Weekly Update – December 9th 2021

What happens to the people who don’t quit or retire during the “Great Resignation?” Those left behind may be picking up additional responsibilities, earning bonuses,  while putting in those extra hours. Over time, managers begin to see the extra hours and work that their team puts in as the norm.  This may also lead to burnout and the loss of knowledge from the workplace as people with specific skill sets are not replaced. While some people thrive on stretch assignments beyond their experience and skill levels, many end up overstressed and lacking confidence in their ability to do a good job.

Having just spent several days attending and speaking at the 10th annual AICPA Digital CPA conference (DPCA21) in Tennessee I see that many in the accounting and small business world have been training their present staff and promoting within, something I believe in wholeheartedly.  I am excited that many of the services we offer to our clients are categorized as Client Advisory  Services (CAS), the feedback from the field is that this is one of the most valuable and diverse services we offer our clients for their peace of mind.

Ap
DCPA21 Business Financing Advisory Panel

It’s always good to have some “take-a-ways” or shared tips from a trip, seminar or conference,

My thanksgiving “take-a-way” was air fryer brussels sprouts with shallots; Emily and Jeff made a batch for Thanksgiving dinner and I tried to duplicate the dish.

Resized 20211203 183114

Mine were not quite as good so I hope they make them for me again next year (hint hint).

I have many great “take-a-ways” from my time at the DCPA21 conference for best practices in CAS I will be sharing as my staff next week.  I am proud that our current processes follow “best practices” but I am looking forward to discussing and using my notes to tweak our current practices and share them with you in future newsletters and blog posts.

For now I am happy to share my pre-conference, pre-flight beach walk photo

Resized 20211204 070700

It was a perfect day for flying, but the skies opened to torrential rains as I traveled to my hotel from the airport. I later heard that unfortunately there was a tornado touchdown outside of Nashville.

20211209 071445

Home sweet home, I had a great time in Tennessee but I am glad I was able get out on the beach this  morning.

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Monthly Child Tax Credit Payments

As a reminder, the deadline to opt out of the December advance Child Tax Credit payment was midnight on Monday, November 29. According to Question H1 in the IRS FAQs, in January, the IRS will send out Letter 6419 with the total amount of advance payments received. The information on this letter will be needed to file your 2021 tax return, where you’ll reconcile the total amount of payments received in 2021 with the amount you can claim on your tax return.

TAX MATTERS

Charitable Contributions for Standard Deduction Taxpayer Returns

For 2021, those of you who have contributed to your favorite charities during the year, can get  benefit from this (similar to what we did for your 2020 tax returns).  For your 2021 tax returns, even if you don’t itemize your deductions, joint filers can deduct up to $600 of charitable contributions made by December 31, 2021.  This is due to the special provision of the CARES Act allows non-itemizers to deduct charitable deductions made through the end of this year. Single filers can deduct up to $300, joint filers up to $600. Contributions must be made by cash, check, credit or debit card, and also include any out-of-pocket expenses incurred by volunteers in the scope of their services to charitable organizations.

2021 Required Minimum Distributions (RMD)

For the tax year 2021, we are back to the old rules for RMD’s.  REMEMBER, if you are over 70, you may need to take your annual required minimum distributions from retirement accounts by the end of the year. If you were already taking distributions before the pandemic, you might have chosen to waive those during 2020. But those RMDs are again required for 2021. If you turned 70 ½ during 2020, you can wait until you turn 72 to begin taking them, thanks to a law change.

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.

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.

FRAUD

A perfect storm of toy shortages, pent-up demand, and the busy holiday shopping season provide opportunities for thieves to take advantage of consumers. During last year’s holiday shopping season, the FBI received over 17,000 reports with losses totaling more than $53 million. This year is expected to be worse. Staying safe requires vigilance. Make sure any website you visit starts with “https” not “http.” The extra s adds an extra layer of security. Beware of offers that seem too good to be true – chances are they are scams. Pay using trusted methods such as credit or debit cards or PayPal, not Bitcoin or Western Union. The latter two methods have fewer fraud protections. Never make purchases over a public wifi connection. Beware of sellers using one name, but requesting that payment be sent to a different name or company, or to a different country.

THE GREAT REASSESSMENT

With more job openings than applicants, many companies are seeing a rash of candidates ghosting them. Some don’t show up for interviews, and some don’t show up for their first day of work. Speed in the hiring process can help minimize the likelihood of ghosting. Other companies send new hires a “Wow” box containing swag and all the supplies they will need to do their job as a way to foster connection with their new company.

The “Great Resignation” hasn’t been evenly spread. States in the West, and those with a high percentage of jobs in arts, entertainment, and recreation have been seeing the highest levels of “quits” during 2021. Hawaii and Montana have seen “quits” increases of 116% and 44%, respectively in September compared to the previous month. In some states, high levels of job openings correlate to high “quits” rates as workers seek higher compensation through lateral moves.

I would say that employers should also consider job conditions like quality of life benefits and team support.  A happy, appreciated employee will tend to stay on and will be an asset when you look to maintain and improve customer/client satisfaction.

REMOTE WORK OPTIONS

About half of all workers prefer working remotely all the time, but a challenge for anyone who works from home is staying focused when even cooking can be a  distraction. Scheduling your most important work around the times of day when you feel most productive, whether that be early morning or late at night, rather than forcing an 8-5 schedule or frittering away the best part of the day answering emails. Establishing boundaries for the times when you prefer not to be interrupted by others at home as well as times when you’re not at work can help prevent work and life from bleeding into each other.

LEADERSHIP

Seeking to influence people for the sake of influencing them generally doesn’t work too well, according to this article in Entrepreneur, which advocates for a more compassionate approach to leadership. Rather than trying to convince or cajole people into action, active listening and acting on that listening helps employees connect with leaders. Build trust by getting to know team members and asking them for input on what they see works, and what does not. Appropriate acts of appreciation help encourage people to continue to do their best work.

ECONOMY

Two separate jobs reports for November contain seemingly contradictory results: a survey of businesses shows a relatively low seasonally adjusted increase of 210,000 jobs for November, while a separate survey of households showed an increase of 1.1 million more people employed in November than October. Some of the differences may come from seasonal adjustments performed by the Labor Department to reduce volatility in the labor force: the unadjusted numbers showed an increase of 778,000 more jobs in November. Anecdotal evidence from employers seems to indicate that people are more willing to return to work.

Meanwhile, U.S. Treasury Secretary Janet Yellen cited uncertainty about the newly emerged omicron variant of COVID-19 as a possible brake on economic growth in the near term. The new strain could exacerbate ongoing supply chain problems and boost inflation, or it could also depress demand and ease inflation.

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!

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