COVID-19 Weekly Update – January 13th 2021
The COVID-19 pandemic may have an economic impact far beyond last year and the next two or three. A recent report by the World Bank projects global economic growth to slow to 1.9% per year from 2020-2029. Prior to the pandemic, growth was projected to be 2.1%, down from 2.5% over the previous decade. Investments in infrastructure, diversifying economies and supporting the employment of women may help to mitigate or reverse that slow growth, according to the bank.
At the individual level, improving your skills in leadership and becoming a better person can come through reading books. To get started, this article in Forbes recommends 21 books to make 2021 your best year yet.
Economic Impact Payments
The IRS has a new set of Frequently Asked Questions covering the latest round of payments. They have also updated the Get My Payment tool so taxpayers can get information about how their payment was sent and the date that it was sent. If you received your first payment by direct deposit, you most likely have already received it, provided that your banking information has not changed. Some people who received their earlier payment via paper check will receive their payment by prepaid debit card, and some who got debit cards will receive paper checks in this round of payments. You can also find more details on the IRS website.
Please be reminded that just because you received your full stimulus payment the first time around, does not mean that you were or are actually eligible for another one. I love this tool offered by Kiplinger, just click through and enter your data for a quick answer on eligibility.
If you’re eligible for a payment, but don’t receive it by the end of January, we will assist you in claiming it as a Recovery Rebate Credit on your 2020 tax return. If you’re eligible for a bigger payment than you received, you can claim the difference on your 2020 tax return. We are including a worksheet for you to give us the details on both stimulus payment as part of your 2020 tax preparation packet and will discuss this during your exit appointment. Have no fear as we love to quote The Little Rascal’s “we’re way ahead of ya sister”.
Paycheck Protection Program 1 and 2 (PPP & PPP2)
The new round of PPP funding opened on Monday, January 11, 2021. This article in the Journal of Accountancy has full details on eligibility and requirements for forgiveness. Starting on Monday, January 11, first-time borrowers can apply, and on Wednesday, January 13, second-time borrowers can apply. These initial rounds are available only through community financial institutions. At some unspecified date in the near future, the program will open up to all other participating lenders. The program will be open through March 31, 2021.
We have been studying the new legislation and guidance on both funding and forgiveness and have begun testing software that will hopefully streamline the application and forgiveness process, enabling our clients to get the funds quicker than the first time around.
First-time borrowers can receive up to $10 million while the second round of loans is limited to $2 million. Borrowers in the second round must have already spent all the funds they received previously and must have experienced at least a 25% reduction in gross receipts in at least one quarter of 2020 compared to the same period in 2019. Loan amounts will be forgiven as long as at least 60% was spent on payroll. Additional expenses are now eligible, including amounts spent on personal protective equipment and workplace modifications to comply with COVID-19 safety regulations, as well as property damage due to looting in 2020 that was not covered by insurance. The SBA will also be providing a simplified forgiveness application for loans under $150,000. Hopefully the updated 3508S forgiveness application for borrowers of less than $50,000 will be available soon.
LIVING WITH THE PANDEMIC
Small business challenges
Even with the unemployment rate still at 6.7%, and initial claims for unemployment down sharply from a peak of seven million in March, manufacturers are struggling to find enough people to keep their operations going. Executives and janitors are being asked to staff assembly lines, some companies are requesting that employees cancel upcoming vacations, and starting pay is being boosted, all in an effort to keep making the things they make. Some employees have been lured away by e-commerce jobs that pay more, while others have family obligations that make a return to work difficult. Other employees are wary of workplace practices that they feel may increase the likelihood of COVID-19 transmission. Another cause of absenteeism is the surge of cases in many parts of the country, which keeps infected workers and workers who have come in close contact with other infected people in quarantine.
As our firm is entering what we expect to be yet again “the worst tax season ever” I have set down rules that I recommend everyone follow:
- take at least one day off a week; no more 24/7
- stop for lunch and don’t eat it at your desk
- take a break during the middle of the day if you are overwhelmed or feeling too stressed
- try time blocking (I keep a chart on my desk to remind me, but it doesn’t always work)
- don’t let those “quick one minute client calls or emails” dictate your schedule; our clients know we are here for them and nothing is that critical that it can’t wait until you get to the right stopping point
- mandatory “me time” every day. For me that’s a workout hopefully as sunrise on the beach (yesterday’s mid-run/walk photo)
Working from home
For organizations that provide creative work, Slack and Zoom can pose a double-edged sword. While they make remote work possible, they can also pose a distraction that keeps people from doing their best work when their best focus time is interrupted. This article in Fast Company describes the strategy that a PR and marketing company used to rein in unneeded distractions. First, they set rules for when responses were expected with different types of communications: Slack messages were to be answered within a day, texts within an hour or two, and phone calls were only to be used when an immediate response was needed. Next, they split their workday into blocks for uninterrupted creative work and for meetings. The result was a decrease in stress and internal conflicts with an increase in efficiency.
The future of the office
Even before the COVID-19 pandemic, work was beginning to shift from central offices or complexes to satellite offices, co-working spaces, and remote workers in home offices. That trend was accelerated, and the post-COVID-19 world may mean that some offices will become residences, and that more residential areas will accommodate workplaces. Just think about how much commuting time we have freed up and how that can best be utilized.
Tech trends for 2021
Many of the tech tools that made our lives easier in 2020 had been around for some time, but became more widely used when we had to stay home and wanted solutions with less personal contact. Here are four tech trends for 2021 from the New York Times:
- Chatbots and augmented reality will improve the online shopping experience.
- Improvements in wi-fi technology will make it easier to connect our multiplying devices without drops in performance.
- New radio technologies that pinpoint locations of objects may lead to additional ways to pay without contact.
- Tech apps will virtualize our work environments and improve self-care.
Some of this tech may lose popularity when (and if) we return to some semblance of “normal,” but the tools that make our lives easier and better over the long run will likely stick around.
I have been asked to contribute to yet another “best tips article” for accounting firms. This one is due Friday “What is your #1 timesaving tip for 2021?”. I know you are probably thinking it will be a software or use of technology, but I am thinking…
Leading a team remotely is different from in-person leadership. Zoom happy hours with 40 people staring at each other can’t replace the sense of belonging that comes from casual connections at the water cooler or in the office break room. The remote world gives introverted leaders an advantage because the small group connections or one-on-one conversations that they feel more comfortable with are better at fostering a sense of camaraderie than big online meetings with the whole team.
We have held several Sunday morning breakfasts over zoom where we catch up with each other as we cook and eat and then swap photos of our chocolate chip waffles or “gashouse eggs” or avocado toast. Sometimes we even invite the kids and pets.
- 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
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- The CDC also has recommendations for businesses and employers
- 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 Atlantic has a state-by-state coronavirus tracker
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!