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More good Covid vaccine news, and changes you can make now to avoid tax surprises in 2021. Here's how the headlines could affect your money.

The end of the year means it's time to make tax decisions, even though April might seem far away.

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Tony Potts, a 69-year-old retiree living in Ormond Beach, receives his first injection as a participant in a Phase 3 COVID-19 vaccine clinical trial sponsored by Moderna at Accel Research Sites on August 4, 2020 in DeLand, Florida.
Paul Hennessy | NurPhoto | Getty Images

More good Covid vaccine news, and changes you can make now to avoid tax surprises in 2021. Here's how the headlines could affect your money.

After good vaccine news, markets rise

Last week ended with a record high for the S&P and a surging Dow following news of Pfizer and BioNTech's promising Covid vaccine. The Nasdaq dipped, though, as some investors moved away from Big Tech stocks in favor of value stocks.

Rival pharma company Moderna announced Monday that its Covid vaccine was 94.5% effective in trials. Markets rose and then wobbled following the news.

If you held on to a diversified portfolio rather than dumping everything for tech stocks as soon as the S&P started dropping in February, you'd be in great shape now. The S&P is up a whopping 15.78% over this time last year.

Time to catch up on your retirement contributions

The end of the year means it's time to make tax decisions, even though April might seem far away. For example, you could boost pre-tax contributions to your 401(k) or make deductible contributions to an IRA. That reduces your taxable income and helps you grow wealth for the future.

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Payroll tax advice

If you deferred payroll taxes as part of the Treasury Notice 2020-65 — an emergency response to the pandemic — the savings may have helped. But remember that a deferment is not forgiveness. Your employer might have to dock that deferred amount from your paycheck from January 1 to April 30, 2021, so now's the time to ask them and rejigger your budget accordingly.

Words you've heard: Notice 2020-65

In August, President Trump directed the Treasury to defer the withholding, deposit, and payment of certain payroll tax obligations (including Social Security taxes). The Treasury issued Notice 2020-65, allowing qualifying taxpayers to defer taxes on wages earned between September 1, 2020, through December 31, 2020.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.