Did You Know…?

VNFA Q&A: Schedule K-1 Tax Documents
Can you spend some time talking about Schedule K’s, specifically for individuals such as myself who own stock in a company that mails this tax document to partners. It’s a little confusing as to what you report to the IRS and when you do report it.

In recent years, many investments that have been made by investors include limited partnerships or Master Limited Partnerships, especially in energy.  The partnership files a Form 1065 and reports the partners’ shares on a 1065 Schedule K-1. More recently, many of these partnerships are switching to corporations which will then convert to stock rather than partnership interests or units. Dividends paid on stock get reported on a 1099DIV.  K-1s may be issued to shareholders of an S Corporation via a 1120S K-1 or to beneficiaries of estate and trusts using 1041 K-1. Click here to read the full answer on our website.

Did You Know…?

Today is Giving Tuesday NOW – A day of global action for giving and unity in response to COVID-19.

In support of our community, VNFA is donating $1,000 each to the five non-profit organizations we have partnered with for the Volunteer Challenge these past five years.

Special thanks for Volunteer Center of the Lehigh Valley (volunteerlv.org) for aiding our team in making these connections. We hope to inspire as many people as possible to do what they can on this Giving Tuesday and every day.

We invite you to learn more about our partners:

Third Street Alliance for Women & Children – thirdstreetalliance.org

Cancer Support Community Greater Lehigh Valley – www.cancersupportglv.org

Second Harvest Food Bank – shfblv.org

Paxinosa Elementary (donated through Family Connection) – paxinosa.eastonsd.org (familyconnectionofeaston.org)

Northeast Community Center – neccbethlehem.org

Did You Know…?

Your client experience is our number one focus. Did you know, in addition to traditional phone conversations, our team is equipped with the technology, training and internal support to provide multi-party phone and video conferencing, online document collaboration, and digital forms/signatures? Let us know your needs and preferences so we can continue to enhance your experience while we are remote and moving forward.

Did You Know…?

Unfortunately, fraud related to the coronavirus pandemic is part of the new normal as many people are overwhelmed, stressed, scared and in need. We have collected some links to help you share to recognize and report these criminals.

CDC – https://www.cdc.gov/media/phishing.html

FBI – https://www.fbi.gov/news/stories/protect-yourself-from-covid-19-scams-040620

Federal Communications Commission – https://www.fcc.gov/covid-scams

U.S. Department of Treasury – https://home.treasury.gov/services/report-fraud-waste-and-abuse/covid-19-scams

Better Business Bureau – https://www.bbb.org/article/news-releases/21989-top-6-coronavirus-scams-bbb

U.S. Small Business Administration – https://www.sba.gov/content/beware-scams

AARP –https://www.aarp.org/money/scams-fraud/info-2020/coronavirus.html

Did You Know…?

News and information related to COVID-19 is being released and updated very rapidly. Our team has collected just a few of the latest links that we think may be most valuable to our clients.

Did You Know…?

Advance Health Care Directives COVID-19 Updates?
It is a good planning practice to regularly review (and update as needed) your estate planning documents. Do your instructions need to be updated to cover specific situations applicable to coronavirus?

For example, if your health directives indicate that you do not wish to be intubated or placed on a ventilator, you may not be able to receive the standard COVID-19 care. And if you were to require medical care, are those you have designated as your decision makers authorized to communicate digitally as they would not have the opportunity to appear in person?

As you consider these questions and review your documented wishes, be sure you make your advisors and other trusted contacts aware. For more information about advance directives in Pennsylvania, University of Pittsburg Medical Center website contains helpful resources – UPMC.com

Did You Know…?

The CARES (Coronavirus Aid, Relief, and Economic Security) Act
There is and will continue to be a lot of information available about the details of this 800+ page bill that was signed into law on March 27th. As your trusted team, we are analyzing how any relief items in the bill may apply to our individual clients and their financial planning moving forward. Here is a quick list of the most asked topics so far. Consult your advisor to learn more.

Individual Recovery Payments
The eligibility for and amount of payments being given to individuals is based on Adjusted Gross Income (AGI) reported on the latest tax return on file with the IRS – 2019 if that return has been filed, if not your 2018 AGI will be used. The one-time payments will be given based on the following thresholds: Married Filing Joint: $150,000; Head of Household: $112,500; All Other Filers: $75,000.

Required Minimum Distributions Waived
For 2020, all RMDs are suspended, including those for inherited IRAs as well as traditional IRAs of those over age 70½. For RMDs already taken in 2020, you have up to 60 days to return a distribution to an IRA or deposit it in another qualified retirement account.

Penalty for Early Retirement Distributions Waived
The 10% penalty for taking early distributions from qualified retirement plans, including IRAs and 401(k)s, is waived. The waiver applies to distributions taken between January 1, 2020 and December 31, 2020. Up to $100,000 of distributions can avoid the penalty.

Retirement Plan Loan Rules Modified
For those impacted by coronavirus allowed loan amounts are doubled to $100,000. The modifications include an increase to allow use of up to 100% of the vested balance, and loan payment may be deferred up to one year.

For individuals with Federal student loans, payments may be deferred until September 30, 2020. For small businesses, including self-employed, the CARES Act includes payroll tax deferrals in addition other available credits, loans and assistance.

Here are some of our top picks for articles to help you understand the basics of the CARES Act.

FORBES – The CARES Act Has Passed: Here Are The Highlights

NPR – What’s Inside The Senate’s $2 Trillion Coronavirus Aid Package 
READ: $2 Trillion Coronavirus Relief Bill
(includes a searchable widget of the entire bill)

INDUSTRY BLOG (Michael Kitces.com) –
Analyzing the CARES Act: From Rebate Checks To Small Business Relief For The Coronavirus Pandemic  

Did You Know…?

Defending Against COVID-19 Cyber Scams
The Cybersecurity and Infrastructure Security Agency (CISA) warns individuals to remain vigilant for scams related to Coronavirus Disease 2019 (COVID-19). Read more from the U.S. Department of Homeland Security.

Did You Know…?

In the last several weeks, interest rates have moved to record low levels. As a result, mortgage interest rates (which tend to closely follow long-term interest rates), have also moved to historic lows. According to Freddie Mac: “The average rate on a 30-year fixed mortgage was 3.45% during the week through Feb. 27, down from 4.35% a year earlier. The average rate on a 15-year mortgage fell to 2.95% from 3.77% a year earlier.” With rates trending down, you may want to consider refinancing existing mortgages. This choice will not be right for everyone. Please take the time to consider your individual financial situation and personal factors – for example, if you are at the tail end of your existing mortgage the refinance costs may be greater than the benefit, or it may not be in your best interest if you are possibly planning on moving in the next 5-7 years. Make sure you take all of your planning into account and consult with professionals before making any decisions. A good place to start would be running your numbers through the mortgage refinance calculator on our MyRetirementPro.com website.