The Child Tax Credit is one of those, er, gifts that keep on giving. This is not a complete surprise as it was a novel idea distributed in a new way, so there were bound to be questions. There were also bound to be many who would just let the money enter their accounts every month without having thought about it, so I am sure we will have to discuss this again when tax filing begins next year. So maybe this is just part of the continuing questions.

In this month’s distributions, there was a snafu at the IRS that resulted in a number of people not getting their direct deposit of the credit this month. Look at one number – that less than 15% of families receiving this payment were affected – and it doesn’t seem too bad. Look at another number – that makes up more than 4 million families – and it feels like a lot of people are having to deal with this.

For more information on this mishap and more background about the credit, you can read this article from Forbes.

More and more of what is being written about this credit, though, seems to be on the warning end of things. I suppose this is inevitable in a way because this is not like the series of three stimulus payments that went out over the pandemic. That really was largely ‘free money’ that the government sent you. This prepayment of the credit – although a larger credit this year than it was in the past – will involve a reconciliation when it comes time to file your taxes for 2021.

And this could become an issue for some people. Let’s say you are making more money this year than you did in 2020 (a not unheard-of occurrence), you may be receiving a credit that you do not actually qualify for. Or maybe you are receiving credit money for a dependent who is going to cross the age-eligibility line before the end of the year.

You can read about some of these potential issues and more in this other article.

With this increased attention to the credit, I think it is important to restate here that you do not need to receive the prepayments of the credit. You must get an online account on the IRS’s website to start this process but doing so isn’t THAT difficult. And it can definitely be worth the time if it is going to keep you from paying hundreds (or potentially a couple thousand) dollars back to the government come tax filing time. Or if you need to update some information with the agency to ensure you are getting these payments because you need them now, you can do that there, too.

If after the first couple of months of payments, you still have questions, that’s okay! Feel free to set up an appointment with us and we can help you figure out where your personal situation sits.

Warmly,

Josh Bousquet
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Earlier, I wrote about how planning for businesses was difficult during the pandemic. It is tough to look toward the future when even day-to-day planning seemed so much in flux. Now that things are evening out, it is important to get that planning going again. This can be difficult for many, though, because of how topsy-turvy the COVID times left everything.

A way to get a handle on things is to break down the time periods in which you are going to handle them. This can be most difficult for people who are visionaries and like to imagine where things can be way down the road. These people do not have a flawed vision, it just needs to be placed in the proper context. Big dreams tend to be closer to 10-year dreams.

Their very label tells you that 10-year dreams cannot be accomplished overnight. So other markers need to be placed along the way that can be easier to aim toward, say some three-year or five-year goals, that can still serve as big milestones along the way.

We are still nowhere close to overnight, though, but I bet most business owners can provide some top-of-mind answers when it comes to tasks they would like to have accomplished at the end of one year. Now we’re getting to periods of time that one’s mind can grasp more easily.

But alas, there are reasons new year’s resolutions may be best known for their failure rate. It is really difficult to do something for an entire year. So let’s move the goalposts in even closer and set quarterly goals.

What we can do in 90 days is now a time period onto which we can really clamp. That feels close enough that you can then set plans for weekly accomplishments that will get you appreciably closer to them. Knock the weekly goals down and the quarterly ones are pulled closer.  Then set new weekly goals that pull them even closer. Once they are accomplished, set new quarterly goals and watch the further-out objectives get ever closer.

As the annual goals get closer, they start to move into the earlier categories, until maybe you could close them next quarter. This is all about steady progress and remaining accountable to the goals you set. And as always, if there is any way that we can help you get there, we are only too happy to help and bring those faraway big ideas closer to reality.
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Warmly,

Josh Bousquet
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Have you noticed how much of a whirlwind things have been since March of last year? Oh, I guess it wasn’t just me.

That whirlwind has seemed to affect a lot of what I share in this space. It often felt much more difficult to write about looking toward the future as we were forced to react to things in the tax and financial realms as they occurred. The changes came quickly. It was a day-to-day process much of the time, sometimes week-to-week, but rarely did we feel we could afford the luxury of looking month-to-month, never mind getting to longer time periods.

Now as things start to (and hopefully continue) to even out, I believe it is a good time to start taking that longer view. Before we do that, however, first give yourself congratulations. If you are running a business that has survived the stormy COVID seas and can now look to the future, you deserve to take credit for it.

Unless you are in super rare air, though, you did not emerge completely unscathed without any moments of wondering if there would be a future. Now that those times don’t weigh as heavy, it is time to take stock in them.

Were there things you could have done before 2020 that would have left you better prepared to get through that year? Now is the time to not just with they had happened, it is the time to put plans in place so that they happen before the next crisis. Fixing past mistakes can be part of your future vision.

Even though there were lessons to be learned through that experience, though, that does not mean that you should stop looking forward. So also start looking to the future now that there should be fewer speed bumps on that path. Will it take some work to get to where you were at the beginning of last year? That’s okay, the falling back from that level wasn’t your fault.

That type of movement can feel disheartening because you feel like you are fighting from behind. It is not always as thrilling to get to a place you have already been in the past. That previous high point can start to feel like a ceiling, a barrier that keeps you contained. And if you have already experienced what seems like the high point, and it wasn’t THAT great, it is tough to push toward it and impossible to look beyond it.

You must look beyond it, though, and the key to that is timing your goals. But more on that later …

​Warmly,

Josh Bousquet
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You may have heard over the past few years about how slow the IRS can be - and we can only confirm that this is true. And although I can’t be too overly optimistic that things are about to get better, the agency is at least making a concerted effort to improve. Part of this push involves making more services and information available online.

I can appreciate the thinking that bringing more of your tax information online feels dangerous and opens you up to having that information stolen. If you are taking good common-sense measures to ensure that your computer usage and internet browsing is safe, however, there is no reason to think this is going to be any worse than making banking transactions or credit card purchases.

So as the IRS starts to let you do more online, this could be a good time to get an online account with the agency. It is not the simplest sign-up you will ever do online (it even says it is fast while then saying it will take about 15 minutes) but doing it now before you have a reason to will feel easier than waiting until you have the weight of need also weighing on you.

Consider this then our slight push to urge you to do this, along with some pointers of what to expect and/or do during the process.

First, you can start the process by clicking through to this website and selecting ‘create or view your account.’  To begin the sign-up, you will need your full name, email, birthdate, social security or individual tax identification number, tax filing status, and current address.

Second, though, comes the first bit where this does start to feel like a bigger process than you expected. To verify your identity, the IRS is going to ask for the last eight digits of a Visa, Mastercard, or Discover credit card, OR student loan account number, OR mortgage or home equity loan account number, OR home equity line of credit account number, OR auto loan account number. You can use this along with receiving a text message to verify your identity.

Once you have that information, the steps become a little more familiar, even if more numerous than usual. You will enter much of this information and then need to confirm access codes sent both to your email and your phone. From there, you will pick username and password information, and then ta-da, you have established your IRS online account.

The fact that I am even writing a blog about these steps tip off that this may not be the smoothest process. It is not THAT difficult, however, and can be worth going through to give you increased access to information and ability to determine where you stand with the tax agency. 

Warmly,

Josh Bousquet
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