America responds to the pandemic-catastrophe with the CARES Act Helping Myriads:

America responded to the plague we all have been seeing with thousands and thousands of tax-free stimulus dollars given to help American citizens here in Israel and abroad. These economic stimulus payments, where every American – either here or abroad – is eligible to receive 1200 dollars or more in free government money – is part of the new law that America enacted an effort to help us during this pandemic-catastrophe. The bill is called The CARES Act. Most of The CARES Act directly relates to people who live in America and do businesses in America, but Weinstein can also greatly help our clients here in Israel to understand and apply the provisions of this law to their lives here in Israel:

One very big benefit is that if someone received up to 100,000 dollars distribution from a pension early – like an emergency distribution that is before the person’s retirement age – that person may be exempt from early distribution penalties and taxes that would come on those IRA and pension plan distributions in some cases. First, the distribution must have been made during 2020 and not earlier. And then, the person receiving the distribution had to have been affected by the pandemic-catastrophe either physically – or the person had to have been quarantined and missed work because of it. Thus, a person can receive early pension distributions of a great sum of money from his pension or IRA and not have to worry so much about penalties or taxes on it.

We have to be careful though, because in some cases these early IRA and pension retirement distributions really should be paid back to the plans over 3 years to avoid the tax and penalty consequences, but that can probably be handled.  In other cases, the taxes levied on those early distributions still has to be paid but it is spread out over 3 years instead of hitting the taxpayer all in 2021.

One of the best benefits of investing money and starting a business in America is the Net Operating Loss deduction, or NOL. With the NOL, the business – or the owner – can carry accumulated losses forward or backward to offset taxes that may come in the profitable years. This means that money invested in building the company can have a lasting impact and help the business grow over many years into the future by getting rid of taxes that now no longer have to be paid for several years into the future. With The CARES Act, net operating losses in 2018 through 2020 can be carried back 5 years, and may result in a refund of taxes paid in those years. (This would involve putting in an amended report.)

Any NOL carry forwards now, through this year are credited at 100% whereas before the carryforwards were limited to about 80% of the losses. Once again, any older carryforwards can be recalculated and if we put in amended reports this can result in a large refund in some cases. This technique with regard to NOL limitations is a complex question that should be brought to the CPA. However, some of this money in refunds may be available quickly – within 90 days of putting in the amended report. This is because America is acting fast to bring a lot of help.

The CARES Act also opens up more of a financial benefit for people to take charitable contribution deductions and donating to American not-for-profits. Now, up to 300 dollars can be taken outside of the schedule A even if the person does not itemize personal tax deductions. This amount of money may seem small, but for people who don’t itemize their deductions it is a significant new change that makes it easier for charities to raise money. In addition, The CARES ACT brings people who are responsible to America new loan forgiveness programs that can be applied to American mortgages and also to American small business administration loans. Either these loans can now be forgiven or the people can be given grant money for assistance in paying them. The CARES Act also brings grant money for American businesses and provisions for education grants and scholarships to be quickly available. More loans are available now on better terms. Foreclosures on real estate property located in America are now being put off under the new Act and mortgage payments may be suspended under a forbearance to help borrowers catch their breaths. New deductions for health products that are over-the-counter and not only prescription drugs now make it much more important to keep good bookkeeping for health related expenses because they will be of greater use this year.

Needless to say, if our Israeli clients hold business in America, their benefits can be much greater than these mentioned because the American CARES Act is giving most of its benefits to people and businesses who are in America. Because many Israelis do business in America under their own names or in the names of their Israeli or American corporations it pays to have Weinstein check on how many benefits you or your companies may be eligible for claiming under this new Act or any of the new tax laws. Stimulus money is available fast for anyone with a social security number.

If you have a business in America, if you have income from America, or if you have an American citizenship or visa you should check with Weinstein on what benefits you may have that you didn’t know you could receive. We are happy to take calls and emails free of charge to start giving you the advice, assistance and access to financial dollars that you need.