruses) from multiplying in your throat and nasopharynx. Use as directed several times each day when you begin to feel ANY "cold-like" symptoms beginning. It is best to lie down and let the lozenge dissolve in the back of your throat and nasopharynx. Cold-Eeze lozenges is one brand available, but there are other brands available.
There will be NO drugs or vaccines available this year to protect us or limit the infection within us. Only symptomatic support is available.
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