Losing dollars in penny stocks
And more of the week's best financial insight
Here are three of the week's top pieces of financial insight, gathered from around the web:
Losing dollars in penny stocks Penny stocks are booming again, said Matt Phillips at The New York Times. Traded on lightly regulated over-the-counter, or OTC, markets, these stocks "occupy a low-rent district of Wall Street, a world rife with fraud and chicanery where companies that don't have a viable product, or are mired in debt, often sell their shares." A sudden surge of interest "can make their prices go berserk." Penny-stock brokers used to cold-call retail investors with "pitches of worthless stocks." Today, "social media sites are the preferred method for building unwarranted hype." This month, regulators filed a civil complaint against a man who used Twitter to promote shares in "a company that has not conducted business since 2016."
U.S. will pick up COBRA payments The pandemic relief bill gives laid-off workers the option to resume employer-based health insurance coverage for free from April through September, said Anne Tergesen at The Wall Street Journal. Normally, people who have left their jobs can stay on their employer's plan through COBRA for 18 months. However, it's expensive, averaging about $600 a month for individuals and $2,000 a month for families. But "under the new law, the federal government will cover those COBRA premiums for up to six months." Those who qualify include employees and family members who have been laid off in the past year, going back to March 1, 2020. The provision also applies to "workers who lost health insurance due to an involuntary reduction in their work hours" during the pandemic.
Extended deadline for 2020 taxes Tax Day has been pushed back again, said Andrew Keshner at MarketWatch. Under pressure from accountants and lawmakers saying that the April 15 tax-filing deadline "was arriving too soon," the Internal Revenue Service elected to push the deadline back to May 17. It's the second consecutive year the IRS has moved its deadline, after the pandemic forced the agency to delay it until July 15 in 2020. The IRS is implementing changes from the February pandemic-rescue package, including "one provision that waives federal income tax on the first $10,200 a person receives in jobless benefits" for households making up to $150,000. The late change in the law means that some taxpayers already filed without claiming the exemption. Tax advisers say they should wait for more IRS guidance and "not file an amended return just yet."
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