Unemployment Insurance Relief During COVID-19 Pandemic!

Unemployment Insurance Relief During COVID-19 Pandemic!

unemployment

Well let’s start off with the background of the necessity of the new guidelines to the Unemployment Insurance under the CARES Act.  On March 18, 2020, the Families First Coronavirus Response Act (FFCRA), was signed into law providing additional flexibility for state unemployment insurance agencies and additional administrative funding to respond to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security also known as the (CARES) Act was signed into law on March 27 which helped to expand states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including independent contractors and other workers who are ordinarily ineligible for unemployment benefits.


What is Unemployment Insurance?

Well, Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate UI program, but all states follow the same guidelines established by federal law. Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who are unemployed through no fault of their own. Each state sets its own additional requirements for eligibility, benefit amounts, and length of time benefits can be paid. Generally, benefits are based on a percentage of your earnings over a recent 52-week period, and each state sets a maximum amount. Benefits are subject to federal and most state income taxes and must be reported on your income tax return. You may choose to have the tax withheld from your payment. Also, I’d like to add that this is an employer’s tax that is paid each quarter.

To apply for Unemployment Benefits you must contact your state’s unemployment insurance office .

 

Now let’s get to the questions that I’ve been asked since this bill was passed that relates to the COVid-19 pandemic.

 

I am an independent contractor. Am I eligible for unemployment benefits under the CARES Act?


You may be eligible for unemployment benefits, depending on your personal circumstances and how your state chooses to implement the CARES Act. States are permitted to provide Pandemic Unemployment Assistance (PUA) to individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for regular unemployment compensation. To qualify for PUA benefits, you must not be eligible for regular unemployment benefits and be unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic.

The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.

 

My regular unemployment compensation benefits do not provide adequate support given the unprecedented economic challenges caused by the COVID-19 outbreak. Can I expect to receive additional relief?


Yes, depending on how your state chooses to implement the CARES Act. The new law creates the Federal Pandemic Unemployment Compensation program (FPUC), which provides an additional $600 per week to individuals who are collecting regular UC (including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex-Servicemembers (UCX), PEUC, PUA, Extended Benefits (EB), Short Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self Employment Assistance (SEA) program). This benefit is available for weeks of unemployment beginning after the date on which your state entered into an agreement with the U.S. Department of Labor and ending with weeks of unemployment ending on or before July 31, 2020.

 

My employer has remained open because it is essential. I’m not sick, nor is anyone in my household sick.  I do not have children or care for someone who cannot care for themselves.  However, I’m afraid of getting Coronavirus from customers coming to the store, so I quit and filed for unemployment.  Can I obtain benefits under the CARES Act?


No. Under the CARES Act, you may be eligible for benefits if you meet one of the circumstances listed in the Act, but none include the scenario described. On these facts, you are not eligible for Pandemic Unemployment Assistance (PUA) because you do not meet any of the qualifying circumstances.

There are, however, circumstances under the CARES Act in which specific, credible health concerns could require an individual to quit his or her job and thereby make the individual eligible for PUA. For example, an individual may be eligible for PUA if he or she was diagnosed with COVID-19 by a qualified medical professional, and although the individual no longer has COVID-19, the illness caused health complications that render the individual objectively unable to perform his or her essential job functions, with or without a reasonable accommodation. However, voluntarily deciding to quit your job out of a general concern about exposure to COVID-19 does not make you eligible for PUA. If you believe your employer’s response to the possible spread of COVID-19 creates a serious safety hazard or if you think your employer is not following OSHA standards, you can file a complaint with the Occupational Safety and Health Administration.

As a general matter, you are likely to be eligible for PUA due to concerns about exposure to the coronavirus only if you have been advised by a healthcare provider to self-quarantine as a result of such concerns. For instance, an individual whose immune system is compromised by virtue of a serious health condition, and who is therefore advised by a healthcare provider to self-quarantine in order to avoid the greater-than-average health risks that the individual might face if he or she were to become infected by the coronavirus will be eligible for PUA if all other eligibility requirements are met.

 

I was furloughed by my employer, but they have now reopened and asked me to return to my job.  Can I remain on unemployment?


No. As a general matter, individuals receiving regular unemployment compensation must act upon any referral to suitable employment and must accept any offer of suitable employment. Barring unusual circumstances, a request that a furloughed employee return to his or her job very likely constitutes an offer of suitable employment that the employee must accept.

While eligibility for PUA does not turn on whether an individual is actively seeking work, it does require that the individual be unemployed, partially employed, or unable or unavailable to work due to certain circumstances that are a direct result of COVID-19 or the COVID-19 public health emergency. In the situation outlined here, an employee who had been furloughed because his or her employer has closed the place of employment would potentially be eligible for PUA while the employer remained closed, assuming the closure was a direct result of the COVID-19 public health emergency and other qualifying conditions are satisfied. However, as soon as the business reopens and the employee is recalled for work, as in the example above, eligibility for PUA would cease unless the individual could identify some other qualifying circumstance outlined in the CARES Act.

 

One of my workers quit because he said he would prefer to receive the unemployment compensation benefits under the CARES Act.  Is he eligible for unemployment?  If not, what can I do?


No, typically that employee would not be eligible for regular unemployment compensation or PUA.  Eligibility for regular unemployment compensation varies by state but generally does not include those who voluntarily leave employment. Similarly, to receive PUA, an individual must be ineligible for regular unemployment compensation or extended benefits under state or federal law, or pandemic emergency unemployment compensation, and satisfy one of the eligibility criteria enumerated in the CARES Act. There are multiple qualifying circumstances related to COVID-19 that can make an individual eligible for PUA, including if the individual quits his or her job as a direct result of COVID-19. Quitting to access unemployment benefits is not one of them. Individuals who quit their jobs to access higher benefits and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.

Now to add to this I would like to focus on the High School and College Graduates when it comes to PUA.

 PUA for High School and College Graduates🎓

Graduation season is rapidly approaching. About 1.2 million high school graduates leave high school each year and do not enroll in college, and about 4 million enrolled in higher education at the undergraduate and graduate level will graduate from their program.

Students who lost a job due to COVID-19 during the academic term and graduate this May or June should qualify for PUA based on a job loss, regardless of whether they had a separate offer of employment starting after the academic term.

Students who were not working during the academic term, or who were working but had a separate employment opportunity planned for the summer, may qualify for PUA if that job offer falls through.

Unfortunately, students who were still searching for post-graduation employment opportunities but are not currently working would not qualify.

https://anchor.fm/thetaxqueen/episodes/Unemployment-Insurance-Relief-During-COViD-19-Pandemic-edf1rc

Debra Marie The Tax Queen Podcast

 

What is the purpose for your life insurance policy?

Some purposes for which people buy life insurance are:

▪️To replace their income that would be lost upon their death.

▪️To hire others to replace their contributions to the family that would be lost upon their death (daycare, transportation, cleaning services, lawn services, etc)

▪️To give a business time and resources to replace an employee when a key employee dies.

▪️To pass their estate to their heirs in a tax-friendly fashion.

▪️To pay taxes, administrative fees, and debts upon their death.

▪️To pay for chronic, critical or terminal illness expenses (when the policy has living benefits)

▪️To pay off a mortgage, school loans, business loans, and other debts.

▪️To pay for all final expenses, including funeral, memorial service, burial, transportation, etc.

▪️To leave a gift to charity.

▪️To provide cash value for retirement.

If you would like more information on Life Insurance please visit http://www.chrysalisfinancialcare.com

Tax Free Weekends 2019

BACK TO SCHOOL

It’s that time of year again to start that back-to-school shopping spree.

Back-to-school shopping is one of the biggest shopping seasons for most retail stores. Some states like Maryland and South Carolina just to name a few like to help their fellow residents out by giving them what they call a tax-free holiday weekend.  16 states are participating in this tax-free holiday weekend, which means you won’t have to pay sales tax on certain items purchased. For the other states that choose not to participate, I would assume that their thought on this tax-free holiday weekend didn’t sound to economically appealing.

Having 16 states that are participating in this tax-free holiday gives you the option to cross your state borders and go shoppingso there is no need to worry.

Do you know when your state’s 2019 tax-free weekend starts? Well, below you’ll find the information needed to prepare your day for shopping.  There are links to the “Deal News” page for each state to give you more info if needed.  Do your research on lay-a-ways, online shopping and using discount coupons in combination with this tax-free holiday weekend.

Happy Shopping!

Alabama July 19 – 21
Arkansas August 3 – 4
Connecticut August 18 – 24
Florida August 2 – 6
Iowa August 2 – 3
Maryland August 11 – 17
Massachusetts August 17 – 18
Mississippi July 26 – 27
Missouri August 2 – 4
New Mexico August 2 – 4
Ohio August 2 – 4
Oklahoma August 2 – 4
South Carolina August 2 – 4
Tennessee July 26 – 28
Texas August 9 – 11
Virginia August 2 – 4
Wisconsin No tax holiday in 2019

Visit our website at www.dmtbookkeeping.com

Can’t get hired?

So, I’m watching this movie titled “Second Act” which stars Jennifer Lopez as the character Maya Vargas, a supermarket assistant manager who wants a promotion after 15 years of using her skills which led the company into having increased sales and rising revenue with her amazing marketing strategies.    After losing the promotion to a “college-educated” candidate, Mya becomes upset and frustrated and decided to quit her job leaving the company in a bind.  She went on to further prove that “street smarts” are just as valuable as “book smarts.”

What’s the moral of the story?  Well, what I got from it while having a somewhat similar experience minus the horrible boss and wanting a promotion. It was more at trying to find an employer who would accept my experience and certifications and licenses that most college graduates had not obtained. But because they got their book experience from a reputable college/university, it was much easier for them to get their foot in the door.

“I wish we lived in a world where street smart equals book smart.”

At the end of the movie, Maya Vargas ends up proving that you don’t need someone else to acknowledge your skills if you believe in yourself.  So what did she do?  She started her own company in which she partners with other supermarkets, yes including the one who didn’t believe in her ideas.

As I mentioned previously, there are similarities in Maya’s and my story, and it’s that we both started businesses that cater to our expertise.

So remember this, believe in yourself and have the courage to create your own space.

The US Supreme Court’s Sales Tax Ruling

Online shopping may become more expensive after the U.S. Supreme court ruled on June 21, 2018 that states can require internet retailers to collect sales taxes.

The 5-4 decision broke with 50 years’ worth of legal rulings that barred states from imposing sales taxes on most purchases their residents make from out-of-state retailers.

**Online retailers were previously protected from paying sales tax if they had no physical presence in a state.**

“State and local governments have really been dealing with a nightmare scenario for several years now,” said Carl Davis, research director at the Institute on Taxation and Economic Policy, a Washington think tank. “This is going to allow state and local governments to improve their tax enforcement and to put local business on a more level playing field.”

This will mostly impact the other half of products sold online by third-party merchants on certain marketplaces like Wayfair, eBay, Etsy and Overstock just to name a few. They potentially face the added burden of collecting sales tax in states that begin taxing online sales.

The ruling would present a “compliance challenge” for internet start-ups. Independent merchants who simply post their inventory on online stores are responsible for calculating and paying the various state taxes if they are owed. In the past year, Washington State and Pennsylvania have enacted laws requiring internet retailers to collect taxes on third-party sales. More states are expected to follow suit.

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You’re Invited!! Can You Deduct your Wedding Expenses?

Getting married soon?  I bet you wish you could deduct your Wedding Expenses.  Well, you kind of can, if you follow some important rules.  But, as always, discuss it with your tax professional.

Let me give you the run down of how you may be able to deduct those wedding expenses.  First, if you do not itemize on your tax return, then there’s no need to read any further.  But, if you do then proceed.

wedding beach

1. DONATE EVERYTHING AFTER YOUR EVENT IS OVER!  

  • Flower and Food
  • Gowns
  • Wedding Favors
  • Gift Registry – process of charitable gift-giving for guests and make gifts trackable the way they are in a regular registry for couples – Here are some examples  the Good Beginning,  Blueprint RegistrySimpleRegistry and JustGive, allow charities to be added to wedding registries.

2. THE VENUE.   If you are having your reception or getting married at a historical garden, museum or homestead, or even a state or national park, the fee you pay may be deductible as a donation.  Check with the venue for more details.  If you’re having your wedding at  A CHURCH and you are paying a ceremony fee, it may be tax deductible.   If not, ask whether the church waives ceremony fees for members who donate at a certain level.   It may be worth upping your donations for the year to get a triple benefit: a fee waiver, a tax write off, and a warm glow from donating to a good cause.

Again if you have any questions you can contact me or contact your tax professional for more information on deducting your wedding expenses.

Meals and Entertainment Changes Under the Tax Cuts and Jobs Act

office holiday party

OH NO! Are the HOLIDAY PARTIES still DEDUCTIBLE?
In general, the new Tax Act provides for stricter limits on the deductibility of business meals and entertainment expenses. Under the Act entertainment expenses incurred or paid after December 31, 2017 are nondeductible unless they fall under the specific exceptions in Code Section 274(e).  One of those exceptions is for “expenses for recreation, social, or similar activities primarily for the benefit of the taxpayer’s employees, other than highly compensated employees”  (i.e. office holiday parties are still deductible).

Business meals provided for the convenience of the employer are now only 50% deductible whereas before the Act they were fully deductible. Barring further action by Congress those meals will be nondeductible after 2025.


Businesses should keep the new rules in mind as they plan their 2018 meals and entertainment budgets. 

2018 Expenses – New Rules

  • Office Holiday Parties – 100% deductible
  • Entertaining Clients – Meals 50% deductible / No deduction for entertainment expenses
  • Employee Travel Meals – 50% deductible
  • Meals Provided for Convenience of Employer – 50% deductible (nondeductible after 2025)

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Will Trump Sign the Newly Passed Tax Bill before Christmas as Promised?

Will this still be an early Christmas Gift for the Taxpayers?

new years at white house

Trump may wait until January to sign the tax bill into law.   The reason this may happen is because once this tax bill goes into law it will add to the deficit and when that happens it will trigger a 2010 law known as “PAYGO,” or “pay-as-you-go.”   Once this happens the budget law will require spending cuts to Medicare and other programs.  The reductions would cut spending on Medicare by $25 billion in 2018, according to the Congressional Budget Office.

If Trump signs the tax bill into law in January it would likely defer those spending cuts until 2019,  giving Congress almost a year to come up with a solution.

So what will the Taxpayers get out of the tax saving plan.  Well, let’s see!

In 2018, taxpayers earning less than $25,000 would receive an average tax cut of $60, the nonpartisan Tax Policy Center found.  Those earning between $49,000 and $86,000 would get an average cut of about $900; those earning between $308,000 and $733,000 would receive an average cut of $13,500; and those earning more than $733,000 would receive an average cut of $51,000.

And in 2025 these tax cuts will expire for individuals but the corporations tax cuts will remain permanent.

Happy Holidays Everyone!!!!

 

The Christmas Tax Bill

 

Senate Republicans passed President Donald Trump’s tax plan on December 2, 2017. Republicans still have a lot of differences between the House and Senate tax bills to compromise on.   The House and the Senate have to pass the “same” tax bill.   So which one would be “better.”   Better for whom, would be the question to ask.

I’m going to keep this simple for now.   After this bill is put into law that’s when things will get complicated.    But for now I will go over just a few things that make the House tax bill and the Senate tax bill different.

Family and Child Tax Credit
The House bill expands the credit to $1,600 per child and begins to phase it out for married couples making more than $230,000.   The Senate bill expands the credit to $2,000 per child, with a phaseout beginning at $500,000 of a couple’s income.

Mortgage interest deduction
The Senate bill keeps the limit for the mortgage interest deduction in place for homeowners  for  the first $1 million of home debt.   While the House bill caps it at the first $500,000 of debt.

Medical and Student Loan Deductions 
The House bill eliminates deductions for high medical expenses and student loan interest.  The Senate bill would leave the aforementioned deductions, intact.

The Affordable Care Act (ObamaCare)
The Senate bill repeals the Affordable Care Act requirement that individuals buy health insurance coverage.   Currently, the mandate is enforced via a tax penalty for people who fail to purchase coverage.  The House bill does not touch the mandate.

Trump predicts final passage before Christmas…..

MUSICIANS ARE YOU RUINING YOUR TAX RETURN BY FILING YOURSELF?

ladygaga

To all my future musician clients, I know you’ve tried saving money by using TurboTax or some other DIY tax website and you’ve probably made a few mistakes. The problem with these DIY tax programs are that they don’t ask the right questions specific to you as an artist, so you wind up with the wrong answers.

Here’s an example of a mistake that I’ve seen musicians make — YOUR CLOTHES, HAIR, AND MAKEUP AREN’T DEDUCTIONS, unless your “on stage outfit” is a costume, it’s not deductible for tax purposes.

Here are a few other tax items you may be missing or not.

#1 – 1099-MISC INCOME WAS MISSING

You forgot to include the 1099-MISC you received from a venue, artist, record label, or publishing rights organization. The IRS knows you got the money, and they’ll be contacting you soon, because the person who paid you reported the income because it is required for them to report it if it was $600 or more…you are still responsible for reporting ALL income received even if you did not receive form 1099-Misc

#2 – YOU DIDN’T SEND FORM 1099-MISC TO THE APPROPRIATE PARTIES, BUT TOOK A TAX DEDUCTION

Anyone you pay $600 or more should be rewarded with a Form 1099-MISC. If you don’t send them a 1099-MISC by January 31, the penalty is $30-$100 per form! So, ensure you send those out on time. Taking the deduction without sending the proper forms is a red flag.

#3 –  YOU DEDUCTED “FREE” SHOWS TO NON-PROFITS AS A CHARITABLE DEDUCTION

Wrong! Your free show was free; you don’t get to deduct what you would have made if you had charged the charity. The actual deduction you could take would be the mileage deduction for driving to and from the event at the charity mileage rate.

There’s no shame in pinching the pennies to do your own taxes, but make sure you don’t make mistakes and ruin your tax return. If you’d rather play it safe, hire a professional like us so that you can fix it before it’s too late to receive a refund or costlier in interest and penalties!