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
  426 Hits
426 Hits

Search Blogs Module

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