(IRS UPDATED their website effective January 28th...see description for link confirming that you can use 2019 OR 2020 Schedule C) Hope you're able to take advantage of these self employed tax credits! You might also like... 10 Self Employed Tax Deductions & Credits for 2020: ua-cam.com/video/xz3N9wXPcxc/v-deo.html Roth vs Trad. IRA (for ALL incomes UNDER $125k): ua-cam.com/video/ATvyAf501lU/v-deo.html Hey! I'm using SoFi INVEST 📊 to buy and sell stocks (and pieces of stocks) with ZERO fees. Open an Active Investing account with $5,000 or more, and you'll get $50 in stock. Use my link: www.sofi.com/share/invest/1736016
What if your business in 2019 was only in business for the last 6 months of 2019. Would you still divide your revenue from line 31 by 260 to come up with the average daily revenue? Or would we divide line 31 by 130? Thank you
Hello and thx fir videos , May I Claim this ? I’m 1099 Nec , son turned 14 in nov 2020 , school virtual learning since March 15 2020 , school might open April 2021 , hoping. May I Claim the whole 260 days ?? Considering Thanksgiving break and Christmas break , or Just claim 260 days ? 😘Thk you sir!
@MF 777 - Hello! The 260 day number is fixed and only needed in the calculation of your average daily revenue for these calculations. I’m not sure how the virtual learning component will play a factor into your family/sick leave credits...were there any days over the summer that they weren’t in school / day care for you to be able to use? The sick leave is only 10 days and they do not need to be consecutive...same with family leave - it’s up to 50 days and they don’t have to be consecutive. Probably a good idea to claim these credits using different days - meaning not counting the sick days and family leave days on the same day. Hope that helps! Thanks for checking out the video and learning about this topic. Cheers!
Your channel deserves so much more attention, I’m a huge tax nerd and you know what you’re talking about. More importantly you know how to explain it 😂😂
@Unorthodox Savings - Thanks Joe! Really appreciate the kind words man...yeah I’m hoping more people watch your channel or mine and become financially aware of their decisions/actions/behaviors and taxes play a huge role in that. My grandfather moved to America after leaving Germany and he joined the Army to become a citizen...he then started as a laborer for a pool construction company and eventually started his own pool construction company. My mother was the first to be born in America and as a young man, I remember my grandfather asking everyone at dinner (restaurant) if they “wanted to build a pool”...and I never knew why. Now as an adult it makes complete sense...because of the meal tax write off. Lol. ...sadly though, he passed away many years ago and his legacy was his family (which we are incredibly grateful). My three brothers and I have learned from his experience and are all on track to retire comfortably and with goals of leaving a financial legacy for generations to come. So that’s part of what inspires me with each contribution and dollar saved. (Sorry for the long story! Ha!). Appreciate you man. 👊🏻👊🏻
@@Financial_Awareness Love the story !! My is almost the same. Grandfather moved from Germany opened a automotive radiator shop and passed down the knowledge to all of us.... In southern Arkansas all us Markle's are known as radiator men.... Unfortunately I'm horrible at doing things like taxes and wen to one of the only tax people in our small town and told them kinda what you said in your video about the 7202 ( I think that's the number ) and they acted like they never heard of it.... what would you suggest I do ? Or do you know anyone trustworthy that would be interested and capable of doing them and able to get me the most out of my tax return? I am head of house hold self employed and claim my 6yr old daughter and her mother as dependents. also this tax season will have pandemic unemployment taxes on it also... thanks again for the videos!!
@@danielmarkle8823 - Mr. Radiator Man!!! Love it. Yeah, my brothers and I are very grateful for the family legacy we carry on. Hey, no worries about taxes...you've found my channel now and clearly are comfortable searching UA-cam to gain more knowledge...so good job and I encourage you to continue that learning path you're on....your comfort will grow with time, each video watched, and each tax season. The more you know the better you'll feel and the more confident you'll become. Yes, you will have to pay taxes on that PUA income - so hope you didn't spend all of it and carved some out for taxes...or at least can get some tax credit assistance through these two tax credits. My girls are around the same age as your daughter...at 6 years old I imagine she's in Kindergarten or 1st grade and likely her school shut down as I mentioned in the video...so at a minimum I suspect you'll be getting that tax credit. Sorry to hear your local tax person isn't up to date with new legislation and keeping up with the new events/changes for this tax season...bummer. You can either work with them if they are the only one in your area or try an online tax filing service - there are many. Most of the online ones walk you through several steps to help you maximize your return. I am not a licensed CPA - I was simply a Financial Advisor for 8+ years, Finance/Real Estate double major at college, and am a Tax-Nerd for stuff like this. You're welcome to check out some of the links in the videos if you'd like to chat - I intentionally don't mention them in the videos because I feel like I've been in sales for the past 15+ years and the last thing I want is to come across as salesy in the videos, but I am available for those interested. You should edit your comment and delete your email address (in my opinion)...I've always taken my clients' privacy very seriously and I wouldn't want my personal email floating around like that. Anyway, I appreciate you boss! Cheers!
@Bushwick Polymath - Oh thanks so much! You know, I'm certainly NOT PERFECT by any stretch of the imagination. Literally just today I responded to a comment where I made an error in the video. Yikes! However, I like to think my videos are at least 'good enough' for an average person to learn something from them...then go ask a professional CPA like yourself about the specifics and "how does this video apply to me" kinda thing. At any rate though, I really appreciate you making your comment and sharing the love...thank you! Cheers boss!
I'm so glad I discovered your channel and really enjoy your presentation on financial topics. Thanks for digging into this topic, as it is pretty detail intensive, and have saved it, as I'll need to reference it a few more times. I would love it if you did a video on 529 vs Coverdell and some tax/retirement strategies if you're filing with both W2 and 1099. Thanks and keep it up!
@Larry's K- Cup PODcast - Holy smokes that is so kind of you to say - thank you for putting a smile on my face! Appreciate you taking the time to learn more about your personal finances and tax strategies...wish more people could follow in your footsteps. Yes, I'd be happy to put together a video about the different ways to do college planning and will have some follow up tax/retirement strategies. I've already got a few in both those categories and just re-organized my videos as you scroll on a mobile device or from the 'home' page from the channel. I try to do a mixture of time-sensitive videos and other helpful ones as well. Appreciate you, sir!
@Charles Scott - Thanks man! Yeah, we need to get the word out...please feel welcome to share the video with any of your other self employed friends...we could all use a few extra bucks in our pockets these days. Appreciate you, boss!
Can you elaborate on what qualifies one for the family leave tax credit? Are you able to expand on this more? Maybe give some additional examples or scenarios of how you can qualify? Would my kids have had to be attending school full-time prior? Would the work that I do at home as an independent contractor have to come to a complete halt while taking care of the kids in order to qualify? Seems like there are some gray areas. I'm just trying to know more definitively if this applies to me or not?? Thanks!
@Kris Dorner - Sure man...I'll give it my best shot...here you go... Can you elaborate on what qualifies one for the family leave tax credit? Yes. Are you able to expand on this more? Sure. Maybe give some additional examples or scenarios of how you can qualify? Everyone's situation is different...this video and the knowledge shared is geared towards those that are self employed - so this would only apply to those that own a small business or generate their income/revenue from being self employed...which could be neither spouse, one spouse, or both spouses...and it would only apply to that spouse's income....my wife is W-2 and I'm self employed...so for us this can only be used to offset the tax burden created from my self employment income and not my wife's W-2 income. Would my kids have had to be attending school full-time prior? No. Doesn't matter if they were part time or full time in school...if their school shut down or if their daycare facility closed AND you had to provide care for the kids (instead of being able to work/telework) then this applies to you. Would the work that I do at home as an independent contractor have to come to a complete halt while taking care of the kids in order to qualify? 'Complete halt' - no - but you likely generated less revenue...and the 10 days (sick leave)...and the 50 days (family leave) DO NOT have to be consecutive...so take the time to look over your calendar to see when each of these apply based on the date time frames shared in the video of April 1st 2020 - March 31st 2021. In my personal situation the schools had their normal Spring Break and then never opened up the school again for weeks...then they did virtual learning...and the day care we send them to for summer time camps was closed and we did not have much choice other than to keep them home all summer...thus preventing me from working or being able to telework for many days (again - doesn't have to be consecutive)...so look at what days those were for you (if any) and follow the formula to calculate the tax credit. Seems like there are some gray areas - yes, there are some gray areas. Best course of action is to do what you're doing...watch videos, read articles, research, learn...and work with a CPA to make sure you are following within the letter of the law. Hope my response was somewhat helpful...I don't always have the time for longer responses like this (sorry for the week long delay) so if you like please feel welcome to schedule a call and we could knock out some questions in 10 or 15 minutes. Lots of good info out there though already and a quality CPA will help guide you as well...I'm happy to help if I can. Appreciate you checking out the video/channel and hope some of my other videos have not been a waste of your time. Cheers, boss!
Hi 😊 , thanks for your oh so informative videos. So i had regular W2 wages in 2020 and very little self employed income , 2019 i did have self employed income with a 1009misc. I plan on claiming the 7202 with my 2019 self employed income, as per the rules this sounds like i qualify , just making sure i dont miss out on any credits this year.
@K SAUREZ - Sounds like you've got it all dialed in! I'm sure many folks will be using 2019 figures over 2020 for these calculations. Appreciate you checking out the video! Cheers!
thank you for your research. can provide an simple of a complete 7202form for example for me to see. I know u filled it out the right way. thanks for your help
@Ludrose Lafrance - Hey, my pleasure! Wow! Really appreciate the vote of confidence you place in me. I take that as a compliment. Although I do plan to accurately look Form 7202 over thoroughly, my CPA will be doing mine. Additionally, due to several factors, we usually don’t file our tax return until early April...so I am actually still gathering my docs and getting organized at this point. That said, here is a link directly to IRS website regarding the instructions for Form 7202... www.irs.gov/pub/irs-dft/i7202--dft.pdf That form gives some samples and examples and answers some questions you may have. Hope that is helpful!
@ACO 7 - It’s my pleasure, boss! Glad you appreciate the video...thank you for taking the time out of your busy day to watch. I’ve got another one planned to be published either later today or tomorrow. Similar topic - Self Employed Taxes...just a tax-tip type video. Hope you subscribed...thanks...cheers!
Hi thank you for the information - but I am a little confused. I thought we were supposed to only use 2020 Sch C. SO based on your video we can use either 2019 or 2020? I couldn't find anything directly on IRS that states that. Just want to make sure I am doing this correctly
@CER Financial Services - Hi! Thank you for taking the time out of your busy schedule to watch the video. It is my understanding that the IRS website will be updated soon to reflect many of the changes/updates that happened on Dec 27th. Pretty sure I did see something in the IRS website regarding this 2019 vs 2020 Schedule C question, but I can’t seem to find it from my iPhone at the moment....sooo...this link directly to Senate Committee on Finance document will have to suffice until IRS website is updated... www.finance.senate.gov/imo/media/doc/Tax,%2012-21-20,%20Section%20by%20Section%20COVID-Related%20Tax%20Relief%20Act%20of%202020.pdf Sec 17 should address this concern for you. Please subscribe if you haven’t already - would love to have you around the channel! Appreciate you. Cheers!
i have been trying to populate the 7202 and are confused as to what part of the form pertains to me and my grandchildren, i meet all of the qualification for both credits and not only was i self quarantined but my grandchildren were all sick at different times of the year between 20 and 21 i missed the deadline for 20 so my question is where it askes for self employment income for 21 do i fill out all parts of the 7202 or just page two and where do i insert my net earnings
Hey I just want to make sure I'm claiming this correctly. I claimed the 50 days max because my kids school closed, we did virtual, and I was unable to conduct my self employed business for multiple months well over 50 days. I also got unemployment during this time. Would I be able to claim the credit with unemployment? I also used my 2019 earned income amount since 2020 was so small. Does all this sound legit? Because my refund is so much more than its ever been lol.
@Jessica Durham - Sounds legit to me. I’m so sorry you had to make all those sacrifices to get by...many life lessons we all learned through those challenges we faced. Yes, you can claim this tax credit even though you received unemployment benefits. I’m thrilled to hear your refund will be more than you expected. Awesome! Map out a plan and use those dollars wisely. Appreciate you for taking the time to watch the video...hope you subscribed for future vids! Thanks...cheers!
@Nathalia J - Sorry it’s so confusing! Ugh, frustrating I’m sure. My best suggestion would be to speak with a CPA. It’ll cost a little money, but if you ask a ton of questions, take notes, and learn as much as you can then it’ll help you with this return, future returns, and also how you can structure your business expenses and other business transactions moving forward.
@Destani Fields - Yes, you are allowed to use 2019 OR 2020 revenue to get these tax credits. Thanks for checking out the video...appreciate you! Cheers!
Hi K. Scholl, so to make sure it is correct to claim this credit even if you worked part of the year and collect unemployment? Also, what about if you did not work at all just collected unemployment the entire time? of course using 2019 Schedule C. Thank You!!
@Tiffany Pina - Hi! Thank you for investing in your own knowledge by watching this video - good on you! Yeah, so the legislation that was passed on Dec. 27th, 2020 that extended these tax credits also mentioned being able to use 2020 OR 2019 revenues from your Schedule C...if there is one thing we can be grateful for that the law makers got right - it was recognizing that many people’s 2020 revenue amounts were obviously going to be less than 2019’s numbers due to everything that happened. So, yes, you can use your 2019 Schedule C (as am I). You will have to pay taxes on your unemployment income, but that is separate from your Schedule C earned income which is used to calculate your Avg Daily Revenue for these tax credits. Please feel welcome to confirm with your local CPA. Would love for you to subscribe if you haven’t already. Thanks! Appreciate you. Cheers!
@billy kelly - Thanks boss! I hope we can put some money back into the pockets of all the self employed people that qualify for these tax credits....PLEASE SHARE with any other self employed buddy or FB groups you’re in...a rising tide lifts all boats. Appreciate you! Cheers!
Thank you for making this very informative video and thank you for replying to all the comments. My question is, I don’t understand how people qualify for this tax credit, if we were receiving PUA unemployment from March 2020 to March 2021 as self employed, because we were not working at all. Can you please explain more on this? For example while I was on PUA last year I came in contact to a friend of mine right after 1 day he got his positive corona result, and ended up spending the whole day with him, because he did not tell me about his diagnosis. And he ended up telling me the next day. After that I was doing my best to quarantine myself from my family for the next two weeks. So how can this scenario connect with form 7202 qualification requirement? Thanks.
@Minasse Kebede - Thank you so much for your kind words & I'm glad you found value in the video. I do truly enjoy responding to comments/questions and helping out where I can. By law, you do have to pay taxes on PUA on your 2020 tax return. However, PUA income is not the same as generating revenue as a self employed individual. Not all, but most self employed individuals are sole proprietors/independent contractors...and the net business income you generate can be found on EITHER your 2019 Schedule C OR your 2020 Schedule C (line 31). Based on the legislation that was passed on December 27th, you can use your 2020 Schedule C or your 2019 Schedule C to calculate your Average Daily Revenue in order to find how much of these tax credits you qualify for. Regarding your situation and how you substantiate your eligibility (how you prove that you should get one of these tax credits) you have to follow the steps I outlined in the video. Click this link here and read sections 60 - 69, but specifically section #68... www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals You'll then click this link (also found within section #68 from the link above)... www.irs.gov/newsroom/how-should-an-employer-substantiate-eligibility-for-tax-credits-for-qualified-leave-wages From the way I read these instructions, as a self employed person with no employees, you'll have to write a letter to yourself answering questions #1-4 from that link. That statement/documentation will likely need to be filed with your 2020 tax return. In your situation, since you were self quarantining from exposure to a person that tested positive, then I presume those two weeks are the weeks you'll note as when you were self quarantining. If you saw a healthcare professional then you'll note them on your documentation. If not, then my rhetorical question back to you is....which city/county/state/federal governmental agency instructed you to self-quarantine in the event you had to due to being exposed? I could be wrong here, but I thought nearly every municipality was telling people to "stay home" and not work unless you were an essential worker. A CPA in your area can confirm/qualify my remarks, but that is my understanding of the situation. (that's my CYA response - lol). Wow, ok, super long response to your question...was that at all helpful? Appreciate you.
@@Financial_Awareness WOW, thank you so much for such a detailed reply, you are the best adviser on UA-cam. I will for sure subscribe to your channel, so much value, stay blessed!
@Minasse Kebede - My pleasure! Happy to help you get a few extra bucks in your pocket hopefully. If you have any other self employed friends or groups you’re in...please feel welcome to share any of my self employed-related videos with them...the more folks that are aware the more money we will have to help us get by during these challenging times. Appreciate you!
@Josefina Medina Vega - You will have to pay taxes on your PUA income, but no it does not impact your eligibility to get PPP funds. Additionally, the SBA has stated you do not need a good credit score in order to get a forgivable PPP loan...so if your lender requires it, just know you don’t need that in order to get PPP and that you should perhaps consider a different lender. Hope that helps! I don’t have all the answers, but feel welcome to scroll through other comments to see my replies or feel welcome to comment and ask - I’ll help if I can.
This is very helpful, thank you for your time and effort! Are we able to claim both the tax credit and sick leave credit? Additionally, my 2020 income was much higher due to a long term project completion. Can/Should I use my line 31 from 2020 to reflect my daily wage as it will be about double what 2019 was? Thanks for your help!
@Amber Wood - Hello! Thank you for taking the time to watch the video. Yes, as long as you qualify for both you can claim both. Yes, if your 2020 Schedule C is bigger than 2019 then I would use that one for sure! Please share the video and spread the word...every self employed individual needs to be aware of these two tax credits...the more money we can get into our pockets the easier we can all get through these financially challenging times. Appreciate you! Hope you subscribed for future vids! Cheers!
@Amber Wood - Awe...thank you! ☺️ If you have any finance-related questions you’d like to watch a video of please feel welcome to share. I’ve got quite a few ideas lined up, but am happy to adapt my content calendar if there’s something you’d like to see. Thanks!
Hey there. Just seeing if you are able to claim additional sick and family leave days for your 2021 taxes if you already claimed 10 sick days and 50 family leave days on your 2020 taxes?
@Robin Florance - Check out this link directly to IRS website: www.irs.gov/newsroom/paid-sick-and-family-leave-credit-2020-vs-2021-comparison-chart If you're eligible, then yes, but please confirm with a CPA for your specific situation. Hey, thanks for taking the time to check out this video...hope between this one and a few others that you're able to find some good financial nuggets. Cheers!
So if I didn't file a 7202 originally in my taxes and I'm claiming this tax credit now, do I still need to provide the IRS with proof "substantiate eligibility", the documents or written forms, along with the amended return 1040X?
What if I began a self employed job at a private practice in 2020 but did not do self employment in 2019? I’m trying to file on turbo tax and it keeps asking for 2019 SE forms
@Alex & Stanley Demosthene - Hey, thanks for checking out the video! I'm thankful you took the time to do that. You're able to use 2019 figures OR 2020. I'm not sure why it's asking for 2019 SE forms. Here is the link directly to IRS website that speaks specifically about this topic... www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals Hope that helps! Personally speaking, despite my confidence in the tax/accounting knowledge I have, I have found value in working with a CPA each year for the past 10+ years. If your situation isn't complicated then TurboTax is awesome and easy, but there may be value in working with someone in your area if you can't get this worked out through TurboTax. Also, I've got a few videos regarding Roth vs Trad and Solo 401k vs SEP IRA that you may be interested in watching...take a look if you have time! Appreciate you. Cheers!
@@Financial_Awareness If I may, after reading Form 7202 instructions (pg 3, Line 26 www.irs.gov/pub/irs-pdf/i7202.pdf), I'm seeing the IRS wants to use Schedule SE (self-employment tax) Line 6 for the Net Income. I'm seeing tax software companies are asking for the Schedule SE and the total number of days for Sick Leave and Family Leave to calculate this credit. Hope this helps!
Correct. I believe in the video I mentioned using Schedule C figures, but you are correct…after I completed my return I realized these are actually based on Form SE figures. Thanks!
Hello there! thank you the great video...quick question for you. As per the IRS web-site, it states that only some self-employed individual qualify for this tax credit - "an individual who regularly carries on any trade or business within the meaning of section 1402 code". I am a full time rideshare driver, do I qualify? I was not able to work for two weeks since I had COVID-19, I also have all the paperwork to prove it....thanks in advance.
@Ridesharing with JC - You'll def want to consult with a CPA to confirm. I myself was disappointed that I did not get a larger tax credit for each of these. From what you've shared I believe you qualify for these tax credits. Thanks for checking out the video and channel...cheers!
Thank you for the very informative video! So quick question if u don’t mind. If I were caring for a child that was quarantined multiple times from august-December of 2020 can those sick leave days be split up for I was just missing one day a week each time? So 2 days each time she was Quarantined I had to stay home with her and the other days dad did. This happened 3 separate times so 6 days total but different weeks and months. Hope that wasn’t to confusing.
@Stephanie Bollier - Not confusing at all. Great news, nope...they don’t need to be consecutive days and yes you can list up to 10 days. There is, however, a different maximum amount allowed depending on if you were self-quarantining yourself OR if you were caring for someone else. If you’re quarantined yourself the daily max is $511, but if you’re caring for another person I believe it is a $200/day max....which is the same daily max for the family leave credit. Cant claim sick leave credit & family leave credit for the same day. So, for example, my daughters’ school closed and I had to care for them basically from last April 1st until they started school back up in Aug...so I’ll be looking over which 50 days I claim for family leave credit...I’ll also be claiming the sick leave credit, but the max for that is only 10 days and they have to be a different 10 days than the ones claimed for family leave credit. Hope that example helps. Hey, thanks for taking the time to check out the video...appreciate you. Cheers!
@Shaun - From the research I did on the IRS website, I believe there is supposed to be a letter that you write documenting the specific days you were out or had to take care of someone that was out...and then you simply retain that documentation with your return - doesn't have to be turned in to IRS, just retained as documentation. If you saw a doctor - save those records. If schools were closed down - save those records/announcements. Doing a combo of all that should suffice IMO. A CPA could confirm any of the above, but that is my understanding. IRS Link...scroll down to #122: www.irs.gov/newsroom/tax-credits-for-paid-leave-under-the-american-rescue-plan-act-of-2021-specific-provisions-related-to-self-employed-individuals#substantiate_eligibility Hope that helps! Thanks for checking out this video and being part of the channel. Cheers!
In 2019, I made $7,000 (for the entire year) with my business as I was just starting out... I filed $7,000 gross income on my 2019 taxes. From January 2020 to March 1, 2020 I grossed $12,500, business was starting to progress, and then covid happened and shut everything down and I had to file unemployment as a independent contractor/gig worker cause the businesses I had contracts with closed down. So from March 2020 to December 2020... I was on unemployment, but within that time frame I had covid, then I got over it... and my sister had it, and I had to care for her. I haven't filed taxes yet for 2020 or 2021 I was going to do so next week, and someone was telling me about this credit, that I didn't know about. My question would I still be able to file for this credit only making little money? and had collected unemployment?
@DRAKE - First answer - yes...my video speaks more toward educating the self employed, but yes you can claim it if you are a small business owner. Second question answer - anyone that owns a business could be eligible for this tax credit...if you have multiple members that own a single LLC then I would advise that you work with a CPA to get the correct figures, but I believe the number each member would qualify for would be directly correlated to the income they received from the business. Hey, thanks for taking the time to watch the video. Appreciate you. Cheers!
@@Financial_Awareness no thank you for taking time to answer me I was a bit confuse about this, as for the proof just writing a letter explaining why I quarantine my self would suffy or do I need some healt provider, because I just did it by myself because a client told me he might have been sick so I close for 2 weeks
@@drake3934 - Yeah, my pleasure. TBH, I think this is the grey area in the sick leave tax credit. The Family leave - pretty straight forward with schools and daycares shutting down across the country nearly. The Sick Leave credit seems a little open to interpretation. The way I read into it is....if your local city/county/state/municipality told you to stay home if you're experiencing symptoms and to 'self quarantine for two weeks' then I think you can just list your municipality as the governing body that told you to stay home...which in theory should suffice. The, of course if people actually saw a healthcare provider then you would list them in your statement/letter that would go along with this document & your tax return. Just my opinion, but that's how I'm reading into it. Hey, thanks for checking out the channel...hope there are a few more videos that you find helpful. Cheers boss!
My question is do you have to be filing EIC for the kids that you claim you are using 7202 form for. My kids were out of school from April 12-Dec of 2020. I do not carry them on my taxes i file only myself head of household
@Real Tee Marie - To answer your question - no. The EIC and these two credits I discuss in the video are separate credits. It is my understanding that you do not have to file EIC in order to receive the credits on Form 7202. All that said though, if you are not claiming your kids on your return then my best/honest reaction is for you to work with a licensed CPA for your unique & personal situation (or TurboTax or online if you’re comfortable)...because of the fact that you do not claim your kids in your tax return I am not sure how that would impact your eligibility for these tax credits. Here is the IRS link to the instructions for Form 7202... www.irs.gov/pub/irs-pdf/i7202.pdf ...look at bottom right hand corner of second page. It only mentions “son or daughter” and nothing about whether or not you actually have to claim your kids on your return. I am not a licensed CPA and my only goal is to help & try to set your expectations. Sorry for not being confident, but I just am trying to help point you in the right direction. Was that at all helpful or did I confuse you more? Appreciate you reaching out. Cheers!
@Real Tee Marie - That’s awesome you file on your own - love that! But yeah, in my personal experience a CPA will pay for their fee by providing more value than they cost. If your return isn’t terribly complicated I presume it wouldn’t cost more than $200-$300 (or less maybe depending on your part of the country). When you do hire someone...ask a ton of questions so you get the most bang for your buck and perhaps you can apply the knowledge gained to future year’s tax returns when you file on your own again. So go to that meeting prepared to take notes and with questions ready to ask. Keep up the great work as your financial planning journey evolved! Appreciate you. 👍🏻👍🏻
Good afternoon. Why questions is . If a person reports self employment in 2019 and had a net earning on SCH C . But in 2020 did not have self employment income due to pandemic COVID. Can the person file 7202 and only used net earning from 2019. The person only had unemployment. Can they still apply for the credit on 7202.
@Merly Sepulveda - Please double check my response with a professional CPA, but I believe you can still file for these credits (assuming you are eligible based on their definitions). The legislation passed in December allowed you to use 2019 or 2020 Schedule C to calculate your credit. Hey, thanks for taking the time out of your day to watch the video. I might have other videos that you may be interested to watch...appreciate you. Cheers!
You would have been eligible, had you been an employee of an employer (other than yourself), to receive qualified sick leave wages under the Emergency Paid Sick Leave Act or qualified family leave wages under the Emergency Family and Medical Leave Expansion Act.
@ali ali - check this out and scroll down to section 106 where it literally discusses how self employed individuals are eligible… www.irs.gov/pub/newsroom/fs-2022-15.pdf
Hi beautifully spoken and understandable I love it! I really feel like most people don't even know about this smh. But what if I am a person filling on turbo tax? How do I claim this sick leave? Is it an option in turbo tax about it ? How does that process work?? My children left school last year and are now forced to be home schooled. I have two children and I would like to file for it ? Should I be printing out that form? Or like how does it work?
@Mdot theartist - Hello & thank you for the complement. I'm glad you found the video, are aware of the tax credits, and are researching by watching YT vids...good job! Personally, I haven't filed with TurboTax in a very long time...so I do not have a definitive answer for you on that. However, Intuit (who owns TurboTax) is a very smart company and I would be shocked if they did not allow you to get these credits by e-filing...there should be an option for you to select or a box to check....I'll have to look into that somehow. Regarding your other questions of how to claim it - I go over those in the video and also have links to IRS website in description of the video. The tax credits are tied to your self employment income...so I imagine the TurboTax process would follow the normal protocols of someone filing a tax return that has self employment income.
@@mdottheartist558 - Whaaaaat 'perfect' ??? lol...I'll have to share this with my wife this evening - she'll have an opinion on that subject for sure. Hahaha! Thank you :)
@@Financial_Awareness Hi, I just tried to file with turbo tax. It seems to say unable to efile. Or perhaps it will be available on later date. Do you happen to know any software that enable efile for 7202? thanks
@@UwUPLAYZ. - Hi Stanley! Another subscriber and I were discussing this the other day. She mentioned to me that once the Form 7202 is no longer in "draft" form it should be available for e-file. So, my suggestion would be to simply check on it for a few more days...now that we are a few days into February I presume it would be finally updated soon so you and others can begin to file their taxes. Good job though because you are ON IT and getting this done asap....soooo great job being organized and filing as soon as possible. Appreciate you. Cheers!
@Kelsey Pruitt - Hi, Kelsey! Thanks for checking out this video and researching the topic. Good job! No, it is my understanding that you can still e-file and receive this credit. However, if the Form 7202 is still in it's 'draft version' then you might not be able to finish your return until the IRS finishes Form 7202. I haven't checked, but I did hear other people had their tax returns already completed and were simply waiting on this form to submit and file their return. Hope that helps! Appreciate you checking out the video and channel...there may be a few other videos of interest to you if you scroll through (if you have time). Have a great day! Cheers!
@Chelsi Posh - I’m no CPA, but your W-2 and side-gig will be in same 1040 tax return. Your 1099 should have a schedule C that goes with that revenue and your calculation for these tax credits (assuming you’re eligible and qualify) would be based on your side-gig Schedule C net revenue...line 31. Does that help / make sense to you? Hey, thanks for taking the time to check out the video. Appreciate you. Cheers!
@Banana Roll - That is my understanding of how I am viewing this situation - yes. However, the additional remark on the IRS website also mentions being 'unable to telework' - so depending on your business industry/structure/clients/etc you may or may not have been able to telework. This is exactly where some of the grey area comes into play with regards to these tax credits. Hey, appreciate you checking out the video...thanks! Cheers!
@tanya newman - Hi! Thanks for checking out the video. Yes, you can qualify. Please confirm with a CPA in your area, but I believe you would use your salary/wages as noted in Form 941 for your calculation of average daily revenue. Hope that helps! Appreciate you...cheers!
@john fedourich 2 - When amending a previous return - that will only impact THAT one return and not your current return. Also, I have amended two tax returns previously…they have to be done via paper/snail mail…cannot be done electronically…so the entire process is much slower. Please be mindful of that. Hey, thanks for checking out this video and being part of the channel. Cheers, boss!
Would you happen to know if I would still be eligible for this if I was a W2 employee for 2019 and part of 2020 and became 1099 in 2020 due to Covid wiping out my industry (trade shows). I'm now a self-employed consultant. Also, I've had this self-employed business since 2008 with an EIN but haven't had to use it or file taxes with it since around 2012. Thank you for all your research and information.
@Danny Krieger - You are allowed if you have 1099 income/revenue for 2019 OR 2020...if you have the Schedule C & 1099 documents to match then you should be good. Appreciate your feedback and for you taking the time to research this topic...hope you're able to get some tax credit relief from one or both of these. Thanks - cheers!
First, let me say I enjoyed your video, very informative! I have a question though, I have a bookkeeping business. You mentioned that if I could work at home the credit wouldn't apply to me. The part that stumps me is that technically I could work virtual or at home, the problem is I lost so much business I had to claim unemployment. How does that work?
@Deanna Bazan - Thank you for your feedback and watching the video! Glad you thought it was informative. Your question is a really good one. I was simply using the information pulled directly from IRS website / rules...here's the link to one of the many pages I read while researching the video... www.irs.gov/newsroom/covid-19-related-tax-credits-for-paid-leave-provided-by-small-and-midsize-businesses-faqs Here's the quote, "...(which for purposes of these rules, includes telework)." There was another CPA that commented on either this video or another one that had mentioned that this was another typical government handout...from my perspective, I think there is some gray area here and on one hand you 'could work' from home, but on the other hand you 'couldn't telework' because all the business went away. I would imagine there are many in this situation and without further clarification from IRS it appears to me that some people will blur the lines and 'tell the story how it best suits them' in order to get this tax credit. I think your claim that you couldn't telework could be justified if you lost all your clients / business and was unable to work to find new clients to help - even if that means that you 'could telework' you couldn't find the clients that would hire you to do so....therefore making you unable to telework. IDK...just trying to come up with a justifiable reason that this tax credit would apply to you. Not sure if that helps...what are your thoughts? Appreciate you. Cheers!
@Kasten Fam 5 - Yes you can. This credit does not have impact on PUA income or not....just keep in mind you'll have to pay taxes on PUA income, but it is not considered earned wages for the calculation of these credits. Thanks for checking out the video! Perhaps there are others on the channel that may be of interest to you. Appreciate you...cheers!
Help! Can I use a W2 from 2020 since I am just starting my business in 08/2020. My Schedule C is not looking to good, but I had some W2 employee wages and doctors notes & school shut down letters covering me and my son for the dates listed. Do I have ANY chance? It's like I can't catch a break anywhere 😭😭😭 I need money for my startup business. I'm trying.
@WillPower 2 Wellness - I’m so sorry you’re feeling like you can’t catch a break. That is a sucky feeling that’s hard to shake off...but that’s what you’ve got to try and do. I’m sure that there will be something good that happens in your business/life if you keep at it. Surround yourself with the right people, read a few good books (or audio books), and keep at it...you’ll find more success with patience and time. Nope, unfortunately a W-2 will not allow you to take advantage of these tax credits. However, if you have any positive number on your 2020 Schedule C then you’ve got a shot! Keep trying. Adapt and overcome. You’ve got this! Appreciate you.
Hi! Thank you for the informative video. Could you clarify if these credits are or are not available for self employed person living abroad during 2020? Specifically, last year, I was living in Asia and selling online in the USA market via Amazon. Thank you!
@Khoa Pham - Hi there & thanks for checking out the video! That is a really good question and I do not have a confident answer for you. My gut tells me that it is for U.S. based tax payers, but I am not 100% sure if that is true or if there is no real clear definition on this. To me, the family leave tax credit is more applicable to U.S. based tax payers because it is directly associated to local schools & day care facilities closing down. Check with a licensed CPA for more clarification would be my suggestion. Hey though, I appreciate you taking the time to check out this video. Cheers!
@@Financial_Awareness thanks for replying and that would make sense! I will double-check with a CPA on this matter and update here if I find something. Thanks again for your informative video!
Carle L - Thanks for checking out the video. I am glad you're researching this and hope you can take advantage of these tax credits. Yeah, I did focus more on Sole Prop., 1099, and independent contractor for this video...and less on S-Corp self employed people. Please confirm this with your CPA, but the way I understand how these tax credits work for those who file as an S-Corp are as follows...the average daily revenue is a reflection of the 'qualified leave wages' earned and brought in...which for someone who is self employed and files as an S-Corp that would be the salary you pay yourself. Because your K-1 distributions aren't considered wages and are considered a distribution of profit from your business. Even though you and I know that you, as someone that is self employed, generated all that revenue yourself, but you are able to avoid additional taxes by having a decent portion of your revenue be distributed as profit as opposed to wages. So it's my understanding that you would divide your S-Corp salary that you pay yourself by 260 to arrive at your average daily revenue for the purpose of this calculation. You'll need to review your Form 941 as part of this process and here is a link to IRS website that can detail this info a little more... www.irs.gov/newsroom/how-to-claim-the-credits Sorry for the long response. Was that helpful?
I had my baby girl 04/13/2020 I was told to quarantine right after birth from my midwife and doctor as well as it being a government mandate here in New Orleans. My baby hasn’t been able to go to daycare even if I wanted her too. Do I qualify for staying home on family leave?
@AJFB FOXY - Hello! Thank you for taking the time to watch the video. As long as you have some Schedule C income that you can use for the calculation then in my eyes, yes, you would qualify. Congrats on your new baby! I’m so happy for you you. I’m planning a video regarding saving money for babies/college planning...hope you subscribe for future videos. Appreciate you. Cheers!
I was self emplyed in 2019 to march 2020. But started getting unemployment benefit on may 2020 on ward. I was caring for young boys while the school closed. Can I still get FFCRA benefits? Thanks , great content and subscribed.
@m cyber - You probably can, but with today being tax due date you would have already had to file or file an extension. So sorry to hear about that transition and hope things have improved for you since May 2020. Keep working at it, boss!
I just claimed my taxes only I didn't claim the sick leave tax credit. Should I amend my return. I was self employed and my job shut down to quarantine and also my son's school shut down.
@Chelsea Brown - You could amend. However, just know that amending your return can at times cost more time/money than actually filing your return...it’s a slow process and to my understanding has to be done via paper (as opposed to e-file). If you’re going to amend on your own then it’s worth it, but if you’re going to pay someone then you’ll have to compare the cost vs more amount you expect to get back and see if it’s worth your time/hassle.
Are we able to claim this credit if the Governor shut down our business as non-essential for a Month? Or only if we were sick? We had work, just weren’t allowed to. We didn’t get unemployment.
@babybagleys - The Sick Leave Credit has to do with you being sick yourself, you self quarantining yourself, OR if you had to care for another individual that was sick. The Family Leave Credit has nothing to do with being sick and is more about you needing to care for a dependent / your child and being unable to work or telework because of that. So, during the month that you were shut down, if you got sick or had to self quarantine because you thought you had come in contact with someone that was sick then it is possible for you to get the credit. As you can see...there is some grey area here. Hey, appreciate you taking the time to research this topic and watch the video...hope there are others on my channel that may be of interest to you. Thanks - cheers!
Can we get a link to some new content… a patreon… something! I have 2 CPAs in my family who, combined, didn’t give me the wealth of information you’ve provided.
@Ashley Williams - Oh my goodness thank you so much for that wonderful compliment! Very kind of you. As my life changed/pivoted I lost the amount of time I was able to dedicate per video and since then I’ve lost the motivation to begin a new video. I’m sooooo overdue it’s not even funny! Lol. At any rate, thank you for the kind remark. Karlton Dennis has some amazing tax videos and you should def check him out. He’s out in Cali and has several quality vids. Cheers!
@Fabiano Pina - Haven’t researched it yet, my gut says no though. I briefly combed through this document and believe there will no longer be any additional incentives for 2022 calendar/tax year. www.irs.gov/pub/taxpros/fs-2022-16.pdf
What if you have both income from a w2 job and self employment and your filing your taxes together would your net income be from both jobs or just the self employment income?
@Bishop slaughter - Nope. You would calculate your self employment income only. Here’s a link to IRS website where you can read more about the specifics... www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals Hope that helps! Thanks for checking out the video. Appreciate you.
Hi! I already filed my taxes with Turbo Tax. I tried E-Filing, but it did not let me since I was trying to file with 7202. I ended up removing the form, but now the more that I think about it, I really want this credit and believe that I deserve it. How would I go about claiming it or amending my taxes if the IRS has already accepted my return? They have not processed a return yet.
1 clarifying point, I earn W2 wages full time as well as 1099 income from freelance design work. My W2 employer basically shut down in April and May of 2020 (while still paying us). I also lost my 1099 income for those months. Am I eligible for this credit?
@Brian McGee - Hey man! Dang, terribly sorry to hear of the challenges of loosing the 1099 income for those months. Frustrating. In your comment you did not mention anything about being married or caring for a child...so based on that I can't say that you're eligible for the family leave credit because you have to have cared for someone in order to be considered for that 'up to' $10,000 credit. As far as the sick leave credit, if you had to self quarantine or qualify for the credit any other way then you could be eligible for it...since you already turned in your return for processing then yeah man you'll have to amend your return after the dust settles...which is a slow paper-based process...I've had to do it before...it requires significant patience. Lastly, you're only able to use your 1099 Schedule C income for the calculation of these credits - not your W-2...and you can use 2019's Schedule C line 31 OR your 2020 Schedule C line 31....whichever is higher is the one I'd use. Hope all that helps, boss! Appreciate you checking out the video. Cheers!
@@Financial_Awareness woops! Thans K., yes Married with 4 kids. Thanks for the wisdom, I'll keep watching your videos. Do you have any videos on the Crypto markets?
@@BrianMcGee - OHHHH...gotchya! Ok, then yes, you should definitely qualify if their schools were closed and y'all had to care for them. $10,000 credit - so in my opinion it would definitely be worth amending and trying to get for sure. Haven't dipped my toe into the Crypto world just yet. Everything is 20/20 in hindsight and probably should have speculated on BTC a while ago, but I currently don't have any positions open and am still researching/learning. Yeah, once I wrap my head around it more I'll make a video, but I don't want to provide any videos on a topic that I'm not comfortable with yet just to 'get another click' ...because many of those crypto videos are popular, but in my effort to be open/honest/genuine/authentic I'm just not ready to make a vid about it yet. If there's a way it can add to my wealth building goals then I'm excited to learn more about it. Appreciate you man! Cheers!
@Poe Thae - You can amend your return...it’s not as affordable as simply filing your return because it has to be a snail-mail paper amendment and it takes a while to get any funds refunded to you, but it is possible. I’ve had to amend two different tax returns in the past so I do have a little experience in that regard...so please set your expectations appropriately. Appreciate you taking the time to check out the video! Cheers!
@Sidney Williams - Hey, thanks for checking out the video! Please confirm this with a professional CPA in your area, but the way I understand it....you would use your wages/salary as the figure you divide by 260 to arrive at your average daily revenue. I say this because the money you distribute to yourself (to avoid super high self employment tax) is typically done through a K-1 distribution of profit....which is not taxed the same as wages earned. On one hand, this sucks because your 'reasonable wage' is not your full/real income, but on the other hand you're still getting some tax relief by filing as an S-Corp and not paying full self employment tax on all your revenue. That is how I understand it...does that make sense to you? Let me know if I'm off on my response at all or if you have more questions. Appreciate you....cheers!
@Dee Castillo - Sounds like it’s time to get 2020 taxes done! Since this is a tax credit it won’t impact your Schedule C figures...just your final amount owed in taxes. Appreciate you checking out the video...cheers boss!
@Nathalia J - Hi there! Thanks for checking out some of the videos…appreciate you taking the time to do that and hope you’ve found some value in a few. Sorry it’s a little confusing. Personally speaking, I’ve worked with a CPA for the past 16 years…and based only on my personal experience I find value in paying someone to help file my taxes for me. Although I am quite confident in my knowledge I still value the brainstorming sessions, education I receive each year, and them/their team filing my return so I don’t have to. So, that’s one route you could go if your budget allows for it. TurboTax is pretty good software, but I’m sure there are other software offerings out there for you to research.
@@Financial_Awareness thank you for ur reply, am I able to deduct transportation, car, commuting expenses when a housekeeper self employed? I had one regular client. Ty
@Nathalia J - Generically speaking, if you have business-related expenses then those expenses can be written off against the income generated from your business revenue. Look into making a quick and simple profit and loss statement and track all your expenses that you incur in order to generate your business income.
If your Accountant advised you not to take loss consecutively and you did, then he is scared to work for you. #taxladydc Thanks for the other info! 100
Is there any legit firm that can file for me. Based on what you just said I’m definitely eligible and my wife but we want to do it the right way. Any suggestions please
Hello, does a self employed without employees Qualify for this credit? I receive a 1099 and work by myself. I was sick 12/15/2020 and my whole family started to get sick after that. I had to take care of all of them. My wife stayed sick for a couple of months. I am confused by the words free tax USA is using when doing my taxes. Thank you.
Thank you for this information! I resigned my job in October 2020 due to my children’s school bn closed down. My employer did pay or offer the qualified family leave to me. Is this something that can still be claimed. Also, I have an LLC biz on the side established in 2020 but no income yet. Can I claim qualified leave family credit through it. Thank you so much for your response
@TEMI A - Hi! So sorry to hear you had to resign from your job. Hope you are ok and doing well to get by. If you don’t have any revenue from your self employer side hustle then you cannot use either of these credits. They are for employers or the self employed. If you did have a W-2 job where you received some sick and family leave income AND you did have side hustle 1099 income then your amount of tax credits for your side hustle income would be reduced by the amounts you’ve already received and the IRS has specific examples of this on their website...the IRS links in the description should take you to those pages and you can read them. However, as I said if you have no revenue from your 1099 side hustle then it is my understanding that you cannot get either of these tax credits. I’m super happy for you to dip your toe in the water and get established through your new business and hope that provides you with an awesome quality of life and enough revenue to be happy. Appreciate you taking the time to check out the video. Cheers boss lady!
@Blanca Villa Alva - Hi there! The images from the video and links in the description are to the IRS website for the USA tax laws and not for Canada. I’m sorry for the confusion if that wasn’t made clear.
2020 was my first year as a self employed individual. I received a 1099 and all daycares shutdown in my area as well so how will I able to claim this credit? As 2020 was my first year
@Tanya Rose - Hi there! Thank you for taking the time to watch the video. If you simply follow the steps outlined in the video you’ll understand how to calculate your credit and Form 7202. You’ll then submit Form 7202 with your tax return. Congrats on starting your new self employed business. Appreciate you. Cheers!
what about i just quarantine my self last week of january 2021.. i got sick for 2 weeks... i just self quarantine.. didnt go to doctor... got cold ,cough and fever.. im a uber driver.. it will show on my app that i didnt drive for 10 days.. then after that my wife got sick and she had covid leave at her job.... am i eligible for the paid sick tax credit...
@Edgar Adolfo - The dates for these tax credits run through March 31st, 2021...you should be able to include any eligible days within that period. Sorry to hear your wife fell ill...hope she and your family are doing better by now. Perhaps 2021 will be better than 2020! Appreciate you taking the time to check out the video. Thanks...cheers!
@Jason Jerome - My plan is to keep it short and simple. I'm going to list each specific date for which I was unable to work (or telework) for both the Sick Leave Tax Credit & another list of dates for the Family Leave Tax Credit. It's my understanding that you cannot use the same date for both sick & family leave credits - so in looking over your situation you'll need to analyze that on your own. I know it says "letter" and I mentioned letter in the video, but I am thinking it is more of a statement and then you'll have to note your answer to each of the 1-4 bulleted items that I mentioned in the video from the IRS website. Your CPA or TurboTax will help you with the correct form (I think I have links in the video description as well). I'm planning on using Microsoft Word or Excel as the document I'll be typing up. Hope that helps. Hey, appreciate you taking the time out of your day to watch the video. Thanks! Cheers.
I’ve done it twice. It can only be done manually (wet ink)…no e-file. …and I did it with the assistance of a CPA, which is what I would suggest to anyone considering amending a previous year’s return.
@Jim Ross - Hey Jim! Appreciate you taking the time to watch the video - thank you for that. Yes, you are correct I focused primarily on self employed people with Schedule C revenue in this video. It is my understanding that Schedule E revenue is not able to be used for the average daily revenue calculation. I've got a few thoughts...here you go... 1 - I'm not a CPA and consulting with one for your specific situation may be in your best interest. 2 - I personally have Schedule E income from 2019 as well and will not be using that for the purpose of calculating my average daily revenue...furthermore...it is my understanding that Schedule E is primarily used to report 'passive' income - for example rental income you receive because you own rental property or a royalty payment you receive...and Schedule C is used to report self employment business income where you earn wages (vs passive revenue). 3 - Here is a link I found directly to IRS website on this matter: www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals ...#62.... How is the "average daily self-employment income" for an eligible self-employed individual calculated? Average daily self-employment income is an amount equal to the net earnings from self-employment for the taxable year divided by 260. A taxpayer’s net earnings from self-employment are based on the gross income that he or she derives from the taxpayer’s trade or business minus ordinary and necessary trade or business expenses. 4 - If you are an employer with employees then there are other documents/steps you'll have to take and this particular video did not focus on that and was primarily focused on self employed individuals who file their taxes as sole prop/1099/independent contractors. ...long answer...hope some of that helps you!
@Deirdre Danna - Well, I do not know the specifics of your situation and can't help you with the limited information you mentioned. The video outlines everything pretty well...if you needed to care for your son due to his school closing and your self employment income makes you eligible for this tax credit then simply follow the information I mentioned in the video and work with your CPA/TurboTax (or wherever) and claim the credit. Hey, thanks for taking the time to watch the video - appreciate you and hope you're able to get this credit! Cheers!
@Sharonda Haywood - Hi! Yes you will!!!!!!!! $17,346 divided by 260 days is an average daily revenue of $67. $67 multiplied by 50 days (assuming you’re eligible) is a $3,350 tax credit for the Family Leave Tax Credit. Do the same calculation if you are eligible for the Sick Leave Tax Credit. The $52k and $132k figures I showed in the video are the amounts you have to make to get the FULL tax credit...you’ll get a partial credit for your Schedule C simply being less than those figures. 😃...go get your tax credit money, girl!!! Appreciate you for taking the time to watch the video! Would live for you to subscribe if you haven’t already. Thanks!
A lot of other tax preparers keep telling me that in order to claim this self-employment credit I would have to have W2 wages and Sel-Employment. Is this true? This is so confusing.
@Victoria Hunt - That seems quite odd to me. It’s possible they are not fully aware of the new legislation that was passed on Dec 27th. You do not need to send them this video, but please check out the description of this video...I put specific links directly to IRS website to try and prevent confusion. There is literal explanation from IRS that is specific to self employed people. Please check links, read them when you have time, and feel welcome to share the “special provisions for self employed” language with them. My information is directly from IRS website. I’m sorry you’re having a difficult time. Happy to answer questions - I’ll help where I can. Appreciate you taking the time to watch the...cheers!
@@Financial_Awareness I have several clients that are self-employed and I need to prepare their returns correctly. Do you have a 7202 worksheet/questionnaire that would help me help us both through this? I'm still confused. Thank you.
@Victoria Hunt - I’m happy to ask my CPA today if he has a worksheet/questionnaire, but until then this is the IRS link with the information I’ve used for the video. Specifically numbers 60-69... www.irs.gov/newsroom/special-issues-for-employees Will comment again once I hear back from my CPA. Hope this helps clarify a few things. Also, another subscriber commented in late Jan that Form 7202 was still in draft, do you know if that has been fixed by now? Thought I saw proper instructions for Form 7202 from a Google search.. www.irs.gov/pub/irs-pdf/i7202.pdf
@Lucia Smith - Hi! Thank you for checking out the video. ...really? Hmmm...that’s new news to me. My plans were to simply include it with my full 2020 tax return through my CPA - which gets e-filed each year. Interesting to hear of this because it is my understanding that you can file it electronically. I’ll respond back to this thread if I discover otherwise. Do have a link to IRS website that says you can’t file electronically? (Because I just read their instructions for form 7202 and doesn’t say it can’t be filed electronically.)
@Lucia Smith - just searched again...according to TurboTax website response - because IRS hasn’t finalized the form yet it can’t be filed just yet...that’s probably what you’re seeing. Which actually makes sense to me. Good on you for being on-the-ball to get your taxes done!
I always file through turbo tax before the irs accepts returns. At the end it says efile date of 2/4/21 but next to form 7202 it states cannot be filed electronically and only gives a date of 2/4/21 to mail. I'm praying that changes 🙏🏽
@Lucia Smith - Very nice & good on you! Yes, I’m hoping that changes soon as well. Thank you for taking the time to to watch the video - would to invite you to subscribe if you haven’t already. If there are other finance-related topics you’d like to see a video on please let me know. Appreciate you. Cheers!
i just did my taxes and you will get a message when you go to e file. you cannot e file if you use this tax credit. it says irs law dictates that you will have to mail your tax return because you claimed this credit.. now lets think about that. l know people right now that still have not gotten the 2019 refund yet because they mailed it. so you will have to make a choice whether to claim it and roll the dice on a timely refund or for get it and e file without it. oh yeah if you claim it you cannot go back and delete it. so you are stuck. i did a workaround. went over to h r block and did my taxes without it.
@John Russell - Thank you for sharing! I wasn’t aware you had to snail mail this in order to get it. Interesting. Guess I’ll be snail mailing this year...can’t remember the last time I did that. Again, thank you for sharing your experience to help set our expectations. Appreciate you, boss!
@wilmer barona - I haven’t confirmed this yet, but someone else commented that you’ll have to mail in your return in order to get these tax credits. Doesn’t exactly make sense to me, but that’s what someone else mentioned. ...and yes you’ll need proof - as mentioned in the video - the written statement / letter that I referenced.
@@Financial_Awareness OMG🤦♀️ 😟 I think I may have messed up. You stated that a statement/documentation needed to be filed with your 2020 taxes and I did not file a statement with my 2020 taxes. The software didn't ask for one so I didn't know I needed to file one..I hope this doesn't delay my refund because I'm in a bind right now 😟.
@Von W - Just play it by ear. Check out the video again and/or the IRS website links regarding “how to substantiate eligibility”....because essentially the IRS has told self employed individuals that they have to have some kind of letter/statement/documentation...I had presumed it needed to be turned in with your tax return, but if you were able to submit it electronically without it then maybe you’ll be ok and just keep it with your records and have one ready in case it’s needed. Did you do your taxes on your own or through a CPA?
So if I work ft and my kids school close for April 2020 to December 2020. Can I still get the credit due to staying home for them. Or does that only applies to self employed.
@Maritza Santiago - Hi! Thanks for checking out the video. It is my understanding that these tax credits are for small & mid-sized businesses that paid their employees sick pay and family leave pay due to covid-related reasons and there are special circumstances for those that are self employed - which is what this video focuses on. It is not my understanding that these credits are for full-time W-2 employees. I’m sorry to break that news to you. If you have interest in other financial planning videos I’ve got a few that may be of interest to you regarding taxes & retirement accounts...also, don’t forget about the dependent care child tax credit...if you spent any money on qualified child care or after school programs that would be a tax credit you would be eligible for each year if you have kids. Some of my tax-related videos discuss that topic as well. Hope you are doing ok and getting by through all this. Appreciate you. Cheers!
@jcman240 - I do agree there is some gray area around the Sick Leave Tax Credit where people can blur the lines, but the Family Leave one is pretty straight forward. Will be interesting to see what occupations would be considered 'unable to telework.' The one aspect of your remark that I would respectfully disagree with would be 'typical'....I don't think it was typical for the government to shutdown the economy and literally bring many business and self employed people to a halt...so, yeah, it is a 'government handout' and giveaway, but it's at least one way for people to be made whole (or at least get a little money back) from the financial hardships of 2020. Just my opinion...and I highly respect your opinion as a CPA - so thank you for checking out the video and commenting. Appreciate you, boss! Cheers!
@@jcman240 - Gotchya! Understood. My pleasure man. Appreciate you & your profession...I love the chats I have with my CPA - I usually learn something new each year. I'm sure you'll be busy over the next few months...grind mode!
You may be providing false information. Im being told if you have a loss this year you dont qualify for this credit.. and I didn't have a loss last year
@Andrea Moore - Thank you so much for checking out this video! I appreciate you for that as well as for the accountability you mentioned to make sure I'm accurate in my videos. Although I'm not perfect and may make mistakes from time to time, your comment isn't correct and you are allowed to use 2019 Schedule C OR 2020 Schedule C. If you do show a loss on your Schedule C then you are correct - you will not get these credits. Not sure if the IRS website has been updated to reflect this, but here is the link I left for another person that commented something similar...it's from the Senate Committee on Finance...please scroll down to section 17... www.finance.senate.gov/imo/media/doc/Tax,%2012-21-20,%20Section%20by%20Section%20COVID-Related%20Tax%20Relief%20Act%20of%202020.pdf Thank you for holding me accountable. When I make an inaccurate statement in a video I usually attempt to correct it while editing the video, by placing a new pinned comment, or by updating the description. Does this help address your concerns? Appreciate you! Cheers!
@Andrea Moore - Also, I just looked up the IRS website and it was JUST UPDATED today, January 28th... www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals ...scroll down to section #63 and read the last sentence. Thanks!
@@andreamoore806 - Same link I just sent you...section 60...2nd paragraph reads as follows... "Eligible self-employed individuals are allowed an income tax credit to offset their federal self-employment tax for any taxable year equal to their “qualified sick leave equivalent amount” or “qualified family leave equivalent amount.” ...this credit can ONLY be used to offset your federal Self Employment Tax that you owe from generating a profit...if you are showing a loss...you owe no tax and there's nothing to offset. However, if you have a positive Schedule C line 31 from 2019 then you can use that for your Average Daily Revenue calculation. Does that help clarify this for you?
@@andreamoore806 - Hi! Just checking back in because you didn't respond to my last message. Did that help clear it up for you? If not, how else may I help?
@ali ali - Help me understand this IRS FAQ sheet: www.irs.gov/pub/newsroom/fs-2022-15.pdf Scroll down to section 106 where it discusses self employed people. I have a schedule C and many self employed people also have a schedule C…which self employed people aren’t allowed? I read the rules buddy, but do appreciate you checking out the video and commenting - holding me accountable. Thank you!
@manaherb - Weird because I record in 4k on my iPhone 12 Pro...video and audio both record to my phone at the same time (not separately). When I edit the video clips the audio is edited in sync. I’ll have to re-watch this one and see what happened. If you’re listening to the video while driving and listening over Bluetooth then there could be a slight delay between video & audio on that end. Sorry for the inconvenience...I’ll work to make it better. Appreciate you for the feedback!
Just re-watched the first few minutes while wearing my Bose headphones...and I don’t hear/see any out of sync parts. So weird - I’m sorry if something is throwing you off.
(IRS UPDATED their website effective January 28th...see description for link confirming that you can use 2019 OR 2020 Schedule C)
Hope you're able to take advantage of these self employed tax credits! You might also like...
10 Self Employed Tax Deductions & Credits for 2020: ua-cam.com/video/xz3N9wXPcxc/v-deo.html
Roth vs Trad. IRA (for ALL incomes UNDER $125k): ua-cam.com/video/ATvyAf501lU/v-deo.html
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What if your business in 2019 was only in business for the last 6 months of 2019. Would you still divide your revenue from line 31 by 260 to come up with the average daily revenue? Or would we divide line 31 by 130? Thank you
@@davidgalvan7239 - You would still divide by 260. Good job researching this topic by watching the video...appreciate you, David! Cheers boss!
Hello and thx fir videos , May I Claim this ? I’m 1099 Nec , son turned 14 in nov 2020 , school virtual learning since March 15 2020 , school might open April 2021 , hoping. May I Claim the whole 260 days ?? Considering Thanksgiving break and Christmas break , or Just claim 260 days ? 😘Thk you sir!
@MF 777 - Hello! The 260 day number is fixed and only needed in the calculation of your average daily revenue for these calculations. I’m not sure how the virtual learning component will play a factor into your family/sick leave credits...were there any days over the summer that they weren’t in school / day care for you to be able to use? The sick leave is only 10 days and they do not need to be consecutive...same with family leave - it’s up to 50 days and they don’t have to be consecutive. Probably a good idea to claim these credits using different days - meaning not counting the sick days and family leave days on the same day. Hope that helps! Thanks for checking out the video and learning about this topic. Cheers!
Your channel deserves so much more attention, I’m a huge tax nerd and you know what you’re talking about. More importantly you know how to explain it 😂😂
@Unorthodox Savings - Thanks Joe! Really appreciate the kind words man...yeah I’m hoping more people watch your channel or mine and become financially aware of their decisions/actions/behaviors and taxes play a huge role in that. My grandfather moved to America after leaving Germany and he joined the Army to become a citizen...he then started as a laborer for a pool construction company and eventually started his own pool construction company. My mother was the first to be born in America and as a young man, I remember my grandfather asking everyone at dinner (restaurant) if they “wanted to build a pool”...and I never knew why. Now as an adult it makes complete sense...because of the meal tax write off. Lol. ...sadly though, he passed away many years ago and his legacy was his family (which we are incredibly grateful). My three brothers and I have learned from his experience and are all on track to retire comfortably and with goals of leaving a financial legacy for generations to come. So that’s part of what inspires me with each contribution and dollar saved. (Sorry for the long story! Ha!). Appreciate you man. 👊🏻👊🏻
@@Financial_Awareness
Love the story !! My is almost the same. Grandfather moved from Germany opened a automotive radiator shop and passed down the knowledge to all of us.... In southern Arkansas all us Markle's are known as radiator men.... Unfortunately I'm horrible at doing things like taxes and wen to one of the only tax people in our small town and told them kinda what you said in your video about the 7202 ( I think that's the number ) and they acted like they never heard of it.... what would you suggest I do ? Or do you know anyone trustworthy that would be interested and capable of doing them and able to get me the most out of my tax return? I am head of house hold self employed and claim my 6yr old daughter and her mother as dependents. also this tax season will have pandemic unemployment taxes on it also...
thanks again for the videos!!
@@danielmarkle8823 - Mr. Radiator Man!!! Love it. Yeah, my brothers and I are very grateful for the family legacy we carry on. Hey, no worries about taxes...you've found my channel now and clearly are comfortable searching UA-cam to gain more knowledge...so good job and I encourage you to continue that learning path you're on....your comfort will grow with time, each video watched, and each tax season. The more you know the better you'll feel and the more confident you'll become.
Yes, you will have to pay taxes on that PUA income - so hope you didn't spend all of it and carved some out for taxes...or at least can get some tax credit assistance through these two tax credits. My girls are around the same age as your daughter...at 6 years old I imagine she's in Kindergarten or 1st grade and likely her school shut down as I mentioned in the video...so at a minimum I suspect you'll be getting that tax credit. Sorry to hear your local tax person isn't up to date with new legislation and keeping up with the new events/changes for this tax season...bummer. You can either work with them if they are the only one in your area or try an online tax filing service - there are many. Most of the online ones walk you through several steps to help you maximize your return. I am not a licensed CPA - I was simply a Financial Advisor for 8+ years, Finance/Real Estate double major at college, and am a Tax-Nerd for stuff like this. You're welcome to check out some of the links in the videos if you'd like to chat - I intentionally don't mention them in the videos because I feel like I've been in sales for the past 15+ years and the last thing I want is to come across as salesy in the videos, but I am available for those interested. You should edit your comment and delete your email address (in my opinion)...I've always taken my clients' privacy very seriously and I wouldn't want my personal email floating around like that.
Anyway, I appreciate you boss! Cheers!
my lord man. I'm a CPA. I'm so blown away on how factual and accurate you are because these other youtubers have no idea what they are talking about.
@Bushwick Polymath - Oh thanks so much! You know, I'm certainly NOT PERFECT by any stretch of the imagination. Literally just today I responded to a comment where I made an error in the video. Yikes! However, I like to think my videos are at least 'good enough' for an average person to learn something from them...then go ask a professional CPA like yourself about the specifics and "how does this video apply to me" kinda thing. At any rate though, I really appreciate you making your comment and sharing the love...thank you! Cheers boss!
I'm so glad I discovered your channel and really enjoy your presentation on financial topics. Thanks for digging into this topic, as it is pretty detail intensive, and have saved it, as I'll need to reference it a few more times. I would love it if you did a video on 529 vs Coverdell and some tax/retirement strategies if you're filing with both W2 and 1099. Thanks and keep it up!
@Larry's K- Cup PODcast - Holy smokes that is so kind of you to say - thank you for putting a smile on my face! Appreciate you taking the time to learn more about your personal finances and tax strategies...wish more people could follow in your footsteps. Yes, I'd be happy to put together a video about the different ways to do college planning and will have some follow up tax/retirement strategies. I've already got a few in both those categories and just re-organized my videos as you scroll on a mobile device or from the 'home' page from the channel. I try to do a mixture of time-sensitive videos and other helpful ones as well. Appreciate you, sir!
Wow! I had no idea these credits were available to me. Great info, great content.
@Charles Scott - Thanks man! Yeah, we need to get the word out...please feel welcome to share the video with any of your other self employed friends...we could all use a few extra bucks in our pockets these days. Appreciate you, boss!
Can you elaborate on what qualifies one for the family leave tax credit? Are you able to expand on this more? Maybe give some additional examples or scenarios of how you can qualify? Would my kids have had to be attending school full-time prior? Would the work that I do at home as an independent contractor have to come to a complete halt while taking care of the kids in order to qualify? Seems like there are some gray areas. I'm just trying to know more definitively if this applies to me or not?? Thanks!
@Kris Dorner - Sure man...I'll give it my best shot...here you go...
Can you elaborate on what qualifies one for the family leave tax credit? Yes.
Are you able to expand on this more? Sure.
Maybe give some additional examples or scenarios of how you can qualify? Everyone's situation is different...this video and the knowledge shared is geared towards those that are self employed - so this would only apply to those that own a small business or generate their income/revenue from being self employed...which could be neither spouse, one spouse, or both spouses...and it would only apply to that spouse's income....my wife is W-2 and I'm self employed...so for us this can only be used to offset the tax burden created from my self employment income and not my wife's W-2 income.
Would my kids have had to be attending school full-time prior? No. Doesn't matter if they were part time or full time in school...if their school shut down or if their daycare facility closed AND you had to provide care for the kids (instead of being able to work/telework) then this applies to you.
Would the work that I do at home as an independent contractor have to come to a complete halt while taking care of the kids in order to qualify? 'Complete halt' - no - but you likely generated less revenue...and the 10 days (sick leave)...and the 50 days (family leave) DO NOT have to be consecutive...so take the time to look over your calendar to see when each of these apply based on the date time frames shared in the video of April 1st 2020 - March 31st 2021. In my personal situation the schools had their normal Spring Break and then never opened up the school again for weeks...then they did virtual learning...and the day care we send them to for summer time camps was closed and we did not have much choice other than to keep them home all summer...thus preventing me from working or being able to telework for many days (again - doesn't have to be consecutive)...so look at what days those were for you (if any) and follow the formula to calculate the tax credit.
Seems like there are some gray areas - yes, there are some gray areas. Best course of action is to do what you're doing...watch videos, read articles, research, learn...and work with a CPA to make sure you are following within the letter of the law.
Hope my response was somewhat helpful...I don't always have the time for longer responses like this (sorry for the week long delay) so if you like please feel welcome to schedule a call and we could knock out some questions in 10 or 15 minutes. Lots of good info out there though already and a quality CPA will help guide you as well...I'm happy to help if I can. Appreciate you checking out the video/channel and hope some of my other videos have not been a waste of your time. Cheers, boss!
Thanks, I learned so much from your videos. You just got a new subscriber!
@Aloha!Mia - Oh that is so great to hear! Thank you so much for sharing your thoughts... I appreciate you! Cheers! 😃👍🏻👍🏻
Hi 😊 , thanks for your oh so informative videos. So i had regular W2 wages in 2020 and very little self employed income , 2019 i did have self employed income with a 1009misc. I plan on claiming the 7202 with my 2019 self employed income, as per the rules this sounds like i qualify , just making sure i dont miss out on any credits this year.
@K SAUREZ - Sounds like you've got it all dialed in! I'm sure many folks will be using 2019 figures over 2020 for these calculations. Appreciate you checking out the video! Cheers!
thank you for your research. can provide an simple of a complete 7202form for example for me to see. I know u filled it out the right way. thanks for your help
@Ludrose Lafrance - Hey, my pleasure!
Wow! Really appreciate the vote of confidence you place in me. I take that as a compliment. Although I do plan to accurately look Form 7202 over thoroughly, my CPA will be doing mine. Additionally, due to several factors, we usually don’t file our tax return until early April...so I am actually still gathering my docs and getting organized at this point.
That said, here is a link directly to IRS website regarding the instructions for Form 7202...
www.irs.gov/pub/irs-dft/i7202--dft.pdf
That form gives some samples and examples and answers some questions you may have. Hope that is helpful!
Thank you so much, this is the most thorough and clear explanation out there. Are these credits refundable?
@Tammy Segarra - Thank you very much for sharing your kind feedback. Yes ma’am they are. Appreciate you. Cheers!
You sir, are a hero 🙌🏼 appreciate the detailed information
@ACO 7 - It’s my pleasure, boss! Glad you appreciate the video...thank you for taking the time out of your busy day to watch. I’ve got another one planned to be published either later today or tomorrow. Similar topic - Self Employed Taxes...just a tax-tip type video. Hope you subscribed...thanks...cheers!
What is the deadline to file this?
Hi thank you for the information - but I am a little confused. I thought we were supposed to only use 2020 Sch C. SO based on your video we can use either 2019 or 2020? I couldn't find anything directly on IRS that states that. Just want to make sure I am doing this correctly
@CER Financial Services - Hi! Thank you for taking the time out of your busy schedule to watch the video. It is my understanding that the IRS website will be updated soon to reflect many of the changes/updates that happened on Dec 27th. Pretty sure I did see something in the IRS website regarding this 2019 vs 2020 Schedule C question, but I can’t seem to find it from my iPhone at the moment....sooo...this link directly to Senate Committee on Finance document will have to suffice until IRS website is updated...
www.finance.senate.gov/imo/media/doc/Tax,%2012-21-20,%20Section%20by%20Section%20COVID-Related%20Tax%20Relief%20Act%20of%202020.pdf
Sec 17 should address this concern for you. Please subscribe if you haven’t already - would love to have you around the channel! Appreciate you. Cheers!
So you can use 2019 sch c but form 7202 on 2020,, or would you amend 2019 and add form 7202? Thank uuu❤❤❤❤ im tryna get this done like yesterday💯💯💯🔥🔥
i have been trying to populate the 7202 and are confused as to what part of the form pertains to me and my grandchildren, i meet all of the qualification for both credits and not only was i self quarantined but my grandchildren were all sick at different times of the year between 20 and 21 i missed the deadline for 20 so my question is where it askes for self employment income for 21 do i fill out all parts of the 7202 or just page two and where do i insert my net earnings
Hey I just want to make sure I'm claiming this correctly.
I claimed the 50 days max because my kids school closed, we did virtual, and I was unable to conduct my self employed business for multiple months well over 50 days. I also got unemployment during this time. Would I be able to claim the credit with unemployment?
I also used my 2019 earned income amount since 2020 was so small.
Does all this sound legit? Because my refund is so much more than its ever been lol.
@Jessica Durham - Sounds legit to me. I’m so sorry you had to make all those sacrifices to get by...many life lessons we all learned through those challenges we faced. Yes, you can claim this tax credit even though you received unemployment benefits. I’m thrilled to hear your refund will be more than you expected. Awesome! Map out a plan and use those dollars wisely. Appreciate you for taking the time to watch the video...hope you subscribed for future vids! Thanks...cheers!
Others have said if we're self employed and received pua during the period, we cannot claim the family leave credit ?🤔 confusing...
@Nathalia J - Sorry it’s so confusing! Ugh, frustrating I’m sure. My best suggestion would be to speak with a CPA. It’ll cost a little money, but if you ask a ton of questions, take notes, and learn as much as you can then it’ll help you with this return, future returns, and also how you can structure your business expenses and other business transactions moving forward.
Can you use this credit even if you elect to use the look back credit from a previous year?
@Destani Fields - Yes, you are allowed to use 2019 OR 2020 revenue to get these tax credits. Thanks for checking out the video...appreciate you! Cheers!
Hi K. Scholl, so to make sure it is correct to claim this credit even if you worked part of the year and collect unemployment? Also, what about if you did not work at all just collected unemployment the entire time? of course using 2019 Schedule C.
Thank You!!
@Tiffany Pina - Hi! Thank you for investing in your own knowledge by watching this video - good on you! Yeah, so the legislation that was passed on Dec. 27th, 2020 that extended these tax credits also mentioned being able to use 2020 OR 2019 revenues from your Schedule C...if there is one thing we can be grateful for that the law makers got right - it was recognizing that many people’s 2020 revenue amounts were obviously going to be less than 2019’s numbers due to everything that happened. So, yes, you can use your 2019 Schedule C (as am I). You will have to pay taxes on your unemployment income, but that is separate from your Schedule C earned income which is used to calculate your Avg Daily Revenue for these tax credits. Please feel welcome to confirm with your local CPA. Would love for you to subscribe if you haven’t already. Thanks! Appreciate you. Cheers!
Thanks so much! This video is very helpful.
@Linda Lopez - Well thank you very much! Appreciate you. Cheers boss lady! 👍🏻👍🏻
Thank you man! this video is worthy!
@billy kelly - Thanks boss! I hope we can put some money back into the pockets of all the self employed people that qualify for these tax credits....PLEASE SHARE with any other self employed buddy or FB groups you’re in...a rising tide lifts all boats. Appreciate you! Cheers!
Thank you for making this very informative video and thank you for replying to all the comments. My question is, I don’t understand how people qualify for this tax credit, if we were receiving PUA unemployment from March 2020 to March 2021 as self employed, because we were not working at all. Can you please explain more on this? For example while I was on PUA last year I came in contact to a friend of mine right after 1 day he got his positive corona result, and ended up spending the whole day with him, because he did not tell me about his diagnosis. And he ended up telling me the next day. After that I was doing my best to quarantine myself from my family for the next two weeks. So how can this scenario connect with form 7202 qualification requirement? Thanks.
@Minasse Kebede - Thank you so much for your kind words & I'm glad you found value in the video. I do truly enjoy responding to comments/questions and helping out where I can.
By law, you do have to pay taxes on PUA on your 2020 tax return. However, PUA income is not the same as generating revenue as a self employed individual. Not all, but most self employed individuals are sole proprietors/independent contractors...and the net business income you generate can be found on EITHER your 2019 Schedule C OR your 2020 Schedule C (line 31). Based on the legislation that was passed on December 27th, you can use your 2020 Schedule C or your 2019 Schedule C to calculate your Average Daily Revenue in order to find how much of these tax credits you qualify for.
Regarding your situation and how you substantiate your eligibility (how you prove that you should get one of these tax credits) you have to follow the steps I outlined in the video. Click this link here and read sections 60 - 69, but specifically section #68...
www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals
You'll then click this link (also found within section #68 from the link above)...
www.irs.gov/newsroom/how-should-an-employer-substantiate-eligibility-for-tax-credits-for-qualified-leave-wages
From the way I read these instructions, as a self employed person with no employees, you'll have to write a letter to yourself answering questions #1-4 from that link. That statement/documentation will likely need to be filed with your 2020 tax return. In your situation, since you were self quarantining from exposure to a person that tested positive, then I presume those two weeks are the weeks you'll note as when you were self quarantining. If you saw a healthcare professional then you'll note them on your documentation. If not, then my rhetorical question back to you is....which city/county/state/federal governmental agency instructed you to self-quarantine in the event you had to due to being exposed? I could be wrong here, but I thought nearly every municipality was telling people to "stay home" and not work unless you were an essential worker. A CPA in your area can confirm/qualify my remarks, but that is my understanding of the situation. (that's my CYA response - lol).
Wow, ok, super long response to your question...was that at all helpful? Appreciate you.
@@Financial_Awareness WOW, thank you so much for such a detailed reply, you are the best adviser on UA-cam. I will for sure subscribe to your channel, so much value, stay blessed!
@Minasse Kebede - My pleasure! Happy to help you get a few extra bucks in your pocket hopefully. If you have any other self employed friends or groups you’re in...please feel welcome to share any of my self employed-related videos with them...the more folks that are aware the more money we will have to help us get by during these challenging times. Appreciate you!
So that means PUA doesn’t affect your e legibility ?
@Josefina Medina Vega - You will have to pay taxes on your PUA income, but no it does not impact your eligibility to get PPP funds. Additionally, the SBA has stated you do not need a good credit score in order to get a forgivable PPP loan...so if your lender requires it, just know you don’t need that in order to get PPP and that you should perhaps consider a different lender. Hope that helps! I don’t have all the answers, but feel welcome to scroll through other comments to see my replies or feel welcome to comment and ask - I’ll help if I can.
This is very helpful, thank you for your time and effort! Are we able to claim both the tax credit and sick leave credit? Additionally, my 2020 income was much higher due to a long term project completion. Can/Should I use my line 31 from 2020 to reflect my daily wage as it will be about double what 2019 was? Thanks for your help!
@Amber Wood - Hello! Thank you for taking the time to watch the video. Yes, as long as you qualify for both you can claim both. Yes, if your 2020 Schedule C is bigger than 2019 then I would use that one for sure! Please share the video and spread the word...every self employed individual needs to be aware of these two tax credits...the more money we can get into our pockets the easier we can all get through these financially challenging times. Appreciate you! Hope you subscribed for future vids! Cheers!
@@Financial_Awareness Fantastic! Thank you, yes I will definitely share. I am glad I found your channel! High quality information and a great smile :)
@Amber Wood - Awe...thank you! ☺️ If you have any finance-related questions you’d like to watch a video of please feel welcome to share. I’ve got quite a few ideas lined up, but am happy to adapt my content calendar if there’s something you’d like to see. Thanks!
Hey there. Just seeing if you are able to claim additional sick and family leave days for your 2021 taxes if you already claimed 10 sick days and 50 family leave days on your 2020 taxes?
@Robin Florance - Check out this link directly to IRS website:
www.irs.gov/newsroom/paid-sick-and-family-leave-credit-2020-vs-2021-comparison-chart
If you're eligible, then yes, but please confirm with a CPA for your specific situation. Hey, thanks for taking the time to check out this video...hope between this one and a few others that you're able to find some good financial nuggets. Cheers!
So if I didn't file a 7202 originally in my taxes and I'm claiming this tax credit now, do I still need to provide the IRS with proof "substantiate eligibility", the documents or written forms, along with the amended return 1040X?
Thanks once again for some killer info!
@rudestrudedog - My pleasure! Appreciate you. Cheers!
I’m using my 2019 taxes because I was on unemployment most of the year. Can I use this 7202 credit if I collected unemployment this year?
@Carly Crane - Yes you can. Thanks for checking out the video...appreciate you. Cheers!
What if I began a self employed job at a private practice in 2020 but did not do self employment in 2019? I’m trying to file on turbo tax and it keeps asking for 2019 SE forms
@Alex & Stanley Demosthene
- Hey, thanks for checking out the video! I'm thankful you took the time to do that. You're able to use 2019 figures OR 2020. I'm not sure why it's asking for 2019 SE forms. Here is the link directly to IRS website that speaks specifically about this topic...
www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals
Hope that helps! Personally speaking, despite my confidence in the tax/accounting knowledge I have, I have found value in working with a CPA each year for the past 10+ years. If your situation isn't complicated then TurboTax is awesome and easy, but there may be value in working with someone in your area if you can't get this worked out through TurboTax. Also, I've got a few videos regarding Roth vs Trad and Solo 401k vs SEP IRA that you may be interested in watching...take a look if you have time! Appreciate you. Cheers!
@@Financial_Awareness If I may, after reading Form 7202 instructions (pg 3, Line 26 www.irs.gov/pub/irs-pdf/i7202.pdf), I'm seeing the IRS wants to use Schedule SE (self-employment tax) Line 6 for the Net Income. I'm seeing tax software companies are asking for the Schedule SE and the total number of days for Sick Leave and Family Leave to calculate this credit. Hope this helps!
Correct. I believe in the video I mentioned using Schedule C figures, but you are correct…after I completed my return I realized these are actually based on Form SE figures. Thanks!
Hello there! thank you the great video...quick question for you. As per the IRS web-site, it states that only some self-employed individual qualify for this tax credit - "an individual who regularly carries on any trade or business within the meaning of section 1402 code". I am a full time rideshare driver, do I qualify? I was not able to work for two weeks since I had COVID-19, I also have all the paperwork to prove it....thanks in advance.
@Ridesharing with JC - You'll def want to consult with a CPA to confirm. I myself was disappointed that I did not get a larger tax credit for each of these. From what you've shared I believe you qualify for these tax credits. Thanks for checking out the video and channel...cheers!
So if you have a Schedule C for 2020 & 2021 and both years have a loss, you do not qualify?
Thank you for the very informative video! So quick question if u don’t mind. If I were caring for a child that was quarantined multiple times from august-December of 2020 can those sick leave days be split up for I was just missing one day a week each time? So 2 days each time she was Quarantined I had to stay home with her and the other days dad did. This happened 3 separate times so 6 days total but different weeks and months. Hope that wasn’t to confusing.
@Stephanie Bollier - Not confusing at all. Great news, nope...they don’t need to be consecutive days and yes you can list up to 10 days. There is, however, a different maximum amount allowed depending on if you were self-quarantining yourself OR if you were caring for someone else. If you’re quarantined yourself the daily max is $511, but if you’re caring for another person I believe it is a $200/day max....which is the same daily max for the family leave credit. Cant claim sick leave credit & family leave credit for the same day.
So, for example, my daughters’ school closed and I had to care for them basically from last April 1st until they started school back up in Aug...so I’ll be looking over which 50 days I claim for family leave credit...I’ll also be claiming the sick leave credit, but the max for that is only 10 days and they have to be a different 10 days than the ones claimed for family leave credit. Hope that example helps.
Hey, thanks for taking the time to check out the video...appreciate you. Cheers!
@@Financial_Awareness thanks for the quick replay and the great info!
How do you prove to them that you were out them days foe sick leave? Like what kind of documentation would they ask for?
@Shaun - From the research I did on the IRS website, I believe there is supposed to be a letter that you write documenting the specific days you were out or had to take care of someone that was out...and then you simply retain that documentation with your return - doesn't have to be turned in to IRS, just retained as documentation. If you saw a doctor - save those records. If schools were closed down - save those records/announcements. Doing a combo of all that should suffice IMO. A CPA could confirm any of the above, but that is my understanding.
IRS Link...scroll down to #122: www.irs.gov/newsroom/tax-credits-for-paid-leave-under-the-american-rescue-plan-act-of-2021-specific-provisions-related-to-self-employed-individuals#substantiate_eligibility
Hope that helps! Thanks for checking out this video and being part of the channel. Cheers!
@@Financial_Awareness Thanks man! I appreciate it!
In 2019, I made $7,000 (for the entire year) with my business as I was just starting out... I filed $7,000 gross income on my 2019 taxes. From January 2020 to March 1, 2020 I grossed $12,500, business was starting to progress, and then covid happened and shut everything down and I had to file unemployment as a independent contractor/gig worker cause the businesses I had contracts with closed down. So from March 2020 to December 2020... I was on unemployment, but within that time frame I had covid, then I got over it... and my sister had it, and I had to care for her. I haven't filed taxes yet for 2020 or 2021 I was going to do so next week, and someone was telling me about this credit, that I didn't know about. My question would I still be able to file for this credit only making little money? and had collected unemployment?
Can this credit be claim if I am self employ and have employees?, Also do members of an LLC qualify for this or is just for Schedule C on your taxes
@DRAKE - First answer - yes...my video speaks more toward educating the self employed, but yes you can claim it if you are a small business owner. Second question answer - anyone that owns a business could be eligible for this tax credit...if you have multiple members that own a single LLC then I would advise that you work with a CPA to get the correct figures, but I believe the number each member would qualify for would be directly correlated to the income they received from the business. Hey, thanks for taking the time to watch the video. Appreciate you. Cheers!
@@Financial_Awareness no thank you for taking time to answer me I was a bit confuse about this, as for the proof just writing a letter explaining why I quarantine my self would suffy or do I need some healt provider, because I just did it by myself because a client told me he might have been sick so I close for 2 weeks
@@drake3934 - Yeah, my pleasure. TBH, I think this is the grey area in the sick leave tax credit. The Family leave - pretty straight forward with schools and daycares shutting down across the country nearly. The Sick Leave credit seems a little open to interpretation. The way I read into it is....if your local city/county/state/municipality told you to stay home if you're experiencing symptoms and to 'self quarantine for two weeks' then I think you can just list your municipality as the governing body that told you to stay home...which in theory should suffice. The, of course if people actually saw a healthcare provider then you would list them in your statement/letter that would go along with this document & your tax return. Just my opinion, but that's how I'm reading into it. Hey, thanks for checking out the channel...hope there are a few more videos that you find helpful. Cheers boss!
@@Financial_Awareness thank you this is a great suggestion
My question is do you have to be filing EIC for the kids that you claim you are using 7202 form for. My kids were out of school from April 12-Dec of 2020. I do not carry them on my taxes i file only myself head of household
@Real Tee Marie - To answer your question - no. The EIC and these two credits I discuss in the video are separate credits. It is my understanding that you do not have to file EIC in order to receive the credits on Form 7202. All that said though, if you are not claiming your kids on your return then my best/honest reaction is for you to work with a licensed CPA for your unique & personal situation (or TurboTax or online if you’re comfortable)...because of the fact that you do not claim your kids in your tax return I am not sure how that would impact your eligibility for these tax credits. Here is the IRS link to the instructions for Form 7202...
www.irs.gov/pub/irs-pdf/i7202.pdf
...look at bottom right hand corner of second page. It only mentions “son or daughter” and nothing about whether or not you actually have to claim your kids on your return. I am not a licensed CPA and my only goal is to help & try to set your expectations. Sorry for not being confident, but I just am trying to help point you in the right direction. Was that at all helpful or did I confuse you more? Appreciate you reaching out. Cheers!
Thanks for a quick response i normally file by myself but may seek a professional service this year to maximize my credits
@Real Tee Marie - That’s awesome you file on your own - love that! But yeah, in my personal experience a CPA will pay for their fee by providing more value than they cost. If your return isn’t terribly complicated I presume it wouldn’t cost more than $200-$300 (or less maybe depending on your part of the country). When you do hire someone...ask a ton of questions so you get the most bang for your buck and perhaps you can apply the knowledge gained to future year’s tax returns when you file on your own again. So go to that meeting prepared to take notes and with questions ready to ask. Keep up the great work as your financial planning journey evolved! Appreciate you. 👍🏻👍🏻
I am curious if there was an update for 2021? I don’t see it here, but could be missing it. Thanks!
Good afternoon. Why questions is . If a person reports self employment in 2019 and had a net earning on SCH C . But in 2020 did not have self employment income due to pandemic COVID. Can the person file 7202 and only used net earning from 2019. The person only had unemployment. Can they still apply for the credit on 7202.
@Merly Sepulveda - Please double check my response with a professional CPA, but I believe you can still file for these credits (assuming you are eligible based on their definitions). The legislation passed in December allowed you to use 2019 or 2020 Schedule C to calculate your credit. Hey, thanks for taking the time out of your day to watch the video. I might have other videos that you may be interested to watch...appreciate you. Cheers!
You would have been eligible, had you been an employee of an employer (other than yourself), to receive qualified sick leave wages under the Emergency Paid Sick Leave Act or qualified family leave wages under the Emergency Family and Medical Leave Expansion Act.
@ali ali - check this out and scroll down to section 106 where it literally discusses how self employed individuals are eligible…
www.irs.gov/pub/newsroom/fs-2022-15.pdf
Hi beautifully spoken and understandable I love it! I really feel like most people don't even know about this smh. But what if I am a person filling on turbo tax? How do I claim this sick leave? Is it an option in turbo tax about it ? How does that process work?? My children left school last year and are now forced to be home schooled. I have two children and I would like to file for it ? Should I be printing out that form? Or like how does it work?
@Mdot theartist - Hello & thank you for the complement. I'm glad you found the video, are aware of the tax credits, and are researching by watching YT vids...good job! Personally, I haven't filed with TurboTax in a very long time...so I do not have a definitive answer for you on that. However, Intuit (who owns TurboTax) is a very smart company and I would be shocked if they did not allow you to get these credits by e-filing...there should be an option for you to select or a box to check....I'll have to look into that somehow. Regarding your other questions of how to claim it - I go over those in the video and also have links to IRS website in description of the video. The tax credits are tied to your self employment income...so I imagine the TurboTax process would follow the normal protocols of someone filing a tax return that has self employment income.
@@Financial_Awareness awesome u are a perfect human being. I appreciate you.
@@mdottheartist558 - Whaaaaat 'perfect' ??? lol...I'll have to share this with my wife this evening - she'll have an opinion on that subject for sure. Hahaha! Thank you :)
@@Financial_Awareness Hi, I just tried to file with turbo tax. It seems to say unable to efile. Or perhaps it will be available on later date. Do you happen to know any software that enable efile for 7202? thanks
@@UwUPLAYZ. - Hi Stanley! Another subscriber and I were discussing this the other day. She mentioned to me that once the Form 7202 is no longer in "draft" form it should be available for e-file. So, my suggestion would be to simply check on it for a few more days...now that we are a few days into February I presume it would be finally updated soon so you and others can begin to file their taxes. Good job though because you are ON IT and getting this done asap....soooo great job being organized and filing as soon as possible. Appreciate you. Cheers!
Where is the loan status now of 7202.
Can you qualify if you filed a w2 witb schedule c ?
So you have to file by mail to receive this credit? Correct?
@Kelsey Pruitt - Hi, Kelsey! Thanks for checking out this video and researching the topic. Good job! No, it is my understanding that you can still e-file and receive this credit. However, if the Form 7202 is still in it's 'draft version' then you might not be able to finish your return until the IRS finishes Form 7202. I haven't checked, but I did hear other people had their tax returns already completed and were simply waiting on this form to submit and file their return. Hope that helps!
Appreciate you checking out the video and channel...there may be a few other videos of interest to you if you scroll through (if you have time). Have a great day! Cheers!
Ok so can I get family leave tax credit for my side gig on my w2 return? Or would i have to file my side gig info of a separate return
@Chelsi Posh - I’m no CPA, but your W-2 and side-gig will be in same 1040 tax return. Your 1099 should have a schedule C that goes with that revenue and your calculation for these tax credits (assuming you’re eligible and qualify) would be based on your side-gig Schedule C net revenue...line 31.
Does that help / make sense to you? Hey, thanks for taking the time to check out the video. Appreciate you. Cheers!
Great Video Sir, quick question does stay home order by the state count as isolation by state?
@Banana Roll - That is my understanding of how I am viewing this situation - yes. However, the additional remark on the IRS website also mentions being 'unable to telework' - so depending on your business industry/structure/clients/etc you may or may not have been able to telework. This is exactly where some of the grey area comes into play with regards to these tax credits.
Hey, appreciate you checking out the video...thanks! Cheers!
What if you don’t have schedule c but s Corp and file 1120S? Can I qualify?
@tanya newman - Hi! Thanks for checking out the video. Yes, you can qualify. Please confirm with a CPA in your area, but I believe you would use your salary/wages as noted in Form 941 for your calculation of average daily revenue. Hope that helps! Appreciate you...cheers!
Can I amend 2020 family sick and leave tax credits to my 2021 taxes?
@john fedourich 2 - When amending a previous return - that will only impact THAT one return and not your current return. Also, I have amended two tax returns previously…they have to be done via paper/snail mail…cannot be done electronically…so the entire process is much slower. Please be mindful of that.
Hey, thanks for checking out this video and being part of the channel. Cheers, boss!
Would you happen to know if I would still be eligible for this if I was a W2 employee for 2019 and part of 2020 and became 1099 in 2020 due to Covid wiping out my industry (trade shows). I'm now a self-employed consultant. Also, I've had this self-employed business since 2008 with an EIN but haven't had to use it or file taxes with it since around 2012. Thank you for all your research and information.
@Danny Krieger - You are allowed if you have 1099 income/revenue for 2019 OR 2020...if you have the Schedule C & 1099 documents to match then you should be good. Appreciate your feedback and for you taking the time to research this topic...hope you're able to get some tax credit relief from one or both of these. Thanks - cheers!
First, let me say I enjoyed your video, very informative! I have a question though, I have a bookkeeping business. You mentioned that if I could work at home the credit wouldn't apply to me. The part that stumps me is that technically I could work virtual or at home, the problem is I lost so much business I had to claim unemployment. How does that work?
@Deanna Bazan - Thank you for your feedback and watching the video! Glad you thought it was informative. Your question is a really good one. I was simply using the information pulled directly from IRS website / rules...here's the link to one of the many pages I read while researching the video...
www.irs.gov/newsroom/covid-19-related-tax-credits-for-paid-leave-provided-by-small-and-midsize-businesses-faqs
Here's the quote, "...(which for purposes of these rules, includes telework)."
There was another CPA that commented on either this video or another one that had mentioned that this was another typical government handout...from my perspective, I think there is some gray area here and on one hand you 'could work' from home, but on the other hand you 'couldn't telework' because all the business went away. I would imagine there are many in this situation and without further clarification from IRS it appears to me that some people will blur the lines and 'tell the story how it best suits them' in order to get this tax credit. I think your claim that you couldn't telework could be justified if you lost all your clients / business and was unable to work to find new clients to help - even if that means that you 'could telework' you couldn't find the clients that would hire you to do so....therefore making you unable to telework. IDK...just trying to come up with a justifiable reason that this tax credit would apply to you. Not sure if that helps...what are your thoughts?
Appreciate you. Cheers!
I’m sorry if this was already answered, but if I received PÚA during my time off, can I still receive the credit?
@Kasten Fam 5
- Yes you can. This credit does not have impact on PUA income or not....just keep in mind you'll have to pay taxes on PUA income, but it is not considered earned wages for the calculation of these credits.
Thanks for checking out the video! Perhaps there are others on the channel that may be of interest to you. Appreciate you...cheers!
Help! Can I use a W2 from 2020 since I am just starting my business in 08/2020. My Schedule C is not looking to good, but I had some W2 employee wages and doctors notes & school shut down letters covering me and my son for the dates listed. Do I have ANY chance? It's like I can't catch a break anywhere 😭😭😭 I need money for my startup business. I'm trying.
@WillPower 2 Wellness - I’m so sorry you’re feeling like you can’t catch a break. That is a sucky feeling that’s hard to shake off...but that’s what you’ve got to try and do. I’m sure that there will be something good that happens in your business/life if you keep at it. Surround yourself with the right people, read a few good books (or audio books), and keep at it...you’ll find more success with patience and time. Nope, unfortunately a W-2 will not allow you to take advantage of these tax credits. However, if you have any positive number on your 2020 Schedule C then you’ve got a shot! Keep trying. Adapt and overcome. You’ve got this! Appreciate you.
Hi! Thank you for the informative video. Could you clarify if these credits are or are not available for self employed person living abroad during 2020? Specifically, last year, I was living in Asia and selling online in the USA market via Amazon. Thank you!
@Khoa Pham - Hi there & thanks for checking out the video! That is a really good question and I do not have a confident answer for you. My gut tells me that it is for U.S. based tax payers, but I am not 100% sure if that is true or if there is no real clear definition on this. To me, the family leave tax credit is more applicable to U.S. based tax payers because it is directly associated to local schools & day care facilities closing down. Check with a licensed CPA for more clarification would be my suggestion. Hey though, I appreciate you taking the time to check out this video. Cheers!
@@Financial_Awareness thanks for replying and that would make sense! I will double-check with a CPA on this matter and update here if I find something. Thanks again for your informative video!
Where can I claim these credits turbo isn’t working
How about S Corp?
Carle L - Thanks for checking out the video. I am glad you're researching this and hope you can take advantage of these tax credits. Yeah, I did focus more on Sole Prop., 1099, and independent contractor for this video...and less on S-Corp self employed people.
Please confirm this with your CPA, but the way I understand how these tax credits work for those who file as an S-Corp are as follows...the average daily revenue is a reflection of the 'qualified leave wages' earned and brought in...which for someone who is self employed and files as an S-Corp that would be the salary you pay yourself. Because your K-1 distributions aren't considered wages and are considered a distribution of profit from your business. Even though you and I know that you, as someone that is self employed, generated all that revenue yourself, but you are able to avoid additional taxes by having a decent portion of your revenue be distributed as profit as opposed to wages.
So it's my understanding that you would divide your S-Corp salary that you pay yourself by 260 to arrive at your average daily revenue for the purpose of this calculation. You'll need to review your Form 941 as part of this process and here is a link to IRS website that can detail this info a little more...
www.irs.gov/newsroom/how-to-claim-the-credits
Sorry for the long response. Was that helpful?
Hi there. If a self employed person is living abroad, can he still be eligible for this credit?
I had my baby girl 04/13/2020
I was told to quarantine right after birth from my midwife and doctor as well as it being a government mandate here in New Orleans. My baby hasn’t been able to go to daycare even if I wanted her too. Do I qualify for staying home on family leave?
@AJFB FOXY - Hello! Thank you for taking the time to watch the video. As long as you have some Schedule C income that you can use for the calculation then in my eyes, yes, you would qualify. Congrats on your new baby! I’m so happy for you you. I’m planning a video regarding saving money for babies/college planning...hope you subscribe for future videos. Appreciate you. Cheers!
@@Financial_Awareness thank you, I appreciate your response.
I was self emplyed in 2019 to march 2020. But started getting unemployment benefit on may 2020 on ward. I was caring for young boys while the school closed. Can I still get FFCRA benefits? Thanks , great content and subscribed.
@m cyber - You probably can, but with today being tax due date you would have already had to file or file an extension. So sorry to hear about that transition and hope things have improved for you since May 2020. Keep working at it, boss!
Will this still be going next year
I just claimed my taxes only I didn't claim the sick leave tax credit. Should I amend my return. I was self employed and my job shut down to quarantine and also my son's school shut down.
@Chelsea Brown - You could amend. However, just know that amending your return can at times cost more time/money than actually filing your return...it’s a slow process and to my understanding has to be done via paper (as opposed to e-file). If you’re going to amend on your own then it’s worth it, but if you’re going to pay someone then you’ll have to compare the cost vs more amount you expect to get back and see if it’s worth your time/hassle.
Are we able to claim this credit if the Governor shut down our business as non-essential for a Month? Or only if we were sick? We had work, just weren’t allowed to. We didn’t get unemployment.
@babybagleys - The Sick Leave Credit has to do with you being sick yourself, you self quarantining yourself, OR if you had to care for another individual that was sick. The Family Leave Credit has nothing to do with being sick and is more about you needing to care for a dependent / your child and being unable to work or telework because of that. So, during the month that you were shut down, if you got sick or had to self quarantine because you thought you had come in contact with someone that was sick then it is possible for you to get the credit. As you can see...there is some grey area here.
Hey, appreciate you taking the time to research this topic and watch the video...hope there are others on my channel that may be of interest to you. Thanks - cheers!
Great content 👍🏽 New Subbie!
@Tylisha Reed - Hey thank you so much for that feedback! Hope my videos aren’t a waste of your time. Appreciate you...cheers boss lady!
Can we get a link to some new content… a patreon… something! I have 2 CPAs in my family who, combined, didn’t give me the wealth of information you’ve provided.
@Ashley Williams - Oh my goodness thank you so much for that wonderful compliment! Very kind of you. As my life changed/pivoted I lost the amount of time I was able to dedicate per video and since then I’ve lost the motivation to begin a new video. I’m sooooo overdue it’s not even funny! Lol. At any rate, thank you for the kind remark. Karlton Dennis has some amazing tax videos and you should def check him out. He’s out in Cali and has several quality vids.
Cheers!
Hi again kyle, any similar tax benefits for this year?
@Fabiano Pina - Haven’t researched it yet, my gut says no though. I briefly combed through this document and believe there will no longer be any additional incentives for 2022 calendar/tax year.
www.irs.gov/pub/taxpros/fs-2022-16.pdf
@@Financial_Awareness thank you. Wish you could do my taxes. You're very attentive and i love that. Much appreciated
What if you have both income from a w2 job and self employment and your filing your taxes together would your net income be from both jobs or just the self employment income?
@Bishop slaughter - Nope. You would calculate your self employment income only. Here’s a link to IRS website where you can read more about the specifics...
www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals
Hope that helps! Thanks for checking out the video. Appreciate you.
@@Financial_Awareness thanks your video was very helpful.
Hi! I already filed my taxes with Turbo Tax. I tried E-Filing, but it did not let me since I was trying to file with 7202. I ended up removing the form, but now the more that I think about it, I really want this credit and believe that I deserve it. How would I go about claiming it or amending my taxes if the IRS has already accepted my return? They have not processed a return yet.
1 clarifying point, I earn W2 wages full time as well as 1099 income from freelance design work. My W2 employer basically shut down in April and May of 2020 (while still paying us). I also lost my 1099 income for those months. Am I eligible for this credit?
@Brian McGee - Hey man! Dang, terribly sorry to hear of the challenges of loosing the 1099 income for those months. Frustrating. In your comment you did not mention anything about being married or caring for a child...so based on that I can't say that you're eligible for the family leave credit because you have to have cared for someone in order to be considered for that 'up to' $10,000 credit. As far as the sick leave credit, if you had to self quarantine or qualify for the credit any other way then you could be eligible for it...since you already turned in your return for processing then yeah man you'll have to amend your return after the dust settles...which is a slow paper-based process...I've had to do it before...it requires significant patience. Lastly, you're only able to use your 1099 Schedule C income for the calculation of these credits - not your W-2...and you can use 2019's Schedule C line 31 OR your 2020 Schedule C line 31....whichever is higher is the one I'd use. Hope all that helps, boss! Appreciate you checking out the video. Cheers!
@@Financial_Awareness woops! Thans K., yes Married with 4 kids. Thanks for the wisdom, I'll keep watching your videos. Do you have any videos on the Crypto markets?
@@BrianMcGee - OHHHH...gotchya! Ok, then yes, you should definitely qualify if their schools were closed and y'all had to care for them. $10,000 credit - so in my opinion it would definitely be worth amending and trying to get for sure.
Haven't dipped my toe into the Crypto world just yet. Everything is 20/20 in hindsight and probably should have speculated on BTC a while ago, but I currently don't have any positions open and am still researching/learning. Yeah, once I wrap my head around it more I'll make a video, but I don't want to provide any videos on a topic that I'm not comfortable with yet just to 'get another click' ...because many of those crypto videos are popular, but in my effort to be open/honest/genuine/authentic I'm just not ready to make a vid about it yet. If there's a way it can add to my wealth building goals then I'm excited to learn more about it. Appreciate you man! Cheers!
@@Financial_Awareness i’m very excited about Cardano ADA
What do I do if I already filed my taxes?
@Poe Thae - You can amend your return...it’s not as affordable as simply filing your return because it has to be a snail-mail paper amendment and it takes a while to get any funds refunded to you, but it is possible. I’ve had to amend two different tax returns in the past so I do have a little experience in that regard...so please set your expectations appropriately.
Appreciate you taking the time to check out the video! Cheers!
@@Financial_Awareness Thank you!
What does this mean for someone who has an S-Corp and pays themselves their "reasonable wage" or officer compensation through a schedule C?
@Sidney Williams - Hey, thanks for checking out the video! Please confirm this with a professional CPA in your area, but the way I understand it....you would use your wages/salary as the figure you divide by 260 to arrive at your average daily revenue. I say this because the money you distribute to yourself (to avoid super high self employment tax) is typically done through a K-1 distribution of profit....which is not taxed the same as wages earned. On one hand, this sucks because your 'reasonable wage' is not your full/real income, but on the other hand you're still getting some tax relief by filing as an S-Corp and not paying full self employment tax on all your revenue. That is how I understand it...does that make sense to you? Let me know if I'm off on my response at all or if you have more questions. Appreciate you....cheers!
how would you know what schedule c for 2020 is if you havent files 202 taxes yet????
@Dee Castillo - Sounds like it’s time to get 2020 taxes done! Since this is a tax credit it won’t impact your Schedule C figures...just your final amount owed in taxes. Appreciate you checking out the video...cheers boss!
Hi 👋, im filing self employed, also on pua, its kind of confusing do u recommend a tax software to also do the 7202?
@Nathalia J - Hi there! Thanks for checking out some of the videos…appreciate you taking the time to do that and hope you’ve found some value in a few. Sorry it’s a little confusing. Personally speaking, I’ve worked with a CPA for the past 16 years…and based only on my personal experience I find value in paying someone to help file my taxes for me. Although I am quite confident in my knowledge I still value the brainstorming sessions, education I receive each year, and them/their team filing my return so I don’t have to. So, that’s one route you could go if your budget allows for it. TurboTax is pretty good software, but I’m sure there are other software offerings out there for you to research.
@@Financial_Awareness thank you for ur reply, am I able to deduct transportation, car, commuting expenses when a housekeeper self employed? I had one regular client. Ty
@Nathalia J - Generically speaking, if you have business-related expenses then those expenses can be written off against the income generated from your business revenue. Look into making a quick and simple profit and loss statement and track all your expenses that you incur in order to generate your business income.
If your Accountant advised you not to take loss consecutively and you did, then he is scared to work for you. #taxladydc Thanks for the other info! 100
Is there any legit firm that can file for me. Based on what you just said I’m definitely eligible and my wife but we want to do it the right way. Any suggestions please
Hello, does a self employed without employees Qualify for this credit? I receive a 1099 and work by myself. I was sick 12/15/2020 and my whole family started to get sick after that. I had to take care of all of them. My wife stayed sick for a couple of months. I am confused by the words free tax USA is using when doing my taxes. Thank you.
@Berlin Jimenez - Yes, self employed people without employees can still get this credit. I got it for the 2020 tax year when I filed in 2021.
Thank you for this information! I resigned my job in October 2020 due to my children’s school bn closed down. My employer did pay or offer the qualified family leave to me. Is this something that can still be claimed. Also, I have an LLC biz on the side established in 2020 but no income yet. Can I claim qualified leave family credit through it. Thank you so much for your response
@TEMI A - Hi! So sorry to hear you had to resign from your job. Hope you are ok and doing well to get by. If you don’t have any revenue from your self employer side hustle then you cannot use either of these credits. They are for employers or the self employed.
If you did have a W-2 job where you received some sick and family leave income AND you did have side hustle 1099 income then your amount of tax credits for your side hustle income would be reduced by the amounts you’ve already received and the IRS has specific examples of this on their website...the IRS links in the description should take you to those pages and you can read them. However, as I said if you have no revenue from your 1099 side hustle then it is my understanding that you cannot get either of these tax credits.
I’m super happy for you to dip your toe in the water and get established through your new business and hope that provides you with an awesome quality of life and enough revenue to be happy. Appreciate you taking the time to check out the video. Cheers boss lady!
@@Financial_Awareness Thank you so much!
Do u do taxes I nee need someone to do mines
This is for Canada.. right?
@Blanca Villa Alva - Hi there! The images from the video and links in the description are to the IRS website for the USA tax laws and not for Canada. I’m sorry for the confusion if that wasn’t made clear.
2020 was my first year as a self employed individual. I received a 1099 and all daycares shutdown in my area as well so how will I able to claim this credit? As 2020 was my first year
@Tanya Rose - Hi there! Thank you for taking the time to watch the video. If you simply follow the steps outlined in the video you’ll understand how to calculate your credit and Form 7202. You’ll then submit Form 7202 with your tax return. Congrats on starting your new self employed business. Appreciate you. Cheers!
what about i just quarantine my self last week of january 2021.. i got sick for 2 weeks... i just self quarantine.. didnt go to doctor... got cold ,cough and fever.. im a uber driver.. it will show on my app that i didnt drive for 10 days.. then after that my wife got sick and she had covid leave at her job.... am i eligible for the paid sick tax credit...
@Edgar Adolfo - The dates for these tax credits run through March 31st, 2021...you should be able to include any eligible days within that period. Sorry to hear your wife fell ill...hope she and your family are doing better by now. Perhaps 2021 will be better than 2020! Appreciate you taking the time to check out the video. Thanks...cheers!
How do I write these letter correctly? And forms incan use?
@Jason Jerome - My plan is to keep it short and simple. I'm going to list each specific date for which I was unable to work (or telework) for both the Sick Leave Tax Credit & another list of dates for the Family Leave Tax Credit. It's my understanding that you cannot use the same date for both sick & family leave credits - so in looking over your situation you'll need to analyze that on your own. I know it says "letter" and I mentioned letter in the video, but I am thinking it is more of a statement and then you'll have to note your answer to each of the 1-4 bulleted items that I mentioned in the video from the IRS website. Your CPA or TurboTax will help you with the correct form (I think I have links in the video description as well). I'm planning on using Microsoft Word or Excel as the document I'll be typing up.
Hope that helps. Hey, appreciate you taking the time out of your day to watch the video. Thanks! Cheers.
how do i amend my taxes from 2021.
I’ve done it twice. It can only be done manually (wet ink)…no e-file. …and I did it with the assistance of a CPA, which is what I would suggest to anyone considering amending a previous year’s return.
You only mention Schedule C reported income, what about us using Schedule E?
@Jim Ross - Hey Jim! Appreciate you taking the time to watch the video - thank you for that. Yes, you are correct I focused primarily on self employed people with Schedule C revenue in this video. It is my understanding that Schedule E revenue is not able to be used for the average daily revenue calculation. I've got a few thoughts...here you go...
1 - I'm not a CPA and consulting with one for your specific situation may be in your best interest.
2 - I personally have Schedule E income from 2019 as well and will not be using that for the purpose of calculating my average daily revenue...furthermore...it is my understanding that Schedule E is primarily used to report 'passive' income - for example rental income you receive because you own rental property or a royalty payment you receive...and Schedule C is used to report self employment business income where you earn wages (vs passive revenue).
3 - Here is a link I found directly to IRS website on this matter:
www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals
...#62.... How is the "average daily self-employment income" for an eligible self-employed individual calculated?
Average daily self-employment income is an amount equal to the net earnings from self-employment for the taxable year divided by 260. A taxpayer’s net earnings from self-employment are based on the gross income that he or she derives from the taxpayer’s trade or business minus ordinary and necessary trade or business expenses.
4 - If you are an employer with employees then there are other documents/steps you'll have to take and this particular video did not focus on that and was primarily focused on self employed individuals who file their taxes as sole prop/1099/independent contractors.
...long answer...hope some of that helps you!
My son is 16 can I claim the family leave which he needed so much of help in the first 6 weeks of the pandemic?
@Deirdre Danna - Well, I do not know the specifics of your situation and can't help you with the limited information you mentioned. The video outlines everything pretty well...if you needed to care for your son due to his school closing and your self employment income makes you eligible for this tax credit then simply follow the information I mentioned in the video and work with your CPA/TurboTax (or wherever) and claim the credit. Hey, thanks for taking the time to watch the video - appreciate you and hope you're able to get this credit! Cheers!
Aww i only got 17,346 on my line 31 so I’m guessing I’ll probably won’t qualify for neither one of those taxes credits
@Sharonda Haywood - Hi! Yes you will!!!!!!!! $17,346 divided by 260 days is an average daily revenue of $67. $67 multiplied by 50 days (assuming you’re eligible) is a $3,350 tax credit for the Family Leave Tax Credit. Do the same calculation if you are eligible for the Sick Leave Tax Credit.
The $52k and $132k figures I showed in the video are the amounts you have to make to get the FULL tax credit...you’ll get a partial credit for your Schedule C simply being less than those figures. 😃...go get your tax credit money, girl!!! Appreciate you for taking the time to watch the video! Would live for you to subscribe if you haven’t already. Thanks!
Oh Wow 😳 Thanks 🙏🏽 for the information
@Sharonda Haywood - My pleasure! Hope you are able to take advantage of them! Appreciate you.
A lot of other tax preparers keep telling me that in order to claim this self-employment credit I would have to have W2 wages and Sel-Employment. Is this true? This is so confusing.
@Victoria Hunt - That seems quite odd to me. It’s possible they are not fully aware of the new legislation that was passed on Dec 27th. You do not need to send them this video, but please check out the description of this video...I put specific links directly to IRS website to try and prevent confusion. There is literal explanation from IRS that is specific to self employed people. Please check links, read them when you have time, and feel welcome to share the “special provisions for self employed” language with them. My information is directly from IRS website. I’m sorry you’re having a difficult time. Happy to answer questions - I’ll help where I can.
Appreciate you taking the time to watch the...cheers!
@@Financial_Awareness I have several clients that are self-employed and I need to prepare their returns correctly. Do you have a 7202 worksheet/questionnaire that would help me help us both through this? I'm still confused. Thank you.
@Victoria Hunt - I’m happy to ask my CPA today if he has a worksheet/questionnaire, but until then this is the IRS link with the information I’ve used for the video. Specifically numbers 60-69...
www.irs.gov/newsroom/special-issues-for-employees
Will comment again once I hear back from my CPA. Hope this helps clarify a few things. Also, another subscriber commented in late Jan that Form 7202 was still in draft, do you know if that has been fixed by now? Thought I saw proper instructions for Form 7202 from a Google search..
www.irs.gov/pub/irs-pdf/i7202.pdf
@@Financial_Awareness thanks
Apparently you can’t file the 7202 form electronically?
@Lucia Smith - Hi! Thank you for checking out the video. ...really? Hmmm...that’s new news to me. My plans were to simply include it with my full 2020 tax return through my CPA - which gets e-filed each year. Interesting to hear of this because it is my understanding that you can file it electronically. I’ll respond back to this thread if I discover otherwise. Do have a link to IRS website that says you can’t file electronically? (Because I just read their instructions for form 7202 and doesn’t say it can’t be filed electronically.)
@Lucia Smith - just searched again...according to TurboTax website response - because IRS hasn’t finalized the form yet it can’t be filed just yet...that’s probably what you’re seeing. Which actually makes sense to me. Good on you for being on-the-ball to get your taxes done!
I always file through turbo tax before the irs accepts returns. At the end it says efile date of 2/4/21 but next to form 7202 it states cannot be filed electronically and only gives a date of 2/4/21 to mail. I'm praying that changes 🙏🏽
@Lucia Smith - Very nice & good on you! Yes, I’m hoping that changes soon as well. Thank you for taking the time to to watch the video - would to invite you to subscribe if you haven’t already. If there are other finance-related topics you’d like to see a video on please let me know. Appreciate you. Cheers!
can i use income from k1
@Chrisbelen Lemos - Nope.
i just did my taxes and you will get a message when you go to e file. you cannot e file if you use this tax credit. it says irs law dictates that you will have to mail your tax return because you claimed this credit.. now lets think about that. l know people right now that still have not gotten the 2019 refund yet because they mailed it. so you will have to make a choice whether to claim it and roll the dice on a timely refund or for get it and e file without it. oh yeah if you claim it you cannot go back and delete it. so you are stuck. i did a workaround. went over to h r block and did my taxes without it.
@John Russell - Thank you for sharing! I wasn’t aware you had to snail mail this in order to get it. Interesting. Guess I’ll be snail mailing this year...can’t remember the last time I did that. Again, thank you for sharing your experience to help set our expectations. Appreciate you, boss!
do I need to send proof if I'm E-filing
@wilmer barona - I haven’t confirmed this yet, but someone else commented that you’ll have to mail in your return in order to get these tax credits. Doesn’t exactly make sense to me, but that’s what someone else mentioned. ...and yes you’ll need proof - as mentioned in the video - the written statement / letter that I referenced.
@@Financial_Awareness thanks
@@Financial_Awareness OMG🤦♀️ 😟 I think I may have messed up. You stated that a statement/documentation needed to be filed with your 2020 taxes and I did not file a statement with my 2020 taxes. The software didn't ask for one so I didn't know I needed to file one..I hope this doesn't delay my refund because I'm in a bind right now 😟.
@Von W - Just play it by ear. Check out the video again and/or the IRS website links regarding “how to substantiate eligibility”....because essentially the IRS has told self employed individuals that they have to have some kind of letter/statement/documentation...I had presumed it needed to be turned in with your tax return, but if you were able to submit it electronically without it then maybe you’ll be ok and just keep it with your records and have one ready in case it’s needed. Did you do your taxes on your own or through a CPA?
@@Financial_Awareness I did them myself through taxslayer.
So if I work ft and my kids school close for April 2020 to December 2020. Can I still get the credit due to staying home for them. Or does that only applies to self employed.
@Maritza Santiago - Hi! Thanks for checking out the video. It is my understanding that these tax credits are for small & mid-sized businesses that paid their employees sick pay and family leave pay due to covid-related reasons and there are special circumstances for those that are self employed - which is what this video focuses on. It is not my understanding that these credits are for full-time W-2 employees. I’m sorry to break that news to you. If you have interest in other financial planning videos I’ve got a few that may be of interest to you regarding taxes & retirement accounts...also, don’t forget about the dependent care child tax credit...if you spent any money on qualified child care or after school programs that would be a tax credit you would be eligible for each year if you have kids. Some of my tax-related videos discuss that topic as well. Hope you are doing ok and getting by through all this. Appreciate you. Cheers!
Typical govt giveaway... I'd say around half the people who take this are lying, in my experience as a CPA
@jcman240 - I do agree there is some gray area around the Sick Leave Tax Credit where people can blur the lines, but the Family Leave one is pretty straight forward. Will be interesting to see what occupations would be considered 'unable to telework.' The one aspect of your remark that I would respectfully disagree with would be 'typical'....I don't think it was typical for the government to shutdown the economy and literally bring many business and self employed people to a halt...so, yeah, it is a 'government handout' and giveaway, but it's at least one way for people to be made whole (or at least get a little money back) from the financial hardships of 2020. Just my opinion...and I highly respect your opinion as a CPA - so thank you for checking out the video and commenting. Appreciate you, boss! Cheers!
@@Financial_Awareness By "typical" I mean able to be taken advantage of... thanks for the content
@@jcman240 - Gotchya! Understood. My pleasure man. Appreciate you & your profession...I love the chats I have with my CPA - I usually learn something new each year. I'm sure you'll be busy over the next few months...grind mode!
You may be providing false information. Im being told if you have a loss this year you dont qualify for this credit.. and I didn't have a loss last year
@Andrea Moore - Thank you so much for checking out this video! I appreciate you for that as well as for the accountability you mentioned to make sure I'm accurate in my videos. Although I'm not perfect and may make mistakes from time to time, your comment isn't correct and you are allowed to use 2019 Schedule C OR 2020 Schedule C. If you do show a loss on your Schedule C then you are correct - you will not get these credits. Not sure if the IRS website has been updated to reflect this, but here is the link I left for another person that commented something similar...it's from the Senate Committee on Finance...please scroll down to section 17...
www.finance.senate.gov/imo/media/doc/Tax,%2012-21-20,%20Section%20by%20Section%20COVID-Related%20Tax%20Relief%20Act%20of%202020.pdf
Thank you for holding me accountable. When I make an inaccurate statement in a video I usually attempt to correct it while editing the video, by placing a new pinned comment, or by updating the description. Does this help address your concerns?
Appreciate you! Cheers!
@Andrea Moore - Also, I just looked up the IRS website and it was JUST UPDATED today, January 28th...
www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals
...scroll down to section #63 and read the last sentence. Thanks!
I appreciate the links but I dont see where it says you dont qualify if you have a loss in 2020. Thanks tho
@@andreamoore806 - Same link I just sent you...section 60...2nd paragraph reads as follows...
"Eligible self-employed individuals are allowed an income tax credit to offset their federal self-employment tax for any taxable year equal to their “qualified sick leave equivalent amount” or “qualified family leave equivalent amount.”
...this credit can ONLY be used to offset your federal Self Employment Tax that you owe from generating a profit...if you are showing a loss...you owe no tax and there's nothing to offset. However, if you have a positive Schedule C line 31 from 2019 then you can use that for your Average Daily Revenue calculation.
Does that help clarify this for you?
@@andreamoore806 - Hi! Just checking back in because you didn't respond to my last message. Did that help clear it up for you? If not, how else may I help?
Not every self-employed is Eligible for this credit, it’s only certain self employed. Please be more specific next time buddy. Read the rules first
@ali ali - Help me understand this IRS FAQ sheet:
www.irs.gov/pub/newsroom/fs-2022-15.pdf
Scroll down to section 106 where it discusses self employed people. I have a schedule C and many self employed people also have a schedule C…which self employed people aren’t allowed? I read the rules buddy, but do appreciate you checking out the video and commenting - holding me accountable. Thank you!
is it me or is he terribly out of sync or dubbed over badly
@manaherb - Weird because I record in 4k on my iPhone 12 Pro...video and audio both record to my phone at the same time (not separately). When I edit the video clips the audio is edited in sync. I’ll have to re-watch this one and see what happened. If you’re listening to the video while driving and listening over Bluetooth then there could be a slight delay between video & audio on that end. Sorry for the inconvenience...I’ll work to make it better. Appreciate you for the feedback!
@@Financial_Awareness I think it was UA-cam. I switched to my phone and didn't notice anymore.
Just re-watched the first few minutes while wearing my Bose headphones...and I don’t hear/see any out of sync parts. So weird - I’m sorry if something is throwing you off.