UPDATE: March 27, 2020
The President signed the massive $2 trillion (with a T) bill that’s going to put money in your hands.
- You don’t sign up or have to do anything. Anyone who tells you they need your information to send you money is LYING and ITS A SCAM.
- If you included your bank information on your tax return you’ll get the money by direct deposit (the fastest). If not, you’ll get a check in a few weeks in the mail
- The amount/eligibility is based on your 2019 tax return AGI (adjusted gross income)
- If you haven’t filed your 2019 taxes yet, do it ASAP, but they’ll look at your 2018 tax return/AGI
- If you’re single and made less than $75,000 in 2019 you’ll get the full $1,200
- If you’re married (and file your taxes jointly) and made less than $150,000 you’ll get the full $2,400 ($1,200 each)
- If you file as “head of household” and made less than $112,500 in 2019 you’ll get $1,200
- You’ll receive an additional $500 for every child in the household
- If you made more than the limits listed above the benefit will be phased out
- If you made more than $99,000 single or $198,000 married, you’ll benefit is phased out to zero
There is not a corner of the country, or the world for that matter, not feeling the effects of the coronavirus outbreak. But I don’t have to tell you that, you already know it.
While the economy was humming along nicely just prior to coronavirus upending our daily lives, watching the stock market plummet a mear 12 years after the Financial Crisis in 2007-08 brings back some rough memories and emotions.
We’re barely a decade out of the Great Recession, much less a generation.
Congress and The White House are pushing out some serious legislation to keep the economy afloat while we figure this all out. It will help, but won’t magically make everyone and everything whole again overnight.
Here are details about what the heck is going on. Topics of discussion are:
- Federal taxes
- Paid leave
- Unemployment insurance flexibilities
- Student loan flexibility
- The volatile as ever stock market
First things first: Beware of scams! Verify everything. Don’t click on any links if you don’t know who it’s from.
Don’t believe an email or a text just because it looks or sounds legit.
Crises like this bring out the best in most people. There are so many wonderful stories of people helping people and coming together, even now when we’re physically apart.
BUT, despite all that, there are still SO MANY SHIT PEOPLE AROUND. The people who are trying to sell bleach and hand sanitizer for $100 a bottle have a very special place in hell reserved for them if you ask me.
That’s not capitalism, that’s a whole different ballgame. Assholitalism? I’ll work on it.
Satan is also holding particularly firey seats for the people who are using the potential of relief checks from the government and the (totally unrelated to all of this) Census to try and get your personal information to ultimately take advantage of you one way or another.
DO NOT LET THEM WIN!
Links to help you avoid scammers:
- FTC Consumer Information: Checks from the government
- FTC Consumer Information: Avoid coronavirus scams
- FTC Scam Bingo!
- ABC News: Law enforcement warns Americans of increasing coronavirus scams (including fake vaccines and testing kits!)
- Forbes: Watch out for these efforts to exploit the pandemic
The list could go on. Pick your favorite news outlet and I’m sure they’ve published content helping you avoid scams and fact check claims. Protect yourselves and your loved ones y’all!
The federal deadline to file 2019 income taxes has been extended from April 15th to July 15th. The payment deadline for federal income taxes has also been extended to July 15th.
That does not mean you have to wait until July 14th to file your taxes.
Especially if you’re expecting a refund, file your taxes now! Most refunds are still being issued within 21 days.
If your paycheck has been disrupted and you’re expecting a tax refund, file your taxes ASAP and get your money back!
This guidance is specific to federal tax filing. Check with your state concerning state tax filing to be sure you don’t miss their deadline.
For Small and Mid-sized Businesses
Headline and link to details: Treasury, IRS, and Labor announced a plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave.
For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave.
Employers receive 100% reimbursment for paid leave under the Families First Coronavirus Response Act. Health insurance costs are also included in the credit.
More details about the tax credits and implications concerning paid leave, health care coverage, and small business protection are outlined on the IRS’ website.
On March 12th, the Department of Labor announced new guidance allowing considerable flexibility for unemployment insurance benefits.
It’s important to note, each state operates its own unemployment insurance program but must follow the federal guidelines.
According to the Department of Labor’s website, three examples that now qualify for unemployment insurance benefits are:
- An employer temporarily ceases operations due to COVID-19
- An individual is quarantined with the expectation of returning to work
- An individual leaves employment due to a risk of exposure or infection or to care for a family member
On March 20th, President Trump announced federal student loan interest will be waived and payments may be suspended for 60 days.
All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency. This will allow borrowers to temporarily stop their payments without worrying about accruing interest.
This applies to federal student loans only, not privately held loans.
If you have a federal student loan, your interest will automatically go to 0% and no action on your part is required. If you need to suspend payments you need to contact your loan servicer directly.
More details and resources can be found on the U.S. Department of Education’s website.
It’s worth noting, that if you can still make payments on your student loan while your interest rate is at 0%, 100% of your payments made will go directly to the already accrued interest and/or remaining principal.
Payments made with 0% interest will make the overall life of your loan shorter. Before you stop payments just because you’re allowed to, it’s well worth making sure you can’t take advantage of this interest-free period.
If you do determine you need to stop payments, be sure to contact your loan servicer. Do not just stop payments without making the appropriate arrangements.
There’s enough sh*t going on right now, you don’t want to dent your credit score unnecessarily on top of everything else.
Answers to frequently asked questions about federal student loans can be found on the Federal Student Aid website.
Ok, let’s talk a minute about the giant pink polka-dotted elephant in the room, the stock market.
It’s not great. I know, that’s putting it lightly.
Here’s the deal though, if you sell right now all you’re doing is turning your unrealized losses into actual losses. If you leave it well enough alone you can ride the wave back up.
We don’t know when the wave is coming. It may be weeks, it could be years. That’s a tough pill to swallow. But it IS coming.
Selling right now and pulling your money out is selling low, when everything is on sale. The goal is to buy low and sell high.
Buy when it’s on sale, sell when it’s not.
Way easier said than done, right?! If it were that easy we’d all be Warren Buffett and he wouldn’t be an anomaly.
Timing the market is incredibly difficult. No one has a crystal ball. No one knows what it’s going to do next. In order to get it right, you have to time the market correctly twice, not just once!
You have to get in at the right time AND get back out at the right time. Or vice versa.
If you panicked and sold at or somewhere near the bottom in the 2007 crash, and then didn’t get back in, or waited too long to get back in, you missed one of the greatest bull runs ever and left a ridiculous amount of money on the table instead of in stuffing it in your pocket.
I know it’s easier said than done. I know every person’s situation is unique depending on portfolio size, savings, current financial situation, age, number of years to retirement, etc. etc. etc.
If you need the money right now that’s a different story.
Please please please don’t panic sell and solidify your losses. Make a non-emotional, logical, math-based decision from your prefrontal cortex human brain. If that brain decides you need to sell, then ok.
Don’t let your primitive, animal instinct, we’re all going to die brain make the decision. That brain doesn’t know anything about math or logic, it’s just trying to keep you alive. But it doesn’t have all the facts.
Now, this is much more than just a few dark clouds in the sky.
I’m not living in namby-pamby land over here.
I am however advocating that you make a logical decision instead of a strictly emotional one concerning your finances and their future.
In other news…
I’m not suggesting that everything is peachy again and it’s going to only go up from here. I am suggesting that the market is a fickle beast and you never know what’s coming next.
It may go down more. It may go up though, too.
The Market Always Goes Up
Below are two graphs of the Dow Jones Industrial Average.
The first is from Yahoo Finance, from Jan 1985 until Mar 25, 2020.
The second is courtesy of Mr. JL Collins and his Stock Series, from 1900-2012.
There are some pretty good dips sprinkled in there. However, you will notice the overall upward trend over both the last 35 years, and since the beginning (over 100 years…The Dow made its debut in 1896).
It doesn’t happen overnight, and the market is a very volatile place.
But, it will rise again.
If you sit tight and are in it for the long haul, this is very good news.