Interest rates have cooled somewhat, but still startling high compared to a year ago. In June of this year, inflation rates soared to 9% whereas now it vacillates between 6 and 7% in Washington State, with a national average of 6.3%. This is almost twice as high as it was a year ago when interest rates ranged between 3.25-4%.

While Washington State doesn’t offer any rebates (yet), below are some of the states that offer some tax credits.

Middle Class Tax Rebates

Many states are making sure their middle-class is taken care of especially with Maine, Colorado, and California.

In Maine, individuals will be getting a rebate of $850 ($1700 for couples) while Colorado is offering a tax rebate from $750-$1500 depending on your filing status. New Mexico is also providing a rebate for all their taxpayers ($500/$1000).

Meanwhile California created California’s Middle Class Tax Refund. This refund’s average payout has been $544, but some are receiving over $1000. Most of the those who qualify should have already received their checks, so if you have not received one, double-check to make sure you qualify.

Housing-Related Rebates

Several states are offering rebates based on individuals’ housing status. For instance, homeowners in New Jersey (making below $150K) will receive a $1500 rebate on their property taxes; renters will receive $450. While homeowners making above $150K will receive $1000.

Similarly, New York homeowners are receiving property tax rebates up to $1050.

State-Specific Taxpayer Refunds

These refunds tend to be for smaller amounts, but no less helpful. For instance, Georgia and Hawaii both announced refunds to residents’ former tax filings. Due to delays with the 2020 tax returns, Georgia wound up with a surplus and is submitting refunds of $250-500 depending on residents’ filing status. Hawaii is doing something similar with those who filed their 2021 returns before the end of 2022.

South Carolina and Virigina are also offering a one-time rebate for taxpayers. South Carolina offering up to $800 for anyone who filed their 2021 taxes before October 17 and Virgina offering $250-500 for people who filed before November 1 of this year.

Oregon, Delaware and Indiana are all issuing a one-time Automatic Taxpayer refund for $600, $300-600, and 2 payments totaling $325 respectively. Both Oregon and Indiana will be depositing these in taxpayers’ bank accounts.

Percentage of Income Rebate

These are especially interesting, but both Idaho and Massachusetts are providing credits based on a percentage of the taxpayer’s income. For Massachusetts, residents will receive a refund equal to 14% of their personal income tax liability; Idaho is offering 12% or $75 for every taxpayer and dependent — which sounds like income tax square in Hasbro’s Monopoly.

To be clear, what this means is, let’s say (in Idaho) your have the sole income $50,000/year with no spouse and 2 kids. In Idaho, the average tax rate is 13.23%, but for the sake of making the analogy cleaner, let’s say you paid $2500 to the state. 12% of the amount you paid would net you a rebate of $300. Meanwhile, the flat rate for each family member would net you a rebate of $225. Idaho wants you to choose the greater amount, so be sure to do so!

Photo by Robert L. on Unsplash

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For example, many have noticed a net decrease in their overall budget, with more expenses toward groceries. While many initially saw this as a natural consequence of COVID — since restaurants shut down and people shopped for groceries more — it’s not simply a change in routine, but costs are rising.

COVID’s impact on the economy is being felt in almost all industries. And the COVID related inflation has many projecting a loss or net zero gain in 2022. Of course, if you have lofty financial goals or eager to pay down debt, this can be a wrench in your plan.

The automobile industry and inflation

If you already own a car, then chances are when the pandemic hit, you likely saw a higher ROI on your car. Whether you were working from home (therefore buying gas less) or if you were one of the few who had to commute still, you likely noticed a substantial absence of traffic from everyone working from home.

Car dealerships initially saw an increase in profits with many premium & luxury cars being purchased. However, if you’ve been keeping track (or been eyeing a new vehicle), you’ll notice they seem pricier. It’s not just a feeling. From September 2020 to September 2021, new vehicles’ price has risen 12.1%.

A big reason for this is the low inventory. The vehicles themselves aren’t the issue, but there’s a chip shortage — a massive deficit of these processors.

Additionally, used cars aren’t faring any better. Many “entry-level” or “first-time-buyer” cars have seen a decrease. In 2020 and 2021, this was no doubt due to schools and jobs being shutdown. However, because of the low inventory of new cars, old car prices have been escalating as well, leading many to not purchase a car at all.

The housing industry and the pandemic

Housing is one of the industries that has seen high ups and downs during this global pandemic. Many people relied on AirBnb for supplemental (or even their main) income. Travel and all purchases therein, was one of the areas that was hit hard by COVID. However, housing, in general has started to see a spike.

With an indefinite work from home order in place, many are realizing they don’t need to “live” near their job. If someone previously had a 90 minute commute, they’ve now reclaimed 3 hours of their daily life back. For those with particularly egregious commutes, this is largely seen as a blessing and a “dealbreaker” if companies demand they return.

Realizing they can work anywhere, many landlords and renters realize they can charge more since “location” to downtown is no longer the selling point it once was. Now the dressing, and middle-of-nowhere spaciousness is a perk.

Emergency funds for emergency funds

When COVID hit, many were laid off or furloughed. It wasn’t uncommon for every member of the household to need a new job. Depending on the expertise, some had a harder time than others. People working in retail, food, entertainment, etc. As a result, many took jobs wherever they could which doesn’t bode well for inflation.

This resulted in a many dipping into their emergency funds and the realization that said funds won’t last as long as they hoped. Due to the increase in expenses across myriad industries: food, fuel, and rent. You might be among the 66% of Americans looking at 2022 and hoping you break even.

In the meantime, if you’re eligible, make sure you collect or reach out to the IRS about your fourth stimulus check and make sure you budget to prevent going deep(er) into debt.

Stick to a rigid budget, don’t eat out, and cancel any memberships you may be holding on to.

Image by Gerd Altmann

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You’ll need to meet some requirements to qualify for the $1,400 stimulus check in addition to your tax refund. The new stimulus check is for parents who had a child born during 2021 or those who have a new dependent. 

This is because the 2021 Economic Impact Payments were based on 2020 and 2019 tax returns. This didn’t include dependents added in 2021. Since the impacts of COVID have continued throughout 2021, a fourth round of checks is due. This is part of the American Rescue Plan, which aims to help families with children.

If you fall into this category you may receive the check before December 31st, 2021. If you’re eligible but don’t receive the check, you’ll need to apply for the Recovery Rebate Credit. You can apply when you file your 2021 taxes. If eligible, you’ll receive the money along with your tax return.

Is the fourth stimulus check available in every state?

Every state will be issued a budget by the federal government to cover the distribution of the checks. Each State Administration will be in charge of deciding how to spend the funds they receive. That means different benefits may be available from state to state.

There are a few other requirements you should be aware of before applying for the Recovery Rebate Credit. The dependent you are trying to receive funds for must be under the age of 19 at the end of the year. Exceptions to this include students over the age of 19 or individuals who are permanently disabled. 

Additionally, the dependent must be your child (including foster children, step children, and half-siblings are included), or a descendent of anyone falling into those categories. Examples of individuals who qualify as descendants include grandchildren, nieces, and nephews. 

There are also a few income requirements that affect eligibility. If you’re filing as single you will need to make under $75,000 whereas if you’re filing as married or joint, you must make under $150,000. 

If you fit all of these requirements, make sure to apply for the Recovery Rebate Credit when filing your 2021 taxes.

Photo by Firmbee.com 

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1. Deliveries and Takeout

Businesses like restaurants were forced to shut down because of social distancing. It soon became illegal for people being crowded in the same room due to how quickly the virus spread (and how little we knew about it). Of course, even those that wanted to uphold a mask policy and no contact service, early on still needed to comply with the law and under no circumstances were able to open up for dine in service.

On the other hand, people also needed to eat. Therefore, many restaurants that had never offered delivery or takeout before pivoted to provide takeout and deliveries. Customers would place an order they would send someone to deliver the food. Compromising the dine in component and shifting to delivery/take-out helped numerous restaurants stay afloat… what’s more, even with less restrictions many are continuing the contact-less service.

2. Having Fewer People Inside

As mentioned before, social distancing was one of the COVID-19 restrictions. Therefore, retail businesses and grocery stores had to develop new rules to keep their businesses moving. This actually cut down on window shoppers and encouraged people to call ahead to ensure what they wanted was in stock.

While retail was growing before the pandemic hit, COVID pushed more people online, increasing sales by a monumental amount.

3. Selling Trending Items

One of the methods to get your business booming is being creative with the situation. Some companies changed what they were selling to what will be needed in the market. For instance, costume companies started selling actual clothes since they couldn’t count on birthdays or “in-person” events.

Additionally, since schools closed, uniform companies started making masks and protective gloves, so they could maintain income.

4. The Use of Online

Technology has always found a way to create a solution no matter the situation. Therefore, businesses continued their operations online. Schools started teaching online, software companies started offering video calling, etc.

Other businesses started selling their products online using social media platforms while service-based companies started selling remote products (such as AirBnB offering cooking classes). Additionally, movie studios have largely fast-tracked streaming services to ensure they can still recoup some expenses — Disney+‘s simultaneous releases as an example. Transforming your business to suit the modern world is what helps numerous companies survive the pandemic.

In Conclusion

To say the coronavirus upended the economy is an understatement. Those that couldn’t adapt quickly enough — or were operating at-cost — have been forced to shut down. As this pandemic continues, more and more businesses will adapt or start out of this crisis. Moreover, with vaccines becoming more effective, the future looks less grim and more hopeful.

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Using the executive memo, the Federal government was able supply an additional amount of $300 extra per week to unemployed persons for six weeks. While some states were called upon to provide another $100, the order became optional due to the limitations of the state budgets. As some states have already received their supply, the six weeks is finished.

The Federal Emergency Management Agency approved for 48 states as well as Washington D.C and Guam to pay out money for six weeks. Arizona was the first state to send the $300 payment to the unemployed, and Nevada, on September 2, applied for assistance and is awaiting approval. So far, 16 states have depleted their supply of money and are awaiting a government response regarding an adjustment in payments.

The states that have not yet been given their supply will get it, and it will be paid in weekly deposits or a lump sum.

Will there be more money coming?

The negotiation of another stimulus bill will once again be on the agenda once an agreement is made. According to the Washington Post, discussions are happening in the White House for actions to be taken.

What are the new benefits?

Most states make payments of approximately $300 to $600 per week to unemployed persons. One state that was able to give the extra $100 was West Virginia.

Eligibility

While it would be suitable for everyone who lost their jobs to get more unemployment money, unfortunately, that is not the case; not everyone who is getting paid now will be getting payments. On August 11, the US Department of Labor sent out the requirements for being eligible to get a second payment set. Claimants will now have to be eligible to get the $100 from unemployment benefits from the state. This will mean, however, that approximately 1 million persons will be dropped off the list.

The HEALS Act

The GOP proposed giving people $200 per week instead of $600; the money can last longer. After which the amount would increase in September 2020 and add to the state’s unemployment benefit, approximately 70% of each person’s salary would increase. However, the proposal has only been introduced to the Senate. The Democrats are now in dialogue with the GOP on the layout of the plan. If this process gets approval, it will take approximately two to four weeks for the payments to be sent to the state and then to the beneficiaries.

Enhanced unemployment

You are deemed eligible for unemployment benefits if you lost your job in your state. Once you are approved, you will be granted all benefit that applies to you. Some states provide up to 50% of a person’s wage/salary, but each state decides who is eligible and how much money you will get.

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How are people saving more?

Americans are saving more money now than before the pandemic for two main reasons:

1. An increase in income from government aid and
2. a decrease in spending from business closures and safety concerns.

Government aid through programs such as unemployment benefits and stimulus checks paid directly into citizens’ bank accounts mean that many people now have more money in their accounts than they did before the COVID-19 outbreak.

The second main reason accounting for increased savings is that their spending has decreased – more than half of Americans have reported such a decrease. For health and safety reasons, some are choosing to abstain from travel and restaurant dining, which frees up a substantial portion of disposable income for those individuals.

People are keeping more money than ever in their bank accounts to help themselves feel more financially secure during this time. Unfortunately, that reluctance to spend could have adverse effects on the recovery of the economy since a consumerist economy necessitates spending from the public.

Why are people saving more?

That’s how people are able to save more money than usual during the pandemic, but why are they doing so?

Some experts attribute the desire to save more during these times to the uncertainty of the strength of the economy in the future. While Americans may have more money in their pockets now because of decreased spending and increased aid from the government, people are not confident that additional income will persist in the future. Something that people have learned during the pandemic is just how quickly circumstances can change; now more than ever, you can have your job one day and be laid off the next.

Around 25% of Americans have struggled to make at least one payment because of coronavirus, whether that is a credit card payment or payment for rent or a mortgage. That struggle can largely be attributed to losses in household income. Some examples of a loss in household income include being laid off, being scheduled for fewer hours than usual, or even being forced to take unpaid time off.

With their increased savings, people have either been keeping that money in their bank accounts, or taking the opportunity to pay down any debts that they were previously holding on to. About one-third of people who have decreased their spending have been able to pay down their debts faster than they would have otherwise been able to, and over half of people who are now spending less because of coronavirus are able to keep more money in their savings accounts.

While the coronavirus pandemic has indubitably had many negative impacts for many industries and individual families, the increase in savings for many Americans is an unexpected, but welcome, silver lining.

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One of the segments hit the hardest by the pandemic is rental property owners, who are currently grappling with a sudden loss in income. Whether you own a housing unit or a short-term rental, you might have also had firsthand experience with this phenomenon by now.

Why Rental Property Owners?
It may not be surprising, but due to the set of events triggered by COVID-19, long-term or vacation rental operations are against some unprecedented set of challenges.

It’s because of a variety of reasons. With the U.S. facing its highest unemployment rate of 14.7 percent in April, an overall reluctance in spending, and massive restrictions on travel, rental properties don’t have much of a “market” right now.

And this is only looking at the rental property owners, how their renters have been impacted add additional difficulties. While some are reducing rent, others cannot afford to; and many renters’ business sectors may have been adversely impacted by the pandemic, making it difficult to pay rent.

Meanwhile, even people seeking a vacation are self-quarantined. While states have reopened and the unemployment rate has started to go down, the current rise in COVID-19 cases doesn’t paint a promising picture for the future.

This has a direct impact on your rental housing unit, Airbnb, or Vrbo, where renters are either struggling to make payments or don’t have the same level of comfort to stay at vacation homes as they did before the pandemic.

As a result, while owners of housing units are currently facing the tough choice between rent relief and evictions, Airbnb owners are making contingency plans on what to do with a property that people don’t want to share with others on a frequent basis. If you fall in either of those categories, you may also be able to identify with the struggles they are going through.

Government is Passing Extensions on Foreclosure and Evictions

If you own mortgaged properties and rent them on a long-term or short-term basis, foreclosure adds yet another level of difficulty to the mix. After all, if you aren’t able to generate regular income through your renters, how else are you supposed to pull funds together for the mortgage payment?

Fortunately, the federal moratorium on foreclosures and evictions has been extended for another two months, with the new expiration date set for August 31, 2020. But since it provides limited coverage against a certain set of properties, government officials are working on additional measures to extend this protection.

On June 29, the U.S. House of Representatives passed a relief bill that would extend foreclosure and eviction moratorium for a year. To cover properties that aren’t protected under the moratorium, the bill also includes $75 billion for homeowners and $100 billion for renters to fulfill their housing and utility costs.

In addition to that, certain states such as Florida are also individually extending foreclosure and eviction moratorium. This gives some homeowners relief from their mortgage payments for the time being, but it still doesn’t solve the larger problem of covering for the loss of income.

For homeowners who depend on rent payments to generate regular revenue, this also creates problems in meeting essential expenses such as utility costs and property taxes. Failure to meet these costs directly affects local governments, and that could have a larger impact on a federal level.

While another stimulus bill seems to be in the works, it remains unclear what its current timeline might be or exactly what it may contain for those who depend on rental income to survive themselves. For now, all eyes are on the government to pass legislation that doesn’t only stop foreclosures, but also covers for loss of income for homeowners to help them through this time of need.

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Increased Interest in Accounting Services

With the pandemic, the primary concern is health, but given the precautions set forth (social distancing), the secondary concern is typically money. In only two to three months, many business owners have lost tens of thousands of dollars in potential profits. Working-class professionals have been furloughed or let go altogether. Even industries that haven’t collapsed have lost suppliers or clients due to these conditions. All of these people need accountants, not just for taxes this year, but to figure out how to manage their finances given the change in the worldwide landscape.

Business owners and managers already use accountants to manage their daily, monthly and annual finances. During a nationwide health crisis, they will lose customers and profits and could lose money on major expenses that may have been the result of the impeccable — and unpredictable — bad timing. Fortunately, many accountants offer business coaching and can adapt to provide projections to help set you up for success; telling you where you can cut costs and where you need to.

Move to Virtual Platforms

More accountants are moving to online or virtual platforms to communicate with their old clients and find new ones. During this crisis, millions of people have been forced to stay at home and do most of their work from home. Of course, this doesn’t impact accounting as most professionals work from home or out of a shared office. As a result, many accounting firms are closing their offices for good and making the transition to online indefinitely.

Emphasis on Accounting Technology

As accountants start working online, their industry will place a greater emphasis on accounting software and equipment. More accountants will buy and benefit from using software to get their work done faster and more effectively. Using paper forms to fill out invoices, receipts, bank statements and other documents is an activity of the past. Nowadays, every accounting document, along with templates, that ever existed is found online.

With so much talk about business and money, and who’s losing so much of it, financial experts are needed more than ever during this coronavirus pandemic. In addition to business consultants and lawyers, accountants are the first types of people that business owners will contact regularly for advice. Today’s accountants must learn to adapt to the new, significant changes that are affecting their methods of work.

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Fortunately, there are plnety of things you can do to find out what’s going on.

First, it’s important to figure out if you’re eligible (most people are, but it’s the first thing to check to ensure you’re entitled to your relief check). You’re eligible you’ve filed your taxes in the last year and if any of the following apply to you:

• You’re the parent of a child less than 16 years old.
• You file as the head of a household and earn less than $146,500.
• You file jointly without children and earn less than $198,000.
• You’re single and have an adjusted gross income of $99,000 or less.

With that in mind, there are some common reasons why you may have not received your check yet. For instance, if you owe child support, then the expense will be deducted or reduced completely. If you don’t fit that category, consider your own actions. While the government has mailed millions of checks, if you’ve entered your bank account information, then it may have inadvertently delayed your check as it’ll be deposited directly. Two things to keep in mind with that however is, 1) if you misentered your bank account information or 2) if you’ve entered it on a scam site. In either case, retrace your steps to get it corrected ASAP.

Some people may just need to file additional paperwork to receive their check. In those cases, you just need to provide the IRS with the necessary information so you can receive your check.

To know where your check currently is, you can also check out the IRS Get My Payment website in order to see where in the process your check may be. This website can give you relatively detailed information on what the potential problem is and what your next steps may be.

If your check status claims it was delivered, it’s entirely possible you accidentally threw away the check or debit card which contained your payment. Many people did so, assuming, wrongly, that the check or debit card was actually a scam, fake, or solicitation.

If all else fails, try calling your local Congressional office. Every Congressperson and Senator has constituent service staff whose job is to help people with programs related to the federal government.

It is important to note that many of these offices are still operating remotely as a result of the Coronavirus, and they have likely been overwhelmed with questions about the status of the stimulus payment. However, reaching out to these offices may help you find an answer to this important question.

The point is this: If you didn’t receive your check, you have options to follow up. Indeed, personal effort and attention may be required, but make sure you connect with authorities in order to find out where your money is.

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Many people are already starting to make predictions about how these unprecedented changes and experiences will continue to shape the future of the United States even after the fight with the direct threat of the virus passes. The National Bureau of Economic Research conducted a new study that revealed around 37% of positions in the US could be performed at home.

NBER reports that the 37% statistic accounts for roughly 46% of all of the country’s wages. It seems that higher-paying roles such as those in the professional services and financial industries could be performed at home, while lower-paying positions such as those in the restaurant, hotel, agriculture, or retail spaces wouldn’t have that flexible option.

It’s estimated that 5% of people currently work from home. The projection is that this number will double following the coronavirus crisis. The report continues to suggest that this predicted change would have major effects on leisure time, consumer behavior, and technology requirements. Namely, more people wouldn’t have to commute, we might see more people shopping online, and companies would have to provide their employees with more software and hardware to successfully work from home.

The NBER study mentions 5 metropolitan areas that are the most suited for making this transition:

• San Francisco
• Austin
• Durham-Chapel Hill
• Washington D.C.
• and San Jose are at the top of the list.

Almost half of the total number of jobs in all of these cities are in industries such as insurance, finance, science, and education. These industries are ones that can feasibly be performed from home. Fort Myers, Stockton, Bakersfield, Lancaster, and Grand Rapids make up the flipside of that statistic. These cities aren’t well-poised to make the same transition since lower than 30% of jobs could be done remotely. Construction, retail, warehousing, and transportation are among the most popular industries in these cities.

Increasing Numbers

Over the past 3 weeks, 16.7 million people filed for unemployment benefits. The Labor Department released these staggering numbers to the public recently. Multiple records have been set regarding the economic fallout that is occurring throughout the country as a result of the measures being taken to help curb the effects of the novel coronavirus.

Important Background

While the pandemic continues to close businesses deemed “non-essential”, create turmoil in stock markets, and monger an overall sense of chaos in nearly every facet of life, businesses have started laying off (or furloughing) employees left and right. Most recently, the XFL, which is owned by Vince McMahon, decided to cancel the season in March. It suspended all operations and laid off every single employee.

What to Keep An Eye Out For

The response to the coronavirus pandemic might cost 47 million jobs in this quarter alone, according to predictions set forth by the Federal Reserve Bank of St. Louis. This would bring the total unemployment rate of the United States to an astonishing and historical 32.1%. For comparison, the unemployment rate during the Great Depression was only 24.9%. Of course, this is only a projection and with so much uncertainty, it can change as scientists continue to learn more about this virus and billions of dollars are being poured into research surrounding treatment and a vaccine.

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