Category Archives: Tax Related

April 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our April 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

April – 2020 Video (YouTube)

 

 

Financial Planning Tip  –

Care Act and More Care Act

Thank you all for reading and sharing Posts… we deviated from the usual M-W-F schedule due to the massive amount of information and changes associated with the Care Act… again, thanks for your kind words, sharing and your time!

April Posts

Capital Market Comments – SAME AS LAST MONTH

Unknown that will eventually be Known

Unique to this slowdown is that it is needed and self designed.

In the prior two slow downs, the economy was stretching the limits of the system and slowed with many other outside items adding to the decrease.

This event, while unknown at the moment, will be very measurable, likely more than any recent slowdown.

The speed of the slowdown may lead to the speed of the recovery.

The stimulus being put into the system is large by any measure and will eventually gain traction.

Have a Great Day – Talk to you at the end of May!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Federal Income Tax Filing Reminder – Tax Delay Q and A – State Income Taxes With Complications

Today was the scheduled regular Tax filing date. Thankfully the Federal Government, on March 21, 2020 announced we all have received a 90 day delay on our REGULAR Federal Income tax…

From the IRS announcement

“Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.”

If you have a refund and made less or the same in 2018 as 2019, then you can file. As a planning reminder… about 90% of the population is to receive a Recovery Rebate of $1200 + $500 per child under age 17… BUT those are phased out…

The applicable AGI phase out threshold amounts are as follows:

  • Married Joint: $150,000
  • Head of Household: $112,500
  • All Other Filers: $75,000

CARES-Act-Economic-Relief-Proposed-Taxpayers-Refundable-Tax-Credits

If you are in the phase out range and if you have not filed your 2019 return, check to see which is lower, your 2018 or 2019, and if your 2018 is lower, do not file your 2019. Conversely, if your 2019 is lower file it immediately! You likely will not have to pay until the extended deadline of July 15, 2020 (Double check with your Tax Professional!)

Back to the Regular Extension Update

This nice Q and A from Turbo Tax

  • Do I need to file an extension to file past April 15?  No, you do not need to take any action. The July 15 extension applies to all taxpayers automatically.
  • Will the extension of the tax deadline delay my tax refund? No, the IRS expects to continue to process refunds as normal but encourages all taxpayers to file now.
  • Do I have more time to contribute to my IRA? Yes, you now have until July 15, to make a 2019 contribution to your IRA.
  • Will the deadline for my state taxes also be extended? A majority of states are conforming to the new July 15 tax deadline. However, some states have different deadlines and guidance. To find out the deadline in your state, click here

States with Challenging Time Frames at this time

Most all states but the following are either non state income tax states or are following the same extension date ….(no idea why any state would not follow the rest of the country … digressing)

Hawaii July 20
Idaho June 15
Iowa July 31
Mississippi May 15
New Hampshire June 15
Virginia May 1 to file; June 1 to pay

From AICPA for more exact information.

Again … especially when dealing with the state information, this is changing quickly and may change again, so please check your respective state taxing authority.

Bottom line most have some type of relief, although the calendar complicates in certain states!

Have a Great “Updated Tax Extension Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

March 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our March 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

March – 2020 Video

Financial Planning Tip  –

Tax Filing/Payment Due Date Extended

  • This from the IRS Announcement:“Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

    The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.”

Capital Market Comments

Unknown that will eventually be Known

Unique to this slowdown is that it is needed and self designed.

In the prior two slow downs, the economy was stretching the limits of the system and slowed with many other outside items adding to the decrease.

This event, while unknown at the moment, will be very measurable, likely more than any recent slowdown.

The speed of the slowdown may lead to the speed of the recovery.

The stimulus being put into the system is large by any measure and will eventually gain traction.

Have a Great Day – Talk to you at the end of April!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

 

CARE ACT Review (Please Share, Especially With Individuals Taking or Who May Think They Have to Take RMD’s) – “RMD Required Minimum Distributions Waived in 2020!”

The following is most fitting for someone who may have taken RMD’s in the past, or think they may have to start this year!

The Care Act was signed into law on Friday, March 27, 2020 and includes a provision Waiving ALL RMD’s for the year 2020.

Required Minimum Distributions (RMD’s) Waived in 2020

All RMD’s for any and all mandatory plans are waived as of 2020.

This includes all types of RMD’s including those with the five year rule.

Next year will not mandate a doubling or catch up of the RMD.

Next years RMD will be on the higher mandated level, but again will not cause a duplicate/catch up.

Planning Tip:

Just because you do not have to take your RMD, does not mean you necessarily need to stop. Those taking regular monthly distributions may continue to do so. Those with larger pools of IRA type of assets may want to continue to do so, maximizing current income tax brackets. Those having no need or desire to take their RMD may want to happily skip this year!

Have a Great “Waived RMD” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

CARE ACT Review (Please Share, Especially With Displaced Self Employed) – “The Pandemic Unemployment Insurance!”

The following is most fitting for someone displaced who is self employed!

Examples Include: Massage Therapist, Sports Instructors, Solo Medical Practitioners 

The Care Act was signed into law on Friday, March 27, 2020 and includes a provision called The Pandemic Unemployment Benefit – specifically for The Self Employed.

The Pandemic Unemployment Benefit

BREAK IN: At the time of writing this post, the Dallas Fort Worth Area are NOT allowing enrollment to this benefit at your local office as they are directing all to the Texas Website. Not surprisingly, they are very busy and the site is even having functioning problems. 

BREAK IN UPDATE :  It appears Texas is not ready yet and they are asking you to sign up for email notification…. Those in other states, suggest you check your states Twitter Feed for similar instructions!

img_6403

A New Pandemic Unemployment Benefit available to those effected by the Corona Virus.

This benefit is additionally available to those that may not have had access before, mainly self-employed individuals. (Normally Self Employed are not eligible for ANY type of Unemployment benefit.

This new benefit is $600/week and lasts for four months or until your displacement is over, whichever occurs first.

There is also the elimination of the first week waiting period, allowing those immediate access if needed.

Individuals already receiving Unemployment benefits will begin receiving this additional benefit with no offset of their prior benefit occurring effectively making this a complete bonus benefit.

This is a Federally backstopped program that is administered by each State, so the state will issue these benefits and there will be variances among different states.

Have a Great “Pandemic Insurance Benefit” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

CARE ACT Review (Please Share, Especially with Someone You Know Who May Have Recently Moved) – “The Recovery Rebate!” – IMPORTANT *Update Your Address if You Recently Moved*

This is the first of a Multiple Part Series (4 or 5) on the CARE ACT … done in order of most touched by the bill. Due to the unique nature of the bill, (Far Reaching, Confusing, but needing expedited delivery and explanation), I am asking you share this with those that may be in need or find it helpful by pushing it forward to others via email.

The following is most fitting for someone you know that may have recently moved!

Over 90% of US tax payers will receive the following Recovery Rebate,making backlog and loss certain, the more streamlined we can be, the more help that will occur. 

The Care Act was signed into law on Friday, March 27, 2020 and includes a provision called the Recovery Rebate.

Break In : If you have moved or changed your bank account since your most recent Tax filing you need to file FORM 8822 to notify the IRS of your correct address.

The Recovery Rebate – Estimated 90% of Tax Payer Participation

Each person to receive $1200, kids UNDER age 17 credited to parents at $500 each, no limit in headcount.

This Rebate is NOT TAXABLE!

The payout is likely to be sent out end of April or early May!

Social Security recipients will receive theirs via their direct deposit account. Non Social Security recipients will receive their Rebate via the last known account on either your 2018 or 2019 tax return, whichever is more recent or directly to the address on file.

A letter will be sent to the last known address of your most recent tax return hopefully within two weeks of the bills signing with instructions on your calculation AND how the US Government intends to send you the rebate.

If you have moved recently or after you most recent tax filing date, YOU SHOULD FILE FORM 8822 ASAP for the IRS to update your address or you will likely not receive the notification letter, far complicating an already complicated situation.

Phase out

The applicable AGI phase out threshold amounts are as follows:

  • Married Joint: $150,000
  • Head of Household: $112,500
  • All Other Filers: $75,000

This phase out is based on either your 2018 or 2019 tax return, whichever is most recent. If your income exceeds the threshold and you are phased out completely, and your 2020 income is below the threshold when you file your 2020 tax return, you will receive your Recovery Rebate at the time of your 2020 filing.

Should your 2020 income rise above the thresholds but based on your prior years income you received the Rebate, YOU GET TO KEEP THE REBATE WITHOUT PENALTY OR TAX!

Planning Tip for those near or in the Phase Out Thresholds

If you have not filed your 2019 return, check to see which is lower, your 2018 or 2019, and if your 2018 is lower, do not file your 2019. Conversely, if your 2019 is lower file it immediately! You likely will not have to pay until the extended deadline of July 15, 2020 (Double check with your Tax Professional!)

CARES-Act-Economic-Relief-Proposed-Taxpayers-Refundable-Tax-Credits

Have a Great “Recovery Rebate” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

New Tax Filing/Payment Date … Scammer Alert – Be Careful

On Saturday, the normal Mid-April tax day was extended to July 15 and would also include regular ES Payment extensions as well.

Extension to Regular Filing DateIRS logo

This from the IRS Announcement:

“Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.”

Updated Scam Alert

The bad guys are taking advantage of the current situation by sending emails related to the Virus… I have personally received over a half a dozen so far, some very clever.

We have also been warned by our security advisers to be on the watch….

We wanted to give you a heads up…

  • Take a quick moment to slow down and double check your emails and texts for the time being (hurried answers or clicks are just what they are looking for!)
  • Be EXTRA careful on any email you may receive
  • Do not open any unusual Zip or hot-linked texts
  • Double check the from email address on ANY unusual email – read carefully, they again are, clever

Have a Great “Tax Extended, Scammer Watch” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Lucky Three it Was (Corrected 1099), Green Light for Early Filers… Tax Update… Child Tax Credit Delayed Filings and Refunds

Down from hundreds just a few years ago, on Friday, as mentioned in the break in announcement, there were only THREE Corrected 1099’s in the initial corrected run.

We have touched base with you lucky ones and as a side note the corrections were small.

Green Light for Early Filers

Green Race Flag

Ok to File !

For those early filers that have patiently waited for our Green Light to file…

Green Light! You may go forward and file!

Fraud Causes Possible Delays

Earned Income Tax Credits and Child Credits can frequently result in an extra Refund…

In recent years, fraudsters have taken notice and the IRS has initiated laws to prevent this abuse.

Due to the abundance of fraud and the laws fighting these fraudsters, the IRS has issued a statement that refunds and filings will be delayed.

No need to rush your filing if you have multiple child credits or earned income credits… Early to Mid March is the quickest it will be processed…

Coincidence from Q2 2020 Newsletter

Our editor has a long article that deals with the IRS, and Audits which we previewed here.

The following graph seemed confusing to us, so we left it out … of no coincidence now, given the above notification, the largest number of Audits, and successful audits, have dealt with the Earned Income Tax Credit…

EIC Audit 2017 and 2018 Filings

Needless to say if you have Child Tax Credits or EITC’s make darn sure you dot the i’e and cross the t’s … bad folks in front of you have created concern for the IRS!

Have a Great “Green Light” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Corrected Tax Forms Update, First Round Due Today, Then Every Two Weeks – Friday

Break In – We had three (you lucky ones have already been notified) corrected’s as of this writing, and Corrected’s appear to have been dropped first thing this AM… those waiting the Green Light, we will update first thing Monday- but so far so good!

 

Later today, maybe even tonight, the first round of Corrected Tax forms, (1099 Misc) will occur… Our biggest correction year, about eight ago, led to over half receiving corrected Tax forms.

Steadily over the past years, this Corrected percentage has fallen (Hopefully not jinxing us!)

Those of you that have contacted us, and are idling at the finish/starting line, we appreciate your patience, but hold off just yet, as the number/% of actual Corrected Tax Documents will give us confidence in moving forward!2019 1099 Consolidated snapshot

New to the Corrected Schedule is an every two week Friday Corrected’s Drop! Nice… Prior years were randomly scattered and left us clamoring for the day… especially as we neared the April filing date.

Behind the scenes we can electronically check everyone at once throughout the day….in year’s past, while due today, they may not post until very late in the day or even tonight, leading to a delayed victory lap until tomorrow!

Fingers crossed for a small number corrected’s!

Here is a link to the 2019 Consolidated 1099 Handbook explaining the 1099 in great detail, for those so inclined…. using the diary feature here of our post for future reference.

Those of us lucky ones, we will reach out to you immediately!

Today is a Friday, and as we log another Rainy Cold Week for the record books… Spring, We Welcome You!

Have a Great Weekend and Talk to you Next Week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Tax Forms Update, Reminder EVERYONE Receives a Paper Copy, ETF Preview … Friday

While the unofficial due date, as mentioned last week here, is next Wednesday February 12th, forms are dropping day by day.

As a reminder, EVERYONE will receive a paper copy of these forms, electronic versions will be posted as soon as they are mailed out.

The Whole Enchilada form, AKA Consolidated 1099 which includes the following:

Form 1099-B, Form-DIV, Form 1099-INT, Form 1099-MISC, and Form 1099-OID

This will be the form that is the last to arrive, due to so many moving parts. Donald the Brian spent over a month in the fall last year confirming basis information to help thwart needed corrected forms… but they may still occur as each investment entity may also have a correction, spurring a completely new Whole Enchilada Consolidated 1099.

If there were less than $10 worth of activity, the IRS does not care and as such a 1099 will not be sent. Alert..this could happen easier than you think, even if the account had sizable value, but little interest or dividends and no sales!

Reach out with any questions!

ETF

Working on a deep dive, likely multi-part Article for the Newsletter about ETF’s … the more stats we find, the more interesting the Article is getting… Ya Mrs. Cain, you were right.. we would need to know how to do that extensive research paper…sure it easier with the web… Look for abbreviated posts here in the not too distant future!

Weekend Almost Here

Today is a Friday…. some unusually cold weather this week… maybe nearing the last way down here in the south…

This from a relatives front porch who is actually south of Dallas… we had none here!

20200206_143214712_iOS

Know you guys up north see this constantly, but not so much in our neck of the woods anymore…novelty remains here for sure!

Have a Great Friday and Super Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents