We wanted to get to know Kajli Prince (NAIWE’s Tax Expert) better, so last month we sat down with him. Here is what he shared with us.
We hear that freelancers may be eligible for the Payment Protection Program (PPP). What are the qualifications that freelancers need to meet?
The main qualification for PPP is that the business has less than 500 employees (i.e., small businesses). These loans can be forgiven if the borrower spends a minimum percentage of proceeds on payroll costs within a specified time frame called the “covered period.”
Regarding a PPP loan, how do freelancers determine if we should use 8 weeks or 24 weeks for calculating loan forgiveness?
The covered period is either 8 or 24 weeks, depending on when the loan was assigned a loan number. Before June 5th, 2020, the covered period was 8 weeks. After June 5th the covered period was extended to 24 weeks. Borrowers who received their loan before June 5th may keep their original 8-week covered period or apply the new 24-week covered period. Generally, the 24-week covered period is a better option.
What is the rule of thumb for how much a freelancer should/can save for retirement?
My simple Rule of Thumb for retirement is: save as much as you can. So, you AsQ, “What small business retirement instruments are available to me and how much can I save with them?” Great question. Here are the big ones:
• 401(k)/403(b): $19,500 (under 50 years of age) and $26,000 (50 years of age and over)
• SIMPLE: $13,500 (under 50 years of age) and $16,500 (50 years of age and over)
• IRA, Traditional and Roth: $6,000 (under 50 years of age) and $7,000 (50 years of age and over)
2020 was a year full of dramatic stimulus efforts intended to relieve huge financial stresses felt by most Americans. It seems that everyone is hopeful for 2021, but huge questions still loom large as to what happens next, especially with a new administration on the horizon. Kajli Prince will share the 21 questions he is asked most frequently about what to expect in 2021. The topics range from small business loans (and loan forgiveness) to retirement contributions/distributions/deductions, child & dependent care expenses, working virtually, etc. These 21 answers are intended to enlighten viewers as well as provoke further Q&A.
You can join in this conversation on February 25, at 7 pm eastern, when NAIWE will host a discussion on figurative language. The cost for NAIWE members is only $10! Non-members can join for $30. Register today!