It feels like we’re all in need of some good news, yes?
Well in that spirit, today we have some great news for young or youngish clients and also some good news for the…more experienced among us! 🙂
First … some good news for the young (particularly those with student loans):
The new CARES Act indicates that you do NOT need to pay interest or ANY payments on eligible student loans for six months. (!)
Effective 3/13/20 and through 9/20/20, borrowers will have no interest accrued and NO payments due. Even better, the adjustment will be automatic; there is nothing borrowers need to do for the interest waiver to be applied to their eligible federal loans.
Even better … there will be no penalties or late fees assessed.
Because the relief is in the form of waiving interest rather than the federal government making loan payments for borrowers, borrowers will see no difference in their student loan balances between now and September 30, 2020 unless they choose to continue making payments. Any payments made on eligible student loans during this period will be applied to principal (after paying interest accrued prior to March 13, 2020).
Furthermore, student loan debt collection has been suspended, and employers who contribute to student loan payments can add even more to what is being paid off.
Good news, all around.
And … for the more experienced among us, good news as well:
RMD is suspended.
The CARES Act allows you to NOT take a Required Minimum Distribution (RMD) for 2020. Did you get that? You do NOT have to take one of your minimum distributions in 2020 if you don’t want/need to.
So, if you are over 70 1/2 and you normally take your minimum distribution in December each year, AND you don’t really need that money this year, you just might want to consider NOT taking that distribution this December.
That will save you some taxes!
For those who are in-between the young and more experienced… there is still plenty of helpful news out there when it comes to tax breaks.
And we are here to help you find those tax savings that we all need when times are tough like right now.
Let’s not forget those 2019 taxes (due July 15th). And as always… we’re in your corner.
Pronto Income Tax Team