Here are tax issues to consider if you tapped retirement account to weather 2020

Here are tax issues to consider if you tapped retirement account to weather 2020  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, JAN 27, 2021 YOUR WEALTH Editor's Note Millions of Americans tapped a qualified retirement plan under the CARES Act to access emergency cash amid the pandemic. With tax season coming, decisions must now be made about those withdrawals. The CARES Act put in place very favorable terms for qualified retirement plan participants under the age of 59½ to tap their nest eggs without incurring the usual 10% penalty. Plan participants could withdraw up to $100,000 from their accounts. They were also given three years to replace the withdrawn money to the account without any penalties or taxes owed. With that said, if you pulled money from your 401(k) plan or individual retirement account last year to get through tough times, now is the time to consider next steps. Experts say it's key to determine whether your withdrawal was, indeed, eligible under the law. Then consider whether and when to pay back the withdrawal amount. The 10% penalty for the withdrawal is waived regardless of whether you replace the money. That's one reason tax experts are concerned, because they feel many people may not return the money. Statistics show that people are not very good at this kind of thing, one expert said. "They start off with good intentions but then they find that they don't have the money to replace it." Lastly, whether or not you plan to replace the money withdrawn from your retirement account within three years, you should pay taxes on at least one-third of the distribution this year. Why? Because if you don't pay taxes on at least a third of the money this year, you will have to pay it later, along with potential penalties for late payment. To that point, tax experts agree that you're much better off repaying the money and taking full advantage of tax-deferred savings if you can. The sooner the better. For more key stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia @JIMPAVIA Here are tax issues to consider if you tapped retirement account to weather 2020 With tax season approaching, millions of Americans who made emergency retirement plan withdrawals under the federal CARES Act now have some decisions to make. You may be able to trim your Medicare expenses. Here's how Each year, certain Medicare costs are adjusted. Although the increases don't always involve huge dollar amounts, they can be burdensome for beneficiaries. Lloyd Blankfein on how the SPAC rush could go wrong for investors While the SPAC trend shows no sign of cooling down amid high demand for shares of new companies, investors need to be careful, Blankfein says. Biden has promised to reform Social Security — some changes could come as soon as this year President Joe Biden has promised to address Social Security reform. Accomplishing that could seal his presidential legacy, one expert says. Bitcoin's latest slump shows why people should be cautious before investing in cryptocurrency "The only thing I can expect for sure is volatility," said David Yermack, a professor of finance at New York University Stern School of Business. Why 'tax the rich' policies may make sense in a K-shaped economy Some state officials want to raise taxes on the wealthy to plug Covid-era budget gaps. The policy meshes with an unequal pandemic recovery, economists say. Many Americans can file their taxes for free. Here's what you need to do An estimated 70% of Americans filing taxes, or 100 million people, can submit their returns for free through an IRS program. 'Payment status not available': What to know if you still haven't received your $600 stimulus check If you're still waiting for your second stimulus check, you may need to claim the money as a credit at tax time. Here's what we know about where payments stand. White House signals it could agree to more narrowly targeted stimulus checks Biden himself on Monday said he would consider curbing eligibility for the checks if it could help secure Republican support in Congress. Here is something you can't understand "There was a moment in the fourth quarter of 2018 where shares of Apple fell 38% in a matter of just a few weeks ..." CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2021 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS