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Milestones to Retirement

Sincerely,

Campbell & Company Wealth Advisors & CPAs

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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Important Changes to the Child Tax Credit

Recently, there were changes made to the child tax credit that will benefit many taxpayers. As part of the American Rescue Plan Act that was enacted in March 2021, the child tax credit:

Amount has increased for certain taxpayers

Is fully refundable (meaning you can receive it even if you don’t owe the IRS)

May be partially received in monthly payments

The new law also raised the age of qualifying children to 17 from 16, meaning some families will be able to take advantage of the credit longer.

The IRS will pay half the credit in the form of advance monthly payments beginning July 15. Taxpayers will then claim the other half when they file their 2021 income tax return.

Though these tax changes are temporary and only apply to the 2021 tax year, they may present important cashflow and financial planning opportunities today. It is also important to note that the monthly advance of the child tax credit is a significant change. The credit is normally part of your income tax return and would reduce your tax liability. The choice to have the child tax credit advanced will affect your refund or amount due when you file your return. To avoid any surprises, please contact our office.

Qualifications and how much to expect

The child tax credit and advance payments are based on several factors, including the age of your children and your income.

The credit for children ages five and younger is up to $3,600 –– with up to $300 received in monthly payments.

The credit for children ages six to 17 is up to $3,000 –– with up to $250 received in monthly payments.

To qualify for the child tax credit monthly payments, you (and your spouse if you file a joint tax return) must have:

Filed a 2019 or 2020 tax return and claimed the child tax credit or given the IRS your information using the non-filer tool

A main home in the U.S. for more than half the year or file a joint return with a spouse who has a main home in the U.S. for more than half the year

A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number

Income less than certain limits

You can take full advantage of the credit if your income (specifically, your modified adjusted gross income) is less than $75,000 for single filers, $150,000 for married filing jointly filers and $112,500 for head of household filers. The credit begins to phase out above those thresholds.

Higher-income families (e.g., married filing jointly couples with $400,000 or less in income or other filers with $200,000 or less in income) will generally get the same credit as prior law (generally $2,000 per qualifying child) but may also choose to receive monthly payments.

Taxpayers generally won’t need to do anything to receive any advance payments as the IRS will use the information it has on file to start issuing the payments.

IRS’s child tax credit update portal

Using the IRS’s child tax credit and update portal, taxpayers can update their information to reflect any new information that might impact their child tax credit amount, such as filing status or number of children. Parents may also use the online portal to elect out of the advance payments or check on the status of payments.

The IRS also has a non-filer portal to use for certain situations.

Let us help you.

With any tax law change, it’s important to revisit your full financial roadmap. We can help you determine how much credit you may be entitled to and whether advance payments are appropriate. How you choose to receive the credit (partially advanced via monthly payments or solely on your next year’s return) could have many impacts to your financial plans.

Please contact our office today at 352.682.7365 to discuss your specific situation. As always, planning ahead can help you maximize your family’s financial situation and position you for greater success.

Sincerely,

Campbell & Company Wealth Advisors & CPAs

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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2020 Tax Return Refunds

Below is a chart regarding IRS refunds for 2020 Tax Returns filed in 2021.

Please remember – these are guidelines and not guaranteed dates. There are still many forms that have not been approved, therefore the returns cannot be filed yet. According to the IRS website the following dates apply:

February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.  

February 22. Projected date for the IRS.gov Where’s My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.  

First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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CLARITY ON THE RECOVERY REBATE CREDITS ON YOUR 2020 TAX RETURN

Many are unclear how the Stimulus payments will effect on your 2020 tax return so we wanted to summarize a few important reminders.

Frequently Asked Questions about the Stimulus Payments

Recap of the Stimulus payments

a. First Stimulus payment amount was $1200 Single Taxpayer ($2400 Married Filing Jointly, MFJ) plus $500 per qualifying child.

b. Based on 2020 income.  Adjusted Gross Income (AGI) limitation phase out begins at $150,000/MFJ or Surviving Spouse, $112,500 Head of Household or $75,000 Single individuals.  It is reduced by 5% for every dollar above threshold

c. Second Stimulus was $600 Single ($1200 MFJ) plus $600 per qualifying child; same income thresholds as above.

2. Is The Stimulus Taxable? No

3. Will I Have to Pay the Stimulus Back? If you received too much of a stimulus in 2020, you do NOT have to pay it back…consider it a free lunch.

4. Will the Government Send Taxpayers 1099Like Forms Showing Amounts Received?

a. IRS will issue Forms 1444 (for first payment) and 1444B (for second payment).  Your rebates are available on your Internal Revenue Service tax transcripts but they will not reissue these forms if you misplace them or need an additional copy. 

b. Individuals with an account on IRS.gov/account will be able to view the amounts of the Economic Impact

5. Is there a specific form to claim the rebate credit on my 2020 tax return?

a. There is not an official form to claim credit on 2020 tax returns.  Any Recovery Rebate, credit not received but entitled to, will be reported on Line 30 of 1040 based on how the questions are answered when your tax return is prepared.  

b. The first and second stimulus payments are treated as two separate credits when answering questions.

6. If I received the full stimulus payment amounts already, will I qualify for additional credits? 

a. You will not qualify for any additional credits.  However, partial stimulus payments received may still be eligible for recovery rebates (the difference)  if your 2020 income is lower than 2019 or 2018 (depending on which year was used by IRS)

7. I Didn’t Receive My 1st Stimulus Check Because of Unpaid Child Support, Can I Claim the Credit?

a. No

b.  Taxpayers who didn’t receive their first check because of unpaid child support will not be eligible to recoup the garnished amount through the tax credit.

c. The second stimulus check cannot be garnished due to unpaid child support

8. My 1444 and or 1444-B show that I Received the Stimulus Check But I Never Received It, What Do I Do?

a. If your payment was issued by direct deposit, your first step is to check with your bank and make sure they didn’t receive a deposit.

b. You should only request a payment trace to track your Payment if you received Notice 1444 or if Get My Payment shows your payment was issued and you have not received it.

c. Call the IRS at 800-919-9835

d. Mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund 

9. My Child Was Born/Adopted in 2020, Do I Get A Credit For Them?

a. Yes, but Children born or adopted in 2020 are eligible for the credit

b. You’ll need to report their SS# or adoption taxpayer identification number

c. You have until the due date (including extension) to

report their valid identification number.

10. My Child is No Longer a Dependent For 2020, Can They Get a Credit?

a. Yes, qualifications are based on 2020

b. If they meet all the other qualifications, they can claim an additional credit

c. “Can be claimed” not “Is claimed”

11. Does Someone Who Died Qualify?

a. No, a payment made to someone who died before receiving the payment should be returned to the IRS

b. For payments made to joint filers with a deceased

spouse who died before receiving the payment, return

the decedent’s portion of the payment

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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To PPP or not to PPP? That is the question.

What you need to know about this Economic Aid Act:     January 11: Opening for those who have not received PPP loan yet (smaller community banks will get priority) January 19: Opening up for second draw borrowers March 31: Deadline to apply, unless exhausted funds prior to deadline   Eligibility:   An applicant is generally eligible for a Second PPP Loan if the borrower: Was on operation on February 15, 2020; Previously received a PPP Loan (from M&T or another financial institution) and will or has used the full amount only for authorized uses by the date of disbursement of the Second PPP Loan; Has no more than 300 employees combined with affiliates (with some exceptions); and Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020; or if in operations for all of 2019, you may use annual gross receipts Has not nor plans to receive a Shuttered Venue grant*Additional eligibility requirements apply   Max Loan Amount & Term:   2.5X average monthly payroll, up to $2 million ($4 million corporate group cap)3.5X average monthly payroll for Accommodations & Food Services loans (NAICS code 72), up to $2 million5-year term   Eligible Expenses:   Payroll costs Business rent & lease agreements Business mortgage interest Business utility payments Covered operational expenditures Covered personal protective equipment (PPE) expenses Covered property damage expenses Covered supplier expenditures   Loan Forgiveness:   May be eligible for loan forgiveness if proceeds are used on payroll and other eligible business expenses; Employee and compensation levels are maintained; and Minimum of 60% must be used on payroll costs   At Campbell & Company, our core values focus on putting people first and doing what’s right. Our top priority is the well-being of our clients and their families, team members and communities we serve. We can offer our assistance in processing loan applications, and are here to answer any questions you may have regarding funding and forgiveness. Please feel free to reach out by phone or email. (352) 683-7365. 

*_Important Disclosures Regarding Email Communications_* Advisory services through Market Guard,a SEC Registered Investment Advisor. “Campbell and Company, Wealth Advisors and Certified Public Accountants” and Market Guard are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Market Guard. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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To PPP or not to PPP? That is the question.

What you need to know about this Economic Aid Act:     January 11: Opening for those who have not received PPP loan yet (smaller community banks will get priority) January 19: Opening up for second draw borrowers March 31: Deadline to apply, unless exhausted funds prior to deadline   Eligibility:   An applicant is generally eligible for a Second PPP Loan if the borrower: Was on operation on February 15, 2020; Previously received a PPP Loan (from M&T or another financial institution) and will or has used the full amount only for authorized uses by the date of disbursement of the Second PPP Loan; Has no more than 300 employees combined with affiliates (with some exceptions); and Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020; or if in operations for all of 2019, you may use annual gross receipts Has not nor plans to receive a Shuttered Venue grant*Additional eligibility requirements apply   Max Loan Amount & Term:   2.5X average monthly payroll, up to $2 million ($4 million corporate group cap)3.5X average monthly payroll for Accommodations & Food Services loans (NAICS code 72), up to $2 million5-year term   Eligible Expenses:   Payroll costs Business rent & lease agreements Business mortgage interest Business utility payments Covered operational expenditures Covered personal protective equipment (PPE) expenses Covered property damage expenses Covered supplier expenditures   Loan Forgiveness:   May be eligible for loan forgiveness if proceeds are used on payroll and other eligible business expenses; Employee and compensation levels are maintained; and Minimum of 60% must be used on payroll costs   At Campbell & Company, our core values focus on putting people first and doing what’s right. Our top priority is the well-being of our clients and their families, team members and communities we serve. We can offer our assistance in processing loan applications, and are here to answer any questions you may have regarding funding and forgiveness. Please feel free to reach out by phone or email. (352) 683-7365. 

*_Important Disclosures Regarding Email Communications_* Advisory services through Market Guard,a SEC Registered Investment Advisor. “Campbell and Company, Wealth Advisors and Certified Public Accountants” and Market Guard are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Market Guard. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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PPP Loan Forgiveness Update

The Small Business Administration (SBA) and US Treasury  has finally released the simplified PPP loan forgiveness application for those who received $50,000 or less.

Please see the article and form link below.

https://www.journalofaccountancy.com/news/2020/oct/ppp-forgiveness-simplified-for-loans-50000-less.html

Form 3508S

https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S.pdf

MyCampbellandCo.com (352) 683-7365 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 2202 Highway 44 W., Inverness, FL 34452

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Beyond the Money-Tip of the Week!

SSA.GOV – Advance Designation

If you become unable to manage, or direct others to manage, your benefits in the future, you will have peace of mind knowing that someone you trust may be appointed to manage the benefits for you.

It is optional, and you can update or withdraw your advance designation at any time.  If you choose to participate, we will send you a notice each year listing your advance designees for your review.

Social Security does not recognize Power of Attorney for negotiating legal payments- You must still apply to serve as his/her payee.

Capable adults

Emancipated minors

S/S Benefits

Social Security Income

Special Vet Benefits

Advance Designation allows you to choose an individual(s) you deem has genuine concern for your well-being to manage your benefits should the need arise.

If you are receiving benefits, you may advance designate at any time. Advance Designation is voluntary.

You may submit or change advance designations:

-By phone 1-800-772-1213 (TTY 1-800-325-0778)

-Online through your personal my Social Security account (https://ift.tt/28K92eQ )

-In person at your local field office (https://www.ssa.gov/locator)

-By Mail using Form SSA-4547-Advance Designation of Representative Payee

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

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Updated: CLIENT SBA EIDL (ECONOMIC INJURY DISASTER LOAN) ADVANCE & FORGIVENESS GUIDE

Great news! After the first round of funding; an additional $10 billion was allotted through the CARES Act to pay SBA EIDL applicants an advance on their loans. The application portal has re-opened, and will be available until December 30, 2020.

Who Qualifies for EIDL loans?

The EIDL was designed to help during times of economic disaster and the following organizations and individuals qualify: • Landlords/ Rental Property Owners • SBA Qualified Small Businesses • Private nonprofit organizations • Independent contractors • Sole Proprietorships • Tribal Businesses

How your Loan and Grant/Advance amount is determined

The SBA will review 3 years of historical data, as well as credit history and credit score to determine the amount your business is eligible for. The loan funds will not provide for lost sales.

Originally, the ‘CARES’ act provided that the EIDL Loan advance was for $10,000. Unfortunately, further guidance shows that this is not a flat $10,000 grant to all applicants. $10,000 is the maximum you could receive. The SBA is now providing $1,000 per employee, up to ten employees (If you’re a sole proprietor, you’re eligible for $1,000 Grant/Advance only).

Loan Grant/Advance Forgiveness

SBA refers to the EIDL as an advance; because it will be subtracted from the total loan amount you are issued. However, it was written into law as a grant. This means that the amount you are given through the program will not need to be repaid, even if your loan application is rejected. Keep in mind that your final loan will, require repayment. For businesses impacted by COVID- 19, the interest rates for EIDL loans will be 3.75% for small businesses and 2.75% for nonprofits.

Your entire Grant/Advance (up to $10,000) will be forgiven if you use the money for the following expenses:

• Consulting and Accounting Fees • Working capital to continue business operations; • Necessary expenditures to alleviate the specific economic injury suffered; • Sick leave to employees unable to work due to the direct effects of COVID-19; • Maintaining payroll; • Increased supply costs; • Rent or mortgage payments; and • Repaying debt that cannot be otherwise repaid due to revenue losses. • Importantly, EIDL proceeds cannot be used to refinance debt incurred prior to the disaster, repair physical damage, expansion or to pay dividends.

Applying for both the EIDL & PPP Loan

SBA guidance allows you to apply for a PPP loan in addition to an EIDL, so long as you don’t use the funds from each loan for the same expenses. In other words, you cannot ‘double dip’ for the same expenses. If you decided to apply for a PPP loan and use those funds strictly for payroll, you cannot subsequently use funds from an EIDL for payroll, as well. You also have the option to refinance an EIDL loan into a PPP loan; however, if you are approved for a PPP loan, the $10,000 grant/advance will be subtracted from your PPP forgiveness amount.

Keep precise records

Keep records of how you allocate these funds. Invoices for expenses paid, copies of canceled checks or other evidence payments. Be prepared to present these records to the SBA upon request, potentially in an electronic format.

The application is available on the SBA Website and can be found here: https://covid19relief.sba.gov/#/

If you have any additional questions, please call us at 352-683-7365 or email at Rachel@mycpagroup.com.

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Updated: CLIENT SBA PPP (PAYCHECK PROTECTION PROGRAM) FORGIVENESS GUIDE

Congratulations you have received your PPP funding, and want to maximize your loan forgiveness. The amount spent over the next 8 to 24 weeks is eligible to be completely forgiven IF you use these funds for the following expenses: payroll, mortgage interest, rent and utilities. If you received your loan proceeds prior to June 5, 2020 you have the option to choose an 8 week covered period or the lesser of 24 weeks or December 31, 2020. According to the ‘CARES’ Act, the forgiveness of a PPP loan is completely tax free. The sum of the following “costs incurred and payments made” will be eligible for loan forgiveness:

Payroll costs

60% of your loan will need to be allocated to your payroll expense. However, you are limited topaying an employee $46,154.00 during a 24 week payout period, and for eight weeks a maximum of $15,385. This is calculated based on the compensation cap for an employee who earns $100,000 per year. If you exceed the limit, the difference is not eligible for forgiveness. Current provisions do not limit the ability to increase an employee’s salary, or offer ‘hazard’ pay during the payout period.

Payroll costs that are eligible for loan forgiveness:

• Salary, wages, commission or similar compensation (SBA guidance states that payroll costs include all cash compensation, including a housing stipend or allowance) • Payments for vacation, parental, family, medical or sick leave • Allowance for dismissal or separation • Payments for the provision of group health care benefits, including insurance premiums • Payments for retirement benefits • State or local payroll taxes • Note: Covered benefits apply to employees only (not owners)

“Penalty” provisions include that the amount of forgiveness is reduced for those who made workforce reductions after February 15, unless reductions are restored by December 31, 2020. (i.e. you had 10 full time employees prior to COVID-19 but were forced to lay off 5 employees; Only half of your loan will qualify for forgiveness unless you hire 5 FTE back by December 31st).

Additional “penalty” provisions in the law state that if, during the payout period you have reduced the salary of any employee by more than 25% of what they earned in the first quarter of 2020, that reduction will result in a portion of the loan not qualifying for forgiveness, unless the salary is restored by December 31st. This provision applies to employees who, during 2019, did not earn more than $100,000 per annum.

The Safe Harbor provision provides that during the period between February 15, 2020 and December 31, 2020 if a borrower is able to document an inability to re-hire previously employed individuals or similarly qualified individuals, the borrower’s loan forgiveness amount will not be reduced based on their reduction in full-time equivalent employees.

In order to be eligible for full forgiveness, you cannot utilize more than 40% of the loan proceeds to pay expenses unrelated to payroll. You may still pay mortgage interest, rent and utility bills. However, if more than 40% of the loan proceeds are allocated to these expenses the excess will not qualify for forgiveness.

Mortgage Interest

Payment of interest on any mortgage obligation (not including any prepayment of or payment of principal on a mortgage obligation) that was incurred before February 15, 2020, is eligible for forgiveness. (Keep in mind the 40% rule)

Rent and Utilities

Any payment of rent under a leasing agreement in force before February 15, 2020, any utility payment, including payment for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020 is eligible for forgiveness. (Keep in mind the 40% rule)

Create an audit trail

We suggest having the PPP loan funds deposited into a separate business checking account, so that they are not co-mingling with other business funds. Only the expenses which qualify for forgiveness (payroll costs, rent, mortgage interest (but not interest on non-mortgage loans), and utilities) should be paid from this account. This will allow you to provide clear and concise records when it is time to apply for forgiveness.

Keep precise records

Keep records of payroll for the payout period, as well as invoices for health insurance, mortgage statements, a copy of your lease, copies of canceled checks or other evidence of rent and utility payments. Be prepared to present these records to your lender, potentially in an electronic format.

Contact our office and touch base with your accountant

Whether you have received funding through the PPP Program or the EIDL Program, contact your accountant to discuss the tax relief provisions provided through the ‘CARES’ Act. We are here to help you avoid issues when applying for loan forgiveness. Applying for both the EIDL & PPP Loan

SBA guidance allows you to apply for a PPP loan in addition to an EIDL, so long as you don’t use the funds from each loan for the same expenses. In other words, you cannot ‘double dip’ for the same expenses. If you decided to apply for a PPP loan and use those funds strictly for payroll, you cannot subsequently use funds from an EIDL for payroll, as well. You also have the option to refinance an EIDL loan into a PPP loan; however, if you are approved for a PPP loan, the $10,000 grant/advance will be subtracted from your PPP forgiveness amount.

7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556 MyCampbellandCo.com (352) 683-7365

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

The post Updated: CLIENT SBA PPP (PAYCHECK PROTECTION PROGRAM) FORGIVENESS GUIDE appeared first on Campbell & Company.

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Required Minimum Distributions

What is an RMD?

Under current law, holders of 401(k) accounts and traditional individual retirement accounts (IRAs) are required to withdraw a percentage of their account balances each year once they reach age 72.

Formerly the age was 70 ½ and that rule still applies if you attained age   70 ½ before January 1, 2020.  (SECURE ACT article)

This annual withdrawal is called a Required Minimum Distribution.

The RMD requirement assures that the money in tax-favored saving accounts is used to provide income during retirement.

The RMD is calculated so as to spread balances over the participants’ remaining lives. The penalty for failure to take an RMD is 50% of the amount that should have been withdrawn. 

New Rules for 2020 RMDs

The government waived required minimum distributions from retirement accounts this year as part of the CARES Act $2 trillion coronavirus stimulus package.

This is Good News because retirees are able to keep the money in these accounts so that their portfolios can potentially rebound from recent market volatility. This will benefit investors who have these accounts but don’t need to draw down their assets right away.

For those who already processed their 2020 RMD

For retirees who already took their RMD this year, they have the option to return that money by redepositing the distribution.  However, the redeposit must be done within 60 days of the withdrawal.  Putting the money back into the account is relatively simple.

Will two RMDs be required next year?

No.  The waived RMD is a suspension, not a postponement. RMDs for inherited accounts are also waived.

Qualified Charitable Distributions

What is a QCD?

A qualified charitable distribution is a withdrawal from an individual retirement arrangement (IRA) that’s made directly to an eligible charity. IRA account holders who were at least age 70½ as of Dec. 31, 2019, or who reach age 72 after this date, can contribute some or all of their IRAs to charity.

QCDs can be used to help keep your adjusted gross income (AGI) and taxable income within a desired range, because income from a charitable distribution “bypasses” your Form 1040.

This can help you manage your income thresholds. The maximum annual amount that can qualify for a QCD is $100,000 per individual.

Roth Conversion Opportunity

Now might be a good time to consider converting your traditional IRA or 401(k) to a Roth IRA.

Although, you will pay taxes on the money you convert, we are currently in a historically low tax environment.

Another benefit is that Roth accounts grow tax free and there are no required minimum distributions in retirement.

Every situation is unique and the rules governing retirement accounts can be complex.  For more detailed information, please reach out for a consultation.

Jan Carrier 7211 Hiawatha Pkwy., Spring Hill, FL 34606 MyCampbellandCo.com (352) 683-7365

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Update on the Payroll Protection Flexibility Act

Last night, the Senate passed the bill, which now heads to President Trump for his signature. If signed into law by the President, the bill known as the Payroll Protection Flexibility Act will make significant favorable changes to SBA’s Paycheck Protection Program that encompasses the following:

Extend the “covered period” under which small businesses can spend the loan proceeds from eight weeks to 24 weeks or until December 31, 2020.

Remove the limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees, or return to the same level of business activity as before the virus.

Expand the 25% cap to use PPP funds on non-payroll expenses, such as rent, mortgage interest, and utilities, to 40% of the total loan, which lowers the 75% requirement for payroll expenses to 60% to get maximum forgiveness.

Allow small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes, currently prohibited to prevent “double dipping.”

Extend the loan terms for any unforgiven portions that need to be repaid from two years to five years at 1% interest.

Give small businesses more time to rehire employees or to obtain forgiveness for the loan if social-distancing guidelines and health-related actions from the Centers for Disease Control and Prevention or other agencies prevented the business from operating at the same capacity as it had before March 1, 2020.

Extend the period for when a business can apply for loan forgiveness, from within six months to within 10 months of the last day of the covered period, before it must start making interest and principal payments. Under the new bill, PPP loan interest and payment of principal and fees will be deferred until the loan is forgiven by the lender.

Here’s a link to another article from the Journal of Accountancy.  Stay tuned for updates on the ever-changing SBA Payroll Protection Program. 

Jackie Campbell, CPA, CFP®, PFS CEO & President (352) 673-7365 MyCampbellandCo.com

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

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The CARES ACT and What That Means For Your Student Loans

The CARES ACT and Student Loans

During this time, people are looking for ways to help alleviate financial burdens.  The CARES ACT that was passed on March 27, 2020, provides several ways of relief and one of those includes relief for those paying Student Loans. Federal Student Loan principal and interest payments are suspended until September 30, 2020.

What does this mean for you?

Most federal Student Loan Lending companies are suspending monthly payment requirements and setting the interest rate down to 0%.

Whether you are unable to pay your loans or if you can afford to pay off more of your loan- this is beneficial because either way it is a win.

Next Steps?

Contact your Student Loan lending company

Ask them what all the options are for your loan and if monthly payments are suspended and if the interest rate is 0%

Payments made on or after March 13, 2020?

If you have made student loan payments on or after March 13, 2020, you can request a refund for those payments.

To do so, you will need to contact your Student Loan Lending Company and go through a refund request process.  So this 6 month relief actually can turn into 7 months of relief due to the CARES ACT.

Additional facts you should know:

If you have a private lender- you are not eligible

If you have a Federal Family Education Loan (FFEL) you are not eligible. Loan consolidation might be an option, but you should contact your lending company for all your options.

Department of Education states that auto payments will be suspended and nothing is required for you to stop these payments and they will automatically start back up again in October 2020.

If you would like to keep auto payments on and take advantage of the 0% interest and allow yourself to pay off your loan faster, then you will want to contact your lending company to turn auto pay back on.

To read more on the benefits from the CARES ACT and how they apply to you, read our recent blogs found here.

Brooke Campbell Gay (352)683-7365 MyCampbellandCo.com 7211 Hiawatha Pkwy., Spring Hill, FL 34606 2400 Merchant Ave., Odessa, FL 33556

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Client SBA EIDL (Economic Injury Disaster Loan) Advance & Forgiveness Guide

Great news! After the first round of funding; an additional $10 billion was allotted through the CARES Act to pay SBA EIDL applicants an advance on their loans. You have received your Economic Injury Disaster loan Advance, What’s next?

How your Grant/Advance amount was determined

Originally, the ‘CARES’ act provided that the EIDL Loan advance was for $10,000. Unfortunately, further guidance shows that this is not a flat $10,000 grant to all applicants. $10,000 is the maximum you could receive. The SBA is now providing $1,000 per employee, up to ten employees (If you’re a sole proprietor, you’re eligible for $1,000 Grant/Advance only).

Loan Grant/Advance Forgiveness

SBA refers to the EIDL as an advance; because it will be subtracted from the total loan amount you are issued. However, it was written into law as a grant. This means that the amount you are given through the program will not need to be repaid, even if your application is rejected. Keep in mind that your final loan will, require repayment. For businesses impacted by COVID-19, the interest rates for EIDL loans will be 3.75% for small businesses and 2.75% for nonprofits.

Your entire Grant/Advance (up to $10,000) can be forgiven if you use the money for the following expenses:

 Consulting and Accounting Fees  Working capital to continue business operations;  Necessary expenditures to alleviate the specific economic injury suffered;  Sick leave to employees unable to work due to the direct effects of COVID-19;  Maintaining payroll;  Increased supply costs;  Rent or mortgage payments; and  Repaying debt that cannot be otherwise repaid due to revenue losses.  Importantly, EIDL proceeds cannot be used to refinance debt incurred prior to the disaster, repair physical damage, expansion or pay dividends.

Applying for both the EIDL & PPP Loan

SBA guidance allows you to apply for a PPP loan in addition to an EIDL, so long as you don’t use the funds from each loan for the same expenses. In other words, you cannot ‘double dip’ for the same expenses. If you decided to apply for a PPP loan and use those funds strictly for payroll, you cannot subsequently use funds from an EIDL for payroll, as well. You also have the option to refinance an EIDL loan into a PPP loan; however, if you are approved for a PPP loan, the $10,000 grant/advance will be subtracted from the PPP forgiveness amount.

Keep precise records

Keep records of how you allocate these funds. Invoices for expenses paid, copies of canceled checks or other evidence payments. Be prepared to present these records to your lender, potentially in an electronic format. If you have any additional questions, please call us at 352-683-7365 or email at Rachel@mycpagroup.com.

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

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The ‘CARES’ Act – Available Programs

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

The post The ‘CARES’ Act – Available Programs appeared first on Campbell & Company.

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Client SBA PPP (Paycheck Protection Program) Forgiveness Guide

Congratulations you have received your PPP funding, and want to maximize your loan forgiveness. The amount spent over the next 8 weeks is eligible to be completely forgiven IF you use these funds for the following expenses: payroll, mortgage interest, rent and utilities. According to the ‘CARES’ Act, the forgiveness of a PPP loan is completely tax free. The sum of the following “costs incurred and payments made” will be eligible for loan forgiveness:

Payroll costs

75% of your loan will need to be allocated to your payroll expense. However, you are limited to paying an employee $15,385 during the payout period. This is eight weeks of payroll for an employee who earns $100,000 per year. If you exceed the limit, the difference is not eligible for forgiveness. Current provisions do not limit the ability to increase an employee’s salary, or offer ‘hazard’ pay during the payout period.

Payroll costs that are eligible for loan forgiveness:

Salary, wages, commission or similar compensation (recent SBA guidance states that payroll costs include all cash

compensation, including a housing stipend or allowance) Payments for vacation, parental, family, medical or sick leave Allowance for dismissal or separation

Payments for the provision of group health care benefits, including insurance premiums Payments for retirement benefits

State or local payroll taxes

“Penalty” provisions include that the amount of forgiveness is reduced for those who made workforce reductions after February

15, unless reductions are restored by June 30. (i.e. you had 10 full time employees prior to COVID-19 but were forced to lay off 5 employees; Only half of your loan will qualify for forgiveness unless you hire 5 FTE back by June 30th).

Additional “penalty” provisions in the law state that if, during the payout period you have reduced the salary of any employee by more than 25% of what they earned in the first quarter of 2020, that reduction will result in a portion of the loan not qualifying for forgiveness, unless the salary is restored by June 30. This provision applies to employees who, during 2019, did not earn more than $100,000 per annum. The ‘CARES’ act does not specify if this provision applies if you had to lay someone off and they choose not to return to work. Further regulations should provide guidance.

In order to be eligible for full forgiveness, you cannot utilize more than 25% of the loan proceeds to pay expenses unrelated to payroll. You may still pay mortgage interest, rent and utility bills. However, if more than 25% of the loan proceeds are allocated to these expenses the excess will not qualify for forgiveness.

Mortgage Interest

Payment of interest on any mortgage obligation (not including any prepayment of or payment of principal on a mortgage obligation) that was incurred before February 15, 2020, is eligible for forgiveness. (Keep in mind the 25% rule)

Rent and Utilities

Any payment of rent under a leasing agreement in force before February 15, 2020, any utility payment, including payment for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020 is eligible for forgiveness. (Keep in mind the 25% rule)

Create an audit trail

We suggest having the PPP loan funds deposited into a separate business checking account, so that they are not co-mingling with other business funds. Only the expenses which qualify for forgiveness (payroll costs, rent, mortgage interest (but not interest on non-mortgage loans), and utilities) should be paid from this account. This will allow you to provide clear and concise records when it is time to apply for forgiveness.

Keep precise records

Keep records of payroll for the payout period, as well as invoices for health insurance, mortgage statements, a copy of your lease, copies of canceled checks or other evidence of rent and utility payments. Be prepared to present these records to your lender, potentially in an electronic format. If you have a payroll that is due to be paid on the 57th day following the funding date, you may want to expedite it a day to fall within the 8 week payout period.

If you have any additional questions, please call us at 352-683-7365 or email at Rachel@mycpagroup.com.

7211 Hiawatha Pkwy., Spring Hill, FL 3466 MyCampbellandCo.com (352)683-7365

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529 Education Savings Plan

Education Savings

Responsibly educating the next generation is a noble goal and an important piece of the family financial plan puzzle. Fortunately, getting started is a simple matter.  There are many benefits including:

Tax Advantages

The growth of the money in the account is federal income tax-deferred.

When you’re ready to use the money for qualified education expenses it is free of federal taxes.

Versatility

Funds in a 529 account can be used to pay for qualified education expenses at most colleges, universities, vocational-technical schools and can also be used to pay for tuition at eligible K-12 schools.

Who can start a 529 Plan?

Just about anyone can open a 529 plan

You must be at least 18 years old

You must have a Social Security or Tax Identification Number

You must have a permanent legal U.S. mailing address.

Who controls the account?

The money is owned by the person who establishes the account.

The beneficiary can be a member of your immediate or extended family and the original beneficiary can be changed.

Who can contribute?

Just about anyone can contribute; yourself, a friend, a family member.  Some providers provide crowdfunding tools designed to make saving for education easier.

Is there a contribution limit?

Unlike many other tax-advantaged accounts, like IRAs and 401(k)s, there are no annual contribution limits on 529 Plans. With most plans, account owners can contribute $300,000 or more per beneficiary over the lifetime of the account.       

The overall balance of the account cannot exceed the expected cost of the beneficiary’s qualified higher education expenses, which vary by state.

Is there an earnings limit?

There are no income limits on those who contribute to the account.

How is the account invested?

Most 529 account providers offer a range of investment strategies

Age-Based Asset Allocations are portfolios based upon the beneficiary’s age and are automatically reallocated over time.

Goal Based Asset Allocations are portfolios designed to reflect the amount of risk you are comfortable taking, and the potential return characteristics you prefer.

Customized Strategies allow investors to choose from one or a combination of individual portfolios that range from growth allocations to more conservative income portfolios.

Reach out for more information on 529 Education Savings plans.

Disclaimer: Campbell & Company 2020-The information in this document is general in nature and the information is changing rapidly and there may be updated information as it becomes available from federal, state and local governments. We inform you that any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for the purpose of avoiding penalties or promoting, marketing or recommending to another party any transaction or matter addressed.

Jan Carrier Financial Advisor 7211 Hiawatha Pkwy., Spring Hill, FL 34606 (352) 683-7365

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