President Biden's New Personal Finance Policies
Joe Biden was inaugurated as our 46th president; here are some of the new policies relevant to personal finance:
Student loan freeze: The Department of Education extended the suspension of federal student loan payments through September 30, 2021, giving borrowers some extra breathing room this year. No interest will accrue during that period, and each month will count toward public service loan forgiveness as well as student loan rehabilitation. Unfortunately, private loans are again excluded from the freeze.1
Foreclosure and eviction moratoriums: The CDC extended the federal eviction moratorium through March 31, 2021, preventing renters from being evicted for non-payment of rent. Fannie Mae and Freddie Mac also extended foreclosure and eviction moratoriums until February 28, 2021.2
Rental assistance: Under a program passed in December, states will begin disbursing $25 billion in rent assistance to help tenants pay rent and utilities. Funds can be accessed locally through housing groups, 211/311 information lines, and local representatives.3
More stimulus checks?
Probably, but it’s not yet clear. The new $1.9 trillion stimulus program Biden has proposed offers $1,400 stimulus checks, enhanced unemployment benefits, a $15 minimum wage, aid for states and local governments, money for COVID-19 vaccines and testing, as well as help for parents and schools.4
What will the final bill look like once Congress finishes negotiating? Still to be determined.
Tax season starts later this year, but the filing deadline is still April 15 (for now).5
The IRS has pushed back the start of tax season by several weeks, delaying the acceptance and processing of tax returns until February 12. Currently, the tax filing deadline is still April 15, but that could also change.
How 2020 stimulus payments could affect taxes:
Do I owe taxes on my stimulus money? No, the IRS does not consider stimulus payments to be income.
I didn’t receive my money (or the correct amount of money). Since stimulus payments were based on prior-year tax returns, you’ll receive any money you’re owed when you file your 2020 return. If you think you may have received too much based on your income, it doesn't look like you'll have to pay any back.6
There's a lot of info to digest, and more will be coming as the new administration settles in.
If you or someone you love has questions, feel free to reach out anytime.
Warm regards,
Eric Maldonado, CFP®, MBA
Owner, Aquila Wealth Advisors, LLC | (805)250-4552 | eric@aquilawealth.com
872 Higuera Street, San Luis Obispo, CA 93401
www.aquilawealth.com
Eric Maldonado, CFP® dba Aquila Wealth Advisors is an Investment Adviser registered with the State of CA, LA. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets, or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions. Please contact us at (805)250-4552 if there is any change in your financial situation, needs, goals, or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions. Additionally, we recommend you compare any account reports from AWA with the account statements from your Custodian. Please notify us if you do not receive statements from your Custodian on at least a quarterly basis. Our current disclosure brochure, Form ADV Part 2, is available for your review upon request. This disclosure brochure, or a summary of material changes made, is also provided to our clients on an annual basis.
1https://www.washingtonpost.com/education/2021/01/20/biden-student-loan-payment-freeze-extension/
2https://www.cdc.gov/media/releases/2021/s0121-eviction-moratorium.html
4https://www.nytimes.com/2021/01/14/business/economy/biden-stimulus-plan.html
5https://www.foxbusiness.com/money/stimulus-checks-and-your-2020-taxes-all-of-your-questions-answered
6https://www.cnbc.com/2020/05/29/heres-what-the-irs-is-saying-about-inaccurate-stimulus-payments.html
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.
