Weekly update: Work-from-home tax wrinkles

Happy Thanksgiving week! Today’s Thanksgiving health advice that made us laugh (masked, of course): Speak softly with your family members and guests, if you’re having any, because that’s less likely to spread virus droplets. Above all, they recommended, no singing and no shouting... especially about politics!

Below you will see that the stock market is caught between pessimism and optimism, as a third high-potential vaccine was announced amidst a surge in infections. We also learned this week that we can stop scrubbing everything (except our hands) quite so frequently, we share a tax wrinkle for those working from. We wrap up with three good reasons to do your Christmas shopping early!

Market news

The bumpy stock market ended slightly down this week (-.75%), as optimism around vaccines and stimulus plus the President-elect’s pledge not to do a national lockdown were balanced out by surging Covid-19 hospitalizations and positivity rates triggering new economic restrictions. Looking ahead, some federal actions may roil the markets over the next month and then pass.

One of these federal items could be driving markets higher and lower at any given time in the coming days and weeks:

Covid-19 news

A quarter of a million people have now died in the U.S. from Covid-19, with no end in sight for the next few months.

Good news: Three vaccines were announced this week by Pfizer, Moderna, and Astra Zeneca, all with an over 90% effectiveness rate at preventing Covid infection. They have begun to seek emergency use authorization, read more here. Lots of questions remain at this point: How long the protection lasts, and whether vaccinated people can still spread the virus.

The other good news is that we can stop scrubbing so hard: Scientists say there’s little to no evidence that deep cleaning mitigates the threat of the virus indoors, because it primarily spreads through inhaled droplets. 

State and local lowlights: New York City reached an infection rate of 3%, triggering the country’s largest public school system to switch to all-virtual. Forbes advised that people simply stay away from the current worst-hit states, including South Dakota, Iowa, Nebraska, Illinois, Wisconsin and Minnesota for the near future. Check the 10 riskiest states right now. (Forbes) 

Dine at your own risk: Restaurants, gyms, hotels, cafes and religious organizations carry the biggest risk of spreading infections, according to a new study of 98 million Americans. (Nature, Wall Street Journal). A few of these places are “super spreader” locations, so maximum-occupancy restrictions can be surprisingly effective. These findings, if heeded, can help community leaders make better rules to protect people. 

Work-from-home tax wrinkles

If you are an employee earning a W-2, you cannot deduct home office expenses; the 2017 Tax Cuts and Jobs Act eliminated this deduction. Your employer should either provide home office supplies and equipment or reimburse you for your purchases of those things. If they do neither, you’re out of luck; no other federal tax benefits exist now. 

If you are an independent contractor or self-employed, you are still in luck. Self-employed people or contractors can claim all their expenses for equipment and supplies as deductions. Read more on Kiplinger Tax Wrinkles. 

We close this month with 3 Good Reasons to Start Your Holiday Shopping Now (if you haven't already)! Retailers of all kinds have changed their deals and inventories, and a lot more shopping will be done online for safety reasons. Look this week for early deals and keep a running tab on how much you have spent every day (okay, that is from us, not the article!). 

Please note that our office is closed for the Thanksgiving holiday on Thursday and Friday, November 26th and 27th. This will be the last weekly email until after the holiday.

May everyone have a happy and healthy Thanksgiving!

Your Clear Perspectives Team