Remote Work

Over the past year, many Iowans have experienced working remotely. Their experiences have convinced them – and their employers – that remote work can continue to be a viable option, with or without a pandemic. Over the past year, many Iowans have experienced working remotely. Their experiences have convinced them – and their employers – that remote work can continue to be a viable option, with or without a pandemic.

Remote work is likely here to stay. Having the skills to be successful in remote work can open employment possibilities for Iowans no matter where they live. Iowans can gain these skills through the Remote Work Certificate. ISU Extension and Outreach offers the virtual course in partnership with Utah State University Extension. The four-week course is open to adult learners and requires approximately 30 hours to complete. Participants work at their own pace but must participate in four weekly virtual workshops and submit weekly assignments. The course simulates remote work. Participants work independently on the assignments and meet as a group each week for one-hour via Zoom to practice technology, etiquette and virtual small-group work. Participants are divided into work groups made up of individuals across the U.S. to complete a project.

Participants must have broadband internet access, a Web camera and microphone, and basic computer proficiency. The course registration fee is $249 and upon completion participants receive a Remote Work Certificate. A new session begins each month, except in July and December. Upcoming sessions are listed and registration information is available on the Human Sciences Extension and Outreach website at https://www.extension.iastate.edu/humansciences/remote-work.

Five human sciences specialists coordinate the course and provide support for participants. At the end of the four-week course, participants who would like one-on-one assistance in setting career goals, identifying gaps in skills and finding opportunities for remote work can schedule time with a specialist. Participants take the course for many reasons. Some are preparing for remote employment. Some are transitioning from an on-site job to remote work. Others are looking for professional development and are investing in themselves. Remote work can provide self-employed entrepreneurs with flexibility and access to a larger pool of contract work to select from as they build their business.

The course also is appropriate for high school seniors who want to enter the workforce upon graduation. Many already possess the necessary technology skills, and the course can add the experience of remote work that may appeal to potential employers. Other students will find remote work valuable as they pay their way through college. By working remotely, they won’t have to find a different job when they return home during semester breaks. ~Brenda Schmitt

Photo credit: insta_photos/stock.adobe.com

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Affordable Health Insurance: ARPA Expansions

The American Rescue Plan Act of 2021 (ARPA) has put into place several temporary expansions to the Affordable Care Act (ACA) provisions that can help Americans access health coverage at affordable prices. In general, these benefits apply to people who purchase health insurance in the Marketplace (created by the ACA) because they do not have an affordable option available through employment. The expansion has two dimensions: 1) more people are eligible for help paying the health insurance premiums for plans purchased in the Marketplace, AND 2) those who are eligible for help are now eligible for MORE help, so that their share of the monthly premium can be reduced.  People who are unemployed will especially benefit.

The Health Insurance Marketplace is now open for enrollment through August 15, so if this information makes you want to enroll in a plan OR change the plan you chose, you should be able to do so in the next few weeks. NOTE: The law took effect March 11. The agency in charge of the Health Insurance Marketplace expects to be ready to implement many of the changes on April 1. Suggestion: if you call or log in to the Marketplace in early April, ASK if the new rules are yet in place. It might be worth waiting a week or two in order to be sure the changes have been built into the system.

More Help. The ACA created a maximum cost people would have to pay for health insurance premiums, stated as a % of your income. The ARPA dramatically reduced that percentage of income for 2021 and 2022.  For example, suppose you are a 2-person household with income of $43,000/year (which is just under 250% of the poverty level); under the ACA your share of the premium for a benchmark silver plan would have been 8% of your income; under the new ARPA guidelines, your share of the premium cost for that same silver plan is just 4% of your income. Implications:

  • Some people who previously decided health insurance was too expensive will NOW decide it is affordable under the new rules.
  • People who chose a less-expensive bronze plan despite its higher deductible and copays may NOW decide a silver plan is worthwhile.
    This is of special value to those who are at or below 250% of the federal poverty mark, because these folks are eligible for plans that sell for a “silver” price but have smaller deductibles and copays so that they are more like a gold or platinum plan. In other words, folks under the 250% level can get a premiere plan for a budget price.
    It’s sort of like getting a brand-new luxury SUV for the price of a 2014 compact sedan!
  • If you are already enrolled in a Marketplace plan, there is a good chance that your share of the monthly premium is reduced under the new rules. Consider contacting the Marketplace (800-318-2596) sometime later in April.

More People Eligible.  Under the original ACA rules, if your income was over 4 times the poverty level, you were not eligible for help paying for health insurance. Under the ARPA expansion, people of any income level are eligible if the cost of the Marketplace plan would exceed 8.5% of their income. This will be especially valuable for those in their 50’s and 60’s, since health insurance premiums rise with age. This provision is also in effect for 2021 and 2022. 
Implication: some people with incomes above the 400% threshold may have compromised to save money by purchasing health coverage that was poorer quality (that is, it does not meet the ACA standards related to broad coverage and value). With the new cap of 8.5% of income regardless of income level, these folks might now be able to purchase a high-quality plan for an affordable price.

Huge Benefit for Those Unemployed at ANY time during 2021.  Note: this benefit is ONLY in effect in 2021.  If you receive(d) Unemployment Income at ANY time during the 2021 calendar year, special rules apply for your eligibility. With regard to eligibility for help paying for health insurance in the Marketplace, any income above 133% of the poverty level will be disregarded. That means these households will be eligible for the “platinum-like” silver plans for FREE – the premiums will be entirely covered by the subsidy.  Note: all other qualifications must also be met. For example, if you have workplace coverage available that is considered affordable, then you will not be eligible for the free silver plan.  However, if you are unemployed now, take advantage of the free silver plan. If you get a new job in a couple months that provides insurance, you can then drop the silver plan.
For those whose incomes are below 100-133% of poverty, they will be eligible for Medicaid coverage (also free), even in states where Medicaid was not expanded.

COBRA Subsidy. For people who lost health coverage due to being laid off or having their work hours reduced, the government will cover the cost of their COBRA premiums for up to six months, from April 1 – September 30, 2021. Check with your employer about how this might help you. Even if you lost your job months ago and did not sign up for COBRA at that time, you should now be able to sign up for COBRA.
Note: if you are in this group, you might also benefit from Marketplace insurance or Medicaid, so be sure to evaluate all your options.

Primary Source: Kaiser Health News Details for the % of income (paragraph 3) from Kitces.com
For more information see: https://www.healthcare.gov/more-savings/

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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$1400 Stimulus: The Same, Yet Different

People are excited about the extra $1400 stimulus payments that are coming. Last Saturday, just ONE day after the bill was signed, I heard by the grapevine that some folks already received their payment! More received it this past week, and more will be receiving it in the next several weeks. Even though Americans knew this was coming, and even though it is the third in a series of payments promoting economic recovery from the impact of the pandemic, it does involve some differences worth noting.

  • All dependents qualify. Under the earlier stimulus payments, households received extra payment only for dependents who were eligible for the Child Tax Credit (i.e. under age 17). However, the new round of payments will include dependents who are older children, parents or others. Caveat: it may not be safe to assume that this includes dependents who are not relatives or other atypical dependents – we will need to watch how the law is applied.
    This is the BIGGEST change, and will affect MANY families!
  • The payments are protected from being held back to pay federal debts, such as back student loans, back taxes or back child support. However, as of now, these funds are not protected against private debt collectors after they arrive in your bank account; they could be seized (garnished) for repayment of credit card debt or other private debt.
  • The payments are available to people below certain income limits, just as before, but this time the phaseout is steeper. The phaseouts are as follows: Single Filers and Married Filing Separate phase out from $75,000 – $80,000; Head of Household phases out from $112,500 – $120,000; Married Filing Joint, from $150,000 – $160,000.
  • The steep phaseout means that for some households, the difference in income from one year to the next may be important. The income guidelines may be applied to your income for either of two or three tax years, and if you meet the rule for any of the years, then you will be eligible. For starters, they will check your most recently-filed return, which may be either 2019 or 2020. If you were below the threshold for 2019 but above it for 2020, it may be worthwhile to delay filing your 2020 return until you receive your payment. If your 2020 income is within the limits, then your 2020 return will be used, as long as it is filled within 90 days of the tax-filing deadline of May 17, 2020. And if you didn’t qualify based on 2020, you can still receive the payment as part of your 2021 tax return.
    One key implication: if your income in a normal year would put you above the limits, but you had lower income in 2020, then get your 2020 tax return filed before that deadline of 90 days after May 17!
  • If the payment is made based on your 2019 or 2020 income, and then your 2021 income proves to be above the limit, you will not need to pay anything back.

Source: Kitces.com

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Unemployment Compensation Exclusion – Stay tuned!

When the American Rescue Plan was passed recently, consumers paid most attention to the $1400 stimulus checks (which we’ll discuss in an upcoming post), but there’s another feature that has gotten less attention. If you received unemployment compensation in 2020, it’s good news for you!

The first $10,200 of unemployment income you received in 2020 will now be excluded from your taxable income. This exclusion applies in 2020 only. Exception: you are not eligible for the exclusion if you are a high-income household (over $150,000). In states that follow most provisions of federal tax law, including Iowa, the exclusion also applies to state income tax.

This Unemployment Compensation Exclusion will make a big difference on tax returns for people who qualify, reducing tax bills (and/or increasing refunds) by $1,000 or more for some households. Note: the amount depends on how much unemployment compensation you received and on your total taxable income.

The software we use at Volunteer Income Tax Assistance (VITA) sites was updated very quickly; the update was in place by Friday March 19, only a week after the law was signed. I’m sure the same is true for most other tax software packages.

Some of you may be wondering: what if I filed my tax return earlier in the season??

Do not fear – you are also eligible for the exclusion. However, we do not yet know how that is going to be handled; we need to wait for word from the IRS. For now, the IRS says: “WAIT – don’t take any action until we’ve announced how you should handle it.” The worst-case scenario is simply that you would need to file an amended tax return.  However, some of us are hoping that the IRS and their computers will be able to simply pull out those tax returns, recalculate them, and issue the additional refunds. If that would happen, taxpayers would see two results: 1) an additional refund (check or direct deposit); and 2) a letter explaining the adjustment. Don’t be surprised if the refund arrives before the letter. The same issue arises for state tax returns, and the possibilities are basically the same as well: they may be able to recalculate and issue additional refunds with no action from you, OR you may have to file an amended return. Reminder: for now, the IRS does NOT want anyone to file amended returns for this purpose.

If you are eligible for the Unemployment Compensation Exclusion but filed your taxes before it was enacted, you will need to stay tuned for more information and you may need patience. As always, never ignore a letter from the IRS, and pay attention to your bank statements.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Spring! Money?

This clump of allium is always a happy surprise later in spring.

The other day, a friend of mine posted a picture of crocuses blooming in her yard. That’s on top of a string of beautiful weather that we Iowans have been delighting in. It’s a good reminder for all of us that many of the best things in life are completely independent of money.

Most people have days (or weeks or months) when money is tight, or money decisions are overwhelming, or it’s clear that you will need to choose to do without something that you normally spend money on, When those days occur, let’s all remind ourselves of the crocuses, or the greening grass, or the beautiful sunset, or the smiles and hugs of our children.

Money does matter. But it is never the most important thing. It is encouraging to remember that.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Another Fraud-fighting Tool

I recently learned about the USPS service called Informed Delivery. If you choose to sign up, you will then receive notifications when mail and packages arrive, but they’re not just blank notifications; you actually get a picture of the letter(s). That means I can see who my letter is from. Note: it does not provide an image of items that are not “letter-sized,” such as magazines or advertising. Depending on the security of your personal mailbox, this could be a great reassurance that no one has taken any of your mail. OR if an important piece of mail is scheduled to be delivered, it may allow you to plan ahead and make sure someone is there to pick up the item immediately.  

Informed Delivery also confirms package delivery, so it could protect you against “porch pirates” who might steal your packages. It also allows you to leave specific delivery instructions if you won’t be home to receive a package on a certain day.

Preventing mail theft is valuable — if certain pieces of mail end up in the wrong hands, they could leave you susceptible to identity theft and other types of fraud. I see it as a nice convenience too. I’m thinking about my adult children, both of whom live in housing complexes where they have to walk outside to get to their mailboxes. This service would let them know whether it’s worth going after the mail on any given day! 

The notifications arrive by email; additionally an app is available for either I-phones or Android devices. Learn more!
A big thanks to my friend Janel, who has family connections in the postal service, for sharing this tip!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Health Insurance Marketplace Reopens

Normally the health insurance marketplace is open just once a year in the fall (Nov 1 – Dec 15). This year, however, the government is opening the federally-run Marketplace today (February 15) for three months. Since Iowa uses the federal marketplace (www.healthcare.gov), this opportunity is available to Iowans. For readers in other states: many of the state-run health insurance marketplaces are also opening for the same three-month period.

Are you worried about choosing a health insurance policy? ISU Extension is offering a one-hour online workshop called “Smart Choice Basics” to help you understand key factors to consider when choosing a policy. The workshop is free, but pre-registration is required. Two options are available – choose the one that fits your schedule, and preregister today!

In the health insurance marketplace, Americans who do not have quality coverage available on the job can enroll in insurance plans that cover the ten essential benefits (including prescriptions, mental health care, rehabilitation, and more). In addition, you may qualify to get help paying the premiums, through the Premium Tax Credit. You may be eligible for a Premium Tax Credit if your income is below: $51,000 (single); $68,900 (couple); or $104,800 (family of four). Find out more at www.healthcare.gov. NOTE: if you are very near the income limit, you are eligible for only a small amount of help, but it does cap the percentage of your income you’ll need to pay for health insurance.

Keep in mind: You can always have a “special enrollment period” in the marketplace if you lose your insurance (e.g. leave your job, get divorced, or other reason). This new opportunity can be helpful for people who didn’t sign up when they could have, but have now decided that they need insurance after all.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Every Little Bit Counts

I raise bees, then extract and sell their honey. I set my finances up so I can keep that money separate and use it to buy or replace equipment, hoping my hobby would support itself. If I run my apiary as a business, I would need an EIN (Employer Identification Number), and would need to keep good records of all my Income and Expenses. If I run my apiary as a hobby, I will still need to keep good records because I will need to report my income. Personally, I would keep track of my expenses even though they will not help me when filing my tax return. As much as I love bees and their honey, I want to track my expenses to make sure I am not losing too much money with this hobby.

An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. As a business, you will use a Schedule C to report your business activities (income and expenses) and determine what tax should be paid.  You will also be expected to pay self-employment tax quarterly.

As for me and my hobby, I will report my honey sales on a Schedule 1, line 8 of the Form 1040. The income won’t be subject to self-employment tax. On the downside, I may not be able to deduct expenses associated with my apiary.

So, you might be wondering now, “why report the income if I will have to pay taxes on it?” The first reason is that the law requires it. But in addition, there are at least two ways you can benefit from reporting the income.

  • If you have a lower income and are trying to make ends meet by working on the side, any earned income will be used to calculate the Earned Income Credit. Hobby income is not considered “earned income,” but if you report it on Schedule C as business income, then it is considered “earned income.” The earned income credit (EIC) is a tax credit that helps certain U.S. taxpayers with low earned incomes reduce the amount of tax owed on a dollar-for-dollar basis and may result in a refund to the taxpayer if the amount of the credit is greater than the amount of tax owed.  
  • Another benefit of reporting that income as earned income relates to Social Security. Remember that the monthly social security check you will receive in the future is based on current and past work and earnings history. Social Security retirement benefits are based on your average indexed monthly earnings (AIME) over your 35 highest-earning years.  You must have 40 quarters of at least $1410 (2020 rule) of earned income to qualify for Social Security.  Though the income from any job-on-the side is not enough to live on, it may be worth counting toward your 40 quarters and the calculations used to determine your future social security check.
Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Reduced Income in 2020? Check on the EITC

Today is EITC Awareness Day — a great day to remind people about the benefits of the Earned Income Tax Credit. This credit is an “add-on” to your tax refund if you qualify — it is designed to provide a financial boost to working people with low and moderate incomes. This one-minute video gives a great overview!

Even if you’ve never been eligible for the EITC in the past, there’s a chance you might be eligible for it in 2020 if your income was lower, and within the income guidelines. Two figures affect the amount you receive: your total income (Adjusted Gross Income) AND your earned income — income that was payment for work. The maximum income guidelines depend on family size; the highest limit ($56,844) applies to married-filing-jointly households with three or more children. Other eligibility rules apply as well; check out the details and/or use the IRS screening tool.

P.S. Maybe you never guessed the IRS had a YouTube channel! Their videos do a great job explaining lots of tax topics!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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File Your Taxes for Free

Due to COVID, many VITA or AARP volunteer income tax sites are either closed this year or operating at limited capacity, in order to protect the health of all involved. If you have relied on free tax assistance in the past, what can you do now?

IRS Free File is one great answer. It’s an agreement the IRS has made with a number of tax software companies, so that people with incomes below $72,000 can use the software packages to file their federal return (and sometimes their state return) for free. There is no need to be intimidated by the idea of filing your own tax return — these software packages are designed to be very consumer-friendly. If you paid attention last year when your tax preparer reviewed your return with you, and if your situation this year is similar to last year, you are a perfect candidate to do it yourself!

When preparing your own tax return, be sure to:

  • Use a secure internet connection (don’t use public wi-fi at a coffee shop)
  • Read and answer the questions carefully
  • Take your time and double-check the information you enter
  • Remember that you can start one day and not finish – you can come back later when you’ve gathered more information.
  • Save the pdf of your return so you have a copy for next year.

If your tax situation has changed significantly since last year and you are not comfortable preparing your own return, there still are volunteer income tax sites available.  The IRS has a VITA site locator tool to help you find a site near you. NOTE: The site locator tool is not yet active — the IRS plans to have it operational by February 1. Likewise, the AARP Foundation Tax-Aide Locator is expected to come on-line in early February.

If you are eager to get moving now, remember that the IRS will not even begin accepting 2020 tax returns until February 12, due to late December changes in the tax law. We’ll all need to be patient for our tax refunds this year!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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