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What does this statement regarding put options mean? | fennec has a very good answer but i feel it provides too much information. So i'll just try to explain what that sentence says. Put option is the right to sell a stock. "16 puts on Cisco at 71 cents", means John comes to Jim and says, i'll give you 71 cent now, if you allow me to sell one share of Cisco to you at $16 at some point in the future ( on expiration date). NYT quote says 1000 puts that means 1000 contracts - he bought a right to sell 100,000 shares of Cisco on some day at $16/share. Call option - same idea: right to buy a stock. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Prepaid Rent (Accrual Based Accounting) | 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. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Is a robo-adviser worth the risk? | If you are looking for an advisor to just build a portfolio and then manage it, a robo-advisor can be beneficial (especially if the alternative is doing it your self, assuming that you are not well versed in the markets). The primary risk with one is that it does not build a portfolio that accurately represents your needs and risk tolerance. Some firms base the number of questions they ask you on sign up based not on what is needed to get a good profile, but on how many before people decide that it is too much hassle and bail. That usually results in poorer profiles. Also a live advisor may be better at really getting at your risk tolerance. Many of day our risk tolerance is one thing but in reality we are not so risk tolerant. Once the profile is built. The algorithms maintain your portfolio on a day by day basis. If rebalancing opportunities occur they take advantage of it. The primary benefit of a robo-advisor is lower fees or smaller minimum account balances. The downside is the lack of human interaction and financial advise outside of putting together a portfolio. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Is a robo-adviser worth the risk? | They've been around long enough now for there to be past performance figures you can google for. I think you'll find the results aren't very encouraging. I personally don't think there's a huge risk that the robots will lose all your money, but there's every reason to expect they aren't likely to perform better than traditional managers or beat the market. At the end of the day the robots are employing a lot of analysis and management techniques that traditional managers have been using, and since traditional managers use computers to do it efficiently there's not much gain IMO. Yes in theory labour is expensive so cutting it out is good, but in practise, in this case, the amount of money being managed is huge and the human cost is pretty insignificant. I personally don't believe that the reduced fees represent the cost of the human management, I think it's just marketing. There might be some risk that the robots can be 'gamed' but I doubt the potential is very great (your return might in theory be a fraction of a percent less over time because it's going on). The problem here is that the algorithms are functionally broadly known. No doubt every robo adviser has its own algorithms that in theory are the closely guarded secret, but in reality a broad swath of the functional behaviour will be understood by many people in the right circles, and that gives rise to predictability, and if you can predict investment/trading patterns you can make money from those patterns. That means humans making money (taking margin away) from the robots, or robots making money from other robots that are behind the curve. If robo advisers continue to take off I would expect them to under perform more and more. | Share your insights or perspective on the financial matter presented in the input. |
What are the ins/outs of writing-off part of one's rent for working at home? | Be ruthlessly meticulous about the IRS regulations for deducting a home office. If it's allowed, it's allowed. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What are the ins/outs of writing-off part of one's rent for working at home? | Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home. That leads to increased rates, heating, insurance and so on. Many tax regulators recognise that these are genuine expenses. The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue? The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What are the ins/outs of writing-off part of one's rent for working at home? | Before starting to do this, make sure that you are squeaky clean in all aspects of your tax preparation and are prepared to back up any claims that you make with documentation. Home office deductions are a huge red flag that often trigger audits. Follow mbhunter's advice and be incredibly meticulous about following the rules and keeping records. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How do I determine if sale proceeds from an asset are taxable? | If it's fully expensed, it has zero basis. Any sale is taxable, 100%. To the ordinary income / cap gain issue raised in comment - It's a cap gain, but I believe, as with real estate, special rates apply. This is where I am out of my area of expertise, and as they say - "Consult a professional." | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How do I determine if sale proceeds from an asset are taxable? | Profit = Sale price - Basis Basis = Purchase price - any depreciation taken, including expensing it. | Share your insights or perspective on the financial matter presented in the input. |
What tax laws apply to Meetup group income? | In the United States tax law, a group of people who are neither an individual nor an incorporated entity is called "partnership". Here's the IRS page on partnerships. Income derived by such a "meetup.com" group is essentially a partnership income with the group members being the partners. However, as you can see from the questions in the comments, the situation can become significantly more complex if this partnership is not managed properly. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Self employed, putting away tax money | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Where on schedule C should a PO Box Rental fee go? | 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. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Switching Accountants - who does the audit review for past years? | It depends on what you paid for, but usually audit support is an unrelated engagement to the return preparation. If the accountant made a professional mistake, you can request correction and compensation from that accountant, other than that any accountant can help you with audit regardless of who prepared the return. The original accountant would probably be better informed about why you reported each number on the return and how it was calculated, but if you kept all the docs, it can be recalculated again. That's what happens in the audit anyway. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How much house can I afford, waiting around 3 years or so | On $4K/mo gross about $1000/mo can go to the mortgage, and at today's rates, that's about $200K of mortgage the bank might lend you. Income is qualified based on gross, not net, so if $48,000/yr is wrong, please scale my guesstimate down a bit. In the end, today's rates allow a mortgage of nearly 4X one's gross income. This is too high, in my opinion. I'm answering what the bank would approve you at, not what I think is wise. Wise, in my opinion is 2.5-3X one's income, tops. | Share your insights or perspective on the financial matter presented in the input. |
What are the tax implications if I do some work for a company for trade, rather than pay? | 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. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What are the tax implications if I do some work for a company for trade, rather than pay? | Yes, the business can count that as an expense but you will need to count that as income because a computer = money. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What are the tax implications if I do some work for a company for trade, rather than pay? | 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. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
why the currency data(such as USD/JPY) is different from different source | A day is a long time and the rate is not the same all day. Some sources will report a close price that averages the bid and ask. Some sources will report a volume-weighted average. Some will report the last transaction price. Some will report a time-weighted average. Some will average the highest and lowest prices for the interval. Different marketplaces will also have slightly different prices because different traders are present at each marketplace. Usually, the documentation will explain what method they use and you can choose the source whose method makes the most sense for your application. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Loan to son - how to get it back | 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. | Share your insights or perspective on the financial matter presented in the input. |
Loan to son - how to get it back | I started a business a few years ago. At one point it wasn't going so well and my father "loaned" me an amount not too dissimilar to what you've done. From a personal perspective, the moment I took that loan there was a strain the relationship. Especially when I was sometimes late on the interest payments... Unfortunately thoughts like "he doesn't need this right now, but if I don't pay the car loan then that is taken away" came up a few times and paying the interest fell to the bottom of the monthly bill payment stack. At some point my wife and I finally took a hard look at my finances and goals. We got rid of things that simply weren't necessary (car payment, cable tv, etc) and focused on the things we needed to. Doing the same with the business helped out as well, as it helped focus me to to turn things around. Things are now going great. That said, two of my siblings ran into their own financial trouble that our parents helped them on. When this happened my father called us together and basically forgave everyone's debt by an equal amount which covered everything plus wrote a check to the one that was doing fine. This "cleared the air" with regards to future inheritance, questions about how much one sibling was being helped vs another, etc. Honestly, it made family gatherings more enjoyable as all that underlying tension was now gone. I've since helped one of my children. Although I went about it an entirely different way. Rather than loan them money, I gave it to them. We also had a few discussions on how I think they ought to manage their finances and a set of goals to work towards which we co-developed. Bearing in mind that they are an individual and sometimes you can lead a horse... Given the current state of things I consider it money well "spent". | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Loan to son - how to get it back | As per JohnFx's comment above, consider whether it's worth more to you to just write this off. If not, if you feel that your son will be able to consider this without taking it personally, or you're willing to risk that relationship, then talk to him about it. Lay out the reasons why you need the money. If there are other children, it might be a simple matter of fairness to them. Based on your idea of deducting the money from his inheritance, I assume that the value you're docking from his inheritance will go somewhere else. Offer alternatives. You say that you can't take any money from him now, but letting him know that he can pay you in the future in lieu of loss of inheritance might be worthwhile. Be prepared with an idea of what to suggest if he says he can pay you some amount of money. Figure out what might be an acceptable payment plan and how to handle it if, at some point, he can't make payments for a time. This is a potentially ugly situation, and I can't guarantee that it will turn out better, but the more you prepare for the questions he's going to ask, the better off you're going to be. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Loan to son - how to get it back | Seems fair. I think this is a real subjective thing. Financially lets get rid of that line before interest rates get too high. Maybe have him pay you the $200 he is paying towards the interest each month. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Loan to son - how to get it back | He's paying the interest and you're paying the principal. If you're making minimum monthly payments, you'll still be doing the same thing 25-30 years from now. I think Parker's advice was very, very good, but I'd like to add to it a little of my own. Whatever dollar amount your son is sending to you as payment, encourage him to continue doing that. Only instead of paying you, have him put that money into a savings plan of some kind. You mentioned that he's struggling now, yet able to come up with approximately (my best guess) $200/mo. I guarantee you that if he puts that $200/mo back into his pocket, he'll still be struggling every month yet have nothing to show for it. My suggestion changes nothing in his daily life, yet gives him $2400 at the end of every year. I was in a somewhat similiar situation as your son, only to the tune of $13,000. About 20 years ago, I got a loan and bought a new truck in which to use to go back and forth to work every day. The first 5 months the payments to the bank went as planned. Then my wife announces that "we're" pregnant. So my parents figured it would be best to just pay off my loan to the bank, avoiding any further interest charges, and take that truck payment and put it away for a rainy day. At 33 y/o, with my first child on the way, I finally started saving some of my money. It was good advice on their part because the rainy days came! They never asked me to pay them back, however I did offer. I've been tucking away $300-400/mo in the bank every month since then because I just got into the habit. Good thing I did too. In the past 10 years I've had to bury both of my parents, one sister and two wives and I'll tell ya, one thing that was comforting was the fact that I had the money. The little truck I bought 20 years ago is now my son's. It has around 260,000 miles on it now. When he trades it in for a newer vehicle, I will probably loan him the money and have him make payments to me rather than the bank. I, too, am not one to pay interest if I can help it. If he defaults, he's my son. I just won't buy him another vehicle! Or maybe he'll get into the same habit of saving money the same way I did. Like JohnFx said, money loaned to family should be regarded as a gift, otherwise you'll end up losing your money AND your family member! Hope some of this helps you make your decision. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Loan to son - how to get it back | A few ideas. I suggest it would wise to consider what lesson is learned as a result of any resolution of a financial issue. Is it a lesson of responsibility and of the importance of keeping one's word, or of getting away with whatever happens (poorly planned business) with no adverse consequences. "No" consequences (e.g. forgiven loan) is also a consequence, and it sends a message. Sounds like paying the loan from your savings automatically means it's deducted from inheritance, since the savings are part of that inheritance. This may seem like a square deal if we ignore inflation. Assuming Today the $54K is worth much more than, unless it is adjusted for inflation, the same $54K will be worth (i.e. will allow to buy) a few decades from now, when the inheritance materializes. So this option means your son is foregoing a significantly smaller financial loss in the future in exchange for foregoing his debt completely today. This is like borrowing $54K from a bank now, and only having to forego the same amount decades in the future when it is in fact worth much less. What borrower would not be happy with such arrangement, and what lender would do it? Only one's own loving parents :) You are in charge of what life lessons your son will walk away with from this situation. Good luck! | Share your insights or perspective on the financial matter presented in the input. |
Ghana scam and direct deposit scam? | Of course, it is a scam. Regardless of how the scam might work, you already know that the person on the other end is lying, and you also know that people in trouble don't contact perfect strangers out of the blue by e-mail for help, nor do they call up random phone numbers looking for help. Scammers prey on the gullibility, greed, and sometimes generosity of the victims. As to how this scam works, the money that the scammer would be depositing into your father's account is not real. However, it will take the bank a few days to figure that out. In the mean time, your father will be sending out real money back to the scammer. When the bank figures out what is going on, they will want your father to pay back this money. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Ghana scam and direct deposit scam? | It used to be Nigerian royalty, now it's Ghanaian porn stars. Great. This is a bog-standard 419 scam. It's probably the most lucrative single swindle in the world. It's always hard to get people to believe they have been tricked, but don't let your dad participate. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Ghana scam and direct deposit scam? | The reason this sort of question gets asked over and over again is because it's initially difficult to comprehend how you can possibly be scammed if you have no money in your bank account. Perhaps this would make it easier to understand: Someone approaches you in the parking lot of a mall and says, Excuse me, complete stranger, please take this $100 bill and go buy me a pair of $50 shoes at the shoe store. Then go buy whatever you'd like with the rest of the money. Sounds like a good deal, right? The $100 bill is counterfeit. If it were not, the person would buy the shoes themselves. It doesn't get any simpler than that. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Ghana scam and direct deposit scam? | It's a scam. Here's someone who paid "Josie" 2000 pounds and lost it all Here's a Google search result list of how this softcore porn actor, Josie Ann Miller, is being used as the face and name of scams | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Ghana scam and direct deposit scam? | Yes, this is a scam. Tell your dad not to pay any money. There will likely be a large deposit in his account, but if he withdraws the money from his account, the bank will come after him looking for the money when the transfer to his account is reversed. | Share your insights or perspective on the financial matter presented in the input. |
Ghana scam and direct deposit scam? | So Linda/Josie's initial plan was to have your dad pay money to (supposedly) help her get the gold chest. After he would have paid, there would have been another complication, and more yet (someone to bribe, a plane ticket to buy, transport to arrange, customs to handle, whatever, the list would last as long as there's money to take). Even if he does not have much money, the appeal of his share of the treasure could have been enough to tempt him to spend money he can't, or borrow, etc. Once "she" found out that he doesn't have any money and/or is apparently not willing to send any, "she" switched to a different scam: she would send him a large check, have him deposit it on his bank account, transfer most of the money (minus his generous share) to "her". Once the money is irreversibly transferred, the check will bounce. End result: 0 in the account before the transaction, minus a lot afterwards. It's quite simple: if an e-mail from a perfect stranger includes any of the following keywords, it's a scam: | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Ghana scam and direct deposit scam? | Sadly, people with millions of dollars rarely give it away to complete strangers that they found at random on the Internet in exchange for trivial efforts. Anyone who claims to be willing to give you millions of dollars for just about nothing in return is almost certainly pulling a scam. It doesn't matter if you can't figure out how they're going to cheat you. They have plan. Just because your father has no money doesn't mean he can't be robbed. The scammer is almost surely planning to move some money around, and leave your father with a debt that he will be legally obligated to pay. She'll then take off with the money. (Of course you figured out that the picture is fake. It may not even be a pretty young girl -- that may well just be a persona the scammer created to appeal to your father. It might really be a fat, balding old man.) Your father would be smarter to sit in his back yard and wait for money to fall from the sky. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Ghana scam and direct deposit scam? | The scammer is definitely up to something fishy. He (it's certain that the she is a he) may deposit some money into your father's account to gain his trust. After which, he will propose to come meet your dad. That's where the scamming begins. He will come up with a story about flight, VISA issues, or a problem he has to solve before coming over. Another is that he can use your dad's empty account to receive monies he scammed off people. That way there's no direct link with him and his other victim. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Can anybody explain the terms “levered beta riders”, “equity long-short” and “the quant process driven discipline” for me, please? | Leverage here is referring to "financial leverage". This is the practice of "levering" [ie increasing, like the use of a lever to increase the amount of weight you can lift] the value of your investment by taking on debt. For example: if you have 100k in cash, you can buy a 100k rental property. Assume the property makes 10k a year, net of expenses [10%]. Now assume the bank will also give you a 100k mortgage, at 3%. You could take the mortgage, plus your cash, and buy a 200k rental property. This would earn you 20k from the rental property, less 3k a year in interest costs [the 3%]. Your total income would be 17k, and since you only used 100k of your own money, your rate of return would now be 17% instead of 10%. This is financial leveraging. Note that this increases your risk, because if your investment fails not only have you lost your own money, you now need to pay back the bank. "Beta riders" appears to be negative commentary on investors who use Beta to calculate the value of a particular stock, without regard to other quantitative factors. Therefore "leveraged beta riders" are those who take on additional risk [by taking on debt to invest], and invest in a manner that the author would perhaps considered "blindly" following Beta. However, I have never seen this term before, and it appears tainted by the author's views on Quants. A "quant process driven discipline" appears to be positive commentary on investors who use detailed quantitative analysis to develop rules which they rigorously follow to invest. I have never seen this exact phrasing before, and like the above, it appears tainted by the author's views on Quants. I am not providing any opinion on whether "beta riding" or "quant processes" are good or bad things; this is just my attempt to interpret the quote as you presented it. Note that I did not go to the article to get context, so perhaps something else in the article could skew the language to mean something other than what I have presented. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Can anybody explain the terms “levered beta riders”, “equity long-short” and “the quant process driven discipline” for me, please? | Translation : Funds managers that use traditionnal methods to select stocks will have less success than those who use artificial intelligence and computer programs to select stocks. Meaning : The use of computer programs and artificial intelligence is THE way to go for hedge fund managers in the future because they give better results. "No man is better than a machine, but no machine is better than a man with a machine." Alternative article : Hedge-fund firms, Wall Street Journal. A little humour : "Whatever is well conceived is clearly said, And the words to say it flow with ease." wrote Nicolas Boileau in 1674. | Share your insights or perspective on the financial matter presented in the input. |
what would you do with $100K saving? | 4) Beef up my emergency fund, make sure my 401(k) or IRA was fully funded, put the rest into investments. See many past answers. A house you are living in is not an investment. It is a purchase, just as rental is a purchase. Buying a house to rent out is starting a business. If you want to spend the ongoing time and effort and cash running a business, and if you can buy at the right time in the right place for the righr price, this can be a reasonable investment. If you aren't willing to suffer the pains of being a landlord, it's less attractive; you can hire someone to manage it for you but that cuts the income significantly. Starting a business: Remember that many, perhaps most, small businesses fail. If you really want to run a business it can be a good investment, again assuming you can buy at the right time/price/place and are willing and able to invest the time and effort and money to support the business. Nothing produces quick return with low risk. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
what would you do with $100K saving? | The real answer is "Why do you want to waste a windfall chasing quick returns?" Instead, use this windfall to improve your financial situation, and maybe boost you toward financial independence, or at least a secure retirement. In simplest terms, forget the short term, go for long term. Whatever you do, avoid lifestyle creep. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
what would you do with $100K saving? | I would buy an ETF (or maybe a couple) in stable, blue chip companies with a decent yield (~3%) and then I'd play a conservative covered call strategy on the stock selling a new position about once a month. That's just me. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
The formula equivalent of EBITDA for personal finance? | This should not be taken to be financial advice or guidance. My opinions are my own and do not represent professional advice or consultation on my part or that my employer. Now that we have that clear... Your idea is a very good one. I'm not sure about the benefits of a EBITDA for personal financial planning (or for financial analysis, for that matter, but we will that matter to the side). If you have a moderate (>$40,000) income, then taxes should be one the largest, if not the largest chunk of your paycheck out the door. I personally track my cash flow on a day-by-day basis. That is to say, I break out the actual cash payments (paychecks) that I receive and break them apart into the 14 day increments (paycheck/14). I then take my expenses and do the same. If you organize your expenses into categories, you will receive some meaningful numbers about your daily liquidity (i.e: cash flow before taxes, after taxes, cash flow after house expenses, ect) This serves two purposes. One, you will understand how much you can actually spend on a day-to-day basis. Second, once you realize your flexibility on a day-to-day basis, it is easy to plan and forecast your expenses. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What's the least risky investment for people in Europe? | First of all, congratulations on saving some money. So many people these days do not even get that far. As far as investments, what is best for you depends heavily on your: Here is a quick summary of types of assets that are likely available to you, and my thoughts on why they may or may not be a good fit for your situation. Cash Equivalents Cash Equivalents are highly liquid, meaning you can get cash for them on fairly short notice. In particular, Money Markets and Certificates of Deposit (CDs) are also considered very safe when issued by a bank, as they are often insured against loss by the government up to a certain amount (this varies quite a lot by country within Europe, see the Wikipedia article here for additional detail. Please note that in the case of a CD, you are usually unable to get access to your money for the length of the investment period, which is usually a short period of time such as 3 months, 6 months, or 1 year. This is a good choice if you may need your money back on short notice, and your main goal is to preserve your principal. However, the returns tend to be very low and often do not keep pace with inflation, meaning that over several years, you may lose "real" purchasing power, even if you don't lose nominal value in your account. Special Note on Cash Equivalents If the money you want to invest is also your Emergency Fund, or you do not have an Emergency Fund, I would highly recommend Cash Equivalents. They will provide the highest level of Liquidity along with a short Time Horizon so that you can get your money as needed in the case of unforeseen expenses such as if your car breaks down. Debt Debt investments include government and corporate bonds. They are still considered relatively safe, as the issuer would need to default (usually this means they are in bankruptcy) in order for you not to be paid back. For example, German bonds have been considered safer than Greek bonds recently based on the underlying strength of the government. Unlike Cash Equivalents, these are not guaranteed against loss, which means that if the issuer defaults, you could lose up to 100% of your investment. Bonds have several new features you will need to consider. One is interest rate risk. One reason bonds perform better than cash equivalents is that you are taking on the risk that if interest rates rise, the fixed payments the bond promises will be worth less, and the face value of your bond will fall. While most bonds are still very Liquid, this means that if you need to sell the bond before it matures, you could lose money. As mentioned earlier, some bonds are riskier than others. Given that you are looking for a low-risk investment, you would want to select a bond that is considered "invesment grade" rather than a riskier "junk" bond. Debt investments are a good choice if you can afford to do without this money for a few years, and you want to balance safety with somewhat better returns than Cash Equivalents. Again though, I would not recommend investing in Debt until you have also built up a separate Emergency Fund. If you do choose to invest in bonds, I recommend that you diversify your risks by investing in a bond fund, rather than in just one company's or government's debt. This will reduce the likelihood that you will experience a catastrophic loss. Ownership Ownership assets includes stocks and other assets such as real estate and precious metals such as gold. While these investments can have high returns, in your situation I would strongly recommend that you not invest in these types of investments, for the following reasons: For these reasons, debt is considered a safer investment than equity for any particular company, government, or the market as a whole. Ownership assets are a good choice for people who have a high Risk Tolerance, long Time Horizon, low Liquidity needs, and will not be bothered by larger potential changes in the value of the investment at any given time. Special Note on Gold I would consider Gold a very risky investment and not a good fit for you at the moment based on what you've shared in your question. Gold is considered "safe" in the sense that people believe that if the economy goes into recession, depression, or collapses entirely, gold will continue to be valuable. In a post-apocalyptic world where paper money became worthless, it is still a good bet that gold will always be considered valuable within human society as a store of value. That being said, the price of gold fluctuates almost entirely based on how bad people think things are going to get. Think about the difference between gold and a company like Coca-Cola. Would you like to own 100% of Coca-Cola? Of course, because you know there is a very good chance that people will continue to spend money all over the world on their products. On the other hand, gold itself produces no products, no sales, no profits, and no cash flow. As such, if you buy gold, you are really making a speculative bet that gold will be in higher demand tomorrow than it is today. You are buying an asset (the gold) rather than part of a company's equity or debt that is designed to throw off payments to its investors in the form of bond payments or dividends. So, if people decide next year that things are improving, it is possible that gold could lose value, given that gold prices are at historically high levels. Gold could be a good choice for someone who has a large, well-diversified investment portfolio, and who is looking for a hedge to protect against inflation and other risks that they have taken on via their other investments. I hope that is helpful - best of luck in your choices. Let us know what you decide! | Share your insights or perspective on the financial matter presented in the input. |
What's the least risky investment for people in Europe? | Putting the money in a bank savings account is a reasonably safe investment. Anything other than that will come with additional risk of various kinds. (That's right; not even a bank account is completely free of risk. Neither is withdrawing cash and storing it somewhere yourself.) And I don't know which country you are from, but you will certainly have access to your country's government bonds and the likes. You may also have access to mutual funds which invest in other countries' government bonds (bond or money-market funds). The question you need to ask yourself really is twofold. One, for how long do you intend to keep the money invested? (Shorter term investing should involve lower risk.) Two, what amount of risk (specifically, price volatility) are you willing to accept? The answers to those questions will determine which asset class(es) are appropriate in your particular case. Beyond that, you need to make a personal call: which asset class(es) do you believe are likely to do better or less bad than others? Low risk usually comes at the price of a lower return. Higher return usually involves taking more risk (specifically price volatility in the investment vehicle) but more risk does not necessarily guarantee a higher return - you may also lose a large fraction of or even the entire capital amount. In extreme cases (leveraged investments) you might even lose more than the capital amount. Gold may be a component of a well-diversified portfolio but I certainly would not recommend putting all of one's money in it. (The same goes for any asset class; a portfolio composed exclusively of stocks is no more well-diversified than a portfolio composed exclusively of precious metals, or government bonds.) For some specifics about investing in precious metals, you may want to see Pros & cons of investing in gold vs. platinum?. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How do multi-currency bank accounts work? What is the advantage? | Today typically a Business needs to hold accounts in more than one currency. Banks in certain countries are offering what is called a dual currency account. It is essentially 2 accounts with same account number but different currency. So One can have an account number say 123456 and have it in say AUD and USD. So the balance will always show as X AUD and Y USD. If you deposit funds [electronic, check or cash] in USD; your USD balance goes up. Likewise at the time of withdrawal you have to specify what currency you are withdrawing. Interest rates are calculated at different percentage for different currencies. So in a nutshell it would like operating 2 accounts, with the advantage of remembering only one account number. Designate a particular currency as default currency. So if you don't quote a currency along with the account number, it would be treated as default currency. Otherwise you always quote the account number and currency. Of-course bundled with other services like free Fx Advice etc it makes the entire proposition very attractive. Edit: If you have AUD 100 and USD 100, if you try and withdraw USD 110, it will not be allowed; Unless you also sign up for a auto sweep conversion. If you deposit a GBP check into the account, by default it would get converted into AUD [assuming AUD is the default currency] | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
what is the meaning of allowing FDI in Insurance and pension funds | Insurance in India is offered by Private companies as well [ICICI, Maxbupa, SBI, Max and tons of other companies]. These are priavte companies, as Insurance sectors one has to look for long term stability, not everyone can just open an Insurance company, there are certain capital requirements. Initially the shareholding pattern was that Indian company should have a majority shareholding, any foreign company can have only 26% share's. This limit has now been extended to 49%, so while the control of the private insurance company will still be with Indian's the foreign companies can invest upto 49%. It's a economic policy decission and the outcome whether positive or negative will be known after 10 years of implemenation :) Pro's: - Brings more funds into the Insurance segment, there by bringing strength to the company - Better global practise on risk & data modelling may reduce premium for most - Innovation in product offering - More Foreign Exchange for country that is badly needed. Con's: - The Global companies may hike premium to make more profits. - They may come up with complex products that common man will not understand and will lead to loss - They may take back money anytime as they are here for profit and not for cause. Pension today is offered only by Government Companies. There is a move to allow private companies to offer pension. Today life insurance companies can launch Pension schemes, however on maturity the annuity amount needs to be invested into LIC to get an annuity [monthly pension]. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
What are “upstream investments” and “downstream investments” in this context? | Upstream is into businesses that supply the original business; downstream is into businesses that make use of the original product. So in that description, what they are saying is that the original business received products from plantations and sent products to manufacturing. This is also called vertical integration. Meaning that they are diversifying along their supply chain so that they control more of it. This is in contrast with horizontal integration, where they move into new products that either compete with the existing products or which are entirely separate. In general, the upside of vertical integration is that a company is less reliant on suppliers (and intermediate consumers) and has more control over its supply chain. The downside is that they have less opportunity to partner with other companies in the same supply chain, as they compete with them. Some companies are better at managing to do both. For example, Amazon.com has integrated fulfillment and sales. But partners can still do their own fulfillment and/or sales, choosing how much to send out to Amazon. If you are investing in individual stocks, integrated companies can be problematic in that they cut across diversification areas. So they can be harder to balance with other stocks. You can either buy plantations, transport, and manufacturing together or not buy at all. If your investment strategy says to increase plantations and reduce manufacturing, this can be difficult to implement with an integrated company. Of course, everyone else has the same problem, which can lead to integrated companies being undervalued. So they may be an opportunity as a value stock. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
I am the sole owner of an LLC. Does it make a difference if I file as an S-Corp or a sole-member LLC? | S-Corp are taxed very different. Unlike LLC where you just add the profit to your income with S-Corp you have to pay yourself a "reasonable" salary (on w-2) which of course is a lot more paperwork. I think the advantage (but don't hold me accountable for this) is if your S-Corp makes a lot more than a reasonable salary, then the rest of the money can be passed through on your personal return at a lower (corp) rate. | Share your insights or perspective on the financial matter presented in the input. |
I am the sole owner of an LLC. Does it make a difference if I file as an S-Corp or a sole-member LLC? | 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. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
I am the sole owner of an LLC. Does it make a difference if I file as an S-Corp or a sole-member LLC? | I'm assuming that when you say "convert to S-Corp tax treatment" you're not talking about actually changing your LLC to a Corporation. There are two distinct pieces of the puzzle here. First, there's your organizational form. Your state, which is where the business is legally formed and recognized, creates the LLC or Corporation. "S-Corp" doesn't come into play here: your company is either an LLC or a Corporation. (There are a handful of other organizational types your state might have, e.g. PLLC, Limited Partnership, etc.; none of these are immediately relevant to this discussion). Second, there's the tax treatment you receive by the IRS. If your company was created by the state as an LLC, note that the IRS doesn't recognize LLCs as a distinct organizational type: you elect to be taxed as an individual (for single member LLCs), a partnership (for multiple member LLCs), or as a corporation. The former two elections are "pass through" -- there's no additional level of taxation on corporate profits, everything just passes through to the owners. The latter election introduces a tax on corporate profits. When you elect pass-through treatment, a single-member LLC files on Schedule C; a multiple-member LLC will prepare a form K-1 which you will include on your 1040. If your company was created by the state as a Corporation (not an LLC), you could still elect pass-through taxation if your company qualifies under the rules in Subchapter S (i.e. "an S-Corp"). States do not recognize "S-Corp" as part of the organizational process -- that's just a tax distinction used by the IRS (and possibly your state's tax authorities). In your case, if you are a single-member LLC (and assuming there are no other reasons to organize as a corporation), talking about "S-Corp tax treatment" doesn't make any sense. You'll just file your schedule C; in my experience it's fairly simple. (Note that this is based on my experience of single- and multiple-member LLCs in just two states. Your state may have different rules that affect state-level taxation; and the rules may change from year to year. I've found that hiring a good CPA to prepare the forms saves a good bit of stress and time that can be better applied to the business.) | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
I am the sole owner of an LLC. Does it make a difference if I file as an S-Corp or a sole-member LLC? | In the United States, with an S-Corp, you pay yourself a salary from company earnings. That portion is taxed at an individual rate. The rest of the company earnings are taxed as a corporation, which often have great tax benefits. If you are making over $80K/year, the difference can be substantial. A con is that there is more paperwork and you have to create a "board" of advisors. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How do the wealthy pay for things? | This is second hand information as I am not a millionaire, but I work with such people everyday and have an understanding of how they handle cash: The wealthy people don't. Simple. Definitely not if they don't have to. Cash is a tool to them that they use only if they get benefit of it being a cash transaction (one of my friends is a re-seller and he gets a 10% discount from suppliers for settling lines using cash). Everything else they place on a line of credit. For people who "dislike" credit cards and pay using ATM or debit cards might actually have a very poor understanding of leverage. I assure you, the wealthy people have a very good understanding of it! Frankly, wealthy people pay less for everything, but they deserve it because of the extreme amount of leverage they have built for themselves. Their APRs are low, their credit limits are insanely high, they have longer billing periods and they get spoiled by credit card vendors all the time. For example, when you buy your groceries at Walmart, you pay at least a 4% markup because that's the standardized cost of processing credit cards. Even if you paid in cash! A wealthy person uses his credit card to pay for the same but earns the same percentage amount in cash back, points and what not. I am sure littleadv placed the car purchase on his credit card for similar reasons! The even more wealthy have their groceries shipped to their houses and if they pay cash I won't be surprised if they actually end up paying much less for fresh (organic) vegetables than what equivalent produce at Walmart would get them! I apologize for not being able to provide citations for these points I make as they are personal observations. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How do the wealthy pay for things? | While you would probably not use your ATM card to buy a $1M worth mansion, I've heard urban legends about people who bought a house on a credit card. While can't say its reliable, I wouldn't be surprised that some have actual factual basis. I myself had put a car down-payment on my credit card, and had I paid the sticker price, the dealer would definitely have no problem with putting the whole car on the credit card (and my limits would allow it, even for a luxury brand). The instruments are the same. There's nothing special you need to have to pay a million dollars. You just write a lot of zeroes on your check, but you don't need a special check for that. Large amounts of money are transferred electronically (wire-transfers), which is also something that "regular" people do once or twice in their lives. What might be different is the way these purchases are financed. Rich people are not necessarily rich with cash. Most likely, they're rich with equity: own something that's worth a lot. In this case, instead of a mortgage secured by the house, they can take a loan secured by the stocks they own. This way, they don't actually cash out of the investment, yet get cash from its value. It is similarly to what we, regular mortals, do with our equity in primary residence and HELOCs. So it is not at all uncommon that a billionaire will in fact have tons of money owed in loans. Why? Because the billions owned are owned through stock valuation, and the cash used is basically a loan secured by these stocks. It might happen that the stocks securing the loans become worthless, and that will definitely be a problem both to the (now ex-)billionaire and the bank. But until then, they can get cash from their investment without cashing out and without paying taxes. And if they're lucky enough to die before they need to repay the loans - they saved tons on money on taxes. | Share your insights or perspective on the financial matter presented in the input. |
How do the wealthy pay for things? | I was once the personal assistant to two wealthy NYC sisters. They did not pay for anything. For example, if we were riding the subway, I would pay, and be reimbursed by the Company. They had multiple residences and investment properties. Each property was purchased through a separate Limited Liablity Corporation, and paid for by the Company. When they purchased, donated or sold art, it was through their family Foundation. Their income primarily came from a draw of funds from the family estate, although one of them worked as an architect, which provided further income. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
As an employer, how do I start a 401k or traditional IRA plan? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
As an employer, how do I start a 401k or traditional IRA plan? | OK, so first of all, employers don't set up IRAs. IRA stands for Individual Retirement Account. You can set up a personal IRA for yourself, but not for employees. If that is what you're after, then just set one up for yourself - no special rules there for self employment. As far as setting up a 401(k), I'd suggest checking with benefits management companies. If you're small, you probably don't have an HR department, so managing a 401(k) yourself would likely be overly burdensome. Outsourcing this to a company which handles HR for you (maybe running payroll, etc. also), would be the best option. Barring that, I'd try calling a large financial institution (Schwab, Fidelity, etc.) for clear guidance. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
As an employer, how do I start a 401k or traditional IRA plan? | If you are the sole owner (or just you and your spouse) and expect to be that way for a few years, consider the benefits of an individual 401(k). The contribution limits are higher than an IRA, and there are usually no fees involved. You can google "Individual 401k" and any of the major investment firms (Fidelity, Schwab, etc) will set one up free of charge. This option gives you a lot of freedom to decide how much money to put away without any plan management fees. The IRS site has all the details in an article titled One-Participant 401(k) Plans. Once you have employees, if you want to set up a retirement plan for them, you'll need to switch to a traditional, employer-sponsored 401k, which will involve some fees on your part. I seem to recall $2k/yr in fees when I had a sponsored 401(k) for my company, and I'm sure this varies widely. If you have employees and don't feel a need to have a company-wide retirement plan, you can set up your own personal IRA and simply not offer a company plan to your employees. The IRA contribution limits are lower than an individual 401(k), but setting it up is easy and fee-free. So basically, if you want to spend $0 on plan management fees, get an individual 401(k) if you are self-employed, or an IRA for yourself if you have employees. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Acquiring first office clothes | While in the interview stage you need one good outfit. Take care of them and they will see you through this stage of the process. Shoes, ties, shirt, and a suit can all be purchased on sale. The fact that you have months before graduation give you time to purchase them when there is a sale. Off-the-rack is good enough for a suit for this stage of your life. There is no need to go custom made when you are just starting out. In fact you may find you never need more than one or two suits, and they never need to be custom made. | Share your insights or perspective on the financial matter presented in the input. |
Acquiring first office clothes | Like the other answers, I'm not entirely sure the equivalent exists in your country. But in the US there are thrift stores run by charities like GoodWill or the Salvation Army that sell clothes for very little money. When my wife was in a similar situation very early in her career she learned the trick of driving to thrift stores nearest to the richest neighborhoods in town. She often found high dollar designer clothes that had been worn once (to an event or party) and then donated. Apparently it is quite gauche for the well-to-do to be caught dead in the same outfit twice. It wasn't uncommon for her to find clothes/shoes that retailed for hundreds of dollars for $10 or so. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Acquiring first office clothes | Sounds like you're a man, so you're in luck. Our formalwear all looks similar enough that you can get by on a very short rotation. You can buy 1 pair of decent slacks in a versatile color like navy or grey with a pair of brown shoes with matching belt then have as little as 2 button down shirts (white and light blue). You can help keep the button downs clean by wearing an undershirt. This outfit can even overlap your interview outfit if you want to save more (especially if you want a good jacket/sport coat). The real key is to just not pick anything flashy and nobody will ever notice. You'll be running to the dry cleaners every single weekend, but you won't have much in terms of up-front costs. For women though I have no clue how they manage this stuff. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How can I import customers and invoices from a previous year's Gnucash file? | There does not appear to be a way to export the customers and invoices nor a way to import them into another data file if you could export them. However, as said in the comments to your question, your question seems predicated upon the notion that it is 'best practice' to create a new data file each year. This is not considered necessary It should be noted that GnuCash reports should be able to provide accurate year-end data for accounting purposes without zeroing transactions, so book-closing may not be necessary. Leaving books unclosed does mean that account balances in the Chart of Accounts will not show Year-To-Date amounts. - Closing Books GnuCash Wiki The above linked wiki page has several methods to 'close the books' if that is what you want to do - but it is not necessary. There is even a description on how to create a new file for the new year which only talks about setting up the new accounts and transactions - nothing about customers, invoices etc. Note that you can 'close the books' without creating a new data file. In summary: you cannot do it; but you don't need to create a new file for the new year so you don't need to do it. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
us citizen receiving bank transfer from foreign boyfriend | No, any gifts you receive are not taxable to you. In fact, losing money in a scam (as this sure sounds like to me) can even be tax-deductible if you lose enough! I wouldn't recommend accepting anything. Usually people with millions are dollars are capable of setting up their own bank accounts. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Why does it take 3 days to do electronic transfers between banks? [duplicate] | I was perplexed by this until a few days ago when it finally clicked in a meeting with our fraud and money laundering teams in work (I work on trading surveillance). Apparently fraud detection and prevention of money laundering are currently the biggest delayers when it comes to electronic transfer of funds, checking that the transferring party has the funds to transfer etc. takes no time at all. It takes some time for a bank user to "release" a funds transfer; once it has been initiated it is put into a queue to be reviewed as potentially fraudulent or money laundering activity. Almost every transaction has to be monitored for this from a legal standpoint. The compliance process can take multiple days. Once the process is complete the request also has to go through "settling" which is an end of day process whereby banks "net off" their customers' transactions with other banks and only pass the net value between them. This is an end of day process by nature so only happens once a day meaning that once all of the checks have occurred any transaction will take until the end of the day to crystallise for the bank and so get credited to their customers' accounts. Incidentally in the UK and Europe banks are moving to streamline this process through "faster payment" systems (that is the industry term for the technology) so that customers see the effect within a few hours (2 in the UK currently) and then the banks net off at the end of day as usual. This means reducing the time it takes to do the checks that have to be done using specialist software to flag transfers as potentially fraudulent or not and making banks' processes much clearer and faster. | Share your insights or perspective on the financial matter presented in the input. |
Why does it take 3 days to do electronic transfers between banks? [duplicate] | When Laurence Olivier took the role of Douglas Macarthur in the Unification Church's filming of Inchon, he told the press, "People ask me why I'm playing in this picture. The answer is simple: Money, dear boy." Banking systems are typically decades old and subject to innumerable legal and technical restrictions. Moving money more quickly from one client's account to another would definitely be in the clients' interest, but | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Swiss-style Monetary Policy | This is what is called "weasel words". They're trying to put some authority into their ad, but since they don't have any - they're putting meaningless words that sound important. Monetary policy is the state/central bank policy to control the supply of the available currency. Cannot think of a way to connect it to private investments. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Swiss-style Monetary Policy | I'm not sure what is traditionally meant by "Swiss-style monetary policy" but lately it has meant the same thing as US monetary policy, or Japanese monetary policy, or Euro monetary policy: PRINT. Look how many Swiss Francs it takes to buy a currency that cannot be printed: I'm not sure why they would be touting "Swiss-style monetary policy". That hasn't been too stellar lately. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Why does capital gains tax apply to long term stock holdings? | Why only long term investments? What do they care if I buy and sell shares in a company in the same year? Simple, your actually investing when you hold it for a long term. If you hold a stock for a week or a month there is very little that can happen to change the price, in a perfect market the value of a company should stay the same from yesterday to today so long as there is no news(a perfect market cannot exist). When you hold a stock for a long term you really are investing in the company and saying "this company will grow". Short term investing is mostly speculation and speculation causes securities to be incorrectly valued. So when a retail investor puts money into something like Facebook for example they can easily be burned by speculation whether its to the upside or downside. If the goal is to get me to invest my money, then why not give apply capital gains tax to my savings account at my local bank? Or a CD account? I believe your gains on these accounts are taxed... Not sure at what rate. If the goal is to help the overall health of business, how does it do that? During an IPO, the business certainly raises money, but after that I'm just buying and selling shares with other private shareholders. Why does the government give me an incentive to do this (and then hold onto it for at least a year)? There are many reasons why a company cares about its market price: A companies market cap is calculated by price * shares outstanding. A market cap is basically what the market is saying your company is worth. A company can offer more shares or sell shares they currently hold in order to raise even more capital. A company can offer shares instead of cash when buying out another company. It can pay for many things with shares. Many executives and top level employees are payed with stock options, so they defiantly want to see there price higher. these are some basic reasons but there are more and they can be more complex. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Why does capital gains tax apply to long term stock holdings? | Most well-off people have investments which they have held for long periods of time, often of very substantial value such as a large part of a company. They also have influence on legislators and officials through various social contacts, lobbyists, and contributions. They managed to convince these law makers to offer a lower tax on income derived from sales of such investments. The fig leaf covering this arrangement is that it "contributes to the growth of economy by encouraging long-term investment in new enterprises." | Share your insights or perspective on the financial matter presented in the input. |
Why does capital gains tax apply to long term stock holdings? | It's a matter of social policy. The government wants people to make long term investments because that would lead to other long-term government goals: employment, manufacturing, economical growth in general. While speculative investments and day-trading are not in any way discouraged, investments that contribute to the economy as a whole and not just the investor are encouraged by the lower tax rates on the profits. While some people consider it to be a "fig leaf", I consider these people to be populists and dishonest. Claiming that long term social goals are somehow bad is hypocrisy. Claiming that short-term trading contributes to the economy as a whole is a plain lie. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Why does capital gains tax apply to long term stock holdings? | In Australia we have a 50% capital gain discount if you hold the asset for more than 12 months, whether it is in shares, property or other assets. The main reason is to encourage people to invest long-term instead of speculating or trading. The government sees speculation or short term trading as more risky than long term investing for the everyday mum and dad investor, so rewards people it sees taking the lower risk long term view. In my opinion, long term investing, short term trading and speculation can all be risky for someone who is unedutated in the financial markets, and the first rule of investing should be to consider the asset itself and not the tax implications. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Self Assessment UK - Goods and services for your own use | 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). | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Self Assessment UK - Goods and services for your own use | Work on your own site is certainly not relevant here, that's just a part of your trade, not a service you provided to yourself. The business received the benefit of that work, not you. Suppose your business sold televisions. If you took a TV from stock for your own lounge, that would be included in this box because you have effectively paid yourself with a TV rather than cash. If you take a TV from stock to use as a demo model, that's part of your trade and not goods you have taken out of the business for your own use. For services provided to your dad it's less clear. As Skaty said, it depends whether it's your business providing the service, or you personally. If you gave your dad a free TV then it would be clear that you have effectively paid yourself with another TV and then given it to your dad as a gift. With services it's less clear whether you're receiving services from the business for free. You might consider how it would be treated by your employer if you weren't self-employed. If you were just applying your skills to help your dad in your free time, your employer wouldn't care. If you used your employer's equipment or facilities, or hosted his site on a server that your employer pays for, your employer would be more likely to discipline you for effectively stealing services from them, as they would if you took a TV from their warehouse for him. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Early Retirement Options (UK) | It's highly unlikely that you will be able to achieve 8% and would consider myself lucky to get 4% in the current interest rate environment. You might want to read some reviews of peer-to-peer lending and even try it out some yourself. Give yourself something like 2000 Euros/Dollars and a year. If you truly need 8% to retire, then you are not ready to retire. Here in the US it increases the complexity of your tax forms. I did an experiment with lending club. Here is what I found: After 18 months of giving it a try, I decided to abandon this strategy. My money will receive better and safer returns in a dividend focused mutual fund. However, I encourage you to give it a try yourself. | Share your insights or perspective on the financial matter presented in the input. |
Early Retirement Options (UK) | Some people put money into Venture Capital Trusts for the yields they offer. The risks are different and they are considered higher risk than ordinary equities; you need to be a sophisticated investor or high net worth individual to consider them. https://www.wealthclub.co.uk/articles/investment-news/why-i-never-sold-vct/ I'm not recommending these for you, just pointing it out as another option as per the question. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Online accounting with Stripe/PayPal transactions | Crickets here, so I'll respond with what I ended up doing. At the end of each month, I download transaction data from each of Stripe and PayPal. For each, I do the following: So it is just six entries in Wave per month plus a little spreadsheet manipulation to determine revenues and fees. Takes about 10 minutes to do this. I really dislike Wave's "automatic" integration with PayPal. It creates a lot of entries, and it also doesn't seem reliable so it is easy for transactions to get lost. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How to handle taxes related to affiliate marketing? | Is it right that I request form W-9 or form W-8BEN (for non U.S. citizens) from the affiliate users before sending them payments? Not just OK. Required. I know that I have to send form 1099, but I don't know where does this form should go to. Should I send it to the IRS or the affiliate user or both? Both. There's also form 1096 that you need to send to the IRS. Read the instructions. Should I send form 1099 once a year or each time I make a payment to the affiliate? Once a year. Read the instructions. Do I have to send form 1099 when the money earned by the affiliate hit a certain threshold or I have to send it anyway? $600 or more requires the form, but you can send for any amount. Read the instructions. Is there any other forms or documents to request from or send to the affiliate user or the IRS? There may be additional forms. Especially if the recipient is a foreign person and you withhold taxes. Talk to your tax adviser. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How does per-annum depreciation for taxes work after the first year of depreciation? | The first method is the correct one. You bought an asset worth of $1000 and you put it on your depreciation schedule. What it means is that you get to write off the $1000 over a certain period of time (and not at once, as you do with expenses). But the value you're writing off is the $1000 regardless of how much you've written off already. Assume you depreciate in straight line over 5 years (that's how you depreciate computers for Federal tax purposes, most states follow). For the simplicity of the calculation, assume you depreciate each year as a whole year (no mid-year/mid-quarter conventions). The calculation is like this: If you sell the computer - the proceeds above the adjusted basis amount are taxed as depreciation recapture up to the accumulated depreciation amount, and as capital gains above that. So in your case - book value is the adjusted basis at the end of the year (EOY), depreciation this year is the amount you depreciate in the year in question out of the total of the original cost, and the accumulated depreciation is the total depreciation including the current year. In Maryland they do not allow depreciating to $0, but rather down to 25% of the original cost, so if you bought a $1000 computer - you depreciate until your adjusted basis is $250. Depreciation rates are described here (page 5). For computers (except for large mainframes) you get 30% depreciation, with the last year probably a bit less due to the $250 adjusted basis limitation. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How to categorize shared income? | My company did not have income of $1000 and have a $500 expense Why not? Your company received $1000 from you, and based on its agreement with the other company - transferred out half of it. How does it not translate to having $1000 income and $500 expense? When I run a report I want to see that my business has $500 of income not $1000 with a $500 expense You can write in your reports whatever you want, but if you want to see the real picture, then that is exactly what you should be expecting. That said, transferring money from yourself to your company is generally not considered income. You can have it booked as owner's equity, or a owner's loan if the company is required to repay. Unless you're paying to your company for some services provided or assets transferred, that is. | Share your insights or perspective on the financial matter presented in the input. |
How prudent would it be to invest (stocks/equity) in businesses that are based on Cash transactions? | If they're hiding their profits from the government, what makes you think they wouldn't hide their profits from their shareholders? | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How prudent would it be to invest (stocks/equity) in businesses that are based on Cash transactions? | Every listed company needs to maintain book of accounts, when you are investing in companies you would have to look at what is stated in the books and along with other info decide to invest in it. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why buy stock of a company instead of the holding company who has more than 99% of the stocks | In a situation like this, I presume you'd invest in the child company if you thought that the child company would increase in value at a higher rate than the parent. You'd invest in the parent company if you thought the parent company would perform well as a whole, but you did not want to assume the risk of an individual company underneath it. Say the child company is worth 100 million, and the parent company is worth 500 million. You've invested a sum of money in the child company. The child company performs very well, and increases in value by, say, 20 million. As the parent company owns the child, we could say it also increases in value by roughly 20 million. The difference is proportional - Your investment in the child sees a 20% gain in value, whereas your investment in the parent sees a 4% gain in total value, as in this example the parent company, which owns nearly 100% of the child company, is worth 5x more and thus proportionally sees 1/5 the increase in value, due to it being worth more as a whole. Think of it similarly to a mutual fund or ETF that invests in many different stocks on the market. As the market does well, that mutual fund or ETF does well, too. As the mutual fund is made up of many individual stocks, one stock performing very well, say at a 10-20% increase in value, does not raise the value of the ETF or mutual fund by 10-20%. The etf / mutual fund will perform slightly better (Assuming all other components remain equal for this example), but only proportionally to the fraction of it that's made up of the stock that's performing well. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Why buy stock of a company instead of the holding company who has more than 99% of the stocks | Also VW has more brands, i.e. is more diversified This isn't necessarily a good thing for investing. It makes the company less likely to go down, but it limits your portfolio. For example, say you think that Hyundai is a good alternative to Volkswagen (VW) but really like Audi. If you buy VW, you get some Audi but a lot more of the rest of VW. Then if you bought Hyundai, you'd be overrepresented in that segment of the market. Audi may not be structured uniquely, but it is still the only company selling Audi brand cars. Perhaps someone thinks that those models will do well. That person may think that Audi will do exceptionally well in its niche. Having many brands isn't necessarily great. General Motors had something like sixteen brands before declaring bankruptcy. It only has twelve now. Now, it sounds like you feel the opposite about it. You don't particularly like Audi as a stock and like VW better. Your reasons sound perfectly reasonable (I know little about either company). It may even be that VW is the only one buying Audi stock, because everyone else has the same view as you. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Do I have to pay taxes in the US if my online store sells to US customers even though I don't live in the US? | You're not physically present in the US, you're not a US citizen, you're not a green card holder, and you don't have a business that is registered in the US - US laws do not apply to you. You're not in any way under the US jurisdiction. Effectively connected income is income effectively connected to your business in the US. You're not in the US, so there's nothing to effectively connect your income to. Quote from the link: You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. You ask: If I form an LLC or C corp am I liable for this withholding tax? If you form a legal entity in a US jurisdiction - then that entity becomes subjected to that jurisdiction. If you're physically present in the US - then ECI may become an issue, and you also may become a resident based on the length of your stay. | Share your insights or perspective on the financial matter presented in the input. |
Is it possible to block previously authorized ACH access? | I had a similar situation a while ago, and here's what I learned: What are our options here to ensure that this company can't retry to take our money again via ACH? Close existing account and create a new one that has different account number? Yes. As a temporary solution keep ~$0 balance in the account so that their request for $840 can't be fulfilled? However, would our bank incur any fees because of insufficient funds each time the other company tries to charge us again? Bad idea. You may incur penalties for returned payment, or the bank may honor the payment and charge you overdraft fees. Provide to our bank the service termination notice that proves that we are not in business with the other company anymore and effectively block them. However, termination notice has only our signature Bank doesn't care. ACH withdrawal is akin to a check. The assumption is that the other side has entitlement. You can put stop payment once its processed and try to reverse it claiming fraud, but the end result will be #1: you'll end up getting a new account set up, while they try to recover the money. This is one of the reasons I'm reluctant allowing standing ACH authorizations any more. Generally, the American banking system is very much geared against the consumers, and in many ways is very retarded. In a more advanced countries (which is almost any other country than the US), the standing withdrawal authorization goes through your bank and can be revoked. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How can a school club collect money using credit cards? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How can a school club collect money using credit cards? | 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. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Advantages of Shareholder over Director in new Company | 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. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Advantages of Shareholder over Director in new Company | 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. | Share your insights or perspective on the financial matter presented in the input. |
What options are available for a home loan with poor credit but a good rental history? | Why not just do an FHA loan? The minimum credit score is 580, and you can sometimes even go lower than that. Another alternative is to consider a rent-to-own agreement with his landlord, since it sounds like if he doesn't buy he'd continue renting there anyway. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What options are available for a home loan with poor credit but a good rental history? | Here are some (not all) things that can help overcome a low credit score: Getting a new job may actually hurt unless it's a substantial increase in income. Banks usually look at salary going back 2 years, and look for consistent, maintainable income. If you just got a new job that pays more, the bank may conservatively assume that it may not last. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What options are available for a home loan with poor credit but a good rental history? | Take the long term view. Build up the cash. Once you have enough cash in the bank, you don't need a credit score. With 6 months living expenses in the bank after paying 20% down on a small house, he should have no issues getting a reasonably priced mortgage. However, if he waited just a bit longer he might buy the same house outright with cash. When I ran the computations for myself many years ago, it would have taken me half as long to save the money and pay cash for my home as it did for me to take a mortgage and pay it off. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Can I pay estimated taxes based on last year's taxes if I anticipate more income this year? | 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. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Multi-state K-1 earnings to S-Corp | 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. | Share your insights or perspective on the financial matter presented in the input. |
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)? | In the UK Directgov don't specify anything more than "records", which leads me to think that a digital copy might be acceptable. With regards to bank statements, individuals (i.e. not self-employed, or owning a business) need to keep them for between 12 and 15 months after your tax return, depending on when you filed it. Source: Record keeping (individuals and directors) - Directgov | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)? | I am in the United States. There is no need to keep the statements in any form forever. Once the bank gives you a 1099 stating how much interest you have earned, you don't need to keep them. If you only have them in electronic form, that is good enough for the IRS. When you do need to show a bank statement, such as when applying for a loan, the loan company will be keeping a copy. It doesn't matter if it was a scan from the original, from a printed PDF, or if you printed it from your archives. In the US they used send the original check back to the person who wrote it, so they could keep it for their records. Then many banks went to carbons, but if you paid extra they would send you the original. Now the bank that cashes the check scans the check and destroys the original. If you want a copy for your records it only exists as a scanned image. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)? | Digital records are fine, but record-keeping practices are important. Be consistent. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Multiple SEO companies claiming I have a past-due invoice | Reading stuff like this makes me want to go into the debt collection business. Just send letters to random people demanding money. Sounds like an easy way to make a living. What's your name and address? Just kidding. If they are sending stuff to a Virginia PO Box, close the box with no forwarding address and consider it case closed. If they are targetting you personally in New Hampshire, the best thing to do is to sue proactively before it goes to collection. New Hampshire has strict anti-debt-collection laws. Basically, what you do is go to small claims court and fill out a one-page form. Sue them for $2000, $3000 or whatever is convenient. Do not hire a lawyer. You can do this in 2 hours of your own time. Your grounds are: (1) Violation of the creditor of NH FDCA laws. According to the laws the creditor has to put all kinds of specific stuff in their threat letters. Since they are not doing this, they have violated NH FDCA. Read the FDCA so you know which specific items they are violating. (2) Extortion. Since you do not owe them any money, demanding money from you is extortion which is both criminally and civilly actionable. You sue them for mental anguish due to extortion. The validity of your claims is irrelevant. You just need to get them in court. There are two possibilities: (A) They fail to show up. In this case you win and they owe you $3000 or whatever. Not only that if they later try to collect from you send a copy of the judgement to the credit bureau or collector or whatever and that is proof you owe them no money. (B) They hire some stooge local lawyer who appears. Accept the court's offer for arbitration. When you go into arbitration with the lawyer tell him you will drop the lawsuit if they send you a check for $500 and a hand-written guarantee from him that you will never hear from his client again. Either way, you come out ahead. By the way, it is absolutely guaranteed that the enemy lawyer will accept your offer in (B) above because the SEO company is already paying him $5000 to show up to answer your lawsuit, and the lawyer does not want to hang around all morning in court waiting for the case to be heard. If he can get out of there in half an hour for only $500 he will do it. -------------------------------UPDATE If all you are getting is calls and the caller refuses to identify themself, then it is definitely an illegal scam. It is illegal in New Hampshire to make collection calls and refuse to full identify who is calling. The phone company has methods for dealing with illegal calls. First you have to file a police report. Then you call Verizon Security at 1-800-518-5507 (or whatever your phone company is). They will trace the call and identify the caller. They you can make a criminal complaint in their jurisdiction unless the call is from Pakistan or something. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Paid part of my state refund back last year; now must declare the initial amount as income? | If you get 1099-G for state tax refund, you need to declare it as income only if you took deduction on state taxes in the prior year. I.e.: if you took standard deductions - you don't need to declare the refund as income. If you did itemize, you have to declare the refund as income, and deduct the taxes paid last year on your schedule A. If this year you're not itemizing - you lost the tax benefit. If it was not clear from my answer - the taxes paid and the refund received are unrelated. The fact that you paid tax and received refund in the same year doesn't make them in any way related, even if both refer to the same taxable year. | Share your insights or perspective on the financial matter presented in the input. |
Paid part of my state refund back last year; now must declare the initial amount as income? | http://www.irs.gov/taxtopics/tc503.html says you can deduct "Any prior year's state or local income tax you paid during the year." So I would say as long as you have good records, you can deduct the excess refund you had to pay back in the year in which you paid it. Whether or not your return was amended shouldn't affect whether or not it is deductible. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Self Employed, but not required to pay estimated taxes? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Are services provided to Google employees taxed as income or in any way? | Most of this is already regulated. "Food" specifically is exempt from taxes if it's done on premise and for the "convenience of the employer", whatever that means. See https://www.law.cornell.edu/uscode/text/26/119 Other benefits, such as commuter aid (public transport, parking) are tax free up to a certain limit (I think $255 for 2017) and any excess it taxable income. You can study the whole gory details at https://www.irs.gov/pub/irs-pdf/p15b.pdf | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Are services provided to Google employees taxed as income or in any way? | (1). Is this right? Pretty much, though this is a really rudimentary way to think about it. (2). If it is, why is it that extensive services are provided by high margin companies competing for talent, rather then lower margin businesses looking to boost their profits by reducing their expenditures on employees (by cutting out the government)? It's the polar opposite of that. Google (and companies like that) do things like have a day care center on premises. The company staffs a day care center which has costs, then lets employees use it for free. This is a business expense for Google, and in relative terms, a considerably large business expense that a lower margin business could no afford. Employer healthcare is a tax protected expense for employees via section 125 of the tax code. The company portion of the healthcare costs are a deductible business expense to the company, as expected. Healthcare is different than most other expenses because the employee can forego income before it's effectively received which negates it from taxable income. This doesn't work for something like food purchased at a cafe on a Google complex. If employee money is being spent at a corporate cafe, it's taxable income being spent (though the cost of running the cafe is a tax deductible business expense to the company). There have been discussions in congress to assess a value as income to employees for services like on site child care and no cost employee cafeterias. To address your new example: For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. This would be an audit prone administrative nightmare. Either You need John to submit receipts for reimbursement up to the $10,000 agreed upon amount which would require some kind of administrative staff, or After a very short period of time John forgets the abstract value of the food cost arrangement, that is only really benefiting the employer in the form of lower payroll expense, and is enticed away for more pay somewhere else anyway. The company may be saving $2,500, though again there will be an additional administrative expense of some sort, but John is only saving $500 ($97,500 * 0.20 - $100,000 * 0.20). | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Are services provided to Google employees taxed as income or in any way? | In many countries, giving something free to the employee is considered a taxable income equivalent, and taxes have to be paid on it. As it cannot be assigned to specific employees, the company pays a flat tax on it, so it actually costs the company more. Also, not all employees value it equally, or consider it as a part of their income, so reducing the salary accordingly would not be considered ok by many employees. As a result, the company can only do it as an additional offer, which is too expensive for small businesses. | Share your insights or perspective on the financial matter presented in the input. |
Are services provided to Google employees taxed as income or in any way? | Is this right? The example is slightly off. Google would be running a cafeteria that can be subsidized. Employees pay an amount to buy food. Not every one spends the same amount or eats the same amount of food. If someone doesn't use cafeteria; he doesn't get more money. For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. If a scheme is devised specifically to evade taxes; then it is invalid. In this case Bill may buy groceries worth only $5000. So keep track of which employee buys how much groceries in added cost of Google. Plus one can't really call it a business expense. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |