Weekly Update – November 11th 2021
Sending best wishes and our thanks to our veterans and their families this Veterans day 2021. We salute you and appreciate your courage and service to our country.
We’ve been hearing about the tight market for available workers, so what’s the solution? Per this recent Wall Street Journal article, some companies are responding by loosening hiring requirements such as the need for a bachelor’s degree, work experience or or background check. Is this a wise move, is any body better than no body, or are workers opening the door for bots to take over? The Body Shop, which piloted an open hiring program in 2019, no longer requires drug tests, background checks, or other education or work experience for jobs in its warehouses and retail locations. Likewise, UPS, in a quest to hire 100,000 seasonal workers for the holidays, eliminated any job application questions and hiring steps unless they were required for payroll or government audits. Applicants for certain UPS positions can get a conditional job offer in just 10 minutes. Some of these requirements may return when the employment market eases, but others may stay as a means to bring previously overlooked applicants into the workforce.
I wonder if companies had been preemptive or better positioned to weather any “storm” like a hurricane or pandemic; they might not be in this position now. In our office we say it’s not a problem, its an opportunity, and we learned so much and implemented so many process changes before and after Hurricane Sandy that we were able to shift into fully remote mode back in March of 2020.
This time around we are finding that the remote work model is working well, creating a better work/life balance for my staff and I. We are all able to take time each day to do something special rather than commute.
I am happy that our work model has lowered our carbon footprint and it’s still warm enough even on November 11th in NYC to share my beach walk footprints.
Monica has been able to take walks through her local park and shares photos of the deer and other “wildlife” she encounters along the way, such a treat!
Today’s sunrise shared with friends, family and staff via group text message as I wished them an enjoyable day off for this Veteran’s day.
I am hoping you are spending part of your day getting out and enjoying the nice weather this week.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Monthly Advance Child Tax Credit Payments
Last week, the IRS made changes to the portal to allow families to update their income. If your income or family situation changed since you filed your 2020 tax return you may want to visit the IRS Child Tax Credit Portal. You must make any updates by midnight on November 29 for the change to be effective for the December payment. Families whose income has dropped below or risen above the threshold for full payments may want to make that change on the portal. Single filers with income below $75,000 and joint filers with income below $150,000 are eligible for the full payment. Any adjustments to payments will be made with the December payment.
As a reminder, if you want to opt out of future payments, you must opt out by the deadline for the next month’s payment. Check out the IRS FAQs where you’ll find everything you need to know about opting out in Section J.
Infrastructure Investment and Jobs Act
The Infrastructure Investment and Jobs Act (H.R.3684) passed by Congress and the Senate last week has just a few tax provisions. The provision we have been watching closely is the early elimination of the employee retention credit (ERC). The ERC which was passed as part of the CARES Act, will be ending at the end of the third quarter of 2021, on September 30, 2021, instead of December 31. It seems that only eligible recovery startup businesses with wages paid after September 30, 2021 will be eligible for the credit.
Another hot topic deals with crypto currency transactions. Brokers of crypto-assets will now be required to report certain information to the IRS.
Remember even though this bill has been passed by the congress and senate, it has not been signed into law yet by President Biden.
Build Back Better Act
The Build Back Better Act (H.R.5376) is still being debated, we are looking forward to resolutions and a possible vote in the next few weeks so we can start on our updated tax minimization planning for 2021 and beyond
Annual Increase in Deferred Compensation Limits for 2022
The IRS has announced the increase in retirement account contribution limits for 2022. Starting in 2022, employees can now contribute up to $20,500 per year to 401(k), 403(b) and most 457 plans, an increase from $19,500. Contribution limits for IRAs remain unchanged, at $6,000 per year with an additional catch-up contribution of $1,000 for those over the age of 50. Phase-out limits for making IRA contributions have also increased, which may enable more individuals to make IRA contributions, even if they or their spouse have access to a retirement plan at work.
Annual Increase in the Standard Deduction Amount for 2022
The standard deduction for married couples filing jointly for tax year 2022 is increasing to $25,900, up $800 from the previous year. For single taxpayers and married individuals filing separately, the standard deduction is rising to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
Remember that even if you file using the standard deduction at the federal level, you can still take a $300 additional deduction per taxpayer for charitable contributions made in 2021. This will no longer be available for 2022.
THE GREAT REASSESSMENT
Is it “The Great Resignation” or “The Great Reassessment”? The Great Resignation is giving rise to the boomerang employee: former workers who return to the company after leaving for some period of time. Cell phones and social media make it easier for company recruiters to stay in contact with employees who leave. Former employees are easier to onboard and to integrate into a company’s culture, as well as sending a positive signal to current employees about the quality of the company and its brand as an employer. The best time to reach out to former employees is six months to a year after they leave. This gives employees the opportunity to obtain new skills they can bring back and is a short enough period to keep the workplace familiar. Employees can benefit when they return by requesting higher pay, a promotion, or additional flexibility in hours or remote options.
It is being reported that many employees who have stayed in their pre-pandemic jobs are facing burnout as they take on the additional responsibilities for others who have left. Employees in this situation have options such as:
- Requesting to have others in the workplace for help with the new job requirements
- Asking for some extended time off -with or without pay
- Letting human resources or their managers know they are having trouble coping with the increased stress and asking for assistance in managing the increased work load
- Making a prioritized list of recommendations for changing current processes
- Asking for pay increases, a promotion, or other perks
Employers who are concerned about keeping their valued employees may want to work with them to find ways to support them so they don’t leave.
Before the pandemic, burnout was mostly an issue among younger people working multiple jobs in the gig economy. But according to a recent survey, 80% of respondents are seeing an increase in employee burnout. Fortunately, most employers are aware and are introducing ways to help reduce workplace stress. The same survey also found that remote work is likely to continue as an option for some time.
The name commonly given to the current transformation of the workplace – The Great Resignation – may be missing the point, according to Anthony Klotz, the professor who coined the term in an interview with Bloomberg. According to Klotz, the biggest takeaway is not so much that people are leaving jobs in large numbers, but rather, the reasons why they are leaving: stress, a shift to remote work, and a reconsideration of life priorities. By focusing on the shift in employment status, we may also be missing the opportunity to reassess work and how it impacts the other parts of our lives – our friends, families, government, and the search for meaning in our lives.
REOPENING THE OFFICE AND REMOTE WORK OPTIONS
While employees say they want increased flexibility and more remote work options, research by Harvard Business Review seems to indicate that what they really want is autonomy. In a recent survey, respondents want flexibility, but also want the ability to determine how, when, and where they do their work, without mandates from employers. The authors recommend that instead of policies governing remote work and flexibility, employers adopt principles that allow workers to determine best how and where to perform their jobs. Investing in ongoing skills training gives employees the competence and confidence to work autonomously. In addition I think we can agree that by providing knowledge workers with the technology they need to do their work contributes to their feeling of accomplishment, well being and job satisfaction.
The global economy has largely recovered from the deep and sudden contraction brought on by the pandemic, but now begins the tricky work of transitioning back to a normal pace of growth. Central banks are navigating a delicate balance between lowered interest rates that may trigger inflation and raising interest rates too quickly which could stifle economic growth. Consumer demand surged in the wake of stimulus payments, triggering disruptions to global supply chains that will take several months to unwind. Shortages in raw materials are causing price hikes, which in turn are impacting manufacturers’ abilities to remain solvent while meeting demand for their products.
- IRS resources for stimulus payments:
- IRS information about the Advance Child Tax Credit 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
- 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 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.