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The recent announcement by the Biden administration of a plan that mandates COVID vaccinations or weekly testing has drawn both phrase and critizim from the business community.   Some business leaders applaud the plan as a way to keep the surge in COVID cases from hurting the economy, although smaller employers may find the mandate difficult to enforce. Expanding testing may not be possible unless capacity is also significantly increased. Some business leaders disagree with the mandate and support their workers making their own decisions. These additional oversite requirements along with the cost of weekly testing can be viewed as an additional tax on businesses. It is not clear whether companies with fully remote teams will also need to comply to the same degree as companies with onsite teams.  For us, most of our staff is double vaccinated and only 1 of our fully remote employees are not.

I have listed some tax deadline extended due dates due to Hurricane Ida and Henri, however when the hurricanes stay off shore it’s surf’s up, even on the south shore of Queens in NYC…

On a lighter note, what a beautiful few days we have had.  I am so glad to be able to take a break from the looming tax deadline (Septmber 15th and October 15th) with my walk on the beach…

Or pop out to the garden to pick our new crop of white figs

I am hoping you are able to take advantage of this nice fall weather.  To you school age kids, enjoy this time as you walk to school for maybe the first time in over a year, good luck and enjoy being together with your teacher and classmates.

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Economic Injury Disaster Loans (EIDL)

The SBA recently made changes to the EIDL loan program to help small businesses still struggling with the pandemic. The SBA still has more than $150 billion available in funding. These changes include the following:

• The maximum loan size has increased from $500,000 to $2 million.
• Loan proceeds can also be used to prepay commercial debt and to make payments on federal loans.
• Deferred repayments are now available. Small business owners have two years after loan origination before payments are due. Interest will accrue, and payments will be made over 28 years.
• Eligibility has been expanded to organizations with multiple locations. Under the old rules, only organizations with fewer than 500 employees were eligible. Now, organizations with up to 20 locations are eligible, provided that each location has fewer than 500 employees.

The EIDL program will run through December 31, 2021 and offers 30-year loans with interest rates of 3.75% for small businesses and 2.75% for not-for-profits.

While there has been some talk about these loans being forgiven, I would not count on it.  We always recommend creating a set of plans including a cash flow and return on investment analysis before committing to a loan of this size.

Monthly Advanced Child Tax Credit Payments

If you missed the first few advance Child Tax Credit payments, the IRS may make it up to you by sending larger payments through mid-December. September payments for the advance Child Tax Credit will be going out by direct deposit if the IRS has your banking information, which you can update at the IRS Child Tax Credit portal. You can also use this portal to update your mailing address if you prefer a paper check. The agency will also use this address to send out an end-of-year summary of the payments received, which will be needed for filing 2021 tax returns. This portal can be used to verify enrollment status, update banking information and mailing addresses, to unenroll from future payments, and to view the payments you have received.

As a reminder, if you want to opt out of future payments, you must opt out by the deadline for the next month’s payment. Check out the IRS FAQs where you’ll find everything you need to know about opting out in Section J.

TAX MATTERS

Residents of New York and New Jersey impacted by Hurricane Ida now have additional time to file:

• January 3, 2022 to file New Jersey business and individual tax returns and make tax payments.
• December 14, 2021 to file New York business tax returns and make tax payments.  New York business tax returns are still due October 15th with individual tax estimates and make tax payments due by December 14th.

While NJ followed the IRS announcement almost immediately, the NYS announcement came in the final hours of the September 15th “perfect storm” deadline for extended corporation tax filings and the personal and corporation 2021 estimate #3, again this does NOT include the personal tax deadline of October 15th (glad they didn’t wait any longer).  This extension applies to any tax returns or tax payments that normally would be due between September 1, 2021 and December 31, 2021. Residents of Louisiana also have an extension to file tax returns and pay taxes.

At the end of 2020, the IRS had a backlog of eight million paper business tax returns, an increase of 3230% compared to 2019, when it had a backlog of 239,000 paper returns to be processed. By the end of July, that backlog had decreased to 291,000. The backlog was caused by shutdowns of tax processing centers and other offices to protect employees and taxpayers.

THE GREAT REASSESSMENT

The pandemic has changed the way we work, likely forever. CNN interviewed 15 CEOs about the lessons they learned and their ideas about the future of work. Here are a few snippets of those interviews:

• Chobani CEO Hamdi Ulukaya: “The future of work must also include fair and equitable compensation, part-time options, robust benefits packages, parental leave, extensive health and safety programs, and a positive and inclusive environment — these elements should no longer be revolutionary, but the norm.
• Dropbox CEO Drew Houston: Working from home “presented a unique opportunity to entirely re-imagine how we work for the better…. I see the 40-hour workweek – an artifact of factory work – finally becoming a thing of the past… The workplace will now be wherever work happens, and the workweek will be whenever work happens best for each person.”
• Slack CEO Stewart Butterfield: “Today we have what is likely to be the greatest opportunity we will ever have in our lifetimes to reinvent and re-imagine how work gets done….The greatest obstacle to fully taking advantage of this opportunity is the heavy gravitational pull of the status quo.”

How refreshing, the silver lining may actually be the better life-work balance we have been yearning for.  Even our staff members who live in close proximity are working remotely part-time.  The options from technology advancements and process adjustments have made this possible.  Ramona whose daughter is now attending school in person, and Myriam, Monica and Elizabeth who have moved out of state can still work with us; what a huge benefit!

REOPENING THE OFFICE AND REMOTE WORK OPTIONS

Hybrid work schedules mean that fewer desks are occupied on a continuous basis, so many companies are expanding their use of unassigned seating, also known as “hot desking” or “hoteling.” This article from CNN Business has tips for employees working in this situation. For example, because you may be carrying everything you need with you, you may need a small tote bag, and you will likely pare down what you bring with you from place to place. Creating your own routine to take the place of sitting down at your usual desk will help you get in the right groove to work each day.

Bringing people back to the office and keeping everyone safe comes with extra costs. Tracking the vaccination status of employees and keeping that data safe will be an additional expense. Employees who opt out of the shot may need additional testing or additional workplace accommodations to keep them safe. Waiting too long to bring people back has its own risks, as some research shows a connection between remote work and an increase in social isolation and overwork. Transparency around plans, even if those plans may need modification, may be less disruptive than waiting until the last minute to reveal the expected date for returning to the office.

Keeping those who will continue to work remotely connected is also a bit of work and does need planning, but it can be done with the use of video chat technology, proactive process changes, and an effort and desire to make it happen.

ECONOMY

Economic recovery from the pandemic has been complicated by rising prices and labor shortages, according to the Fed’s latest Beige Book, a compilation of anecdotal information about the economy. Labor shortages in restaurants, airlines, and hotels have forced businesses to reduce capacity. Shipping delays and shortages in materials are disrupting businesses from bridal stores to breweries. Employers face continuing challenges in attracting workers willing to work at the wages they offer. Workers may need higher wages to be able to afford higher costs for housing and childcare.

A survey by the New York Fed shows that workers are switching jobs more frequently and are demanding higher wages. The average lowest wage a worker would be willing to accept for a new job – the reservation wage – increased in July to $68,954, well above the $64,226 seen in July 2020.

Over the last five years, consolidations in the shipping container industry have led to six operators controlling more than 70% of capacity, which has added to supply chain problems caused by the pandemic. The result of the consolidations is fewer bigger ships, which cuts waste from the system and reduces warehousing expenses. However, this streamlined system is more sensitive to stresses such as shutdowns at a few key terminals in China and congested ports on the west coast. The combination of fewer operators and clogged supply lines in resulting in shipping delays and steep price increases. Some shippers, such as Walmart and Home Depot, have been chartering their own ships at great expense, an option that was previously far too expensive.

GENERAL RESOURCES

• IRS resources for stimulus payments:
  • Use the Get My Payment tool to check on EIP payment status
  • Eligibility and general information about Economic Impact Payments
  • A list of frequently asked questions for stimulus payments
• IRS information about the Advance Child Tax Credit Payments
  • Portal to update information
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
• Our Covid-19 Resource Center with relevant blog posts, videos and prior weekly newsletters
• Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
• Accounting Today has a special page for articles on COVID-19
• Intuit QuickBooks has a dedicated page to help small businesses
• Entrepreneur put together a listing of free tech resources for remote work
• The Consumer Financial Protection Bureau has warnings about COVID-related scams
• Fast Company has a listing of the best productivity apps for 2020
• The New York Times has an online newsletter on K-12 and higher education
• The Wall Street Journal has a collection of articles on education
• The Louvre has digitized 482,000 artworks from its collection
• PC Magazine explains how to carry your vaccination card on your phone
• How to create a strong password

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!

Complementary Discovery Session

If you need help with your accounting, want to create a tax minimization plan, want to discuss your business growth plan or your finances, are concerned about retirement goals or need to be held accountable for your 90 day action plan, contact us for a complimentary discovery session or an appointment to just get started.