Weekly Digest – December 1 2021
Over the weekend, several countries reported their first cases of the new Omicron variant of the COVID-19 virus. While little is known about the new variant, genetic sequencing indicates it has at least 30 mutations on the spike protein, which it uses to bind to human cells, so it could be even more easily spread than the Delta variant. In response to the uncertainty, Israel has banned all foreigners from entry, while the U.S. joins other nations in restricting entry of people who have spent time recently in countries in southern Africa. The U.S. administration is in discussions with scientists and vaccine manufacturers to adapt vaccines and therapeutics if needed.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Monthly Child Tax Credit Payments
The deadline to opt out of the December advance Child Tax Credit payment was midnight on Monday, November 29. According to Question H1 in the IRS FAQs, in January, the IRS will send out Letter 6419 with the total amount of advance payments received. The information on this letter will be needed to file your 2021 tax return, where you’ll reconcile the total amount of payments received in 2021 with the amount you can claim on your tax return.
Economic Injury Disaster Loans (EIDL)
The SBA recently announced updated guidance for the EIDL program. Applications will be accepted through December 31, 2021 and will be processed until all funds have been exhausted. Applicants are strongly urged to apply by December 10, 2021 to ensure adequate processing time. December 31 is also the deadline for submitting review reconsideration and appeal requests as long as the request is received within six months of the date of decline for reconsideration or within 30 days of the date of decline for appeals. Check out the SBA news release for updates on the program and application instructions.
The Infrastructure Investment and Jobs Act, which was signed into law on November 15, 2021, contains several tax provisions. Here are a few of those provisions:
- Cryptocurrency reporting requirements will be expanded to stem underreporting of cryptocurrency transactions.
- The Employee Retention Credit has been eliminated for wages paid after September 30, 2021.
- The relaxation of minimum funding requirements for employer-sponsored retirement plans has been further extended
Because the Employee Retention Credit was eliminated after the fourth quarter began, there is some concern about the retroactive application of the end of the program. However, it appears that employers are currently more interested in hiring than in laying off employees.
As the Build Back Better Acct makes its way through Congress, tax provisions in the bill continue to be debated. Among the possible tax impacts are the following:
- The expanded child tax credit has been extended through 2022.
- Changes to the earned income tax credit from ARPA have been extended through 2022.
- The deduction cap on state and local income taxes would be raised from $10,000 to $80,000.
- Large corporations that report over $1 billion in profits would be subject to a 15% minimum tax.
- A refundable income tax credit of up to $8,500 for the purchase of qualified electric plug-in vehicles.
At present, this bill has only been passed by the House. The Senate aims to pass this by Christmas, but it is likely that changes will be made to get enough votes from Democrats to pass it.
The IRS will be requiring anyone who wants to access online services such as the Child Tax Credit Update Portal or their online IRS account to log in using an ID.me account by the summer of 2022. Taxpayers with existing non-ID.me log in credentials can continue to use the old system, but will have to create a new ID.me log in to access IRS services after the change. This change is being made to ensure that access to taxpayer information is only available to the correct person.
THE GREAT REASSESSMENT
The pandemic has inspired many people to reconsider their current work situations. But before turning in that resignation letter, here are ten things to do before you quit your current job. For example, make sure you understand why you want to resign. Are you resigning because you’re unhappy with your current situation, or are there better opportunities elsewhere? Have a career path in mind. Try to keep the big picture in mind before you quit – it’s not enough to just have another job lined up.
Entrepreneurs tend to face burnout and mental health challenges at a higher rate than others. This profile on CNBC shows how the founder of UrbanStems conquered burnout and created a healthier, more balanced life. His strategies include meeting with an executive coach and a fitness coach, and daily meditation.
The U.S. economy shows signs of accelerating into the end of the year. Household spending for November rose 1.3% compared to October, and is increasing at a faster rate than inflation, even with inflation hitting a three-decade high. Jobless claims, a proxy for layoffs, fell to 199,000, the lowest weekly level for a year. Manufacturers still face higher material and shipping costs plus shipping delays, but there are signs that the supply chain problems are beginning to abate. As companies continue to struggle to attract enough workers, many are investing in machinery and technology to increase productivity.
Even though consumers are spending at an accelerated clip, a new poll from Gallup found that the economic worries of Americans are at a pandemic high. For 26% of respondents, an economic-related concern is the top problem for the country. This is the first time since January 2017 that a double-digit percentage of Americans have cited the economy as the most important problem facing the U.S. However, this is still much lower than the level of economic concern in 2009, when 86% cited the economy as a major problem, according to Gallup data going back to 1991.
- 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
- Fast Company has a listing of the best productivity apps for 2020
- 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!