As companies open again, employers may have discovered that a new normal may increase employee satisfaction and productivity. For example, remote work may have worked best for some, while others prefer the socialization of the workplace. Here are some things to consider:
Employees who have worked remotely for more than a year may be hesitant to return to the office full time, instead preferring a flexible or hybrid office schedule. If possible, offer employees the option to work from home a few days a week. This means your employees will be happier and it may allow you to reduce the footprint of your office space, saving your business money.
DON’T SWEAT THE SMALL STUFF
With employees requesting more flexibility, it might mean that perks — like an on-site gym or coffee bar — may not be valued as much by a workforce that doesn’t frequent the office. Some employees may elect to give up these small perks to have a flexible work schedule.
It might be easy to fall into the trap of requiring more from remote employees because they no longer have to commute. Don’t expect them to substitute their former commute time with more working hours. Demanding hyper-productivity can lead to burnout, frustration and negativity that may cause hard-working employees to quit. Respect normal working hours and avoid meetings or phone calls outside of that time frame.
BRING IT BACK IN
If you determine that you need your employees to return to the office, respect that some of them may have safety concerns.
Also acknowledge that returning to the office, after more than a year of remote work, will be an adjustment. Employees will need to acclimate to the high-stimulus environment of the worksite, with sounds and activity all around them. This can create sensory overload initially, so prepare for employees to ease back into the office. Every company is different and any changes need to work well for yours.
The December 2020 stimulus package provided a few noteworthy tax breaks for companies.
A temporary tax break for 2021 and 2022 allows businesses to deduct 100% of business meals eaten at a restaurant, up from the usual 50%.
For businesses hard hit by the COVID-19 pandemic, the Employee Retention Tax Credit is available for the first half of 2021. Eligible businesses that were either shut down by the government or incurred at least a 20% reduction in gross receipts for one of the first two quarters of 2021 may qualify for this credit of up to $14,000 per employee. Claim this credit when you file quarterly form 941.
The Work Opportunity Tax Credit and the Family Medical Leave Tax Credit were extended to December 31, 2025.
Employers who pay qualified education expenses, including student loan payments, for employees can deduct up to $5,250 per employee through 2025.
PARENTS DOING TOO MUCH?
According to a new Pew Research Center study Americans believe that young adults should be financially independent by age 22, but that is not the reality. The study found that only 24% of young adults were financially independent by age 22 or younger, compared with 32% in 1980. Also 45% of adults ages 18-29 reportedly received financial help from their parents in the past 12 months.
SMALL BUSINESSES AND PPP
The National Federation of Independent Businesses reported that 70% of small business owners tried to apply for the Paycheck Protection Program as of mid-April. More than 72% of those who submitted applications did so successfully. The majority of this group (84%) already had some type of account with the bank.
CORONAVIRUS PHISHING ATTACKS
Global governmental entities, including the FBI and WHO, are issuing warnings about increasingly common email scams. Some may promise a vaccine or solicit donations for COVID-19 victims. Others are trying to take advantage of the new work-from-home movement by impersonating your company’s human resources department and requesting log-in credentials. It’s more important than ever to remain vigilant in monitoring your inbox and verifying all identities before clicking links or sending a response.
INDUSTRIES THAT PROFITED DURING COVID-19
While the coronavirus pandemic has been devastating to businesses around the globe, some sectors have flourished. Meal delivery kit service Blue Apron, for example, struggled after going public a few years ago, but has since seen a surge and is actively hiring. Other unconventional items that have jumped in popularity include bidets and high fashion face masks that were originally designed for those with immunosuppressant issues.
In order to help businesses and individuals cope with the fallout of the COVID-19 crisis, the IRS extended the 2019 federal tax filing deadline from April 15 to July 15, 2020. The extension also applies to 2019 traditional IRA and ROTH IRA contributions. Payment of 2020 first and second quarters’ estimated taxes is also postponed to July 15, 2020.
It’s important to note that some states—but not all—have extended filing deadlines. Check with your state to avoid late penalties.
Need More Time?
Don’t miss the July 15 deadline because any taxes filed on July 16, 2020 or later will be subject to penalties and interest accrual— unless you have filed for an extension to October 15, 2020. To apply for the extension to October 15th, individuals must file IRS Form 4868 while businesses need to file Form 7004 by July 15th.
I am filing taxes on July 15. Can I still contribute to my IRA?
Yes, but your income and tax filing status will determine if your traditional IRA contributions are tax-deductible. For example, if you are covered by a retirement plan at work and your tax filing status is single or head of household, you can make a tax-deductible contribution of up to the limit of $6,000 if your modified adjusted gross income (MAGI) is $64,000 or less. Take a partial deduction if your MAGI is between $64,000 and $74,000.
If you file jointly or are a qualified widower, the income limit for a full deduction is $103,000. Married taxpayers filing jointly have no income limits to qualify for tax-deductible contributions when neither has a workplace retirement plan. If your spouse has a workplace plan and you don’t, take a full deduction if your MAGI is $193,000.
I was laid off because of COVID-19. Will I have to pay taxes on my unemployment benefits?
Yes, unemployment benefits are generally taxed at federal ordinary income rates. Some states also count unemployment benefits as taxable income while others exempt it. You can opt to have 10% withheld from each payment. No other percentage or amount is allowed.