Covid-19 Weekly Update – May 6th 2021
In fall we gaze out car windows, walk along paths or along the street to see the colored leaves, while spring’s comparable pleasure comes from waterfalls, as this guide to waterfalls describes. Nov that so many of us are vaccinated, it would it be great to plan some day trips. In New Hampshire, Crawford Notch State Park is home to 10 waterfalls, ranging from 200’ Arethusa Falls to smaller Silver Cascade. In California, the most well-known is Yosemite Falls, while Rainbow Falls near Mammoth Lakes won’t be accessible until snowplows clear the roads around mid-June. Mount Rainier National Park in Washington is home to more than 150 waterfalls. If you can’t go that far, consider visiting one of your local botanical gardens, or if you are near me, it could be a beach day…
Remember that you don’t have to join me at sunrise…
It’s just nice to get out again now that spring is here!
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Paycheck Protection Program (PPP)
We have all heard that though Congress voted to extend the PPP program to May 31, giving small businesses an additional two months to submit applications, there was a prediction that the funds would run out before that date. We have been using the AICPA funding portal this time around and have seen the approvals and funding go a bit smoother as we track the applications through the system. We did see that several applications got caught up in the SBA error code system which was enhanced in order to prevent more fraud. We have been told that they will continue to work through these codes so the in-process applications still have a shot at being funded.
We have also been advised that we can not submit new applications through this portal, but the SBA has a link to Community Financial Institutions (CFI) who are able to continue to accept applications while funds remain available. Here is the link if you want to play the match game. You will be asked to supply some basic information and a valid email address.
The process has been arduous and frustrating at times, we are thrilled to have been able to assist so many of our clients with the process. The best is when we get a Woo Hoo email showing the message: CONGRATULATIONS YOUR LOAN HAS BEEN APPROVED.
Economic Impact Payments (aka Stimulus Checks)
A seventh batch of around two million stimulus payments went out last week, bringing the total of payments sent by the IRS to around $384 billion. This latest batch of payments went out primarily to two groups. The first group is people for whom the IRS did not have contact information, but who recently filed a tax return. The second group includes people who received stimulus payments based on their 2019 tax returns, but who were eligible for a larger amount, based on a recently filed 2020 tax return. Nearly 730,000 payments in this latest batch were these “plus-up” payments.
The best way to track your payment is using the IRS Get My Payment tool which has been updated for third round payments. If you didn’t receive the full amount of your 2020 stimulus payment, you can claim it as a Recovery Rebate Credit when you file your 2020 tax return.
Restaurant Revitalization Fund
After months of waiting, the SBA is finally accepting applications for the Restaurant Revitalization Fund, beginning Monday, May 3. This $28.6 billion fund will offer grants of up to $5 million to restaurants, bars, caterers, and other food and beverage. Days 1-21 will be reserved for applicants from priority groups: businesses owned by women, veterans, and socially disadvantaged. To make it easier to apply, the SBA allows businesses to apply through a number of Point of Sale (POS) vendors, such as Square, Toast, and Aloha, as well as directly through the SBA website, where you can also find a program guide and webinars about the program.
Expanded Child Tax Credit
President Biden’s ARPA expands the 2021 child tax credit and will allow many families to receive monthly advance payments. However, eligibility and income phaseouts are a bit different than usual, so Kiplinger put together a compilation of FAQs and created a child tax credit calculator to figure out how much you may receive. For example, individuals with income over $75,000 won’t be eligible for the additional $1,000 or $1,600 over the usual $2,000 credit, but will be eligible for a credit of $2,000 if AGI is below $200,000. This credit will be fully refundable for those who have spent at least half of the year in the U.S.
Other Tax Matters
Extensions of Time to File
A reminder to those procrastinators out there, the extended due date for individual tax returns is May 17th; this is an extension of time to file, not an extension of time to pay. If you have been holding off on reviewing your documents, this weekend is your last chance. Remember when you rush, you are more likely to make mistakes.
Extension of Time to Contribute to Your IRA
Reminder if you are planning to make a contribution to your 2020 traditional or ROTH IRA, you still have until May 17th as well. Please be sure to indicate the tax year as 2020 when submitting the documents and payment to your broker or banker. As always we recommend that you check with your accountant before submitting your paperwork to see if you are eligible and what the tax benefits would be.
Unemployment Benefits and Taxes
We have discussed the tax rules regarding the first $10,200 of unemployment benefits at the federal level. Many states have decoupled from this rule, including New York. We 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). Right now for our clients who are affected, we are planning to finalize and submit the federal tax returns and extend just the New York return so that those will not need to be amended and yes we are still keeping our fingers crossed that this bill will be passed.
You New Yorker’s May NOT Have to Move
Working through the NYS fiscal Year 2021-2022 budget bill we have identified some potential tax minimization strategies, so don’t put your house on the market yet ….. and we do have some great parks and beaches in NY, not just mine.
NYS workaround for the SALT, article 24-A enacts the Pass-Through Entity Tax – another tool for our tax minimization tool box. As we meet to discuss business operations, we will be working through scenarios which balance reasonable compensation and net profit with tax savings. This new option is only available to eligible partnerships and S-Corporations and will be retroactive to January 1, 2021 as long as a timely election and estimated tax payments are made.
The Biden Tax Plan
We have been reading, debating, discussing and we know from the past that “it ain’t over till the fat lady sings”. All this talk and the plan is still a proposal that could be stuck in congress for months as discussed in this recent AccountingToday article.
REMOTE WORK IN THE POST-PANDEMIC ERA
Even before the pandemic, the digital nomad lifestyle was popular among freelancers. As more people were forced to work remotely during the pandemic, this lifestyle has become newly possible for many traditional workers. Here are seven tips from long-time digital nomads to make living and working from anywhere in the world a better experience. For example, plan to stay at least a month in each location. Another tip is to carry multiple debit and credit cards in case one is lost because many financial institutions are not able to ship a new one abroad overnight.
As more people are vaccinated, companies around the world are trying to figure out what the new hybrid model of work will look like. Some employees are willing to forego traditional benefits like health care coverage, paid time off, and cash bonuses to remain remote, while others are struggling with mental health issues brought on by an always-on, hyper-productive remote work experience. Some companies will demand that workers return to the office to facilitate in-person collaboration, while others are leaving the decision to return up to the team, the individual, or to upper-level management, depending on the situation. What is clear is that remote work as an option is here to stay.
Employers who want their teams back in the office full time in the post-pandemic era should expect to pay their employees 8% more. On the other hand, employees are willing to take a 5%-10% pay cut to keep the same job with a work from home option. Those stats are from a new working paper by a team including Nicholas Bloom, who has been studying working from home since well before the pandemic. The study authors estimate that 20% of total workdays will be from home in the future. The reasons for this shift include the massive, forced experiment in working from home, which overall exceeded expectations in terms of productivity and employee satisfaction. Another reason is the time and money that workers and employees invested in technology resources to make the switch. This investment is estimated at 0.7% of U.S. GDP, which is comparable to the amount spent by the government on defense. A large part of the increase in productivity comes from the reduction in commuting time, which is not visible by standard measures of worker productivity.
For Our HealthCare Clients
Amazon and several insurers have started or expanded virtual-first care plans to get people to use telemedicine routinely, even for planned visits like annual checkups. They’re trying to make it easier for patients to connect with regular help by using remote care that grew explosively during the COVID-19 pandemic. Advocates say this can keep patients healthy and out of expensive hospitals, which makes insurers and employers that pay most of the bill happy. Some physicians are concerned that they will loose the personal touch, but telemedicine does have a place and it’s here to stay. Check our this article in Fox Business for more.
- 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
- The Atlantic has a state-by-state coronavirus tracker
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.