2021 Economic Impact Payments and the 2020 Rebate Recovery Credit - JohnLau, CPA, CFP, M.S.(Tax)
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2021 Economic Impact Payments and the 2020 Rebate Recovery Credit J o h n L a u , C PA , C F P ® , M . S . ( T a x )
2021 Economic Impact Payments and the 2020 Rebate Recovery Credit
President Biden signed into law the American Rescue Act on March 11, 2021. Included in
the Act is the third stimulus payment of $1,400 per person. Couples who le jointly will
receive $2,800. Families with children also get $1,400 per dependent child. The
stimulus amounts are not taxable.
To qualify for the stimulus payment,
your Adjusted Gross Income (AGI)
must be no more than $75,000 for
Single taxpayers, $112,000 for
Heads of Households (HOH), and no
more than $150,000 if you are
married ling joint.
You will not qualify for a stimulus payment if your AGI exceeded $80,000 (Single),
$120,000 (HOH), and $160,000 if you are married ling joint. Anyone in between those
income cutoffs will receive reduced payments. According to the IRS website
(www.irs.gov), the 2021 economic stimulus payments are now on their way. You can
check your payment status on the IRS website.
2021 Economic Impact Payments and the 2020 Rebate Recovery Credit
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2021 Economic Impact Payments and the 2020 Rebate Recovery Credit
The IRS and Treasury have issued all rst and second Economic Impact Payments in
2020. If you didn’t get any Economic Impact Payments or got less than the full
amounts, you may still qualify for the Recovery Rebate Credit by ling a 2020 tax
return, even if you don’t normally need to le. This is because eligibility for the
Recovery Rebate Credit is based on your 2020 tax return information while the rst two
checks were based on your 2018 and 2019 tax returns. For instance, if your income was
lower in 2020, or if you were claimed as a dependent on someone else’s returns in 2018
or 2019 but cannot be claimed as a dependent on someone else’s return in 2020, you
may now be eligible for the Recovery Rebate Credit.
Using Financial, Investment, and Tax Strategies for your Financial FITness
Sincerely,
John Lau, CFP®, CPA, M.S Tax
Managing Director
Our clients rely on us for timely information. Our job is to deliver.
This commentary is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation,
offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date
noted and may change as subsequent conditions vary. There is no guarantee that any forecast made will materialize. Reliance
upon information in this post is at the sole discretion of the reader. Securities offered through Fortune Financial Services, Inc.
Member FINRA/SIPC. LFS Wealth Advisors and Fortune Financial Services, Inc. are separate entities and are not af liated. Please
remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future
performance of any speci c investment or investment strategy will be pro table or equal any historical performance level(s).
Additional information about LFS Wealth Advisors is available in its current disclosure documents, Form ADV, Form ADV Part 2A
Brochure, and Form CRS. All are accessible online via the SEC’s Investment Adviser Public Disclosure (IAPD) database at
www.adviserinfo.sec.gov, using SEC #801-113091.
2021 Economic Impact Payments and the 2020 Rebate Recovery Credit
Page 22021 Economic Impact Payments and the 2020 Rebate Recovery Credit
What do I get at a complimentary nancial checkup?
At LFS, we pride ourselves with our Total Solution Approach™ to planning --- combining
income tax reduction strategies with estate conservation, retirement distribution
planning, and investment strategies to optimize our clients’ nancial wellness. Because
these different areas are closely intertwined in today’s world of nance, a
comprehensive total solution approach is more necessary than stand-alone planning.
Income Tax Reduction Planning
At the nancial checkup, we start with reviewing your income tax returns to identify
tax reduction planning opportunities including,
- Capital gain/loss planning
- Dividend income planning (quali ed v. ordinary dividend)
- Planning for home of ce deduction
- Qualifying for real estate professionals to avoid passive activity loss rules
- IRA to Roth conversion – does it make sense for you?
- Etc.
Estate Conservation Planning
We will also review your estate to help determine if you are exposed to estate taxation,
especially in light of possible legislative changes by Congress to the taxation of estates.
If you do, we will help identify estate tax planning ideas.
Retirement Distribution Planning
Retirement accounts such as IRA, 401K, 403b are subject to special rules, and the
SECURE Act of 2019 (effective January 1, 2020) is a gamechanger for the inheritance
of retirement accounts. At the nancial checkup, we will help you with bene ciary
designation planning and help protect your IRA bene ciaries from creditors, ex-spouses,
and spendthrift issues.
Investment Analysis
Is your investment portfolio in sync with your risk tolerance and tax considerations? Are
you properly hedged against market air pockets, or will you be blindsided? Are you
making tactical adjustments in your broad investment strategy? At the checkup, we will
provide a second opinion to the overall ef ciency of your investment portfolio.
At LFS, we aim to add value to your nancial situation. Sign up for a test drive and let
us show you how we can add value to your nances.
2021 Economic Impact Payments and the 2020 Rebate Recovery Credit
Page 3About John Lau CPA, CFP®, M.S.(Tax) John Lau is the principal and Managing Director of LFS Wealth Advisors, a Registered Investment Advisory and Professional Accountancy Corporation. John is a CERTIFIED FINANCIAL PLANNER® professional, CPA, with a M.S. in taxation (concentration in trust and estate). John is an author and speaker and has been invited to speak at various organizations, such as Sons In Retirement, National Asian American Coalition, Aspire Network, Diablo Valley Foundation for the Aging, Michael Finney's podcast on KGO radio, and was recently interviewed by Kat Iniba on Spotlight TV. John also provides nancial education programs as a volunteer for Financial Aptitude Training, a 501(c)(3) non-pro t organization here in the Bay Area.
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