We in West Tennessee, being mostly a rural community, by and large did not experience the same ongoing shutdown methods imposed in other parts of the country. It doesn’t mean that we were not affected, but it does seem that overall our local economy has fared well in the short run.
The future, though, still remains to be seen. However, there is one important question many business owners are asking.
HOW AM I GOING TO SURVIVE AS THE PANDEMIC SHUTDOWNS CONTINUE?
The answer depends on the type of business you are in. It’s hard to tell a salon to go virtual. Virtual does not replace face-to-face, and many of our small business clients have been hurt. Many are working with thin margins already and the PPP and other stimulus packages will only take them so far.
A recent Gallup poll found that 62 percent of employees worked from home during this COVID-19 crisis. This is double the pre-pandemic levels. And though the pandemic may not last forever, remote work will be here to stay.
WHAT TO KNOW WHEN YOU HAVE EMPLOYEES WORKING FROM HOME
So what are some things to keep in mind as the localities all over start to open up—but remote workers stay home?
- Ramp up your security measures. There are nefarious players in the world. They (or their web bots) are constantly snooping, so ensuring your customer and employee data is secure is vital. Having remote workers gaining entry into your company information system from an offsite location is a risk that must be mitigated. Even in the so called ‘cloud’ economy, many small businesses still house their data locally.
- Taxes. If you’re an employee, you need to coordinate with your employer. The tax deduction for unreimbursed employee expenses is a thing of the past. So be sure to clarify with your employer what constitutes a reimbursable expense and what may be new under a remote work arrangement. We are finding that internet, cell phone, snacks, and supplies are becoming more commonly reimbursed or partially reimbursed.
If you are self-employed and working from home, be sure your home office is set up properly. In other words, your bedroom never qualifies, but a small area in another room might. The home office deduction allows you to deduct as business expense a prorata share of utilities, insurance, real estate taxes, mortgage interest, etc. as business expenses. However, keep in mind, the area must be for business exclusive use.
If you have questions about these or other topics related to working from home, don’t hesitate to reach out. We are experts on these topics and can help ensure your tax and business safety.