Still no guidance from the IRS about the payroll tax “holiday” (deferral), so it’s extremely unlikely that your employer will be ready — simply because the major payroll companies (Paychex, ADP, Gusto, and many others) don’t have the answers to many questions.
Implementing these kinds of “optional” changes is hard. For example, payroll companies would have to recalculate the payroll tax in the middle of a quarter and set it up to apply to some employers and some workers — but not others.
All of this means you might not see any savings on your paycheck from this in early September. If it were a “suspension” of the payroll tax (and not a deferral), things would be much simpler … but the President can’t do that at the stroke of a pen — that’s a Congressional matter (separation of powers, and whatnot).
And we all know how smoothly things typically get through Congress. :-/
So, as I recently advised: keep your powder dry and don’t look to this very much as a financial help.
In fact, it’s a good principle: if you’re reading this, that means that you almost certainly have specific, tangible advantages over many billions of people around the globe.
Rather than looking to outside forces to save your financial bacon, what can you do THIS WEEK to find more financial margin? Are there expenses you can cut, additional revenue streams to add (a second/third/fourth job, selling things around the house, etc.), other resources you can tap?
And I know … for some, these are unrealistic options for many possible reasons. These are not easy times.
But regardless, we have a choice: we can either stew in our juice about hard things “out there” … or we can take positive action today to do something about it for ourselves and our family.
What’s it going to be for you?
We’re here to help you through it, even if it’s just that you need a pep talk.
But even more than a pep talk,
there’s likely to be much more that we can help you with.
Over the course of the past months (both before and after the tax deadline), we had the privilege to meet with New Haven County individuals and clients who were taking positive action. And then, on top of that (and with our advice), just a few small tweaks realize real, tangible savings over the course of years (not just on their tax return).
Use this to connect with my office: https://waterbury-cpa.com/schedule/ (or reply to this strategy note by sending us an email) and request one of our limited Tax Planning Saver Sessions. During this session, we will analyze your current situation and identify clear action steps for the last quarter of 2020 — designed to save your bottom line hundreds (or even thousands).
You can’t control outside factors, but you CAN control your tax and financial strategy … and we can help.
To your family’s lasting financial and emotional peace…
You’ve got us in your corner.
Emelia Mensa EA, CPA
“CRISIS Action Plan” for my Connecticut tax clients and friends:
1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.
2) Continue to stay financially and logistically prepared for worsening situations.
3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)
4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.