Economic Impact Payment still within reach.

by Maria Szobi

Do you have your heart set on that $1,200 stimulus from the U.S. government that has slipped away from you this year?

If you think you can qualify for this cash payment on your 2020 tax return, you better start planning now.

1.      Monitor your income! To qualify for the full $1,200 award for each individual filer, your income needs to be below $75,000 (single filer) or $150,000 (married filers).

2.      Assess income from your investment portfolio - perhaps wait to sell those stocks in January rather than in December, especially if you are close to the phase-out amounts.

3.      Take advantage of all pre-tax savings accounts such as your IRA, 401(k) and Health Savings Account.

4.      Forego IRA distribution in order to keep your income low. For retired individuals, the CARES Act eliminates the required minimum distribution requirements in 2020. If the stimulus payment knocks on your door, look at your IRA distribution and, if needed, leave the money in your IRA account.

5.      Re-evaluate claiming college students as dependents, especially recent graduates. Self-supporting students may be eligible for their own stimulus payment even if they do not need to file their own 2020 tax return.

Reach out for more details and other planning strategies.