Don't Take Those RMDs This Year!

Don’t Take Those RMDs This Year!

As you may have heard, the CARES Act (aka the Coronavirus stimulus bill) created a holiday for mandatory distributions from retirement accounts in 2020.

So if you’re otherwise required to pull money from your IRA or 401(k) this year, you can skip it – penalty free.  This includes retirement accounts of your own AND those inherited from someone else.  Pretty neat, right?

But remember, the CARES Act wasn’t passed until March.  What if you’ve already taken a distribution?  Can you put it back?

The good news is yes, you can, as long as it’s done by August 31st.  Whereas this wasn’t initially the allowable, updated guidance from the IRS says that those of you who took RMDs in January or February can now replace them.

Read on for the details on how to put back your RMD if you’ve already taken one, and when you might still want to take a distribution if you haven’t already.

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The CARES Act: Implications for Individuals

The CARES Act: Implications for Individuals

As I’ve written about on the blog and covered on the podcast recently, the CARES Act is a big piece of legislation.  (Remember….the total package is $2.2 trillion!).  We’ve covered several sections of the bill and how it might impact you on the blog recently, including a deep dive into the paycheck protection program.

There are also many provisions in the bill we haven’t covered.  Specifically, sections relating to stimulus checks, expanded unemployment insurance, mandatory distribution holidays, penalty free retirement account withdrawals, and student loan relief.  Coincidentally, all have been commanding a large number of questions from clients of Three Oaks recently.

Like all legislation there is a great deal of gray area in this piece of legislation, especially given the urgency with which it was passed.  The IRS, SBA, Department of Labor, and other government entities are scrambling to provide relevant guidance as soon as possible.  So while there may appear to be some planning opportunities with regard to the law, it’s entirely possible they’re just a temporary mirage.  Nevertheless, here’s what we know now about the CARES Act and how it might impact you as a taxpayer.

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Unpacking the Coronavirus Stimulus Bill

Unpacking the Coronavirus Stimulus Bill

As you may have heard, the Coronavirus stimulus bill was signed into law by president Trump last week.  The package is called the CARES Act, and provides over $2 trillion of economic stimulus across a variety of channels.

My first thought here is sheer size of the package.  $2 trillion is a TON of money.  While at some point I’ll look into how the package will be paid for, I’ve spent more of my energy recently learning what’s in it.  The bill includes a mix of forgivable loans to small businesses, bailouts to corporations in certain industries, and checks mailed directly to taxpayers falling under a certain amount of adjusted gross income.

For many of our clients at Three Oaks Capital, there is urgency surrounding the relief opportunities for small businesses.  This post will cover the four sections I think are most relevant.  I’ll circle back and try to cover implications and opportunities for individuals in a subsequent post.

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