Tuesday, March 2, 2021
April 2021 Financial Update
One of these days, I’m going to write a newsletter that has nothing to do with the pandemic, and on that day I will rejoice. Today isn’t that day.
April marks the point in the pandemic in 2020 when the facts and figures coming out about the economy started looking really grim, and the graphics resembled a fall off a cliff. The initial shutdown adversely affected millions of people and businesses, and the effects of the continuing pandemic continues to do so. There is light on the horizon with the mass roll-out of several vaccines, however, it will take time for immunity on a massive scale to be realized. Meanwhile, the Biden administration rolled out the American Rescue Act, giving financial relief to a number of sectors of the population through different grants and programs.
In other news, and surprising very few people, the Institute of Management Accountants and CalCPA (California Society of Certified Public Accountants) report that accounting has a serious diversity problem. Why is this a problem? As the CPA Journal puts it, “a diverse work force is essential when serving a diverse client base,” among other reasons. In the UK, the Institute of Chartered Accountants in England and Wales put together a study looking at how accounting firms look at diversity, and the policies and procedures that are attempting to improve diversity.
2021 Financial Calendar – April:
Part of calculating taxes is calculating some key deductions to lower your taxes. One major one is contributions to retirement. Have you considered what you can contribute this year? The 2021 combined annual contribution limit for Roth and traditional IRAs is $6,000 ($7,000 if you’re age 50 or older). This is the same amount as 2020. You have from Jan. 1, 2021, to April 15, 2022, to contribute to an IRA.
April is also Financial Literacy Month. This isn’t just for adults, it’s for kids too – teaching financial literacy will be important when those kids reach adulthood! It’s never too late, however, to learn financial literacy if you weren’t taught it in school.
2021 Tax Updates and Dates
April is usually the last month of tax season, but not this year. Even through the IRS has extended the deadline to May 17, there are still deadlines in April. For a full list of tax deadline dates, see the IRS Tax Calendar:
- April 15: Some states may require individual taxes to be filed today. For a full list of state decisions regarding tax deadlines, see this article.
- April 30: Deposit FUTA tax owed through March if more than $500. Also, employers should file Form 941 for the first quarter.
Government Aid in Coronatimes
In March, the big news was that the government passed the American Rescue Act. Here’s a breakdown on what that means for small businesses and individuals. A few highlights from the bill include:
- Changes to Paycheck Protection Program
- Changes to the Economic Impact program (EIDL)
- The Restaurant Revitalization Fund (RRF)
- Shuttered Venue Operators Grant (SVOG)
- Childcare Provider relief funds
- Funding for the Community Navigators program
- A vareity of updates to different tax credits, including the employee retention credit, family and sick leave tax credits, child tax credit, child and dependent care credit, and earned income tax credit.
State tax concerns: Concerns over PPP taxation continue in tax season. Last month, the IRS at the request of Congress has reversed their ruling taxing PPP income. However, many states decided not to conform. The AICPA has released a summary of the different state impacts of PPP, and details regarding those states’ individual legislative initiatives and taxes on PPP.
PPP Application and Forgiveness Resources
- Gusto’s Small Business Guide to PPP Round 2 Funding
- NFIB’s Guide to Forgiveness of PPP Loans under $50,000
- the FMA PPP Toolbox for Nonprofits
- the Freelancers Mutual Aid Circle,
- the SBA’s Coronavirus Small Business Guidance page
- Quickbooks has a Q&A Forum on the PPP
- Gusto Payroll has a Step-by-Step Guide to the forgiveness application
- Paychex has a PPP Practical Guide
What’s Happening, in Charts
The vaccine has had an effect on everything, from personal lives to the stock market. Here’s how the stock market has performed since Pfizer announce its first viable vaccine last November. Lots of optimism!
Quite a bit has been written about the unequal impact of the pandemic on women in the workforce, but what about women of color? The Department of Labor reports that “While Black women historically experience the highest labor force participation among women and are more likely to hold multiple jobs than other women or men, throughout the pandemic, Black women have endured the highest unemployment rates. More than half of employed Black women worked in industries hit the hardest by COVID-19.”
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