January 21, 2022
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It’s about to get messy
The past two years have featured a rough couple of pandemic tax seasons. Not only have we missed the long-entrenched official Tax Day of April 15 two years running, but there have been myriad new Covid-specific tax credits and stipulations to keep up with. So when the IRS warns that this tax season is going to be “messy,” we pay attention:
The federal tax filing season will run from Jan. 24 to April 18 this year, the Internal Revenue Service said on Monday, warning in its announcement that staffing shortages and paperwork backlogs could make for a messy and frustrating experience for taxpayers.
In a briefing on Monday, Treasury Department officials said that the I.R.S. would struggle to promptly answer telephone calls from taxpayers with questions and that a lower level of service should be expected.
Essentially, the historically understaffed and ill-equipped IRS hasn’t been immune to the additional staffing shortages brought on by the recent spread of the Omicron variant—and it’s going to take even longer than usual to get questions answered and paperwork filed during peak times this year.
What can you do to ensure as smooth a tax season as possible? Here are a few tips from the legal experts at Gusto:
- Know your deadlines, and file early. Break out those Post-It notes or Google Cal reminders—whatever works within your system so you don’t miss a beat. Here’s a refresher on tax forms that need to be filed at the end of this month.
- Double and triple check your returns for accuracy to minimize the need for back-and-forth.
- Be patient. With the fore-knowledge of these challenges coming down the road, plan ahead as much as possible to allow yourself—and others—time and grace to deal with the additional wait.
Have tax questions going into this filing season? Reply to this email with them so we can surface answers for you!
The states’ share
The State Small Business Credit Initiative (SSBCI) is a $10 billion commitment from the U.S. government to support small businesses using funds from last year’s $1.9 trillion stimulus package. The program aims to direct money towards disadvantaged groups, including racial minorities, rural communities, and veterans who were underserved by the Paycheck Protection Program (PPP).
The funds will be used to back targeted local investing and lending programs, with $3.5 billion dedicated to the following buckets:
- $2.5 billion total state funds for businesses owned by the socially and economically disadvantaged
- $500 million for very small businesses (fewer than 10 employees)
- $500 million for technical assistance
States will receive money based on a formula that accounts for hardships, like job losses, in comparison with the national average. For business owners still struggling financially, it’s important to be aware of this new financing option and your potential eligibility. Review the application overview to learn how to determine your eligibility and apply, and stay tuned for more updates on the program’s rollout.
Supreme Court overturns vaccine mandate
Last Thursday, the U.S. Supreme Court blocked the vaccine-or-testing rule developed by the Occupational Safety and Health Administration (OSHA) for businesses with 100 or more employees, but allowed the mandate to remain in place for healthcare workers.
This means there are no federal requirements or resulting citations going into effect for large businesses this month, but it also means that those employers—especially those with distributed teams—will face the challenge of staying up to date with a “patchwork” of state and local regulations to remain compliant:
As of this month, 13 states have some form of prohibition against requiring people to be vaccinated or to showing proof of immunization, according to the Kaiser Family Foundation, a health-policy organization. In Montana, employers cannot take action against workers based on vaccination status. Texas forbids employers from compelling workers or consumers to receive a coronavirus vaccine. And in Utah, employers must offer an exemption to any employee or job applicant who does not want to receive a vaccine or show proof of having gotten a shot.
“That’s one of the main challenges. There are different stances on how states deal with vaccine,” said Anthony Perera, founder and chief executive of Air Pros USA, a home-services company specializing in heating and air conditioning with branches in seven states, including Florida and Colorado. Adhering to each state’s rule “is more of an administrative pain in the neck for us,” Perera said, especially as the company has grown from 200 workers to about 500 during the pandemic.
Be sure to check your local laws before developing your company vaccination policy, and get the latest general guidance about workplace vaccine mandates here.
How to raise prices (and keep your customers)
Over the last year your margins have steadily shrunk. Nationwide demand for nearly every consumer product has spiked sharply, along with the costs of labor and materials to produce them. Logic and the law of supply and demand are all in favor of raising prices, but it’s still never any easy sell with customers.
Inc. columnist Jeff Haden shares a four-step process for maintaining good relationships with your customers when you decide to raise prices. Read more here.
Watchlist
Jan 27: Your Business May Qualify to Save Thousands with the R&D Tax Credit (Replay)
Many businesses think they don’t qualify for R&D tax credits if they don’t… do R&D. But that’s false. If you develop new products, reduce uncertainty through innovation, or use hard sciences, you may qualify for up to $250,000 a year in tax credits to offset payroll costs and an unlimited amount to offset income taxes. On Jan. 27, join us for a live replay of our webinar on how to calculate and claim the R&D credit, and ask our panel of CPAs anything during Q&A. Register now.
New from Gusto
- Do You Need a Manager or a Leader? What’s the Difference?
- REPORT: How Protecting Workers’ Health and Wealth Can Help Business Owners Combat the Great Resignation
- Gusto Submits Comment to House Select Committee on Economic Disparity and Fairness in Growth
Find the latest relief options in our Small Business Relief Finder.
Want more news and resources? Check out past editions in our archive.
