Top 5 Tax Planning Strategies During COVID-19 April 22, 2020 We know these are challenging times and that there has been a lot of news out there regarding the coronavirus (COVID-19) and how the new legislation may impact your individual financial situation. As such, at KatzAbosch, we wanted to provide you our top 5 tax planning strategies to consider during the current situation. These strategies may help your financial situation or allow you to help your favorite cause. They are as follows: Consider certain coronavirus-related withdraws (up to $100,000) from retirement without the 10% penalty. Disrupting the accumulation of retirement assets with loans and hardship withdrawals is generally discouraged. However, if a withdrawal is needed taxpayers may avoid taxes if the money is returned to the retirement account in three years; if not, the taxes can be spread out over three years beginning in 2020. Look at your Required Minimum Distributions (RMDs). RMDs are waived for certain plans in 2020. The waiving of RMDs gives account owners a “free year” of tax planning and grants reprieve for retirees who might otherwise be required to sell low and take distributions while the stock market has experienced a correction. This might be a good time to consider a ROTH conversion. This is a proactive strategy you might use while asset values and tax rates are relatively low. Due dates for contributions have been extended. You may want to leverage the next few months to add to your accounts. The deadline for making contributions to a health savings account, IRA, or for an employer to make contributions to its workplace-based retirement plan on account of 2019, is extended to July 15, 2020. You may want to consider increasing your cash donations for your favorite causes. The adjusted gross income (AGI) limitation on charitable donations increased to 100% for a cash contribution in 2020. These changes allow taxpayers to take a larger deduction for charitable contributions than would normally be available. However, it is important to note that the increased limits under the CARES Act only relate to cash contributions as opposed to donations of stock, real estate, or any other non-cash items. Every person’s financial situation is different. We highly encourage you to work with your trusted advisor to understand how to leverage the above items to meet your financial goals. If you have any questions please reach out to a KatzAbsoch representative. About KatzAbosch: Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As an accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal and a Top Workplace four times by The Baltimore Sun.