Broker Check

Monday Money Report

| February 22, 2021

Last week the markets rebounded on Friday to provide modest gains.  The jobs report showed increasing unemployment, and Secretary of the Treasury Janet Yellen has called for more stimulus.

Also last week, the IRS finally opened filing season for 2020 returns.  They still have not finalized all of their forms.  If you received unemployment, a PPP loan, or other Covid-related relief, or if you took a corona virus-related distribution from your retirement accounts, you’ll need to wait a bit to file.

If you haven’t filed, there is still something you can do to help out your tax situation. You have until April 15th to fund your IRA for 2020. There are income limits here, so you should talk to your tax professional.  If you are self-employed, including running a side business, you can contribute up to 25% of that income to a SEP-IRA, again subject to some limits.

Remember that contributions to traditional retirement accounts are usually tax-deductible and reduce your adjusted gross income.  This allows you to reduce your income if, for example, you are receiving subsidies from the health exchange, or if you claimed Social Security prior to your full retirement age. The two prior stimulus checks are also based on 2020 adjusted gross income, so reducing that by contributing to an IRA, if eligible, may qualify you for that stimulus payment.

If you are wondering how you open an IRA, or a SEP-IRA, and make sure you’re following all the rules around income and contribution limits, you can find a financial advisor like us here at CovingtonAlsina.  If you’re confident you can navigate the rules without professional advice, there are many do-it-yourself options online.

If you have a flexible spending account or dependent care account with money left over from 2020, you usually have until March 15th to spend it. This is depending on your employer’s rules, so check with HR.

Your action to take this week is for everyone who doesn’t have a will and legal documents in place.  Either call an estate attorney to make an appointment, or, at a minimum, download the Maryland Statutory Power of Attorney forms and Medical Directive from the state attorney general’s website. We’re happy to notarize them for you in our office at no charge.

You can always find more information on our website at, or visit our Facebook page to learn more.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. CovingtonAlsina and Great Valley Advisor Group are separate entities from LPL Financial.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

LPL Financial and CovingtonAlsina do not provide legal advice or services. This information is not intended to be a substitute for specific individualized tax advice.  We suggest that you discuss your specific tax issues with a qualified tax advisor.


The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, consult with your attorney, accountant, and financial advisor or tax advisor prior to investing.