Planning as the pandemic response evolves

Bill Cass, CFP®, CPWA®

Bill Cass, CFP®, CPWA®, 07/15/20


With the growing debt burden due to the pandemic, it’s becoming more likely that federal taxes will increase. The government’s fiscal response to the pandemic also continues to evolve as Congress considers program extensions and enhancements.

In this dynamic environment, it may be time to consider tax-smart planning strategies.

In a recent webcast, Bill Cass and Chris Hennessey discuss topics under debate in Washington that may impact individual financial plans, and review planning considerations under the CARES Act.

Aid to businesses, individuals is evolving

When Congress returns to its session, several considerations for additional pandemic aid are on the table:

  • Extending enhanced unemployment benefits
  • Another round of rebate payments
  • Additional funds for state and local governments
  • Automatic forgiveness for certain PPP loans
  • Corporate liability protections
CARES Act considerations

Congress has already authorized trillions of dollars in fiscal aid to individuals and businesses under the CARES Act. A number of provisions made temporary changes to retirement accounts to help retirees and those approaching retirement. The suspension of required minimum distributions (RMDs) for 2020 under the CARES Act creates opportunities for Roth conversions. Some considerations:

  • For those with suspended RMDs, consider converting that amount to a Roth IRA instead
  • For business owners that experienced the adverse affects of the pandemic, consider applying net operating losses against income resulting from a Roth IRA conversion
Additional tax-planning topics
  • Understand the new 10-year rule applied on inherited retirement accounts and IRAs
  • Consider lumping charitable deductions
  • Tactical tax-loss harvesting
  • Timing of annual gifts to 529 plans
  • Advanced estate planning strategies to efficiently transfer wealth
Tax-planning is a year-round endeavor

With the 2019 tax filing delayed this year to July 15, taxes are top of mind for most investors. The changing landscape due to the pandemic underscores the fact that tax planning is an important consideration throughout the year. It’s never too early to start thinking about tax-smart strategies and discussing these ideas with a tax or financial professional.

Financial professionals: Listen to our wealth management professionals discuss the current environment and planning ideas in this webcast replay.

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