We’ve curated some of the topics trending on the web regarding independent contractors over the last month.
Silicon Valley Bank Collapse
If you didn’t have money in SVB, the bank’s collapse may feel strange and intangible. But the implications can, and in many cases already are, coursing through the larger economy. (Signature and Silvergate banks also collapsed, and USB is buying Credit Suisse.) To read more about how the bank collapse could affect you, from interest rates to higher banking fees, click here.
Luckily, SVB was FDIC-insured, meaning that the government insures up to $250,000 per account. Silicon Valley is one of the wealthiest areas in the country, not to mention a hotbed for tech startups and venture capital firms. You can imagine that a high percentage of their accounts held over $250,000––and they’re getting it all back. In a decision aimed at restoring trust, the FDIC announced that it would protect even uninsured deposits.
What should you do?
Don’t panic and pull your money from your financial institution. If enough people do that, a bank has a much higher risk of collapsing. (A “run” contributed to SVB’s collapse.)
Do take advice from the quirky idiom “don’t put all your eggs in one basket.” In this case, diversify your portfolio. Having money in an IRA, investment portfolio, and bonds is a good way to ensure that if one ship goes down, your whole livelihood isn’t on it. And it’s a great idea to make sure your main financial institution is FDIC-insured. (If it’s a major bank, it probably is.)
Tax Day is Right Around the Corner
Tax Day is April 18, 2023! Unless your area was impacted by a natural disaster, in which case you may be eligible for an extension.
Tax season can be stressful for independent contractors. If you typically file your own taxes using online software, don’t forget to check out the IRS Free File program. If you’ve never worked with a CPA before, there’s no time like the present! A CPA can save you money, especially if you have various income streams.
At the ICBA, we understand the complexities of filing taxes as an independent contractor. Our toolbox is full of helpful information. Be sure to read our Independent Contractor’s Guide to Paying Taxes to help answer your questions.
DOL Proposal
Last fall, the Department of Labor proposed a change in how employers are able to classify independent contractors and employees. The comment period was extended once and then closed on December 13, 2022 after drawing over 55,000 comments.
Supporters of this proposal say that misclassification of employees as independent contractors robs many people of the benefits associated with full time employment, such as healthcare, paid leave, and contributions towards a retirement account.
Opponents, such as The Association of Builders and Contractors, counter that the change further complicates the rule and will negatively affect both employees and employers.
At present, no final decision has been made. Check out this article from Business News Daily for more information.
Student Loan Limbo
If it feels like we’ve been talking about student loan forgiveness for years, it’s because we have been. Alleviating student loan debt was one of President Biden’s campaign pledges, so it has been in the public discourse since before the last presidential election.
So what’s the status?
On February 28, 2023, the Supreme Court argued the case. We can expect a decision to be announced in approximately three months. Until further notice, the payment pause is in effect until later this summer.