This $2 trillion bill is meant to impact both individuals and businesses and contains significant tax-savings measures. It could affect prior tax years while also creating immediate cash flow.

The following is the summary presented by Michael Kitces and Jeffery Levine (www.kitces.com) on March 27, 2020.  I aim to provide you the highlights that may help you in your personal life, business and that may help someone you know.  I am sure we will dive in deeper in the next a few weeks in terms of planning strategies and action plans to improve your financial situation.

As we continue to face uncertain times, the IRS has made a welcome announcement.

Treasury Secretary Steven Mnuchin has announced that the IRS has decided to extend the filing and payment deadline for 2019 tax returns, allowing taxpayers to defer until July 15. Mnuchin indicated this move will put $300 billion into the economy during a time of great economic concern over the consequences of the COVID-19 pandemic.

The payment deferment is subject to certain caps, however. Individuals may defer tax payments of up to $1 million, while corporations may defer up to $10 million. The limits were purposefully selected to benefit small businesses that report income through S corporations, partnerships or other pass-through entities.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law on December 20, 2019, and it took effect on January 1, 2020. Overall, the legislation is intended to strengthen retirement security nationwide, but it also contains multiple changes that impact retirement and estate planning. Let’s dig into a few of the most significant provisions.

No Age Cut-Off for IRA Contributions

In the past, you were prohibited from contributing to a traditional IRA in the year you reached age 70 ½, even if you were still employed. The SECURE Act eliminates this rule so that anyone, regardless of age, can make IRA contributions as long as they have earned income to contribute. With this change, traditional IRA rules now mirror the contribution rules for Roth IRAs and 401(k) plans.

This longer contribution period takes effect for the 2020 tax year. Although 2019 contributions can be made up until April 15, 2020, these contributions must still follow the past rules, meaning only individuals under the age of 70 ½ can contribute for tax year 2019.

If you’ve been thinking about retirement planning, you’ve undoubtedly considered how much investment risk is appropriate for your financial goals – and your comfort level.

Every investment has risks.  The usual pattern is that when the stock market goes up, the bond market goes down (usually due to the Federal Reserve Bank increasing interest rates), but market cycles can be very strange indeed.  In 2018, both the stock and bond markets lost money.  This is precisely why everyone needs a solid education in investment planning, whether working alone or with an advisor, in order to determine risk tolerance and, on that basis, the right asset allocation to maximize after-tax risk-adjusted return.

Many investors fear volatility in the market because they worry a market downturn would erase their hard-earned savings, but there is no need to fear volatility.  Yes, it represents risk in the short-term, but it also creates opportunities for investors with a long-term horizon to get into the market at attractive price levels. 

Let’s take a look at a few sample investments and what they have returned over time:

PLAY THE EPISODE

Rock the PodCast Episode: Women in the Financial Planning Industry with Echo Huang, CFA, CFP®, CPA

In this client feature episode of Rock the Podcast, Jessica interviews Echo Huang. Echo is a female Chinese immigrant who moved to America with only $800 in her pocket at the age of 20 and founded Echo Wealth Management as a Registered Investment Advisor (RIA) in 2015. She is passionate about educating women that Financial Planning is a viable career path for them and that increasing the number of female CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals in America will help transform the financial industry and income inequality between men and women.