Weekly Update – May 19, 2021
Starting this week I am renaming this weekly blog and newsletter. For now you will still be able to find it in the “Latest Updates” in our Covid-19 Resources and our Blog.
For many people, large, life-shattering events can provide break point for making dramatic life changes that improve life going forward. Arthur Brooks, writing for The Atlantic, suggests that the pandemic provides all of us with a once-in-a-lifetime opportunity to do just that. To take advantage of this, Brooks suggests dividing a paper into four quadrants, with columns for things you like and things you dislike, and rows for pre- and post-pandemic. In this matrix, list the aspects of work, life, and relationships that have changed since the pandemic. With the goal of happiness in mind, consider these two questions: “What did I dislike from before the pandemic and don’t miss?” and “What do I like from the pandemic times that I will miss?” This list will help you identify things from before the pandemic to consider cutting out of your life, and things from the pandemic era that you want to continue.
I am not sure that we need to plan this way. For me I know for certain that now that our personal tax return filing and extension due date has passed as restrictions are lifting for those of us who are double vaccinated it’s time to get back out into the garden to start turning my compost into the soil for planting and start picking my herbs and early lettuce…
I seeped some sage and mint (organic) and added it to my tea
I never eliminated my time walking and running on the beach, it was always pretty empty so early in the morning.
But this morning I was able to sleep in a bit before starting out….
Starting my day this way makes a huge difference in my attitude and outlook.
I am hoping that some of you were able to eliminate your commuting time and use it for things you enjoy and will be able to continue to continue doing so.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Restaurant Revitalization Fund
Within two weeks of opening, the Restaurant Revitalization Fund has received applications for more than twice the $28.6 billion authorized by Congress. By May 12, the SBA had received over 266,000 applications requesting more than $65 billion in funds. So far, the SBA has disbursed $2.7 billion to 21,000 restaurants. For the first 21 days of the program, funds are limited to businesses owned and operated by women, veterans, and socially and economically disadvantaged people, but the funds are likely to dry up well before those 21 days are up. The funds were also segregated by level of income in order to help small business owners compete for the funds:
- $5 billion is set aside for applicants with 2019 gross receipts of not more than $500,000
- An additional $4 billion is set-aside for applicants with 2019 gross receipts from $500,001 to $1,500,000
- An additional $500 million is set-aside for applicants with 2019 gross receipts of not more than $50,000
It is not clear whether Congress will authorize additional funds for this program. For full details and instructions for applying, visit the SBA website, where you can also find a program guide, webinars, and a link to the application portal.
Paycheck Protection Program (PPP)
This time around our firm supported applications through the AICPA funding portal, and have seen the approvals and funding go a bit smoother as we track the applications through the system. We are just finalizing the last few applications which hit error code snags and hope to see those clients funded or at least approved by the end of the week. Several of my clients and I were interviewed for an AICPA summary video highlighting our experience as small business owners and the impact that this funding had on us. I will be excited to share some “snippets” once they are released. We are so grateful that our firm and so many other accounting professionals have been able to help so many of our clients through this process.
Enhanced Child Tax Credit Payments
The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. This is expected to affect roughly 39 million households, covering 88% of children in the United States. Eligible families are slated to begin receiving monthly payments without any further action required. They will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. Check out this IRS link for more information as it becomes available. You can read more in this recent article from Tax Practice Advisor.
Other Tax Matters
Extended Tax Returns Still Need to be Filed
The extended due date for individual tax returns of May 17th has come and gone. It is now time to search for or request the “open items email” we sent you and start putting together those missing pieces of information. I know that the nice weather beckons you, but we would not be asking for this additional information unless we felt it would help reduce your tax liability.
Remember this was an extension of time to file, not an extension of time to pay, and October 15th will be here before you know it.
Unemployment Benefits and Taxes
The Internal Revenue Service is starting to provide tax refunds to taxpayers who paid taxes on their 2020 unemployment benefits that recent legislation later excluded from taxable income. We here in New York are still hopeful that NYS Legislative bill S512A which is still active would exclude up to $10,200 of unemployment insurance benefits earned by NYS residents and not just for 2020, forever (or until they change the law again). We have put the tax returns for those clients affected by this law on extension and hope to be able to finalize and submit these returns with a lower New York State tax liability if the law passes.
CHALLENGES FOR SMALL BUSINESS
Now that pandemic restrictions are easing and businesses are beginning to reopen, many are having a hard time finding enough workers. While many blame generous unemployment benefits for the shortage, other contributing factors include lack of child care, remote schooling, and fears about the virus. College students, who might take seasonal jobs working in agriculture, may be studying remotely from home. Older employees may also be opting out of work in areas such as truck driving out of fears of contracting the virus on the road.
First impressions are always the most important, but onboarding a new remote employee may leave those first impressions as an afterthought. By developing a consistent and thoughtful onboarding process, as recommended in this article in the Harvard Business Review, new remote workers can quickly get up to speed on their responsibilities and understand the cultural expectations. Getting off to a fast start can mean getting a new person set up with technology before the first day. Developing strong relationships across the workforce includes establishing regular 1:1 meetings between the new person and team members. Navigating company culture can be simplified when someone explicitly explains company norms for formality, dress code, and working hours. Lastly, setting clear expectations for the new hire’s responsibilities and outcomes that are tied to the company’s overall vision and purpose can help a new person understand how they fit into the big picture.
Working from home can provide time savings simply by taking away the daily commute. But with the boundary between work and life removed, it’s not always clear that the time saved is put to meaningful use, or if it gets filled with less valuable work tasks or passive activities like watching TV. Six strategies in this article from Harvard Business Review can be used to help you firm up boundaries between work and life to make better use of your time. For example, create a morning ritual like going for a walk or planning your day to mark the start of your workday. Create another ritual at the end of the workday to reward yourself for a job well done. Another useful strategy is to focus on a single “must win” for each day – a task that must be completed and which will give you a strong sense of accomplishment.
LIFE IN THE POST-PANDEMIC ERA
Although vaccinations are making it possible for us to return many of our pre-pandemic routines, many people are experiencing anxiety about a return to normal. Some of that anxiety is related to a change in routine, while some is caused by the unknowns of the future. This article in Fast Company has ideas for reducing the anxiety around returning to work. First, find out what your organization is doing to keep people safe and compare that to what other similar organizations are doing. If you’ve been spending most of your time during the pandemic alone, see if you can spend time outdoors with other vaccinated people, which the CDC says is safe.
When office workers were forced to work from home last spring, that brought many changes to the normal routines and processes for work. However, as we begin to return to offices to work, before reverting wholesale to the old routines, consider whether the new, tech-oriented, remote friendly practices developed during the pandemic should be incorporated into new workplace routines. For example, at some workplaces, employees can be split into three groups based on their affinity for working from home: those who love it and want remote work to remain an option; those who didn’t mind it but are quite willing to return to the office when it becomes feasible; and those who hated working from home and never want to do it again. Crafting a remote work policy with these three groups in mind may be a better solution than simply mandating one approach for all people.
- IRS resources for stimulus payments:
- 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
- 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
- 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
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.