Don't Mess With Taxes

Who hasn't felt this way at work from time to time? This year, after COVID-forced reassessment of their jobs, millions decided to quit. (Photo by Andrea Piacquadio from Pexels)

The COVID-19 pandemic has changed a lot of things, including workplaces.

Where offices stayed open or reopened, there are the coronavirus precautions, such as work station spacing and staff masking.

Other offices are allowing or requiring their staff to work remotely. Hello home offices (that, sorry, likely aren't tax deductible) and Zoom glitches.

COVID also gave us the worst-case scenario for too many workers. Reduced consumer demand meant some businesses needed fewer employees, so they cut their staff permanently.

Then there are the workers who, after reflection during the pandemic, decided it was time to leave their jobs.

The Great Resignation: When millions quit their jobs earlier this year when the pandemic receded a bit, the trend was dubbed the Great Resignation.

U.S. Bureau of Labor Statistics data show from February through June, almost 14.6 million workers tendered their resignations.

And it appears it will continue. Several surveys this year report that anywhere from 20-to-50 percent of employees are looking for new jobs or are planning to quit once the pandemic is behind us.

Entrepreneurial opportunities: Why are so many making the decision to dump the 9-to-5 (or whatever the shift) lifestyle? Lots of reasons.

For many, the pandemic prompted the them to reevaluate their priorities, both life and work. Others say their job expectations have changed.

And some took the COVID-prompted work changes as a sign it was time to finally take the entrepreneurial leap.

Another survey, this one by Digital.com, a Seattle-based review site focused on small businesses, found that of the respondents who had quit their jobs in the last six months, 32 percent said they had done so to start their own businesses.

Of those who resigned, 62 percent said their top motivation was to be their own boss.

Tax tips for new bosses: On this Labor Day 2021, here's a hearty salute to all workers. I know I speak for a lot of people in saying we appreciate everyone out there, especially in these continuing COVID conditions, who are still doing their best at often difficult jobs.

But on this September Monday, I'm lifting my frosty mug a tad higher to the newly-minted self-employed bosses. It takes a lot of courage to make such a change.

And since this is a tax blog, here are some prior posts with tax tips for those newly self-employed workers and new bosses:

• Make sure you start your business intending to turn a profit
• 4 tax tips for new businesses
• 4 tax matters that matter for the self-employed
• Tax tips for the self-employed small business owner
• The scoop on paying estimated taxes
• Payroll taxes: who pays, how much and how if self-employed
• Paying self-employment taxes on the revised Schedule SE
• Celebrate Labor Day by ensuring your payroll withholding is right
• 5 things to consider if you're thinking about becoming an independent contractor
• Employee or contractor? The IRS has some guidelines on when each work status applies
• Work from home pros, cons and home office tax tip
• IRS offers an easier way to deduct your home office
• Homeowner's insurance is sort of tax deductible in some home office instances
• Be sure to claim applicable household utility costs in your home office deduction
• Deducting business meals & other expenses on Schedule C
• How ordinary & necessary expenses become tax deductions
• Small businesses' many tax considerations, including entity choices
• The importance of good, and separate, business records

Yeah, that's a lot of links. There are a lot of issues, tax and otherwise, involved in running your own business, even a sole proprietorship. So don't enter into the process without preparing.

But it can be worthwhile, financially and personally. So again, a Labor Day toast to those stepping out into the business world on their own.

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