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Even if you're doing a little freelance work from a home office, you're technically running a business and have some new tax responsibilities that you didn't have working entirely for wages. One of those requirements is filing Schedule C, which is used to report income or loss from a business you operated as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging is for income or profit and you're involved with continuity and regularity.
The COVID-19 pandemic made 2020 a rough year for everyone, and entertainers are among the hardest-hit groups. The shutdown of entertainment venues and production facilities across the country cut off a primary source of entertainers' incomes. But it did not cut off their creativity, as they moved online to showcase their talent.
Many businesses are facing the financial effects of the Covid-19 pandemic. The loss of clients and decreased cash flow have forced businesses to make some hard choices that involve restructuring debt either in- or outside of bankruptcy or simply closing the doors.
In Notice 2020-54, the IRS explains how employers must report qualified leave given under the Families First Coronavirus Response Act (FFCRA).
According to a recent release from the Small Business Administration, borrowers can apply for forgiveness of their PPP loan using new SBA Form 3508S if the total PPP loan amount they received from their lender was $50,000 or less. "SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages," says the form instruction.
The Social Security Administration typically updates key numbers for the upcoming year in the fall. One of the key numbers for retirees is the cost-of-living change: A 1.3% increase will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on Dec. 31, 2020. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor's Bureau of Labor Statistics.
These are tough times, and the many business owners are facing severe hardships. Government loans and grants are keeping some afloat for the time being, and that is good news. The prospect of additional government loans to small businesses also can help. The prospect of bankruptcy looms in the background. As with most business decisions, understanding your options is the first and most important thing to do.
The amount of taxes you should withhold from your pension is dependent on your tax rate and your household sources of income and deductions. Basically, you add up all your sources of income and subtract your deductions to get your taxable income.
The pandemic has thrown businesses into a never-before-seen scenario that has upended how they operate. Many businesses that were thriving before the pandemic now find themselves having to make difficult decisions, including whether to furlough or lay off employees. This task is not as simple as cutting payroll. Other factors must be considered. For example, furloughed employees are treated differently than laid-off employees when it comes to employee benefits.
If you need to access your money in the near future, you'll want a good short-term investment. What are the best ways to maximize profits and minimize risk if you want to invest the extra cash you have?
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November 2020
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