“As I speak with residents and friends out in our communities, we’re getting a lot of questions about recent tax law changes,” says Katharine Miller, Executive Director of the Covia Foundation. “We thought it would be good to share an overview on some of these changes – especially now since many of us have time to catch up on all of that planning and some of those details.”

To provide some information, the Foundation invited Bill McMorran of Green Oak Consulting to provide some basics on the recent Coronavirus Aid, Relief and Economic Security (CARES) Act – “880 pages of fun” – while emphasizing that “as always, you need to talk to your own advisors because they do know your situation better than anyone else.”

Although the new tax deadline is July 15^th, “It’s really important if you have a refund coming to file as soon as possible.” Although McMorran filed his taxes and those of his mother on the same day, McMorran received the direct deposit into his account after five working days, while his mother received her paper check about a week later. “We’re seeing that the direct deposit accounts are the ones that receive priority – or at least they’re moving them out faster,” he says.

On the other hand, if you expect to owe taxes, “you have 90 more days to file your federal returns, and California gives you until July 15 as well to file your tax return. So if you owe money, figure it out, and then sit on it until about July 10, then send it in.” The July 15 deadline also extends to contributions to retirement funds.

Estimated tax payment deadlines have also been extended. Your April 15 first quarterly estimated taxes for the United States and for California are now due July 15. In a recent change, the June 15 second quarterly payment to the US and to California are also now due on July 15.

McMorran noted that “probably one of the best pieces of news I think anyone could expect or have asked for is that, if you take a required minimum distribution out of your IRA, you do not have to take it this year.” Those who choose not to take the distribution will have a lower income and, accordingly, lower taxes.

“If you’ve already taken your required minimum distribution in the past 60 days, you can put it back in,” explains McMorran. He refers people and their financial advisors to section 2203 of the CARES Act to determine what’s best for them. 

Finally, McMorran encourages people to take advantage of this time to review their overall estate plan. “Have you looked at your estate plans in the past three to five years?” he asks. He suggests making sure that your beneficiaries, trustees, and legally responsible parties are all current and able to fulfill the duties assigned to them. “Also, while we have a lot of time on our hands, think about your own legacy: how to best benefit people, the organizations you care about, what really matters, and what you want to share with the future.”

If you would like to see McMorran’s full presentation, as well as another video that goes into more depth about other planning topics, please contact Katharine Miller at the Covia Foundation at kmiller@covia.org and she will send you the online video links.  Covia Foundation will be offering more useful information by video in the future.

The Foundation is available to provide support and insight into your financial planning, charitable giving, charitable remainder trusts, charitable gift annuities, and legacy planning. You can read the Foundation’s most recent Community Matters newsletter to learn about Covia’s impact in the greater community and how gifts and donations to the Foundation help provide critical services to older adults.

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Too often, people start looking for senior living options after a need arises, leaving them scrambling for the first available option, even if it isn’t what they truly want. You may be thinking that a move to a Life Plan Community is something that will happen 2, 3, 5 or more years down the line. It’s still worth taking steps now so that when the time comes, you’ll get what you want.

Of course visiting in person is an important part of the process. Each community has a different personality. Getting to know a community, asking your questions, and meeting other residents makes it more likely you will choose a place that feels like home.

But if you’ve come to the event, taken the tour, and still think it’s not the right time to move, joining the community’s waiting list gives you the chance to consider the pros and cons while reserving your place for the residence you want.

“A waiting list is a terrific opportunity to secure your future plans without a large commitment of time or money,” says Linda McMenamin, Covia’s Senior Director of Sales and Marketing. “Often people will join wait lists at multiple communities to ensure they have options in the event their needs change and they are ready to make a move.”

Joining a waiting list at the community – or communities – of your choice has other benefits as well.

• Reduce anxiety: “Most people benefit from being on a list because the opportunity to move often coincides with changes in health, lifestyle or living situation,” McMenamin notes. You no longer need to worry whether you have a place in line when you are ready to move. With most of the preliminary paperwork completed, you know you’re pre-approved.
• Take your time: “Being on the waiting list allows you the freedom to explore your options at your own pace, without time constraints or pressure to make a decision,” says McMenamin. You can use the time you are on the waiting list to think through what’s important to you and to put other parts of your plan in place.
• Build connections: As a waiting list member you will be invited to special events, allowing you to get to know a community even better. “Often times wait list members can join the fitness center, attend activities and join residents and future neighbors for meals,” McMenamin observes. When you do move in, it will be a much more familiar place that’s a lot easier to call home.
• Priority access: When an apartment opens up that matches your preference, we’ll call to let you know. Our waiting list applicants receive priority for any new inventory. “Having that plan in place gives you the flexibility to say yes when you are ready to make a move,” says McMenamin.
• No obligation: Just because you’re on the waiting list doesn’t mean you are required to move in. “There’s no risk and the financial cost is usually very minimal,” says McMenamin. If you decide a community isn’t for you, your fee is fully refundable.

If you do decide to put down a deposit, be sure to ask how long the waiting list is for the home style you’d like, and what the expected waiting time is. Many times, larger homes have longer waiting lists, which may affect your plans. Talk with your senior living counselor about your plans and timeline and they will do their best to accommodate you.

Some communities may have a limit on the number of times you can turn down an apartment offered to you without losing your place on the waiting list. Although you are not obligated to accept a home presented to you, this may mean that eventually you won’t be the first person called.

But when you do get the call for the home you want, at the time you want it, you can feel comfort and confidence knowing the plan you’ve put in place is working as you hoped.

For more information, please fill out the form below. 

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While the primary motivation for most charitable gifts is a desire to make a difference, not simply tax breaks, good financial planning leaves more for charitable gifts. Donors are paying attention to the impact of the new tax law – and making plans to maximize the difference their gifts can make.  The Covia Foundation offered several workshops this year on maximizing your charitable contribution and offers the following strategies you can use for your own planning purposes.

The new tax law that went into effect for 2018 nearly doubles the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly. That means fewer Americans will itemize deductions on their tax returns – including charitable gifts.

Using tax-smart giving strategies can allow some donors to give more and enable others to grow their initial contributions tax-free until funds are disbursed to designated organizations:

APPRECIATED STOCK:

One strategy is to donate appreciated assets such as stocks or real estate directly to a charity. Donors receive the fair-market value of the asset at the time of the gift as a charitable deduction – without incurring the capital gains tax they would face if selling an appreciated asset outright. The charity then liquidates the asset and puts the funds to work to make a difference.

IRA CHARITABLE ROLLOVER:

Taxpayers over the age of 70 ½ can plan a Qualified Charitable Distribution from their Individual Retirement Accounts (IRA). Diverting some or all of the required minimum distribution from an IRA can provide financial benefits. While the distribution doesn’t count as a charitable deduction, it also doesn’t add to the donor’s adjusted gross income – which can reduce income taxes (and possibly Medicare premiums). Up to $100,000 annually may be requested as a Qualified Charitable Distribution.

DONOR ADVISED FUNDS:

Donors can make several years’ worth of charitable gifts in cash or appreciated assets to a donor-advised fund. This strategy can provide an immediate tax deduction on the amount contributed and allows the donor to direct gifts from the fund each year to the charities he or she supports.

Charities are able to continue their work in good part because of the support of people who care about making a difference. Planning ahead gives you the opportunity to make an even bigger impact with your charitable dollars. Generosity combined with knowledge can make all the difference in the world.

If you would like to attend a future charitable giving forum, please contact Michelle Haines, Covia Foundation Development Associate, at mhaines@covia.org. And to join our effort to provide life-changing support for seniors, please visit our secure online donation page.

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