Asset Planning, Inc Blog

The latest from the team.

CARES Act Stimulus Summary

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:

  • The CARES Act provides for recovery rebate checks of up to $1,200 for individuals with adjusted gross income (“AGI”) up to $75,000 ($2,400 for joint filers with AGI up to $150,000) plus an additional $500 for each child under the age of 17 for US taxpayers through an advance refundable tax credit against 2020 income taxes. There is a phase out of the rebate, which causes a $50 reduction in the rebate for every $1,000 of AGI above these thresholds. For example, individuals with no children having an AGI of more than $99,000 and married couples with no children filing jointly having an AGI of more than $198,000 would be phased out completely and receive no recovery rebate check. The advanced payment of the recovery rebates will be based on the AGI reported on tax returns filed for 2019, and if no such tax return has been filed for 2019, the AGI reported on the 2018 filed tax returns will be used.
    • The rebate check will be sent directly to the bank account on file with the IRS for your 2019 or 2018 tax return. If the account is closed or there is no account on-file then a check will be mailed.
    • You can receive the rebate if you are retired and receive social security or a pension as long as your AGI is within the limits listed above.

Retirement Accounts:

  • Required Minimum Distributions are waived in 2020 for all retirement type accounts (401K, 403B, 457, IRA and Beneficiary IRAs). If you already took part or all of the RMD you might have the option of returning them except for beneficiary IRA distributions.
    • We are waiting to hear more details on the charitable contributions that are paid with RMD funds and we will be in contact with those clients that make charitable contributions from their RMDs to let them know their options for 2020.
  • Individuals under age 59 ½, may take coronavirus-related distributions from qualified retirement plans (IRA, 401K) of up to $100,000 without the distributions being subject to the 10% early distribution tax. The distributions are still subject to federal income tax, but the tax owed can be spread over three years.
    • In order to get these favorable terms, you will have to prove that you were adversely affected by the coronavirus.

Unemployment:

  • Regular unemployment payments, which are about 55% of your normal pay are increased by $600 per week for a maximum of 4 months. The benefit period is also extended by 13 weeks. It is normally 26 weeks maximum in California, so it can now go to 39 weeks.

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!

Continue reading
  160 Hits
160 Hits

Search Blogs Module

Wait a minute, while we are rendering the calendar
Wells Fargo employees June 29 retirement accounts estate planning client portal estate planning direction Kraig Mathias tax returns CERTIFIED FINANCIAL PLANNER exam items driver license IRS deadline September 30 2020. portal April 18 2017. 2018 IRA contributions drive /usb credit freeze credit card company paperwork clutter records D premiums web address toilet paper vacation settlement options home coronavirus Supplemental Security Income family members Asset Planning spread Medicare Healthcare https :// Legal robocalls market turmoil Financial Planning Magazine estate cell phone service provider increase prescription eyeglasses tax deadline insurance policies interest 900 number Two-Step Verification breach privacy settings Victor Dergunov EEChecklist-Kits.pdf stockpilingchecklist.pdf 2017 TD Ameritrade National LINC Conference Orange County February 14 illiegal robocallers Puerto Rico emergency kit emergency folder Expired medications news coverage people medications retirement planning investment statements CFP ® official certification Joey Gonzales gap insurance DNA test kits credit cards birth certificates CA FTB documents FEMA website Coronavirus Aid Orange County Superior Court IRS July weekend health care services Facebook profile privacy notices September 8 FSA home break-ins pet donation drive Amazon relief efforts donation items stimulus package Brexit vote pet media accounts Open House Roth IRA July 3 rd non-prescripstion sunglasses Part B phone companies company life saver flash drive check lists assets contribution limit fun atmosphere spring cleaning pets health care costs 2017 Equifax breach fees scams 70 1/2. student loans Open Enrollment ice cream event money emergency kits donation counts California Lions Friends National Ice Cream month October 1 2020. holidays approach card reader self-help topics clients show support July 4 pet supplies Social Security Medicare question IRA accounts tax records bottom line disaster areas VOIP landline phones Treasury Department identity theft opt-out Auto insurance Mobile Banking Security Tips insurance policy https ://seekingalpha account numbers July 6 app earnings fallout president Trump car loans earthquake app Medicare Part B Ice Cream Social clone counterfeits Federal Trade Commission website hurricane Dorian retirement plans home mortgages business hours padlock wells Fargo vision screening credit monitoring service checklists memorial Day weekend September 9 years Fox News story interest rates house sitter parking spots trustee Economic Security Notary Public 4 pm -8pm cell phone carriers CARES Act tax filing deadlines COVID -19 virus operations manager cell phone provider text messages Independence Day information Facebook 20 year anniversary Flexible Spending Account markets Erin Nelsen blog post rescue organizations home emergency preparedness kits notary services clients ID card 23 andme 401K debt payments Medicare Advantage cell phones email notifications stock pile Labor Day TD Ameritrade policy ice cream team members 2017 IRA contributions Social Security Administration Medicare plan water … retirement spam phone paper records phone home security Affordable Care Act Wells Fargo customers summer cell phone carriers offer phishing sites borrowing money credit card fraud cell phone SIM swap scam April 15 offering insurance consumer spending partner /owner pet industry Part D premiums . “ skimmer ”. integral member Shred paperwork Medicare Part B premiums January 10 tax season home emergency kit asset Planning Retirement Contribution Limits tax deadlines executive order Kiplinger Letter jury duty fun facts trust credit score information phishing scams identity thieves April 11 Charles Schwab chip-enabled EMV cards banking