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The CARES Act and Your Taxes - Presented By TheStreet + TurboTax - YouTube
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- [The Street] Among the many things
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The Cares Act offered to taxpayers,
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there was some real perks and abilities
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to use your retirement plan.
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(upbeat music)
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- Lisa, I have all this money in my IRA,
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I need money at home right now,
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The Cares Act allowed me
to take a little bit out,
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didn't it?
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- Yes, The Cares Act allowed
you to take a big sum
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of money out by December
31 2020, you could take up
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to $100,000 out.
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And if you're 59 and a half or under,
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you would not receive the
10% penalty for doing that.
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- Right because typically, if
you pull money out before 59
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and a half, you get you get smacked
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with not only taxes, but that 10% penalty.
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And now they also give
you the ability to pay
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the tax back on this money over the course
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of a period of time. Right?
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- [Lisa] Right, you can pay
it back in the one lump sum,
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like normally, or you could
pay it back over three years.
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- Right so if you took the 100 grand,
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you can divide it over three payments
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and pay the tax back over three years,
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that also makes your tax bill
maybe more, you know, easier
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to swallow. Right.
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They also said you don't have
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to take a minimum required
distribution for 2020.
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Is that correct?
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- [Lisa] That is correct.
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Now, under The Cares Act,
you did not have to take
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that distribution.
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- And just to be clear,
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If I withdrew that $100,000 did I have
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to show proof that I
was affected by Corona
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or the IRS gonna ask for
some sort of identification
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regarding that?
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- Yes, in order to take 100,000 out
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you did have you do have to
be impacted by Coronavirus
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whether, you know you were
sick or quarantined couldn't go
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to work, you would have to
provide some type of proof.
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- Right that makes perfect sense. Okay.
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There were other relief available
as part of The Cares Act
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and one of them in particular
was to students and parents,
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maybe you could tell us
a little bit about that.
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- Yes, so if you were
a parent or a student
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and you had a federal student loan,
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you were able to defer
payments all the way
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through December 31st 2020,
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allowing you to defer the principal
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and interest on your student loan.
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One thing to think about, you know,
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when you go to do your taxes,
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you may see that your student
loan interest is lower
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if you elected not to make
your student loan payment,
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but you know, it was
providing relief for you
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when you really needed it.
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- Right, and that's people
should look at all that
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now, again before the end
of the year and figure out
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I guess again, whether or
not your student should file
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his or her own tax return as a result too
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because the the deduction will be smaller.
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- [Lisa] Yes, so a lot of
people are considering whether
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or not to let their college
student file their own taxes,
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you know, if they worked a
side job or were employed,
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because they may be eligible still
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for some of those education tax credits,
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and as well as a stimulus
payment, possibly
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if they didn't get one.
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- So at least before I let you go,
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maybe just tell us about where
people can go to on the site
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to figure all this out.
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I know TurboTax has a bunch of
great calculators and things.
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- Yes, to figure all
this out, you could go
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to our Coronavirus Tax Center
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or we also have
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our Self-Employed
Coronavirus Relief Center.
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And we also have an Unemployment Hub,
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where there someone one
stop shop for people
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that have been unemployed to
help you figure out tax advice
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and tricks and things you
could do by the end of the year
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to help you save on your taxes
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as well as all of the
hubs have calculators
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to help you figure out how to save money.
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- It's good stuff and
it's stuff that people
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should start thinking about
because we are encroaching
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the end of the year.
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There are some things you could still do
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before the I guess the ball is
gonna fall on December 31st.
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I don't know it's 2020
anything could happen
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but God willing, it doesn't
we've flipped to 2021
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but people should be thinking about
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this now so you're not
caught off guard in April
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of next year.
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Lisa Greene Lewis TurboTax expert.
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Thank you so much for being with us.
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(upbeat music)
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