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
  1028 Hits

Search Blogs Module

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