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Old 04-25-2020, 07:48 AM   #1
Fishsizzle
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Unemployment benefits

Figured I would post this here as there are many wise and experienced ones.

Wife and I own a biz. For years was an llc. We always had to scrimp and save to pay the tax bill T the end of the year.

A few years back we switched to an S Corp. and began to “pay” ourselves (I use that term lay loosely) to pay into the tax system and not have a large tax bill at the end of the year.

We didn’t really look at our pay stubs to see what has been taken out all these years as we just “assumed” bad word I know, that all was well.

Trying to keep employees on, I had my wife go on unemployment and stay home to get the house around as we are going to sell it. (Another story)

Anyway, she gets a claimed denied from the state after a month of filings. We can’t figure it out until we start going back through both are pay stubs and see that our accountant hasn’t taken a dime in years from our check and put in unemployment for us (they do all our Payroll) They did for all our employees, but not us. They did for federal unemployment, but not state.

Being the weekend, I’ll rack my brain and drive myself crazy trying to understand what I did wrong, but was wondering if this is an S Corp thing? Or was it an oversight on my accountant ?
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Old 04-25-2020, 08:22 AM   #2
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I'm no financial guy and unemployment is a state issue. It sounds to me like you need to get an independent auditor to look at the accounten's books and actions. if the accountant is under contract you may be best advised by an attorney. Again, I'm no expert so take this for what it's worth which may be nothing.

Have you applied for an SBA loan?
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Old 04-25-2020, 09:04 AM   #3
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Unemployment is different in each state. When I was in New Jersey, I know that an owner (even as low as 10%) was not entitled to collect. It may be the same in your state. JM2¢, Hank
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Old 04-25-2020, 09:31 AM   #4
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Unemployment is different in each state. When I was in New Jersey, I know that an owner (even as low as 10%) was not entitled to collect. It may be the same in your state. JM2¢, Hank
Yeah I will find out more. Just threw us for a loop!
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Old 04-25-2020, 09:35 AM   #5
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Originally Posted by flybouy View Post
I'm no financial guy and unemployment is a state issue. It sounds to me like you need to get an independent auditor to look at the accounten's books and actions. if the accountant is under contract you may be best advised by an attorney. Again, I'm no expert so take this for what it's worth which may be nothing.

Have you applied for an SBA loan?
Thanks, yes I put in with our bank first go round, but they really drug their feet waiting for “more clarification” from feds and missed out.

I have apps now in with 4 different places as we didn't know that banks will only take on or get a certain amount. Our original bank says we have cleared their protocol and are ready to send to SBA. We have 12 laid off and this will bring back 4 full time and help us retain 4 that we are trying to keep on.

We are just thankful that we were able to keep the doors open. We are down 50/60% but I feel terrible for those who had to close down completely.
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Old 04-25-2020, 01:28 PM   #6
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well, this issue is way above my grade as an old RVer.


You need to talk to your accountant/lawyer and figure out what is going on. Good luck.
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Old 04-25-2020, 02:05 PM   #7
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My first stop would be a CPA/Attorney.
I would lawyer up before I talked too much to your accountant.
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Old 04-25-2020, 02:09 PM   #8
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well, this issue is way above my grade as an old RVer.


You need to talk to your accountant/lawyer and figure out what is going on. Good luck.
Thanks all good. Obviously above me as well and I’m living it !
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Old 04-25-2020, 02:11 PM   #9
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My first stop would be a CPA/Attorney.
I would lawyer up before I talked too much to your accountant.
Uggg hate to think that way. I’ve only had to lawyer up a few times over crazy clients and have one retained right now for a land grab from the state on a piece of property I’m trying to grow my biz on

Thanks for heads up
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Old 04-25-2020, 06:58 PM   #10
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I have no advice except to say, I really wish you luck. It's bad enough at this time and adding that to the pile cannot be easy. BTW, I put my house on the market Thursday. I spend nearly every day working part of or all day for nearly 2 months making sure it was ready.
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Old 04-25-2020, 07:21 PM   #11
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I have no advice except to say, I really wish you luck. It's bad enough at this time and adding that to the pile cannot be easy. BTW, I put my house on the market Thursday. I spend nearly every day working part of or all day for nearly 2 months making sure it was ready.
Thanks much and hope your home sells soon. We are hoping for get out of the “city” bounce. Given that we don’t have the density of larger cities, we didn’t really see much illness. The real estate crowd expects a mass exodus out of Cali and east coast. We are trying to get equity to into our business, and take a year or two off from owning a home and hang out/travel in the 5th wheel. (Bigger truck will be part of the equation, LOL)
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Old 04-26-2020, 08:51 PM   #12
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It's neither. Your accountant did it right. Most small business owners go without pay...for years even. You cant fire the members of your corporation without restructuring it. So, if your spouse is listed as a board member of your S-Corp, i.e. treasurer, president, etc. Just because you sent her home don't mean you get to claim unemployment. That's actually just trying to game the system...I understand the motivation, but that's your answer.

That's an assumption on my part that your spouse is a member of your S-Corp. Not paying FUTA actually saves you money, which, I am sure your accountant was thinking about. You typically would not fire the owner/co owner...they just work for free until the business can sustain itself ( i.e earn you a paycheck.). Just talk with your CPA, they will explain it to you.
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Old 04-26-2020, 08:57 PM   #13
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It's neither. Your accountant did it right. Most small business owners go without pay...for years even. You cant fire the members of your corporation without restructuring it. So, if your spouse is listed as a board member of your S-Corp, i.e. treasurer, president, etc. Just because you sent her home don't mean you get to claim unemployment. That's actually just trying to game the system...I understand the motivation, but that's your answer.
Ok, I’m not only weirded out about not getting unemployment. I’m worried that we didn’t pay in if we we’re supposed to.

It’s confusing because we paid in on everyone else but state unemployment. Money was taken out for Federal unemployment.

I’ll know more tonight. Thanks for your help.
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Old 04-27-2020, 01:23 AM   #14
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Justin, both DW and I are anxious to hear your answer. At our ages nothing makes any difference, we're just nosy!
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Old 04-27-2020, 05:05 AM   #15
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Heck I didn't know there was such a thing as federal unemployment. Does it underwrite a portion of the state payment?
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Old 04-27-2020, 12:58 PM   #16
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Justin, both DW and I are anxious to hear your answer. At our ages nothing makes any difference, we're just nosy!
Payroll looking into it. No word back yet. Been busy with PPP all day. Have 4 apps in and trying to get docs in so hopefully one drops funding to us.
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Old 04-27-2020, 12:59 PM   #17
Fishsizzle
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Heck I didn't know there was such a thing as federal unemployment. Does it underwrite a portion of the state payment?
Yeah it’s listed on our paystubs. I’d do not know what it’s all about! I will get myself educated fast here
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Old 04-28-2020, 11:22 AM   #18
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FUTA is paid by you, the employer. It's not paid by employees. Your accountant generally files Form 940 quarterly on behalf of your business. Family members are typically exempt from paying FUTA. That's, generally, considered a good thing, to not pay a tax. If your business is struggling, rather than trying to get the low hanging fruit of unemployment for your spouse, the Fed is offering fully forgivable loans to small businesses. That's the route I would have my accountant working.
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Old 04-28-2020, 11:36 AM   #19
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A bit off topic...

My wife took a layoff and has been trying to get on the Michigan unemployment site to start getting payments... She filed fine on line but it immediately said her account was "locked". She has been trying for weeks to get it "unlocked" without success... calls to the hotline get disconnected right after it says "due to high call volume try your call again later"... as for the email address it gives she has received no return emails... so it appears that unemployment for her may be a VERY long time coming... good thing we are not depending on her that for survival... I pray that anyone needing it to live has better luck with it...
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Old 04-28-2020, 11:55 AM   #20
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FUTA is paid by you, the employer. It's not paid by employees. Your accountant generally files Form 940 quarterly on behalf of your business. Family members are typically exempt from paying FUTA. That's, generally, considered a good thing, to not pay a tax. If your business is struggling, rather than trying to get the low hanging fruit of unemployment for your spouse, the Fed is offering fully forgivable loans to small businesses. That's the route I would have my accountant working.
Yep, have 4 PPP apps in. One so far has been submitted to SBA
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