Public Service Loan Forgiveness ... Do You Qualify?
Do you work for the CDC? VA? Emory? A non-profit?
Do you still have federal student loan debt?
Have you previously tried getting your loans forgiven through the PSLF program and failed?
Good news!!
In October 2021, exciting (and temporary) changes were made to the U.S. Department of Education’s Public Service Student Loan Forgiveness Program, significantly increasing the number of federal student loans that qualify for forgiveness. There are some technical requirements that must be met: a particular type of loan, making a set number of payments (120), 10 years of work service and working at a qualifying institution.
What is the Public Service Loan Forgiveness Program?
According to the Department of Education website, “The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”
What qualifications are needed for the federal student loan forgiveness program?
Your loans must be federal student loans … NOT private. ** You can determine if the loan is a federal loan if it begins with “Direct.”
You have to make 120 qualifying monthly payments
Work for a qualifying employer (a nonprofit or government institution)
Work full-time ( at least 30 hours a week)
10 years of work service with a qualifying employer
Check out this PSFL tool on the federal student aid website to help determine if you qualify.
What changes have been made to the PSLF?
Good news - if you did not qualify for PSLF before, you may qualify now! This program began in 2007, and although the ‘qualifying employment’ requirement has not changed, the program now allows all federal student loan payments to be counted toward the PSLF program. Previous disqualifying factors, such as an ineligible loan type or repayment plan, will no longer automatically make you ineligible.
Several clients have said, “I consolidated my loans years ago, so I don’t think I am eligible for forgiveness.” Even if you consolidated your loans when you began making your initial loan payments, these loans may still be eligible for forgiveness if they are federal student loans.
When should I get started?
This is a temporary expansion, so you will need to have your paperwork and applications submitted by October 31, 2022. The sooner you get started the better.
How to get started?
Creating an account at www.studentaid.gov is definitely your best first step. The account will be established within 3-5 days. Once you gain access to your account, your loans will be listed and you will be able to determine the number of payments made. In addition, there will be an eligible employer database that you can search.
How can we help?
This program has been changed significantly, and we understand there are a lot of qualifications and grey areas. Where you may not have qualified under the previous PSLF program, the temporary expansion could accept your application and see ALL of your debt wiped out! This is where we can help. If you are unsure of the process and/or if you qualify, we can work with you to identify next steps and walk you through the process.
Here’s what you’ll need:
Student loan documents - the latest statement or access to your federal student aid profile
Your latest income tax return
Name of your employer
Work service history
We can go through this information and process together. If you don’t qualify, we can identify why you don’t qualify and how you can go about qualifying in the future. We can help you consolidate your loans (if needed). And finally we can help you complete the application process.
If you have been putting this off, don’t worry, we are here to help. Set up a Zoom meeting (or consultation) here:
How Managing Your Money Can Make You Happy
Does managing your finances bring you and your family happiness?
You are probably thinking: Josh are you insane? I do my best NOT to think about my finances. Discussing finances brings on stress and tension with my partner, not happiness.
Josh, what is your definition of happiness?
Defining Happiness
Happiness is the joy felt while pursuing one’s full potential.
Let’s break it down a bit, starting from the end of the sentence.
You can’t reach your full potential, if you haven’t defined your goals.
“One’s full potential” is something that we all want to achieve, to be our best self. We want to be engaged in doing things that makes us shine our brightest. It is what all of our short/mid/long term goals should add up to.
“Pursuing” happiness is not something that is given to you. You have to pursue it. You have to work for it. In the U.S. Declaration of Independence it says “life, liberty and the pursuit of happiness”. There is “work” involved and work is not easy. Often people don’t achieve it, it’s ephemeral in their minds.
“Joy” is something that we all want to experience… a big smile from our child, a loving embrace from our partners, shared laughter with friends.
a common pitfall I see with henry’s
Many of the HENRY’s I meet are not intentional with their money. Being financially comfortable, lulls them into a false sense of financial security.
a “henry” Is
a High Earner Not Rich Yet
As a result, they aren’t making progress towards their goals. Often they haven’t even defined their goals. And if you haven’t defined your goals, you can’t reach your full potential.
HENRY’s often feel confused and let down when they take stock of their lives. They don’t understand how despite their high income, their growing investments and net worth, they still feel something lacking. At work they keep taking on more responsibility, growing their income and yet, they have nothing to show for it at the end of the year, except for a few fancy vacation memories on their Facebook and Instagram accounts.
Being intentional with your finances, will, in fact, lead to happiness. If you work towards investing your money thoughtfully in a personal set of goals, you will be working towards your full potential. Think of those vacations in the context of the fun you will spend with family. Rather than the context of “escaping” work. It is a subtle mindset adjustment, but one of those is actually working towards a greater goal.
are you ready to be happy?
Are you ready to pursue your full potential? I help HENRY’s define their personal goals, create a plan to get to achieve those goals and intentionally manage their money. Contact me for a free consultation to discuss your game plan.
Why Everyone is Talking About Their Extra COVID Cash
Even though we are doordashing dinner, our grocery bills are exploding and we’re buying new bikes… our checking accounts are unusually flush with cash and credit card bills are low.
We’ve been forced to save during COVID-19
On average we’re spending 25-30% less due to the coronavirus.
Businesses are closed and we are staying home. Spring and summer plans were cancelled and refunds are rolling in from flights, hotel reservations and summer camps.
What Should You Do With Your extra COVID Cash?
Be intentional with that money, fund your future happiness.
If you are wondering what you should be doing with this new found stash of cash (cache of cash?), I have some suggestions:
1. Let it ride
Most people don’t have 3 month's worth of family expenses set aside in an emergency fund. If you do now, congratulations. Now more than ever, the argument for having a sizable chunk in cash is becoming abundantly clear. Set this money aside for the unexpected.
2. Upgrade Your live/work space
If you have been considering updating your furniture, splashing some new paint on the walls, or turning an extra bedroom into a study … now is the time to do it. You will likely be spending more time working from home in the future. And your kids are going to be schooling at home in the coming years (including your college kids). It all adds up to many more hours a day in your house. You might as well take the time to make it as comfortable as possible. Talk to a local designer or use an online tool. We’ve been using Havenly.
3. Upgrade your yard
Just as important as your inside living space, is your outside living space. Now is the time to invest in beautifying your yard. There are added benefits as well, as gardening is a wonderful outlet for any extra time you may have. And it is also helpful work for finding mental head space/peace.
4. Get Your Credit Cards in Control
If you have let your credit cards get a bit out of control, now is the time to pay them down, and assess what you really need to be spending. Part of that is getting control of those recurring needling $8-$100 expenses that get lost on your credit card bill. Now they are suddenly super visible. Start canceling subscriptions. Get your credit cards completely under control.
5. Fund your 529s
Invest in your kid’s education. You can put $15k into each of your children’s 529s. I typically suggest aiming to have two year’s worth of in-state tuition set aside when the kids graduate from high school.
6. Fund your IRAS
Setting aside money for your long term financial planning, is always important, and should be done a set cadence. Now could be a brilliant time to fund your 2020 Roth IRA (as well as your 2019 if not yet done). And if you have been hearing about backdoor Roth’s, it is time to implement one. A good read on a back door Roth can be found at the White Coat Investor.
7. Fund your brokerage account
Adding money to your mid/long-term savings can also be done through a standard brokerage account. You will end up paying capital gains taxes, sure, but the market is the best way to earn money, when your time horizon is greater than 5 years. After depositing your money in the account, I suggest dollar cost averaging in over the course of the next several months. Pick a day of the month (I like to use the first of the month), and make your purchases, regardless of the daily results of the SP500. You need some sort of forcing function to make you follow through, in the face of an ever changing market. Not sure what to invest in? Get in touch with me to talk about what to buy.
8. Financially Support Equality + Social justice
Now is the perfect time to put your money to good use, fighting for social justice, right here in the USA. Put your money where your mouth is!
Be intentional with your money, and it can help bring you joy
This time of quarantines has been an instructive time. Use it as a level set to gauge what you really need to be spending. Your extra money, needs to find an intentional place in your life. Make it work towards your ultimate happiness. Don’t let it go to waste!
Black Lives Matter... Put Your Money Where Your Mouth Is
Black lives matter! It is an easy thing to say.
Joining a local march/protest is good for building solidarity and getting educated. Have you also considered supporting the fight against racism financially? If you can, put your money where your mouth is. Here are some places to check out:
Official George Floyd Memorial Fund
Pandemic and Protests, Yet Stocks Continue to Climb?
Just when we thought society was at it’s rock bottom with a global pandemic, the murders of Ahmaud Arbery and George Floyd brought to light the systemic racism that our black friends have to deal with on a daily basis. Across the country there are daily demonstrations and reprisals with curfews by various cities.
Closer to home in Decatur, there have been two instances of racial instability with a group of white high school kids, confronting a black Oakhurst resident and a teenager on video making a racial threat.
The kids are out of school, with no curriculum, camps, access to friends. They wander around bored all day, when not playing video games.
Working parents are adjusting to the “new normal”. Which basically means accepting that kids will wander into zoom calls, working in 15 minute chunks of uninterrupted time and realizing their “work” friends are actual “real” friends.
The economy is showing warning signs
Unemployment dropped from 14.7% to 13.3%. And that is seen as a good sign!! (It has been hovering around 5% for 5 years.)
CBRE reported that landlords were only able to collect 30% of retail rent.
The Fed has never had a balance sheet greater than 5 trillion … it hit that mark on March 27th. As of today, the balance sheet is at 7 trillion. That is some serious stimulus money.
And yet the stock market…
The Stock market (something entirely different than the economy) has been seeing excellent returns.
Bonds are at historically low levels, the 10 year treasury is returning .007. Investors are starting to realize, to get real long term results, you need to be in stocks (and not bonds). As money has moved out of bonds and in to stocks, the market has gone up.
The Stock markets is a leading indicator … in the last 80 years, the market hits its low mark 107 days before the end of a recession. Of note, 107 days from March 23 takes us to the end of June.
Investors are saying
The Stock market is a mechanism to discount and value future streams of cash flow. And given known data, the current Stock market reflects the current information. Which means that investors believe the future is bright. And that there will be a V shaped recovery. But are Americans just ever optimistic?
I’m not so sure.
If you are invested for the long term, the market has a solid history of going up and to the right at around 9.5%. Don’t worry, keep buying in at your set cadence (every paycheck?) and dollar cost average in.
If you are heavy into bonds, it likely makes sense to move your allocation into a higher percentage of stocks, as bonds are not going to keep up with inflation.
If you are all in on stocks right now, it may make sense to increase your allocation into cash right now to 10-20%. There is solid data that shows optimism rules for the short term, after a primary dip, that leads to a nice spike in stocks. But then data comes in over the next few quarters that causes fear, and stocks drop to previous lows. Followed by a long, slow up trend.
If you took cash out of the market towards the beginning of the Covid, then you do need to dollar cost average back into the market and leave the majority of your money invested. Trying to time the market with a large percentage of your investment capital is a bad idea and almost never works.
If you need talk to someone about your allocations, please don’t hesitate to reach out to me.
Emergency Relief for Small Businesses: What You Need To Know About EIDL SBA Loans
All small business owners should apply for the SBA Loan. Here’s what you need to know and how to apply.
All Small business owners should apply for an EIDL SBA loan.
The SBA is offering low interest, long term loans to small businesses for working capital.
Even if you think that your business is going to do well throughout this national emergency, still, apply for the loan. Use it as a line of credit to super charge your growth as you come out on the other side.
What is the SBA and the CARES Act?
In response to the economic impact of the Coronavirus, the SBA, as part of the CARES Act is offering two major programs to provide emergency relief to small businesses:
Economic Injury Disaster Loan Program (EIDL) - offering 2.75 to 3.75% loans, up to $2MM, for continuing operations.
Paycheck protection program - more to come on this. This post is going to focus on #1, the SBA EIDL.
Who is the SBA?
The Small Business Administration (SBA) is a cabinet level office, with the goal of helping entrepreneurs and small businesses. Typically, the organization works with banks, to provide loans and guidance, with the SBA backing the loans.
What is the Emergency Injury Disaster Loan (EIDL) Program?
The EIDL program is generally used for businesses who have survived a nasty natural disaster, such as Hurricane Katrina. When the Coronavirus was deemed a national disaster, funds were opened up for small business.
What is considered a small business?
Typically, a small business has less than 250 employees. But check out this site to determine if your business qualifies.
What types of organizations qualify for a SBA Loan?
LLCs, S-Corps, partnerships, sole proprietors, homeowners and non-profits
How to Apply for an SBA EIDL
At the time of publishing this post, the online process was not currently available instead, you can download the SBA forms , fill them out, and then upload.
To apply for a SBA EIDL you must submit the five forms below:
1. SBA Application (Form 5)
2. IRS Form 4506T
3. SBA Form 413
4. Form 413D
5. Loan Supporting Information Form
6. Last company federal tax return
SBA Application form 5/5c
The first form, the application, will depend on the type of organization:
SBA Form 5: Multi-Member Entities Application (such as LLC, S-Corp, Non-Profit, etc.)
SBA Form 5c: Homeowner / Sole Proprietor Loan Application
Form 5 Tips
Check EIDL in #1.
When picking your entity type, check your state corporation’s division to confirm type and get the date the business was created. For GA businesses, go here.
Note: The “Applicant name” is the business name, not your personal name.
You will need your FED EIN.
In #17, you need to add personal ownership names and addresses.
IRS Form 4506T
Fill out IRS Form 4506T for each member/owner. This is so the SBA can get a transcript of your taxes.
SBA form 413
The SBA form 413, found here, will need to be filled out for each of the owners (>20%).
Form 413D
Form 413D is a personal financial statement
Loan Supporting Information
Last but not least, the loan supporting information, found here.
Company’s last Fed tax return
Submit Your Forms
Once all of your forms are filled out, signed and dated, Upload PDFs here.
If you run a small business, these are trying times. If you have questions or concerns, I am available to help you, just reach out.
6 Stimulus Bill And IRS Changes That You Need To Know
The IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
We are living in some pretty wild times. Things are moving fast in the business world, health care and government. It would appear that our current strategy of homeschooling and social distancing is going to be around for a while.
Due to the COVID-19 crisis, the IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
6 KEY Stimulus Bill and IRS Changes
as of 3/28/20
Fed Income Tax filing deadline is July 15, 2020
The IRS and Treasury department decided to extend the Federal income tax filing deadline for both individuals and businesses normally due on April 15 to July 15. This is an automatic extension, there are no required forms to file. If you cannot meet the July 15th deadline, you will still be able to file an extension, using form 4868 for individuals and 7004 for businesses.
June Quarterly Estimated Payments are STILL due
Note that payments normally due on June 15th for quarterly estimated tax payments have NOT been extended.
If you are due a refund, file it asap.
If you are due a refund from the Fed or state, it is strongly advised to go ahead and file your return. Time value of money suggests the faster you get the money, the more valuable it is. So, get it done if you are set to get a refund. Most tax refunds are still being issued within 21 days.
Individual contributions are extended to July 15, 2020
Individuals are being given an opportunity to make contributions to IRA, Roth IRA, HSA and MSA accounts until July 15th.
Payments are not automatically delayed
If you have already filed your return, owe taxes and have scheduled a payment for April 15, the payment will not be automatically delayed. You must cancel the payment and then reschedule it for July 15.
4 ways to cancel and reschedule your payment
If you scheduled a payment through IRS Direct Pay, you can use your confirmation number from the payment to access the Look Up a Payment feature. You can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
If you scheduled a payment through Electronic Federal Tax Payment System (EFTPS), click on Payments from the EFTPS home page, login, then click Cancel a Tax Payment from the left menu and follow the instructions. You must do so at least two business days before the scheduled payment date.
If you scheduled a payment as part of filing your tax return (authorizing an electronic funds withdrawal), you may revoke (cancel) your payment by contacting the U.S. Treasury Financial Agent at 888-353-4537. You must call to make a payment cancellation request no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
If you scheduled a payment by credit card or debit card, contact the card processor to cancel the card payment.
Recovery Rebates: The CARES bill provides payments to taxpayers.
“Recovery Rebates” are being treated as advance refunds of a 2020 tax credit.
Under this provision, individuals will receive a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child.
The credit is phased out for taxpayers with adjusted gross income (AGI) above $150,000 (for joint filers), $112,500 (for heads of household), and $75,000 for other individuals.
The credit is not available to non-resident aliens, individuals who can be claimed as a dependent by another taxpayer, estates or trusts.
Taxpayers will reduce the amount of the credit available on their 2020 tax return by the amount of the advance refund payment they receive.