1339

COVID-19 Resources for You and Your Loved Ones

We’re here for you.

As your fiduciary, fee-only advisors, we are here to support and guide you through the financial impact of COVID-19. 

Browse and share our library of resources below — webinars with tips and strategies, guides and checklists, and summaries of financial relief and tax law changes.

Even if you’re not feeling much of a financial impact from COVID-19, you may know someone who is and could use our help. We’re happy to answer their questions and can help them think through their best options to avoid long-term damage to their finances.

Your loved one does not need to become a client, and this is at no cost. They can email, call 319.393.4020 or schedule a meeting.

  

  

Webinar Recordings

Our web series covers the basics of investing and financial planning, providing a view of how a strong portfolio and financial plan can last the test of time.

  

Highlights from the Consolidated Appropriations Act of 2021

The second economic relief and spending bill signed into law in the final days of 2020 includes many provisions for individuals and businesses. The below summary focuses on those that we know will affect a good number of our clients. To review the entire bill, go here.

  • Second round of direct payments to individuals. Like the first round of “stimulus” payments as per the March CARES Act, your eligibility for the second payment is based on your adjusted gross income (AGI). Although eligibility is based on your 2020 AGI, the IRS has issued payments to date based on your 2019 AGI.

    Single filers with an AGI of less than $75,000 will receive $600 and married filing joint filers with an AGI of less than $150,000 will receive $1,200. Those with children under the age of 17 will also receive $600 per child.

    Amounts are reduced for AGIs above the $75,000/$150,000 thresholds, and taxpayers with AGIs above $87,000/$174,000 are ineligible for payments.

    If your 2020 AGI qualifies you for payment, but you have not received it, you can claim a Recovery Rebate Credit on your 2020 tax return this spring.

    To verify your second payment amount, use this calculator, and for information about payments, visit www.irs.gov/eip.

  • Above-the-line deduction for charitable contributions extended. The $300 above-the-line deduction for cash contributions to 501(c)(3) organizations has been extended through 2021 for those who claim the standard deduction. Joint filers can also double their giving and deduction for 2021. 
  • Qualified disaster-related personal casualty losses. The “Taxpayer Certainty and Disaster Tax Relief Act of 2020” part of the bill includes a special provision for personal casualty losses in qualified disaster areas i.e., counties declared Federal disaster areas after the August derecho. If you claim the standard deduction, you can increase that by the amount of your net disaster loss. (Without this legislation, only those who itemize would have been able to claim a lesser amount.) Important: Please consult us or your tax professional for guidance about this unique deduction for your specific situation.
  • Qualified Disaster Distributions. If you’ve experienced economic loss between Jan. 1, 2020, and 60 days after Dec. 27, 2020 due a Federally declared disaster that is non-COVID-19 related, you can withdrawal up to $100,000 from a retirement plan like a 401(k) or IRA, as a loan. Distributions are exempt from the 10% early withdrawal penalty, but you will still owe income tax payable over three years.
  • College deduction and credit changes. 2020 is the last year to claim the Tuition and Fees Deduction. Most taxpayers who have claimed this deduction will now likely qualify for the Lifetime Learning Credit thanks to increased income limits.
  • Health and Dependent Care FSAs more flexible. Employers can allow employees to rollover unused 2020 and 2021 FSA funds to the next year. Employers may also choose to extend the “grace period” for using remaining funds up to 12 months, and permit employees to change election amounts during 2021 without a life change.
  • Unemployment extended and expanded. Payments increase by $300/week and benefits are extended through March 14, 2021. Those approved before March 14 can continue receiving benefits an additional 4 weeks. The Pandemic Unemployment Assistance program has been expanded to include self-employed, freelancers and gig economy workers.
  • Lower threshold for itemized deduction for medical expenses permanent. If you itemize, you can deduct medical expenses that exceed 7.5% of your AGI. The threshold was scheduled to increase to 10% in 2021.
  • Energy Tax Credit extended. The credit for renewable energy home improvements is extended through 2021. The $500 allowance is the maximum lifetime amount.
  • More relief for business owners. Paycheck Protection Program (PPP) loans are available again – to businesses that didn’t receive a loan the first time and to qualified owners that already received one. Additional relief includes an expanded list of expenses PPP loans can be used for, choice of an 8 or 24-week Covered Period, and extension of the Employee Retention Credit.

 

Key Provisions of the CARES Act That May Benefit You

The CARES Act is a $2 trillion coronavirus economic stimulus bill signed into law on March 27, 2020. It is designed to offer relief for businesses, families, and individuals who have been negatively impacted by COVID-19. Let’s take a closer look at the provisions most likely to impact you:

  • Direct payments to Americans. Probably the most widespread aspect of this bill is its stipulation to make direct payments to American citizens. Many taxpayers will receive $1,200 if they filed single or $2,400 for married couples with an additional $500 per child. There is an income threshold for direct payments which s $75,000 or under for those who filed single and $150,000 or under for those who are married and filed jointly. If your AGI is above those numbers, the payments begin to phase out. Wondering what to do with your payment? Matt shares a few ideas in this interview with KCRG, but contact us for recommendations best for your situation.
  • Unemployment. The Act provides an additional $250 billion for extended unemployment insurance programs. It expands eligibility while also providing qualified workers with an additional $600 per week for 4 months. Unemployment benefits will also be extended through December 31, 2020. This applies to W-2, self-employed, contractors, and gig economy workers.
  • Retirement funds. The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus related purposes. This applies retroactively to distributions as early as January 1, 2020. Even though the penalty tax is waived, you will still need to pay income tax on the withdrawals, but it is spread over a three-year period. The 401(k) loan limit has also increased from $50,000 to $100,000. Required Minimum Distributions (RMDs) are suspended for 2020.
  • Federal student loans. Federal loan payments have been deferred through January 31, 2021 (extended twice). Additionally, no interest will accrue during that time. *Note: This does NOT apply to private loans but contact your lender if you need help making payments.
  • Charitable contributions. To further incentivize charitable contributions, the CARES Act establishes a new above-the-line deduction for cash contributions up to $300 made in 2020 to be put on next year’s federal tax returns. The limits on deductions for charitable contributions are also changing which especially impacts individuals who itemize deductions.
  • Business owners. Business owners have had a difficult time navigating the changes to their business in light of the coronavirus. The bill allows employers to delay the payment of their portion of 2020 payroll taxes until 2021 and 2022. The bill also provides $350 billion to help prevent layoffs and business closures. Companies with 500 employees or less who remain in business are eligible for up to 8 weeks of cash flow assistance.

Guides & Checklists

AMWM COVID-19 Resources – A guide for various scenarios, including:

  • Temporary or permanent unemployment
  • Small business owner hardships
  • Assistance with loan payments and bills
  • Filing and paying your taxes
  • Scam and fraud prevention and reporting

Emergency Relief Options for Individuals – A detailed outline of the new emergency relief options, including those in:

  • The CARES Act
  • Families First Coronavirus Response Act
  • Executive orders
  • IRS changes
  • And other relief options specific to COVID-19 for individuals

Issues to Consider If You Lose Your Job – A comprehensive checklist of financial issues to consider surrounding a job loss.

What Documents Do I Need To Keep? – A checklist with legal, health care, tax, and asset-related documents you should have securely saved.

Monthly Budget Tracker – Customize this spending template in a way that works best for you.

Issues to Consider Before Updating Your Estate Plan – This checklist covers key questions to ponder before updating your estate plans.

Let's Get Started

You'll get the most value from financial planning if your specific goals and needs match a firm's philosophy and services. Let's learn more about each other.

Ready to Get Started?