In our previous blogs that have been penned during the “Corona-Crisis”, we have referenced the idea of finding the silver linings that we could identify, and trying to take advantage of those where it makes sense to do so.
Tax Payment Extension, but Not the Tax Return Filing Deadline:
Today, there is news of another silver lining of sorts: The IRS has confirmed as a response to the Corona Virus, that if you are a taxpayer who will be required to pay taxes, the due date for payment of those taxes is now postponed to July 15, 2020. Please note that your tax returns will still have to be filed by April 15th, but you have the option to delay payment on taxes owed without any penalties or interest applied. This deferment also applies to those who make estimated tax payments that are normally due April 15th: Those payments may also be deferred until July 15, 2020.
As far as we know, you should still plan to make any IRA/Roth contributions related to your personal tax return for 2019 by April 15th, unless the IRS clarifies further.
Stay tuned as more information rolls out about relief measures that are still in the works.
Roth Conversion Clarification and Charitable Giving:
We have also previously written about the “silver lining” for some investors to use these market fluctuations to evaluate with your advisors the advisability of a Roth Conversion that can be a significant benefit for some. A caveat for those individuals who are already subject to Required Minimum Distributions (RMD’s) from their IRA’s and other Qualified-types of accounts, is that all of your RMD’s must be distributed BEFORE you can complete a Roth Conversion.
So, for those of who have RMD’s (Required Minimum Distributions) that also take advantage of gifting some of your RMD to charities, we recommend that you step up the schedule of your charitable giving. We think this is a particularly awesome process to engage right now, responding to support charities that are on the front lines of trying to meet the needs of people at a time when the needs are bound to increase, whether they be for seniors, or other low-income individuals. Let’s all try to give NOW, when the need is the greatest, assuming you have access to cash. We do not recommend gifting stock to charities at this point in time, due to their depressed values.
If you have a Charitable Gift Fund (or Donor Advised Fund), we also recommend that you consider going ahead and making your charitable gifts from that fund now or in the near future.
The situation is still hard, but:
It can still be a bit nerve-wracking to watch market fluctuations like we do most of the day, no doubt. It is really difficult to watch the impact on investment accounts, and know that our clients personally feel that impact, and we feel their pain. Truly. We are not ever cavalier about that fact, and know that though they may feel concerned, they have chosen to trust us to help guide through this particular storm.
Some days we need to remind ourselves of this fact: The sun WILL rise again. We wholeheartedly believe that we WILL get through this, and come out the other side, and that the recovery is likely to be quick, when it happens. We still have the long view in mind, despite current challenges.
The artist Kelly Clarkson penned the lyrics to this song called The Sun Will Rise, and sometimes when I am questioning everything, I like to listen to it, and the powerful way that she sings these words lifts my spirits, and serves as a reminder of that truth.
Here are the lyrics:
I can see the wait there in your eyes
I can feel the thought in your sigh
Your knuckles are bruised from a losing flight
One way down a dead-end street
Broken glass underneath your feet
You think the day won’t break the sunless night
I’ve been in stuck in a storm before
Felt the wind raging at my door
Couldn’t move, couldn’t breathe, couldn’t find a way out
Somehow my clouds disappeared
Somehow, I made it here
Maybe just so you could hear me say
The sun will rise
The sun will rise (the sun will rise)
When you’ve lost your lights
The sun will rise
It’ll be alright
Although you can’t see it
So hard to believe it
Sometimes you just need a little faith (all you need is a little faith)
There’s an answer to your prayer
And I swear that there’ll come a day, yeah
The sun will rise.
You can listen to it on You Tube if you like: https://www.youtube.com/watch?v=5DsU6Ws5Qd4
