Covid Briefing #21

There is an old saying, “Ignorance is Bliss!”  My new saying during this Covid-19 era is “Ignorance is Super-Expensive!”  In my 30-year career, I have never seen more advisor ignorance and malpractice.  Keep this in consideration if this is the first you are hearing about this.

There have been MAJOR CHANGES in tax deadlines and proposed changes in tax, gifting, and estate planning rules, proposed on March 29^th by Bernie Sanders, which I will review below.  My “Elite 8” list of changes to be concerned about are:

1. The Federal CARES Act One Year Hiatus on Required Withdrawals from IRA’s and Most 401k’s is Over in 2021:  This means the RMD (required minimum distribution) must be taken in 2021.  The amount is based on the age of the account holder.  For example, a 72-year-old with an $100,000 IRA must withdraw $3,906 this year.  A 75-year-old is required to withdraw $4,367 this year. 
2. Obamacare Health Insurance Exchange Enrollment Date Extended Again: This means the health insurance open-enrollment period now is extended to Sunday, August 15^th for those individuals who want to enroll.
3. The Federal and New York State Income Tax Return Deadline was Extended: These 2 deadlines were extended from April 15th to Monday, May 17^th. 
4. Stimulus Payments Were Deemed Not Taxable: This is major news for Americans who have received one or more stimulus payments.  They are technically considered an advance on a tax credit known as The Recovery Rebate Credit.
5. What Happens if You Missed a Stimulus Payment? You can recover it through the Recovery Rebate Credit when filing your 2020 tax return.  It can be found on line 30 of Form 1040 or 1040-SR.  Consult with your CPA or tax advisor on this.
6. The PPP (Paycheck Protection Program) Application Deadline Extended: Eligible business owners may apply for needed funds through Memorial Day, Monday, May 31^st.  For questions regarding the PPP, email me at [email protected].  We can assist and connect you to banks who want to help at no cost for my Wave readers!
7. The CDC (Centers for Disease Control) Extended the Eviction Moratorium Date: The nationwide ban on certain residential evictions was extended to at least Wednesday, June 30^th!
8. On March 25^th, 2021, Senator Bernie Sanders Introduced the “For the 99.5 Percent Act”: These sweeping changes, if enacted into law, would change the way families pass money down to their children, and dramatically increase the taxes children must pay within 9 months from their parents’ death!  Proposed changes include but are not limited to: A. Reducing the current $15,000/ per person unlimited gift tax exclusion to a maximum of $20,000 per year in total.  B. Reducing the current $11,700,000 per person estate tax exclusion to $3,500,000 per person. C. Limiting lifetime gifts to $1,000,000 per person in total.

Are you confused yet?  There has never been a more important time to rely on your advisors.  Reach out now to your CPA, Attorneys, Insurance Broker, Investment Advisor and Financial Planner to review these monumental changes.  This is what you pay them for, and your money-moves now will have an impact on your family for many years to come!  Feel free to reach out to me for guidance at [email protected].

Be Positive, Test Negative and Keep the Faith!