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b6c4a8f58adbc481c3457fdeeaed57ea
|
How to calculate S corporation distribution from past K-1s?
|
[
{
"docid": "02292628aef5bf27e8c5d0b8201e263a",
"text": "Phil's answer is correct. Just to add to his response: Distributions are not taxable events -- you already paid your taxes, so you can take out $50k or $52k and the IRS is not concerned. You can simply write yourself a check for any amount you choose! To answer your specific question: to match your K1 losses and profit exactly, you could take out $50k. But that might leave the business strapped for cash. One way to decide how much to take out is to use your balance sheet. Look at your retained earnings (or just look at the business bank account balance), subtract however much cash you think you need to keep on hand for operations, and write yourself a check for the rest.",
"title": ""
},
{
"docid": "69e8cf25bf58024f78f81217793e48ad",
"text": "\"Disclaimer: I'm not a tax professional, or an expert on S-Corps. However, I do have my own S-Corp, and my decision process for taking a distribution has nothing (directly) to do with K-1 past or present, or profit and loss. If I have \"\"extra\"\" cash in my S-Corp, I take a distribution. Assuming I do my taxes correctly, the money will be taxed whether I take a distribution or leave it in the business. So it really comes down to how much cash the business requires to continue operating and meeting its expenses.\"",
"title": ""
}
] |
[
{
"docid": "818e4c0014c78e9b1e1f2d31529ae8ab",
"text": "You simply add the dividend to the stock price when calculating its annual return. So for year one, instead of it would be",
"title": ""
},
{
"docid": "cbe2602216d25f7f2f97e3625c46ea0b",
"text": "\"(Value of shares+Dividends received)/(Initial investment) would be the typical formula though this is more of a percentage where 1 would indicate that you broke even, assuming no inflation to be factored. No, you don't have to estimate the share price based on revenues as I would question how well did anyone estimate what kind of revenues Facebook, Apple, or Google have had and will have. To estimate the value of shares, I'd likely consider what does my investment strategy use as metrics: Is it discounted cash flow, is it based on earnings, is it something else? There are many ways to determine what a stock \"\"should be worth\"\" that depending on what you want to believe there are more than a few ways one could go.\"",
"title": ""
},
{
"docid": "bbf48adc1557e2e46c2031c34e371115",
"text": "SXL is a Master Limited Partnership so all of the income is pass-through. Your equity purchase entitles you to a fraction of the 66% of the company that is not owned by Energy Transfer Partners. You should have been receiving the K-1s from SXL from the time that you bought the shares. Without knowing your specific situation, you will likely have to amend your returns for at most 6 years (if the omitted amount of gross income exceeds 25% of your gross income originally stated as littleadv has graciously pointed out in the comments) and include Schedule E to report the additional income (you'll also be able to deduct any depreciation, losses etc. that are passed through the entity on that form, so that will offset some of the gains). As littleadv has recommended, speak with a tax professional (CPA/EA or attorney) before you take any further steps, as everyone's situation is a bit different. This Forbes article has a nice overview of the MLP. There's a click-through to get to it, but it's not paywalled.",
"title": ""
},
{
"docid": "22d5ded6ae17a4337f390d60c2da294e",
"text": "\"Company Distribution is attempting to show a histogram of how many companies fall within a given range so you can visualize the number of companies that meet a certain parameter. For example if you move the \"\"Market Cap\"\" sliders so the minimum slider is just before the large rise in the distribution and move the maximum slider so it is just after the fall off in distribution, you can see that most companies have a market cap between ~5700 and ~141B.\"",
"title": ""
},
{
"docid": "fef760738b2b90f87c049bb8f0a1675f",
"text": "Consider the black-scholes-merton result. Notice that the expected value of the bond is its present value, discounted from the expiration date. The same is not applied to the price of the stock. The further in the future you go, the less value the bond carries because it's being discounted into oblivion. Now, looking at d1, as time tends towards infinity, so does d1. N(d1) is a probability. The higher d1, the higher the probability and vice versa, so as time increases, the probability for S trends to 100% while K is discounted away. Note that the math doesn't yet fully model reality, as extremely long dated options such as the European puts Buffett wrote were traded at ~1/2 the value the model said he should've. He still had to take a GAAP loss: http://www.berkshirehathaway.com/letters/2008ltr.pdf",
"title": ""
},
{
"docid": "e86ce0a96fa86c9a6148bec403e66783",
"text": "\"The $100,000 is taxed separately as \"\"ordinary income\"\". The $350,000 is taxed at long-term capital gains of 15%. Capital gains is not taxed at 20% until $415,050. Even though $100,000 + 350,000 = $450,000, only $350,000 can be taxed at capital gains. The total ordinary income tax burden will be $31,986 if single, in California. Caveat: By creating a holdings corporation (C-corp), you can section 351 that $100,000 into the C-corp for tax deferment, which won't be taxed until you take money from the corporation. Since you will hold 100% of the voting stock, all distributions will be considered pro rata. Additionally, you can issue yourself a dividend under the rules of 26 USC §§243-246 (a greather-than-80% shareholder who receives a dividend can write-off 100% of said dividend). As long as that dividend doesn't trigger §§1.243-246 of The Regulations by keeping the distribution just under 10% of E&P i.e. $10,000. Wages are deductible against basis so pay yourself $35,000 and keep $55,000 in the corporation and you can decrease the total liabilities down to $22,000 from $31,000, which includes the CA franchise tax. You don't have to pay yourself any money out a corporation to use the money.\"",
"title": ""
},
{
"docid": "839decb72a043b2574f664f4caef55df",
"text": "How is the business organized? If as a General Partnership or LLC that reports as a partnership, you will be getting distributed to you each year your % ownership of the earnings or loss. But note, this is a paperwork transfer on the form K-1, which must then carryover to your tax return, it does not require the transfer of cash to you. If organized as an S-Corp, you should be holding shares of the company that you may sell back to the S-Corp, generally as outlined in the original articles of incorporation. The annual 'dividend' (earnings remaining after all expenses are paid) should be distributed to you in proportion to the shares you hold. If a C-Corp and there is only one class of stock that you also hold a percentage of, the only 'profits' that must be distributed proportionally to you are declared dividends by the board of directors. Most family run business are loosely formed with not much attention paid to the details of partnership agreements or articles of incorporation, and so don't handle family ownership disputes very well. From my experience, trying to find an amicable settlement is the best...and least expensive....approach to separation from the business. But if this can't be done or there is a sizable value to the business, you may have to get your own legal counsel.",
"title": ""
},
{
"docid": "60e6bdbead28c05fcc3b0f90ae5bcc63",
"text": "Of course, this calculation does not take into consideration the fact that once the rights are issues, the price of the shares will drop. Usually this drop corresponds to the discount. Therefore, if a rights issue is done correctly share price before issuance-discount=share price after issuance. In this result, noone's wealth changes because shareholders can then sell their stock and get back anything they had to put in.",
"title": ""
},
{
"docid": "9764ba3afd9210806de741e49eaf845a",
"text": "\"Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period. Syntax: =GoogleFinance(\"\"symbol\"\", \"\"attribute\"\", \"\"start_date\"\", \"\"num_days|end_date\"\", \"\"interval\"\") where: This analysis won’t include dividends or distributions. Yahoo provides adjusted data, if you want to include that.\"",
"title": ""
},
{
"docid": "29aa93d3c3af81a6236d2e1905ada5a1",
"text": "This site has the best information I could find, other than a Bloomberg terminal: Quantumonline.com QUANTUMONLINE.COM SECURITY DESCRIPTION: SCANA Corp., 2009 Series A, 7.70% Enhanced Junior Subordinated Notes, issued in $25 denominations, redeemable at the issuer's option on or after 1/30/2015 at $25 per share plus accrued and unpaid interest, and maturing 1/30/2065 which may be extended to 1/30/2080. Interest distributions of 7.70% ($1.925) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the record date which is the business day prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank equally with all existing and future unsecured and subordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.",
"title": ""
},
{
"docid": "1236af8e4e462d79ee4767c881cb6c3e",
"text": "All shares of the same class are considered equal. Each class of shares may have a different preference in order of repayment. After all company liabilities have been paid off [including bank debt, wages owing, taxes outstanding, etc etc.], the remaining cash value in a company is distributed to the shareholders. In general, there are 2 types of shares: Preferred shares, and Common shares. Preferred shares generally have 3 characteristics: (1) they get a stated dividend rate every year, sometimes regardless of company performance; (2) they get paid out first on liquidation; and (3) they can only receive their stated value on liquidation - that is, $1M of preferred shares will be redeemed for at most $1M on liquidation, assuming the corporation has at least that much cash left. Common Shares generally have 4 characteristics: (1) their dividends are not guaranteed (or may be based on a calculation relative to company performance), (2) they can vote for members of the Board of Directors who ultimately hire the CEO and make similar high level business decisions; (3) they get paid last on liquidation; and (4) they get all value remaining in the company once everyone else has been paid. So it is not the order of share subscription that matters, it is the class. Once you know how much each class gets, based on the terms listed in that share subscription, you simply divide the total class payout by number of shares, and pay that much for each share a person holds. For companies organized other-than as corporations, ie: partnerships, the calculation of who-gets-what will be both simpler and more complex. Simpler in that, generally speaking, a partnership interest cannot be of a different 'class', like shares can, meaning all partners are equal relative to the size of their partnership interest. More complex in that, if the initiation of the company was done in an informal way, it could easily become a legal fight as to who contributed what to the company.",
"title": ""
},
{
"docid": "88ec8414da1e0a42a4da03f9edf304eb",
"text": "\"For MCD, the 47¢ is a regular dividend on preferred stock (see SEC filing here). Common stock holders are not eligible for this amount, so you need to exclude this amount. For KMB, there was a spin-off of Halyard Health. From their IR page on the spin-off: Kimberly-Clark will distribute one share of Halyard common stock for every eight shares of Kimberly-Clark common stock you own as of the close of business on the record date. The deal closed on 2014-11-03. At the time HYH was worth $37.97 per share, so with a 1:8 ratio this is worth about $4.75. Assuming you were able to sell your HYH shares at this price, the \"\"dividend\"\" in the data is something you want to keep. With all the different types of corporate actions, this data is extremely hard to keep clean. It looks like the Quandl source is lacking here, so you may need to consider looking at other vendors.\"",
"title": ""
},
{
"docid": "8b9c5329968c55b8c34d03c0ab97e541",
"text": "My question is, how income tax is calculated for partial redemption. Same as normal. The redemption should always be treated as FIFO. Say you are buying 10 units every month [I know the units maybe in fraction and price would be different every month and you are investing fixed amount]. After say 9 months you have 90 units. Now when you sell say 45 units, you are actually selling 10 units from first 4 months and 5 units from 5th month. So calculate the price at which you purchased these units. This becomes your cost. Now when you sell, you know the price. So subtract the sell price from cost price. This is your taxable income. Short term capital gains is taxed as per your tax bracket. So add this taxable income to your other income and calculate taxes accordingly. You have to pay tax in advance and not wait till year end. You can do this online as well.",
"title": ""
},
{
"docid": "15a1feb3fc0c0c041bde517e1f7565d0",
"text": "\"I dug up an old article on Motley Fool and one approach they mention is to get the stock certificates and then sell them to a friend: If the company was liquidated, you should receive a 1099-DIV form at year's end showing a liquidating distribution. Treat this as if you sold the stock for the amount of the distribution. The date of \"\"sale\"\" is the date that the distribution took place. Using your original cost basis in the shares, you can now compute your loss. If the company hasn't actually been liquidated, you'll need to make sure it's totally worthless before you claim a loss. If you have worthless stock that's not worth the hassle of selling through your broker, you can sell it to a friend (or cousin, aunt, or uncle) for pennies. (However, you can't sell the stock to a spouse, siblings, parents, grandparents, or lineal descendants.) Here's one way to do it: Send the certificate to your stock-transfer agent. Explain that the shares have been sold, and ask to cancel the old shares and issue a new certificate to the new owner. Some brokerages will offer you a quicker alternative, by buying all of your shares of the stock for a penny. They do it to help out their customers; in addition, over time, some of the shares may actually become worth more than the penny the brokers paid for them. By selling the shares, you have a closed transaction with the stock and can declare a tax loss. Meanwhile, your friend, relative, or broker, for a pittance, has just bought a placemat or birdcage liner.\"",
"title": ""
},
{
"docid": "f22a212586d8b23b70bd6ceb830ee793",
"text": "I'm not sure why you think that it matters that the distribution goes to an S-Corp vs an individual tax payer. You seem to think it has any relevance to your question, but it doesn't. It only confuses your readers. The situation is like this: LLC X is deriving income in State #2. It has two members (I and S) residents of State #1. Members I and S pay all their taxes to State #1, and don't pay taxes to State #2. State #2 audited member I and that member now needs to pay back taxes and penalties to State #2 on income derived from that State. Your question: Does that mean that member S should be worried, since that member was essentially doing the exact same thing as member I? My answer: Yes.",
"title": ""
}
] |
fiqa
|
8b9b32d7f2bea1cb1f07706e6ce25446
|
Pre-valuation of the company
|
[
{
"docid": "3045b540feb9f49fe398d1594def0733",
"text": "The value of the company is ill-defined until it actually has some assets and/or product. You give the investors whatever equity stakes you and they negotiate as appropriate for their investment based on how convinced they are by your plan and how badly you need their money.",
"title": ""
}
] |
[
{
"docid": "2b91ea9ba00641d019c71d2986da2f19",
"text": "the financial information is generally filed via SEDAR (Canada) or SEC (US) before the conference call with the investment community. This can take before either before the market opens or after the market closes. The information is generally distribute to the various newswire service and company website at the same time the filing is made with SEDAR/SEC.",
"title": ""
},
{
"docid": "227085867cf45b9715b131058918dc42",
"text": "Thank you very much for this thoughtful response. In my opinion the judges care more about the why behind your valuation rather than a how. Anyone can use a formula, but it takes so much more to understand why to use the formula. Personally, the 'why' is going to be the toughest part for me understand and wrap my head around. Once again thank you for the advice and the tip.",
"title": ""
},
{
"docid": "79c9faa04877ce178ce2d7046116d8ac",
"text": "Lets say the hurdle rate for this company is 10% and the current return on assets is 8%. A linear increase in revenue and earnings would actually destroy some value as projects that have a 9% return are accepted even though they destroy value for the shareholder. hope this helps!",
"title": ""
},
{
"docid": "81274911372a5638c5f3fdc2923a01e8",
"text": "Yes, an investment can be made in a company before IPO. The valuation process is similar as that done for arriving at IPO or for a normal listed company. The difference may be the premium perceived for the idea in question. This would differ from one investor to other. For example, whether Facebook will be able to grow at the rate and generate enough revenues and win against competition is all a mathematical model based on projections. There are quite a few times the projection would go wrong, and quite a few times it would go correct. An individual investor cannot generally borrow from banks to invest into a company (listed or otherwise) (or for any other purpose) if he does not have any collateral that can be kept as security by the bank. An individual can get a loan only if he has sufficient collateral. The exceptions being small personal loans depending on one's credit history. The Private Equity placement arm of banks or firms in the business of private equity invest in start-up and most of the time make an educated guess based on their experience. More than half of their investments into start-ups end up as wiped out. An occasional one or two companies are ones that they make a windfall gain on.",
"title": ""
},
{
"docid": "f0656add052a98a8db4a16389833068c",
"text": "Source, see if you have access to it Convertible notes are often used by angel investors who wish to fund businesses without establishing an explicit valuation of the company in which they are investing. When an investor purchases equity in a startup, the purchase price of the equity implies a company valuation. For example, if an investor purchases a 10 per cent ownership stake in a company, and pay $1m for that stake, this implies that the company is worth $10m. Some early stage investors may wish to avoid placing a value on the company in this way, because this in turn will affect the terms under which later-stage investors will invest in the company. Convertible notes are structured as loans at the time the investment is made. The outstanding balance of the loan is automatically converted to equity when a later equity investor appears, under terms that are governed by the terms set by the later-stage equity investor. An equity investor is someone who purchases equity in a company. Example:- Suppose an angel investor invests $100,000 using a convertible note. Later, an equity investor invests $1m and receives 10% of the company's shares. In the simplest possible case, the initial angel investor's convertible note would convert to 1/10th of the equity investor's claim. Depending on the exact structure of the convertible note, however, the angel investor may also receive extra shares to compensate them for the additional risk associated with being an earlier investor The worst-case scenario would be if the issuing company initially performed well, meaning that the debt would be converted into shares, and subsequently went bankrupt. The converted shares would become worthless, but the holder of the note would no longer have any recourse. Will twitter have to sell their offices and liquidate staff to close this debt? This depends on the seniority(priority) of the debt. Debt is serviced according to seniority. The higher seniority debts will be paid off first and then only the lower seniority debts be serviced. This will all be in the agreements when you enter into a transaction. When you say liquidate staff you mean sell off their assets and not sell their staff into slavery.",
"title": ""
},
{
"docid": "b648eff366f6e5637857115c7754cff1",
"text": "Other metrics like Price/Book Value or Price/Sales can be used to determine if a company has above average valuations and would be classified as growth or below average valuations and be classified as value. Fama and French's 3 Factor model would be one example that was studied a great deal using an inverse of Price/Book I believe.",
"title": ""
},
{
"docid": "0ada391b851e4f03449e58bdfff9259c",
"text": "\"Many thanks for thedetailed response, appreciate it. But I am still not clear on the distinction between a public company and the equity holders. Isn't a public company = shareholders + equity holders? Or do you mean \"\"company\"\" = shareholders+equity holders + debt holders?\"",
"title": ""
},
{
"docid": "e91d8c0dcb863fc4b14459f62a081534",
"text": "\"Complex matter that doesn't boil down to a formula. The quant aspect could be assessed by calculating WACCs under various funding scenarii and trying to minimize, but it is just one dimension of it. The quali aspects can vary widely depending on the company, ownership structure, tax environment and business needs and it really can't be covered even superficially in a reddit comment... Few examples from the top of my mind to give you a sense of it: - shareholders might be able to issue equity but want to avoid dilution, so debt is preferred in the end despite cost. Or convertible debt under the right scenario. - company has recurring funding needs and thinks that establishing a status on debt market is worth paying a premium to ensure they can \"\"tap\"\" it whenever hey need to. - adding debt is a way to leverage and enhance ROI/IRR for certain types of stakeholders (think LBOs) - etc etc etc Takes time and a lot of experience/work to be able to figure out what's best and there isn't always a clear answer. Source: pro buy side credit investor with experience and sizeable AuMs.\"",
"title": ""
},
{
"docid": "a1541a350f6310fe53e41eb6404a5a15",
"text": "Our company gives the best business valuation services. If you want to any business valuation service, then you can come to our company website. When it comes to obtaining a business valuation, business owners are faced with a myriad of choices of the business valuation services. Kirk Kleckner valuation businesses need understanding and analysis of a variety of complex factors including detailed technical knowledge of value drivers and in-depth industry knowledge.",
"title": ""
},
{
"docid": "7fb2ffdbc44f0f39716c4966623450b3",
"text": "\"First, you mentioned your brother-in-law has \"\"$100,000 in stock options (fully vested)\"\". Do you mean his exercise cost would be $100,000, i.e. what he'd need to pay to buy the shares? If so, then what might be the estimated value of the shares acquired? Options having vested doesn't necessarily mean they possess value, merely that they may be exercised. Or did you mean the estimated intrinsic value of those options (estimated value less exercise cost) is $100,000? Speaking from my own experience, I'd like to address just the first part of your question: Have you treated this as you would a serious investment in any other company? That is, have you or your brother-in-law reviewed the company's financial statements for the last few years? Other than hearing from people with a vested interest (quite literally!) to pump up the stock with talk around the office, how do you know the company is: BTW, as an option holder only, your brother-in-law's rights to financial information may be limited. Will the company share these details anyway? Or, if he exercised at least one option to become a bona-fide shareholder, I believe he'd have rights to request the financial statements – but company bylaws vary, and different jurisdictions say different things about what can be restricted. Beyond the financial statements, here are some more things to consider: The worst-case risk you'd need to accept is zero liquidity and complete loss: If there's no eventual buy-out or IPO, the shares may (effectively) be worthless. Even if there is a private market, willing buyers may quickly dry up if company fortunes decline. Contrast this to public stock markets, where there's usually an opportunity to witness deterioration, exit at a loss, and preserve some capital. Of course, with great risk may come great reward. Do your own due diligence and convince yourself through a rigorous analysis — not hopes & dreams — that the investment might be worth the risk.\"",
"title": ""
},
{
"docid": "ebb41def0224a718e83f9f53e5a8e812",
"text": "\"The textbook answer would be \"\"assets-liabilities+present discounted value of all future profit\"\". A&L is usually simple (if a company has an extra $1m in cash, it's worth $1m more; if it has an extra $1m in debt, it's worth $1m less). If a company with ~0 assets and $50k in profit has a $1m valuation, then that implies that whoever makes that valuation (wants to buy at that price) really believes one of two things - either the future profit will be significantly larger than $50k (say, it's rapidly growing); or the true worth of assets is much more - say, there's some IP/code/patents/people that have low book value but some other company would pay $1m just to get that. The point is that valuation is subjective since the key numbers in the calculations are not perfectly known by anyone who doesn't have a time machine, you can make estimates but the knowledge to make the estimates varies (some buyers/sellers have extra information), and they can be influenced by those buyers/sellers; e.g. for strategic acquisitions the value of company is significantly changed simply because someone claims they want to acquire it. And, $1m valuation for a company with $500m in profits isn't appropriate - it's appropriate only if the profits are expected to drop to zero within a couple years; a stagnant but stable company with $500m profits would be worth at least $5m and potentially much more.\"",
"title": ""
},
{
"docid": "cf235feacbb58cfe83d07179e16d57dc",
"text": "What this abbreviated balance sheet tells you is that this company has negative equity. The liabilities are greater than the value of the assets. The obvious problem for the company who wants to do business with you is that they are going to have a real hard time accessing credit to pay off any debts that they incur with doing business with you. In this case, the recommended course would be to ask them put cash up front instead of putting them on account. You don't really need to look at the income statement to see that they are currently underwater. If their income statement turns out to be splendid, then you can wait for them to get their liabilities under control before you set up an account for them.",
"title": ""
},
{
"docid": "13eebc93749f883f4ed2b7a6c5550e65",
"text": "If the cash flow information is complete, the valuation can be determined with relative accuracy and precision. Assuming the monthly rent is correct, the annual revenue is $1,600 per year, $250/mo * 12 months - $1,400/year in taxes. Real estate is best valued as a perpetuity where P is the price, i is the income, and r is the rate of interest. Theoreticians would suggest that the best available rate of interest would be the risk free rate, a 30 year Treasury rate ~3.5%, but the competition can't get these rates, so it is probably unrealistic. Anways, aassuming no expenses, the value of the property is $1,600 / 0.035 at most, $45,714.29. This is the general formula, and it should definitely be adjusted for expenses and a more realistic interest rate. Now, with a better understanding of interest rates and expenses, this will predict the most likely market value; however, it should be known that whatever interest rate is applied to the formula will be the most likely rate of return received from the investment. A Graham-Buffett value investor would suggest using a valuation no less than 15% since to a value investor, there's no point in bidding unless if the profits can be above average, ~7.5%. With a 15% interest rate and no expenses, $1,600 / .15, is $10,666.67. On average, it is unlikely that a bid this low will be successful; nevertheless, if multiple bids are placed using this similar methodology, by the law of small numbers, it is likely to hit the lottery on at most one bid.",
"title": ""
},
{
"docid": "34bbcb90aefee6b1b90f85ab10a1b6d5",
"text": "While there are many very good and detailed answers to this question, there is one key term from finance that none of them used and that is Net Present Value. While this is a term generally associate with debt and assets, it also can be applied to the valuation models of a company's share price. The price of the share of a stock in a company represents the Net Present Value of all future cash flows of that company divided by the total number of shares outstanding. This is also the reason behind why the payment of dividends will cause the share price valuation to be less than its valuation if the company did not pay a dividend. That/those future outflows are factored into the NPV calculation, actually performed or implied, and results in a current valuation that is less than it would have been had that capital been retained. Unlike with a fixed income security, or even a variable rate debenture, it is difficult to predict what the future cashflows of a company will be, and how investors chose to value things as intangible as brand recognition, market penetration, and executive competence are often far more subjective that using 10 year libor rates to plug into a present value calculation for a floating rate bond of similar tenor. Opinion enters into the calculus and this is why you end up having a greater degree of price variance than you see in the fixed income markets. You have had situations where companies such as Amazon.com, Google, and Facebook had highly valued shares before they they ever posted a profit. That is because the analysis of the value of their intellectual properties or business models would, overtime provide a future value that was equivalent to their stock price at that time.",
"title": ""
},
{
"docid": "bbd20f7c83f683c9d6750e463c9f06b3",
"text": "Aside of the other (mostly valid) answers, share price is the most common method of valuating the company. Here is a bogus example that will help you understand the general point: Now, suppose that Company A wants to borrow $20 Million from a bank... Not a chance. Company B? Not a problem. Same situation when trying to raise new funds for the market or when trying to sell the company or to acquire another",
"title": ""
}
] |
fiqa
|
f99f755bb030c8164c3d9c8a95912d34
|
Lump Sum Investing vs. Dollar Cost Averaging (as a Long Term Investor)
|
[
{
"docid": "876a9afbec24369bf05e5fbbf8a0ed8f",
"text": "I think you're not applying the right time scale here. ESPP (Employee Stock Purchase Plan) is usually vesting every 6 months. So every half a year you receive a chunk of stocks based on your salary deduction, with the 15% discount. Every half a year you have a chunk of money from the sale of these stocks that you're going to put into your long term investment portfolio. That is dollar cost averaging. You're investing periodically (every 6 months in this case), same (based on your salary deferral) amount of money, regardless of the stock market behavior. That is precisely what dollar cost averaging is.",
"title": ""
}
] |
[
{
"docid": "f4787628c60d6a60b91a5d4684dfa6b6",
"text": "What are the risks pertaining to timing on long term index investments? The risks are countless for any investment strategy. If you invest in US stocks, and prices revert to the long term cyclically adjusted average, you will lose a lot of money. If you invest in cash, inflation may outpace interest rates and you will lose money. If you invest in gold, the price might go down and you will lose money. It's best to study history and make a reasonable decision (i.e. invest in stocks). Here are long term returns by asset class, computed by Jeremy Siegel: $1 invested in equities in 1801 equals $15.22 today if was not invested and $8.8 million if it was invested in stocks. This is the 'magic of compound interest' and cash / bonds have not been nearly as magical as stocks historically. 2) How large are these risks? The following chart shows the largest drawdowns (decreases in the value of an asset) since 1970 (source): Asset prices decrease in value frequently. Financial assets are volatile, but historically, they have increased over time, enabling investors to earn compounded returns (exponential growth of money is how to get rich). I personally view drawdowns as an excellent time to buy - it's like going on a shopping spree when everything in the store is discounted. 3) In case I feel not prepared to take these risks, how can I avoid them? The optimal asset allocation depends on the ability to take risk and your tolerance for risk. You are young and have a long investment horizon, so if stocks go down, you will have plenty of time to wait for them to go back up (if you're smart, you'll buy more stocks when they go down because they're cheap), so your ability to bear risk is high. From your description, it seems like you have a low risk tolerance (despite a high ability to be exposed to risk). Here's the return of various asset classes and how the average investor has fared over the last 20 years (source): Get educated (read Common Sense on Mutual Funds, A Random Walk Down Wall Street, etc.) and don't be average! Closing words: Investing in a globally diversified portfolio with a dollar cost averaging strategy is the best strategy for most investors. For investors that are unable to stay rational when markets are volatile (i.e. the investor uncontrollably sells their stocks when stocks decrease 20%), a more conservative asset allocation is recommended. Due to the nature of compounded interest, a conservative portfolio is likely to have a much lower future value.",
"title": ""
},
{
"docid": "08d5925d71bac21221c3b6a39b518ede",
"text": "There is a difference between trading which is short term focussed and investing which is longterm focussed. On the long term what drives stock prices is still the overall economy and the performance of the underlying business aspects. I do not think that any trading algorithms will change this. These are more concerned with short term profits regardless of the underlying business economics. Therefore I think that longterm investing using index funds is still a viable strategy for most private investors.",
"title": ""
},
{
"docid": "6f544644f72576548c4c527e2a680e79",
"text": "Common financial advice is just that - it is common and general in nature and not specific for your financial needs, your goals and your risk tolerance. Regarding the possibility of a US market not going anywhere over a long period of time, well it is not a possibility, it has happened. See chart below: It took 13 years for the S&P 500 to break through 1550, a level first reached in March 2000, tested in October 2007 (just before the GFC) and finally broken through in March 2013. If you had bought in early 2000 you would still be behind when you take inflation into account. If you took the strategy of dollar cost averaging and bought the same dollar value (say $10,000) of the index every six months (beginning of each January and each July) starting from the start of 2000 and bought your last portion in January 2013, you would have a return of about 35% over 13.5 years (or an average of 2.6% per year). Now lets look at the same chart below, but this time add some trend lines. If we instead bought whenever the price crossed above the downtrend-line and sold whenever the price crossed below the uptrend-line (with the first purchase at the start of January 2000), we would have a return of 93% over the 13.5 years (or an average of 6.9% per year). Another more aggressive option (but manageable if you incorporate a risk management strategy) is to buy long when the price crosses the downtrend-line and sell your existing long position and sell short when the price drops below the uptrend-line. That is profiting both up-trending and down-trending markets. Again we start our buying at the start of January 2000. By shorting the index when the market is in a down-trend you could increase the above returns of 93% by another 54%, for a total return of 147% over 13.5 years (or an average of 10.9% per year). To conclude, using a simple long term strategy to time the markets may result in considerably higher returns than dollar cost averaging over the medium to long term, and I know which strategy would help me sleep better at night.",
"title": ""
},
{
"docid": "72cd18a6de1e80e2251a563f6319b2c6",
"text": "I believe that the Wikipedia article is attempting to draw a difference between dollar cost averaging as a result of investing when money becomes available (i.e. 401k contributions from your paycheck) and spreading out a lump sum investment. For the former you want to continuously invest as the money becomes available following your predetermined plan for allocation. For the later it may be reasonable to consider the market as you decide how and the timing for investing.",
"title": ""
},
{
"docid": "5d2b124795bc36a1421cb615e4b3ab19",
"text": "\"Can you easily stomach the risk of higher volatility that could come with smaller stocks? How certain are you that the funds wouldn't have any asset bloat that could cause them to become large-cap funds for holding to their winners? If having your 401(k) balance get chopped in half over a year doesn't give you any pause or hesitation, then you have greater risk tolerance than a lot of people but this is one of those things where living through it could be interesting. While I wouldn't be against the advice, I would consider caution on whether or not the next 40 years will be exactly like the averages of the past or not. In response to the comments: You didn't state the funds so I how I do know you meant index funds specifically? Look at \"\"Fidelity Low-Priced Stock\"\" for a fund that has bloated up in a sense. Could this happen with small-cap funds? Possibly but this is something to note. If you are just starting to invest now, it is easy to say, \"\"I'll stay the course,\"\" and then when things get choppy you may not be as strong as you thought. This is just a warning as I'm not sure you get my meaning here. Imagine that some women may think when having a child, \"\"I don't need any drugs,\"\" and then the pain comes and an epidural is demanded because of the different between the hypothetical and the real version. While you may think, \"\"I'll just turn the cheek if you punch me,\"\" if I actually just did it out of the blue, how sure are you of not swearing at me for doing it? Really stop and think about this for a moment rather than give an answer that may or may not what you'd really do when the fecal matter hits the oscillator. Couldn't you just look at what stocks did the best in the last 10 years and just buy those companies? Think carefully about what strategy are you using and why or else you could get tossed around as more than a few things were supposed to be the \"\"sure thing\"\" that turned out to be incorrect like the Dream Team of Long-term Capital Management, the banks that were too big to fail, the Japanese taking over in the late 1980s, etc. There are more than a few times where things started looking one way and ended up quite differently though I wonder if you are aware of this performance chasing that some will do.\"",
"title": ""
},
{
"docid": "7c1e38777f47d8af6a0319a751443f2a",
"text": "If you're worried about investing all at once, you can deploy your starting chunk of cash gradually by investing a bit of it each month, quarter, etc. (dollar-cost averaging). The financial merits and demerits of this have been debated, but it is unlikely to lose you a lot of money, and if it has the psychological benefit of inducing you to invest, it can be worth it even if it results in slightly less-than-optimal gains. More generally, you are right with what you say at the end of your question: in the long run, when you start won't matter, as long as you continue to invest regularly. The Boglehead-style index-fund-based theory is basically that, yes, you might save money by investing at certain times, but in practice it's almost impossible to know when those times are, so the better choice is to just keep investing no matter what. If you do this, you will eventually invest at high and low points, so the ups and downs will be moderated. Also, note that from this perspective, your example of investing in 2007 is incorrect. It's true that a person who put money in 2007, and then sat back and did nothing, would have barely broken even by now. But a person who started to invest in 2007, and continued to invest throughout the economic downturn, would in fact reap substantial rewards due to continued investing throughout the post-2007 lows. (Happily, I speak from experience on this point!)",
"title": ""
},
{
"docid": "2b3d7a7c4d8d36118d82262283492883",
"text": "\"Ah I got ya. I partially agree with you, but it's far more complex. I think that is simplifying the debate a bit too much. When people go \"\"passive\"\" you are making the assumption that they are able to stay fully invested the full time period (say 30-40 years until retirement when you might change the asset allocation). This is not a fair assumption because many studies on behavioral finance have shown that people (90% plus) are not able to sit tight through a full market cycle and often sell out during a bear market. I'm not debating you're point that passive often outperforms due to the fees (although there are many managers that do outperform), but the main issue with self-managing and passive investing is people usually make emotional decisions, which then hurts their long-term performance. This would be the reason to hire an adviser. Assuming that people are able to stay passive the entire time and not make a single \"\"active\"\" decision is a very unfair assumption. There was a good study on this referenced in Forbes article below: https://www.forbes.com/sites/advisor/2014/04/24/why-the-average-investors-investment-return-is-so-low/#5169be2b111a Another issue is that there are a lot \"\"active managers\"\" that really just replicate their benchmarks and don't actually actively manage. If you look at active managers who really do have huge under-weights and over-weights relative to their benchmarks they actually tend to outperform them (look at the study below by martin cremers, he's one of the most highly respected researchers when it comes to investment performance research and the active vs passive debate) http://www.cfapubs.org/doi/pdf/10.2469/faj.v73.n2.4 I guess what I'm trying to say is that for most people having an adviser (and paying them a 1% fee) is usually better than going it alone, where they are going to A. chase heat (I bet they always choose the hottest benchmark from the past few years) and B. make poor emotional decisions relating their finances.\"",
"title": ""
},
{
"docid": "08913e498cefe5b386b38e004e601db9",
"text": "Many would recommend lump sum investing because of the interest gains, and general upward historical trend of the market. After introducing DCA in A Random Walk Down Wall Street, Malkiel says the following: But remember, because there is a long-term uptrend in common-stock prices, this technique is not necessarily appropriate if you need to invest a lump sum such as a bequest. If possible, keep a small reserve (in a money fund) to take advantage of market declines and buy a few extra shares if the market is down sharply. I’m not suggesting for a minute that you try to forecast the market. However, it’s usually a good time to buy after the market has fallen out of bed. Just as hope and greed can sometimes feed on themselves to produce speculative bubbles, so do pessimism and despair react to produce market panics. - A Random Walk Down Wall Street, Burton G. Malkiel He goes on from there to recommend a rebalancing strategy.",
"title": ""
},
{
"docid": "cc39bdd8904f551c60cb40005c4475e7",
"text": "Dollar cost averaging is a method of regularly investing money as it is available. For example, $100 from each paycheck. It has been shown to bet better, on average, than collecting the money and investing it all at once. It is not intended to be used when you have the entire amount up front. See this link. Dollar cost averaging a lump sum would only be beneficial if the market was just as likely to go up as is to go down. Since, over time, the market (historically) has always gone up, your best bet is to invest all of your money right away. Anything else is just trying to time the market.",
"title": ""
},
{
"docid": "4cd26d742c20c768e4ca24448d556523",
"text": "If you are going to the frenzy of individual stock picking, like almost everyone initially, I suggest you to write your plan to paper. Like, I want an orthogonal set of assets and limit single investments to 10%. If with such limitations the percentage of brokerage fees rise to unbearable large, you should not invest that way in the first hand. You may find better to invest in already diversified fund, to skip stupid fees. There are screeners like in morningstar that allow you to see overlapping items in funds but in stocks it becomes trickier and much errorsome. I know you are going to the stock market frenzy, even if you are saying to want to be long-term or contrarian investor, most investors are convex, i.e. they follow their peers, despite it would better to be a concave investor (but as we know it can be hard). If the last part confused you, fire up a spreadsheet and do a balance. It is a very motivating activity, really. You will immediately notice things important to you, not just to providers such as morningstar, but alert it may take some time. And Bogleheads become to your rescue, ready spreadsheets here.",
"title": ""
},
{
"docid": "90a0d7e413f92d7ff344b6cf2db64f1f",
"text": "Dollar cost averaging is beneficial if you don't have the money to make large investments but are able to add to your holding over time. If you can buy the same monetary amount at regular intervals over time, your average cost per share will be lower than the stock's average value over that time. This won't necessarily get you the best price, but it will get you, on the whole, a good price and will enable you to increase your holdings over time. If you're doing frequent trading on a highly volatile stock, you don't want to use this method. A better strategy is to buy the dips: Know the range, and place limit orders toward the bottom of the range. Then place limit orders to sell toward the high end of the range. If you do it right, you might be able to build up enough money to buy and sell increasing numbers of shares over time. But like any frequent trader, you'll have to deal with transaction fees; you'll need to be sure the fees don't eat all your profit.",
"title": ""
},
{
"docid": "19b0e32b6f712ab5a1c24af0bef5c754",
"text": "Dollar cost averaging doesn't (or shouldn't) apply here. DCA is the natural way we invest in the market, buying in by a steady dollar amount each pay period, so over time we can buy more shares when the market is down, and fewer when it's higher. It's more psychological than financial. The fact is that given the market rises, on average, over time, if one has a lump sum to invest, it should be deployed based on other factors, not just DCA'd in. As I said, DCA is just how we all naturally invest from our income. The above has nothing to do with your situation. You are invested and wish to swap funds. If the funds are with the same broker, you should be able to execute this at the closing price. The sell and buy happen after hours and you wake up the next day with the newly invested portfolio. If funds are getting transferred from broker to broker, you do have a risk. The risk that they take time, say even 2 days when funds are not invested. A shame to lose a 2% market move as the cost of moving brokers. In this case, I'd do mine and my wife's at different times. To reduce that risk.",
"title": ""
},
{
"docid": "80ccc6f1c6b0f9d238426febd4303db4",
"text": "\"Generally investing in index-tracking funds in the long term poses relatively low risk (compared to \"\"short term investment\"\", aka speculation). No-one says differently. However, it is a higher risk than money-market/savings/bonds. The reason for that is that the return is not guaranteed and loss is not limited. Here volatility plays part, as well as general market conditions (although the volatility risk also affects bonds at some level as well). While long term trend may be upwards, short term trend may be significantly different. Take as an example year 2008 for S&P500. If, by any chance, you needed to liquidate your investment in November 2008 after investing in November 1998 - you might have ended up with 0 gain (or even loss). Had you waited just another year (or liquidated a year earlier) - the result would be significantly different. That's the volatility risk. You don't invest indefinitely, even when you invest long term. At some point you'll have to liquidate your investment. Higher volatility means that there's a higher chance of downward spike just at that point of time killing your gains, even if the general trend over the period around that point of time was upward (as it was for S&P500, for example, for the period 1998-2014, with the significant downward spikes in 2003 and 2008). If you invest in major indexes, these kinds of risks are hard to avoid (as they're all tied together). So you need to diversify between different kinds of investments (bonds vs stocks, as the books \"\"parrot\"\"), and/or different markets (not only US, but also foreign).\"",
"title": ""
},
{
"docid": "eef9aedb0ad4b895b7f771712e625179",
"text": "If you are making regular periodic investments (e.g. each pay period into a 401(k) plan) or via automatic investment scheme in a non-tax-deferred portfolio (e.g. every month, $200 goes automatically from your checking account to your broker or mutual fund house), then one way of rebalancing (over a period of time) is to direct your investment differently into the various accounts you have, with more going into the pile that needs bringing up, and less into the pile that is too high. That way, you can avoid capital gains or losses etc in doing the selling-off of assets. You do, of course, take longer to achieve the balance that you seek, but you do get some of the benefits of dollar-cost averaging.",
"title": ""
},
{
"docid": "551089afd5fcc946ab27a41a8ff485df",
"text": "You need an accountant and/or a lawyer who is familiar with the US tax code and the rules in South Korea (assuming from your tag). As the interest will be money generated in the US, you could be required to withhold some of the interest and remit it to the IRS (I believe 30% withholding rate). Since South Korea is a treaty country, your friend can complete and sign a form W8-BEN and give it to you, so you may withhold a lower amount. Your friend would need to file a return if too much was withheld. They may also get taxed in South Korea. There are probably rules in South Korea about minimum interest that must be charged, similar to Applicable Federal Rates for the US, so check with your accountant or lawyer for this. If you craft it correctly, you will be able to have a loan as a mortgage (with the house properly secured), which then would allow you to deduct mortgage interest rates from your return. As far as I am aware, there is no maximum amount for loans.",
"title": ""
}
] |
fiqa
|
314e52feda4307185bd480a2050370c8
|
How to save money for future expenses
|
[
{
"docid": "c2c08bc875b91c7ae9d48feef6e07b0e",
"text": "First, talk to your husband about this. You really need to persuade him that you need to be saving, and get him to agree on how and how much. Second, if you husband is not good at saving, work on getting something set aside automatically - ideally deducted from a paycheck or transferred to a savings account automatically. If he is the kind of person who might dip into that account, try to make it a place he can't withdraw from Third, get some advice, possibly training, on budgeting. Buy a book, take a video course: even start by watching some TV shows on getting out of debt.",
"title": ""
},
{
"docid": "cf01e253616ce320607d90114b8e5412",
"text": "how can I save money for the future The fact that you are worrying is good. This is the first step. Follow this up with a plan. One way is first get hold of your income [its fixed you know the salary]. Maintain expenses, then see which costs can be cut down. Create individual goals and start investing for these. The best way for first timer is to invest into a Recurring Deposits or SIP in mutual fund, i.e. kind of forced saving so that you don't spend what is available in bank Account.",
"title": ""
},
{
"docid": "755d904dc0e25dbe9535427109bf1407",
"text": "You can't force a horse to eat carrots. You have to make him hungry... It's good that you're ready to start saving. The hardest part about building wealth is that most people live in denial. They think a bigger hat is wealth. That said, you need to get your husband excited about the idea of saving. If you're capable of sparking a little passion in him for saving then you'll see your wealth grow almost over night. So, how do you make someone excited about something as boring as saving? Great question. If you find a way, write a book. Honestly, I think it's different for everyone. For me it was like someone turned on a light. I was blind but then I saw. If he is a reader then I would suggest the following books in this order. If he makes it through those and has any argument at all against saving then write a book about him haha. Now I want to be clear, the other two answers above mine were also spot on. If you can't get him passionate about it then you need to take the initiative and start doing it yourself. I can't stress enough though that you both need to be engaged in order to do it quickly and efficiently. Good luck!",
"title": ""
},
{
"docid": "42316c01d24d3b14292c14cd4bcae9c8",
"text": "\"My answer will suck but it comes from someone who has been married: You can't control another person or convince them to do something. What you can do is identify what they value and show how saving money increases their opportunities in what they value, but understand that the person could see what you're saying as invalid too. If you're single and reading this, this is why you verify that the person has similar values to you. Think of it like someone who wants good gas mileage: you show them a car that gets 60MPG, and immediately they say, \"\"Well, but that's not a cool car.\"\" So their value isn't the miles per gallon, and you may find the same is true with your spouse. India is paying more interest than the US and Europe in their savings accounts (I believe the benchmark interest rate is 7.5%), so - assuming your spouse values more money - showing him how to use money in savings to passively earn money might be a technique that works. But it may mean nothing to him because it's (1) not his actual value or (2) isn't enough to matter in his mind. In other words, this is all sales and whatever you do (and this is regardless of gender), don't manipulate, as in the long run that tends to build resentment. If there is a specific problem that you know he sees as a major issue and saving money can help, I'd recommend showing how savings would help with that problem. People generally like solutions to problems; just remember, what you think he sees as a problem may not be what he sees as a problem. This is why I chuckle when I see single people give married people advice; you can't just \"\"convince the person enough\"\" because you are not that person; we have to speak their language and we should be careful to avoid creating resentment. The part that sucks (or doesn't depending on who you ask) is that if we can't convince others to do it, we should do it ourselves. Either (1) earn money independently yourself when applicable (realizing that you are about to have a child and may be limited), or (2) save the money that you and your spouse have agreed that you're allotted, if this applies to your situation (a few spouses divide income even when one is an earner).\"",
"title": ""
}
] |
[
{
"docid": "94ea24f9daf0be1aa8cc556f394a7c9f",
"text": "\"Don't mind the percentages. They are highly misleading. First, \"\"saving\"\" is making available for future use. It might be \"\"hoarding\"\", \"\"investing\"\" or a combination thereof. It might be for a specific use (a car, a college education, retirement, etc.), or for a non-specific use (for an emergency, for when you decide to spend some of those savings, or just for lack of a compelling use as of the moment). In first case, whatever you save should be available by the date you intend to use it. In second case, it might be prudent to have savings (and investments, see below) of various liquidity (cash you have at hand, bank account you can draw next day, mutual fund account you can draw in a month, maybe something you can only cash in a year etc.). You will see that the actual percentages you \"\"save\"\" fluctuate enormously throughout your life, varying with the progress of your career, changes of marital status and family cmposition, etc., etc. What you should really do is to come up with a rough plan of how you expect, from right now and to the end of your life at whatever age, have enough money for whatever level of comfort you plan for each period of your life, allowing for some specified level of perturbations. Then you just execute that plan or change it as you go.\"",
"title": ""
},
{
"docid": "cd862e04a2e145e96152e31acf77ebaa",
"text": "\"First, you must prioritize what a \"\"need\"\" and what a \"\"want\"\" is. This is different for everyone but generally, I think most people will agree that impulse items are \"\"want\"\" items. Look at the item, hold it, put it back and wait 30 days. Put the money that the item costs $x into your savings account (transfer from checking, straight deposit, etc) Come back to the store and hold the item again and as \"\"did I miss the fact that I didnt get it 30 days ago?\"\". 95% of the time, the answer is no. You saved $x for 30-days, and received what is a tiny bit of interest for it. This is cause for celebration! If you repeat this for every item you THINK you \"\"need\"\" or \"\"want\"\" then you'll be amazed at what you saved. Dont waste this money on a vacation to the islands either! Keep saving. There will be plenty of rainy days when you'll have wanted to trade that island vacation (or the impulse items you bought that you used once or twice and are lost in your garage somewhere) to pay for some unexpected emergency. Trust me on this!\"",
"title": ""
},
{
"docid": "b17769ae176dec951f352f9edcad1a0c",
"text": "\"According to your numbers, you just stated that you spend approximately $1500 in discretionary expenditures per month, yet are unable to save. I fully realize that living in a big city is usually expensive, but on your (presumably after-tax) salary, I think you can easily save a substantial portion of your income. As others have already noted, enforcing saving of a significant portion of your discretionary income is the most obvious step. It's easy to say, but I suspect that if you are like most people who have difficulty saving, the psychological impact of quitting your previous spending habits \"\"cold turkey\"\" is likely to be very harsh, all the more so if you have an active social life. You may find yourself becoming depressed or resentful at \"\"having\"\" to save. You may lose motivation to work as hard because you might think that you're putting away all this money for the distant future, whereas you are young now and want to enjoy life while you can. It is in this context, then, that I looked at your other financial obligations. Paying $1300/month to your parents is a lot. It's over 20% of your after-tax salary. You do not specify the reasons for doing this other than a vague sense of familial duty, but my recommendation is to see if this could be reduced somewhat. If you can bring it down to $1000/month, that $300 would go into your savings, and you would psychologically feel a lot better about putting, say, $600 of your own discretionary income into savings as well. Now you have, all told, about $1000/month of savings without severely curtailing your extra expenditures. But I would start with that $1500/month of luxury spending first. And yes, you do need to view it as luxury spending. The proper frame of mind is to compare your financial situation to someone who is truly unable to save because their entire income is spent on actual necessities: food and shelter; their effective tax rate is 0% because they earn too little; and they usually find themselves in debt because they cannot make ends meet. Now look back at that $1500/month. Can you honestly say that you cannot afford to cut that spending?\"",
"title": ""
},
{
"docid": "f64638bc09f0ef72ed1083f5cd0918a8",
"text": "Talk freely about what you can now do because of saving. If you plan to retire sooner than most, or more comfortably than most, and can tie that to something you want them to do, show them that. If you buy a very nice car, or install a pool, and they wish they could afford that, tell them it took 5 or 10 or 20 years to save up for it, at x a week, and now you have it with no loan. Or be a cautionary tale: wish you had something, and regret not having saved for it. Young adults are generally well served by knowing more of parental finances than they did while they were dependents. Ask them if they will want or need to fund parental leaves, make a down payment for a house, own vacation property, put a child through post secondary education (share the cost of theirs including living expenses if you paid them), or go on amazing vacations fairly regularly. Tell them what those things cost in round figures. Explain how such a huge sum of money can accumulate over 2, 5, 10 years of saving X a month. for example $10 a week is $500 a year and so on. While they may not want to save 20 years for their downpayment, doing this simple math should let them map their savings amounts to concrete wishes and timeframes. Finally, if this is your own child and they live with you, charge them rent. This will save them from developing the habit of spending everything they earn, along with the expensive tastes and selfish speaking habits that come with it. Some parents set the rent aside and give it back as a wedding or graduation present, or to help with a downpayment later, but even if you don't, making them live within their true means, not the inflated means you have when you're living rent-free, is truly a gift.",
"title": ""
},
{
"docid": "dd0dd85bad94d6fbb950e2764c032786",
"text": "\"I posted a comment in another answer and it seems to be approved by others, so I have converted this into an answer. If you're talking about young adults who just graduated college and worked through it. I would recommend you tell them to keep the same budget as what they were living on before they got a full-time job. This way, as far as their spending habits go, nothing changes since they only have a $500 budget (random figure) and everything else goes into savings and investments. If as a student you made $500/month and you suddenly get $2000/month, that's a lot of money you get to blow on drinks. Now, if you put $500 in savings (until 6-12 month of living expenses), $500 in investments for the long run and $500 in vacation funds or \"\"big expenses\"\" funds (Ideally with a cap and dump the extra in investments). That's $18,000/yr you are saving. At this stage in your life, you have not gotten used to spending that extra $18,000/yr. Don't touch the side money except for the vacation fund when you want to treat yourself. Your friends will call you cheap, but that's not your problem. Take that head start and build that down payment on your dream house. The way I set it up, is (in this case) I have automatics every day after my paychecks come in for the set amounts. I never see it, but I need to make sure I have the money in there. Note: Numbers are there for the sake of simplicity. Adjust accordingly. PS: This is anecdotal evidence that has worked for me. Parents taught me this philosophy and it has worked wonders for me. This is the extent of my financial wisdom.\"",
"title": ""
},
{
"docid": "4992b5f2a877c27f50d8e5551f1fb18d",
"text": "Firstly assumption is that Now if expense is from your savings",
"title": ""
},
{
"docid": "57bb8b6769fa2a80637f073875142798",
"text": "You need to know loans are not free; and they are not a way to solve budget issues. If you are having problems with making your income last over your expenses, you do not need to add another expense (in the form of a loan) What you really need to do is create a budget, track and understand your expenses, and then decide if you should focus on raising your net income level or cutting down expenses. Keep up with your budget. You can reduce the frequency, but you need to track your spending really for the rest of you life. It is just a good habit, like personal hygiene. Once you understand your money (via your budget), you can start to save money into an emergency fund that will cover you during the times of zig zags. I say it very plainly as if it is super easy; but it requires will power and the foresight to understand that if you don't manage your money, nobody else will. Being sane with your money is one of the most important things you can do now to improve your future. IMPROVEMENT NathanL has an excellent first step with budgeting: Allocate money to be spent for the next month from money made during the previous month. This will build a cushion into your budget and alleviate the fear that the OP mentioned",
"title": ""
},
{
"docid": "bbe2c6e26e76716c03bd47bd0569e344",
"text": "\"Some things are nearly universal, and have been mentioned already. My \"\"favorite\"\" forseeable expenses in this category are: However, I also advocate saving for expenses that are specific to you. Look back on your expenses for the last 12 months, minimum (18 or 24 may be better). Ask yourself these questions: I ask about large expenditures because you may make enough that you can \"\"eat\"\" these lapses in budgeting, as I did for many years. It is not an emergency now, but it turned into an emergency down the road as my spending went out of control. Look at all expenditures over a certain level, say $100 or $200. Some personal examples of expenses that aren't quite so universal, but turned into small emergencies: This last one was rather unexpected. It is the reason why I ask the question \"\"why didn't I budget for it?\"\" These fees and dues are for my professional-level certifications. In my industry, they are \"\"always\"\" paid for by the company. A year ago, they weren't paid by my former employer because they planned to lay me off. This year, they weren't paid by my present employer because I am technically a temporary worker (4 years is temporary?). So, from now on, I plan to save for this expense. If my employer pays my dues, then I stop saving for the expense, but keep the money I've saved.\"",
"title": ""
},
{
"docid": "fc56353f6036f61ed99a145d1a6acdec",
"text": "\"The principle to follow is called \"\"pay yourself first\"\". Have your savings deducted from your paycheck before it hits your checking account. You spending will change to accommodate the reduction. If you have a 401(k) available from your employer, start saving some money via that. If not, figure out a way to have something moved out of your checking account to a separate savings account when your paycheck hits. Then as you get raises, up the amount of automatic savings by half of the raise. You will find this hurts less than you think and it will let you build an emergency fund, which is the first thing you need. When the emergency fund is 6 months of normal spending, then you can start to invest.\"",
"title": ""
},
{
"docid": "2aee2f45e6e92de4cf4cfe1c7c1d28f3",
"text": "\"There are many tactics you can use. If your biggest problem is regretting your larger purchases, I'd suggest giving yourself rules before making any purchases over a certain minimum dollar amount that you set for yourself. For example, if that amount is $50 for an item, then any item starting at an average price of $51 would be subject to these rules. One of your long-term goals ought to be to become the kind of person who finds joy in saving money rather than spending it. Make friends with frugal people - look for those who prefer games nights and potlucks to nights out at the club buying expensive drinks and dinners at the newest steak joint in town. Learn the thrill of a deal, but even more learn the thrill of your savings growing. You don't want to enjoy money in the bank for the purposes of becoming a miser. Instead you want to realize that money in the bank helps you achieve your goals — buying the house you want, donating a significant amount of money to a cause you ardently support, allowing you to take a dream vacation, letting you buy with cash the car you always wanted, the possibilities are endless. As Dave Ramsey says, \"\"Live like no one else, so you can live like no one else.\"\"\"",
"title": ""
},
{
"docid": "5e7c5f632da708af4b9140aa819ccbf3",
"text": "What you put that money into is quite relevant. It depends on how soon you will need some, or all, of that money. It has been very useful to me to divide my savings into three areas... 1) very short term 'oops' funds. This is for when you forget to put something in your budget or when a monthly bill is very high this month. Put this money into passbook savings. 2) Emergency funds that are needed quite infrequently. Used for such things as when you go to the hospital or an appliance breaks down. Put this money in higher yeald savings, but where it can be accessed. 3) Retirement savings. Put this money into a 401-K. Never draw on it till you retire. Make no loans against it. When you change jobs roll over into a self-directed IRA and invest in an ETF that pays dividends. Reinvest the dividend each month. So, like I said, where you put that money depends on how soon you will need it.",
"title": ""
},
{
"docid": "ef082fd9f0274dc21b86a1c9cf21dd9b",
"text": "I think you might benefit from adopting a zero-sum budget, in which you plan where each dollar will be spent ahead of time, rather than simply track spending or worry about the next expense. Here's a pretty good article on the subject: How and Why to Use a Zero-Sum Budget. This is the philosophy behind a popular budgeting tool You Need a Budget, I am not advocating the tool, but I am a fan of the idea that a budget is less about tracking spending and more about planning spending. That said, to answer your specific question, one method for tracking your min-needed for upcoming expenses would be to record the date, expense, amount due, and amount paid as shown here: Then the formula to calculate the min-needed (entered in E1 and copied down) would be: As you populate amounts paid, the MinNeeded is adjusted for all subsequent rows. You could get fancier and only populate the MinNeeded field on dates where an expense is due using IF().",
"title": ""
},
{
"docid": "e754092dce0e9259fb1f7f794e7fea88",
"text": "\"Another way to look at budgeting: give yourself an explicit \"\"allowance\"\" -- possibly in a separate account -- and if something isn't a clear necessity it must be paid for out of your allowance, saving up first if necessary. You can get those concert tickets, but only if you cut down on expensive meals and toys and other entertainment for a while. You can have anything you want, but not everything and not immediately unless you learn to maintain an adequate balance in this account.\"",
"title": ""
},
{
"docid": "b9d7a0be34f0bd2647e9851eab9b0752",
"text": "someone is paid a certain sum each month, and wants to spend only a certain amount each month, can he spend more and then take it out of next month's payment? Using the example 100 month 1, 60 first month. Save 40 Second Month, 100 salary, spend 70. Save 30. Overall Savings 70 Third month, 100 salary, spend 50. Save 50. Overall Savings 120 So in short term or once a while doing this is fine. However if [and this depends on individuals] it goes beyond control, i.e. you keep spending say 90 every month, you would have to save for quite a few months to get back to normal. A better way would be to reverse this. Using the example 100 month 1, 60 first month. Save 40 Second Month, 100 salary, spend 50. Save 50. Overall Savings 90 Third month, 100 salary, spend 70. Save 30. Overall Savings 120 i.e. save more first and then spend, rather than spending now and saying you will save in future. Generally this is the trap quite a few fall into specially when saving for retirement, they keep putting it to future and very soon realize that they can't get back to the goal.",
"title": ""
},
{
"docid": "18ead45b814ad3a32cd4d35a50601349",
"text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-07-08/yellen-bet-on-pulling-workers-back-to-labor-force-is-paying-off) reduced by 88%. (I'm a bot) ***** > Even as U.S. unemployment crept lower in recent years, Federal Reserve Chair Janet Yellen stuck with a glacial pace of policy tightening that she justified with a powerful message: there were still millions of potential workers to pull in from the labor market's sidelines. > If workers hadn't come back, the strategy could have spurred an overly-tight labor market that sent wages and inflation up too quickly. > The surge of job holders coming from outside the labor force "Speaks to the reduction in slack in the labor force," said Tom Simons, a senior economist at Jefferies LLC in New York. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6m5f49/yellen_bet_on_pulling_workers_back_to_labor_force/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~162709 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **labor**^#1 **works**^#2 **rate**^#3 **market**^#4 **force**^#5\"",
"title": ""
}
] |
fiqa
|
62e61f803608ec3f7a48f1556ebfbe77
|
SEP-IRA doing 1099 work on the side of a W2 employee job
|
[
{
"docid": "88007f153863a929907440c785d151b1",
"text": "\"The limit on SEP IRA is 25%, not 20%. If you're self-employed (filing on Schedule C), then it's taken on net earning, which in your example would be 25% of $90,000. (https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people) JoeTaxpayer is correct as regards the 401(k) limits. The elective deferrals are per person - That's a cap in sum across multiple plans and across both traditional and Roth if you have those. In general, it's actually across other retirement plan types too - See below. If you're self-employed and set-up a 401(k) for your own business, the elective deferral is still aggregated with any other 401(k) plans in which you participate that year, but you can still make the employer contribution on your own plan. This IRS page is current a pretty good one on this topic: https://www.irs.gov/retirement-plans/one-participant-401k-plans Key quotes that are relevant: The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: •Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: ◦$18,000 in 2015 and 2016, or $24,000 in 2015 and 2016 if age 50 or over; plus •Employer nonelective contributions up to: ◦25% of compensation as defined by the plan, or ◦for self-employed individuals, see discussion below It continues with this example: The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $18,000 in 2015 and 2016. Although a plan's terms may place lower limits on contributions, the total amount allowed under the tax law doesn’t depend on how many plans you belong to or who sponsors those plans. EXAMPLE Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2015. He deferred $18,000 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2015 were $36,500. This is the maximum that can be contributed to the plan for Ben for 2015. A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year. Notice in the example that Ben contributed more that than his elective limit in total (his was $24,000 in the example because he was old enough for the $6,000 catch-up in addition to the $18,000 that applies to everyone else). He did this by declaring an employer contribution of $12,500, which was limited by his compensation but not by any of his elective contributions. Beyond the 401(k), keep in mind that elective contributions are capped across different types of retirement plans as well, so if you have a SEP IRA and a solo 401(k), your total contributions across those plans are also capped. That's also mentioned in the example. Now to the extent that you're considering different types of plans, that's a whole question in itself - One that might be worth consulting a dedicated tax advisor. A few things to consider (not extensive list): As for payroll / self-employment tax: Looks like you will end up paying Medicare, including the new \"\"Additional Medicare\"\" tax that came with the ACA, but not SS: If you have wages, as well as self-employment earnings, the tax on your wages is paid first. But this rule only applies if your total earnings are more than $118,500. For example, if you will have $30,000 in wages and $40,000 in selfemployment income in 2016, you will pay the appropriate Social Security taxes on both your wages and business earnings. In 2016, however, if your wages are $78,000, and you have $40,700 in net earnings from a business, you don’t pay dual Social Security taxes on earnings more than $118,500. Your employer will withhold 7.65 percent in Social Security and Medicare taxes on your $78,000 in earnings. You must pay 15.3 percent in Social Security and Medicare taxes on your first $40,500 in self-employment earnings and 2.9 percent in Medicare tax on the remaining $200 in net earnings. https://www.ssa.gov/pubs/EN-05-10022.pdf Other good IRS resources:\"",
"title": ""
}
] |
[
{
"docid": "a659618cb61c821026993c65d99c5da1",
"text": "Maryland treats income from pensions and annuities in the same manner that the federal government treats such income. Consequently, pensions and annuities can be subject to Maryland's income tax. The resident booklet for Maryland income tax filers states on page 4: Line 1d. Enter on line 1d the total amount of pension, IRA, and annuities reported as income on lines 15b and 16b of your federal Form 1040, or lines 11b and 12b of your federal Form 1040A. Line 1 of Maryland's tax return represents total taxable income, before deductions, exemptions, and adjustments. Line 16b of federal Form 1040 represents the taxable portion of your FERS annuity. Consequently, the federally taxable portion of your FERS annuity is also subject to Maryland's state income tax. The taxable portion of FERS annuities should be recorded on the 1099-R you receive. If it's not, IRS pub 721 records how to calculate the taxable portion of FERS annuities. Maryland does, however, allow filers to exclude up to $29,200 of the taxable portion of their pension income in 2015 from taxable income if: a. You were 65 or over or totally disabled, or your spouse was totally disabled, on the last day of the tax year, AND b. You included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system” qualified under Sections 401(a), 403 or 457(b) of the Internal Revenue Code. [A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh plan, an ineligible deferred compensation plan or foreign retirement income does not qualify.] You mention receiving SS disability, so you may be eligible for that exclusion. Regarding what kinds of disabilities qualifies for those exclusions, Maryland states that: To be considered totally disabled, you must have a mental or physical impairment which prevents you from engaging in substantial gainful activity. You must expect the impairment to be of long, continued or indefinite duration or to result in your death. You must attach to your return a certification from a qualified physician stating the nature of your impairment and that you are totally disabled. If you have previously submitted a physician’s certification, attach your own statement that you are still totally disabled and that a physician’s certification was submitted before. If you feel you would qualify for that exclusion (and have the required supporting evidence), fill out the relevant table and include the result on line 10 of your Maryland tax return. In the future, to avoid a large state tax bill due to inadequate withholding on pension funds, OPM provides a web service which allows you to specify state tax withholding amounts on pension distributions.",
"title": ""
},
{
"docid": "ae5066c9a5bc07ef196332219cdba89b",
"text": "\"I'm no lawyer and no expert, so take my remarks as entertainment only. Also see this question. If you have a U.S. SSN which is eligible for work, they may be able to pay you on 1099 basis with your SSN as a sole proprietor, unless they have some personal reason for avoiding that. So perhaps try asking about that specifically. HR policies can be weird and tricky, maybe a nudge in the right direction will help. Not What You Asked: regardless, I might recommend you register as an LLC and get an EIN (sort of SSN for companies) for a variety of reasons. It's called a \"\"limited liability\"\" company for a reason. You may also have an easier time reaping various business-related rewards, like writing off expenses. If you do so, consider a state with no income tax like Wyoming. (Or, for convenience sake, WA if you live in BC, or maybe NH if you live in Ontario.. etc.)\"",
"title": ""
},
{
"docid": "2d90d3a6220469d058a65d7a8d588c1a",
"text": "Does the 457(b) plan allow for the rollover of other retirement funds into it? And do you have very specific reasons for wanting to roll over your SEP-IRA into the 457(b) plan instead of into some other IRA plan with a different custodian? For example, if you already have a Traditional IRA, is there any reason why your SEP-IRA should not be rolled over into the Traditional IRA? With regard to the question about separate accounts, once upon a time, rolling over money from an employment retirement plan (e.g. 401k) into a Traditional IRA required establishing a separate account called a Rollover Traditional IRA so that the rolled-over money (and the earnings thereon) were not commingled with standard traditional IRA money resulting from personal contributions). This was so that the account owner had the option of rolling over the separately kept money into a new employer's retirement plan (if such a rollover was permitted by the new 401k plan). If one did not want to ever roll over money into a new employer plan, one had to write a letter to the custodian telling them that commingling was OK; you never wanted to put that money into another 401k plan. The law changed some time later and the concept of Rollover IRAs holding non-commingled funds has disappeared. With that as prologue, my answer to your question is that perhaps the law did not change with respect to 457(b) plans, and so the money that you want to rollover into the 457(b) plan needs to be kept separate and not commingled with your contributions via payroll deduction to the 457(b) plan (in case you want to ever roll over the SEP-IRA money into another SEP-IRA). Hence, separate accounts are needed: one to hold your SEP-IRA money and one to hold your contributions via payroll deductions.",
"title": ""
},
{
"docid": "1406ad7d12bc3a17399d0be238045b5b",
"text": "I am surprised no one has mentioned the two biggest things (in my opinion). Or I should say, the two biggest things to me. First, 1099 have to file quarterly self employment taxes. I do not know for certain but I have heard that often times you will end up paying more this way then even a W-2 employees. Second, an LLC allows you to deduct business expenses off the top prior to determining what you pay in taxes as pass-through income. With 1099 you pay the same taxes regardless of your business expenses unless they are specifically allowed as a 1099 contractor (which most are not I believe). So what you should really do is figure out the expense you incur as a result of doing your business and check with an accountant to see if those expenses would be deductible in an LLC and if it offsets a decent amount of your income to see if it would be worth it. But I have read a lot of books and listened to a lot of interviews about wealthy people and most deal in companies not contracts. Most would open a new business and add clients rather than dealing in 1099 contracts. Just my two cents... Good luck and much prosperity.",
"title": ""
},
{
"docid": "b3f0ca1c55796d246ab3a301c04a4176",
"text": "More than likely you have signed an NDA with your employer with a non-compete clause within it. From what I have seen this clause would be in place for two years following the date you left your firm. So, leaving your firm and consulting as a 1099 for your current client is more than likely a violation of your NDA for 2 years or some period of time. With that being said, there is nothing keeping you from going off on your own as an independent and finding work, so long as that work isn't from one of the current clients of your firm. I am not a lawyer and everything above is what I have seen in my personal experience.",
"title": ""
},
{
"docid": "97cbde3c965690a53a5b344eaf7ebe19",
"text": "Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case.",
"title": ""
},
{
"docid": "878a472b03f4ef818d9be6494476f2dc",
"text": "Yes. Look at form 1040 AGI is line 37, and it comes well after you report your schedule D cap gains. I read this question as meaning you wish to contribute to a traditional IRA pretax. There is no income limit to contribute to an IRA and not take the deduction.",
"title": ""
},
{
"docid": "8c44c3df83ffe71f83ceaba813b6c91a",
"text": "\"Form W-9 (officially, the \"\"Request for Taxpayer Identification Number and Certification\"\") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). A W-9 is typically required when an individual is doing work, as a contractor or as an employee, for a company and will be paid more than $600 in a tax-year. The company is required to file a W-2 or a 1099 and so requests a W-9 to get the information necessary for those forms. I cannot say if it is incompetence on the part of the accounting department or a deliberate ploy to make the refund process more onerous, but do not comply. Politely nsist on a refund without any further information. If the company refuses, request a charge-back from the credit-card company, file a complaint with the consumer-protection department of the state where the company is located, and write a bad review on Yelp or wherever else seems appropriate.\"",
"title": ""
},
{
"docid": "f7dda4d298962e5676469e1351ccb15d",
"text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"",
"title": ""
},
{
"docid": "3c240eb80447171c476c7943200e8042",
"text": "One possibility that I use: I set up an LLC and get paid through that entity. Then I set up a payroll service through Bank of America and set up direct deposit so that it is free. I pay myself at 70% of my hourly rate based on the number of hours I work, and the payroll service does all the calculations for me and sets up the payments to the IRS. Typically money is left over in my business account. When tax time rolls around, I have a W2 from my LLC and a 1099 from the company I work for. I put the W2 into my personal income, and for the business I enter the revenue on the 1099 and the payroll expenses from paying myself; the left over in the business account is taxed as ordinary income. Maybe it's overkill, but setting up the LLC makes it possible to (a) set up a solo 401(k) and put up to $51k away tax-free, and (b) I can write off business expenses more easily.",
"title": ""
},
{
"docid": "d6456689474126d52bc57b6a42210921",
"text": "Please note that if you are self employed, then the profit sharing limit for both the SEP and Solo 401(k) is 20% of compensation, not 25%. There is no need for a SEP-IRA in this case. In addition to the 401(k) at work, you have a solo-401(k) for your consulting business. You can contribute $18,000 on the employee side across the two 401(k) plans however you wish. You can also contribute profit sharing up to 20% of compensation in your solo 401(k) plan. However, the profit sharing limit aggregates across all plans for your consulting business. If you max that out in your solo 401(k), then you cannot contribute to the SEP IRA. In other words, the solo 401(k) dominates the SEP IRA in terms of contributions and shares a limit on the profit-sharing contribution. If you have a solo 401(k), there is never a reason to have a SEP for the same company. Example reference: Can I Contribute to a solo 401(k) and SEP for the same company?",
"title": ""
},
{
"docid": "f61047fb54b551445d857275dd22d5d3",
"text": "\"These kinds of questions can be rather tricky. I've struggled with this sort of thing in the past when I had income from a hobby, and I wanted to ensure that it was indeed \"\"hobby income\"\" and I didn't need to call it \"\"self-employment\"\". Here are a few resources from the IRS: There's a lot of overlap among these resources, of course. Here's the relevant portion of Publication 535, which I think is reasonable guidance on how the IRS looks at things: In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether: Most of the guidance looks to be centered around what one would need to do to convince the IRS that an activity actually is a business, because then one can deduct the \"\"business expenses\"\", even if that brings the total \"\"business income\"\" negative (and I'm guessing that's a fraud problem the IRS needs to deal with more often). There's not nearly as much about how to convince the IRS that an activity isn't a business and thus can be thrown into \"\"Other Income\"\" instead of needing to pay self-employment tax. Presumably the same principles should apply going either way, though. If after reading through the information they provide, you decide in good faith that your activity is really just \"\"Other income\"\" and not \"\"a business you're in on the side\"\", I would find it likely that the IRS would agree with you if they ever questioned you on it and you provided your reasoning, assuming your reasoning is reasonable. (Though it's always possible that reasonable people could end up disagreeing on some things even given the same set of facts.) Just keep good records about what you did and why, and don't get too panicked about it once you've done your due diligence. Just file based on all the information you know.\"",
"title": ""
},
{
"docid": "d4e6fe0aa15ee2e3158e55925b69ad93",
"text": "No, do not file a Form 1099. You should not issue a form to yourself and you have no separate entity to issue one. The reporting obligation is Form 1040, plus Schedule C. You may have followed a wrong turn somewhere in the TurboTax questionnaire or it may not have picked up the subtleties of your situation. The business income is already yours. Some writers use vehicles to hold their royalties and pay themselves. The questionnaire may have been trying to get at this issue or may have wrongly assumed it. There are special rules around such entities, so getting an adviser is a good idea. For now, just file Schedule C, remember to deduct your costs (e.g. cost to print the books), and pay your self-employment tax.",
"title": ""
},
{
"docid": "9230b874441939256ea7912de4cf896b",
"text": "\"No, you cannot. ISO are given to you in your capacity as an employee (that's why it is \"\"qualified\"\"), while your IRA is not an employee. You cannot transfer property to the IRA, so you cannot transfer them to the IRA once you paid for them as well. This is different from non-qualified stock options (discussed in this question), which I believe technically can be granted to IRA. But as Joe suggests in his answer there - there may be self-dealing issues and you better talk to a licensed tax adviser (EA/CPA licensed in your State) if this is something you're considering to do.\"",
"title": ""
},
{
"docid": "d04d1455d5b8090206ebb4e035f20e7e",
"text": "\"Short answer, yes. But this is not done through the deductions on Schedule A. This can happen if the employer creates a Flexible Spending Account (FSA) for its employees. This can be created for certain approved uses like medical and transportation expenses (a separate account for each category). You can contribute amounts within certain limits to these accounts (e.g. $255 a month for transportation), with pre-tax income, deduct the contributions, and then withdraw these funds to cover your transportation or medical expenses. They work like a (deductible) IRA, except that these are \"\"spending\"\" and not \"\"retirement\"\" accounts. Basically, the employer fulfills the role of \"\"IRA\"\" (FSA, actually) trustee, and does the supporting paperwork.\"",
"title": ""
}
] |
fiqa
|
4ffa5ab7a898ab7e5fdbf786f6da9a64
|
What's the appropriate way to signify an S-Corp?
|
[
{
"docid": "789c6ee5519a98310ca80232d15d7573",
"text": "\"S-Corp is a corporation. I.e.: you add a \"\"Inc.\"\" or \"\"Corp.\"\" to the name or something of that kind. \"\"S\"\" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn't refer to a legal status.\"",
"title": ""
},
{
"docid": "f515ab4e63b3d4bf3815179d89b29356",
"text": "\"Subchapter S Corporations are a special type of corporation; the difference is how they are taxed, not how they relate to their vendors or customers. As a result, they are named the same way as any other corporation. The rules on names of corporations vary by state. \"\"Corporation\"\" and \"\"Incorporated\"\" (and their abbreviations) are allowed by every state, but some states allow other names as well. The Wikipedia article \"\"Types of business entity\"\" lists an overview of corporation naming rules for each state. The S-Corp that I work for has \"\"Inc.\"\" at the end of its name.\"",
"title": ""
}
] |
[
{
"docid": "686ecacb36c2729a0beeb11c5f64af68",
"text": "\"I really wish they'd change the title to \"\"corporations\"\". Companies aren't the only thing that can be corporations and avoid jail. Other organizations that operate as partnerships or sole proprietors in effect operate as people that can be arrested and put in jail and can't hide the owners and can't contribute unlimited amounts to candidates.\"",
"title": ""
},
{
"docid": "3888310130e7db43d4af9b3324cf9def",
"text": "I think I may have figured this out but if someone could double check my reasoning I'd appreciate it. So if my company makes $75000 and I decide to pay myself a $30000 salary, then the quarterly payment break down would be like this: 1040ES: Would pay income tax on non salary dividend ($45000) 941: Would pay income tax, SS, medicare on salary ($30000) (I'm the only person on payroll) So I think this answers my question in that after switching from filing as LLC to S-corp, I won't have to pay as much on 1040ES because some of it will now be covered on payroll.",
"title": ""
},
{
"docid": "806e9a3ed65f7aa9a2cea31e6a32d23f",
"text": "\"I don't know what you mean by \"\"claim for taxes,\"\" I think you mean pay taxes. I'm not sure how corps function in Canada but in the US single owner limited liability entities typically pass the net income through to the owner to be included in their personal tax return. So it seems all of this is more or less moot, because really you should probably already be including your income sourced from this project on your personal taxes and that's not really likely to change if you formed something more formal. The formal business arrangements really exist to limit the liability of the business spilling over in to the owner's assets. Or trouble in the owner's life spilling over to interrupt the business operation. I don't know what kind of business this is, but it may make sense to set up one of the limited liability arrangements to ensure that business liability doesn't automatically mean personal liability. A sole proprietorship or in the US we have DBA (doing business as) paperwork will get you a separate tax id number, which may be beneficial if you ever have to provide a tax ID and don't want to use your individual ID; but this won't limit your liability the way incorporating does.\"",
"title": ""
},
{
"docid": "4286585f14be963a8f314ca32f310036",
"text": "\"This is actually quite a complicated issue. I suggest you talk to a properly licensed tax adviser (EA/CPA licensed in your State). Legal advice (from an attorney licensed in your State) is also highly recommended. There are many issues at hand here. Income - both types of entities are pass-through, so \"\"earnings\"\" are taxed the same. However, for S-Corp there's a \"\"reasonable compensation\"\" requirement, so while B and C don't do any \"\"work\"\" they may be required to draw salary as executives/directors (if they act as such). Equity - for S-Corp you cannot have different classes of shares, all are the same. So you cannot have 2 partners contribute money and third to contribute nothing (work is compensated, you'll be getting salary) and all three have the same stake in the company. You can have that with an LLC. Expansion - S-Corp is limited to X shareholders, all of which have to be Americans. Once you get a foreign partner, or more than 100 partners - you automatically become C-Corp whether you want it or not. Investors - it would be very hard for you to find external investors if you're a LLC. There are many more things to consider. Do not make this decision lightly. Fixing things is usually much more expensive than doing them right at the first place.\"",
"title": ""
},
{
"docid": "96aefa42c9120412e688d4e47ccabd3c",
"text": "Street name is not what you think it is in the question. The broker is the owner in street name. There is no external secondary owner information. I don't know if there is available independent verification, but if the broker is in the US and they go out of business suddenly, you can make a claim to the SIPC.",
"title": ""
},
{
"docid": "5e773d0aa02456d51473a32d0d58d4c3",
"text": "I think you can solve the problem of different wordings by having a lookup with a table of all the different ways companies spell the same words that returns a standard format that you use. That way you only need to update the table every time you come across a new company and you wont have to type it out all the time.",
"title": ""
},
{
"docid": "ff8f7a486adf61b296339b15fb9d2700",
"text": "Thanks for that, it did help. I think my issue is I don't work in finance itself, I'm a lawyer, and 'capital' generally has a very specific meaning in English company law, where it refers exclusively to shareholder capital. I realise capital in finance terms includes both debt and equity investment.",
"title": ""
},
{
"docid": "73cccbaae914b8dac683a086c810dac6",
"text": "These are all factually correct claims. S-Corporation is a pass-through entity, so whatever gain you have on the corporate level - is passed to the shareholders. If your S-Corp has capital gains - you'll get your pro-rata share of the capital gains. Interest? The same. Dividends? You get it on your K-1. Earned income? Taxed as such to you. I.e.: whether you earn income as a S-Corp or as a sole proprietor - matters not. That's the answer to your bottom line question. The big issue, however, is this: you cannot have more than 25% passive income in your S-Corp. You pass that limit (three consecutive years, one-off is ok) - your S-Corp automatically converts to C-Corp, and you're taxed at the corporate level at the corporate rates (you then lose the capital gains rates, personal brackets, etc). This means that an S-Corp cannot be an investment company. Most (75%+) of its income has to be earned, not passive. Another problem with S-Corp is that people who work as self-proprietors incorporated as S-Corp try to abuse it and claim that the income they earned by the virtue of their own personal performance shouldn't be taxed as self-employed income. IRS frowns upon such a position, and if considerable amounts are at stake will take you all the way up to the Tax Court to prove you wrong. This has happened before, numerously. You should talk to a licensed tax adviser (EA/CPA/Attorney licensed in your state) to educate you about what S-Corp is and how it is taxed, and whether or not it is appropriate for you.",
"title": ""
},
{
"docid": "559b05e48a817e0e9841d2cc181a9a71",
"text": "\"You are confusing entirely unrelated things. First the \"\"profit distribution\"\" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as \"\"profits from S-Corp\"\". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case.\"",
"title": ""
},
{
"docid": "18e5ae8298e346338d69d4bfd5e80117",
"text": "Well it depends on whether or not your differentiating against. If its capital stock or stock as in a share certificate in the company. If its a share in the company then in my opinion using Equity would be best as it is a form of an asset and does refer to a piece of ownership of the entity. I wouldn't consider a share of stock a service, since the service to you is say Facebook or the broker who facilitates the transaction of buying or selling FB stock. I also would not consider it a Capital Good, as the Capital Good's would be the referring to the actual capital like the servers,other computer equipments etc.",
"title": ""
},
{
"docid": "bf38dce82645ae04c92ffe7f51c40d0a",
"text": "An S-corp doesn't pay income tax -- taxation is pass-through. This being the case, there are no tax deductions it could take for charitable giving. The solution would be for you to make the contribution out of your own pocket and then personally claim the deduction on your own taxes.",
"title": ""
},
{
"docid": "e2c43bf2a8cae781baa20f76e00826ef",
"text": "\"Presumably it means they're paying with normal money rather than paying with stock. Shareholders will receive money rather than any shares of AMZN when the deal goes through. \"\"Cash\"\" doesn't necessarily mean \"\"currency\"\" a la bills and coins. When you have money in your brokerage that isn't tied up in a security, for example, you're holding \"\"cash\"\" even though you don't physically have \"\"currency\"\".\"",
"title": ""
},
{
"docid": "907c06c0b11341ee4ff7f1ae8fad9493",
"text": "Having an EIN does not make the LLC a corporation -- your business can have an EIN even when treated like a sole proprietorship. An EIN is required to have a Individual 401(k), for example. But you can still be an LLC, taxed as a sole proprietor, and have a 401(k). You would need to file a Form 2553 with the IRS to elect S Corporation status. If you don't do that, you're still treated as a disregarded LLC. Whether or not you should make the election is another question.",
"title": ""
},
{
"docid": "cb98230292e4dc41833451410c889127",
"text": "You're confusing a lot of things here. Company B LLC will have it's sales run under Company A LLC, and cease operating as a separate entity These two are contradicting each other. If B LLC ceases to exist - it is not going to have it's sales run under A LLC, since there will be no sales to run for a non-existent company. What happens is that you merge B LLC into A LLC, and then convert A LLC into S Corp. So you're cancelling the EIN for B LLC, you're cancelling the EIN for A LLC - because both entities cease to exist. You then create a EIN for A Corp, which is the converted A LLC, and you create a DBA where A Corp DBA B Shop. You then go to the bank and open the account for A Corp DBA B Shop with the EIN you just created for A Corp. Get a better accountant. Before you convert to S-Corp.",
"title": ""
},
{
"docid": "5adcb66b7facb23889a1bb9856a5e2d9",
"text": "\"It sounds like maybe you want an \"\"investment club\"\". As defined by the SEC: An investment club is a group of people who pool their money to make investments. Usually, investment clubs are organized as partnerships and, after the members study different investments, the group decides to buy or sell based on a majority vote of the members. Club meetings may be educational and each member may actively participate in investment decisions. These \"\"typically\"\" do not need to register: Investment clubs usually do not have to register, or register the offer and sale of their own membership interests, with the SEC. But since each investment club is unique, each club should decide if it needs to register and comply with securities laws. There's more information from the SEC here: http://www.sec.gov/investor/pubs/invclub.htm The taxes depend on how you organized the club, i.e. if you organize as a partnership, I believe that you will be taxed as a partnership. (Not 100% sure.) Some online brokerages have special accounts specifically for investment clubs. Check around.\"",
"title": ""
}
] |
fiqa
|
c6de724735879f7b7e62c5f31fa11b68
|
CEO entitlement from share ownership?
|
[
{
"docid": "666a61f1c1c898757a9a989eaa678f77",
"text": "\"In its basic form, a corporation is a type of 'privileged democracy'. Instead of every citizen having a vote, votes are allocated on the basis of share ownership. In the most basic form, each share you own gives you 1 vote. In most public companies, very few shareholders vote [because their vote is statistically meaningless, and they have no particular insight into what they want in their Board]. This means that often the Board is voted in by a \"\"plurality\"\" [ie: 10%-50%] of shareholders who are actually large institutions (like investment firms or pension funds which own many shares of the company). Now, what do shareholders actually \"\"vote on\"\"? You vote to elect individuals to be members of the Board of Directors (\"\"BoD\"\"). The BoD is basically an overarching committee that theoretically steers the company in whatever way they feel best represents the shareholders (because if they do not represent the shareholders, they will get voted out at the next shareholder meeting). The Board members are typically senior individuals with experience in either that industry or a relevant one (ie: someone who was a top lawyer may sit on the BoD and be a member of some type of 'legal issues committee'). These positions typically pay some amount of money, but often they are seen as a form of high prestige for someone nearing / after retirement. It is not typically a full time job. It will typically pay far, far less than the role of CEO at the same company. The BoD meets periodically, to discuss issues regarding the health of the company. Their responsibility is to act in the interests of the shareholders, but they themselves do not necessarily own shares in the company. Often the BoD is broken up into several committees, such as an investment committee [which reviews and approves large scale projects], a finance committee [which reviews and approves large financial decisions, such as how to get funding], an audit committee [which reviews the results of financial statements alongside the external accountants who audit them], etc. But arguably the main role of the BoD is to hire the Chief Executive Officer and possibly other high level individuals [typically referred to as the C-Suite executives, ie Chief Financial Officer, Chief Operating Officer, etc.] The CEO is the Big Cheese, who then typically has authority to rule everyone below him/her. Typically there are things that the Big Cheese cannot do without approval from the board, like start huge investment projects requiring a lot of spending. So the Shareholders own the company [and are therefore entitled to receive all the dividends from profits the company earns] and elects members of the Board of Directors, the BoD oversees the company on the Shareholders' behalf, and the CEO acts based on the wishes of the BoD which hires him/her. So how do you get to be a member of the Board, or the CEO? You become a superstar in your industry, and go through a similar process as getting any other job. You network, you make contacts, you apply, you defend yourself in interviews. The shareholders will elect a Board who acts in their interests. And the Board will hire a CEO that they feel can carry out those interests. If you hold a majority of the shares in a company, you could elect enough Board members that you could control the BoD, and you could then be guaranteed to be hired as the CEO. If you own, say, 10% of the shares you will likely be able to elect a few people to the Board, but maybe not enough to be hired by the Board as the CEO. Short of owning a huge amount of a company, therefore, share ownership will not get you any closer to being the CEO.\"",
"title": ""
},
{
"docid": "f130cbf649f1927e057d58350102db01",
"text": "You can apply for a position with any company you like, whether or not you are a shareholder. However, owning shares in a company, even lots of shares in a company, does not entitle you to having them even look at your resume for any job, let alone the CEO position. You generally cannot buy your way into a job. The hiring team, if they are doing their job correctly, will only hire you if you are qualified for the job, not based on what your investments are. Stockholders get a vote at the shareholders' meeting and a portion of the profits (dividend), and that's about it. They usually don't even get a discount on products, let alone a job. Of course, if you own a significant percentage of the stock, you can influence the selections to the board of directors. With enough friends on the board, you could theoretically get yourself in the CEO position that way.",
"title": ""
},
{
"docid": "27927535ae3f4f07332efe08b23f7af6",
"text": "If I own shares of a company, am I entitled to apply as position of CEO? Sure, but anybody else can apply too. Who decides? The corporate board of directors, who are nominally chosen by a vote of the stockholders. I say nominally, because in practice they are nominated by the current CEO and it's very rare for stockholders to veto the CEO's choice. Once in a while a group of stockholders will nominate their own candidate for the board, but they rarely win. I'd like to think there's some socio-corporate or investor-relationship advantage to working or having the option to work in certain positions in said company -- especially by privilege or total outstanding share ownership numbers. Why? Simply holding a large number of shares doesn't necessarily mean you know anything about running the business.",
"title": ""
}
] |
[
{
"docid": "6fabbdbd646deebfed2e6ce56a9ae822",
"text": "\"If you own 1% of a company, you are technically entitled to 1% of the current value and future profits of that company. However, you cannot, as you seem to imply, just decide at some point to take your ball and go home. You cannot call up the company and ask for 1% of their assets to be liquidated and given to you in cash. What the 1% stake in the company actually entitles you to is: 1% of total shareholder voting rights. Your \"\"aye\"\" or \"\"nay\"\" carries the weight of 1% of the total shareholder voting block. Doesn't sound like much, but when the average little guy has on the order of ten-millionths of a percentage point ownership of any big corporation, your one vote carries more weight than those of millions of single-share investors. 1% of future dividend payments made to shareholders. For every dollar the corporation makes in profits, and doesn't retain for future growth, you get a penny. Again, doesn't sound like much, but consider that the Simon property group, ranked #497 on the Fortune 500 list of the world's biggest companies by revenue, made $1.4 billion in profits last year. 1% of that, if the company divvied it all up, is $14 million. If you bought your 1% stake in March of 2009, you would have paid a paltry $83 million, and be earning roughly 16% on your initial investment annually just in dividends (to say nothing of the roughly 450% increase in stock price since that time, making the value of your holdings roughly $460 million; that does reduce your actual dividend yield to about 3% of holdings value). If this doesn't sound appealing, and you want out, you would sell your 1% stake. The price you would get for this total stake may or may not be 1% of the company's book value. This is for many reasons: Now, to answer your hypothetical: If Apple's stock, tomorrow, went from $420b market cap to zero, that would mean that the market unanimously thought, when they woke up tomorrow morning, that the company was all of a sudden absolutely worthless. In order to have this unanimous consent, the market must be thoroughly convinced, by looking at SEC filings of assets, liabilities and profits, listening to executive statements, etc that an investor wouldn't see even one penny returned of any cash investment made in this company's stock. That's impossible; the price of a share is based on what someone will pay to have it (or accept to be rid of it). Nobody ever just gives stock away for free on the trading floor, so even if they're selling 10 shares for a penny, they're selling it, and so the stock has a value ($0.001/share). We can say, however, that a fall to \"\"effectively zero\"\" is possible, because they've happened. Enron, for instance, lost half its share value in just one week in mid-October as the scope of the accounting scandal started becoming evident. That was just the steepest part of an 18-month fall from $90/share in August '00, to just $0.12/share as of its bankruptcy filing in Dec '01; a 99.87% loss of value. Now, this is an extreme example, but it illustrates what would be necessary to get a stock to go all the way to zero (if indeed it ever really could). Enron's stock wasn't delisted until a month and a half after Enron's bankruptcy filing, it was done based on NYSE listing rules (the stock had been trading at less than a dollar for 30 days), and was still traded \"\"over the counter\"\" on the Pink Sheets after that point. Enron didn't divest all its assets until 2006, and the company still exists (though its mission is now to sue other companies that had a hand in the fraud, get the money and turn it around to Enron creditors). I don't know when it stopped becoming a publicly-traded company (if indeed it ever did), but as I said, there is always someone willing to buy a bunch of really cheap shares to try and game the market (buying shares reduces the number available for sale, reducing supply, increasing price, making the investor a lot of money assuming he can offload them quickly enough).\"",
"title": ""
},
{
"docid": "2c46d161c34612ee675c75f428ef6e50",
"text": "Many times, specific CEOs are hired by the board in part because the board members will also at times in the future possibly be in the running to be the CEO of a company, and the previous CEO's they voted for in may wind up being on the board of the company they want to be CEO of. So one hand makes damn sure it's washing the other. It's a very incestuous process and not uncommon for CEOs of one company to be sitting board members on another.",
"title": ""
},
{
"docid": "49dfbb810a5fa505b81271cf193a70ed",
"text": "\"Yes yes, beholden to the shareholders at all possible costs of morals, ethics, or long-term sustainability. The wonders of the stock market. Nonetheless, it's not entirely true. He has a responsibility to do what the shareholders want, which might not be \"\"profit above all.\"\" Furthermore, since he is the biggest shareholder, he has the largest single say in what the shareholders want. In fact he and the Legg Mason company own just under 50%, so they pretty much get to decide between them what to do. Now add to that the fact that being a patent troll isn't necessarily a profitable strategy, nor a particularly palatable behaviour, and it's pretty easy to say \"\"we will not go down this road,\"\" and get wholehearted approval. FINALLY, it doesn't change the fact that Bezos is still a fucking hypocrite.\"",
"title": ""
},
{
"docid": "26f0f07919599bd9f2ea3e0bcea77ea1",
"text": "Retail companies selling their real estate holdings isn't uncommon and is actually pushed for by shareholders sometimes (see Macy's and Starboard Value). The fact that the CEO bought them seems unique but not necessarily means there was an issue. I would think that type of transaction would get a lot of scrutiny so would be surprised if he could pull off any fuckery. The disclosure seems like it might be a pretty standard disclosure known as a related party transaction that again isn't in and of itself an issue",
"title": ""
},
{
"docid": "21dc9abe53c4abd581bbc4cc434ccffd",
"text": "...ok, you understand that the board of directors don't collect all of the profit from a company, and that shareholders can sell stock, right? It his honestly confusing to me that you have a problem with shareholders being given ownership in a company that is spun off from the company that they own.",
"title": ""
},
{
"docid": "a1c98ccc768243eed86cf029e1f1b71b",
"text": "Warren Buffet also isn't the CEO of a major company - or at least one that matters in this context. He is the CEO of Berkshire Hathaway. That is a holding company that owns a handful of other companies. It doesn't have customers, it doesn't sell a product. It owns companies that do those things, some of which directly rely on technology and need their CEO to have a strong understanding of technology. The things is though, that each of those companies? They have their own CEO - not Warren Buffett.",
"title": ""
},
{
"docid": "a4d5580589ea4d62f3f30101411de1ba",
"text": "Everything you say is true also of private companies, particularly ones that are publicly traded. As a shareholder, you bet your ass I don't like it when the CEO I've hired is doing stupid shit like this instead of saving the company money and making me more money.",
"title": ""
},
{
"docid": "c0a75c6f74188ba156f3b7ab5fda265f",
"text": "First, the stock does represent a share of ownership and if you have a different interpretation I'd like to see proof of that. Secondly, when the IPO or secondary offering happened that put those shares into the market int he first place, the company did receive proceeds from selling those shares. While others may profit afterward, it is worth noting that more than a few companies will have secondary offerings, convertible debt, incentive stock options and restricted stock that may be used down the road that are all dependent upon the current trading share price in terms of how useful these can be used to fund operations, pay executives and so forth. Third, if someone buys up enough shares of the company then they gain control of the company which while you aren't mentioning this case, it is something to note as some individuals buy stock so that they can take over the company which happens. Usually this has more of an overall plan but the idea here is that getting that 50%+1 control of the company's voting shares are an important piece to things here.",
"title": ""
},
{
"docid": "1a67fc235eaacfbf84a602083cfb5dee",
"text": "No necessarily. Do you bring any unique value to the company other than a sweaty pair of hands? Did you bring a unique skill, bring in investors, have relationships that are able to get the business off the ground, have intellectual property worth something to the business? Did you cultivate the unique seeds or strain on your own before the business started? These are all things one takes into consideration when dividng up shares in a company. The question you need to ask yourself is could someone else have provided the sweaty hands other than you? If yes, then unfortunately you provide no unique value to the business and that will be reflected in how share are portioned. I'm speaking as a co-founder in a Silicon Valley tech company. I've spent a lot of money with lawyers to understand this. You should definitely talk to a lawyer.",
"title": ""
},
{
"docid": "455ed166eb7e627286d56be7073dcf01",
"text": "\"These people are pretty off. Insider trading cases, outside of a tender offer context, require some sort of a breach of duty. It's not simply \"\"non-public material information\"\". You have to trade securities in interstate, based on or while in possession of the material non-public information, and in doing so is a breach of duty owed to the company or to the information source. Now simply saying \"\"personal info\"\" about an executive does not tell me much about its materiality. So assuming it passes the materiality test, and assuming you yourself aren't a corporate insider, then the only thing left to discuss is whether or not it is misappropriation. To be misappropriation you need to be breaching some duty owed to your information source. Now this isn't just principal-agent duty, this can extend to friends and family if there is a pattern of keeping confidences. So unless you're this guys brother or doctor there really isn't a strong claim against you.\"",
"title": ""
},
{
"docid": "d06349084c45781a721806b020f21563",
"text": "They are actually pretty common and it's the reason that anyone who takes a Board seat at a company without D&O insurance is playing russian roulette. Now winning a shareholder suit on the merits (whether personal or derivative liability) is a whole different story - at least in Delaware Chancellery (fun fact DE has two judicial systems, one for corporate stuff with world class talent and one for everything else). There's this doctrine called the 'Business Judgment Rule' which is a very high bar for a shareholder to overcome. Otherwise you'd see shareholder suits for every business deal that went wrong. The other problem these Uber investors might run into is they haven't realized a loss, nor are they likely to have a negative return on the initial investment. Marking down a gain against a high water mark is an uphill battle. Based on what it public, idk the cause of action, maybe Kalanick is going back on contractual language in his separation agreement (which is currently non-public) or that some of his actions as CEO could be considered self-dealing (again, not information currently in the public domain). Or maybe it's just a threat to put all the non-public shitty things he has done in a pleading and therefore put it in the public domain.",
"title": ""
},
{
"docid": "498799c329f332ed740cce7d09b70ba6",
"text": "Your question has already been answered, you divide the amount of shares you own * 100% by the total amount of shares. However, I feel it is somewhat misleading to talk about owning a percentage of the company by owning shares. Strictly speaking, shares do not entitle you to a part of the company but instead give you a proportional amount of votes at shareholder meetings (assuming no funky share classes). What this means is that someone who owns 30% of a company's shares can't just grab 30% of the company's assets (factories, offices and whatever) and say that they are entitled to own this. What they actually own is 30% of the voting rights in this company, this means that they control 30% of all available votes when the company calls a vote on corporate actions, choosing a new director etc. which is how shareholders exert their influence on a company.",
"title": ""
},
{
"docid": "5ad9424d58305e68be6c8606b9addd64",
"text": "\"I know some CEOs (for both big and small companies). A few have admitted to me on a few occasions they themselves don't have the slightest idea about being a CEO. The world changes too fast so they have absolutely no idea what's going to work and what isn't when it comes time to make decisions. All they can do is rely on the recommendations of the people that work under them at which point it becomes a matter of trust: Do you trust the recommendations from your CTO? Who did he trust to make that recommendation? The trust chain goes waaay down and it makes you wonder if the people who \"\"know\"\" (at the end of the chain) shouldn't have been able to just make the decision themselves.\"",
"title": ""
},
{
"docid": "efcd1142c1cd872b0c2498a900e359a0",
"text": "\"By issuing additional equity. In this case, the pie isn't \"\"fixed,\"\" it's getting bigger. Now, to avoid lawsuits and other potential issues (some of which may be unavoidable), the owner will likely need to subscribe for additional equity himself. Example: 100 shares outstanding. 51 to owner, 49 to 2 others. That 49 will have to equal 20%, as none of their shares are being sold (likely). This means total shares will need to be increased to 245. Subtract 49 from that number: 196 Marcus gets half of that at a determined price. 98 Owner must increase his stake from 51 to 98 shares. To do so, he'll need to contribute additional cash for the same price Marcus gets in on. That could be expensive.\"",
"title": ""
},
{
"docid": "71cc4c1825d9e3abe96891c2fe6102df",
"text": "\"Excellent observation! The short answer is that you don't own the firm, you own the right to your share of the profits (or losses) for the period that you worked there. Technically you also have the right to vote to sell or disband the company (known as demutualization). The workers at Equal Exchange voted in a clause to our bylaws to prevent this--basically a \"\"poison pill.\"\" It says that if we ever sold the company we have to pay off any debts, return any investments (at the price paid), and give away any remaining assets to another company dedicated to Fair Trade. The effect is that there is no incentive for us to sell the company, so we don't worry about all the kinds of things you would if you were focused on an \"\"exit strategy.\"\" But in this sense, \"\"ownership\"\" is even more compromised, right? Back to your question, I think the answer is \"\"It depends on what you mean by ownership.\"\" It is certainly not ownership in the conventional sense. I think of it more like a trusteeship. We are stewards of the enterprise while we have the benefits given to active workers, but we have a responsibility not just to maximize our own well-being, but that of the other stakeholders (our suppliers, consumers, investors, our communities, the environment, etc), including the people who worked there before (and left part of the profits in the company as retained earnings) and those that will come after us.\"",
"title": ""
}
] |
fiqa
|
511f647aa9e7ea70119f54bf2a3663d6
|
How did Bill Gates actually make his money?
|
[
{
"docid": "b06dbc7ce5a82c30fc8a0c8b1ccf8fd5",
"text": "Bill was the founder of Microsoft, so he did indeed have a large number of shares as the company was growing exponentially. He has previously donated a large share of his fortune to the Bill and Melinda Gates foundation, so his fortune would be even greater were it not for the philanthropy. He is still a large holder of Microsoft stock at about $12B according to your link, but it wouldn't be wise to hold his entire fortune in one company, so he has diversified. You can see that his investment portfolio at Cascade includes ~$28B in Televisa and ~$7B in Berkshire Hathaway. http://www.tickerspy.com/pro/Bill-Gates---Cascade-Investment And you can keep track of whether he stays at the top by watching the bloomberg billionaires list. http://www.bloomberg.com/billionaires/",
"title": ""
},
{
"docid": "0deb603a0ea8f5758bbd77421d151e0d",
"text": "Bill gates is founder of microsoft along with his friend allen.in microsoft as its vast empire increasing the wealth and enormous property of bill gates is increasing",
"title": ""
}
] |
[
{
"docid": "db8b1714a47d047e039ee0a498b8ef5a",
"text": "You seem to be confused - try answering these: 1. Whom do the traders work for? 2. What are the traders trading and how do they acquire those vehicles? 3. How does a company make money and how does that money get deployed? Google will be crucial for these, but will answer your questions. If you choose to get in finance, remember the golden rule: if you have a question, Google it first.",
"title": ""
},
{
"docid": "470818f415974e8f12818ad3b1a7978a",
"text": "\"> Identifying and supporting products good for the business If a gray person comes with a great idea or innovation, any idiot can \"\"identify\"\" and \"\"support\"\" that product. And you want to bet how many great ideas and products Steve and CEOs said \"\"No!\"\" and it turned out to be huge mistakes? Do you know the story of Bill Gates/Microsoft Internet Explorer versus Steve Jobs/Macintosh? Hint: eventually, Steve had to cave in and ask Bill Gates to make a version of Internet Explorer for the Macintosh. In this respect, Bill Gates was much much better than Steve Jobs in identifying and supporting new products and ideas.\"",
"title": ""
},
{
"docid": "2472f1f12e24f238ed3c47e4e4436671",
"text": "where did all this money come from? Investing in a currency, whether it's bitcoin, gold, USD, or another country's currency, is a risky investment because the average trader loses money (after transaction fees). This is not true of the stock market, since successful companies actually produce wealth. So in short, money made from selling bitcoin comes from the people buying your bitcoins. why has bitcoin performed so well over the past year? This is an extremely difficult question to answer, but I can point out some of the most prominent factors. This last point is one of the biggest. With all the recent hype, more and more people want to try to get in on the action. No one can tell when or if the bubble will pop, though.",
"title": ""
},
{
"docid": "15126f103a2667dba90dba966a855cc1",
"text": "\"I don't think they \"\"actually\"\" turned a profit, did they? As I understand it, this is an accounting method/trick, it's not as if they generated more income by using this system. They just made their monetary value visible rather than implicit. Which is not the same as turning a profit... or am I missing something?\"",
"title": ""
},
{
"docid": "70959a94ab8dc442e876159289f59fd4",
"text": "\"? You quoted an oft cited oft disproven false factoid. It's extremely biased. Like you seem to be. Most of those \"\"self made\"\", notice those quotes, people came from money. Their business is \"\"self made\"\", with family money. Like the article implies.\"",
"title": ""
},
{
"docid": "4aa71bc5470147597db83be59cdb3e56",
"text": "\"The scenario you mention regarding capital gains is pretty much the core of the issue. Here's a run-down from PolitiFact.com that explains it a bit. It's important to focus on it being the tax rate, not the tax amount (which I think you get, but I want to reinforce that for other readers). Basically, most of Buffett's income comes from capital gains and dividends, income from investments he makes with the money he already has. Income earned by buying and selling stocks or from stock dividends is generally taxed at 15 percent, the rate for long-term capital gains and qualified dividends. Buffett also mentioned that some of the \"\"mega-rich\"\" are hedge fund managers \"\"who earn billions from our daily labors but are allowed to classify our income as 'carried interest,' thereby getting a bargain 15 percent tax rate.\"\" We don't know the taxes paid by Buffett's secretary, who was mentioned by Obama but not by Buffett. Buffet's secretary would have to make a high salary, or else typical deductions (such as the child tax credit) would offset taxes owed. Let's say the secretary is a particularly well-compensated executive assistant, making adjusted income more than $83,600 in income. (Yes, that sounds like a lot to us, too, but remember: We're talking about the secretary to one of the richest people in the world.) In that case, marginal tax rates of 28 percent would apply. Then, there would be payroll taxes of 6.25 percent on the first $106,800, money that goes to Social Security, and another 1.45 percent on all income, which goes to Medicare. The secretary’s overall tax rate would be lower than 28 percent, since not all the income would be taxed at that rate, only the income above $83,600. Buffett, meanwhile, would pay very little, if anything, in payroll taxes. In the New York Times op-ed, Buffett said he paid 17.4 percent in taxes. Thinking of the secretary, it gets a little complicated, given how the tax brackets work, but basically, people who make between $100,000 and $200,000 are paying around 20 percent in federal taxes, including payroll and income taxes, according to an analysis from the nonpartisan Tax Policy Center. So in this case, the secretary's rate is higher because so much of Buffett's income comes from investments and is taxed at the lower capital gains rate. Here's Buffet's original Op-Ed in the NYT for those of you that aren't familiar.\"",
"title": ""
},
{
"docid": "ca81db9a63449674261e9745be87404d",
"text": "\"It's called being smart. I spent 2+ years building a business that now brings me \"\"passive income\"\". IE: It runs itself online and I only need to put a couple of hours/week. Have you ever tried a \"\"turnkey operation\"\"? Anything easy is so saturated that you will most likely never make money.\"",
"title": ""
},
{
"docid": "cdb67751d24e889a71f4402990cfddd0",
"text": "\"Yes, you're right, the whole system of venture capital is all about creating a great work environment. So are all those articles about how Jack Dorsey works two 8-hour job back to back, and Michael Arrington the venture capitalist and tabloidist telling you to \"\"quit crying\"\" -- and Paul Graham, the venture capitalist, telling you how hackers are god's gift to the earth and how, for a hacker, working a job is like being \"\"a caged lion.\"\" It's not about the money at all. Nooo. They're telling you this for the good of their widdle souls.\"",
"title": ""
},
{
"docid": "355134dc7106c021184cf1ba965be9a2",
"text": "\"An individual's net worth is the value of the person's assets minus his debt. To find your net worth, add up the value of everything that you own: your house, your cars, your bank accounts, your retirement investments, etc. Then subtract all of your debt: mortgage, student loans, credit card debt, car loans, etc. If you sold everything you own and paid off all your debts, you would be left with your net worth. If Bill Gates' net worth is $86 Billion, he likely does not have that much cash sitting in the bank. Much of his net worth is in the form of assets: stocks, real estate, and other investments. If he sold everything that he has and paid any debts, he would theoretically have the $86 Billion. I say \"\"theoretically\"\" because in the amounts of stock that he owns, he could cause a price drop by selling it all at once.\"",
"title": ""
},
{
"docid": "c766b03621430efa069852fc839217ef",
"text": "A great deal of the money was made abroad. I imagine they paid some tax in those respective countries. I heard that they and other large Co's were trying to get a deal bring the money home. If they did they would be taxed again.",
"title": ""
},
{
"docid": "8031cefc62322a4ac0c426c8089c9342",
"text": "If you could find a breakdown, I suspect that it would show not just that they are self employed but own their own company. There are many people that are self employed, many of them make a good living at it, but are not millionaires. My neighbour the plumber is a perfect example of this sort of self-employed and comfortable but not rich person. The key to wealth growth is to own (a significant part of) a company. It one way to leverage a smaller amount of money to something much larger. Plough your profits back in to the company to grow it, pay yourself reasonably for some time as the company grows. After it is some size, you can afford to pay yourself more of the profits, if not sell it as a going concern to someone else. One last thought - I am assuming that your book is claiming that they made their money through self-employment, instead of choosing to become self employed after striking rich somewhere. If I were to win the lottery, I might then become a self-employed something, but in that case it was not my self-employment that got me there.",
"title": ""
},
{
"docid": "8d6ad7b4bb3d7a75db8e7658f0390b3e",
"text": "\"For example, Biff Spoiles started an animation studio and production developing company to produce animations -- something in the ballpark of $12,000,000.00 U.S.D. -- and he had a $12K/yearly salary. I have no clue what you mean, as others have mentioned. (I'm not sure what the \"\"12 million\"\" refers to? Do you mean \"\"total cost of animations created by the company in a year\"\" or? If so, \"\"12 million\"\" would amount to say 5 to 20 major, brand name TV commercials, for example. Do you mean the \"\"cost of plant\"\" - so, for a \"\"TV commercial production company\"\" you mean purchasing desks, drawing pads, Porsches, and so on?) Your specific example of a \"\"film or TV-commercial production company\"\" is a bad example, it's not really a \"\"business\"\" - that is to say, it does not rely on capital and return on capital. The way famous \"\"film or TV-commercial production companies\"\" happens is precisely like this: A young guy/girl G (perhaps a designer or filmmaker) is working, just as you say, for a menial wage at a film company. (G got that first job perhaps out of art school.) G gets a chance at doing a photo shoot, animation, or helping direct a TV commercial. G does a fantastic job. Later that year, a large important animation or commercial job arrives at the company; due to the earlier excellent result, G is allowed to work on the new one. G again he does a fantastic job. Soon, within that company, G is a highly-regarded animator or director and has attracted fame amongst colleagues and clients. Eventually, G hears of a company (XYZ Hotel) that needs a TV ad made. (Or an animation, or whatever.) G says to XYZ, look, you could spend $230,000 with a production company, and in reality they'd have me direct it anyway. I'm leaving to work independently, so I will do your job for only $190,000. In a word, XYZ says \"\"Yes\"\" and hands over a cheque for $190,000. G spends $160,000 on the usual actors, cameramen, editing, etc, and uses 2 months of G's own time, and pockets $5000 after tax. G then doesn't get a job for a couple months, and then gets three more in the new year. Because the commercial for XYZ was so good, XYZ gave him another couple to do, for another product line. Eventually G has just enough money coming in that he \"\"hires\"\" a few freelance people for a few weeks here and there ... a cameraman, illustrator, gopher, and so on. Eventually G has enough TV ads solidly booked G can risk actually hiring long-time friend P as a producer. P spends most of her time actually bringing in more work - and it builds from there. Eventually. You have a very busy, well-known in the industry, TV commercial production company with many staff and endless clients (example, say, http://rsafilms.com) It might be at some point in there (say, around year three), G would like to borrow the odd million bucks to basically \"\"help with cashflow.\"\" The answer to that is nothing more than \"\"through business contacts, G knows a wealthy dentist/whoever who is prepared to do that.\"\" But note carefully that at that point, G's company is already very firmly established, famous for doing 20 spectacular animations/commercials, and so on. (Note too that 999 times out of 1000 when this happens, the money evaporates and the dentist D never sees a penny back. In that case G \"\"apologizes\"\".) Only much much later once the company has many, many staff and great cashflow, could the production company actually borrow from a bank, or perhaps from \"\"actual investors\"\", which is more what you have in mind. regarding your four categories. Numbers 1 and 3 are totally wrong; they do not work at all like you are asking. indeed the very simple answer is: \"\"borrow money\"\" to start a category 1 or 3 type of business. It's totally inconceivable. (The only exception would be if you literally just have an extremely rich Uncle, who loans you a few million to \"\"start an animation studio\"\" - which would be completely whacky. Because in that example: company XYZ could not care less if you \"\"have\"\" an animation studio (ie: your Uncle has given you a platinum card, and you bought a building, some drawing pads, and a few dozen Macs). XYZ just couldn't care less. All they care about is your folio of work. In this example, RSA would get the job :) ) My guess is you're thinking people somehow magically go around \"\"borrowing money\"\" to get businesses like that started. (Your examples 1 and 3.) The simple answer is they don't and can't - your fears are assuaged! :)\"",
"title": ""
},
{
"docid": "32a72c979ff699546c6d7d4d2da204b2",
"text": "I don't know about the Saudi part of your point, but generally these are estimations based on the ownership stake of X person's main enterprise (e.g. Amazon, Microsoft, Berkshire). Even if Bezos made millions one year investing in, whatever, McDonald's franchises, it's a rounding error compared to his ~$80bn stake in Amazon, so they don't need pour over tax returns to get exact info.",
"title": ""
},
{
"docid": "3a8684858339cf2b2fcef9ec073368bd",
"text": "\"As others have stated, CEO's often make more than 200K, and when they do, they're compensated with stock options and other lucrative bonuses and deals that allow them to build wealth above and beyond the face value of their salary. However, remember that having wealth makes it easier to build further wealth. As Victor pointed out, having wealth allows you to increase your wealth in different kinds of investments. Also, it gives you access to more human capital, e.g. wealth management services at firms like Northern Trust, a greater ability to diversify into investments like hedge funds, more abilities to invest abroad through foreign trusts, etc. Also, you have to realize that wealthier people often pay a lower percentage in taxes than people who earn a salary. In the US, long-term capital gains are taxed at a much lower rate than income, so wealthy individuals who earn much of their money from long-term investments won't pay nearly as high a rate. In my case, my current salary places me at the top of the 25% tax bracket (in the US), but if I earned all of my income through long-term capital gains instead of salary, I would only pay around 15-20% in taxes. Plus, I could afford numerous tax accounting firms to help me find ways to pay fewer taxes. It's not altruism that causes CEOs like Steve Jobs and Mark Zuckerberg to take a $1 salary. This isn't directly related to CEOs, and I'm not leveling accusations of corruption against high net worth individuals, but I remember spending a few months in a small town in a country known for its corruption. The mayor had recently purchased a home worth the equivalent of several million dollars, on his annual civil servant salary of approximately $20K. One of the students asked him how he managed to afford such a sizable property, and he replied \"\"I live very frugally.\"\" This is probably a relatively rare case (I'm sure it depends on the country), but nevertheless, it illustrates another way that some people build wealth.\"",
"title": ""
},
{
"docid": "025adc914ef3b24720ad4fd4af995e8d",
"text": "\"I did once read a book titled \"\"How I made a million dollars on the stock market\"\". It sounded realistic enough to be a true story. The author made it clear on the first page that (a) this was due to some exceptional circumstances, (b) that he would never again be able to pull off something like this, and (c) you would never be able to pull of something like this, except with extreme luck. (The situation was small company A with a majority shareholder, other small company B tries to gain control by buying all the shares, the majority shareholder of A trying to prevent this by buying as many shares as possible, share price shooting up ridiculously, \"\"smart\"\" traders selling uncovered shorts to benefit when the price inevitably drops, the book author buying $5,000 worth of shares because they were going up, and then one enormous short squeeze catching out the traders. And he claimed having sold his shares for over a million - before the price dropped back to normal). Clearly not a matter of \"\"playing your cards right\"\", but of having an enormous amount of luck.\"",
"title": ""
}
] |
fiqa
|
19c3a42952bd4e0d709b70c036b3b115
|
Calculating NPV for future cash inflows
|
[
{
"docid": "37b6ad0518ebc7f4b83f9bd343b4f4fd",
"text": "When calculating the NPV, is there anything I need to do in between the project start date outlay (Nov 2017), and the first cash inflow (July 2019). Do I need to discount the cashflow to the present, and if so, how? Yes, you need to discount every cash flow to the present time, not just the first one. When discounting cash flows, the appropriate discount rate needs to represent the opportunity cost of the initial cash outlay. Meaning if you were to use that money for something else, what rate of return would you expect? You could be safe and assume only a risk-free return (like 2-3%) or use the average rate of return of other investments (e.g. 10-15%). Another common approach is to use your cost of capital if you're raising funds for the project, or would instead have use the funds to pay off existing debt. Once you find a relevant discount rate, then just discount each cash flow by dividing them by e^rt, where r is the annualized discount rate (e.g. 0.10 for 10%) and t is the decimal number of years between now and the cash flow (e.g. 1.5 for 18 months)",
"title": ""
}
] |
[
{
"docid": "d9ce05ddb40dc946e759da0253008cb9",
"text": "The short answer is you'd be much better off paying up front in this case. The present value of $2,500 plus 12 $500 monthly payments is $8,128 at a 12% discount rate, which is much higher then the $6,000 you could pay now. The long answer is how you get that present value. How can I use time value of money to find the present value of money if I choose to go with option A? First of all, I'd question your discount rate. A 12% discount rate means that you can safely reinvest the money that you're not spending today at a 12% annual (1% monthly) rate, which seems very high. Normally for short-term spending decisions you'd use a risk-free rate, which would be closer to 1%-2%. However, to discount at 1% monthly you'd just divide each monthly payment by 1 plus the discount rate raised to the power of the number of periods until each payment. So the total is which is $8,127.54 You could also use the NPV function in Excel. It seems like to get an accurate answer the calculation of the interest rate should take into account compounding period as well? Correct, and in the example above the compounding is assumed to be monthly since that's the periodicity of the cash flows. You could calculate it with a different compounding period but it gets much more complicated and probably wouldn't make a significant difference. The discount rate does take compounding into effect, meaning if you saved the $5,628 (the PV of $8,128 minus the $2,500 initial payment), you'd earn 1% interest on $5,628 the first month, $5,128 plus that interest the second month, etc.",
"title": ""
},
{
"docid": "d96196ef83d94bf00b3b41436799afda",
"text": "**Using your Time Value of Money functions on your calculator** N = 3x2 = 6 PV = -914 PMT = (.16 x 1000)/2 = 80 FV = 1000 Compute I/Y Or **Step by step calculations** 1) Compute the PV of **(FV of Bond)**1000 in **(3x2)**6 periods at **(16%/2)**8% with no payments 2) Compute the PV of an Annuity of **(.16/2x1000)**$80 payments over **(3x2)**6 periods with an interest rate of **(16%/2)**8% and 0 Future Value 3) Combine the values from Steps 1 and 2",
"title": ""
},
{
"docid": "34df5ec1c05afd8af852ecb3db4b3b77",
"text": "\"I got $3394.83 The first problem with this is that it is backwards. The NPV (Net Present Value) of three future payments of $997 has to be less than the nominal value. The nominal value is simple: $2991. First step, convert the 8% annual return from the stock market to a monthly return. Everyone else assumed that the 8% is a monthly return, but that is clearly absurd. The correct way to do this would be to solve for m in But we often approximate this by dividing 8% by 12, which would be .67%. Either way, you divide each payment by the number of months of compounding. Sum those up using m equal to about .64% (I left the calculated value in memory and used that rather than the rounded value) and you get about $2952.92 which is smaller than $2991. Obviously $2952.92 is much larger than $2495 and you should not do this. If the three payments were $842.39 instead, then it would about break even. Note that this neglects risk. In a three month period, the stock market is as likely to fall short of an annualized 8% return as to beat it. This would make more sense if your alternative was to pay off some of your mortgage immediately and take the payments or yp pay a lump sum now and increase future mortgage payments. Then your return would be safer. Someone noted in a comment that we would normally base the NPV on the interest rate of the payments. That's for calculating the NPV to the one making the loan. Here, we want to calculate the NPV for the borrower. So the question is what the borrower would do with the money if making payments and not the lump sum. The question assumes that the borrower would invest in the stock market, which is a risky option and not normally advisable. I suggest a mortgage based alternative. If the borrower is going to stuff the money under the mattress until needed, then the answer is simple. The nominal value of $2991 is also the NPV, as mattresses don't pay interest. Similarly, many banks don't pay interest on checking these days. So for someone facing a real decision like this, I'd almost always recommend paying the lump sum and getting it over with. Even if the payments are \"\"same as cash\"\" with no premium charged.\"",
"title": ""
},
{
"docid": "9dc01201aa4269618c5e42e2e8990c96",
"text": "Both are correct depending on what you are really trying to evaluate. If you only want to understand how that particular investment you were taking money in and out of did by itself than you would ignore the cash. You might use this if you were thinking of replacing that particular investment with another but keeping the in/out strategy. If you want to understand how the whole investment strategy worked (both the in/out motion and the choice of investment) than you would definitely want to include the cash component as that is necessary for the strategy and would be your final return if you implemented that strategy. As a side note, neither IRR or CAGR are not great ways to judge investment strategies as they have some odd timing issues and they don't take into account risk.",
"title": ""
},
{
"docid": "0244ad7d7f3b3a9289ef05a741c226ee",
"text": "O boy you can take an entire on this. Here are the basics. Project future cash flows on a series of underlying assumptions such as growth rate and risk free rate. You then have to adjust top line items such as depreciation and come up with FCF. Then discount everything back with a terminal value.",
"title": ""
},
{
"docid": "3f7bfbd56d669e0399eb055e331c64dd",
"text": "Set your xirr formula to a very tall column, leaving lots of empty rows for future additions. In column C, instead of hardcoding the value, use a formula that tests if it's the current bottom entry, like this: =IF(ISBLANK(A7),-C6, C6) If the next row has no date entered (yet), then this is the latest value, and make it negative. Now, to digress a bit, there are several ways to measure returns. I feel XIRR is good for individual positions, like holding a stock, maybe buying more via DRIP, etc. For the whole portfolio it stinks. XIRR is greatly affected by timing of cash flows. Steady deposits and no withdrawals dramatically skew the return lower. And the opposite is true for steady withdrawals. I prefer to use TWRR (aka TWIRR). Time Weighted Rate of Return. The word 'time' is confusing, because it's the opposite. TWRR is agnostic to timing of cashflows. I have a sample Excel spreadsheet that you're welcome to steal from: http://moosiefinance.com/static/models/spreadsheets.html (it's the top entry in the list). Some people prefer XIRR. TWRR allows an apples-to-apples comparison with indexes and funds. Imagine twin brothers. They both invest in the exact same ideas, but the amount of cash deployed into these ideas is different, solely because one brother gets his salary bonus annually, in January, and the other brother gets no bonus, but has a higher bi-weekly salary to compensate. With TWRR, their percent returns will be identical. With XIRR they will be very different. TWRR separates out investing acumen from the happenstance timing of when you get your money to deposit, and when you retire, when you choose to take withdrawals. Something to think about, if you like. You might find this website interesting, too: http://www.dailyvest.com/",
"title": ""
},
{
"docid": "e1edf407c3b96a5274a68e07beae9b48",
"text": "If you mean the internal rate of return, then the quarterly rate of return which would make the net present value of these cash flows to be zero is 8.0535% (found by goal seek in Excel), or an equivalent compound annual rate of 36.3186% p.a. The net present value of the cash flows is: 10,000 + 4,000/(1+r) - 2,000/(1+r)^2 - 15,125/(1+r)^3, where r is the quarterly rate. If instead you mean Modified Dietz return, then the net gain over the period is: End value - start value - net flow = 15,125 - 10,000 - (4,000 - 2,000) = 3,125 The weighted average capital invested over the period is: 1 x 10,000 + 2/3 x 4,000 - 1/3 x 2,000 = 12,000 so the Modified Dietz return is 3,125 / 12,000 = 26.0417%, or 1.260417^(1/3)-1 = 8.0201% per quarter, or an equivalent compound annual rate of 1.260417^(4/3)-1 = 36.1504%. You are using an inappropriate formula, because we know for a fact that the flows take place at the beginning/end of the period. Instead, you should be combining the returns for the quarters (which have in fact been provided in the question). To calculate this, first calculate the growth factor over each quarter, then link them geometrically to get the overall growth factor. Subtracting 1 gives you the overall return for the 3-quarter period. Then convert the result to a quarterly rate of return. Growth factor in 2012 Q4 is 11,000/10,000 = 1.1 Growth factor in 2013 Q1 is 15,750/15,000 = 1.05 Growth factor in 2013 Q2 is 15,125/13,750 = 1.1 Overall growth factor is 1.1 x 1.05 x 1.1 = 1.2705 Return for the whole period is 27.05% Quarterly rate of return is 1.2705^(1/3)-1 = 8.3074% Equivalent annual rate of return is 1.2705^(4/3)-1 = 37.6046% ========= I'd recommend you to refer to Wikipedia.",
"title": ""
},
{
"docid": "efc0e864bbf6af6afaa295022d4b712f",
"text": "Illustrating with a shorter example: Suppose I deposit 1,000 USD. Every year I deposit another 100 USD. I want to know how much money will be on that savings account in 4 years. The long-hand calculation is Expressed with a summation And using the formula derived from the summation (as shown by DJohnM) So for 20 years Note in year 20 (or year 4 in the shorter example) the final $100 deposit does not have any time to accrue interest before the valuation of the account.",
"title": ""
},
{
"docid": "e21331efcf4b1348c1afe3ad08025a41",
"text": "\"When you're calculating the cash flows used to compute an IRR, with regard to the expenses used to calculate those cash flows: Do you assume that expenses are going to be higher than they would be today, by using an assumed inflation rate? Or is everything (all cash flows) assumed to be in today's dollars, and you account for inflation's effect on your actual returns at \"\"the end\"\" by subtracting off the inflation rate from the IRR?\"",
"title": ""
},
{
"docid": "4cbc08ca586bb6481b02839029c3f7d0",
"text": "What you are looking here is the cost of capital, because that is what you are effectively giving up in order to invest in those loans. In a discounted cash-flow, it would be the *i* in the denominator (1+*i*). For instance, instead of purchasing those loans you could have lent your money at the risk-free rate (not 100% true, but typical assumption), and therefore you are taking a slight risk in those loans for a higher return. There are several ways to compute that number, the one most often used would be the rate if the bank were to lend that money. In this way, it would be the Fed Funds rate plus some additional risk premium.",
"title": ""
},
{
"docid": "abdd072491ef76018f5ae6da88ba5c38",
"text": "The solution is x = 8.92. This assumes that Chuck's six years of deposits start from today, so that the first deposit accumulates 10 years of gain, i.e. 20*(1 + 0.1)^10. The second deposit gains nine years' interest: 20*(1 + 0.1)^9 and so on ... If you want to do this calculation using the formula for an annuity due, i.e. http://www.financeformulas.net/Future-Value-of-Annuity-Due.html where (formula by induction) you have to bear in mind this is for the whole time span (k = 1 to n), so for just the first six years you need to calculate for all ten years then subtract another annuity calculation for the last four years. So the full calculation is: As you can see it's not very neat, because the standard formula is for a whole time span. You could make it a little tidier by using a formula for k = m to n instead, i.e. So the calculation becomes which can be done with simple arithmetic (and doesn't actually need a solver).",
"title": ""
},
{
"docid": "1169f9db654b7e89de8d8bc0a26b24e1",
"text": "The preparation for starting up of the company has lasted already more than 2 years. Let's say the company starts officially in January next year. So, in January 2014... 8 million USD is invested to purchase the equipments and the company will start selling their prdocuts right away. Imagine the company will be selling the same amount of products each year at the same price for 5 years. After 5 years it will sell the equipments for 6 million USD and cease to exist. The depreciation of equipments is divided into those 5 years. So, each year the depreciation of equipments is 400.000 USD. In despite of this, the company will make 500.000 USD per year as a profit before tax. So, the equipments are bought in Januardy 2014 (first month of the existence of the company) and sold in December 2018 (last month of the existence of the company). This is the NPV that I calculated. Is it correct?",
"title": ""
},
{
"docid": "11bf7e54ddc4e7c2844243fea04bbcb9",
"text": "I feel like IRR is the tool you want to use for this, then you can look at your output and determine if it's higher than what your discount rate is likely to be. Similarly, you can just do a traditional NPV analysis and then examine the sensitivity by changing the discount rate. If you're safely in profitable territory then you're probably fine despite not knowing the discount rate.",
"title": ""
},
{
"docid": "d8467aae09feacb8c5a1c9b2663bd24e",
"text": "The MWRR that you showed in your post is calculated incorrectly. The formula that you use... ($15,750 - $15,000 - $4,000) / ($15,000 + 0.5 x $4,000) Translates into a form of the DIETZ formula of (EMV-BMV-C)/(BMV + .5 x C) The BMV is the STARTING balance. And as a matter of fact, the starting balance was NOT 15,000. It was IN FACT 11,000. See, the starting value for a month MUST BE the ending value of the prior month. So the BMV of 11,000 would give you the correct answer. Because if you added 4,000 at the start of the month (on day 1), it would have to have been ADDED to the 11,000 of the PRIOR month's ENDING value. Make sense? That would also mean that the addition of 4000 to the 11000 would imply that you started day 1 with 11,000. Make sense? Summary: When doing the calculations, you may use the ending value on the last day of the month to get your EMV. BUT YOU MAY NOT take the ending value on day 1 to get the BMV. That simply can not make sense since you already added a bunch of money during the day. Think about it. Davie",
"title": ""
},
{
"docid": "134a2b54f8d2ddefd07691afbcb16bc6",
"text": "The short answer is that you would want to use the net inflow or net outflow, aka profit or loss. In my experience, you've got a couple different uses for IRR and that may be driving the confusion. Pretty much the same formula, but just coming at it from different angles. Thinking about a stock or mutual fund investment, you could project a scenario with an up-front investment (net outflow) in the first period and then positive returns (dividends, then final sale proceeds, each a net inflow) in subsequent periods. This is a model that more closely follows some of the logic you laid out. Thinking about a business project or investment, you tend to see more complicated and less smooth cashflows. For example, you may have a large up-front capital expenditure in the first period, then have net profit (revenue less ongoing maintenance expense), then another large capital outlay, and so on. In both cases you would want to base your analysis on the net inflow or net outflow in each period. It just depends on the complexity of the cashflows trend as to whether you see a straightforward example (initial payment, then ongoing net inflows), or a less straightforward example with both inflows and outflows. One other thing to note - you would only want to include those costs that are applicable to the project. So you would not want to include the cost of overhead that would exist even if you did not undertake the project.",
"title": ""
}
] |
fiqa
|
09c55ceb3e3155bf91987625da123c0a
|
Foreign currency conversion for international visitors to ecommerce web site?
|
[
{
"docid": "bd7f2b503ced211bf1dc76b6d304183f",
"text": "Central banks don't generally post exchange rates with other currencies, as they are not determined by central banks but by the currency markets. You need a source for live exchange rate data (for example www.xe.com), and you need to calculate the prices in other currencies dynamically as they are displayed -- they will be changing continually, from minute to minute.",
"title": ""
},
{
"docid": "db751b9cc469f547550a323044b23d8e",
"text": "For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction.",
"title": ""
},
{
"docid": "47b1fe6ea3938c0a89565d110d6fdfd8",
"text": "You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers. If you Google currency converter the first result is just that: a currency converter.",
"title": ""
}
] |
[
{
"docid": "ff8c228fa00407ba410e26d425901054",
"text": "\"For the purposes of report generation, I would recommend that you present the data in the currency of the user's home country. You could present another indicator, if needed, to indicate that a specific transaction was denominated in a foreign currency, where the amount represents the value of the foreign-denominated transaction in the user's home country Currency. For example: Airfare from USA to London: $1,000.00 Taxi from airport to hotel: $100.00 (in £) In terms of your database design, I would recommend not storing the data in any one denomination or reference currency. This would require you to do many more conversions between currencies that is likely to be necessary, and will create additional complexity where in some cases, you will need to do multiple conversions per transaction in and out of your reference currency. I think it will be easier for you to store multiple currencies as themselves, and not in a separate reference currency. I would recommend storing several pieces of information separately for each transaction: This way, you can create a calculated Amount for each transaction that is not in the user's \"\"home\"\" currency, whereas you would need to calculate this for all transactions if you used a universal reference currency. You could also get data from an external source if the user has forgotten the conversion rate. Remember that there are always fees and variations in the exchange rate that a user will get for their home country's currency, even if they change money at the same place at two different times on the same day. As a result, I would recommend building in a simple form that allows a user to enter how much they exchanged and how much they got back to calculate the exchange rate. So for example, let's say I have $ 200.00 USD and I exchanged $ 100.00 USD for £ 60.00, and there was a £ 3.00 fee for the exchange. The exchange rate would be 0.6, and when the user enters a currency conversion, your site could create three separate transactions such as: USD Converted to £: $100.00 £ Received from Exchange: £ 60.00 Exchange Fee: £ 3.00 So if the user exchanged currency and then ran a balance report by Currency, you could either show them that they now have $ 100.00 USD and £ 57.00, or you could alternatively choose to show the £ 57.00 that they have as $95.00 USD instead. If you were showing them a transaction report, you could also show the fee denominated in dollars as well. I would recommend storing your balances and transactions in their own currencies, as you will run into some very interesting problems otherwise. For example, let's say you used a reference currency tied to the dollar. So one day I exchange $ 100.00 USD for £ 60.00. In this system I would still have 100 of my reference currency. However, if the next day, the exchange rate falls and $ 1.00 USD is only worth £ 0.55, and I change my £ 60.00 back into USD, I will get approxiamately $ 109.09 USD back for my £ 60.00. If I then go and buy something for $ 100.00 USD, the balance of the reference currency would be at 0, but I will still have $ 9.09 USD in my pocket as a result of the fluctuating currency values! That is why I'd recommend storing currencies as themselves, and only showing them in another currency for convenience using calculations done \"\"on the fly\"\" at report runtime. Best of luck with your site!\"",
"title": ""
},
{
"docid": "7c5e4cc3f975021d306cac2f5730af64",
"text": "It's very simple. Use USDSGD. Here's why: Presenting profits/losses in other currencies or denominations can be useful if you want to sketch out the profit/loss you made due to foreign currency exposure but depending on the audience of your app this may sometimes confuse people (like yourself).",
"title": ""
},
{
"docid": "84f9ed475e99f6abf8d39d2368a0b62c",
"text": "\"Does some official tell the Foreign Exchange the the new exchange rate for the yuan is 0.98 * the current exchange rate? For China (and other countries with fixed/controlled exchange rates) - that's exactly how it happens. Does it just print more? This is the way to go for fully convertible currencies (like the USD, EUR, GBP, and handful of others, there're about 20 in the world). Flood the market and as with any commodity - flooding the market leads to a price drop. Obviously \"\"just print more\"\" is much harder to do than picking up the phone and saying \"\"Now you're buying/selling dollars at this price and if you don't I'll have you executed\"\".\"",
"title": ""
},
{
"docid": "bc6e266b59ecc292bde5266b4226db53",
"text": "\"The solution I've come up with is to keep income in CAD, and Accounts Receivable in USD. Every time I post an invoice it prompts for the exchange rate. I don't know if this is \"\"correct\"\" but it seems to be preserving all of the information about the transactions and it makes sense to me. I'm a programmer, not an accountant though so I'd still appreciate an answer from someone more familiar with this topic.\"",
"title": ""
},
{
"docid": "67fe623c1bd326a05f16c1beb2e452db",
"text": "In the EU prices on consumer-focussed sites* are quoted inclusive of VAT. In the USA prices are quoted exclusive of sales tax. Consumer pricing is usually driven at least partly by psychological concerns. Some pricepoints are more appealing to certain types of buyers than others. The Euro vs dollar exchange rate has fluctuated a bit over the years but it's generally averaged somewhere around 1.2 dollars per Euro over the last decade. VAT has varied around 15%-20% in most cases. Put these things together and the same headline price points are generally appropriate in both the USA and the Eurozone. OTOH the Brisith pound has been worth substantially more than the dollar or the Euro. So it makes sense to have a lower headline price in the UK. * B2B focussed sites often quote prices exclusive of VAT, you need to be aware of this when comparing prices.",
"title": ""
},
{
"docid": "d55d842e506aca1a0bab26aac7e5778a",
"text": "Cross-listing shouldn't be an issue, as the sole reason stocks would behave differently on different exchanges would be due to exchange rates (sure, noise and time differences, but weekly data should take care most of that). If you're using MSCI World index figures in USD, you either have to convert stocks denominated in other currencies to USD at their historical fx rates, or just save a lot of time and use data from stocks listed in the US, when available.",
"title": ""
},
{
"docid": "ccef86861b5918e8ad02925f6b4ea9c4",
"text": "Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure. But this doesn't matter. All the central service can tell you is how much the rate was historically. But the banks/PayPal don't care about the historical value. They want to know the price that they'll pay when they get around to switching, not the last price before the switch. Beyond that, there is a transaction cost to switching. They have to pay the clearinghouse for managing the transaction. The banks can choose to act as a clearinghouse, but that increases their risk. If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost. They'll only take that risk if they think that they'll make more money that way. And in the end, they may have to go on the currency market anyway. If a European bank runs out of US dollars, they have to buy them on the open market. Or a US bank might run out of Euros. Or Yen. Etc. Another problem is that many of the currency transactions are small, but the overhead is fixed. If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction. So they delay the actual transaction so that they can make more than one at a time. But then they have the risk that the currency value might change in the meantime. If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1. They could do it the other way as well. You ask for a $100 transaction. They perform a $1000 transaction, of which they give you $97. Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction). If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees). This is why banks have money market accounts. So they have someone to manage these problems working twenty-four hours a day. But then they have to pay interest on those accounts, further eating into their profits. Along with paying a staff to monitor the currency markets and things that may affect them.",
"title": ""
},
{
"docid": "5fce550f56f3a412fa76cafacb45bd6a",
"text": "Take a look at Google Checkout but keep in mind that there is a different list of countries that they support as sellers vs. buyers. The buyer list is much more comprehensive, and I believe covers CIS (Russia, Ukraine and Belarus) while the seller list does not (yet) which means that your client will need to create a U.S. or U.K. based entity to accept payments, however they will be able to accept payments from buyers both in CIS and internationally. Удачи.",
"title": ""
},
{
"docid": "b0eea496577f21e08aba1c08f0120db3",
"text": "\"I've been doing a bunch of Googling and reading since I first posed this question on travel.SE and I've found an article on a site called \"\"thefinancebuff.com\"\" with a very good comparison of costs as of September 2013: Get the Best Exchange Rate: Bank Wire, Xoom, XE Trade, Western Union, USForex, CurrencyFair by Harry Sit It compares the following methods: Their examples are for sending US$10,000 from the US to Canada and converting to Canadian dollars. CurrencyFair worked out the cheapest.\"",
"title": ""
},
{
"docid": "8def29393e303b6be727289894f80600",
"text": "\"FYI, just found this (https://www.paypal.com/webapps/mpp/ua/useragreement-full#8) \"\"8.9 Currency Conversion Currency Conversion 2.5% added to the exchange rate The Currency Conversion spread applies whenever a currency conversion is required to complete your transaction. The exchange rate is determined by a financial institution and is adjusted regularly based on market conditions. Adjustments may be applied immediately and without notice to you. When your payment is funded by a debit or credit card and requires a currency conversion, you consent to and authorize PayPal to convert the currency in place of your debit or credit card issuer. You have the right to have your card issuer perform the currency conversion and can choose this option during checkout on your transaction review page before you complete the transaction.\"\" 2.5%!! Can this be true?\"",
"title": ""
},
{
"docid": "9502308b68e5cffb5c3f0fbd260caeb6",
"text": "Chinese suppliers can quote their price in CNY rather than USD (as has been typical), and thus avoid the exchange risk from US dollar volatility- the CNY has been generally appreciating so committing to receive payments in US dollars when their costs are in CNY means they are typically on the losing end of the equation and they have to pad their prices a bit. Canadian importers will have to buy RMB (typically with CAD) to pay for their orders and Canadian exporters can take payment in RMB if they wish, or set prices in CAD. By avoiding the US dollar middleman the transactions are made less risky and incur less costs. Japan did this many decades ago (they, too, used to price their products in USD). This is important in transactions of large amounts, not so much for the tiny amounts associated with tourism. Two-way annual trade between China and Canada is in excess of $70bn. Of course Forex trading may greatly exceed the actual amounts required for trade- the world Forex market is at least an order of magnitude greater than size of real international trade. All that trading in currency and financial instruments means more jobs on Bay Street and more money flowing into a very vital part of the Canadian economy. Recent article from the (liberal) Toronto Star here.",
"title": ""
},
{
"docid": "3f556ec1a4b3445c80dd443fbfc037af",
"text": "I prefer to use a Foreign Exchange transfer service. You will get a good exchange rate (better than from Paypal or from your bank) and it is possible to set it up with no transfer fees on both ends. You can use an ACH transfer from your US bank account to the FX's bank account and then a SEPA transfer in Europe to get the funds into your bank account. Transfers can also go in the opposite direction (Europe to USA). I've used XE's service (www.xe.com) and US Forex's service (www.usforex.com). Transferwise (www.transferwise.com) is another popular service. US Forex's service calls you to confirm each transfer. They also charge a $5 fee on transfers under $1000. XE's service is more convenient: they do not charge fees for small transfers and do not call you to confirm the tramsfer. However, they will not let you set up a free ACH transfer from US bank accounts if you set up your XE account outside the US. In both cases, the transfer takes a few business days to complete. EDIT: In my recent (Summer 2015) experience, US Forex has offered slightly better rates than XE. I've also checked out Transferwise, and for transfers from the US it seems to be a bit of a gimmick with a fee added late in the process. For reference, I just got quotes from the three sites for converting 5000 USD to EUR:",
"title": ""
},
{
"docid": "40853e4dfaf1a2a3ce25732cd544dd0a",
"text": "While in the UK and travelling to Europe, I heard of the FairFX euro card from the website Money Supermarket (affiliate link which waives the sign-up fee). The link also includes many other alternative prepaid euro cards which may be better suited for your uses. The FairFX card is available in both GBP and EUR, and both products come with chip and pin. They also charge relatively little as compared to most bank cards (no currency conversion on use, $2~ withdrawal charges from ATM). I generally had a good experience with this card, and was able to purchase items both in person as well as online using it.",
"title": ""
},
{
"docid": "bf9423b9d4b925b1d38d1d09b0f2d4a8",
"text": "\"My solution when I lived in Singapore was to open an account with HSBC, who at the time also had branches in the US. When I was home, I used the same debit card, and the bank only charged a nominal currency exchange fee (since it never had to leave their system, it was lower than had it left their system). Another option, though slightly more costly, is to use Paypal. A third option is to cash-out in CAD and convert to USD at a \"\"large\"\" institution - the larger your deposit/conversion balance, the better the rate you can get. To the best of my knowledge, this shouldn't be taxable - presuming you've paid the taxes on it to start with, and you've been filing your IRS returns every year you've been in Canada.\"",
"title": ""
},
{
"docid": "af84ae777b49e1156576a487ed32528f",
"text": "Taxing citizens on global income caused by tax inversion, not the cause of tax inversion. If yourwebsite.com makes $1mil, and you pay yourwebsite.ca $1m for rights to the name, that's inversion. Your company, and you, as the owner, have $1m income in Canada. All of which came from US revenue. I'm not saying the tax system is great or anything. There just seems to be a miss understanding.",
"title": ""
}
] |
fiqa
|
ae9df64c9730f2dfb79a837856d2a7a9
|
As a sole proprietor can I charge a fee for being paid by check or card
|
[
{
"docid": "c3fa555bca610e8c71be7f6113e6bf0e",
"text": "\"You can charge a fee to accept checks, although I think the better solution might be to offer a small discount for early payment of your invoices. As some people here have suggested, why not add a small bit to your fees to begin with to cover your inconvenience in the case they choose to pay by check? I often will give clients a small discount of 1.5% for paying my invoices within 10 days, which does motivate some to pay sooner, depending on the client and the amount of the invoice. If you've already added a small amount to your fees in the first place then providing the discount is good public relations that doesn't actually cost you anything. You can always add a \"\"convenience fee\"\" for accepting checks, but this is a more negative approach, as though you're penalizing the client for paying by check rather than electronically. Some people do see it this way, despite any efforts you make to explain otherwise. As to your question about adding fees for accepting credit cards, be very careful! There are sometimes state or local laws on this, and you could find yourself in trouble very quickly if you run afoul of one. Here's a good article to read on the subject: Adding fees for accepting credit cards from CreditCards.com Site I hope this is helpful. Good luck!\"",
"title": ""
}
] |
[
{
"docid": "75923e7b98826c603a28f39e0c475517",
"text": "There are legitimate reasons: I wouldn't jump the gun and assume that this person is avoiding taxes, etc. Barbers are usually licensed professions. Since it's generally a cash business, they tend to get audited more often by the tax authorities. That said, I wouldn't pay her with a check -- you have no idea who is actually cashing the check, and you could run into issues with unknown third parties misusing your account information.",
"title": ""
},
{
"docid": "a682f2cbbdf005cda229bd17b4176713",
"text": "Etiquette doesn't really come into the picture here. The business offers a service and I choose to accept it. Personally, I use my debit card as much as possible. For every transaction, I record it in my checkbook. Then, when I do reconciling, I know exactly how much I paid for various categories of stuff. Good for budgeting. Most often my purchases are over $10 but when they aren't, I have no qualms about using the card.",
"title": ""
},
{
"docid": "a7e80a491ca2b9845cca45332bc34640",
"text": "\"If you sign the check \"\"For Deposit Only\"\", the bank will put it in your account. You may need to set up a \"\"payable name\"\" on the account matching your DBA alias. However, having counted offerings for a church on several occasions, I know that banks simply have no choice but to be lax about the \"\"Pay to the Order Of\"\" line on checks. Say the church's \"\"legal name\"\" for which the operating funds account was opened is \"\"Saint Barnabas Episcopal Church of Red Bluff\"\". You'll get offering checks made out to \"\"Saint Barnabas\"\", \"\"Saint B's\"\", \"\"Episcopal Church of Red Bluff\"\", \"\"Red Bluff Episcopal\"\", \"\"Youth Group Fund\"\", \"\"Pastor Frank\"\", etc. The bank will take em all; just gotta stamp em with the endorsement for the church. Sometimes the money will be \"\"earmarked\"\" based on the payable line; any attempt to pay the pastor directly will go into his \"\"discretionary fund\"\", and anything payable to a specific subgroup of the church will go into their asset account line, but really all the cash goes directly to the same bank account anyway. For-profit operations are similar; an apartment complex may get checks payable to the apartment name, the management company name, even the landlord. I expect that your freelance work will be no different.\"",
"title": ""
},
{
"docid": "ea18b2178b61681cabef1170f46629e9",
"text": "Some banks charge their own customers if they make use of a teller. That is what you are doing. You are going to a bank where you are not a customer and requesting a transaction that requires a teller. If you cash the check by going though your bank, the issuer's bank only handles it as a non-teller transaction.",
"title": ""
},
{
"docid": "acd13ed628496354fa8b601a28ac4b2d",
"text": "As a new (very!) small business, the IRS has lots of advice and information for you. Start at https://www.irs.gov/businesses/small-businesses-self-employed and be sure you have several pots of coffee or other appropriate aid against somnolence. By default a single-member LLC is 'disregarded' for tax purposes (at least for Federal, and generally states follow Federal although I don't know Mass. specifically), although it does have other effects. If you go this route you simply include the business income and expenses on Schedule C as part of your individual return on 1040, and the net SE income is included along with your other income (if any) in computing your tax. TurboTax or similar software should handle this for you, although you may need a premium version that costs a little more. You can 'elect' to have the LLC taxed as a corporation by filing form 8832, see https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc . In principle you are supposed to do this when the entity is 'formed', but in practice AIUI if you do it by the end of the year they won't care at all, and if you do it after the end of the year but before or with your first affected return you qualify for automatic 'relief'. However, deciding how to divide the business income/profits into 'reasonable pay' to yourself versus 'dividends' is more complicated, and filling out corporation tax returns in addition to your individual return (which is still required) is more work, in addition to the work and cost of filing and reporting the LLC itself to your state of choice. Unless/until you make something like $50k-100k a year this probably isn't worth it. 1099 Reporting. Stripe qualifies as a 'payment network' and under a recent law payment networks must annually report to IRS (and copy to you) on form 1099-K if your account exceeds certain thresholds; see https://support.stripe.com/questions/will-i-receive-a-1099-k-and-what-do-i-do-with-it . Note you are still legally required to report and pay tax on your SE income even if you aren't covered by 1099-K (or other) reporting. Self-employment tax. As a self-employed person (if the LLC is disregarded) you have to pay 'SE' tax that is effectively equivalent to the 'FICA' taxes that would be paid by your employer and you as an employee combined. This is 12.4% for Social Security unless/until your total earned income exceeds a cap (for 2017 $127,200, adjusted yearly for inflation), and 2.9% for Medicare with no limit (plus 'Additional Medicare' tax if you exceed a higher threshold and it isn't 'repealed and replaced'). If the LLC elects corporation status it has to pay you reasonable wages for your services, and withhold+pay FICA on those wages like any other employer. Estimated payments. You are required to pay most of your individual income tax, and SE tax if applicable, during the year (generally 90% of your tax or your tax minus $1,000 whichever is less). Most wage-earners don't notice this because it happens automatically through payroll withholding, but as self-employed you are responsible for making sufficient and timely estimated payments, and will owe a penalty if you don't. However, since this is your first year you may have a 'safe harbor'; if you also have income from an employer (reported on W-2, with withholding) and that withholding is sufficent to pay last year's tax, then you are exempt from the 'underpayment' penalty for this year. If you elect corporation status then the corporation (which is really just you) must always make timely payments of withheld amounts, according to one of several different schedules that may apply depending on the amounts; I believe it also must make estimated payments for its own liability, if any, but I'm not familiar with that part.",
"title": ""
},
{
"docid": "3c240eb80447171c476c7943200e8042",
"text": "One possibility that I use: I set up an LLC and get paid through that entity. Then I set up a payroll service through Bank of America and set up direct deposit so that it is free. I pay myself at 70% of my hourly rate based on the number of hours I work, and the payroll service does all the calculations for me and sets up the payments to the IRS. Typically money is left over in my business account. When tax time rolls around, I have a W2 from my LLC and a 1099 from the company I work for. I put the W2 into my personal income, and for the business I enter the revenue on the 1099 and the payroll expenses from paying myself; the left over in the business account is taxed as ordinary income. Maybe it's overkill, but setting up the LLC makes it possible to (a) set up a solo 401(k) and put up to $51k away tax-free, and (b) I can write off business expenses more easily.",
"title": ""
},
{
"docid": "06fd20bef0c8c90a7bd03c63416a8f8e",
"text": "They sure can. They are two different legal entities, so why not? You can even write a check to yourself, and then deposit it back into your own account. (Not very useful, but you can). The tax implications are a very different question, as this might constitute taking money out of the company. Edit: In some countries, when the business hires someone to work for them, it is forbidden by law to do that, unless he/she is explicitly allowed to do it in his contract. The business owner himself however, can always 'allow' himself to do that.",
"title": ""
},
{
"docid": "652bfcc11a6d2b4f91435b4c8ab97692",
"text": "Try to get a second card in your business' name, with a separate card number (like you would get one for a spouse). They may or may not allow that free (you wouldn't want to pay a second fee), and it might be only possible with the second card bearing the same number, which makes it useless. But it is worth a try.",
"title": ""
},
{
"docid": "4aa33a503e0a58c2362514f8e47c9658",
"text": "\"Anytime you do work without any payment until the work is complete, you are effectively extending credit to the party receiving your service. How much credit you are willing to extend will vary greatly, depending on the amount and the trustworthiness of the party. For example, if you are charging $50 for something, you probably won't bother to collect money upfront, whereas if you are charging $5,000 you probably would collect some upfront. But if the party you are working for is a large financially sound company, the number may be even much higher than $5K as you can trust you will be paid. Obviously there are many factors that go into how much credit you are willing to extend to your customer. (This is why credit reports exist for banks to determine how much credit to extend to you.) As for the specific case you are asking about, which may be classified as a decent amount of work for a small business, I would default to having a written scope of work, a place in the document for both parties to sign, and specify 50% upfront payment and 50% payment at completion. When you receive the signed document and the upfront payment (and possibly even after the check clears), you begin work. I would call this my \"\"default contract\"\" and adjust according to your needs depending on the size of the job and the trustworthiness of the customer. As for your question about how to deposit the check, that depends on what type of entity you are. If you are a sole proprietor you should ask for the checks to be made out to you. If you are a business then the checks should be made out to your business name. You don't need \"\"in trust\"\" or anything similar because your customer, after paying the upfront fee, must trust that you will do the work you promise to do, just like you have to trust that after completing the work you will receive the final payment. This is the reason the default is 50% before and after. Both parties are risking (roughly) the same amount. Tip: having done the \"\"default\"\" contract many times in my career, both as a sole proprietor and a business owner, I can assure you there is a big difference between a potential customer agreeing to something in advance, and actually writing a check. The upfront payment definitely helps weed out those that were never going to end up paying you, even if their intentions were good. Tip 2: be as specific as possible as to what the scope of work will include. If you don't, particularly with software, they'll be adding feature after feature and expecting it to be \"\"included\"\".\"",
"title": ""
},
{
"docid": "e79cb0a1343e02bdad3b677cdcae9825",
"text": "This kind of questions keeps repeating itself on this site and the answer is generally it doesn't matter. As you said yourself, there are costs either way, and these costs are comparable. Generally, merchant fees differ tremendously between the different kinds of merchants, and while gas stations and video rentals may pay up to 5% and even more, charitable organizations and community services are usually not considered as high fraud risk operation and are charged much lower fees. Either way, paying employees, managing cash/check deposits or paying merchant fees is part of the charity operational expenses. Together with maintaining offices, postal office boxes, office supplies, postage expenses and formal stationary and envelopes needed for physical donations handling. I would guess that if the charity's majority of donations come on-line as credit card/paypal payments - check handling will be more expensive. So I suggest you take the route you consider majority of donors pay - that would be the cheapest for them to handle. I would guess, credit cards being the most convenient - would be the way to go.",
"title": ""
},
{
"docid": "50d712e4318ff47ff4c92c5ddf4fa22d",
"text": "I'm not certain I understand what you're trying to do, but it sounds like you're trying to create a business expense for paying off your personal debt. If so - you cannot do that. It will constitute a tax fraud, and if you have additional partners in the LLC other than you and your spouse - it may also become an embezzlement issue. Re your edits: Or for example, can you create a tuition assistance program within your company and pay yourself out of that for the purposes of student loan money. Explicitly forbidden. Tuition assistance program cannot pay more than 5% of its benefits to owners. See IRS pub 15-B. You would think that if there was a way to just incorporate and make your debts pre-tax - everyone would be doing it, wouldn't you?",
"title": ""
},
{
"docid": "515b690eacac5ea7e087bd7b424aa6b3",
"text": "I agree. Billing by the hour for a sole-proprietorship is the exception, not the norm. You either usually sell a product for a fixed price or provide a service via contract for a total sum. That and the term 'sole proprietorship' doesn't preclude you from having thousand of employees working for you.",
"title": ""
},
{
"docid": "7b171a55ca69f689ee46c4199f8dc686",
"text": "If thinking about it like a business you normally only pay taxes on Net income, not gross. So Gross being all the money that comes in. People giving you cash, checks, whatever get deposited into your account. You then pay that out to other people for services, advertisement. At the end of the day what is left would be your 'profit' and you would be expected to pay income tax on that. If you are just an individual and don't have an LLC set up or any business structure you would usually just have an extra page to fill out on your taxes with this info. I think it's a schedule C but not 100%",
"title": ""
},
{
"docid": "32637ccc9962c2adcab62d05df912a25",
"text": "The short answer is you are not required to. The longer answer depends on whether you are referring to your organization as a sole proprietorship in your state, or for federal taxation. For federal tax purposes, I would suggest filing each side job as a separate Sch C though. The IRS uses the information you provide about your sole proprietorship to determine whether or not your categorization of expenses makes sense for the type of business you are. This information is used by the IRS to help them determine who to audit. So, if you are a service based business, but you are reporting cost of goods sold, you are likely to be audited.",
"title": ""
},
{
"docid": "dce5d31a24c17381a5b1743e3e00d529",
"text": "I gather that, while it is not illegal for a merchant to pass their payment card processing fees on to their customers directly in the form of a surcharge, doing so is a violation of their merchant agreements with the payment card processor (at least for Visa/MC). It's not - surcharging has been permissible since 2013, as a result of a class action lawsuit against Visa and MC. It's still prohibited by state law in 9 states. If you're in one of those 9 states, you can contact your state Attorney General to report it. If you're not, you can check to see if the business is complying with the rules set forth by the card brands (which include signage at the point of sale, a separate line item for the surcharge on the receipt, a surcharge that doesn't exceed 4% of the transaction, etc.) and if they're in violation, contact the card company. However, some of those rules seem to matter to the card companies more than others, and it's entirely possible they won't do anything. In which case, there's nothing you can really do.",
"title": ""
}
] |
fiqa
|
6040051dfba5128a8d0448de85922814
|
Equity or alternative compensation in an LLC?
|
[
{
"docid": "28a548b853776d6e465185cd77a0edb2",
"text": "I'm not sure 1099-MISC is what you should expect. Equity means ownership, and in LLC context it means membership. As an LLC member, you'll get distributions and should receive a K-1 form for tax treatment, not 1099 or W2. If the CEO is talking about 1099 it means he's going to hire you as a contractor which contradicts the statement about equity allocation. That's an entirely different situation. 1) Specifically, would the 1099-MISC form be used in this case? 1099-MISC is used to describe various payments. Depending on which box is filled, the tax treatment may be as of employment income (subject to SE taxes) or passive income (royalties, rents, etc - subject to various limitations in the tax code). 3) If this is the only logical method of compensation (receiving a % of real estate sales), how would it be taxed? That would probably be a commission and taxed as employment income. I suggest to get a professional tax adviser consultation on this issue, with specific details, numbers, and kinds of deals involved. You can get gain or lose a lot of money just because you're characterized as a contractor and not LLC member or employee (each has its own benefits and disadvantages, and you have to consider them all). 4) Are there any advantages/disadvantages to acquiring and selling properties through the company as opposed to receiving a % of sales? Yes. There are advantages and there are disadvantages. For example, if you're using a corporation, you can get salary, if you're a contractor you cannot. There are a lot of issues hidden in this distinction (which I've just discussed with KeithS in this argument).",
"title": ""
}
] |
[
{
"docid": "3d718680b0cd151f64d4cb4d777842e0",
"text": "\"Oh, I understand now -- we're having an absurd, meaningless conversation about an obscure theoretical point. When you can tell me how you can determine a \"\"minimum cash\"\" level from a public company's filings, we can continue the discussion. Otherwise, make a simplifying assumption and move on. I misunderstood -- I thought we were actually trying to understand the difference between enterprise value and equity value / understand the implication of an enterprise value multiple.\"",
"title": ""
},
{
"docid": "b33577499acb3264d1dc538082acaa9f",
"text": "\"IANAL, but if you're planning to sell shares in your LLC you may be disappointed in the protection granted. I looked into this corporate structure for the same purpose myself, and my attorney said something like, \"\"If an owner of one of the shares of your company is driving to look at one of the properties, and gets into a wreck for which they were found negligent, the injured party can sue the corporation.\"\"\"",
"title": ""
},
{
"docid": "01a8d67d87bc2e887865b146dfa421d3",
"text": "There are some nuances with HCE definition. To answer your questions. It's compensation as defined by the plan. Usually it's gross comp, but it can exclude things like fringe benefits, overtime pay, commissions, bonuses, etc. The compensation test is also a look-back test, meaning that an EE is determined to be an HCE in the current year if their compensation in the previous year was over the limit. I'm not sure how stock options affect this, but I expect they would be counted. Probably have an ESOP plan at that point too which is a whole other can-o-woms. The 5% owner test applies to the current year and also has a one-year look-back period. If at ANY point, even for a day, an employee was more than 5% owner, they are HCE for that year and next. Yes there is a limit. A company may limit the amount of HCE's to the top 20% of employees by pay like Aganju said. They can also disregard employees that may otherwise have been excluded under the plan using statutory exclusions. Example, they can disregard employees under 21 years and with less than 1 year of service. Hahaha, the IRS does not like to concisely define things. You can look here, that's probably as concise as you'll get. Hope this helps!",
"title": ""
},
{
"docid": "36546d11d900062f0daed28ba6f6186a",
"text": "I was merely trying to be helpful - Conceptually, you have dump this idea that something is skewed. It isn't. Firm A sold for $500 (equity value aka purchase price to shareholders) + debt (zero) - cash (50) for 450. Enterprise value is the cash free, debt free sale price. The implied ev multiple is 4.5x on A - that is the answer. The other business sold for a higher multiple of 5x. If you would pile on more cash onto A, the purchase price would increase, but the EV wouldn't. The idea is to think hard about the difference between equity value and enterprise value when examining a transaction.",
"title": ""
},
{
"docid": "a1931fcfb31aace0fe69344184134370",
"text": "\"Simply paying him back the 50K to reduce \"\"his equity\"\" back to 30% doesn't necessarily mean that he still doesn't have a higher liq pref upon a liquidation event. You don't need the legal language to know...I deal with term sheets all the time, I don't deal in the legal language, we cut the deal with the term sheet and leave the legal language to the lawyers.\"",
"title": ""
},
{
"docid": "4286585f14be963a8f314ca32f310036",
"text": "\"This is actually quite a complicated issue. I suggest you talk to a properly licensed tax adviser (EA/CPA licensed in your State). Legal advice (from an attorney licensed in your State) is also highly recommended. There are many issues at hand here. Income - both types of entities are pass-through, so \"\"earnings\"\" are taxed the same. However, for S-Corp there's a \"\"reasonable compensation\"\" requirement, so while B and C don't do any \"\"work\"\" they may be required to draw salary as executives/directors (if they act as such). Equity - for S-Corp you cannot have different classes of shares, all are the same. So you cannot have 2 partners contribute money and third to contribute nothing (work is compensated, you'll be getting salary) and all three have the same stake in the company. You can have that with an LLC. Expansion - S-Corp is limited to X shareholders, all of which have to be Americans. Once you get a foreign partner, or more than 100 partners - you automatically become C-Corp whether you want it or not. Investors - it would be very hard for you to find external investors if you're a LLC. There are many more things to consider. Do not make this decision lightly. Fixing things is usually much more expensive than doing them right at the first place.\"",
"title": ""
},
{
"docid": "2fd0badcf019badaaa17e36fff9fa597",
"text": "Pool their money into my own brokerage account and simply split the gains/losses proportional to the amount of money that we've each contributed to the account. I'm wary of this approach due to the tax implications and perhaps other legal issues so I'd appreciate community insight here. You're right to be wary. You might run into gift tax issues, as well as income tax liability and appropriation of earnings. Not a good idea at all. Don't do this. Have them set up their own brokerage account and have them give me the login credentials and I manage the investments for them. This is obviously the best approach from a tracking and tax perspective, but harder for me to manage; to be honest I'm already spending more time than I want to managing my own investments, so option 1 really appeals to me if the drawbacks aren't prohibitive. That would also require you to be a licensed financial adviser, at least to the best of my understanding. Otherwise there's a lot of issues with potential liability (if you make investments that lose money - you might be required to repay the losses). You should do this only with a proper legal and tax advice - from an attorney and/or CPA/EA licensed in your state. There are proper ways to do this (limited partnership or LLC, for example), but you have to cover your ass-ets with proper operating agreements in place that have to be reviewed by legal counsel of each of the members/partners,",
"title": ""
},
{
"docid": "dbc54297aa25d0a851d8421cd7854b7c",
"text": "\"In the Income Statement that you've linked to, look for the line labeled \"\"Net Income\"\". That's followed by a line labeled \"\"Preferred Dividends\"\", which is followed by \"\"Income Available to Common Excl. Extra Items\"\" and \"\"Income Available to Common Incl. Extra Items\"\". Those last two are the ones to look at. The key is that these lines reflect income minus dividends paid to preferred stockholders (of which there are none here), and that's income that's available to ordinary shareholders, i.e., \"\"earnings for the common stock\"\".\"",
"title": ""
},
{
"docid": "0cc9f29299b97f983d66979dc8a38088",
"text": "Are you talking about domicile? An LLC is treated differently than a corporation in the terms of citizenship of the law. An LLC is a citizen of whichever state it's members (shareholders) are citizens. I would recommend you just spend the money on a business attorney to ensure that all the t's are crossed correctly so it doesn't end up costing you more later on.",
"title": ""
},
{
"docid": "7f48d2497330bc421990b575863046a8",
"text": "In accrual accounting, you account for items on the income statement when the service has been delivered - in this case, the service that your employees are providing your company. Because of this, you incur the expense in the fiscal year that your employees work for you. So, you incur the expense, and net income decreases by (1-t)*wage expense. Net income decreases, so owners' equity decreases; to balance you credit wages payable. Once the wages are paid, you decrease the liabilities side (wages payable) and offset it with a Cash change on the assets side.",
"title": ""
},
{
"docid": "0ada391b851e4f03449e58bdfff9259c",
"text": "\"Many thanks for thedetailed response, appreciate it. But I am still not clear on the distinction between a public company and the equity holders. Isn't a public company = shareholders + equity holders? Or do you mean \"\"company\"\" = shareholders+equity holders + debt holders?\"",
"title": ""
},
{
"docid": "3888310130e7db43d4af9b3324cf9def",
"text": "I think I may have figured this out but if someone could double check my reasoning I'd appreciate it. So if my company makes $75000 and I decide to pay myself a $30000 salary, then the quarterly payment break down would be like this: 1040ES: Would pay income tax on non salary dividend ($45000) 941: Would pay income tax, SS, medicare on salary ($30000) (I'm the only person on payroll) So I think this answers my question in that after switching from filing as LLC to S-corp, I won't have to pay as much on 1040ES because some of it will now be covered on payroll.",
"title": ""
},
{
"docid": "4e18de0fd8f9319a9c913d4939e763d4",
"text": "\"It's actually the other way around. Distributions in an LLC are usually based on each member's equity share, although the operating agreement can specify how often such distributions are made. Shareholders in a corporation can receive dividends, but those are determined by the corporation's board and can vary depending on the class of stock each shareholder owns. Preferred-class shareholders, who may hold a smaller overall fraction of the company's outstanding shares than the common stock shareholders, may receive disproportionately larger dividends per share than common stock shareholders, which is one of the (many) reasons that preferred stock is a better choice when it is available. Take, for instance, what Berkshire Class \"\"A\"\" shareholders receive in dividends per year compared to Class \"\"B\"\" shareholders. Here's a good link from LegalZoom that can explain what you're asking about: Explanation of LLC distributions I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "1efec9c5402e5dac2668c94341a54eff",
"text": "The partnership agrees to pay each of you salaries and/or bonuses, typically based on the net profit brought in. You do have a legal document setting out the rules for this partnership, right? If so, the exact answer should be in there. If you don't or it isn't, you need a lawyer yesterday.",
"title": ""
},
{
"docid": "f22a212586d8b23b70bd6ceb830ee793",
"text": "I'm not sure why you think that it matters that the distribution goes to an S-Corp vs an individual tax payer. You seem to think it has any relevance to your question, but it doesn't. It only confuses your readers. The situation is like this: LLC X is deriving income in State #2. It has two members (I and S) residents of State #1. Members I and S pay all their taxes to State #1, and don't pay taxes to State #2. State #2 audited member I and that member now needs to pay back taxes and penalties to State #2 on income derived from that State. Your question: Does that mean that member S should be worried, since that member was essentially doing the exact same thing as member I? My answer: Yes.",
"title": ""
}
] |
fiqa
|
7f095b1e4c99adabd4a0973868d7ac77
|
Why don't banks allow more control over credit/debit card charges?
|
[
{
"docid": "6264d91249767240ea3928379994b2a4",
"text": "quid has expressed some of the disadvantages with this approach, but there is another. Vendors will not want to give you any goods you buy with your credit card until they are sure they will get the money. With your suggested approach buying something with a credit card now looks like: No vendor is going to stand for this for even moderate sized transactions, so in reality they will just decline your card if you have this facility enabled.",
"title": ""
},
{
"docid": "89c0f277d247ae2449b99334616de670",
"text": "Credit card fraud is an extremely (to stress, EXTREMELY) small proportion of total credit card transactions. The card issuing entities all offer zero fraud liability, even on debit cards. There are millions of transactions every day and fraud loss just isn't worth developing, and supporting, an additional authentication layer that faces the consumer. To be clear, the downside is cost. Cost to develop, cost to implement, cost to maintain, cost to support. All of this to stop something that millions of people have yet to even experience.",
"title": ""
},
{
"docid": "ebf5c326cbc4a70370552ce7f4e01986",
"text": "The other answers touch on why having two-factor auth or some other additional system is not worth it compared to simple reactive systems (cancelling lost cards, reversing fraudulent charges etc), but it should also be noted that this goal can be achieved with a method similar to what you describe. My bank (TD Canada Trust) has an app (I'm on android) that gives you a notification immediately after your card is charged (even test charges like at the gas station). It's really simple, does not slow down authorization, and makes fraud detection super easy. (I'm sure some other banks have similar apps).",
"title": ""
},
{
"docid": "37f1468d33edbdf2cc73c45e8868ae69",
"text": "\"Actually in Finland on some bank + debit/credit card + online retailer combinations you type in your card details as you normally do, but after clicking \"\"Buy\"\" you get directed to your own bank's website which asks you to authenticate yourself with online banking credentials. It also displays the amount of money and to which account it is being paid to. After authentication you get directed back to the retailer's website. Cannot say why banks in US haven't implemented this.\"",
"title": ""
},
{
"docid": "17e6cb39363323512e4c56d5b0e5e694",
"text": "Credit cards and debit cards make up the bulk of the transactions in the US. Visa and Mastercard take a percentage of each credit card transaction. For the most part, this fee it built into the price of what you buy. That is, you don't generally pay extra at the grocery store if you use a credit card (gasoline purchases are a notable exception here.) If you were getting something like 2% of a third of all the retail transactions in the US, you'd probably not want to rock the boat too much either. Since there is little fraud relative to the amount of money they are taking in, and it can often be detected using statistical analysis, they don't really stand to gain that much by reducing it through these methods. Sure they can reduce the losses on the insurance they provide to the credit card consumer but they risk slowing down the money machine. These companies want avoid doing something like reducing fraud by 0.5% revenues but causing purchases with the cards drop by 1%. More security will be implemented as we can see with the (slow) introduction of chip cards in the US but only at a pace that will prevent disruption of the money machine. EMV will likely cause a large drop in CC fraud at brick-and-mortar stores but won't stop it online. You will likely see some sort of system like you describe rolled out for that eventually.",
"title": ""
},
{
"docid": "28349274456d5728c148fd4f35165880",
"text": "This is a question with a flawed premise. Credit cards do have two-factor authentication on transactions they consider more at risk to be fraudulent. I've had several times when I bought something relatively expensive and unusual for me, where the CC either initially declined and sent me a text asking to confirm immediately (after which they would approve the charges), or approved but sent me a text right away asking to confirm (after which they'd automatically dispute if I told them to). The first is legitimately what you are asking for; the second is presumably for less risky but still some risk transactions). Ultimately, the reason they don't allow it for every transaction is that not enough people would make use of it to be worth their time to implement it. Particularly given it slows down the transaction significantly (and look at the complaints at the ~10-15 seconds extra EMV authentication takes, imagine that as a minute or more), I think you'd get a single digit percentage of people using that service.",
"title": ""
},
{
"docid": "342a3b88df4846cd1e17381d27005525",
"text": "\"A few years ago I had a US bank credit card that was serviced (all support, website, transaction issues) handled by FIA Card Services (part of Bank of America). I could create one-use credit card numbers, or time-limited (for example, 3 months) numbers. I could also create (\"\"permanent)) extra card numbers. All of these could have a max charge value (IIRC, even a fixed value), so you could have a separate card number, with a limit, just for a subscription service or gym membership. The Bank issuing the card cancelled the entire card offering, so I lost these features. Maybe FIA still provides these features on cards they service. As a note to pjc50 (can't comment in this SE yet), Japan has had contactless cards for >10 years, but during use they tend to place them in a special tray (with the sensor underneath) during the transaction.\"",
"title": ""
}
] |
[
{
"docid": "1f67be3922fa6cb655e9dcc1c0f97932",
"text": "\"The problem is \"\"what would have been\"\" without regulations. A good cause and effect is the Durbin amendment to DFA - they randomly regulated interchange debit card transactions (win for Walmart, loss for banks) so it no longer makes sense to offer free checking to poor people. WMT wins, banking loses, poor people lose. The other issue is maxing out regulations actually makes the system more frail as it promotes consolidation in the sector. Consultants love it - tons of free, easy, no thought work.\"",
"title": ""
},
{
"docid": "6f62ba256f7ca5d4fa51838d7cbfe7d4",
"text": "Because more than a few utility companies have overcharged me in the past, and with online banking they can automatically deduct from my account. With a check I can control how much I pay them. It's much easier to fight a charge when they don't already have your money.",
"title": ""
},
{
"docid": "8ccddb1e176abf05c02c2da0e894e985",
"text": "\"Let's just focus on the \"\"why would a bank need to accept deposits from private clients part\"\" and forget the central bank for a moment. I'm a guy. I have a wife and two kids. They have this pesky habit of wanting to buy stuff. When I get paid, I could just get a check, cash it, stuff it under a mattress, and pull it out when I need it. Hey that worked for a long time didn't it? But sometimes it's nice to write checks. (Just kidding, that's so gauche...) I use my debit card. I use my credit cards, but they need to be paid somehow. My light and phone bills need to be paid too. If only there were someone out there who could facilitate this transfer of money between me, the private client and the merchants I'm forced to spend my money at. Now some of those merchants have plans. Light bills I can pay at my grocer if I choose. But most of the other's don't. Luckily I have a bank that's willing to do this, for a fee. So basically they do it because there's a void in the market if they don't. I don't know if it's true what they say about supply creating its own demand, but it certainly is true that demand creates supply!\"",
"title": ""
},
{
"docid": "25c24377f1738666a0983f2ecea7887a",
"text": "The key is that you need to use your debit card to earn the higher interest rate. The bank can offer a higher interest rate on accounts connected with a debit card because: They earn additional income through debit card fees charged towards account holders, among other things. They offer the higher interest rate specifically to encourage people to use their debit cards. By offering a joint checking/savings account that requires you to use your debit card, the bank is assuming that you'll keep more money in your account than you would in a standard checking-only account. Your higher balance translates into more money the bank can loan out or invest, which usually leads to higher profit for them. Businesses pay fees to the bank to accept debit cards. These fees represent another source of profit for the bank. The more you use your debit card, the more the bank earns in fees, so the bank encourages you to use your debit card more frequently through incentives like a higher interest rate or waiving fees on your account if you use your card enough. Plus, since it's likely that an individual who maintains a fairly high balance in an account linked to a debit card is going to spend more (simply because they can spend more), banks will sometimes waive fees on the consumer side for balances over a certain amount.",
"title": ""
},
{
"docid": "ce7c0d1463f54bb3023002cd4b68a3ca",
"text": "Think about the credit card business model... they have two revenue generators: interest and fees from borrowers and commissions and fees to merchants. The key to a successful credit card is to both sign up lots of borrowers AND lots of merchants. Credit card fortunes have improved dramatically since the 1990's when formerly off-limits merchants like grocery stores began to accept cards. So when a credit card lets you just pull cash out of any ATM, there are a few costs they need to account for when pricing the cost for such a service: Credit card banks have managed to make cash advances both a profit center and a self-serving perk. Knowing that you can always draw upon your credit line for an emergency when cash is necessary makes you less likely to actually carry cash and more likely to just rely on your credit card.",
"title": ""
},
{
"docid": "59c059e2ba0fce0f151b8282b6b3615a",
"text": "It is not only merchants that charge for credit card purchases but also service providers. Have you looked at your phone bill lately and even your Council Rates. Most of them charge a small %, usually about 1% on Matercard and Visa, and closer to 2% on Diners, Amex and American Express cards. However, the merchants and service providers that do charge a fee for credit card use, must also provide alternative ways of paying to their customers, so that the customer has the choice to either pay or avoid paying this fee.",
"title": ""
},
{
"docid": "14f6c5ee4bcdb17b63ff8518e5ff0858",
"text": "Banks need to provide a free mechanism to deposit and withdrawal money. Banks are free to charge fees as long as it is well published. If you are not happy with services you can complain to Banking ombudsman.",
"title": ""
},
{
"docid": "8be60d4f9c2f4fab7b7b8bded259d26a",
"text": "A lot of stores, especially smaller ones, won't accept card payments under $10.00. They pay a fee for taking cards and for small transactions it is not worth it.",
"title": ""
},
{
"docid": "0f2840a9a87b9e94321c55c5533ece66",
"text": "Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example",
"title": ""
},
{
"docid": "a27715be676e47c2c991c5717c23bdfa",
"text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... **There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account:** It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be *more* secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were *made* after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement *after* that window for any charges has expired, - When that final statement is paid (or if it is zero), *THAT* is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"",
"title": ""
},
{
"docid": "88e3db5a06fc91cd46824fafaea23554",
"text": "\"The \"\"hold\"\" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't \"\"holding\"\" your money, your bank or card provider is protecting itself from you overdrawing. In general, it takes 1-3 days for a credit transaction to settle. With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance. I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested.\"",
"title": ""
},
{
"docid": "a01b8d2a8e4e272a5bb2dd7dd7d887e9",
"text": "http://dealbook.nytimes.com/2014/12/13/small-bank-in-kansas-is-a-financial-testing-ground/ Citizens Bank of Weir might allow you to do this, their experimentation in speeding up bank transfers was pushing money over the debit card network.",
"title": ""
},
{
"docid": "ad261ad87455c52975dbca247f47df0e",
"text": "I think the question relates to the discussion here: http://clarkhoward.com/liveweb/shownotes/2010/10/05/19449/ It was always the case that merchants could discount purchases made with cash. What wasn't allowed is allowing the merchant to charge extra for credit card transactions (presumably to cover the fees the merchants pay). These fees usually carry a flat fee per transaction, plus around 2% of the purchase price. What also wasn't allowed was them to refuse any credit transactions. People could charge a pack of gum, even if the fees put that transaction in the red. What's allowed according to this new development is different levels of discounting for different credit cards. Somewhat related to this discussion is another development that happened this summer: merchants now have the ability to refuse credit card transactions of less than $10. Here's my feeling on all of this. I think we'll see merchants imposing minimum credit transaction amounts before we see them monkeying at the 1-2% level on pricing for different types of credit cards. My feeling is that they'd be wise not to change anything, even though they can. Refusing transactions (or charging more for others) is going to come as a unpleasant shock to enough people that they may take their business elsewhere.",
"title": ""
},
{
"docid": "e98a39641e112d9ac6b9f797f28319c9",
"text": "\"Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing \"\"fine print\"\" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting \"\"subsidized\"\" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor.\"",
"title": ""
},
{
"docid": "a89bd74e7a3d5b571288ebb11b2dacc4",
"text": "\"I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: \"\"disposable\"\", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!\"",
"title": ""
}
] |
fiqa
|
ea976a1f585d5af58d16a913bcb90411
|
How to receive packages pseudonymously?
|
[
{
"docid": "1fca0920db178eab21ddfdab3e9f8f22",
"text": "\"I've done this before for startup companies where I didn't want the mailing address to really obviously be my apartment or home address. Just for appearances. What you should be Googling are terms like \"\"private mailbox center.\"\" If I recall correctly, I used to do this with Mail Boxes Etc before they were bought by UPS. This seems to be the equivalent offering these days: https://www.theupsstore.com/mailboxes I haven't looked at a dummy office for receiving mail -- I imagine that is a bit more expensive. Unless people are delivering things in person I think that would be overkill -- the Fedex guy doesn't care if his package delivery is to a UPS mailbox center.\"",
"title": ""
}
] |
[
{
"docid": "7961bf8b2194c12d5745e927e5942934",
"text": "Call me overly paranoid, but letting unknown people know your charges and your personal information is asking for trouble. They know who you are and how to find you and how much money you typically make. If they are decent people - okay, but otherwise they have good ground for comitting a crime against you - blackmail you, con you, target thieves on you, steal your identity, anything else which you won't like if it happens. And it has noting to do with being from Philippines - disonest people are everywhere. Crimes happen all the time, just the less you expose yourself the less likely a crime will be committed against you. My suggestion would be to share as little financial and personal data as possible, especially to share as little actual money figures as possible. Also see this question.",
"title": ""
},
{
"docid": "bd79b85d692bf9e419a41ca027831ac8",
"text": "You don't have much choice other than to open an account in your business name, then do a money transfer, as @DJClayworth says. You will not without providing your name and street address and possibly other information that you may consider to be of a private nature. This is due to laws about fraud, money laundering and consumer protection. I'm not saying that's what you have in mind! But without accountability of the sort provided by names and street addresses, banks would be facilitating crimes of many sorts, which is why regulatory agencies enforce disclosure requirements.",
"title": ""
},
{
"docid": "d72680a7b2b8d4a757c9da9c81ce25dd",
"text": "Where I live, the delivery people are so bad they just leave super expensive packages on the stoop/porch. It is very risky to have anything of value ordered to an address in my neighborhood. Amazon Key solves that problem, and probably has enough insurance if anything goes wrong. What is your issue with it?",
"title": ""
},
{
"docid": "11df2c61d4b972e329f7d49fe185d5b9",
"text": "I am no expert on the situation nor do I pretend to act like one, but, as a business owner, allow me to give you my personal opinion. Option 3 is closest to what you want. Why? Well: This way, you have both the record of everything that was done, and also IRS can see exactly what happened. Another suggestion would be to ask the GnuCash maintainers and community directly. You can have a chat with them on their IRC channel #gnucash, send them an email, maybe find the answer in the documentation or wiki. Popular software apps usually have both support people and a helpful community, so if the above method is in any way inconvenient for you, you can give this one a try. Hope this helps! Robert",
"title": ""
},
{
"docid": "f2a157979b9a0eb69bf772c0e5def0a7",
"text": "Services exist that allow you to forward mail anywhere or pay bills on your behalf. A friend who travels constantly for work uses a service that receives his mail (at a street address), scans and shreds most items, and forwards packages as he requests. Make sure that you understand what your state considers legal or illegal.",
"title": ""
},
{
"docid": "c72300fdf54c00f4809352f038c5e9c2",
"text": "Definitely sounds like scam. Odds are are high that the page he gave you the link to is a fake and this app is pure identity theft. Run away, unless you are interested enough to do the work to check with the company and confirm this is legitimate. Nobody contacts strangers with this kind of story without it being a scam. The fact that this one sounds shady is an attempt to keep you from questioning it too closely. Think about it: if it was at all legitimate, couldn't he find a friend of a friend? If it sounds too good to be true, it ain't true. Never download software unless you know exactly where it is coming from. It could be anything from ransomware, to something that first steals all you financial info, then uss you mail account to send a similar pitch to all your friends, to a botnet that uses your machine to attack other machines.",
"title": ""
},
{
"docid": "e781182d9a4f01dfcfe7aef0ed00fd28",
"text": "There are multiple social engineering ways.",
"title": ""
},
{
"docid": "b12b28f8dd1d062189107266050906c0",
"text": "Here's one option: Telephone is a lower-tech yet relatively more secure means for transmitting your payment information when a secure web site isn't available. And yet another option: You could send them an encrypted email, but this would require tools (e.g. GPG), setup (public keys), and expertise on their end which they are unlikely to already have. However, ChrisInEdmonton raised a good point in his comment. How can you consider them to be a reputable seller when they don't take basic precautions to protect customers' payment information online? The seller may with good faith charge your card the correct amount and deliver the goods that you expect, but how will they protect your credit card information once in their hands? Would you trust their internal systems if they can't even set up an HTTPS web site?",
"title": ""
},
{
"docid": "0383a3d4efc2433af856ac82cdaa3e04",
"text": "\"Do you guys know any options that are accessible to any global citizen? Prepaid and stored value cards are anonymous. For an arbitrary reason, the really anonymous ones only allow you to load $500 but there is no regulation that dictates this amount. In the USA, these cards are exempt from being declared at border crossings. Not because they look like credit cards, but because they are exempt by the US Treasury and Customs. The cons is that there are generally fees to use them. US DOJ has done research showing that some groups take advantage of the exemption moving upwards of $50,000 a day between borders, but Congress is fine with this exemption and the burden is always on the government to determine \"\"illicit origin\"\". Stigmatizing how money is moved is only a 30 year old phenomenon, but many free nations do not really have capital controls, they only care that you pay taxes and that the integrity of their stock markets are upheld. Aside from that there are no qualms about anonymity, except from your neighbors but they dont matter for a global citizen. In theory, the UK should have more flexibility in anonymity options, such as stored value cards with higher limits.\"",
"title": ""
},
{
"docid": "b271a049ae22fd6bdb2c111d0e1dc938",
"text": "\"Here's what's going to happen: At the last minute, he's going to \"\"discover\"\" that for some reason first you must send him $10,000. He'll tell you not to worry, as he's still going to send you $40,000... now $50,000. In fact, he's going to tell you that he'll send you $60,000 and tell you to keep the $10,000 as a \"\"finders fee\"\". Then you will send him, $10,000 and he will walk away with your $10,000. You'll never hear from him again. This is a very common scam. The best way to avoid it is not to tell him you won't do it for IRS reasons. The best thing to do is to stop accepting email from him and (optionally) report him to law enforcement.\"",
"title": ""
},
{
"docid": "6be9da2998e75daced54241f23861a7f",
"text": "Well I ship and receive so much through FedEx, USPS and UPS all the drivers in my area know me and they each have intensive notes in the system regarding how to deliver my packages so that's not a problem I have. If they just left packages outside I would lose thousands of dollars a day in stolen merchandise and supplies.",
"title": ""
},
{
"docid": "2cdca0bcd4a4f6c189a7fb132c0d3ef9",
"text": "Your post shows you have some misunderstandings regarding this technology. >the possibility of infection This is incredibly low. >you still have to have it taken out when you change jobs They won't be taking them out when they change jobs. These things are reprogrammable, or you could just register the existing implant with a new employer. >the possibility of someone else impersonating you. The latter can be done by copying the chip data using a chip reader without your knowledge This would be extremely difficult to accomplish just in terms of logistics, also only the older style RFID chips can be cloned, the the modern NFC chips are a different story. >Also makes stalking you easier How on Earth did you come to this conclusion?",
"title": ""
},
{
"docid": "d0471c6a9478d19cbcab1fe896e21915",
"text": "I can't relate in the slightest to your desire to be manipulated more effectively. And again, your shitty connection is a political problem, not a technological hurdle. You can and should have better pipe. Push for that, instead of asking spambots to spy on your habits more aggressively.",
"title": ""
},
{
"docid": "dd085f3f1300bd82777f17dec4b1b075",
"text": "After a certain point it's just monkey see, monkey do. Right. If I have a high volume account and I request that no packages be left in the walkway and every delivery is left with a person I can guarantee they'll do their best to oblige by that before they lose the account. That's all I'm saying.",
"title": ""
},
{
"docid": "5b5d674ddb466cca9251caad10ef9843",
"text": "I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/talkbusiness] [Amazon will start delivering packages into the homes of Prime members](https://np.reddit.com/r/talkbusiness/comments/78p4ia/amazon_will_start_delivering_packages_into_the/) [](#footer)*^(If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads.) ^\\([Info](/r/TotesMessenger) ^/ ^[Contact](/message/compose?to=/r/TotesMessenger))* [](#bot)",
"title": ""
}
] |
fiqa
|
2477af6bc269d9439fd5f738b6854da3
|
GnuCash, how do I book loan from credit card, being paid back with salary? [duplicate]
|
[
{
"docid": "908ab82153e1d1a47409f81c431298ca",
"text": "\"When you pay the flight, hotel, conference attendance fees of $100: When you repay the credit card debt of $100: When you receive the gross salary of $5000: Your final balance sheet will show: Your final income statement will show: Under this method, your \"\"Salary\"\" account will show the salary net of business expense. The drawback is that the $4900 does not agree with your official documentation. For tax reporting purposes, you report $5000 to the tax agency, and if possible, report the $100 as Unreimbursed Employee Expenses (you weren't officially reimbursed). For more details see IRS Publication 529.\"",
"title": ""
}
] |
[
{
"docid": "10d9f9670fe70075b14cc479478ba1a2",
"text": "No, GnuCash doesn't specifically provide a partner cash basis report/function. However, GnuCash reports are fairly easy to write. If the data was readily available in your accounts it shouldn't be too hard to create a cash basis report. The account setup is so flexible, you might actually be able to create accounts for each partner, and, using standard dual-entry accounting, always debit and credit these accounts so the actual cash basis of each partner is shown and updated with every transaction. I used GnuCash for many years to manage my personal finances and those of my business (sole proprietorship). It really shines for data integrity (I never lost data), customer management (decent UI for managing multiple clients and business partners) and customer invoice generation (they look pretty). I found the user interface ugly and cumbersome. GnuCash doesn't integrate cleanly with banks in the US. It's possible to import data, but the process is very clunky and error-prone. Apparently you can make bank transactions right from GnuCash if you live in Europe. Another very important limitation of GnuCash to be aware of: only one user at a time. Period. If this is important to you, don't use GnuCash. To really use GnuCash effectively, you probably have to be an actual accountant. I studied dual-entry accounting a bit while using GnuCash. Dual-entry accounting in GnuCash is a pain in the butt. Accurately recording certain types of transactions (like stock buys/sells) requires fiddling with complicated split transactions. I agree with Mariette: hire a pro.",
"title": ""
},
{
"docid": "fc6cd8481d4716ff1f1c8e3b63a62584",
"text": "If you are regularly taking payments of $10,000 I'm very surprised you aren't already set up to accept credit card payments. If you are going to be doing this much in the future it would be a good thing to investigate. Some other options might be:",
"title": ""
},
{
"docid": "110ab6de93da2e5f4297f7a0b8d1501c",
"text": "I have a CapitalOne credit card, and every two or three weeks, CapitalOne Bank sends me checks that can be used almost anywhere (including a deposit into my own checking account if I wish, or to pay taxes or utility bills etc)). The amount thus borrowed is counted as a balance transfer (as if I were paying off another credit-card balance) and it will be charged 0% interest for a year. The catch is that unless I pay off the next monthly statement in full by the due date, I will be charged interest on all new purchases from the day that they post to the account till the day they are paid off. No more grace period etc. All this will continue until that loan amount is paid off in full. So, I either would have to (i) pay off all the purchases made this month plus the minimum monthly payment shown on the next monthly statement and give up use of the card till that 0% balance is all repaid, or (ii) pay interest on new purchases. It might be worth checking on the CapitalOne Credit Card site if such an offer is available to you. If so, get a check from them, pay off the invoice using that check (actually, I would strongly recommend depositing the money in your local bank and writing them your personal check for the amount to be paid), and then pay off next month's bill in full, etc.",
"title": ""
},
{
"docid": "0f1bca174e10f914463e5c7ddcf1433e",
"text": "\"Yes. The simplest option to track your spending over time is to familiarize yourself with the \"\"Reports\"\" menu on the toolbar. Take a look specifically at the \"\"Reports > Income/Expense > Income Statement\"\" report, which will sum up your income and spending over a time frame (defaults to the current year). In each report that you run, there is an \"\"Options\"\" button at the top of the screen. Open that and look on the \"\"General\"\" tab, you'll be able to set the time frame that the report displays (if you wanted to set it for the 2 week block since your last paycheck, for example). Other features you're going to want to familiarize yourself with are the Expense charts & statements, the \"\"Cash Flow\"\" report, and the \"\"Budgeting\"\" interface (which is relatively new), although there is a bit of a learning curve to using this last feature. Most of the good ideas when it comes to tracking your spending are independent of the software you're using, but can be augmented with a good financial tracking program. For example, in our household we have multiple credit cards which we pay in full every month. We selected our cards on specific benefits that they provide, such as one card which has a rotating category for cash back at certain business types. We keep that card set on restaurants and put all of our \"\"eating out\"\" expenses on that card. We have other cards for groceries, gas, etc. This makes it easy to see how much we've spent in a given category, and correlates well with the account structure in gnucash.\"",
"title": ""
},
{
"docid": "b4585c86d5566947354fbb2697a2c873",
"text": "You're knowingly providing a payment method which has insufficient funds to meet the terms of the contract, because you are too lazy to comply with the contract. That's unethical and fraudulent behavior. Will you get in trouble? I don't know. I'd suggest getting acquainted with an electronic calendar that can remind you to do things.",
"title": ""
},
{
"docid": "652321ec91a929624a156d39b09d148f",
"text": "While I'm not an accountant, this is how I do this for my personal accounting: Note, if you don't want the expense to take effect right away meaning it'll affect your Profits, then the transaction date here needs to be something in the future, then when you hit that date and the bill is still not paid, you just unpost the bill and repost again with a new date . So you end up with something like the following: 4. Now you post the invoice to Liabilities:Accounts Payable:The Cable Company, the invoice due date should reflect what you had in the invoice. This is important as gnucash will warn you that your bill is due if you want to pay it every time it starts: When you're ready to pay the bill, just find the bill and click pay invoice. If it's already paid and you imported transactions from your bank, find the transaction then right click and click assign as payment then choose your invoice. Note: I've being using this to also record cheques that are given to people but not cashed yet. I hope that helps.",
"title": ""
},
{
"docid": "5f45d3e345bf79663986b2fecb6b34f6",
"text": "You do not need to set this up as a loan. Try finding an Indian student. He is eligible to get cash (using a travel card, may be) from India tax-free. As long as it doesn't exceed the i-20 amount, he will not have any problems. Since, $10,000 is very small amount, the student shouldn't be having any problem.",
"title": ""
},
{
"docid": "f3c332fbce2b61f308b02c595062977e",
"text": "Ok so this is the best information I could get! It is a guarantee from a financial institution that payment will be made for items or services once certain requirements are met. Let me know if this helps! I'll try to get more info in the meantime.",
"title": ""
},
{
"docid": "e138ff6defe2d6a89d15ee865e23745f",
"text": "\"Credit card interest rates are obscene. Try to find some other kind of loan for the furnishings; if you put things on the card, try to pay them off as quickly as possible. I should say that for most people I do recommend having a credit card. Hotels, car rental agencies, and a fair number of other businesses expect to be able to guarantee your reservation by taking the card info and it is much harder to do business with them without one. It gives you a short-term emergency fund you can tap (and then immediately pay back, or as close to immediately as possible). Credit cards are one of the safer ways to pay via internet, since they have guarantees that limit your liability if they are misused, and the bank can help you \"\"charge back\"\" to a vendor who doesn't deliver as promised. And if you have the self-discipline to pay the balance due in full every month, they can be a convenient alternative to carrying a checkbook or excessive amounts of cash. But there are definitely people who haven't learned how to use this particular tool without hurting themselves. Remember that it needs to be handled with respect and appropriate caution.\"",
"title": ""
},
{
"docid": "4e6041f7790d20a06f9fb2aeccf6d72d",
"text": "I got $26,000/month for Group B. If they spend $26,000 that gives $390 in fees. It will take on average 1.5 months for them to pay the credit card company. With a monthly cost of funds of .04 divide that by 12 and multiply by 1.5, to get a .5% cost for every dollar of customer B spending on cost of funds. This leads to a $130 cost for a total profit of $260. I'm sorry for the lost job. Things like that happen to lots of people. As long as you're still alive, there's always going to be more opportunities. Most people only notice a tiny percentage of the opportunities that come their way, and even fewer take advantage of them.",
"title": ""
},
{
"docid": "6724e21772c00e77a51192829255d57e",
"text": "So hopefully you are not spending the money before you make it. If you are, you are asking for trouble. If not the solution is easy. If you use a spreadsheet for tracking have a item in your checking account running total that is simply CC to pay. Lets say you just got paid, and your balance is like this: You can then do virtual withdrawals for each category In this case you have 70 left to spend. Whoops the car gets a flat which costs you 5 that you put on the card and you also pay your rent by CC. Then your spreadsheet should look like this: You still have the 70 left to spend, and when the CC bill comes due you are free to write the check.",
"title": ""
},
{
"docid": "b228fd9c49d849a76e562c6128b35a42",
"text": "The key here is that you are defacto running your own company no matter if you acknowledge it or not. In the end these questions have the goal of deciding if you can and will repay the loan. Presumably you filed taxes on your income. These can be shown to the loan officer as proof you have the ability to repay your loan. Running your freelancing as a business has advantages of being able to deduct normal expenses for running the business from your revenue. I am not sure how business cards improves your credit worthiness as they can be had for $10 in about an hour.",
"title": ""
},
{
"docid": "9ee10ece1e2b907a1b82ded3dcf34907",
"text": "I don't think there is a definite single answer for this. I think it largely depends on where you are on your financial journey. In the ideal world you'd have everything in bucket 2 built into your budget and be putting a little bit aside every paycheck to cover each of those things when they do come up but that takes a fair bit of discipline to do and experience (and data) to estimate reasonably. When you are just starting out in actually setting and keeping a budget or digging yourself out of CC debt/living paycheck to paycheck the odds are you aren't going to have the experience or disciple necessary to actually budget for those things in bucket 2 and even if you did the better option might well be to pay off that high interest debt you already have rather than saving up for an eventual expense. How ever as you start to improve your situation and pay off that debt, develop the disciple to set and follow a budget that is when you should start adding more of those things into your budget. How you track them doesn't really matter. A separate account at your bank. A total for a category in your budgeting software. An XLS file or even paper (ick). Ultimately it isn't about how you plan for and track things but more about actually doing that. So my question to the OP is where are you? If you already have a budget and do a good job of following it but don't have those items in it then consider that the next step in your financial journey.",
"title": ""
},
{
"docid": "1b4e0eb0641fc8e6dd1a94c8b3a36a1b",
"text": "\"You should be able to pay back whenever; what's the point of an arbitrary timeline? Cash flow is the life blood of any business. When banks loan money, they are expecting a steady cash flow back. If you just pay back \"\"whenever\"\" - the bank has no idea what they'll be getting back month-to-month. When they can set the terms of the loan (length, rate, payment amount), they know how much cash flow they expect to get. What does [the term of the loan] even mean and what difference in the world does it make? In addition to the predictable cash flow needs above, setting a term for the loan determines how long their money will be tied up in the loan. The longer a bank has money tied up in a loan, the more risk there is that the borrower will default, so the bank will require a greater return (interest rate) for that extra risk. What you have described is effectively a revolving line of credit. The bank let you borrow money arbitrarily, charges you a certain rate of interest, and you can pay them back at your schedule. If you pay all of the interest for that month, everything else goes to principal. If you don't pay all of the interest, that interest is added to the balance and gets interest compounded on top of it. Both are perfectly viable business models, and bank employ them both, but they meed different needs for the bank. Fixed-term loans help stabilize cash flow, and lines of credit provide convenience for customers.\"",
"title": ""
},
{
"docid": "799ead6f92c43b8a068767dadafa5d28",
"text": "Tried that, got asked how I filed taxes by the _hiring guy_! What the fuck! How is that any of his business? He wanted to see a business license! What if I'm advertising availability and _nobody is hiring me_, how did spending money on a license help?",
"title": ""
}
] |
fiqa
|
fa82ed83d22ffa8c39c3dc1dbbd60bd3
|
Being a 1099 for a company I part-own?
|
[
{
"docid": "64ff7d85368c789defd8b35ea3d24c03",
"text": "\"The contract he wants me to sign states I'll receive my monthly stipend (if that is the right word) as a 1099 contractor. The right word is guaranteed payment, which is what \"\"salary\"\" is called when a partner is working for a partnership she's a partner in. Which is exactly the case in your situation. 1099 is not the right form to report this, the partnership (LLC in your case) should be using the Schedule K-1 for that. I suggest you talk to a lawyer and a tax adviser (EA/CPA) who are licensed in your State, before you sign anything.\"",
"title": ""
}
] |
[
{
"docid": "7912721aeec16df874e5977ea2a9eaa0",
"text": "Here's an article on it that might help: http://thefinancebuff.com/restricted-stock-units-rsu-sales-and.html One of the tricky things is that you probably have the value of the vested shares and withheld taxes already on your W-2. This confuses everyone including the IRS (they sent me one of those audits-by-mail one year, where the issue was they wanted to double-count stock compensation that was on both 1099-B and W-2; a quick letter explaining this and they were happy). The general idea is that when you first irrevocably own the stock (it vests) then that's income, because you're receiving something of value. So this goes on a W-2 and is taxed as income, not capital gains. Conceptually you've just spent however many dollars in income to buy stock, so that's your basis on the stock. For tax paid, if your employer withheld taxes, it should be included in your W-2. In that case you would not separately list it elsewhere.",
"title": ""
},
{
"docid": "11fb8e7e63dd941dffe0099876b5abc8",
"text": "If the money comes to you, then it's income. If the money goes out from you, it's an expense. You get to handle the appropriate tax documentation for those business transactions. You may also have the pleasure of filing 1099-MISC forms for all of your blogging buddies if you've paid them more than $600. (Not 100% sure on this one.) I was in a blog network that had some advertising deals, and we tried to keep the payments separate because it was cleaner that way. If I were you, I'd always charge a finder's fee because it is extra work for you to do what you're doing.",
"title": ""
},
{
"docid": "052cdbc0b5131c019a97ef5aaafb1df6",
"text": "You need to clarify with Bob what your agreement is. If you and Bob are working together on these jobs as partners, you should get a written partnership agreement done by a lawyer who works with software industry entity formation. You can legally be considered a partnership if you are operating a business together, even if there is nothing in writing. The partnership will have its own tax return, and you each will be allocated 50% of the profits/losses (if that's what you agree to). This amount will be reported on your own individual 1040 as self-employment income. Since you have now lost all the expense deductions you would have taken on your Schedule C, and any home office deduction, it's a good idea to put language in the partnership agreement stating that the partnership will reimburse partners for their out-of-pocket expenses. If Bob is just hiring you as a contractor, you give him your SSN, and he issues you a 1099, like any other client. This should be a situation where you invoice him for the amount you are charging. Same thing with Joe - figure out if you're hiring him as an independent contractor, or if you have a partnership. Either way, you will owe income and self-employment tax on your profits. In the case of a partnership, the amount will be on the K-1 from the partnership return. For an independent contractor who's operating as a sole proprietor, you report the income you invoiced for and received, and deduct your expenses, including independent contractors that you hired, on your Schedule C. Talk to your tax guy about quarterly estimated payments. If you don't have a tax guy, go get one. Find somebody people in your city working in your industry recommend. A good tax person will save you more money than they cost. IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "559b05e48a817e0e9841d2cc181a9a71",
"text": "\"You are confusing entirely unrelated things. First the \"\"profit distribution\"\" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as \"\"profits from S-Corp\"\". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case.\"",
"title": ""
},
{
"docid": "acd13ed628496354fa8b601a28ac4b2d",
"text": "As a new (very!) small business, the IRS has lots of advice and information for you. Start at https://www.irs.gov/businesses/small-businesses-self-employed and be sure you have several pots of coffee or other appropriate aid against somnolence. By default a single-member LLC is 'disregarded' for tax purposes (at least for Federal, and generally states follow Federal although I don't know Mass. specifically), although it does have other effects. If you go this route you simply include the business income and expenses on Schedule C as part of your individual return on 1040, and the net SE income is included along with your other income (if any) in computing your tax. TurboTax or similar software should handle this for you, although you may need a premium version that costs a little more. You can 'elect' to have the LLC taxed as a corporation by filing form 8832, see https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc . In principle you are supposed to do this when the entity is 'formed', but in practice AIUI if you do it by the end of the year they won't care at all, and if you do it after the end of the year but before or with your first affected return you qualify for automatic 'relief'. However, deciding how to divide the business income/profits into 'reasonable pay' to yourself versus 'dividends' is more complicated, and filling out corporation tax returns in addition to your individual return (which is still required) is more work, in addition to the work and cost of filing and reporting the LLC itself to your state of choice. Unless/until you make something like $50k-100k a year this probably isn't worth it. 1099 Reporting. Stripe qualifies as a 'payment network' and under a recent law payment networks must annually report to IRS (and copy to you) on form 1099-K if your account exceeds certain thresholds; see https://support.stripe.com/questions/will-i-receive-a-1099-k-and-what-do-i-do-with-it . Note you are still legally required to report and pay tax on your SE income even if you aren't covered by 1099-K (or other) reporting. Self-employment tax. As a self-employed person (if the LLC is disregarded) you have to pay 'SE' tax that is effectively equivalent to the 'FICA' taxes that would be paid by your employer and you as an employee combined. This is 12.4% for Social Security unless/until your total earned income exceeds a cap (for 2017 $127,200, adjusted yearly for inflation), and 2.9% for Medicare with no limit (plus 'Additional Medicare' tax if you exceed a higher threshold and it isn't 'repealed and replaced'). If the LLC elects corporation status it has to pay you reasonable wages for your services, and withhold+pay FICA on those wages like any other employer. Estimated payments. You are required to pay most of your individual income tax, and SE tax if applicable, during the year (generally 90% of your tax or your tax minus $1,000 whichever is less). Most wage-earners don't notice this because it happens automatically through payroll withholding, but as self-employed you are responsible for making sufficient and timely estimated payments, and will owe a penalty if you don't. However, since this is your first year you may have a 'safe harbor'; if you also have income from an employer (reported on W-2, with withholding) and that withholding is sufficent to pay last year's tax, then you are exempt from the 'underpayment' penalty for this year. If you elect corporation status then the corporation (which is really just you) must always make timely payments of withheld amounts, according to one of several different schedules that may apply depending on the amounts; I believe it also must make estimated payments for its own liability, if any, but I'm not familiar with that part.",
"title": ""
},
{
"docid": "65d6268b9e11acd274bd0c2b77e86446",
"text": "In general that's illegal. If you're a W2 employee, you don't miraculously become a 1099 contractor just because they pay you more. If your job doesn't change - then your status doesn't change just because they give you a raise. They can be sued (by you, and by the IRS) for that. Other issues have already been raised by other respondents, just wanted to point out this legal perspective.",
"title": ""
},
{
"docid": "85f1ee03b67a2df86e96dbcec51a9f21",
"text": "\"Assuming you are paying into and eligible to collect regular Employment Insurance benefits for the job in question, I don't see how owning a side business would, by itself, affect your ability to participate in the workshare program. Many people own dormant businesses ($0 revenue / $0 income), or businesses with insignificant net income (e.g. a small table at the flea market, or a fledgling web-site with up-front costs and no ad revenue, yet ;-) I think what matters is if your side business generated income substantial enough to put you over a certain threshold. Then you may be required to repay a portion of the EI benefits received through the workshare program. On this issue, I found the following article informative: How to make work-sharing work for you, from the Globe & Mail's Report on Business site. Here's a relevant quote: \"\"[...] If you work elsewhere during the agreement, and earn more than an amount equal to 40% of your weekly benefit rate, that amount shall be deducted from your work sharing benefits payable that week. [...]\"\" The definitive source for information on the workshare program is the Service Canada web site. In particular, see the Work-Sharing Applicant Guide, which discusses eligibility criteria. Section IV confirms the Globe article's statement above: \"\"[...] Earnings received in any week by a Work-Sharing participant, from sources other than Work-Sharing employment, that are in excess of an amount equal to 40% or $75 (whichever is greater) of the participant's weekly benefit rate, shall be deducted from the Work-Sharing benefits payable in that week. [...]\"\" Finally, here's one more interesting article that discusses the workshare program: Canada: Employment Law @ Gowlings - March 30, 2009.\"",
"title": ""
},
{
"docid": "1be25d189c6efb019fd87a53bad1e3a2",
"text": "\"Before filing your first business tax return, you will need to choose a taxation method, either corporation or partnership. If you choose a partnership, then it's moot - your business income flows through to your personal taxes via form K-1. Also, regardless of your taxation method, you should consult a legal expert, since having your business pay off your personal debt would almost always be counted as income to you, and may cause you to lose the personal liability protections provided by the LLC (aka \"\"piercing the corporate veil\"\"). Having a single-member LLC with no employees, you have to be very careful how you manage the finances of the business. Any commingling of personal and business could jeopardize your protections.\"",
"title": ""
},
{
"docid": "d4e6fe0aa15ee2e3158e55925b69ad93",
"text": "No, do not file a Form 1099. You should not issue a form to yourself and you have no separate entity to issue one. The reporting obligation is Form 1040, plus Schedule C. You may have followed a wrong turn somewhere in the TurboTax questionnaire or it may not have picked up the subtleties of your situation. The business income is already yours. Some writers use vehicles to hold their royalties and pay themselves. The questionnaire may have been trying to get at this issue or may have wrongly assumed it. There are special rules around such entities, so getting an adviser is a good idea. For now, just file Schedule C, remember to deduct your costs (e.g. cost to print the books), and pay your self-employment tax.",
"title": ""
},
{
"docid": "521ca52299c5af07b7cf3157b6a45764",
"text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"",
"title": ""
},
{
"docid": "4a9011e433785e61732b017579a786a1",
"text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward.",
"title": ""
},
{
"docid": "0980ca2d1a7e51b55220dd25da641b4f",
"text": "question #2 - yes, 25% of your 1099 income. Good idea. It adds up quickly and is a good way to reduce taxable income.",
"title": ""
},
{
"docid": "730bf896fd9945161b247899375340c3",
"text": "I'm a freelance programmer, reverse-engineer, and network engineer. I do quarterly 1099 filings using a cheap local accounting firm. I did them on my own at first; not that hard.. You deduct from sum the percentage for that earning-tier issued by the IRS.. $500.00 for writing algorithms on a timer? Yikes.. I did topcoder once but it didn't pay much then it was only good for portfolio.. No way I would race to do algorithms for third-world-rate capital..",
"title": ""
},
{
"docid": "8fc999cb123d1fab5d8a6d8bcfd798b5",
"text": "I believe you can easily make tresholds for what constitute a partial owner. If I work for GE and buy a share, I'm not exactly a partial owner. Anything under 10% for companies making, I don't know, less than 50 Mil in revenue, you're an employee. Larger companies, 5%. That's just an idea, could be refined but, yeah...",
"title": ""
},
{
"docid": "20c142df943348a0135a62c9553986d0",
"text": "\"I don't see why you would need an \"\"international tax specialist\"\". You need a tax specialist to give you a consultation and training on your situation, but it doesn't seem too complicated to me. You invoice your client and get paid - you're a 1099 contractor. They should issue you a 1099 at the end of the year on everything they paid you. Once you become full-time employee - you become a W2 employee and will get a W2 at the end of the year on the amounts paid as such. From your perspective there's nothing international here, regular business. You have to pay your own taxes on the 1099 income (including SE taxes), they have to withhold taxes from your W2 income (including FICA). Since they're foreign employers, they might not do that latter part, and you'll have to deal with that on your tax return, any decent EA/CPA will be able to accommodate you with that. For the employer there's an issue of international taxation. They might have to register as a foreign business in your state, they might be liable for some payroll taxes and State taxes, etc etc. They might not be aware of all that. They might also be liable (or exempt) for Federal taxes, depending on the treaty provisions. But that's their problem. Your only concern is whether they're going to issue you a proper W2 and do all the withholdings or not when the time comes.\"",
"title": ""
}
] |
fiqa
|
7da4cff5fec3df3e1046616882e29586
|
What are the advantages of paying off a mortgage quickly?
|
[
{
"docid": "3086eab018f276f09b815f40e15f4828",
"text": "The main reason for paying your mortgage off quickly is to reduce risk should a crisis happen. If you don't have a house payment, you have much higher cash flow every month, and your day-to-day living expenses are much lower, so if an illness or job loss happens, you'll be in a much better position to handle it. You should have a good emergency fund in place before throwing extra money at the mortgage so that you can cover the bigger surprises that come along. There is the argument that paying off your mortgage ties up cash that could be used for other things, but you need to be honest with yourself: would you really invest that money at a high enough rate of return to make up your mortgage interest rate after taxes? Or would you spend it on other things? If you do invest it, how certain are you of that rate of return? Paying off the mortgage saves you your mortgage interest rate guaranteed. Finally, there is the more intangible aspect of what it feels like to be completely debt free with no payments whatsoever. That feeling can be a game-changer for people, and it can free you up to do things that you could never do when you're saddled with a mortgage payment every month.",
"title": ""
},
{
"docid": "a7de2abcd6c7bdaf5142448fec9b06c1",
"text": "Considering that it's common for the monthly mortgage payment to be 25% of one's income, it's an obvious advantage for that monthly burden to be eliminated. The issue, as I see it, is that this is the last thing one should do in the list of priorities: The idea of 'no mortgage' is great. But. You might pay early and have just a few years of payments left on the mortgage and if you are unemployed, those payments are still due. It's why I'd suggest loading up retirement accounts and other savings before paying the mortgage sooner. Your point, that rates are low, and your expected return is higher, is well presented. I feel no compulsion to prepay my 3.5% mortgage. As the OP is in Canada, land of no mortgage interest deduction, I ignore that, till now. The deduction simply reduces the effective rate, based on the country tax code permitting it. It's not the 'reason' to have a loan. But it's ignorant to ignore the math.",
"title": ""
},
{
"docid": "947b9dd1b0deae9a28470ff60414a022",
"text": "I used to think that paying off ahead of time made sense, but I no longer do, at least in most cases. The upside is that you can get a return on your money equal to the mortgage interest rate (it's less than that in the US, where mortgage interest is deductible, so it's roughly the mortgage interest rate * 1 - your marginal income tax rate). There are a few downsides. The biggest is that cash is the most liquid asset you can have; you can get at it with no restrictions. If you put that cash into your house, you are converting that into an asset with a lot of restrictions; you can't get at it without fees, nor can you get at it if you don't have a job, which is when you would need it most. So, you are putting your money in a hard-to-get-at place for a small interest rate. I don't think it is worthwhile. (edit) One complication is PMI. If you are currently paying PMI, it may make sense to put money towards the mortgage until you get to 20% and can get rid of the PMI.",
"title": ""
},
{
"docid": "112eafe83d9ea55e9e347bde75cf5865",
"text": "It depends on where you are in life, and where you want to be at some point in the future, and the taxes, expenses and income at those points in your life. You don't get a mortgage to save on taxes, or keep a mortgage to save on taxes. But if somebody said they want to have the house paid off before they retire, that sounds to me like a great plan. They do need to balance it with saving for retirement, emergency fund, and college costs for themselves or their children. Without having the whole picture it is impossible to say doing X is always a good idea.",
"title": ""
},
{
"docid": "b291f8354948f68c47bf9b69785c6131",
"text": "The financial reasons, beyond simply owning your home outright, are: You're no longer paying interest. Yes, the interest is tax-deductible in the U.S. (though not in Canada), but the tax savings is a percentage of a percentage; if you paid, say, $8000 in interest last year, at the 25% marginal rate you effectively save $2000 off your taxes. But, if you paid off your home and had that $8000 in your pocket, you'd pay the $2000 in taxes but you'd have $6000 left over. Which is the better deal? In Canada, the decision gets even easier; you pay taxes on the interest money either way, so you're either spending the $8000 in interest, lost forever as cost of capital, or on other things. Whatever you're earning is going into your own pocket, not the bank's. Similar to the interest, but also including principal, a home you own outright is a mortgage payment you don't have to make. You can now use that money, principal and interest, for other things. Whether these advantages outweigh those of anything else you could do with a few hundred grand depends primarily on the rate of return. If you got in at the bottom of the mortgage crisis (which is pretty much right now) and got a rate in the 3-4% range, with no MIP or other payment on top, then almost anything you can do with the amount you'd need to pay off a mortgage principal would get you a better rate of return. However, you'll need some market savvy to avoid risks. In most cases when someone has pretty much any debt and a big wad of cash they're considering how to spend, I usually recommend paying off the debt, because that is, in effect, a risk-free way to increase the net rate of return on your total wealth and income. Balancing debt with investments always carries with it the risk that the investment will fail, leaving you stuck with the debt. Paying the debt on the other hand will guarantee that you don't have to pay interest on that outstanding amount anymore, so it's no longer offsetting whatever gains you are making in the market on your savings or future investments.",
"title": ""
},
{
"docid": "ae4a1abb765f600dff454184a76b5944",
"text": "From my experience and friends' experiences, I can say that there are advantages and disadvantages for paying off your mortgage quickly. Basically, it depends on these factors: the type of the mortgage, its interest rate, your financial stability, your skills in making investments and other outside factors, such as inflation, liquidity, oppurtunity cost, etc. Paying it off means you save on interest ratings, you decrease investment risks and your investment rates are taxable. Disadvantages are that you cannot use this money for investing, you cannot use this money for tax deductions and that in a state of inflation, not paying it off in advance could save you a lot of money. However, I always recommend to read some more on websites that deal with mortgages, and speak with the mortgage expert in your bank.Just acquire enough information to make a good assessment. An interesting article on this topic - The Advantages and Disadvantages of Paying Off Your Mortgage",
"title": ""
}
] |
[
{
"docid": "4bf65001c063594bdc70a9d5a0562c5b",
"text": "\"that would deprive me of the rental income from the property. Yes, but you'd gain by not paying the interest on your other mortgage. So your net loss (or gain) is the rental income minus the interest you're paying on your home. From a cash flow perspective, you'd gain the difference between the rental income and your total payment. Any excess proceeds from selling the flat and paying off the mortgage could be saved and use later to buy another rental for \"\"retirement income\"\". Or just invest in a retirement account and leave it alone. Selling the flat also gets rid of any extra time spent managing the property. If you keep the flat, you'll need a mortgage of 105K to 150K plus closing costs depending on the cost of the house you buy, so your mortgage payment will increase by 25%-100%. My fist choice would be to sell the flat and buy your new house debt-free (or with a very small mortgage). You're only making 6% on it, and your mortgage payment is going to be higher since you'll need to borrow about 160k if you want to keep the flat and buy a $450K house, so you're no longer cash-flow neutral. Then start saving like mad for a different rental property, or in non-real estate retirement investments.\"",
"title": ""
},
{
"docid": "a938e155f251581f578bedd34f425065",
"text": "\"The main disadvantage is that interest rates are higher for the interest-only loan. It's higher risk to the bank, since the principal outstanding is higher for longer. According to the New York Times, \"\"Interest rates are usually an eighth- to a half-percentage point higher than on fully amortized jumbo loans.\"\" They're also tougher to qualify for, and fewer lenders offer them, again due to the risk to the bank. Since you can always put extra towards the principal, strictly speaking, these are the only downsides. The upside, of course, is that you can make a lower payment each month. The question is what are you doing with this? If this is the only way you can afford the payments, there's a good chance the house is too expensive for you. You're not building equity in the home, and you have the risk of being underwater if the house price goes down. If you're using the money for other things, or you have variable income, it might be a different story. For the former, reinvesting in a business you own might be a reason, if you're cognizant of the risks. For the latter, salespeople on commission, or financial industry types who get most of their income in bonuses, can benefit from the flexibility.\"",
"title": ""
},
{
"docid": "aef2e985151219892fc80e2b444fdb0f",
"text": "Besides the reason in @rhaskett's answer, it is important to consider that paying off a 30-year mortgage as if it was a 15-year is much more inconvenient than just paying the regular payments of a 15-year mortgage. When you pay extra on your mortgage, some lenders do not know what to do with the extra payment, and need to be told explicitly that the extra needs to be applied toward the principal. You might need to do this every month with every payment. In addition, some lenders won't allow you to set up an automatic payment for more than the mortgage payment, so you might need to explicitly submit your payment with instructions for the lender each month, and then follow up each month to make sure that your payment was credited properly. Some lenders are better about this type of thing than others, and you won't really know how much of a hassle it will be with your lender until you start making payments. If you intend to pay it off in 15 years, then just get the 15-year mortgage.",
"title": ""
},
{
"docid": "ade1a70a1ee0761e9bad174726ff779e",
"text": "\"I've heard that the bank may agree to a \"\"one time adjustment\"\" to lower the payments on Mortgage #2 because of paying a very large payment. Is this something that really happens? It's to the banks advantage to reduce the payments in that situation. If they were willing to loan you money previously, they should still be willing. If they keep the payments the same, then you'll pay off the loan faster. Just playing with a spreadsheet, paying off a third of the mortgage amount would eliminate the back half of the payments or reduces payments by around two fifths (leaving off any escrow or insurance). If you can afford the payments, I'd lean towards leaving them at the current level and paying off the loan early. But you know your circumstances better than we do. If you are underfunded elsewhere, shore things up. Fully fund your 401k and IRA. Fill out your emergency fund. Buy that new appliance that you don't quite need yet but will soon. If you are paying PMI, you should reduce the principal down to the point where you no longer have to do so. That's usually more than 20% equity (or less than an 80% loan). There is an argument for investing the remainder in securities (stocks and bonds). If you itemize, you can deduct the interest on your mortgage. And then you can deduct other things, like local and state taxes. If you're getting a higher return from securities than you'd pay on the mortgage, it can be a good investment. Five or ten years from now, when your interest drops closer to the itemization threshold, you can cash out and pay off more of the mortgage than you could now. The problem is that this might not be the best time for that. The Buffett Indicator is currently higher than it was before the 2007-9 market crash. That suggests that stocks aren't the best place for a medium term investment right now. I'd pay down the mortgage. You know the return on that. No matter what happens with the market, it will save you on interest. I'd keep the payments where they are now unless they are straining your budget unduly. Pay off your thirty year mortgage in fifteen years.\"",
"title": ""
},
{
"docid": "c00d295dd92b63c56bd599f579d7ac83",
"text": "\"So, let's take a mortgage loan that allows prepayment without penalty. Say I have a 30 year mortgage and I have paid it for 15 years. By the 16th year almost all the interest on the 30 year loan has been paid to the bank This is incorrect thinking. On a 30 year loan, at year 15 about 2/3's of the total interest to be paid has been paid, and the principal is about 1/3 lower than the original loan amount. You may want to play with some amortization calculators that are freely available to see this in action. If you were to pay off the balance, at that point, you would avoid paying the remaining 1/3 of interest. Consider a 100K 30 year mortgage at 4.5% In month two the payment breaks down with $132 going to principal, and $374 going to interest. If, in month one, you had an extra $132 and directed it to principal, you would save $374 in interest. That is a great ROI and why it is wonderful to get out of debt as soon as possible. The trouble with this is of course, is that most people can barely afford the mortgage payment when it is new so lets look at the same situation in year 15. Here, $271 would go to principal, and $235 to interest. So you would have to come up with more money to save less interest. It is still a great ROI, but less dramatic. If you understand the \"\"magic\"\" of compounding interest, then you can understand loans. It is just compounding interest in reverse. It works against you.\"",
"title": ""
},
{
"docid": "34b90f582d0325e1d5a143df06626128",
"text": "\"I went through the process so I'll add my experience for posterity. On the morning of the day I was ready to pay, I went to my mortgage company's web site and got an instant payoff statement dated for the same day. This had the final payoff amount as well as addresses to send checks and information about wiring. I printed this statement out and took it to my bank the same day and told them that I wanted to wire money. They referred to the printout and sent the money to the mortgage company. The next day, the mortgage company web site indicated that the loan was paid in full. Although sending a check (and the payoff statement indicated that cashier's checks were \"\"preferred\"\"), wiring the money was an easy process and helped me to overcome my concerns about situations that might arise if mail had been used (i.e. I did not want to deal with the complexity of day-late/day-early fees/credits, and I did not want to worry about the complexity of potentially losing a cashier's check in the mail).\"",
"title": ""
},
{
"docid": "cc952689a665f740665146ab357152c9",
"text": "Advantages of buying: With every mortgage payment you build equity, while with rent, once you sign the check the money is gone. Eventually you will own the house and can live there for free. You can redecorate or remodel to your own liking, rather than being stuck with what the landlord decides is attractive, cost-effective, etc. Here in the U.S. there are tax breaks for homeowners. I'm not sure if that's true in U.K. Advantages of renting: If you decide to move, you may be stuck paying out a lease, but the financial penalty is small. With a house, you may find it difficult to sell. You may be stuck accepting a big loss or having to pay a mortgage on the empty house while you are also paying for your new place. When there are maintenance issues, you call the landlord and it's up to him to fix it. You don't have to come up with the money to pay for repairs. You usually have less maintenance work to do: with a house you have to mow the lawn, clear snow from the driveway, etc. With a rental, usually the landlord does that for you. (Not always, depends on type of rental, but.) You can often buy a house for less than it would cost to rent an equivalent property, but this can be misleading. When you buy, you have to pay property taxes and pay for maintenance; when you rent, these things are included in the rent. How expensive a house you can afford to buy is not a question that can be answered objectively. Banks have formulas that limit how much they will loan you, but in my experience that's always been a rather high upper bound, much more than I would actually be comfortable borrowing. The biggest issue really is, How important is it to you to have a nice house? If your life-long dream is to have a big, luxurious, expensive house, then maybe it's worth it to you to pour every spare penny you have into the mortgage. Other people might prefer to spend less on their house so that they have spare cash for a nice car, concert tickets, video games, cocaine, whatever. Bear in mind that if you get a mortgage that you can just barely afford, what do you do if something goes wrong and you can't afford it any more? What if you lose your job and have to take a lower-paying job? What if some disaster strikes and you have some other huge expense? Etc. On the flip side, the burden of a mortgage usually goes down over time. Most people find that their incomes go up over time, between inflation and growing experience. But the amount of a mortgage is fixed, or if it varies it varies with interest rates, probably bouncing up and down rather than going steadily up like inflation. So it's likely -- not at all certain, but likely -- that if you can just barely afford the payment now, that in 5 or 10 years it won't be as big a burden.",
"title": ""
},
{
"docid": "3c5a9302dc720a0ce0b07887b5d7b754",
"text": "\"Making extra principal payments will reduce the term of your loan. I wouldn't sign up for a biweekly schedule, just do it yourself so you have more flexibility. A simple spreadsheet will allow you to play \"\"What if?\"\" and make it clear that extra principal payments are most effective early in the term of the loan. My wife and I paid off our home in less than 10 years with this approach. Some will say that the opportunity costs of not using that money for something else outweighs the gains. I would say that not having a mortgage has a positive impact on your cash flow and your assets (you own the home), which combine to create more opportunity, not less. That being said, It should be obvious that paying off higher interest debt first is the priority, (Paying off a zero percent interest car loan early is just foolish)\"",
"title": ""
},
{
"docid": "030f333f695729064b103a9fbb7dd4f3",
"text": "Aggressively paying of Mortgage is better. If you have more cash available [assuming you have covered all other aspects i.e. emergency funds, retirement etc], the only question you need to ask is where will you invest and what returns would you get. So if your mortgage is say at 5%, if the spare money can get you more than this, its beneficial, if its in Bank CD with say near zero interest, its not worth it. However if you are sure you can make 10% returns on the investments, then go ahead and don't pay the mortgage aggressively.",
"title": ""
},
{
"docid": "65f8af4a4f42bc4a9e99a59ac89a5072",
"text": "Use the $11k to pay down either car loan (your choice). You should be able to clear one loan very quickly after that lump sum. After that, continue to aggressively pay down the other car loan until it is clear. Lastly, pay off the mortgage while making sure you are financially stable in other areas (cash-on-hand, retirement, etc) Reasoning: The car loans are very close in value, making it a wash as far as payoff speed. The 2.54% interest is not a large factor here. As a percentage of all these numbers, the few bucks a month isn't going to change your financial situation. This is assuming you will pay off both loans well ahead of schedule, making the interest rate negligible in the answer. Paying off the mortgage last is due to the risk associated with the car loans. The cars are guaranteed to lose value at an alarming rate. While a house certainly may lose value, it is far from an expectation. It is likely that your house will maintain and/or increase in value, unless you have specific circumstances not disclosed here. This makes the mortgage a lower risk loan in your financial world. You can probably sell the house to clear the loan balance if necessary. The cars are far more likely to depreciate beyond the loan balance.",
"title": ""
},
{
"docid": "74b3f1e58bda2b062d3ad816837fd262",
"text": "Certainly, paying off the mortgage is better than doing nothing with the money. But it gets interesting when you consider keeping the mortgage and investing the money. If the mortgage rate is 5% and you expect >5% returns from stocks or some other investment, then it might make sense to seek those higher returns. If you expect the same 5% return from stocks, keeping the mortgage and investing the money can still be more tax-efficient. Assuming a marginal tax rate of 30%, the real cost of mortgage interest (in terms of post-tax money) is 3.5%*. If your investment results in long-term capital gains taxed at 15%, the real rate of growth of your post-tax money would be 4.25%. So in post-tax terms, your rate of gain is greater than your rate of loss. On the other hand, paying off the mortgage is safer than investing borrowed money, so doing so might be more appropriate for the risk-averse. * I'm oversimplifying a bit by assuming the deduction doesn't change your marginal tax rate.",
"title": ""
},
{
"docid": "409ac925651cc4ebb63b381c55fee2a8",
"text": "Sounds fishy - taking out more debt to pay the main mortgage down faster? There are a couple of issues I can see: I would think that a much more sensible strategy with a lot less risk is to save up extra cash and send your lender a check every quarter or six months.",
"title": ""
},
{
"docid": "46f47d77f54a1225e0d71c751e5a7c88",
"text": "In the US, a surviving family member that inherits the entire property may also assume the mortgage. If the new mortgagee fails to uphold the terms of the mortgage (i.e. make timely payments), the mortgagor can begin foreclosure proceedings. There is generally no requirement to pay off the mortgage quickly. This is obviously the simple case where one person inherits the entire property. If the estate is split and no one person inherits the house, or if the house is left to a non-relative, things get more complicated. Effectively in that case the house is either sold to pay off the mortgage or the inheritor needs to take out a new mortgage to pay off the old one.",
"title": ""
},
{
"docid": "b0ae376761c4cf328781fca14cbcf687",
"text": "The answer depends entirely on your mortgage terms - is the interest rate low, how many years left? Questions like this are about Cost of Capital. If your mortgage has a low interest for a lot of years, you have a low cost of capital. By paying it off early, you are dumping that low cost of capital. Use the extra money to start a business, invest in something or even buy another property (rental). Whenever you have a low cost of capital, don't rush to get rid of it. Of course, if there are no other investment/business opportunities available and the extra money is going into a low return savings account, you might as well pay down your debt. Or if you lack the self discipline to use the extra money properly - buying flat screens and meals out - then yeah just pay down your debt. But if you're disciplined with the extra money, use it to get access to more capital and make that new capital work for you.",
"title": ""
},
{
"docid": "8d5621331f74f236d8df4739c497937e",
"text": "Answers to this your question break down along a few lines regarding opportunity costs of tying up a significant chunk of your salary and assets in one piece of property, as opposed to other things you'd like to do with your life. The 30 year standard mortgage was invented in the 30's as part of FDR's new deal to make housing affordable to more people, while relieving the strain on the market of foreclosed homes from ~10 year interest only balloon mortgages (sound familiar?). The 30 year term tends to follow the career of the average American of that era, allowing them to pay the house off and live out the remainder of their lives there at a lower cost. Houses are depreciating assets because they wear out over time. Their greatest investment value is a place to live. The appreciation on a home comes from the real estate it sits on and the community the property is located in. Value is determined by desirability of the house and community in their current state, and the supply of property in the area. This value can only be extracted when you sell the home. This partially answers your last question noting that you shouldn't buy a really expensive building for investment value. We've learned in recent years that there are no long term guarantees of property value either, because land and communities can decrease in value due to unemployment, over supply, crime, pollution, etc. Only buy as much home as you will need in the next decade or so, in a place that you will like living over that time period, and don't consider it much of an investment. I will tell you to get a fifteen year fixed rate mortgage since it's readily available at lower rates and has a significantly lower total purchase price than the standard 30 years. The monthly payment difference isn't that great, and anyone who looks at the monthly payment as opposed to the total costs, your priorities and the opportunity costs shouldn't be trusted for financial advice. I don't like debt. There are psychological benefits to being free from the bondage and drain of a long term mortgage on your finances. The biggest argument for paying off your home quickly is freedom to pursue other desires with all of your salary and the assets you have available to you. Some financial advisers will tell you to keep your mortgage costs under 25% of your income, so that you can actually live off the money you make. I would also recommend paying at least enough into your 401k to get the company match and fully funding your Roth IRA. I'd also have an emergency fund to cover at least 6 months of expenses, including this mortgage in case you lose your job. A 15 or 20 year mortgage will give you breathing room to take care of these other priorities, and you can overpay on almost any mortgage to decrease the principal and finish in a shorter time period (make sure to get a mortgage that allows prepayment) . More financially savvy people may tell you to take the 30 year mortgage and invest the difference. Especially with mortgage rates around 4%, this is a very cheap way to increase your purchasing power and total assets. Most people lack the investment prowess and self discipline to make this plan pay off. There are even fewer guarantees regarding markets and investments than property. This also is a way of diversifying your total assets to protect against loss of value in your home. This approach has backfired for thousands of people who are underwater on their homes. This problem is often compounded by job loss forcing you to move, or increasing your commute, making your home less desirable for you. Some people will tell you to maintain the mortgage for the tax credit. This fails a basic math test since you only get about a quarter of the money (depending on your tax rate) that you are paying in interest back from the government. The rest of the money goes to bank at no gain to you. This approach is basically a taxpayer subsidized decrease of your 4% interest payment to a 3% interest payment (assuming you have ~ $5000 in other deductions), and only pays off if you can successfully invest the money at a rate somewhat greater than 3%.",
"title": ""
}
] |
fiqa
|
5f03073d28b8ad4c919e89b4504da25c
|
Ballpark salary equivalent today of “healthcare benefits” in the US?
|
[
{
"docid": "6135c8f670db1a6b12cf072836c41264",
"text": "\"As a contractor, I have done this exact calculation many times so I can compare full time employment offers when they come. The answer varies greatly depending on your situation, but here's how to calculate it: So, subtracting the two and you get I've run many different scenarios with multiple plans and employers, and in my situation with a spouse and 1 child, the employer plans usually ended up saving me approximately $5k per year. So then, to answer your question: ...salary is \"\"100k\"\", \"\"with healthcare\"\", or then \"\"X\"\" \"\"with no healthcare\"\" - what do we reckon? I reckon I would want to be paid $5K more, or $105K. This is purely hypothetical though and assumes there are no other differences except for with or without health insurance. In reality, contractor vs employee will have quite a few other differences. But in general, the calculation varies by company and the more generous the employer's health benefits, the more you need to be compensated to make up for not having it. Note: the above numbers are very rough, and there are many other factors that come into play, some of which are: As a side note, many years ago, during salary talks with a company, I was able to negotiate $2K in additional yearly salary by agreeing not to take the health insurance since I had better insurance through my spouse. Health insurance in the US was much cheaper back then so I think closer to $5K today would be about right and is consistent with my above ballpark calculation. I always wondered what would have happened if I turned around and enrolled the following year. I suspect had I done that they could not have legally lowered my salary due to my breaking my promise, but I wouldn't be surprised if I didn't get a raise that year either.\"",
"title": ""
},
{
"docid": "12d2a2d9c6a23b4f53e361c3547a3c3d",
"text": "As others have said, it depends entirely on what benefits are provided, and how much of the cost of those benefits is paid by the employer and how much is paid by the employee, and compare that to what it would cost to obtain the necessary/equivalent coverage without employer assistance. In my case, my employer pays more than $10,000 per year toward the cost of medical, dental, vision, disability, and life insurance for myself and my family. That's almost 20% of the average total household income in my state, so it is not an insignificant amount at all.",
"title": ""
},
{
"docid": "047a5a59392e187e64af7fb96e1a105f",
"text": "\"While the other answers try to quantify the value of health care the question you ask is about employee vs contractor. The delta between those regarding benefits goes way beyond health care. In fact because almost every full time employee must have health care offered by their employer the option of \"\"you can have X with healthcare, or Y with no healthcare\"\" is no longer an option. I have seen situations in the last few years where employees who had no need for healthcare coverage (retired military) were offered additional vacation days to compensate for their lower cost to the employer. For employee vs contractor what is different isn't just healthcare. It also includes holidays, vacation days, sick days, employer portion of social security, education benefits, and 401k. Insurance benefits include not just healthcare but also dental, vision, short term and long term disability, and life insurance. The rule of thumb to cover all these benefits that are lost when you are a contractor is an amount equal to your income. Of course some of these benefits depend on single vs married and kids or not. But unless the rate they are paying the contractors is approaching twice the rate they are paying employees the contractor will be hard pressed to cover the missing benefits.\"",
"title": ""
},
{
"docid": "a479942a8f625eceacd97eee43d840c6",
"text": "\"Equation: (M x 12) + MOOP = Worst case scenario cost Where M equals the monthly cost and MOOP is the maximum out of pocket amount. So, if a plan costs $500 a month and the maximum out of pocket amount is $12,000 - which in a worst case scenario you would pay (it's almost always over the deductible) ... ($500 x 12) + 12,000 = $18,000 Most people look at the deductible, but be aware this is incorrect in a worst case. The last one (maximum out of pocket) really hurts most people because they overlook it: Deductible vs. out-of-pocket maximum The difference between your deductible and an out-of-pocket maximum is subtle but important. The out-of-pocket maximum is typically higher than your deductible to account for things like co-pays and co-insurance. For example, if you hit your deductible of $2,500 but continue to go for office visits with a $25 co-pay, you’ll still have to pay that co-pay until you’ve spent your out-of-pocket maximum, at which time your insurance would take over and cover everything. New in 2016: embedded out-of-pocket maximums One change in 2016 is that, even with an aggregate deductible, one person cannot pay more than the individual out-of-pocket maximum within a family plan, even if the aggregate deductible is more than the individual out-of-pocket maximum, which is $6,850 for 2016. For instance, even if the overall aggregate deductible was $10,000, a single person in that family plan could not incur more than $6,850 in out-of-pocket expenses. (In 2017, the out-of-pocket maximum will increase to $7,150.) After they hit that number, insurance covers everything for that person, even as the rest of the family is still subject to the deductible. From your question: Thanks - not sure I totally follow you. My question is, essentially: \"\"Say a typical large employer X gives you 'healthcare' as a benefit on top of your salary. In fact, how much does that cost corporation X each year?\"\" ie, meaning, in the US, about how much does that typically cost a corporation X each year? That's a good question because they may qualify for tax advantages by offering to a number of employees and there may be other benefits if they encourage certain tests (like blood work and they waive the monthly fee). More than likely, using the above equation may be the maximum that they'll pay each year per employee and it might be less depending on the tax qualifications. You can read this answer of the question and it appears they are paying within the range of these premiums listed above this.\"",
"title": ""
},
{
"docid": "d33c498b193dc8a5641c37ffc2be7c78",
"text": "\"For the person being hired this is a tricky situation. Specially with the new laws. There is no real magic number that can be applied as a lot will depend on what benefits you want, and what is actually available. This will really shift the spectrum quite a bit. Under the affordibal care act, everyone has to have insurance or pay a ?fine? (were really not sure what to call this yet) but there are two provisions that really mess with the numbers you look at as an employee. First, the cost of heath care has skyrocketed. So the same benefits that you had 5 years ago now cost maybe 10-15 times as much as they used to. This gets swept under the rug a bit because the \"\"main costs\"\" of insurance has only increased a tiny amount. What this actually comes down to is does your new ACA approved heath plan cover exactly the benefits you need, or does it cut corners. Sorry this is complicated, and I don't mean it to come off as a speech against the ACA so I will give an example. My wife has RA, she really has it under control with the help of her RA doctor. This is not something she ever wants to change. Because she has had RA from the age of 15, and because it's degenerative, she doesn't want to spend 5 years working with a new doctor to get to the same place she is with her current doctor. In addition, the main drugs she takes for RA are not covered under any ACA plan, nor are the \"\"substitutions\"\" that her doctor makes (we are trying to have kids so she has to be off the main meds, and a couple of the things this doctor has tried has been meds that reduce inflammation, are pregnancy safe, but are not for the treatment of RA) You now have to take into effect rather the cost of health insurance + the cost of the things now not covered by the heath insurance + the out of pocket expenses is worth the insurance. Second the ACA has set up provisions to straight up trick those people that have lower income and are not paying close attention. When shopping for insurance, they get quotes like \"\"$50 a month\"\" or \"\"$100 a month\"\". The truth is that the remainder of the actual cost is deducted from their tax returns. This takes consideration, because if you thing your paying $50 a month for insurance but your really paying $650 then you need to make sure your doing your math right. Finally, you need to understand how messed up things are right now in the US with heath care. Largely this goes unreported. I'm not really sure why. But in order to do this I will have to give examples. For my wife to see a specialist (her RA doctor) the co-pay is $75. So she goes to the doctor, he charges her $75 and bills the insurance $200. The insurance pays the doctor $50. With out insurance, the visit costs $50. At first you want to blame the doctor for cheating the system, but the doctor has to pay for hours of labor to get the $50 back from the insurance company. From the doctors perspective it's cheaper to take the $50 then it is to charge the insurance company. And by charging the insurance company he has no control over the cost of the co pay. He essentially has to charge more to make the same money and the patient gets the shaft in the process. Another example, I got strep throat last year. I went to the walk in clinic, paid $75, saw the doctor got my Z-Pack for $15, went home crawled in bed and got better. My wife (who still had separate insurance from before the marriage) got strep throat (imagen that) went to the same clinic, they charged her $200 for the visit ($50 co-pay) and $250 for the z-pack ($3 co-pay). The insurance paid the clinic $90 for the visit and $3 for the drugs. Again the patient is left out in this scenario. In this case it worked better for my wife, unless you account for the fact that to get that coverage she had to pay $650/month. My point is that when comparing costs of heathcare with insurance, and without out insurance, its often times much cheaper for the practices to have you self pay then it is for them to go through the loops of trying to insurance to make them whole. This creates two rates. Self pay rates and Insured rates. When your trying to figure out the cost of not having insurance then you need to use the self pay rates. These can be vastly different. So as an employee you need to figure out your cost of heath care with insurance, and your cost of heath care without insurance. Then user those numbers when your trying to negotiate a salary. The problem is that there is no magic number to use for this because the cost will very a lot. For us, it was cheaper to not have insurance. Even with a pre-existing condition that takes constant attention, it's just better if we set aside $500 a month then it is to try to pay $750 a month. That might not hold true for everyone. For some people or conditions it may be better to pay the $750 then to try to handle it themselves. So for my negotiations I would go with x+$6,000 without insurance or x+$4,500 with insurance. Now as an employer it's a lot simpler. Usually you have a \"\"group plan\"\" that offers you a pretty straight $x per year per person or $y per year per family. So you can offer exactly that. Salary - $x or Salary - $y. AS a starting point. However this is where negotiations start. If your offering me $50,500 and insurance, I would rather just have $57,000 and no insurance. Of course your real cost is only $55,000 cause you don't care about my heath care costs only about insurance costs. So you try to negotiate down towards $55,000 and no insurance. But that's not good enough for me. So I either go else where and you loose talent, or I accept $50,500 and insurance (or somewhere in between).\"",
"title": ""
},
{
"docid": "9a64a4e422546d00006289a691880038",
"text": "You could probably see prices at one of the Obamacare websites. I'm on Obamacare in Massachusetts, and the premiums for me ranged from about $300-600 per month. For a couple, you just multiply by two (couples don't get any discounts over single people). So for a couple, the cost is about $600-$1200 per month. I never looked at family prices because I don't have kids, but I think the family plans are not that much more than the plans for a couple.",
"title": ""
},
{
"docid": "70ae58b3f2af2934571009318cc30634",
"text": "\"Many answers here have given what look to be useful perspectives on your question. I want to point out an interesting technical issue. If an employer contracts with an insurer, it agrees to cover all employees (or all that fill some pre-specified definition and no one else), and to offer only a limited range of options. If you buy insurance directly, you obviously have a huge range of choices, including the (technically illegal) one of no insurance at all. Your first thought is probably, \"\"Hey, that's great! More options, more chances to pick the plan that's right for me.\"\" Sorry, no. Yes, you have more options, but so does everyone else. If you are working for some large company, you get insurance, period. If you suspect you have an expensive health condition, you cannot buy more insurance; if you believe yourself to be healthy as a horse, you cannot get skimpier insurance and pocket the difference. Healthy people and sick people are all in the same predictable pool. If you buy insurance freely, the insurer knows that the sicker you are, the more likely you are buy insurance, a phenomenon called adverse selection. As a result, the premiums (fees) a person buying his own insurance pays are much higher, because most of his fellow policy-holders are sickly -- even if he himself is just risk-averse. On the other hand, if you are risk-neutral, if you can survive a $10,000 bill if it happens to arise, you can save big by finding the skimpiest imaginable insurance, where all your fellow policy-holders will be hale and healthy people like yourself.\"",
"title": ""
},
{
"docid": "b5bdf9d528d9d22037096d1248682550",
"text": "There is some magic involved in that calculation, because what health insurance is worth to you is not necessarily the same it is worth for the employer. Two examples that illustrate the extreme ends of the spectrum: let's say you or a family member have a chronic or a serious illness, especially if it is a preexisting condition - for instance, cancer. In that case, health insurance can be worth literally millions of dollars to you. Even if you are a diabetic, the value of health insurance can be substantial. Sometimes, it could even make financial sense in that case to accept a very low-paying job. On the other extreme of the scale, if you are very young and healthy, many people decide to forego insurance. In that case, the value of health insurance can be as little as the penalty (usually, 2% of your taxable income, I believe).",
"title": ""
},
{
"docid": "f41de11d824efa4667643c97a48c8da7",
"text": "Healthcare for the employee is more valuable to the employer than is providing healthcare for the rest of the family members. Depending on the family situation, you're going to see significant differences in price between out of pocket costs for insurance of just the employee, vs cost for insuring the entire family. This is because in the first instance the insurance is more subsidized by the company (as a percentage of the total cost). The costs to the company for insuring just the individual (mid-career) are in the neighborhood of $5000 per year. If this is all that's being negotiated (single person coverage) then I would use that amount as a baseline.",
"title": ""
}
] |
[
{
"docid": "37660afb22d17741b9cf2f5567a034bd",
"text": ">and healthcare (and not sending them into poverty because of it) Healthcare in America is both the least effective and most expensive than any other developed nation. People go into poverty trying not to die on a daily basis, because our healthcare system fails to cover them",
"title": ""
},
{
"docid": "ca65ccdf576acc0f48327664e26c0056",
"text": "That's because *healthcare* is in a spiral. If insurance is paying 0.28 cents on the dollar average for care, any sane doctor is going to raise rates which in a grasp for more profits will cause insurance premiums to rise. You shouldn't be insuring something subjective like quality of life. It's dumb. Insurance should be based on binary states, and healthy/unhealthy just isn't an actual set of binary states.",
"title": ""
},
{
"docid": "1ef572d74f547abb3dee28a7951c7242",
"text": "It's difficult to quantify the intangible benefits, so I would recommend that you begin by quantifying the financials and then determine whether the difference between the pay of the two jobs justifies the value of the intangible benefits to you. Some Explainations You are making $55,000 per year, but your employer is also paying for a number of benefits that do not come free as a contractor. Begin by writing down everything they are providing you that you would like to continue to have. This may include: You also need to account for the FICA tax that you need to pay completely as a part time employee (normally a company pays half of it for you). This usually amounts to 7.8% of your income. Quantification Start by researching the cost for providing each item in the list above to yourself. For health insurance get quotes from providers. For bonuses average your yearly bonuses for your work history with the company. Items like stock options you need to make your best guess on. Calculations Now lets call your original salary S. Add up all of the costs of the list items mentioned above and call them B. This formula will tell you your real current annual compensation (RAC): Now you want to break your part time job into hours per year, not hours per month, as months have differing numbers of working days. Assuming no vacations that is 52 weeks per year multiplied by 20 hours, or 1040 hours (780 if working 15 hours per week). So to earn the same at the new job as the old you would need to earn an hourly wage of: The full equation for 20 hours per week works out to be: Assumptions DO NOT TAKE THIS SECTION AS REPRESENTATIVE OF YOUR SITUATION; ONLY A BALLPARK ESTIMATE You must do the math yourself. I recommend a little spreadsheet to simplify things and play what-if scenarios. However, we can ballpark your situation and show how the math works with a few assumptions. When I got quoted for health insurance for myself and my partner it was $700 per month, or $8400 per year. If we assume the same for you, then add 3% 401k matching that we'll assume you're taking advantage of ($1650), the equation becomes: Other Considerations Keep in mind that there are other considerations that could offset these calculations. Variable hours are a big risk, as is your status as a 'temporary' employee. Though on the flip side you don't need to pay taxes out of each check, allowing you to invest that money throughout the year until taxes are due. Also, if you are considered a private contractor you can write off many expenses that you cannot as a full time employee.",
"title": ""
},
{
"docid": "cc8d8fb90a153bfe7fc2841389b13a8a",
"text": "\"Like most forms of insurance, health insurance is regulated at the state level. So what is available to you will depend greatly upon which state you live in. You can probably find a list of insurance companies from your state's official website. Many states now provide \"\"insurance of last resort\"\" for individuals who can't get insurance through private insurance companies. You can try looking into professional and trade associations. Some offer group insurance plans comparable with COBRA coverage, meaning you'd get a group discount and benefits but without the benefit of an employer paying 30-80% of your premiums. As a software developer you may qualify for membership in the IEEE or ACM, which both offer several forms of insurance to members. The ASP also offers insurance, though they don't provide much information about it on the public portions of their website. These organization offer other benefits besides insurance so you may want to take that in to consideration. The National Federation of Independent Business also offers insurance to members. You may find other associations in your specific area. Credit Unions, Coops and the local chamber of commerce are all possible avenues of finding lower cost insurance options. If you are religious there are even some faith based non-insurance organizations that provide medical cost sharing services. They depend upon the generosity and sense of fairness and obligation of their members to share the burden of medical expenses so their definitely not for everyone.\"",
"title": ""
},
{
"docid": "4fdfc7414dbaea62334413154368e30e",
"text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/07/13/business/economy/labor-market-wages.html) reduced by 78%. (I'm a bot) ***** > We also do a lot of insurance restoration work like hail damage claims, and in those cases the insurance provider determines what they pay for labor and we work with it. > At the end of the day, if I were to say, &quot;We&#039;re a great company; we pay people double the prevailing wage, pay our insurance and taxes, buy the best materials for your house, and we give back to our community, but that means we&#039;re going to charge you double for your roof,&quot; I&#039;m sure people aren&#039;t going to say: &quot;Oh, that&#039;s so great they pay their employees $35 an hour. Let&#039;s write them a check for twice as much as their competitor because it makes us feel good!&quot; They&#039;re going to do what&#039;s best for their bank account and their budget. > That&#039;s why for us the H-2B program is a win-win: We get great workers whom we pay well above the minimum wage, and they are low-risk temporary immigrants who come here to do the job and go home to their families at the end of the season. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6nqns3/if_workers_are_scarce_is_it_the_work_or_the_wages/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~168421 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **pay**^#1 **wage**^#2 **work**^#3 **want**^#4 **people**^#5\"",
"title": ""
},
{
"docid": "a1190abed12e293e1f0971f3dcd56757",
"text": "This is very interesting, and I am fully in support of the US moving to a single-payer system such as we have here in the UK, but I am a little confused. US costs are markedly higher than the second most expensive country, that's clear. However, by my reading of the data presented, it seems as though no distinction is made between the government paying for health care, and the individual paying for health care. Much of that 1.4t is coming out of the individual's pocket, rather than the insurance company's, and that for me is the crux of the whole issue.",
"title": ""
},
{
"docid": "73ab8ecc6667c217e877bda2a9ea100b",
"text": "\"Thank goodness you replied again before i did i completely forgot to respond and that notification was a good reminder. Im genuinely enjoying the conversation and sorry about the name calling most of my political and economic debates happen with family where name calling is not only accepted but expected lol. > Too many people walk into the emergency room uninsured, or under-insured. They get emergent care that they are not covered for, and the hospitals jack up the prices greatly in the hopes of getting a larger portion reimbursed by Medicare [this link] (https://insight.kellogg.northwestern.edu/article/who-bears-the-cost-of-the-uninsured-nonprofit-hospitals) seems to contradict that statment. i dont know enough about the system to say youre wrong but it doesnt sound very real to me. >Again, Switzerland has lower tax rates than the US, but they don't even crack the top 20 when it comes to countries with low taxes. Youre obviously not wrong but there are many places on that list id love to retire in. Amongst the developed world from what im seeing [here] (https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates) has the 27th lowest individual income tax rate when it applies to there highest bracket. now i use the term \"\"developed\"\" very loosely here as there are countries ahead of them on that list that clearly arent part of the developed world but its not up to me to decide what the swiss rank is. >So you work in construction, an industry in which commercial is notorious for underbidding a contract (whether to government or to private), and then running into unexpected overages that cause the job to go over schedule, over budget. This is dangerously false. The industry isnt known for underbidding and going over budget. Only really really really bad contractors do that. What a lot of good contractors do is, when you know a general contractor for a long time or youre trying to to build a relationship you do eachother favors so they will say for instance \"\"hey man i dont have the budget to pay you what you need so take a loss on this one and we'll take care of you on the next one\"\" or they will find some money unaccounted for in the budget and throw it your way in the form of extra work done. >Its not like the government just sits around and takes it. I know of at least one federal contractor who went to federal prison for fraudulently winning contracts in my part of the country. In my line of work they really do just sit back and take it, from what ive experience you have to be super greedy and really fuck up to get their attention. 1 job i did, i was only there for 3 weeks total and in that 3 week period i saw all types of osha violations, rescource waste, time waste and plenty of govenrment workers who didnt really know what they were doing \"\"checking\"\" on the job to make sure progress was being made. >It is because government has tremendous resources that they can throw at a problem. This is where we really do differ, i see this as a bad thing. I see it as them not spending money efficiently money that they got from me and my hard work. Look at the f22 raptor for instance it is now 3 times over budget from the projections for how much of an upgrade? Whats the point of a contract if someone can just go over budget 3 times over without anyone blinking an eye. Why not just say \"\"get it done and bill us\"\". I understand your point of view completely i just vehemently disagree with it especially because i think the government source of revenue is based around theft.\"",
"title": ""
},
{
"docid": "b05306afc8fc2825db40bceff4949ea1",
"text": "> Currently many people are still getting virtually free healthcare as an untaxed employee benefit and therefore care nothing about anyone else. If they only knew how much their salary increases are being eaten up by rising healthcare costs. We are all paying for it.",
"title": ""
},
{
"docid": "3bd0d213ba6bad508c090fa5e0b2dca4",
"text": "Health insurance varies wildly per state and per plan and per provider - but check them out to have a baseline to know what it should cost if you did it yourself. Don't forget vacation time, too: many contract/comp-only jobs have no vacation time - how much is that 10 or 15 days a year worth to you? It effectively means you're getting paid for 2080 hours, but working 2000 (with the 2 week number). Is the comp-only offer allowing overtime, and will they approve it? Is the benefits-included job salaried? If it's truly likely you'll be working more than a normal 40 hour week on a routine basis (see if you can talk to other folks that work there), an offer that will pay overtime is likely going to be better than one that wouldn't .. but perhaps not in your setting if it also loses the PTO.",
"title": ""
},
{
"docid": "0932e28e15915b3b0919ac1829017967",
"text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/07/10/opinion/health-insurance-free-market.html) reduced by 71%. (I'm a bot) ***** > A believer in free-market medicine, Mr. Ryan has said about health care: &quot;You get it if you want it. That&#039;s freedom.&quot; Yet being given services without your consent, and then getting saddled with the cost, is nothing like freedom. > Deep down inside, we all intuitively know that health care is not a free market, or else society would not allow me to routinely care for people when they are in no position to make decisions for themselves. > If we believe that those lying there in their most vulnerable moments deserve a shot, then we need to push forward with the idea that health care, at its core, must be designed around a caring system that serves all people fairly. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6mg1al/dont_leave_health_care_to_a_free_market/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~163842 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **care**^#1 **health**^#2 **free-market**^#3 **want**^#4 **believe**^#5\"",
"title": ""
},
{
"docid": "f3fda49133ddf3a7714c9031ffd89e6f",
"text": "Without Obamacare I would be without insurance. Also, if you follow economic theory, the cheapest way to provide healthcare is to have a large amount of people paying into the same pool. The largest pool would be the entire population. The only way for that to function would be to pay the government to provide healthcare for all. There is an economic academic paper on this subject. I'll post it in an edit once I find it.",
"title": ""
},
{
"docid": "1e5a296417919a3349a32bef497bbb96",
"text": "\"The company itself doesn't benefit. In most cases, it's an expense as the match that many offer is going to cost the company some percent of salary. As Mike said, it's part of the benefit package. Vacation, medical, dental, cafeteria plans (i.e. both flexible spending and dependent care accounts, not food), stock options, employee stock purchase plans, defined contribution or defined benefit pension, and the 401(k) or 403(b) for teachers. Each and all of these are what one should look at when looking at \"\"total compensation\"\". You allude to the lack of choices in the 401(k) compared to other accounts. Noted. And that lack of choice should be part of your decision process as to how you choose to invest for retirement. If the fess/selection is bad enough, you need to be vocal about it and request a change. Bad choices + no match, and maybe the account should be avoided, else just deposit to the match. Note - Keith thanks for catching and fixing one typo, I just caught another.\"",
"title": ""
},
{
"docid": "2aa22bb2d815f4191f5414beea421b7f",
"text": "I'm an independent tech contractor in Canada. The single payer health care makes it so much easier to be a contractor or to create a startup. I have to wonder if the lack of healthcare in the US is the result of businesses trying to retain white collar workers that would otherwise go independent. In this environment, it's little surprise that I prefer getting those big cheques over getting benefits. Usually the benefit packages are little more than dental, many of which only provide partial coverage.",
"title": ""
},
{
"docid": "b8015c9eada9055902278c3e26c992a2",
"text": "\"Well, really, we decided that we wanted a basic level of care, but ONLY if you're REALLY poor or old. If you're working an okay job, then your employer must give you healthcare, unless they're too small, or really don't want to and make you work a few less hours so you get two part-time jobs. The role of government in the markets is to manipulate incentives towards \"\"good\"\"(e.g. employing people) activities and away from \"\"bad\"\"(e.g. polluting) activities. You really can't get that mad at companies for leveraging those incentives. I've got a puppy right now. If she misbehaves, it doesn't help me to punish her other than to make me feel better. What fixes things, is to change my behavior so that she is rewarded for doing what I think is \"\"good\"\"(e.g. chewing her toy) not what I think is \"\"bad\"\"(chewing my shoes). Sure, we can say, \"\"Bad Wal-Mart! Bad Company!\"\" but that's not going to do anything except make us feel better.\"",
"title": ""
},
{
"docid": "9ae5a9a89083c530da16130c2a45601e",
"text": "Interesting, I know a fair few doctors and lawyers (heck my fiance is a doctor) and it's not that common to earn more than $300k at 30 years old. Maybe it's more common at 50+? I know for doctors it's all dependent on your specialty, for example it's pretty common for surgeons to earn more than $300k but not so much for specialists in other fields such as palliative care or general practitioners. Then again I don't live in America so maybe it's different there.",
"title": ""
}
] |
fiqa
|
0df63d51072567cd957dcfb158d453c0
|
How to get a grip on finance?
|
[
{
"docid": "a363af68e58e52989a953606175bb805",
"text": "\"I think this question is perfectly on topic, and probably has been asked and answered many times. However, I cannot help myself. Here are some basics however: Personal Finance is not only about math. As a guy who \"\"took vector calculus just for fun\"\", I have learned that superior math skills do not translate into superior net worth. Personal finance is about 50% behavior. Take a look at the housing crisis, car loans, or payday lenders and you will understand that the desire to be accepted by others often trumps the math surrounding a transaction. Outline your goals What is it that you want in life? A pile of money or to retire early? What does your business look like? How much cash will you need? Do you want to own a ton of rental properties? How does all this happen (set intermediate goals). Then get on a budget A budget is a plan to spend your money in advance. Stick to it. From there you can see how much money you have to implement various goals. Are your goals to aggressive? This is really important as people have a tendency to spend more money then they have. Often times when people receive a bonus at work, they spend that one bonus on two or three times over. A budget will prevent this from happening. Get an Emergency Fund Without an emergency fund, you be subject to the financial whims of people involved in your own life and that of the broader marketplace. Once you have one, you are free to invest with impunity and have less stress in a world that deals out plenty. Bad things will happen to you financially, protect against them. The best first investments are simple: Invest in yourself. Find a way to make a very healthy income with upward mobility. Also get out and stay out of debt. These things are not sexy, but they pay off in the long run. The next best investment is also simple: Index funds. These become the bench mark for all other investments. If you do not stand a good chance of beating the S&P 500 index fund, why bother? Just dump the money in the fund and sleep well at night.\"",
"title": ""
}
] |
[
{
"docid": "3b2bf07e63994720b13da84861816442",
"text": "\"To me, your question emphasizes something I've heard many times before: personal finance is as much or more about behavior than it is about mathematics or \"\"head knowledge\"\". Sure, you know you shouldn't be wasting a lot of money on something you will use very infrequently, but how do you make this behavior stick? Here are a few tricks that might help: The other aspects of your question really touch more on psychology than finance. But getting yourself into a discipline habit with money will help. And realizing the full cash price of items in relation to how much your disposable income is will help you get control of your impulses, as you review your budget monthly, and keep limit yourself using the envelope system. But honestly, everybody wants stuff they don't have, it's human nature. The key is finding ways to put physical limits and guards on yourself to keep you from obeying the self-destructive impulses.\"",
"title": ""
},
{
"docid": "48de6126e09b4d109fb35118ec96977d",
"text": "Become genuinely passionate about the subject and the knowledge/experience will guide you. If you're really desperate to get a position in finance ASAP, i would recommend a financials sales path. Sales is usually the most avoided path, as well as one of the most important skill sets to have. Most people don't even know that the top investment banking positions are sales, lol.....",
"title": ""
},
{
"docid": "cedbdc99a922a2cb2d174e2739d79074",
"text": "The Khan Academy has a huge series on finance (Sal Khan used to work at a hedge fund before he started his magnum opus): http://www.khanacademy.org/#core-finance Some are pretty basic stuff, but he does have some interesting commentary and snippets of more interesting topics. They're all very low-commitment and bite-sized.",
"title": ""
},
{
"docid": "269de36d0cb782f86311de26506bb5a1",
"text": "Frederic Mishkin wrote a few text books on financial concepts that are widely used in colleges. If you're not looking for a textbook - I'd really recommend Khan Academy on YouTube. He's got some great videos on supply and demand - bonds, exchange rates - monetary policy by the federal reserve. All academically sound. They're very easy to digest and watch over again for reference.",
"title": ""
},
{
"docid": "ba6dfeb344202e59f5c6b285133567aa",
"text": "A couple of good books I enjoyed and found very understandable (regarding the stock market): As for investment information you can get lost for days in Investopedia. Start in the stock section and click around. The tutorials here (free) give a good introduction to different financial topics. Regarding theoretical knowledge: start with what you know well, like your career or your other interests. You'll get a running start that way. Beyond that, it depends on what area of finance you want to start with. If it's your personal finances, I and a lot of other bloggers write about it all the time. Any of the bloggers on my blogroll (see my profile for the link) will give you a good perspective. If you want to go head first into planning your financial life, take a look at Brett Wilder's The Quiet Millionaire. It's very involved and thorough. And, of course, ask questions here.",
"title": ""
},
{
"docid": "8bc156c5134f5fe7829656a97aba97a5",
"text": "Your question just doesn't make sense in terms of finance. The reason I recommended those questions is because it'll make yours more coherent. There's deep confusion in your question, put another way. I don't think you're thinking about money properly, specifically the ownership and it doesn't appear you've read much about trading. If you're interested in a financial career, you need to be very willing to learn independently. I think my questions are a good place to start. Honestly, you should buy a finance textbook and just go through it. It's insanely complex at the top levels so reinforcing the foundation stuff is extremely beneficial.",
"title": ""
},
{
"docid": "1ff0975850d918373a5f7ab0599dbcb3",
"text": "Just by chance I recently encountered this link - Do It Yourself MFE, which describes an attempt to self-educate to the level of Master of Financial Engineering. It lists books, online courses, etc. which I think may be interesting for you too.",
"title": ""
},
{
"docid": "ef08f8282500399d92fa6386732c2dcf",
"text": "as someone who made a fair attempt at understanding money subjects, I'd like some more writing from you. I took high school level Marketing; Business economics; commercial law. it took six months on top of my previous High school ( with high level maths). during those months I got medium grades, and failed in- can you believe it - marketing. I had a go at The intelligent investor. I made it to page 96. But honestly I felt like I needed a lot of background in order for me to understand it. English is my second language. Sure I can understand words like liability vs assets. but to this day i still can't remember the difference between a bull and bearish market. I know its about risk assesment on a national/ global level. So who honestly gave finance a go but got their ass kicked. What would you say? any books?",
"title": ""
},
{
"docid": "a55b948c4865ccff37eec744d416be8e",
"text": "\"The first thing you have to do is to decided what area in finance you want to get into. For example, investment banking and quant are very different jobs. Learning all the CFA material is useful, so you might as well take the exams too while you are at it. You may be able to get into financial IT or some type of financial programming job. That is one step closer to your goal because at least you will be at a finance company and you can network with people that are in the field. Also, if you want to go into the buy side like I did, I recommend you invest your own money and manage your own portfolio. That way you would have some intimate familiarity with some companies/strategies. You can't get this from a textbook. There is something a little wrong with someone who wants to manage other people's money when he doesn't manage his own. That is a tough sell. You can't be too picky about where you get in. Getting in the door is the most important. I got a lot of quant interviews because I was an engineer. Those interviews consist of a lot of math and brain teaser type questions. For fundamental analyst positions, they will typically want to figure out how you think about businesses/companies. You can typically steer the interview any way you want, which is why I think it is important that you invest your own money. If you say \"\"the largest position I hold is in XYZ company\"\", you can be 99% certain that they will be asking about that investment for the next 15 minutes (at least). That is your opportunity to show how you can add value. Most companies prefer students for entry level, because why hire a guy who is already working in another field when you can get someone fresh? I stood out in the interviews because I could say \"\"I put $50k into this position because...\"\". It's not the only way to do it, but I can only provide you with my anedoctal experience.\"",
"title": ""
},
{
"docid": "09efcb12d81aef7948756b5a63c6b944",
"text": "The book HOLD: How to Find, Buy, and Rent Houses for Wealth by Chader et al. was one of the best I've read on the subject. It has all of the basics, explanations, examples, and gives you real-life assumptions for your inputs when you do your analysis. It does contain some less-relevant information now that was more realistic before 2007, but it's a worthwhile read (or listen). They have some good starter worksheets, as well, on their website to help you do your analysis, which I found useful despite already having my own.",
"title": ""
},
{
"docid": "076f5a3cca12c675ad2748addcff763e",
"text": "The free Yale Course taught by Bob Shiller called Financial Markets is really good. Find it on youtube, iTunes U, academic earth, or yale's site.",
"title": ""
},
{
"docid": "80a96267a5a8e0c55503489088c27d01",
"text": "What is the best way to get into knowledge about the financial world? I have been reading some guides on investopedia, discussing the financial world with others, and looking at some tutorial videos. Are there any good books/websites that are for a newcomer to the financial world? Any help would be greatly appreciated",
"title": ""
},
{
"docid": "c39b287e6e52e6ae88ebd09f9d643f31",
"text": "Get really good at Excel. Make it a goal to have it become a specialty of yours. Practice the basics, learn to create models, read books on it, watch videos etc. As far as publications, just try and get to the usual suspects on a daily basis. WSJ, Economist, CNN Money, Yahoo Finance, Seeking Alpha, etc.",
"title": ""
},
{
"docid": "39901689d87f33aa1067214b33177033",
"text": "Buy an accounting for MBA's book and go through that. It's the absolute base of finance. I can't see how you can even wrap your head around most of the articles in FT or in the Economist if you don't know what a balance sheet, income statement, cashflow statement or statement of shareholders equity is. This is absolutely a requirement for any understanding of the finance sector, or you'll become just another schmoe on CNBC.",
"title": ""
},
{
"docid": "f7189f7907d27222a59722b0d8241f95",
"text": "What are your goals? Managing your finances is not the same for everyone. For example, do you want a more hands-off approach to finance or more hands-on? Are you looking at investments as well or just saving money? Those types of questions.",
"title": ""
}
] |
fiqa
|
3b7e9d033003b81c27ad01ac487ecca0
|
Hired with W-9, will I owe estimated tax quarterly?
|
[
{
"docid": "e5ce258c252eb127e48a7a588eb6ee11",
"text": "You must pay your taxes at the quarterly intervals. For most people the withholding done by their employer satisfies this requirement. However, if your income does not have any withholding (or sufficient), then you must file quarterly estimated tax payments. Note that if you have a second job that does withhold, then you can adjust your W4 to request further withholding there and possibly reduce the need for estimated payments. Estimated tax payments also come into play with large investment earnings. The amount that you need to prepay the IRS is impacted by the safe harbor rule, which I am sure others will provide the exact details on.",
"title": ""
}
] |
[
{
"docid": "3fe97da3da12776e31cfb58e16e57f81",
"text": "\"It's likely you don't have to make estimated tax payments if this is your first year of contracting (extra income), and your existing salary is already having taxes withheld. If you look at the 1040-ES: General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. This is easier to understand if you look at the worksheet. Look at line 14b/14c and the associated instructions. 14b is your required annual payment based on last year's tax. 14c is the lesser of that number and 14a, so 14b is your \"\"worst case\"\". 14c is the amount of tax you need to prepay (withholding counts as prepayment). I'm going to apply this to your situation based on my understanding, because it's not easy to parse:\"",
"title": ""
},
{
"docid": "b04d53ce83ed677bc2f41e24f2f00f62",
"text": "It will usually take a week or two for changes to your withholding to take effect in payroll. However 0 deductions will withhold more per check than 3. So if at 0 deductions you are having to pay in April then I would suggest not changing your W2 to 3 deductions. Instead in the section for extra with holding add $25 per week. This should leave you with a more manageable return in April.",
"title": ""
},
{
"docid": "cf9d3194a23f0e9f668052dac979fcc2",
"text": "If you have non-salary income, you might be required to file 1040ES estimated tax for the next year on a quarterly basis. You can instead pay some or all in advance from your previous year's refund. In theory, you lose the interest you might have made by holding that money for a few months. In practice it might be worth it to avoid needing to send forms and checks every quarter. For instance if you had a $1000 estimated tax requirement and the alternative was to get 1% taxable savings account interest for six months, you'd make about $3 from holding it for the year. I would choose to just pay in advance. If you had a very large estimation, or you could pay off a high-rate debt and get a different effective rate of return, the tradeoff may be different.",
"title": ""
},
{
"docid": "7d23aa8b3c8e5452c14ca9f7b33ec803",
"text": "Most countries with income tax, including the USA, design their withholding system so that in straightforward cases, tax is withheld from each month's paycheck on an annualized basis: tax for a month is calculated on the assumption that you will keep earning the same monthly amount for the rest of the year, and the withholding is set so that the tax is spread evenly across the year. Another way of putting that is that in practice you only get the tax brackets allocated proportionately throughout the year - so up till the end of August you'll only have been assigned 8/12 of the $37450 bracket, and so on. So if your income doesn't change and your general tax affairs don't change, your paycheck also shouldn't change. If your income is irregular or changes during the year then things can get more complicated. As other answers have noted, withholdings are calculated according to tables that normally just take into account that specific month's income. There are various possible changes to your tax affairs that might cause the withholdings to change. For example there'd be an impact from any change in your contributions to tax advantaged things like health insurance or retirement, health or education savings. You might also use form W-4 to change your withholdings yourself. Note that even with a regular income that doesn't change through the year, you might find yourself either owing money or being owed a refund when you file your taxes after the end of the year. It's worth making sure that your W-4 accurately records the allowances you are entitled to, to minimize or eliminate this adjustment.",
"title": ""
},
{
"docid": "b6302253c06243087d1f4e543d757815",
"text": "Ultimately, you are the one that is responsible for your tax filings and your payments (It's all linked to your SSN, after all). If this fee/interest is the result of a filing error, and you went through a preparing company which assumes liability for their own errors, then you should speak to them. They will likely correct this and pay the fees. On the other hand, if this is the result of not making quarterly payments, then you are responsible for it. (Source: Comptroller of Maryland Site) If you [...] do not have Maryland income taxes withheld by an employer, you can make quarterly estimated tax payments as part of a pay-as-you-go plan. If your employer does withhold Maryland taxes from your pay, you may still be required to make quarterly estimated income tax payments if you develop a tax liability that exceeds the amount withheld by your employer by more than $500. From this watered-down public-facing resource, it seems like you'll get hit with fees for not making quarterly payments if your tax liability exceeds $500 beyond what is withheld (currently: $0).",
"title": ""
},
{
"docid": "3d1e1dcc1720a7572a82eaa13e92c8cb",
"text": "\"Your employer can require a W8-BEN or W-9 if you are a contractor, and in some special cases. I believe this bank managing your stock options can as well; it's to prove you don't have \"\"foreign status\"\". See the IRS's W-9 instructions for details.\"",
"title": ""
},
{
"docid": "6325c6917fcb839f3924dfd764e8cc8a",
"text": "Your recruiter is likely trying to avoid having to pay the employer's side of employment taxes, and may even be trying to avoid having to file a 1099 for you by treating your relationship as a vendor/service provider that he is purchasing services from, which would make your pay just a business expense. It's definitely in his best interest for you to do it this way. Whether it's in your best interest is up to you. You should consult a licensed legal/tax professional to help you determine whether this is a good arrangement for you. (Most of the time, when someone starts playing tax avoidance games, they eventually get stung by it.) The next big question: If you already know this guy is a snake, why are you still working with him? If you don't trust him, why would you take legal/tax advice from him? He might land you a high-paying job. But he also might cause you years of headaches if his tax advice turns out to be flawed.",
"title": ""
},
{
"docid": "67ea53fdb59599c1da7dc8de5c972c19",
"text": "Do you have a regular job, where you work for somebody else and they pay you a salary? If so, they should be deducting estimated taxes from your paychecks and sending them in to the government. How much they deduct depends on your salary and what you put down on your W-4. Assuming you filled that out accurately, they will withhold an amount that should closely match the taxes you would owe if you took the standard deduction, have no income besides this job, and no unusual deductions. If that's the case, come next April 15 you will probably get a small refund. If you own a small business or are an independent contractor, then you have to estimate the taxes you will owe and make quarterly payments. If you're worried that the amount they're withholding doesn't sound right, then as GradeEhBacon says, get a copy of last year's tax forms (or this year's if they're out by now) -- paper or electronic -- fill them out by estimating what your total income will be for the year, etc, and see what the tax comes out to be.",
"title": ""
},
{
"docid": "12145f28caf8629f91f0f822a8de3b2c",
"text": "Don't overthink it. As an employee, whether of your own corporation or of someone else, you get a salary and there are deductions taken out. As the owner of a business you get (hopefully) business profits as well. And, in general, you often have other sources of income from investments, etc. Your estimated tax payments are based on the difference between what was withheld from your salary and what you will owe, based on salary, business income, and other sources. So, in essence, you just add up all the income you expect, estimate what the tax bill will be, and subtract what's been withheld. That's your estimated tax payment.",
"title": ""
},
{
"docid": "a30c7eb9e87bc88e5f6f9fef0e1ae22b",
"text": "\"I would suggest you pay quarterly. Or, if you prefer, do the extra withholding. Don't wait until the end of the year. My experience is that of having a day job with freelance work on the side. I've spent a few years just freelancing, and I paid quarterly as requested to avoid the penalties. Now that I have a good day job again, my freelancing is just a small part of my income, and so I end up with a net return and no longer have to pay quarterly. You shouldn't wait until the end of the year to pay. This is assuming your wife is bringing in a decent income. The only scenario where you would want to wait is if her income is only a small amount (such as my wife's plans for an Etsy store). To the IRS, it doesn't really make a difference whether you withhold extra or pay quarterly. Of those two choices, my preference is to pay quarterly - it's easy to set up calendar reminders on the quarterly payment dates, which are always the same. I did the same as bstpierre when estimating my payments: just take last year's tax (for the business) and divide by 4 (adjusting for any obvious situational differences). That's usually close enough. Paying quarterly instead of via withholding means you get to hold on to your money (on average) for 6 weeks longer. Granted, that doesn't mean much with today's interest rates, but it's something. You may prefer the simpler accounting for withholding, though - you can \"\"set and forget\"\".\"",
"title": ""
},
{
"docid": "f5cfa6200bbb4657e77e736027602d4d",
"text": "It is true that with a job that pays you via payroll check that will result in a W-2 because you are an employee, the threshold that you are worried about before you have to file is in the thousands. Unless of course you make a lot of money from bank interest or you have income tax withheld and you want it refunded to you. Table 2 and table 3 in IRS pub 501, does a great job of telling you when you must. For you table 3 is most likely to apply because you weren't an employee and you will not be getting a W-2. If any of the five conditions listed below applied to you for 2016, you must file a return. You owe any special taxes, including any of the following. a. Alternative minimum tax. (See Form 6251.) b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other taxfavored account. (See Pub. 590A, Contributions to Individual Retirement Arrangements (IRAs); Pub. 590B, Distributions from Individual Retirement Arrangements (IRAs); and Pub. 969, Health Savings Accounts and Other TaxFavored Health Plans.) But if you are filing a return only because you owe this tax, you can file Form 5329 by itself. c. Social security or Medicare tax on tips you didn't report to your employer (see Pub. 531, Reporting Tip Income) or on wages you received from an employer who didn't withhold these taxes (see Form 8919). d. Writein taxes, including uncollected social security, Medicare, or railroad retirement tax on tips you reported to your employer or on groupterm life insurance and additional taxes on health savings accounts. (See Pub. 531, Pub. 969, and the Form 1040 instructions for line 62.) e. Household employment taxes. But if you are filing a return only because you owe these taxes, you can file Schedule H (Form 1040) by itself. f. Recapture taxes. (See the Form 1040 instructions for lines 44, 60b, and 62.) You (or your spouse if filing jointly) received Archer MSA, Medicare Advantage MSA, or health savings account distributions. You had net earnings from selfemployment of at least $400. (See Schedule SE (Form 1040) and its instructions.) You had wages of $108.28 or more from a church or qualified churchcontrolled organization that is exempt from employer social security and Medicare taxes. (See Schedule SE (Form 1040) and its instructions.) Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Health Insurance Marketplace. You should have received Form(s) 1095A showing the amount of the advance payments, if any. It appears that item 3: You had net earnings from selfemployment of at least $400. (See Schedule SE (Form 1040) and its instructions.) would most likely apply. It obviously is not too late to file for 2016, because taxes aren't due for another month. As to previous years that would depend if you made money those years, and how much.",
"title": ""
},
{
"docid": "5923619c7a3b18fc6934a3f2d6b95dc8",
"text": "You will not necessarily incur a penalty. You can potentially use the Annualized Income Installment method, which allows you to compute the tax due for each quarter based on income actually earned up to that point in the year. See Publication 505, in particular Worksheet 2-9. Form 2210 is also relevant as that is the form you will use when actually calculating whether you owe a penalty after the year is over. On my reading of Form 2210, if you had literally zero income during the first quarter, you won't be expected to make an estimated tax payment for that quarter (as long as you properly follow the Annualized Income Installment method for future quarters). However, you should go through the calculations yourself to see what the situation is with your actual numbers.",
"title": ""
},
{
"docid": "1406ad7d12bc3a17399d0be238045b5b",
"text": "I am surprised no one has mentioned the two biggest things (in my opinion). Or I should say, the two biggest things to me. First, 1099 have to file quarterly self employment taxes. I do not know for certain but I have heard that often times you will end up paying more this way then even a W-2 employees. Second, an LLC allows you to deduct business expenses off the top prior to determining what you pay in taxes as pass-through income. With 1099 you pay the same taxes regardless of your business expenses unless they are specifically allowed as a 1099 contractor (which most are not I believe). So what you should really do is figure out the expense you incur as a result of doing your business and check with an accountant to see if those expenses would be deductible in an LLC and if it offsets a decent amount of your income to see if it would be worth it. But I have read a lot of books and listened to a lot of interviews about wealthy people and most deal in companies not contracts. Most would open a new business and add clients rather than dealing in 1099 contracts. Just my two cents... Good luck and much prosperity.",
"title": ""
},
{
"docid": "7631499e373cae1204e353f7b36277e8",
"text": "Welcome to the wonderful but oft confusing world of self-employment. Your regular job will withhold income for you and give you a W2, which tells you and the government how much is withheld. At the end of the year uber will give you and the government a 1099-misc, which will tell you how much they paid you, but nothing will be withheld, which means you will owe the government some taxes. When it comes to taxes, you will file a 1040 (the big one, not a 1040EZ nor 1040A). In addition you will file a schedule C (self-employed income), where you will report the gross paid to you, deduct your expenses, and come up with your profit, which will be taxable. That profit goes into a line in the 1040. You need to file schedule SE. This says how much self-employment tax you will pay on your 1099 income, and it will be more than you expect. Self employment tax is SS/Medicare. There's a line for this on the 1040 as well. You can also deduct half of your self-employment tax on the 1040, there's a line for it. Now, you can pay quarterly taxes on your 1099 income by filing 1040-ES. That avoids a penalty (which usually isn't that large) for not withholding enough. As an alternative, you can have your regular W2 job withhold extra. As long as you don't owe a bunch at tax time, you won't be a fined. When you are self-employed your taxes aren't as simple. Sorry. You can either spend some time becoming an expert by studying the instructions for the 1040, pay for the expensive version of tax programs, or hire someone to do it for you. Self-employed taxes are painful, but take advantage of the upsides as well. You can start a solo 401(k) or SEP IRA, for example. Make sure you are careful to deduct every relevant business expense and keep good records in case you get audited.",
"title": ""
},
{
"docid": "c980bab86b11f8a11a08b697e3987cf5",
"text": "The I-9 form is required because you are working. It is kept by the employer as proof that you have the proper documents to work. If the government was to inspect their records they can be fined if they don't have those document, in fact they have to keep them for several years after your employment is done. A w-4 form is a federal tax form. There also was probably a state version of the form. When you completed the w-4 it is used by your employer to determine how much in taxes need to be withheld. Employers don't know your tax situation. Even though you are on work study, you still could have made enough money over the summer to pay taxes. But if this is your only job, and you will not make enough money to have to pay taxes, you can fill out the form as exempt. That means that last year you didn't make enough money to have to pay taxes, and you don't expect to make enough to have to pay taxes this year. If you are exempt, no federal income tax will be withheld. They might still withhold for social security and medicare. The state w-4 can also be used to be exempt from state taxes. If they withhold any income taxes you have to file one of the 1040 tax forms to get that income tax money back. You will have to do so for the state income tax withholding. A note about social security and medicare. If you have an on campus job, at the campus you attend, during the school year; they don't withhold money for social security and medicare. That law applies to students on work study jobs, and on non-work-study jobs. for single dependents the federal threshold where you must file is: > You must file a return if any of the following apply. Your gross income was more than the larger of— a. $1,000, or b. Your earned income (up to $5,850) plus $350.",
"title": ""
}
] |
fiqa
|
0993c183c1b917576497318629f6d459
|
How should one refuse to father in law (Chinese) when he wants to borrow money?
|
[
{
"docid": "5a709748c1e96a752fe134116569609c",
"text": "\"In these situations, one solution is to use the \"\"I was just about to ask you the same thing...\"\" response. This is kind of a famous way to deal with people asking you for money, whether it's someone asking to borrow \"\"$10 at lunch time\"\" or \"\"$3000 for a car\"\" or the like. So: Person X asks you for money, say $2000. Your reply: Ah, that's bad luck, I was just about to ask you the same thing... Follow this immediately - just keep talking - by launching in to a really incredibly detailed discussion of why you need to borrow money (pick a slightly larger amount, slet's ay $3500). Just \"\"keep talking\"\" and don't let the other person get a word in. Go in to great detail about just what you need the $3500 for and why. It's a good trick.\"",
"title": ""
}
] |
[
{
"docid": "0a8334685586359d464d1eee78129ba8",
"text": "\"Assuming United States; rules may be wildly different elsewhere... The \"\"family loan\"\" trick essentially lets you amortize a gift over multiple years of gift allowance and hopefully dodge gift tax, at the cost of having to pay income tax on the interest you must charge on the loan. The main advantage is that it lets you transfer all the money up front, rather than in $17,000-a-year-per-person-per-person chunks. Let's take the normal case first. Any one person can give any one person up to a specified amount (currently $17k, I believe,) without incurring gift tax. Note that this is counted per person, not per household; you and your spouse could each give $17k per year to each of your son and his spouse under this rule, adding up to $68k per year total. The family loan dodge consists of making them a loan of the money at the mandated minimum interest rate to make it a legal loan (something like 0.3% APR last time I looked), setting the repayment schedule so their payments each year including interest come out to less than you can gift them with tax-free, and then making that gift by paying (yourself) those payments on their behalf. You do need to pay income tax on the portion of those payments that represents interest income, but at that low rate this is a minor cost for the convenience. You'd also want to set up your will to cover what happens if you die with them still owing money on the loan. And this, I believe, is where you will really need expert advice if you go this route, to minimize the government's cut at that time. There may be better answers. If you are talking about this much money, you owe it to yourself to purchase expert advice from someone who has training and experience n this area, rather than taking free advice from the Internet that is likely to cost you much more in the long run. This is a situation where you can't afford not to hire a pro. (For example, I have no idea how trusts might or might not fit your needs.)\"",
"title": ""
},
{
"docid": "5ea0d2729ad6a4532f928aabff6b2bd6",
"text": "If your intentions are honorable and you intend to pay it back in full and with interest, doesn't matter where you borrow the money from. But as a rule, family/friends and money don't mix.",
"title": ""
},
{
"docid": "cd08117069dd39c471f4e395776830a6",
"text": "You are using interchangeably borrow/loan and gift. They are very different. For the mortgage company, they would prefer that the money from friends and family be a gift. If it is a loan, then you have an obligation to pay it back. If they see money added to your bank accounts in the months just before getting the loan, they will ask for the source of the money. Anything you claim as a gift will be required to be documented by you and the person making the gift. You don't want to lie about it, and have the other person lie about it. They will make you sign documents, if they catch you in a lie you can lose the loan, or be prosecuted for fraud. If the money from friends and family is a loan, the payments for the loan will impact the amount of money you can borrow. From the view of the IRS the gift tax only comes into play if during one calendar year a person makes a gift to somebody else of 14,000 or more. There are two points related to this. It is person-to-person. So if your dad gives you 14K, and your mom gives you 14K, and your dad gives your wife 14k and your mom gives your wife 14K; everything is fine. So two people can give 2 people 56K in one year. Please use separate checks to make it clear to the IRS. If somebody gives a gift above the exclusion limit for the year, they will have to complete IRS form 709. This essentially removes the excess amount from their life time exclusion, in other words from their estate. Nothing to worry about from the IRS. The bank wants to see the documentation. Also you are not a charity, so they can't claim it as a donation. Why do you have 6,000 in cash sitting around. The mortgage company will want an explanation for all large deposits so you better have a good explanation. From the IRS FAQ on Gift Taxes: What can be excluded from gifts? The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts. Number 3 on the list is the one you care about.",
"title": ""
},
{
"docid": "0f422c0f802ac7f1df127f96a2e1c1e2",
"text": "It's perfectly legal for your brother to make a loan to you. However those two transactions are separate. If he defaults on the LC loan because you didn't pay him, it's his responsibility. If you default on your loan with him, you've got big problems. Money + family/friends = scary.",
"title": ""
},
{
"docid": "c9fabb1dae4afdd4f326ff0595b5be42",
"text": "Echoing the others, never lend money to a friend or family member, just give it to them. If you must have a contract in place then consider it a pay it forward type contract where the friend simply gives the same amount to someone in need at a future date. The value of the friendship can never be measured, but it surely will be diminished by the amount of the loan between the two of you.",
"title": ""
},
{
"docid": "471cf77dadff4da873d468a9f47e4634",
"text": "Trying to forcefully reclaim the money will ruin the relationship. In general it's bad practice to loan money to family.",
"title": ""
},
{
"docid": "147d3f1cc3989a3f208c573d1303da36",
"text": "I recently lent some money to my sister. While I generally agree with Phillip that lending to family and friends should be avoided, I felt I needed to make an exception. She really needed the cash, and my husband and I agreed that we would be ok without it. Here are some guidelines I used that may be helpful to others: In the end, I think lending to family and friends should be avoided, and certainly should not be done lightly, but by communicating clearly and directly, and keeping careful records, I think you can help someone out and still avoid the lingering awkwardness at future Thanksgivings when one person is convinced that the other owes one more payment, and the other swears it was paid in full.",
"title": ""
},
{
"docid": "d77db73e41b716cd2cce4a56d9ae8161",
"text": "What you are positioning as a loan was not a loan at all. Your father bought something to be delivered in the future. Your aunt does not want to deliver it, so she should buy it back at whatever the current market value is. What is the price that your dad believes her share of the inheritance is currently worth? Is that based on actual appraisals and some sort of objective audit? If so, your aunt doesn't have much of a case. If not, then she could seek an audit to bolster her bargaining position. How much did your aunt benefit from having a place to live for the last 15 years. Was that benefit greater than some larger amount of money at an unknown future date? That's probably why she sold her inheritance 15 years ago. Now that the inheritance looks like it is going to be available soon, she wants to trade back after having enjoyed the use of your father's money. That might be okay, but simply paying back the original sum with inflation, but without interest, doesn't seem fair to your father. She may not be able to afford to give any more than what she is offering, in which case, she might want to consider offering the original sum now and some portion of her inheritance as interest on that original sum. I'm not taking sides in this one. If it were one of my siblings, I'd be inclined to give the benefit of the doubt and take a smaller amount back if I felt that the lesson was learned (and if I felt that he/she would make wise use of my gift to him/her). I have no idea what your father's current economic situation is, nor am I aware of any other baggage that might influence his feelings about his sister. It's as likely as not that money isn't really what is bothering him, in which case, the amount she repays may have little to do with bridging the divide between them. You might need to ask different questions in the Interpersonal Skills stack if you want to help your father feel better.",
"title": ""
},
{
"docid": "daaca503aa30d95ef943eb99ce5fbee2",
"text": "There are two Questions: Financial institutions do not care about your nationality, only your ability to pay over time. For long term debt the lender will want assurances that the borrower has the ability and means to pay the debt over time. A legal resident in the US should have no more difficulty obtaining financing than a citizen under similar life circumstances. The Lender is also under legal obligation to confirm that the borrower is who they say they are, will have the ability to pay over time AND have no malicious intent in the purchase. Persons who do not have legal status in the US, AND who do not have the means to pay for property outright will have difficulty obtaining financing as they will have trouble establishing the requirements of the Lender. This is simple math, a lender will be reluctant to lend to any person who is more likely to have difficulty paying the obligation than another. In your case Your father would be an unlikely candidate for a mortgage because he cannot establish his legal status nor can he guarantee that he will have the legal right to earn a means to pay the loan back. This puts the lender at risk both of losing the money lent AND losing the right to repossess the property if the borrower doesn't pay. Despite all of the obstacles I have indicated above, it is still possible for your father to purchase property legally, but the risk and the cost go way up for him as a borrower. There may be sellers willing to finance property over time, but your father's status puts him at a disadvantage if the seller is not honest. There may be community coalitions which can help you work through the challenges of property ownership. Please see these related articles",
"title": ""
},
{
"docid": "b24150f078a397284069287170be6afd",
"text": "> My wife is trying to start a business. She has no experience at all. Don't put in too much money. Use this as a chance to learn because she's going to have a bad experience. > She is working with the husband of a friend who is importing products from China. Red flag #1. > He is in China and his wife is in the USA on a tourist visa (no work allowed but she works) Red flag #2. > I have caught this guy lying or being way less than transparent many times. You're telling me that a guy using his wife to illegaly conduct business in the US isn't above board? I'm shocked. Shocked, I tell you. > I think he thinks others are stupid and can not easily see his misdeeds. That could be a red flag, or he could be correctly reading the situation. You said your wife has no experience in this arena, so why would he listen to her? > “You tried to screw with me and my wife too many times so F you” Red flag #3. Don't mix business with emotions. > I am asking for a settlement or I will do everything in my power to totally screw up his life Red flag #4. > It will never stop or improve if the second party has a less than acceptable level of honesty and transparency. This is why contracts and lawyers exist. In business, everyone thinks they're making out better than the person on the other end of the table. If they didn't, they would ask for more. There can be mutually beneficial situations, but showing all of your cards is a great way for them to be used against you during negotations. > It is a startup not big money, but us being in the USA as lawful citizens (me USA born, my wife naturalized Chinese ), we hold the risk here. Yeah, don't knowingly break the law. The risk is too high for you. > I lived in China for ten years. Over there, the Chinese do, in almost all cases, all they can do to screw foreigners Red flag #5. Why do you want to be in business with a group you think will almost always exploit you? > My wife thinks that because they are Chinese (the other party), I should be willing to accept this behavior. I totally disagree. Red flag #6. Don't use stereotypes to make judgment calls. > My wife wants to have her own company very badly and she is very disappointed. Life is full of disappointment, and you can't wish for success. Well, you can, but you end up in situations like these. > Do you agree when dealing with lying business “partners” if the offenses continue, even after a warning, that all bets should be off and one should change into “screw them” mode and claw back all possible money/power via all available legal resources? Say it with me. CONTRACTS! CONTRACTS! CONTRACTS! I'm not talking about a quick signature on a napkin. I'm talking about vetted and formalized. You have clear expectations. You have remediation. You have timeframes. If they don't deliver the promised expectation then you sue them. If you act on emotions then you are likely to do yourself more harm than good. If you don't think you can recover what you're due, you shouldn't be in business with a shady operator to begin with. > Comments? Talk to a lawyer. You need to understand your risk and liability. If you're fine, stop investing money into this venture. You'll be taken for all you're worth.",
"title": ""
},
{
"docid": "7f095485f8cb5da37475c27ba9a17d51",
"text": "I say to always say yes when asked to loan money to a friend or family member as long as you have the money to do it with. That is the key: having th emoney to do it with. And - don't expect to get it back ever. If you do, great. When you don't, your expectation was met. Although not often, I've lent money to friends and most of the time have been paid back. $10, $300, more. For the times when I was not, I do remember but I don't hold it against the person. Money is only money, after all. Friends are precious and worthy of your aid, support, and respect. If they weren't, then one must ask if they are really a friend. - I have also had to borrow money once for a non-trivial amount. My family, who can easily afford it, refused but a friend helped me at a critical juncture. I offered to make a contract but my friend said no, pay me back when you can. I have tried to start paying back a couple of times but my friend refused telling me to wait until I was more financially stable. - If I am ever lucky enough to be in the position my friend is in, I will emulate this behavior and do the very same thing - and love doing it all the while.",
"title": ""
},
{
"docid": "45185420c394230f6ea4c738968825fd",
"text": "To understand this fully one would need to understand quite a few things. Not in scope here. In short, whenever China sells goods to US, it gets USD as most of the trades are in USD. China uses this money to buy other things it needs like Oil etc. After this they still have quite a bit of USD left with them. The money is left with them because US is buying more things from China and selling less things to China. This creates a surplus USD with China. So if US were to borrow money from China or any other country, it would be this excess money. Ofcourse how money gets created in first place is a different topic altogether.",
"title": ""
},
{
"docid": "0d0c732d4120cc999a357aa7c502dc79",
"text": "Yea, honestly taking in debt is pretty much never a good idea. Even borrowing from your own family can cause issues. It better be a very serious issue if you're trying to borrow and use money you don't have. Especially if we're talking about figured that are high relative to your income stream and/or that of the person you're borrowing from if it's not an official entity.",
"title": ""
},
{
"docid": "f62e1d6e5427c04a8259add514d801be",
"text": "I struggle to see the value to this risk from the standpoint of your mother-in-law. This is not a small amount of money for a single person to lend to a single person ignoring your personal relationship. Right now, using a blended rate of about 8% and a 5 year payment period, your cost on that $50,000 is somewhere in the neighborhood of $11,000 with a monthly payment around $1,014. Using the same monthly payment but paying your MIL at 5% you'll complete the loan about 3.5 months sooner and save about $5,000, she will make about $6,000 in interest over 5 years against a $50,000 outlay. Alternatively, you can just prioritize payments to the more expensive loans. It's difficult to work out a total cost comparison without your expected payoff timelines and amount(s) you're currently paying toward all the loans. I'm sure a couple hours with a couple of spreadsheets could yield a plan that would net you a savings substantially close to the $5,000 you'd save by risking your mother in law's money. A lot of people think personal lending risk is about the relationship between the people involved, but there's more to it than that. It's not about you and your wife separating, it's not about the awkward dinner and conversations if you lose your job. Something might physically happen to you, you could become disabled or die. Right now, that's an extremely diversified and calculated risk taken by a gigantic lender. Unless your mother in law is very wealthy, this is not nearly enough reward to assume this sort of risk (in my opinion). Her risk FAR outpaces your potential five year savings. IF you wanted to pursue this as a means of paying interest to a family member rather than the bank, I'd only borrow an amount I budgeted and intended to pay within this single year. Say $10,000 against the highest interest loan.",
"title": ""
},
{
"docid": "1165f18fe6b2faae232ce9041dd42660",
"text": "I suppose it depends on the circumstances, but I wouldn't advise it. If you default on a loan to the bank it might ruin your credit, if you default to a family member it has the potential for much more damage in the form of fostering bad feelings and hurt the relationship.",
"title": ""
}
] |
fiqa
|
f0fadfb214daf20915ed5e9f4715cf6d
|
Why are residential investment properties owned by non-professional investors and not large corporations?
|
[
{
"docid": "f11efb8a075ef99cef40110adf99057a",
"text": "\"Because the returns are not good. One of the big drivers in Australia is \"\"negative gearing\"\": if your investment loses money you can offset losses against your tax on other income. Institutional investors and corporations are in the business of making money: not losing it. Housing market investors are betting that these year to year revenue losses will ultimately be made up in a big capital gain: for which individuals get a huge tax break that is also not available to corporations. Capital gains are not guaranteed. Australia has benefited from 25+ years of economic, employment and wages growth: a result of good government planning, strong corporate governance and a fair slice of luck. If this were to end housing prices would plateau at best and crash at worst. A person who has negative cash flow investments has to sell them urgently if they lose their job. A glut of mortgagee sales and property prices could easily come off 20-30%. Rental yields on residential property in Sydney are about 4% with a capital gain of currently 10% but this has been flat or negative within the last 5 years and no doubt will be again within the next 5. Rental yields for residential property are constrained by mortgage rates: if it significantly cheaper to buy then to rent, why would anyone rent? In contrast, industrial and commercial property gets a yield of about 7% and gets exactly the same capital gain. This is because land is land and if the price of industrial land doesn't grow at the same rate as the residential land next door eventually one will be converted into the other. Retail rentals are even higher. In addition commercial tenants are responsible for more outgoings and have fewer legal rights than residential tenants. Further, individual residential properties are horribly illiquid and have large transaction costs. While it is possible to bundle them up into property trusts so that units can be sold on the stock exchange it is far more common to do this with office and retail buildings. This is what companies like Westfield and AMP Capital do. Notwithstanding, heavily geared property trusts can get into deep water because of the illiquid nature of property as the failure of Centro illustrates. That said, there are plenty of companies that develop residential houses and units for sale to owner occupiers or investors because that's where the money is.\"",
"title": ""
},
{
"docid": "d006258069669f318941d0f314281530",
"text": "Your experience is anecdotal (outside Australia things are different). There are many companies and real estate investment trusts (REITs) that own residential properties (as well as commercial in many cases to have a balanced portfolio). They are probably more common in higher-density housing like condos, apartment buildings, flats, or whatever you like to call them, but they are certainly part of the market for single family units in the suburbs as well. What follows is all my own opinion. I have managed and rented a couple of properties that I had lived in but wasn't ready to sell yet when I moved out. In most cases, I wish I would have sold sooner, rather than renting them out. I think that there are easier/less risky ways to get a good return on your money. Sometimes the market isn't robust enough to quickly sell when it's time to move, and some people like the flexibility of having a property that a child could occupy instead of moving back in at home. I understand those points of view even if I disagree with them.",
"title": ""
},
{
"docid": "5f47b6796e15fb0f25e9c9892d4f783a",
"text": "\"Economy of scale on one side versus \"\"person monetizing an illliquid asset\"\" on the other. Most multifamily rental buildings are owned by professional real estate investors (as well as individuals growing an empire to become a professional real estate investor whom I will count in this group). The rental difference between a 2000 Sq foot two bedroom apartment and 2000 Sq foot two bedroom standalone house is not large. The construction cost per square foot for a standalone house is higher than for a multifamily building (of similar height and materials). Maintenance calls, landscaping, and new roofs, dealing with permits and inspections, etc are much more efficient with multifamily properties. On the supply side, most single family rentals tend to be the nonprofessional single property owner because they happen to already own the place, and for one reason or another a. Don't want to sell and b. Want to gain cash flow on the asset.\"",
"title": ""
},
{
"docid": "f954722876bfa4acb9331c336341e5db",
"text": "As other answers have pointed out, professional real estate investors do own residential investment properties. However, small residential units typically are not owned by professional real estate investors as your experience confirms. This has a fairly natural cause. The size of the investment opportunity is insufficient to warrant the proper research/due diligence to which a large investment firm would have to commit if it wanted to properly assess the potential of a property. For a small real estate fund managing, say, $50 MM, it would take 100 properties at a $500K valuation in order to fully invest the funds. This number grows quickly as we decrease the average valuation to reflect even smaller individual units. Analogously, it is unlikely that you will find large institutional investors buying stocks with market caps of $20 MM. They simply cannot invest a large enough portion of total AUM to make the diligence make economic sense. As such, institutional real estate money tends to find its way into large multi-family units that provide a more convenient purchase size for a fund.",
"title": ""
},
{
"docid": "7d5f5db10c52065135ec4d901d3cadec",
"text": "None of the previous answers calls out an important factor to residential property ownership bias towards individual investors. The amount of time spent managing (leasing, maintenance and rent collection) on single properties is much higher, per property, than larger investments. But what is mentioned in passing is the bias towards smaller investments. Fewer individuals have the capital to purchase and engage in the leasing of multi-tenant properties, but they are more likely to have the funds for smaller investments. So the smaller investor can both afford the entry costs, and the time investment, while the larger corporate entities benefit from the opposite proposition.",
"title": ""
}
] |
[
{
"docid": "562c42a443fff22c390f5e45bb7d2402",
"text": "\"Maybe a bit off topic, but I suggest reading \"\"Rich Dad Poor Dad\"\" by Robert Kiyosaki. An investment is something that puts money to your pocket. If your properties don't put money to your pocket (and this seems to be the case), then they're not an investment. Instead, they drain money from you pocket. Therefore you should instead turn these \"\"investments\"\" into real investments. Make everything to earn some money using them, not to earn money somewhere else to cover the loses they create. If that's not possible, get rid of them and find something that \"\"puts money into your pocket\"\".\"",
"title": ""
},
{
"docid": "04bc38af33a77e553afb790380e0d30b",
"text": "You seem to underestimate the risk of this deal for the inverstors. A person purchasing a residence is happy to pay $70K instead of $150K now, and the only risk they take is that the construction company fails to build the condo. Whatever happens on the estate market in two years, they still saved the price difference between the price of complete apartments and to-be-build apartments (which by the way may be less than $150K-$70K, since that $150K is the price on a hot market in two years). However, an investor aiming to earn money counts on that the property will actually cost $150K in two years, so he's additionally taking the risk that the estate market may drop. Should that happen, their return on investment will be considerably lower, and it's entirely possible they will make a loss instead of a profit. At this point, this becomes yet another high risk investment option, like financing a startup.",
"title": ""
},
{
"docid": "5938b4fa65cfd89f3ab79fcaa8841dc8",
"text": "\"No. One of the key ideas behind a corporation is that an investor's liability is limited to the amount he invests, i.e. the amount of stock he buys. This is the primary reason why small businesses become corporations, even though one person owns 100% of the stock. Then if the business goes broke, he won't lose his house, retiretment fund, etc. He'll lose everything he had in the business, but at least there's a limit to it. (In some countries there are other ways to achieve the same results, like creating a \"\"limited liabililty company\"\", but that's another story.)\"",
"title": ""
},
{
"docid": "111f74c4834d4b8adee65a1ad58c9d5f",
"text": "There are many different reasons to buy property and it's important to make a distinction between commercial and residential property. Historically owning property has been part of the American dream, for multiple reasons. But to answer your questions, value is not based on the age of the building (however it can be in a historic district). In addition the price of something and it's value may or may not be directly related for each individual buyer/owner (because that becomes subjective). Some buildings can lose there value as time passes, but the depends on multiple factors (area, condition of the building, overall economy, etc.) so it's not that easy to give a specific answer to a general question. Before you buy property amongst many things it's important to determine why you want to buy this property (what will be it's principal use for you). That will help you determine if you should buy an old or new property, but that pales in comparison to if the property will maintain and gain in value. Also if your looking for an investment look into REIT (Real Estate Investment Trust). These can be great. Why? Because you don't actually have to carry the mortgage. Which makes that ideal for people who want to own property but not have to deal with the everyday ins-and-outs of the responsibility of ownership....like rising cost. It's important to note that the cost of purchase and cost of ownership are two different things but invariably linked when buying anything in the material strata of our world. You can find publicly traded REITs on the major stock exchanges. Hope that helps.",
"title": ""
},
{
"docid": "305d3ec3e1f18db076a292d195059ffe",
"text": "See my post listing Trumps failures. Clearly lenders/investors/people get sucked into things all the time. P.S. Established Corps and LLC are granted credit all the time. In my example I never mentioned how old or established, or well funded any of these Corps were.",
"title": ""
},
{
"docid": "894a82638811fff4f97d76519433e819",
"text": "The Oligarchy does not like small business owners. The successful ones challenge their monopolies. They don't dislike the working class as long as they keep refusing to demand living wages. Living wages cut into not only *their* profits, but it depresses the yacht industry. Who wants to pay taxes when you have so much income and wealth when you can leave that to the rest of us?",
"title": ""
},
{
"docid": "be8de2e1430fb493683aa73ca16e75e7",
"text": "Wow, crappy article. To answer the question: extremely cheap areas in proximity to urban wealth are the best places to speculate in terms of large-scale real-estate developments. A golf-course developer ideally wants a huge amount of cheap land in close proximity to some combination of wealthy retirees, business-executives, or vacationers. Traditionally that means farmland or undeveloped land on the fringes of urban areas. But there's not a lot of that left in America. Blighted and depressed suburbs or neighborhoods with lots of abandoned housing are the new under-utilized farmland. This is how gentrification happens. Some factory-town goes under, gets poor, goes to the dogs, and eventually the big old mill-building becomes cheap enough for a movie-studio, nightclub-impresario, shopping-mall developer, art-gallery, or whatever to take an interest. A lot of them fail, but the ones that succeed drive up the surrounding property-values a little bit. Shuttered storefronts get rented to restaurants and retailers catering to the moneyed visitors. Richer people move into the nearby homes and drive up property values. Savvy real-estate developers work on a multi-year time horizon. They are not paying cash, they are borrowing, and they are counting on the totality of circumstances to repay the debt not just with greens-fees but with real-estate appreciation. You or I could not simply buy one house in a poor neighborhood and hope to reinvigorate it, no matter how nicely we kept our lawn. But someone bringing in $500mm in financing is *counting* on transforming the area, not on getting poor people to pay the greens fees. They're not selling golf to poor people, they're selling cheap land to golfers. It might fail spectacularly, but if it works, the plan will bring jobs, capital, development, and appeal to a blighted, jobless, decaying neighborhood.",
"title": ""
},
{
"docid": "c5418a183ba63cd8d28a292d6aae000b",
"text": "In such cases, it has a EIN, like any business would. Even absent the rent you suggest, the condo should have reserve funds, similar to an individual's emergency account, only more codified as to level and flows. These funds should be earning interest.",
"title": ""
},
{
"docid": "5b58d203013c024c3657a62f4153e2b6",
"text": "In the US, and I suspect in most of the developed world, one major point of a corporation is limited liability. The stockholders are not on the hook for liabilities beyond their investment. If the company does something terrible, or fails economically, it goes bankrupt. Usually the stockholders have their investment wiped out, but they are guaranteed that they do not have to pay more in to any settlement.",
"title": ""
},
{
"docid": "e058a9c9c6fcfe1a68a04d3b3487bba3",
"text": "\"All other factors being equal, owning your primary residence is almost always a good investment over the long haul. Why? Because you have to live somewhere, and rentals, especially long-term leases that are important when you have kids in school, etc., are generally in the same ballpark as a mortgage in most markets. Giving $1,500 to a landlord gets me 30 days of living somewhere. Giving $1,500 to the bank gets me a place to live and equity in an asset which requires maintenance, but always has intrinsic value. Detroit is one extreme, Manhattan or Silicon Valley is another real estate extreme... everywhere else is somewhere in the middle. What isn't always a good investment is speculating in highly elastic \"\"investment property\"\" like vacation condos as an amateur. It's a cyclical market, but our attention spans are too short to realize that. As most of the other answers to this question indicate, people tend to be down in the dumps and see all of the problems with real estate when the market is not very good. Conversely people only see the upside and are oblivious to problems when the market is high.\"",
"title": ""
},
{
"docid": "1d230a2d06ba1335477e38e1e5697000",
"text": "Banks consider investment mortgages (and any mortgage where you don't live in the property), as a riskier investment than an owner occupied, home collateral mortgage. The sources of increased risk range from concerns that you will screw up as a landlord, your tenants will destroy the place, you won't have tenants and can't afford to pay the bank, and/or you'll take out several other investment mortgages and over extend yourself. All of these risks are compounded by the fact that it is harder for the bank to convince you to pay when they can't put you out on the street if you default. Banks lend and invest in money, not real estate, so they would much rather have a paying loan than a foreclosed house, especially with the modern foreclosure glut. The increased risk means the bank will charge higher interest for the loan, may require a higher downpayment, and will require higher lending standards before issuing the loan. A new housing investor can get around these higher prices by living in the home for a few years before renting it out (though your lender could possibly require you to renegotiate the loan if you move out too soon).",
"title": ""
},
{
"docid": "25ecfa8f3c795681212ee83de19234fc",
"text": "Private investors as mutual funds are a minority of the market. Institutional investors make up a substantial portion of the long term holdings. These include pension funds, insurance companies, and even corporations managing their money, as well as individuals rich enough to actively manage their own investments. From Business Insider, with some aggregation: Numbers don't add to 100% because of rounding. Also, I pulled insurance out of household because it's not household managed. Another source is the Tax Policy Center, which shows that about 50% of corporate stock is owned by individuals (25%) and individually managed retirement accounts (25%). Another issue is that household can be a bit confusing. While some of these may be people choosing stocks and investing their money, this also includes Employee Stock Ownership Plans (ESOP) and company founders. For example, Jeff Bezos owns about 17% of Amazon.com according to Wikipedia. That would show up under household even though that is not an investment account. Jeff Bezos is not going to sell his company and buy equity in an index fund. Anyway, the most generous description puts individuals as controlling about half of all stocks. Even if they switched all of that to index funds, the other half of stocks are still owned by others. In particular, about 26% is owned by institutional investors that actively manage their portfolios. In addition, day traders buy and sell stocks on a daily basis, not appearing in these numbers. Both active institutional investors and day traders would hop on misvalued stocks, either shorting the overvalued or buying the undervalued. It doesn't take that much of the market to control prices, so long as it is the active trading market. The passive market doesn't make frequent trades. They usually only need to buy or sell as money is invested or withdrawn. So while they dominate the ownership stake numbers, they are much lower on the trading volume numbers. TL;DR: there is more than enough active investment by organizations or individuals who would not switch to index funds to offset those that do. Unless that changes, this is not a big issue.",
"title": ""
},
{
"docid": "a0cd7730d095a4ebac6e95aabb354f31",
"text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying).",
"title": ""
},
{
"docid": "5d259edeee629b44ab345346a0717829",
"text": "\"When you buy a put option, you're buying the right to sell stock at the \"\"strike\"\" price. To understand why you have to pay separately for that, consider the other side of the transaction. If I agree to trade stock for money at above market rates, I need to make up the difference somewhere or face bankruptcy. That risk of loss is what the option price is about. You might assume that means the market expects the price of AMD to fall to 8.01 from it's current price of 8.06 by the option expiration date. But that would also mean call options below the market price is worthless. But that's not quite true; people who price options need to factor in volatility, since things change with time. The price MIGHT fall, and traders need to account for that risk. So 1.99 roughly represents the probability of AMD rising to 10. There's probably some technical analysis one can do to the chain, but I don't see any abnormality of AMD here.\"",
"title": ""
},
{
"docid": "6f4952b14a70ff141f9cc6483f94d071",
"text": "\"Publicly traded companies files 10-Ks with the SEC, searchable on the EDGAR system. If you want basic financial statement info then look for 10-Ks that are marked \"\"Interactive Data\"\", as for those the SEC has broken everything out by statement into standard formats. You could also use marketwatch which puts everything in financial statements into the same or as similar of categories as it can to make it easier to compare companies.\"",
"title": ""
}
] |
fiqa
|
87f7eee68e36cdae67998b6f6cd6ada9
|
How do you declare an interest free loan?
|
[
{
"docid": "4426152f670c737393e775ba018d2875",
"text": "In principle, the US taxes both income and gifts. Simply thinking good thoughts is not necessarily sufficient to avoid filing or payment obligations. Giving somebody money with no repayment date, no interest, and no enforceable note looks an awful lot like either income or a gift. A loan normally has interest, money sitting in a savings account is insured, and other investments generally have an expected return. Why would somebody give a loan with no interest, with only flexible or informal payment expectations, in a way where it has neither deposit insurance nor any expectation of net returns? That looks a lot like a gift - at the very least, a gift of the time value and the default risk. The IRS definitely polices loan rates. The latest release is Revenue Ruling 2014-13. The AFR is useful for tax concepts such as Original Issue Discount (when issuers sell low-interest or no-interest bonds or loans at less than face value, attempting to recharacterize interest income as return of principal), various grantor trusts (e.g. GRATs), and so forth. It's a simple way for the IRS to link to market rates of interest. Documentation and sufficient interest, as well as clear payment schedule (and maybe call or demand rights) make it a bona fide loan. There is no real way for the IRS to distinguish between an informal arrangement and a post-hoc lie to conceal a gift. Moreover, an undocumented loan is generally difficult to enforce, so it looks less like a true loan. The lender declares the interest payments as income on his Form 1040, line 8a and if necessary Schedule B.",
"title": ""
},
{
"docid": "09f8267e7da430fa6e197b1a3cb493f3",
"text": "\"I am neither a lawyer nor a tax accountant, and if you're dealing with serious money I suggest you consult a professional. But my understanding is: If you make a loan at zero interest or at below-market rates, the IRS will consider the difference between the interest that you do charge and the market rate to be a gift. That is, if someone could get a loan from a bank and he'd pay $1000 in interest for the year, but instead you loan him the money as a friend interest free, than as far as the IRS is concerned you have given him a $1000 gift, and you could potentially have to pay gift tax. Or they might \"\"impute\"\" the interest to you and tax you on $1000 of additional income. If you have no agreement on repayment terms, if it's all, \"\"Hey Joe, just pay me back when you can\"\", then the IRS is likely to consider the entire \"\"loan\"\" to be a gift. There's an annual exclusion on gifts -- I think it's now $13,000 -- so if you loan your buddy fifty bucks to tide him over until next pay day, the IRS isn't going to get involved in that. They're worried about more serious money. And yes, the IRS does \"\"police loan rates\"\". The IRS examines exact numbers for all sorts of things. If, say, you go on a 100-mile overnight business trip, and the company gives you $10,000 for travel expenses, the IRS is likely to say that this is not a tax-deductible travel expense at all but a sham to hide part of your salary from taxes. Or if you donate a pair of old socks to charity and declare a $500 charitable contribution deduction, the IRS will say that that is not a realistic value for a pair of old socks and disallow the deduction. Etc. A small discrepancy from market rates can be justified for any number of reasons. If the book value of a used car is $5000 and you sell it to your neighbor for $4900, the IRS is unlikely to question it, there are any number of legitimate business reasons why you had to give a discount to make the sale. But if you sell it to him for $50, they may declare that this is not a sale but a gift. Etc.\"",
"title": ""
}
] |
[
{
"docid": "8fd25adfcca35635da856d9e3f8236de",
"text": "\"I can't vouch for Australian law, but in the US there is actually a recognized mechanism for \"\"in-family loans\"\" which ensures that it's all fully documented for tax purposes, including filing it as an official second mortgage. (Just did that recently in my own family, which is why I'm aware of it.) We're required to charge at least some interest (there's a minimum set, currently around 0.3%), and the interest is taxable income, and it is wise to get a lawyer to draw up the paperwork (there are a few services which specialize in this, charging a flat fee of about US$700 if the loan is standard enough that they can handle it as fill-in-the-blank), but outside of that it's pretty painless. This can also be used as a way of shifting gift limits from year to year -- if you issue a loan, and then gift the recipient with the payments each year (including the payments), you've effectively spread the immediate transfer of money over multiple years of taxes. Of course it does cost you the legal paperwork and the tax in the interest (which they're still \"\"paying\"\" out of your gift), but it can be a useful tool, and it's one that wasn't well known until recently. Again: This is all US codes, posted only for comparison (and for the benefit of US readers). It may be completely irrelevant. But it may be worth investigating whether Oz has something similar.\"",
"title": ""
},
{
"docid": "dded85e983b57d4276a66a7e975a4389",
"text": "Yes, 0% APR = no interest. APR = Annual Percentage Rate. As in, the lender gets an annual percentage returned to them for lending you money. This is the opposite of APY, which is Annual Percentage Yield, or the money that an investment yields.",
"title": ""
},
{
"docid": "5a85c32b5206c1616c747f3235aea00e",
"text": "The principal of the loan is the amount you borrow. The capitalized interest is added to the principal of the loan, because you are not paying this interest as it accrues. So when you begin payments, the principal of the loan is $5,500 + $436 = $5,936. Using the standard amortization formula (see this page for details), the per-month payment for a ten-year payment plan at 6.8% interest on principal of $5,936 is $68.31. One hundred twenty payments (each month for ten years) totals $8,197.40.",
"title": ""
},
{
"docid": "2f55926bb4343e10f256223146f04cb7",
"text": "Assuming the United States. This is a loan and not an investment. You report this as income and will pay your tax rate on the 18% of the money that the borrower pays you (any money paid above what was originally lent) for the year in which it was received. You owe taxes on the income even if the borrower does not send you a Form 1099-INT showing the interest you received. For example: If you loan $10,000 and receive $1,800 in interest, and your tax bracket is 25%, then you will owe $450 in tax.",
"title": ""
},
{
"docid": "3a483c837a44ef2446f50dc0408ebc42",
"text": "They use an amortization table like can be found Here. The Forumula is not that complex where: A = payment Amount per period P = initial Principal (loan amount) r = interest rate per period n = total number of payments or periods You will need to add 50 to the A to account for the payment fee amount though.",
"title": ""
},
{
"docid": "2860f12c36966891eb816cce27702fcc",
"text": "You need to report the interest expense, assuming the loans were for your business: You need to report interest expense (only interest, principle is not an expense just as the loan proceeds are not income). The interest expense goes to the appropriate line on your Schedule C or E (depending on whether you used the loan for the online business or the rental). People whom you borrowed from must also report the interest as income to them on their Schedule B. You cannot deduct the interest expense if they don't report it as interest income. If you didn't take the loans for your business then the interest is not deductible. You don't need to report anything. People who lent you money still have to report the interest you paid to them as income on Schedule B. If you paid no interest (free loan) or below/above market interest to a related party (family member), then the imputed interest is considered income to them and gift to you. They need to report it on their Schedule B, and depending on amounts - on a gift tax return. For $1K to $10K loans there probably will be no need in gift tax returns, the exemption is for $14K per year per person. If the imputed interest rules may apply to you, better talk to a licensed tax adviser on how to proceed.",
"title": ""
},
{
"docid": "845b0104a1698b092c1d865f1661ebdc",
"text": "A loan is most generally a liability, a part of the balance sheet. Expenses & income are part of the income statement. Income is the net of revenues after expenses. The interest is an expense on the income statement, but the loan itself does not reside there unless if it is defaulted and forgiven. Then it would become a revenue or contra-expense, depending on the methodology. The original purpose of the income statement is to show the net inflows of short term operational accruals which would exclude new borrowing and repaid loans. The cash flow statement will better show each cash event such as borrowing debt, repaying debt, or paying off a bill. To show how a loan may have funded a bill, which in theory it directly did not because an entity, be it a person or business, is like a single tank of water with multiple pipes filling and multiple pipes extracting, so it is impossible to know which exact inflow funded which exact outflow unless if there is only one inflow per period and one outflow per the same period. That being said, with a cash flow statement, the new loan will show a cash inflow when booked under the financing portion, and paying a bill will show a cash outflow when booked under the operating portion. With only those two transactions booked and an empty balance sheet beforehand, it could be determined that a new loan funded a bill payment.",
"title": ""
},
{
"docid": "acbff6d144a04d785c94ea5caaf1cfd1",
"text": "The calculation can be made on the basis that the loan is equal to the sum of the repayments discounted to present value. (For more information see Calculating the Present Value of an Ordinary Annuity.) With Deriving the loan formula from the simple discount summation. As you can see, this is the same as the loan formula given here. In the UK and Europe APR is usually quoted as the effective interest rate while in the US it is quoted as a nominal rate. (Also, in the US the effective APR is usually called the annual percentage yield, APY, not APR.) Using the effective interest rate finds the expected answer. The total repayment is £30.78 * n = £1108.08 Using a nominal interest rate does not give the expected answer.",
"title": ""
},
{
"docid": "9e480d3236692273886be154a8499ced",
"text": "\"I read up on it and saw that the IRS can \"\"charge\"\" the loan provider on interest even if the loan provider doesn't charge interest, but this is normally mitigated by the 0% interest being considered a gift and as long as it's below X amount your fine. Yes, this sums it up. X is the amount of the gift exemption, the $14K. However, you must differ between loan with no interest and loan with no paying back. With loan with no interest you're still giving a statutory gift of the IRS mandated minimum interest. However, the principal is expected to be repaid to you and you must show that this expectation is reasonably fulfilled. If you cannot (i.e.: you gave a \"\"loan\"\" with no intention of it being paid back), then the IRS will recharacterize the whole amount as the gift, and you'll be on the hook for gift tax for the amounts above the exemption. What defines a loan vs a gift in terms of the IRS, is it simply that the loan will be paid back, or is it only considered a loan if a promisary note is made? As I said - you must be able to show that the loan is indeed a loan, even if it is with no interest. I.e.: it is being repaid, it is treated as a loan by all parties, and is not an attempt to evade gift tax. Promissory note is not a must, but will definitely be helpful in showing that. But without the de-facto repayment of the loan, it will be hard to argue that it is not a gift, even if you have a promissory note. That means, you should make a loan in such a way that the borrower will (begin) repaying it reasonably soon, so that you can show payment schedule being followed and money moving back to you. Reasonably soon is not of course defined in a statute, so do consult with a EA/CPA licensed in your state on how to structure the loan so that it will not appear as an attempt to evade the gift tax. Are there any limits on how big a loan can be? No, but keep in mind that even with statutory interest charges (published by the IRS monthly, see the link), with large enough loan you can exceed the gift tax exemption. Also, keep in mind that interest is taxable income to you. Even if you gift it back (i.e.: the statutory interest).\"",
"title": ""
},
{
"docid": "452f27da8e2c009b017c0b881ec4cf77",
"text": "I have answered your question in detail here https://stackoverflow.com/questions/12396422/apr-calculation-formula The annuity formula in FDIC document is at first finding PVIFAD present value annuity due factor and multiplying it with annuity payment and then dividing it by an interest factor of (1+i) to reduce the annuity to an ordinary annuity with end of period payments They could have simply used PVIFA and multiplying it with annuity payment to find the present value of an ordinary annuity In any case, you should not follow the directions in FDIC document to find interest rate at which the present value of annuity equals the loan amount. The method they are employing is commonly used by Finance Professors to teach their students how to find internal rate of return. The method is prone to lengthy trial and error attempts without having any way of knowing what rate to use as an initial guess to kick off the interest rate calculations So this is what I would suggest if you are not short on time and would like to get yourself familiar with numerical methods or iterative techniques to find internal rate of return There are way too many methods at disposal when it comes to finding interest rates some of which include All of the above methods use a seed value as a guess rate to start the iterative calculations and if results from successive calculations tend to converge within a certain absolute Error bound, we assume that one of the rates have been found as there may be as many rates as the order of the polynomial in this case 36 There are however some other methods that help find all rates by making use of Eigenvalues, but for this you would need a lengthy discourse of Linear Algebra One of the methods that I have come across which was published in the US in 1969 (the year I was born :) ) is called the Jenkins Traub method named after the two individuals who worked jointly on finding a solution to all roots of a polynomial discarding any previous work on the same subject I been trying to go over the Jenkins Traub algorithm but am having difficulty understanding the complex nature of the calculations required to find all roots of the polynomial In summary you would be better of reading up on this site about the Newton Raphson method to find IRR",
"title": ""
},
{
"docid": "2948912ab138ec2aeae9dace2c07d281",
"text": "You're looking for the amortization calculation. This calculation is essentially solving for the series of cash flows that will yield a zero balance after the specified term, at the given rate for a loan amount. Once you have solved for the payment amount, you can add additional principal amount to each payment period and see the interest payments and time to zero balance drop.",
"title": ""
},
{
"docid": "59c5170b2b502bd0aa347a50c07582f1",
"text": "\"As noted in richardb's comment buried in the comments/debate on the other answer (and all credit for this answer should be due to him): a significant issue with the scheme as originally envisaged in the question (up to £11K pa) is that there is actually a cap on the maintenance part for over 60s: On page 28 of this \"\"Student finance - how you're assessed and paid\"\" document it says: If you're 60 or over on the first day of the first academic year of your course you can apply for a Maintenance Loan of up to £3,566, depending on your household income. Your loan will be reduced by £1 for every £5.46 of household income over £25,000, up to £43,675. If your household income is more than this you won't get any Maintenance Loan. I'd consider that to make this route considerably less attractive... and maybe that's the intention of the rule! (Although I might not think that was so true if I was actually on the UK's state pension of £6K a year and desperate. However, I was originally thinking more in terms of comparing the accumulated \"\"free money\"\" over the three years with the UK's average - and woefully inadequate - pension pot of £50K, rather than with pensioner income). I'll leave those who found the idea of exploiting government incentives so outrageous to ponder the at least as troubling ethics of discriminating against people based on their age, especially when that government apparently likes the idea of older people retraining. (Just to complicate things: I note that one of the possible criteria for applying for a \"\"special support grant\"\" - an alternative to a maintenance loan - is being over 60. That's a grant not a loan and doesn't have to be repaid, but abusing that would seem even to me to be on a par with faking disability to get benefits or similar).\"",
"title": ""
},
{
"docid": "e63f68d950707a8ba68e0e179dc3ac54",
"text": "Never borrow money to get a tax deduction. Even 18 months interest free is a stupid risk to save a few $ in taxes (we're talking $1K or less in tax savings from what I can tell in your questions).",
"title": ""
},
{
"docid": "d98fbc6f95845296f3b6efb947d9d778",
"text": "If it is a business loan, the borrower would be able to claim a deduction for any interest paid on the loan and the lender would include the interest earned as part of their taxable income. You need to be careful on what you do and don't include as income. If the repayments made to you by the borrower in a year is $10,000 but only $8,000 of that is interest and the other $2,000 is part of the principal being returned to the lender, then you would only claim $8,000 as your income and the borrower would only claim $8,000 as a business deduction. Of course if it is interest only, then you and the borrower would use the full $10,000.",
"title": ""
},
{
"docid": "310df1360ddc30221c22f9e789f10fc1",
"text": "This is how its done I am a certain french bank, aka sg I have some PIIGS debt, I can use this as collateral at face value (100), with the ECB in order to secure cash... Lets say I use 1mn of BTPS (italian debt), this has an MTM (clean) of 88. I use that 88 to get me 100 (1mn) of cash, from which I buy another BTPS, for (88), of which I use as collateral pledged to the ECB to get this, get another BTPS. So now I am long 3 BTPS, all pledged to the ECB and I have 36 in cash and I owe the ECB 300+r in 3 years. remember the yield on my shitty btps is a lot higher than the interest on the deposits. Secondly, I have three years, so I don't need to give a fuck about the mark to market on the notes (I could even buy a 2 year and n month note maturing just before). So I can make some free yield at the ECB's expense. Also this frees up 36 in cash, of which I can use to meet short term funding instead of tapping the bond market, this trade can be made infinitely, although the ECB might catch on. You can view it as getting a mortgage on your house to buy another house, then mortgaging house #2 to buy house #3, and so on.",
"title": ""
}
] |
fiqa
|
acfa9ad1c1bad72244be67b7135eab15
|
Avoiding sin stock: does it make a difference?
|
[
{
"docid": "c7f2f5a0598d83458ee9ca91a1201849",
"text": "Yes, it does matter. You are right that lower demand for a stock will drive its price down. Lower stock prices can hurt the company. Take a look at Fixee's answer to this question: a declining share price will make it hard to secure credit, attract further investors, build partnerships, etc. Also, employees are often holding options or in a stock purchase plan, so a declining share price can severely dampen morale. In an extreme case, if share prices plummet too far, the company can be pressured to reverse-split the shares, and (eventually) take the company private. This recently happened to Playboy. If you do not want to support a company, for whatever reason, then it is wise to avoid their stock.",
"title": ""
},
{
"docid": "5f34a624ec28c7a743e949bb4776aeab",
"text": "\"This question drives at what value a shareholder actually provides to a corporation, and by extent, to the economy. If you subscribe for new shares (like in an Initial Public Offering), it is very straightforward to say \"\"I have provided capital to the corporation, which it is using to advance its business.\"\" If you buy shares that already exist (like in a typical share purchase on a public exchange), your money doesn't go to the company. Instead, it goes to someone who paid someone who paid someone who paid someone (etc.) who originally contributed money to the corporation. In theory, the value of a share price does not directly impact the operation of the company itself, apart from what @DanielCarson aptly noted (employee stock options are affected by share price, impacting morale, etc.). This is because in theory, the true value of a company (and thus, the value of a share) is the present value of all future cashflows (dividends + final liquidation). This means that in a technical sense, a company's share price should result from the company's value. The company's true value does not result from the share price. But what you are doing as a shareholder is impacting the liquidity available to other potential investors (also as mentioned by @DanielCarson, in reference to the desirability for future financing). The more people who invest their money in the stock market, the more liquid those stocks become. This is the true value you add to the economy by investing in stocks - you add liquidity to the market, decreasing the risk of capital investment generally. The fewer people there are who are willing to invest in a particular company, the harder it is for an investor to buy or sell shares at will. If it is difficult to sell shares in a company, the risk of holding shares in that company is higher, because you can't \"\"cash out\"\" as easily. This increased risk then does change the value of the shares - because even though the corporation's internal value is the same, the projected cashflows of the shares themselves now has a question mark around the ability to sell when desired. Whether this actually has an impact on anything depends on how many people join you in your declaration of ethical investing. Like many other forms of social activism, success relies on joint effort. This goes beyond the direct and indirect impacts mentioned above; if 'ethical investing' becomes more pronounced, it may begin to stigmatize the target companies (fewer people wanting to work for 'blacklist' corporations, fewer people buying their products, etc.).\"",
"title": ""
}
] |
[
{
"docid": "738f4f01cacfac6815ef39b5068ee1ea",
"text": "I don't know too much about the kelly criterion, but going by the other answers it sounds like it could be quite risky depending how you use it. I have been taught the first thing you do in trading is protect your existing capital and any profits you have made, and for this reason I prefer and use Position Sizing (PS). The concept with PS is that you only risk a small % of your capital on every trade, usually not more than 1%, however if you want to be very aggressive then not more than 2%. I use 1% of my capital for every trade. So if you are trading with an account of $40,000 and your risk R on every trade is 1%, then R = $400. As an example, say you decide to buy a stock at $10 and you work out your initial stop to be at $9.50, then our maximum risk R of $400 is divided by the stop distance of $0.50 to get your PS = $400/$0.50 = 800 shares. If the price then drops after your purchase, your maximum loss (subject to no slippage) would be $400. If the price moves up you would raise your stop until your potential loss becomes smaller and smaller and then becomes a gain once your stop moves above your initial purchase price. The aim is to make your gains be larger than your losses. So if your average loss is kept to 1R or less then you should aim to get your average gains to 2R, 3R or more. This would be considered a good trading system where you will make regular profits even with a win ratio of 50%.",
"title": ""
},
{
"docid": "dac3ab9bcfeaad65bc3bac901876b8ee",
"text": "In a simple statement, no doesn't matter. Checked on my trade portal, everything lines up. Same ISIN, same price(after factoring in FX conversions, if you were thinking about arbitrage those days are long gone). But a unusual phenomenon I have observed is, if you aren't allowed to buy/sell a stock in one market and try to do that in a different market for the same stock you will still not be allowed to do it. Tried it on French stocks as my current provider doesn't allow me to deal in French stocks.",
"title": ""
},
{
"docid": "a936419d8168fea5981f592849805c79",
"text": "Since you reference SS, I surmise you are in the US. Stock you inherit gets a stepped up basis when it's inherited. (so long as it was not contained within a tax deffered retirement account.) When you sell, the new basis is taken from that day you inherited it. It should be minimal compared to your desire to diversify.",
"title": ""
},
{
"docid": "8b31af198fa10e9b9452c1f78618b999",
"text": "I think it may be best to take everything you're asking line-by-line. Once you buy stocks on X day of the month, the chances of stocks never actually going above and beyond your point of value on the chart are close to none. This is not true. Companies can go out of business, or take a major hit and never recover. Take Volkswagen for example, in 2015 due to a scandal they were involved in, their stocks went downhill. Now their stocks are starting to rise again. The investors goal is not to wait as long as necessary to make a profit on every stock purchase, but to make the largest profit possible in the shortest time possible. Sometimes this means selling a stock before it recovers (if it ever does). I think the problem with most buyers is that they desire the most gain they can possibly have. However, that is very risky. This can be true. Every investor needs to gauge the risk they're willing to take and high-gain investments are riskier. Therefore, it's better to be winning [small/medium] amounts of money (~)100% of the time than [any] amount of money <~25%. Safer investments do tend to yield more consistent returns, but this doesn't mean that every investor should aim for low-yield investments. Again, this is driven by the investor's risk tolerance. To conclude, profitable companies' stock tends to increase over time and less aggressive investments are safer, but it is possible to lose from any stock investment.",
"title": ""
},
{
"docid": "4cd52462210155725b224dd03e71f866",
"text": "\"Why do these stories use the word \"\"avoid\"\" instead of \"\"delay\"\". It's only \"\"avoided\"\" if they never bring the money into the US and instead find some way to spend it off shore. If their stockpile gets too big, investors are going to want some sort of return.\"",
"title": ""
},
{
"docid": "5f818a172800ab3e8c4068baf50271cc",
"text": "The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.",
"title": ""
},
{
"docid": "f085c11a9c0976423c8080bc749c9826",
"text": "It depends whether you want to be technically compliant with the letter of the law or compliant with the underlying meaning. For instance, in some countries you can find shell companies that do nothing but deal in fixed income instruments (those that you want to avoid) and dividend stocks (those that you might or might not be allowed to use). You can buy stock of that shell company, which does not hand out dividends itself. Thereby, you transform interest and dividends into capital gains. These shell companies exist for fiscal reasons, the more risky capital gains are often less taxed than interest or dividends. This might technically solve your problem, but not really change anything in the underlying reality. P.S. Don't worry too much about missing compounding interest. The rates are incredibly low right now.",
"title": ""
},
{
"docid": "5f505ea025ad3b724d57c8c6297ce71a",
"text": "When you buy a stock, the worst case scenario is that it drops to 0. Therefore, the most you can lose when buying a stock is 100% of your investment. When you short a stock, however, there's no limit on how high the stock can go. If you short a stock at 10, and it goes up to 30, then you've lost 200% on your investment. Therefore shorting stocks is riskier than buying stocks, since you can lose more than 100% of your investment when shorting. because the price might go up, but it will never be as big of a change as a regular price drop i suppose... That is not true. Stocks can sometimes go up significantly (50-100% or more) in a very short amount of time on a positive news release (such as an earnings or a buyout announcement). A famous example occurred in 2008, when Volkswagen stock quintupled (went up 400%) in less than 2 days on some corporate news: Porsche, for some reason, wants to control Volkswagen, and by building up its stake has driven up the price. Hedge funds, figuring the share price would fall as soon as Porsche got control and stopped buying, sold a lot of VW shares short. Then last weekend, Porsche disclosed that it owned 42.6 percent of the stock and had acquired options for another 31.5 percent. It said it wanted to go to 75 percent. The result: instant short-squeeze. The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell. That left precious few shares available for anyone else. The shorts scrambled to cover, and the price leaped from about €200, or about $265, to above €1,000.",
"title": ""
},
{
"docid": "7da5f2a34222c2803b5973c53d2a3b84",
"text": "That's up to you. If you instruct your broker to sell shares purchased in specific lots, they can do that -- but doing so requires that you and/or they track specific fractional lots forever afterwards so you know what is still there to be sold. FIFO simplifies the bookkeeping. And I am not convinced selecting specific lots makes much difference; the government gets its share of your profits sooner or later.",
"title": ""
},
{
"docid": "20a7eb90fb4fb80f4664b2eeed2ac630",
"text": "First, I want to point out that your question contains an assumption. Does anyone make significant money trading low volume stocks? I'm not sure this is the case - I've never heard of a hedge fund trading in the pink sheets, for example. Second, if your assumption is valid, here are a few ideas how it might work: Accumulate slowly, exit slowly. This won't work for short-term swings, but if you feel like a low-volume stock will be a longer-term winner, you can accumulate a sizable portion in small enough chunks not to swing the price (and then slowly unwind your position when the price has increased sufficiently). Create additional buyers/sellers. Your frustration may be one of the reasons low-volume stock is so full of scammers pumping and dumping (read any investing message board to see examples of this). If you can scare holders of the stock into selling, you can buy significant portions without driving the stock price up. Similarly, if you can convince people to buy the stock, you can unload without destroying the price. This is (of course) morally and legally dubious, so I would not recommend this practice.",
"title": ""
},
{
"docid": "86eec3b61f3a08fd0ef522fdd4cc4547",
"text": "This article is simply a discussion of the author's own stupidity. In no way does a liquidation preference effect the value of a company. Share class? Yes definitely. The issue comes from applying the price of a preferred funding round to a fully diluted basis as is often quoted in financial media. Value doesn't always just equal basic p * q",
"title": ""
},
{
"docid": "e72fec842579c94379154c5c9e31b87d",
"text": "IESC has a one-time, non-repeatable event in its operating income stream. It magnifies operating income by about a factor of five. It impacts both the numerator and the denominator. Without knowing exactly how the adjustments are made it would take too much work for me to calculate it exactly, but I did get close to their number using a relatively crude adjustment rule. Basically, Yahoo is excluding one-time events from its definitions since, although they are classified as operating events, they distort the financial record. I teach securities analysis and have done it as a profession. If I had to choose between Yahoo and Marketwatch, at least for this security, I would clearly choose Yahoo.",
"title": ""
},
{
"docid": "6e7f88b56677a917045c41db97d6ced0",
"text": "\"I'd suggest you start by looking at the mutual fund and/or ETF options available via your bank, and see if they have any low-cost funds that invest in high-risk sectors. You can increase your risk (and potential returns) by allocating your assets to riskier sectors rather than by picking individual stocks, and you'll be less likely to make an avoidable mistake. It is possible to do as you suggest and pick individual stocks, but by doing so you may be taking on more risk than you suspect, even unnecessary risk. For instance, if you decide to buy stock in Company A, you know you're taking a risk by investing in just one company. However, without a lot of work and financial expertise, you may not be able to assess how much risk you're taking by investing in Company A specifically, as opposed to Company B. Even if you know that investing in individual stocks is risky, it can be very hard to know how risky those particular individual stocks are, compared to other alternatives. This is doubly true if the investment involves actions more exotic than simply buying and holding an asset like a stock. For instance, you could definitely get plenty of risk by investing in commercial real estate development or complicated options contracts; but a certain amount of work and expertise is required to even understand how to do that, and there is a greater likelihood that you will slip up and make a costly mistake that negates any extra gain, even if the investment itself might have been sound for someone with experience in that area. In other words, you want your risk to really be the risk of the investment, not the \"\"personal\"\" risk that you'll make a mistake in a complicated scheme and lose money because you didn't know what you were doing. (If you do have some expertise in more exotic investments, then maybe you could go this route, but I think most people -- including me -- don't.) On the other hand, you can find mutual funds or ETFs that invest in large economic sectors that are high-risk, but because the investment is diversified within that sector, you need only compare the risk of the sectors. For instance, emerging markets are usually considered one of the highest-risk sectors. But if you restrict your choice to low-cost emerging-market index funds, they are unlikely to differ drastically in risk (at any rate, far less than individual companies). This eliminates the problem mentioned above: when you choose to invest in Emerging Markets Index Fund A, you don't need to worry as much about whether Emerging Markets Index Fund B might have been less risky; most of the risk is in the choice to invest in the emerging markets sector in the first place, and differences between comparable funds in that sector are small by comparison. You could do the same with other targeted sectors that can produce high returns; for instance, there are mutual funds and ETFs that invest specifically in technology stocks. So you could begin by exploring the mutual funds and ETFs available via your existing investment bank, or poke around on Morningstar. Fees will still matter no matter what sector you're in, so pay attention to those. But you can probably find a way to take an aggressive risk position without getting bogged down in the details of individual companies. Also, this will be less work than trying something more exotic, so you're less likely to make a costly mistake due to not understanding the complexities of what you're investing in.\"",
"title": ""
},
{
"docid": "2e5bb05701d5b40caffbc5d98be9d723",
"text": "Domini offers such a fund. It might suit you, or it might include things you wish to avoid. I'm not judging your goals, but would suggest that it might be tough to find a fund that has the same values as you. If you choose individual stocks, you might have to do a lot of reading, and decide if it's all or none, i.e. if a company seems to do well, but somehow has an tiny portion in a sector you don't like, do you dismiss them? In the US, Costco, for example, is a warehouse club, and treats employees well. A fair wage, benefits, etc. But they have a liquor store at many locations. Absent the alcohol, would you research every one of their suppliers?",
"title": ""
},
{
"docid": "382415f3c945cb086cf025a9d8ea6b61",
"text": "The principle behind the advice to not throw good money after bad is better restated in economics terms: sunk costs are sunk and irrelevant to today's decisions. Money lost on a stock is sunk and should not affect our decisions today, one way or the other. Similarly, the stock going up should not affect our decisions today, one way or the other. Any advice other than this is assuming some kind of mispricing or predictability in the market. Mispricings in general cannot be reliably identified and stock returns are not normally predictable. The only valid (efficient markets) reason I know of to allow money you have lost or made on a stock to affect your decision today is the tax implications (you may want to lock in gains if your tax rate is temporarily low or vice versa).",
"title": ""
}
] |
fiqa
|
ee50e68d3dd6e6ab7ccc97c212458bda
|
Save money in company for next year
|
[
{
"docid": "33815eb947ceaf1d6ce9d49424d4d5eb",
"text": "As was once famously said, Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. — Benjamin Franklin, 1789 It's very likely that either the company or you personally is going to have to pay taxes on that money. Really the only way to avoid it would be if the company spent that money on next year's expenses, and paid the bill before the end of this year. Of course you can only do that if the recipient is willing to receive their money so far in advance, which isn't necessarily the case since they would pay more taxes this year as a result. As for whether it's better to have the company pay the tax or for you to do as your accountant suggests, there are a lot of factors that go into that equation, and my gut feeling is that your accountant already ran it both ways and is suggesting the better choice.",
"title": ""
}
] |
[
{
"docid": "cfc47ffc8876a35795d33d3b1eec2905",
"text": "It's important to remember what a share is. It's a tiny portion of ownership of a company. Let's pretend we're talking about shares in a manufacturing company. The company has one million shares on its register. You own one thousand of them. That means that you own 1/1000th of the company. These shares are valued by the market at $10 per share. The company has machinery and land worth $1M. That means that for every dollar of the company you own, 10c of that value is backed by the physical assets of the company. If the company closed shop tomorrow, you could, in theory at least, get $1 back per share. The other $9 of the share value is value based on speculation about the future and current ability of the company to grow and earn income. The company is using its $1M in assets and land to produce goods which cost the company $1M in ongoing costs (wages, marketing, raw cost of goods etc...) to produce and make $2M per year in sales. That means the company is making a profit of $1M per annum (let's assume for the sake of simplicity that this profit is after tax). Now what can the company do with its $1M profit? It can hand it out to the owners of the company (which means you would get a $1 dividend each year for each share that you own) or it can re-invest that money into additional equipment, product lines or something which will grow the business. The dividend would be nice, but if the owners bought $500k worth of new machinery and land and spent another $500k on ongoing costs and next year we would end up with a profit of $1.5M. So in ten years time, if the company paid out everything in dividends, you would have doubled your money, but they would have machines which are ten years older and would not have grown in value for that entire time. However, if they reinvested their profits, the compounding growth will have resulted in a company many times larger than it started. Eventually in practice there is a limit to the growth of most companies and it is at this limit where dividends should be being paid out. But in most cases you don't want a company to pay a dividend. Remember that dividends are taxed, meaning that the government eats into your profits today instead of in the distant future where your money will have grown much higher. Dividends are bad for long term growth, despite the rather nice feeling they give when they hit your bank account (this is a simplification but is generally true). TL;DR - A company that holds and reinvests its profits can become larger and grow faster making more profit in the future to eventually pay out. Do you want a $1 dividend every year for the next 10 years or do you want a $10 dividend in 5 years time instead?",
"title": ""
},
{
"docid": "b2c740c35ddf20f575c2c47f14a14738",
"text": "The only way you can save taxes is by starting a limited company, not paying yourself any salary, so you pay 20% corporation taxes, you can take I think £5000 a year dividends tax free, and leave the rest in the company account, and don't touch it until you make less money.",
"title": ""
},
{
"docid": "f0e9b6eb1bb4818486d9d4637a157a6c",
"text": "It appears your company is offering roughly a 25% discount on its shares. I start there as a basis to give you a perspective on what the 30% matching offer means to you in terms of value. Since you are asking for things to consider not whether to do it, below are a few considerations (there may be others) in general you should think about your sources of income. if this company is your only source of income, it is more prudent to make your investment in their shares a smaller portion of your overall investment/savings strategy. what is the holding period for the shares you purchase. some companies institute a holding period or hold duration which restricts when you can sell the shares. Generally, the shorter the duration period the less risk there is for you. So if you can buy the shares and immediately sell the shares that represents the least amount of relative risk. what are the tax implications for shares offered at such a discount. this may be something you will need to consult a tax adviser to get a better understanding. your company should also be able to provide a reasonable interpretation of the tax consequences for the offering as well. is the stock you are buying liquid. liquid, in this case, is just a fancy term for asking how many shares trade in a public market daily. if it is a very liquid stock you can have some confidence that you may be able to sell out of your shares when you need. personally, i would review the company's financial statements and public statements to investors to get a better understanding of their competitive positioning, market size and prospects for profitability and growth. given you are a novice at this it may be good idea to solicit the opinion of your colleagues at work and others who have insight on the financial performance of the company. you should consider other investment options as well. since this seems to be your first foray into investing you should consider diversifying your savings into a few investments areas (such as big market indices which typically should be less volatile). last, there is always the chance that your company could fail. Companies like Enron, Lehman Brothers and many others that were much smaller than those two examples have failed in the past. only you can gauge your tolerance for risk. As a young investor, the best place to start is to use index funds which track a broader universe of stocks or bonds as the first step in building an investment portfolio. once you own a good set of index funds you can diversify with smaller investments.",
"title": ""
},
{
"docid": "7e974e9c76ecdd9f3ffe8704ae2d3f48",
"text": "\"How can I avoid this, so we are taxed as if we are making the $60k/yr that we want to receive? You can't. In the US the income is taxed when received, not when used. If you receive 1M this year, taking out 60K doesn't mean the other 940K \"\"weren't received\"\". They were, and are taxable. Create a pension fund in the corporation, feed it all profits, and pay out $60k/yr of \"\"pension\"\". I doubt that the corporation could deduct a million a year in pension funding. You cannot do that. You can only deposit to a pension plan up to 100% of your salary, and no more than $50K total (maybe a little more this year, its adjusted to inflation). Buy a million dollars in \"\"business equipment\"\" of some sort each year to get a deduction, then sell it over time to fund a $60k/yr salary. I doubt such a vehicle exists. If there's no real business purpose, it will be disallowed and you'll be penalized. Your only purpose is tax avoidance, meaning you're trying to shift income using your business to avoid paying taxes - that's illegal. Do crazy Section 79 life insurance schemes to tax-defer the income. The law caps this so I can only deduct < $100k of the $1 million annually, and there are other problems with this approach.\\ Yes. Wouldn't go there. Added: From what I understand, this is a term life insurance plan sponsored by the employer for the employee. This is not a deferral of income, but rather a deduction: instead of paying your term life insurance with your own after tax money, your employer pays with their pre-tax. It has a limit of $50K per employee, and is only available for employees. There are non-discrimination limitations that may affect your ability to use it, but I don't see how it is at all helpful for you. It gives you a deduction, but its money spent, not money in your pocket. End added. Do some tax avoidance like Facebook does with its Double Irish trick, storing the income in some foreign subsidiary and drawing $60k/yr in salary to be taxed at $60k/yr rates. This is probably cost-prohibitive for a $1MM/yr company. You're not Facebook. What works with a billion, will not work with a million. Keep in mind that you're a one-man business, things that huge corporations like Google or Facebook can get away with are a no-no for a sole-proprietor (even if incorporated). Bottom line you'll probably have to pay the taxes. Get a good tax professional to help you identify as much deductions as possible, and if you can plan income ahead - plan it better.\"",
"title": ""
},
{
"docid": "4f03d187b00e10733007a280dd18faf3",
"text": "\"Create a meaningful goal for yourself which would distract you from impulsively spending all your money and help you to direct it towards something more meaningful. Maybe you're curious about just how little money you can live off of in one year and you're up for a challenge. Maybe you want to take a whole year off from work. A trip around the world. Or create a financial independence account, the money that is put into this account should NEVER be touched, the idea is to live off of the interest that it throws off. I strongly suggest that you listen to the audio book \"\"PROSPERITY CONSCIOUSNESS\"\" by Fredric Lehrman. You can probably find a copy at your local library, or buy if off of amazon.\"",
"title": ""
},
{
"docid": "6f01eeea150ed6a5edaa8031d9c0b963",
"text": "I would pass on their deal if they will only match if you invest in their stock. Think about when/if the company falls on bad times. What happens to the stock of a company when bad times come? The board of directors will reduce or eliminate the dividend payout. Current and potential investors will take notice. Current owners of the stock will sell. Potential investors will avoid buying. The price of the stock with go down. And, quite likely, the company will lay off workers. If/when that happens you would find yourself without a job and holding (almost) worthless stock as your savings. That would be quite a bad situation to be in.",
"title": ""
},
{
"docid": "90848ee492ed12e798b2a01864b58888",
"text": "There are two dates that matter for vesting in this situation: If you left the company on 12/31/16, you would be entitled to none of the company contributions. If you left on 1/1/17, you would be entitled to all $20k. This is sometimes known as a cliff vesting schedule. Some companies do a stair step - 20% after year 1, 40% after year 2, etc. This is known as graded vesting. But, that is not the case based on the language here.",
"title": ""
},
{
"docid": "973efb2615fc09cc62ad3a78fe4e99bd",
"text": "Yes. Not doing so would be like turning down a raise. The best advice in almost every situation is to at least contribute up to the amount that the company will match so you get the full benefit. One thing to clarify that you might not be understanding. The vesting period is only for the money the company matches, not your own investment. Even if you leave the company before the account is vested or fully vested, you can transfer to a 401k at your new employer, or roll over into an IRA, or take as taxable income (and pay a penalty if it is an early withdrawal), all your contributions together with any investment gains or losses that have occurred. Ditto whatever part of your employer match that has vested by the time you leave. Often, the employer matching contributions are invested in the same funds in the same proportions that you have chosen for your own contributions and thus will have incurred the same gains or losses as your own contributions, but what you are entitled to take with you is the part that has vested. Also, you mention that it is unlikely that you will stay the entire 5 years. However, if you plan to at least stay a couple of years it makes sense to get the 20%, 40%, etc. of the match that you vest during your stay. Again, it's free money.",
"title": ""
},
{
"docid": "a63dbcf8f968a3dd4df94575189af90c",
"text": "Find out what your take home pay will be. There should be someone in the company who can give you an idea there. Once you know that, setting up a budget is pretty straight forward. You need Subtract the sum of all that from the take home pay. If you are negative, you will have to supplement with your savings. If you are positive, you can have some fun (or use surplus savings to have fun).",
"title": ""
},
{
"docid": "0dbe615376361cbe5aee13c01dac142b",
"text": "\"Hearing somewhere is a level or two worse than \"\"my friend told me.\"\" You need to do some planning to forecast your full year income and tax bill. In general, you should be filing a quarterly form and tax payment. You'll still reconcile the year with an April filing, but if you are looking to save up to pay a huge bill next year, you are looking at the potential of a penalty for under-withholding. The instructions and payment coupons are available at the IRS site. At this point I'm required to offer the following advice - If you are making enough money that this even concerns you, you should consider starting to save for the future. A Solo-401(k) or IRA, or both. Read more on these two accounts and ask separate questions, if you'd like.\"",
"title": ""
},
{
"docid": "fa7e7edc134d1f760a8caf1500128104",
"text": "The thing about this, is that it isn’t one or two big decisions. It’s the thousands of smaller decisions. It’s the choice not to fund cost saving projects because spending cash looks bad this second. It’s not filling critical individual contributor roles and having too many levels of management. I can give you plenty of examples that show death by 1000 cuts but I think the best example is this: Internal projects (in general) need to be completed within the same calendar year. Any money that you do not spend in 2017 will not be there for you in 2018. So there is a mad rush in the beginning of the year to spend money and by September all the cash has been used up. Productivity takes a big hit and a significant amount of effort is spent jockeying for next years funding. GE is a financial company that makes things. It’s run by accountants not by logic.",
"title": ""
},
{
"docid": "a29275f2331ec196b0117951cdf72f42",
"text": "Short answer is to put the max 15% contribution into your ESPP. Long answer is that since you want to be saving as much as you can anyway, this is a great way to force you to do it, and pick up at least a 15% return every six months (or however often your plan makes a purchase). I say at least because sometimes an ESPP will give you the lower of the beginning or end period stock price, and then a 15% discount off of that (but check the details of your plan). If you feel like your company's stock is a good long term investment, then hold onto the shares when purchased. Otherwise sell as soon as you get them, and bank that 15% return.",
"title": ""
},
{
"docid": "9b979c17b0d319f3a93a4e6014825f2e",
"text": "If you use tax software to prepare your taxes, most packages have a planner for the next year. You could use that.",
"title": ""
},
{
"docid": "7204946de596496e2375d774802378fe",
"text": "Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] But if you don't have a business idea yet, and save for one in the future but never get that 'perfect idea', the good news is that you've saved a bunch of money that you can instead use for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you.",
"title": ""
},
{
"docid": "06edc42d5a3851e7bfe9f66ff48e7c06",
"text": "In your journal entry, debit the appropriate expense account (office supplies, etc) and credit your equity account. The equity account should be called something like Partner Investments or something like that. You can choose to enter these all separately, on the specific dates listed, or as one entry. Some people choose to summarize the expenses they've paid personally and only enter one entry per month or so, to minimize data entry time and also because the end effect is the same. Of course, the above is assuming you are considering these purchases to be investments in the company, and not expecting the company to repay you. If you are expecting repayment, you could enter a bill instead, or credit an account like 'Loan from Shareholder' rather than the equity account.",
"title": ""
}
] |
fiqa
|
3a5ec322dab34daa1742b42efa81b91a
|
Schedule C: where to deduct service fees on income?
|
[
{
"docid": "2dd158484be3298885447d00cdb0af66",
"text": "\"Putting them on line 10 is best suited for your situation. According to Quickbooks: Commissions and Fees (Line 10) Commissions/fees paid to nonemployees to generate revenue (e.g. agent fees). It seems like this website you are using falls under the term \"\"nonemployees\"\".\"",
"title": ""
}
] |
[
{
"docid": "5581a60e50161d4d3ba607cddf4e983e",
"text": "Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home. That leads to increased rates, heating, insurance and so on. Many tax regulators recognise that these are genuine expenses. The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue? The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected.",
"title": ""
},
{
"docid": "3bdd2e14dc990aa712c3092fbe817087",
"text": "I received a $2,000 bonus... Gross Income is income from whatever source derived, including (but not limited to) “compensation for services, including fees, commissions, fringe benefits, and similar items.” Adjusted Gross Income is defined as gross income minus adjustments to income. My question is, must I still report this money on my tax return and if so, how? Yes, and it would be on line 21 of your 1040 with supporting documentation. Are these legal fees deductible as an expense, and where would I list them? Yes, you would aggregate your deductible expenses and place these on your Schedule A. Instructions here. Good Luck. Edit: As Ben Miller pointed out in the comments, the deduction would be placed in either line 23 or 28 depending on the nature of the attorney (investment related or not).",
"title": ""
},
{
"docid": "f7072d45f9d0dd97853ebaa4a124af40",
"text": "You deduct expenses when you incur them (when you pay the hospital, for example). Medical expenses are deducted on Schedule A, subject to 7.5% AGI threshold. Financed or not - doesn't matter. The medical expense is deductible (if it is medically necessary), the loan interest is not.",
"title": ""
},
{
"docid": "a57851d680f06d0d027cbc370f7c762e",
"text": "I contacted Stephen Fishman, J.D., the author of Home Business Tax Deductions, to let him know that this question was missing from his book. He was kind enough to send a reply. My original phrasing of the question: If your car is used for both business and personal use, and you deduct via the actual expense method, do trips to the mechanic, gas station, and auto parts store to service or repair the car count as business miles, personal miles, or part-business-part-personal miles? What about driving the newly-purchased car home from the dealership? And his response: Good question. I can find nothing about this in IRS publication or elsewhere. However, common sense would tell us that the cost of driving to make car repairs should be deductible. If you use your car for business, it is a business expense, just like transporting any other piece of business equipment for repairs is a business expense. This should be so whether you use the standard mileage rate or actual expense method. You should probably reduce the amount of your deduction by the percentage of personal use of the car during the year. The same goes for driving a car home from the dealer.",
"title": ""
},
{
"docid": "7b171a55ca69f689ee46c4199f8dc686",
"text": "If thinking about it like a business you normally only pay taxes on Net income, not gross. So Gross being all the money that comes in. People giving you cash, checks, whatever get deposited into your account. You then pay that out to other people for services, advertisement. At the end of the day what is left would be your 'profit' and you would be expected to pay income tax on that. If you are just an individual and don't have an LLC set up or any business structure you would usually just have an extra page to fill out on your taxes with this info. I think it's a schedule C but not 100%",
"title": ""
},
{
"docid": "cecc860897423d6c529366fcac3bc914",
"text": "\"You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case. Be careful of answers like \"\"you don't need to pay anything\"\" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing \"\"business filed taxes\"\" with \"\"I filed schedule C\"\") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future.\"",
"title": ""
},
{
"docid": "0d75f727e95bfa59418f027d41e92665",
"text": "\"My suggestion would be\"\"inclusive/ including 2% service charge\"\" or \"\"2% deductible towards service charge would apply\"\"\"",
"title": ""
},
{
"docid": "ab8e5625963dace403b25188bb017acc",
"text": "\"No, not on schedule C, better. Its an \"\"above the line\"\" deduction (line 29 on your 1040). Here's the turbo tax article on it. The instructions for this line set certain limitations that you must take into the account, and yes - it is limited to the net profit from the business. One of the following statements must be true. You were self-employed and had a net profit for the year. You were a partner with net earnings from self-employment. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2. The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business. If you are filing Schedule C, C-EZ, or F, the policy can be either in your name or in the name of the business.\"",
"title": ""
},
{
"docid": "2af033af3f8b981e4e7147ebc864cc28",
"text": "\"You probably don't need S-Corp. There's no difference between what you can deduct on your Schedule C and what you can deduct on 1120S, it will just cost you more money. Since you're gambling yourself, you don't need to worry about liability - but if you do, you should probably go LLC route, much cheaper and simpler. The \"\"reasonable salary\"\" trick to avoid FICA won't work. Don't even try. Schedule C for professional gamblers is a very accepted thing, nothing extraordinary about it.\"",
"title": ""
},
{
"docid": "5abf3aeec6c19bec0614fea89f34cc6f",
"text": "Business expenses reduce business income. The SE tax is paid on business income. The credit for 1/2 the SE tax is based on the amount of SE tax paid. So:",
"title": ""
},
{
"docid": "e58d99883593d6d12f8032f38a42982d",
"text": "If your business is a Sole Proprietorship and meets the criteria, then you would file form Schedule C. In this case you can deduct all eligible business expenses, regardless of how you pay for them (credit/debit/check/cash). The fact that it was paid for using a business credit card isn't relevant as long as it is a true business expense. The general rules apply: Yes - if you sustain a net loss, that will carry over to your personal tax return. Note: even though it isn't necessary to use a business credit card for business expenses, it's still an extremely good idea to do so, for a variety of reasons.",
"title": ""
},
{
"docid": "90b272b16d3db982961db359ed6ecedc",
"text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.",
"title": ""
},
{
"docid": "e066e481ce1dc4ba46306df1ed00eb97",
"text": "I'm a CPA and former IRS agent and manager. Whether you are a cash or accrual basis taxpayer, you get to deduct the expense when your card is charged. Think of it this way: You are borrowing from the credit card company or bank that issued the credit card. You take that money to make a purchase of a product or service. You now have an expense and a liability to a third party. When you pay off the liability, you do not get to take a deduction. Your deduction is when you pay for the expense. Depending on what you purchased, you may have to capitalize it.",
"title": ""
},
{
"docid": "b573d3167787931ca68ccd809c08eea9",
"text": "PSB taxed at higher rates. PSB is taxed at 39.5% in Ontario, as the article mentioned. But if you pay all the net income to yourself as salary, you expense it and zero it out on the corporate level. So who cares what tax rate it is if the taxable income is zero? No-one. Same goes for the US, by the way. Personal Service Corporations are taxed at flat 35% Federal tax rate. But if you pour all the income into your salary - its moot, because there's no net income to pay tax of. If it's too complicated to figure out, maybe it would be wise to hire a tax accountant to provide counsel to you before you make decisions about your business.",
"title": ""
},
{
"docid": "d3d82e1a48bd6fd8afb26538e78100d8",
"text": "I'm not a tax advisor, but I've done freelance work, so... If any of your side-business revenue is reported on a 1099, you're now a business owner, which is why Schedule C must be filled out. As a business owner, minimum wage doesn't apply to you. All revenue is income to you, and you owe taxes on the profit, after subtracting legitimate (verifiable) business expenses. You'll want to talk to a real tax advisor if you're going to start expensing mileage, part of your house (if you use a home office), etc. Don't forget that you'll owe self-employment tax (the employer's half of your payroll tax). You can't save money on business taxes by paying yourself a wage and then counting it as an expense to the business. You'll definitely want to talk to a tax expert if you start playing around with finances as an (the) owner of the business. Income that is not reported on a 1099 should be reported as hobby income.",
"title": ""
}
] |
fiqa
|
a7e8e4bbe85be8892e28967633c3127c
|
Recourse with Credit Card company after victimized by fraud?
|
[
{
"docid": "56ffa3bbb77b4f73dd4978ddb796fdfc",
"text": "\"Concealing parts of a document in order to obtain a signature is illegal. The company committed signature forgery because they effectively modified the document after you signed it (i.e. unfolded the parts that were previously folded). I suggest that you go to your local police department to file a report, citing \"\"signature forgery\"\". Once you have the police report, call your bank's fraud department (not the general billing dispute line) and cite the police report right away, specifically calling out \"\"signature forgery\"\". I would be surprised if you don't get a favorable outcome.\"",
"title": ""
},
{
"docid": "5077ece9fb465616b271ea57098d6b1e",
"text": "If the business is being investigated by your state's Attorney General's office, then your first call should be to that office. They will be able to help you in a few ways, even if they can't explicitly resolve the situation, and they also would undoubtedly appreciate your information to add to their case as well. First, they may be able to tell you how other victims have had their cases resolved, particularly if any went to court on their own. While they won't be able to provide you with personal information of the other victims unless it is public knowledge (via a court case), the information about how the other victims resolved the cases may be helpful - both to show what to do, and what not to do. Second, they may be able to put you in contact with an attorney who is handling other cases like yours. That may reduce the cost of the attorney (as they'll have already done some of the work), and may mean that the attorney is willing to work with no up front fee on the assumption of winning the case. Third, if there are options for getting your money back without a court case, the AG's office may be able to help provide those as well. If the Attorney General's office is unable to help you, then your best bet is to contact an attorney on your own - look for one who specializes in consumer protection and fraud. This is the purpose attorneys exist for: pursuing your interests against another's. Let them do their job. Do make an effort to find a good, honest attorney; you may find some help on how to do this on law.se if you need it (not actual recommendations, mind you, just help with how you would go about finding one). It sounds like your claim would be above and beyond the level of a small claims court lawsuit, but verify this in your jurisdiction; if small claims court goes up to $10,000, you may be able to pursue it there on your own - but I would still get some help from an attorney, at least finding out what you would need to win.",
"title": ""
},
{
"docid": "626d5f971ddfa992bbbfc31670ab26a7",
"text": "\"I agree that you shouldn't give up trying to get your money back, but I strongly feel that this is not sufficient. If they are trying to victimize you, they are trying to victimize others. Taking care of getting your own money back should be your top concern, but contacting any Attorneys General and District Attorneys that have jurisdiction should also be a priority to help others--past, present, and future--that might be caught in this scam. Contact them, contact the police, contact the BBB, contact the local media. Shine a light and make the cockroaches pack up and get out of town. \"\"We got you... you have no recourse\"\" should always be met with the response, \"\"I will shut you down.\"\"\"",
"title": ""
}
] |
[
{
"docid": "9520bf26d6485a6f3ddee445a98cb94a",
"text": "Suing is a legitimate option as well as screening your calls but here's another idea which has personally worked and relates to the collections I did for awhile. Talk with the collector. Outstanding debt gets sold many times and each time a new collector gets their hands on an account they do their due diligence which means calling every single number multiple times. Collectors a looking for consumers who actively evade collections calls for years. My recommendation is to use logic and explain the situation. Give your first name and describe when you received the phone number and then ask a simple question. When in the last 3 1/2 years have you or any collector had a successful hit from this number. They'll respond never in 3 1/2 years. The collector notes the account for themselves and future collectors. Debt collectors are about about making money, not wasting time and they do review all notes pertaining to an account. Will it work? Maybe not but hopefully it will stop the calls with a short conversation. Good luck.",
"title": ""
},
{
"docid": "10565084dedce92fbd630abb94bd1c8e",
"text": "I am sorry for your troubles. Presumably, you are feeling better which is the best possible outcome. You project that you are an honest person and desire to seek a fair outcome although you were mistreated. The insurance company should have paid a good portion of this bill. Because of this situation you will learn a valuable lesson. Namely that collectors are scum. They lie and manipulate to do their job. They are trying to generate an emotional reaction out of you so you give in an put this bill on a credit card. Do not fear them. My advice would be to ignore them. You can educate yourself on collections law in your state. They cannot call you at work and they probably cannot call you on a cell phone. They will threaten to garnish your wages, tax return, and take away your birthday. Just don't talk to them. When you can save up some money. Once you have like $1200 attempt to settle in full for that amount. Get it in writing ahead of time and do not give them access to your checking account. Use a cashiers check or prepaid visa (that you then throw away). If they say no, do not argue, hang up and call back when you have 1300. Rinse, wash, repeat. There is a decent chance that they have already violated some form of collections law. If you have proof you can call the company's legal department and provide that proof. You can then settle on having your collections waived. In summary: This also presumes you have a lowish household income. If you make like 70K, jut pay the bill. I doubt that is the case though.",
"title": ""
},
{
"docid": "4b990953018d3153bff537dab484bac0",
"text": "Recovering after a card number has been stolen is a nuisance; you need to wade through determining which charges are and aren't legit, update the records of anyone who legitimately has your card on file, not have the card available until the replacement reaches you, etc. And you may be on the hook for the first $50 of the loss, if I remember correctly, unless (as mentioned) the bank waives that. Plus the risk that the card could be the first step in a larger identity theft attempt. And not everyone is so blase' about the bank losing money. Those costs get passed on to us, remember. And some of us actually respect our banks or credit unions. Certainly cards come with some consumer protection, otherwise nobody who thought about this would want to use them. But it's still worth exercising reasonable care to keep the problem from arising.",
"title": ""
},
{
"docid": "c73fa6c7170b8d929709dcd0f3304ece",
"text": "Find a way to raise the cash needed to pay the store back, plus penalties. Be humble and apologetic. You have committed fraud. Depending on the amount, it may be a felony. Be an adult, settle the debt. If not, they have grounds to open a complaint with law enforcement. Your county jail probably has a number of residents who are paper hangers.",
"title": ""
},
{
"docid": "8f854d13fe6e7e7454888e7e8e944c9d",
"text": "The credit card company isn't the one losing money here. It's the airline. The airline credited you back twice (once with the fraud report, once with the credit from the thief). Maybe you should call them if you want it resolved sooner. In any case, if/when they do come looking for their money, they will have the paperwork to prove that it belongs to them. You can spend the money now and risk paying it back later, you can watch and wait, or you can be proactive and ask the airline to fix it. They may or may not care about that sum.",
"title": ""
},
{
"docid": "18210fbf126f9cf8c9f7c3dff57363f8",
"text": "If possible, I would disable online payment on the card, immediately (reduce the limit of online payment to zero). I think you should also demand the photocopy back, immediately. It is tad confrontational, and maybe he did get it without any ill will, but even in this case, he should be made aware of the fact that this is wrong. Note that if he genuinely did it with ill will, he will have likely made multiple copies (who knows how many), so it will not really protect you from fraud (in this case). Then you should call or e-mail the card company (and/or your bank) and tell them what happened. I think they would consider the card stolen and maybe advise you on what you should do next. Note that if he uses the card, you might (and should) try to chargeback the money (through the card company), but it might be argued that you did not sufficiently protect the details of your card. And even if you succeed, the process can be long and you will not have access to your money in the meantime (this is one of the downsides of a debit card vs credit card...). You may also consider moving away the money from the associated bank account (so that there's not much to steal). Of course, the situation (on that front) gets more complicated if account overdrawing is enabled in your account.",
"title": ""
},
{
"docid": "7d643ed047c1d902947122689b38d25b",
"text": "\"Banks have a financial, and regulational duty called \"\"Know your customer\"\", established to avoid a number of historical problems occurring again, such as money laundering, terrorism financing, fraud, etc. Thanks to the scale, and scope of the problem (millions of customers, billions of transactions a day), the way they're handling this usually involves fuzzy logics matching, looking for irregular patterns, problem escalation, and other warning signs. When exceeding some pre-set limit, these signal clues are then filtered, and passed on for human inspection. Needless to say, these algorithms are not perfect, although, thanks to financial pressure, they are improving. In order to understand why your trading account has been suspended, it's useful to look at the incentives: false positives -suspending your trade, and assuming you guilty until proven otherwise- could cost them merely your LTV (lifetime value of customer -how much your business brings in as profit); while false negatives -not catching you while engaging in activities listed above- might cost them multi-month investigations, penalties, and court. Ultimately, this isn't against you. I've been with the bank for 15 years and the money in the accounts has been very slowly accumulated via direct-deposit paychecks over that time. From this I gather the most likely explanation, is that you've hit somekind of account threshold, that the average credit-happy customers usually do not exceed, which triggered a routine checkup. How do you deal with it? Practice puppetry! There is only one way to survive angry customers emotionally: you have to realize that they’re not angry at you; they’re angry at your business, and you just happen to be a convenient representative of that business. And since they’re treating you like a puppet, an iconic stand-in for the real business, you need to treat yourself as a puppet, too. Pretend you’re a puppeteer. The customer is yelling at the puppet. They’re not yelling at you. They’re angry with the puppet. Your job is to figure out, “gosh, what can I make the puppet say that will make this person a happy customer?” In an investigation case, go with boredom: The puppet doesn't care, have no feelings, and is eternally patient. Figure out what are the most likely words that will have the matter \"\"mentally resolved\"\" from the investigator's point of view, tell them what they have to hear, and you'll have case closed in no time. Hope this helps.\"",
"title": ""
},
{
"docid": "0cb044366e5e8e2c3a0d30dde28ca44e",
"text": "TL; DR : OP (for our purposes) has many years of copyright and history with business name. Scumbag insurance company start using same name. OP gets lots of insuance related calls and contact from confused customers. Scumbag insurance Co. uses Florida legal system, including scumbag judge, to try to screw Good Guy OP. Sucks. I upvoted in hopes that some FL lawyer will see it.",
"title": ""
},
{
"docid": "dcd4c837882562e73c64f9b4552eb5af",
"text": "Honestly, if you're going to restrict the online payment on your card over this, you may as well just restrict it permanently. Because this is definitely not the only time anyone has had an opportunity to retrieve the information on your card. There isn't really that much information on there - anyone taking more than a cursory look could in theory remember it and use it. We're talking waiters and checkout chicks, anytime you've given your card to anyone really. Banks know this. Credit card numbers are not really secure. They factor this in. And they have software for fraud detection - looking at large or unusual transactions and transactions in foreign countries etc. Of course it's not fool proof, but the best thing you can do isn't to cripple your card, but just be a little bit more diligent about checking your statements, making sure the transactions make sense. Some banks also allow you to set up an alert system so anytime any transactions occur you are notified immediately.",
"title": ""
},
{
"docid": "bf31dca0449fe2ee8c4a4b0001b7fcfd",
"text": "It is likely the policy of the credit card company. If you are running a business, you should factor in theft as part of your mark-up/margin. Every major business accounts for theft within their business practices and accounting. That way they are covered for instances like yours. If you have not been accounting for theft, then I'd highly recommend it. This might be an expensive learning lesson for your family business. Either implement new procedures such as checking ID with credit cards to match the names, or factor in theft/loss of product into your margins. Ideally, do both.",
"title": ""
},
{
"docid": "ed0f4a15ea7b5f4c0e208feb408df841",
"text": "\"I have some experience with this. I have had fraudulent charges appear on my credit card statement and had to change my card number several times, despite (I believe) no carelessness on my part. Every time that this has happened, I have never lost a penny due to fraud on my credit card. The bank has ultimately removed the fraudulent charges in every instance. Given this, you'd think the consumer doesn't need to worry about this at all. But it seems like credit card companies beg to differ. Yes, because although I have never lost a penny to fraud, the bank (or the merchant) loses money every time it happens. The $0 liability protects you; the card security measures protect the bank. But... why should a consumer ever bother worrying about these in the first place, when he knows he legally can't be held responsible for fraudulent charges? What exactly is this new \"\"peace of mind\"\" that he supposedly gets by (say) using features like virtual account numbers that he doesn't already have? Although you shouldn't end up out any money when this happens, it is an inconvenience. The bank will cancel your card and issue you a new number. It may take a few days for you to receive your new card. If you have another card to use, this isn't a big deal. If you are out of state the day before you need to check out of a hotel and return a rental car with no backup credit card (as I have been), it is a big deal. (In my case, I had to have the credit card company talk to the hotel to give them the new card number, and they were able to overnight me a new credit card so I could get home. I now make sure I carry a backup credit card.) Should a consumer put any effort into worrying about this at all? (Why?) In my opinion, it makes sense to be careful what you do with your credit card number, if only to avoid the inconvenience. Don't type your credit card number into an e-mail message, for example, and only use it on websites that you trust. That having been said, it is not worth it to be paranoid about it, either. No matter how careful you are, eventually you will probably use it at a store that gets hacked, or your card will get skimmed somewhere, and you'll need to get a new credit card number. The best way to protect yourself is to make sure that you go over your credit card statement each month and look for any fraudulent charges that the bank didn't catch.\"",
"title": ""
},
{
"docid": "ca9c5511d15fe54b47293c8e20c70d94",
"text": "\"As indicated in comments, this is common practice in the US as well as EU. For example, in this Fox Business article, a user had basically the same experience: their card was replaced but without the specific merchant being disclosed. When the reporter contacted Visa, they were told: \"\"We also believe that the public interest is best served by quickly notifying financial institutions with the information necessary to protect themselves and their cardholders from fraud losses. Even a slight delay in notification to financial institutions could be costly,” the spokesperson said in an e-mail statement. “Visa works with the breached entity to collect the necessary information and provides payment card issuers with the affected account numbers so they can take steps to protect consumers through independent fraud monitoring, and if needed, reissuing cards. The most critical information needed is the affected accounts, which Visa works to provide as quickly as possible.” What they're not saying, of course, is that it's in Visa's best interests that merchants let Visa know right away when a leak occurs, without having to think about whether it's going to screw that merchant over in the press. If the merchant has to consider PR, they may not let the networks know in as timely of a fashion - they may at least wait until they've verified the issue in more detail, or even wait until they've found who to pin it on so they don't get blamed. But beyond that, the point is that it's easier for the network (Visa/Mastercard/etc.) to have a system that's just a list of card numbers to submit to the bank for re-issuing; nobody there really cares which merchant was at fault, they just want to re-issue the cards quickly. Letting you know who's at fault is separate. There's little reason for the issuing bank to ever know; you should find out from the merchant themselves or from the network (and in my experience, usually the former). Eventually you may well find out - the article suggest that: [T]he situation is common, but there is some good news: consumers do in many cases find out the source of the breach. But of course doesn't go into detail about numbers.\"",
"title": ""
},
{
"docid": "39ce77a9a6f73da8194f996943405e13",
"text": "\"It's very straightforward for an honest vendor to refund the charge, and the transaction only costs him a few pennies at most. If you initiate a chargeback, the merchant is immediately charged an irreversible fee of about $20 simply as an administrative fee. He'll also have to refund the charge if it's reversed. To an honest merchant who would've happily refunded you, it's unfair and hurtful. In any case, now that he's out-of-pocket on the administrative fee, his best bet is to fight the chargeback - since he's already paid for the privilege to fight. Also, a chargeback is a \"\"strike\"\" against the merchant. If his chargeback rate is higher than the norm in his industry, they may raise his fees, or ban him entirely from taking Visa/MC. For a small merchant doing a small volume, a single chargeback can have an impact on his overall chargeback rate. The \"\"threshold of proof\"\" for a chargeback varies by patterns of fraud and the merchant's ability to recover. If you bought something readily fungible to cash - like a gift card, casino chips, concert tickets etc., forget it. Likewise if you already extracted the value (last month's Netflix bill). Credit card chargeback only withdraws a payment method. Your bill is still due and payable. The merchant is within his rights to \"\"dun\"\" you for payment and send you to collections or court. Most merchants don't bother, because they know it'll be a fight, an unpleasant distraction and bad for business. But they'd be within their rights. Working with the merchant to settle the matter is a final resolution.\"",
"title": ""
},
{
"docid": "0fa57073146e6e11461601c5ccd90fba",
"text": "I work in the retail software industry, and can confirm this is a major problem right now. There are several very popular point of sale packages that hackers have written RAM scrapers for. Yes, there is (a lot) of credit card fraud traced back to these hacks.",
"title": ""
},
{
"docid": "a67b84670a97379f11e967c438782974",
"text": "I call bullshit. $7 an hour, both parents working 40 hours a week. Assume they pay no federal income tax (is this a govt hand out?) so they take home say... $500 a week, combined, to be generous. That's $2000 a month. Daycare for two young kids, you did say a family right? That's $1000 a month. Now, shelter and heat. Are you working in a city where you can ride the bus, and pay $1000 a month for a small apartment, or in the country where you can get a house for $650 a month, but then have to own two cars and pay for gas? Do I need to go much further?",
"title": ""
}
] |
fiqa
|
7fe2adece03a542541107e1c2c05ffed
|
If the former owner of my home is still using the address, can it harm me?
|
[
{
"docid": "786c59e47191338a9ea67a111bbb1567",
"text": "Give it to your mailman to return to sender. For this kind of material, return service is always requested, and it will let the bank know that they have incorrect address information. If the owner needs the cards, he'll contact the bank, or the bank will contact him to verify the address. Either way, as long as its not in your name, I don't think you should be worried.",
"title": ""
},
{
"docid": "679dd002de68db29b51e24052c1384c2",
"text": "Don't worry about it. One of the big banks who like to whine a lot about defaulting borrowers is sending credit cards to a former resident of my home. The guy died in the late 90s.",
"title": ""
}
] |
[
{
"docid": "0572d8145317a4ad82e1ea9467de9d01",
"text": "I have prepared a report on scam's like this. I'd be happy to deliver a copy of the report to your home. Just give me your address and mail me the keys to your house and I'll drop by and leave it in your home. Oh, and tell me a time when you won't be home, so I won't bother you when I come by. It might also be helpful if you tell me if you have any cash, jewelry, or other valuables in the house and where you keep them, so I can give you advice on security measures. :-)",
"title": ""
},
{
"docid": "2b7e8ecc80023da253d521cf2d0df719",
"text": "The use of an old address would make me suspect that your data was stolen from some database you had registered to long ago with the old address. I would think that contacting your credit rating firm and the credit card company is urgent.",
"title": ""
},
{
"docid": "c082f5ecaa21f07ffca04ffe9e7f91d4",
"text": "A person name Matthew Drury or a similar name owes money on their loan, and it has gone to collections. The collections company is trying to match the account to a real person with money. They sent a letter to somebody (your grandmother) with the same last name. The debtor may have even lived in that town at sometime. The reason you received the letter is because your grandmother forward it on. Because the rest of your info (SSN and birth date) don't match the loan it is unlikely they can attach the debt to you. Unless you provided your address to the company you could in the future receive a letter from them. But I doubt they are going to send letters to everybody with the same name. I would not worry about it unless they actually send a letter or call you directly.",
"title": ""
},
{
"docid": "e2f9abc71d89c073026cd22c98399860",
"text": "Generally when items go to collection you will receive a letter in the mail not an email. You can try to dispute the charge with the credit companies (TransUnion, Equifax, and Experian) showing that the charge came after you left the country. Like the answer above me said, disputing it may cause the 7 year clock to restart which leaves it on your account longer. It may just be simpler to try to improve your credit score instead. You can check your credit score as often as you want using Credit Karma online or on your phone.",
"title": ""
},
{
"docid": "7c5cc6a65fe0e84aeb7e427dd8dd776c",
"text": "Cash should never have been placed in the mailbox in the first place; this is what checks are for. I would be a bit surprised if that constitutes your accepting payment, but I Am Not A Lawyer. You need local legal advice; this is the sort of thing where local rulings matter. Definitely report the missing money to the police, no matter what else you do. You do not have to give them an opinion on whether this was a theft or an attempted fraud; just give them the facts that the tenant says they left money in the box but you didn't find it there.",
"title": ""
},
{
"docid": "5b75e922955ba35d021aa1fdbfdaeebc",
"text": "\"There are several areas of passive fraud by being unclear on what you are doing. When a citizen buys a house, the mortgage lender wants all the details as to how the buyer rounded up the money. That is so they can use their own formulas to assess the buyer's creditworthiness and the probability that the buyer will be able to keep up on payments, taxes and maintenance; or have they overextended themselves. The fraud is in the withholding of that info. By way of tricking them into making a favorable decision, when they might not have if they'd had all the facts. Then there's making this sound all lovey-dovey, good intentions, no strings attached, no expectations. You're lying to yourself. What you've actually done is put money between yourselves, because you have not laid down FAIR rules to cover every possibility. You're not willing to plan for failure because you don't want to admit failure is possible, which is vain. Once you leap into this bell jar, the uncertainty of \"\"what happens if...\"\" will intrude itself into everyone's thoughts, slowly corroding your relationship. It's a recipe for disaster. That uncertainty puts her in a very uncomfortable position. She has to labor to make sure the issue doesn't explode, so she's tiptoeing around you to avoid fights. Every fight, she'll wonder if you'll play the breakup card and threaten to demand the money back. The money will literally come between you. This is what money does. Thinking otherwise is a young person's mistake of inexperience. Don't take my word on it, contact Suze Orman and see what she says. Your lender is also not going to like those poorly defined lovers' promises, because they've seen it all before, and don't want to yet again foreclose on a house that fighting lovers trashed. (it's like, superhero battles are awesome unless you own the building they trashed.) This thing can still be done, but to remove this fraud of wishful thinking, you need to scrupulously plan for every possibility, agree to outcomes that are fair and achievable, put it in writing and share it with a neutral third party. You haven't done it, because it seems like it would be awkward as hell - and it will be! - Or it will test your relationship by forcing direct honesty about a bunch of things you haven't talked about or are afraid to - and it will! - And to be blunt, your relationship may not be able to survive that much honesty. But if it does, you'll be in much better shape. The other passive fraud is taxes. By not defining the characteristics of the payment, you fog up the question of how your contribution will be taxed (if it will be taxed). A proper contract with each other will settle that. (there's an argument to be made for involving a tax advisor in the design of that contract, so that you can work things to your advantage.) As an example, defining the payment as \"\"rent\"\" is about the worst you could do, as you will not be able to deduct any home expenses, she will need to pay income tax on the rent, but she can cannot take landlord's tax deductions on anything but the fraction of the house which is exclusively in your control; i.e. none.\"",
"title": ""
},
{
"docid": "d0a4893b71dec99934e4e67dee7a5b8c",
"text": "I walked away from a house last year and don't regret it a single bit. I owed $545,000 and the bank sold it a month after moving out for $328,900. So technically I guess I can be on the hook to someone for the missing $216,100 for many years to come. Oh well. They can come after me if they want and I'll declare bankruptcy then.",
"title": ""
},
{
"docid": "8f364aab021845547452178a44d83fa4",
"text": "The issue is that the lender used two peoples income, debts, and credit history to loan both of you money to purchase a house. The only way to get a person off the loan, is to get a new loan via refinancing. The new loan will then be based on the income, debt, and credit history of one person. There is no paperwork you can sign, or the ex-spouse can sign, that will force the original lender to remove somebody from the loan. There is one way that a exchange of money between the two of you could work: The ex-spouse will have to sign paperwork to prove that it is not a loan that you will have to payback. I picked the number 20K for a reason. If the amount of the payment is above 14K they will have to document for the IRS that this is a gift, and the amount above 14K will be counted as part of their estate when they die. If the amount of the payment is less than 14K they don't even have to tell the IRS. If the ex-souse has remarried or you have remarried the multiple payments can be constructed to exceed the 14K limit.",
"title": ""
},
{
"docid": "9c45066b63198035b22930c8c25a63c2",
"text": "Sit down with professional with knowledge about eldercare issues. Know how your options regarding the property ownership can impact the services they qualify for. Even making a change in ownership can impact their eligibility for certain programs. Some of which can reach back to events in the recent past. Also if you own it but she will get some of the profits when you sell, she could still be considered an owner, which can impact eligibility for programs. This is in addition to the issues with the lender, the IRS, and your estate.",
"title": ""
},
{
"docid": "cf81a4ba6b9b12171f818ca09c08f24a",
"text": "Yes. As a general case, insurance proceeds are repaying you for the damage that you have already incurred, not specifically for fixing anything. Since you have the legal right to sell the house as-is, without fixing it up at all, then you have the legal right to spend the insurance proceeds how you see fit. You can upgrade, downgrade, alter or replace your deck in any reasonable way... or do nothing. You should call your agent and make sure that there is nothing unusual in your policy, but this kind of homeowner decision - what materials or methods to fix damage to a home... is very normal and unremarkable, so your agent will probably reassure you and end the conversation without a second's thought.",
"title": ""
},
{
"docid": "28cccf2259032e396246ffa281454d93",
"text": "\"Can I rent a mailbox at UPS Store and use it as a physical business address? Depending on the type of business, this may not be allowed. However, there's no blanket restriction, so you need to check if for business of the type that you have this is not forbidden. In any case, there's \"\"business address\"\" and there's \"\"address of records\"\". The former can, for most part, be a PO box. The latter usually cannot. Check if Virginia requires \"\"address of records\"\" to be provided. Can I use my home address as a registered agent address? If yes, would my house be considered as a business property? or registered address is just an address that gonna receive mails from the government state? Yes, you can be your LLCs registered agent. The registered agent must be able to accept official deliveries during the regular business hours. PO box cannot be used for that purpose, it must be a physical address where there's someone present to sign for you when you're served with lawsuits and notices. If you are not at home during the regular business hours - you cannot provide your home address for that purpose. You will be using your home for business purposes, whether you're serving as your own registered agent or not. So depending on your county/city laws - it is likely that your home will be considered place of business either way. Can I use UPS mailbox store for both business address and registered agent? See above. What other options should I consider? You can hire a register agent in your State, it is usually $50-$100/year. They will scan whatever they receive and forward to you, usually within hours. Some also provide mail forwarding service (i.e.: they'll forward any mail for you, not only official correspondence), but that usually costs extra.\"",
"title": ""
},
{
"docid": "9af1751c7dbb6409ff531858519a3344",
"text": "You should probably consult an attorney. However, if the owner was a corporation/LLC and it has been officially dissolved, you can provide an evidence of that from your State's department of State/Corporations to show that their request is unfeasible. If the owner was a sole-proprietor, then that may be harder as you'll need to track the person down and have him close the plan.",
"title": ""
},
{
"docid": "65e4389f5e6ff887ee174604124f633d",
"text": "According to this Q&A by a Houston law professor: The law, however, is not designed to interfere with an individual's right to stop payment on a valid check because of a dispute with someone. If he didn't deliver as promised, you do not owe the money and have the right to stop payment. Assuming that you had enough money in the bank to cover the check, stopping payment is not a crime. I found several other pages essentially saying the same thing. All the usual disclaimers apply, I am not a lawyer, this is not legal advice, etc. In particular, laws might vary by state. Basically, though, it doesn't seem there's any reason why you can't stop payment on the check just because you feel like it. If you then provide a cashier's check for the payment, your ex-partner will not really have anything to complain about. If you're worried about annoying him by doing this, that's a separate issue, but given the situation you describe, I don't see why you should be. If you feel he is being a pain in the neck, feel free to be a pain in the neck right back and force him to accept the payment in the manner you decide, instead of allowing him to string you along. Note two things: obviously if you have reason to believe the guy will sue you, you should act with caution. Also, I'm not suggesting withdrawing payment completely, only stopping the check and issuing a new payment that you don't have to wait on (e.g., cashier's check).",
"title": ""
},
{
"docid": "7140611637ffc227408550e614481205",
"text": "As far as I understand, equifax collects data about individuals and scores their credit worthiness. The ceo did Jack shit about keeping all that private data safe, so they got hacked and all that data is now in someone else's hands. The possible implications? Large scale identify fraud of anyone whose details got stolen, since it encompasses everything that is needed for that. And that is besides the privacy violation.",
"title": ""
},
{
"docid": "faeb796265f2a3e6cade0b664a70f96f",
"text": "Who are the enforcers? That sounds like a government. So we have to wait until someone gets murdered at a house before we then ostracize that house from society? That's seems horribly inefficient. A bad company could just change their address and name over and over to avoid being ostracized. And how is a company's brand going to be hurt when it's private security company disputes every crime that company commits? Why should a company care about its brand so long as its making tons of money (think about Comcast, for example)?",
"title": ""
}
] |
fiqa
|
dc3b205b9cd33e1eeef1671092918f37
|
Primary residence converted to a rental property & tax implications
|
[
{
"docid": "2f433e95de68c23d93cf4fae5295ecc2",
"text": "You will need to look at the 27.5 year depreciation table from the IRS. It tells you how you will be able to write off the first year. It depends on which month you had the unit ready to rent. Note that that it might be a different month from when you moved, or when the first tenant moved in. Your list is pretty good. You can also claim some travel expenses or mileage related to the unit. Also keep track of any other expenses such as switching the water bill to the new renter, or postage. If you use Turbo tax, not the least expensive version, it can be a big help to get started and to remember how much to depreciate each year.",
"title": ""
},
{
"docid": "8c5aa064b387820dc05c7f309a1ffe17",
"text": "Schedule E is the form you'll use. It lists nearly all deductions you can take for a rental. TurboTax Deluxe will handle it and it includes State Filing.",
"title": ""
}
] |
[
{
"docid": "01c6706b742d0639d685a8d39313b62e",
"text": "According to the tax reform framework, changes to the current tax code would eliminate important provisions, such as the state and local tax deduction, while nearly doubling the standard deduction and eliminating personal and dependency exemptions. NAR believes the result would all but nullify the incentive to purchase a home for most, amounting to a de facto tax increase on homeowners, putting home values across the country at risk and ensuring that only the top 5 percent of Americans have the opportunity to benefit from the mortgage interest deduction. This isn't good and serves no benefit. You would THINK someone with a background in real Estate would know this. It appears not. There would also be a rise in rents as taxes go up.",
"title": ""
},
{
"docid": "488a2e2da0765eb148803ded8cdeccfb",
"text": "Like @littleadv, I don't consider a mortgage on a primary residence to be a low-risk investment. It is an asset, but one that can be rather illiquid, depending on the nature of the real estate market in your area. There are enough additional costs associated with home-ownership (down-payment, insurance, repairs) relative to more traditional investments to argue against a primary residence being an investment. Your question didn't indicate when and where you bought your home, the type of home (single-family, townhouse, or condo) the nature of your mortgage (fixed-rate or adjustable rate), or your interest rate, but since you're in your mid-20s, I'm guessing you bought after the crash. If that's the case, your odds of making a profit if/when you sell your home are higher than they would be if you bought in the 2006/2007 time-frame. This is no guarantee of course. Given the amount of housing stock still available, housing prices could still fall further. While it is possible to lose money in all sorts of investments, the illiquid nature of real estate makes it a lot more difficult to limit your losses by selling. If preserving principal is your objective, money market funds and treasury inflation protected securities are better choices than your home. The diversification your financial advisor is suggesting is a way to manage risk. Not all investments perform the same way in a given economic climate. When stocks increase in value, bonds tend to decrease (and vice versa). Too much money in a single investment means you could be wiped out in a downturn.",
"title": ""
},
{
"docid": "62e19fc212bb3018ffc2b2faf371bbf9",
"text": "No one has considered the tax write off at the end of the year? Will the house be in the parent's name or his, and can one of them take a write off for taxes and interest at the end of each year? On a small salary this may mean he has no tax liability for the four years, and can possibly make up the extra buying costs.... also, look at the comps in the area for the past five years and see if home values have increased and turnover rate for the area will tell you if people are buying in that area...",
"title": ""
},
{
"docid": "6c7494f65e738ea5645c9c5d44b7a4fd",
"text": "As DJClayworth said, be very careful with this one! The property is a residence, not a business location. Given that, it is almost a certainty that the IRS is not going to let you claim 100% of the expenses for the home as a business expense, even if nobody's actually living there. You may get away with doing this for a period of time and not run into zoning or other issues such as those DJ mentioned, but it's like begging for trouble. You run the very real risk of being audited if you try to do what you're proposing, and rest assured, whatever you saved in taxes will disappear like smoke in the wind under an audit. That being said, there's no reason you can't call a tax service and ask a simple question, because in answering it they're going to hope to gain your business. It'd be well worth the phone call before you land yourself in any hot water with the IRS. I can tell you that I'd rather have a double root canal with no anesthetic than go through an audit, even when I didn't do anything wrong! (grin) Good luck!",
"title": ""
},
{
"docid": "18a4acfd33c5b0a9aca4a2a2e35d466f",
"text": "The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events.",
"title": ""
},
{
"docid": "a873928ae3e926d6bf8cd38ab90ef9d7",
"text": "You have some of the math right, but are missing a few things. Here's what I can offer - if I leave anything out, someone please expand or clarify. Rental income can be reduced by mortgage interest and maintenance costs (as you mentioned), but also by property tax payments, association fees, insurance costs, landlord expenses, and depreciation. Note that if you don't live in the property for 3 years, you'll have to pay capital gains tax if/when you sell the house. You can live in it again for 2 of the last 5 years to avoid this. Many people recommend only assuming you will get 10 months of rental income a year, to account for transitions between tenants, difficult in finding new tenants, and the occasional deadbeat tenant. This also adds a buffer for unexpected problems you need to fix in the house. If you can't at least break even on 10 months of income a year, consider the risk. I think there are also some cases where you need to repay depreciation amounts that you have deducted, but I don't know the details. Renting out a house can be fun and profitable, but it's very far from a sure thing. I'd always recommend preparation and caution, and of course talking to professionals about the finances, accounting, and lease-writing. Good luck!",
"title": ""
},
{
"docid": "192f12f3a621c20f99e0adf31f0e9f16",
"text": "\"Is it possible if (After getting EIN) I change my LLC type (disregarded entity or C type or S type or corporation or change in number of members) for tax saving ? You marked your question as \"\"real-estate\"\", so I'm guessing you're holding rental properties in your LLC. That means that you will not be able to qualify for S-Corp, only C-Corp treatment. That in turn means that you'll be subject to double taxation and corporate tax rate. I fail to see what tax savings you're expecting in this situation. But yes, you can do it, if you so wish. I suggest you talk to a licensed tax adviser (EA/CPA licensed in your State) before you make any changes, because it will be nearly impossible to reverse the check-the-box election once made (for at least 5 years).\"",
"title": ""
},
{
"docid": "4e3b1edfe5ef47fef78db9ccac632684",
"text": "Some of the information on the HUD-1 form would have been useful to complete the income tax paperwork the next spring. It would have had numbers for Taxes, and interest that were addressed at the settlement. It is possible it is mixed in with the next years tax information. If I needed a HUD-1 form from 15 years ago, I wouldn't ask the real estate agent, I would ask the settlement company. They might have a copy of the paperwork. They might have to retrieve it from an archive, so it could take time, and they could charge a fee. The local government probably doesn't have a copy of the HUD-1, but they do have paperwork documenting the sale price when the transaction took place. I know that the jurisdictions in my area have on-line the tax appraisal information going back a number of years. They also list all the purchases because of the change in ownership, and many also list any name changes. You probably don't want a screen capture of the transactions page, but the tax office might have what you need. This is the same information that the title search company was retrieving for their report. Question. Is there going to be capital gains? For a single person there is no gains unless the increase in price is $250,000. For a couple it is $500,000. I am ignoring any time requirements because you mentioned the purchase was 15 years ago. I am also assuming that it was never a rental property, because that would require a lot more paperwork.",
"title": ""
},
{
"docid": "7455319de0de59050f5b59e53c48bbe1",
"text": "\"I am not a lawyer nor a tax accountant, so if such chimes in here I'll gladly defer. But my understanding is: If you're romantically involved and living together you're considered a \"\"household\"\" and thus your finances are deemed shared for tax purposes. Any money your partner gives you toward paying the bills is not considered \"\"rent\"\" but \"\"her contribution to household expenses\"\". (I don't know the genders but I'll call your partner \"\"her\"\" for convenience.) This is not income and is not taxed. On the off chance that the IRS actually investigated your arrangement, don't call any money she gives you \"\"rent\"\": call it \"\"her contribution to living expenses\"\". If you were two (or more) random people sharing a condo purely for economic reasons, i.e. you are not a family in any sense but each of you would have trouble affording a place on your own, it's common for all the room mates to share the rent or mortgage, utilities, etc, but for one person to collect all the money and write one check to the landlord, etc. Tax law does not see this as the person who writes the check collecting rent from the others, it's just a book-keeping convenience, and so there is no taxable transaction. (Of course the landlord owes taxes on the rental income, but that's not your problem.) In that case it likely would be different if one person outright owned the place and really was charging the others rent. But then he could claim deductions for all the expenses of maintaining it, including depreciation, so if it really was a case of room mates sharing expenses, the taxable income would likely be just about zero anyway. So short answer: If you really are a \"\"couple\"\", there are no taxable transactions here. If the IRS should actually question it, don't refer to it as \"\"collecting rent\"\" or any other words that imply this is a business arrangement. Describe it as a couple sharing expenses. (People sometimes have created tax problems for themselves by their choice of words in an audit.) But the chance that you would ever be audited over something like this is probably remote. I suppose that if at some point you break up, but you continue to live together for financial reasons (or whatever reasons), that could transform this into a business relationship and that would change my answer.\"",
"title": ""
},
{
"docid": "ab9f929ea3fa816e309577a582a4c26e",
"text": "The only downside is for the agents, not you. Agents, especially selling agents, prefer the concession over the price reduction for their own interests. They get a commission on a higher purchase price. That, and the recorded sales price for the house is a tad higher, which incrementally increases the comps for the next sales. When we moved, the agent conditioned me to get ready to offer a concession should we decide to sell our previous home. We decided to rent that property, and have someone else manage it. But with regard to your questions, the concessions are applied against your closing costs. When we bought our last house they specified caps on the closing costs, so money will be typically be withheld (or not) contractually. The concessions aren't a taxable gain. Your basis in the property will be higher than if you get a price reduction, but the lower basis (hopefully) means a higher capital gain when you sell.",
"title": ""
},
{
"docid": "9c6049b7f0f02c8b3d88fd94a38a84ea",
"text": "I kind of hate piling on with another opinion, but this is too long for a comment. I did what you are thinking of doing, I would at least try renting it for a couple years so long as: The primary risks of renting are mostly related to unexpected costs and bad tenants, you've got a very healthy income, so as long as you maintain a nice emergency fund it doesn't sound like keeping this property as a rental will be too much risk. If the rental market is strong where your house is, then you have a better chance of avoiding bad tenants. I like to keep my rent a little lower than the max I think it could go for, to attract more applications and hopefully find someone who will be a good longer term tenant. Tax-free gains So long as you lived in your house 2 of the last 5 years, you can sell without paying capital gains tax on your profit, so you could try renting it for 2 years and then sell. That was a key for me when I converted my first house to a rental. I liked that flexibility, there's still the typical renting risks associated, but it's not a lifelong commitment. You can get 2 years of increased equity/appreciation tax-free, or you could find you enjoy it and keep it for the long haul.",
"title": ""
},
{
"docid": "44a4da7d3f9b0a853729ea4b848174d9",
"text": "This new roof should go on the 2016 LLC business return, but you probably won't be able to expense the entire roof as a repair. A new roof is most likely a capital improvement, which means that it would need to be depreciated over many years instead of expensed all in 2016. The depreciation period for a residential rental property is 27.5 years. Please consider seeking a CPA or Enrolled Agent for the preparation of your LLC business return. See also: IRS Tangible Property Regulations FAQ list When you made the loan to the LLC (by paying the contractor and making a contract with the LLC), did you state an interest rate? If not, you and your brother should correct the contract so that an interest rate is stated, then follow it. The LLC needs to pay you interest until the loan is paid off. You need to report the interest income on your personal return, and the LLC needs to report the interest expense in its business return.",
"title": ""
},
{
"docid": "fc6045279745777f82afedccd6bbf517",
"text": "To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental.",
"title": ""
},
{
"docid": "724c1a643a96bf8d1b035e16c22e6f01",
"text": "It increases mobility for homeowners. I don't know what tax jurisdiction you are in but you'll tend to get a break on taxes if you are selling your primary residence. For example, if you were to relocate to another location and it was taxed normally, then it will trigger a tax bill on a home, even though you were going to repurpose those funds for a similar home.",
"title": ""
},
{
"docid": "cc944b121bd06b9a75a12eae2177827d",
"text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5",
"title": ""
}
] |
fiqa
|
d6198d2ec636f1d130c860b7210b4067
|
Appropriate model for deferred costs as a line-of-credit
|
[
{
"docid": "fbb266c63910a7158d5318a7475546f1",
"text": "There's no standard formula. You can compare the going rates on the market for unsecured LOCs and take that as the starting anchor. Unsecured lines of credit run in the US at about 8-18%. Your risk should be reflected in the rate, and I see no reason why the rate would change throughout the loan. As to the amount of principal changing? Just chose one of the standard compounding options - daily (most precise, but most tedious to calculate), monthly average balance, etc.",
"title": ""
}
] |
[
{
"docid": "5887589fd2f004e5ffadf2a922b01929",
"text": "Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt. This is the information i am given and it in USD. Thanks for the link. I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years",
"title": ""
},
{
"docid": "640f0101522cb8468e2e684853d1e047",
"text": "At the most basic level of financing a business -- you are trying to acquire capital as cheaply as you can to invest in your projects. The measure for how expensive your capital is to acquire is Weighted Average Cost of Capital. The formula for WACC: Equity Ratio * Cost of Equity + Debt Ratio * Cost of Debt * (1 - Tax Rate) This is also your discount rate when you're making a DCF model. Debt tends to be cheaper than equity when you don't already have any, and is also advantaged by tax rates since you don't pay taxes on interest. In the real world, banks and lenders will ratchet up rates the more debt you acquire, or shut you out once you've taken on too much and your debt service coverage is too low for them. In a classroom though, most teachers are too lazy to make a curvilinear formula for borrowing and will just state a rate for borrowing so you can load up on debt so long as you don't fall below being able to service your debt (cash flow to make your debt payments). This will ultimately juice the returns on equity. Realistically, you would find lenders would let you have ~20% equity in the business and ~80% debt without raising your teacher's eyebrow. If you haven't taken accounting yet; be careful about the difference between cash and revenue in your analyses. Revenue is recognition for work done; not cash in hand. You can have all the revenue in the world but if no one's paid you for it yet, you can't pay anyone.",
"title": ""
},
{
"docid": "4e6b6f2ab973a0b3bb9ac1803d72f640",
"text": "\"EBITDA is in my opinion not a useful measure for an investor looking to buy shares on the stock market. It is more useful for private businesses open to changing their structuring, or looking to sell significant parts of their business. One of the main benefits of reporting Earnings Before Interest, Taxes, Depreciation & Amortization, is that it presents the company as it would look to a potential buyer. Consider that net income, as a metric, includes interest costs, taxes, and depreciation. Interest costs are (to put it simply) a result of multiplying a business's debt by its interest rate. If you own a business, and personally guarantee the loan that the company has with the bank, your interest rates might be artificially low. If you have a policy of reaching high debt levels relative to your equity, in order to achieve high 'financial leveraging', your interest cost might be artificially high. Either way, if I bought your business, my debt structure could be completely different, and therefore your interest costs are not particularly relevant to me, a potential buyer. Instead, I should attempt to anticipate what my own interest costs would be, under my plans for your business. Taxes are a result of many factors, including the corporate structure of the business. If you run your business as a sole proprietorship (ie: no corporation), but I want to buy it under my corporation, then my tax rates could look nothing like yours. Or if we operated in multiple jurisdictions. etc. etc. Instead of using your taxes as an estimate for mine, I should anticipate my taxes based on my plans for your business. Depreciation / amortization is a measure that estimates how much of a business's \"\"fixed assets\"\" were \"\"used up\"\" during the year. ie: how much wear and tear occurred on your fleet of trucks? It is generally calculated as a % of your overall asset value. It is a (very loose) proxy for the cash costs which will ultimately be incurred to make repairs/replacements. D&A is also something which could significantly change if a business changes hands. If the value of your building is much higher now than when you bought it, I will have higher D&A costs than you [because I will be recording a % of total costs higher than yours], and therefore I should forecast my own D&A. Removing these costs from Net Income is not particularly relevant for a casual stock investor, because these costs will not change when you buy shares. Whatever IBM's interest cost is, reflects the debt structuring policy that the company currently has. Therefore when you buy a share in IBM, you should consider the impact that interest has on net income. Similarly for taxes and D&A - they reflect costs to the business that impact the company's ability to pay you a dividend, and therefore you should look at net income, which includes those costs. Why would a business with 'good net income' and 'good EBITDA' report EBITDA? Because EBITDA will always be higher than net income. Why say $10M net income, when you could say $50M EBITDA? The fact is, it's easy to report, and is generally well understood - so why not report it, when it also makes you look better, from a purely \"\"big number = good\"\" perspective? I'm not sure that reporting EBITDA implies any sort of manipulative reporting, but it would seem that Warren Buffet feels this is a risk.\"",
"title": ""
},
{
"docid": "35ff05e2d5c742c8cf523afc69864cb9",
"text": "Conservative = erring on the side of ascribing a higher EV to the business. Because if you're someone looking to acquire the business, for example, and let's say we're talking about a business that has debt which trades at a discount, it's more conservative to assume that the debt can't necessarily be restructured. To use an extreme example, as you're valuing the business, would it be conservative or aggressive to assume that the debt got magically wiped out altogether? So that's why I'm saying that it's more conservative to use the book value of the debt.",
"title": ""
},
{
"docid": "8143e59701da827051bb11538170aa2e",
"text": "Hi guys, have a question from my uni finance course but I’m unsure how to treat the initial loan (as a bond, or a bill or other, and what the face value of the loan is). I’ll post the question below, any help is appreciated. “Hi guys, I have a difficult university finance question that’s really been stressing me out.... “The amount borrowed is $300 million and the term of the debt credit facility is six years from today The facility requires minimum loan repayments of $9 million in each financial year except for the first year. The nominal rate for this form of debt is 5%. This intestest rate is compounded monthly and is fixed from the date the facility was initiated. Assume that a debt repayment of $10 million is payed on 31 August 2018 and $9million on April 30 2019. Following on monthly repayments of $9 million at the end of each month from May 31 2019 to June 30 2021. Given this information determine the outstanding value of the debt credit facility on the maturity date.” Can anyone help me out with the answer? I’ve been wracking my brain trying to decide if I treat it as a bond or a bill.” Thanks in advance,",
"title": ""
},
{
"docid": "e1e8de1e86545e7b11ad859682abc36d",
"text": "\"What you are describing is a Chart of Accounts. It's a structure used by accountants to categorise accounts into sub-categories below the standard Asset/Liability/Income/Expense structure. The actual categories used will vary widely between different people and different companies. Every person and company is different, whilst you may be happy to have a single expense account called \"\"Lunch\"\", I may want lots of expense accounts to distinguish between all the different restaurants I eat at regularly. Companies will often change their chart of accounts over time as they decide they want to capture more (or less) detail on where a particular type of Expense is really being spent. All of this makes any attempt to create a standard (in the strict sense) rather futile. I have worked at a few places where discussions about how to structure the chart of accounts and what referencing scheme to use can be surprisingly heated! You'll have to come up with your own system, but I can provide a few common recommendations: If you're looking for some simple examples to get started with, most personal finance software (e.g. GnuCash) will offer to create an example chart of accounts when you first start a session.\"",
"title": ""
},
{
"docid": "169ac6df5e472cb69b5b5f4d218b4e72",
"text": "No, the more conservative approach is to use the market value of debt (at least assuming its trading at a discount). A company wouldn't necessarily have to come to an agreement with creditors, they would just default on their obligations. In which case the company may file for bankruptcy protection, which allows for a variety of scenarios to play out (both consensual and not). As for when debt trades at a premium, we're talking about two different factors that effect bond prices. Credit risk and interest rate risk. But yes, a company does have a higher financial obligation if interest rates decline. They're stuck paying 8% in an environment where they could refinance for 6%. If they refinance, then creditors more than likely aren't going to take less than par. If they don't refinance, then they have the opportunity cost of essentially overpaying on their cost of debt.",
"title": ""
},
{
"docid": "651dfa3ed26a3922ea27fad132502403",
"text": "\"Okay, yes! That would seem to make sense. So something like a Dupire local vol model. In the context of term structure modelling, you can also incorporate a volatility surface into the pricing of European and even exotic options (e.g. through a SABR or an LMM-SABR for exotics), which I suppose means by your criteria there are actually varying degree of \"\"arbitrage free-ness\"\" when it comes to picking a model. By that I mean there are varying degrees of what your model takes as \"\"given\"\". If it takes the market price of risk as given, it's an equilibrium model. If it takes the observed term structure as given, it's an arbitrage free model. If it takes the volatility structure as given, it's something else. Nawalkha, Beliaeva and Soto wrote a paper called \"\"A New Taxonomy of the Dynamic Term Structure Models\"\" in the Journal of Investment Management that basically coincides with what we're saying. So yes, it sounds right to me.\"",
"title": ""
},
{
"docid": "03012414b99a9299647d1deae6efedac",
"text": "Are you trying to figure out if a project would increase the market value of equity? I think your issue is that the Market value of Equity will not be updated with the NPV of 40M (Assuming it is truly +, not sure if it's true with 50M of debt). EV = Market Value of Equity + Debt - Cash and CE Ev - Debt + Cash and CE = Market equity value. So I think you would have to update the market value of Equity up with 40M. This would then lead to EV = Equity Value + future income stream discounted + debt - Cash and Cash Equivalents.",
"title": ""
},
{
"docid": "4cbc08ca586bb6481b02839029c3f7d0",
"text": "What you are looking here is the cost of capital, because that is what you are effectively giving up in order to invest in those loans. In a discounted cash-flow, it would be the *i* in the denominator (1+*i*). For instance, instead of purchasing those loans you could have lent your money at the risk-free rate (not 100% true, but typical assumption), and therefore you are taking a slight risk in those loans for a higher return. There are several ways to compute that number, the one most often used would be the rate if the bank were to lend that money. In this way, it would be the Fed Funds rate plus some additional risk premium.",
"title": ""
},
{
"docid": "4b27fe4787eb6e07ed71131bc7357766",
"text": "\"There are other good answers to the general point that the essence of what you're describing exists already, but I'd like to point out a separate flaw in your logic: Why add more complications so that \"\"should I call this principal or interest\"\" actually makes a difference? Why's the point (incentive) for this? The incentive is that using excess payments to credit payments due in the future rather than applying it to outstanding principal is more lucrative for the lender. Since it's more lucrative and there's no law against it most (all) lenders use it as the default setting.\"",
"title": ""
},
{
"docid": "134a2b54f8d2ddefd07691afbcb16bc6",
"text": "The short answer is that you would want to use the net inflow or net outflow, aka profit or loss. In my experience, you've got a couple different uses for IRR and that may be driving the confusion. Pretty much the same formula, but just coming at it from different angles. Thinking about a stock or mutual fund investment, you could project a scenario with an up-front investment (net outflow) in the first period and then positive returns (dividends, then final sale proceeds, each a net inflow) in subsequent periods. This is a model that more closely follows some of the logic you laid out. Thinking about a business project or investment, you tend to see more complicated and less smooth cashflows. For example, you may have a large up-front capital expenditure in the first period, then have net profit (revenue less ongoing maintenance expense), then another large capital outlay, and so on. In both cases you would want to base your analysis on the net inflow or net outflow in each period. It just depends on the complexity of the cashflows trend as to whether you see a straightforward example (initial payment, then ongoing net inflows), or a less straightforward example with both inflows and outflows. One other thing to note - you would only want to include those costs that are applicable to the project. So you would not want to include the cost of overhead that would exist even if you did not undertake the project.",
"title": ""
},
{
"docid": "47ca2ebd48c16a0fe2a36b483c2e944e",
"text": "\"fair enough, but I wasn't sure if you actually get it or not because your question seemed to revolved around cash and transaction value. You are really just said \"\"skewing\"\" is if you didn't add net debt the multiple wouldn't be a valid muliptle. If you understand it, why start out with this mental exercise of saying \"\"we shouldn't calculate multiples wrong, because then they would be wrong\"\"?\"",
"title": ""
},
{
"docid": "e7973c465d42af9e800720223b3f970c",
"text": "Stop with all the stupid big words. You sound really pretentious. Just learn your 3 statements from accounting coach and learn statement analysis from streetofwalls. If you're interested into valuation, streetofwalls is a good primer for DCF/public comps/M&A comps/scenario analysis (LBO), but if you want to literally build out the model, Joshua Rosenbaum's investment banking valuation book is great. Everyone in banking I know used it to learn valuation",
"title": ""
},
{
"docid": "96ac8d2c25a40d4602124bd1fd3a4dcc",
"text": "\"I'm assuming you're operating on the cash basis of accounting, based on your comment \"\"Cash, I think that's the only way for a sole propriator (sic)\"\" Consider: There are two distinct but similar-name concepts here: \"\"paid for\"\" (in relation to a expense) and \"\"paid off\"\" (in relation to a debt). These both occur in the case you describe: Under the cash basis of accounting, when you can deduct an expense is based on when you paid for the expense, not when you eventually pay off any resulting debt arising from paying for the expense. Admittedly, \"\"cash basis\"\" isn't a great name because things don't solely revolve around cash. Rather, it's when money has changed hands – whether in the form of cash, check, credit card, etc. Perhaps \"\"monetary transaction basis\"\" might have been a better name since it would capture the paid-for concept whether using cash or credit. Unfortunately, we're stuck with the terminology the industry established.\"",
"title": ""
}
] |
fiqa
|
41d6c57606c52bbf1d05487103e83b1c
|
Can I deduct the cost of software and/or computer that I need to do my job?
|
[
{
"docid": "a1041cb736e051ec679ade47727045f5",
"text": "\"Yes, this is a miscellaneous itemized deduction. https://www.irs.gov/publications/p529/ar02.html For this to impact your taxes, you have to be itemizing deductions (have total deductions greater than standard deduction), and the total of all miscellaneous deductions needs to exceed the \"\"2% floor\"\" described in the IRS link above.\"",
"title": ""
}
] |
[
{
"docid": "cc3d72cea66b4c20804b5df84eda7558",
"text": "I'm assuming you are in the US here. From a tax perspective you don't need to take any action to start a business and deduct expenses. If you have earned income coming from a source other than a W2 paying job, then you have a business. On your taxes, this means you file a schedule C (which is where you will deduct business expenses) and schedule SE (which computes how much FICA tax you will owe on your business income). When we talk about starting a business, we usually are talking about creating a corporation or LLC. No particular tax advantage to that in your case, but there could be liability advantages, if you are concerned about that. If you file losses consistently year after year, the IRS might try and classify your business as a hobby. That's what you should worry about. I suppose incorporating might reduce the probability of that, but it might not. Keep good records in case you need to argue with the IRS. If you do have to argue with them, they will want to ensure that you only used the laptop and internet for your business. That's a big if, but it's a potentially scary one. IRS Guidelines on hobby vs. business income Note: besides deducting expenses, another advantage of self-employment is opening a solo-401(k) or SEP or SIMPLE IRA. These potentially allow you to set aside a lot more money than the typical IRA and 401(k) arrangement. Thing is, you have to have a lot more earned income to really take advantage of them, but let's hope your app gets you there.",
"title": ""
},
{
"docid": "316710461de83750af605d1897addf25",
"text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses",
"title": ""
},
{
"docid": "f81ad22890ccc28b8d5635a494d7570b",
"text": "\"The government thought of that a long time ago, and has any loophole there plugged. Like if you set up a company to buy a car and then allow you to use it ... You can use the car for company business, like driving to a customer's office to make a sales call or delivery, and the cost of the car is then tax deductible. But the company must either prohibit personal use of the car, or keep a log of personal versus business use and the personal use becomes taxable income to you. So at best you'd get to deduct an expense here and then you'd have to add it back there for a net change in taxable income of zero. In general the IRS is very careful about personal use of business property and makes it tough to get away with a free ride. I'm sure there are people who lie about it and get away with it because they're never audited, but even if that causes you no ethical qualms, it's very risky. I don't doubt that there are people with very smart lawyers who have found loopholes in the rules. But it's not as simple as, \"\"I call myself a business and now all my personal expenses become tax deductible business expenses.\"\" If you could do that, everybody would do it and no one would pay taxes. Which might be a good thing, but the IRS doesn't see it that way.\"",
"title": ""
},
{
"docid": "9379f5ad0e097a21cb007559a3207893",
"text": "It looks like you can. Take a look at these articles: http://www.googobits.com/articles/1747-taking-an-itemized-deduction-for-job-expenses.html http://www.bankrate.com/finance/money-guides/business-expenses-that-benefit-you.aspx http://www.hrblock.com/taxes/tax_tips/tax_planning/employment.html But of course, go to the source: http://www.irs.gov/publications/p529/ar02.html#en_US_publink100026912 From publication 529: You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). You can claim the amount of expenses that is more than 2% of your adjusted gross income. You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 36. I hope that helps. Happy deducting!",
"title": ""
},
{
"docid": "109c4d456f41fd860526feb85481d9ae",
"text": "\"Can she claim deductions for her driving to and from work? Considering most people use their cars mostly to commute to/from work, there must be limits to what you can consider \"\"claimable\"\" and what you can't, otherwise everyone would claim back 80% of their mileage. No, she can't. But if she's driving from one work site to another, that's deductible whether or not either of the work sites is her home office. Can she claim deductions for her home office? There's a specific set of IRS tests you have to meet. If she meets them, she can. If you're self-employed, reasonably need an office, and have a place in your house dedicated to that purpose, you will likely meet all the tests. Can I claim deductions for my home office, even though I have an official work place that is not in my home? It's very hard to do so. The use of your home office has to benefit your employer, not just you. Can we claim deductions for our home internet service? If the business or home office uses them, they should be a deductible home office expense in some percentage. Usually for generic utilities that benefit the whole house, you deduct at the same percentage as the home office is of the entire house. But you can use other fractions if more appropriate. For example, if you have lots of computers in the home office, you can deduct more of the electricity if you can justify the ratio you use. Run through the rules at the IRS web page.\"",
"title": ""
},
{
"docid": "052cdbc0b5131c019a97ef5aaafb1df6",
"text": "You need to clarify with Bob what your agreement is. If you and Bob are working together on these jobs as partners, you should get a written partnership agreement done by a lawyer who works with software industry entity formation. You can legally be considered a partnership if you are operating a business together, even if there is nothing in writing. The partnership will have its own tax return, and you each will be allocated 50% of the profits/losses (if that's what you agree to). This amount will be reported on your own individual 1040 as self-employment income. Since you have now lost all the expense deductions you would have taken on your Schedule C, and any home office deduction, it's a good idea to put language in the partnership agreement stating that the partnership will reimburse partners for their out-of-pocket expenses. If Bob is just hiring you as a contractor, you give him your SSN, and he issues you a 1099, like any other client. This should be a situation where you invoice him for the amount you are charging. Same thing with Joe - figure out if you're hiring him as an independent contractor, or if you have a partnership. Either way, you will owe income and self-employment tax on your profits. In the case of a partnership, the amount will be on the K-1 from the partnership return. For an independent contractor who's operating as a sole proprietor, you report the income you invoiced for and received, and deduct your expenses, including independent contractors that you hired, on your Schedule C. Talk to your tax guy about quarterly estimated payments. If you don't have a tax guy, go get one. Find somebody people in your city working in your industry recommend. A good tax person will save you more money than they cost. IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "39f3a8221f16c84c72aefff9e8144049",
"text": "To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes:",
"title": ""
},
{
"docid": "7348a5a39e5d09a5d84942986787e34e",
"text": "\"Disclaimer: This should go without saying, but this answer is definitely an opinion. (I'm pretty sure my current accountant would agree with this answer, and I'm also pretty sure that one of my past accountants would disagree.) When I started my own small business over 10 years ago I asked this very same question for pretty much every purchase I made that would be used by both the business and me personally. I was young(er) and naive then and I just assumed everything was deductible until my accountant could prove otherwise. At some point you need to come up with some rules of thumb to help make sense of it, or else you'll drive yourself and your accountant bonkers. Here is one of the rules I like to use in this scenario: If you never would have made the purchase for personal use, and if you must purchase it for business use, and if using it for personal use does not increase the expense to the business, it can be fully deducted by the business even if you sometimes use it personally too. Here are some example implementations of this rule: Note about partial expenses: I didn't mention partial deductions above because I don't feel it applies when the criteria of my \"\"rule of thumb\"\" is met. Note that the IRS states: Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. At first read that makes it sound like some of my examples above would need to be split into partial calulations, however, I think the key distinction is that you would never have made the purchase for personal use, and that the cost to the business does not increase because of allowing personal use. Partial deductions come into play when you have a shared car, or office, or something where the business cost is increased due to shared use. In general, I try to avoid anything that would be a partial expense, though I do allow my business to reimburse me for mileage when I lend it my personal car for business use.\"",
"title": ""
},
{
"docid": "fe6de11870b7339c3adcb7bc5630624f",
"text": "Yes, if they meet the ATO's criteria. Books, periodicals and digital information If the item cost less than $300 you can claim an immediate deduction where it satisfies all of the following requirements: http://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Other-deductions/Books,-periodicals-and-digital-information/ Alternatively They may be a self-education expense http://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Self-education-expenses/ A Further Alternative They could fall into the tool, equipment or other asset category if they are for a professional library (this can include a home office). http://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Tools,-equipment-and-other-assets/ I understand this is an old question although given the dead link in the above answer and the new resources this answer might prove helpful for others coming across this question.",
"title": ""
},
{
"docid": "072e3bda754100e105095b01bc561857",
"text": "Also, if accounting suddenlly decides to hire a bunch of new employees why should the cost for the computers come out of IT's budget? As long as IT's budget is subserviant to the whims of other departments you can't really call it a budget at all. Rather, it is just a pool of money that anyone can dip in to.",
"title": ""
},
{
"docid": "3ecb3c403e3a3186ddfa2c51db2b0c14",
"text": "Yes. The S-Corp can deduct up to the amount it actually incurred in expenses. If your actual expenses to build the carport were $1000, then the $1000 would be deductible, and your business should be able to show $1000 in receipts or inventory changes. Note you cannot deduct beyond your actual expenses even if you would normally charge more. For example, suppose you invoiced the non-profit $2000 for the carport, and once the bill was paid you turned around and donated the $2000 back to the non-profit. In that case you would be deducting $1000 for your cost + $2000 donation for a total of $3000. But, you also would have $2000 in income so in the end you would end up with a $1000 loss which is exactly what your expenses were to begin with. It would probably be a good idea to be able to explain why you did this for free. If somehow you personally benefit from it then it could possibly be considered income to you, similar to if you bought a TV for your home with company funds. It would probably be cleaner from an accounting perspective if you followed through as described above- invoice the non-profit and then donate the payment back to them. Though not necessary, it could lesson any doubt about your motives.",
"title": ""
},
{
"docid": "af94bde04c5e56fce68e17efd75ae0cc",
"text": "The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($1000*12 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000*.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses. Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it.",
"title": ""
},
{
"docid": "255ced4517b0b7d6b04e2db97cfaec4c",
"text": "The answer on the Canadian Government's website is pretty clear: Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing. However, that is most likely related to a personal vehicle. There is a deduction related to Public Transportation: You can claim cost of monthly public transit passes or passes of longer duration such as an annual pass for travel within Canada on public transit for 2016. The second sleeping residence is hard to justify as the individual is choosing to work in this town and this individual is choosing to spent the night there - it is not currently a work requirement. As always, please consult a certified tax professional in your country for any final determinations on personal (and corporate) tax laws and filings.",
"title": ""
},
{
"docid": "f35cdefe4d37dced6edcef4c60a2dbc2",
"text": "\"In the US service animals are treated like durable medical equipment from a tax POV, and some expenses can be deducted. Likewise, expenses associated with working animals are business or hobby expenses than can be deducted to a certain extent. But pets, no. Legally they are \"\"chattels\"\" -- property that can move. Generally speaking, you can't deduct the cost of maintaining your belongings.\"",
"title": ""
},
{
"docid": "856563741371412a4b5259527b8f3a72",
"text": "No, you cannot write off time, period. You should price the time spent into your product. I, occasionally, work on side projects of my own and forgo the possibility of earning direct income for that time. Income not earned is income not taxed, so there's nothing to deduct.",
"title": ""
}
] |
fiqa
|
29965130815b19dcdd1c82d532ddcb45
|
Is it normal for brokers to ask whether I am a beginner?
|
[
{
"docid": "b235004e22e3e1e2bc35f1b4309da30e",
"text": "\"Brokers need to assess your level of competency to ensure that they don't allow you to \"\"bite off more than you can chew\"\" and find yourself in a bad situation. Some brokers ask you to rate your skills, others ask you how long you've been trading, it always varies based on broker. I use IB and they gave me a questionairre about a wide range of instruments, my skill level, time spent trading, trades per year, etc. Many brokers will use your self-reported experience to choose what types of instruments you can trade. Some will only allow you to start with stocks and restrict access to forex, options, futures, etc. until you ask for readiness and, for some brokers, even pass a test of knowledge. Options are very commonly restricted so that you can only go long on an option when you own the underlying stock when you are a \"\"newbie\"\" and scale out from there. Many brokers adopt a four-tiered approach for options where only the most skilled traders can write naked options, as seen here. It's important to note that all of this information is self-reported and you are not legally bound to answer honestly in any way. If, for example, you are well aware of the risks of writing naked options and want to try it despite never trading one before, there is nothing stopping you from saying you've traded options for 10 years and be given the privilege by your broker. Of course, they're just looking out for your best interest, but you are by no means forced into the scheme if you do not wish to be.\"",
"title": ""
},
{
"docid": "8d993890289505b5f6a9d42cd48978ea",
"text": "\"In Canada, for example, they are expected or required to find out. They call it, The “Know Your Client” rule, part of which is knowing your \"\"Investment knowledge and experience\"\". They say it is, \"\"to ensure their advice is suitable for you\"\". I have always been given that kind of form to fill in, when opening an account.\"",
"title": ""
},
{
"docid": "8f5541e4cd88d0abca3d687a5388e3db",
"text": "\"Yes, this is common and in some cases may be required. They may use it for marketing at some level, but they also use it for risk management in deciding, for example, how much margin to offer and whether to approve access to \"\"riskier\"\" products like stock options.\"",
"title": ""
},
{
"docid": "9241f9faa0b1a9ff0301a2068455770d",
"text": "In many places there are legal requirements to do so, essentially made to prevent brokers from selling high-risk products as if they were deposits with guaranteed safety of your funds. There also may be prohibitions on offering high-risk/high-return products to beginner customers, e.g. requiring accredited investor status claiming that yes, you really know how this works and are informed of the involved risks or you're not allowed to invest in that product. Making untrue claims of being not a beginner may limit your options if your broker does cheat you in some manner, as it gives them a solid argument that you confirmed that you understand how their pump-and-dump scheme works and are yourself responsible for losing your money to them.",
"title": ""
}
] |
[
{
"docid": "86f6040b3e8eaec64c6e7b504c54c483",
"text": "\"I think it's a silly statement. If you are prepared from the start that you might lose it then you shouldn't invest. You invest to earn not to lose. Most often losses are a result of fear. Remember you only lose when you sell lower than you bought for. So if you have the patience you will probably regain. I ask my clients many times how much do they want to earn and they all say \"\"as much as possible\"\". Last time I checked, that's not an objective and therefore a strategy can't be built for that. If there is a strategy then exiting a stock is easy, without a strategy you never know when to exit and then you are exposed to bottomless losses. I've successfully traded for many years with large amounts of money. I made money in the FC and in the bubble, both times it wasn't because I was prepared to lose but because I had an entry and exit strategy. If you have both the idea of investing what u are prepared to lose has little value.\"",
"title": ""
},
{
"docid": "bb3d237485a72830b14f1ec0db9d1a13",
"text": "No, if your brokers find out about this, even though it is unlikely, you will be identified as a pattern day trader. The regulations do not specify a per broker limit. Also, it's like a credit history. Brokers are loosely obligated to inform other brokers that a client is a pattern day trader when transferring accounts.",
"title": ""
},
{
"docid": "93ef981989a4ba46217a014dc7c11a8b",
"text": "\"I'm not downvoting you because I can relate, in a way, to your post and I think this is a good topic to have on this site. We had a question a couple weeks ago where someone, like you, took some friend's money to trade with but didn't know how to give the money back or calculate the net-return. It is not smart to take and invest other people's money when you have zero industry experience and when you do not understand the legal requirements of handling someone else's money. Within the first 12 months of my brokerage account I had returned something like 150%, I doubled my money plus a bit. The next year was something like -20%; if I remember correctly the next year was worse, then up again for year four. Year 1 I thought I was a genius and had figured this whole thing out, year 2 put me in my place and year 3 kicked me while I was down. You have 6 months of pretty solid returns, good for you. I don't think that means it's time to set up shop. Really, I think you need to sit down and think long and hard about the implications, legal and otherwise, of holding other people's money. Running a fund is significantly different than trading your own money. Retail investors don't, typically, have a good memory. Great, you made me 17% last year, and 25% the year before but right now I'm down 10%, so give me my money back because I would have been better off in an savings account this year. This is why index funds are in vogue right now. Lots of people have had money in active funds that have trailed or matched the \"\"safe and passive\"\" index funds, so they're angry. Retail folks get jittery the instant they lose money, no matter how much. You need to be ready to contend with \"\"What have you done for me lately?\"\" the instant something turns negative, no matter how positive your returns have been. At your stage in the game you should get a job and continue putting your own money in to your own system and be ready to lose some of it. I doubt there is anyone outside your immediate family who will hand a random 18 year-old kid any significant amount of money to trade their system based on 6 months of success; certainly not more than you have in there currently.\"",
"title": ""
},
{
"docid": "2f38eecf4850782e35550e424c56d93d",
"text": "\"Kid, you need to start thinking in thresholds. There are several monetary thresholds that separate your class from a more well funded class. 1) You cannot use margin with less than $2000 dollars Brokers require that you have at least $2000 before they will lend to you 2) In 2010, Congress banned under 21 year olds from getting access to credit. UNLESS they get cosigned. This means that even if you have $2000, no broker will give you margin unless you have a (good) credit history already. There was a good reason for this, but its based on the assumption that everyone is stupid, not the assumption that some people are objective thinkers. 3) The brokers that will open an account for you have high commissions. The commissions are so high that it will destroy any capital gains you may make with your $1000. For the most part. 4) The pattern day trader rule. You cannot employ sophisticated risk management while being subject to the pattern day trader rule. It basically limits you from trading 3 times a day (its more complicated than that read it yourself) if you have less than $25,000 in one account. 5) Non-trade or stock related investments: Buy municipal or treasury bonds. They will give you more than a savings account would, and municipals are tax free. This isn't exactly what I would call liquid though - ie. if you wanted to access your money to invest in something else on a whim. 6) What are you studying? If its anything technical then you might get a good idea that you could risk your money on to create value. But I would stick to high growth stocks before blowing your $1000 on an idea. Thats not exactly what I would call \"\"access to capital\"\". 7) Arbitrage. Lets say you know a friend that buys the trendy collectors shoes at discount and sells them for a profit. He might do this with one $200 pair of tennis shoes, and then use the $60 profit different to go buy video games for himself. If he wanted to scale up, he couldn't because he never has more than $200 to play with. In comparison, you could do 5 pairs ($200 x 5) and immediately have a larger operation than him, making a larger profit ($60 x 5 = $300, now you have $1300 and could do it again with 6 pairs to make an even great er profit) not because you are better or worked at it, but solely because you have more capital to start with. Keep an eye out for arbitrage opportunities, usually there is a good reason they exist if you notice it: the market is too small and illiquid to scale up with, or the entire market will be saturated the next day. (Efficient Market Theory, learn about it) 8) Take everything I just taught you, and make a \"\"small investor newsletter\"\" website with subscribers. Online sites have low overhead costs.\"",
"title": ""
},
{
"docid": "98931b8ab84f4d667c8119b8c747c2c6",
"text": "\"It is indeed, mostly because the various factors you need to take into account will change depending on the company. An Australian mining co funding a new settlement or harbor has nothing in common with a small European packaging company looking to acquire a competitor, except they both need to raise money. As far as I know, to become \"\"proficient\"\" in that field, the only way is to go through heaps of case studies, which won't be found easily outside of the financial world (sell side research, conversation with experienced buy side analysts/PMs/traders or sell side cap markets pros). It is niche knowledge with a narrow focus and a high potential for value added, hence, not really widely shared. The good news though is that it isn't really that complex, it just takes (lots of) work and being in the right place (internship or entry level position in a market or M&A oriented bank).\"",
"title": ""
},
{
"docid": "8cce6cba937675492b25a92c5906c67f",
"text": "\"(I answered a similar question before.) Essentially, you shouldn't trust a site you find on the Internet merely because it looks professional and real. Before signing up with any new service provider you found online, you should verify the authenticity of both the organization itself and their web site address. Even if the name displayed by a web site represents a legitimate brokerage firm, any site you happen to come across on the Internet could be an elaborate spoof of a real company, intended to capture your personal details (or worse). First, to check if a brokerage firm is in fact registered to trade securities – in the United States – you can consult FINRA's BrokerCheck online service. This might be the first of many checks you should undertake ... after you convince yourself that FINRA is legitimate. A meta-problem ;-) Then, if you want to know if the web site address is authentic, one way is to contact that broker offline using the contact information found from a trusted source, such as the FINRA BrokerCheck details. Unfortunately, those details do not currently appear to contain the broker's web site URL. (Else, that could be useful.) Another thing to look at is the site's login or sign-up page, for a valid SSL certificate that is both issued to the correct legal name of the brokerage firm as well as has been signed by a well-known certificate authority (e.g. VeriSign). For a financial services firm of any kind, you should look for and expect to see an Extended Validation Certificate. Any other kind of certificate might only assert that the certificate was issued to the domain-name owner, and not necessarily to an organization with the registered legal name. (Yes, anybody can register a domain with a similar name and then acquire a basic SSL certificate for that domain.) FWIW, Scottrade and ShareBuilder are both legitimate brokers (I was aware already of each, but I also just checked in the FINRA tool), and the URLs currently linked to by the question are legitimate web site addresses for each. Also, you can see their EV certificates in action on secured pages here and here. As to whether your investments with those brokers would be \"\"safe\"\" in the event of the broker failing (e.g. goes bankrupt), you'll want to know that they are members of the Securities Investor Protection Corporation (Wikipedia). (Of course, this kind of protection doesn't protect you if your investments simply go down in value.) But do your own due diligence – always.\"",
"title": ""
},
{
"docid": "f617125f90004d1be781ecd016139541",
"text": "There is no way to find out what future will be if you have only quote from past. In other words, nobody is able to trade history successfully and nobody will be able, ever. Quote's movement is not random. Quote is not price. Because brokerage account is not actual money. Any results in past do not guarantee you anything. Brokerage accounts should only have portions of money which you are ready to loose completely. Example: Investment firms recommended buying falling Enron stocks, even when it collapsed 3 times, then - bankrupt, suddenly. What a surprise!",
"title": ""
},
{
"docid": "39cd5f6296d8871d6cd2d2fbb1e9cf07",
"text": "I strongly suggest personal referral. Ask all of your friends/family/neighbors/co-workers/dog-sitter what they think of their brokers until you find someone who loves his broker. As for transferring assets, I've found it to be quite easy. It's in the new broker's best interest to get those assets, so he should be more than willing to help.",
"title": ""
},
{
"docid": "87df5d98561a40f372b987cec46d0d11",
"text": "> we make a trade-off between time to execute and market impact. Is your time frame any longer than intraday? I imagine you wouldn't want to carry that risk overnight if you're a broker or selling a route.. > we will join the bid for some fraction of our size, and also hit the offer when it looks like the price might be moving away from us So, say for instance you join a bid a few levels down, you aren't really get filled, you start hitting the offer and eventually you realize you're competing with someone for the shares offered, so you take out the price level and bid on all the exchanges so that you're first on the bid at that level, then repeat until someone that can match your appetite starts to fill you on the bid? > In some certain situations we will even sweep the book several levels deep to avoid tipping off market makers and having them adjust in anticipation of the rest of our order. Right, so say you need 100k shares, there are 10k offered at 9.98, 25k offered at 9.99, and 65k at 10.00, you might just enter an intermarket sweep order of 100k @ 10 limit and hope that you can get most of the shares off before everyone can cancel? I imagine there has to be a lot of bidding it up to attract sellers and then letting people take out your bids all day... I have a few other questions I would appreciate your insight on. Just trying to ascertain how orders are filled when, as you put it, time is more important than market impact to the client - when they need to take a large amount of liquidity as quickly as possible and as orderly as possible. Let me know if you'd rather I pm you about this or the additional questions, I work in the industry as well so I know privacy is paramount.",
"title": ""
},
{
"docid": "7cefa73cfa45f438cf139281ac832089",
"text": "No. Brokers and HFT are two different entities, mostly. No HFT shops have prior information about a client order. PM me if you want to discuss more in detail. Getting beyond the scope of this post.",
"title": ""
},
{
"docid": "77d8568e2a1e3363a5d02566be6d3f14",
"text": "\"Until you get some financial education, you will be vulnerable to people wanting your money. Once you are educated, you will be able to live a tidy life off this-- which is exactly why this amount was awarded to you, rather than some other amount. They gave you enough money. This is not a lottery win. I mean \"\"financial counselors\"\" who will want to help you with strategies to invest your money. Every one will promise your money will grow. The latter case describes every full-service broker, e.g. what will happen if you walk into EdwardJones. This industry has a long tradition of charmingly selling investments which significantly underperform the market, and making their money by kickbacks (sales commissions) from those investments (which is why they significantly underperform.) They also offer products which are unnecessarily complex meant to confuse customers and hide fees. One mark of trouble is \"\"early exit\"\" fees, which they need to recoup the sales commission they already paid out. Unfortunately, one of those people is you. You are treating this like a windfall, falling into old, often-repeated cliché of \"\"lottery-win thinking\"\". \"\"Gosh, there's so much money there, what could go wrong?\"\" This always ends in disaster and destitution, on top of your other woes. It's not a windfall. They gave you just enough money to live on - barely. Because these lawyers and judges do this all day every day, and they know exactly how much capital will replace a lifelong salary, and if anything you got cheated a bit. Read on. You don't want to feel like greedy Scrooge, hoarding every penny. I get that. But generous spending won't fix that. What will is financial education, and once you have real understanding and certainty about your financial situation, you will be able to both provide for yourself and be giving in a sensible manner. This stuff isn't taught in school. If it was, there'd be a lot more millionaires, because wealth isn't about luck, it's about intelligent management of money. Good advisers do exist. They're hard to find. Good advisors work only one way: for a flat rate or hourly fee. This is called a \"\"Fee-only advisor\"\". S/he never takes commissions. Beware of brokers who normally work on commission but will happily take an upfront fee. Even if they promise to hand you their commission check, they're still recommending you into the same sub-par investments because that's their training! I get the world of finance is extremely confusing and it's hard to know where to start. Just make one leap of faith with me: You can learn this. One place it's not confusing: University endowments. They get windfalls just like you, and they need to manage it to support them for a very long time, just like you. Endowments are very closely watched by the smartest people in finance -- no lottery fever here. It's agreed by all that there is one best way to invest an endowment. And it's mandatory by law. An endowment is a chunk of money (say, $1.2 million) that must fund a purpose (say, a math professorship or \"\"chair\"\") in perpetuity. You're not planning to live quite that long, but when you're in your 20's, the investment strategy is the same. The endowment is designed to generate income of some amount, on average, over the long term. You can draw from the endowment even in \"\"down years\"\". The rule of thumb is 4-6% is a sustainable rate that won't overtax the endowment (usually, but you have to keep an eye on it). On $1.2M, that's $48,000 to $72,000 per year. Not half bad. See, I told you it could work. Read Jane Austen? Mister Darcy, referred to as a gentleman of 10,000 pounds -- meaning his assets were many times that, but they yield income of £10,000 a year. Same idea. Keep in mind that you need to pay taxes. But if you plan your investments so you're holding them more than a year, you're in the much lower 0-10-15% capital gains tax bracket. So, here's where I'd like you to go. I would say more, but this will give you quite an education by itself. Say you gave all your money to me. And said \"\"Your nonprofit needs an executive director. Fund it. In perpetuity.\"\" I'd say \"\"Thank you\"\", \"\"you're right\"\", and I'd create an endowment and invest it about like this. That is fairly close to the standard mix you'll find in most endowments, because that is what's considered \"\"prudent\"\" under endowment law (UPMIFA). I'd carry all that in a Vanguard or Fidelity account and follow Bogle's advice on limiting fees. That said, dollar-cost-averaging is not a suicide pact, and bonds are ugly right now (for reason Suze Orman describes) and real estate seems really bubbly right now... so I'd back out of those for now. I'd aim to draw about $60k/year out of it or 5%, and on average, in the very long term, the capital should grow. I would adjust it downward somewhat if the next few years are a hard recession, to avoid taking too much out of the capital... and resist the urge to take more out in boom years, because that is your hedge against the next recession. Over 7% is not prudent per the law (absent very reasonable reasons). UPMIFA doesn't apply to you, but I'd act as if it did. A very reasonable reason to take more than 7% would be to shift investment into a house for living in. I would aim for a duplex/triplex to also have income from the property, if the numbers made sense, which they often don't in California, but that's another question. At your financial level -- never, never, never give cash to a charity. You will get marked as a \"\"soft target\"\" and every commercial fundraiser on earth will stalk you for the rest of your life. At your level, you open a Donor Advised Fund, and let the Fund do your giving for you. Once you've funded it (which is tax deductible) you later tell them which charities to fund when. They screen out fake charities and protect your identity. I discuss DAFs at length here. Now when \"\"charities\"\" harass you for an immediate handout, just tell them that's not how you support charities.\"",
"title": ""
},
{
"docid": "0d954f3c92e53a6c2140eb8010c50c40",
"text": "\"I have been in a very similar place like that before (as an intern) and got the hell out quickly. Let me try to paint a picture. On the 12th floor of a random NYC midtown building there will be a large office floor with long desks in several rows. Around the outside against the windows will be maybe some empty conference rooms, random senior people you won't be allowed to talk to, and a poor, miserable compliance guy stuck in a backoffice somewhere. Each desk will have a phone and a call sheet. There wont be many computers anywhere - maybe one Bloomberg machine in the back. Every single person in there is on the phone. In fact, that will be your job. Starting at 7:45 sharp, you will be at your desk. At 8 oclock, you will start dialing the call sheet put on your desk. If it is a bunch of residences, you will get angry house wives because their husbands are at work (dont \"\"pitch the bitch\"\"). Next call, you will get someone that passed away 2 years ago - mark your sheet \"\"dead\"\" and cross out as you are dialing the next number. If you manage to get someone that answers their own phone at work and listens to a pitch, you will now get the opportunity to give a grandiose pitch on why a mid market, dividend paying stock is fantastic and should be bought now. \"\"Now\"\" as in you have to open a brokerage account on the first call for no less than a $5k trade. You will pitch them on why they dont need to ask their wife, why you will bring them great ideas. Ask them what is their net worth - have they ever hired a broker over the phone (qualify them) or get hung up on. Anything short of them threatening to call the SEC and cursing you before hanging up means you will be sure to call them again (a prospect actually picking up the phone is about a 1 in 20 dial event) People just slamming the phones on you? - Call them back for fun because you \"\"got disconnected\"\". If you ever manage to get a client, you will be charging them enormous percentages and fees to do simple trades. But dont worry, you probably wont get a client in the first 2 months, and even if you manage to get clients it will be maybe one or two a month. Think about the sheer volume of calls you have to make - 300 - 400 calls a day is probably a normal pace. You will meet the most insane people. People will go down for lunch or coffee and never return to the office. Most of the people there you wonder how they ever passed a series 7. There are people that fail the 7 3 times and quit. There will be a guy that opens 10 accounts a month and actually will be talking with two phones up to his ears at once. This is the definition of a high pressure sales job.\"",
"title": ""
},
{
"docid": "7618f539a831ff550e87f916c911b7e6",
"text": "\"My answer isn't a full one, but that's because I think the answer depends on, at minimum, the country your broker is in, the type of order you place (limit, market, algo, etc.,) and the size of your order. For example, I can tell from watching live rates on regular lot limit orders I place with my UK-based broker that they hold limit orders internally until they see a crossing rate on the exchange my requested stock is trading on, then they submit a limit order to that exchange. I only get filled from that one exchange and this happens noticeably after I see my limit price print, and my fills are always better than my limit price. Whereas with my US-based broker, I can see my regular lotsize limit order in the order book (depth of book data) prior to any fills. I will routinely be notified of a fill before I see the limit price print. And my fills come from any number of US exchanges (NYSE, ARCA, BATS, etc.) even for the same stock. I should point out that the \"\"NBBO\"\" rule in the US, under SEC regulation NMS, probably causes more complications in handling of market and limit orders than you're likely to find in most countries.\"",
"title": ""
},
{
"docid": "8253603feece3672121050234e362da9",
"text": "I've noticed that most of the problems seem to occur when they assume I am a new user (the random ones you get for hitting help help) and asking a way more basic question than what I was actually asking.",
"title": ""
},
{
"docid": "55ffbe3c4ed5d9a8d48556077f5faf7a",
"text": "Lol i work at a major prop shop and it is far from retail trading. Existing relations are important and if used well will result in an increased pnl. Also, this is why i was referring to risk adjusted pnl to take into account different firms strategies. Honestly your company might have a different way of doing things but at every prop shop and bank ive worked for my pnl was their primary focus. Edit: i also wouldnt take such a condescending tone if i were you. You are far from the only person on reddit working in the industry.",
"title": ""
}
] |
fiqa
|
3c5bbc2dfdc5dcfa5aa8ca0fa34462f0
|
What is the correct answer for percent change when the start amount is zero dollars $0?
|
[
{
"docid": "d17d924c5b82e1f761143e2f7cd919da",
"text": "\"There is no numerical convention in finance that I have ever seen. If you look at statements or reports that measure growth when the starting value is negative or zero, you typically see \"\"n/a\"\" or \"\"-\"\" or \"\"*\"\" as the result. Any numerical result would be meaningless. Suppose you used 100% and another company had a legitimate 150% gain - where would the 100% change rank? What do my manager and investors expect to see? As a financial analyst - I would not want to see 100%. I would instead rather see something that indicates that the % change is meaningless. As an example, here's the WSJ documentation on change in Net Income: Net Income percent change is the change from the same period from a year ago. Percent change is not provided if either the latest period or the year-ago period contains a net loss. Thinking about it in another context: Yesterday you and your friend had no apples. Today you have 1 and your friend has 20. What percentage increase did you both have? Did you both have a 100% increase? How can you indicate that your friend had a larger \"\"increase\"\"? In that case (and in finance), the context needs to turn from a percentage increase to an absolute increase. A percentage increase is that scenario is meaningless.\"",
"title": ""
},
{
"docid": "590aa6996f150a72de01c54b41dfb58b",
"text": "A value of zero or a negative value makes the percent change meaningless. Saying 100% when going from 0 to some other value is simply wrong. I have seen a similar situation several times when looking at a public company with a loss last quarter. On Google Finance or some other service, the PE ratio will be blank, N/A, or something like that. If the company does not currently have earnings, then the PE ratio is meaningless. Likewise, if the company previously did not have earnings, then the percent change of the earnings is meaningless. Also consider the example where the previous value was negative. If the previous value was negative 1 and the current value is positive 99, then this happens: A negative change? But the value went up! Obviously that value does not make sense and should not be shown.",
"title": ""
},
{
"docid": "1bebf9136552042b7b175f8f18b7ff50",
"text": "\"I'd personally display \"\"n/a\"\" The only other answer that makes sense to me other is \"\"infinity\"\" (phone keyboard doesn't allow me to input the symbol). This would at least allow you to show direction by using positive and negative infinity and mathematical as the the initial value approaches zero the percentage change approaches infinity which is the closet you can get to a meaningful value\"",
"title": ""
},
{
"docid": "e1ce8250eb72a7472e0fcb696d1dc384",
"text": "\"In general, when dealing with quantities like net income that are not restricted to being positive, \"\"percentage change\"\" is a problematic measure. Even with small positive values it can be difficult to interpret. For example, compare these two companies: Company A: Company B: At a glance, I think most people would come away with the impression that both companies did badly in Y2, but A made a much stronger recovery. The difference between 99.7 and 99.9 looks unimportant compared to the difference between 100,000 and 40,000. But if we translate those to dollars: Company A: Y1 $100m, Y2 $0.1m, Y3 $100.1m Company B: Y1 $100m, Y2 $0.3m, Y3 $120.3m Company B has grown by a net of 20% over two years; Company A by only 1%. If you're lucky enough to know that income will always be positive after Y1 and won't drop too close to zero, then this doesn't matter very much and you can just look at year-on-year growth, leaving Y1 as undefined. If you don't have that guarantee, then you may do better to look for a different and more stable metric, the other answers are correct: Y1 growth should be left blank. If you don't have that guarantee, then it might be time to look for a more robust measure, e.g. change in net income as a percentage of turnover or of company value.\"",
"title": ""
},
{
"docid": "dff0902175f068b2fc59f801e6972199",
"text": "As has been said before, going from nothing to something is an infinite percent increase! It is not 100%. Maybe you had a dollar and now have $101 that is a 10000% increase! Quite remarkable. I often work with symmetrized percent changes like: spc = 100 * (y2-y1)/(0.5 * (y1+y2)) Where I compute the percent with respect to the average. First this is more stable as often measurements can have noise, the average is more reliable. Second advantage is also that this is symmetric. So going from 95 to 105 is a 10 % increase while going from 105 to 95 a 10% decrease. Of course you need to explain what you show.",
"title": ""
},
{
"docid": "e898bbf75859f38482dd86f748db8f8c",
"text": "\"Anyone who has any business looking at growth numbers will know thay are meaningless in the first year, So all they need to know is that it's the first year. It's no different than the Billboard music charts' treatment of the \"\"last week's chart ranking\"\" and \"\"movement up/down\"\" columns. It will help with visual layout if the figure used is about the same size as a percentage number. \"\"New\"\" fits nicely.\"",
"title": ""
},
{
"docid": "ee38726681a5935fb3c798007c9782f8",
"text": "In computing, you'd generally return naa%, for 'not a number'. Could you not put '-%' to show there is no value at this point? Surely the people seeing this aren't idiots and understand the charge on 0 is 0?",
"title": ""
},
{
"docid": "9ab34fa1e97c390c4c13e64aa2032e11",
"text": "What is the probability of a real occasion (meaning not just an example) being exactly zero? Even if you have 0.1 you can still do the math. Also, it is kind of depending on the occasion. For example, you want to calculate the ROI of an investment for which you had zero capital and you made that investment with leverage, meaning you got a loan. In order to get that loan you should have provided a collateral, so in this case as a starting sum you use the collateral. In another example, say EAT it's difficult to have exactly zero. So, in most cases you won't have to deal with zero values, only positives and negatives.",
"title": ""
},
{
"docid": "92ee9cadaa14d9d89f6ca7d5aaa4a99e",
"text": "\"There are some assumptions which can be made in terms of the flexibility you have - I will start with the least flexible assumption and then move to more flexible assumptions. If you must put down a number 1, your go-to for this(\"\"Change the start period to 1\"\"), is pretty good, and it's used frequently for other divide-by-zero calculations like kda in a video game. The problem I have with '1' is that it doesn't allow you to handle various scales. Some problems are dealt with in thousands, some in fractions, and some in hundreds of millions. Therefore, you should change the start period to the smallest significantly measurable number you could reasonably have. Here, that would take your example 0 and 896 and give you an increase of 89,500%. It's not a great result, but it's the best you can hope for if you have to put down a number, and it allows you to keep some of the \"\"meaning in the change.\"\" If you absolutely must put something This is the assumption that most answers have taken - you can put down a symbol, a number with a notation, empty space, etc, but there is going to be a label somewhere called 'Growth' that will exist. I generally agree with what I've seen, particularly the answers from Benjamin Cuninghma and Nath. For the sake of preservation - those answers can be summarized as putting 'N/A' or '-', possibly with a footnote and asterisk. If you can avoid the measurement entirely The root of your question is \"\"What do my manager and investors expect to see?\"\" I think it's valuable to dig even further to \"\"What do my manager and investors really want to know?\"\". They want to know the state of their investment. Growth is often a good measurement of that state, but in cases where you are starting from zero or negative, it just doesn't tell you the right information. In these situations, you should avoid % growth, and instead talk in absolute terms which mention the time frame or starting state. For example:\"",
"title": ""
}
] |
[
{
"docid": "b4c8cbc3034a103d9df73fef25e0fa3a",
"text": "\"When using Time Value of Money equations, you need to know when the flow starts. A mortgage for example, has a first payment at the end of the first time period, usually 1 month. For savings, one can start the account with a deposit of course, or start by saying \"\"I will deposit $XXX at the end of each month. The answer really depends on the exact details of the situation. In your example, I'm inclined to suggest first flow is 1 year out.\"",
"title": ""
},
{
"docid": "175eb77b00771165926f3d2ac67c4b6d",
"text": "I think is an excellent idea. Use free money or almost free to do a lump sump payment. My recommendation is to have a reminder to pay credit card before, almost finishing, the 0% APR period.",
"title": ""
},
{
"docid": "589d5275ed384c541d389fc3a4b612d8",
"text": "I am sure everyone is different, but it has helped me a great deal. I have had several card balances go up and the interest on those per month was more than $200 in just interest combined. I transferred the balances over to 0% for 15 months – with a fee, so the upfront cost was about $300. However, over the next 15 months at 0% I'm saving over $200 each month. Now I have the money to pay everything off at 14 months. I will not be paying any interest after that, and I cut up all of my cards so I won't rack up the bills with interest on them anymore. Now, if I can't buy it with a debit card or cash, I don't get it. My cards went up so high after remodeling a home so they were justified. It wasn't because I didn't pay attention to what I could afford. My brother, on the other hand, has trouble using credit cards properly and this doesn't work for him.",
"title": ""
},
{
"docid": "4a6861c5a6ac2146025b8a13d9207d3c",
"text": "That's pretty typical for introductory problems. It's leading you into an NPV question. They're keeping the cash flows the same to illustrate the time value of money to show you that even though the free cash flow is the same in year 1 and year 4 or whatever when you discount it to present value today's stream is worth more than tomorrow's",
"title": ""
},
{
"docid": "70d0915408fb98db5d2f5e7cb0c31731",
"text": "Assuming cell A1 contains the number of trades: will price up to A1=100 at 17 each, and the rest at 14 each. The key is the MAX and MIN. They keep an item from being counted twice. If X would end up negative, MAX(0,x) clamps it to 0. By extension, if X-100 would be negative, MAX(0, X-100) would be 0 -- ie: that number doesn't increase til X>100. When A1=99, MIN(a1,100) == 99, and MAX(0,a1-100) == 0. When A1=100, MIN(a1,100) == 100, and MAX(0,a1-100) == 0. When A1=101, MIN(a1,100) == 100, and MAX(0,a1-100) == 1. Of course, if the 100th item should be $14, then change the 100s to 99s.",
"title": ""
},
{
"docid": "41d16faa39889d7deb9d94d194aa8873",
"text": "It helps to put the numbers in terms of an asset. Say a bottle of wine costs 10 dollars, but the price rises to 20 dollars a year later. The price has risen 100%, and your dollars have lost value. Whereas your ten used to be worth 100% of the price of bottle of wine, they now are worth 50% of the risen price of a bottle of wine so they've lost around 50% of their value. Divide the old price by the new inflated price to measure proportionally how much the old price is of the new price. 10 divided by 20 is 1/2 or .50 or 50%. You can then subtract the old price from the new in proportional terms to find how much value you've lost. 1 minus 1/2 or 1.00 minus .50 or 100% minus 50%.",
"title": ""
},
{
"docid": "1f26c59fd47f52343873a025355c1497",
"text": "Let's say the money-giver gets apples by you and he gives you money for them. The money you now have is worth to get apples. If the money now would change its value to negative, the roles would change opposites and you'd owe the money-giver (whom you already gave apples to) even more apples. That's simply insane. The worst money value can be is zero.",
"title": ""
},
{
"docid": "eea446cbb3ebab34ec08cdc4dd791dde",
"text": "That would have been a good idea. They don't charge interest on a $0 balance, but if you payoff your account after the cycle date, there is a hidden balance and that balance will accrue interest. It is only a few cents a day. I just don't think it is legal for them to refuse to provide you a payoff quote mid cycle. I'm almost certain. When I worked for Discover it was a key point in training to not give the wrong amount and to make sure to use the calculator in the system to quote a daily balance, how much it goes up per day, and how much they should send if they were mailing the payment, giving consideration for the time it takes to receive/process the payment.",
"title": ""
},
{
"docid": "7bf0d506705cfb813417bf5edc31f44c",
"text": "\"Emotion aside, you can calculate the cost of the funds you have tied up at the bank. If I can earn 5% in a CD, my \"\"free\"\" checking with minimum $5000 balance really costs me $250/yr. You have money tied up, I understand, but where would you place it otherwise, and at what return? The subject of frequent trading even at zero cost is worth addressing, but not the real subject of your question. So, I'll leave it for elsewhere.\"",
"title": ""
},
{
"docid": "3bfc351c9143b98206dae397687e2531",
"text": "\"Some stocks do fall to zero. I don't have statistics handy, but I'd guess that a majority of all the companies ever started are now bankrupt and worth zero. Even if a company does not go bankrupt, there is no guarantee that it's value will increase forever, even in a general, overall sense. You might buy a stock when it is at or near its peak, and then it loses value and never regains it. Even if a stock will go back up, you can't know for certain that it will. Suppose you bought a stock for $10 and it's now at $5. If you sell, you lose half your money. But if you hold on, it MIGHT go back up and you make a profit. Or it might continue going down and you lose even more, perhaps your entire investment. A rational person might decide to sell now and cut his losses. Of course, I'm sure many investors have had the experience of selling a stock at a loss, and then seeing the price skyrocket. But there have also been plenty of investors who decided to hold on, only to lose more money. (Just a couple of weeks ago a stock I bought for $1.50 was selling for $14. I could have sold for like 900% profit. Instead I decided to hold on and see if it went yet higher. It's now at $2.50. Fortunately I only invested something like $800. If it goes to zero it will be annoying but not ruin me.) On a bigger scale, if you invest in a variety of stocks and hold on to them for a long period of time, the chance that you will lose money is small. The stock market as a whole has consistently gone up in the long term. But the chance is not zero. And a key phrase is \"\"in the long term\"\". If you need the money today, the fact that the market will probably go back up within a few months or a year or so may not help.\"",
"title": ""
},
{
"docid": "2567d6fa7f6d9b36d7fbb5b5533d52b1",
"text": ">I don't understand the logic of converting a cost of funds of 4% to a monthly % and then subtracting that number from an annual one (the 1.5%). I know it was wrong, so how would you approach it? >Unfortunately without seeing the case I really can't help you...there was likely much you have left out from above. All the relevant details I received for the case are here. What other info are you looking for?",
"title": ""
},
{
"docid": "aa2964de81eca81d7599394cdb34f979",
"text": "First of all any loan will have the last payment be slightly different than the rest. Even if the interest rate is zero it is hard to have a perfect monthly payment amount. By perfect I mean the amount of the loan divided by the number of months would be $ddd.cc0000... When looking at the amortization table the last payment will either be slightly higher or lower to adjust for the rounding that was done. My suspicion is that the rounding would have resulted in a left over 12 cents. It is also possible that you are paying it off slightly early and the computer is simply taking the leftover amount an spreading it over the remaining period of the loan. You could be paying it early because for the main part of the loan was paid to a company that rounds all payments to the higher dollar, or has a minimum monthly payment amount. I looked at the company you mentioned in the question, and searched the site for an amortization tool. I found it, and used the pre-filled in example. https://www.edfinancial.com/amortizationschedule?pmts=120&intr=6.8&prin=25000 If that last payment is not adjusted the borrower will still owe $0.12. The fact it equals your situation is a coincidence. But is does show what can happen.",
"title": ""
},
{
"docid": "7c35140524ccf9b513b1f488b10cb16a",
"text": "\"of course if you asked me to give you $24.4955 I can't. No, but if I asked you to give me $24.4955 and you gave me a piece of paper saying \"\"I O U $24.4955\"\", and then this happened repeatedly until I had collected 100 of these pieces of paper from you, then I could give them back to you in exchange for $2449.55 of currency. There's nothing magical about the fact that there doesn't happen to be a $0.001 coin in current circulation. This question has some further information.\"",
"title": ""
},
{
"docid": "16a624a10ee783824d9bef140250bf4d",
"text": "Consider inflation. If you invest $10,000 today, you need to make a few hundred dollars interest just to make up for inflation - if there is 3% inflation then a change from $10,000 to $10,300 means you didn't actually make any money.",
"title": ""
},
{
"docid": "838c715b7d504db807ab5448b6489856",
"text": "I think examining the effects and potential implications of China's involvement with the stock market may be productive. Some interesting examples would be the failed market circuit breakers and the restrictions of short-selling in 2016. Not sure that this would qualify as a real topic, but may give you food for thought.",
"title": ""
}
] |
fiqa
|
ccc8d32634b455de813d4ca8b10bf628
|
IRS “convenience of the employer” test when employee lives far from the office
|
[
{
"docid": "98e4a30799ac22fdf632c7ade120ac85",
"text": "\"The decision whether this test is or is not met seems to be highly dependent on the specific situation of the employer and the employee. I think that you won't find a lot of general references meeting your needs. There is such a thing as a \"\"private ruling letter,\"\" where individuals provide specific information about their situation and request the IRS to rule in advance on how the situation falls with respect to the tax law. I don't know a lot about that process or what you need to do to qualify to get a private ruling. I do know that anonymized versions of at least some of the rulings are published. You might look for such rulings that are close to your situation. I did a quick search and found two that are somewhat related: As regards your situation, my (non-expert) understanding is that you will not pass in this case unless either (a) the employer specifies that you must live on the West Coast or you'll be fired, (b) the employer would refuse to provide space for you if you moved to Boston (or another company location), or (c) you can show that you could not possibly do your job out of Boston. For (c), that might mean, for example, you need to make visits to client locations in SF on short-notice to meet business requirements. If you are only physically needed in SF occasionally and with \"\"reasonable\"\" notice, I don't think you could make it under (c), although if the employer doesn't want to pay travel costs, then you might still make it under (a) in this case.\"",
"title": ""
},
{
"docid": "b00dcf0b2faaae67c0b38a657cffcb20",
"text": "\"I'm not a tax professional, but as I understand it, you are not expected to commute from San Francisco to Boston. :) If your employer has not provided you with an external office, then yes, you have very likely met the \"\"convenience of the employer\"\" test. However, to take the home office deduction, there are many requirements that have to be met. You can read more at the Nolo article Can You Deduct Your Home Office When You're an Employee? (Thanks, keshlam) The home office deduction has many nuances and is enough of an IRS red flag that you would be well-advised to talk to an accountant about it. You need to be able to show that it is exclusively and necessarily used for your job. Another thing to remember: as an employee, the home office deduction, if you take it, will be deducted on Schedule A, line 21 (unreimbursed employee expenses), among other Miscellaneous Deductions. Deductions in this section need to exceed 2% of your adjusted gross income before you can start to deduct. So it will not be worth it to pursue the deduction if your income is too high, or your housing expenses are too low, or your office is too small compared to the rest of your house, or you don't itemize deductions.\"",
"title": ""
},
{
"docid": "dd880ce59cf2fa8ab5caedc3c00013d1",
"text": "If your employer does not provide you with a place to work but nevertheless expects you to get work done, then having a place to work is a condition of employment.",
"title": ""
}
] |
[
{
"docid": "039519230ab375aea3fdd45fc09a3a49",
"text": "\"The short answer is yes you can, but you have to make sure you do it correctly. If you are employed by a tech company that does contract work at a separate location and you don't get reimbursed by your employer for travel expenses, you can claim the mileage between your home and location B as a business expense, but there's a catch - you have to subtract the mileage between your home and location A (your employer). So if it's 20 miles from your house to your employer (location A), and 30 miles from your house to the business you're contracting at (location B), you can only claim 10 miles each way (so 20 miles total). Obviously if the distance to location B is closer than your employer (location A), you're out of luck. You will have to itemize to take this deduction, by filling out a Schedule A for itemized deductions and Form 2106 to calculate how much of a deduction for travel expenses you can take. Google \"\"should i itemize\"\", if you're unsure whether to take the Standard Deduction or Itemize. Sources:\"",
"title": ""
},
{
"docid": "0c8b81f8345d86c56215b7b3dd6e4a8c",
"text": "Here's an answer received elsewhere. Yes, it looks like you have a pretty good understanding the concept and the process. Your wife's income will be so low - why? If she is a full-time student in any of those months, you may attribute $250 x 2 children worth of income for each of those months. Incidentally, even if you do end up paying taxes on the extra $3000, you won't be paying the employee's share of Social Security and Medicare (7.65%) or state disability on those funds. So you still end up saving some tax money. No doubt, there's no need to remind you to be sure that you submit all the valid receipts to the administrator in time to get reimbursed. And a must-have disclaimer: Please be advised that, based on current IRS rules and standards, any advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty that the IRS may assess related to this matter. Any information contained in this email, whether viewed or subsequently printed, cannot be relied upon as qualified tax and accounting advice. ... Any information contained in this email does not fall under the guidelines of IRS Circular 230.",
"title": ""
},
{
"docid": "e477d83f05f0972355b5b26f40f70211",
"text": "You are going to have to talk to your benefits office to understand all the deadlines and rules for their program. While the IRS does enforce the law, there are enough local variations in the rules to make it quite complex. The first thing you need to know is the source of the funds: the employer or the employee. Then you need to know the deadline for applying for the program, how you specify the monthly expenses in advance, and when the funds expire. The way you pay for commuting and parking makes a difference: per-ride on the subway, van pool, monthly transit pass; daily parking at a lot, monthly hang tag, or at meter; These options determine how to expend the funds and how they give you the funds. You can't get money for missed months. So you need to know what you have to do in October to get money for November.",
"title": ""
},
{
"docid": "255ced4517b0b7d6b04e2db97cfaec4c",
"text": "The answer on the Canadian Government's website is pretty clear: Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing. However, that is most likely related to a personal vehicle. There is a deduction related to Public Transportation: You can claim cost of monthly public transit passes or passes of longer duration such as an annual pass for travel within Canada on public transit for 2016. The second sleeping residence is hard to justify as the individual is choosing to work in this town and this individual is choosing to spent the night there - it is not currently a work requirement. As always, please consult a certified tax professional in your country for any final determinations on personal (and corporate) tax laws and filings.",
"title": ""
},
{
"docid": "28ca8044728004376da120c7f572a56f",
"text": "\"It doesn't generally matter, and I'm not sure if it is in fact in use by the IRS other than for general statistics (like \"\"this year 20% of MFJ returns were with one spouse being a 'homemaker'\"\"). They may be able to try and match the occupation and the general levels and types of income, but for self-employed there's a more precise and reliable field on Schedule C and for employees they don't really need to do this since everything is reported on W2 anyway. So I don't think they even bother or give a lot of value to such a metric. So yes, I'm joining the non-authoritative \"\"doesn't matter\"\" crowd.\"",
"title": ""
},
{
"docid": "891ee310b6317fc6582703bb35ca4b5f",
"text": "You need an ITIN. Follow the instructions on the IRS page to apply. You might be better off getting an on-campus employment authorization and getting an SSN, though, as the ITIN process is not really convenient.",
"title": ""
},
{
"docid": "c980bab86b11f8a11a08b697e3987cf5",
"text": "The I-9 form is required because you are working. It is kept by the employer as proof that you have the proper documents to work. If the government was to inspect their records they can be fined if they don't have those document, in fact they have to keep them for several years after your employment is done. A w-4 form is a federal tax form. There also was probably a state version of the form. When you completed the w-4 it is used by your employer to determine how much in taxes need to be withheld. Employers don't know your tax situation. Even though you are on work study, you still could have made enough money over the summer to pay taxes. But if this is your only job, and you will not make enough money to have to pay taxes, you can fill out the form as exempt. That means that last year you didn't make enough money to have to pay taxes, and you don't expect to make enough to have to pay taxes this year. If you are exempt, no federal income tax will be withheld. They might still withhold for social security and medicare. The state w-4 can also be used to be exempt from state taxes. If they withhold any income taxes you have to file one of the 1040 tax forms to get that income tax money back. You will have to do so for the state income tax withholding. A note about social security and medicare. If you have an on campus job, at the campus you attend, during the school year; they don't withhold money for social security and medicare. That law applies to students on work study jobs, and on non-work-study jobs. for single dependents the federal threshold where you must file is: > You must file a return if any of the following apply. Your gross income was more than the larger of— a. $1,000, or b. Your earned income (up to $5,850) plus $350.",
"title": ""
},
{
"docid": "fca05dd02f506c3c1b809979ec8410e5",
"text": "It looks like the resource to deciding these is here Concerning the meals, the law seems a bit vague to me. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. If the whole point of google providing meals is to benefit Google as such people will not leave the googleplex when to obtain meals elsewhere causing increased productivity for Google, then this is covered as a business expense. (Even if it wasn't, Google would have to notify you that it was providing you a non-expensable benefit, i.e. compensation, by giving you a 1099 at the end of the year). Concerning the other benefits, the only way I could see those items not being taxable benefits is if one of the two applies.",
"title": ""
},
{
"docid": "53bc18ef51b467033d38893df7051ce4",
"text": "\"Your best bet might be to visit a local IRS office in person. To find your local office, use the IRS office locator page. After you enter your zip code and find your nearest office, click on the \"\"hours and services\"\" link, which will show you a list of every office in your state. For each office, you can click on the \"\"services provided\"\" link to make sure that they handle \"\"payment arrangements\"\" at your selected office. Finally, you should probably call the local office first to see if you need an appointment, so you don't have to wait.\"",
"title": ""
},
{
"docid": "27be59dd2f4445169ef9d91862353b69",
"text": "It would be unusual but it is possible that the expenses could be very high compared to your income. The IRS in pub 529 explains the deduction. You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. The next part lists examples. I have cut the list down to highlight ones that could be large. You may be able to deduct the following items as unreimbursed employee expenses. Damages paid to a former employer for breach of an employment contract. Job search expenses in your present occupation. Legal fees related to your job. Licenses and regulatory fees. Malpractice insurance premiums. Research expenses of a college professor. Rural mail carriers' vehicle expenses. Tools and supplies used in your work. Work clothes and uniforms if required and not suitable for everyday use. Work-related education. If the term of employment was only part of the year, one or more of the these could dwarf your income for the year. Before deducting something that large be sure you can document it. I believe the IRS computers would flag the return and I wouldn't be surprised if they ask for additional proof.",
"title": ""
},
{
"docid": "8a56238e87f61f08084fe4d8d5f824ad",
"text": "Go through the IRS Publication 521. Generally, relocation assistance is given either as : or",
"title": ""
},
{
"docid": "ee21749916f89670ecfa90cfb2e9c360",
"text": "\"While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do I quantify the travel expenses? Generally, \"\"necessary and ordinary\"\" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say \"\"no\"\" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000 miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (\"\"pleasure\"\") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is \"\"business\"\" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the property? Although, again, the \"\"necessary and ordinary\"\" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA).\"",
"title": ""
},
{
"docid": "f55d808ccf87a99e2a6100e95f2e63ec",
"text": "\"New York State is one of a few states that will go after telecommuter taxes (such that some people may end up paying double tax even if they don't live in NY). There are a few ways that you can avoid this. If you NEVER come to NY for work, and your employer can stipulate that your position is only available to be filled remotely, you will likely be covered. But there are a myriad of factors relating to this such as whether the employer reimburses you for your home office and whether you keep \"\"business records\"\" at your office. Provided you can easily document the the factors in TSB-M-06(5)I, you shouldn't have to pay NYS taxes. (source: I've worked with a NYS tax attorney as an employer to deal with this exact scenario).\"",
"title": ""
},
{
"docid": "b54f359812447b459ce484e396958a5f",
"text": "Alright, IRS Publication 463: Travel, Entertainment, Gift, and Car Expenses Business and personal use. If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expense based on the miles driven for each purpose. Example. You are a sales representative for a clothing firm and drive your car 20,000 miles during the year: 12,000 miles for business and 8,000 miles for personal use. You can claim only 60% (12,000 ÷ 20,000) of the cost of operating your car as a business expense Obviously nothing helpful in the code. So I would use option 1, weight the maintenance-related mileage by the proportion of business use. Although if you use your car for business a lot (and perhaps have a spouse with a car), an argument could be made for 3. So I would consider my odds of being audited (even lower this year due to IRS budget cuts) and choose 1 or 3. And of course never throw anything away until you're room temperature.",
"title": ""
},
{
"docid": "d9a780decda5c8e8bb9f5fa69add811c",
"text": "\"Even though you will meet the physical presence test, you cannot claim the FEIE because your tax home will remain the US. From the IRS: Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a \"\"tax home\"\" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. ... You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. ... The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. If your new work assignment is for an indefinite period, your new place of employment becomes your tax home, and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite. If you expect your employment to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. For guidance on how to determine your tax home refer to Revenue Ruling 93-86. Your main place of business is in the US and this will not change, because your business isn't relocating. If you are intending to work remotely while you are abroad, you should get educated on the relevant laws on where you are going. Most countries don't take kindly to unauthorized work being performed by foreign visitors. And yes, even though you aren't generating income or involving anyone in their country, the authorities still well may disapprove of your working. My answer to a very similar question on Expatriates.\"",
"title": ""
}
] |
fiqa
|
68608031ccdd3f689d935302e591f48a
|
Is this reply promising a money order and cashier check a scam?
|
[
{
"docid": "7ef100bc0d7e435fdc5fbb103eef4366",
"text": "\"It's a scam. The cashier's check will be forged. Craigslist has a warning about it here (item #3). What kind of payment do you think is not fakable? Or at least not likely to be used in scams? When on craigslist - deal only locally and in person. You can ask to see the person's ID if you're being paid by check When being paid by check, how can seeing his/her ID help? In case the check isn't cashable, I can find that person by keeping record of his/her ID? If you're paid by check, the payers details should be printed on the check. By checking the ID you can verify that the details match (name/address), so you can find the payer later. Of course the ID can be faked too, but there's so much you can do to protect yourself. You'll get better protection (including verified escrow service) by selling on eBay. Is being paid by cash the safest way currently, although cash can be faked too, but it is the least common thing that is faked currently? Do you recommend to first deposit the cash into a bank (so that let the bank verify if the cash is faked), before delivering the good? For Craigslist, use cash and meet locally. That rules out most scams as a seller. What payment methods do you think are relatively safe currently? Then getting checks must be the least favorite way of being paid. Do you think cash is better than money order or cashier order? You should only accept cash. If it is a large transaction, you can meet them at your bank, have them get cash, and you receive the cash from the bank. Back to the quoted scam, how will they later manipulate me? Are they interested in my stuffs on moving sale, or in my money? They will probably \"\"accidentally\"\" overpay you and ask for a refund of some portion of the overpayment. In that case you will be out the entire amount that you send back to them and possibly some fees from your bank for cashing a bad check.\"",
"title": ""
},
{
"docid": "b900e289bd1d01933db1473b3da24ae2",
"text": "I was a involved in this same scam from my Craigslist item. The buyer texted me & said his assistant put the wrong check in my envelope & please let him know when I got it,cash the cashiers check, keep my part for money of my item & send him back the difference. Well, the check came to me for $1,350.00 for a $100 item. I immediately suspected something here. It was for way to big to be a mistake. I called the credit union in California to ask about this cashier's check & sure enough, they said it was a fake check. This scammer's phone he texted from was from a San Antonio,TX area code, the check was mailed from Madison, WI, & the check was on a California CU. They sure cover their tracks pretty good. So C/L'ers.....BEWARE! don't take checks for more than the amount & be asked to send back the difference. You will be HAD!",
"title": ""
}
] |
[
{
"docid": "b5825b7937a3c46f4dad210d283bc7aa",
"text": "Also see who has the authority to delete bills or items on bills. This was a huge scam with some servers I've worked with. If you can delete an entire bill that was paid in cash then that's money in your pocket.",
"title": ""
},
{
"docid": "61107244a7aeebff7fdc6c97f2cf385e",
"text": "\"This is almost certainly a scam or a mistake. This is not good, spendable money: it is not yours to keep. Very simple to handle. Tell the bank, in writing that you were not expecting to receive this money and are a bit surprised to receive it. Preferably in a way that creates a paper trail. And then stop talking. Why? Because you honestly don't know. This puts you at arm's length to the money: disavowing it, but not refusing it. Wildest dreams: nobody wants it back ever. As for the person bugging you for the cash, tell them nothing except work with their own bank. Then ignore them completely. He probably hacked someone else, diverted their money into your account, and he's conning you into transferring it to a third location: him. Leaving you holding the bag when the reversals hit months later. He doesnt want you reversing; that would return the money to the rightful owner! He works this scam on dozens of people, and he wins if some cooperate. Now here's the hard part. Wait. This is not drama or gossip, you do not need to keep people updated. You are not a bank fraud officer who deals with the latest scams everyday, you don't know what the heck you are doing in this area of practice. (In fact, playing amateur sleuth will make you suspicious). There is nothing for you to do. That urge to \"\"do something\"\" is how scammers work on you. And these things take time. Not everyone banks in real time on smartphone apps. Of course scammers target those who'd be slow to notice; this game is all about velocity. Eventually (months), one of two things is likely to happen. The transfer is found to be fraudulent and the bank reverses it, and they slap you with penalties and/or the cops come knockin'. You refer them to the letter you sent, explaining your surprise at receiving it. That letter is your \"\"get out of jail free\"\" card. The other person works with their bank and claws back the money. One day it just disappears. (not that this is your problem, but they'd file a dispute with their bank, their bank talks to your bank, your bank finds your letter, oh, ok.) If a year goes by and neither of these things happens, you're probably in the clear. Don't get greedy and try to manipulate circumstances so you are more likely to keep the money. Scammers prey on this too. I think the above is your best shot.\"",
"title": ""
},
{
"docid": "1a5c0440daf5379e2346695332d3c273",
"text": "It is a scam, other people have given lots of details why. But online access password Is ONLY of use to someone that wishes to steal your money. Just including it in the requested information is enough to make it clear it is a scam. To deposit money into someone accounts only needs. And maybe (if the deposit is being pay by anyone that needs to report the payment to the government for income tax - at least in the UK) If the money is coming from a source that must report the payment for tax.",
"title": ""
},
{
"docid": "bb0872cc316582d83cb6f56179da2bf2",
"text": "The sting here is definitely in the tail, the PS that says We are starting to call you from the same day when we get your details. The initial email doesn't ask for details, it asks for commitment. Once committed, you will be more relaxed about providing details. This makes me think that this is more serious than a simple financial scam. This is an effort to steal your identity, and that could be much more serious than the one-off loss of a few thousand dollars. Here's why: 1. The scammer could get numerous credit cards and store cards in your name, run up thousands or even hundreds of thousands of dollars in charges, and leave you stuck with explaining what happened. I know someone who went from being a multi-millionaire to a pauper in a few months when his identity was stolen - and he is no fool. 2. It will take you years to clear your name. Meanwhile, your credit is shot, and you might have trouble getting a job, renting an apartment, or simply getting a cellphone contract. 3. Once you've repaired your credit, the scammer can just go through his old files and do it all over again. 4. Cloaked in your identity, and therefore being seen as you, the scammer can pull any number of scams, for which you will eventually be blamed. Then as well as dealing with credit bureaus, you will be dealing with another, more serious bureau: the FBI.",
"title": ""
},
{
"docid": "c931860195065d9558dc966e8eae2e83",
"text": "\"Short answer: Yes this is a scam. I see three different possibilities how they get you. I will rank them from \"\"best\"\" to worst Scammer A sends 100$ to you. You then follow his instructions and send back 50$ through WU (this is untraceable). He then contacts his bank and tells them he never intended to send that 100$ to you, then bank will then reverse that transaction and give him back his money, leaving you 50$ short. Scammer A hacks or scams innocent person B and either sends B:s money to you or tricks person B to do it. When person B reports this to the police it will look like you were behind the whole thing. The transaction will be reversed leaving you 50$ short and with unwanted police attention (see this article for an extreme example: https://www.wired.com/2015/10/online-dating-made-woman-pawn-global-crime-plot/) The nice person A wants to send money to a criminal syndicate or terrorist organization but don't want to be associated with it. Leaving you 50$ up (hurray) and possibly on a bunch of terrorist watch lists (ouch!). The extra info you provide wouldn't be necessary for any of these scams but I guess it could be nice to have for some regular identity theft. This is by no means an exhaustive list of all that the scammers could do. It's just a short list to show you how dangerous it would be to play along. To state the obvious, don't walk from this person, RUN!\"",
"title": ""
},
{
"docid": "3cfa23856809120150fb4a487dadcfe4",
"text": "Its not a scam. The car dealership does not care how you pay for the car, just that you pay. If you come to them for a loan they will try and service you. If you come with cash, they will sell you a car and not try to talk you into financing. If you come with a check from another bank, they will happily accept it. I would try to work with Equifax or a local credit union to figure out what is going on. Somehow she probably had her credit frozen. Here are some really good things to mitigate this situation: Oh and make sure you do #1 and forget about financing cars ever again. I mean if you want to build wealth.",
"title": ""
},
{
"docid": "411eae05588c4e0c49765f25d3ba06e6",
"text": "This point stands. It's an accurate description. However, for clarity, they're not skimming money off your order in the traditional sense. They see your order, beat you to the punch, and place their own. They then sell it back to you at a higher price. Think brute force for the stock market.",
"title": ""
},
{
"docid": "cf189bbfcf5cd1c6c0ed854c5b9c2ee9",
"text": "\"This is definitely a scam. My husband was inquiring with a \"\"company\"\" that was offering him to be. Representative for them. He got the same job details but the company was called Ceneo. I did due diligence and found that the real Ceneo has no problems receiving money directly from buyers around the world. The fake company mirrored their website, posted jobs on the net,hoping to \"\"employ\"\" unsuspecting people in the U.S. This is their reply to my husband when he asked the job details. DO NOT GET SCAMMED and held accountable for money laundering.\"",
"title": ""
},
{
"docid": "7f267f8d8189cd55408b9a859789047c",
"text": "Yes. It is a scam. The story makes no sense. They just want your info to steal your money. regarding requests to know how it works: the scammer is requesting: username, password, routing number, checking account number, and security question/answers. they now have access to your bank account. they will have access until you are able to shut it down. Once they have your password, they can change it to whatever they want. it can be used to launder money, steal money from other accounts you have, proof of identity...",
"title": ""
},
{
"docid": "6956d2e0cb5ed915ef5a29e8e802643e",
"text": "This is dangerous as it is a typical a scam. Trudy convinces Bob to help her avoid an ATM free or some other pretense. She writes Bob a check for $100, but is willing to take only $80 to return the favor. Bob agrees. Bob deposits the check, gives Trudy the $80 and then later finds out the check is bad. In most cases Bob will not be able to find or contact Trudy. However, in some rare cases if Trudy feels Bob is very gullible, she will do the same thing again and again as long as Bob allows. Sometimes the amounts will increase to surprisingly high levels.",
"title": ""
},
{
"docid": "46691bddaf9882f2bfd4e34befd3fefa",
"text": "You can't cash the check silly. How can you go off on a rant when you can't even tell the difference between a real check and a promotional tool. If you don't want to call in an get info throw it away....simple. This thread made me laugh. Thanks for that. Good day.",
"title": ""
},
{
"docid": "944f3a35fe9aee89e71d1f28ddc67cd3",
"text": "This sounds like a scam. Did they email you out of the blue to offer you this 'job', by any chance, and you'd never heard of them before? That's an incredibly large red flag in and of itself. While I don't know quite what the scam is likely to be, here's how I would suggest it might work: Other variants are possible - say using a cheque rather than PayPal, or having Person A be the scammer as well. But this being a legitimate transaction is very unlikely.",
"title": ""
},
{
"docid": "595edcd219da19b00009f7a9338b5f10",
"text": "I'm not a finance professional by any means, but my understanding of cashier's checks is that they're more in favour of the person receiving. They're essentially guaranteeing that you have the money in your account to provide payment to the recipient. The advice I've always received is to treat cashier's checks and money orders as straight up cash, because that's essentially what they are. Hopefully someone else can come in with a better background, but I figured I'd pitch in.",
"title": ""
},
{
"docid": "f3c332fbce2b61f308b02c595062977e",
"text": "Ok so this is the best information I could get! It is a guarantee from a financial institution that payment will be made for items or services once certain requirements are met. Let me know if this helps! I'll try to get more info in the meantime.",
"title": ""
},
{
"docid": "26df5f84fc25ddd998b843eefed72589",
"text": "\"It is likely a scam. In fact the whole mystery shopping \"\"job\"\" may be a scam. There is a Snopes page about cashier's check scams, as well as a US government page which specifically mentions mystery shopping as a scam angle. As for how the scam works, from the occ.gov site I just linked: However, cashier’s checks lately have become an attractive vehicle for fraud when used for payments to consumers. Although, the amount of a cashier’s check quickly becomes \"\"available\"\" for withdrawal by the consumer after the consumer deposits the check, these funds do not belong to the consumer if the check proves to be fraudulent. It may take weeks to discover that a cashier’s check is fraudulent. In the meantime, the consumer may have irrevocably wired the funds to a scam artist or otherwise used the funds—only to find out later, when the fraud is detected—that the consumer owes the bank the full amount of the cashier’s check that had been deposited. It is somewhat unusual in that, from what you say, there has been no attempt thus far to get money back. However, your sister-in-law may have received that info separately, or received it as part of her mystery shopping job but didn't mention it to you with regard to this check. Typically the scam involves telling the recipient to transfer money to a third party (e.g., by buying goods as a mystery shopper, or via wire transfer to \"\"reimburse\"\" someone associated with a sham operation). By the time the cashier's check is revealed as fraudulent, the victim has already transferred away his/her own real money. It's probably worth taking the check to your or her bank and asking them about it. They may have more info. Also, banks usually want to know about scams like this because, in the long run, they accumulate data on them and share that with law enforcement and can eventually catch some of the scammers. Edit: Just to help anyone who may be reading this later. The letter you added confirms it is absolutely a scam. My boss was once contacted via a scam operation very similar to this. The huge red flag (in addition to others already mentioned) is that you are being \"\"given\"\" a check for over $2000, of which only $25 is purportedly for actual mystery shopping and $285 is payment for you, the mystery shopper. The whole rest of the $2000+ amount is for you to wire to \"\"another Mystery/Secret Shopper in order for them to complete their assignment\"\". They are giving you $2000 to give to someone else who is supposedly another one of their own employees/contractors. Ask yourself what sane business would conduct their operations in this way. If you work at a law office, or a hamburger stand, or a school, or anything you like, does your boss ever say \"\"Here is your paycheck for $5000. I know you only earned $1000, but I'm just going to give you the whole $5000, and you're supposed to use $4000 of it to pay your coworker Joe his wages.\"\" No. There is no reason to do that except that the \"\"other mystery shopper\"\" is actually the scammer.\"",
"title": ""
}
] |
fiqa
|
3b26da31eee029ca94b26f619cd9b4cc
|
Can I just file a 1040-ES?
|
[
{
"docid": "90ac357b1ab65e33ccc03a8fbdc10b0f",
"text": "Yes, you can send in a 2012 1040-ES form with a check to cover your tax liability. However, you will likely have to pay penalties for not paying tax in timely fashion as well as interest on the late payment. You can have the IRS figure the penalty and bill you for it, or you can complete Form 2210 (on which these matters are figured out) yourself and file it with your Form 1040. The long version of Form 2210 often results in the smallest extra amount due but is considerably more time-consuming to complete correctly. Alternatively, if you or your wife have one or more paychecks coming before the end of 2012, it might be possible to file a new W-4 form with the HR Department with a request to withhold additional amounts as Federal income tax. I say might because if the last paycheck of the year will be issued in just a few days' time, it might already have been sent for processing, and HR might tell you it is too late. But, depending on the take-home pay, it might be possible to have the entire $2000 withheld as additional income tax instead of sending in a 1040-ES. The advantage of doing it through withholding is that you are allowed to treat the entire withholding for 2012 as satisfying the timely filing requirements. So, no penalty for late payment even though you had a much bigger chunk withheld in December, and no interest due either. If you do use this approach, remember that Form W-4 applies until it is replaced with another, and so HR will continue to withhold the extra amount on your January paychecks as well. So, file a new W-4 in January to get back to normal withholding. (Fix the extra exemption too so the problem does not recur in 2013).",
"title": ""
}
] |
[
{
"docid": "f5cfa6200bbb4657e77e736027602d4d",
"text": "It is true that with a job that pays you via payroll check that will result in a W-2 because you are an employee, the threshold that you are worried about before you have to file is in the thousands. Unless of course you make a lot of money from bank interest or you have income tax withheld and you want it refunded to you. Table 2 and table 3 in IRS pub 501, does a great job of telling you when you must. For you table 3 is most likely to apply because you weren't an employee and you will not be getting a W-2. If any of the five conditions listed below applied to you for 2016, you must file a return. You owe any special taxes, including any of the following. a. Alternative minimum tax. (See Form 6251.) b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other taxfavored account. (See Pub. 590A, Contributions to Individual Retirement Arrangements (IRAs); Pub. 590B, Distributions from Individual Retirement Arrangements (IRAs); and Pub. 969, Health Savings Accounts and Other TaxFavored Health Plans.) But if you are filing a return only because you owe this tax, you can file Form 5329 by itself. c. Social security or Medicare tax on tips you didn't report to your employer (see Pub. 531, Reporting Tip Income) or on wages you received from an employer who didn't withhold these taxes (see Form 8919). d. Writein taxes, including uncollected social security, Medicare, or railroad retirement tax on tips you reported to your employer or on groupterm life insurance and additional taxes on health savings accounts. (See Pub. 531, Pub. 969, and the Form 1040 instructions for line 62.) e. Household employment taxes. But if you are filing a return only because you owe these taxes, you can file Schedule H (Form 1040) by itself. f. Recapture taxes. (See the Form 1040 instructions for lines 44, 60b, and 62.) You (or your spouse if filing jointly) received Archer MSA, Medicare Advantage MSA, or health savings account distributions. You had net earnings from selfemployment of at least $400. (See Schedule SE (Form 1040) and its instructions.) You had wages of $108.28 or more from a church or qualified churchcontrolled organization that is exempt from employer social security and Medicare taxes. (See Schedule SE (Form 1040) and its instructions.) Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Health Insurance Marketplace. You should have received Form(s) 1095A showing the amount of the advance payments, if any. It appears that item 3: You had net earnings from selfemployment of at least $400. (See Schedule SE (Form 1040) and its instructions.) would most likely apply. It obviously is not too late to file for 2016, because taxes aren't due for another month. As to previous years that would depend if you made money those years, and how much.",
"title": ""
},
{
"docid": "fb0647f840b95233af703f5eabf08a32",
"text": "\"1. What forms do I need to file to receive money from Europe None. Your client can pay you via wire transfer. They need to know your name, address, account number, and the name of your bank, its SWIFT number and its associated address. The addresses and names are required to make sure there are no typos in the numbers. 2. What forms do I need to file to pay people in Latin America (or any country outside the US) None. 1099s only need to be filled out when the contractor has a US tax ID. Make sure they are contractors. If they work for you for more than 2 years, that can create a problem unless they incorporate because they might look like \"\"employees\"\" to the IRS in which case you need to be reporting their identitites to the IRS via a W-8BEN form. Generally speaking any foreign contractor you have for more than 2 years should incorporate in their own country and you bill that corporation to prevent employee status from occurring. 3. Can I deduct payments I made to contractors from other countries as company expense Of course.\"",
"title": ""
},
{
"docid": "e3c276445f1d5db3e000e6ae79c6709e",
"text": "And if you need to pay business taxes outside of the regular US 1040 form, you can use the IRS' Electronic Federal Tax Payment System (EFTPS). Basically, you enroll your bank accounts, and you can make estimated, penalty, etc. payments. The site can be found here.",
"title": ""
},
{
"docid": "5d30f301760755861621e5260d05e183",
"text": "\"As a Canadian resident, the simple answer to your question is \"\"yes\"\" Having worked as a tax auditor and as a Certified Financial Planner, you are required to file an income tax return because you have taxable employment income. All the employer is doing is deducting it at source and remitting it on your behalf. That does not alleviate your need to file. In fact, if you don't file you will be subject to a no filing penalty. The one aspect you are missing is that taxpayers may be entitled to tax credits that may result in a refund to you depending on your personal situation (e.g spousal or minor dependents). I hope this helps.\"",
"title": ""
},
{
"docid": "28526f65abdc2985664cffeb477ba4eb",
"text": "\"IRS Pub 554 states (click to read full IRS doc): \"\"Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. ... If you are a U.S. citizen or resident alien, you must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1-1 below. \"\" You may not have wage income, but you will probably have interest, dividend, capital gains, or proceeds from sale of a house (and there is a special note that you must file in this case, even if you enjoy the exclusion for primary residence)\"",
"title": ""
},
{
"docid": "d5604a802dff56016b891fbe3adf732e",
"text": "I don't think so in your case. Unless the account generates so much interest income that it became reportable (I don't know the exact limit, but I think it's in the hundreds if not thousands of dollars, you might get a 1099 form if it generates over $10 of interest income, but you don't have to file taxes if your overall income is too low anyways). The US does not typically tax assets, only income. There are some states (Florida is the only one I can think of) that has odd tax treatment of intangible assets, but I doubt that would apply in your case. If this were a large enough amount, usually over $10,000, it might trigger some reporting requirements (possibly by your home country).",
"title": ""
},
{
"docid": "dd10d90ffdb55b8ff054948c6a6d2926",
"text": "\"You will be filing the exact same form you've been filing until now (I hope...) which is called form 1040. Attached to it, you'll add a \"\"Schedule C\"\" form and \"\"Schedule SE\"\" form. Keep in mind the potential effect of the tax and totalization treaties the US has with the UK which may affect your filings. I suggest you talk to a licensed EA/CPA who works with expats in the UK and is familiar with all the issues. There are several prominent offices you can find by Googling.\"",
"title": ""
},
{
"docid": "dd96b5b2a38b28fa6a4a9581dda69b19",
"text": "\"You can make estimated tax payments on Form 1040-ES. Most people who make such payments need to do it quarterly because the typical reasons for making estimated payments is something like self-employment income that a person will get throughout the year. If you have a one-time event like a single, large sale of stock, however, there's nothing wrong with doing it just one quarter out of the year. When it comes time to file your taxes, part of the calculate is whether you were timely quarter-by-quarter not just for the entire year, so if you do have a big \"\"one-time\"\" event mid-year, don't wait until the end of the year to file an estimated payment. Of course, if the event is at the end of the year, then you can make it a 4th quarter estimated payment.\"",
"title": ""
},
{
"docid": "2d230b97c82f552fa6433e8f60ecfd99",
"text": "You are correct that you do not need to file under a certain circumstances primarily related to income, but other items are taken into account such as filing status, whether the amount was earned or unearned income (interest, dividends, etc.) and a few other special situations which probably don't apply to you. If you go through table 2 on page 3 and 4 of IRS publication 501 (attached), there is a worksheet to fill out that will give you the definitive answer. As far as the 1099 goes, that is to be filed by the person who paid you. How you were paid (i.e., cash, check, etc., makes no difference). You don't have a filing requirement for that form in this case. https://www.irs.gov/pub/irs-pdf/p501.pdf",
"title": ""
},
{
"docid": "ab8e5625963dace403b25188bb017acc",
"text": "\"No, not on schedule C, better. Its an \"\"above the line\"\" deduction (line 29 on your 1040). Here's the turbo tax article on it. The instructions for this line set certain limitations that you must take into the account, and yes - it is limited to the net profit from the business. One of the following statements must be true. You were self-employed and had a net profit for the year. You were a partner with net earnings from self-employment. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2. The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business. If you are filing Schedule C, C-EZ, or F, the policy can be either in your name or in the name of the business.\"",
"title": ""
},
{
"docid": "8510a870bd602985400586f24d7396ab",
"text": "As littleadv says, if you're a sole proprietorship, you don't need to file a 1099 for money you pay yourself. You certainly will need to file a schedule C or schedule E to report the income. And don't forget SE to pay social security taxes on the income if you made a profit. If your company is a corporation, then -- I'm not a tax lawyer here, but I think the corporation would need to file a 1099 for the money that the corporation pays to you. Assuming that the amount is above the threshold that requires a 1099. That's normally $600, but it's only $10 for royalties.",
"title": ""
},
{
"docid": "8199c1f269790dd8ecce7897a0159c49",
"text": "\"Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the \"\"standard\"\" deduction - no itemization. The first year I passed that level, I was panicked because I thought I suddenly owed thousands. Switching to 1040A (aka the short form) and using even the basic itemized deductions showed that the IRS owed me a refund instead. I don't know where that level is for tax year 2015 but as you approach $62k, the simplified form is less-and-less appropriate. It would make sense, given some of the great information in the other answers, that the free offering is only for 1040EZ. That's certainly been true for other \"\"free\"\" software in the past.\"",
"title": ""
},
{
"docid": "fa5825450af7fba4836e5b9e31aa2c81",
"text": "You pay it this tax year. Whether that's now due to W-2 withholding, or later with your 1040 next year, or with your 1040-ES all depends on your particular situation.",
"title": ""
},
{
"docid": "1cc96b5757877b174dc8f1fee4ca1ab6",
"text": "I did not file taxes on last season winnings as I’ve received conflicting advise (particularly regarding self-employment taxes). I have all my documentation to support my winnings should I file as a professional gambler. Oh dear. Get a GOOD tax adviser (licensed as EA, CPA or Attorney in Nevada) who's specializing in providing services to people like you and have it resolved ASAP. You're in major non-compliance. If you earned by gambling more than you earned by working in years, and you haven't reported that on your taxes - you may very well find yourself in jail. As to your original question - why on earth would you have a corporation for gambling? Or LLC... Why? What's the liability that you want to shield yourself of? It's your money that you're risking, and the risk is that you lose it, how is LLC or Corp going to help you in any way? Gambling winnings are reported as miscellaneous income (whether you're professional or just got lucky once with a slot machine - no matter), and if you're a pro (and it sounds like that since you're doing it systematically and in order to make profits), then yes, you pay SE taxes on it. Whoever told you anything else told you to break the law. Which you did, unfortunately.",
"title": ""
},
{
"docid": "8c6959426bd997ccef966bf5cc436b54",
"text": "You need to fill out form 8606. It's not taxable, but you still need to report it",
"title": ""
}
] |
fiqa
|
81d077cf42f8639e1d76f917fdb77080
|
What standards should I expect of my CPA when an error was made?
|
[
{
"docid": "d5a7e6714172567de547d1bb7a74903d",
"text": "\"What is the right way to handle this? Did you check the forms? Did the form state $0 tax due on the FTB LLC/Corp form (I'm guessing you operate as LLC/Corp, since you're dealing with the Franchise Tax)? The responsibility is ultimately yours. You should cross check all the numbers and verify that they're correct. That said, if the CPA filled the forms incorrectly based on your correct data - then she made a mistake and can be held liable. CPA filing forms from a jurisdiction on the other end of the country without proper research and knowledge may be held negligent if she made a grave mistake. You can file a law suit against the CPA (which will probably trigger her E&O insurance carrier who'll try to settle if there's a good chance for your lawsuit to not be thrown away outright), or complain to the State regulatory agency overseeing CPAs in the State of her license. Or both. Am I wrong for expecting the CPA should have properly filled out and filed my taxes? No, but it doesn't shift the responsibility from you. How can I find out if the CPA has missed anything else? Same as with doctors and lawyers - get a second opinion. Preferably from a CPA licensed in California. You and only you are responsible for your taxes. You may try to pin the penalties and interest on the CPA if she really made a mistake. California is notorious for very high LLC/Corp franchise tax (cost of registering to do business in the State). It's $800 a year. You should have read the forms and the instructions carefully, it is very prominent. It is also very well discussed all over the Internet, any search engine would pop it up for you with a simple \"\"California Franchise Tax for LLC/Corp\"\" search. CA FTB is also very aggressive in assessing and collecting the fee, and the rules of establishing nexus in CA are very broad. From your description it sounds like you were liable for the Franchise tax in CA, since you had a storage facility in CA. You may also be liable for sales taxes for that period.\"",
"title": ""
}
] |
[
{
"docid": "5f76893321e950109c4e9f146204b9ba",
"text": "\"Following up on this, here is what I did. First, I called my benefits provider. They had documentation of my election over the phone, which then allowed them to retroactively fix the problem. Had they not had this documentation, I would have been out of luck. Second, the next step for \"\"fixing\"\" occurred when I received my W-2 for this position. This W-2 mistakenly showed the amount for my medical FSA in box-10 of my W-2 as the same dependent care FSA. This requires calling/emailing my benefits and payroll department to get an updated W-2...\"",
"title": ""
},
{
"docid": "3965ebcc47d710ff6853b5136b318382",
"text": "\"The seriousness of your situation depends on whether your girlfriend was owed a refund for each tax return she failed to file, or whether she owed additional money. If she owed money on one or more of the tax returns she failed to file, stop! It is time to consult a lawyer. At the very least, you need to contact an accountant who specialises in this sort of thing. She will owe interest and penalties, and may be liable for criminal prosecution. There are options available and lawyers who specialise in this sort of thing (e.g. this one, from a simple google search). If she is in this position, you need professional help and you need it soon, so you can make a voluntary disclosure and head off criminal prosecution. Assuming the taxes are fairly simple, you are likely looking at a few thousand dollars, but probably less than $7,500, for professional help. There will be substantial penalties assessed as well, for any taxes owing. If you wait until the CRA starts proceedings, you are most likely looking at $10,000 to $50,000, assuming the matter is not too complicated, and would be facing the possibility of a jail term not exceeding five years. If she was due a refund on every single one of the tax returns she failed to file, or at least if she did not owe additional money, you are probably in a situation you can deal with yourself. She will want to file all of the tax returns as soon as possible, but will not be assessed a penalty. I have personally filed taxes several months late a number of times, when I was owed a refund. You may still want to consider professional help, but it is probably not necessary. Under no circumstances should she allow her father near her finances again, ever. You should also be careful to trust any responses to this question, including my response, because we are unlikely to be professional accountants (I certainly am not). You are well outside the abilities of an H&R Block \"\"accountant\"\" in this matter and need a real certified accountant and/or a lawyer who specialises in Failure To File cases.\"",
"title": ""
},
{
"docid": "2417064daad1eb4d22a25329fc0f75b1",
"text": "\"There's no such thing as \"\"leniency\"\" when enforcing the law. Not knowing the law, as you have probably heard, is not a valid legal defence. Tax law is a law like any other. That said, some penalties and fines can be abated if the error was done in good faith and due to a reasonable cause. First time penalties can be abated in many cases assuming you're compliant otherwise (for example - first time late filing penalty can be abated if you're compliant in the last 5 years. Not many people know about that.). Examples for a reasonable cause (from the IRS IRM 20.1.1): Reliance on the advice of a tax advisor generally relates to the reasonable cause exception in IRC 6664(c) for the accuracy-related penalty under IRC 6662. See IRM 20.1.5, Return Related Penalties, and If the taxpayer does not meet the criteria for penalty relief under IRC 6404(f), the taxpayer may qualify for other penalty relief. For instance, taxpayers who fail to meet all of the IRC 6404(f) criteria may still qualify for relief under reasonable cause if the IRS determines that the taxpayer exercised ordinary business care and prudence in relying on the IRS’s written advice. IRM 20.1.1.3.2.2.5 - Erroneous Advice or Reliance. Treas. Reg. 1.6664–4(c). There are more. IRM is the \"\"Internal Revenue Manual\"\" - the book of policies for the IRS agents. Of course, you should seek a professional advice when you're non-compliant and want to ask for abatement and become compliant again. Talk to a CPA/EA licensed in your state.\"",
"title": ""
},
{
"docid": "a90b2c547231d7b6d4d6c0de1b0c386a",
"text": "Thank you for responding. This all happened Friday night and I've been doing the job alone this weekend to offset the cost. I do very itemized invoices and planned on showing the difference there but, honestly, wasn't wanting to verbalize it to the client out of embarrassment. I knew it would have been an unprofessional move not to say anything and, admittedly, hoped I could find a way around it. But, you're right and I'll go ahead and do both. Note: 10 years I've been doing this and I feel like my 12 year old self putting my terrible report card on the dining table for my mom to see and sign as I head out the door for school:(",
"title": ""
},
{
"docid": "3dce882e82e5f3b928bbb0c449ec9731",
"text": "A true story, from a friend's company, one of the largest electronics company in the world. The company decided that if the difference is less than $25,000, then ignore it. And went on to fire many people in accounting. Six months later on, one old-timer found many many reports that show less than $25,000 difference. Do you understand what happened here?",
"title": ""
},
{
"docid": "a1b16d5a911ace0143f31e7b027b8af5",
"text": "I believe that! Their system is meant to cause defaults. They are so disorganized and unhelpful. On three separate files for the same client, I dealt with lost documents and forced start over on the processes of approvals because they said documents weren't received in time, even though we had confirmations. I think if Congress could sit through a customer service call or process for some person trying to do a loan modification or get short sale approval, they would instantly call a senate investigation into their practices. I don't know how they can not be aware of the outright fuckery that goes on with their company.",
"title": ""
},
{
"docid": "7d12a52d03a621e3d9f0f92a4ca323b5",
"text": "Your CPA doesn't need to file anything, so don't worry about him being sidetracked. You are the one doing the filing. Since the amended returns have to be filed on paper, you'll actually go and mail a package to the IRS (each return in a separate envelope). The reason the CPA suggests to file the amended returns after the current one, is to ensure the NOL is registered in the system before the amended returns are processed. The IRS doesn't have to automatically accept the amended returns, and if there's no NOL on the current year they may just bounce the amended returns back to you. Keep in mind that since you haven't filed your return by the due date (including extensions), you're now unable to forego the carry-back. I don't know if you discussed this with your CPA, but you're allowed, if you chose so, to not apply the NOL to prior years, and instead to apply it forward for the next 20 years (or until it runs out). Depending on your income pattern, that might have been something you could have considered, but you can only chose this if you file a statement before the due date (with extensions), which is now passed.",
"title": ""
},
{
"docid": "39c82585353ac6f469c103758f56eea7",
"text": "Well, you're business/accounting acumen is nothing to brag about and your character is still out for judgment, though your insistence on trying to make this point despite being wrong is sort of working against you. Other than that, I don't know anything else about you to make that kind of assessment. Though you are tenacious, I'll give you that. You keep arguing with me despite saying you were done with this. So that could possibly be a positive character trait.",
"title": ""
},
{
"docid": "1ab01f6b877e2fecbd87017f51f0d487",
"text": "She filed for 0 withholdings in her W4, so my (unprofessional) guess was that she'd be owed money, and therefore the IRS wouldn't care much if she didn't file her taxes.† Maybe, but doesn't she want that money back? Is she at as much risk as any other individual of being audited and penalized to the same degree if she skips filing her taxes? Audited and penalized are not the same. She's at the same risk of being audited, and even slightly higher since the IRS got reports of her wages, but didn't get the matching report from her. They may want to ask why. But it doesn't mean she's going to be penalized for anything. Being audited doesn't mean you did something wrong. Or does the IRS tend to overlook such individuals. The IRS might want to overlook because they're the ones owning money. She cannot get a refund without filing a tax return. She'd file her taxes today if she could, but the worry is that time's running out Filing an extension is free and it postpones the deadline to file till OCTOBER!",
"title": ""
},
{
"docid": "46c6a641f9ed0bbdd4fd83deed88d97c",
"text": "I just got hit with the late payment penalty due to a bug in the H&R Block tax program. The underpayment was only $2 and the penalty was a whopping 1 cent. The letter that informed me of the error also said that they did not consider the $2.01 worth collecting, the amount owed had been zeroed.",
"title": ""
},
{
"docid": "bb9b0601d0cde27bd7a462e47b298ef0",
"text": "\"I was being a bit facetious, but in general the public accounting profession should be dedicated to the public good. Any scope restrictions placed on the auditors while performing the engagement should immediately be reported by the staff to accounting management. Basically any shady acts of the client should be noted in the work papers and reported. There's a whole bunch of rules to tell an audit staff accountant when to go above their own seniors/management if there is collusion or fraud. Scope restrictions, ie. \"\"Hey you can't go in the warehouse to count inventory\"\", depending on the severity could qualify the audit report, disclaimer of an opinion, or withdrawal from the engagement. Therefore it's the auditors responsibility to refuse to provide a false audit report to the public or otherwise users of the financial statements. They should never act in the manner most profitable for the firm when faced with an ethical dilemma. Then there's practicality and most audit partners will do anything it takes to keep their largest clients. On the same coin, those clients want a clean bill of reference for their creditors. Long standing relationships are most vulnerable to letting things slide in favor of the client. There are thousands of companies and even ones publicly traded. The government would have to grow exponentially to actually audit all of these companies. That'll never happen, they have no idea where their own money goes as long as the revenues cover the expenditures.\"",
"title": ""
},
{
"docid": "51a06b58ceff505de3b8ec804f3a9604",
"text": "The point of a chargeback is to force merchants to do the paperwork. Many merchants don't, and are easy targets for chargebacks, even when they have, in fact, provided the good or service. You used a tax prep service. They may have given you poor (technical) advice, but such firms are usually very good about doing the paperwork. That's why you lost.",
"title": ""
},
{
"docid": "0e099e701dd6df16a91d3ffbb155fbb2",
"text": "I would behave exactly as I would expect it from others. If you were the one giving away too many points by accident you would be thankful if somebody notifies you about this error. You can write a letter or call them. I would not use the points (of course only not use the points which are added in error). Other options are possible but I would advise against them. It's just about fair play and the points are clearly not yours.",
"title": ""
},
{
"docid": "a7e2a606c97bfc5cfbd40ad6d732d447",
"text": "Generally, report your $150,000. If/when the the tax collectors notice the anomaly, they'll attempt to contact you to remedy it. I can't speak for Canada, but in the US, it's pretty orderly. The IRS requests additional information or proof and only open it up into a full blown audit if the suspect wrongdoing. In your case, you could show a business agreement detailing the revenue split proving you correctly reported. This is only for your consideration. I strongly recommending finding and keeping a professional tax advisor.",
"title": ""
},
{
"docid": "4577731b949a0dece0a8ed46a0bc96d8",
"text": "\"I recently moved out from my parents place, after having built up sufficient funds, and gone through these questions myself. I live near Louisville, KY which has a significant effect on my income, cost of living, and cost of housing. Factor that into your decisions. To answer your questions in order: When do I know that I'm financially stable to move out? When you have enough money set aside for all projected expenses for 3-6 months and an emergency fund of 4-10K, depending on how large a safety net you want or need. Note that part of the reason for the emergency fund is as a buffer for the things you won't realize you need until you move out, such as pots or chairs. It also covers things being more expensive than anticipated. Should I wait until both my emergency fund is at least 6 months of pay and my loans in my parents' names is paid off (to free up money)? 6 months of pay is not a good measuring stick. Use months of expenses instead. In general, student loans are a small enough cost per month that you just need to factor them into your costs. When should I factor in the newer car investment? How much should I have set aside for the car? Do the car while you are living at home. This allows you to put more than the minimum payment down each month, and you can get ahead. That looks good on your credit, and allows refinancing later for a lower minimum payment when you move out. Finally, it gives you a \"\"sense\"\" of the monthly cost while you still have leeway to adjust things. Depending on new/used status of the car, set aside around 3-5K for a down payment. That gives you a decent rate, without too much haggling trouble. Should I get an apartment for a couple years before looking for my own house? Not unless you want the flexibility of an apartment. In general, living at home is cheaper. If you intend to eventually buy property in the same area, an apartment is throwing money away. If you want to move every few years, an apartment can, depending on the lease, give you that. How much should I set aside for either investment (apartment vs house)? 10-20K for a down payment, if you live around Louisville, KY. Be very choosy about the price of your house and this gives you the best of everything. The biggest mistake you can make is trying to get into a place too \"\"early\"\". Banks pay attention to the down payment for a good reason. It indicates commitment, care, and an ability to go the distance. In general, a mortgage is 30 years. You won't pay it off for a long time, so plan for that. Is there anything else I should be doing/taking advantage of with my money during this \"\"living at home\"\" period before I finally leave the nest? If there is something you want, now's the time to get it. You can make snap purchases on furniture/motorcycles/games and not hurt yourself. Take vacations, since there is room in the budget. If you've thought about moving to a different state for work, travel there for a weekend/week and see if you even like the place. Look for deals on things you'll need when you move out. Utensils, towels, brooms, furniture, and so forth can be bought cheaply, and you can get quality, but it takes time to find these deals. Pick up activities with monthly expenses. Boxing, dancing, gym memberships, hackerspaces and so forth become much more difficult to fit into the budget later. They also give you a better credit rating for a recurring expense, and allow you to get a \"\"feel\"\" for how things like a monthly utility bill will work. Finally, get involved in various investments. A 401k is only the start, so look at penny stocks, indexed funds, ETFs or other things to diversify with. Check out local businesses, or start something on the side. Experiment, and have fun.\"",
"title": ""
}
] |
fiqa
|
8de50b0332a7dc6414e9af298097fb8d
|
Self-employed individual 401k self, match, and profit sharing contribution limits?
|
[
{
"docid": "48200c2619731735e1decc0ae5936cd2",
"text": "\"It seems I can make contributions as employee-elective, employer match, or profit sharing; yet they all end up in the same 401k from my money since I'm both the employer and employee in this situation. Correct. What does this mean for my allowed limits for each of the 3 types of contributions? Are all 3 types deductible? \"\"Deductible\"\"? Nothing is deductible. First you need to calculate your \"\"compensation\"\". According to the IRS, it is this: compensation is your “earned income,” which is defined as net earnings from self-employment after deducting both: So assuming (numbers for example, not real numbers) your business netted $30, and $500 is the SE tax (half). You contributed $17.5 (max) for yourself. Your compensation is thus 30-17.5-0.5=12. Your business can contribute up to 25% of that on your behalf, i.e.: $4K. Total that you can contribute in such a scenario is $21.5K. Whatever is contributed to a regular 401k is deferred, i.e.: excluded from income for the current year and taxed when you withdraw it from 401k (not \"\"deducted\"\" - deferred).\"",
"title": ""
},
{
"docid": "ed589d10853e24ff7f9704b582eb7a33",
"text": "I can only address this part of it: For instance with a 10k net income, 9293 is the limit for 401k from employee. How is this calculated? I believe this limit is total for all sources too, which I'm confused about. How it's calculated is that when you are self-employed you also pay the employer portion of the FICA taxes. This comes off above the line and is not considered income. The 401k contribution limit takes this into account.",
"title": ""
}
] |
[
{
"docid": "08272c221245feb74c609aa96ec5c5e3",
"text": "I've never seen anything in any IRS publication that placed limits on the balance of a 401K, only on what you can contribute (and defer from taxes) each year. The way the IRS 'gets theirs' as it were is on the taxes you have to pay (for a traditional IRA anyway) which would not be insubstantial when you start to figure out the required minimum distribution if the balance was 14Mill.. You're required to take out enough to in theory run the thing out of money by your life expectancy.. The IRS has tables for this stuff to give you the exact numbers, but for the sake of a simple example, their number for someone age 70 (single or with a spouse who is not more than 10 years younger) is 27.4.. If we round that to 28 to make the math nice, then you would be forced to withdraw and pay taxes on around $500,000 per year. (So there would be a hefty amount of taxes to be paid out for sure). So a lot of that $500K a year going to pay taxes on your distributions, but then, considering you only contributed 660,000 pre-tax dollars in the first place, what a wonderful problem to have to deal with. Oh don't throw me in THAT briar patch mr fox!",
"title": ""
},
{
"docid": "8cf14e12429232610c2905eabc59a18d",
"text": "You can only contribute up to 5% of your salary? Odd. Usually 401(k) contributions are limited to some dollar amount in the vicinity of $15,000 or so a year. Normal retirement guidelines suggest that putting away 10-15% of your salary is enough that you probably won't need to worry much when you retire. 5% isn't likely to be enough, employer match or no. I'd try to contribute 10-15% of my salary. I think you're reading the rules wrong. I'm almost certain. It's definitely worth checking. If you're not, you should seriously consider supplementing this saving with a Roth IRA or just an after-tax account. So. If you're with Fidelity and don't know what to do, look for a target date fund with a date near your retirement (e.g. Target Retirement 2040) and put 100% in there until you have a better idea of what going on. All Fidelity funds have pretty miserable expense ratios, even their token S&P500 index fund from another provider, so you might as let them do some leg work and pick your asset allocation for you. Alternatively, look for the Fidelity retirement planner tools on their website to suggest an asset allocation. As a (very rough) rule of thumb, as you're saving for retirement you'll want to have N% of your portfolio in bonds and the rest in stocks, where N is your age in years. Your stocks should probably be split about 70% US and 30% rest-of-world, give or take, and your US stocks should be split about 64% large-cap, 28% mid-cap and 8% small-cap (that's basically how the US stock market is split).",
"title": ""
},
{
"docid": "b36177c86a000963a421bfef2ab82829",
"text": "I use the self-directed option for the 457b plan at my job, which basically allows me to invest in any mutual fund or ETF. We get Schwab as a broker, so the commissions are reasonable. Personally, I think it's great, because some of the funds offered by the core plan are limited. Generally, the trustees of your plan are going to limit your investment options, as participants generally make poor investment choices (even within the limited options available in a 401k) and may sue the employer after losing their savings. If I was a decision-maker in this area, there is no way I would ever sign off to allowing employees to mess around with options.",
"title": ""
},
{
"docid": "6d2575931e7d2b1704a1830353b1842d",
"text": "\"Unfortunately, I missed most of segment and I didn't get to understand the Why? To begin with, Cramer is an entertainer and his business is pushing stocks. If you put money into mutual funds (which most 401k plans limit your investments to), then you are not purchasing his product. Also, many 401k plans have limited selections of funds, and many of those funds are not good performers. While his stock-picking track record is much better than mine, his isn't that great. He does point out that there are a lot of fees (mostly hidden) in 401k accounts. If you read your company's 5500 filing (especialy Schedule A), you can determine just how much your plan administrators are paying themselves. If paying excessive fees is your concern, then you should be rolling over your 401k into your IRA when you quit (or the employer-match vests, which ever is later). Finally, Cramer thinks that most of his audience will max out their IRA contributions and have only a little bit left for their 401k. I'm most definately \"\"not most people\"\" as I'm maxing out both my 401k and IRA contributions.\"",
"title": ""
},
{
"docid": "d6bc92aee3c062df68dba5a5407131de",
"text": "My understanding is that to make the $18,000 elective deferral in this case, you need to pay yourself at least $18,000. There will be some tax on that for social security and Medicare, so you'll actually need to pay yourself a bit more to cover that too. The employer contribution is limited to 25% of your total compensation. The $18,000 above counts, but if you want to max out on the employer side, you'll need to pay yourself $140,000 salary since 25% of $140,000 is the $35,000 that you want to put into the 401k from the employer side. There are some examples from the IRS here that may help: https://www.irs.gov/retirement-plans/one-participant-401-k-plans I know that you're not a one-participant plan, but some of the examples may help anyway since they are not all specific to one-participant plans.",
"title": ""
},
{
"docid": "97346c784e8fcb99281f68510260ad97",
"text": "\"Just like all employee benefits there is a focus on removing or limiting owners of businesses' ability to abuse tax preferences under the guise of an employee benefit. As you point out there is an overall plan maximum 401(k) for employer contributions and match contributions. There is a nondiscrimination test for FSA programs (there is also a nondiscrimination test for medical plans under sections 125 and 105(h)). Employer contributions are counted toward the total of HSA contributions. Why an HSA has a different maximum arrangement than 401(k) is anyone's guess. But the purpose of the limit is to prevent owners of companies from setting up plans that do little more than funnel tax free funds to themselves. An owner/employee could pay themselves a wage, contribute the maximum, then have the \"\"employer\"\" also match the maximum, so there are limits in place.\"",
"title": ""
},
{
"docid": "d6456689474126d52bc57b6a42210921",
"text": "Please note that if you are self employed, then the profit sharing limit for both the SEP and Solo 401(k) is 20% of compensation, not 25%. There is no need for a SEP-IRA in this case. In addition to the 401(k) at work, you have a solo-401(k) for your consulting business. You can contribute $18,000 on the employee side across the two 401(k) plans however you wish. You can also contribute profit sharing up to 20% of compensation in your solo 401(k) plan. However, the profit sharing limit aggregates across all plans for your consulting business. If you max that out in your solo 401(k), then you cannot contribute to the SEP IRA. In other words, the solo 401(k) dominates the SEP IRA in terms of contributions and shares a limit on the profit-sharing contribution. If you have a solo 401(k), there is never a reason to have a SEP for the same company. Example reference: Can I Contribute to a solo 401(k) and SEP for the same company?",
"title": ""
},
{
"docid": "deac70a7a01862c8cbe9d9f23205f685",
"text": "A Solo 401k plan requires self-employment income; you cannot put wages into it.",
"title": ""
},
{
"docid": "7b2e8432ffa0c2ebae1abc87008fc1a2",
"text": "Ok, so if I have a 401k, when does it become mine? When I retire and start taking distributions from it? At that point, is the only thing I own what I actually take out or is the full balance mine? Who owns the 401k when I'm contributing? This is just raising more questions.",
"title": ""
},
{
"docid": "87152821b6fc6caa36fd1df3dcc0b69c",
"text": "The 1099 income is subject to the same total limit on IRA deposits. If you are looking to shelter more than $5500, you might consider a Solo 401(k). It offers higher limits and other potential advantages.",
"title": ""
},
{
"docid": "6f7f146420a8d950612905256935cb4b",
"text": "2%? I would put in just what it takes to share in the profit sharing, not a dime more. My S&P fund cost is .02% (edited, as it dropped to .02 since original post), 1/100 of the cost of most funds you list. Doesn't take too many years of this fee to negate the potential tax savings, and not many more to make this a real loser.",
"title": ""
},
{
"docid": "e23eda4b8b64a62749c8eb12447ab724",
"text": "\"Generally if you're a sole S-Corp employee - it is hard to explain how the S-Corp earned more money than your work is worth. So it is reasonable that all the S-Corp profits would be pouring into your salary. Especially when the amounts are below the FICA SS limits when separating salary and distributions are a clear sign of FICA tax evasion. So while it is hard to say if you're going to be subject to audit, my bet is that if you are - the IRS will claim that you underpaid yourself. One of the more recent cases dealing with this issue is Watson v Commissioner. In this case, Watson (through his S-Corp which he solely owned) received distributions from a company in the amounts of ~400K. He drew 24K as salary, and the rest as distributions. The IRS forced re-characterizing distributions into salary up to 93K (the then-SS portion of the FICA limit), and the courts affirmed. Worth noting, that Watson didn't do all the work himself, and that was the reason that some of the income was allowed to be considered distribution. That wouldn't hold in a case where the sole shareholder was the only revenue producer, and that is exactly my point. I feel that it is important to add another paragraph about Nolo, newspaper articles, and charlatans on the Internet. YOU CANNOT RELY ON THEM. You cannot defend your position against IRS by saying \"\"But the article on Nolo said I can not pay SE taxes on my earnings!\"\", you cannot say \"\"Some guy called littleadv lost an argument with some other guy called Ben Miller because Ben Miller was saying what everyone wants to hear\"\", and you can definitely not say \"\"But I don't want to pay taxes!\"\". There's law, there are legal precedents. When some guy on the Internet tells you exactly what you want to hear - beware. Many times when it is too good to be true - it is in fact not true. Many these articles are written by people who are interested in clients/business. By the time you get to them - you're already in deep trouble and will pay them to fix it. They don't care that their own \"\"advice\"\" got you into that trouble, because it is always written in generic enough terms that they can say \"\"Oh, but it doesn't apply to your specific situation\"\". That's the main problem with these free advice - they are worth exactly what you paid for them. When you actually pay your CPA/Attorney - they'll have to take responsibility over their advice. Then suddenly they become cautious. Suddenly they start mentioning precedents and rulings telling you to not do things. Or not, and try and play the audit roulette, but these types are long gone when you get caught.\"",
"title": ""
},
{
"docid": "6c7ca691ed2d32e8795ff763be3063fb",
"text": "What is the question? Are you just trying to confirm that for self-employed, a Solo 401(k) is flexible, and a great tool to level out your tax rates? Sure. A W2 employee can turn on and off his 401(k) deduction any time, and bump the holding on each check as high as 75% in some cases. So in a tight stretch, I'd save to the match, but later on, top off the maximum for the year. To the points you listed - Your observation is interesting, but a bit long for what you seem to be asking. Keep in mind, there are 2 great features that you don't mention - a Roth Solo 401(k) flavor which offers even more flexibility for variable income, and loan provisions, up to $50,000 available to borrow from the account. My fellow blogger The Financial Buff offered an article Solo 401k Providers and Their Scope of Services that did a great job addressing this.",
"title": ""
},
{
"docid": "6087a9d2467ed3970de52e8333b8321a",
"text": "On re-reading the question, I see that you're self-employed, decent income, but only have an IRA. Since the crux of the question appears to be related to your wanting to put aside more money, I suggest you open a Solo 401(k) account. The current year limit is $17,000, and you can still have an IRA if you wish.",
"title": ""
},
{
"docid": "d0635c74f875d15a57b2671500a2f318",
"text": "Most corporations have a limit on the number of shares that they can issue, which is written into their corporate charter. They usually sell a number that is fewer than the maximum authorized number so that they have a reserve for secondary offerings, employee incentives, etc. In a scrip dividend, the company is distributing authorized shares that were not previously issued. This reduces the number of shares that it has to sell in the future to raise capital, so it reduces the assets of the company. In a split, every share (including the authorized shares that haven't been distributed) are divided. This results in more total shares (which then trade at a price that's roughly proportional to the split), but it does not reduce the assets of the company.",
"title": ""
}
] |
fiqa
|
da0c2d02397c7723c95192308a4c95b4
|
From ACH direct debit to Prepaid card?
|
[
{
"docid": "9e3ad626fb4216b52b8186349ee49440",
"text": "This would be exactly the sort of product that a thief would want, if they had got ahold of some account numbers and wanted to steal the money from those accounts, in a way that would let them spend it as conveniently as possible. That should explain why I think it's unlikely that any such product exists.",
"title": ""
}
] |
[
{
"docid": "c8cd652bd2f53b2835c5439fdddf5dad",
"text": "I contacted Virgin Money to ask if the prepaid card you mentioned offers a Swift/BIC code, and they gave me this response: We do not have a Swift or BIC number for the Virgin Prepaid Card. You are unable to transfer funds from the Prepaid Card to another bank but you can set up a bank transfer to the Prepaid Card. Once you receive your card you can log onto your online account and you will have a form you can print off. On the form you will have an account number, sort code and a unique reference number for your bank to set up the transfer. This may work for your purposes, or it may not. If you want more information about that specific card, your best bet is to contact them and ask any other specific questions you have. The same strategy should work for any prepaid card company. Just call or email them, describe your situation, and ask if their card will work.",
"title": ""
},
{
"docid": "7644dd12efd99f9946a2a08c0327b5e1",
"text": "Automated Clearing House transactions are used in the US for direct deposit of pay checks and direct debit of many payments for accounts such as mortgages, credit cards, car loans, insurance premiums, etc. The reason they take one or more business days to clear is that the transactions are accumulated by each processor in the network during the day and processed as a batch at the end of each business day. The ACH network processes 20+ billion transactions per year worth $40 trillion, (estimates based on 2012 figures).",
"title": ""
},
{
"docid": "bb5b5d4ab25c5fd56512c2a407edd05e",
"text": "Typically, a direct debit is set up by the company who will be receiving the money, not by you or your bank. So you need to contact your credit card company, and ask them to set up the direct debit.",
"title": ""
},
{
"docid": "202dc5cefb400162d5f5ac4b27711e5d",
"text": "You cannot directly transfer money from your Bank Account. You can use Debit Card to make payments to your paypal account. Just enter the details of the payment and amount, it would make the necessary deduction from your debit card. Indian regulations do not allow you to store value in your paypal account. This credits have to be transfered to a Bank account.",
"title": ""
},
{
"docid": "32062a8ccc2d04e06e6d0bc000eab399",
"text": "If your old bank has online billpay, you might be able to either use that to send a check to yourself, or do an ACH transfer directly into your new account.",
"title": ""
},
{
"docid": "50b54ee0f2d50fba4547d1c2c497b452",
"text": "A debit card takes the funds right from your account. There's no 'credit' issued along the way. The credit card facilitates a short term loan. If you are a pay-in-full customer, as I am, there's a cost to lend the money, but we're not paying it. It's part of the fee charged to the merchant. Thus the higher transaction cost.",
"title": ""
},
{
"docid": "1b5543fc7de511e560dc5d64047c671a",
"text": "1% is below interchange, so you either 1) take mostly debit, 2) have someone willing to literally lose money paying the banks for you, or 3) have hidden/padded fees somewhere else. Edit: Or 4) Have customers pay the fees through surcharging.",
"title": ""
},
{
"docid": "7c95752656e288fe9a71376c50558312",
"text": "In case the other ATM is visa enabled, many bank allows transfer to visa card through their ATM. More details about your banks are required for a very specific answer. I suppose both banks are Indian Bank, which bank ?",
"title": ""
},
{
"docid": "3c9b27a19b0086ba941085e3b3ad0c19",
"text": "\"A couple of thoughts and experiences (Germany/Italy): First of all, I recommend talking to the Belgian bank (and possibly to a Dutch bank of your choice). I have similar conditions for my German bank accounts. But even though they talk about it as salary account (\"\"Gehaltskonto\"\") all they really ask for is a monthly inflow of more than xxxx € - which can be satisfied with an automatic direct transfer (I have some money automatically circulating for this reason which \"\"earns\"\" about 4% p.a. by saving fees). In that case it may be a feasible way to have a Belgian and a Dutch bank account and set up some money circulation. Experiences working in Italy (some years ago, SEPA payments were kind of new and the debits weren't implemented then): My guess with your service providers is that they are allowed to offer you contracts that are bound to rather arbitrary payment conditions. After all, you probably can also get a prepaid phone or a contract with a bill that you can then pay by wire transfer - however, AFAIK they are allowed to offer discounts/ask fees for different payment methods. Just like there is no law that forces the store around your corner to accept credit cards or even large EUR denominations as long as they tell you so beforehand. AFAIK, there is EU regulation saying your bank isn't allowed to charge you more for wire transger to foreign country within the SEPA zone than a national wire transfer.\"",
"title": ""
},
{
"docid": "4a5e939bbdb2af0a83c4b7ba97595017",
"text": "Unfortunately not. Even if the credit card balance is positive (i.e. customer has overpaid the credit card account), you cannot withdraw cash (for free) - as any cash withdrawal is subject to 12.9% interest - even if repaid in full at the end of the month! The clarity credit card is one of the best cards for overseas spending, as its load free (no fees for purchases abroad) and it gives near perfect exchange rates. If your balance is positive, you start at £0, then fund that credit card account from your bank account £500. You can then spend on your credit card, and when your next bill is due at the end of the month - they will use that extra £500 sitting in your account first, and ask for the remainder from you. i.e. scenario1: scenario 2: It is better in my opinion, to set up a direct debit to always clear out the full amount on your credit card. That way, you have cash in your bank account for emergencies (getting £500 back from a credit card will take a few days to process as opposed to having the ability to withdraw cash from the cashpoint 24/7). And once the direct debit is paid automatically at the end of the month, there are no fees - voila your credit card is almost like a debit card, spend on it when you like, it gets paid automatically, no hassle, no worries. This approach does take a careful mindset though, as you need to know your credit limits and also you need to ensure your bank account has enough to pay off the direct debit at the end of the month. Otherwise those darn fees will get you (and hurt your credit rating). For cash spending, you will want to either take cash with you (check online here for best rates & get the money well in advance to avoid fees). Also in some countries the exchange rate is better there, than in the UK, google will help you here. If you dont like the idea of carrying large sums of cash with you can use a prepaid card like CaxtonFX, which is one of the better ones out there. The other well known ones are FairFX and Travelex Cash Passport.",
"title": ""
},
{
"docid": "0fcc289f55e8fd85bb987f6f218ff4fe",
"text": "If you are solvent enough, and organised enough to pay your credit card bill in full each month, then use the credit card. There are no disadvantages and several plus points, already mentioned. Use the debit card when you would be surcharged for using the credit card, or where you can negotiate a discount for not subjecting the vendor to credit card commission.",
"title": ""
},
{
"docid": "79adfd0418bdf8de7786170858e74080",
"text": "Call Wells Fargo or go to a branch. Tell them what you're trying to accomplish, not the vehicle you think you should use to get there. Don't tell them you want to ACH DEBIT from YOUR ACCOUNT of YOUR MONEY. Tell them you apparently need a paperless transaction sent to this and that account at this and that bank. See if they offer a solution.",
"title": ""
},
{
"docid": "931a71617c6cce67916cc5fe4ce1592a",
"text": "Debit cards are the dumbest development ever. I now have a piece of plastic that allows any yahoo to cause me to bounce my mortgage. Great. Throw away the debit card. Use a credit card and exercise some self control. Take out a sufficient amount of cash to cover your weekly incidental expenses under $50. If you want something that costs more than $50, wait a week and use the credit card. You'll find that using cash at places like the convenience store or gas station will cause you to not spend $3 for a slim jim, lotto ticket, donut or other dumb and unnecessary item.",
"title": ""
},
{
"docid": "c821cbc5791e732fc523618aae7a12f4",
"text": "Credit cards always charge for withdrawing cash, because if they didn't then you could have an indefinite loan and pay no interest simply by withdrawing enough cash each month to pay off the previous month's bill before the due date. It's nothing to do with using an ATM -- they'll charge you for getting a cash advance over the counter as well.",
"title": ""
},
{
"docid": "5759dc301691bcfa16fe5a327d1ce25c",
"text": "\"It sounds like what you are looking for are sites that offer pre-paid debit cards as rewards. A number of survey/get-paid-to sites do offer these as a potential reward; they are more irritating than having the money in a bank account or paypal balance, as they expire if not used within some amount of time, and generally come with restrictions on what you can use them on (they work like credit cards, but the site providing the card can reject your request if it doesn't like the site you're trying to pay.). Plus, you can only use a single debit card per purchase, so if you have two $20 prepaid cards, you can't use them both to make a $40 dollar purchase. Still, this does satisfy your requirements, assuming the game you want to transfer to and the provider of the prepaid card you're being rewarded with are willing to work together. You can use SurveyPolice to search for sites that offer the type of reward you want - filtering by offered reward type is an option under their \"\"pick-a-perk\"\" page. Though it's likely many of those sites also require you to be at least 18 as well, as that's a pretty common restriction - you'll have to verify that part yourself. For that matter, you would want to check age restrictions on the sites those sites partner with to offer prepaid cards, as well.\"",
"title": ""
}
] |
fiqa
|
cf0851c0a2d53a40947d7daa73ffaaee
|
How to avoid maintenance fee when balance drops below minimum?
|
[
{
"docid": "d0a0cf5385af2ce94620b5ad4c36a38c",
"text": "Looks like you have three options: Outside of this you might need to look for a different type of account. Hope that helps.",
"title": ""
}
] |
[
{
"docid": "f52db782d7f454a32f753ee772bfb8bb",
"text": "Paying weekly to be able to have maneuver room under your credit limit is a way to handle low credit limits. Doing it to boost your credit score when you have no immediate need for a loan is wasting energy. A few months in advance of buying a car or house, you can start to worry about your utilization rate. When you apply for the loan they will pull your credit file, and that will lock in your utilization rates. Then make sure that you pay the balance quickly, and if you need to make a big purchase pay the bill before the account closes for the month. Keep in mind that if you pay the balance every month the highest utilization rate will occur the day the payment is due. This is because it not only has all the purchases from the previous bill, but all the purchases you have made since that bill closed. For example if you have a credit limit of 10K and you spend 2K a month on the credit card, on the day the payment is due it is not unusual to see the total owed to be above 3K. If they pulled your file on that day, your utilization rate would appear to be above 30%.",
"title": ""
},
{
"docid": "1dd16c51a192bd86dd1e305c0d2e9542",
"text": "The answer is the next sentence from the Wikipedia article: The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. Your previous question on credit card interest rates quotes the sentence after this. You have to review what the agreement for your card says. Also keep in mind the bank wants to make money from you. The more interest and fees they collect, they better they like you. If enough card holders adjust their behavior, to minimize interest and fees; the bank will then adjust the credit card agreement to get money a different way. Yes, you are right it would seem fair to only charge interest on the smaller amount, but that doesn't allow the credit card issuer to maximize profits.",
"title": ""
},
{
"docid": "afce39b90196e467c1051a1aebd1ea6b",
"text": "The other answers in this thread do a fine job of explaining the economic situation that banks are in. In addition to that information, I would like to point out that it is not hard to avoid a monthly fee for Canadian bank accounts. Usually this involves keeping a minimum balance of a few thousand dollars at all times. Actual examples (as of Dec 2016) for the lowest tier chequing accounts. Includes information on the minimum balance to waive the monthly fee, and the monthly fee otherwise:",
"title": ""
},
{
"docid": "4394a2c91e54e5b0bbeed65534181b3f",
"text": "I recommend a Capital One 360 account. Personal experience, I'm a current undergraduate and while Capital One ATMs are everywhere and while account fees do not exist while I work, my normal Capital One bank account would be shut down, every time, over the summer. Why? Because I didn't work over the summer and I couldn't keep the minimum balance in my account. With a 360 account, I don't have to worry about paper working being mailed home when I need it at my dorm (or vice versa) and I don't have to worry about minimum balance fees closing my account (it doesn't screw my credit when that happens, but I have to open up a NEW account; frustrating). The advantages of a 360 account is that it's all online, there are no minimum balance requirements, and that I can easily access it online and even deposit checks with the Capital One app.",
"title": ""
},
{
"docid": "470eedf873888a1c251d256f1b7c710f",
"text": "\"We also have a \"\"minimum daily balance\"\" account that requires a decent balance, but I'd much prefer to have my money elsewhere, growing little to any interest, versus sitting around collecting dust. Ours is a daily average, so you could have a lots in there for a few days to help make up the days when you're under.\"",
"title": ""
},
{
"docid": "0f87c0172005cce4fdc0e30b72e4f8a1",
"text": "If the bank wants to close your account, they will do just that. Having a small ongoing balance isn't going to prompt them to keep it open. Typically, the risk is for a card with zero usage to be closed, as it's a cost to them to keep the account open, and it has no revenue. To avoid this, it's a good idea to use that card or cards for a regular purchase, say, gasoline. A non-impulse buy, and just pay in full to avoid interest. There's no need to keep a balance accruing interest. Keep in mind - A bill contains a month of charges. The bill for December is issued on the 31st, but due January 25th or so. When you pay it in full you do not have zero balance, you have the charges from January. This accomplishes your goal, will no interest.",
"title": ""
},
{
"docid": "a1ab358564480177021f5fb532b66329",
"text": "I want to know if I cut the citi card in half for example, how much would the min payment go down? If you goal is to become debt-free, the minimum payment shouldn't matter. Even if the minimum payment goes down, continue your current payment amount (or more, if you can afford it) until the balance is paid off. Paying the minimum will just keep you in debt longer.",
"title": ""
},
{
"docid": "4c497d8c127129e08ae781080c27482e",
"text": "\"The short answer is \"\"yes\"\", paying more towards the loan as soon as a you can will reduce the interest. There are calculators or you could work up a spreadsheet using the specialized family of functions: PMT, PPMT, IPMT. My personal view: The amount of interest you offset in this manner is going to be fairly small (I'm going to guess less than $5 or $10 a month, but I haven't done the math). I would say what is more important is to automate your payments at a comfortable level, while making sure your other obligations are taken care of. Then add an extra payment when you save up a chunk of money to pay towards it. Make sure you never miss a payment. That means making sure you set up emergency fund to cover the payments if you lose your job or need to visit a sick family member for a while or the car breaks down or ....\"",
"title": ""
},
{
"docid": "8751321bca0cdc9b78979f64f7c8f2b7",
"text": "Unfortunately, this is a customer service issue. The bank has a set of term and conditions (Ts and Cs) which you received with the card or when you applied. It included your limit, and what happens when you go over, likely, a penalty for going over the limit. At the very least, they expect you to pay the overage or you'll see an over-limit charge next cycle too. In the future, I'd suggest checking your account on line to monitor your balance. Some accounts offer an alert email, mine will let me set an alert for when my balance goes over $xxx, which is helpful, as I can send in an early payment to bring that balance down. It still never hurts to ask. They might waive fees if any, if this is your first time. You can still try calling them, explain the odd timing, and see if you can get a temporary increase in credit line. In the end, you need to review your finances. Carrying balances month to month at 12-18% is no way to have a successful financial future. It's one of the first things to getting your situation under control. After that, a small savings account, an emergency fund, is the next step. One month of charges should never put you in this bad situation.",
"title": ""
},
{
"docid": "c890ec3967791b78bc598745465a0a0a",
"text": "If your account drops close to zero, Wells Fargo will choose that moment to apply their monthly maintenance fees so they can also apply overdraft fees. Its not that they are irresponsible, its that a much better equipped entity is exploiting the situation to bleed them dry.",
"title": ""
},
{
"docid": "2ca347fac050ca750ec45c00d760fc40",
"text": "Mostly ditto to Dillip Sarwate. Let me just add: I don't know how you're making your payments, whether through the biller's web site, your bank's web site, by mail, in person, etc. But whatever the mechanism, if there is a chance that waiting until the due date to pay may mean that you will miss the due date: don't. The cost of a late payment charge is likely to far exceed any interest you would collect on your savings. Bear in mind that we are talking pennies here. I don't know how much the monthly bills that we are discussing here come to. Say it's $3,000. I think that would be a lot for most people. You say you're getting 3.6% on your savings. So if, on the average, you pay a bill 2 weeks later than you might have, you're getting an extra 2 / 52 x 3.6% x $3,000 in interest, or $4 per month. I think the last time I paid a late fee on a credit card it was $35, so if you make one mistake every 8 months and end up getting a late fee it will outweigh any savings. Personally, I pay most of my bills through either my bank's web site or the biller's web site. I schedule all payments when I get a paycheck, and I generally try to schedule them for 1 week before the due date, so there's plenty of breathing room.",
"title": ""
},
{
"docid": "552c97f6a717f65fe5560ea03fd90c76",
"text": "\"I think we'd need to look at actual numbers to see where you're running into trouble. I'm also a little confused by your use of the term \"\"unexpected expenses\"\". You seem to be using that to describe expenses that are quite regular, that occur every X months, and so are totally expected. But assuming this is just some clumsy wording ... Here's the thing: Start out by taking the amount of each expense, divided by the number of months between occurrences. This is the monthly cost of each expense. Add all these up. This is the amount that you should be setting aside every month for these expenses, once you get a \"\"base amount\"\" set up. So to take a simple example: Say you have to pay property taxes of $1200 twice a year. So that's $1200 every 6 months = $200 per month. Also say you have to pay a water bill once every 3 months that's typically $90. So $90 divided by 3 = $30. Assuming that was it, in the long term you'd need to put aside $230 per month to stay even. I say \"\"in the long term\"\" because when you're just starting, you need to put aside an amount sufficient that your balance won't fall below zero. The easiest way to do this is to just set up a chart where you start from zero and add (in this example) $230 each month, and then subtract the amount of the bills when they will hit. Do this for some reasonable time in the future, say one year. Find the biggest negative balance. If you can add this amount to get started, you'll be safe. If not, add this amount divided by the number of months from now until it occurs and make that a temporary addition to your deposits. Check if you now are safely always positive. If not, repeat the process for the next biggest negative. For example, let's say the property tax bills are April and October and the water bills are February, May, August, and November. Then your chart would look like this: The biggest negative is -370 in April. So you have to add $370 in the first 4 months, or $92.50 per month. Let's say $93. That would give: Now you stay at least barely above water for the whole year. You could extend the chart our further, but odds are the exact numbers will change next year and you'll have to recalculate anyway. The more irregular the expenses, the more you will build up just before the big expense hits. But that's the whole point of saving for these, right? If a $1200 bill is coming next week and you don't have close to $1200 saved up in the account, where is the money coming from? If you have enough spare cash that you can just take the $1200 out of what you would have spent on lunch tomorrow, then you don't need this sort of account.\"",
"title": ""
},
{
"docid": "1f0c4c9e61a59c3e3be09bbee6ad4897",
"text": "I'm not asking if I should carry a balance to the end of the billing period and accrue interest Typically (I say typically because there may be some fringe outlier exception product that begins accruing interest immediately), if you're not carrying a balance already you will not be charged interest for carrying a balance during the billing period. You accrue a balance, you're issued a statement, if you pay the statement before the due date indicated you don't pay interest; even if your statement balance is less than the current actual balance on the account. If you carry a balance through that due date you begin to accrue interest. Not only on the balance carried but on all new charges as well. But as long as you consistently pay your statement balance before the statement due date you will not be charged any interest. As for a reason why you may want to take advantage of this, simply to ease the administration of your finances. You just don't need to touch the accounts that frequently to avoid interest charges. Sure you can let your money sit in an interest bearing account and earn a couple dollars a year but really, you just don't need to focus on your CC charges this frequently.",
"title": ""
},
{
"docid": "a0477c22075d15e0fd33267fe5a51012",
"text": "\"Many people who do transfer a balance from one credit card to another have no clue as to what is going on and how credit cards work. If you transfer a balance from one credit card to another, you are charged a fee of anywhere from 3% upwards (subject to a minimum of $10 or so) up front. If Credit Card A has balance $1000 and you transfer it to Credit Card B which is offering no interest for a year on the transferred balance, you owe Credit Card B $1050 (say). In most cases, that $50 has to be paid off as part of the following month's bill. If you are carrying a revolving balance on Credit Card B, that $50 will typically be charged interest from the day of the transfer. Your monthly bill will not (necessarily) include that $1000 you owe for one year or six months or whatever the transfer agreement you accepted says. If you tend to pay anything less (even a penny) than full payment of each month's bill on Credit Card B, your partial payment will be applied to that $1000 first, and anything left over will be applied to the monthly balance. In short, if you don't pay in full each month, that $1000 will not be \"\"yours\"\" for a year; you may end up paying $50 interest for borrowing $1000 for just one or two months, and the rest of your balance is the gift that keeps on giving as the credit card company likes to say. UPDATE: This has changed slightly in the United States. Any amount paid over the minimum amount due is charged to the higher-interest balances. So in this case, if you had $1000 at a 0% promotional rate and a regular balance of $500, and the minimum payment was $100, and you paid $150, $100 would pay down the promotional balance, and the extra $50 would pay down the regular balance. About the only way to make the deal work in your favor is to Transfer money only if you have paid the full amount due on the last two statements before the date of the transfer and are not carrying a revolving balance. Check your monthly statements to make sure they show Finance Charge of 0.00. Many people have never seen such a sight and are unaware that this can be observed in nature. Make sure that you pay each month's bill in full (not the minimum monthly payment due) each month for a whole year after that. Make sure that the bill containing that $1000 (coming out a year after the transfer date) is also paid in full. Very many credit-card users do not have the financial discipline to go through with this program. That is why credit card companies love to push transfer balances on consumers: the whole thing is a cash cow for them where they in effect get to charge usurious rates of interest without running afoul of the law. $50 interest for a one-year loan of $1000 is pretty high at current rates; $50 interest for a two or three month loan where the customer does not even notice the screwing he is getting is called laughing all the way to the bank. See also the answers to this question\"",
"title": ""
},
{
"docid": "0b79e739abfa7b6baaacb30fcb6c8a82",
"text": "Just to add: the 20% APR is the annualized interest rate, but applied monthly. So you'd be charged $0.50 of interest on your $30 balance, which gets capitalized on the next month. So if you were to miss the next payment for some reason, your new interest charge would be on $30.50 instead of $30 (actually, it'd be much more since there would be a fee for the late payment, but discounting that to illustrate the point).",
"title": ""
}
] |
fiqa
|
8a3c6591858cd6481124d29adb9b20d9
|
eBay Account and SIM cards sent to my address
|
[
{
"docid": "84b91722366d4ad2b21cb084c94302d6",
"text": "\"In your mother's position, I would do two things: Get a copy of her credit report. Money Advice Service has a useful page on how to do this - it is cheap (£2) or free to do and will immediately tell you if someone else is using her address for anything untoward. Check with the Post Office whether anyone has set up a redirect on mail to your Mum's address. You can redirect by individual names, so if Joe Bloggs buys a bunch of stuff and has it sent to him at your Mum's address, he could set up a redirect at the Post Office so any post for Joe Bloggs at that address gets redirected to Joe Blogg's real address. There is a page about this on the Post Office website, I don't know exactly how to check if someone else has set this up but I'm sure the Post Office would help you find out. Additionally, I would consider visiting the address (the same house number in the \"\"Road\"\" where hers is in the \"\"Avenue\"\") and see whether the occupants have anything useful to say about this. I would just say you'd had some mis-delivered post, and want to check what their names are so that you can pass on anything that is intended for them that comes to your address (and ask them to do likewise for you). Depending on how that goes you could also ask about the ebay store and see whether it really is them that set it up.\"",
"title": ""
}
] |
[
{
"docid": "7e10f9fb1ebe25140c06de0de01657db",
"text": "He has my bank account info, and I just want to know where I stand legally. Legally you can't keep the money. It would either go back to the originator or to Government unclaimed department. I got a bunch of missed calls from an unknown number and a really unprofessional email from a guy who supposedly worked for UNICEF saying I had 4 hours until I am suppose to be visited by police and that there was nowhere I could run to. These are common tactics employed to ensure you take some action and transfer the real money somewhere. Do not succumb to such tactics. The money is still in my account I have not touched it. Advise your Bank immediately that there is this deposit into your account that is not your's. Let the bank take appropriate action. Do not authorize Bank to debit your account. The max you can do is authorize the bank to reverse this transaction. The best is stick to statement that said transaction is not yours and Bank is free to do what is right. There is a small difference and very important. If you authorize bank to debit, you have initiated a payment. So if the original payment were revered by originator bank, you are left short of money. However if your instructions are very clear, that this specific transaction can be reversed, you cannot be additionally debited if this transaction is reversed. He has my bank account info, Depending on how easy / difficult, my suggestion would be monitor this account closely, best is if you can close it out and open a new one.",
"title": ""
},
{
"docid": "78791584598aca0098c81540f23d95ca",
"text": "Is there a risk buying a used car via a proxy if I pay the actual owner? Everything seems to be in order except one thing: the actual owner (X) is out of the country, and the car is being sold by his relative (Y). Yes there is risk. The risk is that the money never makes it to the actual owner. You have a piece of paper that claims to give permission to sell the car and the contact info for the real owner. The risk is that it was forged. Or that some other part of the chain of trust is forged. Maybe the car is stolen. Maybe this is part of a more complex scam and you are only a small part of it. The risk is that you end up having to file a police report after the real owner reports it stolen and the car is taken from you; or even worse you end up under arrest because they think you are the thief. With tons of cars for sale why risk it? Of course if the deal is a bargain, that may be designed to make you ignore the flashing warning light.",
"title": ""
},
{
"docid": "22a8ad978393dbd6e80020a151f705f7",
"text": "If this 'scam' has a name, address and/or phone number, I forward it to the FBI anonymously. That is my advice. You may also wish to consult a lawyer.",
"title": ""
},
{
"docid": "2b1a2d17c700fb9dcfea6f4ef1dbb125",
"text": "I work in IT for eBay/PayPal. Many, if not all, got exited today. Real quick and ninja-esque. HR is really being a dick to them too. Several have personal phone numbers that were assigned to their corporate phones, and they're being told they can't have them back.",
"title": ""
},
{
"docid": "398bfb864e3bdee31e346f5c9836893b",
"text": "It depends on the seller. If the seller wants, they can collect the information from you and send it to the payment gateway. In that case, they of course have everything that you provide at some point. They are not supposed to keep the security code, and there are rules about keeping the credit card number safe. The first four digits of the credit card number often indicate the bank, although smaller banks may share. But for example a Capital One card would indicate the bank. Other sellers work through a payment gateway that collects the information. Even there, the seller may collect most of the information first and send it to the gateway. In particular, the seller may collect name, email, phone, and address information. And in general the gateway will reveal that kind of information. They will not give the seller credit card info other than the name on the card, expiration date, and possible last four digits. They may report if the address matches the card's billing address (mismatched addresses may mean fraud). Buying through someone like PayPal can provide the least information. For a digital good, PayPal can only expose the buyer's name (which may be a business name) and email (associated with the payment account). However PayPal still has the other information and may expose it under legal action (e.g. if the credit card transaction is reversed or the good sold is illegal). And even PayPal will expose the shipping address for physical goods that require shipping.",
"title": ""
},
{
"docid": "179865a30346970704317a51f27e3820",
"text": "Do you have any ties to your old address? In particular are you the LANDLORD? This could have been a precursor application to test identity evidence and setup a mortgage. The perps may even have legally changed their name to yours and even be living in, or close to the house if it is a share house to intercept this kind of mail. Otherwise someone's database may have been breached, so it is important you try to work out where this information used in the application came from. If they are an illegal you may be racking up Council Tax somewhere or end up paying income tax on their earnings. In any case your character has probably now been damaged. So do follow it up right smartly.",
"title": ""
},
{
"docid": "a1eac45edacfbee6761874daf52b1603",
"text": "What I should have done in the first place was just ask them. From their customer support team: Thanks for writing in and for your interest in Square. It is perfectly acceptable to use Square for personal business, such as a yard sale. You do not need to have a registered business to take advantage of Square and the ability to accept credit cards. Just please note that it is against our Terms of Service to process prepaid cards, gift cards or your own credit card using your own Square account. Additionally, you may not use Square as a money transfer system. For every payment processed through Square, you must provide a legitimate good or service. Please let me know if you have any additional concerns.",
"title": ""
},
{
"docid": "f01187f9acffaf8747493180e29f7a3a",
"text": "I've skimmed through the answers given and I'd like do add another possible scenario. I've recently heard about this exact thing happening to someone only the money originally was a loan taken in the receivers name. 1) Scumbag finds out personal data – including social number, bank account and phone – of Innocent Victim. 2) Scumbag takes out a loan in the name of Innocent Victim. The money are sent to IV's account. 3) Scumbag calls IV saying 'Oh, I've made a mistake, blah, blah, yada, yada. Could you please send the money back to me? My bank account is...' 4) Innocent Victim, being the good guy that he/she is, of course want to help out and send the money to Scumbag. 5) Scumbag makes a cash withdrawal and is no longer anywhere to be found and Innocent Victim is left with a loan but no money.",
"title": ""
},
{
"docid": "bb0872cc316582d83cb6f56179da2bf2",
"text": "The sting here is definitely in the tail, the PS that says We are starting to call you from the same day when we get your details. The initial email doesn't ask for details, it asks for commitment. Once committed, you will be more relaxed about providing details. This makes me think that this is more serious than a simple financial scam. This is an effort to steal your identity, and that could be much more serious than the one-off loss of a few thousand dollars. Here's why: 1. The scammer could get numerous credit cards and store cards in your name, run up thousands or even hundreds of thousands of dollars in charges, and leave you stuck with explaining what happened. I know someone who went from being a multi-millionaire to a pauper in a few months when his identity was stolen - and he is no fool. 2. It will take you years to clear your name. Meanwhile, your credit is shot, and you might have trouble getting a job, renting an apartment, or simply getting a cellphone contract. 3. Once you've repaired your credit, the scammer can just go through his old files and do it all over again. 4. Cloaked in your identity, and therefore being seen as you, the scammer can pull any number of scams, for which you will eventually be blamed. Then as well as dealing with credit bureaus, you will be dealing with another, more serious bureau: the FBI.",
"title": ""
},
{
"docid": "786c59e47191338a9ea67a111bbb1567",
"text": "Give it to your mailman to return to sender. For this kind of material, return service is always requested, and it will let the bank know that they have incorrect address information. If the owner needs the cards, he'll contact the bank, or the bank will contact him to verify the address. Either way, as long as its not in your name, I don't think you should be worried.",
"title": ""
},
{
"docid": "5a9ae502a7c588a43f5321e4827d757e",
"text": "\"Whatever you did to \"\"set up my Bank of America account to use my mobile phone number to receive payments\"\", most likely registered your phone number in whatever network does the transfers, which both banks are probably a part of.\"",
"title": ""
},
{
"docid": "229dcdc4c02910101ea85c81c214c263",
"text": "\"The statement is (in laymans terms - if not in real terms) correct. Most credit cards (I know this to be true for VISA and Mastercard) have dispute processes and will do a chargeback on the merchant - ie take the money back from the supplier in cases where you don't receive the goods or other fraud - Particularly if they can't produce a signature and (for transactions which are not face-to-face) a tracking number. Your exact rights will vary by bank, but mostly they need to follow the guidelines set by the Credit Card company - and you do need to be a bit careful - if you received goods which were fake or a dispute arises you may be up for shipping the goods back to the merchant - and you have a limited - but reasonable time - in which to make the dispute. (The statement \"\"the money is the banks\"\" is not technically true, there is no money involved until you pay it, only credit [ they are very different, but almost no-one knows that, I communicated with a Minister of Finance on the topic], but this is quite technical and as a layman not something you need to worry about here)\"",
"title": ""
},
{
"docid": "ea300057d65e1606fdea10a2662839c8",
"text": "\"I have 2 PayPal accounts for this purpose (with different email addresses). The first account is tied to my real email address, and has my real name, phone and home address associated with it. This account is also connected to my bank account and credit cards. For riskier transactions where I don't need physical delivery (or will accept delivery to my local post-office in cases where I don't trust the seller with my personal details) I use my secondary account, which has a secondary email address of mine, and a fake name and with a fake address, it is not connected to any external accounts. To send or receive money \"\"anonymously\"\" I first send money from my real account to my fake account (inter-account transfers are free with PayPal), and then send the money to the seller from the fake account. This is in violation of PayPal's terms of service, but I've been using this system for the past 5+ years without any issues.\"",
"title": ""
},
{
"docid": "b7d9a5849f2f445daea08fec938a24c5",
"text": "\"You're potentially in very deep water here. You don't know who this person is that you're dealing with. Before you'd even met him, he just gave you his banking info, seemingly without a second thought. You have no idea what the sources of his money are, so what happens if the money is stolen or otherwise illegal? If it is determined that you used any of that money, you'll be on the hook to return it, at the very least. Who knows what the legal ramifications are either? So it sounds like you began spending his money before you had any kind of written agreement in place? Doesn't that seem odd to you to have someone just so trusting as to not even ask for that? Was the source of the email about the $2500 from PayPal, or from him or his advisor? PayPal always sends you a notice directly when funds are received into your account, and even if they were going to put a temporary hold on them for whatever reason (sometimes they do that), it would still show up in your account. I would HIGHLY (can I be more emphatic?) advise you not to go anywhere NEAR his bank account until or unless you can absolutely verify who he is, where his money comes from, and what the situation is. If you start dipping into his account, whether you think you're somehow entitled to the money or not, he could cry foul and have you arrested for theft. This is a very odd situation, and for someone who says he's normally cautious and skeptical, you sure let your guard down here when you started spending his money without making any serious effort to confirm his bona fides. Just because he passes himself off as smart and the \"\"doctor type\"\" doesn't mean squat. The very best scammers can do that (ever see the movie \"\"Catch Me If You Can\"\", based on a true story?), so you have no basis for knowing he's anything at all. I am thoroughly confused as to why you'd just willfully start using his money without knowing anything about him. That's deeply disconcerting, because you've opened yourself up to a world of potential criminal and civil liability if this situation goes south. If this guy was giving you money as an investment in your business and you instead used some of that money for your own personal expenses then you could land in very serious trouble for co-mingling of funds. Even if he told you it was okay, it doesn't sound like there's anything in writing, so he could just as easily deny giving you permission to use the money that way and have you charged with embezzlement. You need to step back, take a deep breath, stop using his money, and contact a lawyer for advice. Every attorney will give you a free consultation, and you need to protect yourself here. Be careful, my friend. If this makes you suspicious then you need to listen to that voice in your head and find a way to get out of this situation.\"",
"title": ""
},
{
"docid": "75c4f6840c9c634feb441c398ad5ac39",
"text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam.",
"title": ""
}
] |
fiqa
|
7f44904ff61e8ba104c27026bed9dbc2
|
Can self-employed individuals deduct their mileage spent commuting to events?
|
[
{
"docid": "c743007f4e745fb1bbad1caed4a16da7",
"text": "I looked at Publication 463 (2014), Travel, Entertainment, Gift, and Car Expenses for examples. I thought this was the mot relevant. No regular place of work. If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. These are nondeductible commuting expenses. This only deals with transportation to and from the temporary work site. Transportation expenses do not include expenses you have while traveling away from home overnight. Those expenses are travel expenses discussed in chapter 1 . However, if you use your car while traveling away from home overnight, use the rules in this chapter to figure your car expense deduction. See Car Expenses , later. You will also have to consider the cost of tolls of the use of a trailer if those apply.",
"title": ""
}
] |
[
{
"docid": "af94bde04c5e56fce68e17efd75ae0cc",
"text": "The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($1000*12 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000*.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses. Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it.",
"title": ""
},
{
"docid": "c11d1781a910fe53b160db6f0ac43cb5",
"text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate",
"title": ""
},
{
"docid": "9a79e4ac789b44b448e0340713d810a9",
"text": "You can only deduct (with the 2% AGI threshold) expenses that: You've actually incurred. I.e.: you actually paid for equipment or services provided and can show receipts for the payment. At the request of the employer. I.e.: you didn't just decide on your own to buy a new book or take a class, your employer told you to. With business necessity. I.e.: it was in order for you to do your job. And you were not reimbursed by your employer. I.e.: you went somewhere and spent your after tax money on something employer explicitly told you to pay for, and you didn't get reimbursed for that. From your story - these conditions don't hold for you. As I said in the comments - I strongly suggest you talk to a lawyer. Your story just doesn't make any sense, and I suspect your employer is doing something very fishy here.",
"title": ""
},
{
"docid": "052ed6cf9f53c654a8d17cb0e89b4f2f",
"text": "You cannot deduct expenses directly. However, your employer may participate in programs to allow you to make a pretax deduction capped at $255 per month to pay for certain commuting expenses. For personal car commuters the main category is to pay for parking. IRS guidelines Qualified Transportation Benefits This exclusion applies to the following benefits. A ride in a commuter highway vehicle between the employee's home and work place. A transit pass. Qualified parking. Qualified bicycle commuting reimbursement. You may provide an employee with any one or more of the first three benefits at the same time. However, the exclusion for qualified bicycle commuting reimbursement isn't available in any month the employee receives any of the other qualified transportation benefits.",
"title": ""
},
{
"docid": "8be85e6de45b64fe19db102bc76f2858",
"text": "\"The piece is a little misguided at best and poor journalism at worst. The problem lies in the difference between what's deductible for individuals and what's deductible for corporations. The short version of the story is that corporations can deduct a hell of a lot more things than individuals can. Individual deductions are spelled out in the Internal Revenue Code. Stuff like medical expenses (above 7.5% of your AGI), certain educational things, etc. For corporations, the basic rule is that they can deduct any \"\"ordinary and necessary\"\" business expenses. That includes operating, travel, interest, employee, etc. I wish that the article had cited specific sections of the Code if this was some kind of loophole or something, but alas, it appears that they didn't. That leads me to believe that these companies are deducting the portion not paid to the government as a business expense. ~~For what it's worth, I don't believe that a company can deduct those expenses for tax purposes unless it's to \"\"protect their business interests.\"\" My assumption (I don't have the time or desire to search case law right now) is that settlements with the US Government are considered to fall under that definition.~~ **EDIT** - See my comment [here](http://www.reddit.com/r/business/comments/11dbzu/federal_regulators_have_lauded_a_series_of/c6ll7ez) for the relevant Treasury Regulation dealing with this.\"",
"title": ""
},
{
"docid": "5fb1034e13a97b1e3a37becc28ec0b0b",
"text": "No, it's not possible. Even if you had no deduction or credits, your federal tax on $16,604 would be: $9075 @ 10% = $907.50 + $7529 @ 15% = $1129.35 = $2036.85 That assumes you are filing as single. There must be more to the story. Typo in your income numbers? Also, what do you mean by a self-employment tax deduction? Maybe update your question to include a breakdown of everything you entered? Edit: As noted in Loren's answer, it seems that it is indeed possible in at least one case (self-employment taxes).",
"title": ""
},
{
"docid": "d04d1455d5b8090206ebb4e035f20e7e",
"text": "\"Short answer, yes. But this is not done through the deductions on Schedule A. This can happen if the employer creates a Flexible Spending Account (FSA) for its employees. This can be created for certain approved uses like medical and transportation expenses (a separate account for each category). You can contribute amounts within certain limits to these accounts (e.g. $255 a month for transportation), with pre-tax income, deduct the contributions, and then withdraw these funds to cover your transportation or medical expenses. They work like a (deductible) IRA, except that these are \"\"spending\"\" and not \"\"retirement\"\" accounts. Basically, the employer fulfills the role of \"\"IRA\"\" (FSA, actually) trustee, and does the supporting paperwork.\"",
"title": ""
},
{
"docid": "0a61315d9ef877f3ad2f1f05b0ae0df1",
"text": "The short answer is no you can only deduct actual expenses. The long answer is that it would be impossible for the IRS to determine the value of your time and it would open the tax system to an enormous amount of fraud (think of being able to make up time spent or writing off time spent volunteering at a soup kitchen or any other charity). Now you can write off expenses you have involved in doing the work, equipment and supplies used to do the work along with any wages you paid an employee or contractor to do said work.",
"title": ""
},
{
"docid": "efa51fe7c17d14246a73d36a35151dd5",
"text": "\"I would say similar rules apply in the US. If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut. If you are a \"\"real estate professional\"\", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a \"\"real estate professional\"\", then your rental income is considered a \"\"passive activity\"\" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation.\"",
"title": ""
},
{
"docid": "8b8d28b5cc468191072149c2e1c9c59f",
"text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.",
"title": ""
},
{
"docid": "1d7d8e8d7d26758e0fa9d7e3531f56cc",
"text": "In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim:",
"title": ""
},
{
"docid": "e863c8d274a0822740d59a90181625e4",
"text": "Per IRS regulations, if your stipend is not paying you for qualified expenses (primarily, tuition and books; explicitly not room and board or travel), it is taxable. It doesn't require self-employment taxes (which are Medicare and FICA, normally paid in part by an employer), but it is taxable income from an income tax perspective. You can generally deduct your books and such if you have your receipts - expenses 'required' by the institution for the coursework. Do verify that the amount on the 1099-MISC reflects what you actually received in cash above and beyond the tuition waiver - don't assume the college did this the way you expect, or even properly. Your bank statements should match the amount on the form. You should definitely include it in your gross income and pay taxes on it. If you received alternate instruction, you should clarify that with the people doing the filing, and follow up with a supervisor perhaps (it's possible the volunteers helping at an event like this aren't familiar with this part of tax preparation). (Source, in addition to IRS regulations - I was my wife's tax preparer many of the years she was in her Ph.D. program.)",
"title": ""
},
{
"docid": "43d8d5aeef6f0b30ac31ccb5f3b6bdd2",
"text": "When you take the self employed health care deduction on on Line 29 of form 1040 for 2010 it also will lower your self employment tax. See line 3 of Schedule SE. You report your net earnings from self employment less line 29 from 1040.",
"title": ""
},
{
"docid": "b00dcf0b2faaae67c0b38a657cffcb20",
"text": "\"I'm not a tax professional, but as I understand it, you are not expected to commute from San Francisco to Boston. :) If your employer has not provided you with an external office, then yes, you have very likely met the \"\"convenience of the employer\"\" test. However, to take the home office deduction, there are many requirements that have to be met. You can read more at the Nolo article Can You Deduct Your Home Office When You're an Employee? (Thanks, keshlam) The home office deduction has many nuances and is enough of an IRS red flag that you would be well-advised to talk to an accountant about it. You need to be able to show that it is exclusively and necessarily used for your job. Another thing to remember: as an employee, the home office deduction, if you take it, will be deducted on Schedule A, line 21 (unreimbursed employee expenses), among other Miscellaneous Deductions. Deductions in this section need to exceed 2% of your adjusted gross income before you can start to deduct. So it will not be worth it to pursue the deduction if your income is too high, or your housing expenses are too low, or your office is too small compared to the rest of your house, or you don't itemize deductions.\"",
"title": ""
},
{
"docid": "9a0e3038ab0c6e03e0356d28e43f05f3",
"text": "Since your child is 2, he has a long time horizon for investment. Assuming the savings will be used at age 19, that's 17 years. So, I think your best bet is to invest primarily in equities (i.e. stock-based funds) and inside an RESP. Why equities? Historically, equities have outperformed debt and cash over longer time periods. But, equities can be volatile in the short term. So, do purchase some fixed-income investments (e.g. 30% government bonds and money market funds), and do also spread your equity money around as well -- e.g. buy some international funds in addition to Canadian funds. Rebalance every year, and as your child gets closer to university age, start shifting some assets out of equities and into fixed-income, to reduce risk. You don't want the portfolio torpedoed by an economic crisis the year before the money is required! Next, why inside an RESP? Finally... what if your kid doesn't attend post-secondary education? First, you should probably get a Family RESP, not a Group RESP. Group RESPs have strict rules and may forfeit contributions if your kid doesn't attend. Have a look at Choosing the Right RESP and Canadian Capitalist's post The Pros and Cons of Group RESP Plans. In a Family plan, if none of your kids end up attending post-secondary education, then you forfeit the government match money -- the feds get it back through a 20% surtax on withdrawals. But, you'll have the option of rolling over remaining funds into your RRSP, if you have room.",
"title": ""
}
] |
fiqa
|
69c3c9e32154dbe19b0eb0627a1e9ba7
|
How to pay myself as a single person corporation in Ontario? Should I get an accountant?
|
[
{
"docid": "b018fe2ddb7dcc9bf08e6fffdb96fb4f",
"text": "\"Get an accountant. Now. There are many subtle things that you do not know especially if you are just starting with your own corporation. There is also an issue of corporate tax return that you will have to face pretty soon. You should be looking for accountant that does accounting for corporations, there are companies specializing in small business. I do not think you can \"\"just\"\" transfer money to your personal account. They have to be treated as dividends and treated as such for income tax purposes. Or, as you described, you may pay yourself a salary, but then you have to pay CPP and EI on top of that. When you pay yourself dividends your corporation will need to issue T5 slip for you (accountant will do that) that you will need to use when preparing personal tax return. If you pay yourself salary, corporation will need to give you T4 In terms of tax treatment, if we do not take RRSP contributions dividend tax treatment will leave little bit more money in your hands. I'd say if you have RRSP room and/or TFSA room, pay yourself dividends and then do contributions as you see fit, if you need RRSP room, pay yourself salary. TFSA room does not depend on the type of income, so if you have room there, consider filling it first.\"",
"title": ""
}
] |
[
{
"docid": "f0e35b50511df8a0a78fcdf833adddd5",
"text": "Compliance issues vary from country to country and, in the US, state to state as well. There'll be a number of levels, though: Bear in mind that it is not that these taxes and responsibilities don't apply to sole traders or unregistered businesses, it's just that being registered signals your existence and introduces the bureaucracy to you all at once. Update: Your accountant should manage your company and consumer tax calculations and submissions on your behalf (and a good one will complete all the paperwork on time plus let you know well in advance what your liability is, as well as offer advice on reducing and restructuring these liabilities). You're probably on your own for local taxes unless your accountant deals with these and is local to even know what they are.",
"title": ""
},
{
"docid": "a8aa87c29e49314ea96dafd5d5e09b19",
"text": "Good professional tax advice is expensive. If your situation is simple, then paying someone doesn't give you more than you could get from a simple software package. In this case, doing your own taxes will save you money this year, and also help you next year, as your situation grows steadily more complex. If you don't do your own taxes when you're single with a part time job, you'll never do it when you have a family, a full time job, a side business, and many deductions. Learning how to do your taxes over time, as your 'tax life' becomes complex, is a valuable skill. If your situation is complex, you will need pay a lot to get it done correctly. Sometimes, that cost is worthwhile. At bare minimum, I would say 'attempt to do your taxes yourself, first'. This will force you to organize your files, making the administrative cost of doing your return lower (ie: you aren't paying your tax firm to sort your receipts, because you've already ordered them nicely with your own subtotals, everything perfectly stapled together). If your situation is complex, and you find a place to get it done cheaply (think H&R Block), you will not be getting value for service. I am not saying a low-end tax firm will necessarily get things wrong, but if you don't have a qualified professional (read: university educated and designated) doing your return, the complexities can be ignored. Low-end tax firms typically hire seasonal staff, train them for 1-2 weeks, and mostly just show them how to enter tax slips into the same software you could buy yourself. If you underpay for professional services, you will pay the price, metaphorically speaking. For your specific situation, I strongly recommend you have a professional service look at your returns, because you are a non-resident, meaning you likely need to file in your home country as well. Follow what they do with your return, and next year, see how much of it you can do yourself. Before you hire someone, get a fee quote, and shop around until you find someone you are comfortable with. $1k spent now could save you many headaches in the future.",
"title": ""
},
{
"docid": "be8d414a0fd1c029f1c9ad663a449c4d",
"text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US",
"title": ""
},
{
"docid": "818bd7c198f0113490836e80cfdaac75",
"text": "\"The founders almost certainly owe tax on the \"\"income\"\" represented by the rent they aren't being charged. It isn't clear whether the corporation also owes income tax on the rent it is not receiving back from them. You definitely want advice from a paid tax accountant, not least because that helps protect everyone should this arrangement be challenged.\"",
"title": ""
},
{
"docid": "4f23189bc5ab93bc85fe590c711b5301",
"text": "If you want to subcontract some of your excess work to somebody else, you better be in business! While some kinds of employees (e.g. commissioned salespeople) are permitted to deduct some expenses on their income tax, generally only a real business can deduct wages for additional employees, or the cost of services provided by subcontractors. Do you invoice your clients and charge HST (GST)? Or do you tell your clients each pay period how many hours you worked and they compensate you through their payroll system like everybody else that walks through the door? If you're not invoicing and charging HST (GST) (assuming you exceed the threshold, and if you have too much work, you probably do!), then perhaps your clients are treating you as an employee – by default – and withholding taxes, CPP, and EI so they don't get in trouble? After all, Canada Revenue Agency is likely to consider any person providing a service to a company to be an employee unless there is sufficient evidence to the contrary, and when there isn't enough evidence, it's the company paying for the services that would be on the hook for unpaid taxes, CPP, and EI. Carefully consider what form of business you are operating, or were intending to operate. It's essential for your business to be structured appropriately if you want to hire or subcontract. You ought to be either self-employed as a sole proprietor, or perhaps incorporated if it makes more sense to your situation. Next, act accordingly. For instance, it's likely that your business should be taking care of the source deductions, CPP, and EI. In fact, self-employed individuals shouldn't even be paying into EI – an independent contractor wouldn't qualify to make an EI claim if they lost a contract. As an independent, one doesn't have a job, one has a business, and EI doesn't cover the business itself, only the employees that the business deals with at arm's length. As a business owner, you would be considered non-arms-length, and exempt from EI. Growing your business in the way that you are suggesting is an important enough a step that you should seek professional advice in advance. Find a good accountant that deals with self-employed individuals & small businesses and run all this by him. He should be able to guide you accordingly. Find a lawyer, too. A lawyer can guide you on how to properly subcontract others while protecting you and your business. Finally, be mindful of what it is you agreed to in your contract with your client: Do they expect all services to be performed by you, personally? Even if it wasn't written down who exactly would be performing the services, there may be an assumption it's you. Some negotiation may be in order if you want to use subcontractors.",
"title": ""
},
{
"docid": "8dbe42ade6202d1a33c8ad6ad410dcf4",
"text": "What you need to do is register as a sole trader. This will automatically register you for self assessment so you don't have to do that separately. For a simple business like you describe that's it. Completing your self assessment will take care of all your income tax and national insurance obligations (although as mentioned in your previous question there shouldn't be any NI to pay if you're only making £600 or so a year).",
"title": ""
},
{
"docid": "2b5c0f3ab5a837e85d550225adbb03c7",
"text": "I would say you can file your taxes on your own, but you will probably want the advice of an accountant if you need any supplies or tools for the side business that might be tax deductible. IIRC you don't have to tell your current employer for tax reasons (just check that your contract doesn't state you can't have a side job or business), but I believe you'll have to tell HMRC. At the end of the year you'll have to file a tax return and at that point in time you'll have to pay the tax on the additional earnings. These will be taxed at your highest tax rate and you might end up in a higher tax bracket, too. I'd put about 40% away for tax, that will put you on the safe side in case you end up in the high tax bracket; if not, you'll have a bit of money going spare after paying your taxes.",
"title": ""
},
{
"docid": "8faf102c4cceb0254f9731411e2413c0",
"text": "If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.",
"title": ""
},
{
"docid": "c2e776fb7b74820146fb41350cfb275e",
"text": "Adding to webdevduck's answer: Before you calculate your profits, you can pay money tax-free into a pension fund for the company director (that is you). Then if you pay yourself dividends, if you made lots of profit you don't have to pay it all as dividends. You can take some where the taxes are low, and then pay more money in later years. What you must NOT do is just take the money. The company may be yours, but the money isn't. It has to be paid as salary or dividend. (You can give the company director a loan, but that loan has to be repaid. Especially if a limited company goes bankrupt, the creditors would insist that loans from the company are repaid). After a bit more checking, here's the optimal approach, perfectly legal, expected and ethical: You pay yourself a salary of £676 per month. That's the point where you get all the advantages of national insurance without having to pay; above that you would have to pay 13.8% employers NI contributions and 12% employee's NI contributions, so for £100 salary the company has to pay £113.80 and you receive £88.00. Below £676 you pay nothing. You deduct the salary from your revenue, then you deduct all the deductible business costs (be wise in what you try to deduct), then you pay whatever you want into a pension fund. Well, up to I think £25,000 per year. The rest is profit. The company pays 19% corporation tax on profits. Then you pay yourself dividends. Any dividends until your income is £11,500 per year are tax free. Then the next £5,000 per year are tax free. Then any dividends until income + dividends = £45,000 per year is taxed at 7.5%. It's illegal to pay so much in dividends that the company can't pay its bills. Above £45,000 you decide if you want your money now and pay more tax, or wait and get it tax free. Every pound of dividend above £45,000 a year you pay 32.5% tax, but there is nobody forcing you to take the money. You can wait until business is bad, or you want a loooong holiday, or you retire. So at that time you will stay below £45,000 per year and pay only 7.5% tax.",
"title": ""
},
{
"docid": "2e1b623f2c6c87c3cee30609c34c9f12",
"text": "Without knowing specifics about your personal situation, there are two items to consider: 1. Pre-pay as many items as possible this year. (rent/lease, insurance premiums, etc.) to reduce your profit on paper in this tax year. 2. If you don't have a retirement plan for yourself, look into it as a way to put some money aside for retirement pre-tax. If your accountant can't help with this, perhaps find a financial planner. Congrats though, great problem to have!",
"title": ""
},
{
"docid": "701e8af5fd8da73baf91d54053149cb0",
"text": "In Ontario, common law marriage requires 3 years of cohabitation, and doesn't give rights to property (which remains separate). I'd say in your situation you can still file as single, but I'd suggest asking your tax accountant to be sure.",
"title": ""
},
{
"docid": "848ab8b6c4f59f784f99de5bb5c720c8",
"text": "Unless you're running a self-employed business with a significant turnover (more than £150k), you are entitled to use cash basis accounting for your tax return, which means you would put the date of transactions as the payment date rather than the billing date or the date a debt is incurred. For payments which have a lag, e.g. a cheque that needs to be paid in or a bank transfer that takes a few days, you might also need to choose between multiple payment dates, e.g. when you initiated the payment or when it took effect. You can pick one as long as you're consistent: You can choose how you record when money is received or paid (eg the date the money enters your account or the date a cheque is written) but you must use the same method each tax year.",
"title": ""
},
{
"docid": "0405c80b946e2a2c2c2ceae2b78ccae7",
"text": "In a simple case as the sole UK resident director/shareholder of a company, with that company as your only income, you are usually best paying yourself a salary of the maximum tax free amount allowed under your tax code (~£11k for most people at present). On this you will have to pay some employer and employee National Insurance (NI) contributions (totalling around £1000). Your salary/employer NI counts as an expense, so that is taken off the company profits. You then pay corporation tax on the remainder (20%). The first £5k you take as dividends is tax free, the remainder at a lower tax rate than the equivalent combined income tax/NI (starting at 7.5% instead of 20% tax plus employee plus employer NI), giving a significant saving compared to salaried income even after corporation tax. To declare and pay the tax, you would need to complete a self-assessment tax return. Your company will also need to file a return. The Contractor UK website, although aimed at IT contractors, has some very useful information on operating Ltd companies. That said, finances are rarely that simple so I would concur with the recommendation you engage an accountant, which is a tax-deductible expense.",
"title": ""
},
{
"docid": "25c3c0fedb487bda03a9b386cba5a700",
"text": "As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business.",
"title": ""
},
{
"docid": "2feb1c44e0071295f10f2c3ef34941bb",
"text": "\"OK, it's a bit of a minefield but here goes! You only pay corporation tax in the UK on any profit made, so your \"\"salary\"\" would not be classed as part of the profit, so in the example you give you would only pay corporation tax on £4k less your \"\"salary\"\" ie £3,200 so profit on the £800 remaining gross profit. You don't say if your figures are monthly, annual etc, but you only pay income tax if you earn over £11.5k in any given tax year, the rates increase as your income does, check here: https://www.gov.uk/income-tax-rates You may have a different tax code, you would need to check that with HMRC but the link gives the \"\"default\"\" position which is correct for most people. https://www.itcontracting.com/limited-company-dividends/ If the figures you give are monthly then I would consult an accountant as they are likely to save you more than they will charge for their services. You will probably find it is most tax efficient to pay yourself a dividend from the company's profits but check with an accountant. More info: https://www.gov.uk/running-a-limited-company/taking-money-out-of-a-limited-company\"",
"title": ""
}
] |
fiqa
|
d22eb91da77474571f6bae3f45bb4325
|
Dec 31 accounting for S Corp - what to do with loss?
|
[
{
"docid": "268e69dc5931c26a823eba881d202228",
"text": "Conceptually, the entries are: Yes. And since you're the sole owner, your basis will equal to the equity balance on the balance sheet. Keep in mind the book and tax basis will probably be different, so you may want to keep a separate calculation to track the tax basis. There is no journal additional journal entry for this. If you're using bookkeeping software, be sure to research its book-closing/closing entries feature, as it is handled differently depending on the software. For example Quickbooks doesn't explicitly close its books, but re-computes the balance sheet dynamically depending on the selected date range.",
"title": ""
}
] |
[
{
"docid": "c356e65fae1f20d399d29664a93e6301",
"text": "Here's the best explanation I found relating to why your T4 box 39 might not have an amount filled in, even when box 38 has one: Department of Finance – Explanatory Notes Relating to the Income Tax Act [...]. It's a long document, but here's the part I believe relevant, with my emphasis: Employee Stock Options ITA 110(1) [...] Paragraph 110(1)(d) is amended to include a requirement that the employee [...] exercise the employee’s rights under the stock option agreement and acquire the securities underlying the agreement in order for the deduction in computing taxable income to be available [...] ensures that only one deduction is available in respect of an employment benefit. In other words, if employee stock option rights are surrendered to an employer for cash or an in-kind payment, then (subject to new subsections 110(1.1) and (1.2)) the employer may deduct the payment but the employee cannot claim the stock option deduction. Conversely, where an employer issues securities pursuant to an employee’s exercise of stock options, the employer can not deduct an amount in respect of the issuance, but the employee may be eligible to claim a deduction under paragraph 110(1)(d). Did you receive real shares based on your participation in the ESPP, or did you get a cash payment for the net value of shares you would have been issued under the plan? From what I can tell, if you opted for a cash payment (or if your plan only allows for such), then the part I emphasized comes into play. Essentially, if conditions were such that your employer could claim a deduction on their corporate income tax return for the compensation paid to you as part of the plan, then you are not also able to claim a similar deduction on your personal income tax return. The money received in that manner is effectively taxed in your hands the same as any bonus employment income would be; i.e. it isn't afforded tax treatment equivalent to capital gains income. Your employer and/or ESPP administrator are best able to confirm the conditions which led to no amount in your box 39, but at least based on above you can see there are legitimate cases where box 38 would have an amount while box 39 doesn't.",
"title": ""
},
{
"docid": "ed9e547c7fe50befd984c0eaa6a63f05",
"text": "The best way to do this is to pay for the entire car, including gas, insurance, and repairs, from S-corp funds, then meticulously track how many miles are used for personal and how many miles for business. If you pay with S-corp funds, you will claim the personal miles as a taxable benefit from the S-corp on your personal return. The S-corp can then claim all the expenses and depreciation on the vehicle, reducing the S-corp's tax liability.",
"title": ""
},
{
"docid": "983e84eb31d74702554938415b8ccc43",
"text": "One approach would be to create Journal Entries that debit asset accounts that are associated with these items and credit an Open Balance Equity account. The value of these contributions would have to be worked out with an accountant, as it depends on the lesser of the adjusted basis vs. the fair market value, as you then depreciate the amounts over time to take the depreciation as a business expense, and it adjusts your basis in the company (to calculate capital gains/losses when you sell). If there were multiple partners, or your accountant wants it this way, you could then debit open balance equity and credit the owner's contribution to a capital account in your name that represents your basis when you sell. From a pure accounting perspective, if the Open Balance Equity account would zero out, you could just skip it and directly credit the capital accounts, but I prefer the Open Balance Equity as it helps know the percentages of initial equity which may influence partner ownership percentages and identify anyone who needs to contribute more to the partnership.",
"title": ""
},
{
"docid": "22dcd0ba9de89e97f557a7a9a927f198",
"text": "Thanks for this, great in depth answer. I had previously calculated a WACC and have used it for my discount rate. As part of your last point on revenue vs. cash, I've set a accounts receivable period of 30 days, and then applied a factor of 30/365 * revenue to understand what portion of my revenue is not cash in hand. Does that make sense?",
"title": ""
},
{
"docid": "bf38dce82645ae04c92ffe7f51c40d0a",
"text": "An S-corp doesn't pay income tax -- taxation is pass-through. This being the case, there are no tax deductions it could take for charitable giving. The solution would be for you to make the contribution out of your own pocket and then personally claim the deduction on your own taxes.",
"title": ""
},
{
"docid": "69cae92454c28e2e4d04cda5494408f7",
"text": "That's really not something that can be answered based on the information provided. There are a lot of factors involved: type of income, your wife's tax bracket, the split between Federal and State (if you're in a high bracket in a high income-tax rate State - it may even be more than 50%), etc etc. The fact that your wife didn't withdraw the money is irrelevant. S-Corp is a pass-through entity, i.e.: owners are taxed on the profits based on their personal marginal tax rates, and it doesn't matter what they did with the money. In this case, your wife re-invested it into the corp (used it to pay off corp debts), which adds back to her basis. You really should talk to a tax adviser (EA/CPA licensed in your State) to learn how S-Corps work and how to use them properly. Your wife, actually, as she's the owner.",
"title": ""
},
{
"docid": "fd1d479b3ef0591db81ed22afc57b378",
"text": "\"I'm not personally familiar with this, but I had a look at the Companies House guidance. Unfortunately, it seems you've done things in the wrong order. You should have first got the funds out, distributed them to yourself as a dividend or salary, and then closed the account, and then wound up the company. Legally speaking, the remaining funds now belong to the government (\"\"bona vacantia\"\"). It's possible you could apply to have the company restored, but I think that might be difficult; I don't think the administrative restoration procedure applies in your situation. Given the amount involved, I'd suggest just forgetting about it.\"",
"title": ""
},
{
"docid": "7ec4040c3ac8334ab36c650435360cd4",
"text": "\"As Dilip said, if you want actual concrete, based in tax law, answers, please add the country (and if applicable, state) where you pay income tax. Also, knowing what tax bracket you're in would help as well, although I certainly understand if you're not comfortable sharing that. So, assuming the US... If you're in the 10% or 15% tax bracket, then you're already not paying any federal tax on the $3k long term gain, so purposely taking losses is pointless, and given that there's probably a cost to taking the loss (commission, SEC fee), you'd be losing money by doing so. Also, you won't be able to buy back the loser for 31 days without having the loss postponed due to the wash sale that would result. State tax is another matter, but (going by the table in this article), even using the highest low end tax rate (Tennessee at 6%), the $50 loss would only save you $3, which is probably less than the commission to sell the loser, so again you'd be losing money. And if you're in a state with no state income tax, then the loss wouldn't save you anything on taxes at the state level, but of course you'll still be paying to be able to take the loss. On the high end, you'd be saving 20% federal tax and 13.3% state tax (using the highest high end tax state, California, and ignoring (because I don't know :-) ) whether they tax long-term capital gains at the same rate as regular income or not), you'd be saving $50 * (20% + 13.3%) = $50 * 33.3% = $16.65. So for taxes, you're looking at saving between nothing and $16.65. And then you have to subtract from that the cost to achieve the loss, so even on the high end (which means (assuming a single filer)) you're making >$1 million), you're only saving about $10, and you're probably actually losing money. So I personally don't think taking a $50 loss to try to decrease taxes makes sense. However, if you really meant $500 or $5000, then it might (although if you're in the 10-15% brackets in a no income tax state, even then it wouldn't). So the answer to your final question is, \"\"It depends.\"\" The only way to say for sure is, based on the country and state you're in, calculate what it will save you (if anything). As a general rule, you want to avoid letting the tax tail wag the dog. That is, your financial goal should be to end up with the most money, not to pay the least taxes. So while looking at the tax consequences of a transaction is a good idea, don't look at just the tax consequences, look at the consequences for your overall net worth.\"",
"title": ""
},
{
"docid": "b5dca99a685e3a33d3939c04c8107c93",
"text": "From the instructions: If you do not need to make any adjustments to the basis or type of gain or loss (short-term or long-term) reported to you on Form 1099-B (or substitute statement) or to your gain or loss for any transactions for which basis has been reported to the IRS (normally reported on Form 8949 with box A checked), you do not have to include those transactions on Form 8949. Instead, you can report summary information for those transactions directly on Schedule D. For more information, see Exception 1, later. However, in case of ESPP and RSU, it is likely that you actually do need to make adjustments. Since 2014, brokers are no longer required to track basis for these, so you better check that the calculations are correct. If the numbers are right and you just summarized instead of reporting each on a separate line, its probably not an issue. As long as the gains reported are correct, no-one will waste their time on you. If you missed several thousand dollars because of incorrect calculations, some might think you were intentionally trying to hide something by aggregating and may come after you.",
"title": ""
},
{
"docid": "7ef47ed887fa8f884430c6b071e1e720",
"text": "This answer assumes you're asking about how to handle this issue in the USA. I generally downvote questions that ask about a tax/legal issue and don't bother providing the jurisdiction. In my opinion it is extremely rude. Seeing that you applied for an LLC, I think that you somehow consider it as a relevant piece of information. You also attribute some importance to the EIN which has nothing to do with your question. I'm going to filter out that noise. As an individual/sole-proprietor (whether under LLC or not), you cannot use fiscal years, only calendar years. It doesn't matter if you decide to have your LLC taxed as S-Corp as well, still calendar year. Only C-Corp can have a fiscal year, and you probably don't want to become a C-Corp. So the year ends on December 31, and whether accrual or cash - you can only deduct expenses you incurred until then. Also, you must declare the income you got until then, which in your case will be the full amount of funding - again regardless of whether you decided to be cash-based or accrual based. So the main thing you need to do is to talk to a licensed tax adviser (EA/CPA licensed in your state) and learn about the tax law relevant to your business and its implications on your actions. There may be some ways to make it work better, and there are some ways in which you can screw yourself up completely in your scenario, so do get a professional advice.",
"title": ""
},
{
"docid": "96f824981dbe9557d71896527caa0655",
"text": "The market maker will always take it off your hands. Just enter a market sell order. It will cost you a commission to pull the loss into this year. But that's it.",
"title": ""
},
{
"docid": "e23eda4b8b64a62749c8eb12447ab724",
"text": "\"Generally if you're a sole S-Corp employee - it is hard to explain how the S-Corp earned more money than your work is worth. So it is reasonable that all the S-Corp profits would be pouring into your salary. Especially when the amounts are below the FICA SS limits when separating salary and distributions are a clear sign of FICA tax evasion. So while it is hard to say if you're going to be subject to audit, my bet is that if you are - the IRS will claim that you underpaid yourself. One of the more recent cases dealing with this issue is Watson v Commissioner. In this case, Watson (through his S-Corp which he solely owned) received distributions from a company in the amounts of ~400K. He drew 24K as salary, and the rest as distributions. The IRS forced re-characterizing distributions into salary up to 93K (the then-SS portion of the FICA limit), and the courts affirmed. Worth noting, that Watson didn't do all the work himself, and that was the reason that some of the income was allowed to be considered distribution. That wouldn't hold in a case where the sole shareholder was the only revenue producer, and that is exactly my point. I feel that it is important to add another paragraph about Nolo, newspaper articles, and charlatans on the Internet. YOU CANNOT RELY ON THEM. You cannot defend your position against IRS by saying \"\"But the article on Nolo said I can not pay SE taxes on my earnings!\"\", you cannot say \"\"Some guy called littleadv lost an argument with some other guy called Ben Miller because Ben Miller was saying what everyone wants to hear\"\", and you can definitely not say \"\"But I don't want to pay taxes!\"\". There's law, there are legal precedents. When some guy on the Internet tells you exactly what you want to hear - beware. Many times when it is too good to be true - it is in fact not true. Many these articles are written by people who are interested in clients/business. By the time you get to them - you're already in deep trouble and will pay them to fix it. They don't care that their own \"\"advice\"\" got you into that trouble, because it is always written in generic enough terms that they can say \"\"Oh, but it doesn't apply to your specific situation\"\". That's the main problem with these free advice - they are worth exactly what you paid for them. When you actually pay your CPA/Attorney - they'll have to take responsibility over their advice. Then suddenly they become cautious. Suddenly they start mentioning precedents and rulings telling you to not do things. Or not, and try and play the audit roulette, but these types are long gone when you get caught.\"",
"title": ""
},
{
"docid": "e283bf3970ba22d343d192d4c3512665",
"text": "If this was a public corporation (stock) and the investment was made in a non-registered account, then you can claim a capital loss. Capital losses are claimed against capital gains (not income), and can be carried back 3 years or carried forward indefinitely. Here's an article I've written on how to claim capital losses that may help.",
"title": ""
},
{
"docid": "de92587f4c34d0733ffc73a07c95127c",
"text": "FICA/SE taxes are not 30%. They are at most ~15%, including the employer portion. Employer also pays FUTA tax, and has additional payroll expenses (like fees and worker compensation insurance). The employee's FICA portion is limited up to a certain level of earnings (110100 this year, IIRC). Above it you only pay medicare taxes, not social security. S-Corp earnings are not taxed at 15%, these are not dividends. They're taxed at your ordinary income rate. You don't pay SE taxes on it, that's the only difference. I hope you're talking about tax treatment decision, because there are entirely different factors to keep in mind when you're organizing a business and making a decision between being it a LLC or a corporation. I believe you should pay some money to get a real advice that would apply to you, from a EA/CPA who would be doing the number-crunching (hopefully correctly). I'm a tax practitioner, and this answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.",
"title": ""
},
{
"docid": "ed78f35d2db90200e5a3c241f8caba8d",
"text": "In addition to the adjustment type in NL7's answer, there are a host of others. If there are any adjustments, form 8949 is required, if not, the gains can be separated into short and long-term and added together to be entered on Schedule D. Anything requiring an adjustment code in column F of the 8949 requires an entry in column G. Some other example entries for column F include: (see the 8949 instructions for a complete list) **A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. (from Pub17)",
"title": ""
}
] |
fiqa
|
bfa214a47d01c1d8798759033e3b7e71
|
Does borrowing from my 401(k) make sense in my specific circumstance?
|
[
{
"docid": "4b348c5aa2e214107ae6320010955db9",
"text": "Your comment regarding your existing finances is very relevant and helpful. You need to understand that generally in personal finance circles, when a strong earning 22 year-old is looking for a loan it's usually a gross spending problem. Their car costs $1,000 /month and their bar tabs are adding up so the only logical thing to do is get a loan. Most 22-year-olds don't have a mortgage soaking up their income, or a newborn. With all of this in mind I essentially agree with DStanley and, personally, and many people here would probably disagree, I'd stop the 401(K) contribution and use that money to pay the debt. You're still very young from a retirement standpoint, let the current balance ride and forego the match until the debt is paid. I think this is more about being debt free at 22 quickly than it's about how much marginal money could be saved via 401(k) or personal loan or this strategy or that strategy. I think at your age, you'll benefit greatly from simply being debt free. There are other very good answers on this site and other places regarding the pitfalls of a 401(k) loan. The most serious of which is that you have an extremely limited time to pay the entire loan upon leaving the company. Failure to repay in that situation incurs tax liability and penalties. From my quick math, assuming your contribution is 8% of $70,000 /year, you're contributing something in the neighborhood of $460/month to your 401(k). If you stopped contributing you'd probably take home a high $300 number net of taxes. It'll take around 20 months to pay the loan off using this contribution money without considering your existing payments, in total you're probably looking at closer to 15 months. You'll give up something in the neighborhood of $3,500 in match funds over the repayment time. But again, you're 22, you'll resume your contributions at 24; still WAY ahead of most people from a retirement savings standpoint. I don't think my first retirement dollar was contributed until I was about 29. Sure, retirement savings is important, but if you've already started at age 22 you're probably going to end up way ahead of most either way. When you're 60 you're probably not going to bemoan giving up a few grand of employer match in your 20s. That's what I would do. Edit: I actually like stannius's suggestion in the comments below. IF there's enough vested in your plan that is also available for withdrawal that you could just scoop $6,500 out of your 401(k) net of the 10% penalty and federal and state taxes (which would be on the full amount) to pay the debt, I'd consider that instead of stopping the prospective contributions. That way you could continue your contributions and receive the match contributions on a prospective basis. I doubt this is a legitimate option because it's very common for employers to restrict or forbid withdrawal of employee and/or employer contributions made during your employment, but it would be worth looking in to.",
"title": ""
},
{
"docid": "6564b2294945d1dccb8083ccda4e5f40",
"text": "The set of circumstances that 401k loans make sense, are very small. As you would expect yours is not one of them. You make 70K per year and need 6500. Interest rate is not your problem, budgeting is the problem. Pay this off in three months not the 48 you are proposing. Why is borrowing from your 401K a bad idea, especially in this case? Look, been there done that, been the over spender. The sooner that you learn how to handle your money the better. I was in my 40s when I learned, if you can do this now you can be really wealthy by the time you get to be my age. Dream a bit. How much margin would you have in your life if you were able to pay this off in 3 months? How much better would your life be? Go forth and do great things. I believe in you.",
"title": ""
},
{
"docid": "e2942910561dfc31946780b57e43f77f",
"text": "I completely agree with Pete that a 401(k) loan is not the answer, but I have an alternate proposal: Reduce your 401(k) contribution down to the 4% that you get a match on. If you are cash poor now and have debts to be cleaned up, those need to be addressed before retirement savings. You'll have plenty of time to make up the lost savings after you get the debts paid off. If your company matches 50% (meaning you have to contribute 8% to get the 4% match), then consider temporarily stopping your 401(k) altogether. A 100% match is very hard to give up, but a 50% match is less difficult. You have plenty of years left ahead of you to make up the lost match. Plus, the pain of knowing you're leaving money on the table will incentivize you to get the loans paid as quickly as possible. It seems to me that I would be reducing middle to high interest debt while also saving myself $150 per month. No, you'd be deferring $150 per month for an additional two years, and not reducing debt at all, just moving it to a different lender. Interest rate is not your problem. Right now you're paying less than $30 per month in interest on these 3 loans and about $270 in principal, and at the current rate should have them paid off in about 2 years. You're wanting to extend these loans to 4 years by borrowing from your retirement savings. I would buckle down, reduce expenses wherever possible (cable? cell phone? coffee? movies? restaurants?) until you get these debts paid off. You make $70,000 per year, or almost $6,000 per month. I bet if you try hard enough you can come up with $1,100 fairly quickly. Then the next $1,200 should come twice as fast. Then attack the next $4,000. (You can argue whether the $1,200 should come first because of the interest rate, but in the end it doesn't matter - either one should be paid off very quickly, so the interest saved is negligible) Maybe you can get one of them paid off, get yourself some breathing room, then loosen up a little bit, but extending the pain for an additional two years is not wise. Some more drastic measures:",
"title": ""
},
{
"docid": "913bdf1f8cd101e41e733ce3a8daf864",
"text": "I see you've marked an answer as accepted but I MUST tell you that STOPPING your 401k contribution all together is a bad idea. Your company match is 100% rate of return(or 50% depending on structure). I don't care what market you look at, or how bad a loan you take out, you will not receive 100% rate of return, or be charged 100% interest. Further, taking out a loan against your 401k effectively does two things: It is a loan that must be repaid according to the terms of your 401k AND in every 401k I've ever encountered, you cannot make contributions to the 401k until the loan is repaid. This in effect stops your contributions, and will almost certainly save you very little on your interest rates on your current loans. I have 4 potential solutions that may help achieve your goal without sacrificing your 401k match and transferring the debt from one lender to another, but they are conditional. Is your company match 100% up to 4% of your salary, or 50% of your contribution (up to a limit you have not yet reached)? This is important. If it is 100% up to 4%, stop committing the additional 4% and use that to pay down your debt...and after ward set up that 4% as auto pay into an IRA, not into the 401k. An IRA will make you more money because YOU have control over its management, not your employer. If it is 50% match, contribute until the match is met because you cannot get 50% rate of return anywhere, then take your additional monies and get an IRA. As far as your debt, in this scenario simply suck it up and pay it as is. You will lose far more than you gain by stopping your contributions. If you simply must reduce your expenses by 150$ month try refinancing the mortgage and rolling the 6500$ into it. If you get a big enough drop in the interest rate you could still end up paying less. OR If you cannot make the gain there, try snowballing the three payments. You do this by calling your student loan vendor and telling them you need to make much smaller payments, like even zero depending on the type of loan. Then take ALL of the money you are currently spending on the 3 loans and put into the car payment. When it's gone, roll the whole thing into the higher interest student loan, then finally roll it all into the last student loan. You'll pay it off faster, and student loans have lots of laws and regulations regarding working with payers to keep them paying something without breaking them. WHATEVER YOU DO, DO NOT STOP YOUR CONTRIBUTIONS. 50% OR 100%, THAT MONEY IS GUARANTEED AT A HIGHER RATE OF RETURN THAN YOU CAN GET ANYWHERE, ESPECIALLY GUARANTEED.",
"title": ""
},
{
"docid": "58f374b3ac883e18ece5a9fca4e36f9d",
"text": "\"You're getting great wisdom and options. Establishing your actionable path will require the details that only you know, such as how much is actually in each paycheck (and how much tax is withheld), how much do you spend each month (and yearly expenses too), how much spending can you actually cut or replace, how comfortable are you with considering (or not considering) unexpected/emergency spending. You mentioned you were cash-poor, but only you know what your current account balances are, which will affect your actions and priorities. Btw, interestingly, your \"\"increase 401k contributions by 2% each year\"\" will need to end before hitting the $18K contribution limit. I took some time and added the details you posted into a cash-flow program to see your scenario over the next few years. There isn't a \"\"401k loan\"\" activity in this program yet, so I build the scenario from other simple activities. You seem financially minded enough to continue modeling on your own. I'm posting the more difficult one for you (borrow from 401k), but you'll have to input your actual balances, paycheck and spending. My spending assumptions must be low, and I entered $70K as \"\"take-home,\"\" so the model looks like you've got lots of cash. If you choose to play with it, then consider modeling some other scenarios from the advice in the other posts. Here's the \"\"Borrow $6500 from 401k\"\" scenario model at Whatll.Be: https://whatll.be/d1x1ndp26i/2 To me, it's all about trying the scenarios and see which one seems to work with all of the details. The trick is knowing what scenarios to try, and how to model them. Full disclosure: I needed to do similar planning, so I wrote Whatll.Be and I now share it with other people. It's in beta, so I'm testing it with scenarios like yours. (Notice most of the extra activity occurs on 2018-Jan-01)\"",
"title": ""
},
{
"docid": "1d0c8618a8d82e57dc6c026b11c70958",
"text": "\"Since most of the answers are flawed in their logic, I decided to respond here. 1) \"\"What if you lose your job, you can't pay back the loan\"\" The point of the question was to reduce the amount paid per month. So obviously it would be easier to pay off the 401k loan rather than the 3 separate loans that are in place now. Also it's stated in the question that there's a mortgage, a child with medical costs, a car loan, student loans, other debt. On the list of priorities the 401k loan does not make the top 10 concerns if they lost their job. 2) \"\"Consider stopping the 401k contribution\"\" This is such a terrible idea. If you make the full contribution to the 401k and then just withdraw from the 401k rather than getting a loan you only pay a 10% penalty tax. You still get 90% of the company match. 3) \"\"You lose compound interest\"\" While currently the interest you get on a 401k (depending on how that money is invested) is higher than the interest you pay on your loans (which means it would be advantageous to keep the loans and keep contributing to the 401k), it's very unreliable and might even go down. I think you actually have a good case for getting a loan against the 401k if a) You have your spending and budget under control b) Your income is consistent c) You are certain that the loan will be paid back. My suggestion would be to take a loan against the 401k, but keep the current spending on the loans consistent. If you don't need the extra $150 per month, you really should try to pay off the loans as fast as you can. If you do need the $150 extra, you are lowering the mental threshold for getting more loans in the future.\"",
"title": ""
}
] |
[
{
"docid": "0297d5dd35783ea82356968be4f1090a",
"text": "You need to talk to the 401(k) administrator, or HR, for the exact details. Typically, you can only borrow 50% of your balance, and can pay it back up to a ten year term. Some plans have different rules, this is just a common offering. The larger issue is whether the loan prevents you from making further deposits till repaid. This would cost you not just the growth in the account, but the matched deposits for those years. That would be a deal killer for me. If that were the case, I'd drop my deposits to only get the match, and save for a real deposit without the loan.",
"title": ""
},
{
"docid": "7515b32ac0cc666f93929353cfda8291",
"text": "\"A) Yes, it does accomplish the goal of adding more money, but the money is in lieu of any return you can earn while the loan is outstanding. If you somehow knew exactly which periods where going to run negative, and you took a 401k loan during that time, you'd be in pretty good shape, but if you had that information you'd probably be ruling the world in short order and wouldn't care much about a measly 401k. B) It's a nice idea, but unfortunately you are not allowed to set your own interest rate. (If you could your idea would work perfectly.) The interest rate is bank specific, and is typically 1-2 points over prime. But if your plan was to leave your money sitting in cash or low interest bearing accounts anyway, the loan does actually achieve the goal of \"\"getting more money in there\"\". Though it's your money; you aren't \"\"earning\"\" it.\"",
"title": ""
},
{
"docid": "56aca2aa766b7e980642a5b02da78a3b",
"text": "\"If the difference in performance is worth it, consider \"\"borrowing\"\" from your 401k to put into the Roth. You pay it back, but you can stretch it out over time, and the interest charged is actually yours, because you borrowed from yourself. But you can only borrow half of the account and you have to pay it back before you can do another loan.\"",
"title": ""
},
{
"docid": "d2aa789aea4a70ef0c2b8cac83d5563e",
"text": "Rather than rolling the 401(k) to a new employer's plan, you should roll it into a traditional IRA. You get more options for the money, there's no limit on how much you can roll over, and you have more control over the money. If you do a direct rollover, there's no taxes or penalties involved. I'd recommend against taking any money out of the 401(k). With the numbers you give above, it's like borrowing money at 31.5% interest, which is pretty high, and you're sacrificing your future retirement. If you leave that money alone to grow with compounding, you'll have a lot more when you retire. If you're not familiar with the concept of compound interest, it's worth reading up on - the numbers will blow you away. At the very least, if you desperately need to get $3000 out of it, take out just enough to net $3000 after taxes and penalties (not quite $4400 using the numbers you give) and do a rollover with the rest. At least that way, you're keeping more in the IRA (just over $8600, vs the $5000 in your proposed scenario). Overall, I really recommend you find a way to accomplish your goals without touching your retirement savings.",
"title": ""
},
{
"docid": "d0f6d3adb971e2094c20937301b78ed8",
"text": "My opinion is that in general, it is probably not a good idea to borrow at a cost in order to make your RRSP contribution. Banks, of course, have an interest in loaning you money. Don't expect their literature to be objective on the matter! They are selling you a product and the advice is biased. What better way to double-dip than to get guaranteed interest payments from you, as well as ongoing fees for (probably also) getting your loan money invested in their high-fee mutual funds? A year's RRSP contribution room allowance isn't use it or lose it — unlike 401k contribution allowances in the U.S.. That is, unused RRSP contribution room accumulates and you can take advantage of it in later years. If we couldn't carry our RRSP contribution room over, I might feel different about the general case for RRSP loans. Yet there are two specific cases I can think of where it may make sense to borrow and pay back: (a possible case) ... if your tax rate is currently in a high bracket (e.g. 46%), and you anticipate being in a lower income and bracket next year (e.g. 35%), then it would make sense to take advantage of the higher tax savings in the current tax year. If you waited until the following year to take the deduction, you'd lose out on 11% of the deducted amount. For a typical person whose income is level or increasing from year to year, this isn't likely to be applicable, but it could help somebody who is going on leave or otherwise has irregular income. (a foolish case) ... if you knew, somehow, that you could realize a return on your invested RRSP money exceeding the pre-tax earnings required to pay the interest on the RRSP loan. However, I would suggest this is foolish bet to make. The interest you pay is guaranteed, but the return you are expected to get is probably not (or if it is, it is probably a return lower than what your bank wants to charge on the loan.) If for some reason it does make sense for you, take the money and invest it somewhere better than the high-fee mutual funds the bank is also pushing.",
"title": ""
},
{
"docid": "d056a5ebd67c4f992912e9eea5b149a4",
"text": "The other answers assumed student loan debt -- and for that, it's rarely worth it (unless your company only offers managed plans w/ really bad returns, or the economy recovers to the point where banks are paying 5% again on money market accounts) ... but if it's high rate debt, such as carrying a credit card debt, and the current rate of returns on the 401k aren't that great at the time, it would be worth doing the calculations to see if it's better to pay them down instead. If you're carrying extremely high interest debt (such as 'payday loans' or similar), it's almost always going to be worth paying down that debt as quickly as possible, even if it means forgoing matching 401k payments. The other possible reason for not taking the matching funds are if the required contributions would put you in a significant bind -- if you're barely scraping by, and you can't squeeze enough savings out of your budget that you'd risk default on a loan (eg, car or house) or might take penalties for late fees on your utilities, it might be preferable to save up for a bit before starting the contributions -- especially if you've maxed your available credit so you can't just push stuff to credit cards as a last resort.",
"title": ""
},
{
"docid": "c6f6677d20e230c40d920a308650385e",
"text": "This is a purely numerical statement that you should be able to check (and you CPA friend should be able to prove, if true). The general advice, I think, is that you should not use your retirement funds this way, but general advice does not apply equally well to everyone. You didn't give enough information for us to compute the answer, so you're on your own there. If you do this (or have the CPA do it), make sure that it accounts for all pluses and minuses that you'll have. On the minus side, you get any direct penalties in addition to potential loss of right to contribute for a period of time, so make sure you consider both aspects, especially to any degree that you would lose an employer contribution or match. Also consider the fact that the money already in is tax advantaged, and you won't be able to replace that amount later. So there will be a compounding effect to what was lost. (This may or may not be balanced by a mortgage interest deduction down the road - My guess is that it will not, but, again, the details of your situation may dictate a different path. The mortgage interest deduction decreases each year as you pay more principal whereas the compounding from being tax deferred tends to increase each year.)",
"title": ""
},
{
"docid": "945f99b0a08fd83e7d63c95edc350f09",
"text": "Would I be taxed at my personal income tax rate upon withdrawal of the funds for this loan from my professionally managed, balanced 401k (not Roth funds)? Yes. This is a regular distribution. Why wouldn't you be taxed? What's gifting has to do with anything? If taxable, this would move me to the next higher tax bracket. Depending on your other income - it may, or may not. Whether or not taxable when pulling funds out of the investment account, when I'm repaid, do I owe Federal tax only on the interest income portion of repayment funds or on the lump sum & interest received (all of which which would return to my retirement account in lump)? Only interest. And you will not return it to your retirement account. Not in a lump and not in installments and not in any other way.",
"title": ""
},
{
"docid": "00155b67fc1e919484a70eadd7488566",
"text": "It would help if we had numbers to walk you through the analysis. Current balance, rate, remaining term, and the new mortgage details. To echo and elaborate on part of Ben's response, the most important thing is to not confuse cash flow with savings. If you have 15 years to go, and refinance to 30 years, at the rate rate, your payment drops by 1/3. Yet your rate is identical in this example. The correct method is to take the new rate, plug it into a mortgage calculator or spreadsheet using the remaining months on the current mortgage, and see the change in payment. This savings is what you should divide into closing costs to calculate the breakeven. It's up to you whether to adjust your payments to keep the term the same after you close. With respect to keshlam, rules of thumb often fail. There are mortgages that build the closing costs into the rate. Not the amount loaned, the rate. This means that as rates dropped, moving from 5.25% to 5% made sense even though with closing costs there were 4.5% mortgages out there. Because rates were still falling, and I finally moved to a 3.5% loan. At the time I was serial refinancing, the bank said I could return to them after a year if rates were still lower. In my opinion, we are at a bottom, and the biggest question you need to answer is whether you'll remain in the house past your own breakeven time. Last - with personal finance focusing on personal, the analysis shouldn't ignore the rest of your balance sheet. Say you are paying $1500/mo with 15 years to go. Your budget is tight enough that you've chosen not to deposit to your 401(k). (assuming you are in the US or country with pretax retirement account options) In this case, holding rates constant, a shift to 30 years frees up about $500/mo. In a matched 401(k), your $6000/yr is doubled to $12K/year. Of course, if the money would just go in the market unmatched, members here would correctly admonish me for suggesting a dangerous game, in effect borrowing via mortgage to invest in the market. The matched funds, however are tough to argue against.",
"title": ""
},
{
"docid": "da8c84c95dbf3d06800a6611c57b1596",
"text": "\"The original question was aimed at early payment on a student loan at 6%. Let's look at some numbers. Note, the actual numbers were much lower, I've increased the debt to a level that's more typical, as well as more likely to keep the borrower worried, and \"\"up at night.\"\" On a $50K loan, we see 2 potential payoffs. A 6 year accelerated payoff which requires $273.54 extra per month, and the original payoff, with a payment of $555.10. Next, I show the 6 year balance on the original loan terms, $23,636.44 which we would need to exceed in the 401(k) to consider we made the right choice. The last section reflects the 401(k) balance with different rates of return. I purposely offer a wide range of returns. Even if we had another 'lost decade' averaging -1%/yr, the 401(k) balance is more than 50% higher than the current loan debt. At a more reasonable 6% average, it's double. (Note: The $273.54 deposit should really be adjusted, adding 33% if one is in the 25% bracket, or 17.6% if 15% bracket. That opens the can of worms at withdrawal. But let me add, I coerced my sister to deposit to the match, while married and a 25%er. Divorced, and disabled, her withdrawals are penalty free, and $10K is tax free due to STD deduction and exemption.) Note: The chart and text above have been edited at the request of a member comment. What about an 18% credit card? Glad you asked - The same $50K debt. It's tough to imagine a worse situation. You budgeted and can afford $901, because that's the number for a 10 year payoff. Your spouse says she can grab a extra shift and add $239/mo to the plan, because that' the number to get to a 6 year payoff. The balance after 6 years if we stick to the 10 year plan? $30,669.82. The 401(k) balances at varying rates of return again appear above. A bit less dramatic, as that 18% is tough, but even at a negative return the 401(k) is still ahead. You are welcome to run the numbers, adjust deposits for your tax rate and same for withdrawals. You'll see -1% is still about break-even. To be fair, there are a number of variables, debt owed, original time for loan to be paid, rate of loan, rate of return assumed on the 401(k), amount of potential extra payment, and the 2 tax rates, going in, coming out. Combine a horrific loan rate (the 18%) with a longer payback (15+ years) and you can contrive a scenario where, in fact, even the matched funds have trouble keeping up. I'm not judging, but I believe it's fair to say that if one can't find a budget that allows them to pay their 18% debt over a 10 year period, they need more help that we can offer here. I'm only offering the math that shows the power of the matched deposit. From a comment below, the one warning I'd offer is regarding vesting. The matched funds may not be yours immediately. Companies are allowed to have a vesting schedule which means your right to this money may be tiered, at say, 20%/year from year 2-6, for example. It's a good idea to check how your plan handles this. On further reflection, the comments of David Wallace need to be understood. At zero return, the matched money will lag the 18% payment after 4 years. The reason my chart doesn't reflect that is the match from the deposits younger than 4 years is still making up for that potential loss. I'd maintain my advice, to grab the match regardless, as there are other factors involved, the more likely return of ~8%, the tax differential should one lose their job, and the hope that one would get their act together and pay the debt off faster.\"",
"title": ""
},
{
"docid": "1636550ce3e207462a8bd1aff3e49301",
"text": "The first step is to contact the company you are considering using as an administrator. Ask if they have a loan provision. For what it's worth, I looked at Schwab, and it seems to indicate they do not offer loans against this type of 401(k). That doesn't mean no one does, just that you may need to look around.",
"title": ""
},
{
"docid": "73cb4a5a8b550837de047e034d0e4582",
"text": "One should fund a 401(k) or matched retirement account up to the match, even if you have other debt. Long term, you will come out ahead, but you must be disciplined in making the payments. If one wants to point out the risk in a 401(k), I'd suggest the money need not be invested in stocks, there's always a short term safe option.",
"title": ""
},
{
"docid": "8278b4e51960984a764e5fa69a584add",
"text": "401K accounts, both regular and Roth, generally have loans available. There are maximum amounts that are based on federal limits, and your balance in the program. These rules also determine the amount of time you have to repay the loan, and what happens if you quit or are fired while the loan is outstanding. In these loan programs the loan comes from your 401K funds. Regarding matching funds. This plan is not atypical. Some match right away, some make you wait. Some put in X percent regardless of what you contribute. Some make you opt out, others make you opt in. Some will direct their automatic amounts to a specific fund, unless you tell them otherwise. The big plus for the fund you describe is the immediate vesting. Some companies will match your investments but then only partially vest the funds. They don't want to put a bunch of matching funds into your account, and then have you leave. So they say that if you leave before 5 years is up, they will not let you keep all the funds. If you leave after 2 years you keep 25%, if you leave after 3 years you keep 50%... The fact they immediately vest is a very generous plan.",
"title": ""
},
{
"docid": "86e0bb3dc4107664219376ebcca5c4d4",
"text": "\"To answer the first part of your question: yes, I've done that! I did even a bit more. I once had a job that I wasn't sure I'd keep and the economy wasn't great either. In case my next employer wouldn't let me contribute to a 401(k) from day one, and because I didn't want to underfund my retirement and be stuck with a higher tax bill - I \"\"front-loaded\"\" my 401(k) contributions to be maxed out before the end of the year. (The contribution limits were lower than $16,500/year back then :-)) As for the reduced cash flow - you need of course a \"\"buffer\"\" account containing several months worth of living expenses to afford maxing out or \"\"front-loading\"\" 401(k) contributions. You should be paying your bills out of such buffer account and not out of each paycheck. As for the reduced cash flow - I think large-scale 401(k)/IRA contributions can crowd out other long-term saving priorities such as saving for a house down payment and the trade-off between them is a real concern. (If they're crowding out basic and discretionary consumer expenses, that's a totally different kind of problem, which you don't seem to have, which is great :-)) So about the trade-off between large-scale 401(k) contributions and saving for the down payment. I'd say maxing out 401(k) can foster the savings culture that will eventually pay its dividends. If, after several years of maxing out your 401(k) you decide that saving for the house is the top priority, you'll see money flow to the money-market account marked for the down payment at a substantial monthly rate, thanks to that savings culture. As for the increasing future earnings - no. Most people I've known for a long time, if they saved 20% when they made $20K/year, they continued to save 20% or more when they later made $100K/year. People who spent the entire paycheck while making $50K/year, always say, if only I got a raise to $60K/year, I'd save a few thousand. But they eventually graduate to $100K/year and still spend the entire paycheck. It's all about your savings culture. On the second part of your question - yes, Roth is a great tool, especially if you believe that the future tax rates will be higher (to fix the long-term budget deficits). So, contributing to 401(k) to maximize the match, then max out Roth, as others suggested, is a great advice. After you've done that, see what else you can do: more 401(k), saving for the house, etc.\"",
"title": ""
},
{
"docid": "c3c3f7d8b8ea34d9e2946cdc47094ef5",
"text": "What you are seeing is the effects of inflation. As money becomes less valuable it takes more of it to buy physical things, be they commodities, shares in a company's stock, and peoples time (salaries). Just about the only thing that doesn't track inflation to some degree is cash itself or money in an account since that is itself what is being devalued. So the point of all this is, buying anything (a house, gold, stocks) that doesn't depreciate (a car) is something of a hedge against inflation. However, don't be tricked (as many are) into thinking that house just made you a tidy sum just because it went up in value so much over x years. Remember 1) All the other houses and things you'd spend the money on are a lot more expensive now too; and 2) You put a lot more money into a house than the mortgage payment (taxes, insurance, maintenance, etc.) I'm with the others though. Don't get caught up in the gold bubble. Doing so now is just speculation and has a lot of risk associated with it.",
"title": ""
}
] |
fiqa
|
29fd7df06eda0868f29268bdb16cb2c3
|
How to open a Mega Money Market account without an ssn?
|
[
{
"docid": "6e1530ecf31d7428453dc1e107cfef73",
"text": "According to the IRS: Aliens who are not eligible to apply for a U.S. social security number, or who do not meet the Social Security Administration's evidence requirements for an SSN, may apply for an Individual Taxpayer Identification Numbers (ITIN) from the Internal Revenue Service if they have a valid tax reason for needing an ITIN, as explained in the Form W-7 instructions. Seeing as you don't have a valid tax reason for an ITIN, your request will probably be denied by the IRS.",
"title": ""
}
] |
[
{
"docid": "69b7e3729d0c4a683b0becbcb6d96ae6",
"text": "There's no requirement of US citizenship to open a bank account in the US. Any person, citizen or not, can do that. I don't know where this assumption of yours come from, but it is false. So the easiest solution is to open a bank account for your nephew next time he visits the US and get him an ATM card from that account. You can then deposit money to that account as much as you want (beware of the gift tax consequences). If he doesn't want to travel to the US and cannot open a US bank account remotely from Russia (which is probably the case), then follow the @BrenBarn's suggestion: have him open a bank account in Russia and just wire money there. Having a foreigner tapping freely into your own personal bank account may cause legal issues both with regards to gift tax and money laundering provisions that require you to certify that the money on the account is yours only. Also, check if there's an issue for a Russian resident to have control over foreign accounts (there's definitely such an issue for a US resident, Russians are generally not far behind when it comes to government oppression).",
"title": ""
},
{
"docid": "2b0575f84d48dc745cabb99f48049fcd",
"text": "No, in your situation it is not possible. Mostly, only three types of accounts are available to individuals: So, a complete foreigner can open account in India, only if he is working in India, a type of Savings account, and that account too will be linked to his resident status. If he leaves work, he needs to close this account. Edit: There are business accounts, and current accounts, but those are available only to businesses. Further read at SBI gives a good snapshot",
"title": ""
},
{
"docid": "4e7d074138d08232e36f451e8793bc49",
"text": "I had to open a bank account in the US without having the right paperwork initially (SSN really). All the bank asked me to do was fill in a W8 form in lieu (instead) of the social security number.",
"title": ""
},
{
"docid": "3389c170e78dc855d989c8992a2db43c",
"text": "But the free market opted to use ssn because it was easier and available and only required 1 field versus I'd and state. Those state IDs also have variable lenghts, some have letters and others don't. If you've ever written software to handle state driver's license you know what I mean, I have and it's a mess. Theres all kinds of gotchas that you just don't have with a nationwide standard like SSN.",
"title": ""
},
{
"docid": "0383a3d4efc2433af856ac82cdaa3e04",
"text": "\"Do you guys know any options that are accessible to any global citizen? Prepaid and stored value cards are anonymous. For an arbitrary reason, the really anonymous ones only allow you to load $500 but there is no regulation that dictates this amount. In the USA, these cards are exempt from being declared at border crossings. Not because they look like credit cards, but because they are exempt by the US Treasury and Customs. The cons is that there are generally fees to use them. US DOJ has done research showing that some groups take advantage of the exemption moving upwards of $50,000 a day between borders, but Congress is fine with this exemption and the burden is always on the government to determine \"\"illicit origin\"\". Stigmatizing how money is moved is only a 30 year old phenomenon, but many free nations do not really have capital controls, they only care that you pay taxes and that the integrity of their stock markets are upheld. Aside from that there are no qualms about anonymity, except from your neighbors but they dont matter for a global citizen. In theory, the UK should have more flexibility in anonymity options, such as stored value cards with higher limits.\"",
"title": ""
},
{
"docid": "fcd63746460412b016148057d123dec0",
"text": "It looks like your best option is to go with an online broker. There are many available. Some of them won't let you open an account online as a foreign national but will allow you to open one through the mail. See more about that http://finance.zacks.com/can-nonus-citizen-trade-us-stocks-9654.html Also keep in mind that you will need to pay taxes on any capital gains made through selling http://www.irs.gov/pub/irs-pdf/p519.pdf",
"title": ""
},
{
"docid": "f7cf47e5739f6c4898bf5d089140baa9",
"text": "Yes, you will need to create an actual account. However, when all is done and you are about to log in, there will be an option on whether you want to log in as a live trader or a paper trader. Select the paper trading option and log in and get rich off fake money.",
"title": ""
},
{
"docid": "e4804894dbb9e010b600e66e16c27c06",
"text": "You can open an account in US without having SSN. You need to be physically present to open the account.",
"title": ""
},
{
"docid": "6d78280a06f17c17e2f6b70609018051",
"text": "\"No you don't have to be super-rich. But... the companies do not have to sell you shares, and as others mention the government actively restricts and regulates the advertising and sales of shares, so how do you invest? The easiest way to obtain a stake is to work at a pre-IPO company, preferably at a high level (e.g. Director/VP of under water basket weaving, or whatever). You might be offered shares or options as part of a compensation package. There are exemptions to the accredited investor rule for employees and a general exemption for a small number of unsolicited investors. Also, the accredited investor rule is enforced against companies, not investors, and the trend is for investors to self-certify. The \"\"crime\"\" being defined is not investing in things the government thinks are too risky for you. Instead, the \"\"crime\"\" being defined is offering shares to the public in a small business that is probably going to fail and might even be a scam from the beginning. To invest your money in pre-IPO shares is on average a losing adventure, and it is easy to become irrationally optimistic. The problem with these shares is that you can't sell them, and may not be able to sell them immediately when the company does have an IPO on NASDAQ or another market. Even the executive options can have lock up clauses and it may be that only the founders and a few early investors make money.\"",
"title": ""
},
{
"docid": "8695e8030ee3269d15f22929ed6fbf9f",
"text": "I know of websites that do this, but I don't know of banks that do. Is there any reason you want to do this at a bank rather than use a service? My main concern with using a bank for this would be the risk of overdraft fees",
"title": ""
},
{
"docid": "ebe0a78e3bba1b3a0f941bbfbe1e09ac",
"text": "\"I think you will find it hard to do. There are money laundering regulations which require you to provide proof of address when opening an account. I don't know for certain if they require an UK address, but even if they don't, it's very likely that individual banks etc will require that. I doubt that they will view you as a profitable customer for them, since you would not be using the account as your \"\"main\"\" account. Although having a job isn't a legal requirement, in practice I think it's the only way you can get an account without having been resident in the country for a while. My company employs a significant number of people from abroad and they typically need support from the company to open an account when they first move. One thing you could investigate is opening an account with some international bank with branches both in Hungary and the UK, and asking them to arrange the UK account for you. One example of such a bank is HSBC. However such banks will typically charge you a significant amount for the privilege - for example with HSBC you need a \"\"premier account\"\" to get this kind of service.\"",
"title": ""
},
{
"docid": "9e7021a5c1a4e7b75af53a603553cf8e",
"text": "\"SAR filers can check a box to indicate that SSN is \"\"Unknown\"\". It's unlikely that you could get over $10K in chips without first disclosing your SSN, as casinos track your cash out totals based on physical description (hair color, clothing, etc). As you approach $10K they will require ID and SSN, which they verify for accuracy against a federal database via name and DOB matching. More here: https://en.wikipedia.org/wiki/Know_your_customer\"",
"title": ""
},
{
"docid": "1ca195738fbc2504e5084cc0a60951cd",
"text": "\"Open a personal account to link SQUARE with, open a savings account with same bank. Register as \"\"PERSONAL USE\"\", make as many transactions you want for whatever you want $5.00 to $1,000.00 or more, you get paid, square collects a fee. Money is in your \"\"personal account\"\" in 24 hrs, transfer it to your savings acct. 2 years now no issue. I've done the EIN, vendors license, registering business crap, if you work for yourself for private citizens it's none of anyone else's concern.\"",
"title": ""
},
{
"docid": "c55c405c834c45e2dcf101bef19613ad",
"text": "The answer to this question can be found in the related question Is there any online personal finance software without online banking?",
"title": ""
},
{
"docid": "bd79b85d692bf9e419a41ca027831ac8",
"text": "You don't have much choice other than to open an account in your business name, then do a money transfer, as @DJClayworth says. You will not without providing your name and street address and possibly other information that you may consider to be of a private nature. This is due to laws about fraud, money laundering and consumer protection. I'm not saying that's what you have in mind! But without accountability of the sort provided by names and street addresses, banks would be facilitating crimes of many sorts, which is why regulatory agencies enforce disclosure requirements.",
"title": ""
}
] |
fiqa
|
031e4034f659f2a745e43e65212e8a56
|
How can I save LLC fees when investing in Arizona real estate from California
|
[
{
"docid": "b11c1807668b0b0b3630b0e41f2d1cd6",
"text": "You won't be able to avoid the $800 fee. CA FTB has a very specific example, which is identical to your situation (except that they use NV instead of AZ), to show that the LLC has liability in California. State of formation is of no matter, you'll just be liable for fees in that state in addition to the CA fees. This is in fact a very common situation (that's why they have this as an example to begin with). See CA FTB 568 booklet. The example is on page 14. I suggest forming the LLC in AZ/CA and registering it as a foreign entity in the other state (AZ if formed in CA, the better option IMHO, or CA if formed in AZ). You'll have tax liability in both the states, AZ taxes can be credited towards the CA taxes. Instead of forming LLC, you can cover your potential liability with sufficient insurance coverage.",
"title": ""
}
] |
[
{
"docid": "ffbcdf2c785589d3691d7e7b1ae061e3",
"text": "Every brokerage is different, on all of their websites they have an actual list of fees. There are tons of different charges you may encounter.",
"title": ""
},
{
"docid": "e86ce0a96fa86c9a6148bec403e66783",
"text": "\"The $100,000 is taxed separately as \"\"ordinary income\"\". The $350,000 is taxed at long-term capital gains of 15%. Capital gains is not taxed at 20% until $415,050. Even though $100,000 + 350,000 = $450,000, only $350,000 can be taxed at capital gains. The total ordinary income tax burden will be $31,986 if single, in California. Caveat: By creating a holdings corporation (C-corp), you can section 351 that $100,000 into the C-corp for tax deferment, which won't be taxed until you take money from the corporation. Since you will hold 100% of the voting stock, all distributions will be considered pro rata. Additionally, you can issue yourself a dividend under the rules of 26 USC §§243-246 (a greather-than-80% shareholder who receives a dividend can write-off 100% of said dividend). As long as that dividend doesn't trigger §§1.243-246 of The Regulations by keeping the distribution just under 10% of E&P i.e. $10,000. Wages are deductible against basis so pay yourself $35,000 and keep $55,000 in the corporation and you can decrease the total liabilities down to $22,000 from $31,000, which includes the CA franchise tax. You don't have to pay yourself any money out a corporation to use the money.\"",
"title": ""
},
{
"docid": "9b5ad6c50ddd6f92617ff2bf39a2fb69",
"text": "That may become complicated depending on the State laws. In some States (California for example), LLCs are taxed on gross receipts, so you'll be paying taxes on paying money to yourself. In other States this would be a no-op since the LLC is disregarded. So you need to check your State law. I assume the LLC is not taxed as a corporation since that would be really stupid of course, but if it is then it adds the complexity of the Federal taxes on top as well (corporate entity will pay taxes on your rent, and you'll pay taxes on your dividends to get the money back). The best option would be to take that property out of the LLC (since there's no point in it anyway, if you're the tenant).",
"title": ""
},
{
"docid": "4e2f45c23e571baea4581cfc708711d9",
"text": "\"For any accounts where you have a wish to keep track of dividends, gains and losses, etc., you will have to set up a an account to hold the separately listed securities. It looks like you already know how to do this. Here the trading accounts will help you, especially if you have Finance:Quote set up (to pull security prices from the internet). For the actively-managed accounts, you can just create each managed account and NOT fill it with the separate securities. You can record the changes in that account in summary each month/year as you prefer. So, you might set up your chart of accounts to include these assets: And this income: The actively-managed accounts will each get set up as Type \"\"Stock.\"\" You will create one fake security for each account, which will get your unrealized gains/losses on active accounts showing up in your trading accounts. The fake securities will NOT be pulling prices from the internet. Go to Tools -> Securities Editor -> Add and type in a name such as \"\"Merrill Lynch Brokerage,\"\" a symbol such as \"\"ML1,\"\" and in the \"\"Type\"\" field input something like \"\"Actively Managed.\"\" In your self-managed accounts, you will record dividends and sales as they occur, and your securities will be set to get quotes online. You can follow the general GnuCash guides for this. In your too-many-transactions actively traded accounts, maybe once a month you will gather up your statements and enter the activity in summary to tie the changes in cost basis. I would suggest making each fake \"\"share\"\" equal $1, so if you have a $505 dividend, you buy 505 \"\"shares\"\" with it. So, you might have these transactions for your brokerage account with Merrill Lynch (for example): When you have finished making your period-end summary entries for all the actively-managed accounts, double-check that the share balances of your actively-managed accounts match the cost basis amounts on your statements. Remember that each fake \"\"share\"\" is worth $1 when you enter it. Once the cost basis is tied, you can go into the price editor (Tools -> Price Editor) and enter a new \"\"price\"\" as of the period-end date for each actively-managed account. The price will be \"\"Value of Active Acct at Period-End/Cost of Active Acct at Period-End.\"\" So, if your account was worth $1908 but had a cost basis of $505 on Jan. 31, you would type \"\"1908/505\"\" in the price field and Jan. 31, 2017 in the date field. When you run your reports, you will want to choose the price source as \"\"Nearest in Time\"\" so that GnuCash grabs the correct quotes. This should make your actively-managed accounts have the correct activity in summary in your GnuCash income accounts and let them work well with the Trading Accounts feature.\"",
"title": ""
},
{
"docid": "918130a1c8eeb5200beae8679af18034",
"text": "Reading the plan documentation, yes, that is what it means. Each purchase by bank debit, whether one-time or automatic, costs $2 plus $0.06 per share; so if you invested $50, you would get slightly less than $48 in stock as a result (depending on the per-share price). Schedule of Fees Purchases – A one-time $15.00 enrollment fee to establish a new account for a non-shareholder will be deducted from the purchase amount. – Dividend reinvestment: The Hershey Company pays the transaction fee and per share* fee on your behalf. – Each optional cash purchase by one-time online bank debit will entail a transaction fee of $2.00 plus $0.06 per share* purchased. – Each optional cash purchase by check will entail a transaction fee of $5.00 plus $0.06 per share* purchased. – If funds are automatically deducted from your checking or savings account, the transaction fee is $2.00 plus $0.06 per share* purchased. Funds will be withdrawn on the 10th of each month, or the preceding business day if the 10th is not a business day. – Fees will be deducted from the purchase amount. – Returned check and rejected ACH debit fee is $35.00.",
"title": ""
},
{
"docid": "98b07a3bada1706a14716f012eaff827",
"text": "\"Accounting for this properly is not a trivial matter, and you would be wise to pay a little extra to talk with a lawyer and/or CPA to ensure the precise wording. How best to structure such an arrangement will depend upon your particular jurisdiction, as this is not a federal matter - you need someone licensed to advise in your particular state at least. The law of real estate co-ownership (as defined on a deed) is not sufficient for the task you are asking of it - you need something more sophisticated. Family Partnership (we'll call it FP) is created (LLC, LLP, whatever). We'll say April + A-Husband gets 50%, and Sister gets 50% equity (how you should handle ownership with your husband is outside the scope of this answer, but you should probably talk it over with a lawyer and this will depend on your state!). A loan is taken out to buy the property, in this case with all partners personally guaranteeing the loan equally, but the loan is really being taken out by FP. The mortgage should probably show 100% ownership by FP, not by any of you individually - you will only be guaranteeing the loan, and your ownership is purely through the partnership. You and your husband put $20,000 into the partnership. The FP now lists a $20,000 liability to you, and a $20,000 asset in cash. FP buys the $320,000 house (increase assets) with a $300,000 mortgage (liability) and $20,000 cash (decrease assets). Equity in the partnership is $0 right now. The ownership at present is clear. You own 50% of $0, and your sister owns 50% of $0. Where'd your money go?! Simple - it's a liability of the partnership, so you and your husband are together owed $20,000 by the partnership before any equity exists. Everything balances nicely at this point. Note that you should account for paying closing costs the same as you considered the down payment - that money should be paid back to you before any is doled out as investment profit! Now, how do you handle mortgage payments? This actually isn't as hard as it sounds, thanks to the nature of a partnership and proper business accounting. With a good foundation the rest of the building proceeds quite cleanly. On month 1 your sister pays $1400 into the partnership, while you pay $645 into the partnership. FP will record an increase in assets (cash) of $1800, an increase in liability to your sister of $1400, and an increase in liability to you of $645. FP will then record a decrease in cash assets of $1800 to pay the mortgage, with a matching increase in cost account for the mortgage. No net change in equity, but your individual contributions are still preserved. Let's say that now after only 1 month you decide to sell the property - someone makes an offer you just can't refuse of $350,000 dollars (we'll pretend all the closing costs disappeared in buying and selling, but it should be clear how to account for those as I mention earlier). Now what happens? FP gets an increase in cash assets of $350,000, decreases the house asset ($320,000 - original purchase price), and pays off the mortgage - for simplicity let's pretend it's still $300,000 somehow. Now there's $50,000 in cash left in the partnership - who's money is it? By accounting for the house this way, the answer is easily determined. First all investments are paid back - so you get back $20,000 for the down payment, $645 for your mortgage payments so far, and your sister gets back $1400 for her mortgage payment. There is now $27,995 left, and by being equal partners you get to split it - 13,977 to you and your husband and the same amount to your sister (I'm keeping the extra dollar for my advice to talk to a lawyer/CPA). What About Getting To Live There? The fact is that your sister is getting a little something extra out of the deal - she get's the live there! How do you account for that? Well, you might just be calling it a gift. The problem is you aren't in any way, shape, or form putting that in writing, assigning it a value, nothing. Also, what do you do if you want to sell/cash out or at least get rid of the mortgage, as it will be showing up as a debt on your credit report and will effect your ability to secure financing of your own in the future if you decide to buy a house for your husband and yourself? Now this is the kind of stuff where families get in trouble. You are mixing personal lives and business arrangements, and some things are not written down (like the right to occupy the property) and this can really get messy. Would evicting your sister to sell the house before you all go bankrupt on a bad deal make future family gatherings tense? I'm betting it might. There should be a carefully worded lease probably from the partnership to your sister. That would help protect you from extra court costs in trying to determine who has the rights to occupy the property, especially if it's also written up as part of the partnership agreement...but now you are building the potential for eviction proceedings against your sister right into an investment deal? Ugh, what a potential nightmare! And done right, there should probably be some dollar value assigned to the right to live there and use the property. Unless you just want to really gift that to your sister, but this can be a kind of invisible and poorly quantified gift - and those don't usually work very well psychologically. And it also means she's going to be getting an awfully larger benefit from this \"\"investment\"\" than you and your husband - do you think that might cause animosity over dozens and dozens of writing out the check to pay for the property while not realizing any direct benefit while you pay to keep up your own living circumstances too? In short, you need a legal structure that can properly account for the fact that you are starting out in-equal contributors to your scheme, and ongoing contributions will be different over time too. What if she falls on hard times and you make a few of the mortgage payments? What if she wants to redo the bathroom and insists on paying for the whole thing herself or with her own loan, etc? With a properly documented partnership - or equivalent such business entity - these questions are easily resolved. They can be equitably handled by a court in event of family squabble, divorce, death, bankruptcy, emergency liquidation, early sale, refinance - you name it. No percentage of simple co-ownership recorded on a deed can do any of this for you. No math can provide you the proper protection that a properly organized business entity can. I would thus strongly advise you, your husband, and your sister to spend the comparatively tiny amount of extra money to get advice from a real estate/investment lawyer/CPA to get you set up right. Keep all receipts and you can pay a book keeper or the accountant to do end of the year taxes, and answer questions that will come up like how to properly account for things like depreciation on taxes. Your intuition that you should make sure things are formally written up in times when everyone is on good terms is extremely wise, so please follow it up with in-person paid consultation from an expert. And no matter what, this deal as presently structured has a really large built-in potential for heartache as you have three partners AND one of the partners is also renting the property partially from themselves while putting no money down? This has a great potential to be a train wreck, so please do look into what would happen if these went wrong into some more detail and write up in advance - in a legally binding way - what all parties rights and responsibilities are.\"",
"title": ""
},
{
"docid": "3a867c6f052ff0ca6c6709e1a4dfacbe",
"text": "The LLC portion is completely irrelevant. Don't know why you want it. You can create a joint/partnership trading account without the additional complexity of having LLC. What liability are you trying to limit here? Her sisters will file tax returns in the us using the form 1040NR, and only reporting the dividends they received, everything else will be taxed by Vietnam. You'll have to investigate how to file tax returns there as well. That said, you'll need about $500,000 each to invest in the regional centers. So you're talking about 1.5 million of US dollars at least. From a couple of $14K gifts to $1.5M just by trading? I don't see how this is feasible.",
"title": ""
},
{
"docid": "88d77a3dd754aefdfb72b4a009b8c5e4",
"text": "\"Started to post this as a comment, but I think it's actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don't know which or how much until you're ready to terminate the business... so, like your own house, it really isn't a liquid asset; it's closer to being inventory. Meanwhile, like inventory, you need to \"\"restock\"\" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they're likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don't forget that income from the business is taxed at income rates, not investment rates. And don't forget that you're making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you're willing to do the work needed to influence which ones are more likely.\"",
"title": ""
},
{
"docid": "0f831a87251b5b0650787d224c5b200c",
"text": "Thanks, at the moment I don't plan to do alot of trading just need to sell a few shares at the moment and might sell some more more at another point, but other than that I don't plan on touching the stock and just plan on letting it re-invest itself. Since I don't plan on doing alot of selling I don't know how much I need to worry about fee's as long as they aren't too steep.",
"title": ""
},
{
"docid": "3c4e68fdc0aab40d75d449b9f4deae58",
"text": "Thanks for your input. > Are you talking about domicile? Nope, **domestication**. See #2 [here]. I've seen that term on a few places on the web. I am a single-member LLC. I think I'll probably get a biz attorney. Do you think it matters whether the attorney is within the state I currently reside as opposed to the one I'm moving to?",
"title": ""
},
{
"docid": "143bcb802543729b3a4d8b18656ffe00",
"text": "12b1's have fallen out of favor in recent years, and are typically capped at about 0.25%. they are also usually waived and factored into the fund OER these days, too, though it depends on who your broker is. any revenue sharing shouldn't increase your fees. in my experience, there is more incentivizing for cross selling rather than revenue sharing, but in any case those would be fractions of your revenue allocated to different parties, and not additional fees.",
"title": ""
},
{
"docid": "983b96518395d2dd077ddb166149f582",
"text": "or just input it in my accounting software along with receipts, and then when I'm doing taxes this would go under the investment or loses (is it somewhere along that line)? Yes, this. Generally, for the long term you should have a separate bank account and charge card for your business. I started my business (LLC) by filing online, and paying a fee for a registration, and that makes it a business cost right? Startup cost. There are special rules about this. Talk to your tax adviser. For the amounts in question you could probably expense it, but verify.",
"title": ""
},
{
"docid": "70edc1fac438a42eff7c8d79af5963bf",
"text": "As far as the spam mail goes, I own a rental (in Connecticut) and live in Massachusetts, I get very little mail related to this property. I view this as a non-compelling reason. Your other reasons pick up quick in value. The protection from the rest of your assets is helpful, and the one con for most is the inability to get a loan with such a structure, but in your case, a cash purchase is mentioned. I don't know what the fees are to start an LLC, but overall, I believe the pros outweigh the cons. Yes, your Pro 4 looks good, an ongoing business with a track record will help the next purchase.",
"title": ""
},
{
"docid": "300c2b236171618b127627cb296130ad",
"text": "Through your question and then clarification through the comments, it looks like you have a U.S. LLC with at least two members. If you did not elect some other tax treatment, your LLC will be treated as a partnership by the IRS. The partnership should file a tax return on Form 1065. Then each partner will get a Schedule K-1 from the partnership, which the partner should use to include their respective shares of the partnership income and expenses on their personal Forms 1040. You can also elect to be taxed as an S-Corp or a C-Corp instead of a partnership, but that requires you to file a form explicitly making such election. If you go S-Corp, then you will file a different form for the company, but the procedure is roughly the same - Income gets passed through to the owners via a Schedule K-1. If you go C-Corp, then the owners will pay no tax on their own Form 1040, but the C-Corp itself will pay income tax. As far as whether you should try to spend the money as business expense to avoid paying extra tax - That's highly dependent on your specific situation. I'd think you'd want to get tailored advice for that.",
"title": ""
},
{
"docid": "175f3b9068c4906ce732d2fece04ef33",
"text": "Don't worry about the spam mail. If you get a loan, it will be based on your personal credit. I don't know if you can get a real estate loan for your LLC, even if it owns many properties. Typically you get the loan in your own name, then transfer title to the LLC. The LLC does offer good liability protection. The downside is that it can be expensive (at least in California) and requires some work. You may have to pay an annual tax, and file (multiple) tax returns. It may not be worth it for one property. But it definitely a good idea if it is not too expensive.",
"title": ""
}
] |
fiqa
|
15a49ed6668a8938c801788f232d3a58
|
Taxes and withholding on unpaid salary
|
[
{
"docid": "34fe1827bcc69fdc3fcd8379b228bad4",
"text": "As others have said, make sure you can and do file your taxes on a cash basis (not accrual). It sounds like it's very unlikely the company is going to issue you a 1099 for invoices they never paid you. So you just file last year's taxes based on your income, which is the money you actually received. If they do pay you later, in the new year, you'll include that income on next year's tax return, and you would expect a 1099 at that time. Side note: not getting paid is unfortunately common for consultants and contractors. Take the first unpaid invoice and sue them in small claims court. After you win (and collect!), tell them you'll sue them for each unpaid invoice in turn until they pay you in full. (You might need to break up the lawsuits like that to remain under the small claims limit.)",
"title": ""
}
] |
[
{
"docid": "7d23aa8b3c8e5452c14ca9f7b33ec803",
"text": "Most countries with income tax, including the USA, design their withholding system so that in straightforward cases, tax is withheld from each month's paycheck on an annualized basis: tax for a month is calculated on the assumption that you will keep earning the same monthly amount for the rest of the year, and the withholding is set so that the tax is spread evenly across the year. Another way of putting that is that in practice you only get the tax brackets allocated proportionately throughout the year - so up till the end of August you'll only have been assigned 8/12 of the $37450 bracket, and so on. So if your income doesn't change and your general tax affairs don't change, your paycheck also shouldn't change. If your income is irregular or changes during the year then things can get more complicated. As other answers have noted, withholdings are calculated according to tables that normally just take into account that specific month's income. There are various possible changes to your tax affairs that might cause the withholdings to change. For example there'd be an impact from any change in your contributions to tax advantaged things like health insurance or retirement, health or education savings. You might also use form W-4 to change your withholdings yourself. Note that even with a regular income that doesn't change through the year, you might find yourself either owing money or being owed a refund when you file your taxes after the end of the year. It's worth making sure that your W-4 accurately records the allowances you are entitled to, to minimize or eliminate this adjustment.",
"title": ""
},
{
"docid": "80dade3f36a370d1af885e3af8e01083",
"text": "\"H.R. basically consults Publication 15 (this is the link to 2015) to determine how much to hold, based on filing status, exemptions, and pay amount. What's described here is a form of estimation, or, in other words, H.R. withholds what would be your actual taxes, dividing across the number of paychecks you receive. Assuming your gross pay and exemptions do not change, this usually results in a zero-sum for taxes owed (you will receive nothing, and owe nothing). As you can see from the charts, the year is basically broken down into equal tax units that reflect how much you would owe if you worked at that bracket all year. This estimation works best when you have steady hours from check to check. In other words, your taxes are based on the estimate of what you'd make if you earned that much all year, scaled down to the time frame (e.g. 1/52 if you are paid weekly, or 1/26 if you paid biweekly). They do not go \"\"up\"\" near the end of the year, because they're estimated in advance. You don't move up a tax bracket, but are instead taxed at a particular bracket every paycheck. There's also other forms of estimation mentioned there, but basically follow the same scheme. Note that all estimation forms are just that-- estimates. It's best to use a calculator and compare your current taxes whenever a significant change occurs-- a raise, a new child, getting married or divorced, etc. You'll want to be able to alter your exemptions so that enough taxes are coming out. That's also the reason for the \"\"withhold extra\"\" box, so that you can avoid owing. For example, if you're making $44 a week for the first 26 weeks, and then you make $764 a week for the second 26 weeks of the year, you'll end up with an actual tax liability of $2,576.6, but end up paying only $2,345.20. You would owe $231.40. Of course, the actual math is a lot more complicated if you're an employee paid by the minute, for example, or you have a child, go to college, etc. Paychecks that vary wildly, like $10,000 one week and $2,000 the next tend to have the hardest-to-predict estimates (e.g. jobs with big commission payouts). You should avoid living check-to-check with jobs that pay this way, because you'll probably end up owing taxes. Conversely, if you've done your estimates right and you're paid salary or exactly the same number of hours every week, you'll find that the taxes are much easier to predict and you can usually easily create a refund situation simply by having the correct exemptions on your check. So, in summation, if your check falls in the 25% category (which is, of course, 25% above the tax bracket break point), you're already paying the correct amount, and no further drop in your check would be expected.\"",
"title": ""
},
{
"docid": "62be4077a8b5f99137d2c3ca9b8a3ae0",
"text": "You have made a good start because you are looking at your options. Because you know that if you do nothing you will have a big tax bill in April 2017, you want to make sure that you avoid the underpayment penalty. One way to avoid it is to make estimated payments. But even if you do that you could still make a mistake and overpay or underpay. I think the easiest way to handle it is to reach the safe harbor. If your withholding from your regular jobs and any estimated taxes you pay in 2016 equal or exceed your total taxes for 2015, then even if you owe a lot in April 2017 you can avoid the underpayment penalty. If you AGI is over 150K you have to make sure your withholding is 110% of your 2015 taxes. Then set aside what you think you will owe in your bank account until you have to pay your taxes in April 2017. You only have to adjust your withholding to make the safe harbor. You can make sure easily enough once your file this years taxes. You only have to make sure that you reach the 100% or 110% threshold. From IRS PUB 17 Who Must Pay Estimated Tax If you owe additional tax for 2015, you may have to pay estimated tax for 2016. You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. General rule. In most cases, you must pay estimated tax for 2016 if both of the following apply. You expect to owe at least $1,000 in tax for 2016, after subtracting your withholding and refundable credits. You expect your withholding plus your refundable credits to be less than the smaller of: a. 90% of the tax to be shown on your 2016 tax return, or b. 100% of the tax shown on your 2015 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers , later). Your 2015 tax return must cover all 12 months. Reminders Estimated tax safe harbor for higher income taxpayers. If your 2015 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2016 or 110% of the tax shown on your 2015 return to avoid an estimated tax penalty.",
"title": ""
},
{
"docid": "6c0110c21e3e15f28b53d04cc6b3dc73",
"text": "I assume US as mhoran_psprep edited, although I'm not sure IRS necessarily means US. (It definitely used to also include Britain's Inland Revenue, but they changed.) (US) Stockbrokers do not normally withhold on either dividends/interest/distributions or realized capital gains, especially since gains might be reduced or eliminated by later losses. (They can be required to apply backup withholding to dividends and interest; don't ask how I know :-) You are normally required to pay most of your tax during the year, defined as within 10% or $1000 whichever is more, by withholding and/or estimated payments. Thus if the tax on your income including your recent gain will exceed your withholding by 10% and $1000, you should either adjust your withholding or make an estimated payment or some combination, although even if you have a job the last week of December is too late for you to adjust withholding significantly, or even to make a timely estimated payment if 'earlier in the year' means in an earlier quarter as defined for tax (Jan-Mar, Apr-May, June-Aug, Sept-Dec). See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes and for details its link to Publication 505. But a 'safe harbor' may apply since you say this is your first time to have capital gains. If you did not owe any income tax for last year (and were a citizen or resident), or (except very high earners) if you did owe tax and your withholding plus estimated payments this year is enough to pay last year's tax, you are exempt from the Form 2210 penalty and you have until the filing deadline (normally April 15 but this year April 18 due to weekend and holiday) to pay. The latter is likely if your job and therefore payroll income and withholding this year was the same or nearly the same as last year and there was no other big change other than the new capital gain. Also note that gains on investments held more than one year are classified as long-term and taxed at lower rates, which reduces the tax you will owe (all else equal) and thus the payments you need to make. But your wording 'bought and sold ... earlier this year' suggests your holding was not long-term, and short-term gains are taxed as 'ordinary' income. Added: if the state you live in has a state income tax similar considerations apply but to smaller amounts. TTBOMK all states tax capital gains (and other investment income, other than interest on exempt bonds), and don't necessarily give the lower rates for long-term gains. And all states I have lived in have 'must have withholding or estimated payments' rules generally similar to the Federal ones, though not identical.",
"title": ""
},
{
"docid": "0dbe615376361cbe5aee13c01dac142b",
"text": "\"Hearing somewhere is a level or two worse than \"\"my friend told me.\"\" You need to do some planning to forecast your full year income and tax bill. In general, you should be filing a quarterly form and tax payment. You'll still reconcile the year with an April filing, but if you are looking to save up to pay a huge bill next year, you are looking at the potential of a penalty for under-withholding. The instructions and payment coupons are available at the IRS site. At this point I'm required to offer the following advice - If you are making enough money that this even concerns you, you should consider starting to save for the future. A Solo-401(k) or IRA, or both. Read more on these two accounts and ask separate questions, if you'd like.\"",
"title": ""
},
{
"docid": "fae69e7d322207780b9156a7653b9a3e",
"text": "As @Dilip suggested in the comments, the problem is the accountability of the reimbursement plans. In order for the reimbursement to be non-taxable, there has to be a reimbursement plan and policy set up by the employer, it has to be done per receipt, and accounted for correctly. If the employer just cuts you a check - the conditions may not be met, and as such - the reimbursement becomes taxable. In your case, it seems like the employer has not set up a proper (accountable) reimbursement plan, thus your reimbursements are taxable. @Joe pointed out that since the employer also doesn't withhold taxes (as he should), you may have an unexpected tax bill on April 15. This Chron article describes the distinction between the accountable and non-accountable plans. Only with the accountable plans the reimbursements are non-taxable.",
"title": ""
},
{
"docid": "aa2346b32ae0252269f355721595bec4",
"text": "For federal taxes the rule is fairly straight forward, assuming that nothing else changes during the year. If you know your marginal tax rate (the rate that your last dollar of income is taxed at) last year then adding or subtracting an allowance on the w-4 form will move the amount withheld by rate x Personal exemption amount. The personal exemption for federal taxes in 2017 is $4,050. Lowering the number of allowances on the Federal W-4 increases the amount of money withheld during the year. So for your federal W-4 form lowering the number of allowances by one if you are in the 25% bracket will cause an additional 25%x4050 or ~$1012 a year to be withheld. Of course making the change 5/12ths of the way trough the year will mean that it will only increase the the amount withheld the rest of the year by (7/12) * $1012 or ~$590 for the rest of the year. State taxes can be more complex due to issues regarding tax brackets, and the differences in how they calculate their taxes. Most state websites have a worksheet for making an adjustment to their version of the W-4. Here is the form DE-4 form for California In your situation getting the numbers on the federal and state forms will be much more complex, because your combined income for 2017 will be significantly different than your combined income for 2016. In the case of multiple incomes getting the withholding correct is much harder even with stable income. The trick is that making the adjustment on the job with the highest income may not move the amount withheld as much as you expect. For example if the largest income is only withheld at the 15% rate but your combined income from all your combined jobs results in you being in the 25% bracket, then the above calculation would only move the amount withheld by $354 instead of $590. A couple of notes: the number of allowances on the federal and state W-4 forms don't have to match. Mine almost never do. The number of allowances on the W-4 forms doesn't have to match the number of exemptions on the 1040 form.",
"title": ""
},
{
"docid": "9ae88354d918c5f09d1b21baec41180e",
"text": "\"Take a look at IRS Publication 15. This is your employer's \"\"bible\"\" for withholding the correct amount of taxes from your paycheck. Most payroll systems use what this publication defines as the \"\"Percentage Method\"\", because it requires less data to be entered into the system in order to correctly compute the amount of withholding. The computation method is as follows: Taxes are computed \"\"piecewise\"\"; dollar amounts up to A are taxed at X%, and then dollar amounts between A and B are taxed at Y%, so total tax for B dollars is A*X + (B-A)*Y. Here is the table of rates for income earned in 2012 on a daily basis by a person filing as Single: To use this table, multiply all the dollar amounts by the number of business days in the pay period (so don't count more than 5 days per week even if you work 6 or 7). Find the range in which your pay subject to withholding falls, subtract the \"\"more than\"\" amount from the range, multiply the remainder by the \"\"W/H Pct\"\" for that line, and add that amount to the \"\"W/H Base\"\" amount (which is the cumulative amount of all lower tax brackets). This is the amount that will be withheld from your paycheck if you file Single or Married Filing Separately in the 2012 TY. If you file Married Filing Jointly, the amounts defining the tax brackets are slightly different (there's a pretty substantial \"\"marriage advantage\"\" right now; withholding for a married person in average wage-earning range is half or less than a person filing Single.). In your particular example of $2500 biweekly (10 business days/pp), with no allowances and no pre-tax deductions: So, with zero allowances, your employer should be taking $451.70 out of your paycheck for federal withholding. Now, that doesn't include PA state taxes of 3.07% (on $2500 that's $76.75), plus other state and federal taxes like SS (4.2% on your gross income up to 106k), Medicare/Medicaid (1.45% on your entire gross income), and SUTA (.8% on the first $8000). But, you also don't get a refund on those when you fill out the 1040 (except if you claim deductions against state income tax, and in an exceptional case which requires you to have two jobs in one year, thus doubling up on SS and SUTA taxes beyond their wage bases). If you claim 3 allowances on your federal taxes, all other things being equal, your taxable wages are reduced by $438.45, leaving you with taxable income of $2061.55. Still in the 25% bracket, but the wages subject to that level are only $619.55, for taxes in the 25% bracket of $154.89, plus the withholding base of $187.20 equals total federal w/h of $342.09 per paycheck, a savings of about $110pp. Those allowances do not count towards other federal taxes, and I do not know if PA state taxes figure these in. It seems odd that you would owe that much in taxes with your withholding effectively maxed out, unless you have some other form of income that you're reporting such as investment gains, child support/alimony, etc. With nobody claiming you as a dependent and no dependents of your own, filing Single, and zero allowances on your W-4 resulting in the tax withholding above, a quick run of the 1040EZ form shows that the feds should owe YOU $1738.20. The absolute worst-case scenario of you being claimed as a dependent by someone else should still get you a refund of $800 if you had your employer withhold the max. The numbers should only have gotten better if you're married or have kids or other dependents, or have significant itemized deductions such as a home mortgage (on which the interest and any property taxes are deductible). If you itemize, remember that state income tax, if any, is also deductible. I would consult a tax professional and have him double-check all your numbers. Unless there's something significant you haven't told us, you should not have owed the gov't at the end of the year.\"",
"title": ""
},
{
"docid": "56f67bbeaa7ca7107ea754648e799f3b",
"text": "The reciprocity agreement in the Washington DC area means that you only pay income taxes where you live, not where you work. Because you live in Maryland you only need to pay income taxes to Maryland. You need to do the following things. Line 3. If you are not subject to Virginia withholding, check the box on this line. You are not subject to withholding if you meet any one of the conditions listed below. Form VA-4 must be filed with your employer for each calendar year for which you claim exemption from Virginia withholding. (a) You had no liability for Virginia income tax last year and you do not expect to have any liability for this year. ... (d) You are a domiciliary or legal resident of Maryland, Pennsylvania or West Virginia whose only Virginia source income is from salaries and wages and such salaries and wages are subject to income taxation by your state of domicile. My company has its only office in Maryland, and conducts all of its business there. Several of our employees are Virginia residents who commute to work on a daily basis. Are we required to withhold Virginia income tax from their wages? No. Because your company is not paying wages to employees for services performed in Virginia, you are not required to withhold Virginia tax. If you would like to withhold the tax as a courtesy to your employees, you may register for a Virginia withholding tax account online or by submitting a Registration Application. Additional withholding per pay period under agreement with employer. If you are not having enough tax withheld, you may ask your employer to withhold more by entering an additional amount on line 2.",
"title": ""
},
{
"docid": "b3647fabeeeeda60c6fe140cefcf0735",
"text": "\"As you clarified in the comments, it is not a contract work but rather an additional temporary assignment with the same employer. You were paid for it in form of a \"\"bonus\"\" - one time irregular payment, instead of regular periodic payments. Irregular wage payments fall under the flat rate withholding rule (the 25% for Federal, some States have similar rules for State withholding). This is not taxes, this is withholding. Withholding is money the employer takes from your salary and forwards to the IRS on the account of your tax liability, but it is not in itself your tax liability. When you do your annual tax return, you'll calculate the actual tax you were supposed to pay, and the difference between what was withheld and your actual tax will be refunded to you (or owed by you, if not enough was withheld). You can control the regular pay withholding using W4 form.\"",
"title": ""
},
{
"docid": "c10e214548196928e0dcb64923a2b50f",
"text": "According to this, if your employer will not refund FICA taxes withheld in error, you need to file forms 843 and 8316 with IRS. Unfortunately, I have heard that it sometimes takes years for them to respond to those.",
"title": ""
},
{
"docid": "cf3539f86c66a80f473878e2c84b1c32",
"text": "\"It seems that you think you are freelancing, and they think you are an employee. What's bad for you, the tax office will also think you are an employee if they withhold tax for you. Alternatively, they think you are stupid, and they keep the money, but are actually not paying it to the tax office at all, in which case you will have a bad surprise when you do your tax returns. First, I'd ask them for proof that they are indeed paying these taxes into some account related to you. I'd then ask a tax adviser for some serious advice. If they are acting out of incompetence and not out of malice, then you should be mostly fine, but your work there will count as employment. Heaven knows why they treat you as an employee. Check your contract with them; whether it is between you and them or your company and them. It maybe that they never hired a contractor and believe that they have to pay employment tax. They don't. If your company sends them a bill, then they need to pay that bill, 100% of it, and that's it. Taxes are fully your business and your responsibility. As \"\"quid\"\" said, if they say they are withholding tax, then at the very least there must be a paystub that proves they have actually been paying these taxes. If they withhold taxes, and there is no paystub, then this looks like a criminal attempt to cheat you. If they have actually paid taxes properly into your account, then they are merely creating a mess that can hopefully be fixed. But it is probably complicated enough that you need a tax advisor, even if you had none before, since instead of paying to your company, they paid some money to the company, and some to you personally.\"",
"title": ""
},
{
"docid": "da160fffe8072dca28be2c03e430316a",
"text": "There's virtually no way for a person to completely avoid taxation at some point in their lives. Between payroll, sales, excise, and the like, you've been taxed at some point. And whether or not the individual paid is irrelevant to the ownership claim being invalid.",
"title": ""
},
{
"docid": "aeaa11d893d521e8b1d6f18c1a28b6c2",
"text": "What you need to do is to reduce the withholding from your wages, or pay a smaller amount in your quarterly payments of estimated tax (if you are self-employed). To reduce withholding from wages, fill out a new W4 form (available from your employer's HR department). There is a worksheet in the form that will help you figure out what to write on the various lines. As a single person, you are entitled to claim an exemption for yourself, and if you have not been claiming that exemption, doing so will reduce your withholding, and presumably your tax refund.",
"title": ""
},
{
"docid": "40ee8d78fb5cb443d63ed80bde9b7c91",
"text": "\"I'm not familiar with the Dupire model; I'll have to take a look at (it sounds cool though). I think that all arbitrage-free models are \"\"incomplete\"\" in the sense that they don't say, \"\"This is a price that doesn't imply any arbitrage opportunities *anywhere*,\"\" but instead say, \"\"This is a price that doesn't imply any arbitrage opportunities within a specific set of securities.\"\" What set you're using will vary from one model to another, and I'd say (although other people might reasonably disagree) that taking a volatility structure as given is as much no-arbitrage as taking a term structure as given. As a side note, I'd say that what (theoretically) distinguishes an equilibrium model is that you're supposed to *know* the parameters, not guess at them or observe them from the real world. By that definition, a really complete CAPM or Black-Scholes would explain how to derive the correct beta or volatility from fundamental analysis. Also, I've upvoted you elsewhere for some really good comments you made about intrinsic value.\"",
"title": ""
}
] |
fiqa
|
aa1a4ae3c1023b774c7495f1944d4795
|
Received mysterious K-1 form, seeking answers
|
[
{
"docid": "e0a23b436069fb1ebdb4e83095041424",
"text": "\"You should contact the company and the broker about the ownership. Do you remember ever selling your position? When you look back at your tax returns/1099-B forms - can you identify the sale? It should have been reported to you, and you should have reported it to the IRS. If not - then you're probably still the owner. As to K-1 - the income reported doesn't have to be distributed to you. Partnership is a pass-through entity, and cannot \"\"accumulate\"\" earnings for tax purposes, everything is deemed distributed. If, however, it is not actually distributed - you're still taxed on the income, but it is added to your basis in the partnership and you get the tax \"\"back\"\" when you sell your position. However, you pay income tax on the income based on the kind of the income, and on the sale - at capital gains rates. So the amounts added to your position will reduce your capital gains tax, but may be taxed at ordinary rates. Get a professional advice on the issue and what to do next, talk to a EA/CPA licensed in New York.\"",
"title": ""
},
{
"docid": "bbf48adc1557e2e46c2031c34e371115",
"text": "SXL is a Master Limited Partnership so all of the income is pass-through. Your equity purchase entitles you to a fraction of the 66% of the company that is not owned by Energy Transfer Partners. You should have been receiving the K-1s from SXL from the time that you bought the shares. Without knowing your specific situation, you will likely have to amend your returns for at most 6 years (if the omitted amount of gross income exceeds 25% of your gross income originally stated as littleadv has graciously pointed out in the comments) and include Schedule E to report the additional income (you'll also be able to deduct any depreciation, losses etc. that are passed through the entity on that form, so that will offset some of the gains). As littleadv has recommended, speak with a tax professional (CPA/EA or attorney) before you take any further steps, as everyone's situation is a bit different. This Forbes article has a nice overview of the MLP. There's a click-through to get to it, but it's not paywalled.",
"title": ""
}
] |
[
{
"docid": "7da971f8aec74ab1da208c8d182c2eb1",
"text": "\"Context: My parents overseas (Japan) sent me a little over $100,000 to cover an expensive tuition payment and moderate living expenses in 2014. They are not US residents, Green card holders or citizens. They did not remit the tuition payment directly to the school. I am a resident (for tax). This is enough to answer yes. That's basically the set of requirements for filing: you received >$100K from a non-US person and you yourself are a US person. You have to report it, and unless it is taxable income - it is a gift. Taxable income is reported on the form 1040, gifts are reported on the form 3520. The fact that in Japan it is not considered a gift is irrelevant. Gift tax laws vary between countries, some (many) don't have gift taxes at all. But the reporting requirement is based on the US law and the US definition of \"\"gift\"\". As I said above, if it is not a gift per the US law, then it is taxable income (and then you report all of it regardless of the amount and pay taxes). Had they paid directly to the institution, you wouldn't need to count it as income/gift to you because you didn't actually receive the money (so no income) and it went directly to cover your qualified education expenses (so no gift), but this is not the case in your situation. Whether or not this will be reported by the IRS back to Japan - I don't know, but it was probably already reported to the authorities in Japan by the banks through which the transfers went through. As to whether it will trigger an audit - doesn't really matter. It was, most likely, reported to the IRS already by the receiving banks in the US, so not reporting it on your tax return (either as income or on form 3520) may indeed raise some flags.\"",
"title": ""
},
{
"docid": "5b9027fc3d1646ac751126f9d36500e7",
"text": "\"Nah. Fill it in on the line that says \"\"Other Income\"\" with type of \"\"5th Amendment\"\". There's lots of reasons why you might want to do this, and it's the government's job to find out which one, and they're not allowed to use the bare fact that you put 5th Amendment there to open an investigation.\"",
"title": ""
},
{
"docid": "aaa7691ca4e8a234d85989b338da4378",
"text": "\"It can be a money laundering scheme. The stranger gives you cash for free at first, then proposes to give you more but this time asks you to \"\"spend\"\" a fraction of it (like 80%). So on his side the money comes from a legitimate source. So you do it because after all you get to keep the rest of it and it is \"\"free\"\" money. But you are now involved in something illegal. Having money for which you cannot tell the origin is also something highly suspicious. You will not pay tax on it, and the fiscal administration of your country might give you a fine. Customs might also be able to confiscate the money if they suspect it comes from an illegal source.\"",
"title": ""
},
{
"docid": "3f19942416d82aad508dc98501458cb1",
"text": "Your assumption, the need for two distinct accounts is correct. Are you sure that the deposit was made to the same account? Since a 401(k) doesn't really have an account number, just your social security number, it may be they report it to you as though it were aggregated, but it's improper for it to be so. With respect (I mean this literally, I have the utmost respect) to littleadv's answer - the aggregation of the two accounts cannot be legitimate. If I wish to invest my Roth side into investments that grow far greater than the Traditional side, the mixing of accounts destroys this possibility. Something is either wrong, or misunderstood.",
"title": ""
},
{
"docid": "11b39e366f3d2845e53b28c60886fc9e",
"text": "\"This question has the [united kingdom] tag, so the information about USA or other law and procedures is probably only of tangential use. Except for understanding that no, this is not something to ignore. It may well indicate someone trying to use your id fraudulently, or some other sort of data-processing foul-up that may adversely impact your credit rating. The first thing I would do is phone the credit card company that sent the letter to inform them that I did not make his application, and ask firmly but politely to speak to their fraud team. I would hope that they would be helpful. It's in their interests as well as yours. (Added later) By the way, do not trust anything written on the letter. It may be a fake letter trying to lure or panic you into some other sort of scam, such as closing your \"\"compromised\"\" bank account and transferring the money in it to the \"\"fraud team\"\" for \"\"safety\"\". (Yes, it sounds stupid, but con-men are experts at what they do, and even finance industry professionals have fallen victim to such scams) So find a telephone number for that credit card company independently, for example Google, and then call that number. If it's the wrong department they'll be able to transfer you internally. If the card company is unhelpful, you have certain legal rights that do not cost much if anything. This credit company is obliged to tell you as an absolute minimum, which credit reference agencies they used when deciding to decline \"\"your\"\" application. Yes, you did not make it, but it was in your name and affected your credit rating. There are three main credit rating agencies, and whether or not the bank used them, I would spend the statutory £2 fee (if necessary) with each of them to obtain your statutory credit report, which basically is all data that they hold about you. They are obliged to correct anything which is inaccurate, and you have an absolute right to attach a note to your file explaining, for example, that you allege entries x,y, and z were fraudulently caused by an unknown third party trying to steal your ID. (They may be factually correct, e.g. \"\"Credit search on \"\", so it's possible that you cannot have them removed, and it may not be in your interests to have them removed, but you certainly want them flagged as unauthorized). If you think the fraudster may be known to you, you can also use the Data Protection Act on the company which write to you, requiring them to send you a copy of all data allegedly concerning yourself which it holds. AFAIR this costs £10. In particular you will require sight of the application and signature, if it was made on paper, and the IP address details, if it was made electronically, as well as all the data content and subsequent communications. You may recognise the handwriting, but even if not, you then have documentary evidence that it is not yours. As for the IP address, you can deduce the internet service provider and then use the Data Protection act on them. They may decline to give any details if the fraudster used his own credentials, in which case again you have documentary evidence that it was not you ... and something to give the police and bank fraud investigators if they get interested. I suspect they won't be very interested, if all you uncover is fraudulent applications that were declined. However, you may uncover a successful fraud, i.e. a live card in your name being used by a criminal, or a store or phone credit agreement. In which case obviously get in touch with that company a.s.a.p. to get it shut down and to get the authorities involved in dealing with the crime. In general, write down everything you are told, including phone contact names, and keep it. Confirm anything that you have agreed in writing, and keep copies of the letters you write and of course, the replies you receive. You shouldn't need any lawyer. The UK credit law puts the onus very much on the credit card company to prove that you owe it money, and if a random stranger has stolen your id, it won't be able to do that. In fact, it's most unlikely that it will even try, unless you have a criminal record or a record of financial delinquency. But it may be an awful lot of aggravation for years to come, if somebody has successfully stolen your ID. So even if the first lot of credit reference agency print-outs look \"\"clean\"\", check again in about six weeks time and yet again in maybe 3 months. Finally there is a scheme that you can join if you have been a victim of ID theft. I've forgotten its name but you will probably be told about it. Baically, your credit reference files will be tagged at your request with a requirement for extra precautions to be taken. This should not affect your credit rating but might make obtaining credit more hassle (for example, requests for additional ID before your account is opened after the approval process). Oh, and post a letter to yourself pdq. It's not unknown for fraudsters to persuade the Post Office to redirect all your mail to their address!\"",
"title": ""
},
{
"docid": "f3c332fbce2b61f308b02c595062977e",
"text": "Ok so this is the best information I could get! It is a guarantee from a financial institution that payment will be made for items or services once certain requirements are met. Let me know if this helps! I'll try to get more info in the meantime.",
"title": ""
},
{
"docid": "f41ce7e0d2fa9c6ff52ac387f7808299",
"text": "The committee folks told us Did they also give you advice on your medication? Maybe if they told you to take this medicine or that you'd do that? What is it with people taking tax advice from random people? The committee told you that one person should take income belonging to others because they don't know how to explain to you which form to fill. Essentially, they told you to commit a fraud because forms are hard. I now think about the tax implications, that makes me pretty nervous. Rightly so. Am I going to have to pay tax on $3000 of income, even though my actual winning is only $1000? From the IRS standpoint - yes. Can I take in the $3000 as income with $2000 out as expenses to independent contractors somehow? That's the only solution. You'll have to get their W8's, and issue 1099 to each of them for the amounts you're going to pay them. Essentially you volunteered to do what the award committee was supposed to be doing, on your own dime. Note that if you already got the $3K but haven't paid them yet - you'll pay taxes on $3K for the year 2015, but the expense will be for the year 2016. Except guess what: it may land your international students friends in trouble. They're allowed to win prizes. But they're not allowed to work. Being independent contractor is considered work. While I'm sure if USCIS comes knocking, you'll be kind enough to testify on their behalf, the problem might be that the USCIS won't come knocking. They'll just look at their tax returns and deny their visas/extensions. Bottom line, next time ask a professional (EA/CPA licensed in your State) before taking advice from random people who just want the headache of figuring out new forms to go away.",
"title": ""
},
{
"docid": "133383e907a8124467af4d047c235890",
"text": "I would keep the letter in a file for follow-up, and I would do what you are already planning to do and wait to see what shows up on the credit report. If this does reflect an identity theft attempt, chances are that others will follow, so vigilance is key here. If there is a hard credit check, then you can dispute that on your credit report. If there is not a hard credit check, there is nothing further this credit card company can do to help you anyway.",
"title": ""
},
{
"docid": "3f8cce2f339370e5c46053049133a94d",
"text": "\"It could be money laundering. so: Answer 1: They didn't get your data wrong. They indeed sent you $1,000. How they obtained your banking data is another issue we won't address here. Answer 2: Your PII(*) was most likely compromised. From what you report, it included at least your banking info and your phone number. Probably more, but goes out of the scope of this answer. Answer 3: Money Laundering is done in small transactions, to avoid having the financial institution filing a Currency Transaction Report(**). So they send $1,000 to several marks. Possibly at the stage of layering, to smudge out the paper trail associated to the money. Money laudering is a risky endeavour, and the criminals don't expect to have all the money they enter into the system come out clean on the other side. You really don't want to be associated with that cash, so the best is to report to your bank that you don't recognize that transaction and suspect illegal activity. In writing. Your financial institution knows how to proceed from there. Answer 4: Yes, and one of the worst financial scams. From drug trafficking, to human slavery and terrorism, that money could be supporting any of these activities. I urge the reader to access the US Treasury's \"\"National Money Laudering Risk Assessment\"\" report for more information.\"",
"title": ""
},
{
"docid": "5f76893321e950109c4e9f146204b9ba",
"text": "\"Following up on this, here is what I did. First, I called my benefits provider. They had documentation of my election over the phone, which then allowed them to retroactively fix the problem. Had they not had this documentation, I would have been out of luck. Second, the next step for \"\"fixing\"\" occurred when I received my W-2 for this position. This W-2 mistakenly showed the amount for my medical FSA in box-10 of my W-2 as the same dependent care FSA. This requires calling/emailing my benefits and payroll department to get an updated W-2...\"",
"title": ""
},
{
"docid": "4121769fdb123d21c420f416189149b8",
"text": "Form 8288 is to report to the IRS withholding of capital gains tax that may be due from the seller. Foreign nationals don't always file tax returns, so they often didn't pay capital gains tax on properties that they sold. Congress decided to make the buyers responsible for this tax so that they would have a better chance of collecting it. There is a penalty against the buyer if that tax is not withheld. Your attorney should have filed this form on your behalf as part of the closing papers. I think your first step is to look at your copy of the closing papers and see if money was withheld from the sale. There definitely should be disclosure of these requirements before the sale. You should also follow up with your attorney to see whether he has already filed the forms 8288 and 8288-A on your behalf. If you had purchased for less than $300,000 (and were purchasing for your primary residence), you would not have to file that form, but since the property was under $1,000,000 the withholding rate is only 10% (rather than 15%).",
"title": ""
},
{
"docid": "3e4586fb17d1089f16ad4efa772cee06",
"text": "I mean...*can* we do anything about this, though? We've sent letters, posted comments using the correct forms (which were notoriously complicated to get to if you didn't have a direct link), made phone calls. What else can we do?",
"title": ""
},
{
"docid": "625750d37c5b96688e16f19219c37aef",
"text": "Have you checked to see if anything else went missing? Walmart says that because I was not the original purchaser of the gift card, they could not help me directly Just to build on what @littleadv already gave you, my personal experience on this is that none of the companies that you'll likely be dealing with in a situation like this will be falling over themselves to help you out. Unless it also helps them for some reason, or if they're compelled by consumer laws. If you think you should be protected from this sort of thing happening, feel free to reference the FCRA to see if you might get any consumer protections. But just from what you've said here, it doesn't sound like you do. So if anything else went missing (or even if not), it might have been someone working for Citi, who may have had access to more of your personal information than just your card. ID theft is unfortunately common, as a fairly easy crime to commit, a hard one to protect yourself against, and a very hard one to prosecute. When did you last check your credit report?",
"title": ""
},
{
"docid": "54f174f29e2d2d7d644ab1b8ced2a5f7",
"text": "Form 10-K is filed by corporations to SEC. You must be thinking of form 1065 (its schedule K) that a partnership (and multi-member LLC) must file with the IRS. Unless the multi-member LLC is legally dissolved, it must file this form. You're a member, so it is your responsibility, with all the other members, to make sure that the manager files all the forms, and if the manager doesn't - fire the manager and appoint another one (or, if its member managed - chose a different member to manage). If you're a sole member of the LLC - then you don't need to file any forms with the IRS, all the business expenses and credits are done on your Schedule C, as if you were a sole propriator.",
"title": ""
},
{
"docid": "747434105a81d44117295b394b27c1ba",
"text": "Just type in the forms as they are, separately. That would be the easiest way both to enter the data without any mistakes, and ensure that everything matches properly with the IRS reports.",
"title": ""
}
] |
fiqa
|
38fd74895cfd097068329daa72b28314
|
Magazine subscription leads to unauthorized recurring payment
|
[
{
"docid": "59c250a05c383c5e3f9f3bceaaa60434",
"text": "\"In 2010, the Restore Online Shoppers' Confidence Act was passed, which prohibited certain activities, most of which had to do with online sites sharing your CC info with third parties. However, the final part of the act deals with \"\"negative option\"\" marketing, which is basically what you're describing - \"\"We will charge you unless you say no\"\". It requires three components to allow a negative option: If you did not explicitly enroll in automatic payment, and made the initial purchase online (or made your most recent purchase online, I suspect) then it sounds like this was a violation of this act. On the other hand, the act isn't terribly careful about defining terms, and is really quite vague in a lot of places, so it's possible they would argue they are not using a 'negative option' scheme but instead simply charging your bill similar to how your phone company might use autopay. If it was not online, then this probably doesn't apply. Instead, the FTC's rule on Negative Option with regard to sale of goods applies. Title 16 Part 425 covers this; this law is much less limiting as to what the marketer can do.\"",
"title": ""
},
{
"docid": "202cf175509a021a1050b9735f8505b3",
"text": "\"You have a subscription that costs $25 They have the capabilities to get that $25 from the card on file if you had stopped paying for it, you re-upping the cost of the subscription was more of a courtesy. They would have considered pulling the $25 themselves or it may have gone to collections (or they could courteously ask if you wanted to resubscribe, what a concept) The credit card processing agreements (with the credit card companies) and the FTC would handle such business practices, but \"\"illegal\"\" wouldn't be the word I would use. The FTC or Congress may have mandated that an easy \"\"opt-out\"\" number be associated with that kind of business practice, and left it at that.\"",
"title": ""
}
] |
[
{
"docid": "9cb909ebdad089ca628e5a3672902bc0",
"text": "Square does not care if you run a $10 transaction to test the system. They are concerned with its use to move meaningful amounts of money. The only people who do this will be the Dunning-Kruger gang, who only think they are clever. Because of course Square will hunt them down, sue, garnish and/or prosecute them! But the expense of doing so is all on Square, making it a total lose. The cheapest resolution is to not let it happen in the first place. The ~3% cash advance fees, lack of rewards points, and the higher interest rate are not just for profiteering. They reflect, and pay for, the higher risk of loaning money via cash advance: to put it indelicately, the risk of default. Cash advance credit limits are often much lower than purchase limits. If a merchant is selling himself phantom merchandise to get easy cash advances, it means he is not using regular ways of borrowing money. Perhaps because he can't, because he has exhausted his other opportunities to borrow, risk managers have cut him off. Square has no reason to care either way; but the issuing bank does, and through Visa etc., they will disallow this behavior. ** PayPal Here's rate used here instead of Square's, to simplify math.",
"title": ""
},
{
"docid": "9ef4f6cf01afc7d380a31da26055fea9",
"text": "\"The only way to prevent it is to not use PayPal. The terms of usage are draconian, and by using the service you agree to them. I'm sure that when the case gets to a court of law, they will find where it is authorized. Paypal is not a bank, and the money there is basically \"\"entrusted\"\" with the company and is not insured by anyone. They don't need or have to be subject to the regulations on the banking industry, and they're no different than your neighbour carrying money for you to the grocery store when you're sick. Other options are wire transfer, services like Western Union or Moneygram, checks (better certified/cashier's checks), money orders or even cash. You can also charge via credit card, but you can get similar problems there (although it is still safer than PayPal because with credit card - the card owner must initiate the charge back, it doesn't appear on its own because they feel like it).\"",
"title": ""
},
{
"docid": "df3445c4c5220e2ca5bb66345da094b1",
"text": "This does sound a bit implausible, even if it is true it is pretty grossly irresponsible and you probably shouldn't just let it slide... However there is no real benefit in wading in with accusations, I suspect that the most likely scenario is that your tenet simply didn't have the money and was looking for a way to delay payment. This may well not be particularly malicious towards you, they may just be unable to pay and need a bit of room to maneuver. In this case the wise thing is to challenge them but without forcing them to admit that they might have lied, perhaps by suggesting that they might have been mistaken about dropping off the money but it's no big deal and negotiate a resolution. In these situations where it is one persons word against another giving them the opportunity to save face often pays off. Equally you want to make it absolutely clear that putting a wad of cash in your mailbox is not an acceptable way to pay.",
"title": ""
},
{
"docid": "20a3fc4dd6645b7863255ca66ca1e118",
"text": "Many banks will let you generate a temporary credit card number to use in this situation. You can set the credit limit and the expiration date yourself so that the second transaction won't be accepted. I don't know of any that will let you set the credit limit to $0, but you can set it to a value under the monthly subscription fee. An answer to this question suggests that banks sometimes let the charge go through even if it exceeds the limit or the expiration date, so the plan might not work.",
"title": ""
},
{
"docid": "288b1cb6d1f9f84aeb746dd48ba1e61c",
"text": "\"You should probably call the travel agency and complain. Not that they will care, but if by any chance they do - they can ask PayPal to remove the block. This is what is called \"\"authorization pending\"\". Usually, a credit card transaction has two stages: The merchant requests its payment processor to authorize the transaction. The processor will contact the card issuer with the transaction details and will get the authorization code which will be passed to the merchant. At that stage the transaction enters the \"\"pending\"\" stage on your account. The merchant submits the transaction and gets the money from its payment processor, who forwards the transaction to the card issuer and gets the money from there. The card issuer charges the card owner. The transaction should have the same authorization code received in step #1, and by matching it to the pending transaction, the card issuer removes the pending transaction, and posts the actual transaction. However, if the transaction in step #2 doesn't include the code from step #1, the match doesn't occur and you see the situation you have now: both the actual transaction and the pending are active. In this case the merchant should contact its merchant processor and request the revocation of the authorization code. The processor will then forward the request to the card issuer, who will then remove the pending transaction. As you can see - multiple parties have to actually care for that to happen, and many times they don't, because they don't have to. As to the period - it's up to the card issuer (PayPal in your case), but 1 month is a very long time. Usually it's about a week or two, unless it's a hotel/car rental. In any case - once it expires, it will go away on its own and if you don't mind for the amounts to be blocked until then - just let it expire. The fact that you used a debit card for this transaction is irrelevant. Unless it was a pin transaction, debit card transactions are processed as credit card transactions by processors. For pin transactions, there process is different and you shouldn't see doubles. If it was a pin transaction - contact PayPal and check with them what's going on. Generally, PayPal is not to be used as a \"\"bank account\"\", it is merely a payment processor, and it is advised to remove the money from there as soon as possible.\"",
"title": ""
},
{
"docid": "032b93d19155e48a2fc27c23982cd9e1",
"text": "Sure - I honestly don't mind membership sites, and there are a bunch of sites that I do maintain active memberships to like the New Yorker, it's all about quality. I just have to keep an eye on my subscription credit card so I can make sure I'm not getting billed for a service that I've long since forgotten about.",
"title": ""
},
{
"docid": "9a698c0e53d922a16a843c86718e60fc",
"text": "You can report the violation to the payment network (i.e., Mastercard or Visa). For instance here is a report form for Visa and here is one for MasterCard. I just found those by googling; there are no doubt other ways of contacting the companies. Needless to say, you shouldn't expect that this will result in an immediate hammer of justice being brought down on the merchant. Given the presence of large-scale fraud schemes, it's unlikely Visa is going to come after every little corner store owner who charges a naughty 50-cent surcharge. It is also unlikely that threatening to do this will scare the merchant enough to get them to drop the fee on your individual transaction. (Many times the cashier will be someone who has no idea how the process actually works, and won't even understand the threat.) However, this is the real solution in that it allows the payment networks to track these violations, and (at least in theory) they could come after the merchant if they notice a lot of violations.",
"title": ""
},
{
"docid": "63cb75611375746f06571c1a15539d58",
"text": "\"I can't give you proper legal advice, but if I called their customer service and used half an hour of my time to wait and explain the situation in detail, and their official response was \"\"just use the points,\"\" I would do just that. Of course you would have stronger legal standing if you had recorded their answer, or had it in writing from them. But I don't think spending these points will come crashing down on you. And morally I see absolutely no problem with spending these points; it is not as if you are stealing from someone else. These points can usually be given away in any kind of crazy manner. Sometimes there are lotteries or events where they give away 100,000 points for new customers who open up an account on a specific weekend. Sometimes they give points to customers who want to terminate their contracts as an attempt to coax them into staying. They have given you a lot of points and don't really care. As a result you are probably staying their customer forever – and will most likely tell this story to many friends. This is free advertising for them. Heck, maybe they would even make a news story out of this some day, it could be good publicity. Everyone is essentially getting these points \"\"for free\"\" but in fact the company has a business case by improving their image and customer retention with these points. So you can spend these points with a sound mind morally. Legally you would have to contact a lawyer, but I think chances for legal repercussions are small if you have done your duty, informed them and their customer service basically said it's ok.\"",
"title": ""
},
{
"docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95",
"text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"",
"title": ""
},
{
"docid": "7576ea11783d7147c84c20fb5a63c954",
"text": "Of course, there is no way for us to know whether or not the clerk is trying to rip you off $1.29 at a time, but I can't understand the possible motivation for doing so. I would imagine that most people would catch this at some point, so for a store to consistently overcharge for something like this is really bad for business. They would be risking upsetting a customer all for the potential gain of $1.29. I have to assume that it is not malice, but incompetence. We don't know what caused the clerk to be confused, but it is not really our concern. From what I can tell, you've gotten the right price in the end. You were ultimately charged for two drinks, and the extra $1.29 that you were charged was refunded. Since it happened three times, you have to decide how badly you want these drinks in the future. If you choose to return, you'll just have to expect the possibility that it will ring up incorrectly, and you'll have to get it fixed. If that seems like too much hassle, then don't return to this store.",
"title": ""
},
{
"docid": "15a2c99870047a0f0da6754e8d2abb9e",
"text": "Hence why I pay bill by bill and don't authorize automatic withdrawals. Are you telling me your online banking and/or utility company don't allow you to make non automatic payments online? If so I guess thats the answer to OP's question...",
"title": ""
},
{
"docid": "6794ad18ad2fa4de328253fa5f918bec",
"text": "While I might have to agree with PiratesSayARRR from below about missing case details, I have to say, your math seems to check out to me. Although the numbers aren't rouded off and pretty, they back out. $22,285.71 generates $334.28 of fees in a month; subtract from that the monthly cost of funds (.003333 x $22285.71)= $74.28... $334.28-74.28 = $260.00. Hate to say it, but maybe they didn't hire you for a different reason?",
"title": ""
},
{
"docid": "5b76302ffffe9f7cb6178113837b4c9e",
"text": "\"Yeah, I'll take the challenge...:) How trustworthy these are and what are their sources of income? These are in fact two separate questions, but the answers are related. How trustworthy? As trustworthy as they're clear about their own sources of income. If you cannot find any clue as to why, what for and how they're paying you - you probably should walk away. What's too good to be true usually is indeed too good to be true. For those of the sites that I know of their sources of income, it is usually advertisements and surveys. To get paid, you have to watch advertisements and/or answer surveys. I know of some sites who are legit, and pay people (not money, but gift cards, airline miles, etc) for participating in surveys. My own HMO (Kaiser in California) in fact pays (small amounts) to members who participate in enough surveys, so its legit. Are these sites worthwhile to consider for extra income? Not something you could live off, but definitely can get you enough gift cards for your weekly trip to Starbucks. What do I need to consider tax wise? Usually the amounts are very low, and are not paid in cash. While it is income, I doubt the IRS will chase you if you don't report the $20 Amazon gift card you got from there. It should, strictly speaking, be reported (probably as hobby income) on your tax return. Most people don't bother dealing with such small amounts though. In some cases (like the HMO I mentioned), its basically a rebate of the money paid (you pay your copays, deductibles etc. Since the surveys are only for members, you basically get your money back, not additional income). This is in fact similar to credit card rebates. Is there a best practice for handling the income? If we're talking about significant amounts (more than $20-30 a year), then you need to keep track of the income and related expenses, and report it as any other business income on your taxes, Schedule C. Is there a good test to determine what is and isn't a scam? As I said - if it looks too good to be true - it most likely is. If you're required to provide your personal/financial information without any explanation as to why, what it will be used for, and why and what for you're going to be paid - I'd walk away. Otherwise, you can also check Internet reviews, BBB ratings, FTC information and the relevant state agencies and consumer watchdogs (for example: http://www.scamadviser.com) whether they've heard of that particular site, and what is the information they have on it. A very good sign for a scam is contact information. Do they have a phone number to call to? Is it in your own country? If its not in your own country - definitely go away (for example the original link that was in the question pointed to a service whose phone number is in the UK, but listed address is in Los Angeles, CA. A clear sign of a scam). If they do have a phone number - try it, talk to them, call several times and see how many different people you're going to talk to. If its always the same person - run and hide. Do they have an address? If not - walk away. If they do - look it up. Is it a PMB/POB? A \"\"virtual\"\" office? Or do they have a proper office set up, which you can see on the map and in the listings as their office? And of course your guts. If your guts tell you its a scam - it very likely is.\"",
"title": ""
},
{
"docid": "c6c5cceac93492de6f289f5f98110cd9",
"text": "The first thing you should do, and should have been doing all this time if you weren't, is to take the money you would've paid in the payment plan and set it aside in a separate savings account. If your plan was 2 years, $65 a month, then set that aside, now. That will allow you to be in a better negotiating position when this is finally resolved. It's also possible this takes two years to be resolved - in which case you'll be in position to pay the debt off in full at that point! It's also possible at some point in the future you'll be offered to settle for half or something like that, at which point if you've saved several months of payments that might be more practical to do. As far as what to do about the charges being removed, unless you have a specific reason for believing they're invalid, that's probably impossible. You could go to the Public Service Commission (outlined in this article about making complaints about overcharges from ConEd); it seems like it's probably too late for that, honestly, but who knows. If you'd made more of an effort at the time, it's possible you could've disputed them back then with PSC. And, as far as what to do with requiring written payment plans: absolutely, 100%. I would try to find out why you're not getting the plans. Do they have the wrong address, perhaps? Or is your mail sometimes poorly delivered? Ask them to send it via certified mail (you may be charged a few dollars for this), or ask them to e-mail you a copy while you're on the phone with them (my preferred option). Bill collectors like getting their money, so they ought to help you out with this.",
"title": ""
},
{
"docid": "7da971f8aec74ab1da208c8d182c2eb1",
"text": "\"Context: My parents overseas (Japan) sent me a little over $100,000 to cover an expensive tuition payment and moderate living expenses in 2014. They are not US residents, Green card holders or citizens. They did not remit the tuition payment directly to the school. I am a resident (for tax). This is enough to answer yes. That's basically the set of requirements for filing: you received >$100K from a non-US person and you yourself are a US person. You have to report it, and unless it is taxable income - it is a gift. Taxable income is reported on the form 1040, gifts are reported on the form 3520. The fact that in Japan it is not considered a gift is irrelevant. Gift tax laws vary between countries, some (many) don't have gift taxes at all. But the reporting requirement is based on the US law and the US definition of \"\"gift\"\". As I said above, if it is not a gift per the US law, then it is taxable income (and then you report all of it regardless of the amount and pay taxes). Had they paid directly to the institution, you wouldn't need to count it as income/gift to you because you didn't actually receive the money (so no income) and it went directly to cover your qualified education expenses (so no gift), but this is not the case in your situation. Whether or not this will be reported by the IRS back to Japan - I don't know, but it was probably already reported to the authorities in Japan by the banks through which the transfers went through. As to whether it will trigger an audit - doesn't really matter. It was, most likely, reported to the IRS already by the receiving banks in the US, so not reporting it on your tax return (either as income or on form 3520) may indeed raise some flags.\"",
"title": ""
}
] |
fiqa
|
6e1475fe894f15a7f19b49ab5eb821d5
|
Should rented software be included on my LLC's balance sheet?
|
[
{
"docid": "fcb2df2969c498e8cc9787fb8e1c130e",
"text": "I was only able to find Maryland form 1 to fit your question, so I'll assume you're referring to this form. Note the requirement: Generally all tangible personal property owned, leased, consigned or used by the business and located within the State of Maryland on January 1, 201 must be reported. Software license (whether time limited or not, i.e.: what you consider as rental vs purchase) is not tangible property, same goes to the license for the course materials. Note, with digital media - you don't own the content, you merely paid for the license to use it. Design books may be reportable as personal tangible property, and from your list that's the only thing I think should be reported. However, having never stepped a foot in Maryland and having never seen (or even heard of) this ridiculous form before, I'd suggest you verify my humble opinion with a tax adviser (EA/CPA) licensed in the State of Maryland to confirm my understanding of this form.",
"title": ""
}
] |
[
{
"docid": "3b508be9bf42e6416a64135c64d2221a",
"text": "There are other answers here about how much you can deduct for a home office. What seems unique is the question of whether you can deduct it for both your LLC and for your employment. Unless your LLC owns the home, you cannot deduct the depreciation directly. Instead you have to charge your LLC rent for the time that you are using the space for the LLC. That rent must be declared as income on your personal tax return, and you can then offset some of it with the time you spend in that space working for your employer and depreciation for time it is being rented to your LLC. Using a strategy this complex may save you a few bucks on your return, but this is definitely an area where a tax professional is worth the expense making sure you get it right.",
"title": ""
},
{
"docid": "f70a67d924690e27c7d881ed024bb809",
"text": "From my experience, I opened a business account to handle my LLC which owns a rental property. The account process and features were similar to shopping for a personal checking account. There would be fees for falling below a minimum balance, and for wanting a paper statement. In my case, keeping $2000 avoids the fee, and I pull the statements online and save the PDFs. Once open for a certain amount of time, you might be able to get credit extended based on the money that flows through that account. The online access is similar to my personal checking, as is the sending of payments electronically.",
"title": ""
},
{
"docid": "c93f3024d8d4bde48399c1dabe42032b",
"text": "\"I've done various side work over the years -- computer consulting, writing, and I briefly had a video game company -- so I've gone through most of this. Disclaimer: I have never been audited, which may mean that everything I put on my tax forms looked plausible to the IRS and so is probably at least generally right, but it also means that the IRS has never put their stamp of approval on my tax forms. So that said ... 1: You do not need to form an LLC to be able to claim business expenses. Whether you have any expenses or not, you will have to complete a schedule C. On this form are places for expenses in various categories. Note that the categories are the most common type of expenses, there's an \"\"other\"\" space if you have something different. If you have any property that is used both for the business and also for personal use, you must calculate a business use percentage. For example if you bought a new printer and 60% of the time you use it for the business and 40% of the time you use it for personal stuff, then 60% of the cost is tax deductible. In general the IRS expects you to calculate the percentage based on amount of time used for business versus personal, though you are allowed to use other allocation formulas. Like for a printer I think you'd get away with number of pages printed for each. But if the business use is not 100%, you must keep records to justify the percentage. You can't just say, \"\"Oh, I think business use must have been about 3/4 of the time.\"\" You have to have a log where you write down every time you use it and whether it was business or personal. Also, the IRS is very suspicious of business use of cars and computers, because these are things that are readily used for personal purposes. If you own a copper mine and you buy a mine-boring machine, odds are you aren't going to take that home to dig shafts in your backyard. But a computer can easily be used to play video games or send emails to friends and relatives and lots of things that have nothing to do with a business. So if you're going to claim a computer or a car, be prepared to justify it. You can claim office use of your home if you have one or more rooms or designated parts of a room that are used \"\"regularly and exclusively\"\" for business purposes. That is, if you turn the family room into an office, you can claim home office expenses. But if, like me, you sit on the couch to work but at other times you sit on the couch to watch TV, then the space is not used \"\"exclusively\"\" for business purposes. Also, the IRS is very suspicious of home office deductions. I've never tried to claim it. It's legal, just make sure you have all your ducks in a row if you claim it. Skip 2 for the moment. 3: Yes, you must pay taxes on your business income. If you have not created an LLC or a corporation, then your business income is added to your wage income to calculate your taxes. That is, if you made, say, $50,000 salary working for somebody else and $10,000 on your side business, then your total income is $60,000 and that's what you pay taxes on. The total amount you pay in income taxes will be the same regardless of whether 90% came from salary and 10% from the side business or the other way around. The rates are the same, it's just one total number. If the withholding on your regular paycheck is not enough to cover the total taxes that you will have to pay, then you are required by law to pay estimated taxes quarterly to make up the difference. If you don't, you will be required to pay penalties, so you don't want to skip on this. Basically you are supposed to be withholding from yourself and sending this in to the government. It's POSSIBLE that this won't be an issue. If you're used to getting a big refund, and the refund is more than what the tax on your side business will come to, then you might end up still getting a refund, just a smaller one. But you don't want to guess about this. Get the tax forms and figure out the numbers. I think -- and please don't rely on this, check on it -- that the law says that you don't pay a penalty if the total tax that was withheld from your paycheck plus the amount you paid in estimated payments is more than the tax you owed last year. So like lets say that this year -- just to make up some numbers -- your employer withheld $4,000 from your paychecks. At the end of the year you did your taxes and they came to $3,000, so you got a $1,000 refund. This year your employer again withholds $4,000 and you paid $0 in estimated payments. Your total tax on your salary plus your side business comes to $4,500. You owe $500, but you won't have to pay a penalty, because the $4,000 withheld is more than the $3,000 that you owed last year. But if next year you again don't make estimated payment, so you again have $4,000 withheld plus $0 estimated and then you owe $5,000 in taxes, you will have to pay a penalty, because your withholding was less than what you owed last year. To you had paid $500 in estimated payments, you'd be okay. You'd still owe $500, but you wouldn't owe a penalty, because your total payments were more than the previous year's liability. Clear as mud? Don't forget that you probably will also owe state income tax. If you have a local income tax, you'll owe that too. Scott-McP mentioned self-employment tax. You'll owe that, too. Note that self-employment tax is different from income tax. Self employment tax is just social security tax on self-employed people. You're probably used to seeing the 7-whatever-percent it is these days withheld from your paycheck. That's really only half your social security tax, the other half is not shown on your pay stub because it is not subtracted from your salary. If you're self-employed, you have to pay both halves, or about 15%. You file a form SE with your income taxes to declare it. 4: If you pay your quarterly estimated taxes, well the point of \"\"estimated\"\" taxes is that it's supposed to be close to the amount that you will actually owe next April 15. So if you get it at least close, then you shouldn't owe a lot of money in April. (I usually try to arrange my taxes so that I get a modest refund -- don't loan the government a lot of money, but don't owe anything April 15 either.) Once you take care of any business expenses and taxes, what you do with the rest of the money is up to you, right? Though if you're unsure of how to spend it, let me know and I'll send you the address of my kids' colleges and you can donate it to their tuition fund. I think this would be a very worthy and productive use of your money. :-) Back to #2. I just recently acquired a financial advisor. I can't say what a good process for finding one is. This guy is someone who goes to my church and who hijacked me after Bible study one day to make his sales pitch. But I did talk to him about his fees, and what he told me was this: If I have enough money in an investment account, then he gets a commission from the investment company for bringing the business to them, and that's the total compensation he gets from me. That commission comes out of the management fees they charge, and those management fees are in the same ballpark as the fees I was paying for private investment accounts, so basically he is not costing me anything. He's getting his money from the kickbacks. He said that if I had not had enough accumulated assets, he would have had to charge me an hourly fee. I didn't ask how much that was. Whew, hadn't meant to write such a long answer!\"",
"title": ""
},
{
"docid": "75546585b13b415f40ba7b912437fc1a",
"text": "\"Depending on the nature of the expenses, you will enter them under Deductions, on lines 9 through 20. Did you rent an office? Add the rental expense to line 13. Fee for a business license? Line 14. Everything else that doesn't fall into any specific category goes on line 20 (You'll need to attach a small statement that breaks out the expense categories, e.g. office supplies, phone, legal fees, etc.) Expenses that are entered in the Income section are costs directly related to sales, such as merchant fees that you pay to a bank if you take payments by credit card. Since you said the partnership has \"\"zero money coming in,\"\" I assume that it currently has no revenues, so all the fields in the Income section would be zero.\"",
"title": ""
},
{
"docid": "8f39fca14ea7afb4292fba4707c494ce",
"text": "Your account entries are generally correct, but do note that the last transaction is a mixture of the balance sheet and income statement. If Quickbooks doesn't do this automatically then the expense must be manually removed from the balance sheet. The expense should be recognized on the balance sheet and income statement when it accrues, and it accrues when the prepaid rent is extinguished when consumed by the landlord, so that is when the second entry in your question should be booked. The cash flow statement will reflect all of these cash transactions immediately.",
"title": ""
},
{
"docid": "ceeecc34e00810972aa028a778fd4c31",
"text": "The LLC will file its own business taxes which may or may not have business level income and expenses. At the end, the LLC will issue Schedule K-1 tax forms to the members, that based on their percentage ownership, will reflect the percentage share of the income/losses. From an individual standpoint, the members need only worry about the K-1 form they receive. This has quite a few pass-through categories from the LLC, but the Income/Loss may be the only used one. The individual will likely include the K-1 by filing a Schedule-E along with their 1040 form. The 1040 Schedule-E has some ability to deduct expenses as an individual. Generally it's best not to commingle expenses. Additional schedule-E expense reporting is generally for non-reimbursed, but related business expenses. If a member paid certain fees for the LLC, it is better for the LLC to reimburse him and then deduct the expense properly. Schedule-E is on a non-LLC, personal level.",
"title": ""
},
{
"docid": "20ddde4441bb0e5a4d7ee4f81e44300d",
"text": "According to the Illinois Department of Revenue, you don't have to file any taxes that are specific to a LLC, only your personal taxes. LLC on Federal level is disregarded, instead you submit all your business income/expenses on Schedule C. On the state level - it seems to be the same (only individual tax return). Consult your state certified tax specialist. That is not the case in other states, for example in California LLC has to file its own tax return and pay its own taxes, in additional to the individual taxes.",
"title": ""
},
{
"docid": "521ca52299c5af07b7cf3157b6a45764",
"text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"",
"title": ""
},
{
"docid": "3d7f9fe5894143a3984af1d6e43a76a0",
"text": "\"If you have a single member LLC there is no need to separate expenses in this way since it is simply treated as part of the owner's normal tax returns. This is the way I've been operating. Owner of Single-Member LLC If a single-member LLC does not elect to be treated as a corporation, the LLC is a \"\"disregarded entity,\"\" and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on: Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) (PDF) Form 1040 Schedule E, Supplemental Income or Loss (PDF) Form 1040 Schedule F, Profit or Loss from Farming (PDF) An individual owner of a single-member LLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship. If the single-member LLC is owned by a corporation or partnership, the LLC should be reflected on its owner's federal tax return as a division of the corporation or partnership. https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies\"",
"title": ""
},
{
"docid": "fbc1d3eb64e1865de7e6b35e91270f70",
"text": "I have a basic template for creating a balance sheet, cashflow statement and P&L. From here you can put in your assumptions, and expenses, then plug in your forecasted revenue (which you need to create on a separate spreadsheet. Would something like this help?",
"title": ""
},
{
"docid": "50d712e4318ff47ff4c92c5ddf4fa22d",
"text": "I'm not certain I understand what you're trying to do, but it sounds like you're trying to create a business expense for paying off your personal debt. If so - you cannot do that. It will constitute a tax fraud, and if you have additional partners in the LLC other than you and your spouse - it may also become an embezzlement issue. Re your edits: Or for example, can you create a tuition assistance program within your company and pay yourself out of that for the purposes of student loan money. Explicitly forbidden. Tuition assistance program cannot pay more than 5% of its benefits to owners. See IRS pub 15-B. You would think that if there was a way to just incorporate and make your debts pre-tax - everyone would be doing it, wouldn't you?",
"title": ""
},
{
"docid": "1596afff2f3ee3401968378a590116e6",
"text": "Somewhat. The balance sheet will include liabilities which as Michael Kjörling points out would tell you the totals for the debt which would often be loans or bonds depending on one's preferred terminology. However, if the company's loan was shorter than the length of the quarter, then it may not necessarily be reported is something to point out as the data is accurate for a specific point in time only. My suggestion is that if you have a particular company that you want to review that you take a look at the SEC filing in full which would have a better breakdown of everything in terms of assets, liabilities, etc. than the a summary page. http://investor.apple.com/ would be where you could find a link to the 10-Q that has a better breakdown though it does appear that Apple doesn't have any bonds outstanding. There are some companies that may have little debt due to being so profitable in their areas of business.",
"title": ""
},
{
"docid": "e0c84063098cf5ce090938ff3d6fb0a5",
"text": "From what I can understand you will be paying money to buy a business with more problems than assets. If it's all about the reviews then register an LLC yourself and do some marketing work, it will cost much less. If this business had clients and constant recurring revenue then that would be a different story.",
"title": ""
},
{
"docid": "cc944b121bd06b9a75a12eae2177827d",
"text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5",
"title": ""
},
{
"docid": "57960d2712092483c3218684b04ca9fe",
"text": "\"You don't specify which country you are in, so my answers are more from a best practice view than a legal view.. I don't intend on using it for personal use, but I mean it's just as possible. This is a dangerous proposition.. You shouldn't co-mingle business expenses with personal expenses. If there is a chance this will happen, then stop, make it so that it won't happen. The big danger is in being able to have traceability between what you are doing for the business, and what you are doing for yourself. If you are using this as a \"\"staging\"\" account for investments, etc., are those investments for yourself? Or for the business? Is tax treatment on capital gains and/or dividends the same for personal and business in your jurisdiction? If you buy a widget, is the widget an expense against business income? Or is it an out of pocket expense for personal consumption? The former reduces your taxable income, the latter does not. I don't see the benefit of a real business account because those have features specific to maybe corporations, LLC, and etc. -- nothing beneficial to a sole proprietor who has no reports/employees. The real benefit is that there is a clear delineation between business income/expenses and personal income/expenses. This account can also accept money and hold it from business transactions/sales, and possibly transfer some to the personal account if there's no need for reinvesting said amount/percentage. What you are looking for is a commonly called a current account, because it is used for current expenses. If you are moving money out of the account to your personal account, that speaks to paying yourself, which has other implications as well. The safest/cleanest way to do this is to: While this may sound like overkill, it is the only way to guarantee that income/expenses are allocated to the correct entity (i.e. you, or your business). From a Canadian standpoint:\"",
"title": ""
}
] |
fiqa
|
dd728e274bccd721f0555e099cbe636b
|
How to allocate profit and loss in partnership where one partner's activities are profitable and the other's aren't?
|
[
{
"docid": "4d08b1f08fde38cbbb81874de0a9017d",
"text": "You should have a partnership agreement of some sort. The reason partnership agreements exist is so nobody can change the game because of the outcome. I'd say the most typical partnership agreement is that everyone gets an equal cut, meaning that everyone also makes an equal contribution. If you have start up expenses of $10,000, you'd each contribute $5,000. Separately, you can determine ownership share by contribution amounts, maybe one of you contributed $2,000 and the other $8,000; this would be an 80/20 split. The performance of the operation doesn't have anything to do with determining how to divide the pie, your partnership agreement determines that. How much have you each contributed and what agreement did you make before you decided to be partners? If you have a poor performing business segment, then the partnership should get together and consider adjusting or stopping that line of business. But you don't change how the pie is divided because of it; unless your partnership agreement says you do.",
"title": ""
}
] |
[
{
"docid": "76d3a95d25ff7bb001a41cb51f5d5769",
"text": "\"Can I deduct the money that I giving to my team mates from the taxes that I pay? If yes, how should I record the transaction? Why? Why are you giving money to your team mates? That's the most important question, and any answer without taking this into account is not full. You would probably have to talk to a professional tax adviser (a CPA/EA licensed in your state) about the details, but in general - you cannot deduct money you give someone just because you feel like it. Moreover, it may be subject to an additional tax - the gift tax. PS: We don't have any partnership or something similar, it is just each of us on his own. Assuming you want to give your team mates money because you developed the project together - then you do in fact have a partnership. In order to split the income properly, you should get a tax ID for the partnership, and issue a 1065 and K-1 for each team mate. In most states, you don't need to \"\"register\"\" a partnership with the state. Mere \"\"lets do things together\"\" creates a partnership. Otherwise, if they work for you (as opposed to with you in the case above), you can treat it as your own business income, and pay your team mates (who are now your contractors/employees) accordingly. Be careful here, because the difference between contractor and employee in tax law is significant, and you may end up being on the hook for a lot of things you're not aware of. Bottom line, in certain situation you cannot deduct, in others you can - you have to discuss it with a professional. Doing these things on your own without fully understanding what each term means - is dangerous, and IRS doesn't forgive for \"\"honest mistakes\"\".\"",
"title": ""
},
{
"docid": "38549ea5ea50e600c5bbb46c57ecc3ac",
"text": "\"I have a basic rule: it is the \"\"business\"\" guy's responsibility to raise the money. If they can't do it, then they are incompetent, and the \"\"tech\"\" guy should avoid them. Generally speaking, the business side needs to be able to identify and validate the market opportunity, define the product, handle sales and marketing and raise the money. The tech side needs to translate the product definition into a technical solution and build it. If you have programming skills, you have plenty of options, and should not partner with people who can't do their part. You can probably handle the business side of things as well, though there is a difference in skill and temperament. Find someone who is as good or better at the business side than you are at programming.\"",
"title": ""
},
{
"docid": "eb5e9815faf7113e06c057aa15dd3c3e",
"text": "\"As long as the losing business is not considered \"\"passive activity\"\" or \"\"hobby\"\", then yes. Passive Activity is an activity where you do not have to actively do anything to generate income. For example - royalties or rentals. Hobby is an activity that doesn't generate profit. Generally, if your business doesn't consistently generate profit (the IRS looks at 3 out of the last 5 years), it may be characterized as hobby. For hobby, loss deduction is limited by the hobby income and the 2% AGI threshold.\"",
"title": ""
},
{
"docid": "f69a1160d0806abe01e9fa3064037448",
"text": "Based on the additional comment you gave, I would recommend that you keep the capital from the businesses separate as much as possible. It sounds like you won't get into any trouble legally if you make 'loans' or transfers of capital from one business into the other. But I would suggest that you keep detailed records of any transfers that you do make. The reason why is that in any business, it is important to know the economics of how your business makes money. If you find yourself making transfers repeatedly, then your business model may be bad. Even if your transfers are only to deal with the cost of poor customers, it could still mean that your business model needs to be adjusted. But if it's a question of the timing of cash flows, then there's really nothing wrong with taking some of the money from your successful pants operation and building up more working capital in your stationery shop.",
"title": ""
},
{
"docid": "983e84eb31d74702554938415b8ccc43",
"text": "One approach would be to create Journal Entries that debit asset accounts that are associated with these items and credit an Open Balance Equity account. The value of these contributions would have to be worked out with an accountant, as it depends on the lesser of the adjusted basis vs. the fair market value, as you then depreciate the amounts over time to take the depreciation as a business expense, and it adjusts your basis in the company (to calculate capital gains/losses when you sell). If there were multiple partners, or your accountant wants it this way, you could then debit open balance equity and credit the owner's contribution to a capital account in your name that represents your basis when you sell. From a pure accounting perspective, if the Open Balance Equity account would zero out, you could just skip it and directly credit the capital accounts, but I prefer the Open Balance Equity as it helps know the percentages of initial equity which may influence partner ownership percentages and identify anyone who needs to contribute more to the partnership.",
"title": ""
},
{
"docid": "f316e35fd23f4743afd2536b9f0ef1dd",
"text": "Because some overhead expenses will be shared (accounting, most salaries, sales etc.) it's far easier to give him an ownership stake in the company because you won't be able to calculate net profit for each component correctly. What I would say to him is, in exchange for $80K and the contract with his building company (make sure it is significant enough to be worth it$ you will give him 35% of the company. How did you come up with he $1 million in net profit calculation? How much of that is reliant on his business?",
"title": ""
},
{
"docid": "2ff2c8d04f80b637da2b51de86a1c16e",
"text": "First, determine the workload he will expect. Will you have to quit your other work, either for time or for competition? How much of your current business will be subsumed into his business, if any? Make sure to understand what he wants from you. If you make an agreement, set it in writing and set some clear expectations about what will happen to your business (e.g. it continues and is not part of your association with the client). Because he was a client for your current business, it can blur the lines. Second, if you join him, make sure there is a business entity. By working together for profit, you will have already formed a partnership for tax purposes. Best to get an entity, both for the legal protection and also for the clarity of law and accounting. LLCs are simplest for small ventures; C corps are useful if you have lots of early losses and owners that can't use them personally, or if you want to be properly formed for easy consumption by a strategic. Most VCs and super-angels prefer everybody be a straight C. Again, remember to define, as necessary, what you are contributing to be an owner and what you are retaining (your original business, which for simplicity may already be in an entity). As part of this process, make sure he defines the cap table and any outstanding loans. Auntie June and Cousin Steve might think their gifts to him were loans or equity purchases; best to clear this issue up early before there's any more money in it. Third, with regard to price, that is an intensely variable question. It matters what the cap table looks like, how early you are, how much work he's already done, how much work remains to be done, and how much it will pay off. Also, if you do it, expect to be diluted by other employees, angels, VCs, other investors, strategics, and so on. Luckily, more investors usually indicates a growing pie, so the dilution may not be at all painful. But it should still be on your horizon. You also need to consider your faith in your prospective partner's ability to run the business and to be a trustworthy partner (so you don't get Zuckerberg'd), and to market the business and the product to customers and investors. If you don't like the prospects, then opt for cash. If you like the business but want to hedge, ask for compensation plus equity. There are other tricks you could use to get out early, like forced redemption, but they probably wouldn't help either because it'd sour your relationship or the first VC or knowledgeable angel to come along will want you to relinquish that sort of right. It probably comes down to a basic question of your need for cash, his willingness to let you pursue outside work (hopefully high) and your appraisal of the business' prospects.",
"title": ""
},
{
"docid": "2e049953420e0a257e711543060774db",
"text": "HMRC calls it: Averaging for creators of literary or artistic works, and it is the averaging of your profits for 2 successive years. It's helpful in situations like you describe, where income can fluctuate wildly from year to year, the linked article has the full detail, but some of the requirements are: You can use averaging if: you’re self-employed or in a partnership, and the business started before 6 April 2014 and didn’t end in the 2015 to 2016 tax year your profits are wholly or mainly from literary, dramatic, musical or artistic works or from designs you or your business partner (if you’re in a partnership) created the works personally. Additionally: Check that your profit for the poorer year, minus any adjusted amounts, is less than 75% of the figure for your better year. If it is, you can use averaging. Then, check if the difference between your profits for the 2 years is more than 30% of your profit for the better year. If it is, work out the average by adding together the profits for the 2 years, and divide the total by 2.",
"title": ""
},
{
"docid": "75546585b13b415f40ba7b912437fc1a",
"text": "\"Depending on the nature of the expenses, you will enter them under Deductions, on lines 9 through 20. Did you rent an office? Add the rental expense to line 13. Fee for a business license? Line 14. Everything else that doesn't fall into any specific category goes on line 20 (You'll need to attach a small statement that breaks out the expense categories, e.g. office supplies, phone, legal fees, etc.) Expenses that are entered in the Income section are costs directly related to sales, such as merchant fees that you pay to a bank if you take payments by credit card. Since you said the partnership has \"\"zero money coming in,\"\" I assume that it currently has no revenues, so all the fields in the Income section would be zero.\"",
"title": ""
},
{
"docid": "2fd0badcf019badaaa17e36fff9fa597",
"text": "Pool their money into my own brokerage account and simply split the gains/losses proportional to the amount of money that we've each contributed to the account. I'm wary of this approach due to the tax implications and perhaps other legal issues so I'd appreciate community insight here. You're right to be wary. You might run into gift tax issues, as well as income tax liability and appropriation of earnings. Not a good idea at all. Don't do this. Have them set up their own brokerage account and have them give me the login credentials and I manage the investments for them. This is obviously the best approach from a tracking and tax perspective, but harder for me to manage; to be honest I'm already spending more time than I want to managing my own investments, so option 1 really appeals to me if the drawbacks aren't prohibitive. That would also require you to be a licensed financial adviser, at least to the best of my understanding. Otherwise there's a lot of issues with potential liability (if you make investments that lose money - you might be required to repay the losses). You should do this only with a proper legal and tax advice - from an attorney and/or CPA/EA licensed in your state. There are proper ways to do this (limited partnership or LLC, for example), but you have to cover your ass-ets with proper operating agreements in place that have to be reviewed by legal counsel of each of the members/partners,",
"title": ""
},
{
"docid": "493fff5992da61579f6f8f74553419bf",
"text": "\"This has to do with the type of plan offered: is it a 401(k) plan or a profit-sharing plan, or both? If it's 401(k) I believe the IRS will see this distribution as elective and count towards the employee's annual elective contribution limit. If it's profit sharing the distribution would be counted toward the employer's portion of the limit. However -- profit sharing plans have a formula that's standard across the board and applied to all employees. i.e. 3% of company profits given equally to all employees. One of the benefits of the profit sharing plans is also that you can use a vesting schedule. I'd consult your accountant to see how this specifically impacts your business - but in the case you describe this sounds like an elective deferral choice by an employee and I don't see how (or why) you'd make this decision for them. Give them the bonus and let them choose how it's paid out. Edit: in re-reading your question it actually sounds like you're wanting to setup a profit sharing type situation - but again, heed what I said above. You decide the amount of \"\"profit\"\" - but you also have to set an equation that applies across the board. There is more complication to it than this brief explanation and I'd consult your accountant to see how it applies in your situation.\"",
"title": ""
},
{
"docid": "f2001e382087977d58faadeb8485548a",
"text": "I'm not familiar with Gnucash, but I can discuss double-entry bookkeeping in general. I think the typical solution to something like this is to create an Asset account for what this other person owes you. This represents the money that he owes you. It's an Accounts Receivable. Method 1: Do you have/need separate accounts for each company that you are paying for this person? Do you need to record where the money is going? If not, then all you need is: When you pay a bill, you credit (subtract from) Checking and debit (add to) Friend Account. When he pays you, you credit (subtract from) Friend Account and debit (add to) Checking. That is, when you pay a bill for your friend you are turning one asset, cash, into a different kind of asset, receivable. When he pays you, you are doing the reverse. There's no need to create a new account each time you pay a bill. Just keep a rolling balance on this My Friend account. It's like a credit card: you don't get a new card each time you make a purchase, you just add to the balance. When you make a payment, you subtract from the balance. Method 2: If you need to record where the money is going, then you'd have to create accounts for each of the companies that you pay bills to. These would be Expense accounts. Then you'd need to create two accounts for your friend: An Asset account for the money he owes you, and an Income account for the stream of money coming in. So when you pay a bill, you'd credit Checking, debit My Friend Owes Me, credit the company expense account, and debit the Money from My Friend income account. When he repays you, you'd credit My Friend Owes Me and debit Checking. You don't change the income or expense accounts. Method 3: You could enter bills when they're received as a liability and then eliminate the liability when you pay them. This is probably more work than you want to go to.",
"title": ""
},
{
"docid": "5a97a5835511e682032ec0ed8c64e6eb",
"text": "These new block chain coins with their smart contracts seem to be heading in that direction but I'd like someone to walk me through how two or more people with varying amounts of contributions to the organization can keep it all organized. One partner contributes money while the other contributes time and assets. How do you determine a value of each persons contribution? Do you convert each persons contributions to shares or coins?",
"title": ""
},
{
"docid": "1a01e7ec0410e2e2eefa633c0b1db4cc",
"text": "Assuming no debt, as you've specified in the comments to your question, the assets should generally be distributed proportional to ownership share. BUT, without any sort of agreement, there might be contention on what each investor's share is and that might get fought out in court. With a corporation issuing shares, the corporate charter probably defines the relationship between different classes of shares (or specifies only one class). For a partnership though, you could conceivable have people making claims of ownership stake based on labor in addition to any cash that they put up. Messy if there's no up-front agreement.",
"title": ""
},
{
"docid": "028a096c096a0e3346de1aa2bda02571",
"text": "For some reason this can result in either the flow through income being UNTAXED or the flow through income being taxed as a capital gains. Either way this allows a lower tax rate for LLC profits. I'm not sure that correct. I know it has something to do with capital accounts. This is incorrect. As to capital accounts - these are accounts representing the members/partners' capital in the enterprise, and have nothing to do with the tax treatment of the earnings. Undistributed earnings add to the capital accounts, but they're still taxed. Also, is it true that if the LLC loses money, that loss can be offset against other taxable income resulting in a lower total taxation? It can offset taxable income of the same kind, just like any other losses on your tax return. Generally, flow-through taxation of partnerships means that the income is taxed to the partner with the original attributes. If it is capital gains - it is taxed as capital gains. If it is earned income - it is taxed as earned income. Going through LLC/partnership doesn't re-characterize the income (going through corporation - does, in many cases).",
"title": ""
}
] |
fiqa
|
fae429501de11024526cb53a1c18c87b
|
Deducting Hobby Expenses on my Federal Income Taxes?
|
[
{
"docid": "6f1d7df074289cdd5ac0a83608620c90",
"text": "I suggest to start charging slightly more than needed to cover expenses. All you need is to show profit. It doesn't have to be significant - a couple of hundred of dollars of consistent yearly profit should suffice to show a profitable business. Then you can deduct on Schedule C all the related expenses. The caveat is that the profit (after the deduction of the expenses will be a bit smaller) will be subject to not only income tax but also the self-employment tax. But at least you'll pay tax on profit that is not entirely phantom. I remember suggesting you getting a professional consultation on this matter a while ago. You should really do that - talk to a EA/CPA licensed in your state, it may be well worth the $100-200 fee they'll charge for the consultation (if at all...).",
"title": ""
},
{
"docid": "d441c483fe7ce59e0a61f1fbcb071287",
"text": "Does your wife perform solo or in association with other actor/actresses and other volunteers? The latter arrangement sounds more like an unincorporated association or a partnership, which might be a bit freer to match the revenue and expenses. By grinding through the proper procedures, it might be possible to get official non-profit status for it, as well. Ask a professional.",
"title": ""
}
] |
[
{
"docid": "e5d3f0e0a1b880afa3dcb267594e6ea3",
"text": "Assuming the US, if a human assessor audited you, could you show a future profit motive or will they conclude you are expensing a hobby? If you answer yes, you are likely to only be deducting limited expenses this year, carrying forward losses to your profitable years. See the examples in pub 535: http://www.irs.gov/publications/p535/ch01.html#en_US_2014_publink1000208633",
"title": ""
},
{
"docid": "90b272b16d3db982961db359ed6ecedc",
"text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.",
"title": ""
},
{
"docid": "27be59dd2f4445169ef9d91862353b69",
"text": "It would be unusual but it is possible that the expenses could be very high compared to your income. The IRS in pub 529 explains the deduction. You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. The next part lists examples. I have cut the list down to highlight ones that could be large. You may be able to deduct the following items as unreimbursed employee expenses. Damages paid to a former employer for breach of an employment contract. Job search expenses in your present occupation. Legal fees related to your job. Licenses and regulatory fees. Malpractice insurance premiums. Research expenses of a college professor. Rural mail carriers' vehicle expenses. Tools and supplies used in your work. Work clothes and uniforms if required and not suitable for everyday use. Work-related education. If the term of employment was only part of the year, one or more of the these could dwarf your income for the year. Before deducting something that large be sure you can document it. I believe the IRS computers would flag the return and I wouldn't be surprised if they ask for additional proof.",
"title": ""
},
{
"docid": "6ebb80e56d6fa2c763af9c19fca46b16",
"text": "\"If it's work you'd be producing specifically for this organization, that would not be deductable. Per Publication 526, Charitable Deductions, \"\"You can't deduct the value of your time or services, including: … The value of income lost while you work as an unpaid volunteer for a qualified organization.\"\" On the other hand, if you were say an author of a published book or something (not specifically written for this organization), you could donate a copy of the book and probably deduct its fair market value (or perhaps only your basis, if it's your business's inventory).\"",
"title": ""
},
{
"docid": "97cbde3c965690a53a5b344eaf7ebe19",
"text": "Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case.",
"title": ""
},
{
"docid": "69190c16bbf28e2e14427e17f7f8fe4f",
"text": "You can see some IRS info on distinguishing a business from a hobby here. Nolo also has some info. The upshot is that you can only deduct losses if your activity is, in the judgement of the IRS, a for-profit endeavor. You don't have to make a profit right away, or make a profit every year, for it to be a for-profit endeavor, but you have to be able to convince the IRS that you're doing it in order to (eventually) make a profit, not just for fun. You can't just keep deducting the losses year after year if (as in the worst case you suggest) it never makes a profit and doesn't seem to have any chance of doing so.",
"title": ""
},
{
"docid": "b84e43a18db301825aa7a9e96c8f979a",
"text": "\"I'm not an accountant, and you should probably get the advice of one to be sure about what to do. However, if the business is a sole-proprietorship, you'd complete a Schedule C for the business, and you'd end up with a loss at the end. If the investment you made in the business is considered to be entirely or partially \"\"at risk\"\" per the IRS definition, you'd get to claim all or part of the loss as a reduction in your income. If the business was an LLC, then you're beyond my already limited knowledge. There may be some other considerations based on whether this was really a business vs a hobby, and whether or not you're going to try to continue with the business, or whether you've shut it down. I'm not sure about those parts, but they'd be worth exploring with an accountant.\"",
"title": ""
},
{
"docid": "316710461de83750af605d1897addf25",
"text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses",
"title": ""
},
{
"docid": "26934933debfc980c3627ccfc5be78e7",
"text": "\"Worksheets/ Documentation: (From my experience filing my business deductions through several tax preparers.) Keep all your calculations, but only submit the calculations and worksheets requested by the tax form. Most travel deductions are just a category total. If the IRS wants more info, it will ask for it. Information from the book Home Business Tax Deductions (from Nolo) (2012): Traveling with kids: In chapter 9 (\"\"Leaving Town: Business Travel\"\"), in the section \"\"Taking People With You\"\", it specifically discusses your situation. Paraphrasing, it says that you can deduct the amount any eligible expenses would have cost you if you were traveling without your kids. So, you can deduct the cost the smaller hotel room that you and your wife would have normally rented if you were alone. How your side trips affect your business deductions: According to the book, since you spent 50% or more of your time on business activities while traveling in the U.S.: Deducting meals shared with your kids: You can deduct meals as either entertainment or travel expenses. I would recommend you buy one of Nolo's books on deductions, as it goes into much more detail than I do here.\"",
"title": ""
},
{
"docid": "8e67f5d319cbe5f6e7fc12d9ff5115ee",
"text": "\"In general, you are allowed to deduct up to $50/month per student (see page 4), but only if you aren't reimbursed. In your case, since you are receiving a stipend, the full $2000 will be treated as taxable income. But the question of \"\"is it worth it\"\" really depends on how much you will actually spend (and also what you'll get from the experience). Suppose you actually spend $1000/month to host them, and if your combined tax rate is 35%, you'll pay $700 in additional taxes each month, but you'll still profit $300 each month. If your primary motivation for hosting students is to make a profit, you could consider creating a business out of it. If you do that you will be able to deduct all of your legitimate business expenses which, in the above example, would be $1000/month. Keeping with that example, you would now pay taxes on $1000 instead of $2000, which would be $350, meaning your profit would now be $650/month. (Increasing your profit by $350/month.) You will only need to keep spending records if you plan to go the business route. My advice: assume you won't be going the business route, and then figure out what your break even point is based on your tax rate (Fed+state+FICA). The formula is: Max you can spend per month without losing money = 2000 - (2000 * T) e.g. if T = 35%, the break even point is $1300. Side note: My family hosted 5 students in 5 years and it was always a fantastic experience. But it is also a very big commitment. Teenagers eat a lot, and they drive cars, and go on dates, and play sports, and need help with their homework (especially English papers), and they don't seem to like bed times or curfews. IMHO it's totally worth it, even without the stipend...\"",
"title": ""
},
{
"docid": "4d9bdb78150f5089baeab672332d02d2",
"text": "Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "967d750f818153d0e8c46e28e5bd0ae7",
"text": "Any deductable expense will reduce your taxable income not your tax payable. Your Example 1 above is correct and gives you 100% deduction. It is like having a business where your sales are $100,000 and your expenses in making the sales is $40,000. The expenses are your tax deductions and reduce your profits on which you pay tax on to $60,000. If your Example 2 was correct then the situation above would change that you would pay say $30,000 tax on $100,000 sales, then apply your deductions (or expenses) of $40,000 so that you would pay no tax at all and in fact get $10,000 back in your return. In this case the government would not be collecting any taxes but paying out returns to everyone. Your Example 2 is absolutly incorrect.",
"title": ""
},
{
"docid": "ee9d995efd6246643d1cf4e81c394b36",
"text": "\"Yes, you may deduct the cost of building the \"\"noise cancellation system\"\" :) sorry couldn't resist. But seriously, yes you can deduct it ONCE (unless you have more cost maintaining it) and its on line 19 (Repairs and maintenance) of IRS Form 8829.\"",
"title": ""
},
{
"docid": "441d66b4f3a0b06654ca14ea69393c53",
"text": "You better consult with a tax adviser (EA or CPA) on this, my answer doesn't constitute such an advice. Basically, you're selling stuff on Kickstarter. No matter how they call it (projects, pledges, rewards - all are just words), you're selling stuff. People give you money (=pledges) and in return you're giving them tangible or intangible goods (=rewards). All the rest is just PR. So you will pay taxes on all the money you get, and you will be able to deduct some of the expenses (depends on whether its a business or a hobby, the deduction may be full or limited). It doesn't matter if you use LLC or your own account from the financial/taxation point of you, but it matters legally. LLC limits your personal liability, but do get a legal advice on this issue, and whether it is at all relevant for you. If you raise funds in 2012 you pay taxes on the money in 2012. If you go into production in 2013 - you can deduct expenses in 2013. If you're classified as a hobby, you'll end up paying full taxes in 2012 and deducting nothing in 2013. Talk to a tax adviser.",
"title": ""
},
{
"docid": "b09b1f94fb03bd10155b889cd8f16b08",
"text": "\"To claim medical expenses on your taxes they need to exceed 7.5% of your AGI, and then only the amount over 7.5% is deductible. That's not much. There is no \"\"floor\"\" if you use an FSA as it's all pre-tax. If you're concerned about use or lose, then allot less next year. It's all what you're comfortable with.\"",
"title": ""
}
] |
fiqa
|
e4ce9dd832eb95fceac157cbc9b511ed
|
How to invest a small guaranteed monthly income?
|
[
{
"docid": "c79894c7fa372a0fc8b279eaf727db50",
"text": "\"In my opinion, you can't save too much for retirement. An extra $3120/yr invested at 8% for 30 years would give you $353K more at retirement. If your \"\"good amount in my 401k\"\" is a hint that you don't want us to go in that direction, then how about saving for the child's college education? 15 years' savings, again at 8% will return $85K, which feels like a low number even in today's dollars, 15 years of college inflation and it won't be much at all. Not sure why there's guilt around spending it. If one has no debt, good retirement savings level, and no pressing need to save for something else, enjoying one's money is an earned reward. Even so, if you want a riskless 'investment' just prepay the mortgage. You'll see an effective return of the mortgage rate, 4%(?) or so, vs the .001% banks are paying. Of course, this creates a monthly windfall once the mortgage is paid off, but it buys you time to make this ultimate decision. In the end, I'd respond that similar to Who can truly afford luxury cars?, one should produce a budget. I don't mean a set of constraints to limit spending in certain categories, but rather, a look back at where the money went last year and even the year before that. What will emerge are the things that are normal, the utility bills, tax bill, mortgage, etc, as well as the discretionary spending. If all your current saving is on track, the investment may be in experiences, not financial products.\"",
"title": ""
}
] |
[
{
"docid": "f6dec2b363e24bdd007f21f55cd16a61",
"text": "The simplest way is just to compute how much money you'd have to have invested elsewhere to provide a comparable return. For example, if you assume a safe interest rate of 2.3% per year, you would need to have about $520,000 to get $1,000/month.",
"title": ""
},
{
"docid": "ddcd57afd6bc86c1fa0c5230b92e65dc",
"text": "The simplest way is to invest in a few ETFs, depending on your tolerance for risk; assuming you're very short-term risk tolerant you can invest almost all in a stock ETF like VOO or VTI. Stock market ETFs return close to 10% (unadjusted) over long periods of time, which will out-earn almost any other option and are very easy for a non-finance person to invest in (You don't trade actively - you leave the money there for years). If you want to hedge some of your risk, you can also invest in Bond funds, which tend to move up in stock market downturns - but if you're looking for the long term, you don't need to put much there. Otherwise, try to make sure you take advantage of tax breaks when you can - IRAs, 401Ks, etc.; most of those will have ETFs (whether Vanguard or similar) available to invest in. Look for funds that have low expense ratios and are fairly diversified (ie, don't just invest in one small sector of the economy); as long as the economy continues to grow, the ETFs will grow.",
"title": ""
},
{
"docid": "c5bdd92b794541937b4f697a658e0170",
"text": "\"General advice is to keep 6 months worth of income liquid -- in your case, you might want to leave 1 year liquid since, even though your income is stable now, it is not static (i.e., you're not drawing salary from an employer). The rest of it? If you don't plan on using it for any big purchases in the next 5 or so years, invest it. If you don't, you will probably lose money in the long term due to inflation (how's that for a risk? :). There are plenty of options for the risk averse, many of which handily beat inflation, though without knowing your country of residence, it's hard to say. In all likelihood, though, you'll want to invest in index funds -- such as ETFs -- that basically track industries, rather than individual companies. This is basically free portfolio diversity -- they lose money only when an entire sector loses value. Though even with funds of this type, you still want to ensure you purchase multiple different funds that track different industries. Don't just toss all of your funds into an IT index, for example. Before buying, just look at the history of the fund and make sure it has had a general upward trajectory since 2008 (I've bought a few ETFs that remained static...not what we're looking for in an investment!). If the brokerage account you choose doesn't offer commission free trades on any of the funds you want (personally, I use Schwab and their ETF portfolio), try to \"\"buy in bulk.\"\" That way you're not spending so much on trades. There are other considerations (many indexed funds have high management costs, but if you go with ETFs, they don't, and there's the question of dividends, etc), but that is getting into the weeds as far as investing knowledge is concerned. Beyond that, just keep in mind it'll take 1-2 weeks for you to see that money if you need it, and there's obviously no guarantee it'll be there if you do need it for an emergency.\"",
"title": ""
},
{
"docid": "84240d20fa203299c07f3e5197a50c72",
"text": "\"I hope I'm misunderstanding your plan... you want to invest in a way that will make SO MUCH that you pay back all of the loan payments with investment gains? Like the answer I gave on the preceding question, and like @littleadv's comment/mhoran's answers... don't do this. No good will come of it. This strategy requires higher returns, but does not necessarily give you a better return. But because you asked the question again, let me specify what you're missing... I do think that learning is a good thing. It boils down to two very significant problems that you haven't addressed: (1) Where are you getting your monthly \"\"income\"\" from? (2) Realistic vs. Daydreaming--How big do any gains have to be and does that exist in the real world in a way that you can capture? In a nutshell, if my answer to the last question showed that it's crazy to invest and pay back out of your capital and income... since you're trying to keep your capital and only pay back with monthly gains, this one will require even higher and thus more unrealistic gains. The model you're implying: If that's what you mean with this model, (which I think you do), then here are my two very key questions again: How are you getting your monthly income? Financial investments (i.e. stocks or bonds) will have two components of value. One component of value is the stream of payments, such as a monthly dividend from stocks that pay those, or the interest payment from a bond. The other is the ability to resell a security to another investor, receiving back your capital. So... you either have to find Bonds//Dividend stocks that pay >52% returns tax-free each year, and pay this loan off with the payments. (Or higher returns to cover taxes, but these kinds of investments do not exist for you.) OR you can try to invest in something, pray that it goes up ≥4.323% per month and so that you can sell it, pay back your loan payment with the proceeds, and use the capital to buy your next investment... that will go up 4.323% per month, to turn and sell it again. The pros that do model this type of speculation go into much more depth than you are capable of. They build models that incorporate probabilities for rates of return based on historical data. They have better information, and have specialized in calculating this all out. They even have access to better investment opportunities (like pre-IPO Twitter or private notes). You just won't find the opportunities to make this happen, each month, for 24 months. (Again, you won't find them. They do not exist for you in as an investor in securities) Realistic vs. Daydreaming So... clearly I hope that by now I have convinced you that these would be the required returns. They simply aren't available to you. If they were, you would still run into obstacles with converting 'book' returns into physical money that you could repay the loans with, and then continuing that growth. And while I appreciate the notion that 'if I could just make the payments each month, I'd have $10,000 after 24 months!' I guarantee you that you'll be better off finding another way to target that same investment. Along the lines of what mhoran said, if you aim for a basic 401K or other similar investment account and target it into the S&P500, you might see returns of anywhere from -25% to +25% over the next 24 months... but if things went like they tend to average for the S&P500, it's more like ~7% annually. Check out a \"\"savings target calculator\"\" like this one from Bankrate.com and put in the numbers... if you can save about $390 a month you'll be at $10K in 24 months. It's not as fun as the other, but you can actually expect to achieve that. You will not find consistent >50% returns on your money annually.\"",
"title": ""
},
{
"docid": "996646b3a3c87bc269fd93c685c9e848",
"text": "You can earn significantly more than 0.99% in the stock market. I'd pay the $450/month and invest the rest in a (relatively conservative) stock market fund, making monthly withdrawals for the car note.",
"title": ""
},
{
"docid": "cae39c5b0872f5074bc5027490eb1da5",
"text": "Given that you are starting with a relatively small amount, you want a decent interest rate, and you want flexibility, I would consider fixed deposit laddering strategy. Let's say you have ₹15,000 to start with. Split this in to three components: Purchase all of the above at the same time. 30 days later, you will have the first FD mature. If you need this money, you use it. If you don't need it, purchase another 90-day fixed deposit. If you keep going this way, you will have a deposit mature every 30 days and can choose to use it or renew the fixed deposit. This strategy has some disadvantages to consider: As for interest rates, the length of the fixed deposit in positively related to the interest rate. If you want higher interest rates, elect for longer fixed deposit cycles.For instance, when you become more confident about your financial situation, replace the 30, 60, 90 day cycle with a 6, 12, 18 month cycle The cost of maintaining the short term deposit renewals and new purchases. If your bank does not allow such transactions through on line banking, you might spend more time than you like at a bank or on the phone with the bank You want a monthly dividend but this might not be the case with fixed deposits. It depends on your bank but I believe most Indian banks pay interest every three months",
"title": ""
},
{
"docid": "7c626a81745be5fed0815f903726cceb",
"text": "As mentioned in the other answer, you can't invest all of your money in one slightly risky place, and to receive a significant return on your investment, you must take on a reasonable amount of risk, and must manage that risk by diversifying your portfolio of investments. Unfortunately, answers to this question will be somewhat opinion and experience-based. I have two suggestions, however both involve risk, which you will likely experience in any situation. Peer to Peer Lending In my own situation, I've placed a large sum of money into peer-to-peer lending sites, such as LendingClub. LendingClub specifically advertises that 98% of its user base that invests in 100 notes or more of relatively equal size receive positive returns, and I'm sure you'll see similar statements in other similarly established vendors in this area. Historical averages in this industry can be between 5-7%, you may be able to perform above or below this average. The returns on peer to peer lending investments are paid out fairly frequently, as each loan you invest in on the site pays back into your account every time the recipient of the loan makes a payment. If you invest in small amounts / fractions of several hundred loans, you're receiving several small payments throughout the month on various dates. You can withdraw any money you have received back that hasn't been invested, or money you have in the account that hasn't been invested, at any time for personal spending. However, this involves various risks, which have to be considered (Such as someone you've loaned money to on the site defaulting). Rental Property / Property itself I'm also considering purchasing a very cheap home, and renting it out to tenants for passive income. This is something I would consider a possibility for you. On this front, you have the savings to do the same. It would be possible for you to afford the 20% downpayment on a very low cost home (Say, $100,000 or less up to $200,000 depending on your area), but you'd need to be able to pay for the monthly mortgage payment until you had a tenant, and would need to be able to afford any on-going maintenance, however ideally you'd factor that into the amount you charged tenants. You could very likely get a mortgage for a place, and have a tenant that pays you rent that exceeds the amount you pay for the mortgage and any maintenance costs, earning you a profit and therefore passive income. However, rental properties involve risks in that you might have trouble finding tenants or keeping tenants or keeping the property in good shape, and it's possible the property value could decrease. One could also generalize that property is a somewhat 'safe' investment, in that property values tend to increase over time, and while you may not significantly over-run inflation's increase, you may be able to get more value out of the property by renting it out in the mean time. Additional Note on Credit You mention you have a credit card payment that you're making, to build credit. I'd like to place here, for your reference, that you do not need to carry a balance to build credit. Having active accounts and ensuring you don't miss payments builds your history. To be more specific, your history is based off of many different aspects, such as: I'm sure I missed a couple of things on this front, you should be able to find this information with some research. Wanted to make sure you weren't carrying a balance simply due to the common myth that you must do so to build credit. Summary The items mentioned above are suggestions, but whatever you choose to invest in, you should carefully spread out / diversify your portfolio across a variety of different areas. It would not be advisable to stick to just one investment method (Say, either of the two above) and not also invest in stocks / bonds or other types of investments as well. You can certainly decide what percentage of your portfolio you want to invest in different areas (for instance X% of assets in Stocks/bonds, Y% in real-estate, etc), but it does make the most sense to not have all of your eggs in one basket.",
"title": ""
},
{
"docid": "147702b696d74f38ad96ef0b2785ada8",
"text": "Compound interest is your friend. For such a low amount of cash, just pop it into savings accounts or deposits. When you reach about 1.500€ buy one very defensive stock that pays high dividends. With deposits, you don't risk anything, with one stock, you can lose 100% of the investment. That's why it's important to buy defensive stock (food, pharma, ...). Every time you hit 1.500€ after, buy another stock until you have about 10 different stock in different sectors, in different countries. Then buy more stock of the ones you have in portfolio. You're own strategy is pretty good also.",
"title": ""
},
{
"docid": "308f51e6fffb971b0f16420cd23e042f",
"text": "For this scheme to work, you would require an investment with no chance of a loss. Money market accounts and short-term t-bills are about your only options. The other thing is that you will need to be very careful to never miss the payment date. One month's late charges will probably wipe out a few months' profit. The only other caveat, which I'm sure you've considered, is that having your credit maxed out will hurt your credit score.",
"title": ""
},
{
"docid": "ed0f6b8a67ef30833bad0c79d53fdb95",
"text": "If you need the money in the short-term, you want to invest in something fairly safe. These include saving accounts, CDs, and money market funds from someplace like Vanguard. The last two might give you a slightly better return than the local branch of a national bank.",
"title": ""
},
{
"docid": "ebffd8bf1e0ea4a10737467e7d7903a0",
"text": "A quick Excel calculation tells me that, if you are earning a guaranteed post-tax return of 12% in a liquid investment, then it doesn't matter which one you pick. According to the following Excel formula: You would be able to invest ₹2,124 now at 12% interest, and you could withdraw ₹100 every month for 24 months. Which means that the ₹100/month option and the ₹2100/biennium option are essentially the same. This, of course, is depending on that 12% guaranteed return. Where I come from, this type of investment is unheard of. If I was sure I'd still be using the same service two years from now, I would choose the biennial payment option. You asked in the comments how to change the formula to account for risk in the investment. Risk is a hard thing to quantify. However, if you are certain that you will be using this service in two years from now, you are essentially achieving 13% in a guaranteed return by pre-paying your fee. In my experience, a 13% guaranteed return is worth taking. Trying to achieve any more than that in an investment is simply a gamble. That having been said, at the amount we are talking about, each percent difference in return is only about ₹22. The biggest risk here is the fact that you might want to change services before your term is up. If these amounts are relatively small for you, then if there is any chance at all that you will want to drop the service before the 2 years is up, just pay the monthly fee.",
"title": ""
},
{
"docid": "830e7d4656847c4e1156d0bded526e60",
"text": "The classic answer is simple. Aim to build up a a financial cushion that is the equivalent of 3 times your monthly salary. This should be readily accessible and in cash, to cover any unforeseen expenses that you may incur (car needs repairing, washing machine breaks down etc). Once you have this in place its then time to think about longer term investments. Monthly 'drip feeding' into a mutual stock based investment fund is a good place to start. Pick a simple Index based or fund with a global investment bias and put in a set amount that you can regularly commit to each month. You can get way more complicated but for sheer simplicity and longer term returns, this is a simple way to build up some financial security and longer term investments.",
"title": ""
},
{
"docid": "c255f9fe7a02eec2d330e649199f09dc",
"text": "Unfortunately, in this market environment your goal is not very realistic. At the moment real interest rates are negative (and have been for some time). This means if you invest in something that will pay out for sure, you can expect to earn less than you lose through inflation. In other words, if you save your $50K, when you withdraw it in a few years you will be able to buy less with it then than you can now. You can invest in risky securities like stocks or mutual funds. These assets can easily generate 10% per year, but they can (and do) also generate negative returns. This means you can and likely will lose money after investing in them. There's an even better chance that you will make money, but that varies year by year. If you invest in something that expects to make 10% per year (meaning it makes that much on average), it will be extremely risky and many years it will lose money, perhaps a lot of it. That's the way risk is. Are you comfortable taking on large amounts of risk (good chances of losing a lot of your money)? You could make some kind of real investment. $50K is a little small to buy real estate, but you may be able to find something like real estate that can generate income, especially if you use it as a down payment to borrow from the bank. There is risk in being a landlord as well, of course, and a lot of work. But real investments like that are a reasonable alternative to financial markets for some people. Another possibility is to just keep it in your bank account or something else with no risk and take $5000 out per year. It will only last you 10 years that way, but if you are not too young, that will be a significant portion of your life. If you are young, you can work and add to it. Unfortunately, financial markets don't magically make people rich. If you make a lot of money in the market, it's because you took a risk and got lucky. If you make a comfortable amount with no risk, it means you invested in a market environment very different from what we see today. --------- EDIT ------------ To get an idea of what risk free investments (after inflation) earn per year at various horizons see this table at the treasury. At the time of this writing you would have to invest in a security with maturity almost 10 years in order to break even with inflation. Beating it by 10% or even 3% per year with minimal risk is a pipe dream.",
"title": ""
},
{
"docid": "b0bf094684108b390278880bd0c13916",
"text": "Short time horizon, small pot of money, and low appetite for risk? That smells like low return situation to me. I guess it depends on how low your appetite for risk is, though. You could open a brokerage account (free) and purchase $10K worth of a fully diversified ETF like VTI, optionally putting maybe 20% of it in a diversified bond ETF. I consider that a reasonably conservative investment, but if you are of the mindset that you cannot tolerate a drop in your wealth, it's not going to work. Plus if you don't have any other investments, this will be the thing that requires you to report capital gains to the IRS, and that paperwork is never fun. As an alternative, you have CD's, which will make you very little. Or a high-ish interest rate electronic savings account like Capital one 360 or Emigrant Direct (there are probably newer ones now that outcompete even these). Still, with anything in this paragraph you will be lucky to beat inflation. The real interest rate was negative last time I checked, so every risk-free investment will lose money in purchasing power terms. To beat inflation you will need to take on nonnegligible risk.",
"title": ""
},
{
"docid": "a1cc5f755bb2ca9c60b940fa0f0476c8",
"text": "The formula you're looking for is Thus, from 3% p.a. you get ca. 0.247% per month. However, as you see 0.25% is a good approximation (generally, small rates give good approximation).",
"title": ""
}
] |
fiqa
|
4cc848e96c9a8e604d7b1869d8128fbb
|
Dealing with Form 1099
|
[
{
"docid": "fde0a3995bf32d9d9647f1f627bac675",
"text": "Am I required to send form 1099 to non-US citizens who are not even residing in the US? Since they're not required to file US taxes, do I still have to send the form to them? That's tricky. You need to get W8/W9 from them, and act accordingly. You may need to withhold 30% (or different percentage, depending on tax treaty they claim on W8). If you withhold taxes, you also need to file form 1042. I suggest you talk to a tax professional. Is it fine to expose my ITIN (taxpayer identification number) to individuals or companies who I send the form to them. Since the form requires me to write my TIN/EIN, what would be the risks of this and what precautions should be taken to avoid inappropriate/illegal use? No, it is not OK. But if you pay these people directly - you don't have much choice, so deal with it. Get a good insurance for identity theft, and don't transact with people you don't trust. One alternative would be to pay through a payment processor (Paypal or credit cards) - see your next question. I send payments via PayPal and wire transfer. Should I send form 1099-MISC or 1099-K? Paypal is a corporation, so you don't need to send 1099 to Paypal. Whatever Paypal sends to others - it will issue the appropriate forms. Similarly if you use a credit card for payment. When you send money through Paypal - you don't send money directly to your business counterparts. You send money to Paypal.",
"title": ""
}
] |
[
{
"docid": "e60c76c4257a2b9514250cba964fb1e6",
"text": "I believe it's not only legal, but correct and required. A 1099 is how a business reports payments to others, and they're required by the IRS to send them for payments of $600 or more (for miscalleneous payments like this). The payment is an expense to the landlord and income to you, and the 1099 is how that's documented (although note that if they don't send you a 1099, it's still income to you and you still need to report it as such). It's similar to getting a 1099-INT for interest payments or a 1099-DIV for dividend payments. You'll get a 1099-MISC for a miscellaneous payment. If you were an employee they'd send you a W-2, not a 1099.",
"title": ""
},
{
"docid": "b21dfeda453e019b67382d2c7e496610",
"text": "You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.",
"title": ""
},
{
"docid": "28a548b853776d6e465185cd77a0edb2",
"text": "I'm not sure 1099-MISC is what you should expect. Equity means ownership, and in LLC context it means membership. As an LLC member, you'll get distributions and should receive a K-1 form for tax treatment, not 1099 or W2. If the CEO is talking about 1099 it means he's going to hire you as a contractor which contradicts the statement about equity allocation. That's an entirely different situation. 1) Specifically, would the 1099-MISC form be used in this case? 1099-MISC is used to describe various payments. Depending on which box is filled, the tax treatment may be as of employment income (subject to SE taxes) or passive income (royalties, rents, etc - subject to various limitations in the tax code). 3) If this is the only logical method of compensation (receiving a % of real estate sales), how would it be taxed? That would probably be a commission and taxed as employment income. I suggest to get a professional tax adviser consultation on this issue, with specific details, numbers, and kinds of deals involved. You can get gain or lose a lot of money just because you're characterized as a contractor and not LLC member or employee (each has its own benefits and disadvantages, and you have to consider them all). 4) Are there any advantages/disadvantages to acquiring and selling properties through the company as opposed to receiving a % of sales? Yes. There are advantages and there are disadvantages. For example, if you're using a corporation, you can get salary, if you're a contractor you cannot. There are a lot of issues hidden in this distinction (which I've just discussed with KeithS in this argument).",
"title": ""
},
{
"docid": "ae5066c9a5bc07ef196332219cdba89b",
"text": "\"I'm no lawyer and no expert, so take my remarks as entertainment only. Also see this question. If you have a U.S. SSN which is eligible for work, they may be able to pay you on 1099 basis with your SSN as a sole proprietor, unless they have some personal reason for avoiding that. So perhaps try asking about that specifically. HR policies can be weird and tricky, maybe a nudge in the right direction will help. Not What You Asked: regardless, I might recommend you register as an LLC and get an EIN (sort of SSN for companies) for a variety of reasons. It's called a \"\"limited liability\"\" company for a reason. You may also have an easier time reaping various business-related rewards, like writing off expenses. If you do so, consider a state with no income tax like Wyoming. (Or, for convenience sake, WA if you live in BC, or maybe NH if you live in Ontario.. etc.)\"",
"title": ""
},
{
"docid": "35f09e6454b7f5a6700a7e3e843615d0",
"text": "\"This is going to depend on the tax jurisdiction and I have no knowledge of the rules in Illinois. But I'd like to give you some direction about how to think about this. The biggest problem that you might hit is that if you collect a single check and then distribute to the tutors, you may be considered their employer. As an employer, you would be responsible for things like This is not meant as an exhaustive list. Even if not an employer, you are still paying them. You would be responsible for issuing 1099 forms to anyone who goes above $600 for the year (source). You would need to file for a taxpayer identification number for your organization, as it is acting as a business. You need to give this number to the school so that they can issue the correct form to you. You might have to register a \"\"Doing Business As\"\" name. It's conceivable that you could get away with having the school write the check to you as an individual. But if you do that, it will show up as income on your taxes and you will have to deduct payments to the other tutors. If the organization already has a separate tax identity, then you could use that. Note that the organization will be responsible for paying income tax. It should be able to deduct payments to the tutors as well as marketing expenses, etc. If the school will go for it, consider structuring things with a payment to your organization for your organization duties. Then you tell the school how much to pay each tutor. You would be responsible for giving the school the necessary information, like name, address, Social Security number, and cost (or possibly hours worked).\"",
"title": ""
},
{
"docid": "4c07eac84072af95d6ef2c086ba24bbf",
"text": "He has included this on Schedule D line 1a, but I don't see any details on the actual transaction. It is reported on form 8949. However, if it is fully reported in 1099-B (with cost basis), then you don't have to actually detail every position. Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. ... Again, it seems to be documented on Schedule D in boxes 1a and 8a. See above. I received a 1099-Q for a 529 distribution for a family member. It was used for qualified expenses, so should not be taxable. Then there's nothing to report. I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the penalties removed, with no documentation or explanation. IRS assesses the penalty. If you volunteer to pay the penalty, you can calculate it yourself and pay with the taxes due. Otherwise - leave it to the IRS to calculate and assess the penalty they deem right and send you a bill. You can then argue with the IRS about that assessment. Many times they don't even bother, if the amounts are small, so I'd suggest going with what the CPA did.",
"title": ""
},
{
"docid": "563440e7c3bd9c4100cc7605236340c8",
"text": "\"I agree that you should have received both a 1099 and a W2 from your employer. They may be reluctant to do that because some people believe that could trigger an IRS audit. The reason is that independent contractor vs employee is supposed to be defined by your job function, not by your choice. If you were a contractor and then switched to be an employee without changing your job description, then the IRS could claim that you should have always been an employee the entire time, and so should every one of the other contractors that work for that company with a similar job function. It's a hornet's nest that the employer may not want to poke. But that's not your problem; what should you do about it? When you say \"\"he added my Federal and FICA W/H together\"\", do you mean that total appears in box 4 of your 1099? If so, it sounds like the employer is expecting you to re-pay the employer portion of FICA. Can you ask them if they actually paid it? If they did, then I don't see them having a choice but to issue a W2, since the IRS would be expecting one. If they didn't pay your FICA, then the amount this will cost you is 7.65% of what would have been your W2 wages. IMHO it would be reasonable for you to request that they send you a check for that extra amount. Note: even though that amount will be less than $600 and you won't receive a 1099 in 2017 for it, legally you'll still have to pay tax on that amount so I think a good estimate would be to call it 10% instead. Depending on your personality and your relationship with the employer, if they choose not to \"\"make you whole\"\", you could threaten to fill out form SS-8. Additional Info: (Thank you Bobson for bringing this up.) The situation you find yourself in is similar to the concept of \"\"Contract-to-Hire\"\". You start off as a contractor, and later convert to an employee. In order to avoid issuing a 1099 and W2 to the same person in a single tax year, companies typically utilize one of the following strategies: Your particular situation is closest to situation 2, but the reverse. Instead of retroactively calling you a W2 employee the entire time, your employer is cheating and attempting to classify you as a 1099 contractor the entire time. This is frowned upon by the IRS, as well as the employee since as you discovered it costs you more money in the form of employer FICA. From your description it sounds like your employer was trying to do you a favor and didn't quite follow through with it. What they should have done was never switch you to W2 in the first place (if you really should have been a contractor), or they should have done the conversion properly without stringing you along.\"",
"title": ""
},
{
"docid": "b2888e6b976c393577d6885c6178a7e5",
"text": "\"This is why California tax code is even more messed up than the Federal - they take the Federal and then add some. Or remove. Or mix up. Whether your brokerage will send 1099 or not is up to the brokerage. Its a Federal requirement. California may require them to send it out for CA residents, or may not. They may adhere to the FTB, or may not. It doesn't matter to you. You'll have to keep track of the interest and dividends received, cost basis for the securities, etc etc., just as any other brokerage account. You cannot rely solely on the information on the 1099 anyway, since it doesn't include many things you have to take into account for your Federal tax return as well, wash sales (inter-brokerage) being the most obvious example. As to what happens when you're 65 - you'll have to keep track, again, of all the taxes paid, and track your California basis in the account, and your Federal basis in the account, and they will not be the same. Reconciliation time again when you get there. What a mess. If you move to another state - the taxes you paid to CA are \"\"lost\"\". Similarly, if you move in to California, all the gains prior to moving in are not taxed by California. Whatever happens after - is taxed by CA as if it was a regular investment account.\"",
"title": ""
},
{
"docid": "e65f6a428a57a6e3118afe397365a752",
"text": "There are two parts in this 1042-S form. The income/dividends go into the Canada T5 form. There will be credit if 1042-S has held money already, so use T2209 to report too.",
"title": ""
},
{
"docid": "6acdcec9f1eb7543119c5d823cba3ca6",
"text": "The likely outcome of adding extra money to your escrow account is that the bank will send you a check for excess funds at the end of the year (or whenever your property tax and insurance payments are processed). Could you just redeposit that money immediately? Possibly. I bet most banks wouldn't care and would just follow the routine of clearing the excess from the account next time they process payments. I've never received a 1099 for interest in an escrow account. It is possible that when you start earning enough interest that a 1099 is required by law ($10/year) that the bank gets a little more aggressive about pushing your money back to you. I'm not sure why that hassle is any better than just opening up your average internet savings account (many don't have any of the fees you mentioned) and parking it there with a similar interest rate. You can deposit and withdraw using ACH transactions that post by the next business day. That said, unless they do start rejecting your money, there aren't a lot of downsides in your plan.",
"title": ""
},
{
"docid": "0fb8ad9020bf14fbf901fe9c1f18a4c4",
"text": "\"If you receive a 1099-MISC from YouTube, that tells you what they stated to the IRS and leads into most tax preparation software guided interviews or wizards as a topic for you to enter. Whether or not you have a 1099-MISC, this discussion from the IRS is pertinent to your question. You could probably elect to report the income as a royalty on your copyrighted work of art on Schedule E, but see this note: \"\"In most cases you report royalties in Part I of Schedule E (Form 1040). However, if you ... are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).\"\" Whether reporting on Schedule E or C is more correct or better for your specific circumstances is beyond the advice you should take from strangers on the internet based on a general question - however, know that there are potentially several paths for you. Note that this is revenue from a business, so if you paid for equipment or services that are 100% dedicated to your YouTubing (PC, webcam, upgraded broadband, video editing software, vehicle miles to a shoot, props, etc.) then these are a combination of depreciable capital investments and expenses you can report against the income, reducing the taxes you may owe. If the equipment/services are used for business and personal use, there are further guidelines from the IRS as to estimating the split. These apply whether you report on Sch. E, Sch. C, or Sch C-EZ. Quote: \"\"Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.\"\"\"",
"title": ""
},
{
"docid": "2f09f6c30dc4b1608d046520b3289e5d",
"text": "Is it right that I request form W-9 or form W-8BEN (for non U.S. citizens) from the affiliate users before sending them payments? Not just OK. Required. I know that I have to send form 1099, but I don't know where does this form should go to. Should I send it to the IRS or the affiliate user or both? Both. There's also form 1096 that you need to send to the IRS. Read the instructions. Should I send form 1099 once a year or each time I make a payment to the affiliate? Once a year. Read the instructions. Do I have to send form 1099 when the money earned by the affiliate hit a certain threshold or I have to send it anyway? $600 or more requires the form, but you can send for any amount. Read the instructions. Is there any other forms or documents to request from or send to the affiliate user or the IRS? There may be additional forms. Especially if the recipient is a foreign person and you withhold taxes. Talk to your tax adviser.",
"title": ""
},
{
"docid": "64ff7d85368c789defd8b35ea3d24c03",
"text": "\"The contract he wants me to sign states I'll receive my monthly stipend (if that is the right word) as a 1099 contractor. The right word is guaranteed payment, which is what \"\"salary\"\" is called when a partner is working for a partnership she's a partner in. Which is exactly the case in your situation. 1099 is not the right form to report this, the partnership (LLC in your case) should be using the Schedule K-1 for that. I suggest you talk to a lawyer and a tax adviser (EA/CPA) who are licensed in your State, before you sign anything.\"",
"title": ""
},
{
"docid": "141cacd17d8b5d3bc1b174b087f8a5ab",
"text": "Depends whom the 1099 was issued to. If it was issued to your corporation - then its your corporation's income, not yours. Why would it go to your tax return? Your corporation and you are two separate legal entities. You will have to file the 1120S, whether you have corporate income or not, it has to be filed each year. So why make a mess of your reporting and not just report the corporation income on its return and your personal income on your own return? If you no longer use the corporation and all the 1099's are issued to you personally, then just dissolve it so that you won't have to file an empty 1120S every year and pay additional fees for maintaining it.",
"title": ""
},
{
"docid": "8c44c3df83ffe71f83ceaba813b6c91a",
"text": "\"Form W-9 (officially, the \"\"Request for Taxpayer Identification Number and Certification\"\") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). A W-9 is typically required when an individual is doing work, as a contractor or as an employee, for a company and will be paid more than $600 in a tax-year. The company is required to file a W-2 or a 1099 and so requests a W-9 to get the information necessary for those forms. I cannot say if it is incompetence on the part of the accounting department or a deliberate ploy to make the refund process more onerous, but do not comply. Politely nsist on a refund without any further information. If the company refuses, request a charge-back from the credit-card company, file a complaint with the consumer-protection department of the state where the company is located, and write a bad review on Yelp or wherever else seems appropriate.\"",
"title": ""
}
] |
fiqa
|
7f91019b65c0e96b08a639ee7f92843a
|
Scammer wants details and credentials for my empty & unused bank account. What could go wrong?
|
[
{
"docid": "81f83347d821102d5035f7095584ee80",
"text": "\"It's a scam. Here are the many signs: The bank will never ask for your password. They can access your account without it. The bank will never use a customer's account for their own business. They have their own accounts. \"\"Some guy\"\" is not a bank employee. Bank employees are people that you meet at the bank. Banks do not hand out thousands of dollars for free to customers, especially customers with nothing in their accounts. Even if you have no money in the account, this crook that you would give access to your account can do lots of illegal things in your name, such as writing bad checks, laundering money, running scams on other people through your account, etc. If you have already given your account info to this person, you need to go to the bank immediately and inform them. Since you have no money in the account, you should close it.\"",
"title": ""
},
{
"docid": "8b2fce403494839e5a6a21091e5ce0a7",
"text": "First off, do not ever tell someone your password. Nobody who actually works for the bank would need your password to access the account. Also, it may or may not be a scam (it almost assuredly is), but it is not a good idea to let someone use your bank account in your name. What if they use your account to launder money for illegal or terrorist activities? Then you would potentially face criminal charges. There is no way this story makes sense. A company would never put their payroll in some random stranger's account; they would create an account in the company's name for handling payroll and use that.",
"title": ""
}
] |
[
{
"docid": "56a97c40c97da11fcdc1e59da7c53531",
"text": "I'd imagine it is the same for an adult. The money probably gets withdrawn and that's it. However, if the scammer were to go to a branch in person, I'd imagine there would need to be some sort of photo identification to withdraw money. If it were online, then the scammer would also need the account holder's username and password. Either way, chances are that once the money is gone, it's gone - unless the scammer can be found. Even then, the scammer might not have that money anymore.",
"title": ""
},
{
"docid": "7d8c3204a89e6a3f58ca1a44074545ee",
"text": "Is there more information that I could review and become more knowledgeable about this type of scam? In response to this, anytime anyone ask you to send money, for a bank password, bank account numbers, etc... It is most likely a scam. For more education this search turned up an number of excellent resources.",
"title": ""
},
{
"docid": "80ff743892623ae50d1e5ca836fc4400",
"text": "\"She claimed that she makes money. When you wanted to make some too, she asked for your account credentials - which are only needed to take money away, never to give. The simplest explanation would be loan scam: Even if you have only $10 on your account, you can lose much more - the trick is that someone using your credentials can take an online loan in your name, and steal that money. If the scheme is long-running, she'll be taking new loans and using the money to pay back the earlier ones, building up credit history for her victims - only to allow taking even bigger loans. Her victims see the incoming transfers and are happy about the scheme \"\"working\"\". Until she decides that the pot is big enough to cash it in and disappear, leaving everyone deep in debt. Those who fell for this could be already defaulting loans they have no idea about and the loan companies have no way of notifying them, because she redirected the contact details. Never reveal your password. Nobody needs your password for any legitimate purpose.\"",
"title": ""
},
{
"docid": "05029c1f8bde1e97a823a000fdb5ecc8",
"text": "This is almost surely a scam. Among other things:",
"title": ""
},
{
"docid": "c6a286121301ab403c1d42fc914feb21",
"text": "Of course, it is a scam. Regardless of how the scam might work, you already know that the person on the other end is lying, and you also know that people in trouble don't contact perfect strangers out of the blue by e-mail for help, nor do they call up random phone numbers looking for help. Scammers prey on the gullibility, greed, and sometimes generosity of the victims. As to how this scam works, the money that the scammer would be depositing into your father's account is not real. However, it will take the bank a few days to figure that out. In the mean time, your father will be sending out real money back to the scammer. When the bank figures out what is going on, they will want your father to pay back this money.",
"title": ""
},
{
"docid": "57b3624471dc64a3d30fedfa0b56435f",
"text": "\"Coming from someone who has worked a in the account servicing department of an actual bank in the US, other answers are right, this is probably a scam, the phone number on the letter is probably ringing to a fraudulent call center (these are very well managed and sound professional), and you must independently locate and dial the true contact number to US Bank. NOW. Tell them what happened. Reporting is critical. Securing your money is critical. Every piece of information you provided \"\"the bank\"\" when you called needs to be changed or worked around. Account numbers, passwords, usernames, card numbers get changed. Tax ID numbers get de-prioritized as an authentication mechanism even if the government won't change them. The true bank probably won't transfer you to the branch. If the front-line call center says they will, ask the person on the phone what the branch can do that they cannot. Information is your friend. They will probably transfer you to a special department that handles these reports. Apparently Union Bank's call center transfers you to the branch then has the branch make this transfer. Maybe their front-line call center team is empowered to handle it like I was. Either way, plug your phone in; if the call takes less than 5 minutes they didn't actually do everything. 5 to 8 minutes per department is more likely, plus hold time. There's a lot of forms they're filling out. What if that office is closed because of time differences? Go online and ask for an ATM limit increase. Start doing cash advances at local banks if your card allows it. Just get that money out of that account before it's in a fraudsters account. Keep receipts, even if the machine declines the transaction. Either way, get cash on hand while you wait for a new debit card and checks for the new account you're going to open. What if this was fraud, you draw your US Bank account down to zero $800 at a time, and you don't close it or change passwords? Is it over? No. Then your account WILL get closed, and you will owe EVERYTHING that the fraudsters rack up (these charges can put your account terrifyingly far in the negative) from this point forward. This is called \"\"participation in a scam\"\" in your depository agreement, because you fell victim to it, didn't report, and the info used was voluntarily given. You will also lose any of your money that they spend. What if US Bank really is closing your account? Then they owe you every penny you had in it. (Minus any fees allowed in the depository agreement). This closure can happen several days after the date on the warning, so being able to withdraw doesn't mean you're safe. Banks usually ship an official check shipped to the last known address they had for you. Why would a bank within the United States close my account when it's not below the minimum balance? Probably because your non-resident alien registration from when you were in school has expired and federal law prohibits them from doing business with you now. These need renewed at least every three years. Renewing federally is not enough; the bank must be aware of the updated expiration date. How do I find out why my account is being closed? You ask the real US Bank. They might find that it's not being closed. Good news! Follow the scam reporting procedure, open a new account (with US Bank if you want, or elsewhere) and close the old one. If it IS being closed by the bank, they'll tell you why, and they'll tell you what your next options are. Ask what can be done. Other commenters are right that bitcoin activity may have flagged it. That activity might actually be against your depository agreement. Or it set off a detection system. Or many other reasons. The bank who services your account is the only place that knows for sure. If I offer them $500 per year will they likely keep the account opened? Otherwise I got to go to singapore open another account Legitimate financial institutions in the United States don't work this way. If there is a legal problem with your tax status in the US, money to the bank won't solve it. Let's call the folks you've talked to \"\"FraudBank\"\" and the real USBank \"\"RealBank,\"\" because until RealBank confirms, we have no reason to believe that the letter is real. FraudBank will ask for money. Don't give it. Don't give them any further information. Gather up as much information from them as possible instead. Where to send it, for example. Then report that to RealBank. RealBank won't have a way to charge $500/year to you only. If they offer a type of account to everyone that costs $500, ask for the \"\"Truth in Savings Act disclosures.\"\" Banks are legally required to provide these upon request. Then read them. Don't put or keep your money anywhere you don't understand.\"",
"title": ""
},
{
"docid": "75c4f6840c9c634feb441c398ad5ac39",
"text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam.",
"title": ""
},
{
"docid": "f5827ececad5a61f0f7966888a3a9d00",
"text": "\"You state \"\"Any info will be appreciated\"\", so here's some background information on my answer (you can skip to my answer): When I worked for banks, I was required to submit suspicious activity to the people above me by filling out a form with a customer's name, SSN, account number(s) and ID. You may hear in media that it is $10K or sometimes $5K. The truth is that it could be lower than that, depending on what the institution defines as suspicious. Every year we were required to take a \"\"course\"\" which implied that terrorists and criminals use cash regularly - whether we agree or disagree is irrelevant - this is what the course implied. It's important to understand that many people use cash-only budgets because it's easier than relying on the banking system which charges overdraft fees for going over, or in some cases, you pay more at merchants because of card usage (some merchants give discounts for cash). If someone has a budget of $10K a month and they choose to use cash, that's perfectly fine. Also, why is it anyone's business what someone does with their private property? This created an interesting contrast among differently aged Americans - older Americans saw the banking system as tyrannical busybodies whereas young Americans didn't care. This is part of why I eventually left the banking system; I felt sick that I had to report this information, but it's amazing how quick everyone is to accept the new rules. Notice how one of the comments asks you what you intend to do with the money, as if it's any of their business. Welcome to the New America©! My answer: If you withdraw $100,000, here is what will more than likely happen: Now, watch the anger at this answer because I'm telling you the truth. This article will explain why. Your very question had a negative 1, as if asking what you're asking is wrong (see the absurdity)! If Joseph Stalin ran for president in the United States, the majority of Americans would welcome him. You have good reason to be concerned; others at this site have noticed this as well.\"",
"title": ""
},
{
"docid": "69386b7437581a5abdd8645b54d608be",
"text": "\"What was the true reason they wanted to use my accounts for? We wouldn't know the true reason. The scammer can do multiple things. What exactly he would do in your case ... I am very eager to know what a person was up to who would give to me so much information about themselves. I know some of you will jump on the chance to yell \"\"it was not their true address\"\", but.... it is where they wanted me to send the cards to. And I was to give proof of my identification ie; a copy of my drivers license, my articles of incorporation and the real estate development project prospectus. Also they were only willing to work with certain banks ie; Citibank, Bank of America etc. I can not understand what they were doing wanting such access to accounts that had no money in them save the amount I used to open them with. It looks more like they would open accounts under your name, but they would be controlling the accounts. i.e. what goes in and out. i.e. they would be able to deposit and withdraw from a new account they set-up. They would want to use this account for illegal activities, so that if caught, the account opening paper trail leads to you. Even if they gave you an address, it could be rental. Like they have copies of your Company registration and ID proofs, they can use these to get another rental property ... and then send letters to some and ask them to met there.\"",
"title": ""
},
{
"docid": "0e961894f3c0026db5bef446d8368b31",
"text": "\"Definitely this. The fact that it's termed \"\"identity theft\"\" is a great PR spin for banks. Someone else is attempting transactions while fraudulently claiming to be you. You did not lose your identity or even a piece of it. You are still fully you. You are not even involved in the fraudulent transaction! It's a transaction between the bank and the fraudster, and the bank has agreed to some action you did not authorize. They should be responsible for cleanup.\"",
"title": ""
},
{
"docid": "7aaf70524fa96219a7e613e2ad496396",
"text": "Someone online asking for your bank account info never has your best interests at heart. They can send you a check and while it may take a while to really clear, they can't use it to suck money out of your account. Be very cautious.",
"title": ""
},
{
"docid": "0572d8145317a4ad82e1ea9467de9d01",
"text": "I have prepared a report on scam's like this. I'd be happy to deliver a copy of the report to your home. Just give me your address and mail me the keys to your house and I'll drop by and leave it in your home. Oh, and tell me a time when you won't be home, so I won't bother you when I come by. It might also be helpful if you tell me if you have any cash, jewelry, or other valuables in the house and where you keep them, so I can give you advice on security measures. :-)",
"title": ""
},
{
"docid": "2a0262bed023fcc3be14a38a1572465b",
"text": "I wonder if your rational thinking is getting confused by the prospects of getting some deposit from that person? He needs, amongst other things : •online access username •online access password Ok, so you have 1000 in your account. They deposit 500 and you are happy. Then they take out all 1500 and you're done :) How can you not think it is a scam when you're giving them your login as well. Here is an analogy. Some stranger asks you for keys of your home (while you're away) and tells you he will just go in place a gift inside your door and go away. Would you give him your keys and come home later expecting a gift to be there and nothing taken away? Is it a scam if the person only wants to deposit into my account, not make a withdrawal? Who is to tell? P.S: Sorry, please don't mind the rest of this answer but from it could also be related to a new relationship that you are in. Going ahead with this might cause you a lot of emotional harm as well. You seemingly trust that person when there are obvious signs that you are being defrauded, possibly in the name of love.",
"title": ""
},
{
"docid": "af187814bd6060f3c39ca5ee90a05872",
"text": "I would have asked for the intended recipient's account number and pursue sending the money there. If it's the same as yours (except for one digit) that would be a good sign. But even here, the crook could send money to dozens of different accounts, all off by one digit, just to make it look authentic. I'm going with scam just to be safe. As for the checksum, it's used on paper checks (next to the last digit) but not necessarily the actual account. Credit card accounts use an algorithm, but online tools create as many legitimate character strings as you want. I used to work at a credit union, and when the time was just right, I opened account number 860000 (actual account number except for the second digit). All their account numbers were sequential, so the oldest account number was 000001. Sadly, many important systems are set up to meet the simple needs of the masses, and are easy to beat if you really want to. Check out If you dare hackers to hack you, they'll hack you good.",
"title": ""
},
{
"docid": "4b55176dac61778d9cd64bdc1444526d",
"text": "\"Accept that the money's gone. It could, as others have mentioned, been a lot more. Learn. Make sure your son (and you!) have learned the lesson (at least try to get something out of the $650). The world isn't always a nice place unfortunately. Don't wire money to strangers - use an escrow service or paypal or similar. As the saying goes: \"\"Fool me once, shame on you. Fool me twice, shame on me\"\". Report it to the authorities. Does have the advantage of the domestic rather than foreign bank account used. The scammer might have closed it by now, but there should be some paper tail. I imagine the id required for opening a bank account in the US is as strict as it is most places these days. They may have used fake Id, but that's not your problem. Assuming contact was made over the internet, bearing in mind IANAL (or American), this could be a crime of Wire Fraud, in which case I believe it's a case for the FBI rather than your local police. The phone calls your son is still receiving could also be construed as attempted extortion and if across state lines could also come under federal jurisdiction. The FBI have a better chance of catching such a scammer, generally having more chance of knowing one end of a computer from the other compared to a local beat cop. If other victims have also contacted the authorities, it will probably be taken more seriously. Give as much information as you can. Not just the bank account details, but all communication, exact time of phone calls, etc. The cops may say there's nothing they can do as it's a civil matter (breach of contract) rather than a criminal one. In which case you have the (probably expensive) option of going the civil route as described by Harper above. Inform Others. Assuming initial contact with the scammer was made through a website or forum or similar. I imagine this must be a niche area for hand made toys. Post your experience to warn other potential victims. Inform the site owner - they may ban the scammers account where applicable. Stop the calls. Block the number. If the number's being withheld, contact the provider - they should have a policy regarding harassment and be able to block it their end. If the calls keep coming, your son will need to change his number. Don’t let it get to you. You may have warm cosy fantasies of removing the guys kneecaps with a 2x4. Don't however dwell on the b*stard for too long and let it get under your skin. You will have to let it go.\"",
"title": ""
}
] |
fiqa
|
94ce6b6f78121d2ec850251b4edb4ba7
|
Why is mortgage interest deductible in the USA for a house you live in?
|
[
{
"docid": "e455222cedee7f24e59d68d9049ccffe",
"text": "\"Taxes are a tool for achieving social policy goals. While Americans consider \"\"Socialism\"\" to be a curse, the US is in fact quite socialistic. Mostly towards corporations, but sometimes even the normal people, not only the \"\"Corporation are people, my friend\"\" (M. Romney) get some discounts. The tax deduction on mortgage interest comes as a tool to encourage Americans to own their homes. It is important, socially, for people to own their home to be independent, and in general contributes to the stability of the society. As anything, when taken to the extreme, it in fact achieves exactly the opposite, as we've seen in 2008, but when balanced - works well. Capital gain is taxed in the US, because it is income. Generally, any income is taxed. However, gain sourced from the sale of primary residence is excluded, up to a certain (quite large) amount from this tax (if lived in the residence long enough - 3 of the last 5 years prior to sale). This, again, to encourage Americans to upgrade their houses and make it easier for Americans to relocate when needed (sell one house and buy another without losing cash on taxes). As to \"\"asset producing income\"\" - that is true in the US as well. You cannot deduct your personal expenses, in general. Mortgage interest on primary residence is a notable exception, because it serves a social cause. Similarly, medical expenses are allowed as a deduction, if they're above certain limit, and many other things (for example - if a US person totals his car, and insurance doesn't cover the loss - it is tax deductible, above certain limit, the higher the income - the higher the limit). These are purely social policy breaks. Socialism, something Americans like to have, and love to hate. Many \"\"anti-socialists\"\" in the US are in fact taking advantage of these specific tax breaks the most, because for rich folks these are limited or non-existent (mortgage interest limited up to 1 million, medical expenses are allowed only above certain percentage of income, etc).\"",
"title": ""
},
{
"docid": "17f8516f000d1729439b198cb3efd5b2",
"text": "Well quite a few countires have tax breaks on the first house you own ... this is typically to promote people to have atleast one house of their own ... having a house of your own provides lot more stability in the long run ... and without tax breaks it makes it difficult for quite a few to own a house ... the tax breaks form a motiviation as well ... There are at times other effects of this breaks, people buying houses beyond their need [bigger house than required] or capacity [buying in a central / expensive location] by maximizing the breaks ...",
"title": ""
},
{
"docid": "5ab9ec506a5f932ec017e0159438bc1b",
"text": "It's a scam pushed through to benefit the banking system. Tax payments become income for the banks. Any alleged benefits for property holders are ultimately reduced by increased property prices, capital gains tax and estate taxes",
"title": ""
}
] |
[
{
"docid": "90b272b16d3db982961db359ed6ecedc",
"text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.",
"title": ""
},
{
"docid": "a585bc5550f3a83edfd17539631bc401",
"text": "\"As @BrenBarn points out, when people say \"\"they like having a mortgage because they get the benefit of writing off the interest\"\" they typically mean as opposed to renting. You can deduct interest and real estate (property) tax payments, as well as some closing costs in the year you purchase the home. You are also building equity (instead of helping your landlord build his or her equity). Take for example a single person paying $1,000/month to rent an apartment. This is not deductible. He has $1,800 a year in other expenditures that would otherwise be deductible (charitable contributions, etc.), but he doesn't itemize because it isn't more than the $6,100 standard deduction, so it doesn't matter. He takes out a mortgage for $150,000 at 6% over a 30-year term to buy a similarly-appointed home. His new mortgage payment is about $900/month, plus he puts $100/month into an escrow account for property taxes, roughly totaling his former rent payment. Over the first full year, he pays about $9,000 in deductible mortgage interest and $1,200 in deductible real estate taxes. And because he is now itemizing, he can also write off the aforementioned $1,800. At a top marginal tax rate of 25%, he shaved nearly $1,500 (.25 * (9000 + 1200 + 1800 - 6100)) off his federal income tax bill -- with the same living expenses! This is a simple example with some arbitrary numbers to prove the point, and there are a lot of other pros and cons to buying vs. renting. But again, this is probably what they mean when you hear this. Others have covered the overpaying angle, and there are a bunch of other Money.SE posts on the same or similar subjects.\"",
"title": ""
},
{
"docid": "ba759133d90688f4ee7fd1d2563192e1",
"text": "how much taxes would I pay on my income from the rent they would pay me? The same as on any other income. California doesn't have any special taxes for rental/passive income. Bothe CA and the Federal tax laws do have special treatment, but it is for losses from rental. Income is considered unearned regular income and is taxed at regular brackets. Would I be able to deduct the cost of the mortgage from the rental income? The cost of mortgage, yes. I.e.: the interest you pay. Similarly you can deduct any other expense needed to maintain the property. This is assuming you're renting it out at FMV. If not, would I pay the ordinary income tax on that income? In particular, would I pay CA income tax on it, even though the property would be in WA? Yes. Don't know how WA taxes rental income, but since you are a California tax resident - you will definitely be taxed by California on this, as part of your worldwide income.",
"title": ""
},
{
"docid": "6470741c89540d9d5adea1af37740f9b",
"text": "\"I don't follow the numbers in your example, but the fundamental question you're asking is, \"\"If I can borrow money for a low cost, and if I think I can invest it and receive returns greater than that cost, should I do it?\"\" It doesn't matter where that money comes from, a mortgage that's bigger than it needs to be, a credit card teaser rate, or a margin line from your stock broker. The answer is \"\"maybe\"\" - depending on the certainty you have about the returns you'd receive on your investments and your tolerance for risk. Only you can answer that question for yourself. If you make less than your mortgage rates on the investments, you'll wish you hadn't! As an aside, I don't know anything about Belgian tax law, but in US tax law, your deductions can be limited to the actual value of the home. Your law may be similar and thus increase the effective mortgage interest rate.\"",
"title": ""
},
{
"docid": "593cbd452c7286b4358b8973a7511d16",
"text": "\"First off, the \"\"mortgage interest is tax deductible\"\" argument is a red herring. What \"\"tax deductible\"\" sounds like it means is \"\"if I pay $100 on X, I can pay $100 less on my taxes\"\". If that were true, you're still not saving any money overall, so it doesn't help you any in the immediate term, and it's actually a bad idea long-term because that mortgage interest compounds, but you don't pay compound interest on taxes. But that's not what it actually means. What it actually means is that you can deduct some percentage of that $100, (usually not all of it,) from your gross income, (not from the final amount of tax you pay,) which reduces your top-line \"\"income subject to taxation.\"\" Unless you're just barely over the line of a tax bracket, spending money on something \"\"tax deductible\"\" is rarely a net gain. Having gotten that out of the way, pay down the mortgage first. It's a very simple matter of numbers: Anything you pay on a long-term debt is money you would have paid anyway, but it eliminates interest on that payment (and all compoundings thereof) from the equation for the entire duration of the loan. So--ignoring for the moment the possibility of extreme situations like default and bank failure--you can consider it to be essentially a guaranteed, risk-free investment that will pay you dividends equal to the rate of interest on the loan, for the entire duration of the loan. The mortgage is 3.9%, presumably for 30 years. The car loan is 1.9% for a lot less than that. Not sure how long; let's just pull a number out of a hat and say \"\"5 years.\"\" If you were given the option to invest at a guaranteed 3.9% for 30 years, or a guaranteed 1.9% for 5 years, which would you choose? It's a no-brainer when you look at it that way.\"",
"title": ""
},
{
"docid": "992674f8684d5708dcff9648a574e10e",
"text": "I think sometimes this is simply ignorance. If my marginal tax rate is 25%, then I can either pay tax deductible interest of $10K or pay income tax of $2.5K. I think most americans don't realize that paying $10K of tax deductible interest (think mortgage) only saves them $2.5K in taxes. In other words, I'd be $7.5K ahead if I didn't have the debt, but did pay higher taxes.",
"title": ""
},
{
"docid": "ea3ea3129f15b84ea28c22db042b4d55",
"text": "\"It very much comes down to question of semantics and your particular situation. Some people do not view a house (and most upgrades) as an investment, but rather an expense. I certainly agree that this is probably the case if you pay someone else to make the repairs and upgrades. However, if you are a serious DIYer, that may not be the case. Of course, if the house is a money pit and/or you were unfortunate to buy when prices where ridiculously high, you'll have a hard time making any money on this \"\"investment.\"\" To continue this game of semantics, you may also consider the value you extract from your home while you are living in it. On to the mortgage itself. Chances are that it is a long term, relatively low rate loan and that the interest is deductible. So, there are some disadvantages to paying it down early, even without early payment penalties. Paying down early on the principal is a disadvantage from a tax perspective. How much of a disadvantage hinges on the rate. Now, a debt is a liability on your personal balance sheet. It drags down any returns you may have from investing. However, a home lone is not generally subject to the cardinal rule of paying off your high interest debt before investing. It should not be relatively high and it pays for something necessary. It may be that any credit card debt you have may have paid for something considered necessary. However, with the relatively high interest rates, you have to question just how necessary any credit card debt really is. Not to mention that there is no tax advantage. So, it comes down to the fact that a home loan should be relatively low interest, paying for something you must have and that you hopefully have some tax advantage from the interest you pay on it.\"",
"title": ""
},
{
"docid": "f1877663f1e751238a9a0105861d6747",
"text": "\"Have you ever tried adding up all your mortgage payments over the years? That sum, plus all the money that you put as a down payment (including various fees paid at closing) plus all the repair and maintenance work etc) is the amount that you have \"\"invested\"\" in your house. (Yes, you can account for mortgage interest deductions if you like to lower the total a bit). Do you still feel that you made a good \"\"investment\"\"?\"",
"title": ""
},
{
"docid": "127853d48965a4dfdfc80c462e62052c",
"text": "Some of the other answers mention this, but I want to highlight it with a personal anecdote. I have a property in a mid-sized college town in the US. Its current worth about what we paid for it 9 years ago. But I don't care at all because I will likely never sell it. That house is worth about $110,000 but rents for $1500 per month. It is a good investment. If you take rental income and the increase in equity from paying down the mortgage (subtracting maintenance) the return on the down payment is very good. I haven't mentioned the paper losses involved in depreciation as that's fairly US specific: the laws are different in other jurisdictions but for at least the first two years we showed losses while making money. So there are tax advantages as well (at least currently, those laws also change over time). There is a large difference between investing in a property for appreciation and investing for income. Even in those categories there are niches that can vary widely: commercial vs residential, trendy, vacation/tourist areas, etc. Each has their place, but ensure that you don't confuse a truism meant for one type of real estate investing as being applicable to real estate investing in general.",
"title": ""
},
{
"docid": "2ce7e28b25577b3d9f1a49cc54eb5a84",
"text": "Think about how loans work for you personally. When you charge a $50 dinner for two to your Visa card, you did not earn $50 in income. You did not pay income tax on that $50. The money you use to pay back that $50 at the end of the month is not tax deductible. Interest on a loan is a business expense. Repayment of principal is not a business expense, just as receiving the loan in the first place is not business income. Effectively this means the LLC repays the loan with after-tax dollars. Just like you do with your Visa card. When I do corporate accounting, payment of loan interest shows up on the expense side of the Profit/Loss statement, and it makes the Balance Sheet net assets go down. However payment of loan principal is effectively null. It doesn't appear on the Profit/Loss at all -- and it's a wash on the Balance Sheet, as both Assets and Liabilities fall by the same amount.",
"title": ""
},
{
"docid": "2b325654181d951f0e841dc9a11bba72",
"text": "Should I treat this house as a second home or a rental property on my 2015 taxes? If it was not rented out or available for rent then you could treat it as your second home. But if it was available for rent (i.e.: you started advertising, you hired a property manager, or made any other step towards renting it out), but you just didn't happen to find a tenant yet - then you cannot. So it depends on the facts and circumstances. I've read that if I treat this house as a rental property, then the renovation cost is a capital expenditure that I can claim on my taxes by depreciating it over 28 years. That is correct. 27.5 years, to be exact. I've also read that if I treat this house as a personal second home, then I cannot do that because the renovation costs are considered non-deductible personal expenses. That is not correct. In fact, in both cases the treatment is the same. Renovation costs are added to your basis. In case of rental, you get to depreciate the house. Since renovations are considered part of the house, you get to depreciate them too. In case of a personal use property, you cannot depreciate. But the renovation costs still get added to the basis. These are not expenses. But does mortgage interest get deducted against my total income or only my rental income? If it is a personal use second home - you get to deduct the mortgage interest up to a limit on your Schedule A. Depending on your other deductions, you may or may not have a tax benefit. If it is a rental - the interest is deducted from the rental income only on your Schedule E. However, there's no limit (although some may be deferred if the deduction is more than the income) if you're renting at fair market value. Any guidance would be much appreciated! Here's the guidance: if it is a rental - treat it as a rental. Otherwise - don't.",
"title": ""
},
{
"docid": "955e9a7695c899ea8a9d862c9010fb52",
"text": "\"This change doesn't make a ton of sense to me. Interest is an expense. Expenses are deductible. Yes, there are loopholes, but no matter what happens there will be loopholes. Seems like any easy \"\"no\"\" vote. Sometimes it worries me that we have financially incompetent people in power.\"",
"title": ""
},
{
"docid": "252746493a0e4309e5f8a4c89e7e6467",
"text": "I'll preface this with saying that I'm not a finance or real estate professional, this is just how I understand the situation and what I'm doing: We just got a 30year/FHA mortgage, there's no prepayment penalty, and no fees associated with paying it biweekly. In fact (Wells Fargo), while the payments get withdrawn biweekly, they don't actually post to the mortgage until there's enough for a full payment. So essentially here are the benefits I'm realizing:",
"title": ""
},
{
"docid": "1cc573e29b794b2fb46d931192a4dacb",
"text": "It's rare that you'd start to itemize before you have a house and the property tax and mortgage interest that brings. If your state has an income tax, that's first, but then you'll usually need far more in deductions to be over that standard deduction.",
"title": ""
},
{
"docid": "bbca7b934fbe5d2da0b11f7e2c079e46",
"text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible.",
"title": ""
}
] |
fiqa
|
a4d9dc17ea8d97d4bce390f0958b6193
|
Chase bank not breaking large bills for non-account holders
|
[
{
"docid": "0ce94616048ba8e4f72ff234d512442d",
"text": "Yes it is (legal). There is of course no law requiring any business you walk in to break your money. What made you think there would be? Being a bank in the US (and in other countries) has some legal consequences, but none of them relates to 'having to do business with anyone that walks in', neither 'having to break bills for people' (not even for established customers). Yes, it was historically commonplace for most banks to do all money-breaking for free, but that does not establish any obligation to do it. Maybe the FED is required to do that, but that won't help you if you don't live near either.",
"title": ""
},
{
"docid": "a603e76dd7cf5e499482b89caca47328",
"text": "First, they don't have an obligation to provide a service for a non-customer. In theory, the could even refuse this service to account holders if that was their business model, although in practice that would almost surely be too large of a turn-off to be commercially feasible. Non-account holders aren't paying fees or providing capital to the bank, so the bank really has no incentive or obligation to tie up tellers serving them. Maybe as importantly, they have a legitimate business reason in this case as stated. The fact that the bill passed whatever test the teller did does not, of course, ensure that the bill is real. They may (or may not) subject it to additional tests later that might be more conclusive. Making you have an account helps ensure that, in the event they do test it and it fails, that (a) they know who you are in case the Secret Service wants to find you, and (b) they can recover their losses by debiting your account by the $100. This isn't foolproof since any number of bad things could still happen (identity theft, closing account before they do additional tests, bill passing later tests, etc.), but it does give them some measure of protection.",
"title": ""
}
] |
[
{
"docid": "21b062d16f2e9c72df2ccfabc082597d",
"text": "“Chase’s tellers do not have the authority to close an account…” That’s a “truthy” bit of bullshit. Yes, a teller themselves do not have the authority to close an account. But if you are the owner of the account and you state to the teller that you would like to withdraw all of your money into a cashier’s check so as to close the account they cannot refuse you. Since they fed you this nonsense, they might play some delaying tactics like calling a manager and having them talk to you tough the window and such. But just stand your ground and state you would like to close the account and withdraw all funds. Now if they were extra slimy and if you were to withdraw all funds but they let the zero balance float for a bit so they could claim a fee on you, bullshit once again. You should take any notice of fees coupled with a dated receipt showing the date you withdrew funds, go to the branch and complain to the manager right away. State clearly you will not pay any fees and you would like written verification that your account is closed. Also—and this goes without saying and is implied above—but be sure to keep copies of all if your receipts and transactions. If they state they want to hold onto something, demand they make a copy. And for your own safety/sanity keep your own backup copies somewhere safe at home. All of that said, I have seen modern consumer bankers really act like a bunch of slimeballs in the past decade or so, but generally this has still been an exception to the rule. The reality is if you do not want to have your money in their bank it’s in their best interest to let go of you as soon as possible; especially if you have a small amount of money such as $1,500 at stake. Remember your rights as a consumer, remember it’s your money and remember—and remind them—that you can report them if they deny you reasonable access to your funds.",
"title": ""
},
{
"docid": "46275c177deeb601b7d56a1afda66b34",
"text": "\"This is based on my experience with Chase and may not be applicable to other banks. As you mentioned Chase as one of the banks you do business with hopefully this will be helpful to you. The money does come out of your account immediately. If the check isn't cashed in a certain amount of time, the check expires and you get the money credited back to your account. Once you have made a bill payment online you can check on the status of your check by looking at your payment activity, finding the payment in question, and following the \"\"proof of payment\"\" link. There is will provide you with information on your payment which you can submit to your payee to prove when you submitted the payment, and which they can use to verify with the bank that you really did send the payment as you claimed. Once the check is cashed, this page will also contain images of the front and back of the cashed check, so you can prove that the recipient really did cash it. You can see from this info that the check is being funded from a different account number than your own, which is good for security purposes since (per Knuth, 2008) giving someone else your bank routing number and account number as found on your personal checks basically provides them with all they need to (fraudulently, of course) clean out your account.\"",
"title": ""
},
{
"docid": "31c281eb2eb9a00f332080b149465ff9",
"text": "Years ago, I had a tenant who bounced a check now and then. I started going to the bank where his account was. With my ID they were agreeable to cashing the check against his account. The teller first checked his balance and only cashed when there were enough funds. One time he was $10 short. I wrote a deposit slip and added the $10 it took to clear the check. As they say, your mileage may vary, I hear some banks won't even break a large bill for a non customer.",
"title": ""
},
{
"docid": "134b420c0ccd71d39a83ebe4b8800232",
"text": "CUs are now starting to adopt some of the bank's tricks, like using a longer float during online bill paying and for outside transfers. Also for overdrafts they are now starting to kick into fees or automatic loans rather than transferring money from your savings account. I've been a member for decades and my CUs weren't doing this previously.",
"title": ""
},
{
"docid": "d9363e182020d78bdc5050c5969a94da",
"text": "\"The balance sheet for a bank is the list of assets and liabilities that the bank directly is responsible for. This would be things like loans the bank issues and accounts with the bank. Banks can make both \"\"balance sheet\"\" loans, meaning a loan that says on the balance sheet - one the bank gains the profits from but holds the risks for also. They can also make \"\"off balance sheet\"\" loans, meaning they securitize the loan (sell it off, such as the mortgage backed securities). Most major banks, i.e. Chase, Citibank, etc., could be called \"\"balance sheet\"\" banks because at least some portion of their lending comes from their balance sheet. Not 100% by any means, they participate in the security swaps extensively just like everyone does, but they do at least some normal, boring lending just as you would explain a bank to a five year old. Bank takes in deposits from account holders, loans that money out to people who want to buy homes or start businesses. However, some (particularly smaller) firms don't work this way - they don't take responsibility for the money or the loans. They instead \"\"manage assets\"\" or some similar term. I think of it like the difference between Wal-Mart and a consignment store. Wal-Mart buys things from its distributors, and sells them, taking the risk (of the item not selling) and the reward (of the profit from selling) to itself. On the other hand, a consignment store takes on neither: it takes a flat fee to host your items in its store, but takes no risk (you own the items) nor the majority of the profit. In this case, Mischler Financial Group is not a bank per se - they don't have accounts; they manage funds, instead. Note the following statement on their Services page for example: Mischler Financial Group holds no risk positions and no unwanted inventory of securities, which preserves the integrity of our capital and assures our clients that we will be able to obtain bids and offers for them regardless of adverse market conditions. They're not taking your money and then making their own investments; they're advising you how to invest your money, or they're helping do it for you, but it's your money going out and your risk (and reward).\"",
"title": ""
},
{
"docid": "15a2c99870047a0f0da6754e8d2abb9e",
"text": "Hence why I pay bill by bill and don't authorize automatic withdrawals. Are you telling me your online banking and/or utility company don't allow you to make non automatic payments online? If so I guess thats the answer to OP's question...",
"title": ""
},
{
"docid": "3bf1cfcfad220756d3e5d8255f98729a",
"text": "I actually did this once. I wrote a large check along with a letter indicating that I would not be around to receive the next bill so I was prepaying. Not only did they credit the entire check, they didn't send that bill and listed the charges on the next month's bill. They must have done that by hand because there's no way the machines would have understood.",
"title": ""
},
{
"docid": "4ba84bfbdd386cc7be5016258b24fb99",
"text": "If this matters to you a lot, I agree you should leave. My primary bank account raised chequing account and transaction fees. I left. When I was closing my account the teller asked for the reason (they needed to fill out a form) and I explained it was the monthly fees. Eventually, if a bank gets enough of these, they will change. I want to get back those features for the same price it cost when I opened it They are in their rights to cancel features or raise prices. Just as you are in your rights to withdraw if they don't give you a deal. The reason why I mention this is that this approach is comical in some instances. A grocery store may raise the price of carrots. Typically you either deal with it or change stores. Prices rise occasionally. thus they will lose a lot of money from my savings From my understanding, a bank makes a large chunk of their money from fees. Very little is from the floating kitty they can have because of your savings. If you have an investment account with your bank (not recommended) or your mortgage, that would matter more. I've had friends who have left banks (and moved their mortgages) because of the bank not giving them a better rate. Does the manager have any pressure into keeping the account to the point of giving away free products to keep the costumer or they don't really care? Depends. I've probably say no. One data point is an anecdote; it is expected in a client base of thousands that a few will leave for seemingly random reasons. Only if mass amounts of clients leave or complain will the manager or company care. A note: some banks waive monthly account or service fees if you keep a minimal account balance. I have one friend who keeps X thousand in his bank account to save the account fee; he budgets a month ahead of time and savings account rates are 0% so this costs him nothing.",
"title": ""
},
{
"docid": "3a75aef42b2ea095ab21acbd518c1c4f",
"text": "Under US law, if you clearly have more than half of a torn bill it is worth its full value; the smaller piece is worth nothing... except that having both halves makes the banking system much happier, since it prevents some particularly stupid counterfeiting attempts. So this proposal wouldn't be cheat-proof unless the cut is close enough to the middle to make determining 51% difficult. And I'd like to see you try to explain to a bank how so many bills were cut in half... (This is more normally an issue when money has been damaged unintentionally, of course.)",
"title": ""
},
{
"docid": "9360a09b48fb5e4b4b472181e1ac48b7",
"text": "Also people don't disable overdraft. Or after they get hit with the fee, they don't change their behavior. Although that being said, I never balance my checkbook. But then again I never use debit cards and I usually only ever have 1 check outstanding at a time.",
"title": ""
},
{
"docid": "7ab44daae0a20d8f51345d8f5557b1fd",
"text": "I'd like to take a moment to point out: I cannot find a bank that charges customers with a checking account fees for withdrawing from an atm owned by that same bank. It is a cornerstone of most banks now to encourage online and atm banking. You should definitely research the validity of the claim that you're associate cannot withdraw from their own account through their own bank's atm without fees. A second scenario I can think of, is that this person uses a bank that does not operate in your region. Then they cannot find an atm owned by their bank. If this is the case, they should simply go to the bank the check is drawn on, and cash it there. So far I only know of Chase bank charging non-Chase customers to cash a check drawn on a Chase account (this is a crap policy that makes me hate that bank). **disclaimer - I am not familiar with all banks, but a quick Google search of banks that operate in your region should reveal which ones if any charge their customers for use of their atms. you may or may not find the check cashing charge policy without attempting to cash the check.",
"title": ""
},
{
"docid": "43cc3e1388828369619c2a9314438375",
"text": "Savings accounts have limitations in case a bank goes belly up and you have a higher amount in the account (more than the insured amount). Mostly big corporations or pension funds cannot rely on a bank to secure their cash but a government bond is secured (with some fine print) and hence they are willing to take negative interest rates.",
"title": ""
},
{
"docid": "254b29225b915be822ea4a883a43a442",
"text": "\"There are, in fact, two balances kept for your account by most banks that have to comply with common convenience banking laws. The first is your actual balance; it is simply the sum total of all deposits and withdrawals that have cleared the account; that is, both your bank and the bank from which the deposit came or to which the payment will go have exchanged necessary proof of authorization from the payor, and have confirmed with each other that the money has actually been debited from the account of the payor, transferred between the banks and credited to the account of the payee. The second balance is the \"\"available balance\"\". This is the actual balance, plus any amount that the bank is \"\"floating\"\" you while a deposit clears, minus any amount that the bank has received notice of that you may have just authorized, but for which either full proof of authorization or the definite amount (or both) have not been confirmed. This is what's happening here. Your bank received notice that you intended to pay the train company $X. They put an \"\"authorization hold\"\" on that $X, deducting it from your available balance but not your actual balance. The bank then, for whatever reason, declined to process the actual transaction (insufficient funds, suspicion of theft/fraud), but kept the hold in place in case the transaction was re-attempted. Holds for debit purchases usually expire between 1 and 5 days after being placed if the hold is not subsequently \"\"settled\"\" by the merchant providing definite proof of amount and authorization before that time. The expiration time mainly depends on the policy of the bank holding your account. Holds can remain in place as long as thirty days for certain accounts or types of payment, again depending on bank policy. In certain circumstances, the bank can remove a hold on request. But it is the bank, and not the merchant, that you must contact to remove a hold or even inquire about one.\"",
"title": ""
},
{
"docid": "ead43a0afb4e63e37927a468c4bb83d3",
"text": "I work at a large bank, that isn't too unusual although a lot of banks are moving to fee-free basic accounts and upping their fees on other specific transactions. For example, my bank did away with minimum balance requirements to waive a monthly service fee, but we started charging $2/month for paper statements and upped our out-of-network ATM fee by 50 cents. Would like to point out that most financial institutions will reorder your transactions slightly for the purposes of accounting. It is much easier to run all transactions in big batches at the end of the day than individually as they come in. Required disclosures you receive upon account opening explain the exact order but most banks do all credits (money in) first and then debits (money out) like checks, debit cards, and ACH payments after. If you overdraft you can usually avoid a fee if you make a cash deposit before the end of the business day as the cash will go into your account before your purchases are debited. OCCASIONALLY this accounting-based reordering will result in additional fees but that is not the intended purpose of reordering them. And I would always refund any incurred fees that happened due to accounting-based transaction reordering. What Wells Fargo is doing has been illegal since 2008 and their continued appeals are hoping to get the ruling overturned so they won't have to pay out restitution to affected customers. It's frankly despicable.",
"title": ""
},
{
"docid": "c7b257f2709405b41df0a6ea0a3eacf7",
"text": "Yes. it is possible, I have seen many times banks permitting overdrawing and later charging a high courtesy fees. Of course in many countries this is not permitted. In one of my account, I am running negative balance as the bank has charged its commission which is not due.",
"title": ""
}
] |
fiqa
|
678dca02e07dcaf35e9689a2cb3fe067
|
Investment strategy for a 20 year old with about 30k in bank account
|
[
{
"docid": "2e35f9c35dc1300bc4e6f9d6ab4c05d0",
"text": "Thank you for your service. My first suggestion since your car is a planned for the near future is keep that amount in savings and just pay cash. There are plenty of attractive offers to entice you to finance your vehicle but there really is no compelling reason to do it considering the savings you have. Second I would keep an additional portion of savings as a rainy day emergency fund. How much is based mostly on what you feel comfortable with. The number of possible emergencies that can come up is limited and your expenses are limited which is normal given your age. This fund might be for something such as emergency travel for a sick family member, cover a deductible for an auto accident, whatever unforseen event might occur (hence the name emergency fund). What investments you are comfortable with will be determined by risk tolerance. While in the military individual stocks that are aggressive risky investments may not be a good idea because of the extra attention they require and you can't really babysit a portfolio while deployed but there are many good low or no cost mutual funds or ETFs that you could get into. I would look into setting up a recurring purchase with a set dollar amount monthly so you will continue to accumulate whatever option you are investing in regularly even if you are deployed. Which fund or ETF you pick will depend on your goals and risk tolerance but you could very easily pick several for diversity. Good luck and thank you again for your service.",
"title": ""
},
{
"docid": "1403c0dc25f5e605961b289b5b269a59",
"text": "\"If you have already maxed your TSP contributions, the \"\"401k\"\" for military folks, you could consider a Traditional IRA contribution. They are tax-deductible, based on some limits, so it may reduce your tax liability. Many online services (Vanguard, Fidelity, etc.) offer quick and free setup of Traditional IRA accounts. If you have already maxed the Traditional IRA as well, you could look at making taxable investments through an online service. Like homer150mw, I would recommend low-cost funds. For reasons why, see this article by John Bogle.\"",
"title": ""
},
{
"docid": "416ef7846826a6105c8771f921f2ad33",
"text": "\"You don't state a long term goal for your finances in your message, but I'm going to assume you want to retire early, and retire well. :-) any other ideas I'm missing out on? A fairly common way to reach financial independence is to build one or more passive income streams. The money returned by stock investing (capital gains and dividends) is just one such type of stream. Some others include owning rental properties, being a passive owner of a business, and producing goods that earn long-term royalties instead of just an immediate exchange of time & effort for cash. Of these, rental property is probably one of the most well-known and easiest to learn about, so I'd suggest you start with that as a second type of investment if you feel you need to diversify from stock ownership. Especially given your association with the military, it is likely there is a nearby supply of private housing that isn't too expensive (so easier to get started with) and has a high rental demand (so less risk in many ways.) Also, with our continued current low rate environment, now is the time to lock-in long term mortgage rates. Doing so will reap huge benefits as rates and rents will presumably rise from here (though that isn't guaranteed.) Regarding the idea of being a passive business owner, keep in mind that this doesn't necessarily mean starting a business yourself. Instead, you might look to become a partner by investing money with an existing or startup business, or even buying an existing business or franchise. Sometimes, perfectly good business can be transferred for surprisingly little down with the right deal structure. If you're creative in any way, producing goods to earn long-term royalties might be a useful path to go down. Writing books, articles, etc. is just one example of this. There are other opportunities depending on your interests and skill, but remember, the focus ought to be on passive royalties rather than trading time and effort for immediate money. You only have so many hours in a year. Would you rather spend 100 hours to earn $100 every year for 20 years, or have to spend 100 hours per year for 20 years to earn that same $100 every year? .... All that being said, while you're way ahead of the game for the average person of your age ($30k cash, $20k stocks, unknown TSP balance, low expenses,) I'm not sure I'd recommend trying to diversify quite yet. For one thing, I think you need to keep some amount of your $30k as cash to cover emergency situations. Typically people would say 6 months living expenses for covering employment gaps, but as you are in the military I don't think it's as likely you'll lose your job! So instead, I'd approach it as \"\"How much of this cash do I need over the next 5 years?\"\" That is, sum up $X for the car, $Y for fun & travel, $Z for emergencies, etc. Keep that amount as cash for now. Beyond that, I'd put the balance in your brokerage and get it working hard for you now. (I don't think an average of a 3% div yield is too hard to achieve even when picking a safe, conservative portfolio. Though you do run the risk of capital losses if invested.) Once your total portfolio (TSP + brokerage) is $100k* or more, then consider pulling the trigger on a second passive income stream by splitting off some of your brokerage balance. Until then, keep learning what you can about stock investing and also start the learning process on additional streams. Always keep an eye out for any opportunistic ways to kick additional streams off early if you can find a low cost entry. (*) The $100k number is admittedly a rough guess pulled from the air. I just think splitting your efforts and money prior to this will limit your opportunities to get a good start on any additional streams. Yes, you could do it earlier, but probably only with increased risk (lower capital means less opportunities to pick from, lower knowledge levels -- both stock investing and property rental) also increase risk of making bad choices.\"",
"title": ""
},
{
"docid": "6b474a0d47dd8050a1213e49e01afbc4",
"text": "Thanks for your service. I would avoid personal investment opportunities at this point. Reason being that you can't personally oversee them if you are deployed overseas. This would rule out rentals and small businesses. Revisit those possibilities if you get married or leave the service. If you have a definite time when you would like to purchase a car, you could buy a six or twelve month CD with the funds that you need for that. That will slightly bump up your returns without taking much risk. If you don't really need to buy the car, you could invest that money in stocks. Then if the stock market tanks, you wait until it recovers (note that that can be five to ten years) or until you build up your savings again. That increases your reward at a significant increase in your risk. The risk being that you might not be able to buy a car for several more years. Build an emergency fund. I would recommend six months of income. Reason being that your current circumstances are likely to change in an emergency. If you leave the service, your expenses increase a lot. If nothing else, the army stops providing room for you. That takes your expenses from trivial to a third of your income. So basing your emergency fund on expenses is likely to leave you short of what you need if your emergency leaves you out of the service. Army pay seems like a lot because room (and board when deployed) are provided. Without that, it's actually not that much. It's your low expenses that make you feel flush, not your income. If you made the same pay in civilian life, you'd likely feel rather poor. $30,000 sounds like a lot of money, but it really isn't. The median household income is a little over $50,000, so the median emergency fund should be something like $25,000 on the income standard. On the expenses standard, the emergency fund should be at least $15,000. The $15,000 remainder would buy a cheap new car or a good used car. The $5000 remainder from the income standard would give you a decent used car. I wouldn't recommend taking out a loan because you don't want to get stuck paying a loan on a car you can't drive because you deployed. Note that if you are out of contact, in the hospital, or captured, you may not be able to respond if there is a problem with the car or the loan. If you pay cash, you can leave the car with family and let them take care of things in case of a deployment. If you invested in a Roth IRA in January of 2016, you could have invested in either 2015 or 2016. If 2015, you can invest again for 2016. If not, you can invest for 2017 in three months. You may already know all that, but it seemed worth making explicit. The Thrift Savings Plan (TSP) allows you to invest up to $18,000 a year. If you're investing less than that, you could simply boost it to the limit. You apparently have an extra $10,000 that you could contribute. A 60% or 70% contribution is quite possible while in the army. If you max out your retirement savings now, it will give you more options when you leave the service. Or even if you just move out of base housing. If your TSP is maxed out, I would suggest automatically investing a portion of your income in a regular taxable mutual fund account. Most other investment opportunities require help to make work automatically. You essentially have to turn the money over to some individual you trust. Securities can be automated so that your investment grows automatically even when you are out of touch.",
"title": ""
}
] |
[
{
"docid": "6fc9945af9c41291f054e379070cc7d6",
"text": "That expense ratio on the bank fund is criminally high. Use the Vanguard one, they have really low expenses.",
"title": ""
},
{
"docid": "dd95be1f34ff8792c8faad39fb544908",
"text": "I would focus first on maxing out your RRSPs (or 401k) each year, and once you've done that, try to put another 10% of your income away into unregistered long term growth savings. Let's say you're 30 and you've been doing that since you graduated 7 years ago, and maybe you averaged 8% p.a. return and an average of $50k per year salary (as a round number). I would say you should have 60k to 120k in straight up investments around age 30. If that's the case, you're probably well on your way to a very comfortable retirement.",
"title": ""
},
{
"docid": "a849a576e82b7dbc8249212d2e914783",
"text": "The advice to invest in yourself is good advice. But the stock market can be very rewarding over the long pull. You have about 45 years to retirement now and that is plenty long enough that each dollar put into the market now will be many dollars then. A simple way to do this might be to open a brokerage account at a reputable broker and put a grand into a very broad based all market ETF and then doing nothing with it. The price of the ETF will go up and down with the usual market gyrations, but over the decades it will grow nicely. Make sure the ETF has low fees so that you aren't being overcharged. It's good that you are thinking about investing at a young age. A rational and consistent investment strategy will lead to wealth over the long pull.",
"title": ""
},
{
"docid": "2a6cd61ce8fa41b425943eed0b91bad2",
"text": "Investing is really about learning your own comfort level. You will make money and lose money. You will make mistakes but you will also learn a great deal. First off, invest in your own financial knowledge, this doesn't require capital at all but a commitment. No one will watch or care for your own money better than yourself. Read books, and follow some companies in a Google Finance virtual portfolio. Track how they're doing over time - you can do this as a virtual portfolio without actually spending or losing money. Have you ever invested before? What is your knowledge level? Investing long term is about trying to balance risk while reducing losses and trying not to get screwed along the way (by people). My personal advice: Go to an independent financial planner, go to one that charges you per hour only. Financial planners that don't charge you hourly get paid in commissions. They will be biased to sell you what puts the most money in their pockets. Do not go to the banks investment people, they are employed by the banks who have sales and quota requirements to have you invest and push their own investment vehicles like mutual funds. Take $15k to the financial planner and see what they suggest. Keep the other $5K in something slow and boring and $1k under your mattress in actual cash as an emergency. While you're young, compound interest is the magic that will make that $25k increase hand over fist in time. But you need to have it consistently make money. I'm young too and more risk tolerant because I have time. While I get older I can start to scale back my risk because I'm nearing retirement and preserve instead of try to make returns.",
"title": ""
},
{
"docid": "515d2284f6f0b2b40aac463a34dff86d",
"text": "This advice will be too specific, but... With the non-retirement funds, start by paying off the car loan if it's more than ~3% interest rate. The remainder: looks like a good emergency fund. If you don't have one of those yet, you do now. Store it in the best interest-bearing savings account you can find (probably accessible by online banking). If you wish to grow your emergency fund beyond $14-20,000 you might also consider some bonds, to boost your returns and add a little risk (but not nearly as much risk as stocks). With the Roth IRA - first of all, toss the precious metals. Precious metals are a crisis hedge and an advanced speculative instrument, not a beginner's investment strategy for 40% of the portfolio. You're either going to use this money for retirement, or your down payment fund. If it's retirement: you're 28; even with a kid on the way, you can afford to take risks in the retirement portfolio. Put it in either a targe-date fund or a series of index funds with an asset allocation suggested by an asset-allocation-suggestion calculator. You should probably have north of 80% stocks if it's money for retirement. If you're starting a down-payment fund, or want to save for something similar, or if you want to treat the IRA money like it's a down-payment fund, either use one of these Vanguard LifeStrategy funds or something that's structured to do the same sort of thing. I'm throwing Vanguard links at you because they have the funds with the low expense ratios. You can use Vanguard at your discretion if it's all an IRA (and not a 401(k)). Feel free to use an alternative, but watch the expense ratios lest they consume up to half your returns.",
"title": ""
},
{
"docid": "15494e74be9bc86dd2485cbda946271b",
"text": "I would definitely recommend putting some of this in an IRA. You can't put all $30K in an IRA immediately though, as the contribution limit is $5500/year for 2014, but until April 15 you can still contribute $5500 for 2013 as well. At your income level I would absolutely recommend a Roth IRA, as your income will very likely be higher in retirement, given that your income will almost certainly rise after you get your Ph.D. Your suggested asset allocation (70% stocks, 30% bonds) sounds appropriate; if anything you might want to go even higher on stocks assuming you won't mind seeing the value drop significantly. If you don't want to put a lot of energy into investment choices, I suggest a target retirement date fund. As far as I am aware, Vanguard offers the lowest expenses for these types of funds, e.g. this 2050 fund.",
"title": ""
},
{
"docid": "7aeabd118c53ff1aaef73230b6c4861b",
"text": "With 30 years until retirement I would not be very concerned about the 3% cash rule. If you do want to follow that advice I would just keep that money in a cash equivalent like a money market fund or short term cd.",
"title": ""
},
{
"docid": "10ac79d2ac6be5c20574e7d20547be22",
"text": "\"You have a few correlated questions here: Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. You're never too young to start. The power of interest means that the more time you give your money to grow, the larger your eventual gains will be (provided your investment is beating inflation). If your financial situation allows it, it makes sense to invest money you don't need immediately, which brings us to: This is the one you have to look at most. You're young but have a nice chunk of cash in a savings account. That money won't grow much and you could be losing purchasing power to inflation but on the other hand that money also isn't at risk. While there are dozens of investment options1 the two main ones to look at are: bonds: these are fixed income, which means they're fairly safe, but the downside is that you need to lock up your money for a long time to get a better interest rate than a savings account index funds that track the market: these are basically another form of stock where each share represents fractions of shares of other companies that are tracked on an index such as the S&P 500 or Nasdaq. These are much riskier and more volatile, which is why you should look at this as a long-term investment as well because given enough time these are expected to trend upwards. Look into index funds further to understand why. But this isn't so much about what you should invest in, but more about the fact that an investment, almost by definition, means putting money away for a long period of time. So the real question remains: how much can you afford to put away? For that you need to look at your individual situation and your plans for the future. Do you need that money to pay for expenses in the coming years? Do you want to save it up for college? Do you want to invest and leave it untouched to inspire you to keep saving? Do you want to save for retirement? (I'm not sure if you can start saving via IRAs and the like at your age but it's worth looking into.) Or do you want to spend it on a dream holiday or a car? There are arguments to be made for every one of those. Most people will tell you to keep such a \"\"low\"\" sum in a savings account as an emergency fund but that also depends on whether you have a safety net (i.e. parents) and how reliable they are. Most people will also tell you that your long-term money should be in the stock market in the form of a balanced portfolio of index funds. But I won't tell you what to do since you need to look at your own options and decide for yourself what makes sense for you. You're off to a great start if you're thinking about this at your age and I'd encourage you to take that interest further and look into educating yourself on the investments options and funds that are available to you and decide on a financial plan. Involving your parents in that is sensible, not in the least because your post-high school plans will be the most important variable in said plan. To recap my first point and answer your main question, if you've decided that you want to invest and you've established a specific budget, the size of that investment budget should not factor into what you invest it in. 1 - For the record: penny stocks are not an investment. They're an expensive form of gambling.\"",
"title": ""
},
{
"docid": "f0e9b6eb1bb4818486d9d4637a157a6c",
"text": "It appears your company is offering roughly a 25% discount on its shares. I start there as a basis to give you a perspective on what the 30% matching offer means to you in terms of value. Since you are asking for things to consider not whether to do it, below are a few considerations (there may be others) in general you should think about your sources of income. if this company is your only source of income, it is more prudent to make your investment in their shares a smaller portion of your overall investment/savings strategy. what is the holding period for the shares you purchase. some companies institute a holding period or hold duration which restricts when you can sell the shares. Generally, the shorter the duration period the less risk there is for you. So if you can buy the shares and immediately sell the shares that represents the least amount of relative risk. what are the tax implications for shares offered at such a discount. this may be something you will need to consult a tax adviser to get a better understanding. your company should also be able to provide a reasonable interpretation of the tax consequences for the offering as well. is the stock you are buying liquid. liquid, in this case, is just a fancy term for asking how many shares trade in a public market daily. if it is a very liquid stock you can have some confidence that you may be able to sell out of your shares when you need. personally, i would review the company's financial statements and public statements to investors to get a better understanding of their competitive positioning, market size and prospects for profitability and growth. given you are a novice at this it may be good idea to solicit the opinion of your colleagues at work and others who have insight on the financial performance of the company. you should consider other investment options as well. since this seems to be your first foray into investing you should consider diversifying your savings into a few investments areas (such as big market indices which typically should be less volatile). last, there is always the chance that your company could fail. Companies like Enron, Lehman Brothers and many others that were much smaller than those two examples have failed in the past. only you can gauge your tolerance for risk. As a young investor, the best place to start is to use index funds which track a broader universe of stocks or bonds as the first step in building an investment portfolio. once you own a good set of index funds you can diversify with smaller investments.",
"title": ""
},
{
"docid": "fe391156b6c7fcd72d28e3cbe7b1f35e",
"text": "A savings account is your best bet. You do not have the time frame to mitigate/absorb risks. The general guideline for investment is 5 years or more. As you state you are no where near close to that time frame.",
"title": ""
},
{
"docid": "8252f119c4f67b1a6d985f5543019804",
"text": "The numbers you have quoted don't add up. For Rs 30,000 / month is 3,60,000 a year. The tax should be around 11,000 again this will be reduced by the contributions to PF. You have indicated a tax deductions of 18,000. There are multiple ways to save taxes. Since you are beginner, investments into section 80C should give you required tax benefits. Please read this article in Economic Times",
"title": ""
},
{
"docid": "c8aea3fd2ed6a452833e4113135fef07",
"text": "So I will attempt to answer the other half of the question since people have given good feedback on the mortgage costs of your various options. Assumptions: It is certain that I am off on some (or all) of these assumptions, but they are still useful for drawing a comparison. If you were to make your mortgage payment, then contribute whatever you have left over to savings, this is where you would be at the end of 30 years. Wait, so the 30 year mortgage has me contributing $40k less to savings over the life of the loan, but comes out with a $20k higher balance? Yes, because of the way compounding interest works getting more money in there faster plays in your favor, but only as long as your savings venue is earning at a higher rate than the cost of the debt your are contrasting it with. If we were to drop the yield on your savings to 3%, then the 30yr would net you $264593, while the 15yr ends up with $283309 in the bank. Similarly, if we were to increase the savings yield to 10% (not unheard of for a strong mutual fund), the 30yr nets $993418, while the 15yr comes out at $684448. Yes in all cases, you pay more to the bank on a 30yr mortgage, but as long as you have a decent investment portfolio, and are making the associated contributions, your end savings come out ahead over the time period. Which sounds like it is the more important item in your overall picture. However, just to reiterate, the key to making this work is that you have an investment portfolio that out performs the interest on the loan. Rule of thumb is if the debt is costing you more than the investment will reliably earn, pay the debt off first. In reality, you need your investments to out perform the interest on your debt + inflation to stay ahead overall. Personally, I would be looking for at least an 8% annual return on your investments, and go with the 30 year option. DISCLAIMER: All investments involve risk and there is no guarantee of making any given earnings target.",
"title": ""
},
{
"docid": "fedc731ab6ca2dc898e6b0f3972279a9",
"text": "\"Put it in a Vanguard fund with 80% VTI and 20% VXUS. That's what you'll let set for 10-15 years. For somebody that is totally new to investing, use \"\"play money\"\" in the stock market. It's easy for young people to get dreams of glory and blow it all on some stock tip they've seen on Twitter.\"",
"title": ""
},
{
"docid": "adcb7cb80bc15e69a3f853fbeb045fd2",
"text": "Even with a good investment strategy, you cannot expect more than 8-10% per year in average. Reducing this by a 3% inflation ratio leaves you with 5 - 7%, which means 15k$ - 21k$. Consider seriously if you could live from that amount as annual income, longterm. If you think so, there is a second hurdle - the words in average. A good year could increase your capital a bit, but a bad year can devastate it, and you would not have the time to wait for the good years to average it out. For example, if your second year gives you a 10% loss, and you still draw 15k$ (and inflation eats another 3%), you have only 247k$ left effectively, and future years will have to go with 12k$ - 17k$. Imagine a second bad year. As a consequence, you either need to be prepared to go back to work in that situation (tough after being without job for years), or you can live on less to begin with: if you can make it on 10k$ to begin with (and do, even in good years), you have a pretty good chance to get through your life with it. Note that 'make it with x' always includes taxes, health care, etc. - nothing is free. I think it's possible, as people live on 10k$ a year. But you need to be sure you can trust yourself to stay within the limit and not give in and spent more - not easy for many people.",
"title": ""
},
{
"docid": "d6149934da913dd25086282f4d6cf05e",
"text": "While the US tax code does not directly impose an obligation to pay estimated taxes, it does impose a penalty on individuals for failure to pay enough taxes either through withholding or estimated tax. USMTG Anyone can choose how s/he wants to pay their taxes but they better deal with any consequences of not paying them instead of just complaining about it like most people do. Most people get the hatred towards the IRS but most complaints are misdirected and should be directed towards Congress who creates and messes around with the US Tax Code. Some people actually do not make estimated payments and pay any possible taxes with their returns knowing that there may be underpayment penalty. For those people, the penalty is relatively small compared to what they can do with the cash over a year's time (i.e. investing or paying down debt). It's their choice!",
"title": ""
}
] |
fiqa
|
1f514a7ee2de2614513a5f4f5f87425b
|
Can my own corporation deduct my expenses even if I am a full time employee?
|
[
{
"docid": "a9c23ac395d4ece655d32c1d7c7bcaaf",
"text": "\"No, your business cannot deduct your non-business expenses. You can only deduct from your business income those reasonable expenses you paid in order to earn income for the business. Moreover, for there to be a tax benefit, your business generally has to have income (but I expect there are exceptions; HST input tax credits come to mind.) The employment income from your full-time job wouldn't count as business income for your corporation. The corporation has nothing to do with that income – it's earned personally, by you. With respect to restaurant bills: These fall under a category known as \"\"meals & entertainment\"\". Even if the expense can be considered reasonable and business-related (e.g. meeting customers or vendors) the Canada Revenue Agency decided that a business can only deduct half of those kinds of expenses for tax purposes. With respect to gasoline bills: You would need to keep a mileage and expense log. Only the portion of your automobile expenses that relate to the business can be deducted. Driving to and from your full-time job doesn't count. Of course, I'm not a tax professional. If you're going to have a corporation or side-business, you ought to consult with a tax professional. (A point on terminology: A business doesn't write off eligible business expenses — it deducts them from business income. Write off is an accounting term meaning to reduce the value of an asset to zero. e.g. If you damaged your car beyond repair, one could say \"\"the car is a write-off.\"\")\"",
"title": ""
}
] |
[
{
"docid": "113ceb5d9dd121482e9d9a44002a48f2",
"text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details.",
"title": ""
},
{
"docid": "a2f90aea0d5c4bccafa3f3047a28797e",
"text": "\"Assuming its in the US: No, it is not, and such things are usually treated as \"\"red flags\"\" for audit (and no, golf club memberships are not deductible either). The food expenses are not deductible in their entirety as well, only up to 50% of the actual expense, and only if it is directly business related. From what you've described, it sounds like if you have an audit coming you'll be in trouble. The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions.\"",
"title": ""
},
{
"docid": "39f3a8221f16c84c72aefff9e8144049",
"text": "To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes:",
"title": ""
},
{
"docid": "06fd20bef0c8c90a7bd03c63416a8f8e",
"text": "They sure can. They are two different legal entities, so why not? You can even write a check to yourself, and then deposit it back into your own account. (Not very useful, but you can). The tax implications are a very different question, as this might constitute taking money out of the company. Edit: In some countries, when the business hires someone to work for them, it is forbidden by law to do that, unless he/she is explicitly allowed to do it in his contract. The business owner himself however, can always 'allow' himself to do that.",
"title": ""
},
{
"docid": "71bd8b7bb71148feb7f19174d08ae7fa",
"text": "\"When I have a question about my income taxes, the first place I look is generally the Giant Book of Income Tax Information, Publication 17 (officially called \"\"Your Federal Income Tax\"\"). This looks to be covered in Chapter 26 on \"\"Car Expenses and Other Employee Business Expenses\"\". It's possible that there's something in there that applies to you if you need to temporarily commute to a place that isn't your normal workplace for a legitimate business reason or other business-related travel. But for your normal commute from your home to your normal workplace it has this to say: Commuting expenses. You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.\"",
"title": ""
},
{
"docid": "8be85e6de45b64fe19db102bc76f2858",
"text": "\"The piece is a little misguided at best and poor journalism at worst. The problem lies in the difference between what's deductible for individuals and what's deductible for corporations. The short version of the story is that corporations can deduct a hell of a lot more things than individuals can. Individual deductions are spelled out in the Internal Revenue Code. Stuff like medical expenses (above 7.5% of your AGI), certain educational things, etc. For corporations, the basic rule is that they can deduct any \"\"ordinary and necessary\"\" business expenses. That includes operating, travel, interest, employee, etc. I wish that the article had cited specific sections of the Code if this was some kind of loophole or something, but alas, it appears that they didn't. That leads me to believe that these companies are deducting the portion not paid to the government as a business expense. ~~For what it's worth, I don't believe that a company can deduct those expenses for tax purposes unless it's to \"\"protect their business interests.\"\" My assumption (I don't have the time or desire to search case law right now) is that settlements with the US Government are considered to fall under that definition.~~ **EDIT** - See my comment [here](http://www.reddit.com/r/business/comments/11dbzu/federal_regulators_have_lauded_a_series_of/c6ll7ez) for the relevant Treasury Regulation dealing with this.\"",
"title": ""
},
{
"docid": "32637ccc9962c2adcab62d05df912a25",
"text": "The short answer is you are not required to. The longer answer depends on whether you are referring to your organization as a sole proprietorship in your state, or for federal taxation. For federal tax purposes, I would suggest filing each side job as a separate Sch C though. The IRS uses the information you provide about your sole proprietorship to determine whether or not your categorization of expenses makes sense for the type of business you are. This information is used by the IRS to help them determine who to audit. So, if you are a service based business, but you are reporting cost of goods sold, you are likely to be audited.",
"title": ""
},
{
"docid": "4d9bdb78150f5089baeab672332d02d2",
"text": "Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "c76a49480c763077c8874d844213b235",
"text": "\"(Disclaimer: I am not an accountant nor a tax pro, etc., etc.) Yes, a Canadian corporation can function as a partial income tax shelter. This is possible since a corporation can retain earnings (profits) indefinitely, and corporate income tax rates are generally less than personal income tax rates. Details: If you own and run your business through a corporation, you can choose to take income from your corporation in one of two ways: as salary, or as dividends. Salary constitutes an expense of the corporation, i.e. it gets deducted from revenue in calculating corporate taxable income. No corporate income tax is due on money paid out as salary. However, personal income taxes and other deductions (e.g. CPP) would apply to salary at regular rates, the same as for a regular employee. Dividends are paid by the corporation to shareholders out of after-tax profits. i.e. the corporation first pays income tax on taxable income for the fiscal year, and resulting net income could be used to pay dividends (or not). At the personal level, dividends are taxed less than salary to account for tax the corporation paid. The net effect of corporate + personal tax is about the same as for salary (leaving out deductions like CPP.) The key point: Dividends don't have to be paid out in the year the money was earned. The corporation can carry profits forward (retained earnings) as long as it wants and choose to issue dividends (or not) in later years. Given that, here's how would the partial income tax shelter works: At some point, for you to personally realize income from the corporation, you can have the corporation declare a dividend. You'll then have to pay personal income taxes on the income, at the dividend rates. But for as long as the money was invested inside the corporation, it was subject only to lesser corporate tax rates, not higher personal income tax rates. Hence the \"\"partial\"\" aspect of this kind of tax shelter. Or, if you're lucky enough to find a buyer for your corporation, you could qualify for the Lifetime Capital Gains Exemption on proceeds up to $750,000 when you sell a qualified small business corporation. This is the best exit strategy; unfortunately, not an easy one where the business has no valuable assets (e.g. a client base, or intellectual property.) * The major sticking-point: You need to have real business revenue! A regular employee (of another company) can't funnel his personally-earned employment income into a corporation just to take advantage of this mechanism. Sorry. :-/\"",
"title": ""
},
{
"docid": "3d7f9fe5894143a3984af1d6e43a76a0",
"text": "\"If you have a single member LLC there is no need to separate expenses in this way since it is simply treated as part of the owner's normal tax returns. This is the way I've been operating. Owner of Single-Member LLC If a single-member LLC does not elect to be treated as a corporation, the LLC is a \"\"disregarded entity,\"\" and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on: Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) (PDF) Form 1040 Schedule E, Supplemental Income or Loss (PDF) Form 1040 Schedule F, Profit or Loss from Farming (PDF) An individual owner of a single-member LLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship. If the single-member LLC is owned by a corporation or partnership, the LLC should be reflected on its owner's federal tax return as a division of the corporation or partnership. https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies\"",
"title": ""
},
{
"docid": "b0c8d3728efd4fd11889096f3baabf9f",
"text": "\"Your wages are an expense to your employer and are therefore 100% tax deductible in the business income. The company should not be paying tax on that, so your double-tax scenario, as described, isn't really correct. [The phrase \"\"double taxation\"\" with respect to US corporations usually comes into play with dividends. In that case, however, it's the shareholders (owners) that pay double. The answer to \"\"why?\"\" in that case can only be \"\"because it's the law.\"\"]\"",
"title": ""
},
{
"docid": "94f593b5521152a87c5459a25f4a9088",
"text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"",
"title": ""
},
{
"docid": "f81ad22890ccc28b8d5635a494d7570b",
"text": "\"The government thought of that a long time ago, and has any loophole there plugged. Like if you set up a company to buy a car and then allow you to use it ... You can use the car for company business, like driving to a customer's office to make a sales call or delivery, and the cost of the car is then tax deductible. But the company must either prohibit personal use of the car, or keep a log of personal versus business use and the personal use becomes taxable income to you. So at best you'd get to deduct an expense here and then you'd have to add it back there for a net change in taxable income of zero. In general the IRS is very careful about personal use of business property and makes it tough to get away with a free ride. I'm sure there are people who lie about it and get away with it because they're never audited, but even if that causes you no ethical qualms, it's very risky. I don't doubt that there are people with very smart lawyers who have found loopholes in the rules. But it's not as simple as, \"\"I call myself a business and now all my personal expenses become tax deductible business expenses.\"\" If you could do that, everybody would do it and no one would pay taxes. Which might be a good thing, but the IRS doesn't see it that way.\"",
"title": ""
},
{
"docid": "aa6ac06db3552d08eda4e4d6ff3339b3",
"text": "Your freelance income will not qualify you for the work-from-home deductions, for that you would need a T2200 form signed by your employer. But, you are allowed to be self employed as a sole-proprietorship while still being an employee of another company. If you take that route, you'll be able to write-off even more expenses than those you linked to. Things like a portion of your internet bill can be claimed, for example. But note that these deductions would only apply to offset the self-employment income, so if you're not earning very much from the freelance work, it might not be worth all the hassle. Filing taxes when self-employed is definitely more complicated, and many people will get professional tax preparation help - at least for the first time.",
"title": ""
},
{
"docid": "68c4d6b201926c7dc2dbd6098be0d795",
"text": "\"It is definitely legal, however none of such expenses will be allowed as a tax deduction for the corporation. Basically, you'll end up paying more to maintain the entity and pay taxes on its income (the rent you're paying to yourself as a corporation) at corporate rates, for no apparent benefit. Being the director/executive in the corporation will make you liable for whatever the corporation is liable, so liability isn't going away. The reason corporation is considered \"\"limited liability\"\" for owners is because shareholders are shielded from the corporate liability. Not directors or executives (which are explicitly not shielded).\"",
"title": ""
}
] |
fiqa
|
d0153f86110a4dd5a44e77c5fc21fc3d
|
Can Per Diem deductions include family travel, meals and housing?
|
[
{
"docid": "9185b59e583e909cad0d185ab8c724d4",
"text": "You cannot deduct anything. Since you're actually moving, your tax home will move with you. You can only deduct the moving expenses (actual moving - packing, shipping, and hotels while you drive yourself there).",
"title": ""
}
] |
[
{
"docid": "b00dcf0b2faaae67c0b38a657cffcb20",
"text": "\"I'm not a tax professional, but as I understand it, you are not expected to commute from San Francisco to Boston. :) If your employer has not provided you with an external office, then yes, you have very likely met the \"\"convenience of the employer\"\" test. However, to take the home office deduction, there are many requirements that have to be met. You can read more at the Nolo article Can You Deduct Your Home Office When You're an Employee? (Thanks, keshlam) The home office deduction has many nuances and is enough of an IRS red flag that you would be well-advised to talk to an accountant about it. You need to be able to show that it is exclusively and necessarily used for your job. Another thing to remember: as an employee, the home office deduction, if you take it, will be deducted on Schedule A, line 21 (unreimbursed employee expenses), among other Miscellaneous Deductions. Deductions in this section need to exceed 2% of your adjusted gross income before you can start to deduct. So it will not be worth it to pursue the deduction if your income is too high, or your housing expenses are too low, or your office is too small compared to the rest of your house, or you don't itemize deductions.\"",
"title": ""
},
{
"docid": "22a9c5d62d95ba6d72274bffda89c476",
"text": "A per diem payment is a cost of doing business for the company, not for you. They can claim it (probably); you can't (definitely).",
"title": ""
},
{
"docid": "c2c0ee6cdbc67b58bdec4983dbec7a49",
"text": "\"It depends on what the \"\"true\"\" reason for the trip is. If you decide to deduct the trip as a business expense, then during an audit you will be asked why you had to go there. If there was nothing accomplished via the travel (that is, you worked from the hotel, met with no clients, visited no tradeshows, etc) then the expense is unlikely to be allowed. Yes, on a business trip you can do sightseeing if you wish (though you can't deduct any sightseeing specific expenses, like admission to a tourist attraction), but if you are just working while on vacation, then the trip itself is not deductible, since there was no business benefit to traveling in the first place.\"",
"title": ""
},
{
"docid": "dbfa5b84cb673235e5bac207e7538d3e",
"text": "As I understand it... Generally housing can't be considered a business expense unless taken at your employer's explicit direction, for the good of the business rather than the employee. Temporary assignment far enough from you home office that commuting or occasional hotel nights are impractical, maybe. In other words, if they wouldn't be (at least theoretically) willing to let you put it on an expense account, you probably can't claim it here.",
"title": ""
},
{
"docid": "a440dc953dc925288491d3b524bca32d",
"text": "You can always reduce the income by the direct expenses required to earn it, and figure out whether it is ultimately a net profit or loss. The net profit is taxable income. The loss may be tax deductible if the underlying thing is tax deductible. For the book, the $50 revenue required a $100 expense, so that's a $50 net loss. You don't owe any income tax since it's a loss. You could take the loss as a tax deduction if you have a business trading books, or if buying the book would be tax deductible for some reason. Note that in the latter case you can only deduct the $50 not the $100. For the airline ticket, it is to compensate you for the losses you took as a result if the delayed flight. So you tally up the $22 meal you had in the airport waiting for news, the $110 on the motel room you rented or forfeited, any other way you can peg a cash value to any losses you took. Total them up, again, a net loss is only deductible if the travel is already deductible. Note that if the actual expenses (book, flight) were tax deductible for some reason, the cash-back reduces the amount of your tax deduction, so it has the same effect as the sale/gift being taxable income.",
"title": ""
},
{
"docid": "b8518ab561569554ce809f6be732522a",
"text": "\"I haven't dealt with this kind of thing in any way, but I found some quotes from IRS publications which I think are relevant and hopefully help. Your scenario sounds to me like a Qualified Tuition Reduction as described in Publication 970 Tax Benefits for Education. It appears the rules are different for graduate study as opposed to pre-graduate work, though I don't see anything about any dollar amount limit. There are various requirements and exceptions, so hopefully reading through that section of the publication can help you understand whether the benefit is supposed to be taxable. If taxable, it should show up on your W-2 like any other income: Any tuition reduction that is taxable should be included as wages on your Form W-2, box 1. Report the amount from Form W-2, box 1, on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). It doesn't appear that there is any special designation or box for the tuition reduction as opposed to \"\"normal\"\" work, it just is income that's been earned like any other. If you need guidance on how much of the income is for \"\"normal\"\" work and how much is for the tuition reduction, you probably need to see if you can figure it out from her pay stubs, or contact the university's HR department. Well, looking through the credits I see in Publication 970, there appear to be two possible credits: The \"\"American opportunity credit\"\" section, under \"\"No double benefit allowed\"\", says things like (my emphasis added): You can't do any of the following. ⋮ My understanding from reading through the section is that expenses are only excluded if they were tax-free, so that there can't be a double-dipping of benefits. If they're included as taxable income, I think they would count under your second interpretation, that the employer paid them like any other income, and your wife spent them as educational expenses just like other students, and they would qualify for educational credits. In fact, it explicitly states: Don't reduce qualified education expenses by amounts paid with funds the student receives as: Which sure sounds to me that anything that counts as W-2 Box 1 \"\"Wages\"\" would be payments received that then the expenses were logically paid separately from. The other credit, the \"\"Lifetime Learning Credit\"\", appears to use identical language (No double benefits; and don't reduce by wages). Obviously this is just from my looking through Publication 970; there may be more nuances here and for \"\"real\"\" advice you may want to speak more to the university HR department (who perhaps have dealt with this before) and/or a real tax advisor. You might also see if you can get any sort of a \"\"receipt\"\" or even a Form 1098-T from the university of what amount was paid on your wife's behalf, to help document it is truly that she was just paid more wages and spent them on classes as far as tax law is concerned.\"",
"title": ""
},
{
"docid": "18d1949aeb240a770a7997bd5a236671",
"text": "Essentially obamacare act is forcing me NOT to claim my sister as my dependent (although I provide > 51% for her). No, that's not what it's doing. It's forcing you (or her) to get insurance. So, as a big sister I can provide for her, but NOT claim her as my dependent. Do I understand everything correctly? The exemption (that gave you that $1K back) can only be claimed by you, she cannot claim it. So by not claiming her you're giving that up. Her medical bills will probably be on you as well, so it would be in your best interest to have her insured. If you want to dump her on the taxpayer in case of a medical emergency - then yes, it will cost you the tax benefit of the additional exemption and the HOH deduction (depending on your tax rates, probably a couple of thousands of dollars). Either way you'll pay.",
"title": ""
},
{
"docid": "fd27658674e7d86ccf10bc37cd400f6c",
"text": "\"I can say that I got X dollars from an account like \"\"Income:Benefits\"\"... but where do I credit that money to? \"\"Expenses:Groceries\"\" Yes doesn't feel right, since I never actually spent that money on food, You did, didn't you? You got food. I'm guessing there's an established convention for this already? Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the \"\"real\"\" expenses.\"",
"title": ""
},
{
"docid": "d5945d1352fddb63a7e2d18d74d15ca4",
"text": "During World War II, the United States (US) instituted wage and price controls. To attract better employees, companies would offer benefits to get around salary limits. Health insurance was one of the more successful benefits. At that time, income taxes were newer and there were many ways to evade them. Companies could generally deduct expenses. So at that time, health care was deductible because everything was. And at that time, only wages were taxable compensation from employer to employee. Since that time, many other benefits have become non-deductible for employers, e.g. housing or the reduced deduction for meals and entertainment. But health care is generally regarded as different, as a necessity. While everyone needs to eat, not everyone needs to eat at a $100 a meal restaurant. People who need expensive health care really need it. People who eat expensive food just prefer it. And of course, health care is more intermittent where food is relatively consistent. You don't need ten thousand calories one day and zero the next. But some families have no health care expenses in a year while another might have cancer or a pregnancy. Note that medical care expenses can be deducted for individuals if they are large enough in aggregate and you itemize. And of course both businesses and workers have incentives to maintain the current system with deductibility. Health insurance is a common benefit. Housing is not (although it's worth noting that travel housing and meals are deductible). So there have been few people impacted by making housing taxable while many people would be impacted by taxable health insurance. You can deduct health insurance costs if self-employed. It's also not true that health insurance is the only benefit with preferential tax treatment. Retirement and child care are also deductible. Even meals and housing can be deducted in certain circumstances. The complex rules about what and how much is deductible. There have been rumbles about normalizing the tax treatment of health insurance and medical care, but there is a lot of opposition. Insurance companies oppose making all healthcare expenses deductible, as that reduces their effective benefit. They would prefer only insurance premiums be deductible. Traditionally employed individuals oppose making health insurance taxable, as that would increase their taxes. So the situation persists. There isn't quite enough support to move in either direction, although the current compromise is economically silly.",
"title": ""
},
{
"docid": "19a5eaff889e256c24b4d030e13e7d2c",
"text": "As a general rule, you must choose between a mileage deduction or an actual expenses deduction. The idea is that the mileage deduction is supposed to cover all costs of using the car. Exceptions include parking fees and tolls, which can be deducted separately under either method. You explicitly cannot deduct insurance costs if you claim a mileage deduction. Separately, you probably won't be able to deduct the deductible for your car as a casualty loss. You first subtract $100 from the deductible and then divide it by your Adjusted Gross Income (AGI) from your tax return. If your deductible is over 10% of your AGI, you can deduct it. Note that even with a $1500 deductible, you won't be able to deduct anything if you made more than $14,000 for the year. For most people, the insurance deductible just isn't large enough relative to income to be tax deductible. Source",
"title": ""
},
{
"docid": "7da3724ed76cc2ae4121e619d09e1c62",
"text": "Trust me, the plane ticket is the least of the expenses flying my co-worker out they will face. His room, his meals outside of what they will serve him, etc. he will steal every red cent he can from them because he is a filthy thief.",
"title": ""
},
{
"docid": "2b3eb961fe4796f80757fdd694888379",
"text": "IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.",
"title": ""
},
{
"docid": "f395c55d7f9fd1f519a973966956ddbe",
"text": "The relevant IRS publication is pub 463. Note that there are various conditions and exceptions, but it all starts with business necessity. Is it necessary for you to work from the UK? If you're working from the UK because you wanted to take a vacation, but still have to work, and would do the same work without being in the UK - then you cannot deduct travel expenses. It sounds to me like this is the case here.",
"title": ""
},
{
"docid": "8357a729b20014c82aa2ce046b89fe1c",
"text": "\"Gambling is perhaps not well defined, but it certainly doesn't include things like reality show winnings. However, it is possible he could deduct something for this. If the reality show qualifies as a \"\"hobby\"\", and his expenses exceed the 2% of AGI requirement, it's possible he could deduct those airplane tickets and such. That deduction is explained in Publication 529.\"",
"title": ""
},
{
"docid": "3f6083e6bf51146c48f1d112cc4fae61",
"text": "\"When you do your taxes, you have two choices for your deductions. You can take the standard deduction, or you can choose to itemize your deductions. If you itemize your deductions, you use Form 1040 Schedule A. By looking at Schedule A, you can see the list of deductions that are itemized: On Schedule A itself, you only list a total for each of these broad categories. In some cases, this is sufficient detail. However, for certain deductions, finer detail may be required, and you may have to submit additional forms showing this detail. For example, on the medical expense line, you generally only list a total of medical expenses; details are only supplied to the IRS upon request. For noncash gifts to charity, you need to supply more details on Form 8283 if your gifts are worth more than $500. These requirements can be found in the instructions for Schedule A. As noted by @Accumulation in the comments, the above deductions that are a part of your itemized deductions are called \"\"below the line\"\" deductions (because they are subtracted after the adjusted gross income line) and are only able to be deducted if you choose to decline the standard deduction. There are other deductions that are available whether or not you itemize. These \"\"above the line\"\" deductions are found on Form 1040 Lines 23-35. If you look at these lines on the form, you'll see the different types of deductions that are called out here. Some of these deductions require additional details on other forms; for example, the HSA deduction requires details on Form 8889. If you have a business, your business expenses are not part of your itemized deductions at all, and do not appear on Schedule A anywhere. Instead, your business expenses get subtracted from your business's revenue, and the resulting profit (or loss) is what is reported on your Form 1040. Different types of businesses report these expenses differently. If you have a sole proprietorship, the details of your business's expenses are reported on Schedule C. On this schedule, Part II is devoted to deductible business expenses. Take a look at Schedule C, and you'll see that Lines 8-27 are different categories of expenses that get called out on this schedule.\"",
"title": ""
}
] |
fiqa
|
1f3a75976d10a9ccb8db2ea5f75e3a54
|
How to start investing for an immigrant?
|
[
{
"docid": "2a0170070fd204fe883362846dae3670",
"text": "\"For starting with zero knowledge you certainly did a great job on research as you hit on most of the important points with your question. It seems like you have already saved up around six months of expenses in savings so it is a great time to look into investing. The hardest part of your question is actually one of the most important details. Investing in a way that minimizes your taxes is generally more important, in the end, than what assets you actually invest in (as long as you invest even semi-reasonably). The problem is that the interaction between your home country's tax system and the U.S. tax system can be complex. It's probably (likely?) still worth maxing out your 401(k) (IRA, SEP, 529 accounts if you qualify) to avoid taxes, but like this question from an Indian investor it may be worth seeing an investment professional about this. If you do, see a fee-based professional preferably one familiar with your country. If tax-advantaged accounts are not a good deal for you or if you max them out, a discount broker is probably a good second option for someone willing to do a bit of research like you. With this money investing in broadly-diversified, low fee, index mutual funds or exchange traded funds is generally recommended. Among other benefits, diversified funds make sure that if any particular company fails you don't feel too much pain. The advantages of low fees are fairly obvious and one very good reason why so many people recommend Vanguard on this site. A common mix for someone your age is mostly stocks (local and international) and some bonds. Though with how you talk about risk you may prefer more bonds. Some people recommend spicing this up a bit with a small amount of real estate (REITs), sometimes even other assets. The right portfolio of the above can change a lot given the person. The above mentioned adviser and/or more research can help here. If, in the future, you start to believe you will go back to your home country soon that may throw much of this advice out the window and you should definitely reevaluate then. Also, if you are interested in the math/stats behind the above advice \"\"A Random Walk Down Wall Street\"\" is a light read and a good place to start. Investing makes for a very interesting and reasonably profitable math/stats problem.\"",
"title": ""
},
{
"docid": "c2c1689756baeabb3d8539f28fdd6121",
"text": "I am in a similar situation (sw developer, immigrant waiting for green card, no debt, healthy, not sure if I will stay here forever, only son of aging parents). I am contributing to my 401k to max my employer contribution (which is 3.5%, you should find that out from your HR). I don't have any specific financial goal in my mind, so beside an emergency fund (I was recommended to have at least 6 months worth of salary in cash) I am stashing away 10% of my income which I invest with a notorious robot-adviser. The rate is 80% stocks, 20% bonds, as I don't plan to use those funds anytime soon. Should I go back to my country, I will bring with me (or transfer) the cash, and leave my investments here. The 401K will keep growing and so the investments, and perhaps I will be able to retire earlier than expected. It's quite vague I know, but in the situation we are, it's hard to make definite plans.",
"title": ""
}
] |
[
{
"docid": "e52155c7cd64c68a652f09464c274bcc",
"text": "If you have money and may need to access it at any time, you should put it in a savings account. It won't return much interest, but it will return some and it is easily accessible. If you have all your emergency savings that you need (at least six months of income), buy index-based mutual funds. These should invest in a broad range of securities including both stocks and bonds (three dollars in stocks for every dollar in bonds) so as to be robust in the face of market shifts. You should not buy individual stocks unless you have enough money to buy a lot of them in different industries. Thirty different stocks is a minimum for a diversified portfolio, and you really should be looking at more like a hundred. There's also considerable research effort required to verify that the stocks are good buys. For most people, this is too much work. For most people, broad-based index funds are better purchases. You don't have as much upside, but you also are much less likely to find yourself holding worthless paper. If you do buy stocks, look for ones where you know something about them. For example, if you've been to a restaurant chain with a recent IPO that really wowed you with their food and service, consider investing. But do your research, so that you don't get caught buying after everyone else has already overbid the price. The time to buy is right before everyone else notices how great they are, not after. Some people benefit from joining investment clubs with others with similar incomes and goals. That way you can share some of the research duties. Also, you can get other opinions before buying, which can restrain risky impulse buys. Just to reiterate, I would recommend sticking to mutual funds and saving accounts for most investors. Only make the move into individual stocks if you're willing to be serious about it. There's considerable work involved. And don't forget diversification. You want to have stocks that benefit regardless of what the overall economy does. Some stocks should benefit from lower oil prices while others benefit from higher prices. You want to have both types so as not to be caught flat-footed when prices move. There are much more experienced people trying to guess market directions. If your strategy relies on outperforming them, it has a high chance of failure. Index-based mutual funds allow you to share the diversification burden with others. Since the market almost always goes up in the long term, a fund that mimics the market is much safer than any individual security can be. Maintaining a three to one balance in stocks to bonds also helps as they tend to move in opposite directions. I.e. stocks tend to be good when bonds are weak and vice versa.",
"title": ""
},
{
"docid": "a11258e0201b95e662802459335f1f8d",
"text": "What is the best option to start with? and I am not sure about my goals right now but I do want to have a major retirement account without changing it for a long time That is a loaded question. Your goals should be set up first, else what is stopping you from playing the mega millions lottery to earn the retirement amount instantly. If you have the time and resources, you should try doing it yourself. It helps you learn and at a latter stage if you don't have the time to manage it yourself, you can find an adviser who does it for you. To find a good adviser or find a fund who/which can help you achieve your monetary goals you will need to understand the details, how it works and other stuff, behind it. When you are thrown terms at your face by somebody, you should be able to join the dots and get a picture for yourself. Many a rich men have lost their money to unscrupulous people i.e. Bernie Madoff. So knowing helps a lot and then you can ask questions or find for yourself to calm yourself i.e. ditch the fund or adviser, when you see red flags. It also makes you not to be too greedy, when somebody paints you a picture of great returns, because then your well oiled mind would start questioning the rationale behind such investments. Have a look at Warren Buffet. He is an investor and you can follow how he does his investing. It is simple but very difficult to follow. Investing through my bank I would prefer to stay away from them, because their main service is banking and not allowing people to trade. I would first compare the services provided by a bank to TD Ameritrade, or any firm providing trading services. The thing is, as you mentioned in the question, you have to go through a specific process of calling him to change your portfolio, which shouldn't be a condition. What might happen is, if he is getting some benefits out of the arrangement(get it clarified in the first place if you intend to go through them), from the side of the fund, he might try to dissuade you from doing so to protect his stream of income. And what if he is on a holiday or you cannot get hold of him. Secondly from your question, it seems you aren't that investing literate. So it is very easy to get you confused by jargon and making you do what he gets the maximum benefit out of it, rather than which benefits you more. I ain't saying he is doing so but that could be a possibility too, so you have consider that angle too. The pro is that setting up an account through them might be much easier than directly going to a provider. But the best point doing it yourself is, you will learn and there is nothing which tops that. You don't want somebody else managing your money, however knowledgeable they maybe i.e. Anthony Bolton.",
"title": ""
},
{
"docid": "2e0e28f088f2ad5624434a638e3881f3",
"text": "Secondly, should we pay off his student loans before investing? The subsidized loans won't be gaining any interest until he graduates so I was wondering if we should just pay off the unsubsidized loans and keep the subsidized ones for the next two years? From a purely financial standpoint, if the interest you gain on your savings is higher than the interest of the debt, then no. Otherwise, yes. If we were to keep 5,000 in savings and pay of the 3,000 of unsubsidized loans as I described above, that would leave us with about 15,000 dollars that is just lying around in my savings account. How should I invest this? Would you recommend high risk or low risk investments? I'm not from the US so take my answer with caution, but to me $15,000 seems a minimum safety net. Then again, it depends very much on any external help you can get in case of an emergency.",
"title": ""
},
{
"docid": "2234ad152a94b06edf2086f30592fe80",
"text": "I am not interested in watching stock exchange rates all day long. I just want to place it somewhere and let it grow Your intuition is spot on! To buy & hold is the sensible thing to do. There is no need to constantly monitor the stock market. To invest successfully you only need some basic pointers. People make it look like it's more complicated than it actually is for individual investors. You might find useful some wisdom pearls I wish I had learned even earlier. Stocks & Bonds are the best passive investment available. Stocks offer the best return, while bonds are reduce risk. The stock/bond allocation depends of your risk tolerance. Since you're as young as it gets, I would forget about bonds until later and go with a full stock portfolio. Banks are glorified money mausoleums; the interest you can get from them is rarely noticeable. Index investing is the best alternative. How so? Because 'you can't beat the market'. Nobody can; but people like to try and fail. So instead of trying, some fund managers simply track a market index (always successfully) while others try to beat it (consistently failing). Actively managed mutual funds have higher costs for the extra work involved. Avoid them like the plague. Look for a diversified index fund with low TER (Total Expense Ratio). These are the most important factors. Diversification will increase safety, while low costs guarantee that you get the most out of your money. Vanguard has truly good index funds, as well as Blackrock (iShares). Since you can't simply buy equity by yourself, you need a broker to buy and sell. Luckily, there are many good online brokers in Europe. What we're looking for in a broker is safety (run background checks, ask other wise individual investors that have taken time out of their schedules to read the small print) and that charges us with low fees. You probably can do this through the bank, but... well, it defeats its own purpose. US citizens have their 401(k) accounts. Very neat stuff. Check your country's law to see if you can make use of something similar to reduce the tax cost of investing. Your government will want a slice of those juicy dividends. An alternative is to buy an index fund on which dividends are not distributed, but are automatically reinvested instead. Some links for further reference: Investment 101, and why index investment rocks: However the author is based in the US, so you might find the next link useful. Investment for Europeans: Very useful to check specific information regarding European investing. Portfolio Ideas: You'll realise you don't actually need many equities, since the diversification is built-in the index funds. I hope this helps! There's not much more, but it's all condensed in a handful of blogs.",
"title": ""
},
{
"docid": "3bf230205bb1a357e7a52292f2a695eb",
"text": "\"There's several approaches to the stock market. The first thing you need to do is decide which you're going to take. The first is the case of the standard investor saving money for retirement (or some other long-term goal). He already has a job. He's not really interested in another job. He doesn't want to spend thousands of hours doing research. He should buy mutual funds or similar instruments to build diversified holdings all over the world. He's going to have is money invested for years at a time. He won't earn spectacular amazing awesome returns, but he'll earn solid returns. There will be a few years when he loses money, but he'll recover it just by waiting. The second is the case of the day trader. He attempts to understand ultra-short-term movements in stock prices due to news, rumors, and other things which stem from quirks of the market and the people who trade in it. He buys a stock, and when it's up a fraction of a percent half an hour later, sells it. This is very risky, requires a lot of attention and a good amount of money to work with, and you can lose a lot of money too. The modern day-trader also needs to compete with the \"\"high-frequency trading\"\" desks of Wall Street firms, with super-optimized computer networks located a block away from the exchange so that they can make orders faster than the guy two blocks away. I don't recommend this approach at all. The third case is the guy who wants to beat the market. He's got long-term aspirations and vision, but he does a lot more research into individual companies, figures out which are worth buying and which are not, and invests accordingly. (This is how Warren Buffett made it big.) You can make it work, but it's like starting a business: it's a ton of work, requires a good amount of money to get going, and you still risk losing lots of it. The fourth case is the guy who mostly invests in broad market indexes like #1, but has a little money set aside for the stocks he's researched and likes enough to invest in like #3. He's not going to make money like Warren Buffett, but he may get a little bit of an edge on the rest of the market. If he doesn't, and ends up losing money there instead, the rest of his stocks are still chugging along. The last and stupidest way is to treat it all like magic, buying things without understanding them or a clear plan of what you're going to do with them. You risk losing all your money. (You also risk having it stagnate.) Good to see you want to avoid it. :)\"",
"title": ""
},
{
"docid": "95bb327dabf621795a92207ce1106bb2",
"text": "This post has been wrote in 2014, so if you read this text be aware. At the time, and since France does tax a lot investment, I'd suggest you start a PEA and filling in using the lazy investment portfolio. That means buying European and/or French ETFs & index, and hold them as long as you can. You can fill your PEA (Plan d'Epargne en Action) up to 150.000€ for a period of at least 8 years as long as you fill it with European and French stocks. After the period of 8 years your profit is taxed at only mere 15%, instead of the 33% you see in a raw broker account. Since you are young, I think a 100% stocks is something you can hold on. If you can't sleep at night with 100% stocks, take some bonds up to 25%, even more. Anyway, the younger you start investing, the more ahead you may eventually go.",
"title": ""
},
{
"docid": "d12a01b8f903137662fada452e2939e5",
"text": "\"Congratulations. The first savings goal should be an emergency fund. Think of this not as an investment, but as insurance against life's woes. They happen and having this kind of money earmarked allows one to invest without needing to withdraw at an inopportune time. This should go into a \"\"high interest\"\" savings account or money market account. Figure three to six months of expenses. The next goal should be retirement savings. In the US this is typically done through 401K or if your company does not offer one, either a ROTH IRA or Traditional IRA. The goal should be about 15% of your income. You should favor a 401k match over just about anything else, and then a ROTH over that. The key to transforming from a broke college student into a person with a real job, and disposable income, is a budget. Otherwise you might just end up as a broke person with a real job (not fun). Part of your budget should include savings, spending, and giving. All three areas are the key to building wealth. Once you have all of those taking care of the real fun begins. That is you have an emergency fund, you are putting 15% to retirement, you are spending some on yourself, and giving to a charity of your choice. Then you can dream some with any money left over (after expenses of course). Do you want to retire early? Invest more for retirement. Looking to buy a home or own a bunch of rental property? Start educating yourself and invest for that. Are you passionate about a certain charity? Give more and save some money to take time off in order to volunteer for that charity. All that and more can be yours. Budgeting is a key concept, and the younger you start the easier it gets. While the financiers will disagree with me, you cannot really invest if you are borrowing money. Keep debt to zero or just on a primary residence. I can tell you from personal experience that I did not started building wealth until I made a firm commitment to being out of debt. Buy cars for cash and never pay credit card interest. Pay off student loans as soon as possible. For some reason the idea of giving to charity invokes rancor. A cursory study of millionaires will indicate some surprising facts: most of them are self made, most of them behave differently than pop culture, and among other things most of them are generous givers. Building wealth is about behavior. Giving to charity is part of that behavior. Its my own theory that giving does almost no good for the recipient, but a great amount of good for the giver. This may seem difficult to believe, but I ask that you try it.\"",
"title": ""
},
{
"docid": "3fd2c4aac08a0eb253bbb662aec2ca98",
"text": "\"It's a good question, but it turns into a general 'how to invest' question. You see, the cliche of \"\"invest the difference\"\" simply point to the ripoff the other two answers discuss. And it doesn't specify how to invest, only that this money should be put to work as long term investments. The best answer is to find the asset allocation appropriate for your age and risk profile. It can be as simple as a low cost S&P ETF, or as complex at a dozen assets that include Stocks, both Domestic and Foreign, REITs, Commodities, etc. It's not as if the saved funds get segregated in a special account just for this purpose, although I suppose one can do this just as others have separate funds for retirement, emergency, vacation, college, etc.\"",
"title": ""
},
{
"docid": "2fd0badcf019badaaa17e36fff9fa597",
"text": "Pool their money into my own brokerage account and simply split the gains/losses proportional to the amount of money that we've each contributed to the account. I'm wary of this approach due to the tax implications and perhaps other legal issues so I'd appreciate community insight here. You're right to be wary. You might run into gift tax issues, as well as income tax liability and appropriation of earnings. Not a good idea at all. Don't do this. Have them set up their own brokerage account and have them give me the login credentials and I manage the investments for them. This is obviously the best approach from a tracking and tax perspective, but harder for me to manage; to be honest I'm already spending more time than I want to managing my own investments, so option 1 really appeals to me if the drawbacks aren't prohibitive. That would also require you to be a licensed financial adviser, at least to the best of my understanding. Otherwise there's a lot of issues with potential liability (if you make investments that lose money - you might be required to repay the losses). You should do this only with a proper legal and tax advice - from an attorney and/or CPA/EA licensed in your state. There are proper ways to do this (limited partnership or LLC, for example), but you have to cover your ass-ets with proper operating agreements in place that have to be reviewed by legal counsel of each of the members/partners,",
"title": ""
},
{
"docid": "303f9e3c17e772c2531668aa10c2dfe7",
"text": "There is a fourth option - pay those taxes. Depending on the amounts, it might be the easiest way - if you make 34.49 in interest, and pay 6 $ in taxes on it, and be done, that might not be worth any other effort. If the expected taxable amount is significant, moving (most of it) to index funds or other simply switching existing investments to ‘reinvest’ instead of ‘pay out in cash’ would be the best approach. Again, some smaller amounts in savings or checkings accounts are probably not worth any effort. Transferring the money to the US doesn’t save you taxes, as any interest would still be taxable. You have a risk to lose on the conversion back and forth (and a potential to gain - the exchange rate could go either way!), so if you are sure you go back, it’s not a good idea to move the money.",
"title": ""
},
{
"docid": "96802f64aee75a2dff0c7b4c113c4323",
"text": "John Bogle never said only buy the S&P 500 or any single index Q:Do you think the average person could safely invest for retirement and other goals without expert advice -- just by indexing? A: Yes, there is a rule of thumb I add to that. You should start out heavily invested in equities. Hold some bond index funds as well as stock index funds. By the time you get closer to retirement or into your retirement, you should have a significant position in bond index funds as well as stock index funds. As we get older, we have less time to recoup. We have more money to protect and our nervousness increases with age. We get a little bit worried about that nest egg when it's large and we have little time to recoup it, so we pay too much attention to the fluctuations in the market, which in the long run mean nothing. How much to pay Q: What's the highest expense ratio that one should pay for a domestic equity fund? A: I'd say three-quarters of 1 percent maybe. Q: For an international fund? A: I'd say three-quarters of 1 percent. Q: For a bond fund? A: One-half of 1 percent. But I'd shave that a little bit. For example, if you can buy a no-load bond fund or a no-load stock fund, you can afford a little more expense ratio, because you're not paying any commission. You've eliminated cost No. 2....",
"title": ""
},
{
"docid": "fd9a78556b28bf71945b4aadc1528b6d",
"text": "Certainly reading the recommended answers about initial investing is a great place to start and I highly recommend reading though that page for sure, but I also believe your situation is a little different than the one described as that person has already started their long-term career while you are still a couple years away. Now, tax-advantaged accounts like IRAs are amazingly good places to start building up retirement funds, but they also lock up the money and have a number of rules about withdrawals. You have fifteen thousand which is a great starting pot of money but college is likely to be done soon and there will likely be a number of expenses with the transition to full-time employment. Moving expenses, first month's rent, nursing exams, job search costs, maybe a car... all of this can be quite a lot especially if you are in a larger city. It sounds like your parents are very helpful though which is great. Make sure you have enough money for that transition and emergency expenses first and if there is a significant pool beyond that then start looking at investments. If you determine now is the best time to start than then above question is has great advice, but even if not it is still well worth taking some time to understand investing through that question, my favorite introduction book on the subject and maybe even a college course. So when you land that first solid nursing job and get situated you can start taking full advantage of the 401K and IRAs.",
"title": ""
},
{
"docid": "3a5e26a54c14df9789647c1dea47ee96",
"text": "There are some brokers in the US who would be happy to open an account for non-US residents, allowing you to trade stocks at NYSE and other US Exchanges. Some of them, along with some facts: DriveWealth Has support in Portuguese Website TD Ameritrade Has support in Portuguese Website Interactive Brokers Account opening is not that straightforward Website",
"title": ""
},
{
"docid": "ee7e0b768dc50030f75a45f00575c0a3",
"text": "For now, park it in a mix of cash and short term bond funds like the Vanguard Short Term Investment Grade fund. The short term fund will help with the inflation issue. Make sure the cash positions are FDIC insured. Then either educate yourself about investing or start interviewing potential advisors. Look for referrals, and stay away from people peddling annuities or people who will not fully disclose how they get paid. Your goal should be to have a long-term plan within 6-12 months.",
"title": ""
},
{
"docid": "b2b8102999ce0df2fd34e8a6903b8900",
"text": "The store wants their money back. It's understandable that they are hesitant to accept another check from you. So if you don't have the cash to pay them back, take your good check somewhere else to cash it, and use that money to pay back the store that you gave the bad check to.",
"title": ""
}
] |
fiqa
|
3b937cf9506f78eea27a69182eb48c37
|
Why is tax being paid on my salary multiple times?
|
[
{
"docid": "dea7c7689275e326ed6b5c49f6b24906",
"text": "Businesses do not pay income tax on money that they pay out as salary to their employees. Businesses generally only pay income tax on profit. Profit is the money that comes in (revenue) minus the business expenses. Payroll to the employees is a deductible business expense.",
"title": ""
},
{
"docid": "b0c8d3728efd4fd11889096f3baabf9f",
"text": "\"Your wages are an expense to your employer and are therefore 100% tax deductible in the business income. The company should not be paying tax on that, so your double-tax scenario, as described, isn't really correct. [The phrase \"\"double taxation\"\" with respect to US corporations usually comes into play with dividends. In that case, however, it's the shareholders (owners) that pay double. The answer to \"\"why?\"\" in that case can only be \"\"because it's the law.\"\"]\"",
"title": ""
}
] |
[
{
"docid": "5ea5df19dc16e1416293154434a4e942",
"text": "\"You should ask your employer to issue an updated payslip showing the correct gross salary, deductions and net salary, and then repay to the employer the difference between the net salary in your old (wrong) pay slip and the new (correct) one. You should also get them to confirm that they have corrected any information they sent HMRC. At the end of the tax year, when you get a P60 showing your salary for the year, make sure that it is consistent with the corrected salary amount, and check that the tax it shows as being deducted is also correct for that gross salary for the year. If you are still employed by them then you could just ask them to withhold the overpayment in your next salary payment, at which point the income tax would sort itself out because PAYE is calculated based on cumulative totals. If the overpayment had happened at the end of the tax year (March) then there'd be some risk of it messing up your tax payments. In some cases it's also possible that withholding from the next salary payment could make a difference to the total national insurance you end up paying - broadly, if you earn below the \"\"Primary Threshold\"\" of £8164/year, you might lose out. If you earn close to the \"\"Upper Earnings Limit\"\" of £45000/year, you could end up gaining.\"",
"title": ""
},
{
"docid": "5bf4aa4f68b173fc56b2b036fda4b580",
"text": "One point that I don't see covered in the other answers yet: How does this affect the months that have 5 weeks. Do we actually lose two weeks a year? I get paid every two weeks, and pay day is always a Friday. Some months, I get paid 3 times - which is always great. If you live within your means, it's like an extra paycheck. All other months, I get paid two times. How many months a year do I get paid 3 times? 2. It will always be two, because there are 12 months. If you get paid twice a month, that's 24 pay checks, which is 2 shy of 26 pay checks - what we would expect if we were paid every two weeks. That means those 2 extra pay checks need to fall somewhere, and they will be on the months where your pay day is hit 5 times. For example, in 2014, there are 4 months with 5 Fridays: Jan May Aug Oct I got paid the second Friday of January, so I only got 2 checks in January. I will be paid on the first Friday of May, which means I will get 3 checks in May. My other triple-check month this year is October, so of course I am only going to be paid twice in August.",
"title": ""
},
{
"docid": "9781524bf267c26ed2f913336063da22",
"text": "It is possible that they only do the hold on the first deposit from a given source. It is probably worth asking if they intend to do the hold on every paycheck or just the first one.",
"title": ""
},
{
"docid": "2fc58fa4e0d30d7f72608146c8999a38",
"text": "Generally this gets corrected when you file returns for both States -- one owes you some refund, and younowe some money to the other. Multistate tax returns are their own special kettle of worms, so you might want to consider hiring a pro to straighten this out -- their software has some tools personal packages don't.",
"title": ""
},
{
"docid": "fb32224abbecd0111b8671b4ed22d88a",
"text": "In Singapore, this is sufficiently common that the Singapore IRS has a page on their website dedicated to informing employers of how to properly pay this under Responsibilites of an Employer. Specifically, tax paid by employer is taxable income for the employee (as it's really the employee's responsibility), so they must pay tax for that tax. A tax-on-tax is computed for the tax paid, which also would be owed by the employer if they were paying the full tax rate for the employee. As a clarification, this is not the employer being truly responsible for the employee's income; this is the employer compensating the employee further to offset their taxable income. This is effectively a fringe benefit, although it may be particularly useful in countries where either tax evasion is common (and thus an employer must compete with employers willing to pay under the table) or where employers are competing with others in nearby countries with lower tax rates. It is not the same thing as the employer making your income nontaxable, though, and has implications for your tax filing. Significantly, it is likely that if you have additional income beyond income from that employer, it is likely to be taxed at your highest tax rate, as the employer will likely calculate the tax due based on their income being the only income you have in that year. *Edit based on emphasis in question: I'm not from Singapore nor am I a lawyer, but based on my reading of the IRAS website, it looks like you do not have to file if you have no other source of income, because they have a No-Filing Service which takes income information from your employer automatically and generates a tax bill, which presumably would be fully paid in your case. This only aplies if you have no other sources of income, however; you still have to file if you have other sources of income since your employer would not know about them. If you are eligible for this service, you should get a letter informing you as such. They also have a tool to check your filing status on their website.",
"title": ""
},
{
"docid": "47c9c8dbbbfb64b9537ec5a36e9cc724",
"text": "\"What theyre fishing for is whether the money was earned in the U.S. It's essentially an interest shelter, and/or avoiding double taxation. They're saying if you keep income you make outside the US in a bank inside the US, the US thanks you for storing your foreign money here and doesn't tax the interest (but the nation where you earned that income might). There is no question that the AirBNB income is \"\"connected with a US trade or business\"\". So your next question is whether the fraction of interest earned from that income can be broken out, or whether IRS requires you to declare all the interest from that account. Honestly given the amount of tax at stake, it may not be worth your time researching. Now since you seem to be a resident nonresident alien, it seems apparent that whatever economic value you are creating to earn your salary, is being performed in the United States. If this is for an American company and wages paid in USD, no question, that's a US trade or business. But what if it's for a Swedish company running on Swedish servers, serving Swedes and paid in Kroner to a Swedish bank which you then transfer to your US bank? Does it matter if your boots are on sovereign US soil? This is a complex question, and some countries (UK) say \"\"if your boots are in our nation, it is trade/income in our nation\"\"... Others (CA) do not. This is probably a separate question to search or ask. To be clear, the fact that your days as a teacher or trainee do not count toward residency, is a separate question from whether your salary as same counts as US income.\"",
"title": ""
},
{
"docid": "2a80ff6faa12fae41974ec90a221bfef",
"text": "Aside from the fact that probably nobody is ever going to come and ask for that proof unless your amounts get five digits (or you're unlucky), if you never before reimbursed yourself, your old tax declarations would clearly show that. You can't prove a negative, so the only potential is that you had reimbursements before, and an audit might ask you to prove that the new ones are not duplicates of those. In this case, if you have other receipts / proof for all those other reimbursements, they are obviously not duplicates.",
"title": ""
},
{
"docid": "f49a5014e4b988839b195d6185eb3018",
"text": "Because lobbying. Otherwise such tax optimization schemes would be counteracted with laws after their discovery by our law-making entities... who can be ~~paid~~ lobbied. Personally I believe if your company uses a country's infrastructure to sell goods for a profit, then you should pay a fair share of that profit to support that infrastructure you use. If you don't want to pay, just don't do business there. But lobbying can alter that logic.",
"title": ""
},
{
"docid": "492141baca1c8a93c3d4cac2a9cc8557",
"text": "I suggest taking a look at your pay stub or pay statement. Your employer should provide you with one for each time you get paid. This shows your gross income (pay period and year to date or YTD for short) and all stuff that gets deducted and how your actual payment is calculated. In my case there are nine things that get taken off: Other things that might show up there are various life or accident insurances, Child Care flexible spending account, legal & pet insurances, long term disability, etc. Some of those are under your control (through benefit election or contribution choices), others you just have to live with. Still, it's worth spending the time to look at it occasionally.",
"title": ""
},
{
"docid": "b3647fabeeeeda60c6fe140cefcf0735",
"text": "\"As you clarified in the comments, it is not a contract work but rather an additional temporary assignment with the same employer. You were paid for it in form of a \"\"bonus\"\" - one time irregular payment, instead of regular periodic payments. Irregular wage payments fall under the flat rate withholding rule (the 25% for Federal, some States have similar rules for State withholding). This is not taxes, this is withholding. Withholding is money the employer takes from your salary and forwards to the IRS on the account of your tax liability, but it is not in itself your tax liability. When you do your annual tax return, you'll calculate the actual tax you were supposed to pay, and the difference between what was withheld and your actual tax will be refunded to you (or owed by you, if not enough was withheld). You can control the regular pay withholding using W4 form.\"",
"title": ""
},
{
"docid": "071f7252ad58078526431800146394df",
"text": "\"When you say \"\"set aside,\"\" you mean you saved to pay the tax due in April? That's underpaying. It's a rare exception the IRS makes for this penalty, hopefully it wasn't too large, and you now know how much to withhold through payroll deductions. Problem is, this wasn't unusual, it was an oversight. You have no legitimate grounds to dispute. Sorry.\"",
"title": ""
},
{
"docid": "59b4addcfd69d3df4c5df1dfc823dba7",
"text": "\"Two comments on your calculations: I worked for many years at a community college (Ontario, Canada) where I received an annual salary for the contract period Sept 1, Year N, to August 31, Year (N + 1). For most of that time, the system was 26 pay-cheques a year, one every 14 days. Payroll made most mandatory deductions (union dues, pension, etc.) on a monthly basis, assigning them to one or the other of the two cheques each month. So there was a fairly large variation in the net amount received in the two cheques. Plus there were those two \"\"extra\"\" cheques each year with very few deductions. (as in the answer of @Kate Gregory) Additionally, Payroll was smart enough to make the last cheque of the contract year for a slightly odd amount, just the correct amount to bring the total gross amount paid to the actual contractual salary, evening out any extra days or rounding error. They would restart the payment schedule anew on the second Thursday in September.\"",
"title": ""
},
{
"docid": "cf3539f86c66a80f473878e2c84b1c32",
"text": "\"It seems that you think you are freelancing, and they think you are an employee. What's bad for you, the tax office will also think you are an employee if they withhold tax for you. Alternatively, they think you are stupid, and they keep the money, but are actually not paying it to the tax office at all, in which case you will have a bad surprise when you do your tax returns. First, I'd ask them for proof that they are indeed paying these taxes into some account related to you. I'd then ask a tax adviser for some serious advice. If they are acting out of incompetence and not out of malice, then you should be mostly fine, but your work there will count as employment. Heaven knows why they treat you as an employee. Check your contract with them; whether it is between you and them or your company and them. It maybe that they never hired a contractor and believe that they have to pay employment tax. They don't. If your company sends them a bill, then they need to pay that bill, 100% of it, and that's it. Taxes are fully your business and your responsibility. As \"\"quid\"\" said, if they say they are withholding tax, then at the very least there must be a paystub that proves they have actually been paying these taxes. If they withhold taxes, and there is no paystub, then this looks like a criminal attempt to cheat you. If they have actually paid taxes properly into your account, then they are merely creating a mess that can hopefully be fixed. But it is probably complicated enough that you need a tax advisor, even if you had none before, since instead of paying to your company, they paid some money to the company, and some to you personally.\"",
"title": ""
},
{
"docid": "0eee34d622b96978b429cc79262ad507",
"text": "The vast majority of individual taxpayers in the United States operate on a cash basis of accounting. This means that the assignment of deductions or income to tax year is based on the date of the paycheck. So the money in that early January 2016 paycheck has been correctly assigned to the 2016 tax year. This is unfortunate for you because you will receive a W-2 for 2016 showing that you had a retirement account. Knowing exactly how many paychecks there are in a year can be very import to know when trying the reach or avoid some thresholds. Even quitting the previous pay period might not have helped. I have seen some companies payout unused vacation, sick and severance over several paychecks. They didn't give you it all in one lump sum, they did it 80 hours a paycheck until the balance owed to the employee was zero.",
"title": ""
},
{
"docid": "398e94146352af9c28b7d07fd2eed9c9",
"text": "\"In the Netherlands its cheaper in some cases to have a mortgage then to own a house. Example: If you own a house you pay more taxes (because you own something expensive you have to pay \"\"eigendoms belasting\"\" < owners tax). So if you instead of owning the house, keep the mortgage low and only pay the mortgage interest, the interest will be much lower then the tax you would have to pay. The sweet spot (for lowest interest and not having to pay the owners tax) is different for any mortgage but by grandparents use this method and they pay a really small amount for a rather large house.\"",
"title": ""
}
] |
fiqa
|
66d4a959b8c00e1835693ce28e6cf624
|
Setting up general ledger/tax reporting for a Real Estate Rental LLC in GnuCash
|
[
{
"docid": "10d9f9670fe70075b14cc479478ba1a2",
"text": "No, GnuCash doesn't specifically provide a partner cash basis report/function. However, GnuCash reports are fairly easy to write. If the data was readily available in your accounts it shouldn't be too hard to create a cash basis report. The account setup is so flexible, you might actually be able to create accounts for each partner, and, using standard dual-entry accounting, always debit and credit these accounts so the actual cash basis of each partner is shown and updated with every transaction. I used GnuCash for many years to manage my personal finances and those of my business (sole proprietorship). It really shines for data integrity (I never lost data), customer management (decent UI for managing multiple clients and business partners) and customer invoice generation (they look pretty). I found the user interface ugly and cumbersome. GnuCash doesn't integrate cleanly with banks in the US. It's possible to import data, but the process is very clunky and error-prone. Apparently you can make bank transactions right from GnuCash if you live in Europe. Another very important limitation of GnuCash to be aware of: only one user at a time. Period. If this is important to you, don't use GnuCash. To really use GnuCash effectively, you probably have to be an actual accountant. I studied dual-entry accounting a bit while using GnuCash. Dual-entry accounting in GnuCash is a pain in the butt. Accurately recording certain types of transactions (like stock buys/sells) requires fiddling with complicated split transactions. I agree with Mariette: hire a pro.",
"title": ""
},
{
"docid": "3f362f2a26d64930517bf1086d30cb0e",
"text": "\"You will need to set up accounts in your chart of accounts for each of the partners. These are equity accounts where you can track your contributions, share of the profits and losses, and distributions. You're going to have to go back into the beginning years to get this right. I'm not sure what you mean by a \"\"Built-in function\"\". All the accounting software I'm familiar with requires data entry of some kind. You need to post your contributions and distributions to the correct accounts, and close properly at year end. You were indeed legally considered a partnership as soon as you started a for-profit business venture together. It's a bug in the legal system that a written partnership agreement is not necessarily required - you can form a partnership unknowingly. (BTW, a partnership actually is pretty far off from a sole proprietorship, legally and taxwise - the change from one person to two is major. It's the change from two to three or four or more that's incremental ;) I know you said you didn't want to consult a professional, but I have to say that I think it's worth the money to get your books set up by someone who has experience and can show you how to do it. And get a separate bank account for the partnership, if you haven't done so already. And check with your state to see if there are any requirements regarding partnerships. Hope this helps, Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.\"",
"title": ""
}
] |
[
{
"docid": "c7eaa130ef48b436d0261060eaf23c20",
"text": "If you're audited routinely you probably have an accountant to get this straight. It's not something that I would be too worried about as it is purely journal-entry issue, there's no problem with the actual money. Mistakes happen. I'd suggest converting the currency, taking loss/gain on the conversion as a capital loss/gain, and credit the correct currency to the correct account. If GnuCash causes problems - just record it in the EUR equivalent, putting in notes the actual SGD value. Note that I'm not an accountant and this is not a professional advice.",
"title": ""
},
{
"docid": "0dde42cb2eb328499f4a02f6e692de0e",
"text": "You report each position separately. You do this on form 8949. 7 positions is nothing, it will take you 5 minutes. There's a tip on form 8949 that says this, though: For Part I (short term transactions): Note. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you are not required to report these transactions on Form 8949 (see instructions). For Part II (long term transactions): Note. You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you are not required to report these transactions on Form 8949 (see instructions). If the 1099B in your case shows basis for each transaction as reported to the IRS - you're in luck, and don't have to type them all in separately.",
"title": ""
},
{
"docid": "0ff87b4504eaa0cf33d2b696582f47ef",
"text": "\"I think the \"\"right\"\" way to approach this is for your personal books and your business's books to be completely separate. You would need to really think of them as separate things, such that rather than being disappointed that there's no \"\"cross transactions\"\" between files, you think of it as \"\"In my personal account I invested in a new business like any other investment\"\" with a transfer from your personal account to a Stock or other investment account in your company, and \"\"This business received some additional capital\"\" which one handles with a transfer (probably from Equity) to its checking account or the like. Yes, you don't get the built-in checks that you entered the same dollar amount in each, but (1) you need to reconcile your books against reality anyway occasionally, so errors should get caught, and (2) the transactions really are separate things from each entity's perspective. The main way to \"\"hack it\"\" would be to have separate top-level placeholder accounts for the business's Equity, Income, Expenses, and Assets/Liabilities. That is, your top-level accounts would be \"\"Personal Equity\"\", \"\"Business Equity\"\", \"\"Personal Income\"\", \"\"Business Income\"\", and so on. You can combine Assets and Liabilities within a single top-level account if you want, which may help you with that \"\"outlook of my business value\"\" you're looking for. (In fact, in my personal books, I have in the \"\"Current Assets\"\" account both normal things like my Checking account, but also my credit cards, because once I spend the money on my credit card I want to think of the money as being gone, since it is. Obviously this isn't \"\"standard accounting\"\" in any way, but it works well for what I use it for.) You could also just have within each \"\"normal\"\" top-level placeholder account, a placeholder account for both \"\"Personal\"\" and \"\"My Business\"\", to at least have a consistent structure. Depending on how your business is getting taxed in your jurisdiction, this may even be closer to how your taxing authorities treat things (if, for instance, the business income all goes on your personal tax return, but on a separate form). Regardless of how you set up the accounts, you can then create reports and filter them to include just that set of business accounts. I can see how just looking at the account list and transaction registers can be useful for many things, but the reporting does let you look at everything you need and handles much better when you want to look through a filter to just part of your financial picture. Once you set up the reporting (and you can report on lists of account balances, as well as transaction lists, and lots of other things), you can save them as Custom Reports, and then open them up whenever you want. You can even just leave a report tab (or several) open, and switch to it (refreshing it if needed) just like you might switch to the main Account List tab. I suspect once you got it set up and tried it for a while you'd find it quite satisfactory.\"",
"title": ""
},
{
"docid": "830ab9fb4caf0738837905aa1d8a5b57",
"text": "I generally concur with your sentiments. mint.com has 'hack me' written all over it. I know of two major open source tools for accounting: GNUCash and LedgerSMB. I use GNUCash, which comes close to meeting your needs: The 2.4 series introduced SQL DB support; mysql, postgres and sqlite are all supported. I migrated to sqlite to see how the schema looked and ran, the conclusion was that it runs fine but writing direct sql queries is probably beyond me. I may move it to postgres in the future, just so I can write some decent reports. Note that while it uses HTML for reporting, there is no no web frontend. It still requires a client, and is not multi-user safe. But it's probably about the closest to what you what that still falls under the heading of 'personal finance'. A fork of SQL Ledger, this is postgreSQL only but does have a web frontend. All the open source finance webapps I've found are designed for small to medium busineses. I believe it should meet your needs, though I've never used it. It might be overkill and difficult to use for your limited purposes though. I know one or two people in the regional LUG use LedgerSMB, but I really don't need invoicing and paystubs.",
"title": ""
},
{
"docid": "b4510cf6016c180b947eab26ae6b837c",
"text": "\"Here's a very basic MySQL query I put together that does what I want for income/expense report. Basically it reports the same info as the canned income/expense report, but limits it those income/expenses associated with a particular account (rental property, in my case). My main complaint is the output \"\"report\"\" is pretty ugly. And modifying for a different rental property requires changing the code (I could pass parameters etc). Again, the main \"\"issue\"\" in my mind with GnuCash income/expense report is that there is no filter for which account (rental property) you want income/expenses for, unless you set up account tree so that each rental property has its own defined incomes and expenses (i.e. PropertyA:Expense:Utility:electric). Hopefully someone will point me to a more elegant solution that uses the report generator built into GnuCash. THanks! SELECT a2.account_type , a4.name, a3.name, a2.name, SUM(ROUND(IF(a2.account_type='EXPENSE',- s2.value_num,ABS(s2.value_num))/s2.value_denom,2)) AS amt FROM ( SELECT s1.tx_guid FROM gnucash.accounts AS a1 INNER JOIN gnucash.splits AS s1 ON s1.account_guid = a1.guid WHERE a1.name='Property A' ) AS X INNER JOIN gnucash.splits s2 ON x.tx_guid = s2.tx_guid INNER JOIN gnucash.accounts a2 ON a2.guid=s2.account_guid INNER JOIN gnucash.transactions t ON t.guid=s2.tx_guid LEFT JOIN gnucash.accounts a3 ON a3.guid = a2.parent_guid LEFT JOIN gnucash.accounts a4 ON a4.guid = a3.parent_guid WHERE a2.name <> 'Property A' # get all the accounts associated with tx in Property A account (but not the actual Property A Bank duplicate entries. AND t.post_date BETWEEN CAST('2016-01-01' AS DATE) AND CAST('2016-12-31' AS DATE) GROUP BY a2.account_type ,a4.name, a3.name, a2.name WITH ROLLUP ; And here's the output. Hopefully someone has a better suggested approach!\"",
"title": ""
},
{
"docid": "b72c7f112014ad0f2539574456e73e5f",
"text": "\"As cryptocurrencies are rather new compared to most assets, there hasn't been a lot of specific guidance for a lot of situation, but in 2014 the IRS announced that it published guidance in Notice 2014-21. I'm not aware of further guidance that has been published beyond that, though it wouldn't surprise me if treatments changed over time. In that notice, the answer to the first question describes the general treatment: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Your specific questions (about what constitutes a \"\"business\"\", and when you're considered to be \"\"selling\"\" the cryptoproperty) are likely to be considered on a case by case basis by the IRS. As the amounts involved here are so small (relatively speaking), my recommendation would be to read through what the IRS has published carefully, make reasonable assumptions about what scenarios that are described are closest to what you're doing, and document doing so clearly as part of your tax preparations. And when in doubt, erring on the side of whichever option incurs more tax is unlikely to be objected to by them. Of course, I'm not a lawyer or tax advisor, I'm a stranger on the Internet, so for \"\"real\"\" advice you should contact somebody qualified. I doubt you'd be faulted too much for not doing so given the amounts involved. You could also attempt contacting a local IRS office or calling them with your specific questions, and they may be able to provide more specific guidance tailored to you, though doing so may not save you from an auditor deciding something differently if they were to examine your return later. There are also phone numbers to contact specific people listed at the end of Notice 2014-21; you could try calling them as well.\"",
"title": ""
},
{
"docid": "6c7494f65e738ea5645c9c5d44b7a4fd",
"text": "As DJClayworth said, be very careful with this one! The property is a residence, not a business location. Given that, it is almost a certainty that the IRS is not going to let you claim 100% of the expenses for the home as a business expense, even if nobody's actually living there. You may get away with doing this for a period of time and not run into zoning or other issues such as those DJ mentioned, but it's like begging for trouble. You run the very real risk of being audited if you try to do what you're proposing, and rest assured, whatever you saved in taxes will disappear like smoke in the wind under an audit. That being said, there's no reason you can't call a tax service and ask a simple question, because in answering it they're going to hope to gain your business. It'd be well worth the phone call before you land yourself in any hot water with the IRS. I can tell you that I'd rather have a double root canal with no anesthetic than go through an audit, even when I didn't do anything wrong! (grin) Good luck!",
"title": ""
},
{
"docid": "8de0bd6e321f81879376c5cc24885ddb",
"text": "So there are a lot of people that get into trouble in your type of self employment situation. This is what I do, and I use google drive so there are no cost for tools. However, having an accounting system is better. Getting in trouble with the IRS really sucks bad.",
"title": ""
},
{
"docid": "7f60f3491884525065cfe44ca428df27",
"text": "Gnucash uses aqbanking, so I'd suggest looking at aqbanking to see if it will do what you want. It seems to be actively developed (as of 26.2.2011), but the main page is in German and my German is a bit rusty... You might also try asking on the gnucash-users list.",
"title": ""
},
{
"docid": "b30aed3b8b3704d3ea740b6a90195a5a",
"text": "\"It comes down to the resolution you want to have on your personal finances. A package like GNUCash allows you to easily answer questions like \"\"Exactly how much do I spend on interest per month/year/decade.\"\" Same with pretty much any other expense, liability or asset you have whether it be taxes, utilities, your home equity or your net worth. The other tools you mention are nice, and certainly convenient, but they tend to lump things together in broad strokes and omit many categories altogether (taxes). Ultimately by having such a fine grained accounting tool, you can target small or large things to better budget your money. Another thing a package like GNUCash provides is a single, private place to consolidate all of your finances. This is nice for things like net worth and asset accounts that you might not want to give a company access to. Finally, GNUcash in particular helps normal people think like accountants. Rather than lump everything into 'income' and 'expenses', once you start using GNUCash you'll start thinking in terms of equity, liabilities, net-worth and assets in addition to income and expenses. This gives me a much more accurate view of my finances and helps me better target areas for improvement. In short, it helps me to see the broader picture which helps me to keep my eye on the prize - which of course is to not have to worry about money at all.\"",
"title": ""
},
{
"docid": "143191be6ef8c5e7078cf3442e298358",
"text": "\"Gnucash is much more designed for accounting than for budgeting. While it does have some simple budgeting features, they're largely based around tracking how much has been spent in the Expense categories/accounts, and seeing how close one is to a limit that's been set. Because the point of Gnucash is accounting, there's not a way to track an expense in two expense categories simultaneously. (You can split a transaction across multiple categories, to have a grocery store purchase of $150 be split across $100 Food and $50 Phone Minutes or whatever. But not have a $150 purchase be tracked as $150 Food and $150 Household expenses, because that's not how double-entry accounting works.) The closest way to do what I think you're looking for is to take advantage of the hierarchical account structure, and repeat subcategories as needed. For example: This would allow you to see Household expenses vs. Vacation expenses, and still see what it got spent on. Reporting on all \"\"Food\"\" purchases, if you want to do so, is slightly more tricky as you'd need to select all those \"\"Food\"\" categories separately in your report, but it's possible. You speak about wanting to \"\"track\"\" expenses multiple ways, so I think that this would allow you to record data sufficient to \"\"track\"\" it. But the point of tracking any data is to be able to report on it in some fashion, so if you have more specific reporting requirements, you might want to ask about that as well.\"",
"title": ""
},
{
"docid": "e60c76c4257a2b9514250cba964fb1e6",
"text": "I believe it's not only legal, but correct and required. A 1099 is how a business reports payments to others, and they're required by the IRS to send them for payments of $600 or more (for miscalleneous payments like this). The payment is an expense to the landlord and income to you, and the 1099 is how that's documented (although note that if they don't send you a 1099, it's still income to you and you still need to report it as such). It's similar to getting a 1099-INT for interest payments or a 1099-DIV for dividend payments. You'll get a 1099-MISC for a miscellaneous payment. If you were an employee they'd send you a W-2, not a 1099.",
"title": ""
},
{
"docid": "6070d55011ad661aab3a36e12c8337d9",
"text": "You will need Premier, since it is the first one to include Schedule E. Deluxe used to support Schedule E for investments, but not anymore. Most taxpayers know Schedule E as the schedule used for rentals, but you're going to need it to report your S-Corp income.",
"title": ""
},
{
"docid": "18cd8234a214ff8a7f311bcf36715bc1",
"text": "If you need to shop coins, you could do your personal improvement, however, this may be tricky because of even easy documentation errors fee extra. For many little employer proprietors, the high-quality picks the use of a business enterprise company, which is a fee-powerful preference to make sure your documentation is accurate and filed right away with conditions. If you're concerned in Delaware LLC with as little quotes as viable, begin with the aid of considering conditions wherein you'll include. You do no longer require work within the state you select, however it may be more reasonable for pick out your home circumstance.",
"title": ""
},
{
"docid": "a471c4c58c07ed7ca866cff9414c8695",
"text": "There isn't one. I haven't been very happy with anything I've tried, commercial or open source. I've used Quicken for a while and been fairly happy with the user experience, but I hate the idea of their sunset policy (forced upgrades) and using proprietary format for the data files. Note that I wouldn't mind using proprietary and/or commercial software if it used a format that allowed me to easily migrate to another application. And no, QIF/OFX/CSV doesn't count. What I've found works well for me is to use Mint.com for pulling transactions from my accounts and categorizing them. I then export the transaction history as a CSV file and convert it to QIF/OFX using csv2ofx, and then import the resulting file into GNUCash. The hardest part is using categories (Mint.com) and accounts (GnuCash) properly. Not perfect by any means, but certainly better than manually exporting transactions from each account.",
"title": ""
}
] |
fiqa
|
4e792fb9ac6a5d59c8faeb8be1276859
|
Company Payment Card
|
[
{
"docid": "71a0b8631383a8b1177ba145a64901c7",
"text": "Most corporate policies strictly prohibit the card's use for personal use, even if the intent is to re-pay in full, on or before the due date. I'm certain it has something to do with limitation of liability, i.e. the monetary risk the company is willing to put itself at, in order to offer a corporate card program. In my experience, AMEX Corporate Card Services is the most widely-used card, and in my experience, it is your employer that determines and administers the policy that outlines the card's appropriate use, not the credit card provider, so you're best to check with your employer for a definitive answer to this.",
"title": ""
},
{
"docid": "c53a1dead1e7fc28b23094d02ad9c18a",
"text": "From the other point of view (company use) it makes sense to segregate expenses incurred on the company's behalf away from an employee's personal expenses. This way if there were any requirement to prove that certain expenses were for the company's benefit it is not intermingled with an employee's personal expenses. From an ethical point of view: To avoid these types of confusing and conflicting issues, most employer's prefer to have a segregated expense process especially if an employee is regularly incurring expenses on the company's behalf. As YMCbuzz mentions you should check with your employer about their expense policy.",
"title": ""
}
] |
[
{
"docid": "c067b0a743d2aaf8960e75893f99eff0",
"text": "Each company that has an account with the credit card network has to classify themselves as a particular type of business. The credit card company uses that classification to catagorize the transaction on your statement. If you buy a T-shirt at a grocery, amusement park, gas station, or resturant; the transaction will be labeled by the vendor type. Look at recent credit card statements, even if they are from different cards, to see how the stores you want to know about are classified.",
"title": ""
},
{
"docid": "4e18a3c6cbff373b8ab0f583250150a6",
"text": "A friend of mine has two credit cards. He has specifically arranged with the card issuers so that the billing cycles are 15 days out of sync. He uses whichever card has more recently ended its billing cycle, which gives him the longest possible time between purchase and the due date to avoid interest.",
"title": ""
},
{
"docid": "46bd1ed7df2299f00ab2e57933a92d05",
"text": "I'm a little confused -- you stated you're an accountant and that they are given a card, but in your reply, you are guessing and referring to other accountants instead of talking about your experience. Have you had any clients with the JPM Palladium, Centurion, Stratus, Coutts or First Royale cards? I know for a fact that 1% doesn't max out on Centurion (an individual purchased $170 million art at an auction and paid with his Centurion, earning him 170 million miles -- a lifetime of free travel)",
"title": ""
},
{
"docid": "9e22049906826ea1d22611ec64c0d087",
"text": "Permanent employees are the distinct opposite of contractors. Upwork can easily have business entities (limited liability company equivalents) in multiple countries, and it can make payments between them. Or they can merely use existing payment infrastructure (paypal, amazon) to accomplish the same thing. Their corporate structure is a red herring and most likely unrelated to what they've accomplished.",
"title": ""
},
{
"docid": "752daecc1ea9eac372dfd2a26e756c88",
"text": "I would try to avoid mixing business expenditure with personal expenditure so a second credit card might be a good idea. That said, I did get a business credit card for my company in the UK as I didn't want to be personally liable for the money that was spent on the business card (even though I owned 100% of the business) in case things went horribly wrong. As I didn't fancy signing a personal guarantee, this meant that the limit was quite low but it was good enough in most cases.",
"title": ""
},
{
"docid": "27bec497641aba62dca43f9539efbc33",
"text": "Recommend using quickbooks for account management. If you use the manufacturing and wholesale you can track POs from vendors, estimates, bill payment quotes and invoicing (there's an editor to customize your set up)Also, most accountants are very familiar with this platform so come tax time they'll be able to give you a hand no problem. For accepting payments I highly suggest asking for checks. If you do accept credit cards keep in mind most payment processors charge a percent (1.5-3%) depending on transaction amounts and quantities of transactions. So you'll want to mark up your products by at least that amount. Another area is sales tax. Since you are not the end user you should be able to avoid sales tax on the items you will be selling to customers. You then charge the customer this sales tax. Not sure about NJ but in Texas we are 8.25%. I then pay the state of Texas the taxes collected quarterly. Edit: also make sure you have separate finances for the LLC. Separate checking, separate credit card, separate everything! If you end up using an account that is tied to you personally then you run into the risk of losing the protective nature of an LLC from a legal standpoint. Edit2: by separate I mean using your IRS issued EIN number to open accounts with the LLC name. When you sign anything on behalf of the company make sure to add the name of the company next to it to show the company is making the signature not you. For instance u/sexlessnights Company name, LLC",
"title": ""
},
{
"docid": "e1d4a964cd3d92ab2f64480a644b9111",
"text": "\"The term for money owed to you by a company would be a credit balance. Consider, when an item is credited to your account, it's in your favor. Whereas, money you owe to a company may be referred to simply as a balance, or balance owing, or less frequently a debit balance. A related term balance due would be the payment you owe in the current period, i.e. not representative of the entire amount owed. I don't think the terms \"\"positive balance\"\" or \"\"negative balance\"\" are considered idiomatic in business. Rather, accounting terms like debit and credit have taken hold instead – and are often a source of confusion. But I suggest that if you have a negative balance on a credit card, it's a credit balance in your favor. Unless they mix it up.\"",
"title": ""
},
{
"docid": "dbb4222a10017eda7d851caf3cb7233a",
"text": "\"Even worse: many more times, companies will go through an $8 million project to fix an \"\"issue\"\" that costs $20. Just 2 examples from my company: 1. A big project to automate the entry of 2 invoices per month from a supplier. Is would take an employee less than 10 minutes a month to enter those 2 invoices manually into the system. 2. A big project to provide a website for employees to buy the company's products (\"\"employee sales\"\"). I showed that on average, less than 1 order is placed per day, except December when the company has extra discounts, and then there are 3 sales a day. My solution: offer a coupon for employees to buy the same products on the existing B2C site. P/S: Yes, I did the 1st project. Why would I complain and point out the obvious? Those silly projects are more than a job security for me. I would probably even get a prize for \"\"job well done!\"\".\"",
"title": ""
},
{
"docid": "6f04c572febf901d91fa7fbf164c5f1f",
"text": "Your chief problem seems to be that you're mixing Visa (credit cards) and Step2 (a European Automated Clearing House). Credit cards are primarily an American concept, but do work worldwide especially in travel&tourism industry. The Credit Card companies are financial institutions themselves and operate similar to international banks They're typically acting as intermediaries between the customer's bank and the retailer's bank, so this works even if those two banks have no existing agreements. This is expensive, though. Step2 is a cheaper European system which eliminates the middle man. It allows the consumer's bank to directly pay the retailer's bank. VISA is not a member of Step2.",
"title": ""
},
{
"docid": "28474d1ea5dcfb7bad11f4800154c06d",
"text": "for starters get a cheap easy accounting software pack like quickbooks and have the salesmen train you on it's use and set-up. the 50k you put into the company will count as paid up share capital. then any future withdrawal from company account will show as loan to director.",
"title": ""
},
{
"docid": "42aeba15aa13ed69c349cf669b430e62",
"text": "\"Im currently working on the line for a major multinational. They regularly take feedback from us for improvements, and in India, one of those suggestions increased direct sales by (reportedly) over 50%. That suggestion? Put a label on card readers that said \"\"(company name) Authorized Card Reader\"\". It cost the company less than $10, and now brings in millions per year.\"",
"title": ""
},
{
"docid": "2c682ef5283bb51dbcdf86854fba99e8",
"text": "Yes, but note that some credit card companies let you create virtual cards--you can define how much money is on them and how long they last. If you're worried about a site you can use such a card to make the payment, then get rid of the virtual number so nobody can do dirty deeds with it. In practice, however, companies that do this are going to get stomped on hard by the credit card companies--other than outright scams it basically does not happen. (Hacking is another matter--just pick up the newspaper. It's not exactly unusual to read of hackers getting access to credit card information that they weren't supposed to have access to in the first place.) So long as you deal with a company that's been around for a while the risk is trivial.",
"title": ""
},
{
"docid": "3c4999c3b65b141f9eacb8703aee109c",
"text": "Bigger than the three mentioned above is on-time payment and/or collections activity. If your report shows you have not paid accounts on time, or have accounts in collections, that is almost guaranteed decline except for the least desirable cards. Another factor is number of hard inquiries. If you have been on a recent application spree, you will get declined for too many recent inquiries. Wait 12-18 months for the inquiries to roll off your report. Applications for business cards are a little tricky depending on whether you are applying as an individual or as an employee of a corporation. I usually stay away from these as you can be liable for company debts you did not charge under the right circumstances.",
"title": ""
},
{
"docid": "e05ba5060c8505bef6a7125afc98bf91",
"text": "\"It's not abnormal for a company that is as young as yours seems to be. It seems (based on what little I know), that you have debts, or accounts payable that were formerly covered by the $200 cash, but now aren't, because you paid it to yourself. For now, you're \"\"entitled\"\" to pay yourself a draw or a salary. But if you continue to do so without earning money to cover it, your company will fail.\"",
"title": ""
},
{
"docid": "2fd3ef520f888eb52e2ba21fe24b10c5",
"text": "Usually payments are applied towards:",
"title": ""
}
] |
fiqa
|
abf724c0e3464511f54e4608f0c70512
|
US Foreign-Owned LLC that owes no income tax - Do I have to file anything?
|
[
{
"docid": "ddc4567aaa01aa91837cb7c8690619ea",
"text": "\"If you intend to do business \"\"outside the country\"\", why establish an LLC \"\"here\"\" at all? You should establish a business in your home country if you desire business organization for sequestering liabilities or something. With or without a business organization, you will presumably be taxed for domestic income \"\"there\"\", wherever that is.\"",
"title": ""
}
] |
[
{
"docid": "d8b09ee2638ceb7294e3fcb01aaeee55",
"text": "I realize this is a stale topic, but to anybody who may swing by looking for an answer to this question (on the recently revised W-8BEN), a foreign taxpayer can get an individual taxpayer identification number (ITIN) without being resident in the US. However, an ITIN will often not be necessary for W-8BEN purposes if you have a tax number from your local jurisdiction. Check the Form W-8BEN instructions for your specific situation, but some taxpayers will need neither a US-issued ITIN nor a foreign-issued TIN. Forming a Delaware or Nevada LLC would be expensive and generally subject to federal and state tax and filing obligations. It would also moot the need for a W-8BEN, which only applies to foreign taxpayers; the equivalent form for domestic taxpayers is Form W-9.",
"title": ""
},
{
"docid": "d402dc885d5d6ef6afda8b49de969880",
"text": "You're doing business in the US and derive income from the US, so I'd say that yes, you should file a non-resident tax return in the US. And in Connecticut, as well, since that's where you're conducting business (via your domestic LLC registered there). Since you paid more than $600 to your contractor, you're probably also supposed to send a 1099 to him on that account on behalf of your LLC (which is you, essentially, if you're the only member).",
"title": ""
},
{
"docid": "e4a96168ebf9048f2eaba2e0c6ff53fc",
"text": "\"As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question \"\"Does a US LLC owned by a non-resident alien have to pay US taxes\"\" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice.\"",
"title": ""
},
{
"docid": "9ef174b33606cc48292303fe2a920126",
"text": "This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years.",
"title": ""
},
{
"docid": "54f174f29e2d2d7d644ab1b8ced2a5f7",
"text": "Form 10-K is filed by corporations to SEC. You must be thinking of form 1065 (its schedule K) that a partnership (and multi-member LLC) must file with the IRS. Unless the multi-member LLC is legally dissolved, it must file this form. You're a member, so it is your responsibility, with all the other members, to make sure that the manager files all the forms, and if the manager doesn't - fire the manager and appoint another one (or, if its member managed - chose a different member to manage). If you're a sole member of the LLC - then you don't need to file any forms with the IRS, all the business expenses and credits are done on your Schedule C, as if you were a sole propriator.",
"title": ""
},
{
"docid": "21f92446dfd048a11ba3713e97294bf3",
"text": "\"No, there are no issues. When you form the corp in DE, you pick a business there to serve as your \"\"agent\"\" (essentially someone who knows to get in contact with you). The \"\"agent\"\" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct).\"",
"title": ""
},
{
"docid": "8f085e2fe7f632284bbea9f6955ebc0e",
"text": "If it is a sole proprietorship and you didn't make another mistake by explicitly asking the IRS to treat it as a corporation - there are no IRS forms to fill. You'll need to dissolve the LLC with your State, though, check the State's department of State/Corporations (depending on the State, the names of the departments dealing with business entities vary).",
"title": ""
},
{
"docid": "6448d72794b93dcc59f4c095e6589e8a",
"text": "One other consideration. If you are a US citizen or Resident Alien, you are going to owe US income taxes regardless of where you earn the money. Here it is straight from the horse's mouth: Tax guide for US Citizens living abroad",
"title": ""
},
{
"docid": "6848e7ec4c1f2dd2f1436826fa588d0b",
"text": "I'll start with the bottom line. Below the line I'll address the specific issues. Becoming a US tax resident is a very serious decision, that has significant consequences for any non-American with >$0 in assets. When it involves cross-border business interests, it becomes even more significant. Especially if Switzerland is involved. The US has driven at least one iconic Swiss financial institution out of business for sheltering US tax residents from the IRS/FinCEN. So in a nutshell, you need to learn and be afraid of the following abbreviations: and many more. The best thing for you would be to find a good US tax adviser (there are several large US tax firms in the UK handling the US expats there, go to one of those) and get a proper assessment of all your risks and get a proper advice. You can get burnt really hard if you don't prepare and plan properly. Now here's that bottom line. Q) Will I have to submit the accounts for the Swiss Business even though Im not on the payroll - and the business makes hardly any profit each year. I can of course get our accounts each year - BUT - they will be in Swiss German! That's actually not a trivial question. Depending on the ownership structure and your legal status within the company, all the company's bank accounts may be reportable on FBAR (see link above). You may also be required to file form 5471. Q) Will I need to have this translated!? Is there any format/procedure to this!? Will it have to be translated by my Swiss accountants? - and if so - which parts of the documentation need to be translated!? All US forms are in English. If you're required to provide supporting documentation (during audit, or if the form instructions require it with filing) - you'll need to translate it, and have the translation certified. Depending on what you need, your accountant will guide you. I was told that if I sell the business (and property) after I aquire a greencard - that I will be liable to 15% tax of the profit I'd made. Q) Is this correct!? No. You will be liable to pay income tax. The rate of the tax depends on the kind of property and the period you held it for. It may be 15%, it may be 39%. Depends on a lot of factors. It may also be 0%, in some cases. I also understand that any tax paid (on selling) in Switzerland will be deducted from the 15%!? May be. May be not. What you're talking about is called Foreign Tax Credit. The rules for calculating the credit are not exactly trivial, and from my personal experience - you can most definitely end up being paying tax in both the US and Switzerland without the ability to utilize the credit in full. Again, talk to your tax adviser ahead of time to plan things in the most optimal way for you. I will effectively have ALL the paperwork for this - as we'll need to do the same in Switzerland. But again, it will be in Swiss German. Q) Would this be a problem if its presented in Swiss German!? Of course. If you need to present it (again, most likely only in case of audit), you'll have to have a translation. Translating stuff is not a problem, usually costs $5-$20 per page, depending on complexity. Unless a lot of money involved, I doubt you'll need to translate more than balance sheet/bank statement. I know this is a very unique set of questions, so if you can shed any light on the matter, it would be greatly appreciated. Not unique at all. You're not the first and not the last to emigrate to the US. However, you need to understand that the issue is very complex. Taxes are complex everywhere, but especially so in the US. I suggest you not do anything before talking to a US-licensed CPA/EA whose practice is to work with the EU/UK expats to the US or US expats to the UK/EU.",
"title": ""
},
{
"docid": "b785bcf974c97d43b0f71c871e9a9f2a",
"text": "No, even businesses pay taxes quarterly. So if you formed Nathan, LLC, or otherwise became self employed, you'd still have to file quarterly estimates and make tax payments. This would cause taxes to be a much more high touch part of your life. However, you should ensure that you're claiming the proper exemptions etc to avoid excessive withholding.",
"title": ""
},
{
"docid": "7c2718faab7ee5008d2257c0669ca216",
"text": "\"I'm assuming that by saying \"\"I'm a US resident now\"\" you're referring to the residency determination for tax purposes. Should I file a return in the US even though there is no income here ? Yes. US taxes its residents for tax purposes (which is not the same as residents for immigration or other purposes) on worldwide income. If yes, do I get credits for the taxes I paid in India. What form would I need to submit for the same ? I am assuming this form has to be issued by IT Dept in India or the employer in India ? The IRS doesn't require you to submit your Indian tax return with your US tax return, however they may ask for it later if your US tax return comes under examination. Generally, you claim foreign tax credits using form 1116 attached to your tax return. Specifically for India there may also be some clause in the Indo-US tax treaty that might be relevant to you. Treaty claims are made using form 8833 attached to your tax return, and I suggest having a professional (EA/CPA licensed in your State) prepare such a return. Although no stock transactions were done last year, should I still declare the value of total stocks I own ? If so what is an approx. tax rate or the maximum tax rate. Yes, this is done using form 8938 attached to your tax return and also form 114 (FBAR) filed separately with FinCEN. Pay attention: the forms are very similar with regard to the information you provide on them, but they go to different agencies and have different filing requirements and penalties for non-compliance. As to tax rates - that depends on the types of stocks and how you decide to treat them. Generally, the tax rate for PFIC is very high, so that if any of your stocks are classified as PFIC - you'd better talk to a professional tax adviser (EA/CPA licensed in your State) about how to deal with them. Non-PFIC stocks are dealt with the same as if they were in the US, unless you match certain criteria described in the instructions to form 5471 (then a different set of rules apply, talk to a licensed tax adviser). I will be transferring most of my stock to my father this year, will this need to be declared ? Yes, using form 709. Gift tax may be due. Talk to a licensed tax adviser (EA/CPA licensed in your State). I have an apartment in India this year, will this need to be declared or only when I sell the same later on ? If there's no income from it - then no (assuming you own it directly in your own name, for indirect ownership - yes, you do), but when you sell you will have to declare the sale and pay tax on the gains. Again, treaty may come into play, talk to a tax adviser. Also, be aware of Section 121 exclusion which may make it more beneficial for you to sell earlier.\"",
"title": ""
},
{
"docid": "f32db279288b5726c22159492891b6d4",
"text": "\"Since as you say, an LLC is a pass-through entity, you will be making income in the U.S. when you sell to U.S. customers. And so you will need to file the appropriate personal tax forms in the US. As well as potentially in one or more States. The US government does not register LLCs. The various States do. So you'll be dealing with Oregon, Wisconsin, Wyoming, one of those for the LLC registration. You will also need to have a registered agent in the State. That is a big deal since the entire point of forming an LLC is to add a liability shield. You would lose the liability shield by not maintaining the business formalities. Generally nations aim to tax income made in their nation, and many decline to tax income that you've already paid taxes on in another nation. A key exception: If money is taxed by the U.S. it may also be taxed by one of the States. Two States won't tax the same dollar. Registering an LLC in one State does not mean you'll pay state taxes there. Generally States tax income made in their State. It's common to have a Wyoming LLC that never pays a penny of tax in Wyoming. Officially, an LLC doing business in a State it did not form in, must register in that State as a \"\"foreign LLC\"\" even though it's still in the USA. The fee is usually the same as for a domestic LLC. \"\"Doing business\"\" means something more than incidental sales, it means having a presence specifically in the State somehow. It gets complicated quick. If you are thinking of working in someone's app ecosystem like the Apple Store, Google Play, Steam etc. Obviously they want their developers coding, not wrestling with legalities, so some of them make a priority out of clearing and simplifying legal nuisances for you. Find out what they do for you.\"",
"title": ""
},
{
"docid": "4a9011e433785e61732b017579a786a1",
"text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward.",
"title": ""
},
{
"docid": "cecc860897423d6c529366fcac3bc914",
"text": "\"You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case. Be careful of answers like \"\"you don't need to pay anything\"\" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing \"\"business filed taxes\"\" with \"\"I filed schedule C\"\") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future.\"",
"title": ""
},
{
"docid": "b99725932ea29bc40671448a4319ab71",
"text": "IANAL, I am married to someone in your situation. As a US citizen age 26 who has not had any contact with the IRS, you should most definitely be worried... As a US citizen, you are (and always have been) required to file a US tax return and pay any tax on all income, no matter where earned, and no matter where you reside. There are often (but not always) agreements between governments to reduce double taxation. The US rule as to whether a particular type of income is taxable will prevail. As a US citizen with financial accounts (chequing, saving, investment, etc.) above a minimum balance, abroad, you are required to report information, including the amounts in the account, to the US government annually (Look up FBAR). Failure to file these forms carries harsh penalties. A recent law (FATCA) requires foreign financial institutions to report information on their US citizen clients to the US, irrespective of any local banking privacy laws. It's possible that your application triggered these reporting requirements. You will not be allowed to renounce your US citizenship until you have paid all past US taxes and penalties. Good new: you are eligible in ten years or so to run for President. Don't believe any of this, or that nothing has been missed; you must consult with a local tax expert specializing in US/UK tax laws.",
"title": ""
}
] |
fiqa
|
52052958fbad7566ee7853d334a54ff7
|
Friend was brainwashed by MLM-/ponzi investment scam. What can I do?
|
[
{
"docid": "288d276228f14c790a00ed38f2cbcab0",
"text": "Go to the police. This is fraud and is illegal. Sure, this will hurt your friend but better now then when he starts abusing of his position to fraud even more people... Original comment by Bakuriu sorry for not giving credit",
"title": ""
},
{
"docid": "5b93a0cb7b43428d2589f99299d68934",
"text": "\"If this is your friend, and he that convinced he will \"\"get rich\"\" from this then there's really nothing you CAN do. You've obviously done your best to explain the situation to him, but he's been caught up in their sales pitch, and that's more convincing to him. I worked in sales for many years, and the answers he gives you (the one about not needing to know the details of how your smartphone works is a classic variation of typical objection-handling that salespeople are taught) proves that he has been sucked in by their scheme. At this stage, all you're going to do is ruin your friendship with him if you continue to press the matter, because he has made it clear he can't be convinced that this is anything other than legitimate. The reality is, he is probably in too deep at this stage to just walk away from it, so he has to convince himself that he made a wise choice. Schemes like this use a \"\"scarcity\"\" approach (there's only so much to go around, and if you don't get yours now then someone else will get it) coupled with ego-boosting (boy, Mr. Prospect, this is such a great opportunity, and you're one of only a few who are sophisticated enough to understand and take advantage of it) to get people to lower their guard and not ask a whole lot of probing questions. Nobody wants to feel stupid, and they don't want others to think they're stupid, so these schemes will present the information in such a way that ordinarily prudent questions come across as sounding dumb, making the questioner seem not so smart. Rather than walking away from it, peoples' pride will sometimes make them double down on it, and they'll just go along with it to come across as though they get it, even when they really don't. The small payouts at early stages are a classic sign of a Ponzi scheme. Your friend will never listen to you as long as those little checks continue to come in, because to him they're absolute proof he's right and you're wrong. It's those checks (or payouts, however they're doing it) that will make him step up his efforts to recruit other people into the scheme or, worse yet, invest more of his own money into this. Keep in mind that in the end, you really have no power to do anything in this situation other than be his friend and try to use gentle persuasion. He's already made it clear that he isn't going to listen to your explanations about why this is a scam, for a couple reasons. First (and probably greatest), it would be an admission that he's dumb, or at least not as smart as you, and who wants that? Second, he continues to get little checks that reinforce the fact this must be \"\"real\"\", or why else would he be getting this money? Third, he has already demonstrated his commitment to this by quitting his job, so from his point of view, this has become an all-or-nothing ticket to wealth. The bottom line is, these schemes work because the sales pitch is powerful enough to overcome ordinary logic for people who think there just has to be an easy way to Easy Street. All you can do is just be there as his friend and hope that he sees the light before the damage (to himself and anyone else) gets too great. You can't stop him from what he's doing any more than you can stop the sun from rising as long the message (and checks) he's getting from other people keep him convinced he's on the right path. EDIT After reading the comments posted in this thread, I do want to amend my statements, because many good points have been raised here. You obviously can't just sit by and do nothing while your friend talks others into taking the same (or worse) risks that he is. That's not morally right by any measure At the same time however, be VERY careful about how you go about this. Your friend, as you stated, sounds pretty much like he's all in with this scheme, so there's definitely going to be some serious emotional commitment to it on his part as well. Anyone and everything that threatens what he sees as his ticket to Easy Street could easily become a target when this all comes crashing down, as it inevitably will. You could very well be the cause of that in his eyes, especially if he knows you've been discouraging people from buying into this nightmare. People are NOT rational creatures when it comes to money losses. It's called \"\"sunken costs\"\", where they'll continue to chase their losses on the rationale they'll make up for it if they just don't give up. The more your friend committed to this, the worse his anxieties about losing, so he'll do whatever he has to in order to save his position. This is what gamblers do and why the house does so well for itself. Some have suggested making anonymous flyers or other means of communicating that don't expose you as the person spreading the message, and that's one suggestion. However, the problem with this is that since the receiver has no idea who sent the message, they're not likely to give it the kind of credibility or notice that they would to something passed to them by a person they know and trust, and your anonymous message will have little weight in the face of the persuasive pitch that got your friend to commit his own money (and future). Another problem, as you've noted, is that you don't travel in the same circles as the people he's likely to recruit, so how would you go about warning them? How would they view their first contact with you when it comes with a message not to trust what someone else they already know is about to tell them? Would they write it off as someone who's butty? Hard to tell. Another huge ploy of these schemes is that they tend to preemptively strike at what you propose doing -- that is, warning people to stay away. They do this by projecting the people giving the warnings as losers who didn't see the opportunity for themselves and now want to keep others away from their own financial success. They'll portray you as someone who isn't smart enough to see this \"\"huge opportunity\"\", and since you can't understand it, you don't think anyone else does either. They'll point out that if you were so good with finances, why aren't you already successful? These guys are very good, and they have an answer for every objection you can raise, whether its to them or to someone else. They've spent a long time honing their message, which makes it difficult for anyone to say something persuasive enough to sway others away from being duped. This is a hard path, no doubt. I hope you are able to warn others away. Just be aware that it may come at a cost to you as well, and be prepared for what that might be. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "138650c4890cb9a76d2737a5d6ab1288",
"text": "\"I will disagree with some of the other answers here. In my view, the most important dimension of the situation is not your friend's potential loss but the potential losses of the people he may convince by using his position as youth group leader, etc., to draw more them into the scam. Exactly how to handle this depends on many factors that aren't mentioned in your question (and probably rightly so, as this aspect of the situation moves beyond personal finance). For instance, if your friend is a \"\"pillar of the community\"\" who is widely trusted, and you are not, there may be little you can do, since people will believe him and not you. If you have some influence over the groups he is trying to recruit, you can attempt to provide a counterweight to his recruitment activities. Again, how to do this depends on other factors, such as how he is recruiting them. If he is just privately contacting individuals and inviting them to these meetings, you may have to just keep your eyes peeled for anyone who seems tempted and try to dissuade them before they suffer the \"\"brainwashing\"\". If he actually tries to do some sort of public recruitment (e.g., holding a meeting himself), you could try to inject doubt by, e.g., attending and asking probing questions to expose the dangers. If you think the danger is widespread, you could consider taking some more public action, like writing a column in a local paper about this organization. Of course, another major factor is how much you think people stand to lose by this. However, in your question you indicated that your friend has invested \"\"multiple month or years of income\"\". If he intends to pressure others to invest similar amounts, this sounds to me like enough danger to warrant some preventive action. Few people can afford to lose months or years of income, and sadly those most vulnerable to a scammer's siren song are often those who can least afford it. It doesn't sound like a situation where you'd have to devote your life to the cause of stopping it, but if I knew that dozens of people in my community stood to lose years of income, I'd want to make at least a small effort to stop them, rather than just keep my mouth shut. In doing this, you may lose your friendship. However, you stated that your goal is to resolve the situation in a way that is \"\"best with lowest loss of money for everybody\"\". If you really take this utilitarian view, it is likely that you may have to give up on the friendship to prevent other people from losing more money.\"",
"title": ""
},
{
"docid": "7bdff9ed0ed8e5a4578c05b5668c99b8",
"text": "\"Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away. What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but \"\"No one would listen.\"\" In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called \"\"Money Merge Account.\"\" It claimed to help you pay off your mortgage in a fraction of the time \"\"with no change to your budget.\"\" For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as \"\"Worth Unlimited,\"\" but the software is the same. This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find. People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different.\"",
"title": ""
},
{
"docid": "dc94e748641fbea1f9ec537de1b992ba",
"text": "\"First, there are MLM businesses that are legitimate and are not Ponzi schemes; I actually work with one (I will not name it lest I give the impression of trying to sell here). One thing I learned was how to respond when a prospect raises objections related to the actual scams, which are abundant; the answer being to point out, and you mentioned this yourself, that in an illegitimate scheme, there is no actual product being offered - the only thing money is ever spent on is the expectation of a future profit. Ask your friend, \"\"Would you buy the product this company sells, at the price they ask, if there were not a financial opportunity attached to it?\"\" If not, \"\"How can you expect anyone else to buy it from you?\"\" There are only 3 ways he can respond to this question: he can realize that you're right and get out now; he can change the subject to the concept of making money by climbing the ranks and earning off of a salesforce, in which case it's time to educate him on Ponzi; or he can claim to be able to sell something he doesn't believe in, in which case you should run fat, far away. If he does indicate that he would be a customer even without the chance to sell the product, then offer him the chance to prove it, by giving you one sales pitch on the condition that he is not allowed to breathe a word about joining the business. Do him the courtesy of listening with an open mind, and decide for yourself whether you could ever be a customer. If the possibility exists, even if not today, he has found one of the few legitimate MLM companies, and you should not try to stop him. If not, you'll have to determine whether it's because the product just isn't for you, or because it's inherently worthless, and whether you should encourage or discourage your friend going forward.\"",
"title": ""
},
{
"docid": "0bc1ec1dffc69de084d9bb843f03b221",
"text": "\"So here's the sad truth. He might actually be making a return on his investment. Not because it's right or because the system works, but in all these schemes there are a range of people that actually do make money. In addition to that, there is that fact that he \"\"believes\"\" that he is doing a good thing, and is unwilling to discuss it. So, if he is making, even a tiny return, and really believes that he is making a large return, or that that large return is just around the bend, your never going to convince him otherwise. You have two real options; If he will listen, go though and look at money in v.s. money out. If money out is larger then money in, your screwed. Make sure to point out that he should look at real money in (left a bank account) and real money out (deposited to a bank account). Again be prepared for the fact that he is actually making money. Some people in the pyramid will make money, it's just never as much, or as many people as they make it out to be. Don't attack the system, attack other aspects. Try and argue liquidity, or FDIC insurance. Again not trying to show why the system is bad, but why a investment in foo instead may be better. If nothing else, go with diversify. Never put all your money in one spot, even if it's a really good spot. At least in that case he will have some money left over in the end. That said, your friend may not go for it. May just put on blinders, and may just stick finger in ears. Move to option two. Respect his wishes, and set boundaries. \"\"Ok, I hear you, you like system X, I won't bring it up again. Do me a favor, don't you bring it up again either. Let's just leave this with religion and politics.\"\" If he continues to bring it up, then when he does, just point out you agreed not to discuss the issue, and if he continues to push it, rethink your friendship. If you both respect one another, you should be able to respect each others' decisions. If you can't then, sadly, you may need to stop spending time with one another.\"",
"title": ""
},
{
"docid": "a7164feb9ee4f3426bd83df83e9784f9",
"text": "I believe the only thing you haven't mentioned to him is the possibility that his activity is criminally fraudulent. I would sit him down, and say something substantially similar to the following: We've talked about your investment before, and I know you believe it's fine. I just want to make sure you understand that this is very likely fraudulent activity. I know you believe in it, but you've said you don't understand how or why it works. The problem with that is that if it is a fraud you can't protect yourself from criminal prosecution because you didn't understand what you were doing. The prosecutor will ask you if you asked others to give you or the organization money, and then they will convict you based on trying to defraud others. It doesn't matter whether you did it on purpose, or just because you believed the people you are investing in. So I very strongly advise you to understand exactly what the system is, and how it works, and then make sure with a lawyer that it's legal. If it is, then hey, you've learned something valuable. But if it's not, then you will save yourself a whole lot of trouble and anguish down the road if you step away before someone you attract to the investment decides to talk to their accountant or lawyer. A civil lawsuit may be bad, but if you're criminally prosecuted it will be so much worse. Now that I've said my piece, I won't talk to you about it anymore or bother you about it. I wish you luck, and hope that things work out fine. I wouldn't talk to the police or suggest that I'd do anything of that nature, without proof then there's no real way to start an investigation anyway, and unfortunately scams like this are incredibly hard to investigate, so the police often spend little to no time on them without a high level insider giving up evidence and associates. Chances are good nothing would happen to your friend - one day the organization will disappear and he won't recover any more money - but there's a distinct possibility that when that happens, the people below him will come for him, and he won't be able to look further up the chain for help. Perhaps the threat of illegal activity will be enough to prevent him from defrauding others, but if not I think at least you can let it go, and know that you've done everything for him that might work.",
"title": ""
},
{
"docid": "f606940b8bf3f1e2be77666f0e26ffe5",
"text": "The title of your question basically asks: What can I do? And you state this regarding the meeting and “advice” they gave towards criticism of their method: While this they also indoctrinated that you should avoid talking to people talking bad about it (or say it is scam) because you gain no money from them and they just want to destroy your business. First, you really cannot do anything to “save” your friend if they have bought this nonsense. You are right, it’s a scam. But past stating as such to your friend, there is not much you can do past shielding yourself. The reality is this: Any scenario you are in where you cannot ask basic questions and get a reasonable response or are given—at least—the option to walk away unscathed or uninsulated is basically a cult-like mentality. Simple as that. If the first thing someone tells you is “Don’t listen to others, just listen to me…” then you need to excuse yourself to go to the bathroom or something and just leave. From my personal experience meeting people who are successful and have power, they always—and I mean always—ask questions and are critical of things they invest in… Whether that investment is time, money or just basic mental energy. Rich people are just like you and me! Except they have more money so they can take bigger risks. Critical thinking and the ability to walk away from something are key life skills. Now others have talked salesman psychology which is on point. But here is something else you brought up in your question: He also wants to use his position as respected member of multiple local youth and other communities to get their members as referals or in his words “…to give them the oppurtunity to also simply earn money.” Okay, so you can set personal boundaries between you and this clown, but you cannot stop him. But if he plans on targeting people and organizations in your community, you can warn them about him and his behavior and this scam. Chances are other people will know right away it’s a scam, but honestly if you feel the need to help others, that’s the most reasonable thing you can do to help them. But whatever you do, don’t take any of this emotional crap personally. If anything, maybe you can learn some reverse salesman techniques to get this “friend” to disengage. Such as only meeting with them in public and if they say something really vile to you, repeating what they said back to them as a question… Maybe even louder so everyone can hear. Remember a harsh reality of life: Public shaming can work to change someone’s behavior but you never want to do something like that unless you have utterly no choice. That last bit of advice is pretty harsh, but the reality is at some point you need to do something to “smack” reality into the situation.",
"title": ""
},
{
"docid": "3cbe5453859af2169916484557119e0e",
"text": "As others have stated, it will be very difficult for you to turn your friend around. He has already demonstrated great commitment. What can I do? There may be other people (perhaps mutual friends of you and this man) who are in danger. He may try to get them into this (as he apparently tried to with you). If this was me, I would try to warn the mutual friends of me and him. It's easier to get to them before they have been exposed to the brainwashing. So I would: Yes, I realize this means you're going behind his back, talking to his friends, etc. But I believe these people also deserve to be warned. They are in danger of being adversely affected by what he is doing.",
"title": ""
},
{
"docid": "dec1ba6f3dd47b30b895677f50e5cfc8",
"text": "Chances are high your friend isn't in it for the money, but the community or some vague dream of having a future income-generating side business because he can't get a loan for a 7-11 franchise. I run a few successful online businesses and had an import/export so naturally I run into these guys looking for advice on selling their MLM wares easier. I always point out they can make a lot of money cutting out the middle man MLM distributor and buy the same products from eBay or the same local supplier the MLM uses for a fraction of costs...then collect all the profit sans kickbacks to their host MLM goon/sponsor/father. I've never had anyone that bailed on the MLM, but I could see their eyes gloss over after they realized their own middle man is holding them back from making a lot of money (assuming they could offload that stuff). People actually in it for the money tend to bail (better sales job exist, MLM dreams don't pay rent, etc.) so you'll probably just need to isolate your friend from these losers somehow. You could investigate his sponsor and find out how much money he's actually making....if he tells your friend he's rich, but you find out he lives in the slums with his mom, your friend might bail on friendship/association with the group out of sheer disgust. It's the friends, not the logic you need to attack. His MLM friends would consider it a betrayal if he left them so you need to show him it's the MLM group that's betrayed his friendship. Point out all the long-term members driving junky cars to events who brag about their $$$. Laugh at the piss poor finance credentials of the local group leaders....ask where the investor perks are and suggest the sponsor/leaders are just hording them. Point out that he's a success and the fellow team members are just milking him to prop up their failing investments/sales/recruitment numbers. Nobody wants to let a team down....but the team isn't good enough for him. Deep down he knows the logic is questionable or at least risky/improbable, but his faith in the good intentions of his MLM cohorts is high.....crush that faith and all he's left with is bad finance tips or cheap protein shakes.",
"title": ""
},
{
"docid": "7972dd39bc25c4136e567baa0e8857d9",
"text": "The one thing your friend needs to understand is for every dollar paid out, there is somebody paying that dollar in. The mark of a Ponzi scheme is that it feeds on itself. The stock market has trade volumes where it almost meets the definition of a Ponzi scheme. However, it deals with shares in actual production facilities (rather than only financial institutions) and provides means of production in return for large amounts of the profits. So there is someone legitimately expecting to pay back more than he gets out, in return for the availability of money at a time where he could not finance matters except by credit. With your friend's scheme, there is nobody expected to pay more than he gets out. Nail him down with that: every dollar paid out has to be paid in. Who is the one paying? At this point of time, it sounds like there will be two possible outcomes. You'll be visiting your friend in debtors' prison, or you'll visit him in criminal prison. If you highly value your friendship, you might get him out of the former with your own money. You won't be able with the latter. And if you let him exploit his standing for scamming his community, make no mistake, it will be the latter. I don't envy you.",
"title": ""
},
{
"docid": "22a8ad978393dbd6e80020a151f705f7",
"text": "If this 'scam' has a name, address and/or phone number, I forward it to the FBI anonymously. That is my advice. You may also wish to consult a lawyer.",
"title": ""
},
{
"docid": "6ee8d4a941cc76b83c804066b7e40877",
"text": "Your friend is investing time & money in a business that does not list an address or phone number on its website, not even in its 'press kit'. Even when they make a press release about moving into a new building, it does not list the address or even the street! C'mon, this is obviously a scam. No real business acts like this.",
"title": ""
},
{
"docid": "7dbf1ca1216e00be176e51ba0e68045c",
"text": "I don't want to repeat things that have already been said as I agree with most of them. There's just one little thing I'd like to add: If things go the way we're all expecting, this guy will eventually be in desperate need of a friend as he is extremely likely to lose most of his friends sooner or later. Perhaps all you can do is signal that you will not support him now (for obvious reasons), but that you'll be there for him when he may need you in the future...",
"title": ""
}
] |
[
{
"docid": "74a47b8b12f7afd06fd333b7b5426df5",
"text": "The thing that gets so many people is that multilevel marketing isn't inherently a scam. It has all of the potential that they try to sell you on. It just so happens that every friend you have doesn't have an infinite supply of friend networks completely unrelated to anyone you know, so once you get three or four people in the same area in on an MLM, or if you try to join not realizing that there are already people in on it, and ESPECIALLY if you get in on MLM without knowing ANYTHING about he product aside from the MLM opportunities for your potential marks, or without knowing anything about sales in general, then people start getting screwed. MLM is cancer.",
"title": ""
},
{
"docid": "cb78796e5f2623079542684e26439d8e",
"text": "I feel like the new mlm schemes are 'pay a thousand dollars for my blue print which will help you develop the business of your dreams and earn 100k a month!' A lady contacted me about training because she couldn't afford one of those 'courses'. And I was like a) I have ten years experience in this I did not decide to do it overnight and b) it's high pressure and stressful as f.",
"title": ""
},
{
"docid": "d85f2317a218c57cbb8d3f379432d4f9",
"text": "Sadly, the Executive and BOD cashed-in on this a long time ago. History tells us that any claw-backs that the courts seek will represent just a tiny fraction of the overall gains taken in by the scam. Equally sad, any further fines and penalties levied against WF will be taken out of the hides of the lowest level investors and employees.",
"title": ""
},
{
"docid": "895e63c8636a4fec7a755864ecc4eefb",
"text": "There are lots of answers here, but I'll add my two cents... The best way to win is not to play. MLM is not a viable business model. Don't go in thinking you'll beat the system by trying harder than everyone else. The only way you'll make any money is by recruiting lots of people, and selling products that can be obtained for cheaper elsewhere at a normal store. If your friend already committed to the decision and they're wise as to what's going on, yet gullible enough to try anyways, have them think about the ethics of exploiting the people down the pyramid from them. Maybe that will change their mind. All of the other answers about not investing too much of your own money remain true. You don't want to blow your life savings on a pipe dream.",
"title": ""
},
{
"docid": "d6ea9d616b30c9973b74157e9df43187",
"text": "Guaranteed 8.2% annual return sounds too good to be true. Am I right? Are there likely high fees, etc.? You're right. Guaranteed annual return is impossible, especially when you're talking about investments for such a long period of time. Ponzi (and Madoff) schemed their investors using promises of guaranteed return (see this note in Wikipedia: In some cases returns were allegedly determined before the account was even opened.[72]). Her financial advisor doesn't charge by the hour--he takes a commission. So there's obviously some incentive to sell her things, even if she may not need them. Definitely not a good sign, if the advisor gets a commission from the sale then he's obviously not an advisor but a sales person. The problem with this kind of investment is that it is very complex, and it is very hard to track. The commission to the broker makes it hard to evaluate returns (you pay 10% upfront, and it takes awhile to just get that money back, before even getting any profits), and since you're only able to withdraw in 20 years or so - there's no real way to know if something wrong, until you get there and discover that oops- no money! Also, many annuity funds (if not all) limit withdrawals to a long period, i.e.: you cannot touch money for like 10 years from investment (regardless of the tax issues, the tax deferred investment can be rolled over to another tax deferred account, but in this case - you can't). I suggest you getting your own financial advisor (that will work for you) to look over the details, and talk to your mother if it is really a scam.",
"title": ""
},
{
"docid": "af7c5e4e1d4dac0d2cd9ce2faf49df5d",
"text": "\"Sounds like a Ponzi scheme, amplified by social media. Ponzi schemes always rely on some \"\"winners\"\" to say they are winners, so they can grow the pot. If you put in $100 and got out $120, that's the $20 the operator pays so that the next guy who puts in $100 gets back... zero.\"",
"title": ""
},
{
"docid": "aad964023bfe20997bec03f865987ce6",
"text": "\"Given that such activities are criminal and the people committing them have to hide them from the law, it's very unlikely that an investor could detect them, let alone one from a different country. The only things that can realistically help is to keep in mind the adage \"\"If something sounds too good to be true, it probably is\"\", and to stick to relatively large companies, since they have more auditing requirements and fraud is much harder to hide at scale (but not impossible, see Enron). Edit: and, of course, diversify. This kind of thing is rare, and not systematic, so diversification is a very good protection.\"",
"title": ""
},
{
"docid": "bb23133354ef50cc316f1e26656eef42",
"text": "Its not about her trying to fuck you over. Its about yourself, herself and her brother not taking into account the risk and assuming this is easy money. Legality is the easy part. Competing in the market and coming out on top is the hard part. There are probably hundreds of people just like her brother thinking that setting up a weed shop is a get rich quick scheme.",
"title": ""
},
{
"docid": "6656967ba487892e9921b4bb5f12ca72",
"text": "\"I believe no-one who's in a legal line of business would tell you to default voluntarily on your obligations. Once you get an offer that's too good to be true, and for which you have to do something that is either illegal or very damaging to you - it is probably a scam. Also, if someone requires you to send any money without a prior written agreement - its probably a scam as well, especially in such a delicate matter as finances. Your friend now should also be worried about identity theft as he voluntary gave tons of personal information to these people. Bottom line - if it walks like a duck, talks like a duck and looks like a duck, it is probably a duck. Your friend had all the warning signs other than a huge neon light saying \"\"Scam\"\" pointing at these people, and he still went through it. For real debt consolidation companies, research well: online reviews, BBB ratings and reviews, time in business, etc. If you can't find any - don't deal with them. Also, if you get promises for debtors to out of the blue give up on some of their money - its a sign of a scam. Why would debtors reduce the debt by 60%? He's paying, he can pay, he is not on the way to bankruptcy (or is he?)? Why did he do it to begin with?\"",
"title": ""
},
{
"docid": "d6cd64b327e02bb97e1b3893e3d5adb2",
"text": "Apparently this stuff is through Amway, which screws all of the little guys over to help make somebody else a bunch of money. It's a load of bs you don't want to get involved with. Glad I found that out.",
"title": ""
},
{
"docid": "9d329e887d7499a6cd163013dc560b17",
"text": "\"The first question I have to ask is, why would your \"\"friend\"\" even be considering something so ridiculous? There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams. The old saying \"\"there's no such thing as a free lunch\"\" really comes into play here. Why would anyone send you/your friend $3,000.00 just because they \"\"like you\"\"? If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why? Well, the simple answer is, let's assume they DO send you $3,000.00 by some means. If you think there aren't strings attached then all hope is lost. This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you. As a result, you feel like you can trust them, and that's when the games really begin. Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you? Could they be setting you up for some kind of identity theft scheme, or some other financial scam? Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!! Scams like this work because they always find a sucker. The fact that you're asking the question in the first place means you/your \"\"friend\"\" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it. Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "14fbd60f61528b74f681f6033acfc003",
"text": "The risk besides the extra interest is that you might be upside down on the loan. Because the car loses value the moment you drive off the lot, the slower you pay it off the longer it takes to get the loan balance below the resale value. Of course if you have a significant down payment, the risk of being upside down is not as great. Even buying a used car doesn't help because if you try to sell it back to the dealer the next week they wont give you the full price you paid. Some people try and split the difference, get the longer term loan, but then pay it off as quickly as the shorter term loan. Yes the interest rate is higher but if you need to drop the payment back to the required level you can do so.",
"title": ""
},
{
"docid": "c9c509c589da4a1113de7886d63dc888",
"text": "Firstly, you haven't traded long enough. Secondly, you have just had a lot of luck that most of your trades came back. Thirdly, you should develop a trading strategy having entry rules, exit rules and risk management rules (never trade on margin without risk management or stop losses). Lastly, never trade on intuition or your emotions, stick to your plan, cut your losses small and early, and let your profits run.",
"title": ""
}
] |
fiqa
|
82dd046714e2eb2cb2aa71dd410eae0e
|
How to invest with a low net worth
|
[
{
"docid": "274f148b0a145f15618ebf92b4b0a936",
"text": "\"You most definitely can invest such an amount profitably, but it makes it even more important to avoid fees, um, at all costs, because fees tend to have a fixed component that will be much worse for you than for someone investing €200k. So: Edit: The above assumes that you actually want to invest in the long run, for modest but relatively certain gains (maybe 5% above inflation) while accepting temporary downswings of up to 30%. If those €2000 are \"\"funny money\"\" that you don't mind losing but would be really excited about maybe getting 100% return in less than 5 years, well, feel free to put them into an individual stock of an obscure small company, but be aware that you'd be gambling, not investing, and you can probably get better quotes playing Roulette.\"",
"title": ""
},
{
"docid": "0e489042542faae2282f064257d66c6f",
"text": "I'm of the opinion that speculating is for young people like you, because they can afford to lose it all. Avoiding losses becomes necessary once you have to sustain a family, and manage a somewhat large retirement funds. Even if you lose all your money when speculating, you'll probably be better off later, because you make less costly mistakes once you have larger amounts of money.",
"title": ""
},
{
"docid": "a8e045cba2e5d73fed29f265fb029987",
"text": "You might want to consider 'investing' a portion of that money into educating yourself. The payoff might not be as immediately obvious or gratifying but with appropriate determination, in the long term it will generate you a much greater return. If you would like to learn about investing, a great starting point would be to buy and read the book 'The Intelligent Investor' by Benjamin Graham. This will be a great barometer for how ready you are to invest in the stock market. If you are able to understand the concepts discussed and comprehend why they are important, you will have gone far in ensuring that you will make adequate returns over your lifetime and will - more importantly - increase the odds of safeguarding your capital.",
"title": ""
},
{
"docid": "76ac0ccef92f402277009b4b0bb59ed5",
"text": "I have an opposite view from all the other contributions here. Why not consider starting your own business. With the little money you have the return will most times be much higher than stocks return. The business is yours; you keep the business and the profit streams in the long term. Simply find businesses you can even start with a 100 or 200 euros and keep the rest with your bank. this is a sure way to become millionaire my friends.",
"title": ""
}
] |
[
{
"docid": "3ea390af4c36f7d00ae4953829b23ff9",
"text": "I like your enthusiasm and initiative. However, there are a few things you need to consider that you haven't yet thought about. First, it is important to remember that trading with fake money is not the same as trading with real money. In the fake world, you have $100k. With this fake money, you can do reckless things with it, such as put it all on one stock. If you lose, it costs you nothing, so you don't have an emotional attachment to it. With real money, it will feel different, and that is something you haven't experienced yet. Second, you mentioned that you are good at making picks. With all due respect, I suggest that you aren't old enough to make that determination. You haven't been trading for long enough to determine if you are doing well at it. :) That having been said, I don't want to completely discourage you from trying something new. Third, you mentioned long-term investing, but you also said that you need to make your money back quick and mentioned trading daily. Those things aren't really compatible. I wouldn't consider what you are doing as long-term investing. With the type of investing you are doing, picking individual stocks and hoping for the value to go up in a relatively short time-frame, it is similar to gambling. The risk of losing is very much there, and you shouldn't be investing money this way that you aren't prepared to lose. If you need the money for something soon, don't put it in the stock market. Never forget this. What can happen is that you start with small amounts of money, do well, and then, thinking that you are good at this, put in larger amounts of money. You will eventually lose. If you put in money that you need for something else, you have a problem. If you are trying this out for education and entertainment purposes, that is great. But when it starts to get serious, make sure that you are aware of the risks. Educate yourself and be smart. Here is what I would suggest: If you want to try this short-term day-trading type investing, and you understand that the money can easily be lost, I would balance that with investing in a more traditional way: Set aside an amount each month to put in a low-expense index mutual fund. Doing this will have several benefits for you: As for your specific questions about stock trading with small amounts: Yes, you can trade with small amounts; however, every time you trade, you will be paying a commission. Even with a discount broker, if you are trading frequently, the commissions you will be paying will be very significant at the dollar amounts you are talking about. The only way I can see around this would be to try the Robinhood app, which allows you to trade without paying sales commission. I have no experience with that app.",
"title": ""
},
{
"docid": "147702b696d74f38ad96ef0b2785ada8",
"text": "Compound interest is your friend. For such a low amount of cash, just pop it into savings accounts or deposits. When you reach about 1.500€ buy one very defensive stock that pays high dividends. With deposits, you don't risk anything, with one stock, you can lose 100% of the investment. That's why it's important to buy defensive stock (food, pharma, ...). Every time you hit 1.500€ after, buy another stock until you have about 10 different stock in different sectors, in different countries. Then buy more stock of the ones you have in portfolio. You're own strategy is pretty good also.",
"title": ""
},
{
"docid": "da4d9bd8bb3891fc78d8965d83723ad1",
"text": "TL:DR: You should read something like The Little Book of Common Sense Investing, and read some of the popular questions on this site. The main message that you will get from that research is that there is an inescapable connection between risk and reward, or to put it another way, volatility and reward. Things like government bonds and money market accounts have quite low risk, but also low reward. They offer a nearly guaranteed 1-3%. Stocks, high-risk bonds, or business ventures (like your soda and vending machine scheme) may return 20% a year some years, but you could also lose money, maybe all you've invested (e.g., what if a vandal breaks one of your machines or the government adds a $5 tax for each can of soda?). Research has shown that the best way for the normal person to use their money to make money is to buy index funds (these are funds that buy a bunch of different stocks), and to hold them for a long time (over 10-15 years). By buying a broad range of stocks, you avoid some of the risks of investing (e.g., if one company's stock tanks, you don't lose very much), while keeping most of the benefits. By keeping them for a long time, the good years more than even out the bad years, and you are almost guaranteed to make ~6-7%/year. Buying individual stocks is a really, really bad idea. If you aren't willing to invest the time to become an expert investor, then you will almost certainly do worse than index funds over the long run. Another option is to use your capital to start a side business (like your vending machine idea). As mentioned before, this still has risks. One of those risks is that it will take more work than you expect (who will find places for your vending machines? Who will fill them? Who will hire those who fill them? etc.). The great thing about an index fund is that it doesn't take work or research. However, if there are things that you want to do, that take capital, this can be a good way to make more income.",
"title": ""
},
{
"docid": "764dee227ea830455f3ebacea7bd0685",
"text": "Patience is the key to success. If you hold strong without falling to temptations like seeing a small surge in the price. If it goes down it comes up after a period of time. Just invest on the share when it reaches low bottom and you could see you money multiplying year after year",
"title": ""
},
{
"docid": "1b21e111173e3ecdcd7780e47437aa2b",
"text": "\"There are two things going on here, neither of which favors this approach. First, as @JohnFx noted, you should be wary of the sunk-cost fallacy, or throwing good money after bad. You already lost the money you lost, and there's no point in trying to \"\"win it back\"\" as opposed to just investing the money you still have as wisely as possible, forgetting your former fortune. Furthermore, the specific strategy you suggest is not a good one. The problem is that you're assuming that, whenever the stock hits $2, it will eventually rebound to $3. While that may often happen, it's far from guaranteed. More specifically, assuming the efficient market hypothesis applies (which it almost certainly does), there are theorems that say you can't increase your expected earning with a strategy like the one you propose: the apparent stability of the steady stream of income is offset by the chance that you lose out if the stock does something you didn't anticipate.\"",
"title": ""
},
{
"docid": "d407dde09a02878064db1dc11e7a5df2",
"text": "\"JoeTaxpayer's answer is dead on... but let me give my own two cents with a little bit of math. Otherwise, I personally find that people talking about diversified portfolios tends to be full of buzzwords. Let's say that Buffett's investments are $10 million. He would like to earn ≥7% this year, or $700,000. He can invest that money in coca-cola//underwear, which might return: Or he can invest in \"\"genius moves\"\" that will make headlines: (like buying huge stakes in Goldman Sachs), which might return: And he makes plays for the long haul based on the expected value of the investments. So if he splits it 50/50... ($5 million/ $5 million), then his expected value is 822,250: By diversifying, he does reduce the expected value of the portfolio... (He is not giving $10 M the chance to turn into $1.5 million or $2 million for him!). The expected value of that shock-and-awe portfolio with all $10 million invested in it is $1.2M. By taking less risk... for less reward... his expected return is lower. But his risk is lower too. Scale this example back up into the $100 million or billion range that Buffett invests in and that extra margin makes the difference. In the context of your original article, the lower-risk 'cake and underwear' investments let Buffett go big on the things that will make 20%+ returns on billions of dollars, without completely destroying his investment capital when things take a turn for the worse.\"",
"title": ""
},
{
"docid": "883c1dcbb0385662c5cdd009952764cc",
"text": "Dollar Cost Averaging would be the likely balanced approach that I'd take. Depending on the size of the sum, I'd likely consider a minimum of 3 and at most 12 points to invest the funds to get them all working. While the sum may be large relative to my net worth, depending on overall scale and risk tolerance I could see doing it in a few rounds of purchasing or I could see taking an entire year to deploy the funds in case of something happening. I'd likely do monthly investments myself though others may go for getting more precise on things.",
"title": ""
},
{
"docid": "f6dd7a2645f242a961291a46e6da89f8",
"text": "\"There are several brokerages which have lower minimum deposits (often $500) and allow purchase of index ETFs. I won't name them to avoid advertising. The best way to find out is to go to your bank, and ask to see a financial advisor. Then explain your difficulty to the advisor (who should caution you about the issues with investing such a small amount) and ask for advice on where to find a suitable broker. Also, sometimes banks offer services where you can buy shares of a fund through your bank account. This is probably not \"\"as good\"\" as the brokerage (performance may be not as good, fees may come out higher), but especially for small amounts and for convenience, this may be easier. Again, you should inquire at your institution.\"",
"title": ""
},
{
"docid": "f18f367b4b8b041cb81a43befb98db03",
"text": "I'm not aware of any method to own US stocks, but you can trade them as contract for difference, or CFDs as they are commonly known. Since you're hoping to invest around $1000 this might be a better option since you can use leverage.",
"title": ""
},
{
"docid": "5790337078c1c0fd24948a1f5458e974",
"text": "Your idea is a good one, but, as usual, the devil is in the details, and implementation might not be as easy as you think. The comments on the question have pointed out your Steps 2 and 4 are not necessarily the best way of doing things, and that perhaps keeping the principal amount invested in the same fund instead of taking it all out and re-investing it in a similar, but different, fund might be better. The other points for you to consider are as follows. How do you identify which of the thousands of conventional mutual funds and ETFs is the average-risk / high-gain mutual fund into which you will place your initial investment? Broadly speaking, most actively managed mutual fund with average risk are likely to give you less-than-average gains over long periods of time. The unfortunate truth, to which many pay only Lipper service, is that X% of actively managed mutual funds in a specific category failed to beat the average gain of all funds in that category, or the corresponding index, e.g. S&P 500 Index for large-stock mutual funds, over the past N years, where X is generally between 70 and 100, and N is 5, 10, 15 etc. Indeed, one of the arguments in favor of investing in a very low-cost index fund is that you are effectively guaranteed the average gain (or loss :-(, don't forget the possibility of loss). This, of course, is also the argument used against investing in index funds. Why invest in boring index funds and settle for average gains (at essentially no risk of not getting the average performance: average performance is close to guaranteed) when you can get much more out of your investments by investing in a fund that is among the (100-X)% funds that had better than average returns? The difficulty is that which funds are X-rated and which non-X-rated (i.e. rated G = good or PG = pretty good), is known only in hindsight whereas what you need is foresight. As everyone will tell you, past performance does not guarantee future results. As someone (John Bogle?) said, when you invest in a mutual fund, you are in the position of a rower in rowboat: you can see where you have been but not where you are going. In summary, implementation of your strategy needs a good crystal ball to look into the future. There is no such things as a guaranteed bond fund. They also have risks though not necessarily the same as in a stock mutual fund. You need to have a Plan B in mind in case your chosen mutual fund takes a longer time than expected to return the 10% gain that you want to use to trigger profit-taking and investment of the gain into a low-risk bond fund, and also maybe a Plan C in case the vagaries of the market cause your chosen mutual fund to have negative return for some time. What is the exit strategy?",
"title": ""
},
{
"docid": "22d57b67ca815daf49301d978bbff5b9",
"text": "\"You may want to look into robo-investors like Wealthfront and Betterment. There are many others, just search for \"\"robo investor\"\".\"",
"title": ""
},
{
"docid": "355134dc7106c021184cf1ba965be9a2",
"text": "\"An individual's net worth is the value of the person's assets minus his debt. To find your net worth, add up the value of everything that you own: your house, your cars, your bank accounts, your retirement investments, etc. Then subtract all of your debt: mortgage, student loans, credit card debt, car loans, etc. If you sold everything you own and paid off all your debts, you would be left with your net worth. If Bill Gates' net worth is $86 Billion, he likely does not have that much cash sitting in the bank. Much of his net worth is in the form of assets: stocks, real estate, and other investments. If he sold everything that he has and paid any debts, he would theoretically have the $86 Billion. I say \"\"theoretically\"\" because in the amounts of stock that he owns, he could cause a price drop by selling it all at once.\"",
"title": ""
},
{
"docid": "778006d5a019572e5ed98df5e0526ad3",
"text": "If you have little investing experience, you shouldn't involve yourself in leveraged investments or short-term speculation at all. You will probably just lose money. If not, is there a better way to invest with a small amount of money? If you have little investing experience, you should not attempt to make a lot of money on a small investment at all. You will probably just lose money. The best way to invest with a small amount of money is to put it in a low-cost, mainstream investment product (like an index fund), and wait and save money until you have more. By that time, you may decide that leaving the money in a low-cost index fund is actually the best thing to do anyway. (Incidentally, I don't know if fund minimums are different in the UK, but in the US, an amount equivalent to £100 might not even be enough to start, so you might have to just put it in a savings account until you save enough to even buy into a mutual fund.)",
"title": ""
},
{
"docid": "fedc731ab6ca2dc898e6b0f3972279a9",
"text": "\"Put it in a Vanguard fund with 80% VTI and 20% VXUS. That's what you'll let set for 10-15 years. For somebody that is totally new to investing, use \"\"play money\"\" in the stock market. It's easy for young people to get dreams of glory and blow it all on some stock tip they've seen on Twitter.\"",
"title": ""
},
{
"docid": "733bdfd0269c974184d15a1ad82c5f9a",
"text": "For a non-technical investor (meaning someone who doesn't try to do all the various technical analysis things that theoretically point to specific investments or trends), having a diverse portfolio and rebalancing it periodically will typically be the best solution. For example, I might have a long-term-growth portfolio that is 40% broad stock market fund, 40% (large) industry specific market funds, and 20% bond funds. If the market as a whole tanks, then I might end up in a situation where my funds are invested 30% market 35% industry 35% bonds. Okay, sell those bonds (which are presumably high) and put that into the market (which is presumably low). Now back to 40/40/20. Then when the market goes up we may end up at 50/40/10, say, in which case we sell some of the broad market fund and buy some bond funds, back to 40/40/20. Ultimately ending up always selling high (whatever is currently overperforming the other two) and buying low (whatever is underperforming). Having the industry specific fund(s) means I can balance a bit between different sectors - maybe the healthcare industry takes a beating for a while, so that goes low, and I can sell some of my tech industry fund and buy that. None of this depends on timing anything; you can rebalance maybe twice a year, not worrying about where the market is at that exact time, and definitely not targeting a correction specifically. You just analyze your situation and adjust to make everything back in line with what you want. This isn't guaranteed to succeed (any more than any other strategy is), of course, and has some risk, particularly if you rebalance in the middle of a major correction (so you end up buying something that goes down more). But for long-term investments, it should be fairly sound.",
"title": ""
}
] |
fiqa
|
d3c34f32c868f8f69a88fdaf90df260d
|
Start a Holding Company?
|
[
{
"docid": "de0cb9aa92c18b05a351ad3b895cfe13",
"text": "If you are trying to invest in closely held / private companies (things that don't trade on the stock market), you will run into a variety of regulatory problems. For various reasons, most private companies only raise funds with accredited investors. To be an accredited investor you basically have to have $1,000,000 in net worth - NOT including your primary residence, OR you have to make over $200,000 a year for the last two years and expect to keep making that much. This is a class distinction the Federal government created, you will see different but similar wealth and investment classes worldwide. So your best most organized opportunities are left out, unless you do qualify as an accredited investor. There are tons of other companies, things you will find locally, that will let you invest in their smaller time operations. (Think like a local yoga studio looking for $20,000 and willing to split the profits with you). But the problem here is lack of accountability, where partners skip town or just stop answering your calls, and the legal remedies cost you more than your claim. That being said there are people that provide capital to smaller publicly traded companies on the bulletin boards and pink sheets. They have opportunities do much better than the actual stock market investors in these companies, because you can negotiate contracts that let you cash out in their inevitable financing death spirals with very little risk to you. You can do these things as an individual or as a holding company, but the holding company will limit your liability to the amount your holding company invested, instead of your personal assets, in case your financing starts to incur liability with the company.",
"title": ""
}
] |
[
{
"docid": "b150e9c76963f936b4a6cfa0b2a5ae48",
"text": "\"I'll skip the \"\"authorizing....\"\" and go right to uses of new shares: Companies need stock as another liquid asset for a variety of purposes, and if not enough stock is available, then may be forced to the open market to acquire, either by exchanging cash or taking on debt to get the cash.\"",
"title": ""
},
{
"docid": "55cab6c8c047f51ea5f0380b2fb3c27b",
"text": "\"Watch out for PO financing. A lot of those contracts have nasty terms like \"\"I agree that SCAM CAPITAL will be my sole source of credit for the next 2 years.\"\" that can get in the way of using bank debt or credit cards. They may even tell you otherwise to get you to sign, but they are the payday lenders of the business world. It can be great when it works, but there are a lot of shark men. While you can grow your company on po financing, understand that those companies exist to suck all the profit out of small, non-innovative companies, who needed a hand and their terms reflect that. If your business is that good maybe you can get someone to buy in instead? The second benefit to this is that if things go tits-up, then you don't have any personal guarantee. You will likely have to guarantee PO financing in most parts of the country.\"",
"title": ""
},
{
"docid": "3c367ad374da420b8a8c5cb6d2191b80",
"text": "Your strategy of longing company(a) and shorting company(b) is flawed as the prices of company(a) and company(b) can both increase and though you are right , you will lose money due to the shorting strategy. You should not engage in pair trading , which is normally used for arbitrage purposes You should just buy company(a) since you believed its a better company compared to company(b) , its as simple as that",
"title": ""
},
{
"docid": "b93de284953fa5486669f0c77bcc3907",
"text": "You seem to think that the term “held”is used correctly. There lies your logical fallacy. I made no such assumption. In my question I test both the use of the term “US economy” AND the term “held”. It is obvious you can’t “hold” income but if you want to get down to technicalities, both asset and income/expenses are types of accounts while the notion of “trust” is a legal construct to limit the rights of external creditors.",
"title": ""
},
{
"docid": "b1fd26ee58a9ba5d07e635ce82827285",
"text": "Good questions. I can only add that it may be valuable if the company is bought, they may buy the options. Happened to me in previous company.",
"title": ""
},
{
"docid": "9c2486bf10b899839d0c29cb649f96a3",
"text": "Yes, but only if they're looking for investors. You would need to contact them directly. Unless you're looking to invest a significant sum, they may not be interested in speaking with you. (Think at least 6 figures, maybe 7 depending on their size and needs). This is otherwise known as being a Venture Capitalist. Some companies don't want additional investors because the capital isn't yet needed and they don't want to give up shares in the profit/control. Alternatively, you could try and figure out which investment groups already have a stake in the company you're interested in. If those companies are publicly traded, you could buy stocks for their company with the expectation that their stock price will increase if the company you know of does well in the long run.",
"title": ""
},
{
"docid": "52e8790f3d77d44502c61766e237945b",
"text": "(yes, this should probably be a comment, not an answer ... but it's a bit long). I don't know what the laws are specifically about this, but my grandfather used to be on the board of a company that he helped to found ... and back in the 1980s, there was a period when the stock price suddenly quadrupled One of the officers in the company, knowing that the stock was over-valued, sold around a third of his shares ... and he got investigated for insider trading. I don't recall if he was ever charged with anything, but there were some false rumors spreading about the company at the time (one was that they had something that you could sprinkle on meat to reduce the cholesterol). I don't know where the rumors came from, but I've always assumed it was some sort of pump-and-dump stock manipulation, as this was decades before they were on the S&P 500 small cap. After that, the company had a policy where officers had to announce they were selling stock, and that it wouldn't execute for some time (1? 2 weeks? something like that). I don't know if that was the SEC's doing, or something that the company came up with on their own.",
"title": ""
},
{
"docid": "e1b714e80a55045e5bde9b68b2342ed6",
"text": "\"Seems like no one in this thread has heard of \"\"treasury stocks\"\", which indeed allow a company to own and sell its own stock. Think about it. When there is a stock buy-back funded by excess profits, where does that stock go?\"",
"title": ""
},
{
"docid": "167e7ba61ac8b036dc0a477a9e81d0df",
"text": "Don't start by investing in a few individual companies. This is risky. Want an example? I'm thinking of a big company, say $120 billion or so, a household name, and good consistent dividends to boot. They were doing fairly well, and were generally busy trying to convince people that they were looking to the future with new environmentally friendly technologies. Then... they went and spilled a bunch of oil into the Gulf of Mexico. Yes, it wasn't a pretty picture if BP was one of five companies in your portfolio that day. Things would look a lot better if they were one of 500 or 5000 companies, though. So. First, aim for diversification via mutual funds or ETFs. (I personally think you should probably start with the mutual funds: you avoid trading fees, for one thing. It's also easier to fit medium-sized dollar amounts into funds than into ETFs, even if you do get fee-free ETF trading. ETFs can get you better expense ratios, but the less money you have invested the less important that is.) Once you have a decent-sized portfolio - tens of thousands of dollars or so - then you can begin to consider holding stocks of individual companies. Take note of fees, including trading fees / commissions. If you buy $2000 worth of stock and pay a $20 commission you're already down 1%. If you're holding a mutual fund or ETF, look at the expense ratio. The annualized real return on the stock market is about 4%. (A real return is after adjusting for inflation.) If your fee is 1%, that's about a quarter of your earnings, which is huge. And while it's easy for a mutual fund to outperform the market by 1% from time to time, it's really really hard to do it consistently. Once you're looking at individual companies, you should do a lot of obnoxious boring stupid research and don't just buy the stock on the strength of its brand name. You'll be interested in a couple of metrics. The main one is probably the P/E ratio (price/earnings). If you take the inverse of this, you'll get the rate at which your investment is making you money (e.g. a P/E of 20 is 5%, a P/E of 10 is 10%). All else being equal, a lower P/E is a good thing: it means that you're buying the company's income really cheap. However, all else is seldom equal: if a stock is going for really cheap, it's usually because investors don't think that it's got much of a future. Earnings are not always consistent. There are a lot of other measures, like beta (correlation to the market overall: riskier volatile stocks have higher numbers), gross margins, price to unleveraged free cash flow, and stuff like that. Again, do the boring research, otherwise you're just playing games with your money.",
"title": ""
},
{
"docid": "b4ae38af3242ec23e15bb3730a65c228",
"text": "\"I think you've got basics, but you may have the order / emphasis a bit wrong. I've changed the order of the things you've learned in to what I think is the most important to understand: Owning a stock is like owning a tiny chunk of the business Owning stock is owning a tiny chunk of the business, it's not just \"\"like\"\" it. The \"\"tiny chunks\"\" are called shares, because that is literally what they are, a share of the business. Sometimes shares are also called stocks. The words stock and share are mostly interchangeable, but a single stock normally means your holding of many shares in a business, so if you have 100 shares in 1 company, that's a stock in that company, if you then buy 100 shares in another company, you now own 2 stocks. An investor seeks to buy stocks at a low price, and sell when the price is high. Not necessarily. An investor will buy shares in a company that they believe will make them a profit. In general, a company will make a profit and distribute some or all of it to shareholders in the form of dividends. They will also keep back a portion of the profit to invest in growing the company. If the company does grow, it will grow in value and your shares will get more valuable. Price (of a stock) is affected by supply/demand, volume, and possibly company profits The price of a share that you see on a stock ticker is the price that people on the market have exchanged the share for recently, not the price you or I can buy a share for, although usually if people on the market are buying and selling at that price, someone will buy or sell from you at a similar sort of price. In theory, the price will be the companies total value, if you were to own the whole thing (it's market capitalisation) divided by the total number of shares that exist in that company. The problem is that it's very difficult to work out the total value of a company. You can start by counting the different things that it owns (including things like intellectual property and the knowledge and experience of people who work there), subtract all the money it owes in loans etc., and then make an allowance for how much profit you expect the company to make in the future. The problem is that these numbers are all going to be estimates, and different peoples estimates will disagree. Some people don't bother to estimate at all. The market makers will just follow supply and demand. They will hold a few shares in each of many companies that they are interested in. They will advertise a lower price that they are willing to buy at and a higher price that they will sell at all the time. When they hold a lot of a share, they will price it lower so that people buy it from them. When they start to run out, they will price it higher. You will never need to spend more than the market makers price to buy a share, or get less than the market makers price when you come to sell it (unless you want to buy or sell more shares than they are willing to). This is why stock price depends on supply and demand. The other category of people who don't care about the companies they are trading are the high speed traders. They just look at information like the past price, the volume (total amount of shares being exchanged on the market) and many other statistics both from the market and elsewhere and look for patterns. You cannot compete with these people - they do things like physically locate their servers nearer to the stock exchanges buildings to get a few milliseconds time advantage over their competitors to buy shares quicker than them.\"",
"title": ""
},
{
"docid": "035d6bea1dd42ac71c51671df2da59f4",
"text": "\"Read the book, \"\"Slicing Pie: Fund Your Company Without Funds\"\". You can be given 5% over four years and in four years, they hire someone and give him twice as much as you, for working a month and not sacrificing his salary at all. Over the four years, the idiot who offered you the deal will waste investors money on obvious, stupid things because he doesn't know anything about how to build what he's asking you to build, causing the need for more investment and the dilution of your equity. I'm speaking from personal experience. Don't even do this. Start your own company if you're working for free, and tell the idiot who offered you 5% you'll offer him 2% for four years of him working for you for free.\"",
"title": ""
},
{
"docid": "1709c5e813a70930b917308ebffc9a16",
"text": "If it's a small one person business he will have to sign a personal guarantee no matter what he does with respect to incorporating. Not saying your idea isn't worth looking into but no bank will lend him money without a personal guarantee.",
"title": ""
},
{
"docid": "c13eba07f2fd4614e44c02219fb55b0d",
"text": "Someone I know had an idea to open a savings account as an LLC or corporation to receive better interest rates on savings, and set up a system where anyone can pool money in and receive a larger cut through savings interest than with a personal account. Is this legal/feasible in any way?",
"title": ""
},
{
"docid": "5332ab4fcf9969669a3adebdc5e92194",
"text": "\"Bloomberg suggests that two Fidelity funds hold preferred shares of Snapchat Inc.. Preferred shares hold more in common with bonds than with ordinary stock as they pay a fixed dividend, have lower liquidity, and don't have voting rights. Because of this lower liquidity they are not usually offered for sale on the market. Whether these funds are allowed to hold such illiquid assets is more a question for their strategy document than the law; it is completely legal for a company to hold a non-marketable interest in another, even if the company is privately held as Snapchat is. The strategy documents governing what the fund is permitted to hold, however, may restrict ownership either banning non-market holdings or restricting the percentage of assets held in illiquid instruments. Since IPO is very costly, funds like these who look to invest in new companies who have not been through IPO yet are a very good way of taking a diversified position in start-ups. Since they look to invest directly rather than through the market they are an attractive, low cost way for start-ups to generate funds to grow. The fund deals directly with the owners of the company to buy its shares. The markdown of the stock value reflects the accounting principle of marking to market (MTM) financial assets that do not have a trade price so as to reflect their fair value. This markdown implies that Fidelity believe that the total NPV of the company's net assets is lower than they had previously calculated. This probably reflects a lack of revenue streams coming into the business in the case of Snapchat. edit: by the way, since there is no market for start-up \"\"stocks\"\" pre-IPO my heart sinks a little every time I read the title of this question. I'm going to be sad all day now :(.\"",
"title": ""
},
{
"docid": "4f0d832f5d7b871a5be90f876c28da0d",
"text": "A cautionary tale: About 25 years ago I decided that I should try my hand at investing in some technology companies. I was in the computer biz but decided that I might suffer from myopia there, so I researched some medical startups. And I did some reasonably good research, given the available resources (the Internet was quite primitive). I narrowed things down to 4-5 companies, studying their technology plans, then researched their business plans and their personnel. In the end I picked a drug company. Not only did it have a promising business plan, but it had as it's CEO a hotshot from some other company, and the BOD was populated buy big names from tech companies and the like. AND the company had like $2 of cash for every $1 of outstanding share value, following their recent IPO. So I sold a bit of stock I had in my employer and bought like $3000 worth of this company. Then, taking the advice I'd seen several places, I forgot about it for about 6 months. When I went back to look their stock value had dropped a little, and the cash reserves were down about 20%. I wasn't too worried. 6 months later the cash was down 50%. Worrying a little. After I'd had the stock for about 2 years the stock price was about 10% of what I'd paid. Hardly worth selling, so I hung on for awhile longer. The company was eventually sold to some other company and I got maybe $50 in stock in the new company.",
"title": ""
}
] |
fiqa
|
b2ae3c1958d0b37ef114ac4c1e86d0aa
|
The best credit card for people who pay their balance off every month
|
[
{
"docid": "9a404d38a074f32e5c8fa367867d91f1",
"text": "BillShrink.com lets you compare credit cards based on all your specifics (miles vs. cash, where you shop the most, etc) and tells you what the best card is for your specific habits. MOD EDIT Looks like billshrink.com is shut down. From their site: Dear BillShrink customer, As you may have heard, BillShrink.com was shut down on July 31, 2013. While we’re sad to say goodbye, we hope we’ve been able to help you be better informed and save some money along the way! The good news is that much of the innovative award-winning BillShrink technology will still be available via our StatementRewards platform (made available to customers by our partnering financial institutions). Moreover, we expect to re-launch a new money-saving service in the future. To see more of what we’re up to, visit Truaxis.com. We have deleted your personal information as of July 31. We will retain your email address only to announce a preview of the new tool. If you do not want us to retain your email address, you can opt out in the form below. This opt out feature will be available until September 31, 2013. If you have already opted out previously, you do not need to opt out again. If you have any further questions, contact us at [email protected]. Thanks, The BillShrink/Truaxis Team",
"title": ""
},
{
"docid": "2874d87ed6ac51df1e8ff2868dbdd09f",
"text": "The answer for this question varies from person to person. However most cards give lousy rewards percentage-wise. Take a look at where your money is being spent each month (say with a tool like mint.com), and seek out a card that rewards you in categories where you already spend a lot of money. Many people here have suggested cards with high gas rebates, and that's great if you drive more than anything else. However, the important thing is to pick what benefits you most.",
"title": ""
},
{
"docid": "e21104c1100dde4ce0246351b25ca8f8",
"text": "\"I'm not going to recommend a specific card. New card offers pop up all the time. My answer would be out of date in a month! As a general rule, if you pay off your balance every month, you should be looking at a cash-back or a rewards card. Cash-back cards will give you some money (say 1%) of every dollar you spend. Some will give you larger amounts of cash-back for certain types of spending (e.g. groceries). With a Rewards card, you usually get \"\"points\"\" or \"\"airline miles\"\", which can be redeemed for merchandise, flights around the wold, concert tickets, etc. With these types of cards, it makes sense to do as much of your spending as possible with the cards, so you can maximize the benefits. Which specific card is best will depend on your shopping habits, and which bank is offering the best deal that week. I recommend you start at http://www.creditcards.com to compare card offerings. For cash-back cards, you can also go to http://www.creditcardtuneup.com, enter some details of your spending, and see which one will give you the most cash back.\"",
"title": ""
},
{
"docid": "f0e1fbb838e5de08120f729b470cc3ed",
"text": "PenFed Platinum Cashback Rewards Visa Card is another good choice. Pros: Cons:",
"title": ""
},
{
"docid": "7ec741c8c86592e33bb9e96b367e02cc",
"text": "The answer today is the Fidelity Rewards Amex. This card pays the highest cash back (2%) on ALL purchases. The answer gets more complicated if you like miles, or you want to use one card for groceries and gas and another for restaurants, etc. But the Fidelity Amex gives you 2% on everything you purchase, automatically deposited into your Fidelity account as cash (no coupons to rip off, or checks to deposit).",
"title": ""
},
{
"docid": "8efda2791c18e8bc88129787a25c0437",
"text": "For people who are already a Costco member. The American Express TrueEarnings Business Card is a good choice. Note: If you don't own a business, just use your name as the business. The business card is better than the regular TrueEarnings card. Pros:",
"title": ""
}
] |
[
{
"docid": "399b94cafae1981298f8c7b2e307857e",
"text": "I am like you with not acknowledging balances in my accounts, so I pay my credit card early and often. Much more than once a month. With my banks bill pay, I can send money to the credit card for free and at any time. I pay it every two weeks (when I get paid), and I will put other extra payments on there if I bought a large item. It helps me keep my balances based in reality in Quicken. For example, I saved the cash for my trip, put the trip on my credit card, then paid it all off the day after I got home. I used the card because I didn't want to carry the cash, I wanted the rewards cash back, I wanted the automatic protection on the car rental, and I couldn't pay for a hotel with cash. There are many good reasons to use credit cards, but only if you can avoid carrying a balance.",
"title": ""
},
{
"docid": "239b261eb6f0510cc7e5d288f171eecc",
"text": "\"Not everyone pays their balance in full every month. They may not make interest off of you or me but they do make interest off of a lot of cardholders. In many cases, the interest is variable and the larger your (running) balance, the higher your rate. If you're close to your limit and making minimum payments, you can literally take decades to pay off $2,000 or so. Some people don't pay at all every month and end up paying late fees. Some people use their cards overseas and pay foreign transaction fees. Ever take a cash advance? Me neither but they charge you interest right away for that instead of waiting until your statement. The list of fees and charges is as long as my arm and in tiny print. That's how they make money. The points/bonus/cash back and other rewards programs are to get you in the door. It's like when you see a luxury car advertised for a \"\"too good to be true\"\" price and you get to the lot and find out that the one they are selling for that price is a manual transmission without AC or a radio, they only had one and they sold it an hour before you got there. It got you on the lot though. The rewards programs function in much the same way (minus the disappearing part), they get you interested in their offering among a sea of virtually identical products but rest assured, if the card issuers were losing money because of them, they wouldn't exist for very long.\"",
"title": ""
},
{
"docid": "7fe7e49dc349ba94c9b49b1f71dfecdc",
"text": "Really basic Revolving credit for individuals. Use a credit card to pay for a purchase. You pay the card off completely before you pay interest and get 30 days free money. Your cash balance is for that 30 days doing you some good instead.",
"title": ""
},
{
"docid": "c3fc85dd71f3a47adf539ee2ef8c1ebd",
"text": "\"First I want to be sure Op understands how \"\"Credit Utilization\"\" is scored as this confuses many folks here in the US. There is no \"\"reward\"\" for charging money or carrying balances, only penalty. If you have one credit card with a $10,000 limit and owe $8,000 you have an 80% utilization which will signal to banks that you are having financial difficulties. (Anything over 30% on a single card is usually penalized significantly.) The ideal utilization is something around 0, which is in the ballpark of the 5% Op mentioned. Again there is never any direct benefit to your credit of spending a penny on any of your credit cards.* Banks offer the best rates to people that pay off their balances each month or don't use their cards in the first place. Why? Despite the system being imperfect in many ways, utilization is a good indicator. Example: If you have a card with a $10,000 limit and pay it off every month that speaks to you being a good risk. If you compared this person to the person above, who do you think would be the most likely to pay back a car loan? Finally, Utilization is a small part of the credit score. I would call it more of a \"\"hurdle\"\" than a factor, at least concerning good rates and approvals. Most of your credit, is based on length of history, paying on time, and having multiple types of credit. Real life example: I had a relative that had perfect payment history for decades. They got divorced and started accumulating a balance. The person got other cards with 0% apr to avoid the interest, but their balance only grew. -They had to use the card to make ends meet, etc. (3 kids, single parent) They ended up filing a sizable bankruptcy a few years later. This was one of the most responsible people I've ever known. (Yes that statement will seem far fetched to someone else. It was almost impossible to get them to file bankruptcy, even though there was no way to ever pay the money back.) The point? Utilization shows a more 'current' picture than some of the other portions due. - Had those banks used the high utilization as a warning sign they would have saved a lot of money. A 'fun' way of looking at credit: Sometimes I describe credit score as a popularity contest. If you really 'need' money banks are not going to help you. However if your credit shows everyone is lining up to loan you money, other banks are going to want in too. \"\"Banks only make loans to people that don't need them.\"\" *** Spending a lot on Credit Cards does sometimes have the indirect effect of getting balance increases that could have a slight increase in your score. This happens less than it did prior to the financial fiasco. Also the effect of this is on the score negligible unless carrying a balance. ( And the person carrying a balance also has a lower score anyways.) Additionally someone charging less could probably get a similar raise if they asked for it. (Raises vary greatly by issuer.))\"",
"title": ""
},
{
"docid": "d83a3fd3d00c80f66477d90e41b235f7",
"text": "\"Note: this answer is true for the UK, other places may vary. There are a couple of uses for credit cards. The first is to use them in a revolving manner, if you pay off the bill in full every time you get one then with the vast majority of cards you will pay no interest, effecitvely delay your expenses by a month, build your credit rating and with many credit cards you can also get rewards. Generally you should wait until the bill comes to pay it off. This ensures that your usage is reported to the credit ratings agencies. In general you should not draw out cash on credit cards as there is usually a fee and unlike purchases it will start acruing interest immediately. The second is longer term borrowing. This is where you have to be careful. Firstly the \"\"standard\"\" rate on most credit cards is arround 20% APR which is pretty high. Secondly on many cards once you are carrying a balance any purchases start acruing interest immediately. However many credit cards offer promotional rates. In contrast to the standard rates which are an expensive way to borrow the promotional rates often allow you to borrow at 0% APR for some period. Usually when it comes to promotional rates you get the best deal by opening a new credit card and using it immediately. Ideally you should plan to pay off the card before the 0% period ends, if you can't do that then a balance transfer may be an option but be aware than in a few years the market for credit cards may (or may not) have changed. Whatever you do you should ALWAYS make sure to pay at least the minimum payment and do so on time. Not doing so may trigger steep fees, loss of promotional interest rates. There is a site called moneysavingexpert that tracks the best deals.\"",
"title": ""
},
{
"docid": "1eb37df8d834d9a541269b26ec8971da",
"text": "\"Some features to be aware of are: How you prioritize these features will depend on your specific circumstances. For instance, if your credit score is poor, you may have to choose among cards you can get with that score, and not have much choice on other dimensions. If you frequently travel abroad, a low or zero foreign transaction fee may be important; if you never do, it probably doesn't matter. If you always pay the balance in full, interest rate is less important than it is if you carry a balance. If you frequently travel by air, an airline card may be useful to you; if you don't, you may prefer some other kind of rewards, or cash back. Cards differ along numerous dimensions, especially in the \"\"extra benefits\"\" area, which is often the most difficult area to assess, because in many cases you can't get a full description of these extra benefits until after you get the card. A lot of the choice depends on your personal preferences (e.g., whether you want airline miles, rewards points of some sort, or cash back). Lower fees and interest rates are always better, but it's up to you to decide if a higher fee of some sort outweighs the accompanying benefits (e.g., a better rewards rate). A useful site for finding good offers is NerdWallet.\"",
"title": ""
},
{
"docid": "957ee7a34155b897f559f6d7f2097af1",
"text": "Credit cards come with an interest-free grace period of ~25 days as long as you pay your balance in full every month. In other words, charges made in January will appear on a bill cut on Jan 31, and due around the 25th of February. If paid in full by 2/25, there's no interest. It is a very good idea to get in the habit of paying off your entire balance every month for this very reason. Don't buy anything you can't afford to pay for at the end of the month when the credit card bill is due. You'll avoid interest charges, build good habits, and improve your credit score. By just paying the minimum amount due, you'll be charged interest from the moment of purchase, and the grace period on new purchases goes away. Credit card companies make the minimum amount due relatively low as a way to encourage you to pay more and more in interest every month. Don't fall for it! Look for a credit card with zero annual fee. Sure, rewards are nice, but it's more important to avoid fees, keep the interest rate low, and get in the habit of paying in full every month, in which case the interest rate won't matter. Your bank or credit union is a good place to start looking.",
"title": ""
},
{
"docid": "cbe56b2e3d24783cbcae38ad2c925897",
"text": "Carrying a small balance is generally better for your credit score that paying off in full every month by virtue of the statistics and models that give you a credit score for a certain product. Banks don't want to lend to customers that aren't going to be profitable, in my experience customers who can show that they have credit over time are generally awarded a higher score. So my advice would be to keep a small, manageable balance on the credit card, paying off the balance and then spending a little again on the card to keep at roughly constant balance. This revolving credit is the purpose of the product, and by showing you can use it sensibly, you will be rewarded over time. Source: I build credit scoring models for a big UK lender, specialising in credit cards and personal loan modelling.",
"title": ""
},
{
"docid": "3f73291fad05f11d85e9a94aa8a7389b",
"text": "Always pay on time, and stop listening to whoever is telling you not to -- they are clueless. Credit cards are revolving accounts with a grace period. The balance owed is due on the statement date, and you have a grace period of 20-40 days to pay. Paying bills on time is the single most important thing that you can do to have a good credit score. Always pay on time.",
"title": ""
},
{
"docid": "ef4ca974efeceed7a18e5432039f3b5f",
"text": "Technically, yes but, in practice, no. I use a card for everything and pay it off every month. Sometimes, several times a month depending on how the month is going. In the last 10 years, I've paid a total of $8 in interest because I legitimately forgot to pay my balance before the statement came out when I was out of town. I wasn't late, I just didn't beat the statement and had a small interest charge that I couldn't successfully argue off. In the same time period, I've had one card cancelled at the banks request. The reason was that I hadn't used it in two years so they cancelled me. I never pay annual fees, I get cards with great rewards programs and I (almost) never pay interest. If your bank cancels your card because you're too responsible, find a better bank.",
"title": ""
},
{
"docid": "05566dc1f7eabf546c872438675b8ce9",
"text": "I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =))",
"title": ""
},
{
"docid": "71d7c84f33ce6f9b843b95061714b159",
"text": "\"Curious, why are you interested in building/improving your credit score? Is it better to use your card and pay off the bill completely every month? Yes. How is credit utiltization calculated? Is it average utilization over the month, or total amount owed/credit_limit per month? It depends on how often your bank reports your balances to the reporting agencies. It can be daily, when your statement cycle closes, or some other interval. How does credit utilization affect your score? Closest to zero without actually being zero is best. This translates to making some charges, even $1 so your statement shows a balance each statement that you pay off. This shows as active use. If you pay off your balance before the statement closes, then it can sometimes be reported as inactive/unused. Is too much a bad thing? Yes. Is too little a bad thing? Depends. Being debt free has its advantages... but if your goal is to raise your credit score, then having a low utilization rate is a good metric. Less than 7% utilization seems to be the optimal level. \"\"Last year we started using a number, not as a recommendation, but as a fact that most of the people with really high FICO scores have credit utilization rates that are 7 percent or lower,\"\" Watts said. Read more: http://www.bankrate.com/finance/credit-cards/how-to-bump-up-your-credit-score.aspx Remember that on-time payment is the most important factor. Second is how much you owe. Third is length of credit history. Maintain these factors in good standing and you will improve your score: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx\"",
"title": ""
},
{
"docid": "3333d869722843e63a4782d30d9e231f",
"text": "Some years ago a call center operator told me a bit more than they probably should have. They like to see a lot of money go through the card, but very little staying on the card. Yes, they make money on the interest but one card defaulting blows away the profit on a lot of other cards. The 3% take from the merchants is both reliable and up-front, not 6 months down the line when (and if) you pay the interest. So if you want to make your credit card company happy, pay your bills in full every month. I have credit far beyond my actual means because I run work expenses on my personal card, I was told they didn't care (and had already guessed) that it wasn't my money. The point was I was handling things in a way they liked. Not quite at Palladium status, but cards with $200 annual fees are mine for the asking, and I haven't paid interest since the early 1990's.",
"title": ""
},
{
"docid": "fa0b4a937bebc51fe2f72ca4f027888b",
"text": "I think you got the message mixed up a little: Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. What's typically reported to the credit bureaus, and thus calculated into your scores, are the balances reported on your last statements. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit scores don't care.) You typically can increase your scores by limiting your charges to 30% or less of a card's limit. -- from 7 Ways to Fix Your Credit Score In other words, ALWAYS pay off your balance if you can. But don't fill up your card to the max of your credit limit each month. i.e. if your credit limit is $5000, only spend $2000 each month.",
"title": ""
},
{
"docid": "48ece9b4e3fc64ce0893c2bc989e86a0",
"text": "1. you want /r/personalfiance 2. 1 payment or 4-5 makes no difference 3. what makes the difference are a) interest rate b) pay as much as possible every month 4. pay as much as you can into the credit card with the highest interest rate, and the minimum payment on the rest; as you pay off a credit card, make as big of a payment to the one that has the highest interest rate 5. stop charging anything on any credit card and stop getting into any kind of debt 6. as you pay off a credit card, call the company and cancel it.",
"title": ""
}
] |
fiqa
|
b7f7560e672497ae994ce8573ad0f6ba
|
Personal Asset Protection - How to protect asset against a deficiency judgement?
|
[
{
"docid": "3a62e074f8d46cf5492c1193e6b0ac15",
"text": "You should talk to a bankruptcy attorney local to you. While bankruptcy laws are federal, there are a variety of local rules. As an example in CA, I've heard of a trustee going after a debtor's IRA account. Retirement accounts are generally off limits, but not always. Additionally, structuring your assets for the purpose of shielding them from creditors after the start of foreclosure proceedings may constitute fraud. At the very least that may open those assets back up to your creditor(s).",
"title": ""
},
{
"docid": "041c81f0aeb57d71149e2a4bbf21e5b2",
"text": "Find out whether your state has a homestead law or something similar, which might protect your primary residence during bankruptcy. You may have to explicitly register to receive that protection; details differ. Frankly, you'll get better answers to this sort of question from an agency in your area which deals with folks at risk of of bankruptcy/foreclosure/etc. They should know all the tricks which actually work in your area. Hiring a lawyer may also be advisable/necessary",
"title": ""
}
] |
[
{
"docid": "9f8e0f5aa9201d430285f1d60f079b89",
"text": "I have been in a similar position for quite a while now and the only thing that seems to help is screening phone calls. I have a long list of collector numbers set to not ring on my phone. They can still leave a voice mail but they never do. As far as I know there aren't any laws that protect you from nuisance phone calls. FDCPA letters only apply to the debtor and the collector it is sent to it doesn't protect an unrelated third party from getting annoying phone calls. I have a feeling that sending FDCPA letters is just confirming that you probably are the debtor and prolong the collection calls.",
"title": ""
},
{
"docid": "b1e85d77351e39748acab3932a4c949f",
"text": "I wish this was the case in Canada. I lost about 60k on my home in one year and have to sell now to move for work. In the US I could simply default and the bank takes the loss. In Canada if I default, CMHC pays the bank, then I'm sued by CMHC and stuck with the bad debt. Simply put - here the onus of repayment is on the lender, not the lending institution. It sounds good until you are the one looking at losing your shirt.",
"title": ""
},
{
"docid": "765dc468438264b52683a3b3d7dcbb3e",
"text": "Unfortunately assets placed in a safety deposit box are not covered under the Federal Deposit Insurance Program (FDIC). Unless the bank is found to be negligent in the way it handled or protected your safety deposit box, neither them nor their private insurance company will reimburse you for the loss. Find out if in the duration you had your box with them, they moved, transitioned or merged with another entity. In this specific situation, you may be able to demonstrate negligence on the part of the banks as they have seemingly misplaced your box during their transition phase, and depending upon the value of the items placed in your safety deposit box, you may be entitled to some form of recovery. Some homeowner's insurance policies may also cover the loss, but if you didn't document what you kept in the box, you have difficulty verifying proof of the value. Valuables are often lost but documents can often be reconstructed. You can get stock and bonds by paying a fee for new certificates. For wills and trusts, you can reach out to the lawyer that prepared them for a copy. You should always keep 3 copies of such documents. When you put stuff in the box, always videotape it (photographs can be challenged) but if the video shows it was put in there, although it can still be taken out by you after you turn off the camera, yields more weight in establishing content and potential value. Also know the value of the items and check with your homeowner policy to make sure the default amount covers it, if not then you may need to include a rider to add the difference in value and the video, receipts, appraisals and such will serve you well in the future in such unfortunate circumstances. If the contents of a safety deposit box are lost because you didn't pay the fee, then depending on the state you are in the time frame might vary (3 years on average), but none the less they are sent to the State's unclaimed property/funds department. You can search for these online often times or by contacting the state. It would help for you to find out which scenario you are in, their fault or yours, and proceed accordingly. Good luck.",
"title": ""
},
{
"docid": "bb9ea76eef68b7af44e872e2f37d6569",
"text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.",
"title": ""
},
{
"docid": "6e6eb756cc10517e78138928fe576fa8",
"text": "\"Depositum irregulare is a Latin phrase that simply means \"\"irregular deposit.\"\" It's a concept from ancient Roman contract law that has a very narrow scope and doesn't actually apply to your example. There are two distinct parts to this concept, one dealing with the notion of a deposit and the other with the notion of irregularity. I'll address them both in turn since they're both relevant to the tax issue. I also think that this is an example of the XY problem, since your proposed solution (\"\"give my money to a friend for safekeeping\"\") isn't the right solution to your actual problem (\"\"how can I keep my money safe\"\"). The currency issue is a complication, but it doesn't change the fact that what you're proposing probably isn't a good solution. The key word in my definition of depositum irregulare is \"\"contract\"\". You don't mention a legally binding contract between you and your friend; an oral contract doesn't qualify because in the event of a breach, it's difficult to enforce the agreement. Legally, there isn't any proof of an oral agreement, and emotionally, taking your friend to court might cost you your friendship. I'm not a lawyer, but I would guess that the absence of a contract implies that even though in the eyes of you and your friend, you're giving him the money for \"\"safekeeping,\"\" in the eyes of the law, you're simply giving it to him. In the US, you would owe gift taxes on these funds if they're higher than a certain amount. In other words, this isn't really a deposit. It's not like a security deposit, in which the money may be held as collateral in exchange for a service, e.g. not trashing your apartment, or a financial deposit, where the money is held in a regulated financial institution like a bank. This isn't a solution to the problem of keeping your money safe because the lack of a contract means you incur additional risk in the form of legal risk that isn't present in the context of actual deposits. Also, if you don't have an account in the right currency, but your friend does, how are you planning for him to store the money anyway? If you convert your money into his currency, you take on exchange rate risk (unless you hedge, which is another complication). If you don't convert it and simply leave it in his safe, house, car boot, etc. you're still taking on risk because the funds aren't insured in the event of loss. Furthermore, the money isn't necessarily \"\"safe\"\" with your friend even if you ignore all the risks above. Without a written contract, you have little recourse if a) your friend decides to spend the money and not return it, b) your friend runs into financial trouble and creditors make claim to his assets, or c) you get into financial trouble and creditors make claims to your assets. The idea of giving money to another individual for safekeeping during bankruptcy has been tested in US courts and ruled invalid. If you do decide to go ahead with a contract and you do want your money back from your friend eventually, you're in essence loaning him money, and this is a different situation with its own complications. Look at this question and this question before loaning money to a friend. Although this does apply to your situation, it's mostly irrelevant because the \"\"irregular\"\" part of the concept of \"\"irregular deposit\"\" is a standard feature of currencies and other legal tender. It's part of the fungibility of modern currencies and doesn't have anything to do with taxes if you're only giving your friend physical currency. If you're giving him property, other assets, etc. for \"\"safekeeping\"\" it's a different issue entirely, but it's still probably going to be considered a gift or a loan. You're basically correct about what depositum irregulare means, but I think you're overestimating its reach in modern law. In Roman times, it simply refers to a contract in which two parties made an agreement for the depositor to deposit money or goods with the depositee and \"\"withdraw\"\" equivalent money or goods sometime in the future. Although this is a feature of the modern deposit banking system, it's one small part alongside contract law, deposit insurance, etc. These other parts add complexity, but they also add security and risk mitigation. Your arrangement with your friend is much simpler, but also much riskier. And yes, there probably are taxes on what you're proposing because you're basically giving or loaning the money to your friend. Even if you say it's not a loan or a gift, the law may still see it that way. The absence of a contract makes this especially important, because you don't have anything speaking in your favor in the event of a legal dispute besides \"\"what you meant the money to be.\"\" Furthermore, the money isn't necessarily safe with your friend, and the absence of a contract exacerbates this issue. If you want to keep your money safe, keep it in an account that's covered by deposit insurance. If you don't have an account in that currency, either a) talk to a lawyer who specializes in situation like this and work out a contract, or b) open an account with that currency. As I've stated, I'm not a lawyer, so none of the above should be interpreted as legal advice. That being said, I'll reiterate again that the concept of depositum irregulare is a concept from ancient Roman law. Trying to apply it within a modern legal system without a contract is a potential recipe for disaster. If you need a legal solution to this problem (not that you do; I think what you're looking for is a bank), talk to a lawyer who understands modern law, since ancient Roman law isn't applicable to and won't pass muster in a modern-day court.\"",
"title": ""
},
{
"docid": "92c0079346d0ded3ed163d22572d3b90",
"text": "You are describing a corporation. You can set up a corporation to perform business, but if you were using the money for any personal reasons the courts could Pierce the corporate veil and hold you personally liable. Also, setting up a corporation for purely personal reasons is fraud.",
"title": ""
},
{
"docid": "f88dded301c180c38ceda078c73a1813",
"text": "California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :(",
"title": ""
},
{
"docid": "4f32f7e7afc39af60c5c839369e3106a",
"text": "If you were married the 250K protection can be expanded by the use of joint and individual accounts. A separate limit also exists for IRA accounts. With out those options you will have to put some additional money into another banking institution. This could be a bank or credit union. You have to be careful to make sure that any additional accounts have FDIC or NCUA (for Credit Unions) coverage. Some banking institutions try and turn customers to non-covered accounts that are either investment accounts or use a 3rd party to protect them. You could also use it to invest in US government bonds through Treasury direct. Though for just the few months that you will be in the excess position it probably isn't worth the hassle of treasury direct.",
"title": ""
},
{
"docid": "1e22e319440af62240c9722695ad34af",
"text": "All transactions involving fraud or theft are void by their nature. Title to your money never changes hands. You are entitled by law to have assets stolen from you returned to you. In cases of negligence or broker malfeasance, lawsuits or SIPC protection are your primary recourse.",
"title": ""
},
{
"docid": "b93de284953fa5486669f0c77bcc3907",
"text": "You seem to think that the term “held”is used correctly. There lies your logical fallacy. I made no such assumption. In my question I test both the use of the term “US economy” AND the term “held”. It is obvious you can’t “hold” income but if you want to get down to technicalities, both asset and income/expenses are types of accounts while the notion of “trust” is a legal construct to limit the rights of external creditors.",
"title": ""
},
{
"docid": "d51b2368c61b4de2a5d784f5ba5fdea4",
"text": "\"Like you said, it's important to keep your personal assets and company assets completely separate to maintain the liability protection of the LLC. I'd recommend getting the business bank account right from the beginning. My wife formed an LLC last year (also as a pass-through sole proprietorship for tax purposes), and we were able to get a small business checking account from Savings Institute and Trust that has no fees (at least for the relatively low quantity of transactions we'll be doing). We wrote it a personal check for startup capital, and since then, the LLC has paid all of its own bills out of its checking account (with associated debit card). Getting the account opened took less than an hour of sitting at the bank. Without knowing exactly where you are in Kentucky, I note that Googling \"\"kentucky small business checking\"\" and visiting a few banks' web sites provided several promising options for no-fee business checking.\"",
"title": ""
},
{
"docid": "ccd6c04e6e7945226099554ab39fd254",
"text": "If a person owes someone money, he can be sued for it, and forced to pay via court order. It is completely irrelevant who that person owes money to (here: a not specified 'estate'), and irrelevant what source they get money from (here: life insurance payout). What makes you think there is any special combination that allows the owing person to not pay their debt? If it would exist, everybody would use it to get out of his debt.",
"title": ""
},
{
"docid": "05138d6ecf3a3032a1b4aea9825ad0da",
"text": "\"For person A to be protected (meaning able to recover some or all of the money should the other party try to welsh on the deal), the two of them must have entered into a valid, binding contract where both parties acknowledge and agree to the debt and the terms. Such a contract is subject to the Statute of Frauds, a collection of laws governing contracts which is mostly borrowed from English common law. The basics are that in all cases, a \"\"contract\"\" is only formed when both parties agree, technically when one party accepts an offer made by the other party. Both the offer and acceptance must be made sincerely. For a contract, once entered, to be enforceable, proof of the contract's existence and terms must itself exist. Certain types of transactions (real estate, large amounts of money) require contracts to be in written form, and witnessed by a trusted third party (in most cases this party is required to be a notary public). And contracts must have a certain amount of quid-pro-quo; contracts that provide a unilateral benefit can be thrown out on a case-by-case basis. A contract that simply states that Person B owes Person A money, without stating what benefit Person A had provided Person B in return for the money (in this case A gives B the money to begin with), is unenforceable. The benefits must of course be legal on both sides; a contract to deliver 5 tons of cocaine will not be upheld by any court in any free country, and neither will any contract attempting to enforce hush money, kickbacks, bribery etc (though some toe the line; one could argue that a signing bonus is tantamount to bribery). In some cases even seemingly benign clauses, like \"\"escape clauses\"\" allowing one party a \"\"free out\"\", can make the contract unenforceable as they could be abused to the severe detriment of one party. There are also jurisdiction-specific rules, such as limits on \"\"finance charges\"\" for debts not owed to a \"\"bank\"\" (a bar, for instance, cannot charge 10% on an outstanding tab in the United States). This is HUGE for your example, because if Person A had specified an interest rate in excess of the allowed rate for non-bank lenders, not only will the contract get thrown out even though Person B agreed to the terms, but Person A could find themselves on the hook for punitive damages payable to Person B, FAR in excess of the contracted amount. Given that the agreement meets all tests of validity for a contract, if either party fails to perform in accordance with the contract, causing a loss or \"\"tort\"\" for the other party, the injured party can sue. Generally the two options are \"\"strict performance\"\" (the injuring party is ordered by the court to comply exactly with the terms of the contract), or payment of net actual damages and dissolution of the contract. In your example, if Person A had lent Person B money, strict performance would mean payment of the debt in the installments agreed, at the rate agreed; actual damages would be payment of the outstanding balance plus current interest charges (without any further penalty). Notice that it's \"\"net\"\" damages; if Person A was to issue the loan in installments, and missed one, causing Person B to suffer damages from the loss of expected cash flow directly resulting in their failure to pay according to the terms, then Person B's proven damages are subtracted from A's; very often, the plaintiff in a suit to recover money can end up owing the defendant for a prior failure to perform. There are further laws governing bankruptcy; basically, if the other person cannot satisfy the contract and cannot pay damages, they will pay what they can, and the contract is terminated with prejudice (\"\"no blood from a turnip\"\").\"",
"title": ""
},
{
"docid": "101539eaf2a1c7edd0566ddfeec41f5f",
"text": "As an ordinary shareholder, yes you are protected from recourse by the debtors. The maximum amount you can lose is the amount you spent on the shares. The rules might change if you are an officer of the company and fraud is alleged, but ordinary stockholders are quite well protected. Why are you worried about this?",
"title": ""
},
{
"docid": "a721eb4ab0265595914c1140f7df4c50",
"text": "\"There are two types of insurance, which causes some confusion. Social Security Disability Insurance (which you indicate you have) is insurance you can receive benefit from if you earn enough \"\"work credits\"\" (payroll taxes) prior to your disability onset. It is not a needs-based program. Supplemental Security Income is a need-based program which does not consider your work history. To qualify for this, your total assets need to be lower than some threshold and your family income also below some threshold. If you inherit a home, or money, I doubt this would jeopardize your SSDI qualification, since your qualification was based on a disabling condition and work history. If you inherit an income property, which you manage (i.e. you become a landlord), this may jeopardize your claim that you are unable to work. Even if you are not making an \"\"income\"\" as the landlord, but the work your are performing is deemed to have some \"\"value\"\" this too could jeopardize your claim. All of this can be very complicated, and there are some excellent references on the web including SSA website, and some other related websites. Finally, if you become able to work while on SSDI, your benefit may/will end depending on the level of work you are able to perform. But just because you are able to work again does not mean you need to repay past benefits received (assuming your condition has not been falsified). Your local social security office, or the social security main office both offer telephone support and can also answer questions regarding your concern. Here are a couple relevant links:\"",
"title": ""
}
] |
fiqa
|
c4f83607f17fef5540a0475172e6bfce
|
Can travel expenses be deducted from Form 1040A if they were used to gather material for a book?
|
[
{
"docid": "4feb648016f073df68bca025da36bfd5",
"text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"",
"title": ""
}
] |
[
{
"docid": "fab076774b036cd9084c4f5e2bad63c9",
"text": "I'm not an expert, but here's my $0.02. Deductions for business expenses are subject to the 2% rule. In other words, you can only deduct that which exceeds 2% of your AGI (Adjusted Gross Income). For example, say you have an AGI of $50,000, and you buy a laptop that costs $800. You won't get a write-off from that, because 2% of $50,000 is $1,000, and you can only deduct business-related expenses in excess of that $1,000. If you have an AGI of $50,000 and buy a $2,000 laptop, you can deduct a maximum of $1,000 ($2,000 minus 2% of $50,000 is $2,000 - $1,000 = $1,000). Additionally, you can write off the laptop only to the extent that you use it for business. So in other words, if you have an AGI of $50,000 and buy that $2,000 laptop, but only use it 50% for business, you can only write off $500. Theoretically, they can ask for verification of the business use of your laptop. A log or a diary would be what I would provide, but I'm not an IRS agent.",
"title": ""
},
{
"docid": "3a00d5959b32ca0bc12b319ae14ed2da",
"text": "IRS pub 521 has all the information you need. Expenses reimbursed. If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. See Choosing when to deduct, next. If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21 This is not unusual. Anybody who moves near the end of the year can have this problem. The 39 week time test also can be an issue that span over 2 tax years. I would take the deduction for the expenses as soon a I could, and then count the income in the later year if they pay me back. IF they do so before April 15th, then I would put them on the same tax form to make things easier.",
"title": ""
},
{
"docid": "c7f98dd7ed1bf4829b4c4624c3f71b51",
"text": "\"You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as \"\"personal use\"\", i.e.: salary.\"",
"title": ""
},
{
"docid": "8357a729b20014c82aa2ce046b89fe1c",
"text": "\"Gambling is perhaps not well defined, but it certainly doesn't include things like reality show winnings. However, it is possible he could deduct something for this. If the reality show qualifies as a \"\"hobby\"\", and his expenses exceed the 2% of AGI requirement, it's possible he could deduct those airplane tickets and such. That deduction is explained in Publication 529.\"",
"title": ""
},
{
"docid": "5126dea88a1255985cad7b47b0b23c47",
"text": "\"From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a \"\"hobby.\"\" Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit.\"",
"title": ""
},
{
"docid": "4d9bdb78150f5089baeab672332d02d2",
"text": "Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "71bd8b7bb71148feb7f19174d08ae7fa",
"text": "\"When I have a question about my income taxes, the first place I look is generally the Giant Book of Income Tax Information, Publication 17 (officially called \"\"Your Federal Income Tax\"\"). This looks to be covered in Chapter 26 on \"\"Car Expenses and Other Employee Business Expenses\"\". It's possible that there's something in there that applies to you if you need to temporarily commute to a place that isn't your normal workplace for a legitimate business reason or other business-related travel. But for your normal commute from your home to your normal workplace it has this to say: Commuting expenses. You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.\"",
"title": ""
},
{
"docid": "dba9b07b320be09c13482ec51eb32fac",
"text": "I think you might be missing something important here. If you are running a business, then any expenses that your business incurs are deductible. Yes, Kickstarter would report the full amount. The IRS requires them to report everything that you raised. However, the Kickstarter and Amazon fees would be a business expense. Your cost on the backer rewards are deductible business expenses as well. Legal fees, accounting fees: deductible. Money that you spend on equipment may not be deductible all in one year; you may have to depreciate it over multiple years. This is where the accountant that you are paying accounting fees to will come in handy. People who do an iOS app Kickstarter campaign for $5000 might have a few things going on that you don't:",
"title": ""
},
{
"docid": "61dba5aecad8bc42dfa6168de21ab588",
"text": "\"For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the \"\"refund\"\" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a \"\"don't ask, don't tell\"\" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this \"\"loophole\"\". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a \"\"donation\"\" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash.\"",
"title": ""
},
{
"docid": "ee21749916f89670ecfa90cfb2e9c360",
"text": "\"While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do I quantify the travel expenses? Generally, \"\"necessary and ordinary\"\" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say \"\"no\"\" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000 miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (\"\"pleasure\"\") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is \"\"business\"\" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the property? Although, again, the \"\"necessary and ordinary\"\" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA).\"",
"title": ""
},
{
"docid": "2d258d9865dc769c64e985ecef06366c",
"text": "1: Gambling losses not in excess of gambling winnings can be deducted on Schedule A, line 28. See Pub 17 (p 201). Line 28 catches lots of deductions, and gambling losses are one of them. See Schedule A instructions. 2: If the Mississippi state tax withheld was an income tax (which I assume it was), then it goes on Schedule A, line 5a. In the unlikely event it was not a state or local tax on income, but some sort of excise on gambling, then it may be deductible on line 8 as another deductible tax. It probably is not a personal property tax, which is generally levied against the value of things like cars and other movable property but not on receipts of cash; line 7 probably is not appropriate. The most likely result, without researching Mississippi SALT, is that it was an income tax. See Sched A Instructions for more on the differences between the types of taxes paid. Just to be clear, these statements hold if you are not engaging in poker as a profession. If you are engaging in poker as a business, which can be difficult to establish in the IRS' eyes, then you would use Schedule C and also report business and travel expenses. But the IRS is aware that people want to reduce their gambling income by the cost of hotels and flights to casinos, so it's a relatively high hurdle to be considered a professional poker player.",
"title": ""
},
{
"docid": "ae6ff1f0e9dd2c7b31393e2e69748b1e",
"text": "\"No, you capitalize all that and deduct as depreciation from the royalties. What it means is that you cannot deduct the expense when it is incurred, but only when you started receiving income that the expense was used to derive. This is similar to capitalizing building improvements which can only be deducted when you start getting rent, or capitalizing software development expenses which can only be deducted once you start selling/licensing the developed software. In the case of book writing - you capitalize the expenses and deduct them once you start receiving royalties. The period over which you deduct (the \"\"depreciation schedule\"\") depends on the type of the expense and the type of the income, so you better get a guidance from a licensed tax accountant (EA or CPA licensed in your State).\"",
"title": ""
},
{
"docid": "6f001f812032181c7036b08d9fa31e68",
"text": "Well, if you were a business, and your food and rent and travel expenses were business expenses, and you paid out less money than you earned, you *would* get a refund. If you can prove that an expense is tax deductible, then that's just what it is. For businesses, a net operating loss is tax deductible.",
"title": ""
},
{
"docid": "1c01283ab709a39fc1d09315caffed24",
"text": "The money from the employer is counted as income for you, and should be included in the numbers on your W-2. You also have tuition you paid. That is an educational expense. That would generally be a tax credit if you qualify for those educational tax credits. If the money from the employer was counted as income you can use also claim tuition expenses. If the money wasn't included as income you then can't claim the tuition as an educational expense. My experience has been that expenses such as books have not been covered, but could be paid for with the money from a 529. Money to cover mandatory fees: such as lab fees and a fee that all students must pay can be counted as tuition expenses. Regarding customized books, those are much harder to prove. If you were to count that particular book as a tuition expenses, and were audited, you would have to show them the book to prove it. Most books aren't mandatory. Also if you do want to claim the books as an expense, remember to account for the money that is returned if any are sold back to the bookstore at the end of the term.",
"title": ""
},
{
"docid": "5bbb5414747ce9d5812c9eb7c8af0030",
"text": "Yes, you can. That the books were purchased from abroad is irrelevant: you incurred an expense in the course of earning your income. If the books are expensive (>$300 per set iirc) you will need to deprecate them over a reasonable life time rather than claiming the entire amount up front. It doesn't matter whether what you got was a VAT Invoice; as long as you have some reasonable documentation of the expense you're ok.",
"title": ""
}
] |
fiqa
|
aaec1f824dbe49260adad7540e19125e
|
How to select a bank based on availability in two areas?
|
[
{
"docid": "cc1d45b2af46db3b272084bb00c15c5c",
"text": "Asking a bank for which ATM/branch network it belongs to and where those networks are would be your best bet.",
"title": ""
}
] |
[
{
"docid": "760bb7064f6c23da8d27ebfbb4b7786f",
"text": "Check global ATM alliance they are banks that use reciprocal benefits on each other in other countries without fees. For example the in the USA Bank of America and In France it is BNP Paribas. Both are banks in this alliance. I use this option between the United States and the Caribbean my banks of choice are Bank of America in the US and in the Caribbean I use Scotia Bankand since I have accounts in both weekends I can use both ATM cards on any of these two banks without any processing fees!!!! You should check the global ATM alliance to see if it is an option that you could use.",
"title": ""
},
{
"docid": "f5270451714dbad4892a4ef2814821af",
"text": "Now, whilst you recognize how beneficial a power bank institution is, it is pertinent to figure out how to choose a strength bank that high-quality suits your device and requirements for the cell phone. The maximum important element is to test the battery size of your cellular cell phone or tablet and compare it with the potential of the power bank institution. The ability of a power bank has to be at least the same as the battery length. This selection basis will make sure which you pick out a strength bank, which gives you minimal 1-complete charge in your cellular telephone. Another vital thing that should be taken into consideration whilst buying energy bank online is its type. Each kind plays in another way and accordingly, you should pick out the one that high-quality fits your requirements.",
"title": ""
},
{
"docid": "844635e1b2e020087819c52e17365309",
"text": "\"Typically in on campus recruiting, at, as you said, a limited number of schools. It seemed safe to assume this wasn't OP's situation. \"\"Breaking in to banking\"\" is effectively impossible for a random profile post-graduation from a non-target. As it turns out, the job OP is talking about isn't in this area so it's irrelevant.\"",
"title": ""
},
{
"docid": "a81f01ff15ce6066d8db54a2328a24ee",
"text": "Three big ones that are common in almost all banks (though, individually, they may have other criteria): Other criteria I've seen (while working in the banking industry - varying by bank): the average balance you keep on deposit accounts (checking/savings/CDs/etc), number of overdraft fees in the past 12 months (one bank I worked for wouldn't approve a credit card if a customer had more than 5 overdrafts in the past year), the length of time a customer had been with the bank. Note that a credit card only company, like AmEx, may have different criteria in that they don't offer all the other type of accounts that other other banks do.",
"title": ""
},
{
"docid": "e34390210a590d11712ad5d019a137c8",
"text": "There are 2 credit unions in the Metro NY area that are open to everyone: You might also want to check out aSmarterChoice.org to see if there are other credit union options based on where you live, work, worship & more.",
"title": ""
},
{
"docid": "d99c0fecb93d42157abb6924bf80d1c7",
"text": "As has been stated, you don't need to actively bank with a credit union to apply for one of their credit cards. That said, one benefit to having account activity, and significant capital with a CU, is to increase the likelihood of having a larger credit line granted to you, when you do apply. If you are going to use the card sparingly however, then this is a non issue. That said, if you really want to maximize card benefits, then you want to look for cards with large sign up bonuses (e.g. Chase Sapphire, or Ink Bold if you have a business) and sign up exclusively for those bonuses. These cards offer rewards in excessive value of $1000 in travel services (hotels/plane tickets), or $500 cash back if you prefer straight cash back redemptions. If you prefer to keep it really simple, you can sign up for a cash back card, like the Amex Fidelity, which offers 2% cash back everywhere, with no annual fee (albeit the cash back is through their investment account, which you don't actually have to 'invest' with). Personally, I have the Penfed card, and use it exclusively for gas (5% cash back). I also have a Charles Schwab bank account, which I keep funded exclusively for ATM withdrawals (free ATM usage, worldwide, 100% fee reimbursement). I use the accounts exclusively for the benefit they provide me, and no more and have never had an issue. I also have 3 dozen other credit cards which I signed up for exclusively for the sign up bonus, but that's outside the scope of this question. I only mention it because you seem to believe it is difficult to get approved for a new credit line. If your credit is good however, you won't have a problem. For a small idea, of how to maximize credit card bonus categories, I would advise you read this. As mentioned in the article, its possible to get rewards almost everywhere you shop. In short, anytime you use cash, you are missing out on a multitude of benefits a credit card offers you (e.g. see the benefits of a visa signature card) in addition to points/cash back.",
"title": ""
},
{
"docid": "856526cff38072a850da229d1ebc3294",
"text": "My small business has developed a relationship with a larger branch of a regional bank. I generally work on site or at home, so when I need a space for interviews etc. I just call the bank and reserve the meeting room there.",
"title": ""
},
{
"docid": "0c48f8aa85131df31be74b8f18f3c5fd",
"text": "The SWIFT format has multiple place holders. The Beneficiary Bank and Account can be specified using Local Sort Codes [ABA number in this example]. However you would still need to specify the Correspondent Bank and its BIC.",
"title": ""
},
{
"docid": "5d4b34e93db03a9b65fa0b00110e7e9d",
"text": "\"This seems almost overkill, but if you want to... I suppose one thing you could do is create a separate money in transit account, similar to Account Payable and Account Receivable. In your bookkeeping, transfer the money from the source account to the holding account on the date that the source bank withdraws it, and then transfer the money to the destination account on the date that the target bank deposits it. This both makes it clear that there is money going between places, and ensures that the daily balance on each \"\"physical\"\" account is accurate. For cash withdrawals and deposits, I'd just use the date when you make the withdrawal, since that is the day from which the money is available in the new location rather than the old one. Note: I don't know if this is the \"\"proper\"\" way to do it in a random jurisdiction, but I doubt being this explicit can get you into trouble.\"",
"title": ""
},
{
"docid": "9f4963fce4cb631d814a5851479c5bf4",
"text": "\"Small community banks are absolutely vital to our economy. Plenty of people these days talk about \"\"buying local,\"\" but you never hear them talking about banking local. My friends, for the most part, lean left of center politically, so they constantly complain about Wal-Mart and other large brick and mortar chains, but when I called them out on their banking by asking them to pull out their debit cards, they all banked with larger banks; Chase, PNC, Key; the only person (beside myself) who didn't bank with a large national/multi - national bank uses Huntington, which is still a very large regional bank with over $100 billion in assets. They said they didn't want to have to pay ATM fees, to which I responded that many community banks will reimburse the customer for those fees up to a certain amount (like my bank does.) They just shrugged and said they liked the convenience of it, so I asked them why do they think people shop at Wal-Mart? I didn't really get a good answer to that; they just said \"\"it's different.\"\" The best way to invest in your community is to bank with a local community bank. Those mom and pop shops you love so much; the plumber who lives down the street; the micro brewery that just opened up all do their banking with the local community bank.\"",
"title": ""
},
{
"docid": "18dd4413b7bca1d8c9e8b9184dc88942",
"text": "You must consider the different levels of risk associated with each loan. When the bank loans you money, it does so based on a high degree of information about your financial situation (through your credit report + additional information gathered at the time of granting your request). It feels quite confident that you will repay them, and therefore considers you to be low risk. In order to make a profit off of all its low risk clients, the bank only needs to charge a small rate of interest - competitive with the market but enough to cover the losses from clients who will default. When you loan money through a peer-to-peer program, you are at two distinct disadvantages from the bank: (1) Your loan portfolio will not be diversified; that is, you may have only a single person or a small handful of people owing you money. Any catastrophic event in their lives may wipe out their loan to you. Whereas the bank can play the averages with a broader client base. (2) You have less information, and ultimately less (effective) power to reclaim your losses. Would you feel confident walking behind the desk at a bank today, and deciding whether to approve someone's loan based on the information that the bank's back-end has already determined is necessary to make that decision? Now how about when you are doing it on your own? Because of this, you take on more risk from a peer-to-peer loan than a bank takes on from you. That's why the person is willing (or, required due to market availability) to pay a higher rate; they know they are higher risk. That doesn't mean this is a bad idea, just that there is a specific reason that the difference in rates exists, and it implies that you should consider carefully whether the risks outweigh the benefits. Note that the concept of taking a buy/sell position on two theoretically identical assets while earning a net profit at no risk is known as 'arbitrage'. Arbitrage situations rarely exist, and never for long. Whenever you see a position that appears to be arbitrage, consider what might make it not so. ie: you could buy inventory in location A, and sell it at 10% higher margin in location B - but have you considered transportation, carrying costs, and interest for the period that you physically held the inventory? The appearance of arbitrage may (in my opinion) be a sign that you have incomplete information.",
"title": ""
},
{
"docid": "0f2714cd046b95ffdc221b4c840b6a03",
"text": "I work in banking for the private bank division for a major bank as a banker. I have been helping clients with these types of transactions for years. I believe that large transactions like this are best left to the big boys. That is where the talented bankers/loan officers/underwriters are, and that is the type of transaction they specialize in. I know for a fact that your credit union will not be able to suit your needs, and a smaller bank will be tough to deal with. I wouldn't worry at all about the credit pulls as much as picking a rock solid bank with lots of experiences doing these kinds of deals. That is my 2 cents, albeit a little bit biased, but it is also coming from experience. History with the bank definitely matters, but what business you can bring to the bank along with the lending (deposits, 401k management, personal investments, business services, etc) matter just as much and can make or break the approval/decline or even the terms being favorable or not favorable to your company.",
"title": ""
},
{
"docid": "6c36bf614167d70380898e097037204d",
"text": "If your end goal is IB and you can get in to a good school, then the second one. Otherwise, an MFin from a non-target school will be a difficult sell without experience, I think. /r/financialcareers if you haven't tried already",
"title": ""
},
{
"docid": "1f29a91f8306aa4d1ac166445ac5fc43",
"text": "\"I think that your best option is to use the internet to look for sites comparing the various features of accounts, and especially forums that are more focused on discussion as you can ask about specific banks and people who have those accounts can answer. \"\"Requests for specific service provider recommendations\"\" are off-topic here, so I won't go into making any of my own bank recommendations, but there are many blogs and forums out there focusing on personal finance.\"",
"title": ""
},
{
"docid": "0a7256c869390ae3442a3831d5568b59",
"text": "If you have kids, there are also 529 funds to consider. They aren't pre-tax, but do have tax advantages. If your employer doesn't have a 401k, chances are they don't offer Health Savings Accounts, but that is another thing to look at.",
"title": ""
}
] |
fiqa
|
b4d8dba5123eef99eda457ffb74221ab
|
Can I default on my private student loans if I was an international student?
|
[
{
"docid": "7554414804749280c33547386889a22d",
"text": "What are the consequences if I ignore the emails? If you ignore the emails they will try harder to collect the money from you until they give up. Unlike what some other people here say, defaulting on a loan is NOT a crime and is NOT the same as stealing. There is a large number of reasons that can make someone unable to pay off a loan. Lenders are aware of the risk associated with default; they will try to collect the debt but at the end of the day if you don't have money/assets there is not much they can do. As far as immigration goes, there is nothing on a DS-160 form that asks you about bankruptcies or unpaid obligations. I doubt the consular officer will know of this situation, but it is possible. It is not grounds for visa ineligibility however, so you will be fine if everything else is fine. The only scenario in which unpaid student loans can come up relevant in immigration to the US is if and when you apply for US Citizenship. One of the requirements for Citizenship is having good moral character. Having a large amount of unpaid debt constitutes evidence of a poor moral character. But it is very unlikely you'd be denied Citizenship on grounds of that alone. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Yes, they probably already have. How would this affect me if I visit America often? Does this mean I would not ever be able to live in America? No. See above. You will have a hard time borrowing again. Will they know when I come to America and arrest me at the border or can they take away my passport? No. Unpaid debt is no grounds for inadmissibility, so even if the CBP agent knows of it he will not do anything. And again, unpaid debt is not a crime so you will not be arrested.",
"title": ""
},
{
"docid": "913fd9900fd961dcd169ed3b3edaac1d",
"text": "You signed a contract to pay the loan. You owe the money. Stories of people being arrested over defaulted student loans are usually based in contempt of court warrants when the person failed to appear in court when the collection agency filed suit against them. Explore student loan forgiveness program. Research collections and bankruptcy and how to deal with collection agencies. There are pitfalls in communicating with them which restart the clock on bad debt aging off the credit report, and which can be used to say that you agreed to pay a debt. For instance, if you make any sort of payment on any debt, a case can be made that you have assumed the debt. Once you are aware of the pitfalls, contact the collection agency (in writing) and dispute the debt. Force them to prove that it is your debt. Force them to prove that they have the right to collect it. Force them to prove the amount. Dispute the fairness of the amount. Doubling your principal in 6 years is a bit flagrant. So, work with the collectors, establish that the debt is valid and negotiate a settlement. Or let it stay in default. Your credit report in the US is shot. It will be a long time before the default ages off your report. This is important if you try to open a bank account, rent an apartment, or get a job in the US. These activities do not always require a credit report, but they often do. You will not be able to borrow money or establish a credit card in the US. Here's a decent informational site regarding what they can do to collect the loan. Pay special attention to Administrative Wage Garnishment. They can likely hit you with that one. You might be unreachable for a court summons, but AWG only requires that the collectors be able to confirm that you work for a company that is subject to US laws. Update: I am informed that federally funded student loans are not available to international students. AWG is only possible for debts to the federal government. Private companies must go through the courts to force settlement of debt. OP is safe from AWG.",
"title": ""
},
{
"docid": "0d2f672f4d952b54b5b747e72909d1ce",
"text": "What are the consequences if I ignore the emails? That would depend on how much efforts the collection agency is ready to put in. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Possibly yes, they may already be doing it. Will they know when I come to America and arrest me at the border or can they take away my passport? For this, they would have to file a civil case in the court and get an injunction to arrest you. Edit: Generally it is unlikely that the court may grant an arrest warrant, unless in specific cases. A lawyer advise would be more appropriate. End Edits It is possible that the visa would also get rejected as you would have to declare previous visits and credit history is not good.",
"title": ""
}
] |
[
{
"docid": "512d7c4e1f8831007a9b824440f78073",
"text": "Only if (or to put it even more bluntly, when) they default. If your friend / brother / daughter / whoever needs a cosigner on a loan, it means that people whose job it is to figure out whether or not that loan is a good idea have decided that it isn't. By co-signing, you're saying that you think you know better than the professionals. If / when the borrower defaults, the lender won't pursue them for the loan if you can pay it. You're just as responsible for the loan payments as the original borrower, and given that you were a useful co-signer, probably much more likely to be able to come up with the money. The lender has no reason to go after the original borrower, and won't. If you can't pay, the lender comes after both of you. To put it another way: Don't think of cosigning as helping them get a loan. Think of it as taking out a loan and re-loaning it to them.",
"title": ""
},
{
"docid": "2fb2f58dbd04dbe88f23a6ab7b8993b0",
"text": "\"I'd check the terms of the student loan. It's been a long time since I had a student loan, but when I did it had restrictions that it could only be used for educational expenses, which they pretty clear spelled out meant tuition, books, lab fees, I think some provision for living expenses. If your student loan is subsidized by the government, they're not going to let you use it to start a business or go on vacation ... nor are they likely to let you invest it. Even if it is legal and within the terms of the contract, borrowing money to invest is very risky. What if you invest in the stock market, and then the stock market goes down? You may find you don't have the money to make the payments on the loan. People do this sort of thing all the time -- that's what \"\"buying on margin\"\" is all about. And some of them lose a bundle and get in real trouble.\"",
"title": ""
},
{
"docid": "39e2e45e8bcc7adf720d1c39d4c7aa85",
"text": "\"Is a student loan a type of loan or just a generic name used to refer to a loan for someone who is going back to school? A student loan from the federal government is a specific type of loan used for education purposes (i.e. attending college). They have guidelines associated with them that are very flexible as compared to a student loan from a private bank. If a student loan is a different type of loan, does it only cover the costs of going to the school? Every student at a university has a \"\"budget\"\" or the \"\"cost of attendance\"\". That includes direct and indirect costs. Direct costs are ones billed directly to you (i.e. tuition, room and board - should you choose to live on campus, and associated fees). Indirect costs are such things like books, travel expenses (if you live out of state), and personal things. Direct costs are controlled by the school. Indirect costs are estimated. The school will usually conduct market research to determine the costs for indirect items. Some students go above that, and some go below. For example, transportation is an indirect cost. A school could set that at $500. There are students who will be above that, and some below that. If you choose not to live on campus, then rent and food will become an indirect cost. Student loans can cover up to 100% of your budget (direct and indirect added together). If your total budget is $60,000 (tuition, room and board, transportation, books, supplies, etc.) Then you are able to borrow up to that amount ($60,000). However, because your budget is both direct and indirect costs, you will only be billed for your direct costs (tuition, etc.). So if your direct costs equal $50,000 and your student loan was certified for $60,000, then you will get that $10,000 back in the form of a refund from the school. That does not mean you don't have to pay it back - you still do. But that money is meant for indirect costs (i.e. books, rent - if you're not staying on campus, etc.). If your school is on semesters vs quarters, then that amount is divided between the terms. Summer term is not factored in, that's another process. Also with student loans, there are origination costs - the money associated with processing a loan. A good rule of thumb is to never borrow more than you need. Source: I used to work in financial aid at my college.\"",
"title": ""
},
{
"docid": "e41502ddaa414a3b7489fe0c4064fca9",
"text": "I would be surprised if a bank cared about an undergraduate major. Usually, such things are only important if it is a professional degree, like a law degree or medical degree. The big issue is that if you are not a US citizen, a US bank would be unlikely to make an unsecured loan because you could just return to your country and renege on the loan and they would have no way to collect. Therefore, a bank in your own country might be more logical. If you get accepted by a top Ivy school, they all have financial policies that will allow you to attend regardless of how rich or poor you are, so if you are applying to a top school (Harvard, Princeton, MIT, Stanford, Yale) and get accepted, they will fully finance your attendance. The only exception is if (A) they find out you lied about something, or (B) your parents/family are wealthy and they refuse to pay anything. As long as neither of these two things is true, all of the schools listed GUARANTEE they will provide sufficient financial aid. Princeton even has a no-loan policy, which means not only will they fund your attendance, they will do so without you having to take on any loans.",
"title": ""
},
{
"docid": "779300a60e57ff333c291551940b1bbd",
"text": "\"Please clarify your question. What do you mean by \"\"..loan in Greece\"\"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time.\"",
"title": ""
},
{
"docid": "148f0f976110c67e4db7052db46b5637",
"text": "\"Without all the details it's hard to tell what options you may have, but none of them are good. When you cosign you are saying that, you believe the primary signer will make good on the loan, but that if he doesn't you will. You are 100% responsible for this debt. As such, there are some actions you can take. First, really try to stress to your friend, that they need to get you outta this loan. Urge them to re-finance with out you if they can. Next look for \"\"better\"\" ways of defaulting on the loan and take them. Depending on what the loan is for you could deed-in-lue or short sale. You may just have to admit default. If you work with the bank, and try not to drag out the process, you will likely end up in a better place down the line. Also of importance is ownership. If you pay the loan, do you get ownership of the thing the loan was secured against? Usually not, but working with an attorney and the bank, maybe. For example, if it's a car, can the \"\"friend\"\" sign over the car to you, then you sell it, and reduce your debt. Basically as a cosigner, you have some rights, but you have all the responsibilities. You need to talk to an attorney and possibly the bank, and see what your options are. At this point, if you think the friend is not that much of a friend anymore, it's time to make sure that any conversation you have with them is recorded in email, or on paper.\"",
"title": ""
},
{
"docid": "e3ee988439f40ec0a196798f8437c0e5",
"text": "a) Talk to the financial aid counselors at your school. There's a very good chance they have at least a partial solution for you. Let them know your dependency status has changed (if it has). I declared myself to be financially independent from my parents (I really was) and qualified for more aide. b) How much austerity are you willing to endure? I once spent two years eating beans & rice twice a day (lots of protein and other nutrients) while I worked full-time and went back to school to pursue a second degree part-time. I also shunned all forms of recreation (not even a movie) to save money (and so I could focus on staying current with assignments). During another period in my life, I gave up cable, cell-phone, land-line (and used Skype only), and avoided unnecessary use of my car, so I could clear a debt. You'd be amazed at how much you can squeeze from a budget if you're willing to endure austerity temporarily. c) Consider going to school part-time, taking as few as one course at a time if allowed. It's a lot easier to pay for one or two courses than to pay for 4 or 5. It may take longer, but at least you won't lose your credits and it won't take forever.",
"title": ""
},
{
"docid": "1165f18fe6b2faae232ce9041dd42660",
"text": "I suppose it depends on the circumstances, but I wouldn't advise it. If you default on a loan to the bank it might ruin your credit, if you default to a family member it has the potential for much more damage in the form of fostering bad feelings and hurt the relationship.",
"title": ""
},
{
"docid": "00b6bde49e1b1a7faf3b2b014491a62f",
"text": "I got a credit card as a student with no income, not even a part time job. They called me, I agreed to one thing and they did another and now I have an old credit history. They don't do this anymore. But technically, student loan debt is unsecured?",
"title": ""
},
{
"docid": "e3e58d223a5031306e05985a5cbdf450",
"text": "\"No idea what you are trying to say here. You default on a loan, student or otherwise, by not paying. That is what creates the default, but you still owe it. Student loans actually can be discharged, but it is very uncommon and an uphill battle. You have to prove \"\"undue hardship\"\" which has a rather high standard. The last firm I worked at did manage to get a large amount of student loans discharged for someone who was in a car wreck and became a quadriplegic after incurring the student loan. And even that was not an easy case, my old firm was actually rather pleased at their success.\"",
"title": ""
},
{
"docid": "5ce090248b34fd727d07721bd7a15640",
"text": "I completely agree with requirements, like GPA. I think that weeds some bad loans out, and is a much better version of tough love than non-dischargable debt once you are out of school. The non-discharged debt problem is tough, and I think this aspect ties into the college cost inflation: If you, as a lender, basically have a perpetual lien on someone because they can't discharge the debt, then you (lender) can issue riskier loans, and more of them. I haven't heard the term 'subprime loans' used to describe student debt, but I think the term is just as applicable to bad student creditors as it was to bad home creditors in the housing bubble. There seems to be moral hazard involved for lenders that have non-discharge covenants, and so they lend, even after government lenders tell people 'no more.'",
"title": ""
},
{
"docid": "e24b171d757ef9cc138878484923fbde",
"text": "\"You promised to pay the loan if he didn't. That was a commitment, and I recommend \"\"owning\"\" your choice and following it through to its conclusion, even if you never do that again. TLDR: You made a mistake: own it, keep your word, and embrace the lesson. Why? Because you keep your promises. (Nevermind that this is a rare time where your answer will be directly recorded, in your credit report.) This isn't moralism. I see this as a \"\"defining moment\"\" in a long game: 10 years down the road I'd like you to be wise, confident and unafraid in financial matters, with a healthy (if distant) relationship with our somewhat corrupt financial system. I know austerity stinks, but having a strong financial life will bring you a lot more money in the long run. Many are leaping to the conclusions that this is an \"\"EX-friend\"\" who did this deliberately. Don't assume this. For instance, it's quite possible your friend sold the (car?) at a dealer, who failed to pay off this note, or did and the lender botched the paperwork. And when the collector called, he told them that, thinking the collector would fix it, which they don't do. The point is, you don't know: your friend may be an innocent party here. Creditors generally don't report late payments to the credit bureaus until they're 30 days late. But as a co-signer, you're in a bad spot: you're liable for the payments, but they don't send you a bill. So when you hear about it, it's already nearly 30 days late. You don't get any extra grace period as a co-signer. So you need to make a payment right away to keep that from going 30 late, or if it's already 30 late, to keep it from going any later. If it is later determined that it was not necessary for you to make those payments, the lender should give them back to you. A less reputable lender may resist, and you may have to threaten small claims court, which is a great expense to them. Cheaper to pay you. They say France is the nation of love. They say America is the nation of commerce. So it's not surprising that here, people are quick to burn a lasting friendship over a temporary financial issue. Just saying, that isn't necessarily the right answer. I don't know about you, but my friends all have warts. Nobody's perfect. Financial issues are just another kind of wart. And financial life in America is hard, because we let commerce run amok. And because our obsession with it makes it a \"\"loaded\"\" issue and thus hard to talk about. Perhaps your friend is in trouble but the actual villain is a predatory lender. Point is, the friendship may be more important than this temporary adversity. The right answer may be to come together and figure out how to make it work. Yes, it's also possible he's a human leech who hops from person to person, charming them into cosigning for him. But to assume that right out of the gate is a bit silly. The first question I'd ask is \"\"where's the car?\"\" (If it's a car). Many lenders, especially those who loan to poor credit risks, put trackers in the car. They can tell you where it is, or at least, where it was last seen when the tracker stopped working. If that is a car dealer's lot, for instance, that would be very informative. Simply reaching out to the lender may get things moving, if there's just a paperwork issue behind this. Many people deal with life troubles by fleeing: they dread picking up the phone, they fearfully throw summons in the trash. This is a terrifying and miserable way to deal with such a situation. They learn nothing, and it's pure suffering. I prefer and recommend the opposite: turn into it, deal with it head-on, get ahead of it. Ask questions, google things, read, become an expert on the thing. Be the one calling the lender, not the other way round. This way it becomes a technical learning experience that's interesting and fun for you, and the lender is dreading your calls instead of the other way 'round. I've been sued. It sucked. But I took it on boldly, and and actually led the fight and strategy (albeit with counsel). And turned it around so he wound up paying my legal bills. HA! With that precious experience, I know exactly what to do... I don't fear being sued, or if absolutely necessary, suing. You might as well get the best financial education. You're paying the tuition!\"",
"title": ""
},
{
"docid": "4d2cba2470a3995bf4629d10ac0cb853",
"text": "It looks like your visa being refused is entirely irrelevant. What happens in bankruptcy is that all the assets of the bankrupt entity are taken over, liquidated, and the proceeds are distributed to the creditors. You're one of the creditors, and as you've been told - the proceeds are not enough to pay all the creditors in full. This is quite common in bankruptcies. What you can do is sue in court and demand priority over other creditors, but... a. You're exactly the same as many other creditors (rest of the students), so why would you get a priority? b. Suing costs money and even if you get more, you'll pay way more for legal fees and expenses. What else can you do? If you paid with a credit card - your credit card company may be able to reverse charges. Sometimes that works, depending on how fast you move. If you paid with a check - your bank may similarly be able to stop payment on the check. This provided it hasn't been settled yet.",
"title": ""
},
{
"docid": "8700cf158da8042aaddd73f9043e4aef",
"text": "\"This election only applies to payments that you make within 120 days of your having received loan money. These wouldn't be required payments, which is why they are called \"\"early\"\" payments. For example, let's say that you've just received $10,000 from your lender for a new loan. One month later, you pay $500 back. This election decides how that $500 will be applied. The first choice, \"\"Apply as Refund,\"\" means that you are essentially returning some of the money that you initially borrowed. It's like you never borrowed it. Instead of a $10,000 loan, it is now a $9,500 loan. The accrued interest will be recalculated for the new loan amount. The second choice, \"\"Apply as Payment,\"\" means that your payment will first be applied to any interest that has accrued, then applied to the principal. While you are in school, you don't need to make payments on student loans. However, interest is accruing from the day you get the money. This interest is simple interest, which means that the interest is only based on the loan principal; the interest is not compounding, and you are not paying interest on interest. After you leave school and your grace period expires, you enter repayment, and you have to start making payments. At this point, all the interest that has accrued from the time you first received the money until now is capitalized. This means that the interest is added to your loan principal, and interest will now be calculated on this new, larger amount. To avoid this, you can pay the interest as you go before it is capitalized, which will save you from having to pay even more interest later on. As to which method is better, just as they told you right on the form, the \"\"Apply as Refund\"\" method will save you the most money in the long run. However, as I said at the beginning, this election only applies if you make a payment within 120 days from receiving loan funds. Since you are already out of school and in repayment, I don't think it matters at all what you select here. For any students reading this and thinking about loans, I want to issue a warning. Student loans can ruin people later in life. If you truly feel that taking out a loan is the only way you'll be able to get the education you need, minimize these as much as possible. Borrow as little as possible, pay as much as you can as early as you can, and plan on knocking these out ASAP. Great Lakes has a few pages that discuss these topics:\"",
"title": ""
},
{
"docid": "fcf00c058fb795ee2b66e94a51bb9c79",
"text": "\"According to the FAFSA info here, they will count your nonretirement assets when figuring the EFC. The old Motley Fool forum question I mentioned in my comment suggests asking the school for a \"\"special circumstances adjustment to your FAFSA\"\". I don't know much about it, but googling finds many pages about it at different colleges. This would seem to be something you need to do individually with whatever school(s) your son winds up considering. Also, it is up to the school whether to have mercy on you and accept your request. Other than that, you should establish whatever retirement accounts you can and immediately begin contributing as much as possible. Given that the decision is likely to be complicated by your foreign income, you should seek professional advice from an accountant versed in such matters.\"",
"title": ""
}
] |
fiqa
|
00afc82fbf5df2d9a6020da369a56e7c
|
What are my options to make my money work for me?
|
[
{
"docid": "a0e05e8086085091d8d3e5c8e254edcf",
"text": "As stated in the comments, Index Funds are the way to go. Stocks have the best return on investment, if you can stomach the volatility, and the diversification index funds bring you is unbeatable, while keeping costs low. You don't need an Individual Savings Account (UK), 401(k) (US) or similar, though they would be helpful to boost investment performance. These are tax advantaged accounts; without them you will have to pay taxes on your investment gains. However, there's still a lot to gain from investing, specially if the alternative is to place them in the vault or similar. Bear in mind that inflation makes your money shrink in real terms. Even a small interest is better than no interest. By best I mean that is safe (regulated by the financial authorities, so your money is safe and insured up to a certain amount) and has reasonable fees (keeping costs low is a must in any scenario). The two main concerns when designing your portfolio are diversification and low TER (Total Expense Ratio). As when we chose broker, our concern is to be as safe as we possibly can (diversification helps with this) and to keep costs at the bare minimum. Some issues might restrict your election or make others seem better. Depending on the country you live and the one of the fund, you might have to pay more taxes on gains/dividends. e.g. The US keeps some of them if your country doesn't have a special treaty with them. Look for W-8Ben and tax withholding for more information. Vanguard and Blackrock offer nice index funds. Morningstar might be a good place for gathering information. Don't trust blindly the 'rating'. Some values are 'not rated' and kick ass the 4 star ones. Again: seek low TER. Not a big fan of this point, but I'm bound to mention it. It can be actually helpful for sorting out tax related issues, which might decide the kind of index fund you pick, and if you find this topic somewhat daunting. You start with a good chunk of money, so it might make even more sense in your scenario to hire someone knowledgeable and trustworthy. I hope this helps to get you started. Best of luck.",
"title": ""
}
] |
[
{
"docid": "51863cda125d76edb58e5d99691c7392",
"text": "\"As you've observed, when you're dealing with that amount of money, you're going to have to give up FDIC guarantees. That means that keeping the money in a bank account carries some risk with it: if that particular bank goes bust, you could lose most of your money. There are a few options to stretch the FDIC limit such as CDARS, but likely can't handle your hypothetical $800 million. So, what's a lucky winner to do? There are a few options, including treasury securities, money market funds, and more general capital investments such as stocks and bonds. Which one(s) are best depend on what your goals are, and what kind of risks you find acceptable. Money in the bank has two defining characteristics: its value is very stable, and it is liquid (meaning you can spend it very easily, whenever you want, without incurring costs). Treasury securities and money market funds each focus on one of these characteristics. A treasury security is a piece of paper (or really, an electronic record) saying that the US Federal Government owes you money and when they will pay it back. They are very secure in that the government has never missed a payment, and will move heaven and earth to make sure they won't miss one in the future (even taking into account recent political history). You can buy and sell them on an open market, either through a broker or directly on the Treasury's website. The major downside of these compared to a bank account is that they're not as liquid as cash: you own specific amounts of specific kinds of securities, not just some number of dollars in an account. The government will pay you guaranteed cash on specified dates; if you need cash on different dates, you will need to sell the securities in the open market and the price will be subject to market fluctuations. The other \"\"cash-like\"\" option is money market funds. These are a type of mutual fund offered by financial companies. These funds take your money and spread it out over a wide variety of very low risk, very short term investments, with the goal of ensuring that the full value will never go down and is available at any time. They are very liquid: you can typically transfer cash quickly and easily to a normal bank account, write checks directly, and sometimes even use \"\"online bill pay\"\"-like features. They have a very good track record for stability, too, but no one is guaranteeing them against something going terribly wrong. They are lower risk than a (non-FDIC-insured) bank account, since the investments are spread out across many institutions. Beyond those two somewhat \"\"cash-like\"\" options, there are of course other, more general investments such as stocks, bonds, and real estate. These other options trade away some degree of stability, liquidity, or both, in exchange for better expected returns.\"",
"title": ""
},
{
"docid": "380439ad0a98fffaa998ee865b58964b",
"text": "Check out this site: http://www.m-x.ca/produits_options_actions_en.php (Under the Trading Strategies). If you have a background in math or eco or are comfortable with graphs, I suggest you graph the payoffs of each of these strategies. It will really help you understand it. If you need help with this, let me know and I can draw a couple out for you. Your question is rather vague but also complicated however I will try to answer it. First off, many investors buy options to hedge against a current position in a stock (already own the stock). But you can also try to make money off of options rather than protecting yourself. Let's suppose you anticipate that a stock will increase in value so you want to capitalize on this. Suppose further that you have a small amount of money to invest, say $100. Suppose the stock is currently at $100 so that you can only afford 1 share. Suppose there is a call option out there with strike $105 that costs you only $1. Let's compare two scenarios: The stock increases to $120 at the maturity date of the option. So, you made a lot more money with the same initial investment. The amount of money you put in is small (i.e. can be perceived as low risk). However, if the stock price ended up being $104.90 then your options are worthless (i.e. can be perceived as high risk). HTH.",
"title": ""
},
{
"docid": "32c2294f4580f8255391a8dae4989cf4",
"text": "\"If you're making big money at 18, you should be saving every penny you can in tax-advantaged retirement accounts. (If your employer offers it, see if you can do a Roth 401(k), as odds are good you'll be in a higher tax bracket at retirement than you are now and you will benefit from the Roth structure. Otherwise, use a regular 401(k). IRAs are also an option, but you can put more money into a 401(k) than you can into an IRA.) If you do this for a decade or two while you're young, you'll be very well set on the road to retirement. Moreover, since you think \"\"I've got the money, why not?\"\" this will actually keep the money from you so you can do a better job of avoiding that question. Your next concern will be post-tax money. You're going to be splitting this between three basic sorts of places: just plain spending it, saving/investing it in bank accounts and stock markets, or purchasing some other form of capital which will save you money or provide you with some useful capability that's worth money (e.g. owning a condo/house will help you save on rent - and you don't have to pay income taxes on that savings!) 18 is generally a little young to be setting down and buying a house, though, so you should probably look at saving money for a while instead. Open an account at Vanguard or a similar institution and buy some simple index funds. (The index funds have lower turnover, which is probably better for your unsheltered accounts, and you don't need to spend a bunch of money on mutual fund expense ratios, or spend a lot of time making a second career out of stock-picking). If you save a lot of your money for retirement now, you won't have to save as much later, and will have more income to spend on a house, so it'll all work out. Whatever you do, you shouldn't blow a bunch of money on a really fancy new car. You might consider a pretty-nice slightly-used car, but the first year of car ownership is distressingly close to just throwing your money away, and fancy cars only make it that much worse. You should also try to have some fun and interesting experiences while you're still young. It's okay to spend some money on them. Don't waste money flying first-class or spend tooo much money dining out, but fun/interesting/different experiences will serve you well throughout your life. (By contrast, routine luxury may not be worth it.)\"",
"title": ""
},
{
"docid": "30ae8ec08eca9407c6e28b330c2f11e9",
"text": "Don't sit on it, because the money does not work for you. Add more money to it and buy a stock or stocks of the company.",
"title": ""
},
{
"docid": "52d739cbf7d802944cf3affba703fe57",
"text": "First thing to do right now, is to see if there's somewhere equally liquid, equally risk free you can park your cash for higher rate of return. You can do this now, and decide how much to move into less liquid investments on your own pace. When I was in grad school, I opened a Roth IRA. These are fantastic things for young people who want to keep their options open. You can withdraw the contributions without penalty any time. The earnings are tax free on retirement, or for qualified withdrawls after five years. Down payments on a first home qualify for example. As do medical expenses. Or you can leave it for retirement, and you'll not pay any taxes on it. So Roth is pretty flexible, but what might that investment look like? It in depends on your time horizon; five years is pretty short so you probably don't want to be too stock market weighted. Just recognize that safe short term investments are very poorly rewarded right now. However, you can only contribute earnings in the year they are made, up to a 5000 annual maximum. And the deadline for 2010 is gone. So you'll have to move this into an IRA over a number of years, and have the earnings to back it. So in the meanwhile, the obvious advice to pay down your credit card bills & save for emergencies applies. It's also worth looking at health and dental insurance, as college students are among the least likely to have decent insurance. Also keep a good chunk on hand in liquid accounts like savings or checking for emergencies and general poor planning. You don't want to pay bank fees like I once did because I mis-timed a money transfer. It's also great for negotiating when you can pay in cash up front; my car insurance for example, will charge you more for monthly payments than for every six months. Or putting a huge chunk down on a car will pretty much guarantee the best available dealer financing.",
"title": ""
},
{
"docid": "8dbae2056c5926e326a8d52d42980146",
"text": "\"What I would do, in this order: Get your taxes in order. Don't worry about fancy tricks to screw the tax man over; you've already admitted that you're literally making more money than you know what to do with, and a lot of that is supported, one way or another, by infrastructure that's supported by tax money. Besides, your first priority is to establish basic security for yourself and your family. Making sure you won't be subjected to stressful audits is an important part of that! Pay off any and all outstanding debts you may have. This establishes a certain baseline standard of living for you: no matter what unexpected tragedies may come up, at least you won't have to deal with them while also keeping the wolves at bay at the same time! Max out a checking account. I believe the FDIC maximum insured value is $250,000. Fill 'er up, get a debit card, and just sit on it. This is a rainy day fund, highly liquid and immediately usable in case you lose your income. Put at least half of it into an IRA or other safe investments. Bonds and reliable dividend-paying stocks are strongly preferred: having money is good but having income is much better, especially in retirement! Quality of life. Splurge a little. (Emphasis on a little!) Look around your life. There are a few things that it would be nice if you just had, but you've never gotten around to getting. Pick up a few of them, but don't go overboard. Spending too much too quickly is a good way to end up with no money and no idea what happened to it. Also, note that this isn't just for you; family members deserve some love too! Charitable giving. If you have more money than you know what to do with, there are plenty of people out there who know exactly what to do--try to go on living and build a basic life for themselves--but have no money with which to do so. Do your research. Scam charities abound, as do more-or-less legitimate ones who actually do help those in need, but also end up sucking up a surprisingly high percentage of donations for \"\"administrative costs\"\". Try and avoid these and send your money where it will actually do some good in the world. Reinvest in yourself. You're running a business. Make sure you have the best tools and training you can afford, now that you can afford more!\"",
"title": ""
},
{
"docid": "caa7c09b4aff575996aba05e03ae5f23",
"text": "Congratulations on being in this position. Your problem - which I think that you identified - is that you don't know much about investing. My recommendation is that you start with three goals: The Motley Fool (www.fool.com) has a lot of good information on their site. Their approach may or may not align with what you want to do; I've subscribed to their newsletters for quite a while and have found them useful. I'm what is known as a value investor; I like to make investments and hold them for a long time. Others have different philosophies. For the second goal, it's very important to follow the money and ask how people get paid in the investment business. The real money in Wall Street is made not by investment, but by charging money to those who are in the investment business. There are numerous people in line for some of your money in return for service or advice; fees for buying/selling stocks, fees for telling you which stocks to buy/sell, fees for managing your money, etc. You can invest without spending too much on fees if you understand how the system works. For the third goal, I recommend choosing a few stocks, and creating a virtual portfolio. You can then then get used to watching and tracking your investments. If you want a place to put your money while you do this, I'd start with an S&P 500 index fund with a low expense ratio, and I'd buy it through a discount broker (I use Scottrade but there are a number of choices). Hope that helps.",
"title": ""
},
{
"docid": "b37c9c4fd5f5cccfc979693e5c5889fa",
"text": "\"This is a supplement to the additional answers. One way to generate \"\"passive\"\" income is by taking advantage of high interest checking / saving accounts. If you need to have a sum of liquid cash readily available at all times, you might as well earn the most interest you can while doing so. I'm not on any bank's payroll, so a Google search can yield a lot on this topic and help you decide what's in your best interest (pun intended). More amazingly, some banks will reward you straight in cash for simply using their accounts, barring some criteria. There's one promotion I've been taking advantage of which provides me $20/month flat, irrespective of my account balance. Again, I am not on anyone's payroll, but a Google search can be helpful here. I'd call these passive, as once you meet the promotion criteria, you don't need to do anything else but wait for your money. Of course, none of this will be enough to live off of, but any extra amount with minimal to zero time investment seems to be a good deal. (if people do want links for the claims I make, I will put these up. I just do not want to advertise directly for any banks or companies.)\"",
"title": ""
},
{
"docid": "63a56308a95aeff53e47b12fe249d161",
"text": "\"You may look into covered calls. In short, selling the option instead of buying it ... playing the house. One can do this on the \"\"buying side\"\" too, e.g. let's say you like company XYZ. If you sell the put, and it goes up, you make money. If XYZ goes down by expiration, you still made the money on the put, and now own the stock - the one you like, at a lower price. Now, you can immediately sell calls on XYZ. If it doesn't go up, you make money. If it does goes up, you get called out, and you make even more money (probably selling the call a little above current price, or where it was \"\"put\"\" to you at). The greatest risk is very large declines, and so one needs to do some research on the company to see if they are decent -- e.g. have good earnings, not over-valued P/E, etc. For larger declines, one has to sell the call further out. Note there are now stocks that have weekly options as well as monthly options. You just have to calculate the rate of return you will get, realizing that underneath the first put, you need enough money available should the stock be \"\"put\"\" to you. An additional, associated strategy, is starting by selling the put at a higher than current market limit price. Then, over a couple days, generally lowering the limit, if it isn't reached in the stock's fluctuation. I.e. if the stock drops in the next few days, you might sell the put on a dip. Same deal if the stock finally is \"\"put\"\" to you. Then you can start by selling the call at a higher limit price, gradually bringing it down if you aren't successful -- i.e. the stock doesn't reach it on an upswing. My friend is highly successful with this strategy. Good luck\"",
"title": ""
},
{
"docid": "3aa935aa25a7851ccd845e69c74c8def",
"text": "\"There is a site that treats you like a fund manager in the real market, Marketoracy, http://marketocracy.com/. Each user is given 1 million in cash. You can have multiple \"\"mutual funds\"\", and the site allows use to choose between two types of strategies, buy/sell, short/cover. Currently, options are not supported. The real value of the site is that users are ranked against each other (of course, you can op out of the rankings). This is really cool because you can determine the real worth of your returns compared to the rest of investors across the site. A couple years back, the top 100 investors were invited to come on as real mutual fund managers - so the competition is legitimate. Take a look at the site, it's definitely worth a try. Were there other great sites you looked at?\"",
"title": ""
},
{
"docid": "4e12ed80eefb5bca7e5891e488a49432",
"text": "This is a very interesting question. I'm going to attempt to answer it. Use debt to leverage investment. Historically, stock markets have returned 10% p.a., so today when interest rates are very low, and depending on which country you live in, you could theoretically borrow money at a very low interest rate and earn 10% p.a., pocketing the difference. This can be done through an ETF, mutual funds and other investment instruments. Make sure you have enough cash flow to cover the interest payments! Similar to the concept of acid ratio for companies, you should have slightly more than enough liquid funds to meet the monthly payments. Naturally, this strategy only works when interest rates are low. After that, you'll have to think of other ideas. However, IMO the Fed seems to be heading towards QE3 so we might be seeing a prolonged period of low interest rates, so borrowing seems like a sensible option now. Since the movements of interest rates are political in nature, monitoring this should be quite simple. It depends on you. Since interest rates are the opportunity cost of spending money, the lower the interest rates, the lower the opportunity costs of using money now and repaying it later. Interest rates are a market mechanism so that people who prefer to spend later can lend to people who prefer to spend now for the price of interest. *Disclaimer: Historically stocks have returned 10% p.a., but that doesn't mean this trend will continue indefinitely as we have seen fixed income outperform stocks in the recent past.",
"title": ""
},
{
"docid": "658da749635d3d732d9faa1a74195a60",
"text": "Options are contractual instruments. Most options you'll run into are contracts which allow you to buy or sell stock at a given price at some time in the future, if you feel like it (it gives you the option). These are Call and Put options, respectively (for buying the stock and selling the stock). If you have a lot of money in an index fund ETF, you may be able to protect your portfolio against a market decline by (e.g.) buying Put options against the ETF for a substantially lower price than the index fund currently trades at. If the market crashes and your fund falls in value significantly, you can exercise the options, selling the fund at the price that your option has specified (to the counter-party of your contract). This is the risk that the option mitigates against. Even if you don't have one particular fund with your investments, you could still buy a put option on a similar fund, and resell it to another person in lieu of exercise (they would be capable of buying the stock and performing the exercise themselves for profit if necessary). In general, if you are buying an option for safety, it should be an option either on something you own, or something whose price behavior will mimic something you own. You will note that options are linked to the price of stocks. Futures are contracts whose values are linked to the price of other things, typically commodities such as oil, gold, or orange juice. Their behaviors may diverge. With an option you can have a contractual guarantee on the exact investment you're trying to protect. (Additionally, many commodities' value may fall at the same time that stock investments fall: during economic contractions which reduce industrial activity, resulting in lower profits for firms and less demand for commodities.) You may also note that there are other structures that options may have - PUT options on index funds or similar instruments are probably most specifically relevant to your interests. The downside of protecting yourself with options is that it costs money to buy this option, and the option eventually expires, so you may lose money. Essentially, you are buying safety and risk-tolerance from the option contract's counterparty, and safety is not free. I cannot inform you what level of safety is appropriate for your portfolio's needs, but more safety is more expensive.",
"title": ""
},
{
"docid": "3008d82e9888fe8efeffb1adc8fa887d",
"text": "As of now you are doing that. When you start earning larger sums of money, you will not withdraw and keep it in your house. You will leave it in the bank and they will earn money on it( By lending it out at a higher interest rate). When you are broke, that same bank will offer you a credit card or some other instrument that will help you survive. They will charge you money on that and make interest of you. When you have too much money and you start wiring money they will charge you a wire transfer fees. There are more than 500 ways in which banks make money off you. If you plan receiving $100 and $250 all your life and withdraw it immediately and don't plan doing anything else all your life, then you will probably not let the bank make any money off you. However, there are a very few people like that and banks barely lose anything accepting those customers.",
"title": ""
},
{
"docid": "450c8ae1359a23cf337b1a1817dd9c03",
"text": "What options do I have? Realistically? Get a regular full time job. Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home. I am self-employed and my income is highly erratic. Due to how my clients pay me, my business might go a couple months with absolutely no deposits. However, I've been at this for quite a few years. So, even though my business income is erratic, I pay myself regularly once a month. In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts. Also I had about a 30% down payment. This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point. The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble.",
"title": ""
},
{
"docid": "7a02eebb28ce128707a3983870846d66",
"text": "Over the long run, you can expect to do about as well as the market itself. Depending on what time period you view, the stock market has typically provided returns of approximately 10%. Some years it is up, some years it is down. You may think you can get better returns, but you are mistaken. You may be able to do better over a short time period if you take on vastly more risk, but you won't be able to do so long term. In order to make $2000/month, then, you will need approximately $240,000 to invest. And even then, you won't make that kind of return reliably. Some months, some years, you'll make more. Other times, you'll lose money. If anyone tells you they can double your money in a month (which is what you are hoping for), walk away. Because it is either illegal or a scam. The only way your plan can work is if you are reliably able to predict stocks which will go up by 10% in the next two days. You cannot do this. You can't even predict which stocks will go up by 10% in the next year.",
"title": ""
}
] |
fiqa
|
fa84137dccc0984dd70422f44bc24012
|
What are the contents of fixed annuities?
|
[
{
"docid": "3ff48ce11d8999080a58c40b042bd043",
"text": "\"An annuity is a contract. Its contents are \"\"a contractual obligation from the issuing company\"\". If you want to evaluate how your annuity is likely to fare, you're essentially asking whether or not its issuer will honor its contract. They're legally required to honor the contract, unless they go bankrupt. (Even if they do go bankrupt, you will be a creditor and may get a portion of the assets recovered by the bankruptcy process.) Generally, the issuer will take the proceeds and invest them in the stock market (or possibly in similar instruments - e.g. Berkshire-Hathaway bought a railroad and invests some money in it directly). They invest in these places because that's where the returns are. One of the reason that annuities may have a good rate on paper is that they may end up taking some of your principal, because many are structured as some form of survivor's insurance policy. Consider: If you're 65 years old and have some retirement savings, you'd like to be able to spend them without fear of them running out because you live longer than you expected (e.g. you survive to your 90s). So, you could invest in the stock market and hope for a 7% return indefinitely and then plan to spend the returns - but if those returns don't materialize for a few years because there's a big stock market crash, you're in big trouble! Or, you could buy an annuity contract which will pay you 7% a year (or more!) until you die. Then you're guaranteed the returns unless the issuer goes bankrupt. (Sure, you lose all your principal, but you're dead, so hey, maybe you don't care.) The insurance company essentially sells risk-tolerance. Other annuities aren't structured like this, and may be marketed towards non-retirees. They're usually not such a good deal. If they appear to be such a good deal, it may be an illusion. (Variable annuities in particular are hard to reason about without a good deal of knowledge about how the stock market behaves on a year-to-year basis: many of them have a maximum return as well as a minimum, and the stock market may pile up a lot of its returns into one year, so after a \"\"crash and recovery\"\" cycle you might end up behind the market instead of ahead.) Annuities are a form of safety. Safety can be very expensive. If you're investing your own money, consider whether you need that safety. You probably needn't worry quite so much about the issuer being crazy-fraudulent or Ponzi-esque: you should worry mostly about whether it looks better on paper than it is.\"",
"title": ""
},
{
"docid": "df0fd975face50095720f6f1b6546ee8",
"text": "\"This is really two questions about yield and contents. Content As others have noted, an annuity is a contractual obligation, not a portfolio contained within an investment product per se. The primary difference between whether an annuity is fixed or variable is what the issuer is guaranteeing and how much risk/reward you are sharing in. Generally speaking, the holdings of an issuer are influenced by the average \"\"duration\"\" of the payments. However, you can ascertain the assets that \"\"back\"\" that promise by looking at, for example, the holdings of a large insurance or securities firm. That is why issuers are generally rated as to their financial strength and ability to meet their obligations. A number of the market failures you mentioned were in part caused by the failure of these ratings to represent the true financial strength of the firm. Yield As to the second question of how they can offer a competitive rate, there are at least several reasons (I am assuming an immediate annuity) : 1) Return/Depletion of Principal The 7% you are being quoted is the percent of your principal that will be returned to you each year, not the rate of return being earned by the issuer. If you invest $100 in the market personally and get a 5% return, you have $105. However, the annuity's issuer is also returning part of your principal to you each year in your payment, as they don't return your principal when you eventually die. Because of this, they can offer you more each year than they really make in the market. What makes a Ponzi scheme different is that they are also paying out your principal (usually to others), but lie to you by telling you it's still in your account. :) 2) The Time Value of Money A promise to pay you $500 tomorrow costs less than $500 today A fixed annuity promises to pay you a certain amount of money each year. This can be represented as a rate of return calculated based on how much you have to pay to get that annual payment, but it is important to remember that the first payment will be worth substantially more in real purchasing power than the last payment you get. The longer you live, the less your fixed payment is worth in real terms due to inflation! In short, the rate of return has to be discounted for inflation, it is not a \"\"real\"\" rate of return. In other words, if you give me $500 today and I promise to pay you $100 for the next 5 years, I am making money not only because I can invest the money between now and then, but also because $100 will be worth less five years from now than it is today. With annuities, if you want your payment to rise in step with inflation, you have to pay more for that (a LOT more!). These are the two main reasons - here are a few smaller ones: 3) A very long Time Horizon If the stock market or another asset class is performing well/poorly, the issuer can often afford to wait much longer to buy or sell than an individual, and can take better advantage of historical highs and lows over the long term. 4) \"\"Big Boy\"\" investing A large, financially sound issuer can afford to take risks that an individual cannot, such as in very large or illiquid assets, such as a private company (a la Warren Buffet). 5) Efficiencies of scale Institutional investors have a number of legal advantages over individuals, which I won't discuss in detail here. However, they exist. Large issuers are also often in related business (insurance, mutual funds) such that they can deal in large volumes and form an internal clearinghouse (i.e. if I want to buy Facebook and you want to sell it, they can just move the stock around without doing any trading), with the result that their costs of trading are lower than those of an individual. Hope that helps!\"",
"title": ""
},
{
"docid": "dd18134083143c2ebd4a25d61cbf4a02",
"text": "For a variable annuity, you need to know the underlying investments and how your returns are credited to your account. For a fixed annuity, the issuer is responsible for the commitment to provide the promised rate to you. In a sense, how they invest isn't really your concern. You should be concerned about the overall health of the company, but in general, insurance companies tend to know their business when they stick to their strengths: writing insurance on groups and producing annuity contracts. I don't care for VAs or the fixed annuities you asked about, but I don't believe they resemble a ponzi scheme, either.",
"title": ""
}
] |
[
{
"docid": "359d3c194143a1f84f2c482a5df6ebdc",
"text": "\"There is no formula to answer the question. You have to balance return on investment with risk. There's also the question of whether you have any children or other heirs that you would like to leave money to. The mortgage is presumably a guaranteed thing: you know exactly how much the payments will be for the rest of the loan. I think most annuities have a fixed rate of return, but they terminate when you both die. There are annuities with a variable return, but usually with a guaranteed minimum. So if you got an annuity with a fixed 3.85% return, and you lived exactly 18 more years, then (ignoring tax implications), there'd be no practical difference between the two choices. If you lived longer than 18 years, the annuity would be better. If less, paying off the mortgage would be better. Another option to consider is doing neither, but keeping the money in the 401k or some other investment. This will usually give better than 3.85% return, and the principal will be available to leave to your heirs. The big drawback to this is risk: investments in the stock market and the like usually do better than 3 or 4%, but not always, and sometimes they lose money. Earlier I said \"\"ignoring tax implications\"\". Of course that can be a significant factor. Mortgages get special tax treatment, so the effective interest rate on a mortgage is less than the nominal rate. 401ks also get special tax treatment. So this complicates up calculations trying to compare. I can't give definitive numbers without knowing the returns you might get on an annuity and your tax situation.\"",
"title": ""
},
{
"docid": "5a860f3f8edddf97f00daf44f42cd1d3",
"text": "\"Note - this is a complicated topic. I've read the rules multiple times and I'm still not sure I understand them perfectly. So please take this with a pinch of salt and read the rules for yourself. The time(s) at which a test is done against the LTA are known as a \"\"Benefit Crystallization Event\"\" (BCE). There are 13 of these (!) - they're numbered 1-9 with the addition of some extras numbered 5A-D. However, the most important ones for those with defined contribution pensions are: Broadly, the idea is that a BCE occurs when you start taking money out of your pension, and when you reach age 75. Each time one happens, the amount you are taking out (\"\"crystallizing\"\") gets compared against the LTA and a certain percentage of your LTA gets designated as being used. Crystallising doesn't necessarily mean you actually receive the money immediately, just that some of your money is switched into a mode where you can start receiving it in different ways. The rules are designed to avoid double counting, so broadly anything that was taken off your LTA won't be taken off a second time. The cumulative use of your LTA is tracked as a percentage rather than an absolute amount, to take account of any changes in the LTA between the different times you crystallise money. For example if you crystallise £100K when the LTA is £1mn, that's 10% of your LTA gone. If later on the LTA has risen to £1.1mn and you take out £110K, that's another 10%. Once you hit 100%, you start paying a LTA charge on any excess. The really simple path here is if you just get an annuity with your entire pot, before hitting age 75 (and you don't make any further pension contributions after). Then only BCE 4 applies: your pension pot, all of which is being used to buy the annuity, is compared with the LTA. After this point your entire pension pot is considered to be crystallized, so no more BCEs will apply - the tests at age 75 only apply if you still have money that you haven't taken out or used to buy an annuity. The annuity payments themselves will be subject to income tax at your normal rate at the time you receive them, i.e. 0%, 20%, 40% or 45% depending on how much other income you have. In reality most people would want to take 25% of their pot as a lump sum at the same time as buying an annuity, given that it's tax-free if you're under the LTA. At this point BCE 6 applies in addition to BCE 4, but again the overall effect of the test is pretty simple, look at the total pension pot (lump sum + cost of annuity), and if it's under the LTA you're fine. Again, at this point no more BCEs will apply as all the money is considered to have been fully distributed. If you only use part of the money for an annuity/lump sum, then only that part of the money is compared against the LTA, and the rest stays in your pension and will be compared later. The 25% limit for a tax-free lump sum applies to the total you are taking out at that point: if you have £200K and are taking out £100K, you can take out £25K as a tax-free lump sum and use £75K for the annuity. The other £100K stays in your pension. Many people see annuity rates as very low and will want to take on more risk (and reward) by using \"\"Drawdown\"\" for at least part of their pension. Essentially, you can designate part of your pension for drawdown, and at that point BCE 1 applies to the money you designate. Once designated, you can start drawing the money out as income, which will be taxed at your normal income tax rate at the time you receive it. Again, you can take 25% as a lump sum at this point which will be subject to BCE 6. There's also an alternative route where you put everything into \"\"flexi-access drawdown\"\" without taking any lump sum immediately, and then as you actually withdraw income, 25% is tax-free and the rest is taxed as income. The overall effect is the same, but it gives you more control over when you get the tax-free bit. However, because with drawdown you can actually leave the money in your pension and growing tax-free, there's a further test against the LTA at age 75 under BCE 5A. To avoid double-counting (\"\"prevention of overlap\"\"), the amount left in the drawdown fund at that point is reduced by whatever was previously tested against BCE 1. So if you put £150K into drawdown initially, and it's grown to £200K by age 75, then another £50K will crystallise under BCE 5A. I think that if you put £150K into drawdown initially and it grows by £50K, but you take that out as income so that only £150K (or less) remains at age 75, then the amount crystallising under BCE 5A is nil. Also, when money is in drawdown, you can choose to use it to buy an annuity. BCE 4 is applied at this point (if before age 75), but as with BCE 5A, this is reduced by anything that was previously crystallised under BCE 1. If you only use some of it to buy an annuity, the reduction is pro-rataed, e.g. if you started out with £150K moved into drawdown, and later it has grown to £200K and you use £100K to buy an annuity, then the reduction is £75K so £25K is considered to have crystallised under BCE 4. Once you reach age 75, as well as any money that's still in drawdown, anything you haven't yet crystallised at all gets tested against the LTA under BCE 5B. Broadly, once you go over the LTA, the charges are simple: There's never any explanation given for these two rates, but I think it's all based on trying to at least cancel out the benefit you got from using your pension, on the assumption that: So with the 25% charge + 20% income tax, if you take out £100, you'll end up with £75 gross income, so £60 net income - just the same as if you'd originally paid 40% tax. (This ignores the effect of investment growth, but if you would have saved the £60 in an ISA, the end result is the same: if you had growth of say 50% over the time the money was in your pension, it'll be the same effect if you had £100 growing to £150 and now received 60% of it, or if you had £60 growing to £90 untaxed in an ISA.) The 55% lump sum charge is in case you are paying 40% tax when you take it out, to make sure that it's not a more attractive option than the 25%+income tax: if you have £100, either you get £45 tax free via a lump sum, or you get £75 gross and hence £45 net. I haven't covered lots of cases here: defined benefit pensions. Roughly, when you start receiving the pension, 20x the initial income from the pension is deemed to crystallise under BCE 2 and any lump sum you receive crystallises under BCE 6. In the former case, you could end up having to pay the LTA charge with money you haven't actually got yet, and you can ask the pension administrator to instead reduce your pension to pay it. However, there are lots of special cases for defined benefit pensions, mostly for historical reasons, so you should make sure you check with your pension administrator about this. if you die before age 75, at which point the LTA test is applied via either BCE 5C/5D, or BCE 7. After paying the LTA charge if any, your dependents or whoever else you leave it to gets the remainder tax-free. transferring overseas (BCE 8). \"\"scheme pensions\"\" under BCE 2 and BCE 3 (I think these are relatively uncommon) some corner cases covered by regulations (BCE 9)\"",
"title": ""
},
{
"docid": "e08777a31b5b1789c6b236753f6e9b77",
"text": "The example from the following website: Investopedia - Calculating The Present And Future Value Of Annuities specifically the section 'Calculating the Present Value of an Annuity Due' shows how the calculation is made. Using their figures, if five payments of $1000 are made over five years and depreciation (inflation) is 5%, the present value is $4545.95 There is also a formula for this summation, (ref. finance formulas)",
"title": ""
},
{
"docid": "fceae85b48ddff092e9d08092eecabbd",
"text": "You need to see that prospectus. I just met with some potential new clients today that wanted me to take a look at their investments. Turns out they had two separate annuities. One was a variable annuity with Allianz. The other was with some company named Midland Insurance (can't remember the whole name). Turns out the Allianz VA has a 10 year surrender contract and the Midland has a 14 year contract. 14 years!!! They are currently in year 7 and if they need any money (I'm hoping they at least have a 10% free withdrawal) they will pay 6% surrender on the Allianz and a 15% surrender on the other. Ironically enough, they guy who sold this to them is now in jail. No joke.",
"title": ""
},
{
"docid": "c175f3104fa1622c371c24f1617c3804",
"text": "\"I don't know how annuities work it's all smoke and mirrors to me. This is a huge red flag to me. I would ask the agent what the penalty is to cancel this contract, and see ho much you can get back. If done right, you should be able to transfer these funds to an IRA or other pretax account. To be clear, I'd make a similar remark if you said your were in a S&P ETF or any investment you don't understand. \"\"Appropriate investment\"\" means little if the investor has no understanding of what they are buying. Update in repose to comments -\"",
"title": ""
},
{
"docid": "473bea867c1ec882bb7dd4adaa25a42a",
"text": "Variable Annuities would be one option though there are SEC warnings about them, for an option that is tax-deferred and intended to be used for long-term investing such as retirement. There is a bit of a cost to gain the tax-deferral which may not always make them worthwhile.",
"title": ""
},
{
"docid": "fa606018412c90bd9630de00ff8409e0",
"text": "You can get no load annuities through some no-load financial companies like Vanguard so to start with I'd see how what she is being offered compares with something that comes free of a sales load. I'd also question that fixed rate, seems pretty impossible to me, which makes me think there is some catch or 'gotcha' that we are not seeing that either brings down that rate, or makes it delusional (they are kidding themselves) or deceptive in some way. In any case it's setting off my 'too good to be true' alarm at full volume, along with the 'shark attack' alarm as well. (I would strongly suspect the 'advisor' is advising the product that makes the most money for him, NOT what is in your mother's best interest) A fixed annuity is an insurance product, not a security, because the insurance company must credit the annuity holder’s account with the specified interest rate for the contractually-stipulated time period, regardless of market fluctuations in actual interest rates. It is the insurance company that bears the investment risk, which it does by investing the annuity holder’s purchase proceeds in fixed-income instruments that the company hopes will provide sufficient return to fulfill its contractual representations to the holder. THIS is why there is no prospectus (it's not a 'security' they are not required to provide one by SEC) because the risk is entirely with the company. Obviously as pointed out in the comments, the company could easily go out of business (especially of they sell a lot of these and can't find a way to get that kind of return on the invested money). Now, ask yourself, if I was the insurance company, would I be comfortable guaranteeing that level of return over that much time if I intend to make a profit from it, pay sales comissions, and stay in business? In terms of 'will they stay in business' I'd have a hard look at their ratings, and go compare where that is on the total range for AM Best (they are lowest 'secure' rating, next thing down is in the 'vulnerable' category) and Standard and Poors (4 places down from their best rating, next thing down is 'marginal' followed by 'poor') You might also want to see if you can get any idea of historical ratings, is this company's ratings falling, or rising? Personally, for the amount of money involved, I'd want a company with MUCH higher ratings than these guys.. THEN maybe someone could say 'no risk', but with those ratings? an no, I don't think so! BTW I'd check over what this bozo (um sorry, that's not fair to clowns) is recommending she do with her own funds as well. For example is he recommending she take something that is already tax sheltered such as an IRA and investing the stuff inside that in an annuity (kind of pointless to 'double shelter' the money, or lock it up for a period of time when she may be required to make withdrawals) make sure you don't see something there that is actually against what is in her best interest and is only done to make him a comission.",
"title": ""
},
{
"docid": "85000bed497e6334aa780dbb0d8bbd83",
"text": "Annuities, like life insurance, are sold rather than bought. Once upon a time, IRAs inherited from a non-spouse required the beneficiary to (a) take all the money out within 5 years, or (b) choose to receive the value of the IRA at the time of the IRA owner's death in equal installments over the expected lifetime of the beneficiary. If the latter option was chosen, the IRA custodian issued the fixed-term annuity in return for the IRA assets. If the IRA was invested in (say) 15000 shares of IBM stock, that stock would then belong to the IRA custodian who was obligated to pay $x per year to the beneficiary for the next 23 years (say). There was no investment any more that could be transferred to another broker, or be sold and the proceeds invested in Facebook stock (say). Nor was the custodian under any obligation to do anything except pay $x per year to the beneficiary for the 23 years. Financial planners loved to get at this money under the old IRA rules by suggesting that if all the IRA money were taken out and invested in stocks or mutual funds through their company, the company would pay a guaranteed $y per year, would pay more than $y in each year that the investments did well, would continue payment until the beneficiary died (or till the death of the beneficiary or beneficiary's spouse - whoever died later), and would return the entire sum invested (less payouts already made, of course) in case of premature death. $y typically would be a little larger than $x too, because it factored in some earnings of the investment over the years. So what was not to like? Of course, the commissions earned by the planner and the lousy mutual funds and the huge surrender charges were always glossed over.",
"title": ""
},
{
"docid": "c792b0ad91138ee36099aef622b3d59c",
"text": "\"The answer to almost all questions of this type is to draw a diagram. This will show you in graphical fashion the timing of all payments out and payments received. Then, if all these payments are brought to the same date and set equal to each other (using the desired rate of return), the equation to be solved is generated. In this case, taking the start of the bond's life as the point of reference, the various amounts are: Pay out = X Received = a series of 15 annual payments of $70, the first coming in 1 year. This can be brought to the reference date using the formula for the present value of an ordinary annuity. PLUS Received = A single payment of $1000, made 15 years in the future. This can be brought to the reference date using the simple interest formula. Set the pay-out equal to the present value of the payments received and solve for X I am unaware of the difference, if any, between \"\"current rate\"\" and \"\"rate to maturity\"\" Finding the rate for such a series of payments would start out the same as above, but solving the resulting equation for the interest rate would be a daunting task...\"",
"title": ""
},
{
"docid": "fdb0d925b58ea2b1b9af8fe85c545a4c",
"text": "E&P can be valid throug Net Present Value methods, on a field-by-field basis. As no field is ever-lasting, and there Are not an unlimited number of fields, perpetuity-formulaes Are shitty. FCFF on a per-field basis with WC and Capex, with a definite lifetime. Thank you for the compliment.",
"title": ""
},
{
"docid": "9f38bd0a46bf85a3c29ba74acc1ff4e3",
"text": "\"Sometimes an assumptions is so fundamentally flawed that it essentially destroys the relevance and validity of any modelling outputs. \"\"Obviously, we're assuming the company can pay it back\"\" Is one of those assumptions. The person gets a notes stating that they will get $525 'IN ONE YEAR' You need to divide $525/(1+Cost of Capital)^n n being the number of periods to find out what the note will be worth today. Google 'Present Value of an Annuity' to deal with debt that is more complex than you have $500 now and give me $525 in a year...\"",
"title": ""
},
{
"docid": "90f3ac4042a941d61e7a35f1938326dc",
"text": "\"The Securities Industry and Financial Markets Association (SIFMA) publishes these and other relevant data on their Statistics page, in the \"\"Treasury & Agency\"\" section. The volume spreadsheet contains annual and monthly data with bins for varying maturities. These data only go back as far as January 2001 (in most cases). SIFMA also publishes treasury issuances with monthly data for bills, notes, bonds, etc. going back as far as January 1980. Most of this information comes from the Daily Treasury Statements, so that's another source of specific information that you could aggregate yourself. Somewhere I have a parser for the historical data (since the Treasury doesn't provide it directly; it's only available as daily text files). I'll post it if I can find it. It's buried somewhere at home, I think.\"",
"title": ""
},
{
"docid": "9170569a02966ba5ad568f1aff9d076f",
"text": "Pension in this instance seems to mean pension income (as opposed to pension pot). This money would be determined by whatever assets are being invested in. It may be fixed, it may be variable. Completely dependant on the underlying investments. An annuity is a product. In simple terms, you hnd over a lump sum of cash and receive an agreed annual income until you die. The underlying investment required to reach that income level is not your concern, it's the provider's worry. So there is a hige mount of security to the retiree in having an annuity. The downside of annuities is that the level of income may be too low for your liking. For instance, £400/£10,000 would mean £400 for every £10,000 given to the provider. That's 4% and would take 25 years to break even (ignoring inflation, opportunity cost of investing yourself). Therefore, the gamble is whether you 'outlive' the deal. You could hand over £50,000 to a provider and drop dead a year later. Your £50k got you, say, £2k and then you popped your clogs. Provider wins. Or you could like 40 years after retiring and then you end up costing the provider £80k. You win. Best way to think of an annuity is a route to guaranteed, agreed income. To secure that guarantee, there's a price to pay - and that is, a lower income rate than you might like. Hope that was the kind of reply you were hoping for. If not, edit your OP and ask again. Chris. PS. The explanation on the link you provided is pretty dire. Very confusing use of the term 'pension' and even if that were better, the explanation is still bad due to vagueness. THis is much better: http://www.bbc.co.uk/news/business-26186361",
"title": ""
},
{
"docid": "931fb69cc32b371354cc60e4f4f5229f",
"text": "Get an advanced degree. This should increase your earning power. Also learn how to use a computer, this should also tend to increase your earning power.",
"title": ""
},
{
"docid": "0c8ad670321acaed5751ea3172021336",
"text": "I'll just re-post my comment as an answer as i disagree with Michael Pryor. According to this article (and few others) you may save money by incorporating. These factors don’t change the general payroll tax advantage of an S corporation, however: A S corporation can often save business owners substantial amounts of payroll tax if the business profit greatly exceeds what the business needs to pay owners for their work.",
"title": ""
}
] |
fiqa
|
3e0e8393b7be468764929e1d8cd77692
|
Why do 10 year-old luxury cars lose so much value?
|
[
{
"docid": "d08b579511bf8f3a61032d9812e4cca7",
"text": "\"They are overpriced to begin with. One reason is the fact that they are luxury cars. A second, related reason, is that they tend to push the technology envelope. All cars depreciate drastically the minute they are driven off the lot. This a good argument for buying a car that is 1-2 years old. The higher you are, the more you can fall. Repairs and maintenance are typically still expensive on these cars, due to relative rarity and the lack of necessary expertise. Here is where that advanced technology bites you. This is a reason that a 5 year old Civic may be worth more than than a 10 year old Benz. It may simply not be worth the hassle of maintaining/repairing a luxury car. This is especially true for an aging luxury car. There are some people that only buy domestic, precisely because of the maintenance costs. Also, a 10 year old car is still a 10 year old car, regardless of the make. (There are a few notable exceptions, like the NSX.) Hondas and Toyotas have a great reputation for reliability and (long-term) total cost of ownership. \"\"Better\"\" is a subjective issue, that depends on a variety of variables. A Civic is certainly not better in terms of technology, comfort, etc. But, it is likely better in terms of maintenance, reliability, etc. Which \"\"better\"\" you focus on, is up to you.\"",
"title": ""
},
{
"docid": "48f0b9d9fe3b7006ca1b20cc716d2ba8",
"text": "Few people actually buy BMW's. Most are leased, because if you're the type of person who wants to drive a BMW, you're going want a new one regularly. Here's the lifecycle of a BMW or other luxury car: By the time you hit ten years, you have a rapidly depreciating asset because the average Joe doesn't really want an old BMW and hassles that come with it or any luxury car. That said, there are great bargains in this space. I used to buy 5-6 year old Cadillacs when they weren't cool for like $7-9k, and resell them a year later for about $1,500 less that I bought them for. (lower TCO than a Civic) You need to have patience though, because maintenance is always an expensive pain in the rear with luxury cars.",
"title": ""
},
{
"docid": "c70411aa1737ecee503bb98d9d7284d9",
"text": "+1 They are over priced to begin with - More specifically they are expensive to create exclusivity, which raises their value to people who value that kind of thing. Perhaps folks who buy those cars aren't buying them for value or quality or performance, but are buying them for the badge and the intangible factors. I frequently hear about rich people who earned their millions driving around in cars Consumer Reports rank highly, so it isn't because they are so much better than a mid priced car. A car for $140,000 is either equipped for the A-Team or is a status symbol. The status symbol notion is very expensive, but fades very quickly, hence the mighty depreciation.",
"title": ""
},
{
"docid": "53632ced549c398ad568eac5f23c6dcb",
"text": "There is usually a bunch of reasons for this, some psychological and some entirely practical. Let's start with the latter: If I wanted an older luxobarge, I'd buy something from the early to mid 1990s in good condition. These cars tend to be a little less complex and thus a little easier to repair, plus you can find them for prices that makes them to 'disposable'.",
"title": ""
},
{
"docid": "5fd89ef22ffd205dda95cfa42bbbc622",
"text": "\"I think this can be answered by answering the question \"\"Who buys 10 year old cars?\"\". Generally speaking those buyers are very price conscious. They are looking to save money on transportation rather than following the herd of people participating in the car payments merry-go-round. The cost of parts, repairs, and gasoline for those cars do not go down over time. Remember that many of those cars require the use of premium gasoline. This drastically reduces demand for those vehicles, thus lowers the price. Luckily I have a really good and reasonable mechanic near me, and I can float repairs and the higher gas. I love driving my 1999 Mercedes and it is one of the least expensive cars that I have owned while also being one of the most comfortable.\"",
"title": ""
},
{
"docid": "aa2e82eddc78d5e5af9a067af73254d1",
"text": "Personally, I buy newer luxury cars for two reasons. 1) Status symbol Newer cars have the latest looks, performance, and features like heated side mirrors and sensors that adjust cruse control speed when in heavy traffic etc. 2) Older cars have more wear and tear. No one has spent any significant amount of time in the car before and therefore you know the history of what the car has been through, like buying a new pair of pants. You know that no one has pissed in them ;). After I have pissed in and tore up my now older luxury car, I sell it off and get a new one. Cars wear out and as they get older, they need parts replaced. My brother's Mazda, for example, just blew the head gasket after buying the car new and driving 130k miles over a four year period. Part of the luxury for owning a new car is the luxury of time, not having your car spend any significant amount of time in a garage being worked on, unless you buy a Land Rover of course ;).",
"title": ""
},
{
"docid": "10c46e0d92feb504ce36be9b95654e06",
"text": "The answer is very simple. Part of the luxury is having the cutting edge technology with the very latest features. The price premium is not just from increased build quality; it's simply a perception. Additionally, 10 years takes its toll on a car. The smooth suspension gets rougher over time, and all the little features start to break down. Part of the price of that car factors in the expense of expected repairs. That's true of every car, but the repairs are more expensive when there are lots of gadgets to break down, especially on imports.",
"title": ""
},
{
"docid": "3a8eb5b7b755355afa41a1173cb0d192",
"text": "They start at a higher price and repairs are more expensive than with a standard car. From my experience, many luxury cars get too expensive to keep after about 10 years due to increased maintenance costs.",
"title": ""
},
{
"docid": "a791487dcfbe402a31155b4ede78ab68",
"text": "I believe one of the main reasons cars -- luxury or otherwise -- depreciate so quickly is that many auto accidents can cause serious engine/frame damage but are easily cosmetically repaired. If you smash up the car but get the body fixed, and you don't go through insurance, it will be indistinguishable from the same car that hasn't been in a crash.",
"title": ""
}
] |
[
{
"docid": "e2c99ff02914e5fdf4bcd544d9e7b608",
"text": "\"It's all about what you value personally. I'm mid-30s and drive a $40K \"\"luxury\"\" sports car. I also happen to wear a $6K wristwatch every day. I purchased both of these items because I thought they were beautiful when I saw them. On the flip side, because I spent 6 years living below the poverty line, I instinctively spend almost nothing on a daily basis. My food budget is less than $50 a week, and I never go out to eat. I wear my clothes and shoes and coats until they have holes, and I drove my previous car (a Toyota) into the ground. My cell phone is 5 years old. The walls of my apartment are bare. I don't have cable TV, I don't subscribe to newspapers or magazines, and I don't own a pet. In all of these cases I don't feel like I'm \"\"sacrificing\"\" anything; food and clothes and cell phones and pets just don't matter to me. If you truly feel that you're missing something in your life by not having a luxury car -- that owning one would be more satisfying than owning the corresponding tens of thousands of dollars -- then go for it. Just be sure to consider all the other things that money could buy before you do. Lastly, buy in cash. Don't make monthly payments unless you enjoy giving money away to the bank!\"",
"title": ""
},
{
"docid": "4cbada984ad47f38180d900c2314d9b6",
"text": "Assuming that luxury goods like cars are currently owned by the rich, taxing them further would simply raise the prices of the goods further on the market. I would suggest giving a small number of goods like cars to random members with low cash, who can then bring down prices. They will then have more cash too.",
"title": ""
},
{
"docid": "acd55a470f0821002f4fa85d7e292065",
"text": "Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Rental cars are typically driven by people over 25, these are typically people with some financial means (air travel, credit card). Additionally, rental cars are subject to frequent inspection and likely to be on tighter maintenance schedules than many owners would keep. So while some people may drive a rental harder than they would their own car, it's not typical, and not likely to result in some hidden damage that makes a rental less desirable (all else being equal) on the used-car market. Does the fact that they sell the car mean during this time suggest that they know the car's cost of further maintenance or other costs will be higher? Or is there another reason they sell at this time which, has a calculated advantage to them, but which is less than idea statistically for me, the purchaser? Rental companies buy at incredible volumes, as such, some manufacturers have programs where they will buy back used cars from the rental company at a set price and/or time. Other incentives are guaranteed depreciation, wherein the manufacturer will make up the difference if the used vehicle doesn't sell for a set percentage of it's purchase price after a set amount of time. Outside of these incentive programs, rental companies also get substantial volume discounts, and they typically are buying base models which hold value better than their higher-trim counterparts (according to KBB market analyst). So the conventional wisdom about depreciation doesn't really apply. The timing of their sales is primarily based on their purchasing arrangements and their desire to keep an up to date fleet, not on projected maintenance/repair costs. The best you can do with any used-car purchase is to test-drive, get a pre-purchase inspection, and review whatever history is available.",
"title": ""
},
{
"docid": "51e511dbb25f73cf55b0ab15544d9a8a",
"text": "A used luxury car coming out of lease is usually very affordable. They are usually in good condition, still look relatively new, and are within the same price range as a newer Toyota or Honda.",
"title": ""
},
{
"docid": "6413ee99fb81aa3983660f259b299950",
"text": "Tesla is not planning to sell 100k cars in 2015, they plan to have an annualized run rate of 100k by the end of 2015. Also, the luxury market is pretty close to 50/50 between large sedans and SUVs, so Tesla figures they can sell as many SUVs as they can sell sedans, and they can almost certainly sell 50k sedans considering they're easily selling 35k without advertising whatsoever and with long wait times and barely having penetrated China or RHD markets. Also, that 100k is worldwide, not just in the US.",
"title": ""
},
{
"docid": "b1c91b3a85c77daa1716961527a74130",
"text": "If everyone bought used cars, who would buy the new cars so that everyone else could buy them used? Rental car companies? Your rant expresses a misunderstanding of fundamental economics (as demand for used cars increases, so will prices) but economics is off-topic here, so let me explain why I bought a new car—that I am now in the 10th year of driving. When I bought the car I currently drive, I was single, I was working full-time, and I was going to school full-time. I bought a 2007 Toyota Corolla for about $16,500 cash out the door. I wanted a reliable car that was clean and attractive enough that I wouldn't be embarrassed in it if I took a girl out for dinner. I could have bought a much more expensive car, but I wanted to be real about myself and not give the wrong impression about my views on money. I've done all the maintenance, and the car is still very nice even after 105K miles. It will handle at least that many more miles barring any crashes. Could I have purchased a nice used car for less? Certainly, but because it was the last model year before a redesign, the dealer was clearly motivated to give me a good deal, so I didn't lose too much driving it off the lot. There are a lot of reasons why people buy new cars. I didn't want to look like a chump when out on a date. Real-estate agents often like to make a good impression as they are driving clients to see new homes. Some people can simply afford it and don't want to worry about what abuse a prior owner may have done. I don't feel defensive about my decision to buy a new car those years ago. The other car I've purchased in the last 10 years was a four year old used car, and it certainly does a good job for my wife who doesn't put too many miles on it. I will not rule out buying another new car in the future either. Some times the difference in price isn't significant enough that used is always the best choice.",
"title": ""
},
{
"docid": "9610fe7508b465d63989a60219f2358a",
"text": "If you're a few decades older, your generation is mostly to blame for this reversal of fortunes in the US. 1969 was the peak of American culture. Not since 1969 have more cars been sold in the US despite a doubling in the population. The average age of a US vehicle used to be between 3-5 years now it is between 8 - 12 years old. A poorer population cannot afford a new car as often anymore. How do you expect consumes to shop at Sears and give them high profits if they don't have jobs themselves.",
"title": ""
},
{
"docid": "4cda00618002da25e1c6d05efbb8ba80",
"text": "A premium car rental agency will sell a car which is working very well and quite far from the verge of breaking apart. They don't want to take the risk that one of their premium customers paying premium rates receives a worn-looking car which runs less than absolutely perfect (or even breaks down). They need to keep up their premium reputation. These premium agency also have a major marketing impact for the car industry. That's probably the main reason why they receive such massive discounts (see thelem's post). Obviously, the Mercedes Benz AMG Edition rental car will have a lasting impression on the driver (and the people not renting it, but seeing the boastful ads of the car rental company). So both the car industry and the rental company want this lasting impression to be a perfect one. A holiday car rental agency may have much lower standards. They often don't have recurring customers. They don't rent premium cars to premium customers but cheap cars to cheap customers.They don't receive the discounts the premium agencies receive. And they will milk their car to the max. You will notice that they windows fall out of the car when you bang the door shut. You will find that opening the door will be more difficult than breaking into the car. The seats may be stained - at least in the spots where some of the upholsters is still present. On the plus side, if you are lucky, the heating still works. On the minus side, you might not be able to turn it off. Water might leak into the car when it's raining, but that's not much of a problem as it will drain out through the holes in the bottom. No fear that water might rush in through these holes when driving though a puddle - the engine will not start during humid weather, so that's a non-issue. In any case, car rental customer might have mistreated the car. The engine has most probably not been run in. However, this appears to be less than an issue with modern car than it has been in the past. And very very few rental car drivers think that they really have to absolutely emulate Michael Schumacher just because they drive a car which is not their own. And anyway, that is a risk you take with about any used car.",
"title": ""
},
{
"docid": "06a6da7796e678cdfb951542d9ec1323",
"text": "\"How can people afford luxury cars? The same way they can afford anything: by finding it cheaply, saving for it, or adjusting their priorities. Company cars - either paid for by the company, or as part of a bonus/compensation/salary sacrifice scheme. I have friends who drive luxury cars, but they pay £200/month - not much more than, for example, finance on a used Honda People who have paid off their mortgage. There are people who spend a decade pouring every cent they have into a mortgage. Once paid off, they have £500-1500 a month \"\"spare\"\" People who have different priorities to you. I'm not bothered about big houses and holidays, but I love cars: I'd rather spend an extra £100/month on my car and have a holiday every 2 years, not every year People who only run one car in the family: if you're running two cars at £200/month, then discover one of you can work from home, you could have one £400 car and still be saving money on running costs. People who don't have (or want) children. Children are expensive, if they aren't part of your plans then you can save a lot of money for luxuries.\"",
"title": ""
},
{
"docid": "999b40cde6e55b3adddd1185da7fddc0",
"text": "\"Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Many of those are also written by unqualified individuals for publication on blog farms and encourage all sorts of odious financial practices. That's not even considering the interests of who is paying to advertise on said blogs-- I'm sure their interests align with making sure you always pay top dollar for a new car. Because those icky used ones are so mistreated! Never trust financial advice published on the internet (or in the media, for that matter). Edit: One caveat on further thought-- never, never buy used vehicles from government auctions (impounds, asset seizures, old police cars, etc). Anybody irresponsible enough to go to jail or abandon their car long enough to lose their assets likely isn't a responsible owner of such, and cops and crooks alike do absolutely beat the snot out of police cars. When it comes to government-owned vehicles (police cars, schoolbuses) municipal governments are notoriously stingy and will squeeze every last minute of use out of them before putting them on the market. If you're buying a government vehicle, assume it's being sold because it has intractable problems. But from a financial point of view, I notice that rental agencies sell cars within the first two years, during the time when they depreciate the most. Bingo. I figure many large rental companies will have mathematicians who calculate the best time to sell. Does the fact that they sell the car mean during this time suggest that they know the car's cost of further maintenance or other costs will be higher? Or is there another reason they sell at this time which, has a calculated advantage to them, but which is less than idea statistically for me, the purchaser? It doesn't take a PhD to realize it's bad for business if your model revolves around renting out 1970s rustbuckets that run the risk of breaking down and leaving customers stranded in inopportune or dangerous places. Uhaul in particular has a terrible reputation for this, and it shows in the condition of their trucks-- relics of the 90s, all of them. Uber won't let you drive for them if your car is older than 7-10 years for the same reasons. Yes, as a car ages, the chance of having to make repairs increases. Rental agencies are in the business of renting vehicles, not running service centers and garages. It's more aligned with their core business model to just dispose of cars once they've squeezed the most reliable years out of them and amortize the vehicles' depreciation across the tax deductions and fleet pricing they enjoy when buying new ones. This gets them out of the service game and lets them focus on their core business-- procurement and rental. There's no calculated \"\"time-to-lemon\"\" that they're trying to skirt here; they're just trying to avoid having to make any repairs whatsoever.\"",
"title": ""
},
{
"docid": "f3c1e20f391057071b3d0a731b556c22",
"text": "You calculate the loss by adding back the interest that was made off the car loan. This is usually mitigated through down payments and longer loan terms (the 7 year auto loan is becoming popular). After a downpayment and a year's worth of payments (which are interest front loaded) I doubt that finance companies would have huge losses.",
"title": ""
},
{
"docid": "1a22b4e9f1b2e4f1d55da6cf1109009d",
"text": "I'll read between the lines: you're (justifiably) feeling smart about how you manage your money: debt-free, smart about your spending, saving for retirement, etc. But you're looking at all those fancy cars and feeling a little left out. And Americans especially have a love for automobiles -- it's not just transportation, a car is a status symbol. Yes, some of those people afford their cars just fine. But a lot of people out there are AWFUL about saving and spend recklessly. Americans are notoriously bad at saving for retirement, for example. So if they aren't saving, where does that money go? They buy stuff they don't need. They live paycheck-to-paycheck. They run up debt. They buy cars. Overspending on cars is so easy to do: leases have low payments, or you can get a 6 year loan. There are many financial tricks for people that think only in terms of monthly payments. So instead of lamenting that the grass is greener as all those BMWs whiz by, smile deeply and enjoy that feeling of sleeping well at night instead of stressing out about the next credit card bill and car payment waiting for you in the mailbox. (And at the same time, if you really want a luxury car and want that to be a priority, you can make it happen and not go broke. Get a late model year certified pre-owned vehicle just out of lease, for example. Saves a ton of money, is still under warranty, and satisfies the lust for luxury.)",
"title": ""
},
{
"docid": "c5778c02b5f7bc25fa3180e5e555eb28",
"text": "It depends completely on the car. Some cars retain their value much better, and others drop in value like a rock (no pun intended). The mileage and condition on a car also has a huge impact on value. According to this site, cars on average lose 46% of their value in three years, so seeing one that drops 62% in roughly 3 years does not seem impossible. That value could also have been trade-in value, which is significantly lower than what you could get with a private party sale (or what you'd pay to get that same car from a dealer) One example: a new Ford Taurus (lowest model) has a Kelly Blue Book value of $28,000. A 2014 Taurus (lowest model) with average mileage and in fair condition has a private party value of about $12,000, for a 57% drop in value. Note: I picked Taurus because it's a car that should not have exceptional resale value (unlike BMW, trucks, SUVs), not to make any kind of judgement of the quality or resellability of the car)",
"title": ""
},
{
"docid": "5e9b3afd041177df172055cd40cbd57b",
"text": "Alternative: buy a recent-model used car in good condition. Or buy an older car in good condition. Let someone else pay the heavy depreciation that happens the moment you drive a new car off the dealer's lot.",
"title": ""
},
{
"docid": "afae3b9d38616f166679f52fff990a33",
"text": "I use GnuCash which I really like. However, I've never used any other personal finance software so I can't really compare. Before GnuCash, I used an Excel spreadsheet which works fine for very basic finances. Pros Cons",
"title": ""
}
] |
fiqa
|
84f34ee79e6dcfd6dc871d1c21eab217
|
Automatic Extension online filing request gets denied w/ code R0000-052-01 - why?
|
[
{
"docid": "4462ce3779ad4d896b290b0c34ec9834",
"text": "There are penalties for failure to file and penalties for failure to pay tax. The penalties for both are based on the amount of tax due. So you would owe % penalties of zero, otherwise meaning no penalties at all. The IRS on late 1040 penalties: Here are eight important points about penalties for filing or paying late. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments. The IRS will work with you. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date. If both the 5 percent failure-to-file penalty and the ½ percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time. If the IRS owes you a refund, April 15 isn't much of a deadline. I suppose the real deadline is April 15, three years later - that's when the IRS keeps your refund and it becomes property of the Treasury. Of course, there's little reason to wait that long. Don't let the Treasury get all your interest.",
"title": ""
}
] |
[
{
"docid": "109ca3b612a0ed712240453010ca9c4f",
"text": "This happened to me in the mid 90's. I wanted to withdraw enough cash from my account to buy a new car and they nearly panicked. I took a bank draft instead. I discovered afterward that they can require up to a week's notice for any withdrawl.",
"title": ""
},
{
"docid": "b15d163a90235fed85ed81ab71d178ac",
"text": "\"Do I understand correctly, that we still can file as \"\"Married filing jointly\"\", just add Schedule C and Schedule SE for her? Yes. Business registration information letter she got once registered mentions that her due date for filing tax return is January 31, 2016. Does this prevent us from filing jointly (as far as I understand, I can't file my income before that date)? IRS sends no such letters. IRS also doesn't require any registration. Be careful, you might be a victim to a phishing attack here. In any case, sole proprietor files a regular individual tax return with the regular April 15th deadline. Do I understand correctly that we do not qualify as \"\"Family partnership\"\" (I do not participate in her business in any way other than giving her money for initial tools/materials purchase)? Yes. Do I understand correctly that she did not have to do regular estimated tax payments as business was not expected to generate income this year? You're asking or saying? How would we know what she expected? In any case, you can use your withholding (adjust the W4) to compensate.\"",
"title": ""
},
{
"docid": "dff25602e8d4dd787e03f8d8c1b97ed8",
"text": "A federal or state regulator has ordered that the RDFI cannot participate in the ACH network, or the RDFI's participation has been limited in some capacity. You need to contact the RDFI for more details...ask for their ACH operations group. The RDFI is the institution receiving the ACH transaction. It could be either the debit side or credit side. It is not the institution originating the ACH transaction, which is the ODFI. The entire RDFI institution might be restricted for an extremely poor audit, or rampant suspect money laundering or terrorist funding. Specific accounts at the RDFI might be limited for a variety of reasons, including freezing the account for suspicious activity (money laundering or terrorist funding), court order for impending legal proceedings, IRS levies for nonpayment of taxes, or perhaps child support delinquency. I am making an educated guess on the reasons.",
"title": ""
},
{
"docid": "bf78dd5a7a6351f18b9f61fd32b1277d",
"text": "\"The forms are almost identical, just formatted slightly differently. I just compared an old copy of an R form with the current one without the R. I don't know why they removed the R. In any case, I filed my biannual this year on llc-12, no \"\"r\"\", and no issues.\"",
"title": ""
},
{
"docid": "a33b7e79c798f5df57f893117b965db2",
"text": "Thanks it is problem for class and I don't want to give the problem I just want to understand how to actually do it and the book hasn't been much help. Only additional information I can provide is In Inventory – 15 days Accounts Receivable outstanding – 35 days Vendor credit – 40 days Operating Cycle – 50 days",
"title": ""
},
{
"docid": "669955e5acafee701a6cc0e6b6ab3e34",
"text": "There actually are legitimate reasons, but they don't apply to most people. Here are a few that I know of: You're self-employed and have to pay quarterly estimated taxes. Rather than wait for the refund when you already have to pay 1/4 of next year's taxes at the same time, you just have the IRS apply to refund forward. (so you're not out the money you owe while waiting for your refund). You're filing an amended or late return, and so you're already into the next year, and have a similar situation as #1, where your next year's taxes have already come due. You're planning on declaring bankruptcy, and you're under the Tenth Circuit, those credits might be safe from creditors For almost any other situation, you're better off taking the money, and using it to pay down debt, or put it somewhere to make interest (although, at the current rates, that might not be very much).",
"title": ""
},
{
"docid": "97311f295ea1deb9e67480d11a99e1bd",
"text": "If you already filed the DC return, you can try and wait with filing the NJ return until you get the answer from DC. You can file an extension request with the NJ division of taxation here. Or, you can file without claiming the credit, and worst case amend later and claim it if DC refuse to refund. I find it highly unlikely that DC will decide that a person staying for a couple of months over the year in hotels will count as a resident.",
"title": ""
},
{
"docid": "70389b5706555d25cf8919b3c1cccb05",
"text": "You should apply for 83(b) within 30 days. 10 months is too late, sorry.",
"title": ""
},
{
"docid": "ab60ff3d34ff776f877eb92c0f2a2706",
"text": "\"This is an unfortunate situation for you. You have zero chance at your question number 1, if someone was going to bend this rule for you it would have happened already. The answer to question number 2 is pursue solution number 3. The overriding issue is that the IRS makes these rules, not the employer/plan sponsor or the administrator. You can't talk the plan administrator in to reimbursing you, their system likely doesn't even have a function to do so. FSA timing issues can be complex and I think that's the root of your issue because when an expense can be incurred (date of service versus date of payment) and when a claim must be filed are different things. It's really common to bend the rules on when a claim is submitted, but not when it was incurred. It's really common for an exiting employee to have 30 days to submit expenses for reimbursement. FSA expenses must always be incurred within the specified plan year, or within your dates of employment if you weren't employed for the entire plan year, this is specified by the IRS. It seems like some wires were crossed when you asked this question. You were asking \"\"can I still incur claims\"\" and they were hearing \"\"how long do I have to submit an expense that has already been incurred.\"\" Some plans allow COBRA continuation on FSA which generally does not make sense. Your contributions to the plan would use after tax dollars but for folks who know they have an eligible expense coming it can make sense to continue via COBRA in retain your eligibility under the plan so you can incur a claim after your employment termination. Regarding number 3. This sort of reimbursement would be outside the plan, no precedent is necessary. You've gotten them to claim it was their mistake, they're going to reimburse you for their mistake, it has nothing to do with the FSA. Good luck.\"",
"title": ""
},
{
"docid": "535ddae1e35fbb6fae32764c9f58cea6",
"text": "I did receive TurboTax's automatically generated confirmation of successfully completing tax filing electronically the day I did my tax on their web site. About 24 to 48 hours after you push the button at TurboTax the IRS should either confirm or reject the initial check of the tax documents. You should return to the TurboTax website to make sure the IRS has accepted the reutrn. Next review either the confirmation you received when you pushed the button or the information at the TurboTax site. It should specify when the money would be withdrawn. You were given options regarding payment method and date you want to make the payment. Many people who finish their tax paperwork early, but owe money wait until the last day to submit. Now it is possible to submit paperwork early but specify a date just before the deadline. Print out or even better save an electronic copy of the information at the TurboTax website. I have no idea how long it takes the IRS to actually pull the money from an account, once the day you specified has occurred. You have to plan as if the withdraw will happen on the exact date, but with millions of tax payers making transactions it may be delayed by a day or two.",
"title": ""
},
{
"docid": "f34126938100d1ea659c4147bd5c1df9",
"text": "\"The SEC requires a certain format when submitting filings, which generally does not line up with how documents are typeset for printing. Rather than typeset the entire document again, it's just sort of accepted that the format in EDGAR will suck. Typesetters actually call the process \"\"EDGARizing.\"\" (I'm not making this up, I used to work in the department at a mutual fund company that put together the financial reports for the funds.) My guess is it's a relic from legacy systems at the SEC that can't handle newer formats like PDF.\"",
"title": ""
},
{
"docid": "15a2c99870047a0f0da6754e8d2abb9e",
"text": "Hence why I pay bill by bill and don't authorize automatic withdrawals. Are you telling me your online banking and/or utility company don't allow you to make non automatic payments online? If so I guess thats the answer to OP's question...",
"title": ""
},
{
"docid": "6c6506ac79cb6824fd2b472b524cba0f",
"text": "Since you both are members of the LLC - it is not a single-member LLC, thus you have to file the tax return on behalf of the LLC (I'm guessing you didn't elect corporate treatment, so you would be filing 1065, which is the default). You need to file form 4868 on behalf of yourselves as individuals, and form 7004 on behalf of the LLC as the partnership. Since the LLC is disregarded (unless you explicitly chose it not to be, which seems not to be the case) the taxes will in fact flow to your individual return(s), but the LLC will have to file the informational return on form 1065 and distribute K-1 forms to each of you. So you wouldn't pay additional estimated taxes with the extension, as you don't pay any taxes with the form 1065 itself. If you need a help understanding all that and filling the forms - do talk to a professional (EA or CPA licensed in your state). Also, reconsider not sending any payment. I suggest sending $1 with the extension form even if you expect a refund.",
"title": ""
},
{
"docid": "b92883778774ac2ae3a05a50028a5f5a",
"text": "The slips from your bank for your HSA account are for an account already established and thus the bank is willing to accept your deposits even if they arrive at the bank after the April 15 deadline, as long as the postmark is April 15 or earlier. The account exists in the bank, they know who you are, and that the payment is received after April 15 is just due to the normal (or even abnormal) delays in postal delivery. For the new account that you tried to establish (with appropriate notarization and timely postmark etc), the credit union could not have received the paperwork as of the close of business on April 15 (except in the very unlikely circumstance that a local letter deposited in the mailbox in the morning gets delivered the same day by USPS: don't extrapolate from stories of how mail was delivered in London in Victorian times). Ergo, you did not have an HSA account in the credit union as of April 15, and they are perfectly correct in refusing to open an account with a April 15 date and put money into it for the previous tax year. To answer the question asked: Are they allowed to ignore the postmark date? Yes, not only are they allowed to ignore the postmark date, the IRS insists that they ignore the postmark date. The credit union prefers to report only the truth: as of April 15, you had not established an HSA account as of April 15; to say otherwise would be making a false statement to the IRS.",
"title": ""
},
{
"docid": "6ee4c9dabeb87c6563df6ee458d43127",
"text": "This might be a good reason to check that box saying you want paper reports for those monthly statements. After all, you don't get any cost savings for opting for electronic files. Otherwise you are stuck arguing without documentation that you lost those files proving my account balance in the EM event.",
"title": ""
}
] |
fiqa
|
0ab4298b8106d259eeb42659318b2134
|
How to handle missing W2 from failed direct deposit only company?
|
[
{
"docid": "55b2e971e9b595c7abcc28b01ad0078c",
"text": "Yes, there's a way. I actually wrote a blog post about it. Its a new service from the IRS which allows you pulling your account online. IRS also has an instruction page just for this case here.",
"title": ""
}
] |
[
{
"docid": "34fe1827bcc69fdc3fcd8379b228bad4",
"text": "As others have said, make sure you can and do file your taxes on a cash basis (not accrual). It sounds like it's very unlikely the company is going to issue you a 1099 for invoices they never paid you. So you just file last year's taxes based on your income, which is the money you actually received. If they do pay you later, in the new year, you'll include that income on next year's tax return, and you would expect a 1099 at that time. Side note: not getting paid is unfortunately common for consultants and contractors. Take the first unpaid invoice and sue them in small claims court. After you win (and collect!), tell them you'll sue them for each unpaid invoice in turn until they pay you in full. (You might need to break up the lawsuits like that to remain under the small claims limit.)",
"title": ""
},
{
"docid": "4b2c3fb6b0acfe156e828ef4e037b3c7",
"text": "What? My last room mate was a teller, and I can tell you this isn't the case. If you're given a bad payroll cheque or a bounced cheque the bank will know before its transferred. If payroll bounces find a new job because you're fucked. If you're working for a company that makes over 1 million a year, they can issue paper cheques but choose not too for whatever reason.",
"title": ""
},
{
"docid": "41faca718c8433eb62c37726c8cf2c99",
"text": "\"As far as the banker himself goes, it's a customer service issue. WF is not going to tell you about their internal discipline (or oughtn't, anyway), other than potentially to confirm that the banker does or does not still work there; that's the closest they should get to telling you about it. I'm a (very) former retail manager, and that's absolutely the most I'd ever do in a case like this; and trust me, even with good customer service reps, you get requests to fire someone a lot, sometimes valid, sometimes not. You did the correct thing from your end: you brought the issue to their attention. Despite the quota, it's (hopefully) not permitted to sign people up without their permission (since that's illegal!), and I can say that in my retail experience, with these promotions with great incentive to cheat in this manner, one of the main things our loss prevention department did was to monitor data to see if people were illicitly signing people up for cards or otherwise cheating the system. That could be a very bad thing from a customer service point of view and from a legal point of view. What you should have done (or possibly did, but it's not clear in your post) is, after you reported the issue, asked for a re-contact on a particular date in the future - not \"\"after you've looked into it\"\", but \"\"Next friday I would like to get a call from you to discuss the resolution.\"\" Again, they're not going to tell you the discipline, but they should tell you at least that they've investigated it and will make sure it doesn't happen again, or similar. It's possible they will want more information from you at this point, and this is a useful way to make sure that request doesn't fall off of their plate. They should be able to, at least, tell you if there was a perceived issue on their end - it might be something meaningless to you, like \"\"He thought you said to sign up\"\", or something more descriptive, like \"\"He pushed the button to send you a notice, but our computer system screwed that up and made it an application\"\". You never know these days how easy it is to screw these things up. Now, they certainly should have fixed the issues on your end. Hopefully they did whatever you needed them to do banking-wise, or else you withdrew your money and went somewhere else. If not, follow up with that supervisor's supervisor, or go up a level or two to a regional director or equivalent. They may not be able to cancel the card for you, but the other banking-related things they certainly should fix. The card you probably just have to cancel and be done with. As far as the misuse of personal information, one thing I'd consider doing is placing a freeze on your credit report. Then this could never have happened - you would have to lift it to have your report pulled to be given the card. This is not free, though, so consider this before doing this.\"",
"title": ""
},
{
"docid": "0493d4f827147a296d9f105fe8748726",
"text": "They might be concerned with having to charge sales tax in California if they have a single employee in California, creating a nexus situation with CA. If that's the case, or even if there is some other issue, you might be able to switch from being a W2 employee to being a 1099 independent contractor. There's a host of additional issues this could cause, but it alleviate the nexus problem (if THAT is the problem). Here's a terrible solution you can bring up, but shouldn't do under any circumstances: offer to set up a mailing address in an allowed State, and give your company plausible deniability with regards to your legal residence. Obviously, this is a terrible idea, but exploring that option with your employer would help you suss out what the actual objection is. Ultimately, anything said here about the reason is just conjecture. You need to talk to the decision maker(s) about the real reason behind the denial. Then you can talk through solutions. Also - don't forget that you can get another job. If you are serious about a future with your girlfriend, you should put that relationship ahead of your current employment comfort and security. If you are willing to walk away from your position, you are in a much better situation to negotiate.",
"title": ""
},
{
"docid": "65c68a828b7a4907e8704f5296b345ee",
"text": "If you're under audit - you should get a proper representation. I.e.: EA or CPA licensed in California and experienced with the FTB audit representation. There's a penalty on failure to file form 1099, but it is with the IRS, not the FTB. If I remember correctly, it's something like $50 or $100 per instance. Technically they can disqualify deductions claiming you paid under the table and no taxes were paid on the other side, however I doubt they'd do it in a case of simple omission of filing 1099 forms. Check with your licensed tax adviser. Keep in mind that for the IRS 2011 is now closed, since the 3-year statute of limitations has passed. For California the statute is 4 years, and you're almost at the end of it. However since you're already under audit they may ask you to agree to extend it.",
"title": ""
},
{
"docid": "ca7d8dfd97eb2966bce100d8c393e62e",
"text": "You should be receiving monthly P&L statements at the very least. Who did you have filing taxes, doing payroll, performing audits? It seems that many restaurants and bars have a slippery cash issue where profits seem to just slide out the doors. Everyone touching cash might be skimming and if the manager is doing all the totals and reconciling the tills and filing taxes then that single point of failure is going to KILL you.",
"title": ""
},
{
"docid": "b76688b2a41aa08caa2425ee232c376b",
"text": "I actually think your boss is creating a problem for you. Of course it's taxable. The things IRS will look at (and they very well might, as it does stand out) what kind of payment is that. Why did it not go through payroll? The company may be at risk here for avoiding FICA/FUTA/workers' compensation insurance/State payroll taxes. Some are mandatory, and cannot be left to the employee to pay. On your side it raises your taxable income without the appropriate withholding, you may end up paying underpayment penalties for that (that is why you've been suggested to keep proofs of when you were paid). Also, it's employment income. If it is not wages - you're liable for self-employment taxes (basically the portion of FICA that the employer didn't pay, and your own FICA withholding). When you deposit the check is of no matter to the IRS, its when you got it that determines when you should declare the income. You don't have a choice there. I suggest asking the company payroll why it didn't go through them, as it may be a problem for you later on.",
"title": ""
},
{
"docid": "982b04c5e536ff4051aaacf79f34c438",
"text": "Some lenders will work with you if you contact them early and openly discuss your situation. They are not required to do so. The larger and more corporate the lender, the less likely you'll find one that will work with you. My experience is that your success in working out repayment plan for missed payments depends on the duration of your reduced income. If this is a period of unemployment and you will be able to pay again in a number of months, you may be able to work out a plan on some debts. If you're permanently unable to pay in full, or the duration is too long, you may have to file bankruptcy to save your domicile and transportation. The ethics of this go beyond this forum, as do the specifics of when it is advisable to file bankruptcy. Research your area, find debt counselling. They can really help with specifics. Speak with your lenders, they may be able to refer you to local non-profit services. Be sure that you find one of those, not one of the predatory lenders posing as credit counselling services. There's even some that take the money you can afford to pay, divide it up over your creditors, allowing you to keep accruing late/partial payment fees, and charge you a fee on top of it. To me this is fraudulent and should be cause for criminal charges. The key is open communication with your lenders with disclosure to the level that they need to know. If you're disabled, long term, they need to know that. They do not need to know the specific symptoms or causes or discomforts. They need to know whether the Social Security Administration has declared you disabled and are paying you a disability check. (If this is the case, you probably have a case worker who can find you resources to help negotiate with your creditors).",
"title": ""
},
{
"docid": "58d6c18a52088f40b5002b373f456cae",
"text": "If you leave without having met all the obligations in the contract they could sue you for the money. The size of the company may mean that they are experienced in collecting their debts. The insurance they made you pay for, may pay them back if they meet all the requirements in the policy. That means that you will have to read the terms of the policy to see if the insurance company will come after you for the losses. It is likely that your skipping out early while owing money will be attached to your credit history without your SSN.",
"title": ""
},
{
"docid": "0df54c4fd766fcffc01e0aaeb445237d",
"text": "The IRS allows filers to attach a statement explaining the reason for late filing. I have had clients do this in the past, and there has never been an issue (not that that guarantees anything, but is still good to know). Generally, the IRS is much more lenient when a taxpayer voluntarily complies with a filing requirement, even if it's late, than if they figure it out themselves and send a notice.",
"title": ""
},
{
"docid": "4e67a63703b2ce3423d76eebfd689f7b",
"text": "The bottom line is something in your story is not adding up. You had two checks one that is voided, and one that is not. Lets say they are both written against your account for $100. Lets also assume that have exactly $100 in your account. You give the Liquor Store the voided one, they give you $100, but when they attempt to cash the check at their bank they are denied and assessed a $20 fee. You spend the $100 they gave you; however, you still should have $100 in your account as the check was not cashed. You want to make things right with the liquor store. You should be able to withdraw the $100 you still have in the bank and give them that much. While they will still be out the $20 fee, that should make them feel much better about you as a customer. Tell them when you will be paid and that you will give them the $20 on that date. Then do so. The only way this problem is not solvable is that you spent the $100 that was left in the bank. In that case, the Liquor store is correct you stole the money. More accurately you spent money that wasn't yours.",
"title": ""
},
{
"docid": "83b0ba3e5841488f99a591f1984b9dc7",
"text": "\"Your question does not say this explicitly, but I assume that you were once a W-2 employee. Each paycheck a certain amount was withheld from your check to pay income, social security, and medicare taxes. Just because you did not receive that amount of money earned does not mean it was immediately sent to the IRS. While I am not all that savvy on payroll procedures, I recall an article that indicated some companies only send in withheld taxes every quarter, much like you are doing now. They get a short term interest free loan. For example taxes withheld by a w-2 employee in the later months of the year may not be provided to the IRS until 15 January of the next year. You are correct in assuming that if you make 100K as a W-2 you will probably pay less in taxes than someone who is 100K self employed with 5K in expenses. However there are many factors. Provided you properly fill out a 1040ES, and pay the correct amount of quarterly payments, you will almost never owe taxes. In fact my experience has been the forms will probably allow you to receive a refund. Tax laws can change and one thing the form did not include last year was the .9% Medicare surcharge for high income earners catching some by surprise. As far as what you pay into is indicative of the games the politicians play. It all just goes into a big old bucket of money, and more is spent by congress than what is in the bucket. The notion of a \"\"social security lockbox\"\" is pure politics/fantasy as well as the notion of medicare and social security taxes. The latter were created to make the actual income tax rate more palatable. I'd recommend getting your taxes done as early as possible come 1 January 2017. While you may not have all the needed info, you could firm up an estimate by 15 Jan and modify the amount for your last estimated payment. Complete the taxes when all stuff comes in and even if you owe an amount you have time to save for anything additional. Keep in mind, between 1 Jan 17 and 15 Apr 17 you will earn and presumably save money to use towards taxes. You can always \"\"rob\"\" from that money to pay any owed tax for 2016 and make it up later. All that is to say you will be golden because you are showing concern and planning. When you hear horror stories of IRS dealings it is most often that people spent the money that should have been sent to the IRS.\"",
"title": ""
},
{
"docid": "91f4c060b9360b9405745f9a6e20c852",
"text": "File a 2nd amended return that corrects the mistake I made on the 1st amended return This. Pay the $500 before April 27th and try to get it back later This.",
"title": ""
},
{
"docid": "1ab01f6b877e2fecbd87017f51f0d487",
"text": "She filed for 0 withholdings in her W4, so my (unprofessional) guess was that she'd be owed money, and therefore the IRS wouldn't care much if she didn't file her taxes.† Maybe, but doesn't she want that money back? Is she at as much risk as any other individual of being audited and penalized to the same degree if she skips filing her taxes? Audited and penalized are not the same. She's at the same risk of being audited, and even slightly higher since the IRS got reports of her wages, but didn't get the matching report from her. They may want to ask why. But it doesn't mean she's going to be penalized for anything. Being audited doesn't mean you did something wrong. Or does the IRS tend to overlook such individuals. The IRS might want to overlook because they're the ones owning money. She cannot get a refund without filing a tax return. She'd file her taxes today if she could, but the worry is that time's running out Filing an extension is free and it postpones the deadline to file till OCTOBER!",
"title": ""
},
{
"docid": "b17812fbcc51ba2eaa7f18c455796b30",
"text": "Should I have a W-2 re-issued? A W-2 can be corrected and a new copy will be filed with the IRS if your employer incorrectly reported your income and withholding on a W-2 that they issued. In this case, though the employer didn't withhold those taxes, they should not reissue the W-2 unless they plan to pay your portion of the payroll taxes that were not withheld. (If they paid your share of the taxes, that would increase your gross income.) Who pays for the FICA I should have paid last year? Both you and your employer owe 7.65% each for FICA taxes. By law your employer is required to pay their half and you are required to pay your half. Both you and your employer owe additional taxes because of this mistake. Your other questions assume that your employer will pay your portion of the taxes withheld. You employer could decide to do that, but this also assumes that it was your employer's fault that the mistakes were made. If you transitioned to resident alien but did not inform your employer, how is that your employer's fault?",
"title": ""
}
] |
fiqa
|
2f45bf863171086439f655058997d79a
|
S-Corp partnership startup. How to pay owners with minimal profit?
|
[
{
"docid": "83d700ae94fb9917fc1904ecdd1d0877",
"text": "\"If you're really interested in the long-term success of your business, and you can get by in your personal finances without taking anything from the business for the time being, then don't. There is no \"\"legal requirement\"\" to pay yourself a prevailing wage if doing so would put the company out of business. it is common for a company's principals not to draw wages from the business until it is viable enough to sustain payroll. I was in that situation when I first began my business, so the notion that somehow I'm violating a law by being fiscally responsible for my own company is nonsense. Be wise with your new business. You didn't state why you feel the need to take some kind of payment out, but this can be a crucial mistake if it imperils your business or if that money could be better spent on marketing or some other areas which improve revenues. You can always create a salary deferral agreement between yourself and your own company which basically states that the company owes you wages but you are, for the time being, willing to defer accepting them until such time that the company has sufficient revenues to pay you. That's one solution, but the simplest answer is, if you don't need the money you're thinking of paying yourself, don't do it. Let that money work for you in the business so that it pays off better in the long run. Good luck!\"",
"title": ""
},
{
"docid": "7886e41ad326570e6610559aefb4c55f",
"text": "We don't make enough to really consider it a salary, but I've heard using a draw without a salary is a bad idea. As any other illegal action, not paying yourself a reasonable salary when being a corporate officer is indeed a bad idea. I have no idea what I need to do to actually get some money in our pockets. The answer is simple. You need to earn more money. Since it is S-Corp, it doesn't matter if you keep the profits on the corporate account or distribute - the profits will be taxed to you. You are also, as I said above, required by law to pay yourself a reasonable salary. Reasonable meaning corresponding to market rates. Paying a CPA or a Software Engineer a minimum wage will not be reasonable. That is, of course, if you're profitable, you're not required to pay yourself more money than the corporation actually has. Just to be clear, my answer refers to the question asked, and the confusing answer above that made a claim that has no substantiation in the law. I do not intend to write a thesis about pros and cons of using S-Corp every time a question about reasonable salary is asked.",
"title": ""
},
{
"docid": "9c1f1e8e2449c5553a47f4f5373a243e",
"text": "S-Corp income is passed through to owners and is taxed on their 1040 as ordinary income. If you take a wage (pay FICA) and then take additional distributions these are not subject to FICA. A lot of business owners will buy up supplies/ necessary expenses right before the end of the tax year to lower their tax liability.",
"title": ""
}
] |
[
{
"docid": "300c2b236171618b127627cb296130ad",
"text": "Through your question and then clarification through the comments, it looks like you have a U.S. LLC with at least two members. If you did not elect some other tax treatment, your LLC will be treated as a partnership by the IRS. The partnership should file a tax return on Form 1065. Then each partner will get a Schedule K-1 from the partnership, which the partner should use to include their respective shares of the partnership income and expenses on their personal Forms 1040. You can also elect to be taxed as an S-Corp or a C-Corp instead of a partnership, but that requires you to file a form explicitly making such election. If you go S-Corp, then you will file a different form for the company, but the procedure is roughly the same - Income gets passed through to the owners via a Schedule K-1. If you go C-Corp, then the owners will pay no tax on their own Form 1040, but the C-Corp itself will pay income tax. As far as whether you should try to spend the money as business expense to avoid paying extra tax - That's highly dependent on your specific situation. I'd think you'd want to get tailored advice for that.",
"title": ""
},
{
"docid": "7b7bf351cd2a799c09043b696a6fae8e",
"text": "\"I did this a couple of years ago, and boy do I regret it. After many months of delayed, and new faces coming onto the team for a short period before leaving, there wasn't much hope to ever complete the project. I ended up accumulating debt (About 4.5 grand) that I am still paying off because I chased my dream. Unfortunately, anything can happen when you choose to pursue a goal. It can get delayed, stopped, or outright fail. At the bare minimum, you would best be prepared to deal with delays, competing products, and outright failures. If you say \"\"I have enough money to last me 12 months and I expect to take 7 months\"\", then you best be prepared to answer: These are just a handful of ideas, and there are plenty more that would need to be addressed. Probably the best thing that I have seen a few friends do is to ask for reduced hours. Working part time allows you more time while reducing, but not eliminating, the pay. Even better is that depending on your company, you could ask to go back to full time if your startup didn't work out. Another option is to do what I'm doing currently: Find a job with lots of downtime. My job is critical and the market here is starved of good techs. Even then, I have a solid 2-4 hours of work each day. The other 4-6 hours I can spend on my personal projects that may eventually lead into a startup. If you plan to do this though, make sure to read your agreements carefully. There may be restrictions on copyright and the likes by working on a personal project on company property. If you do plan to go this route, you might want to consult a lawyer (like I did) to make sure you won't get screwed later.\"",
"title": ""
},
{
"docid": "ce251ce6d31823ac7124eae816392f7c",
"text": "Do you have any insight on average *effective* rates paid by SE owners? As a counterpoint to your (very valid) links, filing as S-corp allows for taxes on distributions to be exempt from payroll tax and taxed at much lower rates. Also, being SE allows for various deductions not possible for wage earners. There's probably other examples not immediately coming to mind. Also, SE taxes equal taxes otherwise paid by employer + employee. It's just that those employer taxes don't appear on the employee's paystub so not everyone realizes this.",
"title": ""
},
{
"docid": "a040eda3ed2664e5f7bbb8bd1ddbf82c",
"text": "\"First off, with startups, forget that you know about common structures of debt and equity. Just try to think of this money as a generic \"\"investment\"\" that meets the investors risk and return objectives. Startups are unique in that they are high risk but generally have almost no assets or security for an investor. Investors generically want two things: 1) Return and 2) Limited Risk. Without speculating too much: consider that the investor might be viewing the return component as the 30% equity and the 8% dividend and he views the risk management component as the additional 30% equity, until repaid. A different way of looking at this might be that the investor would require an equity stake greater than 30% with greater than a 8% dividend if he did not get the initial investment back in return for the reduced stake. In other words, this structure is debt and equity because that is what the investor can demand. Maybe you can get around this by offering a higher equity stake or offering something else although this structure is common because it aligns interests of the investor and the startup.\"",
"title": ""
},
{
"docid": "c526e569e2ae563e14b933f146c30364",
"text": "\"Companies normally do not give you X% of shares, but in effect give you a fixed \"\"N\"\" number of shares. The \"\"N\"\" may translate initially to X%, but this can go down. If say we began with 100 shares, A holding 50 shares and B holding 50 shares. As the startup grows, there is need for more money. Create 50 more shares and sell it at an arranged price to investor C. Now the percentage of each investor is 33.33%. The money that comes in will go to the company and not to A & B. From here on, A & C together can decide to slowly cut out B by, for example: After any of the above the % of shares held by B would definitely go down.\"",
"title": ""
},
{
"docid": "5bd09952da9656e90f8489cbf956102a",
"text": "There is no right and wrong answer to this question. What you and your business partner perceive as Fair is the best way to split the ownership of the new venture. First, regarding the two issues you have raised: Capital Contributions: The fact that you are contributing 90% of initial capital does not necessarily translate to 90% of equity. In my opinion, what is fair is that you transform your contributions into a loan for the company. The securitization of your contribution into a loan will make it easier to calculate your fair contribution and also compensate you for your risk by choosing whatever combination of interest income and equity you see suitable. For example, you might decide to split the company in half and consider your contributions a loan with 20%, 50% or 200% annual interest. Salary: It is common that co-founders of start-ups forgo their wages at the start of the company. I do not recommend that this forgone salary be compensated through equity because it is impossible to determine the suitable amount of equity to be paid. I suggest the translation of forgone wages into loans or preferred stocks in similar fashion to capital contribution Also, consider the following in deciding the best way to allocate equity between both of you and your partner Whose idea was it? Talk with you business partner how both of you value the inventor of the concept. In general, execution is more important but talking about how you both feel about it is good. Full-time vs. part-time: A person who works full time at the new venture should have more equity than the partner who is only a part-time helper. Control: It is important to talk about control and decision making of the company. You can separate the control and decision making of important decisions from ownership. You can also check the following article about this topic at http://www.forbes.com/sites/dailymuse/2012/04/05/what-every-founder-needs-to-know-about-equity/#726842f3668a",
"title": ""
},
{
"docid": "e7c53800da86c53cc3a8b7a9c9ae3974",
"text": "There are many aspects to consider in deciding what sort of company you want to form. Instead of an S-corporation, you should determine whether it would be better to form a Limited Liability Company (LLC), Limited Partnership (LP) or even a professional company (PC). Littleadv is correct: There is minimal benefit in forming an S-corp with you and your wife as the shareholders, if you will be the only contributor-worker. There are costs associated with an S-corporation, or any corporation, that might outweigh benefits from more favorable tax treatment, or personal protection from liability: Filing fees and disclosure rules vary from state to state. For example, my father was a cardiologist who had no employees, other than my grandmother (she worked for free), in a state with income taxes (NM). He was advised that a PC was best in New Mexico, while an S-Corp was better in Florida (there are no personal income taxes in Florida). The only way to know what to do requires that you consult an accountant, a good one, for guidance.",
"title": ""
},
{
"docid": "e0654e7730a0c6596f36a97d8f2e0cc7",
"text": "You actually have a few options. First, you can do a share split and then sell an equal number of shares from both you and your wife to maintain parity. Second, you can have the company issue additional shares/convert shares and then have the company sell the appropriate percentage to the third party while the rest is distributed to you and your wife. Third, you can have the company issue a separate class of stock. For example there are companies that have voting stock and non-voting stock. Depending on your goal, you could just issue non-voting stock and sell that. Best bet is to contact a lawyer who specializes in this type of work and have them recommend a course of action. One caveat that has not been mentioned is that what/how you do this will also depend on the type of corporation that you have created.",
"title": ""
},
{
"docid": "19e274619afa82cd02d9aab9f56d1ebc",
"text": "\"You are confining the way you and the other co-founders are paid for guaranteeing the loan to capital shares. Trying to determine payments by equity distribution is hard. It is a practice that many small companies particularly the ones in their initial stage fall into. I always advise against trying to make payments with equity, weather it is for unpaid salary or for guaranteeing a loan such as your case. Instead of thinking about a super sophisticated algorithm to distribute the new shares between the cofounders and the new investors, given a set of constraints, which will most probably fail to make the satisfactory split, you should simply view the co-founders as debt lenders for the company and the shareholders as a capital contributor. If the co-founders are treated as debt lenders, it will be much easier to determine the risk compensation for guaranteeing the loan because it is now assessed in monetary units and this compensation is equal to the risk premium you see fit \"\"taking into consideration the probability of default \"\". On the other hand, capital contributors will gain capital shares as a percentage of the total value of the company after adding SBA loan.\"",
"title": ""
},
{
"docid": "ecb00e05bf09c78b463c0b7c134741d3",
"text": "\"It should be pretty obvious that without knowing what sort of assets the company owns, and what sort of net earnings are being generated it's impossible to say what a $20k equity investment should get you in terms of ownership percentage. With that said, you want to look at a few to several years of books, look for trends. Some things to understand that might be subtle red flags: It's extremely common for early stage investors to essentially make loans rather than strictly buying shares. In the worst case scenario creditors get to participate in liquidation proceedings before shareholders do. You may be better off investing in this business via a loan that's convertible to equity at your discretion. Single owner service companies are difficult because all of the net earnings go to the proprietor and that person maintains all of the relationships. So taking something like 5 years of net earnings as the value of the company doesn't make much sense because you (or someone else) couldn't just step in and replace the owner. Granted, you aren't contemplating taking over the business, but it negates using an X years of net earnings valuation method. When you read about valuation there is a sort of overriding assumption that no single person could topple the operation which couldn't be farther from the truth in single employee service companies. Additionally, understand that your investment in a single owner company hinges completely on one person's ability and willingness to work. It's really vital to understand the purpose of the funds. Someone will be hired? $20,000 couldn't be even six months of wages... Put things in to perspective with a pad, pen and calculator. Don't invest in the pipe dream of a friend of yours, and DEFINITELY don't hand this person the downpayment for their new house. The first rule of investing is \"\"don't lose money,\"\" this isn't emotional, this is a dollars and cents pragmatic process. Why does the business need this money? How will you be paid back? Personally, I think it would be more gratifying to put $20k in a blender and watch it blend, this is probably a horrible investment. The risk should just be left to credit card companies.\"",
"title": ""
},
{
"docid": "e8c4f4842defdda4013445eca3c6b7e5",
"text": "Wrong on so many counts. I have worked with many start-ups, and the well-run ones have all payed their employees good salaries. They also have mostly older employees (30+) with families and kids, and work reasonable hours. If you are worried about some VC guy, then don’t let them scam you. It is their job to squeeze the most equity for the least amount. As long as whoever in charge knows what they are doing, this will never happen. Remember, first and foremost, it is a business, and if you see it not making money, or not having the possibility of making money, then don’t work there. Know what you are getting paid, and know your equity. It can work out great. I know a lot of people who have ridiculous amounts of cash working at start-ups, and they all stick together and use their experience to have repeat successes.",
"title": ""
},
{
"docid": "58fee466a1611be7e3a36f466ff3a5b7",
"text": "\"Equity could mean stock options. If that's the case if the company makes it big, you'll have the option to buy stocks cheap (which can then be sold at a huge profit) How are you going to buy those without income? 5% equity is laughable. I'd be looking for 30-40% if not better without salary. Or even better, a salary. To elaborate, 5% is fine, and even normal for an early employee taking a mild pay cut in exchange for a chance at return. That chance of any return on the equity is only about 1/20 (94% of startups fail) There is no reason for an employee to work for no pay. An argument could be made for a cofounder, with direct control and influence in the company to work for equity only, but it would be a /lot/ more (that 30-40%), or an advisory role (5% is reasonable) I also just noticed you mentioned \"\"investing\"\" in the startup with cash. As an angel investor, I'd still expect far more than 5%, and preferred shares at that. More like 16-20%. Read this for more info on how equity is usually split.\"",
"title": ""
},
{
"docid": "bf38dce82645ae04c92ffe7f51c40d0a",
"text": "An S-corp doesn't pay income tax -- taxation is pass-through. This being the case, there are no tax deductions it could take for charitable giving. The solution would be for you to make the contribution out of your own pocket and then personally claim the deduction on your own taxes.",
"title": ""
},
{
"docid": "19f18ebdd0d55ba406566aa94f714891",
"text": "You can either borrow money... credit card, line of credit, re-finance your home, home equity line of credit, loan, mortgage, etc. Or you have other invest in your company as equity. They will contribute $X to get Y% of your company and get Z% of the profits. Note amount of profits does not necessarily have to equate to percentage owned. This makes sense if they are a passive investor, where they just come up with the money and you do all the work. Also voting rights in a company does not have to equate to percentage owned either. You can also have a combination of equity and debt. If you have investors, you would need to figure out whether the investor will personally guarantee the debt of your company - recourse vs non-recourse. If they have more risk, they will want more of a return. One last way to do it is crowdfunding, similar to what people do on Kickstarter. Supporters/customers come up with the money, then you deliver the product. Consulting practices do something similar with the concept of retainers. Best of luck.",
"title": ""
},
{
"docid": "e30c1a9481ded4a26c6feb5502718faa",
"text": "My understanding is you can create a company 0 value. Then you need to either loan the company the money to buy the building (it will still have 0 value as it will have a debt equal to it's assets) or sell share to investors at any price you like to raise the money to buy the building. Once shares have value (as valued by a chartered accountant - not anyone can do this) then anyone recieving shares will have to pay income tax. This is why keeping the shares as no value for as long as possible can be preferable. Also a benefit of using share options. talk to your investors, see what they require.",
"title": ""
}
] |
fiqa
|
dbe8ee1fa80f08a3838f1ed19901435f
|
Risks associated with investing in dividend paying stocks for short term income. Alternatives?
|
[
{
"docid": "0ef34139733e51f293d8045477a1b831",
"text": "Your back of the envelope calculation shows an income of about 5.5% per year, which is much better than a bank. The risk of course is that in a few years when you want to sell the stock, the price may not be at the level you want. The question is what are you giving up with this plan. You have 80K in cash, will cutting it to 30K in cash make it harder for your business to survive? If your income from the business starts slowly, having that 50K in cash may be better. Selling the stock when the business is desperate for money may lock in losses.",
"title": ""
},
{
"docid": "ff50e7e67484be10ab8fad0cdd25241d",
"text": "I wouldn't focus too much on dividends itself; at the end of the day what matters is total gain, because you can convert capital gain into income by selling your assets (they have different tax implications, but generally capital gains tend to be more tax efficient). I think the more important question is how much volatility you can tolerate. Since your investment horizon is short & your risk tolerance is low (as in if you suddenly get much lower income than you planned from your investment you'll be in trouble), you probably want assets that have low volatility. To achieve that, I'd consider the following if I were you: tl;dr If I were you I'd just hold a general investment portfolio with a lower risk profile rather than focusing on dividend generating assets.",
"title": ""
},
{
"docid": "ff6a6b8b9211bde03bed2c76076b87f7",
"text": "Usually when a company is performing well both its share price and its dividends will increase over the medium to long term. Similarly, if the company is performing badly both the share price and dividends will fall over time. If you want to invest in higher dividend stocks over the medium term, you should look for companies that are performing well fundamentally and technically. Choose companies that are increasing earnings and dividends year after year and with earnings per share greater than dividends per share. Choose companies with share prices increasing over time (uptrending). Then once you have purchased your portfolio of high dividend stocks place a trailing stop loss on them. For a timeframe of 1 to 3 years I would choose a trailing stop loss of 20%. This means that if the share price continues going up you keep benefiting from the dividends and increasing share price, but if the share price drops by 20% below the recent high, then you get automatically taken out of that stock, leaving your emotions out of it. This will ensure your capital is protected over your investment timeframe and that you will profit from both capital growth and rising dividends from your portfolio.",
"title": ""
}
] |
[
{
"docid": "38209351c883c0ccdec99ec8f3586956",
"text": "\"I agree that you should CONSIDER a shares based dividend income SIPP, however unless you've done self executed trading before, enough to understand and be comfortable with it and know what you're getting into, I would strongly suggest that as you are now near retirement, you have to appreciate that as well as the usual risks associated with markets and their constituent stocks and shares going down as well as up, there is an additional risk that you will achieve sub optimal performance because you are new to the game. I took up self executed trading in 2008 (oh yes, what a great time to learn) and whilst I might have chosen a better time to get into it, and despite being quite successful over all, I have to say it's the hardest thing I've ever done! The biggest reason it'll be hard is emotionally, because this pension pot is all the money you've got to live off until you die right? So, even though you may choose safe quality stocks, when the world economy goes wrong it goes wrong, and your pension pot will still plummet, somewhat at least. Unless you \"\"beat the market\"\", something you should not expect to do if you haven't done it before, taking the rather abysmal FTSE100 as a benchmark (all quality stocks, right? LOL) from last Aprils highs to this months lows, and projecting that performance forwards to the end of March, assuming you get reasonable dividends and draw out £1000 per month, your pot could be worth £164K after one year. Where as with normal / stable / long term market performance (i.e. no horrible devaluation of the market) it could be worth £198K! Going forwards from those 2 hypothetical positions, assuming total market stability for the rest of your life and the same reasonable dividend payouts, this one year of devaluation at the start of your pensions life is enough to reduce the time your pension pot can afford to pay out £1000 per month from 36 years to 24 years. Even if every year after that devaluation is an extra 1% higher return it could still only improve to 30 years. Normally of course, any stocks and shares investment is a long term investment and long term the income should be good, but pensions usually diversify into less and less risky investments as they get close to maturity, holding a certain amount of cash and bonds as well, so in my view a SIPP with stocks and shares should be AT MOST just a part of your strategy, and if you can't watch your pension pot payout term shrink from 26 years to 24 years hold your nerve, then maybe a SIPP with stocks and shares should be a smaller part! When you're dependent on your SIPP for income a market crash could cause you to make bad decisions and lose even more income. All that said now, even with all the new taxes and loss of tax deductible costs, etc, I think your property idea might not be a bad one. It's just diversification at the end of the day, and that's rarely a bad thing. I really DON'T think you should consider it to be a magic bullet though, it's not impossible to get a 10% yield from a property, but usually you won't. I assume you've never done buy to let before, so I would encourage you to set up a spread sheet and model it carefully. If you are realistic then you should find that you have to find really REALLY exceptional properties to get that sort of return, and you won't find them all the time. When you do your spread sheet, make sure you take into account all the one off buying costs, build a ledger effectively, so that you can plot all your costs, income and on going balance, and then see what payouts your model can afford over a reasonable number of years (say 10). Take the sum of those payouts and compare them against the sum you put in to find the whole thing. You must include budget for periodic minor and less frequent larger renovations (your tenants WON'T respect your property like you would, I promise you), land lord insurance (don't omit it unless you maintain capability to access a decent reserve (at least 10-20K say, I mean it, it's happened to me, it cost me 10K once to fix up a place after the damage and negligence of a tenant, and it definitely could have been worse) but I don't really recommend you insuring yourself like this, and taking on the inherent risk), budget for plumber and electrician call out, or for appropriate schemes which include boiler maintenance, etc (basically more insurance). Also consider estate agent fees, which will be either finders fees and/or 10% management fees if you don't manage them yourself. If you manage it yourself, fine, but consider the possibility that at some point someone might have to do that for you... either temporarily or permanently. Budget for a couple of months of vacancy every couple of years is probably prudent. Don't forget you have to pay utilities and council tax when its vacant. For leaseholds don't forget ground rent. You can get a better return on investment by taking out a mortgage (because you make money out of the underlying ROI and the mortgage APR) (this is usually the only way you can approach 10% yield) but don't forget to include the cost of mortgage fees, valuation fees, legal fees, etc, every 2 years (or however long)... and repeat your model to make sure it is viable when interest rates go up a few percent.\"",
"title": ""
},
{
"docid": "91c50e774803034969f7d5fb7a32d253",
"text": "\"It is true, as farnsy noted, that you generally do not know when stock that you're holding has been loaned by your broker to someone for a short sale, that you generally consent to that when you sign up somewhere in the small print, and that the person who borrows has to make repay and dividends. The broker is on the hook to make sure that your stock is available for you to sell when you want, so there's limited risk there. There are some risks to having your stock loaned though. The main one is that you don't actually get the dividend. Formally, you get a \"\"Substitute Payment in Lieu of Dividends.\"\" The payment in lieu will be taxed differently. Whereas qualified dividends get reported on Form 1099-DIV and get special tax treatment, substitute payments get reported on Form 1099-MISC. (Box 8 is just for this purpose.) Substitute payments get taxed as regular income, not at the preferred rate for dividends. The broker may or may not give you additional money beyond the dividend to compensate you for the extra tax. Whether or not this tax difference matters, depends on how much you're getting in dividends, your tax bracket, and to some extent your general perspective. If you want to vote your shares and exercise your ownership rights, then there are also some risks. The company only issues ballots for the number of shares issued by them. On the broker's books, however, the short sale may result in more long positions than there are total shares of stock. Financially the \"\"extra\"\" longs are offset by shorts, but for voting this does not balance. (I'm unclear how this is resolved - I've read that the the brokers essentially depend on shareholder apathy, but I'd guess there's more to it than that.) If you want to prevent your broker from loaning out your shares, you have some options:\"",
"title": ""
},
{
"docid": "25a57008feacf3d30214aaf84392307f",
"text": "It is worth noting first that interest and short-term dividends/capital gains are all taxed at the same rate. So all the investments below I mention (even savings accounts) will be taxed at the same rate. Also, even short-term capital losses can often be harvested to reduce your tax rate in many countries. While it is worth paying attention to the taxes when investing in the short term the more important factor is how much risk that you can take or want to take with the money. Most equity portfolios like the S&P index give a much higher risk that there will be much less in the account when you need to buy. You generally have a higher expected return with equity but as you mention that return is very random over such a short period. Over such a short variable period many people will invest in short term bond-index funds or just keep the fund in a high-yielding savings account. With the savings account your money is guaranteed. Short term bond funds will have generally higher yields but a small chance you may lose money in the short term. Some people can trade short-term bond indices for free with their broker but if you can't be sure to include the trading costs when thinking about which investment to use as with how low yields are currently the fees may eat up any advantage you gain.",
"title": ""
},
{
"docid": "38bdbd4c2225ed3344f2d36eb24aa6d8",
"text": "You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though.",
"title": ""
},
{
"docid": "d1ea51f3ed86b6d3207389c9309adb06",
"text": "Your cons say it all. I would not be buying stocks based soley on a high dividend yield. In fact companies with very high dividend yields tend to do poorer than companies investing at least part of their earnings back into the company. Make sure at least that the company's earnings is more than the dividend yield being offered.",
"title": ""
},
{
"docid": "cabb237fffd7db5cb951c9fa74e91e1c",
"text": "The easiest way to deal with risks for individual stocks is to diversify. I do most of my investing in broad market index funds, particularly the S&P 500. I don't generally hold individual stocks long, but I do buy options when I think there are price moves that aren't supported by the fundamentals of a stock. All of this riskier short-term investing is done in my Roth IRA, because I want to maximize the profits in the account that won't ever be taxed. I wouldn't want a particularly fruitful investing year to bite me with short term capital gains on my income tax. I usually beat the market in that account, but not by much. It would be pretty easy to wipe out those gains on a particularly bad year if I was investing in the actual stocks and not just using options. Many people who deal in individual stocks hedge with put options, but this is only cost effective at strike prices that represent losses of 20% or more and it eats away the gains. Other people or try to add to their gains by selling covered call options figuring that they're happy to sell with a large upward move, but if that upward move doesn't happen you still get the gains from the options you've sold.",
"title": ""
},
{
"docid": "21e155150e3ba5ad7e9cb5751b147ff3",
"text": "As a general rule of thumb, age and resiliency of your profession (in terms of high and stable wages) in most cases imply that you have the ABILITY to accept higher than average level of risk by investing in stocks (rather than bonds) in search for capital appreciation (rather than income), simply because you have more time to offset any losses, should you have any, and make capital gains. Dividend yield is mostly sough after by people at or near retirement who need to have some cash inflows but cannot accept high risk of equity investments (hence low risk dividend stocks and greater allocation to bonds). Since you accept passive investment approach, you could consider investing in Target Date Funds (TDFs), which re-allocate assets (roughly, from higher- to lower-risk) gradually as the fund approaches it target, which for you could be your retirement age, or even beyond. Also, why are you so hesitant to consider taking professional advice from a financial adviser?",
"title": ""
},
{
"docid": "05df34a65fa32fa9dd56f84f73990c16",
"text": "\"If you're asking this question, you probably aren't ready to be buying individual stock shares, and may not be ready to be investing in the market at all. Short-term in the stock market is GAMBLING, pure and simple, and gambling against professionals at that. You can reduce your risk if you spend the amount of time and effort the pros do on it, but if you aren't ready to accept losses you shouldn't be playing and if you aren't willing to bet it all on a single throw of the dice you should diversify and accept lower potential gain in exchange for lower risk. (Standard advice: Index funds.) The way an investor, as opposed to a gambler, deals with a stock price dropping -- or surging upward, or not doing anything! -- is to say \"\"That's interesting. Given where it is NOW, do I expect it to go up or down from here, and do I think I have someplace to put the money that will do better?\"\" If you believe the stock will gain value from here, holding it may make more sense than taking your losses. Specific example: the mortgage-crisis market crash of a few years ago. People who sold because stock prices were dropping and they were scared -- or whose finances forced them to sell during the down period -- were hurt badly. Those of us who were invested for the long term and could afford to leave the money in the market -- or who were brave/contrarian enough to see it as an opportunity to buy at a better price -- came out relatively unscathed; all I have \"\"lost\"\" was two years of growth. So: You made your bet. Now you have to decide: Do you really want to \"\"buy high, sell low\"\" and take the loss as a learning experience, or do you want to wait and see whether you can sell not-so-low. If you don't know enough about the company to make a fairly rational decision on that front, you probably shouldn't have bought its stock.\"",
"title": ""
},
{
"docid": "ee000eda9fda8d9a922a0c33865f3118",
"text": "There can be the question of what objective do you have for buying the stock. If you want an income stream, then high yield stocks may be a way to get dividends without having additional transactions to sell shares while others may want capital appreciation and are willing to go without dividends to get this. You do realize that both Pfizer and GlaxoSmithKline are companies that the total stock value is over $100 billion yes? Thus, neither is what I'd see as a growth stock as these are giant companies that would require rather large sales to drive earnings growth though it may be interesting to see what kind of growth is expected for these companies. In looking at current dividends, one is paying 3% and the other 5% so I'm not sure either would be what I'd see as high yield. REITs would be more likely to have high dividends given their structure if you want something to research a bit more.",
"title": ""
},
{
"docid": "58b4d3e97ef5bd7787febc8e5c69e50a",
"text": "Let us consider the risks in the investment opportunities: Now, what are the returns in each of the investment: What are the alternatives to these investments, then?",
"title": ""
},
{
"docid": "a3e7dd56fbd72e7484314c90545e4f50",
"text": "\"In financial markets, the gains you can expect to make (whether in the form of dividends or capital gains) correspond to the risks you are bearing. There are a variety of REITs but you can expect to make only as much money in them as you bear risk (meaning you can also lose a lot of money in the ones that earn a lot). In that sense they are just like other financial assets like stocks. If you are generically trying to increase your wealth by bearing risk, you can get a better risk/reward ratio in a fully diversified portfolio including stocks and bonds as well and REITs. \"\"Passive income\"\" means making money by bearing risk. REITs alone, without diversifying into other financial assets, do a poor job of generating income for the amount of risk you bear. So why are REITs not very comparable to buying a house and renting it out? Because in the latter case you are being paid not only for bearing the risk of the house depreciating but also you are being compensated for the work you do as a landlord. Moreover, because the house doesn't trade in a liquid market like REITs do, it is possible to actually get a good deal, as opposed to the fair deal you will get on a REIT. TL;DR: The \"\"passive income\"\" generated by REIT investment is more similar to generic equity/bond investment than it is to an investment in a physical home that you rent out. If what you want is to make money without doing anything besides bear risk, you should invest in a fully diversified portfolio of financial assets (equity and bonds being the primary constituents but REITs potentially being a part as well).\"",
"title": ""
},
{
"docid": "1d15f05e42de66d2aafc77d0b26a0234",
"text": "\"To short: Of course, you may always buy some index correlated ETF that eliminates the above. They use stock futures on the index, and you simply buy the \"\"shorting ETF\"\" in your non-margin account. However, they are surprisingly high cost, and despite the intended correlation, have significant drag. It's a much safer way to short the market (you have great choice in which market ETF) and eliminates the single stock risk.\"",
"title": ""
},
{
"docid": "3f43bf7e07ab2c5813cfe16dd48110f7",
"text": "There are many stategies with options that you have listed. The one I use frequently is buy in the money calls and sell at the money staddles. Do this ONLY on stocks you do not mind owning because that is the worse thing that can happen and if you like the company you stand less of a chance of being scared out of the trade. It works well with high quality resonable dividend paying stocks. Cat, GE, Mrk, PM etc. Good luck",
"title": ""
},
{
"docid": "613fb19903e86d17b4d0dae3b5a7afe7",
"text": "One reason to prefer a dividend-paying stock is when you don't plan to reinvest the dividends. For example, if you're retired and living off the income from your investments, a dividend-paying stock can give you a relatively stable income.",
"title": ""
},
{
"docid": "f55e8b5dd4f124ff76f3380c6fd54f32",
"text": "In a (not Roth) IRA, withdrawals are generally already taxed as regular income. So there should be no tax disadvantage to earning payment in lieu of dividends. It's possible that there is an exception for IRAs but I was unable to find one and I cannot see the reason for one since the dividend tax rate is usually lower than the income tax rate (which is why some company owners elect to receive part of the company profits via dividend rather than all through their salary).",
"title": ""
}
] |
fiqa
|
562d8db9033b5a6e8a82d2d3e34267ef
|
Can I negotiate a credit card settlement by stopping payments?
|
[
{
"docid": "23be33c3b2889ecfdf0db730fc231fc8",
"text": "\"This would be on your credit for ~8 years. If it goes according to your plan, it will take 6 months to a year to do the settlement by getting behind enough to let it go to collections and then settling. The write-off will then be on your credit record for 7 years before it \"\"falls off\"\". Your cash out refinance would have to cover you for at least the next 8 years to be valuable. And you have a lot of assumptions to get there: In short, there's one way (or only a few ways) this works out well in your favor. There are many ways that this has the chance to hurt you. I don't like \"\"investments\"\" with those kind of odds.\"",
"title": ""
},
{
"docid": "025574c49a74c296c7411f4c712bb9b6",
"text": "\"At no point is it ever a good idea to \"\"stop making payments to show them [you] mean business\"\". When you signed up for the credit card account, you agreed to pay what you charged, and any applicable interested accrued on the accounts. You are legally responsible for that debt, and you can be sued, if they are so inclined. Many times, settlement agencies are employed because a risk assessment operator (or whatever they're called at your cc company) calculated that they are currently financially better off settling for a reduced balance than attempting to chase you for the full amount. As soon as the terms of your refinance hits your credit history, that changes. To reiterate and make it clear: This is a very dangerous approach to breaking credit card debt, and I would not advise that anybody proceed with it. EDIT: If you offer 50% of the balance in a lump sum payment, they decline, and you continue with non-payment, they have reason to believe that you are financially capable of making payments, and are much more likely to seek legal action.\"",
"title": ""
},
{
"docid": "60f197fcd24ac4a0004f929ef51fa4a2",
"text": "This strategy will have long lasting effects since negative items can persist for many years, making financing a home difficult, the primary source of household credit. It is also very risky. You can play hard, but then the creditor may choose you to be the one that they make an example out of by suing you for a judgement that allows them to empty your accounts and garnish your wages. If you have no record of late payments, or they are old and/or few, your credit score will quickly shoot up if you pay down to 10% of the balance, keep the cards, and maintain that balance rate. This strategy will have them begging you to take on more credit with offers of lower interest rates. The less credit you take on, the more they'll throw at you, and when it comes time to purchase a home, more home can be bought because your interest rates will be lower.",
"title": ""
}
] |
[
{
"docid": "41738846c29b227d7c9af116f730c97e",
"text": "Ok so Arbitrage? I was looking specifically at the people who took this deal to the extreme taking the $5k and using the $10 giftcards to buy prepaid credit cards. Would the better term would be positive-feedback loop, since the only constraint would be time and energy to the people exploit this deal. Is there a financial term that fits this better?",
"title": ""
},
{
"docid": "a171253b625c7d87549f463f0d5316ce",
"text": "A few years ago, I had the rare opportunity to take advantage of a credit card offer. Specifically, a 10% cash back deal on purchases at drug stores or supermarkets. The offer was limited to 90 days, so during that time, I bought 100 cash gift cards at my local CVS. Over the next year to use them all, when they dropped to a balance under $5 or so, I signed in to my cable TV account and charged the remaining balance there. No bothering a supermarket clerk, or store owner.",
"title": ""
},
{
"docid": "bf83cd0a41ae7488023b5b518debfe03",
"text": "\"Your companies are declining to lower your rates because you are describing it as being kind. When I was in a similar situation, I called each one, starting with the highest rate, and said this: For the last little while things have been tight and my balances have crept up on all my cards. Now I'm about to start a fairly dramatic paydown. I'm going to be doing highest-rate fastest, which is you. Are you able to lower my rate so that you can continue to collect it? Some said no. Some said \"\"ask again when you've paid more than the minimum three months in a row.\"\" Most said yes, and sometimes by a dramatic amount. It made a real difference to getting things under control. I agree with the other answers that $50 extra on each card is just not as fulfilling as putting all the extra to a single card. If you must still use a card (to put gas in your car, buy groceries etc) getting one card to zero will return you to not paying interest even when you use it, so you might want to start with your lowest balance and then go to highest-rate once you have one clear one you can use. (If your balances are all so high that it will take a year or more to get one to zero, then maybe not. But if one is low drive it down first.) As for the consolidation loan, for some people it's the key to saving interest and getting the debt behind them. For others it's a chance to catch their breath and run up even more debt. Most people cannot predict in advance which they will be or which others will be. Be aware that it is a risk. You can vow that you will never again cover payroll with a cash advance from the company credit card (or your personal one) but when push comes to shove, you just might anyway.\"",
"title": ""
},
{
"docid": "c317be61f5f73f1464afd844bac1b6cb",
"text": "This is possible. In fact in the cases of debt settlement the collection companies typically issue a 1099 for the difference on what is owed and what is settled, making that taxable income. So the IRS sees it as income (in the US). However, this kind of dishonesty is not conducive to building long term wealth or wealth of significant means. As others have said this is fraud, but provided that one is truthful on the loan application, it would be impossible to prove. How can one prove that a person has no intention of paying a loan back? Doing this once or twice may ruin your ability to receive a loan for legitimate purposes for life.",
"title": ""
},
{
"docid": "65e4389f5e6ff887ee174604124f633d",
"text": "According to this Q&A by a Houston law professor: The law, however, is not designed to interfere with an individual's right to stop payment on a valid check because of a dispute with someone. If he didn't deliver as promised, you do not owe the money and have the right to stop payment. Assuming that you had enough money in the bank to cover the check, stopping payment is not a crime. I found several other pages essentially saying the same thing. All the usual disclaimers apply, I am not a lawyer, this is not legal advice, etc. In particular, laws might vary by state. Basically, though, it doesn't seem there's any reason why you can't stop payment on the check just because you feel like it. If you then provide a cashier's check for the payment, your ex-partner will not really have anything to complain about. If you're worried about annoying him by doing this, that's a separate issue, but given the situation you describe, I don't see why you should be. If you feel he is being a pain in the neck, feel free to be a pain in the neck right back and force him to accept the payment in the manner you decide, instead of allowing him to string you along. Note two things: obviously if you have reason to believe the guy will sue you, you should act with caution. Also, I'm not suggesting withdrawing payment completely, only stopping the check and issuing a new payment that you don't have to wait on (e.g., cashier's check).",
"title": ""
},
{
"docid": "438bad75d87d85c9b5fcb2144e7da298",
"text": "Ideally you would negotiate a car price without ever mentioning: And other factors that affect the price. You and the dealer would then negotiate a true price for the car, followed by the application of rebates, followed by negotiating for the loan if there is to be one. In practice this rarely happens. The sales rep asks point blank what rebates you qualify for (by asking get-to-know-you questions like where you work or if you served in the armed forces - you may not realize that these are do-you-qualify-for-a-rebate questions) before you've even chosen a model. They take that into account right from the beginning, along with whether they'll make a profit lending you money, or have to spend something to subsidize your zero percent loan. However unlike your veteran's status, your loan intentions are changeable. So when you get to the end you can ask if the price could be improved by paying cash. Or you could try putting the negotiated price on a credit card, and when they don't like that, ask for a further discount to stop you from using the credit card and paying cash.",
"title": ""
},
{
"docid": "7477a59bf676d005a08d35b199b330ef",
"text": "They don't do anything you can't do yourself and they charge you money for it. And of course the only way they manage to negotiate the debt down is by not paying it for a while in the first place, have it referred to collections and then negotiating with the collectors. At that time, your credit rating (if you care about that at all) will have suffered a lot more damaged than it is from a few late payments. I would address the issue as to why you end up paying late first - it sounds to me like you're cutting the time left to pay to the bone and this turned around and bit you in the you-know-where. In case you are able to pay but not organised enough to do it on time, find a way to remind yourself to pay the bill a few days early for peace of mind. That won't do anything about the 28% interest but those might serve as an additional motivation to pay the debt off faster. Once you're back to showing regular on-time payments on your credit record, you might want to investigate transferring the balance to a cheaper card or negotiate the interest down (or both). If you genuinely can't pay after you've taken care of the essentials (food, shelter, transportation) then you don't need a third party to stop paying the credit card bill, you can do that yourself.",
"title": ""
},
{
"docid": "6f5d5938b69abf99b4c65d4e08c8b232",
"text": "\"My sister had a similar problem and went to an actual lawyer, not a \"\"credit repair agency\"\". The lawyers settled her debt for a lot less than she owed, and she also got a bonus: one of the creditors called her repeatedly, even after her lawyers had told them not to. The lawyers ended up getting her an extra $40,000. Combined with the debt settlement, she actually came out ahead. Of course, her credit score went down, but it recovered in a couple of years.\"",
"title": ""
},
{
"docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95",
"text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"",
"title": ""
},
{
"docid": "49b743482fb6c3ce7ded4219b2149524",
"text": "Three things prevent you from doing this: Credit cards generally don't accept other credit cards as payment. You could do this with a cash advance or balance transfer, but Cash advances and balance transfers usually have fees associated with them, negating any reward you might earn. Your card might have a no-fee balance transfer promotion going, but Cash advances and balance transfers generally aren't eligible for rewards.",
"title": ""
},
{
"docid": "6264d91249767240ea3928379994b2a4",
"text": "quid has expressed some of the disadvantages with this approach, but there is another. Vendors will not want to give you any goods you buy with your credit card until they are sure they will get the money. With your suggested approach buying something with a credit card now looks like: No vendor is going to stand for this for even moderate sized transactions, so in reality they will just decline your card if you have this facility enabled.",
"title": ""
},
{
"docid": "e15014b08ba4abe3f2756ff8658de847",
"text": "If you want to ensure that you stop paying interest, the best thing to do is to not use the card for a full billing cycle. Calculating credit card interest with precision ahead of time is difficult, as how you use the card both in terms of how much and when is critical.",
"title": ""
},
{
"docid": "eb21a97ee6426ddc9847c796e9371b2b",
"text": "\"Without knowing what the balances are, I associate \"\"uncomfortable\"\" with high, as in tens of thousands. What I would do: is 1) cut up the cards and stop using them, and 2) have some balance transfer offers in hand the next time you call to negotiate with the companies. Essentially, you will have to convince them that they will have to explain one of two things to their boss: why they lowered your rate or why you left. They can collect less interest from you or no interest from you. It's up to them. If they don't offer you something that's in the ballpark of your balance transfer offer, then bid them goodbye and complete the balance transfer. As far as paying them off, the top two modes of repayment are lowest balance first (aka snowball) or high interest rate first. Both methods are similar in that you pay minimums on all but the method's focus point. Whether it is lowest balance or highest interest rate, you pay ALL of your extra money on the lowest balance or the highest interest debt until it is gone and then you move onto the next one in the list. For what it's worth, I prefer the lowest balance method, you see progress faster.\"",
"title": ""
},
{
"docid": "104ae8a9ec8b6b78961094e0cd95e102",
"text": "If you had a CC issuer that allowed you to do bill-pay this way, I suspect the payment would be considered a cash advance that will trigger a fee and a pretty egregious cash advance specific interest rate. It's not normal for a credit payment portal to accept a credit card as payment. If you were able to do this as a balance transfer, again there would be fees to transfer the balance and you would not earn any rewards from the transferred balance. I think it's important to note that cash back benefits are effectively paid by merchant fees. You make a $100 charge, the merchant pays about $2.50 in transaction fee, you're credited with about $1 of cash back (or points or whatever). Absent a merchant transaction and the associated fee there's no pot of money from which to apply cash back rewards.",
"title": ""
},
{
"docid": "a89bd74e7a3d5b571288ebb11b2dacc4",
"text": "\"I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: \"\"disposable\"\", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!\"",
"title": ""
}
] |
fiqa
|
223554a0130f77d8fb3bc0fc596a1da5
|
Safe method of paying for a Gym Membership?
|
[
{
"docid": "e8984908037a8aab9f9934b96eed01f9",
"text": "\"Shady isn't quite the right word. They know that most of their customers are going to quit soon after they begin -- as in \"\"before the end of January\"\" -- so they lock you in while you're motivated. And of course they're going to make it difficult for you to quit. No choice but to read their contract, understand it completely, follow their rules, and meet their deadlines. There's lots of freedom for them and lots of restrictions for you. It's like this if you're not the one writing up the contract. However ... do you have a YMCA around? Our YMCA has an initiation fee, but beyond that it's month to month. Most flexible gym membership I've heard of. If you lapse for too long they'll make you pay another initiation fee to rejoin, but there's no penalty for canceling. Not all Y's are like that, but check around to see.\"",
"title": ""
},
{
"docid": "6f71e2344b72cf6232a9eecd06ce04e5",
"text": "\"I've worked in gyms for 9 years. Here's a few things I've seen: 1)Contracts aren't necessarily a terrible thing if you know that you are going to stay for a while, just know the terms you're signing up for. 2)Be aggressive and relentless with the membership salesman, don't be afraid to put your own price out there and if you don't get it walk away. Don't want the super high sign-up fee, say you wont join unless that is gone or lower. (often these sign-up fees are commissions for the salesman, one time i had a guy slip me a $100 under the table to drop the sign-up fee and monthly rate saving him at least $500 a year) 3)Pick newer gyms because they will be more in a need of new memberships thus giving in to lower prices. 4)If you don't want to sign a contract just say so, you'd be amazed how often someone gets out of signing a contract just because they asked and threatened not to join because of it. 5)Be aware of annual fees, a trend in the industry now is to have a super low membership dues but charge the member an annual \"\"gym improvement\"\" or \"\"rate guarantee fee\"\". 6)Join with a buddy, ask for a buddy discount if you sign-up at the same time. 7)Finally consider why you are joining a gym, I've seen it so often that someone joins a gym and then gets frustrated because they never use it because they weren't getting the results you wanted. Maybe your better off spending a little more and going to a private personal training studio or a group exercise studio. Independent bootcamps are a hot now. Ultimately it's about you getting what you want out of it, so do what is going to give you the best chance to get the results you want.\"",
"title": ""
},
{
"docid": "8dc02c817c798f53a098e1f8c3943822",
"text": "I've often encountered the practices you describe in the Netherlands too. This is how I deal with it. Avoid gyms with aggressive sales tactics My solution is to only sign up for a gym that does not seem to have one-on-one sales personnel and aggressive sales tactics, and even then to read the terms and conditions thoroughly. I prefer to pay them in monthly terms that I myself initiate, instead of allowing them to charge my account when they please. [1] Avoid gyms that lack respect for their members Maybe you've struggled with the choice for a gym, because one of those 'evil' gyms is very close to home and has really excellent facilities. You may be tempted to ask for a one-off contract without the shady wording, but I advise against this. Think about it this way: Even though regular T&C would not apply, the spirit with which they were drawn up lives on among gym personnel/management. They're simply not inclined to act in your best interest, so it's still possible to run into problems when ending your membership. In my opinion, it's better to completely avoid such places because they are not worthy of your trust. Of course this advice goes beyond gym memberships and is applicable to life in general. Hope this helps. [1] Credit Cards aren't very popular in the Netherlands, but we have a charging mechanism called 'automatic collection' which allows for arbitrary merchant-initiated charges.",
"title": ""
},
{
"docid": "902f852ca41553e7a3a25e503d3692f3",
"text": "New York state actually has laws protecting gym members from predatory gym membership pricing. Your state may also have laws like that as well.",
"title": ""
},
{
"docid": "41ce0cdd50585d84d49c66f244490db6",
"text": "Quite often the local university has decent gym facilities with super-competitive rates, even if you are not a student there, and you can usually join for a single term and pay by cash. They lack some of the fancier things and might be not as shiny, but I want my membership fees to pay for equipment, not interior design.",
"title": ""
},
{
"docid": "7e8d6afbb3d51e12044732847e7ad0b6",
"text": "\"I once was reviewing one of those contracts with plenty of bad clauses in it, sitting across from the salesman whose commission depending on me signing it. I started crossing out all the bad clauses, initialed them and said I would sign it if he'd initial the changes as well. Oh, and there was one clause that said something like \"\"THIS CONTRACT MAY NOT BE MODIFIED WITHOUT THE EXPRESS WRITTEN CONSENT OF THE EXECUTIVE VICE PRESIDENT...\"\" Of course, I crossed it out as well. I signed, he signed. Everyone was happy. Fortunately I never had to deal with any of the issues, but what's the worse they could do?\"",
"title": ""
},
{
"docid": "7652e2f584251f50695aa3f7c08d5635",
"text": "The safest way is to not sign contracts with terms that are onerous to you.",
"title": ""
}
] |
[
{
"docid": "d98599e2bb8795a543c46c226255323c",
"text": "If you're determined to save money, find ways to integrate exercise into your daily routine and don't join a gym at all. This makes it more likely you'll keep it up if it is a natural part of your day. You could set aside half the money you would spend on the gym towards some of the options below. I know it's not always practical, especially in the winter, but here are a few things you could do. One of the other answers makes a good point. Gym membership can be cost effective if you go regularly, but don't kid yourself that you'll suddenly go 5 times a week every week if you've not done much regular exercise. If you are determined to join a gym, here are a few other things to consider.",
"title": ""
},
{
"docid": "c8be4f69d437e28f0d7e164653cab264",
"text": "If this chargeback failed then would it negatively affect my credit score? A credit score is a measure of how dependable of a borrower you are. Requesting a refund for not receiving goods not delivered as promised, whether it is successful or it fails, should not impact your credit score since it has no implications on the likelihood that you will pay back debts. The last time I used that gym was the 13th January 2017, and I rejoined on the 20th December, so I have used it for less than a month. Therefore I do not think I should have to pay for two months Keep in mind that you purchased a membership to the gym. Whether or not you actually use the gym you are liable to pay for every month that you retain the membership. Although it probably won't hurt to try to get a refund for the period where you didn't take advantage of your gym membership, you weren't actually charged for a service that you never received (like in the last case where they charged you after you cancelled your membership).",
"title": ""
},
{
"docid": "12ee84e78b6f77c64553d4f2a7455e29",
"text": "so you and your friend are trying to make a federal case over the fact that he's going to have to pay $1-3 in a month's time? [they had this rather popular series of self-help books a while back.](http://www.amazon.com/Sweat-Small-Stuff---small-Series/dp/0786881852/ref=sr_1_1?ie=UTF8&qid=1339809567&sr=8-1&keywords=don%27t+sweat+the+small+stuff) perhaps the two of you should explore it.",
"title": ""
},
{
"docid": "c85b3b1d6b3408c34933fabb60592ed0",
"text": "Yes, it is safe, we have been doing it for years. We prefer our tenants to make their rent payments in this manner. In fact, we prefer that they set up an automatic payment for the rent, either through their online banking or through their bank directly. Apart from getting your rent on time, this method also has the added benefit of both parties having their own records of rent payments through their bank statements, in case there is a dispute about the rent sometime down the track. Having a separate bank account just for the rent does make sense as well, it makes it easier for you to check if rent has come in, it makes it easier if you need to compare your statement without having to highlight all the rent payments amongst all other payments (you might not want to show your other incomes and spending habits to others), and you can withdraw the rents to your other account (which might offer higher interest) after it has come in, leaving a small balance most of the time in your rent account.",
"title": ""
},
{
"docid": "b4585c86d5566947354fbb2697a2c873",
"text": "You're knowingly providing a payment method which has insufficient funds to meet the terms of the contract, because you are too lazy to comply with the contract. That's unethical and fraudulent behavior. Will you get in trouble? I don't know. I'd suggest getting acquainted with an electronic calendar that can remind you to do things.",
"title": ""
},
{
"docid": "917519aee04c7ac99b8a7679d7d9289e",
"text": "I've been using online billpay for years, at three different banks. Two were local (a bank and a credit union), and the other is ING Direct. I haven't had any problems with any of them that weren't self-inflicted (forgetting to enter the bill). The credit union's system is pretty clunky, but the other two are fine. One thing to make sure of is to leave enough time for the bill to arrive, just like you would do if mailing a check. Just have the bill sent a week before its due, and you should be fine. I usually do this soon after I get the bill, so I don't forget about it. ING will actually receive bills from some companies automatically, if you wish. So all you need to do is go online and click pay, and it will know when the due date is and the amount to pay. For bills that have the same amount each month (mortgage, insurance premiums, etc.), you can set it up to pay automatically each month so you don't have to do anything. Its a bit of a hassle moving banks, and reentering the account numbers, addresses, etc. Stopping a bill is as easy as clinking delete in the online system. My current setup is to have all my bills paid through ING, and my paycheck direct deposited. I can transfer money to/from my local bank in a couple of days if I have checks to deposit, or to use the local ATM. I short, I would never go back to writing paper checks.",
"title": ""
},
{
"docid": "072ab5a8527fb892849afb4c791d89f7",
"text": "\"If you do it, be sure to read what you sign. They'll sign you up on some type of \"\"credit insurance\"\" and not tell you about it. It costs like $10 a month. If you don't sign up for that, you should be fine. I bought my HDTV this way, though I wish I would have saved and paid up front. I'm moving more towards the \"\"cash only\"\" mindset.\"",
"title": ""
},
{
"docid": "500b7456fba0a4e19d2370a332e03b75",
"text": "First thing that popped into my head was tanning salons. You can be a member at differing levels of service (for different qualities of tanning beds) and you can also pay a one-time fee at an inflated price. Basically, for the price of three (services) you could have unlimited access (to beds of the same type) by paying up front for a month. All memberships in this arena come with pages of legal contract to sign, so having training in place for the documentation of this is important. Enrolling individuals during peak business hours can be labor intensive, so prices insentivize individuals to 1) return hassle-free for more services and 2) pay all at once for said services.",
"title": ""
},
{
"docid": "950898f483d9ce6377d07e9f54f1e44b",
"text": "\"Understand that buying a Starbucks gift card at the grocery store to receive 6% back on your coffee rather than 6% back on your groceries is an exploit of a flaw in the benefits program, not a feature. It's definitely not a blanket yes or no answer, the only way to find out is to try. Separately, I don't know why you would find this \"\"concerning.\"\" This will vary greatly between merchants and cards. There will always be new points churning exploits, they don't last forever and you can't expect every customer service rep to be well versed in methods employed to juice cardmember programs. Hell, a number of years ago one person figured out that he could buy rolls of $1 coins from the US treasury with free shipping and no additional fees. This guy was literally buying thousands of dollars of cash each month to deposit and pay his credit card bill; completely against the terms of the treasury program for distributing the $1 coins. A number of people had their cards and points/cash back revoked for that one.\"",
"title": ""
},
{
"docid": "67955db21dbfb96a180172cd2e0940c5",
"text": "\"I would suggest having your money auto-deposited into a savings account. Then use cash weekly to pay for everything you purchase. Forget the ATM card, because you can burn through your whole paycheck and then run out. Set a certain budget (say $200 per week, just making up a number), and that's all you get. Withdraw $200 from the bank / ATM, and then walk away. No buying online (because it isn't restricted), no buying on a card. All expenses (beyond utilities) comes out of that cash. When you want to spend more, you need to wait until your next cash \"\"paycheck\"\". If you want to spend more (on whatever you end up splurging on), you will need to cut back in other areas (cheaper food, etc). As others have mentioned, freeze that ATM card, and don't use it at all.\"",
"title": ""
},
{
"docid": "7c5323e59281a492ec9aed7109f2d6f5",
"text": "So far I am doing mint.com for a few minutes a couple of times a week, despite my security concerns, and that's working fairly well as practice until my job starts. I'm hoping to get my bank to allow up to date transaction download, and then I'm considering using YNAB once I start my job. I will update this as I go along.",
"title": ""
},
{
"docid": "73263b07ceab7ff831dd179b39735b74",
"text": "Atm machine and my Credit Union account. Low fees (often zero, if the machine is on any of the same networks) and decent exchange rate, and no need to carry cash or traveler's checks to be exchanged. Alternatively, pay by credit card, though there is a foreign transaction fee on that.",
"title": ""
},
{
"docid": "f25fafb34d78ed0c7ffedc3a21440848",
"text": "Ask your bank or credit union. Mine will let me issue recurring payments to anyone, electronically if they can, if not a check gets mailed and (I presume) I get billed for the postage.",
"title": ""
},
{
"docid": "2539bf77b34ceeb3c9a919dc1a7a2889",
"text": "\"Under the assumption you're not looking for a particular credit union/bank (since that'll make this question off topic), you can apply for a secure credit card. That's where you essentially put up a sum of money as collateral. That would be the safe way for someone with \"\"little or no credit history\"\" and wants to build credit. Any big bank (Wells Fargo, Chase, etc.) should be able to do that for you. You can also do that online provided you have the means to transfer money into the account.\"",
"title": ""
},
{
"docid": "768a733f6a582830c2f31f82e6345803",
"text": "Honestly, having seen their trial and cancelation process, it seems they're betting that the Planet Fitness model will work for cinema tickets. It's cheap enough that it seems like a great deal, but in practice most people won't even see a movie a month and won't bother to cancel. Every time I've been about to sign up for a subscription cinema ticket, I've challenged myself to actually go to the cinema at least twice a month for 3 months. I always drop off!",
"title": ""
}
] |
fiqa
|
ae90867939d6ad1055904acb2e091d36
|
How do cashier's checks work and why are they good for scams?
|
[
{
"docid": "487a944a5e3950f79268a23928131b38",
"text": "\"There are two different issues at play here, and they are completely separate from each other: A bank or cashier's check is \"\"safer\"\" than a regular personal or business check because it avoids problem #1. Problem #2 exists with all kinds of paper checks. I assume the reason the warnings are about cashier's check moreso than personal checks, is simply because people already know to wait for personal checks to clear before handing over merchandise to the buyer. People are less likely to do that when receiving cashier's checks, but perhaps they still should if there is any doubt about the validity of the check. One could argue that a cashier's check actually provides a false sense of security due to this (to the receiver). On the flip side, if you are the payer, then a cashier's check could be thought of as more secure than a personal check because you don't have to reveal your bank account information to a stranger.\"",
"title": ""
},
{
"docid": "d040cf2951facd059b0dfda761f6d2ef",
"text": "Ok, few things to understand first: Secondly, think about the way a scam usually flows. A person (scammer) with an actual bank account with money issues a valid cashiers check, trick someone else (victim) into receiving it (typically in exchange for a percent) and passing along a portion to another account (back to the scammer). The scammer then reports the first transaction as fraudulent and the bank takes back that transaction. Now the victim is stuck with the second transaction, and without the funds from the first. Meanwhile the scammer has both the original funds and the percentage from the second one. In a way they're attractive for scammers because they're so trusted.",
"title": ""
}
] |
[
{
"docid": "da786484da35c61111564223a3e58038",
"text": "Because large stores do not pay their cashiers enough that the companies can dock the employees' pay if they allow a bad credit card to go through. So most cashiers at large stores won't take the extra effort to check the card properly. As a result, large stores come up with other ways to handle potential credit card fraud. For example, they calculate a certain amount of fraud as expected and include it in their price calculations. Or they can use cameras to catch fraudsters. At small stores, there is a much higher chance that the cashier is either the owner or a relative of the owner. And even those who are unrelated tend to be hired by the owner directly. The owners do have their pay docked if a bad credit card is accepted, as their pay is the profit from the business. So they tend to create protocols that, at least in their mind, reduce the chance of taking a bad credit card. The cashier is often the only employee in the store to check anything. Another issue is that small stores have a harder time getting approved to accept credit cards. The companies that process the credit cards can take back their machine if there is a lot of fraud. So the companies can require more from small stores than they can from big stores. Those companies can't stop processing cards for Safeway, because they need Safeway as much if not more than Safeway needs them. So the processors have more leverage to make small stores do what they want. And small stores can feasibly fire (non-owner) cashiers who do not comply. Owners of course can't be fired. But they are far more vulnerable to business losses. So it is really important to an owner to keep the credit card machine. And it is pretty important to avoid losses, as it is their money directly. Relatives of owners may be safe from firing, but they are not safe from family retaliation like taking away television privileges. And they may also think of the effect of business losses on the family. Large stores can fire cashiers, but they are chronically understaffed and almost none of their cashiers will consistently follow a strict protocol. Since fraudsters only need to succeed once, an inconsistent application is almost as bad as no application. They might charge the cashiers for fraud, but then they would have to pay the cashiers more than minimum wage specifically for that reason (e.g. a $50 a month bonus for no fraud). For many of them, it's cheaper to risk the fraud. And large stores can't mix owners and relatives of owners into the mix. It's hard to say who owns Safeway. And even if you could, the relationship between one fraud transaction and the dividend paid on one share of stock is tiny. It would take thousands of shares to get up to a penny.",
"title": ""
},
{
"docid": "b5825b7937a3c46f4dad210d283bc7aa",
"text": "Also see who has the authority to delete bills or items on bills. This was a huge scam with some servers I've worked with. If you can delete an entire bill that was paid in cash then that's money in your pocket.",
"title": ""
},
{
"docid": "3d585003ac8bc7e31dd82558e215bafb",
"text": "There is no bank that I know of offering such a feature and I'm not sure what the point of it would be (other than to annoy their customers). If you've been subjected to a fraudulent check your best bet is to either choose to write checks only to trusted parties and/or use your banks BillPay service (they usually issue checks on another account while transferring the money from your account). The drawbacks of your current plan, bounced legitimate checks and high maintenance nature, outweigh the potential benefits of catching a fraudulent check since you're not legally obligated to pay checks you haven't written.",
"title": ""
},
{
"docid": "b3d005b0ec91fddd9622700f0599a84d",
"text": "US checking accounts are not really secure, though many people use them. One form of check fraud has been highlighted by Prof. Donald Knuth and carried out by Frank Abagnale, as portrayed in the film Catch Me If You Can. Basically, anyone can write a check that would draw from your account merely by knowing your account number and your bank's ABA routing number. With those two pieces of information (which are revealed on every check that you write), anyone can print a working check, either using a laser printer with MICR (magnetic ink character recognition) toner, or by placing an order with a check-printing company. The only other missing element is a signature, which is a pretty weak form of authentication. When presented with such a check, your bank would probably honor it before finding out, too late, that it is fraudulent. A variant of this vulnerability is ACH funds transfers. This is the mechanism through which you could have, say, your utility company automatically withdraw money from your account to pay your bill. Unfortunately, the transfer is initiated by the recipient, and the system relies largely on trust with some statistical monitoring for suspicious patterns. Basically, the whole US checking system is built with convenience rather than security in mind, since other institutions are able to initiate withdrawal transactions by knowing just the ABA number and account number. In practice, it works well enough for most people, but if you are paranoid about security, as you seem to be, you don't want to be using checks. The European system, which has largely eliminated checks in favor of payer-initiated push transactions, is safer by design.",
"title": ""
},
{
"docid": "7a1e6c5dee1dc728561808bbff5abb42",
"text": "\"The answer probably varies with local law, and you haven't said where you're located. In most or all US states, it appears that after some statutory length of time, the bank would transfer the money to the state government, where it would be held indefinitely as \"\"unclaimed property\"\" in the name of the recipient (technically, the payee, the person to whom the check is made payable). This process is called escheatment. Most states publish a list of all unclaimed property, so at some later date the payee could find their name on this list, and realize they were entitled to the funds. There would then be a process by which the payee could claim the funds from the state. Usually the state keeps any interest earned on the money. As far as I know, there typically wouldn't be any way for you, the person who originated the payment, to collect the money after escheatment. (Before escheatment, if you have the uncashed check in your possession, you can usually return it to the bank and have it refunded to you.) I had trouble finding an authoritative source explaining this, but a number of informal sources (found by Googling \"\"cashier check escheatment\"\") seem to agree that this is generally how it works. Here is the web site for a law firm, saying that in California an uncashed cashier's check escheats to the state after 3 years. Until escheatment occurs, the recipient can cash the check at any time. I don't think that cashier's checks become \"\"stale\"\" like personal checks do, and there isn't any situation in which the funds would automatically revert to you.\"",
"title": ""
},
{
"docid": "0f44bebd232498c8619b1df1a8beae71",
"text": "This is a variation of a very common scam. The principle of the scam is this: I give you a check for a huge amount of money which you pay in your account. Then I ask you to pay some money from your account into a third account. Two months later the bank detects that my check was forged / stolen / cancelled / whatever and takes the huge amount of money away from your account. But you paid the money from your account, and that money is gone from your account and irrevocably ended up in my account.",
"title": ""
},
{
"docid": "d9fb9a566fba1ecb9104bd4270b8e34a",
"text": "If you can get to a physical branch, get a cashier's check (or call them and have them send you one by mail). When they draft the cashier's check they remove the money from your account immediately and the check is drawn against the bank itself. You could hold onto that check for a little while even after your account closes and you make other arrangements for banking. If you cannot get a cashier's check, then you should try to expeditiously open a new account and do an ACH from old to new. This might take more days to set up than you have left though.",
"title": ""
},
{
"docid": "62b3abd6bf7c68cf869c27668c3dd32d",
"text": "Rational reason. They like this method of paying. There is a delay between writing the check and having the money removed from the account. Their checkbook makes a carbon copy of the check, so they can update their balance easier. They can leave the store and update their checkbook register, or the spreadsheet or their Quicken or budget application data. They don't have to try and remember the amount, store name or date.",
"title": ""
},
{
"docid": "166d9d8c192fb1848d9c77fa7c96305e",
"text": "\"There are benefits associated with a cash only business (the link states a few). However checks made out to \"\"cash\"\" don't reap those benefits listed. For anyone on SE to say your barber hides revenue from the IRS would just be speculation. With that said there are a great number of disadvantages for a cash only business. And from my experience, a business that goes out of their way to take cash only can be a little suspicious. Luckily you are not committing any crimes or fraud by paying her cash.\"",
"title": ""
},
{
"docid": "253360e3cafdc6b07b20398e7ba38969",
"text": "\"If you forgot to put the name on the \"\"pay to the order of\"\" line then anybody who gets their hands on the check can add their name to the check and deposit it at their bank into their account. If it goes to the correct person they will have an easy time making sure that the check is made out correctly. They don't have to worry about that picky teller who doesn't know what to do with a check made out to Billy Smith and a drivers license for Xavier William Smith. On the other hand... a criminal will also be able to make sure it is processed exactly the way they want it. If I made it out to a small business or a person I would let them know. You might not have a choice but to wait and see what happens if it was sent to a large business, the payment processing center could be a long way from where you will be calling.\"",
"title": ""
},
{
"docid": "8f414572f1273861b9e4d36c3ad3e02a",
"text": "As I replied to someone else who said that: I'm often having to send stuff with the check. Paperwork, a bill etc. While that would work to a person who knows me, it's usually not going to work with a business or government who needs to know why I'm sending this check.",
"title": ""
},
{
"docid": "5549b441b444749bc6bda2b1c5d03f08",
"text": "\"Once upon a time (not all that long ago), British cheques used to say something like \"\"Pay to the order of ..,,,, or bearer the sum of ...,..\"\" (emphasis added) and could be cashed by anyone unless the cheque-writer drew two parallel lines in the upper left corner of the cheque. These lines converted the instrument into a crossed cheque which could only be deposited into a bank account of the payee; a bearer of the cheque could not walk into the bank and waltz out with the cash equivalent. Perhaps British banks no longer use this styling (Indian banks still do) but if that cheque for 60k is not a crossed cheque, it better be sent securely with lots of insurance. An uncrossed cheque is the same as cash since it can be cashed by anyone. That being said, I am with @mhoran_psprep in thinking that all this is just a scam with the OP (mug) being asked to send 3600 bucks to \"\"girlfriend\"\" (scammer) to cover the cost of sending the check with full insurance, and when the check arrives and is deposited by OP into his bank, it will turn out to be a dud, and \"\"girlfriend\"\" will be long gone. The description of how the girlfriend signed a contract for 90k and received 60k of this amount upfront, but in the form of a check payable to boyfriend (!) OP reeks of scam; is this scenario realistic? In the past, I have received offers (usually from Nigeria) from \"\"women\"\" wanting to be my girlfriend, and I am sure that such offers will continue to come in the future....\"",
"title": ""
},
{
"docid": "f8763fc2c07ef25982bf35c895dd7557",
"text": "\"There are at least a couple problems: Your friend may not manage money well and so may not have enough money in the account. Check bounces. They get charged a fee. You get charged a fee. You have to chase after the friend to get the fee paid. The friend was cheap about the regular fees and doesn't want to pay this much higher fee. Your \"\"friend\"\" may really be a crook. The check is no good. Perhaps it's written under a false identity such that you are attempting to cash a stolen/forged check. You cash it. They take the money and disappear. You get charged with participating in the crime, go to jail, and now have a criminal record (worst case). My quick thought is that if you don't know the person well enough to know the home address, you don't know the person well enough to cash checks. In general, I would view this the same as a loan. When loaning to a friend, you should never loan more than you are willing to lose. Note that an actual loan would be safer. If you loan $50 to a friend, at worst you're out $50. If you deposit a fraudulent check, you did something illegal. You will have to be convincing when you tell your story to the police. If they don't believe you, they could charge you. A couple bad breaks and you could go to jail.\"",
"title": ""
},
{
"docid": "46691bddaf9882f2bfd4e34befd3fefa",
"text": "You can't cash the check silly. How can you go off on a rant when you can't even tell the difference between a real check and a promotional tool. If you don't want to call in an get info throw it away....simple. This thread made me laugh. Thanks for that. Good day.",
"title": ""
},
{
"docid": "c19ae66b44737cc53fa80786107eabb5",
"text": "The best description of P2P lending process I saw comes from the SEC proceedings. They are very careful about naming things that are happening in the process. Prosper got back to business after this order, but the paper describes succinctly how Prosper worked when its notes haven't yet been registered by the SEC. These materials contain a lot of responsible comments on how crowdfunding, including P2P lending, works.",
"title": ""
}
] |
fiqa
|
0b1a30b5262b3ac9adc35e708f5b6e00
|
Repairs to a house in order to rent it that were paid by the beneficiary, but is still owned by a Trust
|
[
{
"docid": "3e2719b026c9708a7d51c44bc55c3aff",
"text": "\"The Trustee has allowed me to act as his \"\"agent\"\", continuing to pay bills, and take care of much of the administrative affairs for my mother's estate since I did all of it for years before she passed away. I was not paid for any of this work. ... The expenses were more than $30K last year, and there is still a punch list to go this year. The trust should reimburse your expenses and deduct them on the trust tax return. Since the Trust owned the property in 2015, and I will receive ownership this month, can last year's expenses incurred for the Trust be deducted again future income for my property this year? Not exactly. The trust will file its own tax return and will report the income/loss attributed to the beneficiaries per the trust rules. What is attributed to you will flow to your Schedule E. From there you own it and if it is a passive activity where the loss is limited - you can carry it forward and offset with future gain. The trustee will have to deal with all the paperwork. Do 1099-misc forms need to be filed for the contractors who worked to get it ready for rental? It is my understanding that since 2010 (and before 2010) landlords who are not in real-estate trade or business are not required to send out 1099. But it won't hurt if you do, also. In any case - for all of these issues you should talk to a tax adviser (EA/CPA licensed in your State).\"",
"title": ""
}
] |
[
{
"docid": "2387abb9aaebd6d9af24c4eb31e8769e",
"text": "The house becomes an asset belonging to the estate of Alice. The debt also goes with the estate. The executor of the will should arrange for the debt to be paid off as part of sorting out the estate - they can't just hand out all the assets and leave nothing to pay off the debts. This could be done by selling the house. But in practice, the executor and the mortgage lender may both be happy if Bob takes out a mortgage, uses that to pay the debt, then inherits the house.",
"title": ""
},
{
"docid": "233b7834ac5a15ab9d4b9fb522d80bd0",
"text": "He doesn't have to follow through on this, but he could tell this sister that he will stop making mortgage payments, which will result in foreclosure and sale at lower price than might be realized by a voluntary sale. Translation: the house will sold, sis. Do you want to maximize your share of the proceeds? And, as I said in a comment above: I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there)",
"title": ""
},
{
"docid": "cac3fe9a31f1e771a5370d19b23b68b5",
"text": "If the house is titled to the estate, neither of you own the house and it cannot be mortgaged. Executor of the will is supposed to provide to you and to the probate court periodic reports as to what is going on. Check them up and talk to your probate lawyer.",
"title": ""
},
{
"docid": "6950d92f340ffdb328d15afac8299aba",
"text": "BLUF: Continue renting, and work toward financial independence, you can always buy later if your situation changes. Owning the house you live in can be a poor investment. It is totally dependent on the housing market where you live. Do the math. The rumors may have depressed the market to the point where the houses are cheaper to buy. When you do the estimate, don't forget any homeowners association fees and periodic replacement of the roof, HVAC system and fencing, and money for repairs of plumbing and electrical systems. Calculate all the replacements as cost over the average lifespan of each system. And the repairs as an average yearly cost. Additionally, consider that remodeling will be needful every 20 years or so. There are also intangibles between owning and renting that can tip the scales no matter what the numbers alone say. Ownership comes with significant opportunity and maintenance costs and is by definition not liquid, but provides stability. As long as you make your payments, and the government doesn't use imminent domain, you cannot be forced to move. Renting gives you freedom from paying for maintenance and repairs on the house and the freedom to move with only a lease to break.",
"title": ""
},
{
"docid": "d54c82ed709c7099785a447c4bbbc930",
"text": "\"From a more technical point of view, a trust is a legal relationship between 3 parties: Trusts can take many forms. People setup trusts to ensure that property is used in a specific way. Owning a home with a spouse is a form of a trust. A pension plan is a trust. Protecting land from development often involves placing it in trust. Wealthy people use trusts for estate planning for a variety of reasons. There's no \"\"better\"\" or \"\"best\"\" trust on a general level... it all depends on the situation that you are in and the desired outcome that you are looking for.\"",
"title": ""
},
{
"docid": "68f0af26786c33d55d3f79c60ef80cbf",
"text": "Gift taxes kick in at around $13K per giver per recipient per year. That means that a straight up gift of $200K (as cash or a house) will incur a tax. It is possible, however, that if the father has a spouse, he and the spouse could each give the mother and each child the full gift limit, for a total of about $78K per year, and that money could be used by all 3 of them to buy the house jointly, over a couple of years. I think the children would have to be on the title, since part of the gift money would be theirs (and one is an adult). As far as lending the money, my in-laws are our mortgage lenders, and when we structured the loan, it had to be at a market rate (which could be the lowest advertised rate we found for a fixed-rate mortgage, independent of what we might actually qualify for) or we could not deduct interest payments. Forgiving the loan could also be considered a gift, so they would need to keep an audit trail showing that payments were made, and her father would need to declare the interest income on his taxes. If he bought the house as a second home and let her and her children live there rent-free, it might work, but I'm not sure. It would, in that case, be an asset of his estate when he dies. I don't know anything about structuring it as a trust. Free rent could conceivably also be construed as a gift, subject to the limits stated above. Disclaimer: Not a tax professional.",
"title": ""
},
{
"docid": "4bbabfbd9e194fcd9a3fcd566cc2d9c1",
"text": "\"I don't know what country you live in or what the laws and practical circumstances of owning rental property there are. But I own a rental property in the U.S., and I can tell you that there are a lot of headaches that go with it. One: Maintenance. You say you have to pay an annual fee of 2,400 for \"\"building maintenance\"\". Does that cover all maintenance to the unit or only the exterior? I mean, here in the U.S. if you own a condo (we call a unit like you describe a \"\"condo\"\" -- if you rent it, it's an apartment; if you own it, it's a condo) you typically pay an annual fee that cover maintenance \"\"from the walls out\"\", that is, it covers maintenance to the exterior of the building, the parking lot, any common recreational areas like a swimming pool, etc. But it doesn't cover interior maintenance. If there's a problem with interior wiring or plumbing or the carpet needs to be replaced or the place needs painting, that's up to you. With a rental unit, those expenses can be substantial. On my rental property, sure, most months the maintenance is zero: things don't break every month. But if the furnace needs to be replaced or there's a major plumbing problem, it can cost thousands. And you can get hit with lots of nitnoid expenses. While my place was vacant I turned the water heater down to save on utility expenses. Then a tenant moved in and complained that the water heater didn't work. We sent a plumber out who quickly figured out that she didn't realize she had to turn the knob up. Then of course he had to hang around while the water heated up to make sure that was all it was. It cost me, umm, I think $170 to have someone turn that knob. (But I probably saved over $15 on the gas bill by turning it down for the couple of months the place was empty!) Two: What happens when you get a bad tenant? Here in the U.S., theoretically you only have to give 3 days notice to evict a tenant who damages the property or fails to pay the rent. But in practice, they don't leave. Then you have to go to court to get the police to throw them out. When you contact the court, they will schedule a hearing in a month or two. If your case is clear cut -- like the tenant hasn't paid the rent for two months or more -- you will win easily. Both times I've had to do this the tenant didn't even bother to show up so I won by default. So then you have a piece of paper saying the court orders them to leave. You have to wait another month or two for the police to get around to actually going to the unit and ordering them out. So say a tenant fails to pay the rent. In real life you're probably not going to evict someone for being a day or two late, but let's say you're pretty hard-nosed about it and start eviction proceedings when they're a month late. There's at least another two or three months before they're actually going to be out of the place. Of course once you send them an eviction notice they're not going to pay the rent any more. So you have to go four, five months with these people living in your property but not paying any rent. On top of that, some tenants do serious damage to the property. It's not theirs: they don't have much incentive to take care of it. If you evict someone, they may deliberately trash the place out of spite. One tenant I had to evict did over $13,000 in damage. So I'm not saying, don't rent the place out. What I am saying is, be sure to include all your real costs in your calculation. Think of all the things that could go wrong as well as all the things that could go right.\"",
"title": ""
},
{
"docid": "62434a140f0cfd64e57c57b6ba1b6a0a",
"text": "\"I have a friend who had went on a seminar with FortuneBuilders (the company that has Than Merrill as CEO). He told me that one of the things taught in that seminar was how to find funding for the property that you want to flip. One of the things he mentioned was that there are so-called \"\"hard money\"\" lenders who are willing to lend you the money for the property in exchange for getting their name on the property title. Last time I checked it looked like here in Florida we had at least Bridgewell Capital and Fairview Commercial Lending that were in that business. These hard money lenders get their investment back when the house is sold. So there is some underlying expectation that the house can be sold with some profit (to reimburse both the lender and you for your work). That friend of mine did tell me that he had flipped a house once but that he did not receive the funding to that from a lender but from an in-law, however it was through a similar arrangement.\"",
"title": ""
},
{
"docid": "d6af964cb1e3fb2de9183a7122faaf35",
"text": "You have to pay off the balance on the loan first. Also, FHA loans are not supposed to be used for rental properties. I don't know how you living there for a number of years changes things or how often is that rule enforced but you might need to refinance even if you rent it out.",
"title": ""
},
{
"docid": "0c02da97b79cfdd4f3f838fc372b3c1b",
"text": "\"Three companies may have copies of it: the bank, the Title Company (aka settlement company), and perhaps the real estate agent. The bank (assuming you had a mortgage) is usually the easiest one to contact, as you're probably still making payments to them. They may have sent you the form in a large packet when you sold the house and paid off the old mortgage. There is a tradition of sending customers their entire mortgage file once they pay off the mortgage after 30 years - which is very rare nowadays but many banks still adhere to it because the mortgage business is built on momentum and very slow to change. Otherwise, the title company should have a copy of it. If you don't know which company was used, they should be named as Trustee on the Deed Of Trust (which in most states is the official name of the document that we call a \"\"mortgage\"\"). The county recorder's office will have a copy of that Deed Of Trust on record if you can't find it anywhere. Some counties have digitized these so you could find it online, but some would require you to request a copy and pay a small printing fee for it.\"",
"title": ""
},
{
"docid": "ae78b765445388e78ff43a789df3076b",
"text": "\"Disclaimer: I am a law student, not a lawyer, and don't claim to have a legal opinion one way or another. My answer is intended to provide a few potentially relevant examples from case law in order to make the point that you should be cautious (and seek proper advice if you think that caution is warranted). Nor am I claiming that the facts in these cases are the same as yours; merely that they highlight the flexible approach that the courts take in such cases, and the fact that this area of law is complicated. I don't think it is sensible to just assume that there is no way that your girlfriend could acquire property rights as a rent paying tenant if arranged on an informal basis with no evidence of the intention of the arrangement. One of the answers mentions a bill which is intended to give non-married partners more rights than they have presently. But the existence of that bill doesn't prove the absence of any existing law, it merely suggests a possible legal position that might exist in the future. A worst-case assumption should also be made here, since you're considering the possibility of what can go wrong. So let's say for the sake of the argument that you have a horrible break up and your girlfriend is willing to be dishonest about what the intentions were regarding the flat (e.g. will claim that she understood the arrangement to be that she would acquire ownership rights in exchange for paying two thirds of the monthly mortgage repayment). Grant v Edwards [1986] Ch 638 - Defendant had property in the name of himself and his brother. Claimant paid nothing towards the purchase price or towards mortgage payments, but paid various outgoings and expenses. The court found a constructive trust in favor of the claimant, who received a 50% beneficial interest in the property. Abbot v Abbot [2007] UKPC 53, [2008] 1 FLR 1451 - Defendant's mother gifted land to a couple with the intention that it be used as a matrimonial home. However it was only put into the defendant's name. The mortgage was paid from a joint account. The claimant was awarded a 50% share. Thompson v Hurst [2012] EWCA Civ 1752, [2014] 1 FLR 238 - Defendant was a council tenant. Later, she formed a relationship with the claimant. They subsequently decided to buy the house from the council, but it was done in the defendant's name. The defendant had paid all the rent while a tenant, and all the mortgage payments while an owner, as well as all utility bills. The claimant sometimes contributed towards the council tax and varying amounts towards general household expenses (housekeeping, children, etc.). During some periods he paid nothing at all, and at other times he did work around the house. Claimant awarded 10% ownership. Aspden v Elvy [2012] EWHC 1387 (Ch), [2012] 2 FCR 435 - The defendant purchased a property in her sole name 10 years after the couple had separated. The claimant helped her convert the property into a house. He did much of the manual work himself, lent his machinery, and contributed financially to the costs. He was awarded a 25% share. Leeds Building Society v York [2015] EWCA Civ 72, [2015] HLR 26 (p 532) - Miss York and Mr York had a dysfunctional and abusive relationship and lived together from 1976 until his death in 2009. In 1983 Mr York bought a house with a mortgage. He paid the monthly mortgage repayments and other outgoings. At varous times Miss York contributed her earnings towards household expenses, but the judge held that this did \"\"not amount to much\"\" over the 33 year period, albeit it had helped Mr York being able to afford the purchase in the first place. She also cooked all the family meals and cared for the daughter. She was awarded a 25% share. Conclusion: Don't make assumptions, consider posting a question on https://law.stackexchange.com/ , consider legal advice, and consider having a formal contract in place which states the exact intentions of the parties. It is a general principle of these kinds of cases that the parties need to have intended for the person lacking legal title to acquire a beneficial interest, and proof to the contrary should make such a claim likely to fail. Alternatively, decide that the risk is low and that it's not worth worrying about. But make a considered decision either way.\"",
"title": ""
},
{
"docid": "1ea12d08b27c305c365845315d008efb",
"text": "This is called a fraudulent conveyance because its purpose is to prevent a creditor from getting repaid. It is subject to claw back under US law, which is a fancy way of saying that your friend will have to pay the bank back. Most jurisdictions have similar laws. It is probably a crime as well, but that varies by jurisdiction.",
"title": ""
},
{
"docid": "b80cd12b199c52298cec99dc26f6ee26",
"text": "\"That ain't nothing. It's really easy to get \"\"whipped up\"\" into a sense of entitlement, and forget to be grateful for what you do have. If this house doesn't exist, what would his costs of housing be elsewhere? Realistically. Would landlords rent to him? Would other bankers lend him money to buy a house? Would those costs really be any better? What about the intangible benefits like not having any landlord hassles or having a good relationship with the neighbors? It's entirely possible he has a sweet deal here, and just doesn't make enough money. If your credit rating is poor, your housing options really suck. Banks won't lend you money for a house unless you have a huge ton of upfront cash. Most landlords won't rent to you at all, because they are going to automated scoring systems to avoid accusations of racism. In this day and age, there are lots of ways to make money with a property you own. In fact, I believe very firmly in Robert Allen's doctrine: Never sell. That way you avoid the tens of thousands of dollars of overhead costs you bear with every sale. That's pure profit gone up in smoke. Keep the property forever, keep it working for you. If he doesn't know how, learn. To \"\"get bootstrapped\"\" he can put it up on AirBnB or other services. Or do \"\"housemate shares\"\". When your house is not show-condition, just be very honest and relatable about the condition. Don't oversell it, tell them exactly what they're going to get. People like honesty in the social sharing economy. And here's the important part: Don't booze away the new income, invest it back into the property to make it a better money-maker - better at AirBnB, better at housemate shares, better as a month-to-month renter. So it's too big - Is there a way to subdivide the unit to make it a better renter or AirBnB? Can he carve out an \"\"in-law unit\"\" that would be a good size for him alone? If he can keep turning the money back into the property like that, he could do alright. This is what the new sharing economy is all about. Of course, sister might show up with her hand out, wanting half the revenue since it's half her house. Tell her hell no, this pays the mortgage and you don't! She deserves nothing, yet is getting half the equity from those mortgage payments, and that's enough, doggone it! And if she wants to go to court, get a judge to tell her that. Not that he's going to sell it, but it's a huge deal. He needs to know how much of his payments on the house are turning into real equity that belongs to him. \"\"Owning it on paper\"\" doesn't mean you own it. There's a mortgage on it, which means you don't own all of it. The amount you own is the value of the house minus the mortgage owed. This is called your equity. Of course a sale also MINUS the costs of bringing the house up to mandatory code requirements, MINUS the cost of cosmetically making the house presentable. But when you actually sell, there's also the 6% Realtors' commission and other closing costs. This is where the mortgage is more than the house is worth. This is a dangerous situation. If you keep the house and keep paying the mortgage all right, that is stable, and can be cheaper than the intense disruption and credit-rating shock of a foreclosure or short sale. If sister is half owner, she'll get a credit burn also. That may be why she doesn't want to sell. And that is leverage he has over her. I imagine a \"\"Winter's bone\"\" (great movie) situation where the family is hanging on by a thread and hasn't told the bank the parents died. That could get very complex especially if the brother/sister are not creditworthy, because that means the bank would simply call the loan and force a sale. The upside is this won't result in a credit-rating burn or bankruptcy for the children, because they are not owners of the house and children do not inherit parents' debt.\"",
"title": ""
},
{
"docid": "408817360322a89d117c7194f7824806",
"text": "The short answer is: the money is yours from the insurance company, they actually can't tell you how to spend it, they can only decide from their tables and your plan, how much you get. The longer answer: Usually the insurance company pays one blanket amount, then itemizes the rest, where you have to submit receipts. You're also lucky, because damage over time is rarely covered, damage is usually only covered as sudden damage, so they don't pay out for maintenance issues. You can repair your house the way you want, I even do some of my own labor, because some repair jobs just don't get covered what they really cost to do right. HOWEVER, your mortgage company can withhold part of your claim to verify satisfactory work, this is to maintain the value of the collateral, and the insurance company can choose not to cover pre existing damage. Generally they don't stray from the assessment. I do not know of any law that permits an internal inspection of your home without your consent. They can come look at the outside, but they can't force you to let them inspect inside... Unless they're holding some of your insurance payment hostage, for most banks, receipts are sufficient. A good contractor usually will meet all the needs with an itemized budget and has a bit of wiggle room to fix things the right way, while keeping the bank and mortgage company happy.",
"title": ""
},
{
"docid": "b52d041cf591f3357e58e9c0491b2453",
"text": "All money distributed from a Traditional IRA to which no nondeductible contributions have been made is taxed as ordinary income. It does not matter if you think of the money as the original contribution or gains; the taxation is the same. Money distributed from a Roth IRA is tax-free. In either case, penalties apply if the distribution is premature.",
"title": ""
}
] |
fiqa
|
4d8a8711adf8cf04d7ecd4d9585a351b
|
Economics of buy-to-let (investment) flats
|
[
{
"docid": "20ae132d01516ae7c708aed732a616e1",
"text": "Surely the yield should be Yield = (Rent - Costs) / Downpayment ? As you want the yield relative to your capital not to the property value. As for the opportunity cost part you could look at the risk free rate of return you could obtain, either through government bonds or bank accounts with some sort of government guarantee (not sure what practical terms are for this in Finland). The management fee is almost 30% of your rent, what does this cover? Is it possible to manage the property yourself, as this would give you a much larger cushion between rent and expenses.",
"title": ""
},
{
"docid": "7cfd122bd9fab80baa3b6d76c8f2a0c1",
"text": "Lucky you - here where I live that does not work, you put money on the table year 1. Anyhow... You HAVE to account for inflation. THat is where the gain comes from. Not investment increase (value of item), but the rent goes higher, while your mortgage does not (you dont own more moeny in 3 years if you keep paying, but likely you take more rent). Over 5 or 10 years the difference may be significant. Also you pay back the mortgage - that is not free cash flow, but it is a growth in your capital base. Still, 1 flat does not make a lot ;) You need 10+, so go on earning more down payments.",
"title": ""
},
{
"docid": "b3e94cc42dcf1f9e62f72f804069018e",
"text": "Seems like a bad deal to me. But before I get to that, a couple of points on your expenses: Onward. You value a property by calculating its CAP rate. This is what you're calculating, except it does NOT include interest like you did -- that's a loan to you, and has no bearing on whether the unit itself is a good investment. It also includes estimations of variable expenses like maintenance and lack of income from vacancies. People argue vociferously on exactly how much to calculate for those. Maintenance will vary by age of the building and how damaging your tenets are. Vacancies vary based on how desirable the location is, how well you've done the maintenance, and how low the rent is. Doing the math based on your numbers, with just the fixed expenses: 8400 rent - 2400 management fee - 100 insurance = 5900/year income. 5900/150000 = 0.0393 = 3.9% CAP rate. And that's not even counting the variable expenses yet! So, what's a good CAP rate? Generally, 10% CAP rate is a good deal, and higher is a great deal. Below that you have to start to get cautious. Some places are worth a lower rate, for instance when the property is new and in a good location. You can do 8% on these. Below 6% CAP rate is usually a really bad investment. So, unless you're confident you can at least double the rent right off the bat, this is a terrible deal. Another way to think about it You're looking to buy with your finances in just about the best position possible -- a huge down payment and really low interest. Plus you haven't accounted for maintenance, taxes (if any), and vacancies. And still you'd make only a measly 1.2% profit? Would you buy a bond that only pays out 1.2%? No? What about a bond that only pays 1.2%, but also from time to time can force YOU to pay into IT a much larger amount every month?",
"title": ""
},
{
"docid": "f4de4e7e1fe2560de52070ed9cfb67a0",
"text": "but the flat would be occupied all the time. Famous last words. Are you prepared to have a tenant move in, and stop paying rent? In the US, it can take 6 months to get a tenant out of the apartment and little chance of collecting back rent. I don't know how your laws work, but here, they do not favor the landlord. The tiny sub 1% profit you make while funding principal payments is a risky proposition. It seems to me that even normal repairs (heater, appliances, etc) will put you to the negative. On the other hand, if this property has bottomed in terms of price and it rises in value, you may have a nice profit. But if you are just renting it out, it feels like it's too close to call. By the way, if you can go with a 30yr fixed, I'd suggest that. This would get you to a better cash flow sooner. A shorter mortgage simply means more money to principal each month. EDIT - as far as equity goes, at the beginning it seems the equity build up is really from your pocket, definitely so by switching from the 30 to the 15. What is your goal? The assumption I may have made is you wish to be a real estate investor with multiple properties. Doing so means saving up for the next down payment. Given the payoff time even if the property ran a high profit, I imagine you'd want to focus on cash flow, minimize the monthly expense, maximize what you can take each month to save for the next down payment. It's your choice, years from now to have one paid property, or 3 properties each with that 30% down payment, and let time be your friend.",
"title": ""
}
] |
[
{
"docid": "9b7f66d0deb3fe87aea9a853975b835d",
"text": "I'm an Aussie and I purchased 5 of these properties from 2008 to 2010. I was looking for positive cash flow on properties for not too much upfront investment. The USA property market made sense because of the high Aussie $$ at the time, the depressed property market in the US and the expensive market here. I used an investment web-site that allowed me to screen properties by yield and after eliminating outliers, went for the city with the highest consistent yield performance. I settled on Toledo, Ohio as it had the highest yields and was severely impacted by the housing crisis. I bought my first property for $18K US which was a little over $17K AUD. The property was a duplex in great condition in a reasonable location. Monthly rentals $US900 and rents guaranteed and direct deposited into my bank account every month by section 8. Taxes $900 a year and $450 a year for water. Total return around $US8,000. My second property was a short sale in a reasonable area. The asking was $US8K and was a single family in good condition already tenanted. I went through the steps with the bank and after a few months, was the proud owner of another tenanted, positive cash flow property returning $600 a month gross. Taxes of $600 a year and water about the same. $US6K NET a year on a property that cost $AUD8K Third and fourth were two single family dwellings in good areas. These both cost $US14K each and returned $US700 a month each. $US28K for two properties that gross around $US15K a year. My fifth property was a tax foreclosure of a guy with 2 kids whose wife had left him and whose friend had stolen the money to repay the property taxes. He was basically on the bones of his butt and was staring down the barrel of being homeless with two kids. The property was in great condition in a reasonable part of town. The property cost me $4K. I signed up the previous owner in a land contract to buy his house back for $US30K. Payments over 10 years at 7% came out to around $US333 per month. I made him an offer whereby if he acted as my property manager, i would forgo the land contract payments and pay him a percentage of the rents in exchange for his services. I would also pay for any work he did on the properties. He jumped at it. Seven years later, we're still working together and he keeps the properties humming. Right now the AUD is around 80c US and looks like falling to around 65c by June 2015. Rental income in Aussie $$ is around $2750 every month. This month (Jan 2015) I have transferred my property manager's house back to him with a quit claim deed and sold the remaining houses for $US100K After taxes and commission I expect to receive in the vicinity of AUD$120K Which is pretty good for a $AUD53K investment. I've also received around $30K in rent a year. I'm of the belief I should be buying when everybody else is selling and selling when everybody else is buying. I'm on the look-out for my next positive cash flow investment and I'm thinking maybe an emerging market smashed by the oil shock. I wish you all happiness and success in your investment. Take care. VR",
"title": ""
},
{
"docid": "f06c7c60ab50533394de47beb5d0f937",
"text": "why does it make sense financially to buy property and become a landlord? Because then your investment generates cash instead of just sitting idle. All taxes, fees and repairs aside it would take almost 21 years before I start making profits. No - your profit will be the rents that you collect (minus expenses). You still have an asset that is worth roughly what you paid for it (and might go up in value), so you don't need to recoup the entire cost of the property before making a profit. Compared to investing the same 150k in an ETF portfolio with conservative 4% in annual returns I would have made around 140k € after taxes in the same 21 years i.e. almost doubled the money. If you charge 600 € / month (and never miss a month of rental income), after 21 years you have made 151k € in rents plus you still have a property. That property is most likely going to be worth more than you paid for it, so you should have at least 300k € in assets. Having said all that, it does NOT always make sense to invest in rental property. Being a landlord can be a hard job, and there are many risks involved that are different that risks in financial investments.",
"title": ""
},
{
"docid": "c091e3281e221f90416b841dccd337be",
"text": "Ok maybe I should have went into further detail but I'm not interested in a single point estimate to compare the different options. I want to look at the comparable NPVs for the two different options for a range of exit points (sell property / exit lease and sell equity shares). I want to graph the present values of each (y-axis being the PVs and x-axis being the exit date) and look at the 'cross-over' point where one option becomes better than the other (i'm taking into account all of the up front costs of the real estate purchase which will be a bit different in the first years). i'm also looking to do the same for multiple real estate and equity scenarios, in all likelihood generate a distribution of cross-over points. this is all theoretical, i'm not really going to take the results to heart. merely an exercise and i'm tangling with the discount rates at the moment.",
"title": ""
},
{
"docid": "71df35279dd16d9ed7815f5c99e94554",
"text": "In most cases there is no debt attached to those properties, so there is no risk to financial institutions. So that leaves us with an increase in supply of houses most people can't afford at current prices, expect a short-term boost to construction while many are converted to duplex/apartment type properties and slight downward pressure on prices. Obviously these are wild generalisations and the effect will be massively different in most cities compared to rural or small-town areas.",
"title": ""
},
{
"docid": "4d9f05f39288a85e40d0d2571f7e15c5",
"text": "\"You are in your mid 30's and have 250,000 to put aside for investments- that is a fantastic position to be in. First, let's evaluate all the options you listed. Option 1 I could buy two studio apartments in the center of a European capital city and rent out one apartment on short-term rental and live in the other. Occasionally I could Airbnb the apartment I live in to allow me to travel more (one of my life goals). To say \"\"European capital city\"\" is such a massive generalization, I would disregard this point based on that alone. Athens is a European capital city and so is Berlin but they have very different economies at this point. Let's put that aside for now. You have to beware of the following costs when using property as an investment (this list is non-exhaustive): The positive: you have someone paying the mortgage or allowing you to recoup what you paid for the apartment. But can you guarantee an ROI of 10-15% ? Far from it. If investing in real estate yielded guaranteed results, everyone would do it. This is where we go back to my initial point about \"\"European capital city\"\" being a massive generalization. Option 2 Take a loan at very low interest rate (probably 2-2.5% fixed for 15 years) and buy something a little nicer and bigger. This would be incase I decide to have a family in say, 5 years time. I would need to service the loan at up to EUR 800 / USD 1100 per month. If your life plan is taking you down the path of having a family and needed the larger space for your family, then you need the space to live in and you shouldn't be looking at it as an investment that will give you at least 10% returns. Buying property you intend to live in is as much a life choice as it is an investment. You will treat the property much different from the way something you rent out gets treated. It means you'll be in a better position when you decide to sell but don't go in to this because you think a return is guaranteed. Do it if you think it is what you need to achieve your life goals. Option 3 Buy bonds and shares. But I haven't the faintest idea about how to do that and/or manage a portfolio. If I was to go down that route how do I proceed with some confidence I won't lose all the money? Let's say you are 35 years old. The general rule is that 100 minus your age is what you should put in to equities and the rest in something more conservative. Consider this: This strategy is long term and the finer details are beyond the scope of an answer like this. You have quite some money to invest so you would get preferential treatment at many financial institutions. I want to address your point of having a goal of 10-15% return. Since you mentioned Europe, take a look at this chart for FTSE 100 (one of the more prominent indexes in Europe). You can do the math- the return is no where close to your goals. My objective in mentioning this: your goals might warrant going to much riskier markets (emerging markets). Again, it is beyond the scope of this answer.\"",
"title": ""
},
{
"docid": "9e2514f7b41ead8b0f37d702fcf7fbd2",
"text": "well yes but you should also begin to understand the sectoral component of real estate as a market too in that there can be commercial property; industrial property and retail property; each of which is capable of having slightly (tho usually similar of course) different returns, yields, and risks. Whereas you are saving to buy and enter into the residential property market which is different again and valuation principles are often out of kilter here because Buying a home although exposing your asset base to real estate risk isnt usually considered an investment as it is often made on emotional grounds not strict investment criteria.",
"title": ""
},
{
"docid": "f826bafa5b768c0119ad66f18bd1b81d",
"text": "Major things to consider: If you're expecting to look at the property market: it might prove to be sensible to start doing it now, since the market is just recovering, and (IMHO warning -I'm not a professional investor, just a random guy on the internet) prices still hasn't caught up with value fundamentals. check out cash ISA's for a 24-36 month timeframe; most do a reasonable 3-4% AER, with the current inflation rate being around 4%, this will, at the very least, make sure your money doesn't loose it's purchasing power. Finally, a word of caution: SIPPs have a rather rubbish AER rates. This, by itself, wouldn't be much of a problem on a 30-40 years timeframe, but keep the (current, and historically strictly monotonically increasing) 4% inflation rate in mind: this implies the purchasing power of any money tied in these vehicles will loose it's purchasing power, in a compounding manner. Hope this helps, let me know if you have any questions.",
"title": ""
},
{
"docid": "538fe0fb7780d4da227f8ac29f58e5f1",
"text": "\"For any sort of investment you need to understand your risks first. If you're going to put money into the stock or bond market I would get a hold of Graham's \"\"The Intelligent Investor\"\" first, or any other solid value investing book, and educate yourself on what the risks are. I can't speak about real estate investing but I am sure there are plenty of books describing risks and benefits of that as well. I could see inflation/deflation having an effect there but I think the biggest impact on the landlord front is quality of life in the area you are renting and the quality of the tenant you can get. One crazy tenant and you will be driven mad yourself. As for starting a business, one thing I would like to say is that money does not automatically make money. The business should be driven by a product or service that you can provide first, and the backing seed capital second. In my opinion you will have to put energy and time worth much more than the 100k into a business over time to make it successful so the availability of capital should not be the driving decision here. Hope this helps more than it confuses.\"",
"title": ""
},
{
"docid": "f1ce77cace7085d6fd06cd494c162242",
"text": "Let me add a few thoughts that have not been mentioned so far in the other answers. Note that for the decision of buying vs. renting a home i.e. for personal use, not for renting out there's a rule of thumb that if the price for buying is more than 20 year's (cold) rents it is considered rather expensive. I don't know how localized this rule of thumb is, but I know it for Germany which is apparently the OP's country, too. There are obviously differences between buying a house/flat for yourself and in order to rent it out. As others have said, maintenance is a major factor for house owners - and here a lot depends on how much of that you do yourself (i.e. do you have the possibility to trade working hours for costs - which is closely related to financial risk exposure, e.g. increasing income by cutting costs as you do maintenance work yourself if you loose your day-time job?). This plays a crucial role for landlords I know (they're all small-scale landlords, and most of them do put in substantial work themselves): I know quite a number of people who rent out flats in the house where they actually live. Some of the houses were built with flats and the owner lives in one of the flats, another rather typical setup is that people built their house in the way that a smaller flat can easily be separated and let once the kids moved out (note also that the legal situation for the landlord is easier in that special case). I also know someone who owns a house several 100 km away from where they live and they say they intentionally ask a rent somewhat below the market price for that (nice) kind of flat so that they have lots of applicants at the same time and tenants don't move out as finding a new tenant is lots of work and costly because of the distance. My personal conclusion from those points is that as an investment (i.e. not for immediate or future personal use) I'd say that the exact circumstances are very important: if you are (stably) based in a region where the buying-to-rental-price ratio is favorable, you have the necessary time and are able to do maintenance work yourself and there is a chance to buy a suitable house closeby then why not. If this is not the case, some other form of investing in real estate may be better. On the other hand, investing in further real estate closeby where you live in your own house means increased lump risk - you miss diversification into regions where the value of real estate may develop very differently. There is one important psychological point that may play a role with the observed relation between being rich and being landlord. First of all, remember that the median wealth (without pensions) for Germany is about 51 k€, and someone owning a morgage-free 150 k€ flat and nothing else is somewhere in the 7th decile of wealth. To put it the other way round: the question whether to invest 150 k€ into becoming a landlord is of practical relevance only for rich (in terms of wealth) people. Also, asking this question is typically only relevant for people who already own the home they live in as buying for personal use will typically have a better return than buying in order to rent. But already people who buy for personal use are on average wealthier (or at least on the track to become more wealthy in case of fresh home owners) than people who rent. This is attributed to personal characteristics and the fact that the downpayment of the mortgage enforces saving behaviour (which is typically kept up once the house is paid, and is anyways found to be more pronounced than for non-house-owners). In contrast, many people who decide never to buy a home fall short of their initial savings/investment plans (e.g. putting the 150 k€ into an ETF for the next 21 years) and in the end spend considerably more money - and this group of people rarely invests into directly becoming a landlord. Assuming that you can read German, here's a relevant newspaper article and a related press release.",
"title": ""
},
{
"docid": "89d4b3d5f9ba6b37bb8a4966cf06ef82",
"text": "I wrote this in another thread but is also applicable here. In general people make some key mistakes with property: Not factoring in depreciation properly. Houses are perpetually falling down, and if you are renting them perpetually being trashed by the tenants as well - particularly in bad areas. Accurate depreciation costs can often run in the 5-20% range per year depending on the property/area. Add insurance to this as well or be prepared to lose the whole thing in a disaster. Related to 1), they take the index price of house price rises as something they can achieve, when in reality a lot of the house price 'rise' is just everyone having to spend a lot of money keeping them standing up. No investor can actually track a house price graph due to 1) so be careful to make reasonable assumptions about actual achievable future growth (in your example, they could well be lagging inflation/barely growing if you are not pricing in upkeep and depreciation properly). Failure to price in the huge transaction costs (often 5%+ per sale) and capital gains/other taxes (depends on the exact tax structure where you are). These add up very fast if you are buying and selling at all frequently. Costs in either time or fees to real estate rental agents. Having to fill, check, evict, fix and maintain rental properties is a lot more work than most people realise, and you either have to pay this in your own time or someone else’s. Again, has to be factored in. Liquidity issues. Selling houses in down markets is very, very hard. They are not like stocks where they can be moved quickly. Houses can often sit on the market for years before sale if you are not prepared to take low prices. As the bank owns your house if you fail to pay the mortgage (rents collapse, loss of job etc) they can force you to fire sale it leaving you in a whole world of pain depending on the exact legal system (negative equity etc). These factors are generally correlated if you work in the same cities you are buying in so quite a lot of potential long tail risk if the regional economy collapses. Finally, if you’re young they can tie you to areas where your earnings potential is limited. Renting can be immensely beneficial early on in a career as it gives you huge freedom to up sticks and leave fast when new opportunities arise. Locking yourself into 20 yr+ contracts/landlord activities when young can be hugely inhibiting to your earnings potential. Without more details on the exact legal framework, area, house type etc it’s hard to give more specific advise, but in general you need a very large margin of safety with property due to all of the above, so if the numbers you’re running are coming out close (and they are here), it’s probably not worth it, and you’re better of sticking with more hands off investments like stocks and bonds.",
"title": ""
},
{
"docid": "4d43af4b1dc8286b7debd6994eaf2ae9",
"text": "Basically there are 2 ways you can make money from an investment, through income (eg: rent or dividends) and through the price of the investment going up (capital growth or gains). Most people associate negative gearing with investment properties but it can be done with shares and other investments where you borrow money to buy the investment and it produces an income of some sort. If the investment does not produce an income then you cannot negative gear it. Using a property as an example (in Australia), if all your expenses each month (loan interest payments, council and water rates, insurance and/or strata, advertising and management fees, depreciation, and maintenance expense) are greater than your income (rent), then you are negative gearing the investment property. This is a monthly loss on your investment which can be used to offset and reduce the amount of tax you pay during the year. So most people negative gearing an investment property will get a nice sum back when they do their tax returns. The problem with negative gearing is that you have to lose money in order to save some tax. So as an example, if you are on a marginal tax rate of 30%, for every $1 you lose from the investment property you will save 30c in tax. If your marginal tax rate is 45% then will save 45c in tax for every $1 lost on the investment property. Thus negative gearing becomes more tax effective the higher your income (and tax bracket). But you are still losing money overall. The problem is that most novice investors buy an investment property for the main purpose of reducing their taxes. This can be dangerous because the main reason to buy any investment should be that you consider it to be a good investment, not to save you tax. Because if the investment is not a good one, then you will not only lose money on the income side but also on the capital side. Negative gearing should be looked at as a bonus or additional benefit when chosing a good investment to buy, not as the reason to buy the investment.",
"title": ""
},
{
"docid": "e0b589d58e89dc2487eaf6e429674240",
"text": "\"Americans are snapping, like crazy. And not only Americans, I know a lot of people from out of country are snapping as well, similarly to your Australian friend. The market is crazy hot. I'm not familiar with Cleveland, but I am familiar with Phoenix - the prices are up at least 20-30% from what they were a couple of years ago, and the trend is not changing. However, these are not something \"\"everyone\"\" can buy. It is very hard to get these properties financed. I found it impossible (as mentioned, I bought in Phoenix). That means you have to pay cash. Not everyone has tens or hundreds of thousands of dollars in cash available for a real estate investment. For many Americans, 30-60K needed to buy a property in these markets is an amount they cannot afford to invest, even if they have it at hand. Also, keep in mind that investing in rental property requires being able to support it - pay taxes and expenses even if it is not rented, pay to property managers, utility bills, gardeners and plumbers, insurance and property taxes - all these can amount to quite a lot. So its not just the initial investment. Many times \"\"advertised\"\" rents are not the actual rents paid. If he indeed has it rented at $900 - then its good. But if he was told \"\"hey, buy it and you'll be able to rent it out at $900\"\" - wouldn't count on that. I know many foreigners who fell in these traps. Do your market research and see what the costs are at these neighborhoods. Keep in mind, that these are distressed neighborhoods, with a lot of foreclosed houses and a lot of unemployment. It is likely that there are houses empty as people are moving out being out of job. It may be tough to find a renter, and the renters you find may not be able to pay the rent. But all that said - yes, those who can - are snapping.\"",
"title": ""
},
{
"docid": "094cc46edbd8fa8d912fa6cb2f6da5dc",
"text": "I know of no generic formula for determining if an investment property is a good investment, besides the trivial formula. Make sure your income is greater than your expenses, and hope the value of the property doesn't drop. Some people will tell you to expect the monthly rent to be a fixed percentage of the purchase price, but that is a goal not a certainty. It is also impossible to estimate the difficulty renting the property, or how long the roof will last. Taxes can't be predicted, as the value of the house increase, so do the property taxes, but you might not be able to increase the rent. You can't even predict the quality of the tenant. Will they damage the property? Or skip out early? You will need somebody who knows the local market to estimate the local conditions, and help you determine the estimated costs and income based on the actual property involved.",
"title": ""
},
{
"docid": "9df8d0c8d093cd3767f3871e8c58682e",
"text": "Real Estate potentially has two components of profit, the increase in value, and the ongoing returns, similar to a stock appreciating and its dividends. It's possible to buy both badly, and in the case of stocks, there are studies that show the typical investor lags the market by many percent. Real estate is not a homogeneous asset class. A $200K house renting for $1,000 is a far different investment than a $100K 3 family renting for $2,000 total rents. Both exist depending on the part of the country you are in. If you simply divide the price to the rent you get either 16.7X or 4.2X. This is an oversimplification, and of course, interest rates will push these numbers in one direction or another. It's safe to say that at any given time, the ratio can help determine if home prices are too high, a bargain, or somewhere in between. As one article suggests, the median price tracks inflation pretty closely. And I'd add, that median home prices would track median income long term. To circle back, yes, real estate can be a good investment if you buy right, find good tenants, and are willing to put in the time. Note: Buying to rent and buying to live in are not always the same economic decision. The home buyer will very often buy a larger house than they should, and turn their own 'profit' into a loss. e.g. A buyer who would otherwise be advised to buy the $150K house instead of renting is talked into a bigger house by the real estate agent, the bank, the spouse. The extra cost of the $225K house is the 1/3 more cost of repair, utilities, interest, etc. It's identical to needing a 1000 sq ft apartment, but grabbing one that's 1500 sq ft for the view.",
"title": ""
},
{
"docid": "35a05cfc4c1ac63cbf2f0d766a3e4561",
"text": "\"How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing \"\"money transfer by email\"\" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years.\"",
"title": ""
}
] |
fiqa
|
6bfd747b0dc86e7c65bcac7346ac672e
|
fastest way to move USD to EUR
|
[
{
"docid": "8995e92eb9f6fb42039cb4f73c8a21d5",
"text": "You're asking three different things: What is the fastest way, what is the cheapest way and what is the easiest way. You will not find one method that is all three at once. The fastest way is a wire transfer. The cheapest way that I've encountered is a foreign exchange service like XE. The easiest way is probably Paypal since the money is already in Paypal.",
"title": ""
}
] |
[
{
"docid": "5e378ee1d0052e8237391cc8a26c5555",
"text": "How should we disregard leverage when it's the leverage that creates the 'wipe-out' potential? If you simply convert 100K EUR to USDollars, you dollars might then fluctuate a few thousand, maybe even 10K over a year, but the guy that only put up 1000 EUR to do this has a disproportionally higher risk.",
"title": ""
},
{
"docid": "93ed9100864a8c4146441b8c7bc0dab5",
"text": "Now, is there any clever way to combine FOREX transactions so that you receive the US interest on $100K instead of the $2K you deposited as margin? Yes, absolutely. But think about it -- why would the interest rates be different? Imagine you're making two loans, one for 10,000 USD and one for 10,000 CHF, and you're going to charge a different interest rate on the two loans. Why would you do that? There is really only one reason -- you would charge more interest for the currency that you think is less likely to hold its value such that the expected value of the money you are repaid is the same. In other words, currencies pay a higher interest when their value is expected to go down and currencies pay a lower interest when their value is expected to go up. So yes, you could do this. But the profits you make in interest would have to equal the expected loss you would take in the devaluation of the currency. People will only offer you these interest rates if they think the loss will exceed the profit. Unless you know better than them, you will take a loss.",
"title": ""
},
{
"docid": "4f83fd4e12068a3dd80172e8afb3afef",
"text": "In addition to TransferWise that @miernik answered with and that I successfully used, I found CurrencyFair which looks to be along similar lines and also supports US$.",
"title": ""
},
{
"docid": "52d5eb834909fe217fc1de584ecdacbd",
"text": "The best way is to approach your bank and fill out a transfer form to send USD to your US account (if you are visiting India). They will require quite a number of proof (AADHAR, PAN, Passport) copies. Otherwise speak to your bank about how to do a wire transfer from your India A/C to US; after de-moitization regulations have tightened, the best course of action would be to speak to your bank directly.",
"title": ""
},
{
"docid": "f36e485e0a7440fb5ee9b39247f2c2c5",
"text": "A lot depends on how much is in the account, and whether you expect to be returning (or having any sort of financial dealings) in Europe in the future. My own experience (about 10 years out of date, and with Switzerland) is that the easiest way to transfer reasonable amounts (a few thousand dollars) was simply to get it in $100 bills from the European bank. I also kept the account open for a number of years while living in the US (doing contracting that was paid into the European bank), and could withdraw money from American ATMs. I eventually had to close the account due to issues between the bank and the IRS. I think it was only that particular bank (UBS) that was the problem, though.",
"title": ""
},
{
"docid": "9e7ade037d44f4b9595d38d7ea099389",
"text": "The website http://currencyfair.com/ provides a service which gives you both a decent exchange rate (about 1% off from mid-market rate) and a moderately low fee for the transfer: 4 USD for outgoing ACH in the US, 10 USD for same-day US wire. For the reverse (sending money from the US to EU) the fees are: 3 EUR for an ACH, 8 EUR for a same-day EUR wire. It has been online for quite a while, so I assume its legit, but I'd do a transfer for a smaller sum first, to see if there are any problems, and then a second transfer for the whole sum.",
"title": ""
},
{
"docid": "db7a27bf0afb30d12a004f760578f6a8",
"text": "\"is there anything I can do now to protect this currency advantage from future volatility? Generally not much. There are Fx hedges available, however these are for specialist like FI's and Large Corporates, traders. I've considered simply moving my funds to an Australian bank to \"\"lock-in\"\" the current rate, but I worry that this will put me at risk of a substantial loss (due to exchange rates, transfer fees, etc) when I move my funds back into the US in 6 months. If you know for sure you are going to spend 6 months in Australia. It would be wise to money certain amount of money that you need. So this way, there is no need to move back funds from Australia to US. Again whether this will be beneficial or not is speculative and to an extent can't be predicted.\"",
"title": ""
},
{
"docid": "4d09b3d9cf7ceb80f318ecff449b2bfb",
"text": "You can use a service like Transferwise to send money. The trick is that they allow sending money to yourself, from a GBP account to an EUR account, effectively making it an exchange shop. Their rates are usually very good, with the transfers happening on the same day most of the time.",
"title": ""
},
{
"docid": "60f3356747247bc63b7afea2a1b05324",
"text": "Remember that converting from EU to USD and the other way around always costs you money, at least 0.5% per conversion. Additionally, savings accounts in EU and USA have different yields, you may want to compare which country offers you the best yields and move your money to the highest yielding account.",
"title": ""
},
{
"docid": "d1b4070ae8f86c7d172defb39f9cd1a7",
"text": "Rates are arrived at by the cumulative buying and selling on the foreign exchange market, much the same way that stock prices are arrived at. If there are more people wanting to buy dollars with euros, EUR/USD goes down. If more people want to buy euros with dollars, then EUR/USD goes up. The initial rate was about $1.18 per euro when it began trading on January 1st, 1999. It replaced the European Currency Unit at that time, which was a weighted basket of currencies of (more or less) the participating countries. You're correct about the printing press in the US and other countries. The exchange rates do reflect in part how much of a relative workout those printing presses get.",
"title": ""
},
{
"docid": "11ae7e9ec09f2cb9a371d6f336c3dd6a",
"text": "Then, is it possible to deposit rubles at the same ATM to get USD in my account at the same rate? No this is not possible. Generally deposits into accounts outside country and not offered.",
"title": ""
},
{
"docid": "12c783ab58e622f4b75a45d00cc7d18a",
"text": "There is a way I discovered of finding the current exchange rate before committing to buy, go to send payments, put in your own second email, pay 1gbp as the amount and it will give you the exchange rate and fees in your own currency, in my case euro, before you have to click on send payment",
"title": ""
},
{
"docid": "d1105d0dfbec07b6b30ea37e35393157",
"text": "HSBC exchange spread between HKD and USD was 483 bps (1 bps is 0.0001) on their 24 hours exchange network a few weeks ago when I checked. It is very high for a pair of linked currencies which has very little fluctuation. One should expect less than 5 bps or even 1 bps. I did my currency conversion at a US brokerage which can take HKD currency and then I was able to pick the time/rate and amount I like to make the conversion. Basically, the currency pair runs within a tight band and you just need to buy USD with HKD at the time when it is near the edge of the band to your advantage. There is usually no fee on currency conversion. They make money through the spread. HSBC premier allows you to wire free among countries. I forget whether they offer tighter spread or not. Rob was right on about the cost of transferring money overseas. The majority of the cost is in the conversion, not the wiring.",
"title": ""
},
{
"docid": "057c8941ff4fd43be95685dd3b8b1374",
"text": "I'm sorry I guess what i meant to say was, what's the downside here? Why isn't everyone doing this, what am i missing? Someone clarified that i'm completely exposed to FX risk if I bring it back. What if I am IN australia, how would I do this, short USD's?",
"title": ""
},
{
"docid": "bc09b6dfa8e6977d71d0fb8eb8d69b13",
"text": "Cheaper and faster are usually mutually exclusive. If you want faster, nothing is faster than cash. I would recommend using an ATM to withdraw cash from your USD account as Florints and then use as appropriate. If you want cheaper, then the cheapest currency conversion commonly available is foreign exchange / transfer services like OFX / XE Trade / Transferwise. Turn around time on these can be as little as a business day or two but more commonly takes a few business days, but they typically offer the best currency exchange rates at the lowest cost. If you must make regular payments to 3rd parties, you can set these services up to send the converted currency to a 3rd party rather than back to your own account.",
"title": ""
}
] |
fiqa
|
177b0b0c300354788ec352b832fb7f4d
|
How to minimize damage from sale of savings account
|
[
{
"docid": "4fa9a958bcecfdec736a47e992d6ebfd",
"text": "\"Bank of America has been selling off their local branches to smaller banks in recent years. Here are a few news stories related to this: Along with the branch buildings, the local customers' savings and checking accounts are sold to the new bank. It is interesting that you were told that your savings account is being sold, but that your checking account will remain with BofA. I guess it depends on the terms of the particular sale. Here are your options, as I see it: Let the savings account move to the new bank, and see what the new terms are like. You might actually like the new bank. If you don't, you can shop around and close your account at the new bank after it has been created. Close your account now, before the move. If you have a different bank you'd like to move to, there is no need to wait. Since your checking account is apparently staying with BofA, you could move all your money from your savings account to your checking account, closing your savings account. Then after \"\"mid August\"\" when the local branch switches to the new bank and everyone else's savings account has moved, you can call up BofA and tell them you want to move some of the money from your checking account into a new savings account. If you really have your heart set on staying with BofA, option 3 looks like a good, easy choice. To address your other concerns: Bank of America is a big credit card company, so I doubt that your credit card is being sold off. Your credit card account should stay as-is. Even if your savings account and checking account are at a different bank, there is no need to switch credit cards. Your savings and checking accounts have nothing to do with your credit report or score, so there is no concern there. If you end up wanting to switch to a new credit card with a different bank, there are minor hits to your credit score involved with applying for a new card and closing your current card, but if I were you I would not worry about your credit score in this. Switch credit cards if you want a change, and keep your credit card if you don't.\"",
"title": ""
}
] |
[
{
"docid": "65d0e65fc15b89d957ea8f4aacf84849",
"text": "Brokerages are supposed to keep your money separate from theirs. So, even if they fail as a company, your money and investments are still there, and can be transferred to another brokerage. It doesn't matter if it's an IRA or taxable account. Of course, as is the case with MF Global, if illegally take their client's money (i.e., steal), it may be a different story. In such cases, SIPC covers up to $500K, of which $250K can be cash, as JoeTaxpayer said. You may be interested in the following news item from the SEC. It's about some proposed changes, but to frame the proposal they lay out the way it is now: http://www.sec.gov/news/press/2011/2011-128.htm The most relevant quote: The Customer Protection Rule (Rule 15c3-3). This SEC rule requires a broker-dealer to segregate customer securities and cash from the firm’s proprietary business activities. If the broker-dealer fails, these customer assets should be readily available to be returned to customers.",
"title": ""
},
{
"docid": "ed78f35d2db90200e5a3c241f8caba8d",
"text": "In addition to the adjustment type in NL7's answer, there are a host of others. If there are any adjustments, form 8949 is required, if not, the gains can be separated into short and long-term and added together to be entered on Schedule D. Anything requiring an adjustment code in column F of the 8949 requires an entry in column G. Some other example entries for column F include: (see the 8949 instructions for a complete list) **A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. (from Pub17)",
"title": ""
},
{
"docid": "cf3bc8530ff8a4c61381016dc51ebae5",
"text": "In most cases of fraud, your liability is limited to $50 if you report it within certain number of days (I think 2). After that the liability grows to something like $500. You are covered even if your negligence has caused the breach. In addition VISA guarantees credit cards - in most cases you have 0 liability. Finally checking & savings accounts are FDIC insured up to $250,000 in case the bank goes bankrupt. The $250,000 is a total for all accounts at the given bank. It's up to you to report and ask for refund though and sometimes you have to jump through hoops to get it but usually it's fairly straightforward and it usually takes only 2 or 3 days.",
"title": ""
},
{
"docid": "ab63ebccd465e91061835ecbb7464e7b",
"text": "First, what's the reason? Why do you have that much in cash at all - are you concerned about market volatility, are you planning to buy a house, do you have tens of millions of dollars and this is your slush fund? Are you a house flipper and this is part of business for you? If you need the money for short term use - ie, you're buying a house in cash next month - then as long as you're in a sound bank (one of the big national ones, for example) it seems reasonable. You can never predict a crash like 2008, but it seems unlikely that Chase or Citibank will go under in the next few weeks. If you like to have a cash position, then split the money among multiple banks. Buy a CD at one major bank with some of the amount. My in-laws have a trust which is partially invested in CDs, and they use multiple banks for this purpose to keep their accounts fully insured. Each separate bank you're covered up to 250k, so if you have $150k at Chase and $150k at a local bank, you're covered. (You're also covered in a much larger amount - up to 1MM potentially - if you are married, as you can have a separate account each for $250k and a joint account up to $500k.) Otherwise, why do you have that much in cash? You should invest it in something that will return more than inflation, at a minimum... Edit post-clarifications: $350k is around my level of 'Maybe, maybe not'. You're risking $100k on a pretty low risk (assuming this isn't a small local bank, and even those are pretty low still). In order to remove that risk you have to do something active - ie, take 100k somewhere else, open a new bank account, etc. - which isn't exactly the hardest thing in the world, but it does take effort. Is it worth the 0.001% chance (entirely made up) you lose the 100k? That's $10, if you agree with that risk chance. Up to you. It wouldn't be particularly hard, though, to open an account with an online bank, deposit $100k in there in a 6 month CD, then pay the IRS from your other account and when the 6 month CD expires take the cash back into your active account. Assuming you're not planning on buying a house in the next six months this should be fine, I'd think (and even then you'd still have $150k for the downpayment up front, which is enough to buy a $750k house w/o PMI). Additionally, as several commenters note: if you can reasonably do so, and your money won't be making significant interest, you might choose to pay your taxes now rather than later. This removes the risk entirely; the likely small interest you earn over 3 months may be similar to the amount you'd spend (mostly of your time, plus possibly actual expenses) moving it to another bank. If you're making 2% or 3% this may not be true, but if you're in a 0.25% account like my accounts are, $100k * 0.25% * 0.25 is $62.50, after all.",
"title": ""
},
{
"docid": "0d1e91dd9b70da76f6ad1b4bb1a86ab0",
"text": "Personally I solve this by saving enough liquid capital (aka checking and savings) to cover pretty much everything for six months. But this is a bad habit. A better approach is to use budget tracking software to make virtual savings accounts and place payments every paycheck into them, in step with your budget. The biggest challenge you'll likely face is the initial implementation; if you're saving up for a semi-annual car insurance premium and you've got two months left, that's gonna make things difficult. In the best case scenario you already have a savings account, which you reapportion among your various lumpy expenses. This does mean you need to plan when it is you will actually buy that shiny new Macbook Pro, and stick to it for a number of months. Much more difficult than buying on credit. Especially since these retailers hate dealing in cash.",
"title": ""
},
{
"docid": "de221977a5faed5782a2a51442850873",
"text": "Banks work pretty hard to make themselves a big part of your life with bill pay, auto-deposit, loans and other services. You need to carefully unwind each one and be on the lookout for fees. If you close a savings account, will your checking account suddenly have fees? If you stop auto deposit, will there suddenly be a fee? Do you have a business that deposits money? A Google Ad sense account? PayPal or the equivalent? These all might be tied to your bank accounts. Wait a couple of months, leaving enough cash in the old back to prevent fees if possible. If two months go by and there isn't any activity on the account, you can probably close it. After you are sure all the written checks have cleared, go to the back and get a counter check for the balance of the account. You could alternately just write yourself one more check for the remaining balance and call the bank to close the account. You could electronically transfer the funds if you wanted too. HOWEVER, it is important to be careful of the timing, the last thing you want to do is write a check or transfer the money after the account is closed. (per Dilip Sarwate) If you do the check and phone call thing, make sure you do it in a short enough period of time that you don't incur a fee. Having and closing regular bank accounts won't have any tax implications in the US.",
"title": ""
},
{
"docid": "29079941bcf673433726120d468485ea",
"text": "If you have multiple accounts, you have to empty them all before you can deduct any losses. Your loss is not a capital loss, its a deduction. It is calculated based on the total amount you have withdrawn from all your Roth IRA's, minus the total basis. It will be subject to the 2% AGI treshhold (i.e.: if your AGI is > 100K, none of it is deductible, and you have to itemize to get it). Bottom line - think twice. Summarizing the discussion in comments: If you have a very low AGI, I would guess that your tax liability is pretty low as well. Even if you deduct the whole $2K, and all of it is above the other deductions you have (which in turn is above the standard deduction of almost $6K), you save say $300 if you're in 15% tax bracket. That's the most savings you have. However I'm assuming something here: I'm assuming that you're itemizing your deductions already and they're above the standard deduction. This is very unlikely, with such a low income. You don't have state taxes to deduct, you probably don't spend a lot to deduct sales taxes, and I would argue that with the low AGI you probably don't own property, and if you do - you don't have a mortgage with a significant interest on it. You can be in 15% bracket with AGI between (roughly) $8K and $35K, i.e.: you cannot deduct between $160 and $750 of the $2K, so it's already less than the maximum $300. If your AGI is $8K, the deduction doesn't matter, EIC might cover all of your taxes anyway. If your AGI is $30K, you can deduct only $1400, so if you're in the 15% bracket - you saved $210. That, again, assuming it's above your other deductions, which in turn are already above the standard deduction. Highly unlikely. As I said in the comments - I do not think you can realistically save on taxes because of this loss in such a manner.",
"title": ""
},
{
"docid": "e92a5e3cfe7db5a782b9931710ff389d",
"text": "\"You might find some of the answers here helpful; the question is different, but has some similar concerns, such as a changing economic environment. What approach should I take to best protect my wealth against currency devaluation & poor growth prospects. I want to avoid selling off any more of my local index funds in a panic as I want to hold long term. Does my portfolio balance make sense? Good question; I can't even get US banks to answer questions like this, such as \"\"What happens if they try to nationalize all bank accounts like in the Soviet Union?\"\" Response: it'll never happen. The question was what if! I think that your portfolio carries a lot of risk, but also offsets what you're worried about. Outside of government confiscation of foreign accounts (if your foreign investments are held through a local brokerage), you should be good. What to do about government confiscation? Even the US government (in 1933) confiscated physical gold (and they made it illegal to own) - so even physical resources can be confiscated during hard times. Quite a large portion of my foreign investments have been bought at an expensive time when our currency is already around historic lows, which does concern me in the event that it strengthens in future. What strategy should I take in the future if/when my local currency starts the strengthen...do I hold my foreign investments through it and just trust in cost averaging long term, or try sell them off to avoid the devaluation? Are these foreign investments a hedge? If so, then you shouldn't worry if your currency does strengthen; they serve the purpose of hedging the local environment. If these investments are not a hedge, then timing will matter and you'll want to sell and buy your currency before it does strengthen. The risk on this latter point is that your timing will be wrong.\"",
"title": ""
},
{
"docid": "a44357a6b5943b6df883337c72a62eb3",
"text": "Basically you need to use a time-value-of-money equation to discount the cashflows back to today. The Wikipedia formula will likely work fine for you, then you just need to pick an effective interest rate to use in the calculation. Run each of your amounts and dates though the formula (there are various on-line calculators to pick from, and sum up the values. You did not mention your location or jurisdiction, but a useful proxy for the interest rate would be the average between the same duration mortgage rate and fixed-deposit rate at your bank; it should be close enough for your purposes - although if an actual lawsuit is involved and the sums high enough to have lawyers, it might be worth engaging an accountant as well to defend the veracity of both the calculation and the interest rates chosen.",
"title": ""
},
{
"docid": "20c9e9ae8c397b3bcdda3a75e314265a",
"text": "You can write industry loss warrants. This is the closest thing I’ve found since I’ve been interested in this side of the ILS trade. Hedge funds and asset managers can do this. From what I understand it’s you selling the risk. Want to start a fund? 🤔",
"title": ""
},
{
"docid": "b8f51c43a5fa771837a820a123c39f00",
"text": "In the United States taxes on the sale of a principal residence are based on the difference between the sale price and the cost of the home. Assuming you meet the requirements you can shelter 250,000 or 500,000 of gains from the sale of your principal residence. This calculation is not related to the loan balance. The basic equation is sales price minus purchase price. It get a little more complex because some costs to purchase and sell the home are included in the calculation, or if you made renovations to the house that will increase your costs and decrease your gains. Trying to decrease the loan balance just before selling the house would just be paying yourself that money at the settlement table. It could save you some money on interest between now and settlement but emptying your bank account to save a few bucks doesn't seem worth it. I would also prefer to have the money in the bank to pay for some expenses that will popup getting the house sold, you moving, and the settlement date.",
"title": ""
},
{
"docid": "18709a398b2b7066a205463a07181a42",
"text": "There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.",
"title": ""
},
{
"docid": "aad7d81d0864ae51527e037701783ac4",
"text": "\"Your objectives are contradictory and/or not possible. Eliminating the non-taxable objective: You could divide the $100K in 5 increments, making a \"\"CD ladder\"\" $25K in 3mo CD (or savings a/c) $25K in 6 mo CD $25K in 9mo CD $25K in 1 yr CD or similar structure (6mo also works well) Every maturing CD you are able to access cash and/or invest in another longest maturity CD, and earn a higher rate of interest. This plan also works well to plan for future interest rates hikes. If you are forced to access (sell CD's) ALL the $$$ at any time, you will only lose accrued interest, none of the principal. All FDIC guaranteed. If non-taxable is the highest priority, \"\"invest\"\" in a tax-free money market fund....see Vanguard Funds. You will not have FDIC guarantee.\"",
"title": ""
},
{
"docid": "6f35493317b0fa9767a0827ede4a4505",
"text": "I appreciate it. I didn't operate under selling the asset year five but other than that I followed this example. I appreciate the help. These assignments are just poorly laid out. Financial management also plays on different calculation interactions so it is difficult for me to easily identify the intent at times. Thanks again.",
"title": ""
},
{
"docid": "9261b5cc8faec072e234aace913f48c3",
"text": "@BlackJack does a good answer of addressing the gains and when you are taxed on them and at what kind of rate. Money held in a brokerage account will usually be in a money-market fund, so you would own taxes on the interest it earned. There is one important consideration that must be understood for capitol Losses. This is called the Wash Sale Rule. This rule comes into affect if you sell a stock at a LOSS, and buy shares of the same stock within 30 days (before or after) the sale. A common tactic used to minimize taxes paid is to 'capture losses' when they occur, since these can be used to offset gains and lower your taxes. This is normally done by selling a stock in which you have a LOSS, and then either buying another similar stock, or waiting and buying back the stock you sold. However, if you are intending to buy back the same stock, you must not 'trigger' the Wash Sale Rule or you are forbidden to take the loss. Examples. Lets presume you own 1000 shares of a stock and it's trading 25% below where you bought it, and you want to capture the loss to use on your taxes. This can be a very important consideration if trading index ETF's if you have a loss in something like a S&P500 ETF, you would likely incur a wash sale if you sold it and bought a different S&P500 ETF from another company since they are effectively the same thing. OTOH, if you sold an S&P500 ETF and bought something like a 'viper''total stock market' ETF it should be different enough to not trigger the wash sale rule. If you are trying to minimize the taxes you pay on stocks, there are basically two rules to follow. 1) When a gain is involved, hold things at least a year before selling, if at all possible. 2) Capture losses when they occur and use to offset gains, but be sure not to trigger the wash sale rule when doing so.",
"title": ""
}
] |
fiqa
|
b7e1cc77f3433f2d12ffc3db3129bbb8
|
Old Cancelled Cards
|
[
{
"docid": "e05a4fe9b8fc3d695a78129c4107f782",
"text": "\"FICO 08, a newer fico formula that many lenders are simultaneously switching to now, ignores artificially lengthened credit history/score by piggybacking. So don't feel left out in that regard. Average age of accounts is affected when closed accounts fall off your credit report, which can take 7 years, not just by closing them. But I'm not familiar with the latest \"\"weightings\"\" of these things, so its tough to say how significant it will be when that happens. There are also newer FICO formulas, that may become relevant 7 years from now, so it is definitely something to be conscious of but they aren't immediately consequential, since you can do other things to improve your credit worthiness in the near term.\"",
"title": ""
},
{
"docid": "59f95209b0e06624011debe520328886",
"text": "Closed accounts are used when calculating Average Age of Accounts (AAoA) by FICO. They will drop off your report 7 years after their closure, at which time your AAoA will decrease and most likely lower your credit score. Keeping your oldest card with an annual fee (AF) is a tough question. Since the exact calculations are a secret, it's hard to quantify the value of that card. Keep in mind that if you do decide to close it now (or right before the next AF) it will continue to count for the next 7 years. What you can do is the following: Assume you won't be applying for any new cards in the next 7 years. Look at all your current accounts and calculate the AAoA of all of them that would still be on your report 7 years from now. Calculate it with and without your oldest card. The difference will show you the effect closing the card today will have. There is a potential way to raise your AAoA depending on if you have an AMEX card. AMEX reports all accounts as being open from your original 'member since' date. If your oldest AMEX (ever, not necessarily still open) is older than your AAoA, opening a new AMEX will actually raise your average. age of accounts is 15% of your score. note that some websites that calculate your AAoA for you (like creditkarma) don't count closed accounts, but since FICO does the age those websites generate should be ignored.",
"title": ""
}
] |
[
{
"docid": "312d32a49042514a7405bb87a35c97c5",
"text": "I disagree with the reply. Your both impressions are correct. - Do not close old credit cards because they keep your credit rating high (fico score) - Also low utilization that credit cards report to credit rating companies, improves your rating.",
"title": ""
},
{
"docid": "c6b6c0b21e83c57a3b62918af7f3f1bf",
"text": "\"* Don't underestimate the power of facial recognition wizardry. * No, you don't have to show ID to activate the cards. But keep in mind that they know which cards were activated. There is a paper trail. I'm sure Amex, Visa, MC would happily deactivate the cards for them. Target just has to report that the cards were activated using fraud/theft. * If you took advantage of this \"\"deal\"\" your best bet is to get the prepaid credit cards and spend the money asap at another store (walmart) before they are deactivated. * If indeed this legally is considered fraud, and they go after you for it, you could end up in a giant heap of trouble as many laws have been broken. And, if you use any of the \"\"fraudulent\"\" CC's to make online purchases from a company in another state you could face even more federal charges.\"",
"title": ""
},
{
"docid": "152bce31f100c4365a41371310349a51",
"text": "There is no central government signature database. (at least not in the US, and at least not yet) For debit and credit card transactions, the merchant may check the signature on your reciept against the signature on back of the card. This is intended to verify that you didn't steal the card. So, if you want to change the signature on the back of the card, all you need to do is get a new card and re-sign it. Your card has an expiration date. When that happens, you will get a new card to re-sign. If your card expires soon, you can just wait. If you are impatient, you can call your bank and ask for a new card. If they give you a lot of grief about issuing a new card (it is an unusual request), you can tell them you lost your card and need a new one. In that case they will typically disable the old card and issue a new one with a new account number. Note that if you want to change how you sign your name, there are some other places you should also update: Also, keep in mind that people's signatures naturally drift over time. This fact is generally understood and accepted by people who check signatures.",
"title": ""
},
{
"docid": "b8843fe9bca74bcb7d197cc97362eaae",
"text": "I found a german article describing the legal situation in Germany. To summarize As outlined by the many possible reasons in the other answer, it is unclear from the information I have, whether condition 1 holds. Also condition 2 may not hold since the credit card was frozen. I suppose this makes a good argument to MasterCard and my bank, but I also suspect they will not care unless it comes with a attorney letterhead.",
"title": ""
},
{
"docid": "cc7a3cd55d51deccd6a27bbb688ac464",
"text": "Closing your oldest revolving account will lower your average age of accounts and hurt your score. No ifs, ands, or buts. The amount it drops is hard to tell, and it may only be a few points if your other cards are fairly old as well. While the FICO scoring algorithm is proprietary and hard to predict, you can use the official FICO Simulator to estimate the impact. Based on the information you provided (5+ cards, oldest card 5 years), your estimate is 750-800. Performing the same estimate and only changing the number of cards and age (2-4 cards, oldest card 2-4 years), the score estimate drops to 735-785. Both of these estimates assume you have 9% or less utilization. You can probably estimate that your score will drop at least 15 points. However, it may not matter to you whether your score is maximized. Once you get above a certain FICO score, it doesn't matter. For example, I recently refinanced a vehicle and asked the loan officer about their lowest APR, and found out that they required a 780 FICO for it. Kind of like the difference between getting a 91 or a 99 in a class, an A is an A. Some other factors you may want to consider before you make your choice:",
"title": ""
},
{
"docid": "b6a5b721c327a0d35b1355a9613412b9",
"text": "I went there as a last resort for a few items a week ago. They had some promotion going on where spending so much money got you a $5 gift card. The thing expired a few days later. Sure, I could have looked on the card, but the ads for that and the cashier never mentioned this. And since when do giftcards expire?",
"title": ""
},
{
"docid": "3ed0701b49eb83aaf28ee43892e06062",
"text": "I don't think you should have to cancel your card. Call your customer service line and just indicate to them what has happened. You aren't getting service for what they are charging you and they are refusing to remove it themselves.",
"title": ""
},
{
"docid": "e5b63dc46b6e81d8bdd8fe36de934a5b",
"text": "Recently, over 11 lakh PAN cards has been deactivated by the Income Tax Department to fetch out fake and duplicate PANs. The main targets are the individuals who are having multiple PAN cards and those with PAN cards issued under fake documents. Blocking fake PAN cards can help the government restrain identity theft and purchase of benami properties.",
"title": ""
},
{
"docid": "9ca7447f38a27e878762e5755e08b164",
"text": "You will need to first try and get the seller to refund. (Get the name of the person you talked to and a date and time). Then you can contact the bank the card was issued through and dispute the charge. I would make sure that you retain any proof that you purchased one item and received something other than what you purchased. The seller does have recourse if they did fulfill their side of the transaction but if they are a legitimate merchant and actually sent you the wrong product most will not bother.",
"title": ""
},
{
"docid": "1a914e12c374ee70e913e72ea1fc9d9e",
"text": "There may be issue if you need a replacement card, as the bank may not be willing to post the card to you outside of the UK.",
"title": ""
},
{
"docid": "7bfa0d3c95302ce39cc3ed6fcf02b429",
"text": "Hits to your credit rating for canceling one of the newer cards will be a small hit for a few months. You do have some options. I also believe that a person with good credit should have multiple cards: I like having a cash back card for the majority of our transactions. Unfortunately that card isn't accepted everywhere, so I have two other cards with broad market coverage to make sure we always have an option if the vendor doesn't take the main card. Also having multiple cards makes sure that if there is an issue with one card you are never caught without a card. One time the main card was rejected by a gas station because my wife just used the same account to buy gas across town. When we got home their was a fraud alert message on our phone.",
"title": ""
},
{
"docid": "cee2f6ca79d788f239484db00eff466d",
"text": "\"Did you even read the article? These were people who went into the store and did this in person. there are no \"\"orders\"\" to cancel. As for invalidating the cards, again, the article stated that many people took the Target gift cards and used them to buy Amex and Visa gift cards. tl;dr **RTFA**\"",
"title": ""
},
{
"docid": "b0c63f8ceefa08c9cd94e5324d84bd46",
"text": "\"Having worked in the financial industry, I can say 9:10 times a card is blocked, it is not actually the financial industry, but a credit/credit card monitoring service like \"\"Falcon\"\" for VISA. If you have not added travel notes or similar, they will decline large, our of country purchases as a way to protect you, from what is most likely fraud. Imagine if you were living in Sweden and making regular steady purchases, then all of a sudden, without warning your card was used in Spain. This would look suspicious on paper, even it was obvious to you. This is less to do with your financial institution, and more to do with increased fraud prevention. Call your bank. They will help you.\"",
"title": ""
},
{
"docid": "6deab0b0a73d54fc96fce6a32d886ccb",
"text": "I'm not a lawyer, and am certainly not familiar with your jurisdiction, but the general guidelines I've seen around this kind of situation are: If all else fails, you could just cancel the card, though I'm not sure what liability you have to honour the contract. I cancelled a card once to stop being charged by a particularly annoying company and had no problems, but I'm not sure if that is a good way to deal with it in general.",
"title": ""
},
{
"docid": "76fe6db5439db6d14ae920967b308364",
"text": "You're right to keep the oldest one. That's an asset to your credit rating. Since you're already responsible with your credit, a dip in your credit rating doesn't really matter unless you're looking for another loan, like a mortgage. I personally like the cash-back rewards because they're the most flexible, so you have a good thing going with that card. Do those reward cards give you perks on all of your purchases? If they do, then look carefully to see if you can do noticeably better with another card. If not, it may not really be worth it. Regarding cancelling one of the cards, I wouldn't, and here's why. Your cards can get compromised, and sometimes more than one gets compromised at the same time. I was glad that I had three cards, because two of them got hit the same day. Hence, having three cards hit on the same day is possible, and you'll be glad that you have the fourth.",
"title": ""
}
] |
fiqa
|
3542f6789b73b3f8e954bde58309eedb
|
Is being a landlord a good idea? Is there a lot of risk?
|
[
{
"docid": "0df0a1f4b9861df3f5e5942a2b3e3c49",
"text": "\"Risk is the capital you have staked in pursuit of profit. The danger is that you lose what you have risked. For some bets (risks), you can get insurance to cover for losses. Now the \"\"game\"\" of Landlord and Tenant requires you to play fully by the rules set forth by your legislators. In your case, that is the legislators of the State of Texas. Without knowing those rules, you could be liable (open to civil prosecution) for violating those rules. Tenants could be savvy to those rules or savvy enough to hire someone, a lawyer, who knows those rules. As well, in the game of Landlord and Tenant, you must ascertain the creditworthiness of your would-be tenant. If the tenant fails to pay rent, that tenant can detain the residence. You will incur additional outlays to gain possession of your property (ownership in your rental). Now the game of Landlord vs Landlord is different. You can't pick up houses easily enough and even if you could, likely the expense of doing so could wipe out any would profits from having the house as a rental. So, in Landlord vs Landlord, you get constrained by where your rental sits. Thus you must forecast what will the neighborhood look like in five, ten, fifteen years.\"",
"title": ""
},
{
"docid": "b9f5db1855fefd4857a5cc47e7f16cc4",
"text": "\"I have been a landlord in Texas for just over 3 years now. I still feel like a novice, but I will give you the benefit of my experience. If you are relying on rental properties for current income versus a long term return you are going to have to do a good job at shopping for bargains to get monthly cash flow versus equity growth that is locked up in the property until you sell it. If you want to pull a lot of cash out of a property on a regular basis you probably are going to have to get into flipping them, which is decidedly not passive investing. Also, it is easy to underestimate the expenses associated with rental properties. Texas is pretty landlord friendly legally, however it does have higher than usual property taxes, which will eat into your return. Also, you need to factor in maintenance, vacancy, tenant turnover costs, etc. It can add up to a lot more than you would expect. If you are handy and can do a lot of repairs yourself you can increase your return, but that makes it less of a passive investment. The two most common rules I have heard for initially evaluating whether an investment property is likely to be cash flow positive are the 1% and 50% rules. The 1% rule says the expected monthly rent needs to be 1% or greater of the purchase price of the house. So your hypothetical $150K/$10K scenario doesn't pass that test. Some people say this rule is 2% for new landlords, but in my experience you'd have to get lucky in Texas to find a house priced that competitively that didn't need a lot of work to get rents that high. The 50% rule says that the rent needs to be double your mortgage payment to account for expenses. You also have to factor in the hassle of dealing with tenants, the following are not going to happen when you own a mutual fund, but are almost inevitable if you are a landlord long enough: For whatever reason you have to go to court and evict a tenant. A tenant that probably lost their job, or had major medical issues. The nicest tenant you ever met with the cutest kids in the world that you are threatening to make homeless. Every fiber of your being wants to cut them some slack, but you have a mortgage to pay and can't set an expectation that paying the rent on time is a suggestion not a rule. or the tenant, who seemed nice at first, but now considers you \"\"the man\"\" decides to fight the eviction and won't move out. You have to go through a court process, then eventually get the Sheriff to come out and forcibly remove them from the property, which they are treating like crap because they are mad at you. All the while not paying rent or letting you re-let the place. The tenant isn't maintaining the lawn and the HOA is getting on your butt about it. Do you pay someone to mow the grass for them and then try to squeeze the money out of the tenant who \"\"never agreed to pay for that\"\"? You rent to a college kid who has never lived on their own and has adopted you as their new parent figure. \"\"The light in the closet went out, can you come replace the bulb?\"\" Tenants flat out lying to your face. \"\"Of course I don't have any pets that I didn't pay the deposit for!\"\" (Pics all over facebook of their kids playing with a dog in the \"\"pet-free\"\" house)\"",
"title": ""
},
{
"docid": "007fb63be456236692b786f481554eca",
"text": "If you are able to buy a 150K home for 50K now that would be a good deal! However, you can't you have to borrow 100K in order to make this deal happen. This dramatically increases the risk of any investment, and I would no longer classify it as passive income. The mortgage on a 150K place would be about 710/month (30 year fixed). Reasonably I would expect no more than 1200/month in rent, or 14,400. A good rule of thumb is to assume that half of rental revenue can be counted as profit before debt service. So in your case 7200, but you would have a mortgage payment of 473/month. Leaving you a profit of 1524 after debt service. This is suspiciously like 2K per year. Things, in the financial world, tend to move toward an equilibrium. The benefit of rental property you can make a lot more than the numbers suggest. For example the home could increase in value, and you can have fewer than expected repairs. So you have two ways to profit: rental revenue and asset appreciation. However, you said that you needed passive income. What happens if you have a vacancy or the tenant does not pay? What happens if you have greater than expected repairs? What happens if you get a fine from the HOA or a special assessment? Not only will you have dip into your pocket to cover the payment, you might also have to dip into your pocket to cover the actual event! In a way this would be no different than if you borrowed 100K to buy dividend paying stocks. If the fund/company does not pay out that month you would still have to make the loan payment. Where does the money come from? Your pocket. At least dividend paying companies don't collect money from their shareholders. Yes you can make more money, but you can also lose more. Leverage is a two edged sword and rental properties can be great if you are financial able to absorb the shocks that are normal with ownership.",
"title": ""
},
{
"docid": "122d68290fbabfe0f17c8406271bf9f1",
"text": "Based on what you've said I think buying a rental is risky for you. It looks like you heard that renting a house is profitable and Zillow supported that idea. Vague advice + a website designed for selling + large amounts of money = risky at the very least. That doesn't mean that rental property is super risky it just means that you haven't invested any time into learning the risks and how you can manage them. Once you learn that your risk reduces dramatically. In general though I feel that rental property has a good risk/reward ratio. If you're willing to put in the time and energy to learn the business then I'd encourage you to buy property. If you're not willing to do that then rentals will always be a crap shoot. One thing about investing in rental property is you have the ability to have more impact on your investment than you do dropping money in the stock market which is good and bad.",
"title": ""
},
{
"docid": "bf6d612e979609c1cd11106e9f1d1353",
"text": "\"Rather than thinking of becoming a landlord as a passive \"\"investment\"\" (like a bank account or mutual fund), it may be useful to think of it as \"\"starting a small part-time business\"\". While certainly many people can and do start their own businesses, and there are many success stories, there are many cases where things don't work out quite as they hoped. I wouldn't call starting any new business \"\"low risk\"\", even one that isn't expected to be one's main full-time job, though some may be \"\"acceptable risk\"\" for your particular circumstances. But if you're going to start a part-time business, is there any particular reason you'd do so in real estate as opposed to some other activity? It sounds like you'd be completely new to real estate, so perhaps for your first business you're starting you'd want it to be something you're more familiar with. Or, if you do want to enter the real estate world (or any other new business), be sure to do a lot of research, come up with a business plan, and be prepared for the possibility of losing money as with any investment or new business.\"",
"title": ""
},
{
"docid": "a0cd7730d095a4ebac6e95aabb354f31",
"text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying).",
"title": ""
}
] |
[
{
"docid": "8235e95dbdf4a3ee49fa95b34de43948",
"text": "The main point to consider is that your payments toward your own home replace your rent. Any house or apartment you buy will have changes in value; the value is generally going slowly up, but there is a lot of noise, and you may be in a low phase at any time, and for a long time. So seeing it as an investment is not any better than buying share or funds, and it has a much worse liquidity (= you cannot as easily make it to cash when you want to), and not in parts either. However, if you buy for example a one-room apartment for 80000 with a 2% mortgage, and pay 2% interest = 1600 plus 1% principal = 800, for a total of 2400 per year = 200 per month, you are paying less than your current rent, plus you own it after 30 years. Even if it would be worth nothing after 30 years, you made a lot of money by paying half only every month, and it probably is not worthless. You need to be careful not to compare apples with oranges - if you buy a house for 200000 instead, your payments would be higher than your rent was, but you would be living in your house, not in a room. For most people, that is worth a lot. You need to put your own value to that; if you don't care to have a lot more space and freedom, the extra value is zero; if you like it, put a price to it. With current interest rates, it is probably a good idea for most people to buy a house that they can easily afford instead of paying rent. The usual rules should be considered - don't overstretch yourself, leave some security, etc. Generally, it is rather difficult to buy an affordable house instead of renting today and not saving a lot of money in the process, so I would say go for it.",
"title": ""
},
{
"docid": "dd3b478a6bdb1e7a8d291a965d3ca2fc",
"text": "Others have already made good points, so I'll just add a few more: You say that if you bought it, your mortgage, insurance, and taxes minus the rental income from the bottom floor would leave you with costs of 1/4 of your current rent. That means you're getting a fantastic deal on the purchase price. I suspect you may be underestimating some of those costs. So, get exact figures on the mortgage, insurance and taxes and do the math. If it is that good, go for it, just make sure to get that home inspection (in case there's major problems and they're trying to get out while the gettin's good) Also, some advice: Be prepared to cover that entire monthly cost for a few months. Units can stand empty for a while. Also, you may want to rent out slowly - a good tenent found after a couple months is much better than a bad tenent found quickly. Also, have some money set aside for maintenence. As a renter, you've never really had to think about that before, but as a homeowner you do. As a landlord, it's even more important - you can not fix something in your own home for a while if you needed to wait, but in a tenent unit, you have to fix it immediately. Finally, taxes: You do get to deduct interest, and so on, but it'll work a little differently than you think. You'll have to split it in half (if the units are the same size) and deduct half the interest as a normal homeowner deduction, the other half as a business expense. Same for PMI, insurance, and property taxes. If you do maintenance that effects both units, like fixing the roof, half will be deductible, the other half not. However, maintenance that only affects the tenant unit is fully deductible. You can claim depreciation, but only for half. So, your starting amount you can depreciate would be (purchase price - land value)/2. Same thing here - half is your home, the other half is a business. Note that some things you'd think of as maintenance costs actually can't be deducted, only depreciated over time. Take that leaky roof, for example. If you replaced it instead of repairing it, you could not deduct your replacement costs. It counts as an improvement, and gets added to your cost-basis, where you depreciate it along with (half!) the house. If your tenant's refrigerator went out, and you replaced it, you couldn't deduct that either. However you can depreciate all of it on another schedule (seperate from home depreciation). If you repaired it instead, you can deduct all of it immediately. Taxes suck.",
"title": ""
},
{
"docid": "8b1fab0201547303074c21b705a07b20",
"text": "Even selling isn't riskless. Sure, your house has gained value-- but unless that's due to improvements you made to it, every other house in the neighborhood you might buy has gained value too, so moving might not result in extracting any net value. This is one of the reasons I keep reminding folks that a house is not an investment. It can be a business, if you're renting it out. But if you're occupying it, it is simply housing. If you are lucky you'll make a profit if and when you sell it, but don't count on that. It does store value, but except for taking loans against that it's had to access that value. And lower loan rates than you'd otherwise pay are not a huge value when you'd save more if you don't borrow at all. The only use I'm making of my house's value is that by taking a very-low-rate mortgage when I could have paid cash I was able to leave more money in my investments -- arguably the safest leveraged investment possible.",
"title": ""
},
{
"docid": "9d9403bb9d1a39b292f8692b5bc67126",
"text": "\"Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The \"\"happy path\"\" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is \"\"collectable\"\"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of \"\"spidey-sense\"\" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.\"",
"title": ""
},
{
"docid": "4ac2c64ce70259bde39978411a151518",
"text": "\"with 150K € to invest to \"\"become a landlord\"\" you have several options: Pay for 100% of one property, and you then will make a significant percentage of the monthly rent as profit each month. That profit can be used to invest in other things, or to save to buy additional properties. At the end of the 21 years in your example, you can sell the flat for return of principal minus selling expenses, or even better make a profit because the property went up in value. Pay 20% down on 5 flats, and then make a much a smaller profit per flat each month due to the mortgage payment for each one. At the end of the 21 years sell the flats. Assuming that a significant portion of the mortgage is paid off each flat will sell for more than the mortgage balance. Thus you will have 5 nice large profits when you sell. something in between 1 and 5 flats. Each has different risks and expenses. With 5 rental properties you are more likely to use a management company, which will add to your monthly cost.\"",
"title": ""
},
{
"docid": "47cea5f4c2bd6ef611d52e55975e7338",
"text": "I have done something similar to this myself. What you are suggesting is a sound theory and it works. The issues are (which is why it's the reason not everyone does it) : The initial cost is great, many people in their 20s or 30s cannot afford their own home, let alone buy second properties. The time to build up a portfolio is very long term and is best for a pension investment. it's often not best for diversification - you've heard not putting all your eggs in one basket? With property deposits, you need to put a lot of eggs in to make it work and this can leave you vulnerable. there can be lots of work involved. Renovating is a huge pain and cost and you've already mentioned tennants not paying! unlike a bank account or bonds/shares etc. You cannot get to your savings/investments quickly if you need to (or find an opportunity) But after considering these and deciding the plunge is worth it, I would say go for it, be a good landlord, with good quality property and you'll have a great nest egg. If you try just one and see how it goes, with population increase, in a safe (respectable) location, the value of the investment should continue to rise (which it doesn't in a bank) and you can expect a 5%+ rental return (very hard to find in cash account!) Hope it goes well!",
"title": ""
},
{
"docid": "a0e307477870f8f3bb1dbe9eead58366",
"text": "\"This can be done, and there have been many good suggestions on things to do and watch out for. But to my shock I don't see anyone offering any words of caution about property managers! Whatever you do, don't assume they have your best interests at heart. Do not assume that \"\"no news is good news\"\" and that if you aren't hearing of problems and are just collecting rent checks, everything must be fine. You can easily end up with tenants you would never have allowed yourself, or tenants with pets that you would not have allowed, etc. Especially if the manager doesn't want you to have a vacancy and potentially lose you as a client, they may very well lower their standards just to get the place occupied. And a year or two or three later, you may find yourself looking at a very large repair bill and wonder how on earth it could have happened when you supposedly had someone looking out for your property! There are quality, ethical property managers out there. They are not all bad to be certain. But whatever you do, check up on them. And with multiple properties - especially if in multiple areas/states etc. - this can be nearly a full time job in itself. As the saying goes, \"\"Trust, but verify\"\". I have never found this to apply more than with rental properties and property management. Don't leave anything significant to them 100%. You can't even assume that a rule like \"\"all expenses over $50 must be cleared by me first\"\", as that can simply mean that they don't bother to come to you for certain kinds of repairs that would cost more than that, or that they just get them \"\"taken care of\"\" by their own person (done poorly, illegally, etc.) and never tell you. Never trust their choice of tenants blindly. Visit the place yourself at least every few months - a quick driveby at a minimum or better if you can, arrange a reason to walk through the house personally. Check the back yard, never assume that the front yard is indicative of anything else. Never assume that a \"\"no pets\"\" rule will be followed, or that tenants wouldn't lie to the management about having pets. Never assume that the tenants won't move additional people into the property as well. Always expect a bare minimum of 1 month vacancy every year, and an additional minimum of 1 month's rental revenue in unexpected maintenance/repairs every year. This is at a minimum! You might do much better than this, and have a high quality tenant in place for years who costs next to nothing in extra maintenance. But do not count on it. Rental real estate investing looks so simple on paper, where it's just numbers. But reality has a very rude habit of surprising you when you least expect it. After all, no one expects the Spanish Inquisition! Good luck!\"",
"title": ""
},
{
"docid": "0ee701d9d24ae6a665c16012f50a5bce",
"text": "\"The flaw in your reasoning is that you are assuming that renting a house is easy and automatic. Who is going to manage the property? Your parents? What are you going to do if the tenants burn the place down, start having drug parties there, or secretly have 6 cats who piss everywhere so noone will ever want to rent it again? What are you going to do when the house goes unrented for a year and you have to pay a year's worth of mortgage payments with no rental income? What are you going to do when some deadbeat decides to stop paying the rent, but won't move out, and when you try to evict him, he goes to court to stop you? You going to fly to NJ to make the court appearances? Unless you sell your existing house, or your parents buy you out, then you need to stay. You should not attempt to own two houses at once with one of the houses located not where you are at. That will not turn out well. Also, just as an aside, 30-year mortgages are not an \"\"investment\"\"; they are a way to lose money. Usually people get them because they want a big beautiful house that they cannot afford, so they borrow the money. That is not \"\"investing\"\", that is wasting money to live in luxurious circumstances. If you want to become wealthy, buy a property you can afford, not something that you have to string out payments for 30 years.\"",
"title": ""
},
{
"docid": "78073fba775581c025e7fb35c48e3db3",
"text": "I don't know enough about taxes and real-state in the Netherlands to be super helpful in determining whether or not a rental property is a good investment. One thing for certain is that there's some risk in spending everything on a rental property. It's wise to have some buffer, an emergency fund of 3-6 months expenses. If things got dire, you'd still need to live somewhere until your tenant was gone, and you'd want to be able to handle any major repairs that crop up. So, even if it is a good idea to buy a rental property, you should probably wait until doing so doesn't leave you without a healthy buffer. As for owning a rental, you described a scenario where you'd get 6% income on your investment each year if there were zero expenses associated with owning the property. Are there property taxes? Is there a monthly cost to maintain the building the apartment is in? Are rental incomes taxed more heavily than other investment income? Just be aware of the full financial picture before deciding if it's a worthwhile investment.",
"title": ""
},
{
"docid": "9c6049b7f0f02c8b3d88fd94a38a84ea",
"text": "I kind of hate piling on with another opinion, but this is too long for a comment. I did what you are thinking of doing, I would at least try renting it for a couple years so long as: The primary risks of renting are mostly related to unexpected costs and bad tenants, you've got a very healthy income, so as long as you maintain a nice emergency fund it doesn't sound like keeping this property as a rental will be too much risk. If the rental market is strong where your house is, then you have a better chance of avoiding bad tenants. I like to keep my rent a little lower than the max I think it could go for, to attract more applications and hopefully find someone who will be a good longer term tenant. Tax-free gains So long as you lived in your house 2 of the last 5 years, you can sell without paying capital gains tax on your profit, so you could try renting it for 2 years and then sell. That was a key for me when I converted my first house to a rental. I liked that flexibility, there's still the typical renting risks associated, but it's not a lifelong commitment. You can get 2 years of increased equity/appreciation tax-free, or you could find you enjoy it and keep it for the long haul.",
"title": ""
},
{
"docid": "1ee88fd98cd2abe4b12e83221dbe5fa1",
"text": "One lender's explanation of getting permission to rent out. The implication is that it is straightforward with a 1% extra interest to pay. However, there is no guarantee that permission would be given, so there might be a risk. http://www.nationwide.co.uk/support/support-articles/manage-your-account/letting-your-property/letting-your-property-overview Definitely renting out a property with a residential mortgage is not a good idea.",
"title": ""
},
{
"docid": "34b8238b9b341a369a39f1f688b488d3",
"text": "\"If you don't plan to stay in it, it is never good money to try to buy a house in a bad neighborhood. The question you want to be asking is probably \"\"Is it smart to buy this piece of real estate,\"\" not \"\"is it smart to buy a house in college.\"\" In this case, it's probably not smart because you won't actually have revenue from the property (you'll break even compared to renting), you may face some expensive repairs (water heater or other appliances going out, etc.), and you may find that your startup costs in things like lawn mowers, etc. is not worth the hassle (or cost of lawn service if you have someone else do it.) On top of that, can you get a loan with your proven income and assets? Don't forget to factor the cost of selling the house again into it -- and how long can you leave it on the market after you move out if it doesn't sell without going bankrupt yourself? In my opinion, it'd be a giant albatross around your neck.\"",
"title": ""
},
{
"docid": "01d3e1811cf23bedaf7fb10e5489eacc",
"text": "As Andy T says, it is very common for landlords to have a residential mortgage (typically capital + interest) on their own home, and a buy-to-let mortgage (typically interest-only) on each rental property that they own. However, before going down this route, you will need to do some homework. Buying and letting a property is covered by a fair amount of legislation and tax rules; and in the last couple of years, the amount of regulation has increased, as has the amount of tax you're likely to pay. Letting a property can be profitable, but you need to do the maths first, and make sure you do everything by the book. Using a reputable letting agent, at least for your first tenant, should help avoid common pitfalls. There are a number of good websites on this subject. Note that the rules in England, Wales, Scotland and Northern Ireland are all different, so make sure that you get the right information!",
"title": ""
},
{
"docid": "6f663ad4ec7451b19430e6e659f58d06",
"text": "\"So here are some of the risks of renting a property: Plus the \"\"normal\"\" risk of losing your job, health, etc., but those are going to be bad whether you had the rental or not, so those aren't really a factor. Can you beat the average gain of the S&P 500 over 10 years? Probably, but there's significant risk that something bad will happen that could cause the whole thing to come crashing down. How many months can you go without the rental income before you can't pay all three mortgages? Is that a risk you're willing to take for $5,000 per year or less? If the second home was paid for with cash, AND you could pay the first mortgage with your income, then you'd be in a much better situation to have a rental property. The fact that the property is significantly leveraged means that any unfortunate event could put you in a serious financial bind, and makes me say that you should sell the rental, get your first mortgage paid down as soon as possible, and start saving cash to buy rental property if that's what you want to invest in. I think we could go at least 24 months with no rental income Well that means that you have about $36k in an emergency fund, which makes me a little more comfortable with a rental, but that's still a LOT of debt spread across two houses. Another way to think about it: If you just had your main house with a $600k mortgage (and no HELOC), would you take out a $76k HELOC and buy the second house with a $200k mortgage?\"",
"title": ""
},
{
"docid": "5ba0cb041b117b851d8df5e141460b0b",
"text": "Yep, you need to hire a lawyer and an accountant, honestly. When I was starting my business, I hired one who was BOTH. Not really for cost-savings, though it did save $$$, but it was super convenient and it's nice to have someone knowledgable in both. It totally depends on your area, but don't overthink it or get intimidated. It won't take as much $$$ as you think to hire someone, maybe $500-$1,000 or so upfront, then a small hourly fee probably every month if you need help with sales tax or accounts or whatever... you need to make sure the gov is getting theirs though from day 1 re: taxes, otherwise you're gonna regret it. Much cheaper to get it all in place now.",
"title": ""
}
] |
fiqa
|
679db27438a79da05fb3ac27215bd86d
|
Are account holders with a bank better able to receive a loan from that bank?
|
[
{
"docid": "24e058c484d98223fa47598e0e7487ef",
"text": "\"Banks are businesses, and as such should have the right to refuse service, so they should probably be able to choose one customer over another at will. [I say \"\"should\"\" because business owners protecting themselves against litigation related to discrimination could restrict their freedom as business owners.] However, banks are businesses and if the customers are identical, both will be approved (or not) according to credit records. Does not make sense to approve one person with a given credit record and refuse someone with a similar record. Unless they barely qualify. Since no two credit histories are identical, there are surely edge cases. Finally, if a customer is a long term customer with large deposits and/or significant amounts of business with the bank, the bankers will likely be inclined to do more business.\"",
"title": ""
}
] |
[
{
"docid": "7aaf70524fa96219a7e613e2ad496396",
"text": "Someone online asking for your bank account info never has your best interests at heart. They can send you a check and while it may take a while to really clear, they can't use it to suck money out of your account. Be very cautious.",
"title": ""
},
{
"docid": "5587d59254ae75427a684740897fd2d4",
"text": "Depending what country you are from, there may be better alternatives to transfer money internationally. Opening a bank account is complicated, costs money, and international bank transfers are remarkably expensive.",
"title": ""
},
{
"docid": "d22fad3c8dfc337b41004be3b8faa14e",
"text": "It still does not address the difference in risk between lending to a large bank that must meet reserve requirements and between lending to more risky parties. And is borrowing from BOJ to buy U.S. treasuries a bad thing if there is rate arbitrage?",
"title": ""
},
{
"docid": "5f63fe075eedd9c54fad6c6362c1bb86",
"text": "Usually problems like what you're running into mean that the megabank hasn't finished digesting acquisitions, or they cannot meet some state regulatory issue with the main system. Bank of America is/was like this for a few years -- tellers had access to separate Fleet Bank, BankSouth and BoA systems, but you as customer got stuck when doing seemingly routine transactions. You're probably in a situation where your older accounts are in System A, and the newer ones are in recently acquired System B. You should be able to avoid this problem by opening new accounts at Citibank, or just getting another bank. If you have a good rapport with a branch manager, explain the situation and see if they can do anything. FWIW, Unless you're spending alot of time in Manhattan or travel overseas often, there aren't many advantages to having a Citibank account these days.",
"title": ""
},
{
"docid": "76bc67fb64cb88a385b240a90e7935ac",
"text": "I'd say it's a limitation of your bank. Every bank I've ever used had instant transfers between accounts at the same bank.",
"title": ""
},
{
"docid": "30ad621797b92569cef86bde4d7261c8",
"text": "A bank is putting money on the line for you when they loan you money, which is not something they have to do. Not telling them what you intend to do with the money they are giving you, when asked, is fraud, which if you are caught will put you into very deep trouble.",
"title": ""
},
{
"docid": "5858d724464112478caac78f9f0816bd",
"text": "they may be willing to issue mortgages with smaller deposits, but may take longer to make a decision That cannot be farther from the truth. If you are getting a mortgage on a smaller deposit, you will be paying a higher interest rate. Time to take a decision depends very much on your credit situation, earnings, spending and the amount of loan you want to avail of. advantages and disadvantages compared to banks today Nothing specifically that is obvious. You deposits are guaranteed by FSCS, which is primarily everybody's biggest concern. One thing I did observe was they generally have saving accounts which pay better than the big banks, but that is for one to compare and find out. In ownership structure you own a part of the building society because you are a member by having an account(bank/mortgage) with them. Not the case with a big bank though unless you own any shares. You can make a case for the difference of the big bank's multiple business as compared to a building society.",
"title": ""
},
{
"docid": "3f460441631c071cc6de5bc1b05af296",
"text": "\"If \"\"Bank of America\"\" is truly a hard-and-fast requirement, the best solution is to go to a branch and see what they can do. If they turn you down, it likely can't be done.\"",
"title": ""
},
{
"docid": "03eefa72a1390fb78982f750e40bfd7f",
"text": "Yes. In the US these are called certificates of deposit or savings accounts. Every run-of-the-mill bank offers them. You give the bank money and in return they pay you an interest rate that is some fraction of or (negative) offset from the returns they expect to make from your money. Since most investments that a bank makes (say, loaning money to a local business) are themselves based on some multiple of or (positive) offset from the prime rate, in return the interest rate that they offer you is also mathematically based on the prime rate. You can find lists of banks offering the best returns on CDs or savings accounts at sites like BankRate.",
"title": ""
},
{
"docid": "7eb4b510fda7a993f7bf5e5c027b1bf6",
"text": "The answer lies entirely with how the loan paperwork reads. The way I'd set it up, there's would need to be a large enough downpayment so the bank was willing to offer a loan strictly to the LLC with non-recourse to the members.",
"title": ""
},
{
"docid": "9b37851cc5fb0bc5aee4673672fc4735",
"text": "\"To add in a brief expansion to Portman's complete answer. The payment can also be thought of as compensation for your \"\"switching cost\"\". Obviously it is inconvenient to transfer your account from one bank to another (changing static payments, stationery, that sort of thing). The cash is offered as payment towards that inconvenience. Given the profits that banks make you can think of the $100 in much the same way as a store offering you a 5% discount on your next shopping trip.\"",
"title": ""
},
{
"docid": "81e079f623118c63a7ed8de3064df61d",
"text": "A bank can reject a loan if they feel you do not meet the eligibility criteria. You can talk to few banks and find out.",
"title": ""
},
{
"docid": "c06dd8658a400808f0995c1905f5a6bd",
"text": "This depends on the practise and applications available with the Beneficiary Bank. For a corporate customer, the details are show. For Retail customers they are generally not shown.",
"title": ""
},
{
"docid": "4798cc006c3126a0594e2e93fe22ef11",
"text": "Allowing others to share access to your Bank Account; i.e. giving then the login id and password has its risks;",
"title": ""
},
{
"docid": "2e6605b11a1b8e9e680ae37491a92018",
"text": "I'd add that bigger banks tend to have experience doing more complicated things. As an example, my local credit union (~12 offices), simply didn't have the software to wire money to a Canadian bank, as where Chase did. The Canadian routing number wasn't in the format of a US institution, and their software user interface just didn't allow for that number to be entered. Also, most smaller banks don't have international toll free (in-country) numbers for foreign access. Smaller banks also tend to have less sophisticated business banking tools and experience. If you take a Treasury bond approval to a small bank, they'll generally look at you like you have three heads. So the international side of things is definitely in the favor of big banks; they have a lot more money to dump on services.",
"title": ""
}
] |
fiqa
|
097b44f26b4cd87d2a2ffffbf320a782
|
What is your effective tax rate if you work from home in Montreal for a company in Toronto?
|
[
{
"docid": "05443a44fc8d39a49dbe9480afdcbdce",
"text": "Assuming that you don't own the business, it would seem to apply. The CRA says: If you were a resident of Quebec on December 31, 2016, and you did not have a business with a permanent establishment outside Quebec, your refundable Quebec abatement is 16.5% of the basic federal tax on line 55 of Schedule 1. If you had income from a business (including income you received as a limited or non-active partner) and the business has a permanent establishment outside Quebec, or you were not a resident of Quebec on December 31, 2016, and the business has a permanent establishment in Quebec, use Form T2203, Provincial and Territorial Taxes for 2016 - Multiple Jurisdictions, to calculate your abatement. For people whose income isn't coming from businesses they own, this seems quite clear.",
"title": ""
},
{
"docid": "859a08417e2b5de3fe77ea161e0f7fdc",
"text": "For tax purposes, what matters is your province of residence at December 31st. Quebec Tax abatement therefore applies if you were living in Quebec, regardless of your employer, assuming you are an employee. As for effective tax, your question misses some data and does not quite make sense as effective tax is the result of dividing your total taxes paid after deductions and tax credits by your total income. As such, one cannot tell you your effective tax rate without knowing taxes paid after deductions and tax credits and total income.",
"title": ""
}
] |
[
{
"docid": "1c63acd0b8f3d76f9dd620dc9995123e",
"text": "There are just too many variables here... Will you legally be considered a permanent resident from the moment you move? Will you work from home as a contractor or as an employee? Those are not questions you can answer yourself, they really depend on your circumstances and how the tax authorities will look at them. I strongly encourage you to speak to an advisor. Very generally spoken, at your place of residence you pay taxes for your worldwide income, at the place of your work base (which is not clear if this really would be Turkey) you pay taxes on the income generated there. If it's one and the same country, it's simple. If not, then theoretically you pay twice. However, most countries have double taxation treaties to avoid just that. This usually works so that the taxes paid abroad (in Turkey) would be deducted from your tax debt at your place of residence. But you might want to read the treaty to be sure how this would be in your specific case (all treaties are publicly available), and you should really consider speaking to a professional.",
"title": ""
},
{
"docid": "84da3bf13c478784b8698f72765551b7",
"text": "In theory the integration of taxes make the tax implications of paying salary or dividends equal. This is what happens when you calculate the taxes using a generic tax calculator, however, the theory breaks down in certain cases. If you are earning less than $100k there is very little difference and paying out a salary is usually the better option. In a large stable company the most efficient option is almost always a mix of both. If you are earning more than $100k a year it depends on a number of factors: 1) Are your companies annual earnings over $500,000? In Canada, private companies that earn more than $500,000 annually are taxed at a higher rate than those earning less than $500,000. If the earnings are above $500,000 generally you should reduce the earning to under $500,000 by paying a salary. However, this depends on the province, the other income of the owners are and how much more than $500,000 your company earns. 2) Are you eligible for deductions or benefits only available on earned income? Earned income is income that you have worked for, which does not include dividends. RRSP contribution room, child care expense deductions, CPP, and many other benefits under the CRA rules are only available to people who have an earned income. It is worth taking advantage of these deductions when they are available. 3) Is your company eligible for any tax deductions? The same as with your personal tax deductions and your personal benefits of earning income, having a corporate income is also a benefit. There are a number of tax credits and tax deductions that corporations can take advantage of and when available these should be taken advantage of before paying everything out in salary. Once all these questions are answered the calculation is based on your marginal tax rate and the tax rate of the Corporation. One other reason to have at least a portion of you salary as a dividend is that if you incur capital loss in your corporation you can pass them to your personal taxes. If you were payed 100% in salary this does not work. Other strategies to be more tax efficient: Income splitting (Pay a salary/dividend to yourself, your wife, your children your parents, or anyone you support). Rolling-over property with taxable gains into your private corporation. Buying insurance policies that gives a return of premium or increase your Capital Dividend Account (CDA).",
"title": ""
},
{
"docid": "039519230ab375aea3fdd45fc09a3a49",
"text": "\"The short answer is yes you can, but you have to make sure you do it correctly. If you are employed by a tech company that does contract work at a separate location and you don't get reimbursed by your employer for travel expenses, you can claim the mileage between your home and location B as a business expense, but there's a catch - you have to subtract the mileage between your home and location A (your employer). So if it's 20 miles from your house to your employer (location A), and 30 miles from your house to the business you're contracting at (location B), you can only claim 10 miles each way (so 20 miles total). Obviously if the distance to location B is closer than your employer (location A), you're out of luck. You will have to itemize to take this deduction, by filling out a Schedule A for itemized deductions and Form 2106 to calculate how much of a deduction for travel expenses you can take. Google \"\"should i itemize\"\", if you're unsure whether to take the Standard Deduction or Itemize. Sources:\"",
"title": ""
},
{
"docid": "be8d414a0fd1c029f1c9ad663a449c4d",
"text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US",
"title": ""
},
{
"docid": "8eb1a478c19f1e107212313733892c40",
"text": "From my research it looks like its an income NOT effectively connected with the trade of business. This page has the exact details https://www.irs.gov/individuals/international-taxpayers/effectively-connected-income-eci",
"title": ""
},
{
"docid": "246d520eda4cc69e60ea84b164b15d03",
"text": "Property taxes, at least in Canada, are levied by the municipality or city in which the property is situated. For many cities, it is a significant source of income. Part of the justification from the municipal point of view is that the land is serviced, in that it generally has city services like water, sewer, garbage collection and the like. The taxes also commonly pay for city services like libraries, fire and ambulance. The tax rates vary widely across cities, so where your dream house is located may have a large impact on your overall tax bill. Property tax is more-or-less a government imposed lien on your house. You can be foreclosed on if you are unable to pay. This is a last resort of course, but can and does happen.",
"title": ""
},
{
"docid": "b0c8d3728efd4fd11889096f3baabf9f",
"text": "\"Your wages are an expense to your employer and are therefore 100% tax deductible in the business income. The company should not be paying tax on that, so your double-tax scenario, as described, isn't really correct. [The phrase \"\"double taxation\"\" with respect to US corporations usually comes into play with dividends. In that case, however, it's the shareholders (owners) that pay double. The answer to \"\"why?\"\" in that case can only be \"\"because it's the law.\"\"]\"",
"title": ""
},
{
"docid": "d4f3a2a8b993c08f994759af0f8f852b",
"text": "Wow 35% I never realized that the American corporate tax rate was so high. In my province in Saskatchewan Canada I pay 13%(as the owner of a small corporate business). It's no wonder American corporations want to move. Does it not make more sense to lower the corporate tax rate while reducing loop holes etc... to make the American corporation more competitive. Just my 2c",
"title": ""
},
{
"docid": "445cdd40dc22464b938d568a7275b740",
"text": "According to the US government a percent of your income from all over the world, whether or not any part of it happened in the US. You sold a burger made of US meat on a US bun in a US city? Yeah pay taxes to the US on it. You sell a burger made of Canadian meat on a Canadian bun in a Canadian city? You should pay Canadian taxes. In a reasonable world you should pay US taxes on a single burger and Canadian taxes on a single burger. In the real world you pay Canadian taxes on a single burger and US taxes on two burgers. Unless of course you keep your Canadian income overseas and never bring it to the US. Though you'll have to deal with a million articles about how you are hiding money from the US gov in overseas tax havens.",
"title": ""
},
{
"docid": "202023489078ad72c57b4565606684c3",
"text": "\"Interesting as I am in the exact same situations as yourself. I, in fact, just incorporated. You will be able \"\"save\"\" more in taxes in the end. The reason I put \"\"save\"\" in quotes, is that you don't necessarily save on taxes, but you can defer taxes. The driving factor behind this is that you specify your own fiscal calendar/year. Incorporating allows you to defer income for up to 6 months. Meaning that if you make your fiscal year starting in August or September, for example, you can claim that income on the following year (August + 6 months = February). It allows you to keep the current year taxes down. Also, any income left over at year end, is taxed at 15% (the Corporation rate) rather than the 30-40% personal rate you get with a sole-proprietorship. In a nutshell, with sole-proprietorship, all income is taxable (after write-offs)... in a corporation, you can take some of that income and keep it in the corporation (gives your company a \"\"value\"\"), and is only taxed at 15% - big saving there. I primarily work with US businesses. I am, however, a dual-citizen, US and Canadian, which allowed me as a sole-proprietor, to easily work with US companies. However, as a sole-proprietor or a Corporation, you simply need to get an EIN from the IRS and any US company will report earnings to that number, with no deductions. At year end, it is your responsibility to file the necessary tax forms and pay the necessary taxes to both countries. Therefore you can solicit new US business if you choose, but this is not restricted to corporations. The real benefit in incorporating is what I mentioned above. My suggestion to you is to speak with you CA, who can outline all benefits. Revenue Canada's website had some good information on this topic as well. Please let me know if you need anything else explained.\"",
"title": ""
},
{
"docid": "bfb3bb9c58961c4994b6fef8d7252358",
"text": "I heard that a C-Corp being a one person shop (no other employees but the owner) can pay for the full amount 100% of personal rent if the residence is being used as a home office. Sure. Especially if you don't mind being audited. Technically, it doesn't matter how the money gets where it goes as long as the income tax filings accurately describe the tax situation. But the IRS hates it when you make personal expenses from a business account, even if you've paid the required personal income tax (because their computers simply aren't smart enough to keep up with that level of chaos). Also, on a non-tax level, commingling of business and personal funds can reduce the effectiveness of your company's liability protection and you could more easily become personally liable if the company goes bankrupt. From what I understand the 30% would be the expense, and the 70% profit distribution. I recommend you just pay yourself and pay the rent from your personal account and claim the allowed deductions properly like everyone else. Why & when it would make sense to do this? Are there any tax benefits? Never, because, no. You would still have to pay personal income tax on your 70% share of the rent (the 30% you may be able to get deductions for but the rules are quite complicated and you should never just estimate). The only way to get money out of a corporation without paying personal income tax is by having a qualified dividend. That's quite complicated - your accounting has to be clear that the money being issued as a qualified dividend came from an economic profit, not from a paper profit resulting from the fact that you worked hard without paying yourself market value.",
"title": ""
},
{
"docid": "e8e27a4b56551fae31c63bc242bc2339",
"text": "\"If you sell an asset for more than you paid for it, the excess amount realized is called a capital gain and is generally considered a form of income for tax purposes. Generally, one pays income tax on realized capital gains, unless the sale is exempt—such as the sale of one's principal residence. Capital gains tax can also be avoided or deferred by holding assets in a tax-advantaged investment account like a TFSA or RRSP. When taxable, the effective income tax rate on capital gains income is half the normal rate due to the capital gains inclusion rate. Capital gains income is generally not considered to be employment, \"\"earned\"\", or \"\"working\"\" income. However, individuals who, say, trade stocks frequently and earn a substantial portion of their income that way may have their gains considered employment income and subject to regular income tax instead of the better rate. I suggest you contact Service Canada and ask them about the impact of a one-time sale of personal property that would result in a realized capital gain. While you would owe income tax on the capital gain, it might not have any impact on your disability benefits, because it would not be earned or employment income. You should also check with your private insurer; they may also consider the sale a capital gain and not employment income, however, only they would be able to tell you for sure whether it would have any possible effect on your benefits.\"",
"title": ""
},
{
"docid": "722cfe37451e536106593be9c7467805",
"text": "\"Summary: The corporation pays 33.3% tax on dividends it receives and gets a tax refund at the same rate when it pays dividends out. According to http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/TaxRates/Federal-and-Provincial-Territorial-Tax-Rates-for-Income-Earned-CCPC-2015-Dec-31.pdf the corporate tax rates for 2015 are: According to page 3: The federal and provincial tax rates shown in the tables apply to investment income earned by a CCPC, other than capital gains and dividends received from Canadian corporations. The rates that apply to capital gains are one-half of the rates shown in the tables. Dividends received from Canadian corporations are deductible in computing regular Part I tax, but may be subject to Part IV tax, calculated at a rate of 33 1/3%. If I understand that correctly, this means that a Corporation in Quebec pays 46.6% on investment income other than capital gains and dividends, 23.3% on capital gains and 33.33% on dividends. I'm marking this answer as community wiki so anyone can correct these numbers if they are incorrect. UPDATE: According to http://www.pwc.com/ca/en/tax/publications/pwc-facts-figures-2014-07-en.pdf page 22 the tax rate on taxable dividends received from certain Canadian corporations is 33 1/3%. Further, this is refunded to the corporation through the \"\"refundable dividend tax on hand\"\" (RDTOH) mechanism at a rate of $1 for every $3 of taxable dividends paid. My interpretation is as follows: if the corporation receives $100 of dividends from another company, it pays $33.33 tax. If that corporation then pays out $100 of dividends at a later time, it receives a tax refund of $33.33. Meaning, the original tax gets refunded. Note the first line is for the 2015 tax year while the second link is for the 2014 tax year. The numbers might be a little different but the tax/refund process remains the same.\"",
"title": ""
},
{
"docid": "b0e89d948d1a3eeeb4332ed2e5712a2a",
"text": "Tax Deducted at source is applicable to Employee / Employer [contract employee] relations ... it was also made applicable for cases where an Indian company pays for software products [like MS Word etc] as the product is not sold, but is licensed and is treated as Royalty [unlike sale of a consumer product, that you have, say car] ... Hence it depends on how your contract is worded with your India clients, best is have it as a service agreement. Although services are also taxed, however your contract should clearly specify that any tax in India would be borne by your Indian Client ... Cross Country taxation is an advanced area, you will not find good advice free :)",
"title": ""
},
{
"docid": "9c266a77bcf1b5a8a1322854e2f6c5a9",
"text": "I'm pessimistic about most things, so: They can't REPO the degree and the knowledge, but they can sure REPO the CAR, so pay off the car. My suggestion would be to pay off the vehicle, because no matter what the future holds (good or bad) you will need a vehicle to get around. Although, I recently found out from the comment below that student loans are a recourse debt that won't be forgiven. Not even with bankruptcy. Most collection agencies will take pennies in the dollar for debt, but not with student loans.",
"title": ""
}
] |
fiqa
|
5ecc24777b02c73f468267235995658d
|
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate?
|
[
{
"docid": "2bb927370e4c9c826f2438fd12069a89",
"text": "\"This is another version of an old scam -- \"\"let me have a check deposited in your account because I can't open one for some reason, and I'll share some of the money with you.\"\" Here the scammer is promising to \"\"start a business\"\" with you as a way to gain your confidence and trust. The first danger sign is that you only know this person from online. They are not someone you are friends with in the \"\"real\"\" world. They could be anybody. They used the name of a big company as a way to make what they're doing sound legitimate, but it's all a fraud. They could be depositing a faked Exxon check into your account, which could land YOU in huge trouble. Here's the thing -- The only way Exxon (or any other company) can deposit money in a bank under someone's name is if that person provides the account and routing numbers to an account that already exists. No company can just create an account in another person's name. That's Hollywood movie stuff, but it's not how banking works. To open an account, the bank would need identification on the account holder, so your \"\"friend\"\" already has an account if Exxon has allegedly deposited money. Further, Exxon isn't going to take back money that has already been deposited. In fact, they can't take it back. If the account is in his name, they can't do anything to the account or with the account. This is a situation you should run away from and never look back. Nothing about this story sounds right or legitimate, but this is one of the oldest scams out there since the beginning of the Internet. You would be well advised to stay VERY far away from your supposed friend, because they're anything but your friend. You are being SCAMMED. Don't be a victim. Stop communicating with this person immediately, and DON'T give them any personal information of any kind. They're crooks! I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "d2ea4c3a4655398c909b3000f481479d",
"text": "I know people who work in the gulf and most contracts are of the 14 days on/ 14 days (or so) off flavor. I've never heard of someone being onboard a ship or platform for a year. I bet this is a scam.",
"title": ""
},
{
"docid": "89ee0fe762a157f06af4a1c6c00b3fda",
"text": "100% scam. This is classic of mixing real (Exxon) with fiction. This gives credibility to story. Don't give any thing, there is no damage yet. If you take the bait, there are multiple ways to get money from you.",
"title": ""
},
{
"docid": "e9f1dbf5d857097e9aaf9017f61da980",
"text": "\"A friend since July online and big business talks and trust/money forwards. Usually a question \"\"is this a scam or legitimate?\"\" is hard to answer since obviously scams are modelled after legitimate stories (or they'd easily fail). If there were bookmakers for \"\"scam or legitimate\"\", this one would easily gather odds of 10000:1. The only plausible reason for this to be legitimate would be to defraud the scam-or-legitimate bookmakers. At any rate, Exxon is a large company and has to obey labor laws. They cannot set up operations in a manner where their workers may not have access to their salary for prolonged times without easy remedy. Drop communications immediately, don't open them, don't read them. They hook you with emotional investment. They will redouble efforts if it appears you are slipping out of their reach. Explanations will become more plausible, more pressing, more emotionally charged. You are a big promising fish and they won't let you swim off without a serious struggle to rehook you. Hand your communication so far to law enforcement. That may help with not having to figure this out on your own.\"",
"title": ""
},
{
"docid": "b9e95f0263c2498abb600b9f49150199",
"text": "\"Just one further point to add to what everyone else has said. There are no oil rigs or platforms \"\"off the shores of Liverpool\"\". Liverpool is on the west coast of England, on the oil-free Irish Sea. The UK's oil industry is in the North Sea, to the north-east. Aberdeen would be the correct city.\"",
"title": ""
},
{
"docid": "785f86848488ae1b50df67bca02ee471",
"text": "\"As a woman who was once married to someone who worked offshore in the North Sea, in the Gulf of Mexico, off the coast of Nova Scotia, in fact all over the world...and my husband's rig was contracted through Exxon (by the way, Exxon contracts rigs, but doesn't own any), this is most certainly a scam. Even if you do not believe all the above information, I will tell you this. Offshore oil companies will either have schedules consisting of two weeks on/two weeks off or one month on/one month off. If he is in the Gulf of Mexico, it is almost certainly two weeks on/two off. Which means this \"\"person\"\" who is your \"\"friend\"\" is lying to you, because contract or not, no employer holds any employee on the rig for an entire year. In addition, he can leave the rig anytime he wants to, due to a personal emergency. And no, once a paycheck is deposited in an employee's account, they cannot take it back. LOL!! I would like to see them try!! Don't do this. It will only cause you heartbreak. And since all of the posters recommending that you NOT fall for this POS line of bull have nothing to gain, guess who is telling the truth? It's not your \"\"FRIEND\"\"!\"",
"title": ""
},
{
"docid": "b0a2658de998d12d9dc39a6ad99053ba",
"text": "\"This is not only a scam but it is potentially fraud that may get you in trouble. This \"\"friend\"\" of yours will wire you some money in which you do not know where this money is really from. It's obvious from other answers that his story is fictitious. Thus it is likely that this money was stolen through another scam/hack in which now he wants to wash this money through your bank account. If it turns out that is was stolen, any money you withdrawal for your \"\"cut\"\", will have to be returned and your account will be frozen.\"",
"title": ""
},
{
"docid": "63bcbc146bddda345cf91dbc20cc10e5",
"text": "In many countries it is a legal requirement or in some other way mandatory for the banks to ban the owner(s) of an account to allow a third party to use the account. In some countries if you willing give someone access in this way you get no compensation what so ever and you'll be lucky if they catch the crooks and even luckier if you get any of your money back. Don't forget the possibility of jail time due to the criminal activities going on under your name.",
"title": ""
}
] |
[
{
"docid": "da157099bd7822e78f0992c122a1b165",
"text": "\"Usually services like Western Union or MoneyGram only give the recipient the money, not the information about who and when sent it. But you can verify with them directly. However, for legal/tax reasons, your friend might have to declare that it was a gift, and where it came from. So depending on the country of the destination you might not be able to completely \"\"hide\"\" from the recipient, even if the transfer service technically allows that. In any case, when you transfer the money out from the US you'll have to provide your personal identification and information. Since the USA PATRIOT Act, it is impossible to transact \"\"anonymously\"\" (not sure if it ever was possible in the US, actually).\"",
"title": ""
},
{
"docid": "7aa8f1f8a428385791c57a0123eed623",
"text": "All the items listed are required for International Wire transfer. In wrong hands this info along with other info can cause issues. Most of the times you trust the person with this info and hence is less cause to worry. So the key is if you don't trust, don't give the details. Use alternatives like; Best open an account for receiving funds. Share the details, once the funds are received move it to an account where the details have not been shared. Alternatively paypal or other such services can help.",
"title": ""
},
{
"docid": "cf189bbfcf5cd1c6c0ed854c5b9c2ee9",
"text": "\"This is definitely a scam. My husband was inquiring with a \"\"company\"\" that was offering him to be. Representative for them. He got the same job details but the company was called Ceneo. I did due diligence and found that the real Ceneo has no problems receiving money directly from buyers around the world. The fake company mirrored their website, posted jobs on the net,hoping to \"\"employ\"\" unsuspecting people in the U.S. This is their reply to my husband when he asked the job details. DO NOT GET SCAMMED and held accountable for money laundering.\"",
"title": ""
},
{
"docid": "2a0262bed023fcc3be14a38a1572465b",
"text": "I wonder if your rational thinking is getting confused by the prospects of getting some deposit from that person? He needs, amongst other things : •online access username •online access password Ok, so you have 1000 in your account. They deposit 500 and you are happy. Then they take out all 1500 and you're done :) How can you not think it is a scam when you're giving them your login as well. Here is an analogy. Some stranger asks you for keys of your home (while you're away) and tells you he will just go in place a gift inside your door and go away. Would you give him your keys and come home later expecting a gift to be there and nothing taken away? Is it a scam if the person only wants to deposit into my account, not make a withdrawal? Who is to tell? P.S: Sorry, please don't mind the rest of this answer but from it could also be related to a new relationship that you are in. Going ahead with this might cause you a lot of emotional harm as well. You seemingly trust that person when there are obvious signs that you are being defrauded, possibly in the name of love.",
"title": ""
},
{
"docid": "c6a286121301ab403c1d42fc914feb21",
"text": "Of course, it is a scam. Regardless of how the scam might work, you already know that the person on the other end is lying, and you also know that people in trouble don't contact perfect strangers out of the blue by e-mail for help, nor do they call up random phone numbers looking for help. Scammers prey on the gullibility, greed, and sometimes generosity of the victims. As to how this scam works, the money that the scammer would be depositing into your father's account is not real. However, it will take the bank a few days to figure that out. In the mean time, your father will be sending out real money back to the scammer. When the bank figures out what is going on, they will want your father to pay back this money.",
"title": ""
},
{
"docid": "7f267f8d8189cd55408b9a859789047c",
"text": "Yes. It is a scam. The story makes no sense. They just want your info to steal your money. regarding requests to know how it works: the scammer is requesting: username, password, routing number, checking account number, and security question/answers. they now have access to your bank account. they will have access until you are able to shut it down. Once they have your password, they can change it to whatever they want. it can be used to launder money, steal money from other accounts you have, proof of identity...",
"title": ""
},
{
"docid": "ed7f6e1d3fdc84d50b5109a5767fead5",
"text": "\"The other answers describe why this is highly likely to be a scam. This answer describes why you don't want to get involved, even in the unlikely case that it isn't a scam. I'm describing this using US law (which I'm not particularly familiar with, so if I go astray I'd suggest others fix any flaws in this answer), but most other countries have similar laws as these laws are all implementations of a small number of international treaties have very large memberships. The service you describe (accepting money transfers from one party and transferring them to another) is one which, if you engage in it for profit, would classify you as a \"\"financial institution\"\" under 31 USC 5312, specifically paragraph (a)(2)(R): any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system Because you would be acting as a financial institution: Failure to follow such requirements can lead to a fine of up to $250,000 or a 5 year prison sentence (31 USC 5322). See also: Customer Identification Program and Know Your Customer.\"",
"title": ""
},
{
"docid": "f30a17be73a412245a9ab918311722d7",
"text": "Yes, it is a scam. There is no doubt about it. Never give your bank password to anyone, especially strangers. You will lose your money if you fall for this.",
"title": ""
},
{
"docid": "eff5d5616a66d62ac0f3092c35d49274",
"text": "\"He wants to send me money, as a gift. Do you know this friend? It could easily be a scam. What I don't know is that how much money can he send and what are the taxes that would be applicable in this case? There is no limit; you have to pay taxes as per your tax brackets. This will be added as \"\"income from other sources\"\". I'll probably be using that money to invest in stock market. If the idea is you will make profits from stock market and pay this back, you need to follow the Foreign Exchange Management Act. There are restrictions on transfer of funds outside of India.\"",
"title": ""
},
{
"docid": "0c095c5d16485bc331c95bf1af2efc1e",
"text": "\"If wire transfer through your bank does not work then perhaps one of the more popular money transfer services may be what you are looking for such as MoneyGram or Western Union. Now these rely on a trusted \"\"registered\"\" third party to do the money transfer so you need to make sure that you are working with a legitimate broker. Each money transfer service has a site that allows you to perform the search on registered parties around your area. There are certain fees that are sometimes applied due to the amount being transferred. All of these you will want to do some detailed research on before you make the transfer so that you do not get scammed. I would suggest doing a lot of research and asking people that you trust to recommend a trusted broker. I have not personally used the services, but doing a quick search brought many options with different competitive conversion rates as well as fees. Good luck.\"",
"title": ""
},
{
"docid": "5a9ccf444d4eb3b8616c7c4f4740f705",
"text": "You don't say WHY she wants to give you money. Your paragraph appears to be the very definition of a scam. Run from her.",
"title": ""
},
{
"docid": "c637ae33ac5a8b9e12c776f9efed0358",
"text": "\"I recently received a wire of more than $150K into one of my accounts. (Both sender and receiver accounts are US banking institutions.) My bank never contacted me to ask any questions. However, on my statement I noticed a charge called \"\"Analysis Service Charge\"\". I called the bank to ask them about this charge and was informed it was due to internal analysis for the wire transfer. They did this behind the scenes without needing to contact me. I can only assume that their \"\"analysis\"\" did not turn up anything suspicious, and if it had, perhaps they would have contacted me. I wouldn't worry about it even if you do receive a phone call and they ask a few questions. I'd advise to be completely honest; if you aren't doing anything wrong, you shouldn't have anything to worry about. Most likely they'd be calling you just to make sure you actually know about it and were expecting the money.\"",
"title": ""
},
{
"docid": "338231cbc70b8a243b50a393e02af534",
"text": "\"Here we go again! Why, oh why, would someone just open a bank account in your name with that much money for no good reason? Unless there's a very rich relative in your family tree, this can not come to a good ending. Besides, if this was money being left to you by someone as part of an inheritance, you'd hear from attorneys from the estate. Notwithstanding everything @NickR posted about the details of what makes it suspicious, ask yourself why a banker would contact you by email about an account with this much money in it. The bank would, at the very least, send you a registered/certified letter on official stationery. So what happens here is when you give them your banking information, whoever it is that's doing this will clean out your account, and that's for starters. They will ask for enough information to steal your identity too, and if you have good credit, that'll be gone in a heartbeat. The best scams (meaning the most successful ones) always appeal to peoples' greed, using large amounts of money that just miraculously belong to the victim, if only they'd give a little information to \"\"transfer\"\" the money. Worse yet, most of these scams will come up with some kind of \"\"fee\"\", \"\"tax\"\" or other expense that you have to pre-pay in order to make the transfer happen, so this just adds insult to injury when you find out (the hard way!) you've been scammed. DO NOT reply to the email you received or, if you already have, don't send any more responses. If they think they may have you on the hook then they won't stop trying, and it will become very messy very quickly. THIS IS NOT REAL MONEY! It isn't yours, it doesn't really exist, and all it will do is come to no good end if you go any further with it. Stay safe, my friend.\"",
"title": ""
},
{
"docid": "75c4f6840c9c634feb441c398ad5ac39",
"text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam.",
"title": ""
},
{
"docid": "0d3ed828389e9237b61e3bcfd0b48335",
"text": "This is definitely a scam. I had a friend sign up for a very similar offer and what they did was send a fake check and then asked to transfer the same amount to them. So now you just send them a couple grand and you're holding a fake check.",
"title": ""
}
] |
fiqa
|
45d01c430e6f2c78c84b9598c8fedb87
|
Economics: negative consumer sentiment following failure to upsell
|
[
{
"docid": "154cb6245aee325ab80547c1a4c2849a",
"text": "There are several different participants in the transaction, and you may not be aware of all the issues: In some business (fast food) they are required to ask if you want to super size, they are expected to do this at every transaction, but aren't paid more if you buy more. The employee can also decide that too much pressure to up-sell may push you to purchase the item online. That will cost them a commission, the store location a sale, and maybe drive you to a different company. It is also possible they don't have the training to be able to explain the difference between the items.",
"title": ""
}
] |
[
{
"docid": "4414f0a0fc68c5b95cb31cd937b5e0d0",
"text": "\"This actually works for some products, e.g. people are OK with paying a premium for \"\"fair trade\"\". There are also \"\"buy one give one\"\" programmes where people pay an extra to feel good about their purchase. It works if you have clear marketing.\"",
"title": ""
},
{
"docid": "fa198fe372bf5e515ee638848090d10e",
"text": "Yes it can, assuming that the margins on what you sell can actually support paying for the support staff required to do this properly. If you already sell cheap crap, having good support is pointless. If you're selling quality stuff that people enjoy, then hell yes you need good support.",
"title": ""
},
{
"docid": "d383abc1634ecf42dcf5300f89e058e5",
"text": "Not surprised. This is on the back of several news stories of UK Businesses' complaints about the company. The now infamous stories of how a business was overwhelmed by customers, how the deal was poorly structured, and the most damage revelation that there is rarely an increase in business post-deal.",
"title": ""
},
{
"docid": "8c3ee87ffe4f71b761fa889e40ed282c",
"text": "I think that kind of separates Amazon as a product though (at least during its growth, obviously many companies are trying to compete now). Even though it's still retail, I don't need to spend time, gas, etc to go to the store, and the upsell is worth it. I think a better analogy here is Lyft vs public transit. I can take the bus, it gets me home, but $4 gets me a lyft line there and the convenience is worth the price difference.",
"title": ""
},
{
"docid": "e941cb541e58965fe42c58d6e05ec09e",
"text": "\"That's a pretty good question for a six-year-old! In addition to the good answers which point out that expectations are priced in, let's deny the premises of the question: Sales do not increase the value of a company; a company could be, for example, losing money on every sale. Share prices are (at least in theory) correlated with profits. So let's suppose that company X is unprofitable 320 days a year and is relying upon sales in late November and December to be in the black for the year. (Hence \"\"black Friday\"\".) Carefully examine the supposition of this scenario: we have a company that is so unprofitable that it must gamble everything on successfully convincing bargain hunting consumers in a weak economy to buy stuff they don't actually need from them and not a competitor. Why would this inspire investor confidence? There are plenty of companies that fail to meet their sales targets at Christmas, for plenty of reasons.\"",
"title": ""
},
{
"docid": "a5d94d2180091572ed176a9aa4f77b59",
"text": "i dont think this is cynical at all, Announce you won't do aomething cheap and easy, cause 3 day outrage, reverse course.. Customer feels like their voice will always be heard and its still cheap and easy. Pacifism 101",
"title": ""
},
{
"docid": "a912e43b1aa212bfcbbbe9a218286758",
"text": "Fighting scammers to the point that you drive away a significant volume of customers is cutting off your nose to spite your face. Treating customers like they're acting in good faith and fighting scammers on the back end is the right way to do it. Ebay and Amazon need to step up those back end efforts, though.",
"title": ""
},
{
"docid": "ba430ee51c258438610f3de2e81d74c5",
"text": "There are a lot of outside considerations for why the grocery would be failing. What's her location relative to housing? Big chain stores? Small business competition? Location can make or break a brick and mortar business. (Do you mind pming a link to the site? There could be ways of increasing online sales.)",
"title": ""
},
{
"docid": "4c39f1bdb2a4800bdcd26ebbcf798d1e",
"text": "Chiming in with other answers that incriminate market segmentation attempts, I would like to offer this Seth Godin video where (among other things) he speaks about breakage, the art of making coupon redemption so difficult that most people get it wrong and do not redeem them. Oh, and when comparing/deciding which/whether to buy, I always use the up-front price. Don't want to encourage the wrong behavior.",
"title": ""
},
{
"docid": "9a25ae63179d9b5a919d19144d7fceb1",
"text": "My recent Sears experience was exactly that: depressing. I had an aging Willy Loman-esque sales clerk who begged us to give him good feedback on the survey or he'd get written up. The desperation made me really uncomfortable.",
"title": ""
},
{
"docid": "d548dfab650da351f25dd51212badb2e",
"text": "Sounds like 'up-selling'. You can harden yourself into being a 'tough sell' but it takes time and a lot of shopping. The quickest way to put up a defense is to never ever make a purchase over $100 without 'sleeping on it'. Just walk away, tell them you'll think it over, and go do some more research. Don't go back into a dealership or store that has hit you with guilt or pressure or a crazy price or whatever. Find a no-haggle or no-frills source, or even a source to buy a used version of the item you want.",
"title": ""
},
{
"docid": "e31e7d60e9441a2190b1cd555f49a977",
"text": "No. Empirically no. The issue at hand has little to do with market confidence. This loss of confidence is the effect of the problem. It's cause is the result of a wholly inadequate fiscal transfer mechanism that is incapable of addressing demand shocks. While there are relevant political and ideological parameters worthy of analysis, they render themselves moot because of the structural constraints of monetary union. My two cents.",
"title": ""
},
{
"docid": "a3dd91d6bdcbb96ba3d298a9e1793054",
"text": "No. Supply takes 5yrs to come on line from planting to harvesting. The issue on the supply side has been twofold: 1) vanilla bean prices have been falling for some time so many farmers switched to other crops, 2) 50%+ of all vanilla bean is grown in Madasgar, which experienced a typhoon, which damaged a bunch of the existing crop. On the demand side, people are switching from artificial flavoring to more natural ingredients, which actually taste much better too. So, there's a significant demand/supply imbalance which will utilitmately correct but it could take a long time to do so. My problem is figuring out a viable shorting mechanism as the commodity is not publicly traded and the timeframe is long",
"title": ""
},
{
"docid": "7acc0cc7b924cbf49ca9a80edd4ec788",
"text": "The satisfaction from gains packs less of an emotional impact than the fear of loss. It's very difficult for many people to overcome this fear, so when prices begin to fall, many investors sell to minimize their potential loss. This causes a further drop, which can lead to more selling as other investors reach their emotional threshold for loss. This emotion-based selling keeps the market inefficient in the short term. If there aren't enough value investors waiting to scoop up the stock at the new discount, it can stay undervalued for a long time.",
"title": ""
},
{
"docid": "d1ae446b6658b9fd7ddafba5ac736a69",
"text": "In and of itself it wasn't. But could the ill will it left with the general investing public make people more wary of future IPOs and thus, lower their potential starting points? Thereby leading to a drought of IPOs as companies don't see themselves getting as much.",
"title": ""
}
] |
fiqa
|
b0e36be29f67a363c45510b1fe5dd2fe
|
Should I finance rental property or own outright?
|
[
{
"docid": "a7636e6bc2fd3e6df338ba31d13496e8",
"text": "To answer some parts of the question which are answerable as-is: Yes, mortgage interest is deductible. So is depreciation. See this question and others. It would be a good idea to put some money away for tax season, just as you should save some money to cover unexpected property expenses. But as @JoeTaxpayer says, this is a good problem to have, assuming you own the property, it's low-maintenance, your tenant is good, and your rent is at market levels.",
"title": ""
},
{
"docid": "deb2bff6905ef128e60e380efdfb843f",
"text": "In general you do not want to show a taxable gain on rental properties if you can avoid it. One of the more beneficial advantages of owning cash flowing rental properties, is that the income is tax deferred because of the depreciation. I say deferred, because depreciation affects the cost basis of your property. Also since you are considering financing, it sounds like you don't need the cash flow currently. You usually can get better returns by financing and buying more rental properties, especially with investment mortgages at historical lows (Win via inflation over time)",
"title": ""
}
] |
[
{
"docid": "7afe1fea85b8fbd92dabd49aec409b5d",
"text": "With student loans at 2%, I wouldn't pay a dime over minimum on that, and I certainly wouldn't sell an investment property to pay them off, you can get CD's that beat 2% interest. With the rentals, you could sell the one that isn't performing as well and pay no capital gains tax if you lived in it 2 of the last 5 years (counting 5 years back from sale date). That'd be a nice chunk of money for your down-payment. The risk of using proceeds to buy a different rental property is that you may find you don't like being a distance landlord, and then you'd lose money selling or be stuck doing something you don't enjoy for a while until you can sell without a loss. Like you mentioned, the risk of selling either/both rental properties is that if the Arizona housing/rental markets do well you'd have given up your position and missed out. Ultimately, I think it's about your desired timeline, if you are content to wait a while to buy in San Diego, you could have a handsome down payment, will know whether or not you like being a distance landlord, and can sell/keep the rentals accordingly. Alternatively, if you want to get a house in San Diego sooner, then selling one or both rentals gets you there faster. If I was in your position, I'd probably sell the rental that I lived in and put that toward a down-payment on a primary residence, keeping the other rental for now and trying my hand at being a distance landlord.",
"title": ""
},
{
"docid": "e5f4ab2a01fac462e9288e0ff4883245",
"text": "I am sorry to say, you are asking the wrong question. If I own a rental that I bought with cash, I have zero mortgage. The guy I sell it to uses a hard money lender (charging a high rate) and finances 100%. All of this means nothing to the prospective tenant. In general, one would look at the rent to buy ratio in the area, and decide whether homes are selling for a price that makes it profitable to buy and then rent out. In your situation, I understand you are looking to decide on a rent based on your costs. That ship has sailed. You own already. You need to look in the area and find out what your house will rent for. And that number will tell you whether you can afford to treat it as a rental or would be better off selling. Keep in mind - you don't list a country, but if you are in US, part of a rental property is that you 'must' depreciate it each year. This is a tax thing. You reduce your cost basis each year and that amount is a loss against income from the rental or might be used against your ordinary income. But, when you sell, your basis is lower by this amount and you will be taxed on the difference from your basis to the sale price. Edit: After reading OP's updated question, let me answer this way. There are experts who suggest that a rental property should have a high enough rent so that 50% of rent covers expenses. This doesn't include the mortgage. e.g. $1500 rent, $750 goes to taxes, insurance, maintenance, repairs, etc. the remaining $750 can be applied to the mortgage, and what remains is cash profit. No one can give you more than a vague idea of what to look for, because you haven't shared the numbers. What are your taxes? Insurance? Annual costs for landscaping/snow plowing? Then take every item that has a limited life, and divide the cost by its lifetime. e.g. $12,000 roof over 20 years is $600. Do this for painting, and every appliance. Then allow a 10% vacancy rate. If you cover all of this and the mortgage, it may be worth keeping. Since you have zero equity, time is on your side, the price may rise, and hopefully, the monthly payments chip away at the loan.",
"title": ""
},
{
"docid": "48afeed212c2d44d7878e3a0f08b085b",
"text": "\"I'd probably say \"\"buy\"\" for most situations. Unless you have a long-term lease, you're going to be saddled with elastic/rising rents if the market tightens up, while with a purchase you usually have fixed expenses (with the exception of property taxes/condo fees) and you are gaining equity. As I've gotten older, the prospect of moving is more and more daunting. The prospect of being essentially kicked out of my home when the landlord decides to sell the property or raise the rent is a turn-off to me.\"",
"title": ""
},
{
"docid": "88d77a3dd754aefdfb72b4a009b8c5e4",
"text": "\"Started to post this as a comment, but I think it's actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don't know which or how much until you're ready to terminate the business... so, like your own house, it really isn't a liquid asset; it's closer to being inventory. Meanwhile, like inventory, you need to \"\"restock\"\" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they're likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don't forget that income from the business is taxed at income rates, not investment rates. And don't forget that you're making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you're willing to do the work needed to influence which ones are more likely.\"",
"title": ""
},
{
"docid": "865a5ea962ecbf23aa7d29e646c44738",
"text": "\"I think the real answer to your question here is diversification. You have some fear of having your money in the market, and rightfully so, having all your money in one stock, or even one type of mutual fund is risky as all get out, and you could lose a lot of your money in such a stock-market based undiversified investment. However, the same logic works in your rental property. If you lose your tennant, and are unable to find a new one right away, or if you have some very rare problem that insurance doesn't cover, your property could become very much not a \"\"break even\"\" investment very quickly. In reality, there isn't any single investment you can make that has no risk. Your assets need to be balanced between many different market-investments, that includes bonds, US stocks, European stocks, cash, etc. Also investing in mutual funds instead of individual stocks greatly reduces your risk. Another thing to consider is the benefits of paying down debt. While investments have a risk of not performing, if you pay off a loan with interest payments, you definitely will save the money you would have paid in interest. To be specific, I'd recommend the following plan -\"",
"title": ""
},
{
"docid": "fe638c47505fa844419fd4a4523d8fb8",
"text": "\"A person can finance housing expenses in one of two ways. You can pay rent to a landlord. Or you can buy a house with a mortgage. In essence, you become your own landlord. That is, insta the \"\"renter\"\" pays an amount equal to the mortgage to insta the \"\"landlord,\"\" who pays it to the bank to reduce the mortgage. Ideally, your monthly debt servicing payments (minus tax saving on interest) should approximate the rent on the house. If they are a \"\"lot\"\" more, you may have overpaid for the house and mortgage. The advantage is that your \"\"rent\"\" is applied to building up equity (by reducing the mortgage) in your house. (And mortgage payments are tax deductible to the extent of interest expense.) At the end of 30 years, or whatever the mortgage term, you have \"\"portable equity\"\" in the form a fully paid house, that you can sell to move another house in Florida, or wherever you want to retire. Sometimes, you will \"\"get lucky\"\" if the value of the house skyrockets in a short time. Then you can borrow against your appreciation. But be careful, because \"\"sky rockets\"\" (in housing and elsewhere) often fall to earth. But this does represent another way to build up equity by owning a house.\"",
"title": ""
},
{
"docid": "2a4e0e930b1f26fb5c23824259d67121",
"text": "Diversification is one aspect to this question, and Dr Fred touches on its relationship to risk. Another aspect is leverage: So it again comes down to your appetite for risk. A further factor is that if you are successfully renting out your property, someone else is effectively buying that asset for you, or at least paying the interest on the mortgage. Just bear in mind that if you get into a situation where you have 10 properties and the rent on them all falls at the same time as the property market crashes (sound familiar?) then you can be left on the hook for a lot of interest payments and your assets may not cover your liabilities.",
"title": ""
},
{
"docid": "dc7aaf97583f7dde2cd3cbf4ba990d91",
"text": "I'd suggest taking all the money you have saved up and putting in a mutual fund and hold off on buying a rental property until you can buy it outright. I know it seems like this will take forever, but it has a HUGE advantage: I know it seems like it will take forever to save up the money to buy a property for cash, but in the long run, its the best option by far.",
"title": ""
},
{
"docid": "6cdc0588d6d9eead92d49ddb549ec3d1",
"text": "\"I would strongly consider renting; as homes are often viewed by people as \"\"investments\"\" but in reality they are costs, just like renting. The time-frame for return is so long, the interest rate structure in terms of your mortgage payments; if you buy, you must be prepared to and willing to stay at minimum 7-10 years; because anything can happen. Hot markets turn cold. Or stale, and just the closing costs will cause it be less advantageous to renting. Before buying a property, ask yourself does it meet these 5 criteria: IDEAL I - Income; the property will provide positive cash flow through renters. D - Depreciation; tax savings. E - Equity; building equity in the property- the best way is through interest only loans. There is NO reason to pay any principle on any property purchase. You do 5 year interest only loans; keep your payments low; and build equity over time as the property price rises. Look how much \"\"principle\"\" you actually pay down over the first 7 years on a 30 year mortgage. Virtually Nil. A - Appreciation - The property will over time go up in value. Period. There is no need to pay any principle. Your Equity will come from this... time. L - Leverage; As the property becomes more valuable; you will have equity stake, enabling you to get higher credit lines, lines of equity credit, to purchase more properties that are IDEA. When you are RICH, MARRIED, and getting ready for a FAMILY, then buy your home and build it. Until then, rent, it will keep your options open. It will keep your costs low. It will protect you from market downturns as leases are typically only 1 year at most. You will have freedom. You will not have to deal with repairs. A new Water Heater, AC unit, the list goes on and on. Focus on making money, and when you want to buy your first house. Buy a duplex; rent it out to two tenants, and make sure it's IDEAL.\"",
"title": ""
},
{
"docid": "f1ff2e2812a352997c7928a5cd5d9e34",
"text": "Pay down the lower balance on the rental property. Generally speaking, you are more likely to need/want to sell the rental house as business conditions change or if you need the money for some other purpose. If you pay down your primary residence first, you are building equity, but that equity isn't as liquid as equity in the rental. Also, in the US, you cannot deduct the interest on a rental property, so the net interest after taxes that you're paying on the rental narrows the gap between the 4.35% loan and the 5% loan.",
"title": ""
},
{
"docid": "bffe0c8e40d0f4420e78fcbd9e76bab5",
"text": "\"When you compare the costs of paying your current mortgage with the rental income from the flat, you're not really comparing like with like. Firstly, the mortgage payments are covering both interest and capital repayments, so some of the 8k is money that is adding to your net worth. Secondly, the value of the flat (130k) is much more than the outstanding mortgage (80k) so if you did sell the flat and pay off the mortgage, you'd have 50k left in cash that could be invested to provide an income. The right way to compare the two options is to look at the different costs in each scenario. Let's assume the bigger house will cost 425k as it makes the figures work out nicely. If you buy the bigger house with a bigger mortgage, you will need to borrow 50k more so will end up with a mortgage of 130k, and you will still have the 8k/year from the flat. Depending on your other income, you might have to pay tax on the 8k/year - e.g. at 40% if you're a higher-rate taxpayer, leaving you with 4.8k/year. If you sell the flat, you'll have no mortgage repayments to make and no income from the flat. You'll be able to exactly buy the new house outright with the 50k left over after you repay the mortgage, on top of your old house. You'd also have to pay some costs to sell the flat that you wouldn't have to with the bigger mortgage, but you'd save on the costs of getting a new mortgage. They probably aren't the same, but let's simplify and assume they are. If anything the costs of selling the flat are likely to be higher than the mortgage costs. Viewed like that, you should look at the actual costs to you of having a 130k mortgage, and how much of that would be interest. Given that you'll be remortgaging, at current mortgage rates, I'd expect interest would only be 2-3%, i.e around 2.5k - 4k, so significantly less than the income from the flat even after tax. The total payment would be more because of capital repayment, but you could easily afford the cashflow difference. You can vary the term of the mortgage to control how much the capital repayment is, and you should easily be able to get a 130k mortgage on a 425k house with a very good deal. So if your figure of 8k rent is accurate (considering void periods, costs of upkeep etc), then I think it easily makes sense to get the bigger house with the bigger mortgage. Given the tax impact (which was pointed out in a comment), a third strategy may be even better: keep the flat, but take out a mortgage on it in exchange for a reduced mortgage on your main house. The reason for doing it that way is that you get some tax relief on the mortgage costs on an investment property as long as the income from that property is higher than the costs, whereas you don't on your primary residence. The tax relief used to just be at the same tax rate you were paying on the rental income, i.e. you could subtract the mortgage costs from the rental income when calculating tax. It's gradually being reduced so it's just basic rate tax relief (20%) even if you pay higher-rate tax, but it still could save you some money. You'd need to look at the different mortgage costs carefully, as \"\"buy-to-let\"\" mortgages often have higher interest rates.\"",
"title": ""
},
{
"docid": "f598ab2f6fbf16a9948e513ffbee3307",
"text": "Lets consider what would happen if you invested $1500/mo plus $10k down in a property, or did the same in a low-cost index fund over the 30 year term that most mortgages take. The returns of either scenarios cannot be guaranteed, but there are long term analyses that shows the stock market can be expected to return about 7%, compounded yearly. This doesn't mean each year will return 7%, some years will be negative, and some will be much higher, but that over a long span, the average will reach 7%. Using a Time-Value-of-Money calculator, that down payment, monthly additions of $1,500, and a 7% annual return would be worth about $1.8M in 30 years. If 1.8M were invested, you could safely withdraw $6000/mo for the rest of your life. Do consider 30years of inflation makes this less than today's dollar. There are long term analyses that show real estate more-or-less keeps track with inflation at 2-4% annual returns. This doesn't consider real estate taxes, maintenance, insurance and the very individual and localized issues with your market and your particular house. Is land limited where you are, increasing your price? Will new development drive down your price? In 30 years, you'll own the house outright. You'll still need to pay property tax and insurance on it, and you'll be getting rental income. Over those 30 years, you can expect to replace a roof, 2-3 hot water heaters, concrete work, several trees, decades of snow shoveling, mowing grass and weeding, your HVAC system, windows and doors, and probably a kitchen and bathroom overhauls. You will have paid about 1.5x the initial price of the mortgage in interest along the way. So you'll have whatever the rental price for your house, monthly (probably almost impossible to predict for a single-family home) plus the market price of your house. (again, very difficult to predict, but could safely say it keeps pace with inflation) minus your expenses. There are scenarios where you could beat the stock market. There are ways to reduce the lifestyle burden of being a landlord. Along the way, should you want to purchase a house for yourself to live in, you'll have to prove the rental income is steady, to qualify for a loan. Having equity in a mortgage gives you something to borrow against, in a HELOC. Of course, you could easily end up owing more than your house is worth in that situation. Personally, I'd stick to investing that money in low-fee index funds.",
"title": ""
},
{
"docid": "145e74fa3efcff20e658426555ae1a21",
"text": "In most cases my preference would be to buy. However, if you intend to sell after just one year I would maybe lean towards renting. You haven't included buying and selling cost into your equation nor any property taxes, and as John Bensin suggests, maintenance costs. If you were looking to hold the property for at least 5 years, 10 years or more, then if the numbers stood up, I would defiantly go with the buy option. You can rent it out after you move out and if the rent is higher than your total expenses in holding the property, you could rely on some extra passive income.",
"title": ""
},
{
"docid": "9cb8d2713786a67c691618f992ccd148",
"text": "The assumption that house value appreciates 5% per year is unrealistic. Over the very long term, real house prices has stayed approximately constant. A house that is 10 years old today is 11 years old a year after, so this phenomenon of real house prices staying constant applies only to the market as a whole and not to an individual house, unless the individual house is maintained well. One house is an extremely poorly diversified investment. What if the house you buy turns out to have a mold problem? You can lose your investment almost overnight. In contrast to this, it is extremely unlikely that the same could happen on a well-diversified stock portfolio (although it can happen on an individual stock). Thus, if non-leveraged stock portfolio has a nominal return of 8% over the long term, I would demand higher return, say 10%, from a non-leveraged investment to an individual house because of the greater risks. If you have the ability to diversify your real estate investments, a portfolio of diversified real estate investments is safer than a diversified stock portfolio, so I would demand a nominal return of 6% over the long term from such a diversified portfolio. To decide if it's better to buy a house or to live in rental property, you need to gather all of the costs of both options (including the opportunity cost of the capital which you could otherwise invest elsewhere). The real return of buying a house instead of renting it comes from the fact that you do not need to pay rent, not from the fact that house prices tend to appreciate (which they won't do more than inflation over a very long term). For my case, I live in Finland in a special case of near-rental property where you pay 15% of the building cost when moving in (and get the 15% payment back when moving out) and then pay a monthly rent that is lower than the market rent. The property is subsidized by government-provided loans. I have calculated that for my case, living in this property makes more sense than purchasing a market-priced house, but your situation may be different.",
"title": ""
},
{
"docid": "4f115259938b6a581b6db96d3ef7bae0",
"text": "I wondered about this problem too, so I looked into the maths and made this app :- http://demonstrations.wolfram.com/BuyOrRentInvestmentReturnCalculator/ (It uses the free Wolfram computable-document format (CDF) Player.) If you try it out you can see what conditions favour renting vs buying. My own conclusion was to aim to buy a property outright upon reaching retirement age, if not sooner. Example This example compares buying a £400,000 house with renting for £1,000 a month while depositing equivalent amounts (in savings) to total the same monthly outgoings as the buyer. Mortgage rate, deposit rate, property appreciation and rent inflation can be variously specified. The example mortgage term is 20 years. As you can see the buyer and renter come out about even after the mortgage term, but the buyer comes off better after that, (having no more mortgage to pay). Of course, the rent to live in a £400,000 house would probably be more than £1,000 but this case shows an equivalence point.",
"title": ""
}
] |
fiqa
|
f2df8325f65682e96d2265840830a816
|
How to start personal finances?
|
[
{
"docid": "5d263c58e06cdef68f6e70bdde5012eb",
"text": "I'm assuming you're in Germany or Europe based on your question, but here's an American's perspective that should pertain you you as well: Once you have a steady income and an emergency fund large enough to keep you from going bankrupt, then start learning about retirement and investment options.",
"title": ""
},
{
"docid": "6d51479ea79b40327b9583dc739fd24e",
"text": "Personal finances are not intuitive for everyone, and it can be a challenge to know what to do when you haven't been taught. Congratulations on recognizing that you need to make a change. The first step that I would recommend is what you've already done: Assemble your bank statements so you can get an accurate picture of what money you currently have. Keep organized folders so you can find your bank statements when you need them. In addition to the bank statements for your checking and savings accounts, you also need to assess any debt that you have. Have you taken out any loans that need to be paid back? Do you have any credit card debt? Make a list of all your debts, and make sure that you have folders for these statements as well. Hopefully, you don't have any debts. But if you are like most people, you owe money to someone, and you may even owe more money than you currently have in your bank accounts. If you have debts, fixing this problem will be one of your goals. No matter what your debt is, you need to make sure that from now on, you don't spend more money than you take in as income. To do this, you need to make a budget. A budget is a plan for spending your money. To get started with a budget, make a list of all the income you will receive this month. Add it up, and write that amount at the top of a page. Next, you want to make a list of all the expenses you will have this month. Some of these expenses are more or less fixed: rent, utility bills, etc. Write those down first. Some of the expenses you have more control over, such as food and entertainment. Give yourself some money to spend on each of these. You may also have some larger expenses that will happen in the future, such as a tuition or insurance payment. Allocate some money to those, so that by the time that payment comes around, you will have saved enough to pay for those expenses. If you find that you don't have enough income to cover all of your expenses in a month, you need to either reduce your expenses somewhere or increase your income until your budget is at a point where you have money left over at the end of each month. After you've gotten to this point, the next step is figuring out what to do with that extra money left over. This is where your goals come into play. If you have debt, I recommend that one of your first goals is to eliminate that debt as fast as possible. If you have no money saved, you should make one of your goals saving some money as an emergency fund. See the question Oversimplify it for me: the correct order of investing for some ideas on what order you should place your goals. Doing the budget and tracking all of your spending on paper is possible, but many people find that using the right software to help you do this is much easier. I have written before on choosing budgeting software. All of the budgeting software packages I mentioned in that post are from the U.S., but many of them can successfully be used in Europe. YNAB, the program I use, even has an unofficial German users community that you might find useful. One of the things that budgeting software will help you with is the process of reconciling your bank statements. This is where you go through the bank statement each month and compare it to your own record of spending transactions in your budget. If there are any transactions that appear in the statement that you don't have recorded, you need to figure out why. Either it is an expense that you forgot to record, or it is a charge that you did not make. Record it if it is legitimate, or dispute the expense if it is fraudulent. For more information, look around at some of the questions tagged budget. I also recommend the book The Total Money Makeover by Dave Ramsey, which will provide more help in making a budget and getting out of debt.",
"title": ""
},
{
"docid": "bf7662a065b8944e12c197ad5175fda5",
"text": "\"A few practical thoughts: A practical thing that helps me immensely not to loose important paperwork (such as bank statements, bills, payroll statement, all those statements you need for filing tax return, ...) is: In addition to the folder (Aktenordner) where the statements ultimately need to go I use a Hängeregistratur. There are also standing instead of hanging varieties of the same idea (may be less expensive if you buy them new - I got most of mine used): you have easy-to-add-to folders where you can just throw in e.g. the bank statement when it arrives. This way I give the statement a preliminary scan for anything that is obviously grossly wrong and throw it into the respective folder (Hängetasche). Every once in a while I take care of all my book-keeping, punch the statements, file them in the Aktenordner and enter them into the software. I used to hate and never do the filing when I tried to use Aktenordner only. I recently learned that it is well known that Aktenordner and Schnellhefter are very time consuming if you have paperwork arriving one sheet at a time. I've tried different accounting software (being somewhat on the nerdy side, I use gnucash), including some phone apps. Personally, I didn't like the phone apps I tried - IMHO it takes too much time to enter things, so I tend to forget it. I'm much better at asking for a sales receipt (Kassenzettel) everywhere and sticking them into a calendar at home (I also note cash payments for which I don't have a receipt as far as I recall them - the forgotten ones = difference ends up in category \"\"hobby\"\" as they are mostly the beer or coke after sports). I was also to impatient for the cloud/online solutions I tried (I use one for business, as there the archiving is guaranteed to be according to the legal requirements - but it really takes far more time than entering the records in gnucash).\"",
"title": ""
},
{
"docid": "dd64e46c50726738ae17a75b96984b18",
"text": "\"There are many paths to success, but they all begin with education. You made the first big step just by visiting here. We have 17,000 questions, arranged by tag so you can view those on a given topic. You can sort by votes to see the ones that have the best member acceptance. I'll agree with Ben that one of the best ones is \"\"The correct order of investing.\"\" We both offered answers there, and that helps address a big chunk of your issue. The book recommendations are fine, you'll quickly find that each author has his/her own slant or focus on a certain approach. For example, one financial celebrity (note - in the US, there are private advisors, usually with credentials of some sort, there are those who work for brokers and also offers help, there are financial bloggers (I am one), and there are those who are on the radio or TV who may or may not have any credentials) suggests that credit cards are to be avoided. The line in another answer here, \"\"You're not going to get rich earning 1% on a credit card,\"\" is a direct quote of one such celebrity. I disputed that in my post \"\"I got rich on credit card points!\"\" The article is nearly 2 years old, the account accumulating the rewards has recently passed $34,000. This sum of money is more wealth than 81% of people in the world have. The article was a bit tongue in cheek (sarcastic) but it made a point. A young person should get a credit card, a good one, with no fee, and generous rewards. Use the card to buy only what you can pay back that month. At year end, I can download all my spending. The use of the card helps, not hinders, the budgeting process, and provides a bit of safety with its guarantees and theft protection. Your question really has multiple facets. If these answers aren't helpful enough, I suggest you ask a new question, but focus on one narrow issue. \"\"Paying off debt\"\" \"\"Getting organized\"\" \"\"Saving\"\" \"\"Budgeting\"\" all seem to be part of your one question here.\"",
"title": ""
}
] |
[
{
"docid": "4b65a7bc2e4502b2f706e84c5fc12f04",
"text": "\"As THEAO suggested, tracking spending is a great start. But how about this - Figure out the payment needed to get to zero debt in a reasonable time, 24 months, perhaps. If that's more than 15% of your income, maybe stretch a tiny bit to 30 months. If it's much less, send 15% to debt until it's paid, then flip the money to savings. From what's left, first budget the \"\"needs,\"\" rent, utilities, etc. Whatever you spend on food, try to cut back 10%. There is no budget for entertainment or clothes. The whole point is one must either live beneath their means, or increase their income. You've seen what can happen when the debt snowballs. In reality, with no debt to service and the savings growing, you'll find a way to prioritize spending. Some months you'll have to choose, dinner out, or a show. I agree with Keith's food bill, $300-$400/mo for 3 of us. Months with a holiday and large guest list throws that off, of course.\"",
"title": ""
},
{
"docid": "416ef7846826a6105c8771f921f2ad33",
"text": "\"You don't state a long term goal for your finances in your message, but I'm going to assume you want to retire early, and retire well. :-) any other ideas I'm missing out on? A fairly common way to reach financial independence is to build one or more passive income streams. The money returned by stock investing (capital gains and dividends) is just one such type of stream. Some others include owning rental properties, being a passive owner of a business, and producing goods that earn long-term royalties instead of just an immediate exchange of time & effort for cash. Of these, rental property is probably one of the most well-known and easiest to learn about, so I'd suggest you start with that as a second type of investment if you feel you need to diversify from stock ownership. Especially given your association with the military, it is likely there is a nearby supply of private housing that isn't too expensive (so easier to get started with) and has a high rental demand (so less risk in many ways.) Also, with our continued current low rate environment, now is the time to lock-in long term mortgage rates. Doing so will reap huge benefits as rates and rents will presumably rise from here (though that isn't guaranteed.) Regarding the idea of being a passive business owner, keep in mind that this doesn't necessarily mean starting a business yourself. Instead, you might look to become a partner by investing money with an existing or startup business, or even buying an existing business or franchise. Sometimes, perfectly good business can be transferred for surprisingly little down with the right deal structure. If you're creative in any way, producing goods to earn long-term royalties might be a useful path to go down. Writing books, articles, etc. is just one example of this. There are other opportunities depending on your interests and skill, but remember, the focus ought to be on passive royalties rather than trading time and effort for immediate money. You only have so many hours in a year. Would you rather spend 100 hours to earn $100 every year for 20 years, or have to spend 100 hours per year for 20 years to earn that same $100 every year? .... All that being said, while you're way ahead of the game for the average person of your age ($30k cash, $20k stocks, unknown TSP balance, low expenses,) I'm not sure I'd recommend trying to diversify quite yet. For one thing, I think you need to keep some amount of your $30k as cash to cover emergency situations. Typically people would say 6 months living expenses for covering employment gaps, but as you are in the military I don't think it's as likely you'll lose your job! So instead, I'd approach it as \"\"How much of this cash do I need over the next 5 years?\"\" That is, sum up $X for the car, $Y for fun & travel, $Z for emergencies, etc. Keep that amount as cash for now. Beyond that, I'd put the balance in your brokerage and get it working hard for you now. (I don't think an average of a 3% div yield is too hard to achieve even when picking a safe, conservative portfolio. Though you do run the risk of capital losses if invested.) Once your total portfolio (TSP + brokerage) is $100k* or more, then consider pulling the trigger on a second passive income stream by splitting off some of your brokerage balance. Until then, keep learning what you can about stock investing and also start the learning process on additional streams. Always keep an eye out for any opportunistic ways to kick additional streams off early if you can find a low cost entry. (*) The $100k number is admittedly a rough guess pulled from the air. I just think splitting your efforts and money prior to this will limit your opportunities to get a good start on any additional streams. Yes, you could do it earlier, but probably only with increased risk (lower capital means less opportunities to pick from, lower knowledge levels -- both stock investing and property rental) also increase risk of making bad choices.\"",
"title": ""
},
{
"docid": "8dbae2056c5926e326a8d52d42980146",
"text": "\"What I would do, in this order: Get your taxes in order. Don't worry about fancy tricks to screw the tax man over; you've already admitted that you're literally making more money than you know what to do with, and a lot of that is supported, one way or another, by infrastructure that's supported by tax money. Besides, your first priority is to establish basic security for yourself and your family. Making sure you won't be subjected to stressful audits is an important part of that! Pay off any and all outstanding debts you may have. This establishes a certain baseline standard of living for you: no matter what unexpected tragedies may come up, at least you won't have to deal with them while also keeping the wolves at bay at the same time! Max out a checking account. I believe the FDIC maximum insured value is $250,000. Fill 'er up, get a debit card, and just sit on it. This is a rainy day fund, highly liquid and immediately usable in case you lose your income. Put at least half of it into an IRA or other safe investments. Bonds and reliable dividend-paying stocks are strongly preferred: having money is good but having income is much better, especially in retirement! Quality of life. Splurge a little. (Emphasis on a little!) Look around your life. There are a few things that it would be nice if you just had, but you've never gotten around to getting. Pick up a few of them, but don't go overboard. Spending too much too quickly is a good way to end up with no money and no idea what happened to it. Also, note that this isn't just for you; family members deserve some love too! Charitable giving. If you have more money than you know what to do with, there are plenty of people out there who know exactly what to do--try to go on living and build a basic life for themselves--but have no money with which to do so. Do your research. Scam charities abound, as do more-or-less legitimate ones who actually do help those in need, but also end up sucking up a surprisingly high percentage of donations for \"\"administrative costs\"\". Try and avoid these and send your money where it will actually do some good in the world. Reinvest in yourself. You're running a business. Make sure you have the best tools and training you can afford, now that you can afford more!\"",
"title": ""
},
{
"docid": "5c44b08854a031354dbe1f6080139836",
"text": "A Budget is different for every person. There are families making $40K/yr who will budget to spend it all. But a family making $100K of course will have a different set of spending limits for most items. My own approach is to start by tracking every cent. Keep a notebook for a time, 3 months minimum. Note, for homeowners, a full year is what it takes to capture the seasonal expenses. This approach with help you see where the money is going, and adjust accordingly. The typical goal is to spend less than you make, saving X% for retirement, etc. The most important aspect is to analyze how much money is getting spent on wasteful items. The $5 coffee, the $10 lunch, the $5-$7 magazines, etc. One can decide the $5 coffee is a social event done with a friend, and that's fine, so long as it's a mindful decision. I've watched the person in front of me at the supermarket put 4 magazines down on the counter. If she has $20 to burn, that's her choice. See Where can I find an example of a really basic family budget? for other responses.",
"title": ""
},
{
"docid": "a12a08c1ab1f090461328b8bd919817b",
"text": "\"Your questions seek answers to specifics, but I feel that you may need more general help. There are two things, I feel, that you need to learn about in the general category of personal finance. Your asking questions about investing, but it is not as important, IMHO, as how you manage your day-to-day operations. For example, you should first learn to budget. In personal finance often times \"\"living on a budget\"\" equates to poor, or low income. That is hardly the case. A budget is a plan on how to spend money. It should be refreshed each and every month and your income should equal your expenses. You might have in your budget a $1200 trip into the city to see a concert, hardly what a low income person should have in theirs. Secondly you need to be deliberate about debt management. For some, they feel that having a car payment and having student loans are a necessary part of life and argue that paying them off is foolish as you can earn more from investments. Others argue for zero debt. I fall in the later. Using and carrying a balance on high interest CCs and having high leases or car payments are just dumb. They are also easy to wander into unless you are deliberate. Third you need to prepare for emergencies. Engineers still get laid off and hurt where they are unable to work. They get sued. Having the proper insurance and sufficient reserves in the bank help prevent debt. Now you can start looking into investments. Start off slow and deliberate with investing. Put some in your company 401K or open some mutual funds on the side. You can read about them and talk with advisers, for free, at Fidelity and Vanguard. Read books from the library. Most of all don't get caught up in too much hype. Things like Forex, options, life insurance, gold/silver, are not investments. They are tools for sales people to make fat commissions off the ignorant. You are fortunate in that Engineers are very likely to retire wealthy. They are part of the second largest demographic of first generation rich. The first is small business owners. To start out I would read Millionaire Next Door and Stop Acting Rich. For a debt free approach to life, check out Financial Peace University (FPU) by Dave Ramsey (video course). His lesson on insurance is excellent. I am an engineer, and my wife a project manager we found FPU life changing and regretted not getting on board sooner. Along these lines we have had some turmoil, recently, that became little more than an inconvenience because we were prepared.\"",
"title": ""
},
{
"docid": "aac3d7275a71c19714675cdce0db0350",
"text": "Most individuals do not need a personal financial advisor. If you are soon entering the world of work, your discretionary investments should be focused on index funds that you commit to over the long run. Indeed, the best advice I would give to anyone just starting out would be: For most average young workers, a financial advisor will just give you some version of the information above, but will change you for it. I would not recommend a financial advisor as a necessity until you have seriously complicated taxes. Your taxes will not be complicated. Save your money.",
"title": ""
},
{
"docid": "2ccdf1e5dd46c8433b4bc98d3814f4ea",
"text": "We don't have a good answer for how to start investing in poland. We do have good answers for the more general case, which should also work in Poland. E.g. Best way to start investing, for a young person just starting their career? This answer provides a checklist of things to do. Let's see how you're doing: Match on work pension plan. You don't mention this. May not apply in Poland, but ask around in case it does. Given your income, you should be doing this if it's available. Emergency savings. You have plenty. Either six months of spending or six months of income. Make sure that you maintain this. Don't let us talk you into putting all your money in better long term investments. High interest debt. You don't have any. Keep up the good work. Avoid PMI on mortgage. As I understand it, you don't have a mortgage. If you did, you should probably pay it off. Not sure if PMI is an issue in Poland. Roth IRA. Not sure if this is an issue in Poland. A personal retirement account in the US. Additional 401k. A reminder to max out whatever your work pension plan allows. The name here is specific to the United States. You should be doing this in whatever form is available. After that, I disagree with the options. I also disagree with the order a bit, but the basic idea is sound: one time opportunities; emergency savings; eliminate debt; maximize retirement savings. Check with a tax accountant so as not to make easily avoidable tax mistakes. You can use some of the additional money for things like real estate or a business. Try to keep under 20% for each. But if you don't want to worry about that kind of stuff, it's not that important. There's a certain amount of effort to maintain either of those options. If you don't want to put in the effort to do that, it makes sense not to do this. If you have additional money split the bulk of it between stock and bond index funds. You want to maintain a mix between about 70/30 and 75/25 stocks to bonds. The index funds should be based on broad indexes. They probably should be European wide for the most part, although for stocks you might put 10% or so in a Polish fund and another 15% in a true international fund. Think over your retirement plans. Where do you want to live? In your current apartment? In a different apartment in the same city? In one of the places where you inherited property? Somewhere else entirely? Also, do you like to vacation in that same place? Consider buying a place in the appropriate location now (or keeping the one you have if it's one of the inherited properties). You can always rent it out until then. Many realtors are willing to handle the details for you. If the place that you want to retire also works for vacations, consider short term rentals of a place that you buy. Then you can reserve your vacation times while having rentals pay for maintenance the rest of the year. As to the stuff that you have now: Look that over and see if you want any of it. You also might check if there are any other family members that might be interested. E.g. cousins, aunts, uncles, etc. If not, you can probably sell it to a professional company that handles estate sales. Make sure that they clear out any junk along with the valuable stuff. Consider keeping furniture for now. Sometimes it can help sell a property. You might check if you want to drive either of them. If not, the same applies, check family first. Otherwise, someone will buy them, perhaps on consignment (they sell for a commission rather than buying and reselling). There's no hurry to sell these. Think over whether you might want them. Consider if they hold any sentimental value to you or someone else. If not, sell them. If there's any difficulty finding a buyer, consider renting them out. You can also rent them out if you want time to make a decision. Don't leave them empty too long. There's maintenance that may need done, e.g. heat to keep water from freezing in the pipes. That's easy, just invest that. I wouldn't get in too much of a hurry to donate to charity. You can always do that later. And try to donate anonymously if you can. Donating often leads to spam, where they try to get you to donate more.",
"title": ""
},
{
"docid": "69cbc69ac62683bd3f6e8483896dcb81",
"text": "\"You can't get started investing. There are preliminary steps that must be taken prior to beginning to invest: Only once these things are complete can you think about investing. Doing so before hand will only likely lose money in the long run. Figure these steps will take about 2.5 years. So you are 2.5 years from investing. Read now: The Total Money Makeover. It is full of inspiring stories of people that were able to turn things around financially. This is good because it is easy to get discouraged and believe all kind of toxic beliefs about money: The little guy can't get ahead, I always will have a car payment, Its too late, etc... They are all false. Part of the book's resources are budgeting forms and hints on budgeting. Read later: John Bogle on Investing and Bogle on Mutual Funds One additional Item: About you calling yourself a \"\"dummy\"\". Building personal wealth is less about knowledge and more about behavior. The reason you don't have a positive net worth is because of how you behaved, not knowledge. Even sticking a small amount in a savings account each paycheck and not spending it would have allowed you to have a positive net worth at this point in your life. Only by changing behavior can you start to build wealth, investing is only a small component.\"",
"title": ""
},
{
"docid": "819557c32a8d63b6258f95d14b085c0a",
"text": "Put your budget down on paper/spreadsheet/tool of choice (e.g Mint, YNAB, Excel). Track every cent for a few months. Seeing it written down makes The Financial Conversation easier. One simple trick is to pay yourself first. Take $100 and sock it away each month, or $25 per paycheck - send it to another account where you won't see it. Then live off the rest. For food - make a meal plan. Eggs are healthy and relatively cheap so you have breakfast covered. Oatmeal is about $2 for a silos' worth. Worst case you can live off of ramen noodles, peanut butter and tuna for a month while you catch up. Cut everything as some of the others have answered - you will be amazed how much you will not miss. Dave Ramsey's baby steps are great for getting started (I disagree with DR on a great many things so that's not advocating you sign up for anything). Ynab's methodology is actually what got me out of my mess - they have free classes in their website - where budgeting is about planning and not simply tracking. Good luck.",
"title": ""
},
{
"docid": "9a1057d9581e4575e06f536cbe97931e",
"text": "\"I have the same problem. The people above are right to an extent. You have to be more disciplined. But there is no reason why you can't get there in stages. If you try to do too much too fast you'll just give up. You need to find a system that removes some of the passive barriers affecting you. You need to think what in particular is overwhelming you. For me it was sitting down at the end of the month to write it all down. Writing it all down at the end of the week or even each day didn't work either because it was too much and I had forgotten what stuff was. I'm like you. The bank account is a record so why do I have to retype it or worse, hand write it out? Bleh. What I ended up doing was divide my expenses into four categories: food (to include all medical) shelter, transportation, spending -- with the first three being needs and the last being wants. Eating out is spending. I have four checking accounts with four debit cards. I saved up some money. I put a paycheck's worth of money in each because I didn't know how much I spent each month in each category, but knew I didn't spend an entire paycheck in any one category per month. Voila. No more work. At the store you just put things in the basket by category. At Target you pay for the food and toothpaste with the medical card and the DVD with the spending card. The cashiers don't care that you pay separately. And if you are buying so much crap that separating items by category is a problem, why the heck are you buying so much crap? At the end of the month you will now have a record of how much you spend on transportation, housing (electricity would be paid online from this account for example), medical and fun. That's all anyone needs to help you get started. You can then see if your housing is 35% or less (or whatever percentage you feel is right). The person trying to help the author above is right. A Target charge doesn't indicate whether you bought some oil for the car or cold medicine or a lock for the cabinet door that broke. But when you pay for each of these things under the right account, you do know how the money is allocated. Doing it this way requires little discipline. Before you put the item in the basket, you just ask yourself, is this a want or a need (which is something you should be doing anyway). If it's a need, is it for my car, house, or body. The house is what I use if i can't figure it out (like paying for the renewal of my professional license). that's it! You have to stand at the register for longer but so what. If you are spending all your salary and you stop when you have no more money (assuming you've run through all of your savings, which you will soon if you don't change), then you have no more money to spend. So if you are honest when you put things in the basket(need vs want), you are going to run out of spending money real quick. Your spending money account will be empty but you will still have food money. Set your debit card up so that it denies your charge if you dont have enough money. Once you realize how much you truly spend for needs in each category, yoy will only put that much in each account. Therefore, You can't use the house card to just \"\"borrow\"\" from it till next month. If you do, you won't be able to pay your bills. If you have so little discipline that you knowingly spend your bill money, then there is a deeper issue going on than just finding the right budgeting/cash flow system for you. Something is seriously wrong and you need to seek professional help. When someone is trying to help you, the first step is to determine what category you are spending too much in. Then when you realize it's the house category, for example, you will need to figure out why you are spending so much in that category. A bank statement wont tell you that. So you can do what we did. On every receipt --before you walk out of the store-- write down what each purchase is on the receipt. Then you can hand over the receipts to whoever is helping you. Most items are easily recognizable on the receipt so you wont have to write everything down. you should be doing this for insurance purposes anyway. Again, if your receipt is so blooming long that this is onerous, probably everything you just spent is not a need and maybe you need to turn right around and return stuff. Maybe you need to go to the store more often so there are only a few purchases on each receipt. Groceries are groceries. You don't need to detail that out. For Ikea when you have to purchase pieces to a set, we get a separate receipts for each. So the brackets and shelving for the bedroom will be on one receipt and the brackets and shelving for the other room will be on another receipt. Even at the store I cant figure out what all the little pieces are! But really, if you are making a decent enough salary, then you are probably spending too much on wants and are calling the items needs. So really your problem is correctly identifying needs from wants. Define a NEED. YOU. Make up your own definition of need Dwell on it. Let it become meaningful for you. Oranges are a need. Chocolate is not (no, really it's not! Lol!). So when you are putting the stuff in the basket, you dont even have to think about whether it's a need or not after a while. Wants go in the child seat if at all possible (to keep the number of items smaller). When you are ready to check out, add up the items roughly in the want pile. Ask yourself if you really want all that stuff. Then put some stuff back! At this point ask yourself is the 8 hours I will have to work to pay for this worth it? Am I really going to use it? Will using the item make me happy? Or is it the actual buying of the item that makes me feel powerful? Where will I put it? How much time will I need to maintain it? Then put some stuff back! Get some good goals, a kayaking trip or whatever. Ask yourself if the item is worth delaying the trip. How will I feel later? Will I have buyers remorse? If so, put it back! These are controls you can put into place that don't take a lot of discipline. Writing the items down on the receipt is a more advanced step you can take later. If you are with friends, go first so that you can write down the items while they are checking out. If you are private and don't want to share your method with your friends, go to the bathroom and in the stall write it down while they wait. Writing the items on the receipt while in the store is sort of a trigger mechanism for remembering to do so. That pulling out of the card triggers your memory to get out your pen or ask the cashier for one. The side benefit is catching someone using a cloned copy of your card. In the medical account if you see an Exxon charge, you know it's not yours. Also, while that one account is shut down, you have three others to rely on in the meantime. My spouse hated fumbling for the right card. They all look the same. Color code your cards. We have blue cross blue shield so it feels natural to have the food/medical account with a blue sticker (just buy a little circle sticker and place it on the edge so half is on the front and half is on the back -- nowhere near the strip). I've never been given a hard time about it. Our car is red so the car card is red, etc. If you think four cards is a lot to carry, ask yourself if you would rather carry four cards or keep track of every little thing? Good luck. I know you will find a system that works for you if you keep trying.\"",
"title": ""
},
{
"docid": "ba6dfeb344202e59f5c6b285133567aa",
"text": "A couple of good books I enjoyed and found very understandable (regarding the stock market): As for investment information you can get lost for days in Investopedia. Start in the stock section and click around. The tutorials here (free) give a good introduction to different financial topics. Regarding theoretical knowledge: start with what you know well, like your career or your other interests. You'll get a running start that way. Beyond that, it depends on what area of finance you want to start with. If it's your personal finances, I and a lot of other bloggers write about it all the time. Any of the bloggers on my blogroll (see my profile for the link) will give you a good perspective. If you want to go head first into planning your financial life, take a look at Brett Wilder's The Quiet Millionaire. It's very involved and thorough. And, of course, ask questions here.",
"title": ""
},
{
"docid": "3efd6b04f4c411da91108e1ba6a83ead",
"text": "\"Debt cripples you, it weighs you down and keeps you from living your life the way you want. Debt prevents you from accomplishing your goals, limits your ability to \"\"Do\"\" what you want, \"\"Have\"\" what you want, and \"\"Be\"\" who you want to be, it constricts your opportunities, and constrains your charity. As you said, Graduated in May from school. Student loans are coming due here in January. Bought a new car recently. The added monthly expenses have me concerned that I am budgeting my money correctly. Awesome! Congratulations. You need to develop a plan to repay the student loans. Buying a (new) car before you have planned you budget may have been premature. I currently am spending around 45-50% of my monthly (net)income to cover all my expenses and living. The left over is pretty discretionary, but things like eating dinner outside the house and expenses that are abnormal would come out of this. My question is what percentage is a safe amount to be committing to expenses on a monthly basis? Great! Plan 40-50% for essentials, and decide to spend under 20-30% for lifestyle. Be frugal here and you could allocate 30-40% for financial priorities. Budget - create a budget divided into three broad categories, control your spending and your life. Goals - a Goal is a dream with a plan. Organize your goals into specific items with timelines, and steps to progress to your goals. You should have three classes of goals, what you want to \"\"Have\"\", what you want to \"\"Do\"\", and who you want to \"\"Be\"\"; Ask yourself, what is important to you. Then establish a timeline to achieve each goal. You should place specific goals or steps into three time blocks, Near (under 3-6 months), medium (under 12 months), and Long (under 24 months). It is ok to have longer term plans, but establish steps to get to those goals, and place those steps under one of these three timeframes. Example, Good advice I have heard includes keeping housing costs under 25%, keeping vehicle costs under 10%, and paying off debt quickly. Some advise 10-20% for financial priorities, but I prefer 30-40%. If you put 10% toward retirement (for now), save 10-20%, and pay 10-20% toward debt, you should make good progress on your student loans.\"",
"title": ""
},
{
"docid": "732b1d87850d18987f69ce516b933752",
"text": "\"This Stack Exchange site is a nice place to find answers and ask questions. Good start! Moving away from the recursive answer... Simply distilling personal finance down to \"\"I have money, I'll need money in the future, what do I do\"\", an easily digestible book with how-to, multi-step guidelines is \"\"I Will Teach You To Be Rich\"\". The author talks about setting up the accounts you should have, making sure all your bills are paid automatically, saving on the big things and tips to increase your take home pay. That link goes to a compilation page on the blog with many of the most fundamental articles. However, \"\"The World’s Easiest Guide To Understanding Retirement Accounts\"\" is a particularly key article. While all the information is on the free blog, the book is well organized and concise. The Simple Dollar is a nice blog with frugal living tips, lifestyle assessments, financial thoughts and reader questions. The author also reviews about a book a week. Investing - hoping to get better returns than savings can provide while minimizing risk. This thread is an excellent list of books to learn about investing. I highly recommend \"\"The Bogleheads' Guide to Investing\"\" and \"\"The Only Investment Guide You'll Ever Need\"\". The world of investment vehicles is huge but it doesn't have to be complicated once you ignore all the fads and risky stuff. Index mutual funds are the place to start (and maybe end). Asset allocation and diversification are themes to guide you. The books on that list will teach you.\"",
"title": ""
},
{
"docid": "dcf7b6129f6a8a9145f65dc426f9870e",
"text": "PocketSmith is another tool you might like to consider. No personal banking details are required, but you can upload your transactions in a variety of formats. Pocketsmith is interesting because it really focus on your future cash flow, and the main feature of the interface is around having a calendar(s) where you easily enter one off or repetitive expenses/income. http://www.pocketsmith.com/",
"title": ""
},
{
"docid": "8f07af10bc00f54fb90c1694898806ea",
"text": "\"Both OP and the author of the newspaper article should have titled this \"\"When the media take the time to explain the true state of our economy, people are less optimistic about the future.\"\" A simple link to [this](http://research.stlouisfed.org/fred2/series/UMCSENT) graph would show that consumer confidence has rebounded, but dipped during the debt crisis (as it should have) because the media were reminding people how utterly weak our economy is. The fact that average hourly earnings today are exactly where they were in 2008 is a disaster. But to state that Americans perception of the economy is worse is flat wrong. They actually perceive it as improving when in fact it's on extremely shaky ground.\"",
"title": ""
}
] |
fiqa
|
d236e2bbcbe052f0d18cb28f0cd2ed9d
|
How to keep control of shared expenses inside marriage?
|
[
{
"docid": "8018eefd837fd80fcc3c6bd9a4cb2eb5",
"text": "\"JoeTaxpayer's answer mentions using a third \"\"house\"\" account. In my comment on his answer, I mentioned that you could simply use a bookkeeping account to track this instead of the overhead of an extra real bank account. Here's the detail of what I think will work for you. If you use a tool like gnucash (probably also possible in quicken, or if you use paper tracking, etc), create an account called \"\"Shared Expenses\"\". Create two sub accounts under that called \"\"his\"\" and \"\"hers\"\". (I'm assuming you'll have your other accounts tracked in the software as well.) I haven't fully tested this approach, so you may have to tweak it a little bit to get exactly what you want. When she pays the rent, record two transactions: When you pay the electric bill, record two transactions: Then you can see at a glance whether the balances on \"\"his\"\" and \"\"hers\"\" match.\"",
"title": ""
},
{
"docid": "a0032f41609f12a0c1aab22a62a5e196",
"text": "\"Why not start a third account, the \"\"house\"\" account? However you decide to fund it, equally or in proportion to income, you both chip in, and the payments for all joint expenses come from there. Rent, utilities, food, phone, cable.\"",
"title": ""
},
{
"docid": "9a898839170eac251d76c0ad96338106",
"text": "Being new does not allow me yet to vote on your question, but what a good question it is. We share our opinion in separating finances in our very well going mariage. Currently I have found a sort of okay solution in two websites. These are http://www.yunoo.nl and http://www.moneytrackin.com/. You can actually tag spendings with multiple tags. I don't like the idea that the data is on a remote server, but since I have not found a proper local software solution, I just naively trust their promise that your data is save. Then again our financial situation is not that special.",
"title": ""
},
{
"docid": "84624381b7624dde4f8ca75a69dde84c",
"text": "Websites like neobudget dot com or mint dot com can help you see where your money is going, especially if you use mostly checks, debit cards, or credit cards for your purchases. They are less useful if you use cash often.",
"title": ""
},
{
"docid": "c22272852da2e6c84646ec8f569de306",
"text": "I'd say its time to merge finances!",
"title": ""
},
{
"docid": "76204033de2f58b69cede37525d3fd94",
"text": "Call me old fashioned, but that sounds less like a marriage and more like a business partnership. Maybe there are business tools that would be useful.",
"title": ""
}
] |
[
{
"docid": "8ecad338e1109d173bd965ba1f489795",
"text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"",
"title": ""
},
{
"docid": "b2cf81c153c54c9234313f8aa4c5e512",
"text": "Get a lawyer to put this in contract form, with everything spelled out explicitly. What is fair is what the two of you agree upon. My own suggestion: Divide the property into things which are yours, his, and shared, then have each of you be responsible for all your costs plus half the shared costs, but get all the benefits of your half. That would mean that if he rents out his half, all the rental income is his; if you decide to live in your half, all the savings of not paying rent are yours. Each of you pays your half of mortgage, insurance, and other shared costs. Repairs to shared infrastructure should be done by someone both of you trust. If you agree the work is needed and he does it rather than your hiring someone, you owe him the appropriate percentage of the costs; the two of you will need to agree on whether you owe him for that percentage of his time as well. Make sure you agree on some mechanism for one person offering to buy the other out, or to sell their half to the other party... or potentially to someone else entirely. (Personally, I would try to do that at soonest opportunity, to avoid some of the ways this can go wrong -- see past comments about the hazards of guaranteeing a loan; this works or doesn't work similarly.) Does that address your question?",
"title": ""
},
{
"docid": "3230ced50890e9ff193c42bbecc20c96",
"text": "This would be my suggestion: I would approach the problem thinking about the loss of monthly income you (as a couple) will be facing due to your wife's change to a part time job and divide that loss between the two of you. This means that if she goes from 2200 to 1100 monthly, you'd be losing 1100 per month. To share this loss, you could repay your wife your part of the loss (550) so both of you are 550 euro down. However, this 550 loss is a bigger burden for your wife than it is for you, so this amount could be adjusted to make up for this inequality. To make calculations simple and avoid developing a complicated model, you could give the 800 euro above your 3k to your wife for as long as she has to work part time.",
"title": ""
},
{
"docid": "3950f1ad4e77c82d99f9948bacb7260b",
"text": "These earnings will likely have tax implications, depending on where in the world you are. So, your budget concerns not nearly as important as having an honest conversation about money with your husband. Better for him to be mad about the truth than to continue the lie, and potentially have this become a much larger legal, not just marital, problem.",
"title": ""
},
{
"docid": "4f7f94e3e875f0372c59f6f6d08ac30f",
"text": "\"Before you are married, I recommend keeping your finances separate. However, once you are married, I recommend combining your finances completely. In my opinion, marriage works best when you work together as a team, a single unit. You no longer have \"\"his money\"\" and \"\"her money,\"\" or \"\"his income\"\" and \"\"her income.\"\" Nor is there \"\"his debt\"\" and \"\"her debt.\"\" There is only \"\"our money,\"\" \"\"our income,\"\" \"\"our debt,\"\" and \"\"our budget.\"\" Indeed, if you are the one with less debt, isn't it in your household's best interest to help eliminate your spouse's debt as fast as possible? If you are the one with more income/employment, how do you quantify the monetary value of the spouse who stays at home more and manages the household? You can't, and it is best not to try. Instead, pool together all income and expenses, and work together to meet common goals. To do this, open up a joint bank account and close your individual accounts. Meet on a regular basis to decide your household budget. If you do that, it doesn't matter who is responsible for the mechanics of paying the bills or balancing the budget. These tasks just get assigned to someone, just like any other household chore. Usually, one of you will be more financially minded than the other, and that person will take the lead in setting the budget, paying the bills, balancing the checkbook, etc. However, it is important that both people are aware of what is going on and have access to the financial information. In our house, I am the one who takes the lead on financial matters. I pay the bills (out of our joint accounts) and set the monthly budget using YNAB software. However, my wife has the ability to look at YNAB at any time to see the budget, and she can log into the bank website to see the transactions there as well. No secrets. To be clear, we each have a small amount of cash/fun money that we can spend without worrying about checking in with the spouse on every little thing. But this is a small percentage of our budget, and we talk to each other before spending any significant amount of money.\"",
"title": ""
},
{
"docid": "ff94a74f6bff825a00d09b2a42624887",
"text": "\"Have her chip in for the regular expenses, utilities, food, etc., and a bit for \"\"rent.\"\" Then tell her to be sure to deposit to her retirement account, preferably a matched 401(k). It's admirable to want her to build 'equity' but it's pretty convoluted. You can't actually give her ownership, and in the event you break up (I know you won't, but this is to help other readers) you'll have to pay her back a lump sum when she moves out. That might not be so easy.\"",
"title": ""
},
{
"docid": "6d7b6bb090df4748ab7fa0ddccdc38a7",
"text": "For example: Dinner together: DR Food 50 DR Spouse 50 CR Credit Card 100",
"title": ""
},
{
"docid": "1f9ba9aa9426ce230ecdcf7d11dfdf82",
"text": "If it makes your finances easier, why not? My wife and I had his/hers/our since before we were married. I also have an account to handle transactions for my rental property, and one extra for PayPal use. I was paranoid to give out a checking account number with authorization for a third party to debit it, so that account has a couple hundred dollars, maximum. All this is just to explain that your finances should be arranged to simplify your life and make you comfortable.",
"title": ""
},
{
"docid": "590852108b061575c8815783e9c46e36",
"text": "\"My suggestion would be that you're looking at this the wrong way, though for good reasons. Once you are a family, you should - and, in most cases I've seen, will - think of things differently than you do now. Right now, your post above is written from a selfish perspective. Not to be insulting, and not implying selfish is a bad thing - I don't mean it negatively. But it is how you're defining this problem: from a self-interested, selfish point of view. \"\"Fair\"\" and \"\"unfair\"\" only have meaning from this point of view; something can only be unfair to you if you come from a self-centered viewpoint. Try to think of this from a family-centric viewpoint, and from your significant other's point of view. You're absolutely right to want both of you to be independent financially as far as is possible; but think about what that means from all three points of view (your family's, yours, and hers)? Exactly what it means will depend on the two of you separately and together, but I would encourage you to start with a few basics that make it likely you'll find a common ground: First of all, ensure your significant other has a retirement account of her own that is funded as well as yours is. This will both make life easier if you split up, and give her a safety net if something happens to you than if you have all of the retirement savings. I don't know how your country manages pensions or retirement accounts, but figure out how to get her into something that is as close to equal to yours as possible. Make sure both of you have similar quality credit histories. You should both have credit cards in your own names (or be true joint owners of the accounts, not just authorized users, where that is possible), and both be on the mortgage/etc. when possible. This is a common issue for women whose spouse dies young and who have no credit history. (Thanks @KateGregory for reminding me on this one) Beyond that, work out how much your budget allows for in spending money for the two of you, and split that equally. This spending money (i.e., \"\"fun money\"\" or money you can do whatever you like with) is what is fundamentally important in terms of financial independence: if you control most of the extra money, then you're the one who ultimately has control over much (vacations, eating out, etc.) and things will be strained. This money should be equal - whether it is literally apportioned directly (each of you has 200 a month in an account) or simply budgeted for with a common account is up to you, whatever works best for your personal habits; separate accounts works well for many here to keep things honest. When that money is accounted for, whatever it is, split the rest of the bills up so that she pays some of them from her income. If she wants to be independent, some of that is being in the habit of paying bills on time. One of you paying all of the bills is not optimal since it means the other will not build good habits. For example, my wife pays the warehouse club credit card and the cell phone bill, while I pay the gas/electric utilities. Whatever doesn't go to spending money and doesn't go to the bills she's personally responsible for or you're responsible for (from your paycheck) should go to a joint account. That joint account should pay the larger bills - mortgage/rent, in particular - and common household expenses, and both of you should have visibility on it. For example, our mortgage, day-care costs, major credit card (which includes most of our groceries and other household expenses) come from that joint account. This kind of system, where you each have equal money to spend and each have some household responsibilities, seems the most reasonable to me: it incurs the least friction over money, assuming everyone sticks to their budgeted amounts, and prevents one party from being able to hold power over another. It's a system that seems likely to be best for the family as a unit. It's not \"\"fair\"\" from a self-centered point of view, but is quite fair from a family-centered point of view, and that is the right point of view when you are a family, in my opinion. I'll emphasize here also that it is important that no one party hold the power, and this is set up to avoid that, but it's also important that you not use your earning power as a major arguing point in this system. You're not \"\"funding her lifestyle\"\" or anything like that: you're supporting your family, just as she is. If she were earning more than you, would you cut your hours and stay at home? Trick question, as it happens; regardless of your answer to that question, you're still at the same point: both of you are doing the thing you're best suited for (or, the thing you prefer). You're both supporting the family, just in different ways, and suggesting that your contribution is more valuable than hers is a great way to head down the road to divorce: it's also just plain incorrect. My wife and I are in almost the identical situation - 2 kids, she works part time in the biological sciences while spending plenty of time with the kids, I'm a programmer outearning her significantly - and I can tell you that I'd more than happily switch roles if she were the bread earner, and would feel just as satisfied if not more doing so. And, I can imagine myself in that position, so I can also imagine how I'd feel in that position as far as how I value my contribution.\"",
"title": ""
},
{
"docid": "42316c01d24d3b14292c14cd4bcae9c8",
"text": "\"My answer will suck but it comes from someone who has been married: You can't control another person or convince them to do something. What you can do is identify what they value and show how saving money increases their opportunities in what they value, but understand that the person could see what you're saying as invalid too. If you're single and reading this, this is why you verify that the person has similar values to you. Think of it like someone who wants good gas mileage: you show them a car that gets 60MPG, and immediately they say, \"\"Well, but that's not a cool car.\"\" So their value isn't the miles per gallon, and you may find the same is true with your spouse. India is paying more interest than the US and Europe in their savings accounts (I believe the benchmark interest rate is 7.5%), so - assuming your spouse values more money - showing him how to use money in savings to passively earn money might be a technique that works. But it may mean nothing to him because it's (1) not his actual value or (2) isn't enough to matter in his mind. In other words, this is all sales and whatever you do (and this is regardless of gender), don't manipulate, as in the long run that tends to build resentment. If there is a specific problem that you know he sees as a major issue and saving money can help, I'd recommend showing how savings would help with that problem. People generally like solutions to problems; just remember, what you think he sees as a problem may not be what he sees as a problem. This is why I chuckle when I see single people give married people advice; you can't just \"\"convince the person enough\"\" because you are not that person; we have to speak their language and we should be careful to avoid creating resentment. The part that sucks (or doesn't depending on who you ask) is that if we can't convince others to do it, we should do it ourselves. Either (1) earn money independently yourself when applicable (realizing that you are about to have a child and may be limited), or (2) save the money that you and your spouse have agreed that you're allotted, if this applies to your situation (a few spouses divide income even when one is an earner).\"",
"title": ""
},
{
"docid": "69f20bd44d5ef7300d1080dd2bf9ccce",
"text": "\"There are different approaches, but here is what we do and what I recommend. Now that you are officially a married couple, open a joint bank account, and eliminate your individual accounts. There are several reasons for this. Having a joint account promotes unity and teamwork. When you only have a joint account, you do not have \"\"your income\"\" and \"\"her income,\"\" or \"\"your expenses\"\" and \"\"her expenses.\"\" You work together in everything. You discuss your goals and set your household budget together. If one of you makes more money than the other, that person is no longer \"\"worth more,\"\" because your incomes are pooled together. If one person with a higher income has more in their account than the other person does, it can lead to envy, which you do not want in your marriage. Having a joint account is more efficient and makes more sense. With separate accounts, who pays the rent/mortgage? Who pays the utilities, or buys the food? If you have separate accounts, it takes a lot of work to worry about what is \"\"fair\"\" when deciding how to divide up the expenses. With a single household budget and a joint account, you decide together what the household expenses are, and they get paid from one account. If one of you has debt, you both have debt. You work together to get it paid off and strengthen your financial situation in the process. Having a joint account forces you to discuss your finances together. Working toward common financial goals together is crucial in a strong marriage, but if you maintain your separate accounts, you might be tempted to put off these discussions until you are forced to by life circumstances. It is better to work together from the start, and joining your finances facilitates that. You are intending your marriage to last. Live your financial life like you believe that you are a team for life. If you live in a community property state, separate accounts are a fiction anyway; everything is treated as if it was pooled together in the event of a divorce. I understand that if you are used to having your own money, it can be difficult to give up that sole control over your income, but in my opinion, it is worth it. You will certainly hear of examples from couples who maintain separate accounts and make it work. In my humble opinion, combining your finances completely is easier to do right.\"",
"title": ""
},
{
"docid": "a3ac3834ecfdcdd0f6bcca73ae4e4620",
"text": "First: great job on getting it together. This is good for your family in any respect I can think of. This is a life long process and skill, but it will pay off for you and yours if you work on it. Your problem is that you don't seem to know where you money goes. You can't decide how whacky your expenses are until you know what they are. Looking at just your committed expenses and ignore the other stuff might be the problem here. You state that you feel you live modestly, but you need to be able to measure it completely to decide. I would suggest an online tool like mint.com (if you can get it in your country) because it will go back for 90 days and get transactions for you. If you primarily work in cash, this isn't helpful, but based on your credit card debt I am hoping not. (Although, a cash lifestyle would be good if you tend to overspend.) Take the time and sort your transactions into categories. Don't setup a budget, just sort them out. I like to limit the number of categories for clarity sake, especially to start. Don't get too crazy, and don't get too detailed at first. If you buy a magazine at the grocery store, just call it groceries. Once you know what you spend, then you can setup a budget for the categories. If somethings are important, create new categories. If one category is a problem, then break it down and find the specific issue. The key is that you budget not be more than you earn but also representative of what you spend. Follow up with mint every other day or every weekend so the categorization is a quick and easy process. Put it on your iPhone and do it at every lunch break. Share the information with your spouse and talk about it often.",
"title": ""
},
{
"docid": "ee53d9a7fe08b101f6f574f62e7ee25e",
"text": "\"I think the best way to handle her fears is to explain the income and expenses of the household overall, then explain the savings and investment strategies, retirement projections, and then finally explain a concrete number for allowable monthly or annual discretionary expenses (including charity, entertainment, vacations, etc.). You may have delicate relationship reasons for not doing this, but if you want a reasonable discussion, I would leave it this way. Please do not open with the question \"\"how much do you think we make\"\" or anything similar because that comes off as a trick or a quiz. It sounds very condescending and highlights how much more you know about finances than she does. It also highlights subconsciously how little mental control she has over the finances, which is likely to make her feel greater anxiety. You should emphasize how secure things are and explain why all the savings and investments you're using are conservatively likely to keep her financially secure. This sets the ground for her to be comfortable with the fact that she now has money, in contrast to perhaps a less financially secure personal history. After that, charitable expenses come out of the expense budget, same as vacations, recreation, etc. If it does not implicate financial security, then it's not dangerous to spend on charity. The alternate approach is to avoid the big financial talk and just propose a few small contributions this year. Then increase it every year incrementally. That may be easier to swallow once there's a psychological track record of donating without incident. Please go into the discussion remembering three things: But above all, please do not open up with a quiz. Have a simple discussion with her. Give her time to consider the expenses budget relative to the savings budget as a proportion of income. And then allow for the fact that she may place a strong premium on savings and a strong discount on charity.\"",
"title": ""
},
{
"docid": "8cfb67b87411b8ab1a0a5d43f0907389",
"text": "In my view you are going through quite a bit of logistics to achieve this. Best is drop this idea. If all of you are paying equally, then there is virtually no gain. A better pact is not to gift each other on wedding. We want to open a joint fixed deposit account in name of each one of us which should be locked-in till 2020 Yes it is possible to have Joint Account with multiple names. Ideally all should be present or a Power of Attorney can be created to include names of people who are not present. We want our money to be risk free and secured. Risk free and secured will mean Fixed Deposits.",
"title": ""
},
{
"docid": "81b2ae9f0162027b20065683189591a2",
"text": "Option three is our preferred method, and we never argue about money. First we did a budget to work out ALL monthly joint out-goings (mortgage, bills, grocery etc). Then we each agreed who would pay what into the joint or household account - at the moment, I earn more than my wife, so I pay more, but we sit down every three or four months, to see if it needs adjusting. This way, we each keep our own individual accounts private, but pay what is necessary into the household account. We also set up a joint savings account; often at the end of the month, we'll have a little extra left in the household acount, and we siphon that off into joint savings to cover future unexpected costs - looks like our tumble dryer is on its last spin cycle at the moment, for example, and the joint savings account will be able to cover the cost of replacement. it all takes a bit of administration - but, as I say, we've never had a cross word about money, so the system seems to work.",
"title": ""
}
] |
fiqa
|
dd22e723cf1cc27a63ee885cf96a7776
|
What tax year does my income get assigned to if my client sends the payment in December but I receive it in January?
|
[
{
"docid": "9dd31869c4426125f4661274ce6acfe0",
"text": "Confused? see your CPA",
"title": ""
}
] |
[
{
"docid": "a4bd4532cbf311f482521dedb9c34ea4",
"text": "\"As long as you paid 100% of your last year's tax liability (overall tax liability, the total tax to pay on your 1040) or 90% of the total tax liability this year, or your underpayment is no more than $1000, you won't be penalized as long as you pay the difference by April 15th. That's per the IRS. I don't know where the \"\"10% of my income\"\" came from, I'm not aware of any such rule.\"",
"title": ""
},
{
"docid": "42491be125040c117b0ed28d837d1b74",
"text": "Form 1099-misc reports PAYMENTS, not earnings. This does not imply the EARNINGS are not taxable in the year they were earned.",
"title": ""
},
{
"docid": "1b9bce9854b27eaf8e901277ae0536e3",
"text": "If you're paying a foreign person directly - you submit form 1042 and you withhold the default (30%) amount unless the person gives you a W8 with a valid treaty claim and tax id. If so - you withhold based on the treaty rate. From the IRS: General Rule In general, a person that makes a payment of U.S. source income to a foreign person must withhold the proper amount of tax, report the payment on Form 1042-S and file a Form 1042 by March 15 of the year following the payment(s). I'd suggest to clarify this with a licensed tax adviser (EA/CPA licensed in your State) who's familiar with this kind of issues, and not rely on free advice on the Internet or DIY. Specific cases require specific advice and while the general rule above holds in most cases - in some there are exceptions.",
"title": ""
},
{
"docid": "a5408e30c2d6c43f2afb3f4f8abe26f3",
"text": "Why would the IRS be coming after you if you reported the income? If you reported everything, then the IRS will use the 1099 to cross-check, see that everything is in order, be happy and done with it. The lady was supposed to give you the 1099 by the end of January, and she may be penalized by the IRS for being late, but as long as you/wifey reported all the income - you're fine. It was supposed to be reported on Schedule C or as miscellaneous income on line 21 (schedule C sounds more suitable as it seems that your wifey is in a cleaning business). But there's no difference in how you report whether you got 1099 or not, so if you reported - you should be fine.",
"title": ""
},
{
"docid": "7774c2bceeeac395e113b4bb31b43ee7",
"text": "Many of the custodians (ie. Schwab) file for an extension on 1099s. They file for an extension as many of their accounts have positions with foreign income which creates tax reporting issues. If they did not file for extension they would have to send out 1099s at the end of January and then send out corrected forms. Obviously sending out one 1099 is cheaper and less confusing to all. Hope that helps,",
"title": ""
},
{
"docid": "8eee794d1fa47d5da44a6d71f612dcd0",
"text": "Well, consult with a CPA, but I guess you don't have to pay taxes on 2012 with a correct accounting system since this is the money you are going to completely earn within 2013 so you can record it as future earning which is called deferred revenue or advance payments or unearned revenue.",
"title": ""
},
{
"docid": "de9f45b8acc39f4bc9c42744ee75b90b",
"text": "I remember reading in an earlier version of Pub 590 (or possibly the Instructions for Form 8606) that timely contributions for Year X to an IRA are deemed to have been made on January 1 of Year X regardless of when they were actually made, but I don't seem to be able to find it now in current versions of Pubs 590a or 590b and so cannot include a citation of chapter and verse. Be that as it may, the calculations on on Form 8606 Part I effectively track basis on an annual basis rather than on a daily basis, and so the fact that the Traditional IRA has a zero balance (and basis 0 too) at some time during the year doesn't matter in the least. In detail (though you didn't ask for it) Note that the whole $6500 that you put in remains non-deductible in its entirety, but you owe taxes on only $93,900 of that $100K that you rolled over into a Roth IRA and not on the whole $100K as you were assuming would have been the case. So, in effect, of that $6500 nondeductible contribution to your Traditional IRA, you did really get to deduct $6100 from your taxable income for 2016, and make only a $400 nondeductible contribution, exactly equal to your basis in your Traditional IRA as per the Form 8606 calculations. I can only assume that the software package that you are using reproduces the above calculations exactly and does what the IRS says you must do on Form 8606 rather than what you get by tracking the basis on a daily basis. IRS regulations and instructions are not necessarily the same as what the tax law says; they are interpretations of the tax law based on what the IRS understands the tax law to say. People have challenged various specific IRS regulations and interpretations as being different from what the law says in Tax Court and been successful in some cases and failed in others. If you believe that tracking basis on a daily basis is what the law says (instead of just being reasonable and rational: reasonableness and rationality are not required either of Congress in the laws that they write or the IRS regulations that interpret the laws), you should take up the matter with the IRS or the Tax Court.",
"title": ""
},
{
"docid": "3a00d5959b32ca0bc12b319ae14ed2da",
"text": "IRS pub 521 has all the information you need. Expenses reimbursed. If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. See Choosing when to deduct, next. If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21 This is not unusual. Anybody who moves near the end of the year can have this problem. The 39 week time test also can be an issue that span over 2 tax years. I would take the deduction for the expenses as soon a I could, and then count the income in the later year if they pay me back. IF they do so before April 15th, then I would put them on the same tax form to make things easier.",
"title": ""
},
{
"docid": "653e490ace6c1b315324cea013d7d9ef",
"text": "Not correct. First - when you say they don't tax the reimbursement, they are classifying it in a way that makes it taxable to you (just not withholding tax at that time). In effect, they are under-withholding, if these reimbursement are high enough, you'll have not just a tax bill, but penalties for not paying enough all year. My reimbursements do not produce any kind of pay stub, they are a direct deposit, and are not added to my income, not as they occur, nor at year end on W2. Have you asked them why they handle it this way? It's wrong, and it's costing you.",
"title": ""
},
{
"docid": "45315a7f2e7a30b391efa8918d80a94a",
"text": "\"We will bill our clients periodically and will get paid monthly. Who are \"\"we\"\"? If you're not employed - you're not the one doing the work or billing the client. Would IRS care about this or this should be something written in the policy of our company. For example: \"\"Every two months profits get divided 50/50\"\" They won't. S-Corp is a pass-through entity. We plan to use Schedule K when filing taxes for 2015. I've never filled a schedule K before, will the profit distributions be reflected on this form? Yes, that is what it is for. We might need extra help in 2015, so we plan to hire an additional employee (who will not be a shareholder). Will our tax liability go down by doing this? Down in what sense? Payroll is deductible, if that's what you mean. Are there certain other things that should be kept in mind to reduce the tax liability? Yes. Getting a proper tax adviser (EA/CPA licensed in your State) to explain to you what S-Corp is, how it works, how payroll works, how owner-shareholder is taxed etc etc.\"",
"title": ""
},
{
"docid": "0882286a3e1d74b65a3bac64fc370be1",
"text": "I think you should consult a professional with experience in 83(b) election and dealing with the problems associated with that. The cost of the mistake can be huge, and you better make sure everything is done properly. For starters, I would look at the copy of the letter you sent to verify that you didn't write the year wrong. I know you checked it twice, but check again. Tax advisers can call a dedicated IRS help line for practitioners where someone may be able to provide more information (with your power of attorney on file), and they can also request the copy of the original letter you've sent to verify it is correct. In any case, you must attach the copy of the letter you sent to your 2014 tax return (as this is a requirement for the election to be valid).",
"title": ""
},
{
"docid": "83b0ba3e5841488f99a591f1984b9dc7",
"text": "\"Your question does not say this explicitly, but I assume that you were once a W-2 employee. Each paycheck a certain amount was withheld from your check to pay income, social security, and medicare taxes. Just because you did not receive that amount of money earned does not mean it was immediately sent to the IRS. While I am not all that savvy on payroll procedures, I recall an article that indicated some companies only send in withheld taxes every quarter, much like you are doing now. They get a short term interest free loan. For example taxes withheld by a w-2 employee in the later months of the year may not be provided to the IRS until 15 January of the next year. You are correct in assuming that if you make 100K as a W-2 you will probably pay less in taxes than someone who is 100K self employed with 5K in expenses. However there are many factors. Provided you properly fill out a 1040ES, and pay the correct amount of quarterly payments, you will almost never owe taxes. In fact my experience has been the forms will probably allow you to receive a refund. Tax laws can change and one thing the form did not include last year was the .9% Medicare surcharge for high income earners catching some by surprise. As far as what you pay into is indicative of the games the politicians play. It all just goes into a big old bucket of money, and more is spent by congress than what is in the bucket. The notion of a \"\"social security lockbox\"\" is pure politics/fantasy as well as the notion of medicare and social security taxes. The latter were created to make the actual income tax rate more palatable. I'd recommend getting your taxes done as early as possible come 1 January 2017. While you may not have all the needed info, you could firm up an estimate by 15 Jan and modify the amount for your last estimated payment. Complete the taxes when all stuff comes in and even if you owe an amount you have time to save for anything additional. Keep in mind, between 1 Jan 17 and 15 Apr 17 you will earn and presumably save money to use towards taxes. You can always \"\"rob\"\" from that money to pay any owed tax for 2016 and make it up later. All that is to say you will be golden because you are showing concern and planning. When you hear horror stories of IRS dealings it is most often that people spent the money that should have been sent to the IRS.\"",
"title": ""
},
{
"docid": "2d85c285b00fc847c24726b4047723ea",
"text": "This is a common occurrence, I know people who moved and then only remember the next spring during tax season that they never filed a new state version of a W-4. Which means for 3 or 4 months in the new year money is sent to the wrong state capital, and way too much was sent the previous year. In the spring of 2016 you should have filed a non-resident tax form with Michigan. On that form you would specify your total income numbers, your Michigan income numbers, and your other-state income numbers; with Michigan + other equal to total. That should have resulted in getting all the state taxes that were sent to Michigan returned. It is possible that the online software is unable to complete the non-resident tax form. Not all forms and situations can be addressed by the software. So you may need to fill out paper forms. You should be able to find what you need on the state of Michigan website for 2015 Taxes. A quick read shows that you will probably need the Michigan 1040, schedule 1 and Schedule NR You may run into an issue if your license, car registration, voter registration, and other documentation point to you being a resident for the part of the year you earned that income. That means you will have to submit Form 3799 Statement to Determine State of Domicile You want to do this soon because there are deadlines that limit how far back you can files taxes. The state may also get tax information from the IRS and could decide that all your income from 2015 should have applied to them, so they will be sending you a tax bill plus penalties for failure to file.",
"title": ""
},
{
"docid": "3f8d9c0e276776b3ddd1f8b084e6b365",
"text": "In the United States the general policy is that the IRS would consider it income when you have access to the money. I work for a company that has a contract with another company. Near the end of the year I turn in a time card that has my hours that I worked as of that date. Because they don't pay me until early January the money on the check is counted in the new year. I couldn't touch the money until they issued the check. If they had paid me on December 31st it would have counted as the old year, even if I only had a short window to have access to it before the year ended. It would even count as old year money if I held on to the December check, but didn't deposit it until March. So it would become income when you could use it. So If you could access it via a check, or debit card, or transfer it to the bank it is now income. Of course that is in the United States. You would need to see what the situation is in Singapore.... The edge cases always depend on the country.",
"title": ""
},
{
"docid": "0dae50b5d6c8199652419e5dd726b2aa",
"text": "I will answer this question broadly for various jurisdictions, and also specifically for the US, given the OP's tax home: Generally, for any tax jurisdiction If your tax system relies on periodic prepayments through the year, and a final top-up/refund at the end of the year (ie: basically every country), you have 3 theoretical goals with how much you pre-pay: Specifically, for the U.S. All information gathered from here: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes. In short, depending on your circumstance, you may need to pay quarterly estimated tax payments to avoid penalties on April 15th. Even if you won't be penalized, you, may benefit from doing so anyway (to force yourself to save the money necessary by April 15th). I have translated the general goals above, into US-specific advice:",
"title": ""
}
] |
fiqa
|
1b76f3f8e862e0103e9e5ec1dc3fb140
|
What factors go into choosing residency?
|
[
{
"docid": "10d06e9d9bdbf2270cf09d670639571a",
"text": "A couple of thoughts. Tax benefits are the usual reasons to decide on one residency or another. International tax law is complex, and it's probably best to consult a professional. Certainly without knowing which the other country is I would not want to hazard a guess. If he is really not going to be taxed on the other country, residing there would seem sensible. But... In Canada residency for tax purposes is established for an entire year. If you are resident for more than six months your salary for the year is taxable. Conversely if you are present for less than six months you are not taxable. (This may have changed - it's been twenty years since I did this.) The other issue is healthcare. If you are not resident in Ontario you are not eligible for free healthcare, I believe. He might have to purchase supplemental insurance if he returns occasionally.",
"title": ""
}
] |
[
{
"docid": "76584b772b72dea8ca84e6bf733008b1",
"text": "The Kraemer and Kraemer Panama has a wide range of sorts of immigration in panama visas and residency programs offering perpetual residency, and by and large, full citizenship with an identification. Panama is universally perceived as the Top Offshore nation. It draws in individuals from everywhere throughout the world who are intrigued immigration in panama for Permanent Residency. They come to appreciate the remarkable advantages that exclusive Panama brings to the table. Some talented experts and specialists desire a vocation while others are setting up universal new companies.",
"title": ""
},
{
"docid": "5cb7a20726eaded6ef2c624075c07621",
"text": "In general it's mostly inertia: There are tons of reasons and they would vary from region to region.",
"title": ""
},
{
"docid": "d375d8994b009877061e2a7b520df26b",
"text": "This is the exact reason I don't live in an expensive city. I turned down a job offer in DC paying 60k right out of school because I could get a similar salary in the midwest and pay about half as much in living expenses. --Sent from a 2 bedroom apartment in an urban area with included laundry facilities for $750/month.",
"title": ""
},
{
"docid": "4b90eb920f208ceaca6d0de6b2638a9c",
"text": "It's impossible to be definite without knowing the details of your plans, so you should make sure you consult the providers. However there are some general principles: However all that is the general case, and yours might be different. So look up the rules of each plan.",
"title": ""
},
{
"docid": "30c592d44c947ee13ed8d67dc292d154",
"text": "\"Here are some important things to think about. Alan and Denise Fields discuss them in more detail in Your New House. Permanent work. Where do you want to live? Are there suitable jobs nearby? How much do they pay? Emergency fund. Banks care that you have \"\"reserves\"\" (and/or an unsecured line of credit) in case you have a run of bad luck. This also helps with float the large expenses when closing a loan. Personal line of credit. Who are you building for? If you are not married, then you should consider whether building a home makes that easier, or harder. If you hope to have kids, you should consider whether your home will make it easier to have kids, or harder. If you are married (or seriously considering it), make sure that your spouse helps with the shopping, and is in agreement on the priorities and choices. If you are not married, then what will you do if/when you get married? Will you sell? expand? build another house on the same lot? rent the home out? Total budget. How much can the lot, utilities, permits, taxes, financing charges, building costs, and contingency allowance come to? Talk with a banker about how much you can afford. Talk with a build-on-your-lot builder about how much house you can get for that budget. Consider a new mobile or manufactured home. But if you do choose one, ask your banker how that affects what you can borrow, and how it affects your rates and terms. Talk with a good real estate agent about how much the resale value might be. Finished lot budget. How much can you budget for the lot, utilities, permits required to get zoning approval, fees, interest, and taxes before you start construction? Down payment. It sounds like you have a plan for this. Loan underwriting. Talk with a good bank loan officer about what their expectations are. Ask about the \"\"front-end\"\" and \"\"back-end\"\" Debt-To-Income ratios. In Oregon, I recommend Washington Federal for lot loans and construction loans. They keep all of their loans, and service the loans themselves. They use appraisers who are specially trained in evaluating new home construction. Their appraisers tend to appraise a bit low, but not ridiculously low like the incompetent appraisers used by some other banks in the area. (I know two banks with lots of Oregon branches that use an appraiser who ignores 40% of the finished, heated area of some to-be-built homes.) Avoid any institution (including USAA and NavyFed) that outsources their lending to PHH. Lot loan. In Oregon, Washington Federal offers lot loans with 30% down payments, 20-year amortization, and one point, on approved credit. The interest rate can be a fixed rate, but is typically a few percentage points per year higher than for a mortgage secured by a permanent house. If you have the financial wherewithal to start building within two years, Washington Federal also offers short-term lot loans. Ask about the costs of appraisals, points, and recording fees. Rent. How much will it cost to rent a place to live, between when you move back to Oregon, and when your new home is ready to move into? Commute. How much time will it take to get from your new home to work? How much will it cost? (E.g., car ownership, depreciation, maintenance, insurance, taxes, fuel? If public transportation is an option, how much will it cost?) Lot availability. How many are there to choose from? Can you talk a farmer into selling off a chunk of land? Can you homestead government land? How much does a lot cost? Is it worth getting a double lot (or an extra large lot)? Utilities. Do you want to live off the grid? Are you willing to make the choices needed to do that? (E.g., well, generator, septic system, satellite TV and telephony, fuel storage) If not, how much will it cost to connect to such systems? (For practical purposes, subtract twice the value of these installation costs from the cost of a finished lot, when comparing lot deals.) Easements. These provide access to your property, access for others through your property, and affect your rights. Utility companies often ask for far more rights than they need. Until you sign on the dotted line, you can negotiate them down to just what they need. Talk to a good real estate attorney. Zoning. How much will you be allowed to build? (In terms of home square footage, garage square footage, roof area, and impermeable surfaces.) How can the home be used? (As a business, as a farm, how many unrelated people can live there, etc.) What setbacks are required? How tall can the building(s) be? Are there setbacks from streams, swamps, ponds, wetlands, or steep slopes? Choosing a builder. For construction loans, banks want builders who will build what is agreed upon, in a timely fashion. If you want to build your own house, talk to your loan officer about what the bank expects in a builder. Plansets and permits. The construction loan process. If you hire a general contractor, and if you have difficulties with the contractor, you might be forced to refuse to accept some work as being complete. A good bank will back you up. Ask about points, appraisal charges, and inspection fees. Insurance during construction. Some companies have good plans -- if the construction takes 12 months or less. Some (but not all) auto insurance companies also offer good homeowners' insurance for homes under construction. Choose your auto insurance company accordingly. Property taxes. Don't forget to include them in your post-construction budget. Homeowners' insurance. Avoid properties that need flood insurance. Apply a sanity check to flood maps -- some of them are unrealistic. Strongly consider earthquake insurance. Don't forget to include these costs in your post-construction budget. Energy costs. Some jurisdictions require you to calculate how large a heating system you need. Do not trust their design temperatures -- they may not allow for enough heating during a cold snap, especially if you have a heat pump. (Some heat pumps work at -10°F -- but most lose their effectiveness between 10°F and 25°F.) You can use these calculations, in combination with the number of \"\"heating degree days\"\" and \"\"cooling degree days\"\" at your site, to accurately estimate your energy bills. If you choose a mobile or manufactured home, calculate how much extra its energy bills will be. Home design. Here are some good sources of ideas: A Pattern Language, by Christopher Alexander. Alexander emphasizes building homes and neighborhoods that can grow, and that have niches within niches within niches. The Not-So-Big House, by Sarah Susanka. This book applies many Alexander's design patterns to medium and large new houses. Before the Architect. The late Ralph Pressel emphasized the importance of plywood sheathing, flashing, pocket doors, wide hallways, wide stairways, attic trusses, and open-truss or I-joist floor systems. Lots of outlets and incandescent lighting are good too. (It is possible to have too much detail in a house plan, and too much room in a house. For examples, see any of his plans.) Tim Garrison, \"\"the builder's engineer\"\". Since Oregon is in earthquake country -- and the building codes do not fully reflect that risk -- emphasize that you want a building that would meet San Jose, California's earthquake code.\"",
"title": ""
},
{
"docid": "aa43e6541ae97a2db945bd35043d8199",
"text": "\"Consider that there are some low-probability, high-impact risk factors involved with property management. For example, an old house has lead paint and may have illegal modifications, unknown to you, that pose some hazard. All of your \"\"pros\"\" are logical, and the cons are relatively minor. Just consult an attorney to look for potential landmines.\"",
"title": ""
},
{
"docid": "e3825f236f55ce6c0cc79c0570948647",
"text": "If you buy a townhouse, you often are in a condominium arrangement in the US (when you're really in a rowhouse in particular). So that's a downside right away: you have to have a HOA, or at least some sort of common agreement, though it might not have formal meetings. Everyone who owns an interest in the entire group of townhouses gets some say in landscaping and such. Beyond that though, townhouses (and similarly, condominiums) are often easier to own (as they don't have as much maintenance that you have to do), but more expensive because you pay someone to do it (the landscaping, the external repairs, etc.). You likely don't have as much control over what the external looks like (because you have to be in agreement with the other owners), but you also don't have to do the work, unless your agreement is to collectively do the mowing/landscaping, which you should know in advance. I wouldn't underestimate the value of easier, by the way; it's very valuable to not have to deal with as many repairs and to be able to go a week without thinking about mowing or watering. In that sense it can be a nice transition into ownership, getting some-but-not-all of the obligations. But if that's something you really value, doing the landscaping and mowing and whatnot, that's relevant too. You can always tell your realtor to look for townhouses where the owners do some/all of the landscaping, though that opens up a different can of worms (where you rely on others to do work that they may not do, or do well). They're also somewhat noisier; you may be sharing a wall (but not necessarily, air-gap townhouses do exist) and either way will be closer to your neighbors. Does noise bother you? Conversely, are you noisy? In a college town this is probably something to pay attention to. Price wise, of course stay well within your means; if being close to the city center is important, that may lead you to buy a townhouse in that area. If being further out isn't a problem, you'll probably have similar choices in terms of price as long as you look in cheaper areas for single family homes.",
"title": ""
},
{
"docid": "dd398746d771ceaa6c0128e51261ebe9",
"text": "It's really all just speculation, we don't know what they're looking for. I do know from a roads perspective Boston in general can be difficult because trucks can't get in there easily from every direction. Western and newer builds that didn't grow up around colonial times seem preferred when I've spoken to logistics people. They'll also want a city capable of incubating trial platforms so Socal or NY could be huge. Atlanta and Austin as well. Boston seems to mostly have a surrounding metro population, yes, but it's also one of the furthest way from Seattle which isn't an advantage so much as a proximity thing.",
"title": ""
},
{
"docid": "befca39b45b47d5ed2e5ce06f2d7f473",
"text": "I won't be finalized with my thesis until Spring so I'm afraid all I could do was mention it with my research interests, but my director said my work so far has publication potential. He also said applying to Berkeley wouldn't be outrageous, our program has decent placements in econ programs, but he's not in finance and our school doesn't have a finance department so I'm not too sure how much credit to give that endorsement. By flagship I mean the states primary public university, University of Washington, Ohio State, etc. Thanks for the advice.",
"title": ""
},
{
"docid": "72296db194271c6d581e71202aec29c1",
"text": "Thank you so much for this! Like you said, I think I have a unique story and went to CC for both financial reasons and I had some personal issues that got in the way that I had to take care of. I guess my biggest fear is the whole resume issue, I put down my CC and my major (I have a 4.0 in all my econ/accounting/business classes that transferred) and cumulative GPA, but people have told me to not list my CC GPA, although then I have nowhere to list a GPA and it omits a lot of important information and part of my story. I listed my intended coursework at UCLA and my major/minor. I have made a list of some alumni that are MDs and VPs in the LA area, and I've been looking on LinkedIn for some recently graduated students, but I don't know how much of a help the recent grads will be.",
"title": ""
},
{
"docid": "bbee5019ab0ce46cad0addc381d33d86",
"text": "\"I met two MBA graduates from Harvard - both made VPs at large Canadian companies (i.e. $1B or greater annual revenue) after working 2-5 years as management consultants post-graduation - one is now a divisional president making over $500K in salary along. When I asked one of them (one that is not yet making $500K in salary) about the Harvard MBA difference, he said the brand-name and the network probably set it apart from others, since most MBA schools now uses the same material as Harvard's. I tend to agree with his thoughts - I never did felt the caliber of my professor had much to do with my ability to apply what I learn to practical use. In my own MBA education, the professor did more facilitation than \"\"teaching\"\". Apparently that is the norm, as MBA is less about being fed information than it is about demonstrating the ability to analyze and present information. Back to M.Attia's question, I would go with the highest ranked MBA education I could afford (both financially and lifestyle). A friend of mine was able to get his employer to pay for the $90K tuition fee from Rotman, along with job security for 5 years (not a bad idea in this economy). I settled for Lansbridge University in Fedricton because the flexibility of distance learning and cost was important to me, though I was able to get my employer to pay for the MBA after I started (I switched group within the company shortly after I started my MBA and my new boss was able to get the approval without locking me in).\"",
"title": ""
},
{
"docid": "479ce991ff6a95500e837133023aaa61",
"text": "Firstly, call up the company and speak to them over the phone. The right questions must be asked as this will make great difference. Questions are important because you would be able to get every possible information, so that you take the right decision.",
"title": ""
},
{
"docid": "71fb0f58bf678bac8ff4f3a3ffe9b587",
"text": "The physician shortage is mostly from the AMA lobbying to limit training slots that are paid for by the government to keep the supply of doctors trained in the US low and wages higher. Besides how often to US medical institutions just accept foreign medical degrees without demanding US education?",
"title": ""
},
{
"docid": "fd45428a5440e0c854325bd463132338",
"text": "Altough this may vary a lot depending on where you live and your actual finance, here what convinced me buying a home instead of renting : Other benefits :",
"title": ""
},
{
"docid": "2c792f6c1c7e9c12cdb24f46e20086d9",
"text": "Many potential expats have exactly one choice of destination, based on a job offer or a spouse or some other situation, but many potential expats can choose nearly anywhere in the world. Especially retired people and location-independent people with good incomes, some have the ability to spin the globe and move to a place they feel will suit them well.",
"title": ""
}
] |
fiqa
|
10a093d07d924050436ee05b9991cb0a
|
Back of Check Images are Blank and not Endorsed
|
[
{
"docid": "a604457a8b2691dc2a260e9b318da026",
"text": "\"In general, a lack of endorsement (meaning nothing written by the receiver on the back of the check) is equivalent to it being endorsed \"\"as deposit only\"\" to a bank that the depositor has an account with. (See Uniform Commercial Code §4-205.) That is, the bank that receives a deposit without any endorsement promises to the banks that process the check along the line all the way back to your bank, that they properly deposited the money into the account of the entity that the check was made out to. With checks being processed with more and more automation, it's getting fairly common for there to be little writing needed on the check itself, as the digital copy gets submitted to the banking system for clearing. If you're concerned about there being some sort of fraud, that perhaps the entity that you're sending money to isn't the ones that should be getting it, or that they're not actually getting the money, or something like that, that's really an entirely different concern. I would expect that if you were saying that you paid something, and the payee said that you hadn't, that you would dispute the transaction with your bank. They should be able to follow the electronic trail to where the money went, but I suspect they only do so as part of an investigation (and possibly only in an investigation that involved law enforcement of some type). If you're just curious about what bank account number your deposit went into, then it just looks like you're the one trying to commit some sort of fraud (even if you're just being curious), and they don't have much incentive to try to help you out there.\"",
"title": ""
}
] |
[
{
"docid": "071b3b8ff236f00fddadf437f90e4066",
"text": "Let me get this straight. I would stand my ground. Your son negotiated in good faith. Either they messed up, or they are dishonest. Either way your son wasn't the one supposed to know all the internal rules. I don't think it matters if they cashed the check or not. I would tell them if they have cashed it, that is even more evidence the deal was finalized. But even if they they didn't cash it, it only proves they are very disorganized. If for some reason your son feels forced to redo the deal, have him start the negotiations way below the price that was agreed to. If the deal for some strange reason gets voided don't let him agree to some sort of restocking fee.",
"title": ""
},
{
"docid": "636702411ab0de17d342fc29a006e2d7",
"text": "\"1.Why is there no \"\"United States Treasury\"\" endorsement? Why should there be, and what do you think it would look like? Some person at Treasury sitting at a desk all day signing \"\"Uncle Sam\"\"? At most you would expect to see some stamp, because it's clear that no person is going to sign all of these checks. 2.Can I have the check returned for proper endorsement? No, this is none of your business unless you have some serious reason to believe that someone other than the treasury cashed your check. (If that were really your concern, then you'd have a bigger issue than the endorsement.) 3.If I am required to endorse checks made out to me, why isn't the US Treasury? As others have noted, an endorsement is often not required as long as the name on the check matches a name on the account to which it is deposited. Individual banks may have stricter rules, but that's between you and your bank.\"",
"title": ""
},
{
"docid": "5e788b9c0aaa2183ef5c768ba4be1f73",
"text": "I used to work for a online payment posting company. Anytime a payment is made via Credit Card to a company that does not have PCI DSS(aka the ability/certification to store credit card information) there is a MD5 checksum(of the confirmation code, not the Credit Card information) that get sent to the company from the processor(billing tree, paypal, etc). The company should be able to send this information back to the processor in order to refund the payment. If the company isn't able to do this, to be honest they shouldn't be taking online credit card payments. And by all means do not send your credit card information in an email. As said above, call the company's customer service line and give them the info to credit your account.",
"title": ""
},
{
"docid": "da1a151451e9fea0a7fda6d5b8185a0f",
"text": "It's not the legitimate checks or bounced checks that are the problem, it's phony checks issued against real accounts with actual money in them. All the security measures on the check don't amount to crap if someone can print up some legitimate looking checks with bogus amounts on them, or even just steal some printed checks and sign something resembling the authorized signature.",
"title": ""
},
{
"docid": "793e34f55011f78eca9d55f9b33a457b",
"text": "If the check is made out to him, he will have to endorse it. Which means that at some point he will have to physically have the check in his hands. At which point, he could probably just deposit it himself. If there's some problem getting the check to him for him to sign it, you could call the bank and ask if they'll accept it for deposit to his account without a signature. I understand some banks will do this. I would be very surprised if they would let you deposit a check made out to your son to your account. They'd have no way of knowing if your son was agreeable to this or if you were stealing his money. Traditionally, the person the check was made out to could endorse it, give the check to someone else, and then the second person could endorse it and deposit it to their (the second person's) account. That is, the endorsement would have your son's signature, and below that, your signature. But I understand some banks won't accept this any more, so you'd be best to check before trying it.",
"title": ""
},
{
"docid": "b08d9cfb180251cd9d2a024e09a96934",
"text": "If it doesn't seem that important, why bother blacking the name out? For the effort, it might cost you less in your time to have the checks reprinted. There's no way to know what all banks would do with a check that has a name crossed out, but most would ignore it. Most checks are processed automatically. Signatures are not verified, post-dated checks can usually still be deposited. Occasionally you'll have a bank or merchant reject a check, but don't expect that to be the norm.",
"title": ""
},
{
"docid": "fd86c575bf2a438ab2443e2b0eaf8ea1",
"text": "So my wife was at work today and got yelled at by both a cop and her managers for simply LOOKING at the card. I don't understand I also work in retail and of course I must see the card to ensure it is a real card, it is a very strict policy that we must have a valid physical card to run any credit/debit transactions. People put skimmers everywhere you use your card and can pick up the info off the strip and put it onto another card and use it without you noticing right away. With the right equipment they can put their name on it or the name on their fake I.d. so the only red flag would be them trying to use several different cards",
"title": ""
},
{
"docid": "8632e74a64993d3efaae90929599b200",
"text": "\"In absence of complete information, I can only speculate that your phrases We both endorsed the cheque, and especially since the name on the cheque doesn't seem to be the name of the person I spoke with. mean that the check was payable to Jane Doe but was endorsed by someone you know as Wade Roe using language such as \"\"Pay to the order of user6344\"\" and then you endorsed it as something like \"\"For deposit only to Acct# 1234567890\"\" and gave it to the bank teller with a deposit slip for Acct# 1234567890. Presumably Wade Roe did not accompany you to the bank and the bank teller did not notice that the check was not endorsed to you by Jane Doe, or she did go with you to the bank but the teller did not check her ID when she endorsed the check. In any case, you, as a customer of the bank, are definitely on the hook in the sense that you in effect guaranteed the validity of Wade Roe's endorsement of the check payable to Jane Doe. You presented the check to the bank as a legitimate check that you were legitimately entitled to deposit in your account. In effect, if fraud was committed, you committed the fraud by depositing a bum check. As all the other answers have said, you need to go down to the bank and talk to a bank officer, preferably the manager, right away. Don't go to a teller (even though in many banks, the tellers have job titles like assistant vice-president.\"",
"title": ""
},
{
"docid": "dbc64c870685d9d3c4e4e506ee4e6c5f",
"text": "I do know that a blank check has all the information they need for the electronic transfer. They probably add it as a customer service to streamline future payments. Though I don't think automatically adding it makes good business sense. It is possible that the form used to submit the check included a line to added the account to the list of authorized accounts. He might have been lucky he didn't set up a recurring payment. I would check the website to see if there is a tool to remove the account info from the list of payment options. There has to be a way to edit the list so that if you change banks you can update the information, yet not keep the old accounts on the list. Talk to customer service if the website doesn't have a way of removing the account. Tell them that you have to edit the account information. And give them your info. If they balk at the change tell them that they could be committing fraud if the money is pulled from an unauthorized account.",
"title": ""
},
{
"docid": "dd604ea54d8a648a31fca92060615986",
"text": "First, if your account has been closed you should not be able to use your debit card in any format. As you mentioned that you are able to use that so your back account is active. So this indicates it is a scam In case account is closed, bank confirms your address and will send you a cheque for the amount in your account. Don't worry. You money will never be lost",
"title": ""
},
{
"docid": "1619a2901c8114a352d54227320b8370",
"text": "\"It is not allowed to pay refunds to anyone other than the taxpayer. This is due to various tax return fraud schemes that were running around. Banks are required to enforce this. If the direct deposit is denied, a check will be issued. In her name, obviously. What she does with it when she gets it is her business - but I believe that tax refund checks may not be just \"\"endorsed\"\", the bank will likely want to see her when you deposit it to your account, even if it is endorsed. For the same reason.\"",
"title": ""
},
{
"docid": "d2acf99226ed0dfb29bdfd1c8bfa6d16",
"text": "\"In the US, Section 3.114 of the Uniform Commercial Code sets the rules for how any confusion in checks or other business transactions is handled: “If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.” If there was any ambiguity in the way you wrote out the amount, the institution will compare the two fields (the written words and the courtesy box (digits)) to see if the ambiguity can be resolved. The reality is that the busy tellers and ATM operators typically are going to look at the numeric digits first. So even if they happen to notice the traditional \"\"and...\"\" missing, it seems highly unlikely that such an omission would cause enough ambiguity between these the two fields to reject the payment. Common sense dictates here. I wouldn't worry about it.\"",
"title": ""
},
{
"docid": "34c5df8f8b00302d391ffb103ec61cd7",
"text": "\"> Every credit card has a space on the back for a signature. And for decades, retailers would check the signature on your ID ... This worked for a long time, until retailers ... For decades, retailers never compared signatures on credit cards to the person's signature. Impractical and not even worth it as anyone can copy a signature on a card. Neither do banks bother to check for signature. They don't even have a \"\"signature on-file\"\" anymore. Try it! Deposit a check or buy with a credit card and scribble something unrelated as a signature! The deposit or credit card transaction will go through. I guarantee you that! **Please try it! Let me know if it did not work!** I know what I am talking about because I deal with credit cards a lot, professionally, in IT. The only sure thing is to ask for a PIN. But, alas, credit cards use a chip, so if I steall your card, I can buy with it with no problems. But not if I still your ATM card - I don't know your PIN. The PIN is in your head and I can't get it. The credit card companies don't really care.\"",
"title": ""
},
{
"docid": "b23adf899f548a3c82473c536b1caaca",
"text": "You purchased the check from the bank. Your funds have been transferred. If the recipient never cashed the check, the money continues to be the bank's, just as if you had written s normal check that didn't get cashed the money would sit in your account.",
"title": ""
},
{
"docid": "4e7513119ee46fe0559c8aa9b8f93617",
"text": "I have been using Bill Pay from BoA, Chase, and a local Credit Union, all for at least five years (maybe even 10), and never had any issues with lost checks. Sometimes, an address given to me was incorrect, and what happens is either nothing (meaning, after 90 days, the check is considered outdated and the money gets reimbursed in the account) the bank notifies me after about two weeks that the check was returned as 'recipient not found at that address' or 'invalid address', and the money gets restored right then. That is no guarantee, of course, that nothing will ever happen. But banks are not supposed to accept checks where the recipient name does not match. Also, you should consider using 'Quick Pay' or 'Pay an individual' instead, whatever your bank calls it. That will transfer the money same or next day to your other account, without ever mailing a check. You do not need to enter account information across banks, it works by both banks contacting you through your logins/emails.",
"title": ""
}
] |
fiqa
|
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