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 |  Bizink  |  American Rescue Plan Act,  ARPA,  covid-19,  Disaster relief,  Hurricane Ida,  IRS Form 6475: 2021 Stimulus Payment,  IRS On-Line Services,  NYC Vaccine Mandate,  Omicron Variant

Weekly Update – January 6th 2022; Welcome to a New Year

The rapid spread of the Omicron variant is impacting businesses large and small, keeping some staff members home or quarantined. Record levels of new infections in the US are forcing airlines to cancel flights, stores to close, and available workers to work longer hours or in different areas than normal. While new CDC guidance decreases the number of quarantine days from ten to five, the infectious nature of the new variant may cause continuing worker shortages across all sectors of the economy and may result in lower growth for 2022.

We’ve heard that for those who are vaccinated and “booster-ed” who have contracted the  virus are experiencing a milder case.

On a lighter note I am still thinking about my 2022 resolutions – new and renewed (reaffirmed year after year); is it cheating when we re-affirm (hope not)?

Reaffirming to take care of me, I feel it is so important to start my day with my work-out, this morning I did a 10 minute “spin” then took a short walk on the beach, here’s today’s pick for the sunrise photo of the day…

20220106 071615

Wishing everyone a safe, healthy, happy and prosperous 2022.

New York City Mandatory Vaccination Requirements for Private Sector Employees

Mayor de Blasio announced a vaccine mandate for private sector workers, and major expansions to nation-leading “Key to NYC” program.

On December 6, 2021, New York City Mayor Bill de Blasio announced a vaccine mandate which requires that all private-sector employees who work in a workplace in the presence of another worker, or who interact with a member of the public, be vaccinated by December 27, 2021.  The mandate applies to approximately 184,000 businesses in the City.  It extends a vaccine mandate to those employees who were not previously covered by the “Key to NYC” vaccination requirements.  Accordingly, private sector employees who report to work in person or interact with the public will need to be vaccinated by December 27.  For more information click through to this National Law Review article with links to details and a “Q&A” section.

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Monthly Child Tax Credit Payments

Shortly before Christmas, the IRS announced it would begin sending out letters for the advance Child Tax Credit payments starting in December and continuing into January. These letters will include the total amount of payments taxpayers received in 2021 and the number of children used to calculate payments. This information will be needed for preparing 2021 tax returns to ensure that families receive the correct amount of the Child Tax Credit. The IRS also announced that in late January, it would begin sending out letters for the third Economic Impact Payment that was issued in 2021. The information in Letter 6475 will be needed for reconciliation on 2021 tax returns. For more information on the expanded child tax credits see the IRS FAQs.

If you received more than you were entitled to, you may have to pay back a portion of the advance Child Tax Credit payments you received in 2021 when you file your tax return. This can happen if your financial situation changed in 2021 or if your family status changed so that you are claiming fewer eligible children on your 2021 tax return. If your modified AGI is less than $40,000 for single filers, $50,000 for head of household filers, or $60,000 for joint filers, you won’t have to repay any of the excess you received.

If you didn’t receive the full amount of advance Child Tax Credit payments or stimulus payments you were entitled to, you can get the balance still owed to you when you file your 2021 tax return. A total of three stimulus payments have so far been sent out – two in 2020 and one for up to $1,4000 per person in 2021. The advance Child Tax Credit payments sent out in 2021 account for half of the total amount that families are eligible for, so many families will receive additional payments when they file their 2021 tax returns.

IRS Form 6475: 2021 Stimulus Payment

The IRS has created form 6475 which will provide you with your 2021 stimulus payment.  We will be asked to reconcile your eligible amount with the advance payments you may have received during mid-2021.  This is a similar process with what we were asked to do when submitting our 2020 tax returns.

TAX MATTERS

Tax Season 2022 Expectations

The coming tax filing season may come with headaches and delays. While the IRS is steadily working through the backlog of 2020 returns and other paperwork, the agency still had 6.3 million unprocessed individual returns and 2.3 million amended returns as of December 18. Reconciling stimulus payments and child tax credit payments received with the correct amounts as determined on 2021 tax returns may cause delays if there are discrepancies that must be resolved. In addition, pending changes from stalled legislation may introduce retroactive changes to 2021 taxes midway through filing season.

Extended IRS Disaster Relief from Hurricane Ida

The IRS has just released IR-2021-254, extending the filing time for victims of Hurricane Ida in six states until February 15 2022.

“Victims of Hurricane Ida in six states now have until Feb. 15, 2022, extended from Jan. 3, to file various individual and business tax returns and make tax payments.  The updated relief, extended from Jan. 3, covers the entire states of Louisiana and Mississippi, as well as parts of New York, New Jersey, Connecticut and Pennsylvania.

As a result, affected individuals and businesses will have until February. 15, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until February 15, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.”

I think this was a smart move by the IRS, this will allow those taxpayers to “timely” file via the efile portal once it reopens in late January, early February.  The IRS is still working through the backlog of 2019 and 2020 paper filings.  For more details click through to this article in AccountingToday.

IRS On-Line Services

The IRS will be requiring anyone who wants to access online services such as the Child Tax Credit Update Portal or their online IRS account to log in using an ID.me account by the summer of 2022. Taxpayers with existing non-ID.me log in credentials can continue to use the old system, but will have to create a new ID.me log in to access IRS services after the change. This change is being made to ensure that access to taxpayer information is only available to the correct person.

 

PERSONAL FINANCE

For personal finance, sometimes what you don’t do is more important than what you do. This article in the Wall Street Journal has four tips for what not to do during 2022 to come out ahead. For example, don’t pay off a low interest mortgage with extra cash. Instead, consider investing those extra funds where they will earn a higher return. Be proactive and plan but try not to fall prey to pressure from retailers to overspend and/or buy extra because supplies may be running short. Retailers may be taking advantage of panic buying in the wake of supply chain issue, but it is still prudent to shop around for the best deal, or to wait for a sale. Planning, planning, planning.

STUDENT LOANS

The pause on federal student loan repayments, which were due to restart on February 1, has now been extended to May 1, 2022. Since March 2020, no payments have been required, and interest has not been accruing. While the date for payments to restart has been delayed several times, the Biden administration indicates that this will be the final delay. At least 21 days before payments are to restart, borrowers will receive a billing statement or notice. Borrowers whose circumstances have changed may be eligible for repayment plans based on income by contacting the Department of Education.

FRAUD

Isolation of elderly people due to the pandemic has resulted in an uptick of fraud and other abuse by their caregivers and family members. The FBI has tracked a 55% increase in elder fraud between 2019 and 2020, while a study by Yale University found an 83.6% increase with one in five older people living in homes or apartments reporting some form of abuse. It has been reported that the shortage in caregivers has resulted in nursing homes inadvertently hiring people with criminal backgrounds, while pandemic-related isolation has made it more difficult for families to monitor the care and health status of elderly family members.

According to a recent report from the Secret Service, at least $100 billion in pandemic relief funds have been stolen, mainly in the form of unemployment fraud. So far, the Secret Service has seized more than $1.2 billion and returned more than $2.3 billion in fraudulently obtained funds, while the Labor Department estimates that as much as $87 billion in unemployment funds may have been paid improperly.

REMOTE AND HYBRID WORK OPTIONS

After almost two years of remote work, many people are exhausted from too many virtual meetings. This article in Inc. includes six tips for making those video meetings better. For example:

  • Include only those people who will care most about the outcome of any decisions to be made at a meeting. Including too many people slows down the decision-making process.
  • Reach an agreement about the important problems that a meeting is intended to solve before the meeting happens.
  • Start meetings by asking people how they feel and to voice their opinions on what’s working and what isn’t.
  • Create and share your agenda prior to the meeting and use this document as an outline, filling in important notes and creating your follow-up items. Then re-share this document after the meeting.

ECONOMY

A winter surge driven by the Omicron variant is causing economists to cut their forecasts for the US economy for 2022. The chief economist at Moody’s Analytics cut his first quarter US GDP growth forecast from 5.2% to 2.2%. Economists anticipate that some economic activity will be pushed from the first quarter into the second quarter of 2022. However, on the bright side, healthcare providers are getting better at treating infections and businesses are becoming more resilient.

Applications for unemployment benefits, a proxy for layoffs, are at a half-century low while job openings continue to exceed the number of workers seeking employment. Employers continue to raise starting pay and to offer additional hiring bonuses and benefits. Some employers are looking outside their regular pool of prospects to hire students as part-time workers.

GENERAL RESOURCES

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.

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