Running your business can sometimes feel like navigating through a complex video game on the highest difficulty. With all the responsibilities resting on your shoulders, it's no wonder that keeping up with the latest tax updates may not be your top priority. But fear not, because we are here to help you level up your tax knowledge and unlock the hidden benefits you may be missing out on!

Demystifying Tax Credits and Deductions

Tax credits and deductions can be a bit confusing, primarily because they have different rules and outcomes regarding reducing your tax liability. Let's clarify things a bit:

Tax deductions allow you to lower the amount of taxes you owe by subtracting eligible expenses and liabilities. These deductions are applied when you file your yearly tax returns and are usually specific to the tax year.

Tax credits, on the other hand, are like nifty power-ups that grant you a refund on taxes you've already paid. They can be retroactive, triggered by new laws passed by the government. However, unlike deductions, tax credits result in actual money being refunded to you. This means they can have a significant impact on your financial bottom line.

Why Freelancers Should Care About Tax Credits

For freelancers and gig workers, tax credits can be a total game-changer. They provide an incredible opportunity to boost your earnings and retain more of your hard-earned money. As a self-employed individual, it's crucial to seize every possible tax break that comes your way, and tax credits are no exception.

The FFCRA: Unveiling New Possibilities

Enter the Families First Coronavirus Response Act (FFCRA), a piece of legislation passed in 2020 aimed at aiding businesses in reimbursing sick leave payments to their employees during the COVID-19 pandemic. In 2021, the CARES Act expanded the scope of the FFCRA, extending its tax credits to freelancers, 1099 workers, and sole proprietors like yourself.

Unlocking the FFCRA Tax Credit Bonanza

Under the FFCRA, eligible self-employed individuals can unlock lucrative tax credits for paid sick leave and expanded family and medical leave. If you were unable to work due to COVID-19-related reasons, such as quarantine or caring for a child whose school or daycare closed, you might qualify for these tax credits.

Maximizing Your FFCRA Refunds

Now, let's delve into the numbers. The FFCRA allows you to claim up to 110 days in total for family and childcare-related reasons, along with 20 days of paid sick leave. While you can claim as many days as necessary, keep in mind that you cannot double-dip and use the same date for both childcare and sick leave purposes.

The amount you can receive depends on your self-employment income, as reported on your 2020 or 2021 Schedule SE form (Form 1040). For paid sick leave, the maximum daily refund is $511. For family and childcare-related reasons, you can receive $200 per day or 67% of your average daily income—whichever amount is lower.

We understand that the calculations might seem a bit overwhelming. Fortunately, we've got you covered! Our 3-minute pre-qualification quiz can help you determine the exact amount you're owed. It's quick, easy, and will save you from any potential headaches.

Who Qualifies as Self-Employed?

Determining if you're considered self-employed can be a bit tricky, especially if you have multiple jobs in various industries. Luckily, the IRS has simplified the definition for you: Did you file a Form 1040 (Schedule SE) in 2020 or 2021? If the answer is yes, then according to the IRS, you're officially classified as a self-employed individual.

Still not sure? Here are some examples of occupations that typically require filing a Form 1040 and fall under the self-employed category:

• Handyman

• Hairstylist

• Event staffer

• Real estate agent or Realtor®

• Freelancer

• Gig worker

• Rideshare driver

• Food delivery driver

• Independent contractor

• Sole proprietor

Please Note: Determining your eligibility may become more complex if you received both a W-2 and a 1099. In such cases, it's best to consult a CPA who can guide you through the process.

Is the FFCRA Right for You?

In order to qualify for the FFCRA tax credits, your self-employment income must have been impacted by COVID-19. This could be due to restrictions or illnesses affecting you or someone under your care. Here are some examples of situations that make you eligible:

• Federal, state, or local governments require you to isolate or be under quarantine.

• Your healthcare provider advised you to self-quarantine due to COVID-19-related concerns.

• You were experiencing symptoms of COVID-19 and were seeking a medical diagnosis.

• You were waiting for COVID-19 test results or were getting vaccinated.

• You were recovering from side effects caused by the COVID-19 vaccine.

• Your child's school or daycare closed due to COVID-19, and you needed to care for them.

• You were taking care of a loved one who contracted COVID-19.

The eligible dates for FFCRA relief are as follows:

For childcare-related reasons: A maximum of 50 days between April 1, 2020, and March 31, 2021, and a maximum of 60 days between April 1, 2021, and September 30, 2021.

For paid sick leave: A maximum of 10 days between April 1, 2020, and March 31, 2021, and a maximum of 10 days between April 1, 2021, and September 30, 2021.

Streamlining the Application Process with SETCCREDIT.org

We understand that navigating the intricacies of applications and paperwork can be overwhelming. That's why we've partnered with Gig Worker Solutions, a robust platform designed to guide you through the entire FFCRA application process. With our user-friendly interface, we ensure you get the maximum tax refund possible while minimizing any headaches.

Embrace the FFCRA: Secure Your Financial Future

As a freelancer or sole proprietor, staying informed about new tax opportunities that benefit your business is crucial. The FFCRA offers invaluable tax credits that can alleviate some of the financial burdens caused by the ongoing pandemic. Don't let these opportunities slip through your grasp!

At Claim My Credit, we believe in empowering freelancers and sole proprietors like you with the knowledge and tools needed to thrive in the increasingly competitive business landscape. By leveraging the FFCRA tax credits, you can keep more money in your pocket, ensuring the long-term success and sustainability of your freelance career or small business.

So let's embark on this tax-saving adventure together. Join us at SETC Credit and unlock the full potential of the FFCRA tax credits! Your financial future awaits.