News & Press
Stimulus payments, relaxed rules for tapping into retirement accounts and other coronavirus-relief measures are helping to keep millions of Americans afloat financially, but they could bring tax surprises, including unpleasant ones, down the road.
Here's a quick look at some of the tax red flags to beware — ramifications that could affect how much money you owe or receive in a refund and possibly affect Social Security or other benefits.
IRA expert Ed Slott, president of Ed Slott and Co., stressed that the COVID-19 pandemic “shouldn’t be down time” for advisors: “This is the time you want to strengthen your relationships.”
In particular, he said, many clients need your help understanding the federal government’s COVID-19 relief initiatives, including breaks on required minimum distributions from retirement accounts.
U.S. Treasury Secretary Steven Mnuchin has backed a recent, controversial IRS ruling that expenses paid for with the forgivable Paycheck Protection Program loans are not tax-deductible.
Mnuchin told FOX Business’ Maria Bartiromo this week that he has reviewed the issue personally and that the guidance is correct, saying it’s “basically tax 101.”
“The money coming in the PPP is not taxable,” Mnuchin said. “So if the money that’s coming is not taxable, you can’t double-dip, you can’t say you’re going to get deductions for workers that you didn’t pay for.”
Taxpayers and lawmakers are not happy with a newly released policy regarding the Paycheck Protection Program, which some argue diminishes the value of the loans for recipients.
The IRS issued guidance late Thursday preventing business owners who have their PPP loans forgiven from claiming tax breaks on otherwise deductible expenses if they were paid for using the government aid.
The loans are tax-exempt, so the guidance was based on existing law, which generally aims to prevent people from receiving a “double tax benefit.”
The coronavirus pandemic is wreaking havoc on the U.S. economy, with 26 million workers newly unemployed and plenty more people jolted by declines in their retirement and brokerage accounts.
Americans at all economic levels are looking to free up cash. As they do, they should pay attention to taxes, which can determine which strategy makes the most sense.
Sen. Ben Cardin, D-Md., signaled Thursday that the next round of coronavirus stimulus could likely include required minimum distribution relief.
During an early Thursday afternoon webcast held by the American Council for Capital Formation, Cardin was questioned on measures lawmakers could take to deal with the massive withdrawals from retirement accounts taking place now.
It’s a confusing year for charitably minded seniors with traditional individual retirement accounts—and a good one to reconsider giving strategies.
Recent law changes are responsible. Late in 2019, Congress raised the age at which most savers are required to start taking money from their IRAs to age 72 from age 70½. But it left unchanged the age at which savers can donate IRA assets, which is still 70½.
The CARES Act, the legislation signed into law by President Trump in March, generated many questions from readers. Below we answer some of them.
Q: You wrote in a recent article that "the law also doubles the amount 401(k) participants can take in loans from an account for the next six months to the lower of $100,000 or 100% of the account balance. IRAs don’t permit loans."
It seems as if this part of Bill S.3548, speaks to individual retirement account (IRA) loans:
With stocks down around 17% since Feb. 20, older Americans stand to benefit from Congress’s stimulus-bill move to suspend required minimum distributions from retirement accounts this year.
The one-year hiatus gives those who can afford to leave their nest eggs alone a better chance of recovering losses. The reason: They’ll have more shares in their accounts in the event of a stock-market rebound.