Will I have to pay back the Stimulus money on my 2020 taxes?
No, that is a rumor stared by people that do not know any better.
There are no strings attached, and you will not have to pay it back.
Basically, the U.S. government labeled the stimulus checks as a “tax credit” so that it could use the IRS system to send out the checks.
Should I take a forbearance from my mortgage?
Some mortgage lenders are offering a 90 and even 180 day forbearance. Forbearance is not forgiveness, and it just extends the length of time to pay off your house. If, and only if, you need the money- then take the forbearance. If you don’t need the money, it is probably just not worth it.
Are required minimum distributions (RMDs) really suspended?
Yes, but only for 2020. RMDs for all retirement plans that you own or that you inherited RMDs that are due on both April 1, 2020, and December 31, 2020. Any RMDs that were already taken in 2020 (including 2019 RMDs that were withdrawn early in 2020) are eligible for a 60-day indirect rollover. You also have three years to pay their distribution back under these special COVID-19 distribution rules.
Is there a Tax Deadline Extension for IRA contributions?
- The 2019 Traditional and Roth IRA contribution deadline is now July 15th, 2020.
- The 2019 SEP contribution deadline is now July 15th, 2020 (or October 15th, 2020 if filing for an extension).
- The 2019 IRA recharacterization deadline is now July 15th, 2020 (or October 15th, 2020 if filing for an extension or amending your tax return).
Questions from Current College Students & Parents:
Most will not get a stimulus check, and their parents will not get $500 for them either. More here.
Yes, there are personal-finance media-stars recommending a gap year. That might be the right thing for some students, and a well thought out gap year can be a time for great personal growth.
For most families I recommend exploring online classes, still it’s a very personal decision that changes greatly with your exact situation. Many colleges are expecting a reduction in students this fall, and there are many schools that are already in financial trouble. This is also magnified with the problem of families not being able to visit campuses, the way we have done in the past. So, I do recommend putting deposits at more than one school.
Should I still pay my student loans?
Student loan interest is waived, and all the required payments are suspended until September 30th, 2020. You need to proactively call them, as not all loan servicers will do this automatically, use the words “coronavirus relief” and they are allowed to give you better options.
*If you were enrolled in public student loans forgiveness before march 13th, these months will still count towards total payments. But you still need to be classified as a full time employee during this time period. Submitting the documentation for PSLF for this year would be very wise, as loan servicers do not always handle things properly in subsequent years.
Student Loans are a far more complicated type of debt than mortgages. Some great Cares Act information about student loans is available here. As always, contacting a student loan expert pays for itself, many times over. The best ones are a Advanced Education Planner or a Certified Student Loan Planner.