Hey Karl (and any other PTG Members who might find this beneficial). It's Shawn from the PTG Home Office
Please note that the benefits in question have passed the Senate but not yet the House (which should hopefully happen on Friday) and also require the President's signature. That's expected to happen
What you're referring to is the Pandemic Unemployment Assistance program, which would provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of the virus and don't qualify for traditional benefits. This includes independent contractors and the self-employed, who typically aren't eligible to file for unemployment, and so-called gig workers, who aren't eligible in many states. These benefits would mirror what's available in an individuals state (plus it looks like their might be some additional benefits provided by the state
It's important to note that (at least at this point), the program is designed to be administered through each states individual system. That means the application process will be conducted through whatever state you currently live in. At this point it's hard to predict how each state is going to handle applications and eligibility within the guidelines that the Federal legislation might set up.
We're doing our best to keep up and keep members informed. I'm also going to encourage everyone to follow developments within their individual states to see how this Pandemic Unemployment Assistance program will be implemented.
In the meantime, you can learn more (and see links to all the states agencies) here https://www.dol.gov/general/topic/unemployment-insurance
As I understand it, you use last year's income as a guide, but you pay quarterly estimated tax based on your present income. That's what I've always done. I have never gotten fined for any discrepancy. Here is a bit from the IRS website:
To figure your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.
When figuring your estimated tax for the current year, it may be helpful to use your income, deductions, and credits for the prior year as a starting point.
The key word is "expected." It makes no sense at all to send quarterly payments based on last year's income. If there's a tax expert out there who knows otherwise I'd like to hear it, or someone who has gotten explicit direction on this straight from their accountant.
From the instructions for Form 1040ES:"General RuleIn most cases, you must pay estimated tax for 2020 if both of the following apply.1.You expect to owe at least $1,000 in tax for 2020, after subtracting your withholding and refundable credits.2.You expect your withholding and refundable credits to be less than the smaller of:a.90% of the tax to be shown on your 2020 tax return, or b.100% of the tax shown on your 2019 tax return. Your 2019 tax return must cover all 12 months."In addition to avoid other penalties,those estimated "quarterly" payments must be paid on time or late penalties apply.No, they are not "nit-picky", but that's what Form 2210 is for.If you don't figure out the penalty, they will.It is always the last calculated line on the return & is included in the "Amount you owe" line above it.The stimulus bill did not address these payments, but the Treasury did & the IRS confirmed it.As of now, only taxes due on 4/15 are effected.Therefore, the 06/15 payment is now due BEFORE the extended 04/15(now 07/15) payment.These latter dates MAY be adjusted as needed.https://www.irs.gov/newsroom/tax-day-now-july-15-treasury-irs-extend-filing-deadline-and-federal-tax-payments-regardless-of-amount-owed
Good points, Linda.All of my retirement funds are in Roth vs traditional accounts.There are a couple other advantages to the Roth:there are no minimum withdrawal requirements starting at age 70 1/2;there are no tax consequences to the beneficiary(ies);there is no tax upon withdrawal after age 59 1/2;withdrawal after 59 1/2 is not subject to penalty or income tax;there is a "5 year rule" regardless of age, meaning funds from a Roth cannot be withdrawn within 5yrs of first funding a Roth;&amounts withdrawn do not count as income that could cause taxation of SS benefits received.Remember that the amount of conversion from a traditional is:unlimited(ie limited only by the amount existing in the traditional); &subject to federal(& state if applicable) income taxes; &must be completed by 12/31.You can spread these conversions over multiple tax years if needed.Any year that you expect to be in a low tax bracket(this year looks like a good candidate for many), consider the Roth.Remember that contributions to the Roth do not reduce your taxable income as does a traditional contribution.While I'm not a CPA, EA, CFP, or even an RPT,I've been preparing taxes professionally for over 27yrs.If you have any questions, please don't hesitate to email, call, text, FB message, etc.I'm not difficult to find, but you may have to leave a message.
There is no 5% loan as part of the recent disaster relief.As far as MA goes, you will have to wait until they get into compliance with the federal guidelines.On CT, one of our members filled out the form as if he were the employer.This is entirely new to the states.The self-employed were never covered. The forms are not yet developed by employees that are now working at home in their pajamas yet.In the PPP, the salary of the self-employed IS their Net Profit from business on their schedule C if a Sole Proprietorship(includes single member LLCs).For partnerships, the amount is from their K1s reported on Schedule E.For C Corporations & those treated as S Corporations(these do exist in our group as single person entities), it is based on their W2.The eligible amount, basically, is the above annual amount divided by twelve x2.5.That is eligible PPP amount.Apply for the Paycheck Protection Program with an eligible lender:https://www.sba.gov/document/sba-form--paycheck-protection-program-borrower-application-formSome of the PPP MAY BE FORGIVEN if the criteria is met.If forgiven, there will be issuance of a 1099C, meaning it will not be treated as income.The non-forgiven portion of the PPP is paid back over 2yrs at 1%.The $10K Grant is an advance of the EIDL, which is a loan.you must apply for the loan to get the grant.You may get the grant but not the loan.If you get the grant, it is applied against the loan.The EIDL is a 30yr loan at 3.75%The application is here: https://covid19relief.sba.gov/#/You can apply to either or both.For example, if your W2, K1, or Net Profit were based on a $50K net profit,the PPP would be 10416.67.If you receive the grant(advance from the EIDL), this PPP forgiveness amount is reduced by the grant amount to $416.67.If based on $100K, the PPP would be $20833.33., reduced by $10K to 10833.33 if the EIDL advance were received.