By Steve Tepper, CFP®, MBA
All of us at Northstar wish you and your family health and safety as we wait for this crisis to pass. Nothing is more important than that. At the same time, business goes on.
As Allen mentioned in our client letter, all systems are go at Northstar, and we have adapted quickly to the virtual office, with each of us working at peak efficiency from a different location. And it isn’t just managing your portfolios that we are keeping up on. It’s every aspect of our business, including bookkeeping, IT, SEC compliance, and financial planning.
It’s the last one I want to talk about with you for a minute. As you might imagine, our fortunes are linked to yours. When the stock market takes a downturn like this, your portfolio values decline, and so does Northstar’s income (not to mention our own investment portfolios).
While we never had anything like this in mind, Allen and I have been preparing for an economic reversal (and inevitable falling markets) for several years and have built up a healthy cash reserve—not the easiest thing to do based on our incorporation status, but we agreed it was important. Because of that, we are in solid financial shape to weather the market drop we have experienced. In fact, at the lowest market levels we have seen so far, we are confident we can continue operations indefinitely without any drastic cost-cutting measures such as personnel layoffs.
Beyond Northstar, your assets remain in the custody of some of the strongest, healthiest financial institutions, such as TD Ameritrade and Charles Schwab. While we can’t insulate you from losses in such periods of high volatility, we can assure you that your accounts themselves are safe.
I also want to provide you with some other important financial information (with the caveat that these things are constantly changing and by the time you read this, some of it may be obsolete). This is usually the height of tax season, with filing deadlines coming up. Some of those dates have changed:
The IRS has extended the deadline to file your 2019 personal income tax return from April 15, 2020, to July 15, 2020. Unlike other extensions, where you have to make an estimated tax payment by the original deadline, you need not pay anything until you file your return.
You can file for an additional extension, up until October 15, but if you do so, you must pay an estimate of the taxes you owe when you file for the extension.
If you live in a state requiring filing of a state income tax return, that deadline may or may not be extended. As of the day I am writing this, many states, such as California and New York, have extended their deadline to July 15 to match the federal deadline extension. Others, such as Illinois and Ohio, have not. Check this website and click on your state’s deadline to be sure: https://www.efile.com/states/
If you believe you are due a refund, you should go ahead and get your return in as soon as you can. If you can’t put your hands on the latest copies of the tax statements on your investment accounts or aren’t sure which of the three you got is the correct one, give us a call!
2019 contributions to your regular IRA account no longer have a deadline of April 15. You can contribute up until July 15. If you have a health savings account, the deadline for 2019 contributions is also extended from April 15 to July 15.
If you make quarterly estimated income tax payments, there is also an extension from April 15 to July 15 … maybe! It’s a little more complicated, so I will refer you to this link for more information: https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers
And finally, as I am writing this article, Congress is in the process of passing a historic stimulus bill that promises relief from top to bottom for individuals and businesses financially impacted by the economic shutdown. I am sure there will be a great deal to write about in our next newsletter!
Until then, be well and stay safe. And remember, we are here for you.