2020 Important Tax Facts and Dates

Morningstar has compiled a succinct informational listing of important tax facts for individuals, investors, and important tax dates throughout the year.  I see no reason to write my own list as it does not require any professional originality.  You can find the information here.

This link will enumerate the twelve tax deductions and credits you need to evaluate for tax planning and their effective use to you.

Lastly, there are eleven tax deductions you can still take if you use the standard deduction.

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Required Minimum Distributions and The Secure Act

There is continuing confusion on how RMDs are treated since The Secure Act became law.

If you turned 70 1/2 years old in 2019, you are still subject to the old law and required to begin RMDs.  If you turn 70 1/2 in 2020, you do not need to take RMDs until you turn 72 years old.  If you have been doing RMDs, you need to continue.  Always use the IRS worksheet.  If you receive an RMD notice from your broker/dealer or retirement account custodian or trustee and you did not turn 70 1/2 years old in 2019 or have not been taking RMDs but you will be 70 1/2 in 2020, you should probably ignore it.  The IRS has issued Guidance here.  You should never just accept  an RMD notice with a calculated amount from a retirement custodian or trustee or broker/dealer; you should always

Is High Corporate Credit An Inceasing Risk to the Economy?

 Last year, the Fed commented on the historical level of corporate credit with rapid growth concentrated in the riskiest firms.  One risk is a market dislocation which causes an increase in credit spreads and a contraction of credit market liquidity.  In January 2020, Moody's Analytics questioned if overvalued equities increase the risk of high corporate debt, because the debt could impact profits and/or cash flow and this might promote a equity market downturn and increase pressure on companies with high debt.  At the present time, the market overvaluation is not at the level of 1999-2000.  Moody's Analytics has published a second commentary entitled, "How Corporate Credit Might Burst An Equity Bubble".  The article continues the discussion of a market downturn amplifying corporate leverage and the two feeding on each other.  The one data set you should watch

America Has Squandered the Economic Recovery

The Harvard Business School has just released a report which finds current business and political leaders have squandered the economic recovery with loss opportunities for a stronger future economy

BIS Quarterly Review (December 2019) and Repo Markets

The December 2019 BIS Quarterly Review is out and it includes some very interesting articles.

There is one on the evolution of OTC interest rate markets.  Given these are an indicator of market volatility, the research is important, because the turnover of interest rate derivatives has increased for a variety of reasons; some of which are the changing structure of the market.

Collateral is king in the euro repo market.  Repo markets provide liquidity, but the euro repo market has seen activity which indicates investors are seeking particular securities rather than just liquidity and the availability and price of those particular securities has become a factor in the euro repo market.

One article receiving a lot of attention is one on the September stress in the U.S. dollar repo market

2020 Form W-4 Is Complicated and Invasive

 In June, I wrote about the proposed new Form W-4.  The final Form W-4 for 2020 can be found here with an explanation on how to fill it out.  Be prepared for a long process using a worksheet or an IRS calculator (which will not have 2020 tax information until 2020).  It is as complicated as filling out the new tax forms and requires an invasive amount of information about your incomes.

If you have multiple jobs, a employee job and a self-employed business, are a new employee but not

Beware: New Medicare Plan Finder Tool Misadvises

The new Medicare Plan Finder Tool has been found to have glitches which could result in consumers choosing more expensive plans by mistake.

It ranks plans by lowest premium without consideration to out of pocket copay expenses. 

In the past the Tool calculated total cost making the new Tool even more misleading if you have relied upon it in the past.

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