Weekly Digest – 20 January 2021; Looking Forward to Another Historic Inauguration
Vaccines for the coronavirus are now being administered around the country, but that may not mean an end to wearing a mask. This article from Kaiser Health News lists five reasons to keep wearing a mask, even after receiving the vaccine. The top two reasons are that no vaccine is 100% effective and that vaccines don’t provide immediate protection. According to one of the experts cited the best way to end the pandemic is to use masks, social distancing and vaccines: “The three approaches work best as a team.”
Working together as a team is not only how we defeat the virus, but it’s also how we build a better world.
I am so fortunate that I can get out onto the beach most days and over the weekend I was rewarded for braving a cold windy NYC January beach day when I “ran” into one of my daughters best friends. We were able to catch up and touch hands (with gloves on) standing 6 feet apart. So glad to see you “Rachie”.
The Biden Plan
President-elect Joe Biden will be sworn in as the new President this week and plans to hit the ground running. Here are some highlights of his proposed stimulus plan:
- An increase of $1,400 to the $600 stimulus payments that are being processed now
- Federal unemployment benefits would increase from $300 to $400 per week
- Extending the moratorium on evictions and foreclosures until September 30
- $350 billion for state and local governments
- $130 billion to help schools reopen
- $50 billion for COVID-19 testing
- $20 billion to help with a national vaccination program
- Increasing the Child Tax Credit to $3,000 per child and making it refundable
His package also includes a push to increase the federal minimum wage to $15 per hour. Many leading economists warn that additional support from the federal government may be needed until the pandemic has subsided and people can safely return to work.
Economic Impact Payments
During the first round of stimulus payments, many people who had used TurboTax, H&R Block, or another retail tax preparation service discovered that those payments were going to the wrong accounts. The same snafu hit again with the current round of payments, but those companies are sorting out the problem much faster this time around. The IRS has updated the Get My Payment tool so taxpayers can get information about how their payment was sent and the date that it was sent. Taxpayers who do not receive their payment via direct deposit should be on the lookout for either a paper check or a prepaid debit card. You can find more information on the current round of payments by checking the IRS Frequently Asked Questions.
If you’re eligible for a payment, but don’t receive it by the end of January, your only option is to claim 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.
Paycheck Protection Program (PPP) 1 and 2
The latest round of the PPP opens to all lenders on January 19 after opening first to smaller banks and community financial institutions. This new round is open to businesses that did not receive funding in the previous round as well as to businesses that are seeking a second loan.
This article in the New York Times answers questions about the new round. For first-time borrowers, the loans are capped at $10 million. These borrowers need only attest that “current economic uncertainty makes this loan request necessary.” For the second round, loans are capped at $2 million, and must demonstrate a decrease of at least 25% in gross receipts compared to 2019. Borrowers must use at least 60% of the proceeds to pay employee wages. The remaining 40% can be used for rent, utilities, and mortgage interest payments, as before. The new stimulus law expands the categories of allowable expenses to include payments to suppliers, PPE equipment for workers, and certain kinds of property damage. Loans will be forgiven if proceeds are used for these approved expenses. Loans may not be funded as quickly in this round because lenders are required to do more vetting to prevent fraud and misuse.
More details are available at the SBA website.
We are grateful to the AICPA who, in conjunction with Biz2Credit had created a software/system subscription for CPA firms. The system includes:
- a secure portal for supporting document uploads,
- a dashboard so we can follow the application through the stages,
- and e-signature readiness so our clients can sign and file right on line.
We have signed up for this software in order to expedite the process for our clients and have access to the status dashboard.
Normally the tax filing season begins in mid to late January, but this year, the IRS will not begin accepting returns until February 12. Reasons for the delay include new programming needed to incorporate the Recovery Rebate Credit on tax returns. This means that some early filers will not receive refunds until early March. Because the IRS is still processing the backlog of mail that accumulated when the agency shut down last spring, electronic filing is highly recommended.
We are thrilled that our local business clients will not be taxed on their EIDL and PPP1 and PPP2 funds. Last week NYS announced announced that they would conform to the IRS treatment, allowing expensing of the payroll and other allowable costs paid with forgiven PPP funds.
With the passing of the Consolidated Appropriations Act of 2021 the Employee Retention Tax Credit has been expanded. The rules are quite complex but this refundable credit will give those eligible businesses some much needed cash flow in the next six months.
With all that is new we seem to be spending half our days in webinars and conferences and discussions with each other and our clients. Last week I attended virtual meetings on Capital Hill and was able to meet with Senator Chuck Schumer, Senator Gillibrand’s legislative aid Caitlin Rooney, and my local congressman Gregory Meeks’ legislative aid. I was able to present tax issues and thank them for their hard work on our behalf. All this change is exciting and we really appreciate our lawmakers for understanding the plight of small business and passing these laws.
LIVING WITH THE PANDEMIC
Working from home
Is working from home more productive than in an office? Surveys cited by an article in the Wall Street Journal indicate that it has been for some people. About 41% of survey respondents said it was better, compared to 43% who saw no difference, and 15% who thought it was worse. Before the pandemic, only about 27% would have preferred working at home, while about 80% of those working at home in June and July of 2020 would like to continue working at home at least three days a week after the pandemic subsides. However, in another survey, the majority of those working at home seemed to be working more than the pre-pandemic average of 8.5 hours per day.
Technology can help make the hours spent working at home more productive. This article in Fast Company describes seven hardware and software tools used by a long-time remote worker. Using an inexpensive television as a large monitor rather than just a laptop is one of his suggestions, as is investing in a high-end mouse rather than relying on a laptop trackpad. Saving passwords on a cross-platform password manager like LastPass also makes it easier to log in and out of the different applications we use every day.
The Future of Work
The Wall Street Journal’s latest issue of The Future of Everything focuses on the future of work with a wide-ranging assortment of short articles. What will our desks be like? Mobile, virtual, reclining or converting into modular shelf units? Or will private desks disappear in favor of shared work areas where team members can meet when they’re in the office? Managers in the future may spend more time coaching employees and less time ordering people around.
- 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!