Weekly Update – March 10th 2022
One of the odd tell-tale symptoms of COVID-19 is the abrupt loss of sense of smell reported by many patients. Researchers have recently uncovered the mechanism behind this loss. While the COVID-19 virus does not infect the nerve cells in the nose that detect and transmit information about odors to the brain, it does infect supporting cells in the nose. The subsequent inflammation wreaks havoc on the smell receptors and even alters the expression of genes in those nerve cells. The good news is that because the olfactory nerves are not destroyed, the sense of smell can recover in time.
The other good news is that travel and dining has opened up even more as more of us are vaccinated and so many of us have contracted and recovered from the Omicron variant. I was so glad to have the opportunity to visit my mother-in-law who lives in Florida; spend time with her, my daughter, brother-in-law and some extended family friends.
We met Jessie as we landed in PBA minutes apart …
Our hotel in Juno was down the block from the beach …
But of course there’s no place like home…
Back to MY beautiful beach for walks at sunrise…
I am hoping that as things ease up we can visit the family and friends we have missed seeing these past 2 years.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Monthly Child Tax Credit Payments
Before filing your tax return, check your IRS Online Account to be sure you report the correct amount of any advance Child Tax Credit payments received during 2021. This 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.
Our clients should refer to our “Advance Child Tax Credit” worksheet designed to help organize and track payments. We also included details on the law and helpful information. If you did not receive this worksheet in your packet, please call Ramona for a copy.
The IRS is Hiring
While the IRS is rushing to hire 10,000 workers, the agency does not expect to clear its backlog of 24 million tax returns until the end of the year. The positions the agency is seeking to fill range from entry-level clerical workers to technology experts who will be tasked with upgrading computer systems. The IRS is also looking for tax attorneys who can lead complex audits.
IRS Backlog of Paper Tax Returns and Correspondence
However, the wave of new hires will likely not come in time to alleviate the pressure for the 2022 tax filing season. A challenging labor market is also making it difficult to hire: the IRS recently advertised 5,000 clerical and customer service positions, but only hired 200.
I am thrilled to say that just yesterday I was able to connect with a wonderful IRS agent through the special “Tax Practitioners Hotline”. We were able to work through issues for several of our business clients who had received confusing notices. For months this special call center has been inundated with our calls and hard to connect through.
For many older workers, the decision to retire is more complex than giving two weeks’ notice. Laying the financial foundation requires getting all the pieces in place, including Social Security, Medicare, and adequate retirement savings. Many workers take a phased approach, gradually decreasing hours as they wrap up a business or a career. Depending on health and longevity, waiting until age 70 to start collecting Social Security will result in the biggest benefit. Converting a conventional IRA or other retirement account to a Roth can result in a big tax bill upfront, but can save on taxes down the road.
THE GREAT REASSESSMENT/RESIGNATION
For many who quit their jobs during the Great Resignation, the biggest change is a redefinition of one’s self, particularly when leaving a demanding career. A lasting impact from the pandemic has been a new mindset for many Americans: “a job doesn’t have to be a defining feature of your personality – or even a passion.” Many are shifting to less demanding jobs that allow for flexibility; those enabling them to have lives outside of work and to focus on important priorities such as family.
Besides better pay and better work-life balance, there has been a narrative that people are quitting their jobs or refusing to take jobs when the company’s values clash with their own. However, as data from a recent study demonstrates, only about half of people would quit over a misalignment in values, and only 57% of survey respondents reported that their values actually did align. Younger employees are more willing to quit over a values mismatch, while some are staying and working within the company to shift values. Many workers – especially low earners – have no choice but to continue working for a company, even if values clash.
I am seeing this first hand as my daughter Emily evaluates job offers with various professional practices; a big consideration is the firm’s practice management, patient care, and professional growth potential.
REMOTE AND HYBRID WORK OPTIONS
As the concept of a four-day-workweek gains traction, the companies that are experimenting with this new schedule remind us that fewer days does not mean less work. Some are using a 100-80-100 model, where employees are paid 100% of their compensation for 80% of the time while maintaining 100% productivity. Scheduling fewer meetings, improving communication, and blocking off portions of the day for focused work, combined with attention to team-building activities are all tactics that companies are using successfully.
Returning to the office after nearly two years of remote work may be a difficult transition for introverts. Many introverts benefited from remote work during the pandemic because they tend to need time alone or with a small group of people to regenerate their energy. Helpful strategies include practicing self-care to ensure adequate rest, a good diet and exercise and asking managers for the options they need, such as a hybrid work schedule or a quieter workspace.
What if your boss wants you to return to the office, but you don’t want to? Here are some tips for making your case to continue working remotely:
- pitch to your boss on the merits of working from home; make a list of examples based on your experience
- demonstrate the merits of remote work by making changes at work, such as breaking large meetings into small group discussions
- discuss scheduling regular video-chat check-ins with team members and managers
- explain how eliminating your commute has enabled you to use the time to take better care of yourself and improve your overall sense of satisfaction
If all else fails try bribery, only kidding, pitch a trial period of 2 to 3 days in the office and 2 to 3 remote days.
In February, employers added 678,000 new jobs, the biggest gain in seven months, resulting in a jobless rate of only 3.8%. However, wage growth slowed down, a sign that employers may be finally filling lower-wage positions that had long been vacant. This data comes from a mid-February survey, so it does not show any effects from Russia’s invasion of Ukraine, which may impact household spending. Economists say three factors may lead to continued strong job growth for the spring. First, COVID-19 cases are dropping. Second, many states are dropping mask and vaccine mandates for customers. Third, households may be running out of savings, which could push people to rejoin the workforce.
Applications for unemployment benefits dropped by 18,000 for the week ended February 26 to end near a historic low level of 215,000. Meanwhile, the moving average for continuing claims for unemployment fell to the lowest level since April 1970. Job postings remain about 60% above the pre-pandemic baseline, while workers take advantage of the tight labor market to move to higher paying jobs, as evidenced by the record high quits rate. For the second half of 2021, more than four million people per month quit their jobs each month, a rate never seen before.
- 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!
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.