CPA Rachel Daddesio recently discussed how making charitable contributions during the pandemic can affect your finances.
The COVID-19 pandemic has drastically affected the finances of individuals and businesses. These major changes have made Certified Public Accountants, like CPA Rachel Daddesio, some of the best resources for ensuring your finances are stable and understanding important tax information. Rachel Daddesio recently explained how charitable contributions, and the deductions individuals can make, have changed due to the coronavirus pandemic.
“Many citizens are unaware that the CARES Act, signed into law just a few months ago, made some major changes to the rules regarding cash contributions to public charities and individuals,” Rachel Daddesio said.
Rachel Daddesio explained that the Coronavirus Aid, Relief, and Economic Security (CARES) Act allows individuals who claim a standard deduction can write-off their donations up to a total of $300. Individuals who itemize charitable contributions on their tax returns were formerly limited to deducting cash donations up to 60 percent of their adjusted gross income. That limit is now 100 percent, due to the CARES Act.
However, Rachel Daddesio explained this increase does not apply to donations to donor advised funds or private foundations. She added that the limit on deducting donations of food inventory has now been increased from 15 percent of net income to 25 percent of net income.
“The IRS has yet to inform the public how these changes will be implemented in terms of filing tax returns,” Rachel Daddesio said. “However, as CPAs, we will be among the first to know.”
Rachel Daddesio described donations to C corporations are now deductible up to 25 percent of taxable income as opposed to the former 10 percent. Another major benefit of the CARES Act is that contributions by individuals that exceed this year’s limitations can be used for up to five years. Rachel Daddesio added that charitable donations to individuals, no matter the circumstances, can not be deducted when filing tax returns.
“In the accounting industry, we are urging citizens to consult with qualified CPAs when submitting their income taxes for the year 2020,” Rachel Daddesio said. “There have been so many tax changes due to the coronavirus pandemic, and those who file on their own will likely be missing out on some major deductions and credits.”
The public can locate more information about new deductions for charitable contributions in the online IRS Publication 926. However, as Rachel Daddesio stated, this document does not include information about tax law changes for the year 2020. That information will have to be acquired from the IRS or a qualified CPA at a later date.
Rachel Daddesio is a financial expert with years of experience handling challenging situations. And few issues have brought her more worries than the Covid-19 pandemic crisis. She sees many accountants making mistakes or not taking the proper steps that they must during this time. As a result, she recently discussed the ways that an accountant can avoid issues during the pandemic.
The Problems Rachel Daddesio Sees With Accounting During Covid-19
As the Covid-19 pandemic spreads, Rachel Daddesio is watching the economic world changes with great fear. The economic slowdown has already started and may get worse as time passes. And the accounting world will be significantly impacted in many ways. For example, Rachel Daddesio sees a degrading of non-financial aspects that could make accounting more of a challenge.
These aspects include elements such as a company’s reputation and the goodwill fostered between them, the public, and everyone else involved with the business. These changes could be adverse, Rachel Daddesio argues because accountants may find it hard to track these elements in a pandemic – when so much is uncertain, the changes are likely to be catastrophic in their impact.
However, Rachel Daddesio believes that accountants are going to struggle to calculate risks, gauge deferred tax assets, and measure the inventories of companies that may be having a hard time selling. All of these changes are things that Rachel Daddesio believes accountants must prepare for soon. And if not, they run the risk of more long-lasting issues that may affect their business and their career.
Approaches That May Help | Rachel Daddesio
Although Rachel Daddesio is concerned about the changes that Covid-19 has brought to the business and accounting worlds, she also believes that they can be managed in several ways. For example, she is a great believer in timely reporting – during the pandemic, these reports may have to occur weekly to give companies a better understanding of what to expect from their changes.
Though preparing these weekly reports can be a challenge, Rachel Daddesio believes that they give accountants a better understanding of what their clients need. Beyond these factors, Rachel Daddesio also argues that risk assessment must be increased and expanded to ensure that companies don’t take unnecessary risks. For example, significant expansions of a brand may not be wise in uncertain times. Rachel Daddesio argues that it is up to an accountant to understand these factors and help their clients make smart decisions.
She also explains for higher internal control of accounting during this crisis – this step helps to centralize this type of financial service and ensures that it goes smoothly and efficiently. And Rachel Daddesio also believes that uncertain economic relief packages should be considered “bonuses” in a financial situation, rather than key to success, as they may never come in spite of many promises.
Many People are Learning About “Holes” in Their Coverage Due to Pandemic, Rachel Daddesio Warns
Businesses need to have insurance for financial protection. They depend on the coverage to take care of problems as they happen. Rachel Daddesio, a Certified Public Accountant warns that many commercial insurance projects aren’t getting the job done.
Within the pandemic, business owners are having to learn the hard way that their insurance policies didn’t cover everything. The verbiage of “pandemic” isn’t included in most policies. It’s leaving businesses vulnerable to issues caused by the COVID-19 pandemic, Rachel Daddesio explains.
One of the issues that Rachel Daddesio has seen is not being able to use their business interruption service because of the pandemic. When countless businesses closed across Texas because of not being defined as “essential,” they turned to their insurance. Unfortunately, “pandemic” wasn’t listed as an acceptable means of closing.
Another issue of the pandemic is employers experiencing more unemployment claims than is typical. The businesses had no choice but to close. However, the insurance rates are going to go up because of the large number of claims, Rachel Daddesio explains. With an increase in rates, it can affect the overall budget and financial stability that a business has. Since no one wants to pay more in premiums, it’s critical to also look at comparing rates from multiple insurance companies.
As an accountant, Rachel Daddesio is dedicated to helping the business owners obtain a stable financial status. She works to keep their books organized and their finances on track. Part of this includes talking to them about the vulnerability of their business with insurance policies.
Unfortunately, no one planned for a pandemic. Further, many insurance policies are not built with sufficient coverage in such an instance because it is not common. As such, Rachel Daddesio is working with companies to look at how they need to redefine their insurance needs now and post-pandemic.
There are several ways that businesses can better prepare themselves in the future. Rachel Daddesio explores various riders that can be added to commercial policies. Further, an umbrella policy can provide more protection over all of the policies that a business already has in place. She believes it’s all a matter of reading the fine print to learn about vulnerabilities.
Rachel Daddesio discusses the importance of working with an accountant. She finds that many businesses try to take a DIY approach until they run into major financial problems. By waiting until things are a mess, the business owners make it that much harder on themselves. She recommends that businesses begin working with an accountant from the moment they go into business as a way of learning how to protect themselves against financial downfall. She can build budgets, help with bookkeeping, and explore insurance products that can offer a greater level of financial protection, even through a pandemic.
To say COVID-19 has thrown the world for a loop is an understatement, and CPA Rachel Daddesio is here to help taxpayers understand the changes that the government has instituted in tax policy due to the coronavirus pandemic. She understands that many taxpayers are struggling financially, and it can be tough to figure out the right moves when it comes to paying your taxes.
While the tax filing deadline has passed, it was pushed back by three months. The standard tax deadline in the United States is April 15th, and it was moved to July 15th. This change in deadline applied to both tax filing and tax payments. CPA Rachel Daddesio advises clients to pay their taxes as soon as possible, if they have not already done so.
Rachel Daddesio recognizes that many people are struggling financially right now, and may be having a hard time paying their taxes. Even if you can’t pay the entire tax amount that you owe, it’s key to make payments. If you owe federal taxes, Rachel Daddesio recommends making a payment plan with the IRS. If you can pay your taxes in 120 days or less, the IRS offers low interest rates and no additional fees. If you need more time to pay your taxes, Rachel Daddesio recommends setting up a monthly payment plan with the IRS. While you still may have to pay penalties (as well as have a higher interest rate than if you payed within 120 days), you’ll be less likely to deal with wage garnishment or other negative consequences of not paying your taxes on time. If you owe state taxes, you’ll need to check with your state revenue system to find out if they offer payment plans.
Rachel Daddesio also recommends thinking forward to how you’ll pay your 2020 taxes, and meeting with a CPA now if you’re worried about how much money you’ll need to set aside. In these unpredictable times, Rachel Daddesio recommends erring on the side of caution when it comes to setting aside money to pay your taxes, especially if you own your own business. It’s tough to tell which business will stall and which will thrive as the pandemic continues, and it’s better to put away too much money than to not have enough when tax time rolls around.
If you’re a business owner, Rachel Daddesio recommends paying estimated quarterly taxes, rather than waiting until April of 2021 to find out what you owe. Rachel Daddesio says that taking this proactive approach can protect you from needing to set up a long-term payment plan that will result in you paying high interest rates in the future.
CPA Rachel Daddesio of Montgomery is passionate about helping women in business. She knows how tough it can be to get a start-up off the ground, and she’s offering her top tips to women who are looking to create a business they can build over time.
Rachel Daddesio of Montgomery recommends that women who are interested in starting a business check out the many grants available. Grants.gov offers several grants (money that does not have to be paid back) to people who want to start their own business. Rachel Daddesio recommends checking back for grants regularly, as the opportunities change quickly. Even if you’re not sure whether you’re completely qualified for a grant, Rachel Daddesio of Montgomery recommends applying anyway. Often, companies and charitable organizations give grant money to the most qualified applicant, even if they don’t check all of the boxes.
It’s also important to get the education you need to understand the law as it relates to your business. Rachel Daddesio of Montgomery recommends checking your local resources to find opportunities to meet with legal counsel. Many cities offer clinics with free legal advice for small business owners.
Rachel Daddesio of Montgomery also recommends finding a group of like-minded female entrepreneurs to support you as you grow your business. It can be tough being a woman starting a business, and it’s key that you have support from other people who are in the same boat. Rachel Daddesio of Montgomery encourages you to congregate with both people who are in similar lines of work and those who are not, as you can all learn from and support one another.
Creating a workspace is also important, according to Rachel Daddesio of Montgomery, even if you’re currently just working from your computer or tablet. Not only is this good for you to get in the right headspace when it’s time to work, but according to Rachel Daddesio of Montgomery, having a home office can also be a great tax write off. If you’re doing the work and putting in the long hours, you deserve to get all the benefits that come with having your own space.
Rachel Daddesio of Montgomery also recommends taking some time each day to work on yourself, rather than on your business. Entrepreneurship is hard, and it’s key that you take the time you need to de-stress at the end of each day. In between applying for grants, finding your workspace, meeting with lawyers, and diving into learning more about your line of work, be sure to remember that you’re working to better your life, not work yourself into the ground. It’s ok to take a step back and enjoy the fruits of your hard work.
Internal Corruption is Often Caught with Internal Audits, Identifies Rachel Daddesio
Opportunity is one of the most common reasons for internal corruption and fraud. When people feel as though they can get away with it, they will. Internal audits can be used to red flag the issues before it becomes too devastating for the company. Rachel Daddesio, CPA, explains why companies should be scheduling audits on a regular basis.
Rachel Daddesio recommends that a company schedule an internal audit at least twice a year. Larger companies may want to schedule more frequently in order to catch issues quickly. The audits should be conducted by a consultant as opposed to an employee. This ensures that issues are actually caught as opposed to being ignored.
Awareness and prevention help with deterring fraud and corruption. Rachel Daddesio explains that many people won’t commit fraud for the company they work for, especially if they know that internal audits are scheduled randomly.
Often, the red flags that appear in everyday operations are ignored. They’re passed off as administrative errors. Rachel Daddesio explains that people are often able to get away with corrupt activities because their co-workers assume the best of them. They cannot conceive of an employee actually doing anything illegal.
The reason for an internal audit is to shine a light on the red flags. It’s easier to identify the issues and follow the trail to determine who or what is responsible for them. In some instances, it is an administrative error. In some instances, it is because of not having sufficient protocol in place. Then, as Rachel Daddesio explains, it may be that someone was given the “keys to the kingdom.” They didn’t have any oversight in place, and, therefore, they thought that they could commit fraud and get away with it.
Rachel Daddesio explains that audits will go over the financials closely. It will explore the separation of duties, the presence of management approvals, and explore system controls. It will also involve following the money trail so that it’s easy to see where the money is coming in and going out. If there are gaps in the trail or money doesn’t add up, it can show that there’s corruption in place or poor system control.
Companies Need to Learn How to Adapt During the Pandemic, Explains Rachel Daddesio
Many companies are unable to operate “as usual” during the COVID-19 pandemic. Either due to their business being deemed non-essential or because of social distancing, companies have had to consider exploring how they will stay afloat financially. CPA Rachel Daddesio explores some of the options that are available.
One of the first things that Rachel Daddesio suggests doing is to examine what government benefits are available. Small businesses are able to get some financial relief from the federal government. Applications can be made in order to get grants that will provide funding, though it can take a month or longer to get approved.
Rachel Daddesio also identifies that many small businesses can push sales and payroll taxes for several months. This can help to offer some financial flexibility to businesses that are struggling during the pandemic.
Rachel Daddesio has worked with a number of businesses to build sustainable budgets before and during the pandemic. With so many companies struggling to bring in the needed revenue, she explains that it involves creativity. She has referenced several companies that have learned to adapt during the pandemic, changing the products they offer, or how the products are offered.
With many states lifting alcohol regulations, restaurants and bars are able to offer to-go alcoholic beverages. As such, restaurants and bars may not be able to offer in-house dining but they can offer pitchers of margaritas, gallons of rum punch, growlers of beer, and more. It can be a way to generate revenue in the unique economy that the U.S. is faced with.
Other companies have adapted, Rachel Daddesio points out, by thinking outside the box. What a business would have typically offered within their location is now being offered online or via a curbside pickup. It’s allowing businesses to generate revenue despite having to close their doors. Additionally, it can ensure that people who are loyal customers are still able to get what they need.
Rachel Daddesio suggests that small businesses look at what their competition is doing. This will allow them to stay competitive while also driving in at least some income until it is possible to open up. She also warns that even when businesses can re-open, it may take 12 months or longer to resume normal income levels.
As a CPA, Rachel Daddesio has seen firsthand how the pandemic has affected businesses in every industry. Even those that are considered essential are still faced with financial struggles. Those who want to stay afloat need to find a new normal so that they can adapt to what people need. Businesses need to be creative while offering plenty of safe options for customer interactions.
Rachel Daddesio discusses the importance of the accountant’s role in advertising and how it can make or break a business.
The role of an accounting team in the negotiations and money management for an advertising company’s clients is often underrated. However, recently, some of the world’s largest advertising agencies have entered the public eye for financial irregularities claimed by clients. Business professional Rachel Daddesio described that even the FBI has been involved.
Rachel Daddesio further explained that advertising companies often manage extremely large amounts of money for their clients. Many times, the clients have trusted the advertising firms with their money, assuming it’s being managed correctly and morally. Rachel Daddesio said that trust is now likely a thing of the past.
“What formally functioned as an honor system of trust between the advertiser and the client no longer exists,” Rachel Daddesio explained. “It’s a lose-lose because both parties now need to spend more time, money, and effort verifying exactly where the money is going.”
Business professional Rachel Daddesio further explained that both parties were being irresponsible. Those spending their advertising dollars weren’t staying on top of exactly where they were going, and advertisers were taking advantage of that. Rachel Daddesio also described that now, the ball is in the accounting team of the marketing company’s court.
“Accounting teams must work to restore the marketing industry’s integrity, so clients don’t have to be as skeptical,” Rachel Daddesio said.
She described that this means accounting teams now play an essential role in advertising, whether they’re the marketing company’s accounting team or the client’s accounting team. Accounting teams on both sides of the issue will now have to check and double-check finances, so the advertising industry can regain its reliability and become a major respected industry once again.
For now, Rachel Daddesio described that she wouldn’t be surprised if the FBI continued to serve as an overseer in many of these marketing company and client transactions. Deals that were once being made undercover between advertising agencies and the media will now be exposed and reviewed. The billions of dollars that advertising agencies have been managing for their clients is likely to diminish, as clients become leery of trusting advertisers with such large sums.
“What advertising clients have been suspecting for a long time has finally been brought out in the open,” Rachel Daddesio said. “As a business professional, I hope both sides of the issue will confront the problems and come to a solution, so the marketing industry can be fully trusted again.”