Business Update – March 23 2022
While the omicron variant surge is subsiding, researchers are keeping a close eye on a subvariant known as BA.2. This variant is more transmissible, but its rapid spread overseas also coincides with a drop in protection measures in Europe and low rates of effective immunization in Hong Kong. However, in the US, this variant may not result in a new surge because vaccines and boosters plus antibodies from previous infections appear to be protective. In addition, the illness this variant causes does not appear to be severe.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Economic Injury Disaster Loans (EIDL)
The SBA has extended the deferment period for Covid-related EIDL loans for the third time in the last year. In a news release, the SBA announced that small businesses and non-for-profits do not have to begin repayment of loans until 30 months after the date of the loan. Previously, the SBA had extended the deferral period of EIDL loans 24 months.
Monthly Child Tax Credit Payments
If you have questions about the advance Child Tax Credits for 2021, the two best sources are the instructions for Schedule 8812, which is used to calculate and report the credit on your 2021 tax return, and the IRS FAQs. 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.
A new box on form 1040 asks about virtual currency transactions. Taxpayers are instructed to answer Yes or No to the question: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any interest in any virtual currency?” Taxpayers who owned or bought virtual currency during 2021 but did not have any other transactions can answer No. But anyone who had other kinds of transactions must answer Yes.
Business email compromise attacks continue to be a common form of fraud. In the fourth quarter of 2021, cybersecurity vendor Kaspersky reported preventing 80,000 of these types of attacks. This type of fraud involves emails that appear to be from a trusted executive or representative of a company that request that the recipient transfer funds or install malware. Frequently, these requests are preceded with correspondence that may be a continuation of previous email conversations between the two parties. The best defense is for employees to remain vigilant and to avoid clicking on suspicious appearing links.
One of the best methods for protecting an online account is two-factor authentication, where users are prompted to enter codes sent via apps or a text in addition to a password. However, if you change your cell phone number or lose access to your phone, you may be locked out of that account. To prevent this from happening, adding a second verification method, such as an email or a verification app in addition to a cell phone number can help. Recovery codes can also help users regain access. These are usually shown when two-factor-authentication is first turned on. Storing those backup codes in a wallet or with a passport can help travelers recover access if their phone is lost or stolen.
Phased retirement programs – which allow employees to cut back on hours while retaining reduced pay and benefits – are growing in popularity since the pandemic. These programs allow organizations to slow the brain drain and to manage talent shortages while also providing financial and psychological benefits to workers as they transition from work to retirement.
Inflation is causing many older workers to postpone or consider delaying their plans to retire, according to a recent survey. However, some advisors point out that retirees tend to spend less on transportation, food, and housing until age 80, so inflation may pay less of a role in a retiree’s finances.
THE GREAT REASSESSMENT
Finding talent is challenging in a tight labor market, but the best way to solve that problem is to first focus on retention. Paying competitive salaries is the first step. Ensuring that company culture and the workplace environment are conducive to productive work is also essential. Conducting “stay interviews” to find out what’s top of mind for your employees can also point to things that can be fixed before people leave. Finally, investing in managers by ensuring that they are leading their teams well helps prevent employees from quitting a manager when they’d prefer to stay with the company.
REMOTE AND HYBRID WORK OPTIONS
While some companies are trying to figure out the future of work, a few began allowing employees to work anytime, from wherever they want years ago. The founder and CEO of the company behind WordPress, Matt Mullenweg, has allowed flexibility since the company began in 2005. Its 1,876 employees in 97 countries work according to their own schedules while relying on written communication to keep everyone updated. Mullenweg believes that eventually hybrid work models will die out as the benefits of allowing people to work according to their own schedules, and the ability to find talent from outside a local area become more important.
The US labor market continues to tighten, with jobless claims for the week ended March 12 coming in at the lowest level all year, with a drop of 15,000 to land at 214,000. However, there are still nearly 5 million more jobs than available workers, even as wages increase sharply and inflation is at its highest point since the 1980s.
Last week, the Federal Reserve raised its short-term benchmark rate by one-quarter of a percentage point, but what will the impact of that rate hike be for consumers? Mortgage rates will increase slightly. Interest rates for CDs and savings accounts may increase slightly. Auto loans will be more expensive. Borrowers will pay more credit card and student loan interest.
New analysis by the Labor Department indicates that women in low-paying industries are losing billions of dollars every year. Many of the jobs with the lowest pay are dominated by women, while most of the highest-paying jobs are held chiefly by men, a dynamic called “economic segregation.” Black and Hispanic women appear to be the most susceptible. Even with increasing education, women still earn less: women with MBAs earn only 76 cents for every dollar earned by men with MBAs. The pandemic exacerbated this problem because women tended to suffer the most layoffs in hard-hit industries such as retail.
- 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
- IRS information about the Advance Child Tax Credit Payments
- Portal to update information
- A list of frequently asked questions on the advance Child Tax Credit Payments
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- 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!