As the coronavirus (COVID-19) continues to affect local communities and global economies, you may have concerns about your financial well-being. There are several recently enacted tax changes and new or expanded benefits that might be helpful to you.
Income tax provisions:
The IRS has provided broad relief and extended the filing and payment deadlines to July 15, 2020. However, we continue to work on filing returns as soon as possible.
Estimated tax payments due on or after April 1, 2020 and before July 15, 2020 can wait until July 15 to make the payment without penalty.
Payments to individuals of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child are expected to be delivered around mid-April.
The recovery rebate begins to phase out for taxpayers with adjusted gross income (AGI) above $150,000 for joint filers, $112,500 for heads of households and $75,000 for other individuals. If you’d like to estimate the amount you’ll receive, visit our CARES Act stimulus calculator at http://aicpa.org/covid19tax.
The payment is not taxable.
Through the end of the year, individuals who are under 59 ½ years old can take up to $100,000 in coronavirus-related distributions from retirement plans without the usual 10% penalty for early distributions. The distributions may be repaid within three years and any resulting income inclusion can be taken over three years.
If you were over 70 ½ at Dec. 31, 2019 you won’t have to take required minimum distributions (RMD) in 2020. If your retirement assets have taken a hit, not having to take an RMD may allow those assets to recover some value before you liquidate them.
If you have a federally-held student loan, your payments will be suspended through Sept. 30, 2020 and interest won’t accrue during this period. Note that this relief does not apply to private student loans.
Other benefits are available including expanded unemployment, emergency paid sick and family leave benefits (with some limitations and exceptions). Unemployment benefits are extended to self-employed and part-time workers.
Protecting our clients and staff
There are limitations on our physical work environment due to COVID-19; however, we’re working to minimize disruptions and impacts to you so that we can still offer the same level of superior service and support you have come to expect from our team.
We have implemented procedures to protect the health and safety of our staff, clients and community including: restricting/limiting access to our office(s), implementing continuity plans, reducing travel, providing health education and guidelines to keep our staff well, providing remote working solutions, improving the utilization of the SmartVault client portal and adding virtual communication channels to stay connected.
We are still conducting client appointments via phone and web-based video meetings.