JUSTLAW

9 Steps to Start Freelancing the Right Way

June 30, 2021
New York, New York

In a recent podcast from the Wall Street Journal, a different kind of outbreak was featured in the episode “Why is everyone quitting? Workers, especially young ones, are leaving their full-time jobs in droves in search of more satisfying, more flexible and often more lucrative work. In fact, 2.7% of workers quit their job in April 2021, according to the podcast.  And freelancers are more in demand than ever before, as everyone from small businesses to large corporations hires freelancers for a variety of projects, ranging from copywriting and web development to catalog design and consulting.

Working as a freelancer typically means working your own hours ( remember, if you’re successful, you’re going to have a new boss: your clients) on your own terms. But it also means sourcing your own clients and managing an entire business yourself. 

If freelancing sounds like the right fit for you, this guide can help you. Below we outline 9 simple steps you should take in order to get started in your new career as a freelancer. 

1.  Set up a website. Establishing an online presence for yourself is important. Clients need to be able to look at your work and find you quickly. Maintaining a basic website is fairly simple. Nowadays, no-code platforms like Squarespace allow you to get a professional looking site designed and launched without any particular design or html expertise.

Remember that your website will need a well drafted privacy policy, terms of use and it should be compliant, at minimum, with the ADA’s laws on accessibility, the GDPR if you’re doing business in Europe, and the CCPA if you’re doing business in California. Subscription legal plans for small business sometimes include this legal work at no additional cost.

2.  Get a DBA, sole proprietorship or another entity. For most business entities other than LLCs and corporations, the legal name of the business is the personal name of the business owner(s). If you want to do business as “John Doe”, you can stop reading this section now, as nothing else is required. However, if you plan to do business under a name other than your own, such as ACME Digital Consulting, or if you want to set up a bank account under your business’s name, you’ll likely need a DBA. In this case, you’ll be operating as a “Sole Proprietor” and should become familiar with two tax forms: W-9 and 1099-MISC.

3.  Plan for taxes. Equally important to your choice of business structure (#2 above) is planning to optimize your taxes. Expenses on business meals, home offices, and mileage when you’re driving for business, among other items, can all serve to minimize your income – through deductions – and lower your tax liability. Understanding the tax impacts of these expenses will be important to your finance well-being, so start early. 

4.  Get your permits in place. In addition to a DBA, your state may have specific laws for individuals doing business. Research and obtain any state and local permits or licenses you’ll need for your business. Or check a site like NerdWallet that does some of the research for you.

5.  Order business cards and stationery. A significant challenge as a freelancer will be sourcing clients (more later). Online companies like VistaPrint offer inexpensive solutions for business cards and stationary, to give you a polished and professional look, and to make sure you make a lasting impression as your network grows. 

6.  Think about your future. As a freelancer, you’ll have to sort out your own path for retirement savings, medical insurance, dental, etc. Speak with your accountant or a financial advisor and set up a plan to make sure your needs and goals will be met and review websites like Value Penguin to see and compare health insurance quotes from a variety of insurers.

7.  The infrastructure plan. Without the right tools to perform your trade, your work product and efficiency will suffer. Freelancers will often tell you that while working at your leisure sounds glamorous, there are a few drawbacks. For some, the solitude can get lonely. Freelancers working remotely can’t talk to a co-worker between projects the way employees in an office can. On the other hand, freelancers don’t have to deal with office politics.
For maximum productivity, set up an in-home office, or find another place where you can focus and get work done. The absence of a boss down the hall may be a highlight; however, that just means you have to be the one to manage deadlines and productivity.

8.  Promote and network. Working for yourself means promoting yourself, and getting started as a freelancer can be very time-consuming. Online networks like LinkedIn permit you to publish your goals, ask questions, and network with other professionals.

But don’t stop there. Spread the word to friends and family that you’re venturing into freelancing and ask for referrals where appropriate.Set up a blog. A blog can help you connect with other freelancers and bloggers as well as potential clients. It will also help your website with search engine optimization (SEO) over the long term.

9.  Be an influencer. You don’t need a famous TV show or a massive social media following to be an influencer. You just need to own your lane. So figure out what it is, and get to work. Many times, asking and answering questions is the easiest way to get people involved and invested in what you do, and while you could meet 10 people during a networking event, you could meet 75 online. When you combine a strong digital presence with meaningful personal interactions, you’ll really see your stock rise. So get busy! 

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Working as a freelance entrepreneur can be intellectually rewarding and financially lucrative, but you need to build the right foundation from the beginning. Using this article as a guide to start laying that foundation can help you to later focus on your work, your customers and enjoying the flexibility you’ll gain from this important career choice. 

 

Top Tax Deductions for Small Businesses

Small businesses provide a critical pillar within the United States economy. According to the JP Morgan Chase Institute, small businesses comprise 99.9% of all U.S. businesses, accounting for 45% of the national GDP. However, many small business owners actually pay more tax than they need to; while large corporations tend to retain accountants, working full-time to find tax savings, many small businesses do not have this privilege. As a result, small businesses will often miss out on a plethora of potential tax savings that fly under the radar.

This article covers the most commonly missed deductions for small business owners — and how you can determine if your business is eligible.

The Home Office Deduction

Many small businesses conduct business from a home office. A home office can be located within a room within your residence or an outbuilding unattached to your home. Working from a home office comes with several benefits such as flexibility, ease of access, and of course, inherent tax deductions.

However, the IRS can be a stickler for eligibility; to ensure that your home office is eligible for deductions, it must pass two tests.

1. The Regularity Test: You must use the room regularly.
2. The Exclusivity Test: The room must be exclusive to business activities.

In addition, your home office has to be your “principal place of business.” As your principal place of business, you must use your home office as the primary location for meeting with clients or conducting business activities. If you perform administrative or management duties elsewhere — or have a secondary office — the IRS will reject your home office deduction.

The Mileage Deduction

Business travel can make up a significant expense, especially for small business owners. Luckily, there is a deduction for that; currently, the IRS permits a deduction of 56 cents per qualifying mile. This rate is subject to change each year but should remain within the same ballpark. You can easily track your business miles with QuickBooks Online or a service such as Mile IQ.

Unfortunately, you cannot deduct your commute. However, there is a workaround within the tax code language; the difference lies in how ‘commute’ is defined.

Commuting travel is defined as travel to and from your home to your business. Traveling from your business to another business site, such as a branch or a meeting place with a client or prospect, is considered travel eligible for a mileage deduction. This is where a home office can come in handy; when you have a qualifying home office, business travel from your home to another place of business can be deductible because it doesn’t meet the definition of a commute.

For the sake of example, let’s say you own a restaurant 30 miles from your residence. Suppose your restaurant doesn’t have any office space, and you can do business in a qualifying home office. In that case, the 30-mile trip can count as deductible mileage instead of a non-deductible commute.

S-Corp Tax Benefits

While the S-Corporation designation is not for every business, it may open the door to some next-level tax savings. Unlike standard corporations, S-Corps are considered “pass-through” entities because income, losses, and deductions “pass through” directly to shareholders, circumventing corporate income tax. After being passed through to shareholders, income, losses, and deductions are taxed at each shareholder’s income tax rate.

The S-Corp designation can be a popular choice for certain business owners because they avoid double taxation, but it is not suitable for everyone. In fact, many businesses are not even eligible — companies with more than 100 shareholders or foreign shareholders, ownership by a separate corporation or partnership, or multiple classes of stock are disqualified.  If you are unsure whether the designation is right for you, find a good small business lawyer to help you evaluate the option.

Even if you are eligible for an S-Corp designation, several downsides must be weighed. For example, S-Corps must run payroll and withhold taxes. In addition, the IRS closely watches S-Corps to dissuade those taking advantage of the designation. Also, outside investors tend to prefer investing in C-Corps over S-Corps because C-Corps are more conducive to growth. S-Corp profits are subject to taxation, whereas C-Corp gains are only taxed once distributed, encouraging C-Corps to keep money in the business to fund growth.

Designated your business as an S-Corp is not optimal for every business, but for highly profitable small businesses with shareholders, it can save a lot of money by circumventing double taxation.

Business Meal Deductions

Business meal deduction goalposts are constantly shifting, but 2021–22 is shaping up to be an optimal period for meal-related tax savings. The recent COVID-19 Relief Bill permits businesses to write off 100% of the cost of business-related restaurant meals, food, and beverages in 2021 and 2022.

By definition, deductible food and beverage items include all food and beverages, including snacks, alcohol, and other non-traditional “meals”; delivery charges, sales tax, and tips included. Notably, entertainment expenses are not deductible — but meals at entertainment venues can be. While it may seem like an inconvenience at the time, always ask for an itemized receipt at entertainment venues that separate the meal from the entertainment expense.

It’s always good practice to document every business-related expense, and business meals are no different. After each business meal, remember to put the receipt somewhere safe like in Hubdoc of QuickBooks Online; doing so is crucial to protect your finances in the event of an audit.

Miscellaneous — But Useful — Deductions

Giving gifts to your clients is more than a fast-track to their hearts; it can save your business money on its tax return. The IRS allows a business deduction of up to $25 per client per year.

Business clothes can also be deductible, but with many strings attached — you cannot deduct street-appropriate work clothes, for example. To qualify for the business clothes deduction, the clothes in question must be “mandatory for your job and unsuitable for everyday wear.” Unfortunately, this means you cannot deduct a brand-new, custom-tailored Italian suit — even if it is required for your job — but a bariatric welding contractor could deduct the cost of wetsuits, for example. However, there is a workaround to deducting street-appropriate wear: if the clothing contains a visible business logo, it can be considered advertising — which is deductible.

Another deduction opportunity lies in charitable contributions. However, deducting these contributions is not as straightforward as one might expect. The only businesses that can directly deduct charitable donations are C-Corps — and most small businesses are not C-Corps. Fortunately, there is a workaround: classifying the charitable contribution as an advertising expense. This isn’t a simple “misclassify the deduction and hope the IRS doesn’t notice” type job — which, by the way, is illegal. To successfully classify your donation as advertising spend, you must be able to show how you leveraged the donation into an advertisement. A business can accomplish this by, for example, donating money to a local high school sports or arts program, which will, in turn, list the business as a sponsor, such as in a printed program or on a scoreboard panel. In turn, the donation becomes classified as a “necessary business expense” and is now deductible as advertising spend — while still supporting a cause you care about.

The Big Picture

Tax benefits for small businesses exist for a reason. Unfortunately, many small business owners who aren’t financially savvy — or don’t employ specialized small business accountants — miss out on what is, basically, free money. Familiarity with top tax deductions is highly beneficial for any business’s bottom line and may even help business owners scope out opportunities for further tax write-offs. Because the business tax landscape is prone to rapid, yearly change, it is crucial for business owners to keep their ears on the ground for more upcoming opportunities to save.

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ANNOUNCING FREE WEBINAR

Want more great tax and legal tips for your business? If so, we invite you to join us for a complimentary webinar co-hosted by JUSTLAW and FinancePal, where we’ll take up such critical topics as:

• Most commonly missed deductions
• Selecting the right corporate structure for your company
• Understanding the difference between employees and independent contractors

Wednesday July 14, 2021 at 2:00 pm ET

Register Here

Attention Small Business Owners: Is it Time for your Business to Get Back in the Office?

If your business is still working remotely, it could potentially be time to get back to the office. In order to do so, small businesses must put together a robust reopening plan to properly address any and all concerns you or your employees may have. 

 

Employers who have returned their companies to the office have done so in a variety of ways. Some businesses have mandated their entire workforce to return. Others have asked employees to return, but have not mandated it. Another group of businesses have created flexible schedules where employees rotate on when they come to the office. Choosing which path to take, if any, is unique for each business. Therefore, keep reading to receive more insight on what your company should do. 

employee legal rights
Returning to the office

 

JUSTLAW has recently surpassed 1,000 small businesses enrolled in their small business legal protection plan. Thus, our small business members have asked two questions that I am sure all other small businesses are wondering as well: (1) Am I able to require all of my employees to return to the office? (2) Can I get in trouble for any employees who are infected with COVID-19 while at the office?

 

(1) Am I able to require all of my employees to return to the office?

 

The short and long answer is yes, but it may be dependent on your state’s laws. Generally, it is acceptable for employers to condition employment on a return to the office. Exceptions do apply to employees who have a specific reason as to why they cannot return. Those employees cannot be compelled to return to the office as a condition of employment. 

 

While it is true that employers generally are permitted to mandate a return to the office, subject to state laws, that does not mean all small businesses should. There are potential issues with returning: 

 

  1. Will you mandate that everyone has to get the vaccine?
  2. Is the office large enough to follow CDC guidelines and precautions? 
  3. Will your workforce feel safe returning? 
  4. Will your workforce productivity increase or decrease as a result of returning? 

 

These are all questions worth asking yourself before you mandate a return to the office. 

 

(2) Can I get in trouble for any employees who are infected with COVID-19 while at the office?

 

If an employee contracts COVID-19 in the office or an outbreak of COVID-19 occurs in the office, small businesses can be liable for workplace safety laws such as OSHA, the Occupational Safety and Health Act of 1970

 

Are you providing your employees a safe working environment?

 

In order to protect against your business from liability of such occurrences, employers should have employees sign waivers. The waiver would state that the employee agrees to return to the office, provided that the employer provides employees with a safe work environment. 

 

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Clearly, the status of returning to the office for all businesses is still a question mark in the minds of most employers. JUSTLAW hopes this article has provided employers with some insight on whether or not your business can open up. 

 

JUSTLAW also urges small businesses to sign up for its small business legal protection plan. Continue your business with the legal security and comfort you need to be as productive as possible. 

 

Speak to a JUSTLAW attorney today to initiate your first consultation. 

 

This post is not legal advice. It is for general informational purposes only. No reader should rely on this information in any way whatsoever without first seeking legal advice. 

 

Can Same Sex Couples Adopt Children?

The right to family life and family unity is a fundamental right guaranteed to all human beings across the globe. This right has been enshrined in the International Covenant on Civil and Political Rights (ICCPR). This multifaceted treaty was adopted by the U.N General Assembly in 1966 and came into force in the year 1976. This treaty put an obligation upon its 173 signatory ratifying member states, including the United States of America, to preserve and honor the enlisted civil and political rights of individuals. Article 23 of the Covenant states that “[t]he right of men and women of marriageable age to marry and to found a family shall be recognized” and “[t]he family is the natural and fundamental group unit of society and is entitled to protection by society and the State.”[1]

 

That being said, adoption for same sex couples has always been a peculiar and idiosyncratic affair. A couple often ends up in grey waters when they decide to start and raise a family of their own. The legal system of the United States shared a skeptical approach towards the growing trend of same sex couple. Thus, the constitutional recognition of same sex marriages by the Supreme court ruling in Obergefell v. Hodges[2] proved to be a landmark judgment in favor and recognition of support of the LGBTQ+ community. This very judgment created a positive impact on the adoption laws for same sex couples, however several legal hurdles remain yet to be tackled nationwide.

 

The history of same sex parenting before the Obergefell case has its roots dating from around the time of World War II, most notably in the context of prevention or explicit denial of adoption rights to LGBTQ community or the absence of any specific laws in this regard. Several countries have laws against gay or lesbian couples adopting children, for instance, Hungary in December 2020 has expressly banned same sex couples from adoption. Other countries including Belarus, Armenia, Georgia, Azerbaijan, Romania, etc. adopted the same negative approach towards same sex couples.

 

Opponents of same sex adoptions, which often includes private religion-based organizations, preach the moral objections to same sex adoptions and relations. Furthermore, there is also a shared opinion that children raised in gay or lesbian households are most likely to suffer from gender related disorders. However, these blatant opinions were rejected by a study conducted by the University of Oregon, where it was found that there was no difference between children raised by same sex couples and those raised by heterosexual couples. [3]

 

In the United States, adoption is governed by the adoption laws which varies from state to state. In addition, various federal laws (Adoption assistance act, Family and Medical leave act, Omnibus act, etc.) and additional laws (interstate compact etc.) operate in the area of adoption.

Same sex adoption rights have been strengthened every now and then by the judicial system. With the decision of the Arkansas Supreme court, adoption for same sex couple became legal in all 50 states of the USA.[4] It is an established ruling that marriage equality would amount to parents in a marriage whether both heterosexual or homosexual to be lawfully recognized as parents. This marriage equality has also allowed married same sex couples to adopt in several states where they were earlier, not allowed to do so.[5] A study conducted by the University of California’s Williams Institute has revealed that 21% of the U.S same sex couples had adopted children and around 3% had experienced fostering children, the rate, which in comparison to heterosexual sex couples was more than 7%.[6] There has been an increasing shift in the ideologies in the United States towards understanding the human rights of both parents and a child to have a family life with a keen understanding that adoption is a better option for children compared to orphanages along with the awareness that the sexual orientation of parents plays no role in raising a child. However, the fact remains that the process of same sex adoption is not an easy road to venture on. The difference in the laws relating to same sex adoption that vary from state to state often results in the procedure to become complicated, legal, and technical. Thus, it becomes imperative to hire the service of a legal professional with expertise in adoption and family laws to ensure a smooth experience.

[1] https://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx ( last visited  12:45 ,dated 9/04/2021)

[2] Obergefell v. Hodge, (576 U.S 644)

[3]https://www.familyequality.org/2017/10/20/a-ver-brief-history-of-lgbtq-parenting/ (last visited 1:38 PM, dated 09/04/2021)

[4]https://www.acluarkansas.org/en/cases/arkansas-v-cole (last visited on 2:30 PM, dated 9/04/2021)

[5] Pavan v. smith, (582 U.S_2017)

[6] https://www.reuters.com/article/us-usa-lgbt-adoption-idUSKBN21D01I (vast visited 4:21, dated 10/04/2021)

Employee v. Independent Contractor

Are you starting a business and need to hire more personnel? If so, have you thought about whether to hire an employee or an independent contractor? If not, please take a second to learn of the main differences between the two, below:

Why does it matter?

At first glance, you may be asking yourself: why does this even matter? Well, JUSTLAW is here to tell you it does, most importantly for tax liability purposes, among other things. 

Employers must pay a whole variety of taxes for their employees. However, that is not the case for employers who hire independent contractors. Employers don’t have to pay any taxes such as Social Security, state and federal unemployment tax, etc. If employers hire employees for their business, those taxes mentioned above and a list of others must also be paid. Therefore, it is clear that employers almost always prefer to hire independent contractors over employees from a tax liability standpoint. 

In addition, employees are protected by federal laws such as minimum wage, laws protecting their overtime work, and employment discrimination. Independent contractors have no such rights provided by federal law, specifically for overtime and employment discrimination. 

business law regarding freelancers
It’s vital to establish whether someone who works for you is an employee or independent contractor

Employers also should know that independent contractors do not normally receive employment benefits. To the contrary, employees enjoy such benefits including paid time off and various health benefits. 

Accordingly, it is quite obvious that almost anyone would prefer to work as an employee. However, most employers prefer independent contractors. From an employer’s standpoint, it really depends on the type of business they are operating and the type of positions they are looking to fill. For example, a startup has different needs compared to that of a 20-year successful public company. 

How can you tell if someone you have hired is an employee or an independent contractor? 

Usually, it is pretty obvious and easy to decipher. Employment contracts will explicitly state if the person hired is an employee or an independent contractor. 

However, in other cases, it is not as obvious. Luckily, courts have provided us with an array of factors to consider to determine whether someone is an employee or an independent contractor. These factors are commonly referred to as the “Economic Realities Test”: 

 

  1. What is the degree of control over the person’s work? Who exercises that control?
  2. What is each party’s (person and business) degree of loss in their exchange?
  3. Who has funded the person’s purchase of materials needed to complete their tasks such as equipment and supplies?
  4. How long-lasting is the person’s position? 
  5. Would the business suffer if this person was not present? How important are they to the business? 
  6. What degree of skill and expertise is needed to complete the applicable work? 

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Speak to a JUSTLAW attorney today to initiate your first consultation and receive immediate advice as to whether to hire an employee or an independent contractor. 

This post is not legal advice. It is for general informational purposes only. No reader should rely on this information in any way whatsoever without first seeking legal advice. 

Business Insurance: Is it Really Necessary?

Does anyone ever question insurance? Some people pay for insurance, never to actually reap a benefit from it, besides the comforting feeling of financial security. Others pay for insurance and reap all the benefits of the insurance because of a tragic loss, accident, etc. Most people do not question their car or home insurance. But is it common for businesses to have insurance? Do all of them have it? 

 

The answers to those questions are yes and no. It is very common for businesses to have insurance. In fact, most lawyers would strongly advise any business to have some form of insurance. However, some businesses ignore insurance and take on all different scary risks. Why do you ask? Well, maybe people think when they form a limited liability company, corporation, or other business entity that avoids personal liability, they insure their businesses as well. However, that is not the case. The creation of a limited liability company and a corporation do not also provide the business insurance this article refers to. 

 

Because it is often that business owners confuse this concept, JUSTLAW is providing you with a guide to Business Insurance.

 

How do I know if my Business Needs Business Insurance?

 

If you answer yes to any of the following questions, you should get Business Insurance: 

 

  1. Does your business have property (equipment, computers, laptops, inventory, trucks, etc.) that is not easily replaceable without expending a lot of money? 
  2. Do you have an office building? Factory? Land? 
  3. Could your business be sued as a result of an accident (i.e. use of dangerous equipment, slip and falls, regular use of transportation, etc.)

 

Types of Business Insurance:

 

If you answered yes to any of the above questions, you will then have to determine what type of business insurance your business needs. Here are a few types that are provided to businesses: 

 

  1. Liability Insurance 
  2. Property Insurance 
  3. Products Liability Insurance 
  4. Vehicle Insurance 
  5. Identity theft Insurance 
  6. Workers’ Compensation Insurance 
  7. Professional Liability Insurance 

 

Contact an attorney now to determine which of each listed above are right for your business. You may need all of them. You may need only one. However, no matter how many you need, insurance is the safest way to protect your business. 

 

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Utilize JUSTLAW attorneys to get the best advice on how to procure the most affordable and protective business insurance for your business. While you’re at it, check out our Business Membership to receive 24/7, 365 peace of mind for your business. Legal protection for your business and you is our #1 priority. 

 

To learn more about Business Insurance and to determine whether your business needs it, contact us at:

JUSTLAW Client Services, hello@127.0.0.1

This post is not legal advice. It is for general informational purposes only. No reader should rely on this information in any way whatsoever without first seeking legal advice from counsel in the relevant jurisdiction.

 

JUSTLAW’s 50-state survey of E-Notary laws

As more individuals and companies are forced to work remotely due to the COVID-19 pandemic, multiple federal and state governments are working to enable fully electronic processes to keep businesses operating. At JUSTLAW, our top attorneys we’ve been working hard to make sure our customers are fully operational, but also safe. 

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The Secure Notarization Act

On March 18, 2020, Senate Bill 3533, the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (the “SECURE Notarization Act”), was introduced as bipartisan legislation to authorize and establish minimum standards for electronic and remote notarizations that occur in or affect interstate commerce. This legislation would authorize every notary in the US to perform remote online notarizations (RON). Unless and until it is adopted into law, some federal agencies and multiple states are enacting various independent measures. Eg, the IRS issued Notice 2020-42 allowing retirement plan participants or beneficiaries during the year 2020 to satisfy the witnessing requirements for certain participant elections through use of remote notarization, including the spousal consent required under § 417 of the Internal Revenue Code. 

At a state level, there are currently 29 states that have enacted some form of RON law: Alaska, Arizona, Colorado, Florida, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming. [as of 2/11/21].

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The rudiments of each state’s RON law are to:

  • Allow notarial acts to be completed using audio-video communication, including acts where the signer is located outside the state in which the notary is authorized to operate;
  • Require that the notary authenticate the person signing; and
  • Require recording of the audio-video communication.

 

Each state’s laws may vary as to authentication, record-keeping and retention periods.

The chart set forth below reviews each state and any RON law and/or emergency order enacted in such state supporting any form of remote notarization:

RON & Emergency Order Status – 50 States

State Permanent RON Emergency Order Notes
Alabama Y  

 

Alaska Y  

 

Arizona Y  

 

Arkansas Y The notary and the signer are both physically located in Arkansas at the time of signing, among other conditions.

 

California X X Secretary of state advocates “mobile notaries”.

 

Colorado X X  

 

Connecticut Y Persons physically located in CT.

 

Delaware Through end of June 2021.

 

DC X Y Awaiting guidance from Mayor’s office.

 

Florida Y Florida enacted RON effective January 1, with the execution of wills and estate planning documents using RON effective July 1.

 

Georgia Y  

 

Hawaii Y  

 

Idaho Y  

 

Indiana Y  

 

Illinois Y  

 

Iowa Y Iowa notaries must register with the secretary of state and utilize one of a limited number of vendors in order to perform the act.

 

Kansas Y  

 

Kentucky Y  

 

Louisiana Y Terminates upon the earlier enactment of the federal SECURE Notarization Act or February 1, 2022.

 

Maine Y  

 

Maryland Y  

 

Massachusetts Y  

 

Michigan Y Through July 1, 2021.

 

Minnesota Y Automatically expires January 6, 2021.

 

Mississippi Y During the pandemic and for 14 days after.

 

Missouri Y  

 

Montana Y  

 

Nebraska Y  

 

Nevada Y  

 

New Hampshire Y Ends when the declaration of emergency ends.

 

New Jersey Y For the duration of the pandemic.

 

New Mexico Y  

 

New York Y  

 

North Carolina X X Emergency measures were set to expire 3/1/21.

 

North Dakota Y  

 

Ohio Y  

 

Oklahoma Y  

 

Oregon Y Through June 2021.

 

Pennsylvania Y  

 

Rhode Island Y  

 

South Carolina X X  

 

South Dakota Y Enables the use of communication technology only “if the notarial officer: … affixes the notarial officer’s signature to the original tangible document executed by the [principal]” and only if the notary personally knows the principal.

 

Tennessee Y Y  

 

Texas Y Y  

 

Utah Y  

 

Virginia Y  

 

Vermont Y RON adopted but not yet implemented by the secretary of state. Current measures enable the witnessing of a power of attorney and filed in land records and enacted SB316 the same day to enable execution of self-proving wills using remote notarization.

 

Washington Y  

 

West Virginia Y  

 

Wisconsin Y  

 

Wyoming Y Through July 1, 2021.

 

*Current as of March 1, 2021. Please contact your friends at JUSTLAW for the most current information.*

To learn more and keep current on the status of remote online notarization across the US, please contact:

JUSTLAW Client Services, hello@127.0.0.1

This post is not legal advice. It is for general informational purposes only. No reader should rely on this information in any way whatsoever without first seeking legal advice from counsel in the relevant jurisdiction.

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Tax Breaks for Home Based Businesses 

 

Home based businesses are starting to become the norm as a result of the COVID-19 pandemic. And as every business owner knows, their business is subject to taxes. Yet, most small businesses that qualify as home based businesses do not take advantage of a tax break offered by the IRS. Publication 587 permits such small businesses to take advantage of this deduction mentioned above. We explore and simplify this deduction in detail below. 

What is a Tax Deduction? 

 

Every business has tax liability. Generally, that tax liability comes from a person’s or business’s income. For purposes of this article, a home based business has the ability to claim a deduction if they can prove the elements of this deduction listed below. If the taxpayer successfully can prove they meet the requirements for this deduction, they will have the ability to lower their tax liability. In other words, the home based business taxpayer can offset expenses they incurred in running their business with income they earned from the business. This in effect reduces the business’s gross income and thereby lowers their income that is subject to tax liability. 

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For example, let’s say a taxpayer’s business generated revenue and thus has taxable income of $50,000. To set up the business in their home, the taxpayer had to spend $3,000 in expenses. If the taxpayer can meet an allowable deduction offered by the IRS, they can successfully deduct their taxable income to $47,000. Therefore instead of owing tax on $50,000, they now only owe tax on $47,000. While this may seem like a small difference, such tax savings go a long way in keeping money away from the IRS. However, it sounds like this taxpayer will have to prove the deduction offered in Publication 587 for home based businesses. Let’s find out how they can prove such a deduction. 

 

What Do I Need to Show in Order to Meet the Requirements for this Deduction? 

 

To prove this deduction, there are a variety of elements that need to be proved and are directly laid out in the link attached to Publication 587 above. For the purposes of this article, we are focusing on three of the more important elements to prove: 

1) Exclusive Use 

 

To show exclusive use, you must be able to prove that a room in your house is exclusively used for the purpose of your business. (NOTE: You can claim this deduction even if you are not working out of your house. The deduction also applies to apartments, condominiums, mobile homes, boats, or anything that provides living accommodations to you).

 

We must emphasize the exclusivity of this room. For example, if you work out of your living room where your child also plays video games and watches television, you will not be eligible for this deduction. You must exclusively work out of a room solely dedicated to your business. 

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2) Regular Use

 

Regular use of the room is also required. Occasional use of the room for your business will not suffice. 

3) Trade or Business Use

 

Finally, you must use it solely for your trade or business. Both this and regular use of the room should be easy to prove as long as the space is regularly used only for trade or business use.

 

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We understand that many small businesses have been started or moved to the owner’s home because of the pandemic. Thus, we urge you to take advantage of this publication. Contact a tax attorney today to determine if you meet this deduction. 

 

Do you need to create a PLLC for your business?

Are you forming a new business? If so, the first question you should ask yourself is the type of business entity you are looking to set up. The answer to that question will depend very much on the protections you will prioritize the most. Check out recent JUSTLAW articles for help with determining the right business entity for you. However, if you have already decided you would prefer an PLLC or if you have read our relevant dialogues on the Verdict and have ultimately decided to create a PLLC, this particular article will be extremely important for you to understand.

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When will you be required to form an PLLC?

A PLLC stands for a Professional Limited Liability Company. As you probably could guess, the difference between a PLLC and an LLC is that professionals file for a PLLC.

States differ on the requirement of professionals forming a PLLC. Some states opt to push professionals to create PLLCs. Other states permit PLLCs, but don’t necessarily require it. And other states favor professional corporations (e.g. P.C.) and limited liability partnerships (e.g., LLP) and ban PLLCs.

For straightforward purposes, this article focuses entirely on the states that require PLLCs. In other words, these states mandate that the term professionals, which is regularly defined in the particular state’s limited liability company act, form a PLLC.

In most states, the list of professionals almost always includes:

1) Accountants
2) Architects
3) Attorneys
4) Chiropractors
5) Clinical Social Workers
6) Dentists
7) Doctors
8) Engineers
9) Nurses
10) Physical, Marriage, & Family Therapists
11) Psychologists
12) Veterinarians

If you are not one of these professionals, you most likely do not have to create a PLLC. An LLC should suffice. To the contrary, if you are a licensed professional listed above, we urge you to contact our attorneys before you move forward with an LLC or PLLC. Our well-experienced, top of the line attorneys will quickly advise you as to which form is more suitable for your business. More importantly, our attorneys can also advise you as to whether your state requires PLLCs for professionals.

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What are the steps needed to take to form a PLLC?

If you have proceeded to this step, that either means you are a licensed professional listed above, you believe you may have to create a PLLC, or you just love reading JUSTLAW content. Or maybe it’s all three? Anyways, here are the steps you will take when forming a PLLC:

1. Check eligibility of PLLCs in your state.
As we said above, an attorney will be able to tell you whether your state requires, permits, or bans PLLCs. Check out your state’s “limited liability company act” if you would like to proceed without an attorney.

2. Create your Articles of Organization.
If you’re reading “Articles of Organization” and are scratching your head, don’t worry. The name of this document varies by state, and is sometimes called “Certificate of Organization”, “Articles of Incorporation”, etc. The bottom line is that every PLLC needs to include such a document. The main purpose of the document is to name a registered agent, along with their relevant contact information. Members can be registered agents. In addition, you will also need an Employer Identification Number (hereinafter referred to as “EIN”). To receive an EIN, you’ll simply just need to file for one with the IRS and they will appoint you one. Moreover, other details that should be included in the Articles of Organization consist of your principal place of business, the services your business will offer, and all of the members of the PLLC and their relevant contact information. (Note: All members should be of the same profession. Speak with a JUSTLAW attorney now to determine if your profession or professions are covered.)

3. Prepare an operating agreement.
An operating agreement will detail how your business will be run. Such details will include information such as: (1) Capital contributions; (2) Members and their ownership rights; (3) Voting requirements for business-related decisions (votes by unanimous decision or 2/3 vote); and much much more. This is required for all PLLCs.

4. Show proof of all member’s licenses to practice their profession.
Finally, and one of the more obvious components of forming a PLLC, includes providing proof of your license to practice your profession.

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JUSTLAW is on a mission to ensure legal insurance becomes a norm. Sign up for our JUSTLAW membership today and receive a free consultation on whether you need to create a PLLC for your business.

LEGAL IMPLICATIONS: SEPARATION VS. DIVORCE

An unsuccessful marriage is often disposed of by a divorce between the spouses. When the two parties in a marriage are unable to live together and are ultimately incompatible, the parties in such a situation, opt for a formal closure to the marriage called a divorce. According to the Concise Oxford Dictionary of Sociology (1994), ‘the formal legal dissolution of legally constituted marriage’ is termed as a divorce. But sometimes, parties in an impugned marriage do not directly resort to divorce, instead they avert the formal dissolution by a legal separation.

 

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The concept of legal separation holds a very significant position in the range of family law. It is the most effective alternative to settle disputes in a conflicting marriage. Legal separation means a process wherein a couple in a marriage lives in separation from each other following a court order. The couple lives apart from each other in a generally accepted first step towards a divorce. It provides the couple an opportunity to reflect upon their relationship and to think more clearly about their future. For some couples, legal separation is a prospect of reconciling the relationship while for some couples it is the track to a divorce. Legal separation could be classified into three types: trial separation, permanent separation and legal separation.

Both the concepts of divorce and legal separation share an important relationship. In divorce and legal separation, the court plays an important role in granting child custody, rights regarding visitation, division of the property based on the status of the couple and maintenance for the spouse and children etc. which is similar between both.

However, legal separation and divorce do share a significant variation in their legal implications. Unlike divorce which formally puts an end to a marriage, legal separation designates that the couple is still married, permitting them to be entitled to certain benefits.  A separated couple is allowed to retain the family health insurance, spousal retirement benefits, tax benefits etc. A separated spouse is allowed to make financial or medical decisions for the other whereas under a divorce, an ex- spouse is a stranger to the medical and financial decisions of the other.  

 

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During a divorce proceeding all debt and liabilities shared by the spouses are settled, thus after the granting of divorce there can be no debt or liability between the spouses which arose from the marriage. However, under legal separation there is no settlement of debts and liabilities. 

The property rights of the spouse are also affected differently. Under divorce, the person’s right to inherit the property of the spouse is completely annulled while under the counterpart, the right to inherit is retained. Moreover, one of the most important legal implications that differ between the two is the right to marry, i.e., determination of marital status. A separated spouse is legally married, they retain their marital status and cannot remarry without a formal divorce. Under a divorce, however, a person is free to remarry. Reconciliation between the spouses is easier for a legally separated couple whereas under a divorce, it is an ultimate end to a marriage affair. Reconciliation after divorce is possible only by marrying the former spouse again.

To understand the legal complexities and technicalities involved in a divorce and legal separation is an arduous task. Therefore, the role of a lawyer in such a fragile situation becomes highly imperative. A lawyer will provide a client with sound legal advice as to the intricacies of legal separation or divorce and thus permit the client to make a completely informed decision based on their best interests.

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 Sign up for a JUSTLAW Membership and you’ll have access to the best network of attorneys for free, when applied towards an uncontested divorce. And don’t worry, a JUSTLAW Membership offers a variety of more free perks beyond uncontested divorces. Find out more information, here