Latest news with #Weisberg
Yahoo
14-04-2025
- Business
- Yahoo
I'm an Independent Contractor: Why I Pay Quarterly Instead of Annual Taxes
As an independent contractor, you have a lot of flexibility to determine when, where and how you work. On the other hand, there's not as much wiggle room when it comes to paying your taxes, which lots of freelancers have to do not annually, but quarterly. Consider This: Find Out: Why are taxes for someone working a 1099 or other freelance job set up like this? GOBankingRates asked some freelancers and tax experts why quarterly payments are made instead of annual taxes. One freelancer — who wished to remain anonymous — has a business that combines photography, filmmaking and graphic design and noted that being an independent contractor allows them a freedom that a typical 9 to 5 job does not. This independent contractor pointed out that there are multiple reasons why they pay quarterly taxes as opposed to annual. 'First and foremost, it is easier to save weekly and pay quarterly than it is to pay annually,' the freelancer commented. 'I speak from experience as I have done both. I always found it so stressful going into tax season because I knew I would have to pay a chunk.' 'Independent contractors are required to pay quarterly taxes because they don't receive a paycheck,' explained Stephen A. Weisberg, founder of The W Tax Group, a nationwide tax defense company. Explore More: Weisberg went on to describe how when someone is an employee for a company, their taxes are taken out of their paycheck every time they are paid. Then the taxes are sent to the IRS to make sure the employee pays taxes on the income earned. 'But when you're an independent contractor, whether you're a freelancer, gig worker or small business owner, taxes are not being automatically withheld from your income,' continued Weisberg. 'The IRS doesn't trust that you're going to have enough money to pay the tax you owe at the end of the year, so they make you send in taxes each quarter instead.' Weisberg cautioned that any freelancers or independent contractors who do not make estimated payments each quarter could be subject to a penalty. While this fine might not be incredibly expensive, it is still money that does not need to be spent, especially if a 1099 worker is on a limited income. 'There are no/little penalties to pay if you are submitting quarterly payments even if you underpay,' the freelancer who spoke to GOBankingRates explained, adding 'I was audited in 2014, which is very unpleasant, and in my case, it was due to an error by a client. But that taught me to keep better books even if I'm not making millions.' The freelancer noted that they typically plan to pay 12% of their independent contractor earnings each quarter by automatically transferring a set dollar amount every week into a separate bank account solely for taxes. 'The real issue with not making estimated payments is when you don't have enough money to pay your taxes at the end of the year, at which point huge penalties arise, and IRS-enforced collections begin,' concluded Weisberg. 'Paying quarterly allows you to pay as you go somewhat similarly to if your taxes were taken from your paycheck.' More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early Here's the Minimum Salary Required To Be Considered Upper Class in 2025 How Far $750K Plus Social Security Goes in Retirement in Every US Region This article originally appeared on I'm an Independent Contractor: Why I Pay Quarterly Instead of Annual Taxes
Yahoo
29-03-2025
- Business
- Yahoo
5 Tax Deductions Side Hustlers and Gig Workers Always Miss
With this year's tax filing deadline quickly approaching, it's important for self-employed individuals to get a clear sense of what they may owe and how they can minimize their tax bills. Even if you don't consider yourself self-employed, if you have a side hustle or do gig work, then you may need to file a Schedule C to report business income as part of your overall tax return. Learn More: Find Out: When doing so, there are several deductions to be mindful of, such as the following: Also called QBI, the Qualified Business Income Deduction stems from the 2017 Tax Cuts and Jobs Act, providing a deduction for up to 20% of qualified business income. 'QBI is the net income, gain, deduction, and loss from your business minus capital gains and losses, some dividends, interest income, wage income, and others,' explained Stephen A. Weisberg, principal attorney and founder at The W Tax Group. There are also income limitations — 'for 2024, your taxable income must be less than $191,950 or $383,900 for joint filers. In 2025, the threshold increases to $197,950 or $394,600 for joint filers,' he added. While this deduction should be automatically captured by most tax software, it's worth planning ahead for. Many side hustlers and gig workers don't realize that they're able to deduct this, which affects their estimated taxes. Read Next: If you don't have access to health insurance through an employer and buy it on your own, that could lead to substantial tax savings. 'When you're self-employed, you can deduct medical expenses, but you can also deduct health insurance premiums, even if you don't itemize,' said Weisberg. This deduction 'also applies to Medicare premiums,' he added. Considering that health insurance can cost several thousand per year, that could be a significant way to reduce your taxable income. Keep in mind, that eligibility rules can be a little complex, such as if your spouse has access to employer-sponsored insurance. Being a side hustler or gig worker, it might not seem like you have much access to the depreciation deduction, which is often used by larger businesses to write off the declining value of assets like machinery. However, you might be surprised what you can deduct in this regard. In particular, 'under Section 179, you can deduct up to $1.22 million in all qualifying purchases right away,' rather than just taking the depreciation as it occurs each year, explained Weisberg. 'For example, if you're a photographer who bought a $4,000 camera, you can deduct the full $4,000 in the first year instead of having to write it off as depreciation over time,' he there are certain restrictions, like not deducting more than your business income, but in general, this could be a helpful deduction. Another commonly missed tax deduction relates to the self-employment taxes you have to pay as a side hustler or gig worker. 'When you're self-employed, you pay 15.3% in self-employment tax because you're paying both the employer and the employee-required Social Security and Medicare. However, you're allowed to deduct half of that on your return,' said Weisberg. 'For example, if your self-employment tax is $15,000, you can deduct $7,500 on your tax return.' As with QBI, this deduction should automatically be accounted for by any decent tax software, but you don't want to miss it when figuring out your estimated taxes. So, when calculating your Q1 2025 estimated taxes, for example, you might want to calculate what you owe with this deduction worked in. But you don't want to overestimate the effects of this and other deductions either. As Weisberg added, many people end up paying penalties due not paying or properly accounting for estimated taxes. So, the clearer and more proactive you can be about this, the better off you likely are. Retirement contributions can be tax deductible in many situations, but being a side hustler or gig worker could give you access to some new ways to save in this regard. 'When you're self-employed, you can contribute much more than employees to retirement plans using a SEP IRA or a Solo 401(k), which you can deduct on your tax return,' said Weisberg. Lower-income earners may also qualify for an additional tax credit for retirement contributions, known as the Saver's Credit — up to $1,000 for single filers. This could particularly be beneficial for someone who has some financial flexibility, like if you're living off savings while starting a new business, and the relatively low income in the first year of operating enables you to maximize retirement deductions and credits. 'For example, if you contribute $15,000 to a SEP IRA, you can deduct that amount on your return, but you can also get a $1,000 Saver's Credit, assuming you qualify under the income guidelines,' noted Weisberg. More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 12 SUVs With the Most Reliable Engines 4 Things You Should Do if You Want To Retire Early 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on 5 Tax Deductions Side Hustlers and Gig Workers Always Miss Sign in to access your portfolio
Forbes
21-03-2025
- Business
- Forbes
TheSkimm's Co-Founders Carly Zakin And Danielle Weisberg Open Up About ‘Humbling And Exhilarating' Acquisition—and What The Next Chapter Looks Like For The Brand
Danielle Weisberg (left) and Carly Zakin According to Carly Zakin, co-founder of theSkimm, when she and Danielle Weisberg started their company nearly 13 years ago, 'we never could have imagined that we'd be here today.' For Zakin and Weisberg, 'here' is selling theSkimm to Ziff Davis' Everyday Health Group (EHG), an acquisition announced March 19. While the financial terms of the deal were not disclosed, theSkimm had raised a total funding of about $29 million from investors including Shonda Rhimas, Tyra Banks, Goldman Sachs and Google Ventures, according to Variety. Speaking to me via email on March 20, Weisberg says that the acquisition of the company—which was built from the ground up from the couch of the New York City apartment Zakin and Weisberg, both former producers at NBC, once shared—is an emotional moment. 'When we launched theSkimm, we decided to do something terrifying—completely upend our lives to quit our jobs and start a newsletter, with very little money,' Weisberg tells me. 'Starting and building a company is not for the faint of heart, but we bet on ourselves and each other. So, reflecting on our whole journey, joining forces with EHG is both humbling and exhilarating. We're proud of what we've built and eager for what's next.' Weisberg and Zakin at the 'Vanity Fair' Founders Fair. (Photo byfor ... [+] Vanity Fair) theSkimm has grown from its daily newsletter—launched in 2012—to include other newsletters, like Skimm Money, Skimm Your Life and Skimm Well; the brand also has a podcast imprint, including the Zakin and Weisberg co-hosted '9 to 5ish with theSkimm' and also the 'WellPlayed' sports podcast. As Substack newsletters continue to rise in popularity, theSkimm can boast it was founded a full five years before Substack launched in 2017. With its daily newsletter's distinct voice, theSkimm became the voice of the millennial generation, providing a 'skim' of the day's need-to-know news, with the extra 'm' added for a little extra oomph. Beyond being a media company, the team of Zakin and Weisberg—who are one of the rare business partnerships that have seemed to publicly eschew drama, deepening not just their partnership, but their friendship, too—consider themselves an audience company. That audience, which Variety reported is around 5 million millennial and Gen Z female readers, was on Zakin and Weisberg's minds when they made the decision to sell to EHG. 'Our primary goal has always been to serve our audience effectively, so whether or not our initial vision was to get us to this point, partnering with EHG aligns perfectly with our mission and offers immense growth opportunities that are going to serve our audience in even greater ways,' Zakin tells me. Zakin and Weisberg will stay with theSkimm, focusing on guiding the company's strategic direction and 'supercharging' growth, Zakin says. 'We'll be able to lean further into categories that our audience cares about most, like comprehensive health and wellness content,' she continues. 'We'll be offering more in-depth resources to our readers, while staying true to our mission.' Zakin and Weisberg. (Photo by Desiree Navarro/WireImage) And true to that distinct theSkimm voice that readers have come to regard as their early morning wakeup call for over a decade, Weisberg assures me. She adds that the EHG partnership will only serve to enhance the company's resources, 'allowing us to delve deeper into topics our audience cares about without altering our unique tone.' For its part, EHG said in a March 19 statement that theSkimm represented an opportunity to serve the fast-growing category of women's health and wellness. Nan Forte, EHG's executive vice president, said in a statement Wednesday that 'The creation of theSkimm marked a watershed moment in getting vital information to a highly engaged audience of female readers in an incredibly compelling format. We're excited to serve and further satiate the voracious appetite of theSkimm audience for trusted tips and insider information at this fast-growing intersection of women's wellness-based content, community and commerce.' theSkimm—which prides itself on being so deeply audience-first that it has its own brand ambassadors, called Skimmbassadors—still wants to grow, Weisberg tells me. 'We recognized that collaborating with a partner like EHG could amplify our impact,' she says, pointing to health and wellness as areas 'that our audience deeply values.' Weisberg. (Photo byfor Massachusetts Conference for Women 2019) Zakin points to the hard work of theSkimm team and 'our community's unwavering support' as what got the company here. (The company's team numbers about 75, with no current plans to reduce that number, according to Axios, which broke news of the sale yesterday.) Weisberg assures me that the '9 to 5ish' podcast is sticking around, and Zakin echoes that, despite the acquisition, 'theSkimm will remain theSkimm, identifying EHG's commitment to keeping theSkimm true to itself while simultaneously amplifying it as 'one of the main reasons were were attracted to partnering with EHG.' 'theSkimm will feel very much the same to our audience, but they can anticipate enriched content, particularly in health and wellness,' Zakin says. Zakin. (Photo byfor Pennsylvania Conference for Women 2019) According to Axios, EHG's president Dan Stone said that theSkimm's target demographic 'is a core audience for us.' EHG is the health content arm of Ziff Davis, which Axios identified as one of the largest publicly-traded digital media companies; the outlet also called EHG one of the largest health and wellness media publishers in the country. In addition to now theSkimm, EHG also is home to several popular pregnancy and maternity companies, like What to Expect and BabyCenter. theSkimm has dipped toes into several social issues over the years, including health and wellness content targeted at women and mothers specifically, zooming in on the childcare crisis in the U.S. and reproducing content from the federal website on reproductive rights after it went dark earlier this year. theSkimm also offers the Skimm Parenting newsletter among its portfolio of newsletters. As news broke of the sale, ever true to their commitment to their community first, Zakin and Weisberg took to Instagram to share a written message and a video announcing the 'significant milestone in theSkimm's journey,' they wrote. Speaking to their audience, they added, 'We are grateful for so many things. But nothing more than you—theSkimm's community who has supported us on this journey. We do not take your trust for granted.' 'Over the past decade plus, we have grown up—as people, as partners, and as businesswomen,' the message continued. 'And theSkimm has grown up, too.' Co-founders of theSkimm and Spirit of Achievement Award recipients Danielle Weisberg (L) and Carly ... [+] Zakin attend the Spirit of Achievement Luncheon in New York City. (Photo by Brent N. Clarke/Getty Images) Some may see it as the end of an era, but the company sees it as 'the next chapter and more of what you love,' they wrote on March 19. More access to need-to-know information. More of the brand's commitment to give women the ability to live smarter. More of what it's provided for nearly 13 years, but enhanced. Much has happened in Zakin and Weisberg's lives not just professionally but personally in 13 years. They're a long way from that tiny apartment and that couch. But at their core, they're still driven by the same mission, vision and values. I asked Weisberg what she'd tell her younger self, who, with a friend and a dream, changed media: 'We knew that starting and building our own business would take us to places we didn't expect,' she says. 'But looking back, we'd tell our younger selves to trust their instincts, embrace the journey's challenges, and know that their dedication will lead to incredible opportunities like this one.'
CBS News
12-03-2025
- Business
- CBS News
Should I pay off my tax debt before my credit card debt? Experts weigh in
As the cost of living has increased, so has outstanding credit card debt. By the end of December 2024, outstanding credit card balances reached $1.21 trillion, according to Federal Reserve Bank of New York data. This represents a 4.0% increase from the previous year. If you're one of the many Americans in credit card debt, you might also get some unfortunate news this tax season and realize that you owe taxes as well. And, with money tight, you might face a difficult decision and wonder what to pay first — tax debt or credit card debt. We spoke with tax and financial experts to help you navigate this decision. Find out how to get help with your delinquent tax debt. Should I pay off my tax debt before my credit card debt? If you're juggling tax debt and credit card debt, you're dealing with the Internal Revenue Service (IRS) and your credit card companies. Both entities can take action to get you to pay what you owe. However, one has far more reach than the other. "The IRS has significantly more power to take your money to satisfy the debt. In other words, their ability to force you to pay the debt is far greater," says Stephen A. Weisberg, principal attorney and founder at The W Tax Group, a nationwide tax defense company. You'll get a notice at first about paying taxes and what you owe. But if you don't take action, the IRS has multiple strategies to recover the money. "The IRS can garnish your wages, seize your assets, and levy your bank accounts just because you owe the debt," says Weisberg. Since the IRS is a part of the federal government, they have the tools and resources to collect tax debt. Credit card companies can take action as well, but they can't collect in the same way. "Conversely, credit card companies must take additional steps to get you to pay. They can call, send notices, and report you to the credit agencies, but they can't force you to pay until they sue you and get a judgment against you in court. It takes time and it's difficult for them to collect from you," says Weisberg. Compare your credit card debt relief options. Consider interest rates Credit cards have notoriously high interest rates that have only gone up in the last few years. The average credit card APR is nearly 23% currently, a record high. If you don't make a credit card payment for 60 days, you could trigger the penalty APR and your rates will go up even more. Interest rates on tax debt can change but are currently sitting at 7% for underpayments for the first quarter of 2025. While your credit card debt might have higher interest rates than your tax debt, the experts we spoke to generally recommend paying off tax debt first. "Generally, the consequences of IRS debt (liens, garnishments) make it a priority to pay off first, even if the interest rate is lower than credit card debt," says Jeffrey P. (JP) Dowds, CFP®, CPA, and senior wealth advisor at Marshall Financial. While you should focus on your tax debt first, that doesn't mean you should stop paying off credit cards. "Prioritize your tax debt with the highest interest and penalties first, then work on paying the credit card debt with the highest interest rates next. Meanwhile, continue to make the minimum required payments on all debt," says Christine Damico, certified financial professional at Domain Money. Weigh the consequences of not paying If you don't make your tax payment, you could get hit with a failure to pay penalty, which is 0.5% of your unpaid tax each month up to the 25% cap. Be aware that this is different from the failure to file penalty, which is 5% of the tax due each month up to a maximum of 25%. "File your tax return even if you can't pay. It's crucial to avoid further penalties and negotiate payment plans," says Dowds. On the other hand, not making minimum credit card payments can lead to late fees and damaged credit. Late credit card payments can show up on your credit report for seven years. Consider options based on the amount of debt Depending on how much tax debt you have, you may qualify for a short-term or long-term payment plan with the IRS. Short-term plan: To qualify, taxpayers must owe less than $100,000 and have up to 180 days to repay the debt. Long-term plan: T o qualify, taxpayers must owe $50,000 or less and have up to 72 months to repay the debt. Also referred to as an installment agreement. If your tax debt amount is overwhelming and your financial resources still can't make it work with a payment plan, there's another option. "You can also apply for an Offer in Compromise (OIC) to settle for less than owed," says Dowds. Similarly, for those experiencing financial hardship, Damico recommends contacting your credit card company and requesting a reduced interest rate or the possibility of delaying payments. If they agree, get everything in writing. Another reason to prioritize paying off tax debt first is that you may have more flexibility to pay off credit card debt. "Credit card companies generally have more options for managing the debt, such as negotiating low payment plans, lowering interest rates, and debt settlement plans that forgive a part of the debt," says Weisberg. "You can get rid of credit card debt through bankruptcy much easier than tax debt." You can look into a range of credit card debt relief options, such as bankruptcy, a debt management plan, and debt settlement. Experts agree: pay tax debt first The experts we spoke with agree that if you have both tax debt and credit card debt, you should focus on paying off the tax debt first. Given the scope of the IRS and federal government, you want to clear your balance with Uncle Sam or face serious consequences. Learn more about how tax relief could benefit you now. The bottom line Owing taxes and managing credit card debt can feel overwhelming. While experts agree that tax debt should be taken care of first, while making at least minimum payments on your credit card debt, you can look for support for both types of debt. The experts we spoke with recommend looking into the Taxpayer Advocate Service, the National Foundation for Credit Counseling (NFCC) and the Foundation for Financial Planning's Pro Bono service. You can also research legitimate credit card and tax relief options. Getting additional support can help you manage both and be an important part of your debt payoff strategy.
