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-   -   Position Eliminated - Time for a Change? (http://www.backwoodshome.com/forum/vb/showthread.php?t=34246)

Kachad 12-17-2014 02:15 AM

Position Eliminated - Time for a Change?
 
Howdy All -

Last week I was notified that due to a business unit restructuring, my position was eliminated. I will be employed until 1-31, which I actually really appreciate, since I receive a bonus after year end.

Not sure about extended health care benefits or what the exit package will be, but looks like I have a couple choices for future employment:

1: Back into the corporate world. It's been good to me, the money is really good, but it is all about travel.

2: Independent Consulting + Hobbies for Money
a: Independent consulting - I have a company that I can consult for, which will bring in a live-able income. It would be lucrative part time work, and I should be able to find other clients as well. This would be an income loss, but would allow me more time to develop the homestead.
b: Hobbies for Money - I can bring in some additional income at the farmers market by converting a couple of hobbies into a low income small business.

I'm thinking about going route 2, as I'm getting a bit tired of having all my eggs in one corporate basket.

Kind of scary thinking about leaving the corporate world, but I think the time is right. :)

Selena 12-17-2014 02:34 AM

Does option 2a require travel? If so, it *might* limit your options when it comes to livestock and/or other farm animals.

Insurance is the challenge with option 2. Medical is the biggie, dental depends on the "condition" of your teeth. An HSA allows you build up cash and if you do opt for an HDHP (high deductible health plan), you have until Apr 15, 2015 to fund 2014 at the full amount. Business liability is something else you'd need.

Some companies will not hire a self-employed (1099-NEC/schedule C) subcontractor. You might have to be an S or C corp. Regardless of what option, income/expense tasks have to be done.

Before you sign your separation agreement is the time to negotiate a better package (if need be). If you can maintain your insurance at employee rates for a few more months, that keeps money in your pocket. Worse thing they can say is no.

Additional thought - any opportunity to work on the Super Bowl in MN project?

TheMonolith 12-17-2014 10:59 AM

Normally I would say I was sorry to hear about you losing your job, but it sounds like a opportunity has presented itself in your favor.
Good luck.

coaltrain 12-17-2014 11:04 AM

Your choices depend a lot on your age and financial situation.

Number 1 rule is happiness > money

doc 12-17-2014 04:54 PM

[QUOTE=coaltrain;401884]

Number 1 rule is happiness > money[/QUOTE]

Exactly. Time is much more valuable than money. Does your happiness depend on how much money you make, or on how much time you have for the activities that makes you happy? Only you can determine the right balance.

CountryMom22 12-17-2014 05:38 PM

It is great that you can see the upside. Many people are so afraid of the unknown they miss the opportunities presented by this situation. I agree with Doc. If you value your time/freedom more than the money, this could be the time, especially if you have a part time income stream already in place. Good luck, let us know what you decide.
Sue

Kachad 12-19-2014 08:34 PM

[QUOTE=Selena;401872]Does option 2a require travel? If so, it *might* limit your options when it comes to livestock and/or other farm animals.

Insurance is the challenge with option 2. Medical is the biggie, dental depends on the "condition" of your teeth. An HSA allows you build up cash and if you do opt for an HDHP (high deductible health plan), you have until Apr 15, 2015 to fund 2014 at the full amount. Business liability is something else you'd need.

Some companies will not hire a self-employed (1099-NEC/schedule C) subcontractor. You might have to be an S or C corp. Regardless of what option, income/expense tasks have to be done.

Before you sign your separation agreement is the time to negotiate a better package (if need be). If you can maintain your insurance at employee rates for a few more months, that keeps money in your pocket. Worse thing they can say is no.

Additional thought - any opportunity to work on the Super Bowl in MN project?[/QUOTE]

Thanks for the Info, Selena. Appreciate it!

No super bowl work for me :D

Kachad 12-19-2014 08:35 PM

[QUOTE=coaltrain;401884]Your choices depend a lot on your age and financial situation.

Number 1 rule is happiness > money[/QUOTE]

This is something that I'm trying to get my grip on. I've always enjoyed my job, love my career field - but have usually gone for money vs happiness.

Kachad 01-24-2015 04:44 AM

Just a bit of an update.

I have one week of employment left, then I will be riding on a month of severance and a bonus from 2014.

I'm 75% decided that I will go the independent consulting route.

Health Insurance shouldn't be a problem, as I think I will be getting married - probably in early October. Best month in MN, and plan on hitching myself up on our property when the full colors are in bloom. The GF is 20 year retired military, so I would be covered by Tricare.

I've had several companies contact me for potential positions, but instead of considering a standard employment, have pitched the consulting option to them. Responses have been very positive, so I think I can land projects pretty quickly.

During Feb, when I still have income from the severance, I'll incorporate and complete all my marketing work to present a professional image.

Now to decide on a name. I'm thinking:

BRIC Inc.
Powder Coating Specialists

BRIC would stand for: Bigfork Research, Investigating, and Consulting.

The Bigfork part is based on the river that I will be living on in the future. Figure that if I include that, that will reinforce the reason why I'm doing this.

To Coal - I will be taking a hit on the income side at first and probably for the duration. But I've been thinking about what you said - embracing the happiness side. I'm kind of a Geek, and love problem solving and managing complex projects. I never liked the political and complex structures of corporations. If I lend my expertise to these businesses, I can concentrate on pure fact and progress, without playing games. That will make me happy, and thank you for reinforcing that aspect.

Bearfootfarm 01-24-2015 06:30 AM

BRIC stands for Brazil, Russia, India & China

If anyone searches for BRIC, you likely won't show on the first page, or maybe even the second

There are also several other established businesses and organizations using that acronym and using BRIC Inc

Bigfork Research sounds better to me

Hope it all works out

Kachad 01-24-2015 07:21 AM

[QUOTE=Bearfootfarm;405489]BRIC stands for Brazil, Russia, India & China

If anyone searches for BRIC, you likely won't show on the first page, or maybe even the second

There are also several other established businesses and organizations using that acronym and using BRIC Inc

Bigfork Research sounds better to me

Hope it all works out[/QUOTE]

Ahh.. thanks for the BRIC acronym heads up. I understand that.

Bigfork Research ...simple, direct, and not much on the google hits. Might be a winner.

'ppreciated

coaltrain 01-24-2015 11:05 AM

[QUOTE=Kachad;405484]Just a bit of an update.

I have one week of employment left, then I will be riding on a month of severance and a bonus from 2014.

I'm 75% decided that I will go the independent consulting route.

Health Insurance shouldn't be a problem, as I think I will be getting married - probably in early October. Best month in MN, and plan on hitching myself up on our property when the full colors are in bloom. The GF is 20 year retired military, so I would be covered by Tricare.

I've had several companies contact me for potential positions, but instead of considering a standard employment, have pitched the consulting option to them. Responses have been very positive, so I think I can land projects pretty quickly.

During Feb, when I still have income from the severance, I'll incorporate and complete all my marketing work to present a professional image.

Now to decide on a name. I'm thinking:

BRIC Inc.
Powder Coating Specialists

BRIC would stand for: Bigfork Research, Investigating, and Consulting.

The Bigfork part is based on the river that I will be living on in the future. Figure that if I include that, that will reinforce the reason why I'm doing this.

To Coal - I will be taking a hit on the income side at first and probably for the duration. But I've been thinking about what you said - embracing the happiness side. I'm kind of a Geek, and love problem solving and managing complex projects. I never liked the political and complex structures of corporations. If I lend my expertise to these businesses, I can concentrate on pure fact and progress, without playing games. That will make me happy, and thank you for reinforcing that aspect.[/QUOTE]

Sounds like you have a good plan! Since I've had to stop working almost 3 years ago, when I look back at my career and those job jumps I made, I know I did the right thing at the time.

You are fortunate to be able to tag on the TriCare - health insurance is a huge expense. That alone will help soften the income hit.

Thanks for the update!

Selena 01-24-2015 02:13 PM

[QUOTE=Kachad;405484]Just a bit of an update.

I have one week of employment left, then I will be riding on a month of severance and a bonus from 2014.

I'm 75% decided that I will go the independent consulting route.

Health Insurance shouldn't be a problem, as I think I will be getting married - probably in early October. Best month in MN, and plan on hitching myself up on our property when the full colors are in bloom. The GF is 20 year retired military, so I would be covered by Tricare.

I've had several companies contact me for potential positions, but instead of considering a standard employment, have pitched the consulting option to them. Responses have been very positive, so I think I can land projects pretty quickly.

During Feb, when I still have income from the severance, I'll incorporate and complete all my marketing work to present a professional image.

Now to decide on a name. I'm thinking:

BRIC Inc.
Powder Coating Specialists

BRIC would stand for: Bigfork Research, Investigating, and Consulting.

The Bigfork part is based on the river that I will be living on in the future. Figure that if I include that, that will reinforce the reason why I'm doing this.

To Coal - I will be taking a hit on the income side at first and probably for the duration. But I've been thinking about what you said - embracing the happiness side. I'm kind of a Geek, and love problem solving and managing complex projects. I never liked the political and complex structures of corporations. If I lend my expertise to these businesses, I can concentrate on pure fact and progress, without playing games. That will make me happy, and thank you for reinforcing that aspect.[/QUOTE]

If it were me, I'd shop for a high deductible health care plan to cover myself for the "gap" period. Beware that not all short term policies meet the standards required by the ACA. There are new forms to file with your tax return for 2014 (and going forward) to prove you had insurance. Penalty for 2014 is small, $95 I believe. The penalty increases in 2015 (see below). If you weren't getting married, you might avoid the penalty if your income was low enough. I think it will be hard to "win" that argument once married (since you're considered married all year regardless of the ceremony date).

AND.. if you are incorporated, your insurance can probably be deducted (check with your CPA. Rules for deducting when incorporated are different than when self-employed, aka Schedule C).

Good luck - nothing beats doing the work you love for the right "employer"!!
[B]The fee in 2015[/B]

If you donít have coverage in 2015, youíll pay the [B]higher[/B] of these two amounts:
[LIST][*][B]2% of your yearly household income.[/B] (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.[*][B]$325 per person for the year ($162.50 per child under 18).[/B] The maximum penalty per family using this method is $975.[/LIST] [B]The fee for not having coverage in 2014[/B]

If you didnít have coverage in 2014, youíll pay the [B]higher[/B] of these two amounts when you file your 2014 federal tax return:
[LIST][*][B]1% of your yearly household income.[/B] (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.[*][B]$95 per person for the year ($47.50 per child under 18).[/B] The maximum penalty per family using this method is $285.[/LIST]

Kachad 01-24-2015 09:03 PM

Thank you -Selena! Seriously, that was a lot typing to help me out with that information.

I appreciate it greatly.

Selena 01-25-2015 03:41 AM

[QUOTE=Kachad;405531]Thank you -Selena! Seriously, that was a lot typing to help me out with that information.

I appreciate it greatly.[/QUOTE]

Can't claim I typed it all - copy/paste is our friend! Better to plan in January than to scramble in December!

And I should clarify - you'll need to file a form to claim the premium tax credit (PTC). If you enroll via the exchange (and you'd be allowed to do so since you have what is known as a qualifying event), you'll received form 1095-A which you'll use to see if you qualify for the tax credit (form 8962) - or pay it back it you applied it when you enrolled. I opted to *not* take the credit as I kept my old plan. But I'll see what garners me the most bang for my buck - 1040 credit, schedule A, PTC, and/or HSA 2014 contribution then reimbursement.

You going C corp or S corp?

Kachad 01-25-2015 05:47 AM

I'm thinking S corp, due to the pass-through taxes and there will just be one employed. :)

I will be drawing upon the GF's knowledge to assist, she has her MBA so I plan to put that to good use.

Selena 01-25-2015 11:32 AM

[QUOTE=Kachad;405549]I'm thinking S corp, due to the pass-through taxes and there will just be one employed. :)

I will be drawing upon the GF's knowledge to assist, she has her MBA so I plan to put that to good use.[/QUOTE]

An S corp would be my choice for a one-person business. More paperwork than being a Schedule C but far less than being a C corp.

Good deal on GF's MBA - the less money you spend on outsides professional services the better. And less overhead for your business will allow you to ride out the lean months (or years in the case of a bust like the real estate market hit).

And kudos to Bearfootfarm on the company name - I'll have to add doing a google search to my checklist.

anna 01-25-2015 06:13 PM

Generally your state's Secretary of State's office should have a search feature to allow you to determine whether or not a corporate name is being used. Failing that a phone call should give you the answer. Much less expensive to clarify availability before having paperwork drafted.

If you have pre-existing medical issues, going the COBRA route might be your best bet. When DH's job ended and he became disabled, we made major sacrifices to keep COBRA coverage for 18 months. It cost us $13,500, but over those 18 months dh had major surgery and therapy after that cost much much more.

Kachad 01-25-2015 10:11 PM

[QUOTE=anna;405584]Generally your state's Secretary of State's office should have a search feature to allow you to determine whether or not a corporate name is being used. Failing that a phone call should give you the answer. Much less expensive to clarify availability before having paperwork drafted.

If you have pre-existing medical issues, going the COBRA route might be your best bet. When DH's job ended and he became disabled, we made major sacrifices to keep COBRA coverage for 18 months. It cost us $13,500, but over those 18 months dh had major surgery and therapy after that cost much much more.[/QUOTE]

Our MN State website is pretty user friendly for searching names, instructions, and information for starting up a business. Sure, a lot of paperwork, but heck, part of the deal, eh?

No pre-existing medical issues, except broken bones from my younger days. Blessed that way!

Selena 01-26-2015 12:01 PM

Pre-existing conditions are not an issue these days - a major benefit of the ACA. However some short term plans that are not ACA compliant can legally not cover pre-existing conditions. Then again, those plans don't meet requirements of having health insurance come tax time. Depending on circumstances, what you save in premiums my be less than your fine.

But I am seeing an increase in the number and scope of questions asked when purchasing life insurance (even group term).


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