Summer is nearing an end, but this has been no ordinary summer.
Everywhere, parents are scrambling in the most unusual “back to school” season in memory. Fall sports are in limbo, and others (MLB, NHL, NBA) are operating in a weird Twilight Zone mode. Urban centers are shells of themselves, violence is rising, and this virus is still making its inexorable way throughout the land. Oh, and there’s an election in about 80 days (not sure if you’ve heard?).
I will also say this: there *is* good news around us when we take the time to look for it. Spend some time right here whenever you need a break from the unrelenting doom.
That said, I want to offer some practical advice for families and individuals who peer into the next few months and (maybe for the first time) want to be prepared for real disaster. I’ve gathered some advice that I think you will find useful. It’s mostly “non-financial” and more practical.
But on the financial front, I want to address questions about the payroll tax holiday I recently wrote about…
If I take advantage of pausing my payroll taxes, won’t I be left with a big tax bill at the end of the year?
Sadly, this is a distinct possibility. Congress is the only authority that can definitively change tax obligations. As I’ve digested these recent executive orders, I can’t in good conscience advise that you plan on forgiveness of these taxes … only a deferment.
Ok, but I would still like to defer these taxes for now, recognizing that I might have to pay them later … how would I go about doing that?
This would be something you would have to take up directly with your employer. The Treasury hasn’t issued final guidance, so procedures aren’t locked in, but it would be a good idea to raise the issue now, and let your employer or HR department know you’re still interested.
Should I as an employer continue taking taxes out or not? Do I have the option either way?
Yes, per the order, this would be up to you. But again — I suggest you treat this as an optional deferment — not forgiveness. So if you’re comfortable paying more at the end of the year, by all means … defer.
Does the president not have the power to forgive the taxes altogether? Is that why he left it to Congress to decide? Who has the power to decide (Congress, president, Treasury Secretary)?
Again, as I mentioned … resolution on this issue is ultimately something that must be done through Congressional legislative processes, in order to achieve actual forgiveness.
So … keep your powder dry, unless you’re comfortable paying more at the end of the year. I will keep you posted if anything changes on this front (and it might).
Now … back to being prepared for potential disasters in our future…
How To Ensure Families Are Prepared For Chaos
“Arrange whatever pieces come your way.” – Virginia Woolf
2020 has more and more of my friends and acquaintances now thinking: “security, safety, preparation.”
And they wouldn’t be wrong to be thinking in that direction.
But that doesn’t mean you have to panic.
No, with a few basic points of preparation, you and your family could be vastly more prepared for chaos than you might otherwise have been, even giving you the opportunity to be ones who can support and assist your neighbors, rather than having to *ask* for support in a serious crisis — whether it involves violence, infrastructure failure, or whatever other kind of “unprecedented” problem the rest of 2020 might toss our way.
So, leaving aside financial preparation (which is a general topic we’ve been covering these past six months), there are three key areas for which every household should have a plan to be prepared for chaos, however it should come.
1) Energy: However unlikely a massive grid failure might seem now, it’s important that you at least think through what you and your family would do about heating your home during the winter (wood stove? indoor propane heater? burning your furniture?), and/or cooling your home during the summer (which may not be quite as critical).
Additionally, consider what parts of your existence are dependent on power, and what it would be like to live without it. Write down your plan.
2) Food & Water: For water and food, it’s a very good idea to have food and water for at least 3 days on hand, and in permanent storage. Typically, you need about a gallon of water, per person, per day … and non-perishable food is now so readily-available, that you have your pick for how to stock up. You can save water in a leech-proof plastic jug and just switch it out every 5 years.
3) Family Plan: Identify meeting places where you and your family would come together, in the event of some sort of catastrophic grid failure or event, in which you aren’t able to stay at home.
Put together a “Go Bag” for your family, which carries critical supplies and information for whatever circumstance you may run across.
Here is what your bag/package should include …
- A disaster plan including location of emergency centers, rallying points, possible evacuation routes, etc.
- Positive Identification, such as driver’s license, state I.D. card, or social security card
- Enough medicine to last an extended evacuation period
- Cash and change, as electronic banking transactions may not be available during the initial period following an emergency or evacuation
- A first aid kit
- Fire starting tool (e.g., matches, ferrocerium rod, lighter, etc.)
- Professional emergency literature explaining what to do in various types of disaster, studied and understood before the actual disaster but kept for reference
- Maps and travel information
- Standard camping equipment, including sanitation supplies
- Weather-appropriate clothing (e.g., poncho, headwear, gloves, etc.)
- Bedding items such as sleeping bags and blankets
- Medical records
- Pet, child, and elderly care needs
- Battery- or crank-operated radio
- Lighting (battery- or crank-powered flashlight, glow sticks)
- Firearms and appropriate ammunition
- Fixed-blade and folding knife
- Duct Tape and rope/paracord
- Plastic tarps for shelter and water collection
- Slingshot, pellet gun, blowgun or other small game hunting equipment
- Wire for binding and animal traps
This all might seem a bit excessive now … but so does every disaster plan — until disaster actually strikes.
So, perhaps make it a fun family activity to work through setting up these plans, and you’ll sleep much better knowing you’re prepared.
To your family’s lasting financial and emotional peace…
Emelia Mensa EA, CPA
“CRISIS Action Plan” for my 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.