It’s getting better, just not quickly enough.  The streets feel far more crowded than 1-2 years ago, but the majority of business owners are squeezed on both ends by higher wages, inflating expenses, and lower foot traffic.  Today we focus on two interesting niches that have not quite recovered.

Theater Space For Rent

Pop-up event space has always been tricky to find in premium Midtown locations, but now off-Broadway, smaller theaters such as Chain Theatre are regularly offering their spaces to mitigate the shortfall.  It’s unclear what you might host in a 99-seat theatre, complete with a 2nd story escape door and backstage dressing room.  A corporate outing for all-hands meetings?  A hackathon?  Your own escape-room themed birthday party?

It would probably be cheaper than any of the usual hotel spaces to hold a corporate off-site event, but the dimensions don’t exactly lend themselves well to the usual coat check, catering, bar, and networking.  Plus, you are paying for the trap door!  How exactly will your company all-hands meeting use it?  (HR and Security will not be happy)

Still, at least they should have the AV situation mostly under control.  They also have two smaller spaces which could make for breakout rooms at a reasonable additional cost.  It’s unclear if you need to use unionized labor or can bring in your own company, but the restrictions may be more flexible than those at hotels and traditional venues.  Don’t expect theaters to turn into NYC apartments for rent anytime soon, though.  Despite the many creative zoning variances under discussion, theater space is not on the list.

Bridge Clubs in Crisis

Before the pandemic, Manhattan was home to the largest bridge club in the country, and over the years the Greater New York Bridge Association included over 4000 members that frequented 4 fulltime clubs and several private invitational clubs (such as the Regency Whist Club, University Club, and Cosmopolitan Club).  Unfortunately, bridge players are an aging population (median age 74).  They were among the most at-risk group during Covid and many migrated to online bridge or stopped playing altogether.

The once thriving bridge clubs would hold daily tournaments and lessons twice a day, with the main game regularly reaching capacity at 140 players with tables overflowing to the elevator lobby, with many more taking lessons or playing a newcomer game on a different floor.  Evening and weekend games thrived, and some morning sessions ensured heavy utilization of the space: approximately 60 hours of bridge usage per week.

Fast-forward to 2024 and Manhattan is down to one club in a significantly smaller space which fills to 60% capacity on a good day.  There are promising signs for the Wed evening game and a monthly Sunday Swiss teams, but most other evening initiatives have fizzled out.  Club management hiked prices 15% this month, $40 to play in the afternoon main game when online equivalent price is $7 (sans commute, Covid, and getting dressed).

Space Utilization Solutions?

Perhaps the real problem is utilization.  One theory: a space in Midtown New York pretty much needs to be in use at least 40 hours a week in order to make economic sense (pied-à-terre excluded, by definition they do not make economic sense).  Or, when used for fewer hours, the space is packed.  A top flight Broadway show still runs 6 days a week with 2 matinees.  Less popular shows don’t quite meet the bar.  A fulltime bridge club holding only 20 hours of games per week will fold and needs to supplement with Canasta, Mah Jongg, Scrabble, and Backgammon (at one point they considered Magic: The Gathering).

Would it make sense in the future to build multi-purpose space that has one group heavily utilizing only during the day and another group only in the evenings?  What would it take to build a space configurable to both bridge and theater, all in the same day?  More amusing, could we extend the idea to apartments and offices?  Instead of “work-from-home”, what if we reverse the concept to “sleep-at-office” where you save money on rent because everything you need, from showers to beds to baby cribs, could be found at the office?

Ok, sleep-at-office is probably not feasible, especially once families and children enter the picture.  But we should continue to brainstorm creative and quirky solutions that could appeal to an open-minded niche and unlock many hours of idle space-time.  By pushing the boundaries of what normal zoning and building codes allow, we might just stumble into a sustainable new normal.

The post Midtown New York 2024: Empty Offices, Theaters, and Bridge Clubs appeared first on CitySignal.

Less Ideal: The 401K Loan

Most readers might think we are discussing the 401k loan trick.  To be fair, borrowing against your 401k is a reasonable option.  You can take a loan penalty-free and tax-free from your pre-tax 401k, as long as you “pay yourself back with interest,” as they say.

That point of paying yourself back with interest is entirely confusing to almost everyone and even the so-called financial experts tend to get it wrong.  Yes, you have to pay back what you borrowed, but that’s just taking the money you got up front and putting it back in later.  No harm done.  You didn’t have to pay taxes or penalties on the lump sum you took out, so it’s only fair that you use post-tax dollars to pay it back later.

The interest is the weird part. Who gets the interest, your employer, your fellow employees in the plan, the IRS, or someone else?  Turns out all of those are wrong.  You get the interest!  What?!?  Yes, you actually pay the interest and it increases the balance of your account.  However, that increased balance is still considered pre-tax dollars much later on in life when you are finally required to withdraw the old-fashioned way at age 70+.

There are other disadvantages:  the loan duration is only 5 years (not the 30 you might want when buying investment or personal property).  You also can’t contribute new funds into the 401k while the loan is outstanding (although weird loopholes may apply if you have multiple jobs or already changed jobs, or have your own self-employed 401k).

You don’t get any sort of tax deduction on what you pay back, otherwise you’d be getting a tax deduction twice.  If that sounds confusing, don’t even worry about it.  It’s not important – just know that the 401k loan is a very reasonable way to tap your retirement account at a very low interest rate, but has limitations.

Very Limited: The First Time Homebuyer

Most people have heard about a penalty-free withdraw for first time homebuyers, but the limit is so low in this day and age that it’s barely worth mentioning.  You can take up to $10K out of any IRA without penalty, but you must still pay the tax.  In most parts of the country, that isn’t going to make much of a dent in the down payment.  Perhaps if they indexed this to inflation it would help a little, but it’s one of those laws that came out over a decade ago that no one seems inclined to fix.  Next.

Best Retirement Account Early Withdrawal Method: SEPP Withdrawal

For those who want to tap a large retirement account before age 59.5, there is the little known and totally legal method called SEPP Withdrawals.  SEPP stands for Substantially Equal Periodic Payments, and it is a strange IRS loophole created for savers who claim they are retiring early.  It’s also know as 72(t) payments, because it is codified in section 72(t) of the complex IRS rules governing retirement accounts.

You can start at almost any age earlier than the usual 59.5, and there would be no point to starting later because you can withdraw penalty-free the regular way.

Why is the SEPP method better than the others?

1.)  There is no arbitrarily low dollar cap on the amount you can take.  If you have a multi-million dollar balance (or in Peter Thiel’s case over a billion), then you can drain it all over the withdrawal period.

2.)  It counts as income in case you want to qualify for a loan or condo / co-op purchase.  Early retirees or those with lots of savings but difficult-to-document income can use these withdrawals as an income source for any situation that requires income but not assets.

3.) You can decide how much to take.  You don’t have to drain all of it and you can basically stop once you are 59.5 or after 5 years, whichever is later.

4.) There is no 10% early withdrawal penalty.

What’s the catch?  You are still limited to how much you can take in any given year.  It is approximately 1/30th of the amount in your retirement account per year (even less if you opt in when extremely young, say 35-45).  That’s because the rules require you to simulate a retirement that begins the day you withdraw, in lieu of the normal 60-70 age range.

Still, of all the possible methods, this is the least used and most beneficial way to tap into a large retirement account.  Best of all, the tax is staggered throughout many years, so hopefully you can optimize further by engineering a lower tax bracket during your years of withdraw.  Contrast this with the much-loved backdoor Roth IRA conversion — also an interesting technique — but one that leaves you with a huge lump sum tax bill the year you do it.

Btw, nothing stops you from taking some of these SEPP payments and spinning up a new Roth IRA or Roth 401k, a topic for next time…

The Main Downside to Every Early Withdraw

What’s the main downside to any of these methods?  Opportunity Cost.  For the past century, buy-and-hold as worked very well over any long period, and when you withdraw that money, you are likely doing so because you want to spend it.  Are you willing to give up the age-old long term stock market return of 8%?

It’s important to call out a particular group that might be hoping to withdraw early:  investors who want to beat the market using alternative asset classes.  Do you think your real estate, startup angel investing, crypto speculation, or futures and options trading has a chance of beating the market?  You might be considering taking money out of the safe and regulated world of retirement accounts to take an increased gamble.  Please don’t.  Very very few people can beat the market long term, and those that do aren’t the ones who need to tap their 401k’s for cash.

The post The Least Known Secret to Avoid IRA and 401K Early Withdrawal Penalties appeared first on CitySignal.

Zoning Rules for a Home Business

Your first order of business should be to figure out your building’s zoning designation, as this will determine the types of businesses that can be run out of your property. This information can easily be found by entering your address into ZoLa, the city’s interactive zoning and land use map.

Most aspiring business owners will find that their apartment is designated as a residential zone. Some buildings do fall under mixed-use zoning laws, but these are relatively uncommon. Residential zones impose tight restrictions on business activities, though these may not necessarily be an obstacle depending on the nature of your proposed venture. Home businesses located in residential zones cannot take up more than five hundred square feet or 25% of the owner’s residence, whichever is less. The business must be owned and operated by the resident, and only one non-resident may be kept as an employee. In addition, all goods sold must be produced on-site and cannot be stored at a secondary location. 

If you are trying to start a tutoring program, be aware that your classes will be limited to four or fewer students under residential zoning laws. If you’re specifically a music teacher, you can only teach lessons to one pupil at a time. Finally, you will not be allowed to post signage related to your business outside of the building, display your goods to the street outside through any type of display window, or make any renovations that alter the “character” of the building.

It’s possible to apply for a zoning variance to avoid some of these pitfalls, but this is a complicated process for an individual to go through without assistance. Generally speaking, your best bet will either be to conform to zoning rules or find an alternate location for your business. 

Building-Specific Policies for Business Run from Home

Even if your business fits within the parameters laid out by your zoning laws,  you’ll have to check in with your landlord, building manager, or co-op board about your business plans before you hit the ground running.

It will help if you head into this conversation with a clear idea of the kind of enterprise you will be running so that you can provide specific details on what hours your business will be open, the nature of the goods or services you’ll be providing, and how many customers you’re expecting to visit the premises regularly. Having strangers entering the property at all hours can be a security concern for landlords, so ventures that rely on a lot of foot traffic may not be an ideal fit for the home business model. 

Some landlords incorporate language into their leases stating that the apartment shall be used “for living purposes only” in an attempt to ban tenants from using their home as a place of business. Still, even if there is nothing in your lease explicitly forbidding your apartment’s use as a home business, there is a chance that you could face eviction for violating other aspects of your lease agreement. For example, a business that causes undue disturbances to your neighbors or excessive wear and tears on the apartment is likely to get your landlord up in arms very quickly. 

Finally, keep in mind that your renter’s insurance does not extend to your business or employees. It may be necessary to renegotiate your policy with your insurance agency or apply for insurance specific to your business to be certain that you’re covered in the case of accidents or injuries. This is especially true of food-related businesses, as there is always the risk of being sued over an instance of food poisoning or an allergic reaction.

Other Considerations

Depending on the type of business you are trying to run, there are also licensing mandates and other local guidelines that must be taken into account. Some home businesses, including barbershops, animal kennels, interior decorators’ offices, and pharmacies, are summarily prohibited under the city’s zoning ordinances due to the hygiene risk they pose.

To ensure the health of prospective customers, New York State requires those hoping to start a food-related home business to apply for a Home Processor Exemption to sell their goods online or at local farmer’s markets. Under this exemption, your kitchen will be subject to inspection if the state ever receives complaints from customers and you will be limited to producing certain allowed foods. Bread, pastries, jams, prepackaged confections, and snack mixes are generally safe, while any dairy-based foods, that require refrigeration, or contain chocolate are not allowed. 

If you’re hoping to start a home-based agricultural business, your options are even more limited. While it’s fully legal to own a pet chicken in New York City, it’s unlawful to keep them to sell their meat or eggs. It’s possible to keep a beehive and sell the honey made by your bees, but all apiaries within the city must be registered with the Department of Health. 

Anyone seeking to run a childcare business out of their home is required to register with the state of New York before they can begin taking on clients. Additionally, the residence itself must conform to a stringent list of requirements regarding ventilation, heating, and the accessibility of bathroom facilities, while prospective childcare providers must be evaluated for past criminal offenses, first aid knowledge, and other qualifications. The city of New York previously required childcare workers to be fingerprinted by the New York City Department of Investigation, but this is no longer the case as of June 2020.

Though the hurdles to starting your own home business may seem formidable, any plucky entrepreneur can make their startup dreams come true when armed with the correct information. 

The post The Legality of Running a Business from Your Home appeared first on CitySignal.

Cannabis laws, specifically marijuana, has completely destroyed the lives of individuals, dating back to the war on drugs during the Richard Nixon era. What was proposed as a necessary path to eliminating drug use in America, quickly shifted into an inequitable attack on minorities that has spanned decades. Disproportionately hurting minorities and those with lower socio-economic backgrounds, only now are we beginning to correct some of those wrongs, including New York’s equitable approach to legalizing marijuana.

Background: The War on Drugs and the Present

The war on drugs was designed to harm specific groups as one top Nixon aid confirmed the targeting of certain groups, saying in a 1994 interview published in 2016, “we knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course, we did.”

The path to remedy comes in many shapes: decriminalizing cannabis, overturning prior convictions, condemning the war on drugs, but the reality is, it’s impossible to correct all of the wrongs. There is no way to give back lost years of life. There is no way to repair broken homes, families, and so on. Even recent promises are behind in so many places, including the sweeping pardoning outlined in Joe Biden’s campaigning. As one person wrote when telling their story of how cannabis prohibition ruined his life via a 60-month sentencing, since taking office, “[Joe Biden] has pardoned two turkeys – and no people.”

Similar promises have come from Senator Chuck Schumer, who said in 2020, “I am going to do everything I can to end the federal prohibition on marijuana” in a rallying cry for Democrats to take back the Senate. Both, if not all, promises at the federal level have fallen flat, leaving many to wonder when relief will come, if ever. Some states and cities have since come up with ways to address the problem in their localities, pushing for legalization or policies that create equitable conditions in the aftermath of legalization.

New York’s Promise

New York, following similar policies outlined in other progressive areas and its recent legalization of marijuana use in the state, has opted to give selling permits to those with prior convictions first. While other equitable moves have been made in the country, none as bold and defined as limiting first dibs on licenses to those affected by prior convictions. The move is a direct attempt at writing wrongs of the last few decades, but it leaves many wondering, is it enough?

If properly implemented, reserving first sales licenses for New Yorkers with previous convictions will directly reverse some wrongs for some citizens, but there are a finite number of licenses available compared to the thousands of citizens with former convictions. Where do the people without the funds for a startup, business experience, or those that don’t receive a license fit into the solution? Do they simply benefit from decriminalized use? While this may be a step in the right direction to help some, it’s not necessarily an all-out rectification. There are simply not enough licenses to go around. It also raises another important question of what happens to entrepreneurs who have already made their mark in the state, specifically New York City, following legalization.

What About Those Already Selling in Limbo?

Since being decriminalized in March of 2021, the process for an official and licensed rollout of marijuana sales has not been off to the best start. No licenses have been delved out yet. Only now is that beginning to happen, a year later, which left room for a thriving decriminalized, but not totally legal, marijuana market in the city.

This means that those that are currently selling without licensing are getting a head start on a soon-to-be multi-billion-dollar business in New York. The slow rollout makes some wonder whether receiving an official license from the state, launching a business, and gaining momentum now will ever stand a chance to the already established businesses that have been selling since legalization last year. Thus, the impeding licenses have seemingly lost a chunk of their value because many, even peers that have also suffered at the hands of the war on drugs, have beat new licensees to the punch in creating successful businesses prior to licensing.

What About Those Without Business Experience?

One requirement for license eligibility is that a person has a proven track record of at least two years with a profitable business. If someone is newly released or still reeling from their life being broken apart due to the war on drugs, how can they capitalize on this new project?

It makes sense that the state would only want to back up profitable businesses as their revenue and name would be on the line too, but in the same stroke, it completely limits licensure to those that were able to thrive following conviction. This further drives the division between licensed and unlicensed sellers as the reality is many won’t be eligible. Not anytime soon, at least, and not for the first batch of licenses. Furthermore, there are limits on the types of crimes and the timeline of crimes too as the bill outlines that those convicted of certain felonies within a 3 year time period to licensure may not be eligible for licensure, as outlined on page 26 of the bill’s text.

Will Citizens Want to Purchase from Legal Sites?

On the other hand, if the state managed to publicly shut down all of the unlicensed dealers, including trucks, folding table entrepreneurs, and brick-and-mortars, there is still no guarantee that citizens will want to purchase from the government-sponsored stores because they often have high taxes and higher overall costs for operation.

Massachusetts adopted a similar equitable policy that left many still wanting to purchase and sell under the table due to the ridiculously high prices for the product. Because it’s legal either way, some may not see the benefit of purchasing through the state. If it strictly came down to a consumer’s affordability, legal businesses may be skipped for a cheaper option, providing little benefit for those operating with licenses anyway.

That’s not to say that one or the other is more deserving of being able to sell, but that the state, in its delay, has created a new layer of trouble. It’s created a competition between licensed and unlicensed business operations, with one side having a hearty head start and much success.

What Happens to Unlicensed Marijuana Businesses?

In forcing already operating and established unlicensed businesses to close down operations to make room for newly licensed businesses, there will likely be a new wave of condemnation. While some of these businesses may receive a license and be able to operate completely above-board, there is no guarantee and not a universal want.

In addition to there being no guarantee that already operating businesses will receive a license, despite already operating successfully, they may also not receive one, perhaps in spite of it. Some, holding true to the idea of entrepreneurship, have taken the business into their own hands and built successful brands without the help of the state and with no intent of help from the state.

One prolific business, The Green Truck, aka Uncle Budd, has commented on their business operations despite being unlicensed, saying, “we’re actually going to the people that were hurt by the marijuana laws, and we’re trying to bring them into the industry based on our understanding of the guidance that’s being offered today from the state.”

The state has begun to send cease and desist letters to unauthorized sellers. Businesses attempt to skirt past the requirements by the state for licensure, instead having consumers pay for memberships, not the cannabis products themselves. One popular shop in Chelsea, Empire Cannabis Club, owned by the Elfland family, has taken on this business model, and despite the state telling them to quit, they maintain that their membership model keeps everything legal.

Businesses like Empire hopes to secure a license when available, but they refuse to sit by and let others, such as already licensed medical marijuana sellers, overtake the market in the meantime. Regardless of what the state says, they have no plans of stopping their business and plan to continue expanding it instead. For the family, it would be nice to have the license, but it’s not a requirement on their path for redemption in righting all the wrongs of the past, especially in their own family.  

New York’s Hopes for the Future

The guidelines as of now are that of the first 100-200 licenses, priority will go to a business with operators who were formerly convicted or to a person whose immediate family was incarcerated for marijuana-related crimes. The program is honorable but presents many potential problems as rollout begins and the state grows accustomed to a legal market.

As Governor Kathy Hochul says, “New York State is making history, launching a first-of-its-kind approach to the cannabis industry that takes a major step forward in righting the wrongs of the past… I’m proud New York will be a national model for the safe, equitable, and inclusive industry we are now building.”

The hope is that the initiative set forth by New York officials will do just that, but there is a risk of leaving behind others, even those with already recognizable businesses growing in the city. In an ideal world, those that have made the most of 2021’s legalization will be able to receive licensing and operate under fair guidelines that are not too different from their current operations.

While this seems unlikely with potential profitability for the state and subsequent interference, it’s unclear how the state will manage to limit leaving behind those that matter the most. While the state hopes to pioneer an equitable legalization method, the process will also involve carefully navigating the fallout as well.

For more information on eligibility and restrictions, visit New York Senate Bill S854A.

The post The Fallout of New York’s New Marijuana License Policy appeared first on CitySignal.

What Is the Myers-Briggs Test?

The Myers-Briggs Type Indicator, commonly known as the MBTI or the Myers-Briggs test, is a 93-question survey that purports to measure an individual’s personality by categorizing them as one of sixteen different personality types. These types are defined by four different categories, each of which offers two diametrically opposed preferences: introversion vs. extroversion, sensing vs. intuition, thinking vs. feeling, and judging vs. perceiving. After taking the test, which is entirely self-reported, one is assigned a four-letter acronym corresponding to their rest result, i.e. “INFJ” for someone whose personality is determined to be “introverted-intuitive-feeling-judging.” The intended purpose of the test is to identify an individual’s preferences, strengths, weaknesses, and compatibility with other personality types.

Where Did the MBTI Come From?

The Myers-Briggs test was developed by Katharine Briggs and her daughter Isabel Myers in the 1940s. A highly-educated woman who struggled with the tedium of life as a housewife, Briggs filled her days at home by developing theories on social development and classification that were heavily inspired by her days in agricultural college as well as the writings of Swiss psychiatrist Carl Jung (with whom she shared a lengthy, if irregular, correspondence).

Isabel became intrigued by the possibility that her mother’s theories could be put to use in the war effort by helping to place soldiers and personnel in positions best suited to their character.

While neither Katharine nor Isabel had any formal training in psychology, they went to work formalizing and refining the personality assessment that would come to be known as the Myers-Briggs Type Indicator.

Today, the MBTI is taken by more than two million people annually and is believed to be the most popular personality test in the world. It also brings in more than $20 billion to CCP, Inc., the Myers-Briggs test’s publisher, each year.

Is the Myers-Briggs Test Accurate?

Popularity, however, does not necessarily equate to accuracy—and the MBTI has many skeptics in the field of psychology. “In social science, we use four standards: Are the categories reliable, valid, independent, and comprehensive?” explains Adam Grant, professor of psychology at the University of Pennsylvania. “For the MBTI, the evidence says not very, no, no, and not really.”

“Reliability” refers to an assessment’s ability to return the same result when retaken on a later occasion. While the MBTI website claims that 75-90% of repeat testers receive the same result, independent studies have found that the test varies in reliability up to 50% of the time.

Many also question the inherent validity of a test that limits individuals to sixteen personality types and argue that this model is not comprehensive because it does not account for traits such as neuroticism and deceitfulness. And, because the test is published by a private organization that makes substantial profits on MBTI-related toolkits and merchandise, it cannot be considered a truly unbiased and independent assessment.

How Is the Myers-Briggs Test Being Used in the Workplace?

More than 88% of Fortune 500 companies use the Myers-Briggs Type Indicator as a tool for cultivating and maintaining their office environment.

Managers might require all employees to take the Myers-Briggs test in the hopes that having a working knowledge of their employees’ behavioral predilections will help to nip workplace tensions in the bud. For instance, a manager might try to avoid placing an INTJ employee on a project with an ESFP employee because these personality types are theorized to be more likely to conflict. Instead, the introverted INTJ employee might be assigned a solo project while the ESFP employee might be put on a team with a group of other gregarious extroverts.

Some companies even make use of Myers-Briggs types in hiring. For example, a few studies claim that thinking-judging personality types, or TJs, tend to excel in fields related to computer information systems. With this in mind, hiring managers might choose to immediately discard any candidates whose results show they learn more toward the feeling-perceiving, or FP, dichotomy.

Why Is This Problematic?

There are a number of moral issues at play regarding the use of Myers-Briggs tests to classify employees. Think of the first example above: even if the INTJ possessed a great deal of relevant expertise, they would miss out on participating on the project because their supervisor made an arbitrary judgment about their qualifications based solely on their personality type.

The example regarding the use of MBTI in hiring, however, goes past the boundary of “problematic” and into “downright illegal” territory. The Civil Rights Act of 1964 bars employees from discriminating during the hiring process based on aspects of an applicant’s race, color, religion, sex, and national origin. A court of law could argue that “personality” is a nebulous enough term that it could be used as a cover to discriminate against an individual for any of the traits listed above, making the use of Myers-Briggs results to screen potential employees technically unlawful.

Additionally, the Equal Employment Opportunity Commission has stated that any testing procedure used in hiring “must be job-related and its results appropriate for the employer’s purpose.” Certain states also have privacy laws in regards to hiring practices that protect prospective employees from having to disclose information about their character and personal beliefs—both key components of the Myers-Briggs test. Even the Myers-Briggs website warns that “it is not ethical to use the MBTI instrument for hiring or for deciding job assignments.”

What Is the Best Way to Use the Myers-Briggs Test?

In spite of the flawed science behind the Myers-Briggs Type Indicator, some psychologists point out that the MBTI can be a useful tool for self-reflection and may help users to better empathize with those who socialize and process information differently than they do. If used to assess and appreciate the diverse strengths of a workplace team rather than as a strict classification system by which to sort employees, the Myers-Briggs test has the potential to lead to an increased sense of comradeship and greater job satisfaction within the workplace.

The post The Ethical Implications of Personality Testing in the Workplace appeared first on CitySignal.

It’s important to know that dependents come in many different forms—there are plenty of people who might qualify as a dependent other than your children. In fact, millions of American households will claim an “adult dependent” on their taxes every year. However, to correctly claim anyone as a dependent while filing your taxes, you will first need to make sure they actually qualify.

Whether you have personally filed your taxes before or not, you probably have a lot of questions. Below, we will discuss the most important things to know about claiming an adult dependent. We will also discuss how to claim a dependent, in general. By taking the time to understand this process, you can potentially minimize your tax obligations and avoid some common filing mistakes.

Who Can I Claim as a Dependent?

The Internal Revenue Service (IRS) has developed specific guidelines for who can legally qualify as a dependent, though most tax lawyers believe this definition is likely to change by 2025. Keeping this in mind, the IRS’s current definition of a dependent is someone “other than the taxpayer or spouse” who qualifies for a dependence exemption. In other words, the definition is currently pretty vague.

Generally speaking, a dependent is someone who depends on you for financial support. A dependent is not a roommate or someone you happen to be living with unless you are also the primary source of financial support for this person.

Of course, whether you are truly a source of financial support can often be up for interpretation (a teenager with a summer job can likely be claimed as a dependent, whereas someone you simply gave some money to probably doesn’t qualify as a dependent). For someone to be claimed as a dependent—regardless of age—you’ll need:

• To have a “qualifying relationship” with this person. The person can be a qualifying child or a qualifying relative as defined by the IRS.
• If you do not have a qualifying relationship, the person will need to live with you, whether you rent or own.
• To satisfy pre-defined income requirements (explained below)
• To satisfy the “51 percent rule” (explained below)
• To both have a valid social security number (SSN) or a valid taxpayer identification number (TIN)

If you are hoping to get dependent benefits at both the federal and state levels (and, for some cities, the municipal level), you’ll need to ensure that you follow all local laws. When in doubt, check with an accountant or lawyer to ensure you can claim an adult dependent—claiming someone who does not qualify can have future legal or financial consequences.

Laws Affecting Dependent Status

The Tax Cuts and Jobs Act (TCJA) dramatically changed tax laws in the United States. After the Act was passed in 2017, the previous personal exemption and dependent exemptions were eliminated, meaning that it is not as easy to claim an adult dependent as it was in years past. 

These exemptions are currently set to return in 2026. However, even with the TCJA, there are still a few ways you can claim a dependent. Dependents can still be claimed for the Child and Dependent Care Tax Credit, as long as they meet the basic requirements. Additionally, you can also file as head of your household and improve your tax position even further.

Claiming a Tax Credit for “Other Dependents”

The TCJA includes a tax credit for “other dependents,” which can be used for individuals above the age of 16 (for those who are under 16, you can use the child tax credit). As long as the people you are claiming as a dependent meet the standards outlined by the IRS (further described below), you will be able to reduce your household tax obligations by $500 per dependent. 

Making Sure You Qualify

To start with, both you and each person you are claiming as a dependent must be a U.S. citizen, a U.S. national, or a U.S. resident alien—they can also be citizens of Canada or Mexico. The person being claimed as a dependent will not be able to claim any dependents of their own, though they can still work and generate a limited amount of income.

For an adult (anyone 17 or older) to be claimed as a dependent, they must live with you or have a close relationship with you. “Close relationships” can include parents, grandparents, siblings, half- and step-siblings, aunts and uncles, nieces and nephews, in-laws, and some others.

For a person to be claimed as a dependent, their personal income must be less than $4,300 (tax year 2021). There is, however, an exception if the person is disabled and has income from a sheltered workshop. Additionally, you must be able to satisfy the “support rule,” meaning that you personally provide more than half of all financial support.

The tax code is complicated and is always changing. It is quite possible that dependency requirements will change again before the end of the fiscal year, so it will be essential to pay attention to these developments before making any credit or deduction claims on your taxes. However, as long as you can meet these basic conditions, you will be able to claim a person as a dependent on your taxes—in some cases, that can mean big savings on taxes. 

The post Everything You Need to Know About Claiming an Adult Dependent on Your Taxes appeared first on CitySignal.

About Affirm 

Affirm was originally founded in 2012 by four men; most notably Pay-Pal co-founder Max Levchin, who is also the company’s CEO, as of 2014. Additionally, we have Nathan Gettings, Jeffrey Kaditz, and Alex Rampell.

Headquartered in San Francisco, Affirm is truly the next big deal in shopping trends, at least in my ‘limited-credit-opinion’. What do I mean by that? Well, if you ever shop on Amazon or go to Walmart for groceries, etc., then you may already be aware of the company. Affirm is a new financial lender that offers consumers installment loans at point-of-sale purchases, giving people the option to buy now, pay later. In fact, in 2017 they introduced their app, which allowed consumers a loan option for purchases at any retailer. Short-term loans with low interest at point-of-sale retailers, it turns out, are something consumers welcomed. In 2019, they partnered with Walmart, who now allows all customers that option, both for in-store and online purchases. Affirm has also partnered with other huge e-commerce platforms like Shopify, BigCommerce, ZenCart, and their most recent partnership – Amazon.

They are already huge, and likely will be unstoppable in no time – unless…

The Unthinkable 

But just when things really looked like a slam-dunk, even as their Q2 earnings call was scheduled for February 10th, 2022, no problems were anticipated and CEO Levchin felt they’d performed above expectations. He did anticipate some degree of explanation (more like clarification, he hoped) that may be needed, for a couple of discrepancies – but certainly, nothing that should have alarmed investors the way it did. After all, the nature of their business model had never been used before, but even going by the closest guidance they could use, certain factors are always unknown, and can’t be known, except over time. 

Ah, but then the truly unthinkable happened – in one of those ‘freak moments’ of human error, someone at Affirm accidentally tweeted from the company’s official Twitter account, some of the results from the earnings call – too early. To top it off, the portion that was released influenced the stock prices, in an increase of 10%! But when the rest of their earnings were posted, their stock prices plummeted – and they haven’t stopped falling, ever since. 

They are being discussed as a ‘buy-now’ stock, by some, since prices are at an all-time low and many still see it as a valuable stock, especially over time. However, others have already panicked and are saying the opposite. Analysts on the issue are split on their opinions, so I’m going to really go out on a limb here and offer mine. I sincerely believe in Bert Hochfield’s ‘Case for Investing’ from Seeking Alpha. However, it is important to note that the same publication puts out advice to the contrary. The outcome of Affirm is yet to be determined, so let’s go over some of the data for ourselves.

Now, I understand this next part is likely where I lose your attention, so I ask you to try to muddle through with me. After all, you’ve made it this far – and these numbers are important to know!     

The Numbers 

So what was so bad about their 2022 Q2 earnings call that it caused all this drama? Great question! I wish I had the answer. Here’s what I do know.

Affirm’s revenue in Q2 increased to $361 million from $204 million, and the expected average by analysts from FactSet said they were looking for $329 million. The main area in question came from the fact that their own forecast for the quarter called for higher than expected volume, but lower than expected revenue. That speculation alone, sparked one analyst to question if Affirm’s new partnership with Amazon was really as profitable as expected, wondering if their ‘take rate’ was too low. Another analyst pointed out that their gross revenue as a percentage of their volume declined from 10% to 8%. Sales rose by 77% and active customers rose 150% year over year. Merchants on the platform rose 65%. But operating expenses are still outpacing revenue, a big concern for investors. And during the last 6 months of 2021, they lost $469 million.

Still, for a relatively new company that just went public in January 2021, it’s a little surprising that the stock market has chosen to focus only on the negative.

The New Debit+ Card, Peloton, and More 

Peloton stock, like Affirm, has also experienced its own problems but seems to be rebounding a bit. This company also has a partnership with Affirm, offering customers a choice of financing with no money down and 0% APR on 12, 24, or 39-month terms. It’s never been easier to buy an expensive exercise bike and other at-home fitness equipment. Additionally, Affirm has just come out with their Debit+ card, in a new partnership with Visa. The card enables customers to split up payments for most purchases between $100 and $1,000. So far, the card is being used even more than the loan option but is still in the testing stage. The company has a lot of promise, the current situation notwithstanding. 

There, now that wasn’t so hard, was it? 

The post Is Affirm Affirmatively Through? appeared first on CitySignal.

Of course, the first thing that probably comes to mind when it comes to generating a secondary income is getting another job. But it is also very likely that you don’t have the time, resources, or, frankly, the energy needed to do so. If a second job is something you either don’t want or cannot do, you are probably looking for a few alternative options.

Luckily, there are plenty of ways to generate a second income and many of these strategies require a relatively small commitment. Donating your blood plasma, eggs, or sperm can help you create the secondary income you need—and if you live in or near New York City, you might be surprised just how many options are currently available.

In this article, we will briefly discuss the most important things you need to know about donating these valuable products that your body naturally creates (or has already created). By taking the time to learn more about the donation process, you can decide if these options are right for you.

What You Need to Know About Donating Sperm

Sperm is essential for the creation of human life and donated sperm can be used to help facilitate intrauterine or intracervical insemination. According to the National Institute of Health, approximately half a million American women will utilize donor insemination per year.

Donating sperm can potentially be very lucrative. A single donation can net between $500 and $1,000 and most sperm banks will want to collect multiple deposits from a single donor—this means you could potentially make an additional $10,000 per year (or even more) by choosing to donate sperm.

However, while there is potential for you to make a profit, it can be very difficult to qualify. According to the New York Times, “Your odds of getting into Harvard or Stanford are higher than your chances of being accepted as a donor at the major sperm banks.” About one percent of all applicants are accepted.

At the very least, you will need to be medically healthy, have a high sperm count, be abstinent for about 3 days before a deposit, and will need to have sperm that can be frozen easily. You will also usually need to be between 18 and 39, have no infectious or hereditary diseases, and have a clean family medical history. You can expect to fill out quite a bit of paperwork and answer questions from the clinic. But if all goes well, New Yorkers have several options available to choose from—some of the most popular include Manhattan CryoBank, California Cryobank, and Repro Lab, all located in Manhattan.

What You Need to Know About Donating Eggs

Eggs are also essential for the creation of human life and, unlike sperm, eggs are finite, so successfully donating eggs can earn you considerably more money. A successful egg donation can yield as much as $5,000 to $10,000 per cycle, though acceptance rates, as you might expect, are relatively low. Donors will also need to consent to take certain fertility medications.

According to the New York Department of Health, “Egg donors are people usually between the ages of 21 and 34, who are willing to provide their eggs to a recipient. They may be known or unknown by the intended parent.” Before donating eggs, potential donors will need to give informed consent and also complete a variety of medical tests and forms. Successful donations (donations that result in pregnancy) according to the CDC and Society for Associated Reproductive Technology (SART) occur about 54 percent of the time.

As the NY Department of Health explains, “Fertility drugs are used to stimulate the ovary to grow several eggs at once. Over 10 days or so, they grow to full size. Monitoring of your ovaries’ response by ultrasound is important.” Following the ovarian stimulation cycle, the egg is extracted via fluid. After that, the egg can be combined with sperm to create an embryo and the cycle can then begin again.

There are several egg donation clinics in New York, including clinics sponsored by NYU and Columbia University. If you are interested in donating eggs, you should ask your doctor (specifically, your OBGYN) if they have any recommendations.

What You Need to Know About Donating Blood Plasma

Another way to supplement your income is by choosing to donate blood plasma. Plasma can be used for several useful purposes, including cancer treatments, transplant surgeries, treating hemophilia, and important medical research.

Though donating plasma does not pay nearly as well as donating sperm or eggs, your odds of getting approved are notably higher. However, as you’d probably expect, you will still need to complete some basic paperwork and blood tests before your donation will be accepted.

In order to donate plasma, you will typically need to be 18 years old, weigh at least 110 pounds, and pass a physical examination. The entire process typically takes about an hour and 15 minutes—you may feel some minor side effects after donating, such as fatigue, dizziness, or others.

Most plasma donation centers in New York City will pay about $50 to $100 per donation, though many of them also offer generous bonuses for first-time donors. Generally speaking, you can donate up to twice per week and will need to have at least one day between your donations. There are dozens of plasma donation centers located in New York City, including the New York Blood Center (NYBC).

Each of these strategies can help create supplementary income—however, before considering any sort of medical procedure, we recommend getting clearance from your doctor.

The post How Donating Your Sperm, Eggs, or Blood Plasma Can Help Supplement Your Income appeared first on CitySignal.

Many people celebrated the legalization of weed in New York State back in March of 2021. I may or may not have been one of those people. Sorry Mom, but there was so much to celebrate! It was an exciting time to be a New Yorker, so why did that excitement die down? You certainly see a larger sense of calm amongst smokers. You can’t go to Times Square without smelling the sticky icky. However, it’s been nearly a year since it’s been legalized, and people just seem to be twiddling their thumbs waiting on information.

So what’s the good word? How legal is weed? And is it even legal for everybody?

Medical Marijuana in NYC

First and foremost, medical weed is very legal in New York and has been since 2014. Getting it is a bit of a hassle though. First, you need a doctor’s note. However, the doctor in question has to be legally allowed to give out cannabis prescriptions, which is a bunch of hurdles that we don’t have time to get into. 

Additionally, the prescription can only last up to 60 days. That said, the new cannabis law lets certified prescription holders grow a few cannabis plants in their apartments. And nothing’s more fun than a little botany project!

Status of Legal Marijuana in NYC

For everyone else, it’s a lot easier, at least on paper. Anyone over 21 can smoke weed anywhere people can smoke cigarettes. They can hold up to three ounces at a time. Where this gets interesting is what happens when legal sales in dispensaries finally begin. People 21 and over will be allowed to have 5 pounds of weed, which is an insane amount. They’ll also be allowed to have three plants (six if there are multiple adults in the space) and on-site areas that people can congregate and smoke together. Which is great news for casual smokers! So…When do the sales begin?

The NYC government website says that legal sales will start at the end of 2022. However, other people are skeptical for a variety of reasons. Things seem to be on track for NYC, but many places upstate have opted out of legal sales altogether. There are several reasons for this, like the fact that other states that have legalized weed, like California, are still seeing high rates of illegal sales. Many of these New York towns want to see if NYC will go the same way. That said, all sales in NYC are technically illegal right now, so this is an experiment that will take a while to shake out.

When dispensary licenses do eventually go out, half will be given out to communities that have been negatively impacted by the war on drugs. Additionally, people charged and/or convicted of certain crimes will have their records expunged. That said, not everyone who has been charged with a cannabis-related crime is so lucky. Those who have been prosecuted federally will still, unfortunately, be in prison, even if that prison is in New York State. This is one of the biggest criticisms people have of cannabis legalization. It’s not a great look when dispensaries open, but people are still behind bars for something that’s no longer a crime.

But again, NYC doesn’t really have an issue with dispensaries because there aren’t any. In fact, many people who have been selling illegally even want to be doing it the right way. The Rolling Stones covered a man by the moniker of Uncle Budd. But Uncle Budd doesn’t sell weed out of a van. Instead, people give this jolly gent a donation. Once said the donation is given, Uncle Budd then feels so wonderful about this amazing donation that he gives them weed as a fun little thank you. And there’s no law against giving weed as a gift! 

However, that same Rolling Stones article details how much Uncle Budd wants to sell his product legally. However, the distribution of licenses has had some slowdowns, largely due to Andrew Cuomo in 2021 being Andrew Cuomo in 2021. As stated earlier in the article, the plan is to get the ball rolling by the end of this year. Until then, places like Uncle Budd’s van are technically illegal. That said, nobody seems to care so far. The crackdowns of the past have become very infrequent and folks in the city seem to be going with the flow.

So things in the city have largely stalled when it comes to legal weed. Illegal sales are still happening as the government twiddles their thumbs, people are still in prison waiting to be free, and no one, except people with subscriptions, has a way to purchase it legally. So while things are definitely better, they are still not ideal.

The people of New York City don’t know what’s going to happen next because no one is really being clear. Take the city website for example. All they say about when legal sales start is that it will happen “in late 2022 at the earliest.”

There is no date set in stone and things keep getting pushed back. The Cannabis Control Board sometimes holds public meetings, but not a lot happens at them. So what can be done here? First and foremost, the city and state need to release the people they said they would from prison. This process has started but is going extremely slow. The second thing that needs to happen immediately is the distribution of licenses. This will at least give the mobile weed sellers in the city an opportunity to sell legally.

Smoking and possessing weed in the city is finally legal after decades of over-policing. This is a great step for all stoners and casual smokers alike!

However, now that the seal of approval has been made public, progress has stalled and that is not good for anyone involved. NYC and New York State as a whole clearly want to do better for their citizens. But doing better means actually doing something to make progress.

Possessing and smoking weed doesn’t really mean anything if selling and buying are still illegal. So for now, while things are better, they have somehow still remained the same. It’s a weird situation for sure, but hopefully, things will improve soon.

Until then, smoke up, call your representatives, and get some good munchies. Though not necessarily in that order. 

The post What’s the Deal With Legal Weed in NYC? appeared first on CitySignal.

However, despite the relatively high cost of owning property in New York, there are a few financial vehicles that are only available to New Yorkers. These financial tools, such as a CEMA loan, can help make it easier to gain control of your financial situation and minimize your ongoing expenses.

Of course, as is the case with any financial management tools, you’ll only want to apply for and utilize CEMA loans in certain situations. These loans, like any others, have both pros and cons associated with them. In this guide, we will take a close look at CEMA loans, discuss their merits and virtues, and help you determine if applying for a CEMA loan currently makes sense for you.

What is a CEMA Loan?

A “CEMA Loan” is a Consolidation, Extension, and Modification Agreement, also known as a “mortgage assignment.” Currently, this sort of loan is only available to property owners living in the State of New York and designed to help reduce tax obligations for anyone who is refinancing their mortgage.

In most cases, anyone who pays off an existing mortgage while also taking out another mortgage—which is, essentially, what people are usually doing when they choose to refinance a mortgage—will need to pay taxes for the face amount of both mortgages. However, by using a “CEMA loan”, you can effectively consolidate both mortgages into a single mortgage, which allows you to minimize the amount of taxes you’ll be expected to pay.

Through the use of a CEMA loan, New Yorkers can avoid the often expensive mortgage recording tax—tax obligations will only apply to your unpaid principal, which can potentially save people who are refinancing thousands of dollars.

Calculating CEMA Savings

Let’s take a closer look at how a CEMA loan can potentially help you save money. Suppose that the principal balance for your outstanding mortgage is currently $200,000. Then, suppose you refinance with a new mortgage lender and your outstanding mortgage balance then becomes $300,000. Ordinarily, you could be subject to a tax on the full $300,000 mortgage—however, by using a CEMA loan, you will only be taxed for the difference between the existing mortgage and the new one, which, in this case, amounts to $100,000.

Being able to effectively reduce the principal base upon which you will be taxed can help you save a considerable amount of money. And in New York City, the current mortgage recording tax rate is listed as 1.8 percent for all mortgages below $500,000 (for mortgages over $500,000, it’s 2.915 percent). In other words, for every $100,000 of value you can exempt from these taxes, you can save $1,800. In the example above, the property owner would only pay $1,800 instead of $5,400, a total savings of $3,600.

What are the Benefits of Getting a CEMA Loan in New York?

The most obvious reason you would want to use a CEMA loan is that, in doing so, you can reduce your tax obligations by thousands—or even tens of thousands—of dollars. This is why thousands of New Yorkers decide to take advantage of this unique loan opportunity every year.

By being able to reduce your tax obligations, you will directly decrease the cost of homeownership. In some cases, you can use your savings to pay down other home-related expenses, such as ongoing utility bills. In others, you might want to use these savings to pay down the principal on your mortgage, helping you end your mortgage payment sooner and potentially save thousands of dollars more.

What are the Drawbacks of Getting a CEMA Loan in New York?

Of course, while a CEMA loan will certainly make sense in many situations, these “loans” are not without their fair share of drawbacks. Obtaining a CEMA loan means you’ll need to first refinance your mortgage, a timely and occasionally expensive process, which not all homeowners will always want to do.

Typically, you can expect to pay $500 to $1,000 as a few for getting a CME loan. In some cases, particularly with more expensive properties, you might be asked to pay a specific percentage of the property’s value instead (which will typically end up costing you more). During your cost-benefit analysis, you will need to consider the possible tax savings in addition to the amount you’ll need to pay during the refinancing process—in some cases, it will make sense, in others, it simply won’t.

Other Things to Keep in Mind When Applying for a CEMA Loan

Another thing to keep in mind is that applying for a CEMA loan will usually take a decent amount of time. On the “faster” end, you can expect the entire process to take about six weeks, while on the slower end, the process may take as long as six months—there will be multiple parties involved in this process, which can frequently cause delays.

CEMA loans are just one of the many tools you’ll have to work with while you are in the process of refinancing your mortgage—however, these loans do not represent the only way to reduce future financial obligations. Restructuring your mortgage, applying for a better interest rate, and other changes can potentially help you save, as well.

The post What’s a CEMA Loan? Everything You Need to Know appeared first on CitySignal.