With vaccinations on the way up and some pandemic-related restrictions on the way down, many of us are thinking about how we’d like to get away for a week—or more.
Before Covid, one in five employees whose job responsibilities could be handled remotely said they worked from home all or most of the time. At the end of 2020, 71% were doing their jobs from home all or most of the time. And, according to a Pew Research Center survey, more than half say that, given a choice, they would want to keep working remotely even after the pandemic.
But what would that look like? It’s a question that goes beyond home offices and beach umbrellas. Tax professionals are increasingly being asked “What if?” when it comes to tax considerations related to working from home or even further away. This week, we look at what you need to know to answer some of those travel and moving-related questions.
Quick Numbers Trivia
Each year, U-Haul ranks the 50 States by migration growth (calculated by the net gain of one-way U-Haul trucks entering a state versus leaving that state in a calendar year). This year’s top three saw two familiar faces: Texas was ranked #2 for the second year in a row, while Florida dropped from the top spot to #3. What state took over at #1, jumping a whopping 11 positions from #12?
From moving abroad to tax-favored locations, here’s what tax professionals are talking about:
If you’re dreaming about house-hunting in Tuscany or finding a grand apartment in Paris, you’re not alone. More than nine million American ex-pats are living abroad, according to the State Department. Ex-pat tax advisor Virginia La Torre Jeker, J.D. walks through some U.S. tax issues to keep in mind when making a more permanent relocation overseas. Read: An Eye for Moving Abroad? Bye-Bye USA, Hello Tax Complications!
La Torre Jeker also talked about the difficulties of moving abroad, including the tax requirements and cultural hurdles facing ex-pats, on a recent episode of the Taxgirl podcast. Listen: The Tax Hurdles Of Moving Abroad
While you may be dreaming of the benefits of palm trees or sidewalk cafes, entrepreneurs and business owners may be honing in on tax-favored locations. The IRS has released data from Form 8975, Country-by-Country Report (CbCR) filed by 1,641 U.S. corporations. It’s a complete guide to where multinationals book profits and pay taxes. Glenn DeSouza of Dentons analyzes this treasure trove of information. Read: IRS Releases Country-by-Country Filings: Insights on Tax Havens, Effective Tax Rate
Even if you’re not ready to make a permanent move, you may be contemplating a short-term jaunt—if you haven’t already. In a “normal” year, Americans take 2.29 billion domestic trips and 93 million international trips. During the pandemic, many tax professionals learned to enjoy working remotely—but also grew to understand the need for accounting firms to upgrade their technology, writes Delauno Hinson of Templafy. Read: Accounting Firms: Three Reasons It’s Time for You to Enhance Your Tech Stack
If you’re staying inside U.S. borders, chances are you will be using planes, trains, and automobiles to get where you’re going—and that means reliance on airports, roads, and railways. President Biden released a “Made in America Tax Plan” as part of his infrastructure plan. Richard Husseini and Jon Feldhammer of Baker Botts outline both the enforcement and incentive proposals and provide key takeaways. Read: Biden’s Sweeping Tax Proposals: What to Watch, Who Will be Targeted
Bloomberg Tax also tackled the tax considerations in Biden’s infrastructure plan in a recent episode of the Talking Tax podcast. Listen: Dissecting Biden’s Infrastructure Plan Tax Hikes (Podcast)
Maybe you’re just considering a day trip on some of the four million miles of U.S. public roads? Tax credits and incentives (C&I), including state incentives for renewable energy and electric vehicles and the Diesel Emissions Reduction Act, are changing the way we travel. C&I represents the best partnership between private and public entities inside the democratic boundaries of capitalism, says Laurence Sotsky, CEO of Incentify.Read: It’s Complicated: Why C&I and Complexity Are a Good Thing for the Environment
It’s not just you: Travel-related companies are anxious to see things get back to normal. Travel spending totaled just $679 billion in 2020, a 42% decline from 2019. Included in those billions were businesses that relied on stimulus funds to stay afloat. The Paycheck Protection Program (PPP) was one of the favorite provisions in last spring’s CARES Act while the Employee Retention Tax Credit (ERTC) was largely ignored because employers could only claim it if they didn’t take a PPP loan. Now that’s not the case, and Alisha Jernack of Mazars explains how businesses can take advantage of both programs.Read: Stacking Paycheck Protection Program and Employee Retention Credit
But, things are getting better. The Paycheck Protection Program (PPP) is becoming easier to access. Thomas Cole of Smolin Lupin highlights the latest developments, which include the possibility of extended deadlines and fewer restrictions. Read: Favorable New PPP Rules for Proprietors
While a trip can be good for the soul, you don’t need a change of scenery to exercise self-care. An associate at Kirkland & Ellis tells how she fought through multiple strokes followed by another health crisis to graduate from law school, pass the bar, and begin her career. Brittany Scheier says the experience taught her to care more for her physical and mental well-being, and she shares lessons for lawyers and law firms on how to do the same.Read: How A Serious Health Crisis Helped Me Reboot My Life
Student Writing Competition
Think you have the “write” stuff for Bloomberg Tax Insights? We’re excited about the debut of our inaugural Bloomberg Tax Insights writing competition, intended to highlight the very best of student writing on timely tax policy issues. Read: Introducing Our Tax Insights Student Writing Competition
Write for Us
April is flying by… so what’s on our Bloomberg Tax Insights wish list for May? Nonprofit pieces with a tax or accounting focus. That includes best practices for nonprofits and Form 990 updates. We’re also looking for smart takes on charitable giving incentives, donor-advised funds, donor privacy issues, and estate and gift planning techniques. And, of course, we’re interested in charity and government-related concepts like unrelated business income taxes (UBIT) and payments in lieu of tax (PILOT).
Bloomberg Tax Insights articles are written by tax professionals offering expert analysis on current issues in tax practice and policy, tax trends and topics, and tax and accounting firm practice and management. If you have an interesting, never-published article for publication, we’d love to hear about it. You can contact our Insights team by emailing TaxInsights@bloombergindustry.com.
Exclusive Content for Bloomberg Tax Subscribers
From U.S. tax to tax issues abroad, 2021 is moving along at a rapid pace. Our Tax Outlook 2021 is a critical first look at the forces shaping key issues in tax and accounting so you can be ready for anything. Topics include actions in the states on enabling e-commerce taxation; what’s next for Europe’s tax agenda; how Covid-19 relief measures could trigger tax filing mistakes; cases to watch at the Supreme Court; and the tax consequences of a remote workforce.
*Note: Your Bloomberg Tax login will be required to read Tax Outlook 2021.
Quick Numbers Answer
Tennessee posted the largest net gain of U-Haul trucks crossing its borders in 2020, making it #1 for the first time.
More Great Tax Content
This is a weekend roundup of Bloomberg Tax Insights, written by practitioners and featuring expert analysis on current issues in tax practice and policy. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and Financial Accounting.
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