Three Aspects of Retirement Accounts Impacted by Coronavirus Relief
Those of you familiar with Joseph L. Motta, LPA know that we typically focus our blogs, posts and updates on estate planning, long term care planning and special needs planning. However, we will be expanding our topics to provide expertise regarding how the coronavirus may be effecting the estate planning, long term care needs and in this case, and general guidance for seniors. If you have any questions about how this pandemic could be effecting you in these areas, please do not hesitate to reach out. Let us reduce your stress by providing you with answers.
Coronavirus Relief Waives 2020 Required Minimum Distributions (RMD)
A comprehensive article we recommend, written for the average retiree, covers how the new rules apply and various elements to consider regarding the RMD waiver is on AARP's website: CARES Act Waives Required Minimum Distributions From Retirement Accounts for 2020. This RMD waiver applies to retirement accounts that are copany savings plans and IRAs - traditional, as well as Roth inherited IRAs. This RMD waiver, if the funds are not needed now, can be a big benefit because the RMD this year would have been taxed at the end of year 2019 account values - when the Dow was 28,462. The waiver allows you to avoid the tax bill entirely. If you would like personal guidance, specific to your situation, don't hesitate to contact Joseph Motta, estate planning and elder law attorney.
IRA Contribution Deadline for 2019 Tax Year Extended Until July 15
As part of the IRS response to the COVID-19 Outbreak the 2019 tax filing has been extended to July 15, 2020 which also extends the deadline for IRA contributions. One tip we want to pass on is to make sure any contributions are made during this 3 month extension are accurately designated as a 2019 IRA contribution, mark checks as 2019 IRA contributions and/or indicate to the IRA custodian this contribution is for 2019.
Temporary Waiver for Coronavirus-Related Early Distributions
Lastly, if this coronavirus outbreak has impacted your retirement savings in the other direction, to the extent where additional contributions are the last thing on your mind and you need an early withdrawal from a 401(k), 403 (b) and traditional IRAs, the CARES Act waives the 10 percent early withdrawal penalty. Individuals can take up to $100,000 distribution from a qualified retirement plan and available as a CRD - coronavirus-related distribution to people : (1) diagnosed with COVID-19; (2) whose spouse or dependent is diagnosed with COVID-19; or (3) who experience adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care, closing or reducing hours of a business owned or operated by the individual due to COVID-19, or other factors as determined by the U.S. Treasury Secretary.
Elder Law Attorney Helps with Coronavirus Changes to Retirement Accounts
At Joseph L. Motta, elder law and estate planning firm in Avon Lake, OH, we know the coronavirus pandemic has caused a substantial uncertainty and questions regarding your estate planning. We specialize in staying up-to-date on all changes that could impact your estate planning and pride ourselves on putting our expertise to work to provide you with the best advice. Call 440-930-2826 to schedule a free consultation .