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03-25-2020, 11:21 AM
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#21
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Confused about dryer sheets
Join Date: Oct 2018
Posts: 7
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Quote:
Originally Posted by statsman
Saw that too. Our income from the 2018 tax year is too high to qualify because of the taxable capital gains on a house sale. As it is, one of us is drawing SS and the other a pension. I really don't think we're supposed to be the individuals who require the immediate help.
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CNN reported today:
"Qualifying income levels will be based on 2019 federal tax returns, if already filed, and otherwise on 2018 returns."
https://www.cnn.com/2020/03/25/polit...rus/index.html
So, could possibly be based on 2019 returns.
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03-25-2020, 11:22 AM
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#22
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Posts: 2,962
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Watch Boeing stock soar. The WaPost reports that the Senate put a little present into the bailout package for them.
__________________
Tick tick tick tock goes the clock on the wall as we're dancing the evening away -- Tick Tock Polka
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03-25-2020, 11:22 AM
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#23
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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The original report I saw, which was posted on Twitter by an economist that saw the bill, said that RMD's have been cancelled. I will be happy not to take any more distributions this year if that is the case.
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03-25-2020, 11:25 AM
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#24
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Confused about dryer sheets
Join Date: Oct 2018
Posts: 7
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Quote:
Originally Posted by Fermion
The real question is what happens to people who had high income in 2018 but much lower income in 2019 (and 2020 is looking pretty bear).
They get the shaft or will things get trued up at tax time in 2021?
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I could be that 2019 is used, if filed already.
"Qualifying income levels will be based on 2019 federal tax returns, if already filed, and otherwise on 2018 returns."
https://www.cnn.com/2020/03/25/polit...rus/index.html
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03-25-2020, 12:10 PM
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#25
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 2,781
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Today, 3/25, CNBC.com has an article on how the bill would affect retirement savings.
Key points:
Quote:
This year, you’ll be able to take a coronavirus-related distribution of up to $100,000 from your retirement plan or IRA without the 10% early withdrawal penalty, according to the most recent version of the bill.
The bill also relaxes the rules around retirement-plan loans, allowing you to borrow up to $100,000 from your 401(k). That’s double the amount you can normally take.
Retirees who would normally take required minimum distributions from their retirement savings can waive them for 2020.
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03-25-2020, 12:23 PM
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#26
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Full time employment: Posting here.
Join Date: Feb 2011
Posts: 852
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The relevant section on RMD's in the Senate bill is Sec. 2203-- as I read it, RMD's from most IRA, 401k, 457b are all waived for 2020. But it is not straightforward to read as it is an amendment to the 1986 law and refers a lot to it which I have not read. I believe this means the inherited IRA I got from my mother is included in the waiver and I do not have to take the RMD. here is the bill-
https://www.politico.com/f/?id=00000...5-73bfe5b20000
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03-25-2020, 12:25 PM
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#27
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Confused about dryer sheets
Join Date: Apr 2014
Location: Rogue River
Posts: 7
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CNBC is unclear
Yes, CNBC is my original source. However, they keep confounding the new retirees (age 72) with current retirees (> age 70.5). I'm 71, and have been withdrawing an RMD since last year. It is this year's RMD suspension relief that is unclear.
Thanks.
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03-25-2020, 01:53 PM
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#28
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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I assume it applies to inherited IRA's as well. It did in 2009. I wonder if you can redeposit some or all of the amount you already took.
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03-25-2020, 02:10 PM
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#29
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Confused about dryer sheets
Join Date: Apr 2014
Location: Rogue River
Posts: 7
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2009 was 2y before I retired. I am aware of the economic issues from then, of course, but I didn't know there was a similar waiver then. Do you recall many of the details?
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03-25-2020, 02:15 PM
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#30
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
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They started off at $500 billion for big businesses with no strings and no oversight and secrecy for six months and ended up with solicitor general and congressional oversight, no funds for major politician-controlled businesses, stock buybacks forbidden for a while and, supposedly, transparency about where our money went. I’m glad they took a few days to achieve some taxpayer protections.
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03-25-2020, 02:23 PM
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#31
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Administrator
Join Date: Apr 2006
Posts: 22,973
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It seems to me that using any prior years income to determine eligibility for payment is wrong. The need for money is determined by the fact that people are not making any money this year. Maybe you had a decent income last year or in 2018, but you got laid off when this all started in January. This also requires the IRS to cross reference your income, with some having filed for 2019 and some not. That will unnecessarily delay the distribution.
It would make far more sense to just send money to everyone immediately. Then true it up in next year's tax filing based on your actual 2020 income. If you are over the limit in 2020, when you actually got the money, there is a graduated claw-back provision.
That's what I would do.
__________________
Living an analog life in the Digital Age.
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03-25-2020, 02:30 PM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,231
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Quote:
Just catching up on this thread and you beat me to it. Good thing I read yours first.
__________________
TGIM
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03-25-2020, 02:30 PM
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#33
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Moderator
Join Date: Nov 2015
Posts: 13,879
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Quote:
Originally Posted by Gumby
It seems to me that using any prior years income to determine eligibility for payment is wrong. The need for money is determined by the fact that people are not making any money this year. Maybe you had a decent income last year or in 2018, but you got laid off when this all started in January. This also requires the IRS to cross reference your income, with some having filed for 2019 and some not. That will unnecessarily delay the distribution.
It would make far more sense to just send money to everyone immediately. Then true it up in next year's tax filing based on your actual 2020 income. If you are over the limit in 2020, when you actually got the money, there is a graduated claw-back provision.
That's what I would do.
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Exactly, and this excludes all young workers who had no W2 in 18, and haven't yet filed in 19. They will no longer be children I guess, and won't qualify. Meanwhile I probably will, as will my parents. It also will underpay those who live in higher COL areas, where $150k isn't that much money, especially for larger families.
I would prefer send it all now to everyone, and let everyone know that if you're in a high tax bracket for 2020 to expect a modest claw back. Or have a massive campaign to donate and spend. Or both.
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03-25-2020, 02:38 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,231
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Quote:
Originally Posted by Aerides
Exactly, and this excludes all young workers who had no W2 in 18, and haven't yet filed in 19. They will no longer be children I guess, and won't qualify. Meanwhile I probably will, as will my parents. It also will underpay those who live in higher COL areas, where $150k isn't that much money, especially for larger families.
I would prefer send it all now to everyone, and let everyone know that if you're in a high tax bracket for 2020 to expect a modest claw back. Or have a massive campaign to donate and spend. Or both.
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Interesting situations for my household.
Me - already filed 2019 return. No taxes owed and no SS - so I expect zero.
DGF - already filed 2019 return. Has over 2500 SS, but only owed 973 taxes, so assume the check will be for 973.
Her son - no effective income for 2018, has over 2500 in 2019, but return not filed yet. His father claimed him in 2018, but can't in 2019, but his income over the limit. So due to lack of timeliness in filing in 2019, it sounds like no refund for him.
Does the above make sense?
__________________
TGIM
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03-25-2020, 02:48 PM
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#35
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Full time employment: Posting here.
Join Date: Jun 2014
Posts: 518
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Quote:
This year, you’ll be able to take a coronavirus-related distribution of up to $100,000 from your retirement plan or IRA without the 10% early withdrawal penalty, according to the most recent version of the bill.
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Lovely... You can withdrawal your 401k after one of the biggest drops in the market without penalty...
From a pure selfish point of view, I'm just glad they took out the part about no dividends.
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03-25-2020, 02:57 PM
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#36
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Recycles dryer sheets
Join Date: Oct 2017
Location: Silverton
Posts: 176
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Do pensions qualify as income for the purposes of this bill?
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03-25-2020, 03:50 PM
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#37
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,674
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Some last minute disagreements over the amount of unemployment compensation in hte bill are holding up voting in the Senate.
Aside from that, this article presents the clearest list of the bill's provisions that I have seen: https://www.journalofaccountancy.com...rovisions.html
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03-25-2020, 04:06 PM
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#38
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Confused about dryer sheets
Join Date: Apr 2014
Location: Rogue River
Posts: 7
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Hi, cathy63 and others:
I followed the link to find this: "The bill temporarily suspends the required minimum distribution rules in Sec. 401 for 2020."
While that *seems* to be pretty broad, I'd sure appreciate a bit more explanation in non-CPA language. ;-) Thanks!
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With respect to the helicopter money....
03-25-2020, 04:28 PM
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#39
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
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With respect to the helicopter money....
From the above referenced summary:
Quote:
Recovery rebates: The bill provides for payments to taxpayers — “recovery rebates” — which are being treated as advance refunds of a 2020 tax credit. Under this provision, individuals will receive a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child. The credit is phased out for taxpayers with adjusted gross income (AGI) above $150,000 (for joint filers), $112,500 (for heads of household), and $75,000 for other individuals. The credit is not available to nonresident aliens, individuals who can be claimed as a dependent by another taxpayer, and estates and trusts. Taxpayers will reduce the amount of the credit available on their 2020 tax return by the amount of the advance refund payment they receive.
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__________________
*********Go Astros!*********
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03-25-2020, 04:42 PM
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#40
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Recycles dryer sheets
Join Date: Oct 2017
Location: Silverton
Posts: 176
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Thanks for the link. If I am reading the article correctly this appears to be an additional 2020 tax credit with an advance refund that will zero out on the 2020 tax liability due in 2021 if taken now. If it is simply an advance on the 2020 refund it is not nearly as desirable. I'm still looking for clarity about pensions qualifying as income for this tax credit. It seems that it does. Since we have already filed our taxes this year the IRS will use our 2018 taxes to determine if we qualify. Or will we be able to wait for the next tax season?
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