Mom Totally Knows Best

May 13, 2020

In 1914, Woodrow Wilson signed a proclamation designating the second Sunday in May as Mother’s Day. Ever since then, Americans have spent that day destroying Mom’s kitchen in the name of breakfast in bed, tramping through her garden in the name of bringing her flowers, and making up for the phone calls and compliments they overlook the other 364 days. While coronavirus, quarantines, and social distancing made this year’s holiday a bit less festive, it was still a welcome break from 2020’s usual grimness for mothers, families, and even tax collectors.

The National Retail Federation estimates consumers spent over $26 billion on Mother’s Day this year, for an average of $205 per person celebrating. Greeting cards, flowers, gift cards, and brunch and dinner were the most popular gifts. (Coronavirus means less for brunch and dinner this year, although it won’t dry up entirely — Mom still loves carryout.) But housewares, books, and electronics are gaining ground, too.

All that spending means a billion or two in sales taxes. Combined state and local rates average as low as 5.43% in Wyoming all the way up to 9.53% in Tennessee, and tend to be higher in states with no income tax. Restaurants and retailers will also pay income tax on their holiday profits, and their employees will pay tax on their wages. With stay-at-home orders driving the economy into a medically-induced coma, governments are starving for revenue, and they’ll be grateful to collect every penny they can get.

As for our friends at the IRS, they’re in charge of administering an internal revenue code that’s full of tax breaks for moms (child tax credits), single moms (head of household status), stay-at-home moms (spousal IRA contributions), and working moms (dependent care credits). Of course, that last one raises the question, what mom doesn’t work? (You can actually make her breakfast any Sunday of the year!)

And here’s a specific tax-planning tip for moms who love chocolate. (And if she doesn’t, what’s wrong with her?) Twelve states, including California, Michigan, Ohio, and Pennsylvania, exempt chocolate from sales tax as a grocery item. Some states also exempt food-producing plants, which makes a tomato plant or an avocado tree a good choice for a mom with a green thumb. (Just make sure it’s not a plant that attracts murder hornets. Seriously, 2020 . . . you’re drunk. Go home.)

Mother’s Day also gives you the chance to reflect on all that wisdom and common sense Mom gave you. If you’re like a lot of people, the older you get, the smarter she gets. This year especially, you can appreciate some of that advice she’s been giving you since she let you ride Scooby Doo at the carnival all by yourself. Wash your hands — check. Cover your mouth when you cough — double-check. Clean your room — now that you’re spending all day at home, it’s even more important than ever!

Mom also wants you to be careful with your money. That’s why she gave you a piggy bank when you were five years old. She’ll cry if she finds out you’re wasting money on taxes you don’t have to pay. Or maybe she’ll be mad. Either way, that’s where we come in. This year, honor Mom with a tax plan that lasts longer than flowers and shows her you really listened and learned.

Don’t hestitate to contact us.

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