It is very fulfilling to work in a profession where we can be the go-to place for someone to come to when they have questions about their finances – one of the most important and potentially difficult facets of life. It can also be very disconcerting, as well, to be helping people with their financial picture in a time when that part of one’s life feels as precarious as it ever has.

With so many people currently in such a difficult position, it is no wonder that so many are paying close attention to Congress as it attempts to hash out another round of stimulus funding. It is great to hear the amount of a trillion dollars being thrown around as a starting point, but it feels like it does not help much if it does not affect you personally and debate overshadows action. This feels especially strong as the $600 federal unemployment enhancement runs out this week just as a federal moratorium on evictions also ends. It then becomes all too easy to see this becoming a tragic situation for people affected by a situation completely beyond their control.

In situations like this, there are no winners. The most that many are hoping for is just to get by. So policy aside, I want this writing to stand as a hope for wellness, financial and otherwise, for as many people as possible as we continue to push through a difficult situation. From our end, we will continue to monitor the situation as legislation is passed and do all we can to be able to give the best advice for your personal situation to try to help you find that positive place.

To reach that end, this is also a plea for those who have been less adversely affected to do what they can to help others who are suffering. A lot of the discussion concerning this next round of stimulus includes another round of individual payments. For those in desperate need of that money, please take it and help your family keep pushing through. For those still afloat, though, please consider donating some of it (if and when it happens). If everyone in such a position passed along just a small portion of that money, we can continue to help push things in that needed positive direction.

Now that (nearly) everyone has filed their taxes, it is a good time to look back and find out what you could have done better. After all, I have many tax prep meetings with business owners during which they come to the realization that they could be deducting more expenses than they are.

The best way to keep this from happening is to be diligent about recordkeeping. After all, it’s one thing to have a receipt from a meal that you claim is for business, but if you can’t tell someone who you dined with and what you discussed that was business related, the IRS could disallow it as a deduction.

Even though tax season had me thinking about some of these things already, this recent article also highlighted some of the same issues  In that story, a taxpayer believed he was keeping good track of his mileage by having a Microsoft Outlook calendar where he recorded his travels. And on the surface, this sounds great. It is a living document that he can both add to and look back upon when needed. Unfortunately, the purpose of all those travels was not also recorded, instead making it largely useless.

When thinking about best practices here, there is no clear answer. After all, the digital calendar idea sounds great, but failed. It would have been outdone by a notebook in a car’s glove compartment with a log of dates, odometer readings, and purposes for the trips. Digital records may seem safer and more ready-to-use, but they are no good if not used correctly.

Start then with thinking of a system that you can diligently follow. If the immediacy of the notepad in the car works for you, use it. It still may be a good idea to convert it to something digital on a regular basis, but taking information down as you actually do it helps make sure you are recording all of those possible deductions and not missing anything. If you can’t imagine being so analog, though, your phone has a spot for notes on it, too, and you can use that as a notepad.

Granted, if you are doing a lot of business travel, you are not going to want to hand a notepad to your tax preparer as a final document. This information can be moved to a spreadsheet or other financial software, though, to become more manageable and usable. A lot of the breakdowns I see, though, are due to a lack of that immediacy in recording so that middle step can still be helpful. When you are attempting to recreate travels through receipts, you are bound to miss something.

And sure, this all sounds like a pain.  But what causes more pain, doing some good recordkeeping (and once you establish a habit out of, it won’t even feel that bad) or seeing a bill come tax time that you know you could have lessened?

We have finally arrived at the end of tax season, even if three months later than usual. This first requires some quick-hits style notes:

1.      If you intended to file an extension and gain three more months to file your taxes, you can do so fairly easily via this link. But remember, an extension to file your taxes is not an extension to pay your taxes. If you owe taxes, you will start gathering penalties and interest if they’re not paid by the deadline.

2.      If you have filed your taxes and are wondering where your refund is, I assure you that we have no secret doors through which to access this information. We also have no ways to make your refund appear faster. You can visit this webpage, though, and check the status of your refund.

3.      As a bit of a warning, though, even government agencies have been a little spotty lately with how much and what work they have been able to accomplish due to various restrictions and safety measures. So if it takes a little longer to get your refund than you were expecting, this would not be terribly surprising.

4.      Finally, just as July 15 marked the time when your taxes had to be filed, it also marks the time when all the taxes whose deadlines have been pushed back start up again. So remember that if you owe the IRS money and have received some payment leniency, or if you are to begin a new payment plant, keep an eye for those to kick back in.

Beyond those, I also like to give a thank you note to my clients at the close of the season, and it may be more necessary now than ever before. Taxes are rarely a fun time for people (although it is fun to show people the way to an unexpected refund), but it is even less fun when they come with unexpected pain. This year, though, everything has come with new pains, and that also includes tax planning and filing.

So for those who did not get in early in the season and had to deal with the discomfort and inconvenience of virtual meetings and no set office hours, thank you for working around it. It is heartwarming to know that the work we do here was worth clearing those hurdles. Hopefully, the work we did will continue to prove worth it, and hopefully next year things will feel a little easier.

Until then, though, we continue to stand by your side no matter where the paths lead.

In general, I try not to go super in-depth in these blogs at any time, and that is more due to attention restraints than anything else. I mean, those who care to get into the weeds into issues such as taxes know where to find that information. I instead want to bring some general knowledge to a larger number of people (and hopefully stay easy to follow at the same time because of it).

Since the COVID-19 outbreak, much of my writing has become even more general, as everything felt like it was changing all the time. This made any advice or news short-lived, so I instead sought to provide information that could be more of an anchor in a time where nothing was steady.

Today I will have just a bit more of that depth, but it is coming in the form of good news. First, there was a recent summit held by ADP to look into some recent job research. The overarching take was that the PPP program did help return some people to the workforce and it looks like that will continue throughout the summer. Getting back to where we were before all this madness will take longer, but this does offer hope that we are not just spiraling into the abyss. And for those who do like to get even deeper into the numbers, you can read more about this here.

This good news seems to largely be coming across the board, too, as Paychex released numbers last week that said small businesses essentially held steady when it comes to number of jobs, but saw an uptick in hours worked. Even something like that, which is neither grand nor wonderful news, is still good news, as any increase in the amount of the hours worked is a positive. Again, for you deep number crunchers, click here for more.

Also last week came an extension of the PPP program in general. The deadline for the program was to have come last week, but both houses of Congress passed a five-week extension that the president signed, so the program will now remain open for applications until August 8. It is able to keep going because all of the money allocated for the program has not yet been doled out. That can even be seen as the best news of all after how quickly the first round of funding was divvied up, leaving many to feel like they missed out.

So yes, there may not be much in this blog that is something you can think about in your own life and you may not be interested in more than the headlines, but hopefully you can forgive me good news blather for a week.

In recent years, the gig economy has grown as a way for people to earn money and there are bound to be more people taking a dip into the pool this year. In a time when many people are unsure of their job prospects, every little bit of income can help bridge the gap until things get a bit more back to normal. Maybe this is why the IRS put out some tips to remember for those earning money in this way. There are a few things I want to add to this basic rundown, though.

First, there is frequently some misunderstanding about just how taxes work on such money earned. Most people start earning money with a job that gives you a paycheck where federal taxes, Medicare, and Social Security have already been withheld, and then there is not a thought given to such matters until it comes time to file taxes. When you are paid as a contractor, though, you are receiving money directly and nothing has been withheld. When tax times comes, you then may be surprised to find what you owe (including some employer portion of Social Security and Medicare because when you work for yourself, you’re both boss and employee).

If you just earned a small amount of money on the side, it is probably not going to have a giant effect on your situation when you fill out a tax return. Most of your obligation still will have been taken care of in your regular paycheck (note that you can have more withheld from that check to take care of it if need be). Problems can arise, though, when you start to make all your money this way.

So the second thing to remember is how much easier it is to handle such numbers when funds are siphoned out on a weekly basis instead of having to pay a lump sum at the end of the year. For example, if there’s $100 taken out of your paycheck a week for a year, it is money that you never see in your bank account and thus is not too difficult to figure out how to live without it. If you are a contractor ignoring your obligation to pay that money, however, it can be a lot more difficult to come up with $5,200 come early next year.

Like most things then, this can be handled with planning. If you are endeavoring into new income areas and don’t know how it’s going to affect your tax picture, contact us and we can help. After all, this is not a time when anyone needs any more stress or bad surprises, so working to avoid them will only serve you well.