A Review of Q3, 2020
Coming to Terms with a “New Normal”
2020 has been a year to remember. Industries have adapted to changing consumer habits, markets have fluctuated, and people have spent countless hours on Zoom (ZM). Over the next week, we’ll break down important events that took place during each quarter of the year. Today, we’re taking a look at Q3 of 2020.
During the first two quarters of the year the world reeled as a pandemic and a global recession unfolded. The third quarter of the year was a time of coming to terms with a “new normal” of face masks, outdoor dining, and social distancing. In June a number of cities and states relaxed lockdown measures as COVID-19 cases ticked downward. Then cases began to climb again, and many reopening plans were put on hold.
Mergers, Acquisitions, and IPOs
Despite struggles with COVID-19 rates across the country, there was a surge in IPOs as well as mergers and acquisitions. Snowflake (SNOW), the cloud-based data warehousing company, and Palantir (PLTR), the data analytics company were two important names making their public debuts in the third quarter. The IPO frenzy then continued through Q4.
There was also a flurry of M&A activity. Typically M&A activity accelerates after a period of economic contraction,, but the spike last quarter was far higher than what was seen after the 2008 financial crisis and other periods of downturn. Companies were wary of volatility leading up to the presidential election in November and concerned about higher capital gains taxes under a Biden presidency, so many were rushing to ink deals ahead of November 3. These M&A deals included Verizon’s (VZ) acquisition of the Mexican phone company Tracfone for $6.25 billion, and Gilead Science’s (GILD) purchase of Immunomedics for $21 billion.
A Back-to-School Season for the History Books
Q3 of 2020 will also be remembered for an unprecedented back-to-school season. When schools across the country shuttered in March to curb the spread of COVID-19, many expected to be back in classrooms by the fall. HBut by the end of the summer, many educational institutions from grade schools to universities decided to continue with remote learning for the fall semester. Others used a hybrid model of some in-person learning and some online learning, while others returned to school equipped with face masks and hand sanitizer.
This unusual school year has had a significant impact on the lives of working parents, college town economies, and the long-term future of students. One study showed that the lost learning time as a result of the pandemic could cost the US economy $14 trillion and $28 trillion in the long run. Despite a myriad of challenges, millions of teachers, students, and parents stepped up and made the best of a strange and challenging situation.
Tax Season 2021: A Guide to Understanding Your Taxes
Whether your goal is to lower your taxes or just file them in time, the key is preparation. Get answers to your tax questions related to investing, retirement, loans, and more, plus access resources directly from the IRS to help you file your taxes.
Preparing for an Unconventional Tax Season
Staying Ahead of a Tax Bill Surprise
2020 might go down in history as the year of canceled and changed plans, but it is almost over and 2021 is within sight. Kicking off 2021 with a few simple money management plans is a great way to turn over a new leaf, or build on previous saving successes. This week in our newsletter we’ll be bringing you a series of easy money-management tips to help get your year off to a good start. Today we’re focusing on how to be prepared for tax season, especially if you have been working remotely from a new state during the pandemic.
Though millions have relocated while working remotely this year, according to a recent survey, 70% of Americans are unaware that telecommuting from another state can impact a worker’s state tax returns. There are a few easy steps to take now in order to avoid an unpleasant surprise when Tax Day arrives.
Tracking Remote Work Locations
An easy first step to prepare for what could be a bizarre tax season is thinking back on the year and recording how much time you have spent in various states. State taxes can be different for those who are considered residents of a state. Whether or not you qualify as a resident depends on how many days you spend in a state.
It’s important to make sure you accurately report where you have been working and that information on your W-2 from your employer matches information that you submit to the IRS. Tax returns are signed under penalty of perjury, so be sure the information you report is accurate.
Each state has slightly different criteria for designating who is a taxable resident. Some states have put special rules in place because of the pandemic. Certain states, especially those that share a border, have agreements with one another to prevent double taxation. There may also be other forms of credits to prevent double taxation. Getting a jump start on researching these rules could save you significant money come tax season.
Seeking Help from Employers and Tax Professionals
Talking to your employer about taxes sooner rather than later is also a good idea. If your employer assigns you to an existing office in a different state, it can be easier to avoid paying double taxes. For example, if an employee was based in New York before the pandemic and then relocated to Florida, her company could adjust her W-2 to say she was reassigned to a Florida office. This is not deceitful if the employee really was working in Florida, and it can be a way to avoid paying taxes in two states.
Especially if you are dealing with a complicated tax situation this year, seeking professional help with your taxes is a good way to ensure you have not overlooked anything. It could also help you save money and avoid paying taxes in multiple states unnecessarily.