Our heads aren’t so big here that we think you want to read anything long or in-depth from us this week. After all, if you are actually even present at work this week, you are spending half the time looking at the clock and the other half daydreaming about not being there.

So just let this be a call to make them good daydreams, then. After all, this is our second straight year where the holidays may not be being fully celebrated in the ways that we like. Even the best-case scenario involves them coming with some extra concerns and considerations. No matter then where you fall on that spectrum of celebration, this is a wish that you craft something good from it, find joy, and get special time to enjoy yourself, your friends, and your family.

We can all use some propping up during difficult times, and the start of the 2020s certainly has qualified as difficult times. Everyone deserves whatever solace and comfort they can find within it. So if that comes in the form a holiday-week daydream (even if you’re supposed to be working), then go ahead and enjoy it. We promise not to tell anyone.

Happy Holidays!

At the end of 2020, it would have been disheartening to think that a similar level of uncertainty would still be present at the end of 2021. But … here we are, and questions still abound. Have we gone through the worst of a pandemic or are we still in the middle of it? Where will the midterm elections bring us in 2022? Are we sitting on as much of a political powder keg as it sometimes feels?

During times when so much feels uncertain, it becomes ever more important to check in with yourself, to see how you are really doing. This is also applicable to your business if you happen to own one. So this week, I wanted to implore those of you in that situation to take a moment and do that check in with your yourself and your business.

One reason this is a good idea is because you can’t really move forward without knowing where you have been. If you don’t take the time to do that check-in, then you aren’t learning. You will be making choices based on whims and that is never going to lead to long-term success. When you think about the last year, be sure to look at both successes and failures. Did you not complete everything you had hoped to? If so, why? And even if outside circumstances are to blame, how could you have handled and/or prepared for them better? But also, where did you shine despite those circumstances?

If there is unfinished business that you hoped to complete, how can you still get there moving forward? And don’t just answer such questions with vague assurances and promises. Saying you’ll get there eventually means you can keep kicking your definition of ‘eventually’ down the road. Be sure to set very distinct goals with definite timeframes.

And do not only commit yourself to finishing what remains unfinished. Be sure to ask yourself new questions, too. What would you still like to change about yourself or how you behave in your business? What are you looking forward to learning or implementing? Where can you continue to improve? What is a big risk you are willing to take?

A way to deal with a time of uncertainty is to just kind of move along, be tossed around by the waves, and just keep your head above water. And you may ‘just survive’ for a while with that attitude, but things will never improve. And then when times get more certain, you will not be ready to adapt to them because you haven’t been looking forward the whole time. So may this moment of reflection serve you well, help you find solace, and let you derive strength from where you are even in tumultuous times.

If you started a business before March of 2020, the landscape of your industry is most likely nothing like it was when you started. The pandemic changed nearly anything in some way. One of the biggest results of this was an increase in technological advances and how much they were embraced.

We clearly are not yet through this global sea change, so it is impossible to give any definitive conclusions about its fallout. It is naïve, however, to think that everything is going to go back to just how it was in February 2020. So this is a call to business owners out there to embrace any new technologies your industries have moved toward during this time.

I started to think of this when word came out that the IRS was going to be accepting more digital signatures through Oct. 31, 2023. This is something that had already been extended a few times by the agency, and is looking like one of those things that they probably won’t be able to take back.

And why can’t things go back to how they were here? Convenience.

The key with a lot of the new technologies that have been being embraced is that they are designed to take less time and less work. If we can collaborate on a task in different locations at different times, it removes a lot of obstacles. There is no need to set up meeting times or possibly sit around while you watch someone complete one part of their task before doing yours.

And of course I can understand why some have reluctance to embrace some of these technologies. I mean, I just talked about things taking less time but there is clearly a time commitment involved in learning how to use and implement anything new. And of course, as with most new things, there can be a reluctance to look at it because you already know how to do what you’re doing, and likely do it very well, so why could you change?

Well the reason to change is that others are. How can you draw in new people to your business if a competitor is offering them more services with less hassle and it takes less time from them? I foresee many businesses that don’t adapt with the times being left behind by these times.

And if even a Luddite like the IRS is looking at new ways to make things easier, shouldn’t you?

It happened. We are actually in the final month of the year. We have already talked a bit here about getting to the end of the year and your last chances to make moves that can affect your tax picture. And now, it is December, the chances are decreasing, and it will be 2022 almost before we know it.

So consider that another little warning about timing.

But there’s no need to be all doom and gloom here, for there can be good news when it comes to taxes. (I know, I know, that sounds utterly impossible.)

First, last month the IRS released some guidance over a 100% deduction for food and beverage from restaurants. That’s right, 100%! Now, can you even get more good news than that?

You can! It applies to next year, too!

Hyperbolic exclamation points aside, this is something that will be a pretty good benefit for many. The actual IRS news about this is full of boring notices and procedures, but what they represent is not complicated. The meals deduction is usually 50%, so when you double what you are eligible for, that’s a good thing. Granted, this isn’t something so huge that I’m recommending planning some more end-of-year work dinners, but it is still a benefit worth highlighting. So just remember to keep those receipts after you have finished eating.

And yes, it is now time for the return of excessive punctuation! For did you know that teachers were also eligible for some deductions?!?!

This essentially is a deduction for classroom expenses that teachers paid out of their own pockets. Again, there is some hyperbole involved here, though, for this deduction caps out at $250 for an individual. The IRS sent out another notice about it last month, though, so I figured it was worth highlighting it here, too.

These may be only small bits, but they call attention to a bigger point about timing. The more prepared you are for your tax return, the more deductions you will have time to find out about, document, and claim. Each individual deduction may not be the difference between owing money and getting a hefty refund, but enough of them could shift things in a significantly better direction. And sure, the things we most look forward to this month aren’t tax preparation, but don’t forget about how good it can be to be on top of things before it is too late and time gets away from you.

It is a good general rule to know that if anyone receives money for a good or service, the IRS wants to know about it. Income is taxable, no matter how it is received. This basic tenet is reasonable and understandable, but as more people use more money in new ways, it can take a while for some of the rules around that to make complete sense.

This has been most noticeable in recent years when it comes to cryptocurrency. No matter whether you think of it as an investment or another type of currency, if it is worth more than you paid for it, there’s an amount in there that is taxable and the IRS has been working on cracking down on getting its share of that. Beginning next year, it will start to have its hands deeper in payment apps, as well.

Your first question may be just what is a payment app? The answer is probably simpler than you realize, for most of us have used something along the lines of PayPal or Venmo to send and/or receive money. At the same time, you may be surprised to think that this could affect your tax picture if you mainly use it to pay someone back when they go pick up coffee. If that is all you use such platforms for, though, then don’t worry, you will not be affected by this. What will be changing is payment app providers will have to start reporting if a user’s business transactions total $600 or more a year. If you want to get into the weeds on this, you can read this recent article from CNN.

This isn’t the space to get into deep details, but I do want to highlight a couple takeaways from this:

The biggest thing is that this is not making any sort of transaction newly taxable. Rather, this is being put in place because the IRS is trying to track down transactions that are already taxable and may be slipping through the cracks. So if you are already paying taxes on everything you should be, this is not increasing your tax burden.

The next thing to know about this, though, is that it might be making things messier for some and placing the burden on the taxpayer to find a way through that mess. First, it’s possible that one could receive a 1099 from a payment app for transactions that should not be taxable. It could then fall to the taxpayer to have to explain that to the IRS. It’s also possible that you will receive a 1099 from a payment app and also a 1099 from a client for the same transaction. Again, it would then fall to the taxpayer to explain to the IRS that they are not covering separate events and reflect the same money.

So don’t be afraid that this is going to increase your tax obligation in any way, but be aware that you may need to be vigilant to ensure that this reported on your tax return in the right way. Even if this isn’t going into action until next year, I wanted to mention it now so that we can be ready to help you handle this in the right way.

  

I have written a lot recently about this being the time when you must start thinking about big moves you can make if you still want to really affect your tax picture. Granted, this is a discussion that is not for everyone. You need to have a certain amount of money (and possibly in the right places) for some of that to really matter. For this week, though, I want to talk about a smaller thing that everyone can do.

Tax laws are currently set up that you usually cannot claim a deduction for charitable contributions unless you are itemizing your deductions. Legislation passed during the coronavirus pandemic, however, allowed for everyone to claim some of that deduction for tax year 2020 and it will now continue through the 2021 tax year. This allows an individual to claim up to $300, with married people filing a joint return qualifying for up to $600.

Now sure, as I intimated above, this is not a huge amount of money and not being taxed on a few hundred dollars isn’t going to result in you getting some massive windfall of a tax refund. I do still want to highlight the availability of this deduction, though, as an extra little impetus to do an extra little good during this time of year when many could use it.

First, I don’t want this to be such a push as to be asking those who cannot afford it to donate money they do not have. Your obligation then is to take care of yourself and any family depending on you. Beyond that, though, if you can give, please do. Chances are really good that you will feel better about putting the money there than in your next few coffees.

So if you do have enough to give, give to something meaningful to you. Is there an organization doing something in your local area that you admire? Have you or someone in your family personally benefitted from the work of a charitable group? Do you feel a pull to a cause every time you hear about it but have never actually donated to it? No matter where you fall, no matter how you feel, there are connections that can be found which will leave you feeling happy and satisfied with where a donation goes.

And all of that is even before you get that little tax benefit at the end of it. So how can you lose? 

Over the past couple of weeks, I have been writing about looking forward to next tax season and getting a hold on your situation while there is still time. This week, I wanted to change the focus a bit to those who may be paying taxes for the first time.

I first started thinking about this group because of this recent article, which discusses how some NCAA athletes may be receiving payments for the first time. We are still in the early stages of seeing how (and how much) these athletes are going to be paid, but I am sure the tax implications of what they receive are going to be a surprise for some. Ideally, their institutions would provide some guidance on this, but how much of it, how good it is, and how well people listen are certain to vary.

Now this may feel like a small group of people, and the high-profile ones certainly will be a limited batch. The amount of people who have to pay taxes for the first time each year, though, is still pretty vast. As we get older, paying taxes (and having them withheld from our paychecks) just becomes part of the process and many do not give it a second thought. I think many of us, though, can still remember when we were younger and had to enter that so very ‘adult’ world.

Traditionally, this was not necessarily a trying experience. You filled out a form when you got your first job, some amount of money was taken out of your pay, and then when it came tax filing, you found someone who could help you with that part of it. With more and more people making money in new ways, though, this can get complicated. After all, it’s not only the NCAA’s ‘real’ sports that come with payouts, others are making money in Esports, as well. Add in delivery drivers and other types of ever more available freelance work and you build a larger and larger group of younger people with a cloudier and cloudier tax picture than the one seen by previous generations.

Let this then be a call to not only give some thought to your tax picture as we approach the end of the year, but to also think if there are people in your life who may not have had to have these thoughts before. And if there are, give them a nudge to do so. For to them, those potential unpleasant surprises at filing time may be even more surprising if they didn’t appreciate that they were even possible