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 |  Bizink  |  American Rescue Plan Act,  ARPA,  covid-19,  IRS form 6419: Advance Child Tax Credit,  IRS On-Line Services,  Omicron Variant,  tax advice for 2021,  Tax Season 2022

Weekly Update – February 10th 2022

How sad when we consider that more people in the world are now sick with the same illness than at any time since the 1918-1919 influenza pandemic. By mid-January, about one in five Americans had contracted the Omicron variant, a number which could double by mid-February. While an estimated 80-90% of those infected with the highly contagious Omicron variant are asymptomatic, the widespread of the virus means that many millions of people have been sick. Businesses around the globe are dealing with an unprecedented number of people who are out sick, staying home to care for sick family members, or required to quarantine because of a positive test. Fortunately, experts predict that the current wave will ease by mid-March, as cases are trending downward.

My immediate family and several close friends are among the number recently infected.  We all had mild cases which felt like a cold and were able to quarantine while working remotely, but it is still so scary.

This morning 37 degrees and no wind, it really feels like spring…

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It feels like spring

Hoping you are able to enjoy the nice break in winter weather too.

The New York State Mask Mandate has Expired

The big news in New York State is the expiration of the mask mandate.  I don’t remember when it started, but it ends today.  Governor Hochul announced that the state will end a Covid-19 mask mandate in most indoor public settings effective Thursday, February 10, 2022. Masks will still be required in public schools, healthcare facilities, certain types of shelters as well as public transit. Private companies will be free to set their own masking rules for their employees and visitors to their businesses.

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Monthly Child Tax Credit Payments

Since late December, the IRS has been mailing out letters to people who received advance Child Tax Credit payments. But if your Letter 6419 doesn’t match the payments you received, there are a few steps you should take. First, check your IRS Online Account and compare that amount with the payments you received. If that matches, use the amount from the online account when you file your tax return, not the number in Letter 6419. If the online account amount does not match the payments you received, you should request that the IRS trace the missing payment or payments.

Using the correct amount will help ensure that refunds are paid promptly within 21 days. As a reminder, couples who filed Married Filing Joint will each receive a letter reporting half of the payments received. When filing 2021 tax returns, married couples will need to combine both amounts when they file their joint return. For more information on the expanded child tax credits see the IRS FAQs.

Please remember that if you are married, the letter each spouse receives will show half of the payments.

TAX MATTERS

IRS Overload

The IRS opened its e-file portal in mid-January, signaling to most the start of tax season 2022. Then just a few days later, announced they were suspending the mailing of certain automated notices because of a backlog in processing returns. They are reporting nearly 15 million pieces of unprocessed mail including 6 million unprocessed individual returns, including those for 2020 with.

Looking For Work?  The IRS is Hiring…

The IRS is shuffling employees around in an “all-hands-on-deck situation” in an effort to deal with the massive backlog of tax returns and other paperwork.  Problems processing paperwork began when the agency largely shut down at the onset of the pandemic and have resulted in delayed refunds and confusing automated notices.

IRS Looks for Ways Other Than Facial Recognition to Confirm Taxpayer Identity

In a recent news release, the IRS announced it will “transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts.” The authentication method is already in use and we were so happy to have a way for our clients to create an online account and obtain an identity pin number for use with e-filing tax returns.

The notice further states “During the transition, the IRS will quickly develop and bring online an additional authentication process that does not involve facial recognition”.

I tested the system in mid-January and found it to be similar to signing up for my Clear account; a bit more time consuming, but better than hand delivering a paper tax return to an IRS office.

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New York Times Report

CYBERSECURITY

Did you know that companies can track you inside your email box? Companies can put bits of code inside emails that let them know if you opened an email, and when, where, and what device you used. Many of those email trackers are hidden inside images embedded in emails, so blocking images can help stop tracking. Using a privacy protective email such as Apple’s Mail, ProtonMail, or Tutanota can also help. Some privacy experts recommend treating all marketing emails as spam. Avoid opening them, block them, or unsubscribe where possible.

PERSONAL FINANCE

One of the most important financial decisions for your future is deciding when to claim your Social Security benefits, and various tech tools are available to help you make that decision. Benefits are available as early as age 62, but your annual benefits increase in amount each year you wait until age 70. Married couples can take advantage of spousal benefits, which can boost a household’s lifetime benefits. Divorced people and survivors are also eligible to claim benefits. Waiting as long as possible can increase lifetime benefits substantially. Setting up a free account at the Social Security administration’s website is a good first step toward understanding the benefits available to you.

GREAT REASSESSMENT/RESIGNATION

In a period of scarce labor, it may be tempting to reach informal agreements with competitors to not poach each other’s employees or to keep wages the same across companies so that everyone can hang on to the employees they have. But those informal agreements can land employers in hot water with the Department of Justice or the Federal Trade Commission. The personnel within companies who are responsible for enforcing noncompete agreements can be held criminally liable. Training and education are required, and legal counsel may be needed to undo any prior anticompetitive agreements.

While many have cited the lack of physical contact with remote teams as the reason for a lack of innovation, other experts are citing another cause: that knowledge workers simply have too much work to do. A side effect of the Great Resignation is that key tasks of departing workers are now distributed to the remaining employees, two-thirds of whom report that their workloads have increased significantly since the pandemic began. As workloads increase, employees have less time to interact with others outside of their immediate team members and less time to think creatively or to innovate.

REMOTE AND HYBRID WORK OPTIONS

Should fully remote workers receive the same pay they would if they lived in the expensive city where their company is located? Businesses are split on this issue. Many Big Tech firms, including Alphabet, Amazon, Apple, and Microsoft, have announced that they will slash pay for workers who move out of the high-cost areas where those firms are located. However, other companies such as Zillow and Hubspot are paying their employees the same, regardless of where they live. Higher pay allows these firms to access a deeper talent pool and to retain workers amid the Great Resignation. However, keeping the same pay for all team members means that companies may risk losing local employees that are necessary in order to maintain a viable hybrid workforce.

Starting a new job as a remote employee requires a proactive approach for success. Instead of meeting and interacting with new colleagues at the water cooler or in the break room, reach out to people recommended by your manager and close team members for a virtual coffee chat to establish lines of communication. Set up a clean, distraction-free workplace in your home, which need not be in a separate room, but can be a spot at the kitchen counter. Draft a 30/60/90 day action plan with your manager outlining the goals you want to accomplish and the steps needed to achieve them.

ECONOMY

Despite the Omicron surge, nonfarm payrolls rise 467,000 in January, well ahead of Wall Street’s estimate of 150,000. However, the unemployment rate also rose slightly to 4%. At the same time, revisions for prior months sent jobs numbers higher: December’s initially reported gain of 199,000 was recalculated as 510,000, and November’s previous report of 249,000 increased to 647,000. The biggest gains for January were in leisure and hospitality. Earnings also rose by 0.7% in December; however that increase did not keep up with 7% inflation for the same month.

Worker absences caused by the Omicron surge are preventing some companies from growing and cutting into normal operations. Companies such as McDonalds have been forced to curtail hours due to staffing shortages. About 6% of the U.S. workforce, or 8.8 million workers, were absent during the first 10 days of January for Covid-related reasons, impacting the ability of manufacturers to fulfill orders.

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.

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