Tim Thompson CPA - June 2020

Things Might Be Uncertain But You Don’t Have to Face the Future Alone

knowing that something is coming our way, we can better brace ourselves, and I want to help you prepare for when it finally comes.

Despite being a little stuck right now as we wait for guidance from the IRS, there are a few things I predict will happen in the future. The first involves people’s individual retirement accounts (IRAs). Many people across the country have pulled from their retirement funds in order to put food on the table. Already, Congress has declared that anyone who is forced to do this won’t be penalized for withdrawing due to COVID-19. One minor problem that may come with this, though, is if someone forgets to tell their IRA company they’re taking the money out because of the pandemic — there are a lot of small formality steps. However, the bigger problem lies in whether or not they will be taxed. Not owing the penalty doesn’t necessarily mean they won’t owe tax. There is a flip side to this. The IRS may say that if someone can repay what they’ve taken out, they won’t be taxed. For the folks who do taxes for a living, this sounds absolutely fantastic, but then there’s the issue of how that’s going to be implemented on the return. Additionally, there may be some confusion with the benefits businesses received during the spring. The IRS has said that the Paycheck Protection Program loans that businesses receive to cover employment costs won’t be written off. In other words, they become taxable, which can have a significant impact on those businesses. However, when this newsletter is released in June, this may not be the case. The truth of the matter is that no one knows for sure what’s going to happen. It’s likely that people won’t know exactly what their tax situation will be until next year or even the year afterward. But that doesn’t mean we can’t figure it out together. As information continues to change, I’ve been staying as up to date as I can to provide my clients and my readers with the latest information. I’ve kept a continual flow through social media, including Facebook Live, YouTube, and Twitter, where I’m trying to address as many common concerns as I can. I encourage you to follow me on any of my platforms to stay as informed as possible. If COVID-19 has left you in a tax bind, whether that’s this year, the next, or the year afterward, reach out to me and get on my calendar. We can start working on a plan to get things back in order. At first glance, things can seem incredibly unsure and messy, but together, we can work through it. The pandemic has left all of us a little worse for wear, including our financial state. It’s my goal to help you get things running again. Don’t stress about your taxes on your own; I can answer any questions you may have, and I’m ready and willing to sit down with you for a consultation to get you through this.

E v en though it’s been several months since the pandemic first came to the U.S., we’re all still living in uncertain times. Most of the world’s population spent the spring reading reports

and pieces of information that were given to us on a day-to-day basis. Not knowing

what lies ahead is a terrifying thing, and that uncertainty is likely going to continue in the next few months or even years. However, you don’t have to go it alone.

Right now, many of us are waiting to hear from the government or, in my case, the IRS. Even though things are still uncertain, we do know that the pandemic will impact our lives in one way or another, and that includes our taxes. At the time of this writing, we don’t know what is going to happen or how big of an impact it will have on us in the upcoming years. This is a terrifying aspect for many people, especially when taxes already make people a little anxious. But by

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