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a4f2a82349603cdb5b5309a7e2a56484
|
Does this sound like a great idea regarding being a landlord and starting a real estate empire?
|
[
{
"docid": "ec9961d911a037f952f77576264d16a0",
"text": "The idea you present is not uncommon, many have tried it before. It would be a great step to find landlords in your area and talk to them about lessons learned. It might cost you a lunch or cup of coffee but it could be the best investment you make. rent it out for a small profit (hopefully make around 3 - 5k a year in profit) Given the median price of a home is ~220K, and you are investing 44K, you are looking to make between a 6 and 11% profit. I would not classify this as small in the current interest rate environment. One aspect you are overlooking is risk. What happens if a furnace breaks, or someone does not pay their rent? While some may advocate borrowing money to buy rental real estate all reasonable advisers advocate having sufficient reserves to cover emergencies. Keep in mind that 33% of homes in the US do not have a mortgage and some investment experts advocate only buying rentals with cash. Currently owning rental property is a really good deal for the owners for a variety of reasons. Markets are cyclical and I bet things will not be as attractive in 10 years or so. Keep in mind you are borrowing ~220K or whatever you intend to pay. You are on the hook for that. A bank may not lend you the money, and even if they do a couple of false steps could leave you in a deep hole. That should at least give you pause. All that being said, I really like your gumption. I like your desire and perhaps you should set a goal of owning your first rental property for 5 years from now. In the mean time study and become educated in the business. Perhaps get your real estate license. Perhaps go to work for a property management company to learn the ins and outs of their business. I would do this even if I had a better paying full time job.",
"title": ""
},
{
"docid": "c2a5a0971e352bc083b87a6b8757baa0",
"text": "A lot of people do this. For example, in my area nice townhouses go for about $400K, so if you have $80,000 you can buy one and rent it. Here are the typical numbers: So you would make $350 per month or $4,200 per year on $80,000 in capital or about 5% profit. What can go wrong: (1) The property does not rent and sits vacant. You must come up with $2100 in mortgage payments, taxes, and insurance every month without fail or default. (2) Unexpected expenses. A new furnaces costs over $5,000. A new roof costs $7,000. A new appliance costs $600 to $2000 depending on how upscale your property is. I just had a toilet fixed for a leaky plunger. It cost me $200. As you can see maintenance expenses can quickly get a lot higher than the $50 shown above... and not only that, if you fix things as cheaply as possible (as most landlords do), not only does that decrease the rentability of the property, but it causes stuff to break sooner. (3) Deadbeats. Some people will rent your property and then not pay you. Now you have a property with no income, you are spending $2100 per month to pay for it, AND you are facing steep attorney fees to get the deadbeats evicted. They can fight you in court for months. (4) Damage, wear and tear. Whenever a tenant turns over there is always a lot of broken or worn stuff that has to be fixed. Holes in the wall need to be patched. Busted locks, broken windows, non-working toilets, stains on the carpet, stuck doors, ripped screens, leaky showers, broken tiles, painting exterior trim, painting walls, painting fences, etc. You can spend thousands every time a tenant changes. Other caveats: Banks are much more strict about loaning to non home owners. You usually have to have reserve income. So, if you have little or no income, or you are stretched already, it will be difficult to get commercial loans. For example, lets say your take-home pay is $7,000 and you have no mortgage at all (you rent), then it is fine, the bank will loan you the money. But lets say you only have $5,000 in take home pay and you have an $1,800 mortgage on your own home. In that case it is very unlikely a bank will allow you to assume a 2nd mortgage on a rental property. The more you try to borrow, the more reserve income the bank will require. This tends to set a limit on how much you can leverage.",
"title": ""
},
{
"docid": "aa680b0531e0827ad5254ef83fd98ec9",
"text": "This is a reasonable idea and many people have done it. But there are some risks that you need to mitigate. This is a viable business model, but it is a business and you need to treat it as such and expect to work quite hard at it.",
"title": ""
},
{
"docid": "990d7cea7a0d872a8b50cca148e7d234",
"text": "\"This is a common and good game-plan to learn valuable life skills and build a supplemental income. Eventually, it could become a primary income, and your strategic risk is overall relatively low. If you are diligent and patient, you are likely to succeed, but at a rate that is so slow that the primary beneficiaries of your efforts may be your children and their children. Which is good! It is a bad gameplan for building an \"\"empire.\"\" Why? Because you are not the first person in your town with this idea. Probably not even the first person on the block. And among those people, some will be willing to take far more extravagant risks. Some will be better capitalized to begin with. Some will have institutional history with the market along with all the access and insider information that comes with it. As far as we know, you have none of that. Any market condition that yields a profit for you in this space, will yield a larger one for them. In a downturn, they will be able to absorb larger losses than you. So, if your approach is to build an empire, you need to take on a considerably riskier approach, engage with the market in a more direct and time-consuming way, and be prepared to deal with the consequences if those risks play out the wrong way.\"",
"title": ""
},
{
"docid": "7a6ed41b4aea8dab6861258575a0034a",
"text": "\"This is a well worn path and not a bad idea. There are quite a few pitfalls but there are a lot of resources to learn for other people's mistakes. Having a plan and doing your research should help you avoid most of them. Here is some general advice to help get you started on the right foot. Know the market you are investing in. The city should have more than one major employer. The population should be rising and hopefully there are other positive economic indicators. Check the city's and state's chamber of commerce for useful information. You do not want to be stuck holding a bunch of upside down property in Detroit. Accurately calculate expenses. Set aside money for repairs. budget 5% of the rent or 100 a month for repairs if no repairs happen that money goes into the repair fund for the future. Set aside money for capital expenditures if the roof has a 10 years of life left in 10 years you better be ready to replace it same with any major appliances. Your area should have a baseline vacancy rate 5-8% in my area. That says out of a year your property will be vacant for around 6% of the year or 21 days for turnover. You should build that cushion into the budget as well setting aside a portion of the rent to cover that lean period. Some property management will offer \"\"eviction insurance\"\" which is basically them enforcing that savings. Financing maybe difficult a lot of banks like to see 25% down payments on investments. You will also face higher interest rates for investment properties. Banks generally also like to see enough money to cover 6 months worth of expenses in your account for all property. Some banks will not give financing for investment property to someone without 1-2 years of landlord experience. All in all finding money will be hard when you gets started and your terms may be less than ideal. (hopefully make around 3 - 5k a year in profit) If that includes loan pay-down and is not just cash-flow you are probably in the right ballpark. I can find $100-$200 dollars cash-flow a month on single family home in my area. Once loan pay-down is included your numbers are close. It sounds like you have a good attitude and a good plan. A book that I really enjoyed and I think may be useful is \"\"Start Small, Profit Big in Real Estate\"\" by Jay DeCima. I think of it as required reading for do-it-yourself real estate investors. Good luck and happy investing\"",
"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": "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": "879062f352451bc4ee852520a91ffa83",
"text": "\"BEFORE you invest in a house, make sure you account for all the returns, risks and costs, and compare them to returns, risks and costs of other investments. If you invest 20% of a house's value in another investment, you would also expect a return. You also probably will not have the cost interest for the balance (80% of ???). I have heard people say \"\"If I have a rental property, I'm just throwing away money - I'll have nothing at the end\"\" - if you get an interest-only loan, the same will apply, if you pay off your mortgage, you're paying a lot more - you could save/invest the extra, and then you WILL have something at the end (+interest). If you want to compare renting and owning, count the interest against the rental incoming against lost revenue (for however much actual money you've invested so far) + interest. I've done the sums here (renting vs. owning, which IS slightly different - e.g. my house will never be empty, I pay extra if I want a different house/location). Not counting for the up-front costs (real estate, mortgage establishment etc), and not accounting for house price fluctuations, I get about the same \"\"return\"\" on buying as investing at the bank. Houses do, of course, fluctuate, both up and down (risk!), usually up in the long term. On the other hand, many people do lose out big time - some friends of mine invested when the market was high (everyone was investing in houses), they paid off as much as they could, then the price dropped, and they panicked and sold for even less than they bought for. The same applies if, in your example, house prices drop too much, so you owe more than the house is worth - the bank may force you to sell (or offer your own house as collateral). Don't forget about the hidden costs - lawn mowing and snow shoveling were mentioned, insurance, maintenance, etc - and risks like fluctuating rental prices, bad tenants, tenants moving on (loss of incoming, cleaning expenses, tidying up the place etc)....\"",
"title": ""
}
] |
[
{
"docid": "cdc8ee4b63ae9ac426fd4dad8942a239",
"text": "Huh, well it's working for me. I've got 3 properties and am a little over 25% of my goal to never work again. How would you suggest one get rich? I assume you have a better plan than he does?",
"title": ""
},
{
"docid": "3bc46add7bfe3ee10ee4eb7f944b698a",
"text": "It sounds like you plan to sell sooner or later. If your opinion is that there is still room for the housing market to grow, make your bet and sell later. The real estate market is much less liquid than other markets you might be invested in, so if you do end up seeing trouble (another housing crash) you may be stuck with your investment for longer than you hoped. I see more risk renting the house out, but I don't see significantly more reward. If you are comfortable with the risk, by all means proceed with your plan to rent. My opinion is contrary to many others here who think real estate investments are more desirable because the returns are less abstract (you can collect the rent directly from your tenants) but all investments are fraught with their own risks. If you like putting in a little sweat equity (doing your own repairs when things break at your rental) renting may be a good match for you. I prefer investments that don't require as much attention, and index funds certainly fit that bill for me.",
"title": ""
},
{
"docid": "18a41c6e82cb828cc6beeb5ccba6f277",
"text": "\"With a healthy income its quite possible to contribute too much into 401Ks/IRAs. For example, if your retired today and had 3 million or so, how much more would you need? Would an extra million materially change your life? Would it make you happier if you invested that extra in some rental properties or perhaps a business like a sandwich or ice cream shop where you have more direct control? This kind of discussion is possible as you indicate that you have taken care of your life financially. It seems at odds with the negative press describing the woefully condition of the standard person's finances. These articles ignore a very simple fact: its because of bad behavior. You, on the contrary, have behaved well and are in the process of reaping rewards. This is where I feel your \"\"mental gymnastics\"\" originates. Looking to engage in the rental market is no different then buying a franchise. You are opening a business of your own. You'll have to educate yourself and are likely to make a few mistakes that will cause you to write checks to solve. Your goal is to minimize those mistakes. After all, what do you know about the rental home business? I am guessing not much. Educate yourself. Read and spend some money on taking knowledgeable people out for coffee. In the end you should understand that although a poor decision may cost you money you cannot really make a bad decision. Lets say you do buy a rental property, things go south, you sell for a loss, etc.... In the end the \"\"butchers bill\"\" is 50K or so. Will that materially change your life? Probably not. The worst case is perhaps you have to work a year or two beyond the anticipated retirement age to make up that money. No big deal.\"",
"title": ""
},
{
"docid": "2f12b3ad22e5472415d13b933fe63d3f",
"text": "I would second the advice to not do this. Real estate ownership is complex to begin with, involving a constant stream of maintenance, financing, and other decisions. It is difficult enough to do for a single individual or a family as a unit (a couple), but at least spouses are forced to compromise. Friends are not, and you can end up with long-running conflicts and impasses. Financial transactions of any kind impose tensions on relationships, and friendships are no exception. If you want your friendship to survivie, do not sacrifice it to the financial arrangement which seems like a good idea at the moment. My advice would be to steer clear, no matter how attractive on the surface the deal might look. Focus on your own individual finances and use discipline and patience to save the amount needed for acquiring a separate investment property. But it will be 100% yours, and will save tons of headache. Since you are still considering this deal, it's a great time to politely change your mind and walk away - believe me, a few minutes of inconvenience will save you years of frustration. Good luck!",
"title": ""
},
{
"docid": "2f1d730eaf1d003c5d7ae2525da05a6c",
"text": "No. This logic is dangerous. The apples to apples comparison between renting and buying should be between similar living arrangements. One can't (legitimately) compare living in a 600 sq ft studio to a 3500 sq ft house. With the proposal you offer, one should get the largest mortgage they qualify for, but that can result in a house far too big for their needs. Borrowing to buy just what you need makes sense. Borrowing to buy a house with rooms you may never visit, not a great idea. By the way, do the numbers. The 30 year rate is 4%. You'd need a $250,000 mortgage to get $10,000 in interest the first year, that's a $312,000 house given an 80% loan. On a median income, do you think it makes sense to buy a house twice the US median? Last, a portion of the tax savings is 'lost' to the fact that you have a standard deduction of nearly $6,000 in 2012. So that huge mortgage gets you an extra $4000 in write-off, and $600 back in taxes. Don't ever let the Tax Tail wag the Investing Dog, or in this case the House Dog. Edit - the investment return on real estate is a hot topic. I think it's fair to say that long term one must include the rental value of the house in calculating returns. In the case of buying of way-too-big house, you are not getting the return, it's the same as renting a four bedroom, but leaving three empty. If I can go on a bit - I own a rental, it's worth $200K and after condo fee and property tax, I get $10K/yr. A 5% return, plus whatever appreciation. Now, if I lived there, I'd correctly claim that part of my return is the rental value, the rent I don't pay elsewhere, so the return to me is the potential growth as well as saved rent. But if the condo rents for $1200, and I'd otherwise live in a $600 apartment with less space, the return to me is lost. In my personal case, in fact, I bought a too big house. Not too big for our paycheck, the cost and therefore the mortgage were well below what the bank qualified us for. Too big for the need. I paid for two rooms we really don't use.",
"title": ""
},
{
"docid": "8eeab1aacfb9f67c350b65bcfffaba13",
"text": "To invest relatively small amounts in the real estate market, you could buy shares in a Real Estate Investment Trust (REIT), a type of mutual fund. Admittedly that's a very different proposition from trying to become a landlord; lower risk but lower return.",
"title": ""
},
{
"docid": "6568d63e1e16bc385ef85b971d630528",
"text": "\"You mention: High rent places are usually also high property value places. Given the tax incentives, it seems like a good long term idea to grab a house, so if we assume you have the option of working and buying a house in a high CoL or a low CoL city, I think you'd prefer the high cost. Because essentially, after 30 years, you'd have a million dollar house vs a quarter million dollar house. You've captured three quarters of a million dollars in rent, given my napkin math hypothetical. I think you're forgetting about some of the associated costs with \"\"owning\"\" a home, including:\"",
"title": ""
},
{
"docid": "990df5d54f35fc76dac95ac6c32c752c",
"text": "\"Another problem with this plan (assuming you get past Rocky's answer somehow) is that you assume that $50K in construction costs will translate to $50K in increased value. That's not always true; the ROI on home improvements is usually a lot less than 100%. You'd also owe more property taxes on your improvements, which would cut into your plan somewhat. But you also can't keep doing this forever. Soon enough, you'd run out of physical and/or legal space to keep adding additions to the house (zoning tends to limit how much you can build, unless you're in the middle of nowhere, and eventually you'd fill the lot), even if you did manage to keep obtaining more and more loans. And you'd quickly reach the point of diminishing returns on your expansions. Many homebuyers might be prepared to pay more for a third or fourth bedroom, but vanishingly few in most markets will pay substantially more for a second billiards room or a third home theater. At some point, your house isn't a mansion, it's \"\"that ridiculous castle\"\" only an eccentric would want, and the pool of potential buyers (and the price they'll pay for it) diminishes. And the lender, not being stupid, isn't going to go on financing your creation of a monstrosity, because they are the ones who will be stuck with the place if you default.\"",
"title": ""
},
{
"docid": "b564a2afd57d6a5281c9edc56494995e",
"text": "A real life experience. A friend of mine did that with his housemates. They bought a house together as students and it worked for them. The tricky bit is to have a very good contract with your housemates as to how the venture should work. What if? Somebody can't pay, somebody can't enjoy the house (on an extended trip), somebody wants out (marriage, etc.) It worked for my friend...",
"title": ""
},
{
"docid": "366e4f092dbfd5bf75a34ea777a4fe2b",
"text": "Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?",
"title": ""
},
{
"docid": "f20fdb3b3ea6780e82c610fcb1950bd8",
"text": "Your post seems to read as if you want to invest only in real estate rental properties as a start because they will be a reliable investment guaranteed to generate profits that you will be plowing back into buying even more rental properties, but you are willing to consider (possibly in later years) other forms of investment (in real estate) that will not require active participation in the management of the rental properties. While many participants here do own rental real estate and even manage it entirely, for most people, that is only a small part of their investment portfolio, and I suspect that hardly any will recommend real estate as the only investment the way you seem to want to do. Also, you might want to look more closely at the realities of rental real estate operations before jumping in. Things are not necessarily as rosy as they appear to you now. Not all your units will be rented all the time, and the rental income might not always be enough to cover the mortgage payments and the property taxes and the insurance payments and the repairs and maintenance and ... Depreciation of the property is another matter that you might not have thought about. That being said, you can invest in real estate through real estate investment trusts (REITs) or through limited partnerships where you have only a passive role. There are even mutual funds that invest in REITs or in REIT indexes.",
"title": ""
},
{
"docid": "f3651bb2af6000cf54640c7bce08638f",
"text": "Have you considered investing in real estate? Property is cheap now and you have enough money for several properties. The income from tenants could be very helpful. If you find it's not for you, you can also sell your property and recover your initial investment, assuming house prices go up in the next few years.",
"title": ""
},
{
"docid": "c14b4881f89e813dcec5a551b30856b2",
"text": "2 very viable options. Real Estate is cheap now and if you hold a few properties for the long term the price should rise. You can use them as rental properties to supplement your income. In addition agriculture is also very viable. How else you gunna feed 7 billion? Might as well cash in on that.",
"title": ""
},
{
"docid": "266fde9704582a3f139f5690f61fda24",
"text": "What does your cash flow look like? If you can comfortably afford to pay the extra cost and ride out the mortgage, it can be a nice investment. Better if you can manage the property yourself and are somewhat handy. Realize you should be able to raise rents over time so that it is cash flow even eventually. If cash flow is tight, sell it and re-fi your current place",
"title": ""
},
{
"docid": "43edc39c145d3f08bc65729cd44c8faa",
"text": "Yes this would be the same as when a corporation sells bonds. If it is the same as you describe. A product page would make it possible to give you a definitive answer. Also I strongly advice against taking out this type of loan if not for investment",
"title": ""
}
] |
fiqa
|
4fe94d762bb7818b22f857c356cf3bc4
|
Pros/cons of drawing income in retirement from sole-owner corporation vs. sole-proprietorship?
|
[
{
"docid": "18119c60e17d718132faa1012fcc402c",
"text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"",
"title": ""
}
] |
[
{
"docid": "955e605d7d9e30b65de3ac4aae14081b",
"text": "you can begin drawing retirement income from 401k, ira and roth accounts at any age. the key is that it must be retirement income. you can't blow it all on an epic party, but you can withdraw a modest amount every year while preserving enough capital to last the rest of your life. there are 3 common strategies for doing this: side notes: techinical details: roth conversion ladder: substantially equal periodic payment plans:",
"title": ""
},
{
"docid": "fa823f87dc7c9574d811c0030e7ece80",
"text": "Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences.",
"title": ""
},
{
"docid": "bb4dc2382fe36b9c9d01a1e44edaee35",
"text": "IANAL (and nor am I an accountant), so I can't give a definitive answer as to legality, but AFAIK, what you propose is legal. But what's the benefit? Avoiding corporation tax? It's simplistic – and costly – to think in terms like that. You need to run the numbers for different scenarios, and make a plan. You can end up ahead of the game precisely by choosing to pay some corporate tax each year. Really! Read on. One of the many reasons that self-employed Canadians sometimes opt for a corporate structure over being a sole proprietor is to be able to not pay themselves everything the company earns each year. This is especially important when a business has some really good years, and others, meh. Using the corporation to retain earnings can be more tax effective. Example: Imagine your corporation earns, net of accounting & other non-tax costs except for your draws, $120,000/year for 5 years, and $0 in year 6. Assume the business is your only source of income for those 6 years. Would you rather: Pay yourself the entire $120,000/yr in years 1-5, then $0 in year 6 (living off personal savings you hopefully accumulated earlier), subjecting the $120,000/yr to personal income tax only, leaving nothing in the corporation to be taxed? Very roughly speaking, assuming tax rates & brackets are level from year to year, and using this calculator (which simplifies certain things), then in Ontario, then you'd net ~$84,878/yr for years 1-5, and $0 in year 6. Overall, you realized $424,390. Drawing the income in this manner, the average tax rate on the $600,000 was 29.26%. vs. Pay yourself only $100,000/yr in years 1-5, leaving $20,000/yr subject to corporation tax. Assuming a 15.5% combined federal/provincial corporate tax rate (includes the small business deduction), then the corp. is left with $16,900/yr to add to retained earnings in years 1-5. In year 6, the corp. has $84,500 in retained earnings to be distributed to you, the sole owner, as a dividend (of the non-eligible kind.) Again, very roughly speaking, you'd personally net $73,560/yr in years 1-5, and then on the $84,500 dividend in year 6, you'd net $73,658. Overall, you realized $441,458. Drawing the income in this manner, the average tax rate on the $600K was 26.42%. i.e. Scenario 2, which spreads the income out over the six years, saved 2.84% in tax, or $14,400. Smoothing out your income is also a prudent thing to do. Would you rather find yourself in year 6, having no clients and no revenue, with nothing left to draw on? Or would you rather the company had saved money from the good years to pay you in the lean one?",
"title": ""
},
{
"docid": "fa9290fe5300a24c04c6f8ab01f18f66",
"text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.",
"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": "0798aa4e5d06e0deb5d8c966f0f35db5",
"text": "I see a lot of people making the mistake or being given bad advise in structuring a new business. If you have more than one shareholder, then by all means an S Corporation is a better structure for lower taxes; avoid double taxation. If, however, this is a one shareholder S Corp, then you had better 1099 yourself as a consultant or look into sole proprietorship. The tax benefits are much better either way. Dr. Suraiya Shaik Ali",
"title": ""
},
{
"docid": "40d3eb1c81f085cd157f373631b1f4c2",
"text": "\"The major pros tend to be: The major cons tend to be: Being in California, you've got state income tax to worry about as well. It might be worth using some of that extra cash to hire someone who knows what they're doing to handle your taxes the first year, at least. I've always maxed mine out, because it's always seemed like a solid way to make a few extra dollars. If you can live without the money in your regular paycheck, it's always seemed that the rewards outweighed the risks. I've also always immediately sold the stock, since I usually feel like being employed at the company is enough \"\"eggs in that basket\"\" without holding investments in the same company. (NB: I've participated in several of these ESPP programs at large international US-based software companies, so this is from my personal experience. You should carefully review the terms of your ESPP before signing up, and I'm a software engineer and not a financial advisor.)\"",
"title": ""
},
{
"docid": "54102d9b014f0b259219b94ee8a59e3c",
"text": "To answer your question 2, I can't think of any advantage of using your SSN over an EIN, but there are some advantages to having an EIN as a sole proprietor. So depending on the answer to question 1, you may want to consider either keeping your existing EIN or getting a new one, even if you are allowed to use your SSN instead.",
"title": ""
},
{
"docid": "07840ca3531beffb6cc1cd5266218a0c",
"text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"",
"title": ""
},
{
"docid": "b4c4472436470581adf08370392e7add",
"text": "\"The obvious advantage is turning your biggest liability into an income-generating asset. The downside are: (1), you have to find tenants (postings, time to show the place, credit/background check, and etc) (2), you have to deal with tenants (collection of rent, repairs of things that broke by itself, complaints from neighbors, termination, and etc) (3), you have to deal with the repairs In many ways, it's no different from running another (small) business, so it all boils down to how much time you are willing to invest and how handy you are in doing reno's and/or small repairs around the house. For profitability/ROI analysis, you want to assume collection of 11 months of rent per year (i.e. assume tenant doesn't renew after year, so you have the worst case scenario) and factor in all the associated expense (be honest). Renting out a second property is a bit tricky as you often have to deal with a large operating expense (i.e. mortgage), and renting a basement apartment is not bad financially and you will have to get used to have \"\"strangers\"\" downstairs.\"",
"title": ""
},
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "537d0a768beb6bac683f1268f73aaecf",
"text": "Creating a corporation is not necessarily less taxes. In fact, you'll face the problem of double taxation, and since you must pay yourself a reasonable salary, if your corporation doesn't earn much to give you as dividend after the salary, and/or your tax bracket is low, you'll in fact may end up paying more taxes. Also there's a lot of bureaucracy involved in managing a corporation. Liability on the other hand is important, and what's more important - is asset separation and limiting the liability to the corporation assets, keeping your personal assets safe. To achieve that, you don't have to create a corporation, but you can create a Limited Liability Company (LLC). LLC are disregarded entities for tax purposes (i.e.: you won't have to pay taxes twice, only once as a sole proprietor/partner), but provide the liability limitation and asset separation. LLC's are much less formal, and require much less paperwork reducing the risk of corporate veil piercing because of non-compliance. I myself decided to manage my investments through LLC's for that very reason (asset separation).",
"title": ""
},
{
"docid": "1edca5b9b17bb709dc2829c540f211a5",
"text": "\"Those advantages you've described (tax treatment and employee match) are what you receive in exchange for \"\"locking up\"\" the money. Ultimately it's a personal choice of whether that tradeoff makes sense for you situation (I'll echo the response that the real answer to your question is planning). Roth options (either 401K or IRA) may be good compromises for you, since you can withdraw those contributions (but not the earnings) without any penalty, since you've already paid taxes on them. Another avenue to explore may be a self-directed IRA or a Solo 401(k), depending on your circumstances and eligibility. In both cases, there are plan providers that structure the plan to allow you to use the money to invest in things besides traditional stocks, bonds, and mutual funds (often referred to as \"\"checkbook control\"\" accounts). They are very commonly used among Real Estate investors (this thread from BiggerPockets has quite a bit of info). You'd want to consult with an accountant or financial adviser before going down that path.\"",
"title": ""
},
{
"docid": "8139827df5aa181c2aa883974232b178",
"text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate.",
"title": ""
},
{
"docid": "7463e6b01c2f38e523cd6ba482a29b8a",
"text": "\"A couple of distinctions. First, if you were to \"\"invest in real estate\"\" were you planning to buy a home to live in, or buy a home to rent out to someone else? Buying a home as a primary residence really isn't \"\"investing in real estate\"\" per se. It's buying a place to live rather than renting one. Unless you rent a room out or get a multi-family unit, your primary residence won't be income-producing. It will be income-draining, for the most part. I speak as a homeowner. Second, if you are buying to rent out to someone else, buying a single home is quite a bit different than buying an REIT. The home is a lot less liquid, the transaction costs are higher, and all of your eggs are in one basket. Having said that, though, if you buy one right and do your homework it can set you on the road for a very comfortable retirement.\"",
"title": ""
}
] |
fiqa
|
56f8bacd3173f18108ac1499fef8474c
|
Free “Rich Dad” education, with “free gift”: Is it legitimate, or is it a sales ploy?
|
[
{
"docid": "5d664fbfb68e97ecc4ec98ba26dbb090",
"text": "\"Robert Kiyosaki's is basically a get-rich quick author. But to answer your question: It is a sales pitch in disguise. See Marketplace's report on a Kiyosaki seminar, which reveals that the free work shop is a sales pitch for a 3-day work shop which costs several hundred dollars. And the 3-day workshop is a sales pitch for \"\"advanced\"\" training which can cost as much as $45,000 (presumably in Canadian dollars, as the report was done in Canada). He does touch on some basic sound principles, but it's mixed with a lot of really bad (and in some cases illegal) advice. You'll do much better to invest your time and money in reading materials that aren't advertised via infomercials. Kiyosaki may well be rich, but it's from selling his Rich Dad-branded material, not from investing in real estate, or any other investment portfolio See also John T. Reed's guru rating, and his review of Kiyosaki's book, Rich Dad, Poor Dad.\"",
"title": ""
},
{
"docid": "d740d394abaa903f2dee57c1e608dbdc",
"text": "As with any business, there's a huge learning curve. Rich Dad gives you the fundamentals.. which are sound.. you then need to spend time getting the nitty gritty details of the business ... be it real estate, stock investing etc. Kiyosaki is a wealthy man... I've listened to some of his podcasts and he know what he's talking about.. AND.. he's been in the business for 20+ years.",
"title": ""
},
{
"docid": "52dfd7c00f4651032be5d7f3fdf3a5a6",
"text": "Kiyosaki says his methods of actions are not suitable for the average investor. They are meant for those wanting to excel at investing, and are willing to work for it. Personally, I wouldn't want to own ten apartments, because it sounds like a terrible headache. I would much rather have a huge portfolio of index funds. I believe that Kiyosaki's method allegedly perform better than the passive 'invest-diversify-hold' strategy, but would require a new mindset and dedication, and are risky unless you are willing to invest a lot of time learning the fine details. I prefer to dedicate my time elsewhere.",
"title": ""
},
{
"docid": "d5600bed0504562a8904efa3439539e5",
"text": "I have taken the free Kiyosaki evening course, and it does give some good information. It is an upsell to the $500 weekend course, which I also took. That course taught me enough about real-estate investing to get started. I have not yet had the need to pursue his other, more expensive courses. Read his books, take the $500 course, read other people's books on real estate investing, talk to other like-minded individuals, and gain some experience. I understand real estate better than I understand paper assets because I spent more time studying real estate. If you want to invest in real estate, study it first. If you want to invest in paper assets, study those first.",
"title": ""
}
] |
[
{
"docid": "809d62aaa231ba9b8270f484a753a9d5",
"text": "Yes. It's terrible with terrible advice such as insider trading. The insider trading is really the only advice that's not common knowledge such as buy assets not liabilities and pay yourself first. There is nothing in this book that would help anyone become wealthy. In fact is stated that education and savings will not make you rich. Which may be true but those two should never be discounted! This guy is a scam artist and made his millions from the book and nothing else.",
"title": ""
},
{
"docid": "988c6575e4ce64a92a839e7605009f72",
"text": "It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include:",
"title": ""
},
{
"docid": "e0fe70fcf216cba505a9ea34c1cb686f",
"text": "There's some really questionable advice in Rich Dad, Poor Dad. The one that I always thought was bad advice was when he wrote that people should always pay themselves first and worry about paying down debts later. So if you've got big credit card debts, you should first allocate money to saving and investing and pay your debts later. He says that will inspire you to come up with creative ways to get income to pay off that extra debt because you're under pressure. I don't buy it though. It's something that sounds good, but if you apply it, you end up broke quickly.",
"title": ""
},
{
"docid": "f6bdba3040528635a47946d6d4f18927",
"text": "Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors. Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold. If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar.",
"title": ""
},
{
"docid": "6e5ab272109b1379ea16fea75b9a8be9",
"text": "\"I feel like he's just doing this for the kicks and doesn't really believe in it. But then I see the numerous talks, the book etc and I can't decide. His entire basis for a \"\"idea meritocracy\"\" is that everyone should be truthful or \"\"radical transparency\"\". I do not see the connection at all. You cannot build an idea meritocracy because it inherently means you can judge if an idea succeeds or fails before implementing it. If you want to bias yourself toward successful ideas, it requires nothing more than allowing people to implement what they think and then rewarding the ones who succeed. Basically, I cannot see the point of this \"\"radical transparency\"\" etc. Except for one possibility - his computer algorithm. I feel like that is his grasp at immortality and the algorithm requires stupid tons of data to function. So why not give it to the best source for such data? Top ivy league graduates and brilliant people hired by the one of the biggest hedge funds on the planet. And then sell them on this idea that \"\"radical transparency\"\" is the basis for all success in the firm, and ask them to start inputting data on it.\"",
"title": ""
},
{
"docid": "e3feabf3c5377f19e11874057aade2f8",
"text": "\"This article is also light on sources. It overstates inherited wealth. People who work with rich people know the saying \"\"shirtsleeve to shirtsleeve in three generations\"\". There is a proclivity of rich descendants to squander their fortune, which totally negates a majority of this article. In sum, this article and news source insists on itself\"",
"title": ""
},
{
"docid": "f0e83abac79447e99dcab2e89824e042",
"text": "\"chapter 8 page 154: >\"\"My point is that it's doubts and cynicism that keep most people poor and playing it safe...only a person's doubts keep them poor...'Cynics criticize and winners analyze' was one of [Rich Dad's] favorite mottos\"\" -from chapter 8 page 154 of Robert Kiyosaki's first print edition of *Rich Dad Poor Dad* The whole page is about abandoning cynicism and has nothing to do with that Glenn-Beck-style rant/editorial you've linked to.\"",
"title": ""
},
{
"docid": "5def525b2a57b46bcad7d51eab491630",
"text": "\"Can I teach children an invaluable skill for free and provide a website or PayPal link for anyone who appreciates the result of my gift to their child and wishes to gift me money (or maybe they don’t have a child but believe in my revolutionary contribution to the future) as they see fit, up to $10K? Two immediately obvious problems with this strategy: What about when you receive gifts from people who aren't in the US? You have to declare, and pay taxes on, foreign gifts. It seems to me that these may not be gifts because they are given in connection with the service you provided rather than from \"\"detached and disinterested generosity\"\" as required to make the gift tax exempt. (See Commisioner v. Duberstein -- gift given to thank associate for a sales lead did not arise from detached generosity. See Stanton v. United States -- gift given in appreciation of services rendered may or may not be a gift for tax purposes. See also Bogardus v. Commissioner -- gifts inspired by past service can be tax exempt.)\"",
"title": ""
},
{
"docid": "65e92dfbe30dcb7849015a337a2daea3",
"text": "The money you receive from son would be treated as gift. As per gift tax you can get unlimited money from son and there is no tax implication. You are free to use money as you like. There is no restriction. Any profit you make is taxable as income to you.",
"title": ""
},
{
"docid": "e04d9bd2f8e0286cee97e550d281ad51",
"text": "We started with our son about age 5 or so. He was at the time old enough to understand that you buy stuff using money. We don't give allowance, rather we made up a job chart that he can put checks on, and give him a small amount for each job that he does. This is meant to enforce the idea of 'work and get paid, don't work don't get paid', and associate the concept of work and money. We also try to teach him the concept of giving, spending and saving, by having envelopes with those words on them and dividing the 'commission' money between them. The give money is used for a charitable organization. The save money is used in a couple of ways - either to save for a large item that he wants, or to put into a savings account. The spend it money he is free to buy whatever he wants with. We got this plan from the Dave Ramsey Show, and it has been really good so far. The best thing about it is that when we are at the store and he sees something he wants, we can ask 'did you bring your money?' This keeps the begging down to a minimum and also helps us teach him to make a list of stuff he wants and can save for.",
"title": ""
},
{
"docid": "23cc0532e6c7992d47926f8949ff67da",
"text": "\"Any advertisement for a \"\"business opportunity\"\" is nearly always a scam of some kind. In such deals, the seller is the one making the money. They rely on the fantasy of the average person who imagines themself with a profitable business. Real businessmen do not get their businesses from flyers on the sides of telephone poles. Real businessmen already know every aspect and detail of their business already. They do not need to pay some clown $10,000 to \"\"get them started\"\". If you are reading such advertisements, it means you have money, but do not know what to do with it. Although I cannot tell you what to do with your money. I can tell you this: giving it to somebody who advertises a \"\"great business opportunity\"\" would be a mistake.\"",
"title": ""
},
{
"docid": "02796cad037fa47f7f1dc2560189d293",
"text": "\"What is your biggest wealth building tool? Income. If you \"\"nerf\"\" your income with payments to banks, cable, credit card debt, car payments, and lattes then you are naturally handicapping your wealth building. It is sort of like trying to drive home a nail holding a hammer right underneath the head. Normal is broke, don't be normal. Normal obtains student loans while getting an education. You don't have to. You can work part time, or even full time and get a degree. As an example, here is one way to do it in Florida. Get a job working fast food and get your associates degree using a community college that are cheap. Then apply for the state troopers. Go away for about 5 months, earning an income the whole time. You automatically graduate with a job that pays for state schools. Take the next three years (or more if you want an advanced degree) to get your bachelors. Then start your desirable career. What is better to have \"\"wasted\"\" approx 1.5 years being a state trooper, or to have a student loan payment for 20 years? There is not even pressure to obtain employment right after graduation. BTW, I know someone who is doing exactly what I outlined. Every commercial you watch is geared toward getting you to sign on the line that is dotted, often going into debt to do so. Car commercials will tell you that you are a bad mom or not a real man if you don't drive the 2015 whatever. Think differently, throw out your numbers and shoot for zero debt. EDIT: OP, I have a MS in Comp Sci, and started one in finance. My wife also has a masters. We had debt. We paid that crap off. Work like a fiend and do the same. My wife's was significant. She planned on having her employer pay it off for each year she worked there. (Like 20% each year or something.) Guess what, that did not work out! She went to work somewhere else! Live like you are still in college and use all that extra money to get rid of your debt. Student loans are consumer debt.\"",
"title": ""
},
{
"docid": "b175b3c5764cb94644ab6dc1c639f056",
"text": "I can't tell if he's running something similar to a pyramid scheme >Everyone would work under the same Spartan conditions that Brito embraced. (In New York, Brito shares a large table with his head of sales and his finance chief.) “We always say the leaner the business, the more money we will have at the end of the year to share,” he said in a speech at Stanford in 2008. “I don’t have a company car. I don’t care. I can buy my own car. I don’t need the company to give me beer. I can buy my own beer.” That part is awesome though",
"title": ""
},
{
"docid": "8a8bafa654771734c6fee760c149c0fe",
"text": "No man, don't you see? The MAN is making students become perpetual debt slaves! To become another cog in the machine! It's all by design. Didn't happen by accident. Martha Stewart's polishing brass on the Titanic. It's all goin' down, man!",
"title": ""
},
{
"docid": "27d9e24ac779e2b2ae49ec352be8120e",
"text": "\"I doubt it. In the States you would only owe tax if you sold such an item at a profit. \"\"garage sales\"\" aren't taxable as they are nearly always common household items and sale is more about clearing out one's attic/garage than about profit. Keep in mind, if I pay for a book, and immediately sell it for the same price, there's no tax due, why would tax be due if I sell for a loss?\"",
"title": ""
}
] |
fiqa
|
79702e6ca780835570a542fd0b17bafa
|
Is the MBA an overrated degree/qualification?
|
[
{
"docid": "861b30cbf96958570789286d2028629b",
"text": "\"For some situations, an MBA can be overrated in the sense that given the cost of time and money, it isn't going to be a great return in some cases. There can be tens of thousands of dollars and a couple of years to get an MBA that some people believes should automatically make them worth $x more in their salary and life should be simple. I'd likely inquire as to what expectations do you have for what an MBA will do for you. Are you expecting to make connections in getting the degree? Are you expecting to learn about how to run a business from the coursework? Are you expecting something else? Depending on what you are expecting, I could see MBA as being anything from a great choice to a lousy choice for people. As noted by Pete Belford's comment, an MBA from a \"\"degree mill\"\" would be all but worthless. Where you go can reflect the value of the education as some universities are known for their program about this such as Ivy League schools.\"",
"title": ""
},
{
"docid": "bab2889767c18715a2a95569821f7ac5",
"text": "The quality of the MBA is really what decides if it's worth it. You have to make sure the school where you are going to is highly regarded or even prestigious. There is a big difference between what you find prestigious and others find prestigious. The student believing it is an awesome school is not enough, the companies and recruiters must believe it too. Make sure you do your homework on the ranking of the MBA program. Additionally, your undergraduate plays a role how well your MBA is perceived. A decent undergraduate degree complemented with an MBA from a highly ranked school will put you in a trajectory for a high salary and a management position.",
"title": ""
},
{
"docid": "cfccd74639a2963691ce0b45a6d06862",
"text": "There is a distinct difference between 'having a degree' and 'being genuinely smart and business savvy'. If you're genuinely smart and business savvy you could theoretically break into the business world with no degree and make a decent salary. The trouble there is that many people aren't smart and business savvy until they get a degree. On the other hand, it's very possible to get a degree and be completely oblivious about how to conduct your career (poor resume / interviewing skills, no business sense etc). In that case an MBA might not be totally useful (but probably still will be to a degree). However, if you ARE smart about how you conduct your career, an MBA should help you immensely.",
"title": ""
},
{
"docid": "50dc383bb6d53e0d880a0d14fe7763a4",
"text": "It depends on what you want it for If it is just salary then maybe not, for instance, some MBA programs may suggest their graduates make $100,000 per year, but you work in an oil field barely finishing high school and make $300,000 a year. If you go for the MBA right now, you may miss your chance to work in the oil industry for another few years (or weeks), but at the same time, the MBA lasts forever (although, real world experience is also relevant) and it may give you a leg up when you are 50 years old in the unemployment line (or maybe not, because you are overqualified) everything in life is a cost/benefit analysis Passing the GRE lasts for five years, so keep that in mind",
"title": ""
}
] |
[
{
"docid": "0681be109399381fe948ecb67b895dda",
"text": "If you can get into the top school, it's a no-brainer to go that route. An MBA at a top school will not only give you an education taught by world-renowned professors but also a large network of students and alumni.",
"title": ""
},
{
"docid": "b9c570c0829a187db8ac975d38fed142",
"text": "\"With any institution or organization, you're always going to have top, middle, and bottom performers. I don't think we should select prospective employees based on schools or brands, but the world is a vast place and having those things like brands as markers or indicators serves as a practical heuristic for recruiters. However, Many of my past colleagues from non \"\"top brand\"\" institutions are just as smart and capable. The idea is that the more selective the educational institution, the more likely it is to filter for top candidates who can then be fed into companies down the road. But the reality is that the filter is very narrow due to class size and school size so a lot of equally qualified candidates also get filtered out of the school because of marginal differences or sometimes just random luck. Therefore these incredible students end up attending their next top choice. That's the reason we shouldn't only hire from top schools. More talented people overflow to other schools. As a side note, Malcolm Gladwell is like the Myth Busters tv show, but for books. Entertaining, but ultimately flawed in several ways that he analyzes statistics and interprets data. Source: HBS MBA class of 2015. Currently interning at Amazon for summer. Will provide proof if required.\"",
"title": ""
},
{
"docid": "b7b429380409f445a03ac58e0b447a98",
"text": "I can't speak for all business schools but only my personal experiences as a student and then working professional. I graduated from a program ranked in the top 5 nationally and interviewed with several top companies (Intel, Ford, Sandisk, BP) right out of college before selecting the firm I began my career with. As I've moved on to other jobs having this degree has definitely opened doors for me and landed me interviews I might not otherwise have gotten. Plus the program I was in was heavily focused on case studies which is far superior to just lectures and note taking.",
"title": ""
},
{
"docid": "c37d4ffd623dc8f5e66a09a8b048068d",
"text": "\"Why? I did comp sci and have an MBA. I also do EMT work as a volunteer in a rural community. Do my toes are in both pools. I would really question deeply the motives from moving to business from medicine. Despite the articles you see, an MBA is hardly the road to riches. Most do okay. Top tier grads are making very good money. These are also a small % of people out there working. Even those making good money sacrifice that for really shitty hours and shit work for a while until they break into the higher earning spots. The \"\"models and bottles\"\" is exaggerated to beg in with, and less and less common every year. When someone asks me about getting an MBA or finance I ask why. What us their real reason. If its money, don't do it. Do it because you actual ly love the business of business. I have traded stocks since I was 12. Its always been interesting. If I forced myself to do it for the money, I'd be poor and miserable. I am not rich. But I am comfortable and I live the life and schedule I want. None of that is from that slip of paper. The knowledge I could have (and did) get on my own. I trade the markets, do real estate, and have 1-3 entrepreneural projects at any given time. Its the life I created for myself. I found it was really the only way for me to get what I wanted. My goals never fit we all with institution goals. TL;DR- what's your motivation? Its probably a shitty move.\"",
"title": ""
},
{
"docid": "26882f438edc69e359e71c6684c06d3b",
"text": "\"No, getting a liberal arts degree at a non-prestigious university is worthless. You can graduate from an Ivy League school or LAC equivalent with a degree in history/philosophy/English/etc. and go work on Wall Street or in MBB consulting. There very few fields where you have to be able to step in day 1 and have great technical knowledge. Mostly your degree and school are about signalling* that you can learn what's thrown at you. EDIT: \"\"Signalling\"\" and typos I couldn't correct on my phone.\"",
"title": ""
},
{
"docid": "85a7b4fe93b1eb94564c72924929b44e",
"text": "\"I have a BA in Economics from the University of North Texas and I think it's a wonderful degree. I paired it with a finance minor. As others have said, the BA degree has more theory and less quantitative skills, but I found the quant skills I learned in my BA (through multiple regression/time series) to be a great start for an entry level job out of college. I'll also say that while it's not a \"\"business\"\" degree, it has major implications in business. No, you won't know accounting, but the theory you learn in economics is applied in accounting, in operations, in finance, in marketing, etc. Honestly, if you're smart and you know how to apply what you learn in Econ, you can do whatever you want.\"",
"title": ""
},
{
"docid": "32a0db6c00812f8e1a420ecbb7ee3f94",
"text": "No studies are cited about the education of corporate management. I bet you'd find a lot of those MBA's have undergrad degrees in engineering and science. The company presidents where I worked were all former scientists or engineers with MBA's, including two astronauts. Other aerospace companies were the same. The more technical the business, the more I bet this is true.",
"title": ""
},
{
"docid": "6163023ef181f37dd937c24b217759ed",
"text": "\"Couple things, I will admit I was wrong about the total graduates at each of those programs; however, numbers taper out the lower the program is down to about 250-300 a class. Also, cut each of those numbers down to about 1/2 - 1/3 and you get the group that's actually focused on finance. Many MBAs do consulting, marketing, product development, etc nowadays. Also I'm a bit offended by you saying I don't understand the CFA. Couldn't be more mistaken boss, I'm siting for L3 in June like you. The requirement is only 2 years in an \"\"investment decision\"\" role, this also means A LOT of back office risk guys qualify. That's a pretty fungible qualification, you don't have to be a PM to qualify. I have a buddy who qualified having done 2 years in fund accounting, not exactly sell-side ER. I'm also going to guess you're a trader/brokerage/Cap Markets guy? If you wanna throw titles around I'm in a front office role at a BB, too, and worked at worked on buy-side research at a >$150bn value shop. CFA is definitely more desired in sell-side markets focused as opposed to IBD where an MBA is more useful (more strategy focused). The CFA is vital for boning up on quantitative skills an MBA won't cover, I'll absolutely give you that. But a lot of people fall into the trap of assuming a CFA is their ticket to bigger and better things. If you're working in back office risk management, getting a CFA doesn't immediately qualify you to do ER (which is a VERY common pitfall I see). Like an MBA it teaches everyone how to do the same type of analysis, too (another reason the title means less and less). Last weekend I had a conversation with a friend of a friend about this very thing! He's sitting for L3 CFA, works back office at a very notable HF, and expects to be moved up (without any indication that he will) to research when he's done. I asked his opinions about things like the European situation, fiscal cliff, and a hard landing in china. Not only was he not familiar these concepts he didn't even know what HFT was. The CFA gives you the tools to analyze the impacts of pension liabilities on EPS, but it still takes a passion about the markets, as well as creative/analytical judgement, to make it to ER. My only point is an MBA and CFA are very similar in many ways. Both tend to hold their noses way to high, too. It's about what you chose to get out of it and too often people care more about the title than the process, which is why they are still stuck in mediocrity after completing the designations. Go through a list of the biggest PMs in the business, most don't have either MBAs or CFAs! They achieved alpha by not following standard quantitative models but exploring creative and strategic avenues others undervalue while maintaining strict discipline. A model is a tool to better describe behavior and understanding of markets, it's not a solution.\"",
"title": ""
},
{
"docid": "b6c38f90732ad52a095e7778f0e22cb7",
"text": "Agreed my friend, and the UK is the country that is the furthest away from the European reality. You have schools charging 1 to 8k for a full years tuition. I know a case of someone having to sell his home to afford a top MBA in Europe (obviously it paid off), which goes to show how hard for europeans it is to afford US prices for education, meanwhile in the US they just hand it over to you. The problem comes when the Navients of the world come knocking on your door and you can't even save a penny",
"title": ""
},
{
"docid": "a8ca7eb8bc25b6b3e66e95e79a88a3ca",
"text": "I second the above post. I am a CFA charterholder, and have an MBA. The CFA Charter is the gold standard for asset management and investment research. Plus, it is a self-study program. You can sit for the Level I exam as a Senior in undergraduate, and this is a huge positive signal to prospective employers.",
"title": ""
},
{
"docid": "49c3bdca8231cd96261c8b730b808dc6",
"text": "Did you go to bschool? You actually do learn a lot. There are a lot of things that I do know that some of my fellow BA's in Business don't know. (business plan writing, how to properly read a financial statement, promotional strategy creation). Also, I got hooked up with a really cool internship that got me in front of some big VC's. There is value, is it worth the results? No. But let's be honest here, neither is law school (unless you go to a T14). Have you seen the job market? Brutal.",
"title": ""
},
{
"docid": "a5f8eea00fb62278790e63b033b88d19",
"text": ">What, specifically, do you believe it is about the MBA experience (2 semesters of core business skills, and 2 semesters of electives, all taken on top of a bachelors degree) that causes the problem? Business degrees are incredibly over-rated, I'm speaking as a business owner with quite a few employees here. I speak to a lot of business owners, some with degrees, some without, and most of them say the same - business cannot be taught in a classroom. The theory side to business is obviously helpful but in no way ensures you will become successful, and they really shouldn't be held with such high regard. In my own company I tend to try and avoid hiring people with business degrees, they tend to be incredibly arrogant (in my experience) and believe they deserve to be treated on the same level as entrepreneurs just because they have a degree.",
"title": ""
},
{
"docid": "238c94b81f6ac5b93957b99aede75c33",
"text": "\"Why not both? I have been working and studying at the same time since I was 13... for all purposes, when I finished high school, I was working and studying part time... until I got my B.Sc in Computer Science and Masters in Business Administration (MBA)... developed my career and now I am a senior executive making excellent money and supervising many people. In retrospect, I want to tell you that the degrees did not help me at all in my career in the sense that did not teach me anything of significance for real work and career life, nor did they lend me my first jobs. However(!!!), without a degree (piece of paper), I could not advance to my current position because \"\"degree required for this position\"\". One more thing, very important: when I studied for my MBA, and worked full(!) time, I had no choice but to take night classes (City University of NY, Baruch College, one of the best business schools in the country). **This was the best experience I had in all the of my college studies!** Why? Because all(!) the professors who teach in the night were working in the morning in their normal jobs - none of them were tenured professors. They were real business people, grounded, know what they are talking about, and they were teaching because they loved to teach and share the experience and knowledge. **Do you understand what I am saying here?** So, I did not get the theoretical nonsense from them. They actually taught us what really happens, the real approach to things, and the real issues to address. P/S: My son is following my way. Since he was 11, he works in the areas he like (Minecraft) and he made money since then, running classes, getting to know people in the field, getting experience, getting work ethics, etc. If he wants to go to Harvard, fine with me, but I think he just need to go to \"\"reasonable\"\" low cost college to get those pieces of papers called \"\"Diplomas\"\".\"",
"title": ""
},
{
"docid": "b239ecbe22ac4293f7f0df722ed82b8e",
"text": "You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple.",
"title": ""
},
{
"docid": "d6d52b842cc2405c33403cbfcbd53cbb",
"text": "\"The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in \"\"Fund #1\"\" are on-sale and likely to go up soon (soon is very subjective). If the market is going to go up soon (again subjective) you are probably better in fictitious Fund #1. This is the valid logic that is being used by the rep. I don't think this is manipulative based on costs. It's really up to Bob whether he agrees with that logic or if he disagrees with that logic and to make his own decision based on that. If this were my account, I would make the decision on where to withdraw based on my target asset allocation. Bob (for good or bad reasons) decided on 2/3 Fund 1 and 1/3 Fund 2. I'd make the withdraw that returns me to my target allocation of 2/3 Fund 1 and 1/3 Fund 2. Depending on performance and contributions, that might be selling Fund 1, selling Fund 2, or selling some of both.\"",
"title": ""
}
] |
fiqa
|
5a5483510633f6b60a6468f37fc56138
|
Taxable Website Ad Revenue
|
[
{
"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": ""
},
{
"docid": "719f35b28cb051d605fcb396a7a2589f",
"text": "If the $5000 is income, then you need to pay income taxes on it. That's simply the way it works. Hourly rate has nothing to do with whether or not you pay taxes. If it helps, try to think of the $5000 as the first $5000 you make for the year. Now it's covered by your standard deduction and you're not paying taxes on it.",
"title": ""
}
] |
[
{
"docid": "28132702905866ef072acfc647b5f91a",
"text": "I would put it under advertising. Technically the domain name should be amortized over its useful life... you can't really expense it all in the first year, unless it fits within Section 179.",
"title": ""
},
{
"docid": "054ecd42afa51caf2182f0869bccc846",
"text": "Ok thanks for this. I am curious, how would they know its facebook that is directing these increased sales. If it's TV or radio, you can tell by increased revenues from increased spots. But for a facebook ad or a google ad, unless this is the only form of marketing, how are you sure (unless again you can ask, did you hear from us by google or fb) its from one of these websites. My thinking was for a physical product when i made this comment.",
"title": ""
},
{
"docid": "aeab8468a372c7d171129435c11b7c50",
"text": "\"For an example of a company that didn't do that, see Google: https://www.sec.gov/Archives/edgar/data/1652044/000165204417000014/goog10-qq12017.htm [emphasis added] >\"\"Adoption of ASC Topic 606, \"\"Revenue from Contracts with Customers\"\" On January 1, 2017, we adopted Topic 606 using the **modified retrospective method** applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while **prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.** We **recorded a net reduction to opening retained earnings of $15 million as of January 1, 2017 due to the cumulative impact of adopting Topic 606**, with the impact primarily related to our non-advertising revenues. The impact to revenues for the quarter ended March 31, 2017 was an increase of $14 million as a result of applying Topic 606.\"\"\"",
"title": ""
},
{
"docid": "159ebc98bb6fd24aa4857ed919b18228",
"text": "Do I report it as income? Is it subject to just the same amount of taxes (~30%) as regular income? Are there any restrictions on how it can be used? It is income. You can deduct the costs of maintaining the web page and producing the software from it (have an accountant do that for you, there are strict rules on how to do that, and you can only deduct up to the income if its a hobby and not a for-profit business), but otherwise it's earned income like any other self employment income. It is reported on your schedule C or on line 21 of your 1040 (miscellaneous income), and you're also liable for self-employment taxes on this income. There are no restrictions, it's your money. Technically, who is the donation even being made to? Me, just because I own the webpage? Yes. This is for the United States, but is there any difference if the donations come from overseas? No, unless you paid foreign taxes on the money (in which case you should fill form 1116 and ask for credit). If you create an official 501(c) organization to which the donations are given, instead of you getting it directly, the tax treatment will be different. But of course, you have to have a real charitable organization for that. To avoid confusion - I'm not a licensed tax professional and this is not a tax advice. If in doubt - talk to a EA/CPA licensed in your State.",
"title": ""
},
{
"docid": "b4d7b7b57435b276bd7d1d63e0ca96f6",
"text": "\"Yeah, I'm actually working on such a web server... And you're right, it's really an entire platform more than it is a web server (though you can certainly use it as \"\"just a web server\"\"). Also, I did loads of testing to see what it takes to prevent adblock from working properly. Avoid the obvious stuff like using standard banner sizes and serving images from a directory called \"\"ads\"\" (hehe). I don't want to give away my secrets just yet but if you too make it your goal to work around adblock you'll find nearly impenetrable solutions in no time :)\"",
"title": ""
},
{
"docid": "c1f72824ef2b3072f154a0d2fa565ef4",
"text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.",
"title": ""
},
{
"docid": "3829f2bd93fbc08fcf8d58ebe3c01c34",
"text": "\"ITR1 or ITR2 needs to be filed. Declare the income through freelancing in the section \"\"income from other sources\"\"\"",
"title": ""
},
{
"docid": "afbca4d29419bb73a19199c8112612b3",
"text": "\"If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to send a 1099 to the IRS is $600. Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year. If they do not report it, the IRS will not know about it unless they audit you or something. However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 (\"\"other income\"\") depending on whether you consider this a business or a hobby. If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding.\"",
"title": ""
},
{
"docid": "15a3ce075535c30d8b619174f5cd06e6",
"text": "Salaries and etc are a business expense and chargeable against revenue for tax purposes. It is NOT tax deductible but it is an expense on an income statement in calculating net profit (after tax). You could say salary & etc are tax effective but not tax deductible.",
"title": ""
},
{
"docid": "2fcf68e3f01cd08d7f4dbcf747e10e6d",
"text": "You can invoice your advertisers and use the date of the invoice for tax purposes. Some advertisers may want to pay monthly, weekly etc so that would require multiple entries as income on the relevant dates.",
"title": ""
},
{
"docid": "3ae4e3911e0d4d3cf06bfadd1fd38e56",
"text": "It is best to take advise from / appoint a professional CA. Will I have to pay GST? No GST is applicable. Exports outside of India do not have GST. Do I have to collect TDS when I send money to the PUBLISHERS ? No But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India). There is only income tax applicable on profits. So whatever you get from Advertisers less of payments to publishers less of your expenses is your profit. Since you are doing this as individual, you will have to declare this as income from other sources and pay income tax as appropriate. Note there are restrictions on sending payments outside of India plus there are exchange rate fluctuations. It is best you open an Foreign Currency Resident [or Domestic] Account. This will enable you payout someone without much issues. Else you will have to follow FEMA and LRS schemes of RBI.",
"title": ""
},
{
"docid": "1d370b669a72ef0c912fcf327d67b3be",
"text": "[Reddit $20 million in revenue in 2016](https://www.recode.net/2016/4/28/11586522/reddit-advertising-sales-plans), is valued at $1.8 billion? I think this has more to do with our near zero interest rates world, and capital chasing returns in the stock market casino, than any rational business valuation. What goes up .......",
"title": ""
},
{
"docid": "418d1c8eb7b3bcbfe3ed9d3b91e0f720",
"text": "In an accounting position, a domain name would fall under an intangible asset. Copyrights and patents are intangible, while tangible assets would be buildings or land (also known as property, plant, and equipment). Noting above, you can list it as an expense for personal reasons, but that would be poor classification. Tangible and intangible assets come with expenses such as legal fees and design. In these instances, you would expense the cost, or fee, but add back that value to the tangible or intangible as it would be considered maintenance. Please read here for tax treatment of a domain name. Please read here for what an intangible asset is. Also read here on page 11 for more clarification by IFRS.",
"title": ""
},
{
"docid": "ecc3bdde1d9f426636c0fc2f5867d76e",
"text": "Ok go ahead and make a site like this and see how it does. Realistically nobody wants to sacrifice their own internet browsing speeds to remove a couple of skippable & blockable ads. It'd be great if gigabit fiber was available nationwide, but it isn't even close. 30% of households still have DSL. Your tech solution relies on building blocks that don't exist, and compromises that people don't want to make. Changing stuff over to P2P would require a massive infrastructure investment alongside with a rethinking of common web development principles. Before you go trying to reinvent the wheel, learn what pi is. The ad-based model works. The subscription-based model also works. Many sites are switching to a combination of the two. Servers allow for centralized updating of your content. The only broken thing is that ads aren't perfectly targeted to individual users, which is changing. If you don't want to see any ads, pay the website a subscription.",
"title": ""
},
{
"docid": "0660a055e498255f0629f66e7b8303f2",
"text": "\"Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's \"\"Good enough\"\", but I'm not trying to provide the \"\"good enough\"\" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the \"\"good enough\"\" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.\"",
"title": ""
}
] |
fiqa
|
914123959e454479e430675a63d2d237
|
UK - reclaim VAT on purchases for freelance work
|
[
{
"docid": "ed623c193cfc05a8c04cb3925bf45a18",
"text": "If you mostly do work for businesses/individuals who are VAT registered it's a no-brainer to become VAT registered yourself... Although you will have to charge your customers VAT (and pass this on to HMRC) because they are VAT-registered they will reclaim the amount so it won't actually 'cost' them anything. At the same time, you can reclaim all the VAT you're currently being charged on your business expenditure (business equipment, tickets to business events, business software, accountancy/other business services you pay for, web hosting etc etc etc) However, if most of your clients are not VAT-registered it's not worth you registering. You would have to charge your customers an extra 20% (and they wouldn't be able to claim it back!) and you would have to pass this on to HMRC. Although you could still claim for goods and services you purchase for business use, essentially you'd just be another tax collector for HMRC. That said, at the end of the day it's up to you! VAT returns are quarterly and dead simple. Just keep a spreadsheet with your invoices (output tax) and receipts (input tax) and then do some basic maths to submit the final numbers to HMRC. No accountant required!",
"title": ""
},
{
"docid": "7384ba26029dc697a612316e7d27c1e7",
"text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT.",
"title": ""
}
] |
[
{
"docid": "e64e4e41b617d2c494ffa890cb6abe93",
"text": "After a bit of rooting around the HMRC sites, I found this page which says this: One key difference is that digitised products are classed as electronically-supplied services for VAT and customs duties. These services are: For VAT purposes, the place of supply of these services is the country in which the customer lives. If you supply electronic services to a business customer in another European Union (EU) country, the customer accounts for any VAT due in that country. You should not charge UK VAT. If you supply electronic services to a consumer, charity or government body in another EU country, you have to account for UK VAT. If you supply electronic services to anyone in a country outside the EU, you don't pay any VAT. If, as a UK business, you buy electronic services from a company outside the UK, you have to account for VAT. If I read this correctly, I as the supplier of the website need to account for VAT only if the sponsor is a consumer, charity or government body in another EU country. It is not covered in this site, but I assume I must also account for VAT for a customer based in the UK. So in answer to the original question, a customer from Canada (which is currently outside the EU) would account for the VAT themselves, and I would simply charge the gross amount.",
"title": ""
},
{
"docid": "695f16aea2161d309f68ff92aa4f449b",
"text": "You can claim VAT back if you are VAT registered. You MUST be VAT registered if your turnover is more than £82,000. You MAY register if your turnover is less. However, you can only claim back as much VAT as you actually received, and you can only claim VAT back on purchases that were made for your business, not for private use. And you need to remember that if you are VAT registered, you MUST charge VAT on every income. If you mostly trade with private customers, it means that your prices all just went up by 20%, so it's not a good idea.",
"title": ""
},
{
"docid": "ba9c7a098b91c3adfcde14646cd9d9e2",
"text": "Is the VAT scam still on the go? I was under the impression that amazon have to pay vat according to the country the items are shipped to, not shipped from? It will be a complete fuck up on the part of our politicians if this loophole has not been closed yet.",
"title": ""
},
{
"docid": "3b36305cf5bd1204e47a99690160c354",
"text": "The vendor needs to do this using apportionment, according to the VAT rules for mixed supplies: If you make mixed supplies and the individual supplies are not liable to VAT at the same rate then you need to work out the tax value of each supply in order to calculate how much tax is due. If the tax value is based on the total price you charge (see paragraph 7.3) you do this by splitting that price between the supplies. This is called an apportionment ... There is no special method of apportionment ... However, your calculations must be fair and you must be able to justify them. It is usually best to use one of the methods shown in section 32. The section 32 referred to really relates to apportioning use between business and non-business purposes, but it implies that splitting up the total price in proportion to the original prices would probably be fair. So in your example the vendor might split the £5 discount equally between the spoon and the carrycot as they had the same gross cost, and pay VAT as if each had cost £7.50 gross. The vendor could also do it in proportion to their net (pre-VAT) prices and thus apportion a bit more of the discount to the carrycot than the spoon, but as this would lead to them paying slightly more tax overall they probably wouldn't choose to. However, none of this is likely to be too relevant to a consumer, since in the UK prices must be presented as the gross (VAT-inclusive) amounts and so the discounts will also apply to those amounts. It will of course affect how much of the purchase price the vendor ends up paying on to the government and thus might indirectly affect what discounts the vendor is willing to offer.",
"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": "b19b22ee8d55cec0980dff641e6ca784",
"text": "I would not expect any problems. Your interest will have tax deducted at 20% which I don't think you would be entitled to reclaim because you don't get a personal allowance if you aren't resident in the UK, and unless you have a huge amount of UK earnings you would not be legally liable to any higher rates of tax so there would be no issues there. If you were liable to more tax you would be obliged to inform the Inland Revenue.",
"title": ""
},
{
"docid": "bc055c6c70f3249b941ed39e3ca4554e",
"text": "As far as taxes are concerned, if your income is €10 to €20 a month, the Finanzamt doesn't even want to hear from you. To be on the safe side, give them a call and you will probably be told that there is a minimum amount, and if your revenue is below that you don't have to do anything. As far as VAT (MwSt) is concerned: You can only deduct it from VAT that you would have to pay to the government. If you are supposed to pay €100 VAT to the government, you can deduct up to €100 VAT paid to suppliers. If you don't pay VAT, you can't deduct it.",
"title": ""
},
{
"docid": "472b1c3431cd2096d17855cf59342fd4",
"text": "\"I'm thinking about visiting the UK and I'm wondering which things are affected by the VAT and which are not. Most consumer goods are subject to VAT at the standard rate. Most food sold in shops is zero-rated, with the exception of a handful of luxury foods. Food in cafes/restaurants and some takeaway food is subject to VAT at the standard rate. Most paper books are zero rated (IIRC books that come with CDs are an exception). Some services are exempt, insurance is a notable one, so are some transactions with charities. Some small buisnesses and sole traders may not be VAT registered in which case there is no VAT for you to pay (but they can't reclaim VAT on the goods and services they buy). (there is a distinction between zero-rated and exempt but it's not relavent to you as a customer). Some goods have special rules, notably second hand goods. Prices are normally given inclusive of VAT. The exception to this is suppliers who mostly deal in business to business transactions. Also as a non-UK resident is there a way to get a rebate/reimbursement on this tax? There is something called the \"\"retail export scheme\"\" which can get you a refund but there are a number of catches.\"",
"title": ""
},
{
"docid": "9b8cabcfb79bae49fcb9ee46fc5926a3",
"text": "VAT is charged to consumers and passed on to the Government. Income tax is paid by the employees. Corporate tax on income is the true tax on corporate value add, which isn't reflected in this practice. That being said, there is nothing unique or illegal to what Starbucks is doing, pretty much all global corporations have entities setup for the exclusive purpose of licensing IP/brands. The entity just needs to demonstrate an arm's length in transactions.",
"title": ""
},
{
"docid": "cbe990789e2fb4be1cceafe3db9efa52",
"text": "The scenarios you describe are obviously easy to catch. It is reasonably defined in tax law, but more needs to be done to exert the spirit of the rules. The problem is that when international businesses are cross charging there is limited information the tax offices have to argue the toss - for example a UK tax office cannot audit the accounts of its US parent in order to decide whether a cross charge representing license fees and marketing costs is fair - but these types of transaction are one of the primary mechanism for avoiding taxes. These are therefrom inferred by the UK companies accounts but not 'in the open' in the sense that they can be easily challenged with accurate information. And that is why it happens, people know about it, but it is still not easy to stop.",
"title": ""
},
{
"docid": "305d0bb481877f331240bc5ec2e0572e",
"text": "I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise.",
"title": ""
},
{
"docid": "be92248dc7b9b608aaeb2cdb65eb2bd0",
"text": "Several things to consider: I don't see why your friend should pay any tax. It's not his income at all. And I am not sure where your income should be taxed in this scenario. Is he declaring it as his income somehow? The bank won't do it for him, the transfer as such should be transparent. On the other hand, money transiting on his account could in principle look suspicious, although €300 is unlikely to raise alarm. What I do know is that if you do pay taxes, 20% is not particularly high as such. There are four brackets of income tax (and tax-like contributions to the pension system) in the Netherlands, between 36.55% and 52%. Rates for personal taxes in the Netherlands are simply way higher than what you might be used to in Eastern Europe or what has been mentioned in comments. In fact, if anything, 20% seems too low. I am at a loss guessing what it could correspond to, you could ask your friend how he came to that number. There various tax discounts (kortingen) and deductions (aftreken) that apply to freelance work (and some that apply to all incomes). €3000 yearly is quite low and would probably not be taxed at all if you were recently registered as freelance (zzp'er) in the Netherlands and had no other sources of income. But on the other hand, if your money is treated as being part of your friend's income, these wouldn't apply, as he is probably already benefiting from them. There are special rules for copyright fees. Not sure this is necessarily 100% kosher but I have met people who got paid that way for articles they wrote in trade publications.",
"title": ""
},
{
"docid": "58f2669e6bcfa652552c7c3a9dee0474",
"text": "Sales taxes are charged at the point of purchase, while a VAT is assessed during the production process of the item. In the end, the amount paid by the consumer is the same, but with the VAT, the tax was collected from the manufacturer, instead of the consumer. One of the big arguments for VAT is that it prevents lost revenue due to things like smuggling (if sales tax increases past 10% smuggling spikes, so the VAT is a good mechanism if you're looking to implement large taxes on goods). It also keeps the tax burden away from shippers and other tiers of the production process that don't change the intrinsic value of the item.",
"title": ""
},
{
"docid": "bab4950e509d64dcb449b74d6a9e57f5",
"text": "The problem with your profession is that it is hard to distinguish those activities as 'services rendered' or just a 'pastime hobby'. If you believe that both of those activities constitutes a 'service rendered in a professional capacity', then you should include it into the 'Goods and services for your own use' field. However, should you believe that those services rendered was not in a professional capacity and it was in a personal one (i.e. helping out), you need not include it in the field. In addition, should you feel that the pro-bono services rendered overlaps with your professional freelance work in any way, you might want to consider the service rendered to your dad and yourself as a 'professional service' and include it in Goods and services for your own use. Such examples include (but not limited to): It might be wise to call up the HMRC to clarify on your particular situation. But what I know is, this box was created to ensure that such services rendered should be considered a profit (i.e. an advantage, adds value) and not a loss (or no value).",
"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": ""
}
] |
fiqa
|
fa962386a62444a813eeb612edff861f
|
Borrowing 100k and paying it to someone then declaring bankruptcy
|
[
{
"docid": "4ebdef47b59f8a0bdd4e4fba0440b5b3",
"text": "This is fraud and could lead to jail time. The vast majority of people cannot obtain such loans without collateral and one would have to have a healthy income and good credit to obtain that kind of loan to purchase something secured by a valuable asset, such as a home. Has this been done before? Yes, despite it being the US, you may find this article interesting. Hopefully, you see how the intent of this hypothetical situation is stealing.",
"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": "dbb366333dff9b93b005f8c8ed0d9ac7",
"text": "Note that in the UK at least this scam - not so dissimilar from what you propose - seems be perfectly legal behaviour: Evidence to date is that both of you can expect to walk away without much consequence.",
"title": ""
},
{
"docid": "3732c03ce8f43f586a8a38188d3be293",
"text": "This sounds like a crazy idea, but in reality people don't make the wisest decisions when considering bankruptcy in Australia. My suggestion would be to get some advice from an insolvency specialist.",
"title": ""
}
] |
[
{
"docid": "944149a6b55094f1bf61f9e833deb019",
"text": "You're going to want to work with a collection agency or law firm that specializes in collections. They'll buy the debt from you for something like 10-25% depending on the state and whether they are interested in something this small. People who don't pay rent and get wages garnished for $6k are a bad risk. They'll discount the judgement significantly since the risk of bankruptcy is probably pretty high.",
"title": ""
},
{
"docid": "73665670f8f89a0dfc6e8dd8afc68fdb",
"text": "A $100K house and $100K are not equivalent assets. Here's a hypothetical... You and I both work for the same company, and both get a $100K bonus (yes, I said it's hypothetical). You decide to use the $100K to pay off your house. I put the money in the bank. Six months later, our company lays both of us off. I have $100K in the bank. I can last for quite a while with that much money in the bank. You have a house, but you can't get a mortgage or home equity loan, because you don't have a job. The only way you can access the money is by selling the house, which requires you to pay money to a real estate agent and perhaps taxes, and leaves you looking for a place to live. That assumes there isn't something systemic going on - like the credit crash - and there is credit available for somebody else to buy your house.",
"title": ""
},
{
"docid": "f0c395884f356a9dbf7e2bb8583a555c",
"text": "\"First, when a debt collector says, \"\"It's to your advantage to give me money now\"\", I'd take that with a grain of salt. My ex-wife declared bankruptcy and when debt collectors couldn't find her, they somehow tracked me down and told me that I should tell her that it would be to her advantage to pay off this debt before the bankruptcy went through. That was total nonsense of course. The whole point of bankruptcy is to not have to pay the debt. Why would you pay it just before it was wiped off the books? (Now that I think of it, I'm surprised that they didn't tell me that I should pay her debts.) As others have noted, this would be controlled by state law. But in general, when someone dies any debts are payed from the assets of the estate, and then whatever is left goes to the heirs. If nothing is left or the debts exceed the assets, then the heirs get nothing, but they don't have to pay somebody else's debts. I don't see how you could \"\"put the house under your name\"\". If he left the house to you in his will, then after any debts are settled in accordance with state law, the house would transfer to you. But you can't just decide to put the house in your name outside of the legal inheritance process. If you could, then people could undermine a will at any time by just deciding to take an asset left to someone else and \"\"put it in their name\"\". Or as in this case, people could undermine the rights of creditors by transferring all assets to themselves before debts were paid. Even if there's some provision in your state for changing the name on a deed prior to probate to facilitate getting mortgages and taxes paid or whatever, I would be quite surprised if this allowed you to shelter assets from legitimate creditors. It would be a gaping loophole in inheritance law. Frankly, if your father's debts are more than the value of his assets, including the value of the house, I suspect you will not be able to keep the house. It will be sold to pay off the creditors. I would certainly talk to a lawyer about this as there might be some provision in the law that you can take advantage of. I'll gladly yield on this point to anyone with specific knowledge of New Jersey inheritance law.\"",
"title": ""
},
{
"docid": "55467febe0d49ff69a56f5882b99fb1a",
"text": "I dunno. Borrow $65,000 with zero collateral, string the lender along for 20+ years, then die? Sounds like a great decision to me. I wonder why a bank would ever take the other end of that lemon of a deal? Oh, right...",
"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": "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": "a60720b47aafa8386b9d4ed668e79f7d",
"text": "Once the loan is taken out, Chase would turn around and sell that debt to others, getting all their money upfront and leaving both the person who took the loan out and the new creditor holding the bag. I worked for a company that used to do this with loans for other things. They company was Norvergence and were complete scumbags.",
"title": ""
},
{
"docid": "47f824d42ed7ff0928853fa65f72d426",
"text": "\"I am not sure how anyone is answering this unless they know what the loan was for. For instance if it is for a house you can put a lien on the house. If it is for the car in most states you can take over ownership of it. Point being is that you need to go after the asset. If there is no asset you need to go after you \"\"friend\"\". Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court. Part of this process is also getting a hold of the lending institution. By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options. For example if it is for a car a bank may help you clear this out if you get the car back plus penalty. If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default. If they can recover it for free they will be willing to work with you. I worked in repo when younger and on more than a few occasions we had the cosigner helping. It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car. I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the \"\"friend\"\" still is around and trusts cosigner. I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the \"\"friend\"\". I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice. Seeking a lawyer is a joke. Going after a fleeing party could eat up 40-50 billable hours. It isn't like you are suing a business or something. The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details. The other part is cosigning the loan. Why the hell would you cosign a loan for a friend? Most parents won't cosign a loan for their own kids. And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend. I have seen simple contracts that include 30% interests rates that were upheld by courts.\"",
"title": ""
},
{
"docid": "3d4199c0128572c50ece971a7a9078e1",
"text": "\"If you're looking for an analogy or exercise, I saw a personal finance show that had people climb stairs, with the debt as weight. Every flight of stairs more \"\"interest\"\" and loans to cover income gaps have to be added to the total debt they carry up the stairs. Can't find the video online though. But I think you need to ask your brother what he thinks his problem is, that will be solved with more loans. It's likely that your brother's problem can't be solved with advice. Since he's not spending rationally, rational arguments have no sway. I suspect he'll tell you his problem is one or two angry creditors, perhaps even ones you don't know about, rather than a fundamental imbalance between income and expenses. Robbing Peter to pay Paul, or moving weights from one backpack compartment to another, doesn't solve the underlying problems. Whatever you do, another loan from you should be off the table. He's an adult now, with problems the size of which you can't help with. We both know how his story ends: all creditors cut him off, and he's in court over garnished wages and creditors fighting over his assets. Reality is the only argument that will have any sway. He's far too personally invested in his scheme to admit defeat, which is why neither words not images nor moving pictures will help him with this learning disability.\"",
"title": ""
},
{
"docid": "58086f490032a28d2d7dafa584763a52",
"text": "Get a Bankrupsy lawyer. They'll tell you to stop paying the bills and use the money to pay their fee. Yes... You do need to pay in advance. I can tell you honestly that it was the best thing that ever happened to me. Think about it this way... When you loan someone moneyyou're placing a bet that they'll pay you back. You try to keep the dos in your favor by using credit ratings etc but sometimes you win and sometimes you lose that bet. It's nothing personal. It's business. The casino doesn't feel bad when you lose your bets and your money and you don't expect them to. The person placing the bet knows what they're doing and knows all about the risks, etc. it's a calculated risk. Again... It's just business and it's nothing personal. It's also not nesessairly a failure. Depending on the situation... Bankrupsy is an excellent business decision. Big business do it all the time. Sometimes bankruptcy is a very smart decision and not going bankrupt is the worst decision you can make. My only regret with my own bankruptcy is that I didn't do it sooner. I could have saved the family years of unnecessary hardship and I could have gotten it over with much sooner. Don't be emotional. Be smart and do the smart thing.",
"title": ""
},
{
"docid": "c1433c2b4e305081725ff8e0f04e16db",
"text": "\"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper. I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out. To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time. Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years. Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck. But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had \"\"shit happen.\"\" Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time.\"",
"title": ""
},
{
"docid": "aafdddb3091909bfbfb4540db55893ac",
"text": "I have an example that may be interesting for your question. My grandfather had a tennis club around 35 years ago, and some other businesses. Some investments went bad and he was heading for bankruptcy due to the tennis club's expensive payments. So he asked to renegotiate a variable rate rather than a fixed rate, even though the interest rates were going up, not down. The idea was that if the current situation is going to bankrupt you, taking a chance might be better. As an analogy, if you can't swim and you'll drown in 6 feet of water, it doesn't matter that you're taking the risk to go deeper. You might have to take that chance to survive. He did keep the tennis club in the end but that's irrelevant here. For student loans, if I'm not mistaken, declaring bankruptcy doesn't free you of all their debt, so it may not be applicable. And this situation is when renegotiating, not when negotiating the first time. because obviously if you're in trouble financially, taking a loan you know you can't repay is suicide.",
"title": ""
},
{
"docid": "1569f93563ab208396b84015c60d687d",
"text": "* Absolutely agree with /u/IsAnAlpaca * You /must/ not agree to this without seeing his balance sheet. * That means assets and liabilities, but also ask for the last 12 months' cash flow * Inability or unwillingness to provide any of those things is a HUGE no-go red flag.",
"title": ""
},
{
"docid": "d9de70bcd9812008c3cdf3d20cee28ba",
"text": "I had a similar situation, except the debtor had no connection to us whatsoever, other than holding our phone number previously. We tried going through channels to deal with it, and had no success. At the end of the day, I was very abusive to the people calling, and forwarded the number to a very irritating destination.",
"title": ""
},
{
"docid": "d701e65d752ded1d87e896f088aea506",
"text": "\"Somehow I just stumbled onto this thread... > You essentially robbed the person holding the debt (since you promised to pay it off). Depends on leverage, with fractional reserve lending. Banks are permitted to loan out 30x their actual assets, or more. If I have $1 but can loan out $30, and anything more than $1 gets paid back, I haven't lost any money. In addition, I can write off the amount defaulted, *and the government will pay me back* for certain types of loans. With student loans, since they are almost impossible to discharge, gov't will pursue the borrower for years and decades, and ultimately collect more interest. Here is an article on it: http://online.wsj.com/article/SB10001424052748704723104576061953842079760.html > According to Kantrowitz, the government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years. Alan Collinge, founder of borrowers' rights advocacy Student Loan Justice, said the high recovery rates provide a \"\"perverted incentive\"\" for the government to allow loans to go into default. Kantrowitz estimates the recovery rate would need to fall to below 50% in order for default prevention efforts to become more lucrative than defaults themselves. Not to mention: http://studentloanjustice.org/defaults-making-money.html > So essentially, the Department is given a choice: Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs). From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario, for not only the return, but perhaps the potential savings in subsidy payment as well, And don't forget the penalties accruing to the person defaulting; they will probably have to move out of the country in order to escape collection. And let's factor in the huge ROI the lender sees by creating an indentured servant class. Plus, the gov't will issue as much currency as it wants, to make *itself* whole. And how much of a loss IS the loss, when the whole of the loan amount went right back into the local economy, paying professors, janitors, landlords, grocery stores, etc.? And don't forget all THOSE taxes (income and sale) that the gov't collects. Government will collect ~30%-50% of the loan immediately as income and sales tax, plus a portion of it every time the money changes hands (I pay income tax, then use some of my after-tax money to pay you for a product or service, and you still have to pay tax on that money, and so on). So it's more complicated than having \"\"robbed the person holding the debt\"\". Banks at 30x leverage don't lose money as long as they get back 1/30th of the total amount lent out, including interest, fees, and penalties, before considering write-offs and government repayment. In fact, the point of over-leverage is so you CAN make loans that have risk attached. If you could only lend what you actually had, you would have to stay away from anything risky because it would be too easy to lose money. Having virtual $ to bet means you can serve market segments that have higher risk. This makes MORE money for the banks, that's why they do it. They are already playing with funny money, so they don't lose any even if you default and move to another country. And the money you \"\"spent\"\" has also made its way back to them in various amounts, such as your professor's mortgage payments, auto loan, etc. Your taking on debt already helped the bank get its OTHER loans repaid. So, roughly speaking, if you took out $90,000 and $3,000 of that made its way back to the bank through various means, they haven't lost any money, because it only cost them $3,000 actual dollars in the first place.\"",
"title": ""
}
] |
fiqa
|
7c5e6ae8ab42ff3548bcd0e792cabd56
|
Strategies for paying off my Student loans
|
[
{
"docid": "6e749d75baf01102ec18f7913553b5f3",
"text": "My advice is that if you've got the money now to pay off your student loans, do so. You've saved up all of that money in one year's time. If you pay it off now, you'll eliminate all of those monthly payments, you'll be done paying interest, and you should be able to save even more toward your business over the next year. Over the next year, you can get started on your business part time, while still working full time to pile up cash toward your business. Neither you nor your business will be paying interest on anything, and you'll start out in a very strong position. The interest on your student loans might be tax deductible, depending on your situation. However, this doesn't really matter a whole lot, in my opinion. You've got about $22k in debt, and the interest will cost you roughly $1k over the next year. Why pay $1k to the bank to gain maybe $250 in tax savings? Starting a business is stressful. There will be good times and bad. How long will it take you to pay off your debt at $250 a month? 5 or 6 years, probably. By eliminating the debt now, you'll be able to save up capital for your business even faster. And when you experience some slow times in your business, your monthly expenses will be less.",
"title": ""
},
{
"docid": "c4b02dc1399ac958d79cd4f2b20e5a4c",
"text": "Considering I'm in a nearly identical situation, I'll speak to my personal strategy and maybe there's some value for you as well. You have ~$22k in loans, which you say you could pay off today. So, what I read is that you're sitting there with a $22k investment and want to know which investment to make: pay down debt, invest in yourself/start up, or some variation between those options. Any investor worth his salt will ask a couple of questions: what is my risk, and what is my gain? Paying off your student loans offers no financial risk at the cost of opportunity risk, and gains you returns of 3.4%, 6.8%, 3.4%, 4.5%, and 6.8%. Those percentage gains are guaranteed and the opportunity risk is unknown. Investing in a startup is inherently risky, with the potential for big payoffs. But with this investment, you are accepting a lot of risk for potentially some gain (it could be the next Apple, it could also fail). So, with your situation (like mine), I'd say it's best to accept the easy investment for now and fully vet out your tech start up idea in the meantime.",
"title": ""
},
{
"docid": "95a81e325d968cc68b3e4865abd6482b",
"text": "Starting up a company is fun, stressful, and exciting. It's also often a lot harder than you expect. Income, revenue, and cash flow are big concerns, and you need to be able to eat while you're hunting down your first paying customers. Don't pay off all the debt if that will leave you without any money for living expenses. Perhaps a compromise is in order? Pay off the high-interest loans first, and continue to make payments on the lower-interest loans while you start up. It doesn't have to be all or nothing.",
"title": ""
}
] |
[
{
"docid": "29922615ca4e1e72732efd362bcf2a41",
"text": "\"I don't have enough reputation in this community to comment yet, so this \"\"answer\"\" is really just a minor furtherance of JoeTaxpayer's comment... THe only thing I might add to this great answer - make all minimum payments, and send all extra available cash to the highest interest card. If OP will pay in full after 6 month, this may make little difference, but it will be a few dollars in his pocket instead of the bank. – JoeTaxpayer♦ Dec 2 at 17:42 ...on Ben Miller's excellent answer. Once you have taken JoeTaxpayer's advice and ordered your cards by interest rate and have paid off the highest interest card first, take that same payment and add it to your next-highest card's minimum payment. Once THAT is payed off, take the combined amounts that you were paying to cards one and two and apply it all to card three along with its minimum payment. You see where this is going. By aggregating your payments thusly, each card will get paid off successively more quickly than the previous one, without increasing your overall payments to the cards, and you are retiring the highest-interest debt first. Your last card will then be paid off in record time, because you have combined all of the payments for cards 1-4. One other amplification: Since we don't know which account has which interest rate, it may be more advantageous to order them by balance, with the smallest first. That way you retire the first card quickly, which gives you a sense of accomplishment, and by the time you reach your highest balance card, you have snowballed all of your payments and are now throwing boulders instead of pebbles at it. You'll have to do that math to see which method has the most benefit. Then roll it all into the car payment. Then roll it into your student debt. Etc.\"",
"title": ""
},
{
"docid": "109e10e02e4805f60b4c8bff30f5dee2",
"text": "Finish off the student loans. If your absolute goal is saving as much as you possibly can for retirement, then you of course will be best off by maxing your IRA contribution every year. However, student loans are just another thing hanging over you, and nothing feels better than getting rid of a large debt. Pay them off, take yourself out to a nice dinner to celebrate, and tuck away what you have left over in your IRA. Paying off student loans is a great accomplishment - celebrate it! The difference long-term will be negligible.",
"title": ""
},
{
"docid": "ab0b002019998dadfd61f5d5231a3e07",
"text": "Excellent question and it is a debate that is often raised. Mathematically you are probably best off using option #1. Any money that is above and beyond minimum payments earns a pretty high interest rate, about 6.82% in the form of saved interest payments. The problem is you are likely to get discouraged. Personal finance is a lot about behavior, and after working at this for a year, and still having 5 loans, albeit a lower balance, might take a bit of fight out of you. Paying off such a large balance, in a reasonable time, will take a lot of fight. With the debt snowball, you pay the minimum to the student loan, save in an outside account, and when it is large enough, you execute option #2. So a year from now you might only have three loans instead of five. If you behaved exactly the same your balance would be higher after that year then using the previous method. However often one does not behave the same. Because the goals are shorter and more attainable it is easier to delay some gratification. The 8 dollars you are saving in your weekly gas budget, because of low prices, is meaningful when saving for a 4K goal, where it is meaningless when looking at it as a 74K goal. With the 4K goal you are more apt to put that money in your savings, where the 74K goal you might spend it on a latte. For me, the debt snowball worked really well. With either option make sure that excess payments actually go to a reduction in principle not a prepayment of interest. Given this you may be left with no option. For example if method #1 you only prepay interest, you are forced to use option #2.",
"title": ""
},
{
"docid": "1d7a72fc20efe28acab0c88c7cfe516f",
"text": "You are making close to 200 K a year which is great. The aggressive payments on loans takes out around 30K which is good. The fact that you are not able to save is bad. Rather than pushing off your savings to later, scale down the lifestyle and push the upgrade to lifestyle for later",
"title": ""
},
{
"docid": "152b637940a0aa25faccd23d12b3fb4e",
"text": "\"Place your savings into safe interest-bearing accounts. Take out the loans. Keep constant track of your net worth. Having 100,000$ and 80,000$ in interest free debt is better than having 20,000$. You can always convert money + debt into less money and less debt, but you cannot always convert less money and less debt into more money and more debt. Now, there are risks; that is why you want an interest-bearing account to place your savings in to offset the debt. This minimizes the risk. It also reduces the return. It is arguable that you should be at your most financially risky at a young age. I'd argue that your future earnings are your by far largest asset at this point, and as a high school student going into college those future earnings have extremely high variability. Your financial situation is extremely unpredictable; being conservative about your high-leverage student-loan + education investments is probably justified. The fact you can manage arbitrage here means you should; and if you are careful, you can eliminate risk and get almost risk-free profit from the maneuver. If your money is in less than perfectly safe accounts, you are now doing leveraged investing and magnifying the risk and return of said investments. If your money must be spent on college or you'll be financially punished, then you may want to consider pulling it out before the last possible legal point just in case something goes wrong. Apparently 529 plans may not treat \"\"paying off student loans\"\" as a valid way to spend the money. You may need to talk to a lawyer or accountant about the legality of using these plans to pay off student loans, and the tax/penalties involved.\"",
"title": ""
},
{
"docid": "ecd7676456c99f54acf9236555651deb",
"text": "Its almost always better to pay off loans sooner rather than later. Being debt free is amazingly liberating. However, in your case, I'd be reluctant to make significant headway on a loan repayment program. Here's why: The best investment you can make, right now, is in yourself. Completing your education should be the top priority. The next would be to meet the requirements of a job after received after school is complete. So what I would do is estimate the amount of money it would take to complete school. Add to that an estimate of an amount to move to a new city and setup a household. That amount should be held in reserve. Anything above that can used to pay down loans. Once you complete school and get settled into a job, you can then take that money and also throw it at your loans.",
"title": ""
},
{
"docid": "493fd71559a53d5e00e75781492a9850",
"text": "Keep 3-6 months (or more if you need to, for me the number is 9 months) worth of expenses in an emergency fund. Put the rest against the student loan. The length of time depends on your situation. I have family, and work in IT. Changing jobs takes me longer, because ... reasons. Having less than 6-9 months of buffer means that I have to rush and possibly take a position that is not a good fit, or get behind on payments. So, set aside your emergency fund, add to it if you need to. Once it is fully funded, take the money you were using to fund the emergency fund and budget that to clearing student loans. Also, don't start new credit cards, and be sure to never carry a balance on them. I know it seems like a lot, but keep in mind that yours is small, and you'll likely be able to knock it out in a very short time. Edit (after OP listed expenses): Taking into account the expenses you listed, it looks like you have about 2000 per month in expenses (if you're in emergency fund mode, luxuries can wait, and you can tighten the belt on food, so go with the lower end of your estimate.) Lets say you have 600 a month to work with. My suggestion would be bring savings up to $6000. That will take you two months. Then pay 850 a month to student loans. You'll be paid off in a year, and still have 6000 for emergencies. Once you're done, you will have 850 a month to save and invest. With patience, persistence and care, you can start a nest egg that will allow you to remain financially independent. Search around for FIRE (financial independence, retire early) and other strategies for retirement savings and investing. Be sure to save for retirement. The worst inheritance to leave your loved ones would be to become financially dependent upon them in your later years. And watch out for credit, it's a trap.",
"title": ""
},
{
"docid": "934d84cd728be42ec4f3f01466e993c3",
"text": "Please direct personal finance questions to /r/personalfinance However, my opinion is that you are unlikely to earn more than 7% annualized returns from any combination of asset offerings in your 401k over the next several years; therefore, you should pay off your student loans first. I am ignoring tax consequences, but /r/personalfinance may be able to provide a more quantitative answer.",
"title": ""
},
{
"docid": "1ee79f89d2eccdf0d137f986fd276ece",
"text": "It doesn't make a whole lot of sense to save up and wait to make a payment on any of these loans. Any dollar you pay today works better than saving it and waiting months to pay it, no matter which loan it will be applied to. Since your lender won't let you choose which loan your payment is being applied to, don't worry about it. Just make as big a payment as you can each month, and try to get the whole thing out of your life as soon as possible. The result of this will be that the smaller balance loans will be paid off first, and the bigger balance loans later. It is unfortunate that the higher interest rate loans will be paid later, but it sounds like you don't have a choice, so it is not worth worrying about. Instead of thinking of it as 5 loans of different amounts, think of it as one loan with a balance of $74,000, and make payments as quickly and as often as possible. For example, let's say that you have $1000 a month extra to throw at the loans. You would be better off paying $1000 each month than waiting until you have $4000 in the bank and paying it all at once toward one loan. How the lender divides up your payment is less significant than when the lender gets the payment.",
"title": ""
},
{
"docid": "4b9b57c631289fcd2c862379e592700e",
"text": "Basically you have 4 options: Use your cash to pay off the student loans. Put your cash in an interest-bearing savings account. Invest your cash, for example in the stock market. Spend your cash on fun stuff you want right now. The more you can avoid #4 the better it will be for you in the long term. But you're apparently wise enough that that wasn't included as an option in your question. To decide between 1, 2, and 3, the key questions are: What interest are you paying on the loan versus what return could you get on savings or investment? How much risk are you willing to take? How much cash do you need to keep on hand for unexpected expenses? What are the tax implications? Basically, if you are paying 2% interest on a loan, and you can get 3% interest on a savings account, then it makes sense to put the cash in a savings account rather than pay off the loan. You'll make more on the interest from the savings account than you'll pay on interest on the loan. If the best return you can get on a savings account is less than 2%, then you are better off to pay off the loan. However, you probably want to keep some cash reserve in case your car breaks down or you have a sudden large medical bill, etc. How much cash you keep depends on your lifestyle and how much risk you are comfortable with. I don't know what country you live in. At least here in the U.S., a savings account is extremely safe: even the bank goes bankrupt your money should be insured. You can probably get a much better return on your money by investing in the stock market, but then your returns are not guaranteed. You may even lose money. Personally I don't have a savings account. I put all my savings into fairly safe stocks, because savings accounts around here tend to pay about 1%, which is hardly worth even bothering. You also should consider tax implications. If you're a new grad maybe your income is low enough that your tax rates are low and this is a minor factor. But if you are in, say, a 25% marginal tax bracket, then the effective interest rate on the student loan would be more like 1.5%. That is, if you pay $20 in interest, the government will then take 25% of that off your taxes, so it's the equivalent of paying $15 in interest. Similarly a place to put your money that gives non-taxable interest -- like municipal bonds -- gives a better real rate of return than something with the same nominal rate but where the interest is taxable.",
"title": ""
},
{
"docid": "080056d630bff8fef41c2b47594e2d9a",
"text": "I'd be tempted to pay off the 35k in student loans immediately, but if you have to owe money, it's hard to beat zero percent. So I don't think I would pay it all off. Maybe cut it in half to make it a more comfortable payment. Currently, you are looking at $6K a year to pay them off, which is about 20% of your income. Cut that in half and you will sleep better! Definitely pay off the medical and credit cards. You're probably paying 20% on that. Clean it up. If you need a car, buy yourself a car. You have no savings, so I would put the rest in some kind of money market savings account. You are at an age where many people go through frequent changes. Maybe you get your own place, and you'll need to furnish it. Maybe you go back to school. Maybe you get married or have kids. Maybe you take a year off and backpack through Europe or Asia. You have a nice little windfall that puts you in a nice position to enjoy being young, so I would not lock it up into a 401k or other long term situation.",
"title": ""
},
{
"docid": "6236c533a709b202a826720071e1f5a7",
"text": "\"Although there is no single best answer to your situation, several other people have already suggest it in some form: always pay off your highest after-tax (!) interest loan first! That being said, you probably also have heard about the differentiation for good debt vs. bad debt. Good debt is considered a mortgage for buying your primary home or, as is the case here, debt for education. As far as I am concerned, those are pretty much the only two types of debt I'd ever tolerate. (There may be exceptions for health/medical reasons.) Everything else is consumer debt and my personal rule is, don't buy it if you don't have the money for it! Meaning, don't take on consumer debt. One other thing you may consider before accelerating paying off your student debt, the interest paid on it may be tax deductible. So you should look at what the true interest is on your student loan after taxes. If it is in the (very) low single digits, meaning between 1-3%, you may consider using the extra money towards an automatic investment plan into an ETF index fund. But that would be a question you should discuss with your tax accountant or financial adviser. It is also critical in that case that you don't view the money invested as \"\"found\"\" money later on, unless you have paid off all your debt. (This part is the most difficult for most people so be very cautious and conscious if you decide to go this route!) At any rate, congratulations on making so much progress paying off your debt! Keep it going.\"",
"title": ""
},
{
"docid": "7f4660e81b6cac0d44cedec2044272b9",
"text": "My recommendation would be to pay off your student loan debt as soon as possible. You mention that the difference between your student loan and the historical, long-term return on the stock market is one-half percent. The problem is, the 7% return that you are counting on from the stock market is not guaranteed. You might get 7% over the next few years, but you also might do much worse. The 6.4% interest that you will save by aggressively paying off your debt is guaranteed. You are concerned about the opportunity cost of paying your debt early. However, this cost is only temporary. By drawing out your debt payments, you have a long-term opportunity cost. By this, I mean that 4 years from now, you could still have 6 years of debt payments hanging over your head, or you could be debt free with all of your income available to save, spend, or invest as you see fit. In my opinion, prolonging debt just to try to come out 0.5% ahead is not worth the hassle or risk.",
"title": ""
},
{
"docid": "6dd9d2457e4a336bbf0ff70a00cdd6f6",
"text": "Should I use the profit to pay down student loans or just roll it into my next house in order to have a lower mortgage amount? Calculate the amount of interest in each scenario, where the two scenarios are: Use extra cash to pay down student loans, take out a full mortgage. Use extra cash to make a big down payment on the next house, keep paying down student loans at normal rate. In both scenarios the student loan rate will stay the same. However in the second scenario you may get a lower interest rate from making a larger down payment. So then calculate the total interest resulting from each scenario: student loan rateXremaining student loan balance=student loan interest new mortgage rateXnew mortgage balance=mortgage interest scenario 1 interest = student loan interest+mortgage interest student loan rateXstudent loan balance = student loan interest new mortgage rate with large down paymentXnew mortgage balance after large down payment = mortgage interest scenario 2 interest = student loan interest+mortgage interest Whichever scenario's interest is lower will save money.",
"title": ""
},
{
"docid": "9bda4d0109e8e1b2b372413376670038",
"text": "Try to cash flow as much as you can. You can work and go to school, if you replace playing beer pong with a job you'll be in a lot better off at graduation, grade wise and debt wise. Make a budget, for each month and for each semester, plan cut cost accordingly. Used books, sometimes even the next to recent version. Read this book for more info Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents",
"title": ""
}
] |
fiqa
|
1d57d3f2a2ec5b3345a8f9a25b29ee23
|
Is there a White-list of Trusted Online Vendors?
|
[
{
"docid": "8c45ec28837ec110e437b539ed937129",
"text": "\"I'm going to go with \"\"ridiculous notion.\"\" :) The vast majority of businesses are legitimate, run by honest people trying to earn a living for themselves and their employees. These days, almost all of them accept credit cards. Crooked businesses are a very small minority. When a bad business over charges you, you dispute the charge, and you get your money back. But that's not all that happens. The bad merchant pays penalties for this, and if it happens more than a couple of times, the merchant loses their merchant account with their bank, which means that they lose their ability to accept credit card payments anymore. A crooked business is not able to rob people via credit card for very long at all. A whitelist would certainly not be able to include every legitimate business. And a blacklist would never be able to be kept up-to-date, as bad businesses come and go continuously; as soon as a business was added to the blacklist, they would lose their merchant account and would no longer need to be on the list. What you are describing is very rare. My brother once had a bad experience with a tech support company where they were repeatedly charging him for a service they never performed. But a credit card chargeback took care of it. If that company made a habit of that, I'm sure that they got in trouble with their bank. Instead, the most common credit card fraud happens when crooks use your credit card at perfectly legitimate businesses. But your whitelist/blacklist wouldn't help you with that at all.\"",
"title": ""
}
] |
[
{
"docid": "d855a6639f5e5496aa280c5cbeca1f5a",
"text": "I don't understand why businesses that supposedly offer a legitimate product decide to host 3rd party code. Is their actual product so worthless that they need the extra few cents from ad revenue? And there are open source analytic packages that tell you how many times people click on things on your web page and how they were referred. I don't see the reason behind relying on other packages unless you really need to compare yourselves to the competition-- which probably doesn't come up in boardroom meetings every day.",
"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": "bdfc7642df93ade5220c28e1d09e3f68",
"text": "This kind of thing is right up my ally. I am based in Australia so suggestions will be Australian based. I was looking at starting up a private consultancy. Basically use neto as your ERM and online website. link in to xero for accounts. Netos predictive inventory module tells you when to restock on raw materials.",
"title": ""
},
{
"docid": "88de644e447bf7a91d1e7d0a69d2ff47",
"text": "Embrace the web. Let folks search for info while they're in your store. make the Salesmen do it. give your customer all the info they need to pull the trigger and buy the product. Just say we'll match Amazon or Newegg on this and the sale's a lock.",
"title": ""
},
{
"docid": "21fe332df485ef839ba1dfa57f47ed91",
"text": "Have you considered a service that allows you to generate credit card numbers on the fly? DoNotTrackMe allows you to generate a CC number on the fly, for a specific amount. If the vendor tries to charge more, it will fail. If it gets stolen, it's useless. I don't know the specific fees off hand, but they have an annual fee for the feature. Still, for the protection, doesn't seem like a bad way to go. Note: I have no affiliation with DNTM, I'm just a very happy user of their email protection products. The Masked Cards faq is here.",
"title": ""
},
{
"docid": "5ff0d2b58a0072ba0922d31010282b2d",
"text": "There are companies who sell data gleaned in aggregate from credit card providers to show how much of what category of product is sold online or offline, but that data is not cheap. 1010data is one such data aggregator we are talking to right now. Haven’t seen pricing yet but I expect 6 figures to access the data",
"title": ""
},
{
"docid": "3387cda63d8029bd1e06eacb936a17bf",
"text": "The are legit, I have been a member for more than 15 years. I have used there services many many many times. I have never sold any, I have only been a customer. The friend who sold me the service did very well for himself selling and recruiting.",
"title": ""
},
{
"docid": "69244fe41231d70ad9024bb0c7344d57",
"text": "It sounds like the items shipped directly from the vendor need to be recorded into your system when the order is confirmed, that way cost of goods sold and revenue don't get lost. You'll have a record of re-orders and cancels and other such things too.",
"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": "6b316b9df9a23a3168f27e058368574f",
"text": "Whether or not I trust them depends entirely on the personal finance application. In the cases of Mint and Quicken, I would trust both. Always make sure to do plenty of research before submitting any personal information to any source.",
"title": ""
},
{
"docid": "94676d16248b873816005083aa338782",
"text": "Are you looking for a company that can help you get more website visitors? If yes, then get in touch with White Digital (NE) Ltd! This company offers search engine optimisation services that can help business websites attract potential customers. Such services include keyword and competitor research, full website SEO health check, Google set-up and directory citations, and so much more! Visit White Digital (NE) Ltd’s website, https://white.digital, for more information on web design and development services.",
"title": ""
},
{
"docid": "356d0adb9f20c3d726d205d4fb67286f",
"text": "The closest thing to purchasing prospects we did was buy an email list that contained the names of several thousand people who fit our profile. Personally, I am not in favor of doing that. The companies you are buying from really don't understand what you want and you end up getting a hodge podge of information that never really gets you anywhere. Outside of that I am sure there are other services that provide prospecting, but the best lists are always developed internally. Good luck!",
"title": ""
},
{
"docid": "ee3f659b49268480e5c6e2a7b63b6b66",
"text": "Are you dropshipping (I'll have to tune my answer a bit if so)? Suggest you're probably looking for a supply chain consultant. As you've found, ecomm is a bit of a loaded term and will get you the wrong kinds of folks. Sounds like in your case, you're looking for more classical-style supply chain help and e-commerce just happens to be the vehicle with which the consumers place orders - though correct me if I'm off.",
"title": ""
},
{
"docid": "035e03018aa1d2da9746f0c75cd7ad7f",
"text": "Seems like it's more dependent on who you want to be your supplier. The times I've been involved in requesting this, each company had its own application form. They usually need proof of business activity, which gets back to SpecKK's answer.",
"title": ""
},
{
"docid": "c9ca73093da2b020403e5db113fab51c",
"text": "No. At least not in my case. Without divulging too much information. I don't tell any of my distributors how to sell my company's products our engage their customer base, but due to the nature of my business, I am frequently called on for product selection, marketing, quality, etc. Distributors often utilize their account reps and managers to help them push products on their customer base. The only way this could be seen as truthful, in my opion, is direct retail distribution. Because how are you going to track the product after it has been purchased by a consumer.",
"title": ""
}
] |
fiqa
|
099bbb9168822337df96ab7e2e9e24bc
|
Why doesn't change in accounts receivable on balance sheet match cash flow statement?
|
[
{
"docid": "1bb77fd32ae8e227ef16984ac4c5b8b9",
"text": "\"I'm not an expert, but here is my best hypothesis. On Microsoft's (and most other company's) cash flow statements, they use the so-called \"\"indirect method\"\" of accounting for cash flow from operations. How that works, is they start with net income at the top, and then adjust it with line items for the various non-cash activities that contributed to net income. The key phrase is that these are accounting for the non-cash activities that contribute to net income. If the accounts receivable amount changes from something other than operating activity (e.g., if they have to write off some receivables because they won't be paid), the change didn't contribute to net income in the first place, so doesn't need to be reconciled on the cash flow statement.\"",
"title": ""
},
{
"docid": "86855ce8af084a18f712895f3cfb987b",
"text": "\"Increase in A/R in balance sheet includes the A/R of acquired businesses. Change in A/R in cash flow statement might say \"\"excluding effects of business acquisitions\"\".\"",
"title": ""
},
{
"docid": "d1dbe7bda5a57a5d62c4680327a932c6",
"text": "It is difficult to reconcile historical balance sheets with historical cash flow statements because there are adjustments that are not always clearly disclosed. Practitioners consider activity on historical cash flow statements but generally don't invest time reconciling historical accounts, instead focusing on balancing projected balance sheets / cash flow statements. If you had non-public internal books, you could reconcile the figures (presuming they are accurate). In regards to Mike Haskel's comment, there's also a section pertaining to operating capital, not just effects on net income.",
"title": ""
},
{
"docid": "77d21de280c5002caced348149bc390e",
"text": "\"QUICK ANSWER What @Mike Haskel wrote is generally correct that the indirect method for cash flow statement reporting, which most US companies use, can sometimes produce different results that don't clearly reconcile with balance sheet shifts. With regards to accounts receivables, this is especially so when there is a major increase or decrease in the company's allowances for doubtful accounts. In this case, there is more to the company's balance sheet and cash flow statements differences per its accounts receivables than its allowances for doubtful accounts seems responsible for. As explained below, the difference, $1.25bn, is likely owing more to currency shifts and how they are accounted for than to other factors. = = = = = = = = = = DIRTY DETAILS Microsoft Corp. generally sells to high-quality / high-credit buyers; mostly PC, server and other devices manufacturers and licensees. It hence made doubtful accounts provisions of $16mn for its $86,833mn (0.018%) of 2014 sales and wrote off $51mn of its carrying balance during the year. Its accounting for \"\"Other comprehensive income\"\" captures the primary differences of many accounts; specifically in this case, the \"\"foreign currency translation\"\" figure that comprises many balance sheet accounts and net out against shareholders' equity (i.e. those assets and liabilities bypass the income statement). The footnotes include this explanation: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”) What all this means is that those two balance sheet figures are computed by translating all the accounts with foreign currency balances (in this case, accounts receivables) into the reporting currency, US dollars (USD), at the date of the balance sheets, June 30 of the years 2013 and 2014. The change in accounts receivables cash flow figure is computed by first determining the average exchange rates for all the currencies it uses to conduct business and applying them respectively to the changes in each non-USD accounts receivables during the periods. For this reason, almost all multinational companies that report using indirect cash flow statements will have discrepancies between the changes in their reported working capital changes during a period and the dates of their balance sheet and it's usually because of currency shifts during the period.\"",
"title": ""
}
] |
[
{
"docid": "8e67b6911d14a79d53b0b47b4fdd2ac1",
"text": "\"Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: On a balance sheet (a listing of accounts and their values at a given point in time), there is typically only one equity account, representing net worth, I don't know much about GNUCash, though. Income and expenses accounts do not go on the balance sheet, but to find out more, either someone else or the GNUCash manual will have to describe how they work in detail. Equity is more similar to a liability than to assets. The equation Assets = Equity + Liabilities should always hold; you can think of assets as being \"\"what my stuff is worth\"\" and equity and liabilities together as being \"\"who owns it.\"\" The part other people own is liability, and the part you own is equity. See balance sheet, accounting equation, and double-entry bookkeeping for more information. (A corporate balance sheet might actually have more than one equity entry. The purpose of the breakdown is to show how much of their net worth came from investors and how much was earned. That's only relevant if you're trying to assess how a company has performed to date; it's not important for a family's finances.)\"",
"title": ""
},
{
"docid": "aacdae478cdb8a98b2b69eed4440805e",
"text": "In general you need to ask yourself how serious you are about tracking your finances. If your GNUCash 'cleared' balance doesn't match your statement, it represents an error on either your part or much less likely the banks part. Tracking down this error might be a real pain, but you will also likely learn from it. So to answer your question - find the entry or entries that don't match and fix them. That said, sometimes indeed this can be very tedious, time consuming and frustrating, especially if it is for a relatively small dollar amount. Time too is money, so in these cases, the 'Expense:Adjustment' might be a reasonable approach.",
"title": ""
},
{
"docid": "28e5a864f6bc6bba8050209a3d569d11",
"text": "\"1. That's a really complicated answer. In short, I think we need to make accounting rules much simpler (I say this as an accountant) in combination with financial education in K-12 school. Most adults in this country can't tell you which is a better investment: something that returns 5% monthly or something that returns 10% annually. They don't know that accounting income and cash flow are different things and what they mean. Accounting rules are sometimes ridiculous. Look at the balance sheet of even a moderate size company. What's in \"\"Other Comprehensive Income\"\" and why is that different than net income? Why is it that American Airlines, one of the largest airlines in the world doesn't have a single airplane on their balance sheet? 2. That might be a step in the right direction, but I'm just not sure how effective something like that would be. More comprehensive might be better, but then there's going to be less people that want to take the time.\"",
"title": ""
},
{
"docid": "6da3ec1ab9296aa05074dbbc608a1c5c",
"text": "\"Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for \"\"stock on hand\"\". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or \"\"equity\"\"), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset \"\"Stock on hand\"\" by $500. Debit (increase) Asset \"\"Accounts receivable\"\" by $700. Credit (increase) Income \"\"Sales\"\" by $700. Debit (increase) Expense \"\"Cost of goods sold\"\" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset \"\"checking account\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. If he paid with a credit card: Credit (increase) Liability \"\"credit card\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. When he pays off the credit card: Debit (decrease) Liability \"\"credit card\"\" by $1000. Credit (decrease) Asset \"\"cash\"\" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset \"\"cash\"\". Credit (decrease) Capital \"\"shareholder equity\"\". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it \"\"capital\"\", others call it \"\"equity\"\"): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big \"\"one thing\"\". 2: Every transaction must update two or more accounts. Each update is either a \"\"debit\"\" or a \"\"credit\"\". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there.\"",
"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": "4c3533a0299064bf878acac048095187",
"text": "The primary drivers of cash flow in a software firm is the productivity and skill of your employees. How is that reflected in a balance sheet? Well, take a company like Adobe or Salesforce, or even Microsoft. What would you be able to tell about each from their balance sheets? You can look at their cash level, and what else would matter?",
"title": ""
},
{
"docid": "05f2384f318fceeaea2560c1da8ccd3d",
"text": "\"If the answer were \"\"no,\"\" you still found the 'black swan' type exception that proves the answer to be \"\"yes,\"\" right? My experience is this - again just my experience, my bank - When by balance goes below $10, I have the account trigger an email. I wrote a check I forgot to register and subtract, so the email was sent and the account balance in fact showed negative. I transferred to cover the check and the next day, there was a history that didn't go negative, the evening deposit was credited prior to check clearing. I set up my bills on line. I set a transfer in advance for the same dollar amount as a bill that was due, e.g. $1000 transfer for a $1000 bill. I woke up to an email, and the account showed the bill was paid prior to the transfer. So one line showed going -$900, and the next line +$100 after transfer. Even though it's the same online process. Again, the next day the history re-ordered to look like I was never negative. But even on a day I know I'm having payments issued, I can never just ignore that email. The first time this happened, I asked the bank, and they said if the negative went until the next day, I'd get an overdraft/short balance notice. This is a situation to ask your bank how they handle this.\"",
"title": ""
},
{
"docid": "35124c3aee792df13fe3a69a181155f4",
"text": "\"Here is where I am confused. On the income statement I am looking at it has a line item in cogs that is \"\"change in jobs in progress\"\". Change in JIP = (Starting raw materials, wip, and finished goods) - (Ending raw materials, wip, and finished goods) for the accounting period. From what I researched cost of goods manufactured is added to cogs: \"\"The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory. A manufacturer's cost of goods sold is computed by adding the finished goods inventory at the beginning of the period to the cost of goods manufactured and then subtracting the finished goods inventory at the end of the period.\"\" So it isnt wip that is in the income statement it is change in inventory. Why do they include the \"\"change of inventory\"\" in cogs? Wont this just be material and labor that should be in for the next accounting period cog calculation?\"",
"title": ""
},
{
"docid": "53dd714fdcde93886c79bef5635ec6a9",
"text": "\"First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under \"\"property, plant, & equipment\"\". Generally, it is a \"\"capital expenditure\"\" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made.\"",
"title": ""
},
{
"docid": "9fb5f84f227bcf9ce8d5c1fe5e39467d",
"text": "\"I added \"\"Shared money in account\"\" (SMIA) as sub-account of my bank checking (CA) account and moved current difference to that account so total of CA was not changed but now private and shared money is separated. My cases would be handled the following The only downside I see is that now my balance in CA transaction log do not match exactly with bank so reconciliation will be slightly harder.\"",
"title": ""
},
{
"docid": "df9b83154409d75086d28fcae731b329",
"text": "\"Ugh... yes, you have to tell us what information you have available. It would be a completely different answer if, for example, you had a balance sheet for a prior period and an income statement for the current period and had to estimate the working capital accounts. If you can't be bothered to \"\"want to give the problem\"\" nobody is going to be bothered to help you with it. Inventory days = days of COGS in inventory. (15 / 360 times cogs). AR is 35 days of sales in AR. 35/360* sales. Vendor credit is accounts payable -- 40 /360 * COGS. If your sales and COGs are given by operating cycle rather than annually, use 50 instead of 360. (for whatever reason, convention says use 360 instead of 365).\"",
"title": ""
},
{
"docid": "00d92ce163cbaa2219366d5a87720ef9",
"text": "You increase the capital account by the additional contributions and retained earnings and decrease the capital account by the distributions of return of capital and/or losses. Distributing gains doesn't change the capital account. So in your case it would be: 1st year we lost money Assuming you lost 20K, and the interests are even, it will look like this: 1st year we break even Nothing changes - you break even, means the balance sheet doesn't change (in this example). 1st year we made money Assume you gained 20K and kept it: If you didn't retain the earnings, it would look the same as case 2 - no change. Note that this is only the financial accounting, tax accounting might look differently. For example, in the US Partnerships (or LLCs taxed as) are pass-through entities, on in case 3 while you retained the earnings, the partners will still be taxed. I'm of course neither CPA nor a licensed tax adviser. I suggest you get a consultation with one. Only a CPA can provide a reliable accounting advice or sign official financial statements, reviews and audits. Only a EA, CPA or an Attorney specializing in tax law can provide a tax advice.",
"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": "6ac32be0cbf98c69d5b81fc6ed9aab89",
"text": "Any accounting software should be able to handle this. When you invoice them, set the invoice date to the date of the event. Then receive a partial payment against that invoice. This will cause your accounting software to display the service income in the correct period as well. So if you sent them invoice for August 7, 2014 event on May 5th, 2014 and they gave you $500 due, you would see this Income in August ($500 on Cash basis, $1000 on Accrual basis. When you received the other $500 in August, you would see $1000 for both methods). You would not see any income in May, when you created the invoice. This is better for revenue matching with the correct period. When you send them same invoice (say 30 days before the event), Set the software to show payments already received (it seems that most online accounting software will do this by default). Here is an example in Freshbooks. Here is an example in Xero: Seems they both display information on when you can expect payment on the their respective dashboards. In the Desktop version of Quickbooks (which I use a lot), it will not show the balance of the customer by default on an invoice. You will have to modify the invoice template. There are more details on that here. In Desktop version of Quickbooks, you can look at Cash Flow Forecast report to see the expected amount coming in. I hope that helps and good luck.",
"title": ""
},
{
"docid": "5ea816f8a5cdceb7b98027f7392c287e",
"text": "They changed the way trailing interest is calculated back in 2008 if I recall correctly. The idea at the time was that the interest charges to the customer were somewhat less, but it made trying to get a payoff quote a PITA. They used to take payments for more than the current balance due at that time, however. I can't provide any insight as to why they won't now, though.",
"title": ""
}
] |
fiqa
|
61e8fdd57f4ed17904cc8107b645d947
|
When does Ontario's HST come into effect?
|
[
{
"docid": "7d3077586f1ca10a37851e7b9c4f23a8",
"text": "\"It looks like the HST will be in effect in Ontario on July 1st, 2010. As to whether it will replace GST with HST for all services, it looks like some sectors may get special treatment: Ontario may exempt mutual funds from HST (National Post). But it doesn't look final yet. However, I would suggest that most service-based businesses in Ontario need to prepare to start charging 13% HST instead of 5% GST. It will be the law. On the \"\"goods\"\" side of the new harmonized tax, it looks like certain goods will still be exempt from the provincial portion. Here's a quote from the Ontario Budget 2009 News Release: \"\"Books, diapers, children's clothing and footwear, children's car seats and car booster seats, and feminine hygiene products would be exempt from the provincial portion of the single sales tax.\"\" Here's some additional information on the introduction of the HST, from the province: General Transitional Rules for Ontario HST. And finally, another interesting article from the Ottawa Business Journal: Preparing For Ontario Sales Tax Harmonization – It's Not Too Early UPDATE: I just received an insert from Canada Revenue Agency included with my quarterly GST statement. Titled \"\"Harmonization of the Sales Tax in Ontario and British Columbia\"\", it contains a section titled \"\"What this means for you\"\" (as in, you the business owner). Here's an excerpt: [...] All Ontario and B.C. registrants would need to update their accounting and point-of-sale systems to accomodate the change in rate and new point-of-sale rebates for the implementation date of July 1, 2010. The harmonization of the sales tax in Ontario and B.C. may affect the filing requirements of registrants outside of these two provinces. Registrants will report their HST according to their current GST filing frequency. As a result of the harmonization, there will be changes to the rebates for housing and public service bodies. More information will be released as it becomes available. Visit the CRA web site often, at www.cra.gc.ca/harmonization, for the most up-to-date information on the harmonization of the sales tax and how it may affect you. [...] Last, I found some very detailed information on the HST here: NOTICE247 - Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services. Chances are anything you want to know is in there.\"",
"title": ""
},
{
"docid": "e58a8128222084751b0288d74167d85e",
"text": "In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References:",
"title": ""
},
{
"docid": "a7ebe417a11689afa1585e43c14ceded",
"text": "(community wiki) Ontario special HST sales tax transition rebate cheques: When and how much? What will happen to quarterly GST cheques when HST starts in Ontario? Ontario HST rebate: When would I qualify? Ontario gas prices & HST: What will happen to prices at the pump on July 1, 2010? How will Ontario’s HST apply to books / textbooks, which were PST exempt before? How can I minimize the impact of the HST? How does the HST affect a condominium purchase? Will I need to pay HST on condo maintenance fees? My Ontario small business collects only PST (beneath GST threshold). How will HST affect me?",
"title": ""
}
] |
[
{
"docid": "ce25b1830452e713b8ff2b84a9d71f11",
"text": "\"Mutual funds generally make distributions once a year in December with the exact date (and the estimated amount) usually being made public in late October or November. Generally, the estimated amounts can get updated as time goes on, but the date does not change. Some funds (money market, bond funds, GNMA funds etc) distribute dividends on the last business day of each month, and the amounts are rarely made available beforehand. Capital gains are usually distributed once a year as per the general statement above. Some funds (e.g. S&P 500 index funds) distribute dividends towards the end of each quarter or on the last business day of the quarter, and capital gains once a year as per the general statement above. Some funds make semi-annual distributions but not necessarily at six-month intervals. Vanguard's Health Care Fund has distributed dividends and capital gains in March and December for as long as I have held it. VDIGX claims to make semi-annual distributions but made distributions three times in 2014 (March, June, December) and has made/will make two distributions this year already (March is done, June is pending -- the fund has gone ex-dividend with re-investment today and payment on 22nd). You can, as Chris Rea suggests, call the fund company directly, but in my experience, they are reluctant to divulge the date of the distribution (\"\"The fund manager has not made the date public as yet\"\") let alone an estimated amount. Even getting a \"\"Yes, the fund intends to make a distribution later this month\"\" was difficult to get from my \"\"Personal Representative\"\" in early March, and he had to put me on hold to talk to someone at the fund before he was willing to say so.\"",
"title": ""
},
{
"docid": "8d031287980a46fd870886fd6610e129",
"text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.",
"title": ""
},
{
"docid": "c2c9a9969e6b2773320f3dfe7362f70a",
"text": "You actually don't need an accountant. They'll be expensive and at this early a stage unnecessary - what you need is a good bookkeeper who can keep track of what comes in and what goes out. You'll need that to know if you're making money or not and to show the government at the end of the year. Get a copy of QuickBooks and pick up Bookkeeping for Dummies to at least get a sense for what's going on. Have you registered as a sole proprietorship? Make sure you have a vendor's permit so you can legally sell your services in Ontario. You may need to collect HST, in which case you'll need to register for an HST # and submit it on a quarterly basis. Whatever you do, don't fuck with the government - they can freeze your bank accounts to get money they're owed. You need to keep money on hand to pay for any taxes you might owe on the business, ESPECIALLY if it's a sole proprietorship where you'll be tempted to treat profit as income. You don't want to end up with nothing in the bank at the end of the year and $40k owing to the CRA. Get a separate bank account - don't mix personal and business, it's messy. Expense everything you reasonably can.",
"title": ""
},
{
"docid": "ad766ebd8bb78cde5a30f7e50124700c",
"text": "I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/talkbusiness] [Starting a restaurant in Toronto (Canada)](https://np.reddit.com/r/talkbusiness/comments/789f5l/starting_a_restaurant_in_toronto_canada/) [](#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": ""
},
{
"docid": "f1be9d7231a61302958e09ca27c1c4fe",
"text": "The Canada Revenue Agency describes in detail here what information businesses must generally include on their invoices so that GST/HST registrants can claim Input Tax Credits (ITCs) for the expenses. Quote: Sales invoices for GST/HST registrants You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you provide taxable goods and services. This information lets them support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. [...] The page quoted continues with a table describing what, specifically, needs to be on a sales invoice based on the total amount of the invoice; the requirements differ for: total sale under $30, total sale between $30 to $149.99, and total sale $150 or more. For the total sale under $30 category, the only things a sales invoice must contain to support an ITC claim are (1) the provider's business name, (2) the invoice date, and (3) the total amount paid/payable. i.e. When the total sale is under $30, there is no requirement for any GST/HST amount to be indicated separately, nor for a business number to be present on the invoice. Hence, IMHO (and I am neither an accountant nor a lawyer), if your Uber rides are for $30 or less, then you shouldn't expect a GST/HST number anyway, and a simple invoice as described should be enough for you to claim your ITCs. Whether or not the provider is registered in fact for GST/HST is beside the point. For amounts over $30, you need a bit more. While the page above specifies that the provider's business number should be included beginning with the next level of total sales, there are exceptions to those rules described at another page mentioned, Exceptions to invoice requirements, that specifically apply to the taxi/limousine case. Quote: Exceptions to invoice requirements GST/HST registrants are required to keep the necessary documentation to support their claim for ITCs and rebates. In certain circumstances the documentation requirements have been reduced. [...] For taxi or limousine fares your books and records must show: So at a minimum, for fare in excess of $30 total, you should ask the driver to note either (a) the amount of GST/HST charged, or (b) a statement that the fare includes GST/HST. The driver's business number need not be specified. Consequently, if your receipt for a ride in excess of $30 does not contain any such additional information with respect to GST/HST, then I would expect the receipt does not satisfy the CRA's requirements for supporting your ITC claim. i.e. Keep your individual rides under $30 each, or else get a better receipt from the driver when it is above that amount. p.s. It should go without saying, but your rides, of course, must be considered reasonable business expenses in order to qualify for GST/HST ITCs for your business. Receipts for rides of a personal nature are not eligible, so be sure to maintain proper records as to the business purpose and destination for each ride receipt so claimed.",
"title": ""
},
{
"docid": "481b8423ba7e31615b1775bafe7d3029",
"text": "I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!",
"title": ""
},
{
"docid": "de65a195799a90cbf017660532c71024",
"text": "Multistate Impact of the American Taxpayer Relief Act of 2012 In general, states with rolling conformity will follow this change. States with specific date conformity will continue to follow the date of conformity currently in effect and will not follow the change. A few states may have their own QSBS rules and will not conform to or be impacted by this provision of the Act. The chart that follows summarizes these principles as applied to the enumerated states: STATE: QSBS Exclusion Conformity: California statutes refer to the IRC QSBS provisions but modify and limit their applicability, and would not be impacted by this provision of the Act. However, California’s provisions were ruled unconstitutional in recent litigation and the California Franchise Tax Board has recently taken the position that gain exclusions and deferrals will be denied for all open tax years. Florida Florida does not impose an income tax on individuals and therefore this provision of the Act is inapplicable and will have no impact. Illinois Due to its rolling conformity, Illinois follows this provision of the Act. Because New York effectively provides for rolling conformity to the IRC, through reference to federal adjusted gross income as the state starting point, New York effectively follows this provision of the Act. Texas does not impose an income tax on individuals",
"title": ""
},
{
"docid": "7e4e81a9dd457ff0c047054f2d09ff6a",
"text": "\"FWIW, I've got a printed Amazon.ca invoice that was included in a shipment of books that I received in July, 2013. In the right-side side panel, at the bottom and in fine print, it reads: Amazon.com.ca, Inc. 410 Terry Avenue North Seattle, WA 98109-5210 GST Registration Number/No enregistrement TPS 85730 5932 RT0001 [etc.] If I view the same order online at Amazon.ca, the on-screen version does not have that detail. Interestingly, at the bottom of the online invoice page it says: \"\"Please note: This is not a VAT invoice.\"\" That probably should've said \"\"GST/HST\"\", for Canada, and not \"\"VAT\"\", which is presumably for the United Kingdom. So, it would appear that Amazon may only print their GST/HST details on the shipped invoice printout. Which made me wonder: Did you purchase something that was fulfilled electronically, i.e. no physical shipment to you? e.g. a Kindle book, an app, or a service like Cloud Drive? If no physical invoice shipped means one doesn't get the required GST details, then there's still a Canadian tax requirement Amazon isn't fulfilling on such invoices, though not as broad an issue as you suspected. On the other hand, if you did get a physical invoice [and your comment confirmed you did], then what you were seeking was most likely printed on that version, just as mine was. At the moment, I'm not sure why Amazon wouldn't also include the GST number on electronic versions of invoices (whether received by email, or viewed on the web site) but if I find out more, I'll update my answer later.\"",
"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": "caff17a8e58f867e2b8edd998ab5b806",
"text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-10-25/with-economy-almost-home-poloz-treads-carefully-on-rate-path) reduced by 88%. (I'm a bot) ***** > The Canadian economy is almost home, according to the nation's central bank, but Stephen Poloz is trying to make sure the roof doesn't cave in. > The economy is in a "Sweet spot" where it "Could be capable of generating more non-inflationary growth than we are assuming," Poloz said in a press conference following the rate decision. > Excess capacity in the labor market suggests little risk of inflation overheating in the near term, said Poloz, who highlighted involuntary part-time workers, subdued work force participation among youths, lower than expected hours worked and softness in wage growth as signs the economy has further room for improvement. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/78t6fn/with_economy_almost_home_poloz_is_treading/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~235204 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*: **growth**^#1 **bank**^#2 **rate**^#3 **economy**^#4 **expects**^#5\"",
"title": ""
},
{
"docid": "f494c007a256f5583640314dcdc4ac32",
"text": "It has basically been kicked out of every Canadian city for being illegal while the cities make new regulations for them. Now they have the new regulations and it's pretty decent. They were definitely illegal though (injunctions issued and everything), but now operate within the laws.",
"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": "7ffef3f15795d301785bb58e85f6fa15",
"text": "I suspect that the payments were originally due near the end of each quarter (March 15, June 15, September 15, and December 15) but then the December payment was extended to January 15 to allow for end-of-year totals to be calculated, and then the March payment was extended to April 15 to coincide with Income Tax Return filing.",
"title": ""
},
{
"docid": "1a2d6f5e9aee81d3da4405f9e2b98a3e",
"text": "\"Amazon has some major issues with growing out in Seattle, primarily infrastructure and geography. Seattle's infrastructure is stretched, leading to some hilarious activity - \"\"http://kuow.org/post/seattle-traffic-got-so-bad-guy-started-flying-work\"\". Also, Seattle is locked between the sea and the mountains, and with a limited supply of land, there isn't anywhere to build economically. NO ROOM TO GROW. Ontario has a few good things going for it: Healthcare, Immigration, Low corporate taxes, Education... But there are also some elephants. Ontario has some of the highest land costs in the world, longest commute times on the planet, and a government which will inevitably need to raise taxes. If I had to bet, we'll probably see Amazon set up shop in a City with low land costs, ring roads, and a low debt government. A place with room to grow. Raleigh/Durham Dallas-Fort Worth Denver Minneapolis Salt Lake City Cincinnati\"",
"title": ""
},
{
"docid": "14a9111f0d41690460427ab8a1cace5d",
"text": "In a word, yes. You can buy very low cost index ETFs, like VTI, VEA, BND, FBND and rebalance in proportion to your age and risk tolerance. Minimal management and low cost.",
"title": ""
}
] |
fiqa
|
4ce69cfa0d808bf14db974ccee059016
|
How to explain an income discrepancy to the IRS?
|
[
{
"docid": "881acfadb43654b366bba3cfe8ab2237",
"text": "\"The IRS doesn't tax \"\"increased wealth\"\" They tax Revenue -- income. If this money or property came to you as a gift, you would owe no tax on it but the giver probably would owe gift tax. If it came to you as a loan, you would owe no tax on it but the lender would owe tax on any interest you pay (and must charge at least minimal interest, though they could give that to you as a gift and possibly not have it be taxable). But if came as payment for goods or services or investment or anything of that sort, and you aren't demonstrably tax-exempt, it is income and you are responsible for declaring it as such and paying tax on it.\"",
"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": "ce4551055eb15b258cc98bf205b9691d",
"text": "\"Every year, you save your receipts, track your expenses and - when April comes around - pay your taxes. But what if you know of someone who isn't as honest as you are? Someone who skims on their income or misreports information in order to be placed in a lower bracket. The Internal Revenue Service (IRS) estimates that Americans underpay their [taxes](http://www.investopedia.com/articles/taxes/09/reporting-tax-cheats.asp) by about $345 billion every year, according to Barron's, the popular financial news website and magazine. In fiscal 2009, the IRS collected $48.9 billion in enforcement revenue. This process required the employment of thousands of revenue officers, agents and special agents. Unfortunately, this type of enforcement happens every year and often spans to multiple previous years. In the end, there is still a large amount of tax money that goes unpaid. There's definitely a gap between the tax evader and the IRS. Evaders are usually exposed due to a slip-up on their part or a tip from a bystander. If you'd like to help close that gap, you can. But why should you, and how is it done? **Why Help the IRS?** Nobody likes paying more than their fair share of taxes in order to compensate for others who intentionally evade theirs. Why shouldn't tax evaders give up a portion of their incomes to provide things that benefit the general good, like roads and sewers, when you do? Reporting a tax cheat is like reporting a shoplifter - you're just asking them to pay for something they're trying to unfairly get for free. **Gather the Evidence** The IRS is not likely to pursue someone without good reason. If the time and resources are going to be spent, the odds need to be good that the efforts will result in a payoff. Besides determining who, what, where, when and why the person evaded his or her taxes, the IRS will need specific information (type of violation, availability of books or records). Having a hunch without supporting details just isn't good enough. Also ensure that the evasion is financially significant enough. For example, stating that your neighbor failed to report a $50 babysitting earning is not going to interest the IRS. On the other hand, if you work for a large business that you suspect is underreporting its income, the IRS will likely be very interested. **Blowing the Whistle on a Tax Cheat** The IRS may pay awards in exchange for valuable information that leads to the collection of \"\"taxes, penalties, interest or other amounts from the noncompliant taxpayer,\"\" according to the agency's website. There are various types of awards granted, depending on the evader's income level and classification (business or individual). The IRS likely chooses to focus its efforts on these larger cases because they have a higher payoff. It has also been suggested that higher income individuals have been found to cheat more frequently and for higher sums of money, mostly because they tend to earn more self-reported income. **Cover Your Assets** Fabricating a complaint in order to spite an undesirable neighbor who does, in fact, pay taxes is not a good way to get revenge. When you sign off on the IRS form providing your report, you are stating, \"\"I declare under penalty of perjury that I have examined this application, my accompanying statement and supporting documentation, and aver that such application is true, correct, and complete to the best of my knowledge.\"\" You don't want to be found guilty of perjury. **Keep It Legal** Breaking into the CFO's office at work to get evidence to support your claim is not a good idea. The IRS doesn't want you to break the law to help find a tax cheat. However, if you are the bookkeeper for a company that is cheating on its taxes and part of your job involves working with documents that prove the company is cheating, that paperwork would be acceptable to submit to the IRS. While the IRS wants to maintain your privacy, if the case against the person you report ends up going to trial, you could be asked to be a witness. If you're comfortable with that possibility, go ahead and put your name on the report. **Reasons Not to Report a Cheat** If your \"\"information\"\" is really just speculation, it's probably best to keep it to yourself. As explained earlier in this article, the IRS does not have the resources to pursue your hunch. If you, yourself, are a tax cheat, it might be best to stay in the clear. There's nothing that says that people who submit claims of cheating by others will have their own tax returns examined more carefully. Still, it stands to reason that you wouldn't want to do anything to call IRS attention to yourself if you're not in compliance with its rules. If you helped plan or initiate the cheating of the person you are reporting, it might be smart to think twice. If you decide to report a crime in which you took part, be prepared for the consequences, and definitely don't expect to receive a reward. As with many government processes, there's a lot of red tape to cut through. Therefore, if you're looking for fast cash, you might want to look elsewhere. It can take several years to complete an investigation of tax evasion – and if there is no conviction, there is no award. Not only does the IRS have to determine guilt, it has to actually collect the amount owed before paying you. What's more, if the IRS determines that your tip did not \"\"substantially contributed to the Service's detection and recovery of tax,\"\" you will not receive an award. It's also important to note that, under some circumstances, like attorney-client confidentiality, you may not be able to report tax cheating. **Other Considerations** If you earn a whistle blower award, it will need to be reported when you file your taxes. If you're blowing the whistle on your employer and you're not planning to change jobs, an IRS audit could make your work situation extremely unpleasant. This isn't to say that you shouldn't report someone who is cheating, but it is something to consider. **What's Next** If you decide to report the person or business you suspect of cheating, use IRS form3949-A. This form asks for basic information on the tax evader you are reporting, the types of violations you believe to be committed, the details of the violation and how you learned about it. If you do not want to fill out this form, you can also simply write the IRS a letter. If you are providing your name and want the possibility of receiving an award, also submit IRS Form 211 which is an application for the award. **The Bottom Line** Underpayment of federal income taxes (and, subsequently, state income taxes) is a serious problem. The IRS encourages people to submit tips by allowing anonymous submissions and offering generous rewards for informants who are willing to identify themselves. If you can substantiate your claims and are willing to accept the potential consequences of squealing, reporting a tax cheat can be lucrative not only for the government, but also for you. **Take Control of Your Money** Whether you’re buying a home, consolidating debt or Planning a Yearly Budget, Investopedia has the guide to overhauling your personal spending, saving and investing. [Click here](http://www.investopedia.com/accounts/signupnewsletter/?list=pf) to start managing your money like the pros.\"",
"title": ""
},
{
"docid": "e83feba157f0c90f26f199964255ef39",
"text": "\"That $200 extra that your employer withheld may already have been sent on to the IRS. Depending on the size of the employer, withholdings from payroll taxes (plus employer's share of Social Security and Medicare taxes) might be deposited in the US Treasury within days of being withheld. So, asking the employer to reimburse you, \"\"out of petty cash\"\" so to speak, might not work at all. As JoeTaxpayer says, you could ask that $200 less be withheld as income tax from your pay for the next pay period (is your Federal income tax withholding at least $200 per pay period?), and one way of \"\"forcing\"\" the employer to withhold less is to file a new W-4 form with Human Resources/Payroll, increasing the number of exemptions to more than you are entitled to, and then filing a new W-4 changing your exemptions back to what they are right now once when you have had $200 less withheld. But be careful. Claims for more exemptions than you are entitled to can be problematic, and the IRS might come looking if you suddenly \"\"discover\"\" several extra children for whom you are entitled to claim exemptions.\"",
"title": ""
},
{
"docid": "cc19c3b889381641da182664b604fcf3",
"text": "This is a lie. He owed back taxes and his lawyers filed a petition to postpone the due date on the back taxes saying he was not liquid, was coming up on a large liquidity event, and the taxes would be paid immoderately after. So I doubt the IRS is just waiting around so he can look super rich.",
"title": ""
},
{
"docid": "3d7833f48df0b9d829546e90aeb990ef",
"text": "\"I have a related issue, since I have some income which is large enough to matter and hard to predict. Start with a best guess. Check what tax bracket you were in last year and withhold that percentage of the expected non-withheld income. Adjust upward a bit, if desired, to reflect the fact that you're getting paid more at the new job. Adjust again, either up or down, to reflect whether you were over-withheld or under-withheld last year (whether the IRS owed you a refund or you had to send a check with your return). Repeat that process next year after next tax season, when you see how well your guess worked out. (You could try pre-calculating the entire tax return based on your expected income and then divide any underpayment into per-paycheck additional withholding... but I don't think it's worth the effort.) I don't worry about trying to get this exactly correct. I don't stress about lost interest if I've over-withheld a bit, and as long as your withholding was reasonably close and you have the cash float available to send them a check for the rest when it comes due, the IRS generally doesn't grumble if your withholding was a bit low. (It would be really nice if the IRS paid us interest on over-withholding, to mirror the fact that they charge us interest if we're late in returning our forms. Oh well.) Despite all the stories, the IRS really is fairly reasonable; if you aren't deliberately trying to get away with something, the process is annoying but shouldn't be scary. The one time they mail-audited me, it was several thousand dollars in my favor; I'd forgotten to claim some investment losses, and their computers noticed the error. Though I still say the motto of the next revolution will be \"\"No taxation without proper instructions!\"\"\"",
"title": ""
},
{
"docid": "740b46fcfa2d48a21f2b88ec87547131",
"text": "The best thing you can do here is work with the IRS to the best of your ability. You can attempt to call them, attempt to go to one of their local branches in your area, or just hire an accountant to solve the problem. Just be mentally prepared to write a check. You could attempt to figure this all our yourself, but then a lot of tax law is open to interpretation. This is why I would recommend seeking the IRS's help if you DIY. Once you have addressed the issue to the satisfaction of the IRS agent, this will no longer be a problem. Provided you have a good attitude (which you express in your question) and are honest, I have found them very easy to work with. You will be a refreshing change of pace to the actual tax cheats. While I understand that you are not seeking advice on what got you your situation, I would like to offer some encouragement. Good for you for learning from, and addressing your mistakes. Doing this will serve you well in the future.",
"title": ""
},
{
"docid": "3a1b087d8f4cd8b95e057b73b76b3d8f",
"text": "I have a very hard time believing you pay 60% of gross. Otherwise, I believe you're right in the way this works: Suppose you make $100k and pay 25% of that in taxes. 100,000 * .25 = 25,000 But if you spend $1,000 pretax, then it's as if you were paid $99,000 99,000 * .25 = $24,750 So the difference is $250. Which is the same as that $1,000 * .25.",
"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": "7d94ca59c18ce40480d5dafc986e824b",
"text": "I am not an expert in mattes of amending returns, but from what I heard you are allowed to go back four or five years and amend your returns (we are talking the American IRS here, right?). If they realized all this after that much time, it seems strange. I am wondering if something was left out of the story...",
"title": ""
},
{
"docid": "b28cb9a3b4e58993ea23f5b610229cd3",
"text": "You're asking three different questions... Q1: What's to stop people not reporting income earned in this manner? A: Nothing. Absolutely nothing. The IRS doesn't have the means to keep track of your cash flow and your reported taxes on the fly. Q2: How could the IRS possibly keep track of that? A: When you get audited. If it ever did come up that things didn't balance you would end up owing back taxes, with interest and possibly fines. Q3: Moral obligations aside... why report? A: Since you've dismissed 'doing your duty as a citizen' as a moral obligation, the only other real one is that it's a pain in the butt to get audited and it is expensive if you lie and get caught.",
"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": "b9dca32b8177f2bddd8208506c0d1b84",
"text": "You proceed with a proper legal advice. You should not ignore IRS letters. You should have taken your chances in trying to reach a compromise with them, but that ship has likely sailed already. You might want to consider bankruptcy. Ask your parents for a couple of hundreds of dollars to pay for a legal consultation with a lawyer and a CPA and proceed from there.",
"title": ""
},
{
"docid": "e7e811dc686db34ea83ccc6787d733ca",
"text": "\"The short answer is that the IRS knows this is an issue, so they are prepared to deal with the \"\"discrepancies.\"\" The filer does not need to something special to call it to their attention. Keep good records and consistently report according to your accounting processes. Exactly how the IRS resolves / flags this, I don't know. Maybe someone else can answer, but you can imagine that if they track you for multiple years they should have some idea of how many dollars are rolling over and whether you might have \"\"forgotten\"\" to report something from a few years ago that happened at a year-end break.\"",
"title": ""
},
{
"docid": "b7a8e8f10967a66de5c695b9dd44f91c",
"text": "You should probably talk to a professional tax adviser. This doesn't seem to be a common situation. From the top of my head, without being a lawyer or a tax professional, I think of it like this: The income is for year 200..., and should have been taxed then. You constructively received it then, and not claimed it. You probably had withholding from this salary that should have been reported to you then on W2 (you can get a copy from the IRS). I'd say you're to amend the return for year 200... with the new income, if it wasn't reported then. Although if more than 3 years passed (6, if its 25% or more of your gross income for that year), its beyond statute. However, as I said, I'm not a lawyer and not a professional tax adviser, so you cannot in any way rely on my opinion for anything that would result in not paying any taxes or penalties you should have. You should talk to a licensed tax professional (EA/CPA/Lawyer licensed in your State).",
"title": ""
},
{
"docid": "7af6de2300ef6bb4adbd025f53c0dfad",
"text": "\"Do you have other income that you are not considering? Interest and dividends would be an example, but there are all sorts of options. Also with your witholding is it set up such that your employers have any idea of your tax bracket ultimately based on your combined incomes? Usually what they do is take out money assuming you will be in the tax bracket of any given paycheck spread out over the course of a year. For example, for federal I had an option to select (in an online form that fills out my W4 for me) \"\"married: withold at higher single rate\"\" and did to try and cover this fact. Eventually I may end up having to calculate my own witholding to fix a too-low problem like yours.\"",
"title": ""
}
] |
fiqa
|
3ecdfec97c35849808799aaacd27556b
|
How do I look for private limited partnership investment opportunities? (Or should I?)
|
[
{
"docid": "45f75f318140ab32ba09e27eb9b885aa",
"text": "\"Investing in an existing company is almost like buying a house, or even becoming an \"\"Angel investor\"\" in a start-up. Before you start the process, decide how much you want to be involved in the day-to-day and which industries you would feel most comfortable in. The latter is an important consideration since you would have to know sufficient about the industry in order to evaluate the quality of your prospective investment. Searching for a suitable business is a time-consuming process: The guidance for evaluating any company has been answered in another question, so I'll simply link. Most business owners are looking to their businesses to provide them a pension, so they often look to sell around retirement age. Buying such a business is tricky - you may be assisting the next generation to finance the purchase which can have it's own struggles. Ideally you'll be looking for a young(ish) company with proven sales and which is looking to finance growth in an optimal way. Such a company may have many options for raising capital so you'll be competing to invest. As to whether or not it's a good idea... KFC only became a household name and global franchise after Pete Harman joined Harland Sanders as a partner. Richard and Maurice McDonald may have founded McDonald's but it was Ray Kroc who made it a success. New partners bring in new ideas and fresh energy which the original entrepreneurs may have lost during the difficulties of starting out. But that goes back to my first query; just how much do you want to get involved?\"",
"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": "2b1a8a2a609b0f853660a8786305f123",
"text": "just pick a good bond and invest all your money there (since they're fairly low risk) No. That is basically throwing away your money and why would you do that. And who told you they are low risk. That is a very wrong premise. What factors should I consider in picking a bond and how would they weigh against each other? Quite a number of them to say, assuming these aren't government bonds(US, UK etc) How safe is the institution issuing the bond. Their income, business they are in, their past performance business wise and the bonds issued by them, if any. Check for the bond ratings issued by the rating agencies. Read the prospectus and check for any specific conditions i.e. bonds are callable, bonds can be retired under certain conditions, what happens if they default and what order will you be reimbursed(senior debt take priority). Where are interest rates heading, which will decide the price you are paying for the bond. And also the yield you will derive from the bond. How do you intend to invest the income, coupon, you will derive from the bonds. What is your time horizon to invest in bonds and similarly the bond's life. I have invested in stocks previously but realized that it isn't for me Bonds are much more difficult than equities. Stick to government bonds if you can, but they don't generate much income, considering the low interest rates environment. Now that QE is over you might expect interest rates to rise, but you can only wait. Or go for bonds from stable companies i.e. GE, Walmart. And no I am not saying you buy their bonds in any imaginable way.",
"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": "d0255b03e9b26ac7886bc7db1ca7075a",
"text": "\"I agree with Joe Taxpayer that a lot of details are missing to really evaluate it as an investment... for context, I own a few investment properties including a 'small' 10+ unit apartment complex. My answer might be more than you really want/need, (it kind of turned into Real Estate Investing 101), but to be fair you're really asking 3 different questions here: your headline asks \"\"how effective are Condo/Hotel developments as investments?\"\" An answer to that is... sometimes, very. These are a way for you-the investor-to get higher rents per sq. ft. as an owner, and for the hotel to limit its risks and access additional development funding. By your description, it sounds like this particular company is taking a substantial cut of rents. I don't know this property segment specifically, but I can give you my insight for longer-term apartment rentals... the numbers are the same at heart. The other two questions you're implying are \"\"How effective is THIS condo/hotel development?\"\" and \"\"Should you buy into it?\"\" If you have the funds and the financial wherewithal to honestly consider this, then I am sure that you don't need your hand held for the investment pros/cons warnings of the last question. But let me give you some of my insight as far as the way to evaluate an investment property, and a few other questions you might ask yourself before you make the decision to buy or perhaps to invest somewhere else. The finance side of real estate can be simple, or complicated. It sounds like you have a good start evaluating it, but here's what I would do: Start with figuring out how much revenue you will actually 'see': Gross Potential Income: 365 days x Average Rent for the Room = GPI (minus) Vacancy... you'll have to figure this out... you'll actually do the math as (Vacancy Rate %) x GPI (equals) Effective Potential Income = EPI Then find out how much you will actually pocket at the end of the day as operating income: Take EPI (minus) Operating expenses ... Utilities ... Maintenace ... HOA ... Marketing if you do this yourself (minus) Management Expenses ... 40% of EPI ... any other 'fees' they may charge if you manage it yourself. ... Extra tax help? (minus) Debt Service ... Mortgage payment ... include Insurances (property, PMI, etc) == Net Operating Income (NOI) Now NOI (minus) Taxes == Net Income Net Income (add back) Depreciation (add back) sometimes Mortgage Interest == After-tax Cash Flows There are two \"\"quickie\"\" numbers real estate investors can spout off. One is the NOI, the other is the Cap Rate. In order to answer \"\"How effective is THIS development?\"\" you'll have to run the numbers yourself and decide. The NOI will be based on any assumptions you choose to make for vacancy rates, actual revenue from hotel room bookings, etc. But it will show you how much you should bring in before taxes each year. If you divide the NOI by the asking price of your unit (and then multiply by 100), you'll get the \"\"Cap Rate\"\". This is a rough estimate of the rate of return you can expect for your unit... if you buy in. If you come back and say \"\"well I found out it has a XX% cap rate\"\", we won't really be qualified to help you out. Well established mega investment properties (think shopping centers, office buildings, etc.) can be as low as 3-5 cap rates, and as high as 10-12. The more risky the property, the higher your return should be. But if it's something you like, and the chance to make a 6% return feels right, then that's your choice. Or if you have something like a 15% cap rate... that's not necessarily outstanding given the level of risk (uncertain vacancies) involved in a hotel. Some other questions you should ask yourself include: How much competition is there in the area for short-term lodging? This could drive vacancies up or down... and rents up or down as well How 'liquid' will the property (room) be as an asset? If you can just break even on operating expense, then it might still make sense as an investment if you think that it might appreciate in value AND you would be able to sell the unit to someone else. How much experience does this property management company have... (a) in general, (b) running hotels, and (c) running these kinds of condo-hotel combination projects? I would be especially interested in what exactly you're getting in return for paying them 40% of every booking. Seasonality? This will play into Joe Taxpayer's question about Vacancy Rates. Your profile says you're from TX... which hints that you probably aren't looking at a condo on ski slopes or anything, but if you're looking at something that's a spring break-esque destination, then you might still have a great run of high o during March/April/May/June, but be nearly empty during October/November/December. I hope that helps. There is plenty of room to make a more \"\"exact\"\" model of what your cash flows might look like, but that will be based on assumptions and research you're probably not making at this time.\"",
"title": ""
},
{
"docid": "27f9a983c9f3d7c33a93dfd9dbe49aef",
"text": "It depends on the firm. I was interviewing with a few PE firms a few months ago, and the structure can vary. Some were definitely just LBO shops where the bulk of the staff were focused just on the deal. I remember a couple, however, that placed a lot of emphasis on getting in-house after the deal and performing what ultimately amounted to long term management consulting. These firms tended to hold companies for like 10+ years iirc. It sounds like there might be options out there in line with your passions, you just need to be pretty picky with the firm you join. I only remember one firm's name off the top of my head, but I'd be happy to pm it to you if you want to do some more research yourself.",
"title": ""
},
{
"docid": "b721bf929645a32770ca5320a4f2b5b7",
"text": "There are a couple of ways to buy into a private company. First, the company can use equity crowd funding (approved under the JOBS act, you don't need to be an accredited investor for this). The offering can be within one state (i.e. Intrastate offerings) which don't have the same SEC regulations but will be governed by state law. Small companies (small assets, under $1 million) can be made under Regulation D, Rule 504. For assets under $5 million, there is Rule 505, which allows a limited number of non-accredited investors. Unfortunately, there aren't a lot of 504 and 505 issues. Rule 506 issues are common, and it does allow a few non-accredited investors (I think 35), but non-accredited investors have to be given lots of disclosure, so often companies use a Rule 506 issue but only for accredited investors.",
"title": ""
},
{
"docid": "0b4d041501b889e30080b61b2a31216c",
"text": "You could certainly look at the holdings of index funds and choose index funds that meet your qualifications. Funds allow you to see their holdings, and in most cases you can tell from the description whether certain companies would qualify for their fund or not based on that description - particularly if you have a small set of companies that would be problems. You could also pick a fund category that is industry-specific. I invest in part in a Healthcare-focused fund, for example. Pick a few industries that are relatively diverse from each other in terms of topics, but are still specific in terms of industry - a healthcare fund, a commodities fund, an REIT fund. Then you could be confident that they weren't investing in defense contractors or big banks or whatever you object to. However, if you don't feel like you know enough to filter on your own, and want the diversity from non-industry-specific funds, your best option is likely a 'socially screened' fund like VFTSX is likely your best option; given there are many similar funds in that area, you might simply pick the one that is most similar to you in philosophy.",
"title": ""
},
{
"docid": "f4e52de00689799d0a38c9951bef61de",
"text": "You can find out the general types of investments by reading the public corporation 10-Q report that is filed with the SEC it can be accessed via the EDGAR system. It will not tell you what securities they have, but it does identify the short term and long term investments categories and their value.",
"title": ""
},
{
"docid": "e0011d1c9d452a858e46b0056fe52fcd",
"text": "I mean some VCs focus on technology companies, that's a sector focus, but a very broad one. Are you saying you don't want to be limited to one sector? Also keep in mind that series B investments are much more expensive then A rounds, just because there is more proof and less risk. I know of some angel investors that invest by size rather than industry, maybe you could partner up with them. All depends on how much capital you have/ how much involvement you want to have with the company.",
"title": ""
},
{
"docid": "d356e065a65de9c35e9d108e23d322f2",
"text": "2 + 20 isn't really a investment style, more of a management style. As CTA I don't have specific experience in the Hedge Fund industry but they are similar. For tech stuff, you may want to check out Interactive Brokers. As for legal stuff, with a CTA you need to have power of attorney form, disclosure documents, risk documents, fees, performance, etc. You basically want to cover your butt and make sure clients understand everything. For regulatory compliance and rules, you would have to consult your apporiate regulatory body. For a CTA its the NFA/CFTC. You should look at getting licensed to provide crediabilty. For a CTA it would be the series 3 license at the very least and I can provide you with a resource for study guides and practice test taking for ALL licenses. I can provide a brief step by step guide later on.",
"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": "f4169e685a12d264278d31530c50068e",
"text": "Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts. https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information.",
"title": ""
},
{
"docid": "84684ca8001220b80db21a461e7b2e21",
"text": "You won't be able to know the trading activity in a timely, actionable method in most cases. The exception is if the investor (individual, fund, holding company, non-profit foundation, etc) is a large shareholder of a specific company and therefore required to file their intentions to buy or sell with the SEC. The threshold for this is usually if they own 5% or greater of the outstanding shares. You can, however, get a sense of the holdings for some of the entities you mention with some sleuthing. Publicly-Traded Holding Companies Since you mention Warren Buffett, Berkshire Hathaway is an example of this. Publicly traded companies (that are traded on a US-based exchange) have to file numerous reports with the SEC. Of these, you should review their Annual Report and monitor all filings on the SEC's website. Here's the link to the Berkshire Hathaway profile. Private Foundations Harvard and Yale have private, non-profit foundations. The first place to look would be at the Form 990 filings each is required to file with the IRS. Two sources for these filings are GuideStar.org and the FoundationCenter.org. Keep in mind that if the private foundation is a large enough shareholder in a specific company, they, too, will be required to file their intentions to buy or sell shares in that company. Private Individuals Unless the individual publicly releases their current holdings, the only insight you may get is what they say publicly or have to disclose — again, if they are a major shareholder.",
"title": ""
},
{
"docid": "35ed04b2dace3b1397574bc03dc60917",
"text": "\"As for the letting the \"\"wise\"\" people only make the decisions, I guess that would be a bit odd in the long run. Especially when you get more experienced or when you don't agree with their decision. What you could do, is make an agreement that always 3/4 (+/-) of the partners must agree with an investment. This promotes your involvement in the investments and it will also make the debate about where to invest more alive, fun and educational). As for the taxes I can't give you any good advice as I don't know how tax / business stuff works in the US. Here in The Netherlands we have several business forms that each have their own tax savings. The savings mostly depend on the amount of money that is involved. Some forms are better for small earnings (80k or less), other forms only get interesting with large amounts of money (100k or more). Apart from the tax savings, there could also be some legal / technical reasons to choose a specific form. Again, I don't know the situation in your country, so maybe some other folks can help. A final tip if your also doing this for fun, try to use this investment company to learn from. This might come in handy later.\"",
"title": ""
},
{
"docid": "b1e05f0c1f8a91df35f4a20898dda67e",
"text": "Shorts are difficult because you have to find someone to lend the stock to you. In contrast, put options don't require that. They also have some nice properties like you're only out the contract price. The options chain for BSFT will give you an idea of where the market is. Keep in mind that BSFT only IPO'd last year and announced blowout earnings recently. Make sure the P:E you're looking at is using recent earnings reports!",
"title": ""
}
] |
fiqa
|
0eda6ad84218ed45e1a054efe1a881ba
|
If earning as freelancer, is it better to be a Sole Trader or Limited Company?
|
[
{
"docid": "3ac188863937de2106c8c20b17e1bbb7",
"text": "As I understand it (please correct me if i'm wrong, i've looked at this before and i've been a sole trader briefly but I've never formed a LTD company) there are pros and cons to forming a limited company. Pros Cons",
"title": ""
},
{
"docid": "2a8096fb4a4696fa026ea16948b8af0f",
"text": "Source Sole trader If you start working for yourself, you’re classed as a self-employed sole trader - even if you’ve not yet told HM Revenue and Customs (HMRC). As a sole trader, you run your own business as an individual. You can keep all your business’s profits after you’ve paid tax on them. You can employ staff. ‘Sole trader’ means you’re responsible for the business, not that you have to work alone.You’re personally responsible for any losses your business makes. Tax responsibilities You must: You’re personally responsible for any losses your business makes. This is one condition which you would need to have a look. If you do some shoddy work and your client wants to recover the losses they can come after your personal money or property. LLPs have the same probelm too. And you pay NI and income tax on all of your profits. If you have a partner then both can take out the profits of a limited company, if both are directors. The tax hit will be less as compared to a single person.",
"title": ""
}
] |
[
{
"docid": "6f502d2bdee21a91a60a914580f1d61e",
"text": "You can find a lot of information at the HRMC website at http://hmrc.gov.uk. If you don't want to work as an employee, you can register as self-employed (basically a one-man band), which is quite simple, you can start your own company, which is more work but can have tax advantages, or you can find umbrella companies which will officially employ you while in reality you are a freelancer and only do your billing through them. Umbrella companies can be anywhere from totally legal to extremely dodgy. If they promise you that you pay only five percent tax on your income through ingenious tricks, that's only until the tax office finds out and they will make you pay. Between self-employed and your own company, the big difference is whether you are actually working independently or not. If you work like an employee (take someone else's orders) and claim you are a company, the tax office doesn't like that. And if you pay very little taxes, they don't like that either. So self-employed is the safer choice but you will pay more taxes, close to what a normal employee would pay. Obviously you will have to pay tax on your income and NHS insurance. Obviously you are required to tell the government (actually HMRC) about your income. Not doing so would be tax evasion and get you into deep trouble when you are caught. I don't think you have to tell them the source of your income, but not telling them might look very suspicious and might get your accounts checked carefully. And unless you design a website for the mafia, why wouldn't you tell them? The bill payer will try to deduct your bill from their profits anyway, so it's no secret. Most important to remember: When you send out a bill and receive payment, you'll have to pay tax on it. When self employed, as a rule of thumb put one third away into a savings account for your tax bill. Don't spend it all or you will find yourself in deep trouble when your taxes need paying. Plus put some more away for times when you can't find work.",
"title": ""
},
{
"docid": "f377bf8b7f5ca4193644635caed01974",
"text": "Firstly if you've formed a limited company you don't need to register as self-employed. You're an employee and shareholder of the company and your taxes will be handled that way. Registering as self-employed is only necessary if you're operating as a sole trader (i.e. without a company). Secondly you absolutely do want to get set-up correctly with HMRC as soon as possible, whether you're a company or a sole trader. Ignoring the legal question your worry about paying taxes when you have no income is groundless - if you're not making any money there won't be any tax to pay. Furthermore it seems likely that the business is currently losing money. Those losses, if correctly recorded, can be carried forward and offset against future profits so not only do you not have to pay tax now, but you can reduce the tax you pay later when the money does start rolling in.",
"title": ""
},
{
"docid": "59c7fd30c8303ec146bf06020749ffcb",
"text": "The major reason to start an LLC for side work is if you want the additional personal liability protection afforded by one. If you're operating as a sole proprietor, you may be exposing yourself to liability: debts and judgments against your business can put your personal assets at risk! So, if you're intending to continue and grow your side work in the future, you ought to consider the LLC sooner than later. It's also an important legal decision and you should consider seeking a professional opinion. The Wall Street Journal has a brief guide titled How to Form an LLC. Here are some notable excerpts: A limited liability company, or LLC, is similar to a partnership but has the legal protections of personal assets that a corporation offers without the burdensome formalities, paperwork and fees. [...] Some states charge annual fees and taxes that can diminish the economic advantage of choosing to become an LLC. Among LLC advantages: pass-through taxation – meaning the profits and losses “pass through” the business to the individuals owning the business who report this information on their own personal tax returns. The result can be paying less in taxes, since profits are not taxed at both the business level and the personal level. Another plus: Owners aren’t usually responsible for the company’s debts and liabilities. [...] Also check out onstartups.com's Startup 101: Should You Form An Inc. or An LLC? Here are some additional articles that discuss the advantages / disadvantages of forming an LLC:",
"title": ""
},
{
"docid": "14473f2ac55ef0a59cf823be7856e1de",
"text": "You will need to register as self-employed aka sole trader (that's the whole point: pay taxes on income that you're not getting as wages from an employer, who would arrange PAYE/NI contributions), or set up a limited company (in the last case you would have the option of either getting paid as wages or as dividends — which one is better is a complex issue which varies from year to year). You'll find lots of advice on the HMRC website.",
"title": ""
},
{
"docid": "fcea0195c525dd15d0979228c8159f02",
"text": "Use a limited company. Use the HMRC website for help on limited companies and get a good accountant for doing your taxes. Mixing your website income and personal income may make you pay a higher tax rate. You can take out expenses from the limited company, which are tax deductible. But if you group it in personal income it wouldn't be tax deductible. In a personal capacity you are 100% liable if your business goes bust and you owe debt. But for a limited company you are only liable for what you own i.e %age of shares. You can take on an investor if your business booms and it is easier if you do it through a limited company rather than through a personal endeavour.",
"title": ""
},
{
"docid": "fcaf54599e1643faabf88cf789396fb3",
"text": "I guess you are making quite a bit of assumptions without clarifying what you are trying to achieve. As a non-resident you cannot incorporate a sole proprietorship in Singapore. You have to be citizen. Alternatively you can register a company that has its own norms like minimum number of directors and some being Singapore national, etc. As you are paying dividend and not salary to yourself, the company will be required to pay taxes on gains. So all consulting money is gain as there is no expense. The balance when you transfer to Spain would potentially get taxed as income to you subject to DTAA",
"title": ""
},
{
"docid": "2b20f947365127fa9960e94eccba69e3",
"text": "\"In simple terms, it is a business operation when it becomes a profit-making enterprise. It is a grey area, but there is a difference between selling occasional personal items on eBay and selling for profit. I would imagine the sort of considerations HM Revenue & Customs would take into account are the size of your turnover, the extent to which you are both buying and selling, and whether you are clearly specialising in one particular commodity as opposed of disposing of unwanted presents or clearing the loft. http://www.ebay.co.uk/gds/When-does-eBay-selling-become-taxable-/10000000004494855/g.html I don't believe that you selling your personal camera gear will be taxable, but as the link says, it is a grey area. They also recommend to do this It's far better than having to deal with an investigation a few years down the line. When it comes to completing your tax return, there is a section which is headed \"\"other income\"\", and it is here where you will enter the net earnings from the web business. \"\"Net\"\" here means your additional income, less all expenses associated with it. If you are still worried I would always encourage people to take a cautious approach and discuss their position with HMRC via its helpline on 08454 915 4515.\"",
"title": ""
},
{
"docid": "83f92b50ccebdd89ecdfa9794d4be2f5",
"text": "I'm hearing that I should maybe wait and see how things go at first as it is only a very small operation. But if I moved into a side of the trade where I require staff, vehicles, and the likes then I would need to registed as a limited company.",
"title": ""
},
{
"docid": "29bee6cf3c5e3539af8867ea50a27cef",
"text": "It is a bit of work and expense to form a LLC. In the long run it is the best approach because it shields your personal assets from business liability. In the short run, you can form as a sole proprietor and operate that way, and later convert to a LLC.",
"title": ""
},
{
"docid": "0e48693bde300c48d90869879df069e1",
"text": "\"I don't think it really matters, my understanding is that as a sole trader there is no distinction between your personal and business tax affairs. The distinction between your personal and business account is mainly for your own personal benefit to make it easier to differentiate between \"\"wages\"\" and retained earnings. If you want to maintain this distinction with regard to tax then you need to somehow differentiate between tax paid on your \"\"wage\"\" and tax paid on retained earnings. You could then either make two payments, or pay from either and transfer the difference from the other. Either way, it's just a matter of perspective rather than something with a physical difference.\"",
"title": ""
},
{
"docid": "235931fe0d75e0b8eb16414243603e3a",
"text": "\"Here's a brief rundown: 1. You're not going to need a lot of capital or debt 2. You aren't in a high-liability or high (MM+) revenue industry unless you're making children's toys out of reclaimed dynamite or something 3. You are operating by yourself The first fact rules out S or C corp. The second fact dings LLC, and the third one rules out a LLP or GP by default, although you can always convert later if you get a partner. Benefits of sole proprietorship include very simple taxes! As a pass-through entity, the business's income is considered your own, and business expenses are tax deductible. You don't need separate tax returns for both. Additionally, if it's just your name, you might not even need a license depending on your state and municipality (figure this out). If you want a different name, you usually need to register \"\"doing business as [name]\"\" with your state or municipality. Lastly, you don't need to use business income in any special way, since you have no additional tax liability or general liability shield. With an LLC, there are a lot of rules and restrictions. Let me know if you have any specific questions.\"",
"title": ""
},
{
"docid": "e4d9f1267819d3b2b983b80baa1d1671",
"text": "You will be categorized as self employed. Will I have to register myself as a company or can go on unregistered and work You can register a company or can use an umbrella company or work as a sole trader. Remember as a sole trader you are legally responsible for you company's activities, an if a company sues you for your work he can take compensation from your personal assets. As a company your liability ends with the company, if your company is sued. Your personal assets are outside the purview of the lawsuit, but the court can attach that also but those are rare. This doesn't matter if you use an umbrella company. If you intend to be doing this for a short time(maybe a year or so), go for an umbrella company. Else register a company. will take you 5 minutes to form one. Depending on your earning you might need to register for VAT too. A comprehensive guide for self employed on HMRC. what would i need to be sound in uk and to be fit to work online as a freelancer? The same as above. Will it include paying any tax or paying any insurance Yes you have register for National Insurance(NI), before you can pay yourself a salary. The benefit of a company is you pay yourself a minimum salary, below the limit above which you have to contribute for NI, and take the rest as dividends. And pay no tax on it, till you don't exceed the limits. When the money comes in my account, will i be accountable to government of uk, to tell the source of income? If you are operating through a company, yes you would need to show your income(including source) and expenditure when you do your annual returns. What should i be knowing, like health insurance and things that are necessities in uk for a freelancer ? No health insurance as NHS exists. You can take out health insurance if you don't want to get into queues in NHS.",
"title": ""
},
{
"docid": "ceefd9186fbe63a649c1b841cd61d71d",
"text": "It makes no difference for tax purposes. If you are 1099, you will pay the same amount of taxes as if you formed a corporation and then paid yourself (essentially you are doing this as a 1099 contractor, just not formally). Legally, I don't know the answer. I would assume you have some legal protections by forming an LLC but practically I think this won't make any difference if you get sued.",
"title": ""
},
{
"docid": "a279ca195fb059cdc40775cca8a0e5d3",
"text": "As an LLC you are required to have a separate bank account (so you can't have one account and mix personal and business finances together as you could if you were a sole trader) - but there's no requirement for it to be a business bank account. However, the terms and conditions of most high street bank personal current accounts specifically exclude business banking, so unless you could find one that would allow it, you'd have to open a business bank account.",
"title": ""
},
{
"docid": "3dc6474959e9d1c1a8874382d455188c",
"text": "From my experience it is much easier to start as a self-employed rather than a limited company. You almost have no paperwork and self assessment can be done online in as little as 20 minutes (from personal experience). On the other hand having a limited company grants you a pile of papers to fill in from the start and almost certainly needing an accountant to do your taxes. Regarding the income tax - if you have no profits, you will pay no tax. And that will leave you only with national insurance that is only about £70 for 3 month (better check with HMRC for the exact figure). So if you don't have a good enough reason to do a Ltd, start as a self-employed, you can always change to limited company later.",
"title": ""
}
] |
fiqa
|
5dafb9f9b39f2d55b1369fa6777da4d8
|
Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK)
|
[
{
"docid": "390033140caf6afd5b6091dd66fc7e81",
"text": "\"As far as I know any business can register for VAT regardless of the nature of the business. If all the goods you sell (or services you provide) are VAT-exempt or zero-rated then you will get refunds from HMRC on VAT your business pays. Any business whose non-VAT exempt turnover (which would include zero-rated goods and services provided) exceeds the registration threshold must register, again even if that means they are \"\"forced\"\" to claim refunds. So the only question would be whether your rather nebulous activities were enough to qualify you as a business or organisation to which the VAT regime applies at all. The one-liner answer to that is generally, if goods or services are provided in return for a charge, there’s a business activity for VAT purposes Inevitably there's a much bigger body of statute and case law and it won't always be obvious whether the one-liner answer applies or not to a particular activity so it may be necessary to seek specialist advice.\"",
"title": ""
},
{
"docid": "21d4e1e1342a71f70549aee9c0eb3e5b",
"text": "IANAL, I have not been VAT registered myself but this is what I have picked up from various sources. You might want to confirm things with your solicitor or accountant. As I understand it there is a critical difference between supplying zero-rated goods/services and supplying exempt goods/services. If the goods/services are zero-rated then the normal VAT rules apply, you charge VAT on your outputs (at a rate of 0%) and can claim back VAT on your inputs (at whatever rate it was charged at, depending on the type of goods.. If the goods/services are exempt you don't charge and VAT on your outputs and can't claim back any VAT on your inputs. (Things get complicated if you have a mixture of exempt and non-exempt outputs) According to http://oko.uk/blog/adsense-vat-explained adsense income is a buisness to buisness transaction with a company in another EU country and so from a supplier point of view (you are the supplier, google is the customer) it counts as a zero-rated transaction.",
"title": ""
},
{
"docid": "a254f084d7f18a44be22b255ec156e46",
"text": "\"You cannot \"\"claim back\"\" VAT. What happens is that if you sell goods with VAT and charge customers VAT, you would have to send that VAT straight to HMRC, but if your business itself paid VAT, then you already paid VAT, so you have to send less. As an example, if you send an invoice for £10,000 plus £2,000 VAT, and you paid yourself £500 VAT on business related expenses, then you need to send £2,000 - £500 = £1,500 to HMRC. But if you don't send invoices including VAT, then you owe HMRC £0. Any VAT you paid on business related expenses is lost; HMRC won't pay you money. BTW. Only VAT on business related expenses can be deducted. So if you want to be \"\"smart\"\", register for VAT and get the VAT on your weekly shopping bill refunded, forget it.\"",
"title": ""
}
] |
[
{
"docid": "f6596d074e54060305ee4274ca92893b",
"text": "\"Going by the information from Goods and Services Tax (GST) on the Australian Government website, there seem to be a number of possibilities. Note: First I am neither a tax expert nor a lawyer; this is simply my interpretation of the rules on the page linked above. Second, this interpretation is based on the assumption that \"\"resells a service\"\" means you (at least technically) buy the service from another company and sell it on to the users of your app. Depending on the nature of the service, and possibly factors such as whether you are deemed to \"\"take possession\"\" during the transaction, it might be that different rules apply. Your Turnover is Under A$75,000 (Providing you're not reselling taxi services!) You won't need to register for GST, should not charge it, and your invoices should show that GST was not included in the price. However, if the turnover of the company whose services you are reselling is registered for GST, they will be charging you GST that you will not be able to claim back, so you would need to factor this into the price you charge your users (before any promotional discount). For example: Your Turnover is Over A$75,000 If your turnover is above the limit, you would need to charge GST on the final sale amount and pay this amount (one eleventh of the price your customer paid) to the Australian Government. You also have to send out properly-formatted tax invoices. However, it's probably safe to say the company you are buying the original service from will also be over the GST threshold, so you should be able to reclaim the GST that was charged to you by them. For example: Here, your overall profit/loss is helped by the fact that you can reclaim the GST you were charged, and can under some circumstances result in an overall rebate. These figures assume you add 10% to your selling price to cover the GST you have to pay the Government. However, this may make your offering uncompetitive, so you may have to absorb some/all of the GST yourself.\"",
"title": ""
},
{
"docid": "72b1e6985173d4f438917c27830348c5",
"text": "Not doing this would defeat the entire purpose of a VAT. The reason for a VAT rather than a simple sales tax is that it's harder to evade. Having a simple sales tax with the type of rates that VAT taxes typically are is unworkable because evasion is too easy. Imagine I'm a retailer. I buy products from a wholesaler and sell them to consumers. With a sales tax, if I don't charge the customer sales tax, the customer is happy and I don't care (assuming I don't get caught). And if I keep the sales tax but don't report the sale, I make a lot of money. Now, imagine a VAT. If I don't charge the customer the VAT, I lose money since I paid the VAT on the wholesale products. And if I don't report the sale, how do I claim my VAT refund?",
"title": ""
},
{
"docid": "7384ba26029dc697a612316e7d27c1e7",
"text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT.",
"title": ""
},
{
"docid": "9757bb5c63f8eaefdd7cb9c62f6da0b4",
"text": "\"The HMRC has a dedicated self-help/learning site that is helpful here: It's important to tell HMRC that you are self-employed as soon as possible. If you don't, you may have to pay a penalty. You don't want to pay more to HMRC than you have to as it is a waste of your money. Your business has started when you start to advertise or you have a customer to buy your goods or services. It is at this point that your business is 'trading'. You cannot register before you start trading. For example, if you advertise your business in the local newspaper on 15 January but do not get your first customer until 29 March; in this case, you have been trading since 15 January. You must tell HMRC within six months of the end of the tax year in which you start self-employment. You must therefore register by 5 October. But it's best to register well before this so that you do not forget to do so. The HMRC also has a YouTube channel with help videos, and \"\"Am I Trading or Not?\"\" might be of particular interest to you. Most of the registration is based around the concept of starting to work with the intent to make a profit. By the letter of law and regulations, you should register within six months of the end of the tax year you started to avoid any potential penalty. However note that the situation is different based upon your intent. If you begin making/putting up videos online as a hobby with the hope that you can make something to help you defray the basic costs involved, and the total amount you make is relatively small (say, less than 500 pounds), you will not be classified as \"\"trading\"\" and likely have no need to register with HMRC. As soon as you begin to get in regular payments, maybe a single payment of a significant size, or multiple payments for a similar service/item, you are vastly more likely to need to register. From my reading you would likely be safe to begin putting up videos without registration, but if you begin spending a large portion of your time over an extended period (multiple months) and/or begin getting payments of any notable size then you should likely register with the appropriate services (HMRC, etc). As is the case in both the USA and UK, simple registration is pretty cheap and the costs of little/no income are usually pretty minor. Also note that the HMRC trading and self-employment regulations are unusual compared to many US laws/institutions, in that you are explicitly permitted to begin doing something and only register later. So if you start doing videos for an entire tax year + 5 months and make nothing significant, you'd seemingly be fine to never register at all.\"",
"title": ""
},
{
"docid": "7a0f5ae5d21bde5bfb381e841ac88197",
"text": "Most US states have rules that go something like this: You will almost certainly have to pay some registration fees, as noted above. Depending on how you organize, you may or may not need to file a separate tax return for the business. (If you're sole proprietor for tax purposes, then you file on Schedule C on your personal Form 1040.) Whether or not you pay taxes depends on whether you have net income. It's possible that some losses might also be deductible. (Note that you may have to file a return even if you don't have net income - Filing and needing to pay are not the same since your return may indicate no tax due.) In addition, at the state level, you may have to pay additional fees or taxes beyond income tax depending on what you sell and how you sell it. (Sales tax, for example, might come into play as might franchise taxes.) You'll need to check your own state law for that. As always, it could be wise to get professional tax and accounting advice that's tailored to your situation and your state. This is just an outline of some things that you'll need to consider.",
"title": ""
},
{
"docid": "3af1d7a148fad877b7f7b63019357b09",
"text": "The plumber will apply for and receive a refund of the amount of VAT he paid on the purchase amount. That's the cornerstone of how VAT works, as opposed to a sales tax. So for example: (Rounded approximate amounts for simplicity) Now, at each point, the amount between (original cost VAT) and (new VAT) is refunded. So by the end, a total of £3 VAT is paid on the pipe (not £6.2); and at each point the business 'adding value' at that stage pays that much. The material company adds £1 value; the producer adds £4 value; the supplier adds £5 value; the plumber adds £5 value. Each pays some amount of VAT on that amount, typically 20% unless it's zero/reduced rated. So the pipe supplier pays £1 but gets a £0.2 refund, so truly pays £0.8. The plumber pays £3 (from your payment) but gets a £2 refund. So at each level somebody paid a bit, and then that bit is then refunded to the next person up the ladder, with the final person in the chain paying the full amount. The £0.2 is refunded to the producer, the £1 is refunded to the supplier, the £2 is refunded to the plumber.",
"title": ""
},
{
"docid": "8c2160b3fe80479769675a4fc398c663",
"text": "If you are providing VAT-liable services (you probablly are) and you register normally for VAT then you will be able to reclaim VAT on your buisness purchases but you will have to charge VAT to your clients. So the question really comes down to will your clients regard you adding VAT to their invoices as a price increase or not. That is likely to depend on whether your clients are in a position to claim-back the VAT you charged them. If you are working mostly for VAT registered buisnesses who perform primerally vat-liable (including zero-rated) activities then registering for VAT is likely in your financial interests (though it does mean more paperwork). The flat-rate scheme may be better still. If you are working mostly for private individuals, non VAT registered buisnesses or buisnesses which primerally perform VAT exempt* activities then registering for VAT when you don't have to is most likely not in your financial interests. * Note: VAT exempt and zero rated for VAT are very different things even though they look similar to the customer.",
"title": ""
},
{
"docid": "d294dd6438dfaa3a54557e2c33f1d5ae",
"text": "You don't have to register for corporation tax until you start doing business: After you’ve registered your company with Companies House, you’ll need to register it for Corporation Tax. You’ll need to do this within 3 months of starting to do business. Since you haven't needed to do that yet, there also shouldn't be any need to tell HMRC you've stopped trading. So it should just be a question of telling Companies House - I guess it's possible they'll first want you to provide the missing accounts.",
"title": ""
},
{
"docid": "eee3787af4484907157a31db91c64902",
"text": "You need to register as self-employed with HMRC (it is perfectly fine to be self-employed and employed by an employer at the same time, in exactly your kind of situation). Then, when the income arrives you will need to declare it on your yearly tax return. HMRC information about registering for self-employment and declaring the income is here: https://www.gov.uk/working-for-yourself/overview There's a few extra hoops if your clients are outside the UK; the detail depends on whether they are in the EU or not. More details about this are here: https://www.gov.uk/online-and-distance-selling-for-businesses/selling-overseas .",
"title": ""
},
{
"docid": "8332285867ed963bb8650fb213379aca",
"text": "Source on GOV.UK You may be able to get tax back for some of the bills you have to pay because you have to work at home on a regular basis. You can only claim for things to do with your work, eg business telephone calls or the extra cost of gas and electricity for your work area. You can’t claim for things that you use for both private and business use, eg rent or broadband access. You don’t need to provide records for claims of up to £4 per week (£18 per month). For claims over £4 per week you’ll need to provide evidence of what you’ve spent. Claims up to £2,500 You must claim using a Self Assessment tax return if you already fill one in. If you don’t already fill in a Self Assessment tax return, and your allowable expenses are under £2,500 for the tax year, fill in form P87 and send it to the address on the form. If you’ve made a successful claim in a previous tax year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions), you may be able to make your claim by phone. Claims over £2,500 You must claim using a Self Assessment tax return.",
"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": "ba9c7a098b91c3adfcde14646cd9d9e2",
"text": "Is the VAT scam still on the go? I was under the impression that amazon have to pay vat according to the country the items are shipped to, not shipped from? It will be a complete fuck up on the part of our politicians if this loophole has not been closed yet.",
"title": ""
},
{
"docid": "e6c0ce6d855e23a095166cf2c36b03e8",
"text": "Your answer will need loads of information and clarification, so I will ask you to visit the VAT and have a peruse. 1) Obligation is for you to find out the correct rate of VAT, charge and pay tax accordingly. You can call up the HMRC VAT helpline for help, which they will be happy to oblige. Normally everybody pays VAT every 3 months or you can pay once in a year. 2) Depends on your annual turnover, including VAT. Less than £150000 you join the Flat rate scheme. There are schemes for cultural activities. Might be good to check here on GOV.UK. 3) If you pay VAT in EU countries, you can reclaim VAT in UK. You need to reclaim VAT while filing in your VAT returns. But be careful about your receipts, which can be checked to verify you are not defrauding HMRC. The basic rule is that B2B services are, as the name suggests, supplies from one business to another. And, subject to some exceptions, are treated as made where the customer belongs. No VAT is chargeable on B2B supplies to an overseas customer. But where you make a B2C supply, VAT depends on where your customer is located: 1) if they are outside the EU, you don’t need to charge VAT 2) if they are located in an EU country, then you must charge VAT. Source All in all keep all records of VAT charged and paid to satisfy the taxman. If the rules get complicated, get an accountant to help you out. Don' take chances of interpreting the law yourself, the fines you might pay for wrong interpretation might be a deal breaker.",
"title": ""
},
{
"docid": "ebb92bdb06c45cd6b5e611c8ca35c2db",
"text": "If you do business under your name, you don't need to register your business. Your business will be treated as a sole proprietorship. If your revenue exceeds 30,000 (or wish to collect GST for the government) then you will have to register with the CRA for a GST account, but that is free.",
"title": ""
},
{
"docid": "4cdfa5eb579e2b1f99667e415dc13ca6",
"text": "An order is not a transaction. It is a request to make a transaction. If the transaction never occurs (e.g. because you cancel the order), then no fees should be charged. will I get the stamp duty back (the 0.5% tax I paid on the shares purchase) when I sell the shares? I'm not a UK tax expert, but accorging to this page is seems like you only pay stamp tax when you buy shares, and don't get it back when you sell (but may be responsible for capital gains taxes). That makes sense, because there's always a buyer and a seller, so if you got the tax back when you sold, the tax would effectively be transferred from the buyer to the seller, and the government would never collect anything.",
"title": ""
}
] |
fiqa
|
0a0d785d559cc04a233ab1a30d6a6115
|
Automatic transaction on credit card to stay active
|
[
{
"docid": "c994e56fbf8994af3ecd8cec6f6ab0b7",
"text": "Put one of your monthly bills on it. (Utility bill, Netflix, monthly donation to charity, etc.) I have several automatic, recurring monthly charges on my credit card. If you don't have any current monthly bills that you want to switch, contact the Red Cross, or a charity of your choice. They would be very happy to charge your credit card once a month. Alternatively, it might be okay to let it close.",
"title": ""
},
{
"docid": "ecad50d0648a674b4523a69676b615e9",
"text": "credit cards are almost never closed for inactivity. i have had dozens of cards innactive for years on end, and only one was ever closed on me for inactivity. i would bet a single 1$ transaction per calendar year would keep all your cards open. as such, you could forget automating the process and just spend 20 minutes a year making manual 1$ payments (e.g. to your isp, utility company, google play, etc.). alternatively, many charities will let you set up an automatic monthly donation for any amount (e.g. 1$ to wikipedia). or perhaps you could treat yourself to an mp3 once a month (arguably a charitable donation in the age of file sharing). side note: i use both of these strategies to get the 12 debit card transactions per month required by my kasasa checking account.",
"title": ""
},
{
"docid": "30d55c1e0d1dd8e52071f99a9f67d620",
"text": "\"I agree with the rest of the answers -- you're probably better off just using it for some predictable flat-rate recurring monthly service like NetFlix, or making a charitable donation if you're into that sort of thing. But since that wasn't what you asked, I'll try to provide an answer: If you don't mind throwing away money, send money to yourself using PayPal. Here's how: Set up a PayPal Business Account, and use your personal PayPal account to send funds to it by setting up a PayPal subscription. PayPal says \"\"You can have one Consumer account and one Business account.\"\" A PayPal Payments Standard business account has no monthly fee -- only transaction fees. According to PayPal, \"\"in order to set up a repeating payment, [you] would need to create a Subscription or Recurring Payments button from the Merchant Services tab\"\" (in the Business Account). You would then click the link/button to set up the subscription from your personal PayPal account, to make it send money to your Business account on an automatic schedule. You can then, at your own leisure, send the money back to your personal account without paying a second transaction fee, then finally send it back to your bank account. Or, if your bank account is not yet tied to your personal account, you can tie it to the business account instead, and deposit the funds into your bank account. Unfortunately, this step can't be automated. Again, to reiterate, you're much better off just using it for something recurring.\"",
"title": ""
},
{
"docid": "4b771389811e460bb373e4008ecb2256",
"text": "Putting money into your Amazon gift card balance is also a very convenient option, but I like these recurring Red Cross and Wikipedia ideas also.",
"title": ""
}
] |
[
{
"docid": "46b26494beacf4d3c775ea55659accb4",
"text": "\"If you enter the transactions as you execute them (and categorize them then), Quicken will attempt to Match downloaded transactions with ones already in the register. \"\"Memorized transactions\"\" with known parties can also help. My credit card downloads actually come with a rough categorization provided by the vendor; that may or may not be accurate enough to save you some work.\"",
"title": ""
},
{
"docid": "580d7128f24e08befbe78bf7c0f80f29",
"text": "Essentially speaking, when you purchase goods worth $100 using your card, the store has to pay about $2 for the transaction to the company that operates that stores' credit card terminal. If you withdraw cash from an ATM, you might be charged a fee for such a transaction. However, the ATM operator doesn't pay the credit processor such a transaction fee - thus, it is classified as a cash transaction. Additionally, performing cash advances off a CC is a rather good indicator of a bad financial health of the user, which increase the risk of default, and in some institutions is a factor contributing to their internal creditworthiness assessment.",
"title": ""
},
{
"docid": "768d911368643c7cf2504b6ef63a28b4",
"text": "The technical feature exists to (1)block all ACH activity, (2)block all ACH credits, or (3)block all ACH debits attempting to post to the deposit account. The large financial institutions will not deviate from their company policies and won't offer something like this for a personal account. The smaller institutions and credit unions are much more willing to discuss options. Especially if you maintain a large deposit balance or have many products with the institution, you might convince them this feature is very important and insist they block all ACH activity on your account. This feature is used frequently on controlled asset accounts where the balance must be frozen for a variety of reasons.",
"title": ""
},
{
"docid": "73851022abdb3f0a43549072dcdda4a5",
"text": "This really should be a comment, but I can't yet. The question desperately needs a location tag. In at least some countries(New Zealand), the default action on all insufficient funds transactions is to refuse the transaction. Credit cards are the only common exception. Every bank operating in NZ that I know of acts this way. Sometimes there is a fee for bouncing a transaction, sometimes not, that depends on the bank. Any other option must be explicitly arranged in writing with the bank. Personally, coming from a country where declining transactions is the default, I'd be shocked and angry to be stuck with an automatic transfer from another account. Angry enough to change banks if they won't immediately cease and desist.",
"title": ""
},
{
"docid": "de2025b241f8fe7e14defc87ce78a3fd",
"text": "\"One key point that other answers haven't covered is that many credit cards have a provision where if you pay it off every month, you get a grace period on the interest. Interest doesn't accrue at all unless you rollover a non-zero balance. But if you do, you pay interest on the average balance, not the rolled-over balance, for the entire month. You have to ask yourself what you are trying to accomplish with your credit history? Are you trying to maximize your \"\"buying power\"\" (really, leverage)? Or are you trying to make sure that you get the best terms on a moderately sized loan (house mortgage, car note)? As JohnFx and losthorse already noted, it's in the banker's best interest to maximize the profit they make off of you. Of course, that is not in your best interest. Keeping a credit card balance from month to month definitely feeds the greedy nature of the financing beast. And makes them willing to take more risks, because the returns are also higher. But those returns cost you. If you are planning to get sensible loans in the future, that you can comfortably afford, you won't need a maxed credit score. You won't get the largest loan amounts, but because you are doing the sensible thing and making a large down payment, the risk is also very low and you'll find lenders willing to give you a low interest rate. Because even though the reward is lower than the compulsive purchaser who pays an order of magnitude more in financing fees, the return/risk ratio is still very favorable to the bank. Don't play the game that maximizes their return. That happens when you have a loan of maximum size, high interest rate, and struggle to make payments, end up missing a couple and paying late fees, or request forbearance which compounds the interest. Play to minimize risk.\"",
"title": ""
},
{
"docid": "b251bd183b378842ff6da7ed601a96b7",
"text": "\"In the US, if your monthly statement was issued by the credit card company on January 1 and it showed a balance of $1000, then a payment must be made towards that balance by January 25 or so, not February 1 as you say, to keep the card in good standing. The minimum payment required to keep the card in good standing is specified in your monthly statement, and failure to meet this requirement can trigger various consequences such as an increase in the interest rate charged by the credit card company. With regard to interest charges, whether your purchase of $2000 on January 3 is charged interest or not depends entirely on what happened the previous two months. If you had paid both your monthly statements dated November 1 and December 1 of the previous year in full by the their respective due dates of November 25 and December 25, and the $1000 balance on the January 1 statement is entirely due to purchases (no cash advances) made in December, then you will not be charged interest on your January purchase of $2000 as long as you pay it off in full by February 25 (the charge will appear on your February 1 statement). But, if you had not paid your December 1 statement in full by December 25, then that $1000 billed to you on January 1 will include purchases made during December finance charges on the unpaid balance from the previous month plus finance charges on the purchases made during December. The finance charges will continue to accumulate during January until such time as you pay off the bill in full (these charges will appear on your February 1 statement), hopefully by the due date of January 25. But even if you pay off that $1000 in full on January 25, your charge of $2000 on January 3 will start to accumulate finance charges as of the day it hits the account and these finance charges will appear on your February 1 statement. If you paid off that $1000 on January 10, say, then maybe there will be no further finance charges on the $2000 purchase on January 3 after January 10 but now we are getting into the real fine print of what your credit card agreement says. Ditto for the case when you pay off that $1000 on January 2 and made the $2000 charge on January 3. You most likely will not be charged interest on that $2000 charge but again it depends on the fine print. For example, it might say that you will be charged interest on the average of the daily balances for January, but will not be charged interest on purchases during the February cycle (unless you miss the February 25 payment and the whole cycle starts all over again). As a general rule, it takes two monthly cycles of payment in full by the due date before one gets into the state of no finance charges for new purchases and effectively an \"\"interest-free\"\" loan of $2000 from January 3 (date of purchase) till February 25 (due date of payment). Matters become more complicated when cash advances are taken from a credit card which are charged interest from the day they are taken but don't trigger finance charges on new purchases or the so-called \"\"zero percent balance transfer offers\"\" are accepted.\"",
"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": "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": "9ce484d7657417c8078f20d1c5295f04",
"text": "Since the POS machines are tied into the register it would be rather difficult to overcharge with an attentive patron. They would have to add an additional item onto the purchase in order to increase the total before running the card (very few system allow cashback to be requested from the teller side), and most machines have audible cues every time an item is added. If you are paying attention to the teller and not talking/playing on your phone (or other distracting things) then I would say the feasibility is probably very low. Except for rare exceptions while traveling I only shop at locations where I can see the total on the register, and make sure it looks correct before handing my card over.",
"title": ""
},
{
"docid": "777609ebf107f439f7d88abfd8f47406",
"text": "\"In the end, all these fees hurt the average consumer, since the merchant ultimately passes cost to consumer. Savvy consumers can stay at par or get ahead, if they put in the effort. It's a pain, but I rotate between 4 cards depending on time of year and type of purchase, to optimize cash back. My cards are: 1. 5% rewards card on certain categories, rotates each quarter 2. 2% travel/dining card (fee card, but I travel a bunch so it's worth it, no foreign transaction fees) 3. 1.5% rewards card for everything else 4. Debit card (swiped as a CC) for small purchases (i.e. lunches) at credit union for \"\"enhanced\"\" high interest checking account, requiring certain # swipes/month. This alone returns to me ~$800/yr.\"",
"title": ""
},
{
"docid": "9c94d24ea670df4c1baf45394ac352fa",
"text": "some of that article is misleading, some of it is just plain wrong. Very wrong... like you end up drawing an incorrect conclusion type wrong. Corporate transaction accounts, whose balances are up recently due to TAG (expires 12/31), are subject to reserve requirements. When you purchase something with a credit card, the bank's asset of your credit increases and the bank's asset of cash decreases (it goes wherever you purchased). There is no change to your deposit account and no change to reserves. The incoming bank's cash account and liability account associated with that business transaction account increase, and it is trivial to transfer the % of cash necessary to reach minimum reserve requirements to the Fed. Secondly, anyone with a smidgen of accounting can tell that his balance sheet won't balance.",
"title": ""
},
{
"docid": "ed46c50e9037426f041b572817397ecf",
"text": "I believe there are electronic exchanges that run continuously, but the older ones don't want to change their practices since some people may have strategies which (claim they) are based on this behavior so there would be a lot of unhappy people if it was altered. The pause doesn't seem to do any harm. There are alternatives if you dislike it. Don't try to fix what isn't broken.",
"title": ""
},
{
"docid": "f931ffbcca461114ddcc1a06355f63b4",
"text": "No, they do this to change behavior by providing a disincentive (the stick) - $2 fee - on something they want their customers to do less of. In this case, they want everyone to sign up for automatic billing via CC or bank transfer. Their mistake was to not combine this with a positive incentive (the carrot) on the behavior they want more of. In this case, they should have promised a $2 monthly discount for the first year for customers who switch to automatic billing.",
"title": ""
},
{
"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": "c4c73d42a968f194ea662dec8eeda100",
"text": "The main risk I see to this plan is with a late payment to your credit card. For a variety of reasons, some outside your control, you could end up with a late payment on the CC and a +18% interest rate making your arbitrage attempts unprofitable. You sense that this is risky, and it derives from placing short-term risk on a long term asset. Your interest rate is high for the current market. What kind of things can you do reduce that rate? What kind of things can you do to reduce your principle? Those kind of things represent far less risk and accomplish the same goal.",
"title": ""
}
] |
fiqa
|
7a10c24f58e88c125bc689905ccd34e9
|
Are stores that offer military discounts compensated by the government?
|
[
{
"docid": "5419b5d99a25ab6ee6fa2ee99b2fda05",
"text": "Company X located outside a military base offer discounts to military as a form of marketing. They want to encourage a group of potential customers to use their store/service. In some cases they are competing with subsidized store on the base. In other cases their only competition is other stores outside the base. The smart ones also understand the pay structure of military pay to make it easier for enlisted to stretch their money for the entire month. The government doesn't offer compensation to the business near bases. The businesses see their offer and discount as advertising expenses, and are figured into the prices they have to charge all customers. You will also see these types of discounts offered by some businesses in college towns. They are competing with the services on the campus and with other off-campus businesses. Some also allow the use of campus dollars to make it easier for the student to spend money.",
"title": ""
},
{
"docid": "3ea4c5bd8120958f2633315894b70acd",
"text": "Nope, only base commissaries or BX/PX's are subsidized. The rest is just done for goodwill/marketing purposes.",
"title": ""
},
{
"docid": "3cc88a19828747e9b42f464be2179a3d",
"text": "This story is about military grocery stores - i.e.: grocery stores for military personnel on military bases. There are no discounts for military personnel in a regular grocery store. But they may have subsidised prices in grocery stores located inside a military installation, and these are those stores that the story is talking about.",
"title": ""
}
] |
[
{
"docid": "3b36305cf5bd1204e47a99690160c354",
"text": "The vendor needs to do this using apportionment, according to the VAT rules for mixed supplies: If you make mixed supplies and the individual supplies are not liable to VAT at the same rate then you need to work out the tax value of each supply in order to calculate how much tax is due. If the tax value is based on the total price you charge (see paragraph 7.3) you do this by splitting that price between the supplies. This is called an apportionment ... There is no special method of apportionment ... However, your calculations must be fair and you must be able to justify them. It is usually best to use one of the methods shown in section 32. The section 32 referred to really relates to apportioning use between business and non-business purposes, but it implies that splitting up the total price in proportion to the original prices would probably be fair. So in your example the vendor might split the £5 discount equally between the spoon and the carrycot as they had the same gross cost, and pay VAT as if each had cost £7.50 gross. The vendor could also do it in proportion to their net (pre-VAT) prices and thus apportion a bit more of the discount to the carrycot than the spoon, but as this would lead to them paying slightly more tax overall they probably wouldn't choose to. However, none of this is likely to be too relevant to a consumer, since in the UK prices must be presented as the gross (VAT-inclusive) amounts and so the discounts will also apply to those amounts. It will of course affect how much of the purchase price the vendor ends up paying on to the government and thus might indirectly affect what discounts the vendor is willing to offer.",
"title": ""
},
{
"docid": "27c36d33072f1f3c03abebb2b95e40c9",
"text": "\"Yes. \"\"There is, ...no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.\"\" Taken from the US Department of the Treasury.\"",
"title": ""
},
{
"docid": "587515473167c699e207b1b0223ac9a7",
"text": "Some companies offer discounts for shareholders. I believe Disney used to do so, for example; if your family was doing the Disneyland-every-year routine that could be a significant benefit.",
"title": ""
},
{
"docid": "c31a3227567e200c6833277d01c6a8c5",
"text": "Yeah, that's the problem fuck-0. Walmart makes tons of money in profit and their employees are using state benefits. This isn't a problem for you? The government is subsidizing walmarts employee benefits. In other words we are socializing walmarts losses and walmart is privatizing their gains.",
"title": ""
},
{
"docid": "e6d424c1dc7a5cfa5ecc510e1fd6c9c9",
"text": "\"Welcome to America! This country is not meant to be a free ride. I personally (single, \"\"native\"\" male) pay a significant amount each year to Uncle Sam and receive no benefits at all. Where do \"\"natives\"\" sign up for the free stuff?!\"",
"title": ""
},
{
"docid": "90753069d6f5cf4ef352e28770c22fca",
"text": "I applaud all forms of tax evasion. Considering that taxation is nesesary for on-going war, it's highly immoral to pay your taxes. It will only lead to death. However, it sounds like they're paying lots of taxes. 46 + 11.7 = 57.7% How is that a loophole? Sounds like they're getting shellacked.",
"title": ""
},
{
"docid": "aca17aa68b38ca7ef1beabd9752cf44b",
"text": "Maybe but would it be ruined if that 10% was merely moved from DoD money to funding local businesses or something? The downside of defense funding is that even if it provides jobs, it's not self sustainable, whereas if you used that money to fund startups/local businesses, those things could potentially eventually grow or at least not require additional funding. Then your city would not require outside funding to survive which is even better no?",
"title": ""
},
{
"docid": "fcbf762f2bd16440bc83a5320a6dfc65",
"text": "Lots of places in the US do it. Although the way that they usually phrase it is 'prices reflect a x.x% discount for cash' since most of the credit card companies have an agreement that says you cannot charge a surcharge if someone is using a credit card. So they get around it by giving a discount for cash. effect is the same, but it skirts the letter of the agreement",
"title": ""
},
{
"docid": "0e151c1cbf2497a78b250d5bf908a283",
"text": "Stupid article. People on government assistance typically don't have a great deal of money to begin with, and there aren't exactly many items on Amazon that are at 'dollar store' level prices..and unless one is house-bound level of disabled, you really can't fill a whole grocery list by shopping at Amazon as you could running down to Walmart or Save a Lot.",
"title": ""
},
{
"docid": "189af17bb561308c0e9af7c8c6b7990a",
"text": "\"Wireless capabilities see Nikola tesla every type of communication outside of the walkie talkie really was created without the government. So the fact that i was born here against my own free will automatically gives the government the right to seize the fruits of my labor? This is where this bullshit statist logic falls apart because the only rebuttal you have is \"\"well just leave then!\"\" Which is fucking stupid and in pretty sure I already gave you 1 way but I'll say it again cuz it's clear you're incapable of following along, federal sales tax. With federal sales tax there are no deductions or coercion. Also the more money individuals have in their pocket (disposable income) the more likely they are to spend and grow the economy. That's why you see countries like Sweden with insane tax rates seeing limited growth and in a lot of cases on the verge of an economic collapse. So if people have more disposable income causing them to have more purchasing power a federal sales tax would probably do better than an income tax and the people would receive something tangible instead of just losing 25% of their pay check. Btw don't ever say my income tax pays for roads because they don't that's what a gas tax is for. A majority of our infrastructure is paid for with revenue from other taxes not income. Income taxes pay mostly into military budget and social programs ie social security\"",
"title": ""
},
{
"docid": "4238d8bca80b3137bfbbcc64c2c502c3",
"text": "So, the point of the article is that the taxpayers are making up for what Walmart isn't paying. But, walmart pays way more than what it's employees are using. Employees use government programs, Walmartpays more than double of the cost of those programs, so no cost at all is passed to the taxpayers. Walmart WOULD be evil if they didn't pay taxes. But they do. The article is nonsense. We get it. You don't like big business.",
"title": ""
},
{
"docid": "0895722089cb5cba4791e7a5430c58cc",
"text": "Sony has been doing this for years and nobody complains. But I do see the point, it keeps companies like WalMart and Best Buy from destroying small businesses. Ohio does the same thing with beer and cigarrette prices.",
"title": ""
},
{
"docid": "b85c369867a2a52513878d8ffb159c5c",
"text": "Most people have no problem paying for schools, millitary, or other socially optimizing externalities. People do have a problem with paying for free rides for others, where only the person receiving the benefits gains anything and everyone else has to pay the bill.",
"title": ""
},
{
"docid": "b77d828f6613f0ab429d1616150c616f",
"text": "They are entitled to a benefit for things for survival, This is not a UBI. If they have enough food to be giving it away, the system isn't working properly. You think because they're (the abusers of the system) are being a useless member of society that they are entitled to have these benefits, which legally they are, but this should not be a long term solution for millions of people, which it is. Are we talking about a small amount of people, from what google says its a pretty big issue. We have a military, start your own rant thread about that if you want to talk about that or better yet, go join the military and fix it from the inside out.",
"title": ""
},
{
"docid": "2b5c54ff120afef635a7ccc6d9a68fda",
"text": "\"I think often times the personality traits that make founders so successful are the same traits that keep them from giving up control. By the time you've made it to the top of the mountain you've proven everyone who ever said \"\"do this\"\" wrong. So people saying \"\"step aside\"\" isn't going to do anything but convince you that you can prove them wrong again. It's easy to say \"\"put your ego to the side\"\" but when your stubbornness and smarts helped get you where you are, it's not easy to look inside yourself and say \"\"I'm not the best guy for this.\"\"\"",
"title": ""
}
] |
fiqa
|
af8dcb3e3ec29b019b5fe0d35395fc1c
|
Can I claim a tax deduction for working from home as an employee? I work there 90% of the time
|
[
{
"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": "f20fdd823286eba26d5f938c45710cd2",
"text": "Talk to a tax professional. The IRS really doesn't like the deduction, and it's a concept (like independent contractors) that is often not done properly. You need to, at a minimum, have records, including timestamped photographs, proving that: Remember, documentation is key, and must be filed and accessible for a number of years. Poor record keeping will cost you dearly, and the cost of keeping those records is something that you need to weigh against the benefit.",
"title": ""
},
{
"docid": "067252b5ff9ca4e62bf6ff506f4bd7cb",
"text": "The general rule is: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: Exclusively seems to be the toughest standard and I do not know exactly how strict the IRS's interpretation is. Working in your living room where you regularly watch TV and have people over on the weekends would seem to fail that test. A separate room with your computer in it would pass it. If it was your only computer and you regularly played online games with it, that would seem to be a grey area. The IRA booklet covering this area is here http://www.irs.gov/pub/irs-pdf/p587.pdf I know people that have rented rooms in other places or made use of rental offices for this purpose.",
"title": ""
},
{
"docid": "bb00d5b05640be0a5d62991982d1123f",
"text": "\"90% sounds like \"\"principal place of business\"\" but check these IRS resources to make sure.\"",
"title": ""
}
] |
[
{
"docid": "0a788c0d227d60e290dc71775c247243",
"text": "Yes, you've summarized it well. You may be able to depreciate your computer, expense some software licenses and may be home office if you qualify, but at this scale of earning - it will probably not cover for the loss of the money you need to pay for the additional SE tax (the employer part of the FICA taxes for W2 employees) and benefits (subsidized health insurance, bonuses you get from your employer, insurances, etc). Don't forget the additional expense of business licenses, liability insurances etc. While relatively small amounts and deductible - still money out of your pocket. That said... Good luck earning $96K on ODesk.",
"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": "f4dba2c23b145778cc2cb1c1b0f88da9",
"text": "\"About deducting mortgage interest: No, you can not deduct it unless it is qualified mortgage interest. \"\"Qualified mortgage interest is interest and points you pay on a loan secured by your main home or a second home.\"\" (Tax Topic 505). According to the IRS, \"\"if you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.\"\" Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, \"\"The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.\"\" (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these cannot be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read the official publications and get professional tax advice. Here's an excerpt from Publication 856 - Foreign Tax Credit for Individuals: \"\"In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040).\"\" Note and disclaimer: Sources: IRS Tax Topic 505 Interest Expense, IRS Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) , IRS Topic 514 Foreign Tax Credit , and Publication 856 Foreign Tax Credit for Individuals\"",
"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": "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": "3896f5c8a977bf07584f1f0f1d93cbd6",
"text": "\"Yes and no. You can not claim the maid service cleaning your \"\"home\"\" but you can cleaning your \"\"office\"\" or your office's facilities. For example, If you have a mother-in-law suite in the back that you converted to an office, AND you have a maid service cleaning just that, THEN you should be able to claim the expense. Another example would be if you have a room in your house set aside as an office (careful here) AND your maid services charges $20 per room, you should be able to claim that $20. Another example; if you have a maid service that charges you $100 to clean your house, AND you have a dedicated office in that house, THEN you may be claim a portion of your expenses as a business expense. HOWEVER!!!! This can be very subject to your situation. For example, your much more likely to meet the criteria if you have clients in your office. Much less likely if your the only person using the office. Also you need to be aware that what the IRS allows you to call an office is not as clear cut as it seems. Your best bet is to ask a tax consultant.\"",
"title": ""
},
{
"docid": "15a68028202202a61ad5b69ba02c6f16",
"text": "Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.",
"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": "f06119600d3aea07f3eb0978ad02434e",
"text": "You would report it as business income on Schedule C. You may be able to take deductions against that income as well (home office, your computer, an android device, any advertising or promotional expenses, etc.) but you'll want to consult an accountant about that. Generally you can only take those kinds of deductions if you use the space or equipment exclusively for business use (not likely if it's just a hobby). The IRS is pretty picky about that stuff.",
"title": ""
},
{
"docid": "ce475229839fec15efb664cd7ad7ac50",
"text": "Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense.",
"title": ""
},
{
"docid": "3a6c8b85bac2aa40c815d4671c636b1d",
"text": "Another thing to consider, however, is the deductibility of business expenses. Let's assume that the employer can legitimately hire you as a 1099 contractor. (Would you be able to telecommute? Would you have a high degree of control over when you worked and when you didn't? These factors also affect whether you're a true independent 1099 contractor or not.) As a legit 1099 contractor, you're able to deduct certain business expenses directly from your income. (You can find a list of the rules at irs.gov.) As a W2 employee, by contrast, can deduct only business expenses that exceed 2% of the your AGI (adjusted gross income). So, you also have to consider your personal circumstances in making the calculus and comparing whether a legitimate 1099 contractor job is or is not good for you. It's not just a comparison of what they'd pay W2 employees versus what they'd pay 1099 contractors.",
"title": ""
},
{
"docid": "c0ef4d13dfaa846438737e60324406ab",
"text": "Yes you can claim your business deductions if you are not making any income yet. But first you should decide what structure you want to have for your business. Either a Company structure or a Sole Trader or Partnership. Company Structure If you choose a Company Structure (which is more expensive to set up) you would claim your deductions but no income. So you would be making a loss, and continue making losses until your income from the business exceed your expenses. So these losses will remain inside the Company and can be carried forward to future income years when you are making profits to offset these profits. Refer to ATO - Company tax losses for more information. Sole Trader of Partnership Structure If you choose to be a Sole Trader or a Partnership and your business makes a loss you must check the non-commercial loss rules to see if you can offset the loss against your income from other sources, such as wages. In order to offset your business losses against your other income your business must pass one of these tests: If you don't pass any of these tests, which being a start-up you most likely won't, you must carry forward your business losses until an income year in which you do pass one of the tests, then you can offset it against your other income. This is what differentiates a legitimate business from someone having a hobby, because unless you start making at least $20,000 in sales income (the easiest test to pass) you cannot use your business losses against your other income. Refer to ATO - Non-commercial losses for more information.",
"title": ""
},
{
"docid": "be257fcb0ae0253e58681c0f96f3d63a",
"text": "\"The answer is \"\"Yes\"\", You can deduct them. As long as you showed that you put in effort to make a profit then you can deduct business expenses.\"",
"title": ""
},
{
"docid": "b7e451ff517411ed28490bc8763abde4",
"text": "This is essentially a reimbursement of your expense. Since you can deduct the expense, the fact that the reimbursement is taxable doesn't affect you much. You deduct your home office expenses on your annual tax return using form 8829. See the IRS site for more details. If you're asking about the UK tax, there may be some other considerations, but from the US tax perspective it is (nearly) a wash.",
"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": ""
}
] |
fiqa
|
454dfc10cdb8876e567f36971188a50e
|
Do I need to pay quarterly 1040 ES and 941 (payroll)?
|
[
{
"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": "a3536cc618e291ed7fa8cd499d035587",
"text": "I'm not sure why you're confusing the two unrelated things. 1040ES is your estimated tax payments. 941 is your corporation's payroll tax report. They have nothing to do with each other. You being the corporation's employee is accidental, and can only help you to avoid 1040ES and use the W2 withholding instead - like any other employee. From the IRS standpoint you're not running a LLC - you're running a corporation, and you're that corporation's employee. While technically you're self-employed, from tax perspective - you're not (to the extent of your corporate salary, at least).",
"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": "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": "011fde1f94f514677efa1a3f3709b0eb",
"text": "\"The annualized method allows you to take a look at each quarter independently and pay the tax in the quarter that you earned it. -- According to Linda Durand, a certified public accountant with Drolet & Associates PLLC in Washington, D.C., from the Bankrate article \"\"Paying quarterly estimated taxes\"\" And after paying annualized quarterly estimates, you can still owe up to $1000 at tax time without penalty.\"",
"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": "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": "6ef443450b7a2e0334cec2673e52f06d",
"text": "\"You would put your earnings (and expenses, don't forget) on Schedule C, and then do a Schedule SE for self-employment tax. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html 1040ES isn't used to compute taxes, it's used to pay taxes. Generally you are supposed to pay taxes as you go, rather than when you file. There are exceptions where you won't be penalized for paying when you file, \"\"most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller\"\" from http://www.irs.gov/taxtopics/tc306.html i.e. there's a safe harbor as long as you pay as much as you owed the year before. If you owe a lot at the end of the year a second time in a row, then you get penalized.\"",
"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": "eebfd26667517727702aaec038ea12a4",
"text": "\"You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will \"\"interview\"\" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.\"",
"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": "2f73770a2da33ab40245475e5bc5ee82",
"text": "\"You may want, or at least be thinking of, the annualized method described in Pub 505 http://www.irs.gov/publications/p505/ch02.html#en_US_2015_publink1000194669 (also downloadable in PDF) and referred to in Why are estimated taxes due \"\"early\"\" for the 2nd and 3rd quarters only? . This doesn't prorate your payments as such; instead you use your income and deductions etc for each of the 3,2,3,4-month \"\"quarters\"\" to compute a prorated tax for the partial year, and pay the excess over the amount already paid. If your income etc amounts are (nearly) the same each month, then this computation will result in payments that are 3,2,3,4/12ths of 90% of your whole-year tax, but not if your amounts vary over the year. If you do use this method (and benefit from it) you MUST file form 2210 schedule AI with your return next filing season to demonstrate that your quarterly computations, and payments, met the requirements. You need to keep good per-period (or per-month) records of all tax-relevant amounts, and don't even try to do this form by hand, it'll drive you nuts; use software or a professional preparer (who also uses software), but I'd expect someone in your situation probably needs to do one of those anyway. But partnership puts a wrinkle on this. As a partner, your taxable income and expense is not necessarily the cash you receive or pay; it is your allocated share of the partnership's income and expenses, whether or not they are distributed to you. A partnership to operate a business (like lawyers, as opposed to an investment partnership) probably distributes the allocated amounts, at least approximately, rather than holding them in the partnership; I expect this is your year-end draw (technically a draw can be any allowed amount, not necessarily the allocated amount). In other words, your husband does earn this money during the year, he just receives it at the end. If the year-end distribution (or allocation if different) is significant (say more than 5% of your total income) and the partnership is not tracking and reporting these amounts (promptly!) for the IRS quarters -- and I suspect that's what they were telling you \"\"affects other partners\"\" -- you won't have the data to correctly compute your \"\"quarterly\"\" taxes, and may thus subject yourself to penalty for not timely paying enough. If the amount is reasonably predictable you can probably get away with using a conservative (high-side) guess to compute your payments, and then divide the actual full-year amounts on your K-1 over 12 months for 2210-AI; this won't be exactly correct, but unless the partnership business is highly seasonal or volatile it will be close enough the IRS won't waste its time on you. PS- the \"\"quarters\"\" are much closer to 13,9,13,17 weeks. But it's months that matter.\"",
"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": "c7b3e7692fed18720326764c41804733",
"text": "I'm assuming your talking USA. There are two ways to look. If you know you should pay on the cap gains, the best way to handle that separately from your salary is to file a quarterly tax payment. That, I understand, is what the self-employed have to do. I'm in the situation where at some point, probably this year, the company that employs me will be bought out, and I will owe capital gains taxes on my shares gobbled up in the buy-out. It's a cash-for-stock transaction. So, in my case, I've just adjusted my W-4 to take advantage of the safe-harbor provision related to taxes I payed in 2016 and my salary. The details vary depending on your situation, but in my case, I've calculated what it will take in W-4 allowances to make sure I pay 110% of my 2016 tax payment (after refund). I'm not worrying about what the actual taxes on those shares of company stock will be, because I've met the rules for safe-harbor. Safe harbor just means that they can't penalize you for under-withholding or underpayment. It doesn't mean I won't have to write a check on april 15.",
"title": ""
},
{
"docid": "904dbe1fdaa1a1fc7f4f79339bfd05a6",
"text": "My understanding (I've never filed one myself) is that the 1040ES is intended to allow you to file quarterly and report unpredictable income, and to pay estimated taxes on that income. I was in the same sort of boat for 2016 -- I had a big unexpected income source in 2015, and this took away my Safe Harbor for 2016. I adjusted my w-2 to zero exemptions (eventually) and will be getting a refund of about 1% of our income. So lets say you make 10000 in STG in March, and another 15000 in STG in April. File a quarterly 1040-ES between March 31 and April 15. Report the income, and pay some tax. You should be able to calculate the STCG Tax for 10k pretty easily. Just assume that it comes off the top and doesn't add at all to your deductions. Then for April, do the same by June 15. Just like your W-2 is used to estimate how much your employer should withhold, the 1040ES is designed to estimate how much extra you need to pay to the IRS to avoid penalties. It'll all get resolved after you file your final 1040 for the 2017 calendar year.",
"title": ""
},
{
"docid": "734867313a623f2f57edf5c18acbae18",
"text": "Yes, you need to include income from your freelance work on your tax return. In the eyes of the IRS, this is self-employment income from your sole-proprietorship business. The reason you don't see it mentioned in the 1040EZ instructions is that you can't use the 1040EZ form if you have self-employment income. You'll need to use the full 1040 form. Your business income and expenses will be reported on a Schedule C or Schedule C-EZ, and the result will end up on Line 12 of the 1040. Take a look at the requirements at the top of the C-EZ form; you probably meet them and can use it instead of the more complicated C form. If you have any deductible business expenses related to your freelance business, this would be done on Schedule C or C-EZ. If your freelance income was more than $400, you'll also need to pay self-employment tax. To do this, you file Schedule SE, and the tax from that schedule lands on form 1040 Line 57.",
"title": ""
},
{
"docid": "077e69dfbbb8d8112c446114db179a4c",
"text": "As a nonresident sole proprietor or partnership You are not a sole proprietor or a member of a legal partnership. You are an employee for a corporation. Does the nature of your work require you to be present in New York regularly? If you are in New York for personal reasons, you are simply telecommuting. You must pay taxes personally for your W-2 income, but your business entity never moved from Wyoming. If this were not true, companies would have to pay corporate income tax to every state in which they have a telecommuter. For example, I live in Florida but telecommute to a company in Michigan. Does my employer pay Florida business tax? Of course not. Your business would only owe New York if the nature of the business requires a consistent and regular business presence in New York, such as maintaining an office for a portion of every year so clients could see you.",
"title": ""
},
{
"docid": "979150f0ed4d6e0a2bded0486e3ed0a7",
"text": "\"They aren't actually. It appears to be a low interest rate, but it doesn't cover their true cost of capital. It is a sales tactic where they are raising the sticker price/principal of the car, which is subsidizing the true cost of the loan, likely 4% or higher. It would be hard to believe that the true cost of a car loan would be less than for a mortgage, as with a mortgage the bank can reclaim an asset that tends to rise in value, compared to a used car, which will have fallen in value. This is one reason why you can generally get a better price with cash, because there is a margin built in, in addition to the fact that with cash they get all their profit today versus a discount of future cash flows from a loan by dealing with a bank or other lending company. So if you could see the entire transaction from the \"\"inside\"\", the car company would not actually be making money. The government rate is also so low that it often barely covers inflation, much less operating costs and profit. This is why any time you see \"\"0% Financing!\"\", it is generally a sales tactic designed to get your attention. A company cannot actually acquire capital at 0% to lend to you at 0%, because even if the nominal interest rate were 0%, there is an opportunity cost, as you have observed. A portion of the sticker price is covering the real cost, and subsidizing the monthly payment.\"",
"title": ""
}
] |
fiqa
|
468edc5395eb0b4b8c58f70c24f6c03e
|
Using a self-directed IRA to buy vacation condo, rent it out to an LLC for $1
|
[
{
"docid": "979881b8e14f0b7ad3e0320c744d9129",
"text": "\"Self directed IRAs have rules to prevent self-dealing of this sort called \"\"prohibited transactions\"\". You can't buy or sell or lease assets or obtain services from anyone closely linked to you or any beneficiaries of the IRA. You can't loan yourself money from the IRA, and you can't deliberately take the proceeds that should be going to your self directed IRA and give them to another account that you own.\"",
"title": ""
},
{
"docid": "6717866315a55e750928ea6245ad3f8b",
"text": "I don't quite understand your thought process here. First, in a tax-advantaged retirement account you are NOT allowed to engage in a transaction with yourself. If you just want to run a business and be able to write off expenses, how is using the self-directed IRA relevant? You can either buy the condo using your tax-advantaged account and rent it out to regular tenants. Or you buy the condo yourself using your own money and then operate your business so you can deduct business expenses from doing so. 401k's allow you to take a loan out of it, so you can look into that as well.",
"title": ""
}
] |
[
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "49af7aa1976b53feba7306586aa787c1",
"text": "You may be able to, depending on what state you're in, but it is going to be 10x more complicated than just forming a new LLC. I don't see an advantage to this approach - if you're imagining it will be cheaper, you are imagining wrong.",
"title": ""
},
{
"docid": "18a41c6e82cb828cc6beeb5ccba6f277",
"text": "\"With a healthy income its quite possible to contribute too much into 401Ks/IRAs. For example, if your retired today and had 3 million or so, how much more would you need? Would an extra million materially change your life? Would it make you happier if you invested that extra in some rental properties or perhaps a business like a sandwich or ice cream shop where you have more direct control? This kind of discussion is possible as you indicate that you have taken care of your life financially. It seems at odds with the negative press describing the woefully condition of the standard person's finances. These articles ignore a very simple fact: its because of bad behavior. You, on the contrary, have behaved well and are in the process of reaping rewards. This is where I feel your \"\"mental gymnastics\"\" originates. Looking to engage in the rental market is no different then buying a franchise. You are opening a business of your own. You'll have to educate yourself and are likely to make a few mistakes that will cause you to write checks to solve. Your goal is to minimize those mistakes. After all, what do you know about the rental home business? I am guessing not much. Educate yourself. Read and spend some money on taking knowledgeable people out for coffee. In the end you should understand that although a poor decision may cost you money you cannot really make a bad decision. Lets say you do buy a rental property, things go south, you sell for a loss, etc.... In the end the \"\"butchers bill\"\" is 50K or so. Will that materially change your life? Probably not. The worst case is perhaps you have to work a year or two beyond the anticipated retirement age to make up that money. No big deal.\"",
"title": ""
},
{
"docid": "5768adeca0219e72d67ccb5dbb924ded",
"text": "Immediately move your Roth IRA out of Edward Jones and into a discount broker like Scottrade, Ameritrade, Fidelity, Vanguard, Schwab, or E-Trade. Edward Jones will be charging you a large fraction of your money (probably at least 1% explicitly and maybe another 1% in hidden-ish fees like the 12b-1). Don't give away several percent of your savings every year when you can have an account for free. Places like Edward Jones are appropriate only for people who are unwilling to learn about personal finance and happy to pay dearly as a result. Move your money by contacting the new broker, then requesting that they get your money out of Edward Jones. They will be happy to do so the right way. Don't try and get the money out yourself. Continue to contribute to your Roth as long as your tax bracket is low. Saving on taxes is a critically important part of being financially wise. You can spend your contributions (not gains) out of your Roth for any reason without penalty if you want/need to. When your tax bracket is higher, look at traditional IRA's instead to minimize your current tax burden. For more accessible ways of saving, open a regular (non-tax-advantaged) brokerage account. Invest in diversified and low-cost funds. Look at the expense ratios and minimize your portfolio's total expense. Higher fee funds generally do not earn the money they take from you. Avoid all funds that have a nonzero 12b-1 fee. Generally speaking your best bet is buying index funds from Fidelity, Vanguard, Schwab, or their close competitors. Or buying cheap ETF's. Any discount brokerage will allow you to do this in both your Roth and regular accounts. Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market. Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios. The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way. At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off. Then rebalance back to a good portfolio. Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates. Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds. In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes. But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge.",
"title": ""
},
{
"docid": "31c5ac8c41c0019f73a79c19208dd61e",
"text": "Have you considered a self-directed IRA to invest, rather than the stock market or publicly traded assets? Your IRA can actually own direct title to real estate, loan money via secured or unsecured promissory notes much like a hard money loan or invest into shares of an entity that invests in real estate. The only nuance is that the IRA holder is responsible for finding and deciding upon the investment vehicle. Just an option outside of the normal parameters, if you have an existing IRA or old 401(k) or other qualified plan, this might be an option for you.",
"title": ""
},
{
"docid": "a11b3faa4f2d442093ab3f4f0a497ccc",
"text": "\"If your meaning of \"\"asset protection\"\" is buying gold and canned food in the name of a Nevada LLC because some radio guy said so, bad idea. For a person, if you have assets, buy appropriate liability limits with your homeowner/renter insurance policy or purchase an \"\"umbrella\"\" liability policy. This type of insurance is cheap. If you don't have assets, it may not be worth the cost of insuring yourself beyond the default limits on your renter's or homeowner's policy. If you have a business, you need to talk to your insurance agent about what coverage is appropriate for the business as a whole vs. you personally. You also need to talk to your attorney about how to conduct yourself so that your business interests are separated from your personal interests.\"",
"title": ""
},
{
"docid": "9a56cf08aa0055bd8866c3a1cc7284ba",
"text": "Our company does a lot of research on the self-directed IRA industry. We also provide financial advice in this area. In short, we have seen a lot in this industry. You mentioned custodian fees. This can be a sore spot for many investors. However, not all custodians are expensive, you should do your research before choosing the best one. Here is a list of custodians to help with your research Here are some of the more common pros and cons that we see. Pros: 1) You can invest in virtually anything that is considered an investment. This is great if your expertise is in an area that cannot be easily invested in with traditional securities, such as horses, private company stock, tax liens and more. 2) Control- you have greater control over your investments. If you invest in GE, it is likely that you will not have much say in the running of their business. However, if you invest in a rental property, you will have a lot of control over how the investment should operate. 3) Invest in what you know. Peter lynch was fond of saying this phrase. Not everyone wants to invest in the stock market. Many people won't touch it because they are not familiar with it. Self-directed IRAs allow you to invest in assets like real estate that you know well. Cons: 1) many alternative investments are illiquid. This can present a problem if you need to access your capital for withdrawals. 2) Prohibited transactions- This is a new area for many investors who are unfamiliar with how self-directed IRAs work 3) Higher fees- in many cases, the fees associated with self-directed IRA custodians and administrators can be higher. 4) questionable investment sponsors tend to target self-directed IRA owners for fraudulent investments. The SEC put out a good PDF about the risks of fraud with self-directed IRAs. Self Directed IRAs are not the right solution for everyone, but they can help certain investors focus on the areas they know well.",
"title": ""
},
{
"docid": "698111cd921bcfd014d15bcf5d87ae5c",
"text": "Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well.",
"title": ""
},
{
"docid": "740d8e0a2249a2c05d5a40d2d206cf3c",
"text": "I don't know if it's legal but your talking about arbitraging the rates between a personal savings account and a business account. I also don't know those rates but will venture to guess that they are not materially different, after taking into account the cost of setting up and registering an LLC, for it to be worth the time and effort.",
"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": "7d32f67dee90c90b21760138c97c9086",
"text": "\"especially considering it has a mortgage on it (technically a home equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the \"\"incorporate in Nevada/Delaware/Wyoming/Some other lie\"\" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is \"\"disregarded\"\" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance.\"",
"title": ""
},
{
"docid": "1d16f98c97eefb83c854f00d4257ee0b",
"text": "\"I'd be curious to understand where you live, with a condo costing nearly 3X the average home price in the US. That said, if you are hell bent on this, money is loosening up. I am a real estate agent, and part of my distaste for the industry is the fact that it is the near opposite of financial fiduciary. I am responsible to be truthful and act in the best interest of my client. I am specifically not allowed to offer tax or financial advice. A client that told me she had a prequalification, only later shared that she's using a 3% down, FHA mortgage, and from what I see, getting in over her head. In your case, look at the requirements for an FHA loan. I recommend 20% down, and the payment be less than 28% (Principal, interest, property tax) of monthly gross. The FHA allows as little as 3% down, with payment as high as 31%. In your case, $15K is 3%, and, depending on the other expenses for the house, the payment should be manageable. If your 401(k) accounts offer matching, I'd deposit the amount to capture the match, no more, no less. Let me illustrate the power of matching - say the match is on your first $10,000 total, between the 2 of you. $10,000 deposited, is $20,000 in your retirement account, and you are just out of pocket $7500, as that's your net after tax. Now, the $20K in the account allows you to borrow half, $10,000 at a favorable rate for a 10 year payback. So, to your question of raiding your retirement accounts, I'd advise the opposite. A $10K withdrawal will cost $2500 in tax and $1000 penalty. Net $6500. Better to take the IRA, transfer it to the 401(k), and borrow 50%. Your $40K across the accounts will let you borrow $20K and keep the retirement savings going. Last - I respect the answers that say \"\"don't,\"\" they are actually the right answers. Mine only applies if you won't listen to them. In effect, you've asked where to buy rope, and I'm just letting you know where the store is. It's the banks who are happy to sell you the rope to hang yourself.\"",
"title": ""
},
{
"docid": "8459f004f4e0af10ecbb3300600c0704",
"text": "\"First - for anyone else reading - An IRA that has no beneficiary listed on the account itself passes through the will, and this eliminates the opportunity to take withdrawals over the beneficiaries' lifetimes. There's a five year distribution requirement. Also, with a proper beneficiary set up on the IRA account the will does not apply to the IRA. An IRA with me as sole beneficiary regardless of the will saying \"\"all my assets I leave to the ASPCA.\"\" This is also a warning to keep that beneficiary current. It's possible that one's ex-spouse is still on IRA or 401(k) accounts as beneficiary and new spouse is in for a surprise when hubby/wife passes. Sorry for the tangent, but this is all important to know. The funneling of a beneficiary IRA through a trust is not for amateurs. If set up incorrectly, the trust will not allow the stretch/lifetime withdrawals, but will result in a broken IRA. Trusts are not cheap, nor would I have any faith in any attorney setting it up. I would only use an attorney who specializes in Trusts and Estate planning. As littleadv suggested, they don't have to be minors. It turns out that the expense to set up the trust ($1K-2K depending on location) can help keep your adult child from blowing through a huge IRA quickly. I'd suggest that the trust distribute the RMDs in early years, and a higher amount, say 10% in years to follow, unless you want it to go just RMD for its entire life. Or greater flexibility releasing larger amounts based on life events. The tough part of that is you need a trustee who is willing to handle this and will do it at a low cost. If you go with Child's name only, I don't know many 18/21 year old kids who would either understand the RMD rules on IRAs or be willing to use the money over decades instead of blowing it. Edit - A WSJ article Inherited IRAs: a Sweet Deal and my own On my Death, Please, Take a Breath, an article that suggests for even an adult, education on how RMDs work is a great idea.\"",
"title": ""
},
{
"docid": "d85a63af069d155338adc34e9ca37a60",
"text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"",
"title": ""
},
{
"docid": "64074a801b0f088a5d1880b455f1d083",
"text": "There are reward points that you have already mentioned. Some banks also give reward points for netbanking transfer, although very few and less than debit card. On a fraudulent site, debit card adds a layer, if compromised, easy to change. i.e just hot list the card, get a new card issued. Netbanking quite a few banks have incorrect implementation and difficult to change the login ID / User ID. The dispute resolution mechanism is well established as there is master or visa network involved. The ease of doing transaction is with netbanking as for card one has to remember 16 digits, expiry, cvv. The entire process of card usage is multiparty, on slow connection if something goes wrong, it takes 3 days to figure out. In netbanking it is instantaneous. You just login to bank and see if the debit has gone through.",
"title": ""
}
] |
fiqa
|
44b0eb78eb8c072351a7cdf032648cc6
|
How should I record invoices in foreign currency in GNUCash?
|
[
{
"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": "10578bd9fa925722e0c08f957486637d",
"text": "It depends upon in how many currencies your business is denominated. If your business is solely dependent upon this one payer, it's best to start up a new set of books in USD. All accounts should be translated from CAD from a date preceding the USD activity. The CAD books should be closed, and all should be done with the new USD books. If your business will continue to use both USD & CAD, it's best to have two sets of books, one for USD and one for CAD. Multi-currency books are a nightmare and should be avoided at all costs. Also, with the way you describe your situation, it appears as if you're also blending your household and business books. This should also be avoided for best practices.",
"title": ""
}
] |
[
{
"docid": "72b452624646db70ff1533aa27000710",
"text": "I haven't seen this answer, and I do not know the legality of it, as it could raise red flags as to money laundering, but about the only way to get around the exchange rate spreads and fees is to enter into transactions with a private acquaintance who has Euros and needs Dollars. The problem here is that you are taking on the settlement risk in the sense that you have to trust that they will deposit the euros into your French account when you deposit dollars into their US account. If you work this out with a relative or very close friend, then the risk should be minimal, however a more casual acquaintance may be more apt to walk away from the transaction and disappear with your Euros and your Dollars. Really the only other option would be to be compensated for services rendered in Euros, but that would have tax implications and the fees of an international tax attorney would probably outstrip any savings from Forex spreads and fees not paid.",
"title": ""
},
{
"docid": "d843bca1e943e85e1b0348c3812e7a6c",
"text": "\"GNUCash won't show 'Credit Card' type accounts in \"\"Process Payment\"\", as of v.2.6.1. A workaround is to create another account of type A/Payable. Then, transfer the operations you want to pay via \"\"Process Payment\"\" to this new account. It should be visible now. A drawback is that you have split your current Credit Card debt, which makes it harder to track. Alternatively you may wish to only use this new account for all your credit card related expenses. Another alternative is processing payments for these purchases manually to keep the 'credit card' accounts consistent.\"",
"title": ""
},
{
"docid": "ea5c5652e7b5488b676fca707598ad9b",
"text": "This started as a comment but then really go too long so I am posting an answer: @yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think. Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money. How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful. Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often. Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy. When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.) So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful.",
"title": ""
},
{
"docid": "8b2553ca379034c58a9b65547529cb50",
"text": "\"Amount is the closest single word. \"\"Amount in dollars\"\" would be the easiest way to specify information you are requesting. \"\"Amount and currency\"\" if you ware in an area using multiple currencies. An accountant might be able to give you a more technical term, but it would be accountancy jargon. Amount due, credit amount, debit amount, amount deposited, amount credited, amount withdrawn, or amount included. If you're writing instructions and want to specify that the person following the instructions needs to indicate the currency, you'll probably have to simply state that requirement. Based on US centric thinking, inside the US, money is dollars, dollars is money. For US citizens outside the country, we would always tack on the currency. 100 dollars, or 100 Euro. There is a segment of Americans who do not understand geography, and that other countries exist, and that they use different currencies, might not realize that other countries have currencies named dollars, and that USD means US Dollars. So for U.S. citizens, be specific and clear. Bottom line, if this is written for US residents, and they need to specify the currency, you need to explicitly require them to \"\"List the amount and currency.\"\"\"",
"title": ""
},
{
"docid": "c673ccd11ad9d1f7ff188d2f48f926e3",
"text": "How can I correctly account for having money in different currencies, without currency transfers or currency fluctuations ending up as gains or losses? In my view, your spreadsheet should be in multiple currencies. i.e. if you have gained some in specific currency, make a note of it in that specific currency. If you have spent something in a specific currency, then make a note accordingly. You can use an additional column for reporting this in a neutral currency say GBP. If you are transferring the money from account of one currency to account of another; change the balances as appropriate with the actual conversion rate. If you need this record keeping for tax purposes, then get a proper advise from accountant.",
"title": ""
},
{
"docid": "97793b3a30e5346c88a4c290d48d8e81",
"text": "\"That's Imbalance-USD (or whatever your default currency is). This is the default \"\"uncategorized\"\" account. My question is, is it possible to get the \"\"unbalanced\"\" account to zero and eliminate it? Yes, it's possible to get this down to zero, and in fact desirable. Any transactions in there should be reviewed and fixed. You can delete it once you've emptied it, but it will be recreated the next time an unbalanced transaction is entered. Ideally, I figure it should autohide unless there's something in it, but it's a minor annoyance. Presumably you've imported a lot of data into what's known as a transaction account like checking, and it's all going to Imbalance, because it's double entry and it has to go somewhere. Open up the checking account and you'll see they're all going to Imbalance. You'll need to start creating expense, liability and income accounts to direct these into. Once you've got your history all classified, data entry will be easier. Autocomplete will suggest transactions, and online transaction pull will try to guess which account a given transaction should match with based on that data.\"",
"title": ""
},
{
"docid": "1f08ad36b6bbbb7fc99e5aa9a06f0376",
"text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"",
"title": ""
},
{
"docid": "7c12efadd7fee350ffa0bd773c7bcd8f",
"text": "Unfortunately, there is no facility to do bulk transaction edits in GnuCash, so you are out of luck for your existing hundred. (I don't know whether there is a way to initially import a transaction as split.) However, once you have entered this split once, it can be used as a template for new transactions, using autocomplete or by entering it in the Scheduled Transaction Editor.",
"title": ""
},
{
"docid": "3bbda03f837541c501058d5c2e9831a5",
"text": "Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow. GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls. Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that. I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports.",
"title": ""
},
{
"docid": "0e1634b86dc0379488255eb75820baf2",
"text": "\"I recently needed to compute a better balance that let us pick and choose what to include in the computed sum without losing information, so I revisited this topic and I'm pleased to say that I've found a solution that works (at least for our data - you may have transactions that this code doesn't recognize, but you can always modify it to match). My solution was written natively for MS SQL Server 2008 or later, it uses a scalar UDF, a VIEW, and a windowed aggregate (SUM OVER (ORDER BY ...) which means it should be almost-syntax compatible with PostgreSQL. MySQL does not support OVER but you can perform a running-sum using a variable with arithmetic addition directly in the SELECT clause. Create a database table with this schema (feel free to exclude columns you're not interested in, such as Option1Name): Create a UNIQUE index on TxnId - you could use it as a primary-key, I suppose. You might be tempted to create a Foreign-Key relationship between ReferenceTxnId and TxnId, however this will fail if you enforce it: we have many transactions where ReferenceTxnId points to a Transaction that doesn't exist. This is usually in the case of [Type] = 'Web Accept Payment Received' AND [Status] = 'Canceled'. We also have some TransactionId values longer than 17 characters: some TransactionIds start with \"\"U-\"\" - all pending money requests, I suspect this indicates the transaction is \"\"unfinished\"\". Re-download your entire PayPal History CSV files so that you have the latest retroactive updates. Import these CSV files into this PayPalHistory table. Do a simple test to see how bad PayPal's default data is: To find out where the differences are coming from, run this query: (The ORDER BY (...), RowId is to ensure consistent ordering when multiple transactions share the same timestamp) As you scroll through the results, you'll see how the naive SUM is thrown-off from the official PayPal-computed Balance column. So as you can see, the Net column value cannot always be trusted - what we need is to generate our own \"\"EffectiveNet\"\" value which is accurate - that is, the value is 0.00 for rows which do not affect the balance, instead of being what they are right now. The problem is, given a single row of data (such as any single row from the example table in my original Question) we have no way of inherently knowing what its \"\"EffectiveNet\"\" is. I have devised two functions to help solve this problem, the first function only looks at the ReferenceTxnId, Type and Status column values and generates accurate values for the vast majority of rows - indeed, in our dataset we only had one row for which this approach did not work. I recommend you try this one first and compare the running-sum value to ensure it works for your data: You can use this function in the query like so below, hopefully it should give you an accurate running-sum and balance figure at the end: 8. And here's the view that ties it all together: Used like so: I hope this helps anyone else wanting to do accurate bookkeeping with PayPal Transaction History files!\"",
"title": ""
},
{
"docid": "500aba91d79281094dbadba775df5b7a",
"text": "I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat).",
"title": ""
},
{
"docid": "0f8bff4246bf5e8c9e8ded7affa5caa8",
"text": "\"Gnucash is first and foremost just a general ledger system. It tracks money in accounts, and lets you make transactions to transfer money between the accounts, but it has no inherent concept of things like taxes. This gives you a large amount of flexibility to organize your account hierarchy the way you want, but also means that it sometimes can take a while to figure out what account hierarchy you want. The idea is that you keep track of where you get money from (the Income accounts), what you have as a result (the Asset accounts), and then track what you spent the money on (the Expense accounts). It sounds like you primarily think of expenses as each being for a particular property, so I think you want to use that as the basis of your hierarchy. You probably want something like this (obviously I'm making up the specifics): Now, when running transaction reports or income/expense reports, you can filter to the accounts (and subaccounts) of each property to get a report specific to that property. You mention that you also sometimes want to run a report on \"\"all gas expenses, regardless of property\"\", and that's a bit more annoying to do. You can run the report, and when selecting accounts you have to select all the Gas accounts individually. It sounds like you're really looking for a way to have each transaction classified in some kind of two-axis system, but the way a general ledger works is that it's just a tree, so you need to pick just one \"\"primary\"\" axis to organize your accounts by.\"",
"title": ""
},
{
"docid": "4911f9a1e0f23dca3556083c61350494",
"text": "\"Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference between the two. This link describes it in more detail and provides some references: http://www.maximadvisors.com/2013/06/foreign-residence/ That link also discusses additional potential complications if you have a mortgage on the house. This link gives more detail on the court case referenced in the above link: http://www.uniset.ca/other/cs5/93F3d26.html The court cases references Rev. Rul 54-105. This link from the IRS has some details from that (https://www.irs.gov/pub/irs-wd/0303021.pdf): Rev. Rul. 54-105, 1954-1 C.B. 12, states that for purposes of determining gain, the basis and selling price of property acquired by a U.S. citizen living in a foreign country should be expressed in United States dollars at the rates of exchange prevailing as of the dates of purchase and sale of the property, respectively. The text of this implies it is for U.S. citizen is living in a foreign country, but the court case makes it clear that it also applies in your scenario (house purchased while living abroad but now residing in the US): Appellants agree that the 453,374 pounds received for their residence should be translated into U.S. dollars at the $1.82 exchange rate prevailing at the date of sale. They argue, however, that the 343,147 pound adjusted cost basis of the residence, consisting of the 297,500 pound purchase price and the 45,647 pounds paid for capital improvements, likewise should be expressed in U.S. dollar terms as of the date of the sale. Appellants correctly state that, viewed “in the foreign currency in which it was transacted,” the purchase generated a 110,227 pound gain as of the date of the sale, which translates to approximately $200,000 at the $1.82 per pound exchange rate. ... However fair and reasonable their argument may be, it amounts to an untenable attempt to convert their “functional currency” from the U.S. dollar to the pound sterling. ... Under I.R.C. § 985(b)(1), use of a functional currency other than the U.S. dollar is restricted to qualified business units (\"\"QBU\"\"s). ... appellants correctly assert that their residence was purchased “for a pound-denominated value” while they were “living and working in a pound-denominated economy,” ... And since appellants concede that the purchase and sale of their residence was not carried out by a QBU, the district court properly rejected their plea to treat the pound as their functional currency.\"",
"title": ""
},
{
"docid": "1577e21bf4ad3391c4631197ed104014",
"text": "I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.",
"title": ""
},
{
"docid": "007befd38bcc226a277d23049f749057",
"text": "At every moving/yard/garage sale I have ever seen only cash is accepted. While the use of electronic payments is growing the big problem is that it is hard to verify the exchange at the time the goods are changing hands. Unless you have a card reader attached to your phone, you can't use a credit or debit card. Unless you can verify that they did transfer the money electronically why would you let them walk away with your stuff? If you knew them you could accept a check, but there are risks with the checks bouncing.",
"title": ""
}
] |
fiqa
|
897cfe7cc6a5015c05517d56dc2084cc
|
Difference between a mortgage and buy-to-let in UK
|
[
{
"docid": "95540cd3cda0fc31266f42621fd93732",
"text": "\"Residential mortgages normally explicitly state that the property cannot be let without explicit permission, whereas BTL mortgages typically require that the property be let. There are other differences. Residential mortgages are regulated, which means that consumers have a degree of protection from mis-selling; most BTLs are not, as landlords are expected to know what they're doing. Affordability of residential mortgages are based on your income, since that is how you are going to pay for them. BTLs are (mostly) assessed based on the property's rental income, since it's that that will fund the mortgage. Finally, residential mortgages are typically done on a repayment basis, so that at the end of the term, you've paid off the entire loan, whereas BTLs are typically interest-only, on the assumption that you'll either sell the property, or remortgage, at the end of the term. (I've used words like \"\"typically\"\" a lot to give an overall picture of the differences. Obviously it's a bit more complicated than that, and there are exceptions to a lot of the above descriptions.)\"",
"title": ""
},
{
"docid": "84884f32ad061129295dd2d49b720dd1",
"text": "In my experience buy-to-let mortgages charge a higher rate of interest than an personal residential mortgage. They are regarded as a business enterprise and presumably the banks calculate that they carry a higher risk. A bank would probably take action if the property on an ordinary mortgage was rented out, as you would be breaking their terms. Policies could be rendered void. The terms on an ordinary mortgage disallow renting out the property.",
"title": ""
},
{
"docid": "df4cbe6da08e11779cd733b91756b314",
"text": "Another factor that makes Buy to let more expensive is the risk involved. With a buy to let you are dependent on finding a tenant that will keep regular payments. if the property is left empty you need to finance the mortgage yourself putting you under financial strain and raising risk. Also as Chis mentioned they are regarded as a business enterprise, If the mortgage was to be taken by a business that would be very high risk for a bank as the business could dissolve leaving the bank out of pocket. Because of this it can be very difficult to get a buy to let through a business unless you are moving from a personal portfolio. For a regular mortgage these risks don't exist so this is reflected in lower interest repayments. It's because of these differences in risk that banks created buy to let so they can better manage those risks.",
"title": ""
}
] |
[
{
"docid": "933d4d77ab71aaf0bdb5e1d198ab6f1b",
"text": "When I bought my own place, mortgage lenders worked on 3 x salary basis. Admittedly that was joint salary - eg you and spouse could sum your salaries. Relaxing this ratio is one of the reasons we are in the mess we are now. You are shrewd (my view) to realise that buying is better than renting. But you also should consider the short term likely movement in house prices. I think this could be down. If prices continue to fall, buying gets easier the longer you wait. When house prices do hit rock bottom, and you are sure they have, then you can afford to take a gamble. Lets face it, if prices are moving up, even if you lose your job and cannot pay, you can sell and you have potentially gained the increase in the period when it went up. Also remember that getting the mortgage is the easy bit. Paying in the longer term is the really hard part of the deal.",
"title": ""
},
{
"docid": "75bc77e9cb4ce0eee8f36c8275bea222",
"text": "Cap rate includes any interest on the mortgage and not the repayments of the mortgage. Cap rate represents the net income which is the gross rent minus all costs, including the interest on the loan. Mortgage repayments form part of your cash flow calculations not your return calculations. ROI is a calculation which works out your net income over the initial investment you made, which is you downpayment plus costs and not the value of the property.",
"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": "5c9153328983fa1321a9672e4bc87dee",
"text": "Of course you don't need to take a mortgage - if you happen to have enough cash (or other assets) to pay your sister her share, or if she is willing to take it in installments over the next years. Mortgages are not needed to buy houses, but to pay for them - subtle difference. If you can pay - in whichever agreed way - without a mortgage, you won't need one.",
"title": ""
},
{
"docid": "993e74f21978e5fdadfd067d7ee9cd47",
"text": "According to my wife who used to work in the industry, since an investment mortgage is more likely to fail (they are just riskier) there are higher loan to value requirements and higher interest rates. They are just different products for different situations.",
"title": ""
},
{
"docid": "cf78976a18395e57a7dca605637a6e0c",
"text": "\"Not sure why the downvote - seems like a fair question to me. Who owns a house and in what proportions can be totally separate from who is named on the mortgage. There are two ways to do this - one way would be for you loan them the money first under a separate contract, which you should have a solicitor draw up; then they buy the house themselves. The contract would state the terms for repayment of the loan, which could be e.g. no repayment due until the sale of the house at which point the original amount is returned plus interest equivalent to the growth in value of the house between purchase and sale (or whatever). You'd need to be clear about what happened if the house lost value or they ended up in a negative equity situation. The other option is where you are directly a party to the purchase of the house and are named as part owners on the deeds. Again the solicitor who is handling the house purchase for them would help with the paperwork. In either case you would need to clear this arrangement with the mortgage company to make sure they were OK with it. To answer your specific questions in order: - Yes, they would still be eligible for the Help To Buy ISAs (assuming that is what you are referring to) even though you would not be - I'm not sure what \"\"penalty\"\" you are referring to. You'd have to pay tax on any income or capital gain you made from the deal. - No-one can say whether this is a good deal for you without knowing a great deal more about your individual circumstances (and even then, any such advice you would get on here is worth as much as you pay for it.... if in doubt, consult an IFA.)\"",
"title": ""
},
{
"docid": "08bddd891e22c3d1673a1357cb9e00c9",
"text": "I am in Australia, but I think the banks in the UK would use similar wrkings. Your options 1 and 2 are basically no. Why would the bank consider your wife to be paying you rent when you live together. These are the type of practices that led to the GFC, and since then practices have been tightened. Regarding option 3, yes banks do take into consideration rent in their analysis of your loan. However, they would not include the full rent in their calculations, but about 70% to 75% of the full rent. This allows for loss of rent during vacant periods and adds a safety factor in their caluclations. But they will not include the rent itself, you would have to have other income as well to support your loan. Saying that, we do have Low Doc Loans in Australia (loans with little documentation required to get a loan). With these loans you basically have to make a declaration that you are telling the truth regarding your income sources and you can only usually borrow a lower LVR as these loans are seen as a bigger risk. These type of loans have also been tightened up since the GFC.",
"title": ""
},
{
"docid": "24d27d57f0294cef060793e5d19c2702",
"text": "NO Even worse, most BTL(buy to let) lenders will not lend if you are going to be living in the property. There are very few lenders that will touch something like this. It is likely you will also need to use bridging for the time the building work takes at something like 1.5% per month! Try posting the question to http://www.propertytribes.com/ as there are a few UK mortgage experts on that site.",
"title": ""
},
{
"docid": "754d533d19a301b87a8dfbc18542f40f",
"text": "Risk. A shorter-term mortgage is less risky than a long-term mortgage - in this case there's half the chance of something bad happening because there's half the time allotted (15 vs 30 years). Bad things include you going bankrupt, massive inflation, or your home being destroyed in a meteor impact that your insurer won't cover. They entice consumers to these less risky mortgages by offering a lower interest rate.",
"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": "4349f07e50115f9f140855eb1f0c47a1",
"text": "The advantage of having a mortgage rather than borrowing money in other ways is that it is cheaper because the loan is secured against the value of the property. If you stop paying then the bank take the house and can sell it keeping what they are owed and returning any excess. If you have enough money to pay it off then you do not need the mortgage. They normally run for 25 years. It is a lovely day when finally you realise that you own the whole house and no longer owe anything to the bank and the charge against the house is removed and the record of it removed from the land registry. When you sell a house with a mortgage the buyer has to check that the bank has been paid off before they accept the property.",
"title": ""
},
{
"docid": "96b9afe5c1b88113bb077334eaeeef56",
"text": "Impossible to say without knowing more about your situation. Most likely you won't be able to secure a loan for money that you're just going to spend - getting a loan for property is easier because the bank owns the thing that you buy until you pay it back.",
"title": ""
},
{
"docid": "8cc2389786fff79f3147cc8c27172e0e",
"text": "Personal loans are typically more expensive (have higher interest) than mortgages, because they are not backed by an immovable asset. So you should reconsider the decision to not want a mortgage; it would be cheaper. Aside from that, once you get a personal loan, you are free to do with it whatever you want; this includes sending it to your parents, buying something, gambling it away in Vegas, or take out cash and burn it. So, yes, you can. Sending money from the UK to other EU countries should be easy and simple, once it is in your account, your bank can help you to make the transfer. I assume you understand that if your parents walk away with the money, you are left holding the bag. You are taking the full risk, and you will have to pay it back.",
"title": ""
},
{
"docid": "81df6a5235dad320c3fa1c7971100e9e",
"text": "\"No. Rural Scotland has exactly the same monetary system, and not the same bubble. Monaco (the other example given) doesn't even have its own monetary system but uses the Euro. Look instead to the common factor: a lot of demand for limited real estate. Turning towards the personal finance part of it, we know from experience that housing bubbles may \"\"burst\"\" and housing prices may drop suddenly by ~30%, sometimes more. This is a financial risk if you must sell. Yet on the other hand, the fundamental force that keeps prices in London higher than average isn't going away. The long-term risk often is manageable. A 30% drop isn't so bad if you own a house for 30 years.\"",
"title": ""
},
{
"docid": "268885bbade6eaf5bbb7e23b4c7c07be",
"text": "You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer.",
"title": ""
}
] |
fiqa
|
fd05c0291e992997b5c2f7ded49b7d16
|
A merchant requests that checks be made out to “Cash”. Should I be suspicious?
|
[
{
"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": "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": "51fb633f62e19dd495c87a1636237e4e",
"text": "\"To put a positive spin on the whole thing, maybe it's a small family shop, and having the check made out to \"\"cash\"\" means that your barber can hand it to someone else without the need to countersign. Or maybe his last name is \"\"Cash\"\" - there was a pretty famous singer who fit that description. Either way, it's not your place to nanny his finances.\"",
"title": ""
},
{
"docid": "73b127d58b51f1016763b2b24a668843",
"text": "\"They're hiding income. The IRS is a likely candidate for who they are hiding it from but not the only option. Another possibility that comes to mind is someone who had a judgment against them--a check made out to \"\"cash\"\" could be handled by someone else and thus not ever appear in their bank accounts.\"",
"title": ""
},
{
"docid": "aa06e4d627e110802c4b602838403135",
"text": "If the business owner doesn't want you to pay him directly, the only reason I can think of is breaking a law. It can be because the business doesn't legally exists, or because the barber wants to evade taxes, or because he doesn't pay his child support or doesn't want his income to be apparent to his debtors in a bankruptcy proceedings. Either way, stinks.",
"title": ""
}
] |
[
{
"docid": "a7f53388750c3c3aa69d751131546f00",
"text": "From my reading of the wikipedia page (CRT), this only happens if you deposit or withdraw currency, not checks. The idea behind this is that checks, ACH, etc. leave paper trails that can be tracked. Cash doesn't, so it gets this extra level of scrutiny. If yu get a cashiers check or a money order to pay a bill, I don't think a CRT is created. If you withdraw $15,000 to buy a car in cash (1 stack of $100 bills), then a CRT would be generated. It still isn't a problem, as long as you can show a bill of sale showing where the money went (or came from, if you are the seller). The IRS has a FAQ about this. It says (taken from several spots at that page): Cash is money. It is currency and coins of the United States and any other country. A cashier’s check, bank draft, traveler’s check, or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. These items are not defined as cash because, if they were bought with currency, the bank or other financial institution that issued them must file a Currency Transaction Report. The exception to this is if you are buying something with a resale value of more than $10k with a check, money order, etc of less than $10k.",
"title": ""
},
{
"docid": "a6a8bc7193252f2ccfec889fe8110dcb",
"text": "No, most check deposits are processed that way. Banks transmit the pictures of the checks between themselves, and allow business customers to deposit scans for quite some time now. I see no reason for you to be concerned of a check being in a dusty drawer, it's been deposited, cannot be deposited again. If you're concerned of forgery - well, nothing new there.",
"title": ""
},
{
"docid": "3c9f34a984c3fc84aa3b8bd0f4abd9af",
"text": "If you are going to put it into a banking system, just deposit it. Why did breaking it up even cross your mind? Like what would that even have accomplished, so you could pretend like you started moonlighting as a club bouncer if you were ever casually asked by a bank teller or federal agent? If you have to ever account for the source of your money, you will have to account for it regardless. You shouldn't worry about things that may trigger higher scrutiny on you, because it is pretty random. The financial institution may file a suspicious activity report any time they feel like it (which they routinely do without the customer's knowledge, for a wide range of reasons), and actually attempting to break it up into smaller deposits would mean the suspicious activity report would escalate into criminal charges. And regarding the IRS, if they ever audited you then you will still have to account for that $25,000 no matter what you did with it.",
"title": ""
},
{
"docid": "8fda556ad6cb96a5357c78be226dbea8",
"text": "In my business (estate planning law practice), probably 60-70% of my income is in the form of checks, with the balance as credit/debit cards. I prefer to get paid by check so I don't have to pay the approx 2.5% merchant fee, but I don't push clients to choose one method over the other. I offer direct deposit to my employees but most of them choose to be paid by check. Also, check processing is becoming more and more electronic - when I get paid by check, I scan the checks in a dedicated desktop scanner, and upload the check images to the bank at the end of the day, and the checks are processed very quickly. I also make deposits to my personal credit union account by scanning checks and uploading the images. So, yes, there's technically a paper check, but I (as the merchant/recipient/depositor) keep the check for a few months to make sure there's no problem with the deposit/payment, then shred them. The bank never sees the actual paper check.",
"title": ""
},
{
"docid": "bf71d5a84316745ad55ad0519e6ee5db",
"text": "\"What does it mean that the bank will \"\"hold you responsible\"\"? Clearly the money won't be credited. Will you be charged a fee like an NSF cheque? Will they try to prosecute you? Is there any way to confirm whether a cashiers cheque is forged? Could you for example tell your bank that you were uncertain of the origin, and ask them to confirm it? Can you call the issuer and verify (from the serial number) that they did in fact issue a cheque for that amount with you as the payee? Even calling the bank might not help. The first verification is that the bank exists, and that the account number and name match and that they did issue a check. But that doesn't cover the situation where the person that sent you the check wasn't who they claimed to be. That is the theft that could take weeks to find.\"",
"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": ""
},
{
"docid": "d951bbaa38928391c5551bcad1716fd8",
"text": "This is basically a form of credit card kiting, it's not necessarily illegal but it can be. It is, however, against the TOS in pretty much every merchant agreement (including Paypal and Square), so you'd most likely have your account suspended, and the merchant could pursue legal action if they felt they could prove intent to deceive. It's not practical given actual fee structures, but even if it were, most merchants are quite good at detecting this sort of thing and quick to shut down accounts.",
"title": ""
},
{
"docid": "804a18fc851121a3975fb36daad078b8",
"text": "A bank check is drawn on the bank itself. You gave the bank the funds backing that check at the time you purchased it. You can not get that money back except by returning the check to them. So, yes, effectively that check behaves like cash; the money us already gone from your account, and once you hand it over you can't claim it was forged or otherwise try to cancel the payment.",
"title": ""
},
{
"docid": "1884d09a6e7e4786e5ba73997559dc1b",
"text": "In the united states, they may request a check written by the bank to the other party. I have had to make large payments for home settlements, or buying a car. If the transaction was over a specified limit, they wanted a cashiers check. They wanted to make sure it wouldn't bounce. I have had companies rebate me money, and say the maximum value of the check was some small value. I guess that was to prevent people from altering the check. One thing that has happened to me is that a large check I wanted to deposit was held for a few extra days to make sure it cleared. I wouldn't have access to the funds until the deadline passed.",
"title": ""
},
{
"docid": "a1c74729f1dca762dfb8b1500a304afd",
"text": "I'll assume you are asking about a check for some kind of work or service that you provided them, that they hired your company to do. No large business will do that. In their records they have a contract with your company to provide services. If they write you a personal check it won't match with the contract, and when the auditors see that they will scream blue murder. Whoever wrote the check will have to prove that you are legitimately the same thing as the company (that doesn't mean taking your word for it). They may also have to show they weren't conspiring with you to commit tax fraud ( that wasn't your intention of course, was it?) .",
"title": ""
},
{
"docid": "d7c55f0acbaef0b64df8e7e0a1cda7f8",
"text": "\"Read the check: it says \"\"Pay to the order of ...\"\". It's simply an order from you to your bank to give money to someone. It can be written on anything. Back in the olden days (a hundred years or so ago) it would have simply been a letter to the bank. Those rules haven't changed much with today's automation. What matters is that the order comes from you, which means it must have your signature. If the bank pays a check with a fraudulent signature they're responsible. Granted, banks don't look very carefully at checks any more (I once accidentally swapped two checks when I paid bills, and the phone company simply gave me a $700 credit on my $50-a-month account), but if they screw up it's their problem.\"",
"title": ""
},
{
"docid": "0ab045a99c76a8f6c9dac6c9730b8bab",
"text": "Yes, but it's a matter of paper trail and lifestyle. Your $600K guy may get questioned when he makes the deposit, but would show the record of having that money elsewhere. People buy cars with cash (a check) all the time. The guy filing a tax return claiming little to no income or no return at all, is more likely to get flagged than the $100K+ earning couple who happened to be able to save to buy their $25K car every 10 years with cash. On reading the article, the bank had its own concerns. The guy who was trying to withdraw the money was elderly, and the bank seemed pretty concerned to make sure he wasn't about to be scammed. It may not be spelled out as such, but a custodian of one's money does have an obligation to not be party to a potential scam, and the very request for such a huge sum of money in cash is a red flag.",
"title": ""
},
{
"docid": "bd2b03ed3cd4d1e068eb182200ec4848",
"text": "\"What they are doing is wrong. The IRS and the state might not be happy with what they are doing. One thing you can ask for them to do is to give you a credit card for business and travel expenses. You will still have to submit receipts for expenses, but it will also make it clear to the IRS that these checks are not income. Keep the pay stubs for the year, or the pdf files if they don't give you a physical stub. Pay attention to the YTD numbers on each stub to make sure they aren't sneaking in the expenses as income. If they continue to do this, ask about ownership of the items purchased, since you will be paying the tax shouldn't you own it? You can in the future tell them \"\"I was going to buy X like the customer wanted, but I just bought a new washer at home and their wasn't enough room on the credit card. Maybe next month\"\"\"",
"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": "66ffc7bcaf7543e8dc2c1a71e4e07187",
"text": "I will definitely recommend the following books The above books will open lot of eyes to exactly know what you are doing with your personal finances in a day to day basis.These books will surely be in the top of my list which I will be giving away to my kins in my later stage. The concepts are universally the same, feel free to skip the chapters which were US based. I live in UK and I read most of the above books in late twenties, it surely made lot of changes and also drastically improved my personal finance acumen. I wish I have read these books in my early twenties.",
"title": ""
}
] |
fiqa
|
2ae2a4d2e2c39d6b12548fdf7a623ca4
|
What threshold to move from SEP to Solo401k?
|
[
{
"docid": "601b2c05dbc63338c48d2705602453ef",
"text": "I think this article explains it pretty well: Contributions to a SEP are limited to 20% of your business income (which is business income minus half of your self-employment tax), up to a maximum of $45,000. With a solo 401(k), on the other hand, you can contribute up to $15,500 plus 20% of your business income (defined the same way as above), with a maximum contribution of $45,000 in 2007. You can make an extra $5,000 catch-up contribution if you're 50 or older",
"title": ""
}
] |
[
{
"docid": "441c9c7dbaf65942463e75068c6c32b4",
"text": "I'll offer another answer, using different figures. Let's assume 6% is the rate of return you can expect. You are age 25, and plan to retire at age 65. If you have $0 and want $1M at retirement, you will need to put away $524.20/month, or $6,290.40/year, which is 15% of $41,936. So $41,936 is what you'd need to make per year in order to get to your target. You can calculate your own figures with a financial calculator: 480 months as your term (or, adjust this to your time horizon in months), .486755% as your interest (or, take your assumed interest rate + 1 to the 1/12th power and subtract 1 to convert to a monthly interest rate), 0 as your PV, and $1M as your FV; then solve for PMT.",
"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": "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": "65a26dd09ec9bd29d2f0f247226041d3",
"text": "You are correct. The 65 is actually a longer test. The 66 requires you have the 7 first so you don't have strategy or product analysis questions. I have heard some say the 65 is harder because you are registering with the state as an investment advisor so don't need the 7. Regardless the biggest thing is know Uniform Securities Act inside and out.",
"title": ""
},
{
"docid": "a97d9c2308543646c996ddaeecefb95e",
"text": "Well, from what I have heard, the pass is 60%. Evidently, I am going to try to get a lot better but since I am still new to Finance, trying to put all the pieces together can be a bit of a challenge. More studying would help that I assume.",
"title": ""
},
{
"docid": "3200c8e4d60be4560b6965e96b57034b",
"text": "\"Doing what you suggest may actually be helpful. Today, you have wealth of 145k and debt of 140k, for net wealth of 5k. Your interest incurred is $671/month and your interest earned is $211, for a total loss of $460/month, just below the 491 $/month you are saving, so your total saving is $31/month currently. However, even though in total, you have more money each month than the month before, you are getting more debt and thus more interest to pay each month. Your interest earned is increasing much slower. That $31/month you are currently able to save? By the time you hit 51, that has become $0/month and is still dropping. By 60? Your debt has overtaken your retirement savings - that $5 net worth you have now is gone. If you were to withdraw money from your retirement to pay off your debt (with the $32k penalties) you would have wealth of 70k and debt of 97k, for a net wealth of -27k (i.e. net debt). Obviously, the above is not good. However, you reduce your monthly interest paid to $465, while also reducing your interest earned to $102. This is a total loss of $365/month, so you are saving $126/month. Note that in this case, your $491 monthly repayment is higher than the interest you have to pay on the account, this means that each month, your interest payment becomes lower, thus you pay off more and more each month. Your balance would be getting better each month (and at a faster rate each month. Your net wealth would be back in positives and above your wealth on your current trajectory before you hit 62. By 65, you will have $9000 of net wealth if you use your retirement savings now, as opposed to $9000 net debt if you don't. And just adding a few things on to the end 1) This is just the maths of it, and does not take into account your behaviour. If having that debt accruing is helping to motivate you to give up on luxuries, then this analysis does not apply. I am assuming that the $491/month is literally all you can save, and that no matter what changes, you will always deposit that $491. If you do not think you can continue to deposit that $491 if you stop seeing such high interest accruing, then do not do this. 2) I am assuming your interest earned on your IRA is 1.75%. If this is not the case, then please let me know, and I can adjust my numbers accordingly. From http://www.usatoday.com/story/news/politics/2014/01/28/obama-state-of-the-union-myra-savings-plan/4992743/ 3) I'm assuming all numbers you mentioned are accurate, and will stay constant (interest rates may not) 4) This is not professional, financial advice. I am just a person on the internet. 5) This goes without saying (and will probably go down as well as \"\"let them eat cake\"\" did), but saving more money each month will be a more powerful, risk free way to get out of this problem. Work a 2nd job, cut costs however you can. 6) Sorry if you were looking for something more motivational or sugar coated. 7) Best of luck, feel free to ask any questions. Graph below in red is your current trajectory, and blue is if you withdraw from your retirement to pay off your debt.\"",
"title": ""
},
{
"docid": "ae8cfa57ef8ed63fedd0cfc010fa3a0b",
"text": "\"The Roth/Traditional decision is complex, but can be broken down into a set of simple rules. Ideally, you want to choose to tax your money at the lowest possible rate. This specifically refers to your marginal rate, the rate you last $100 was taxed or next $100 of income with be taxed. That, in itself, is another issue, answered with questions here discussing marginal rates. My suggestion has been that if you are in the 15% bracket, use Roth. And continue to do so until you hit 25%. At that point, begin to shift to the traditional, pre-tax 401(k) or IRA. (My article The 15% solution, goes into detail on this, although it references the 2013 tax rates. I need to re-edit). If you are already in the 25% bracket, I'd suggest just going pre-tax. Given the ability to convert, it's not as if there are 2 points in time (deposit and withdrawal) but you can decide every year if your situation changes. It's not uncommon to get married, have a baby, buy a house, and find you just dropped back down to 15% marginal rate when you were solidly 25% prior. Let me explain why you should go 100% pretax if already at 25%. A single person hits the top of the 15% bracket (in 2017) at $37,950 taxable. Add the standard deduction and exemption, and you are at $48,350. The tax on this is $5226, less than 10% average, despite the next $100 being taxed at 25%. It would take over $1M to have an account large enough to withdraw $40K/yr. If you blow through that number, you hit 25%, I agree, but why pay 25% now, for sure, to avoid 'maybe' hitting 25% later? You have decades of opportunities for conversion, and even more when the funds are transferred to IRAs if you have a job change. (And the conversion discussion has multiple layers when the IRA is involved) Say you are 'too' successful. You are hitting $2M before age 55. If you retire post-55, you can withdraw from the 401(k) penalty free. But, you have 15 years before you'd start to take SS benefits. 15 years to use conversions, even if pushing into 25%, to reduce the impact of SS taxation. My advice is not a set-and-forget solution. It's an annual evaluation of the plan for the coming year. Further notes on my choice of \"\"15% Solution\"\" - This is the 2017 tax table for singles - I note that median individual income is ~$30K which puts that median single at ~20K taxable. This is where the analysis begins. This earner might have upward mobility, to reach the 25% bracket and begin to save pre-tax. The goal would be to have a mix of pre/post tax money, so that over the course of their life, the 25% bracket was avoided, perhaps completely. In general, my writing tend towards the second highest quintile, the 60-80% slice of the population. The numbers might appear arbitrary, but, in the end, the discussion has to start someplace. The concept I described here is best implemented by the single or couple who is still at 15%, but soon pushing higher than the 15/25 line. This enables them to start by saving in the Roth, and slowly shifting towards pre-tax. The final mix at retirement depends on that timing as well as their opportunities for conversions along the way. Part of my focus on that line is that the differential is greatest in bracket shifts between 15 and 25%. Much of the benefit in the whole IRA/401 discussion is in that shift, depositing at 25%, yet withdrawing at 15%. The 28% couple might wish to avoid the 33% bracket at retirement, but that level of income impacts far fewer people, and fewer still that are either reading these boards or my other writing.\"",
"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": "59682cb6af50a150a5bbb76308efceec",
"text": "the SP500 is all in the US, though. if you plan to buy and hold long index, you will probably be fine. i would recommend to diversify into different assets for a number of reasons. but if you invest without an advisor, you need to stick to a savings and investment plan without question. if you start thinking about what sector you think the next big break is going to be, or if you should be buying in right now, or if now is a good time to sell, it is more likely than not you will be doing yourself a great disservice.",
"title": ""
},
{
"docid": "aaf92fe78bcc576ccc41071daa8b9018",
"text": "Two ways to solve this. Look at the answer. If the answer says 3 months, then using ceiling for similar questions. You have to act according to the exam conventions, not according to own feelings. Whether or not the answer is reasonable and applicable in real life is out of the question. Ask yourself, did the investment double after 14 years 2 months? i.e. FV >= 2PV. Does a person who ran 99.72 meters in a 100-meter dash counted as touching the finish line?",
"title": ""
},
{
"docid": "a5345be7d605b0afce14d92988730fc0",
"text": "Here's the issue with LTC and, really, underwritten insurance in general; no one has a crystal ball. Based on today's available rates where's the sweet spot to buy LTC? Probably right around the mid-60s, because you probably won't pay much in before you start gutting the carrier (assuming you can make it through underwriting in your mid-60s). The issue is, what happens when some life event changes your underwriting status? Would you rather buy prematurely or be excluded entirely? Those are generally your two options when it comes to individual LTC. The underwriting eligibility window on LTC is very narrow. There's a very very small space between the best possible underwriting and being flatly declined. Look for an LTC agent in your area. Likely someone in your circle of friends and family will know a reputable/knowledgeable insurance agent who can run up some quotes at various underwriting classes. Try to avoid looking at quotes for your age + 10 years to see what the quote will look like 10 years from now. 10 years from now the rate tables will be significantly different. Whether or not you should buy LTC now rather than waiting will depend on a whole host of other criteria. Personally, if I was 50 and my biggest health concern was improving my run time and LTC is on my mind, I'd just pick up a policy now while I will likely be in a preferred underwriting class rather than waiting and hoping my health doesn't betray me. Obviously I'm a stranger on the internet and none of this is actual advice. You should find an agent local to you and talk about your options and situation.",
"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": "010b9f7f106a63c25ec5dd87c62d07eb",
"text": "I'm NMLS with a bank, won't name it, but you can buy and sell points up to .5 if I remember right. Might be 1% but it's the difference between 1300 and 1700 if I remember right for monthly payments.",
"title": ""
},
{
"docid": "288b322cfb3118e734fc99b28d1c3d1f",
"text": "Thanks! Your earlier comment had me panicked there! I have worked about 1700 question over the last week from the Qbank, and was hoping that it would with a couple mock exams, would be sufficient for level 1.",
"title": ""
},
{
"docid": "6550eb8b1f267dd995068f20e63ae48f",
"text": "My super fund and I would say many other funds give you one free switch of strategies per year. Some suggest you should change from high growth option to a more balance option once you are say about 10 to 15 years from retirement, and then change to a more capital guaranteed option a few years from retirement. This is a more passive approach and has benefits as well as disadvantages. The benefit is that there is not much work involved, you just change your investment option based on your life stage, 2 to 3 times during your lifetime. This allows you to take more risk when you are young to aim for higher returns, take a balanced approach with moderate risk and returns during the middle part of your working life, and take less risk with lower returns (above inflation) during the latter part of your working life. A possible disadvantage of this strategy is you may be in the higher risk/ higher growth option during a market correction and then change to a more balanced option just when the market starts to pick up again. So your funds will be hit with large losses whilst the market is in retreat and just when things look to be getting better you change to a more balanced portfolio and miss out on the big gains. A second more active approach would be to track the market and change investment option as the market changes. One approach which shouldn't take much time is to track the index such as the ASX200 (if you investment option is mainly invested in the Australian stock market) with a 200 day Simple Moving Average (SMA). The concept is that if the index crosses above the 200 day SMA the market is bullish and if it crosses below it is bearish. See the chart below: This strategy will work well when the market is trending up or down but not very well when the market is going sideways, as you will be changing from aggressive to balanced and back too often. Possibly a more appropriate option would be a combination of the two. Use the first passive approach to change investment option from aggressive to balanced to capital guaranteed with your life stages, however use the second active approach to time the change. For example, if you were say in your late 40s now and were looking to change from aggressive to balanced in the near future, you could wait until the ASX200 crosses below the 200 day SMA before making the change. This way you could capture the majority of the uptrend (which could go on for years) before changing from the high growth/aggressive option to the balanced option. If you where after more control over your superannuation assets another option open to you is to start a SMSF, however I would recommend having at least $300K to $400K in assets before starting a SMSF, or else the annual costs would be too high as a percentage of your total super assets.",
"title": ""
}
] |
fiqa
|
27db0e02bf0e42cbcd60a99cbd6d138b
|
Can a shareholder be liable in case of bankruptcy of one of the companies he invested in?
|
[
{
"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": "d18a0ebdd505f1bbcec3d7ff88ceaf59",
"text": "\"No, assuming by \"\"public company\"\" you mean a corporation. The shareholder's individual liability is limited to their investment. Your shares can go to zero value, but that's the limit. EDIT In regard to the follow-up question in the comments: \"\"Are all companies in the stock market corporations?\"\" the answer is definitely \"\"no.\"\" I cannot say much about other countries, but the US markets have some entities which are known as \"\"master limited partnerships.\"\" These trade shares on the market by the usual rules, but if you buy you become a partner in the company rather than a shareholder. You still have limited liability in this case, but there will be differences, for example, in how you're are taxed.\"",
"title": ""
},
{
"docid": "1b000a8ad21e9fee49dcdf5d184e5642",
"text": "The answer depends on whether the company involved has 'limited liability'. Most, but not all public and listed companies and corporations have this, but not all so it is worth checking and understanding what you are getting involved with. The expression 'limited liability' means that the owners (shareholders) of a company have a liability up to the amount of the face value of the shares they hold which they have not yet paid for. The difference is usually minor but basically it means that if you buy $10 of shares you have no liability, but if the company gives you $10 of shares, and you pay them (in cash or kind) $5, then you still have a liability of $5. If the company fails, the debtors can come after you for that liability. An 'unlimited liability' company is a different animal altogether. Lloyds insurance is probably the most famous example. Lloyds worked by putting together consortiums to underwrite risk. If the risk doesn't happen, the consortium keeps the premiums, if it does, they cover the loss. Most of the time they are very profitable but not always. For example, the consortiums which covered asbestos caused the bankruptcies of a great many very wealthy people.",
"title": ""
},
{
"docid": "e7e01f4693da28ecd3ef88fbcc7b66c1",
"text": "\"Not normally, for a limited liability company anyway. In extreme circumstances a court may \"\"lift the veil\"\" of incorporation and treat shareholders as if they were partners. If you are an office bearer or a director that is found to have breached duties/responsibiities then that is another matter. Dim views can be taken of shonky arrangents for companies formed for activites not of a bona fide business nature too.\"",
"title": ""
},
{
"docid": "89806c12767e3ceb53f7abd1658aa490",
"text": "\"I am a tax lawyer and ALL the RESPONSES ABOVE are 1/2 Correct but also 1/2 Wrong and in tax law this means 100% WRONG (BECAUSE ANY PART INCORRECT UNDER TAX LAW will get YOU A HUGE PENALY and/or PRISON TIME by way of the IRS! So in ESSENCE ALL the above answers are WRONG! Let me enlighten you to the correct answer in 5 parts, as people that do not practice tax law may understand (but you still probably will not understand, if you are NOT a Lawyer). 1) All public companies are corporations (shown by Ltd.), 2) only Shareholders of Public companies (ie, traded on the NYSE stock market) are never liable for debts of a bankrupt company, due to the concept of limited liability. 2) now Banks may ask a sole proprietorship (who wants to incorp. for example) to give collateral, such as owners stocks/bonds or his/her house, but then of course the loanee can tell the Bank No Thanks and find a lender that may charge higher interest rates but lend money to his company with little to NO collateral. 3) Of course not all companies are publicly traded and these are called private companies. 4)\"\"limited liability\"\" has nothing to do directly with subsequent shareholders (the above answer is inaccurate!), it RELATES rather to INITIAL OWNERS INVESTMENT in their company, limiting the amount of owner loss if the company goes bankrupt. 5) Share Face-value is usually never related to this as shares are sold at market value in real life instances (above or below face-value), or the most money Investments Banks or owners can fetch for the shares they sell (not what the stock's face-value is set at upon issuance). Never forget, stocks are sold in our Capitalistic System to whomever pays the most, as it is that Buyer who gets to purchase the stock!\"",
"title": ""
},
{
"docid": "994aa81696600e5c80d2c0239d115c77",
"text": "In an open corporation scenario a stock holder may well be found liable. It's a very narrow and uncommon bunch of scenarios but it's well worth sharing. See the paragraph on open corporations in the following document: http://nationalparalegal.edu/public_documents/courseware_asp_files/businessLaw/RightsOfShareholders/LiabilityOfShareholders.asp",
"title": ""
}
] |
[
{
"docid": "7f0b2035b9854c22bee04b280dbc32aa",
"text": "You should double-check what it means to be in [Chapter 11](http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code) Yes, by filing for bankruptcy, the company gets some protection from creditors and some of their investment dries up, but it's the owners who take it on the nose first. Also, individuals can file for Chapter 11, too. It's not just corporations.",
"title": ""
},
{
"docid": "79f21f915d96f4657dbefa524ea5e1e0",
"text": "Strange that they're holding you personally legally liable rather than the company. That's normally a big part of the corporate veil. You need a lawyer, not a stackexchange.",
"title": ""
},
{
"docid": "6f59adcc7b987d2178c95cf63fd19f0e",
"text": "*sigh* So I guess you don't understand why they would care about no risk.... If the sub company fails, but had no debt, then the parent company only loses whatever money they invested in the sub company If the sub company fails and had debt: The parent company is responsible for those debts and must pay them if in the agreement with the bank the parent company is responsible. The parent company is not responsible for those debts if in the agreement with the banks, they did not agree to be collateral if the sub company went bankrupt. Not likely that a bank would agree to this though. They might even try to sue the parent company so they could get some reimbursement.",
"title": ""
},
{
"docid": "871ee400fd4484f5018511b91dcb9298",
"text": "> If the investor is a partner in the company then they're just as responsible for the debts of their business as any other partner. Umm, one of the benefits of creating a corporation is to keep personal money separate from the business. http://www.nolo.com/legal-encyclopedia/corporation-basics-29867.html There are exceptions to that of course. > The registered owners of the company can also be held liable for it's debts if it's a corporation. This is false. Baring in mind that you can prove separation of assets and aren't doing anything illegal. > Or you can always just have them sign as guarantor for your back pay. This is of course one of the exceptions.",
"title": ""
},
{
"docid": "89dda066ba2eec4f675e094aaa531a4e",
"text": "\"First off, the jargon you are looking for is a hedge. A hedge is \"\"an investment position intended to offset potential losses/gains that may be incurred by a companion investment\"\" (http://en.wikipedia.org/wiki/Hedge_(finance)) The other answers which point out that put options are frequently used as a hedge are correct. However there are other hedging instruments used by financial professionals to mitigate risk. For example, suppose you would really prefer that Foo Corporation not go bankrupt -- perhaps because they own you money (because you're a bondholder) or perhaps because you own them (because you're a stockholder), or maybe you have some other reason for wanting Foo Corp to do well. To mitigate the risk of loss due to bankruptcy of Foo Corp you can buy a Credit Default Swap (http://en.wikipedia.org/wiki/Credit_default_swap). A CDS is essentially a bet that pays off if Foo Corp goes bankrupt, just as insurance on your house is a bet that pays off if your house burns down. Finally, don't ever forget that all insurance is not just a bet that the bad thing you're insuring against is going to happen, it is also a bet that the insurer is going to pay you if that happens. If the insurer goes bankrupt at the same time as the thing you are insuring goes bad, you're potentially in big trouble.\"",
"title": ""
},
{
"docid": "977dfe0d410d1c7749d0b38f472c36f9",
"text": "It would depend on the bounds of your hypothetical. If the investor group is blind to cost + has infinite money and the existing management is unwilling to comply at any cost, then management will destroy the company before the investor group can take it over. If the existing management follow rational choice theory; then an investment group with unlimited money could take over, hold a special meeting on it, etc. Shareholders can't force management to do anything per se, as management decisions that violate fiduciary duty aren't criminally liable unless the act itself is a crime. So if an investor group were to try a hostile takeover, and Twitter mgmt said we'll see you in hell; then they could just shut down every data center, sell off twitter.com, terminate all the employees, issue a billion new shares, issue every employee a million $0.01 strike warrants, etc. until there's nothing left to take over just to spite them. Defensive strategies get pretty creative and are highly amusing to watch if you don't have a dog in the fight.",
"title": ""
},
{
"docid": "8268e9706128d119eab6a97dde210f0a",
"text": "IANAL. In the UK, you (as a Director) would have obligations to minimise any tax liabilities under these two clauses: http://www.legislation.gov.uk/ukpga/2006/46/section/172 http://www.legislation.gov.uk/ukpga/2006/46/section/174 Although I can't see the CPS bringing any cases of criminal charge against over-payment of taxes. It wouldn't be unrealistic to have a scenario where shareholders of a failed enterprise sued a Director who was negligent in minimising tax liabilities. That said, I think the Starbucks strategy is flagrantly breaching the intent of the law, if not the letter.",
"title": ""
},
{
"docid": "0ebfb0ff79a08dd8776c2fb71f1a5123",
"text": "In most cases , preferential sharesholders are paid dividends first before common shareholders are paid . In the event of a company bankruptcy , preferential shareholders have the right to be paid first before common shareholders. In exchange for these benefits , preferential shareholders do not have any voting rights. The issuing of preferential shares has no impact on share prices or issuing of bonuses , it is a mere coincidence that the stock price went up",
"title": ""
},
{
"docid": "56f607bca64522b8754268ef2dbe932a",
"text": "Once the business is shut down, you'll need to show that the corporation is in bankruptcy and the amounts are unrecoverable. You can then report it as investment loss. I suggest talking to a tax adviser (EA/CPA licensed in your State), and maybe an attorney, on what the specific technical details are.",
"title": ""
},
{
"docid": "c7238a79b7b4178cf71c34c008b89d9d",
"text": "You can avoid companies that might go bankrupt by not buying the stock of companies with debt. Every quarter, a public company must file financials with the EDGAR system called a 10-Q. This filing includes unaudited financial statements and provides a continuing view of the company's financial position during the year. Any debt the company has acquired will appear on this filing and their annual report. If servicing the debt is costing the company a substantial fraction of their income, then the company is a bankruptcy risk.",
"title": ""
},
{
"docid": "e0622d970d4c45fc8bc60f986f22d96c",
"text": "My understanding was that if a company buys back shares then those shares are 'extinguished' I.e. the rest of the shareholders now own a greater portion of the company. However, if there is only one share left, then the company could not buy it because doing so would extinguish it leaving the company without an owner. That result would run contrary to the requirements for an incorporated company in countries like NZ and Australia.",
"title": ""
},
{
"docid": "0b68acfc83ae9ef8c7430c5cd4ceedc3",
"text": "\"Generally \"\"default\"\" means that the company cannot pay off their debts, and since debt holders get paid before equity holders, their equity would be effectively worthless. That said, companies can emerge from Chapter 11 bankruptcy (reorganization) and retain equity value, but it is rare. Most times, stocks are de-listed or frozen on stock exchanges, and company's reorganization plan will cancel all existing equity shares, instead focusing all of their attention on paying back as much debt as possible. If the company issues new equity after reorganizing, it might provide a way for holders of the original equity to exchange their shares for the new equity, but it is rare, and the value is usually significantly less that the value of the original equity.\"",
"title": ""
},
{
"docid": "ebf7f2ffdd88a794594aa313b48eb2d1",
"text": "yeah but most likely, it's a 1x liquidation preference. The startup isn't going to generate cash flows enough to pay off the initial investment to the investor. Technically it isn't exactly specified as only triggered on a liquidation event because OP didn't specify the real legal language but it seems likely that's the case. Point 2 is exactly what a liquidation preference is. No way the owner of the company is participating in anything until the investor gets his initial investment back.",
"title": ""
},
{
"docid": "6a41f75249c1d9d408263920982a312c",
"text": "\"What drives the stock of bankrupt companies? Such stock is typically considered \"\"distressed assets\"\". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? \"\"There's a sucker born every minute.\"\" - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity.\"",
"title": ""
},
{
"docid": "4cf93f14c4c9dbe35734cc4af063d42a",
"text": "As others have said, it simply makes you a part owner. Even if you have ethical objections to a company's behavior, I'd argue that investing in it and using the proxy votes to influence the company's decisions might be even more ethical than not investing.",
"title": ""
}
] |
fiqa
|
04bab6584e92a3fc68826e20143d2669
|
Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below)
|
[
{
"docid": "884ddfb3e4e3765cfb75b301ff9dd45a",
"text": "If you're repairing an existing appliance - its an expense. If you're replacing an existing appliance with a new one - that's disposing of one capital asset and putting in service another. You depreciate the new one and you dispose of the old one (if not fully depreciated - talk to your tax adviser how to handle the remaining value). The additional costs of the fixes that are not related to the installation of the new appliance are regular maintenance expenses, so you have to get an itemized invoice from the plumber to know what to expense and what to capitalize.",
"title": ""
},
{
"docid": "6832d91bbae329fef6eced1aecf5ac9a",
"text": "Pub 527 my friend. It gets depreciated. Table 1-1 on page 5.",
"title": ""
},
{
"docid": "bb65dd7f717ccf993086167319f91fac",
"text": "You may be able to choose. As a small business, you can expense certain depreciable assets (section 179). But by choosing to depreciate the asset, you are also increasing the cost-basis of the property. Are you planning to sell the property in the next couple of years? Do you need a higher basis? Section 179 - Election to expense certain depreciable business assets",
"title": ""
}
] |
[
{
"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": "fff2035f2cc2849e6eba49a486a61c8c",
"text": "\"Not sure what you are talking about. The house isn't part of a business so neither of you can deduct half of normal maintenance and repairs. It is just the cost of having a house. The only time this would be untrue is if the thing that you are buying for the house is part of a special deduction or rebate for that tax year. For instance the US has been running rebates and deductions on certain household items that reduce energy - namely insulation, windows, doors, and heating/cooling systems (much more but those are the normal things). And in actuality if your brother is using the entire house as a living quarters you should be charging him some sort of rent. The rent could be up to the current monthly market price of the home minus 50%. If it were my family I would probably charge them what I would pay for a 3% loan on the house minus 50%. Going back to the repairs... Really if these repairs are upgrades and not things caused by using the house and \"\"breaking\"\" or \"\"wearing\"\" things you should be paying half of this, as anything that contributes to the increased property value should be paid for equally if you both are expecting to take home 50% a piece once you sell it.\"",
"title": ""
},
{
"docid": "fd689b6def8ac021d8eadf33bbcd8b36",
"text": "Remember this when you rent. You may get 1,600 back - however, you have to provide insurance on the house still, 10% of that rent goes into a repair fund for things that break. You don't get compensated for months without a renter. You still pay property tax and income tax. If you have someone manage the house, you have to pay their fee (10%+ usually). Lots of variables when renting (I looked into doing the same thing)",
"title": ""
},
{
"docid": "665da3fdf06fdca87eb1d54a26e426fb",
"text": "\"Bad areas are tough to value as a owner-occupied property, because the business model for being a slumlord is to rent apartments in absentia, usually to tenants receiving goverment subsidies such as Section 8 vouchers. The vouchers are based on a prevailing rent, which are often on par with nice suburban apartment complexes due to how that \"\"prevailing\"\" rate is calculated. So the value of the house is really an annuity calculation. You figure out the potential rental cash flow and apply whatever your local market premium is. The point is, doing an apples to apples comparison is going to be tough, and justifying the cost of repairs that aren't remediating health and safety issues probably won't be recoverable from a home valuation standpoint. A buyer would probably rip out your central air conditioner and sell it! If I were in your shoes, I'd look at the time horizon that you think you're going to be there and amortize the cost over that period. Assuming your mortgage is small and you're staying for about 5 years, spending $10k costs you about $170 a month. Your reward is a modern A/C and heating system. Compare that cost to the cost of moving and your desires and see if it's worth it to you.\"",
"title": ""
},
{
"docid": "504db960177f3094e6a274c3880f6531",
"text": "The other thing that you may or may not be considering is the fact that when she moves or otherwise ceases to live in that condo, you could then rent the unit out to others at the inflation adjusted rent price for the area. You could continue to build equity in the property for a fraction of the cost, and it would continue to be a tax write-off once your mother is not living there. While you have more maintenance and repairs cost when renters live there (typically, anyway), if inflation continues to carry on at about 4-5%, then you would be potentially renting the unit out at between $2,500 and $2,850 by the 10th year from now. Obviously, there are other considerations to be made as well, but those are some additional factors that don't seem to have been addressed in any of the above comments.",
"title": ""
},
{
"docid": "9f47d532ee2ff1cd4da42aa86e7f3042",
"text": "Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt) have different end of term dates but by less than a month. Both have summer sessions, but most students do not stay over the summer. You can rent over the summer, but prices fall by a lot. Thirty to forty thousand students leave over the summer between the two. Only ten to twenty thousand remain throughout the year and not all of those are in Oakland (the neighborhood in Pittsburgh where the universities are located). So many of the landlords in Oakland have the same problem. Your competitors will cut their rates to try to get some rent for the summer months. This also means that you have to handle eight, nine, and three month leases rather than year long and certainly not multiyear leases. You're right that you don't have to buy the latest appliances or the best finishes, but you still have to replace broken windows and doors. Also, the appliances and plumbing need to mostly work. The furnace needs to produce heat and distribute it. If there is mold or mildew, you will have to take care of it. You can't rely on the students doing so. So you have to thoroughly clean the premises between tenants. Students may leave over winter break. If there are problems, the pipes may freeze and burst, etc. Since they're not there, they won't let you know when things break. Students drop out during the term and move out. You probably won't be able to replace them when that happens. If you have three people in two bedrooms, two of them may be in a romantic relationship. Romantic relationships among twenty-year olds end frequently. Your three people drops back to two. Your recourse in that case is to evict the remaining tenants and sue for breach of contract. But if you do that, you may not replace the tenants until a new term starts. Better might be to sue the one who left and accept the lower rent from the other two. But you likely won't get the entire rent amount for the remainder of the lease. Suing an impoverished student is not the road to riches. Pittsburgh is expected to have a 6.1% increase in house prices which almost all of it is going to be pure profit. I don't know specifically about Pittsburgh, but in the national market, housing prices are about where they were in 2004. Prices were flat to increasing from 2004 to 2007 and then fell sharply from 2007 to 2009, were flat to decreasing from 2009 to 2012, and have increased the last few years. Price to rent ratios are as high now as in 2003 and higher than they were the twenty years before that. Maybe prices do increase. Or maybe we hit a new 20% decrease. I would not rely on this for profit. It's great if you get it, but unreliable. I wouldn't rely on estimates for middle class homes to apply to what are essentially slum apartments. A 6% average may be a 15% increase in one place and a 3% decrease in another. The nice homes with the new appliances and the fancy finishes may get the 15% increase. The rundown houses in a block where students party past 2 AM may get no increase. Both the city of Pittsburgh and the county of Allegheny charge property taxes. Schools and libraries charge separate taxes. The city provides a worksheet that estimates $2860 in taxes on a $125,000 property. It doesn't sound like you would be eligible for homestead or senior tax relief. Realtors should be able to tell you the current assessment and taxes on the properties that they are selling you. You should be able to call a local insurance agent to find out what kinds of insurance are available to landlords. There is also renter's insurance which is paid by the tenant. Some landlords require that tenants show proof of insurance before renting. Not sure how common that is in student housing.",
"title": ""
},
{
"docid": "8458e6ebcc66911b291d37d15bc50a86",
"text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.",
"title": ""
},
{
"docid": "79150c526f9587a5527db7e2fe6c664b",
"text": "\"I would not classify utilities (including electric) as additional fees. In many cases you interact directly with the utility (not the landlord) and pay for what you use. There are exceptions like when renting a room. The renter's insurance also is not part of the landlord's profit, it is simply there to protect you. In the case of loss, the landlord cannot insure your property. You have to provide your own insurance. Its pretty low costs, typically less than 20 per month. The application fee is typical. The move in fee is something that could be negotiated away and sounds pretty sketchy. You can always \"\"let your fingers do the walking\"\" and find out the fees before you look at the place.\"",
"title": ""
},
{
"docid": "d8aaee2278cffb583d47b047c320b68d",
"text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases.",
"title": ""
},
{
"docid": "fc0807c84be4f0eee1f29b291d2316d6",
"text": "Either way, (lease or buy), it's likely going to be an expense, not a depreciation. You would expense the entire lease amount - whatever that is in the year it was paid. A $2k-$3k computer probably isn't worth the trouble of recording it as a Fixed Asset and depreciating it yearly. I work for a company that buys thousands of PCs a year for its employees and we have a hard rule: If it's under $3k, it's an expense not an asset. If you were buying $20k-$50k servers, this would be a different conversation both because of the price and the life of the item. Because it's such a small amount (unless you really are buying $20k PCs), it doesn't really matter whether it's your biggest expense or not, it's likely just an expense. Though, no one is preventing you from depreciating it over 5 years if you wanted to. See: https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/sale-or-trade-of-business-depreciation-rentals/depreciation-recapture/depreciation-recapture In summary: I would say your question is more of a business sense question than a tax question. Is it worth it to you to lease instead of buying because you are getting a new PC so often? Btw: every 2 years is not that often. It's average. Whatever your decision, I think the answer for taxes is the same: Expense it all in the year it was incurred unless you really want to spread it out and depreciate.",
"title": ""
},
{
"docid": "b2f4f176d71865e5de83356df202f85d",
"text": "Sticking strictly to the money aspects. I am also assuming United States. The lender will need to know before applying for the loan that the property will be a rental, they may even need to know the scope of the number of renters. Insurance. There are two types you will need to include Income taxes. If you do run a profit you will have taxes. The surprising thing for many first time landlords is that they don't realize that the principal of the loan payment is not considered a deductible expense. Of course there is a benefit to depreciation.",
"title": ""
},
{
"docid": "3796346d54696bfa1a1766980aa57823",
"text": "Both of these terms do refer to your profit; they're just different ways of evaluating it. First, your definition of capitalization rate is flipped. As explained here, it should be: On the other hand, as explained here: So cap rate is like a reverse unit cost approach to comparing two investments. If house A costs $1M and you'll make $50K (profit) from it yearly, and house B costs $1.33M and you'll make $65K (profit) from it yearly, then you can compute cap rates to see that A is a more efficient investment from the point of view of income vs. amount-of-money-you-have-stuck-in-this-investment-and-unavailable-for-use-elsewhere. Profit margin, on the other hand, cares more about your ongoing expenses than about your total investment. If it costs less to maintain property B than it does to maintain property A, then you could have something like: So B is a more efficient investment from the point of view of the fraction of your revenue you actually get to keep each year. Certainly you could think of the property's value as an opportunity cost and factor that into the net profit margin equation to get a more robust estimate of exactly how efficient your investment is. You can keep piling more factors into the equation until you've accounted for every possible facet of your investment. This is what accountants and economists spend their days doing. :-)",
"title": ""
},
{
"docid": "257c70a9f954a96a7657e3761647efee",
"text": "Think carefully about the added expenses. It may still make sense, but it probably won't be as cheap as you are thinking. In addition to the mortgage and property taxes, there is also insurance and building maintenance and repairs. Appliances, carpets, and roofs need to be replaced periodically. Depending on the area of the country there is lawn maintenance and now removal. You need to make sure you can cover the expenses if you are without a tenant for 6 months or longer. When tenants change, there is usually some cleaning and painting that needs to be done. You can deduct the mortgage interest and property taxes on your part of the building. You need to claim any rent as income, but can deduct the other part of the mortgage interest and taxes as an expense. You can also deduct building maintenance and repairs on the rental portion of the building. Some improvements need to be depreciated over time (5-27 years). You also need to depreciate the cost of the rental portion of the building. This basically means that you get a deduction each year, but lower the cost basis of the building so you owe more capital gains taxes when you sell. If you do this, I would get a professional to do your taxes at least the first year. Its not hard once you see it done, but there are a lot of details and complications that you want to get right.",
"title": ""
},
{
"docid": "4f9cb22a348d006122b9c1cb093de2e7",
"text": "You can't compare the different quotes unless they have the same numbers to work with. The big companies should use similar models to come up with values for the contents. In many cases they will assume some standard values for things like appliances. Yes you have a stove, but unless it is commercial grade they won't care when giving you a quote. If you have very expensive items you may need a rider to cover them. There is not relationship between the county assessment and the cost to rebuild. The insurance doesn't cover the land. You have to make sure that all quotes include the same riders: cost to put you in a motel, flood insurance... and the same deductibles. Your state may have an insurance office that can help answer your question. Here is the one for Virginia.",
"title": ""
},
{
"docid": "5decb6a6d267bdd7e47d67861b736515",
"text": "The only card I've seen offer this on credit card purchases is Discover. I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays. (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not. It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee. Now I very rarely go to the ATM. What is in it for Discover? They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period. And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business. And happier customers. What is in it for the grocer? Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally.",
"title": ""
}
] |
fiqa
|
b6fcaf9cd49078416abea00dcdda39e3
|
What effect does a company's earnings have on the price of its stock?
|
[
{
"docid": "52d826b925842aa604e0b295fcd54608",
"text": "\"No, the stock market is not there for speculation on corporate memorabilia. At its base, it is there for investing in a business, the point of the investment being, of course, to make money. A (successful) business earns money, and that makes it valuable to its owners since that money can be distributed to them. Shares of stock are pieces of business ownership, and so are valuable. If you knew that the business would have profit of $10,000,000 every year, and would distribute that to the owners of each of its 10,000,000 shares each year, you would know to that each share would receive $1 each year. How much would such a share be worth to you? If you could instead put money in a bank and get 5% a year back, to get $1 a year back you would have to put $20 into the bank. So maybe that share of stock is worth about $20 to you. If somebody offers to sell you such a share for $18, you might buy it; for $23, maybe you pass up the offer. But business is uncertain, and how much profit the business will make is uncertain and will vary through time. So how much is a share of a real business worth? This is a much harder call, and people use many different ways to come up with how much they should pay for a share. Some people probably just think something like \"\"Apple is a good company making money, I'll buy a share at whatever price it is being offered at right now.\"\" Others look at every number available, build models of the company and the economy and the risks, all to estimate what a share might be worth, more or less. There is no indisputable value for a share of a successful business. So, what effect does a company's earnings have on the price of its stock? You can only say that for some of the people who might buy or sell shares, higher earnings will, all other thing being equal, have them be willing to spend more to buy it or demand more when selling it. But how much more is not quantifiable but depends on each person's approach to the problem. Higher earnings would tend to raise the price of the stock. Yet there are other factors, such as people who had expected even higher earnings, whose actions would tend to lower the price, and people who are OK with the earnings now, but suspect trouble for the business is appearing on the horizon, whose actions would also tend to lower the price. This is why people say that a stock's price is determined by supply and demand.\"",
"title": ""
},
{
"docid": "7604afb3ccde436812d42a15983537ec",
"text": "A common (and important) measure of a stock's value is the price/earnings ratio, so an increase in earnings will normally cause the stock price to increase. However, the price of the stock is based on a guess of the value of the company some time (6 months?) in the future. So an increase in earnings today probably makes a higher earnings more likely in the future, and puts upward pressure on the price of the stock. There are a lot of other factors in stock prices, such as publicity, dividends, revenue, trends, company stability, and company history. Earnings is a very important factor, but not the only factor determine the value (and so stock price) of a company.",
"title": ""
},
{
"docid": "649ef789d568c6c872bfffbf1b6f17af",
"text": "Your autograph analogy seems relevant to me. But it is not just speculation. In the long run, investing in stocks is like investing in the economy. In the long run, the economy is expected to grow , hence stock prices are expected to go up. Now in theory: the price of any financial instrument is equal to the net present value today of all the future cash flows from the instrument. So if company's earnings improve, shareholders hope that the earnings will trickle down to them either in form of dividends or in form of capital gain. So they buy the stock, creating demand for it. I can try to explain more if this did not make any sense. :)",
"title": ""
},
{
"docid": "cbe185e1d074f6ebf2fe638058bf87b2",
"text": "Market price of a stock typically trades in a range of Price/Earnings Ratio (P/E ratio). Or in other words, price of a stock = Earnings * P/E ratio Because of this direct proportionality of stock price with earnings, stock prices move in tandem with earnings.",
"title": ""
}
] |
[
{
"docid": "3fb7e228563796fa46d65b6918fe1cd1",
"text": "I have heard that people say the greater earning means greater intrinsic value of the company. Then, the stock price is largely based on the intrinsic value. So increasing intrinsic value due to increasing earning will lead to increasing stock price. Does this make sense ? Yes though it may be worth dissecting portions here. As a company generates earnings, it has various choices for what it can do with that money. It can distribute some to shareholders in the form of dividends or re-invest to generate more earnings. What you're discussing in the first part is those earnings that could be used to increase the perceived value of the company. However, there can be more than a few interpretations of how to compute a company's intrinsic value and this is how one can have opinions ranging from companies being overvalued to undervalued overall. Of Mines, Forests, and Impatience would be an article giving examples that make things a bit more complex. Consider how would you evaluate a mine, a forest or a farm where each gives a different structure to the cash flow? This could be useful in running the numbers here.",
"title": ""
},
{
"docid": "c1c2620e960c66a3465df030519f8644",
"text": "\"It is important to first understand that true causation of share price may not relate to historical correlation. Just like with scientific experiments, correlation does not imply causation. But we use stock price correlation to attempt to infer causation, where it is reasonable to do so. And to do that you need to understand that prices change for many reasons; some company specific, some industry specific, some market specific. Companies in the same industry may correlate when that industry goes up or down; companies with the same market may correlate when that market goes up or down. In general, in most industries, it is reasonable to assume that competitor companies have stocks which strongly correlate (positively) with each-other to the extent that they do the same thing. For a simple example, consider three resource companies: \"\"Oil Ltd.\"\" [100% of its assets relate to Oil]; \"\"Oil and Iron Inc.\"\" [50% of its value relates to Oil, 50% to Iron]; and \"\"Iron and Copper Ltd.\"\" [50% of its value relates to Iron, 50% to Copper]. For each of these companies, there are many things which affect value, but one could naively simplify things by saying \"\"value of a resource company is defined by the expected future volume of goods mined/drilled * the expected resource price, less all fixed and variable costs\"\". So, one major thing that impacts resource companies is simply the current & projected price of those resources. This means that if the price of Oil goes up or down, it will partially affect the value of the two Oil companies above - but how much it affects each company will depend on the volume of Oil it drills, and the timeline that it expects to get that Oil. For example, maybe Oil and Iron Ltd. has no currently producing Oil rigs, but it has just made massive investments which expect to drill Oil in 2 years - and the market expects Oil prices to return to a high value in 2 years. In that case, a drop in Oil would impact Oil Inc. severely, but perhaps it wouldn't impact Oil and Iron Ltd. as much. In this case, for the particular share price movement related to the price of Oil, the two companies would not be correlated. Iron and Copper Ltd. would be unaffected by the price of Oil [this is a simplification; Oil prices impact many areas of the economy], and therefore there would be no correlation at all between this company's shares. It is also likely that competitors face similar markets. If consumer spending goes down, then perhaps the stock of most consumer product companies would go down as well. There would be outliers, because specific companies may still succeed in a falling market, but in generally, there would be a lot of correlation between two companies with the same market. In the case that you list, Sony vs Samsung, there would be some factors that correlate positively, and some that correlate negatively. A clean example would be Blackberry stock vs Apple stock - because Apple's success had specifically negative ramifications for Blackberry. And yet, other tech company competitors also succeeded in the same time period, meaning they did not correlate negatively with Apple.\"",
"title": ""
},
{
"docid": "bbc616ead23979dbfb6b2f964398e6d1",
"text": "In order: A seller of the stock (duh!). You don't know who or why this stock was sold. It could be any reason, and is of no concern of yours. It doesn't matter. Investors (pension funds, hedge funds, individual investors, employees, management) sell stock for many reasons: need cash, litigation, differing objectives, sector rotation, etc. To you, this does not matter. Yes, it does affect stock market prices: If you were not willing to buy that amount of shares, and there were no other buyers at that price, the seller would likely choose to lower the price offered. By your purchase, you are supporting the price.",
"title": ""
},
{
"docid": "e0032eafca184fb6973d7d72b2f60f85",
"text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.",
"title": ""
},
{
"docid": "fc1bf4de61c4935ba16ddaa14ac96f2f",
"text": "according to me it's the news about a particular stock which makes people to buy or sell it mostly thus creates a fluctuation in price . It also dependents on the major stock holder.",
"title": ""
},
{
"docid": "c6cb4a956263e8a41ee3791e633b372f",
"text": "Would you consider the owner of a company to be supporting the company? If you buy stock in the company you own a small part of that company. Your purchase also increases the share price, and thus the value of the company. Increased value allows the company to borrow more money to say expand operations. The affect that most individuals might have on share price is very very small. That doesn't mean it isn't the right thing for you to do if it is something you believe in. After all if enough people followed those same convictions it could have an impact on the company.",
"title": ""
},
{
"docid": "bd59a0d6be04b9e7ff8cc04436d98108",
"text": "\"What does it mean in terms of share price? Should the share price increase by 15 cents? No, but you're on the right track. In theory, the price of a share reflects it's \"\"share\"\" of time discounted future earnings. To put it concretely, imagine a company consistently earning 15 cents a share every year and paying it all out as dividends. If you only paid 25 cents for it, you could earn five cents a share by just holding it for two years. If you imagine that stocks are priced assuming a holding period of 20 years or so, so we'd expect the stock to cost less than 3 dollars. More accurately, the share price reflects expected future earnings. If everyone is assuming this company is growing earnings every quarter, an announcement will only confirm information people have already been trading based on. So if this 15 cents announcement is a surprise, then we'd expect the stock price to rise as a function of both the \"\"surprise\"\" in earnings, and how long we expect them to stay at this new profitability level before competition claws their earnings away. Concretely, if 5 cents a share of that announcement were \"\"earnings surprise,\"\" you'd expect it to rise somewhere around a dollar.\"",
"title": ""
},
{
"docid": "2179472f1459f1f7ec70b6aac3a9d3be",
"text": "You are right that Facebook really doesn't get impacted as they got their $38. However it would make it slightly more difficult for Facebook to raise more money in future as large investors would be more cautious. This can keep the price lowers than it actually needs to be. Quite a few companies try to list the IPO at lower price so that it keeps going up and have more positive effect overall there by making it easier for future borrowings. See related question Why would a company care about the price of its own shares in the stock market?",
"title": ""
},
{
"docid": "a025d389c97e33531f1be1392b2444c3",
"text": "\"When you buy a stock, you're really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as \"\"earnings\"\" (for one year), it would mean that you would get all future earnings for \"\"free.\"\" That's not likely to happen unless 1) the company is in liquidation,\"\" meaning \"\"no future\"\" and 2) it earned ALL of the money it ever earned in the past year, meaning \"\"no past.\"\" If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year.\"",
"title": ""
},
{
"docid": "d5607bef00056a09a17bce283bef755b",
"text": "Here are some significant factors affect the company stock price performance: Usually, profitability is known to the public through the financial statements; it won't be 100% accurate and people would also trade the stock with the price not matching to the true value of the firm. Still there are dozens of other various reasons exist. People are just not behaving as rational as what the textbook describes when they are trading and investing.",
"title": ""
},
{
"docid": "afc87e138f5ad7836364c72b04e864f2",
"text": "News about a company is not the only thing that affects its stock's price. There is also supply and demand. That, of course, is influenced by news, but it is not the only actor. An insider, with a large position in their company's stock, may want to diversify his overall portfolio and thus need to sell a large amount of stock. That may be significant enough to increase supply and likely reduce the stock's price somewhat. That brings me to another influence on stock price: perception. Executives, and other insiders with large positions in their company's stock, have to be careful about how and when they sell some of that stock as to not worry the markets. Many investors watch insider selling to gauge the health of the company. Which brings me to another important point. There are many things that may be considered news which is material to a certain company and its stock. It is not just quarterly filings, earnings reports and such. There is also news related to competitors, news about the economy or a certain sector, news about some weather event that affects a major supplier, news about a major earthquake that will impact the economy of a nation which can then have knock-on effects to other economies, etc... There are also a lot of investors with varying needs which will influence supply and demand. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. Meanwhile, individual investors will make their transactions at varying times during the day. In the aggregate, that may have significant impacts on supply and demand. The overall point being that there are a lot of inputs and a lot of actors in a complicated system. Even if you focus just on news, there are many things that fall into that category. News does not come out at regular intervals and it does not necessarily spread evenly. That alone could make for a highly variable environment.",
"title": ""
},
{
"docid": "0620cbca97d934750faaf78e76922855",
"text": "Aside from the market implications Victor and JB King mention, another possible reason is the dividends they pay. Usually, the dividends a company pays are dependent on the profit the company made. if a company makes less profit, the dividends turn out smaller. This might incite unrest among the shareholders, because this means that they get paid less dividends, which makes that share more likely to be sold, and thus for the price to fall.",
"title": ""
},
{
"docid": "ba22f2742f109ebad589fa5564b85d94",
"text": "1) What's the point of paying a dividend if the stock price automatically decreases? Don't the shareholders just break even? When the company earns cash beyond what is needed for expenses, the value of the firm increases. As a shareholder, you own a piece of that increased value as soon as the company earns it. When the dividend is paid, the value of the firm decreases, but you break even on the dividend transaction. The benefit to you in holding the company's shares is the continually increasing value, whether paid out to you, or retained. Be careful not to confuse the value of the firm with the stock price. The stock price is ever-changing, in the short-term driven mostly by investor emotion. Over the long term, by far the largest effect on stock price is earnings. Take an extreme, and simplistic example. The company never grows or shrinks, earnings are always the same, there is no inflation :) , and they pay everything out in dividends. By the reasoning above, the firm value never changes, so over the long-term the stock price will never change, but you still get your quarterly dividends.",
"title": ""
},
{
"docid": "fcba21aa3c74e9db304b5f7ec2423be7",
"text": "It is unlikely that buying 100 shares will have any effect on a stock's price, unless the stock's average trading volume is incredibly low. That being said, no matter how many share you buy, there's no way to know what the impact on the price will be, because that's only one factor in how shares are priced. If anyone could figure out the answer to your question then they'd be extremely rich, because they'd simply watch for big share trades and then buy those stocks on the way up. The market makers who actually execute the trades are the ones who set the prices, and most stocks have multiple market makers trading the stock, so the bid/ask you see is the highest bid and lowest ask. The market makers set the price based on what the trend of the stock is. If, for instance, there's a large number of sell orders against a stock, the market makers will start dropping the bid prices as they fill execution orders, and as they see buy orders increase, they'll raise ask prices as they fill execution orders. The market makers earn the difference between what they paid to buy someone's stock who was selling and what they get from someone else who buys it. This is a simplified explanation, so pro traders, don't beat me up! (grin) So, basically, it takes quite a bit of share volume in one direction or another to affect a stock's price. I can guarantee a 100-share trade wouldn't even be noticed by market makers. I hope this helps. Good luck!",
"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": ""
}
] |
fiqa
|
4773203adaedb494ffe5b33c046ab4d2
|
What U.S. banks offer two-factor authentication (such as password & token) for online banking?
|
[
{
"docid": "b1ebfc2c86a395f575eb6475a8596391",
"text": "\"StasM, It's taken a while but many banks offer tokens - although they tend to limit the accounts for which they will be issued. All of the following issue tokens, but there are many more: CitiBank JP Morgan Union Bank Wells Fargo Callaway Bank Wachovia Bank of North Dakota The River Bank of Wisconsin Metcalf Bank, Kansas Stonebridge Bank In 2005 federal regulators stipulated that banks needed to get better with security for online banking customers, but they did not endorse a particular technology. Tokens (aka fobs) were endorsed. The news was negatively received by the banks because putting more steps in the way of a customer drives the customer away. See this 2005 report for more info: http://www.usatoday.com/tech/news/computersecurity/2005-11-02-cybercrime-prevention_x.htm My guess is a tipping point was reached since then, where customers became savvy of the risks, and that the \"\"extra steps\"\" became less an issue than the \"\"extra security\"\".\"",
"title": ""
},
{
"docid": "ba2f94e4f4a3b3116dbe2dd98d409f72",
"text": "There are very few banks which offer two-factor authentication. Part of the reason is cost. Providing a token to every account-holder is expensive, not just in the device or system, but in providing support and assistance to the millions of people who won't have the faintest idea how it works and complain that they no longer have access to their accounts. That said, it is sometimes available on request for personal accounts and many banks require it for their business clients. My HSBC Business account comes with two-factor as default and it works extremely well. There is also the pseudo-two-factor security offered by Visa and MasterCard (3-D secure) which performs a similar function.",
"title": ""
},
{
"docid": "6c3c5e2804a3f4ff19c1a1293a007deb",
"text": "E*Trade offers banking services, and will provide you with a security token free if you have sufficient assets there ($50,000). Otherwise they'll charge you a $25 fee.",
"title": ""
},
{
"docid": "a8ec95e7608405e25bee1e62d62ef0dc",
"text": "Bank of America supports two-factor authentication using SMS messages, similar to PayPal. You can enable the feature from Online Banking under Customer Service -> SafePass Settings. Update: Over the weekend of July 28th, 2012, the SafePass control on the authentication page was updated to simple HTML + JavaScript instead of Flash, so that it is now possible to login from Safari on iOS, among others.",
"title": ""
},
{
"docid": "42c72db8ab6854be3d6437c02d71e83a",
"text": "Some credit unions also offer them and support Business banking as well. First Tech Credit Union is a great example. They also have the most security-oriented banking website I've seen to date. https://www.firsttechfed.com/ As a side note I've found that Credit Unions are a MUCH better deal for personal and business banking.",
"title": ""
},
{
"docid": "a41c9f182f2aa4a77e16a1f6c6a69eb4",
"text": "USAA does - that's my bank. Wells Fargo tries to determine whether the online activity is a risk; if it is, they'll require an SMS code or phoned code be entered. You can get a fairly definitive list of online companies at twofactorauth.org.",
"title": ""
}
] |
[
{
"docid": "fcea2b8b571f1859139d2c628ccf500a",
"text": "I have USAA and the home loan process was a nightmare. My account was also compromised but I caught it immediately because they sent me an alert of a large sum of money being transferred to my checking account, so there is that. I just found out that Navy Federal finally accepts Army veterans (it hadn't up until a couple of years ago) so I have an account with them just so I can get different loan options and credit card rates. Navy Federal has minimums for getting ATM refunds while USAA doesn't, so for now I just have a savings account with them.",
"title": ""
},
{
"docid": "31fc9c275253a8a25056530c6bdd76d5",
"text": "I read an article where this website did an interview with them and concluded its very sketchy and possibly illegal. They refused to give out their FDIC number and they got the high interest rate by selling personal customer information to third parties",
"title": ""
},
{
"docid": "807a92ad542d215ad05806d41571e244",
"text": "When I went on vacation to London a few years ago, I looked around at banks with ATM deals with UK banks. I found that B of A had a deal with a UK bank that you could use their ATMs to take out money from your US account for practically no fees. So the week or so before I left, I opened an account at B of A, put a bunch of money in it, and used the B of A debit card during my trip as much as possible.",
"title": ""
},
{
"docid": "fd5a1b84940c079a7c2f75cafa6f8904",
"text": "Buxfer is a personal-finance web app which you might like. It's not open-source. But at least none of your complaints about financeworks.intuit.com apply to Buxfer. Buxfer offers a piece of software you can download to your own PC, called Firebux. This macro-recording software provides automation that helps you download statements and upload them to Buxfer. So you never have to give Buxfer any of your bank or brokerage usernames or passwords. Buxfer and Firebux are both free of charge. Wesabe, another personal-finance web app, also used to offer data-uploader software, but Wesabe has now gone out of business.",
"title": ""
},
{
"docid": "44309cd550236d0b4bb90aa00c1efe11",
"text": "I use online banking and bill pay for all accounts where I can control when and how much is paid, where I push the funds out. The bills from those companies that want to be allowed to reach into my account and pull money automatically (e.g. my Chase mortgage) I simply will not enroll - they get a paper check in the mail. There is no way I am giving these cocksucker criminals *permission* to take money out of my accounts.",
"title": ""
},
{
"docid": "2bcc07d2a1ecf891d4e6b74729d40f57",
"text": "In addition to the other answers, Harris Bank (now owned by BMO) allows Canadians living in Canada to open accounts, perhaps they consider other countries as well. They have excellent customer service.",
"title": ""
},
{
"docid": "7f27667221cca30f0a98511cc22f04d9",
"text": "I'm always hesitant to use local credit unions because I love accessing all atms fee free, having services available 24/7, having robust, safe and audited online services, and having a big enough bank that all major third party tools interface with it. Joe Schmo Local Credit Union has a lot of good services, but audited and secure online banking? No fee nationwide ATMs? Native interfacing to major tools? I just don't see it often. I shudder to think of the security at small bank websites, frankly.",
"title": ""
},
{
"docid": "af1e66be7a0e8c8af69736054273ebf8",
"text": "I'm working on some banking-related research, and have run into a problem: financial data switches between using RSSDIDs and FDIC certs to identify individual banks. I'm looking for an efficient way to convert between ID types or include both, as I am merging large financial data sets that each use different ID types. I have found [this](https://www.ffiec.gov/nicpubweb/nicweb/searchform.aspx), which allows for conversion one-by-one. However, I'm working with a very large set of bank data, and would really appreciate a more efficient way to do this. Does anyone know of a data set that matches certs to RSSDIDs? edit: just in case someone else needs it, the call report bulk downloads on the ffiec site have both the CERTs and RSSDIDs, so you can use those.",
"title": ""
},
{
"docid": "7dc7abd96a4232b1049975ebf8aa602f",
"text": "Capital One 360. No minimums balance, no fees. Everything's online. Make deposits using an app or an image of the check. ATMs are free almost everywhere.",
"title": ""
},
{
"docid": "38a1e558bd7d0f7595a41143e9be2a8f",
"text": "Personal finance startup BillGuard has raised $10 million in second-round financing, and it’s using it to expand its service that helps protect accounts from fraudulent activity, the company said Tuesday. BillGuard protects users by registering their credit and debit cards and keeping an eye out for questionable and fraudulent charges. The company uses a crowdsourced approach to identifying unauthorized charges, by not only providing its own detection but also incorporating users’ billing complaints to track and analyze payments. BillGuard’s big second round of funding comes from a powerhouse group, including Khosla Ventures, Eric Schmidt’s Innovation Endeavors and Peter Thiel’s Founders Fund. “At Khosla Ventures we love entrepreneurs who dare to tackle large problems with disruptive, bottom-up methods,” said Vinod Khosla, founding partner of Khosla Ventures, in a statement. At present, BillGuard is free to use for anyone who wants to sign up. So how is it going to make money? The company is talking to large banks that could act as partners and incorporate BillGuard on a per-customer basis for a small fee. BillGuard is also exploring the idea of a merchant certification program that would let merchants have access to some its data, and follow up with customers who end up with fraudulent or questionable charges. New York-based BillGuard previously raised $3 million in its first round of funding from Bessemer Venture Partners and IA Ventures. BillGuard made its public debut on stage at the TechCrunch Disrupt conference in May 2011.",
"title": ""
},
{
"docid": "fbb67d40032f4f89b5d23f90cb3caa17",
"text": "I've had good experiences with a regional bank. All the perks of Wells but without the bullshit fees (except ATMs unfortunately but I just get cash back in the rare instance that a card / my phone won't cut it).",
"title": ""
},
{
"docid": "35521eafb32f55645fbcfd314a99e5f0",
"text": "While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right. It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers. Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month.",
"title": ""
},
{
"docid": "51fc55d0608b3e0ebf101e5489f185cb",
"text": "\"Much of what you're asking will not be disclosed for obvious security reasons, so don't be surprised when call center people say they \"\"don't know\"\". They may actually not know, but even if they did, they'd be fired if they were to say anything. Nothing could be a touchier subject than online security for the financial institutions. I don't know of reliable sources for the data you're asking about, and I don't know the banks or other firms would release it. For a bank to talk about its incidence rates of fraud would be unusual, because none of these institutions wants to appear \"\"less safe\"\" than their competitors. If there's any information out there then it's going to be pretty vague. None of these institutions wants the \"\"bad guys\"\" to know what their degree of success is against one bank versus any other. I hope that makes sense. The smaller banks usually piggyback their data on the networks of the larger financial institutions, so they are as secure (as a general rule) as the larger banks' networks they're running on. Also, your transactions on your credit cards are not generally handled directly by your bank anyway, unless it's one of the big heavyweights like Chase or Bank of America. All transactions run through merchant processors, who act as intermediaries between merchants and the banks, and those guys are pretty damned good at security. I've met some of the programmers, and they're impressive to me (I've been a programmer for 35 years and can't put a finger on these guys!). Most banks require that you must provide proof of identity when opening an account, and that ID must me the standards of the \"\"USA Real ID Act\"\". Here's an excerpt from the Department of Homeland Security website on what Real ID is: Passed by Congress in 2005, the REAL ID Act enacted the 9/11 Commission’s recommendation that the Federal Government “set standards for the issuance of sources of identification, such as driver's licenses.” The Act established minimum security standards for state-issued driver’s licenses and identification cards and prohibits Federal agencies from accepting for official purposes licenses and identification cards from states that do not meet these standards. States have made considerable progress in meeting this key recommendation of the 9/11 Commission and every state has a more secure driver’s license today than before the passage of the Act. In order for banks to qualify for FDIC protection, they must comply with the Real ID standards when opening accounts. As with any business (especially online), the most effective way to minimize fraud is vigilant monitoring of data. Banks and other online financial entities have become very adept at pattern analysis and simply knowing where and what to look for when dealing with their customers. There are certainly sophisticated measures which are kept carefully out of the public eye for doing this, and obviously they're good at it. They have to be, right? There's no way to completely eliminate fraud -- too much incentive exists for the \"\"bad guys\"\" to not constantly search for new ways to run their schemes, and the good guys will always be at the disadvantage, because there's no way to anticipate everything anyone might come up with. Just look at online viruses and malware. Your antivirus software can only deal with what it knows about, and the bad guys are always coming up with some new variant that gets past the filters until the antivirus maker learns of it and comes up with a way to deal with it. Your question's a good one to ponder, and I wouldn't want to be the chief of internet security for a bank or online institution, because I'd lay awake at night pondering when the call's going to come that we finally ran out of luck! (grin) I hope this was helpful. Good luck!\"",
"title": ""
},
{
"docid": "638947ae1029dd877c240c92506276e6",
"text": "Are there banks where you can open a bank account without being a citizen of that country without having to visit the bank in person? I've done it the other way around, opened a bank account in the UK so I have a way to store GBP. Given that Britain is still in the EU you can basically open an account anywhere. German online banks for instance allow you to administrate anything online, should there be cards issued you would need an address in the country. And for opening an account a passport is sufficient, you can identify yourself in a video chat. Now what's the downside? French banks' online services are in French, German banks' services are in German. If that doesn't put you off, I would name such banks in the comments if asked. Are there any online services for investing money that aren't tied to any particular country? Can you clarify that? You should at least be able to buy into any European or American stock through your broker. That should give you an ease of mind being FCA-regulated. However, those are usually GDRs (global depository receipts) and denominated in GBp (pence) so you'd be visually exposed to currency rates, by which I mean that if the stock goes up 1% but the GBP goes up 1% in the same period then your GDR would show a 0% profit on that day; also, and more annoyingly, dividends are distributed in the foreign currency, then exchanged by the issuer of the GDR on that day and booked into your account, so if you want to be in full control of the cashflows you should get a trading account denominated in the currency (and maybe situated in the country) you're planning to invest in. If you're really serious about it, some brokers/banks offer multi-currency trading accounts (again I will name them if asked) where you can trade a wide range of instruments natively (i.e. on the primary exchanges) and you get to manage everything in one interface. Those accounts typically include access to the foreign exchange markets so you can move cash between your accounts freely (well for a surcharge). Also, typically each subaccount is issued its own IBAN.",
"title": ""
},
{
"docid": "b404a0a65abf25390f0c7079320447eb",
"text": "Australia has a massive housing bubble (one of the last in the world to pop), no productivity growth (lots of investment in mining which hasn't yet payed off, though we'll do well if commodities pick up), and relies on China and India buying lots of coal and steel at historically high prices.",
"title": ""
}
] |
fiqa
|
df4c8e1e8fcd863176182074096716a8
|
How quickly does short float ratio/percent change?
|
[
{
"docid": "e8b3c1cca904587c28af58db32522868",
"text": "The short float ratio and percent change are all calculated based on the short interest (the total number of shares shorted). The short interest data for Nasdaq and NYSE stocks is published every two weeks. NasdaqTrader.com shows the exact dates for when short interest is published for Nasdaq stocks, and also says the following: FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date. The NYSE also shows the exact dates for when short interest is published for NYSE stocks, and those dates are exactly the same as for Nasdaq stocks. Since the short interest is only updated once every 2 weeks, there is no way to see real-time updating of the short float and percent change. That information only gets updated once every 2 weeks - after each publication of the short interest.",
"title": ""
}
] |
[
{
"docid": "22d688f1402e8f49f666d9a6935b39a0",
"text": "The volatility measures how fast the stock moves, not how much. So you need to know the period during which that change occurred. Then the volatility naturally is higher the faster is the change.",
"title": ""
},
{
"docid": "5d0b360de7d5745d006ae345e6072492",
"text": "The value of the asset doesn't change just because of the exchange rate change. If a thing (valued in USD) costs USD $1 and USD $1 = CAN $1 (so the thing is also valued CAN $1) today and tomorrow CAN $1 worth USD $0.5 - the thing will continue being worth USD $1. If the thing is valued in CAN $, after the exchange rate change, the thing will be worth USD $2, but will still be valued CAN $1. What you're talking about is price quotes, not value. Price quotes will very quickly reach the value, since any deviation will be used by the traders to make profits on arbitrage. And algo-traders will make it happen much quicker than you can even notice the arbitrage existence.",
"title": ""
},
{
"docid": "589e8e9ab52c413eb5b16076903fd7a3",
"text": "The optimal time period is unambiguously zero seconds. Put it all in immediately. Dollar cost averaging reduces the risk that you will be buying at a bad time (no one knows whether now is a bad or great time), but brings with it reduction in expected return because you will be keeping a lot of money in cash for a long time. You are reducing your risk and your expected return by dollar cost averaging. It's not crazy to trade expected returns for lower risk. People do it all the time. However, if you have a pot of money you intend to invest and you do so over a period of time, then you are changing your risk profile over time in a way that doesn't correspond to changes in your risk preferences. This is contrary to finance theory and is not optimal. The optimal percentage of your wealth invested in risky assets is proportional to your tolerance for risk and should not change over time unless that tolerance changes. Dollar cost averaging makes sense if you are setting aside some of your income each month to invest. In that case it is simply a way of being invested for as long as possible. Having a pile of money sitting around while you invest it little by little over time is a misuse of dollar-cost averaging. Bottom line: forcing dollar cost averaging on a pile of money you intend to invest is not based in sound finance theory. If you want to invest all that money, do so now. If you are too risk averse to put it all in, then decide how much you will invest, invest that much now, and keep the rest in a savings account indefinitely. Don't change your investment allocation proportion unless your risk aversion changes. There are many people on the internet and elsewhere who preach the gospel of dollar cost averaging, but their belief in it is not based on sound principles. It's just a dogma. The language of your question implies that you may be interested in sound principles, so I have given you the real answer.",
"title": ""
},
{
"docid": "47e1b1d01bb31194a38b0bdea0b8fbe0",
"text": "\"The charts on nasdaq.com are log based, if you look closely you can see that the spacing between evenly incremented prices is tighter at the top of the chart and wider at the bottom. It's easiest to see on a stock with a wide price range using candlestick where you can clearly see the grid. I'm also not seeing the \"\"absurdism\"\" you indicate when I look at google finance with the settings ticked to use log on the price axis. I see what I'd expect which is basically a given vertical differential on the price axis representing the same percentage change in price no matter where it is located. For example if I look at GOOG from the earliest date they have (Aug 20 2004) to a nice high point (dec 7 2007) I see a cart where the gap from the the bottom of the chart (seems to be right around 100) to the 200 point, (a 100% increase) is the same as from 200 to 400 (a 100% increase) is the same as 400 to 800 (a 100# increase) That's exactly what I expect from a 'log' chart on a financial site, each relative move up or down of the same distance, represents the same relative change in value. So I'm having difficulty understanding what your complaint is. (note: I'm using chrome, which is the browser I'd expect to work best with any google website. results with other browsers could of course vary) If you want to do some other wacky math with the axis then I humbly suggest that something like Excel is your friend. Goto the charts at nasdaq.com get the chart displaying the period you care about, click the chart to display the unlying data, there will be an option to download the data. cram it into excel and go wild as you want with charting it out. e.g. note that step 2 links to client side javascript, so you will need javascript enabled, if you are running something like noscript, disable it for this site. Also since the data opens in a new window, you may also need to enabled 'popups' for the site. (and yes, I sometimes get an annoying news alert advert popup and have to close it when the chart first appears.. oh well it pays the rent and nasdaq is not charging you so for access so such is the price for a free site. )\"",
"title": ""
},
{
"docid": "04df881344f4003c31ca6fb7b9d516fe",
"text": "This is a gross simplification as there are a few different ways to do this. The principle overall is the same though. To short a stock, you borrow X shares from a third party and sell them at the current price. You now owe the lender X shares but have the proceeds from the sale. If the share price falls you can buy back those shares at the new lower price, return them to the lender and pocket the difference. The risk comes when the share price goes the other way, you now owe the lender the new value of the shares, so have to find some way to cover the difference. This happened a while back when Porsche made a fortune buying shares in Volkswagen from short sellers, and the price unexpectedly rose.",
"title": ""
},
{
"docid": "40e19a42d0c1030422b12eaa08ea15d4",
"text": "The shortest-hand yet most reliable metric is daily volume / total shares outstanding. A security with a high turnover rate will be more efficient than a lower one, ceteris paribus. The practical impacts are tighter spread and lower average percentage change between trades. A security with a spread of 0% and an average change of 0% between trades is perfectly efficient.",
"title": ""
},
{
"docid": "e5fd2fc3ea79e1c5c3779c8ed00a42f8",
"text": "\"Yes, there are non-stock analogs to the Price/Earnings ratio. Rental properties have a Price/Rent ratio, which is analogous to stocks' Price/Revenue ratio. With rental properties, the \"\"Cap Rate\"\" is analogous to the inverse of the Price/Earnings ratio of a company that has no long-term debt. Bonds have an interest rate. Depending on whether you care about current dividends or potential income, the interest rate is analogous to either a stock's dividend rate or the inverse of the Price/Earnings ratio.\"",
"title": ""
},
{
"docid": "1e68f8e0e96e2216f94cc5d9bcecc01a",
"text": "\"Here's the slippage I was talking about - - - this is when I was trading DXO or around that time. the ultra shares----interesting read at least. \"\"Based on data from October 22, 2008 to January 26, 2009, the S&P 500 had a daily standard deviation of 3.62%. If you were to invest in SDS, an UltraShort ETF which has the S&P 500 as its underlying index, and were to hold it for a year, you should expect to lose between 34% and 74% of your money, if the S&P 500 is flat for that period. This assumes that there are no transaction costs, and that the expense ratio is 0% (in fact, it's 0.91%.) My experiment also assumed that daily stock market returns follow a normal distribution. In fact, the the distribution of daily stock market returns is leptokurtotic (it has fat tails.) According to my mathematical intuition (the Ph.D. is in math, in case you were curious,) if I had performed the experiment with a leptokurtotic distribution, the losses would have been larger. Obviously, this could be checked, but the results are bad enough as it is.\"\" http://www.altenergystocks.com/archives/2009/02/ultrapromises_fall_short.html\"",
"title": ""
},
{
"docid": "7a1af1f518ca2fda333f2639837459d9",
"text": "PE ratio is the current share price divided by the prior 4 quarters earnings per share. Any stock quote site will report it. You can also compute it yourself. All you need is an income statement and a current stock quote.",
"title": ""
},
{
"docid": "dc8fc7455dd37b3f2c63dd9bc2c955fc",
"text": "\"How accurate is Implied Volatility in predicting future moves? How would you measure this? If the implied volatility says that there's a 1% chance that a stock will double, and it doubles, was it \"\"right\"\"? You could also say that it says there's a 99% change that it doesn't double, so was it \"\"wrong\"\"? What you could measure is the variance of daily returns over a time period, and see how well that compares to implied volatility, but there's no way to compare IV with the absolute price movement. If a stock goes up 0.01 each day, then the variance is 0 (the daily returns are the same each day), but over 250 the stock would go up $2.50.\"",
"title": ""
},
{
"docid": "4c23a61f572194b420b110c7a2af7c62",
"text": "\"This is called \"\"change\"\" or \"\"movement\"\" - the change (in points or percentage) from the last closing value. You can read more about the ticker tape on Investopedia, the format you're referring to comes from there.\"",
"title": ""
},
{
"docid": "ef18299621646b2cd361cf1313bf5a04",
"text": "> A short position also loses money if the stock just appreciates more slowly than the broader market, which is one way an overvaluation can correct itself. Is there a derivative based on the literal second derivative (acceleration) of the stock price? If so, you'd be able to short those, yes?",
"title": ""
},
{
"docid": "6657c05898ceb7473983e062b054aa66",
"text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"",
"title": ""
},
{
"docid": "c600f9ea131c2cbd2362197798ffc51f",
"text": "This is a really easy problem. If you're genuinely having trouble, maybe don't be a finance major? All you need to do is know the formulas for the ratios and plug in the variables. Simple and clean. However, if you're lazy and trying to get free answers off of reddit, then you could have saved the time you took to post this question and actually do the problem. You probably would have gotten the answer all by yourself without much help.",
"title": ""
},
{
"docid": "9e080f52dc5ab00a2c1dee3097206fc9",
"text": "Don´t forget that changing volatility will have an impact on the time value too! So at times it can happen that your time value is increasing instead of decreasing, if the underlying (market) volatility moves up strongly. Look for articles on option greeks, and how they are interdependent. Some are well explaining in simple language.",
"title": ""
}
] |
fiqa
|
401d8fedada7ccfd21a02b0a4d4114f5
|
Can I deduct equipment expenses for a job I began overseas?
|
[
{
"docid": "87c9d0ed048118e676a8196605eb034b",
"text": "A computer is a special case because the IRS thinks that you might be using it for personal applications. You may need to keep a log, or be able to state that you also have another computer for non-business use. That said, if your schedule C shows a small profit then you don't need to itemize expenses, just state the total.",
"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": "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": "d8aaee2278cffb583d47b047c320b68d",
"text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases.",
"title": ""
},
{
"docid": "c1f72824ef2b3072f154a0d2fa565ef4",
"text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.",
"title": ""
},
{
"docid": "2ec447312a423d5378550f6d87afb5a5",
"text": "\"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case. Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the \"\"ordinary\"\" test. And since there are lots of other ways to house a computer other than a car, \"\"necessary\"\" seems problematic also.\"",
"title": ""
},
{
"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": "8b45e548d7249ae24266bede29b37465",
"text": "I will not pay any taxes in the Us, since I am not working for an US company What you will or will not pay is up to you of course, but you definitely should pay taxes in the US, as you're working in the US. Since you mentioned being from Japan, I'll also suggest checking whether you're allowed to perform any work in the US under the conditions of your visa. If you're a F1/J1 student - you'll be breaking the immigration law and may be deported. You might be liable for taxes in Germany, as well, and also in Japan. I'll have to edit this to allow people who downvoted the answer without knowing the legal requirements to change their vote. F1 student cannot be a contractor without a valid EAD. Period. There's no doubt about it and legal requirements are pretty clear. Anyone who claims that you wouldn't be breaking the terms of your visa is wrong. Note, I'm neither a lawyer nor a tax professional, for definite advice talk to a professional.",
"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": "1525ae32cf52879d47052ec31a67d930",
"text": "A non-resident alien is only allowed for deductions connected to producing a US-sourced income (See IRC Sec. 873). Thus you can only deduct things that qualify as business expenses, and State taxes on your wages. In addition you can deduct a bunch of stuff explicitly allowed (like tax preparation, charitable contributions, casualty losses, etc) but sales tax is not in that list.",
"title": ""
},
{
"docid": "84fb32f8ad53e211bbdd5f4eb31af3c8",
"text": "No, you cannot. You can only deduct expenses that the employer required from you, are used solely for the employer's (not your!) benefit, you were not reimbursed for them and they're above the 2% AGI threshold. And that - only if you're itemizing your deductions.",
"title": ""
},
{
"docid": "9410aac2831c33bba5318245fae862a3",
"text": "\"As a person who has had several part time assistants in the past I will offer you a simple piece of advise that should apply regardless of what country the assistant is located. If you have an assistant, personal or business, virtual or otherwise, and you don't trust that person with this type of information, get a different assistant. An assistant is someone who is supposed to make your life easier by off loading work. Modifying your records before sending them every month sounds like you are creating more work for yourself not less. Either take the leap of faith to trust your assistant or go somewhere else. An assistant that you feel you have to edit crucial information from is less than useful. That being said, there is no fundamental reason to believe that an operation in the Philippines or anywhere else is any more or less trustworthy than an operation in your native country. However, what is at issue is the legal framework around your relationship and in particular your recourse if something goes wrong. If you and your virtual assistant are both located in the US you would have an easier time collecting damages should something go wrong. I suggest you evaluate your level of comfort for risk vs. cost. If you feel that the risk is too high to use an overseas service versus the savings, then find someone in the states to do this work. Depending on your needs and comfort you might want to seek out a CPA or other licensed/bonded professional. Yes the cost might be higher however you might find that it is worth it for your own piece of mind. As a side note you might even consider finding a local part-time assistant. This can often be more useful than a virtual assistant and may not cost as much as you think. If you can live without someone being bonded. (or are willing to pay for the bonding fee) yourself, depending on your market and needs you may be able to find an existing highly qualified EA or other person that wants some after hours work. If you are in a college town, finance, accounting or legal majors make great assistants. They will usually work a couple hours a week for \"\"beer money\"\", they have flexible schedules and are glad to have something pertinent to their degree to put on their resume when they graduate. Just be prepared to replace them every few years as they move on to real jobs.\"",
"title": ""
},
{
"docid": "47fbaf740dacac037b1f7a8f5dfa294b",
"text": "This answer is assuming you're in the US, which apparently you're not. I doubt that the rules in the EU are significantly different, but I don't know for sure. In case of an IRS control, is it ok to say that I regularly connect remotely to work from home although in the work contract it says I must work at client's office? No. Are there any other ways I can prove that this deduction is valid? No. You can't prove something is valid when its not. You can only deduct home office expense if it is used exclusively for your business, and your bedroom obviously is not.",
"title": ""
},
{
"docid": "a6d8246a6d2c372099e8140b3683674e",
"text": "Business Apprentice is internship. That is not what is applicable for you. You're a visiting professor/researcher, which falls under Article 22, so you don't get the standard deduction.",
"title": ""
},
{
"docid": "e65ca832826c13679b69f21901aa6230",
"text": "First, you should probably have a proper consultation with a licensed tax adviser (EA/CPA licensed in your State). In fact you should have had it before you started, but that ship has sailed. You're talking about start-up expenses. You can generally deduct up to $5000 in the year your business starts, and the expenses in excess will be amortized over 180 months (15 years). This is per the IRC Sec. 195. The amortization starts when your business is active (i.e.: you can buy the property, but not actually open the restaurant - you cannot start the depreciation). I have a couple questions about accounting - should all the money I spent be a part of capital spending? Or is it just a part of it? If it qualifies as start-up/organizational expenses - it should be capitalized. If it is spent on capital assets - then it should also be capitalized, but for different reasons and differently. For example, costs of filing paperwork for permits is a start-up expense. Buying a commercial oven is a capital asset purchase which should be depreciated separately, as buying the tables and silverware. If it is a salary expense to your employees - then it is a current expense and shouldn't be capitalized. Our company is LLC if this matters. It matters to how it affects your personal tax return.",
"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": "be257fcb0ae0253e58681c0f96f3d63a",
"text": "\"The answer is \"\"Yes\"\", You can deduct them. As long as you showed that you put in effort to make a profit then you can deduct business expenses.\"",
"title": ""
}
] |
fiqa
|
9c21da7bce7d74822e52e34d6729f1b0
|
Can one get a house mortgage without buying a house?
|
[
{
"docid": "2df00d72437669b65c71a5bda02b87fd",
"text": "\"I've never heard of a loan product like that. Yes, if they keep the funds in an account, it is no risk to the bank, but they would essentially need to go through the loan process twice for the same loan: when you pick a house, they need to reevaluate everything, along with appraising and approving the house. Even if you did find a bank that would do this for you, there are a few problems with this scheme. You would be paying interest before you have a need for this money, negating the savings you might achieve if the interest rates go up. In addition, your \"\"balance\"\" will go down as \"\"payments\"\" are deducted from your loan, and when you finally find a home to buy, you might not have enough for the house you want. You'll need to borrow more than you need, which will further negate any possible savings. It is impossible to know how fast rates will climb. If I were you, I would stick to saving for your down payment, and just get the best rate you can when you are ready to buy. Another potential idea for you is to lock an interest rate. When you apply for a mortgage, the interest rate is often locked for as much as 60 days, to protect the borrower in the event that the rates go up. You could ask the bank if you can pay a fee to lock the rate even longer. I don't know if that is possible or not. And, of course, the fee would eat into your potential savings.\"",
"title": ""
},
{
"docid": "5c3ee85ebbb20ccd9966af2e638bf2b1",
"text": "\"As a legal contract, a mortgage is a form of secured debt. In the case of a mortgage, the debt is secured using the property asset as collateral. So \"\"no\"\", there is no such thing as a mortgage contract without a property to act as collateral. Is it a good idea? In the current low interest rate environment, people with good income and credit can obtain a creditline from their bank at a rate comparable to current mortgage rates. However, if you wish to setup a credit line for an amount comparable to a mortgage, then you will need to secure it with some form of collateral.\"",
"title": ""
},
{
"docid": "a2c62a6f95a19d4d305afd7ae5426f82",
"text": "First, many banks do not keep the loan. Even if they send you a payment notice and process the monthly payment, there's still a good chance the loan itself was packed up and sold to investors. Collateralizing mortgages, in and of itself, is not inherently dangerous. But the loan definitely needs a house behind it. If you found a bank that keeps its loans, it would be a tough sell. You'd be asking them to trust that you've chosen the right number to match up with the house you intend to buy. And then they'd need to have another round of processing to turn this into a loan with normal collateral (i.e. put a lien on the house and tie them together.)",
"title": ""
},
{
"docid": "73deb8ce59c254ab3f7158df06349e47",
"text": "\"Not unless you have something else to put up as collateral. The bank wants a basic assurance that you're not going to immediately move the money to the Caymans and disappear. 999 times out of 1000, the collateral for a home mortgage is the home itself (which you wouldn't be able to take with you if you decided to disappear), so signing up for a 30 year mortgage on a nonexistent house is probably going to get you laughed out of the bank. It's sometimes possible to negotiate something else as collateral; you may, for instance, have a portfolio of securities worth the loan principal, that you can put in escrow for the term of the loan (the securities will stay in your name and make you money, but if you default on the loan the bank goes to the escrow company and takes the portfolio for their own). The bank will consider the risk of value loss on the securities in the portfolio, and may ask for a higher collateral value or only allow a lower loan amount. In all cases, it's usually a bad idea to go into long-term personal debt just to get \"\"cheap money\"\" that you can use to beat the interest rate with some business plan or investment. If you have a business plan, take that to the bank with an LLC and ask for a business loan. The business itself, if the plan is sound, should become valuable, and the terms of business loans take that into account, allowing for a \"\"shrinking collateral\"\" transferring the initial personal risk of the loan to the business.\"",
"title": ""
}
] |
[
{
"docid": "62d78935dca3e53a5cd56df814a91a5b",
"text": "I would use that money to buy a car instead of taking out a loan to buy the car. It does however prompt the question: What do you want more a house or a car?",
"title": ""
},
{
"docid": "7dde74392ae43418f5636c60a710d5c6",
"text": "\"I'm not aware that any US bank has any way to access your credit rating in France (especially as you basically don't have one!). In the US, banks are not the only way to get finance for a home. In many regions, there are plenty of \"\"owner financed\"\" or \"\"Owner will carry\"\" homes. For these, the previous owner will provide a private mortgage for the balance if you have a large (25%+) downpayment. No strict lending rules, no fancy credit scoring systems, just a large enough downpayment so they know they'll get their money back if they have to foreclose. For the seller, it's a way to shift a house that is hard to sell plus get a regular income. Often this mortgage is for only 3-10 years, but that gives you the time to establish more credit and then refinance. Maybe the interest rate is a little higher also, but again it's just until you can refinance to something better (or sell other assets then pay the loan off quick). For new homes, the builders/developers may offer similar finance. For both owner-will-carry and developer finance, a large deposit will trump any credit rating concerns. There is usually a simplified foreclosure process, so they're not really taking much of a risk, so can afford to be flexible. Make sure the owner mortgage is via a title company, trust company, or escrow company, so that there's a third party involved to ensure each party lives up to their obligations.\"",
"title": ""
},
{
"docid": "6b80cfd67567b2482cfe5fb29d67f9c5",
"text": "It depends on how much equity you have in your home. Scenario 1: Your home is worth $100K, and your current mortgage is for $100K (or more which means you are underwater.) In this case you can't get a 2nd mortgage because: That being said, you can use different portions of equity in your home as collateral for multiple mortgages, as long as none of the equity overlaps, but you may need permission from the primary mortgage bank first, for example: Scenario 2: Your home is worth $100K, and your current mortgage is for $80K meaning you currently have $20K in equity. It is possible to get a 2nd mortgage or home equity line of credit for $20K. As a side note, if your loan agent is telling you to use a different bank, it sounds like she is trying (and willing) to do something shady. If you are in Scenario 1, I'd find a new agent.",
"title": ""
},
{
"docid": "944043c4c9d8348c585222be3451c1ef",
"text": "Generally speaking the lower credit score trumps. In the case you cite, the lower credit score will prevail. However, you may need to do exactly that in order to qualify for the loan income wise. There are two factors when obtaining a mortgage, really all loans, but more so with a mortgage: the likeliness to repay (credit score), and your ability to service the debt. This last one is a combination of income and debt-to-income ratio. If you don't have enough income to qualify for the loan or fail to meet the debt to income ration, you may have to use your GF's income to qualify despite her poor credit. You might want to see past posts about buying property with non-spouses. It could work, but generally it requires a lot of legal work before closing on the deal. Avoiding this will lead to tales of woe.",
"title": ""
},
{
"docid": "94b7b27feac8a3dcef63056fa43001dd",
"text": "It seems like you are asking two different questions, one is, how do I know if I can afford a house? The other is, how do I know what type of mortage to get? The first question is fairly simple to answer, there's plenty of calculators out there that will tell you what you can afford, but rule of thumb is 30% of income can goto housing. Now what type of mortgage to get can be much more confusing, because the mortgage industry makes money off of these confusing products. The best thing to do in my opionion in situations like this is to keep it simple. You need to be careful buying a house. So much money is changing hands and there are so many parasites involved in the transaction I would be extremely wary of anybody who is going to tell you what mortgage to get. I've never heard of a fee only independent mortgage broker, and if I found one that claimed to be I wouldn't believe him. I would just ignore all the exotic non-conforming products and just answer one simple question. Are you the type of person that buys an insurance policy or that likes to self insure? If you like insurance, get a 30 year fixed mortgage. If you like to self insure, get a 7 year ARM. The average lenghth someone owns a house is 7 years, plus in 7 years time, it might not adjust up, and even if it does, you can just accelerate your payments and pay it off quickly (this is the self insurance part of it). If you're like me, I'm willing to pay an extra .5% for the 30 year so that my payment never changes and I'm never forced to move (which is admitedly extremely unlikely, but I like the safety). I don't like 15 year term loans because rates are so low, you can get way better returns in the stock market right now, so why pay off sooner then you need to. Heck, if I had a paid off house right now I'd refi into a 30 year and invest the money. In summary, pick 30 year or ARM, then just shop around to find the lowest rate (which is extremely easy).",
"title": ""
},
{
"docid": "c805b4bd5c0bdcc9a481645e470d3ae8",
"text": "You're effectively looking for a mortgage for a new self-build house. At the beginning, you should be able to get a mortgage based on the value of the land only. They may be willing to lend more as the build progresses. Try to find a company that specializes in this sort of mortgage.",
"title": ""
},
{
"docid": "edba9615a6bb1cd4c4198604e9497c9d",
"text": "If you really want to help your friend buy a house, make a counter-offer to buy the house yourself and lease it to your friend, with the option to buy for original purchase cost, plus all interest paid so far to the bank, plus closing costs and other expenses incurred by you, minus payments made so far by the friend. Otherwise, just no. The other answers already detail why.",
"title": ""
},
{
"docid": "b2b74b5cd2be5c6afc1c3fe45820c19c",
"text": "\"The current mortgaged owner would typically not have the right to sell any portion of the house without approval from the bank. The bank doesn't \"\"own\"\" the house through the mortgage, but they do have a series of rights that, in some cases, look similar to ownership. Remember that a mortgage is just a loan that uses a house as collateral, to reduce the risk to the lender in the event of default. If it was just a personal loan, without collateral, then there would be a much higher risk of default (and therefore the interest rate would be closer to 20% than 2%). But because the loan was taken with collateral, that collateral can't be sold without the bank's permission. If the bank allowed this to happen, then one risk would be exactly as you say - that the mortgagee stops paying the bank, and the bank no longer is able to recover the full value of the loan on selling the remaining 50% of the house owed as collateral.\"",
"title": ""
},
{
"docid": "b2357d8110fb4543d81549c6e887d7e6",
"text": "The problem is, you are trying to qualify for a loan that has a 25% down payment using money you don't have, which defeats the purpose of having a down payment. The best thing to do is have your parents buy the house for you. You then rent the house from them where your rent is equal to the mortgage + x. Your parents then put x into savings account for you and then once you have 25% in that account, they gift it to you and you purchase the house from them using that 25% as the downpayment for the mortgage.",
"title": ""
},
{
"docid": "a1cbaf548cfac2d95afa711c88f816b6",
"text": "I think we would be good with paying around $1200 monthly mortgage fees (with all other property fees included like tax etc.) You probably can't get a $250k house for $1,200 a month including taxes and insurance. Even at a 4% rate and 20% down, your mortgage payment alone will be $954, and with taxes and insurance on top of that you're going to be over $1,200. You might get a lower rate but even a drop to 3% only lowers the payment $90/month. Getting a cheaper house (which also reduces taxes and insurance) is the best option financially. What to do with the $15k that I have? If you didn't have a mortgage I'd say to keep 3-6 months of living expenses in an emergency fund, so I wouldn't deplete that just to get a mortgage. You're either going to be Since 1) the mortgage payment would be tight and 2) you aren't able to save for a down payment, my recommendation is for you to rent until you can make a 20% down payment and have monthly payment that is 25% of your take-home pay or less. Which means either your income goes up (which you indicate is a possibility) or you look for less house. Ideally that would be on a 15-year note, since you build equity (and reduce interest) much more quickly than a 3-year note, but you can get the same effect by making extra principal payments. Also, very few people stay in their house for 30 years - 5 years is generally considered the cutoff point between renting and buying. Since you're looking at a 10-year horizon it makes sense to buy a house once you can afford it.",
"title": ""
},
{
"docid": "2c42f2eb5810f7b396be829f8e997dfd",
"text": "\"Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the \"\"Pro\"\" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own.\"",
"title": ""
},
{
"docid": "dd865e96fd492e3189f843200cf4f59a",
"text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.",
"title": ""
},
{
"docid": "98745389a9c404c24dae73985ec90c7c",
"text": "Generally, no. A mortgage is a lien against the property, which allows the bank to exercise certain options, primarily Power of Sale (Force you to sell the property) and outright seizure. In order to do this, title needs to be clear, which it isn't if you have half title. However, if you have a sales agreement, you can buy your brother's half, and then mortgage the entire property. This happens all the time. When you buy a house from someone, you get pre-approved for that house, which, at the time, you have no title to. Through some black magic lawyering and handwaving, this is all sorted out at closing time.",
"title": ""
},
{
"docid": "1c2ddf482737d372ae1c5fb5ee672551",
"text": "\"Some pros and cons to renting vs buying: Some advantages of buying: When you rent, the money you pay is gone. When you buy, assuming you don't have the cash to buy outright but get a mortgage, some of the payment goes to interest, but you are building equity. Ultimately you pay off the mortgage and you can then live rent-free. When you buy, you can alter your home to your liking. You can paint in the colors you like, put in the carpet or flooring you like, heck, tear down walls and alter the floor plan (subject to building codes and safety consideration, of course). If you rent, you are usually sharply limited in what alterations you can make. In the U.S., mortgage interest is tax deductible. Rent is not. Property taxes are deductible from your federal income tax. So if you have, say, $1000 mortgage vs $1000 rent, the mortgage is actually cheaper. Advantages of renting: There are a lot of transaction costs involved in buying a house. You have to pay a realtor's commission, various legal fees, usually \"\"loan origination fees\"\" to the bank, etc. Plus the way mortgages are designed, your total payment is the same throughout the life of the loan. But for the first payment you owe interest on the total balance of the loan, while the last payment you only owe interest on a small amount. So early payments are mostly interest. This leads to the conventional advice that you should not buy unless you plan to live in the house for some reasonably long period of time, exact amount varying with whose giving the advice, but I think 3 to 5 years is common. One mitigating factor: Bear in mind that if you buy a house, and then after 2 years sell it, and you discover that the sale price minus purchase price minus closing costs ends up a net minus, say, $20,000, it's not entirely fair to say \"\"zounds! I lost $20,000 by buying\"\". If you had not bought this house, presumably you would have been renting. So the fair comparison is, mortgage payments plus losses on the resale compared to likely rental payments for the same period.\"",
"title": ""
},
{
"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": ""
}
] |
fiqa
|
1f1347690486a325d3dc7935db641fef
|
What to bear in mind when considering a rental home as an investment?
|
[
{
"docid": "366e4f092dbfd5bf75a34ea777a4fe2b",
"text": "Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?",
"title": ""
},
{
"docid": "e59d231ab74cf650e600dc45be110e7f",
"text": "What are the most important facts to keep in mind as I consider this? IMHO, the most important consideration to keep in mind is - do you really want to be in the landlord business, and if so, how much experience do you have in this business?",
"title": ""
},
{
"docid": "7c0129ccf189b8444f3ea2693d965ba8",
"text": "\"First off, I would label this as speculation, not investing. There are many variables that you don't seem to be considering, and putting down such a small amount opens you to a wide variety of risks. Not having an \"\"emergency fund\"\" for the rental increases that risk greatly. (I assume that you would not have an emergency fund based upon \"\"The basic idea is to save up a 20% down payment on a property and take out a mortgage\"\".) This type of speculation lent a hand in the housing bubble. Is your home paid off? If not you can reduce your personal risk (by owning your home), and have a pretty safe investment in real estate. Mission accomplished. My hope for you would be that you are also putting money in the market. Historically it has performed quite well while always having its share of \"\"chicken littles\"\".\"",
"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": "4ec9c5228759edbab19be997d455092a",
"text": "Real estate is not an investment but pure speculation. Rental income may make it look like an investment but if you ask some experienced investor you would be told to stay away from real estate unless it is for your own use. If you believe otherwise then please read on : Another strong reason not to buy real estate right now is the low interest rates. You should be selling real estate when the interest rates are so low not buying it. You buy real estate when the interest rate cycle peaks like you would see in Russia in months to come with 17% central bank rate right now and if it goes up a little more that is when it is time to start looking for a property in Russia. This thread sums it up nicely.",
"title": ""
}
] |
[
{
"docid": "8458e6ebcc66911b291d37d15bc50a86",
"text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.",
"title": ""
},
{
"docid": "03252d1fca7489fe4a01185bad2050df",
"text": "\"I'm going to start with your title question: How can home buying be considered a sound investment with all of that interest that needs to be paid? If taken literally, this is a loaded question because if you pay cash for a home, you don't pay any interest. Furthermore, if your interest rate is 3% for 10 years you won't pay nearly as much interest as you will if your rate is 10% for 30 years, so \"\"all of that interest\"\" is relative to your personal situation. Having said that, of course I understand what you mean. Most people pay interest, and interest is expensive, so how do you calculate if it's worth it? That question has been asked and answered, but for your particular situation, you really have two separate questions: I believe you should answer these questions independently. If you move far away, it's probably the case that you can save a lot of money by either renting or buying in that location. So you should first consider if it's worth it to move, and then if it is, decide if it's worth it to rent or buy. If you decide not to move far away, then decide if maybe you can save money by renting somewhere near your current home. Since it sounds like if you move you may have to become a landlord, living close by to your tenant may also make it easier to deal with problems when they arise.\"",
"title": ""
},
{
"docid": "11f43f32825eead66ad9471abfbb0e4f",
"text": "Hmm, if your financially savvy enough to have saved up half a million dollars, I'd think you would be savvy enough to spend it wisely. :-) I think I'd spend the cash before running down stocks and bonds, as cash almost surely has a lower rate of return. I'd look into what rate of return you're getting on the rental property versus what you're getting from other investments. If the rental property has a lower return, I'd sell that before selling off stocks. (I own a rental property on which I am losing money every month. I'm still paying a mortgage on it, but even without that, the ROI would be about 4% under current market conditions.) Besides that, your plan looks good to me. Might need to add, 8. Beg on the streets, and 9. Burglary.",
"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": "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": "749960a13c58456820dd69d8e93bd7c4",
"text": "\"Whether or not you choose to buy is a complicated question. I will answer as \"\"what you should consider/think about\"\" as I don't think \"\"What should I do\"\" is on topic. First off, renting tends to look expensive compared to mortgages until you factor in the other costs that are included in your rent. Property taxes. These are a few grand a year even in the worst areas, and tend to be more. Find out what the taxes are ahead of time. Even though you can often deduct them (and your interest), you're giving up your standard deduction to do so - and with the low interest regime currently, unless your taxes are high you may not end up being better off deducting them. Home insurance. This depends on home and area, but is at least hundreds of dollars per year, and could easily run a thousand. So another hundred a month on your bill (and it's more than renter's insurance by quite a lot). Upkeep costs for the property. You've got a lot of up-front costs (buy a lawnmower, etc. types of things) plus a lot of ongoing costs (general repair, plumbing breaks, electrical breaks, whatnot). Sales commission, as Scott notes in comments. When you sell, you're paying about 6% commission; so you won't be above water, if housing prices stay flat, until you've paid off 6% of your loan value (plus closing costs, another couple of percent). You hit the 90% point on a 15 year about year 2, but on a 30 year you don't hit it until about year 5, so you might not be above water when you want to sell. Risk of decrease in value. Whenever you buy property, you take on the risk of losing value as well as the potential of gaining value. Don't assume that because prices are going up they will continue to; remember that a lot of investors are well aware of possible profits from rising prices and will be buying (and driving prices up) themselves. 2008 was a shock to a lot of people, even in areas where it seemed like prices should've still gone up; you never know what's going to happen. If you buy a house for 20% or so down, you have a bit of a safety net (if it drops 10-20% in value, you're still above water, though you do of course lose money), while if you buy it for 0% down and it drops 20% in value, you won't be able to sell (at all) for years. All that together means you should really take a hard look at the costs and benefits, make a realistic calculation including all actual costs, and then make a decision. I would not buy simply because it seems like a good idea to not pay rent. If you're unable to make any down payment, then you're also unable to deal with the risks in home ownership - not just decrease in value, but when your pipe bursts and ruins your basement, or when the roof needs a replacement because a tree falls on it. Yes, home insurance helps, but not always, and the deductible will still get you. Just to have some numbers: For my area, we pay about $8000 a year in property taxes on a $280k house ($200k mortgage), $1k a year in home insurance, so our escrow payment is about $750 a month. A 15 year for $200k is about $1400 a month, so $2200 or so total cost. We do live in a high property tax area, so someone in lower tax regimes would pay less - say 1800-1900 - but not that cheap. A 30 year would save you 500 or so a month, but you're still not all that much lower than rent.\"",
"title": ""
},
{
"docid": "9af2b9eb9a52388362c67d7d73f4a9ce",
"text": "\"I invested in single family homes and made ok. Houses can be an investment. (though the OP seems to equate \"\"house\"\" with primary residence) Just like any other investment buying houses has risks. I would not treat your primary residence or a vacation home as an investment. That is asking for trouble, but for many many years it was safe to assume that you would make a good return on it, and many people did. If you evaluate the numbers for purchase price, rental market, etc and find that rentals or flipping is worth your exposure then by all means, do it. But treating your primary residence as an investment apparently is what that comment means. Just like the stock market, many people have gotten wealthy on homes and there are lots of people who lost their shirts.\"",
"title": ""
},
{
"docid": "f84220fd43bec9562e69e878985ace2e",
"text": "Insurance - get estimate from an insurance agent who works with policies for commercial real estate. See comments below regarding incorporation. Taxes - if this was basic income for a simple LLC, estimating 25-40% and adjusting over time might work. Rental property is a whole different prospect. Financial experts who specialize in rental properties would be a good source of advice, and worth the cost. See below regarding incorporating. Real estate appreciation - not something you can count on for developed property. Appreciation used to be almost guaranteed to at least keep up with inflation. Now property values are not even guaranteed to go up. Never have been but the general rule was improved real estate in good repair appreciated in price. Even if property values increase over time, rental properties depreciate. In fact, for rental properties, you can claim a certain rate of depreciation over time as an expense on taxes. This depreciation could mean selling for less than you paid for the property after a number of years, and owing capital gains taxes, since you would owe the difference between the depreciated value and the sale price. Related to taxes are local codes. Some areas require you to have a property management license to handle buildings with more than a certain number of units. If you are going to own rental properties, you should protect your private financial life by incorporating. Form a company. The company will own the property and hire any maintenance people or property managers or security staff or any similar employment activities. The company takes out the insurance and pays taxes. The company can pay you a salary. So, bottom line, you can have the company pay all the expenses and take all the risks. Then, assuming there's any money left after expenses, the company can pay you a manager's salary. That way if the worst happens and a tenant breaks their hip in the shower and sues you for ONE MILLION DOLLARS and wins, the company folds and you walk away. You might even consider two companies. One to own the property and lease it to a property management company. The property management company can then go bankrupt in case of some sort of liability issue, in which case you still keep the property, form a new management company, repaint and rename the property and move on. TL;DR: Get insurance advice from insurance agent before you buy. Same for taxes from an accountant. Get trained as a property manager if your local codes require it (might be a good idea anyway). Incorporate and have the company take all the risks.",
"title": ""
},
{
"docid": "fc6af9dfa9b8eac88e2574cf3268fd3d",
"text": "\"As a rental, this is not an ideal set of numbers. You manage to show a $255 'gain' but $275 is from payment to principal. So, from the start, you're out $20/wk. This ignores the $170K down payment, which has an opportunity cost, however you calculate it. You can assign the same rate as the mortgage, and it's nearly $10K/yr. Or the rate you feel your choice of stock market or alternate investment would rise. Either way, you can't ignore this money. Your mortgage rate isn't fixed. A 1% rise and it would jump to $1663 ($842/week) Ideally, a rental property is cash positive without counting principal paydown or even the tax refund. It's a risky proposition to buy and count on everything going right. I didn't mean to scare you off with \"\"1%\"\" but you should research the costs of repair and maintenance. Last year my Heat/AC system needed replacement. US$10K. This year, it's time to paint, and replace rotting trim, $7000. In the US we have property tax that can range from 1-2% of the house value. If you don't have this tax, that's great, just please confirm this.\"",
"title": ""
},
{
"docid": "00b9e39c2ab056cafe629fed477dab86",
"text": "Do not borrow to invest in real estate. The interest payments will eat up most of your profit (the property management fees might eat up the rest), and you will have significant risk with tenant issues, property value, etc. Many people have made it work - many also lose everything. Real estate can be a great investment, but you can't even afford a house of your own yet, let alone investment property. Keep saving up until you have 20% down to buy a house of your own (ideally that you can put on a 15% fixed mortgage), and pay it off as quickly as you can. Then you can start saving for your first rental property. If that process isn't fast enough for you, you have two options. Increase your income or reduce your expenses. There's no shortcut to wealth-building without taking significant risks. At most I would scale back the 401(k) to the 5% match you get, but you should scale that back up once you have enough for a down payment.",
"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": "579f9a0a5a958b3a896d6f07239b2853",
"text": "\"I want to caveat that I am not an active investor in Australia, you most likely should seek out other investors in your market and ask them for advice/mentorship, but since you came here I can give you some generalized advice. When investing in real estate there are a two main rules of thumb to quickly determine if the property will be a good investment. The 50% rule and the 2% (or 1%) rule. The 50% rules says that in general 50% if the income from the property will go to expenses not including debt service. If you are bringing in $1000 a month 500 of that will go to utilities, taxes, repair, capital expenditures, advertising, lawn care, etc. That leave you with 500 to pay the mortgage and if anything is left that can be cash flow. As this is your first property and it is in \"\" a relatively bad neighbourhood\"\" you might consider bumping that up to 60% just to make sure you have padding. The 1 or 2% rules says that the monthly rent should be 1(or 2) percent of the purchase price in this case the home is bought at 150,000. If the rent is 1,500 a month it might be a good investment but if it rents for 3,000 a month it probably is a good investment. There are other factors to consider if a home meets the 2% rule it might be in a rough neighborhood which increases turnover which in general is the biggest expense in an investment property. If a property meets one or both of these rules you should take a closer look at it and with proper due diligence determine that it is a deal. These rules are just hard and fast guidelines to property analysis, they may need to be adapted to you market. For example these rules will not hold in most (all?) big cities.\"",
"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": "aae6aa95ca158a1d7d4a9e369456150d",
"text": "\"You are a \"\"strategic\"\" investor, which is to say that you are in the best position to evaluate the deal because you already live there. Others don't have this advantage going in, which is why they might not be inclined to do what you're doing. Your biggest advantage is that you know at least one tenant. In essence, you are your own \"\"tenant\"\" for the top floor You also presumably have a pretty good idea of the neighborhood. These are arguments for owning your own home, although it does get a bit trickier with a second tenant, whom you may not know. Do check credit and references, etc. You might ask the landlord why he wants to sell. Presumably it's because he wants to retire or move, and not a problem with the property. But it does no harm to ask.\"",
"title": ""
},
{
"docid": "a51c9ca986fa7b362dce41bd2e9c1e30",
"text": "The HST is a sales tax levied on most goods and services. It is important to realize that in both BC and Ontario, the new HST does not (in most cases) result in an increase in sales tax paid. For example, in Ontario the PST is 8% and when combined with the GST the sales tax is 13%. With the HST, the GST and PST are replaced by a single HST of 13% so the tax bill does not change. Some services that were previously not subject to PST (such as mutual fund service fees and labour) will now be subject to the HST. So some things will increase. Over time, this should not have a material impact on the consumer due to the way businesses remit GST/HST.",
"title": ""
}
] |
fiqa
|
c0b172e88433c6b72058109bd0fff73f
|
What does cryptocurrency mean for governments?
|
[
{
"docid": "24b3d060e4c23665a0a4e0e103faada2",
"text": "Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income.",
"title": ""
}
] |
[
{
"docid": "f03a4b47ff3adde312d2859893fa1ae1",
"text": "\"Perhaps just an ambiguity rather than a contradiction - You said, \"\"at the end of the day, fiat currencies are based on trust and accountability of the government\"\". You then later said \"\"I'm not conflating trust of the issuer with trust of the \"\"bank\"\". I don't trust either.\"\" The problem there is that, on the Bitcoin side of the fence, there's no one there *to* trust. **You** can be the bank. You can also be the issuer, with enough computing horsepower. Do you, then, not trust *yourself*? Or, did I take that entirely wrong and you meant that directed toward the fiat side of things, and don't trust that Trump won't get us into a currency war with China (or his successor finally authorize that trillion dollar platinum coin to circumvent the debt ceiling - I don't mean that to be at all partisan)?\"",
"title": ""
},
{
"docid": "55bd82392b9f03e4190e3d4436bb95c2",
"text": "Thank you. Added to my list. This is very very helpful. I knew about the blockchain and the currency. Unfortunately, I'm not a pedant about differentiating between them with capitalising the first letter. I do not, however, understand Ethereum very well at all. So will read up.",
"title": ""
},
{
"docid": "0ee003abb9d3d266789513d9d7673856",
"text": "\"Edit: I discovered Bitcoin a few months after I posted this answer. I would strongly recommend anyone interested in this question to review it, particularly the myths page that dispels much of the FUD. Original answer: Although it is not online, as a concept the Totnes Pound may be of interest to you. I live quite close to this village (in the UK) and the system it promotes does work well. According to the Transition Town Totnes website this means that it is \"\"a community in a process of imagining and creating a future that addresses the twin challenges of diminishing oil and gas supplies and climate change , and creates the kind of community that we would all want to be part of.\"\" If you are looking for a starting place to introduce a new type of currency, perhaps in response to over-dependence on oil and global trade, then reading about the Transition Towns initiative could provide you with the answers you're looking for.\"",
"title": ""
},
{
"docid": "341db8f4c2c2686e74b451a59f893298",
"text": "Dream on. You are parroting government apologists. The only real complaint against gold is that it forces governments to limit their expenditures to what they can collect in revenue. All the critics of gold are in favor of big government and deficit spending. Gold is money. It is the only real money. And within five years there will be a de facto gold standard in international commerce.",
"title": ""
},
{
"docid": "d8b546e3ca3edf9892dc011ac3e6ca69",
"text": "It's quite the contrary. If there are mass failures of banks, then the money supply will collapse and there will be vicious deflation, increasing the value of money held as cash. It's only if governments print money to bail the banks out that there's a (small) risk of hyperinflation and the effective collapse of the currency.",
"title": ""
},
{
"docid": "6921b95d58b4a2801f0b86f9e9a3cc27",
"text": "\"Lol you finance guys are so hilarious. You don't understand cryptocurrencies or \"\"decentralized ledger technology\"\" at all. The ONLY way it works is if people have some **incentive** to actually secure and verify the Merkle Chain.... If I'm not getting something out of it **Why the fuck would I run a program to do that? Just to watch the computer get hot?** The block reward (aka the amount of bitcoins) I get are the underpinning incentive to do so! Get it? No bitcoins = nobody wants to secure your ledger! Therefore these \"\"permissioned ledgers\"\" are not going to be as secure or as trustworthy. There will likely be some cool shit that comes out of permissioned ledgers and intrablockchain stuff, but you are completely missing the ball if you think the actual bitcoins are dumb...... I know its complicated, it takes a while to **actually** understand, but it's partially engineering and you actually have to understand it all before you get to call it stupidity. The \"\"non-speculative value\"\" or utility of bitcoin as a currency seems to work just fine for online drug markets and has done quite a bit of business. It's got fantastic utility for buying retail shit online without having to give up personal information as well. It's got great utility for remittance. It's got divisibility. It is indeed a bonafide currency.... **TLDR; So how do you think that the recordkeeping gets done? Do you think people will do this for free? What function do you think the \"\"cryptocurrencies\"\" themselves currently serve? How do you think permissioned ledgers will be secure (i.e. tamperproof) if not done by public record? Don't you think that if they simply wanted to prevent tamperproof records they only need to use an airgapped computer and pen and paper?***\"",
"title": ""
},
{
"docid": "010f6c1e70e941277e8234cd594d6fbd",
"text": "I legitimately can't tell if this post is satirical. Ethereum is a very unique technology because it allows for Turing complete computation on its crypto network. Basically allowing for much higher security for data transmission and processing on the web. The reason that the currency is valuable is that in order to encrypt this information and transmit it, you have to pay the network in ethereum. It's had the support of Accenture and is in use by the Luxembourg stock exchange. I think they might know a bit more than the unnamed author of this article who doesn't think being able to inject code into a block chain is unique.",
"title": ""
},
{
"docid": "4e31045050a5d96241b49790eec6f013",
"text": "Currently many countries (and non-government bodies) hold dollars to facilitate trade. If the dollar is no longer used in their trade, then they no longer have a reason to hold those dollars. If every other country starts to dump their dollar holdings into the world currency markets, the number of dollars floating around in those market would shoot up. The massive supply increase of dollars (we're assuming these other countries are holding massive amounts of dollars) would lead to a large drop in value of the dollar - lots more dollars chasing the same amount of goods. Every purchase will become much more expensive for anyone still buying with dollars, including the American government trying to buy expensive military equipment - unless the US government also switches to using something else to purchase military supplies.",
"title": ""
},
{
"docid": "991df101a274ed8b90d892d33db7a635",
"text": "Cryptocurrency is undoubtedly at the peak of Gartner hype cycle, but it very well could revolutionise the way we use currency for our daily needs in the future. Stay with me on this… At present, cryptocurrency appears no more than a speculation that is sugar-coated by individuals who have vested interest in it. However, if we overlook this excitement, the actual use of cryptocurrency is mind-boggling. Suppose you had a mid-life crisis and went on a journey to the middle of the Earth to find where humans supposedly originated from, and you met and connected with a local coffee farmer named Razaq in a very remote part of Ethiopia. He invited you for an evening coffee and you obliged, and six months later you yearned for this same coffee whilst you were having another wave of existential thoughts in your penthouse that overlooked the urban jungle. Suddenly, you remembered that Razaq had a cheap but functional smartphone with a Bitcoin wallet, and afterwards you communicated with him on WhatsApp and decided to enter in a transaction with him. Razaq is delighted with this technology, but mainly because he does not have to travel 100 km to-and-fro the nearest city where his bank is located, and he is also happy that he can send a sack of coffee beans to his friend who lives in a faraway land, and all he needs to do is hand over the coffee sack to delivery truck en route the shipping port. Ultimately, saving Razaq lot of his precious time and resources. Now use this one example and multiply it by hundreds of millions of people around the world who have a very remote access to a ‘bank’, but have an access to a basic smartphone – imagine the possibility of connecting people like Razaq to the ‘internet’ world and having a seamless cross-border trade finance transaction using currency that is not controlled by any government. Like many others, I am keen to see the developments of cryptocurrency in the coming years, but for now I remain sceptical. That said, I am more interest in the countless opportunities that will be unlocked by the very technology that is fundamental to all the cryptocurrencies; the Blockchain. Crytocurrency is one branch of Blockchain technology which has proved useful. There are million other possibilities which I'm sure will benefit many industries in the coming decade, and I, for one, am very excited.",
"title": ""
},
{
"docid": "7cece024ae930e0b3672b0a10b701a58",
"text": "The government is this countries largest monopoly and rent seeker, whose interests run divergent to our own, and which must be managed closely by the governed lest it becomes an arbitrary regime beholdent to no other authority but its own. If you've watched congress at all, you know how quickly these people can write away the rights and privileges of their constituents. http://work.chron.com/average-salary-government-employees-7863.html",
"title": ""
},
{
"docid": "a01f34dd2676063e1e509af2ad1089e8",
"text": "Legal tender laws and capital gains tax mean that other commodities are at an unfair legal disadvantage to local fiat currency. In other words, governments are using taxes and regulations to manipulate the market and create artificial demand for the currency their central bank has a monopoly on the creation of.",
"title": ""
},
{
"docid": "e25013fc40b53ee2602fc7567b1b01be",
"text": "Does it matter? IF a hostile State wanted to use this data it will certainly be available to buy. Imagine the chaos that a coordinated attack could cause if this data started to be used specifically to cause disruption. The US government should be reacting AS IF this was a State sponsored attack. Legislation should be *flying* through Congress to mitigate this risk.",
"title": ""
},
{
"docid": "a3baab1d43ea0036f564a369fd70ccb1",
"text": "They can only do that because Coinbase interfaces with fiat currency. As more transactions and holding become denominated in crypto, it will be more difficult for them to tax (if you are using an unlinkable crypto). If I pay someone with Monero or most coins, then the government won't know who was involved in the transaction.",
"title": ""
},
{
"docid": "b45f748a0c31dd76eb6f670978f51320",
"text": "Fist money does not have legal tender. And technically there are thousands of people willing to fight for bitcoin, who can be seen as an army so in that logic bitcoin has some intrinsic value. But both don't have intrinsic value. Most sources on the internet I can find agree with that. Wikipedia, investopedia and many others. Not that money needs intrinsic value. If the market value is 1000 times above the intrinsic value then the intrinsic value is not even relevant. But 1000 * 0 = 0 and the intrinsic value of the dollar itself (not coins) will always be 0. Same for the EUR and then YUAN.",
"title": ""
},
{
"docid": "14aeb975937fddce5a74b66509faa80b",
"text": "Well, if the bond notes are the only currency around, then the electric company will have to choose from at least one of the money supplies to accept as payment; bonds will be the cash. Whichever firm they choose will just see their money demand go up. Second, It will most likely be implied that those people choosing to go into a certain money supply will want to look for a produced good or service in the economy from that firm before taking on it's notes. If the supply has too much inflation for everyone, than they can all move to another one that ensures their capital value. The idea of these systems is also to facilitate productive decision making, which is one of the things are education system should do more of these days. This will be more possible when Government is more limited to and more focused on the role of researcher and developer.",
"title": ""
}
] |
fiqa
|
46aa6170a96de7ecf6b9250ec7af702b
|
Are there any regulations regards end of loan payment procedures?
|
[
{
"docid": "180891a9e29d7ad7a96a15eaec0e7bc2",
"text": "There are federal regulations that state that: As a result it can be assumed that when a loan is paid off, notification should be given to the borrower. There is not a penalty since schools are pretty good about recovering their money. It could be due to a simple human error or glitch in the system. I would email them again confirming that your Perkins Loan had been paid in full, just so you have documentation of it.",
"title": ""
}
] |
[
{
"docid": "40ae70712ee0d2fee4c95c13d1d2069d",
"text": "If the loan is for a car, or mortgage there is specific paperwork that is processed when the loan payments have been completed. For other types of loans ask the lender, what will they give you regarding the payoff of the loan. Keep this paperwork, in hard copy and electronic form forever.",
"title": ""
},
{
"docid": "fa333059fd11e1523cf382938d912982",
"text": "\"Let me give you some advice from someone who has experience at both ends - had student loan issues myself and parents ran financial aid department at local university. Quick story of my student loan. I graduated in debt and could not pay at first due to having kids way too early. I deferred. Schools will have rules for deference. There are also federal guidelines - lets not get specific on this though since these change every year it seems. So basically there is an initial deferment period in which any student can request for the repayments to be deferred and it is granted. Then there is an extended deferment. Here someone has to OK it. This is really rather arbitrary and up to the school/lender. My school decided to not extend mine after I filled out a mound of paperwork and showed that even without paying I had basically $200 a month for the family to live off past housing/fixed expenses. Eventually they had to cave, because I had no money so they gave me an extended deferment. After the 5 years I started paying. Since my school had a very complex way to pay, I decided to give them 6 months at a time. You would think they would love that right? (On the check it was clearly stated what months I was paying for to show that I was not prepaying the loan off) Well I was in collections 4 months later. Their billing messed up, set me up for prepayment. They then played dumb and acted like I didn't but I had a picture of the check and their bank's stamp on the back... They couldn't get my loan out of collections - even though they messed up. This is probably some lower level employee trying to cover their mistake. So this office tells creditors to leave me alone but I also CANNOT pay my loan because the credit collection agency has slapped a 5k fee on the 7k loan. So my loan spent 5 years (kid you not) like this. It was interest free since the employee stopped the loan processing. Point being is that if you don't pay the lender will either put your loan into deferment automatically or go after you. MOST (not all) schools will opt for deferment, which I believe is 2 years at most places. Then after that you have the optional deferment. So if you keep not paying they might throw you into that bucket. However if you stop paying and you never communicate with them the chances of you getting the optional deferment are almost none - unless school doesn't know where you live. Basically if you don't respond to their mail/emails you get swept into their credit collection process. So just filling out the deferment stuff when you get it - even if they deny it - could buy you up to 10 years - kid you not. Now once you go into the collection process... anything is game. As long as you don't need a home/car loan you can play this game. What the collection agency does depends on size of loan and the rules. If you are at a \"\"major\"\" university the rules are usually more lax, but if you are at the smaller schools, especially the advertised trade/online schools boom - better watch out. Wages will be garnished very soon. Expect to go to court, might have to hire an attorney because some corrupt lenders start smacking on fees - think of the 5k mine smacked on me. So the moral of the story is you will pay it off. If you act nice, fill out paperwork, talk to school, and so on you can probably push this off quite a few years. But you are still paying and you will pay interest on everything. So factor in that to the equation. I had a 2.3% loan but they are much higher now. Defaulting isn't always a bad thing. If you don't have the money then you don't have it. And using credit cards to help is not the thing to do. But you need to try to work with the school so you don't incur penalties/fees and so that your job doesn't have creditors calling them. My story ended year 4 that my loan was in collection. A higher up was reviewing my case and called me. Told her the story and emailed her a picture of their cashed check. She was completely embarrassed when she was trying to work out a plan for me and I am like - how about I come down tomorrow with the 7k. But even though lender admitted fault this took 20+ calls to agencies to clear up my credit so I could buy a house. So your goal should be:\"",
"title": ""
},
{
"docid": "0a2e54e542bab264da2cf0c2dc3f09b7",
"text": "There are different options here. Either way, ensure that you have a paper trail of all your payments. When in doubt, speak to a lawyer, there are many who offer free consultations.",
"title": ""
},
{
"docid": "55a4f389f97a24cc60821597a105d24a",
"text": "In the EU, you might be looking for Directive 2000/35/EC (Late Payment Directive). There was a statutory rate, 7% above the European Central Bank main rate. However, this Directive was recently repealed by Directive 2011/7/EU, which sets the statutory rate at ECB + 8%. (Under EU regulations, Directives must be turned into laws by national governments, which often takes several months. So in some EU countries the local laws may still reflect the old Directive. Also, the UK doesn't participate in the Euro, and doesn't follow the ECB rate)",
"title": ""
},
{
"docid": "b9300c42e6ddab9c79fd61d14d4cb061",
"text": "You should also be aware that there are banks that do business in the US that do not deal with Fannie Mae, and thus are not subject to the rules about conforming loans. Here is an example of a well-known bank that lists two sets of rates, with the second being for loans of $750,000 or more (meaning the first covers everything up to that) https://home.ingdirect.com/orange-mortgage/rates",
"title": ""
},
{
"docid": "60b52ce239d29324e0aacd35c82de6e3",
"text": "It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due.",
"title": ""
},
{
"docid": "1cee712904c22253683819c081aae7fc",
"text": "I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles. However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed. Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer. Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot.",
"title": ""
},
{
"docid": "743fe6aa7cf121a0fcb74e4e50c1c1b2",
"text": "Writing a promissory note will be sufficient. Presumably the money will be transferred on or near the date that the loan is signed, and the repayments will follow the pattern prescribed in the note. The IRS is only skeptical of family loans if there is no documentation to support the claim.",
"title": ""
},
{
"docid": "02e05f5235a7d8057f0aed641c5c7262",
"text": "You may need to specifically state that your extra payments should go towards principal, and should not be considered early payments of future months.",
"title": ""
},
{
"docid": "3f619a6f40638cb8a9ed76badeb58cb7",
"text": "\"Paperwork prevails. What you have is a dealer who get a kickback for sending financing to that institution. And the dealer pretty much said \"\"We only get paid our kickback at two levels of loan life, 6 and 12 months.\"\" You just didn't quite read between the lines. This is very similar to the Variable Annuity salespeople who tell their clients, \"\"The best feature about this product is that the huge commissions I get from the sale fund my kid's college tuition and my own retirement. You, on the other hand, don't really do so well.\"\" Car salesmen and VA sellers.\"",
"title": ""
},
{
"docid": "1ad8afd66a346863ad67ec813bbba710",
"text": "The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine.",
"title": ""
},
{
"docid": "f3fd5c9c209bfbf5883680b43d728caf",
"text": "You will be best to cancel the original instruction first, as you will have to wait for any pending payments to be received, as the banks will not entertain multiple refunds. After this can be confirmed the account will simply show a credit which you ask for. Many lenders/banks process these type of transactions after a period of time ie 30 days and there will be no way to speed this up, so the sooner you act the better. When you contact the bank have bank details for the payment(they might transfer externally fingers crossed), or you may receive a cheque in the post. Try to avoid complicating the matter with changes of address and ringing before you have cancelled the instruction etc if possible.",
"title": ""
},
{
"docid": "5694e32c676d48aaca4d8e2f863eaf4d",
"text": "If you selected a mortgage that allows additional payments to be credited against the principal rather than as early payment of normal installments, them yes, doing so will reduce the actual cost of the loan. You may have to explicitly instruct the bank to use the money this way each time, if prepay is their default assumption. Check with your lender, and/or read the terms of your mortgage, to find out if this is allowed and how to do it. If your mortgage doesn't allow additional payments against the principal, you may want to consider refinancing into a mortgage which does, or into a mortgage with shorter term and higher monthly payments, to obtain the same lower cost (modulo closing costs on the new mortgage; run the numbers.)",
"title": ""
},
{
"docid": "0cdbf1f4a40dcc629730439f9a65c531",
"text": "Disclaimer: I am not a banker nor a lawyer. I am unaware of the exact term in English, there is a process where you can ask for a reversal of a payment if it was made in error and your former employer should have made use of this. After a month though, I'm fairly sure the period of eligibility for this reversal has passed. As far as I am aware there is no point in time where it becomes ok for you to take this money. If you wish to close the account I would advise contacting the company and obtaining their payment details so you can transfer them the money and subsequently close the account.",
"title": ""
},
{
"docid": "97346439b9bda6cb87eaf6f87a228137",
"text": "Keep in mind that lenders will consider the terms of any loans you have when determining your ability to pay back the mortgage. They'll want to see paperwork, or if you claim it is a gift they will require a letter to that effect from your relative. Obviously, this could effect your ability to qualify for a loan.",
"title": ""
}
] |
fiqa
|
7833b8b9a507a8c2abb24a5c329b6eb6
|
If banksimple.com is not a bank, what is it?
|
[
{
"docid": "ee8fccbcca3d7618962273ff5df1d43a",
"text": "The model itself is fairly common for serving particular niche markets. A few other organizations which operate in similar setups: prepaid card providers such as NetSpend, GreenDot, AccountNow, etc; startups such as SmartyPig, PerkStreet, WePay, and HigherOne. Still, nobody else seems to be providing full-service online banking to mainstream customers the way we plan to. We plan to have much better security than most banks, which isn't hard given the current sorry state of online banking in the US. And having an intermediary who's looking out for your interests can be a good thing. David, my co-founder Josh lays out our launch plans and why we are invite-only in his latest post. In short, we made a decision to build our own call center rather than outsource it, and that limits how quickly we can bring people on.",
"title": ""
},
{
"docid": "235f063b15ea8d58511488c38c8316ab",
"text": "Looks more like an idea for a business rather than an actual business -- especially since it hasn't even launched. That said, it does have its merits. What bank actually holds the deposit funds becomes irrelevant, and may actaully change from time to time as they forge better partnerships with different banks. Think of it like a mutual fund -- the individual stocks (if there are stocks) in the fund are less important than the balance of risk vs. income and the leveling of change over the course of time. It offers services banks offer, without fees (at least that is the proposal) with the addition of budgetting capability as well. It does have downsides as well There is an increased level of indirection between you and your money. They propose to simplify the banking business model, but in fact are only hiding it from you. The same complexity that was there before is still there, with the added complexity of their service on top of it. It's just a matter of how much of that complexity you would have to deal with directly. With that in mind, I would reiterate that they are not a business yet -- just a proposed business model. Even the sign up process is a red flag for me. I understand they need to gauge interest in order to forge initial relationships with various banks, but I don't see the need for the 'invitation only' sign up method. It just sounds like a way to increase interest (who doesn't like feeling exclusively invited), and is a bit too 'gimmicky' for my taste. But, like I said, the idea has merit -- I have my reservations, but will reserve full judgement until they are an actual operating business.",
"title": ""
},
{
"docid": "ad95541644e49cb3761095f39c7f52da",
"text": "\"I don't see how this concept takes off. First and foremost, BankSimple is NOT a bank but a tech company masquerading as one. BankSimple leaves industry regulation and treasury management -- the CORE of banking, to outside parties. Call me old fashioned, but I prefer to have as few stops between me and my money as possible. If not for a fear of losing it in a robbery and inability to earn interest, I'd shove it under a mattress. So why would I want to bank with an intermediary, who admittently doesn't understand how the process works? How is that \"\"looking out for my interests\"\"? And how is your security better than other institutions that offer 128-bit encryption and multiple security questions to test a customer's identity? I'd like to add that not charging overdraft fees and providing lines of credit to help customers out in the event they spend more than they have is nice in concept, but what happens when those same customers do not make deposits to cover their shortfalls? When it comes to money, people will take advantage of any opportunities they have to circumvent the system. Especially if funds are tight.\"",
"title": ""
}
] |
[
{
"docid": "2254fe416d8e60c86d1f4473f3238fe0",
"text": "Update: it looks like this may no longer be a requirement. I was able to withdraw from TreasuryDirect into another bank account without issue.",
"title": ""
},
{
"docid": "7c30e030994a0056aa4467e006942217",
"text": "You might check out Thrive. They're almost a carbon copy of Mint from the last I checked, but with some additional and (I think) more useful metrics. For instance, they seemed to help more to plan for future expenses in addition to keeping tabs on individual budgets the way Mint does. Everything is automated in the same way as Mint, though I'm not sure their breadth is as far-reaching now since Mint was bought out by Intuit. Nevertheless, whenever I've had a question on Thrive, I shoot it to the devs and I get a very personal and courteous response within the day. So it depends on what you're looking for: Mint can almost guarantee any US bank will be accessible through their site, however Thrive will work much harder to gain your favor.",
"title": ""
},
{
"docid": "1d9d3121a57a654f46a39ca379ab12ec",
"text": "Those fields are used in a bank-to-bank transfers that do not use SWIFT. SWIFT is a messaging system, however with the fields you have listed, banks can exchange messages directly without having to use SWIFT. Your bank may not support bank-to-bank transfers, in which you need to notify your client that it needs to be a SWIFT transfer.",
"title": ""
},
{
"docid": "b5d49eeba6439306dafda1540ce9d30c",
"text": "Exactly. Or if you prefer, they were not acting *as* banks when doing so. (Well, at least by the definition I gave, obviously. If you prefer a different definition, you get a different answer. Although I'm not sure there really is a useful definition of banking that would cover the behaviour you described.)",
"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": "784dc17a63c49148584cfa21eca0421b",
"text": "Their messaging always weirded me out. They keep talking about you not needing a bank, but have no checking savings. Probably because it's low margin. They stick to student loans, mortgages from rich parts of the market for low risk. They tranche them just like old housing mortgages, but I wonder if there are enough high quality customers out there to satisfy the demand of their investors.",
"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": "b65b627719b3ee2b52feb10c3e1222fa",
"text": "One of us is misreading the other's message. I think FDIC is great. If a Congolese citizen wants to buy the company I work at right now, great. I just make an exception for state owned enterprises, royal families, et cetera.",
"title": ""
},
{
"docid": "830598775e637c5f87e5ecf2bbbf7e59",
"text": "I don't know that. I know mine has a great mobile app where I can deposit a check online. And all the smaller banks I've seen dont build their own sites or apps, they white label generic ones from common vendors.",
"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": "bdcc8808bdf896f1396ddc7bb2e6a235",
"text": "CashBase has a web app, an iPhone app and an Android app, all sync'ed up. It doesn't integrate with banks automatically, but you can import bank statements as CSV. Disclaimer: I'm CashBase's founder.",
"title": ""
},
{
"docid": "7f27667221cca30f0a98511cc22f04d9",
"text": "I'm always hesitant to use local credit unions because I love accessing all atms fee free, having services available 24/7, having robust, safe and audited online services, and having a big enough bank that all major third party tools interface with it. Joe Schmo Local Credit Union has a lot of good services, but audited and secure online banking? No fee nationwide ATMs? Native interfacing to major tools? I just don't see it often. I shudder to think of the security at small bank websites, frankly.",
"title": ""
},
{
"docid": "5de2302daad9e8d231a14595943b7a66",
"text": "Many U.S. banks now support POPMoney, which allows recurring electronic transfers between consumer accounts. Even if your bank doesn't support it, you can still use the service. See popmoney.com.",
"title": ""
},
{
"docid": "31fc9c275253a8a25056530c6bdd76d5",
"text": "I read an article where this website did an interview with them and concluded its very sketchy and possibly illegal. They refused to give out their FDIC number and they got the high interest rate by selling personal customer information to third parties",
"title": ""
},
{
"docid": "cd91ac9a13ba443f8dd0b2a5af1598d9",
"text": "You will probably not be able to figure out the bank from the account number. You can check for your name on registries of abandoned bank accounts or unclaimed money, but without more information, you don't have a lot of options.",
"title": ""
}
] |
fiqa
|
711c00f33bfa077576d4e751fa7fa068
|
How can a credit card company make any money off me? I have a no-fee card and pay my balance on time
|
[
{
"docid": "53552812408e5317cdfaa66b3d22b403",
"text": "Credit cards have two revenue streams: So yes, the are making money from your daily use of the card.",
"title": ""
},
{
"docid": "c20932e982311b1eb7c0ae28931d70f1",
"text": "They don't make any money off of you personally. They make money off of the merchants per transaction when you use the card. You trigger this fee to the credit card issuer, but it doesn't come out of your pocket. (Or it shouldn't; merchants aren't allowed to pass this fee on to you.) They keep you around because you may at some point become less responsible than you already are, and it would be quite costly to get you back (a couple hundred dollars is the cost of acquiring a new credit card customer). People who are less responsible than you subsidize your free float and your rewards (if any) but the new CARD act makes it more difficult for people to use their cards irresponsibly, so these perks that you enjoy will get less perky with time.",
"title": ""
},
{
"docid": "0f03fc2da0b47a0bb430485b28eb283f",
"text": "Of course they make money. They double dip in a lot of instances they make 2 - 3% plus $0.30 per transaction from the merchant and then whatever interest you pay on your card. So let's just say in one day you make stops at Starbucks for a $4 Latte, then at Wendy's for lunch for about $8, then you put about $20 worth of gas in your tank, then you stop at Kroger for some $40 groceries and may you pick up some dinner for about $15. That's 5 transactions at $0.30 which is a $1.50 then at 3% starbucks is $0.12, Wendy's $0.24, gas is $0.60 then kroger $1.20 then dinner $0.45 so the total that they get is $4.11 multiply this by about a million people per day that is about $4.1 million per day that they get. That is a nice penny! just from the merchant so you are making them a lot of money by just using it.",
"title": ""
},
{
"docid": "5bf19fd604b1be18afc9a8357116ed92",
"text": "Maybe they don't make much, but they make some for sure. In addition to what duffbeer703 says, they also have a warm body at the end of the line and will sell your contact info (or at least access to your eyeballs) to marketers. They stuff advertisements into your bill for example. If nothing else, you are brand value for them as they can convince merchants (who get charged monthly) that X billion people carry their card and that merchant would be missing out on sales by not accepting their product. If you have a rewards card that pays you for using it, the merchant has higher corresponding fees.",
"title": ""
},
{
"docid": "5b0d95869358bf04e59f28abbe0058a2",
"text": "\"Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying \"\"Sorry, we don't accept AmericanExpress\"\"). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there's added security as they're not dealing with cash directly, and they don't have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company's fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn't going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company's service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction.\"",
"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": "e16dfc5ebe4ff44d109ba85703e0815c",
"text": "If you've agreed to pay the money, then you owe them whether they have a valid credit card number of yours or not. If they want to report your debt to a collections agency and/or credit bureau, they can. Which would suck for you. It may not be that likely over $9.99 or whatever, but my point is that it's still a small risk even with a temporary card number.",
"title": ""
},
{
"docid": "bcf3e85b478a43834c0d63f867c7c6a3",
"text": "\"Other answers didn't seem to cover it, but most \"\"0%\"\" bank loans (often offered to credit card holders in the form of balance transfer checks), aside from less-obvious fees like already-mentioned late fees, also charge an actual loan fee, typically 2-3% (or a minimum floor amount) - that was the deal with every single transfer 0% offer I ever saw from a bank. So, effectively, even if you pay off the loan perfectly, on time, and within 0% period, you STILL got a 3% loan and not 0% (assuming 0% period lasts 12 months which is often the case).\"",
"title": ""
},
{
"docid": "7b000a97892cc975d572e05f9af9505f",
"text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due.",
"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": "25289ea61944e5b4bafd9ae395d2a347",
"text": "\"never carry a balance on a credit card. there is almost always a cheaper way to borrow money. the exception to that rule is when you are offered a 0% promotion on a credit card, but even then watch out for cash advance fees and how payments are applied (typically to promotional balances first). paying interest on daily spending is a bad idea. generally, the only time you should pay interest is on a home loan, car loan or education loan. basically that's because those loans can either allow you to reduce an expense (e.g. apartment rent, taxi fair), or increase your income (by getting a better job). you can try to make an argument about the utility of a dollar, but all sophistry aside you are better off investing than borrowing under normal circumstances. that said, using a credit card (with no annual fee) can build credit for a future car or home loan. the biggest advantage of a credit card is cash back. if you have good credit you can get a credit card that offers at least 1% cash back on every purchase. if you don't have good credit, using a credit card with no annual fee can be a good way to build credit until you can get approved for a 2% card (e.g. citi double cash). additionally, technically, you can get close to 10% cash back by chasing sign up bonuses. however, that requires applying for new cards frequently and keeping track of minimum spend etc. credit cards also protect you from fraud. if someone uses your debit card number, you can be short on cash until your bank fixes it. but if someone uses your credit card number, you can simply dispute the charge when you get the bill. you don't have to worry about how to make rent after an unexpected 2k$ charge. side note: it is a common mis-conception that credit card issuers only make money from cardholder interest and fees. card issuers make a lot of revenue from \"\"interchange fees\"\" paid by merchants every time you use your card. some issuers (e.g. amex) make a majority of their revenue from merchants.\"",
"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": "5de33e9ed8137e3add616b13b786624b",
"text": "\"From the card issuer's point of view, the purpose of balance transfers is very simple. A credit card company wants you to owe them more money, so they will make more profit getting more interest payments from you. To do that, they will offer an (apparently) good deal to transfer the debt that you owe to other companies onto their card. The deal may superficially look good to you, because it offers a low interest rate for a limited time period, etc. But never forget that its real purpose is to be a good deal for the card company, not for you. Of course, credit card companies target these deals at their \"\"typical\"\" customers. They have to tolerate a few \"\"smart\"\" customers who actually make them no money at all, by always paying off their card balance before any interest is due, never using their card to draw cash from an ATM (which has no interest-free loan period), never using their card for overseas transactions that incur fees and/or poor currency exchange rates, etc. Your financial objective should be to make yourself one of the customers the card company doesn't want - but \"\"only paying off the minimum balance every month\"\" is exactly the wrong way to do that!\"",
"title": ""
},
{
"docid": "00e5b6849aa3eb56d71d5a50da47a537",
"text": "\"Well, I answered a very similar question \"\"Credit card payment date\"\" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this so interesting? It's no trick, and no secret. By the way, this isn't likely to be of any use when you're buying gas, groceries, or normal purchases. But, I suppose if you have a large purchase, say a big TV, $3000, this will buy you extra time to pay. It would be remiss of me to not clearly state that anyone who needs to take advantage of this \"\"trick\"\" is the same person who probably shouldn't use credit cards at all. Those who use cards are best served by charging what they can afford to pay at that moment and not base today's charges on what paychecks will come in by the due date of the credit card bill.\"",
"title": ""
},
{
"docid": "2180f91615b9d9c4599b3ab34e79b69e",
"text": "1) Every credit card company charges vendors a fee. That's sufficient to make an acceptable profit per charge even if some of that money goes into marketing expenses -- and the cash-back offer is a marketing expense. 2) Many if not most consumers pay interest; probably everyone does so occasionally when we get distracted and miss a payment. 3) The offer encourages you to put more payments on the card -- and in particular on their card -- than you might otherwise. See #1; that increases net income.",
"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": "b4e97de34cef36c0dad6a1c09fff5040",
"text": "\"It is called \"\"Credit card installments\"\" or \"\"Equal pay installments\"\", and I am not aware of them being widely used in the USA. While in other countries they are supported by banks directly (right?), in US you may find this option only in some big stores like home improvement stores, car dealerships, cell phone operators (so that you can buy a new phone) etc. Some stores allow 0% financing for, say, 12 months which is not exactly the same as installments but close, if you have discipline to pay $250 each month and not wait for 12 months to end. Splitting the big payment in parts means that the seller gets money in parts as well, and it adds risks of customer default, introduces debt collection possibility etc. That's why it's usually up to the merchants to support it - bank does not care in this case, from the bank point of view the store just charges the same card another $250 every month. In other countries banks support this option directly, I think, taking over or dividing the risk with the merchants. This has not happened in US. There is a company SplitIt which automates installments if stores want to support it but again, it means stores need to agree to it. Here is a simple article describing how credit cards work: https://www.usbank.com/credit-cards/how-credit-cards-work.html In general, if you move to US, you are unlikely to be able to get a regular credit card because you will not have any \"\"credit history\"\" which is a system designed to track each customer ability to get & pay off debt. The easiest way to build the history - request \"\"secured credit card\"\", which means you have to give the bank money up front and then they will give you a credit card with a credit limit equal to that amount. It's like a \"\"practice credit card\"\". You use it for 6-12 months and the bank will report your usage to credit bureaus, establishing your \"\"credit score\"\". After that you should be able to get your money back and convert your secured card into a regular credit card. Credit history can be also built by paying rent and utilities but that requires companies who collect money to report the payments to credit bureaus and very few do that. As anything else in US, there are some businesses which help to solve this problem for extra money.\"",
"title": ""
},
{
"docid": "f8109b05f5d08b665d3a2bff4d6e99bb",
"text": "Credit card companies charge merchants for accepting their cards. They'll take their cut and give you some of the fee back as a reward. So, in reality merchants have increased their prices to accommodate for the credit card processing fees. The credit card takes a bit of their fee and gives you back some of the money you wouldn't have spent if there were no fees for using a credit card.",
"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": "a02953d7276dc71ac04d14269d15ff1c",
"text": "Much money is made by creditors on the transaction value of a client in addition to interest value. Knowing that, I pay off all my cards every month, have never made a late payment, and get a number of offers every year for reward type cards. Don't ever be worried about paying off your card in full, just be sure you're using your card and that you pay on time, every time.",
"title": ""
}
] |
fiqa
|
aaee59a05f9f8d4bfd09a6d102529f61
|
Free cash flow and capex on morningstar.com
|
[
{
"docid": "e4a6f20f1d8ec5ed31c6003b6ff660df",
"text": "\"Free Cash Flow (FCF) is not a metric/data point which represents any ACTUAL cash flow of a company. FCF is a data point which communicates how much cash a company has after Operating cash requirements and cash expenditures \"\"required\"\" to grow and maintain the existing business. FCF can be used to pay dividends, buy back stock, purchase companies, et cetera. None of which are REQUIRED to run the business.\"",
"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": "237d225e0da24ae0ac9d26ba666568d8",
"text": "i will not calculate it for you but just calculate the discounted cash flow (by dividing with 1.1 / 1.1^2 / 1.1^3 ...)of each single exercise as stated and deduct the 12.000 of the above sum. in the end compare which has the highest npv",
"title": ""
},
{
"docid": "8958b5c15f7245431cc66cdfeca66ed0",
"text": "Questrade is a Canada based broker offering US stock exchange transactions as well. It says this right on their homepage. ETFs are traded like stocks, so the answer is yes. Why did you think they only offered funds?",
"title": ""
},
{
"docid": "de1433f15a5657ab6d10c2427bdd38b9",
"text": "As @littleadv and @DumbCoder point out in their comments above, Bloomberg Terminal is expensive for individual investors. If you are looking for a free solution I would recommend Yahoo and Google Finance. On the other side, if you need more financial metrics regarding historic statements and consensus estimates, you should look at the iPad solution from Worldcap, which is not free, but significantly cheaper then Bloomberg and Reuters. Disclosure: I am affiliated with WorldCap.",
"title": ""
},
{
"docid": "2649f29b989d8e7f895fca5b3d7d7194",
"text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"",
"title": ""
},
{
"docid": "fc784201d1147155f79cd4e356cbe61a",
"text": "edit: nevermind. i glanced and thought you meant total market mutual funds. For fixed income - if you want to get a good analysis of the bond market/interest rates, i would suggest you read some of bill gross' letters off the pimco site - a lot of discussion about our current zero bound interest rates. For equities - I have the view that if the economy is doing well, people are less inclined to focus on dividend yield...thereby lowering the relative multiples on dividend/fcf yielding stocks. So total return fund may be trading slightly cheaper.",
"title": ""
},
{
"docid": "9e6f5a82008f9330d2061b78d7cbadd5",
"text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year",
"title": ""
},
{
"docid": "9351d22e6c503efd0342ed11b4695e78",
"text": "I just called options express, and apparently you need a margin account for futures and options, but you don't NEED margin to trade futures. I will have to debate the merits, but I think I may try playing with it once I build up my regular stock account.",
"title": ""
},
{
"docid": "88f2601280f52c488c4745adbf7d599a",
"text": "I'm not 100% sure, but I don't think it would be considered a free ride. The idea of a free ride is that you are engaging in a transaction when you do not actually have the money available to cover it, since the broker is technically giving you a 3 day loan whenever you purchase your stock (3 day rule to settle.) However, if you are using a margin account, and you have enough credit available, then you are not actually using unsettled assets, but rather an additional line of credit which was granted to you. You would just need to make sure that your total transactions are less than your purchasing power. That's my take on it anyway. I hope that helps, and hopefully someone can confirm or reject what I have said.",
"title": ""
},
{
"docid": "55b98bac35fca6833f115fb68dd9e9e2",
"text": "The simple answer is technically bonds don't have earnings, hence no P/E. What I think the OP is really asking how do I compare stock and bond ETFs. Some mature stocks exhibit very similar characteristics to bonds, so at the margin if you are considering investing between 2 such investments that provide stable income in the form of dividends, you might want to use the dividend/price ratio (D/P) of the stock and compare it to the dividend yield of the bond. If you go down to the basics, both the bond and the stock can be considered the present value of all future expected cashflows. The cash that accrues to the owner of the stock is future dividends and for the bond is the coupon payments. If a company were to pay out 100% of its earnings, then the dividend yield D/P would be conveniently E/P. For a company with P/E of 20 that paid out it's entire earnings, one would expect D/P = 1/20 = 5% This serves as a decent yard stick in the short term ~ 1 year to compare mature stock etfs with stable prospects vs bond funds since the former will have very little expected price growth (think utilities), hence they both compete on the cashflows they throw off to the investor. This comparison stops being useful for stock ETFs with higher growth prospects since expected future cashflows are much more volatile. This comparison is also not valid in the long term since bond ETFs are highly sensitive to the yield curve (interest rate risk) and they can move substantially from where they are now.",
"title": ""
},
{
"docid": "aade973ed2fc9f2d0cc26bc56b1d2607",
"text": "This looks more like an aggregation problem. The Dividends and Capital Gains are on quite a few occassions not on same day and hence the way Yahoo is aggregating could be an issue. There is a seperate page with Dividends and capital gains are shown seperately, however as these funds have not given payouts every year, it seems there is some bug in aggregating this info at yahoo's end. For FBMPX http://uk.finance.yahoo.com/q/hp?s=FBMPX&b=2&a=00&c=1987&e=17&d=01&f=2014&g=v https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/316390681 http://uk.finance.yahoo.com/q/pr?s=FBMPX",
"title": ""
},
{
"docid": "ee13d447ca63a0e4424994931d061598",
"text": "https://www.hussmanfunds.com/wmc/wmc171009m.png >The following charts will provide a sense of where the U.S. equity market currently stands. The first chart shows our margin-adjusted CAPE, which as noted above has a correlation of about -0.89 with actual subsequent market returns across U.S. market cycles since the 1920’s. https://www.hussmanfunds.com/wmc/wmc171009.htm It will turn, downside potential is historic.",
"title": ""
},
{
"docid": "379fd084a7b1339e70292490902c9a36",
"text": "I don't see a contrast. It's really hard to predict which mutual funds will do well in the future. Predicting that ones which have done well recently will continue to do well works slightly better than chance. The WSJ article and Morningstar agree on all the objective facts, they just spin them differently.",
"title": ""
},
{
"docid": "19ac0999abb883032e6599d328eeb541",
"text": "The three sites mentioned in the second link are all professional trading workstations, not public web sites. There may not be free quotes available.",
"title": ""
},
{
"docid": "85f66c1e48bebc938ca53a2fc722f965",
"text": "Sure. No-one promises that all the outstanding stocks are ever for sale, but if you get them all - you get them all, what marketplace you used for that doesn't really matter.",
"title": ""
}
] |
fiqa
|
58764b9a899072fdf4a1b2acda5e4504
|
Filing a corporation tax return online?
|
[
{
"docid": "36ed8d706a4650c12342497bdeadc185",
"text": "When in doubt, you should always seek the advice of a professional tax preparer or your accountant. (Many agents/accountants will gladly review your tax preparations to ensure you haven't missed something. That's quicker and cheaper than paying them to do it all.) Having said that... This Illinois resource has detailed information about S-corps: Of relevance to your situation:",
"title": ""
},
{
"docid": "90bf0c014b7268f7f6404fa099240da9",
"text": "This may not exactly answer your question but, as a small business owner, I would highly recommend having a professional handle your taxes. It is worth the money to have it done correctly rather than doing something wrong and getting audited or worse having penalties assessed and owing more than you thought would be possible. I would recommend this especially if this is how you make your primary income, you can always write it off as a business expense.",
"title": ""
}
] |
[
{
"docid": "9c19f9ceaab748d179323a7f07b6ec39",
"text": "It is a great advice. I would suggest going to the Companies House (it's in London somewhere), picking up all of their leaflets regarding requirements for different forms of corporate entity, and deciding if you want to have that burden. It is not a lot of work, you can essentially claim VAT on all business purchases (the way roughly it works, is that your company invoices your client, your client has to pay the fee + VAT (usually that VAT is then deducted by your client from it's VAT, so no loss there), and you pay the VAT on the difference between the service sales price, and your costs (computers etc.) ) You have to be careful to avoid excessive double taxation (paying income tax on both corporate income, and then your personal income off said company), but it usually comes off in your favor. Essentially, if you're making more than 50% of your income from services rendered, it is to your advantage to render such services as a business entity.",
"title": ""
},
{
"docid": "1d4ba8a949e4138c61188e7132d74980",
"text": "You need to file IRS Form 1040-NR. The IRS's website provides instructions.",
"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": "8d28aa994d28e9404b96d8ac04f34c79",
"text": "LLC doesn't explain the tax structure. LLCs can file as a partnership (1065) Scorp (1120S) or nothing at all, if it's a SMLLC. (Single Member LLC). I really enjoy business, and helping people get started. If you PM me your contact information, id be more than happy to go over any issues you may have, and help you with your current issue.",
"title": ""
},
{
"docid": "00b3c587b025b5ae800f89468ba7f5d0",
"text": "To be on the safe side - you'll want to get the full invoice. You don't need to actually print them, you can save it as a PDF and make sure to make your own backups once in a while. Only actually print them when the IRS asks you to kill some trees and send them a paper response, and even then you can talk to the agent in charge and check if you can email the digital file instead. The IRS won't ask for this when you file your taxes, they will only ask for this if you're under audit and they will want to actually validate the numbers on your return. You'll know when you're under audit, and who is the auditor (the agent in charge of your case). You'll also want to have some representation when that happens.",
"title": ""
},
{
"docid": "dc0f5b39efa96f612d974c9271078571",
"text": "As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine.",
"title": ""
},
{
"docid": "0a998ba4e2f818772ac51100aeaa986e",
"text": "I am from India. I visited US 6-8 times on business VISA and then started 2 Member LLC. Myself and My wife as LLC Members. We provide Online Training to american students from India. Also Got EIN number. Never employed any one. Do i need to pay taxes? Students from USA pays online by Paypal and i am paying taxes in India. Do i need to pay Taxes in US? DO i need to file the Tax returns? Please guide me. I formed LLC in 2010. I opened an Office-taken Virtual office for 75 USD per month to open LLC in 2010. As there is physical virtual address, am i liable for US taxes? All my earning is Online, free lancing.",
"title": ""
},
{
"docid": "094dc968198d3380a7c3aa6a75e77ac5",
"text": "\"A tax return is a document you sign and file with the government to self-report your tax obligations. A tax refund is the payment you receive from the government if your payments into the tax system exceeded your obligations. As others have mentioned, if an extra $2K in income generated $5K in taxes, chances are your return was prepared incorrectly. The selection of an appropriate entity type for your business depends a lot on what you expect to see over the next several years in terms of income and expenses, and the extent to which you want or need to pay for fringe benefits or make pretax retirement contributions from your business income. There are four basic flavors of entity which are available to you: Sole proprietorship. This is the simplest option in terms of tax reporting and paperwork required for ongoing operations. Your net (gross minus expenses) income is added to your wage income and you'll pay tax on the total. If your wage income is less than approximately $100K, you'll also owe self-employment tax of approximately 15% in addition to income tax on your business income. If your business runs at a loss, you can deduct the loss from your other income in calculating your taxable income, though you won't be able to run at a loss indefinitely. You are liable for all of the debts and obligations of the business to the extent of all of your personal assets. Partnership. You will need at least two participants (humans or entities) to form a partnership. Individual items of income and expense are identified on a partnership tax return, and each partner's proportionate share is then reported on the individual partners' tax returns. General partners (who actively participate in the business) also must pay self-employment tax on their earnings below approximately $100K. Each general partner is responsible for all of the debts and obligations of the business to the extent of their personal assets. A general partnership can be created informally or with an oral agreement although that's not a good idea. Corporation. Business entities can be taxed as \"\"S\"\" or \"\"C\"\" corporations. Either way, the corporation is created by filing articles of incorporation with a state government (doesn't have to be the state where you live) and corporations are typically required to file yearly entity statements with the state where they were formed as well as all states where they do business. Shareholders are only liable for the debts and obligations of the corporation to the extent of their investment in the corporation. An \"\"S\"\" corporation files an information-only return similar to a partnership which reports items of income and expense, but those items are actually taken into account on the individual tax returns of the shareholders. If an \"\"S\"\" corporation runs at a loss, the losses are deductible against the shareholders' other income. A \"\"C\"\" corporation files a tax return more similar to an individual's. A C corporation calculates and pays its own tax at the corporate level. Payments from the C corporation to individuals are typically taxable as wages (from a tax point of view, it's the same as having a second job) or as dividends, depending on how and why the payments are made. (If they're in exchange for effort and work, they're probably wages - if they're payments of business profits to the business owners, they're probably dividends.) If a C corporation runs at a loss, the loss is not deductible against the shareholders' other income. Fringe benefits such as health insurance for business owners are not deductible as business expenses on the business returns for S corps, partnerships, or sole proprietorships. C corporations can deduct expenses for providing fringe benefits. LLCs don't have a predefined tax treatment - the members or managers of the LLC choose, when the LLC is formed, if they would like to be taxed as a partnership, an S corporation, or as a C corporation. If an LLC is owned by a single person, it can be considered a \"\"disregarded entity\"\" and treated for tax purposes as a sole proprietorship. This option is not available if the LLC has multiple owners. The asset protection provided by the use of an entity depends quite a bit on the source of the claim. If a creditor/plaintiff has a claim based on a contract signed on behalf of the entity, then they likely will not be able to \"\"pierce the veil\"\" and collect the entity's debts from the individual owners. On the other hand, if a creditor/plaintiff has a claim based on negligence or another tort-like action (such as sexual harassment), then it's very likely that the individual(s) involved will also be sued as individuals, which takes away a lot of the effectiveness of the purported asset protection. The entity-based asset protection is also often unavailable even for contract claims because sophisticated creditors (like banks and landlords) will often insist the the business owners sign a personal guarantee putting their own assets at risk in the event that the business fails to honor its obligations. There's no particular type of entity which will allow you to entirely avoid tax. Most tax planning revolves around characterizing income and expense items in the most favorable ways possible, or around controlling the timing of the appearance of those items on the tax return.\"",
"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": "177452e08f5bcd1a5ccb6fada4720bcd",
"text": "\"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of \"\"How to File Your Income Taxes\"\" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or 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). It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as \"\"Royalty Property\"\". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4. I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income.\"",
"title": ""
},
{
"docid": "23daa071e6209ff4ccaf3a2c8cc13b2e",
"text": "You need to talk to an accountant who practices tax accounting, preferaby someone who is an Enrolled Agent (EA) with the IRS, and possibly an attorney who specializes in tax law. There are multiple issues here, and the executor of your father's estate might need to be involved here too. Presumably you were a minor in 2007 since the transactions took place in a custodial account, and perhaps you were a dependent of your father in 2007. So, were the transactions reported on your father's 2007 income tax return? or did he file a separate income tax return in your name? You say you have a W2 for 2007. So you were earning some income in 2007? This complicates matters. It is necessary to determine who has the responsibility to file income tax returns for a minor with earned income. Above all, I urge you to not file income tax returns on your own or using a tax return preparation program, or after talking to a tax return preparation service (where you will likely get someone who works on a seasonal basis and is unlikely to be familiar with tax law as of 2007).",
"title": ""
},
{
"docid": "e0da1c350ee0704b3a89e3d114cd5e5e",
"text": "I have been doing e-filing and I get the return in my account in 10 to 14 days over the past couple of years. It is worth the e-filing cost to get my money back a month faster.",
"title": ""
},
{
"docid": "84722d62eebbcb7adb23220fa92244a1",
"text": "Do you need to incorporate? This depends on whether the company prefers you to be incorporated. If you are going through a recruiting company, some of them are willing to deal with non-incorporated people (Sole Proprietor) and withhold taxes from your cheques for you. If you do want to incorporate, you can do it yourself, go through a paralegal, or you can even do it online. I did mine in Ontario for about $300 (no name search - i just have a numbered corporation like 123456 Ontario Inc.) through www.oncorp.com - there are other sites that do it as well. Things to consider - if you're contracting through a corporation you most likely need to: Talk to an accountant about these for clarification - most of them will give you an initial consultation for free. Generally speaking, accountant fees for corporate filing taxes averages about $1000-2000 a year.",
"title": ""
},
{
"docid": "9797c3ae43e312e7a4e29c26a0f28f57",
"text": "If i am not wrong, any business activities such should be declared on Year End Tax filing. If your friend is going to own that website either it is commercial or nonprofit, he has to declare in the year end taxation.",
"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": ""
}
] |
fiqa
|
a7f1086b0c94b52fc3d967748dcd07c4
|
Do companies that get taken-over have to honour the old gift card/certificate?
|
[
{
"docid": "3a78bb55ecfe2fb430be31b6985c68b4",
"text": "It depends completely on the nature of the takeover. When a business is bought, the new owner takes on the obligations of the prior owner, the debts don't just go away. When a business files for bankruptcy, its debts may get discharged, and gift card holders can easily be the first ones to get nothing back. A case in point was Sharper Image who stopped honoring gift cards even while the doors were open as they filed for bankruptcy.",
"title": ""
},
{
"docid": "9e3871bf398dd6ea9e573b13ebb1319c",
"text": "I know this is old, but Joe Taxpayer is wrong. When you dissolve a corporation in selling it, all liabilities go with the old owners and the new owners, smartly starting with a new corporation and taxpayer ID, start with a clean slate. The only way this is not true is if the new owners did not change a thing legally and kept everything the same, other than there names, which would be entirely insane if you asked any lawyer in the country. Gift cards are a touchy situation, if not negotiated in the deal, by law the new owners DO NOT have to take them. Yes, it's good PR, but when there's a considerable amount of money out there it could bury the new owners by giving away free stuff.",
"title": ""
}
] |
[
{
"docid": "67671d949d47e992245884da2f90c06b",
"text": "The NY company's board of directors are your agents and fiduciaries. I'll call them your agents below. The acquiring company entered into some contract that your agents negotiated. Whatever the acquiring company owes you in terms of money, equity, or specific communication is based on what your agents dealt for in the sale contract. Best ask your agents what they got for you.",
"title": ""
},
{
"docid": "cd5a5805c50b110f2775b8b4850f1a38",
"text": "5.) Target allowed the use of the coupons for gift certificates, negating the profit they would have made themselves. The customers did not create this situation. Target also renewed the coupon system with full knowledge of the circumstances. Corporate systems are hardly capable of knowledgeably allowing injury they can prevent.",
"title": ""
},
{
"docid": "d18beb46cb0338a631f4fa4b4b77fcea",
"text": "My understanding it that the signature requirement is at the retailer's discretion. If the merchant decides to require a signature it protects them against fraudulent charge-back claims, but increases their administrative costs. In some situations it just isn't practical for a retailer to require a signature. Consider for example mail-order or online purchases, which I've never had to sign a credit card slip for.",
"title": ""
},
{
"docid": "7e5fe8aaa425cd08ca576a07c27c3f16",
"text": "You'd have to consult a lawyer in the state that the transaction took place to get a definitive answer. And also provide the details of the contract or settlement agreement. That said, if you clearly presented the check as payment (verbally or otherwise) and they accepted and cashed the check, and it cleared, you should have good legal standing to force them to finalize the payment. While they had every right to refuse the payment, and also every right to place a hold on the credit until the transaction cleared their bank, they don't have the right to simply claim the payment as a gift just because it came in a different form than they specified in the contract. Obviously this is a lesson learned on reading the fine print though. And, to be frank, it sounds like someone wants to make life difficult for you for whatever reason. And if that is the case I would refer back to my initial comment about contacting a lawyer in that state.",
"title": ""
},
{
"docid": "43e8c95da1e279bf671b0131e76f83ba",
"text": "Good question. I have no idea what legal recourse they have to reverse gift and credit card purchases. Cash people are probably safe. Like I said, it's unlikely they will do anything, but I would not be holding on to gift cards purchased via gift cards if it was my money on the line.",
"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": "05a2f8e0a28b65ca24ec68ecb84e114d",
"text": "The way I have seen this done in the past is the business will withhold taxes on the amount of the gift. Very much like receiving a bonus. There are probably other ways to do it where taxes are avoided like you boss could buy the gift for you personally. Not sure about all the legal ways to avoid taxes on this.",
"title": ""
},
{
"docid": "c4fe313697ab1f1eda3dfb44d0d27106",
"text": "Yes. Instead of paying a cash dividend to shareholders, the company grants existing shareholders new shares at a previously determined price. I'm sorry, but scrip issues are free (for all ordinary shareholders) and are in proportion to existing share holding. No payment is required from shareholders. So instead of having 10 $1 shares, the shareholder (if accepts) now could have 20 50p shares, if it was a one-for-one scrip issue.",
"title": ""
},
{
"docid": "fc9e6fa705358329c493d5f29d33399b",
"text": "\"Why would you consider it null and void? It might be that something went wrong and the business \"\"lost\"\" the transaction one way or another. It might be something else. It might never appear. It might appear. In one of the questions a while ago someone posted a link of a story where an account was overdrawn because of a forgotten debit card charge that resurfaced months later. Can't find the link right now, but it can definitely happen.\"",
"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": "0f09a405c8242b6ac42a50f5bbd2bd20",
"text": "\"Getting \"\"physical stocks\"\" will in most cases only be for the \"\"fun of it\"\". Most stocks nowadays are registered electronically and thus the physical stock will be of no value - it will just be a certificate saying that you own X amount of shares in company X; but this information is at the same time registered electronically. Stocks are not like bearer bonds, the certificate itself contains no value and is registered to each individual/entity. Because the paper itself is worthless, stealing it will not affect your amount of stock with the company. This is true for most stocks - there may exist companies who live in the 70s and do not keep track of their stock electronically, but I suspect it will only be very few (and most likely very small and illiquid companies).\"",
"title": ""
},
{
"docid": "b6d8ecadbd9030bfa54936e96161faef",
"text": "Question 1: Who do I report such fraud to? Walmart, or their card processor. They may be in their right to require the original purchaser to do the report. Generally, credit card and debit card fraud must be reported to the bank within 60 days of the statement for them to take responsibility. I don't see why gift cards would be different. You can also report it to the police, but I believe you'll be asked to file a report in the jurisdiction where the card was used. Again - time is of the essence, and there's nothing much they could do with your report now. Question 2: How can I recover the $100 value of my Walmart gift card? At this point, 2.5 years later when the card was used to buy prepaid cards, there's no way to catch the thief and recover the funds. Had you reported it promptly, Wlamart could have block the prepaid cards sold or track their usage, but now is too late. Question 3: Is Citibank in any way liable? (The gift card was fraudulently used shortly after---within the same month---I received it from Citibank.) I doubt it unless you can show a pattern. It could be someone working for the Citibank, someone working for the USPS, or someone just stole a bunch of numbers and waited until they became activated.",
"title": ""
},
{
"docid": "c3c2aed57ee5fbf0d1db32a4a7e0c190",
"text": "They cannot refuse to accept coins and demand some other payment after providing a good or service. Legal tender is legal tender for all debts. But until they provide the good or service, they don't have to accept it. In this case, you want the service of depositing money. But by its nature, they have to accept the payment first. In that situation, they can refuse it. There is no law that banks have to accept your deposits. If they don't want you as a customer, that's their problem. Consider switching banks. Historically this was easier and some banks may still do things the old way. Call your local banks and ask. Perhaps you'll find someone happy to do business with you, on your terms. As already said, some coin rolling machines will pay you with gift certificates. If you plan to buy a sufficient amount from the place that accepts the gift certificate, this can get that place to play the fee. That may help you, although it is obviously a limited solution. The goal is to make it so that you only make purchases that you would have anyway. The seller obviously has a different goal. It's possible to buy coin sorters. Heck, you could buy one with a gift certificate from a public machine. Cheap ones require extra work to get the coins rolled and may jam a lot. More expensive ones do more of the work for you. Note that a given sorter that works better may be cheaper than another that doesn't work as well. Cheap is more of a qualitative judgment than a financial measure in this case. If you carry a small amount of change with you, pretty much everywhere accepts small amounts of change for purchases. So if you have been always paying with dollars and dumping the change in a jar, instead always give the correct change (coins). They may still give you dollars in change, but at least you won't get new coins. And you'll use some of your existing coins. Of course, this doesn't scale well. For small purchases, say $1.50, you can often pay the whole thing in change without argument. Or if something is $18.50, you might give them $10, $5, two $1 bills, and the rest in change. If you are buying something and can see that they have little change in one of the coin buckets, offer to swap some change for bills. Sometimes places find that easier than breaking a roll. With vending machines, use change instead of dollar bills. Especially use exact change so as not to convert bills to change. They usually don't take pennies, but they're great with nickels and above. This won't allow you to use change as a way to force yourself to save. But it will keep your change down to a manageable level going forward. And you might be able to use up your existing store. I'm assuming that this isn't a fifty year coin collection that you are just now starting to process. But if you have six months of change, you should be able to use it up in a year or so. I tend to do this. So I rarely have more than a couple dollars in change. No one ever tells me that they don't take change, because I don't give anyone a lot. Maybe $.99 here but more likely $.43 there. Sometimes I give them, e.g., $.07 so as to get $.25 in change rather than $.18. It's a little more work at every transaction, but it saves the big clump of work of rolling the coins. And you don't have to buy wrappers.",
"title": ""
},
{
"docid": "41a06545fc835b047c6d7573dbab219c",
"text": "\"So this situation is fraud. -SumGuy: \"\"Hey Mr. Target employee can I use this to buy this.\"\" -Employee: \"\"Abso-fucking-lutely Sir\"\". The responsibility lies on the store, not the customer in this situation. Terms of service on things like coupons are not LAWS, they are terms a company is telling you they will accept. For this Company to then accept it makes these people a few bucks richer, not criminals. The customers did not lie or hide what they where doing, and the company accepted it. Good on em I say.\"",
"title": ""
},
{
"docid": "b96288340f7a74edaf5cd6401bbece0e",
"text": "All of this assumes that this relationship isn't as employer-employee relationship, which would require you to withhold taxes. If you send them a small token of appreciation, and you are unable to record it as a business expense, or some other deductible expense, you don't have to be concerned about how they claim it. They decide if they want to risk claiming it was a gift, or if they want to record it as an expense. Even if you say some magic phrase that you think will impress the IRS, the recipient can still decide declare it as income. To have any hope of being able to treat it as a gift they would have to be able to demonstrate that there is a non-business relationship. If you can claim it as a business expense, or a deductible expense, they will have to also claim it as income; because your documentation could point the IRS to their lack of documentation. Giving them a check or sending the payment electronically will require them to claim it as an income, since an audit could require them to explain every line on their bank statements.",
"title": ""
}
] |
fiqa
|
7f91cc8420f5d069dc599edf997dc969
|
Cash-basis accounting and barter
|
[
{
"docid": "e2e8a2005ee6a4a2493d39a3913215c3",
"text": "If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work.",
"title": ""
}
] |
[
{
"docid": "c7a0db3a6ebee00e142ce84292f72158",
"text": "There are two basic issues here. First, there is the difference between accounting terms and their dictionary definitions. Second, once you dig into it there are dichotomies similar to put vs call options, long sales vs short sales, bond yield vs interest rate. (That is, while they are relatively simple ideas and opposite sides of the same coin, it will probably take some effort to get comfortable with them.) The salient points from the Wikipedia article on debits and credits: In double-entry bookkeeping debit is used for increases in asset and expense transactions and credit is used for increases in a liability, income (gain) or equity transaction. For bank transactions, money deposited in a checking account is treated as a credit transaction (increase) and money paid out is treated as a debit transaction, because checking account balances are bank liabilities. If cash is deposited, the cash becomes a bank asset and is treated as a debit transaction (increase) to a bank asset account. Thus a cash deposit becomes two equal increases: a debit to cash on hand and a credit to a customer's checking account. Your bank account is an asset to you, but a liability to your bank. That makes for a third issue, namely perspective.",
"title": ""
},
{
"docid": "977c491090bccd98c5020fd2ef786445",
"text": "If you can live with managing the individual category amounts yourself, this is trivial. Just set up a spreadsheet listing each category (and a column for the total amount of money in the account), adding or subtracting as you deposit or withdraw money to the account. To the bank it will be just one (physical) account, but to you, it can be any number of (accounting asset) accounts. You can choose to keep a history, or not. It's all up to how complex you want to make it. It doesn't even have to be a spreadsheet - you can just as well do this on paper if you prefer that. But the computer makes it easier. I imagine most personal finance software will help you, too; I know GnuCash can be coaxed into doing this with only a bit of creativity, and it almost certainly isn't the only one. I do this myself and it works very well. I don't know but imagine that companies do it all the time: there is no reason why there must be a one-to-one relationship between bank accounts and accounting asset accounts, and in fact, doing so would probably quickly become impractical.",
"title": ""
},
{
"docid": "1757b028d75e69e0e93402a12b746d1b",
"text": "One way you can accomplish this is on a cruise ship. Most cruise ships have casinos, and most will allow you to sign out chips at the casino cage. You can then exchange the chips for cash. The chips that were signed for are resolved as room charges. Those room charges can be charged to a CC. Those signed for chips are rolled into the total room charges and are thus not treated as a cash advance. The cost of the cruise not with standing, you could earn money in that form. Step off the boat, deposit cash in the bank, and send a check to the CC company. All that being said, it is an cheap and safe way to get cash while you are traveling in that method.",
"title": ""
},
{
"docid": "a146caa7bf18a4dd8ca61d8e4b35c5ef",
"text": "There are four sides to this transaction. You increase in money: A debit. (increases your Current Assets, if you will) You also gain the requirement to pay that money in the future. A credit: Definitely a Liability. When you repay the money, your cash will decrease: a credit, and your liabilities will also decrease, which is a debit (since you don't have to repay the money anymore). the account would be short-term loans, the money doesn't have a name, it's just cash and would go into whatever cash accounts you have. The bookkeeping entry would be the same as you would make for any short-term loan.",
"title": ""
},
{
"docid": "16c971d462a23ed54ab3fe14c517f1e1",
"text": "It's so wonderful. Through the magic of fractional reserve banking, a bank the vast majority of the time is loaning out money they created from thin air. And if you don't pay the obligation, they get a yacht, personal jet, or racehorse in return! Now, of course having to repossess something might be undesirable in an accounting context, but it still beggars belief that basically the entire economy and money supply of the developed world is based on obligations backed by nothing, by private parties, created out of thin air.",
"title": ""
},
{
"docid": "bcd38157a511bc50fe008087a8d2c7d3",
"text": "\"According to this discussion, there was a Tax Court ruling that likened deductibility for charitable giving by credit card to business expenses incurred by businesses operating under cash-basis accounting. (The point is made by Larry Hess on that site.) Short answer: According to this argument, you can claim the deduction when the charge is incurred. You don't have to wait until you pay it back. (Again this is for cash basis.) Publication 538 states that \"\"under the cash method of accounting, you generally deduct business expenses in the tax year you pay them.\"\" I think the ruling above was meant to clarify when the expense is \"\"paid\"\". In my totally unofficial opinion, I suppose this makes sense. If I go to Office Depot to buy a box of envelopes, I walk out with the envelopes at the same time regardless of whether I paid cash or swiped a credit card. I wouldn't walk out thinking: \"\"HA! I haven't actually paid for these yet.\"\" If the shoplifting alarm went off at the door and I was asked if I had bought those, I'd say yes, right? If this doesn't convince you, you can always get professional tax advice.\"",
"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": "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": "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": "60e096d50149b10d70b6d360eeb8e2f8",
"text": "This is in the balance sheet, but the info is not usually that detailed. It is safe to assume that at least some portion of the cash/cash equivalents will be in liquid bonds. You may find more specific details in the company SEC filings (annual reports etc).",
"title": ""
},
{
"docid": "b987480a00109e250c5865bd585c4a7f",
"text": "\"If you are considering this to be an entry for your business this is how you would handle it.... You said you were making a balance sheet for monthly expenses. So on the Balance Sheet, you would be debiting cash. For the Income Statement side you would be crediting Owner's Equity to balance the equation: Assets = Liabilities + Owner's Equity So if you deposited $100 to your account the equation would be affected thus: $ 100 in Assets (Debit to Cash Account) = 0 Liabilities - $100 (Credit to Owner's Equity) It is correctly stated above from the bank's perspective that they would be \"\"Crediting\"\" you account with $100, and any outflow from the bank account would be debiting your account.\"",
"title": ""
},
{
"docid": "2cd90409b08fcc132c07d7a7e6bf9286",
"text": "Bartering is a tricky discussion. Yes, it definitely applies when you are self-employed and do a job that you would charge anyone else for, but what if you are helping a friend in your spare time? If you receive something in exchange, the value of the item you received would be your income, but what if you don't receive anything in exchange? If the company bought a computer that they loan to you to do occasional work for them, there's no reason you couldn't take the computer home and have that company retain ownership of the property. They could still expense the depreciation of the computer without giving it to you. If it were a car though, you would have to count mileage for personal use as income. What if you exchange occasional tech support for the use of an empty desk and Internet connection? As long as they aren't renting desks for money to others, there's probably no additional marginal cost to them if they allow you to use the space, so the fair market value question breaks down.",
"title": ""
},
{
"docid": "fd5a609ff0af22f0dfe21f960324295d",
"text": "\"It seems like this was a \"\"stock for stock\"\" transaction. That is, your company was acquired, not for cash, but for the stock of Company X in a deal that your company's board of directors \"\"signed off\"\" on. Your company no longer exists, and that's why your stock was cancelled. The acquirer will be sending you an equivalent amount of stock in their Company, X. You don't need to worry about taxes, only accounting, because this is a \"\"non-cash\"\" transaction. What this means that your cost basis in the stock of Company X will be what you paid for the original company's stock (not its value on the day of the merger, which may be higher or lower than what you paid).\"",
"title": ""
},
{
"docid": "bf0540111a2051185227f72005547c32",
"text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"",
"title": ""
},
{
"docid": "6da3ec1ab9296aa05074dbbc608a1c5c",
"text": "\"Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for \"\"stock on hand\"\". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or \"\"equity\"\"), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset \"\"Stock on hand\"\" by $500. Debit (increase) Asset \"\"Accounts receivable\"\" by $700. Credit (increase) Income \"\"Sales\"\" by $700. Debit (increase) Expense \"\"Cost of goods sold\"\" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset \"\"checking account\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. If he paid with a credit card: Credit (increase) Liability \"\"credit card\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. When he pays off the credit card: Debit (decrease) Liability \"\"credit card\"\" by $1000. Credit (decrease) Asset \"\"cash\"\" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset \"\"cash\"\". Credit (decrease) Capital \"\"shareholder equity\"\". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it \"\"capital\"\", others call it \"\"equity\"\"): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big \"\"one thing\"\". 2: Every transaction must update two or more accounts. Each update is either a \"\"debit\"\" or a \"\"credit\"\". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there.\"",
"title": ""
}
] |
fiqa
|
44d497047792dbc1e14fac6511176b06
|
What is a trade exchange and are they reputable or not?
|
[
{
"docid": "40360b49e289a7118e858513501b2fb8",
"text": "I think this is off topic, but here is a stab: So these are cashless. It could be a way to smooth out the harsh reality of capitalism (I overproduced my product, I have more capacity than I can sell) and I can trade those good to other capitalists who similarly poorly planned production or capacity. Therefore the market for a system like is limited to businesses that do not plan well. Business that plan production or capacity to levels they can already sell for cash do not need a private system to offload goods. Alternatives to such a system include: (I don't know how many businesses are really in this over production / over capacity state. If my assumption that it isn't many is wrong, my answer is garbage.) This is a bartering system with a brokerage. I think we have historically found that common currencies create more trade and economic activity because the value of the note in your pocket, which is the same type of note in my pocket, is common and understood. Exchange rates typically slow down trade. (There are many other reasons to have different currency or notes on a global sale, but the exchange certainly is a hurdle to clear.) This brokerage is essentially adding a new currency (in a grand metaphor). And that new currency is only spendable on their brokerage, which is of limited use to society as a whole, assuming that society as a whole isn't a participating member of that brokerage. I can't really think of why this type of exchange is better than the current system we have now. I wouldn't invest in this as a business, or invest in this as a person looking for opportunity.",
"title": ""
}
] |
[
{
"docid": "0c2c9c130645d49832b4a83c7a1b772d",
"text": "I don't know if vanilla beans are traded on any organized exchange, and if they are, it's probably extremely obscure and very hard to access without having both of a lot of money and in-country connections. Edit: no, they're not. So there is no real way to short them. https://www.ft.com/content/e0e2fc16-28db-11e7-bc4b-5528796fe35c?mhq5j=e2",
"title": ""
},
{
"docid": "1bc83aba8d1e3c106be922149a80c466",
"text": "This guy is literally proposing a bucket shop. Trades against customers and copy their trades. No centralized clearing (it's not executing trades at all). And he thinks these are good things that customers should get him for. Scam. And a very old one at that.",
"title": ""
},
{
"docid": "a1f971e5df4506e6bc1077d7753c9161",
"text": "\"No, I'm sorry, but the fact that exchanges allow \"\"pay to play\"\" privelege to scalp orders is fairly well established at this time. It's skirts law simply because the exchanges don't profit *directly* from it. I understand that folks are upset that SEC is looking into turning off this free money faucet, but harranguing Katsayuma for opening a fair exchange that shuns the practice is a point of contention for me.\"",
"title": ""
},
{
"docid": "ce47a05f533def8a477949d494e2707e",
"text": "Have you looked at OptionsHouse? They charge $2.95 per trade and are one of the lowest when it comes to fees. Bare bones interface, but fast execution.",
"title": ""
},
{
"docid": "728e392d990ee0646c3ba5fc4c399afe",
"text": "\"You might consider learning how the \"\"matching\"\" or \"\"pairing\"\" system in the market operates. The actual exchange only happens when both a buyer and a seller overlap their respect quotes. Sometimes orders \"\"go to market\"\" for a particular volume. Eg get me 10,000 Microsoft shares now. which means that the price starts at the current lowest seller, and works up the price list until the volume is met. Like all market it trades, it has it's advantages, and it's dangers. If you are confident Microsoft is going to bull, you want those shares now, confident you'll recoup the cost. Where if you put in a priced order, you might get only none or some shares. Same as when you sell. If you see the price (which is the price of the last completed \"\"successful\"\" trade. and think \"\"I'm going to sell 1000 shares\"\". then you give the order to the market (or broker), and then the same as what happened as before. the highest bidder gets as much as they asked for, if there's still shares left over, they go to the next bidder, and so on down the price... and the last completed \"\"successful\"\" trade is when your last sale is made at the lowest price of your batch. If you're selling, and selling 100,000 shares. And the highest bidder wants 1,000,000 shares you'll only see the price drop to that guys bid. Why will it drop (off the quoted price?). Because the quoted price is the LAST sale, clearly if there's someone still with an open bid on the market...then either he wants more shares than were available (the price stays same), or his bid wasn't as high as the last bid (so when you sale goes through, it will be at the price he's offering). Which is why being able to see the price queues is important on large traders. It is also why it can be important put stops and limits on your trades, een through you can still get gapped if you're unlucky. However putting prices (\"\"Open Orders\"\" vs \"\"(at)Market Orders\"\") can mean that you're sitting there waiting for a bounce/spike while the action is all going on without you). safer but not as much gain (maybe ;) ) that's the excitement of the market, for every option there's advantages...and risks... (eg missing out) There are also issues with stock movement, shadowing, and stop hunting, which can influence the price. But the stuff in the long paragraphs is the technical reasons.\"",
"title": ""
},
{
"docid": "aa201189bdfec5bd9d4e1380f29f863d",
"text": "Most investors vote with their wallets. I expect ZERO glitches from a trading platform. If someone was actually causing trades to fail maliciously, their reputation would immediately suffer and their business would dry up over night. You can't just play dumb and not respond to a button click. I can watch and replay the traffic I'm sending out to their server and see if they are responding to verify this. If their system goes down and has no redundancy, that is their fault and opens them to lawsuits. No trading platform could withstand scrutiny from its users if it was dishonest in the scenario you imagine.",
"title": ""
},
{
"docid": "746fadc47e6606d3a1730a15c59391f2",
"text": "I just finished a high frequency trading project. Individuals can do it, but you need a lot of capital. You can get a managed server in Times Square for $1500/month, giving you access to 90% of the US exchanges that matter, their data farms are within 3 milliseconds of distance (latency). You can also get more servers in the same building as the exchanges, if you know where to look ;) thats all I can divulge good luck",
"title": ""
},
{
"docid": "b20c6a5a5c7ade576e954c164b0a7253",
"text": "How easy is it to take out your money? To they offer any trading? Do you have to put more money up on your own to trade with? This seems pretty sketchy. I am currently working at a prop trading firm and although some sketchy firms require you to make a deposit, most legit ones do not. Not to mention their commissions are incredibly high (I interviewed at another sketchy firm but only charges a couple cents for commission). >most of the time you get rebates on them If it is not explicitly stated in the contract of how they decide your rebates than don't expect much. Most of the trading industry is build around taking advantage of people where people's word soon becomes meaningless unless it is in writing.",
"title": ""
},
{
"docid": "41734e5f71ad45eb45327676b3ef67da",
"text": "\"The success rate is terrible. At the same time, what are the success rate for any business endeavor? Isn't it something like 80% of startups fail in the first 5 years? That's not far off for the success of traders. Just like all the success cliches say, it comes down to how bad you want it. What will you sacrifice to be a successful trader? How much will you work to be a successful trader? Will you accept the pain and failure it takes to be a trader? Who cares if \"\"soandso\"\" can do it? If you want it, you should be saying, \"\"I will do it because I say so\"\". Only you know if you're willing to take the risk. At the same time, you're a college student, what's the worst that will happen if it doesn't work out? Check out /r/getmotivated...\"",
"title": ""
},
{
"docid": "3a5c671699b2c194916502a7a365a692",
"text": "\"I think you're right that these sites look so unprofessional that they aren't likely to be legitimate. However, even a very legitimate-looking site might be a fake designed to separate you from your money. There is an entire underground industry devoted to this kind of fakery and some of them are adept at what they do. So how can you tell? One place that you can consult is FINRA's BrokerCheck online service. This might be the first of many checks you should undertake. Who is FINRA, you might ask? \"\"The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States.\"\" See here. My unprofessional guess is, even if a firm's line of business is to broker deals in private company shares, that if they're located in the U.S. or else dealing in U.S. securities then they'd still need to be registered with FINRA – note the \"\"all securities firms\"\" above. I was able to search BrokerCheck and find SecondMarket (the firm @duffbeer703 mentioned) listed as \"\"Active\"\" in the FINRA database. The entry also provides some information about the firm. For instance, SecondMarket appears to also be registered with the S.E.C.. You should also note that SecondMarket links back to these authorities (refer to the footer of their site): \"\"Member FINRA | MSRB | SIPC. Registered with the SEC as an alternative trading system for trading in private company shares. SEC 606 Info [...]\"\" Any legitimate broker would want you to look them up with the authorities if you're unsure about their legitimacy. However, to undertake any such kind of deal, I'd still suggest more due diligence. An accredited investor with serious money to invest ought to, if they are not already experts themselves on these things, hire a professional who is expert to provide counsel, help navigate the system, and avoid the frauds.\"",
"title": ""
},
{
"docid": "f98342a46aadd4f3c7192e8b9415206c",
"text": "For starters, that site shows the first 5 levels on each side of the book, which is actually quite a bit of information. When traders say the top of the book, they mean just the first level. So you're already getting 8 extra levels. If you want all the details, you must subscribe to the exchange's data feeds (this costs thousands of dollars per month) or open an account with a broker who offers that information. More important than depth, however, is update frequency. The BATS site appears to update every 5 seconds, which is nowhere near frequently enough to see what's truly going on in the book. Depending on your use case, 2 levels on each side of the book updated every millisecond might be far more valuable than 20 levels on each side updated every second.",
"title": ""
},
{
"docid": "d410df70f15fa6b3c0b7476264502873",
"text": "Yeah, it can be a scam. Lots of unscrupulous companies try to generate commissions by encouraging frequent trading - I can't recall the term they use right now, but I don't like to use these people for advice. My bank has 100 free trades per year for each account, which is more than enough for me to never pay a commission.",
"title": ""
},
{
"docid": "1cf001967728581cbc9cf897c10f6944",
"text": "\"I've never used them myself, but Scottrade might be something for you to look at. They do $7 internet trades, but also offer $27 broker assisted trades (that's for stocks, in both cases). Plus, they have brick-and-morter storefronts all over the US for that extra \"\"I gotta have a human touch\"\". :-) Also, they do have after hours trading, for the same commission as regular trading.\"",
"title": ""
},
{
"docid": "b047dc87c3ad4c48201382f49eba180a",
"text": "Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools.",
"title": ""
},
{
"docid": "b8bc5ac6fc7eafb3ec03c29d82e651ec",
"text": "\"The London Stock Exchange offers a wealth of exchange traded products whose variety matches those offered in the US. Here is a link to a list of exchange traded products listed on the LSE. The link will take you to the list of Vanguard offerings. To view those offered by other managers, click on the letter choices at the top of the page. For example, to view the iShares offerings, click on \"\"I\"\". In the case of Vanguard, the LSE listed S&P500 ETF is traded under the code VUSA. Similarly, the Vanguard All World ETF trades under the code VWRL. You will need to be patient viewing iShares offerings since there are over ten pages of them, and their description is given by the abbreviation \"\"ISH name\"\". Almost all of these funds are traded in GBP. Some offer both currency hedged and currency unhedged versions. Obviously, with the unhedged version you are taking on additional currency risk, so if you wish to avoid currency risk then choose a currency hedged version. Vanguard does not appear to offer currency hedged products in London while iShares does. Here is a list of iShares currency hedged products. As you can see, the S&P500 currency hedged trades under the code IGUS while the unhedged version trades under the code IUSA. The effects of BREXIT on UK markets and currency are a matter of opinion and difficult to quantify currently. The doom and gloom warnings of some do not appear to have materialised, however the potential for near-term volatility remains so longs as the exit agreement is not formalised. In the long-term, I personally believe that BREXIT will, on balance, be a positive for the UK, but that is just my opinion.\"",
"title": ""
}
] |
fiqa
|
1ae93ea5a0faf70577f9cbda14991afa
|
American living abroad and not working for an American company - tax reporting and bank accounts
|
[
{
"docid": "cc041b18ffe6b806ba4fbcb0c963b9b0",
"text": "\"The IRS taxes worldwide income of its citizens and green card holders. Generally, for those Americans genuinely living/working overseas the IRS takes the somewhat reasonable position of being in \"\"2nd place\"\" tax-wise. That is, you are expected to pay taxes in the country you are living in, and these taxes can reduce the tax you would have owed in the USA. Unfortunately, all of this has to be documented and tax returns are still required every year. Your European friends may find this quite surprising as I've heard, for instance, that France will not tax you if you go live and work in Germany. A foreign company operating in a foreign country under foreign law is not typically required to give you a W-2, 1099, or any of the forms you are used to. Indeed, you should be paying taxes in the place where you live and work, which is probably somewhat different than the USA. Keep all these records as they may be useful for your USA taxes as well. You are required to total up what you were paid in Euros and convert them to US$. This will go on the income section of a 1040. You should be paying taxes in the EU country where you live. You can also total those up and convert to US$. This may be useful for a foreign tax credit. If you are living in the EU long term, like over 330 days/year or you have your home and family there, then you might qualify for a very large exemption from your income for US tax purposes, called the Foreign Earned Income Exclusion. This is explained in IRS Publication 54. The purpose of this is primarily to avoid double taxation. FBAR is a serious thing. In past years, the FBAR form went to a Financial Crimes unit in Detroit, not the regular IRS address. Also, getting an extension to file taxes does not extend the deadline for the FBAR. Some rich people have paid multi-million dollar fines over FBAR and not paying taxes on foreign accounts. I've heard you can get a $10,000 FBAR penalty for inadvertent, non-willful violations so be sure to send those in and it goes up from there to $250k or half the value of the account, whichever is more. You also need to know about whether you need to do FATCA reporting with your 1040. There are indeed, a lot of obnoxious things you need to know about that came into existence over the years and are still on the law books -- because of the perpetual 'arms race' between the government and would be cheaters, non-payers and their advisors. http://www.irs.gov/publications/p54/ http://americansabroad.org/\"",
"title": ""
},
{
"docid": "1a03d16b327d83f757ce1680c3a11d3f",
"text": "\"I'll add a bit to Paul's excellent write up. Foreign Earned Income Exclusion (form 2555): notice the earned there. It doesn't exclude capital gains, interest, dividends, and basically everything that is not salary. You pay US taxes on it from the first cent. Foreign tax credit - foreign tax credit (form 1116) doesn't reduce your US tax dollar for dollar (even though it may appear that it does from the generic explanations). By using this form you may end up accumulating unused credit while still paying double taxes at the same time. Happened to me. Thank Congress for the logical and reasonable US tax laws. New FATCA form 8938: as opposed to FBAR (that goes to the FinCEN in the Treasury), this one goes to the IRS. it contains very similar info, but the threshold requirements are different. You may have to file FBAR, but not these, or you may have to file both. Being an American citizen, some European banks will refuse to provide services to you. Again, thank Congress for FATCA. It requires foreign banks to enforce US tax regulations on US citizens, and banks that won't will get penalized in the US. Many banks refuse to provide services to Americans because of that because what IRS requires is illegal in most countries. Some countries (like UK and some other EU countries) have signed treaties with the US to resolve this, but many haven't. Currency conversion - as I commented to Paul, you convert the amounts when you receive them, which may have your fixed EUR salary be converted to different dollar amounts every time. You need to make sure you do it right. Pensions, savings, investments - if you're doing these in non-US instruments prepare to be penalized. US taxes foreign investments much more aggressively than domestic. If you're investing in indexes/mutual funds, or you're a principle in a corporation, or you create a pension account - you'll get hit by additional reporting requirements and tax. Tax treaties - the US has tax treaties with many EU countries, and equalization treaties with some. The tax treaties affect the standard tax treatment by the US and some of the \"\"generic\"\" info you got here may not apply because of a tax treaty, and some other rules may apply. Equalization treaties work similarly with regards to the Social Security. Bottom line, and I know Paul disagrees with me on this - talk with a US-licensed adviser in the country you're going to. It is very important for your tax adviser to know the relevant treaty (and not read it the first time when you call him), and to understand each and every financial instrument in your country. Missing piece of paper in your tax return can cost you thousands of dollars in penalties (not exaggerating, not filing form 3520 triggers a $10000 penalty, even if there's no tax) and additional taxes.\"",
"title": ""
}
] |
[
{
"docid": "94c39b345a0eb3878d903cb081e28da2",
"text": "Are you planning to not pay taxes? Any time someone has income in the U.S., it is subject to U.S. taxes. You must file tax returns (and pay taxes if necessary) if you have income above a certain threshold, regardless of whether you're not authorized to work or not. If you plan to intentionally not pay taxes, then that's a whole other matter from working without authorization. Working without authorization is an immigration issue. It probably violates the conditions of your status, which will make you to automatically lose your status. That may or may not affect when you want to want to visit, immigrate to, or get other immigration benefits in the U.S. in the future; and at worst you may be deported. It's a complicated topic, but not really relevant for this site.",
"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": "35c5605589b6b4dbdea21675a10af603",
"text": "There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.",
"title": ""
},
{
"docid": "b28cb9a3b4e58993ea23f5b610229cd3",
"text": "You're asking three different questions... Q1: What's to stop people not reporting income earned in this manner? A: Nothing. Absolutely nothing. The IRS doesn't have the means to keep track of your cash flow and your reported taxes on the fly. Q2: How could the IRS possibly keep track of that? A: When you get audited. If it ever did come up that things didn't balance you would end up owing back taxes, with interest and possibly fines. Q3: Moral obligations aside... why report? A: Since you've dismissed 'doing your duty as a citizen' as a moral obligation, the only other real one is that it's a pain in the butt to get audited and it is expensive if you lie and get caught.",
"title": ""
},
{
"docid": "20453d9084fa515d30f1251b55b7f57e",
"text": "it just depends on your situation and sometimes accounting can't fix that. by mentor pays 35% even though he only goes back to the USA to visit. I go back less than 30 days a year so I can claim I'm a foreign resident but if all my income is in the USA I'm screwed. I can't even route my income through my wife who has never stepped foot in the USA because we must claim whatever she makes. US tax laws are so bad that it takes a lot just to get an account with HSBC in Hong Kong",
"title": ""
},
{
"docid": "3952f02414674a677415876312af53fe",
"text": "First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws.",
"title": ""
},
{
"docid": "fdca9791c5848e431531ab00a32076f7",
"text": "Generally speaking, if you have significant revenue outside the US, then you're better off incorporating out of the US. The US has significantly higher corporate tax rates, and taxes on worldwide income not just revenue in the US. Setting up in an offshore country would have no corporate tax but would cost about $1000 a year in fees. For any non-US company, your US partner would need to file a 5471 form with his US personal tax which reports the company's finances. That costs about $1000 a year for an accountant to prepare. So you still need accounting on the company, even if you are not paying corporate tax. Setting up the company is reasonably easy, you just use a broker. The bank account may be more difficult but they can help with that too. You may find that your optimal personal tax strategy and your US partner's strategy are different. For example, if your partner is living overseas, then they are not taxed on salary in the US, but are taxed on dividends. So they would prefer to take any money out of the company as salary, resulting in no corporate profits. You, on the other hand, might prefer dividends.",
"title": ""
},
{
"docid": "5a285a126c4ec7591bb3e03afcd6adc6",
"text": "I agree with Joe, having the money deposited to the US bank account may land you in trouble. Technically, a US business paying a foreigner must withhold 30% of the payment, unless a tax treaty says otherwise. The US business should do that based on your W8-BEN/W8-ECI form that you should have given to the business before being paid. I'm guessing, that by paying to your US bank account, you (and your American counterpart) are trying to avoid this withholding. That may cause trouble for both of you. I would suggest you talking to a professional (EA/CPA licensed in the State where the business is located) and having the situation resolved ASAP. You may not be liable for the US taxes at all, but because of incorrectly reporting the income/expense - you and the US business may end up paying way more than the $0 you otherwise would have, in penalties.",
"title": ""
},
{
"docid": "05e8c53b517407752eec922e013273d9",
"text": "The US requires its (tax) residents to report foreign accounts if the balances (on all the accounts together) are $10K or more at any given day during the year. This is done through the FBAR system. In addition, you obviously need to report this income on your US tax return and pay taxes. If the balances on your foreign accounts exceed specific threshold, your tax return should also include form 8938. If you report everything and pay the taxes due - you can keep the money wherever you want and transfer it between your accounts as you may see fit. If you don't - the US government may come after you with huge penalties, and the Dubai bank may freeze your account. Its easy to become US tax resident. Stay in the US for more than half a year in a row - and here you are. Subject to the US taxation. Even if you're not a US citizen or green card holder, or at all illegal. Some immigration statuses may grant you an exemption, but none that allows you working for your Dubai employer, so I'm assuming you're a US tax resident.",
"title": ""
},
{
"docid": "2948cd0e63af02de801485656a7996bc",
"text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, **you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.** Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"",
"title": ""
},
{
"docid": "fca1cb8601eadb6feb1e8883e0dfa401",
"text": "It makes no difference (to the UK) what country a bank account is in. What matters is whether you are resident in the UK or not while employed locally in a foreign country. You're taxed on where you are tax resident (which could be either country, both, or neither), not where the money is earned or banked. You can assume, with modern exchange of information agreements, that all money you put in bank accounts anywhere in the world will eventually be known to the UK authorities. The rules for when you are a UK tax resident changed recently, there is now a statutory test for residence (pdf). The rules are complex, but in general if you are outside the UK for less than one full tax year you're still resident, and in many cases where you're gone longer than that you may still be, depending on the length of your trips back to the UK and the ties you have there. So a 6-month winter job in Thailand teaching English as a foreign language will be subject to UK tax if you come back after, even if you leave all the money there or in a third country. If you pay local tax as well there are agreements between countries to avoid double taxation, but these do vary. What you do about National Insurance payments while gone for a short time is another complex area.",
"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": ""
},
{
"docid": "3d0c97675c2f6fdd54208ed1b33c5fdf",
"text": "Banks do not report transactions within accounts except as required by law, usually as part of anti-money-laundering efforts. Generally those involve tracking large cash transactions. As far as large payments go, there are two reasons they might be reported to the government: taxes, and criminal investigations. For tax purposes, if the payment is considered a salary or wage (that is, you are an employee of the company and the payment is for your time working there), then the company paying you is responsible for reporting the wage and withholding applicable taxes from your salary. If you are considered an independent contract employee, then you yourself will be responsible for reporting the income to the IRS and paying the applicable taxes yourself. In the second case, unless you are already under investigation, I wouldn't worry about it. Banks are very touchy about financial records being kept private, and won't release them without a subpoena. One caveat is that this is under US law. Banks which maintain branches in multiple countries must, of course, comply with all local laws in the jurisdiction where they do business. The take away from this is that Bank of America is unlikely to report a single deposit of $75,000 into your account to anyone on their own. If it is a paper check being deposited they will probably place a hold on it to make sure it clears, but that is all.",
"title": ""
},
{
"docid": "11940f67a7adc7d7446a2b9884f2bcc6",
"text": "My concern is if I need to report and pay extra taxes for the part of the company that will be under my name Yes, d'uh. Of course. It's actually quite complicated when it comes to foreign companies owned by US people, and you'll need a good tax adviser (EA/CPA licensed in your State) who's fluent in that area. Citizenship has nothing to do with this, from tax perspective there's no difference between a green card holder and a citizen (except that green card holder cannot claim non-resident exemptions and certain tax treaties' exemptions).",
"title": ""
},
{
"docid": "6930ffd3459df51d2e594465b3b8a9f1",
"text": "There's nothing wrong with your reasoning except that you expect the tax laws to make perfect sense. More often than not they don't. I suggest getting in touch with a professional tax preparer (preferably with a CPA or EA designation), who will be able to understand the issue, including the relevant portions of the French-US tax treaty, and explain it to you. You will probably also need to do some reporting in France, so get a professional advice from a French tax professional as well. So, in my tax return, can I say that I had no US revenue at all during this whole year? I doubt it.",
"title": ""
}
] |
fiqa
|
2d0f9919e5cc38c8e9f9f6e8f234d9cc
|
Paid credit card bill, but money didn't leave my checking account [duplicate]
|
[
{
"docid": "460dca0b3e5b5f08a08830116926fea6",
"text": "The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank.",
"title": ""
},
{
"docid": "fc4458560c98f0bde72d8260c85fd17d",
"text": "You probably don't need to call the bank. Today is Sunday, so three days ago was probably Friday (or Thursday depending on how you count the days). Banks normally don't post transactions on weekends - and transactions that do happen on the weekend sometimes don't get posted until Tuesday. I would give it till Tuesday and then call them if you still don't see it show up on your account.",
"title": ""
},
{
"docid": "e035cf8095b7f043254c4e5ead6f0785",
"text": "This is normal for credit cards. As long as you make the credit card company's cutoff time, they will make the funds available on your credit card rather than make you wait for them to actually get the funds from your bank. The amount of time this takes actually can vary significantly from bank to bank. You do want to make sure funds are available in your bank account for them to withdraw when they do take them though. If not, the payment would get returned and can set red flags on your credit card account that take a while to drop off.",
"title": ""
}
] |
[
{
"docid": "fd38139ef1ff50c0c080ab457dd92245",
"text": "How about finding a friend with Paypal and sending them the money so they can pay your bill using a card? Withdrawals from Paypal are typically instant now.",
"title": ""
},
{
"docid": "6a45bf0e2322aebf82b61762e7d69c82",
"text": "\"As with many questions here, while littleadv is correct, the real answer is \"\"each bank may handle this differently.\"\" In my case, I was experimenting with my balance to see the impact of utilization, and I overpaid the current bill before the bill was issued. The prior balance was paid, but then I sent a payment to bring my account to a credit balance. Further down the statement appears the line - Your account has a credit balance. We can hold and apply this balance against future purchases and cash advances, or refund it. If you would like a check mailed to you in the amount of the credit balance, simply call us and speak to a representative. You can also see that the \"\"revolving credit available\"\" is above the line of credit, implying that someone with a $5000 credit line wanting to charge a $6000 engagement ring can send a higher payment to the account and then make that charge.\"",
"title": ""
},
{
"docid": "44309cd550236d0b4bb90aa00c1efe11",
"text": "I use online banking and bill pay for all accounts where I can control when and how much is paid, where I push the funds out. The bills from those companies that want to be allowed to reach into my account and pull money automatically (e.g. my Chase mortgage) I simply will not enroll - they get a paper check in the mail. There is no way I am giving these cocksucker criminals *permission* to take money out of my accounts.",
"title": ""
},
{
"docid": "ccc83c20986bc4ce66ffc6f1c1bd529f",
"text": "Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed. None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill). For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash. I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem.",
"title": ""
},
{
"docid": "a0262e62400a430bc8aa3b783e8b4e84",
"text": "Maybe his accountant not taking care of things meant that there was a miscommunication about his debts. He could've had outstanding loans, back taxes, etc and he didn't have a clear enough picture about what his cash balance would be after his transaction.",
"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": "5ffeb4e741fb823d17a81aa85e8c2ea3",
"text": "Once, back when I had a bank account, I tried to pay a large emergency dental bill with my debit card. It rejected it as it turned out the bill was less than a dollar over what I had in the account. I thought there was enough money so I tried again, 3 times. They charged me an overdraft for each attempt even though the debit never went through. This was without overdraft protection, as overdraft protection would have allowed the debit and charged me one overdraft. I don't know the details but federal regulations have changed how they do this. To me overdraft protection rejects any debit that attempts to overdraft my account and doesn't charge me with an overdraft that didn't actually occur as a result of the charge being rejected, but that's not how it works.",
"title": ""
},
{
"docid": "5fa31bc1e67933188329a7f3d31e7b99",
"text": "Most bank accounts offer automatic bill pay as well. They don't rely on support from the bill you're paying, I think they basically just mail a check with your account number on it",
"title": ""
},
{
"docid": "f7a396f4f01017517d2af9035b684198",
"text": "Using the bank's bill pay always seemed like a hassle to me. There are lots of mistakes to be made by me that can result in late payments and not too many benefits other than some convenience, and being able to pay bills online for accounts that require paper payment. (Although the banking systems often screw up those payments) Plus, there is usually a fee associated with bill pay, at least to some extent. I generally use the websites of my credit cards or other entities to pay bills. Then again, maybe I'm a bit of a weirdo here... I don't see mailing a check 3 days ahead of the due date as a particular hassle.",
"title": ""
},
{
"docid": "3324341128f77a61d22d572bfaca98f0",
"text": "Is this the time of year this board attracts question regarding the law and how to skirt it? I've done as you suggested. I happened to have a month that I was going to blow through the $12000 limit I had on my credit card. So as the balance crossed $8000, I paid that amount, and when the bill was cut, it was just $4000 or so. Scrutiny would show the reason for partial payments was obvious, I wanted to avoid going over limit. I wouldn't have done so just to avoid the $10,000 transaction. Since then, I've asked that the limit be raised in case I have another wild month.",
"title": ""
},
{
"docid": "794789e2f0d5bff964cb0e03e8c4bdd6",
"text": "Things are generally fine. A credit balance is not a horrible thing. The argument against maintaining a credit balance is that you are essentially loaning the credit card issuer money at 0% interest. You probably have alternative investments that would pay better interest, so it's usually better to park your money there. All that said, it's unlikely that the interest on whatever balance you have is enough to be more than pennies. The way that a credit card works, you run up a balance in one period. Then there is a grace period. If you don't pay off the balance during the grace period, they start charging you interest. You also may have a minimum payment to make. If you don't make that payment, they'll charge you a late fee. The typical period to rack up charges is from the first to the last day of a month. The typical grace period is through the 20th or 25th of the next month. Your card may be different. So check the documentation (user agreement) for your card if you want the real data. It sounds like you paid off some purchases while you were still in the period where you rack up charges. While those purchases were posted to the account, they may not be counted in the balance calculation. If your credit balance exactly matches the payment you made, that's probably what happened. It's also possible that you overpaid the balance. If your credit balance is just a small amount, that's probably what happened. If you really want to be sure, you should call the credit card issuer and ask them. At best we can tell you how it normally works. Since this is your first month, you could just wait for your first bill and respond to that. So long as you pay off the entire balance shown there by the deadline, everything should be fine. Don't wait until the last day to pay. It's usually best to pay a week or so early so as to leave time for the mail to deliver the check and for them to process it. You can wait longer for an online payment, but a few business days early to give you a chance to handle potential problems is still good.",
"title": ""
},
{
"docid": "c8f7a3ce6a223974c1913148af62ded8",
"text": "\"To avoid nitpicks, i state up front that this answer is applicable to the US; Europeans, Asians, Canadians, etc may well have quite different systems and rules. You have nothing to worry about if you pay off your credit-card statement in full on the day it is due in timely fashion. On the other hand, if you routinely carry a balance from month to month or have taken out cash advances, then making whatever payment you want to make that month ASAP will save you more in finance charges than you could ever earn on the money in your savings account. But, if you pay off each month's balance in full, then read the fine print about when the payment is due very carefully: it might say that payments received before 5 pm will be posted the same day, or it might say before 3 pm, or before 7 pm EST, or noon PST, etc etc etc. As JoeTaxpayer says, if you can pay on-line with a guaranteed day for the transaction (and you do it before any deadline imposed by the credit-card company), you are fine. My bank allows me to write \"\"electronic\"\" checks on its website, but a paper check is mailed to the credit-card company. The bank claims that if I specify the due date, they will mail the check enough in advance that the credit-card company will get it by the due date, but do you really trust the USPS to deliver your check by noon, or whatever? Besides the bank will put a hold on that money the day that check is cut. (I haven't bothered to check if the money being held still earns interest or not). In any case, the bank disclaims all responsibility for the after-effects (late payment fees, finance charges on all purchases, etc) if that paper check is not received on time and so your credit-card account goes to \"\"late payment\"\" status. Oh, and my bank also wants a monthly fee for its BillPay service (any number of such \"\"electronic\"\" checks allowed each month). The BillPay service does include payment electronically to local merchants and utilities that have accounts at the bank and have signed up to receive payments electronically. All my credit-card companies allow me to use their website to authorize them to collect the payment that I specify from my bank account(s). I can choose the day, the amount, and which of my bank accounts they will collect the money from, but I must do this every month. Very conveniently, they show a calendar for choosing the date with the due date marked prominently, and as mhoran_psprep's comment points out, the payment can be scheduled well in advance of the date that the payment will actually be made, that is, I don't need to worry about being without Internet access because of travel and thus being unable to login to the credit-card website to make the payment on the date it is due. I can also sign up for AutoPay which takes afixed amount/minimum payment due/payment in full (whatever I choose) on the date due, and this will happen month after month after month with no further action necessary on my part. With either choice, it is up to the card company to collect money from my account on the day specified, and if they mess up, they cannot charge late payment fees or finance charge on new purchases etc. Also, unlike my bank, there are no fees for this service. It is also worth noting that many people do not like the idea of the credit-card company withdrawing money from their bank account, and so this option is not to everyone's taste.\"",
"title": ""
},
{
"docid": "7d8c99e9bac67a591e86e04fbf077c19",
"text": "The answer is - the money got bounced back to their account :(",
"title": ""
},
{
"docid": "9c94d24ea670df4c1baf45394ac352fa",
"text": "some of that article is misleading, some of it is just plain wrong. Very wrong... like you end up drawing an incorrect conclusion type wrong. Corporate transaction accounts, whose balances are up recently due to TAG (expires 12/31), are subject to reserve requirements. When you purchase something with a credit card, the bank's asset of your credit increases and the bank's asset of cash decreases (it goes wherever you purchased). There is no change to your deposit account and no change to reserves. The incoming bank's cash account and liability account associated with that business transaction account increase, and it is trivial to transfer the % of cash necessary to reach minimum reserve requirements to the Fed. Secondly, anyone with a smidgen of accounting can tell that his balance sheet won't balance.",
"title": ""
},
{
"docid": "6ce8759db51b2ce834797cbbd3ed6464",
"text": "\"IMHO It is definitively not too early to start learning and thinking about personal finances and also about investing. If you like to try stock market games, make sure to use one that includes a realistic fee structure simulation as well - otherwise there'll be a very unpleasant awakening when switching to reality... I'd like to stress the need for low fees with the brokerage account! Sit down and calculate how much fees different brokers take for a \"\"portfolio\"\" of say, 1 ETF, 1 bond, 1 share of about $500 or $1000 each (e.g. order fee, annual fee, fee for paying out interest/dividend). In my experience, it is good if you can manage to make the first small investing steps before starting your career. Real jobs tend to need lots of time (particularly at the beginning), so time to learn investing is extremely scarce right at the time when you for the first time in your life earn money that could/should be invested. I'm talking of very slowly starting with a single purchase of say an ETF, a single bond next time you have saved up a suitable amount of toy money, then maybe a single share (and essentially not doing anything with them in order to avoid further fees). While such a \"\"portfolio\"\" is terrible with respect to diversification and relative fees*, this gives you the possibility to learn the procedures, to see how the fees cut in, what to do wrt taxes etc. This is why I speak about toy money and why I consider this money an investment in education. * An order fee of, say, $10 on a $500 position are terrible 4% (2 x $10) for buying + selling - depending on your local taxes, that would be several years of dividend yield for say some arbitrary Dow Jones ETF. Nevertheless, purchase + sale together are less than 3 cinema tickets.\"",
"title": ""
}
] |
fiqa
|
693132806ed90f1fca106051fd4e8d3b
|
Optimal way to use a credit card to build better credit?
|
[
{
"docid": "e691b6e7366ed7139f4b518953281dd1",
"text": "\"First I would like to say, do not pay credit card companies in an attempt to improve your credit rating. In my opinion it's not worth the cash and not fair for the consumer. There are many great resources online that give advice on how to improve your credit score. You can even simulate what would happen to your score if you did \"\"this\"\". Credit Karma - will give you your TransUnion credit score for free and offers a simulation calculator. If you only have one credit card, I would start off by applying for another simply because $700 is such a small limit and to pay a $30 annual fee seems outrageous. Try applying with the bank where you hold your savings or checking account they are more likely to approve your application since they have a working relationship with you. All in all I would not go out of my way and spend money I would not have spent otherwise just to increase my credit score, to me this practice is counter intuitive. You are allowed a free credit report from each bureau, once annually, you can get this from www.annualcreditreport.com, this won't include your credit score but it will let you see what banks see when they run your credit report. In addition you should check it over for any errors or possible identity theft. If there are errors you need to file a claim with the credit agency IMMEDIATELY. (edit from JoeT - with 3 agencies to choose from, you can alternate during the year to pull a different report every 4 months. A couple, every 2.) Here are some resources you can read up on: Improve your FICO Credit Score Top 5 Credit Misconceptions 9 fast fixes for your credit scores\"",
"title": ""
},
{
"docid": "a3fce490685e386e16b16c2e938b82cf",
"text": "Great question. First, my recommendation would be for you to get a card that does not have a yearly fee. There are many credit cards out there that provide cash back on your purchases or points to redeem for gift cards or other items. Be sure to cancel the credit card that you have now so you don't forget about that yearly fee. Canceling will have a temporary impact on your credit score if the credit card is your longest held line of credit. Second, it is recommended not to use more than 20% of all the available credit, staying above that line can affect your credit score. I think that is what you are hearing about running up large balances on your credit card. If you are worried about staying below the 20% line, you can always request a larger line of credit. Just keep paying it off each month though and you will be fine. You already have a history of credit if you have begun paying off your student loans.",
"title": ""
},
{
"docid": "65d9835f86fa210b70fdb53be783b9df",
"text": "\"I answered a similar question, How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?, in which I show a graph of how utilization impacts your score. In another answer to Should I keep a credit card open to maintain my credit score?, I discuss the makeup of your score. From your own view at Credit Karma, you can see that age of accounts will help your score, so now is the time to get the right cards and stay with them. My background is technology (electrical engineer) and MBA with a concentration in finance. I'm not a Psychology major. If one is undisciplined, credit can destroy them. If one is disciplined, and pays in full each month, credit is a tool. The quoting of billionaires is a bit disingenuous. I've seen people get turned away at hotels for lack of a credit card. $1000 in cash would not get them into a $200/night room. Yes, a debit card can be used, but the rental car and hotel \"\"reserve\"\" a large amount on the card, so if you don't have a high balance, you may be out of town and out of luck. I'll quote another oft-quoted guru: \"\"no one gets rich on credit card rewards.\"\" No, but I'm on track to pay for my 13 year old's last semester in college with the rewards from a card that goes right into her account. It will be great to make that withdrawal and not need to take the funds from anywhere else. The card has no fee, and I've not paid them a dime in interest. By the way, with 1-20% utilization ideal, you want your total available credit to be 5X the highest monthly balance you'd every hit. Last - when you have a choice between 2% cash reward, and the cash discount Kevin manages, take the discount, obviously.\"",
"title": ""
},
{
"docid": "3b64b7488d616ae026c37b3cf64919b2",
"text": "In addition to the already good answers: I am assuming you are playing a long game and have no specific need for a high credit score in the next couple of years. This list is just good practice that will raise you score.",
"title": ""
},
{
"docid": "3dfae77394018b4ded73741d3303cda0",
"text": "\"Or here's a better idea: don't have a credit card at all. They offer no real benefits and plenty of dangers. Don't take my word for it, though: \"\"I tell every student class I get, high school students, university students, you know, they'd be better off if they never used credit cards\"\" - Warren Buffet (Net worth: $44 billion) Before anyone says anything about using credit cards \"\"wisely\"\" and getting the rewards points, I can save 15% on many kinds of large purchases ($100+) using cash. You won't find a reward system offering that level of incentive. Two recent examples of cash discounts: After I bought my house I needed a lawnmower and a my wife wanted a new vacuum cleaner. Went to Lowe's and found the ones we wanted. They were $600 combined. Found the manager, stuck five $100 bills in his hand and said \"\"this is what I have, and that is what I need.\"\" 16.6% saved. Bought my daugher a bed recently. Queen box spring and mattress were on sale for $300 but it didn't come with the rails, which they wanted $50 extra for. Went to the bank and got $320 in cash from the bank, walked in, set it in his hand and said, \"\"I need the bed box spring and rails, tax included.\"\" He replied, \"\"Sorry man, I can't. I'm already taking a loss on...\"\" Then he stopped mid sentence, looked down at the cash again and said \"\"Hold on. Let me ask my manager.\"\" Manager walks over, guy explains what I said, manager looks at the cash and says \"\"Make it happen\"\" 14.3 % saved. As for purchasing a home, it is a myth that you need a credit score to obtain a mortgage for a home. Lending institutions can do manual underwriting instead of just relying on your credit score. It is a little tougher to do and banks usually have stricter requirements, but based on the information the OP has given in this and other questions, I think he can easily meet them.\"",
"title": ""
},
{
"docid": "360efed62e0be8d7fcb21739b691634e",
"text": "If you have self control and a good handle on your finances, which it sounds like - I suggest the following: Note: #3 is important - if you're not able to pay it off each month don't do this because it will cost you a lot in interest. Make sure to check how interest is calculated in case you don't pay it off in full or miss the due date for a month. If you can do this you'll earn some good benefits from the card using money that you're going to spend anyway, as well as build your credit profile. Regarding annual fees -",
"title": ""
},
{
"docid": "1d0aed06ac08c89d6005ebe963993335",
"text": "Most business credit cards do not report to the personal credit report unless the person pays the card late. Given that fact, any debt carried on these cards does not hurt the credit score if it is not reported. You can carry credit card debt on these cards without hurting your credit score. Just apply for business credit cards now to start building this segment of your credit.",
"title": ""
},
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
}
] |
[
{
"docid": "4571505cd5e76a598b1090e109add091",
"text": "\"A lot of credit card companies these days uses what they call \"\"daily interest\"\" where they charge the interest rate for the number of days till you pay off what you spent. This allows them to make more money than the \"\"period billing\"\". The idea of credit, theoretically, is that there isn't really a day when you can borrow without paying interest - in theory\"",
"title": ""
},
{
"docid": "c3fcbad362ce5138359e0b7103fc7650",
"text": "\"The comments section to Dilip's reply is overflowing. First - the OP (Graphth) is correct in that credit scoring has become a game. A series of data points that predicts default probability, but of course, offers little chance to explain why you applied for 3 loans (all refinancing to save money on home or rentals) got new credit cards (to get better rewards) and have your average time with accounts drop like a rock (well, I canceled the old cards). The data doesn't dig that deep. To discuss the \"\"Spend More With Plastic?\"\" phenomenon - I have no skin in the game, I don't sell credit card services. So if the answer is yes, you spend more with cards, I'll accept that. Here's my issue - The studies are all contrived. Give college students $10 cash and $10 gift cards and send them into the cafeteria. Cute, but it produces no meaningful data. I can tell you that when I give my 13yr old $20 cash, it gets spent very wisely. A $20 Starbucks card, and she's treating friends and family to lattes. No study needed, the result is immediate and obvious. Any study worth looking at would first separate the population into two groups, those who pay in full each month and those who carry a balance. Then these two groups would need to be subdivided to study their behavior if they went all cash. Not a simply survey, and not cheap to get a study of the number of people you need for meaningful data. I've read quotes where The David claimed that card users spend 10% more than cash users. While I accept that Graphth's concern is valid, that he may spend more with cards than cash, there is no study (that I can find) which correlates to a percentage result as all studies appear to be contrived with small amounts to spend. As far as playing the game goes - I can charge gas, my cable bill, and a few other things whose dollar amounts can't change regardless. (Unless you're convinced I'll gas up and go joy-riding) Last - I'd love to see any link in the comments to a meaningful study. Quotes where conclusions are stated but no data or methodology don't add much to the discussion. Edit - Do You Spend More with Cash or Credit? is an article by a fellow Personal Finance Blogger. His conclusion is subjective of course, but along the same path that I'm on with this analysis.\"",
"title": ""
},
{
"docid": "ee7f43ee585e6ce72415a9fbc96d715f",
"text": "\"Personally, I use my credit cards for everything because I get reward points (or, cash back, depending on the card), and I build credit history. I've had credit cards since I was 18 (now 22), and my credit score is in the higher end 700s which I'm told is pretty good for my age. Additionally, since I put my rent and large purchases on my credit card, I have a lot of reward points. I use these to buy things I wouldn't normally buy to try them out and see if they bring any value into my life. If not, I didn't really lose anything, but I have found value in some of those things. I realize most of this is gamification and consumerism at play, but getting that extra little thing once in a while for \"\"free\"\" which is pretty nice.\"",
"title": ""
},
{
"docid": "01264d3bf1b37ab9fb671b8d57b01293",
"text": "I've read multiple times that the way to rebuild the credit score is to get a credit card and then have some minor charges on it every month and have them paid in full every month. Old negative events age and this disciplined activity rebuild the score to some not to horrible levels. Now it's true that it's hard to get reasonably good credit cards when your credit score is poor. Yet it's not necessary to have a good credit card for this case - such things as large credit limit are not needed. All that's needed is a long grace period so that there's no interest between the moment a charge is done and a moment the bill is paid in full at the end of the month. Yes, the card may have rather high interest and rather low credit limit, but it doesn't really matter. I've read once on MSN Money that people are offered credit even while they're in the middle of bankruptcy, so it's not impossible to get a credit card in the described situation. Goes without saying that a lot of discipline will be needed to have all this implemented.",
"title": ""
},
{
"docid": "29fdf38ff4ab2c12206a69cea90ea65b",
"text": "\"good vs \"\"bad\"\" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider\"",
"title": ""
},
{
"docid": "3cc6c9116769ff348070c66a1ed49129",
"text": "\"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to \"\"forget to make a wire.\"\" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say \"\"here is everything you charged on your credit card this month\"\" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see \"\"never paid late; mostly paid the entire amount each month; never went over limit; never went into collections\"\" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay.\"",
"title": ""
},
{
"docid": "6db3089f91d39270c2273289148ff738",
"text": "Ways to build credit without applying for credit cards: It takes some time for these types of actions to positively affect you. I'd say at the very least 6 months. You won't get the full benefit for several years. However, the earlier you get started, the better.",
"title": ""
},
{
"docid": "5e84ad1a155299c3cc4cad8018e600cf",
"text": "\"I would not call this a \"\"good\"\" idea. But I wouldn't necessarily call it a bad idea either. Before you even consider it, you need to do a little bit of soul searching. If there is ANY chance that having multiple credit cards could entice you to spend more than you otherwise would, then this is definitely a bad idea. Avoiding temptation is the key to preventing regrettable actions (in all aspects of life). Psychoanalysis aside, let's take a mathematical approach to the question. I believe your conclusion is correct if you add some qualifiers to it: A few years from now, then your credit score will probably be higher than if you just had 1 credit card. Here are some other things to consider: And, saving the best for last: As for the hard inquiries, they should only have an effect on your credit score for 1 year (though they can be seen on your report for 2 years). Final thought: if you decide to do this (and I personally don't recommend it), I would keep the number of applications smaller (3-5 instead of 10-15). I also would only choose cards that have no annual fee. Try to choose 1 card that has 1-2% cash back and make that your regular card.\"",
"title": ""
},
{
"docid": "8488ea9ff8079c25fe41b97703b2ccc6",
"text": "this post offers excellent pointers that can help you choose a suitable line of credit you can use for financing your day-to-day expenses. please help up promote it to all your friends especially to those who are planning to apply for and get secured and prepaid credit cards!",
"title": ""
},
{
"docid": "3369ef70fc77b2dbaa0460f96c37ed79",
"text": "For many folks these days, not having a credit card is just not practical. Personally, I do quite a bit of shopping online for things not available locally. Cash is not an option in these cases and I don't want to give out my debit card number. So, a strategy is this: use a credit card for a purchase. Then immediately, or within a couple days, pay the credit card with that amount. Sounds simple but it takes a little effort to do it. This strategy gives you the convenience of a credit card and decreases the interest enormously.",
"title": ""
},
{
"docid": "2548412c71407b02dd63b488ad8538f5",
"text": "No, don't open a credit card. Get used to paying cash for everything from the beginning. The best situation you can be in is not to have any credit. When it comes time to buy a house, put down %30 percent and your 0 credit score won't matter. This will keep you within your means, and, with governments gathering more and more data, help preserve your anonimity.",
"title": ""
},
{
"docid": "e674ed76f3aa585ef0cb15210fb3b9bb",
"text": "\"You don't need to have a bunch of credit cards lying around; just a couple is fine. Get a \"\"rewards\"\" card (without annual fee) that pays you back for use, and use it regularly to buy groceries, for example. Pay it off promptly each month, using the rewards, if you like, to reduce the amount you have to send in. Or you can use the rewards for other purchases; some merchants offer $25 worth of merchandise for $20 in rewards. It used to be the case that you could negotiate a discount for paying cash rather than use a credit card, but that is a lot harder to do now, in many cases because credit-card company contracts with merchants prohibit this practice. Also, merchants often prefer credit cards rather than cash because money-handling is an issue (pay for an armored car to come pick up the day's receipts, or risk getting mugged on the way to the bank, possible burglaries if you leave the money overnight in the store, daily balancing of cash-register trays, etc.) So, not being in debt and being rich enough to not need to be in debt are laudable goals, and you have my best wishes that you will reach them soon, but getting rid of all your credit cards as a part of not being in debt may be more trouble than it is worth. Keep a couple, pay them off promptly, and if you are concerned about being in debt, you can time your charges so that you are in debt at most 2 or 3 days each month.\"",
"title": ""
},
{
"docid": "b324d756f11286a3f2de6da4a67af60b",
"text": "\"In the UK, using a credit card adds a layer of protection for consumers. If something goes wrong or you bought something that was actually a scam, if you inform the credit card company with the necessary documents they will typically clear the balance for that purchase (essentially the burden of 'debt' is passed to them and they themselves will have to chase up the necessary people). Section 75 of the Consumer Credit Act I personally use my credit card when buying anything one would consider as \"\"consumer spending\"\" (tvs, furniture ect). I then pay off the credit card immediately. This gives me the normal benefits of the credit card (if you get cashback or points) PLUS the additional consumer credit protection on all my purchases. This, in my opinion is the most effective way of using your credit card.\"",
"title": ""
},
{
"docid": "322a5c40e4c81d952476c0acfbd4c64e",
"text": "\"One of the factors of a credit score is the \"\"length of time revolving accounts have been established\"\". Having a credit card with any line of credit will help in this regard. The account will age regardless of your use or utilization. If you are having issues with credit limits and no credit history, you may have trouble getting financing for the purchase. You should be sure you're approved for financing, and not just that the financing option is \"\"available\"\" (potentially with the caveat of \"\"for well qualified borrowers\"\"). Generally, if you've gotten approved for financing, that will come in the form of another credit card account (many contracting and plumbing companies will do this in hopes you will use the card for future purchases) or a bank loan account (more common for auto and home loans). With the credit card account, you might be able to perform a balance transfer, but there are usually fees associated with that. For bank loan accounts, you probably can't pay that off with a credit card. You'll need to transfer money to the account via ACH or send in a check. In short: I wouldn't bet on paying with your current credit card to get any benefit. IANAL. Utilizing promotional offers, whether interest-free for __ months, no balance transfer fees, or whatever, and passing your debt around is not illegal, not fraudulent, and in many cases advised (this is a link), though that is more for people to distribute utilization across multiple cards, and to minimize interest accrued. Many people, myself included, use a credit card for purchasing EVERYTHING, then pay it off in full every month (or sometimes immediately) to reap the benefit of cash back rewards and other cardholder benefits. I've also made a major payment (tuition, actually) on a Discover card, and opened up a new Visa card with 18-months of no interest and no balance transfer fees to let the bill sit for 12 months while I finished school and got a job.\"",
"title": ""
},
{
"docid": "d14711729b97add28c20e2e8b1141186",
"text": "\"I'm the contrarian on this forum. Since you asked a \"\"should I ...\"\" question, I'm free to answer \"\"No, you shouldn't increase your limit. Instead, you should close it out\"\". A credit card is a money pump - it pumps money from your account to the bank's profit margins. When I look at my furniture and the bank's furniture, I know exactly who needs my money more (hint: it's not the bank). Credit cards change people's spending patterns. In my first day of training as a Sears salesman, the use of the card was drummed into our heads. People purchase on average 25% more when they use a card than when they pay cash. That's good if you're a retailer or the lender (at that time Sears was both), but no good if you're a consumer. Build up a $1,000 emergency fund (for emergencies only, not \"\"I need a quick latte because I stayed up too late last night\"\"), then savings for 6 to 12 months living expenses. Close and cut up the credit card. Save up and pay cash for everything except possibly your house mortgage. If you have that much cash in the bank, the bankers will be as willing to talk to you as if you had an 800+ score. I have lived both with and without debt. Life without debt is well worth the short term sacrifice early on.\"",
"title": ""
}
] |
fiqa
|
dcd6e776a2ccad33d366a9d148fbbce5
|
Is it legal for a vendor to reuse credit details from a previous transaction
|
[
{
"docid": "b93eab82c45c90d807ad18d332fc8fac",
"text": "It is very much legal and in fact depending on the fine print of the purchase you make, you have now established a business relationship among which gives the business the right to hold on to your information (unless privacy policy states otherwise) and reuse it under certain circumstances (such as auto shipments) and when they called and asked you if you wanted it and you said OK, you acknowledged authorization. All legal even if pushy and less than pretty.",
"title": ""
}
] |
[
{
"docid": "8be8ac7ecbba0a10b649f7028804137c",
"text": "I've had a card cloned 15 years ago and used to buy over 5k of goods in another country. So the inconvenience of having a card closed and re-issued is quite annoying even though the charges were reversed and I was made whole. But these days most CC fraud isn't from a card scanned by a waiter and cloned then used elsewhere. Mostly it is poorly secured databases or point of sale terminal malware. The latter is getting curtailed by chipped cards and the largest source of fraud is now online transactions (so called card not present) where the merchant has your CC number. If their system is breached the bad guys have a wealth of card numbers they sell in an E-bay like site on the dark web. This is where the Citi virtual CC comes in handy. Here's how it works to protect the bank and the hassles you go through when a card as to be re-issued. Citi's virtual CCs let you generate an actual credit card, complete with security code and expiration date. What is unique is that once the virtual CC is used it can only be used subsequently by that same merchant and is declined by any other. You can also set a total limit on what the merchant can charge as well as an expiration date. I use them for all my online accounts because they are, for all practical purposes, immune to the malware that steals CC info. Even if somehow the virtual CC is used before the merchant makes the initial charge that locks in the CC to their account the charge can be reversed without closing your actual card which has a different number. You can manage multiple Citi virtual CCs and view charge status, close, or adjust limits over time so managing them is quite easy with no risk to your primary account.",
"title": ""
},
{
"docid": "724f4aa42a46fe16ff32b4f2087a57a4",
"text": "I think you're off base here. The bureaus only remove information if the creditor cannot verify any dispute within 30 days, or if the information's super old. If the creditor can provide corrected information, then the credit bureau is required to apply it to its own database. A dispute can be about the entire account, or it can be about payment status within a given span (or spans) of time. Of course, it's the consumer who has to initiate the dispute.",
"title": ""
},
{
"docid": "fd4e136401631719b477bcecbdb36789",
"text": "\"Yes and No. There's always a \"\"fee\"\". The difference in credit vs debit usually determines how much that fee is and how it's paid. Each vendor who accepts the major credit card is under contract to pay for equipment and meet certain standards. The same is true for debt card transactions. How much the \"\"fee\"\" is can vary based on the contract the vendor has with MasterCard/Visa/AMEX. But in general most debt transactions go back to the bank who distributed the card.\"",
"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": "7e8c76ba62572ca0f714d3b8568c6417",
"text": "\"Your biggest risk with a vendor like this is not that your Credit Card Number will be stolen in transit, it is that it will be stolen from the vendor. I agree with @mhoran that using a one-time number is the best plan, provided you have a bank that offers such numbers. Bank of America calls it \"\"Shop Safe\"\" while Citibank calls it \"\"Virtual Account Numbers\"\". I think Discover card has something similar, but less useful, in that they aren't really one-time use, and I think American Express discontinued their service. AFAIK no one else offers anything like it. If you can't get a one-time number, then I was going to suggest buying a Visa gift card, until I put together the fact that you are making a purchase in Asia and the gift cards are not authorized for international payments (due to PATRIOT act restrictions). Visa does offer the V.me service which might help, but I doubt your vendor participates (or would even be allowed to participate) if they don't offer a secure order form. You can open a pre-paid Visa card account, which is probably what I'd do. You can buy pre-paid Visa cards the same way you buy Visa gift cards, the difference being you have to register the pre-paid cards (thanks, PATRIOT act) before you can use them. But it's not that big a deal to register one, you just fill out the online form your your SSN etc and you're good to go. Load it up with enough money to cover your purchase and the FX fees and then cut it up.\"",
"title": ""
},
{
"docid": "52b93ea21402f1d2f3d73a6d680c120c",
"text": "I have already talked to them over the phone and they insist they haven't charged me yet, and I will not be charged. When I informed them I had in fact been charged they agreed it would be reversed. So I have tried to resolve the issue and I don't have any confidence they will reverse the charge as it has not been done yet. They are difficult to communicate which makes the whole process more difficult. Your best next step is to call the credit card company and share this story. I believe the likely result is that the credit card company will initiate a charge back. My question is, is this a valid reason to file a chargeback on my credit card? Yes. If you attempted to work it out with the vendor and it is not working out, this is an appropriate time to initiate a charge back.",
"title": ""
},
{
"docid": "1f1da2383bf77d16e0fca936499ad01e",
"text": "\"In the United States, the Fair Credit Reporting Act allows companies to buy your credit information for \"\"legitimate business needs.\"\" The legitimate use of credit scores and credit reporting varies state to state, but like it or not, you can expect a lot more non-lending use of your credit information in the future. Companies and individuals use credit reports as an assessment of general behavior because, unfortunately, they work. You've seen the disclaimers about \"\"past performance…\"\", but unfortunately in this case… past performance really has been shown to be a pretty reliable indicator of future behavior. So…\"",
"title": ""
},
{
"docid": "7aec18814f3c28ae1a6b570030bfeae5",
"text": "There are rules and regulations as to how the credit card information must be stored, and I assume Square adhere to these rules. The point is that the barber doesn't need to see your credit card at all, and doesn't have to keep its number for keeping tabs, you only share the information with Square and they remit payments to everyone else. This is very similar to Paypal, Amazon and Google checkout systems, except that Square combine it with physical card processing.",
"title": ""
},
{
"docid": "c5d5523842c31bc0949236014e496797",
"text": "When you give your credit card number and authorize a merchant to charge your credit card, the merchant then gives the information to their merchant processor which in turns bills the bank that issued the card (it's a little more complex and it all happens instantly unless the merchant is using the very old fasion imprinting gizmos). It is possible for a merchant to attempt to charge you more than you authorized but if they do they risk a fine ($25-$50 for a chargeback) from their processor, the legitimate portion of the charge as well as increasing the processing fees charged by their processor or even the possibility of loosing their merchant account entirely and being permanently blacklisted by Visa/Mastercard. In short no legitimate business is going to intentionally over charge your credit card. There really isn't significant risk in using a reputable online retailer's order forms. There is the possibility that their database could be compromised but that risk is lower than the risk of having an employee steal your credit number when you give it to them in person. Besides in the US at least the most you can legally be held liable for is $50 assuming you notice the discrepancy within 60 days of statement the charge appears on and most banks limit liability to $0. Over the years I have had a number of different credit card numbers stolen and used fraudulently and I have never had to pay any fraudulent charges.",
"title": ""
},
{
"docid": "e8ac7c336553d8cc5346b8e340e22fd2",
"text": "\"A bona-fide company never needs your credit card details, certainly not your 3-digit-on-back-of-card #, to issue a refund. On an older charge, they might have to work with their merchant provider. But they should be able to do it within the credit card handling system, and in fact are required to. Asking for details via email doesn't pass the \"\"sniff test\"\" either. To get a credit card merchant account, a company needs to go through a security assessment process called PCI-DSS. Security gets drummed into you pretty good. Of course they could be using one of the dumbed-down services like Square, but those services make refunds ridiculously easy. How did you come to be corresponding on this email address? Did they initially contact you? Did you find it on a third party website? Some of those are fraudulent and many others, like Yelp, it's very easy to insert false contact information for a business. Consumer forums, even moreso. You might take another swing at finding a proper contact for the company. Stop asking for a cheque. That also circumvents the credit card system. And obviously a scammer won't send a check... at least not one you'd want! If all else fails: call your bank and tell them you want to do a chargeback on that transaction. This is where the bank intervenes to reverse the charge. It's rather straightforward (especially if the merchant has agreed in principle to a refund) but requires some paperwork or e-paperwork. Don't chargeback lightly. Don't use it casually or out of laziness or unwillingness to speak with the merchant, e.g. to cancel an order. The bank charges the merchant a $20 or larger investigation fee, separate from the refund. Each chargeback is also a \"\"strike\"\"; too many \"\"strikes\"\" and the merchant is barred from taking credit cards. It's serious business. As a merchant, I would never send a cheque to an angry customer. Because if I did, they'd cash the cheque and still do a chargeback, so then I'd be out the money twice, plus the investigation fee to boot.\"",
"title": ""
},
{
"docid": "f2ae18b2ef3ae9d1111258c6199420f3",
"text": "\"To answer the heart of your question, it would be illegal for any credit bureau or creditor to somehow \"\"penalize\"\" you just for trying to make sure that what's being reported about you is accurate. That's why the Fair Credit Reporting Act exists -- that's where the rights (and mechanisms) come from for letting you learn about and request accurate reporting of your credit history. Every creditor is responsible for reporting its own data to the bureaus, using the format provided by those bureaus for doing so. A creditor may not provide all of the information that can be reported, and it may not report information in as timely a manner as it could or should (e.g., payments made may not show up for weeks or even months after they were made, etc.). The bottom line is that the credit bureaus are not arbiters of the data they report. They simply report. They don't draw conclusions, they don't make decisions on what data to report. If a creditor provides data that is within the parameters of what the bureaus ask to be provided, then the bureaus report precisely that -- nothing more, nothing less. If there is an inaccuracy or mistake on your report, it is the fault (and responsibility) of the creditor, and it is therefore up to the creditor to correct it once it has been brought to their attention. Federal laws spell out the process that the bureau has to comply with when you file a dispute, and there are strict standards requiring the creditor to promptly verify valid information or remove anything which is not correct. The credit bureaus are simply automated clearinghouses for the information provided by the creditors who choose to subscribe to each bureau's system. A creditor can choose which (or none) of the bureaus they wish to report to, which is why some accounts show on one bureau's report on you but not another's. What I caution is, just because a credit bureaus reports on your credit doesn't mean they have anything to do with the accuracy or detail of what is being reported. That's up to the creditors.\"",
"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": "1321dc071d64c45d197ac4f381d77ac9",
"text": "\"It surely doesn't HURT to keep a receipt. I tend to pile up receipts in my desk drawer, never look at them, and then every few months throw them all out. If a vendor writes a receipt by hand or if the cash register is not tied in to the credit card system, keeping a receipt could give you evidence against mistakes or fraud. Like if the vendor gives you a receipt for $10 and then sends a transaction to the credit card company for $20, you could use the receipt as evidence of the problem. But if the vendor is trying to really cheat you, the most likely thing for him to do is run the legitimate transaction through, and then some time later run a fake transaction. So say today you go to vendor X, buy something for $20, and he bills your credit card $20. Then a few days later he bills you another $100 even though you never came back to the store. Sure, you have a receipt for $20. But you don't have a receipt for the $100 because you never authorized that transaction. Your receipt proves nothing -- presumably you're not disputing the $20. If you complain to the bank or go to the police or whatever, saying, \"\"Hey look, I don't have a receipt for the $100\"\" doesn't prove anything. How do they know you didn't just throw it away? It's difficult to prove that you never had such a receipt.\"",
"title": ""
},
{
"docid": "e5173b4baf00f45b2cd4262eb0d06c1c",
"text": "\"Here's an excerpt from VISA's Card Acceptance Guidelines for Visa Merchants (PDF) The merchant name is the single most important factor in cardholder recognition of transactions. Therefore, it is critical that the merchant name, while reflecting the merchant’s “Doing Business As” (DBA) name, also be clearly identifiable to the cardholder. This can minimize copy requests resulting from unrecognizable merchant descriptors. Merchant applications typically list the merchant name as the merchant DBA. This may differ from the legal name (which can represent the corporate owner or parent company), and may differ from the owner’s name which, for sole proprietorships, may reflect the business owner. I think that the key statement above is \"\"Therefore, it is critical that the merchant name [...] be clearly identifiable to the cardholder.\"\" Since this merchant was not clearly identifiable to the cardholder, they are in breach of a critical point in these guidelines. This is from VISA, but I would assume that all other major credit cards would have similar guidelines for their merchants. However keep in mind that these are \"\"guidelines\"\", and not (necessarily) rules.\"",
"title": ""
},
{
"docid": "69244fe41231d70ad9024bb0c7344d57",
"text": "It sounds like the items shipped directly from the vendor need to be recorded into your system when the order is confirmed, that way cost of goods sold and revenue don't get lost. You'll have a record of re-orders and cancels and other such things too.",
"title": ""
}
] |
fiqa
|
f49af46448d6e285e3d908d15e3768e1
|
How is income tax calculated in relation to selling used items?
|
[
{
"docid": "771a2ab38927b91dce0db9536c7a3ac1",
"text": "If the items you sold are items you previously bought for a higher price, the money you get selling them is not income, as you are taking a loss. However, you cannot deduct such losses. If you sell anything for more than what you paid for, the difference is a gain and is taxable. See this IRS web site for the explanation: https://www.irs.gov/businesses/small-businesses-self-employed/tax-tips-for-online-auction-sellers",
"title": ""
},
{
"docid": "0831ba49c07783c11cda19799c2448d6",
"text": "If I sell it for $50 can I write off the $50 loss. Only if you can establish that it is a normal part of your business and that you did not get $50 worth of use out of it. That's the technical, legal argument. As a practical matter, it's unlikely that they'll ding you for selling something after using it, as they won't know. If they did catch you, you would be in trouble. You can't deduct loss due to personal use. The larger problem is that if you sell one TV for a $50 loss, they aren't going to believe that you are in the business of selling TVs. If you sell a larger amount for a loss, then they still are unlikely to believe that you are in business. If you sell a large amount for an overall gain, they are unlikely to notice that you took a loss on one TV. They could only notice that if they were already auditing you, as that wouldn't be visible in your tax forms.",
"title": ""
},
{
"docid": "df72925f51029c060510200978db244d",
"text": "Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400. Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it.",
"title": ""
}
] |
[
{
"docid": "5712bdc7208402f56051e2fd71d54a61",
"text": "Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.",
"title": ""
},
{
"docid": "8f401c1a8bde35baed1cdaa8e98a1189",
"text": "My experience (two purchases, Ontario, Canada) is that the property taxes are paid by whomever is the owner on the date the tax bill comes due. The bill might be due before the owners even decide to sell. However: A part of the closing process is a Statement of Adjustments, in which various costs that span the tenure of two owners are split on a per-diem basis. In your case, there would have been a charge against you of 2/365 of the tax bill on this statement at the time of closing (if you hadn't paid any 2014 taxes) The statement also includes things like flat-rate water bills, monthly cable bills, security system monitoring... All paid by one owner or the other, but split fairly on a per diem basis at the time of closing...",
"title": ""
},
{
"docid": "b9e300e15d7fc0259b17bb812af02b9a",
"text": "IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to defend your determination with evidence in the event of an audit.",
"title": ""
},
{
"docid": "727f230efc36832b7da944692d36d904",
"text": "If significant amounts are involved, that would be a good time to consult a tax professional (EA/CPA licensed in your state). Generally, sale of a business is an ordinary income and you can only deduct tangible expenses, as Joe said. That would be laptops, bills, expenses per receipt, of course they must all be directly attributable to the business. You will need to be able to show that the laptops has only been used in business, recapture depreciation, etc. Same with all the rest of the expenses. If you're incorporated (i.e.: you hold this software under an S-Corp), then you're selling stocks, not business, and the tax treatment may be different, but I'm guessing this is not the case for you.",
"title": ""
},
{
"docid": "bd8039236f2a4d410de176efedbf9201",
"text": "I think that author does a disservice by writing such seemingly sensible articles without actually knowing how things work. If I didn’t know better, I would think this guy was teaching me something. It’s a shame he did not do research before he started writing. Let’s say you buy a classic car. You take super good care of it, all original, mint condition. You paid cash for it out of your savings. This is a balance sheet transaction that has nothing to do with income. You traded your cash asset for a classic car asset. Now let’s say this car is so rare and you keep it in such good condition that it gains value every year. Maybe it was worth $15k when you bought it, but this year it’s already worth $17k. Great job on making a great purchase! But is that $2k gain counted as income to you? No, it is not. The value of that asset on your balance sheet went up, but you did not make anything off of that increase in value because you have not sold it. If you had to pay taxes on the increase in value every year, those taxes would essentially force you to sell that car to pay the taxes just because you took care of it. Additionally, in the long term, no one would want to own anything, so this would destroy the value of everyone’s stuff, but I digress. In this example, amazon stock is the car. The author is seeing the increase in stock value adding to the balance sheets of the investors who bought the stock and confusing that with income. Back to our example, let’s say your car increased in value $2k a year for two years and you decide to sell it for $19k - now we are about to realize some income! Since you bought it for $15k and sold for $19k, you earned an income of the difference, or $4k. Your income wasn’t $19k, because you originally put $15k in cash into the car. That cash was already saved from income you made in the past, and it is not counted again as income in this sale. Because you did not work for this new car sale income, but it was derived from asset growth, the income is called capital gains. You invested your capital ($15k) into the asset (car), and that asset appreciated. When you sold it, you received capital (money) back in exchange for that asset. The capital you received is more than what you invested, which is to say you gained $4k of capital by investing in and then selling your asset (car). Because you held the car for two years, you qualify for lower long term capital gains tax rate on that $4k. Had you sold it after year 1, you would’ve paid your regular normal income tax rate on those capital gains. Either way, you owe the tax when you sell the asset, not when it appreciates. I’m sure you realize this already, but if we change the car to amazon stock in my story, this is exactly how it works with investors. The author gets several things wrong 1 - amazon profits are not passed through to shareholders for income tax purposes. If amazon paid dividends, those dividends would be taxed at payout at the long term capital gains rate, and they would be paid out of cash amazon has left after it already paid corporate taxes on profits. Amazon has decided they can add more value to investors by using cash to grow instead of paying dividends. When the investors sell the stock, they will owe capital gains on the growth of that stock. If amazon is correct that using cash to grow, then investors will effectively pay more when they sell the stock than they would pay today if dividends were paid. 2 - asset appreciation is not income. Those investors will realize the income when they sell the stock, and they will pay the tax then. 3 - he is missing the point entirely on why amazon runs a low profit or how business strategy translates into financials. Low prices are not a function of low profitability. Low profitability could be an adverse result of low pricing, but being low profit in order to be low price is a ridiculous and failing strategy. Amazon’s low pricing is a function of their unparalleled buying power, unparalleled consumer and product data, amazing logistics prowess, clever loyalty programs like amazon prime, and many other brilliant things they’ve done. Their low profitability is a function of their investment in things like amazon fresh, amazon Alexa, drone delivery, automated convenience stores, building out cloud computing infrastructure, and many other R&D projects, $4 billion in original content spending for amazon prime video, and all kinds of expenditures years ahead of when they become profitable. By the time consumers want it, amazon already built it three years ago - this is the power of amazon. Sometimes multi billion dollar experiments fail, and all that money was for nothing. Sometimes they lose money for a few years and then become the infrastructure that runs a third of the internet. Amazon does not let fear of failure stop them, they invest in growth with their cash. This is how Bezos thinks - how do we build the future, not how can I avoid tax I do need to make a disclaimer here - there could be special tax treatment of classic cars that makes my example not work. Also classic cars may not appreciate in value. I don’t know anything about classic cars, I just picked a politically neutral thing to put in my story and made some assumptions to illustrate how capital gains work. My story is definitely how stocks work, and probably cars, but I just want to point out that I don’t know shit about car collecting.",
"title": ""
},
{
"docid": "0701446cd152b86c8ec06263ef506004",
"text": "It doesn't go on Schedule E at all, it goes on form 4797. The fridge should have been depreciated, over 5 years. If you sold it after 5 years, all the proceeds are taxable income taxed as depreciation recapture (25% rate) up to the allowable depreciation (your original cost basis), above which it is taxable capital gain. Whether you actually have depreciated it or not, it is really your problem, IRS doesn't care. So if 5 years of ownership passed - just write it all as taxable income on the form 4797. Otherwise, allowable depreciation prorated (and you can still amend forms 3 years back to get at least part of it). The new fridge should also be depreciated over the 5 years of its expected useful life. See form 4562. Talk to a licensed tax professional (EA/CPA licensed in your state) for details.",
"title": ""
},
{
"docid": "a5e5d2517a9b70e783fc80f34f3ce7f7",
"text": "What you are doing is barter trade. Most countries [if not all] would tax this on assumed fair value. There are instances where countries may relax this norm in border areas for a small amount. Barter is not just for gold – one can virtually do this for any goods, i.e. sell garments in exchange for oil, sell electronic chips in exchange for consumer goods, etc. Quite a few business would flourish doing this and not exchange currency at all, hence the need for government to tax on the [assumed / calculated / arrived/ derived] fair value. A word of caution: at times this may not be fair at all and may actually cost more than had one done a transaction using currency.",
"title": ""
},
{
"docid": "be443f0165b1dd058028841d3e5487d1",
"text": "The way the wash sale works is your loss is added to your cost basis of the buy. So suppose your original cost basis is $10,000. You then sell the stock for $9,000 which accounts for your $1,000 loss. You then buy the stock again, say for $8,500, and sell it for $9,000. Since your loss of $1,000 is added to your cost basis, you actually still have a net loss of $500. You then buy the stock again for say $10,500, then sell it for $9,500. Your $500 loss is added to your cost basis, and you have a net loss of $1,500. Since you never had a net gain, you will not owe any tax for these transactions.",
"title": ""
},
{
"docid": "70426153e638963056b8ea7b41223de3",
"text": "Yes -- you can refund the sales tax and adjust your return. Make sure you have a copy of your customer's reseller permit on file. If the item sold was for their own use (instead of resale), then sales tax is due, so you might want to check with the customer and ask them what they want to do.",
"title": ""
},
{
"docid": "b26f06f3a6c027a98a382acad7e41bd2",
"text": "The buyer of such an account is likely treating it as an asset, and if they ever resell it capital gains (or loss) would be realized. I don't see why this would be any different for the person that created the account initially, except that the basis starts at $0 making the entire sale price taxable. How you figure the value of the account before the initial sale would be more difficult, but fortunately you may not ever need to know the value (for tax purposes) until you actually sell it.",
"title": ""
},
{
"docid": "f35f977f4958bf5092e2f8145f753a2f",
"text": "Australian Goods and Services Tax is charged on the sale amount. Whatever internal accounting you do before billing the customer is of no interest to the Australian Tax Office.",
"title": ""
},
{
"docid": "b3bb25844cb10bfb674a0e794e241cf7",
"text": "Capital gains taxes for a year are calculated on sales of assets that take place during that year. So if you sell some stock in 2016, you will report those gains/losses on your 2016 tax return.",
"title": ""
},
{
"docid": "1577e21bf4ad3391c4631197ed104014",
"text": "I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.",
"title": ""
},
{
"docid": "e2e8a2005ee6a4a2493d39a3913215c3",
"text": "If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work.",
"title": ""
},
{
"docid": "36933c8b079e518d1fe172462a6c9355",
"text": "It's better to use the accounting equation concept: Asset + Expenses = Capital + Liabilities + Income If you purchase an asset: Suppose you purchased a laptop of $ 500, then its journal will be: If you sell the same Laptop for $ 500, then its entry will be:",
"title": ""
}
] |
fiqa
|
4f75afe9506c3e97a752513d833f83f8
|
What's the most conservative split of financial assets for my portfolio in today's market?
|
[
{
"docid": "04222a44c6726ee87bd6ae80436e1e2e",
"text": "Before investing, absolutely follow the advice in mbhunter's answer. There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk. This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you. To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds. Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio. A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios.",
"title": ""
},
{
"docid": "ca08e689fcc2c9d406480c808f9c09c8",
"text": "This is a somewhat complicated question because it really depends on your personal situation. For example, the following parameters might impact your optimal asset allocation: If you need the money before 3 years, I would suggest keeping almost all of it in cash, CDs, Treasuries, and ultra safe short-term corporate bonds. If however, you have a longer time horizon (and since you're in your 30s you would ideally have decades) you should diversify by investing in many different asset classes. This includes Australian equity, international equity, foreign and domestic debt, commodities, and real estate. Since you have such a long time horizon market timing is not that important.",
"title": ""
},
{
"docid": "9b69b3a68a1a82649455e15faa0085ff",
"text": "You don't say your level of consumer debt. You don't say how much of an emergency fund you have. If you have debt, pay it off before you invest. If you don't have an emergency fund (X months' expenses, pick your own X) get that before investing. If you have neither, get a small emergency fund, and then throw as much as you can to getting rid of debt. Beyond that, look for prudent investments. They're not the same as conservative investments. To know what's prudent, learn about the ones you listed and what determines their prices. Learn how or why they go up or down in value.",
"title": ""
},
{
"docid": "6364703e78f43605fee86e784493e31a",
"text": "\"If you can afford the time and are looking for more deep, and fun, investment tips, check out http://gurufocus.com. Great for more fundamental analysis of \"\"Intelligent Investor\"\" type Benjamin Graham-style businesses. No use scatter-shooting the stock exchange hoping to find good value businesses. Even blue-chips have an increasingly uncertain future (except IMHO certain world dominators like KO, WMT, XO and MCD).\"",
"title": ""
},
{
"docid": "0ce624b0a62f54657bca647d8d3f3c8e",
"text": "The safest place to put money is a mixture of cash, local municipal bond funds with average durations under two years and US Treasury bond funds with short durations. Examples of good short term US municipal funds: I'm not an active investor in Australian securities, so I won't recommend anything specific. Because rates are so low right now, you want a short duration (ie. funds where the average bond matures in < 2 years) fund to protect against increased rates. The problem with safety is that you won't make any money. If your goal to grow the value of your investment while minimizing risk, you need to look at equities. The portfolios posted by justkt are a great place to start.",
"title": ""
}
] |
[
{
"docid": "a957e26c9c2338bb6e50c5611c3d019e",
"text": "\"This is always a judgement call based on your own tolerance for risk. Yes, you have a fairly long time horizon and that does mean you can accept more risk/more volatility than someone closer to starting to draw upon those savings, but you're old enough and have enough existing savings that you want to start thinking about reducing the risk a notch. So most folks in your position would not put 100% in stocks, though exactly how much should be moved to bonds is debatable. One traditional rule of thumb for a moderately conservative position is to subtract your age from 100 and keep that percentage of your investments in stock. Websearch for \"\"stock bond age\"\" will find lots of debate about whether and how to modify this rule. I have gone more aggressive myself, and haven't demonstrably hurt myself, but \"\"past results are no guarantee of future performance\"\". A paid financial planning advisor can interview you about your risk tolerance, run some computer models, and recommend a strategy, with some estimate of expected performance and volatility. If you are looking for a semi-rational approach, that may be worth considering, at least as a starting point.\"",
"title": ""
},
{
"docid": "1034f141e13d0ab627501a394187997c",
"text": "You can look the Vanguard funds up on their website and view a risk factor provided by Vanguard on a scale of 1 to 5. Short term bond funds tend to get their lowest risk factor, long term bond funds and blended investments go up to about 3, some stock mutual funds are 4 and some are 5. Note that in 2008 Swenson himself had slightly different target percentages out here that break out the international stocks into emerging versus developed markets. So the average risk of this portfolio is 3.65 out of 5. My guess would be that a typical twenty-something who expects to retire no earlier than 60 could take more risk, but I don't know your personal goals or circumstances. If you are looking to maximize return for a level of risk, look into Modern Portfolio Theory and the work of economist Harry Markowitz, who did extensive work on the topic of maximizing the return given a set risk tolerance. More info on my question here. This question provides some great book resources for learning as well. You can also check out a great comparison and contrast of different portfolio allocations here.",
"title": ""
},
{
"docid": "61e08f0d238c2474a7eb648aac96c339",
"text": "\"TL;DR - go with something like Barry Ritholtz's All Century Portfolio: 20 percent total U.S stock market 5 percent U.S. REITs 5 percent U.S. small cap value 15 percent Pacific equities 15 percent European equities 10 percent U.S. TIPs 10 percent U.S. high yield corp bonds 20 percent U.S. total bond UK property market are absurdly high and will be crashing a lot very soon The price to rent ratio is certainly very high in the UK. According to this article, it takes 48 years of rent to pay for the same apartment in London. That sounds like a terrible deal to me. I have no idea about where prices will go in the future, but I wouldn't voluntarily buy in that market. I'm hesitant to invest in stocks for the fear of losing everything A stock index fund is a collection of stocks. For example the S&P 500 index fund is a collection of the largest 500 US public companies (Apple, Google, Shell, Ford, etc.). If you buy the S&P 500 index, the 500 largest US companies would have to go bankrupt for you to \"\"lose everything\"\" - there would have to be a zombie apocalypse. He's trying to get me to invest in Gold and Silver (but mostly silver), but I neither know anything about gold or silver, nor know anyone who takes this approach. This is what Jeremy Siegel said about gold in late 2013: \"\"I’m not enthusiastic about gold because I think gold is priced for either hyperinflation or the end of the world.\"\" Barry Ritholtz also speaks much wisdom about gold. In short, don't buy it and stop listening to your friend. Is buying a property now with the intention of selling it in a couple of years for profit (and repeat until I have substantial amount to invest in something big) a bad idea? If the home price does not appreciate, will this approach save you or lose you money? In other words, would it be profitable to substitute your rent payment for a mortgage payment? If not, you will be speculating, not investing. Here's an articles that discusses the difference between speculating and investing. I don't recommend speculating.\"",
"title": ""
},
{
"docid": "60dbfff8b0fc19a14a628170f4c6aa8d",
"text": "\"The question is asking for a European equivalent of the so-called \"\"Couch Potato\"\" portfolio. \"\"Couch Potato\"\" portfolio is defined by the two URLs provided in question as, Criteria for fund composition Fixed-income: Regardless of country or supra-national market, the fixed-income fund should have holdings throughout the entire length of the yield curve (most available maturities), as well as being a mix of government, municipal (general obligation), corporate and high-yield bonds. Equity: The common equity position should be in one equity market index fund. It shouldn't be a DAX-30 or CAC-40 or DJIA type fund. Instead, you want a combination of growth and value companies. The fund should have as many holdings as possible, while avoiding too much expense due to transaction costs. You can determine how much is too much by comparing candidate funds with those that are only investing in highly liquid, large company stocks. Why it is easier for U.S. and Canadian couch potatoes It will be easier to find two good funds, at lower cost, if one is investing in a country with sizable markets and its own currency. That's why the Couch Potato strategy lends itself most naturally to the U.S.A, Canada, Japan and probably Australia, Brazil, South Korea and possibly Mexico too. In Europe, pre-EU, any of Germany, France, Spain, Italy or the Scandinavian countries would probably have worked well. The only concern would be (possibly) higher equity transactions costs and certainly larger fixed-income buy-sell spreads, due to smaller and less liquid markets other than Germany. These costs would be experienced by the portfolio manager, and passed on to you, as the investor. For the EU couch potato Remember the criteria, especially part 2, and the intent as described by the Couch Potato name, implying extremely passive investing. You want to choose two funds offered by very stable, reputable fund management companies. You will be re-balancing every six months or a year, only. That is four transactions per year, maximum. You don't need a lot of interaction with anyone, but you DO need to have the means to quickly exit both sides of the trade, should you decide, for any reason, that you need the money or that the strategy isn't right for you. I would not choose an ETF from iShares just because it is easy to do online transactions. For many investors, that is important! Here, you don't need that convenience. Instead, you need stability and an index fund with a good reputation. You should try to choose an EU based fund manager, or one in your home country, as you'll be more likely to know who is good and who isn't. Don't use Vanguard's FTSE ETF or the equivalent, as there will probably be currency and foreign tax concerns, and possibly forex risk. The couch potato strategy requires an emphasis on low fees with high quality funds and brokers (if not buying directly from the fund). As for type of fund, it would be best to choose a fund that is invested in mostly or only EU or EEU (European Economic Union) stocks, and the same for bonds. That will help minimize your transaction costs and tax liability, while allowing for the sort of broad diversity that helps buy and hold index fund investors.\"",
"title": ""
},
{
"docid": "1f0cca52044dd1b928369fc8e2ad8a9e",
"text": "\"First, decide on your asset allocation; are you looking for a fund with 60% stocks/risky-stuff, or 40% or 20%? Second, look for funds that have a mix of stocks and bonds. Good keywords would be: \"\"target retirement,\"\" \"\"lifecycle,\"\" \"\"balanced,\"\" \"\"conservative/moderate allocation.\"\" As you discover these funds, probably the fund website (but at least Morningstar.com) will tell you the percentage in stocks and risk assets, vs. in conservative bonds. Look for funds that have the percentage you decided on, or as close to it as possible. Third, build a list of funds that meet your allocation goal, and compare the details. Are they based on index funds, or are they actively managed? What is the expense ratio? Is the fund from a reputable company? You could certainly ask more questions here if you have several candidates and aren't sure how to choose. For investing in US dollars one can't-go-wrong choice is Vanguard and they have several suitable funds, but unfortunately if you spend in NIS then you should probably invest in that currency, and I don't know anything about funds in Israel. Update: two other options here. One is a financial advisor who agrees to do rebalancing for you. If you get a cheap one, it could be worth it. Two is that some 401k plans have an automatic rebalancing feature, where you have multiple funds but you can set it up so their computer auto-rebalances you. That's almost as good as having a single fund, though it does still encourage some \"\"mental accounting\"\" so you'd have to try to only look at the total balance, not the individual fund balances, over time. Anyway both of these could be alternatives ways to go on autopilot, besides a single fund.\"",
"title": ""
},
{
"docid": "ce9537c51f2349ef3b2921eeeec8a658",
"text": "It's all about risk. These guidelines were all developed based on the risk characteristics of the various asset categories. Bonds are ultra-low-risk, large caps are low-risk (you don't see most big stocks like Coca-Cola going anywhere soon), foreign stocks are medium-risk (subject to additional political risk and currency risk, especially so in developing markets) and small-caps are higher risk (more to gain, but more likely to go out of business). Moreover, the risks of different asset classes tend to balance each other out some. When stocks fall, bonds typically rise (the recent credit crunch being a notable but temporary exception) as people flock to safety or as the Fed adjusts interest rates. When stocks soar, bonds don't look as attractive, and interest rates may rise (a bummer when you already own the bonds). Is the US economy stumbling with the dollar in the dumps, while the rest of the world passes us by? Your foreign holdings will be worth more in dollar terms. If you'd like to work alternative asset classes (real estate, gold and other commodities, etc) into your mix, consider their risk characteristics, and what will make them go up and down. A good asset allocation should limit the amount of 'down' that can happen all at once; the more conservative the allocation needs to be, the less 'down' is possible (at the expense of the 'up'). .... As for what risks you are willing to take, that will depend on your position in life, and what risks you are presently are exposed to (including: your job, how stable your company is and whether it could fold or do layoffs in a recession like this one, whether you're married, whether you have kids, where you live). For instance, if you're a realtor by trade, you should probably avoid investing too much in real estate or it'll be a double-whammy if the market crashes. A good financial advisor can discuss these matters with you in detail.",
"title": ""
},
{
"docid": "f3b46a3bcf094f4b1063d750d505eb04",
"text": "From Vanguard's Best practices for portfolio rebalancing:",
"title": ""
},
{
"docid": "271b245c66784da2295c00234b95afee",
"text": "Not knowing the US laws at all, you should worry more about having the best stock portfolio and less about taxes. My 0,02€",
"title": ""
},
{
"docid": "eac11a4d733d751de25624ac4dd2d817",
"text": "\"Without knowing anything else about you, I'd say I need more information. If all of your investments are in stocks, then that's not really diversified, regardless of how many stocks you own. There are other things to invest in besides stocks (and bonds, for that matter). What countries? \"\"International\"\" is pretty broad, and some countries are better bets than others at the moment. If you're old, I'd say very little of your money should be in stocks anyway. I'd also seek financial advice that is tailored to your goals, sophistication, etc.\"",
"title": ""
},
{
"docid": "56290eb39d292df78b8af33f4e308903",
"text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.",
"title": ""
},
{
"docid": "4c00e188521bb82ead41c19c72e51825",
"text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"",
"title": ""
},
{
"docid": "075700e1a0c8d91865339a4c8c4fdc1f",
"text": "\"As you note, your question is inherently opinion-based. That said, if I were in your situation I would sell the stock all at once and buy whatever it is you want to buy (hopefully some index ETF or mutual fund). According to what I see, the current value of the HD stock is about $8500 and the JNJ stock is worth less than $500. With a total investment of less than $10,000, any gain you are likely to miss by liquidating now is not going to be huge in absolute terms. This is doubly true since you were given the stock, so you have no specific reason to believe it will do well at all. If you had picked it yourself based on careful analysis, it could be worth keeping if you \"\"believed in yourself\"\" (or even if you just wanted to test your acumen), but as it is the stock is essentially random. Even if you want to pursue an aggressive allocation, it doesn't make sense to allocate everything to one stock for no reason. If you were going to put everything in one stock, you'd want it to be a stock you had analyzed and picked. (I still think it would be a bad idea, but at least it would be a more defensible idea.) So I would say the risk of your lopsided allocation (just two companies, with more than 90% of the value in just one) outweighs any risk of missing out on a gain. If news breaks tomorrow that the CEO of Home Depot has been embezzling (or if Trump decides to go on the Twitter warpath for some reason), your investment could disappear. Another common way to think about it is: if you had $9000 today to buy stocks with, would you buy $8500 worth of HD and $500 worth of JNJ? If not, it probably doesn't make sense to hold them just because you happen to have them. The only potential exception to my advice above would be tax considerations. You didn't mention what your basis in the stock is. Looking at historical prices, it looks like if all the stock was 20 years old you'd have a gain of about $8000, and if all of it was 10 years old you'd have a gain of about $6000. If your tax situation is such that selling all the stock at once would push you into a higher tax bracket, it might make sense to sell only enough to fit into your current bracket, and sell the rest next year. However, I think this situation is unlikely because: A) since the stock has been held for a long time, most of the gains will be at the lower long-term rate; B) if you have solid income, you can probably afford the tax; and C) if you don't have solid income, your long-term capital gains rate will likely be zero.\"",
"title": ""
},
{
"docid": "c7b99052068ae7cb6abb83d7591cd932",
"text": "Theoretically there is limited demand for risky investments, so higher-risk asset classes should outperform lower-risk asset classes over sufficiently long time periods. In practice, I believe this is true, but it could be several decades before a risky portfolio starts to outperform a more conservative one. Stocks are considered more risky than most assets. Small-cap stocks and emerging market stocks are particularly high-risk. I would consider low-fee ETFs in these areas, like VB or VWO. If you want to seek out the absolute riskiest investments, you could pick individual stocks of companies in dire financial situations, as Bank of America was a couple years ago. Most importantly, if you don't expect to need the money soon, I would maximize your contribution to tax-advantaged accounts since they will grow exponentially faster than taxable accounts. Over 50 years, a 401(k) or IRA will generally grow at least 50% more than a taxable account, maybe more depending on the tax-efficiency of your investments. Try to contribute the maximum ($17,500 for most people in 2014) if you can. If you can save more than that, I'd suggest contributing a Roth 401k rather than a traditional 401(k) - since Roth contributions are post-tax, the effective contribution limit is higher. Also contribute to a Roth IRA (up to $5,500 in 2014), using a backdoor Roth if necessary.",
"title": ""
},
{
"docid": "b814e2e4f943f77864610939f302e619",
"text": "\"I find it interesting that you didn't include something like [Total Bond Market](http://stockcharts.com/freecharts/perf.html?VBMFX), or [Intermediate-Term Treasuries](http://stockcharts.com/freecharts/perf.html?VBIIX), in your graphic. If someone were to have just invested in the DJI or SP500, then they would have ignored the tenants of the Modern Portfolio Theory and not diversified adequately. I wouldn't have been able to stomach a portfolio of 100% stocks, commodities, or metals. My vote goes for: 1.) picking an asset allocation that reflects your tolerance for risk (a good starting point is \"\"age in bonds,\"\" i.e. if you're 30, then hold 30% in bonds); 2.) save as if you're not expecting annualized returns of %10 (for example) and save more; 3.) don't try to pick the next winner, instead broadly invest in the market and hold it. Maybe gold and silver are bubbles soon to burst -- I for one don't know. I don't give the \"\"notion in the investment community\"\" much weight -- as it always is, someday someone will be right, I just don't know who that someone is.\"",
"title": ""
},
{
"docid": "cafffcc507a7d7a0376e05fbf08013fd",
"text": "Nobody can give you a safe 6% return with that portfolio under current conditions. It looks like the current 10 year treasury is yielding about 2.2%. With 60% in bonds, the stocks would have to yield about 12%, which just isn't happening safely now.",
"title": ""
}
] |
fiqa
|
069bcafdcd9c6c876da5ce47fe756d4a
|
How do rich people guarantee the safety of their money, when savings exceed the FDIC limit?
|
[
{
"docid": "f0042193f945e999cc51ee7b75a7469d",
"text": "They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international funds, and their own companies. Most of these carry risk, but they are diversified. They also can afford advisers to help them manage and protect their assets.",
"title": ""
},
{
"docid": "0f0d2806fddac004c3cdc11e569e2489",
"text": "\"Rich people use \"\"depositor\"\" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day. The bulk of a wealthy person's money is in investments. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing value to inflation. Now, all investments have risk; that's why interest exists. If, in some alternate universe, charging interest were illegal across the board, nobody would loan money, because there's nothing to be gained and a lot to lose. You have to make it worth my while for me to want to loan you my money, because sure as shootin' you're going to use my loan to make yourself wealthier. A wealthy person will choose a set of investments that represent an overall level of risk that he is comfortable with, much like you or I would do the same with our retirement funds. Early in life, we're willing to take a lot of risk, because there's a lot of money to be made and time to recover from any losses. Closer to retirement, we're much more risk-averse, because if the market takes a sudden downturn, we lose a significant portion of our nest egg with little hope of regaining it before we have to start cashing out. The very wealthy have similar variances in risk, with the significant difference that they are typically already drawing a living from their investments. As such, they already have some risk aversion, but at the same time they need good returns, and so they must pay more attention to this balancing act between risk and return. Managing their investments in effect becomes their new job, once they don't have to work for anyone else anymore. The money does the \"\"real work\"\", and they make the executive decisions about where best to put it. The tools they use to make these decisions are the same ones we have; they watch market trends to identify stages of the economic cycle that predicate large movements of money to or from \"\"safe havens\"\" like gold and T-debt, they diversify their investments to shield the bulk of their wealth from a sudden localized loss, they hire investment managers to have a second pair of eyes and additional expertise in navigating the market (you or I can do much the same thing by buying shares in managed investment funds, or simply consulting a broker; the difference is that the wealthy get a more personal touch). So what's the difference between the very wealthy and the rest of us? Well first is simple scale. When a person with a net worth in the hundreds of millions makes a phone call or personal visit to the financial institutions handling their money, there's a lot of money on the line in making sure that person is well looked-after. If we get screwed over at the teller window and decide to close our acocunts, the teller can often give us our entire account balance in cash without batting an eyelid. Our multimillionaire is at the lower end of being singlehandedly able to alter his banks' profit/loss statements by his decisions, and so his bank will fight to keep his business. Second is the level of control. The very wealthy, the upper 1%, have more or less direct ownership and control over many of the major means of production in this country; the factories, mines, timber farms, software houses, power plants, recording studios, etc that generate things of value, and therefore new wealth. While the average Joe can buy shares in these things through the open market, their investment is typically a drop in the bucket, and their voice in company decisions equally small. Our decision, therefore, is largely to invest or not to invest. The upper 1%, on the other hand, have controlling interests in their investments, often majority holdings that allow them far more control over the businesses they invest in, who's running them and what they do.\"",
"title": ""
},
{
"docid": "aaa8aad4c12291860d68cfacd8f7b6ed",
"text": "I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the standard FDIC coverage. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. From the account holder's perspective, he/she just has a single account with the main financial institution.",
"title": ""
},
{
"docid": "bb4d887a729760610520284af03e61a8",
"text": "Most people who have over $250,000 in liquid cash savings would not want to start putting their money into regular savings accounts in different banks, especially with interest rates as ridiculously low as they are now in 2014-15. People with money will want to diversify their investments in ways that will potentially earn them more money, and they can also afford to seek the advice of financial planners who can help them do this wisely. Even if you decide to put $250,000 into various accounts at different banks, I wouldn't necessarily trust that the FDIC will be able to help you recover your money in the event that your banks go under. The amount of money available to the FDIC to cover such losses pales in comparison to the actual amount of money that Americans have in their bank accounts.",
"title": ""
},
{
"docid": "fa8cc03843dd6506bc631e247fd19868",
"text": "Even assuming hypothetically that you are able to split money in different bank accounts to get full coverage and all your accounts are in top ranking financial institutions in USA, you can not rely on FDIC if all or most of those banks go broke. Because FDIC just has a meagre 25 billion dollars to cover all bank accounts in the USA. And you know the amount of bank deposits in USA run in at least a trillion of dollars. US Deposits & FDIC Insurance figures",
"title": ""
},
{
"docid": "3d4e2ae1a529e77472855bdaa6f802a7",
"text": "The FDIC has been pretty good at recovery lost money from failed banks. The problem is the temporary loss from immediate needs. The best thing for anyone to do is diversify in investments and banks with adequate covered insurance for all accounts. Immediate access to available cash is always a priority that should be governed by the money manager in this case yourself.",
"title": ""
},
{
"docid": "4fdc0c096584047dd029d2407e86289d",
"text": "With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are:",
"title": ""
}
] |
[
{
"docid": "b3a7ea7a18655ce93d4b616d9b56a7dc",
"text": "To store $1 milion in a bank with full FDIC insurance currently requires 4 separate bank accounts, each at 250k. It's not that difficult, particularly if you are married and your spouse can have 2 in his/her name. (This is dependent on the FDIC limit; they raised it to 250k after the 2008 crash).",
"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": "0813109a518c4556c2b14a0b0b8bc4ff",
"text": "The FDIC insures deposits up to $250,000 per depositor, per bank, for each ownership category. The ownership categories are: You and a spouse could collectively have $750,000 of insured deposits at a single bank if you each had a single account, and a joint account together.",
"title": ""
},
{
"docid": "30036900c61f555fd1276bf5e10425c8",
"text": "\"Why would a bank buy government bonds? Why couldn't they just deposit their money in another bank instead? Generally, banks are limited by laws and regulations about how much they must set aside as reserves. Of the money they receive as deposits, they may loan a certain amount, but must keep some as a reserve (this is called \"\"fractional reserve banking\"\"). Different countries have a different amount that they must set aside in reserves. In countries where bank deposits are guaranteed, there is almost always some upper limit to how much is guaranteed. The amount of money that a bank would deposit in another bank would be far greater than the guarantee.\"",
"title": ""
},
{
"docid": "ddd515b9ee7e1314156eac28ec463373",
"text": "Remind me again who held and was willing to loan out that debt? The investor classes partly created the risk environment that they now want protection from. convenient. If they're going to sit on their savings, they're going to comparatively lose more to inflation, so what you think will happen probably wouldn't happen. And even if they do, savings don't receive preferential tax treatment anyways.",
"title": ""
},
{
"docid": "ef15667412971eea6b43a973276ba24b",
"text": "In the US, pension benefits promised by employers are tightly regulated by a law called ERISA. One of the requirements is that money be deposited in a trust that is out of the reach of the employer and the employer's creditors, so even if the employer falls on hard times or goes bankrupt, the money to pay the pensions is still there. In addition, the benefits are guaranteed by the federal government through the Pension Benefit Guaranty Corporation (usually called the PBGC). Relative to most investments, pensions are a safe bet.",
"title": ""
},
{
"docid": "336b6996b017bb551981361ee8664699",
"text": "You don't mention how much money you are talking about but one option is to use reward checking accounts that are FDIC/NCUA insured. They pay 3-4% interest but generally have a few requirements such as 10-12 debit card transactions and sometimes require direct deposit as well as a limit of 10-50k deposits earning the top rate.",
"title": ""
},
{
"docid": "af8d1a231445e40ec2269437e4e6821e",
"text": "http://www.fdic.gov/deposit/deposits/index.html FDIC currently insures up to $250,000. (I would have put that as a comment to Jeffery but it says it was locked.) You don't want to put all your eggs in one basket. If you shop around, and keep shopping all the time you can keep your accounts in a single place so long as that single place provides the best deal. Don't have any loyalty to your banking institutions because they don't have any loyalty to you. Also, having lots of accounts means you are familiar with lots of institutions, so you are likely better at shopping around. Things I consider. For fewer institutions: For more institutions:",
"title": ""
},
{
"docid": "c3be5d3a72a70dcebc60ef2851f5f9a6",
"text": "And set to get higher. Wait until the super rich start eating the poorer super rich. We don't even know what the 1% really has because the sample sizes are so small. We do know there's trillions in offshore accounts but we don't know who owns it.",
"title": ""
},
{
"docid": "8953063491a0162c87cdf123213b6f1a",
"text": "I think it's because there are people who build entire wealth-gain strategies around certain conditions. When those conditions change, their mechanism of gaining wealth is threatened and they may take a short term loss as they transform their holdings to a new strategy.",
"title": ""
},
{
"docid": "f2be2bbdb0a7ff1bfde794353ad8c0e0",
"text": "\"You can store millions of dollars in deposit accounts, you just lose the explicit FDIC guarantee. So you look for rock-solid banks. Bankrate.com has \"\"Safe and Sound Ratings\"\" that show the relative strength of various banks. You put your excess deposits in those banks, and you are pretty safe. Note that in addition to the explicit FDIC guarantee, there is now an implicit guarantee that certain institutions have been deemed too \"\"big to fail\"\", and will be backed by the full faith and credit of the US Government, without regard to the capitalization of the bank. Bank of America, for example, is not well capitalized and is carrying billions of dollars of \"\"assets\"\" that have little or no value. Yet government policy keeps the bank afloat and your deposits secure. Another strategy is to use municipal money market accounts, which provide secure (but not guaranteed) deposit-like accounts as well as a tax benefit. If you have > $1M in liquid assets, you probably need a financial professional and attorney advising you to make sure that you are aware of and are controlling for risk in a way consistent with your longer-term goals.\"",
"title": ""
},
{
"docid": "88f929d4ba467b6a84f2f43272191d01",
"text": "I didn't realize that! Thanks for the correction. A bit of google-fu provided this: >[Stolen funds may be covered by what's called a banker's blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank's customers.](http://www.fdic.gov/consumers/consumer/information/fdiciorn.html)",
"title": ""
},
{
"docid": "cfb8eb76f144b9bc12d00e547c5e16c9",
"text": "\"I'd refer you to Is it true that 90% of investors lose their money? The answer there is \"\"no, not true,\"\" and much of the discussion applies to this question. The stock market rises over time. Even after adjusting for inflation, a positive return. Those who try to beat the market, choosing individual stocks, on average, lag the market quite a bit. Even in a year of great returns, as is this year ('13 is up nearly 25% as measured by the S&P) there are stocks that are up, and stocks that are down. Simply look at a dozen stock funds and see the variety of returns. I don't even look anymore, because I'm sure that of 12, 2 or three will be ahead, 3-4 well behind, and the rest clustered near 25. Still, if you wish to embark on individual stock purchases, I recommend starting when you can invest in 20 different stocks, spread over different industries, and be willing to commit time to follow them, so each year you might be selling 3-5 and replacing with stocks you prefer. It's the ETF I recommend for most, along with a buy and hold strategy, buying in over time will show decent returns over the long run, and the ETF strategy will keep costs low.\"",
"title": ""
},
{
"docid": "2ac5ffe36c101ca43bf5aead9409f206",
"text": "None of your options seem mutually exclusive. Ordinarily nothing stops you from participating in your 401(k), opening an IRA, qualifying for your company's pension, and paying off your debts except your ability to pay for all this stuff. Moreover, you can open an IRA anywhere (scottrade, vanguard, etrade, etc.) and freely invest in vanguard mutual funds as well as those of other companies...you aren't normally locked in to the funds of your IRA provider. Consider a traditional IRA. To me your marginal tax rate of 25% doesn't seem that great. If I were in your shoes I would be more likely to contribute to a traditional IRA instead of a Roth. This will save you taxes today and you can put the extra 25% of $5,500 toward your loans. Yes, you will be taxed on that money when you retire, but I think it's likely your rate will be lower than 25%. Moreover, when you are retired you will already own a house and have paid off all your debt, hopefully. You kind of need money now. Between your current tax rate and your need for money now, I'd say a traditional makes good sense. Buy whatever funds you want. If you want a single, cheap, whole-market fund just buy VTSAX. You will need a minimum of $10K to get in, so until then you can buy the ETF version, VTI. Personally I would contribute enough to your 401(k) to get the match and anything else to an IRA (usually they have more and better investment options). If you max that out, go back to the 401(k). Your investment mix isn't that important. Recent research into target date funds puts them in a poor light. Since there isn't a good benchmark for a target date fund, the managers tend to buy whatever they feel like and it may not be what you would prefer if you were choosing. However, the fund you mention has a pretty low expense ratio and the difference between that and your own allocation to an equity index fund or a blend of equity and bond funds is small in expectation. Plus, you can change your allocation whenever you want. You are not locked in. The investment options you mention are reasonable enough that the difference between portfolios is not critical. More important is optimizing your taxes and paying off your debt in the right order. Your interest rates matter more than term does. Paying off debt with more debt will help you if the new debt has a lower interest rate and it won't if it has a higher interest rate. Normally speaking, longer term debt has a higher interest rate. For that reason shorter term debt, if you can afford it, is generally better. Be cold and calculating with your debt. Always pay off highest interest rate debt first and never pay off cheap debt with expensive debt. If the 25 year debt option is lower than all your other interest rates and will allow you to pay off higher interest rate debt faster, it's a good idea. Otherwise it most likely is not. Do not make debt decisions for psychological reasons (e.g., simplicity). Instead, always chose the option that maximizes your ultimate wealth.",
"title": ""
}
] |
fiqa
|
1f3001f518429803caeed72b9b9f666a
|
Can an International student of F1 VISA accept money in her US bank account on behalf of someone else?
|
[
{
"docid": "35c5605589b6b4dbdea21675a10af603",
"text": "There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.",
"title": ""
}
] |
[
{
"docid": "a96d117587982e48e6551829af00c8bf",
"text": "Of course you can. My assumption is you are/will be in UK. I am a student from outside the UK and I am about to start studying at a UK university/college/school. How do I choose which bank is best for me? You should be able to open a ‘basic bank account’ with a number of different banks. A ‘basic bank account’ provides easy access to banking facilities for adults in the UK. Additionally, some banks offer a bank account tailored specifically for your needs as an international student. There is a table on pages 6 & 7 of this leaflet that has a list of basic accounts and other accounts that may be suitable along with brief descriptions of some of their features. Most banks don’t ask you to pay in any money to open a basic account. You should look around to see which bank and account suit you best and then visit the local branch of the bank you have chosen. You may also be able to get other types of account, as detailed in the next section. Please speak to a bank Go through the source I have linked. It is a bit old, but has relevant information for you. SOURCE",
"title": ""
},
{
"docid": "b5ee0e5ee25552262506cdaf9a8f6403",
"text": "\"You can wire the money to the university. If your friend is a registered student, then they will have an account at the school. Contact the school directly and ask for the \"\"bursar's office\"\" (assuming it is an English speaking school). The bursar will tell you how to wire the money so that it reaches the proper account. Normally, you will wire to a general university account at a bank and the memo on the wire will include the student's account number. Your friend can wire money to your account at your bank. Go to your bank and ask them for the procedure. By the way, there is a 90% chance your \"\"friend\"\" will not pay you back.\"",
"title": ""
},
{
"docid": "118b7cdb68dfddbd40d4ac3fb00c6b6b",
"text": "Yes, you can transfer money to your account, any bank will do it. The conversion charges will be there i.e. the diff between USD and the rate at which the bank sells it, usually Rs. 2/-, appx. In addition, transaction charge (not very high). As for taking from friends & repaying in India, check UAE tax treatement for taking money from friends (is it considered as your income & are you liable for taxes). As for giving back, get some documentation done as a loan, otherwise your friends may be considered to be taking gift/consideration/income from you and taxed. Most straight forward way is to transfer the money from your mother's account.",
"title": ""
},
{
"docid": "8b45e548d7249ae24266bede29b37465",
"text": "I will not pay any taxes in the Us, since I am not working for an US company What you will or will not pay is up to you of course, but you definitely should pay taxes in the US, as you're working in the US. Since you mentioned being from Japan, I'll also suggest checking whether you're allowed to perform any work in the US under the conditions of your visa. If you're a F1/J1 student - you'll be breaking the immigration law and may be deported. You might be liable for taxes in Germany, as well, and also in Japan. I'll have to edit this to allow people who downvoted the answer without knowing the legal requirements to change their vote. F1 student cannot be a contractor without a valid EAD. Period. There's no doubt about it and legal requirements are pretty clear. Anyone who claims that you wouldn't be breaking the terms of your visa is wrong. Note, I'm neither a lawyer nor a tax professional, for definite advice talk to a professional.",
"title": ""
},
{
"docid": "b5c208aa15db85fd959b6995ab8b9298",
"text": "In short getting funds converted outside of the Banking channel is illegal in India as Foreign Exchange is still regulated. If you show only a credit from your friend's NRE account to your NRO account [note it can't be your NRE account], it would be treated as GIFT and taxed accordingly, else you would have to show it as loan and pay back. You may show the payback in USD. But then there is a limit of Fx every individual can get converted/repatriate out of India and there is a purpose of remittance, all these complicate this further.",
"title": ""
},
{
"docid": "fe5cc026007dcec1e20591574cf671a4",
"text": "Nothing happens. A bank is a business; your relationship with the bank doesn't change because your visa or immigration status changes. Money held in the account is still held in the account. Interest paid on the account is still taxable. And so on. If the account is inactive long enough, abandoned account rules may apply, but that still has nothing to do with your status.",
"title": ""
},
{
"docid": "81b702bd57c5ca1a9422cc1c74918b24",
"text": "\"As a general proposition, no, you do not need to report money transfers into the US. If a transaction exceeds $10,000 then the bank must report it anyway. Note that \"\"structuring\"\" your transactions to avoid a $10,000 deposit is illegal, so be careful if you are moving lots of money. As a general rule, no, transferring your own individual money from a foreign account to a US account does not incur taxes. Only lawyers are authorized to practice law in the US. They should generally be bar licensed in the state of practice. Certified public accountants can assist you with tax preparation and return positions, though tax lawyers may be necessary for some situations or for formal tax opinions. Be sure to use an experienced advisor to file your tax returns and information reporting.\"",
"title": ""
},
{
"docid": "c92eab5ac3d5d3b95ad478ef01af3752",
"text": "Your sister-in-law should know that anybody, US citizen or not, can open a US bank account. She should do that and then pay her 20k fee to the company. I'm a Canadian citizen and I have a US bank account and I don't even live nor work in the United States. I only use it when I travel for leisure and order online. This looks like a scam, but if you know well your sister-in-law, it may not be.",
"title": ""
},
{
"docid": "e75eceb1b2ab7c39bcb9e9670364114b",
"text": "This will end badly, the only question is how long it will take. Performing bank transfers is not difficult and there is no way a 3rd party would be paying her large sums of money to perform these transfers unless the purpose was illegitimate and they were taking advantage of her. In my experience it is as simple as entering the target bank account routing and account #, entering the name (this is not double-checked by the bank to associate with the target account), entering a dollar amount and then agreeing to the terms of the transfer--there are not people out there who have a lot of money but would rather pay somebody $2000+ to do 2 minutes of work in an unofficial capacity instead of just doing it themselves unless they are trying to hide something and/or take advantage of a mark.",
"title": ""
},
{
"docid": "08248f5214e8b3782b0d58a4351d7af1",
"text": "He cannot get money from someone else account. Your US resident friend in New York can send money to your Indian friend in Atlanta via Western Union which has presence in almost every corner of the US. Most definitely in the city of Atlanta. Your Indian friend can receive the Western Union transfer, in cash, within minutes after the friend in New York sends it. Here's the site for location search. The sender doesn't need to go anywhere, can send online, so your New York friend doesn't even need to waste much time. In fact - you don't need to bother your friend in New York, you can send it online yourself (assuming you're American/have US bank account). In order to receive the money, your Indian friend will obviously need a proper identification (i.e.: passport).",
"title": ""
},
{
"docid": "b55c9ab7182e830d25cd7db9d3e80f7c",
"text": "You should check with the Office of Student Affairs (or equivalent) at your University to see if you can accept Credit Cards. Many will only allow you to accept student organization dues paid in cash, check, or money order. Many universities will also provide your organization with basic operating funds, if you request it. Your first point of contact should be your faculty adviser, though. Your best bet would be to just use cash. Learn where the nearest ATMs are. If you are set on using credit cards, set up a PayPal account and just use it to reimburse the person who fronts the money (cover the markup). Everyone will have to have a PayPal account set up, linked to their credit card. You can avoid fees by using a bank account. If you're so inclined, you can set up a Business account and have a PayPal Debit Card, but you'll want to check with your adviser / University by-laws to see if you're allowed. Don't expect any of these to work as website implementations. As you're a University group, you will undoubtedly be meeting in person such that an exchange of cash/check/money order would be trivial In short, you'll need to check into the rules of your University. Credit cards generally carry processing fees, charged to the merchant, which (on its own) carries some tax implications.",
"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": "79c22338193a3f1a2c9fa3b0730fc78e",
"text": "As an F1 student, I have been investing (and occasionally buying and selling within few weeks) for several years, and I have never had problems (of course I report to IRS gains/losses every year at tax time). On the other hand, the officer in charge of foreign students at my school advised me to not run ads on a website and make a profit. So, it seems to me that investing is perfectly legit for a F1 student, as it's not considered a business activity. That's obviously my personal understanding, you may want to speak with an immigration attorney to be on the safe side.",
"title": ""
},
{
"docid": "67525a00d56b3e4c7396761c4f96f362",
"text": "Either approach will put a strain on your friendship, unless you are willing to treat it as a gift which may or may not be returned rather than a loan. I agree that paying it direct to the dealer (or giving her a check that is made out to the dealer) avoids the risk of the money getting sidetracked.",
"title": ""
},
{
"docid": "dc7fda7d3c5fb49456dd9db0fe564a1b",
"text": "I was in a similar (but not quite as bad situation) a couple years ago, and I had a stroke of luck that helped me, but your friend might be able to force a similar situation. My parents refused to take out the huge parent loan (understandably so), but my dad made enough money that I wasn't eligible for much aid. My stroke of luck came when they got divorced; I could refile my FAFSA with only one parent (using my mom with very little income), my aid shot through the roof and nearly covered my undergrad (this happened in California, I don't know if this works in other states). My advice for your friend would be to take the 6 units/part time job option, but do what she can to earn enough to pay her own rent/food/other bills. I think the requirement for filing as an independent is that you supply >50% of your own income. It won't kick in right away, but for next school year this would end up getting her a lot more money from the state/federal governments. For me it was enough to cover my school, food, rent, gas, car payment, and still have a little left over. (I don't know if this is still possible, and I know it doesn't work for graduate school, or if it applies to every state. It might be an option worth pursuing though)",
"title": ""
}
] |
fiqa
|
a4f630f76edf2d2870e11eb45b1729e4
|
Found Mistake on 2013 1120S Form
|
[
{
"docid": "7cd4bc1c1743be97be65b364924cfbaa",
"text": "\"I don't know if it's common or necessary to include capital stock as a liability? Yes, if you look at the title of the nonasset part of the balance sheet it actually is titled \"\"Liabilities and Shareholders' Equity\"\". Your capital stock is a component of Equity. This sounds like it was reported in a reasonable manner. \"\"$2,582 listed under Loans from Shareholders (Line 19).\"\" Did you have a basis issue with your distributions? That is did you take shareholder distributions more than your adjusted basis that you have been taxed on? I have seen the practice of considering distributions in excess of basis as short term loans to prevent the additional taxation of the excess distribution. Be careful when you adjust this entry, your balance sheet had to roll from one year to the next. You must have a reasonable transaction to substantiate the removal of the shareholder loan.\"",
"title": ""
}
] |
[
{
"docid": "eb83ca5442a18d421fab68113cd1df8b",
"text": "\"I doubt there is anything you can do to convince them you paid, outside of just talking to them, which it seems you already tried. These are the possibilities I can think of for how this happened: IMHO, the most likely scenario is #4. If 1 or 3 happened you'll never see your money again, but the other 3 possibilities leave open the option of the error being discovered in the future. My suggestion, if the copay is small, is to pay it again, ask for a receipt, and ask them to make a note in the system that you claim you already paid, and ask them to \"\"be on the look-out\"\" for any discrepancies in that amount. This way, (with a good amount of luck), if they find it or discover the error (from another customer asking about the credit, or an accounting cash surplus), they can refund it to you.\"",
"title": ""
},
{
"docid": "84016dea6a0bc566afa2c0dd291cd850",
"text": "\"What you should do is called \"\"re-characterization\"\". See the instructions for form 8606 for details (that is also the form to use to report the incident). See example 3: You made a contribution to a Roth IRA and later recharacterized part or all of it to a traditional IRA. Report the nondeductible traditional IRA portion, if any, on Form 8606, Part I. If you did not recharacterize the entire contribution, do not report the remaining Roth IRA portion of the contribution on Form 8606. Attach a statement to your return explaining the recharacterization. If the recharacterization occurred in 2012, include the amount transferred from the Roth IRA on Form 1040, line 15a; Form 1040A, line 11a; or Form 1040NR, line 16a. If the recharacterization occurred in 2013, report the amount transferred only in the attached statement, and not on your 2012 or 2013 tax return. You re-characterize it back to traditional IRA contribution, which will not be deductible. You then convert it back to a Roth IRA. Basically you end up at exactly the same place, except that if you already had some gains on that amount - you'll have to pay tax on them now (for the conversion, since because of the re-characterization, it will now be gains in a traditional IRA). You should of course contact your broker to do the re characterization (reassigning of the amount and its gains from a Roth IRA account to a traditional IRA account).\"",
"title": ""
},
{
"docid": "0f02d14b3b88c6a19f10f13209e2455d",
"text": "I've talked to several very experienced accountants that deal with startup shares, stock 83(b)'s, etc. weekly (based in SF, CA) as this issue would have had a massive impact on me. The most important part of filing an 83(b) is notifying the IRS within 30 days. The law requires the written notification within the 30 day window. Adding it to that years tax return is an IRS procedure. Forgetting to include a copy of that years tax return is apparently a common occurrence when no tax was owed (0 spread, you actually paid the FMV). And the accepted method to resolve this is to simply file a blank amendment for that years return and include the copy of the 83(b) election.",
"title": ""
},
{
"docid": "bf0330082ac65d66aa4934120480a8fe",
"text": "You need to give specific dates! In the United States, you have three years to file an amended tax return. https://www.irs.gov/uac/Newsroom/Ten-Facts-about-Amended-Tax-Returns Did the restaurant fail in 2012? If so, that's probably the year to take the loss. If you need to amend your 2012 return, which you filed in 2013, you should have until 2016 to file this. The exact date may be based on when you filed 2012 taxes!",
"title": ""
},
{
"docid": "09cb7679a6622307a4a0930d9926cce1",
"text": "I just want to point out something that seems to be generally true: If you are supposed to report something to the IRS, and you don't, the IRS will probably send you a letter assuming the maximum possible tax liability, and it's up to you to prove that scenario is incorrect. In your case you obviously owe no tax, but since you didn't report it, the IRS simply assumed that you do owe tax until you prove otherwise. You're one form away from fixing the issue. I have first hand experience that this is also true if you forget to report an HSA distribution. I received a letter considering my entire distribution as if it was for non eligible medical expenses. This made the amount taxable and had an additional 20% penalty to boot. Of course I have medical receipts for all of the distributions which makes them not taxable, and had I simply put the correct number on my return to begin with I wouldn't have had to fill out the additional form to correct my mistake.",
"title": ""
},
{
"docid": "973cfdc20978cd862876108bc3168cc6",
"text": "If the correction results in you owing them money, you typically just need to pay them the appropriate amount. I believe they charge back-dated interest on the amount if it was supposed to have been paid in the past, but if it's for this year's taxes then payment isn't due until the end of April and so interest would not apply. In some circumstances, they may apply fines or press charges for tax evasion, but only if they have reason to believe you intentionally/knowingly attempted to misrepresent your tax return in order to avoid paying taxes. You can challenge their decision to fine you, but you are considered guilty until proven innocent. Obviously that's the opposite for any criminal charges. The good news is, lots of people accidentally enter the wrong numbers and the CRA is aware of this and rarely takes action against them, other than making them pay what they owe. They have ways to look for suspicious behavior and differentiate that from innocent mistakes. So don't worry, you should be fine, not fined.",
"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": "96b8fbf19e0d9bba77b45d071ea95197",
"text": "\"Turbotax community had a similar question. They claim you just put it into \"\"Office Expense\"\". I never understood why there are so many categories when they are just summed up and subtracted from your income. How can you possibly get in trouble for putting something in a wrong column if the final tax liability doesn't change.\"",
"title": ""
},
{
"docid": "91284308cba499b85643f7b82623a40f",
"text": "Underwriting manager here. It's not a big deal. Call your processor or loan officer tomorrow to make sure it's been cleared. My guess is that the underwriter or loan officer noted the discrepancy and corrected it in their systems. You'll have to sign a updated 1003 and 4506T at closing with correct info. In other words...no biggie, no worries. Not a show stopper at all.",
"title": ""
},
{
"docid": "d1513d548321287b8b1ab7d6ac433981",
"text": "\"Buried on the IRS web site is the \"\"Fillable Forms Error Search Tool\"\". Rather than including an explanation of errors in the rejection email itself, you're expected to copy and paste the error email into this form, which gives more details about what's wrong. (Don't blame me; I didn't design it.) If I copy your error message in, here's the response I get: There is an error with the “primary taxpayer’s Date of Birth” in Step 2 Section 4. The date of birth that was entered does not match IRS records. Make sure you enter the correct birth date, in the correct format, in the correct space. Scroll down, and enter the current date (“Today’s date”). Today’s date is the day you intend to e-file the return again. Also, if you are making an electronic payment you must re-date that section. E-File your return. You say that you've already checked your birthday, so I don't know as this is particularly helpful. If you're confident that it's correct and in the right place, I think your next step needs to be contacting the IRS directly. They have a link at the bottom of the error lookup response on how to contact them specifically about their solution not working, or you could try contacting your local IRS office or giving them a call.\"",
"title": ""
},
{
"docid": "d42df4b19921edac9589e2d0d8ad984a",
"text": "\"The FTB, as any government agency, is understaffed and underpaid. Even if someone took a glance and it wasn't just an automated letter - consider the situation: you filed as a LLC and then amended to file as a partnership. Unless someone really pays attention - the obvious assumption would be that you had a limited partnership. Yes, you'll need to call them and work with them on fixing this. They do have all the statements you've attached. However, there's a lot of automation and very little attention to details when it comes to matching errors, so don't get surprised if no-one even looked at these statements. Next time your elected government officials talk about \"\"small government\"\" and \"\"cutting government expenses\"\" - you can remind yourself how it looks in action with this experience.\"",
"title": ""
},
{
"docid": "b240c8733992c78e273ab69c01482f22",
"text": "\"If she reported the income on the business return, I'd treat this as a \"\"mail audit\"\". Try to get a clear statement from Square confirming what they reported, under which SSN/EIN, for what transactions. Make a copy of that. If at all possible, get them to send a letter to the IRS (copy to you) acknowledging that they reported it under the wrong number. Copy the IRS's letter. Square's letter, and both personal and business 2012 returns. Write a (signed) cover letter explaining what had happened and pointing out the specific line in the business return which corresponded to the disputed amount, so they can see that you did report it properly and did pay taxes on it as business income. End that letter with a request for advice on how to straighten this out. Certified-mail the whole package back to the IRS at whatever address the advisory letter gives. At worst, I'm guessing, they'll tell you to refile both returns for 2012 with that income moved over from the business return to the personal return, which will make everything match their records. But with all of this documentation in one place, they may be able to simply accept that Square misreported it and correct their files. Good luck. The IRS really isn't as unreasonable as people claim; if you can clearly document that you were trying to do the right thing, they try not to penalize folks unnecessarily.\"",
"title": ""
},
{
"docid": "cd95509e847580c275bb372e84f35c71",
"text": "An amended return is required for situations that impact tax owed, or your tax refund. 8606 purpose is to track non-deducted IRA deposits. I'd recommend you gather all your returns to form a paper trail, and when filing your 2016 return, show a proper 8606 as if you'd tracked it all along.",
"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": "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": ""
}
] |
fiqa
|
8ca428efac9f28da47f4585c98fecad3
|
Does dividend on 401K have any effect on gains
|
[
{
"docid": "5706f44f1804fb9fdef2c7144dcbfe14",
"text": "Adjusting for a market change from day to day, the dividend should have no impact on you. Your X shares time $Y should be nearly identical right after that dividend hits the account. And within the 401(k) or IRA for that matter, the accounting doesn't matter most of the time. Outside a retirement account, you need to pay tax on the dividend, and add the newly purchased shares' cost to your cost basis.",
"title": ""
},
{
"docid": "967939d545acf068b4f7f063cfff75ee",
"text": "It appears from your description that the 401k account has the automatic dividend reinvestment policy, and that the end result is exactly the same as the external account with the same policy. I.e.: no difference, the dividend affected the 401k account in exactly the same way it affected the external account. The only thing is that for external account you can take the dividend distribution, while for 401k you cannot - it is reinvested automatically. Were you expecting something else?",
"title": ""
}
] |
[
{
"docid": "baebd309ec2e588da4ec6750b375502a",
"text": "If the gift was stock that they have owned for years there can be one hitch: The basis of the stock doesn't reset when it is gifted. For example if grandparents have owned stock that is currently worth $10,000 today, but they bought it decades ago when it only cost them $1,000; then if the new owner sells it today they will have a gain of $9,000. The clock to determine short term/long term also doesn't reset; which is good. The basis needs to be determined now so that the gain can be accurately calculated in the future. This information should be stored in a safe place. Gains for dividends are investment income and the rules regarding the kiddie tax need to be followed.",
"title": ""
},
{
"docid": "3aeb17bf4b73d0f13117216075ec7f99",
"text": "\"What you are describing is a very specific case of the more general principle of how dividend payments work. Broadly speaking, if you own common shares in a corporation, you are a part owner of that corporation; you have the right to a % of all of that corporation's assets. The value in having that right is ultimately because the corporation will pay you dividends while it operates, and perhaps a final dividend when it liquidates at the end of its life. This is why your shares have value - because they give you ownership of the business itself. Now, assume you own 1k shares in a company with 100M shares, worth a total of $5B. You own 0.001% of the company, and each of your shares is worth $50; the total value of all your shares is $50k. Assume further that the value of the company includes $1B in cash. If the company pays out a dividend of $1B, it will now be only worth $4B. Your shares have just gone down in value by 20%! But, you have a right to 0.001% of the dividend, which equals a $10k cash payment to you. Your personal holdings are now $40k worth of shares, plus $10k in cash. Except for taxes, financial theory states that whether a corporation pays a dividend or not should not impact the value to the individual shareholder. The difference between a regular corporation and a mutual fund, is that the mutual fund is actually a pool of various investments, and it reports a breakdown of that pool to you in a different way. If you own shares directly in a corporation, the dividends you receive are called 'dividends', even if you bought them 1 minute before the ex-dividend date. But a payment from a mutual fund can be divided between, for example, a flow through of dividends, interest, or a return of capital. If you 'looked inside' your mutual fund you when you bought it, you would see that 40% of its value comes from stock A, 20% comes from stock B, etc etc., including maybe 1% of the value coming from a pile of cash the fund owns at the time you bought your units. In theory the mutual fund could set aside the cash it holds for current owners only, but then it would need to track everyone's cash-ownership on an individual basis, and there would be thousands of different 'unit classes' based on timing. For simplicity, the mutual fund just says \"\"yes, when you bought $50k in units, we were 1/3 of the year towards paying out a $10k dividend. So of that $10k dividend, $3,333k of it is assumed to have been cash at the time you bought your shares. Instead of being an actual 'dividend', it is simply a return of capital.\"\" By doing this, the mutual fund is able to pay you your owed dividend [otherwise you would still have the same number of units but no cash, meaning you would lose overall value], without forcing you to be taxed on that payment. If the mutual fund didn't do this separate reporting, you would have paid $50k to buy $46,667k of shares and $3,333k of cash, and then you would have paid tax on that cash when it was returned to you. Note that this does not \"\"falsely exaggerate the investment return\"\", because a return of capital is not earnings; that's why it is reported separately. Note that a 'close-ended fund' is not a mutual fund, it is actually a single corporation. You own units in a mutual fund, giving you the rights to a proportion of all the fund's various investments. You own shares in a close-ended fund, just as you would own shares in any other corporation. The mutual fund passes along the interest, dividends, etc. from its investments on to you; the close-ended fund may pay dividends directly to its shareholders, based on its own internal dividend policy.\"",
"title": ""
},
{
"docid": "e05a30c4c2dd0cf27738493f5d1a2b47",
"text": "This investment strategy may have tax advantages. In some countries, income received from dividends is taxed as income, whereas profits on share trades are capital gains. If you have already exceeded your tax-free income limit for the year, but not your capital gains tax allowance, it may be preferable to make a dealing profit rather than an investment income. These arrangements are called a bed-and-breakfast.",
"title": ""
},
{
"docid": "04cfc11786b1d6c8709679a6c244060f",
"text": "Assuming that you have capital gains, you can expect to have to pay taxes on them. It might be short term, or long term capital gains. If you specify exactly which shares to sell, it is possible to sell mostly losers, thus reducing or eliminating capital gains. There are separate rules for 401K and other retirement programs regarding down payments for a house. This leads to many other issues such as the hit your retirement will take.",
"title": ""
},
{
"docid": "bf0c9b4874c0abd6793911216f8c490b",
"text": "A one year period of study - Stock A trades at $100, and doesn't increase in value, but has $10 in dividends over the period. Stock B starts at $100, no dividend, and ends at $105. However you account for this, it would be incorrect to ignore stock A's 10% return over the period. To flip to a real example, MoneyChimp shows the S&P return from Jan 1980 to Dec 2012 as +3264% yet, the index only rose from 107.94 to 1426.19 or +1221%. The error expands with greater time and larger dividends involved, a good analysis won't ignore any dividends or splits.",
"title": ""
},
{
"docid": "44184c00cbd94460bf209764ec58eb77",
"text": "The 401K match has limits, but it is not taxable until you withdraw the money from the account. You can think of it as an initial lump of interest or gain. When you leave the company you are allowed to keep it, if you are vested. You can then roll it over into a IRA, or another 401K. When you withdraw money in retirement you will pay taxes on the match and all the gains from the match. Taxes on what you contribute will depend on if it was pre-tax or post-tax, or if it was deposited into a Roth IRA. The amount you deposit pretax is noted on the W-2, which you attach to the 1040 form. The company match does not appear anywhere on the w-2 or 1040. It should show on your 401-K statements. Those statements should also tell you how much of the match has been vested.",
"title": ""
},
{
"docid": "b6be831b52115cf6dcbf224d2b4ed272",
"text": "Dividends from mutual funds reduce the share value the day they are distributed. Mutual funds do this at least once a year, or more times in the year if there are a lot of gains, to pass through taxable gains to individuals who may have lower tax rates or deferred tax accounts such as you. This is meaningful for investors who hold the mutual funds in taxable accounts, but immaterial for 401ks. Your account balance is not affected if you don't get the distribution before roll over.",
"title": ""
},
{
"docid": "c772cc6fb25dccd387632c21421ae664",
"text": "Incorrect. Dividends are paid after tax, so whether they pay them or not has nothing to do with tax avoidance. Additionally, dividends have little to no impact on the market cap of a company like amazon. On top of all of that, amazon does not pay dividends at all, they invest their cash back into themselves to grow. This strategy reduces profit, and the growth drives up their market cap and drives down their cost of capital as a result.",
"title": ""
},
{
"docid": "d1f1d37b45d53d66203be41d788dcd70",
"text": "\"Your employer sends the money that you choose to contribute, plus employer match if any, to the administrator of the 401k plan who invests the money as you have directed, choosing between the alternatives offered by the administrator. Typically, the alternatives are several different mutual funds with different investment styles, e.g. a S&P 500 index fund, a bond fund, a money-market fund, etc. Now, a statement such as \"\"I see my 401k is up 10%\"\" is meaningless unless you tell us how you are making the comparison. For example, if you have just started employment and $200 goes into your 401k each month and is invested in a money-market fund (these are paying close to 0% interest these days), then your 11th contribution increases your 401k from $2000 to $2200 and your 401k is \"\"up 10%\"\". More generally, suppose for simplicity that all the 401k investment is in just one (stock) mutual fund and that you own 100 shares of the fund as of right now. Suppose also that your next contribution will not occur for three weeks when you get your next paycheck, at which time additional shares of the mutual fund will be purchased Now, the value of the mutual fund shares (often referred to as net asset value or NAV) fluctuates as stock prices rise and fall, and so the 401k balance = number of shares times NAV changes in accordance with these fluctuations. So, if the NAV increases by 10% in the next two weeks, your 401k balance will have increased by 10%. But you still own only 100 shares of the mutual fund. You cannot use the 10% increase in value to buy more shares in the mutual fund because there is no money to pay for the additional shares you wish to purchase. Notice that there is no point selling some of the shares (at the 10% higher NAV) to get cash because you will be purchasing shares at the higher NAV too. You could, of course, sell shares of the stock mutual fund at the higher NAV and buy shares of some other fund available to you in the 401k plan. One advantage of doing this inside the 401k plan is that you don't have to pay taxes (now) on the 10% gain that you have made on the sale. Outside tax-deferred plans such as 401k and IRA plans, such gains would be taxable in the year of the sale. But note that selling the shares of the stock fund and buying something else indicates that you believe that the NAV of your stock mutual fund is unlikely to increase any further in the near future. A third possibility for your 401k being up by 10% is that the mutual fund paid a dividend or made a capital gains distribution in the two week period that we are discussing. The NAV falls when such events occur, but if you have chosen to reinvest the dividends and capital gains, then the number of shares that you own goes up. With the same example as before, the NAV goes up 10% in two weeks at which time a capital gains distribution occurs, and so the NAV falls back to where it was before. So, before the capital gains distribution, you owned 100 shares at $10 NAV which went up to $11 NAV (10% increase in NAV) for a net increase in 401k balance from $1000 to $1100. The mutual fund distributes capital gains in the amount of $1 per share sending the NAV back to $10, but you take the $100 distribution and plow it back into the mutual fund, purchasing 10 shares at the new $10 NAV. So now you own 110 shares at $10 NAV (no net change in price in two weeks) but your 401k balance is $1100, same as it was before the capital gains distribution and you are up 10%. Or, you could have chosen to invest the distributions into, say, a bond fund available in your 401k plan and still be up 10%, with no change in your stock fund holding, but a new investment of $100 in a bond fund. So, being up 10% can mean different things and does not necessarily mean that the \"\"return\"\" can be used to buy more shares.\"",
"title": ""
},
{
"docid": "121edf3d8a3f22f0b630255cff814807",
"text": "Is that basically it? Trading off between withdrawing-anytime vs paying-capital-gain-tax? No. Another significant factor is dividends. In an IRA they incur no immediate tax and can be reinvested. This causes the account value to compound over the years. Historically, this compounding of dividends provides about half of the total return on investments. In a non-IRA account you have to pay taxes each year on all dividends received, whether you reinvest them or not. So outside of an IRA you have a tax drag on both capital gains and dividends.",
"title": ""
},
{
"docid": "34e9eb559c461f6104848e1b2cd80ba7",
"text": "Indices such as SP500 are typically including dividends - the payment of dividends doesn't impact the value of the index. Where can I find data on these dividends? I found data on dividend yields, but these give me access only to the sum of dividends over the last year. This in turn can change either because there are new dividends being paid, or because you stop counting last year's dividends...",
"title": ""
},
{
"docid": "7c4e586ff0130e9e3fbab06b0e51fd03",
"text": "Post-tax (i.e. non-retirement account) investing is nothing to ignore. You don't mention a spouse, so for a start, you still have the $5500 to put in an IRA. The remaining investment funds will earn dividends, if any, at a tax preferred rate, and then the gain on sale will be taxed at 15% if the code doesn't change again. The gains accumulate tax deferred, and you control the timing of the sale. With a 401(k) all withdrawal are taxable as income. In your case, just the gain is taxed at a potential long term cap gain rate. Hopefully the new job pays more than the old one and the loss of 401(k) is compensated.",
"title": ""
},
{
"docid": "07840ca3531beffb6cc1cd5266218a0c",
"text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"",
"title": ""
},
{
"docid": "ef5f93bc5a831258afd86f1561b402ba",
"text": "\"The difference between dividend and growth in mutual funds has to do with the types of stocks the mutual fund invests in. Typically a company in the early stages are considered growth investments. In this phase the company needs to keep most of its profits to reinvest in the business. Typically once a company gets a significant size the company's growth prospects are not as good so the company pays some of its profits in the form of a dividend to the shareholders. As far as which is the best buy is totally a personal choice. There will be times when one is better then the other. Most likely you will want to \"\"diversify\"\" and invest in both types.\"",
"title": ""
},
{
"docid": "2c795c7c2cfbf1ff387c2264e0efaba4",
"text": "First of all, there are some differences between the retirement accounts that you mentioned regarding taxes. Traditional IRA and 401(k) accounts allow you to make pre-tax contributions, giving you an immediate tax deduction when you contribute. Roth IRA, Roth 401(k) are funded with after tax money, and a non-retirement account is, of course, also funded with after tax money. So if you are looking for the immediate tax deduction, this is a point in favor of the retirement accounts. Roth IRA & Roth 401(k) accounts allow the investment to grow tax-free, which means that the growth is not taxed, even when taking the investment out at retirement. With Traditional IRA and 401(k) accounts, you need to pay tax on the gains realized in the account when you withdraw the money, just as you do with a non-retirement account. This is a point in favor of the Roth retirement accounts. To answer your question about capital gains, yes, it is true that you do not have a capital gain until an investment is sold. So, discounting the contribution tax deductions of the retirement accounts, if you only bought individual stocks that never paid a dividend, and never sold them until retirement, you are correct that it really wouldn't matter if you had it in a regular brokerage account or in a traditional IRA. However, even people dedicated to buy-and-hold rarely actually buy only individual stocks and hold them for 30 years. There are several different circumstances that will generally happen in the time between now and when you want to withdraw the money in retirement that would be taxable events if you are not in a retirement account: If you sell an investment and buy a different one, the gains would be taxable. If you want to rebalance your holdings, this also involves selling a portion of your investments. For example, if you want to maintain an 80% stock/20% bond ratio, and your stock values have gone up to 90%, you might want to sell some stock and buy bonds. Or if you are getting closer to retirement, you might decide to go with a higher percentage of bonds. This would trigger capital gains. Inside a mutual fund, anytime the management sells investments inside the fund and realizes capital gains, these gains are passed on to the investors, and are taxable. (This happens more often with managed funds than index funds, but still happens occasionally with index funds.) Dividends earned by the investments are taxable. Any of these events in a non-retirement account would trigger taxes that need to be paid immediately, even if you don't withdraw a cent from your account.",
"title": ""
}
] |
fiqa
|
b7ff5fcebd6148a70b4d5327187506d8
|
Why an inner suburbs small apartment considered a risky investment
|
[
{
"docid": "219825e9f65a262e7eeab06b83097b17",
"text": "The banks see small apartments as a higher risk because usually very small apartments are harder to sell, especially during a falling market when there is an oversupply of these apartments. The price of small apartments will also fall a lot quicker in a falling market. Regarding yield vs capital growth - the emphasis here is manly on high yielding properties in small country towns with small populations. How many properties can you buy with cash? Properties with good growth will enable you to build equity quicker and enable you to build a larger portfolio. In my opinion you need a combination of good yield and reasonable growth, because without yield you cannot replace your earned income with passive income, but without growth you can't expand your portfolio. So a combination of good yield with reasonable growth will give the best outcome.",
"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": "52dfd7c00f4651032be5d7f3fdf3a5a6",
"text": "Kiyosaki says his methods of actions are not suitable for the average investor. They are meant for those wanting to excel at investing, and are willing to work for it. Personally, I wouldn't want to own ten apartments, because it sounds like a terrible headache. I would much rather have a huge portfolio of index funds. I believe that Kiyosaki's method allegedly perform better than the passive 'invest-diversify-hold' strategy, but would require a new mindset and dedication, and are risky unless you are willing to invest a lot of time learning the fine details. I prefer to dedicate my time elsewhere.",
"title": ""
},
{
"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": "9bf6f4f6b37e19854675b9535de8de01",
"text": "\"Historically that 'divide by 1000' rule of thumb is what many people in Australia have thought of as normal, and yes, it's about a 5.2% gross yield. Net of expenses, perhaps 3-4%, without allowing for interest. If you're comparing this to shares, I think the right comparison is to the dividend yield, not to the overall PE. A dividend yield of about 3-5% is also about typical: if you look at the Vanguard Index Australian Shares Fund as a proxy for the ASX the yield last year was about 4%. Obviously a 4% return is not very competitive with a term deposit. But with both shares and housing you can hope for some capital growth in addition to the income yield. If you get 4% rental yield plus 5% growth it is more attractive. Is it \"\"good\"\" to buy at what people have historically thought was \"\"normal\"\"? Perhaps you are better off looking around, or sitting out, until you find a much better price than normal. \"\"Is 5% actually historically normal?\"\" deserves a longer answer.\"",
"title": ""
},
{
"docid": "09e78ce34f595a619c5e4668338748ef",
"text": "\"Leverage means you can make more investments with the same amount of money. In the case of rental properties, it means you can own more properties and generate more rents. You exchange a higher cost of doing business (higher interest fees) and a higher risk of total failure, for a larger number of rents and thus higher potential earnings. As with any investment advice, whenever someone tells you \"\"Do X and you are guaranteed to make more money\"\", unless you are a printer of money that is not entirely true. In this case, taking more leverage exposes you to more risk, while giving you more potential gain. That risk is not only on the selling front; in fact, for most small property owners, the risk is primarily that you will have periods of time of higher expense or lower income. These can come in several ways: If you weather these and similar problems, then you will stand to make more money using higher leverage, assuming you make more money from each property than your additional interest costs. As long as you're making any money on your properties this is likely (as interest rates are very low right now), but making any money at all (above and beyond the sale value) may be challenging early on. These sorts of risks are magnified for your first few years, until you've built up a significant reserve to keep your business afloat in downturns. And of course, any money in a reserve is money you're not leveraging for new property acquisition - the very same trade-off. And while you may be able to sell one or more properties if you did end up in a temporarily bad situation, you also may run into 2008 again and be unable to do so.\"",
"title": ""
},
{
"docid": "04222a44c6726ee87bd6ae80436e1e2e",
"text": "Before investing, absolutely follow the advice in mbhunter's answer. There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk. This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you. To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds. Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio. A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios.",
"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": "25642445db62867fabedea609cea9f71",
"text": "Long-term bonds -- any bonds, really -- can be risky for two main reasons: return on principal, or return of principal. The former is a problem if interest rates are low (which they are now in the US) because existing bonds will fall in price if interest rates rise. The second is a problem if the lender defaults: IOU nothing. No investment is riskless. Short-term bonds command a lower interest rate than long-term bonds (usually) because of their quicker maturity, but short-term bonds carry risk just like long-term bonds (though the interest rate risk is lower, sometimes quite a bit lower, than for long-term bonds).",
"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": "0b74ae43593376c509c0450f1ca4c0e7",
"text": "A good quick filter to see if a property is worth looking at is if the total rent for the property for the year is equal to 10% of the price of the property. For example, if the property is valued at $400,000 then the rent collected should be $40,000 for the entire year. Which is $3,333.33 per month. If the property does not bring in at least 10% per year then it is not likely all the payments can be covered on the property. It's more likely to be sinking money into it to keep it afloat. You would be exactly right, as you have to figure in insurance, utilities, taxes, maintenance/repair, mortgage payments, (new roof, new furnace, etc), drywall, paint, etc. Also as a good rule of thumb, expect a vacancy rate of at least 10% (or 1 month) per year as a precaution. If you have money sitting around, look into Real Estate Investment Trusts. IIRC, the average dividend was north of 10% last year. That is all money that comes back to you. I'm not sure what the tax implications are in Australia, however in Canada dividends are taxed very favourably. No mortgage, property tax, tenants to find, or maintenance either.",
"title": ""
},
{
"docid": "be18dd25573348ca2dd5f1fd1b884d88",
"text": "Diversification is just one aspect in an investment portfolio. The other aspects in Investment are Risk Taking Ability, Liquidity, Local Regulations, Tax benefits, Ease & Convenience, Cost of carrying out transactions etc. Investing in other regions is prone FX risk and other risks depending on the region of investment. For example investing in Emerging markets there is a risk of Local Regulations being changed, additional tax being levied, or Political instability and host of such risks. Investing in local markets give you better understanding of such changes and the risk associated is less plus the Ease of carrying out transactions is great, less expensive compared to cost of transactions in other markets. Diversification in Investment should also be looked upon how much you invest in; Equities Debt Bullion Real Estate Once you have a sizeable amount of investment in Equities or Debt, it would then make more sense to diversify this portion more to include funds from other regions. Unless you are an Running your own business, it makes sense to invest in your line of business if that is performing well. The reason being that the benefit / returns from the equities is much greater than the salary rise / bonus. For example I am in Information Technology and yet invest in all leading IT companies because the returns from companies in these segments have been good.",
"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": "3bd43884a9d185524af6a2230f569e8c",
"text": "Your question may have another clue. You are bullish regarding the real estate market. Is that for your city, your state, your nation or for the whole world? Unless you can identify particular properties or neighborhoods that are expected to be better than the average return for your expected bull market in real estate, you will be taking a huge risk. It would be the same as believing that stocks are about to enter a bull market, but then wanting to put 50% of your wealth on one stock. The YTD for the DOW is ~+7%, yet 13 of the 30 have not reached the average increase including 4 that are down more than 7%. Being bullish about the real estate segment still gives you plenty of opportunities to invest. You can invest directly in the REIT or you can invest in the companies that will grow because of the bullish conditions. If your opinion changes in a few years it is hard to short a single property.",
"title": ""
},
{
"docid": "0ce624b0a62f54657bca647d8d3f3c8e",
"text": "The safest place to put money is a mixture of cash, local municipal bond funds with average durations under two years and US Treasury bond funds with short durations. Examples of good short term US municipal funds: I'm not an active investor in Australian securities, so I won't recommend anything specific. Because rates are so low right now, you want a short duration (ie. funds where the average bond matures in < 2 years) fund to protect against increased rates. The problem with safety is that you won't make any money. If your goal to grow the value of your investment while minimizing risk, you need to look at equities. The portfolios posted by justkt are a great place to start.",
"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": ""
}
] |
fiqa
|
7b7d970d131673c27d0acadf293fa63e
|
Might it make sense not to look into debt that is in collections?
|
[
{
"docid": "3db0d0ba092eee579c691904d37ebdca",
"text": "\"It's your business to pay what you owe but it's not your business to determine what you owe. The \"\"Fair Debt Collections Practices act\"\" FDCPA proscribes certain steps creditors must go through to contact you. You appear to not have received any active contact or demand, but you can still cite the FDCPA to make it their problem. Write to the creditor's address (I assume its the hospital, the OP isn't clear), use USPS Certified Mail Return Receipt Requested, asking them to validate that you owe this debt by mail in 5 days, as is your right under the FDCPA. If they get back to you and you agree (or its reasonably plausible) you do owe it, pay it especially if it's on the order of $100. At least you will know it is settled at the source. Cross reference to your insurance claims to be sure its not double billed or a miscredited copay, but you may see many legit separate charges from one ER visit (hospital, doctor, anesthesiologist, etc) and it would not be the first time a medical billing system crapped the bed. If you don't hear anything after a few weeks, use the credit report protest process (or write to them, cc: the Federal Trade Commission) contesting the validity of this report. The creditor did not respond to your FDCPA request for validation (copy of the Return Receipt); and you otherwise believe you are current with the hospital. Per the Fair Credit Reporting act, they must investigate. Fight bureaucratic fire with fire: conduct all business by mail, and make liberal use of certified mail return receipts. Its a $6 way to telegraph you know that they have specific federal law timeliness requirements; and you have a federal timestamp signed by someone in their organization.\"",
"title": ""
}
] |
[
{
"docid": "141eafddbda39e17d4fc29f187dd72dc",
"text": "\"The word \"\"good\"\" was used in contrast to \"\"bad\"\" but these words are misused here. There are three kinds of debt: Debt for spending. Never go into debt to buy consumables, go out for a good time, for vacations, or other purchases with no lasting financial value. Debt for depreciating assets, such as cars and sometimes things like furniture. There are those who put this in the same category as the first, but I know many people who can budget a car payment and pay it off during the life of the car. In a sense, they are renting their car and paying interest while doing so. Debt for appreciating, money-making assets. Mortgage and student loans are both often put into the good category. The house is the one purchase that, in theory, provides an immediate return. You know what it saves you on the rent. You know what it costs you, after tax. If someone pays 20% of their income toward their fixed rate mortgage, and they'd otherwise be paying 25% to rent, and long term the house will keep up with inflation, it's not bad in the sense that they need to aggressively get rid of it. Student loans are riskier in that the return is not at all guaranteed. I think that one has to be careful not to graduate with such a loan burden that they start their life under a black cloud. Paying 10% of your income for 10 years is pretty crazy, but some are in that position. Finally, some people consider all debt as bad debt, live beneath their means to be debt free as soon as they can, and avoid borrowing money.\"",
"title": ""
},
{
"docid": "ecc38e79051f713a9050061432e7c22c",
"text": "\"Here is the discussion: https://www.reddit.com/r/personalfinance/comments/6gsvgh/the_supreme_court_has_decided_that_the_fair_debt/ Yes, but the discussion was that this allows for many loopholes where an outside firm can be hired for collections, which can then go back to using tactics like the old dark days. ...also fyi - I assume in your comment above you meant \"\"owned\"\" not \"\"owed\"\"...\"",
"title": ""
},
{
"docid": "5b4b0552f208a8adb74cb11b233821f4",
"text": "\"In addition to dpassage's excellent advice on dealing with your debt in the most efficient manner, you may also want to consider Consumer Credit Counseling Services (CCCS). These are non-profit agencies (free or low-cost) that can work with you and your creditors to come up with payment plans and sometimes negotiate lower interest rates to help you get out from under the debt. You should definitely avoid for-profit \"\"debt consolidation\"\" companies, but the National Foundation for Credit Counseling can refer you to non-profit services in your area.\"",
"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": "f56ea82cfd41bbaf3e175e705bb35301",
"text": "\"what are the incentives to that person to actually pay off his/her debt as opposed to just walking away from it and relying on the cash (s)he has for the future spending needs as opposed to borrowing Well, you can't just \"\"walk away\"\" from debt - you still owe it. Eventually your creditors would end up suing you in court for the money, plus interest owed. I suppose you could try to continually duck the authorities, but you'd still owe the money legally.\"",
"title": ""
},
{
"docid": "419ad6232fd4f86fa4f9ae3da5226128",
"text": "\"In some cases, it might be rational to pay low-interest debt first, because the consequences of defaulting on that debt are worse. Consider this simplified example. Suppose you have two debts: a low-interest mortgage, secured by your house, and a high-interest unsecured credit card debt, both of which are within a few years of being paid off. There is a chance that sometime between now and then, something will happen to disrupt your income (e.g. medical problems), and it won't be possible to make the payments on either loan. Defaulting on the credit card loan will result in a lower credit score and calls from collection agencies. Defaulting on the mortgage will result in the foreclosure or forced sale of your house, at best forcing you to move, and at worst leaving you homeless, at a time when you are also facing other (e.g. medical) problems. So you might rationally judge that losing your house is much worse than bad credit. Therefore, you might rationally conclude that it would be better to direct extra income toward paying down the mortgage, to increase the chances that, if and when an income disruption might occur, the mortgage would already be paid off. In other words, you shorten the window of time where income disruption results in foreclosure. You might decide that this increased security is worth the extra interest you will pay, compared to the strategy where you pay the high-interest loan first. This is a fairly special situation, but you asked \"\"Why might it be a good idea to do this?\"\", and I am just giving an example where it could rationally be considered a good idea. (Of course, in a real-life version of this example, there might be other options available, such as refinancing the mortgage. If you like, you could imagine a more extreme example where the lower-interest debt is owed to Joey Knuckles the loanshark, who will come and break your kneecaps if you miss a payment.)\"",
"title": ""
},
{
"docid": "caf5a078744cc54a81030ae60317e94b",
"text": "\"Would it make sense to take a loan from a relative... Other people have pointed this out, but honestly, I'd be very reluctant to answer \"\"yes\"\" to this no matter how you completed that sentence. There's always an intangible risk to mixing money and relationships. There's a lot that can go wrong during the duration of the loan, and if it does, the consequences could be a lot greater than just a bad credit score.\"",
"title": ""
},
{
"docid": "bc3fac15e2f8646c244551e0b846d17b",
"text": "\"Your main reason to not pay off your debts right now seems to be: Enjoy life while \"\"I am young\"\" and not miss opportunities to have fun? I think the good news is that having fun usually does not require spending a lot of money. I would propose that most of the times when we considered something fun it had more to do with who we were with than what we were actually doing. Of course there are many fun things that are expensive, but there are even more fun things that require little money at all. My suggestion to you would be to prioritize your debt in a responsible way such that you have a plan to pay it off quickly, but if something comes along that does require extra money, don't be afraid to make an adjustment. For example, you can try to put 2000€ towards your debt every month, but if some exciting adventure comes along that you really want to do and it costs 1000€ one month, you shouldn't feel like you absolutely must turn it down. That month you could put 1000€ towards debt and the other 1000€ towards the adventure. I wouldn't recommend taking an adventure every month, but I wouldn't always turn one down either. Besides, I think most of the time you can have lots of fun for free.\"",
"title": ""
},
{
"docid": "ca6de9ea271a66d6bf24f1c313723077",
"text": "If you tell the collector that the claim isn't valid, they're obliged to go back to the creditor to verify it. Sometimes that gets a real person, instead of their automatic billing system, to look at the claim, and if you're right, they'll drop it.",
"title": ""
},
{
"docid": "0aeb0bb4b3bbbee25c09f14be0a80f01",
"text": "Even assuming you were reading the balance sheet correctly it means nothing. What banks mostly care about is cash flow. Do they have enough extra money to make the payments on whatever they borrow? I have never had a credit card company ask me about assets--they don't care. They care about income with which to pay the credit card bill. Have a solid record of paying your bills and enough income to pay back what you are trying to borrow and you'll have an excellent credit rating no matter what your net worth. Whether you are one person or a megacorporation makes no difference.",
"title": ""
},
{
"docid": "162ef645bed4bd15997a86978699716f",
"text": "I would sit down with the creditors and negotiate smallest amount you can get before agreeing with whatever you have to pay. Think that, for them, it's much more convenient to get way less than $36K than to see you in collections. Needless to say, don't tell them you have to money to cancel off :-)",
"title": ""
},
{
"docid": "5544a1375dd2e68b18c6db81dfdc5c5f",
"text": "If the price had dropped to $4 from $50, and you had $5000 to start with on your account, you will be left with $400 in your account if you closed the position now. So you would not be in debt if this was the only possition you had open.",
"title": ""
},
{
"docid": "62f39baa2450b442da29dd911a7f77dc",
"text": "I think you've made a perfectly valid suggestion, and, if your son is struggling somewhat financially now, one that may be very welcome. If you agree to forgive the debt at this time in lieu of a similar amount forgone in future inheritance, it will eliminate the never ending interest-only payments, free up $200+ a month for you son on a tight budget, and improve your own credit score once you pay off the credit line. It's also, in my opinion, a good idea to be open about this in advance with your other children heirs so that everyone will understand what is expected during the eventual probate. My paternal grandfather was the recipient of a great deal of financial largess from his wealthy mother during her life, and it was fully understood by him, her, and his siblings, that in exchange he would not share in her estate when she passed. He didn't, there were no problems, and he and his siblings stayed close for the rest of their lives.",
"title": ""
},
{
"docid": "3a63d03786cd064808fb119a8a7f559e",
"text": "\"You should hire a lawyer. The fact that they told you your personal information shows that they actually had it, and are not imposters, which is a good thing. The fact that they mislead you means that their intentions are not pure (which is not surprising coming from a collection agency of course). When dealing with collections (or any matter of significance for that matter), don't rely on their recording of the call, because they can always conveniently lose it. Make sure to write down every single detail discussed, including the date and time of the call, and the ID/name of the person on the other side. If possible - make your own recording (notifying them of it of course). It's too late to record the calls now, but do try to reconstruct as much information as possible to provide to your lawyer to deal with it. In the end of the day they will either provide you with the recording (and then you might be surprised to hear that what they said was not in fact what you thought they said, and it was just your wishful thinking, it is very possible to be indeed the case), or claim \"\"we lost it\"\" and then it will be a problem to either of you to prove who said what, but they'll have the better hand (having better lawyers) in convincing the court that you're the one trying to avoid paying your debts. That is why proper representation at all stages is important. As to the bankruptcy - it won't help for student loans, student loans is one of the very few types of debts you can't really run away from. You have to solve this, the sooner the better. Get a professional advice. For the future (and for the other readers) - you should have gotten the professional advice before defaulting on these loans, and certainly after the first call.\"",
"title": ""
},
{
"docid": "3d4199c0128572c50ece971a7a9078e1",
"text": "\"If you're looking for an analogy or exercise, I saw a personal finance show that had people climb stairs, with the debt as weight. Every flight of stairs more \"\"interest\"\" and loans to cover income gaps have to be added to the total debt they carry up the stairs. Can't find the video online though. But I think you need to ask your brother what he thinks his problem is, that will be solved with more loans. It's likely that your brother's problem can't be solved with advice. Since he's not spending rationally, rational arguments have no sway. I suspect he'll tell you his problem is one or two angry creditors, perhaps even ones you don't know about, rather than a fundamental imbalance between income and expenses. Robbing Peter to pay Paul, or moving weights from one backpack compartment to another, doesn't solve the underlying problems. Whatever you do, another loan from you should be off the table. He's an adult now, with problems the size of which you can't help with. We both know how his story ends: all creditors cut him off, and he's in court over garnished wages and creditors fighting over his assets. Reality is the only argument that will have any sway. He's far too personally invested in his scheme to admit defeat, which is why neither words not images nor moving pictures will help him with this learning disability.\"",
"title": ""
}
] |
fiqa
|
95ffe7040083833b3298e95855234934
|
What do I need to do to form an LLC?
|
[
{
"docid": "fd5be2826839269830e2c39aba971b96",
"text": "I know that there are a lot service on the internet helping to form an LLC online with a fee around $49. Is it neccessarry to pay them to have an LLC or I can do that myself? No, you can do it yourself. The $49 is for your convenience, but there's nothing they can do that you wouldn't be able to do on your own. What I need to know and what I need to do before forming an LLC? You need to know that LLC is a legal structure that is designed to provide legal protections. As such, it is prudent to talk to a legal adviser, i.e.: a Virginia-licensed attorney. Is it possible if I hire some employees who living in India? Is the salary for my employees a expense? Do I need to claim this expense? This, I guess, is entirely unrelated to your questions about LLC. Yes, it is possible. The salary you pay your employees is your expense. You need to claim it, otherwise you'd be inflating your earnings which in certain circumstances may constitute fraud. What I need to do to protect my company? For physical protection, you'd probably hire a security guard. If you're talking about legal protections, then again - talk to a lawyer. What can I do to reduce taxes? Vote for a politician that promises to reduce taxes. Most of them never deliver though. Otherwise you can do what everyone else is doing - tax planning. That is - plan ahead your expenses, time your invoices and utilize tax deferral programs etc. Talk to your tax adviser, who should be a EA or a CPA licensed in Virginia. What I need to know after forming an LLC? You'll need to learn what are the filing requirements in your State (annual reports, tax reports, business taxes, sales taxes, payroll taxes, etc). Most are the same for same proprietors and LLCs, so you probably will not be adding to much extra red-tape. Your attorney and tax adviser will help you with this, but you can also research yourself on the Virginia department of corporations/State department (whichever deals with LLCs).",
"title": ""
},
{
"docid": "e65985c3ab463e6ad723656aa8e16f82",
"text": "\"You can file an LLC yourself in most states, although it might be helpful to use a service if you're not sure what to do to ensure it is correct. I filed my LLC here in Colorado online with the Secretary of State's office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is \"\"pass-through\"\", meaning the LLC itself does not have any tax liability. Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can't speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I'll refer back to the NoLo books and web site.\"",
"title": ""
}
] |
[
{
"docid": "fe5cfb09968ac4444f604fac9e9b16c9",
"text": "According to the W9 instructions you are considered a U.S. person if: According to the following section, it looks like a C corporation may be easier then an LLC: All of this information can be found here: http://www.irs.gov/pub/irs-pdf/fw9.pdf Hope this helps!",
"title": ""
},
{
"docid": "692ae1c3e6eb2eca7e42bcebfcb1293a",
"text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them.",
"title": ""
},
{
"docid": "282c1acc3e14164ae6f35038c392d6f4",
"text": "You don't need to notify the IRS of new members, the IRS doesn't care (at this stage). What you do need, if you have a EIN for a single-member LLC, is to request a new EIN since your LLC is now a partnership (a different entity, from IRS perspective). From now on, you'll need to file form 1065 with the IRS in case of business related income, on which you will declare the membership distribution interests on Schedules K-1 for each member.",
"title": ""
},
{
"docid": "3952f02414674a677415876312af53fe",
"text": "First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws.",
"title": ""
},
{
"docid": "dcb839dcb28b6c271c3788c7ed718b41",
"text": "Doing business in united state is not so much easy many time business owner wants to do their business by choosing Delaware llc Online incorporation so that they can able to get many legel benefits and also able to get the state predictable business friendly laws. As forming the Delaware llc is very much easy and it also requires minimal information for forming the llc in the Delaware.",
"title": ""
},
{
"docid": "5ff4ccbc0346de375ade7ff30060923d",
"text": "Get a lawyer. I've incorporated in Alberta without one which was fine because I'm the only employee and it's pretty simple. If you're hiring someone and especially since you have a business partner, spend the money and get a lawyer. They can help with proper contracts and stuff too. Also, consider an accountant as well. Lots of papers to keep organized and taxes aren't always simple. Best of luck!!",
"title": ""
},
{
"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": "6f1a08ddaabab1b83ced76dfa1bbe930",
"text": "Get another LLC. Not that hard and well worth it. I have one business endeavor but have 3 different LLC's to handle the three different aspects of it. That way, should something go wrong with one of the three (and it has in the past), I can kill it without hurting the entire operation. Then start another LLC to take over the aspect of the operation that was killed.",
"title": ""
},
{
"docid": "363e48c2324326a292452607abe56965",
"text": "Short Answer: Go to the bank and ask them about your options for opening a business account. Talk to an attorney about the paperwork and company structure and taxes. Long Answer: You and your buddies jointly own an unincorporated business. This is called a partnership. Yes, there is paperwork involved in doing it properly and the fact that you guys are minors might complicate that paperwork a little bit. In terms of what type of account to open: A business account! Running a business through a personal account (joint or otherwise) is a sure way to get that account shut down. Your bank will want to know the structure of the business, and will require documentation to support that. For a partnership, they will probably want a copy of the partnership agreement. For an LLC, they'll probably want a copy of the filing with Ohio Secretary of State as well as the operating agreement etc. That said, pop into a local bank and ask a business banker directly what you should do. They deal with new businesses all the time, and would probably be best qualified to help you figure out the bank account aspect of it. Regarding business structure... this really impacts a lot more than just the type of bank account to open and how you file your taxes. It is something you guys should really discuss with an attorney. What happens if down the road one of you quits? What happens if you want to bring in a new partner later? What if there is a disagreement about something? These are all things that the attorney can help you address ahead of time - which is a heck of a lot easier (and cheaper) than trying to figure it out later. You're brining in enough that you should certainly be able to buy a couple hours of a lawyer's time. Getting the formation stuff right could save all of you a lot of money and heartache later.",
"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": "c63354cffacbd0dd596f593b412164d3",
"text": "\"There are very few circumstances where forming an out of state entity is beneficial, but a website is within these circumstances in certain instances. Businesses with no physical operations do not need to care what jurisdiction they are registered in: your home state, a better united state or non-united state. The \"\"limited liability\"\" does it's job. If you are storing inventory or purchasing offices to compliment your online business, you need to register in the state those are located in. An online business is an example of a business with no physical presence. All states want you to register your LLC in the state that you live in, but this is where you need to read that state's laws. What are the consequences of not registering? There might be none, there might be many. In New York, for example, there are no consequences for not registering (and registering in new york - especially the city - is likely the most expensive in the USA). If your LLC needs to represent itself in court, New York provides retroactive foreign registrations and business licenses. So basically, despite saying that you need to pay over $1000 to form your LLC \"\"or else\"\", the reality is that you get the local limited liability protection in courts whenever you actually need it. Check your local state laws, but more times than not it is analogous to asking a barber if you need a haircut, the representative is always going to say \"\"yes, you do\"\" while the law, and associated case law, reveals that you don't. The federal government doesn't care what state your form an LLC or partnership in. Banks don't care what state you form an LLC or partnership in. The United States post office doesn't care. Making an app? The Apple iTunes store doesn't care. So that covers all the applicable authorities you need to consider. Now just go with the cheapest. In the US alone there are 50 states and several territories, all with their own fee structures, so you just have to do your research. Despite conflicting with another answer, Wyoming is still relevant, because it is cheap and has a mature system and laws around business entity formation. http://www.incorp.com has agents in every state, but there are registered agents everywhere, you can even call the Secretary of State in each state for a list of registered agents. Get an employer ID number yourself after the business entity is formed, it takes less than 5 minutes. All of this is also contingent on how your LLC or partnership distributes funds. If your LLC is not acting like a pass through entity to you and your partner,but instead holding its own profits like a corporation, then again none of this matters. You need to form it within the state you live and do foreign registrations in states where it has any physical presence, as it has becomes its own tax person in those states. This is relevant because you said you were trying to do something with a friend.\"",
"title": ""
},
{
"docid": "d8742712e52420c7ee377c2f1bcd0486",
"text": "This is what all the guides and business advice places I've checked out seem to say. Limited company down the line possibly depending on whether I employ people or outsource that work to others or whatever (given the nature of the business).",
"title": ""
},
{
"docid": "0659e8e19457737aa39ca2904088ade5",
"text": "Thank you for the pointers! Did you find it necessary to hire an attorney to set up your llc? Have you found any real down-sides with the llc option? It seems to be great in most circumstances from what I'm reading/hearing, there must be some negatives.",
"title": ""
},
{
"docid": "38bdbbd4034ac47489c8320a88da2592",
"text": "The main things to ask about are going to revolve around the best way to structure your business. Know what your plans are for partnership. Know whether or not you'll need a lot of up front capital, and if you'll be subjected to an abnormal amount of risk in the course of day to day operations. If you'll be working with one or more partners, ask for help with an operating agreement. You'll find out whether or not you need an accountant throughout these discussions. Edit: Going through those points will enable your lawyer to help you file under the appropriate structure. Ask for help with anything you're unsure about.",
"title": ""
},
{
"docid": "f9757d4c102e4eb3fc99b6d4ebfdc2d6",
"text": "There are a lot of things that can be specified in the LLC agreement / charter, such as unequal distribution profits, sales restrictions, classes of ownership, etc. You should read your LLC paperwork. That said, you are generally allowed to sell ownership in an LLC in a private transaction. If you advertise the share of the LLC for sale, it's probably a violation of SEC rules. So Craig's List is a bad idea. Word of mouth or a broker is the way to go. I am not a lawyer or accountant -- you should double check this information; it might be wrong.",
"title": ""
}
] |
fiqa
|
51f0c58e7381e7be6fa11b281a240c95
|
How should we organize our finances to effectively plan and prepare for an retirement in next 10 years?
|
[
{
"docid": "af0b1df1287ed9403409abff8d5d9e1c",
"text": "Wow! First, congratulations! You are both making great money. You should be able to reach your goals. Are we on the right track ? Are we doing any mistakes which we could have avoided ? Please advice if there is something that we should focus more into ! I would prioritize as follows: Get on the same page. My first red flag is that you are listing your assets separately. You and your wife own property together and are raising your daughter together. The first thing is to both be on the same page with your combined income and assets. This is critical. Set specific goals for the future. Dreaming and big-picture life planning will be the foundation for building a detailed plan for reaching your goals. You will see more progress with more sacrifice. If you both are not equally excited about the goals, you will not both be equally willing to sacrifice lifestyle now. You have the income now to be able to set yourselves up to do whatever you want in 10 years, if you can agree on what you want. Hire a financial planner you trust. Interview people, ask someone who is where you want to be in 10 years. You need someone with experience that can guide you through these questions and understands how to manage your income stream. Start saving for retirement in tax-advantaged accounts. This should be as much as 10%-15% of your income combined, so $30k-$45k per year. You need to start diversifying your investments. Real estate is great, but I would never recommend it as this large a percentage of net worth. Start saving for your child's education. Hard to say what you need here, since I don't know your goals. A financial planner should assist you with this. Get rid of your debt. Out of your $2.1M of rental real estate and land, you have $1.4M of debt. It will be difficult to start a business with that much additional debt. It will also put stress on your retirement that you don't need. You are taking on lots of risk here. I would sell all but maybe one of the properties and let it cash flow. This will free up cash to start investing for retirement or future business too. Buy more rental in the future with cash only. You have plenty of income to do it this way, and you will be setting yourself up for a great future. At this point you can continue to pile funds into any/all your investments, with the goal of using the funds to start a business or to live on. If all your investments are tied up in real estate, you wont have anything to draw on if needed for a business opportunity. You need to weigh this out in your goal and planning. What should we do to prepare for a comfortable retirement and safety You cannot plan for or see all scenarios. However, good planning will give you more options and more choices. Investing driven by fear will set you up for failure. Spend less than you make. Be patient. Be generous. Cheers!",
"title": ""
},
{
"docid": "04dbc3d8c973ff716a1a53823f0aa77e",
"text": "The biggest issue is your lack of diversification. Your real estate investments have performed quite well so far, but you have also likely enjoyed a period of unprecedented growth that is not sustainable. In the long term, stocks have always outperformed real estate investments, which tend to track more closely to the inflation rate. You need more balance for when when the real estate market cools off. You don't mention tax-deferred retirement savings accounts. You should prioritize your attention to these to keep your income tax low. Consider selling one of your investment properties if you can't adequately fund the 401k.",
"title": ""
}
] |
[
{
"docid": "9260b267d593f6be555fafa6752bc74e",
"text": "Part of the difficulty in this sort of planning is that you are also betting on future tax rates and comparing them with current taxes. If you are in a low tax bracket now, but expect to be in a higher one when you take the money out, it is better to pay the taxes now. If you are in a high tax bracket now, but expect to be in a lower one when you retire/take the money out, then it is better to defer the taxes until then. If you think that future sessions of Congress will decide to tax withdrawals from Roth accounts, then you should contribute to traditional accounts. The problem is that you don't know with certainty what the future will bring. So you have to make educated guesses about what might happen, and what you can do now to protect yourself from it. Ideally, plan so that even if the bad things happen, you will be reasonably comfortable.",
"title": ""
},
{
"docid": "883e13003661c691b6adae423ffef8b1",
"text": "\"A diversified portfolio (such as a 60% stocks / 40% bonds balanced fund) is much more predictable and reliable than an all-stocks portfolio, and the returns are perfectly adequate. The extra returns on 100% stocks vs. 60% are 1.2% per year (historically) according to https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations To get those average higher stock returns, you need to be thinking 20-30 years (even 10 years is too short-term). Over the 20-30 years, you must never panic and go to cash, or you will destroy the higher returns. You must never get discouraged and stop saving, or you will destroy the higher returns. You have to avoid the panic and discouragement despite the likelihood that some 10-year period in your 20-30 years the stock market will go nowhere. You also must never have an emergency or other reason to withdraw money early. If you look at \"\"dry periods\"\" in stocks, like 2000 to 2011, a 60/40 portfolio made significant money and stocks went nowhere. A diversified portfolio means that price volatility makes you money (due to rebalancing) while a 100% stocks portfolio means that price volatility is just a lot of stress with no benefit. It's somewhat possible, probably, to predict dry periods in stocks; if I remember the statistics, about 50% of the variability in the market price 10 years out can be explained by normalized market valuation (normalized = adjusted for business cycle and abnormal profit margins). Some funds such as http://hussmanfunds.com/ are completely based on this, though a lot of money managers consider it. With a balanced portfolio and rebalancing, though, you don't have to worry about it very much. In my view, the proper goal is not to beat the market, nor match the market, nor is it to earn the absolute highest possible returns. Instead, the goal is to have the highest chance of financing your non-financial goals (such as retirement, or buying a house). To maximize your chances of supporting your life goals with your financial decisions, predictability is more important than maximized returns. Your results are primarily determined by your savings rate - which realistic investment returns will never compensate for if it's too low. You can certainly make a 40-year projection in which 1.2% difference in returns makes a big difference. But you have to remember that a projection in which value steadily and predictably compounds is not the same as real life, where you could have emergency or emotional factors, where the market will move erratically and might have a big plunge at just the wrong time (end of the 40 years), and so on. If your plan \"\"relies\"\" on the extra 1.2% returns then it's not a reasonable plan anyhow, in my opinion, since you can't count on them. So why suffer the stress and extra risk created by an all-stocks portfolio?\"",
"title": ""
},
{
"docid": "965d9616ee586392bf3c15fe87b224a4",
"text": "Buy low and sell high. Right now stocks are cheap (or at least cheapish). If you wait for better forecasts, the price will be higher. They might go down still farther, but no one knows for sure when that will happen, or where the bottom is -- despite what the talking heads on TV say. Remember that what you really care about is sell price minus purchase price (plus dividends, but I'll ignore that). What happens between the time you buy and the time you sell is irrelevant financially, but can be important psychologically. If it was me, and you are sure you won't need the money for at least 10 years, or better still 15-20, I would buy some index funds. Pick something that you are comfortable with (some are more aggressive/risky than others), and then only look at it a few times a year, if that much. Only do this as long as you are sure that you won't sell if the market drops further. That is a guaranteed way to lose money. This is what I've been doing for my retirement funds for 15 years, and its worked well so far.",
"title": ""
},
{
"docid": "f7776d8529615f03d3a1ff066204e2e5",
"text": "I have a similar plan and a similar number of accounts. I think seeking a target asset allocation mix across all investment accounts is an excellent idea. I use excel to track where I am and then use it to adjust to get closer (but not exactly) to my target percentages. Until you have some larger balances, it may be prudent to use less categories or realize that you can't come exactly to your percentages, but can get close. I also simplify by primarily investing in various index funds. That means that in my portfolio, each category has 1 or 2 funds, not 10 or 20.",
"title": ""
},
{
"docid": "8ca5a07dbc9252168d91b1abc00a1885",
"text": "Great questions -- the fact that you're thinking about it is what's most important. I think a priority should be maximizing any employer match in your 401(k) because it's free money. Second would be paying off high interest debt because it's a big expense. Everything else is a matter of setting good financial habits so I think the order of importance will vary from person to person. (That's why I ordered the priorities the way I did: employer matching is the easiest way to get more income with no additional work, and paying down high-interest debt is the best way to lower your long-term expenses.) After that, continue to maximize your income and savings, and be frugal with your expenses. Avoid debt. Take a vacation once in a while, too!",
"title": ""
},
{
"docid": "b7db85a99ebe1994875cee8e6b6cc37f",
"text": "The metric I prefer is net worth, minus the value of your home, then divide by your annual expenses. The house is subtracted because you need to live somewhere, so its worth isn't part of retirement savings. I divide by expenses to create result that really answers how close one is to being able to retire. The target is to have 25X your required spending gap. Note, as you close in on retirement, and social security is still in place, you can use it in your planning. If I were in my 20s or 30s today, I wouldn't use it in my numbers.",
"title": ""
},
{
"docid": "eb86b8366e07682b4dbd0b23f812c833",
"text": "First priority is to set up an emergency fund of 6 months expenses. If you're going to be making ~30k a year, then that means you'll probably want to put away about 10k of it in a savings account or something else similarly liquid. After that, paying off your student loans probably makes the most sense depending on the rate. My general rule of thumb (and I'm sure others will disagree with me) is to pay off debts that are >=6.0% first before investing. Paying off debt is a risk-free return on your money, which makes it pretty valuable. It'll let you direct more of your monthly income into retirement savings, too. After that, open up a Roth IRA. You can put a maximum of $5500 in it for this year. I like Betterment, but Wealthfront has a similar service.",
"title": ""
},
{
"docid": "103d0790419c515f5130b810367cdce0",
"text": "It's tough to avoid the discussion of taxes. Matthew's answer was excellent but of course, tax was part of the discussion. In an article I wrote a while back, The 15% solution, I described how one can optimize taxes paid by using Roth (401 or IRA) while at a marginal 15%, and carefully transition to pretax to avoid the 25% bracket. It's possible to effectively save money from a 25% rate and withdraw it at 0%. (Zero is what one pays for the first $20K of a couple's income, this is the combined standard deduction and personal exemptions.) It would take $500K at retirement to produce the $20,000 withdrawal at a 4% rate. Keep in mind, this is a moving target as the numbers edge up each year. With no match, I'd consider the Roth IRA. But I also agree, paying higher interest debt first is a wise priority.",
"title": ""
},
{
"docid": "b784ec1dea306580bf823cccf1b7d1b8",
"text": "\"Your retirement plan shouldn't necessarily be dictated by your perceived employment risks. If you're feeling insecure about your short-term job longevity and mid-career prospects, you will likely benefit from a thoughtful and robust emergency fund plan. Your retirement plan is really designed to fund your life after work, so the usual advice to contribute as much as you can as early as you can applies either way. While a well-funded retirement portfolio will help you feel generally more secure in the long run (and worst case can be used earlier), a good emergency fund will do more to address your near-term concerns. Both retirement and emergency fund planning are fundamental to a comprehensive personal finance plan. This post on StackExchange has some basic info about your retirement options. Given your spare income, you should be able to fully fund an IRA and your 401K every year with some left over. Check the fees in your 401K to determine if you really want to fully fund the 401K past employer matching. There are several good answers and info about that here. Low-cost mutual funds are a good choice for starting your IRA. There is a lot of different advice about emergency funds (check here) ranging from x months salary in savings to detailed planning for each of your expenses. Regardless of which method you chose, it is important to think about your personal risk tolerance and create a plan that addresses your personal needs. It's difficult to live life and perform well at work if you're always worried about your situation. A good emergency plan should go a long way toward calming those fears. Your concern about reaching mid-life and becoming obsolete or unable to keep up in your career may be premature. Of course your mind, body, and your abilities will change over the years, but it is very difficult to predict where you will be, what you will be doing, and whether your experience will offset any potential decrease in your ability to keep up. It's good to think ahead and consider the \"\"what-ifs\"\", but keep in mind that those scenarios are not preordained. There isn't anything special about being 40 that will force you into a different line of work if you don't want to switch.\"",
"title": ""
},
{
"docid": "56290eb39d292df78b8af33f4e308903",
"text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.",
"title": ""
},
{
"docid": "8e464172e7f74d337e511ec0d5a64b47",
"text": "For a more philosophical way to approach this, consider money saved as the opposite of money owed: This philosophy works for things which you may be able to borrow for (computer, car, house), but also for things you can't borrow for (retirement, giving to your kids, etc.). As others have mentioned, the 10% suggestion is for retirement, but the actual number depends on your lifestyle. As you can see in this chart, saving 10% of your income means you'll need to work for 51.4 years.",
"title": ""
},
{
"docid": "5a920cb7e7d5d27b8b43bfecb5f41516",
"text": "The 10K in savings and money market is equal to about 1.5 months of income for emergency funds. You should add additional funds to this account over the next few years to let that increase to 3 to 6 months of monthly expenses. This money should be kept secure so that it will be there when you need it. Growth is not the primary function for this account. Investment at this stage should be for retirement. This means take advantage of 401K matching if it is available. You will have to determine if Roth or regular makes the most sense for you. In general the lower your current tax bracket the more sense Roth makes for you. If you want an IRA again decide which type. Also remember that you have until the tax deadline to make a contribution so you can decide to use a refund to fund the IRA. IRAs and 401Ks are just account types with some rules attached. They can be invested in everything from CD's to individual stocks depending on how aggressive you want to be.",
"title": ""
},
{
"docid": "2af54e9f869b44c4f65083b7c30d1f2d",
"text": "Though I do think it is important to have a diversified portfolio for your retirement, I also think it's more important to make sure you are at no point touching this money until you retire. Taking money out of your retirement early is a sure fire way to get in a bad habit of spending this money when you need a little help. Here's a tip: If you consider this money gone, you will find another way to figure out your situation. With that said, I also would rather not put a percentage on this. Start by building your emergency fund. You'll want to treat this like a bill and make a monthly payment to your savings account each month or paycheck. When you have a good nine times your monthly income in here, stop contributing to this fund. Instead start putting the same amount into your IRA instead. At this point you should no longer have to add to your emergency fund unless there is a true emergency and you are replacing that money. Keep in mind that the amount of money in your emergency fund changes significantly in each situation. Sit down with your bills and think about how much money you would need in the event you lost your job. How long would you be out of work? How many bills do you have each month that would need to be covered?",
"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": "f6b490195aee0c5351658b1edfd90ba3",
"text": "If you're referring to investment hedging, then you should diversify into things that would profit if expected event hit. For example alternative energy sources would benefit greatly from increased evidence of global warming, or the onset of peak oil. Preparing for calamities that would render the stock market inaccessible, the answer is quite different. Simply own more of things that people would want than you need. A list of possibilities would include: Precious metals are also a way to secure value outside the financial markets, but would not be readily sellable until the immediate calamity had passed. All this should be balanced on an honest evaluation of the risks, including the risk of nothing happening. I've heard of people not saving for retirement because they don't expect the financial markets to be available then, but that's not a risk I'm willing to take.",
"title": ""
}
] |
fiqa
|
86e8ca6d602222dc3b05f55a1adb3c87
|
If I have some old gold jewellery, is it worth it to sell it for its melt value?
|
[
{
"docid": "6037ff42319cd1cf7e2b0d25c9f5ca62",
"text": "Get your jewelery appraised. (Don't let whoever does the appraisal be the same person whom you would sell it to.) Logically jewelery must be worthy more than the raw gold that makes it up because somebody took the time to design patterns and do specialty craft to the metal.",
"title": ""
},
{
"docid": "5cdfc7a94344b6b70996d840336a1dc8",
"text": "I have a buddy that used to run one of those companies that buys gold like the ones you see on TV. Here's the deal... 1) If the jewelry isn't total junk, get it appraised. Making raw materials into jewelry obviously increases the value since you can't buy jewelry for the price of raw gold. In many cases it will be worth more as jewelry, but not always. Depends on the piece. 2) Those companies generally rely on the fact that people selling jewelry to a gold dealer are in a hurry to get cash and are very negotiable on what they will take for it. Depending on how predatory they are, you will probably get between 50 and 75% of the market rate. They make a living on the spread and people's need for quick cash. They usually resell it immediately to a 3rd party that actually melts it down and resells it. So the short answer to your question is no, you won't get close to market value with these companies. You would do better if you didn't have to go through the middle man, but then those final buyers aren't generally the ones who have set up shop to deal with the general public.",
"title": ""
},
{
"docid": "604663b5014acec01602406e3c1650c0",
"text": "\"I just came across an article from the CBC on this subject: Here's one tip from the article, which echoes what others have said: \"\"The agency [Better Business Bureau in B.C.] suggests getting two or three appraisals from a jeweller or jewelry store before deciding to sell.\"\" See the full article for the rest of the tips.\"",
"title": ""
},
{
"docid": "459402321d1eb85e0f85b61b15d3ceef",
"text": "Avoid gold brokers who do business through the mail. Video Full Article",
"title": ""
}
] |
[
{
"docid": "6522950c19c9bdd002c6744ecb57c923",
"text": "Gold since the ancient time ( at least when it was founded) has kept its value. for example the french franc currency was considered valuable in the years 1400~ but in 1641 lost its value. However who owned Gold back then still got value. The advantage of having gold is you can convert it to cash easily in the world. it hedges against inflation: it is value rise when inflation happend. Gold has no income,no earnings. its not like a stock or a bond. its an alternative way to store value the Disadvantages of investing in Gold Gold doesnt return income , needs physical storage and insurance, Capital gains tax rates are higher on most gold investments. the best way to invest gold when there is inflation is expected. source",
"title": ""
},
{
"docid": "351caceff65bf83be90d557d5c8a94f5",
"text": "I stock is only worth what someone will pay for it. If you want to sell it you will get market price which is the bid.",
"title": ""
},
{
"docid": "9b1252f5c85ef9772c14c3b3d5c5aa05",
"text": "Not at the current price. Take a look at historical charts going back five years. When the meltdown occurred in 2008, gold price took a big dip due to deleveraging, etc. I would expect the same to happen again with the current crisis.",
"title": ""
},
{
"docid": "493570ee85e4ae71f109ba9f05e40ae9",
"text": "Just because gold performed that well in the past does not mean it will perform that well in the future. I'm not saying you should or should not buy gold, but the mere fact that it went up a lot recently is not sufficient reason to buy it. Also note that on the house, an investment that accrues continuous interest for 30 years at an annual rate of about 7.7% will multiply by a factor of 10 in 30 years. That rate is pretty high by today's standards, but it might have been more feasible in the past (I don't know historical interest rates very well). Yet again note that the fact that houses went up a lot over the last 30 years does not mean they will continue to do so.",
"title": ""
},
{
"docid": "5031ce8e10206edaeeb3b4e54b51299c",
"text": "also it is fungible, if I'm using the right term - an important property of a currency - meaning it's easy to change into other forms. (you can melt it and make bigger, smaller, or different shaped things).",
"title": ""
},
{
"docid": "cc423b22c60f3fca9cbc3a00e6c7eddd",
"text": "The calculators on this site should help: http://www.measuringworth.com/ They allow you to choose a currency (only about half a dozen are available), enter an amount and the years to compare, and then provides feedback in a table. Obviously you will need to be careful which calculator you choose. If they don't cover the currencies you are dealing with, see this site: http://projects.exeter.ac.uk/RDavies/arian/current/howmuch.html They provide numerous links that, while they don't provide sleek calculators per se, they do offer guidance on how to handle conversions yourself. Regarding comparing the cost to something like gold, to try and help younger readers, I think it's a good idea but gold is not the ideal choice for comparison. I'd recommend something more tangible like household goods - what a Playstation would have cost in 1930s money etc. In short: the value of gold is esoteric even for most adults - concrete examples would be better.",
"title": ""
},
{
"docid": "3530792df52e52d0bf8c62ff035e4fc3",
"text": "I think the primary reason it is so pricey now is that it is an inflation hedge, and considering how shaky the economies and out of control the spending is in many countries right now, people are running to it as a safe harbor. The increased demand raises the price as it does with any asset. This brings us to the titular question. Why does gold have value? The same reason anything has value. There is someone out there who wants it enough to trade something else of value to get it. It is in the news so much because it is so high right now, which unfortunately is going to cause a lot of people to foolishly invest in it at likely the worst possible time.",
"title": ""
},
{
"docid": "b973140a656fc2cd1a5fec73213dd927",
"text": "How was Scunthorpe steelworks sold for £1? I have £1, what is to stop me from buying a hyper distressed company like this for so cheaply? Why doesn't this happen more often? What are the advantages and disadvantages of the sale to the buyers and sellers?",
"title": ""
},
{
"docid": "803cc957e0204d38e88920103c85f4e1",
"text": "It won't be worth $1050 at maturity. You are not accounting for tym. So to see the 'worth: of a bond you will need it's yield (5%) and the current market rate of a similar bond. Then just use the bond valuation formula to solve (on mobilw so can't explain further/better) sorry",
"title": ""
},
{
"docid": "a334c4c2ac21564debbc5a94d2f563f7",
"text": "If you plan on trading it, it's a social construct. If you plan on keeping it for yourself, then the value is personal. Not always easy to disentangle the two. Sometimes people are more willing to risk personal safety to rescue items of sentimental value...",
"title": ""
},
{
"docid": "911f8df96b2ac9656c179ce9efc4ed23",
"text": "I came across this €1000 coin, which can actually be bought for €1000. It contains 17 grams of gold, worth about €600 today. Is there any downside to this over keeping €1000 in regular banknotes? These are bullions / medallions / collectibles / Non Circulating Tenders or whatever name one wants to call it. A coin has a value because the Central Banks says so that enforces everyone accept it at that. This as such is not a coin. Banks or anyone else will not accept this for face value. These are of numismatic interest and certain people do collect such items. They are collectibles to the extent the price is dependent on general interest in future on such items and quantity available. So if future the price may go up much higher than the gold price or may retain its gold price. Mints make these with intricate design, best finish, limited quantity to charge the additional premium. If you are not into numismatics, stay away, a better options is buy simple gold bullion of similar weight for actual gold price.",
"title": ""
},
{
"docid": "3ea14361875eb3d092417ee72ac3aae4",
"text": "If there's a market for it, then it has value. No reason that it shouldn't be used, unless that market is just too volatile to ensure future value; which, I don't think is the case with fine art. If anything, there is almost the certainty that their value with increase with time.",
"title": ""
},
{
"docid": "0b1b4d9b1b9d014f7d6ce32132da3509",
"text": "You are really tangling up two questions here: Q1: Given I fear a dissolution of the Euro, is buying physical gold a good response and if so, how much should I buy? I see you separately asked about real estate, and cash, and perhaps other things. Perhaps it would be better to just say: what is the right asset allocation, rather than asking about every thing individually, which will get you partial and perhaps contradictory answers. The short answer, knowing very little about your case, is that some moderate amount of gold (maybe 5-10%, at most 25%) could be a counterbalance to other assets. If you're concerned about government and market stability, you might like Harry Browne's Permanent Portfolio, which has equal parts stocks, bonds, cash, and gold. Q2: If I want to buy physical gold, what size should I get? One-ounce bullion (about 10 x 10 x 5mm, 30g) is a reasonably small physical size and a reasonable monetary granularity: about $1700 today. I think buying $50 pieces of gold is pointless: However much you want to have in physical gold, buy that many ounces.",
"title": ""
},
{
"docid": "76dec13b2736c8e265b536a3bafca12f",
"text": "\"This type of account will sell you just enough rope to hang yourself. Gold is at $1400 or so. Were you around when it first hit $800 in '79/'80? I was. No one was saying \"\"sell\"\" only forecasts of $2000. If you bought and held, you've still not broken even to inflation let alone simple market returns.\"",
"title": ""
},
{
"docid": "63a60de66bf2f81222c7f190985625da",
"text": "\"Their \"\"worth\"\" is whatever someone is willing to pay to have them. The mint presumably thinks that some people (collectors) are willing to pay at least 55$ CAD for them. Their value as currency is only 3$ CAD. Their value as precious metal/crystal is irrelevant, as its illegal to melt (without explicit permission) coins that are legal tended in Canada.\"",
"title": ""
}
] |
fiqa
|
72dc22f0189ccd6d156af554936ce124
|
Why is there some latency between the time a check deposit was processed and when one can withdraw the money on Fidelity CMAs?
|
[
{
"docid": "ab2c8385fbe611ad736f66331f17cbaa",
"text": "Every bank and credit union in the US has a Deposit Agreement and Disclosures document, Bank of America is no different. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds that you deposit by check. A hold results in a delay in the availability of these funds. that sounds great but ... For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit on a business day that we are open at one of our financial centers before 2:00 p.m. local time, or at one of our ATMs before 5:00 p.m. local time in the state where we maintain your account, we consider that day to be the day of your deposit. However, if you make a deposit after such times, or on a day when we are not open or that is not a business day, we consider that the deposit was made on the next business day we are open. Some locations have different cutoff times. so if you deposit a check on Friday afternoon, the funds are generally available on Tuesday. but not always... In some cases, we will not make all of the funds that you deposit by check available to you by the first business day after the day of your deposit. Depending on the type of check that you deposit, funds may not be available until the second business day after the day of your deposit. The first $200 of your deposits, however, may be available no later than the first business day after the day of your deposit. If we are not going to make all of the funds from your deposit available by the first business day after the day of your deposit, we generally notify you at the time you make your deposit. We also tell you when the funds will be available. Ok what happens when the funds are available... In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means that, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind that even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account. Fidelity has a similar document: Each check deposited is promptly credited to your account. However, the money may not be available until up to six business days later, and we may decline to honor any debit that is applied against the money before the deposited check has cleared. If a deposited check does not clear, the deposit will be removed from your account, and you are responsible for returning any interest you received on it. I would think that the longer holding period for Fidelity is due to the fact that they want to wait long enough to make sure that the number of times they have to undo investments due to the funds not clearing is nearly zero.",
"title": ""
}
] |
[
{
"docid": "ffa2250acc63d88f31a6961a58f380b9",
"text": "I've been a landlord and also a tenant. I have been able to deposit money in an account, where I have the account number, and/or a deposit slip. In a foreign bank you can deposit by a machine if in the bank or someone is there for you and knows the account number. With regards to cashing a check in another country, it is up to the bank and the time is at least 14 to 21 business days, with a fee is added. As of a winning check, since its in your name, if you are in another country sign the check, for deposit only with a deposit slip and send it to your out of country bank by FedEx - you will have a tracking number, where as regular mail it might get there in 3 months. I hope by now you came to your solution.",
"title": ""
},
{
"docid": "65f91e745690772d877a58ac6472cded",
"text": "You set it based on liquidity management. Cash drag is one of the reasons actively managed funds underperform. The longer your settlement date, the less cash you have to hold because you can take three days to liquidate positions to redeem. So it's a convenience vs performance question.",
"title": ""
},
{
"docid": "ccb53ec70fd1c7e3b4addbd3a77698da",
"text": "\"There are two reasons you would get a higher yield for savings accounts: either because it is not guaranteed by a national deposit insurance fund (CDIC I presume in Canada), or you have to hold it for a longer term. Money Market Accounts are insured in the U.S. and are also very liquid since you can debit from it any time. Because of this, they offer much lower rates of interest than comparable products. If you look at the savings products such as the 1.50% momentum savings account offered by ScotiaBank, you actually have to hold a $5000 balance and not make any debit from it for 90 days in order to get the extra 0.75% that would get you to 1.50%. Essentially this is roughly equivalent to offering you a 1.50% GIC with a 0.75% withdrawal penalty fee, but simply presented in more \"\"positive\"\" terms. As for the Implicity Financial Financial 1.75% offering, it looks like it is not insured by the CDIC.\"",
"title": ""
},
{
"docid": "5ace3a7e909e6efb41e12fb6a93b3f6d",
"text": "In the United States, savings accounts generally have higher interest rates than checking or money market accounts. Part of this is the government restriction on the number of automated transactions per month that can be done on a savings account: this is supposed to allow banks to lengthen the time frame of the cash part of their investments for savings. This limit is why direct deposit of one's paycheck is almost always into a checking or money market account... and why many people have savings accounts, especially with Internet banks, because they pay significantly higher interest rates than brick and mortar banks.",
"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": "b727ae7b43228b83efcdc86a2ddfa0c7",
"text": "Looking at your dates, I think I see a pattern. It appears that your statement closing date is always 17 business days before the last business day of the month. For example, if you start at May 31 and start counting backwards, skipping Saturdays, Sundays, and May 30 (Memorial Day), you'll see that May 5 is 17 business days before May 31. I cannot explain why Bank of America would do this. If you ask them, let us know what they say. If it bothers you, find another bank. I do most of my banking (checking, savings, etc.) with a local credit union. Their statements end on the last day of the month, every month without fail. (Very nice, in my opinion.) I have two credit cards with nationally known banks, and although those statements end in the middle of the month, they are consistently on the same date every month. (One of them is on the 13th; the other date I can't recall right now.) You are right, a computer does the work, and your statement date should be able to fall on a weekend without trouble. Even when these were assembled by hand, the statement date could still be on a weekend, and they just wouldn't write it up until the following Monday. You should be able to find another bank or credit union that does this.",
"title": ""
},
{
"docid": "66002fb9387b1f794929de8adce812a2",
"text": "\"This summer I used a loan from my 401(k) to help pay for the down payment of a new house. We planned on selling a Condo a few months later, so we only needed the loan for a short period but wanted to keep monthly payments low since we would be paying two mortgages for a few months. I also felt like the market might take a dip in the future, so I liked the idea of trying to cash out high and buy back low (spoiler alert: this didn't happen). So in July 2017 I withdrew $17,000 from my account (Technically $16,850.00 principal and $150 processing fee) at an effective 4.19% APR (4% rate and then the fee), with 240 scheduled payments of $86.00 (2 per month for 10 years). Over the lifetime of the loan the total finance charge was $3,790, but that money would be paid back into my account. I was happy with the terms, and it helped tide things over until the condo was sold a few months later. But then I decided to change jobs, and ended up having to pay back the loan ~20 weeks after it was issued (using the proceeds from the sale of the condo). During this time the market had done well, so when I paid back the funds the net difference in shares that I now owned (including shares purchased with the interest payments) was $538.25 less than today's value of the original count of shares that were sold to fund the loan. Combined with the $150 fee, the overall \"\"cost\"\" of the 20 week loan was about 4.05%. That isn't the interest rate (interest was paid back to my account balance), but the value lost due to the principal having been withdrawn. On paper, my account would be worth that much more if I hadn't withdrawn the money. Now if you extrapolate the current market return into 52 weeks, you can think of that loan having an APR \"\"cost\"\" of around 10.5% (Probably not valid for a multi year calculation, but seems accurate for a 12 month projection). Again, that is not interest paid back to the account, but instead the value lost due to the money not being in the account. Sure, the market could take a dip and I may be able to buy the shares back at a reduced cost, but that would require keeping sizable liquid assets around and trying to time the market. It also is not something you can really schedule very well, as the loan took 6 days to fund (not including another week of clarifying questions back/forth before that) and 10 day to repay (from the time I initiated the paperwork to when the check was cashed and shares repurchased). So in my experience, the true cost of the loan greatly depends on how the market does, and if you have the ability to pay back the loan it probably is worth doing so. Especially since you may be forced to do so at any time if you change jobs or your employment is terminated.\"",
"title": ""
},
{
"docid": "4f912f5d1f133a5faf79a635365990fb",
"text": "\"Because it takes 3 business days for the actual transfer of stock to occur after you buy or sell to the next owner, your cash is tied up until that happens. This is called the settlement period. Therefore, brokers offer \"\"margin\"\", which is a form of credit, or loan, to allow you to keep trading while the settlement period occurs, and in other situations unrelated to the presented question. To do this you need a \"\"margin account\"\", you currently have a \"\"cash account\"\". The caveat of having a retail margin account (distinct from a professional margin account) is that there is a limited amount of same-day trades you can make if you have less than $25,000 in the account. This is called the Pattern Day Trader (PDT) rule. You don't need $25k to day trade, you will just wish you had it, as it is easy to get your account frozen or downgraded to a cash account. The way around THAT is to have multiple margin accounts at different brokerages. This will greatly increase the number of same day trades you can make. Many brokers that offer a \"\"solution\"\" to PDT to people that don't have 25k to invest, are offering professional trading accounts, which have additional fees for data, which is free for retail trading accounts. This problem has nothing to do with: So be careful of the advice you get on the internet. It is mostly white noise. Feel free to verify\"",
"title": ""
},
{
"docid": "05f2384f318fceeaea2560c1da8ccd3d",
"text": "\"If the answer were \"\"no,\"\" you still found the 'black swan' type exception that proves the answer to be \"\"yes,\"\" right? My experience is this - again just my experience, my bank - When by balance goes below $10, I have the account trigger an email. I wrote a check I forgot to register and subtract, so the email was sent and the account balance in fact showed negative. I transferred to cover the check and the next day, there was a history that didn't go negative, the evening deposit was credited prior to check clearing. I set up my bills on line. I set a transfer in advance for the same dollar amount as a bill that was due, e.g. $1000 transfer for a $1000 bill. I woke up to an email, and the account showed the bill was paid prior to the transfer. So one line showed going -$900, and the next line +$100 after transfer. Even though it's the same online process. Again, the next day the history re-ordered to look like I was never negative. But even on a day I know I'm having payments issued, I can never just ignore that email. The first time this happened, I asked the bank, and they said if the negative went until the next day, I'd get an overdraft/short balance notice. This is a situation to ask your bank how they handle this.\"",
"title": ""
},
{
"docid": "b609126cbf14eb629535679ac0a875d7",
"text": "Hello, I was curious if anyone had any insight as to why some mutual funds had different settlement dates than others. I've seen many funds that settle T+1 and some that are T+2 and yet others that are even longer than that. Just curious what is going on behind the scenes that could cause the variation in settlement times. I've looked on investopedia, my broker's website and other google related searches and couldn't find an answer. If anyone had a link or experience with this I would appreciate the information.",
"title": ""
},
{
"docid": "5b213dd622dfb92ca43339dad0d9a256",
"text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"",
"title": ""
},
{
"docid": "5ea816f8a5cdceb7b98027f7392c287e",
"text": "They changed the way trailing interest is calculated back in 2008 if I recall correctly. The idea at the time was that the interest charges to the customer were somewhat less, but it made trying to get a payoff quote a PITA. They used to take payments for more than the current balance due at that time, however. I can't provide any insight as to why they won't now, though.",
"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": "a7f53388750c3c3aa69d751131546f00",
"text": "From my reading of the wikipedia page (CRT), this only happens if you deposit or withdraw currency, not checks. The idea behind this is that checks, ACH, etc. leave paper trails that can be tracked. Cash doesn't, so it gets this extra level of scrutiny. If yu get a cashiers check or a money order to pay a bill, I don't think a CRT is created. If you withdraw $15,000 to buy a car in cash (1 stack of $100 bills), then a CRT would be generated. It still isn't a problem, as long as you can show a bill of sale showing where the money went (or came from, if you are the seller). The IRS has a FAQ about this. It says (taken from several spots at that page): Cash is money. It is currency and coins of the United States and any other country. A cashier’s check, bank draft, traveler’s check, or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. These items are not defined as cash because, if they were bought with currency, the bank or other financial institution that issued them must file a Currency Transaction Report. The exception to this is if you are buying something with a resale value of more than $10k with a check, money order, etc of less than $10k.",
"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": ""
}
] |
fiqa
|
305f0500a10e9f83d601aaefa9545b19
|
I'm getting gouged on prices for medical services when using my HSA plan. How to be billed fairly?
|
[
{
"docid": "cbe3a03af5d76667f495282e9f00ae5c",
"text": "The big difference for me under the High deductible plan has been that instead of paying the co-pay, now I am now responsible for the negotiated rate until I reach the deductible limit. The HSA is only a way to funnel medical payments through a tax free account the insurance company and the doctor don't care about the HSA. If we go out-of-network, then I am responsible for the full rate, but they only count the negotiated rate as a credit against the out of pocket/deductible. This big difference makes it very important to pick a doctor in-network. For your example: I would have paid $50 under the PPO, but $200 under the high deducible plan. If I go out-of-network I would have to pay whatever the doctor want me to pay, but the insurance company would only credit me $200 against my deductible. I can pull the extra $350 from the HSA. It is hard to get good pricing information from some doctors, but the price difference for me has been so large that in-network is the only way to go. For prescriptions the high deductible plan has been worse, because we pay the full price with no discounts for the medicine, until we reach the plan deductible. That makes the cost of the prescriptions as much as 10x's more expensive. In fact the annual cost of our prescriptions all but guarantees that we hit the deductible each year.",
"title": ""
},
{
"docid": "394e2c739f4870cd08159d90823caba2",
"text": "\"I had an HSA for two or three years. I found very routinely that my insurance company had negotiated rates with in-network providers. So as I never hit the deductible, I always had to pay 100% of the negotiated rate, but it was still much less than the providers general rate. Sometimes dramatically so. Like I had some blood and urine tests done and the general rate was $450 but the negotiated rate was only $40. I had laser eye surgery and the general rate was something like $1500 but the negotiated rate was more like $500. Et cetera. Other times it was the same or trivially different, like routine office visits it made no difference. I found that I could call the insurance company and ask for the negotiated rate and they would tell me. When I asked the doctor or the hospital, they either couldn't tell me or they wouldn't. It's possible that the doctor's office doesn't really know what rates they've agreed to, they might have just signed some contract with the insurance company that says, yes, we'll accept whatever you give us. But either way, I had to go to the insurance company to find out. You'd think they'd just publish the list on a web site or something. After all, it's to the insurance company's advantage if you go to the cheapest provider. With a \"\"regular\"\" non-HSA plan, they're share of the total is less. Even with an HSA plan if you go to a cheaper provider you are less likely to hit the deductible. Yes, medical care in the U.S. is rather bizarre in that providers routinely expect you to commit to paying for their services before they will tell you the price. Can you imagine any other industry working this way? Can you imagine buying a car and the dealer saying, \"\"I have no idea what this car costs. If you like it, great, take it and drive it home, and in a few weeks we'll send you a bill. And of course whatever amount we put on that bill you are legally obligated to pay, but we refuse to tell you what that amount will be.\"\" The American Medical Association used to have a policy that they considered it \"\"unethical\"\" for doctors to tell patients the price of treatment in advance. I don't know if they still do.\"",
"title": ""
},
{
"docid": "77de1f0828136343b16e6cd31563932d",
"text": "First, as noted in the comments, you need to pay attention to your network providers. If you are unable to pay exorbitant prices out of pocket, then find an in-network medical provider. if you are unhappy with the in-network provider list (e.g. too distant or not specialists), then discuss switching to another plan or insurer with your employer or broker. Second, many providers will have out of pocket or uninsured price lists, often seen in outdated formats or disused binders. Since you have asked for price lists and not been provided one, I would pursue it with the practice manager (or equivalent, or else a doctor) and ask if they have one. It's possible that the clinic has an out of pocket price list but the front line staff is unaware of it and was never trained on it. Third, if you efforts to secure a price list fail, and you are especially committed to this specific provider, then I would consider engaging in a friendly by direct negotiation with the practice manager or other responsible person. Person they will be amenable to creating a list of prices (if you are particularly proactive and aggressive, you could offer to find out of pocket price lists from other clinics nearby). You could also flat out ask them to charge you a certain fee for office visits (if you do this, try to get some sort of offer or agreed price list in writing). Most medical practices are uncomfortable asking patients for money, so that may mean flat refusal to negotiate but it may also mean surprising willingness to work with you. This route is highly unpredictable before you go down it, and it's dependent on all sorts of things like the ownership structure, business model, and the personalities of the key people there. The easiest answer is to switch clinics. This one sounds very unfriendly to HSA patients.",
"title": ""
}
] |
[
{
"docid": "3611f0cf679453771729193f9c0d55b5",
"text": "\"As others have mentioned, you avoid \"\"payroll taxes\"\" (Medicaid, Social Security, etc) by using pre-tax money rather than post-tax money. However, there is one benefit to getting your own privately held one: you can choose the service provider. A previous employer's HSA charged $4/month, and did not allow me to invest in any funds unless I had over $4k in my account. However, a single year's maximum contribution is less than $4k, so it was stuck in a money market account perpetually. The tax saving probably is larger than both your monthly fees and your investment gains, but the HSA provider's rules are another (fairly-opaque) consideration.\"",
"title": ""
},
{
"docid": "3772f20a1d02c1a4ae8fc6aef9e9d331",
"text": "\"You can deduct what you pay for your own and your family's health insurance regardless of whether it is subsidized by your employer or not, as well as all other medical and dental expenses for your family, as an itemized deduction on Schedule A of Form 1040, but only to the extent that the total exceeds 7.5% of your Adjusted Gross Income (AGI) (10% on tax returns for year 2013 onwards). As pointed out in KeithB's comment, you cannot deduct any health insurance premium (or other medical expense) that was paid for out of pre-tax dollars, nor indeed can you deduct any medical expense to the extent that it was paid for by the insurance company directly to hospital or doctor (or reimbursed to you) for a covered expense; e.g. if the insurance company reimbursed you $72 for a claim for a doctor's visit for which you paid $100 to the doctor, only $28 goes on Schedule A to be added to the amount that you will be comparing to the 7.5% of AGI threshold, and the $72 is not income to you that needs to be reported on Form 1040. Depending on other items on Schedule A, your total itemized deductions might not exceed the standard deduction, in which case you will likely choose to use the standard deduction. In this case, you \"\"lose\"\" the deduction for medical expenses as well as all other expenses deductible on Schedule A. Summary of some of the discussions in the comments Health care insurance premiums cannot be paid for from HSA accounts (IRS Pub 969, page 8, column 2, near the bottom) though there are some exceptions. Nor can health care insurance premiums be paid from an FSA account (IRS Pub 969, page 17, column 1, near the top). If you have a business on the side and file a Schedule C as a self-employed person, you can buy medical insurance for that business's employees (and their families too, if you like) as an employment benefit, and pay for it out of the income of the Schedule C business, (thus saving on taxes). But be aware that if you have employees other than yourself in the side business, they would need to be covered by the same policy too. You can even decide to pay all medical expenses of your employees and their families too (no 7.5% limitation there!) as an employment benefit but again, you cannot discriminate against other employees (if any) of the Schedule C business in this matter. Of course, all this money that reduced your Schedule C income does not go on Schedule A at all. If your employer permits your family to be covered under its health insurance plan (for a cost, of course), check whether you are allowed to pay for the insurance with pre-tax dollars. The private (non-Schedule C) insurance would, of course, be paid for with post-tax dollars. I would doubt that you would be able to save enough money on taxes to make up the difference between $1330/month and $600/month, but it might also be that the private insurance policy covers a lot less than your employer's policy does. As a rule of thumb, group insurance through an employer can be expected to offer better coverage than privately purchased insurance. Whether the added coverage is worth the additional cost is a different matter. But while considering this matter, keep in mind that privately purchased insurance is not always guaranteed to be renewable, and a company might decline to renew a policy if there were a large number of claims. A replacement policy might not cover pre-existing conditions for some time (six months? a year?) or maybe even permanently. So, do consider these aspects as well. Of course, an employer can also change health insurance plans or drop them entirely as an employment benefit (or you might quit and go work for a different company), but as long as the employer's health plan is in existence, you (and continuing members of your family) cannot be discriminated against and denied coverage under the employer's plan.\"",
"title": ""
},
{
"docid": "9683095ddab1e14148cdb3672a3ab112",
"text": "You should start by calling the clinic and asking them to tell you how the visit was coded. Some clinics have different billing codes based on the complexity of the visit. If you have one thing you are seeing the doctor about, that could be coded differently than if you have 4 things you are seeing the doctor about. In fact, even if you are there just for one ailment, but while you are there you happen to ask a few quick questions about other possible ailments, the doctor could decide to use the billing code for the higher complexity. If when speaking to the billing department it is determined that the visit is using a higher complexity billing code (and a higher charge as a result), you could then request that it be re-coded with the lower complexity visit. Realize if you request that they will probably have to first get approval from the doctor that saw you. Note: I am basing this answer on first hand experience about 6 months ago in Illinois, where the situation I described happened to me because I asked some unrelated questions about other possible ailments at the end of a visit to an after hours clinic. The billing department explained that my visit was coded for 4 issues. (3 of them were quick questions I asked about at the end of the visit, one of which she referred me to another doctor. My additional questions probably extended the visit by 3-4 minutes.) In my case I never got the bill reduced, mainly due to my own laziness and my knowing that I would hit my deductible anyway this year. Of course I can't say for sure if this is what happened in your case, or even if this practice is widespread. This was the first and only time in my life that I encountered it. As a side note, your primary doctor would likely rarely ever bill you for a more complex visit, as it likely wouldn't lead to much repeat business. As for your last question regarding your credit: if the provider decides to lower the price, and you pay the lower price, this in no way can affect your credit. Surprising Update: When I called the billing office months ago, I had asked if they could confirm the code with the doctor, and I was told they would look into it. I never heard back, never followed up, and assumed that was the end of it. Well, today I got a call back (months later) and was informed that they had re-coded the visit which will result in a lower charge! It's still pending the insurance adjustment but at some point in the future I expect to receive either a credit on my next statement or a check in the mail. (The price difference pre-insurance in my case has gone from $359 to $235.) Update: I did receive a check for the difference. The check was dated July 20, 2016, which is just over 2 months after the phone call informing me I would receive it.",
"title": ""
},
{
"docid": "aab74dea0e7ee708091bd0e41aaae7ca",
"text": "\"Wait...what? Do you live in backwards land? They've let free market reign in healthcare that is why prices are through the roof. The healthcare industry is immune to antitrust, and negotiating with government programs. There is no such thing as \"\"preventing single payer programs......it only works if there is a SINGLE overriding singlepayer program (yes they wont pass it), anything else doesnt over come the problems of a fractured buying pool. Things they legislate is \"\"No negotiating policy\"\" ....and no.\"",
"title": ""
},
{
"docid": "b05aaea6f5def5d0f295abd38d46e00c",
"text": "The price the provider charges you is the amount he would like to get for his services. Let's take an example, you do a blood test at a lab, and they charge you 1200.00$ If you have insurance, and the provider has a contract with that insurance (meaning 'they take them'), the contract limits what they can charge and what the will get. For the example, that might be 21.56$. This is what the insurance pays them (or what you pay them, if you have deductible). Note that if you have no insurance, you owe them 1200.00$. They are typically willing to negotiate that you only pay maybe 850.00$, but it still will be much higher than the insurance price. Why? The reason is that the insurance-agreed payment of 21.56$ does not cover their cost (but the insurance forces them to make that contract or basically be out of business). Let's say for example they need 26.56$ to make a living on it; so they lose 5.00$ on every insured customer. One in 235 customers has no insurance, and his price is calculated as 26.56+235*5.00 = ~1200.00$, so his bill covers the losses for all insured 'under-payers' (all numbers are examples made up to illustrate the math the provider does). My bloodwork typically comes between 800 and 1400, and gets reduced to around 20: so the numbers are not completely off. The ratio and concept works for doctors and hospitals the same, just not as significant a difference.",
"title": ""
},
{
"docid": "8c8ca4077f27a86a88ff81a4d00b991b",
"text": "I bought Health Insurance for myself after a period without it, and my premiums were not terrible. I was a 27 year old man, living in California, no preexisting conditions, and I paid approximately 90$ a month. This was for a standard Health Insurance plan. However, when I moved back to NY a little while later, insurance companies wanted almost $500/month for catastrophic coverage. So, from personal experience, my answer is that price varies widely by state. Different states have different regulations as to what Health Insurance Companies need to cover and at what price. In NY, Health Insurance companies can't charge different rates according to age. Also, in NY, there is a price spiral, where the price is so high, few people buy it, so they have to raise the price because not enough well people are in the pool, so fewer people buy it.... To test it out, go to an online insurance broker, like ehealthinsurace, and put in your proposed information, including that you haven't been covered for a period. This way you will know.",
"title": ""
},
{
"docid": "10dad58de53089d15cf755545b887fc9",
"text": "\"There really isn't any good ways that I'm aware of. (The exception is in New York or California, where hospitals must post prices.) The law sets price floors on many procedures by setting Medicare and Medicaid reimbursement rates. As a result, the \"\"list price\"\" for a given procedure is dramatically inflated, and various health insurers negotiate rates somewhere in the middle. I'd recommend talking to the business offices or financial counselors at medical groups that you do business with. Ask about \"\"self pay discounts\"\" or other programs appropriate for folks in your position.\"",
"title": ""
},
{
"docid": "07bc2c7918c691c5b0e5749c90b126ab",
"text": "This will likely cause either (a) running out of funds in HSA #2, as the aggregate $6500 limit is nearing (b) an over-contribution situation between HSA #1 and HSA #2. .... 2014 HSA contributions are under the limit by $3000. 2015 expenses currently sit at about $3000. The solution is to stop putting money into HSA #2 so that you don't go over the aggregate limit for this tax year; But then using the money in HSA #1 to pay the medical costs. If the person making the contribution had the ability to put money into either HSA then they should have the ability to spend that money from either account. I realize the goal of the April transaction was to be able to effectively put $9500 into the HSA system in CY 2015. With the transaction that missed the deadline by seconds that opportunity is lost. But any medical costs that can be paid with money in HSA #1 should be paid for with money from that account. You don't have to keep funds in HSA #1, while worrying about HSA# 2 running out of funds. The beauty of an HSA is that you can continue to pay medical expenses out of an account for years after you no longer have a High deductible insurance plan. It can even be used in retirement.",
"title": ""
},
{
"docid": "318d1517ba7429f4cad193d5cae9c59d",
"text": "If you are disputing the size of the charge for specific services, like you think that they overcharged for lab work, you can try disputing it with the business office staff at the doctor's office. If, on the other hand, you just think that the overall bill is too expensive then you really only have one option. You can ask if they will reduce the bill for you. Most hospitals and clinics I've dealt with have programs set up for this, but you usually access them by filling out paperwork demonstrating financial hardship (along with supporting documents). It never hurts to ask. But with the services already rendered the only person with an interest in reducing the bill is you. The reduction, if any, will probably depend on what the clinic thinks your ability to pay is compared with the cost to them of pursuing you for payment, as well as the amount of funding they have for bill reduction. When I worked in the financial services office of a hospital a $400 bill would not even have been reviewed for discounting-- the balance would be too low to devote staff time to reviewing. It's frustrating, and even asking in advance might not have given you accurate (or any!) information on what the cost of the visit would be, so your ability to shop around is limited. Unfortunately, that doesn't give you any additional options in this case.",
"title": ""
},
{
"docid": "103e788a721ad7bd848850ab6c53da9d",
"text": "You can't roll her HSA account into yours, but you can roll her HSA account into another HSA account that is hers. A $5 per month fee for an HSA account is ridiculous. Find another account that has no fees, and move the money there. I suggest talking to your local credit union.",
"title": ""
},
{
"docid": "8faeaeb7d78b24749f2e3f0d57201e74",
"text": "\"Michael McGowan's answer is correct. The HDHP is like conventional insurance -- it is not like a \"\"health care plan\"\" that we're all used to. I.e. you don't want to have it pay out -- if it pays out, something bad has happened to you. (Just like you hope to never make a claim on your homeowner's, disability, or AD&D insurance -- that means something bad happened to you.) There are minor exceptions -- some HDHPs may cover preventive care, immunizations, etc to some extent. The bonus in the case of the HDHP is that you get to put money to cover the deductible into a tax deferred account. The HSA is effectively a self insurance fund with the HDHP as backup. Here's a concrete example. Say you have an HDHP with a $2500 deductible. The monthly premium is $500. You put $3000 into your HSA. Scenario 1: You remain mostly healthy throughout the year. You have a single doctor's visit, the doctor's office submits a claim to your insurance. The insurance doesn't pay because you haven't met your deductible, and you get a bill for $150. You write the doctor a check for $150 out of your HSA. Here, you've spent $6000 on your HDHP premiums, contributed $3000 to your HSA, and spent $150 of that on health care. At the end of the year, your HSA balance is $2850. In the following year, assume you plan to contribute another $3000 to your HSA. You can increase your deductible on the HDHP to $5000 (since you'll have $6000 in your HSA to cover out of pocket costs) and your monthly premium might go down to $400. Scenario 2: You are hospitalized for a week. The hospital submits a $15000 claim to your insurance. The insurance pays $12500 since your deductible is met after $2500. The hospital sends you a bill for $2500 for the balance. You write a check to the hospital out of your HSA. Again, you've spent $6000 on your HDHP premiums and contributed $3000 to your HSA. At the end of the year, your HSA balance is $500. Scenario 3: You are hospitalized for two days in December 2011, and then again for two days in January 2012. Your deductible reset on January 1, 2012. The hospital submits two claims to your insurance: one in 2011 for $5000 and one in 2012 for $5000. The insurance company pays $2500 on the first one and you get a bill for the other $2500. Same thing for the second one -- you've got to meet the deductible all over again. You write the hospital a check from your HSA to pay the first one. Then you've only got $500 left in your HSA. But you were planning to make another $3000 HSA contribution for 2012 anyway, so you make the contribution, write a $2500 check to pay the second bill, and you've now got a balance of $1000 in your HSA -- and since you've met the deductible for 2012 you should have no more out of pocket expenses. (Assuming your plan doesn't have copays.)\"",
"title": ""
},
{
"docid": "28fbd6147331296e24091a48b5f615a7",
"text": "It is important to understand that when or before you received services from your medical provider(s), you almost certainly signed a document stating that you understand that you are fully responsible for the entire bill, even though the provider may be willing to bill the insurer on your behalf as a service. In almost all cases, this is the arrangement, so it is very unlikely that you will be able to dispute the validity of the bill, since you did receive the service and almost certainly agreed to be fully responsible for the payments. With regard to the discounts, your medical provides have likely contracted with your insurer to provide services at a certain price or discount level, so I would base all of your negotiations with the providers and/or the collectors on those amounts. They can't legitimately bill you for the full amount since you are insured by a company they have a contract with, and you are not self-pay/uninsured, and the fact that they haven't been paid by your insurer doesn't change that, because the discount likely depends on the contact they have with your insurer and not whether or not they are billed/paid by your insurer. Please note - this is a common arrangement, but I'd recommend that you verify this with your insurer. Unfortunately, payment in 90+ days is often typical by insurance standards, so it's not yet clear to me whether or not your insurer has broken any laws such as a Prompt Pay law, or violated the terms of your policy with them (read it!). However, you need to find out which claims rep/adjuster is handling your claims and follow up with them until the payments are made. It's not personal, so make this person's life miserable until it is done and call them so often that they know it's you by the caller ID. I would also recommend contacting the collector(s), and letting them know that you don't have the money and so will not be able to pay, provide them with copies of the EOBs that state that the insurance company plans to pay the providers, and then ignore their calls/letters until the payments are made. When they call, simply reiterate that you don't have the money and that your insurance company is in the process of paying the bills. You have to expect that you will be dealing with a low-paid employee that is following a script. You are just the next person on their robo-call list, and they are not going to understand that you don't have a pile of money laying around with which to pay them, even if you tell them repeatedly. Make sure that you at no point give them access to any of your financial accounts, such as a checking or savings account, or a debit card - they will access it and clean you out. It is likely that your insurance provider will pay the providers directly since they were likely billed by the providers originally. If the providers have sold the debt to the collectors (and are not just employing a collector for debt they still own), you may have to follow up with the providers as well and make sure that the collection activity stops, since the providers may also need to forward the payments to the collectors once they are paid by the insurance company. Of course, if the insurer refuses to pay the claims, at that point I would recommend meeting with a lawyer to seek to force them to pay.",
"title": ""
},
{
"docid": "64c4ccde4ee50cfa5b1328ff7781c804",
"text": "\"I had a similar issue take place at a hospital when the repeatedly billed the \"\"wrong me\"\" -- a stale insurance record left behind from when I was a dependent on my parent's insurance a decade earlier. They ended up billing me for anesthesia when I had a major surgery (everything else was billed to the correct insurance.) The outsourced billing people were pretty unhelpful (not usually the case with hospitals), so I became the squeaky wheel. I sent certified letters, had my priest rattle the cage (it was a Catholic hospital) and eventually talked myself into a meeting with the VP of Finance, who started paying attention when the incompetence of his folks became apparent. Total cost: $0 + my time.\"",
"title": ""
},
{
"docid": "92684484641f09e228eeba932d866970",
"text": "HSA rules are different in some regards than deductions allowable under Pub 502 which deals with medical expenses deductible in Schedule A of your tax return. Pub 969 governs HSA's and similar reimbursement plans, and the guidelines are as follows: Insurance premiums. You can’t treat insurance premiums as qualified medical expenses unless the premiums are for: -Long-term care insurance. -Health care continuation coverage (such as coverage under COBRA). -Health care coverage while receiving unemployment compensation under federal or state law. -Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). Since your wife is still being treated like an employee for health benefits, and you are not on COBRA, thus not eligible for a deduction. You may qualify under the unemployment provision depending on the cause of her disability.",
"title": ""
},
{
"docid": "a5209b3b8266ca522fdb34aa7dc6fe7e",
"text": "\"Calling this \"\"strange\"\" is an understatement. I'd call it illegal. You can't pay healthcare premiums with HSA funds while you are employed (unless you are on COBRA), and if you over contribute you pay a 6% tax on the overage unless you correct it. Furthermore, overage contributed by an employer must be treated as taxable wages, so they'd be better off just calling it a bonus and writing you a normal check. At least that way you wouldn't have to pay the 6% penalty on top of taxable wages.\"",
"title": ""
}
] |
fiqa
|
cbb993c3b92255784f9f54c58eaae4f1
|
How hard for US customers make payments to non-resident freelancer by wire transfer?
|
[
{
"docid": "486420b297d6d92642fa8c90ebcd3bc2",
"text": "\"Can you tell me please, is it really hard to make international wire transfer for payment my job and can i resolve this problem without using third party services? This is mostly a barrier, the form at times is quite complicated. For Russia, one has to enter \"\"Purpose of remittance\"\" ... at times select intermediate banks, give BIC and other details. This can become unnerving to people who are not used to it. The other option you can try is set-up a credit card gateway and get funds via cards.\"",
"title": ""
},
{
"docid": "2190cf18cdde2e8a1cdaa6bdf6594688",
"text": "For most major banks, wire transfers are simple, if expensive, to arrange. For example, I can initiate an international wire transfer from my online banking portal.",
"title": ""
},
{
"docid": "5706a76e215eb414bc676ff79db9c98f",
"text": "I would look for an alternative wire transfer service that will charge less. I use ofx, but note that they don't do transfers to roubles. The rate adjusts by amount being transferred and there is a $15 fee for under $5000. Upside is it is bank-to-bank. 2 days tops.",
"title": ""
},
{
"docid": "ac8abccf51bd6ddeaff31ce498e4be7b",
"text": "\"You are right in insisting upon a proper B2B contract in any business relationship. You wish to reduce your risk and be compensated fairly. In addition to the cost and complexity of international wire transfers, the US companies may also be considering the fact that as an international contractor in a relatively hard-to-reach jurisdiction, payments to you place the company at higher risk than payments to a domestic contractor. By insisting upon PayPal or similar transmitters, they are reducing their internal complexity and reducing their financial exposure to unfulfilled/disputed contract terms. Therefore, wire payments are \"\"hard\"\" in an internal business sense, as well as in a remittance transfer reporting sense. The internal business procedure will likely be the hardest to overcome--changing risk management is harder than filling out forms.\"",
"title": ""
}
] |
[
{
"docid": "c09e0ca4cba8ddc88883306ee7d79eac",
"text": "\"This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax (\"\"exit tax\"\") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA.\"",
"title": ""
},
{
"docid": "6d404e48a37707fb85892c3a278a7bd5",
"text": "I can only imagine the regulatory difficulty you're going through, and for that I empathize. First, bankers everywhere mostly do not know if a bank policy is due to regulation or internal rules. Other banks may be more flexible, but only the most reputable should be used. Re Paypal, they first deposit 1 USD and then withdraw it, but things may be different in Cyprus. Also, Paypal now has debit cards, so if Paypal is permitted to issue cards in Russia then it could presumably be used in Cyprus. Again, local regulation notwithstanding. Paypal now has phone support at the very back of their site, so I suggest a call to them. In countries that permit, Western Union can be used to wire money into an account from cash. The Bitcoin route should be used as a last resort. You could wake up tomorrow losting 25% easy. The regulations are a distant second compared to this problem. With all of the above methods, there will be varying delays from days to weeks.",
"title": ""
},
{
"docid": "d1b56254525ee1a4d3bd61ecf5a539da",
"text": "Before answering specific question, you are liable to pay tax as per your bracket on the income generated. I work with my partner and currently we transfer all earning on my personal bank account. Can this create any issue for me? If you are paying your partner from your account, you would need to maintain proper paperwork to show the portion of money transferred is not income to you. Alternatively create a join Current Account. Move funds there and then move it to your respective accounts. Which sort off account should be talk and by whose name? Can be any account [Savings/Current]. If you are doing more withdrawls open Current else open Savings. It does not matter on whos name the account is. Paperwork to show income matters from tax point of view. What should we take care while transfering money from freelance site to bank? Nothing specific Is there any other alternative to bank? There is paypal etc. However ultimately it flows into a Bank Account. What are other things to be kept in mind? Keep proper record of actual income of each of you, along with expenses. There are certain expenses you can claim from income, for example laptop, internet, mobile phone etc. Consult a CA he will be able to guide and it does not cost much.",
"title": ""
},
{
"docid": "457d622371d738723f400eaa2f67c280",
"text": "frostbank.com is the closest thing I've found, so accepting this (my own) answer :) EDIT: editing from my comment earlier: frostbank.com has free incoming international wires, so that's a partial solution. I confirmed this works by depositing $1 (no min deposit requirement) and wiring $100 from a non-US bank. Worked great, no fees, and ACH'd it to my main back, no problems/fees. No outgoing international wires, alas.",
"title": ""
},
{
"docid": "bd6817e4cdc5230ba683aa08909bea15",
"text": "I would certainly hope to make the transfer by wire - the prospect of popping cross the border with several million dollars in the trunk seems... ill fated. I suppose I'm asking what sort of taxes, duties, fees, limits, &c. would apply Taxes - None. It is your money, and you can transfer it as you wish. You pay taxes on the income, not on the fact of having money. Reporting - yes, there's going to be reporting. You'll report the origin of the money, and whether all the applicable taxes have been paid. This is for the government to avoid money laundering. But you're going to pay all the taxes, so for transfer - you'll just need to report (and maybe, for such an amount, actually show the tax returns to the bank). Fees - shop around. Fees differ, like any other product/service costs on the marketplace.",
"title": ""
},
{
"docid": "2570c173435745bdfc94803f83bc1151",
"text": "Take a look at Transferwise. I find them good for currency conversions and paying people in India from a US bank account.",
"title": ""
},
{
"docid": "cd3098f5ce3f088f602a2d1842ad0caa",
"text": "Opening Bank Account in US without physically being present is difficult. I'm having number of clients in USA to pay for my work, but I’m really confused to get money from my clients to my saving bank account. You can get money via PayPal or if they are repeat customers, ask them to send via remittance services like Money2India or Remit2India etc.",
"title": ""
},
{
"docid": "a336e432920f71cf5cf7ca918fa8eb41",
"text": "I have a bank account in the US from some time spent there a while back. When I wanted to move most of the money to the UK (in about 2006), I used XEtrade who withdrew the money from my US account and sent me a UK cheque. They might also offer direct deposit to the UK account now. It was a bit of hassle getting the account set up and linked to my US account, but the transaction itself was straightforward. I don't think there was a specific fee, just spread on the FX rate, but I can't remember for certain now - I was transfering a few thousand dollars, so a relatively small fixed fee would probably not have bothered me too much.",
"title": ""
},
{
"docid": "c8af78310fdf6b53a1da087176b4ca5c",
"text": "\"My recommendation is to shop around for a bank that handles wire transfers in a more sensible manner. Many wire transfers are set up so that you do not need to go physically into a branch. The wire transfer system I use has me initiate the transfer online, then call a dedicated number with a pin to authorise the transaction (24/7/365). I'm on the other side of the world from where the money \"\"is\"\" initially - no branch visit required.\"",
"title": ""
},
{
"docid": "2b198461ba3b9f14c0cfd3e01b893a69",
"text": "I don't believe they're right. For international wire transfers you'd need either IBAN or SWIFT codes. I don't think any US bank participates in the IBAN network (mostly Europe and the Far East), so SWIFT is they way to go with the US. Credit unions frequently don't know what and how to do with international transactions because they don't have them that often. Some don't even have SWIFT codes of their own (many, in fact) and use intermediaries to receive money.",
"title": ""
},
{
"docid": "2870b87c3099cd3f536f33c2ba009d71",
"text": "Yes, a business account at Chase bank offers free incoming wire transfer fees when you keep a minimum balance of over 100k. It's the only one I have found.",
"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": "d494f736c2fe7c90d149b3ec3bbbcc0f",
"text": "There are several ways to minimize the international wire transfer fees: Transfer less frequently and larger amounts. The fees are usually flat, so transferring larger amounts lowers the fee percentage. 3% is a lot. In big banks, receiving is usually ~$15. If you transfer $1000 at a time, its 1.5%, if you transfer $10000 - it's much less, accordingly. If you have the time - have them send you checks (in US dollars) instead of wire transferring. It will be on hold for some time (up to a couple of weeks maybe), but will be totally free for you. I know that many banks have either free send and/or receive. I know that ETrade provides this service for free. My credit union provides if for free based on the relationship level, I have a mortgage with them now, so I don't pay any fees at all, including for wire transfer. Consider other options, like Western Union. Those may cost more for the sender (not necessarily though), but will be free for the receiver. You can get the money in cash, or checks, which you can just deposit on your regular bank account. For smaller amounts, it should be much cheaper than wire transfer, for example - sending $500 to India costs $10, while wire transfer is $30.",
"title": ""
},
{
"docid": "7d9579caffe876adaaec0604f08c7549",
"text": "Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.",
"title": ""
},
{
"docid": "56736602f21db5d09956941769bd03aa",
"text": "\"I think the issue here is the rules say that \"\"relevant current events in finance\"\" are acceptable when (I think) that wording is too loose. \"\"Current events in finance\"\" is just very, very general, and anything related to central banking, monetary or fiscal policy, global austerity, analysis of index movements, sovereign defaults (and speculation thereof) qualifies a \"\"current events in finance\"\" - so technically, the rules aren't being broken. I think that having the language tightened a bit would help set the subreddit tone a little more accurately.\"",
"title": ""
}
] |
fiqa
|
7034c7d5abcbbe4578b5fd5887163df9
|
Will a credit card issuer cancel an account if it never incurs interest?
|
[
{
"docid": "fbdffe4a8f914bd761a715600ff38b15",
"text": "While technically true, a card issuer can cancel your card for almost any reason they want, it's highly unlikely they'll cancel it because you pay your bills! There are many, many people out there that pay their bills in full every month without ever paying a cent in credit card interest. I wouldn't ever purposefully incur any interest on a credit card. Related anecdote: I used to have a credit card that I only used for gas purchases because they gave 5% off for fuel. The issuer eventually discontinued the program (I assume because people like me took advantage of it.) So while they didn't cancel my card, the bonus eventually went away. I miss that card. My conclusion: if you can take advantage of promotional rates, by all means, go for it. You don't owe them any favors. Enjoy it as long as it lasts.",
"title": ""
},
{
"docid": "83f6fc006957f8732e3190769ef95d2b",
"text": "Remember, the card company gets a percentage at the time of purchase, as well as any interest you let them collect from you. Yes, they're still making a profit on our accounts, and they can always hope that at some point we'll run up a high enough bill to be willing to pay some interest. They may kill completely inactive cards, since they need a bit of income to pay for processing the account. But if you're actively using it, they aren't very likely to tell you to go away (though they may change which plan(s) they offer you).",
"title": ""
},
{
"docid": "ce8df3b5edca7c3e7cf625537995bd2f",
"text": "Credit card companies are businesses. Businesses will make any decision that makes them money. So does it make them money to cancel your account? It's a simple cost-benefit analysis: you having an account with them will probably give them some benefit for very little cost to them. The only real cost associated with an open account is someone who uses the card but doesn't pay, but they're pretty sure you won't be doing that.",
"title": ""
},
{
"docid": "d6a60c618fd71bab36039cec4b9b3479",
"text": "\"I would think it extremely unlikely that an issuer would cancel your card for having an ADB of approximately zero. The issuer charges the vendor that accepts a card a percentage of the transaction (usually up to ~3%, AMEX is generally higher) - so they are making money even if you carry no balance on your card (the specific language for various vendor-side (acceptor) credit card agreements boils down to \"\"we are essentially giving you, the vendor, a short-term loan and you will pay us for it). This why you see credit-card minimum purchase amounts at places like hot-dog stands - they're getting nailed on the percentage. This is also why, when given the choice between \"\"Debit or Credit\"\" for a particular card, I choose where to put the hit on the company I like less - the retailer or the bank.\"",
"title": ""
},
{
"docid": "70cbde4e59f8d13443d6583130e5122e",
"text": "\"Speaking from personal experience: I have had a credit card canceled for exactly this reason. It's happened to me three times, with two different providers (NatWest and Nationwide). After the third instance I stopped bothering to even carry a credit card. It's worth noting that all three were \"\"free\"\" cards in the sense that I paid no flat fee or subscription to get the cards. The only way the issuer could make a profit on them was through interest. I was also not a frequent user, carrying the card for convenience more than anything else, although I did make purchases on all three. So it's certainly a possibility. But I live in the UK and I'm guessing most of your other respondents do not. It may be a practice that's more common here than in the US. That might even explain the origin of the rumour.\"",
"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": "90db26b89e8f2d04c74b31b6bfdaecf1",
"text": "\"When you buy something with your credit card, the store pays a fee to the credit card company, typically a base fee of 15 to 50 cents plus 2 to 3% of the purchase. At least, that's what it was a few years back when I had a tiny business and I wanted to accept credit cards. Big chain stores pay less because they are \"\"buying in bulk\"\" and have negotiating power. Just because you aren't paying interest doesn't mean the credit card company isn't making money off of you. In fact if you pay your monthly bill promptly, they're probably making MORE off of you, because they're collecting 2 or 3% for a month or less, instead of the 1 to 2% per month that they can charge in interest. The only situation I know where you can get money from a credit card company for free is when they offer \"\"convenience checks\"\" or a balance transfer with no up-front fee. I get such an offer every now and then. I presume the credit card company does that for the same reason that stores give out free samples: they hope that if you try the card, you'll continue using it. To them, it's a marketing cost, no different than the cost of putting an ad on television.\"",
"title": ""
},
{
"docid": "9f7337587c0c3c21534212f935bd1a75",
"text": "No, they won't cancel it because you pay your card on time. When a company offers a promotion like that they are banking on making money on average, not in every case. On average including all the benefits including transaction fees, deals for partnering with best buy, etc. Of course some people pay their credit card in full each month and never incur interest charges. However, credit card companies more than cover that with other people who aren't responsible. If it wasn't worth while they would end the card program or change it.",
"title": ""
},
{
"docid": "263b081812f14bbb807c1546864299e7",
"text": "Credit card merchant fees are $0.15 - $0.40 per transaction plus 1.5-4% of the amount charged. Card issuers are competing to get to be the card in your pocket that you use on a daily basis. If you were a card issuer, wouldn't you like to get 1.5-4% of every transaction I make for the rest of my life? As a side note, ever since I became a business owner and saw how much we are all paying for credit card merchant fees, I've patronized a lot more cash-only businesses. The best ones pass the savings directly on to the consumer.",
"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": "ba5b7274a04a768d3faedd8fe82590a8",
"text": "I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use.",
"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": "fe5cc026007dcec1e20591574cf671a4",
"text": "Nothing happens. A bank is a business; your relationship with the bank doesn't change because your visa or immigration status changes. Money held in the account is still held in the account. Interest paid on the account is still taxable. And so on. If the account is inactive long enough, abandoned account rules may apply, but that still has nothing to do with your status.",
"title": ""
},
{
"docid": "b78bdc8bb32ac7995eaa0d89932e56dc",
"text": "I read Q#4 as Will $250 in one account earn more interest than $250 in five accounts? in which case Excel says no, assuming a constant interest rate for all accounts. I dunno if the same holds true for banks.",
"title": ""
},
{
"docid": "44af6e62a7fd75f9cf9513658df55b90",
"text": "Trick question dude. Can't be done. Sorry to tell you. I've been hit with this. Credit card companies do not make money on these customers. Why does Amex have an annual fee on all cards and an abnormally large transaction fee for merchants? Because they don't allow you to carry a balance (On traditional cards). Meaning they don't make money on interest, like the customers in question here.",
"title": ""
},
{
"docid": "2c9c75c629be6d5071b24dbc148034f2",
"text": "Please realize that your issuer can close the account for any number of reasons. Inactivity is one, as having a credit line open costs them money and if you never charge anything, the company doesn't get any transaction fees from vendors nor does the company get to charge you any interest. An occasional charge is likely to keep your card from being closed automatically, but it is not a guarantee. Another reason they may close the account is that you have other bad marks show up on your credit score, or their criteria for offering you the card change so you no longer match their target demographic. I have a credit card issued by my credit union that I have not used for a couple of years. They will not close the card account because my other accounts are still very profitable for them. If I were not an otherwise profitable customer, I wouldn't be surprised if they closed my credit card account. If you are serious about keeping the account open, you should probably have more than a trivial amount of usage.",
"title": ""
},
{
"docid": "386fd11dd18a3fd9cb22b2a151054c16",
"text": "As noted above, this is likely going to need (several) lawyers to straighten out. I am not a lawyer, but I think one should be retained ASAP. However, in the meantime: The authorized user should not be making any charges. Continuing to do so at this point may be a criminal offense. For the protection of any other heirs, this should be brought to the attention of the credit card issuer and law enforcement authorities. As it stands, the account holder's estate will be liable for the full debt, and the authorized user's estate would be untouched. Of course, all this could change if other heirs challenge the estate and file civil suits, in which case it's likely that both estates will be eaten up with legal fees anyway.",
"title": ""
},
{
"docid": "f7a54ca9b45f248ad3c03b5eb173e2a2",
"text": "There are three parties involved here: there's the store that issued you the card, then they have some bank that's actually handling the account, and there is some network (VISA, MasterCard, etc.) that the transactions go through. So one avenue to consider is seeing whether all three are aware of you canceling the card.",
"title": ""
},
{
"docid": "1345b65ced89ddf7e9442434148c23c0",
"text": "\"No. That's pretty unlikely. Card issuers typically base your rate on your credit score. Paying down debt reduces your percent of available credit used, and improves your score until you are in the 1-20% range. That's optimum. To this issuer, you are one of a million customers, there's no emotion in this, just numbers to them. For what it's worth, if a card issuer raises your rate, you are permitted to \"\"not accept\"\" the rate, stop using the card for new charges, and pay at the current rate. Of course this doesn't apply to zero interest deals, only to increases to your regular rate.\"",
"title": ""
},
{
"docid": "43e4ed84fdb1f925cabfef36d8b03482",
"text": "\"Whether or not the specific card in question is truly 0% interest rate for the first 12 months, such cards do exist. However, the bank does make money out of it on the average: Still, 12 months of not having to think about paying the bill. Nice. This is exactly what they want you to do. Then in 12 months, when you start thinking about it, you may find out that you don't have the cash immediately available and end up paying the (usually very large) interest. It is possible to game this system to keep the \"\"free\"\" money in investments for the 12 months, as long as you are very careful to always follow the terms and dates. Because even one mishap can take away the small profits you could get for a 12 month investment of a few thousand dollars, it is rarely worth the effort.\"",
"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": "3773ece8f5c0f31e1ec6b511369b4a61",
"text": "Consider the following scenario at a small business: As a business owner I have 10k in the bank at the moment. I have a one time expense of 4k that will not directly impact the growth of my business. I can choose to pay the 4k out of the 10 in the bank and then put the rest towards business growth. Assuming a 10% annual return on capital at the end of this transaction I am left with $6,600. Now if instead I chose to pay the 4k with a business credit card I have that only carries a 7.9% interest rate what would happen is that I incur a 4k balance that I have to pay off in a year and put 10k towards my business. Now, this is a simplified case that does not take into account the effective interest on the card and the minimum monthly payments. That being said, what happens in the end of the year is that I owe $4316 to my credit card but I now have 11k in the bank, due to business growth. That leaves me with $6,684 after a year's worth of operations, which is better than my original $6,600. This is a small scale scenario though, but the basic idea is that if you can put the money towards growth that is better than the interest you are paying to the card, you win. The risks of course include missing a payment and incurring a penalty, not being able to grow your money at the rate you thought, and so on. Hope this explains things a bit.",
"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": "72d7a6d216b4547673d4a2207c7bb6c9",
"text": "Whether or not you have money in your account will not necessarily stop them withdrawing the money, and it certainly won't stop them attempting to withdraw the money. There are two possible scenarios when they attempt to withdraw the money (as they surely will): I think you are just lucky they haven't attempted the withdrawal yet. Put the necessary money into your account now if you possibly can, and consider this a slightly expensive lesson learned about following the Ts and Cs when cancelling services.",
"title": ""
},
{
"docid": "b4667ca0b508c1213651893932ccb69e",
"text": "\"Understood. But based on the OP, it's not categorically clear what they were refusing. If they refused to quote the balance and/or refused to take a phone payment that was otherwise in keeping with the cardholder agreement (i.e., the cardmember called the correct number for phone payments and balance-checking, etc), then yeah, they were not only being unreasonable, but also violating the contract. What I read as ambiguous is whether the cardholder was specifically asking for the *payoff* balance/amount, and whether they were following process for phone-payments and balance-checking, etc. IOW, it's not necessarily \"\"illegal\"\" and might not even be unreasonable for the customer-service number to have different departments for balance-checking and phone-payments versus card-cancellation. It's not falsifiably clear from the OP that the cardholder was not asking the person on the other end of the phone for categorical statements of fact that they were obligated to make. I'm not accusing anyone of lying or saying that the CC company was acting reasonably, I'm just saying that language such as **\"\"They do not provide mid-cycle payoff quotes\"\"** is not evidence that they were doing any kind of funny-business.\"",
"title": ""
},
{
"docid": "0821dcd83a9983f7199d0359f5617117",
"text": "\"There is no good proxy for VIX, because it is a completely made-up value. Most listed options trade on an underlying security. I can therefore choose to buy either the stock, or a future or option on that stock. In this way, the future and option are derivatives in that they derive their value (in part) based on something else, in this case the stock price as of now. VIX is a different entity altogether. It is based on the volatility of the market, using \"\"market expectation of near term volatility conveyed by stock index option prices\"\". But the FAQ goes on to state that they are adding factors into the formula. So right away there is no one equity/stock that you can hold that will necessarily match the VIX in any significant way, because it is not directly based on stocks, but indirectly through other options and computations. In effect, therefore, the VIX in indeed only available through its options, and is not observable (tradable) in and of itself.\"",
"title": ""
}
] |
fiqa
|
0b0fff27bc82ab414f257b759ff487d7
|
Can LLC legally lend money to a friend?
|
[
{
"docid": "1e33a2ea1151bf86ea9a137d83f33a1d",
"text": "\"One thing I would add to TTT's answer: One of the benefits of using an LLC for your business is right there in the name - \"\"limited liability\"\". It provides a level of protection for your personal assets should your business go bankrupt, get sued, and so forth. However, if someone can show that there's no real separation between your LLC's activities and your personal activities, then they can \"\"pierce the corporate veil\"\" and go after your personal assets. If this loan is really purely personal and not related to your business activities, you may create a paper trail that can later be used in this way. My advice would be to just avoid the whole thing and make the loan from personal funds. I don't see any upside to doing this out of the LLC funds.\"",
"title": ""
},
{
"docid": "b74b01f700c046fa5658bca7ef5ff164",
"text": "Legally, I can't find any reason that the LLC could not lend money to an individual. However, I believe the simplest course of action is to first distribute money from your company to your personal account, and then make it a personal loan. Whether the loan is done through the business or personally, financially I don't think there is much difference as to which bucket the interest income goes into, since your business and personal income will all get lumped together anyway with a single person LLC. Even if your friend defaults on the loan, either the business or you personally will have the same burden of proof to meet that the loan was not a gift to begin with, and if that burden is met, the deduction can be taken from either side. If a debt goes bad the debtor may be required to report the debt as income.",
"title": ""
},
{
"docid": "34382b5ccbd0784cccad6c8ccda930c3",
"text": "I can't say if there is anything specific that makes lending illegal, but if your company goes bankrupt, you might end up in trouble. First, it's a loan. It must be repaid. It must be in the books as a loan, and if your company couldn't pay its bills, you would have to ask for the money back. If the company goes bankrupt, your creditors will ask for the loan to be repaid. Now if things are worse, your company goes bankrupt, and the person cannot pay back the money, then you could get into real trouble. Creditors won't like that situation at all. They will claim that you moved that money aside to protect it from creditors. They might be able to force you personally to pay, or even start criminal charges against you if you can't pay either. In the UK (and probably elsewhere) it's criminal for the company to pay dividends if that means it cannot fulfil its financial obligations. If there is no money left because of that loan, then you can't get dividend payments from your company. So as long as your company's finances are fine, and that person's finances are fine, you will be Ok (except I don't know if you would need a license), but if there are financial problems then being an LLC might not protect you.",
"title": ""
},
{
"docid": "c6dbd951582b3e30962e024dba0282d1",
"text": "\"The answer to your question is...it depends. Depending on the state you, your friend, and the LLC are located in, it can be very easy to run afoul of state banking laws, or to somehow violate some other statute pertaining to the legal activities an LLC may undertake by doing something like a loan. It is not unusual (or illegal) for officers or employees of a business entity to be loaned money by the company they work for, so something of this nature wouldn't be an issue with regulatory agencies. Having your LLC loan money to a friend who isn't an employee or officer of your LLC just might not be kosher though. The best advice I can give is that you should call the state banking commission or similar agency in your state and ask them whether what you want to do is alright. The LAST thing you want is to end up with auditors or regulators sniffing around your business, even if you haven't done anything wrong, and you certainly don't want to run the risk of accidentally \"\"piercing the corporate veil\"\", as someone else here astutely pointed out. Good luck!\"",
"title": ""
},
{
"docid": "4da756e0afa4d1205ca5bb856feef866",
"text": "Tax accountant here. The money is yours and you can do what ever you want with it. Just make sure to put it on the books as Loan Receivable and have an Interest Income account.",
"title": ""
}
] |
[
{
"docid": "5f48aa8f7fddfe7025faa3ad2d8bab79",
"text": "\"Yes, it is possible. Although there may be red tape for a business account, Alliant Credit Union offers completely online signup and their representatives are reachable by email. You'll probably need to send in the LLC articles this way http://www.alliantcu.com/checking-accounts.html (as pointed out by @littleadv this site defaults to \"\"personal checking\"\" accounts, there is a business checking tab which doesn't generate a direct link, some might miss that) And even if there are a ton of regulations that some pencil pushers at larger banks anecdotally cite (without citing), there will be enough banks that don't care. Good Luck\"",
"title": ""
},
{
"docid": "ea9f9fc82183c4ddab03dc9c66889e9f",
"text": "Can he use an existing credit card in his name for all his business expenses, or does that pierce the corporate veil? That would be a question to a lawyer, since there's no definitive answer but rather circumstantial. Generally it is safer to separate the finances completely than to try and guess what the court would rule if it comes to that. It is not hard to get a separate card for a LLC (especially if it is a sole proprietorship). We are going to buy a house soon, so I don't want any extra inquiries. I guess it depends on the bank and the type of card. My Citi business card doesn't show up on my personal credit report.",
"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": "39fac01405b61176cd3e961c7a2eb120",
"text": "\"Legally ok? Sure. Friends frequently discuss financial matters, and share advice. This is quite far from taking money from them and managing it, where at some point you need to be licensed for such things. If you're concerned about giving bad advice, just stay generic. The best advice has no risk. If I offer a friend a stock tip, of course there's the chance the stock goes south, but when I tell a friend who asks about the difference between Mutual Funds and ETFs, and we discuss the expenses each might have, I'm still leaving the decision as to which ETF to him. When I offer the 'fortune cookie' soundbites like \"\"If you are going to make a large purchase, delay it a week for each $100 of value. e.g. if you really want a $1000 TV, sleep on it for a few months\"\" no one can mis-apply this. I like those two sites you mentioned, but the one-on-one is good for the friend and for you. You can always learn more, and teaching helps you hone your skills.\"",
"title": ""
},
{
"docid": "e5d08e321efc507002eba796822e1af0",
"text": "\"Is there any way through this? Yes, but you're not going to like it. If your friend has guaranteed the loans, then it's your friend's obligation to pay them when the brother-in-law is not cooperating. That's what it means to guarantee a loan. (Obligatory: \"\"Before lending your friends or family money, ask yourself which you need more.\"\")\"",
"title": ""
},
{
"docid": "41797a7a0a80f52bf584dfb4962ec917",
"text": "For cross-border transactions like this you should really take advice from an accountant or lawyer who specialises in them, because there may be tax treaties between the two that complicate the situation. However, in general borrowing money doesn't have tax implications in itself, and there's no limit as such. You do need to consider the following points: If this is zero or less than you could plausibly get commercially, your friend is effectively giving you the difference between the interest rates. If your friend in Korea has a connection to the US she or he may be subject to the gift tax. In practice this only matters if the total amount of gifts they give to anyone over their lifetime plus the size of their estate over their lifetime is large. Non US-persons are exempt though if the amounts are large enough they may need to be reported. Financial institutions are generally required to report large international transactions (typical thresholds are around $10,000) for scrutiny by the government, in case the transaction is related to something illegal. This shouldn't be a problem in itself but you should be aware it'll happen. It shouldn't make any difference how you transfer the money, but it would be wise to get as much documentation as possible in case of later questions. The best place to get further advice would be the US bank you'll be transferring the money into initially. This is really a question for a lawyer given the cross-border nature of the transaction, but you and your friend should sign a contract specifying how and when the loan will be repaid. Your friend should also consider setting up the loan as a mortgage and taking a charge on your home. Even if your friend trusts you, a charge on the home will protect him or her in the event of you having financial problems and another creditor laying claim to the home.",
"title": ""
},
{
"docid": "d76c00feba56517fbd458f3b54de4739",
"text": "\"My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a \"\"business\"\" decision is difficult. If a bank won't loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans.\"",
"title": ""
},
{
"docid": "58027dd226e3ccd44f3b4b10ae0a40ad",
"text": "You may want to start a company for a few reasons, the main one would be liability, you don't want your friend to drop a weight on a foot and sue you for millions taking your house away. You'd need to pay taxes on the income, that's after you pay all your expenses, bills, mortgage interest, insurance premiums (!), equipment depreciation. So it's going to be a lot less than you collect from your friends. Whether you incorporate or not you have to pay taxes on your income. If it's $200/year IRS may not notice that, if it's $20K a month it would be very hard to hide. If you pay your friends more than some amount (check the laws) you'd need to tell IRS about it (issue 1099-misc), then your friends must pay taxes on that income.",
"title": ""
},
{
"docid": "18d76b746ed3769358991611bceb11ab",
"text": "\"If it were a friend of mine, I'd do it without having any real qualms about it. If it were simply \"\"someone I knew\"\", probably not. Of course, if I trust them them enough to do that, I'd probably just give them the cash and let them pay me back in a day or two. (I'm imagining a scenario where I'm out with a few friends, for example bar hopping or at an event where most vendors require cash and we're talking an amount less than say $50. Any more than that, and I almost certainly would not agree).\"",
"title": ""
},
{
"docid": "ec55ffc0afb013f63119e61c57879329",
"text": "\"Personally, I avoid making business deals with friends and relatives. There's just too much of a possibility that things can go wrong. Let's assume that you're honest people and you have no intention of cheating your mother-in-law. Still, all sorts of things could happen that could make it difficult for you to repay the loan. You could lose your job. You could get some big medical expense. Etc. Then what happens? Then your financial problems become family problems. There's a strong temptation when people borrow from relatives to make paying the loan the lowest priority in their budget. \"\"I know I promised to pay \\$X per month, but things are really tight right now and Mom should understand.\"\" Maybe she does understand and can manage without it. But maybe not. And then it becomes a family fight. \"\"You promised you'd pay it back.\"\" \"\"And we will, we're having a hard time right now. Can't you just give us a break?\"\" Etc. Or she might have some extra expense, and say, \"\"Hey, can't you pay a little more this month? I really need some extra cash.\"\" \"\"I'm sorry, we're struggling just to make the regular payments, we can't.\"\" \"\"Well I was willing to loan you all this money. The least you could do is pay me back when I need it.\"\" Etc. You can end up ruining family relationships over money. Your wife can find herself in the position of having to choose whether to side with her mother or her husband. Etc. I'm sure plenty of people do things like this and it works out just great. But there are big risks. And by the way, apparently this was your idea, not your mother-in-laws. I wonder what her reaction is. Is she eager to help out her daughter and son-in-law and had nothing in particular to do with the money anyway? Or is she feeling very imposed on? It's one thing to ask relatives to let you borrow their car for the weekend. Asking someone to loan you $50,000 is a very big request. If one of my kids asked me to loan them $50,000 from my retirement fund, I'd consider that a very presumptuous request. (Unless they needed the money for life-saving surgery for my grandchild or some such.)\"",
"title": ""
},
{
"docid": "43b6a6314df58b5577773b462b416b10",
"text": "In order for you to be able to talk to the FTB on someone's behalf, that someone has to submit form 3520. Note that since you're not a professional, this form must be paper-filed (CRTP, EA, CPA or attorneys can have this filed on-line). Once the form is accepted by the FTB, you can contact the FTB on behalf of your friend. Pay attention: you're going to represent the partnership, not the individual.",
"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": "170f30bfa452e1d4d4dc1b3e35bba2df",
"text": "\"I'm sorry you are going through this, but what you are dealing with is exactly is how cosigning works. It is among other reasons why you should never cosign a loan for someone unless you are 100% prepared to pay the loan on their behalf. Unfortunately, the main \"\"benefit\"\" to cosigning a loan is to the bank - they don't care who makes payments, only that someone does. It is not in their interest to educate purchasers who can easily get themselves into the situation you are in. What your options are depends a fair bit on the type of loan it is. The biggest problem is that normally as cosigner you cannot force your friend to do anything. If it is for a car, your best bet is to convince them to sell the car and hopefully recoup more than the cost of the loan. Many workplaces have some sort of free service to provide counseling/guidance on this sort of thing. Look into your employee benefits as you may have some free services there. You can sue your friend in small claims court, but keep in mind: It also depends on how big the loan is relative to your income. While it might feel good to sue your friend in small claims court, if it's for $500 it probably isn't worthwhile - but if your friend just stopped paying off their $30k vehicle assuming you will pay for it, even though they can pay for it themselves?\"",
"title": ""
},
{
"docid": "83fa503ea90a4e5fea21255a9997700b",
"text": "\"A bank is a technology that allows society to consume now at the expense of later. Think about it this way: to consume later at the expense of now, all you have to do is save your stuff. If you want to eat pizza in a year, you can buy a bunch of pizza now, freeze it, then eat it a year later. Or you can hide money under your mattress now, and buy pizza a year later from now. But what if you want to eat pizza now, but you don't have the money to buy it? Well, you're stuck. There's no time travel: you can't go into the future and get resources from your future self to buy the pizza now with! Well, you could go to your wealthy friend who has a lot of pizza, and say, hey, if you give me pizza/money now, I will pay you back with more later! Except then your ability to get pizza/money depends on the whims of some really wealthy people who may not like you. And what if your wealthy friend really wants to keep all of his pizza? There is nothing you can do to get it now. A bank is an entity that can provide the resources/purchasing power for you to get your pizza now *without anyone in the economy eating less now as a result*. It does this via what is known as \"\"Fractional Reserve Banking,\"\" which is pretty simple. I borrow $100 from person A, keep $10 in reserve, then lend the remaining $90 to person B, who deposits it back into his bank. I keep $9 of person B's deposit in reserve, then lend $89 to person C, who deposits it in the bank, and so on and so forth. The total amount of purchasing power I can create is $1000 out of the initial $100 I borrowed from person A. As long as all my depositors don't all try to get their money out at once, society can essentially \"\"cheat time\"\" by pretending there is $1000 in existence when in reality there is only $100. Thus I have increased the purchasing power of the economy now at the expense of later (when the loans have to be repaid), and no one has to stop consuming now for me to do it! Note that this is not the typical academic answer. Neoclassical economists will say that banks are \"\"mere intermediaries\"\" between savers and borrowers. They are wrong. Banks provide the ability to consume now at the expense of later *even if no one in society is saving now*. That means when there is lots of lending going on, that we have an economic boom. But when there is little to no lending going on, and people are paying back their debts, we don't have as much (if any) growth.\"",
"title": ""
},
{
"docid": "5d727bbe03fcfac61e510d104ff4bcc7",
"text": "The Bobs tend to show up at the top of bubbles, then disappear soon after. For example, your next door neighbor who talks about Oracle in 1999, even though he doesn't know what Oracle does for a living. I don't think the Bobs' assets represent a large chunk of the market's value. A better analogy would be a spectrum of characters, each with different time horizons. Everyone from the high-frequency trader to the investor who buys and holds until death.",
"title": ""
}
] |
fiqa
|
328faf804ccd017aa6378bfae428812d
|
What is the purpose of endorsing a check?
|
[
{
"docid": "ac0b20c8304874761e678f1471937e40",
"text": "I actually had to go to the bank today and so I decided to ask. The answer I was given is that a check is a legal document (a promise to pay). In order to get your money from the bank, you need to sign the check over to them. By endorsing the check you are attesting to the fact that you have transferred said document to them and they can draw on that account.",
"title": ""
},
{
"docid": "ec5412057d995fa26c9d1cff9cdb278d",
"text": "\"The best reason for endorsing a check is in case it is lost. If the back is blank, a crooked finder could simply write \"\"pay to the order of \"\" on it and deposit it in his own account. You do not need a signature for the endorsement. The safest way to endorse a check is to write \"\"FOR DEPOSIT ONLY\"\" followed by an account number, in which case the signature is not needed. most businesses make up rubber stamps with this and stamp it the minute they receive a check. That way it has no value to anyone else. Depositing checks is increasingly going the way of the dodo. Many businesses today use check truncation - the business scans the check in, sends the digital image to the bank, and stores the check. I was surprised that Chase already has an applet for iPhones that you can use to deposit a check by taking a picture of it!\"",
"title": ""
},
{
"docid": "14dfd4204061a8a6f575f0f1353fff93",
"text": "In my experience, you don't need to endorse a check with a signature to deposit it into your account. You do if you are exchanging the check for cash. Businesses usually have a stamp with their account number on them. Once stamped, those checks are only able to be deposited into that account. Individuals can do the same. I have had issues depositing insurance and government checks in the past that had both my and my wife's name on them. Both of us had to endorse the check to be able to deposit them. I think this was some kind of fraud prevention scheme, so that later one of us couldn't claim they didn't know anything about the check.",
"title": ""
},
{
"docid": "e4bb54206a09e63cd0bbad0fe7cd0839",
"text": "Paper trail of who did the deposit. Less significant for a personal account, but a bigger deal for accounts that are used by multiple people (e.g. a corporate checking account).",
"title": ""
},
{
"docid": "bb4b664d7d653d25d5cef4db8c97622c",
"text": "So the bank can (theoretically) compare that signature to the ID you provide, showing that the names and signatures match and that you are the person to whom the check was written.",
"title": ""
},
{
"docid": "85a8fa3ea0118924eac2c26224b0fb5d",
"text": "\"I believe the banks are protecting themselves when they \"\"require\"\" your endorsement. Years ago. they used to ask for your endorsement, and not require it. If you endorse the check, it legally authorizes them to debit your account, if the check is later returned for non-sufficient funds (NSF). It mostly protects the bank, and not the customer.\"",
"title": ""
},
{
"docid": "9ca75fc446c7d0e5c9fb0348bb534e76",
"text": "When the check is deposited, the bank verifies the signature in the check matches your signature in file.",
"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": "606ca68af034a54c9ecd0d54095f38e3",
"text": "Look, listen, I'm talking about **fraudsters**, people intentionally manufacturing fake payroll checks, not the companies themselves doing it. You're missing the point! Making a check that looks legit is not hard, especially if the check itself is legit and the information on it is bogus. There is a lot of exposure when you hand out a check to someone, corporate or otherwise. You need to carefully reconcile them against what the amount was supposed to be. If you ever lose any checks you have to get those numbers cancelled immediately. It's an enormous hassle.",
"title": ""
},
{
"docid": "fd37e41c50ea2a8d652fddf4c8deb8b2",
"text": "\"Let me just add that while you don't need to write the date received on the back of the check, you could. Why? Let's say someone was late in paying you and you wanted to document the fact that they were late. I've had late-paying customers send me a check dated on the due date but really they just pre-dated the check and sent it 60 days past-due. So let's say I want to establish and document the pattern in case it becomes a future legal issue. When you deposit or cash a check, an image of the front and back is made and the person or company who issued the check will have those images stored as part of their transaction history. (It used to be that the original, physical, cancelled check was returned to the payer, but that was another era.) So write the date received on the back next to the endorsement, endorse the check, and take a photo of the front and back (along with the postmark on the envelope) to document that they are a late payer. This way, if it ever becomes a \"\"he said she said\"\" issue you can easily show they have a history of paying late. If the payer looks at their check images they'll see your received date note next to the endorsement. Granted, this is a lot of trouble for a unique situation. In 20+ years of running a business I've actually had the foresight to do this a handful of times with habitual offenders, and in (only) one case did it come in handy later on. But boy was I glad to have those photos when I needed them.\"",
"title": ""
},
{
"docid": "61b85cead5d73582e622371bb6e9a673",
"text": "It's safe. You give people those numbers every time you write a check. If a check is forged, and doesn't have your signature on it, the bank has to return the money to you; they get it back from the other bank, who takes whatever action it deems necessary against the forger. They've been doing this for a few hundred years, remember.",
"title": ""
},
{
"docid": "c7f899827d3aae4754d6c612163051a6",
"text": "Typically your paychecks are direct deposited into your bank account and you receive a paycheck stub telling you how much of your money went where (taxes, insurance, 401k, etc.). Most people use debit or credit cards for purchases. I personally only use checks to transfer money to another person (family, friend, etc.) than a business. And even then, there's PayPal.",
"title": ""
},
{
"docid": "d8ece65eb6ec4ccdf42ad3ecc6bfaf9a",
"text": "Merchants are only supposed to verify the presence of a signature, which signifies that the card owner has accepted the terms and conditions of the card / account. It was never really intended to be used to authenticate the card holder, nor is it used as such in practice.",
"title": ""
},
{
"docid": "50d8baa527dda7e3d14ef76cae41eb8f",
"text": "As long as someone is willing to take it, you can write it! I personally wrote a check for a new car. The dealership didn't bat an eye.",
"title": ""
},
{
"docid": "c01a70db78b356422e72671b7b7ed0da",
"text": "If it is more convenient for you - sure, go ahead and create another account. Generally, when you give someone a check - the money is no longer yours. So according to the constructive receipt doctrine, you've paid, whether the check was cashed or not. The QB is reflecting the correct matter of things. It doesn't matter that you're cash-based, the money still laying on your account because you gave someone a check that hasn't been cashed - is not your money and shouldn't be reflected in your books as such.",
"title": ""
},
{
"docid": "8d2cf8541b931e8a26eafd7f3a524b83",
"text": "This might be blasphemy in the context of an audience that may be most focused on the gift itself, but you should be donating in a manner that helps advance the landscape, as well as your particular favourite charity. Almost 90% of businesses are in the process of trying to move away from issuing and receiving checks, and several countries in the world have already stopped using them. Checks are inefficient, costly and in a resource constrained environment like that facing most charities, create an opportunity cost that is even higher than the manual processing cost that flows directly. As donors, we need to think about scale in a manner that many individual charities don't. Send your donation via ACH!",
"title": ""
},
{
"docid": "db9727bc51b56367e0c52dcca1121c14",
"text": "\"When banks would return the actual physical cheque, at least you had some printing / writing from the other bank on it, as some type of not-easily-Photoshopped proof. Now many (most?) banks don't return the actual cheques anyway, just an image of it - sometimes a low quality shrunken B&W photocopy-like image too. You'd have to check with a lawyer or court in your area, but I suspect any photocopy or image, as well as a written or carbon-copy duplicate, would not be good enough proof for a law court, since they could all be easily re-written or Photoshopped. So I don't think there's a real upside anyway. Only an official bank statement saying that the name/people written actually cashed the cheque might be \"\"good evidence\"\" (I'm having doubts that the bank's own low quality \"\"image\"\" would even qualify, unless it's verified as coming directly from the bank somehow). I'd agree with Nate (+1) that a big downside could be identity theft, either online or alongside phone loss/theft.\"",
"title": ""
},
{
"docid": "a94776ff15107b4078eabd2f71906a41",
"text": "\"Welcome to the 21st century, the New Order. Forget all that legal mumbo jumbo you may have read back in law school in the 1960s about commercial code. Its all gone now. Now we have Check 21 and the Patriot Act !!! Basically what this means is that because some Arab fanatics burned down the World Trade Center, the US government and its allied civilian banking company henchmen now have total control and dictatorship over \"\"your\"\" money, which is no longer really money, but more like a \"\"credit\"\" to your account with THEM which they can do with what they want. Here are some of the many consequences of the two aforementioned acts: (1) You can no longer sue a bank for mishandling your money (2) All your banking transaction information is the joint property of the bank, its \"\"affiliates\"\" and the US Treasury (3) You can no longer conduct private monetary transactions with other people using a bank as your agent; you can only request that a bank execute an unsecured transaction on your behalf and the bank has total control over that transaction and the terms on which occurs; you have no say over these terms and you cannot sue a bank over any financial tort on you for any reason. (4) All banks are required to spy on you, report any \"\"suspicious\"\" actions on your part, develop and run special software to detect these \"\"suspicious actions\"\", and send their employees to government-run educational courses where they are taught to spy on customers, how to report suspicious customers and how to seize money and safe deposit boxes from customers when the government orders them to do so. (5) All banks are required to positively identify everyone who has a bank account or safe deposit box and report all their accounts to the government. (6) No transactions can be done anonymously. All parties to every banking transaction must be identified and recorded. So, from the above it should be clear to (if you are a lawyer) why no endorsement is present. That is because your check is not a negotiable instrument anymore, it is merely a request to the bank to transfer funds to the Treasury. The Treasury does not need to \"\"endorse\"\" anything. In fact, legally speaking, the Treasury could simply order your bank to empty your account into theirs, and they actually do this all the time to people they are \"\"investigating\"\" for supposed crimes. You don't need to endorse checks you receive either because, as I said above, the check is no longer a negotiable instrument. Banks still have people do it, but it is just a pro forma habit from the old days. Since you can't sue the bank, the endorsement is pretty meaningless because it cannot be challenged in court anyway. You could probably just write \"\"X\"\" there and they would deposit it.\"",
"title": ""
},
{
"docid": "a6a8bc7193252f2ccfec889fe8110dcb",
"text": "No, most check deposits are processed that way. Banks transmit the pictures of the checks between themselves, and allow business customers to deposit scans for quite some time now. I see no reason for you to be concerned of a check being in a dusty drawer, it's been deposited, cannot be deposited again. If you're concerned of forgery - well, nothing new there.",
"title": ""
},
{
"docid": "ce0a9f7ecf842854a8dec19929fdc32a",
"text": "\"It is your name, or the fictitious name under which you operate. For example, if your freelance front end is called \"\"Zolani the 13th, LLC\"\", then that's the name you want to appear on the check, and not \"\"Mr. John Zolani Doe\"\" that is written in your birth certificate.\"",
"title": ""
},
{
"docid": "1884d09a6e7e4786e5ba73997559dc1b",
"text": "In the united states, they may request a check written by the bank to the other party. I have had to make large payments for home settlements, or buying a car. If the transaction was over a specified limit, they wanted a cashiers check. They wanted to make sure it wouldn't bounce. I have had companies rebate me money, and say the maximum value of the check was some small value. I guess that was to prevent people from altering the check. One thing that has happened to me is that a large check I wanted to deposit was held for a few extra days to make sure it cleared. I wouldn't have access to the funds until the deadline passed.",
"title": ""
},
{
"docid": "dfd0d06afe8c24b08155be3de6a58234",
"text": "\"In my experience (in the US), the main draw of check-cashing businesses (like \"\"CheckN2Cash\"\" is that they will hold your check for a certain period of time. This is also known as a \"\"payday loan\"\". Rather than bringing them a check someone else has written you, you write them a check yourself, postdated, and they pay you the amount on the check less their fees, and agree not to cash the check until a future date. So if you don't have the money right now but you need it before your next payday, you visit a check-cashing business and get the money, and it'll be withdrawn from your account after your next paycheck.\"",
"title": ""
}
] |
fiqa
|
7752efe3efff9e9f6ad864700e2a69f5
|
Credit card statement dates follow pattern?
|
[
{
"docid": "3174bd88a6eb03c2c32fcf1803446a5f",
"text": "My guess: they are giving you a constant number of days between when the bill is sent and when it is due. Due dates are usually set either: same date each month IE the 3rd of each month. same day IE first thursday of the month. Note: due date might vary based on weekends. Number of days in the month - date on bill should be pretty constant if due date option #1 is being used. Note how Feb dates were usually earlier, since it is a shorter month.",
"title": ""
},
{
"docid": "18e1af1027d619f2518b7ce53d45abf1",
"text": "Check with your bank, usually a statement is either at the same day of month (e.g.: every 15th of the month), or every 30 days (e.g: March 15th, April 14th, May 14th, so forth). From my experience, most credit cards use the same day of month strategy. Keep in mind that if the day is not a business day (e.g.: weekend), the statement is closed either the previous or the next business day.",
"title": ""
},
{
"docid": "dd8c7409b7e8aa91eec22d0b56fdad7b",
"text": "Each bank is different. Usually in my experience for newer credit card accounts, there is a specific number of days in a billing cycle (something like 28) and then a 20-25 day grace period. Older accounts usually have 30+ day billing cycles. Back in the 90's, many cards also had 30-40 day grace periods. The language specific to your card is in the card agreement.",
"title": ""
}
] |
[
{
"docid": "dc87b8f551e2bc7d73efaf789f7007ef",
"text": "\"This question has been absolutely perplexing to me. It has spawned a few heated debates amongst fellow colleagues and friends. My laymen understanding has provided me with what I believe to be a simple answer to the originator's question. I'm trying to use common sense here; so be gentle. FICO scores, while very complex and mysterious, are speculatively calculated from data derived from things like length of credit history, utilization, types of credit, payment history, etc. Only a select few know the actual algorithms (closely guarded secrets?). Are these really secrets? I don't know but it's the word on the street so I'm going with it! Creditors report data to these agencies on certain dates- weekly, monthly or annually. These dates may be ascertained by simply calling the respective creditor and asking. Making sure that revolving credit accounts are paid in full during the creditors \"\"data dump\"\" may or may not have a positive impact on ones FICO score. A zero balance reported every time on a certain account may appear to be inactive depending on how the algorithm has been written and vice versa; utilization and payment history may outweigh the negativity that a constantly zero balance could imply. Oh Lord, did that last sentence just come out of my head? I reread it four times just make sure it makes sense. My personal experience with revolving credit and FICO I was professionally advised to: Without any other life changing credit instances- just using the credit card in this fashion- my FICO score increased by 44 points. I did end up paying a little in interest but it was well worth it. Top tier feels great! In conclusion I would say that the answer to this question is not cut and dry as so many would imply. HMMMMM\"",
"title": ""
},
{
"docid": "460dca0b3e5b5f08a08830116926fea6",
"text": "The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank.",
"title": ""
},
{
"docid": "9c94d24ea670df4c1baf45394ac352fa",
"text": "some of that article is misleading, some of it is just plain wrong. Very wrong... like you end up drawing an incorrect conclusion type wrong. Corporate transaction accounts, whose balances are up recently due to TAG (expires 12/31), are subject to reserve requirements. When you purchase something with a credit card, the bank's asset of your credit increases and the bank's asset of cash decreases (it goes wherever you purchased). There is no change to your deposit account and no change to reserves. The incoming bank's cash account and liability account associated with that business transaction account increase, and it is trivial to transfer the % of cash necessary to reach minimum reserve requirements to the Fed. Secondly, anyone with a smidgen of accounting can tell that his balance sheet won't balance.",
"title": ""
},
{
"docid": "0d7c6928d9b2a253a08cf3b3a17e050e",
"text": "It looks like their three months ending and six months ending June 30, 2012 income statements are the same?? Did they start April1, 2012? Anyways, it looks bad though that was the first quarter. Hard to judge if that's the case",
"title": ""
},
{
"docid": "d0068f26cba685778dddbd7871d4db30",
"text": "You are in luck, I have an ANZ credit card as well. I have just checked my paper statement with online, and was able to find a matching online statement in less than a minute. You simply click on your credit card account from the list of accounts. Under Date Range it will have the Current incomplete statement period. You simply click on the down arrow and select the last complete date range ending sometime in late April (depending on your credit card cycle). You then press on View next to the drop down box. This should provide you with a list of purchases and payment/credits for that period, followed by a line with your Credit Limit, Available Funds and Closing Balance. The line below that then shows your Due Date, and Overdue/Overlimit, the Minimum Payment and Amount Due Now If you are after paying only the minimum amount then you pay this amount by the due date (you will be charged interest if you only pay this amount). If, on the otherhand, you wish to avoid paying any interest then you need to pay the full Closing Balance before the due date. You should also be able to get electronic statements sent to your email address.",
"title": ""
},
{
"docid": "c03a09f06650bf57d78ea96446ea5f09",
"text": "Usually you want two consecutive quarters before declaring a recession. This blog doesn't reference any seasonal adjustment; a one or two month decline may be to any number of reasons. E.g. labor numbers dropped this month largely attributed to weather. I only see screen shots of excel sheets, I'm not willing to invest any time into parsing that out :(",
"title": ""
},
{
"docid": "334bff4f28f783af0492485b984f5c1e",
"text": "I'm in the US, and I can't speak for all credit cards, but I have done this in the past. I've paid extra on my credit card, and had a positive balance on my credit card account. The purchases made after paying extra were applied to the balance, and if there was money left over on the statement closing date, I didn't owe anything that month. Of course, I didn't incur any interest charges, but I never pay interest anyway, as I always pay my statement in full each month and never take a cash advance on my credit card. You could call your credit card company and ask them what will happen, or if you are feeling adventurous, you could just send them some extra money and see what happens. Most likely, they will just apply it to your account and give you a positive balance.",
"title": ""
},
{
"docid": "de3465af8fb591518d665a2084219520",
"text": "One's paycheck typically has a YTD (year to date) number that will end on the latest check of the year. I am paid bi-weekly, and my first 2012 check was for work 12/25 - 1/7. So, for my own balance sheet, brokerage statements and stock valuations end 12/31, but my pay ended 12/24. And then a new sheet starts.",
"title": ""
},
{
"docid": "a34e9337f07354d312028fd984a24ae9",
"text": "That all makes sense, but all of those things are the responsibility of the cardholder. If you want to pay off your balance, anything quoted would obviously not include any transaction yet to post. The problem is a creditor refusing to give the balance AND refusing to take a payment for an amount over the previous statement balance. This is essentially forcing the customer to pay more interest after they declare their intent to pay the full amount. Good points, but I don't believe those were factors in this case.",
"title": ""
},
{
"docid": "0a69573b10bc69c804febd5912f716dc",
"text": "\"There is no formula that can be applied to most variations of the problem you pose. The reason is that there is no simple, fixed relationship between the two time periods involved: the time interval for successive payments, and the time period for successive interest compounding. Suppose you have daily compounding and you want to make weekly payments (A case that can be handled). Say the quoted rate is 4.2% per year, compounded daily Then the rate per day is 4.2/365, or 0.0115068 % So, in one week, a debt would grow through seven compoundings. A debt of $1 would grow to 1 * (1+.000225068)^7, or 1.000805754 So, the equivalent interest rate for weekly compounding is 0.0805754% Now you have weekly compounding, and weekly payments, so the standard annuity formulas apply. The problem lies in that number \"\"7\"\", the number of days in a week. But if you were trying to handle daily / monthly, or weekly / quarterly, what value would you use? In such cases, the most practical method is to convert any compounding rate to a daily compounding rate, and use a spreadsheet to handle the irregularly spaced payments.\"",
"title": ""
},
{
"docid": "c7925c388a4ae383d3f58c8a67ecb5e9",
"text": "Maybe it's just because of the foundation date. If I start a company on August 1st, I would like its FY starts on that date too, in order to track my first whole year. Would be quite useless to finish my year on December, after just five months. I want to have data of my first year after a twelve months activity.",
"title": ""
},
{
"docid": "f161f4f33e996e418842ee5dd8e034b4",
"text": "Yes, you did. To give an example of the contract terms that allow this, the [Capital One credit card agreement](https://www.capitalone.com/media/doc/credit-cards/Credit-Card-Agreement-for-Consumer-Cards-in-Capital-One-N.A.pdf) states: > Credit Reports > > We may report information about your Account to credit bureaus and others. Late payments, missed payments, or other defaults on your Account may be reflected in your credit report. Information we provide may appear on your and the Authorized Users’ credit reports. > > If you believe that we have reported inaccurate information about your Account to a credit bureau or other consumer reporting agency, notify us in writing at PO Box 30281, Salt Lake City, UT 84130-0281. When you write, tell us the specific information that you believe is incorrect and why you believe it is incorrect. > > We may obtain and use credit, income and other information about you from credit bureaus and others as the law allows.",
"title": ""
},
{
"docid": "f34ae6731ec7e2a6fc4ab50ff0ac7e1e",
"text": "\"It has been reported in consumer media (for example Clark Howard's radio program) that the \"\"no interest for 12 months\"\" contracts could trick you with the terms and the dates on the contract. Just as an example: You borrow $1000 on 12/1/2013, same as cash for 12 months. The contract will state the due date very clearly as 12/1/2014. BUT they statements you get will take payment on the 15th of each month. So you will dutifully pay your statements as they come in, but when you pay the final statement on 12/15/2014, you are actually 14 days late, have violated the terms, and you now owe all the interest that accumulated (and it wasn't a favorable rate). That doesn't happen all the time. Not all contracts are written that way. But you better read your agreement. Some companies use the same as cash deal because they want to move product. Some do it because they want to trick you with financing. Bottom line is, you better read the contract.\"",
"title": ""
},
{
"docid": "481b8423ba7e31615b1775bafe7d3029",
"text": "I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!",
"title": ""
},
{
"docid": "bed8b2d05e6186d99205cd74037190f1",
"text": "Ok well in that case here are my thoughts. Its been a while since I've done this type of school work so hope it's right/helpful. AR Oustanding = Avg AR / (credit sales/Operating Cycle*) = 35 *I'm guessing they didn't give you sales for the year or else I would divide by 365 but since you mentioned operating cycle I'm assuming thats the sales number you were given. So you want to divide the sales by 50 and then times it by the 35. Should give you the average AR. Inventory - I really don't remember having to calculate this so I'm just thinking logically here. You should be able to take COGS divide by the days in the period then times it by In Invetory. So = (COGS/Operating Cycle)* In Inventory = (COGS/50)*15 Accounts Payable....man, I'm afraid to drive you in the wrong direction on this one. Avg Accounts Payable/(COGS/Operating Cycle) = 40 Plug in COGS, divide by the operating cycle, 50 then times by 40, the days vendor credit.",
"title": ""
}
] |
fiqa
|
21ad90087a78e70ca43479e5b1545d6d
|
How to properly collect money from corporate sponsors?
|
[
{
"docid": "0559a5f8e99aaed4115bf99f13583c7b",
"text": "http://www.legalzoom.com/business-management/starting-your-business/turn-your-calling Answering this, but I expect an expert to give an answer with some insight too There are many more steps, but not having done them personally I suggest you read the legalzoom.com site.",
"title": ""
},
{
"docid": "ac8916af592d24f229674bf1f89c93c2",
"text": "If this is something you plan to continue doing it would make sense to create it as it's own business entity and then to get non-profit status eg: 501c3. Otherwise I'm pretty sure you have to think of it as YOU receiving the money as a sole proprietor - and file a couple more tax forms at the end of the year. I think it's a Schedule C. So essentially if you bring in $10,000, then you spend that $10,000 as legit business expenses for your venture your schedule C would show no profit and wouldn't pay taxes on it. BUT, you do have to file that form. Operating this way could have legal implications should something happen and you get sued. Having the proper business entity setup could help in that situation.",
"title": ""
}
] |
[
{
"docid": "159ebc98bb6fd24aa4857ed919b18228",
"text": "Do I report it as income? Is it subject to just the same amount of taxes (~30%) as regular income? Are there any restrictions on how it can be used? It is income. You can deduct the costs of maintaining the web page and producing the software from it (have an accountant do that for you, there are strict rules on how to do that, and you can only deduct up to the income if its a hobby and not a for-profit business), but otherwise it's earned income like any other self employment income. It is reported on your schedule C or on line 21 of your 1040 (miscellaneous income), and you're also liable for self-employment taxes on this income. There are no restrictions, it's your money. Technically, who is the donation even being made to? Me, just because I own the webpage? Yes. This is for the United States, but is there any difference if the donations come from overseas? No, unless you paid foreign taxes on the money (in which case you should fill form 1116 and ask for credit). If you create an official 501(c) organization to which the donations are given, instead of you getting it directly, the tax treatment will be different. But of course, you have to have a real charitable organization for that. To avoid confusion - I'm not a licensed tax professional and this is not a tax advice. If in doubt - talk to a EA/CPA licensed in your State.",
"title": ""
},
{
"docid": "a8bf89a0d530f2ee38e176a9f9378954",
"text": "You can have a way for people to pay, i.e. some kind of payment gateway. Run as Business: Best create a company and get the funds there. This would be treated as income of the website and would be taxed accordingly. One can deduct expenses for running the website, etc. Run as Charity: Register as one, however the cause should be considered as charitable one by the tax authorities. Only then the donations would be tax free.",
"title": ""
},
{
"docid": "079146be252b00916828b6842bbca0da",
"text": "A public company should have a link for investor relations, which should help provide a trail of basis if this is a matter of company buyout, takeover, etc. This gets you close, but if you don't have an exact date, it will just be close, not exact. One clean way out of this, assuming the goal is to get rid of the stock and move on, is to donate the shares to charity. You will take the present value as a deduction, and be done. You can use a charitable gift fund such as those offered by Schwab or Fidelity, so if say, the shares are worth $20K, and you typically donate $5K per year, the fund lets you do this transaction at once, then send to the charities you wish over the next few years.",
"title": ""
},
{
"docid": "d3a07db7134b4aabb36326eddcc577d8",
"text": "\"I'd suggest you to separate \"\"doing good\"\" from \"\"earning profit\"\". Look at the guys like Warren Buffett and Bill Gates (or Carnegie and Ford for that matters). They understand that you can't reconcile the two goals, so they donate for free what they earned for profit. If you want to make a social impact with your money, you can check the charity programs that have a confirmed record of a positive impact on people's lives. Non-profits that studied such programs publish their results extensively: AidGrade compiles this research and suggests direct donations to the programs that demonstrated best outcomes per dollar invested:\"",
"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": "2b4d51623e06f6f39d4a88f52f500ac1",
"text": "First of all, I've raised VC money before so I have experience in this area. The other commenter who said they'll only cause trouble is wrong, as a general statement. Some may, but that just means you've chosen your investors poorly. Choosing an investor is a very important decision and you should choose someone who you think will be able truly add value to your business, rather than just someone who is willing to write a check. Cultural alignment is important, and having a shared set of goals and timelines for the business is important. That said, no one here is going to be able to tell you how to structure your deal because it varies so much based on the business. In general I think it's a good idea to only take money when you need it and have a solid plan for how you're going to use it. Every time you take money you're diluting your ownership and reducing your long-term upside. Keep in mind that, as the other commenter said, if you take a deal now that means that you maintain 51% and then you take more money in the future, that 51% will be diluted further. That said with more investors in the mix you still are likely to be the largest shareholder, but again, that depends on how the deals are structured. My advice: seek out as much advice from as many sources as you can. And hire a good law firm to handle your financing transaction because their advice is invaluable as you negotiate terms. Finally, you should have more conditions than just retaining 51% ownership -- there are a lot of terms that get baked into these deals that have an impact on the long-term upside. Learn those terms. Do a bunch of googling and a bunch of reading. And ask for more advice. :)",
"title": ""
},
{
"docid": "3ce0cded958ab5152aa0e84fd01f463f",
"text": "I know in the UK at least, 99% of the time even legitimate collectors don't work directly for the charity. They work for independent for-profit companies. The companies collect a large comission (around £50-£70) for every direct debit signup. The guy that knocks on your door will see very little of it. Have a look at this: http://blogs.mirror.co.uk/investigations/2005/08/just-6-for-eight-days-work-for.html The bags you get through your door for clothing donations are run on a similar basis - the clothes and profit go to a private company, which makes a donation to the charity out of their profits. Sometimes as little as 0.1% of your donation will go the charity. Always go direct to your chosen charity.",
"title": ""
},
{
"docid": "a06bd6c760994cbcb0a5f5e853084331",
"text": "As you own a company, you need to know what your role is. You can never just move money into or out of the company, you have to identify the role in which you are doing it, and do it properly. There is Company, and there is You, in three different roles. You are the sole shareholder and director of Company. You are the sole employee of Company. You are also just a private person. You need to keep these three roles separate. As the sole shareholder, you own the company. However, you don't own any assets of the company. The company is yours, but the money in its bank account isn't. As a private person, you give a loan to your company. You write on a sheet of paper that You personally, give a loan to the company, how much a loan is, what interest is paid, and when the loan will be paid back (that could be 'whenever You demands the money paid back'). Then you move the money from your private bank account to the company bank account, and the company has the money it needs to fund its operation. Assume it wasn't you who loaned the money, but I gave the loan to the company. You can imagine that I would have this loan written down and signed before I hand over the cash. And you must have exactly the same papers that I would have. How do you get money from the company? The company can pay back your loan. That should be written down again, in the same way as the loan itself was written down. Other than that, there are three ways how you can get money out of the company: The company can pay You, in your role as its employee, a salary, which it can deduct from its profits. The company can pay money into a pension of the company director (that's You in your role as company director) up to £40,000 or so a year; that money is deducted from its profits again. The company pays 20% tax on its remaining profits. Then the company can pay You, in your role as company director, a dividend, usually twice a year. Each of these payments has to be written down and given to HMRC properly. Best by far to use an accountant to do all the paper work for you and advice you what to do. You can lose a lot of money by just not getting the paperwork right, by filing late etc., which the accountant will get right. The accountant will also tell you what are the optimal amounts for salary and dividend (best is a small salary, about £10,000 a year, dividend of about £30,000 a year, pension as much as the company can afford, which is then all tax free to you). You can't pay more dividend then the company can afford (paying a dividend and then not being able to pay your suppliers is criminal), and if you want higher dividends, then you will have to pay taxes on them.",
"title": ""
},
{
"docid": "fb7429f700bf206a2c989ac07d7b563b",
"text": "From the employer side there are A LOT of legal duties attached to sponsoring a 401(k). If you are asking this question I would not suggest attempting to meet all of the regulations related to handling employee money internally. There are certain annual filings, periodic notices, accounting etc related to these kinds of plans, and the fines for non-compliance are extraordinary. You would be far better off seeking a separate vendor, in my opinion.",
"title": ""
},
{
"docid": "b48b96a62ca738ac2d397121a24ed968",
"text": "\"Note: I have no experience of attempting what is described below (neither am I a lawyer nor an accountant). The process may range from a \"\"small bureaucratic hurdle\"\" to a \"\"complex legal nightmare\"\". If it seems a plausible approach, you would probably be well-advised to reach out to others that have established CASCs for help and guidance. According to this HMRC page the two ways a body can claim Gift Aid is if either it is a recognised charity or if it is a Community Amateur Sports Club (CASC). So one option may be to try and establish a CASC. I suspect that this is unlikely to be an easy process, but may be a more likely approach than trying to get the council to establish a charity. The Register as a community amateur sports club (CASC) page on the HMRC site (very) briefly describes the steps; as you can see from their eligibility criteria, to register as a CASC, you would first have to create a \"\"Sports Club\"\" of some form that: has a formal constitution is open to the whole community and has affordable membership fees is on an amateur basis provides facilities in the UK is managed by \"\"fit and proper persons\"\" You would probably need the co-operation of the local council to allow the proposed sports club the use of the local park. One of the (several) requirements of becoming a CASC is that it must: So it could, in theory, be possible to spend money raised (through both membership fees and Gift-Aid-qualifying donations) on the improving the facilities of the park (tennis courts, bowling green etc.). However, note that How to Register page mentions (among many other requirements) the need to provide \"\"accounts from the last 12 months\"\" and \"\"bank statements from the last 3 months\"\". It doesn't (as far as I can see) explicitly state that the club must have been in existence for 12 months before applying for CASC status (it might be possible to send only what you have), but be aware that you may need to establish the club – and let it operate under its own steam – for a period before applying.\"",
"title": ""
},
{
"docid": "daaa039e808d165597234fd11e103a13",
"text": "Large and small universities have procedures in place regarding the use of the universities name, logo, facilities, and budget. They should have in place guidelines regarding the collection and use of funds from members, and participants. These guidelines are what allows you to have an account with the university. Generally these are not kept in the credit union but are with the university treasurer. I would approach this as if I knew nothing about how to get an officially recognized club or organization started. They should then provide you with all the rules and policies regarding money for student organizations. These policies may also discuss how to collect cash, checks, and credit cards. Some universities also allow the use of special card readers to process the special debit card attached to your university ID. The 10% fee charged by the university is typical. They will need to account for your funds, while maintaining their tax exempt status. If you get fully inline with their policies that will allow you to avoid tax issues.",
"title": ""
},
{
"docid": "b96288340f7a74edaf5cd6401bbece0e",
"text": "All of this assumes that this relationship isn't as employer-employee relationship, which would require you to withhold taxes. If you send them a small token of appreciation, and you are unable to record it as a business expense, or some other deductible expense, you don't have to be concerned about how they claim it. They decide if they want to risk claiming it was a gift, or if they want to record it as an expense. Even if you say some magic phrase that you think will impress the IRS, the recipient can still decide declare it as income. To have any hope of being able to treat it as a gift they would have to be able to demonstrate that there is a non-business relationship. If you can claim it as a business expense, or a deductible expense, they will have to also claim it as income; because your documentation could point the IRS to their lack of documentation. Giving them a check or sending the payment electronically will require them to claim it as an income, since an audit could require them to explain every line on their bank statements.",
"title": ""
},
{
"docid": "a0b4faa62bdcfa18c2e8cb9c42b88f0e",
"text": "\"You are correct that, barring an equity capital raise, your money doesn't actually end up in the company. However, interest in their stock can help a company in other ways; Management/board members hopefully own shares or options themselves, thus knowing that \"\"green\"\" policies are favorable for the stock price (as your fund might buy shares) can be quite an incentive for them to go green(er). Companies with above average company share performance are also often viewed as financially healthy and so creditors tend to charge lower interest for companies with good share performance. Lastly, a high share price makes a company difficult to take over (as all those shares have to be acquired) and at the same time makes it easier for the company to perform takeovers themselves as they can finance such acquisitions by issuing more of their own shares. There is also the implication that money flowing towards such green companies is money flowing out of/away from polluting companies, for these \"\"dirty\"\" companies the inverse of the previous points can hold true. Of course on the other hand there is quite an argument to be made that large enough \"\"green\"\" funds should actually buy substantial positions in companies with poor environmental records and steer the company towards greener policies but that might be a hard sell to investors.\"",
"title": ""
},
{
"docid": "e12650dde63327e43859e62268b8e470",
"text": "What does this have to do with capitalism? To me, this seems like the obvious move when the corporate tax rate is much lower in other countries. Politicians can only steal from you for so long before you start realizing you have other options. Maybe nike doesn't want to fund neverending war in the middle east? I know I don't. Yet my money is taken from me every year to fund it.",
"title": ""
},
{
"docid": "5ea83557af9a5d48e3d8b1794e9161bd",
"text": "If this is a business expense - then this is what is called reimbursement. Reimbursement is usually not considered as income since it is money paid back to you for an expense you covered for your employer with your after-tax money. However, for reimbursement to be considered properly executed, from income tax stand point, there are some requirements. I'm not familiar with the UK income tax law specifics, but I reason the requirements would not differ much from places I'm familiar with: before an expense is reimbursed to you, you should usually do this: Show that the expense is a valid business expense for the employer benefit and by the employer's request. Submit the receipt for reimbursement and follow the employer's procedure on its approval. When income tax agent looks at your data, he actually will ask about the £1500 tab. You and you'll employer will have to do some explaining about the business activity that caused it. If the revenue agent is not satisfied, the £750 that is paid to you will be declared as your income. If the required procedures for proper reimbursement were not followed - the £750 may be declared as your income regardless of the business need. Have your employer verify it with his tax accountant.",
"title": ""
}
] |
fiqa
|
44f173442d39961b111869c26d07bd62
|
Does longterm investment in index funds still make sense in a reality of massive algotrading?
|
[
{
"docid": "7f58c8fdc6d38c8d60399ba73aaa64bb",
"text": "What the automation mostly does is make short-term trading that much more difficult. Day trading is a zero-sum game, so if they win more, everyone else wins less. Long term trading (years to decades) is a positive-sum game; the market as a whole tends to move upward for fairly obvious reasons (at its basis it's still investing, which in turn is based on lending, and as long as folks make fairly rational decisions about how much return they demand for their investment and the companies are mostly producing profits there will be a share of the profit coming back to the investors as dividends or increased share value or both. Day-to-day churn in individual stocks gets averaged out by diversification and time, and by the assumption that if you've waited that long you can wait a bit longer if necessary for jitters to settle out. Time periods between those will partake of some mix of the two.",
"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": "5a5353cdeaaab9284846af6cae9b25d5",
"text": "Why wouldn't you expect a long-term profit? Say you buy 100 shares of company X, selling for$1/share today. You hold it for 20 years, after which it's worth $10/share (in inflation-adjusted dollars). So you've made a profit, only making two trades (buy & sell). What the algorithmic traders have done with short-term trades during those 20 years is irrelevant to you. Now expand the idea. You want some diversification, so instead of one stock, you buy a bit of all the stocks on whatever index interests you, and you just hold them for the same 20 years. How has what the short-term traders done in the intervening time affected you?",
"title": ""
}
] |
[
{
"docid": "642605635985e7e03e7dea5aa0e99d77",
"text": "Foreign stocks tend to be more volatile -- higher risk trades off against higher return potential, always. The better reason for having some money in that area is that, as with bonds, it moves out-of-sync with the US markets and once you pick your preferred distribution, maintaining that balance semi-automatically takes advantage of that to improve your return-vs-risk position. I have a few percent of my total investments in an international stock index fund, and a few percent in an international REIT, both being fairly low-fee. (Low fees mean more of the money reaches you, and seems to be one of the better reasons for preferring one fund over another following the same segment of the market.) They're there because the model my investment advisor uses -- and validated with monte-carlo simulation of my specific mix -- shows that keeping them in the mix at this low level is likely to result in a better long-term outcome than if i left them out. No guarantees, but probabilities lean toward this specfic mix doing what i need. I don't pretend to be able to justify that via theory or to explain why these specific ratios work... but I understand enough about the process to trust that they are on (perhaps of many) reasonable solutions to get the best odds given my specific risk tolerance, timeline, and distaste for actively managing my money more than a few times a year. If that.",
"title": ""
},
{
"docid": "1d78a5b716489ff3fa60038e90e411c1",
"text": "\"Don't put money in things that you don't understand. ETFs won't kill you, ignorance will. The leveraged ultra long/short ETFs hold swaps that are essentially bets on the daily performance of the market. There is no guarantee that they will perform as designed at all, and they frequently do not. IIRC, in most cases, you shouldn't even be holding these things overnight. There aren't any hidden fees, but derivative risk can wipe out portions of the portfolio, and since the main \"\"asset\"\" in an ultra long/short ETF are swaps, you're also subject to counterparty risk -- if the investment bank the fund made its bet with cannot meet it's obligation, you're may lost alot of money. You need to read the prospectus carefully. The propectus re: strategy. The Fund seeks daily investment results, before fees and expenses, that correspond to twice the inverse (-2x) of the daily performance of the Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day. The prospectus re: risk. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from twice the inverse (-2x) of the return of the Index over the same period. A Fund will lose money if the Index performance is flat over time, and it is possible that the Fund will lose money over time even if the Index’s performance decreases, as a result of daily rebalancing, the Index’s volatility and the effects of compounding. See “Principal Risks” If you want to hedge your investments over a longer period of time, you should look at more traditional strategies, like options. If you don't have the money to make an option strategy work, you probably can't afford to speculate with leveraged ETFs either.\"",
"title": ""
},
{
"docid": "81fd34136db8af0881a1428438fb5726",
"text": "\"Index funds may invest either in index components directly or in other instruments (like ETFs, index options, futures, etc.) which are highly correlated with the index. The specific fund prospectus or description on any decent financial site should contain these details. Index funds are not actively managed, but that does not mean they aren't managed at all - if index changes and the fund includes specific stock, they would adjust the fund content. Of course, the downside of it is that selling off large amounts of certain stock (on its low point, since it's being excluded presumably because of its decline) and buying large amount of different stock (on its raising point) may have certain costs, which would cause the fund lag behind the index. Usually the difference is not overly large, but it exists. Investing in the index contents directly involves more transactions - which the fund distributes between members, so it doesn't usually buy individually for each member but manages the portfolio in big chunks, which saves costs. Of course, the downside is that it can lag behind the index if it's volatile. Also, in order to buy specific shares, you will have to shell out for a number of whole share prices - which for a big index may be a substantial sum and won't allow you much flexibility (like \"\"I want to withdraw half of my investment in S&P 500\"\") since you can't usually own 1/10 of a share. With index funds, the entry price is usually quite low and increments in which you can add or withdraw funds are low too.\"",
"title": ""
},
{
"docid": "d551a112c05e7e4ad3cf68a202c506dc",
"text": "That is such a vague statement, I highly recommend disregarding it entirely, as it is impossible to know what they meant. Their goal is to convince you that index funds are the way to go, but depending on what they consider an 'active trader', they may be supporting their claim with irrelevant data Their definition of 'active trader' could mean any one or more of the following: 1) retail investor 2) day trader 3) mutual fund 4) professional investor 5) fund continuously changing its position 6) hedge fund. I will go through all of these. 1) Most retail traders lose money. There are many reasons for this. Some rely on technical strategies that are largely unproven. Some buy rumors on penny stocks in hopes of making a quick buck. Some follow scammers on twitter who sell newsletters full of bogus stock tips. Some cant get around the psychology of trading, and thus close out losing positions late and winning positions early (or never at all) [I myself use to do this!!]. I am certain 99% of retail traders cant beat the market, because most of them, to be frank, put less effort into deciding what to trade than in deciding what to have for lunch. Even though your pension funds presentation is correct with respect to retail traders, it is largely irrelevant as professionals managing your money should not fall into any of these traps. 2) I call day traders active traders, but its likely not what your pension fund was referring to. Day trading is an entirely different animal to long or medium term investing, and thus I also think the typical performance is irrelevant, as they are not going to manage your money like a day trader anyway. 3,4,5) So the important question becomes, do active funds lose 99% of the time compared to index funds. NO! No no no. According to the WSJ, actively managed funds outperformed passive funds in 2007, 2009, 2013, 2015. 2010 was basically a tie. So 5 out of 9 years. I dont have a calculator on me but I believe that is less than 99%! Whats interesting is that this false belief that index funds are always better has become so pervasive that you can see active funds have huge outflows and passive have huge inflows. It is becoming a crowded trade. I will spare you the proverb about large crowds and small doors. Also, index funds are so heavily weighted towards a handful of stocks, that you end up becoming a stockpicker anyway. The S&P is almost indistinguishable from AAPL. Earlier this year, only 6 stocks were responsible for over 100% of gains in the NASDAQ index. Dont think FB has a good long term business model, or that Gilead and AMZN are a cheap buy? Well too bad if you bought QQQ, because those 3 stocks are your workhorses now. See here 6) That graphic is for mutual funds but your pension fund may have also been including hedge funds in their 99% figure. While many dont beat their own benchmark, its less than 99%. And there are reasons for it. Many have investors that are impatient. Fortress just had to close one of its funds, whose bets may actually pay off years from now, but too many people wanted their money out. Some hedge funds also have rules, eg long only, which can really limit your performance. While important to be aware of this, that placing your money with a hedge fund may not beat a benchmark, that does not automatically mean you should go with an index fund. So when are index funds useful? When you dont want to do any thinking. When you dont want to follow market news, at all. Then they are appropriate.",
"title": ""
},
{
"docid": "f1049121ec177abfc5cd10991f71b76c",
"text": "Obviously, these numbers can never be absolute simply because not all the information is public. Any statistic will most likely be biased. I can tell you the following from my own experience that might get you closer in your answer: Hence, even though I cannot give you exact numbers, I fully agree that traders cannot beat the index long term. If you add the invested time and effort that is necessary to follow an active strategy, then the equation looks even worse. Mind you, active trading and active asset allocation (AAA) are two very different things. AAA can have a significant impact on your portfolio performance.",
"title": ""
},
{
"docid": "91ac0fed77d4e280fa2c49c0ad065fa6",
"text": "\"'Buy and Hold' Is Still a Winner: An investor who used index funds and stayed the course could have earned satisfactory returns even during the first decade of the 21st century. by By Burton G. Malkiel in The Wall Street Journal on November 18, 2010: \"\"The other useful technique is \"\"rebalancing,\"\" keeping the portfolio asset allocation consistent with the investor's risk tolerance. For example, suppose an investor was most comfortable choosing an initial allocation of 60% equities, 40% bonds. As stock and bond prices change, these proportions will change as well. Rebalancing involves selling some of the asset class whose share is above the desired allocation and putting the money into the other asset class. From 1996 through 1999, annually rebalancing such a portfolio improved its return by 1 and 1/3 percentage points per year versus a strategy of making no changes.\"\" Mr. Malkiel is a professor of economics at Princeton University. This op-ed was adapted from the upcoming 10th edition of his book \"\"A Random Walk Down Wall Street,\"\" out in December by W.W. Norton. http://online.wsj.com/article/SB10001424052748703848204575608623469465624.html\"",
"title": ""
},
{
"docid": "cfc707d9a22071924bec908c2ec0b80d",
"text": "\"What do I mean by infrastructure? Well, if you're doing algorithmic trading, you have to have something monitoring data and making decisions on its own, presumably. How do you set that up? There are many ways, and some are better than others. First is a problem of scale. If you're a newbie starting out with some small set of equity tick data, perhaps just trades for instance, you can whip together something that can handle that pretty easily. Check out http://www.marketdatapeaks.com/ though. That's your messaging rates you have to deal with once you go full data feeds direct from all the exchanges. 6.65 million messages/events per second. That's a lot. And if you fall behind, you lose your lunch. Building a robust system that allows you to easily backtest and deploy strategies is crucial as well. The speed at which you're able to conduct the backtest matters a lot. Doing that rapidly, and accurately is not easy. For a broad market-data handling algo design (and now, clearly, for very specific things you can design one that'll handle stuff better for that one corner case, but this is for general algo trading), optimally you have some sort of setup where you have a: [feed handlers] -> [tickerplant] -> [mkt data subscribers/CEP] -> [order management system] -> [broker] in this setup you have feed handlers that are taking the raw exchange feeds and pushing them to a consolidated tickerplant, where CEP subscribers can come through and sub to the data they want (perhaps I just want ES futures on one, and only want to arb CMCSA and CMCSK on another -- you dont want each CEP subscriber getting your full feed for all tickers all the time, its a waste). so more or less, each independent strategy is its own subscriber to the tickerplant, taking whatever data it wants and only that data (could be \"\"give me all the trades and quotes for all nasdaq stocks, but not book depth\"\" for instance). your CEP does whatever maths it has to do to figure out trading decisions, and when it does, it sends it to your order management system which does your risk checks, etc (\"\"do you have enough money to place this trade?\"\" \"\"do you already have a position in this?\"\" \"\"are you trading against yourself?\"\" ... million other things). your OMS knows how to talk to your broker/directly to the exchange depending on your setup. Assuming all your risk checks pass, off the order goes to the exchange, and it deals with the fill msgs, etc. Now, as far as speed is concerned - try to do all of this at 6.5 million events/second. It's hard. Some strats/cep subscribers will run faster than others, some are slower, some need to keep a full book to work while some work on just trades. Your OMS depending on if youre using only market data sources may need to keep its own book to place orders on behalf of your subscribers if they lack information about various markets (think all the twitter trading bots these days for instance), etc. If you look back at the above setup as well, you'll notice some interesting things. [tickerplant] -> [cep subscriber] portion can stay the same for live trading or backtesting. This is huge. The only thing that changes here for backtesting is that if you're trying to backtest, you can take historical data (query it out of your hopefully column-store database) and push it into your tickerplant rather than having it come from a live feed through the feed handler. Your tickerplant and cep subscriber will never know the difference, so you can use the same exact code for backtesting as you can for live. On the other end, you obviously cant send historical orders to your live broker, so you need to code a simulated OMS that does the backtest simulation (another huge piece of software to code that is hard to do well). But, for backtesting, your setup is staying largely the same except those two end pieces. This means that testing/deving/deploying strats can be pretty rapid, and uses the same code base for live and historical, which helps you eliminate bugs and have to code everything twice. Backtesting design: [historical mkt data db] -> [tickerplant] -> [mkt data subscribers/CEP] -> [order management system simulator/backtester] These are just a few of the many problems that you hit when trying to dev good infra. There are like a million more. Point was simply, it's complicated. And C++ is a good lang. I use a wide variety of languages depending on exactly whats going on and how fast the code needs to be. With a proper tickerplant design, youre using some ipc protocol so a subscriber can be coded in any language. Check out http://www.zeromq.org/ -- thats an excellent piece of software to use to make a tickerplant out of, think they even have a design for one in the docs if I recall. With that, your CEP subscribers can be in any language - perhaps pure C if you need the speed, perhaps .NET or Java if you dont (check out http://esper.codehaus.org/ for a Java implement of a CEP subscriber, nEsper for the C# port of that I believe). But I use C, C++, C#, python, R, x86 asm for a few very minor things, and a lang or two I can't mention here.\"",
"title": ""
},
{
"docid": "5fe88507bbc13e2adef09b375816123b",
"text": "\"Being long the S&P Index ETF you can expect to make money. The index itself will never \"\"crash\"\" because the individual stocks in it are simply removed when they begin performing badly. This is not to say that the S&P Index won't lose 80% of its value in an instant (or over a few trading sessions if circuit breakers are considered), but even in the 2008 correction, the S&P still traded far above book value. With this in mind, you have to realize, that despite common sentiment, the indexes are hardly representative of \"\"the market\"\". They are just a derivative, and as you might be aware, derivatives can enable financial tricks far removed from reality. Regarding index funds, if a small group of people decide that 401k's are performing badly, then they will simply rebalance the components of the indexes with companies that are doing well. The headline will be \"\"S&P makes ANOTHER record high today\"\" So although panic selling can disrupt the order book, especially during periods of illiquidity, with the current structure \"\"the stock market\"\" being based off of three composite indexes, can never crash, because there will always exist a company that is not exposed to broad market fluctuations and will be performing better by fundamentals and share price. Similarly, you collect dividends from the index ETFs. You can also sell covered calls on your holdings. The CBOE has a chart through the 2008 crisis showing your theoretical profit and loss if you sold calls 2 standard deviations out of the money, at every monthly interval. If you are going to be holding an index ETF for a long time, then you shouldn't be concerned about its share price at all, since the returns would be pretty abysmal either way, but it should suffice for hedging inflation.\"",
"title": ""
},
{
"docid": "291ef739389b414110b5d02538f9e616",
"text": "\"I think, the top three answers by Joe, Anthony and Bigh are giving you all the detail that you need on a technical sense. Although I would like to add a simple picture that underlines, that you can not really compare day trading to long-term trading and that the addictive and psychologic aspect that you mentioned can not be taken out of consideration. The long term investor is like someone buying a house for investment. You carefully look at all offers on the market. You choose by many factors, price, location, quality, environment, neighborhood and extras. After a long research, you pick your favorites and give them a closer look until you finally choose the object of desire, which will pay off in 10 years and will be a wise investment in your future. Now this sounds like a careful but smart person, who knows what he wants and has enough patience to have his earnings in the future. The short term investor is like someone running into the casino for a game of black-jack, roulette or poker. He is a person that thinks he has found the one and only formula, the philosopher's stone, the money-press and is seeking immense profits in just one night. And if it does not work, he is sure, that this was just bad coincidence and that his \"\"formula\"\" is correct and will work the next night. This person is a pure gambler and running the risk of becoming addicted. He is seeking quick and massive profits and does not give up, even though he knows, that the chances of becoming a millionaire in a casino are quite unrealistic and not better than playing in a lottery. So if you are a gamer, and the profit is less important than the \"\"fun\"\", then short term is the thing for you. If you are not necessarily seeking tons of millions, but just want to keep your risk of loss to a minimum, then long term is your way to go. So it is a question of personality, expectations and priorities. The answer why losses are bigger on high frequency signals is answered elsewhere. But I am convinced in reality it is a question of what you want and therefore very subjective. I have worked for both. I have worked for a portfolio company that has gone through periods of ups and downs, but on the long term has made a very tempting profit, which made me regret, that I did not ask for shares instead of money as payment. These people are very calm and intelligent people. They spend all their time investigating and searching for interesting objects for their portfolio and replace losers with winners. They are working for your money and investors just relax and wait. This has a very serious taste to it and I for my part would always prefer this form of investment. I have worked for an investment broker selling futures. I programmed the account management for their customers and in all those years I have only seen one customer that made the million. But tons of customers that had made huge losses. And this company was very emotional, harsh, unpersonal - employees changing day by day, top sellers coming in corvettes. All the people working there where gamblers, just like their customers. Well, it ended one day, when the police came and confiscated all computers from them, because customers have complained about their huge losses. I am glad, that I worked as a remote developer for them and got paid in money and not in options. So both worlds are so different from each other. The chances for bigger profits are higher on day trading, but so are the chances for bigger losses - so it is pure gambling. If you like gambling, split your investment: half in long term and other half in short term, that is fun and wise in one. But one thing is for sure: in over ten years, I have seen many customers loosing loads of money in options in the future markets or currencies. But I have never seen anyone making a loss in long term portfolio investment. There have been hard years, where the value dropped almost 30%, but that was caught up by the following years, so that the only risk was minimizing the profit.\"",
"title": ""
},
{
"docid": "dc13b77121e726d4bd44e842f8bf0db8",
"text": "ChrisW's comment may appear flippant, but it illustrates (albeit too briefly) an important fact - there are aspects of investing that begin to look exactly like gambling. In fact, there are expressions which overlap - Game Theory, often used to describe investing behavior, Monte Carlo Simulation, a way of convincing ourselves we can produce a set of possible outcomes for future returns, etc. You should first invest time. 100 hours reading is a good start. 1000 pounds, Euros, or dollars is a small sum to invest in individual stocks. A round lot is considered 100 shares, so you'd either need to find a stock trading less than 10 pounds, or buy fewer shares. There are a number of reasons a new investor should be steered toward index funds, in the States, ETFs (exchange traded funds) reflect the value of an entire index of stocks. If you feel compelled to get into the market this is the way to go, whether a market near you of a foreign fund, US, or other.",
"title": ""
},
{
"docid": "96a7f25ee20dc1b974b4c5e296b433dd",
"text": "if you bought gold in late '79, it would have taken 30 years to break even. Of all this time it was two brief periods the returns were great, but long term, not so much. Look at the ETF GLD if you wish to buy gold, and avoid most of the buy/sell spread issues. Edit - I suggest looking at Compound Annual Growth Rate and decide whether long term gold actually makes sense for you as an investor. It's sold with the same enthusiasm as snake oil was in the 1800's, and the suggestion that it's a storehouse of value seems nonsensical to me.",
"title": ""
},
{
"docid": "3f366730956ea4bee7d72f14b62e32ce",
"text": "There are a few flaws in your reasoning: I know my portfolio will always keep going up, No, it won't. You'll have periods of losses. You are starting your investing in a bull market. Do NOT be fooled into believing that your successes now will continue indefinitely. The more risky your portfolio, the bigger the losses. The upside of a risky portfolio is that the gains generally outweigh the losses, but there will be periods of losses. I honestly don't believe that it's possible for me to end up losing in the long term, regardless of risk. I think you vastly underestimate the risk of your strategy and/or the consequences of that risk. There's nothing wrong with investing in risky assets, since over time you'll get higher-than-average returns, but unless you diversify you are exposing yourself to catastrophic losses as well.",
"title": ""
},
{
"docid": "23e3c409e1db5b21d412f0ca4e4f846b",
"text": "\"The stock market may not grow \"\"forever\"\". There will be growth in the stock market, though. The stock market is a positive-sum game, since it is driven in large part by the profits earned by the companies. This doesn't mean that any individual stock will go up forever, it doesn't mean that any given index will go up forever, and it doesn't mean there won't be periods when the market as a whole drops. But it is reasonable to expect that long-term investing in the market as a whole will continue to return profits that reflect the success of companies invested in. Historically, that return has averaged about 8%; future results may be different and exact results will depend on exactly when and how you invest. Re \"\"what about Japan, which has been flat over 30 years\"\": Market being flat doesn't mean individual companies may not be growing strongly. Picking stocks may become more important, and we might need to relearn to focus on dividends rather than being so monomaniacal about growth (dividends are not reflected in the indices, please note), but there will be money to be made. How much, and how much effort is required to get it, and whether the market offers the best available bets, deponent sayeth not. Past results are no guarantee of future returns, and your results may be better or worse than average. You should be diversified into bonds and such anyway, rather than only in the stock market.\"",
"title": ""
},
{
"docid": "cbcdc3ea9bf228d4bf12f852eef8e693",
"text": "If the ship is sinking, switching cabins with your neighbor isn't necessarily a good survival strategy. Index funds have sucked, because frankly just about everything has sucked lately. I still think it is a viable long term strategy as long as you are doing some dollar cost averaging. You can't think about long term investing as a steady climb up a hill, markets are erratic, but over long periods of time trend upwards. Now is your chance to get in near the ground floor. I can completely empathize that it is painful right now, but I am a believer in market efficiency and that over the long haul smart money is just more expensive (in terms of fees) than set-it-and-forget it diversified investments or target funds.",
"title": ""
},
{
"docid": "8cb7eb913f9f29b9425752068c1fd065",
"text": "\"From http://blog.ometer.com/2008/03/27/index-funds/ , Lots of sensible advisers will tell you to buy index funds, but importantly, the advice is not simply \"\"buy index funds.\"\" There are at least two other critical details: 1) asset allocation across multiple well-chosen indexes, maintained through regular rebalancing, and 2) dollar cost averaging (or, much-more-complex-but-probably-slightly-better, value averaging). The advice is not to take your single lump sum and buy and hold a cap-weighted index forever. The advice is an investment discipline which involves action over time, and an initial choice among indexes. An index-fund-based strategy is not completely passive, it involves some active risk control through rebalancing and averaging. If you'd held a balanced portfolio over the last ten years and rebalanced, and even better if you'd dollar cost averaged, you'd have done fine. Your reaction to the last 10 years incidentally is why I don't believe an almost-all-stocks allocation makes sense for most people even if they're pretty young. More detail in this answer: How would bonds fare if interest rates rose? I think some index fund advocacy and books do people a disservice by focusing too much on the extra cost of active management and why index funds are a good deal. That point is true, but for most investors, asset allocation, rebalancing, and \"\"autopilotness\"\" of their setup are more important to outcome than the expense ratio.\"",
"title": ""
}
] |
fiqa
|
1c4dde2206b65d2404089d607560e548
|
Why is the stock market price for a share always higher than the earnings per share?
|
[
{
"docid": "55007fd29e85f7c0371128de9781b4b8",
"text": "\"Think about the implications if the world worked as your question implies that it \"\"should\"\": A $15 share of stock would return you (at least) $15 after 3 months, plus another $15 after 6 months, plus another after 9 and 12 months. This would have returned to you $60 over the year that you owned it (plus you still own the share). Only then would the stock be worth buying? Anything less than $60 would be too little to be worth bothering about for $15? Such a thing would indeed be worth buying, but you won't find golden-egg laying stocks like that on the stock market. Why? Because other people would outbid your measly $15 in order to get this $60-a-year producing stock (in fact, they would bid many hundreds of dollars). Since other people bid more, you can't find such a deal available. (Of course, there are the points others have brought up: the earnings per share are yearly, not quarterly, unless otherwise noted. The earnings may not be sent to you at all, or only a small part, but you would gain much of their value because the company should be worth about that much more by keeping the earnings.)\"",
"title": ""
},
{
"docid": "a025d389c97e33531f1be1392b2444c3",
"text": "\"When you buy a stock, you're really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as \"\"earnings\"\" (for one year), it would mean that you would get all future earnings for \"\"free.\"\" That's not likely to happen unless 1) the company is in liquidation,\"\" meaning \"\"no future\"\" and 2) it earned ALL of the money it ever earned in the past year, meaning \"\"no past.\"\" If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year.\"",
"title": ""
},
{
"docid": "bf00ff1b52ea3a19a9d3dd9db39090b0",
"text": "First, the earnings are per year, not per quarter. Why would you expect to get a 100% per year return on your money? The earnings can go one of two ways. They can be retained, reinvested in the company, or they can be distributed as a dividend. So, the 'return' on this share is just over 5%, which is competitive with the rate you'd get on fixed investments. It's higher, in fact, as there's the risk that comes with holding the stock.",
"title": ""
},
{
"docid": "eb0b832c419be0fca81b784603de9143",
"text": "Earnings per share are not directly correlated to share price. NV Energy, the company you cited as an example, is an electric utility. The growth patterns and characteristics of utilities are well-defined, so generally speaking the value of the stock is driven by the quality of the company's cash flow. A utility with a good history of dividend increases, a dividend that is appropriate given the company's fiscal condition, (ie. A dividend that is not more than 80% of earnings) and a good outlook will be priced competitively. For other types of companies cash flow or even profits do not matter -- the prospects of future earnings matter. If a growth stock (say Netflix as an example) misses its growth projections for a quarter, the stock value will be punished.",
"title": ""
},
{
"docid": "b070c874aafa6d7e575f97ac83d90b0b",
"text": "Stock prices are set by supply and demand. If a particular stock has a high EPS, say, $100, then people will bid more for that stock, driving up its price over one with a $10 EPS. Your job as an investor is to find stocks with low share prices, but which will give you high earnings (either in dividends, our future share price). This means finding stocks which you believe the market has priced incorrectly, for whatever reason (as an example, many bank stocks are being punished right now, even if the underlying banks are in good shape financially). If you want to beat the market indices, be prepared to do a lot of research, because you're trying to outsmart the market as a whole.",
"title": ""
},
{
"docid": "caa2039cbfb91620e8f945061e12ad2b",
"text": "Imagine a stock where the share price equals the earnings per share. You pay say $100 for a share. In the next year, the company makes $100 per share. They can pay a $100 dividend, so now you have your money back, and you still own the share. Next year, they make $100 per share, pay a $100 dividend, so now you have your money back, plus $100 in your pocket, plus you own the share. Wow. What an incredible investment.",
"title": ""
},
{
"docid": "2ca4fe8511e65b7cb8ff2d94ddb5fe0e",
"text": "What you have to remember is you are buying a piece of the company. Think of it in terms of buying a business. Just like a business, you need to decide how long you are willing to wait to get paid back for your investment. Imagine you were trying to sell your lemonade stand. This year your earnings will be $100, next year will be $110, the year after that $120 and so on. Would you be willing to sell it for $100?",
"title": ""
}
] |
[
{
"docid": "597ca1be1e42819544c011da5e3bc91e",
"text": "It seems to me that your main question here is about why a stock is worth anything at all, why it has any intrinsic value, and that the only way you could imagine a stock having value is if it pays a dividend, as though that's what you're buying in that case. Others have answered why a company may or may not pay a dividend, but I think glossed over the central question. A stock has value because it is ownership of a piece of the company. The company itself has value, in the form of: You get the idea. A company's value is based on things it owns or things that can be monetized. By extension, a share is a piece of all that. Some of these things don't have clear cut values, and this can result in differing opinions on what a company is worth. Share price also varies for many other reasons that are covered by other answers, but there is (almost) always some intrinsic value to a stock because part of its value represents real assets.",
"title": ""
},
{
"docid": "e0032eafca184fb6973d7d72b2f60f85",
"text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.",
"title": ""
},
{
"docid": "d6d448479416e0b711cbe1316622585d",
"text": "The stock price is what people think a company is worth, this is made up of When a company pays out a dividend the money in the company’s bank account reduces, therefore the value of the company reduces. When a company says they are going to pay a larger dividend than expected, we start to expect they are going to make more profit next year as well. So stock price tends to go up when a company says it is increasing the dividend, but down on the day then money leaves the companies bank account. There is normally many months between the two events.",
"title": ""
},
{
"docid": "216fb89e9f562ceb58dd1d07bd9fc3dc",
"text": "all other things being equal if you have two stocks, both with a P/E of 2, and one has an EPS of 5 whereas the other has an EPS of 10 is the latter a better purchase? What this really boils down to is the number of shares a company has outstanding. Given the same earnings & P/E, a company with fewer shares will have a higher EPS than a company with more shares. Knowing that, I don't think the number of shares has much if anything to do with the quality of a company. It's similar to the arguments I hear often from people new to investing where they think that a company with a share price of $100/share must be better than a company with a share price of $30/share simply because the share price is higher.",
"title": ""
},
{
"docid": "b152e7bee118585712db496fe8c45a9d",
"text": "There are a few reason why share prices increase or decrease, the foremost is expectation of the investors that the company/economy will do well/not well, that is expectation of profit/intrinsic value growth over some time frame (1-4 qtrs.)there is also demand & supply mismatch over (usually) short time. If you really see, the actual 'value' of a company is it's net-worth (cash+asset+stock in trade+brand value+other intangibles+other incomes)/no of shares outstanding, which (in a way) is the book value, then all shares should trade at their book value, the actual number but it does not, the expectation of investors that a share would be purchased by another investor at a higher price because the outlook of the company over a long time is good.",
"title": ""
},
{
"docid": "31389a73cfb89b48bea2c20e060166c5",
"text": "Imagine how foolish the people that bought Apple at $100 must have felt. It was up tenfold for the $10 it traded at just years prior, how could it go any higher? Stocks have no memory. A stock's earnings may grow and justify the new higher price people are willing to pay. When FB came public, I remarked how I'd analyze the price and felt it was overvalued until its earnings came up. Just because it's gone down ever since, doesn't make it a buy, yet.",
"title": ""
},
{
"docid": "bccb2ad622d8dc8ba8b3cb146cbd4d41",
"text": "\"I don't know why there is so much confusion on such a simple concept. The answer is very simple. A stock must eventually pay dividends or the whole stock market is just a cheap ponzi scheme. A company may temporarily decided to reinvest profits into R&D, company expansion, etc. but obviously if they promised to never pay dividends then you can never participate in the profits of the company and there is simply no intrinsic value to the stock. For all of you saying 'Yeah but the stock price will go up!', please people get a life. The only reason the price goes up is in anticipation of dividend yield otherwise WHY would the price go up? \"\"But the company is worth more and the stock is worth more\"\" A stocks value is not set by the company but by people who buy and sell in the open market. To think a stock's price can go up even if the company refuses to pay dividends is analogous to : Person A says \"\"Hey buy these paper clips for $10\"\". But those paper clips aren't worth that. \"\"It doesn't matter because some fool down the line will pay $15\"\". But why would they pay that? \"\"Because some fool after him will pay $20\"\" Ha Ha!\"",
"title": ""
},
{
"docid": "37bf7229d625595c8ad96f6ebdc4c443",
"text": "The idea here is to get an idea of how to value each business and thus normalize how highly prized is each dollar that a company makes. While some companies may make millions and others make billions, how does one put these in proper context? One way is to consider a dollar in earnings for the company. How does a dollar in earnings for Google compare to a dollar for Coca-cola for example? Some companies may be valued much higher than others and this is a way to see that as share price alone can be rather misleading since some companies can have millions of shares outstanding and split the shares to keep the share price in a certain range. Thus the idea isn't that an investor is paying for a dollar of earnings but rather how is that perceived as some companies may not have earnings and yet still be traded as start-ups and other companies may be running at a loss and thus the P/E isn't even meaningful in this case. Assuming everything but the P/E is the same, the lower P/E would represent a greater value in a sense, yes. However, earnings growth rate can account for higher P/Es for some companies as if a company is expected to grow at 40% for a few years it may have a higher P/E than a company growing earnings at 5% for example.",
"title": ""
},
{
"docid": "f535a0d7cc0538b79c889db8e26ef801",
"text": "Stock price = Earning per share * P/E Ratio. Most of the time you will see in a listing the Stock price and the P/E ration. The calculation of the EPS is left as an exercise for the student Investor.",
"title": ""
},
{
"docid": "13d5c8d1757f4113f3d00149c7023f95",
"text": "Companies do both quite often. They have opposite effects on the share price, but not on the total value to the shareholders. Doing both causes value to shareholders to rise (ie, any un-bought back shares now own a larger percentage of the company and are worth more) and drops the per-share price (so it is easier to buy a share of the stock). To some that's irrelevant, but some might want a share of an otherwise-expensive stock without paying $700 for it. As a specific example of this, Apple (APPL) split its stock in 2014 and also continued a significant buyback program: Apple announces $17B repurchase program, Oct 2014 Apple stock splits 7-to-1 in June 2014. This led to their stock in total being worth more, but costing substantially less per share.",
"title": ""
},
{
"docid": "7aa54db9a4904567ac7fe6bc6c909344",
"text": "\"You could not have two stocks both at $40, both with P/E 2, but one an EPS of $5 and the other $10. EPS = Earnings Per Share P/E = Price per share/Earnings Per Share So, in your example, the stock with EPS of $5 has a P/E of 8, and the stock with an EPS of $10 has a P/E of 4. So no, it's not valid way of looking at things, because your understanding of EPS and P/E is incorrect. Update: Ok, with that fixed, I think I understand your question better. This isn't a valid way of looking at P/E. You nailed one problem yourself at the end of the post: The tricky part is that you have to assume certain values remain constant, I suppose But besides that, it still doesn't work. It seems to make sense in the context of investor psychology: if a stock is \"\"supposed to\"\" trade at a low P/E, like a utility, that it would stay at that low P/E, and thus a $1 worth of EPS increase would result in lower $$ price increase than a stock that was \"\"supposed to\"\" have a high P/E. And that would be true. But let's game it out: Scenario Say you have two stocks, ABC and XYZ. Both have $5 EPS. ABC is a utility, so it has a low P/E of 5, and thus trades at $25/share. XYZ is a high flying tech company, so it has a P/E of 10, thus trading at $50/share. If both companies increase their EPS by $1, to $6, and the P/Es remain the same, that means company ABC rises to $30, and company XYZ rises to $60. Hey! One went up $5, and the other $10, twice as much! That means XYZ was the better investment, right? Nope. You see, shares are not tokens, and you don't get an identical, arbitrary number of them. You make an investment, and that's in dollars. So, say you'd invested $1,000 in each. $1,000 in ABC buys you 40 shares. $1,000 in XYZ buys you 20 shares. Their EPS adds that buck, the shares rise to maintain P/E, and you have: ABC: $6 EPS at P/E 5 = $30/share. Position value = 40 shares x $30/share = $1,200 XYZ: $6 EPS at P/E 10 = $60/share. Position value = 20 shares x $60/share = $1,200 They both make you the exact same 20% profit. It makes sense when you think about it this way: a 20% increase in EPS is going to give you a 20% increase in price if the P/E is to remain constant. It doesn't matter what the dollar amount of the EPS or the share price is.\"",
"title": ""
},
{
"docid": "177520afa3ba3c94f80b068568d73cc0",
"text": "\"Note that we do not comment on specific stocks here, and have no place doing so. If your question is only about that specific stock then it is off topic. I have not tried to answer that part below. The key to valuation is predicting the net present value of all of a company's cash flows; i.e. of their future profits and losses. Through a number of methods to long to explain here investment banks and hedge funds work out what they expect the company's cash flows to be and trade so that these future profits, losses etc. are priced into the stock price. Since future cash flows, profits or whatever you want to call them are priced in, the price of a stock shouldn't move at all on an earnings statement. This begs the question \"\"why do some stock prices move violently when they announce earnings?\"\" The models that the institutional investors use are not perfect and cannot take into account everything. An unexpected craze for a product or a supply chain agreement breaking down on not being as good as it seems will not be factored into this pricing and so the price will move based on the degree to which expectation is missed or exceeded. Since penny socks are speculative their value is based far more on the long term expected cash flows and less on the short run cash flows. This goes a long way to explaining why some of the highest market capitalisation penny stocks are those making consistent losses. This means that they can be far less susceptible to price movements after an earnings announcement even if it is well out of the consensus range. Higher (potential) future value comes with the higher risks of penny stocks which discounts current value. In the end if people's expectation of the company's performance reflects reality then the profitability is priced in and there will be no price movement. If the actuality is outside of the expected range then there will be a price movement.\"",
"title": ""
},
{
"docid": "bf00b9c64d4aabe8b6bd0614ef9c82ef",
"text": "Are you really talking about share price, or share value? Because what about stock splits? Market Cap stays the same, but the price per share is lowered. This is so that the stock is more liquid and accessible to a greater number of investors. This encourages people to invest in the stock though. I can't really think of any reasons why a company would want to lower their share value or discourage people from investing unless they are trying to reacquire shares. Returning value to the shareholders is the #1 priority of any publicly traded company.",
"title": ""
},
{
"docid": "dd3a39f62b2c1d88d7d979fe0bea2df1",
"text": "In addition to D. Stanley's very fine answer, the price of stocks change as a result of changing market conditions and the resulting investor estimation of its effect on the company's future earnings. Take these examples. Right now, in the USA, there is a housing shortage; that is, there are fewer houses available for purchase than there are willing buyers. Investors will correctly assume that the future earnings of home builders will be higher than they were, say ten years ago. Seeking to capitalize on these higher earnings, they will try to buy the stocks. However, the current owners of the stock, potentially the sellers, know the same thing as the investor-buyer and therefore demand a premium to entice a sale. The price of the stock has risen. The reverse is true, also. Brick and mortar retailers are declining as more consumers prefer on-line retail shopping. The current owners of these stocks will probably want to sell their stock before it is worth even less. The investor-buyer also knows the same facts; that future earnings will most likely be less for these companies. The potential buyer offers a very low price to entice a sale. The price of the stock has fallen. Finally, the price of stocks rise and fall with general market conditions. As an example, assume that next months jobs report is released showing that 350,000 new jobs were created in July. Investors will believe that if companies are hiring, then the companies are doing well; they are selling products and services at a higher than expected rate, requiring that they add new employees. They will also conclude that those 350,000 new employees will be spending their salaries to buy not just food, clothing and shelter, but also a few luxuries like a newer car, a TV, perhaps even a new home (please see paragraph 2!). All of these companies will have more business, more earnings and, likely, a higher stock price.",
"title": ""
},
{
"docid": "f000814393145523bb955e8c305cd035",
"text": "\"I've never heard of rent quoted per week. Are you in the US? In general, after the down payment, one would hope to take the rent, and be able to pay the mortgage, tax, insurance, and then have enough left each year to at least have a bit of emergency money for repairs. If one can start by actually pocketing more than this each year, that's ideal, but to start with a rental, and only make money \"\"after taxes\"\" is cutting it too close in my opinion. The 19 to 1 \"\"P/E\"\" appears too high, when I followed such things I recall 12 or under being the target. Of course rates were higher, and that number rises with very low rates. In your example, a $320K mortgage at 4% is $1527/mo. $400/wk does not cut it.\"",
"title": ""
}
] |
fiqa
|
da5a21fc8b05954eaccf4b92aab5a0d6
|
What could a malicious party potentially achieve by having *just* a name, account number, and sort code?
|
[
{
"docid": "f0eb89b0e9bf01c21aaade926811a1db",
"text": "I think the answer to this must differ from country to country. I have lived in several countries where the normal everyday way of making a payment is to instruct my bank to transfer the money to the recipient's account. Of course this means I must know his name, SC and account number – but this is an accepted part of the system; businesses routinely display that information on invoices and correspondence. It is simply not regarded as confidential. DumbCoder's comment suggests that if he has that information he can take money from my account without my permission – in other words, my bank will pay money out of my account on someone else's request, without my authority. Is this correct? In which country or countries can this happen? (I must go there quickly and begin stealing people's money.)",
"title": ""
},
{
"docid": "b80ed39ad62f15207fc29041b47cdf25",
"text": "When you want to pay a bill on line there are several ways to do it. You can give them your credit card details: Name on Card, zip code, credit card number, and 3 or 4 digit security code on the back. Most of the information is available on the card or via an easy Google search. If the crook has your card they can use it to buy something. You can contact your bank's website and establish a one time or recurring transfer. You provide the information about the person/company. Your bank knows who you are because you used a secure system and your password. Their bank accepts the money because who would refuse money, they don't care who you are. You can provide the company with your bank info (bank number, your account number, and your name). If your bank limits their transactions via this method only to legitimate organizations, then your money will only be sent to legitimate organizations. But if the organization has no way of knowing who is on the other end of the phone or webpage, they may be withdrawing money from a bank account without the account owners permission. In the example article a person found a charity that had lax security standards, they were recognized by the bank as a legitimate organization, so the bank transferred the money. The charity will point to the form and say they had permission from the owner, but in reality they didn't. The subject of the article was correct, all the info required is on every check. It is just that most people are honest, and the few security hurdles that exist do stop most of the fraud.",
"title": ""
},
{
"docid": "44afc87202a16f7f76991138c5fdf24c",
"text": "I disagree with Dumbcoder's response. Setting up a DD is not easily approved by the banks as you must prove a existing business cash flow. And secondly you cannot empty someone's account via DD as they are protected by the DD mandate. (Money goes out, complaint is made, money goes back in, the registered business with the DD facility has some serious explaining to do to the bank and FCA). Dumbcoder you likely work in a middle position of a company..",
"title": ""
}
] |
[
{
"docid": "1106f53035aa74ff20d51f8c9d233ccc",
"text": "\"No, the best you can do is (probably) determine the bank, from the sort code. using an online checker such as this one from the UK payments industry trade association. Revealing the name of an account holder is something the bank would typically require a warrant for, I'd expect, or whatever is covered in the account T&Cs under \"\"we provide all lawfully required assistance to the authorities\"\" Switching to what I suspect is your underlying problem - if this is a dispute that's arisen at the end of your tenancy, relating to the return of the deposit, then there are plenty of people to help you, for free. Use those rather than attempting your own detective work. Start with the UK government How to Rent guide, which includes links on to Shelter's pages about deposits. The CAB has lots of good info here too. Note that if your landlord didn't put your deposit in a deposit protection scheme, then as a professional landlord they could be penalised four times (I think) the deposit amount by a court, so stick to your guns on this.\"",
"title": ""
},
{
"docid": "860266c5f091ca5d690561f10b47edb1",
"text": "\"Here are a handful of measures I take myself: I check my credit reports once in a while and look for anything out of the ordinary. If somebody calls me on the telephone claiming to be from my bank or credit card company, utility, etc. I ask for their number, check it, and call them back. I don't give personal information to people merely claiming to be from a place I do business with. I never fill out ballots for free contests. Most of the time these are scams. When I get a call telling me \"\"you won a free cruise\"\" for a ballot I supposedly filled out at the mall, I say they're lying through their teeth. For excitement, I'll sometimes buy a lotto ticket instead. I'm careful when I surf the web. I don't give my personal information to web sites I can't trust. If they look the least bit shady, I'm out. Also, I use different passwords at different web sites. I avoid using a password from a public terminal, but when I must, I change my password soon after. I'm careful when I download software. I don't install anything I didn't get from a trusted source. I pay for software when necessary, so finding a trusted source is not hard. But, I've heard of people who – to save a buck – would download a pirated application from a shady warez site only to be \"\"gifted\"\" a trojan horse key logging or other spyware along with it. When I no longer need a bill, receipt, statement, etc. or any document containing personal information, I shred it, and I use a shredder that does a micro-cut, not just a strip- or cross-cut. The micro-cut remains go in the green bin with wet and yucky organic waste. When I no longer need a hard drive, I use a secure wiping tool like Darik's Boot & Nuke before reusing. If the drive isn't worth reusing, I'll wipe first then take apart with my Torx screwdriver. Once I have the drive platter, I scratch the heck out of it. Remains go to the community recycling depot. That's all I can think of right now; I probably missed a few :-) So, what do others do? I'm curious, too.\"",
"title": ""
},
{
"docid": "c94c26639d33108d45b4df3e1118d66c",
"text": "\"You've touched on a very abstract concept that exist partly due to fractional-reserves and directly due to currency having no base (ex. not backed by gold), money can and does just pop into existence. To answer your question, we have to understand that the criminal is irrelevant. \"\"Can't a cyber criminal increase/decrease a bank's holdings just by changing a number in a computerized ledger book?\"\" The bank wouldn't need the cyber criminal's aid, they could change their own holdings. They have their own computers after all. Money's value is derived from trust. A bank that would change its own books would be black-balled. Similarly, a bank that un/consciously allows a cyber criminal change their holdings would lose trust. If this was a small transaction, they bank bottom line is unaffected. If these scandal is large enough to affect a bank's bottom line, the difference would be noticeable and raise suspicion.\"",
"title": ""
},
{
"docid": "8e9e89ee49bbbee7ded9f41224cb3f05",
"text": "With Mint you are without a doubt telling a third party your username and password. If mint gets compromised, or hires a bad actor, technically there isn't anything to stop shenanigans. You simply must be vigilant and be aware of your rights and the legal protections you have against fraud. For all the technical expertise and careful security they put in place, we the customers have to know that there is not, nor will there ever be, a perfectly secure system. The trade off is what you can do for the increased risk. And when taken into the picture of all the Other* ways you banking information is exposed, and how little you can do about it, mint.com is only a minor increase in risk in my opinion. *See paypal, a check's routing numbers, any e-commerce site you shop at, every bank that has an online facing system, your HR dept's direct deposit and every time you swipe your debit / credit card somewhere. These are all technically risks, some of which are beyond your control to change. Short of keeping your money in your mattress you can't avoid risk. (And then your mattress catches fire.)",
"title": ""
},
{
"docid": "66f6cd9c8932841386497823161fcfe0",
"text": "The reason people like Mint is because it allows you to see all of your financial details in one place. When you create an account, you’re able to link all of your bank accounts, credit cards, and investment accounts. This linking enables Mint to update your transactions automatically. The catch is that you have to provide the username and password you use for each one, which can certainly make you feel jittery if you’re worried about a security breach. Mint is designed to be a read-only service, which means you can’t transfer money back and forth between accounts. If someone were to get their hands on your Mint login, all they’d be able to do is view your balances and transactions. Your full account numbers aren’t displayed, nor are your bank account or credit card usernames and passwords. The only thing that would be visible would be your email address. If a hacker was interested in taking things a step further, there’s always the possibility that they could physically steal the information from Mint’s secure servers – but that’s really a long shot. That would require knowing where the servers are located, bypassing the physical security measures that are in place, and cracking the code on how the data is encrypted. If that were to happen, then your personal information might be at risk, but so far, there’s no record of it being attempted. I was very skeptical of Mint and how secure it truly was. I did my fair share of research. Try looking at:",
"title": ""
},
{
"docid": "3e987107dbb4125793c6317940aa88a4",
"text": "\"It's anonymous/automated. They don't know who you are, just that customer x1a bought y. If your name isnt given to employees \"\"your\"\" privacy isnt being volated because the dont know its \"\"you.\"\" I imagine the government justifies their intrusions on our digital privacy the same way.\"",
"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": "bbbbb498e32b3999a3b4d25aeb30d42e",
"text": "I would worry more about identity theft than your credit score at first. I would want an explanation of how it happened and confirm that no one has used it. I don't think it will be too big of a deal on your credit in the longer term.",
"title": ""
},
{
"docid": "48f3bd9101698cd08d0ebd81dfffb549",
"text": "Aside from the fact that you could now get spam calls and mailings, nothing negative at all. With your account number, anyone can send you money (which you probably wouldn't mind), but otherwise, no access is possible. In Germany, every company and many people publish their account number, so they can receive payment. Every invoice contains address, phone number, and account numbers of the company that bills you, so you are able to send them money to pay the invoice. Nobody can access the money or details of your account with only the name and number; it needs your online login user id and password, or your (government issued) ID to do so. You don't need to worry at all.",
"title": ""
},
{
"docid": "3179e94f6575f62b120ad585ad7631fc",
"text": "\"Answers to your questions: (1) Do bank account numbers have a checksum. NO. (2) Is it plausible that they found out your number after sending you the money by \"\"accident\"\". NO. There is no way to find out who possesses a particular bank account just by the number. Also, how they even know they made a mistake? They targeted you and knew who you were and your bank account number before the \"\"money\"\" was sent. (3 and 4) Is this a scam? YES. They never paid you any money. They forged a check for a large amount and deposited it in an account. Then divided it up, wiring pieces to multiple people, all of whom they investigated beforehand. Since it is a bank to bank transfer it clears. Once the forgery is discovered, all the transfers will be unwound. If you had sent them money, you would have lost that money. Other things to note: There is zero chance of a wire transfer going to the wrong person because the sender has to list the name and address on the account as well as the number. You basically did the right thing which is to notify your bank that you received an unauthorized transfer into your account. Never accept money into your account from someone you don't know. If money \"\"appears\"\" in your account tell the bank it is an error and probably proceeds from a forgery and they will take care of it.\"",
"title": ""
},
{
"docid": "882cbd406a8b1849647272257c95b90e",
"text": "\"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque \"\"bearer\"\" (or not to cross \"\"or bearer\"\" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance.\"",
"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": "7b93e0783a91335c0418e313471690db",
"text": "\"Mostly ditto to @grade'eh'bacon, but let me add a couple of comments: Before I did anything, I'd find out more about what's going on. Anytime someone tells me that there's a problem with \"\"security codes or something\"\", I get cautious. Think about what the possibilities are here. Your relative is being scammed. In that case, helping him to transfer his money to the scammer is not the kind of help you really want to give. Despite your firm belief in your relative's integrity, he may have been seduced by the dark side. If he's doing something illegal, I'd be very careful about getting involved. My friends and relatives don't ask me to commit crimes for them, especially not in a way that leaves me holding the bag if things go wrong. Assuming that what is going on here is all legal and ethical, still there is the possibility that you could be making yourself liable for taxes, fees, whatever. At the very least I'd want to know what those are up front. As @Grade'eh'bacon, if he really has a problem with a lost password or expired account, by all means help him fix that problem. But become someone else's financial intermediary has many possible pitfalls.\"",
"title": ""
},
{
"docid": "cdab6762751912456eb59e1b21dac3ad",
"text": "If its JavaScript-based you can check the source code to see if any messages are being sent, again this doesn't mean the code's malicious. if there's any type of form submission you can't tell. You could always implement it yourself, SHA1 is publicly accessible although not the easiest algorithm to build.",
"title": ""
},
{
"docid": "a84f16ada81922d72884f228646ce307",
"text": "I spoke to HMRC and they said #1 is not allowable but #2 is. They suggested using either their published exchange rates or I could use another source. I suggested the Bank of England spot rates and that was deemed reasonable and allowable.",
"title": ""
}
] |
fiqa
|
78cc8f07814199ac73765cfec0f27580
|
Return of value to shareholders in an ISA
|
[
{
"docid": "87f8e0738c74836e43eeeb1cf7f36494",
"text": "\"You will receive a combination of Verizon shares and cash whether you chose option B or C. Option B means that your \"\"Return of Value\"\" will be treated as capital - ie: as a capital gain. Option C means that your \"\"Return of Value\"\" will be treated as income - ie: as a dividend. As your ISA has favourable tax status, you don't end up paying any capital gain tax or income tax on dividend income. So it won't matter which option you chose.\"",
"title": ""
}
] |
[
{
"docid": "5a9a5dcc1532513df50baedcb611b3ce",
"text": "Thanks for the answer/comments! The time-based method was something we mooted and something I almost went with. But just to wrap this up, the method we settled on was this: Every time there is an entry or exit into the fund, we divvy out any unrealised market profits/losses according to each person's profit share (based on % of the asset purchased at buy-in) JUST BEFORE the entry/exit. These realised profits are then locked in for those particpants, and then the unrealised profits/loss counter starts at zero, we do a fresh recalculation of shareholding after the entry/exit, and then we start again. Hope this helps anyone with the same issue!",
"title": ""
},
{
"docid": "686c79bee148b44dfd8d5893636b200c",
"text": "Does this make sense? I'm concerned that by buying shares with post tax income, I'll have ended up being taxed twice or have increased my taxable income. ... The company will then re-reimburse me for the difference in stock price between the vesting and the purchase share price. Sure. Assuming you received a 100-share RSU for shares worth $10, and your marginal tax rate is 30% (all made up numbers), either: or So you're in the same spot either way. You paid $300 to get $1,000 worth of stock. Taxes are the same as well. The full value of the RSU will count as income either way, and you'll either pay tax on the gains of the 100 shares in your RSU our you'll pay tax on gains on the 70 shares in your RSU and the 30 shares you bought. Since they're reimbursing you for any difference the cost basis will be the same (although you might get taxed on the reimbursement, but that should be a relatively small amount). This first year I wanted to keep all of the shares, due to tax reasons and because believe the share price will go up. I don't see how this would make a difference from a tax standpoint. You're going to pay tax on the RSU either way - either in shares or in cash. how does the value of the shares going up make a difference in tax? Additionally I'm concerned that by doing this I'm going to be hit by my bank for GBP->USD exchange fees, foreign money transfer charges, broker purchase fees etc. That might be true - if that's the case then you need to decide whether to keep fighting or decide if it's worth the transaction costs.",
"title": ""
},
{
"docid": "ae148a4b9aca1e2103a1c57a04f56f16",
"text": "This is great, thank you. Can you think of any cases where expected return is greater than interest payments (like in #2) but the best choice would still be raise money through equity issuing? My intuition tells me this may be possible for an expensive company.",
"title": ""
},
{
"docid": "7357993aa3e3e8e6d746463fbc6fefa2",
"text": "Shares often come associated with a set of rights, such as ability to vote in the outcome of the company. Some shares do not have this right, however. With your ability to vote in the outcome of the company, you could help dictate that the company paid dividends at a point in time. Or many other varieties of outcomes. Also, if there were any liquidity events due to demand of the shares, this is typically at a much higher price than the shares are now when the company is private/closely held.",
"title": ""
},
{
"docid": "4e4095d42a193b554e513a451e5dc91b",
"text": "The company's value (which should be reflected in the share price) is not how much money it has in the bank, but something along the lines of 'how much money will it make between now and the end of times' (adjusted for time value of money and risk). So when you purchase a share of a company that has, say, little money in the bank, but expects to make 1M$ profit this year, 2M$ for the following 3 years, and say, nothing after, you are going to pay your fraction of 7M$ (minus some discount because of the risk involved). If now they announce that their profits were only 750k$, then people may think that the 2M$ are more likely to be 1.5M$, so the company's value would go to ~ 5M$. And with that, the market may perceive the company as more risky, because its profits deviated from what was expected, which in turn may reduce the company's value even further.",
"title": ""
},
{
"docid": "37c2382b45e55c431fdc9686dd772e26",
"text": "Firstly 795 is not even. Secondly - generally you would pay tax on the sale of the 122 shares, whether you buy them back or not, even one minute later, has nothing to do with it. The only reason this would not create a capital gains event is if your country (which you haven't specified) has some odd rules or laws about this that I, and most others, have never heard of before.",
"title": ""
},
{
"docid": "7073c8abdac940794381ca8c2ea69bbd",
"text": "You are comparing apples and oranges: the charts show the capital appreciation excluding dividends. If you include dividends and calculate a total return over that period you see VSMAX up 132% vs. FSEVX up 129%, i.e. quite close. That residual difference is possibly due to a performance difference between the two benchmarks.",
"title": ""
},
{
"docid": "a11b5b0f914084e7fe0ca39051dd3794",
"text": "Here's a different take: Look through the lists of companies that offer shareholder perks. Here's one from Hargreaves Lansdown. See if you can find one that you already spend money with with a low required shareholding where the perks would actually be usable. Note that in your case, being curious about the whole thing and based in London, you don't have to rule out the AGM-based perks, unlike me. My reason for this is simple: with 3 out of 4 of the companies we bought shares in directly (all for the perks), we've made several times the dividend in savings on money we would have spent anyway (either with the company in which we bought shares or a direct competitor). This means that you can actually make back the purchase price plus dealing fee quite quickly (probably in 2/4 in our case), and you still have the shares. We've found that pub/restaurant/hotel brands work well if you use them or their equivalents anyway. Caveats: It's more enjoyable than holding a handful of shares in a company you don't care about, and if you want to read the annual reports you can relate this to your own experience, which might interest you given your obvious curiosity.",
"title": ""
},
{
"docid": "924ec97e56ea4c56464f722c7914e103",
"text": "Need help with a finance problem I'm currently facing in my business. My company might be going through an acquisition and I need to understand how the dilution works out for shareholders. They currently have large shareholder loans (debt), and will be converting to equity pre-transaction. For this case, if the original company value = $1 MM and the SHL value = $1 MM, I'm assuming that'd dilute equity by 50% for all shareholders if converted to equity at original company value. Correct? However, what if the $1 MM in shareholder loans were converted at the market value of the company, say $4 MM? I might be confusing myself, but just want to confirm.. thanks!",
"title": ""
},
{
"docid": "66b78ec6a2bc58a7f7fcd823363ec278",
"text": "\"You are missing the fact that the company can buy back its own shares. For simplicity, imagine the case that you own ALL of the shares of XYZ corporation. XYZ is very profitable, and it makes $1M per year. There are two ways to return $1M to you, the shareholder: 1) The company could buy back some fraction of your shares for $1M, or 2) The company could pay you a $1M dividend. After (1) you'd own ALL of the shares and have $1M. After (2) you'd own ALL of the shares and have $1M. After (1) the total number of shares would be fewer, but saying you owned less of XYZ would be like complaining that you are shorter when your height is measured in inches than in centimeters. So indeed, a buyback is an alternative to a dividend. Furthermore, buybacks have a number of tax advantages over dividends to taxable shareholders (see my answer in Can I get a dividend \"\"free lunch\"\" by buying a stock just before the ex-dividend date and selling it immediately after?). That said, it is important to recognize the shareholders who are less savvy about knowing when to accept the buyback (by correctly valuing the company) can get burned at the profit of the savvy shareholders. A strategy to avoid being burned if you aren't price savvy is simply to sell a fraction in order to get your pro rata share of the buyback, in many respects simulating a dividend but still reaping some (but not all) of the tax advantages of a buyback.\"",
"title": ""
},
{
"docid": "46cc17c4ec1ccbf1b920fc7420ab3ade",
"text": "You're overthinking it. The ISA limit applies to the amount you invest into the ISA. In your example, £10,000. Whether that then fluctuates with performance is irrelevant. Even if you realise aprofit or a loss, nobody is watching it. You merely count the amount you originally contributed into the ISA wrapper. When they add up to £15,000; that's the limit reached. (And by the way, remember that only money going into the ISA is counted. It doesn't matter if you -let's say - put £15k in, then remove 10k. You've reached the limit. You don't again have the chance to put £10k 'back in'.",
"title": ""
},
{
"docid": "396521793f12b66d59c2c86a671360b7",
"text": "Ignoring taxes, a share repurchase has exactly the same effect on the company and the shareholders' wealth as a cash dividend. In either case, the company is disbursing cash to its shareholders; in the former, in exchange for shares which shareholders happen to be selling on the market at the time; in the latter, equally to all shareholders. For those shareholders who do not happen to be selling their shares, a share repurchase by a company is equivalent to a shareholder's reinvestment of a cash dividend in additional shares of the same company. The only difference is the total number of shares left outstanding. Your shares after a share buyback represent ownership of a greater fraction of the company, since in effect the company is buying out other shareholders on your behalf. Theoretically, a share buyback leaves the price of the stock unchanged, whereas a cash dividend tends to reduce the price of the stock by exactly the amount of the dividend, (notwithstanding underlying earnings.) This is because a share buyback concentrates your ownership in the company, but at the same time, the company as a whole is devalued by the exact amount of cash disbursed to buy back shares. Taxwise, a share buyback generally allows you to treat your share of the company's profits as capital gains---and quite possibly defer taxes on it as long as you own the stock. You usually have to pay taxes on dividends at the time they are paid. However, dividends are sometimes seen as instilling discipline in management, because it's a very public and obvious sign of distress for a company to cut its dividend, whereas a share repurchase plan can often be quietly withdrawn without drawing that much attention. A third alternative to a dividend or a share repurchase is for the company to find profitable projects to reinvest its earnings in, and attempt to grow the company as a whole (in the hopes of even greater earnings in the future) rather than distribute current earnings back to shareholders. (A company may alse use its earnings to pay down or repurchase debt, as well.) As to your second question, the SEC has certain rules that regulate the timing and price of share repurchases on the open market.",
"title": ""
},
{
"docid": "2533e2232a029cd05746361beff5378a",
"text": "\"I've been wondering the same thing - I can't find any \"\"official\"\" information from the banks, but there is the following info: So, if it's all with the same bank - try it! The worst that can happen is that the bank won't credit your ISA and will refund you.\"",
"title": ""
},
{
"docid": "5e73b6a2824db353b01b641ce28e18f7",
"text": "See my answer here What is the dividend tax rate for UK stock The only tax from US stocks you'd need to worry about would be dividend withholding tax of 30%. If you contact your ISA provider they should be able to provide you with a W8-BEN form so that you can have this rate reduced to 15%. Just because there's a tax treaty does not mean you will automatically be charged 15% - you must provide a W8-BEN form and renew it when it expires. That last 15% is unfortunately unavoidable. If you were paying any UK taxes you could claim that 15% as a discount against your UK dividend tax liability, but as your US stock would be wrapped in an ISA there's no UK tax to pay which means no tax to reclaim from the tax treaty. Other than DWT though, you will pay absolutely no tax on US stocks held in an ISA to either the US or UK government.",
"title": ""
},
{
"docid": "f047a86a26ffe9decad612ab2b5ed4e0",
"text": "Note the above is only for shares. There are different rules for other assets like House, Jewellery, Mutual Funds, Debt Funds. Refer to the Income Tax guide for more details.",
"title": ""
}
] |
fiqa
|
fbddd49b257785eaf4c05b9548b0ea48
|
When filing for an NOL, do you have to file the amended previous years' returns after the NOL return?
|
[
{
"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": "34d57c7a08a5dd688d106df63ac97be0",
"text": "If for any tax year, you were eligible to make deductible contributions to a Traditional IRA, and did make the contributions in timely fashion, then there is no need to file Form 8606 for that year. Form 8606 (which tracks your basis in the IRA) is needed if Form 8606 is also needed if",
"title": ""
},
{
"docid": "7ff48ab59c694db453df646f2d03e011",
"text": "\"If you're \"\"living off the land\"\" and make no money, then you don't have to file. Though you might be able to actually make money through credits and the like if you do file. If you've lost more than you've made, then you'll probably need to file since someone will have needed to report that they paid you (W-2 or 1099-MISC). If the IRS receives a form saying that you made X and you don't file, they aren't going to just take your word for it that you lost more than you made, right? That, and if you want a refund, you'll almost certainly need to file to get it.\"",
"title": ""
},
{
"docid": "f5bb48681b5df3512b1d651714b729d6",
"text": "When you itemize your deductions, you get to deduct all the state income tax that was taken out of your paycheck last year (not how much was owed, but how much was withheld). If you deducted this last year, then you need to add in any amount that you received in state income tax refunds last year to your taxes this year, to make up for the fact that you ended up deducting more state income tax than was really due to the state. If you took the standard deduction last year instead of itemizing, then you didn't deduct your state income tax withholding last year and you don't need to claim your refund as income this year. Also, if you itemized, but chose to take the state sales tax deduction instead of the state income tax deduction, you also don't need to add in the refund as income. For whatever reason, Illinois decided that you don't get a 1099-G. It might be that the amount of the refund was too small to warrant the paperwork. It might be that they screwed up. But if you deducted your state income tax withholding on last year's tax return, then you need to add the state tax refund you got last year on line 10 of this year's 1040, whether or not the state issued you a form or not. Take a look at the Line 10 instructions starting on page 22 of the 1040 instructions to see if you have any unusual situations covered there that you didn't mention here. (For example, if you received a refund check for multiple years last year.) Then check your tax return from last year to verify that you deducted your state income tax withholding on Schedule A. If you did, then this year add the refund you got from the state to line 10 of this year's 1040.",
"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": "9cf63e0a6b14a3f437fae3eb24f15d04",
"text": "\"Can I write off the $56,000 based on demand letters? Or do I need to finish suing him to write-off the loss? No and no. You didn't pay taxes on the money (since you didn't file tax returns...), so what are you writing off? If you didn't get the income - you didn't get the income. Nothing to write off. Individuals in the US are usually cash-based, so you don't write off income \"\"accrued but never received\"\" since you don't pay taxes on accrued income, only income you've actually received. Should I file the 2012 taxes now? Or wait until the lawsuit finishes? You should have filed by April 2013, more than a year ago. You might have asked for an extension till October 2013, more than half a year ago. Now - you're very very late, and should file your tax return ASAP. If you have some tax due - you're going to get hit with high penalties for underpaying and late filing. If the lawsuit finishes in 2014, does it apply to the 2012 taxes? Probably not, but talk to your lawyer. In any case - it is irrelevant to the question whether to file the tax return or not. If because of the lawsuit results something changes - you file an amended return.\"",
"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": "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": "4d8e6721496b0d8ad288f2a00eb81a13",
"text": "It matters because that is the requirement for the 83(b) selection to be valid. Since the context is 83(b) election, I assume you got stocks/options as compensation and didn't pay for them the FMV, thus it should have been included in your income for that year. If you didn't include the election letter - I can only guess that you also didn't include the income. Hence - you lost your election. If you did include the income and paid the tax accordingly, or if no tax was due (you actually paid the FMV), you may try amending the return and attaching the letter, but I'd suggest talking to a professional before doing it on your own. Make sure to keep a proof (USPS certified mailing receipt) of mailing the letter within the 30 days window.",
"title": ""
},
{
"docid": "b9d65921f3dd4bb75d269ea1873d8ddf",
"text": "The default is FIFO: first in - first out. Unless you specifically instruct the brokerage otherwise, they'll report that the lot you've sold is of Jan 5, 2011. Note, that before 2011, they didn't have to report the cost basis to the IRS, and it would be up to you to calculate the cost basis at tax time, but that has been changed in 2011 and you need to make sure you've instructed the brokerage which lot exactly you're selling. I'm assuming you're in the US, in other places laws may be different.",
"title": ""
},
{
"docid": "4153a684b44027e27bd1175a20260689",
"text": "\"Federal tax refund is taxes you've overpaid. What you're saying is that this year you overpaid less than before. I don't understand why you see this is as a bad thing. Optimal situation is when you have no refunds and no taxes due on tax day, but it is really hard to get there. But the closer you can get - the better, which means that reducing your refund should be your goal. In any case, \"\"Federal Tax Refund\"\" is meaningless, what you need to look at is your actual taxes due. This is the number you should be working to reduce. Is it possible to shift the amounts on a W-2 (with correct adjustments) to tax all of your wages, instead of leaving some of it deducted pre-tax? Why would you want to pay more tax? If your goal is to have a refund (I.e.: it is your way of forcing yourself to save), then you need to recalculate the numbers and adjust your W4 taking the (pre-tax) FSA into account. If it is not the goal, then you should be looking at the total taxes owed, not the refund, and adjust your W4 so that your withholding would cover the taxes owed as closely as possible. And to answer your question, after all this - of course it is possible. But it is wrong, and will indeed likely to trigger an audit. You can write whatever you want on your tax return, but in the end of it, you sign under the penalty of perjury that what you filled is the correct information. Perjury is a Federal felony, and knowingly filing incorrect tax return is fraud (especially since your motive is to gain, even though you're not actually gaining anything). Fraudulent tax returns can be audited any time (no statute of limitations).\"",
"title": ""
},
{
"docid": "5d814567aa5f5a1eaf61596718a3f55d",
"text": "If you didn't receive the money in 2012 or have constructive receipt you really can't claim the income. If the company is going to give you a 1099 for the work they aren't going to give you one until next year and if you claim it this year you will have a hard time explaining the income difference. On the other hand if this isn't miscellaneous income, but rather self employment income and expenses you should be able to claim the expenses in 2012 and if you have a loss that would carry over to 2013. Note it is possible to use an accrual basis if you are running a business (which would allow you to do this), but it is more complex than the cash accounting individual tax payers use.",
"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": "8ba0fc654895d48fb795dea7fe3b64af",
"text": "Yes, use a separate Form 8829 for each home used for business during the year. The top of 8829 includes that exact instruction.",
"title": ""
},
{
"docid": "d2d0ad1b83d45313a4dadac2270bbb42",
"text": "\"no, good questions my friend. when did you do this rollover? if it was this year, your firm should have forms that you can fill out to \"\"undo\"\" the roth conversion - only earnings on your investments will be taxed, and everything gets rolled over to a traditional IRA. not fun for tax filing but... you can also leave them as is and pay the taxes (usually only a good option if it's a low income year for the filer). i would consult your tax advisor regardless in this situation.\"",
"title": ""
},
{
"docid": "c14d942d1cffc6f843d1aefbbc04b1f5",
"text": "\"1099's and other official tax forms are often reported to the IRS by the issuer, whether or not you include a copy in your return. You should not neglect to include this income in your 2016 return in an attempt to balance out the two tax years. It's up to you whether or not you feel like filing an amended 2015 return to recover over-payment of taxes from that tax year. You have up to three years to amend tax returns using form 1040X. Since you couldn't have furnished a 1099 for this when you filed your 2015 return (otherwise you wouldn't be in receipt of it for tax year 2016), I'm assuming you reported it simply as \"\"Other Income\"\" and therefore would have been [over] taxed your marginal rate on it. From irs.gov: When to amend a return. You should file an amended return if you need to correct your filing status, number of dependents, total income, tax deductions or tax credits. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list additional reasons to amend a return.\"",
"title": ""
}
] |
fiqa
|
e37395b0759c47f1512aa39b026d0bee
|
How much cash on hand should one have?
|
[
{
"docid": "6b804ef09f486798a3503be8d5ce1a1e",
"text": "You seem to have a grasp of the basic principles involved, but your estimation of the risk you are taking seems a bit low. Your non-investment reserves are unlikely to cover your expenses for more than a month, so the chance that you would need to sell investments to cover additional expenses is high. You mention that I am flexible with the 'cash on hand' amount. For instance, for about three months I put a very tight spending/investing freeze on my life because I knew I'd be leaving jobs and moving (I already had the other job lined up). Those savings presumably went toward moving expenses, as your usual savings were insufficient. In the event that you are laid off suddenly, you might find yourself in the same position again, with added unplanned expenses like fees for breaking a lease. Your current plan involves selling investments to cover the gap. Based on your age you have probably only invested in a predominantly positive market, so the chance that you might need to sell investments for cash seems like a reasonable trade-off for the added potential gains. Your perception might change if the markets go south and you are forced to sell into a down market, possibly at a significant loss. You also don't indicate if your investments are currently sufficient to cover an extended period of unemployment. You are taking on a lot of risk under your current plan. Essentially you are trading possible investment gains for flexibility and time. By making small changes like saving at least enough to move as you did previously, you can give yourself time to react to job loss or other unexpected financial need. Rather than give the traditional emergency funds advice, I suggest you look at the broader picture. The total amount of savings/risk is up to you, but you should consider your current savings as insufficient to rely on as a safety net.",
"title": ""
},
{
"docid": "1279c055dc6a2e7145425d6b25103af9",
"text": "There are two or three issues here. One is, how quickly can you get cash out of your investments? If you had an unexpected expense, if you suddenly needed more cash than you have on hand, how long would it take to get money out of your Scott Trade account or wherever it is? I have a TD Ameritrade account which is pretty similar, and it just takes a couple of days to get money out. I'm hard pressed to think of a time when I literally needed a bunch of cash TODAY with no advance warning. What sudden bills is one likely to have? A medical bill, perhaps. But hey, just a few weeks ago I had to go to the emergency room with a medical problem, and it's not like they demanded cash on the table before they'd help me. I just got the bill, maybe 3 weeks after the event. I've never decided to move and then actually moved 2 days later. These things take SOME planning. Etc. Second, how much risk are you willing to tolerate? If you have your money in the stock market, the market could go down just as you need the cash. That's not even a worst case scenario, extreme scenario. After all, if the economy gets bad, the stock market could go down, and the same fact could result in your employer laying you off. That said, you could reduce this risk by keeping some of your money in a low-risk investment, like some high-quality bonds. Third, you want to have cash to cover the more modest, routine expenses. Like make sure you always have enough cash on hand to pay the rent or mortgage, buy food, and so on. And fourth, you want to keep a cushion against bookkeeping mistakes. I've had twice in my life that I've overdrawn a checking account, not because I was broke, but because I messed up my records and thought I had more money in the account than I really did. It's impossible to give exact numbers without knowing a lot about your income and expenses. But for myself: I keep a cushion of $1,000 to $1,5000 in my checking account, on top of all regular bills that I know I'll have to pay in the next month, to cover modest unexpected expenses and mistakes. I pay most of my bills by credit card for convenience --and pay the balance in full when I get the bill so I don't pay interest -- so I don't need a lot of cushion. I used to keep 2 to 3 months pay in an account invested in bonds and very safe stocks, something that wouldn't lose much value even in bad times. Since my daughter started college I've run this down to less than 1 months pay, and instead of replacing that money I'm instead putting my spare money into more general stocks, which is admittedly riskier. So between the two accounts I have a little over 2 months pay, which I think is low, but as I say, I'm trying to get my kids through college so I've run down my savings some. I think if I had more than 6 months pay in easily-liquidated assets, then unless I expected to need a bunch of cash for something, buying a new house or some such, I'd be transferring that to a retirement account with tax advantages.",
"title": ""
},
{
"docid": "58888b5f58ffd36b094b03d47933d2d5",
"text": "Less than 2 1/2% of all US currency actually exists. The rest is digital entries. In a financial crisis you'll need lots of rare cash. Twenty dollar bills are the best choice. Stash as many as you can afford to. Best to stash in a anchored security safe. And for goodness sakes, don't tell anyone.",
"title": ""
}
] |
[
{
"docid": "559926fa2f62e66aaf0c0144d3b5aabb",
"text": "Find a good commercial bank in the us, or almost any bank in Canada, and exchange cash. Or use an ATM card in Canada; the surcharge is often minimal. (Check with your bank before traveling). You may or may not get a good exchange rate from your hotel desk; some view it as a courtesy, others as a service. You may be able to simply pay with American cash, near the border, but check the exchange rate. Or, for small amounts, you can simply not worry about whether you're getting the best possible exchange rate or not. I visit Canada periodically, and I use a mix of these solutions. Including that last one.",
"title": ""
},
{
"docid": "4fdc0c096584047dd029d2407e86289d",
"text": "With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are:",
"title": ""
},
{
"docid": "08735a3e09b704995ed935887b845a0f",
"text": "I usually get a cashiers check to cover about 90% - 95% of the expected amount (whatever I think is just below my wet-dream-price), and bring the rest in cash. That doesn't require so much cash to be carried. Alternatively you can write a personal check for the exact reminder, or go to the bank for the reminder after the deal is made - with the majority already paid in a cashiers check nobody would disagree.",
"title": ""
},
{
"docid": "2ad51e8c65e69992273de0ca51db38e6",
"text": "I had great difficulty buying my $17,000 truck for cash. One TD Canada Trust branch only let me have $5,000, the other branch down the street only $3,000. They both said they were low on cash. They kept trying to convince me to use a bank draft, but I didn't have a name or total amount as I was still shopping around. I don't think banks carry much cash and it wouldn't take much to clean them out.",
"title": ""
},
{
"docid": "62769608f166b86eac37da984ac5e9f8",
"text": "\"Nobody has mentioned your \"\"risk tolerance\"\" and \"\"investment horizon\"\" for this money. Any answer should take into account whether you can afford to lose it all, and how soon you'll need your investment to be both liquid and above water. You can't make any investment decision at all and might as well leave it in a deposit-insured, zero-return account until you inderstand those two terms and have answers for your own situation.\"",
"title": ""
},
{
"docid": "71f3d288c088c22004fbb25fa1ba1cb1",
"text": "(in response to last comment to me) Ok. I understand now. Forgive me if I appeared to be splitting hairs. When it comes to understanding, exact wording is important. I keep money at home, enough to not be a frequent ATM user, not enough to imply any distrust of the banking system or preparation for Armageddon. You last comments implies the brochure said 13% keep all their money at home, i.e. have no banking relationship. A recent poll concluded 25% of people had less than $2500 available if they had an issue, such as the need to repair a car, or furnace. From that factoid, it wouldn't surprise me that half of those people have no bank acount at all. Not for lack of trust, but lack of money to deposit.",
"title": ""
},
{
"docid": "de1c3f369648d07b5b08720b0545286d",
"text": "\"The above answers are great. I would only add to the \"\"rainy day\"\" part, that even though the cash provides a good cushion, \"\"a stormy day\"\" could mean even losing those emergency savings to the unignorable randomness that governs the world economy. Though unlikely, what happened to the russian ruble and the latest decision of the swiss cental bank are just two recent reminders that uncertainty must be treated as a constant. I would therefore advise you to invest some of the money in land capable of agriculture. How expensive is land over there in the UK?\"",
"title": ""
},
{
"docid": "f7cad9c1053fcf874abf482261d9e85c",
"text": "\"It's a real pain in the rear to get cash only from a bank teller (the end result of cutting the card as suggested). There is a self control issue here that, like weight loss, should ultimately be addressed for a psychologically healthy lifestyle. You don't mention a budget here. A budget is one of the first tools necessary for setting spending limits. Categorizing your money into inviolable categories, such as: will force you to look at any purchase in context of your other needs and goals. Note that savings is at the top of the list, supporting the aphorism to, \"\"Pay yourself first.\"\" Make realistic allowances for each budget category, then force yourself to stick to this budget by whatever means necessary. Cash in several envelopes labeled with each category can physically reinforce your priorities (the debit card is usually left at home for now). Roll remaining funds from each month over into the next month to cover irregular larger expenses, such as auto repairs. What sort of investing are we talking about? If you are just talking about retirement savings, an automatic deduction of just $50 to a Roth IRA account at a discount brokerage every pay check is a good start. An emergency fund of 6 months expenses is also common financial advice, and can likewise be built from small automatic deductions. In defense of wise use of plastic, a debit card can be a great retroactive budgeting tool because it records all spending for you. It takes a lot more effort to save and enter receipts for cash, and a compulsive spender without a budget is just as likely to run out of money whether or not he uses plastic. You could keep receipts in the envelope you take the cash out of when you're getting started. If you are so addicted to spending that you must cut your debit card to enforce your budget, at least consider this a temporary measure to get yourself under control. When the bank issues you a new card, re-evaluate this decision and the self control measures you've implemented to see if you've grown enough to keep the card.\"",
"title": ""
},
{
"docid": "bd29431b9fd6786487aa9b028a61c3fe",
"text": "\"Coming from an area that is hurricane prone, and seeing what happens to local businesses during evacuations/power outages/gas shortages, I think what you already have on hand should be sufficient. And it sounds like that's exactly what you're budgeting for. I'd say 2 weeks worth of fuel and food costs, with the budget for each in line with riding out a natural disaster. True \"\"Preppers\"\" would say keep your money in gold buried in the backyard surrounded by land mines, but that's not perhaps what you're looking for. It is not uncommon for gas stations and grocery stores to revert to cash only sales, especially if they're not big chain operations. If the internet is out, or power is spotty, they may not be able to process CCs. Again, think smaller or more rural businesses. I have seen gas stations switch to cash only during gas shortages as well to help limit how much fuel people were buying. $250 should get you through fine unless you drive a tank and need steak every night. You could probably go with less, but it's entirely dependent on your needs. As Joe rightly stated in his answer, if it's desperate enough times that you can't use a CC or debit card, cash may not even be useful to you.\"",
"title": ""
},
{
"docid": "af8082def21f44a1b9f418f3c16c3302",
"text": "\"Trying to figure out how much money you have available each day sounds like you're making this more complicated than it needs to be. Unless you're extremely tight and you're trying to squeeze by day by day, asking \"\"do I have enough cash to buy food for today?\"\" and so on, you're doing too much work. Here's what I do. I make a list of all my bills. Some are a fixed amount every month, like the mortgage and insurance premiums. Others are variable, like electric and heating bills, but still pretty predictable. Most bills are monthly, but I have a few that come less frequently, like water bills in my area come every 3 months and I have to pay property taxes twice a year. For these you have to calculate how much they cost each month. Like for the water bill, it's once every 3 months so I divide a typical bill by 3. Always round up or estimate a little high to be safe. Groceries are a little tricky because I don't buy groceries on any regular schedule, and sometimes I buy a whole bunch at once and other times just a few things. When groceries were a bigger share of my income, I kept track of what I spent for a couple of months to figure out an average per month. (Today I'm a little richer and I just think of groceries as coming from my spending money.) I allocate a percentage of my income for contributions to church and charities and count this just like bills. It's a good idea to put aside something for savings and/or paying down any outstanding loans every month. Then I add these up to say okay, here's how much I need each month to pay the bills. Subtract that from my monthly income and that's what I have for spending money. I get paid twice a month so I generally pay bills when I get paid. For most bills the due date is far enough ahead that I can wait the maximum half a month to pay it. (Worst case the bill comes the day after I pay the bills from this paycheck.) Then I keep enough money in my checking account to, (a) Cover any bills until the next paycheck and allow for the particularly large bills; and (b) provide some cushion in case I make a mistake -- forget to record a check or make an arithmetic error or whatever; and (c) provide some cushion for short-term unexpected expenses. To be safe, (a) should be the total of your bills for a month, or as close to that as you can manage. (b) should be a couple of hundred dollars if you can manage it, more if you make a lot of mistakes. If you've calculated your expenses properly and only spend the difference, keeping enough money in the bank should fall out naturally. I think it's a lot easier to try to manage your money on a monthly basis than on a daily basis. Most of us don't spend money every day, and we spend wildly different amounts from day to day. Most days I probably spend zero, but then one day I'll buy a new TV or computer and spend hundreds. Update in response to question What I do in real life is this: To calculate my available cash to spend, I simply take the balance in my checking account -- assuming that all checks and electronic payments have cleared. My mortgage is deducted from my checking every month so I post that to my checking a month in advance. I pay a lot of things with automatic charges to a credit card these days, so my credit card bills are large and can't be ignored. So subtract my credit card balances. Subtract my reserve amount. What's left is how much I can afford to spend. So for example: Say I look at the balance in my checkbook today and it's, say, $3000. That's the balance after any checks and other transactions have cleared, and after subtracting my next mortgage payment. Then I subtract what I owe on credit cards. Let's say that was $1,200. So that leaves $1,800. I try to keep a reserve of $1,500. That's plenty to pay my routine monthly bills and leave a healthy reserve. So subtract another $1,500 leaves $300. That's how much I can spend. I could keep track of this with a spreadsheet or a database but what would that gain? The amount in my checking account is actual money. Any spreadsheet could accumulate errors and get farther and farther from accurate values. I use a spreadsheet to figure out how much spending money I should have each month, but that's just to use as a guideline. If it came to, say, $100, I wouldn't make grandiose plans about buying a new Mercedes. If it came to $5,000 a month than buying a fancy new car might be realistic. It also tells me how much I can spend without having to carefully check balances and add it up. These days I have a fair amount of spending money so when, for example, I recently decided I wanted to buy some software that cost $100 I just bought it with barely a second thought. When my spending money was more like $100 a month, lunch at a fast food place was a big event that I planned weeks in advance. (Obviously, I hope, don't get stupid about \"\"small amounts\"\". If you can easily afford $100 for an impulse purchase, that doesn't mean that you can afford $100 five times a day every day.) Two caveats: 1. It helps to have a limited number of credit cards so you can keep the balances under control. I have two credit cards I use for almost everything, so I only have two balances to keep track of. I used to have more and it got confusing, it was easy to lose track of how much I really owed, which is a set up for getting in trouble.\"",
"title": ""
},
{
"docid": "9f239e57d65de3a84a8b005dbfba96d6",
"text": "It just takes a decent power outage to make it worth having some cash on hand. It's possible that worse things can happen as well -- things that would shut the financial system down or cause bank runs. It is an assumption that you'll always be able to (a) access your money at your bank, either via teller transaction or ATM, and (b) pay with a debit card or credit card. If either (or both) of these abilities are taken away, you'll be glad you have some cash. The amount that you have on hand (how much you want to hedge against these possibilities) is up to you.",
"title": ""
},
{
"docid": "7252370787b0eb06f8699bd008627e83",
"text": "\"Most of your money doesn't exist as physical cash, but simply as numbers in a ledger. At any given time, banks expect their clients to withdraw a certain percentage of their balances... For instance, checking accounts are frequently drawn down to zero, savings accounts might be emptied once our twice a year, CDs are almost never withdrawn, etc. To cover those withdrawals, banks keep a certain amount of physical cash on hand, and an additional amount remains on the ledgers. The rest gets loaned out to their customers for use in buying homes, cars, credit cards,etc. Anything they can't loan out directly gets deposited with the federal reserve or loaned directly to other institutions who need it. However, those last two options tend to be short term (ie overnight) loans. With debit cards functioning 24/7, you could get cash at an atm or make a purchase anytime of the day our night. The weekend has nothing to do with it. Which is a long way of saying \"\"No, they do it all the time, not just on weekends\"\" ;)\"",
"title": ""
},
{
"docid": "2909bd6926ceb9028f6b06402e3604f7",
"text": "\"It's like the lady said, \"\"It's not the size that counts, honey -- it's the wiggle behind it.\"\" Or to be more precise in application of metaphor, it's not the amount of money but *where it goes* that matters. Currency is like blood: It's supposed to circulate, but when it pools into large pockets, well, that's a good sign you're dead.\"",
"title": ""
},
{
"docid": "d6c65aeccd0683c60a76071f66ac8b74",
"text": "Depending on the country, nothing. For example, the US has about $1.3 trillion dollars of cash in circulation. Which means that if you were to burn a million dollars of it, that would be 0.000077% of the circulating cash. But cash is a small portion of the actual money in the US. Only about 8% of all money is in cash, the rest is in other forms of value, which means that you'd only be destroying 0.0000062% of the US's money if you burned a full $1,000,000.",
"title": ""
},
{
"docid": "e7db32c122c398bf485a5c10a221af9d",
"text": "Generally, I consider it bad etiquette to inconvenience others. I would recommend cash for small purchases. Try to offer as close to the required amount as possible. Don't pay with several dollars worth of change if you can avoid it. You shouldn't need to carry a lot of cash. When you do don't make it obvious.",
"title": ""
}
] |
fiqa
|
0b6eb2440bad44116044b90874aba42e
|
Should you check to make sure your employer is paying you the correct superannuation amount? [Australia]
|
[
{
"docid": "9d46d5cc933aa3400851b14781c8ea0d",
"text": "As poolie mentioned, you should get online access to your account. This will do a couple of things: Also, consolidate any super you have with different companies. Now.",
"title": ""
},
{
"docid": "65005c7763f5008da5d62afca405c5cc",
"text": "Yes, there are checks and balances. Employers can be, and have been, prosecuted for failing to pay super before the statutory timeline, which is three months from the pay date. However, it is still in your interests to check for yourself. The most common point for missing super to be discovered is when the company goes broke, at which point it's too late for you. What you should do is Check on your payslips that the right amount is allocated to super. It should be 9% of gross, plus any salary sacrifice or additional component. Check your super fund's half-yearly statements line up the deductions given on your payslip. Consider getting online access to your super account so you can check more quickly. If something is missing, call your super fund and/or payroll office. Resources:",
"title": ""
}
] |
[
{
"docid": "0245e7dd79a8a1f4a9a3573a060f57d3",
"text": "The Australian Tax Office website shows Tax Rates for individuals based on the income earned in the Financial Year. Calculating what you'll be taxed For instance, it show that every dollar you earn up to $18,200, you are not taxed. Every dollar over that, up to $37k is taxed at 19 cents. And so on.. Example 1 So as an example, if your income for the year is $25,000 you will be taxed $1292. Working: Here's how it's look if you were doing it in a spreadsheet using the Tax Rates table on the ATO website as a guide: Example 2 If you income is $50,000, it'd look like this: Withholding Your employer is obligated to remove the taxable part from your wage each time your paid. They do that using the calculation above. If at the end of the financial year, the ATO determines that too much as been withheld (ie. you've claimed deductions that've reduce your taxable income to less than what your actual income is), that's when you may be eligible for a refund. If your employer didn't withhold enough or you had income from other sources that haven't been taxed already, then you may actually need to pay rather than expecting a refund. Your question If you earn $18,200 in the year and for some reason your employer did withhold tax from your pay, say $2,000, then yes, you'll get all that $2,000 back as a refund since the Tax Rate for income up to $18,200 is $0.00. If you earned $18,201 and your employer withheld $2000, you'd get $1999.81 back as a refund ($2000 - 19c). You have to pay 19c tax on that $1 over $18,200.",
"title": ""
},
{
"docid": "f62aa109816414a75f7b2f8d110a475d",
"text": "I don't know Australian law, but I will give my US perspective here. The custom in the US is for officers and directors to be indemnified by the corporation, and that LLCs have an even broader power to indemnify (even to remove the duty of loyalty!). Moreover, directors will typically be able to purchase D&O insurance to protect them from loss in the event of liability. For US corporations (not LLCs), the duty of care (prudence) requires that directors behave responsibly in weighing major decisions, and consult experts and specialists before coming to rash decisions. It usually becomes a court case in the context of a large public company in the midst of an acquisition event. The only people with standing (in the US) are shareholders. If all the other shareholders are directors, then it may be hard for them to blame you. Additionally, if you are concerned about the propriety of your actions, there may be sources to rely on. First, discussion with your fellow directors can be a helpful guide (though will not usually immunize you from any accusation of wrongdoing), and disclosure tends to cure almost any accusation of breaching the duty of loyalty. Second, boards often secure the advice of legal counsel, and sometimes bring on lawyers as members or will outright hire counsel for the board. Third, there may be services that will provide you with generic advice (e.g. UK Companies House and US-based IOD), which might set you at ease a little bit. I don't know the details of Australian law, as I say. But my sense of common law countries is that, like the US, they are primarily concerned about negligence (incompetently or imprudently neglecting to understand the business and make informed decisions), disloyalty (fraudulently engaging in self-interested transactions that either hurt the company or should have been offered to the company), and recklessness (not bothering to seek out information). As long as you are active, informed, engaged, and not engaging in secret deals outside the company (especially deals where either side is competing with the company), then that would be more than sufficient under the US standard. If you are concerned about liability, then inquire into indemnifications by the company (in the US, the company can usually pay all legal costs of directors), insurance, and legal counsel. I imagine your business partners are no more savvy than you are. My impression is you are overreacting to relatively rare and exotic expression of corporate law (at least in the US). But I'll close by repeating that I don't know Australian corporate law.",
"title": ""
},
{
"docid": "3ebe277b33ff978605066cd87d13683e",
"text": "\"I feel that getting money sooner than later is always advantageous. If I offered you the choice between getting: Which option would you take? I would take the last option. And for the same reason, from a purely-numbers point of view, I would argue that getting paid biweekly is preferable (assuming the the annual salary is pro-rated fairly, and barring any compulsive spending habits). Your calculations suggest to me that they are trying to answer the question, \"\"Looking at a single year or month (or some other fixed amount of time) in a vacuum, is there any financial benefit to being paid bi-weekly over monthly?\"\". The analysis seems to be focusing on comparing the two pay schedules on a month-by-month basis, noting when one is paid bi-weekly, some months you get paid more times than the other. However, one could also compare the two pay schedules on a fortnight-by-fortnight basis, and note that when one is paid monthly, many fortnights you don't get paid at all, and some you get paid a lot. Or one could compare the two pay schedules on an hour-by-hour basis, too. But in the long run, the money adds up to be the same amount. I prefer getting it as soon as I can.\"",
"title": ""
},
{
"docid": "cc474ce0b6da72284e212c48ff2a1bb0",
"text": "\"If you're not getting pay stubs showing withholding then you're working \"\"under the table\"\", which (a) is illegal, (b) is a deal for the employer because they don't have to pay any of the employment taxes including their share of your SocSec and (c) is screwing you because you'll still need to pay taxes on every dime they pay your but won't have anything set aside for it unless you're doing that yourself. Which I'm guessing you're not. Call the local labor board or whatever.\"",
"title": ""
},
{
"docid": "c7ba3b2399bf788ff797558e39a0b001",
"text": "\"Rather than reading news stories, why not go straight to the HMRC source? https://www.gov.uk/tax-on-your-private-pension/lifetime-allowance Seems your lifetime allowance measurement differs based on whether your pension is defined contribution or defined benefit. The latter seems fairly simple at 20 times first year payout, though the HMRC usage of the word \"\"usually\"\" is disconcerting. The language for defined contribution implies they check multiple times for violation of the LFA, just like you've pointed out. Of note, they specifically list: Note that you can also file to \"\"protect\"\" a larger LFA that you might have previously had. This generally means not contributing any longer to your pension though. There is info on the page linked above.\"",
"title": ""
},
{
"docid": "ed149c5c9cb069437c7a71020c4fd5f6",
"text": "\"We cannot know if you owe them anything. But at the least I would expect that they don't just say \"\"you owe us\"\" but \"\"we found out that we were supposed to pay you $X, but we paid you $Y which is more\"\", and then we can go from there. There are things like \"\"we should have paid you $12.20 per hour for the last year, but we paid you $12.50 per hour\"\", where you can tell them that by paying you that rate, you assumed it was correct one, you wouldn't have worked for less, so they effectively gave you a raise. On the other hand, if they say \"\"you worked here for 38 hours a week, but we paid you for 40 hours a week\"\", and you did indeed work only 38 hours, then most likely they are correct.\"",
"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": "c7b3e7692fed18720326764c41804733",
"text": "I'm assuming your talking USA. There are two ways to look. If you know you should pay on the cap gains, the best way to handle that separately from your salary is to file a quarterly tax payment. That, I understand, is what the self-employed have to do. I'm in the situation where at some point, probably this year, the company that employs me will be bought out, and I will owe capital gains taxes on my shares gobbled up in the buy-out. It's a cash-for-stock transaction. So, in my case, I've just adjusted my W-4 to take advantage of the safe-harbor provision related to taxes I payed in 2016 and my salary. The details vary depending on your situation, but in my case, I've calculated what it will take in W-4 allowances to make sure I pay 110% of my 2016 tax payment (after refund). I'm not worrying about what the actual taxes on those shares of company stock will be, because I've met the rules for safe-harbor. Safe harbor just means that they can't penalize you for under-withholding or underpayment. It doesn't mean I won't have to write a check on april 15.",
"title": ""
},
{
"docid": "5ee1620f02df4cc16dc0be77b86dcf33",
"text": "Exactly. Bosses/managers often frame things in terms of 'you should be thankful for us giving you a paycheck each week' when by definition, you are being paid less than your labour, strictly speaking, is worth. ie, on the whole what you do is paying the company MORE than you receive. Personally, I'm fine with this trade off, within reason. I get to go home at 5, and if the phone rings I ignore it if I like. If the place folds, no one is coming after me for a share of the company's debts, either. But don't let anyone blow smoke that by paying you they are being generous.",
"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": "c802c5a8765525396bb86c842ec26502",
"text": "I know the general principles of acting as a director in a company, and am familiar with the rights of shareholders. In the last ten years or so, I believe Australia has introduced legislation that strongly punishes those directors who do not act in a professional or prudent manner. While I will of course attempt to fulfill the duties required - I am new to conducting business at this level, and am concerned about mistakenly breaching some unknown rule/law and being subject to repercussions that I just don't know about. As you have already stated, the key to being director in a company is the additional responsibility. Legally you can be held in breach. At the same time you will be able to influence your decision much better if you a director and thus safeguard your interest. If you are only a shareholder, you cannot be held responsible for decision by company, individual malpractice may still be applicable, but this is less of a risk. However over a period of time, the board can take certain decision that may marginalize your holding in the company.",
"title": ""
},
{
"docid": "5e43d052df5460eb9c1e6625c9febeee",
"text": "Here are your options. While you remain an Australian citizen you cannot withdraw super just because you are residing overseas. You could renounce your citizenship - just make sure you have another one to fall back on.",
"title": ""
},
{
"docid": "a62cbd0cc1c11c54f7ff73eb90ab0e7e",
"text": "Cutting 25% from pensions is a big deal. This is why I'm going to get out of the company pension. If the money isn't mine, what is it? Are they giving me more return on my interest than normal to make up for the fact they can decide to back out of the agreement at any point? No.",
"title": ""
},
{
"docid": "05766dc8c89461ba9c16511f905d9443",
"text": "Yes we do still get paid. When someone get's a burnout, they pay six weeks. There's a lot of pseudo-sickness anyway, and people living unhealthy lives and getting sick through that, so i wouldn't actually find the australian system a problem..although you only have to get really sick once to feel it hard..",
"title": ""
},
{
"docid": "a93ff8c81440a0370a8a7e013b55910e",
"text": "In Australia anyone thinking about retirement should be concentrating on superannuation. Contribution is compulsory (I think the current minimum contribution rate is 9.5% of salary) and both contributions and investment returns are very tax efficient. The Government site is quite comprehensive - http://www.australia.gov.au/topics/economy-money-and-tax/superannuation - have a read and come back with any specific questions.",
"title": ""
}
] |
fiqa
|
27994ae19f70792fa98150e8ecadd834
|
Depositing a check with a DBA on the title
|
[
{
"docid": "cb123ade4ccc7cfac85eccb067143e41",
"text": "Assuming it's your business, endorse the check as yourself and your DBA name, payable to your personal account",
"title": ""
}
] |
[
{
"docid": "1884d09a6e7e4786e5ba73997559dc1b",
"text": "In the united states, they may request a check written by the bank to the other party. I have had to make large payments for home settlements, or buying a car. If the transaction was over a specified limit, they wanted a cashiers check. They wanted to make sure it wouldn't bounce. I have had companies rebate me money, and say the maximum value of the check was some small value. I guess that was to prevent people from altering the check. One thing that has happened to me is that a large check I wanted to deposit was held for a few extra days to make sure it cleared. I wouldn't have access to the funds until the deadline passed.",
"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": "45430766fd9e2a4c81c5db997ceef669",
"text": "The advice above is generally good, but the one catch I haven't seen addressed is which specific laws apply. You said that you are in Arkansas, but the dealer is in Texas. This means that the laws of at least two different states are in play, possibly three if the contract contains a clause stating that disputes will be handled in a certain jurisdiction, and you are going to have to do some research to figure out what actually applies. One thing that may significantly impact this issue is whether you were in TX or AR when you signed the contracts. If you borrowed the money in TX, and the lender is in TX, then it is almost certain that the laws of Texas will govern. However, if you were living in AR at the time you acquired the loan, particularly if you were in AR when you signed the papers, you have a decent case for claiming that the laws of Arkansas govern. I don't know enough about either state to know if one is more favorable to the consumer than the other, but it is a question you really want to have answered. That said, I would be shocked if any state did not have provisions requiring the lender to provide a copy of the terms and a detailed statement of the account and transaction history upon request. Spend some time on the web site of the Texas attorney general and/or legislator (because that is where the lender is, they are more likely to respect Texas law) to see if you can track down any specific laws or codes that you can reference. You might also look into the federal consumer protection laws, though I can't think of one off hand that would apply in the scenario you have described. Then work on putting together a letter asking them to provide a copy of the contract and a full history of the account. As others noted, make sure you send it certified/return receipt, or better yet use a private carrier such as fedex, and check the box about requiring a signature. Above all you need to get the dialog transferred to a written form. I can not stress this point enough. Everything you tell them or ask for from here out needs to be done in a written format. If they call you about anything, tell them you want to see their issue/offer in writing before you will consider it. You do not necessarily need a lawyer to do any of this, but you do need to know the applicable laws. Do the research to know what your legal standing is. Involve a lawyer if you feel you need to, but I have successfully battled several large utility companies and collection agencies into behaving without needing one.",
"title": ""
},
{
"docid": "a8d9a264811e3392550bcf41ffb67dda",
"text": "buy a cashiers check with the cash (a CRT will be nec if over 10 K) and deposit the cashiers check",
"title": ""
},
{
"docid": "d8901ebcbe588b9b70a36bb5f84f71a5",
"text": "\"You're a partnership. You should ask the money to be paid to the partnership. You'll have to fill partnership income tax return (form 1065) and each of you will get a K-1 schedule with your own personal portion of the income. For example, you're Adam, Ben and Clara. You work together on a project and are being paid. You get a check for $300 issued to \"\"Adam, Ben and Clara, DBA ABC Partnership\"\". You don't have to have a DBA, it just makes it easier to show you as a single entity. You then deposit the check to an account you set up for your partnership, and from that account you transfer $100 to each of you. Year end, you file form 1065, showing $300 income, and attach K-1 for each of the partners showing $100 income. That $100 income will flow to your individual tax returns. The overhead here is setting up a partnership account, potentially making a DBA, and filing the extra tax return. That's the proper way to do it, especially if it is something you're going to do regularly. For a one-time thing, one of you can get paid, report it as income on his/her Schedule C, and issue 1099 to the rest of you for your parts, and deduct the amount as his/her expense. Here, the overhead is Schedule C for each of you (instead of Schedule E if handling it as a partnership), extra 1099 forms (instead of 1065 and K-1s), and a risk of one partner defrauding the others (depends on how much you trust each other). With proper documentation, each of these is equally legal, and tax-wise the costs are the same (i.e.: either way you pay the same taxes). With partnership the overhead is a bit more expensive (DBA+1065 extra cost), but in the long term it will make your life easier if you do this kind of thing regularly. You may want to consider setting up your partnership as a LLC/LLP (depending on what your State allows), but that would require State paperwork and potentially more fees.\"",
"title": ""
},
{
"docid": "e777d2a86f7c8909f956cb2d086fbfa0",
"text": "\"Depending on where you are, you may be able to get away with filing a \"\"Doing Business As\"\" document with your local government, and then having the bank call the county seat to verify this. There is generally a fee for processing/recording/filing the DBA form, of course. But it's useful for more purposes than just this one. (I still need to file a DBA for my hobby work-for-pay, for exactly this reason.)\"",
"title": ""
},
{
"docid": "d0ba3a3f52735f9f8f5be47d45351fa7",
"text": "\"If you wish to lend them the money, make the check payable to the order of \"\"loan\"\", not directly to your son or daughter.\"",
"title": ""
},
{
"docid": "9dc9debd5d052930eabc49b7000d8de0",
"text": "The person writing the check has already signed and endorsed it. The depositer's signature is not to confirm the check's validity, but to demonstrate that the check was depisited to the correct Fred Smith's account, and permit charges to be brought if, eg, Fred Bonzo Smith tries to steal Fred Gnorph Smith's check.",
"title": ""
},
{
"docid": "a851a49cd357b224216792c74b6ab41d",
"text": "Many businesses will request that you get a bank-issued check for large amounts of money. The exception is often in cases where you're not going anywhere: you can write a 50,000 check for a deposit on a new house, and you'll never have a problem, but a car dealer will probably request a counter check for the same sum.",
"title": ""
},
{
"docid": "02a058752d659ec81be42f03e06b6ccb",
"text": "Savings accounts have lower fees. If you don't anticipate doing many transactions per month, e.g. three or fewer withdrawals, then I would suggest a savings account rather than a checking account. A joint account that requires both account holder signatures to make withdrawals will probably require both account holders' signature endorsements, in order to make deposits. For example, if you are issued a tax refund by the U.S. Treasury, or any check that is payable to both parties, you will only be able to deposit that check in a joint account that has both persons as signatories. There can be complications due to multi-party account ownership if cashing versus depositing a joint check and account tax ID number. When you open the account, you will need to specify what your wishes are, regarding whether both parties or either party can make deposits and withdrawals. Also, at least one party will need to be present, with appropriate identification (probably tax ID or Social Security number), when opening the account. If the account has three or more owners, you might be required to open a business or commercial account, rather than a consumer account. This would be due to the extra expense of administering an account with more than two signatories. After the questioner specified interest North Carolina in the comments, I found that the North Carolina general banking statutes have specific rules for joint accounts: Any two or more persons may establish a deposit account... The deposit account and any balance shall be as joint tenants... Unless the persons establishing the account have agreed with the bank that withdrawals require more than one signature, payment by the bank to, or on the order of (either person on) the account satisfys the bank's obligation I looked for different banks in North Carolina. I found joint account terms similar to this in PDF file format, everywhere, Joint Account: If an item is drawn so that it is unclear whether one payee’s endorsement or two is required, only one endorsement will be required and the Bank shall not be liable for any loss incurred by the maker as a result of there being only one endorsement. also Joint accounts are owned by you individually or jointly with others. All of the funds in a joint account may be used to repay the debts of any co-owner, whether they are owed individually, by a co-owner, jointly with other co-owners, or jointly with other persons or entities having no interest in your account. You will need to tell the bank specifically what permissions you want for your joint account, as it is between you and your bank, in North Carolina.",
"title": ""
},
{
"docid": "dc46bad77cc109cfa403d08ea54ba070",
"text": "If they bring cash, meet at your bank to verify. If they want to use cashiers check, meet them at their bank. Large amounts use wires directly to your acct and verify (not only received, but deposited) before handing over the title/keys.",
"title": ""
},
{
"docid": "6654e2df896eda68dbf3c8da9c17bbfb",
"text": "I've done this, though with a loan company rather than a bank. We agreed on price, drove to the loan company's office (the seller having notified them in advance), I gave them the money, got the title, and they gave the balance to the seller. Important point is that you get the signed-off title from the lienholder.",
"title": ""
},
{
"docid": "074ea5e57c752ea120f2017f3eceb057",
"text": "\"You cant! There is the risk that between the time you get the check and the time you get to the bank that you will be murdered, have a heart attack, stroke, or aneurysm too. And they are probably more likely than the bank going out of business between the time you deposit the money and get access to it. Prior to accepting the check I would do the following: Get a lawyer that specializes in finance and tax law. There are some steps you can take to minimize your tax exposure. There is little you can do about the immediate tax on the winnings but there are things you can do to maximize the return of your money. You will want to do what you can to protect that money for yourself and your family. Also create or revise your will. This is a lot of money and if something happens to you people from your family and \"\"friends\"\" will come out of the woodwork trying to claim your money. Make sure your money goes where you want it to in the event something happens to you. Get a financial planner. This money can either make you or break you. If you plan for success you will succeed. If you trust yourself to make good decisions with out a plan, in a few years you will be broke and wondering what happened to your money. Even at 1% at 20million dollars that is 200k a year in interest... a pretty good income by itself. You do not have to save every penny but you can plan for a nice lifestyle that will last, if you plan and stick to your plan. Do research and know what bank you are going to deposit the money in. Talk to the bank let them know of your plans so they can be ready for it. It is not every day that they get a 20 million dollar deposit. They will need to make plans to handle it. If you are going to spread the money out among several banks they can prepare for that too. When choosing that bank I would look for one where their holdings are significantly more than you are depositing. I would not really go with one of the banks that was rescued. They have already shown that they can not handle large sums of money and assuming they will not screw it up with my money is not something I would be comfortable with. There were some nice sized banks that did not need a bail out. I would choose one of them.\"",
"title": ""
},
{
"docid": "ead7105d38ca69bb114bef6a04725d95",
"text": "\"Your friend probably cannot deposit the check to your U.S. bank account. U.S. banks that I've worked with will not accept a deposit from someone who is not an owner of the account. I don't know why not. If some stranger wants to make unauthorized deposits to my account, why should I object? But that's the common rule. You could endorse the check, your friend could then deposit it to his own account or cash it, and then transfer the money to you in a variety of ways. But I think it would be easier to just deposit the check in your account wherever it is you live. Most banks have no problem with depositing a foreign check. There may be a fairly long delay before you can get access to the money while the check clears through the system. I don't know exactly what you mean by a \"\"prize check\"\", but assuming that this is taxable income, yes, I assume the U.S. government would want their hard-earned share of your money. These days you can pay U.S. taxes on-line if you have a credit card. If you have not already paid U.S. taxes for the year, you should make an \"\"estimated payment\"\". i.e. you can't wait until April 15 of the next year, you have to pay most or all of the taxes you will owe in the calendar year you earned it.\"",
"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": ""
}
] |
fiqa
|
1e7dfd6acb226fb1bda84fdfa93e1d9e
|
How do I estimate my taxes when I have only 1099 income?
|
[
{
"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": "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": "177452e08f5bcd1a5ccb6fada4720bcd",
"text": "\"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of \"\"How to File Your Income Taxes\"\" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or 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). It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as \"\"Royalty Property\"\". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4. I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income.\"",
"title": ""
},
{
"docid": "7a8e97d90b03bc52e190b95e1e4ffe53",
"text": "You're interpreting this correctly. Furthermore, if your total tax liability is less than $1000, you can not pay estimates at all, just pay at the tax day. See this safe harbor rule in the IRS publication 17: 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: 90% of the tax to be shown on your 2016 tax return, or 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.",
"title": ""
},
{
"docid": "d84e9fe503670774bb17b058515f7081",
"text": "1040ES uses the smaller number because that's what triggers the penalties. (That is, you are penalized if what you prepay is less than your total 2013 liability and less than 90% of your 2014 liability.) However, estimated taxes are just estimates. If you pay too little, you could face a penalty, but there's no penalty for paying too much -- you'll just get a refund as usual. It seems that your concern stems from the fact that this is the first year you're in this tax situation and so you're unsure if your estimates are accurate. In your comment to Pete Belford's answer, you also indicated you aren't worried about being unable to pay, but only about accidentally underpaying. In this case, you could just err on the side of caution and pay more than 1040ES says you owe. (You don't actually file the 1040ES, the calculations are just for your own use.) For instance, you could prepay based on the higher of your two estimates, if you can afford it; or, if you can't afford that much, hedge the estimate payments up a bit to an amount you can afford that is closer to the higher estimate. At the end of the year if you paid too much you can get a refund as usual. After this year, you will presumably have a better sense of your income and your tax liability, and can make more accurate estimates for next year.",
"title": ""
},
{
"docid": "5b35f56ae9f7b7cfeda710f2447a38c3",
"text": "I've given up on trying to understand how the allowances correspond to my number of dependents. What I do instead to achieve the same end goal of having the right amount of money withheld is using a paycheck calculator. If I get paid 24 times a year (twice a month) and I figure I'm going to owe about $6,000 of taxes, then every paycheck needs to have $250 of federal tax withheld from it to make sure I am covered. Go to the paycheck calculator and play with the allowance numbers until you get $250 as the federal tax withheld and then submit a new W4 to your employer. This is the only reliable way I've found to figure this out on my own. Because my calculations are done in dollars instead of exemptions, etc. and my taxes do not wildly fluctuate year-to-year this works well for me.",
"title": ""
},
{
"docid": "1a215235050247865d3e2f2c75a3b8eb",
"text": "From my blog's discussion on 2017 tax rates. This is the final set of numbers. So, if you currently have, say $120K taxable income, every dollar above that starts getting taxed at 25%, until $153K, then 28%. In other words, forecast your taxes based on the day job, but then the 1099 goes on top of that.",
"title": ""
},
{
"docid": "df1cc2cb4c76bfa5c80278704fabfcbd",
"text": "Your calculations look correct in that they will be withholding taxes at the full year income rate even though you will only have 1/3 of that income which will put you in a lower tax bracket. There are online sites where you can fill out a return for free. You can estimate your return by filling out a return using the numbers on your paystub (you will have to add in your last paystub manually). In regards to when you will get your refund check? I believe it comes within a month or so of filing.",
"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": "df1e56fb20ac2062c3ea4d7c85015ded",
"text": "\"If you're single, the only solution I'm aware of, assuming you are truly getting a 1099-misc and not a W-2 (and don't have a W-2 option available, like TAing), is to save in a nondeductible account for now. Then, when you later do have a job, use that nondeductible account (in part) to fund your retirement accounts. Particularly the first few years (if you're a \"\"young\"\" grad student in particular), you'll probably be low enough on the income side that you can fit this in - in particular if you've got a 401k or 403b plan at work; make your from-salary contributions there, and make deductible IRA or Roth IRA contributions from your in-school savings. If you're not single, or even if you are single but have a child, you have a few other options. Spouses who don't have earned income, but have a spouse who does, can set up a Spousal IRA. You can then, combined, save up to your spouse's total earned income (or the usual per-person maximums). So if you are married and your wife/husband works, you can essentially count his/her earned income towards your earned income. Second, if you have a child, consider setting up a 529 plan for them. You're probably going to want to do this anyway, right? You can even do this for a niece or nephew, if you're feeling generous.\"",
"title": ""
},
{
"docid": "904dbe1fdaa1a1fc7f4f79339bfd05a6",
"text": "My understanding (I've never filed one myself) is that the 1040ES is intended to allow you to file quarterly and report unpredictable income, and to pay estimated taxes on that income. I was in the same sort of boat for 2016 -- I had a big unexpected income source in 2015, and this took away my Safe Harbor for 2016. I adjusted my w-2 to zero exemptions (eventually) and will be getting a refund of about 1% of our income. So lets say you make 10000 in STG in March, and another 15000 in STG in April. File a quarterly 1040-ES between March 31 and April 15. Report the income, and pay some tax. You should be able to calculate the STCG Tax for 10k pretty easily. Just assume that it comes off the top and doesn't add at all to your deductions. Then for April, do the same by June 15. Just like your W-2 is used to estimate how much your employer should withhold, the 1040ES is designed to estimate how much extra you need to pay to the IRS to avoid penalties. It'll all get resolved after you file your final 1040 for the 2017 calendar year.",
"title": ""
},
{
"docid": "3d7833f48df0b9d829546e90aeb990ef",
"text": "\"I have a related issue, since I have some income which is large enough to matter and hard to predict. Start with a best guess. Check what tax bracket you were in last year and withhold that percentage of the expected non-withheld income. Adjust upward a bit, if desired, to reflect the fact that you're getting paid more at the new job. Adjust again, either up or down, to reflect whether you were over-withheld or under-withheld last year (whether the IRS owed you a refund or you had to send a check with your return). Repeat that process next year after next tax season, when you see how well your guess worked out. (You could try pre-calculating the entire tax return based on your expected income and then divide any underpayment into per-paycheck additional withholding... but I don't think it's worth the effort.) I don't worry about trying to get this exactly correct. I don't stress about lost interest if I've over-withheld a bit, and as long as your withholding was reasonably close and you have the cash float available to send them a check for the rest when it comes due, the IRS generally doesn't grumble if your withholding was a bit low. (It would be really nice if the IRS paid us interest on over-withholding, to mirror the fact that they charge us interest if we're late in returning our forms. Oh well.) Despite all the stories, the IRS really is fairly reasonable; if you aren't deliberately trying to get away with something, the process is annoying but shouldn't be scary. The one time they mail-audited me, it was several thousand dollars in my favor; I'd forgotten to claim some investment losses, and their computers noticed the error. Though I still say the motto of the next revolution will be \"\"No taxation without proper instructions!\"\"\"",
"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": "34e032c7020209c3c64acd53e45a49c3",
"text": "If you don't itemize your deductions, your state tax refund is not considered income to you. Even if you didn't receive the actual 1099-G, you know how much refund you got, so you can calculate if you need to add it back to your income this year using the worksheet on page 23 of the instructions.",
"title": ""
},
{
"docid": "ccbc20034b475506fd64d7f07b3989cf",
"text": "There are a few methods you can use to estimate your taxes. On the results screen, the app will show you your estimated tax burden, your estimated withholding for the year, and your estimated overpayment/refund or shortfall/tax due. It may also have recommendations for you on how to adjust your W-4 (although, this late in the year, I think it only tells you to come back next year to reevaluate). Your state might also have income tax, and if you are curious about that, you can find the state tax form and estimate your state income tax as well. My guess is that you will be getting a refund this year, as you have only worked half of the year. But that is only a guess.",
"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": ""
}
] |
fiqa
|
f5f6d1d0953b60ccc708e014f5fa5ca8
|
Will my current employer find out if I have a sole proprietarship/corporation?
|
[
{
"docid": "44196971486774a06269824b9d7d37f4",
"text": "Tell your employer during your initial contract Terms of Service discussions. Ordinarily, this is boilerplate but you should ask for a rider in your contract which says - in some form - I already have IP, I will continue to work on this IP in my own time, and any benefit or opportunity derived from this IP will continue to be entirely mine. I requested exactly such a rider when I took up a new job just over a year ago and my employer was extremely accommodating. That I already had a company in which that IP could reside actually made the process easier. As @JohnFX has already mentioned, not telling your employer is both unethical as well as storing up potential legal hassles for you in the futre.",
"title": ""
},
{
"docid": "7ae4882f94023fc8c07cb062938cb787",
"text": "I can see why you'd be reluctant to tell them, but I think you need to be open and honest with them about what you're doing and where you see it going. If the roles were reversed, what would you want your employee to do in this situation? If it were me, I'd be much happier to be told up front than to find out some other way later. If I found out later, I'd feel somewhat betrayed and angry. With the Internet, it seems unlikely that they wouldn't find out eventually, so I think being up front about it is your best option. I also suggest you have a backup plan in case they say no. Perhaps you'd need to find another full-time job that is more tolerant (or even encouraging) of side businesses.",
"title": ""
},
{
"docid": "75edeb9ae4536f263a50f02fb5a2f556",
"text": "I would have thought that if you are doing it in your own time using your own resources it really has nothing to do with your current employer, so there is really no need at all to keep it from them. By being open and transperant you might even get some business from your work mates.",
"title": ""
},
{
"docid": "90a80872e5049f98aaa0e251e2320590",
"text": "Some governments offer business information search for corporations in their jurisdiction. The search results may show the director information for the company. If this information is made publicly available, keep in mind there are websites that make money from indexing publicly available information to show in Google search results. I don't mean to scare you as this is a likely a slim possibility. It really depends on the privacy practices in place at the jurisdiction you're in. But do keep in mind if you're planning on doing business on the side for a few years policies may change. I would call Service Ontario (or whichever province you're incorporating in) or Corporations Canada if federally incorporating and ask them if they offer a business search service and exactly what information they make public. You might be able to reach a Privacy Officer and find out what exactly their policy is.",
"title": ""
}
] |
[
{
"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": "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": "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": "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": "a149fdf1285ac4fb30373ca3b82c5b40",
"text": "\"Would my (new) landlord even be aware of the fact that I'm his guarantor? Does that show up on a credit report or would there be another indication of it somewhere? It may come up during background checks, and it may not come up. You're expected to disclose material information on the rental application, and withholding it may lead to voiding the rental contract and eviction. But the problem is slightly different. Can you afford paying two rents? By being the guarantor you take the responsibility of paying the rent \"\"in the case if...\"\". You need to treat it as a real liability that you will be expected to pay. With all the respect to your brother, if something unexpected happens - you will be on the hook. You have to account for that.\"",
"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": "d86b13bd601e7df442d84da6045192f9",
"text": "\"This is going to vary tremendously from country to country (and even from state to state, in some cases). In general, though: Sole proprietorship: LLC: There are a lot of permutations depending on local law. One thing that isn't actually much of an advantage is the \"\"limited liability\"\" component of the LLC. Simply put: for a really small company the majority shareholders are usually going to be \"\"forced\"\" to stand surety for the company in their personal capacity. Limited liability only becomes available once the company has quite a lot of cash/assets (or the illusion of a lot of cash/assets). Update - noticed two further questions that appear very similar: Should all of these be merged?\"",
"title": ""
},
{
"docid": "ea9f9fc82183c4ddab03dc9c66889e9f",
"text": "Can he use an existing credit card in his name for all his business expenses, or does that pierce the corporate veil? That would be a question to a lawyer, since there's no definitive answer but rather circumstantial. Generally it is safer to separate the finances completely than to try and guess what the court would rule if it comes to that. It is not hard to get a separate card for a LLC (especially if it is a sole proprietorship). We are going to buy a house soon, so I don't want any extra inquiries. I guess it depends on the bank and the type of card. My Citi business card doesn't show up on my personal credit report.",
"title": ""
},
{
"docid": "91b639f038d29486bfe83e57212810c9",
"text": "In the UK is perfectly acceptable to use your personal bank account as a business account if your a sole trader, although it can be messy. Just record and keep all relevant transaction invoices etc documents for self assessment time. At self assessment time they will tell you the amount of tax you need to pay when you fill out the forms. Not sure how it is Canada. If you get bigger get an accountant.",
"title": ""
},
{
"docid": "4bf9c168d813c28cba490998fef20d5e",
"text": "\"Be careful of the other answers here. Many are wrong or partially wrong. The question implies that you knew this, but for everyone else's benefit, you can keep you LLC organization and still elect to be treated as a S-Corp by the IRS just for tax purposes. You do this by filing Form 2553 with the IRS. (You can also, by the way, elect to be taxed as a \"\"regular\"\" C-Corp if you want, although that's probably not advantageous. See Form 8832.) The advantage of electing to be treated as an S-Corp is that income beyond what constitutes a \"\"reasonable salary\"\" are not subject to social security and medicare taxes as they would when paid was wages or counted as self-employment income on Schedule C. Depending on what you need to pay yourself to meet the \"\"reasonable salary\"\" test, your overall income, and other factors about your business, this could result in tax savings. Contrary to other answers here, making this election will not force you to create a board of directors. You are still an LLC for all purposes except taxes, so whatever requirements you had in organization and governance at the state level will not change. You will have to file a \"\"corporate\"\" tax return on Form 1120S (and likely some corresponding state tax form), so that is additional paperwork, but this \"\"corporate\"\" return does not mean the S-Corp pays taxes itself. With a couple of exceptions, the S-Corp pays no taxes directly (and therefore does not pay at the corporate tax rate). Instead the S-Corp apportions its income, expenses, and deductions to the owner(s) on Schedule K. The owners get their portion reported from the S-Corp on Schedule K1 and then include that on their personal Form 1040 to pay tax at their personal rate. In addition to filing Form 1120S, you will have to handle payroll taxes, which will create some additional administrative work and/or cost. Using a payroll service for this will likely be your best option and not terribly expensive. You've also got the issue of determining your reasonable salary within the rules, which is the subject of other questions on this site and other IRS guidance.\"",
"title": ""
},
{
"docid": "4e5c747746142c0d25d8674c0f3044c0",
"text": "\"They are basically asking for the name of the legal entity that they should write on the check. You, as a person, are a legal entity, and so you can have them pay you directly, by name. This is in effect a \"\"sole proprietorship\"\" arrangement and it is the situation of most independent contractors; you're working for yourself, and you get all the money, but you also have all the responsibility. You can also set up a legal alias, or a \"\"Doing Business As\"\" (DBA) name. The only thing that changes versus using your own name is... well... that you aren't using your own name, to be honest. You pay some trivial fee for the paperwork to the county clerk or other office of record, and you're now not only John Doe, you're \"\"Zolani Enterprises\"\", and your business checks can be written out to that name and the bank (who will want a copy of the DBA paperwork to file when you set the name up as a payable entity on the account) will cash them for you. An LLC, since it was mentioned, is a \"\"Limited Liability Company\"\". It is a legal entity, incorporeal, that is your \"\"avatar\"\" in the business world. It, not you, is the entity that primarily faces anyone else in that world. You become, for legal purposes, an agent of that company, authorized to make decisions on its behalf. You can do all the same things, make all the same money, but if things go pear-shaped, the company is the one liable, not you. Sounds great, right? Well, there's a downside, and that's taxes and the increased complexity thereof. Depending on the exact structure of the company, the IRS will treat the LLC either as a corporation, a partnership, or as a \"\"disregarded entity\"\". Most one-man LLCs are typically \"\"disregarded\"\", meaning that for tax purposes, all the money the company makes is treated as if it were made by you as a sole proprietor, as in the above cases (and with the associated increased FICA and lack of tax deductions that an \"\"employee\"\" would get). Nothing can be \"\"retained\"\" by the company, because as far as the IRS is concerned it doesn't exist, so whether the money from the profits of the company actually made it into your personal checking account or not, it has to be reported by you on the Schedule C. You can elect, if you wish, to have the LLC treated as a corporation; this allows the corporation to retain earnings (and thus to \"\"own\"\" liquid assets like cash, as opposed to only fixed assets like land, cars etc). It also allows you to be an \"\"employee\"\" of your own company, and pay yourself a true \"\"salary\"\", with all the applicable tax rules including pre-tax healthcare, employer-paid FICA, etc. However, the downside here is that some money is subject to double taxation; any monies \"\"retained\"\" by the company, or paid out to members as \"\"dividends\"\", is \"\"profit\"\" of the company for which the company is taxed at the corporate rate. Then, the money from that dividend you receive from the company is taxed again at the capital gains rate on your own 1040 return. This also means that you have to file taxes twice; once for the corporation, once for you as the individual. You can't, of course, have it both ways with an LLC; you can't pay yourself a true \"\"salary\"\" and get the associated tax breaks, then receive leftover profits as a \"\"distribution\"\" and avoid double taxation. It takes multiple \"\"members\"\" (owners) to have the LLC treated like a partnership, and there are specific types of LLCs set up to handle investments, where some of what I've said above doesn't apply. I won't get into that because the question inferred a single-owner situation, but the tax rules in these additional situations are again different.\"",
"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": "0e48693bde300c48d90869879df069e1",
"text": "\"I don't think it really matters, my understanding is that as a sole trader there is no distinction between your personal and business tax affairs. The distinction between your personal and business account is mainly for your own personal benefit to make it easier to differentiate between \"\"wages\"\" and retained earnings. If you want to maintain this distinction with regard to tax then you need to somehow differentiate between tax paid on your \"\"wage\"\" and tax paid on retained earnings. You could then either make two payments, or pay from either and transfer the difference from the other. Either way, it's just a matter of perspective rather than something with a physical difference.\"",
"title": ""
},
{
"docid": "04bbc88a939792d7bc92dd48454f2d87",
"text": "\"Paying yourself through a corporation requires an analysis of a variety of issues. First, a salary paid to yourself creates RRSP contribution room as well as CPP contributions. Paying yourself a dividend achieves neither of those. By having a corporation, you will have to file a corporate (T2) tax return. The corporation is considered a separate legal entity from you. As an individual, you will still need to file a personal (T1) tax return. Never just \"\"draw\"\" money out of a corporation. This can create messy transactions involving loans to shareholders. Interest is due on these amounts and any amounts not paid within one calendar year are considered as wages by Canada Revenue and would need to be reported as income on your next T1 return. You should never withhold EI premiums as the sole owner of a corporation. You are considered exempt from these costs by CRA. Any amounts that have been remitted to CRA can be reclaimed by submitting a formal request. The decision on whether to take a salary or dividends normally requires some detailed analysis. Your accountant or financial advisor should be able to assist in this matter.\"",
"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": ""
}
] |
fiqa
|
2b3b614a5c003f2a83e5dfff7d11c4a1
|
standard method for learning more about a specific sector? (particularly biotech sector)
|
[
{
"docid": "3dcc1f6bf61328136a491edfcd5109e7",
"text": "The important piece here is not necessarily understanding intimate details of biological engineering per se, but rather understanding how the business operates as a singular unit. It is also important to understand the business case for a firm, the evolution of demand for its products/services and the cost of its revenue. To understand a particular sector of the market, you should begin by studying how that sector interacts with and is influenced by the larger market and economy as a whole, both domestic and abroad. From there, you should study individual companies and again see how they interact with one another, the sector, market, etc. Many biotech firms have a different offering and meet different business and consumer demands. Some are near term solutions to existing problems, some long. It is important to see how the firms collectively interact with the consumer base and then differentiate on an individual level.",
"title": ""
}
] |
[
{
"docid": "722f09fc73049e27e18a4b845b5ef302",
"text": "\"In any technical field practitioners have difficulty explaining general/abstract concepts to outsiders. They're accustomed to using a particular set of concepts and ideas that make communication fast and easy between their colleagues, but make communication difficult with outsiders who don't know that language. It's usually easy to come up with a mediocre analogy that communicates the gist of the idea, but finding analogies that capture the complete essence of the concept is extremely hard (and maybe impossible). Have you studied mathematics? Try explaining the concept of a \"\"continuous function\"\" in all its generality without talking about epsilons and deltas or open sets and inverses. You can talk about \"\"drawing a line and not picking up your pencil\"\", but that's not quite what a continuous function is. Likewise, if you've studied law, try explaining what a \"\"security interest\"\" is in its full generality without talking about liens or pledges. You can come up with specific examples, sure, but it'll be tough to find one that captures the whole concept. I'm sure you can come up with examples from whatever field it is you specialise in. Added to this is the problem that the skill-set needed to be a good translator across disciplines isn't really valued in most corporations, including banks. EDIT: I accidentally a word.\"",
"title": ""
},
{
"docid": "725951659c06b70d8fe02aca12320d51",
"text": "I use 10-K and 10-Qs to understand to read the disclosed risk factors related to a business. Sometimes they are very comical. But when you see that risk factor materializing you can understand how it will effect the company. For example, one microlending company's risk factor stated that if Elizabeth Warren becomes head of the Consumer Financial Protection Bureau we will have a hard time... so we are expanding in Mexico and taking our politically unfavorable lending practices there. I like seeing how many authorized shares there are or if there are plans to issue more. An example was where I heard from former employees of a company how gullible the other employees at that company were and how they all thought they were going to get rich or were being told so by upper management. Poor/Quirky/Questionable/Misleading management is one of my favorite things to look for in a company so I started digging into their SEC filings and saw that they were going to do a reverse split which would make the share prices trade higher (while experiencing no change in market cap), but then digging further I saw that they were only changing the already issued shares, but keeping the authorized shares at the much larger amount of shares, and that they planned to do financing by issuing more of the authorized shares. I exclaimed that this would mean the share prices would drop by 90%-99% after the reverse split and you mean to tell me that nobody realizes this (employees or the broad market). I was almost tempted to stand outside their office and ask employees if I could borrow their shares to short, because there wasn't enough liquidity on the stock market! This was almost the perfect short but it wasn't liquid or have any options so not perfect after all. It traded from $20 after the reverse split to $1.27 I like understanding how much debt a company is in and the structure of that debt, like if a loan shark has large payments coming up soon. This is generally what I use those particular forms for. But they contain a lot of information A lot of companies are able to act they way they do because people do not read.",
"title": ""
},
{
"docid": "4c892cba300873f5baeab9eae1e8c11f",
"text": "I appreciate all the responses, but again, I have NO experience or education in the field. I haven't started any major related college courses yet and do not have a job in the field. I am looking for beginner, introduction level reading material to start reading up on to start understanding the field before I even start school.",
"title": ""
},
{
"docid": "b528f29ebaead09e2665fc7058ec1a55",
"text": "Institute of Supply Management, specifically their Report on Business. Good forward looking indicator. As far as the weekly report, I'd probably read it, maybe even contribute, but I more of a lurker on this sub. I saw your question and have had some similar experiences so I thought I could help you out.",
"title": ""
},
{
"docid": "f145642b62c10d7c00945f9740e705c8",
"text": "\"1. Transcript: http://www.henrygeorgeschool.org/uploads/Smart_Talk_Transcript_Interview_Roberts_v02.pdf Source: http://www.henrygeorgeschool.org/Smart_Talk_TV.html 2. (a) \"\"[The Social Responsibility of Business is to Increase its Profits](http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html)\"\" by Milton Friedman, published on 13 September 1970: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html Mirror: http://web.archive.org/web/20030130073709/www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html (b) \"\"[Maximizing shareholder value: The goal that changed corporate America](http://www.washingtonpost.com/business/economy/maximizing-shareholder-value-the-goal-that-changed-corporate-america/2013/08/26/26e9ca8e-ed74-11e2-9008-61e94a7ea20d_singlePage.html)\"\" by Jia Lynn Yang, published on 26 August 2013: http://www.washingtonpost.com/business/economy/maximizing-shareholder-value-the-goal-that-changed-corporate-america/2013/08/26/26e9ca8e-ed74-11e2-9008-61e94a7ea20d_singlePage.html 3. http://www.reddit.com/r/politics/comments/1kpbd6/oligarchic_tendencies_study_finds_only_the/cbrhf0y 4. http://www.reddit.com/r/technology/comments/28yio0/tech_industry_job_ads_older_workers_need_not_apply/cifoej1 5. \"\"[The West on the wrong path: In view of the events in Ukraine, the government and many media have switched from level-headed to agitated. The spectrum of opinions has been narrowed to the width of a sniper scope. The politics of escalation does not have a realistic goal -- and harms German interests.](http://www.handelsblatt.com/meinung/kommentare/essay-in-englisch-the-west-on-the-wrong-path/v_detail_tab_print/10308406.html)\"\" by Gabor Steingart, published on 8 August 2014: http://www.handelsblatt.com/meinung/kommentare/essay-in-englisch-the-west-on-the-wrong-path/v_detail_tab_print/10308406.html Source: http://www.handelsblatt.com/meinung/kommentare/essay-in-englisch-the-west-on-the-wrong-path/10308406.html Via: http://www.handelsblatt.com/meinung/kommentare/politik-der-eskalation-der-irrweg-des-westens-/10308844.html\"",
"title": ""
},
{
"docid": "a63cad28784905e421646aa0f9ceddf3",
"text": "Look, I'm not an expert in what assets DB has in transportation companies, or to what industries DB's banks lend money. DB is a multinational corporation that probably has its fingers in hundreds of markets and industries. All I am trying to say is that DB is largely disinterested. Just because DB invests marginally in transportation and logistics does not mean that it should be trusted as a significantly invested (and informed) party, any more than I should be trusted as an interested informed party in regards to technology sector because I own shares of a mutual fund that owns shares of Apple and Alphabet. Regardless of the hearsay component, which is inherently untrustworthy, DB is not a market player such that its word should be taken as anything other than with a grain of salt.",
"title": ""
},
{
"docid": "6fe9b65f6806c785675fd32ccb76521a",
"text": "I'm a commodity trader. The only degree I had when I started trading was a BS in Bioinformatics from Loyola University Chicago. If you take initiative and can sweet talk your way into an interview, that's all you need.",
"title": ""
},
{
"docid": "953998066744ca70bd3d52152d186a3a",
"text": "\"If you are interested in a career in algorithmic trading, I strongly encourage you to formally study math and computer science. Algorithmic trading firms have no need for employees with financial knowledge; if they did, they'd just be called \"\"trading\"\" firms. Rather, they need experts in machine learning, statistical modeling, and computer science in general. Of course there are other avenues of employment at an algorithmic trading firm, such as accounting, clearing, exchange relations, etc. If that's the sort of thing you're interested in, again you'll probably want a formal education in those areas as opposed to just reading about finance in the news. If you edit your question or add a comment below with information about your particular background, I could perhaps advise you in a bit more detail. ::edit:: Given your comment, I would say you have a fine academic background for the industry. When hiring mathematicians, firms care most about the ease with which you can explore and extract features from massive datasets (especially time series) regardless of what the dataset might represent. An intelligent firm will not care whether you arrive at their doorstep with zero finance knowledge; they will want to teach you everything from scratch anyway. Nonetheless, some domain knowledge could be helpful, but you're not going to get \"\"more\"\" of it from reading any mass market news source, whether you have to pay for it or not. That's because Some non-mass-market news sources in the industry are These are subscription-only and actually discuss real information that real professional investors care about. They are loaded with industry jargon, they're extremely opinionated, and (in my opinion) they're useless. I can't imagine trying to learn about the industry from them, but if you want to spend money for news in order to be exposed to the innards of the industry, then either of these is far better than the Financial Times. Despite requiring a subscription, the Financial Times still does not cover the technical details of professional trading. Instead of trying to learn from news, then, I would suggest some old favorites: and, above all else, Read everything in the navigation box on the right side under Financial Markets and Financial Instruments.\"",
"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": "93d25391c93587cbf192cc506120e270",
"text": "\"It is great that you want to learn more about the Stock Market. I'm curious about the quantitative side of analyzing stocks and other financial instruments. Does anyone have a recommendation where should I start? Which books should I read, or which courses or videos should I watch? Do I need some basic prerequisites such as statistics or macro and microeconomics? Or should I be advanced in those areas? Although I do not have any books or videos to suggest to you at the moment, I will do some more research and edit this answer. In order to understand the quantitative side of analyzing the stock market to have people take you serious enough and trust you with their money for investments, you need to have strong math and analytical skills. You should consider getting a higher level of education in several of the following: Mathematics, Economics, Finance, Statistics, and Computer Science. In mathematics, you should at least understand the following concepts: In finance, you should at least understand the following concepts: In Computer Science, you should probably know the following: So to answer your question, about \"\"do you need to be advanced in those areas\"\", I strongly suggest you do. I've read that books on that topics are such as The Intelligent Investor and Reminiscences of A Stock Operator. Are these books really about the analytics of investing, or are they only about the philosophy of investing? I haven't read the Reminiscences of A Stock Operator, but the Intelligent Investor is based on a philosophy of investing that you should only consider but not depend on when you make investments.\"",
"title": ""
},
{
"docid": "fb76fc501e4f11446cb4dad03e64910a",
"text": "I'd love to do something in the style of Nassim Taleb (fat tails, black swan events, and so forth) He's a mathematical geniues, despite his controversial personality. How useless is the VaR as a risk management tool would be a great topic. Or something regarding policy/regulation (hot topic now).",
"title": ""
},
{
"docid": "737c84266aeb5494df7a0a0cdba9b4a7",
"text": "\"I want to elaborate on some of the general points made in the other answers, since there is a lot that is special or unique to the biotech industry. By definition, a high P/E ratio for an industry can stem from 1) high prices/demand for companies in the industry, and/or 2) low earnings in the industry. On average, the biotech industry exhibits both high demand (and therefore high prices) and low earnings, hence its average P/E ratio. My answer is somewhat US-specific (mainly the parts about the FDA) but the rest of the information is relevant elsewhere. The biotech industry is a high-priced industry because for several reasons, some investors consider it an industry with significant growth potential. Also, bringing a drug to market requires a great deal of investment over several years, at minimum. A new drug may turn out to be highly profitable in the future, but the earliest the company could begin earning this profit is after the drug nears completion of Phase III clinical trials and passes the FDA approval process. Young, small-cap biotech companies may therefore have low or negative earnings for extended periods because they face high R&D costs throughout the lengthy process of bringing their first drug (or later drugs) to market. This process can be on the order of decades. These depressed earnings, along with high demand for the companies, either through early investors, mergers and acquisitions, etc. can lead to high P/E ratios. I addressed in detail several of the reasons why biotech companies are in demand now in another answer, but I want to add some information about the role of venture capital in the biotech industry that doesn't necessarily fit into the other answer. Venture capital is most prevalent in tech industries because of their high upfront capital requirements, and it's even more important for young biotech companies because they require sophisticated computing and laboratory equipment and highly-trained staff before they can even begin their research. These capital requirement are only expected to rise as subfields like genetic engineering become more widespread in the industry; when half the staff of a young company have PhD's in bioinformatics and they need high-end computing power to evaluate their models, you can see why the initial costs can be quite high. To put this in perspective, in 2010, \"\"venture capitalists invested approximately $22 billion into nearly 2,749 companies.\"\" That comes out to roughly $7.8M per company. The same year (I've lost the article that mentioned this, unfortunately), the average venture capital investment in the biotech industry was almost double that, at $15M. Since many years can elapse between initial investment in a biotech company and the earliest potential for earnings, these companies may require large amounts of early investment to get them through this period. It's also important to understand why the biotech industry, as a whole, may exhibit low earnings for a long period after the initial investment. Much of this has to do with the drug development process and the phases of clinical trials. The biotech industry isn't 100% dedicated to pharmaceutical development, but the overlap is so significant that the following information is more than applicable. Drug development usually goes through three phases: Drug discovery - This is the first research stage, where companies look for new chemical compounds that might have pharmaceutical applications. Compounds that pass this stage are those that are found to be effective against some biological target, although their effects on humans may not be known. Pre-clinical testing - In this stage, the company tests the drug for toxicity to major organs and potential side effects on other parts of the body. Through laboratory and animal testing, the company determines that the drug, in certain doses, is likely safe for use in humans. Once a drug passes the tests in this stage, the company submits an Investigational New Drug (IND) application to the FDA. This application contains results from the animal/laboratory tests, details of the manufacturing process, and detailed proposals for human clinical trials should the FDA approve the company's IND application. Clinical trials - If the FDA approves the IND application, the company moves forward with clinical trials in human, which are themselves divided into several stages. \"\"Post-clinical phase\"\" / ongoing trials - This stage is sometimes considered Phase IV of the clinical trials stage. Once the drug has been approved by the FDA or other regulatory agency, the company can ramp up its marketing efforts to physicians and consumers. The company will likely continue conducting clinical trials, as well as monitoring data on the widespread use of the drug, to both watch for unforeseen side effects or opportunities for off-label use. I included such detailed information on the drug development process because it's vitally important to realize that each and every step in this process has a cost, both in time and money. Most biopharm companies won't begin to realize profits from a successful drug until near the end of Phase III clinical trials. The vast R&D costs, in both time and money, required to bring an effective drug through all of these steps and into the marketplace can easily depress earnings for many years. Also, keep in mind that most of the compounds identified in the drug discovery stage won't become profitable pharmaceutical products. A company may identify 5,000 compounds that show promise in the drug discovery stage. On average, less than ten of these compounds will qualify for human tests. These ten drugs may start human trials, but only around 20% of them will actually pass Phase III clinical trials and be submitted for FDA approval. The pre-clinical testing stage alone takes an average of 10 years to complete for a single drug. All this time, the company isn't earning profit on that drug. The linked article also goes into detail about recruitment delays in human trials, scheduling problems, and attrition rates for each phase of the drug development process. All of these items add both temporal and financial costs to the process and have the potential to further depress earnings. And finally, a drug could be withdrawn from the market even after it passes the drug development process. When this occurs, however, it's usually the fault of the company for poor trial design or suppression of data (as in the case of Vioxx). I want to make one final point to keep in mind when looking at financial statistics like the P/E ratio, as well as performance and risk metrics. Different biotech funds don't necessarily represent the industry in the same way, since not all of these funds invest in the same firms. For example, the manager of Fidelity's Select Biotechnology Portfolio (FBIOX) has stated that he prefers to weight his fund towards medium to large cap companies that already have established cash flows. Like all biopharm companies, these firms face the R&D costs associated with the drug development process, but the cost to their bottom line isn't as steep because they already have existing cash flows to sustain their business and accumulated human capital that should (ideally) make the development process more efficient for newer drugs. You can also see differences in composition between funds with similar strategies. The ishares Nasdaq Biotech Index Fund (IBB) also contains medium to large cap companies, but the composition of its top 10 holdings is slightly different from that of FBIOX. These differences can affect any metric (although some might not be present for FBIOX, since it's a mutual fund) as well as performance. For example, FBIOX includes Ironwood Pharmaceuticals (IRWD) in its top 10 holdings, while IBB doesn't. Although IBB does include IRWD because it's a major NASDAQ biotech stock, the difference in holdings is important for an industry where investors' perception of a stock can hinge on a single drug approval. This is a factor even for established companies. In general, I want to emphasize that a) funds that invest more heavily in small-cap biotech stocks may exhibit higher P/E ratios for the reasons stated above, and b) even funds with similar mixes of stocks may have somewhat different performance because of the nature of risk in the biotech industry. There are also funds like Vanguard's Healthcare ETF (VHT) that have significant exposure to the biotech industry, including small-cap firms, but also to major players in the pharmaceutical market like Pfizer, Johnson and Johnson, etc. Since buyouts of small-cap companies by large players are a major factor in the biotech industry, these funds may exhibit different financial statistics because they reflect both the high prices/low earnings of young companies and the more standard prices/established earnings of larger companies. Don't interpret anything I stated above as investment advice; I don't want anything I say to be construed as any form of investment recommendation, since I'm not making one.\"",
"title": ""
},
{
"docid": "fb0927a7b7d0b22ddb6786217aef90d2",
"text": "I don't know what you are asking. Can you give me an example of what fits the question? That you use phrases like profit extraction make me think we have a different assumption base, so I think we have to find common syntactic ground before we can exchange ideas in a meaningful way. I would like to do so, though, so I hope you respond.",
"title": ""
},
{
"docid": "793747651d0125a3ed9bc1db898787a9",
"text": "Well, it also discusses other traditional valuation techniques such as the economic profit model and it has a chapter on real option valuation. But I would not label those exotic valuation methods. However, I would say that the CFA challenge is much about standard valuation methods due to the limited page limit and considering that there should properly also be an analysis of the external and internal environment to determine the future prospects of the given company.",
"title": ""
},
{
"docid": "f46c278b5933fbb0e54879108648e3d7",
"text": "Well, you should have something that you are passionate about, but you don't necessarily need to choose a coverage right away. Many enter as generalists for IB, buy side and sell side. However, if you are going to create a buy side report, you should tailor it to what sectors or criteria the firm selects from. If the firm you are talking to invests in consumer staples, energy and financials, a tech buy side report makes little sense. At the same time, if they are interested in tech, try and narrow it down. Are they interested in tech mfg such as chips or electronics? Or are they interested in internet companies, service firms, BPOs, etc?",
"title": ""
}
] |
fiqa
|
5166d1fd04f20a1c4335d0cd4bc5b7f5
|
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
|
[
{
"docid": "8226861e999d5309617e09affbc81fb2",
"text": "\"It's a little unusual, but I don't think the financial terms are completely unreasonable on their face. What you describe is similar to an interest-only loan, where you make payments that only cover the interest due each month, and the entire principal is due as a single \"\"balloon payment\"\" on a specified date (in this case, the date on which the condo is sold). Your monthly payment of $500 on a principal of $115K is equivalent to an annual interest rate of 5.22%, which at least is not completely usurious. With a traditional mortgage you might pay a rate as low as 3%, if you had sufficient income and excellent credit - but I don't know, from what you've said, whether that's the case. Did you make the current arrangement because you were unable to get a loan from a bank? The main difference here is that instead of the balloon payment being a fixed $115K, it's \"\"75% of the gross proceeds of the sale\"\". If the condo eventually sells for $155K, that would be $116,250, so that's slightly advantageous to them (assuming that \"\"gross proceeds\"\" means \"\"before deducting commissions for either the buyers' or sellers' realtors or any other costs of the sale\"\"), and thus slightly disadvantageous to you. If the condo appreciates in value, that's more of a win for them and more of a relative loss for you. But it's also possible that the value of the condo goes down, in which case this arrangement is better for you than a fixed balloon payment. So this deal does prevent you from getting a larger share of any gains in the value of the property, but it also helps insulate you from any losses. That's important to keep in mind. There's also the issue of needing their consent to sell. That's potentially problematic - usually in a joint ownership scheme, either owner has the right to demand to be bought out or to force a sale. I guess it depends on whether you think your parents would be likely to consent under reasonable circumstances, or to insist on holding the property against your best interests. It's true that you aren't building equity with this arrangement, and if you thought you were, you are mistaken or misled. But let's compare it with other options. If you would qualify for a traditional 30-year fixed mortgage at 3%, your monthly payment would be slightly lower ($484), and you would be building some equity because your payments would reduce the principal as well as paying the interest. But a 30-year loan builds equity very slowly at first - after 7 years you'd have only about $20,000 in principal paid down. If we assume that 5.2% represents the interest rate you'd otherwise pay based on your creditworthiness, then your monthly payment would be $631. So compared to that, you have an extra $130 per month that you can save or invest in whatever you want - you're not forced to invest it in your house. Note that in either case you'd still be paying the condo fees, property taxes, insurance, and maintenance yourself. So we might as well eliminate those from consideration. It might be a good idea to find out what other options you would have - perhaps try to get an interest rate quote on a traditional mortgage from a bank, based on your income and credit history. Then you can decide what to do, taking into account: your financial situation; how much of a monthly payment could you afford? your relationship with your parents; are they likely to be reasonable about renegotiating? Do they in general tend to respect your wishes? Would it harm your relationship if you tried to get out of the deal, and how important is that to you? To what extent do you actually want to pay for equity in this property? Do you really believe it's a good investment, and have evidence to support that? Your options include: Try to renegotiate the terms of the loan from your parents Try to \"\"refinance\"\" the loan, by getting a loan from a bank and paying off some agreed-upon amount of principal to your parents Try to force the sale of the condo and move to another house, financing it some other way Consult a lawyer as to whether your agreement with your parents is legally enforceable. For instance, do they have a lien on the property?\"",
"title": ""
},
{
"docid": "fc232e3c84fde3822d8b7b8bd1043111",
"text": "Ripped off may be too strong as it implies intent - I'm hopeful it's just bad logic or terminology. I would say better agreements would be: Borrowing money from family/friends is always risky. If you and your parents are comfortable with the situation and can reliably keep records of how much is owed at any given time (and how much of the $500/mo is interest) then the loan might be a good option. If not, and your parents don't need the income stream from the loan, then I would recommend the second option since it's much cleaner. In any case, make sure everything is in writing and the proper legal procedures are followed (just as if you had borrowed the money from a bank). That means either filing a mortgage with the county for option 1 or having both parties on the deed, and having the ownership percentages in writing.",
"title": ""
},
{
"docid": "3a0af25e03040e9e403abe4284ce6bb4",
"text": "\"To expand on what @fishinear and some others are saying: The only way to look at it is that the parents have invested, because the parents get a % of the property in the end, rather than the original loan amount plus interest. It is investment; it is not a loan of any kind. One way to understand this is to imagine that after 20 years, the property triples in value (or halves in value). The parents participate as if they had invested in 75% ownership of the property and the OP as if 25% ownership of the property. Note that with a loan, there is a (potentially changing) outstanding loan balance, that could be paid to end the loan (to pay off the loan), and there is an agreed upon an interest rate that is computed on the outstanding balance — none of those apply to this situation; further with a loan there is no % of the property: though the property may be used to secure the loan, that isn't ownership. Basically, since the situation bears none of the qualities of a loan, and yet does bear the qualities of investment, the parents have bought a % ownership of the property. The parents have invested in 75% of the real estate, and the OP is renting that 75% from them for: The total rent the OP is paying the parents for their 75% of the property is then (at least) $1012.50/mo, A rental rate of $1012.50/mo for 75% of the property equates to a rental price of $1350/mo for the whole property. This arrangement is only fair to both parties when the fair-market rental value of the whole property is $1350/mo; it is unfair to the OP when the fair-market rental value of property is less, and unfair to the parents when the fair-market rental value of property is more. Of course, the fair-market rental value of the property is variable over time, so the overall fairness would need to understand rental values over time. I feel like this isn't actually a loan if I can never build more equity in the condo. Am I missing something? No, it isn't a loan. You and your parents are co-investing in real estate. Further, you are renting their portion of the investment from them. For comparison, with a loan you have 100% ownership in the property from the start, so you, the owner, would see all the upside/downside as the property valuation changes over time whether the loan is paid off or not. The borrower owes the loan balance (and interest) not some % of the property. A loan may be secured by the property (using a lien) but that is quite different from ownership. Typically, a loan has a payment schedule setup to reduce the loan balance (steadily) over time so that you eventually pay it off. With a loan you gain equity % — the amount you own outright, free & clear — in two ways, (1) by gradually paying off the loan over time so the unencumbered portion of the property grows, and (2) if the valuation of the property increases over time that gain in equity % is yours (not the lenders). However note that the legal ownership is all 100% yours from the start. Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? You can evaluate whether you are being ripped off by comparing the $1350/mo rate to the potential rental rate for the property over time (which will be a range or curve, and there are real estate websites (like zillow.com or redfin.com, others) to help estimate what fair-market rent might be). Are there similar deals like this...? A straight-forward loan would have the borrower with 100% legal ownership from the start, just that the property secures the loan. Whereas with co-investment there is a division of ownership % that is fixed from the start. It is unusual to have both investment and loan at the same time where they are setup for gradual change between them. (Investment and loan can certainly be done together but would usually be done as completely separate contracts, one loan, one investment with no adjustment between the two over time.) To do both investment and loan would be unusual but certainly be possible, I would imagine; however that is not the case here as being described. I am not familiar with contracts that do both so as to take over the equity/ownership/investment over time while also reducing loan balance. Perhaps some forms of rent-to-own work that way, something to look into — still, usually rent-to-own means that until the renter owns it 100%, the landlord owns 100%, rather than a gradual % transfer over time (gradual transfer would imply co-ownership for a long time, something that most landlords would be reluctant to do). Transfer of any particular % of real estate ownership typically requires filing documents with the county and may incur fees. I am not aware of counties that allow gradual % transfer with one single filing. Still, the courts may honor a contract that does such gradual transfer outside of county filings. If so, what should I do? Explain the situation to your parents, and, in particular, however far out of balance the rental rate may be. Decide for yourself if you want to rent vs. buy, and where (that property or some other). If your parents are fair people, they should be open to negotiation. If not, you might need a lawyer. I suspect that a lawyer would be able to find several issues with which to challenge the contract. The other terms are important as well, namely gross vs. net proceeds (as others point out) because selling a property costs a % to real estate agents and possibly some taxes as well. And as the others have pointed out, if the property ultimately looses value, that could be factored in as well. It is immaterial to judging the fairness of this particular situation whether getting a bank loan would be preferable to renting 75% from the parents. Further, loan interest rates don't factor into the fairness of this rental situation (but of course interest rates do factor into identifying the better of various methods of investment and methods of securing a place to live, e.g. rent vs. buy). Contributed by @Scott: If your parents view this as an investment arrangement as described, then you need to clarify with them if the payments being made to them are considered a \"\"buy out\"\" of their share. This would allow you to gain the equity you seek from the arrangement. @Scott: Terms would have to be (or have been) declared to that effect; this would involve specifying some schedule and/or rates. It would have to be negotiated; this it is not something that could go assumed or unstated. -- Erik\"",
"title": ""
},
{
"docid": "da704574752205e27128f2f8b909fbb8",
"text": "First, this was never an arrangement for you to build equity, this was an arrangement for them to speculate on another house under the guise of teaching you a life lesson like responsibility or something contrived. The only way you profit from this is if the value of the house goes up and you sell it. You get 25% of the proceeds, maybe. If this was an equitable arrangement then they would be paying 75% of the property taxes and a little more for your maintenance efforts.",
"title": ""
},
{
"docid": "79a14eb7f059a16519403dbdf3411f50",
"text": "You are getting totally hosed mate. Assume you live in the house for ten years, can get a normal 30 year mortgage and house prices average at 3% annually You could get a mortgage at 3.8% so your monthly payment would be $560 a month. $60 a month difference over 10 year is $7200 Because you are paying down on a conventional mortgage you would owe 93500 after 10 years. On top of that the house would have appreciated by $47000. You would have to give you parents $35500 of that. So by avoiding a normal loan it's costing you an extra $49000.",
"title": ""
},
{
"docid": "a5458761578243e99a8d1fbc443fda66",
"text": "\"If I understand you situation correctly, then the accepted answer is extremely misleading and incorrect. Your arrangement with your parents is definitely unreasonable. It is definitely not \"\"similar to an interest-only loan\"\". In an interest-only loan, like you can get from a bank, you will loan a sum of money, which you are expected to pay back at a certain time in the future, or when you sell the condo. But you pay back the original sum, not the value of property at selling time. For the access to the money you pay an interest to the bank. The bank gets their profits from the interest. The property only serves as collateral in case you are not able to make your interest payments. Another way to view it, is that your parent bought (a share of) your condo for investment reasons. In that case, they would expect to get their profits from the increase of the value of the property over time. That looks most like your situation. Granted, that is more risky for them, but that is what they choose to sign up for. But in that case it is not reasonable to charge your for interest as well, because that would mean they would get double profits. So how does the $500 monthly payment fit in? If it is interest, then it would work out to a yearly interest of about 5.2%. Where I live, that would nowadays be extremely high even for an interest-only mortgage from a bank. But I don't live in the USA, so don't know whether that is true there. I think in your situation, the $500 can only be seen as rent. Whether that is reasonable for your situation I cannot judge from here. It should be 75% of a reasonable rent for a condo like that. But in that case, your parents should also stand for 75% of the maintenance costs of the property, which you don't mention, and most of the property taxes and insurance fees. In short, no it is not a reasonable arrangement. You would be better of trying to get a morgage from the bank, and buy out your parents with it.\"",
"title": ""
},
{
"docid": "9fd964919242733ee2f1d5ba9a57246a",
"text": "Yes, you are getting shafted. In the end, you will have paid the full price of the condo, but still own only 25% of it. Your parents' stake in the home should decrease as you repay the loan. The way it is now, they're getting 75% of your condo for free!",
"title": ""
},
{
"docid": "4085e15956788a64a0c6728c0e53c75b",
"text": "Talk to your parents, and find out if you are reducing the debt or not. Find buyers, sell the place now and get out the deal. Of course you will have to wait to get a good price on it. Short term you haven't lost that much, but long term you will. Take your 25%, and use it as a down payment on a regular bank mortgage. Lesson learned move on.",
"title": ""
},
{
"docid": "cd883cb6301d3243b1424967e90752c7",
"text": "First, I don't think your parents are ripping you off, but you should get your agreement in writing. The fact that you never own more than 25% doesn't matter. If the condo's value is increasing, you are in fact building equity. Your share of the equity just doesn't increase, but it doesn't decrease either. For example, if the condo is worth $300,000 now, you have $75,000 in equity. Of course if the value is decreasing, so is your equity. If you are paying $500/month in interest (as OP clarified above), and you don't have a written agreement, you are probably unable to claim that payment as mortgage interest if you itemize your deductions on U.S. federal or state tax returns, thus you may be losing out on a legal tax deduction (assuming you earn enough to itemize). They will need to give you each year the proper IRS form for mortgage interest (Form 1098). And, they have to claim the $500/month as interest income on their tax returns. Having a written and signed contract eliminates confusion and potential for heartbreaking misunderstanding the future--and it sounds like you are already experiencing some doubt and confusion now. Your rate seems within market rates for an interest-only loan. Let's say you wanted to buy out your parents' share of the condo right now. Would you pay $115,000 or would you have to get an appraisal to find out what the condo is worth now? If you can't answer that question, you need to get that in writing so that you won't have an argument over it someday. If the condo has appreciated significantly and all you have to pay is the $115,000, then that's a sweet deal for you, because you'd be buying out a much more valuable property for much less than it's worth. If that is the agreement, and the property is appreciating (no guarantee, especially with condos), then you are essentially building equity. If the property is declining in value and you do wish to sell it, then you won't have to pay $115,000; they'll just end up with their 75% share, which will be less than the $115K they invested. Both of you would lose some of your investment, but you would have had all the benefits of living in a nice condo all those years and they wouldn't. They are definitely taking more risk than you are. Second, if you had $40,000 cash saved up, your parents probably raised you with some good financial sense and work ethic, so I'm optimistic they have good intentions for your future. Operate from that frame of mind when you go to ask for a written agreement. Next, read up about Equity Share Agreements. There are many models that will help inform your decisions. But, you should engage a real estate lawyer to help you draw up a fair agreement for both parties. I was in an equity share agreement for my first townhouse. It's a common practice, and it won't cost all that much to get one created. It's worth the money to get it done properly.",
"title": ""
},
{
"docid": "81e342c136e42889bfda2dc7f69297bf",
"text": "No It's not a loan. It's an equity investment. Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate the business (i.e. selling the house). The $500 per month is just business revenue and is paid to your parents as a dividend. Imagine you rent it out to your self and charge a $666.66 rent - you take 25% of that back and give your parents the rest. Like any equity investment, the risk for them is that if the value of the house goes down, they will have to shoulder the loss. And you are right, there is no way to build equity. You already sold that to your parents.",
"title": ""
},
{
"docid": "35730bf047c7562526d1b631eba05dc7",
"text": "Actually if you look at a loan for $115,000 over 30 years at current interest rates you would have a payment of about $500 a month. I would argue your $500 monthly payments are building equity the same way a loan repayment schedule would. Is your agreement in writing? If it is, there's nothing you can do unless they agree. If it's not then write up a contract for a $115k loan that you will pay back over 30 years at $500 a month with the amortization table. That will show how much equity you're building over time. (It's not much the first 10 years!) Note that some states require real estate contract to be in writing or else they are voidable by either party. Whatever you do, get something in writing or you'll probably either end up in court or feeling bitter for the next few decades.",
"title": ""
},
{
"docid": "a725e173efc1c510701db1d48cbcb5ae",
"text": "The time to have looked into this is before you bought the condo, not now. You are presumably an adult. Your parents have apparently made it possible for you to have a roof of your own over your head for what is probably below rental rates (but I don't know your area, so can't say). From their point of view, they may have been doing you a favor, while giving themselves an investment opportunity. What would they be doing with that money otherwise, and at a higher or lower rate of return, and with greater or lesser risk? Where and how would you be living otherwise? More Importantly, if you can't talk to them about this you have bigger problems than money.",
"title": ""
},
{
"docid": "4052d02b9a2b396dffce36705c050f28",
"text": "\"Basically, you have purchased 25% of the condo for $40,000, and your parents bought 75% of the condo for another $115,000. We imagine for a moment that it wasn't you who lived in the condo, but some unrelated person paying rent. You are paying $7,500 a year for tax and fees, plus $6,000 a year, so there is $13,500 leaving your wallet. If $15,500 a year was a reasonable rent, then the tax and fee would be paid out of that, there would be $8,000 left, of which you would get 25% = $2,000. If you were officially \"\"renting\"\" it, you would pay $15,500 a year, and get $2,000 back, again $13,500 leaving your wallet. So you are in exact the same situation financially as you would be if you paid $15,500 rent. Question: Is $15,500 a year or $1,290 a month an appropriate rent for your condo? If a neighbour is renting his condo, is he or she paying $1,290 or more or less? Could you rent the same place for the same money? If $1,290 is the correct rent then you are fine. If the rent should be lower, then you are overpaying. If the rent should be higher, then you are making money. Keep in mind that you will also be winning if rents go up in the future.\"",
"title": ""
},
{
"docid": "e20815108d96a681b1d185affe33267f",
"text": "Are you in the United States? Is there some sort of written agreement that the money your parents paid into the house is a loan that will be paid back? I assume the deed to the home is in your name, and your parents do not have a lien on the property in any way? In the United States provided there is no lien and your parents are not also on the mortgage, that home is 100% yours. Now I would argue you still owe your parents money, but absent some sort of contract it sounds like an interest free loan that you'll pay back at a rate of 500$/month. Your parents could attempt to sue you and if this happens I recommend you find a real estate attorney. It's unlikely that they would win the case since there's no paperwork and even if there was it is unlikely to hold up since it so strongly favors them ( your parents ). Now if your parents are listed on the mortgage or somehow have a lien on the house, you have a bigger issue as they technically own (or at least have an interest in) part of the property and when you decide to sell the house you would have to involve them.",
"title": ""
},
{
"docid": "aaa391cfed23a79f97d9a55fbf024542",
"text": "yes and no its definitely not charitable as they are making money of off you but depending on the outside conditions if you had to pay a mortgage on that condo with only 35k in payments to start off it would more than likely exceed 500 dollars a month however there would always be a point were the mortgage would end and it dosent sound like thats going to be the case with you paying your parents so it depends on how long your going to have that condo and how much mortgage would have been.",
"title": ""
},
{
"docid": "f885cc8f91910d91bfc3cdd536be6efb",
"text": "I would go see a Lawyer no matter what. It's a form of a scam your parents are doing. Make sure it's YOUR name only on the title of the building if it is, then you have a MAJOR case against them. This is a form of Equity scam, in where you aren't really going to make hardly any money. Once you pay them that money towards the loan legally their stake needs to decrease according to what you said. ABSOLUTELY CONSULT A LAWYER!",
"title": ""
},
{
"docid": "ba8df4dad5de33163286a919442bf9d4",
"text": "You're paying 5.2% 'interest' on the $115K (500 * 12 / 115,000) * 100 but the amount you pay back is not $115K but 75% of the property value at sale. Is that right? A mortgage would have cost about half that rate and the balloon payment would have been fixed - you would pay back $115K at maturity plus you could have sold it whenever you liked As Gnasher729 said, if you consider it to be rent then the situation looks different but the point of buying a house is to avoid paying 'useless' rent, build equity and hopefully make a capital gain I'd speak to a lawyer & possibly an accountant (regarding the numbers)",
"title": ""
},
{
"docid": "b4726bb0f4ed88e4b2dd8b8e604bcb76",
"text": "It depends on the selling price, but if we can assume the property will be sold at a profit, they are getting a pretty sweet deal at your expense. They are both getting about 5.2% interest on their money, plus the lion's share of any property appreciation. I would say that fair would be either of:",
"title": ""
},
{
"docid": "c36be7dadeacd4e48979890060af57f0",
"text": "You are being ripped off on several counts. 1) 40k is 26% not 25%. 2) Why should you pay them $500 rent? they bought a share of the property, they should fund it if they intend to keep 75% 3) Why do you need to pay them for the 75%? why dont they need to pay you for the 25%? You are better off getting a loan for the 75% and going solo so you get to buy equity.",
"title": ""
}
] |
[
{
"docid": "29ff7c80b140ea58f487d1568da3d1c7",
"text": "It seems a bit late in the process, no? They moved in, you are elsewhere, etc. Today, the Prime Rate is 3.25%. I don't know enough to suggest whether this is fair to both parties. It's more than you'd earn in the bank, and less than they'd pay for a business loan. My own equity line is currently 2.5%, for what that's worth.",
"title": ""
},
{
"docid": "79d2ca0681ec20663320a4dee527ced1",
"text": "It could be a couple of things besides extra principal: I seem to remember hearing that some (shady?) lenders would just pocket extra payments if you didn't specify where they were headed, but I've also been told that this just isn't true.",
"title": ""
},
{
"docid": "18dff473c799cb389d55803e69937458",
"text": "It sounds as though you were able to purchase your properties through fortuitous circumstances. Not everyone is going to have spare cash lying around, especially considering [ 71% of US college grads have loan debt, averaging ~$30,000.](http://projectonstudentdebt.org/state_by_state-data.php)",
"title": ""
},
{
"docid": "ceec0eac45ca45706137bdbd5fccca9c",
"text": "I believe you may be missing the point here. It appears(and they don't really verify this) that before BofA took over the loan, the homeowners were not using an escrow account. I know this is possible because i had the option of using one or not when i bought my house. So it seems that once BofA took over they automatically created an escrow account and when the normal payments the homeowners were making didn't cover the total monthly balance, they took it out of the payment specifically for the mortgage. So, according to THIS story, its not sensational bullshit. This would be the bank creating an issue. That is, according to the facts that are presented in the article, which may not be the whole story.... Edit- spelling & grammar",
"title": ""
},
{
"docid": "d3befbb389bfa24fb7a4ab586ee947b5",
"text": "\"Real Estate has historically been the most sound investment of all times. Not only does property consistant increase in value (which is what you want every investment to do), it does so at the highest rate with the lowest risk. Most return on investment (like a stock in the market) the potential rate of gain is proportionat to the potential loss. The more secure an investment, the lower the potential gain. But, with Real Estate, property typically doubles in value every 10 years. Our overall R.E. economy is on an upward turn, recovering from a time where values tanked. to jump in now, is probably better than waiting for any amount of time, be it 1 month, or 1 year. You concern about being \"\"tied in\"\" to this investment is a valid concern, however, since the market is in an upward turn, you should be more and more able to turn around and sell it later on. The best thing that you could potentially do would be to invest in a rental property where your cost of investment (your mortgage note) is paid by the renters. However, being a landlord is always a risky business (hence, the higher rate of return, which considering your investment is ultimately zero, the return rate is huge :-) The trick would be to take the reters payments to you and keep it in an account that you use to pay for any repairs, upgrades, or marketing in between when the unit is vacant. But, with your parents losing their house, this may not be possible - unless you take their home and then keep the living arrangments the same as they are now. One possibility to help you get your foot in the door of being a property owner (not necessarily \"\"investor\"\") and help your parents keep their house (if that is what they would like to do) is re-finance with them... if you can't afford the entire mortgage, but they are capable of filling the gap between what you can afford and what their property costs, then you become partnered with them, and when/if their circumstances change, they can always buy you out.\"",
"title": ""
},
{
"docid": "049447e698bc3a74b9f5938b8d8f921e",
"text": "No. As long as you live in the house for 3 years, it's yours to keep. Financing has nothing to do with that.",
"title": ""
},
{
"docid": "e511afc8eba41870dd7e88e079f1499a",
"text": "The most likely reason for this is that the relocation company wants to have a guaranteed sale so as to get a new mortgage in the new location. Understand that the relocation company generally works for a prospective employer. So they are trying to make the process as painless as possible for the homeowner (who is probably getting hired as a professional, either a manager or someone like an engineer or accountant). If the sale is guaranteed to go through regardless of any problems, then it is easy for them to arrange a new mortgage. In fact, they may bridge the gap by securing the initial financing and making the downpayment, then use the payout from the house you are buying to buy out their position. That puts them on the hook for a bunch of money (a downpayment on a house) while they're waiting on the house you're purchasing to close. This does not necessarily mean that there is anything wrong with the house. The relocation company would only know about something wrong if the owner had disclosed it. They don't really care about the house they're selling. Their job is to make the transition easy. With a relocation company, it is more likely that they are simply in a hurry and want to avoid a busted purchase. If this sale fails to go through for any reason, they have to start over. That could make the employment change fall through. This is a variation of a no contingencies sale. Sellers like no contingencies sales because they are easier. Buyers dislike them because their protections are weaker. But some buyers will offer them because they get better prices that way. In particular, house flippers will do this frequently so as to get the house for less money than they might otherwise pay. This is better than a pure no contingencies sale, as they are agreeing to the repairs. This is a reasonable excuse to not proceed with the transaction. If this makes you so uncomfortable that you'd rather continue looking, that's fine. However, it also gives you a bit of leverage, as it means that they are motivated to close this transaction quickly. You can consider any of the following: Or you can do some combination of those or something else entirely that makes you fell more secure. If you do decide to move forward with any version of this provision, get a real estate lawyer to draft the agreement. Also, insist on disclosure of any previous failed sales and the reason for the failure before signing the agreement. The lawyer can make that request in such a way as to get a truthful response. And again, in case you missed it when I said this earlier. You can say no and simply refuse to move forward with such a provision. You may not get the house, but you'll save a certain amount of worry. If you do move forward, you should be sure that you are getting a good deal. They're asking for special provisions; they should bear the cost of that. Either your current deal is already good (and it may be) or you should make them adjust until it is.",
"title": ""
},
{
"docid": "73a1ac0732a8ea4eda8102457e94cdf7",
"text": "\"Your dad may have paid an \"\"opportunity cost\"\" for that outright purchase. If the money he saved had been invested elsewhere, he may have made more money. If he was that well off, then his interest rate should have been the lowest possible. My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright. He didn't though. To do so would have meant cashing in on several investments. I don't know his interest rate but let's say it was 2.5%. If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money. Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks. Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions). The better your credit history, the better the cards/rewards you can get. You can build that credit history better by having these loans and making timely payments.\"",
"title": ""
},
{
"docid": "2c8b73d5026f1e9bb5aa37158a80c2bf",
"text": "\"You are asking about a common, simple practice of holding the mortgage when selling a house you own outright. Typically called seller financing. Say I am 70 and wish to downsize. The money I sell my house for will likely be in the bank at today's awful rates. Now, a buyer likes my house, and has 20% down, but due to some medical bills for his deceased wife, he and his new wife are struggling to get financing. I offer to let them pay me as if I were the bank. We agree on the rate, I have a lien on the house just as a bank would, and my mortgage with them requires the usual fire, theft, vandalism insurance. When I die, my heirs will get the income, or the buyer can pay in full after I'm gone. In response to comment \"\"how do you do that? What's the paperwork?\"\" Fellow member @littleadv has often posted \"\"You need to hire a professional.\"\" Not because the top members here can't offer great, accurate advice. But because a small mistake on the part of the DIY attempt can be far more costly than the relative cost of a pro. In real estate (where I am an agent) you can skip the agent to hook up buyer/seller, but always use the pro for legal work, in this case a real estate attorney. I'd personally avoid the general family lawyer, going with the specialist here.\"",
"title": ""
},
{
"docid": "4224baa1404950971eeb2d436c65719a",
"text": "\"The first issue you'll find is that if you aren't going to immediately live in the house as a primary residence, this property counts as a \"\"second home\"\" or \"\"investment property\"\". You'll generally pay a higher interest rate, have a larger down payment, and qualify for less government-backed programs/incentives/subsidies than you would otherwise. The lending criteria on such properties is always more strict - and generally more costly - than an equivalent primary residence. Lenders won't really care that in 10 years you or your parents plan to move in - you can't be held to that, so they'll generally ignore that plan entirely. On a related note, you should be aware that insurance for the property will also generally cost more, but you'd need to get quotes to determine if that is at all significant in your situation. You'll need to talk with a few potential lenders, but from a first read it sounds like it would be best \"\"storied\"\" like so: you and your parents want to buy a 2nd home or vacation home, which you'll share the use of (vacations, etc, and being converted to a primary residence later). It'll need to be clear what plan to use the property for - if you intend to rent out the home in the interim years then instead make that clear and state it will be an investment home; if it is what you are planning it might make it easier, as expected rent for the property will be considered. Saying you want a mortgage for a home no one will live in for a decade probably isn't a good idea, as a general plan anyway. Either way, this can be called a \"\"joint mortgage\"\". When I was a loan officer we didn't use that term, but it's basically just a mortgage application with multiple people on it, all of whom are combined together to qualify for the loan. Everyone's income, debts, assets, and credit get included, which can work or one person's situation can cause the whole thing to collapse. From your description I think this could work for you, and one option is to set it up where only one of the parents is on the application if the other parent has problematic credit situation. Note that his possibility is often restricted by local law, so it may not be an option for you in your jurisdiction, but worth being aware of. An alternative is you just buy the property and the parents gift you the down payment, and you list them as beneficiaries in will/trust in case something happens to you before they retire, but I don't know if that would make any sense in your situation. This is a single applicant mortgage, and it means only you are considered as buying it, which sometimes is the only option depending on your parents current financial situation. It's usually something you try if the other option doesn't work, but it's a fallback plan. Some lenders will allow guarantors (co-signers in US parlance), but this will vary by lender and locale - often what they actually want is a joint mortgage, not really a guarantor/cosigner. Finally, you'll need to plan for what happens if things don't go as planned, regardless of what happens. What if your income changes, if either of your parents become deceased in advance of retirement, if they get a divorced from each other, or if either/both become ill or disabled and need assisted care? Planning for such unpleasant possibilities (even if they seem crazy and not going to happen in your mind right now) can save you all a tremendous amount of heart ache later on when the unexpected (including things I didn't mention) pops up.\"",
"title": ""
},
{
"docid": "f000b3d3ea91278770cbb20cd4af0ced",
"text": "What you're describing is called timing the market. That is, if you correctly predict when the market will drop, you can sell before the drop, wait for the drop, then buy after the drop has occurred. Sell high, buy low. The fundamental problem with that, though, is: What ends up happening, on average, is you end up slightly behind. There's quite a lot of literature on this; see Betterment's explanation for example. Forbes (click through ad first) also has a detailed piece on the matter. Now, we're not really talking HFT issues here; and there are some structural things that some argue you can take advantage of (restrictions on some organizational investors, for example, similar to a blackjack dealer who has to hit on 16). However, everyone else knows about these too - so it's hard to gain much of an edge. Plenty of people say they can time the market right, and even yourself perhaps you timed a particular drop accurately. This tends to lead to false confidence though; how many drops that you timed badly do you remember? Ultimately, most investors end up slightly down when they attempt to time the market, because of the transaction costs (if you guess two drops, one 'right' and one 'wrong', and they have exactly opposite gains/losses before commissions, you will lose a bit on each due to commission), and because of the overall upward trend in the market (ie, if you picked at random one month a year to be out of the market, you'd lose around 10% annualized gains from doing that; same applies here). All of that aside, there is one major caveat: risk tolerance. If you are highly risk tolerant, say a 30 year old investing your 401(k), then you should stay in no matter what. If you're not - say you're 58 and retiring in a few years - then knowledge that there's a higher risk time period coming up might suggest moving to a less risky portfolio, even at the known cost of some gains.",
"title": ""
},
{
"docid": "972fa7231ce44ecafa6849051bacb000",
"text": "First--congratulations! I certainly wish I could create something worth buying for $1.4 million. In addition to what @duffbeer703 recommended, consider putting some of the money in Treasury Inflation-Protected Securities (TIPS). I second the advice on staying away from annuities as well. @littleadv is right about certified financial planners. A good one will put those funds in a mix of investments that minimize your potential tax exposure. They will also look at whether you're properly insured. Research what is FDIC-insured (and what isn't) here. Since you're still making a six-figure income in your salaried job, be sure not to neglect things like contributing to your 401(k)--especially if it's a matching one. At your salary level, I think you're still eligible to contribute to a Roth IRA (taxable income goes in, so withdrawals are tax-free). A good adviser will know which options are best.",
"title": ""
}
] |
fiqa
|
6c526b004a7393dd0a8075b3ee90243d
|
What should I consider when factoring fluctuating exchange rates into risk/return of overseas stock trading?
|
[
{
"docid": "7e2700c8f97122b868a4a0ebfbcc9257",
"text": "Which of these two factors is likely to be more significant? There is long term trend that puts one favourable with other. .... I realise that I could just as easily have lost 5% on the LSE and made 5% back on the currency, leaving me with my original investment minus various fees; or to have lost 5% on both. Yes that is true. Either of the 3 scenarios are possible. Those issues aside, am I looking at this in remotely the right way? Yes. You are looking at it the right way. Generally one invests in Foreign markets for;",
"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": "3200217e7939b7c9eb0a82e4a1124feb",
"text": "Here is the technical guidance from the accounting standard FRS 23 (IAS 21) 'The Effects of Changes in Foreign Exchange Rates' which states: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise. An example: You agree to sell a product for $100 to a customer at a certain date. You would record the sale of this product on that date at $100, converted at the current FX rate (lets say £1:$1 for ease) in your profit loss account as £100. The customer then pays you several $100 days later, at which point the FX rate has fallen to £0.5:$1 and you only receive £50. You would then have a realised loss of £50 due to exchange differences, and this is charged to your profit and loss account as a cost. Due to double entry bookkeeping the profit/loss on the FX difference is needed to balance the journals of the transaction. I think there is a little confusion as to what constitutes a (realised) profit/loss on exchange difference. In the example in your question, you are not making any loss when you convert the bitcoins to dollars, as there is no difference in the exchange rate between the point you convert them. Therefore you have not made either a profit or a loss. In terms of how this effects your tax position; you only pay tax on your profit and loss account. The example I give above is an instance where an exchange difference is recorded to the P&L. In your example, the value of your cash held is reflected in your balance sheet, as an asset, whatever its value is at the balance sheet date. Unfortunately, the value of the asset can rise/fall, but the only time where you will record a profit/loss on this (and therefore have an impact on tax) is if you sell the asset.",
"title": ""
},
{
"docid": "6ee5094a258ae0377d39f8cdcfb21087",
"text": "\"Tricky question, basically, you just want to first spread risk around, and then seek abnormal returns after you understand what portions of your portfolio are influenced by (and understand your own investment goals) For a relevant timely example: the German stock exchange and it's equity prices are reaching all time highs, while the Greek asset prices are reaching all time lows. If you just invested in \"\"Europe\"\" your portfolio will experience only the mean, while suffering from exchange rate changes. You will likely lose because you arbitrarily invested internationally, for the sake of being international, instead of targeting a key country or sector. Just boils down to more research for you, if you want to be a passive investor you will get passive investor returns. I'm not personally familiar with funds that are good at taking care of this part for you, in the international markets.\"",
"title": ""
},
{
"docid": "e0f0da2c0e5a4bfa04bda19efad7eb01",
"text": "There are some ETF's on the Indian market that invest in broad indexes in other countries Here's an article discussing this Be aware that such investments carry an additional risk you do not have when investing in your local market, which is 'currency risk' If for example you invest in a ETF that represents the US S&P500 index, and the US dollar weakens relative to the indian rupee, you could see the value if your investment in the US market go down, even if the index itself is 'up' (but not as much as the change in currency values). A lot of investment advisors recommend that you have at least 75% of your investments in things which are denominated in your local currency (well technically, the same currency as your liabilities), and no more than 25% invested internationally. In large part the reason for this advice is to reduce your exposure to currency risk.",
"title": ""
},
{
"docid": "90b990119812669ab920916a9ac08514",
"text": "\"When you invest in an S&P500 index fund that is priced in USD, the only major risk you bear is the risk associated with the equity that comprises the index, since both the equities and the index fund are priced in USD. The fund in your question, however, is priced in EUR. For a fund like this to match the performance of the S&P500, which is priced in USD, as closely as possible, it needs to hedge against fluctuations in the EUR/USD exchange rate. If the fund simply converted EUR to USD then invested in an S&P500 index fund priced in USD, the EUR-priced fund may fail to match the USD-priced fund because of exchange rate fluctuations. Here is a simple example demonstrating why hedging is necessary. I assumed the current value of the USD-priced S&P500 index fund is 1,600 USD/share. The exchange rate is 1.3 USD/EUR. If you purchase one share of this index using EUR, you would pay 1230.77 EUR/share: If the S&P500 increases 10% to 1760 USD/share and the exchange rate remains unchanged, the value of the your investment in the EUR fund also increases by 10% (both sides of the equation are multiplied by 1.1): However, the currency risk comes into play when the EUR/USD exchange rate changes. Take the 10% increase in the price of the USD index occurring in tandem with an appreciation of the EUR to 1.4 USD/EUR: Although the USD-priced index gained 10%, the appreciation of the EUR means that the EUR value of your investment is almost unchanged from the first equation. For investments priced in EUR that invest in securities priced in USD, the presence of this additional currency risk mandates the use of a hedge if the indexes are going to track. The fund you linked to uses swap contracts, which I discuss in detail below, to hedge against fluctuations in the EUR/USD exchange rate. Since these derivatives aren't free, the cost of the hedge is included in the expenses of the fund and may result in differences between the S&P500 Index and the S&P 500 Euro Hedged Index. Also, it's important to realize that any time you invest in securities that are priced in a different currency than your own, you take on currency risk whether or not the investments aim to track indexes. This holds true even for securities that trade on an exchange in your local currency, like ADR's or GDR's. I wrote an answer that goes through a simple example in a similar fashion to the one above in that context, so you can read that for more information on currency risk in that context. There are several ways to investors, be they institutional or individual, can hedge against currency risk. iShares offers an ETF that tracks the S&P500 Euro Hedged Index and uses a over-the-counter currency swap contract called a month forward FX contract to hedge against the associated currency risk. In these contracts, two parties agree to swap some amount of one currency for another amount of another currency, at some time in the future. This allows both parties to effectively lock in an exchange rate for a given time period (a month in the case of the iShares ETF) and therefore protect themselves against exchange rate fluctuations in that period. There are other forms of currency swaps, equity swaps, etc. that could be used to hedge against currency risk. In general, two parties agree to swap one quantity, like a EUR cash flow, payments of a fixed interest rate, etc. for another quantity, like a USD cash flow, payments based on a floating interest rate, etc. In many cases these are over-the-counter transactions, there isn't necessarily a standardized definition. For example, if the European manager of a fund that tracks the S&P500 Euro Hedged Index is holding euros and wants to lock in an effective exchange rate of 1.4 USD/EUR (above the current exchange rate), he may find another party that is holding USD and wants to lock in the respective exchange rate of 0.71 EUR/USD. The other party could be an American fund manager that manages a USD-price fund that tracks the FTSE. By swapping USD and EUR, both parties can, at a price, lock in their desired exchange rates. I want to clear up something else in your question too. It's not correct that the \"\"S&P 500 is completely unrelated to the Euro.\"\" Far from it. There are many cases in which the EUR/USD exchange rate and the level of the S&P500 index could be related. For example: Troublesome economic news in Europe could cause the euro to depreciate against the dollar as European investors flee to safety, e.g. invest in Treasury bills. However, this economic news could also cause US investors to feel that the global economy won't recover as soon as hoped, which could affect the S&P500. If the euro appreciated against the dollar, for whatever reason, this could increase profits for US businesses that earn part of their profits in Europe. If a US company earns 1 million EUR and the exchange rate is 1.3 USD/EUR, the company earns 1.3 million USD. If the euro appreciates against the dollar to 1.4 USD/EUR in the next quarter and the company still earns 1 million EUR, they now earn 1.4 million USD. Even without additional sales, the US company earned a higher USD profit, which is reflected on their financial statements and could increase their share price (thus affecting the S&P500). Combining examples 1 and 2, if a US company earns some of its profits in Europe and a recession hits in the EU, two things could happen simultaneously. A) The company's sales decline as European consumers scale back their spending, and B) the euro depreciates against the dollar as European investors sell euros and invest in safer securities denominated in other currencies (USD or not). The company suffers a loss in profits both from decreased sales and the depreciation of the EUR. There are many more factors that could lead to correlation between the euro and the S&P500, or more generally, the European and American economies. The balance of trade, investor and consumer confidence, exposure of banks in one region to sovereign debt in another, the spread of asset/mortgage-backed securities from US financial firms to European banks, companies, municipalities, etc. all play a role. One example of this last point comes from this article, which includes an interesting line: Among the victims of America’s subprime crisis are eight municipalities in Norway, which lost a total of $125 million through subprime mortgage-related investments. Long story short, these municipalities had mortgage-backed securities in their investment portfolios that were derived from, far down the line, subprime mortgages on US homes. I don't know the specific cities, but it really demonstrates how interconnected the world's economies are when an American family's payment on their subprime mortgage in, say, Chicago, can end up backing a derivative investment in the investment portfolio of, say, Hammerfest, Norway.\"",
"title": ""
},
{
"docid": "5d0b360de7d5745d006ae345e6072492",
"text": "The value of the asset doesn't change just because of the exchange rate change. If a thing (valued in USD) costs USD $1 and USD $1 = CAN $1 (so the thing is also valued CAN $1) today and tomorrow CAN $1 worth USD $0.5 - the thing will continue being worth USD $1. If the thing is valued in CAN $, after the exchange rate change, the thing will be worth USD $2, but will still be valued CAN $1. What you're talking about is price quotes, not value. Price quotes will very quickly reach the value, since any deviation will be used by the traders to make profits on arbitrage. And algo-traders will make it happen much quicker than you can even notice the arbitrage existence.",
"title": ""
},
{
"docid": "9c7b4c73d0cfa05f6db8ec14315332e2",
"text": "Suppose you're a European Company, selling say a software product to a US company. As much as you might want the US company to pay you in Euros they might insist (or you'll lose the contract) that you agree pricing in USD. The software is licensed on a yearly recurring amount, say 100K USD per year payable on the 1st January every year. In this example, you know that on the 1st Jan that 100K USD will arrive in your USD bank account. You will want to convert that to Euros and to remove uncertainty from your business you might take out an FX Forward today to remove your currency risk. If in the next 9 months the dollar strengthens against the Euro then notionally you'll have lost out by taking out the forward. Similarly, you've notionally gained if the USD weakens against the EURO. The forward gives you the certainty you need to plan your business.",
"title": ""
},
{
"docid": "83d9ae6ad60870a09c431cbe4c9498a1",
"text": "\"I suggest that you're really asking questions surrounding three topics: (1) what allocation hedges your risks but also allows for upside? (2) How do you time your purchases so you're not getting hammered by exchange rates? (3) How do you know if you're doing ok? Allocations Your questions concerning allocation are really \"\"what if\"\" questions, as DoubleVu points out. Only you can really answer those. I would suggest building an excel sheet and thinking through the scenarios of at least 3 what-ifs. A) What if you keep your current allocations and anything in local currency gets cut in half in value? Could you live with that? B) What if you allocate more to \"\"stable economies\"\" and your economy recovers... so stable items grow at 5% per year, but your local investments grow 50% for the next 3 years? Could you live with that missed opportunity? C) What if you allocate more to \"\"stable economies\"\" and they grow at 5%... while SA continues a gradual slide? Remember that slow or flat growth in a stable currency is the same as higher returns in a declining currency. I would trust your own insights as a local, but I would recommend thinking more about how this plays out for your current investments. Timing You bring up concerns about \"\"timing\"\" of buying expensive foreign currencies... you can't time the market. If you knew how to do this with forex trading, you wouldn't be here :). Read up on dollar cost averaging. For most people, and most companies with international exposure, it may not beat the market in the short term, but it nets out positive in the long term. Rebalancing For you there will be two questions to ask regularly: is the allocation still correct as political and international issues play out? Have any returns or losses thrown your planned allocation out of alignment? Put your investment goals in writing, and revisit it at least once a year to evaluate whether any adjustments would be wise to make. And of course, I am not a registered financial professional, especially not in SA, so I obviously recommend taking what I say with a large dose of salt.\"",
"title": ""
},
{
"docid": "4339890815d1bd9b8804bd8772f1081f",
"text": "Although not technically an answer to your question, I want to address why this is generally a bad idea. People normally put money into a savings account so that they can have quick access to it if needed, and because it is safe. You lose both of these advantages with a foreign account. You are looking at extra time and fees to receive access to the money in those australian accounts. And, more importantly, you are taking on substantial FX risk. Since 2000 the AUD exchange rate has gone from a low of 0.4845 to a high of 1.0972. Those swings are almost as large as the swings of the S&P. But, you're only getting an average return of 3.5%, instead of the average return people expect with stocks of 10%. A better idea would be to talk to a financial adviser who can help you find an investment that meets your risk tolerance, but gives you a better return than your savings account. On a final thought, the exception to this would be if you plan on spending significant time in Australia. Having money in a savings account there would actually allow you to mitigate some of your FX risk by allowing you to decide whether to convert USD when you are travelling, or using the money that you already have in your foreign account.",
"title": ""
},
{
"docid": "19e63ae5bc64b1b6708549f389a6c615",
"text": "International exchange rates are arbitraged. If I exchange A for B for C and then back to A again, I'll end up with the same amount ex trade fees. Assume this isn't the case. Clearly if I'd gain, someone else loses and I'd make millions by rapidly exchanging. Now assume that I'd lose money on that route. That must be because the reverse route, A->C->B->A gains money. (Again, assuming no fees) So in this case you'd just look at fees. (And as Ganesh points out, that may include future fees)",
"title": ""
},
{
"docid": "eda543db876b5d150a730688db867bef",
"text": "This is called currency speculation, and it's one of the more risky forms of investing. Unless you have a crystal ball that tells you the Euro will move up (or down) relative to the Dollar, it's purely speculation, even if it seems like it's on an upswing. You have to remember that the people who are speculating (professionally) on currency are the reason that the amount changed, and it's because something caused them to believe the correct value is the current one - not another value in one direction or the other. This is not to say people don't make money on currency speculation; but unless you're a professional investor, who has a very good understanding of why currencies move one way or the other, or know someone who is (and gives free advice!), it's not a particularly good idea to engage in it - while stock trading is typically win-win, currency speculation is always zero-sum. That said, you could hedge your funds at this point (or any other) by keeping some money in both accounts - that is often safer than having all in one or the other, as you will tend to break even when one falls against the other, and not suffer significant losses if one or the other has a major downturn.",
"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": "ac0ce3b2e0c026f80b68a29b373f2481",
"text": "Any time you are optimizing a portfolio, the right horizon to use for computing the statistics you will use for optimization (expected return, covariance, etc.) will be the same as your rebalance/trading frequency. If you expect your trading strategy to trade once a day, you should use daily data for optimization. Ditto for monthly or quarterly. If at all possible you should use statistics across the board that are computed at the same frequency as your trading. Regarding currency pricing, I see no reason you can't take the reported prices and convert them to whatever currency you want using that day's foriegn exchange rate. Foreign exchange rates are available for free at the Fed and elsewhere. Converting prices from one currency to another is not rocket science. Since you are contemplating putting actual money behind this, note that using data to compute statistics is less reliable for lower statistical moments. The mean (expected return) is the first moment, so using historical returns is extremely unreliable at predicting future returns. The variances and covariances are second moments, they are better. Skewness and kurtosis, yet better. The fact that the expected return can't reliably be estimated from past returns is the major downfall of the Markowitz method (resulting portfolios are often very crazy and will depend critically on the data period you use to set them up). There are approaches to fixing this, such as Black-Litterman's (1992) method, but they get complicated fast.",
"title": ""
},
{
"docid": "f8a85fd74968db82a68d08b94722c7d6",
"text": "There are short-term and long term aspects. In the long term, if you live and work in Australia and plan to continue doing both indefinitely, you might as well move all your cash investments there. There would be no point bearing the exchange rate risks. It may be worth keeping the account open with just enough credit to stop it being shut down. There is no point needing to (think about) filing foreign tax returns just because you have an account earning a small amount of interest. In the short term, I think the more important question is practicality rather than exchange rate risk. You want to have enough cash in both countries that if you suddenly have to pay say an apartment deposit or a bill, you won't be caught short. So I would leave at least a few thousands dollars in a US bank account until at least a couple of months after the move, when I was sure everything was settled. Good luck.",
"title": ""
},
{
"docid": "f37da9c64177f790479271443715f132",
"text": "\"It is not clear to me why you believe you can lose more than you put in, without margin. It is difficult and the chances are virtually nil. However, I can think of a few ways. Lets say you are an American, and deposit $1000. Now lets say you think the Indian rupee is going to devalue relative to the Euro. So that means you want to go long EURINR. Going long EURINR, without margin, is still different than converting your INRs into Euros. Assume USDINR = 72. Whats actually happening is your broker is taking out a 72,000 rupee loan, and using it to buy Euros, with your $1000 acting as collateral. You will need to pay interest on this loan (about 7% annualized if I remember correctly). You will earn interest on the Euros you hold in the meantime (for simplicity lets say its 1%). The difference between interest you earn and interest you pay is called the cost of carry, or commonly referred to as 'swap'. So your annualized cost of carry is $60 ($10-$70). Lets say you have this position open for 1 year, and the exchange rate doesnt move. Your total equity is $940. Now lets say an asteroid destroys all of Europe, your Euros instantly become worthless. You now must repay the rupee loan to close the trade, the cost of which is $1000 but you only have $940 in your account. You have lost more than you deposited, using \"\"no margin\"\". I would actually say that all buying and selling of currency pairs is inherently using margin, because they all involve a short sale. I do note that depending on your broker, you can convert to another currency. But thats not what forex traders do most of the time.\"",
"title": ""
}
] |
fiqa
|
580b3834e8189e555e2b97e4d99e0208
|
How Do Scammers / Money Launderers Profit From Loans To Victims
|
[
{
"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": "c35b1396f4e0fd04e0bd3fc58ed4ad64",
"text": "If they have your account numbers (which are necessary for direct deposits) they could possibly initiate ACH withdrawals from your accounts too (requires some setup but they may have accomplices). Note that even if you didn't have money there, depending on the local bank rules you may be still on the hook for overdrafts they create, at least by default. You may be able to prove later that this was fraud but the burden of proof will be on you, and in the meantime they might be gone with the money. They could use your documents to either establish other accounts in your name (identity theft) or take over your accounts (e.g. by contacting customer service of the bank and claiming to be you, and presenting the documents you sent as a proof), request credits under your identity (possibly using the money on the account as a collateral since the bank may not know where the money is from), etc. This is even easier given you will give them all the documents and information needed for a loan, your signature, etc. And the fact that they ask you to send documents to a specific address doesn't mean they could be found at that address when the problems start - it may be rented short-term, belong to either knowing or unknowing accomplice, be a forwarding service, etc. Could be money laundering of course too. That's just what comes to mind after a short while thinking about it.",
"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": "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": "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": "5f504ec4770251af8ae3520601a718ca",
"text": "To short a stock you actually borrow shares and sell them. The shorter gets the money from selling immediately, and pays interest for the share he borrows until he covers the short. The amount of interest varies depending on the stock. It's typically under 1% a year for large cap stocks, but can be 20% or more for small, illiquid, or heavily shorted stocks. In this scam only a few people own the shares that are lent to shorters, so they essentially have a monopoly and can set really high borrow costs. The shorter probably assumes that a pump-and-dump will crash quickly, so wouldn't mind paying a high borrow cost.",
"title": ""
},
{
"docid": "e5c96d25cabfb16b086f42e029b0ba1a",
"text": "\"Not entirely. For a creditor to go after the \"\"parent company\"\" in one of these cases requires the courts to be willing to \"\"pierce the corporate veil\"\" (in legal parlance). Typically this is only done if the parent company set up the wholly-owned-subsidiary in order to perpetrate a fraud. In this case, the subsidiary has a totally legitimate function - to sequester risk. While you're right that the parent company may have to offer some form of credit guarantees to get the subsidiary to get a loan, often those guarantees still don't create nearly as much exposure for the parent company.\"",
"title": ""
},
{
"docid": "2168ffb1dea037ef5b248f1c0643ab7f",
"text": "Unless I am missing something subtle, nothing happens to the buyer. Suppose Alice wants to sell short 1000 shares of XYZ at $5. She borrows the shares from Bob and sells them to Charlie. Now Charlie actually owns the shares; they are in his account. If the stock later goes up to $10, Charlie is happy; he could sell the shares he now owns, and make a $5000 profit. Alice still has the $5000 she received from her short sale, and she owes 1000 shares to Bob. So she's effectively $5000 in debt. If Bob calls in the loan, she'll have to try to come up with another $5000 to buy 1000 shares at $10 on the open market. If she can't, well, that's between her and Bob. Maybe she goes bankrupt and Bob has to write off a loss. But none of this has any effect on Charlie! He got the shares he paid for, and nobody's going to take them away from him. He has no reason to care where they came from, or what sort of complicated transactions brought them into Alice's possession. She had them, and she sold them to him, and that's the end of the story as far as he's concerned.",
"title": ""
},
{
"docid": "55424864462f469b1beffbe1d39f8ba0",
"text": "\"It all comes down to how the loan itself is structured and reported - the exact details of how they run the loan paperwork, and how/if they report the activity on the loan to one of the credit bureaus (and which one they report to). It can go generally one of three ways: A) The loan company reports the status to a credit reporting agency on behalf of both the initiating borrower and the cosigner. In this scenario, both individuals get a new account on their credit report. Initially this will generally drop related credit scores somewhat (it's a \"\"hard pull\"\", new account with zero history, and increased debt), but over time this can have a positive effect on both people's credit rating. This is the typical scenario one might logically expect to be the norm, and it effects both parties credit just as if they were a sole signor for the loan. And as always, if the loan is not paid properly it will negatively effect both people's credit, and the owner of the loan can choose to come after either or both parties in whatever order they want. B) The loan company just runs the loan with one person, and only reports to a credit agency on one of you (probably the co-signor), leaving the other as just a backup. If you aren't paying close attention they may even arrange it where the initial party wanting to take the loan isn't even on most of the paperwork. This let the person trying to run the loan get something accepted that might not have been otherwise, or save some time, or was just an error. In this case it will have no effect on Person A's credit. We've had a number of question like this, and this isn't really a rare occurrence. Never assume people selling you things are necessarily accurate or honest - always verify. C) The loan company just doesn't report the loan at all to a credit agency, or does so incorrectly. They are under no obligation to report to credit agencies, it's strictly up to them. If you don't pay then they can report it as something \"\"in collections\"\". This isn't the typical way of doing business for most places, but some businesses still operate this way, including some places that advertise how doing business with them (paying them grossly inflated interest rates) will \"\"help build your credit\"\". Most advertising fraud goes unpunished. Note: Under all of the above scenarios, the loan can only effect the credit rating attached to the bureau it is reported to. If the loan is reported to Equifax, it will not help you with a TransUnion or Experian rating at all. Some loans report to multiple credit bureaus, but many don't bother, and credit bureaus don't automatically copy each other. It's important to remember that there isn't so much a thing as a singular \"\"consumer credit rating\"\", as there are \"\"consumer credit ratings\"\" - 3 of them, for most purposes, and they can vary widely depending on your reported histories. Also, if it is only a short-term loan of 3-6 months then it is unlikely to have a powerful impact on anyone's credit rating. Credit scores are formulas calibrated to care about long-term behavior, where 3 years of perfect credit history is still considered a short period of time and you will be deemed to have a significant risk of default without more data. So don't expect to qualify for a prime-rate mortgage because of a car loan that was paid off in a few months; it might be enough to give you a score if you don't have one, but don't expect much more. As always, please remember that taking out a loan just to improve credit is almost always a terrible idea. Unless you have a very specific reason with a carefully researched and well-vetted plan that means that it's very important you build credit in this specific way, you should generally focus on establishing credit in ways that don't actually cost you any money at all. Look for no fee credit cards that you pay in full each month, even if you have to start with credit-building secured card plans, and switch to cash-value no-fee rewards cards for a 1-3% if you operate your financial life in a way that this doesn't end up manipulating your purchasing decisions to cost you money. Words to the wise: \"\"Don't let the credit score tail wag the personal financial dog!\"\"\"",
"title": ""
},
{
"docid": "3fdd980e522d31d4f953d8107555fd7a",
"text": "\"Some of it is very simple but almost all of it is very non-intuitive. Imagine that Donald Trump owns a lot of property that is valued at $1bn. So he puts that up as collateral to buy some gold worth $2bn dollars. A little while later the banks discover that the properties are only worth $100mm. In this case $900mm has suddenly disappeared and moreover the banks are in deep shit because the Donald owes them $2bn and has posted collateral worth $100mm. When they try to rough up Donald he tells them that instead if they go along with his ponzi scheme they might be able to sell his new $2bn property to someone else for $4bn, this way the banks will get their money bank and Donald will make a nice little profit. So the banks lend him some more money. This scheme only works until people start refusing to buy these properties at Donald's prices. This is a nutshell what has happened. Property prices were much higher than they should have been and Banks had derivatives which weren't worth as much as they claimed. When the market/people wised up to this fact the prices came crashing down and money \"\"disappeared\"\".\"",
"title": ""
},
{
"docid": "f4aa10b157076a2d41f8f8ec9de3d2c1",
"text": "\"The \"\"just accounting\"\" is how money market works these days. Lets look at this simplified example: The bank creates an asset - loan in the amount of X, secured by a house worth 1.25*X (assuming 20% downpayment). The bank also creates a liability in the amount of X to its depositors, because the money lent was the money first deposited into the bank by someone else (or borrowed by the bank from the Federal Reserve(*), which is, again, a liability). That liability is not secured. Now the person defaults on the loan in the amount of X, but at that time the prices dropped, and the house is now worth 0.8*X. The bank forecloses, sells the house, recovers 80% of the loan, and removes the asset of the loan, creating an asset of cash in the value of 0.8*X. But the liability in the amount of X didn't go anywhere. Bank still has to repay the X amount of money back to its depositors/Feds. The difference? 20% of X in our scenario - that's the bank's loss. (*) Federal Reserve is the US equivalent of a central bank.\"",
"title": ""
},
{
"docid": "27f203d4fad8c85d70ab23f49029d03c",
"text": "This is either laundering money or laundering non-money. All the other answers point out how a cheque or bank transfer will take days to actually clear. That is a red herring! There are lots of ways to illegally transfer real money out of existing accounts. Stolen cheque books, stolen banking details (partly in connection with stolen smartphones and credit cards) and cards, money transfers from other people duped in a similar manner as you are: it is much easier to steal money than invent it, and it takes quite longer until stolen rather than invented money will blow up at the banks. All of those payments will likely properly clear but not leave you in actual legal possession of money. People will notice the missing money and notify police and banks and you will be on the hook for paying back all of it. Cheques and transfers from non-existing accounts, in contrast, tend to blow up very fast and thus are less viable for this kind of scam as the time window for operating the scam is rather small. Whether or not the cheque actually clears is about as relevant of whether or not the Rolls Royce you are buying for $500 because the owner has an ingrown toe nail and cannot press down the accelerator any more has four wheels. Better hope for the Rolls to be imaginary because then you'll only be out of $500 and that's the end of it. If it is real, your trouble is only starting.",
"title": ""
},
{
"docid": "13579414bd19097f500ef210e2dfd057",
"text": "\"(Disclosure - PeerStreet was at FinCon, a financial blogger conference I attended last month. I had the chance to briefly meet a couple people from this company. Also, I recognize a number of the names of their financial backers. This doesn't guarantee anything, of course, except the people behind the scenes are no slackers.) The same way Prosper and Lending Club have created a market for personal loans, this is a company that offers real estate loans. The \"\"too good to be true\"\" aspect is what I'll try to address. I've disclosed in other answers that I have my Real Estate license. Earlier this year, I sold a house that was financed with a \"\"Hard Money\"\" loan. Not a bank, but a group of investors. They charged the buyer 10%. Let me state - I represented the seller, and when I found out the terms of the loan, it would have been a breach of my own moral and legal responsibility to her to do anything to kill the deal. I felt sick for days after that sale. There are many people with little credit history who are hard workers and have saved their 20% down. For PeerStreet, 25%. The same way there's a business, local to my area, that offered a 10% loan, PeerStreet is doing something similar but in a 'crowd sourced' way. It seems to me that since they show the duration as only 6-24 months, the buyer typically manages to refinance during that time. I'm guessing that these may be people who are selling their house, but have bad timing, i.e. they need to first close on the sale to qualify to buy the new home. Or simply need the time to get their regular loan approved. (As a final side note - I recalled the 10% story in a social setting, and more than one person responded they'd have been happy to invest their money at 6%. I could have saved the buyer 4% and gotten someone else nearly 6% more than they get on their cash.)\"",
"title": ""
},
{
"docid": "842bd5665f06182cd5f9685bd0f398cb",
"text": "\"They're taking advantage of float. Like so many things in the financial world today, this practice is a (strictly legal) fraud. When you make the transaction, the money is available immediately, for reasons that should be intuitively obvious to anyone who's ever used PayPal. It doesn't take 3 minutes for the broker to get that money, let alone 3 days. But if they can hold on to that money instead of turning it over to you, they can make money from it for themselves, putting money that rightfully belongs to you to work for them instead, earning interest on short-term loans, money market accounts, etc. The SEC mandates that this money must be turned over to you within 3 days so it should not surprise anyone that that's exactly how long the \"\"we have to wait for it to clear\"\" scam runs for. Even if it doesn't seem like very much money per transaction, for a large brokerage with hundreds of thousands of clients, all the little bits add up very quickly. This is why they feel no need to compete by offering better service: offering poor service is making them a lot of money that they would lose by offering better service.\"",
"title": ""
},
{
"docid": "c2ecf361875bddae8e68e43c43660b57",
"text": "\"Because the value of distressed assets is close to what they are selling for. When you lend money, you know there is a risk of default. You gamble on that risk, and you take the responsibility if you lose because the person taking the money can't pay. People who buy distressed debt on the idea that they can make more money off of it are only able to do that in two ways: not giving a shit what the impacts of wringing more money out create, figuring out a legal way to make someone else pay for it through ripple blackmail effects (other people also are impacted when a country can't function.) If you back Klarman, you may say the point is you are \"\"teaching\"\" Puerto Rico and everyone else that they shouldn't take on debt they can't afford. But when has that ever worked? The pensioners who are bankrupt are the ones actually getting the pain of the lesson. Another lesson could be to investors not to lend to people who can't pay them back. The people lending the money are the ones who now don't have it because they made a bad choice. Seth Klarman could also learn a lesson about taking on distressed debt being a non-lucrative pastime. Or we can all learn a lesson that taking on distressed debt is very lucrative. A big change America implemented was getting rid of debtor's prisons. This looks a lot like getting excited about debtor's prison to me. EDIT: I should note I am thinking of the Algerian version of making a ton of money off of distressed national debt. As opposed to making a bit more money off of distressed debt because you were willing to let the collapse figure itself out. Though I'm not so sure about that either.\"",
"title": ""
},
{
"docid": "6b34f6fbabd9543cde3cfab87b7ebd92",
"text": "I know this is broad, but this isn't a scam -- it's a workshop/educational thing about teaching people of investing in the real estate market, and how to profit The scam is that the free or cheap class doesn't give you enough info to make money; so they sell you a more advanced and expensive class that gets you almost enough info; but the goal of the 2nd class is to get you to pay for the specialized seminar and coaching sessions that either fail to materialize or are so basic they aren't worth the money.",
"title": ""
},
{
"docid": "779d5046f25234a651f2736f371e4849",
"text": "For people who are good with money (presumably), Kiva.org gives your money to such people who apply for loans through social service organizations in various countries (I believe this is how it's done). The people state what they will use the money for. It can be as simple as 'buying provisions for food truck business' or 'replacing wheels on tractor.' Then they pay the money back and you (who donated x number of dollars) use that repaid money to make another loan.",
"title": ""
}
] |
fiqa
|
95ee4a72d991ee9fe6d60c216d6b42a3
|
Health Insurance and Disability Question
|
[
{
"docid": "bcb9eaeafb6185e76ad564d565950eaf",
"text": "Sorry to hear about your spouse's health issues. May he have a speedy and, as far as possible, full recovery. The Patient Protectection and Affordable Care Act (PPACA, aka Obamacare) is now the law of the land. Among its many provisions are that insurers may no longer deny coverage for pre-existing conditions, they may not put lifetime caps on benefits, and they may not charge different premiums based on any criteria except age cohort and geographic area (i.e. rates may be higher for 50 year olds than 30 year olds, but sick and healthy 50 year olds living in the same area pay the same). If he gets government health coverage because he's on disability, this may not matter. On the other hand, you might find it better to put him on your employer's policy, because you like the coverage better, the employer covers part of the dependent premium, or some other reason. In any case, they can't discriminate against him or you based on his condition. ETA: Rates may vary by geography as well as age.",
"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": "691ebc769be4882276be7460d9e1cd52",
"text": "Checkout the worksheet on page 20 of Pub 535. Also the text starting in the last half of the third column of page 18 onward. https://www.irs.gov/pub/irs-pdf/p535.pdf The fact that you get a W-2 is irrelevant as far as I can see. Your self-employment business has to meet some criteria (such as being profitable) and the plan needs to be provided through your own business (although if you're sole proprietor filing on Schedule C, it looks like having it in your own name does the trick). Check the publication for all of the rules. There is this exception that would prevent many people with full-time jobs on W-2 from taking the deduction: Other coverage. You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you did not actually participate. In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2014, do not use amounts paid for coverage for that month to figure the deduction. (Pages 20-21). Sounds like in your case, though, this doesn't apply. (Although your original question doesn't mention a spouse, which might be relevant to the rule if you have one and he/she works.) The publication should help. If still in doubt, you'll probably need a CPA or other professional to assess your individual situation.",
"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": ""
},
{
"docid": "3ff7148e192db7fe47dfe1f25883aeec",
"text": "Another source of insurance can be through the working spouses employment. Some companies do provide free or low cost coverage for spouses without a need for a physical exam. The risk is that it might not be available at the amount you want, and that if the main spouse switches companies it might not be available with the new employer. A plus is that if there is a cost it is only a one year commitment. Term insurance is the way to go. It is simple to purchase, and not complex to understand. Sizing is key. You may need to provide some level of coverage until the youngest child is in high school or college. Of course the youngest child might not have been born yet. The longer the term, the higher the cost to account for the inflation during the period of the insurance. If the term expires, but the need still exists, it is possible to get another policy but the cost of the new term policy will be higher because the insured is older. If there are special needs children involved the amount and length may need to be increased due to the increased costs and duration of need. Don't forget to periodically review the insurance situation to make sure your need haven't changed so much a new level of insurance would be needed.",
"title": ""
},
{
"docid": "84df1ff5a295b2ef66de394faab2a96a",
"text": "\"I was in the health insurance game for 10 years and never heard of this until the Affordable Care Act came about. To my knowledge, there is no rule or regulation prohibiting it, however trying to get an insurer underwrite that risk is extremely unlikely. It's the same reason why you don't see AAA offering health insurance. There isn't a contractual relationship between the church and their constituents, so no underwriter worth their salt would put a reasonable price on that risk. Members can easily come and go, and since insurance through your employer is still the dominant distribution channel for health insurance, it would be seen as an adverse risk, meaning that people who couldn't get it through \"\"normal\"\" channels must be getting it through the church, which it would then be assumed that this person applying for coverage is an \"\"adverse risk\"\" or someone who is abnormally unhealthy. There are faith-based healthcare reimbursement programs that are NOT health insurance and do not satisfy the ACA required minimum coverages. From what I've seen and read, it's basically members of the religion or faith that pay money into the system (like paying an insurance premium) and they elect a board that basically evaluates each claim and pays or doesn't pay it, either partially or in full. While this is a nice way to get your bills paid, odds are it won't cover your $300,000 cancer treatment or your $50,000 cesarean section birth.\"",
"title": ""
},
{
"docid": "423cfcee5cca5f4a79db04d12face219",
"text": "Turns out Social Security and disability insurance are two different things but if you take disability insurance before retirement age when you get to full retirement age the disability money becomes the social security money. http://www.ssa.gov/dibplan/dqualify.htm If you are receiving Social Security disability benefits when you reach full retirement age, your disability benefits automatically convert to retirement benefits, but the amount remains the same.",
"title": ""
},
{
"docid": "8c5e9a3cf51b5b6aba3b6c982cb940f7",
"text": "If you are not open to changing the amount of money you are willing to spend, your options are limited. Why change your amounts and proportions? Your situation changed. You got married, divorced, purchased a new car, the company added free disability coverage. If the amount spent per year can't change, then you are asking how to review if your proportions are correct. The first thing is to look at what must you spend it on. If you have a mortgage or car loan, the bank will tell you the minimum amount. If you own a car the state will tell you the minimum amount for auto coverage. If there is any money left look at life, and disability. These can wreck the life of your dependents. When you have meet those needs, then increase auto and home to cover additional liability.",
"title": ""
},
{
"docid": "b29218638d78e9b10227d3fdda3655af",
"text": "\"I am very late to this forum and post - but will just respond that I am a sole proprietor, who was just audited by the IRS for 2009, and this is one of the items that they disallowed. My husband lost his job in 2008, I was unable to get health insurance on my own due to pre-existing ( not) conditions and so we had to stay on the Cobra system. None of the cost was funded by the employer and so I took it as a SE HI deduction on Line 29. It was disallowed and unfortunately, due to AGI limits, I get nothing by taking it on Sch. A. The auditor made it very clear that if the plan was not in my name, or the company's name, I could not take the deduction above the line. In his words, \"\"it's not fair, but it is the law!\"\"\"",
"title": ""
},
{
"docid": "985c27490a1fc20d8f94bcadedf22034",
"text": "Unfortunately I've seen every single example you've provided from the health care providers perspective. Trust me, they aren't happy about the situation either - hence the reason they will demand up front payment from you based on who your insurance carrier is. I could name a few of the top brand name insurance companies in this country that do all of this to their clients. Medical billing is an incredibly over complicated beast. One that insurance companies have been doing everything they can to make worse over the years. The codes can change annually and there are MANY different codes which can cover the exact same situation. Sure the insurance company might cover gallstones, but if you happen to be pregnant, well, that may not covered even though the treatment is the exact same. What can you do? Consider locating a new insurance company. You do have options and don't have to go with the one your company uses. The downside is that this is going to take quite a bit of research on your part and it will end up costing you more money on your monthly premiums simply because your company won't be footing part of the bill. Talk to other co-workers and see if their experiences match yours. If so, try to get a large enough group together to approach management and demand resolution. A third potential avenue is to get politically involved - but I'm enough of a pessimist that I doubt that would do any good. From what I've seen, neither major political party's current position actually does anything to solve the problem. A fourth option is suing the insurance company - but that is going to be incredibly expensive and take forever. You might have better luck getting together with a bunch of local people and demand your attorney general review the billing/payment practices. Again, this is going to require a LOT of effort. A fifth option is to attempt to cash pay your bills and submit them yourself to the insurance company for reimbursement. If you do this you can likely negotiate lower bills with the medical provider. For anything less than about $2,000 I negotiate the amount prior to service. Believe me when I say that providers are more than happy to give decent discounts if they know they won't have to deal with the insurance companies themselves. Slightly more work for you, but could be far cheaper in the long run.",
"title": ""
},
{
"docid": "bc143d63cb8050b104d6cce96934297c",
"text": "\"In addition to the good answers already provided, I want to point out that many (most?) providers will handle filing your health insurance claim for you even though it's really your responsibility. So here's how medical bills \"\"you don't have to pay\"\" might come about: * It's possible that your balance is $4, or $20, or $65, or even still $100 depending on your particular insurance plan. Whatever is left at this step is what you pay.\"",
"title": ""
},
{
"docid": "7acb0fe6e2fb77240b7fcaafd353a62b",
"text": "\"Some of this may depend on how your employer chose to deal with your notice period. Most employers employ you for the duration (which means you'd be covered for March on your insurance). They could 'send you home' but pay you (in which case you're an employee for the duration still); or they could terminate you on your notice day, and give you effectively a severance equal to two weeks' pay. That is what it sounds like they did. They should have made this clear to you when you left (on 2/23). Assuming you work in an at-will state, there's nothing wrong (legally) with them doing it this way, although it is not something I believe is right morally. Basically, they're trying to avoid some costs for your last two weeks (if they employ you through 3/6, they pay for another month of insurance, and some other things). In exchange, you lose some insurance benefits and FSA benefits. Your FSA terminates the day you terminate employment (see this pdf for a good explanation of these issues). This means that the FSA administrator is correct to reject expenses incurred after 2/23. The FSA is in no way tied to your insurance plan; you can have one or the other or both. You still can submit claims for expenses prior to 2/23 during your runout period, which is often 60 or 90 days. In the future, you will want to think ahead when leaving employment, and you may want to time when you give notice carefully to maximize your benefits in the event something like this happens again. It's a shady business practice in my mind (to terminate you when you give notice), but it's not unknown. As far as the HSA/FSA, you aren't eligible to contribute to an HSA in a year you're also in an FSA, except that they use \"\"plan year\"\" in the language (so if your benefits period is 6/1/yy - 5/31/yy, that's the relevant 'year'). I'd be cautious about opening a HSA without advice from a tax professional, or at least a more knowledgeable person here.\"",
"title": ""
},
{
"docid": "85a6d9770c858ec9f47d1599c0f8738a",
"text": "\"I believe you are confusing \"\"retirement\"\" and \"\"disability\"\". If you become disabled, then yes, the above chart you referenced applies to you. The US government will send you a disability check to assist you with living. This is very different from retirement.\"",
"title": ""
},
{
"docid": "89854b2a03b341b24944bb2af2a27fbf",
"text": "\"If I read your figures correctly, then the cost difference is negligible. ($1.84 difference) The main determining factor, I'd think, would be the coverage. Do you get more, or less, coverage now than you would if you went together on the same plan? You'd both be covered, but what is the cap? Plans, and employer contributions, change all the time. How is business in both of your companies? Are you likely to get cut? Are you able to get back into a plan at each of your employers if you quit the plan for a while? These rules may be unpleasant surprises if, say, your wife cancels her plan, goes on yours, and you lose your job. She may not be able to get back into her insurance immediately, or possibly not at all. A spouse losing a job isn't a \"\"qualifying life event\"\" the way marriage, birth of a child, divorce, etc., is.\"",
"title": ""
},
{
"docid": "e986d00b1b65c89f70aea126b6dfa7a3",
"text": "\"You are kind of thinking of this correctly, but you will and should pay for insurance at some point. What I mean by that is that, although the insurance company is making a profit, that removing the risk for certain incidents from your life, you are still receiving a lot of value. Things that inflict large losses in your life tend to be good insurance buys. Health, liability, long term care, long term disability and property insurance typically fall into this category. In your case, assuming you are young and healthy, it would be a poor choice to drop the major medical health insurance. There is a small chance you will get very sick in the next 10 years or so and require the use of this insurance. A much smaller chance than what is represented by the premium. But if you do get very sick, and don't have insurance, it will probably wipe you out financially. The devastation could last the rest of your life. You are paying to mitigate that possibility. And as you said, it's pretty low cost. While you seem to be really good at numbers it is hard to quantify the risk avoidance. But it must be considered in your analysis. Also along those lines is car insurance. While you may not be willing to pay for \"\"full coverage\"\" it's a great idea to max out your personal liability if you have sufficient assets.\"",
"title": ""
},
{
"docid": "f2bafadcd0846e0c462f6e6c8191488b",
"text": "We frequently get whole insurance vs term insurance questions; and most of the answers will support term insurance. We get questions regarding getting insurance before there is a need in case there is a problem getting it later. And for most people it doesn't make sense to over-insure early. You have asked from a slightly different position, you have a more solid reason to be concerned about your health. You don't have a need now, and can't estimate what your need will be, or when it will be. Those numbers you quote may seem high, but when you don't know how many kids you may have, or what you will need to protect against, they may turn out to be inadequate when you do need the insurance. You need to sit down with a fee only financial planner. They can lay out your options today, and as your situation changes. Then as the years go by, have that plan reexamined. The fee only planner will not tell you what company to buy insurance from, or what funds to invest in, but they will help you decide what types of protection and investment you need.",
"title": ""
}
] |
fiqa
|
19ad19053b7552e1e385175eef475443
|
Optimal number of credit cards for a given length of credit history
|
[
{
"docid": "06bf8bf93411127d8d15780505471b29",
"text": "I have found that between the Discover card and a Visa/Master Card a person has everything covered. In my case the Discover card had the best deal (cash back) and the Visa/Master Card took care of those times a vendor didn't take Discover. One big Box store (Costco) did trip us up, so we did end up getting an American Express card. But Costco is dropping that requirement in 2016. One advantage of only having a few cards is that the increase in your total credit line will be split among fewer cards. In your question the highest max limit on one card is $2500, what will you do if you have to take a flight at the last minute and the Airline ticket is more than that? If you need a higher limit, ask for one of your existing cards to raise it; don't go out and get another card. If you see that one of the companies that you already have a card with has a better card, you can ask them to convert your account to that better card. Yes higher total limit does help your utilization ratio portion of the score. But there is some opinion that they also look at the utilization ratio per card. So hitting one card to nearly the max can hurt your score. Three caveats about the number of cards:",
"title": ""
}
] |
[
{
"docid": "5e84ad1a155299c3cc4cad8018e600cf",
"text": "\"I would not call this a \"\"good\"\" idea. But I wouldn't necessarily call it a bad idea either. Before you even consider it, you need to do a little bit of soul searching. If there is ANY chance that having multiple credit cards could entice you to spend more than you otherwise would, then this is definitely a bad idea. Avoiding temptation is the key to preventing regrettable actions (in all aspects of life). Psychoanalysis aside, let's take a mathematical approach to the question. I believe your conclusion is correct if you add some qualifiers to it: A few years from now, then your credit score will probably be higher than if you just had 1 credit card. Here are some other things to consider: And, saving the best for last: As for the hard inquiries, they should only have an effect on your credit score for 1 year (though they can be seen on your report for 2 years). Final thought: if you decide to do this (and I personally don't recommend it), I would keep the number of applications smaller (3-5 instead of 10-15). I also would only choose cards that have no annual fee. Try to choose 1 card that has 1-2% cash back and make that your regular card.\"",
"title": ""
},
{
"docid": "248a67266daf806c6b4ac027188129d7",
"text": "There is almost no reason to get a second credit card - this is a very good arrangement for your creditor but not for you. Credit cards have high rates of interest which you have to pay unless you pay the credit off every month. Therefore, increasing your total credit capacity should not be your concern. Since internet technology lets you pay off your balance in minutes online, there is no reason to have multiple cards in order to avoid running out of a balance. If, on the other hand, you do not pay your existing card off every month, than getting another card can be even more dangerous, since you're increasing the amount of debt you take on. I'd say at most it would make sense for you to grab a basic VISA, since most places do not accept AMEX. I would also considering cancelling the AMEX if you get the VISA, for reasons above.",
"title": ""
},
{
"docid": "57855096c68b438e6c468bd7558f5f60",
"text": "The biggest reason that they are a bad idea is just because every credit application hurts your credit score, as does having too many cards. In addition, every new card is a greater risk of identity theft.",
"title": ""
},
{
"docid": "d9199144d20b10fa9627212692c2a733",
"text": "\"FICO SCORING http://www.pbs.org/wgbh/pages/frontline/shows/credit/art/chart_fico.gif This is from the PBS Frontline show \"\"Secret History of the Credit Card.\"\" Getting rid of one card won't immediately trash your score, nor will it be by the full impact (15%) of credit history. If there's no fee, I'd buy gas once per quarter with it. If there is a fee, I'd check my FICO score and if I can afford to lose 20 or so points for a time, I'd go for it.\"",
"title": ""
},
{
"docid": "47fb00c8ef165134dc0c437bddc54ebf",
"text": "Ditto to Victor. The simple rule is: Pay the minimums on all so you don't get any late fees, etc, then pay off the highest interest rate loan first. A couple of special cases do come to mind: If one or more of these are credit cards, then, here in the U.S. at least, credit cards charge you interest on the average daily balance, unless you pay off the balance entirely, in which case you pay zero interest. So for example say you had two credit cards, both with 1% per month interest, with debt of $2000 and $1000. You have $1500 available. Ignoring minimum payments for the moment, if you put that $1500 against the larger balance, you would still pay interest on the full amount for the current month, or $30. But if you paid off the smaller and put the difference against the larger, then your interest for the current month would be only $15. (Either way, your interest for NEXT month would be the same -- 1% of the $1500 remaining balance or $15 -- assuming you couldn't pay off the other card.) If one or more of the loans are mortgage loans on which you are paying mortgage insurance, then when you get the balance below a certain point -- usually 80% of the original loan amount -- you no longer have to pay mortgage insurance premiums. Thus the amount you are paying on such premiums needs to be factored into the calculation. There may be other special cases. Those are the ones that I've run into.",
"title": ""
},
{
"docid": "1bff0436c8c540881ce5addcb08ee967",
"text": "I don't know of any and it is unlikely that you will be able to find one. Most credit card processors charge a flat fee plus percentage. The flat fee is typically in the 35 cent range making the cost of doing business, in the manner you are suggesting, astronomical. Also what you are suggesting is contrary to best practices as hosting services, and many other industries, offer deep discounts when making a single payment for an extended period of time. This is not very helpful, but I think it is unrealistic to find what you are suggesting.",
"title": ""
},
{
"docid": "5c268fcbe2a1e81abbd9f972e63cda43",
"text": "You can do this if you merge Credit Cards with personal loans. You will have to pay 1 upfront fee but you can bounce a balance between 4 CCs almost indefinitely if you do it right. You have to have good credit though.",
"title": ""
},
{
"docid": "69972764b24f7e26ef9ebfed92a062e7",
"text": "You want to have 2-4 credit cards, with a credit utilization ratio below 30%. If you only have 2 cards, closing 1 would reduce your credit diversity and thus lower your credit score. You also want at least 2 years credit history, so closing an older credit card may shorten your credit history, again lowering your credit score. You want to keep around at least 1-2 older cards, even if they are not the best. You have 4 cards: But having 2-4 cards (you have 4) means you can add a 5th, and then cancel one down to 4, or cancel one down to 3 and then add a 4th, for little net effect. Still, there will be effect, as you have decreased the age of your credit, and you have opened new credit (always a ding to your score). Do you have installment loans (cars), you mention a new mortgage, so you need to wait about 3 months after the most recent credit activity to let the effects of that change settle. You want both spouses to have separate credit cards, and that will increase the total available to 4-8. That would allow you to increase the number of benefits available.",
"title": ""
},
{
"docid": "ca4efa920bc59cb71bee8163139124a8",
"text": "I think you are interpreting their recommended numbers incorrectly. They are not suggesting that you get 13-21 credit cards, they are saying that your score could get 13-21 points higher based on having a large number of credit cards and loans. Unfortunately, the exact formula for calculating your credit score is not known, so its hard to directly answer the question. But I wouldn't go opening 22+ credit cards just to get this part of the number higher!",
"title": ""
},
{
"docid": "d7f7965817f9d5ab9f5b01d3e16284d6",
"text": "\"Aside from an annual fee, if any, the card issuer makes money 2 ways, the transaction fee, about 1.5%-2% charged to the merchant, and interest from you if you leave a balance month to month. Obviously, the bank has some cost in processing statements and maintaining your account. If up front you are saying you will not have any chance of providing a certain profit level, they may have no interest in your business. (As you updated.) Other card issuers (almost surely with fees) might. Put the cards on ice. A bag of water in freezer. Don't be so hasty that you ding your report this way. By trashing the history as well as utilization, you may impact your score enough to do some harm if you actually need credit in the near future. I know this is a game with the credit agencies, a \"\"how good a borrower am I\"\" game, but it can really impact your bottom line if you don't play along. In reply to Michael's comment 1/5/15, if I have one card and am budgeted for $1000/mo in spending, in order to keep utilization down to less than 20%, I'd need a line of more than $5000. Even if I ignore utilization, my January spending is $1000, but the bill is cut on the 31st and not due till Feb 25th. So a line of nearly $2000 is required unless you wish to make mid cycle payments on an ongoing basis.\"",
"title": ""
},
{
"docid": "cec404b25b1a09b02f312007d5d907d9",
"text": "\"I'm not sure that OP was asking if he/she personally should have more available credit, so I will answer the other interpretation: should that particular card have a higher limit? The answer is \"\"no.\"\" The range varies vastly by issuer. Starting limits vary widely from issuer to issuer even with identical credit histories. Some issuers never automatically increase the limit, some periodically conduct account reviews to determine if an increase is warranted. Some like to see higher spending habits each month. Personally, my cards range from $500 to $25000, and the high and low extremes are the same age. You can search for tips on how often to request increases for your particular card, or what kind of spending habits the issuer prefers. An important note: You do not need to carry a balance to make the issuer happy. You never need to pay a cent in credit card interest.\"",
"title": ""
},
{
"docid": "6eeebb604046b2dd9274a55dbadbaf4f",
"text": "Your credit score is definitely affected by the age of your credit accounts, so if you frequently close one card and open another new one, you're adversely affecting the overall average age of accounts. This is something to consider and whether it is worth what you're trying to achieve. Sometimes, if you're a good customer and are insistent enough, you can simply call your credit card company and use the threat of closing your account in favor of another card that offers something attractive to get your current bank to sweeten its incentives to keep your business. I know many people who've done this with real success, and they spare themselves the hassle of obtaining a new card and suffering the short term consequences on their credit report. This might be an avenue worth trying before you just close the account and move on. I hope this helps. Good luck!",
"title": ""
},
{
"docid": "8630f5c40a3b7606a87642027ce64970",
"text": "In your specific case, I would leave them open unless you have a specific reason for wanting to close them - particularly, unless you feel closing them is necessary for you to not misuse them. The impact on the credit score is not why I say this, though. Much more important are the two competing real factors: My suggestion would be to take the cards and put them in your file cabinet, or whatever would cause you to not use them. In fact, you could even cut them up but not close the accounts - I had an account open that I didn't possess a physical card for several years for and didn't use at all, and it stayed open (though it's not guaranteed they'll keep it open for you if you never use it). In an emergency you could then ask them to send you a new copy of the card very easily. But, keep them, just in case you need them. Once you have paid off your balances on your balance-carrying cards, then you should consider closing some of them. Keep enough to be able to live for ~4-6 months (a similar amount to the ideal rainy day fund in savings, basically) and then close others, particularly if you can do so in a way that keeps your average account age reasonably stable.",
"title": ""
},
{
"docid": "dd9aa0e20ca04d30ead7fc398af8e1ab",
"text": "\"Several events will always result in a reduction of your score, including: These will show up in the short term, but I don't think it's worth $40 per year in perpetuity to avoid this. These aren't serious \"\"black marks\"\" in the same category as missing payments, carrying too much debt, or foreclosures/evictions, etc. These effects are designed to signal issuers when someone acquires a large amount of credit in a very short period of time, which may indicate a greater risk. If your credit is good and you are using your other cards responsibly, closing the card (given the annual fee) would not cause me great concern if it were me. Since you are so much better of a risk than you likely were in college, you can also call Capital One, ask to speak with a supervisor, and ask them to drop the fee and increase your credit limit. They should be able to easily verify that you meet the requirements for other types of preferred cards they offer, and they should be willing to offer you improved terms rather than losing your business. It is very possible they simply haven't re-evaluated your risk since you initially applied. Also, remember that these types of effects determine only a portion of your overall score. Activity is also a major component. Rather than leaving an unused card open for history and debt-to-limit purposes only, I would also recommend having some minimum level of activity, such as an automatic bill payment, on each card you carry. The effect of using your cards over time will have a significant positive effect on your score. Best of luck!\"",
"title": ""
},
{
"docid": "0e82dc8fadcfa9887733a3d37adfb011",
"text": "Incredible article, tons of data. Thank you! It does answer the above posters question if you're willing to read through. It provides data with and without 'revolving debt'. Side note; interesting to see how age and income trend. Debt increasing during the family-middle aged years, and during the peak income earning years. I'd say you want these credit card debt lower overall and on average; but with the distribution it may be sustainable.",
"title": ""
}
] |
fiqa
|
92233c2f364561c403d7475a07d95881
|
How to send money from europe to usa EUR - USD?
|
[
{
"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": "d253535002bfac9d7d58b0e7474d6d61",
"text": "PayPal. Or even Western Union or MoneyGram. Despite their fees, there is a reason those companies are still in business.",
"title": ""
}
] |
[
{
"docid": "7402ad5fe06144d975d78da88844f93d",
"text": "If you are a Russian citizen a much easier and common solution would be a USD or EUR withdrawal from your Webmoney account to your Cyprus bank account. You will need to create a Webmoney account (www.webmoney.ru), get a primary certificate in your local Webmoney office in Russia (The list is available at the website), create WMZ (for USD) and WME (for EURO) accounts in Webmoney (done online). Then you can easily top up your Webmoney WMR (Rubles) account (created automatically) with Rubles, convert the sum into USD (According to the Webmoney rate, which is only slightly different from the official central bank rate) and then withdraw the money from your USD Webmoney account to your Cyprus bank account. The money will be transfered to your Cyprus bank account from UK Webmoney dealer. The transaction description would say that this sum is transfered according to the contract of sale of securities. This method prevents any Russian regulatory authorities from seeing your transactions. And the best thig in Webmoney is that they have stable exchange rates and they use classic currencies such as USD, RUR, EUR, etc. Webmoney also has WMG accounts (Gold) and WMX accounts (Bitcoin). Non-Russian residents can also open a Webmoney accounts. You can get one even in Cyprus, by the way:)",
"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": "ffdf27fb9f7077c4a6d7ea0ba512f87f",
"text": "Three ideas: PayPal is probably the best/cheapest way to transfer small/medium amounts of money overseas.",
"title": ""
},
{
"docid": "28e02a87e6118dfc2685339589467995",
"text": "The best way to do this would be to exchange the funds into USD and wire the funds to your bank account in the US. It is up to you whether you want to hold USD or Euros. Depends if you plan to invest money in the US.",
"title": ""
},
{
"docid": "a41efbee5c826099835787e354a813b0",
"text": "I just tried doing that on my PP which is in the Netherlands, I have added a USD bank account (from my dutch bank) and they sent the verification amount in Euros, I called the bank and wonder why they didn't let me choose account currency they said it's not possible and if I cashout Dollars that I have in my PP (cause we usually do international business so we set it to dollars) it will be changed to Euros, So we decided to keep the dollars in account to pay our bills instead of getting ripped off by PayPal in xchange rates.",
"title": ""
},
{
"docid": "d80dc46153b70c74eb54261f370d06aa",
"text": "My current favorite service for this kind of transfer is Transferwise. The fees are quite low when compared to the 2.5-3% by high-street banks for currency conversion, to which you need to add the international wire transfer fee, and it's often a lot faster, as they split it into two domestic transfers while the international part + currency conversion happens internally to Transferwise.",
"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": "311332c16f52022baed996f2c7cdfc26",
"text": "You could use paypal to transfer money. You can pay with paypal and your UK contact could transfer the money to his bank account through paypal. I just received money this way from the US and paid 9 EUR for this. Receiving the funds is as quickly as clicking a button on the paypal site. Transfering it (without costs) took 1-3 days). It is by far the easiest way. If you are uncomfortable using paypal, the other option would be through your own bank account, where you would transfer using IBAN/SWIFT. The SWIFT bank account is usually the IBAN code plus a branch code. Often it is difficult to find the branch code, in that case you can use the IBAN+XXX. In the latter things might be delayed, but I actually haven't noticed the delay yet, since international transfer always seem to take between 1 and 10 days. The international transfering of money costs, except if it is within the EU region. The way to transfer money through Internet banking differs, from bank to bank. They keywords you need to look for are: SEPA, SWIFT, IBAN or international transfer.",
"title": ""
},
{
"docid": "5d5612af7d495b352eeb63110fcfde9a",
"text": "He can send you a check. This will move the burden of GBP->USD conversion to him (unless the GBP amount is preset, then you'll be the one to pay for conversion either way). You can then deposit the USD check in any Israeli bank (they'll charge commission for the deposit and the USD->ILS conversion). Another, and from my experience significantly cheaper, option would be to wire transfer directly to your account. If you have a USD account and he'll transfer USD out - it will be almost at no cost to you, if you don't have a USD account check with your bank how to open it, or pay for USD->ILS conversion.",
"title": ""
},
{
"docid": "95027669f9c35e4703223ae15a60e31e",
"text": "A quick search shows that https://www.westernunion.com/de/en/send-money/start.html says they will transfer €5,000 for a cost of €2.90. Assuming you can do a transfer every week, that would be six weeks at a cost of €17.40. €17.40 is slightly less than €1,500.00. I'm sure there are more ways.",
"title": ""
},
{
"docid": "ba62c505f4d6f363fe60f7ca52e607cf",
"text": "I regularly transfer money from the US to Europe, and have found a simple US check a pretty useful way (if you are not in a hurry): you write a US dollar based check to yourself, and deposit it to a bank in your new location (which implies you open an account in France, yes). It takes some days (somedays 7 days), and then the money will be deposited. The local bank will convert it (so you can walk around and pick a bank that has a rate concept that pleases you, before you open the account), and there will be no fees on the US side (which means you can get every last dollar out of the account). Also, you have the control over how much you pull when - you can write yourself as many checks as you like (assuming you took your checkbook). This was the best rate I could get, considering that wire transfers cost significant fees. There are probably other options. If you are talking serious money (like 100 k$ or more), there will better ways, but most banks will be eager to help you with that. Note that as long as you make interest income in the US, you are required to file taxes in the US; your visa status and location don't matter.",
"title": ""
},
{
"docid": "8aa4745955d3eeaef5710f6980b26d55",
"text": "You could buy a money order with your cash, then mail the money order to Deutsche Bank Germany for deposit into your account. You could also buy a prepaid debit card (like a Visa/AMEX giftcard) with your cash. Then, open a new Paypal account and add this prepaid card. Finally, send money to yourself using the prepaid card as the funding source. You could use a money transfer service, like Western Union, to transfer the cash to a friend/family in Germany. Then ask them to deposit it for you at Deutsche Bank Germany.",
"title": ""
},
{
"docid": "14a8a916279398241896fc0082a61796",
"text": "I don't see how Paypal can stop you from transferring USD funds from your paypal account to a USD account held with a bank. Just tell them to do the transfer to your account. The issue could be around USD onshore / offshore regulation. Is the US government preventing EU citizens from taking USD income offshore? If that's the case then you need a correspondent bank. So in other words, like using your friend. But what you can do is ask your bank who is their correspondent bank in the US, and whether they have the license required to transfer USD funds offshore. So you shift the regulation issues to your bank, and then you have to accept your bank's exchange rate - which is going to be better than paypal, who charges too much for FX transactions.",
"title": ""
},
{
"docid": "324db0b73ebde0b9908675aaec81ed4f",
"text": "I'm travelling to the US soon and will transfer to a US $ account from either an € account or £ account. My dad recommends transferring € because it's strong at the moment compared to previously. The £ is weak compared to what it was, but still stronger than €. Which is the best option at the moment?",
"title": ""
},
{
"docid": "27ad062be6239cd491e4f3ad3e523df9",
"text": "Yes. According to the IRS website, see #2: Whether a need is immediate and heavy depends on the facts and circumstances. Certain expenses are deemed to be immediate and heavy, including: (1) certain medical expenses; (2) costs relating to the purchase of a principal residence; (3) tuition and related educational fees and expenses; (4) payments necessary to prevent eviction from, or foreclosure on, a principal residence; (5) burial or funeral expenses; and (6) certain expenses for the repair of damage to the employee's principal residence. Expenses for the purchase of a boat or television would generally not qualify for a hardship distribution. A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee. (Reg. §1.401(k)-1(d)(3)(iii))",
"title": ""
}
] |
fiqa
|
4aee3383ae3da8c096303c30452512a6
|
Good book-keeping software?
|
[
{
"docid": "eac19c1373a32c96cbcee5fa90b8b640",
"text": "You can try Wave Accounting. Its a free software for Small Business and web-based. http://waveaccounting.com/",
"title": ""
},
{
"docid": "b32304b701b8d58dafd682346da54418",
"text": "The short answer is that there are no great personal finance programs out there any more. In the past, I found Microsoft Money to be slick and feature rich but unfortunately it has been discontinued a few years ago. Your choices now are Quicken and Mint along with the several open-source programs that have been listed by others. In the past, I found the open source programs to be both clunky and not feature-complete for my every day use. It's possible they have improved significantly since I had last looked at them. The biggest limitation I saw with them is weakness of integration with financial service providers (banks, credit card companies, brokerage accounts, etc.) Let's start with Mint. Mint is a web-based tool (owned by the same company as Quicken) whose main feature is its ability to connect to nearly every financial institution you're likely to use. Mint aggregates that data for you and presents it on the homepage. This makes it very easy to see your net worth and changes to it over time, spending trends, track your progress on budgets and long-term goals, etc. Mint allows you to do all of this with little or no data entry. It has support for your investments but does not allow for deep analysis of them. Quicken is a desktop program. It is extremely feature rich in terms of supporting different types of accounts, transactions, reports, reconciliation, etc. One could use Quicken to do everything that I just described about Mint, but the power of Quicken is in its more manual features. For example, while Mint is centred on showing you your status, Quicken allows you to enter transactions in real-time (as you're writing a check, initiating a transfer, etc) and later reconciles them with data from your financial institutions. Link Mint, Quicken has good integration with financial companies so you can generally get away with as little or as much data entry as you want. For example, you can manually enter large checks and transfers (and later match to automatically-downloaded data) but allow small entries like credit card purchases to download automatically. Bottom line, if you're just looking to keep track of where you are at, try Mint. It's very simple and free. If you need more power and want to manage your finances on a more transactional level, try Quicken (though I believe they do not have a trial version, I don't understand why). The learning curve is steep although probably gentler than that of GnuCash. Last note on why Mint.com is free: it's the usual ad-supported model, plus Mint sells aggregated consumer behaviour reports to other institutions (since Mint has everyone's transactions, it can identify consumer trends). If you're not comfortable with that, or with the idea of giving a website passwords to all your financial accounts, you will find Quicken easier to accept. Hope this helps.",
"title": ""
},
{
"docid": "d7b4f03d1e0956ca87f51146a917da16",
"text": "I like Quicken for personal use, and they have a small business edition if you don't want to move into QuickBooks.",
"title": ""
},
{
"docid": "1094d051d0888469d5c8772a8afb6621",
"text": "Best Linux software is PostBooks. It is full double entry, but there is definitely a learning curve. For platform-agnostic, my favorite is Xero, which is web-based. It is full double entry balance sheet, the bank reconciliation is a pleasure to use, and they are coming out with a US version this summer. Easy to use and does everything I need.",
"title": ""
},
{
"docid": "dcdc56495aaab112d02642395551384d",
"text": "I like using Mint.com to track my expenses. It makes it very easy to watch my budget and monitor my spending.",
"title": ""
},
{
"docid": "1bd97258d1b20e9f8a7ebe78e6c47401",
"text": "I think Peachtree is a double entry system",
"title": ""
},
{
"docid": "5b8225a226cca95fffba690e478dac98",
"text": "\"Xero and WaveAccounting can make things easy, but they also have their limitations. I've used both for short periods of time but found both of them to be lacking. While the \"\"ease\"\" is appealing, the ability to drill into the details and get good reports is the downfall of both of these accounting systems. QuickBooks may seem like the easy answer here, but it really is the best for getting the power you want without getting too complicated.\"",
"title": ""
},
{
"docid": "2ccda6b515f09fe101f3d7e6ccb0150d",
"text": "You should consider Turbocash. It's a mature open-source project, installed locally (thick client).",
"title": ""
},
{
"docid": "eaa2180e94ca419c10d2db37381389b7",
"text": "I'm not directly affiliated with the company (I work for one of the add-on partners) but I can wholeheartedly recommend Xero for both personal and business finances. Their basis is to make accounting simple and clean, without sacrificing any of the power behind having the figures there in the first place.",
"title": ""
},
{
"docid": "83d6c28d4622fb508060d7800e780c4a",
"text": "You can try manager.io. It has a desktop, cloud and server edition that should fit your needs.",
"title": ""
}
] |
[
{
"docid": "6227665539adcf4ff59654255a8cf00c",
"text": "\"You Need A Budget is a nice budgeting tool that works on the desktop. It is more focused on manual entry and budgeting over auto-downloading and categorizing. It does support downloading transactions from banks and then importing the transaction files. You mentioned having \"\"trust issues\"\" with a bank and this would be safe as you don't enter your credentials into the app. It also has a mobile app that works well. Not exactly what you are looking for, but it would work in India and be safe if you have an untrustworthy bank and it would allow you to import transactions.\"",
"title": ""
},
{
"docid": "c3d454d4eac15d202c95e8a03bd20526",
"text": "I use GNUCash. It's a bit more like Quickbooks than plain Quicken, but it's not all that complicated. Probably the most difficult part is understanding the idea of income accounts. Benefits: For short term planning, I use scheduled transactions. If I'm spending more than I have, it'll show up here. Every paycheck and dollar spent or invested is recorded with the exact date I anticipate it will happen, 30 days in advance. If that would overdraw my checking account, the Future Minimum Balance field will go negative and red. This lets me move float to higher interest savings and retirement funds, and avoids overdraft fees or other mishaps. By looking 30 days ahead in detail, I have enough time to transfer from illiquid assets. For longer term planning, I keep a spreadsheet around that plans out annual expenses. If I'm spending more than I earn, it shows up here. I estimate everything: expenses, savings, taxes, and income. I need this because I have a lot of expenses that are far less frequent than monthly or paycheck-ly. The beauty of it is that once I've got it in place, I can duplicate the sheet and consider tweaks for say taking a new job or moving, or even just changing an insurance plan (probably less relevant for those with access to NHS). Especially when moving to take a new job, it's not as straightforward as comparing salaries, and thus having a document for the status quo to start from lets you focus on the parts that changed.",
"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": "373453bfdda9cd829423f219990f07f2",
"text": "I see that at work too. People too ignorant to use Excel to store financial information so they hand you a sheet of paper with 20 ticker tape receipts from a ticker tape calculator showing how they added up numbers as support for a transaction...really? How much money is this costing the company on an annual basis?! Ticker tape fades, our soft documents are backed up off site nightly... EDIT: There are a lot of jobs (private and public sector) that are simply obsolete but people cling to them anyway because of politics and general organizational-disorganization.",
"title": ""
},
{
"docid": "810435c5809639511389c5fc99eb133e",
"text": "\"While Googling answers for a similar personal dilemma I found Mvelopes. I already have a budget but was looking for a digital way for my husband and I to track our purchases so we know when we've \"\"used the envelope\"\". It's a free app.\"",
"title": ""
},
{
"docid": "446d9213a8f4ea94a44d0e75bf123e7b",
"text": "\"Mint is one alternative. If you want the raw data in CSV format, you can use \"\"Export\"\" feature under\"",
"title": ""
},
{
"docid": "6ab84a4012b949349f3fa5c4f201402e",
"text": "I use iBank for Mac to keep track of my expenses. I also use the iPhone version since they can sync over Wi-Fi and I can capture expenses right on the spot instead of trying to remember what I spent on when I turn on my laptop.",
"title": ""
},
{
"docid": "5f4c85a0ec524834a22e73607839809b",
"text": "I wrote a small Excel-based bookkeeping system that handles three things: income, expenses, and tax (including VAT, which you Americans can rename GST). Download it here.",
"title": ""
},
{
"docid": "8d50c2156d049c162fca11446aa0de00",
"text": "If held in one savings account, how can I easily manage what percentage is planned for which purpose? I used a spreadsheet for some years, but found it clumsy for everyday use. Thus I wrote some software which my wife and I use for our short-term as well as long-term planning, available at http://budgeter.sourceforge.net. It specifically helps with splitting the money in one or several accounts into logical categories. (The software is not the most user-friendly ever, so there may be better suggestions that follow, but it works well for us. Please feel free to suggest improvements to it as well.)",
"title": ""
},
{
"docid": "f30604cdaf6d233b808313a4423f3974",
"text": "I currently use Moneydance on my Mac. Before that I had used Quicken on a PC until version 2007. It is pretty good, does most simple investment stuff just fine. It can automatically download prices for regular stocks. Mutual funds I have to input by hand.",
"title": ""
},
{
"docid": "e2762d545460a22c939b7c8db3bd238a",
"text": "\"Uh, have you tried google docs? Start off simple. Other than that, for the moment I use GNUCash. Some day I might try to write my own, but for now it works well enough. I have a number of scheduled transactions in GNUCash, and it records them days in advance. You talk about \"\"I should have how much money\"\", but GNUCash offers a slightly better format: Future Minimum Balance. If you want to know whether you can spend money in an account without triggering a chain reaction, that's the number you want. Being web-based so that it can be accessed from any OS. GNUCash is cross platform, with Windows, OSX and Linux clients. It also supports mysql/postgres database backends, so while it's not \"\"Web based\"\", you can keep your data \"\"in the cloud\"\".\"",
"title": ""
},
{
"docid": "9e3aeb1e220e254a1b835e73c9e24e8b",
"text": "\"Since this is a cooperative I'm guessing your partners may want to be able to view the books so another key point you may want to consider is collaboration. QuickBooks desktop has all of these same issues because it is meant to be used on a single desktop. We're in an age of mobile devices, and especially in a business like landscaping it would be nice if certain aspects of record keeping could be done at the point and time where they are incurred. I'd argue you want a Software as a Service (SaaS) accounting package as opposed to \"\"accounting software\"\" which might come on a CD in the form of QuickBooks, Sage and others. Additionally, most of these will also have guides to help make sure you are properly entering your records. Most of these SaaS products also have customer success teams to help you along should you need assistance. Depending on the level of your subscription you may get more sophisticated handling of taxes, customized invoices or integrated payroll. Your goal is to keep accurate records so you can better run your business and maintain obligations like filing taxes. You're not keeping the records just to have them. Keep them in a place where they will work for you and provide the insights and functionality that will help your business grow and become successful. Accounting software will always win in this scenario over a spreadsheet. FULL DISCLAIMER: I work for Kashoo, a simple cloud accounting product designed for small businesses. But the points I mention above are true for Xero, QuickBooks Online and Wave as well as Kashoo. And if you really want expertise to go with the actual software consider service providers with a platform like: Indinero, Bench, easyrecordbooks or Liberty Accounting.\"",
"title": ""
},
{
"docid": "3bbda03f837541c501058d5c2e9831a5",
"text": "Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow. GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls. Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that. I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports.",
"title": ""
},
{
"docid": "2c77381fb773ed6ce8484d1c26dc4212",
"text": "\"There are tonnes, and tonnes of things out there, but you have to be careful what you search for. Be specific about what you want. If you search for \"\"time sheet\"\" for example, you'll just get a bucket of stuff having to do with stylesheets, because there's more of that around. The most common type of small tool for tracking time is usually a timer-type thing that runs as a widget, gadget, or System Tray tool. You have to click it on, then off again, and the nice ones produce a usable output file. CSV, or XLS, or some such. There are tools that track what documents you have open, when you opened them, and when you closed them, and you can sort it out from there. They're a bit resource-heavy, so be careful if you have a low power system. Quickbooks has a little utility that will make file which can be imported into your accounting. Quickbooks is NOT for the average business person. You almost have to be a bookkeeper to get the most out of it. On the other hand, you can have a bookkeeper set it up for you, and at the end of the year your taxes are a one button affair. For Windows software I like to use the site snapfiles.com. It's always been reliable, the rating systems are pretty accurate, they mostly maintain their own copies of the software, they test for viruses, and the let you specify a \"\"freeware only\"\" search ;-) For Mac software I like versiontracker.com. If you're a massive freeware user, like me, sign up for an account, so you can receive alerts regarding updates, and such. Currently I do most of my computer-based organization on a Mac with piece of software by CircusPonies.com called NoteBook. There's a command to insert the time, date, or both, and I just use that when I have a need to record elapsed time. I have even run across (and I forget the name) a piece of software for tracking time on Windows, which had multiple timers which you could set so either they were allowed to run concurrently (lawyers), or only one would run at a time. Anyway… Personally I think freeware is fun, but be careful. It's still the wild frickin west out there. If you don't trust the site you're downloading from, scan it with your anti-virus software before you install it, create a Restore Point, do a full, offsite backup of all your hard drives, unplug your computer from the Internet, send your wife to her mother's, lock the kids in the basement, cross your fingers, and phone the local bishop for a dispensation (http://en.wikipedia.org/wiki/Dispensation_(Catholic_Church)).\"",
"title": ""
},
{
"docid": "b6f9d20330413449160f7a9aee60bbfa",
"text": "If you can set up automatic payments (like direct debits in the UK) and you can be disciplined enough to not spend the money on something else then this can be a good way of building/improving your credit rating. Banks / Lenders like it when they see you have previously taken, and repaid, credit. This can help you get better finance deals etc. in the future. Update: as noted in the comments France had a different financial system and people do not have credit ratings, so this point isn't valid in France",
"title": ""
}
] |
fiqa
|
916028e8ab292eba243873b42029ad74
|
Do I have to pay taxes on income from my website or profits?
|
[
{
"docid": "a0216dbbefba44b03de0d6e2f4a4ac4a",
"text": "I am not an accountant, but I do run a business in the UK and my understanding is that it's a threshold thing, which I believe is £2,500. Assuming you don't currently have to submit self assessment, and your additional income from all sources other than employment (for which you already pay tax) is less than £2,500, you don't have to declare it. Above this level you have to submit self assessment. More information can be found here I also find that HMRC are quite helpful - give them a call and ask.",
"title": ""
},
{
"docid": "553ba551de833464c003df753f98f022",
"text": "Not sure about the UK, but if it were in the US you need to realize the expenses can be claimed as much as the income. After having a mild heart attack when I did my business taxes the first time many years ago, a Small Business Administration adviser pointed it out. You are running the site from a computer? Deductible on an amortization schedule. Do you work from home? Electricity can be deducted. Do you drive at all? Did you pay yourself a wage? Any paperwork, fax communications, bank fees that you had to endure as work expenses? I am not an accountant, but chances are you legally lost quite a bit more than you made in a new web venture. Discuss it with an accountant for the details and more importantly the laws in your country. I could be off my rocker.",
"title": ""
},
{
"docid": "7717ff5a58ac270f1675ec5d99061ff6",
"text": "\"Income is income... it depends how it's structured.. personal or corporate.. but still you need to pay taxes... if you get audited, the tax man could look at your bank statements and ask, \"\"where is this money coming from\"\"\"",
"title": ""
},
{
"docid": "b2c28bf26ba5ea1a2b8b24af91d571f4",
"text": "You need to set your status as self-employed the day you started online work. If that date is a little ambiguous (as is usually the case with online business), you can start with the day you first made any money. Yes, you can deduct expenses from your revenue. But you have to be sure that the expenses were purely business related. This is how it goes: You inform HMRC about the day you started work. HMRC will assign you a UTR (Unique Tax Reference) number. Depending on how much you make you might or might not need to pay Class 2 NI contributions. You'll need to tell HMRC how much you expect to earn in the current tax year. Finally, you'll need to complete a Self-Assessment at the end of the tax year. I highly recommend setting up a business banking account. Here is a link that discusses being part-time self-employed in the UK.",
"title": ""
},
{
"docid": "ff702402806dae33bfe074ade9c59b45",
"text": "Being a tax professional, my understanding is that the threshold limit is a single limit for all your source(s) of income. Now many people who already draw salary which is liable to tax, develop application for mobile and generate some income. Such income is liable to tax, if along with other income they exceed the threshold limit. Income will have surely related expenses. And the expenses which are related to earning of the income are allowed to be deducted.",
"title": ""
}
] |
[
{
"docid": "eb4353560c7d13eb2ca53565f58b302e",
"text": "\"There's a couple of considerations here. Firstly, would this activity count as \"\"trading\"\". If you're trading you are legally required to register as self-employed. The line between a hobby activity and trading can be blurred but a key feature is whether you're aiming to make a profit (whether you manage it or not!). Secondly are you actually making any money? Even if what you're doing counts as self-employment, self-employed people pay tax on the profits they make from their activities, not on the total amount of money they take in. If you spend all the money you take in on keeping the server running then you're not making any profit so there's nothing to pay tax on.\"",
"title": ""
},
{
"docid": "c9fd3b5f25bb9d6af63423130795181e",
"text": "\"Do I have to explain the source of all income on my taxes? \"\"Yes, you do\"\", say the ghosts of Ermenegildo and Mary Cesarini. https://turbotax.intuit.com/tax-tips/general/what-to-know-about-taxes-on-found-property/L9BfdKz7N The Cesarinis argued to the IRS that the money wasn’t income, and so it should not be taxed as such. The IRS wasn’t swayed by the couple’s argument. The case went to federal court, and the IRS won. “Found” property and money has been considered taxable income ever since. The IRS plainly states that taxpayers must report “all income from any source,\"\" even income earned in another country, unless it is explicitly exempt under the U.S. Tax Code. This covers a wide range of miscellaneous income, including gambling winnings. According to the Cesarini decision, money you find isn’t explicitly exempt. The tax impact won’t be significant if you find an item of property with a fair market value of only $500 and are in the 25% tax bracket. You’ll owe the IRS $125 ($500 x .25 = $125). However, if you are a finder and keeper of $10,000, your tax burden will be $2,500 ($10,000 x .25 = $2,500).\"",
"title": ""
},
{
"docid": "24f57d4a14e3f6a6a4a25536b8f3d554",
"text": "The fact that you're a minor really only factors into who pays the taxes, you or your parents. If you are below the age where you can legally earn money (and therefore pay taxes), then the income will be considered your parent's or guardian's income, and they will be responsible for the taxes. If you are of the age where you are legally allowed to earn your own money, then yes, you will have to pay taxes. Either way, taxes must be paid. If age were a way of escaping the taxes, every big youtuber would simply open their account in the name of one of their children or a child they know...",
"title": ""
},
{
"docid": "547c7695b77b8fca33f9c4f66557eee8",
"text": "As JoeTaxpayer has mentioned, please consult a lawyer and CA. In general you would have to pay tax on the profit you make, in the example on this 10% you make less of any expenses to run the business. depending on how you are incorporating the business, there would be an element of service tax apart from corporate tax or income tax.",
"title": ""
},
{
"docid": "f44b20011b4c0ef83ce99bfe19e6e1ca",
"text": "It's not quite clear what you are asking, so I'll answer a few possible interpretations. Businesses pay taxes on their profits. So if your business took a million pounds in revenue (e.g. sold a million pounds worth of stuff) then you would subtract (roughly speaking) everything the business spent on making and selling that stuff, and pay taxes only on the profit. VAT however is a different matter, and you would have to pay VAT on all of that income (technically the VAT portion isn't even income - it's tax you are forced to collect on behalf of the government). If your business made a million pounds pounds profit, it would pay tax on all of that million (subject to what a tax accountant can do to reduce that, which ought to be considerable). You can't subtract your personal living expenses like that. However the company can pay you a salary, which counts as an expense and the company doesn't pay tax on that. You might also take some money from the company as dividends. Both salary and dividends count as personal income to yourself, and you will need to pay personal income tax on them. As for the Ferrari, it depends on whether you can justify it as a business expense. A lot of companies provide cars for their employees so that they can use them for business - however you have to be able to show that IS for business, otherwise they are taxed like salary. The rules for company cars are quite complicated, and you would need an accountant. If this is a real rather than hypothetical situation, definitely get a tax accountant involved.",
"title": ""
},
{
"docid": "5712bdc7208402f56051e2fd71d54a61",
"text": "Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.",
"title": ""
},
{
"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": "a9e5ea4e617dfb57896f673e055ff335",
"text": "Just earning the money would trigger a 1099 (assuming other requirements are met). It doesn't matter where the money is.",
"title": ""
},
{
"docid": "e2a297b8f3f0bc81e7eae59da3709a76",
"text": "Unless you are a tax-exempt entity and running this server is clearly within your mission statement: YES, it's taxable income. Sorry.",
"title": ""
},
{
"docid": "44f7f02ebc9b4bba410c9a805b9ed00d",
"text": "\"If you have income - it should appear on your tax return. If you are a non-resident, that would be 1040NR, with the eBay income appearing on line 21. Since this is unrelated to your studies, this income will not be covered by the tax treaties for most countries, and you'll pay full taxes on it. Keep in mind that the IRS may decide that you're actually having a business, in which case you'll be required to attach Schedule C to your tax return and maybe pay additional taxes (mainly self-employment). Also, the USCIS may decide that you're actually having a business, regardless of how the IRS sees it, in which case you may have issues with your green card. For low income from occasional sales, you shouldn't have any issues. But if it is something systematic that you spend significant time on and earn significant amounts of money - you may get into trouble. What's \"\"systematic\"\" and how much is \"\"significant\"\" is up to a lawyer to tell you.\"",
"title": ""
},
{
"docid": "caac26bdd391f8e851b7ad6108cc0407",
"text": "Yes, you do. Depending on your country's laws and regulations, since you're not an employee but a self employed, you're likely to be required to file some kind of a tax return with your country's tax authority, and pay the income taxes on the money you earn. You'll have to tell us more about the situation, at least let us know what country you're in, for more information.",
"title": ""
},
{
"docid": "ae96ebf7c42b5aa8611e7c1b9890c299",
"text": "First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax. At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State).",
"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": "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": "69a4097030d02ad2fe799e6e03e6d176",
"text": "Debit card purchases without PIN are treated as credit card purchases by merchants, and that includes ID verification. In addition to the ways you mentioned, you can get a debit card in any grocery store and load it with cash, and these debit cards don't have a name imprinted on them. But then if you lose them - you may have troubles proving you did in fact lose them when you try to recover your money, as anyone can use them. Technically you can register them online and call in and request refunds for fraud losses just as any other debit/credit card in the US (with $50 deductible), but in practice it may be difficult. These cards have very high fees, and may not be accepted for rentals etc.",
"title": ""
}
] |
fiqa
|
7a79da95d0d459eb39342eb279642c86
|
Is it better to ask for a raise before a spin-off / merger or after?
|
[
{
"docid": "0454eab886266d6596c9f63207e29092",
"text": "I would guess that before the spin-off, more money would be available In my experience the reverse is true. The finance folks go into overdrive tightening everything up so that budget forecasts for the transition period are as accurate and predictable as possible. This can be true 6 months out, 12 months out, etc - depending on the size and complexity of the business. So in terms of when to renegotiate, I think approaching the issue after the dust has settled is more realistic. Make sure you know your numbers as per normal and just remember that after the spin-off has occurred it's a business like any other business: if you are in position to negotiate (and reasonably expect) a raise then the fact that they spun off recently - a month or two before - is meaningless to the negotiation.",
"title": ""
},
{
"docid": "ff28ccfa4741ecc38a0bab88447897f9",
"text": "gef05 hit it on the head -- the books get frozen when mergers/spinoffs happen. I worked as an IT guy at a company whose mission was operating call centers -- and they didn't bother paying the phone bill! Why? the terms were already agreed upon, and the powers that be were waiting for final legal sign-off. Try to figure out who the leaders are going to be after the spinoff, and start politicking them.",
"title": ""
},
{
"docid": "9fd013efa68d1fa929449e967acc66a0",
"text": "\"Corporate restructuring makes everything a flux, so you might as well revisit some core fundamental questions. Here's how to do this professionally: Start floating your CV now. Line up interviews in competing companies. Attend to them. Score a job offer, and have it put into writing, with exact salary, which should be at least 10%++ of your current one. Take a clear empty page, and write on top: \"\"Business value provided\"\". Put down your major contributions, and achievements. Wherever possible, put the company's expected dollar value near to it. For bonus points, sum it up on the bottom, and minus your current salary. Difference is \"\"Profit provided directly to the company's bottom line\"\". Float this to your manager's desk. At this position, you have only one fundamental question to your boss: \"\"match or pass?\"\" :) A corporate spin-off is a good time to do this: 1, to ensure, that your position will not be made redundant; 2, if it is, you have a backup plan. If the parent company's \"\"getting rid of you\"\", however, there are even more fundamental questions you might want to ask yourself: is this really a profitable division, or merely a loss leader? Does this company have a future, and the adequate growing options for you, personally? To answer these questions, you must have an opportunity cost estimation; and for that, you must have second (and preferably, third) options -hence, the strategy above. To conclude, the best time to do your job research is every other month; and the best time to ask for a raise is always now :) Good luck!\"",
"title": ""
}
] |
[
{
"docid": "442ed4cce3fedeeeb99c73feb326f40b",
"text": "Not necessarily. You only need to raise prices to maintain current profit margins. Assuming you aren't living on a paper thin profit margin, you can give your employees a raise and suffer a lower profit margin. Now, that could have other negative consequences on your stock value and shareholders might be upset, but that is a different discussion.",
"title": ""
},
{
"docid": "5883594212907d5df467c9d29e54bb54",
"text": "\"Absolutely terrible idea(s) on many fronts. Firstly, why are you giving away equity at all? usually it's to attract people you otherwise wouldn't be able to hire (like extremely talented coders or business development managers) but normal employees? Bad idea. If you really want to give up equity, then make sure it's only realized (valued) once certain targets are met (i.e. sales/revenue/share price/investment etc). As for the nomenclature, they're not \"\"Co-Founders\"\" - that's typically reserved for the people that foundned the company, not just people who happened to be working for the company it started trading. Call them \"\"founding employee\"\" if you must, but they're certainly not founders. Why does this matter? If the company ever takes iff or you get investment, or you fire one of them or one just gets the idea to sue you, their position name suddenly REALLY matters, and by not being careful, they could win a substantial cut of your company in a lawsuit. there's even stories of employees ganging up on their bosses and they end up owning the company. I know someone that's been involved in high 8 figure suit for 7 years for exactly the same reason. So unless they're putting in startup capital or they're taking a serious hit on their salary in return for compensation in the form of equity, don't give anyone equity.\"",
"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": "e3c326b2ea3f1b5e375bbd90af5d2132",
"text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"",
"title": ""
},
{
"docid": "8da34da6ec8ad4ad3b909968309d6816",
"text": "\"What makes a \"\"standard\"\" raise depends on how well the economy is doing, how well your particular industry is doing, and how well your employer is doing. All these things change constantly, so anyone who says, \"\"a good raise is 5%\"\" or whatever number is being simplistic. Even if true when he said it, it won't necessarily be true next year, or this year in a different industry, etc. The thing to do is to look for salary surveys that are reasonably current and applicable. If today, in your industry, the average annual raise is 3% -- again, just making up a number -- then that's what you should think of as \"\"standard\"\". If you want a number, okay: In general, as a first-draft number, I look for a raise that's 2% or so above the current inflation rate. Yes, of course I'd LIKE to get a 20% raise every year, but that's not going to happen in real life. On the other hand if a company gives me raises that don't keep pace with inflation, than barring special circumstances I'm going to be looking for another job. But there are all sorts of special circumstances. If the economy is in a depression and unemployment in my field is 50%, I'll probably figure I'm lucky to have a job at all and not be too worried about raises. If the economy is booming and all my friends are getting 10% and 20% raises, then I'll want that too. As others have said, in the United States at least, the best way to get a pay raise is to change jobs. I think most American companies are absolutely stupid about this. They don't want to give current employees big raises, so they let them quit, and then hire replacements at a much higher salary than they were paying the guy they just drove to quit. And the replacement doesn't know the company and may have a lot to learn before he is fully productive. And then they congratulate themselves that they kept raises this year to only 3% -- even though total salaries paid went up by 10% because the new hires demanded higher salaries. They actively punish employees for staying with the company. (Reminds me of an article I read in a business magazine by an executive of a cell phone company. He bemoaned the fact that in the cell phone industry it is very hard to keep customers: they are constantly switching to other vendors. And I thought, Duh, maybe it's because you offer big discounts for the first year or two, and after that you jack your prices up through the roof. You actively punish your customers for staying with you more than 2 years, and then you wonder why customers leave after 2 years.) Oh, if you do change jobs: Absolutely do not buy a line of \"\"we'll start you off with this lower salary but don't worry because you'll get a big raise in a year\"\". When you're looking for a job, it's very easy to turn down a poor offer. Once you have taken a job, leaving to get another job is a big decision and a lot of work. So you have way more bargaining power on starting salary than on raises. And the company knows it and is trying to take advantage of it. Also consider not just percentage increase but what you're making now versus what other people with similar experience are making. If people comparable to you are making $50k and you're making $30k, you're more likely to get a big raise than if you're already making $80k. If the company says, \"\"We just don't have the budget to give you a raise\"\", the key question is, \"\"Is that true?\"\" If the company is tottering on the edge of bankruptcy and trying to cut costs everywhere, then even if they know you're a good and productive employee, they may really just not have the money to give you a good raise. But if business is booming, this could just be an excuse. It might be an excuse for \"\"we're trying to bleed employees white so the CEO can get another million dollar bonus this year\"\". Or it might be a euphemism for \"\"you're really not a very useful employee and we're seriously thinking of firing you, no way we're going to give you a raise for the little bit of work you do when you bother to show up\"\". My final word: Be realistic. What matters isn't what you want or think you need, but what you are worth to the company, and what other people with similar skills are willing to work for. If you are doing work that brings in $20k per year for the company, there is no way they are going to pay you more than $20k for very long. You can go on and on about how expensive it is these days to pay the mortgage and pay medical bills and feed your 10 children and support your cocaine addiction, but none of that is relevant to what you are worth to the company. Likewise if there are millions of people out there who would love to have your job for $20k, if you demand a lot more than that they're going to fire you and hire one of them. Conversely, if you're bringing in $100k a year for the company, they'll be willing to pay you a substantial percentage of that.\"",
"title": ""
},
{
"docid": "b4607c8cf32b080fd9ff0937ab8f99e2",
"text": "Most businesses want to grow, and there are a variety of ways to raise the money needed to hire new employees and otherwise invest in the business to increase the rate of that growth. You as a stock holder should hope that management is choosing the least expensive option for growth. Some of the options are debt, selling equity to venture capitalists, or selling equity on the open market (going public). If they choose debt, they pay interest on that debt. If they choose to sell equity to venture capitalists, then your shares get diluted, but hopefully the growth makes up for some of that dilution. If they choose to go public, dilution is still a concern, but the terms are usually a little more favorable for the company selling because the market is so liquid. In the US, current regulations for publicly traded companies cost somewhere in the neighborhood of $1M/year, so that's the rule of thumb for considering whether going public makes sense when calculating the cost of fundraising, but as mentioned, regulations make it less advantageous for executives who choose to sell their shares after the company goes public. (They can't sell when good spot prices appear.) Going public is often considered the next step for a company that has grown past the initial venture funding phase, but if cash-flow is good, plenty of companies decide to just reinvest profits and skip the equity markets altogether.",
"title": ""
},
{
"docid": "27e0430f759036c11f1f3a188d4dbd52",
"text": "\"This would never apply for tax \"\"brackets\"\". It's not as though making an extra dollar will put you into an entire separate bracket, the IRS isn't that bad. They bump up the \"\"brackets\"\" every $50, so you will never turn down a raise because it would cause you to lose income. However if your raise would preclude you from contributing to your IRA because it pushes you over $110,000 then yes, you could turn it down or explain to your boss that it would need to be just a little bit higher to cover your IRA contribution loss.\"",
"title": ""
},
{
"docid": "5b9afd809b19ea026a97e23618f37748",
"text": "I recently was offered $1/hr raise. I turned it down because 1.)I had been looking for other jobs and the extra $150 per month wasn't enough money to keep me from exploring other options so it would look bad to take a raise and leave a month later. You never want to burn bridges. 2.) Raises aren't given out everyday. The business I work for is having financial troubles and the $1/hr was probably the best they could do at the time. If business picks up and they can afford to give me more money they won't do it because the record will show that I just got a raise. One good extra is that your boss will be flabergasted that you just turned down a raise and you may gain a lot of respect from your superiors. Don't confuse strategically turning down a raise and letting others sway your opinion because they don't wanna cough up the cash.",
"title": ""
},
{
"docid": "65acc04ee19efe73f16b1ede4223dbd8",
"text": "Should I invest money in the pre-IPO stocks soon to be offered by the company that I work for? Is it wise to do this? What should I be thinking about? What are the risks? The last time I was offered pre-IPO friends and family stock, I purchased half of my allotment, and had my parents purchase the other half. Since I had a 6-month blackout period, I had to hold my portion. My parents sold their portion one day after the IPO. The price went up dramatically for about a day and a half, then dived continuously. My portion ended up being worthless. My parents made a few bucks. Good for them. Not a huge deal either way, since my cost was relatively low. If I had a chance to do it again, I'd give it all to friends or family instead of splitting it, and have them sell quickly if they realized a profit. You might be luckier than I was.",
"title": ""
},
{
"docid": "6f15564a7134221d0d97e3c9e7fd2100",
"text": "That's a simple overhead calculation. For secretary how much time is this person going to potentially save verses how much time I spend on those tasks. If secretary pay rate is near, equal, or less than what I spend in my own hourly rate it makes sense to hire. If it is not, do not hire, you don't want to loose money on overhead or have people sitting around doing nothing. Brand Manager is more complicated because it involves speculation and projection. I would want some kind of trial solution before a more permanent solution was decided on. For example, if brand manager is renewing my brand image what do I anticipate that new image will bring in additional revenue, or alternatively, what new markets will my product now be able to tap into that it was not able to tap into before. Then I would do the simple sales calculation of how much revenue would I need to expect to cover the cost of the overhead and project to justify viability. Then simply ask the question of if it is reasonable to expect those kinds of returns from this person or project. In business there is risk. There's really two ways to look at risk, big risk = big reward and screw the consequences if we fail, or make sure that risk is diminished as much as possible before making a decision. I would say most start-ups begin with big risk = big reward and then evolve into diminishing risk as much as possible. Both have many good and many bad examples. Most involve businesses dead before they figure out how to diminish risk, or in extreme examples wall street people diminishing risk by cheating the system, but we aren't discussing ethics.",
"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": "1a0d11aa89ee26bfe0547b42c454dc15",
"text": "\"Now, my own answer: If you join and receive equity, do the 1/3 split as a max. Truthfully, if it were my company, I would try to negotiate with you to only give you 15%--20% because as an advisor you're not going to be involved in executing the idea to turn it into a business. If you contribute capital, do it as a loan. End of story. You don't own more because you financed growth... you shouldn't. The growth will have come because of the collective performance of the whole team. You should get paid back at a \"\"fair\"\" rate for your investment... if the company can handle it, I would argue something like 10% interest is reflective of the risk you're taking with your money. If the finances are so tight that the interest repayment isn't an option, do the math behind what you should be paid for the loan in interest, and convert that to shares or equity somehow, and get paid back for the invested capital. If the company can't repay your loan, the business model may not be sound enough, or developed enough, to be investing in to begin with.\"",
"title": ""
},
{
"docid": "6bf1a02496d303b417c67102f63a468a",
"text": "And to your point, the same thing that was said above applies - when younger people bounce often and end up being at inflated rates, they are more often the first to get cut when cost changes need to be applied. Seen it happen all the time in multiple companies. Sometimes it's okay to work up to a good position, than to get overpaid for being an underperformer.",
"title": ""
},
{
"docid": "6df12d93516abeff8fd5bd05200b87b4",
"text": "\"Since you have no sales, I'd likely question how well could you determine the value of the company's assets in a reasonable fashion. You may be better to estimate sales and discount that back to a current valuation. For example, insurance companies could determine that if you wanted to be paid $x/month for the rest of your life, the present day value of that is $y. There are similar mechanisms for businesses but this does get tricky as the estimates have to be somewhat conservative and you have to be prepared for some other scenarios. For example, if you got the $200,000 then would you really never have to ask for more external equity financing in the future or is it quite likely that you'd want another infusion down the road? While you can mark it at $1,000,000 there will be questions about why that value that you'd have to answer and saying, \"\"Cause I like big round numbers,\"\" may not go over well. My suggestion is to consider what kind of sales will the company have over the next 5 years that you could work back to determine a current price. If you believe the company can have $5,000,000 in sales over the 5 years then it may make sense to place the current valuation of $1,000,000 on it. I wouldn't look too much into the money and time you've invested as that isn't likely to go over well with investors that just because you've put in what is worth $x, the business may or may not be worth that. The challenge is that without sales, it is quite difficult to get an idea of what is the company worth. If it makes billions, then it is worth a lot more than a company that never turns a profit. Another way to consider this is the question of what kind of economic output do you think you could do working here for the next 5 years? Could you do thousands of dollars of work, millions of dollars or just a few bucks? Consider how you want this to be seen where if you want some help look up episodes of TV shows like \"\"Dragon's Den\"\" or \"\"Shark Tank\"\" as these give valuations often as part of the pitch which is what you are doing.\"",
"title": ""
},
{
"docid": "92672dcaf9b5d74a175578d2a4403c40",
"text": "Note that after 15 years, the tax exemption is €36800 per person, which includes both the principal you desposited and the accumulated interest. It's possible that you will have a higher balance than this in your savings account at this point and would still owe tax on the interest accumulated above the exempted amount. After 20 years, you get the full tax exemption, the lesser of your portion of the mortgage debt and €162000 per person. In direct answer to your questions: I'm not aware of any exceptions to the 15 year rule for allowing the accumulated interest to be tax free when selling your house. If your accumulated interest is low enough, you might consider just paying the tax on it as it would give you the most flexibility in choosing a new mortgage. This is why I asked about more details about your interest rate and how long the mortgage has been running. It may, however, possible to couple the savings account to a new ABN AMRO Bankspaar mortgage when you buy a new house. You should check your mortgage terms and conditions. For example, Section 23.12 in ABN AMRO's terms and conditions from 2010 describes this. See here. It is probably best, however, to speak directly with either your mortgage broker or with a mortgage adviser with ABN AMRO. If your mortgage broker still worked on commission (aflsuitprovisie) when you closed your mortgage, then they are obligated to assist you with this type of question. In order to qualify for the tax exemption, you must use the saved value to pay off debt on your primary residence (eigenwoningschuld). Decoupling the savings account entirely from a mortgage will disqualify you from the tax advantages. You will owe tax on all accumulated interest.",
"title": ""
}
] |
fiqa
|
5960f09cf0d0c54e247adc181fff703f
|
Impact of EIN on taxation
|
[
{
"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": "eb2a95119679e24f2467dcdd08ca9b5b",
"text": "Your question mixes up different things. Your LLC business type is determined by how you organize your business at the state level. Separately, you can also elect to be treated in one of several different status for federal taxation. (Often this automatically changes your tax status at the state level too, but you need to check that with your state tax authority.) It is true that once you have an EIN, you can apply to be taxed as a C Corp or S Corp. Whether or not that will result in tax savings will depend on the details of your business. We won't be able to answer that for you. You should get a professional advisor if you need help making that determination.",
"title": ""
}
] |
[
{
"docid": "6210d2897e4211bf4057a4113912c180",
"text": "The question seems to be from the point of view actual sales and not its impact on one's taxation. In case you just want to sell, why brokers will respond differently each times. Either there may be issues with ownership and/or the company whose shares it is? In case you feel that the issues lies with brok",
"title": ""
},
{
"docid": "1eeac08e28c08a3705cc03b636ef3e2c",
"text": "\"Those are just a form of \"\"rent tax\"\" on real economy - that is, people that work in those non-productive sectors of economy are just using the fruits of labor of all the others. But only the real economy actually matters - and having a few extra zeroes in the bank accounts of the rich don't really affect it as long as those money stay there. Money that are not exchanged for real world goods and services don't really exist for the real economy.\"",
"title": ""
},
{
"docid": "86ca0abf6aafa8af607fcb744d027344",
"text": "The regulations you're talking about (TR 1.263) are going into effect starting tax year 2016, so for purchases you made last year they're (kindof...) irrelevant. Kindof, because the IRS promises to not audit those that qualify under the regulations even if they use it before it goes into effect, but it doesn't legally have to. Since the regulations are new, I suggest you talk to a licensed professional who'd explain them to you and interpret them with regards to your specific situation. From my brief read, you can expense under these rules things that you would otherwise capitalize, with the $500 limit to the invoice. Meaning, if you bought a computer paying $500, which you use 50% for your business - you can expense $250. The benefit, comparing to the Sec. 179, is that you're not limited to new items, nor are you limited to business revenue. Otherwise, it looks like the applicability is similar. As I said - talk to a licensed tax adviser (EA/CPA licensed in your State), since these rules are new and untested, and you should probably have a professional provide guidance. I'm not such a professional.",
"title": ""
},
{
"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": "2a82b567373d7eaed263f4cc27b725f1",
"text": "It looks like fair-market value when you receive your virtual currency is counted as income. And you're also subject to self-employment tax on that income. Here's an FAQ from the IRS: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities? A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute selfemployment income and are subject to the self-employment tax. See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on selfemployment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit. You'd of course be able to offset that income with the expense of mining the virtual currency, depreciation of dedicated mining equipment, electricity, not sure what else. Edit: Here's a good resource on filing taxes with Bitcoin: Filling in the 1040 Income from Bitcoins and all crypto-currencies is declared as either capital gains income or ordinary income, for example from mining. Income Ordinary income will be declared on either your 1040 (line 21 - Other Income) for an individual, or within your Schedule C, if you are self-employed or have sole-proprietor business. Capital Gains Capital gains income, or losses, are declared on Schedule D. Since there are no reported 1099 forms from Bitcoin exchanges, you will need to include your totals with Box C checked for short-term gains, and with Box F checked for long-term gains. Interesting notes from that article, your first example could actually be trickier than expected if you started mining before there was a Monero to USD exchange. Also, there can also be capital gains implications from using your virtual currency to buy goods, which sounds like a pain to keep track of.",
"title": ""
},
{
"docid": "67bbd14128eadd93b30815a6c969ca14",
"text": "Just from my own experience (I am not an accountant): In addition to counting as 'business income' (1040 line 12 [1]) your $3000 (or whatever) will be subject to ~15% self-employment tax, on Schedule SE. This carries to your 1040 line ~57, which is after all your 'adjustments to income', exemptions, and deductions - so, those don't reduce it. Half of the 15% is deductible on line ~27, if you have enough taxable income for it to matter; but, in any case, you will owe at least 1/2 of the 15%, on top of your regular income tax. Your husband could deduct this payment as a business expense on Schedule C; but, if (AIUI) he will have a loss already, he'll get no benefit from this in the current year. If you do count this as income to you, it will be FICA income; so, it will be credited to your Social Security account. Things outside my experience that might bear looking into: I suspect the IRS has criteria to determine whether spousal payments are legit, or just gaming the tax system. Even if your husband can't 'use' the loss this year, he may be able to apply it in the future, when/if he has net business income. [1] NB: Any tax form line numbers are as of the last I looked - they may be off by one or two.",
"title": ""
},
{
"docid": "4d8138041b3ccb69d73a2e767b142572",
"text": "\"Not sure I understood, so I'll summarize what I think I read: You got scholarship X, paid tuition Y < X, and you got 1098T to report these numbers. You're asking whether you need to pay taxes on (X-Y) that you end up with as income. The answer is: of course. You can have even lower tax liability if you don't include the numbers on W2, right? So why doesn't it occur to you to ask \"\"if I don't include W2 in the software, it comes up with a smaller tax - do I need to include it?\"\"?\"",
"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": "20d029ee79bf663c0ef296cbf536a153",
"text": "Whether you're self-employed or not, knowing exactly how much tax you will pay is not always an easy task. Various actions you can take (e.g., charitable donations, IRA contributions, selling stocks) may increase or reduce your tax liability. One tool I've found useful for estimating federal taxes is the Excel 1040 spreadsheet. This is a spreadsheet version of the income tax return form. It is not official and is not created by the IRS, but is maintained as a labor of love by a private individual. In practice, however, it is pretty much an accurate implementation of the tax calculation algorithms encoded in the tax forms and instructions. The nice thing about it is that it's a spreadsheet. You can plug numbers into various slots in the spreadsheet and see how they affect your federal tax liability. (You may also owe state taxes depending on what state you live in.) Of course, the estimates you get by doing this are only (at most) as accurate as your estimates of the various numbers you plug in. Still, I think it's a free and useful way to get a ballpark estimate of your tax liability based on numbers that you can more easily estimate (e.g., how much money you expect to earn).",
"title": ""
},
{
"docid": "14d46b44a67ce3e321774973b2a70e32",
"text": "\"People often have the wrong idea about how taxes apply to their money. There's not really any such thing as \"\"pre-tax\"\" or \"\"post-tax\"\" income, only pre-tax and post-tax **uses** of your income. This is somewhat hidden by the fact that we pay income tax based on our income for the year; but if you look a bit closer, you'll notice that come April 15th, (almost) every dollar you get to *subtract* from your gross income isn't defined by where it comes from, but rather, where it *went* (there are a few special cases there, like qualified dividends, that that's an entirely different issue). Perhaps the most clear example of this is a traditional IRA that you self-fund from your savings account on April 14th, for the prior tax year - You're putting dollars you've already taken home, into a pre-tax account, *after* the end of the calendar tax-year; and yet it all works out exactly the same (tax-liability wise - There's certainly an opportunity cost there) as if you had contributed those dollars via a weekly payroll deduction. So when you manually fund a Roth IRA, it has *no* effect on your tax liability (except insofar as you *don't* get to deduct it from your taxable income, which you wouldn't if you had left it in a savings account, etiher). In the year you earned that money, you paid taxes on it; when you take it out, you won't.\"",
"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": ""
},
{
"docid": "6fb392db66de88a0af8f251d21c68b04",
"text": "\"IRA distributions are reported on line 15b on the standard form 1040. That is in the same Income section as most of your other income (including that 1099 income and W2 income, etc.). Its income is included in the Line 22 \"\"Total Income\"\", from which the Personal Exemption (calculated on 6d, subtracted from the total in line 42) and the Standard Deduction (line 40 - also Itemized Deduction total would be here) are later reduced to arrive at Line 43, \"\"Taxable Income\"\". As such, yes, he might owe only the 10% penalty (which is reported on line 59, and you do not reduce this by the deductions, as you surmised).\"",
"title": ""
},
{
"docid": "7bbe08a20012e4df28dec05a8a0bc8ad",
"text": "\"my taxable income was roughly $230,000 in 2012. Indeed it is relevant. The highest AGI limit for deductible IRA contributions is 112K. So no, IRA contribution will not help you reducing your tax bill this year. The deduction phases out starting from AGI limits of $10K in certain cases (for married filing separately), and phases out entirely for anyone at AGI of 112K (for 2012). The table linked describes the various deduction phase-out parameters depending on your filing status, and will probably be updated yearly by the IRS. However this is only relevant if your company provides a retirement plan, as Joe mentioned. If your company doesn't provide a retirement plan but your spouse's does - then the AGI phase-out limit is $178K. If neither you nor your spouse (if you have one) is covered - then there's no AGI limit, and you can indeed make an IRA contribution before April 15th that would be attributed to the previous year and reduce your tax bill. Note that \"\"provides\"\" means the plan is available, even if you don't participate in it, any time during the year.\"",
"title": ""
},
{
"docid": "f29a644d1a0a8785cb737fae08da6f69",
"text": "\"What kind of \"\"deductions\"\" are you talking about? Many deductions, like the standard/itemized deductions, come after the AGI, and do not affect the AGI, so I don't see how this would make any difference. Maybe you are talking about deductions that come before the AGI? If you want to increase your AGI legitimately, here's a way: Every year, itemize deductions on your federal return, and over-withhold your state income tax (assuming your state has income tax) by a lot, and/or make voluntary extra payments to your state income tax. As a result, you will get a huge refund on your state taxes the following year. Then you will need to include this refund as income on line 10 of the federal return that year, which will be included in the AGI. (Of course, you will also be able to deduct a lot of state income tax paid every year in the federal itemized deductions, but those come after the AGI.)\"",
"title": ""
},
{
"docid": "e8fa467567be1b8c0dc0e2381ed95906",
"text": "While you are required to do so as others have said, it's actually in your interest to do so. In a recent article at GlobeInvestor, Tim Cestnick discusses the benefits of filing tax returns for teens. This situation may or may not apply to you but the message is the same. The main benefits are (1) create RRSP contribution room and (2) be eligible for GST/HST credits and other possible one-shot credits (think oil royalty surplus cheques in Alberta). Excerpt: You see, when Lincoln was 14, he filed a tax return and reported $2,000 of income that year. He paid no tax thanks to the basic personal tax credit, but he created $360 of RRSP contribution room that year. Beginning in 2003, Lincoln started working part-time in his father's business. His father agreed to pay him $6,000 each summer to work in the business, to help save money for university. Lincoln didn't pay any tax on the money he earned in those summers because his basic personal tax credit was always higher than his earnings. In addition, Lincoln added to his RRSP contribution room simply by filing a tax return each year.",
"title": ""
}
] |
fiqa
|
a1486b1c2ca90197d75c3163f1a323db
|
Fringe Benefits (Lodging) for single member S-Corp
|
[
{
"docid": "7cca131dc8bcd7fac95510ba74f6256a",
"text": "\"If you use \"\"a room or other separately identifiable space\"\" within your apartment exclusively for your business, then you might be able to recoup a fraction of your rent for that. Check the rules for home office at the IRS and adopt a consistent and well-documented approach. (I would pay your full rent out of your personal account, and then do an \"\"expense report\"\" for the portion that's legitimately business related, but that's not a unique approach.) Other than that, I agree with the answer by litteadv - You cannot reduce your tax by the full amount of your rent just by having the S Corp pay, and trying to do so is probably playing with fire. Generally speaking, don't comingle business and personal expenses like that.\"",
"title": ""
},
{
"docid": "6b07c8c63b17a5afc75afe5cdc98d3b8",
"text": "None whatsoever, no. Moreover, trying something like that would very likely trigger a full audit.",
"title": ""
}
] |
[
{
"docid": "fd9143655557589dc578094881a9b2bf",
"text": "Couple of points about being a consultant in the US: It sounds like the rules for what you can deduct may be more lax in Italy. For example, you can deduct a certain percentage of your home for work but the rules are relatively strict on your use of that space and how much is deductible. Also things like clothes, restaurants, phones, car use, etc must follow IRS guidelines to be deductible. This often means they are used exclusively for work and are required for work. A meal you eat by yourself is not generally deductible, for example. Any expense you would have had anyway if you were not working is generally not deductible. A contractor in the US can organize in various ways, including sole proprietorship, an S-corp, and a C-corp. Each has different tax and regulatory implications. In the simple case of a sole proprietorship, one must pay not only regular income tax but also self-employment tax, which is the part of social security and medicare tax normally paid for by one's employer. Estimated taxes must be paid to the government quarterly and then the actual amount due synced up at the end of the year (with the government sending you the difference or vice versa). Generally speaking contractors may set aside more money pre-tax for retirement and have better investment options. This is because solo 401(k) retirement accounts are cost-effective and flexible and the contractor can set aside the full $18K pre-tax as well as having the company contribute generously (pre-tax) to the retirement account. Contractors can also easily employ spouses and set aside even more. The details of how frequently you are paid as a contractor and how much notice (if any) the company must give you before terminating your relationship are negotiated between you and the company and are generally pretty flexible. You could get paid your whole year salary in a lump sum if you wanted. The company that is paying you will not normally give you any benefits whatsoever...in this way it is the same situation as it is in Italy. By the way the three points you mention in your edit are definitely not true in the US.",
"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": "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": "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": "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": ""
},
{
"docid": "51ad976b1e5d211f36c818bfef24e2a1",
"text": "Is there any precedent for companies trading on their own insider information for the benefit of stockholders? Said another way, if a company were to enter a new market where they were very confident of their ability to steamroll a public competitor, could they use a wholly-owned special-purpose investment vehicle to short that competitor in order to juice the benefit of that move?",
"title": ""
},
{
"docid": "c4fe313697ab1f1eda3dfb44d0d27106",
"text": "Yes. Instead of paying a cash dividend to shareholders, the company grants existing shareholders new shares at a previously determined price. I'm sorry, but scrip issues are free (for all ordinary shareholders) and are in proportion to existing share holding. No payment is required from shareholders. So instead of having 10 $1 shares, the shareholder (if accepts) now could have 20 50p shares, if it was a one-for-one scrip issue.",
"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": "17567bfba349e7d795986a3fd177a416",
"text": "Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans. You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site: S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation distributions. Although, as an S corporation shareholder, you receive distributions similar to distributions that a partner receives from a partnership, your shareholder distributions aren’t earned income for retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you also can’t establish a self-employed retirement plan for yourself solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp. I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B. The limitations are in place for the two different types of contributions: Elective deferrals and Employer nonelective contributions. I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000. Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP. Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help.",
"title": ""
},
{
"docid": "fb414b1e79d8fdd778db07757e7e593d",
"text": "If this activity were to generate let's say 100K of profit, and the other corporate activities also generate 100K of revenue, are there any issues tax-wise I need to be concerned about? Yes. Having 25% or more of passive income in 3 consecutive years will invalidate your S-Corp status and you'll revert to C-Corp. Can I deduct normal business expenses from the straddles (which are taxed as short term capital gains) profit? I don't believe you can. You can deduct investment expenses from the investment income. On your individual tax return it will balance out, but you cannot mix types of income/expense on the corporate return or K-1.",
"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": "fcaf54599e1643faabf88cf789396fb3",
"text": "I guess you are making quite a bit of assumptions without clarifying what you are trying to achieve. As a non-resident you cannot incorporate a sole proprietorship in Singapore. You have to be citizen. Alternatively you can register a company that has its own norms like minimum number of directors and some being Singapore national, etc. As you are paying dividend and not salary to yourself, the company will be required to pay taxes on gains. So all consulting money is gain as there is no expense. The balance when you transfer to Spain would potentially get taxed as income to you subject to DTAA",
"title": ""
},
{
"docid": "4bf9c168d813c28cba490998fef20d5e",
"text": "\"Be careful of the other answers here. Many are wrong or partially wrong. The question implies that you knew this, but for everyone else's benefit, you can keep you LLC organization and still elect to be treated as a S-Corp by the IRS just for tax purposes. You do this by filing Form 2553 with the IRS. (You can also, by the way, elect to be taxed as a \"\"regular\"\" C-Corp if you want, although that's probably not advantageous. See Form 8832.) The advantage of electing to be treated as an S-Corp is that income beyond what constitutes a \"\"reasonable salary\"\" are not subject to social security and medicare taxes as they would when paid was wages or counted as self-employment income on Schedule C. Depending on what you need to pay yourself to meet the \"\"reasonable salary\"\" test, your overall income, and other factors about your business, this could result in tax savings. Contrary to other answers here, making this election will not force you to create a board of directors. You are still an LLC for all purposes except taxes, so whatever requirements you had in organization and governance at the state level will not change. You will have to file a \"\"corporate\"\" tax return on Form 1120S (and likely some corresponding state tax form), so that is additional paperwork, but this \"\"corporate\"\" return does not mean the S-Corp pays taxes itself. With a couple of exceptions, the S-Corp pays no taxes directly (and therefore does not pay at the corporate tax rate). Instead the S-Corp apportions its income, expenses, and deductions to the owner(s) on Schedule K. The owners get their portion reported from the S-Corp on Schedule K1 and then include that on their personal Form 1040 to pay tax at their personal rate. In addition to filing Form 1120S, you will have to handle payroll taxes, which will create some additional administrative work and/or cost. Using a payroll service for this will likely be your best option and not terribly expensive. You've also got the issue of determining your reasonable salary within the rules, which is the subject of other questions on this site and other IRS guidance.\"",
"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": "9aeb6ea330ab89ab7f767e72d9ee2209",
"text": "I was hesitant to answer this question since I don't own MLP even though I'm aware of how they work. But hear crickets on this question, so here goes. I'll try to keep this as non technical as possible. MLPs are partnerships where a shareholder is a partner and liable for the partnership's taxes. MLPs don't pay corporate tax since the tax burden flows to you, the shareholder. So does that mean like a partnership the partners are liable for the company's actions? Technically, yes. Has it happened before? No. Of course there are limitations to the liability, but are not definitely shielded in a way normal shareholders are. MLPs issue a K-1 at the beginning of the year (feb/mar). The tax calculations are relatively complex and I'm not going to go over that in this post. Generally MLPs are a bad choice for tax-deferred accounts like IRAs since there are tax implications beyond certain limits of distribution (yes even out of an IRA you'll have to pay taxes if above the limit). Not all types of businesses can become MLPs (hey no corporate tax, let's form an MLP!) Only companies engaged in businesses related to real estate, commodities or natural resources can become MLPs. There are a number of MLPs out there. The largest is Kinder Morgan Energy Partners. Hope this helps!",
"title": ""
}
] |
fiqa
|
1b16e6c6d56608b803ccac437922b2d8
|
How to “pay” one self in a single member LLC w/ separate checking account?
|
[
{
"docid": "b2635248cd6f4a5ad54e321d27fcb3d6",
"text": "\"Basically, yes. Don't use your business account for personal spending because it may invalidate your limited liability protection. Transfer a chunk of money to your personal account, write it down in your books as \"\"distribution\"\" (or something similar), and use it in whatever way you want from your personal account. The IRS doesn't care per se, but mixing personal and business expenses will cause troubles if you're audited because you'll have problems distinguishing one from another. You should be using some accounting software to make sure you track your expenses and distributions correctly. It will make it easier for you to prepare reports for yourself and your tax preparer, and also track distributions and expenses. I suggest GnuCash, I find it highly effective for a small business with not so many transactions (if you have a lot of transactions, then maybe QuickBooks would be more appropriate).\"",
"title": ""
}
] |
[
{
"docid": "6ef75666739cf6561ccfe0c9579f9562",
"text": "Yes, you can do this. I do this for my own single-member LLC, but I usually do it online instead of writing a check. Your only legal obligation is to pay quarterly estimated tax payments to the IRS. I'm assuming you are not otherwise doing anything shady. For example, that you have funds in your business account to pay any expenses that will be due soon or that you are trying to somehow pull a fast one on someone else...",
"title": ""
},
{
"docid": "04b3f704a8ebfdd049ca8774d1e03bd8",
"text": "If you have a one-time event, you are allowed to make a single estimated payment for that quarter on Form 1040-ES. People seem to fear that if they make one such payment they will need to do it forevermore, and that is not true. The IRS instructions do kind of read that way, but that's because most people who make estimated payment do so because of some repeating circumstance like being self-employed. In addition, you may qualify for one or more waivers on a potential underpayment penalty when you file your Form 1040 even if you don't make an estimated payment, and you may reduce or eliminate any penalty by annualizing your income - which is to say breaking it down by quarter rather than the full year. Check on the instructions for Form 2210 for more detail, including Schedule AI for annualizing income. This is some work, but it might be worthwhile depending on your situation. https://www.irs.gov/instructions/i2210/ch02.html",
"title": ""
},
{
"docid": "8ee2f604bae71690b9dd02f5ebd3c2a0",
"text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"",
"title": ""
},
{
"docid": "2227a351ed40c57f447a08a9c43166a7",
"text": "Yes, it's a good idea to have a separate business account for your business because it makes accounting and bookkeeping that much easier. You can open a business checking account and there will be various options for types of accounts and fees. You may or may not want an overdraft account, for example, or a separate business credit card just so you can more easily separate those expenses from your personal cards. When I started my business, I opened a business checking account and met with my banker every year just to show them how the business was doing and to keep the relationship going. Eventually, when I wanted to establish a business line of credit, it was easier to set up because I they were already familiar with my business, its revenue, and needs for a line of credit. You can set up a solo 401k with your bank, too, and they'll be very happy to do so, but I recommend shopping around for options. I've found that the dedicated investment firms (Schwab, Fidelity, etc.) tend to have better options, fees, and features for investment accounts. Just because a specific bank handles your checking account doesn't mean you need to use that bank for everything. Lastly, I use completely different banks for my personal life and for my business. Maybe I'm paranoid, but I just don't want all my finances in the same place for both privacy reasons and to avoid having all my eggs in the same basket. Just something to consider -- I don't really have a completely sane reason for using completely different banks, but it helps me sleep.",
"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": "3c9b91c35eb318ee1c0c35dfe4d2df3d",
"text": "If you're a sole proprietor there's no reason to have a separate business account, as long as you keep adequate records, as you are one and the same for tax purposes. My husband and I already have 5 accounts and a mortgage with one bank. I don't see the need to open up yet another account. As a contracted accountant, I don't need to write business checks, and my expenses are minimal. As long as I have an present my assumed business name certificate and ID, there's no reason for a bank not to deposit into my personal account.",
"title": ""
},
{
"docid": "acaf0037dbf1ceb8761d571c06a645fe",
"text": "There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go.",
"title": ""
},
{
"docid": "079c39dba5751844b335fed9f937a091",
"text": "SurePay is not designed to send money from one person to himself. It is designed to transfer money from one person to someone else. What SurePay does, is allow you to link an account to a name/email/phone number. Then, when someone else, who's also linked an account to a name/email/phone number, selects your name/email/phone number to send money to, the money is transferred. This doesn't buy you anything when transferring money to another of your own accounts. I won't say it's impossible to use SurePay to do so, but it's definitely not designed to do so, and may not be permitted. If you could use it for that purpose, you would have to separately register your two accounts, using a separate email for each, and then use the first email to send to the second email; each will have been tied to a different account, so you'll know which is which. My suggestion would be to follow Wells Fargo's instructions here: Can I transfer funds to or from my accounts at another institution? You can transfer money between your Wells Fargo checking and savings accounts and accounts you may have at other U.S. financial institutions. Wells Fargo gives you greater flexibility, convenience, and control to transfer funds where and when you need it. Sign on to Wells Fargo Online and click the Transfers tab to learn more about transferring funds to your account at another financial institution. As that should give you the official answer, at least.",
"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": "05575c7ecd138f1d959b8ffd50b5d3d2",
"text": "I have researched this question extensively in previous years as we have notoriously high taxes in California, while neighboring a state that has zero corporate income tax and personal income tax. Many have attempted pull a fast one on the California taxation authorities, the Franchise Tax Board, by incorporating in Nevada or attempting to declare full-year residence in the Silver State. This is basically just asking for an audit, however. California religiously examines taxpayers with any evidence of having presence in California. If they deem you to be a resident in California, and they likely will based on the fact that you live in California (physical presence), you will be subject to taxation on your worldwide income. You could incorporate in Nevada or Bangladesh, and California will still levy its taxation on any business income (Single Member LLCs are disregarded as separate corporate entities, but still taxed at ordinary income rates on the personal income tax basis). To make things worse, if California examines your Single Member LLC and finds that it is doing business in California, based on the fact that its sole owner is based in California all year long, you could feasibly end up with additional penalties for having neglected to file your LLC in California (California LLCs are considered domestic, and only file in California unless they wish to do business in other states; Nevada LLCs are considered foreign to California, requiring the owner to file a domestic LLC organization in Nevada and then a foreign LLC organization in California, which still gets hit with the minimum $800 franchise fee because it is a foreign LLC doing business in California). Evading any filing responsibility in California is not advisable. FTB consistently researches LLCs, S-Corporations and the like to determine whether they've been organized out-of-state but still principally operated in California, thus having a tax nexus with California and the subsequent requirement to be filed in California and taxed by California. No one likes paying taxes, and no one wants to get hit with franchise fees, especially when one is starting a new venture and that minimum $800 assessment seems excessive (in other words, you could have a company that earns nothing, zero, zip, nada, and still has to pay the $800 minimum fee), but the consequences of shirking tax laws and filing requirements will make the franchise fee seem trivial in comparison. If you're committed to living in California and desire to organize an LLC or S-Corp, you must file with the state of California, either as a domestic corporation/LLC or foreign corporation/LLC doing business in California. The only alternatives are being a sole proprietor (unincorporated), or leaving the state of California altogether. Not what you wanted to hear I'm sure, but that's the law.",
"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": "057b35fdb4e173c7a329dcd6da86e19a",
"text": "\"The account you are looking for is called a \"\"Positive Pay\"\" account. It generally is only for business accounts, you provide a list of check numbers and amounts, and they are cross-referenced for clearing. It normally has a hefty monthly fee due to the extra labor involved.\"",
"title": ""
},
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "666e66f3e96edf4d68d164114e727b66",
"text": "I have a very similar situation doing side IT projects. I set up an LLC for the business, created a separate bank account, and track things separately. I then pay myself from the LLC bank account based on my hours for the consulting job. (I keep a percentage in the LLC account to pay for expenses.) I used to do my taxes myself, but when I created this arrangement, I started having an accountant do them. An LLC will not affect your tax status, but it will protect you from liability and make things more accountable come tax time.",
"title": ""
},
{
"docid": "d209a5d245c3051134b821bb1c03f58c",
"text": "1 Primary acct. Receive and distribute money to all other accts. For security do not permit debit cards to touch or payment pull from this account. All joint bills paid here. Attach a savings acct and credit card to this account for accruing taxes vacation money blah blah. This will facilitate managing instead of storing your funds. 2 Push distributions to one or two other individual accounts on whatever basis works. Cash groceries incidentals. Debit cards here.",
"title": ""
}
] |
fiqa
|
6be267da380e2c224e58df128c4bd8e2
|
Earnings Calendar Fiscal Quarter Ending
|
[
{
"docid": "3f591963899eb4a32562e19cb18bcc65",
"text": "\"Why do stock markets allow these differences in reporting? The IRS allows businesses to use fiscal calendars that differ from the calendar year. There are a number of reasons a company would choose do this, from preferring to avoid an accounting rush at end of year during holiday season, to aligning with seasonality for their profits (some like to have Q4 as the strongest quarter). Smaller businesses may prefer to keep the extra stress of year end closeout to a traditionally slower time for the business, and some just start their fiscal calendar when the company starts up. You'll notice the report dates are a couple weeks after fiscal quarter end, you would read it as \"\"three months ended...,\"\" so for Agilent, three months ended October 31, 2017, so August, September, October are their Q4 months.\"",
"title": ""
}
] |
[
{
"docid": "5d7fd2ab75b51e221d3095eeb756341c",
"text": "So for quarters So, if Q1's value was 10 and Q2's value was 25 For closing or opening prices, I would use closing prices. For instance, some used Adjusted Close or Close on Yahoo Finance (see this example of AAPL). Added Note: In your example, for your example, you'll want to take the absolute value of the denominator (aka: divisor), so an Excel formula might look like the below example ... ... where the new and old are cells.",
"title": ""
},
{
"docid": "de3465af8fb591518d665a2084219520",
"text": "One's paycheck typically has a YTD (year to date) number that will end on the latest check of the year. I am paid bi-weekly, and my first 2012 check was for work 12/25 - 1/7. So, for my own balance sheet, brokerage statements and stock valuations end 12/31, but my pay ended 12/24. And then a new sheet starts.",
"title": ""
},
{
"docid": "35124c3aee792df13fe3a69a181155f4",
"text": "\"Here is where I am confused. On the income statement I am looking at it has a line item in cogs that is \"\"change in jobs in progress\"\". Change in JIP = (Starting raw materials, wip, and finished goods) - (Ending raw materials, wip, and finished goods) for the accounting period. From what I researched cost of goods manufactured is added to cogs: \"\"The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory. A manufacturer's cost of goods sold is computed by adding the finished goods inventory at the beginning of the period to the cost of goods manufactured and then subtracting the finished goods inventory at the end of the period.\"\" So it isnt wip that is in the income statement it is change in inventory. Why do they include the \"\"change of inventory\"\" in cogs? Wont this just be material and labor that should be in for the next accounting period cog calculation?\"",
"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": "04468a78b190230604ded783ba3cbc6c",
"text": "There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet. If you operate on an accrual basis, then the income accrues to you the day you perform the service and not on the day you bill the client. You can make four equal payments of estimated tax on the due dates, and if these (together with any income tax withholding from wage-paying jobs) are at least 90% of your tax liability for that year, then you owe no penalties for underpayment of tax regardless of how your income varied over the year. If your income does vary considerably over the year (even for people who only have wages but who invest in mutual funds, the income can vary quite a bit since mutual funds typically declare dividends and capital gains in December), then you can pay different amounts in each quarterly installment of estimated tax. This is called the annualization method (a part of Form 2210 that is best avoided unless you really need to use it). Your annualized income for the payment due on June 15 is 2.4 = 12/5 times your taxable income through May 31. Thus, on Form 2210, you are allowed to assume that your average monthly taxable income through May 31 will continue for the rest of the year. You then compute the tax due on that annualized income and you are supposed to have paid at least 45% of that amount by June 15. Similarly for September 15 for which you look at income through August 31, you use a multiplier of 1.5 = 12/8 and need to pay 67.5% of the tax on the annualized income, and so on. If you miscalculate these numbers and pay too little tax in any installment, then you owe penalties for that quarter. Most people find that guesstimating the tax due for the entire year and paying it in equal installments is simpler than keeping track of nuances of the annualized method. Even simpler is to pay 100% of last year's tax in four equal installments (110% for high earners) and then no penalty is due at all. If your business is really taking off and your income is going to be substantially higher in one year, then this 100%/110% of last year's tax deal could allow you to postpone a significant chunk of your tax bill till April 15.",
"title": ""
},
{
"docid": "8b27a63bdb0730b88a8c021fafa174de",
"text": "Both US GAAP and IFRS are accrual basis frameworks. 99.9% of businesses report under those frameworks (or their local gaaps, but still accrual based). Usually it's public sector entities which are cash-basis in my experience. Anyway, accrual basis has more to do with revenue recognition, not taxation, so that's not really relevant here. The value date of an invoice (ie in which moment it becomes taxable) depends on tax legislation (which sets the rules to determine the so called date of taxable event), not so much on accounting principles. In many cases taxable rules are intertwined with cash collection/payment, however, to prevent creative accounting for tax evasion purposes. For example, provisions for various uncertain future events might be required by accounting rules, but the corresponding expenses are generally not deductible for tax purposes (so you won't be able to deduct them until the event actually occurs and you pay).",
"title": ""
},
{
"docid": "9b53d8cfbac1038571e8e1e2069446af",
"text": "There are several questions to answer before help can be given. How much revenue did you have this year? What is expected revenue growth for next few years? Are you operating as a sole proprietor, partnership or corporation? If a corporation did you maintain your books on the cash basis or accrual? I recommend you seek a CPA not a bookkeeper. And, don't wait until end of year to fund one.",
"title": ""
},
{
"docid": "2f73770a2da33ab40245475e5bc5ee82",
"text": "\"You may want, or at least be thinking of, the annualized method described in Pub 505 http://www.irs.gov/publications/p505/ch02.html#en_US_2015_publink1000194669 (also downloadable in PDF) and referred to in Why are estimated taxes due \"\"early\"\" for the 2nd and 3rd quarters only? . This doesn't prorate your payments as such; instead you use your income and deductions etc for each of the 3,2,3,4-month \"\"quarters\"\" to compute a prorated tax for the partial year, and pay the excess over the amount already paid. If your income etc amounts are (nearly) the same each month, then this computation will result in payments that are 3,2,3,4/12ths of 90% of your whole-year tax, but not if your amounts vary over the year. If you do use this method (and benefit from it) you MUST file form 2210 schedule AI with your return next filing season to demonstrate that your quarterly computations, and payments, met the requirements. You need to keep good per-period (or per-month) records of all tax-relevant amounts, and don't even try to do this form by hand, it'll drive you nuts; use software or a professional preparer (who also uses software), but I'd expect someone in your situation probably needs to do one of those anyway. But partnership puts a wrinkle on this. As a partner, your taxable income and expense is not necessarily the cash you receive or pay; it is your allocated share of the partnership's income and expenses, whether or not they are distributed to you. A partnership to operate a business (like lawyers, as opposed to an investment partnership) probably distributes the allocated amounts, at least approximately, rather than holding them in the partnership; I expect this is your year-end draw (technically a draw can be any allowed amount, not necessarily the allocated amount). In other words, your husband does earn this money during the year, he just receives it at the end. If the year-end distribution (or allocation if different) is significant (say more than 5% of your total income) and the partnership is not tracking and reporting these amounts (promptly!) for the IRS quarters -- and I suspect that's what they were telling you \"\"affects other partners\"\" -- you won't have the data to correctly compute your \"\"quarterly\"\" taxes, and may thus subject yourself to penalty for not timely paying enough. If the amount is reasonably predictable you can probably get away with using a conservative (high-side) guess to compute your payments, and then divide the actual full-year amounts on your K-1 over 12 months for 2210-AI; this won't be exactly correct, but unless the partnership business is highly seasonal or volatile it will be close enough the IRS won't waste its time on you. PS- the \"\"quarters\"\" are much closer to 13,9,13,17 weeks. But it's months that matter.\"",
"title": ""
},
{
"docid": "5f5d0b22cf78bf5aa71207de175bdba3",
"text": "Companies typically release their earnings before the market opens, and then later host an analyst/investor conference call to discuss the results. Here's a link to an interesting article abstract on the subject: Disclosure Rules For Earnings Releases And Calls | Bowne Digest. Excerpt: In the aftermath of the Sarbanes-Oxley Act, the SEC changed regulations to bring quarterly earnings announcements in line with the generally heightened sensitivity to adequate disclosure. New regulations required that issuers file or furnish their earnings press releases on Form 8-K and conduct any related oral presentations promptly thereafter, to avoid a second 8-K. [...] Sample from a news release by The Coca Cola Company: ATLANTA, September 30, 2009 - The Coca-Cola Company will release third quarter and year-to-date 2009 financial results on Tuesday, October 20, before the stock market opens. The Company will host an investor conference call at 9:30 a.m. ( EDT ), on October 20. [...] Sample from a news release by Apple, Inc.: CUPERTINO, California—January 21, 2009—Apple® today announced financial results for its fiscal 2009 first quarter ended December 27, 2008. The Company posted record revenue of [...] Apple will provide live streaming of its Q1 2009 financial results conference call utilizing QuickTime®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at [...]",
"title": ""
},
{
"docid": "738c48a8d03569e6abeebbf24f617c67",
"text": "* 2007 Accountant communicate with bosses about the ethical problem and possible illegal practices * Next years, Accountant work in complicated work environment ending with superiors retaliated against him for speaking out * 2012 Accountant hand over to IRS, and OSHA, a 137 pages of document proving how Cat swift billions in profit to Switzerland to avoid U.S. taxes * 2012 Accountant quits company * 2013 IRS concluded on abusive tax and demanded $ 2 billion * 2014 a U.S. Senate investigative committee, grilled executives and concluded the company had avoided taxes on more than $8 billion in revenue. * February 2017, “I love Caterpillar,” President Orange Donald Clown says. * March , 2017, the IRS, Department of Commerce, and Federal Deposit Insurance Corp. raid Caterpillar headquarters, warehouses and datacenter. * IRS standards payment is 15% to 30% of what it collects.",
"title": ""
},
{
"docid": "ca8376b3a0efedcb0554d82b6e895514",
"text": "Every class my Finance Prof writes a number on the board, I have no idea what it is other than it is related to the field of Finance. But I have it on good authority that it will be a bonus question on the final exam to find out what it is. Date | # Written ---|--- Oct. 12 | 13 Oct. 17 | 15 Oct. 19| 15 Oct. 24 | 15 Oct. 26 | 15 Nov. 2 | 11 If anyone knows please help a brother out. Dates are North American.",
"title": ""
},
{
"docid": "ebd7b8b4d4c3a2ee667131466eae36f4",
"text": "I second @DumbCoder, every company seems to have its own way of displaying the next dividend date and the actual dividend. I keep track of this information and try my best to make it available for free through my little iphone web app here http://divies.nazabe.com",
"title": ""
},
{
"docid": "481b8423ba7e31615b1775bafe7d3029",
"text": "I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!",
"title": ""
},
{
"docid": "57fb897c059fe117bf76781c5306adb8",
"text": "\"Thanks for the response. I am using WRDS database and we are currently filtering through various variables like operating income, free cash flow etc. Main issue right now is that the database seems to only go up to 2015...is there a similar database that has 2016 info? filtering out the \"\"recent equity issuance or M&A activity exceeding 10% of total assets\"\" is another story, namely, how can I identify M&A activity? I suppose we can filter it with algorithm stating if company's equity suddenly jumps 10% or more, it get's flagged\"",
"title": ""
},
{
"docid": "6ac32be0cbf98c69d5b81fc6ed9aab89",
"text": "Any accounting software should be able to handle this. When you invoice them, set the invoice date to the date of the event. Then receive a partial payment against that invoice. This will cause your accounting software to display the service income in the correct period as well. So if you sent them invoice for August 7, 2014 event on May 5th, 2014 and they gave you $500 due, you would see this Income in August ($500 on Cash basis, $1000 on Accrual basis. When you received the other $500 in August, you would see $1000 for both methods). You would not see any income in May, when you created the invoice. This is better for revenue matching with the correct period. When you send them same invoice (say 30 days before the event), Set the software to show payments already received (it seems that most online accounting software will do this by default). Here is an example in Freshbooks. Here is an example in Xero: Seems they both display information on when you can expect payment on the their respective dashboards. In the Desktop version of Quickbooks (which I use a lot), it will not show the balance of the customer by default on an invoice. You will have to modify the invoice template. There are more details on that here. In Desktop version of Quickbooks, you can look at Cash Flow Forecast report to see the expected amount coming in. I hope that helps and good luck.",
"title": ""
}
] |
fiqa
|
4c952866bbe4f43374cfaa1dd67df316
|
US Tax Form 1040EZ: Do I enter ALL income or ONLY income specified in W-2 forms?
|
[
{
"docid": "734867313a623f2f57edf5c18acbae18",
"text": "Yes, you need to include income from your freelance work on your tax return. In the eyes of the IRS, this is self-employment income from your sole-proprietorship business. The reason you don't see it mentioned in the 1040EZ instructions is that you can't use the 1040EZ form if you have self-employment income. You'll need to use the full 1040 form. Your business income and expenses will be reported on a Schedule C or Schedule C-EZ, and the result will end up on Line 12 of the 1040. Take a look at the requirements at the top of the C-EZ form; you probably meet them and can use it instead of the more complicated C form. If you have any deductible business expenses related to your freelance business, this would be done on Schedule C or C-EZ. If your freelance income was more than $400, you'll also need to pay self-employment tax. To do this, you file Schedule SE, and the tax from that schedule lands on form 1040 Line 57.",
"title": ""
}
] |
[
{
"docid": "054d1fd715f86a9e2710a4654ea243ee",
"text": "Your phrasing of the question isn't very clear, but I believe you're asking: Does our total household income classify us as tax exempt? Or, can we avoid filing taxes if we make $22,500 or less per year? The answer is no. Your tax liability will be very low, and if you have dependents or other deductible expenses (mortgage interest, 401K contributions, etc.), you're likely looking at a close to $0 liability. You still have to file your taxes, and you can't claim exempt on your W-4. Even if you did qualify to be tax exempt, you still have to file taxes.",
"title": ""
},
{
"docid": "c395dbb89260fe3992e496bf812cbc00",
"text": "Why was I sent both 1042-S and 1099. Which amount is the right amount that has been withheld. Generally, each tax form you get will be about a separate income; for instance, you might get a 1099-DIV for dividends you earned from an investment and then a 1099-B for the profit or loss on selling that investment, in which case you'd report them both to the IRS. In this case, you've also had money withheld as a non-resident alien, which is why you've been issued a 1042-S. So you need to report both amounts to the IRS.",
"title": ""
},
{
"docid": "f4021470e9744035b9be7907ab4e587a",
"text": "The IRS no longer requires that employers submit all W4 forms, but they can request a W4 for an employee at any time, and putting false information on your W4 is still a punishable offense. I agree that having a return is like giving the Treasury Department an interest-free loan for the year, but unfortunately paying the appropriate amount of withholding tax is required. There is some ambiguous information regarding an employer adjusting the amount of withholding, but it seems to mean that they can withhold more than the estimated rate, but never less than what is calculated using the deductions on your W4. See the link for more details: IRS Tax Withholding",
"title": ""
},
{
"docid": "711dbe2c6832a30372b7cc32b7c8b3ca",
"text": "Unfortunately, if your taxes are too complicated for the 1040EZ form, then your tax situation is effectively unique and you need to try both options and see for yourself which one is better. If you do your taxes yourself, you may be more likely to do a more thorough job in digging everything up. You might even find that you can deduct some things that you hadn't thought of before. On the other hand, whenever I've gone to a tax professional, it's always been pretty much an all-or-nothing proposal. You sit down with them and hand them your records, they ask a couple simple questions, and they either give you your completed tax return on-the-spot or they have you come back in a week for a brief review of the final numbers. If they don't prepare your return on-the-spot, you can usually send additional items later on if you think of something that you forgot the first time around, but for the most part it's still a one-time shot. That said, I'm beginning to think the difference in monetary cost of completing even a mildly complex tax return is going to be insignificant, and the main factors to consider are the value of your own time and how much of the tax code you want to learn (because, in my experience, the software always refers to additional IRS forms or codes that are not automated in the software). In theory, your tax return should be the same regardless of whether you have a tax professional do your taxes or, if you do them yourself, which software you use. Given the same inputs, you should get about the same outputs. Even though that theory doesn't always hold exactly true, all the options should get you in the same ballpark--close enough that it doesn't make much difference in the grand scheme of things, unless your tax return is done incorrectly (e.g., you choose the wrong filing status or forget to take a major deduction). Suppose you're married and you or your spouse is a partner in an LLC. Maybe a tax professional wants to charge you $500 for your tax return (this will vary based on your circumstances). You could alternatively buy the tax software for $40-$300 and spend 20+ hours navigating through the interviews and reviewing tax codes for the decisions and worksheets that are not automated in the software. Depending on how much time you personally have to spend on the tax return, one option might be better than the other. Maybe you have to pay your in-house accounting person to use the tax software, or you have to pay an employee to cover for you while you use the software. Keep in mind that the tax professional and the tax software are probably deductible, whereas your time may not be. In the end, even if you save money up front, it might be a wash on the following year's tax return, especially after you consider the uncompensated time that you could have spent with your family, on your business.",
"title": ""
},
{
"docid": "8f5439eccba9927dbad2c3edb01e31dd",
"text": "Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return.",
"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": "e468951d2762615d46c8acc2c2e2ffd8",
"text": "Someone messed up here. My tax accountant says she is supposed to enter the values as they are on the W2 and CompanyB said they will not issue a new W2 because they were not involved in the refund of the money. Correct. We decided that we will enter a value different from 12b-d, subtract the money that was refunded to me because it's already on the 1099. Incorrect. Is there an alternative to avoid paying taxes twice on the 401k overages? If not, is there a better way to do this to minimize the risk of an audit? You should enter the amounts in W2 as they are. Otherwise things won't tie at the IRS and they will come back asking questions. The amount in box 12-D was deducted from your wages pre-tax, so you didn't pay tax on it. The distribution is taxable, and if it was made before the tax day next year - only taxable once. So if you withdrew the same year of the contribution, as it sounds like you did, you will only pay tax on it once because the amounts were not included in your salary. If the 1099-R is marked with the correct code, the IRS will be able to match the excess contribution (box 12-D) and the removal of the excess contribution (1099-R with the code) and it will all tie, no-one will audit you. The accountant is probably clueless as to how her software works. By default, the accounting software will add the excess contribution on W2 box 12-D back into wages, and it will be added to taxable income on your tax return. However, when you type in the 1099 with the proper code, this should be reversed by the software, and if it is not - should be manually overridden. This should be done at the adjustment entry, not the W2 entry screen, since a copy of the W2 will be transmitted with your tax return and should match the actual W2 transmitted by your employer. If she doesn't know what she's doing, find someone who does.",
"title": ""
},
{
"docid": "69544397471ef5cae6bd7a87612b501f",
"text": "The company match is not earnings. My company deposits 5% of my income into my 401(k) and it appears nowhere except on the paperwork for the 401(k). To be clear, it doesn't appear on any paystub or W2.",
"title": ""
},
{
"docid": "acc343e3f8b327a4ea13ba9a21c8bb90",
"text": "Since you worked as an RA, the university should send you a W2 form. The taxable wages line in that form would be the sum of both the direct salary and employer paid benefits that are taxable. As such you should not need to do anything than enter the numbers that they provide you.",
"title": ""
},
{
"docid": "046c3a367b30527c5d320c397e8de7c7",
"text": "If you are in the US and a regular employee, this will have to show up on your year-end W2 form as income. If it doesn't, there is some funky accounting business going and you should probably consult a professional for advice.",
"title": ""
},
{
"docid": "e69ee98964f1df5d5bb017631a4b4bad",
"text": "Here are the lists for the tax forms that Deluxe and Premier include. I think you'll be fine with Deluxe because it sounds like all you need is the Schedule D/8949 forms. Deluxe actually includes most investment related forms.",
"title": ""
},
{
"docid": "a886ceef7a2b1df5dea7661dbe307641",
"text": "If your dad would have won money on the slot machines(And the amount was high), the casino would have given him a W2G to fill out right there and taxes would have been deducted. However, table games including Poker does not have any such rule. You will have to account for your winnings(And losses) at the end of the year. So, it is ok if you sign that paper, as you do not owe the IRS any money yet. You will still need to file your taxes as a non resident alien at the end of the year and attach the form W2G with it and pay your dues.",
"title": ""
},
{
"docid": "001777fad85611bd1aebbaf3796d70df",
"text": "To clarify that legality of this (for those that question it), this is directly from IRS Publication 926 (2014) (for household employees): If you prefer to pay your employee's social security and Medicare taxes from your own funds, do not withhold them from your employee's wages. The social security and Medicare taxes you pay to cover your employee's share must be included in the employee's wages for income tax purposes. However, they are not counted as social security and Medicare wages or as federal unemployment (FUTA) wages. I am sorry this does not answer your question entirely, but it does verify that you can do this. UPDATE: I have finally found a direct answer to your question! I found it here: http://www.irs.gov/instructions/i1040sh/ar01.html Form W-2 and Form W-3 If you file one or more Forms W-2, you must also file Form W-3. You must report both cash and noncash wages in box 1, as well as tips and other compensation. The completed Forms W-2 and W-3 in the example (in these instructions) show how the entries are made. For detailed information on preparing these forms, see the General Instructions for Forms W-2 and W-3. Employee's portion of taxes paid by employer. If you paid all of your employee's share of social security and Medicare taxes, without deducting the amounts from the employee's pay, the employee's wages are increased by the amount of that tax for income tax withholding purposes. Follow steps 1 through 3 below. (See the example in these instructions.) Enter the amounts you paid on your employee's behalf in boxes 4 and 6 (do not include your share of these taxes). Add the amounts in boxes 3, 4, and 6. (However, if box 5 is greater than box 3, then add the amounts in boxes 4, 5, and 6.) Enter the total in box 1.",
"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": "df72925f51029c060510200978db244d",
"text": "Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400. Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it.",
"title": ""
}
] |
fiqa
|
2fc68b5c097d9f043a54ed2870f04e93
|
Are there contracts for fixed pay vs. fixed pay rates?
|
[
{
"docid": "d5a2c50b5203029f48d9b4038438591b",
"text": "Yes. I have personally signed such contracts (fixed budget software development) and lost money every single time. And yes, it is quite possible for you to get paid under minimum wage if you take too long. Scope creep is the primary culprit for these kinds of contracts, so make sure you put together iron-clad explanations of what is and is not covered by the contract (and pad the asking price for good measure).",
"title": ""
},
{
"docid": "a49fc3ec7da74e005fa6637578970f66",
"text": "In general the other party will expect you to keep your promises. If you promise to do something for a fixed amount of money, you take on a risk and it is no longer their problem if you work slower than you planned. In principle it could even be the case that you take on a project and fail, after which the company may not have to pay at all. So regardless of how things should be written in your books (For example a theoretical pay above minimum wage but a loss for your private company): An important thing to note is that if you are worried about ending up below minimum wage, you are definitely asking a fee that is too low. You should keep in mind that your fee should include a fair compensation for the expected work, and a fair compensation for the risk that you have taken on.",
"title": ""
},
{
"docid": "6944f9c0b50e5048b10f8ec9bfc045df",
"text": "Software Contractors are not employees of the company that is procuring the software. Software Contractors necessarily work for another legal business entity. There is a business to business relationship between the procurer of the software and the entity producing the software. Therefore, the company procuring the software is not required to pay a minimum wage, or adhere to any other employment law. When any individual or company orders a software product and agrees to pay for it, that is a fixed priced contract. This happens millions of times a day. The amount of time taken to produce the software has no direct bearing on price. For instance, there is no minimum price for Microsoft Word based on the number of hours taken to produce it. Generally a Software Contractor will be a director and shareholder of a limited liability corporation. Directors are exempt from the standard protection offered under employment law. If the company producing the software was employing non-directors to produce the software, rather than sub-contracting to another business then employment law would apply.",
"title": ""
}
] |
[
{
"docid": "f5fac20924da0c47c46d22b313e9d0b3",
"text": "\"It's not \"\"the market\"\" deciding anything if you're forcing a business to pay someone an arbitrary amount that you declare to be a \"\"living wage\"\". Why do you believe that you get to interfere in a mutual agreement between two people? One guy goes to another and says \"\"hey wanna do this job for me for X dollars\"\" and the other guy says \"\"ok cool sounds good\"\" and here you are jumping in and saying \"\"nope, can't allow that, I have to stop you\"\"\"",
"title": ""
},
{
"docid": "74e554f4464d6e1d32033f8c6c94c8ce",
"text": "\"This is the best tl;dr I could make, [original](https://www.reuters.com/article/us-japan-economy-labour-analysis/japan-inc-turns-contract-workers-into-permanent-staff-as-labor-market-tightens-idUSKCN1BC3PJ) reduced by 88%. (I'm a bot) ***** > Last year, the average monthly pay for regular workers was 321,700 yen while for contract workers it was 211,800 yen, so a change in status can mean a big jump in pay plus benefits workers weren&#039;t previously receiving. > LABOR LAW REVISIONS. The trend is expected to accelerate toward April 2018 when a revised labor contract law starts forcing companies to provide permanent status for temporary workers who have served more than five years, if the workers request it. > The share of non-regular workers has almost doubled as companies saddled with excess capacity, debt and excess workers have replaced regular employees with cheaper contract workers. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6xgsde/japans_labor_market_is_getting_so_tight_that/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~202637 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*: **work**^#1 **employee**^#2 **year**^#3 **job**^#4 **contract**^#5\"",
"title": ""
},
{
"docid": "2b35780cda789898ec37a6d9718bbd5f",
"text": "I can only speak to natural gas but I imagine the answer for electricity is the same. In general, yes, it is better to lock into a fixed price contract as in the long run, natural gas prices increase over time. However, if you locked (signed a fixed price contract) in prior to the economic downturn, most likely you were better off not doing so but the key is long-term. http://en.wikipedia.org/wiki/Natural_gas_prices However, do your research as fixed priced contracts vary considerably from company to company. http://www.energyshop.com/ I think it's a good time to sign a fixed-term contract right now as I don't see prices coming down much further with global economies are now recovering from the downturn. HTH",
"title": ""
},
{
"docid": "09341e6010c64a265197ec01f49e1ee6",
"text": "As no one has mentioned them I will... The US Treasury issues at least two forms of bonds that tend to always pay some interest even when prevailing rates are zero or negative. The two that I know of are TIPS and I series bonds. Below are links to the descriptions of these bonds: http://www.treasurydirect.gov/indiv/research/indepth/tips/res_tips.htm http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm",
"title": ""
},
{
"docid": "67198b44a9ad25a8f823da4edc053c3f",
"text": "\"From some background reading I'm doing, it sounds like the union has people by the proverbial balls anyway. Even in an \"\"agency shop\"\", where union membership is optional, non members must pay for the collective bargaining done by the union, and \"\"union shop\"\" just means that the employer can hire anybody, but they must join the union in order to be employed. All of those seem to indicate that every worker in the represented class must accept the terms of the collective bargaining. [reference](http://en.wikipedia.org/wiki/Communications_Workers_of_America_v._Beck#Background) Part of the reason that I'm curious is that, once I've decided that I'm done being an engineer, I think it might be fun to teach, but every time I hear about union negotiations, it makes me think that operating in that system would be lame. Going from a world where merit is the primary differentiator to a world where years in the system count for more would kinda suck.\"",
"title": ""
},
{
"docid": "b746fa726e1723cb28bd6ebb60a627b5",
"text": "\"My answer has nothing to do with tax brackets or mathematics (I'm taking advantage of the leeway your question allowed), but rather it has to do with career goals and promotion. Large companies often have large \"\"Policies & Procedures\"\" booklets to go with them. One policy that sometimes exists which would make it a bad idea to accept a raise is: Employee cannot be given more than one salary increase in a 12-month period This means that if you accept a standard-of-living or merit increase of say, 2% or 3% in April, and then you apply for a job that would otherwise warrant a pay grade increase, you may be forced to wait until the following year to get bumped to the proper pay grade. Of course, this totally depends on the company, but it would be advisable to check your company's H.R. policy on that, if you're considering a move (even a lateral one) in the future.\"",
"title": ""
},
{
"docid": "4e50a9213f93bfadf3a5f331bed00199",
"text": "a 60k pay raise is totally possible (depending on too many factors to list (ok, fine I'm generalizing)) coming from TX to San Jose. the difference in raw pay numbers makes it emotionally hard to make rational comparisons. I once baked at a job on the east coast early I'm my career before I understood how to compare reasonably. anecdotal evidence shows it's possible because a machinist friend is moving here from Austin because he can make much more money. of course that's just an example.",
"title": ""
},
{
"docid": "5f803ab9782a2449162023ce51e03255",
"text": "Note too that being a contractor means that you will unavoidably have periods between contracts; you tend to be out of work more often than a salaried employee would. You need to set your rates so your average income, including those down times, adds up to a living wage including all those benefits that aren't being covered. If a company hires a contractor, they understand that this is part of the trade-off. They avoid making a long-term commitment when they don't have a long-term need, and they accept that this convenience may cost a bit more in the short term.",
"title": ""
},
{
"docid": "1f0b77539fde6780785caa9c608426fb",
"text": "The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck. Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest. More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more. Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal.",
"title": ""
},
{
"docid": "5a4130786450c04ffd206a2b40e28ac2",
"text": "If you are a temp-to-hire, or you are asked to setup a company then you are not an employee. They expect you to fund everything from your hourly rate. This includes pay, insurance, taxes, social security, sick, vacation, holidays... The rule of thumb for an established company is 1.75 to 2.25 times the salary rate is the rate they need to charge a customer. For example: employee get paid checks for $25/hour x 80 hours x 26 times a year.: 2080 hours or $52,000 per year. Company can only bill customers for 1800 to 1900 hours of labor. They need to bill at 2 times the salary rate or $50 per hour. They will collect $90,000 (1800*50). The numbers have to be run by the particular company based on their actual costs for benefits, overhead and profits. If they were giving you $25 an hour as a contractor. They expect you to be making $12.50 an hour as an employee.",
"title": ""
},
{
"docid": "f4544ee466a8913a296cb6bb79266d0a",
"text": "None of those things sounded like concessions. I suspect, if you negotiated health care in terms of percentage of the cost instead of in raw dollars deducted, it'd actually come out that the company was taking a hit since the last contract. (I have no numbers to back this up, it's just that health care costs have been skyrocketing the last few years.) Seniority rights kinda suck because they're just determined by time on the job and not merit. I'll take someone with 5 years in who's been getting better the whole time over someone with 20 who's been doing the negotiated minimum since the beginning. I'd like to be able to give the new people incentive to kick ass at their job. The thing I don't like about unions is that they take the individual out of the game. Solidarity leads to one-size-fits all thinking, which is also the kind of thinking that gets companies thinking that everybody is replaceable. Really, everybody'd be better off if good people were hard to replace and average people could get by, but not excel.",
"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": "3cf0a5724d02dbb1d92fe3db51804e3d",
"text": "\"When he wrote this I think there may have been greater interchangeability between workers, workers were perfectly competitive if you will. I find that there is huge wage growth, in certain industries and with certain skills. This only impacts a limited number of people, with the majority of workers in fields that are not heavily valued. Another avenue would be to look at the \"\"real\"\" wage. If wages are going up only 1-2%, but inflation was at negative 3-4%, then those workers wages were increasing at 4-6%. I am not sure the gig economy is to blame. The gig economy would suggest that we are nowhere near full employment. How can people have time to have these gigs if they were gainfully employed already? Another scenario is that we are not near full employment at all, that you have a large number of people who are reluctantly part time, supplementing their income with other jobs to make ends meet. And I am sure that were Milton Friedman alive today, he would change his assumption to match reality. I wonder what wisdom he would have for us today.\"",
"title": ""
},
{
"docid": "53c9196acc52be86c9887d8674257cee",
"text": "This is really just a matter of planning. It's good that you don't want the train to go off the rails but really you just need to budget your fixed expenses. I do this by having two checking accounts. One account gets a direct deposit to cover all of my fixed expenses, the other is my regular checking account. Take your rent and other fixed expenses, if you have any, and total them. Take that total and divide by four. That's how much of each check you should be socking away in to the separate account. Additionally, with a 30% pay increase you can probably start a savings account. You should start to establish an emergency fund so this really never becomes a problem. Take 10% of your pay and put it in savings, this will still leave you with a healthy pay increase to enjoy but you'll keep some of your money for yourself too.",
"title": ""
},
{
"docid": "3d34c21a2d3c48e716c0f7c03fbe1e8d",
"text": "\"There are several ways you can get out of paying your student loans back in the USA: You become disabled and the loan is dismissed once verified by treating doctor or the Social Security Administration. You become a peace officer. You become a teacher; generally K-12, but I have heard from the DOE that teachers at state schools qualify as well. So the \"\"malicious\"\" friend B is prescribing to the theory that if one of those conditions becomes true, friend A will not have to pay back the loan. The longer you drag it out, the more chance you have to fulfill a condition. Given that 2 of these methods require a commitment, my guess is that they are thinking more along the lines of the first one, which is horrible. Financially, it makes no sense to delay paying back your loans because deferred loans are only interest-free until you graduate and are past your grace period, after which they will begin accruing interest. Unsubsidized loans accrue interest from the day you get them, only their payback is deferred until you graduate and exhaust your grace period. Anytime you ask for forbearance, you are still accruing interest and it is capitalizing into your principal — you are just given a chance to delay payback due to financial hardship, bad health, or loss of job. Therefore, at no point are you benefiting beyond the time you are in school and getting an education, still looking for a job, or dealing with health issues. In the current market, no CD, no savings account, and no investment will give you substantially more return that will offset the loss of the interest you are accruing. Even those of us in the old days getting 4.X % rates would not do this. There was a conditional consolidation offer the DOE allowed which could bring all your loans under one roof for a competitive 5.x-6.x % rate allowing you a single payment, but even then you would benefit if you had rates that were substantially higher. From a credit worthiness aspect, you are hurt by the outstanding obligation and any default along the way, so you really want to avoid that — paying off or down your loans are a good way to ensure you don't shoot yourself in the foot.\"",
"title": ""
}
] |
fiqa
|
e4a6f99a4fb5374199547bdcff4099c8
|
What constitutes illegal insider trading?
|
[
{
"docid": "43e559617382b38b2b11b0f4082a6a56",
"text": "\"It becomes illegal when it is both material and nonpublic information. Material being defined as: Information that you would want and significantly alters the perception of the stock. To your point -- \"\"materiality\"\" is really up to the courts Nonpublic This is a little easier to define, but need to be careful if the information is disclosed selectively -- ie to just a small number of investment analysts -- this may still be nonpublic There is also an exception to this -- Mosaic Theory - This is the research you are referring to where the analyst calls up suppliers, etc and obtains information that is nonmaterial (wouldn't move the price of the security) but using experience and combined with public information creates something that is meaningful and could move the price of the security. This is perfectly legal. Material examples:\"",
"title": ""
},
{
"docid": "0683565621aff565ab849e4edfad786a",
"text": "\"You have to read some appeals court cases see scholar.google.com , as well as SEC enforcement actions on sec.gov to get an understanding of how the SEC operates. http://www.sec.gov/spotlight/insidertrading/cases.shtml There are court created guidelines for how insider trading would be proven There is no clear line, but it is the \"\"emergency asset injunctions\"\" (freezing your assets if you nailed a suspiciously lucrative trade) you really want to avoid, and this is often times enforced/reported by the brokers themselves since the SEC does not have the resources to monitor every account's trading activities. There are some thin lines, such as having your lawyer file a lawsuit, and as soon as it is filed it is technically public so you short the recipient's stock. Or having someone in a court room updating you on case developments as soon as possible so you can make trades (although this may just be actually public, depending on the court). But the rules create the opportunities Also consider that the United States is the most strict country in this regard, there are tons of capital markets and the ideals or views of \"\"illegal insider trading\"\" compared to \"\"having reached a level of society where you are privileged to obtain this information\"\" vary across the board contains charts of countries where an existing insider trading prohibition is actually enforced: http://repository.law.umich.edu/cgi/viewcontent.cgi?article=1053&context=articles https://faculty.fuqua.duke.edu/~charvey/Teaching/BA453_2005/BD_The_world.pdf Finally, consider some markets that don't include equities, as trading on an information advantage is only applicable to things the SEC regulates, and there are plenty of things that agency doesn't regulate. So trying to reverse engineer the SEC may not be the most optimal use of energy\"",
"title": ""
}
] |
[
{
"docid": "f03383a88a8140d54337e9b3816d3390",
"text": "\"The Indian regulator (SEBI) has banned trading in 300 shell companies that it views as being \"\"Shady\"\", including VB Industries. According to Money Control (.com): all these shady companies have started to rally and there was a complaint to SEBI that investors are getting SMSs from various brokerage firms to invest in them This suggests evidence of \"\"pump and dump\"\" style stock promotion. On the plus side, the SEBI will permit trading in these securities once a month : Trading in these securities shall be permitted once a month (First Monday of the month). Further, any upward price movement in these securities shall not be permitted beyond the last traded price and additional surveillance deposit of 200 percent of trade value shall be collected form the Buyers which shall be retained with Exchanges for a period of five months. This will give you an opportunity to exit your position, however, finding a buyer may be a problem and because of the severe restrictions placed on trading, any bid prices in the market are going to be a fraction of the last trade price.\"",
"title": ""
},
{
"docid": "b990865408156bb2715fe8bcd64b1ad3",
"text": "A practical issue is that insider trading transfers wealth from most investors to the few insiders. If this were permitted, non-insiders would rarely make any money, and they'd stop investing. That would then defeat the purpose of the capital markets which is to attract capital. A moral issue is that managers and operators of a company should act in shareholders' interests. Insider trading directly takes money from other shareholders and transfers it to the insider. It's a nasty conflict of interest (and would allow any CEO of a public company to make ton of money quickly, regardless of their job performance). In short, shareholders and management should succeed or suffer together, so their interests are as aligned as possible and managers have the proper incentives.",
"title": ""
},
{
"docid": "4cf93f14c4c9dbe35734cc4af063d42a",
"text": "As others have said, it simply makes you a part owner. Even if you have ethical objections to a company's behavior, I'd argue that investing in it and using the proxy votes to influence the company's decisions might be even more ethical than not investing.",
"title": ""
},
{
"docid": "6ee090dbbfbf380955b2fa0d0ec45947",
"text": "sweet, a Nazi analogy. And here I thought I'd *never* see one of those on the internet! A better example would be to arrest gun manufacturers because they created guns that were used in murders. Chances are this program was created for legitimate reasons. There's nothing illegal about using software to buy stock. There is, however, rules against doing things like this to influence the market. You're equating some software developers whose software was used illegally to a group of people who committed genocide. Think about that.",
"title": ""
},
{
"docid": "60a47bddacca3f0846c65b31dee5118f",
"text": "\"There are quite a few regulations on \"\"Insider Trading\"\". Blackouts are one of the means companies adopt to comply with \"\"Insider Trading\"\" regulations, mandating employees to refrain from selling/buying during the notified period. Once you leave the employment: So unless there is an urgent need for you to sell/buy the options, wait for some time and then indulge in trade.\"",
"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": "eb1860fb6afb16093dbe499d9c96ac6d",
"text": "pump and dump is a common Illegal practice of boiler room operations. It refers to the talking a stock up, both through word of mouth as well as selling shares to unwitting buyers. I fail to see much difference between that practice and this.",
"title": ""
},
{
"docid": "72f8406a31741459ff9869a0c5d52123",
"text": "\"Does your job give you access to \"\"confidential information\"\", such that you can only buy or sell shares in the company during certain windows? Employees with access to company financial data, resource planning databases, or customer databases are often only allowed to trade in company securities (or derivatives thereof) during certain \"\"windows\"\" a few days after the company releases its quarterly earnings reports. Even those windows can be cancelled if a major event is about to be announced. These windows are designed to prevent the appearance of insider trading, which is a serious crime in the United States. Is there a minimum time that you would need to hold the stock, before you are allowed to sell it? Do you have confidence that the stock would retain most of its value, long enough that your profits are long-term capital gains instead of short-term capital gains? What happens to your stock if you lose your job, retire, or go to another company? Does your company's stock price seem to be inflated by any of these factors: If any of these nine warning flags are the case, I would think carefully before investing. If I had a basic emergency fund set aside and none of the nine warning flags are present, or if I had a solid emergency fund and the company seemed likely to continue to justify its stock price for several years, I would seriously consider taking full advantage of the stock purchase plan. I would not invest more money than I could afford to lose. At first, I would cash out my profits quickly (either as quickly as allowed, or as quickly as lets me minimize my capital gains taxes). I would reinvest in more shares, until I could afford to buy as many shares as the company would allow me to buy at the discount. In the long-run, I would avoid having more than one-third of my net worth in any single investment. (E.g., company stock, home equity, bonds in general, et cetera.)\"",
"title": ""
},
{
"docid": "a4ee33eae5c655fc944c90559949cff5",
"text": "Arguably the money made or lost on the particular stock in question wouldn't have happened without the story. The AIs are just taking advantage of market conditions caused by the story. The person who planted the story bought the stock prior to the story being dropped and sold before the stock dropped back down, which is illegal.",
"title": ""
},
{
"docid": "6dfe1333439370985d38d5a8a2ca24a3",
"text": "\"The reason that stock buybacks are not considered insider trading is because the offers are open to all on equal terms to everyone outside the company. Even if the company knows \"\"inside\"\" information, it's not supposed to tell it (and company executives are not allowed to tender shares, unless they had previously set up a \"\"blind\"\" selling program on a\"\"schedule.\"\") If that's actually the case, no one investor is better informed than another, and hence there is no insider trading. The issue of inside trading is that \"\"insiders\"\" ARE better informed.\"",
"title": ""
},
{
"docid": "da058ebde0a2b5ea058c7391f620ca07",
"text": "\"Secret formulas are legal, \"\"privileged information\"\" is not. And that may be the whole point. People are allowed to trade stocks profitably if doing so results only from their skill. A \"\"secret formula\"\" (for evaluating information) is part of that skill. But having \"\"privileged information\"\" is not considered skill. It is considered an unfair, illegal advantage. Because company officials (and others) with privileged information are 1) not permitted to trade stocks while that information is privileged and 2) are not allowed to share that information with others. Inevitably, some do one or the other, which is why they are prosecuted. \"\"Raj\"\" took the process to new highs (or lows). He not only \"\"dealt\"\" in privileged information, he PAID for it. Anything from a new car or house to $500,000 a year in cash. In essence, he had a bunch of strategically placed \"\"spies\"\" inside or close to corporations including one on the board of Goldman Sachs, \"\"selling out\"\" their companies, and thereby practicing a form of corporate \"\"treason.\"\"\"",
"title": ""
},
{
"docid": "97bc32553a9af221bb08bc2e513dbf7c",
"text": "I am a flight attendant on a private jet and I hear a bank CEO discussing a merger or a buyout. I proceed to purchase that stock before the announcement. The CEO did not tell me to buy it, I just overheard him. If you are a flight attendant on a private jet that is operated by one of the principals, probably including a bank, attorney, consultant, broker, etc., in the merger or buyout, then you probably have a fiduciary duty to safeguard the information and are prohibited from trading. Please see: http://www.kiplinger.com/article/investing/T052-C008-S001-would-you-be-guilty-of-insider-trading.html You’re a janitor at a major company. You hear members of the company’s board convening outside the room you’re cleaning and decide to hide in the closet. The board okays a deal to sell the company for a fat premium to the current share price. You load up on the shares. Illegal insider trading? Definitely. This is not a public place, and “you’d be in a position to understand that confidential information was being disclosed, which changes the calculus,” says Andrew Stoltmann, a Chicago-based securities lawyer. Also see: http://meyersandheim.com/how-to-win-an-insider-trading-case/ However, between these two extremes of a bystander with no duty to the corporation and a corporate officer with a clear duty to the corporation stood a whole group of people such as printers, lawyers and others who were involved in non-public transactions that did not necessarily have a duty to the company whose securities they traded. To address this group of people the courts developed the misappropriation theory. The misappropriation theory covers people who posses inside information and who are prohibited from trading on such information because they owe a duty to a third party and not the corporation whose securities are traded. Yours is the perfect example. You owe a duty to your employer to operate in its best interests. As for the broader, more common example, where you overhear information in an elevator, restaurant, in line at the coffee shop, etc., trading on such information was found not to be insider trading in SEC v. Switzer: http://law.justia.com/cases/federal/district-courts/FSupp/590/756/2247092/ In this case, Mr. Switzer overheard information at a track meet and traded on it with profits. The court found: The information was inadvertently overheard by Switzer at the track meet. Rule 10b-5 does not bar trading on the basis of information inadvertently revealed by an insider. On the basis of the above findings of fact and conclusions of law, the court orders judgment in favor of defendants.",
"title": ""
},
{
"docid": "49116813bdaca2a97e43c13f41359d5c",
"text": "The CEO of a public company can, and often does, buy (and sell) the stock of his company. In fact, frequently the stock of the company is part of the compensation for the CEO. What makes this legal and fair is that the CEO files with the SEC an announcement before he buys (or sells) the stock. These announcements allow us 'in the dark' people enough warning ahead of time. See, for example, the trades of UTX stock by their public officers. As for trading on information about other companies, if I am not mistaken... that is why Martha Stewart wound up in prison. So, yeah, it does happen. I hope it is caught more often than not. On a related note, have you seen the movie 'Wall Street' with Charlie Sheen and Michael Douglas?",
"title": ""
},
{
"docid": "9be77ec1a7a6711cd9e39215f344a6e9",
"text": "\"There are situations where you can be forced to cover a position, particular when \"\"Reg SHO\"\" (\"\"regulation sho\"\") is activated. Reg SHO is intended to make naked short sellers cover their position, it is to prevent abusive failure to delivers, where someone goes short without borrowing someone else's shares. Naked shorting isn't a violation of federal securities laws but it becomes an accounting problem when multiple people have claims to the same underlying assets. (I've seen companies that had 120% of their shares sold short, too funny, FWIW the market was correct as the company was worth nothing.) You can be naked short without knowing it. So there can be times when you will be forced to cover. Other people being forced to cover can result in a short squeeze. A risk. The other downside is that you have to pay interest on your borrowings. You also have to pay the dividends to the owner of the shares, if applicable. In shorter time frames these are negligible, but in longer time frames, such as closer to a year or longer, these really add up. Let alone the costs of the market going in the opposite direction, and the commissions.\"",
"title": ""
},
{
"docid": "739b7375d58d91d8094464eb6a7b3760",
"text": "\"So is knowledge of unannounced products simply not considered material nonpublic information? Well \"\"material\"\" is relative but it certainly is nonpublic information. And trading based on that information would likely be considered illegal if it is actually material. Many companies require that employees with material non-public info get stock trades approved by their legal department. This protects not only the employee but the employer from SEC scrutiny. If the legal department determines that the employee has non-public info that is the genesis of the stock trade, they might deny the request. In many cases these employees receive stock through ESPP, ISO and/or RSUs and often sell while in possession of information about unannounced products. Just receiving stock as part of as part of a compensation program would not be illegal, provided it was part of a normal compensation package and not deliberately awarded in advance of these types of events. Selling or outright buying stock (including RSUs) with that kind of information would certainly be scrutinized. An employee is granted RSUs, they vest 7 months before announcement of a new product. The employee knows the exact specifications of the product. If they sell the vested stock before the announcement would this constitute insider trading or not? Why? The law is not meant to prevent people from investing in their own company just because they know future plans. So knowledge of an announcement 7 months out may not be considered material. If, however, you sold stock the day (or a week) before some announcement that caused the stock to fall, then that would probably be scrutinized. Or, if you traded shortly before an announcement of a new, revolutionary product that was set to be released in seven months, and the stock rose, then you might be scrutinized. So there is a lot of gray area, but remember that the spirit of the law is to prevent people from benefiting unfairly with non-public information. It would be hard to prove that gaining on a stock trade 7 months before a product announcement would be considered \"\"unfair gain\"\". A lot can happen in that time.\"",
"title": ""
}
] |
fiqa
|
e1687c56cea40eded03263610efbe42e
|
If the housing market is recovering, why would a REIT index ETF (e.g. VNQ) not be performing well?
|
[
{
"docid": "efce77f31deaafbffcf362e30aea9e0d",
"text": "\"VNQ only holds ~16% residential REITs. The rest are industrial, office, retail (e.g. shopping malls), specialized (hotels perhaps?) etc. Thus, VNQ isn't as correlated towards housing as you might have assumed just based on it being about \"\"real estate.\"\" Second of all, if by \"\"housing\"\" you mean that actual houses have gone up appreciably, then you ought to realize that residential REITs seldom hold actual houses. The residential units held tend primarily to be rental apartments. There is a relationship in prices, but not direct.\"",
"title": ""
},
{
"docid": "d18af34075798769df46f3517dde7d05",
"text": "To round out something that @Chris W. Rea pointed out, the business that a REIT is in will be either A) Equity REIT... property management, B) mortgage REIT... lending, or C) hybrid REIT (both). A very key point about why REITs broadly have been struggling lately, (and this would show up in the REIT indices/ETFs you've linked to,) is linked to the REIT business models. For an Equity REIT, they borrow money at the going rate (let's say ~4.5% for commercial-scale loans), and use that to take out mortgages on physical properties. If a property rents for $15K per month, and they can take out a $1.8 million loan at $9,000 per month, then their business is around managing maintenance, operating expenses, and taxes on that $6,000 per month margin. For a mortgage REIT, they borrow funds as a highly qualified borrower, (again let's say ~4.5%), and lend those funds back out at a higher rate. The basic concept is that if you borrow $10 million at 4.5% for 30 years, you need to pay it back at $50,668 per month. If you can lend it out reliably at 5%, you collect $53,682 per month... a handy $3,000 per month. The cheaper you can get money at (below 4.5%) and the higher you can lend it at (above 5%), the better your margin is. The worry is that both REIT business models are very highly dependent on the cost of borrowing money. With the US Fed changing its bond-buying/QE/stimulus activity, the prevailing interest rates are likely to go up. While this has its benefits (inflation), it also will make it more expensive for these types of companies to do business.",
"title": ""
}
] |
[
{
"docid": "478a4f74037de66e9ee99150366f6030",
"text": "Housing prices are set by different criteria. It can become memoryless the same as the stock if the criteria used to set its price in the past is no longer valid. For example, take Phoenix or Las Vegas - in the past these were considered attractive investments because of the economical growth and the climate of the area. While the climate hasn't changed, the economical growth stopped not only there but also in the places where people buying the houses lived (which is all over the world really). What happened to the housing market? Dropped sharply and stays flat for several years now at the bottom. So it doesn't really matter if the house was worth $300K in Phoenix 5 years ago, you can only sell it now for ~$50K, and that's about it. The prices have been flat low for several years and the house price was $50K, but does it mean its going to stay so? No, once economy gears up, the prices will go up as well. So its not exactly memory-less, but the stocks are not memory-less as well. There is correlation between the past and the future performance. If the environment conditions are similar - the performance is likely to be similar. For stocks however there's much more environment conditions than the housing market and its much harder to predict them. But even with the housing people were burnt a lot on the misconception that the past performance correlates to the future. It doesn't necessarily.",
"title": ""
},
{
"docid": "d0c0764029404e59244d50be1b159dad",
"text": "\"Here is my simplified take: In any given market portfolio the market index will return the average return on investment for the given market. An actively managed product may outperform the market (great!), achieve average market performance (ok - but then it is more expensive than the index product) or be worse than the market (bad). Now if we divide all market returns into two buckets: returns from active investment and returns from passive investments then these two buckets must be the same as index return are by definition the average returns. Which means that all active investments must return the average market return. This means for individual active investments there are worse than market returns and better then market returns - depending on your product. And since we can't anticipate the future and nobody would willingly take the \"\"worse than market\"\" investment product, the index fund comes always up on top - IF - you would like to avoid the \"\"gamble\"\" of underperforming the market. With all these basics out of the way: if you can replicate the index by simply buying your own stocks at low/no costs I don't see any reason for going with the index product beyond the convenience.\"",
"title": ""
},
{
"docid": "642605635985e7e03e7dea5aa0e99d77",
"text": "Foreign stocks tend to be more volatile -- higher risk trades off against higher return potential, always. The better reason for having some money in that area is that, as with bonds, it moves out-of-sync with the US markets and once you pick your preferred distribution, maintaining that balance semi-automatically takes advantage of that to improve your return-vs-risk position. I have a few percent of my total investments in an international stock index fund, and a few percent in an international REIT, both being fairly low-fee. (Low fees mean more of the money reaches you, and seems to be one of the better reasons for preferring one fund over another following the same segment of the market.) They're there because the model my investment advisor uses -- and validated with monte-carlo simulation of my specific mix -- shows that keeping them in the mix at this low level is likely to result in a better long-term outcome than if i left them out. No guarantees, but probabilities lean toward this specfic mix doing what i need. I don't pretend to be able to justify that via theory or to explain why these specific ratios work... but I understand enough about the process to trust that they are on (perhaps of many) reasonable solutions to get the best odds given my specific risk tolerance, timeline, and distaste for actively managing my money more than a few times a year. If that.",
"title": ""
},
{
"docid": "c000a032309b520eb3ac054a8cc66a0d",
"text": "They lost money on an absolute basis. They got slammed as a hedge fund because its returns are less than 0%, not because they underperformed relative to the market. Hedge funds aren't mean to outperform a benchmark. They are meant to preserve (and grow) your funds. That's why long only houses are happy about their -15% when the market is down 30%, but a hedge fund should be above 0%.",
"title": ""
},
{
"docid": "80923207a6f183be4e8cc88ae83b06f9",
"text": "Here is a simple example of how daily leverage fails, when applied over periods longer than a day. It is specifically adjusted to be more extreme than the actual market so you can see the effects more readily. You buy a daily leveraged fund and the index is at 1000. Suddenly the market goes crazy, and goes up to 2000 - a 100% gain! Because you have a 2x ETF, you will find your return to be somewhere near 200% (if the ETF did its job). Then tomorrow it goes back to normal and falls back down to 1000. This is a fall of 50%. If your ETF did its job, you should find your loss is somewhere near twice that: 100%. You have wiped out all your money. Forever. You lose. :) The stock market does not, in practice, make jumps that huge in a single day. But it does go up and down, not just up, and if you're doing a daily leveraged ETF, your money will be gradually eroded. It doesn't matter whether it's 2x leveraged or 8x leveraged or inverse (-1x) or anything else. Do the math, get some historical data, run some simulations. You're right that it is possible to beat the market using a 2x ETF, in the short run. But the longer you hold the stock, the more ups and downs you experience along the way, and the more opportunity your money has to decay. If you really want to double your exposure to the market over the intermediate term, borrow the money yourself. This is why they invented the margin account: Your broker will essentially give you a loan using your existing portfolio as collateral. You can then invest the borrowed money, increasing your exposure even more. Alternatively, if you have existing assets like, say, a house, you can take out a mortgage on it and invest the proceeds. (This isn't necessarily a good idea, but it's not really worse than a margin account; investing with borrowed money is investing with borrowed money, and you might get a better interest rate. Actually, a lot of rich people who could pay off their mortgages don't, and invest the money instead, and keep the tax deduction for mortgage interest. But I digress.) Remember that assets shrink; liabilities (loans) never shrink. If you really want to double your return over the long term, invest twice as much money.",
"title": ""
},
{
"docid": "a5c828411013510f191bb0f58be880db",
"text": "I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to *market neutral* hedge fund returns seems a bit disingenuous. That doesn't mean the article is wrong, and they have a point about the democratization of data, but still.",
"title": ""
},
{
"docid": "7281e2011dcf9a28ad110b6fda9ae354",
"text": "\"The majority (about 80%) of mutual funds are underperforming their underlying indexes. This is why ETFs have seen massive capital inflows compared to equity funds, which have seen significant withdrawals in the last years. I would definitively recommend going with an ETF. In addition to pure index based ETFs that (almost) track broad market indexes like the S&P 500 there are quite a few more \"\"quant\"\" oriented ETFs that even outperformed the S&P. I am long the S&P trough iShares ETFs and have dividend paying ETFs and some quant ETFS on top (Invesco Powershares) in my portfolio.\"",
"title": ""
},
{
"docid": "4a5ce7886ff8ef284eec9051fa22bd58",
"text": "Warren Buffet and Berkshire Hathaway took a 50% loss in each of the last two bear markets. His stock even lost 10% in 2015 when the S&P lost 8%. He doesn't have a track record to support the claim that his stock performs relatively better in a bear market, so perhaps it's best to take his letter with a grain of salt. Edit: As one commenter points out, Mr. Buffett is comparing the book performance of his fund to the market performance of an index. That is an apples to oranges comparison. It's deceptive at best.",
"title": ""
},
{
"docid": "43740123fa97c27cf5e4af82928e3592",
"text": "But if you add a security to the index you also remove one from the index, thus both a buy and sell. If weights change some go up, some go down thus some need to be purchased and some need to be sold. So I still don't see how ETFs are net sinks beyond their simple AUM.",
"title": ""
},
{
"docid": "d59301acd1b942e879c09beefec5df5d",
"text": "tl;dr: The CNN Money and Yahoo Finance charts are wildly inaccurate. The TD Ameritrade chart appears to be accurate and shows returns with reinvested dividends. Ignoring buggy data, CNN most likely shows reinvested dividends for quoted securities but not for the S&P 500 index. Yahoo most likely shows all returns without reinvested dividends. Thanks to a tip from Grade Eh Bacon, I was able to determine that TD Ameritrade reports returns with reinvested dividends (as it claims to do). Eyeballing the chart, it appears that S&P 500 grew by ~90% over the five year period the chart covers. Meanwhile, according to this S&P 500 return estimator, the five year return of S&P 500, with reinvested dividends, was 97.1% between July 2012 to July 2017 (vs. 78.4% raw returns). I have no idea what numbers CNN Money is working from, because it claims S&P 500 only grew about 35% over the last five years, which is less than half of the raw return. Ditto for Yahoo, which claims 45% growth. Even stranger still, the CNN chart for VFINX (an S&P 500 index fund) clearly shows the correct market growth (without reinvesting dividends from the S&P 500 index), so whatever problem exists is inconsistent: Yahoo also agrees with itself for VFINX, but comes in a bit low even if your assume no reinvestment of dividends (68% vs. 78% expected); I'm not sure if it's ever right. By way of comparison, TD's chart for VFINX seems to be consistent with its ABALX chart and with reality: As a final sanity check, I pulled historical ^GSPC prices from Yahoo Finance. It closed at $1406.58 on 27 Aug 2012 and $2477.55 on 28 Aug 2017, or 76.1% growth overall. That agrees with TD and the return calculator above, and disagrees with CNN Money (on ABALX). Worse, Yahoo's own charts (both ABALX and VFINX) disagree with Yahoo's own historical data.",
"title": ""
},
{
"docid": "f141bf33c2f9103e671ece71f28922bb",
"text": "Low volatility trading tends to be a hallmark of the late summer as Wall Street by and large goes on summer vacation. When all those traders and hedge fund managers return to work full-tilt in September, the market tends to become more volatile - either upwards or downwards. If you are wondering why these months have been particularly poor relative to others, than I don't think anyone knows the reason why.",
"title": ""
},
{
"docid": "bb033d7bb61067cb9b8e2b2a79b2ed73",
"text": "Most likely crazy bad, given all the news rolling out by October, mainly the fed meetings and government debt ceiling. Those big issues will scare the market imo. Nothing bad may actually happen, but the markets do not care what actually happens, but what they THINK is going to happen. I might take up some long TVIX/VXX positions myself.",
"title": ""
},
{
"docid": "57d66880aced300bb4bcaf0bfbcd4e8d",
"text": "\"I think the claim is that you shouldn't buy a house expecting it to increase in value as you would a stock portfolio. OTOH if you are looking at it from the stand point of \"\"I need housing, mortgage payments and rent are comparable and I build equity if I buy a house rather then rent\"\" that's potentiality a very different situation (that I'm not qualified to judge).\"",
"title": ""
},
{
"docid": "f7c7d5c317bd7ca3d56dfc906b82d5a8",
"text": "If your planning on shorting the stocks be careful, while the value of the retail sector may be declining there will be a lot of back and forth over the next ten years, and as REITs discounts to nav increases, there is huge opportunities for buyouts from developers who have other use ideas for the real estate. The real estate will always have value, even if it's not as a shopping center.",
"title": ""
},
{
"docid": "3fd1f453fdf50f3d43731985b8d1c9bb",
"text": "Moreover the fact that they're simply invested in two of the biggest emerging market ETFs which preform well with global stability but are overall kinda risky long term goes to show that it's not some unheard of success. As you said, the proving ground will be whether they can make money in a down economy, where it's much harder to find profitable investments. Perhaps they'll switch to bonds and commodities.",
"title": ""
}
] |
fiqa
|
b4e5373da12d48baf3bad01e691648c3
|
Can my broker lock my cash account if I try to use the money from a stock sale during the three-day settlement period?
|
[
{
"docid": "95c2adec4356b3c197307f57a31ce4a5",
"text": "Brokerage firms must settle funds promptly, but there's no explicit definition for this in U.S. federal law. See for example, this article on settling trades in three days. Wikipedia also has a good write-up on T+3. It is common practice, however. It takes approximately three days for the funds to be available to me, in my Canadian brokerage account. That said, the software itself prevents me from using funds which are not available, and I'm rather surprised yours does not. You want to be careful not to be labelled a pattern day trader, if that is not your intention. Others can better fill you in on the consequences of this. I believe it will not apply to you unless you are using a margin account. All but certainly, the terms of service that you agreed to with this brokerage will specify the conditions under which they can lock you out of your account, and when they can charge interest. If they are selling your stock at times you have not authorised (via explicit instruction or via a stop-loss order), you should file a complaint with the S.E.C. and with sufficient documentation. You will need to ensure your cancel-stop-loss order actually went through, though, and the stock was sold anyway. It could simply be that it takes a full business day to cancel such an order.",
"title": ""
},
{
"docid": "ada9d0a627c6197e572ac50d0b4cf55d",
"text": "Here's how this works in the United States. There's no law regarding your behavior in this matter and you haven't broken any laws. But your broker-dealer has a law that they must follow. It's documented here: The issue is if you buy stock before your sell has settled (before you've received cash) then you're creating money where before none existed (even though it is just for a day or two). The government fears that this excess will cause undue speculation in the security markets. The SEC calls this practice freeriding, because you're spending money you have not yet received. In summary: your broker is not allowed to loan money to an account than is not set-up for loans; it must be a margin account. People with margin account are able to day-trade because they have the ability to use margin (borrow money). Margin Accounts are subject to Pattern Daytrading Rules. The Rules are set forth by FINRA (The Financial Industry Reporting Authority) and are here:",
"title": ""
}
] |
[
{
"docid": "c51982782aa3d8d08ddcc69360b72bf1",
"text": "Keeping your “big emergency” fund in stocks if you have 12 months income saved is OK. However you should keep your “small emergency” fund in cash. (However I find that even my stock broker accounts have some cash in them, as I like to let the dividends build up enough to make the dealing charges worthwhile. You don’t wish to be forced to sell at a bad time due to your boiler needing replacing or your car breaking down. However if you lost your job in the same week that your boiler broke down and your car needed replacing then being forced to sell stocks at a bad time is not much of an issue. Also if you are saving say 1/3 of your income each month and you have a credit card with large unused credit limit that is paid of each month, then most “small emergency” that are under 2/3 of your monthly income can be covered on the credit card with little or no interest charges. One option is to check you bank balance on the day after you are paid, and if it is more than 2x your monthly income, then move some of it to long term savings, but only if you tend to spend a lot less then you earn most months.",
"title": ""
},
{
"docid": "ca175cc37562842565cc140b7fae1c65",
"text": "\"First of all, not all brokers allow trading during pre-market and post-market. Some brokers only allow trading during the regular hours (9:30am - 4pm ET). Second of all, while you can place orders using limit orders and market orders during regular trading hours, you can only use limit orders during pre-market and post-market. This is because the liquidity is much lower during pre-market and post-market, and using market orders could result in some trades filling at horrible prices. So brokers don't allow using market orders outside of regular trading hours. Third, some brokers require you to specify that you want your order to be executed during pre-market or post-market. For example, my broker allows me to specify either \"\"Day\"\" or \"\"Ext\"\" for my orders. \"\"Day\"\" means I want my order to execute only during regular trading hours, and \"\"Ext\"\" means I want my order to execute at any time - pre-market, regular trading hours, or post-market. Finally, if your broker allows pre/post market trading, and you place a limit order while specifying \"\"Ext\"\", then your trade can happen in real-time during pre-market or post-market. Per your example, if a stock is trading at $5 at 8am, and you put in a limit order (while specifying \"\"Ext\"\") to buy it at $5 at 8am, then your order will execute at that time and you will buy that stock at 8am.\"",
"title": ""
},
{
"docid": "aa1f9c1214d7c33fb2a1e73c46fcb482",
"text": "\"You don't. No one uses vanilla double entry accounting software for \"\"Held-For-Trading Security\"\". Your broker or trading software is responsible for providing month-end statement of changes. You use \"\"Mark To Market\"\" valuation at the end of each month. For example, if your cash position is -$5000 and stock position is +$10000, all you do is write-up/down the account value to $5000. There should be no sub-accounts for your \"\"Investment\"\" account in GNUCash. So at the end of the month, there would be the following entries:\"",
"title": ""
},
{
"docid": "29051a1f78e6280e783af10934bd5ac1",
"text": "Purchases and sales from the same trade date will both settle on the same settlement date. They don't have to pay for their purchases until later either. Because HFT typically make many offsetting trades -- buying, selling, buying, selling, buying, selling, etc -- when the purchases and sales settle, the amount they pay for their purchases will roughly cancel with the amount they receive for their sales (the difference being their profit or loss). Margin accounts and just having extra cash around can increase their ability to have trades that do not perfectly offset. In practice, the HFT's broker will take a smaller amount of cash (e.g. $1 million) as a deposit of capital, and will then allow the HFT to trade a larger amount of stock value long or short (e.g. $10 million, for 10:1 leverage). That $1 million needs to be enough to cover the net profit/loss when the trades settle, and the broker will monitor this to ensure that deposit will be enough.",
"title": ""
},
{
"docid": "d8b3cdc8f3766cb93bb00036450b813a",
"text": "As the record date is 7th August, you need to hold stocks on the 7th August closing. You need not hold it till 2nd Sept. The list as taken on 7th August would be processed and instructions given to Bank and the dividends credited by 1st Sept. Edit: To Clarify Victor's comment Typically from the time one sells the stocks to the time it actually gets transferred has a clearing cycle. Most stock exchanges have 2 or 3 days cycles. i.e. if I sell the stock today, it is still in my name. The money is still with the buyer. On Day 1, the positions are arrived at. On Day 2 the stock gets credited to the buyer and the funds gets credit to seller. As the question was specific whether to hold the stock till 7th or 22nd Sept, my initial answer was simple. The illustration by Victor is more accurate.",
"title": ""
},
{
"docid": "efb02741e131bbeb35fabd25c9d5edb7",
"text": "\"I have received a response from SIPC, confirming littleadv's answer: For a brief background, the protections available under the Securities Investor Protection Act (\"\"SIPA\"\"), are only available in the context of a liquidation proceeding of a SIPC member broker-dealer and relate to the \"\"custody\"\" of securities and related cash at the SIPC member broker-dealer. Thus, if a SIPC member broker-dealer were to fail at a time when a customer had securities and/or cash in the custody of the SIPC member broker-dealer, in most instances it would be SIPC's obligation to restore those securities and cash to the customer, within statutory limits. That does not mean, however, that the customer would necessarily receive the original value of his or her purchase. Rather, the customer receives the security itself and/or the value of the customer's account as of the day that the liquidation commenced. SIPC does not protect against the decline in value of any security. In a liquidation proceeding under the SIPA, SIPC may advance up to $500,000 per customer (including a $250,000 limit on cash in the account). Please note that this protection only applies to the extent that you entrust cash or securities to a U.S. SIPC member. Foreign broker dealer subsidiaries are not SIPC members. However, to the extent that any assets, including foreign securities, are being held by the U.S. broker dealer, the assets are protected by SIPC. Stocks listed on the LSE are protected by SIPC to the extent they are held with a SIPC member broker dealer, up to the statutory limit of $500,000 per customer. As I mentioned in the comments, in the case of IB, indeed they have a foreign subsidiary, which is why SIPC does not cover it (rather they are insured by Lloyds of London for such cases).\"",
"title": ""
},
{
"docid": "d7757af949d34fb59fec0397d70582f1",
"text": "\"The difficulty is that you are thinking of a day as a natural unit of time. For some securities the inventory decisions are less than a minute, for others, it can be months. You could ask a similar question of \"\"why would a dealer hold cash?\"\" They are profit maximizing firms and, subject to a chosen risk level, will accept deals that are sufficiently profitable. Consider a stock that averages 1,000 shares per day, but for which there is an order for 10,000 shares. At a sufficient discount, the dealer would be crazy not to carry the order. You are also assuming all orders are idiosyncratic. Dividend reinvestment plans (DRIP) trigger planned purchases on a fixed day, usually by averaging them over a period such as 10 days. The dealer slowly accumulates a position leading up to the date whenever it appears a good discount is available and fills the DRIP orders out of their own account. The dealer tries to be careful not to disturb the market leading up to the date and allows the volume request to shift prices upward and then fills them.\"",
"title": ""
},
{
"docid": "22f5b5bd6ddbadb3f7c70481c5b68139",
"text": "\"Securities clearing and settlement is a complex topic - you can start by browsing relevant Wikipedia articles, and (given sufficient quantities of masochism and strong coffee) progress to entire technical books. You're correct - modern trade settlement systems are electronic and heavily streamlined. However, you're never going to see people hand over assets until they're sure that payment has cleared - given current payment systems, that means the fastest settlement time is going to be the next business day (so-called T+1 settlement), which is what's seen for heavily standardized instruments like standard options and government debt securities. Stocks present bigger obstacles. First, the seller has to locate the asset being sold & make sure they have clear title to it... which is tougher than it might seem, given the layers of abstraction/virtualization involved in the chain of ownership & custody, complicated in particular by \"\"rehypothecation\"\" involved in stock borrowing/lending for short sales... especially since stock borrow/lending record-keeping tends to be somewhat slipshod (cf. periodic uproar about \"\"naked shorting\"\" and \"\"failure to deliver\"\"). Second, the seller has to determine what exactly it is that they have sold... which, again, can be tougher than it might seem. You see, stocks are subject to all kinds of corporate actions (e.g. cash distributions, spin-offs, splits, liquidations, delistings...) A particular topic of keen interest is who exactly is entitled to large cash distributions - the buyer or the seller? Depending on the cutoff date (the \"\"ex-dividend date\"\"), the seller may need to deliver to the buyer just the shares of stock, or the shares plus a big chunk of cash - a significant difference in settlement. Determining the precise ex-dividend date (and so what exactly are the assets to be settled) can sometimes be very difficult... it's usually T-2, except in the case of large distributions, which are usually T+1, unless the regulatory authority has neglected to declare an ex-dividend date, in which case it defaults to standard DTC payment policy (i.e. T-2)... I've been involved in a few situations where the brokers involved were clueless, and full settlement of \"\"due bills\"\" for cash distributions to the buyer took several months of hard arguing. So yeah, the brokers want a little time to get their records in order and settle the trade correctly.\"",
"title": ""
},
{
"docid": "123b23a493b497031a0d631a994c11dc",
"text": "The T+3 settlement date only affects cash accounts. In a cash account, you need to wait until the T+3 settlement date for your funds to be available to make your next trade. But if you convert your cash account into a margin account, then you do not need to wait until the T+3 settlement date for your next trade - your broker will allow you to make another trade immediately.",
"title": ""
},
{
"docid": "9e767c26bb5156cea063ee0911642690",
"text": "\"Yes. I heard back from a couple brokerages that gave detailed responses. Specifically: In a Margin account, there are no SEC trade settlement rules, which means there is no risk of any free ride violations. The SEC has a FAQ page on free-riding, which states that it applies specifically to cash accounts. This led me to dig up the text on Regulation T which gives the \"\"free-riding\"\" rule in §220.8(c), which is titled \"\"90 day freeze\"\". §220.8 is the section on cash accounts. Nothing in the sections on margin accounts mentions such a settlement restriction. From the Wikipedia page on Free Riding, the margin agreement implicitly covers settlement. \"\"Buying Power\"\" doesn't seem to be a Regulation T thing, but it's something that the brokerages that I've seen use to state how much purchasing power a client has. Given the response from the brokerage, above, and my reading of Regulation T and the relevant Wikipedia page, proceeds from the sale of any security in a margin account are available immediately for reinvestment. Settlement is covered implicitly by margin; i.e. it doesn't detract from buying power. Additionally, I have personally been making these types of trades over the last year. In a sub-$25K margin account, proceeds are immediately available. The only thing I still have to look out for is running into the day-trading rules.\"",
"title": ""
},
{
"docid": "f55e29b5b419a1fa47ae9f6fc7d40bd7",
"text": "Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash.",
"title": ""
},
{
"docid": "4dda835616037c706767369d1efac27a",
"text": "\"See \"\"Structuring transactions to evade reporting requirement prohibited.\"\" You absolutely run the risk of the accusation of structuring. One can move money via check, direct transfer, etc, all day long, from account to account, and not have a reporting issue. But, cash deposits have a reporting requirement (by the bank) if $10K or over. Very simple, you deposit $5000 today, and $5000 tomorrow. That's structuring, and illegal. Let me offer a pre-emptive \"\"I don't know what frequency of $10000/X deposits triggers this rule. But, like the Supreme Court's, \"\"We have trouble defining porn, but we know it when we see it. And we're happy to have these cases brought to us,\"\" structuring is similarly not 100% definable, else one would shift a bit right.\"\" You did not ask, but your friend runs the risk of gift tax issues, as he's not filing the forms to acknowledge once he's over $14,000.\"",
"title": ""
},
{
"docid": "ceb0169d967e05a1d9e2cb1df64a3729",
"text": "It depends on the broker. The one I use (Fidelity) will allow me to buy then sell or sell then buy within 3 days even though the cash isn't settled from the first transaction. But they won't let me buy then sell then buy again with unsettled cash. Of course not waiting for cash to settle makes you vulnerable to a good faith violation.",
"title": ""
},
{
"docid": "7c63aad6e45412db0ff76bec5941037b",
"text": "You need to contact the trading company and ask them what's going on. If it's simply a matter of needing to add more cash because you are now classified as a day trader, then call them, ask them what you need to do to not be considered a day trader, and do that. It would likely consist of not trading for a week and then trading less than you were going forward to avoid getting classified as a day trader again. That would be the easy problem to solve, so I hope that's right.",
"title": ""
},
{
"docid": "3631af51555feb4c27a4241fe7870abe",
"text": "\"Your broker likely didn't close your position out because it is a covered position. Why interfere with a trade that has no risk to it, from their perspective? There's no risk for the broker since your account holds the shares available for delivery (definition of covered), for if and when the options you wrote (sold) are exercised. And buyers of those options will eventually exercise the options (by expiration) if they remain in-the-money. There's only a chance that an option buyer exercises prematurely, and usually they don't because there's often time value left in the option. That the option buyer has an (ahem) \"\"option\"\" to exercise is a very key point. You wrote: \"\"I fully expected my position to be automatically liquidated by whoever bought my call\"\". That's a false assumption about the way options actually work. I suggest some study of the option exercise FAQs here: Perhaps if your position were uncovered – i.e. you wrote the call without owning the stock (don't try this at home, kids!) – and you also had insufficient margin to cover such a short position, then the broker might have justifiably liquidated your position. Whereas, in a covered call situation, there's really no reason for them to want to interfere – and I would consider that interference, as opposed to helpful. The situation you've described is neither risky for them, nor out of the ordinary. It is (and should be) completely up to you to decide how to close out the position. Anyway, your choices generally are:\"",
"title": ""
}
] |
fiqa
|
e6903c905863382e2941dc07108c6a28
|
Is it possible to borrow money to accrue interest, and then use that interest to pay back the borrower + fees?
|
[
{
"docid": "69ae83f670a7244134f490f66f43f59a",
"text": "No. The WSJ prime rate is 4.25%, even the Fed prime rate is 1.75%, way above the 1.20% you'll be making from your savings account. If you are high worth individual with great credit history, the bank might give you a personal loan at 4.25%. They won't care what you do with it as long as they get their payments. If you are not that creditworthy, they'll ask for a collateral, you can mortgage your house for example. It ends up being the sames thing, you get your money and do what you want with it. If you can make more than the interest rate the bank gave you, great, you made profit. The bank however won't agree to lend you money at 0.6% (1/2 of the 1.2% APY your savings account will bring). Why would they when they can loan that at prime rate of 4.25%?? The closest you can get to something like this is if you are a hot-shot wall street money manager with track record of making big profits. In that case the bank might put some money in your fund for you to manage, but that's not something a regular person can do.",
"title": ""
},
{
"docid": "e25fcd5b89b415a0f9310d96fdd581a2",
"text": "\"Your plan as proposed will not work, because it goes against how banks make money. Banks make money in two ways: (1) Fees [including account fees, investment advice fees, mortgage application fees, etc.]; and (2) Interest Rate Spread. They borrow money for x%, and they lend it out for x+y%. In a simple form, someone gives the bank a deposit, and earns 1%. The bank turns around to the next person in line and loans the money to them for 4%. You are asking them to turn the interest rate spread into a cost instead of their main source of profit: You are asking the bank to borrow money from another person paying them 1.2% interest, and then loan the money to you, paying you 0.6% interest and keeping 0.6% for themselves. The bank would lose money doing this. Technically yes, you can borrow from a bank and invest it in something earning above the 4% interest they will charge you. You can then pay the bank's interest off of your earnings, and make some profit for yourself. BUT this carries an inherent risk: If your investment loses money, you still owe the bank, effectively increasing the negative impact of your investment. This tactic is called \"\"Leveraging\"\"; you can look it up on this site or on google. It is not something you should do if you do not fully understand the risks you are taking on. Given that you are asking this question, I would suggest tactfully that you are not yet well informed enough to make this sort of investment. You run serious risk of losing everything if you over-leverage (assuming the banks will even lend you money in the first place).\"",
"title": ""
},
{
"docid": "9995f39a64da432da936cff80e0fefde",
"text": "\"There are many flaws with your idea. Say I want to borrow $225,000.00 to accrue interest on a 1.20% APY account. I promise ... that I cannot withdraw nor touch the account by legal contract. If you break the contract and lose the money, the lender is out the money. They can take you to court and will win, but if you don't have the money, then they don't get paid. (You can't squeeze water out of a rock even if a judge orders you to.) By sharing the interest with me on a loan, they keep a percentage that they'd normally get... If you're \"\"investing\"\" the money at 1.2%, and the lender gets some amount less than that, then they are getting much less than they \"\"normally\"\" get. Lenders typically get somewhere from 5-15% on loans. The money can also be used to fund a stock/trading account. Regardless of whether I profit, I pay interest on the loan and split the profit shares 24/7. How can the lender lose with legal enforcing? Again, if you lose the money, no amount of legal enforcing can force you to pay money that you don't have. Even if you go to jail for fraud the lender still doesn't get paid. Simply, no bank would ever agree to this.\"",
"title": ""
},
{
"docid": "8d9a776d08c206dacd7cec3133072133",
"text": "\"With (1), it's rather confusing as to where \"\"interest\"\" refers to what you're paying and where it refers to what you're being paid, and it's confusing what you expect the numbers to work out to be. If you have to pay normal interest on top of sharing the interest you receive, then you're losing money. If the lending bank is receiving less interest than the going market rate, then they're losing money. If the bank you've deposited the money with is paying more than the going market rate, they're losing money. I don't see how you imagine a scenario where someone isn't losing money. For (2) and (3), you're buying stocks on margin, which certainly is something that happens, but you'll have to get an account that is specifically for margin trading. It's a specific type of credit with specific rules, and you if you want to engage in this sort of trading, you should go through established channels rather than trying to convert a regular loan into margin trading. If you get a personal loan that isn't specifically for margin trading, and buy stocks with the money, and the stocks tank, you can be in serious trouble. (If you do it through margin trading, it's still very risky, but not nearly as risky as trying to game the system. In some cases, doing this makes you not only civilly but criminally liable.) The lending bank absolutely can lose if your stocks tank, since then there will be nothing backing up the loan.\"",
"title": ""
}
] |
[
{
"docid": "e6a05a201fa315f59ff8f24e7e0a57ce",
"text": "One of many things to consider is that in the United States student loan interest is tax deductible. That fact could change the math enough to make it worth putting A's money elsewhere depending on his interest rate and income bracket.",
"title": ""
},
{
"docid": "a5248e0a577f68808f7f7d876323e419",
"text": "When you get a loan (car, home, student) the lending company (bank) give the (auto dealer, previous home owner, school) money. You as the borrow promise to pay this money back with interest. So in your case the 100,000 you borrow requires a payment for principal and interest of ~965 per month. After 240 payments you will have paid the bank ~231,605. So who got the ~131,000 in interest. The bank did. It was used to pay interest to the people who made deposits into the bank. It was also used to pay the expenses of the bank: salaries, retirement, rent, electricity, computers, etc. If the bank is a company with investors they may have to pay dividends to them to. Of course not all loans are successfully paid back, so some of the payment goes to cover the loans that are in default. In many cases loans are also refinanced, or the house is sold long before the 20-30 year term is up. In these cases the amount of interest received for that loan is much less than anticipated, but the good news is that it can be loaned out again.",
"title": ""
},
{
"docid": "6a30438a8e0fe678ad8874732fadef31",
"text": "In short, your scenario could work in theory, but is not realistic... Generally speaking, you can borrow up to some percentage of the value of the property, usually 80-90% though it can vary based on many factors. So if your property currently has a value of $100k, you could theoretically borrow a total of $80-90k against it. So how much you can get at any given time depends on the current value as compared to how much you owe. A simple way to ballpark it would be to use this formula: (CurrentValue * PercentageAllowed) - CurrentMortgageBalance = EquityAvailable. If your available equity allowed you to borrow what you wanted, and you then applied it to additions/renovations, your base property value would (hopefully) increase. However as other people mentioned, you very rarely get a value increase that is near what you put into the improvements, and it is not uncommon for improvements to have no significant impact on the overall value. Just because you like something about your improvements doesn't mean the market will agree. Just for the sake of argument though, lets say you find the magic combination of improvements that increases the property value in line with their cost. If such a feat were accomplished, your $40k improvement on a $100k property would mean it is now worth $140k. Let us further stipulate that your $40k loan to fund the improvements put you at a 90% loan to value ratio. So prior to starting the improvements you owed $90k on a $100k property. After completing the work you would owe $90k on what is now a $140k property, putting you at a loan to value ratio of ~64%. Meaning you theoretically have 26% equity available to borrow against to get back to the 90% level, or roughly $36k. Note that this is 10% less than the increase in the property value. Meaning that you are in the realm of diminishing returns and each iteration through this process would net you less working capital. The real picture is actually a fair amount worse than outlined in the above ideal scenario as we have yet to account for any of the costs involved in obtaining the financing or the decreases in your credit score which would likely accompany such a pattern. Each time you go back to the bank asking for more money, they are going to charge you for new appraisals and all of the other fees that come out at closing. Also each time you ask them for more money they are going to rerun your credit, and see the additional inquires and associated debt stacking up, which in turn drops your score, which prompts the banks to offer higher interest rates and/or charge higher fees... Also, when a bank loans against a property that is already securing another debt, they are generally putting themselves at the back of the line in terms of their claim on the property in case of default. In my experience it is very rare to find a lender that is willing to put themselves third in line, much less any farther back. Generally if you were to ask for such a loan, the bank would insist that the prior commitments be paid off before they would lend to you. Meaning the bank that you ask for the $36k noted above would likely respond by saying they will loan you $70k provided that $40k of it goes directly to paying off the previous equity line.",
"title": ""
},
{
"docid": "77d204a01aa381794682d8311a8a933d",
"text": "\"Borrowing to invest is almost always a bad idea. You'd have to take out an unsecured loan, which has a higher interest rate, or a secured loan and put at risk whatever you are securing the loan with. You need some means to make payments on the loan, or if interest is being added to the balance then take the compounding effect into account with regards to the cost of the money and how much you will really end up owning. In order to come out ahead you need to 'invest' in something that will yield a return that is higher than the cost of borrowing the money, such high yields always come with higher risk, meaning that you will actually GET that return is less and less of a sure thing.. so now you are talking about the 'chance' to make money, Or a chance your 'investment' could fail, perhaps badly. Meaning you could well do nothing but end up in debt with little to nothing to show for it. If someone claims to have a 'sure thing' and is encouraging you to borrow money to invest in it, I'd be checking their back for a fin and remembering the lyrics \"\"when the shark bites ... scarlet billows start to spread\"\"\"",
"title": ""
},
{
"docid": "efb67fdb36add186c2b1c0a521abe042",
"text": "If they have borrowed money without paying it back, what makes you think you could get interest paid? The problem that you face first is to make clear to them that a loan is a loan. As long as they can get free money off you, they will keep borrowing.",
"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": "60b52ce239d29324e0aacd35c82de6e3",
"text": "It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due.",
"title": ""
},
{
"docid": "790bd1aa9a78f54d3bd90c4c236277fd",
"text": "\"There are two things I can think of that might be different in other countries: Until 2013, American Express, Visa and MasterCard prevented businesses from charging extra for credit card usage, and credit card surcharges still illegal in several states. Since credit card companies add a surcharge to credit card purchases, and merchants can't pass that onto credit card users, they just make everyone pay extra instead. Since everyone gets charged the credit card surcharge, you might as well use a credit card and recoup some of that via \"\"rewards\"\" points. Almost all credit cards here have grace periods, where you won't be charged interest if you pay back your loans in full within some period of time (at least 21 days). This makes credit cards attractive to people who don't need a loan, but like the convenience that credit cards provide (not carrying cash, extra insurance, better fraud protection). Apparently grace periods aren't required by law here, so this might be common in other countries as well.\"",
"title": ""
},
{
"docid": "41f9066e5d2ad503b9ba9017aad63d7b",
"text": "\"Money relationships are the opposite of friend relationships. That's why there's so much danger in loaning money to a friend - if the transaction doesn't work out well for one of you, it can destroy the friendship. Many of the answers here suggest you be prepared for the possibility that your friend will not pay you back. This is called a \"\"gift\"\". Give your friend the money, and trust that they will feel grateful. That gratitude will create generosity, and they will in turn seek to give gifts to you and to others in your circle. If you're not ready to give money to your friend, then you're better off not doing it. If you are ready to give money to your friend, then do it without expectation of return.\"",
"title": ""
},
{
"docid": "eafcee4e844d3264b7139caa74e2ecd8",
"text": "\"As others have said: unless you can find someone willing to make a zero-interest loan, the answer is no. If you can figure out how to turn a \"\"0% for first N months\"\" credit card offer onto a leveraged investment or something of that sort -- seems unlikely -- maybe.\"",
"title": ""
},
{
"docid": "7b000a97892cc975d572e05f9af9505f",
"text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due.",
"title": ""
},
{
"docid": "d8b3cd9cdfce940bc2eec7386cf28b95",
"text": "He would spend it into the economy that is accepting his dollars. As an example, the apple maker might borrow $100 with $10 interest for the deer shank, then later on get the $100 back from the deer hunter in trade for 150 apples, and then pay this $100 to the banker. Now the apple maker still needs $10 to pay off his loan. The banker says he'll trade his $10 in interest profit for 15 apples, now the apple maker can resolve his debt without further borrowing. The difference between spending interest earnings and issuing a loan is that when the banker is spending, they are getting something for their own use, when they are issuing the loan, they aren't getting anything but the promise to repay that loan.",
"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": "4414e027b470e0bbfd52df49d5900c61",
"text": "I would advise against this, answering only the first part of question #1. Borrowing and lending money among friends and family members can often ruin relationships. While it can sometimes be done successfully, this is most likely not the case. All parties involved have to approach this uniquely in order for it to work. This would include your son's future significant other. Obviously you have done very well financially, congratulations. Your view for your son might be for him to pay you off ASAP: Even after becoming a doctor, continue to live like a student until the loan is paid off. His view might be more conventional; get the car and house and pay off my loans before I am 50. He may start with your view, but two years in he marries a woman that pressures him to be more conventional. My advice would be to give if you can afford to, but if not, do not lend. If you decide to lend then come up with a very clear agreement on the repayment schedule and consequences of non-payment. You may want to see a lawyer. For the rest of it, interest payments received are taxable.",
"title": ""
},
{
"docid": "1d34007d3ff18343f2d2a187102c0548",
"text": "\"A few thoughts: You said, To me it makes sense that if he accidentally put his own money in when he wasn't supposed to, he could just take it out and pay the tax on it and be fine. In this case, he would be putting his own after-tax money in, and wouldn't be able to deduct it, so the act of putting it in and taking it back out in the same tax year would be as if the transaction never occurred at all. He would not have to \"\"pay the tax on it\"\". As for this question: Is there any penalty to his employer if they contribute to an HSA on his behalf, knowing that he is not eligible, and that the money will be an excess contribution? It's good that your son is prepared to treat it as regular income and pay the appropriate taxes. However, the employer should be the one doing that. They should be treating it as regular income and taking out FICA and paying their end of FICA too. If they aren't doing that, technically they are breaking the law. The employer really shouldn't be making the contributions at all, and if they ever bothered to correct this, this article suggests that the employer may be legally allowed to drain the HSA account and take their money back out of it, but only for the same tax year. Apparently they can do this without your son's consent. If that's true, it may make sense to withdraw all money from that account immediately as soon as the money arrives, since they cannot take the money back if it is no longer there. Once the money leaves the HSA account the employer has no choice but to change it to income and if they don't, your son must declare it as such (which it sounds like he is prepared to do). This doesn't really answer your question of whether or not the employer can be penalized- I would assume yes, but not too badly. The worst case scenario for them would probably be just having to pay all the back FICA on those funds if they aren't doing so already. Maybe an interest penalty as well. All that being said, I'd recommend talking to an accountant. The most important thing you want to be sure of is that your son cannot possibly be liable for any wrongdoing. Particularly I would get confirmation on pulling money out of the HSA that you know shouldn't be there in the first place, just to make sure there is no possible way to get dinged for that.\"",
"title": ""
}
] |
fiqa
|
75422577c732d83805844d3c06402777
|
What does this diagram from Robert Kiyosaki about corporations mean?
|
[
{
"docid": "c8672979540e87260ba5fd97c86aadc9",
"text": "It looks like RK is encouraging tax fraud. Suggesting that one have their business cover personal expenses sounds like the advice that got Leona Helmsley in hot water.",
"title": ""
},
{
"docid": "c2a80bbadd20bcfeb527a72ff20e820a",
"text": "\"These types of diagrams appear all throughout Kiyosaki's Rich Dad, Poor Dad book. The arrows in the diagrams represent cash flow. For example, the first two diagrams of this type in the book are: The idea being presented here is that an asset generates income, and a liability generates expenses. According to the book, rich people spend their money buying assets, while middle class people buy liabilities. The diagram you posted above does not appear in the edition of the book I have (Warner Books Edition, printed in 2000). However, the following similar diagram appears in the chapter titled \"\"The History of Taxes and the Power of Corporations\"\": The idea behind this diagram is to demonstrate what the author considers the tax advantages of a personal corporation: using a corporation to pay for certain expenses with pre-tax dollars. Here is a quote from this chapter: Employees earn and get taxed and they try to live on what is left. A corporation earns, spends everything it can, and is taxed on anything that is left. It's one of the biggest legal tax loopholes that the rich use. They're easy to set up and are not expensive if you own investments that are producing good cash flow. For example; by owning your own corporation - vacations are board meetings in Hawaii. Car payments, insurance, repairs are company expenses. Health club membership is a company expense. Most restaurant meals are partial expenses. And on and on - but do it legally with pre-tax dollars. This piece of advice, like so much of the book, may contain a small amount of truth, but is oversimplified and potentially dangerous if taken a face value. There are many examples, as JoeTaxpayer mentioned, of people who tried to deduct too many expenses and failed to make a business case for them that would satisfy the IRS.\"",
"title": ""
}
] |
[
{
"docid": "088df15e0ea3ad2ead12b98c4f94df99",
"text": "This article leaves quite a bit of information out, I gather. Poorly written. How many corporations is he getting paid from? What were the terms of the agreement? It sounds like Kiyosaki himself isn't going bankrupt, it sounds like some small, off-shoot is taking the brunt of the damages so the rest of his assets can move on. This guy knows how to protect himself and his companies. This could be nothing more than a parking ticket for him, and this news website decided to sensationalize it. What a surprise.",
"title": ""
},
{
"docid": "037ff4f1b2515f5e2836409f3f382fe3",
"text": "\"That has not been disproved. What the quote means is \"\"when [workers as a collective] earn more, [businesses as a collective] get more customers\"\". It's impossible to disprove this, because it's like a kind of economic tautology. It's like, if I give you five one dollar bills, how many five dollars will you have. What you mean to argue is that that's spacious, because the real world is more complicated.\"",
"title": ""
},
{
"docid": "6544dfbaa3555ca482c8c4d30ba723ce",
"text": "\"Actually, this quote is bogus. It is from a book (Web of Debt by Ellen Brown). Even Brown herself now acknowledges this fact: Chapter 7, #20 at http://webofdebt.wordpress.com/questions-and-answers/response-to-gary-north/response-to-gary-north-2/ From Brown: \"\"A bogus quote from Garfield on the control over money. I was already alerted to that. Garfield is no longer mentioned in my book.\"\"\"",
"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": "a6e5cbb198a4572e0a15ab50c115e729",
"text": "Just clarifying in case some people just skim and walk away thinking the author is bankrupt. Kiyosaki is involved in many business ventures. One of his companies filed for bankruptcy, which is a separate entity to himself. He himself did not lose any personal assets and is still very rich. Thanks for reading.",
"title": ""
},
{
"docid": "5e339735f623110bdf034ab57031d132",
"text": "This is supply side nonsense. The primary driver of growth is demand. If demand is growing, then lower taxes will allow the company to meet growing demand faster. However, if demand is stable and currently being met by the company, reducing taxes will only enrich shareholders at the expense of society at large. Unless there is growing demand, a corporation will always choose to allocate profit via tax cuts to shareholders rather than to employees in the form of jobs or raises.",
"title": ""
},
{
"docid": "313c3d47572e224eea5f71a63b51c006",
"text": "\"I appreciate the time and thought you put into your comment. I, however, disagree with much of what you said. I don't think you understand the \"\"anti-business\"\" mentality at all. In fact calling it antibusiness to me sounds just horribly slanted. The wrongs that are commited by the business community should not be dismissed because they are \"\"hard to track\"\". Even if the statement is true, it doesn't matter. There is no excuse and frankly statements like that sound extremely apologetic. With that said, I agree with you 100% that a lot of the discourse on this subreddit is not conducive to discussion/learning. I certainly don't want to discourage you from posting. The frustration the \"\"business community\"\" feels by being misunderstood is certainly shared by the other side. If you would like to hear my thoughts on anything specific feel free to ask.\"",
"title": ""
},
{
"docid": "94d6cab7397de0ae8041fbfe4bf52214",
"text": "This actually makes sense, although it's about twice as complicated as any concept I've seen laid out in a business, rather than economics context, so it's no surprise that people (as you say) get it wrong. Also, it emphasizes that corporate taxation is not exactly an easy thing to deal with.",
"title": ""
},
{
"docid": "6f5cd0e2810aa265ab71d2be22529cb9",
"text": "Read your link. Thanks. The basic idea is that capitalism will work it out. And that each of us will pay a security agency to handle our disputes, and that rival security agencies will collaborate and negotiate with each other. And that private courts will be fair to protect their brand. This overlooks some harsh realities that already exist with capitalism. Customers generally do not have time to purchase based on accurate information for every product. For example, airlines compete almost solely on price. Insurance companies compete on price and provide horrible, sometimes fraudulent service. But customers are left in the dark (who is to say the insurer committed fraud if it disputes it?) Banks operate with gross incompetence and deceipt and are left untouched by the justice system. We have already discovered that just letting corporations operate without an restrictions creates serious problems. There has to be force that tempers their worst tendencies, even if that force (government) is imperfect. I remain confused why people think that corporations are somehow more trustworthy and efficient than government agencies. Or that corporations can be used to address externalities.",
"title": ""
},
{
"docid": "02fa66cfa69d5558e602110f32d2b89a",
"text": "Activist Investor is the entrenched capitalists fake news meme. Trump wants to pass a law that says shareholders don't even get a vote until they pass a certain threshold on ownership % of a company so they can keep all the little people from having any say. Ownership isn't really ownership unless you're rich I guess. Democracy bad! Freedom! America!",
"title": ""
},
{
"docid": "0e56e61a49df070c62eeaa3456510c9e",
"text": "\"It's a front; a farce. It's nearly suicide for a corporation (which relies on voluntary customers) to say they're \"\"against\"\" climate change - interpret that statement how you will. So they say \"\"*oh yeah, environment, great stuff, we love it, pollution bad, green good - we'll reduce our CO2*\"\". So they find some stupid project, reduce their emissions by whatever-% - ya know, throw a couple spare bucks at it, greenwash the shit out of it. And probably get half those dollars back as a green tax credit anyway. Meanwhile, their bottom line and day-to-day operations are largely unaffected. And the costly stuff - MACT compliance, legislation, taxes - the things that make environmental responsibility *really* happen - they want no part of that. So they pay of their politicians to promote that as \"\"*job killing*\"\" and quietly let them haggle over details. Or better yet - stall indefinitely. So everybody wins. Kind of.\"",
"title": ""
},
{
"docid": "9da812b213cc5c3e9363a2765e600f72",
"text": "This creates high levels of efficiency, but is efficiency really what we need? A robot is very efficient, and increases income, but for who? When a corporation absorbs another, it does so *with the expectation* that redundant jobs will be shed, and that the income from those jobs will go to the shareholders. And so one can see where income inequality has it's roots.",
"title": ""
},
{
"docid": "cc75b92e879150b5457e0281a3e31053",
"text": "> People should come before profits. The entire Corporate Charter process is in United States law. It does say profit comes before people, it's called fiduciary responsibility. I haven't seen any political parties rise around this topic -- so I'd assume corporations hurting people isn't as big as Reddit makes it out? Otherwise most Americans would change how they vote and find a new party?",
"title": ""
},
{
"docid": "0a105efb12a70353eeb386335cb84764",
"text": "\">\"\"Our support for these (shareholder resolutions on climate risk) proposals is not a matter of ideology, it's a matter of economics,\"\" he said. \"\"To the extent there are significant risks to a company's long-term value proposition, we want to make sure there is long-term disclosure of those risks to the market.\"\" the irony is indescribable\"",
"title": ""
},
{
"docid": "e51a130fe1c7a6a69cca14afabb9d37e",
"text": "Whether or not you want to abstain or throw away the proxy, one reason it's important to at least read the circular is to find out if any of the proposals deal with increasing the company's common stock. When this happens, it can dilute your shares and have an effect on your ownership percentage in the company and shareholder voting control.",
"title": ""
}
] |
fiqa
|
9cde7a12c4c457690fad783688f46560
|
Peer to peer lending in Canada?
|
[
{
"docid": "8586796e8d64cc6ebeb5ef6bc6cc0f27",
"text": "Yes and no, P2P Capital Markets is similar concept but is more geared towards business loans. Community Lend used to offer this service but has stopped.",
"title": ""
}
] |
[
{
"docid": "38f7e76038c4ca35c5a3dfcd210ed4b8",
"text": "A friend recently bought an 800€ TV on 0% financing. Sounded like a sensible thing to do. Why pay 800 when you can pay 80pm for 10 months? It took 30mins to set up the 'loan'. She had to sign all kinds of documents, giving away much personal information (age, employment info, income, email address etc). She now has a financial relationship with an institution which has nothing to do with the item purchased. She is bombarded with all kinds of financial offerings. She regrets taking out the finance. She had the money. The hassle and the unwanted links to banks make the deal unattractive. Perhaps she should have tried to make a cash deal...",
"title": ""
},
{
"docid": "2a7deb3d6c5891fea008a3d261740e7d",
"text": "\"Credit scores are not such a big deal in Canada as they are in the US and even some European countries. One reason for this: the Social Insurance Number (SIN number) isn't used for so many purposes like the Social Security Number (SSN) in the US. The SIN number isn't even required to get credit (but with some exceptions it is needed to open an interest-bearing savings account, so that the interest income can be reported). You can refuse to provide the SIN number to most private companies. Canada also has one of the highest per-capita immigration rates of any large country, so new arrivals are expected, and services are geared up for them. Most of the banks offer special deals for \"\"New Canadians\"\". You should get a credit card (even if just a secured credit card) through them with one of these offers to start a credit file anyway, but there's no need to actually use it much. Auto-paying a utility bill through the card, and paying it off in full each month, is one way to keep it active. No need to ever pay any interest. Most major apartment rental firms will expect a good proportion of their renters to be new to Canada, so should have procedures in place to deal with it (such as a higher deposit). You should not give them your SIN for a credit check, even when you're more established. Same for utilities, they can just charge a higher deposit if they can't credit check you. For private landlords, everything is negotiable (but see the laws link at the end of this answer). You will later need a credit rating for a mortgage on a house (if not paying cash), so it's worth getting that one token credit card. Useful for car rental also. Here's a fairly complete summary of the laws on renting in Canada, which includes the maximum deposits that can be asked for, and notice periods.\"",
"title": ""
},
{
"docid": "8b7fa896641c253bb54b8cc490b4d8ee",
"text": "Yes, it is. Got to start somewhere. Typically directly through a company itself. Check out this site that lists a bunch of them and their minimum requirements. Not many only accept $100 but there are a few. ie. ACTIVEnergy Income Fund, CIBC, COMPASS Income Fund, Suncor Energy Inc. and a few others.",
"title": ""
},
{
"docid": "0289022308ebf38fe78e9fa60167689b",
"text": "Lending isn't profitable when interest rates are this low. Consider what's involved to offer a savings or checking account. The bank must maintain branches with tellers. The bank has to pay rent (or buy and pay property taxes and utilities). The bank has to pay salaries. The bank has to maintain cash so as to make change. And pay for insurance against robbery. All of that costs money. At 6% interest, a bank can sort of make money. Not great money, but it takes in more than it has to pay out. At 4% interest, which is about where ten year mortgage rates are in Canada, the bank doesn't make enough margin. They are better off selling the loan and closing their branches than offering free checking accounts. An additional problem is that banks tend to make money from overdraft fees. But there's been a move to limit overdraft fees, as they target the most economically vulnerable. So Canadian banks tend to charge monthly fees instead. UK banks may also start charging monthly fees if interest rates stay low and other fees get curtailed.",
"title": ""
},
{
"docid": "55dc1bbd3528ca485ea549a23d352fa9",
"text": "In the United Kingdom, there is a leading company that has been offering Progressive business funding solutions to the businesses for the last 120 years. Their service areas are South Africa, New Zealand, Ireland, Canada, Australia, USA, etc.",
"title": ""
},
{
"docid": "bb45f0f3cdc5a4feeae93a9c8bf160c7",
"text": "The idea is great but US securities laws impose a huge burden on these businesses. Specifically [Rule 502(c)](http://taft.law.uc.edu/CCL/33ActRls/rule502.html) of Reg D prohibits 'general solicitation and advertising' - such as using the internet. There is currently pending legislation to amend the [US Securities act of 1933 sec. 4(2)](http://taft.law.uc.edu/CCL/33Act/sec4.html) regarding public offerings to help reduce such barriers, but as it stands there are significant barriers to entry in the market. SEC filing and reporting requirements, especially after Dodd-Frank, are onerous to say the least, and running direct lending services are at the moment largely cost prohibitive due to these requirements.",
"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": ""
},
{
"docid": "020f958d49f7f77b5400dc0ac1d52896",
"text": "If money is more expensive (costs more to borrow) then fewer people will be able to qualify to make the payments for a particular size of mortgage. This reduces the number of potential buyers for property at that price. As sellers still want to sell, they will move their prices down to where more people can afford to buy. So rising interest rates create downward pressure on housing prices. But Toronto is the biggest city in Canada. I'd expect part of the high prices there is the location: lots of people want to be close to lots of activities, action, and opportunity. Unless something catastrophic happens, I don't see Toronto losing that advantage. If anything, it's going to get a tad warmer up there in the coming decades.",
"title": ""
},
{
"docid": "1a29abe8bc565c446b56b3aa8d4130e1",
"text": "I was active in Prosper when it started up. It was very easy to get attracted to the high risk loans with big interest rates and I lost about 14% after all my loans ran their course. (There's 10 still active, but it won't change the figure by much). Prosper has wider standards than Lending club, so more borrowers with worse credit scores could ask for loans. Lenders could also set interest rates far lower, so they could end up having loans with rates lower than the risk implied. This was set up with the idea of a free market where anyone could ask to borrow and anyone could loan money at whatever interest rate they wanted, It turns out a lot of lenders were not as smart as they thought they were. (Aside: it's funny how people will clamor for a free market, but when they lose money will suddenly be against the free market they said they wanted, this seems to apply to both individual p2p lenders up to massive multinational banks.). Since then Prosper has tightened their standards on who can borrow and the interest rates are now fixed. So I expect going forward it will be less easy to lose a bunch of money. The key is that one bad loan will erase the return of many good ones. So it's best to examine the loans carefully and stick with the high quality. Simplified Example If you have 10 1 yr loans of $100 each paying 10% interest/year, you get 10% return at the end of the year, so $100 (10% of $1000.). BUT if one loan goes bad at the start, you have lost money. So a 90% success rate in picking borrowers leads to a loss. You want to diversity over quite a few loans and you want to fund quality loans. I think really enjoyed investing through Prosper, because it gave me an insight into lending and loss ratios that I had not had before. It also caused me to look at the banks with even more incredulity when the case of the no-doc loans and neg-am loans came to light.",
"title": ""
},
{
"docid": "a8271c5f5c72a8011814eda10ffe04a2",
"text": "Canadian here: the US is our biggest customer, so we were impacted economically. I expected that within a year or two of the US housing collapse, we would also be hit, but something else happened: when the US dropped interest rates like a stone, we were also forced to drop interest rates. This meant that suddenly, money was being handed out for very very cheap, so cheap it was almost free if you had a decent job and good credit. The housing market here paused for a brief moment, and then continued climbing. It never stopped until some new rules were implemented, aimed mostly at foreign buyers and investors, and put in place this year. It appears however that this current drop in prices may be a temporary dip. The average cost of a home in Toronto is still around $1m CAD, and our real estate is still among the most expensive in the world if you look at how much we pay compared to our incomes. In some places, houses have basically tripled over the past decade. My point here is that Canadian home owners were not impacted negatively by the 2008 crisis. In fact, once the free money started flowing and prices went up accordingly, Canadian home owners were enriched as a direct result of the 2008 US housing crisis. The situation is clearly unsustainable, and the market is irrational. It's easy to say that we are in a bubble but it is impossible to tell when it will crash. In Canada, it's harder to walk away from mortgage debt; if you're underwater on your home, and the bank forecloses on you and sells the house for less than you owe, you still owe the bank the remainder of the money (in most provinces).",
"title": ""
},
{
"docid": "8f08d6c1787b0d0596cfff5c0642ddfa",
"text": "It has to do with return. I don't know if Canada has a matching feature on retirement accounts, but in the US many companies will match the first X% you put in. So for me, my first $5000 or so is matched 100%. I'll take that match over paying down any debt. Beyond that, of course it's a simple matter of rate of return. Why save in the bank at 2% when you owe at 10-18%? One can make this as simple or convoluted as they like. My mortgage is a tax deduction so my 5% mortgage costs me 3.6%. I've continued to invest rather than pay the mortgage too early, as my retirement account is with pre-tax dollars. So $72 will put $100 in that account. Even in this last decade, bad as it was, I got more than 3.6% return.",
"title": ""
},
{
"docid": "66e95cc2d4756ef1261006aef5665ad3",
"text": "Social Lending may help you qualify for a loan, but doesn't necessarily provide better rates. You have to shop around to get the best rates, this is a market as any other, so don't expect one place to be consistently below the market - either the market will move, or the place will move eventually, everyone wants to earn the most for the buck.",
"title": ""
},
{
"docid": "520e7ba0e4b551aa44c93970fffdde0d",
"text": "On pensions, part of the issue will be how well funded they are. Most pensions are not completely funded. In the US pension payments are insured to an annual cap by the PBGC. So you can loose out on part of your pension payment. I don't know what/if there is an equivalent in Canada.",
"title": ""
},
{
"docid": "296a9ef0fe614daa0f69631c91d326d5",
"text": "I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/metacanada] [Canada Pension Plan Investment Board Invests US$400 Million in WME│IMG](https://np.reddit.com/r/metacanada/comments/6sdk52/canada_pension_plan_investment_board_invests/) [](#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": ""
},
{
"docid": "afc9e163be701e521007a05232e59cc0",
"text": "I am not entirely sold on investing in start-up companies, but I really like the idea of crowdfunding investments. I've been an investor at [LendingClub](https://www.lendingclub.com/) for 10 months now and am quite happy so far. For those of you who don't know, Lending Club is where you can crowdfund consumer loans. I'm also very interested in [Solar Mosaic](https://solarmosaic.com/). Once their quiet period ends I am planning on investing in solar projects through them. Of course I'll want to see some data related to their risk and returns, but I love the idea of earning a return from funding solar projects. I think that crowdfunding allows you to invest in areas that are normally off-limits to those of us who aren't rich. At the very least these investments offer a nice source of portfolio diversification.",
"title": ""
}
] |
fiqa
|
7bea26a08ccd1aaf5e5f02e5f3e8a9cf
|
Washington State tax filing extension?
|
[
{
"docid": "7691b04c045df57a892e781356f4004f",
"text": "Washington State doesn't have a state income tax for individuals, so unless you've got a business there's nothing to file. Find out more on their website.",
"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": "cfbe958f8ed0a8af91bbfb143871a2cb",
"text": "The obligation is contractual, so you need to read the contract to answer your question. However, since you paid for the service provided, I see no way they can force you buy any other service from them. They cannot file your tax returns without your explicit consent (on a form dedicated to that, dated and having the numbers matching the return filed - not something you can sign before the actual return is ready). Worst case they can claim you owe them more money, but since you paid for the services provided, I can't see how they can have that stand in court as well. Bottom line - even if the contract has such an obligation, I cannot see how it can be enforced. As to the mistake they noted... I wouldn't rely on H&R Block advice in any matter. Very likely, the person you were talking to was not even licensed to provide tax advice. You're lucky if the person has passed CRTP exams (in California they're legally required), but I seriously doubt their clerks are EAs or CPAs (the only designations other than a lawyer legally allowed to provide tax advice). Tax preparers (CRTPs included) are only allowed to provide advice pertaining to the preparation of the tax return they're currently engaged to prepare. Claiming income is sourced or not sourced in NY is borderline, IMHO. If they got it wrong (and to me it sounds as they did) you can sue them for damages. If your situation is tricky and it is too late to get an appointment with a proper adviser - file an extension (form 4868) and deal with it after the April busy season.",
"title": ""
},
{
"docid": "6e823a2231fe80ac405b0c2fe35a9cf4",
"text": "You can file a revised W-4 with your employer claiming more allowances than you do now. More allowances means less Federal tax and (if applicable and likely with a separate form) less state tax. This doesn't affect social security and Medicare with holding, though. That being said, US taxes are on a pay-as-you-go system. If the IRS determines that you're claiming more allowances than you're eligible for and not paying the proper taxes throughout the year, they will hit you with an underpayment penalty fee, which would likely negate the benefits of keeping that money in the first place. This is why independent contractors and self-employed people pay quarterly or estimated taxes. Depending on the employer, they may require proof of the allowances for adjustment before they accept the revised W-4.",
"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": "0a9bcaa84bf501af4ebd583840d4264a",
"text": "Your best bet is going to be contacting TaxAct directly for their information. If you do enter your spouses information and choose to purchase their deluxe product, I would think you might end up paying for the second efile. I have used their deluxe version for many years now, but choose it mostly because of the free state efiling and not for the ability to determine whether or not to file separately. In my case, it makes sense to file jointly and not file separately. The deluxe version allows you to portion out your deductions and see which method of filing gives you the lowest total tax bill. Here's the link directly to TaxAct's support: https://www.taxact.com/tsupport/support_request.asp",
"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": "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": "28d9aa347dd6586e63001086f0a889da",
"text": "California is very aggressive when it comes to determining residency. While you have a legitimate defense, I suggest talking with a California-licensed CPA or EA practicing in California, which are experienced in dealing with the FTB residency audits.",
"title": ""
},
{
"docid": "4d8e6721496b0d8ad288f2a00eb81a13",
"text": "It matters because that is the requirement for the 83(b) selection to be valid. Since the context is 83(b) election, I assume you got stocks/options as compensation and didn't pay for them the FMV, thus it should have been included in your income for that year. If you didn't include the election letter - I can only guess that you also didn't include the income. Hence - you lost your election. If you did include the income and paid the tax accordingly, or if no tax was due (you actually paid the FMV), you may try amending the return and attaching the letter, but I'd suggest talking to a professional before doing it on your own. Make sure to keep a proof (USPS certified mailing receipt) of mailing the letter within the 30 days window.",
"title": ""
},
{
"docid": "bfef03612efdf6839e7a6e282ba702e6",
"text": "Based on these dates in your question: Going back over my records, I was able to recall the following: Maryland realized recently that on the 2009 Federal 1040 Form you stated that on December 31 2009 you liven in Maryland. They are wondering where the state tax form is. DC, MD and VA due to reciprocity collect income tax based on where you live not where you work. So when you moved in August 2009 and again in August 2010 you needed to file new state versions of the W4. The fact you did or didn't submit to your employer a correct state W-4 is not directly related, because you would owe the tax regardless. The W-4 just makes sure that something close to the correct amounts are withheld and sent to the appropriate state capital. I seem to remember something about not having to pay Maryland state taxes since I not only lived in the state for less than 6 months but also did not work in the state. The reciprocity between DC, MD and VA says that Maryland gets the money because that is where you lived. The last time I had to do a part year the law was that they would forgive a half a month. In other words if you move in late December or early January you could ignore that small time period and avoid having to file in two states. In some cases people argue that some short term moves were never meant to be permanent. You might be able to claim that except the fact that your 2009 federal tax form you most likely claimed you lived in Maryland. The next issue is time and money. If Maryland says you owe them money for that time period, and if they still have the ability to force you to pay it; This is where the issue of correct state W-4 comes in. If the money during the period you lived in Maryland was sent to Virginia, you should have had that money refunded by Richmond in the spring of 2010. But if there was no W-4 filed with your employer that would mean that Maryland didn't get any money for 2009. If you didn't tell Richmond you moved in 2009 they may not have refunded everything because they thought you lived there all year. Because of the time that has passed it may be too late to fix your Virginia filing, so they may not refund you excess payment to them. Maryland is interested in calculating how much you should have paid them in 2009. They are only looking at what you told the feds you made, and they may be assuming that you lived there the whole year. But until you file correctly that have no ability to calculate what you really owe. You need professional advice. You need to know what they can and can't collect. You also need to know what you can and can't get back from Richmond. And since it also may impact your filings for 2010 you will want to get that resolved at the same time.",
"title": ""
},
{
"docid": "871f4a0f6ba8fb25bd8237f7f9bc9b15",
"text": "I'd be surprised if this ended in a materially-damaging final settlement. It may take more than 5 years to resolve, unless a smoking gun is produced. If PWC and outside counsel really issued written opinions, it could get a lot messier. Especially when we tip over into another recession, the IRS will come under intense Congressional pressure to cut a nominal deal.",
"title": ""
},
{
"docid": "00b3c587b025b5ae800f89468ba7f5d0",
"text": "To be on the safe side - you'll want to get the full invoice. You don't need to actually print them, you can save it as a PDF and make sure to make your own backups once in a while. Only actually print them when the IRS asks you to kill some trees and send them a paper response, and even then you can talk to the agent in charge and check if you can email the digital file instead. The IRS won't ask for this when you file your taxes, they will only ask for this if you're under audit and they will want to actually validate the numbers on your return. You'll know when you're under audit, and who is the auditor (the agent in charge of your case). You'll also want to have some representation when that happens.",
"title": ""
},
{
"docid": "45f7684814dbac7f3eed5ce793c0413b",
"text": "The purpose of making sure you met the safe harbor was to avoid the penalty. Having achieved that goal the tax law allows you to wait until April 15th to pay the balance. So do so. Put enough money aside to make sure you can easily make that payment. I was in this exact situation a few years ago. I planned my w4 to make the safe harbor, and then slept easy even though the house settlement was in May and I didn't have to make the IRS payment unti 11 months later in April.",
"title": ""
},
{
"docid": "1d70c66d71539d742252756e37426e4d",
"text": "If you took advantage of options like a home buyers plan (HBP) you definitely need to file since you must designate how much of the plan to repay. Your employer does not know about what you do with your money so cannot take this into account for the withheld taxes. If you do not report repayment of the HBP it will be treated as a withdrawal from your RRSP i.e. additional income for that tax year.",
"title": ""
},
{
"docid": "e39a1801cbfa777e2fda516c1822da31",
"text": "\"It's not quite as bad as the comments indicate. Form 1040ES has been available since January (and IME has been similarly for all past years). It mostly uses the prior year (currently 2016) as the basis, but it does have the updated (2017) figures for items that are automatically adjusted for inflation: bracket points (and thus filing threshhold), standard deductions, Social Security cap, and maybe another one or two I missed. The forms making up the actual return cannot be prepared very far in advance because, as commented, Congress frequently makes changes to tax law well after the year begins, and in some cases right up to Dec. 31. The IRS must start preparing forms and pubs -- and equally important, setting the specifications for software providers like Intuit (TurboTax) and H&RBlock -- several months ahead in order to not seriously delay filing season, and with it refunds, which nearly everyone in the country considers (at least publicly) to be worse than World War Three and the destruction of the Earth by rogue asteroids. I have 1040 series from the last 4 years still on my computer, and the download dates mostly range from late September to mid January. Although one outlier shows the range of possibility: 2013 form 1040 and Schedule A were tweaked in April 2014 because Congress passed a law allowing charitable contributions for Typhoon Haiyan to be deducted in the prior year. Substantive, but relatively minor, changes happen every year, including many that keep recurring like the special (pre-AGI) teacher supplies deduction (\"\"will they or won't they?\"\"), section 179 expensing (changes slightly almost every year), and formerly the IRA-direct-to-charity option (finally made permanent last year). As commented, the current Congress and President were elected on a platform with tax reform as an important element, and they are talking even more intensely than before about doing it, although whether they will actually do anything this year is still uncertain. However, if major reform is done it will almost certainly apply to future years only, and likely only start after a lag of some months to a year. They know it causes chaos for businesses and households alike to upend without advance warning the assumptions built in to current budgets and plans -- and IME as a political matter something that is enacted now and effective fairly soon but not now is just as good (but I think that part is offtopic).\"",
"title": ""
}
] |
fiqa
|
9f630f6fe3006193207f7c682f2d18df
|
Freehold and Leasehold for Pub/Bar?
|
[
{
"docid": "f401316bf718c79216a5e715b1ea07d1",
"text": "\"In the strictest sense of the words, Freehold and leasehold mean what you think they do. Freehold is that you own it outright and leasehold is a rental situation. That being said, there are scenarios like what Peter K. mentioned in his comment, where you're purchasing the building and business outright, but the land it sits on is actually being leased from a separate land-owner. You may also be seeing the business itself being offered as freehold or leasehold. In this case, you may be purchasing the business of the pub from a pub company, but the building the pub resides in is leased from a property owner. The \"\"pub\"\" would be the business plan, decor, alcohol partnerships, etc. but not the physical structure in which it resides. You should really look into hiring an Estate Agent to help you find what you're looking for. They will be able to assist in narrowing down your list, and may know of opportunities you're not seeing in ads.\"",
"title": ""
},
{
"docid": "268885bbade6eaf5bbb7e23b4c7c07be",
"text": "You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer.",
"title": ""
},
{
"docid": "7e108f84f34d9b14d5f4853877b84669",
"text": "Freehold is simple - it's when you own the building and the land it's on. There's no rent to pay (but you will still have to pay taxes!). Leasehold is when the property is leased - rented out for a fixed period that could be anything from 6 months to 199 years. There will be a rent to pay. The person who owns the property is still the freeholder. There may be some confusion caused by what is being sold. You can buy out a lease from the current leaseholder. It's also possible to buy the freehold of a property that is currently leased to someone else. It is also possible to have a freehold building on leasehold land.",
"title": ""
}
] |
[
{
"docid": "3b4a71f1757cedfab7de46ccf168bda1",
"text": "Alas, institutions do not always act rationally, and being an outlier by never having debt may be bad enough. Therein is your problem. The question, then, is do you want to do business with institutions that are not acting rationally? While I cannot specifically speak to Canadian business practices, I have to imagine that in terms of credit history as a prerequisite to a lease, it can't be too different than America. It is possible to live without a credit score. This is typically done by those with enough resources that do not need to borrow money. To make transactions that commonly use credit scores, such as a lease, they will provide personal financial statements (balance sheets, personal income statements, bank statements, pay stubs, tax returns, etc...) to show that they are credit-worthy. References from prior landlords may also be beneficial. Again, the caveat is to elect to only conduct business with those individuals and institutions that are intelligent and rational enough to be able to analyze your financial position (and ability to pay) without a credit score. Therefore, you'll probably have better luck working with individual landlords, as opposed to corporate-owned rental complexes.",
"title": ""
},
{
"docid": "7a3b5dba9f57e8cd65d2b20b9781823e",
"text": "\"Frequently selling and buying properties is generally not advisable in Germany due to the high cost for property purchase tax (\"\"Grunderwerbssteuer\"\") and land registration fees (\"\"Grundbucheintrag\"\"). You can generally assume that ever time you trade homes, you pay about 10% extra. So it is likely a good idea to keep your property and rent it out while you don't need it so you can use the rent to pay for your new room. That's especially true if you expect the property to increase in value. Also, due to the low interest rate right now, real estate is practically the only good capital investment. A 85k asset which makes you 4.8k each year is a return of investment of 5.6%*. Any financial asset promising you that kind of dividend at the moment is likely equivalent to gambling. * yes, I ignored maintenance costs, but it's still a really good deal. If you want to rent out your flat as stress-free as possible, give it to a property management company (\"\"Hausverwalter\"\"). In exchange for a percentage of the monthly rent they will take care of all the small stuff (like hiring handymen to fix broken toilets). You might still have to pay for really expensive investments, though (like replacing a leaking roof). But when something like that happens, you should have no issue to finance it with a loan because you have a real estate as a security. However, keep in mind that the German tenancy law might make it difficult (but not impossible) to get rid of the tenant in case you want to move back into the apartment. Google \"\"Mietrecht Eigenbedarf\"\" for more details. Should you decide after your study that you don't want to move back, you can always sell the flat with the tenant. But rented properties usually get far lower prices on the real estate market than empty ones. Regarding covering your cost of living besides rent during your studies: If you are eligible for BAföG (state-sponsored student loan), you should take it, because it's an offer simply too good to refuse. It's literally free money. But unfortunately you are not, because you own too much real estate wealth you are not living in. But you should ask your bank for a loan backed by said property. That way you will likely pay far less interest than with a regular private student loan which isn't backed by anything except the hope for a relevant degree.\"",
"title": ""
},
{
"docid": "9440b484bb97504f5e7bf8dfd994246b",
"text": "If you can get the health ratios based off of the total sales the tenant does divided by their rent plus nets. I know a quite a few big firms look at that to determine the health of the tenant. Another item would be a surrounding market overview. Occupancy rates, average rent, big clients, future developments. The information on existing competitive properties are easy to find, just type in the name of their property plus the word leasing on the end. To find future development information, the city they submit to has to approve the plans. Some cities have it set up on their website over a Google maps type of link. Edit: spelling Good luck! Edit 2: example of competition link. http://properties.brixmor.com/cre/commercial-real-estate-listings/frisco/texas/preston-ridge/overview/",
"title": ""
},
{
"docid": "ef064ae7e68cf30d539f1a7323d318ef",
"text": "\"In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is \"\"commercial real estate\"\" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is generally considered simply \"\"commercial real estate\"\" (just like office buildings, shopping malls, etc). All real estate and businesses value are based on alternatives - what other options are there? In appraisal, these are generally called \"\"comparables\"\". A professional appraiser is generally available for commercial real estate of this type. While a full, official commercial appraisal can run into the thousands, many/most (all?) appraisers are willing to sell you a simplified version of their service, which can be called a \"\"letter of opinion\"\" and can help you get an idea for the market price (what other similar commercial properties are running for). A loan company would strictly require this, but if you are thinking of an all cash or form of seller-financing this would technically be optional. Your best bet is to read about some of what is involved in commercial real estate appraisal and evaluation, and you may even want to speak with commercial loan officers - even if you don't know that you want to get a loan to acquire the property! It's their job to help inform you about what is required and what they look for, so they can be a potential resource beyond your own research as well. With this said, the only way to estimate value (and, conveniently, the best way) is to look at other properties! And by \"\"others\"\", I mean that you should really not consider buying absolutely anything until you've viewed at least 6-10 other options in some depth - and you probably want to double or triple that number if you are looking to make this the last big business transaction of your life. If you don't you'll be relying on little more than dumb luck to carry you through - which in this area of business, you don't want to do because the dollar amounts and liabilities involved can bankrupt you in no time flat. With that general advice out of the way, here's a tiny nutshell version of valuation of commercial real estate. There are a few key parts involved in commercial real estate: land, improvements (buildings, docks, stuff like that), income, and wages. Land: the value of the land is based upon what you could sell it for, as-is. That is to say - who else might want it? This alone has many important factors, such as zoning laws, the neighborhood (including your neighbors), water/utilities, pacts on the land (someone may have insisted the land not be paved into a parking lot, or really anything like that), alternative uses (could you put a golf course on it, or is the land suitable for a big building or farming?), etc. And is this in a growing area, where you might hope the value will increase over the next decade, or decrease, or basically stay flat (and possibly cause losses compared to inflation)? Improvements: anything on the land is both an asset and a liability. It's an asset because it could add to the value of the land, but it might also reduce the land value if it interferes with alternate land uses. It's a liability, both in the legal sense and in that it requires maintenance. If you want to rent them out, especially, that means concern about any foundations involved, termites, roofs, sewage/septic tanks, utilities that are your responsibility (pipes, poles, wires), as well as any sort of ac/heating you may have, docks, and so on. These things are rarely free and absolutely can eat you alive. Income: Ah, the best part, the constant influx of cash! But wait, is it a constant influx? Some businesses are purely seasonal (summer only, winter only), some are year-round but have peak times, and others don't really have a \"\"peak\"\" to speak of. If you are renting, are there issues collecting, or with people over-staying? How about damage, making a mess, getting rowdy and disturbing others? Regardless, there is obviously some income, and this is usually the most dangerous part of the equation. I say \"\"dangerous\"\", because people absolutely lie like dogs on this part, all the time. It's easy to cook the books, assuming they even attempt to keep proper books in the first place! Businesses of this form often have a lot of cash business that's easy to hide (from Uncle Sam, or sometimes even the owners themselves if there are employees involved) - and fake! And some people are just shoddy bookkeepers and the info is just wrong. But, there will clearly be some kind of yearly income involved. What does this matter? Well...how much is there? How much is tied to the owners (personal friends do business and they will leave if the ownership/management changes)? In commercial real estate the income will be calculated for a fiscal year, and then there is something called a \"\"multiple\"\", which is market dependent. Let's say the whole place takes in $100k in rent a year. As part of buying this business, you are buying not just assets, but expected future income. In some commercial areas the multiple is as little as .5 to 2 - which means that the going rate is about 6-24 months worth of income, as part of the purchase price. So with 100k rent a year, that means 50k-200k of the purchase price is attributable to the income of the business. And if business is half of what you thought it would be? That means the net value of the whole enterprise decreases by 25k-100k - on top of the reduced income every year you own it! Income provides cash flow, which should pay all the expenses (cleaning up from wind storms, replacing windows that are broken, hauling off trash, replacing a well that ran dry), and then the extra that remains is positive cash flow. If you take out a loan, then ideally the cash flow would also pay that completely so long as you don't have any big unexpected expenses in the year - and still have some left over for yourself. Wages: Well, that money doesn't collect itself! There's sales, keeping the books, collecting the rent, performing maintenance, customer service, cleaning, paying the bills, keeping the insurance people happy, handling emergencies, and everything else involved with running the business. Someone is going to do it, and the biggest error people make here is not to put any value on their time - and to make it so they can never afford to take a vacation again! Pay yourself, and give yourself the flexibility to pay others when you can't (or don't want) to do it all yourselves. So, what's the point of all this? How do you actually make any money? In two ways: 1) selling the whole thing later, and 2) cash flow. For 1, it's important that you not be in a situation where you are betting that in the future there will be a \"\"person richer, and dumber, than I am now\"\". If the current owner wanted 2 million, then 1 mil, then less, over multiple years...this suggests either he is delusional about the value of his place (and most property owners are), or that its actually hard to find a buyer for such a business. You are going to want to make sure you understand why that is, because most of the value of real estate is...well, in the real estate itself! For 2, you need cash coming in that's considerably more than the cost of running the place. Also, cash flow can strongly change the value of the business for resale (depending on the multiple, this can make a huge difference or prevent you from selling the thing at all). You mentioned you want to put in more cabins, more marketing/sales efforts, etc. That's great, but first, that would mean added investment beyond the purchase price. Is it legally and physically practical to add more cabins, and what is their current utilization rate? If they are only renting 10% of their current capacity, increasing capacity may be premature. This will also vary through the year, so you may find there is a problem with being sold out sometimes...but only for a small percentage of the time. Which means you'll be adding buildings only to have them used for a fraction of the year, which will be very hard to make a profit from. If cash flow is good, ideally even being enough to cover a loan payment to help cover the purchase price (and remember that commercial real estate loans are much smaller loan-to-value ratios than in residential real estate), there is one final barrier to making money: the damn non-regular maintenance! Roofs, wells, and wooden walls all have a sad tendency to cost you nothing right up until the point they cost you $30k+ on a single day. Is there enough cash flow to make these sort of certainties (and if you plan to be there for years, they are a certainty) not put you in the poor house? This was rather long, but I hope this overview helps you appreciate all that you'll need to look into and be cautious of during your future en-devour! Commercial real estate is generally costly and high-risk, but also can be high reward. You'll need to compare many opportunities before you can get a \"\"feel\"\" for what is a good deal and what is a terrible one. You'll need to consider many factors, such as resale value and cash flow/income (which they will have to tell you and you can assume is not true, due to ignorance or malice), as well as maintenance and liabilities, before you can begin to really estimate the value of an enterprise of this sort. There are people who can help you, like appraisers and commercial brokers, but ultimately you'll need to do a lot of research and comparisons yourself to help you make a good decision. Finally, there is no very simple method for evaluating commercial real estate value. You need a variety of information, and you must be skeptical of what you are told because of the very large sums of money involved. It is doable (lots of people do it), but you must take care and do your due diligence so you don't get bankrupted by a single bad purchase.\"",
"title": ""
},
{
"docid": "f75f8ce42dab41e68a46486e1897351d",
"text": "A large part of the cost seems to be that he created the physical space from scratch: > Because Tortosa chose a brand-new building that had never been occupied, every single thing had to be built in. The upside is that he was able to create his dream space from scratch. The downside: That it cost him much more time and money. He spent approximately $500,000 doing that, and he received $100,000 from the landlord for doing it. So he's out $400k. The landlord will get a furnished space if he folds.",
"title": ""
},
{
"docid": "2aa4ecf74cd550e0692cb04b5fde014c",
"text": "\"Well, that's good and bad more regulation, but your not an agency your something better(IMHO) If the lawyer says yes, I'd scrub all mention of the word \"\"agency\"\". Being an \"\"employment business\"\" is part of your USP. You will presumable have to educate on why this is better, but you may as well use the protected words your entitled too and report any UK agencies calling themselves an employment business to try and undercut you. Check with your branding/marketing advisors this could be key (Oh and please PM, your launch page/teaser when you get to it)\"",
"title": ""
},
{
"docid": "df6f1b9d8e1eafea0e9b04a076b95774",
"text": "Usually if the property is part of a strata then the water rates get sent to the owner each quarter to pay and the usage for the whole complex is paid by the strata. So in this type of situation your tenant would not have to pay any water usage. If for some reason, as you mentioned, your unit, although part of a strata complex, is individually metered and you receive a water bill for both water rates and water usage, then the tenant would be liable to pay the water usage portion. This can usually be arranged by either giving the tenant a copy of the water bill with the amount of usage payable, or organising with the water company to separately sending the tenant the usage part of the bill. As you had a real estate agent (managing agent) looking after your property at the time when the water usage was not being paid by the tenant, it would have been their responsibility to either recoup this money from the tenant or organise with the water compony to send the usage part of the bill to the tenants. That is part of the service you were paying them for. You may need to check with Fair Trading in your state to find out who you should be going after for this money, the tenant or the real estate agent. In NSW you have 6 months after the lease has ended to take the tenants to tribunal to recoup owing money, I don't know how long it is after end your agreement with the real estate agent to pursue them. The case may be that you start with the tenant and if that doesn't work then try with the real estate agent. Of course you may want to contact your old tenants first to see if they are reasonable and agree to back pay the water usage (after you showing them copies of the water bills). The tribunal will ask if you have tried to mediate the matter first anyway. Then there is the matter of how much the water usage amounts to and whether it is worth chasing both the tenants and the real estate agent, paying the tribunal application fees and taking time off work to attend the tribunal.",
"title": ""
},
{
"docid": "c478ce517a23b24c5fa2356c7eeac393",
"text": "They are two different animals. When you rent you are purchasing a service. The landlord, as your service provider, has to make a profit, pay employees to do maintenance, and buy materials. The price of these things will increase with inflation, and that rolls into your rent price. Taxes also are passed to the tenant, and those tend to only go upward. Market forces of supply/demand will drive fluctuation of prices as well, as other posts have described. When you buy, you are purchasing just the asset - the home. This price will also be driven by supply/demand in the market, but don't try to compare it to buying a service. Cheers!",
"title": ""
},
{
"docid": "55ecdda1e229a73cd562b64220076832",
"text": "As user14469 mentions you would have to decide what type of properties you would like to invest in. Are you after negatively geared properties that may have higher long term growth potential (usually within 15 to 20km from major cities), or after positive cash-flow properties which may have a lower long term growth potential (usually located more than 20km from major cities). With negative geared properties your rent from the property will not cover the mortgage and other costs, so you will have to supplement it through your income. The theory is that you can claim a tax deduction on your employment income from the negative gearing (benefits mainly those on higher tax brackets), and the potential long term growth of the property will make up for the negative gearing over the long term. If you are after these type of properties Michael Yardney has some books on the subject. On the other hand, positive cash-flow properties provide enough rental income to cover the mortgage and other costs. They put cash into your pockets each week. They don't have as much growth potential as more inner city properties, but if you stick to the outer regions of major cities, instead of rural towns, you will still achieve decent long term growth. If you are after these type of properties Margaret Lomas has some books on the subject. My preference is for cash-flow positive properties, and some of the areas user14469 has mentioned. I am personally invested in the Penrith and surrounding areas. With negatively geared properties you generally have to supplement the property with your own income and generally have to wait for the property price to increase so you build up equity in the property. This then allows you to refinance the additional equity so you can use it as deposits to buy other properties or to supplement your income. The problem is if you go through a period of low, stagnate or negative growth, you may have to wait quite a few years for your equity to increase substantially. With positively geared properties, you are getting a net income from the property every week so using none of your other income to supplement the property. You can thus afford to buy more properties sooner. And even if the properties go through a period of low, stagnate or negative growth you are still getting extra income each week. Over the long term these properties will also go up and you will have the benefit of both passive income and capital gains. I also agree with user14469 regarding doing at least 6 months of research in the area/s you are looking to buy. Visit open homes, attend auctions, talk to real estate agents and get to know the area. This kind of research will beat any information you get from websites, books and magazines. You will find that when a property comes onto the market you will know what it is worth and how much you can offer below asking price. Another thing to consider is when to buy. Most people are buying now in Australia because of the record low interest rates (below 5%). This is causing higher demand in the property markets and prices to rise steadily. Many people who buy during this period will be able to afford the property when interest rates are at 5%, but as the housing market and the economy heat up and interest rates start rising, they find it hard to afford the property when interest rate rise to 7%, 8% or higher. I personally prefer to buy when interest rates are on the rise and when they are near their highs. During this time no one wants to touch property with a six foot pole, but all the owners who bought when interest rates where much lower are finding it hard to keep making repayments so they put their properties on the market. There ends up being low demand and increased supply, causing prices to fall. It is very easy to find bargains and negotiate lower prices during this period. Because interest rates will be near or at their highs, the economy will be starting to slow down, so it will not be long before interest rates start dropping again. If you can afford to buy a property at 8% you will definitely be able to afford it at 6% or lower. Plus you would have bought at or near the lows of the price cycle, just before prices once again start increasing as interest rates drop. Read and learn as much as possible from others, but in the end make up your own mind on the type of properties and areas you prefer.",
"title": ""
},
{
"docid": "24d27d57f0294cef060793e5d19c2702",
"text": "NO Even worse, most BTL(buy to let) lenders will not lend if you are going to be living in the property. There are very few lenders that will touch something like this. It is likely you will also need to use bridging for the time the building work takes at something like 1.5% per month! Try posting the question to http://www.propertytribes.com/ as there are a few UK mortgage experts on that site.",
"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": "2522edeebfaa3c5b63906725e1ca5c2b",
"text": "I believe he was recommended by one of the investors. After digging a little deeper, it seems the person who invested the most (I believe they own 40%) has his wife doing the taxes and paperwork. We've tried to get them to show us the paperwork and they always seem reluctant. They claim that they're not getting anything either, but they're more of a mutual partner that was introduced to us by the third investor. Basically I invested with a friend, who introduced a third investor (who bought in at the majority). I think it was my friend who knew this manager and hired him due to a past relationship they had. For more insight, my friend actually owns another 2 bars that are quite successful, but it seems he's completely not invested in this one despite owning 30%.",
"title": ""
},
{
"docid": "b0583fd50b3c20ae13a401c553cac3d1",
"text": "\"The Solicitor involved up front should be able to place constrictions as your suggesting. I think you should look carefully at the desired wording. You deserve a return on your £100k. Say, the day after you buy (this is hypothetical, please bear with me) a developer says he needs the property and will give you £460k. Your wording here says you get £100k, and then, after the mortgage split £230k, but it seems more reasonable that your deposit doubles to £200k, the remaining £260k pays the mortgage, and the £130k left is split, £65k each. My method accounts for the value of your £100k. Some would ask, why not apply the mortgage rate to that deposit? Because the home value may grow at a different rate. In my opinion, it's fair to apply the home value growth to the £100k deposit. \"\"Fair\"\" means different things to different people. This is my opinion, and a suggestion. Consider it, and do what you and your partner wish. Use a solicitor. Put it in writing.\"",
"title": ""
},
{
"docid": "47da880d880f5f3868723b4ae4aee77f",
"text": "It is through a vendor leasing to a provider(99% coverage lol). Our municipality does not allow private entities to attach to the fixtures so that puts me in the cats seat. They will be metering their own electric so that is not a problem. You seem to be pretty knowledgeable, would it benefit me to argue for yearly payments instead of monthly?",
"title": ""
},
{
"docid": "92e9ecee4cfbe3d7f5e2c7f590b1635b",
"text": "\"Edit #2 My whole answer was based on my misunderstanding that you were renting out a totally separate property to your girl friend. I finally understand now that you're renting out a room in YOUR apartment flat to your gf. So, based on my new understanding, I don't think it's necessarily a bad idea. The answer below is my answer to a different question ;) Original Answer My answer has nothing to do with business, but is totally relationship based. If you care about her in a \"\"we might be together a long time\"\" way, then I wouldn't do this. I don't care what arrangements you setup before hand, at some point, you're bound to feel like she owes you something at some point. Let alone the easiest of situations to imagine (she's late on the rent, she loses her job and can't pay, etc) you'll be forced to make decisions about how much your desire to love and care for her outweighs your need to pay your mortgage. You can argue how magnanimous your are all day long, but is this something you want to bring into your relationship? Now, if you don't really care to stay with her that long and you could do life with or without her, then go for it. I think the big question is, is your relationship worth £200? Edit In the interest of supporting my opinion, here are a few articles I found on the subject: Unfortunately, the way renting to friends or family often works out is far from what would be expected between people who care about one another. For the most part, friends and family members will actually make bad renters, because they’ll expect more from you than a tenant who doesn’t know you. You may get a lot of requests for maintenance and repairs, even for minor things, and you may also find that family members and friends think they should be entitled to perks because of your personal relationship with them. When they don’t get special treatment, they can get angry with you, and that hurts both your professional relationship and your personal relationship. American Apartment Owners Association \"\"In my experience, landlords renting to relatives doesn't work out perfectly,\"\" said Ceyhun Doker, a REALTOR® associate at Keller Williams Realty in Burlingame, CA. \"\"When you don't know each other, there are fewer problems.\"\" realator.com\"",
"title": ""
}
] |
fiqa
|
69e065d29416f9107a88778269220c9b
|
Is there a rule that a merchant must identify themself when making a charge
|
[
{
"docid": "e5173b4baf00f45b2cd4262eb0d06c1c",
"text": "\"Here's an excerpt from VISA's Card Acceptance Guidelines for Visa Merchants (PDF) The merchant name is the single most important factor in cardholder recognition of transactions. Therefore, it is critical that the merchant name, while reflecting the merchant’s “Doing Business As” (DBA) name, also be clearly identifiable to the cardholder. This can minimize copy requests resulting from unrecognizable merchant descriptors. Merchant applications typically list the merchant name as the merchant DBA. This may differ from the legal name (which can represent the corporate owner or parent company), and may differ from the owner’s name which, for sole proprietorships, may reflect the business owner. I think that the key statement above is \"\"Therefore, it is critical that the merchant name [...] be clearly identifiable to the cardholder.\"\" Since this merchant was not clearly identifiable to the cardholder, they are in breach of a critical point in these guidelines. This is from VISA, but I would assume that all other major credit cards would have similar guidelines for their merchants. However keep in mind that these are \"\"guidelines\"\", and not (necessarily) rules.\"",
"title": ""
},
{
"docid": "fe6c6b035064b9df1adf8d9f29e0d9c0",
"text": "In some case the customer wants the name to be cryptic or misleading. They don't want to advertise the true nature of the business they visited. In other cases the transaction may be reported through another business. A few years ago the local PTA was having a silent auction as a fundraiser. A local business allowed the PTA to use their credit card reader to process transactions over a certain amount. Of course when the credit card statement arrived it looked like you spent $500 at the florist. I have seen PayPal listed when donating to some small charities. I have noted another case where confusion can occur. I used a debit card to buy a soda from a vending machine: the name and location were the name of the vending machine company and the location of their main office. It didn't say soda machine city A. It said Joe's vending company city B. In most cases the business and the credit card company want to make it easy to identify the transactions to keep the cost of research and charge backs to a minimum.",
"title": ""
},
{
"docid": "c435f5c350f31fd9c7567c22ec82571e",
"text": "Obviously, the credit card's administators know who this charge was submitted by. Contact them, tell them that you don't recognize the charge, and ask them to tell you who it was from. If they can't or won't, tell them you suspect fraud and want it charged back, then wait to see who contacts you to complain that the payment was cancelled. Note that you should charge back any charge you firmly believe is an error, if attempts to resolve it with the company aren't working. Also note that if you really ghink this is fraud, you should contact your bank and ask them to issue a new card number. Standard procedures exist. Use them when appropriate.",
"title": ""
}
] |
[
{
"docid": "898499ec5c013cb2425c03238bfdc185",
"text": "Credit card companies organize types of businesses into different categories. (They charge different types of businesses different fees.) When a business first sets up their credit card processing merchant account, they need to specify the category. Here is a list of categories that Visa uses. Grocery stores and supermarkets are category number 5411. Other types of businesses, such as the examples you provided in your question, have a different category number. American Express simply looks at the merchant category code for each of your transactions and only gives you rewards for the ones in the grocery store category. It's all automated. They likely don't have a list of every grocery store in the US, and even if they did, they would probably not provide it to the public, for proprietary reasons. If you are in doubt about whether or not a particular store is in the grocery category, you'll just have to charge it to your card and see what happens. Often, the category of transaction will be shown for each transaction on your credit card's website.",
"title": ""
},
{
"docid": "6479d2f2685bc1c6a0174388d1d0c22e",
"text": "I don't have much to add other than your signature is not required to process a charge. Signatures are kept on file for validity in the event you dispute a charge. Your signature isn't held in some magical database with signature recognition software. If you draw an shark in the signature section of a receipt that won't stop the charge from processing. In fact, many merchants don't even bother requiring the signature below a certain threshold. There are loads of behind the scenes processing improvements offered by the EMV chip; namely prevention of card number skimming and duplication via encrypted transaction signing. While requiring a PIN adds an additional layer of security, simply processing via chip dramatically improves the network fraud prevention tools in a manner that is almost completely transparent to the user. To your point, if your wallet is lost and an imposer holds your physical card there is no anti-fraud improvement. At any rate, you have zero fraud liability in the US.",
"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": "408321035e37e28e13a3b3933ba797ef",
"text": "\"Working retail myself, I do not accept an unsigned card without verification. If I received one I would ask for ID and verify the photo with the Name. I would also let the buyer know it was unsigned and remind them that anyone finding it can sign it and use the card without issue. Putting on the back of the card \"\"SEE ID\"\" is the way buyers have protected themselves from thieves as long as people are actually looking at the cards. How does this protect? 1- a lost card cant be signed by a complete stranger as there is already writing on the card. 2- It provides a photo identification for use. I know with today's technology that this is going away and fewer people are actually checking but shame on those companies who handle the cards and don't look. Obviously this process does not apply to self checks, but safety protocols there require a pin of some form that only the authorized user should know.\"",
"title": ""
},
{
"docid": "fd4e136401631719b477bcecbdb36789",
"text": "\"Yes and No. There's always a \"\"fee\"\". The difference in credit vs debit usually determines how much that fee is and how it's paid. Each vendor who accepts the major credit card is under contract to pay for equipment and meet certain standards. The same is true for debt card transactions. How much the \"\"fee\"\" is can vary based on the contract the vendor has with MasterCard/Visa/AMEX. But in general most debt transactions go back to the bank who distributed the card.\"",
"title": ""
},
{
"docid": "5fee4c2ada624f9f9dfd3cf43e073b65",
"text": "There are different ways of credit card purchase authorizations. if some choose less secure method it's their problem. Merchants are charged back if a stolen card is used.",
"title": ""
},
{
"docid": "a2432ced7c1711f5e0e728728c592a5c",
"text": "I'm not sure about the laws in specific states. However it's part of their merchant agreement that they can not charge a fee for a customer paying with credit card. It's also against merchant agreements to require a minimum purchase to use a credit card, although this is less commonly enforced. Apparently (http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html) merchants can offer a cash discount. Offering payment by credit card, though practically a requirement in todays retail environment, is a privilege for the merchant. It's a way of making buying convenient for the customer. As a result, penalizing the customer in any way is not just against their agreement, but rather disingenuous as well. edit: here's a bit more information about what they can and can't do. Amex prohibits discrimination, so if a merchant can't do something to a Visa/MC customer they can't do it to an Amex customer either. http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html",
"title": ""
},
{
"docid": "3ca33c5438a226b77697ac71c63cfd6f",
"text": "\"In this answer, I won't elaborate on the possibilities of fraud (or pure human error), because something can always go wrong. I will, however, explain why I think you should always keep receipts. When the (monthly or so) time comes to pay your credit card bill, your credit card company sends you a list of transactions. That list has two primary purposes, both of which I would consider equally important: While for the former item, a receipt is not necessary (though it certainly does not hurt showing the receipt along with the bill to provide further proof that the payment was indeed connected to that bill), the latter point does require you to store the receipts so you can check, item-by-item, whether each of the sums is correct (and matched with a receipt at all). So, unless you can actually memorize all the credit card transactions you did throughout the past one or two months, the receipts are the most convenient way of keeping that information until the bill arrives. Yes, your credit card company probably has some safeguards in place to reveal fraud, which might kick in in time (the criteria are mostly heuristical, it seems, with credit cards or legitimate transactions here getting blocked every now and then simply because some travelling of the actual owner was misinterpreted as theft). However, it is your money, it is your responsibility to discover any issues with the bill, just as you would check the monthly transaction list from your bank account line by line. Ultimately, that is why you sign the vendor copy of the receipt when buying something offline; if you discover an issue in your list of transactions, you have to notify your credit card company that you dispute one of the charges, and then the charging vendor has to show that they have your signature for the respective transaction. So, to summarize: Do keep your receipts, use them to check the list of transactions before paying your credit card bill. EDIT: The receipt often cannot be replaced with the bill from the vendor. The bill is useful for seeing how the sum charged by the respective vendor was created, but in turn, such bills often do not contain any payment information, or (when payment was concluded before the bill was printed, as sometimes happens in pre-paid scenarios such as hotel booking) nondescript remarks such as \"\"- PAYMENT RECEIVED -\"\", without any further indication of which one of your credit cards, debit cards, bank accounts, stored value cards, or cash was used.\"",
"title": ""
},
{
"docid": "3e987107dbb4125793c6317940aa88a4",
"text": "\"It's anonymous/automated. They don't know who you are, just that customer x1a bought y. If your name isnt given to employees \"\"your\"\" privacy isnt being volated because the dont know its \"\"you.\"\" I imagine the government justifies their intrusions on our digital privacy the same way.\"",
"title": ""
},
{
"docid": "fd2350e9d1d0244e9c469071fa7541d2",
"text": "The signature actually harks back to the days before every business checked every transaction online. When charge cards were introduced modems didn't exist. Nowadays, stolen credit cards are usually reported within 24 hours and the card won't work. Businesses that face low fraud rates don't bother checking. They probably figure that a certain percentage of charges get charged back because the cardholder claims that they didn't make them, and the credit card company usually just passes the cost on to the merchant, so it's really the merchant who should be worried about fraud since he or she is going to pay for it. The real question for the merchant is whether checking signatures actually reduces charge backs. If the credit card is stolen, how hard would it be for thieves to practice the signature on the card a few times until they can reproduce it well enough to fool someone? Businesses that face high fraud rates are often more careful. In New York City, try buying some Nikes on 34th Street, and you'll get your signature checked, your driver's license checked, and they'll call up your 5th grade social studies teacher.",
"title": ""
},
{
"docid": "b4667ca0b508c1213651893932ccb69e",
"text": "\"Understood. But based on the OP, it's not categorically clear what they were refusing. If they refused to quote the balance and/or refused to take a phone payment that was otherwise in keeping with the cardholder agreement (i.e., the cardmember called the correct number for phone payments and balance-checking, etc), then yeah, they were not only being unreasonable, but also violating the contract. What I read as ambiguous is whether the cardholder was specifically asking for the *payoff* balance/amount, and whether they were following process for phone-payments and balance-checking, etc. IOW, it's not necessarily \"\"illegal\"\" and might not even be unreasonable for the customer-service number to have different departments for balance-checking and phone-payments versus card-cancellation. It's not falsifiably clear from the OP that the cardholder was not asking the person on the other end of the phone for categorical statements of fact that they were obligated to make. I'm not accusing anyone of lying or saying that the CC company was acting reasonably, I'm just saying that language such as **\"\"They do not provide mid-cycle payoff quotes\"\"** is not evidence that they were doing any kind of funny-business.\"",
"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": ""
},
{
"docid": "a7af83dec07deef1a5cd58c68bc6ad1c",
"text": "The truth is that Visa does not require a merchant to enter the cvv number before authorizing a transaction. The only information that is really needed is the credit card number and expiration date.",
"title": ""
},
{
"docid": "528c03575fed81c0e5a4cb0ba68313bc",
"text": "They specifically state on their website this waiver does not apply to this incident. It only applies to the use of their credit monitoring product. [link to website](https://www.equifaxsecurity2017.com/). So basically you can't have identify fraud then blame it on their credit monitoring tool. In this case, Equifax is guilty of several things, not related to this product, so they can't just sneak in a clause like this.",
"title": ""
},
{
"docid": "ea5e79982cd5dc06501658bb7e80c710",
"text": "Is this for the US? Or does it apply here in the UK in a general sense? Obviously I think we are using different terms, but this is just a general run down of the different business types really right? I'm wondering if the use of a name thing matters here in the UK or not. I'm happy to trade under my actual name, but would prefer a name for the business that is separate to my own name.",
"title": ""
}
] |
fiqa
|
409dbe69d6285172cc9b0b5d22d3b0d5
|
Looking to buy a property that's 12-14x my income. How can it be done?
|
[
{
"docid": "bdb54ca94be1daad39e58cffcc6f6563",
"text": "\"It is your choice to have \"\"insignificant income\"\", and that has consequences. One is that you cannot borrow money to purchase a home independent of your credit score. In order to purchase a home you must also have the ability to repay in addition to a good history. IMHO your question suggest that you have a unrealistic outlook on life. If you cannot come up with 10K, how can you afford a home? What happens when the HVAC system goes out? While I certainly hope you meet and exceed your goals, you can change your whole world by simply getting a job at a fast food restaurant. When you are not working you can then do the entrepreneurship thing. Life is often a choice of priorities. If you choose to \"\"back-burner\"\" the entrepreneur dream, for a time, and choose to focus on earning the best possible wage. Then perhaps you could afford to purchase a place of your own.\"",
"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": "e8551dc1d527827ddf6696afe51c141f",
"text": "You need a cosigner. Someone prepared to repay the mortgager if you should fail to. Needless to say this is going to have to be someone who knows you and trusts you very much. One way is to find someone prepared to share a house with you. Buy a bigger house than you would otherwise need. You would own half each, and the sharing agreement would specify that if one of you defaulted on their payments the other would get a larger share according to how much extra they end up paying. The other way is to find a silent partner, who doesn't live there. They put up no money unless you actually default. They would almost certainly have to be part owners, but you can structure the agreement so that you end up with the whole house if you succeed in paying off the mortgage, or miss no payments until you sell. Parents sometimes do this for their kids.",
"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": "6142c2088a28e774dd94f10842b252e7",
"text": "To me it sounds like you need to come up with 67K (30+37), part of the time you can work in the current job, part of the time you could work a lower paying part time job (for a year). Lets assume that you can earn 15K for that year, and you can save 5K from your current job. (I'd try and save more, but what ever you can do.) 67 - 15 - 5 = 47 I'd sell the investment property. First you will have some funds to throw at this need, second you expense should go down as you don't have a payment on this property. 47 - 26 = 21 You have 32K in cash which is a lot for someone in your expense range. Six months would be 15K, so I would use some of that cash: 21 - 17 = 4 Now you are really close. If needed I'd use the investments to cover the last 4k or even more of the on hand cash. However, could you do something to reduce that amount further ...like working more.",
"title": ""
},
{
"docid": "60aa7183387ee773269ce2401430e4b0",
"text": "Real Estate is all local. In the United States, I can show you houses so high the rent on them is less than 1/3% of their value per month, eg. $1M House renting for less than $3500. I can also find 3 unit buildings (for say $200K) that rent for $3000/mo total rents. I might want to live in that house, but buy the triplex to rent out. You need to find what makes sense, and not buy out of impulse. A house to live in and a house to invest have two different sets of criteria. They may overlap, but if the strict Price/Rent were universal, there would be no variation. If you clarify your goal, the answers will be far more valuable.",
"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": "f000814393145523bb955e8c305cd035",
"text": "\"I've never heard of rent quoted per week. Are you in the US? In general, after the down payment, one would hope to take the rent, and be able to pay the mortgage, tax, insurance, and then have enough left each year to at least have a bit of emergency money for repairs. If one can start by actually pocketing more than this each year, that's ideal, but to start with a rental, and only make money \"\"after taxes\"\" is cutting it too close in my opinion. The 19 to 1 \"\"P/E\"\" appears too high, when I followed such things I recall 12 or under being the target. Of course rates were higher, and that number rises with very low rates. In your example, a $320K mortgage at 4% is $1527/mo. $400/wk does not cut it.\"",
"title": ""
},
{
"docid": "e25fcd5b89b415a0f9310d96fdd581a2",
"text": "\"Your plan as proposed will not work, because it goes against how banks make money. Banks make money in two ways: (1) Fees [including account fees, investment advice fees, mortgage application fees, etc.]; and (2) Interest Rate Spread. They borrow money for x%, and they lend it out for x+y%. In a simple form, someone gives the bank a deposit, and earns 1%. The bank turns around to the next person in line and loans the money to them for 4%. You are asking them to turn the interest rate spread into a cost instead of their main source of profit: You are asking the bank to borrow money from another person paying them 1.2% interest, and then loan the money to you, paying you 0.6% interest and keeping 0.6% for themselves. The bank would lose money doing this. Technically yes, you can borrow from a bank and invest it in something earning above the 4% interest they will charge you. You can then pay the bank's interest off of your earnings, and make some profit for yourself. BUT this carries an inherent risk: If your investment loses money, you still owe the bank, effectively increasing the negative impact of your investment. This tactic is called \"\"Leveraging\"\"; you can look it up on this site or on google. It is not something you should do if you do not fully understand the risks you are taking on. Given that you are asking this question, I would suggest tactfully that you are not yet well informed enough to make this sort of investment. You run serious risk of losing everything if you over-leverage (assuming the banks will even lend you money in the first place).\"",
"title": ""
},
{
"docid": "b01b8a39d9dcd8a1f2f491f032e31143",
"text": "I’m not an expert on the VISA/US tax or insurance, but you're making enough mistakes in terms of all the associated costs involved in owning and renting houses/apartments that this already looks potentially unwise at this stage of your investment career. Renting cheap properties/to students involves the property constantly being trashed, often being empty and requiring extremely close management (which you either have to pay someone a lot to do, or do yourself and lose other potential earning time. If doing yourself you will also make lots of mistakes in the vetting/managing/marketing process etc at first as this is a complex art in itself). Costs on this type of rental can often get as high as 25% a year depending exactly how lucky you get even if you do it all yourself, and will typically be in the 5-15% range every year once everything you have to constantly maintain, replace and redecorate is totalled up. That's all pre what you could be earning in a job etc, so if you could earn a decent clip elsewhere in the same time also have to deduct that lost potential. Send it all to third parties (so all upkeep by hired contractors, all renting by an agency) you will be lucky to even break even off ~15k a year per property rents to students. You’re not seeming to price in any transaction costs, which usually run at ~5% a time for both entrance and exit. Thats between half and one years rent gone from the ten per property on these numbers. Sell before ten is up its even more. On point three, rounding projections in house price rises to one decimal place is total gibberish – no one who actually has experience investing their own money well ever makes or relies on claims like this. No idea on Pittsburgh market but sound projections of likely asset changes is always a ranged and imprecise figure that cannot (and shouldn’t) be counted on for much. Even if it was, it’s also completely unattainable in property because you have to spend so much money on upkeep: post costs and changes in size/standard, house values generally roughly track inflation. Have a look at this chart and play around with some reasonable yearly upkeep numbers and you will see what I mean. Renting property is an absolute graveyard for inexperienced investors and if you don't know the stuff above already (and it's less than 10% of what you need to know to do this profitably vs other uses of your time), you will nearly always be better off investing the money in more passive investments like diversified bonds, REITs and Stock.",
"title": ""
},
{
"docid": "932da761aed6d1f0a6fa2e8efc6af74f",
"text": "If you expect a significant increase in future income, then you should wait until that future income is assured, and then buy based on that decision. Buying more house than you can afford is what caused you to have to sell; you don't want to do that again. Instead of buying more house now, buy the right house for what you have now. Better yet, though, you might rent instead of buying until the future income comes onboard. Then you can get the best of both worlds - you get to buy the house you can afford in a year or two, but also don't overspend your income.",
"title": ""
},
{
"docid": "0b74ae43593376c509c0450f1ca4c0e7",
"text": "A good quick filter to see if a property is worth looking at is if the total rent for the property for the year is equal to 10% of the price of the property. For example, if the property is valued at $400,000 then the rent collected should be $40,000 for the entire year. Which is $3,333.33 per month. If the property does not bring in at least 10% per year then it is not likely all the payments can be covered on the property. It's more likely to be sinking money into it to keep it afloat. You would be exactly right, as you have to figure in insurance, utilities, taxes, maintenance/repair, mortgage payments, (new roof, new furnace, etc), drywall, paint, etc. Also as a good rule of thumb, expect a vacancy rate of at least 10% (or 1 month) per year as a precaution. If you have money sitting around, look into Real Estate Investment Trusts. IIRC, the average dividend was north of 10% last year. That is all money that comes back to you. I'm not sure what the tax implications are in Australia, however in Canada dividends are taxed very favourably. No mortgage, property tax, tenants to find, or maintenance either.",
"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": "1c2347a4ed4cd25bf7adcbdf7126f9d7",
"text": "The rules of thumb are there for a reason. In this case, they reflect good banking and common sense by the buyer. When we bought our house 15 years ago it cost 2.5 times our salary and we put 20% down, putting the mortgage at exactly 2X our income. My wife thought we were stretching ourselves, getting too big a house compared to our income. You are proposing buying a house valued at 7X your income. Granted, rates have dropped in these 15 years, so pushing 3X may be okay, the 26% rule still needs to be followed. You are proposing to put nearly 75% of your income to the mortgage? Right? The regular payment plus the 25K/yr saved to pay that interest free loan? Wow. You are over reaching by double, unless the rental market is so tight that you can actually rent two rooms out to cover over half the mortgage. Consider talking to a friendly local banker, he (or she) will likely give you the same advice we are. These ratios don't change too much by country, interest rate and mortgages aren't that different. I wish you well, welcome to SE.",
"title": ""
},
{
"docid": "8aa65d9878651d74a4fa7628301e0078",
"text": "I would not recommend you proceed for the reasons given by others and would recommend focussing on raising your annual income to a point where you are better able to decide whether buying is an option. Given the price of places where you are living and your situation it likely will be some time until buying a place makes sense financially if ever (at those prices I would expect renting makes better sense).",
"title": ""
},
{
"docid": "7e37fc63b4815fe300399ed119c76dcb",
"text": "Make sure to get a Homestead Exemption if your state has one. This can keep your taxes from rising quite as steeply, and in some cases the county assessment office can get you a retroactive refund when your application is approved. Also, if you really think you're paying too high based on home resale values around you, most county assessors will also let you dispute your valuation. A higher value is great if you intend to sell, not so good if you're staying long term. Kind of like the difference between trading bonds and investing in them. Also, as I think one of the other posters pointed out, you can usually make extra small payments and direct them to escrow or to principal.",
"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": "072657906959afacef76be19931af359",
"text": "If you're living in a market where some houses are going for $150K over asking, then you MUST buy before you sell. In a seller's market, you will get multiple offers on your current house when you decide to sell, it will sell for (well) over asking, and you can dictate possession dates. You do not need to worry about selling your own home, if you have a competent realtor. But buying a home is an entirely different story. You may struggle to find something affordable, and there may be multiple buyers each time you decide to make an offer. You may go through this cycle several times over many months before your offer is accepted. You should do this while living in your own home, with the comfort of knowing that you can sell your own home easily at any time, instead of the stress of an imminent closing date on your own home. Or worse, move into rented space or Malvolio's mom's house for months or a year while the market increases by 15% and the houses in your old area are now selling for $100K more than you sold for. Ouch, now you really can't afford to buy what you want, and you may end up buying something equivalent to what you used to own, for more, plus legal, realtor, and land transfer costs. If the closing dates don't align, then bridge. This will only end up costing a few hundred dollars, less than $1K including legal fees (the lawyer will also charge to handle this). But by buying before you sell, you'll easily make up that difference. This advice only applies to hot property markets. I'm not a realtor, just a guy living in the GTA who went through this process last year. Lost out on three offers over 10 months, then bought for asking price on fourth offer (very fortunate), then sold for $90K over asking, then bridged for 2 months. My realtor is awesome and made the process as stress free as it can be. Get a good realtor, start house hunting while preparing your own house for sale, and enjoy the process. Also you should negotiate with your realtor, they may be willing to reduce their commission on your sale if they are also representing you on the purchase. Good luck! P.S. Do not make a contingent offer, and do not accept one. Get your financing in place before you make an offer, and if you are concerned about inspection, you can also do that before the offer, if you act quickly. The inspection will cost ~$500, but it will increase the value of your offer by much more than that since you will be going in without conditions. I spent ~$1,000 on two property inspections on homes I lost out on, and I don't regret it. That is the cost of doing business. The other offers on the home I eventually bought were for significantly more than my offer, but they had conditions. I saved at least $40K by being condition free, and I only spent $1,500 on three property inspections. And, some people will just drop out of the multiple offer scenario when they learn that one of the buyers has done an inspection.",
"title": ""
}
] |
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|
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