Hello, my friend. The world has shifted under our feet.
With the barrage of media, medical, and economic news flying at us, I want to stay in my lane today.
You don’t need more medical advice, you don’t need tips on working from home (at least today — I might share those later), or even my particular thoughts on the roots of this crisis. Last week, when I sent out the strategy note about household preparedness, I worried that it was excessively cautious. This week, I’m glad I’ve already spoken to that.
So today, let’s talk about taxes and your financial strategy for all of this. But let’s also talk about your mindset in the midst of it all.
Let me start with taxes.
As of this writing, the IRS has NOT made any declarations about extending the federal tax deadline. However, the AICPA (the American Institute of CPA’s), various Senators, etc. have been urging them to extend them for 90 days, and it is expected by many that this will occur. That would mean July 15th, 2020 is a likely, new (federal) tax deadline. This is a prognostication, not yet policy reality. I will communicate all the specific details of what this will mean, as soon as I have them. Each state will also have a decision to make on their individual tax deadline, but it is likely they will all follow the same general standard.
I expect that they will waive associated interest, and be generous in the abatement of penalties to those facing deadlines that have been affected.
We are continuing to work with Connecticut clients on their taxes, and we have various remote options for meeting with us, should you so desire. Email me back through the email button at the top of the page, and we’ll send those over.
Allow me to say this: with all of the cultural and economic chaos out there, I recommend that you allow us to be your guide through all of the changes and turmoil soon to come with your taxes.
This is NOT the time to rely upon harried, underpaid chat support for online tax software, or to try to “go it alone” and navigate contacting the IRS by yourself. This is, after all, what we do. As an established tax professional, we have dedicated support from the IRS, as well as many years of experience in handling these kinds of chaotic situations with various clients who have dealt with natural disasters, etc.
We are in your corner.
Now let’s talk about your financial mindset.
When this was a purely medical, cultural issue, this COVID-19 outbreak fell mostly under the category of “news”.
But now … well, we all probably know (at least) one person who is financially affected by this. We have clients who are, and maybe YOU are.
I will have more to say about this in subsequent weeks, but allow me to offer these quick points:
1) There is no benefit to marinating in others’ panic. I wrote this last week, but it is becoming more urgent. Don’t fall prey to the temptation that “you’ll get better news from social media” (Twitter, Facebook, etc.). Whatever practical gains you might get from “hearing about something first” online, you will LOSE in your spirit by allowing other people’s panicky blabbering to impact your mind. Above all else, guard your heart, for it is the wellspring of life.
I suggest you set aside time for “batch processing” of the news, and busy yourself with productivity in your other pursuits.
2) DO ensure that you and your family are financially and logistically prepared for what is to come. Don’t allow others to shame you for this preparation, as long as you are not hoarding unnecessarily or profiting from other people’s fear.
Once you have taken care of these most important things (your mind and your family), I suggest these practical steps on the financial front:
3) Consider refinancing your home, if you carry a mortgage. Mortgage rates are epically low.
4) Make sure you have some ready, liquid assets (i.e., cash in the bank, and in hand) if you are able.
5) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.
Many small businesses are getting decimated already, and anything you can do to maintain contracts, purchase services in advance, or otherwise help THEM (rather than big corporate brands who have MANY emergency funding options not available to small business owners) will be appreciated.
We here at Team Emelia Mensa CPA are standing strong in this thing, and ready to help. Not everyone is so lucky.
Lastly, I will say this:
The underlying realities of our economy are still strong. This situation WILL pass. It remains to be seen how long it will take.
But when we stick together (even if we have to do that over the internet 😉 ), we will get through this.
I’m grateful for your trust, and for your referrals for our tax work. We will still take on any of your friends that you’d like to send our way.
We’re in your corner.
Emelia Mensa EA, CPA
Emelia Mensa CPA