Category: Blog

Space Weather Forecasting, New Safety and Transparency Reporting Guidelines, Paying to Charge Federal Electric Vehicles, and a Plan to Celebrate Route 66

3 min read

s881, s2193, s2299, HR6078, HR4894, s1014PROSWIFT Act (S 881) – This Act was sponsored by Sen. Gary Peters (D-MI) on March 26, 2019. The legislation is designed to improve understanding and forecasting of weather events in space. The bill details provisions designed to improve the ability of the United States to both forecast and mitigate the effects of space weather. The bill designates the National Science and Technology Council’s Space Weather Operations, Research, and Mitigation Working Group as the authority to direct other agency initiatives. The bill establishes a pilot program to enable the National Oceanic and Atmospheric Administration (NOAA) to enter into contracts with the commercial sector to provide space weather data, in adherence to certain standards. The bill passed in the Senate in July and in the House in September, and is currently waiting to be enacted by the President.

CHARGE Act (S 2193) – This bill requires the General Services Administration to issue a charge card to federal agencies in order to pay for charging up federal electric motor vehicles at commercial charging stations. The bill was introduced by Sen. Gary Peters (D-MI) on July 19, 2019. It was passed in the Senate in November 2019 and in the House on Sept. 14, 2020. It is currently awaiting signature by the President.

PIPES Act of 2020 (S 2299) – This bill would amend title 49 of the United States Code to enhance the safety and reliability of pipeline transportation. It was introduced by Sen. Deb Fischer (R-NE) on July 25, 2019, passed in the Senate on Aug. 6, 2020. It is currently in the House for consideration. This bill would fund appropriations through the fiscal year 2023 to address pipeline safety and infrastructure as authorized under the Pipeline Safety Improvement Act of 2002.

Microloan Transparency and Accountability Act of 2020 (HR 6078) – Introduced by Rep. Tim Burchett (R-TN) on March 4, this legislation modifies disbursement and reporting protocols for certain financial assistance by the Small Business Administration (SBA). Specifically, the bill establishes a technical assistance grant of 5 percent for intermediaries who issue 25 percent of their loans to rural small businesses. The legislation also requires the SBA to report, among other metrics, the number, amount, and percentage of such loans that went into default in the previous year; the number of microloans issued to small businesses in rural areas; and the average size, rate of interest and amount of fees charged for each microloan. This bill passed in the House on Sept. 14 and is in the Senate for consideration.

Congressional Budget Justification Transparency Act of 2020 (HR 4894) – Rep. Mike Quigley (D-IL) introduced this legislation on Oct. 29, 2019. The bill would require the Office of Management and Budget to make many of the budget justification materials submitted to Congress also available to the public. The legislation passed in the House on Sept. 14 and is now in the Senate for consideration.

Route 66 Centennial Commission Act (S 1014) – This bill was introduced by Sen. Tammy Duckworth (D-IL) on April 3, 2019. It establishes a Route 66 Centennial Commission and specifies the duties of the commission, including membership, powers, reporting requirements, and a termination date of no later than June 30, 2027. The intent is to honor U.S. Route 66 on the occasion of its centennial anniversary in 2026. This bill passed in the Senate on Aug. 10 and goes to the House next for consideration. A similar bill (HR 66: Route 66 Centennial Commission Act) was introduced by Rep. Rodney Davis (R-IL) and passed in the House in February 2019, giving the current Senate bill a high probability of making it into law.

Long-Term Financial Impact of COVID-19

4 min read

Long-Term Financial Impact of COVID-19As bad as the economy is right now due to the COVID outbreak in the United States, many economists are predicting that the long-term outlook is much bleaker. Alas, Congress and the Federal Reserve’s efforts at stimulus and interest rate management have done much to keep the economy and stock market afloat. However, small businesses – the backbone of America’s employment growth – are closing every day. As consumer spending reduces further, the impact will likely affect Wall Street. Consequently, share prices may soon begin correcting to reflect the future more so than the present.

It should come as no surprise, then, that 88 percent of respondents admit they are worried about their finances, according to a recent survey conducted by the National Endowment for Financial Education.

This economic decline has presented an interesting mix of demographics who have or will be affected the most over the long term. For instance, many low-income workers have remained employed throughout the pandemic because their jobs are considered “essential services.” This includes check-out clerks at grocery stores; laborers who work outdoor jobs; nurses, orderlies, and nursing home attendants.

By contrast, many white-collar business owners – such as physicians and dentists– closed shop for a few months and/or have reduced the number of patients they see. Alas, 79 percent of those surveyed with a household income of more than $100,000 a year said they were at least somewhat concerned about their financial situation.

Millennials are the generation most likely to change the way they manage their finances in the future. Although many have remained employed in white-collar jobs – primarily due to their technology-enhanced skills and knowledge – they have reason to be concerned. After all, this generation has already lived through the market downturn following 9/11, the Great Recession, and now a historic economic decline caused by the coronavirus. In fact, once they finally got a foothold in their careers, this recent downturn obliterated the last five years’ worth of economic growth. Going forward, finance experts predict that these young adults will be more focused on stock-piling savings, buying modest homes when the real estate market corrects, and generally working on a long-term plan for financial stability.

While those strategies are mostly good, it’s a shame this generation had to learn the hard way – all while encumbered with historically unprecedented student loan debt. However, as these lessons are passed down through generations – much the way the Great Depression had a lasting impact on the Silent Generation – U.S. populations may see higher savings rates at the expense of lower GDP growth.

For households recovering from financial stress or looking to create a plan for stronger financial resiliency no matter what the future holds, consider the following strategies.

  • First priority: Save from three to six months’ worth of liquid, emergency funds should you encounter a large expense, such as an auto repair or a temporary loss of income.
  • Learn how to budget effectively, which includes examining if you overpay for basic household needs or do not know how much of your income is spent superfluously every month.
  • Take stock of the full scope of your financial resources, including:
    • Savings accounts
    • Investment accounts
    • Retirement accounts
    • Health savings accounts
    • College savings accounts
    • Whole life insurance
    • Real property
    • Structured settlements
    • Vehicles (auto, boat, motorcycle, recreational)
    • Art, jewelry, wine, or other high-value collectibles
    • Expensive furnishings and household items
  • Develop a Plan B to help supplement any income loss right now; a Plan C to help bolster your savings rate once you’re back to full income; and a Plan D strategy for income replacement in case you’re ever in a situation like this again.

Financial setbacks will come and go; it’s the lessons we learn from them that should have the most staying power.

Five Ways to Manage Back-to-School Stress

4 min read

Five Ways to Manage Back-to-School StressIf you’re anxious about sending your children back to school, you’re not alone. In fact, a recent poll from ABC News/Ipsos showed that 45 percent of parents don’t want their kids in the classroom at all. But whether your kids are in school or learning at home, there’s still plenty of worry to go around. How do you cope? Here are a few suggestions from a variety of counselors and mental health professionals that can help.

Express Your Feelings

Noticing the anxiety that’s going on inside is half the battle – then let it out. “I would encourage parents to share this feeling with their partners or other family and friends,” says Michael Consuelos, MD, a senior medical advisor with the mental health management platform NeuroFlow in Philadelphia. Simply releasing what you’re feeling can often take the power of it.

Teach Your Kids How to Navigate

This starts with talking to your kids about what social distancing is, what it looks like, and how to wash their hands thoroughly. Fran Walfish, PsyD, MFT, and a family and relationship psychotherapist in Beverly Hills, Calif., suggests making up real-life situations and getting your kids to “think in advance about what they would say or do to protect themselves while preserving a friendship.” For instance, a friend of your son stands too close to him and asks to borrow a ruler. How should he react? Or your daughter is eating lunch and a friend reaches in and takes a few chips from her Doritos bag. What should she do? You can probably come up with many other scenarios that help your kids figure out the best options for keeping safe.

Have Honest Conversations

Kathleen Rivera, MD, a psychiatrist who specializes in children and adolescents at Nuvance Health in Danbury, Conn., strongly suggests talking with your kids about the situation, no matter how young they are, and asking them how they’re feeling about the changes in their school environment. What things about school do you miss the most? How is this new learning set-up working for you? What are things you don’t miss about school? Claudia Kohner, Ph.D., a licensed psychologist and creator of IntroDUCKtion to Very, Very Big Feelings app, says that if you have very young children, give them some colored pencils and a coloring book. Sit down with them and help them create a homemade book that describes the changes in their school setting and reflects their feelings that go along with it. Encouraging imaginative play with dolls and stuffed animals is also a great way to help your kids express what they’re going through.

Practice Self-Care

In these uncertain times, it’s more important than ever to be kind to yourself – and not judge yourself for failing to cross everything off your to-do list. “You don’t have to do it all,” says Elizabeth Derickson, MSW, LCSW, RPT, a therapist with online therapy provider Talkspace. This is her No. 1 piece of advice for parents who are dealing with back-to-school anxiety. She suggests setting up realistic expectations and acknowledging that there will be both good days and bad days, and allowing yourself “to learn from the bad days, move on and rock those good days.”

Embrace Change

In a few months, the landscape of your life might look radically different than it does today. That’s why being able to adapt to whatever new circumstance presents itself is key. According to Dr. Rivera, “Flexibility is the most important thing in this whole process.” Knowing you have every right to reverse your decisions is OK – and empowering.

Despite the seemingly never-ending stream of worries that inevitably crop up in our new abnormal, remember: the most constant thing in life is change. Things will get better.

Sources

https://www.realsimple.com/health/mind-mood/stress/manage-back-to-school-stress-coronavirus

https://www.ipsos.com/sites/default/files/ct/news/documents/2020-06/topline-abc-coronavirus-wave-12.pdf

3 State Level Tax Hikes That Might Be Coming Due to COVID-19

3 min read

3 State Level Tax Hikes That Might Be Coming Due to COVID-19No surprise, but Americans are consuming and spending less since the coronavirus kicked in.  Retail sales dropped to 8.7 percent in March, the largest month-over-month decline since the Census Bureau started tracking this data. Previously, the sharpest decline was less than half this – at 3.9 percent from October 2008 to November 2008, during the previous economic crisis. The reduction in consumer spending is due in part to lockdowns, spending more time at home for fear of the virus, and the economic impact – whether it’s losing a job, reduced hours, or in anticipation of tougher times ahead.

While consumer spending is down at a net level, there appear to be some winners and some losers in the post-COVID world of staying in and working from home. Restaurants and apparel are the hardest hit, whereas online retailers, home, garden, grocery, and alcohol sales are all up.

The decline and shift in consumer spending are having a strong negative impact on state sales tax revenues. Nationwide, sales taxes account for approximately 20 percent of all state revenue, so the decline in consumer spending will have a material impact on state budgets. As a result, states are looking at new ways to generate or increase revenue to offset the trend. Below we’ll look at three ways states are looking to raise taxes to make up for holes in their budgets.

Grocery Staples 

Eating out less and working from home mean Americans are spending more at the grocery store; approximately 13 percent more year-over-year, per Census data. The issue for states is that groceries are generally not taxed or low-taxed, although there are a few items that apply the full tax rate.

Kansas, for example, applies the full sales tax rate to groceries. The consequence of this is that grocery sales make up about 15 percent of Kansas’ total sales tax revenue. The consequence of this policy is that the state’s sales tax revenue has barely taken a hit year-to-date.

States are taking notice and may move to the trend of taxing groceries as a way to recover part of their declining sales tax revenues.

Digital Taxes

Another trend is the increase in streaming services and one-time rentals/purchases of digital goods for entertainment and working at home. Currently, 22 states tax streaming services, and 30 states tax digital goods. Other states will look to start taxing these services as well, and digital taxes will start to expand into cloud storage and other services as more people work remotely.

Sin Taxes

Sin taxes are taxes on goods and services that are “bad” for us; think alcohol, tobacco, gambling, and marijuana (where it’s legal). Increases in sin taxes are generally easier to pass as they don’t apply to the overall general population and politicians can play the moral angle.

During the last recession, for example, lawmakers in more than 12 states increased tobacco and liquor taxes. Newer sin taxes are being instituted, such as those on vaping equipment and supplies.

Conclusion

The exact form and structure will vary, but one thing is certain: States will institute or increase taxes in areas where the money is being spent to ensure their sales tax revenue remains stable. 

How to Make the Most of Digital Marketing

4 min read

How to Make the Most of Digital MarketingDigital marketing is not a new phenomenon. However, new realities imposed by the COVID-19 pandemic have highlighted the importance of digital marketing for businesses. Basically, digital marketing revolves around using digital channels to advertise. Such channels include mobile devices, search engines, social media, websites, email, and others to help reach consumers. The purpose is to create a relationship with potential online customers to influence their buying decisions.

Why Digital Marketing

For starters, with digital marketing, you are able to personalize your marketing and target your ideal audience. It offers the ability to target an audience based on location, age, preference, and other specific details that define the intended consumer of your product or service. In the end, you don’t waste money on audiences that might not even buy your product or service.

With the availability of artificial intelligence, it’s easy to identify trends, carry out competitor research, and accumulate data that aid quick decision making. This kind of marketing is data-led. Considering that five to 10 hours of a person’s day is spent on the internet, this creates an opportunity to familiarize consumers with your brand and create relationships that lead to sales.

What’s more, chatbots are available on business websites or social media accounts to answer customer questions even when the business is closed. This means a customer visiting your page does not leave without some information that could help in their purchasing decision.

In addition to being able to expand your reach at a lower cost, your business can enhance brand loyalty by maintaining personal contact with clients even after making sales.

The best part of digital marketing is the ability to track the results of your marketing in real-time. 

How This Can Help Grow Your Business

First, digital marketing gives all businesses a fair share of the market. Today, a business can connect with customers cheaply over posts on social media.

What this means is that a business can instantly communicate with customers to inform them of their products or services and get instant feedback.       

Don’t ignore the fact that people today get information from the internet. A lot of purchase decisions start with an online search. A potential customer expects to find information regarding your products on a website, social media, or from reviews by other users.

Customers also want to determine if your business and products are a good fit for their needs.

In the event that they cannot locate your business, you will lose a potential client to a competitor.

A good online presence can help potential clients find you and possibly even become customers.

How to Get the Best of Digital Marketing

The good thing about digital marketing is that it will exist as long as people are using technology. The trick is to use strategies that help you stay ahead of the competition.

Digital marketing has been proven to be the best strategy to acquire new customers as well as maintain a relationship with existing customers.

One of the hard and fast rules about digital marketing is that no one strategy fits all businesses. Digital marketing is constantly changing – meaning that businesses have to make frequent changes to their strategies.

In order to stay ahead of the competition, you can take advantage of referral traffic as it gives credibility to your brand. This is possible by connecting with industry leaders in your niche.

You can’t afford to ignore analytics. Analytics help you discover what is working and what is not working.

Use high-quality content to draw the interest of potential customers. Sacrificing quality for volume can cost you potential leads.

Select social media platforms where your potential customers are likely to be. Understanding your target market will help you reduce the time and cost spent on digital marketing, as you will be able to follow your clients where they hang out.

Digital Marketing is the Way to Go

As long as the internet continues to grow, businesses have little choice but to get involved in digital marketing. Gone are the days when social media was considered merely a place to pass the time.

For some business owners, it might be challenging to know where and how to start, considering that digital marketing is quite an extensive field. The most important thing is to establish a goal for what you want to achieve. If not well done, it can cost your business a lot of unnecessary expense.

Three Strategies Companies Can Implement to Recover Faster

4 min read

Business COVID-19 Recover FasterSmall businesses nationwide were already facing cash problems before the COVID-19 pandemic, according to McKinsey & Company. The firm found that almost one-third of small businesses were either seeing losses or making just enough to stay in business, but not realizing profitability.

Looking at businesses selling essential and non-essential items, McKinsey & Company reports that before satisfying their “interest, taxes, depreciation and amortization” obligations and accountings, they were facing challenging times. When it comes to selling essential items, such as food, business owners in this industry only had margins of 5 percent. For businesses selling non-essential items, this sector saw margins of less than 10 percent.

Restaurants provide an example of one way that outfits can pivot and increase margins by modifying their business models. While the Harvard Business Review (HBR) explains that restaurants have created additional seating near the kitchen to maintain social distancing, other examples of business model changes include increasing takeout, delivery, and catering as a way to increase sales for businesses with limited in-store dining.

While these ideas are simply expanding upon existing models to make up for lost in-dining experiences, HBR offers another way that a restaurant can better distinguish its establishment: developing a subscription model for customers. By slimming down menu choices for more efficient and faster preparation, restaurants could give customers the option to receive a certain number of meals per week or day for a fixed price.

Increasing Margins

While there are different types of margins for business owners to keep an eye on, an important one is a gross margin and how it impacts a business’ bottom line. Since the onset of COVID-19, businesses have been trying to survive as we work our way through the pandemic.

Regardless of the type of product being sold, by reducing the number of options available to customers, businesses can increase their margins by still meeting customer demand for necessities while also getting better prices from their suppliers through larger orders. This strategy also can be applied with contract manufacturers.

Re-engineering products and the ingredients that go into them can help to increase margins. For example, if there is a variety of pre-packaged foods that sell for the same price, but there are specialty or costlier ingredients like meat instead of vegetables, pausing selling pre-packed meals with meat can increase profit margins.

McKinsey & Company explains that small businesses are able to increase their hygiene and safety protocols by encouraging and implementing contactless experiences. Along with reducing person-to-person contact by using mobile apps, restaurants also have made delivery and takeout a bigger part of their sales.

With small businesses like boutiques and farmers, HBR illustrates how these entities can explore different sales channels. With stores facing shortages and an inability to stock essential goods –  especially food items – small farmers saw an opportunity to reinvent their business models after restaurants and gourmet markets dropped purchases from them during the stay-at-home orders.

An investment in an online presence, shipping and logistics, and sustained sales and marketing efforts have real potential for businesses to become profitable as trends point to a direct-to-consumer model. However, going with a digital storefront such as Shopify and selling directly to retail customers, HBR pointed out that some farmers are able to capture local customers (15 miles or less). This shows how farmers have been able to migrate from one source of revenue to another.

While the pandemic is ongoing, these are just a few ways that companies can implement new strategies to generate cash flow and attempt to survive the COVID-19 pandemic. 

Sources

https://www.mckinsey.com/industries/public-and-social-sector/our-insights/us-small-business-recovery-after-the-covid-19-crisis

https://hbr.org/2020/07/how-businesses-have-successfully-pivoted-during-the-pandemic

Laws to Enhance Benefits for Service Members, First Responders, Veterans and to Restore National Parks and Public Lands

4 min read

Laws to Enhance Benefits for Service Members, First Responders, Veterans and to Restore National Parks and Public LandsA bill to amend the Servicemembers Civil Relief Act to extend lease protections for servicemembers under stop movement orders in response to a local, national, or global emergency, and for other purposes (S 3637) – This bill extends the Servicemembers Civil Relief Act to protect service members who were previously issued orders to change duty stations but had those orders rescinded because of the pandemic. A stop movement order may leave them with a housing and/or car lease in two different locations. This extension allows families who are unable to relocate due to pandemic-related travel restrictions to be released without penalty from their leases. It is retroactive to March 1, 2020. The bill was introduced by Sen. Jon Tester (D-MT) on May 6. It was passed by the Senate in June, the House in July, and was signed by the President on Aug. 14.

Safeguarding America’s First Responders Act of 2020 (S 3607) – This bill was introduced by Sen. Chuck Grassley (R-IA) on May 5. The bill extends death and disability benefits under the Public Safety Officers’ Benefits Program (PSOB) to public safety officers (e.g., law enforcement officers) and survivors of public safety officers who die or become injured as a result of COVID-19. The bill classifies COVID-19 or related complications suffered by a public safety officer as a personal injury sustained in the line of duty. The Act was passed in the Senate in May and in the House in July. It was signed into law on Aug. 14.

Veteran Treatment Court Coordination Act of 2019 (HR 886) – Introduced by Rep. Charlie Christ (D-FL) on Jan. 30, 2019, this legislation directs the Department of Justice to establish a Veterans Treatment Court Program to provide grants and technical assistance for state, local and tribal governments to develop and maintain veterans’ treatment courts. Treatment courts are designed to assist justice-involved vets with treatment needs such as substance abuse, mental health, and other issues unique to active service. The Act was enacted after being signed by the President on Aug. 8.

Ryan Kules and Paul Benne Specially Adaptive Housing Improvement Act of 2019 (HR 3504) – This bill is designed to amend Title 38 of the United States Code that provides for improvements to the specially adapted housing and educational assistance programs of the Department of Veterans Affairs. It is designed to help eligible disabled veterans purchase adaptive homes or upgrade existing homes to meet their specific needs for daily living activities. The bill was introduced by Rep. Gus Bilirakis (R-FL) on June 26, 2019. It was passed in the House in July 2019; in the Senate in March 2020, and was signed into law by the President on Aug. 8.

Great American Outdoors Act (HR 1957) – This Act was initially sponsored by Rep. John Lewis (D-GA) on March 28, 2019. This legislation establishes the National Parks and Public Land Legacy Restoration Fund, which is designed to support deferred maintenance projects on federal lands for fiscal years 2021 to 2025. The bill makes funding for the Land and Water Conservation Fund permanent and allocates money equal to 50 percent of energy development revenues from oil, gas, coal, or alternative or renewable energy development on federal lands and waters. The bill establishes reporting procedures for all associated projects and mandates that deposited amounts must not exceed $1.9 billion for any fiscal year. The bill was signed into law by the President on Aug. 4.

Commission on the Social Status of Black Men and Boys Act (S 2163) – Sen. Marco Rubio (R-FL) introduced this legislation on July 18, 2019. It is designed to establish a Commission on the Social Status of Black Men and Boys within the U.S. Commission on Civil Rights Office to conduct a systematic study of the conditions affecting black men and boys. The Act was passed by the Senate in June, the House in July, and was signed into law by the President on Aug. 14.

Tips for Retiring in the Next 10 Years

4 min read

Tips for Retiring in the Next 10 YearsThe stock market continues to perform with relative resilience, despite the current economic decline. But to be clear, without 100 percent participation in the economy – in terms of small business job creation, consumer spending, and company growth and expansion – the stock market is apt to reposition prices to reflect slower growth. With no containment or control of the pandemic on the horizon, there is plenty of uncertainty associated with future financial planning.

Anyone looking to retire in the next 10 years or so may want to take a fresh look at their current retirement income plan. In fact, they might need a Plan A, B, and C in order to stay flexible – with C being the option to continue working longer. The following are portfolio tips to consider for a 10-year time frame until retirement.

Emergency Fund

If there was one financial tip worth following pre-pandemic, it was to have liquid cash savings of six months to a year’s worth of expenses available. Workers who did are probably pretty relieved about now if they lost their job or had hours reduced. Having substantial cash available can save you from raiding retirement accounts and/or your investment portfolio.

In preparation for retirement, that cash buffer is even more important. Some advisors recommend a liquid savings fund to cover one to three years’ worth of expenses. That’s because once you’re on a fixed income, you’re not likely to replenish that account. What it can do is supplement variable retirement income that is reliant on the markets. Having a cash buffer gives investments time to recover from temporary losses so you don’t have to plunder your principal.

Status of Social Security

While you may know what your benefit level is for retirement at a certain date, be aware that your benefit could change – even after you’ve retired. Recent research has found that thanks to the loss of FICA revenues resulting from COVID-19, the Social Security Trust Fund might run out of money four years earlier than predicted: as early as 2032. You may want to consider other forms of reliable income in case your benefits are reduced in the future.

Guaranteed Income

Speaking of reliable income, Olivia Mitchell, executive director of the Wharton School’s Pension Research Council, recommends that an annuity option become a staple in employer-sponsored retirement plans. Annuities generally offer an option for issuer-guaranteed income for life. With 10 years until retirement, allocating money to an annuity can help build a separate income stream to supplement Social Security benefits. Even if your employer doesn’t offer an annuity option in your 401(k) plan, you can purchase one separately using other assets.

Employer-Sponsored Retirement Plans

Speaking of the 401(k), consider that when this plan was first established in 1980, the marginal federal income tax rate was 43 percent. Today’s tax rates are historically quite low, so for the time being you might want to consider allocating more savings into a Roth IRA. This means you’ll pay taxes on that money at today’s low rates, but going forward it can grow tax-deferred and be withdrawn tax-free. But don’t leave money on the table if your employer offers a matching 401(k) contribution. Roth IRA contributions are limited to $7,000 (2020) and some deferred income can help reduce your taxes today – so plan accordingly.

Roth Conversion

By the same token, you may want to take advantage of today’s lower tax rates by converting at least some traditional IRA funds to a Roth or by making backdoor Roth IRA contributions. Be aware, however, that you must pay taxes on converted funds, so consider a gradual transition over multiple years to help you stay in a lower tax bracket.

Investor Portfolio

Some market analysts are predicting a “new normal” going forward, which could provide some interesting investment opportunities. Ideas include new operating business models based on a largely remote workforce, population spread as people move out of cities into more affordable rural areas, and innovations borne out of newly created demand. While a buy-and-hold strategy is a common advice for equities, it’s important to stay flexible. As long as you remain within your customized asset allocation strategy, you might want to use your equity portion to explore new ideas that could offer higher return opportunities over the next decade.

Help for People Struggling to Pay Bills

3 min read

Help for People Struggling to Pay Bills Covid-19The impact of COVID-19 has caused many Americans to suffer hardships, one of which is struggling to make ends meet. But take heart; there are solutions. Here are a few areas in which creditors are working with people to alleviate some of the stress.

Mortgages

Fortunately, the Coronavirus Aid, Relief, and Economic Security Act, allows for mortgage forbearance, which if you’re financially compromised because of COVID-19, you can temporarily suspend payments. Also, the Federal Housing Finance Agency is allowing mortgage servicers to permit homeowners to delay payments if the notes are backed federally or by a Government Sponsored Enterprise, which includes Fannie Mae or Freddie Mac, FHA, VA or USDA. If you don’t know who services your loan, you can check Mortgage Electronic Registration Systems. If your mortgage isn’t federally backed, ask your lender about your options. If you need more help, contact a Housing and Urban Development approved housing counselor or local legal aid organizations.

Rent

The good news here! The CARES Act also includes a 120-day moratorium on evictions if you rent from a landlord who has a federally backed mortgage. If your landlord doesn’t fall into this category, contact them immediately. If you have any assets to sell, that’s an option. Hop on eBay or Craig’s List. If you have a 401(k), the IRS allows you to make an early hardship withdrawal. When all else fails, contact Just Shelter, an organization that advocates for affordable housing.

Student Loans

More good news! The Department of Education is granting students a payment waiver for at least 60 days with zero percent interest. But you have to do some legwork; it’s not automatic. Call your loan servicers to make sure your loan is eligible. This exception doesn’t apply to private student loans. However, Sallie Mae, one large private lender, said it’s offering suspension of payment for up to three months. Get in touch as soon as possible with whoever holds your loan to start the conversation.

Utility Bills

Some utility providers are refraining from cutting off services for nonpayment, which is a relief. Also, quite a few Internet companies like AT&T and Charter Communications have agreed not to end service for residential or small-business customers who can’t pay their bills. To find out the details and policies from your providers, check their website, or call.

Credit Cards

Major credit card issuers are offering relief to customers who’ve been affected by COVID-19. American Express, for example, is providing assistance through its financial hardship program. But beware of scammers who send out fake emails from said creditors about the virus; they’re trying to steal your personal and financial information and/or infect your computer with malware. If you have doubts about any communication you receive from your financial institution, email, or call. Don’t take any chances.

Right now, life might feel overwhelming. But know this: we’re all in this together. And the upside is that many companies are stepping up to lend a hand.

Sources

https://www.cnn.com/2020/04/16/success/cant-pay-rent-bills-help-coronavirus/index.html

https://www.nytimes.com/interactive/2020/world/coronavirus-tips-advice.html#money

https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/mortgage-relief/

R&D Tax Credits May be Part of the Next Tax Relief Bill

3 min read

R&D Tax Credits, Next Tax Relief BillAs the economic impact of COVID-19 lingers and an impending second wave is on everyone’s mind, Congress is already thinking of new legislation to stimulate the economy. One of the ideas on the top of the list is an expansion of the Research and Development (R&D) tax credit as part of the next COVID-19 relief bill.

Proposals for the R&D Tax Credit

There are numerous proposals for changing the R&D tax credits. It is seen as an investment in the U.S. economy, with some believing the credit is an effective tool to combat offshoring. Some of the main proposals for changes to the R&D tax credit include:

  • Doubling the current credit
  • Giving businesses the ability to immediately use the credit instead of having carryforward credits
  • Expanding the credit for domestic manufacturing
  • Increasing the refundable amount for startups

Will My Business Qualify?

The best candidates for R&D tax credit are companies that operate in the following spaces: manufacturing, architecture, engineering, construction, software, life sciences, and medical devices. The key determinate is whether your company makes or improves something; this will give you the best chance to qualify.

Contractors

There is a misconception that if your business is hired or contracted to perform work for other organizations that you cannot qualify for the R&D tax credit. This is not necessarily true; contractors (especially government contractors) can qualify if they have both economic risk and retain substantial rights as contractors.

Startups

The R&D tax credit is refundable in part (against employer payroll tax) for startups. The idea is to expand the refundability so that the credit can be offset against more than just payroll taxes and even perhaps to make it refundable (to some degree) in general. The idea here is that startups won’t be forced to carryforward credits for years and can then reinvest the cash flow to accelerate growth and job creation.

Internal Use Software

Internal use software is software that companies develop themselves. It can be stand-alone software or modifications to existing systems through substantial improvements, the development of add-ons or modules – the idea is to expand the space of what qualifies for the credit for internal-use software. This would allow companies that traditionally wouldn’t have qualified (such as financial institutions, banks, and retail stores) to now potentially be eligible.

Conclusion

This next relief package is likely to be considered prior to the summer congressional recess. Many analysts believe the bill will focus on provisions that help businesses hire back laid-off workers, retain current employees, and grow over the long-term. It’s likely the R&D tax credit will play a key role in the latter objective.