Weekly Update – July 1st 2021
As the pandemic recedes and businesses reopen, millions are quitting their jobs rather than return to their pre-pandemic routine. Some are seeking out positions where they can be fully remote, while others, particularly in the leisure and hospitality sector, are seeking better work-life balance, higher pay, or a less stressful work environment. The lengthy experiment with remote work has changed what people think about where and how they want to work. Many people are seeking work that accommodates their desired lifestyle, rather than adapting their lifestyle to the demands of their jobs.
I am happy to say that as we have enjoyed a hybrid office for so many years we were able to work out some many “bugs”. We learned and adapted after Hurricane Sandy distroyed our office and many processes we instituted helped us adapt to the pandemic. My May 5 2020 blog post “How Hurricane Sandy Prepared Us to Work During the Covid-19 Pandemic” highlighted a panel discussion webinar for accountants I participated in. I have found that with proper communication, expectations, good processes and assessing the needs of the business owner, staff and clients/patients/customers it can be done.
Today we will have a “full house” in the office. Myriam arrived from Florida Monday, Elizabeth arrived from Georgia last night; both of them will be on site through the 10th. Monica who works remotely from her home office in New Jersey, Ramona who works remotely from her home in Queens, Raquel and I will all be together for an in office huddle, a photo shoot for our holiday card and website, then we’ll be off to lunch at a local restaurant to catch up…
Myriam, Raquel and I enjoyed a lunch of my farm to table salad with grilled salmon and asparagus as we reviewed our process for gathering the accountable plan paperwork for clients.
Myriam, Elizabeth and I posed for a selfie this morning before we set out for a walk on the beach. It’s so nice to be together again, even if it’s just for a few days.
I hope that you and your staff can get together for some quality time as well. Enjoy the long holiday weekend.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Shuttered Venue Operators Grant
Even though the SVOG was signed into law December 27, the SBA has only recently begun sending money out. By the SBA’s own most recent report, only 1,445 grants have been awarded out of the 14,416 applicants. A total of $11.6 billion has been requested, but so far, only $833.4 has been awarded. Unlike the Paycheck Protection Program, which got funds in the hands of business owners quickly, this program has been plagued with bureaucracy. Some venue operators have even been incorrectly notified that the SBA had deemed them dead. No mechanism exists to appeal the SBA’s decisions, so some venue operators are hesitating to sign off on awards out of fear of locking in the wrong amount.
Paycheck Protection Program (PPP)
Banks are now accepting forgiveness applications for PPP #1 and these seem to be moving through the system quite well. We have seen how critical it is to co-ordinate eligible expenses to balance loan forgiveness with other stimulus related tax credits and benefits and are grateful to be part of the process. Here’s a link to the IRS summary highlighting code section 206(c).
Monthly Child Tax Credit Payments
The IRS has created a portal for parents to update their information for the advance Child Tax Credit. At this point, the portal only allows parents to check on their eligibility, view their upcoming payments, or to unenroll from receiving advance payments. According to updated IRS FAQs, this portal will eventually allow parents to update mailing addresses, update banking information, add or subtract qualifying children, report changes to marital status, and report changes to income. Starting in July, the IRS will be sending out monthly cash advances of up to $300 per qualifying child for the child tax credit. For more information, taxpayers should consult the IRS webpage for this credit. For more information, or to “un-enroll” you can consult the IRS webpage, which has Manage Payments and Non-Filers Information Submission tools. Here’s a link to a recent Journal of Accountancy which describes the portal and the opt-out option process.
IRS AND TAX MATTERS
Tax minimization plans take into account current tax laws which seem to be changing more frequently than ever. We have been focusing on tax minimization planning for some time, please check out our new website which focuses on tax minimization planning.
We will continue to share articles and ideas on both sites, such as this recent AccountingToday article highlighting how executive clients can outrun tax increases with deferred compensation, by not immediately taking their payouts.
A common critique of remote work is that it stifles the creativity and collaboration that come from chance meetings with co-workers. However, researchers who study this issue say there is no evidence that working in person is essential for creativity, and that it may even hurt innovation. Research has shown that contemporary open offices lead to 70 percent fewer interactions between co-workers, who wear headphones and avoid conversations so they can focus on their work. During the pandemic, many creative professionals have been surprised by how effective remote work was. Requiring in-person work can exclude valuable contributors who may be too far away, shy, or who have caregiving responsibilities. Using apps like Slack can allow people who would otherwise be uncomfortable speaking up or who would not have been invited to a small brainstorming session to contribute their unique perspective. However, in-person meetings between co-workers strengthen relationships, which helps in building trust for collaboration. Rethinking the workplace of the future will require careful thought to encourage creative thinking while not penalizing those who choose to work remotely.
Should you have a video meeting or can this topic be handled over email instead? This post from The Enterprisers Project covers seven questions to determine the best platform for a particular task. For example, “Can you articulate the purpose of the meeting?” and “Is it a glorified status update meeting?”
In the post-pandemic era, remote work may become the new signing bonus. Employers are reevaluating what roles and what parts of what roles must be performed in the office and which can be done remotely or with a hybrid work schedule. After a year of working remotely, employees are demanding the flexibility of remote work and are willing to take their talents elsewhere if remote work is not an option. Some employees favor an all-remote work environment over a hybrid schedule because there is less chance of treating fully remote workers as second-class citizens.
REOPENING THE OFFICE
Did you bring on new employees during or shortly before the pandemic? Now, as offices begin to re-open, is a good time to consider re-onboarding hires who started remotely. A solid process for onboarding improves retention and orients employees to company culture. Bringing this group of new hires together allows them to bond with each other. When they come back in the office, leave a small gift at their desk to make them feel welcome. Make sure to give them a tour of the facilities, and encourage their managers to have an in-person one-on-one and to check in with them regularly.
This week, Paychex a third party payroll service released statistics regarding small business employment growth, saying that “small businesses continued to ramp up their hiring this month, particularly in the leisure and hospitality sector, as the economy recovers from the pandemic”. The Paychex | IHS Markit Small Business Employment Watch, released Tuesday, found small-business employment growth increased 0.26% in June. The related Small Business Jobs Index grew 4.53% in the second quarter of 2021. Hiring in the leisure and hospitality sector grew 12.65% in the second quarter. Hourly earnings growth grew slightly, from 2.82% in May to 2.84% in June.
LIFE IN THE POST-COVID ERA
The pandemic forced many organizations to quickly pivot and find new ways to serve customers. Some of these changes may persist, as they provide a better customer experience, and may allow organizations to pursue a blue ocean strategy in an area where there are few competitors. The Four Questions Framework is a blue ocean tool to help rethink strategy and create a more powerful company for the future. Briefly, the four questions are:
- Which factors that the industry takes for granted should be eliminated?
- Which factors should be reduced well below the industry’s standard?
- Which factors should be raised well above the industry’s standard?
- Which factors that the industry has never offered should be created?
Considering these four questions can help organizations develop new ways to reduce costs, and provide better service to customers.
While working remotely last year, nearly a third of employees picked up bad cybersecurity habits or workarounds to circumvent internet security protocols. This may mean that when an employee returns to the office, they may inadvertently introduce a virus or another cyberthreat by connecting an infected personal device to a their corporate network. While educating employees about the dangers of clicking on links in phishing emails goes a long way towards eliminating many threats, IT leaders need to also create a security culture to support safe work behaviors.
Those bad behaviors can leave companies vulnerable to ransomware attacks. While attacks on large targets receive extensive media attention, the majority – 50-70% – are aimed at small and medium-sized businesses. Nearly 60% of those businesses fail, and about 80% are attacked a second time. A few simple tips can help keep your business safe. First, recognize that every industry and every size of business is vulnerable. Keeping all files backed up can help return to normal quickly. Make sure remote workers know how to spot phishing attempts, use two-factor authentication, and keep security software updated. Create a plan beforehand for dealing with a ransomware attack. Even if you comply with the hackers’ demands, you will almost certainly lose some data. Don’t rely on law enforcement to recover your ransom payments.
The CDC has extended a federal moratorium on tenant evictions through July. However, landlords are also feeling the pinch as they are unable to pay their bills. Delivery of the $47 billion in rental assistance has been slow and uneven.
Workers in states that have already cut off expanded unemployment benefits are returning to work more quickly than in states that are continuing those benefits. However, some workers are not returning due to challenges with daycare and continuing fear of contracting COVID at the workplace.
- IRS resources for stimulus payments:
- Use the Get My Payment tool to check on EIP payment status
- Eligibility and general information about Economic Impact Payments
- A list of frequently asked questions for stimulus payments
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- 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
- Intuit QuickBooks has a dedicated page to help small businesses
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- Fast Company has a listing of the best productivity apps for 2020
- Entrepreneur put together a listing of free tech resources for remote work
- 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 Louvre has digitized 482,000 artworks from its collection
- PC Magazine explains how to carry your vaccination card on your phone
- How to create a strong password
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.