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Insurance: Health Insurance and the Unemployed

August 15th, 2010

By Thomas Arrison, Certified Public Accountant

Thomas Arrison of Arrison & Olden

You lost your job and just ran out of COBRA benefits. Where can you find health insurance? You do have several alternatives.

If you are self-employed, you can join your local Chamber of Commerce and get health insurance through them. You generally can get insurance from the big insurance companies and, since they are group plans, the cost is competitive for your area. You also can get better coverage than with a personal health insurance policy. You will probably have to prove that you are self-employed to qualify.

You have a few alternatives if you are not self-employed.

  • Massachusetts has the Mass Connector to help people get the insurance they need.  You will need to wander around within the site to find the coverage that you want. There are income and qualification limits that might affect your coverage. You also might qualify for help with your premiums.

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Finances: How far is too far?

February 17th, 2010

By Thomas Arrison, Certified Public Accountant

Thomas Arrison of Arrison & Olden

Thomas Arrison of Arrison & Olden

You’ve been out of work for months (maybe years) and you finally have found that job you so desperately sought.

It might not be perfect, but it’s a job and you can start paying your bills again.  The problem is it is 100 miles and two hours away.  So for now, 12 hours a day away from home is better than 12 hours on your computer looking for a job.  Did I mention that you could actually start paying your bills?

There is a glitch.  Do you know much it will cost you to drive that 200 miles a day?

The IRS says that the average car costs 50 cents a mile to run (gas, insurance, repairs etc).  That would be $100 a day.  That’s $500 per week— a number that is pretty accurate over a long period of time.

What will you spend out of pocket per week?

And who exactly has an “average car”?

Not too many people.  If you drive a 15-mile per gallon SUV you will spend a lot more than if you drive one of the 50-mile per gallon hybrids.

  • At  $3 per gallon of gas, the SUV will cost $40 a day or $200 per week.  You will probably have to stop everyday to fill it up.
  • The hybrid would cost $12 a day or $60 per week.

It seems that the average mileage people get is between 25 and 30 miles per gallon.  At 30 miles per gallon the out of pocket cost would be $20 per day or $100 per week.

Don’t forget that you will be putting more wear and tear on the vehicle and it will require more maintenance the further you have to drive it.  At 200 miles per day you need to change your oil every 5 weeks (or 3 weeks if you change it every 3000 miles).  A leased vehicle will run over your maximum annual miles quickly.

So a little analysis is necessary to make sure you are really earning more than minimum wage at this wonderful new opportunity.

About Thomas Arrison

Thomas has been a CPA for over 30 years.    Since 1992 he has provided individual and business tax and accounting services at Arrison & Olden, PC in Littleton, MA.  He also has his own blog, Thom’s Tax Talk, a compendium of tax tidbits and information

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Finances: Tax Tips for the Self-Employed

December 16th, 2009

By Thomas Arrison, Certified Public Accountant

Thomas ArrisonIn yesterday’s article I talked about some tax tips for the unemployed, today I will present some additional tax suggestions for those of you who are self-employed:  (Note: These only should be used if you have a good business purpose in spending the money. New “toys” like the newest, fanciest computer don’t make good financial sense.)

  • You can write and mail the checks for your business expenses on December 31st and deduct them on your 2009 return. This includes expenses like rent or office supplies.
  • Items you charge on a bank credit card can be deducted when they are purchased rather than when you pay the charge card bill. So those office supplies you bought in late December on your Visa card are deductible in 2009. If you charged it on your Staples card, then they are not deductible until you pay Staples. The theory is that Staples has not gotten their money yet so you cannot deduct it.
  • If you are self-employed you can delay billing your customers so that you receive the income next year rather than this year.  Please note, if you receive the money this year, you are legally required to report it this year. Keeping a drawer full of checks that you get in December and then deposit in January is illegal. You should report all your income in the year you receive it.

If you plan to implement any of these additional tax saving suggestions, you should plan on consulting with a tax professional to make sure that you are taking full advantage of potential deductions as well as preparing your complete tax filing properly.

About Thomas Arrison

Thomas has been a CPA for over 30 years.    Since 1992 he has provided individual and business tax and accounting services at Arrison & Olden, PC in Littleton, MA.  He also has his own blog, Thom’s Tax Talk, a compendium of tax tidbits and information

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