We’re living in unprecedented times, and the government is taking unusual steps to mitigate the economic damage done by the coronavirus. Strict measures are in place, like canceling events of more than ten people, closing bars and restaurants, and restricting travel. And while these mean to help from a public health standpoint, they’re having a crippling effect on the economy. The Federal Reserve and the government are working to improve both the economy in general and assist Americans directly with these three unprecedented measures during the coronavirus pandemic.
Extended Tax Filing Deadline
For what is perhaps the first time in your life, tax day will not be on April 15th. The tax filing deadline has been pushed back to July 15th for all American taxpayers. Unlike an extension, you don’t have to apply for it. It is automatic, and taxpayers can delay payment until July 15th. The deadline for making IRA contributions is also now July 15th. If you usually file for an extension, keep in mind that tax returns with automatic filing extensions are still due by October 15th.
You Could See a Check in the Mail Soon
President Trump signed a $2 trillion stimulus bill into law to bolster the economy in the wake of the coronavirus pandemic. It includes measures like expanded unemployment insurance and funds for loans to small and large businesses, as well as direct financial support to many Americans. The legislation provides a one-time payment of $1,200 to individuals with an adjusted gross income of up to $75,000, and to couples with an adjusted gross income of up to $150,000. Individuals and couples can also receive an additional $500 per child. Payments will decrease for those making over those income thresholds, and completely phase out for individuals with income of over $99,000 and couples with income of over $198,000.
The Federal Reserve Supports Bond Market and Cuts Interest Rates
The Federal Reserve has been taking advanced measures to boost the economy, including cutting interest rates close to zero and buying corporate debt. Their purchase of new and existing corporate bonds includes debt issued by investment-grade U.S. companies and exchange-traded funds (ETFs). The aim is to increase confidence that this remains a liquid market, so there is less panic and selling of corporate debt and a willingness to take on new corporate debt.
While the full effects of these measures likely won’t be felt right away, they will hopefully ease the burden on businesses and individuals negatively affected by the coronavirus pandemic. It’s also important to keep in mind that you can create a financial plan that takes market drops like the coronavirus correction into account and works to protect what you’ve earned. A plan is especially important to put in place as you near and enter retirement, which is why we offer complimentary financial reviews. Don’t forget to plan for the future, even if you’re worried about today.