Joseph Griffin
CEO, TrueNorth Wealth
In response to a wave of volatility in financial markets, and drastic changes in employment for many Americans in the last forty days, Congress and the House have passed a $2 trillion package designed to give a jolt to the economy. Here’s how that package will affect your families, your portfolio, and your small business.
Tax Filing Deadline
The tax filing and IRA contribution deadlines were officially moved to July 15, 2020, giving you and your business a little more time to file your taxes or contribute to an IRA. If you haven’t yet made an IRA contribution, now is the time to do that.
Family
According to The Wall Street Journal, The New York Times, and USA Today, the plan would pay single Americans $1,200, married couples $2,400, and parents $500 for each child under age seventeen. Payments would decrease gradually for individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not qualify. Those thresholds are doubled for couples. Families with an income of $198,000 and individuals with incomes of more than $99,000 would receive nothing. If you have already filed, the IRS will use your tax return from 2019 to determine your qualification; otherwise, the IRS will use your 2018 return. See https://www.wsj.com/articles/everything-you-need-to-know-about-the-payments-from-the-government-11585229988 for complete information on the payments.
The bill also includes an automatic six-month suspension of student loan payments. See https://www.forbes.com/sites/advisor/2020/03/26/student-loan-forbearance-in-the-coronavirus-covid-19-stimulus-what-you-need-to-know/#30166edc2039 for complete information about the student loan forbearance.
See https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html for general questions and answers about the stimulus package.
Retirement Accounts
According to CNBC, the most recent version of the stimulus package has also altered some regulations for retirement accounts. For example:
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This year, you’ll be able to take a coronavirus-related distribution of up to $100,000 from your retirement plan or IRA without the 10 percent early withdrawal penalty.
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The bill also relaxes the rules around retirement-plan loans, allowing you to borrow up to $100,000 from your 401(k). That’s double the amount you can normally borrow.
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Retirees who would normally take required minimum distributions from their retirement savings can waive them for 2020.
Big Business Help
The bill also includes provisions for loans for large businesses hit hard by the outbreak. This includes loans and grants for airlines, cruise ship industries, and large business entities like Boeing. Since many mutual funds and individual investment portfolios are made up of stocks in companies like these, this is overall good news for investors. See https://www.washingtonpost.com/business/2020/03/26/senate-stimulus-bill-coronavirus-2-trillion-list-what-is-in-it/ for information on how the stimulus package impacts big business.
Small Business Help
According to The Washington Post and Kevin Kuhlman, legislative director for the National Federation of Independent Businesses, the stimulus package includes emergency aid, loans, and grants for small businesses for things like keeping workers employed, paying rent, and meeting other business expenses. The goal is to make sure businesses stay viable, workers stay employed, and the economy grows. See https://www.washingtonpost.com/business/2020/03/26/senate-stimulus-bill-coronavirus-2-trillion-list-what-is-in-it/ for the article in the Washington Post and https://www.c-span.org/video/?470602-5/washington-journal-kevin-kuhlman-discusses-coronavirus-impact-small-businesses&playEvent for the video interview with Kevin Kuhlman.
Today is the best time for a financial check-up. TrueNorth Wealth can assess your specific situation and make needed recommendations. Call us today at 801-316-8175 to schedule a no-cost webex consultation or check out our website.
