November 2021 Questions and Answers

QUESTION

What is Direct Primary Care (DPC) and how does it work?

ANSWER

DPC has been around since the mid-2000s, and it’s a financial arrangement directly between a patient and healthcare provider. It cuts out the insurance providers. Instead of paying monthly insurance premiums, you pay your doctor a monthly fee that will generally cover typical primary care services like check-ups, preventative care and basic lab tests. But it won’t cover costs for catastrophic events, so it also makes sense to have a high deductible health plan to prevent financial devastation due to a medical emergency or serious health problem. Consider owning a Health Savings Account (HSA), which has triple tax benefits.

QUESTION

Do I need workers’ compensation insurance for my company?

ANSWER

Workers’ comp insurance provides financial benefits to employees who have been injured on the job, and laws governing its requirement vary from state to state. Several states require employers to have it in place when the first employee is hired. Others have head-count thresholds. For example, Florida mandates workers’ comp when you have four or more workers and aren’t in the construction industry. And typically, business owners can elect to be exempt from coverage. If you use subcontractors, make sure they have their own coverage. If they get injured at your location you may be responsible for paying for their workers’ comp benefits.

Unemployment, Side Gigs and Tax

The pandemic has been front and center most of this year and it may have tax implications for you. If you collected unemployment compensation from either your state or the federal government, it is all taxable as ordinary income. You will receive a Form 1099-G by January 31 that shows you how much compensation you received and how much tax was withheld. If you’re still collecting unemployment benefits in 2021, consider increasing your tax withholding with your state unemployment office if you owe taxes for 2020.

And if you picked up a side gig during the pandemic, remember to calculate your business-related expenses. Since you’ll be filing Schedule C to report your self-employment income, you’ll be able to deduct related business expenses. If you shopped and delivered groceries to people’s homes, you could deduct the mileage you drove, any parking fees or tolls incurred during your shopping work and a portion of your cell phone bill.