Tuesday, August 3, 2021
August 2021 Financial Update
To work from home or not to work from home? Work-from-home seems to be a question on everyone’s minds. It’s a big question, because 42% of the U.S. workforce was working from home during the pandemic. Shifting that dynamic back would be a big task, but one that looks like it’s in process. Still, work won’t entirely going back to business as usual. A recent survey indicated that nearly 30% of working professionals would quit their jobs if they were forced to return to the office. This may be why so many companies have announced a switch to a hybrid or flexible model that doesn’t require a full-time return, or a return at all. People are also inventing new styles of working that are more flexible and less centralized.
Overall though, there seems to be a lot of uncertainty about what will work and how. Many employers are attempting to assert that work-from-home is a privilege and not a right, while employees demand concessions. Some worry that having some employees working from and some not will create two classes of employees that aren’t equal. Some companies are suggesting that where you work should be reflected in your pay–but that’s quite understandably an enraging idea to some. Ggetting paid more to be in an office definitely sends a message about what the employer prefers. Companies’ opinions about work-from-home aren’t carrying the day, however, because it appears job seekers have a fair bit of negotiating power in the current market. According to Indeed, demand for workers has increased, words like “urgent” are more common in hiring posts, and that hiring incentives are common.
So who’s going back to the office and who isn’t?
Here at Happy Bookkeeping we’ve always been remote, but it appears that we are the minority in accounting–contrary to some WFH enthusiasm during the pandemic, accountants generally expect to return to the office. So what about other fields? It very much depends on what field you’re in, according to many surveys, but across the board as of June work-from-home was a declining phenomenon.
So what’s the bottom line on work-from home? Despite all the media coverage and employer concessions, as of June 2021 work-from-home has dropped by half across the United States.
2021 Financial Calendar – August:
Now that you’ve filed your taxes, contemplated your retirement savings, and completed a mid-year review, what’s next to consider this year to keep your finances healthy? Your credit score! August is a good time to get all your credit reports from the major credit agencies (Experian, Equifax and TransUnion each provide a free report annually) and look for any errors or problems on them. Keeping your credit score healthy is an important part of financial health.
Businesses also have credit scores and should mind their credit. The SBA has information on how to establish and keep up your business credit score. A variety of business credit reporting agencies exist, which may or may not have information on your business.
2021 Tax Updates and Dates
August 2 has a variety of tax deadlines. For a full list including payroll tax deposit dates, see the IRS Tax Calendar.
- August 2: Quarterly excise tax reports are due, Form 720;
- August 2: Quarterly payroll tax reports are due, Form 941;
- August 2: FUTA for January through June is due if more than $500 is owed;
- August 2: 2020 calendar year employee benefit plan filings are due, Form 5550 series.
Government Aid in Coronatimes
Many Americans received a letter about the American Rescue Plan individual and family payments from President Biden. Hopefully they also received the funds. The IRS reports that more than 2.2 million additional disbursements under the plan have been made as of July 21. HHS reports that many are eligible to receive health insurance lowered costs as a result of the plan as well. In addition, this fall the Advance Child Tax Credit will pay out half the credit to American in advance, with the final half claimed on an individual’s tax return.
The Paycheck Protection Plan ended on May 31, 2021, a huge program from the federal government to support small businesses. “From April 2020 through May 2021, the program provided approximately 12 million loans totaling nearly $800 million that helped businesses keep their workforce employed during the COVID-19 crisis.” (Source JD Supra) Many businesses continue to use the funds and apply for forgiveness. The Federal Reserve Bank of St. Louis offers this post-mortem on the program.
For the last time, the Usual 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
To continue the WFH theme, from Insider, the share of total employed who worked from home by job. This chart is taken from Bureau of Labor Statistics data.
The U.S. Department of Labor blog has statistics about the June job report, including the disparities in job recovery among different sectors of employees. One other thing to pull out from their report is this: “Workers are seeing strong growth in their wages, with an increase of 1.4% in average hourly earnings over the past three months. This is the biggest three-month increase we’ve seen during any pre-pandemic period since 2006. This is great news for workers, especially those who have suffered stagnant wages for years.”
Business Links!
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How to Build Business Credit | What is Business Credit?
Does your business have good credit? Why you should establish credit for your business, and how.
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Going back to the office or permanent remote: the future of WFH.
From What Next: TBD podcast, a discussion of work from home and the knock-on effects. What's really possible with today's workforce?
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President Biden has proposed some major changes to the US tax system, including changes to employment taxes for S Corp shareholders. Will companies abandon the S Corp model if these changes are approved?
Nonprofit Links!
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Nonprofit ‘Salary Secrecy’ Targeted in the Name of Pay Equity
Critics of salary secrecy say that it contributes to racially- and gender-based inequality in the nonprofit workforce. Critics are advising more openness in salary ranges.
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Crowdfunding sites like GoFundMe fails most of those in need - Los Angeles Times
Crowdfunding during the pandemic reached an all-time high, but as the LA Times reports, the gains were unequal. Most of the funds received were from people with pre-established networks in areas with higher levels of education and income, leaving many out.
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Strong Hiring at Nonprofits Means 60% of Jobs Lost to Covid Have Been Restored
Nonprofits lost a lot of jobs during COVID, but are showing a strong resurgence as America tries to recover from the COVID crisis.
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Critics take aim at charitable money sitting in donor funds
Donor-advised-funds - a tool for philanthropy, or for the wealthy to avoid taxation? A Senate bill proposes to tighten rules on DAFS to encourage giving to charities, rather than the funds sitting indefinitely in accounts.
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Good Reads You Might Have Missed: Data Privacy: Associations Now
The last thing a nonprofit or association wants is a data breach. How do you balance sponsor, donor and internal needs for privacy?
Security Links!
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US State Privacy Legislation Tracker
Curious about the state of privacy legislation in the US? This handy state-by-state tracker will tell you what's in process right now.
