"That's just a facade," says Samuel Handwerger, a practicing accountant and full-time lecturer in the department of accounting and information assurance at the University of Maryland's Robert H. Smith School of Business. "When you put the fear of the virus, the economy, and the future all together in one moment in time, it's a formula for something not at all reposeful."
In his less-than-tranquil free moments, Handwerger decided to focus not on all of the economic and societal uncertainties brought by the global pandemic, but instead on what he knows to be true. Here's the advice he's giving to his clients, and anyone else who needs to hear it.
First, watch out for cybercrime. "It is a rather sad part of our world at large. Even at times like this, there is an evil element waiting to take advantage of people," he says. Bogus charities already exist, asking you for money for the coronavirus crisis – whether for cures or to help people in need. Do yourself and your money a favor, he says, and give only to registered charities as found on guidestar.org or the IRS website.
Understand what's tax-deductible. Understand that a legitimate charity can raise money for a particular individual or family, but money donated with such in mind is not tax deductible. In essence, it is considered a gift to the person(s) so named. The charity should so inform you.
Prepare for jobless benefit taxes. Many companies may be laying off employees, some of them just temporarily. These workers will be eligible for unemployment compensation. But they should remember that these monies are taxable. No withholding tax will be taken out initially, but the income will be reported later, and tax may be owed next tax filing season. Budget accordingly, if you can.
More on Marylandian
- Florida Governor Issues Stay-at-Home Order All Legal Proceedings Must Go Online
- 230V in the vehicle made easy and powerful with an all-in-one inverter system
- Mahmood Khan Cracks ITUNES Australia Top Ten Charts
- Perdue Farms Achieves High Ranking from Global Business Benchmark on Farm Animal Welfare for Third Consecutive Year
- Morgan State Offers 4-star Freshman Guard Savon Sutton
Be careful tapping into savings. In a financial crisis, you may look to your retirement account for money. If you are under age 59 and a half, pulling money from retirement might be not only taxable, but also subject to a 10% penalty. There are possible exceptions to the penalty, depending on the kind of retirement account you have and the reason why you require the money. "Understand that needing the money just to pay the rent might not avoid the penalty, no matter how desperate that sounds," Handwerger says. Take money first from a Roth IRA that has been funded for at least five years or from non-retirement savings.
Know the costs of working from home. Many of us are working from home for now. Prior to the tax law changes made by the TCJA of 2017, the costs incurred while working from home for the convenience of the employer may have been tax deductible, subject to certain limitations. The TCJA eliminated all of that for employees. The self-employed can more easily deduct home office type costs. If you are an employee and can convince your employer to reimburse you for your trouble to work from home, the employer need only establish what is called an "accountable" plan and it will be tax deductible to the employer and not taxable to you. "This could be a great way to create a little happiness within the dark cloud. The types of costs eligible for this often do not add up to much, but, hey," Handwerger says, "every little bit helps." Examples may include a portion of your utility costs, internet fees, cellphone use, supplies and so on.
Count your added childcare costs. If you need to hire someone to come take care of the kids while you work from home, these costs will invariably be eligible for the childcare credit or for reimbursement from a childcare program at work, if your employer has one. Remember that eligible caregiving employees can include certain family members, such as grandparents, but, Handwerger adds, "given the health risks to the elderly (like me!) this is probably not the right thing to do to those grandparents just for a tax break!"
Take a deep breath. The IRS last week announced that tax returns are not due on that infamous April 15, rather both the returns and any payments due, including the 1st 2020 quarter estimates, are due July 15th, 2020. "Hopefully," Handwerger says, "it will ease some stress in an otherwise stressful period and help us all appear a bit more serene – if only from the outside."
More on Marylandian
- Eat Locally - Businesses Supporting Local Restaurants
- Slim LED Light Box in 10mm,16mm and 20mm with 5 Years Warranty and Custom Sizes
- Class Claims LLC Announces Practice to Assist Businesses with Government Loans and Grants
- ASI's 2020 Partner & Client Conference Goes Virtual as "iNNOVATIONS LIVE"
- Tampa President & Firm Found Guilty of Fraud - Plaintiff Awarded Nearly $1 Million
Go to Smith Brain Trust for related content at http://www.rhsmith.umd.edu/faculty-research/smithbraintrust and follow on Twitter @SmithBrainTrust.
About the University of Maryland's Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty masters, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.
Contact: Greg Muraski at [email protected]
Related Links https://www.rhsmith.umd.edu
SOURCE University of Maryland's Robert H. Smith School of Business
Filed Under: Business
Latest on Marylandian
- New Book Announcement: Executive Engagement Strategies—How to Have Conversations and Develop Relationships that Build B2B Business
- STG Logistics handles first FEMA charter of medical supplies
- COVID-19 UPDATE: Coronavirus Positive Patients' can use Sargas' Remote Monitoring platform to free up hospital beds and Medical Staff
- Smartglasses Roadmap – the 20's: New report details $34B market. Smartglasses replace smart phones and smart watches by 2030
- Maryland: Guidance for Food Supply Chain During "Stay at Home" Order
- Sweet James Offers Employees Emergency Relief and Help with Medical Bills
- Symplast Announced as Platinum Vendor of the American Med Spa Association; to Present Educational Webinar on Telehealth to all Society Members
- Maestro International Cargo handles sixteen COVID-19 charters in March including three pharma-only charters totaling 200 metric tons
- T. Rowe Price Offers Engaging Activities For Parents And Kids At Home With Its Money Confident Kids Program
- Reduced prices for mental health support during the difficulty and unknowns of Coronavirus
- National Opioid Crisis Expert Dr. John Rosa Talks About Toddlers Exposed To Pharmaceutical Drugs
- HoloBuilder Welcomes Takenaka Corporation to Their Innovators Club
- The Town Kitchen, PBC launches TTK Provisions to Serve Youth-Crafted, Locally Sourced Food and Essentials to Households in SF Bay Area
- Kyndall Francis Their Success is My Success
- The World's First Inflatable Sleeping Bag
- Humanity First USA Medical Supplies Needed
- Perdue Farms Confirms Positive Case of COVID-19 at Perry, Georgia Production Facility
- Former Isley Brother CHRIS JASPER pays tribute to a SAM COOKE classic ..."Nothing Can Change This Love"... Just Released!
- COVID-19: Non-profit Donates Supplies to Dockweiler State Beach Quarantine Zone
- Somatic Spiritual Counseling: New Psychotherapy Practice in Boulder, CO + Online