This past week, during one of our TV watching marathons, my youngest son and I happened upon “The Wizard of Oz”.

When Glenda the Good Witch began her famous mantra to Dorothy of, “There’s no place like home. There’s no place like home”, I couldn’t help but think of the irony in hearing this famous one-liner right now.

After all, for now, home is the ONLY place for most of us. I don’t know about you, but my home is less than idyllic at this point. I think I need to channel my inner Glenda.

Home is usually the place where we feel most safe and at ease, yet the fact that we are forced to stay home because of COVID19 instead creates a dichotomy of sorts, where our being at home is the result of a precarious situation reaped with uncertainties and anxiety.

What can we do during these times to help us feel less anxious and more “at home”?  We’ve all heard the cliché “control the controllable”. What is controllable, or even worth controlling, will be different for everyone, but there are always some things that are within our control. We can let go of the rest, remembering to not beat ourselves up for whatever we miss. Whatever it is that will offer stability, a sense of normalcy or bring joy is what we focus on.

These have been some of my controllables:

• Cleaned out my closet. It helped declutter my mind and I had total control of every decision I made to keep or donate. Hey, control is control.
• Choose to binge watch only happy, funny or heartwarming things. I don’t need the added angst I get when I watch shows like Bluebloods. This, I can control.
• Set my alarm for the same time every day. Granted, some mornings I hit snooze more than others, but the attempt, and the control as to when I start my day, is there.

You may be thinking, “what does this have to do with my finances”?

Nothing. Absolutely nothing. Well, almost nothing.

I’ve already addressed market volatility and the stimulus bill in previous newsletters. I wanted this newsletter to acknowledge that right now, while we are in the thick of this, it’s not only about money and finances. And even in the “good times”, money issues are never black and white. There is most always an emotional component to money decisions. We make the best decisions by addressing the human side of things first.

I’ll end with a known fact about the human race.

We are a resilient and adaptable species. We are problem-solvers. There are already countless ways we have adapted as individuals, families and as a nation to a situation that 6 weeks ago we would have thought impossible to deal with. We will get through this and things will return to normal, because even a new normal eventually becomes normal over time.

Like a good thriller movie (or perhaps more accurately, a horror film), the suspense is over and Congress has passed the stimulus bill that was then signed by President Trump late Friday afternoon. It is officially called the CARES Act (free package of TP for anyone who can guess what the “C” stands for).
But who really CARES what it is called? We care what it will do.

Let me see if I can help sort this out a bit.

This bill is over 800 pages long and includes many provisions for both individuals and small businesses. I am going to focus today on the ones that affect us most as individual taxpayers.

Stimulus Checks:

• $1,200 for individuals; $2,400 for married couples
• Additional $500 per child UNDER age 17
• Amount is phased out based on your Adjusted Gross Income (AGI) in either 2018 or 2019, whichever tax return is the most current the IRS has on file.
• Phaseouts begin at AGI’s above:
  • $150,000 for Married Filing Joint
  • $112,500 for Head of Household
  • $75,000 for Single

A confusing part of this stimulus check is that although they will be determining the amount we get based off of 2018/2019 AGI, it is actually a 2020 rebate. For those that may be phased out either partially or in full based on their prior AGI but are now suffering hardship in 2020, you may still get a rebate if your 2020 AGI falls into or below the phase out ranges. You just won’t be getting it now when you need it most.

Unemployment:

• State unemployment benefits are $600/week more than “regular” unemployment
• This additional bonus payment runs for up to 4 months
• Overall benefits are extended by an additional 13 weeks
• Federal Government will pay to cover the one week “waiting period”
• Pandemic Unemployment assistance for those not eligible for unemployment
  • Contractors, self-employed, gig workers

FEDERAL Student Loan Relief:

• Payments and interest are deferred until September 30, 2020
• While not required to make payments, voluntary payments are allowed.
• Proactively contact your loan provider to pause payments, it will not happen automatically.

No Required Minimum Distributions (RMD’s) for 2020

• This includes IRA’s and employer plans
• Applies to Inherited IRA’s as well
• If subject to the 5-year rule, 2020 is ignored

Distributions from Retirement Accounts: aka  “Coronavirus Related Distributions”

• 10% Early Withdrawal Penalty is waived
• Not subject to mandatory withholding of taxes (usually 20%; this applies to employer plans)
• Up to $100,000 combined from IRA’s or employer plans
• Withdrawn in 2020
• WITHDRAWALS ARE TAXABLE INCOME, but eligible to be “rolled back in” to the account over 3 years. If this is done, an amended return can be filed to claim a refund for any taxes paid on the withdrawal.
• If you do not roll it back in, the income and resulting tax can be spread out over 2020, 2021 and 2022.

Assuming your 2020 income has be greatly affected and you would be taking this distribution due to a Coronavirus hardship, it may make more sense for you to include all of this income on your 2020 return. Your CPA will be able to give you guidance on this. Your advisor will give you guidance on whether it is good option for you given your overall financial circumstances.

These are just some of the major highlights affecting a vast majority of US citizens.

If you are unsure whether you will qualify for a stimulus check or what the amount will be if you do, shoot me an email at susan@newshorefinancial.com and I will run through the numbers with you.

All we can do at this point is keep hanging on, be patient with our families and strangers, control what we can control and let go of the rest.

With three teenage boys trapped at home, a clean kitchen is NOT something I can control right now and I’m really trying to LET IT GO!  What are YOU letting go?