Millions of Americans have found themselves without a job as unemployment rates rose to 14.7 percent in April.1 Even as states begin loosening stay-at-home orders and allowing businesses to resume operation, not all who were laid off weeks ago have a job to return to. Industries like hospitality, travel and entertainment have taken some of the hardest hits, with events canceled or postponed through the end of 2020.
Tax season is officially in full swing and while you’re probably focused on filing your 2019 tax return by the recently extended deadline of July 15, 2020, it’s never too early to begin preparing for next year.1
There are some cases in which the deduction amounts remain the same as 2019. For instance, medical and dental expenses, as well as state and local sales, are not changing in the new year.
However, standard deductions, income thresholds for tax brackets, certain tax credits and retirement savings limits have increased and may be important for you to keep in mind.
On March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act. Amidst the global COVID-19 pandemic, this act is designed to bring economic relief to individuals and businesses who’ve been affected by the resulting economic downturn.
Section 2202 of the act, titled “Special Rules For Use of Retirement Funds,” now allows those affected by COVID-19 to withdraw up to $100,000 penalty-free from their 401(k) or IRA.1
The rules of investing are similar to the rules of physical health. The information is widely known and not overly complicated. For physical health – 1) eat a balanced, healthy diet 2) exercise 3) get sleep. Yet, America and to a lesser extent the world is getting fatter and less healthy. The same concepts apply to investing – 1) Own a balanced portfolio 2) diversify 3) re-balance 4) hold strategy. None of these are revolutionary ideas and yet most of America doesn’t do this. These are some of my rules for portfolio creation.