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Couples and COVID-19: Here are 5 Ways to Work Together During the Pandemic to Protect Your Finances
Personal Finance
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The coronavirus pandemic has changed our lives in many ways, and whether you’re thinking about the physical and social aspects or the financial aspects, there is no clear end in sight. The American economy has fallen to a dramatic degree, and an astounding number of people have lost their jobs or been furloughed for an indefinite period of time. If you and your partner are among the millions whose finances have been impacted by current events, now is the time to make sure you have a plan in place to allow you to work together through the crisis. There are many positive, constructive steps you can take that will make sure you’re both on the same page and understand your priorities and needs. We suggest starting with the following five steps. 1. Make a date to discuss your finances. It’s a mistake for either of you to assume that you have a full picture of what your economic situation is without first sitting down and having an open and honest discussion. Whether you include your financial advisor or not, set aside a specific time when you can sit quietly and without interruption and go over all of your appropriate documents and records. Though there’s a lot to talk about and conversations about money can get tense under the best of circumstances, try to prioritize these three areas at a minimum: Monthly expenses – Make sure you each know how much is being spent over the course of a one-month period. Understanding what money is being spent on and how much is being spent is the first step in creating a budget. Money on hand – Review how much cash is available in your joint accounts, whether those are checking or savings. Once you’ve assessed your available money, determine how long you’d be able to live on it if one or both of you were to become unemployed and stop having cash coming in. Employment – Have an open and honest discussion of each of your jobs, what the chances are of either of you becoming unemployed, and what you will do should that happen. This should include a plan for covering one another’s expenses in the event that one of you loses your job and the other remains employed. This is a difficult discussion to have, and the reality that is revealed as a result of this conversation may be frightening. But once you’ve had this conversation you can both feel more in control and will have a better understanding of what kind of sacrifices you may need to make to get through the crisis. You can also feel more confident in knowing that there’s a plan in place should one of you become unemployed. 2. Create a cash cushion It may feel like it’s too late to create an emergency fund but setting aside even a small amount of money on a regular basis is a good idea. Ideally people should have an emergency fund that will provide enough cash for three to six months of expenses, but even if you didn’t go into the COVID-19 crisis with that much on hand, as long as you have any surplus money coming in you should start setting it aside now. If you do so, you’ll be better prepared for the additional stress caused by unexpected illness or job loss, as well as for rainy day expenses such as repairs. Make sure that whatever money you set aside for this purpose is available to you without delay. It’s an emergency fund, so you don’t want to be forced to fill out papers or pay penalties in order to get a dispersal of your money.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
