| Thanks for reading the May edition of Taxing Times. This month, I have something cool for you--it's money. Did you know that 1 in 10 Missourians have unclaimed funds? Check out the link on the left. It'll only take a minute of your time, so why not try it? For those of you not from Missouri, I've included a national link below it. (I tried the national one and found I have money from a 20-year-old insurance claim in Massachusetts!) |
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Student Loan Forgiveness for the Arts and Public Service  A tag-along provision to the new health care bill is related to student loans for persons working in the non-profit sector. If you're working for a non-profit organization (or will be when you graduate) and you have student loan debt, you could be eligible for loan forgiveness after 10 years of on-time payments. Okay, yes, there are a ton of rules and requirements and record keeping, but if you're in the arts or public service, you should click on this link and find out more.
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The Accidental Entrepreneur  It's summertime and the students will be out looking for summer jobs. Every year at tax time, I wind up helping some kid whose summer job made him or her a 1099 employee. That means they just get paid a straight rate and no taxes are taken out. According to the IRS, if you receive a 1099, you're self employed--that means filing a Schedule C and paying self employment taxes. Even if you're only 16! So how does this work? Let's say Johnny gets a regular summer job making $10 an hour working 40 hours a week. If he takes out no withholding for state and federal taxes, his weekly paycheck will be $369.40. Come tax time, assuming he only worked 12 weeks, he'll owe no tax and won't even have to file. His net take home for the summer will be $4,432.80. Now let's say that Johnny takes the same summer job as a 1099 employee. He gets to take home the full $400 each week, but come tax time, Johnny now is required by file a tax return and he'll owe $678 to the feds. Now Johnny's net take home is $4,122. It's okay to take that 1099 job, just know in advance what it's going to cost you. |
