Tax legislation is coming fast and furious. Amazing how thing get passed in a time of crisis. You and your accountant will become best friends, if you aren’t all ready, as soon as this is all over. There is tons of income tax planning to do for this year. There is also money available from various sources, if needed, or waiver of taking income if not needed. A couple of the top points for you in the most simplest of terms are:
1. You can still make contributions to your IRA accounts and HSA/MSA accounts until July 15, 2020. I know it sounds counter intuitive to take money and tie it up at this time, but there really is nothing better for increasing wealth than these types of accounts.
2. If you don’t need money from your IRA you do not have to take your 2020 required minimum distribution.
3. You can now borrow more from your retirement plan that you could have in the past. You may now borrow the lesser of 100% of the vested amount or $100,000.
4. You may also withdraw without the 10% penalty for those not yet 59 1/2 if it is for adverse financial consequences as a result of COVID-19. You can also repay the money back to your account within 3 years of the withdrawal.
5. The ability to take deductions for charitable contributions will be increased for this year. If you claim the standard deduction, you may also claim up to $300 for cash contributions to charities. Itemizers can claim 100% of AGI (up from 60%) towards their charitable deduction.
1. You can still make contributions to your IRA accounts and HSA/MSA accounts until July 15, 2020. I know it sounds counter intuitive to take money and tie it up at this time, but there really is nothing better for increasing wealth than these types of accounts.
2. If you don’t need money from your IRA you do not have to take your 2020 required minimum distribution.
3. You can now borrow more from your retirement plan that you could have in the past. You may now borrow the lesser of 100% of the vested amount or $100,000.
4. You may also withdraw without the 10% penalty for those not yet 59 1/2 if it is for adverse financial consequences as a result of COVID-19. You can also repay the money back to your account within 3 years of the withdrawal.
5. The ability to take deductions for charitable contributions will be increased for this year. If you claim the standard deduction, you may also claim up to $300 for cash contributions to charities. Itemizers can claim 100% of AGI (up from 60%) towards their charitable deduction.
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