+1 718-318-2677
+1 718-318-2677

Weekly Digests

Weekly Digest – August 5 2021

The Delta variant is more contagious than other virus variants, which is changing the public-health advice on preventing its spread. With the previous strains, a rule of thumb was that it took 15 minutes of close contact with an infected person to become infected. With the Delta variant, infection may happen in less than five minutes, and possibly with only fleeting contact, such as in an elevator. Recent studies show the Delta variant is about 50% more contagious than the alpha variant, about as contagious as chicken pox. While current vaccines are less effective against the Delta variant, vaccinated people in general have less risk of serious illness. It appears that vaccinated people may still be able to transmit the virus to others. For these reasons, the CDC is once again recommending that people who are vaccinated begin wearing masks indoors in parts of the country with rising levels of covid-19 infections.

This news is so scary especially as we were all looking forward to getting back to some sort of normal.  I feel fortunate that I am able to walk to the beach or work on my garden and share my bumper crop of  blackberries and figs with friends and neighbors.

20210801 072450
figs & berries

The best are the photos and texts of the delicious dishes they are making with them…

Img 4540
Joe’s fig dish 🙂

I hope we can all safely enjoy the rest of the summer!

20210724 055537

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Paycheck Protection Program (PPP)

Starting August 4, many businesses that received PPP loans of $150,000 or less will be able to apply for forgiveness directly with the SBA rather than through their bank. To be eligible, the borrower’s bank must have opted in to the process. Eligible businesses will receive an email from the SBA with a link to a new portal where they can apply for forgiveness.

As of this week our firm has assisted all our clients in the filing of PPP #1 forgiveness applications and those have who have been submitted have had a relatively quick response and all for 100% forgiveness!

Employee Retention Tax Credit (ERC)

We accounting professionals have been asking for more guidance regarding the ERC and finally yesterday we received some.   Now we need to analyze the impact on our clients and  their businesses.  This article posted by AccountingToday this morning also indicates that congress may end this tax credit to help pay for the bipartisan infrastructure plan.

Monthly Advance Child Tax Credit Payments

If you’re behind on taxes and the IRS has already begun to levy your bank accounts to pay down the debt, IRS employees have been instructed that they are not to levy any amounts received as an advance Child Tax Credit payment through the end of 2021.

For many families, opting out of the monthly Child Tax Credit payments makes sense.  For those of you who rely on your refunds as a “forced savings” or whose tax filings result in a small refund or balance due, you may be in a VERY DIFFERENT POSITION come April 2022.  Those tax credits which act as additional payments will be reduced by these advanced payments.

Divorced parents who claim their children in alternating years as part of a divorce agreement may want to opt out, as the advance credit payments are based on 2020 tax returns.  Divorced parents may receive an advance payment for a child they will not be claiming when they file their 2021 tax return and may end up owing taxes when they file in 2022.

If you want to opt out of future payments, you must use the IRS portal for the advance Child Tax Credit by the deadline for the next month’s payment. The next payment is scheduled to go out August 13, and parents must have unenrolled by August 2 to opt out of that payment. To opt out of the September 15 payment, you must unenroll by August 30. Both spouses must separately unenroll if they file jointly; otherwise, they will receive half of the maximum allowed payment. Check out the IRS FAQs where you’ll find everything you need to know about opting out in Section J.

At present, the portal only allows taxpayers to verify enrollment status, update banking information and to unenroll from payments. Eventually, taxpayers will also be able to update marital status, dependents, and income for 2021 and to re-enroll if they have previously unenrolled. For more information, taxpayers should consult the IRS webpage for this credit.

Paid Leave Credits

The IRS is expanding the COVID-related paid leave tax credit to include time that workers take off to take family members to get the COVID vaccine or to help that family member recover from the effects of the vaccine. This expands the list of COVID-related reasons that qualify for a payroll tax credit. Leave must be taken by September 30, 2021 to be eligible.

Shuttered Venue Operators Grants

So far the SBA has awarded $7.5 billion in grants to live entertainment venues and other entertainment-related business that saw a decrease in revenue during the pandemic. Applications for $12 billion of the $16.25 of allocated funds have been submitted for the program so far. This means that applicants who were previously rejected or who received less than they applied for can appeal those decisions through mid-August.

Tax Issues

Corporation Responsible Party Registration

Have you moved or has the leadership team at your organization changed since you applied for the Employer Identification Number (EIN) for your business? If so, you may be receiving a letter from the IRS prompting you to update the contact information and the responsible party for your organization. The IRS requires up-to-date information for a business’ responsible person for businesses in case of problems with tax administration or payment.

Backlog on IRS Filings

Most taxpayers are aware that the IRS backlog of 35 million pieces of unopened and unprocessed mail sent since the pandemic began is slowing the payment of refunds and processing of paper-filed returns and correspondence. Anyone who has tried to call the IRS has likely spent a frustrating time on hold or has been disconnected.

IRS Hotline Answering System is Frustrating

Only 3% of people calling the IRS for help with their personal tax return have spoken with a representative.  We tax professionals have access to a special hotline but most recently we too were unable get through to speak with a representative.  There is also a backlog in the IRS process for approving third parties.  We prepare and submit a power of attorney which enables us to speak with the IRS representative on your behalf.   Processing these approvals has been taking three to six weeks instead of the IRS’ internal benchmark of five days. While the IRS recently opened an online portal for uploading those requests, the entire approval process is something of a black hole, and we  are finding that a tax authorization has not been granted when we call into the IRS, hoping to resolve a tax matter.

REOPENING THE OFFICE

The rapid spread of the highly contagious Delta variant of the corona virus is prompting some companies to delay their plans to bring employees back to the office. Google and Apple have announced that their workers will return in October instead of September, and Lyft and Asana have both pushed their return dates to February 2022. Some public health experts are warning that even February may be too soon.

Before the pandemic, many business owners felt that certain tasks and functions needed to be done in person, and that daily huddles and office meetings were the method of choice to accomplish keep staff in the loop. But after a year or more of video chat meetings, many more have realized that many of those meetings are not necessary. This article in the Harvard Business Review includes six questions to ask before deciding to schedule a meeting. For example, “Should this be a meeting?” Some tasks can be accomplished just as well asynchronously or in writing, but those that require everyone’s creative input may be more effective in a group meeting.

Hiring and Retaining Employees

Employers are having an increasingly difficult time finding people to fill job openings, according to a study of job postings performed by Axios. Almost 10% of job openings in the health care field include terms like “urgently” as do 4.7% of construction job postings. Hiring incentives are being offered for truck driving, nursing, and veterinary jobs.

What employees most value in their compensation and benefits packages has changed, but the offerings from many employers have not adapted to those changes. Hiring the best and retaining them may mean rethinking reward strategies. A standardized, one-size-fits-all approach won’t work in today’s increasingly heterogenous worker population. Many employees are willing to trade up to 25% of their salary for a better work-life balance, and many new hires will choose a company that offers strong training and career development options even if they will be paid more elsewhere. Focusing on productivity instead of hours spent at work, and discussing what’s important to your team can help you craft options that work for each person.

ECONOMY

Of the $45 billion in rent relief allocated by Congress, only $3 billion has been distributed; with the expiration of the moratorium on evictions at the end of July, many renters may soon be scrambling to find a new place to live. States are using different processes to distribute the funds, and many tenants do not know that they are eligible for relief. Landlords are also facing financial pressure with the loss of rental income.

Although the world economy has returned to its pre-pandemic size, poorer countries are still lagging. During the second quarter, the eurozone economy grew at 8.5% while the US economy grew at 6.5%, in a speedier recovery that from most other recessions, and despite having seven million fewer workers in the US. However, in Asia, COVID outbreaks combined with slow vaccination rollouts have slowed factory output, and supply chains still have not recovered to pre-pandemic activity.

While wages in the US have been rising quickly, those income gains may be erased by inflation. In June, average hourly earnings rose 3.6% but the consumer price index (CPI), which measures inflation rose by 5.4%, resulting in a net loss of 1.7% of buying power. However, because the consumer price index measures an aggregate of many items, not all households will feel the pinch. One of the biggest contributors to the increase in the CPI is the price of used cars and trucks, which has risen by 45% since last June. During the same period, food prices have risen by only 2.4%.

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.

Want to grow your business? Our Complimentary Resources will Help