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.