Technical topics regarding tax preparation.
22-Nov-2020 5:10pm
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Being in Massachusetts, the state that pays the highest unemployment benefits in the country, we are used to seeing some big numbers. But as we start to do some tax planning, I think we are going to see some things we have never seen before. In, Massachusetts, I am thinking we might see some husband & wife combos over $100k.
My first story is a spouse who in 2019 reported $540 in gross tutoring income and after mileage and other expense reported a net schedule c income of $397. Spouse has had no w-2 income for years. Husband makes about $125k and no kids.
Her YTD unemployment benefits are $27,300 and by year end she is thinking it will be about $29,200
She also reminded me about her $168 of 2020 tutoring income.
No wonder state budgets are not as bad as anticipated with the massive about of unemployment income being reported
22-Nov-2020 6:53pm
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Anecdotally, I have heard from more than one source that some individuals have confessed that they are "making" more from unemployment than they did prior to unemployment.
One of your clients made $397 last year, but will get $29k in unemployment this year? Sounds like you need to raise your year-end planning fees for that one.
Just kidding.
Maybe not.
23-Nov-2020 12:44am
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Every restaurant client of mine had employees making more on unemployment than they were making while working their regular schedule.
Several clients in other industries had similar experiences.
Made it real tough to pull those people back when PPP money rolled in. Most employers would have been happy to leave them on UI if it weren't for the PPP funds.
~Captcook
23-Nov-2020 1:57pm
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Ditto for day care workers.
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