Well, the Federal Government loves you, or so they are claiming in the C.A.R.E.S. Act which of course stands for the Coronavirus Aid, Relief and Economic Security Act. I would have rather called it D.I.S.T.A.N.C.E which of course would stand for the Direct Interjection of Stimulus To Americans Needing Care in Emergency.
Here are three broad highlights, with the understanding that things can change rapidly, and new versions may be released over the coming weeks to months:
1) A recovery rebate of $1,200 per adult ($2,400 filing joint) and $500 per child under age of 17. If you are a single filer, your rebate phases out over $75,000 of income and for a joint filer over $150,000 of income. There is a simple, yet helpful, calculator here if you are unsure of your potential refund:
Forbes Stimulus Check Calculator
These amounts should start being received via direct deposit in the next two to three weeks.
2) For retirees over the age of 72, you DO NOT have to take your required minimum distribution for the tax year 2020. Traditionally, you are not allowed to roll your RMD over to a Roth IRA, but since this year there is no RMD, a planning opportunity has emerged that might be worth exploring. For some, you still take your distribution, pay the tax as you would any other year, and then roll that amount to a Roth IRA. More to come on that front!
3) Payments of principal and interest on certain federal student loans are suspended. (ask your loan service provider if you qualify)
This relief package is a step in the right direction and may be the first of a couple, or a few, more to come. I read that during times of stress, decision making is jeopardized and our vision of the future becomes extremely focused on the short term. With that in mind, there are long term planning issues that deserve to take center stage in the coming months. These issues range from income taxes, to inflation, to health care costs. While we are trapped worrying about the short term, I want to bend our perspective to help us better prepare for the long term, since there will be a long term!
Be Safe. Be Healthy.
Happy Friday!
To see me sing a little and hear more about the tax rebate check out out YouTube video: