Ways clients can use their tax refund toward retirement: Tax Strategy Scan

Clients can expect their tax refunds to be bigger or lower this year, depending on how the new changes to the tax code will affect their actual tax situation, according to this article on The New York Times.
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Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.

How to use your tax refund toward retirement
Clients are advised to use their tax refund to help improve their retirement prospects, according to this article in Yahoo Finance. For starters, those saving to retire can use the windfall to pay off any lingering debt, shore up their health savings accounts and build a cash reserve. Clients can also sock away the refund in an IRA, use the funds to boost their 401(k) contributions and qualify for the employer match or spend the money for their well-being.

If the coronavirus pandemic is rocking your clients’ finances, here’s what they should do
Taxpayers who want to receive their stimulus checks, and are worried they may go under the radar, as are advised to use the new IRS website to provide their bank account information if they think that the government does not have the details on file, according to this CNBC article. Couples who haven't filed their 2019 tax returns yet should do so as soon as possible, especially if they will no longer declare their adult children as dependents for the year, according to the article. This will enable their children to file their own returns and receive separate stimulus checks.

A checklist for volatile markets: Retiree edition
Retirees and pre-retirees are advised to revisit their withdrawal rate to ensure that their plan stays on track during this market downturn, writes Morningstar's Christine Benz. They should also review their short- and intermediate-term reserves as well as their equity weighting holdings, she writes. Taking advantage of tax-saving opportunities, such as skipping required minimum distributions under the CARES Act, and harvesting losses in taxable accounts, can also help protect their portfolio during market volatility.

What to do if working from home is costing your clients money
Clients who are working from home can no longer deduct work-related expenses on their 2019 returns thanks to the 2017 tax law, according to this article in Motley Fool. To minimize their expenses associated with the current work arrangement, workers are advised to prioritize their needs and consider crowdsourcing. They may also seek financial help from their employer to help cover the rising costs.

IRS
Even as they still have to deal with tax season, the service is tasked with handling much of the stimulus packages.
April 6

Tips for clients to protect their business during a crisis
Business owners are advised to talk to their accountant to determine whether they can collect a tax refund as a result the changes under the CARES Act, writes a Forbes contributor. For example, the new law has provisions that provide tax relief for real estate owners, he writes. "Another source of cash savings can come from payroll, such as payroll tax deferrals, changing your 401(k) matching program and other tax credits."

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