This morning I attended a webinar hosted by the Wyoming Business Council. Several participants including members from the health and business community at the state-level, were on the call to discuss the latest updates to permit certain businesses to open, as long as certain measures are followed. They also discussed the newly issued guidance around variance and exception requests that businesses can make.
Enough Cash to Last a Crisis
The economic uncertainty due to COVID-19 has caused strain on businesses and households alike. Two weeks ago I wrote about the CARES Act and the variety of funding vehicles being rolled out to businesses and families, such as rebate checks (starting soon), penalty-free retirement distributions, and loan and loan forgiveness programs for small businesses and sole proprietors. These efforts are sure to help most Americans.
Still, times remain uncertain. Those filing for unemployment benefits in the U.S. topped 17 million last week over the course of just a three week period. Hopefully those benefits come sooner than later, but on a broader scale this has me thinking about how important it is to have access to cash in times like these.
I’d like to take some time today to consider sources of cash to help you and your family whether the financial storm we’re in, and future storms yet to come.
How the $2 Trillion CARES Act Benefits Individuals and Small Businesses
Last Friday, President Trump signed into law a massive piece of legislation, titled the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law provides over $2 trillion (yes, trillion) of funding to everything from the health sector, state and local governments, large and small businesses, and of course, individuals and families.
How Does Saving For Retirement Actually Lower Your Taxes?
One of my favorite tax breaks is contributing to a tax-deferred account, like a Traditional IRA, SEP-IRA or SIMPLE IRA. Contributions to these accounts lower your taxes when the contribution is made, and allow you to defer (postpone) owing taxes on those contributions until retirement.
But I fear in the past I’ve given this same advice on my blog without thoroughly explaining how and why this actually works.
In today’s post, I’d like to answer two questions:
How exactly does contributing to a retirement account mean lower taxes today?
Why does that matter if taxes are still owed later?
Roth Conversions Are Amazing. Here's How They Work.
Roth IRAs have made a good run in their relatively short 23 year history. I join with millions of Americans in celebrating the fact that there is an instrument like these allowing workers to save and grow their after-tax dollars and never pay taxes on them again. It’s fitting that the creation of the Roth IRA fell under the Tax Relief Act of 1997.
Roth IRAs have many advantages (which I’ll highlight again); but what I’d really like to dive into is something called a Roth Conversion--where you convert traditional IRA funds into Roth IRA funds.