Passive Income

“When I got laid off from my job in 2015, I promised myself that I’d do whatever it took to become my own boss and never go back to a full-time job.”

What employers and politicians did not seem to realize is even before, but exasperated by the pandemic lockdown, employees’ are rejecting the traditional work environment. People are rethinking and reevaluating what is important in life. Many employers in the U.S. were slow to adapt to new work models such as working from home, adopting applications (apps), artificial intelligence, on-premise daycare, and flexible work hours.

“Drown decided it was time for him to quit his $15-per-hour job after ice storms pummeled West Virginia in February. According to Drown, he was expected to show up to work despite icy road conditions. When the ice melted, roads began to flood.”

“Drown is one of the many workers responding to companies’ recent complaints about hiring struggles with a simple demand: Improve working conditions, or pay us more.”

Businesses also did not anticipate the cultural work differences between retiring Baby Boomers and Gen-Z. Restaurants did not anticipate the shift by their employees from close-contact, low-wage work to Amazon or other companies that thrived during the lockdown and offer higher pay and benefits.

The worldwide pandemic forced companies in the U.S. to adapt to new ways to conduct business. Many businesses seemed to think these were temporary measures, making empty promises to employees that they would be open to making these changes permanent. Now, these same businesses are reneging on their promises, calling their employees to return to the office, and receiving pushback.

Businesses did not seem to realize how the lockdowns would affect the mindset of employees. Many employees realized the old work model was untenable and began looking for new ways of earning income. The old U. S. model did not allow for a work-life balance. Employees want flexibility, higher pay, and generous benefits. People just want to enjoy their lives with minimal stress.

Quarantine has given us all time and solitude to think—a risk for any individual, and a threat to any status quo.

These conditions in the workplace have increased interest in alternate, additional income streams such as passive income. One appeal of passive income is its tax treatment. Let’s review the basic concepts. (Continued)

Published by Williams Accounting LLC

Williams Accounting LLC is a Las Vegas-based accounting, tax, and financial consulting firm that works with clients to achieve the best solutions for their business.

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