Jennifer's Compass

On Course - Special Edition - How the CARES Act Will Work

 

 

 

On Course  - Special Edition                March 31, 2020        Hi Everyone,   Thank you for making our meetings on Zoom work so well.  Having to stay home doesn't mean financial planning stops - in fact, it's even more important to stay in touch and keep your financial plan on course during economic turmoil!   Last week the government passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), which includes a Recovery Rebate for all individuals with a work-eligible Social Security number.   Checks or direct deposit will be sent based on the adjusted gross income (AGI) on your most recently filed tax return.  AGI is on line 7 of the 2018 Form 1040 and line 8b on the 2019 form.  The rebate is a credit on your 2020 tax return.  If you don't get your share because 2018 or 2019 income was too high, but your 2020 income meets the limits, you'll get a refundable credit on your 2020 return when you file next year.  This means your taxes are reduced by the rebate amount you're eligible for even if that results in a refund on your return.  If you get paid too much, i.e., your 2020 income turns out to be higher than 2018/2019 and above the income limit to get a rebate, you still get to keep the money.  It's not 'clawed back' on your 2020 return. How much you get depends on filing status.  Individual, married filing separately, and head-of-household filers with AGI up to $75,000 get the full $1,200 rebate.  If you filed married jointly with AGI up to $150,000, you'll get $2,400.  Kids under age 17 count for another $500 each, if they are filed as a dependent on your return.  The amount you're eligible for phases out $5 for every $100 your income goes over the $75k/$150k limit.  So, if you filed a joint return, you won't get a rebate if your AGI is over $198,000 ($99,000 for single, married filing separately, and head-of-household filers).   The IRS should send the rebates to the account you used for your tax refund direct deposit or to your last address.  If you've moved, it would be a good idea to refile mail-forwarding instructions with USPS.  If the account you used for direct deposit is closed, the IRS is supposed to publish a phone number to call to track down your check. There isn't any guidance yet on when the rebates will go out.  Some say a month or so from now.  We also don't know when the IRS will check your tax return to determine your eligible AGI, but if your 2019 tax return has an income eligible for the rebate and your 2018 AGI was too high, filing 2019 now might result in a rebate being sent.   There are other provisions in the Act that affect IRA withdrawals and unemployment benefits, among other things. We'll send a check-in on those topics in following weeks.   Thank you! Be Well!        Jennifer Lane, CFPⓇ Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money.  Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams. This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice.  Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. All contents of this newsletter Copyright 2020 Compass Planning

On Course - Special Edition - Online meetings and your financial planning during Covid-19 outbreak

 

 

 

On Course  - Special Edition                March 16, 2020        Hi Everyone,   Covid-19 has temporarily changed our work day, but it hasn't changed our commitment to helping you reach your financial goals.     We're moving all our meetings online, and dividing our staff between two offices and their homes as a social distancing measure. We're used to working remotely (in fact, we have many clients outside of MA) so we don't expect this change to reduce the effectiveness of our service.   Zoom is an easy to use online meeting service. You'll be able to log into your meeting using your computer, a phone or tablet, or even a landline phone. We'll send you an email with links and dial-in numbers as your meeting approaches. Your meeting notes will be available in your Sharefile vault. Beth, Sharry, Theresa or Josh will send you a link when your docs are ready.   Thank you! Please let us know if you have any questions.     Jennifer Lane, CFP Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money.  Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams. This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice.  Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. All contents of this newsletter Copyright 2020 Compass Planning

On Course - Special Edition - Thoughts on the Markets

 

 

 

On Course  - Special Edition                March 2, 2020        Hi, Everyone,   It's been a long time since we've seen market volatility like we have experienced recently.     I wanted to check in to remind you why asset allocation, periodic rebalancing, and managing to the time frame of your financial goals -- not market timing -- is so important.   Periods of market volatility during the bear market of 2007- 2009, after 9/11, and after the tech bubble are distant memories, but during those times it felt as though the markets would never recover.  Yet, they did.  You have a plan.  Stick with the plan.  Email us if you want to discuss.    While we hope the human effects of the coronavirus can be minimized, we don't yet know the full economic impact these times will have on the markets. In the meantime, it's important to remember the lessons of the past.    Thanks.    Jennifer Lane, CFP Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money.  Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams. This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice.  Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. All contents of this newsletter Copyright 2020 Compass Planning