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Washington Watch - March 26, 2015

Thursday, March 26, 2015

NASE Supports Payroll Cards

The NASE in conjunction with several organizations communicated its support of payroll cards in a letter to the Consumer Financial Protection Bureau. The Bureau recently released a proposal regarding prepaid accounts in an effort to protect employees from bad practices. The letter proposes that the Bureau make three changes to their proposal:

First, we would ask the Bureau to rethink the proposed “warning” that would lead off the short form disclosure. We believe that the formulation “you do not have to accept this payroll card” and the advice to “ask your employer about other ways to get your wages,” are unduly negative and will discourage employees from using a payroll card. We would ask the Bureau to adopt a neutral formulation that does not needlessly discourage use of these safe and beneficial products.

Second, and relatedly, we would urge the Bureau to allow issuers to provide an accurate picture of the card’s fee profile in the short form disclosure, rather than insisting that they only show the highest possible fee in relevant categories (which employees likely would avoid).

Finally, we would ask that the Bureau clarify what constitutes “acquisition” in this context so that employers may continue to provide informational packets (provided by the financial institution) to employees that include both the relevant disclosures and a card that an employee may subsequently decide to use to receive his or her wages.

In 2013, $30.6 billion was loaded onto payroll card and the figure only continues to grow.

The full letter can be read here.


Freelance/Sharing Economy Entrepreneurs Welcome!

Whether it’s the private car service Uber or Lyft, the online marketplace Etsy or an accommodation provider called AirBnb, these small and individual entrepreneurs operating in the shared services space are part of the growing small business community in what is being called, the “freelance economy”. The National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, welcomes these new entrepreneurs to the largest small business demographic while reminding them of their rights and responsibilities.

These sole entrepreneurs express qualities of not being an employee of any other entity, control their own destiny’s and decide themselves when, where, how long, how much, how often and for how much they work. The “freelance economy” includes a variety of new and growing entrepreneurs who operate as independent contractors, on-demand employees, small employers or a variety of shared services for car rides, shopping, and lodging. In this regard, anyone can operate his or her own small business by becoming an independent contractor with a larger, umbrella corporate business operation. But under these arrangements, there are specific business responsibilities such as wage and hour laws, tax obligations, liabilities for accidents, and pension and nondiscrimination rules. For instance, these entrepreneurs may receive paychecks without any federal and/or state government tax withholdings. Despite being self-employed, they may still be required to pay a host of taxes, including income, self-employment, Social Security, and potentially Medicare tax.


Tax Filing Deadline Approaching!

2014 TAX CHANGES AND ADJUSTMENTS

- The new Affordable Care Act (ACA) penalty for non-compliance

- Potential individual exceptions to the ACA penalty

- A streamlined, standard home office deduction available

- The standard mileage rate for business use of an automobile has changed to 56 cents per mile (57.5 cents for 2015)

- Limits for retirement plan contributions such as IRAs and 401(k) plans have increased

- The loss of the applicability of Health Reimbursement Accounts (HRAs)

TIPS FOR FILING

- You are not alone: use many of the countless NASE resources available to help you through your preparation, in addition the SBA and local Small Business Development centers are standing by to help

- Get details straight from the source: bookmark the IRS website in order to get the details you need

- Look for hidden deductions: many people overlook deductions that could save thousands of dollars

- File Electronically to avoid math errors

- Avoid shortcuts

- If you just can’t get it done, you can ask for more time


Washington Watch Online

Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.

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