Preservation | Family Wealth Protection & Planning

Pursuant to authority granted to the Secretary of the Treasury by President Trump on March 13, 2020 in an emergency declaration, the Treasury and IRS have released a series of Notices postponing both the due date for filing Federal income tax returns, as well as making Federal income tax payments, from April 15, 2020 to July 15, 2020.

On March 27, 2020, the IRS published Notice 2020-20 postponing the deadline to file Forms 709, gift and generation-skipping transfer (GST) tax returns, along with any associated gift and GST tax payments, from April 15, 2020 to July 15, 2020. (see the blog discussing this in more detail here).

President Trump signed into law on Friday, March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act, to help individuals and businesses affected by COVID-19. This legislation has brought about sweeping changes meant to provide relief to individuals and businesses. As part of the CARES Act, certain changes were made with respect to tax benefits to incentivize charitable giving.

$300 Cash Contribution Deduction. Beginning in 2020 and each year thereafter (this is not limited to only 2020), individuals can take a $300 above-the-line deduction for cash contributions to charities, regardless of whether or not the individual itemizes deductions.

This is the fourth in a four-part blog series on the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The first three installments can be read here.

An area of estate planning that is impacted by the changes in the recently enacted SECURE Act is the use of qualified charitable distributions (“QCDs”). A QCD is a distribution from an IRA (up to $100,000 per year, per individual) made directly to an eligible charity.

Those 70½ and older may continue to make QCDs to public charities. A QCD will count toward an individual’s RMD requirement and generally will not trigger an income tax on distribution. While the age to begin taking RMDs was raised to 72 under the SECURE Act, the age to make QCDs remains unchanged at 70½. Because QCDs are not included in income, they are typically more tax-efficient than taking a charitable deduction.

While the outbreak of the COVID-19 coronavirus has certainly brought a sudden dramatic change to our daily lives, there is still a continuous need for legal work. Many legal documents require notarization, and even in some cases witnesses, to take effect. With the various levels of governments now requiring “social distancing” and instituting shelter-in-place or stay-at-home orders, the normal rules that require a signer to be in the “presence” of a notary or witness have been put into question.

This is the third in a four-part blog series on the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). Parts 1 and 2 can be read here. The final installment will cover how the SECURE Act affects Qualified Charitable Deductions.

As discussed in previous installments of this blog series, after the death of a retirement plan participant or IRA owner, non-eligible designated beneficiaries of a retirement account (other than a Roth) will experience an acceleration of taxable income and the loss of tax-deferred growth that was available before the recently enacted SECURE Act. This is due to the elimination of the life expectancy, or stretch, payout. If it is important to you to minimize the additional future income tax caused by the 10-year payout, there are several items worth considering.

This is the second in a four-part blog series on the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). Part 1, an overview of the act’s key provisions, can be read here. Future installments will cover minimizing the tax burden of the act’s 10-year payout and how it affects Qualified Charitable Deductions.

This is the first in a four-part blog series on the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). Future installments will cover more details on the impact of the SECURE Act on estate plans, minimizing the tax burden of the act’s 10-year payout, and how it affects Qualified Charitable Deductions.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for March 2020. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for March 2020: 

How many times have you prepared your income tax returns for the previous year, only wishing you knew then what you know now, so you could go back and make more advantageous tax decisions? In most cases, you are stuck with the decisions you made before the new tax year began, even though you may not have all the relevant tax information available to assist with those decisions until several months into the new tax year. Too bad for you, says the IRS, unless you are an estate or trust.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for February 2020. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for February 2020: