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.
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.
- March 20, 2020: A Nervous Investor’s Guide to Handling Market Volatility – Learn the basics about market declines, why removing emotions from investing is important, and what you should be focusing on.
- March 27, 2020: How to Get Financially Organized While You’re Stuck At Home – Our tips include key documents and information to locate, ways to polish up your budget, advantages of online password keepers, and what to do with all of those paper documents.
- April 3, 2020: Why We Own Bonds in Today’s Low Interest Rate World – We review the basics of bonds and benefits of owning them when interest rates are low, and how the risks of owning bonds can be managed.
- April 10, 2020: How the CARES Act Impacts Your Finances – We review key stimulus provisions, including the direct payments to individuals, retirement account changes, student loan relief, and tax changes.
- April 17, 2020: Save on Taxes with Tax Loss Harvesting – Tax loss harvesting is an important topic for anyone with a taxable brokerage account. Learn about the basic benefits, limits, compliance with IRS wash sale rules, and when NOT to tax loss harvest.
- April 24, 2020: Using Roth Conversions to Reduce Taxes During Retirement – Roth conversions can be a valuable strategy for retirees and near-retirees to significantly reduce their tax burden in retirement. We discuss the basics of a Roth conversion, why conversions can be beneficial, and how to determine if they’re advantageous for you.
- May 1, 2020: Ways to Track, Monitor, and Protect Your Accounts – With fraud and identity theft on the rise, and almost all of our financial accounts linked online, monitoring and securing your online presence has never been more important. We cover resources to help you monitor online accounts, find accounts you have forgotten about, and how to keep your identity and online login information safe.
- May 8, 2020: Protect Your Financial Plan with Life and Disability Insurance – Learn about insurance options available to help protect you and your family from risks that exist from the coronavirus and the rest of life’s hazards. As fee-only advisors, we do not earn commissions from any product we recommend. This means you get advice in your best interest, not the agent’s.
- May 22, 2020: Developing a Charitable Giving Strategy to Maximize Effectiveness and Tax Efficiency – We discuss how to create a charitable giving plan that matches your goals and the most tax-efficient ways to implement it. Topics include recent tax law changes related to charitable giving, Qualified Charitable Distributions (QCDs) from your IRA, donating appreciated securities, Donor Advised Funds, and charitable remainder trusts.
- June 5, 2020: Don’t Put It Off: Practical Steps to Create and Maintain an Estate Plan – In addition to estate planning basics (Wills, Trusts, Powers of Attorney), we review pitfalls to avoid and common mistakes we see that cause issues, as well as simple action items to do now.
- June 26, 2020: How to Use a 529 and Available Tax Benefits to Maximize College Funding – Learn how to coordinate use of 529 savings, tax credits and deductions, loans, and cash to fund four years of college expenses. We’ll walk through examples of how a withdrawal strategy can reduce your financial burden.
- July 24, 2020: How to Pay For Large Expenses During Retirement – Learn when it’s best to use IRAs, taxable brokerage accounts, or Roth IRAs to fund large purchases. We also explain when loans make sense and actually save you money, and discuss situations when withdrawals can be made tax-free.
- Aug. 28, 2020: Client FAQs – We answer questions we’ve heard from clients recently, including “should I invest in gold?”, “should I refinance my mortgage?”, and “where do I hold cash for the best yield?”
- Oct. 23, 2020: Why You Need to Review Your Medicare Part D and How to Compare Plans – Medicare Open Enrollment (Oct. 15 to Dec. 7) is the time to re-evaluate your Part D prescription drug plan, even if your prescriptions haven’t changed. In this webinar, we explain why it’s important to review Part D plans annually, what information to review, and show you how to do it step-by-step.
- Dec. 4, 2020: How to Shop for Long-Term Care Insurance – Paying for long-term care is often one of the primary concerns people have when planning for retirement. We review how to evaluate your need for this insurance and top factors to consider in a policy, including types of coverage available, how much is needed, and important features.
- Jan. 22, 2021: What You Need to Know About The Consolidated Appropriations Act of 2021 – We review the key provisions that will impact you, including stimulus payments to individuals, charitable giving deductions, and special tax provisions for losses from Derecho storm damage.
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.