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This article was first published by the IRS and has been reproduced with permission. Subscribe to IRS tax tips here. A small business owner often wears many different hats. They might have to wear their boss hat one day, and the employee hat the next. When tax season comes around, it might be their tax hat. They may think of doing their taxes as just another item to quickly cross off their to-do list. However, this approach could leave taxpayers open to mistakes when filing and paying taxes. Accidentally failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave taxpayers and their businesses open to possible penalties. Using IRS Free File or a certified public accountant is the easiest ways to avoid these kinds of errors. Being aware of common mistakes can also help tame the stress of tax time. Here are a few mistakes small business owners should avoid: Underpaying estimated taxesBusiness owners should generally make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed. If they don't pay enough tax through withholding and estimated tax payments, they may be charged a penalty. Depositing employment taxesBusiness owners with employees are expected to deposit taxes they withhold, plus the employer's share of those taxes, through electronic fund transfers. If those taxes are not deposited correctly and on time, the business owner may be charged a penalty. Filing lateJust like individual returns, business tax returns must be filed in a timely manner. To avoid late filing penalties, taxpayers should be aware of all tax requirements for their type of business the filing deadlines. Not separating business and personal expensesIt can be tempting to use one credit card for all expenses especially if the business is a sole proprietorship. Doing so can make it very hard to tell legitimate business expenses from personal ones. This could cause errors when claiming deductions and become a problem if the taxpayer or their business is ever audited. More information:via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/19/four-common-tax-errors-that-can-cost-you/
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Freelancers Union’s founder Sara Horowitz is now CEO of Trupo — a new kind of company that provides freelancers access to benefits including accident and critical illness insurance. When I founded Freelancers Union over 20 years ago, I knew that the freelance workforce was here to stay and that the interests and concerns of independent workers needed representation. Now, I have launched Trupo in New York, New Jersey, and Texas. Trupo offers freelancers like you the enhanced benefits that HR departments give full-timers. These benefits, including accident and critical illness plans, are another important step in building a safety net for independent workers. Why do independent workers need a safety net? Many of you have work that is consistent and reliable, but we all know that freelance work can be intermittent. This episodic income means that averaged on an annual basis, freelancers often make too much money for many aid and government programs that help full-timers get by. But your month-to-month income can vary drastically, and the money doesn’t come in at all if you get hurt or sick and needed time to heal. At its core, Trupo believes joining together is the path for our freelance community to lead meaningful and sustainable lives. Our current system that tethers workers to employers is outdated and it is time to create a system for everyone who doesn’t fit within the confines of a “traditional” employee—which will soon be most of us! That’s why Trupo can be used by all independent workers: part-timers, contractors, self-employed, gig workers, temporary, and freelancers. Sacrifices come with the any job, but financial security shouldn’t be one of them. Trupo helps protect your way of life by offering access to thoughtfully curated benefits packages to save you time and money, and can pay you if you’re hurt in an accident and unable to work. We understand that you are busy, so we ask just five questions (much faster than agreeing on a movie to watch) to generate a tailor-made package. You don’t even need fancy information or documents on hand to complete it. Since Freelancers Union is a part owner, our mission can help to fund freelancer advocacy for years to come. As the founder of Freelancers Union, one of my goals in building Trupo was to continue to contribute to the union’s financial security—which will benefit the growing freelance community for generations. It’s time that freelancers are provided with the security and sustainability that we have earned, and we’re building this in partnership with the groups you are already a part of, like the Freelancers Union, coworker.org, the Graphics Artists Guild, and the Authors Guild. We believe that these groups take isolated freelancers and build collective strength in meaningful ways. What groups build meaning in your life? We would love to connect with your freelance community—in-person or virtual—as we share this new option for freelancer security. Join the conversation. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/18/freelance-benefits-that-compete-with-the-full-time-crowds/
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BUT FIRST…I’M LIKE, REALLY, REALLY IMPORTANT1. (Even More) Complete Shoulder & Hip Blueprint – Athens, Greece: Saturday, Feb 29th & Sunday, March 1st, 2020This will be the first leg of mine and Dean Somerset’s European extravaganza in early 2020. The second leg will take place in… 2. (Even More) Complete Shoulder & Hip Blueprint – Maidenhead, U.K: March 7th & 8th, 2020There’s an Early Bird rate for both of these events, so keep that in mind before you decide to hold off. Dean and I are really excited for this and hope to see you there! SOCIAL MEDIA SHENANIGANS
STUFF TO READ WHILE YOU’RE PRETENDING TO WORKThe Ultimate Calorie, Portion, & Macro Calculator – Brian St. PierreI was given a sneak peak of Precision Nutrition’s latest resource – their Ultimate Calculator – and it’s going to save a lot of people a lot of guess work (and time). There’s nothing out there like it and it’s very intuitive to use. It bases calculations off the basic stuff like height and weight, but also takes into account goal weight, training goals, and eating/lifestyle preferences…and then offers a “menu” that can be followed using the palm of your hand as a guide. You don’t have to be Dr. Manhattan or a master of long division to figure it out. Bookmark it! #Instagram Engagement Is Dead. Here’s the Six Things You Must Focus On – Jonathan GoodmanAdapt or “fitness influencer” status will be revoked. Psych Skills for Fitness Pros – Bros Do Science & Dr. Lisa LewisDr. Lisa Lewis has been working on her upcoming project, Psych Skills for Fit Pros – a 12 hour course on motivational interviewing, how to build and maintain motivation with clients, as well as a plethora of other topics – for the past year and this interview with Rocco Venizelos of Bros Do Science provides an amuse bouche of what to expect. Industry…. …be ready. Did what you just read make your day? Ruin it? Either way, you should share it with your friends and/or comment below.via Blog – Tony Gentilcore http://tonygentilcore.com/2019/11/stuff-to-read-while-youre-pretending-to-work-11-15-19/
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Starting a new business, a new course, writing a book, turning professional; all of us have goals and dreams. We set our goals and put in the effort, it’s exciting to think about and visualize the results. But what happens when the excitement fades? When the work becomes a slog, you become distracted, even bored with the routine? Anyone can work hard when motivated, but when boredom kicks in, achieving that goal can seem a long way off. We have all hit the wall at some point or another. The difference between a successful person and someone who gives up is not just the passion, but the ability to feel the boredom, continue through it, and stick to the plan. Here are five top tips that can help you to stay motivated. Fall in love with the process, not just the resultYou’ve set a goal, you’ve got a plan, and you can see how to complete it. Perhaps your aim is to lose 15 pounds, get your business into the New York Times, or write a song that goes viral. We mainly see our goals as the result of something, success as something that can be achieved and finished. But don’t forget about the process of getting there. If you want to lose weight, you have to accept and enjoy the process of eating healthily and exercising to achieve your goal. If you want an article published, you may get rejected over and over again, so you have to love the process of writing. If you want to be an Olympic athlete, you have to get used to the daily schedule of workouts. A great musician didn’t become great without practice. Enjoy the process of what you do and the results will follow. Stick to one or two goalsYou can narrow your focus by sticking to one or two goals. Don’t think about any other goals until these are completed, unless your priorities shift for any reason. Write them down and make them your key goals. If you have many other things you’d like to achieve, write them down too, but put them away for now on a ‘someday’ list. Put your key goals in front of you. 3 What motivates you to keep going?When boredom strikes, you need to think beyond the financial and the personal reasons for your goals. Is there a higher purpose to what you’re doing? Why do you want to achieve this dream or goal? Perhaps you would like others to follow in your footsteps, maybe you’d like your children to read what you’ve done, or you want to raise awareness about certain issues. Tell others what you’re doingBy making your goals public, you are almost being held accountable for achieving them. The more people you tell, the more it will force you into taking action. It also helps to have a network of like-minded people who may encourage you to keep going. 5 Push yourself furtherIf you’re feeling bored, it may help to set yourself greater challenges. Perhaps your work is getting monotonous, too familiar, the same old routine, then maybe you need to push yourself further. You could join a new class, start a completely new sport, set your sales targets higher, set new goals to grow your business, new targets for social media marketing. We all have goals and dreams and strive to achieve them. But sometimes we can get bored and tired of chasing them. The real success comes with consistency. Put in the effort consistently even through the monotony and you will reap the rewards. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/14/in-a-slump-5-tips-to-get-motivated/
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I’ve had a rash of fitness professionals reaching out of late asking the same question in varying iterations; a question, mind you, that I think every fitness professional ponders at some point: When the hell is someone going to green-light a sequel to Over the Top? Okay, in all seriousness: I’ve had several young/aspiring coaches reach out asking me about writing training programs. Specifically the process and how to do it(?). Ready? Here goes… Writing training programs is a lot like foul shots. You Do It, Then Do It Again, and Then AgainIf you want to get better at hitting more foul shots in the 4th quarter…you practice taking foul shots. Likewise, if you want to get better at chess you play more chess; if you want to get better playing a guitar you play more guitar; if you want to get better at nunchuck skills you practice nunchucking; if you want to get better at not getting laid you join a Lord of the Rings reenactment society. Me circa 2002. Explains a lot, actually. I know people reading want me to drum up some esoteric explanation of how to write programs, but really… …that’s the secret. You just do it. And over time, by the mere math of it all, and the repeated exposure to the act, you have no other option but to get comfortable, better, and more competent with the process. I mean, I can click on the folder affectionately titled “Making People Diesel” (<– I.e., the programs I write for my clients) and, literally, peruse thousands of programs. This isn’t to say there isn’t a metric shit-ton of reading, studying, and watching a lot of really smart people talk about program design behind my madness. There’s inevitably a “backbone” of knowledge that’s (constantly) being updated, expounded upon, experimented with, and altogether reconsidered from my vantage point. And I encourage every fitness professional to read/watch/digest all the resources that have helped me throughout my career. That being said, when it comes to writing effective training programs there’s nothing more poignant to offer other than to say…
To that point, here’s a Tweet I posted earlier this week:
Let that sink in. Coaching people is about adaptability. I am ALL for having a plan and some semblance of “order” to help someone from Point A to Point B. However, life has an uncanny way, almost comedically so, of peppering us with monkey-wrenches, curveballs, and tomfoolery that can detail the best of plans. Work happens. Lack of sleep happens. Shitty bosses who keep you late happen. Holidays happen. Kid’s explosive diarrhea happens. Life happens.And that often means switching gears. Speaking personally, and given I work with predominately general pop clients – who’s schedules tend to be a bit more chaotic and unpredictable than that of a professional athlete – I’ll go off script often. Whiteboard WorkoutsEvery one of my clients gets an individualized program written for them based off their goals, injury/health history, and ability level. I pride myself on that. However, sometimes a client will show up late, or maybe will have a sore shoulder, or worse maybe feel like a bag of dicks punched them in the face when they arrive for their training session. Plans change. I’m not doing them a service by forcing them to hit that heavy deadlift triple because the program calls for it. As my colleague, Zach Even-Esh notes:
In this scenario I’ll do what I like to call a WHITEBOARD WORKOUT. Nothing fancy here. I’ll just forego their actual program and write something up on the whiteboard instead. I know in some circles I should spend a life sentence in Azkaban for doing something so blasphemous. I’d argue I’m being a good coach. And since this is my website (and my blog) I’m totally right….;O) And That’s ThatI had someone chime in with following comment on Twitter:
Easy. I turn my hat backwards and tell it to STFU. I change things under the guise I have their best interests in mind, and not my ego. Did what you just read make your day? Ruin it? Either way, you should share it with your friends and/or comment below.via Blog – Tony Gentilcore http://tonygentilcore.com/2019/11/how-to-write-effective-training-programs-foul-shots-and-whiteboards/
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As the freelance industry booms, it only proves that there are more pros to living the freelance life than there are cons. Aside from the usual sought-out benefits – working your own hours, no boss breathing down your neck – there’s the fact that freelancers are far more likely to re-skill in their career than their traditionally employed counterparts. This is a major advantage considering the rapid shifts in the workforce. Several jobs that didn’t exist five years ago are now in high-demand, while many other jobs are being phased out. Freelancers have a huge head start when it comes to these shifting employment trends and emerging job descriptions. What this only shows is that, now more than ever, freelancers must be devoted to lifelong learning if they want to stay ahead of the game. Shift to performing higher value workLow value work refers to tasks that don’t require too much skills. Many of these tasks (though far from all) are manual in nature, such as data entry or transcription work. While there’s no telling when, many industry reports are showing that demand for these kinds of jobs will soon be phasing out. Even if there is some kind of demand, it likely can’t provide a desirable income. What this implies is that freelancers should be investing in higher value work. Tasks that can’t be done by machines, devices, and AI – take advanced coding or community management, for example – will take center stage in the freelance economy. By making the shift, freelancers can also keep ahead of their current competition. The freelance industry is already a high-competitor environment as is, so deciding to offer more high value, specialized work for clients makes sure you’ll be in the industry for a long time. Interested to know what you need to level up if you want to get more jobs next year? Read up on these five essential skills every freelancer must master to stay in-demand. Cognitive load managementWithout getting too caught up in the scientific details of cognitive load theory, cognitive load essentially refers to everyone’s ability to do cognitive activities – such as brainstorming, thinking, and reacting to real-time environmental stimuli. Taken in a freelancer’s setting, you find yourself doing a myriad of tasks, making a myriad of decisions, and finding new ways to solve client problems all in a single day. All of this thinking, decision-making, and problem-solving can take its toll. For one thing, cognitive overload is a real problem in today’s workforce. Too much information, knowledge work, and not enough whitespace for processing or breaks can overwhelm even the most intelligent freelancer. How to effectively manage cognitive load as a freelancerTo minimize cognitive overload in your freelance work, consider a few time- and energy-saving strategies to implement each day. One of these is called habit stacking, or using the power of one existing habit to get you to stick to a new one. Consider this strategy to create a daily routine that gets you flowing from one task or activity to another. Here’s a sample habit stack for a fictional freelance graphic designer:
...and so on. This benefits freelancers greatly because it takes away unnecessary decision-making that can take up too much cognitive power. By flowing from one habit or task to the next, you can focus on higher value tasks like creating high quality work for clients. Alternatively, project management systems are great tools to have for solo entrepreneurs. Instead of having to remember the status of each project or invoice, using a project management software – popular ones being Trello, Asana, or Monday – can help you update projects and keep things organized. (So you can say goodbye to spending 10 minutes hunting through folders to find one specific file.) Social IntelligenceJust as important as keeping up with the new hard skills in your specific freelance niche are brushing up on soft skills like emotional intelligence. And one part of emotional intelligence is being able to deal with other people, or social intelligence. Freelancers who are more socially and emotionally intelligent will become better working partners for clients and can easily make better decisions. You see, as a freelancer, you are your own PR manager, boss, employee, and account manager. There is no doubting that you will run into difficult situations, negotiations, and problems with clients and different stakeholders. Being able to manage the way you process these situations and assess next steps can make or break your freelance career. If a client comes to you with an angrily-worded email, claiming you’ve over-billed them, what do you do? Do you reply with a strong-worded email of your own? Chances are, doing so can ruin your relationship with that client, regardless of who was in the wrong (if at all). Being socially intelligent could have prompted you to analyze the situation and get the facts – perhaps the client overlooked the part in your contract that estimated your total work hours for the project; or perhaps you made a typo on the number of hours that bumped up the pricing total. You would also have been able to remain calm and objective, and more importantly, fair in your dealing with the client. Practicing social intelligence as a freelancer:
New media literacyNew media has emerged more prominently in recent years than it has in decades. For one thing, new media can refer to the new ways of communicating between freelancer and client, such as messaging apps like WhatsApp, Slack, or Skype. Freelancers are expected to adapt to these new platforms and modes of communication, mostly because companies and clients themselves are adapting and using these new media. On that note, consider this scenario. If a company were deciding between hiring Freelancer A or Freelancer B, but Freelancer B tells them they don’t use Skype (the company’s preferred way to correspond on updates), which freelancer do you think the company would be quick to disregard? New media literacy also serves as a competitive advantage for freelancers who constantly have to market themselves. By having your own content strategy as a marketing technique – such as having a professional website, for example – you can easily attract the right clients to you, and almost entirely on autopilot. At the same time, you need to develop some basic troubleshooting and maintenance skills to ensure all the tools and platforms you use are functioning properly. For instance, if you’re getting most of your client offers, you’d want to make sure that you know how to prevent your website from going down so that potential clients can access it at any time. In its own way, this can also prove to clients that you are digitally savvy and stay on top of trends. This makes you a more desirable hire than the competition. Improving new media literacy as a freelancer:
Virtual collaborationAs more freelancers enter the game, startups and small companies are embracing forming growth teams and using growth hacking as a way to grow their businesses quickly. One thing we can assume from this new dynamic is that, even though you may be a freelancer who works on their own, there’s a big chance you will be collaborating with other people — be it employees from your client companies or fellow freelancers. Virtual collaboration means being a productive member of a virtual team. Things like Facebook At Work have been introduced to try and bring teams together on the web. How to practice virtual collaboration as a freelancer:
Adaptive thinkingIf you’re to survive in the constantly changing freelance landscape, you need to actually be open to the changes happening in your industry. When new strategies and technology emerge, learn about them and see if you can use them for your business. If there are concepts or techniques that aren’t familiar to you yet, make the effort to learn them. For example: You’ve been hired by a client to write content for their website. On your weekly meeting, your client tells you that they want to include creating affiliate marketing content to your list of responsibilities. Unless you want to lose this client, you’d start learning everything about affiliate marketing, so that you can fulfill your new responsibility. This is also where fixed and growth mindsets come in. Freelancers with fixed mindsets will be stuck in their own “I don’t know this, so I can’t offer or learn it” way of thinking. Meanwhile, freelancers with growth mindsets think, “I don’t know this yet, but I can always learn and see how this can fit into my business.” How to be a more adaptive thinker as a freelancer:
Freelancers must never stop learningFor any freelancer to thrive, a commitment to lifelong learning is their biggest strength. Master the five essential skills listed above by implementing the recommended tips under each, and soon you’ll be well on your way to becoming a fully booked, highly-demanded freelancer in your niche. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/13/5-critical-skills-freelancers-should-master-to-get-hired/
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If you have a passion for jewelry making or you want to turn your hobby into a business with an Etsy shop, it’s important to understand that the IRS has specific tax rules about this type of enterprise. Essentially, the IRS is concerned that your activities are profit-driven and not merely a vehicle for taking the associated tax deductions, or “hobby losses” as the IRS calls them. Below are some guidelines by which the IRS determines whether an activity is being pursued for profit or as a hobby:
You do not actually have to make a profit during the first few years of your business, but you do have to be able to show that you have a profit motive in order to claim any business expenses. If your business claims a net loss for too many years, or fails to meet other requirements, the IRS may classify it as a hobby, which would prevent you from claiming a loss related to the business. Of course, if you haven’t created an appropriate structure for your hobby-based business, then that can also be a red flag in the eyes of the IRS. An LLC or LLP are often a good way to structure a profit-making venture when you are first starting out. Some other tax considerations for hobby-inspired businesses include:
Treating your hobby as a freelance business may trigger an IRS audit. Keeping accurate and extensive financial records is key so that the IRS can see that your business is legitimate. A written business plan detailing your intent to make a profit can also improve the credibility of your freelance enterprise — so if you want to launch your hobby-inspired business in 2020, now is the perfect time to start planning! Jonathan Medows is a New York City based CPA who specializes in taxes and business issues for freelancers and self-employed individuals across the country. He offers a free consultation to members of Freelancer’s Union* and a monthly email newsletter covering tax, accounting and business issues to freelancers on his website, http://www.cpaforfreelancers.com— which also features a new blog, how-to articles, and a comprehensive freelance tax guide. *Jonathan is happy to provide an initial consultation to freelancers. To qualify for a free consultation you must be a member of the Freelancers Union and mention this article upon contacting him. Please note that this offer is not available March 1 through April 18 and covers a general conversation about tax responsibilities of a freelancer and potential deductions. These meetings do not include review of self-prepared documents, review of self-prepared tax returns, or the review of the work of other preparers. The free meeting does not include the preparation or review of quantitative calculations of any sort. He is happy to provide such services but would need to charge an hourly rate for his time. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/11/turning-your-hobby-into-a-freelance-business-know-the-tax-reality/
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This will be the first leg of mine and Dean Somerset’s European extravaganza in early 2020. The second leg will take place in… There’s an Early Bird rate for both of these events, so keep that in mind before you decide to hold off. Dean and I are really excited for this and hope to see you there! Rule of Thumb: Stop getting the bulk of your nutritional information from Netflix documentaries….;o) A nice reminder not to neglect the stuff (muscles) that you’re probably neglecting. I have smart friends. via Blog – Tony Gentilcore http://tonygentilcore.com/2019/11/stuff-to-read-while-youre-pretending-to-work-11-8-19/
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The Internal Revenue Service has urged taxpayers to act now to avoid a tax-time surprise and ensure smooth processing of their 2019 federal tax return. This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season. To that end, a special page, newly updated and available on IRS.gov, outlines things taxpayers can do now to prepare for the 2020 tax season ahead. Adjust withholding; make estimated or additional tax paymentsThe IRS urges everyone to use the Tax Withholding Estimator to perform a paycheck or pension income checkup. This is even more important for those who received a smaller refund than expected or owed an unexpected tax bill last year. It's also a good idea for anyone who had a key life event, such as getting married, getting divorced, having or adopting a child, retiring, buying a home, or starting college. If the Tax Withholding Estimator recommends a change, an employee can then submit a new Form W-4, Employee's Withholding Allowance Certificate, to their employer. Don't send this form to the IRS. Similarly, recipients of pension or annuity income can use the results from the estimator to complete a Form W-4P, Withholding Certificate for Pension or Annuity Payments, and give it to their payer. Taxpayers who receive a substantial amount of non-wage income should make quarterly estimated tax payments. This can include self-employment income, investment income (including gain from the sale, exchange, or other disposition of virtual currency), taxable Social Security benefits and in some instances, pension and annuity income. Making estimated tax payments can also help a wage-earner cover an unexpected withholding shortfall. Estimated tax payments are due quarterly, with the last payment for 2019 due on Jan. 15, 2020. Form 1040-ES, Estimated Tax for Individuals, has a worksheet to help figure these payments. Payment options can be found at IRS.gov/payments. Workers and retirees who receive self-employment income or income from the gig economy, including payments in the form of virtual currency, should make sure to take these amounts into account when they fill out the Tax Withholding Estimator. Payments received in virtual currency by independent contractors and other service providers are taxable, and self-employment tax rules generally apply. Normally, payers must issue Form 1099-MISC. Similarly, wages paid using virtual currency are taxable to the employee, subject to withholding, and must be reported by the employer on a Form W-2. People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes those who owe alternative minimum tax or various other taxes, and people with long-term capital gains or qualified dividends. Gather documents and organize tax recordsThe IRS urges all taxpayers to develop a record-keeping system − electronic or paper − that keeps important information in one place. Keep copies of filed tax returns and all supporting documents for at least three years. This includes year-end Forms W-2 from employers, Forms 1099 from banks and other payers, other income documents, records documenting all virtual currency transactions, and Forms 1095-A for those claiming the Premium Tax Credit. Add tax records to the files as they are received. Having complete and timely records can help any taxpayer file a complete and accurate return. Taxpayers should confirm that each employer, bank, or other payer has a current mailing address or email address. Typically, year-end forms start arriving by mail – or are available online – in January. Review them carefully and, if any of the information shown is inaccurate, contact the payer right away for a correction. To avoid refund delays, be sure to gather all year-end income documents before filing a 2019 return. Filing too early, before receiving a key document, often means a taxpayer must file an amended return to report additional income or claim a refund. It can take up to 16 weeks to get an amended return refund. Anyone using a software product for the first time may need the Adjusted Gross Income (AGI) amount shown on Line 7 of their 2018 return to file their 2019 return electronically. Consult the taxpayer's copy of last year's return, or alternatively, visit the View Your Tax Account link on IRS.gov. Learn more about verifying identity and electronically signing a return at Validating Your Electronically Filed Tax Return. Notify the IRS of address changes and notify the Social Security Administration of a legal name change to avoid refund delays. Renew expiring tax ID numbersTaxpayers with expiring Individual Taxpayer Identification Numbers can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal application soon. An ITIN is a tax ID number used by any taxpayer who doesn't qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN not used on a tax return in the past three years will expire. ITINs with middle digits 70 through 82 that expired in 2016, 2017, or 2018 can also be renewed. The IRS urges anyone affected to file a complete renewal application, Form W-7, Application for IRS Individual Taxpayer Identification Number, as soon as possible. Be sure to include all required ID and residency documents. Failure to do so will delay processing until the IRS receives these documents. Once a completed form is filed, it typically takes about seven weeks to receive an ITIN assignment letter from the IRS. But it can take longer — nine to 11 weeks — if an applicant waits until the peak of the filing season to submit this form or sends it from overseas. Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits. With nearly 2 million taxpayer households impacted, applying now will help avoid the rush as well as refund and processing delays in 2020. For more information, visit the ITIN information page on IRS.gov. Be prepared to file electronically; Use Direct Deposit for refundsFiling electronically is easy, safe, and the most accurate way to file taxes. There are a variety of free electronic filing options for most taxpayers including using IRS Free File for taxpayers with income below $66,000, or Fillable Forms for taxpayers who earn more. Taxpayers who generally earn $56,000 or less can have their return prepared at a Volunteer Income Tax Assistance site. Tax Counseling for the Elderly sites offer free tax help for all taxpayers, particularly those who are 60 years of age and older. Combining Direct Deposit with electronic filing is the fastest way to get a refund. With Direct Deposit, a refund goes directly into the taxpayer's bank account. No need to worry about a lost, stolen, or undeliverable refund check. This is the same electronic transfer system used to deposit nearly 98% of all Social Security and Veterans Affairs benefits. Nearly four out of five federal tax refunds are deposited directly. Direct Deposit is easy to use. Taxpayers select it as their refund method through tax software or let their tax preparer know they want direct deposit. Taxpayers can even choose Direct Deposit on a paper return. Be sure to have bank account and routing numbers handy and double check entries to avoid errors. Direct Deposit also saves taxpayer dollars. It costs the nation's taxpayers more than $1 for every paper refund check issued but only a dime for each Direct Deposit. By law, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund − even the portion not associated with EITC or ACTC. This law change, which took effect in 2017, helps ensure that taxpayers receive the refund they're due by giving the IRS more time to detect and prevent fraud. The IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer. For example, the IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. Start with IRS.gov for help that includes tools, filing options, and other services and resources. Taxpayers increasingly use IRS.gov as their first resource for tax matters. Information in languages other than English is available under the "Language" tab on IRS.gov. The Let Us Help You page on IRS.gov features links to information and resources on a wide range of topics. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/07/the-irs-early-prep-campaign-for-2019-tax-returns/
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Looking for a 2020 health insurance plan this open enrollment? You might qualify for a subsidy under the Affordable Care Act. If you do, all you have to do is choose a plan, go through the enrollment process, and your subsidy will apply. If you have any trouble, we recommend calling the carrier to determine the status of your subsidy. What's a subsidy?A subsidy is financial assistance for buying insurance on a health exchange. In other words, your subsidy helps pay for some of your monthly health insurance costs. Here are three things that determine if you are eligible: • How much health insurance costs where you live There are a number of third-party websites that can help you figure out if you qualify for a subsidy. Generally, you can make up to 400% of the federal poverty level in order to qualify for the advance premium tax credit. For an individual, this is around $50,000. For a family of four, that’s around $103,000. If you make less than this, you will probably be eligible for a subsidy. I qualify for a subsidy. What now?You can apply your subsidy in different ways: If you buy health insurance using the advance premium tax credit, you can apply the credit directly to the health plan in which you enroll. And if you choose that option, there are three different ways to apply the advance premium tax credit to your plan: • You can apply the advance premium tax credit equally throughout the entire year, so that each of your monthly health insurance premiums are lower. Please note: In order to receive your subsidy, you must choose a health plan by December 15th, 2019. Search which plans are available through Freelancers Union in your area. Okay, but estimating my income is impossible!For many freelancers, income can vary each year, and you never know how much you’re going to make... until you actually make it. Honestly, the subsidy process probably wasn’t designed with freelancers in mind. For most people, that “estimated income” number (which you may see listed as “MAGI”), will be the same as the Adjusted Gross Income (AGI) reported on your federal tax return (Line 37 on Form 1040, Line 4 on Form 1040-EZ, and Line 21 on Form 1040A). If you expect to make about the same in 2020, you may want to use that number. But if you expect to make more or less this year, the government expects you to make your best educated guess. Yup, guess. You may want to start with your 2018 AGI and add or subtract to come to the right number. What if my estimate is off? The good thing to know is that if you estimate either too high or too low, you’re not going to get in trouble. The government will try to match your estimated income to your tax statements, but they’re focused on catching big errors — like a person who makes $150,000 a year but says they’re unemployed. If you estimate too high, you will receive the rest of your premium tax credit as a credit on your tax return and may receive a tax refund. If you estimate too low, you may be required to pay back some of your subsidy to the government. This would be charged directly to your end-of-year taxes (or be subtracted from your tax return). If this seems like a huge headache and you can afford to do so, it might be a good idea to receive your subsidy as a tax credit at the end of the year, rather than applying it to your monthly premium, in order to avoid additional headaches or paperwork. What about proof of income?When you’re applying for a subsidy, if you give an amount lower than your 2018 AGI, you may be required to submit additional documentation proving your lower income for 2019. Here are some acceptable forms of documentation for freelancers:
And if I don't qualify for a subsidy?To see which health plans are available through Freelancers Union, search by state. When you buy through us, a portion of your purchase goes back to the independent workforce, at no additional cost to you. We fight for better policies for freelancers every day – and now, more than ever, it’s important that we stand together to ensure that the next system works for us. Buying health insurance doesn’t have to suck. Buy insurance from people who have your back. via Freelancers Union Blog https://blog.freelancersunion.org/2019/11/06/do-you-qualify-for-a-health-insurance-subsidy-open-enrollment/ |
AuthorI have 5+ years experience working as a medical transcriptionist. When I am not working, I enjoy sports like playing basketball or judo. I love making friends and connections. Archives
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