Under the CARES Act, individuals impacted by coronavirus can access up to $100,000 from their 401(k)s and IRAs with fewer consequences than usual. But is it the right decision? Typically, the penalty for withdrawing from a 401(k) before the age of 59½ is 10% of the distribution, plus an automatic withholding of at least 20%…
I just want to update you during these unprecedented times as to the changes that are affecting each and every one of us.
First, I want to let you know that, as an essential business, our office remains open to prepare your tax returns and answer questions you may have. In an effort to ensure safety, the number of staff in the office at any one time will be limited. If we have not yet prepared your return, we would like you to mail in your tax information or drop it off through the mail slot in the front door. If we have your email address, we can also send you a link to securely upload the necessary documents.
For those who are collecting unemployment, please have 10% withheld if at all possible.
For those receiving SBA loans, be sure to track EVERY penny spent. You WILL have to account for all the funds that are dispersed.
There are many changes you must become aware of and there will be many more to come. In my forty plus years, I’ve never seen so many tax law changes in such a short period of time.
- The filing deadline for individual tax return and 1st quarter estimated tax payments has been extended to July 15, 2020
- Required Minimum Distributions from your IRAs and 401(k)s are not required this year. However, it may be strategic to take an amount that keeps you in a favorable tax position. RMDs from Defined Benefit Plans are still required
- Rules have been relaxed for borrowing or withdrawing funds from your IRAs and 401(k)s
- Charitable contributions up to $300 (as of now) will be deductible as an adjustment to income
I am in the process of updating my website so that I can communicate via email the changes that will affect you as they become implemented. Although we have most of your email addresses, to add or update your email, please contact Alysa at email@example.com. You can find the website at www.tompaolo.com. The client password is tompaolo.
Finally, my two cents, as a lung transplant recipient, I consider myself an expert at being vigilant and laying low for long periods of time. I promise you that when this ends, and it will at some point, you will have a renewed outlook on many things. Keep fit, think as positive as possible, and keep in touch with your friends and family.
P.S. Some wise-guy said that my height makes it easy for me to lay low!!!