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e92c69de6712690a238ab5b1c880ec59	If a country can just print money, is global debt between countries real?	[ { "docid": "b12b0aabd80cb5c2609e5f39ae7a7ad3", "text": "The debt is absolutely real. China loans money to US via buying the US treasury bonds. The bond is essentially a promise to pay back the money with interest, just like a loan. As you point out, the US can print money. If this were to happen, then the USD that the owner of a treasury bond receives when the bond matures are worth less that than the USD used to purchase the bonds. There are lots of reasons why the US doesn't want to print lots of money, so the purchaser of the bond is probably confident it won't happen. If for some reason they think it is possible, then they will want to cover that risk by only purchasing bonds that have a higher interest rate. The higher interest offsets the risk of the USD being worth less. Of course, there are lots more details, e.g., the bonds themselves are bought and sold before maturity, but this is the basic idea.", "title": "" }, { "docid": "9ce931d868b678112c38d510efe1c7d3", "text": "\"I think the important fact here is that all of our currencies are Fiat Currencies. So currency technically means nothing, because (as you mentioned) the country could print more any time it wants. Now what makes it useful is the combination of two big things: So I would say, we know they owe us 100 \"\"dollars\"\", and the dollar is just a word we use to represent value. It is not technically worth anything, beyond the fact that the government controls the amount of that currency in circulation and you trust that people still want more of that currency.\"", "title": "" }, { "docid": "45185420c394230f6ea4c738968825fd", "text": "To understand this fully one would need to understand quite a few things. Not in scope here. In short, whenever China sells goods to US, it gets USD as most of the trades are in USD. China uses this money to buy other things it needs like Oil etc. After this they still have quite a bit of USD left with them. The money is left with them because US is buying more things from China and selling less things to China. This creates a surplus USD with China. So if US were to borrow money from China or any other country, it would be this excess money. Ofcourse how money gets created in first place is a different topic altogether.", "title": "" }, { "docid": "b6b44c3e9f0f7b02c284a23f945e7de1", "text": "This is a extremely complicated subject, but I assume you want a very simple answer (otherwise I'm not qualified to answer). The value of most currencies is closely tied to the economy of the county, so if China were to print a huge amount of yuan, then since the value of their economy has not really changed, the international currency markets would devalue the yuan to compensate. (This is rather like, if have shares in, say Apple, and they were to issue an extra billion shares, then the value of your shares would fall (by half), rather than for Apple to be suddenly be worth twice as much) Print too many notes and your currency basically becomes almost worthless, which is what happened to the Zimbabwean dollar. I like the idea of China skipping crate loads of actual yuan or dollars notes to America, but in practice, the borrowing is just a paper exercise, rather like an IOU. As to whether America owes Yuan or dollars, the answer is whatever has been agreed. Assuming the currencies are fairly stable, then since each country has more control over their own currency, it is natural for them to prefer their own currency. However, if America believes the value of the dollar will increase, they may prefer to pay back in Yuan (costing them less dollars), and if China believes the value of the dollar will decrease they may agree to that.", "title": "" }, { "docid": "db76c8b2fee1cabf362f8e88da5c5936", "text": "The main driver behind countries not printing themselves out of debt is the fact that it will cripple the economy, destroy citizens savings, asset valuations and piss all the countries trade partners off so much that they may stop doing business with them. You will have a few different extremes, look at Zimbabwe as an example of a country that just prints money like no ones business. America is essentially devaluing its currency to compete with China. That annoys the Chinese because their holdings are devalued and as such you then see people moving away from US treasuries into more stable commodities and currencies.", "title": "" }, { "docid": "a6e444f254d171aade7bf0b62c90b74d", "text": "\"Debt can be denominated either in a currency the country controls or a currency the country doesn't control. If the debt is denominated in a currency the country controls then they have the option of \"\"printing their way out of it\"\". That option doesn't come for free, it will devalue their currency on the global market and hurt savers in their country but it is an option. If the debt is denominated in a currency the country does not control then they don't have that option. As I understand it the US debt is in the first category. It's denominated in US dollars so the US government could if they so wished print their way out of it. On the other hand greece's debt is denominated in euros putting them at the mercy of european bankers.\"", "title": "" } ]	[ { "docid": "9a6362547ac6859733c2e74e823f56da", "text": "Japan printed 11 trillion yen on Monday. They do this by monetizing their own debt. The increase in the supply of yen affects the value of the currency. Strange thought, I know. Greece has an economic crisis because they were borrowing at rates that AAA rated countries do. Someone noticed that they weren't exactly a AAA country when they needed to ask for bailout money. Since all government debt is considered risk free and same as cash, this came as a shock to most 'investors' hence the 'crisis' edit: my bad, was 11 trillion, not 9 trillion", "title": "" }, { "docid": "ef900298081d52c0b7a1e22a0c5c2834", "text": "You don't understand government financing at all. Gov'ts earn revenue, aka, taxes. They also spend money. The different between the money they spend and they money they earn is the deficit. If you run a deficit for a long period of time, you incur a very large national debt. Now, you can finance (aka, pay for) a deficit by borrowing money. This means you can sell bonds, and instead of pay off the debt each year, you just pay the interest. If your spending balloons out of control, your the likely hood of you paying your debt decreases. If you are very unlikely to payback your debt, people won't buy any more of your bonds, and you no longer have the income (from borrowing) to pay off your interest from other debt you owe, or what ever other obligations you own (think mortgage payments, or teachers salaries, etc). Here's were Europe and USA differ: European nations can't just print money. They can issue more debt, but they can't just create more euros. IF you can print money, you can pay off your debt with money you literally created out of thin air (at the expense of your people, this is called inflation). But this is a form of cheating, eventually people won't trust you, and won't buy your debt either. So where do the banks come in? if the government is SOUND and the banks are NOT, the government can backstop the banks. This is what the US and UK did. Greece, Spain, Ireland all had to back stop their banks also. However, Greece, Spain, and Irelany ( and Italy, and Portugal) also have 1) A lot of debt 2) Structurally high deficits 3) Extremely high borrowing costs (high interest rates...because people don't trust them...because...) 4) Weak underlying economies The fourth point gets you in real trouble. if you have high entitlements, lots of poeple out of work, who the hell is paying taxes and what are they going to? You have no revenue! Remember, a govt works just like a household. It is easy for a good household to support one member, but it is difficult for a member to support an irresponsible household.", "title": "" }, { "docid": "65a545ad655f7500a92ec4ec4f1f0f4f", "text": "\"Japan Has Entered The Next Phase: Unlimited Money Printing Investors have been watching Japan for over a decade now, wondering what happens to a country that has a debt-to-GDP ratio of 234%--too big to realistically pay off. We are starting to get the answer. For review, Japan was the first country in the modern central banking era to begin a policy of quantitative easing--an unconventional form of monetary policy that is used when interest rates have already been lowered to the zero bound. Quantitative easing, which involves the purchase of \"\"printed\"\" money to buy government bonds, was widely viewed in Japan as a failure, but what most people don't understand about Japan's early QE experiments is that they were very small--less than $20 billion a month. It took Prime Minister Shinzo Abe, and BOJ Governor Haruhiko Kuroda to ramp up asset purchases significantly in what was called \"\"Abenomics.\"\" Shinzo Abe, Japan's prime minister. Photographer: Akio Kon/Bloomberg The results of Abenomics have been mixed, but the stock market is certainly higher and the yen is certainly lower, although it's not clear that either of those two developments have really helped. Japan's stock market is mostly foreign-owned, and the weaker yen didn't materially help the balance of trade. Still, there are a lot of people who said that Japan's endless debt deflation would have been worse without Abenomics, so it has remained firmly in place for five years. Abenomics rapidly began to cause distortions, as accelerated asset purchases caused the Bank of Japan to hold a huge percentage of outstanding government bonds, at 40% and rising, as well as being the majority holder of index ETFs. Investors who traffic in JGBs have remarked that the market now functions very poorly, since so much of the market is held by the BOJ. It seems that will get worse, not better. Last year the BOJ implemented a policy of yield curve targeting (ostensibly to help the banks), keeping the overnight rate negative but targeting a 10 year rate at zero percent. The BOJ has been buying longer-dated bonds for years, but this was the first time it ever explicitly capped a rate at longer maturities. Some people wondered how committed the BOJ would be to maintain that cap in the event that JGBs were caught up in a global duration selloff, which we experienced in the last two weeks. As 10-year JGB yields rose above 0.10% last week, the BOJ announced that it was prepared to buy an unlimited amount of bonds to keep yields close to zero percent. As you can imagine, buying an unlimited amount of 10-year JGBs involves printing a theoretically unlimited amount of yen, so the yen weakened significantly on the news. It still remains about ten percent stronger than it was in 2015. We are getting closer to the endgame for Japan. What happens if yields rise further? What happens if the yen depreciates significantly? How much could it depreciate? Could Japan have a currency crisis? What happens if the BOJ ends up owning the entire bond market? These are the questions that investors are asking, and nobody really knows the answers. We are in uncharted territory. I believe that a currency crisis isn't just possible--it's inevitable. And it probably happens at about the time that the BOJ owns all or nearly all of the JGB market, and has to resort to canceling the debt. This sounds like a neat magic trick to make the debt go away, but the laws of economics are not to be conned. Anything is possible--a currency crash, a bond market crash--anything. This is the very definition of debt monetization that resulted in hyperinflation in places like Weimar Germany and Zimbabwe. Is Japan different? We shall see. We will find out soon, as Japan has taken a major step in that direction. Jared Dillian is the author of All the Evil of This World, and the editor of the 10th Man newsletter for Mauldin Economics. Subscribe here. Forbes articles have 8 tracking cookies and 9 tracking scripts. This comment has none.(https://www.reddit.com/r/raws/comments/68xk37/about/)\"", "title": "" }, { "docid": "768afd430beaddf843064787b4537b0f", "text": "If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with lies”. I think that gives you just about all you might need to know regarding the man behind the video, and the nature of it's content. Oh, and it's purpose? To SELL YOU the same said newsletter. I guess it's natural for Stansberry to feel as he does. After all if the US gov had just busted me for conning and lying to folks, and fined ME 1.5Mill, I'd be having some pretty intense lurid fantasies about it going down in flames, and trying to hide any money I had left offshore also. A huge amount of his argument hinges on the US no longer being the world's reserve currency. Firstly, while I'll admit I'm none too happy with the way the national debt has been managed for oh, around 30 years how, (which includes I will note going from a pretty much balanced budget, to around an 80% increase in the debt from 2001 through 2008, when 'times were good' and there was little need to spend money we didn't have), when compared to a lot of other countries, we still don't look that bad. You have to ask yourself this first, if not the US, then WHO? are the governments of the world going to trust China? could the Yen handle the load? Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung.", "title": "" }, { "docid": "e4ee281926e6a79e88acbe72e41096f9", "text": "\"First of all, just for the sake of clarity, the Federal Reserve doesn't actually \"\"print\"\" money - that's the job of the BEP. What they do is they buy US Treasury bonds - i.e., loan money to the US government. The money they do it with are created \"\"from thin air\"\" - just by adding some numbers in certain accounts, thus it is described as \"\"printing money\"\". The US government then spends the money however it wishes to. The idea is that this money is injected into the economy - since the only way the US government can use the money from these loans is to spend them on buying something or give it to some people that would spend them. As it is a loan, sometime in the future the US government would pay these loans back, and in this moment the Fed would decide - if they want to \"\"contract\"\" the supply of money back, they just \"\"destroy\"\" the money they've got, by erasing the numbers they created before. They could also do it by selling the bonds they hold on the open market and then again \"\"destroy\"\" the money they got as proceeds, thus lowering the amount of money existing in the economy. This way the Fed can control how much money is out there and thus supposedly influence inflation and economic activity. The Fed could also inject money in the economy by buying any assets after creating the money - for example, right now they own about a trillion dollars worth of various mortgage-based securities. But since buying specific security would probably give unfair advantage to the issuers and owners of this security, usually US treasury bonds if what they buy. The side effect of increased supply of money denominated in dollars would be, as you noted, devaluation of dollars compared to other currencies.\"", "title": "" }, { "docid": "fe6aa5920172d01e15ecd2a8c400c64e", "text": "\"Bankruptcy is a way to the fiat currency system to regulate itself. The current system assume that there will always be more debts than money available. Since money is created with debt already attached to it, the difference between \"\"real\"\" money, and \"\"on paper\"\" money build up over time. When this disparity become to big, bankruptcies need to occur to bring those two number closer to each other. It's like earthquakes if you like, the tectonic plates build up tension that need to be released in many small shocks, or a few big shocks. The everyday bankruptcies represent the small quakes, and big recession represent too much build up that need to be released in one big shocks. It's a very high level explanation and it doesn't go into details, but it's roughly why it happens. EDIT: I wasn't saying that it was bad or not, I was simply explaining bankruptcy and why it's bound to happen. If you don't like the analogy, it's no reason for downvote. I know it may not be clear for everyone, but if you do not agree, please explain yourself.\"", "title": "" }, { "docid": "119a3ad16226b55f87fc67344cc171f8", "text": "\"> but the buying power of that money can be significantly reduced to the point where it's fundamentally useless, i.e. inter-war Germany and many countries in South and Central America. That's true, but how does that come about? The effect on buying power stems from the level of spending in the present period. Too little leaves you anywhere from outright deflation and contraction to weaker growth falling short of capacity. Too much reaches capacity and keeps spending, bidding up prices and driving down purchasing power. It has nothing to do with debt:GDP or interest payments. > Germany managed to skate by by creating a new Deutschmark in a confidence trick, and it worked because Germany is a solid, iron clad manufacturing powerhouse of a lot of stuff. There are two important differences between inter-war Germany and the US. First is that inter-war Germany lost a war. This real shock is kind of important. When you're talking about buying power of money, one side of it is the amount of money in circulation but the other side of it is how much real output there is to buy and German real output capacity collapsed after the war. Their most productive regions were occupied territory and they were no longer a powerhouse manufacturing a lot of stuff, driving down the value of their currency. So lesson number one from Germany: real output collapse harms your currency. The second problem is that losing a war left Germany saddled with war reparations denominated in foreign currency. When you're on the hook for something you don't print you're in a situation where you can run out of money and that's exactly what happened to them. They tried printing more of their own currency to buy the foreign stuff with but that quickly drove down the value of German currency. So lesson number two from Germany is you don't want to be on the hook for a currency you don't issue. Put the two together and you have a real supply shock + foreign-denominated debt eviscerating the buying power of German currency. It wasn't debt:GDP but the real basis for their economy collapsing out from under them pushed along by a need for foreign currency. >My question is, at what point do we engage Washington's unlimited money printing presses until we reach that point? In answer to your question, the printing presses are what funds the real economy. The worry in terms of avoiding \"\"that point\"\" is in making sure we keep that real economy productive and fully funded. Ironically, taking our eye off the ball to focus on budget balance at the expense of real output pushes the economy in the direction you're afraid of going. See also: the euro zone today.\"", "title": "" }, { "docid": "fdf71bd9c994ed091173b092c7fda40f", "text": "> Story printed literally as the only thing that can hold on value to the currency.. Japan has huge current account and trade surplus. they have to print money or else Yen will shoot up to the moon. Japan cannot afford over valued currency.", "title": "" }, { "docid": "2393a44dc0901577a7086d3f55c7bdc7", "text": "\"Sovereign states borrow money explicitly in a two primary ways: A sovereign cannot be compelled to repay debt, and there isn't a judicial process like bankruptcy to erase debt. When sovereigns default, they negotiate new terms with creditors and pay back some fraction of the actual debt owed. They can also print money to repay debt, which has other nasty consequences. But, while a state cannot be compelled to repay a debt, creditors cannot be compelled to loan money to the state either! Any enterprise of sufficient size needs access to capital via loans to meet daily obligations in anticipation of revenue -- even when times are good. Defaulting makes borrowing impossible or expensive, and is avoided. Regarding using your military to avoid repaying debt... remember what Napoleon said: \"\"An army travels on its stomach\"\". Military campaigns are expensive... no borrowing ability means the soldiers don't get paid and the food, fuel and ammo don't get delivered. Smaller countries have other risks as well. Many nations are essentially forced to use US Dollars as a reserve currency, or are forced by the market to borrow money in a foreign currency. This creates a situation where any risk of non-payment results in a deep devaluation of the local currency. When your debt is denominated in dollars, these shifts can dramatically increase your debt obligations from a local currency point of view. You also run the risk that a larger or richer company will park warships in your harbor and seize assets as payment -- the US and Britain engaged in this several times during the 19th and 20th centuries. In general, not paying the bills has a cascading effect. Bad situations get worse, and they do so quickly.\"", "title": "" }, { "docid": "b56622ebc3733c8796be7e12c241770e", "text": "Yes, and heres some pretty scary stats. Global debt went from about 200% of GPD in 2007 to 325% of GDP today. Global Debt is about 2.5x more than the value of global broad money (all the money in the world). The value of the derivatives market has increased to 6x the value of all global debt. Meaning a global market of packaging and trading debt exists that is 6x the value of the debt being traded, and 15x the value of all the money in the world.", "title": "" }, { "docid": "fefb2bebc863d73f23a0dfeed3af1802", "text": "Question: So basically the money created in this globalized digital world where capital is free to roam, it is referring to digital money and not actual physical cash. So the goldbugs that talk about america becoming weimar republic is delusional, since there isn't enough physical cash in relations to how big the economy is. And it is actually the debt lending that acts as a derivative of cash money that goes around posing as the money supply or the blood supply of an economy, and that feels like inflation, but when the debt is defaulted on or destroyed, underwritten or even paid back closing the circuit then it's deflationary? But does defaulting on ones debt create inflation since that money is still in the system and not being paid off? You know, when debts are paid off they are taken out of the system.", "title": "" }, { "docid": "90bde0cc066745cdff7035c91c4165a8", "text": "\"[There's about 10 trillion in gold](http://en.wikipedia.org/wiki/Gold_reserve) and about [2.8 trillion of US cash](http://visualeconomics.creditloan.com/the-value-of-united-states-currency-in-circulation/) in the world. Neither of these is anywhere large enough to be used for all the transactions in the world. For example, about [4 trillion a day](http://en.wikipedia.org/wiki/Foreign_exchange_market) changes hands in the currency markets alone - if that were required to be cash or gold it would be impossible to do so, and you'd suffer from more poorly priced goods since markets could not adjust as quickly, so vendors would charge more premium to handle the risk. Yes, there is not (and has not been) enough cash in circulation to run the world economy. There is also vastly too little gold, unless you want to strangle commerce due to not being enough money to trade. > \"\"posing as the money supply\"\" All money is debt, and always has been. Money is a placeholder that you can trade for goods later meaning someone owes you a thing. The value of that money is the debt they (or society) owes you for something you already did to get that money. So there is no posing, just most don't understand money, how it originated, why it exists, or why it works. They never ask the question \"\"how does money come into existance\"\". > Does defaulting on ones debt create inflation since that money is still in the system and not being paid off? Probably not much. Loans are made expecting some default, so the interest others pay on their loans helps offset the defaulted ones. If loans become riskier, the interest demanded increases, so the lender still (if they do their risk analysis well and no external events break their expectations) makes money. When you pay off a debt, that money, as you're paying it, is likely being lent in other loans, so paying it off does not do much. If you could pay off about 100 trillion in debt into the US economy in one payment you might break some things :)\"", "title": "" }, { "docid": "57904482f79435e2e4f514c6c20f95a3", "text": "They're not going to do anything about it. Washington needs the debt wheel to keep spinning, or the Dollar will lose its position as the Reserve Currency. Then all hell would break loose. Powerful countries like Japan are going to have to take the initiative. And apparently they are starting to. It has to be countries like Japan because if a weak country tries this, they'll get invaded.", "title": "" }, { "docid": "39430e9e2b7e42a65b94a9ad0d7d55bf", "text": "\"Correct! But this is only true when a central bank is involved. So if there's a single institution that has a territorial monopoly on the production of money (and competing currencies aren't allowed via \"\"legal tender laws\"\"), then the debt-based money system OP describes isn't actually the system being used. That's the problem with his post: he's trying to make it seem like our current system of fiat currencies is somehow natural or emergent. It's not. What we have now is the result of a legal monopoly.\"", "title": "" }, { "docid": "4b239353cfdc455d5b2bc50df36c11c4", "text": "\"Are you working for a company that offers a Dependent Care Account? You may be able to withhold up to $5000/yr pre tax for care for you child. If you cover more than half her expenses, she is your dependent. You can't \"\"double dip.\"\" If she is your dependent, she cannot be the care provider for purposes of the DCAS, see Pub 503 top of p7 \"\"Payments to Relatives or Dependents.\"\" How do you think a business would change your situation? The DCA is a small tax break, if you have no business now, this break isn't something that should drive this.\"", "title": "" } ]	fiqa
cb53c191d77727a234f604d9ad92e2f2	Why would a company sell debt in order to buy back shares and/or pay dividends?	[ { "docid": "e52bf1749687a26ac564b1945ae7f73f", "text": "I believe that article provides some good reasons, though it may be a bit light on technical details and there are likely other reasons a company would do it. So, if they can finance for less then they would lose to taxes by bringing the money home and they do not take on too much debt, this will likely work just fine and increase share holder value. Hopefully, someone else can provide some other reasonable scenarios. The bottom line is that it does not matter how they finance the share buybacks and/or dividend payments as long as they do not shoot themselves in the foot while doing it.", "title": "" }, { "docid": "dc2bc5b74217b1974606d5671b2f157d", "text": "It's a tax shelter. Foreign affiliates hold most of Microsoft's cash and investments. The cost of borrowing is much cheaper than repatriating the money and paying taxes. Those bonds are selling at rates similar to US Treasury Debt. Also, many people and organizations with lots of assets still borrow money for day to day expenses. Why? You tend to make a better return on investments which are committed for a number of years, and the timing of income from those investments may not coincide with your expenses.", "title": "" }, { "docid": "9a8d7995d7303fd33d5e096f3635f99c", "text": "\"There is a substantial likelihood over the next several years that the US Dollar will experience inflation. (You may have heard terms like \"\"Quantitative Easing.\"\") With inflation, the value of each dollar you have will go down. This also means that the value of each dollar you owe will go down as well. So, taking out a loan / issuing a bond at a very good rate, converting it into an asset that's a better way to store value (possibly including stock in a big stable company like MSFT) and then watching inflation reduce the (real) value of the loan faster than the interest piles up... that's like getting free money. Combine that with the tax-shelter games alluded to by everyone else, and it starts to look like a very profitable endeavour.\"", "title": "" }, { "docid": "cae49475cac493413300539035dcc851", "text": "When I play Railroad Tycoon III, I often send my company deep into debt to get cash on hand to buy back shares, effectively increasing my ownership of the company as an absolute percentage. Then I issue massive dividends until my company goes bankrupt, and start a new company. It's a way to shuttle money borrowed against a company's assets into my personal bank account at no risk to me. In the MSFT case, maybe they think there will be inflation and this is a hedge against holding so many dollars in cash already. If they can borrow a couple billion in 2010 dollars and pay it back in 2015 dollars, they're probably going to end up ahead if all they do is buy back shares. Paying dividends with the money seems stupid vs. buying back shares - they're just driving up income taxes for investors.", "title": "" }, { "docid": "f3efe3ae43a81233cc493fe7893ce776", "text": "My answer is not specific, or even maybe applicable, to Microsoft. Companies don't want to cut dividends. So they have a fixed expense, but the cashflow that funds it might be quite lumpy, or cyclical, depending on the industry. Another, more general, issue is that taking on debt to retire shares is a capital allocation decision. A company needs capital to operate. This is why they went public in the first place, to raise capital. Debt is a cheaper form of capital than equity. Equity holders are last in line in a bankruptcy. Bondholders are at the front of the line. To compensate for this, equity holders require a larger return -- often called a hurdle rate. So why doesn't a company just use cheaper equity, and no debt? Some do. But consider that equity holders participate in the earnings, where bondholders just get the interest, nothing more. And because lenders don't participate in the potential upside, they introduce conditions (debt covenants) to help control their downside exposure. For a company, it's a balance, very much the same as personal finances. A reasonable amount of debt provides low-cost capital, which can be used to produce greater returns. But too much debt, and the covenants are breached, the debt is called due immediately, there's no cash to cover, and wham! bankruptcy. A useful measure, if a bit difficult to calculate, is a company's cost of capital, and the return on that capital. Cost of capital is a blended number taking both equity and debt into account. Good companies earn a return that is greater than their cost of capital. Seems obvious, but many companies don't succeed at this. In cases where this is persistent, the best move for shareholders would be for the company to dissolve and return all the capital. Unfortunately, as in the Railroad Tycoon example above, managers' incentives aren't always well aligned with shareholders, and they allocate capital in ways advantageous to themselves, and not the company.", "title": "" }, { "docid": "72040b1a5a0b194ef0f0940bf9acac4a", "text": "Businesses have bond ratings just like people have credit ratings. It has become common for businesses to issue low rate bonds to show that they are strong, and leave the door open for further borrowing if they see an opportunity, such as an acquisition. One of the reasons Microsoft might want to build a credit reputation, is that people become familiar with their bonds and will purchase at lower rates when they want to borrow larger amounts of money, rather than assuming they are having financial issues which would lead them to demand higher rates.", "title": "" } ]	[ { "docid": "187da176de28134ca36a1b9726d3e13a", "text": "The shareholders have a claim on the profits, but they may prefer that claim to be exercised in ways other than dividend payments. For example, they may want the company to invest all of its profits in growth, or they may want it to buy back shares to increase the value of the remaining shares, especially since dividends are generally taxed as income while an increase in the share price is generally taxed as a capital gain, and capital gains are often taxed at a lower rate than income.", "title": "" }, { "docid": "43f2d72be1a3b0a5c3f9a5aa9964ed05", "text": "If that company issues another 100 shares, shouldn't 10 of those new 100 shares be mine? Those 100 shares are an asset of the company, and you own 10% of them. When investors buy those new shares, you again own a share of the proceeds, just as you own a share of all the company's assets. A company only issues new share to raise money - it is a borrowing from investors, and in that way can be seen as an alternative to taking on loans. Both share issuing and a loan bring new capital and debt into a company. The difference is that shares don't need to be repaid.", "title": "" }, { "docid": "7bd114ba8024fb450b6316413d117d97", "text": "who issued stock typically support it when the stock price go down. No, not many company do that as it is uneconomical for them to do so. Money used up in buying back equity is a wasteful use of a firm's capital, unless it is doing a buyback to return money to shareholders. Does the same thing happen with government bonds? Not necessarily again here. Bond trading is very different from equities trading. There are conditions specified in the offer document on when an issuer can recall bonds(to jack up the price of an oversold bond), even government bonds have them. The actions of the government has a bigger ripple effect as compared to a firm. The government can start buying back bonds to increase it's price, but it will stoke inflation because of the increase in the supply of money in the market, which may or mayn't be desirable. Then again people holding the bond would have to incentivized to sell the bond. Even during the Greek fiasco, the Greek government wasn't buying Greek bonds as it had no capital to buy. Printing more euros wasn't an option as no assets to back the newly printed money and the ECB would have stopped them from being accepted. And generally buying back isn't useful, because they have to return the principal(which might run into billions, invested in long term projects by the government and cannot be liquidated immediately) while servicing a bond is cheaper and investing the proceeds from the bond sale is more useful while being invested in long term projects. The government can just roll over the bonds with a new issue and refrain from returning the capital till it is in a position to do so.", "title": "" }, { "docid": "1f18a170ac1d92e77e5a4792ddf675b6", "text": "Equity can be diluted by future investors, royalties get paid on each sale, companies can continue selling things even when operating at negative profit, back royalties due can be negotiated and at least partially paid in a bankruptcy. From the standpoint of the investor: If it doesn't look like the company will likely have commercial success with a second product, it may be wise to simply take a portion of the product that is actually selling rather than risk your capital on the company's future successes (or failures). From the standpoint of the business owner/entreprenuer, if you believe you have a second product close to the end of the development pipeline it would be wise not to give up equity in the entire enterprise simply to gain required financing to ramp up production and marketing on an existing product. Paying a royalty may be advantageous compared to paying interest on a loan as well (royalty payments are contingent on the occurrence of a sale while interest is due regardless).", "title": "" }, { "docid": "518b52c68869a5db8e185a64c74529c7", "text": "\"The basic theoretical reason for a company to return money to shareholders is that the company doesn't need the money for its own purposes (e.g. investment or working capital). So instead of the company just keeping it in the bank, it hands it back so that shareholders can do what they think fit, e.g. investing it elsewhere. In some cases, particularly \"\"private equity\"\" deals, you see companies actively borrowing money to payout to shareholders, on the grounds that they can do so cheaply enough that it will improve overall shareholder returns. The trade-off with this kind of \"\"leveraging up\"\" is that it usually makes the business more risky and every so often you see it go wrong, e.g. after an economic downturn. It may still be a rational thing to do, but I'd look at that kind of proposal very carefully. In this case I think things are quite different: the company has sold a valuable asset and has spare cash. It's already going to use some of the money to reduce debt so it doesn't seem like the company is becoming more risky. Overall if the management is recommending it, I would support it. As you say, the share consolidation seems like just a technical measure and you might as well also support that. I think they want to make their share price seem stable over time to people who are looking at it casually and won't be aware of the payout - otherwise it'd suddenly drop by 60p and might give the impression the company had some bad news. The plan is to essentially cancel one share worth ~960p for every payout they make on 16 shares - since 16x60p = 960p payout this should leave the share price broadly unchanged.\"", "title": "" }, { "docid": "39d9fb59d7fa1dca7f75c482b5943014", "text": "According to pretty well accepted corporate finance principles. They're mature/maturing companies with large durable noncyclical cash flow streams. Increasing their debt load and distributing the proceeds to shareholders would lower their after tax cost of capital and increase the value of their equity. IMO operating with such under levered balance sheets is nonoptimal. It's subjective though.", "title": "" }, { "docid": "0c7b7bc49b3a18d2c21e9f2ddc23d02c", "text": "A share of stock is a small fraction of the ownership of the company. If you expect the company to eventually be of interest to someone who wants to engineer a merger or takeover, it's worth whatever someone is willing to pay to help make that happen or keep it from happening. Which means it will almost always track the company's value to some degree, because the company itself will buy back shares when it can if they get too cheap, to protect itself from takeover. It may also start paying dividends at a later date. You may also value being able to vote on the company's actions. Including whether it should offer a dividend or reinvest that money in the company. Basically, you would want to own that share -- or not -- for the same reasons you would want to own a piece of that business. Because that's exactly what it is.", "title": "" }, { "docid": "c5bf73ff2c8973bf282521eda8b1c959", "text": "Ask your accountant about convertable preference shares. This would permit you to loan money to your company and then convert the debt to equity, should you so choose, at a later stage. As with the answer by bstpierre, these are all contractual arrangements conducted at arms-length.", "title": "" }, { "docid": "13741d54162a9c82b58e040a60a81243", "text": "There are two main ways you can make money through shares: through dividends and through capital gains. If the company is performing well and increasing profits year after year, its Net Worth will increase, and if the company continues to beat expectations, then over the long term the share price will follow and increase as well. On the other hand, if the company performs poorly, has a lot of debt and is losing money, it may well stop paying dividends. There will be more demand for stocks that perform well than those that perform badly, thus driving the share price of these stocks up even if they don't pay out dividends. There are many market participants that will use different information to make their decisions to buy or sell a particular stock. Some will be long term buy and hold, others will be day traders, and there is everything in between. Some will use fundamentals to make their decisions, others will use charts and technicals, some will use a combination, and others will use completely different information and methods. These different market participants will create demand at various times, thus driving the share price of good companies up over time. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more. That is the main reason why people still buy stocks that pay no dividends. It is my reason for buying them too.", "title": "" }, { "docid": "58bb884158f8aea9bc18842b1ccdee1a", "text": "When he says shitty, he means less likely to actually pay back the money. If I have a company that's not doing well enough, and I have already issued $100,000 in bonds onto this market, and I want to pay back all my bond-holders, maybe I convince a near-bankrupt company to give me $100,000 of bonds in their company for $50,000 in goods. I then repay my bondholders with the $100,000 in shitty bonds. Or maybe I give them $300,000 in goods and they give me $600,000 in their shitty bonds (since thier company is about to fall apart and they know I'll give them a kickback down the line). Then I pay back my 100k bonds with the new shitty bonds, and I go buy $500k worth of raw material for my company and pay for them using almost-bankrupt-company's shitty bonds . Then I have no debt, $500k worth of raw material, the people I used to owe money to (AND my suppliers) now hold a total of $600k in shitty bonds, and then my friend's almost-bankrupt-company DOES go bankrupt.... and my suppliers and old lenders realize the paper I just gave them is worthless.", "title": "" }, { "docid": "74825d07b4fbdcb1d73b49bba074e785", "text": "Ford paid off a tremendous amount of debt prior to reinstating the dividend. While they still have a sizable amount of debt on the balance sheet, they've been able to refinance this debt to a much more affordable point. Their free cash flow + cash on the balance could enable them to pay it off in the very near future (12 - 16 months). Most auto companies have debt on their balance sheet if they choose to offer financial services. Their overall credit rating (if you really think such things are valid) has also improved. Generally speaking, I agree its a poor idea to give money back to shareholders if you have high-interest bearing debt.", "title": "" }, { "docid": "f78be2f8b571feb3fbeefc80e83873a0", "text": "\"After the initial public offering, the company can raise money by selling more stock (equity financing) or selling debt (e.g. borrowing money). If a company's stock price is high, they can raise money with equity financing on more favorable terms. When companies raise money with equity financing, they create new shares and dilute the existing shareholders, so the number of shares outstanding is not fixed. Companies can also return money to shareholders by buying their own equity, and this is called a share repurchase. It's best for companies to repurchase their shared when their stock price is low, but \"\"American companies have a terrible track record of buying their own shares high and selling them low.\"\" The management of a company typically likes a rising stock price, so their stock options are more valuable and they can justify bigger pay packages.\"", "title": "" }, { "docid": "283fc5c844dfed1d7a837cf58c8a42b5", "text": "The main reason, as far as I can see, is that the dividends are payments with which the shareholders may do what they want. Capital that the company has no use for does not make a significant positive return on investment, as you pointed out, yes the company could accrue interest, but that is not going to make the company large sums of cash. While the company may be great at making shoes - maybe even the best in the world - doesn't mean they are good investors. Sure they could dabble at using their capital to invest in other equities, but they don't, because they just want to focus on making shoes. If the dividend goes to the investors, they can do what they wish, be it reinvest in the company, or invest elsewhere. Other companies that may make good use of the capital, and create significant returns on it are one such example. That is the rational answer, beyond that, one of the main reasons is that people like the feeling of receiving dividends - it might not be the answer you are looking for, but many people prefer companies that pay dividends for no rational reason over companies which grow their asset value.", "title": "" }, { "docid": "1fc75f7221b7f6989bcfc65a0566b4e9", "text": "\"If so, then if company A never pays dividends to its shareholders, then what is the point of owning company A's stock? The stock itself can go up in price. This is not necessarily pure speculation either, the company could just reinvest the profits and grow. Since you own part of a company, your share would also increase in value. The company could also decide to start paying dividend. I think one rule of thumb is that growing companies won't pay out, since they reinvest all profit to grow even more, but very large companies like McDonalds or Microsoft who don't really have much room left to grow will pay dividends more. Surely the right to one vote for company A's Board can't be that valuable. Actually, Google for instance neither pays dividend nor do you get to vote. Basically all you get for your money is partial ownership of the company. This still gives you the right to seize Google assets if you go bankrupt, if there's any asset left once the creditors are done (credit gets priority over equity). What is it that I'm missing? What you are missing is that the entire concept of the dividend is an illusion. There's little qualitative difference between a stock that pays dividend, and a stock that doesn't. If you were going to buy the stock, then hold it forever and collect dividend, you could get the same thing with a dividend-less stock by simply waiting for it to gain say 5% value, then sell 4.76% of your stock and call the cash your dividend. \"\"But wait,\"\" you say, \"\"that's not the same - my net worth has decreased!\"\" Guess what, stocks that do pay dividend usually do drop in value right after the pay out, and they drop by about the relative value of the dividend as well. Likewise, you could take a stock that does pay dividend, and make it look exactly like a non-paying stock by simply taking every dividend you get and buying more of the same stock with it. So from this simplistic point of view, it is irrelevant whether the stock itself pays dividend or not. There is always the same decision of whether to cut the goose or let it lay a few more eggs that every shareholder has to make it. Paying a dividend is essentially providing a different default choice, but makes little difference with regards to your choices. There is however more to it than simple return on investment arithmetic: As I said, the alternative to paying dividend is reinvesting profits back into the enterprise. If the company decided to pay out dividend, that means they think all the best investing is done, and they don't really have a particularly good idea for what to do with the extra money. Conversely, not paying is like management telling the shareholders, \"\"no we're not done, we're still building our business!\"\". So it can be a way of judging whether the company is concentrating on generating profit or growing itself. Needless to say the, the market is wild and unpredictable and not everyone obeys such assumptions. Furthermore, as I said, you can effectively overrule the decision by increasing or decreasing your position, regardless of whether they have decided to pay dividend to begin with. Lastly, there may be some subtle differences with regards to things like how the income is taxed and so on. These don't really have much to do with the market itself, but the bureaucracy tacked onto the market.\"", "title": "" }, { "docid": "d4d2473d001e4be93bf68b6de5f0ab77", "text": "One reason a company might choose to pay a dividend is because of the desire of influential stockholders to receive the dividend. In the case of Ford, for example, there are 70 million shares of Class B stock which receive the same dividend per share as do the common stock holders. Even though there are 3.8 billion shares of common stock, the Class B owners (which are Ford family) hold 40% of the voting power and so their desires are given much weight. The Class B owners prefer regular dividends because if enough were to sell their Class B shares, all Class B shares (as a block) would have their voting power drop from 40% to 30%, and with further sales all special voting would be lost and each Class B share would be equivalent to a common share in voting power. Hence the Class B owners, both for themselves and for all of the family members holding Class B, avoid selling shares and prefer receiving dividends.", "title": "" } ]	fiqa
5c6547866b53ffdebad3de0077a7fed8	Can I depreciate a car given to me?	[ { "docid": "6215fdd9bea0719ad1c30f5dc8684f14", "text": "That seems to indicate that you can in fact depreciate a vehicle given to you? Section 1015 discusses the calculation of basis for gifted property, it says nothing about depreciation. Personal property cannot be depreciated for tax purposes unless it is used for business purposes. So unless you drive your car as part of your sole-proprietor business, you cannot depreciate it, be it a gift or a car you purchased yourself. If you can depreciate the car, then sec. 1015 is used to calculate the basis for the depreciation.", "title": "" }, { "docid": "116d04b82e742b0ca8785f85fceddc5f", "text": "Yes, you can depreciate gifts to your business subject to the special rules in § 1011 and Regulation § 1.1011–1 and 1.167(g)–1. It is dual basis property so when you sell the item your gain/loss basis will be different. Adjusted basis of the donor for gain, FMV on the date received for the loss. Minus any depreciation you add, of course, in both cases.", "title": "" } ]	[ { "docid": "85003e0414cf9df7ca49bf330b63a9ab", "text": "\"Short answer: Absolutely not, unless you're comfortable with putting years of your labor into a depreciating asset that will incur hefty maintenance costs over its remaining life. i.e. consider your 10K gone forever once you buy the car, and then some. Some comments on your reasons: \"\"Keeping up with spoiled brats\"\" is a losing proposition, and is a mindset counterproductive to financial independence. I'd encourage you to find a way to not care about how the spoiled brats live their lives. It won't be easier when you're older and you see your peers driving fancy cars and living fantasy lifestyles that you are tempted to emulate. Break the impulse to \"\"keep up\"\" and you'll be in a much better place. A used BMW may not be a piece of junk at first, but once you hit 100K miles, everything will suddenly fall apart and need repair. Been there myself. Still have the car after 7 years, only because very few people want to buy a high-mileage German sport sedan with recurring maintenance issues. See #2. It will be a good drive for a while, then it will own you. This is not so bad when you have a decent amount of savings, but when you have nothing, it's very hard to truly enjoy the car while knowing that any problems not covered by warranty will be financially devastating. Are you prepared to ride the bus for 4 weeks while saving enough income from work to replace a bad clutch? I had to do this, and it's not something I brag about.\"", "title": "" }, { "docid": "2877ea212c9e3863024c98fb6b9f6fa0", "text": "In a perfect world scenario you would get a car 2-5 years old that has very little mileage. One of the long standing archaic rules of the car world is that age trumps mileage. This was a good rule when any idiot could roll back an odometer. Chances are now that if you rolled your odometer back the car was serviced somewhere, had inspection or whatever and it is on a report. If seller was found to do this they could face jail time and obviously now their car is almost worthless. Why do I mention this? Because you can take a look at 2011 cars. Those with 20K miles go for just a little more than those with 100K miles. As an owner you will start incurring heavy maintenance costs around 100K on most newer cars. By buying cars with lower mileage, keeping them for a year or two, and reselling them before they get up in miles, you can stay in that magic area where you can drive a pretty good car for $200-300 a month. Note that this takes work on both the buying and selling side and you often need cash to get these cars (dealers are good about siphoning really good used cars to employees/friends). This is a great strategy for keeping costs down and car value up but obviously a lot of people try to do this and it takes work and you have to be willing to settle sometimes on a car that is fine, but not exactly what you want. As for leasing this really gets into three main components: If you are going to do EVERYTHING at a dealership and you want something new or newish you might as well lease. At least then you can shop around for apples to apples. The problem with buying a new/used car from the dealers in perpetuity isn't the buying process. It is the fact that they will screw you on the trade-in. A car that books for 20K may trade-in for 17K. Even if the dealer says they are giving you 20K, then they make you pay list price for the car. I have many many times negotiated a price of a car and then wife brought in our car separately and I can count on ZERO fingers how many times that the dealership honored both sides of the negotiations. Not only did they not honor them but most refused to talk with us after they found out. With a lease you don't have to worry about losing this money in the negotiations. You might pay a little extra (or not since you can shop around) but after the lease you wash your hands of the car. The one caveat to this is the high-end market. When you are talking your Acura, Mercedes, Lexus... It is probably better to buy and trade in every couple years. You lose too much equity by leasing, where it won't cover the trade-in gap and cost of your money being elsewhere. I have a friend that does this and gets a slightly better car every 2-3 years with same monthly payment. Another factor to consider is the price of a car. If your car will be worth over $15K at time of sale you are going to have a hard time selling it by owner. When amounts get this high people often need financing. Yes they can get personal financing but most people are too lazy to do this. So the number of used car buyers on let's say craigslist are way way fewer as you start getting over $10-12K and I have found $15K to be kind of that magic amount. The pro-buy-used side is easy. Aim for those cars around $12-18K that are out there (and many still under warranty). These owners will have issues finding cash buyers. They will drop prices somewhere between book price and dealer trade-in. In lucky cases where they need cash maybe below dealer trade-in. And remember these sellers aren't dealing with 100s let alone 10 buyers. You drive the car for 3-4 years. Maybe it is $7-10K. But now you will get much much closer to book price because there will be far more buyers in this range.", "title": "" }, { "docid": "1cf24b5d8cfb72fb8f040d7974afa9d5", "text": "I have sold cars before to individuals and always just received cash. I would think as long as the amount is less than $10,000.00 and the buyer is serious they will get there with the cash. Of course there is no possible way to guarantee the cash will not be counterfeit.", "title": "" }, { "docid": "a6c4ae5dec040649e1cfeea63f1c9ee3", "text": "Obviously, the best thing financially would be to continue using your present car, unless it impacts you financially on a regular basis. For example, maintenance or breakdowns impacting your ability to work. An unreliable car also impacts your freedom, for example preventing you from taking road-trips you might want to take or taking up free time with maintenance. Give thought to what it is about your present car that you dislike, both to determine the value you gain from a new car and what's most important to you. Anytime you buy a car, you generally lose thousands of dollars simply driving it off the lot. This is the profit which goes to dealers, salespeople, etc... and not part of the actual value of the car. Cars also depreciate over time, with most of the depreciation happening in the first few years of operation. Many of the newer model cars have additional expenses. (For example, replacement $200 keys or electronic systems that can only be repaired at special facilities.) In addition, if you have insurance (other than the minimum third-party required by law), consider the rate increases and add up the long-term impact of that. Imagine you had invested that money instead at 8% interest over the lifetime of the car. If you don't have insurance, consider what you would do in the unfortunate situation where you were at fault in a collision. Could you afford to lose your investment? Even with safe responsible driving, there is always the potential for road/weather conditions or mechanical failures. If you determine there is sufficient value to be gained from changing vehicles, I would recommend that you buy a vehicle with history from someone privately, doing appropriate background checks and consulting friends or family who know about vehicles and can provide feedback. Do research into the models which interest you ahead of time, read online reviews. Every vehicle generally has known advantages and disadvantages which can take years to discover, so buying an older vehicle gives you the advantage of knowing what to expect. I would say there is probably a reasonable middle ground between using a 1991 vehicle you don't like (that's as old as you are) and getting a relatively new model. Look at what you value in the vehicle, consider all the costs, and find the balance that works best for you. Vehicles from 2000-2005 years are quite affordable and still 10-15 years newer than your car.", "title": "" }, { "docid": "7be13fa59cf116fba48f6e48a8d156b8", "text": "\"First off learn from this: Never cosign again. There are plenty of other \"\"tales of woe\"\" outlined on this site that started and ended similarly. Secondly do what you can to get off of the loan. First I'd go back to her dad and offer him $1000 to take you off the loan and sign over the car. Maybe go up to $3000 if you have that much cash. If that doesn't work go to the bank and offer them half of the loan balance to take you off. You can sign a personal loan for that amount (maybe). Whatever it takes to get off the loan. If she has a new BF offer him the same deal as the dad. Why do you have to do this? Because you owned an asset that was once valued at 13K and is valued at (probably) less than 4K. Given that you have a loan on it the leverage works against you causing you to lose more money. The goal now is to cut your losses and learn from your mistakes. I feel like the goal of your post was to make your ex-gf look bad. It's more important to do some self examination. If she was such a bad person why did you date her? Why did you enter a business transaction with her? I'd recommend seeking counseling on why you make such poor choices and to help you avoid them in the future. Along these lines I'd also examine your goals in life. If your desire is to be a wealthy person, then why would you borrow money to buy a car? Seek to imitate rich people to become rich. Picking the right friends and mates is an important part of this. If you do not have a desire to be a wealthy person what does it matter? Losing 13K over seven months is a small step in the \"\"right\"\" direction.\"", "title": "" }, { "docid": "38ec38eaad11c8b8a112cf547e69262e", "text": "I think you're dancing with the line here, this question is hard to back up without opinions and could really be three different questions. I'm going to push aside the part about quality and reliability, that could be an emotional subject. So from a price standpoint, there's virtually no disagrement that it makes financial sense to buy a used car instead of a new car. The majority of new cars lose the majority of their resale value within the first year or two. If you purchase said car after someone else has used it for the first two years, you just avoided all of that depreciation yourself, and you're still going to be purchasing a perfectly reliable car as long as you are diligent in the buying process.", "title": "" }, { "docid": "c4454d8ffce998d225e20eb9e5771fb5", "text": "It isn't common to lose that much value in 3 years, but it is possible. If you don't take care of small dents, scratches, etc., you can quickly reduce the value far beyond what you might expect looking at graphs. Another big factor is the trim level of the car that you purchase. If you spend $30,000 for the highest trim level of a car, instead of $22,000 for the lowest trim level, the higher trim car could lose 50% of it's value while the lower trim car loses only 35%. There's no way to know why the OP of your linked question had such a large loss, but again, that's not the usual experience. It is definitely a good idea to consider used though.", "title": "" }, { "docid": "c9fbcff82a0a01ff954a2c75351c5c23", "text": "I'm guessing Toronto? Sell the car! Use public transit. Save a ton of money. You can always rent a car for the day or weekend (or use a service like Uber) when necessary at a fraction of the cost of car ownership, and feel good about it!", "title": "" }, { "docid": "c8662bc7a394e496f275a26d98462aee", "text": "Of course you do. You can sell it, wreck it, do whatever you want with it. Of course, some things may void warranty, or whatever, but since you do in fact own the vehicle, it is technically yours to do with as you please. Did you know that you can bore the engine of a car to increase performance? Not saying you should, there are lots of pros and cons there, and it requires an individual with specialized knowledge to do it, who you will have to pay for his service, but it is doable. Should you be upset that this wasn't already done by the manufacturer? Did you know that lots of vehicles are equipped with gps functionality? If your car can display a compass, there is a decent chance that you already have the basics of what you need to set up gps in the vehicle. Should you be upset that your vehicle doesn't have gps? But you can't boil it down that far. Well, I suppose you can, but it makes everything cost more for everyone. When you buy a Tesla, you aren't just buying a car. You are buying into the company. They make updates, fix programming issues, etc. and this requires access. They chose to market their vehicles differently, and so they sell them differently. Alternatively, they could have 2 separate assembly lines, one for the 60 (discontinued) and one for the 75. Now this will equate to both cars costing significantly more than they currently do, but hey, at least you have the right battery, right?", "title": "" }, { "docid": "c3bc0e3ea7c70a92c9fe0bad50a0ad3a", "text": "\"The transfer is easy. Usually you just sign over the title to the new owner, and you're set. Blue book price is a fantasy designed to get you in a car dealership to trade in your car. You won't get \"\"blue book\"\" pricing. I would use NADA \"\"Yellow Book\"\" or Edmunds TMV pricing as a guide. A dealer won't pay you a good price, but will take the car off your hands quickly. Selling a car privately can be a real pain if you don't have the personality for it. You'll get more money and more hassle. Figure out where people do private party sales in your area. In my area, there's an autotrader magazine that dominates the market. Craigslist is going to attract the types of people who frequent craiglist, which is not always a good thing.\"", "title": "" }, { "docid": "ee60151939fc8a15f134d44755e021c1", "text": "$27,000 for a car?! Please, don't do that to yourself! That sounds like a new-car price. If it is, you can kiss $4k-$5k of that price goodbye the moment you drive it off the lot. You'll pay the worst part of the depreciation on that vehicle. You can get a 4-5 year old Corolla (or similar import) for less than half that price, and if you take care of it, you can get easily another 100k miles out of it. Check out Dave Ramsey's video. (It's funny that the car payment he chooses as his example is the same one as yours: $475! ;) ) I don't buy his take on the 12% return on the stock market (which is fantasy in my book) but buying cars outright instead of borrowing or (gasp) leasing, and working your way up the food chain a bit with the bells/whistles/newness of your cars, is the way to go.", "title": "" }, { "docid": "46f295dd712175146f902bb3afbad09b", "text": "\"You are still paying a heavy price for the 'instant gratification' of driving (renting) a brand-new car that you will not own at the end of the terms. It is not a good idea in your case, since this luxury expense sounds like a large amount of money for you. Edited to better answer question The most cost effective solution: Purchase a $2000 car now. Place the $300/mo payment aside for 3 years. Then, go buy a similar car that is 3 years old. You will have almost $10k in cash and probably will need minimal, if any, financing. Same as this answer from Pete: https://money.stackexchange.com/a/63079/40014 Does this plan seem like a reasonable way to proceed, or a big mistake? \"\"Reasonable\"\" is what you must decide. As the first paragraph states, you are paying a large expense to operate the vehicle. Whether you lease or buy, you are still paying this expense, especially from the depreciation on a new vehicle. It does not seem reasonable to pay for this luxury if the cost is significant to you. That said, it will probably not be a 'big mistake' that will destroy your finances, just not the best way to set yourself up for long-term success.\"", "title": "" }, { "docid": "715380f95aaedb38a91ca6a8d595aded", "text": "\"I do not think you are missing much. One thing you have right is low cost cars depreciate almost nothing. One thing you are missing is your satisfaction index. Driving a 200K car for 4 years requires a bit of motivation when your friends are driving new cars. Typically you need a larger goal to keep you focused. That might be saving money, getting out of debt, or obtaining an education. Buying a car from a private party, Craigslist is only one source, can save both parties money as the \"\"middle man\"\" is cut out. If you have the ability to do so, one can save a lot of money by doing your own brakes. The info is up on youtube, and I typically \"\"earn\"\" between 100-300/hour doing this work myself. Most of the time warranties do not pay off. At the core, they are insurance and insurance companies are in the business to make money. If your car is likely to need repairs a policy may be unattainable or very high in price.\"", "title": "" }, { "docid": "3cef4b15724a32fdbb940c05a10463e0", "text": "I don't think there's much you can do. Losses from the sale of personal-use automobiles (used for pleasure, commuting, etc) are not deductible as capital losses. See IRS Tax Topic 409, end of the first paragraph. The expenses you incurred in owning and operating the car (insurance, fuel, maintenance, service plans, etc) are not deductible either. If you used it partly for business, then some of your expenses might be deductible; see IRS Tax Topic 510. This includes depreciation (decline in value), but only according to a standard schedule; you don't generally just get to deduct the difference between your buying and selling price. Also, you'd need to have records to verify your business use. But anyway, these deductions would apply (or not) regardless of whether you sell the car. You don't get your sales tax refunded when you resell the vehicle. That's why it's a sales tax, not a value-added tax. Note, however, that if you do sell it, the sales tax on this new transaction will be the buyer's responsibility, not yours. You do have the option on your federal income tax return to deduct the state sales tax you paid when you bought the car; in fact, you can deduct all the sales taxes you paid in that year. (If you have already filed your taxes for that year, you can go back and amend them.) However, this takes the place of your state income tax deduction for the year; you can't deduct both. See Tax Topic 503. So this is only useful if your sales taxes for that year exceeded the state income tax you paid in that year. Also, note that state taxes are not deductible on your state income tax return. Again, this deduction applies whether you sell the car or not.", "title": "" }, { "docid": "aded402bd51de6c5e624d61882af5c79", "text": "I'm not a lawyer and someone more knowledgeable than I will probably respond to this inquiry. I worked with nonprofits for years however. My suggestion would be that the Board would have a resolution allowing the Director to approve any contract below a certain dollar amount.", "title": "" } ]	fiqa
0ab7e47342fdc148de6636475dada4d7	New Pooled Registered Pension Plan details?	[ { "docid": "2e5228f376c81b614558f5d162247f48", "text": "The general idea of the PRPP is so that small business who cannot afford to offer a plan alone will be able to pool resources with others along with self-employed to create voluntary, defined-contribution pension plans that would be managed by private sector financial institutions. The PRPP concept would offer more options to individuals as well as small and medium-sized businesses - Tax Rules for Pooled Registered Pension Plans You can also find an overview here THE NEW PRPP – A Pension for the Pension-Less", "title": "" } ]	[ { "docid": "c2985abf51365c0748e889c837755967", "text": "I question the reliability of the information you received. Of course, it's possible the former 401(k) provider happened to charge lower expense ratios on its index funds than other available funds and lower the new provider's fees. There are many many many financial institutions and fees are not fixed between them. I think the information you received is simply an assumptive justification for the difference in fees.", "title": "" }, { "docid": "028df917647481b5d4e19cbb323afd32", "text": "\"I would want a clause that says you can't endanger my portfolio, but that would never happen I guess. I've just started what I hope to be a long and successful career and I'm considering opting out of the company pension and managing it myself. Some economics people want to make this an \"\"every man for himself\"\" situation. Right now I pay $400 per month into a pension, and at any point it may not exist. I don't think I'm alone in the idea that I can manage my own portfolio at least as well as that, and my own pension will stay with me no matter what, no matter how many companies I work for.\"", "title": "" }, { "docid": "02bc3370105404e706e80c2703d57fb1", "text": "Are these PFIC rules new? No, PFIC rules are not new, they've been around for a very long time. what would that mean if a person owned a non-US company stock, like a company in Europe that makes chocolate? Is that considered assets that produces passive income? No. But if a person owned a non-US company stock like a company that holds a company that makes chocolate - that would be passive income. this is non-US mutual funds that hold foreign shares, like a mutual fund in India, not a US fund which owns Indian stocks? Non-US fund. For those of you who are tax advisors, is the time length (30 hours) true for filing form 8621? I would suggest not to fill this form on your own. Find a tax adviser specializing on providing services to expats, and have her do this. 30 hours for a person who has never dealt with taxes on this level before is probably not enough to learn all about PFIC, the real number is closer to 300 hours. While ZeroHedge article may be a sales pitch, PFIC rules should frighten you if they apply to your investments. Do not take them lightly, as penalties are steep and if you don't plan ahead you may end up paying way too much taxes than you could have.", "title": "" }, { "docid": "715a11027b9155f44bab80231c88d933", "text": "Pensions in the UK are a real free-for-all. A few years ago, the government introduced stakeholder pensions to try and simplify things, but if anything it's just made things more complex. To give you an idea, everyone has access to a Basic state retirement pension, but there's also SERPS (state earnings related pension scheme) and the State second pension provided by the government. Then in the private sector there are the aforementioned Stakeholder pensions, Self Invested Personal Pensions, Final salary occupational pension schemes and Money purchase occupational pension schemes. For a good summary, take a look at this excellent Times article and for more details, have a look at the Pensions in the United Kingdom Wikipedia page or browse around the Which? retirement section or the moneysavingsexpert pensions pages. The main things to look out for are whether your company offers a defined benefits scheme, or a money purchase scheme where they offer pay additional contributions or offer to match your additional contributions. Either of these are likely to be better than just buying a money purchase scheme pension privately.", "title": "" }, { "docid": "a7c209e1b5df83af93c35d1c0a9e196c", "text": "I'm no expert in this, so this is a legit question. Are 401Ks and pension plans considered HFT or buy & hold? If HFT, would exception rates be beneficial? Or would we want to encourage those groups to reduce frequency as well?", "title": "" }, { "docid": "be08d0c6a4da19a79000124e82331b20", "text": "\"Let's not trade insults. I understand defined benefit plans better than you think. Of course offering a lump-sum payout NOW is better for the company. If you think of the lifetime value of the pension, then yeah, it's \"\"worse\"\" for the recipient... but exactly like lottery winners, this is just a question of my personal discount rate. Maybe I want/need that money now, and value it more now than I would in 10/20/30 years. So it's a question for each individual to decide.\"", "title": "" }, { "docid": "66c2e069c3503182b76c10aac73e22e5", "text": "Thanks to the other answers, I now know what to google for. Frankfurt Stock Exchange: http://en.boerse-frankfurt.de/equities/newissues London Stock Exchange: http://www.londonstockexchange.com/statistics/new-issues-further-issues/new-issues-further-issues.htm", "title": "" }, { "docid": "7d96ffa27caec8d874570b6eff6a9c68", "text": "\"The portfolio described in that post has a blend of small slices of Vanguard sector funds, such as Vanguard Pacific Stock Index (VPACX). And the theory is that rebalancing across them will give you a good risk-return tradeoff. (Caveat: I haven't read the book, only the post you link to.) Similar ETFs are available from Vanguard, iShares, and State Street. If you want to replicate the GFP exactly, pick from them. (If you have questions about how to match specific funds in Australia, just ask another question.) So I think you could match it fairly exactly if you wanted to. However, I think trying to exactly replicate the Gone Fishin Portfolio in Australia would not be a good move for most people, for a few reasons: Brokerage and management fees are generally higher in Australia (smaller market), so dividing your investment across ten different securities, and rebalancing, is going to be somewhat more expensive. If you have a \"\"middle-class-sized\"\" portfolio of somewhere in the tens of thousands to low millions of dollars, you're cutting it into fairly small slices to manually allocate 5% to various sectors. To keep brokerage costs low you probably want to buy each ETF only once every one-two years or so. You also need to keep track of the tax consequences of each of them. If you are earning and spending Australian dollars, and looking at the portfolio in Australian dollars, a lot of those assets are going to move together as the Australian dollar moves, regardless of changes in the underlying assets. So there is effectively less diversification than you would have in the US. The post doesn't mention the GFP's approach to tax. I expect they do consider it, but it's not going to be directly applicable to Australia. If you are more interested in implementing the general approach of GFP rather than the specific details, what I would recommend is: The Vanguard and superannuation diversified funds have a very similar internal split to the GFP with a mix of local, first-world and emerging market shares, bonds, and property trusts. This is pretty much fire-and-forget: contribute every month and they will take care of rebalancing, spreading across asset classes, and tax calculations. By my calculations the cost is very similar, the diversification is very similar, and it's much easier. The only thing they don't generally cover is a precious metals allocation, and if you want that, just put 5% of your money into the ASX:GOLD ETF, or something similar.\"", "title": "" }, { "docid": "18b251aede171ca1805ed860e33c3c99", "text": "I decided to open it with funds b/c the checking account I have is used as a savings, and has been stagnant. Doesn't make any noticeable interest, and I'm not tapping into it for now. Figured why not get some of it moving. Especially since I'm not working right now and am not contributing to retirement otherwise. The old 401(k)s have been sitting still for many years, and aren't that full. Really miss my old deferred compensation fund, that does well even when I'm not contributing!", "title": "" }, { "docid": "9c69713d90bd91bd6142580bd765e223", "text": "I would point this out to the committee or other entity in charge of handling this at work. They do have a fiduciary responsibility for the participant's money and should take anything reasonable seriously. The flip side to this is 95% of participants -- especially participants under 35 or so -- really pay next to no attention to this stuff. We consider it a victory to get people to pony up the matching contributions. Active participation in investment would blow our minds.", "title": "" }, { "docid": "1bed398557ab5aed028262e5a1c0a590", "text": "\"I assume you get your information from somewhere where they don't report the truth. I'm sorry if mentioning Fox News offended you, it was not my intention. But the way the question is phrased suggests that you know nothing about what \"\"pension\"\" means. So let me explain. 403(b) is not a pension account. Pension account is generally a \"\"defined benefit\"\" account, whereas 403(b)/401(k) and similar - are \"\"defined contribution\"\" accounts. The difference is significant: for pensions, the employer committed on certain amount to be paid out at retirement (the defined benefit) regardless of how much the employee/employer contributed or how well the account performed. This makes such an arrangement a liability. An obligation to pay. In other words - debt. Defined contribution on the other hand doesn't create such a liability, since the employer is only committed for the match, which is paid currently. What happens to your account after the employer deposited the defined contribution (the match) - is your problem. You manage it to the best of your abilities and whatever you have there when you retire - is yours, the employer doesn't owe you anything. Here's the problem with pensions: many employers promised the defined benefit, but didn't do anything about actually having money to pay. As mentioned, such a pension is essentially a debt, and the retiree is a debt holder. What happens when employer cannot pay its debts? Employer goes bankrupt. And when bankrupt - debtors are paid only part of what they were owed, and that includes the retirees. There's no-one raiding pensions. No-one goes to the bank with a gun and demands \"\"give me the pension money\"\". What happened was that the employers just didn't fund the pensions. They promised to pay - but didn't set aside any money, or set aside not enough. Instead, they spent it on something else, and when the time came that the retirees wanted their money - they didn't have any. That's what happened in Detroit, and in many other places. 403(b) is in fact the solution to this problem. Instead of defined benefit - the employers commit on defined contribution, and after that - it's your problem, not theirs, to have enough when you're retired.\"", "title": "" }, { "docid": "5a860f3f8edddf97f00daf44f42cd1d3", "text": "\"Note - this is a complicated topic. I've read the rules multiple times and I'm still not sure I understand them perfectly. So please take this with a pinch of salt and read the rules for yourself. The time(s) at which a test is done against the LTA are known as a \"\"Benefit Crystallization Event\"\" (BCE). There are 13 of these (!) - they're numbered 1-9 with the addition of some extras numbered 5A-D. However, the most important ones for those with defined contribution pensions are: Broadly, the idea is that a BCE occurs when you start taking money out of your pension, and when you reach age 75. Each time one happens, the amount you are taking out (\"\"crystallizing\"\") gets compared against the LTA and a certain percentage of your LTA gets designated as being used. Crystallising doesn't necessarily mean you actually receive the money immediately, just that some of your money is switched into a mode where you can start receiving it in different ways. The rules are designed to avoid double counting, so broadly anything that was taken off your LTA won't be taken off a second time. The cumulative use of your LTA is tracked as a percentage rather than an absolute amount, to take account of any changes in the LTA between the different times you crystallise money. For example if you crystallise £100K when the LTA is £1mn, that's 10% of your LTA gone. If later on the LTA has risen to £1.1mn and you take out £110K, that's another 10%. Once you hit 100%, you start paying a LTA charge on any excess. The really simple path here is if you just get an annuity with your entire pot, before hitting age 75 (and you don't make any further pension contributions after). Then only BCE 4 applies: your pension pot, all of which is being used to buy the annuity, is compared with the LTA. After this point your entire pension pot is considered to be crystallized, so no more BCEs will apply - the tests at age 75 only apply if you still have money that you haven't taken out or used to buy an annuity. The annuity payments themselves will be subject to income tax at your normal rate at the time you receive them, i.e. 0%, 20%, 40% or 45% depending on how much other income you have. In reality most people would want to take 25% of their pot as a lump sum at the same time as buying an annuity, given that it's tax-free if you're under the LTA. At this point BCE 6 applies in addition to BCE 4, but again the overall effect of the test is pretty simple, look at the total pension pot (lump sum + cost of annuity), and if it's under the LTA you're fine. Again, at this point no more BCEs will apply as all the money is considered to have been fully distributed. If you only use part of the money for an annuity/lump sum, then only that part of the money is compared against the LTA, and the rest stays in your pension and will be compared later. The 25% limit for a tax-free lump sum applies to the total you are taking out at that point: if you have £200K and are taking out £100K, you can take out £25K as a tax-free lump sum and use £75K for the annuity. The other £100K stays in your pension. Many people see annuity rates as very low and will want to take on more risk (and reward) by using \"\"Drawdown\"\" for at least part of their pension. Essentially, you can designate part of your pension for drawdown, and at that point BCE 1 applies to the money you designate. Once designated, you can start drawing the money out as income, which will be taxed at your normal income tax rate at the time you receive it. Again, you can take 25% as a lump sum at this point which will be subject to BCE 6. There's also an alternative route where you put everything into \"\"flexi-access drawdown\"\" without taking any lump sum immediately, and then as you actually withdraw income, 25% is tax-free and the rest is taxed as income. The overall effect is the same, but it gives you more control over when you get the tax-free bit. However, because with drawdown you can actually leave the money in your pension and growing tax-free, there's a further test against the LTA at age 75 under BCE 5A. To avoid double-counting (\"\"prevention of overlap\"\"), the amount left in the drawdown fund at that point is reduced by whatever was previously tested against BCE 1. So if you put £150K into drawdown initially, and it's grown to £200K by age 75, then another £50K will crystallise under BCE 5A. I think that if you put £150K into drawdown initially and it grows by £50K, but you take that out as income so that only £150K (or less) remains at age 75, then the amount crystallising under BCE 5A is nil. Also, when money is in drawdown, you can choose to use it to buy an annuity. BCE 4 is applied at this point (if before age 75), but as with BCE 5A, this is reduced by anything that was previously crystallised under BCE 1. If you only use some of it to buy an annuity, the reduction is pro-rataed, e.g. if you started out with £150K moved into drawdown, and later it has grown to £200K and you use £100K to buy an annuity, then the reduction is £75K so £25K is considered to have crystallised under BCE 4. Once you reach age 75, as well as any money that's still in drawdown, anything you haven't yet crystallised at all gets tested against the LTA under BCE 5B. Broadly, once you go over the LTA, the charges are simple: There's never any explanation given for these two rates, but I think it's all based on trying to at least cancel out the benefit you got from using your pension, on the assumption that: So with the 25% charge + 20% income tax, if you take out £100, you'll end up with £75 gross income, so £60 net income - just the same as if you'd originally paid 40% tax. (This ignores the effect of investment growth, but if you would have saved the £60 in an ISA, the end result is the same: if you had growth of say 50% over the time the money was in your pension, it'll be the same effect if you had £100 growing to £150 and now received 60% of it, or if you had £60 growing to £90 untaxed in an ISA.) The 55% lump sum charge is in case you are paying 40% tax when you take it out, to make sure that it's not a more attractive option than the 25%+income tax: if you have £100, either you get £45 tax free via a lump sum, or you get £75 gross and hence £45 net. I haven't covered lots of cases here: defined benefit pensions. Roughly, when you start receiving the pension, 20x the initial income from the pension is deemed to crystallise under BCE 2 and any lump sum you receive crystallises under BCE 6. In the former case, you could end up having to pay the LTA charge with money you haven't actually got yet, and you can ask the pension administrator to instead reduce your pension to pay it. However, there are lots of special cases for defined benefit pensions, mostly for historical reasons, so you should make sure you check with your pension administrator about this. if you die before age 75, at which point the LTA test is applied via either BCE 5C/5D, or BCE 7. After paying the LTA charge if any, your dependents or whoever else you leave it to gets the remainder tax-free. transferring overseas (BCE 8). \"\"scheme pensions\"\" under BCE 2 and BCE 3 (I think these are relatively uncommon) some corner cases covered by regulations (BCE 9)\"", "title": "" }, { "docid": "22a58bb6f1803e7765a19450e6a9a536", "text": "\"Well the People's Trust's IPO prospectus is now (2017-09-08) available for all to read (or there's a smaller \"\"information leaflet\"\"). (May need some disclaimers to be clicked to get access). Both have a \"\"highlights\"\" bullet-point list: Coverage here has a comment thread with some responses by the founder attempting to answer the obvious objection that there's other multi-manager trusts on a discount (e.g Alliance Trust on ~ -5.5%), so why would you buy this one on a (very small) premium? (Update: There's also another recent analysis here.) Personally, I'm thinking the answer to the original question \"\"How is The People's Trust not just another Investment Trust?\"\" is pretty much: \"\"it's just another Investment Trust\"\" (albeit one with its own particular quirks and goals). But good luck to them.\"", "title": "" }, { "docid": "32c2716abf18c9873139c68bc1960ebb", "text": "Looks like the result got decided recently, with a little uncertainty about exactly how much is the total allowed claims: http://www.wilmingtontrust.com/gmbondholders/plan_disclosure.html http://www.wilmingtontrust.com/gmbondholders/pdf/GUC_Trust_Agreement.pdf They give the following example: Accordingly, pursuant to Section 5.3 of the GUC Trust Agreement, a holder of a Disputed Claim in the Amount of $2,000,000 that was Allowed in the amount of $1,000,000 (A) as of the end of the first calendar quarter would receive: Corresponding to the Distribution to the Holders of Initial Allowed Claims: Corresponding to the First Quarter Distribution to Holders of Units: Total:", "title": "" }, { "docid": "189074bc66e38dfa800eb176139e72b2", "text": "\"I've been down the consolidation route too (of a handful of DC pensions; the DB ones I've not touched, and you would indeed need advice to move those around). What you should be comparing against is: what's the cheapest possible thing you could be doing? Monevators' online platform list will give you an idea of SIPP costs (if your pot is big enough and you're a buy-and-hold person, ATS' flat-fee model means costs can become arbitrarily close to zero percent), and if you're happy to be invested in something like Vanguard Lifestrategy, Target Retirement or vanilla index trackers then charges on those will be something like 0.1%-0.4%. Savings of 0.5-1.0% per year add up over pension saving timescales, but only you can decide whether whatever extra the adviser is offering vs. a more DIY approach is worth it for you. Are you absolutely sure that 0.75% pa fee isn't on top of whatever charges are built into the funds he'll invest you in? For the £1000 fee, advisers claim to have high costs per customer because of \"\"regulatory burdens\"\"; this is why there's talk of an \"\"advice gap\"\" these days: if you only have a small sum to invest, the fixed costs of advice become intolerable. IMHO, nutmeg are still quite expensive for what they offer too (although still probably cheaper than any \"\"advised\"\" route).\"", "title": "" } ]	fiqa
832a5437fcfe45f9a8f8d869ce8ca858	Whats the difference between day trading and flipping and their tax implications?	[ { "docid": "2b4f379d4a0247140662c5e4e57844b8", "text": "Flipping usually refers to real-estate transaction: you buy a property, improve/renovate/rehabilitate it and resell it quickly. The distinction between flipper and investor is similar to the distinction between trader and investor, even though the tax code doesn't explicitly refer to house flipping. Gains on house flipping can be considered as active business gain or passive activity income, which are treated differently: passive income goes on Schedule E and Schedule D, active income goes on Schedule C. The distinction between passive and active is based on the characteristics of the activity (hours you spent on it, among other things). Trading income can similarly be considered as either passive (Schedule D/E treatment) or active (Schedule C treatment). Here's what the IRS has to say about traders: Special rules apply if you are a trader in securities, in the business of buying and selling securities for your own account. This is considered a business, even though you do not maintain an inventory and do not have customers. To be engaged in business as a trader in securities, you must meet all of the following conditions: The following facts and circumstances should be considered in determining if your activity is a securities trading business: If the nature of your trading activities does not qualify as a business, you are considered an investor... Investor, in this context, means passive income treatment (Schedule D/E). However, even if your income is considered active (Schedule C), stock sale proceeds are not subject to the self-employment tax. As you can see, there's no specific definition, but the facts and circumstances matter. You may be considered a trader by the IRS, or you may not. You may want to be considered a trader (for example to be able to make a mark-to-market election), or you may not. You should talk to a professional tax adviser (EA/CPA licensed in your State) for more details and suggestions.", "title": "" } ]	[ { "docid": "4f0bf4cadc7fbe8eae1c85a73b5ad41e", "text": "As mentioned by Dilip, you need to provide more details. In general for transacting on stocks; Long Term: If you hold the stock for more than one year then its long term and not taxable. There is a STT [Securities Transaction Tax] that is already deducted/paid during buying and selling of a stock. Short Term: If you hold the stock for less than one year, it's short term gain. This can be adjusted against the short term loss for the financial year. The tax rate is 10%. Day Trading: Is same as short term from tax point of view. Unless you are doing it as a full time business. If you have purchased multiple quantities of same stock in different quantities and time, then when you selling you have to arrive at profit or loss on FIFO basis, ie First in First Out", "title": "" }, { "docid": "c494d981cd42f26b230f546bd8aa58c1", "text": "If you buy puts, there are no guaranteed proceeds though. If you short against the box, you've got immediate proceeds with a nice capital loss if it doesn't work out. Conversely, you could write a covered call, take the contract proceeds, and write off the long position losses. Nobody ever factors tax consequences into the equation here.", "title": "" }, { "docid": "91e13572f4af39783a97352f0aec9248", "text": "The difference is ordinary income. If the price drops and you sell for exactly what you paid, you have an income of D and a capital loss of D which usually cancel each other, but not always. For example, if you already have over $3000 in losses, this loss won't help you, it will carry forward. The above changes a bit if you hold the stock for 2 years after the beginning of the purchase period. If sold between your purchase price and fair market the day you bought, the gain is only the difference, no gain to fair market + loss. Pretty convoluted. Your company should have provided you with a brief FAQ / Q&A to explain this. My friends at Fairmark have an article that explains the ESPP process clearly, Tax Reporting for Qualifying Dispositions of ESPP Shares.", "title": "" }, { "docid": "6027594444879a9496df9840f35f9a55", "text": "if you open spreadbetting accounts and prove to the inland revenue that trading profits are not your main income, you will not be liable for any tax on your gains. Holding a property in the uk which is point of call for any held bank accounts needs to be verifiable though. This is only an issue if accounts are larger than £400k. seems anything smaller doesnt get the sniffer dogs attention at the IR dept.", "title": "" }, { "docid": "eb0b1106505cc2f5eb4c597f84834d88", "text": "With a short position you make your money (profit) when you buy the stocks back to close the position at a lower price than what you bought them at. As short selling is classed as speculation and not investing and you at no time own any actual assets, you cannot donate any short possition to charity. If you did want to avoid paying tax on the profits you could donate the proceeds of the profits after closing the position and thus get a tax deduction equal to the profits you made. But that raises a new and more important question, why are you trading in the first place if you are afraid to make profits in case you have to pay tax on those profits?", "title": "" }, { "docid": "4b7cd157197402aa1a8b2a3dc933137c", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"", "title": "" }, { "docid": "d1e92a6e17ba78551b7fd1703fae444c", "text": "\"Are these all of the taxes or is there any additional taxes over these? Turn-over tax is not for retail investors. Other taxes are paid by the broker as part of transaction and one need not worry too much about it. Is there any \"\"Income tax\"\" to be paid for shares bought/holding shares? No for just buying and holding. However if you buy and sell; there would be a capital gain or loss. In stocks, if you hold a security for less than 1 year and sell it; it is classified as short term capital gain and taxes at special rate of 15%. The loss can be adjusted against any other short term gain. If held for more than year it is long term capital gain. For stock market, the tax is zero, you can't adjust long term losses in stock markets. Will the money received from selling shares fall under \"\"Taxable money for FY Income tax\"\"? Only the gain [or loss] will be tread as income not the complete sale value. To calculate gain, one need to arrive a purchase price which is price of stock + Brokerage + STT + all other taxes. Similar the sale price will be Sales of stock - Brokerage - STT - all other taxes. The difference is the gain. Will the \"\"Dividend/Bonus/Buy-back\"\" money fall under taxable category? Dividend is tax free to individual as the company has already paid dividend distribution tax. Bonus is tax free event as it does not create any additional value. Buy-Back is treated as sale of shares if you have participated. Will the share-holder pay \"\"Dividend Distribution Tax\"\"? Paid by the company. What is \"\"Capital Gains\"\"? Profit or loss of buying and selling a particular security.\"", "title": "" }, { "docid": "5db324f25d180b02a9e3523efe4ef4a4", "text": "I would say it's all relative. Take the following two scenarios: If you were facing these options, would you chose #2 just because you pay a lower tax rate, even though you make less money? These numbers are of course fictional, but the point I'm trying to make is that everyone will seek the method that allows them to make the most money. If they have to pay a higher tax rate, so be it. One other thought: daytraders will have higher expenses, which are deductible.", "title": "" }, { "docid": "a7e82acf77e5091b7bcac9655fad7156", "text": "Often times the commission fees add up a lot. Many times the mundane fluctuations in the stock market on a day to day basis are just white noise, whereas long term investing generally lets you appreciate value based on the market reactions to actual earnings of the company or basket of companies. Day trading often involves leverage as well.", "title": "" }, { "docid": "64b9a133df2ccc0d6dd74246e71482b3", "text": "So, my question is what is the limit below which I don't have to pay taxes while trading. I just invested $10. Do I have to pay taxes for this too? what are the slabs? Any income is subject to tax. That said, investing $10 will probably not generate much of income, even at the discount brokers most of it will be wasted on commissions... I am also having an assistantship. So is holding two sources of income legitimate? Thanks You can have as many sources of income as you want. Working is what is restricted when you're on a student visa. As long as you don't open a business as a day trader or start working for someone trading stocks - you're fine.", "title": "" }, { "docid": "8e37a0bedf04922bb9fa43fd2c0e00b4", "text": "The tax is only payable on the gain you make i.e the difference between the price you paid and the price you sold at. In your cse no tax is payable if you sell at the same price you bought at", "title": "" }, { "docid": "2efee2c5fd498c4cbb9139d8a8d79065", "text": "\"Oddly enough, in the USA, there are enough cost and tax savings between buy-and-hold of a static portfolio and buying into a fund that a few brokerages have sprung up around the concept, such as FolioFN, to make it easier for small investors to manage numerous small holdings via fractional shares and no commission window trades. A static buy-and-hold portfolio of stocks can be had for a few dollars per trade. Buying into a fund involves various annual and one time fees that are quoted as percentages of the investment. Even 1-2% can be a lot, especially if it is every year. Typically, a US mutual fund must send out a 1099 tax form to each investor, stating that investors share of the dividends and capital gains for each year. The true impact of this is not obvious until you get a tax bill for gains that you did not enjoy, which can happen when you buy into a fund late in the year that has realized capital gains. What fund investors sometimes fail to appreciate is that they are taxed both on their own holding period of fund shares and the fund's capital gains distributions determined by the fund's holding period of its investments. For example, if ABC tech fund bought Google stock several years ago for $100/share, and sold it for $500/share in the same year you bought into the ABC fund, then you will receive a \"\"capital gains distribution\"\" on your 1099 that will include some dollar amount, which is considered your share of that long-term profit for tax purposes. The amount is not customized for your holding period, capital gains are distributed pro-rata among all current fund shareholders as of the ex-distribution date. Morningstar tracks this as Potential Capital Gains Exposure and so there is a way to check this possibility before investing. Funds who have unsold losers in their portfolio are also affected by these same rules, have been called \"\"free rides\"\" because those funds, if they find some winners, will have losers that they can sell simultaneously with the winners to remain tax neutral. See \"\"On the Lookout for Tax Traps and Free Riders\"\", Morningstar, pdf In contrast, buying-and-holding a portfolio does not attract any capital gains taxes until the stocks in the portfolio are sold at a profit. A fund often is actively managed. That is, experts will alter the portfolio from time to time or advise the fund to buy or sell particular investments. Note however, that even the experts are required to tell you that \"\"past performance is no guarantee of future results.\"\"\"", "title": "" }, { "docid": "6e364e5a4e47e1d529db4f0601030e31", "text": "I don't understand the logic in the other answer, and I think it doesn't make sense, so here is my take: You pay taxes on income, not on sales price. So if you put X $ of your own money in the account and it becomes X + Y $ in the future, at the moment of liquidation, you will own taxes on the Y $. Never on the X $, as it was your own (already taxed) money to begin with. The difference between long-term and short-term gains just influences the tax rate on Y. If you donate the gain alone (the Y $) to charity, you can deduct Y from your tax base. So adding Y to your tax base and then deducting Y again obviously leaves your tax base at the old value, so you pay no extra taxes. Which seems logical, as you didn't make any money in the process. Aside from extreme cases where the deductible gain is too large a percentage from your income or negative, I don't see why this would ever be different. So you can take your original 100 $ back out and donate all gains, and be fine. Note that potential losses are seen different, as the IRA regulations are not symmetric.", "title": "" }, { "docid": "2344c287634cb6e22a4b35f37aee3997", "text": "Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account. When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college. No 1031 exchange exists for stock.", "title": "" }, { "docid": "a2dde5ad88962880589d29a60a1fa5ae", "text": "Buying a put is hedging. You won't lose as much if the market goes down, but you'll still lose capital: lower value of your long positions. Buying an ultrashort like QID is safer than shorting a stock because you don't have the unlimited losses you could have when you short a stock. It is volatile. It's not a whole lot different than buying a put; it uses futures and swaps to give the opposing behavior to the underlying index. Some places indicate that the tax consequences could be severe. It is also a hedge if you don't sell your long positions. QID opposes the NASDAQ 100 which is tech-heavy so bear (!) that in mind. Selling your long positions gets you out of equities completely. You'll be responsible for taxes on capital gains. It gets your money off of the table, as opposed to playing side bets or buying insurance. (Sorry for the gambling analogy but that's a bit how I feel with stock indices now :) ).", "title": "" } ]	fiqa
f6dc8fab7341fa2c359e43b55bea5d2f	Getting Cash from Credit Card without Fees	[ { "docid": "22338a43b9006dea9a3662a5d65947de", "text": "Nope. Or at least, if it were possible the company offering such a credit card would quickly go out of business. Credit card companies make money off of fees from the merchants the user is buying from and from the users themselves. If they charged no fees to the user on cash advances and, in fact, gave a 3% back on cash advances, then it would be possible for a user to: The company would lose money until they stopped the loophole or went out of business.", "title": "" }, { "docid": "6c6e91792fbbfd98238e6a5d560df128", "text": "\"While I think this is generally inadvisable, there are sites and communities dedicated to \"\"points churning\"\" credit card reward programs. In general, no there is no easy way to get cash from a credit card, and receive the spending rewards, and not pay fees well in excess of your rewards value. However, there are people who figure out ways to do this kind of thing. Like buying prepaid Visa cards $500 at a time from drug stores on a 5% bonus rewards month. Or buying rolls of $1 coins from the US treasury with free shipping. The issue is the source of the fees. When you spend money on your card the merchant pays a fee. When you get cash from an ATM not only is there no merchant remitting a fee there is an ATM operator and a network both charging fees.\"", "title": "" }, { "docid": "f0dd41d0517af2ceda26e49c4584a138", "text": "You said: Use a credit card (to get my 3% Cash back) to withdraw cash ... Then you said: Is there any way to do this without paying a cash advance fee (or any fees in general)? Right there you have stated the inconsistency. Withdrawing cash using a credit card is a cash advance. You may or may not be charged a fee for doing the cash advance, but no credit card will offer you cash back on a cash advance, so you can't earn your 3% by using cash advances. As others have mentioned, you can sometimes get close by using the card to purchase things that are almost like cash, such as gift cards. But you have to make a purchase.", "title": "" }, { "docid": "cf440d0839f6e7b0b0d43587d7dcdd8c", "text": "This was actually (sort of) possible a few years ago. The US Mint, trying to encourage use of dollar coins, would sell the coins to customers for face value and no shipping. Many people did exactly what you are proposing: bought hundreds/thousands of dollars worth of coins with credit cards, reaped the rewards, deposited the coins in the bank, and paid off the credit cards. See here, for example. Yeah, they don't have that program any more. Of course, this sort of behavior was completely predictable and painfully obvious to the credit card companies, who, as far as I know, never let users net rewards on cash advances. They're trying to make money after all, unlike the Mint, which, uh, well...", "title": "" } ]	[ { "docid": "336b97b24895254218c39d45f15f8b28", "text": "\"in theory, yes. in practice, no. largely because merchants pay a fee to process credit card transactions which normally exceeds the cash back you can get. i tried this with square, since their vendor fee was 2.75%, and i got 5% back on restaurants. however, even though i registered with square as a restaurant, transactions were categorized as \"\"other services\"\" or something, so i only got 1% back and lost 1.75% net. moreover, if you did find a card/processor combination that left you with a net gain, they would eventually catch on and charge you with some sort of fraud. i wasn't worried about it with the square experiment because it was only 1$, but if you tried to do this with large sums, a human would catch you. and if it was enough money to matter, there would be a lawsuit. if you were really unlucky, you might get charged with some terrorism crap like \"\"structuring\"\" deposits.\"", "title": "" }, { "docid": "a3debd2edac6a100583eaea8224464d7", "text": "\"I'm a bit loathe to offer this response, but some pre-paid credit card vendors offer \"\"direct deposit\"\" to the card. Not surprisingly, Wal-Mart is one of them -- the very first \"\"how to reload\"\" option is direct deposit from an employer: https://www.walmartmoneycard.com/walmart/account/learn-how I think this sort of service encourages bad money habits. People shouldn't have to pay fees to get their own money.\"", "title": "" }, { "docid": "49b743482fb6c3ce7ded4219b2149524", "text": "Three things prevent you from doing this: Credit cards generally don't accept other credit cards as payment. You could do this with a cash advance or balance transfer, but Cash advances and balance transfers usually have fees associated with them, negating any reward you might earn. Your card might have a no-fee balance transfer promotion going, but Cash advances and balance transfers generally aren't eligible for rewards.", "title": "" }, { "docid": "9fe0271bdb83db485bf754c0f2b12df3", "text": "You can generally withdraw cash from an ATM with a major credit card. There are exceptions of course, but generally yes. It's a terrible deal unless you are in the most dire of straits. Avoid it. Credit card companies make money on purchases at a store from the store. If you pay late, they make money from you. For an ATM, they make money by charging you a fee and then charging interest on day one with no grace period. This is a very high interest rate short term loan. You will also be charged a fee by the ATM itself - and you will pay interest on that fee!", "title": "" }, { "docid": "ee44afaaeb77f2fed647ae241e8bd562", "text": "I suggest opening a Credit Card that doesn't charge Foreign currency conversion fees. Here is the list of cards without such a fee, Bankrate's Foreign transaction fee credit card chart", "title": "" }, { "docid": "a72d3d0c6af58a24af1bad27a75d7846", "text": "If it's always the same person, you could open a joint account. Then fees are avoided altogether. How fast the funds are available depends on what you deposit. Cash is immediate.", "title": "" }, { "docid": "1757b028d75e69e0e93402a12b746d1b", "text": "One way you can accomplish this is on a cruise ship. Most cruise ships have casinos, and most will allow you to sign out chips at the casino cage. You can then exchange the chips for cash. The chips that were signed for are resolved as room charges. Those room charges can be charged to a CC. Those signed for chips are rolled into the total room charges and are thus not treated as a cash advance. The cost of the cruise not with standing, you could earn money in that form. Step off the boat, deposit cash in the bank, and send a check to the CC company. All that being said, it is an cheap and safe way to get cash while you are traveling in that method.", "title": "" }, { "docid": "e4502fb18066fc053cd52c0aca1090f1", "text": "You don't need credit cards but there are few benefits, if you pay them off right away I assume you do have a debit card, since sometimes (like unattended gas stations or shopping on the web) cash is not accepted.", "title": "" }, { "docid": "ebb874728ea5c83f7c47d5f71cbed3ed", "text": "I can't speak for India, but for US travelers abroad, using an ATM card that reimburses transaction fees is usually the most convenient and cheapest way to obtain foreign cash. There are several banks and brokerages that offer these types of ATM cards in the US. The exchange rate is competitive and because the fees are reimbursed it's cheaper and easy than going to a bank or kiosk to exchange currencies. I don't know if you can get accounts/cards like this in India that reimburse ATM fees. For purchases, using a credit card is fine, too. Some cards charge a foreign transaction fee of ~1%, some don't. The credit card I use most of the time does charge a 1% transaction fee, but I get 2% back in rewards so I still don't mind using it when traveling.", "title": "" }, { "docid": "104ae8a9ec8b6b78961094e0cd95e102", "text": "If you had a CC issuer that allowed you to do bill-pay this way, I suspect the payment would be considered a cash advance that will trigger a fee and a pretty egregious cash advance specific interest rate. It's not normal for a credit payment portal to accept a credit card as payment. If you were able to do this as a balance transfer, again there would be fees to transfer the balance and you would not earn any rewards from the transferred balance. I think it's important to note that cash back benefits are effectively paid by merchant fees. You make a $100 charge, the merchant pays about $2.50 in transaction fee, you're credited with about $1 of cash back (or points or whatever). Absent a merchant transaction and the associated fee there's no pot of money from which to apply cash back rewards.", "title": "" }, { "docid": "5ac9a4cfd8b76a5ee60eb07001219f44", "text": "\"A few ideas: If you can find cards that don't have fees, you could use re-loadable debit/gift cards as your \"\"envelopes\"\". You can write the purpose for each card on its face. Carrying around more than a few cards will get unwieldy fast -- how many categories do you need? Use the rewards card strategy that was recommended to you. Put all of your spending on this. Carry a slip of paper in your wallet for each of your categories of spending. When you charge against a category, punch/mark/tear off a piece of the paper according to some scheme that will allow you to track the amount. You don't have to carry the envelopes around with you all the time. You wouldn't carry around the grocery envelope all the time -- unless you often just randomly decide to go grocery shopping while you're out and about. When you are going out and know you need to have cash for a certain purpose, pull some money from your envelope, put a paper clip around it with maybe a slip of paper, and put it into your wallet. You could carry around a few different categories of money this way without too much hassle. This requires planning your spending for the day. (The best way to avoid spending money is to not have it.)\"", "title": "" }, { "docid": "1f75b393e72ec9c1debbd50e4cafb218", "text": "All the fees are added to the amount you actually spend, but they only occur when you do these kind of transactions. They do not happen for any other reason. If you transfer a balance from another credit card this fee is added to your balance. Since this is your first credit card you don't have to transfer any balance. This site says that this is a special type of check, linked to your credit card account, not to your checking account. If you write this type of check to a merchant the additional fees will apply. If you use your credit card at an ATM this fee will be applied on top of the money you withdraw. Usually it is a percentage of the amount you withdraw. According to this site, a cash equivalent is something like casino chips which can be easily converted back into money without any loss. If you use your credit card in a different currency, for example Euro but your credit cards currency is Dollar. Usually a percentage of the amount (~3-5%). If you withdraw money from a foreign currency ATM they add usually a fixed amount plus a percentage or any combination of this.", "title": "" }, { "docid": "90db26b89e8f2d04c74b31b6bfdaecf1", "text": "\"When you buy something with your credit card, the store pays a fee to the credit card company, typically a base fee of 15 to 50 cents plus 2 to 3% of the purchase. At least, that's what it was a few years back when I had a tiny business and I wanted to accept credit cards. Big chain stores pay less because they are \"\"buying in bulk\"\" and have negotiating power. Just because you aren't paying interest doesn't mean the credit card company isn't making money off of you. In fact if you pay your monthly bill promptly, they're probably making MORE off of you, because they're collecting 2 or 3% for a month or less, instead of the 1 to 2% per month that they can charge in interest. The only situation I know where you can get money from a credit card company for free is when they offer \"\"convenience checks\"\" or a balance transfer with no up-front fee. I get such an offer every now and then. I presume the credit card company does that for the same reason that stores give out free samples: they hope that if you try the card, you'll continue using it. To them, it's a marketing cost, no different than the cost of putting an ad on television.\"", "title": "" }, { "docid": "bc875b9c0d3f029ba3a99bb6c6a2d0be", "text": "I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements.", "title": "" }, { "docid": "b7e7b0b6b6cd92d8e2039afbaf9c15ed", "text": "Suppose you're writing a put with a strike price of 80. Say the share's(underlying asset) price goes down to 70. So the holder of the put will exercise the option. Ie he has a 'right to sell' a share worth 70 for rs 80. Whereas a put option writer has an 'obligation to buy' at rs 80 a share trading at rs 70. Always think from the perspective of the holder. If the holder exercises the option, the writer will suffer a loss. Maximum loss he suffers will be the break even FSP, which is Strike price reduced by the premium paid.. If he doesn't exercise the option the writer will make a profit, which can maximum be the put premium received.", "title": "" } ]	fiqa
167fe1e614f07ad9b20c082f950fd8c0	Dormant company, never paid taxes, never traded in UK - should I have notified the HMRC?	[ { "docid": "d294dd6438dfaa3a54557e2c33f1d5ae", "text": "You don't have to register for corporation tax until you start doing business: After you’ve registered your company with Companies House, you’ll need to register it for Corporation Tax. You’ll need to do this within 3 months of starting to do business. Since you haven't needed to do that yet, there also shouldn't be any need to tell HMRC you've stopped trading. So it should just be a question of telling Companies House - I guess it's possible they'll first want you to provide the missing accounts.", "title": "" } ]	[ { "docid": "8400613fe1604536e0f9484699465382", "text": "You should check this with a tax accountant or tax preparation expert, but I encountered a similar situation in Canada. Your ISA income does count as income in a foreign country, and it is not tax exempt (the tax exemption is only because the British government specifically says so). You would need to declare the income to the foreign government who would almost certainly charge you tax on it. There are a couple of reasons why you should probably keep the funds in the ISA, especially if you are looking to return. First contribution limits are per year, so if you took the money out now you would have to use future contribution room to put it back. Second almost all UK savings accounts deduct tax at source, and its frankly a pain to get it back. Leaving the money in an ISA saves you that hassle, or the equal hassle of transferring it to an offshore account.", "title": "" }, { "docid": "285656fee715b39a89d1eaadd137f3b2", "text": "The LLC (not you) is probably in debt to the California FTB. Any LLC registered in California must pay at least $800 a year, until it is officially dissolved (i.e.: notice of cancellation/dissolution properly filed with the California Secretary of State). The FTB may come after members (including you) personally, if it can prove that the failure to pay was due to your negligence. Talk to a CA-licensed EA/CPA about how to resolve this. Otherwise, at least from what you've described, there were no other taxable events. LLC is a disregarded entity, so the IRS doesn't care about it much anyway (unless someone was stupid enough to elect it to be taxed as a corporation, that is). Keep in mind that when in doubt - you are always better off with a professional (a CPA/EA licensed in your State) advice.", "title": "" }, { "docid": "b9dca32b8177f2bddd8208506c0d1b84", "text": "You proceed with a proper legal advice. You should not ignore IRS letters. You should have taken your chances in trying to reach a compromise with them, but that ship has likely sailed already. You might want to consider bankruptcy. Ask your parents for a couple of hundreds of dollars to pay for a legal consultation with a lawyer and a CPA and proceed from there.", "title": "" }, { "docid": "5233f5bef9fbf9e67543bacf0f91b536", "text": "As someone who used to be an IT contractor in the UK and used to work from home, my advice is to talk to your accountant in detail. It's been a few years, but IIRC you can write off some small stuff like proportional heating costs etc, but in my case it was so minuscule that it wasn't worth the effort. You're likely better off to just leave it. <subliminal message> Talk to your accountant :). </subliminal message>", "title": "" }, { "docid": "e30c1a9481ded4a26c6feb5502718faa", "text": "My understanding is you can create a company 0 value. Then you need to either loan the company the money to buy the building (it will still have 0 value as it will have a debt equal to it's assets) or sell share to investors at any price you like to raise the money to buy the building. Once shares have value (as valued by a chartered accountant - not anyone can do this) then anyone recieving shares will have to pay income tax. This is why keeping the shares as no value for as long as possible can be preferable. Also a benefit of using share options. talk to your investors, see what they require.", "title": "" }, { "docid": "358ca6cdfe9780ec08e4a2d93d91605b", "text": "My understanding (I am not a lawyer or tax expert) is that you are not allowed to work for free, but you can pay yourself minimum wage for the hours worked. There are probably National Insurance implications as well but I don't know. The main thing is, though, that if HMRC think that you've set up this system as a tax avoidance scheme then they're allowed to tax you as though all the income had been yours in the first place. If you are considering such a setup I would strongly advise you to hire a qualified small business accountant who will be familiar with the rules and will be able to advise you on what is and is not possible / sensible. Falling outside the rules (even inadvertently) leaves you liable to a lot of hassle and potentially fines etc.", "title": "" }, { "docid": "0405c80b946e2a2c2c2ceae2b78ccae7", "text": "In a simple case as the sole UK resident director/shareholder of a company, with that company as your only income, you are usually best paying yourself a salary of the maximum tax free amount allowed under your tax code (~£11k for most people at present). On this you will have to pay some employer and employee National Insurance (NI) contributions (totalling around £1000). Your salary/employer NI counts as an expense, so that is taken off the company profits. You then pay corporation tax on the remainder (20%). The first £5k you take as dividends is tax free, the remainder at a lower tax rate than the equivalent combined income tax/NI (starting at 7.5% instead of 20% tax plus employee plus employer NI), giving a significant saving compared to salaried income even after corporation tax. To declare and pay the tax, you would need to complete a self-assessment tax return. Your company will also need to file a return. The Contractor UK website, although aimed at IT contractors, has some very useful information on operating Ltd companies. That said, finances are rarely that simple so I would concur with the recommendation you engage an accountant, which is a tax-deductible expense.", "title": "" }, { "docid": "25c3c0fedb487bda03a9b386cba5a700", "text": "As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business.", "title": "" }, { "docid": "8c9b48ed7f140ddf25940da79b0bba86", "text": "The VAT number should be equivalent from the point of view of your client. The fact that you are a sole trader and not a limited liability doesn't matter when it comes down to pay VAT. They should pay the VAT to you and you will pay it to the government. I'll guess that their issue is with tax breaks, it is a bit more tricky to receive a tax break on paid taxes if you buy something abroad (at least it is here in Finland). If they won't pay you because of that, you could open a LTD or contract the services of a 'management company' which will do the job of invoicing, receiving the money and passing it back to you, for a fee.", "title": "" }, { "docid": "21d0c3dcd64ed588f9aa8af50c2612a9", "text": "An ISA is a much simpler thing than I suspect you think it is. It is a wrapper or envelope, and the point of it is that HMRC does not care what happens inside the envelope, or even about extractions of funds from the envelope; they only care about insertions of funds into the envelope. It is these insertions that are limited to £15k in a tax year; what happens to the funds once they're inside the envelope is your own business. Some diagrams: Initial investment of £10k. This is an insertion into the envelope and so counts against your £15k/tax year limit. +---------ISA-------+ ----- £10k ---------> \| +-------------------+ So now you have this: +---------ISA-------+ \| £10k of cash \| +-------------------+ Buy fund: +---------ISA-------+ \| £10k of ABC \| +-------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-------+ \| £12k of ABC \| +-------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ \| £12k of cash \| +-------------------+ Buy another fund. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ \| £10k of JKL & £2k of cash \| +-----------------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ \| £11k of JKL & £2k of cash \| +-----------------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ \| £13k of cash \| +-------------------+ Withdraw funds. This is an extraction from the envelope; HMRC don't care. +---------ISA-------+ <---- £13k --------- \| +-------------------+ No capital gains liability, you don't even have to put this on your tax return (if applicable) - your £10k became £13k inside an ISA envelope, so HMRC don't care. Note however that for the rest of that tax year, the most you can insert into an ISA would now be £5k: +---------ISA-------+ ----- £5k ---------> \| +-------------------+ even though the ISA is empty. This is because the limit is to the total inserted during the year.", "title": "" }, { "docid": "f3275902f1c0f9720de7ffcf33556f77", "text": "\"The shares are \"\"imputed income\"\" / payment in kind. You worked in the UK, but are you a \"\"US Person\"\"? If not, you should go back to payroll with this query as this income is taxable in the UK. It is important you find out on what basis they were issued. The company will have answers. Where they aquired at a discount to fair market value ? Where they purchased with a salary deduction as part of a scheme ? Where they acquired by conversion of employee stock options ? If you sell the shares, or are paid dividends, then there will be tax withheld.\"", "title": "" }, { "docid": "abd138c01e6d5a971c99c8f92350dfec", "text": "\"That's a tricky question and you should consult a tax professional that specializes on taxation of non-resident aliens and foreign expats. You should also consider the provisions of the tax treaty, if your country has one with the US. I would suggest you not to seek a \"\"free advice\"\" on internet forums, as the costs of making a mistake may be hefty. Generally, sales of stocks is not considered trade or business effectively connected to the US if that's your only activity. However, being this ESPP stock may make it connected to providing personal services, which makes it effectively connected. I'm assuming that since you're filing 1040NR, taxes were withheld by the broker, which means the broker considered this effectively connected income.\"", "title": "" }, { "docid": "305d0bb481877f331240bc5ec2e0572e", "text": "I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise.", "title": "" }, { "docid": "85e8f159933518a5a1796e99a84b2ce8", "text": "Ugh. Really? I thought this subreddit was smarter than this. 1) You pay taxes on net income, not sales. Expenses are tax deductible. 2) This took place in the UK, which operates on a different set of tax rules than many of us are familiar with. 3) The company still pays other taxes even if they don't pay income tax. In the US, examples would be payroll taxes including the employer portion of things like SS and Medicare, but I'm sure the UK has similar programs funded in a similar manner. To the extent that they own their buildings, they also pay property taxes. They globally source their supplies, which means they also pay import taxes. There are a ton of other taxes that a company pays. 4) Tax laws are complex because business is complex. Inflammatory headlines like this serve no purpose whatsoever.", "title": "" }, { "docid": "553ba551de833464c003df753f98f022", "text": "Not sure about the UK, but if it were in the US you need to realize the expenses can be claimed as much as the income. After having a mild heart attack when I did my business taxes the first time many years ago, a Small Business Administration adviser pointed it out. You are running the site from a computer? Deductible on an amortization schedule. Do you work from home? Electricity can be deducted. Do you drive at all? Did you pay yourself a wage? Any paperwork, fax communications, bank fees that you had to endure as work expenses? I am not an accountant, but chances are you legally lost quite a bit more than you made in a new web venture. Discuss it with an accountant for the details and more importantly the laws in your country. I could be off my rocker.", "title": "" } ]	fiqa
f9eee0c47bd816dc0561ae2c5ff2a8ba	Side work and managing finances?	[ { "docid": "2501def977a14701dad8252d84a2c649", "text": "\"I have done similar software work. You do not need an LLC to write off business expenses. The income and expenses go on Schedule C of your tax return. It is easy to write off even small expenses such as travel - if you keep records. The income should be reported to you on a 1099 form, filled out by your client, not yourself. For a financial advisor you should find one you can visit with personally and who operates as a \"\"fee-only\"\" advisor. That means they will not try to sell you something that they get a commission on. You might pay a few $hundred per visit. There are taxes that you have to pay (around 15%) due to self-employment income. These taxes are due 4 times a year and paid with an \"\"estimated tax\"\" form. See the IRS web site, and in particular schedule SE. Get yourself educated about this fast and make the estimated tax payments on time so you won't run into penalties at the end of the year.\"", "title": "" }, { "docid": "c93f3024d8d4bde48399c1dabe42032b", "text": "\"I've done various side work over the years -- computer consulting, writing, and I briefly had a video game company -- so I've gone through most of this. Disclaimer: I have never been audited, which may mean that everything I put on my tax forms looked plausible to the IRS and so is probably at least generally right, but it also means that the IRS has never put their stamp of approval on my tax forms. So that said ... 1: You do not need to form an LLC to be able to claim business expenses. Whether you have any expenses or not, you will have to complete a schedule C. On this form are places for expenses in various categories. Note that the categories are the most common type of expenses, there's an \"\"other\"\" space if you have something different. If you have any property that is used both for the business and also for personal use, you must calculate a business use percentage. For example if you bought a new printer and 60% of the time you use it for the business and 40% of the time you use it for personal stuff, then 60% of the cost is tax deductible. In general the IRS expects you to calculate the percentage based on amount of time used for business versus personal, though you are allowed to use other allocation formulas. Like for a printer I think you'd get away with number of pages printed for each. But if the business use is not 100%, you must keep records to justify the percentage. You can't just say, \"\"Oh, I think business use must have been about 3/4 of the time.\"\" You have to have a log where you write down every time you use it and whether it was business or personal. Also, the IRS is very suspicious of business use of cars and computers, because these are things that are readily used for personal purposes. If you own a copper mine and you buy a mine-boring machine, odds are you aren't going to take that home to dig shafts in your backyard. But a computer can easily be used to play video games or send emails to friends and relatives and lots of things that have nothing to do with a business. So if you're going to claim a computer or a car, be prepared to justify it. You can claim office use of your home if you have one or more rooms or designated parts of a room that are used \"\"regularly and exclusively\"\" for business purposes. That is, if you turn the family room into an office, you can claim home office expenses. But if, like me, you sit on the couch to work but at other times you sit on the couch to watch TV, then the space is not used \"\"exclusively\"\" for business purposes. Also, the IRS is very suspicious of home office deductions. I've never tried to claim it. It's legal, just make sure you have all your ducks in a row if you claim it. Skip 2 for the moment. 3: Yes, you must pay taxes on your business income. If you have not created an LLC or a corporation, then your business income is added to your wage income to calculate your taxes. That is, if you made, say, $50,000 salary working for somebody else and $10,000 on your side business, then your total income is $60,000 and that's what you pay taxes on. The total amount you pay in income taxes will be the same regardless of whether 90% came from salary and 10% from the side business or the other way around. The rates are the same, it's just one total number. If the withholding on your regular paycheck is not enough to cover the total taxes that you will have to pay, then you are required by law to pay estimated taxes quarterly to make up the difference. If you don't, you will be required to pay penalties, so you don't want to skip on this. Basically you are supposed to be withholding from yourself and sending this in to the government. It's POSSIBLE that this won't be an issue. If you're used to getting a big refund, and the refund is more than what the tax on your side business will come to, then you might end up still getting a refund, just a smaller one. But you don't want to guess about this. Get the tax forms and figure out the numbers. I think -- and please don't rely on this, check on it -- that the law says that you don't pay a penalty if the total tax that was withheld from your paycheck plus the amount you paid in estimated payments is more than the tax you owed last year. So like lets say that this year -- just to make up some numbers -- your employer withheld $4,000 from your paychecks. At the end of the year you did your taxes and they came to $3,000, so you got a $1,000 refund. This year your employer again withholds $4,000 and you paid $0 in estimated payments. Your total tax on your salary plus your side business comes to $4,500. You owe $500, but you won't have to pay a penalty, because the $4,000 withheld is more than the $3,000 that you owed last year. But if next year you again don't make estimated payment, so you again have $4,000 withheld plus $0 estimated and then you owe $5,000 in taxes, you will have to pay a penalty, because your withholding was less than what you owed last year. To you had paid $500 in estimated payments, you'd be okay. You'd still owe $500, but you wouldn't owe a penalty, because your total payments were more than the previous year's liability. Clear as mud? Don't forget that you probably will also owe state income tax. If you have a local income tax, you'll owe that too. Scott-McP mentioned self-employment tax. You'll owe that, too. Note that self-employment tax is different from income tax. Self employment tax is just social security tax on self-employed people. You're probably used to seeing the 7-whatever-percent it is these days withheld from your paycheck. That's really only half your social security tax, the other half is not shown on your pay stub because it is not subtracted from your salary. If you're self-employed, you have to pay both halves, or about 15%. You file a form SE with your income taxes to declare it. 4: If you pay your quarterly estimated taxes, well the point of \"\"estimated\"\" taxes is that it's supposed to be close to the amount that you will actually owe next April 15. So if you get it at least close, then you shouldn't owe a lot of money in April. (I usually try to arrange my taxes so that I get a modest refund -- don't loan the government a lot of money, but don't owe anything April 15 either.) Once you take care of any business expenses and taxes, what you do with the rest of the money is up to you, right? Though if you're unsure of how to spend it, let me know and I'll send you the address of my kids' colleges and you can donate it to their tuition fund. I think this would be a very worthy and productive use of your money. :-) Back to #2. I just recently acquired a financial advisor. I can't say what a good process for finding one is. This guy is someone who goes to my church and who hijacked me after Bible study one day to make his sales pitch. But I did talk to him about his fees, and what he told me was this: If I have enough money in an investment account, then he gets a commission from the investment company for bringing the business to them, and that's the total compensation he gets from me. That commission comes out of the management fees they charge, and those management fees are in the same ballpark as the fees I was paying for private investment accounts, so basically he is not costing me anything. He's getting his money from the kickbacks. He said that if I had not had enough accumulated assets, he would have had to charge me an hourly fee. I didn't ask how much that was. Whew, hadn't meant to write such a long answer!\"", "title": "" } ]	[ { "docid": "8753871fa539a3cd8957b1bd8db5b58e", "text": "So, you don't necessarily have to have your job be your life to work in finance. That's good to know, and makes sense, since surely there aren't enough Type A's to populate an entire, large, industry. Man, I don't understand how one could work 100 hours a week for more than maybe one week. It would seem like basic needs such as sleep would become difficult with that level of work.", "title": "" }, { "docid": "70b440149f0ea2945f6e0a986e1c361f", "text": "In the current economy there is no upside to working for yourself. Get in a salaried position as soon as you can, and sacrifice to whatever gods you worship that you don't get made redundant. If you're already working for yourself, and wouldn't give it up for anything, hire someone, and get them off the street.", "title": "" }, { "docid": "eb5a20653a17edd0a4c4b6373ca9ca63", "text": "If commuting is a big budget item, then can you: A side job is one way to make extra money, but I'd suggest a home business. If your wife substitute teaches, I bet she writes fairly well, and in any case you can. Write a personal finance blog or just a site with articles. Focus on surviving and thriving with child(ren) in a one-income Christian household in the suburbs of Philadelphia. Or if you have a hobby that stokes your furnace, write about that. Heck, do both. The content just stays there and gets traffic day after day that you can monetize. My main suggestion would be to start this now because it's not overnight money. But in the long run it can turn into a nice, fairly passive income. The big advantage of this is that mommy gets to stay home with the kids and build up a decent business. The cost is $10/year for the domain (per domain) and maybe $10/month for hosting. Or, if some other legitimate work-at-home business presents itself, go with that. I suggest blogging because it's what I know, but everyone's an expert in something unique.", "title": "" }, { "docid": "7b7bf351cd2a799c09043b696a6fae8e", "text": "\"I did this a couple of years ago, and boy do I regret it. After many months of delayed, and new faces coming onto the team for a short period before leaving, there wasn't much hope to ever complete the project. I ended up accumulating debt (About 4.5 grand) that I am still paying off because I chased my dream. Unfortunately, anything can happen when you choose to pursue a goal. It can get delayed, stopped, or outright fail. At the bare minimum, you would best be prepared to deal with delays, competing products, and outright failures. If you say \"\"I have enough money to last me 12 months and I expect to take 7 months\"\", then you best be prepared to answer: These are just a handful of ideas, and there are plenty more that would need to be addressed. Probably the best thing that I have seen a few friends do is to ask for reduced hours. Working part time allows you more time while reducing, but not eliminating, the pay. Even better is that depending on your company, you could ask to go back to full time if your startup didn't work out. Another option is to do what I'm doing currently: Find a job with lots of downtime. My job is critical and the market here is starved of good techs. Even then, I have a solid 2-4 hours of work each day. The other 4-6 hours I can spend on my personal projects that may eventually lead into a startup. If you plan to do this though, make sure to read your agreements carefully. There may be restrictions on copyright and the likes by working on a personal project on company property. If you do plan to go this route, you might want to consult a lawyer (like I did) to make sure you won't get screwed later.\"", "title": "" }, { "docid": "ca7d8dfd97eb2966bce100d8c393e62e", "text": "You should be receiving monthly P&L statements at the very least. Who did you have filing taxes, doing payroll, performing audits? It seems that many restaurants and bars have a slippery cash issue where profits seem to just slide out the doors. Everyone touching cash might be skimming and if the manager is doing all the totals and reconciling the tills and filing taxes then that single point of failure is going to KILL you.", "title": "" }, { "docid": "b4336435e2c2a2afe95151e911afbb5f", "text": "Read the game of numbers by nick Murray. You have to find money to call yourself a money manager and most of the job is sales. You won't stay in business if you're bad at managing it, but step #1 is finding something to manage. Hani", "title": "" }, { "docid": "5183bbab5aeab7826f11c6ca20470d98", "text": "Thanks for the feedback. What area of finance are you currently in? I've heard that RMI jobs are in demand right now as well, and I feel like that coupled with a background in computer science could really help.", "title": "" }, { "docid": "1a2a765a7cfc832278978c121597cd18", "text": "Running a sandwich shop and, say, a software consulting service are quite different things. I had two employees at one point, following the kind of thinking in the article. But I found what that meant was that I had to spend more time being a manager and salesperson and much less time doing the work I enjoyed. To make it viable I would have had to scale up to the point where I had at least one salesperson and maybe a manager, which would have required more income-producing staff to support them. Instead, I scaled back to just myself, and have been very happy with that decision. The article also underestimates what can be made in consulting or IT contracting. Rates well above $100/hr are common for people with expertise (as opposed to commodity providers), and billing at least 40 hours a week is not usually a problem. It's certainly true that a one-man operation is much more likely to put a ceiling on your earnings, but (a) that ceiling can be a lot higher than the article suggests, and (b) depending on the business, breaking that ceiling and earning much more is certainly possible in some businesses, for example where you have the opportunity to sell your work in product form rather than hourly.", "title": "" }, { "docid": "97981d763eaf2dd7462318854e27a4e7", "text": "Hey, not really related, but could I ask you some questions through PM? I'm a rising junior majoring in finance and minoring in stats with interests in corporate banking/credit risk, but I'm really interested in the buy-side work you do/your dealflow experience/industry expertise/analyst experience before Associate", "title": "" }, { "docid": "1aeb7f4002099cbc82dbdf8af140fe4a", "text": "\"Here's another perspective - I work in FP&A at a large Chicago bank. I originally was interested in treasury, but here it is mostly cash management/reserve requirements/etc. - not really my cup of tea. A lot of our M&A activity and fundraising roles are held by former I-Bankers. It might be hard to make it into that role. I don't have any \"\"Accounting Functions\"\" - the accounting teams do that. While I am involved in planning and forecasting, I also provide a lot of strategic analysis on projects and ad-hoc/pro-forma reporting. Here, FP&A is more the voice of the financial function in strategic decision making. One other piece of advice - see if you can talk to some people on the team and see what their day-to-day is like. If you're interested in FP&A in the true sense and not accounting/GLs, try looking for a larger firm.\"", "title": "" }, { "docid": "d3da0cd1c67d1c4cc43b2d6c2096f217", "text": "Not sure why you're posting in r/finance; did you meant to post in /r/PersonalFinances ? Or /r/financialindependence ? Anyway, I'll play. There are 3 ways you can go about it, make it 4: 1. Commercial: find yourself a job/career that you'd do it for free. I once met a guy who was in your similar situation and he had a hot dog stand in the hearth of the financial district of a large US city; he did it for the fun and to be social. He'd be there only when the Stock Market was open and if the weather was good. You could also develop a more challenging career for the satisfaction of it: writer, artists, craftsman.... You could go back to school, or take an online class, or do an online degree for the pure satisfaction of it all 2. Start a company. Similar to #1 above, but this this 100% entrepreneurial. It could be just yourself, or enlist the help of the wife; full time or part time. This again, follow your passion; since you're set financially it should not that difficult to break even. With time you could grow and hire people, but that increase the complexity and you might find yourself managing the business and not actually getting the satisfaction of doing what you had set to do. 3. Volunteer: find a non profit whose mission aligns with your values, and volunteer there; 1 or a couple of organizations; if you're up to it with time you could climb up the ranks ... 4. Mentoring: there are a lot of people who dream about being in your situation. I am sure it was not luck but hard work as well. You could become a blogger, write a book (in your name or anonymously); or mentor directly someone, reddit and a web site is a good marketing start. If you have enough money (accredited investor) you could become an angel investor, or join an angel consortium to help people with your background to make something out of themselves. 5. A combination of 2 or more from the above.", "title": "" }, { "docid": "f058c4857630cac998ee4000cdf51dd2", "text": "it is not a creative career. you don't make anything, you serve your purpose in the economy ofcourse, and it is interesting to be surrounded and in the middle of business like this...but at the end of the day, you sell a service that anyone else can do, and your clients, the businesses, are the actual smart ones. they are the ones that make something and make real decisions. in finance you just trade, or research, or sell your investment banking services...its pretty bs, you leach of what actual creative people are doing. unless you are at a buy side shop, and high up, but then you would be incredibly intelligent and lucky. that all being said, i have no regrets choosing finance, it is still a great career, and any job gets boring after a bit. i wish i worked in a different area of finance yes, but every area you need to start as someones bitch for a few years, and I'm not sure if I can do that again. More math education always helps in finance", "title": "" }, { "docid": "6ced8bdf8dd9ea79f75c2faf73ca36f9", "text": "Happy to help. I always recommend you try and solve these types of problems by hand over financial calculators so that you can get a feel for how terms in the equation relate to one another. That's important while you're studying/learning. But for work--by all means you should use the fastest method, which is probably excel.", "title": "" }, { "docid": "d628afa3834e34ce20884705a088e800", "text": "Yeah, I suppose that's true - and not just in finance but smaller companies in general. I think I might have a good gig right now where I can try my hand on both things. It's a bit tied to one IT system though (Misys Summit) but I guess a lot the skills are transferable.", "title": "" }, { "docid": "904291c8790bd890b5644dd82a6e17d8", "text": "Your problem is one that has challenged many people. As you said there are two aspects to balancing a budget, reducing expenses or increasing income. And you state that you have done all the cost-cutting that you can find. Looking at ways to increase your income is a good way to balance your budget. How big is your problem? Do you need to find another $100/month, or do you need $1000/month? There are many part-time jobs you could obtain (fast food, retail, grocery), you could obtain a sales-job (cars, real estate, even working for a recruiting firm) where you could connect buyers and sellers. If your need is $100/month, a part-time job on weekends would fill the gap. When I was trying to solve my budget problems a few years ago, I thought that I needed to increase my income. And I did increase my income. But then I realized that my expenses were too high. And I re-evaluated my priorities. I challenge you to revisit your expenses. Often we assume that we need things that we really cannot afford. Consider a few of your (possible) expenses, My problems included mortgage debt, auto loans, high utilities, high car insurance, too much spending on kids activities, and a few other problems.", "title": "" } ]	fiqa
460c4ce11db1568cba081022f1e31d83	What happens when PayPal overdrafts a checking account (with an ample backup funding source available)?	[ { "docid": "31748a9d3c9acbd7ecd84088aa552479", "text": "You should check directly with the seller. I suspect you will find they have not recieved any money. Paypal tend to hang on to money as long as possible in all transactions, and will do anything to avoid giving out cash before it has come in.", "title": "" }, { "docid": "eb9b830ba43c5a42c6f41b9e1714634b", "text": "PayPal will be contacting you shortly, I'm sure. You'll see the reversal on their site in a few days as well as a fee from their end I bet.", "title": "" }, { "docid": "4f37161273d28eaa14946bf84ac9c41c", "text": "\"I made this mistake and tried calling Paypal...the first time I have ever been unhappy with their service. The girl gave me some number but didn't make it clear whether it was an order reference number or a reference phone number for the company I ordered from. I called within 10 minutes of placing my order and they were unable to cancel or change the payment method. I did find however, that even though you can't pay paypal with your credit card, some banks will let you. I went into my account and \"\"paid\"\" my account the amount needed using my credit card from the same bank that I had intended to use in the first place...hopefully it went through quickly enough to not get a service fee from Paypal\"", "title": "" } ]	[ { "docid": "048a197e1f19c8e5bbb16b6dc3812080", "text": "I never understood why anyone would overdraft their checking account, until a conversation with a bank teller recently who told me that most young folks these days don't bother to balance their checkbooks anymore or to even bother with a checkbook at all -- they just check their available balance to see how much is in their checking account (totally ignoring any checks or other charges that may have been made against their account but have not yet been debited). It's hard to believe that young people can be that stupid, but apparently some are.", "title": "" }, { "docid": "625b4ac57726954c615a0f324b509988", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?", "title": "" }, { "docid": "41b1dc88dca2576c9ddf6131b6f7343f", "text": "\"As the other answers stated: Yes PayPal will transfer money from your bankaccount automatically if your PayPal balance isn't sufficient. Let's add some proof to the story: (Note, I am in the EU, specifically the Netherlands, situation might be different in other parts of the world) If I login to PayPal and go to my wallet, I have a section that looks like this: If I click on it, I am presented with a screen with details about the connection. Note the \"\"Direct debit instruction\"\". If I click on the \"\"view\"\" link I am presented with the following text (emphasis mine): [snip some arbitrary personal details] This authorisation allows (A) PayPal to send instructions to your bank account and (B) your bank to debit your account in accordance with the instructions from PayPal. As part of your rights, you are entitled to a refund from your bank under the Terms and Conditions of your agreement with your bank. A refund must be claimed within 8 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can obtain from your bank. Below this text is a button to delete the authorization.\"", "title": "" }, { "docid": "46275c177deeb601b7d56a1afda66b34", "text": "\"This is based on my experience with Chase and may not be applicable to other banks. As you mentioned Chase as one of the banks you do business with hopefully this will be helpful to you. The money does come out of your account immediately. If the check isn't cashed in a certain amount of time, the check expires and you get the money credited back to your account. Once you have made a bill payment online you can check on the status of your check by looking at your payment activity, finding the payment in question, and following the \"\"proof of payment\"\" link. There is will provide you with information on your payment which you can submit to your payee to prove when you submitted the payment, and which they can use to verify with the bank that you really did send the payment as you claimed. Once the check is cashed, this page will also contain images of the front and back of the cashed check, so you can prove that the recipient really did cash it. You can see from this info that the check is being funded from a different account number than your own, which is good for security purposes since (per Knuth, 2008) giving someone else your bank routing number and account number as found on your personal checks basically provides them with all they need to (fraudulently, of course) clean out your account.\"", "title": "" }, { "docid": "95f2f611920c54d8dff0a27016ba995b", "text": "Can a third party deposit to my account? (Say I'm selling something and I ask him/her to just deposit the payment to my account? No, but PayPal.", "title": "" }, { "docid": "cdc0cbcd30799904fff3857fb4579d78", "text": "\"Insufficient funds will cause a check to bounce. If there is evidence that you \"\"kited\"\" the check deliberately, that's a potential fraud charge. If the vendor accepts that you were just stupid/careless, you'll probably just have to pay a penalty processing fee in addition to making good the payment. It is your responsibility to track your account balance and not write bad checks. If the timing could be bad, don't write the check yet. If you insist on paying with money you may not have, talk to your bank about setting up overdrafts to draw from another account, or automatic overdraft loans... or use a credit card rather than paying by check.\"", "title": "" }, { "docid": "6b722f7ab18aa74ea0ca2f4cbd589dfb", "text": "Of course its possible. Under what terms and with what fees depends on your bank/country regulations, but generally speaking - loaning is the major source of income for banks, especially short-term account overdrafts (which is essentially a loan, usually at a high rate). In the US you can (now, since the new regulations kicked in) instruct the bank not to pay checks/decline debit card purchases if you don't have sufficient funds on the account. Otherwise you can instruct them to pay (at their discretion) to avoid bouncing checks, and accept NSF fees (usually pretty high). Some banks provide overdraft lines of credit (then you won't have NSF fees, and will just pay interest when tapping into that line), others provide option to automatically withdraw the missing amount from a linked account (checking or credit card).", "title": "" }, { "docid": "e6062d1d56fd7a847048feadf670efed", "text": "I think part of the reason people overdraft is because the online banking app/website doesn't show a true indication of your account balance. I've had mine (at Bank of America) adjust to $30 less than it told me I had when I checked due to processing payments being altered.", "title": "" }, { "docid": "ade9e9453e39272b378323c795f6e9a8", "text": "The initial story sounds normal. Happens every day. Checksums cannot prevent this, since it is a typo by the sender. The sender typed in a wrong account number. That account number happened to exist (so the sender wouldn't get any immediate error message), your account. But, that innocent story can also be used as part of a money laundering plan. Namely, to give the money a legitimate source. Also can be used in a scheme to frame you for something. The question of how the person got your phone number raises suspicion. The bluffs to avoid the normal paperwork, and then disappearing, make it incriminating. No doubt. Take this to the police. The question arises: even if the plan (whatever it was) failed, why didn't he do the paperwork and get the money back? The answer is that that would leave a trail to possibly be picked up in a future investigation.", "title": "" }, { "docid": "e09675eb1b11e2d356c5e98f69dfd519", "text": "\"Your broker will charge you commissions and debit interest on your \"\"overdraft\"\" of $30,000. However it is very likely that your contract with the broker also contains a rehypothecation clause which allows your broker to use your assets. Typically, with a debt of $30,000, they would probably be entitled to use $45-60,000 of your stocks. In short, that means that they would be allowed to \"\"borrow\"\" the stocks you just bought from your account and either lend them to other clients or pledge them as collateral with a bank and receive interest. In both cases they will make money with your stocks. See for example clause #14 of this typical broker's client agreement. Applied to your example: In other words they will make $60 + $450 + $1,800 = $2,310 the first year. If the stock is expensive to borrow and they manage to lend it, they will make a lot more. There are by the way a few important consequences:\"", "title": "" }, { "docid": "2c8994eda8bc5560355d5e4bd03d5914", "text": "\"The whole concept of \"\"spending a fraudulent check\"\" is misleading. Both in practice and legally there are two separate transactions - you (not) receiving funds by depositing a fraudulent check, and you sending a cash transfer further on. Regarding the fraudulent check, generally your bank is 'responsible' in the sense that it's their responsibility to recover the money from you - it will not receive any money from the bank that supposedly issued the fake check, and if they give it to you, you spend all that money and are unable to pay it back, that's their problem and not of the other institutions. Regarding the cash transfer, from the bank point of view it's solely your responsibility - it was really you who made that payment, you explicitly authorised/instructed the banks to deliver money to the recipient, and none of those banks have the duty to return it. You have been defrauded by the recipient of this payment, and may attempt to recover the money from the fraudster - but that's not particularly likely to happen even in the case of a successful arrest and conviction. Very fast reaction with involvement of police may block the \"\"vendor's\"\" account before they are able to withdraw the money. If that is the case, you might be able to recover your money or part of it.\"", "title": "" }, { "docid": "1aac6eba5fa292c4d798a14ff58e8758", "text": "\"When I deposit my paycheck in CapOne I have an email before I am out of the app that they received my check. I have access to some portion of the cash now and the rest the next business day, however they put things in order to NOT overdraft me. For instance, if I am overdrawn $150 but the charge is \"\"pending\"\", putting the check in they will deposit the check before posting the charge that would overdraft me. Plus I can use Apple Pay with it. My local CUs have app deposit, but it takes DAYS for a deposit to just show up. Plus, no Apple Pay.\"", "title": "" }, { "docid": "ee00fcd08011a8bc19f48b4fee0f010c", "text": "\"My sister, who is in her mid twenties and not the most financially responsible kept telling me that the bank was doing \"\"weird shit\"\". I looked at her statements and noticed something else wells fargo does. She has a checking account that has a ten or fifteen dollar monthly fee. If her account ever got near that number or in the negative that is when that fee would be charged. So basically instead of charging that fee at the same time every month they would wait till that charge would cause an overdraft which would spark a $35 dollar fee. Yes I also proved that they are still reordering. I told her to save all her receipts for one month. Her account was at $50. She made a five dollar food purchase, and several other small purchases and then had to pay a small bill that took her over. Via the receipts it was easy to see that all the other small purchases were done two to three days ahead of the one that actually over drafted her. Which cost her almost $200 in overdraft fees. She is actually not that bad with money, she works 40 hours a week but she just does not make enough to live on and this kind of practice puts her in a hole over and over again.\"", "title": "" }, { "docid": "759d03a7648458750b610f6759244394", "text": "\"BoA used to do this too (probably still do). I opened an account at BoA and got low one month, and then a friend of mine cashed a $50 check that I'd given him months prior (that he said he would never cash because \"\"your money is no good here\"\"). That freaking $50 check cost me hundreds of dollars. They charged me the overdraft fee, a bounced check fee, and then ran the fucking thing through again to see if it would cash when they knew it wouldn't, so I ended up with all the fees doubled! I closed my account after that, and 2 months later, I got a notice that my account had a negative balance of more than $100 because they had charged me the monthly fee for the checking account after I closed it, and since the account was empty... buttfuckbybankapalooza.\"", "title": "" }, { "docid": "dc730f98db6f12a5b86cfb47010b49ff", "text": "\"Lol, wtf kind of question is this? First off, there is no single \"\"derivatives market\"\". There's listed derivatives (ETD's) and OTC. Then you can break each of those broad markets down into forwards, futures, options (includes all exotics such as binaries, single barriers, double barriers, one touches, double no touches, knock ins, knock outs, reverse knock ins, reverse knock outs, window barriers, etc), and swaps (including swaptions). All of these are product specific (FX, FI, Credit, Equities, Commodities, etc).... so its more appropriate to look at derivatives with respect to the market they are in rather than all derivatives across all markets. Now to your question... your question makes absolutely no sense. Are you wondering what the daily volume is? Notional outstanding? Total exposure?\"", "title": "" } ]	fiqa
80592674a995d60d29c5b6a9625cdec5	Moonlighting as a software developer: employee or independent contractor w/ LLC?	[ { "docid": "ef325af95e1dfafaa8396f9a31045429", "text": "\"I've been in a similar situation before. While contracting, sometimes the recruiting agency would allow me to choose between being a W2 employee or invoicing them via Corp-2-Corp. I already had a company set up (S-Corp) but the considerations are similar. Typically the C2C rate was higher than the W2 rate, to account for the extra 7.65% FICA taxes and insurance. But there were a few times where the rate offered was identical, and I still choose C2C because it enabled me to deduct many of my business expenses that I wouldn't have otherwise been able to deduct. In my case the deductions turned out to be greater than the FICA savings. Your case is slightly different than mine though in that I already had the company set up so my company related costs were \"\"sunk\"\" as far as my decision was concerned. For you though, the yearly costs associated with running the business must be factored in. For example, suppose the following: Due to these expenses you need to make up $3413 in tax deductions due to the LLC. If your effective tax rate on the extra income is 30%, then your break even point is approximately $8K in deductions (.3*(x+3413)=3413 => x = $7963) So with those made up numbers, if you have at least $8K in legitimate additional business expenses then it would make sense to form an LLC. Otherwise you'd be better off as a W2. Other considerations:\"", "title": "" } ]	[ { "docid": "d5a2c50b5203029f48d9b4038438591b", "text": "Yes. I have personally signed such contracts (fixed budget software development) and lost money every single time. And yes, it is quite possible for you to get paid under minimum wage if you take too long. Scope creep is the primary culprit for these kinds of contracts, so make sure you put together iron-clad explanations of what is and is not covered by the contract (and pad the asking price for good measure).", "title": "" }, { "docid": "8e99da3dcb69407b14e31d57a876e9de", "text": "\"Yea. Almost every form I fill out wants to know \"\"Employer Name\"\". They don't even bother checking \"\"Are you Self Employed\"\". Of course, I end up writing \"\"Self Employed\"\" in employer name field anyway. In the United States, it is even harder because EVERY state has their own labor and employment laws. You are a freelancer but what if you need to travel to a client site in a different state. Bam, you gotta file taxes for that state as well even if you made like a few hundred bucks. Too much red tape and it is really hard to change.\"", "title": "" }, { "docid": "6944f9c0b50e5048b10f8ec9bfc045df", "text": "Software Contractors are not employees of the company that is procuring the software. Software Contractors necessarily work for another legal business entity. There is a business to business relationship between the procurer of the software and the entity producing the software. Therefore, the company procuring the software is not required to pay a minimum wage, or adhere to any other employment law. When any individual or company orders a software product and agrees to pay for it, that is a fixed priced contract. This happens millions of times a day. The amount of time taken to produce the software has no direct bearing on price. For instance, there is no minimum price for Microsoft Word based on the number of hours taken to produce it. Generally a Software Contractor will be a director and shareholder of a limited liability corporation. Directors are exempt from the standard protection offered under employment law. If the company producing the software was employing non-directors to produce the software, rather than sub-contracting to another business then employment law would apply.", "title": "" }, { "docid": "8faf102c4cceb0254f9731411e2413c0", "text": "If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.", "title": "" }, { "docid": "9af7bc5f7852658ba815630c125902db", "text": "\"I made a throwaway for this... I work in IT for the government. I was tasked with finding a vendor that provided a particular kind of software. My bosses expected it would take me 4-6 months to source out companies, go through all the paperwork and process to work with them, try to get them to understand what we need, and them aid them in implementing their software on our stack. Well, that seemed like an enormous waste of time (and ridiculously boring), so instead I wrote the software on my own time over the course of 4 months, built a subscription model around it, and incorporated a company. I've since sold the subscription based model to a number of other government bodies and clients. The government body I work for has around 250 employees, and I recently sold a subscription to a peer government body with over 1500 employees. I built a free subscription tier that my current company uses so that i'm not taking any payment from them, to avoid any conflicts of interest, and built the entire project on my own time and resources. The funny thing is, the software product I built easily beat out all the competitors in blind tests, and no one that I work for could ever imagine that I am capable of even being employed by such a company, forget building the whole stack and founding the company. In fact, all of upper management has been impressed with the software I \"\"found\"\", and how well it has worked... there has been a ton of positive feedback on it since it was launched. I'm basically just sitting on this project (that is mostly self sustaining), until I can just cash out - which should be quite soon. Edit to the people warning me what i'm doing is illegal, a few key points - 1) The public sector can't legally profit from anything, my job is to limit cost, not make a profit... which leads to... - 2) I'm not charging the government body I work for, it's a free implementation devoid of contract. I also ensured I do all the work on my own time, not company time. I live somewhere where most government employees work multiple jobs, so this isn't uncommon. In fact, my government body actually does often hire contractors who are also employed. So not only did I create the service on my own time, I gave it to my employer for free (other companies pay, of course) - 3) I don't live in the US, things are different where I am. It is certainly not illegal, and I would even argue that (given this is the public sector) it is even somewhat ethical. My work saved my employer (the tax payer) a significant amount of money, which is a net positive. The service is of high quality, and I did not break any employment agreements or laws in the process. - 4) I hired a lawyer to double check everything. - 5) I absolutely am not in any way using any proprietary information for profit. I'm not even using my contacts through work as leverage for sales - everything so far has been cold calls and positive references from other clients. This was a key part of the project.\"", "title": "" }, { "docid": "3e00c1083e5d0f95b58bbdb1a5f44a75", "text": "\"An unmarried person with a total U.S.-sourced earned income under $ 37,000 during the year 2016 is likely to owe: If the original poster is not an \"\"independent contractor\"\", and is not \"\"billing corp-to-corp\"\" then: In summary: References:\"", "title": "" }, { "docid": "f039b8bf09ec32891f0466248f7bbe50", "text": "The reality is that for labor is cheap for software startups. A couple of founders can usually take a prototype to the point where they can get the seed capital to hire labor at market rates, so why would they give up significant equity to employees? Plus, if they need cheap employees, there are always contractors and naive new grads who will gladly take below-market salary for 0.1% of the company. (in options, vested over four years, of course)", "title": "" }, { "docid": "7beb296a45b2f6718fda648042db802f", "text": "\"Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said. This is all about how it goes \"\"on the books.\"\" [emphasis mine] As an independent consultant myself, when I hear something like \"\"the work will be the same either way\"\", I think: \"\"Here thar be dragons!\"\". Let me explain: If you go the independent contractor route, then you better act like one. The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go \"\"on the books\"\" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too. Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee. You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea. But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.) That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent. IMHO, the tax benefits alone wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below. If you're not sure what status to choose, the IRS can actually help you. But be prepared to wait... and wait... :-/ Additional Resources:\"", "title": "" }, { "docid": "ceefd9186fbe63a649c1b841cd61d71d", "text": "It makes no difference for tax purposes. If you are 1099, you will pay the same amount of taxes as if you formed a corporation and then paid yourself (essentially you are doing this as a 1099 contractor, just not formally). Legally, I don't know the answer. I would assume you have some legal protections by forming an LLC but practically I think this won't make any difference if you get sued.", "title": "" }, { "docid": "0cc9f29299b97f983d66979dc8a38088", "text": "Are you talking about domicile? An LLC is treated differently than a corporation in the terms of citizenship of the law. An LLC is a citizen of whichever state it's members (shareholders) are citizens. I would recommend you just spend the money on a business attorney to ensure that all the t's are crossed correctly so it doesn't end up costing you more later on.", "title": "" }, { "docid": "fd1b696673c652e6a1cf4604b7cb0acb", "text": "I had an internship and they hired me afterwards. Honestly sounded like a good way to break in. I also learned a whole new language for the internship and wanted to continue using it instead of any of the languages taught in school. Not sure if the company would be considered good or bad. I ended up being solo for a long time but also building three applications ground up. I felt like I was improving a lot, especially on projects they gave me lots of leeway on because they were low priority (they just wanted features, no emergency bug tickets, etc). But no peers for most of my work and all the software was privately made and privately licensed/sold. I also had difficulties leaving because I'm an idiot. With no backup me leaving basically meant they would be fucked, and they were my only reference. I was fine taking that salary because I had zero experience (no job. Ever. Not even volunteering. My mother wouldn't let me because of snobbiness), however once I was more valuable to this company and they even praised me for it in the assessments -- they gave out 2% raises. Later my bonuses decreased as my hours and responsibilities increased, too. I asked to be taken off the stressful project, thinking I could salvage this, and they hired a replacement for me to train 3 months later. I got the high leeway project again for 6 months and my job satisfaction was phenomenal by comparison so i stayed. However, then my replacement was fired... So they asked me as a favour to work on the stressful project again and said they would replace me in a month and a half. They didn't. I worked on it for 8 months, I kept asking about it too. Their job posting was also terrible and they roped me in on it at the end and I gained the responsibility of recruiting and vetting (yay for that one actually...). We hired another replacement for me, I trained them too, and left immediately. Actually I regret staying there as long as I did. They gaslit me and I shouldn't have tried to make up for their incompetence. They actually made me a contractor at the end so I was getting paid half of what I originally was. Before I left I asked for a competitive raise and the company owner basically lied about details and tried to tell me what a fuss I was trying to talk about my happiness and what I want once a year... It was surreal but they agreed to bump my pay in the end. However, I was furious by their treatment and reply (which BTW came after I 'suddenly did not show up' despite bolding and clearly stating I would cease work with them and informing the people I worked with on the last day that I heard nothing back from the owner about a new/extended contract), so I said no. I don't know how to negotiate. I am too humble. Selling oneself or seeing someone sell themselves makes me physically uncomfortable. It is completely unnatural, and sets off my bullshit alarms. Actually I seem to have some PTSD from that job, now, too...", "title": "" }, { "docid": "559b05e48a817e0e9841d2cc181a9a71", "text": "\"You are confusing entirely unrelated things. First the \"\"profit distribution\"\" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as \"\"profits from S-Corp\"\". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case.\"", "title": "" }, { "docid": "ce7f4a7b972e08489a6a8c630a90ded1", "text": "\"Am I on crack, or do the perceived tax savings via S-Corp distributions really not matter at a certain level of business income? You're not on crack. Generally, if all the income is generated by your own personal services - this is the outcome. The benefit of S-Corp is when you have employees who generate your income, and you distribute to yourself profits that come out of other's personal services. In this case your distributions are exempt from FICA since it is not in fact a self-employment income. You'd still have to pay yourself a reasonable salary for your position (as a manager/officer), but it wouldn't have to cover all of the available profits. So if the IRS takes a position against you it would be that your salary should be to include the whole profits, since it is the compensation to you for the personal services that produced the income to the corporation (you). In many cases they might agree that a salary at the SS maximum limit would be reasonable - but that's only a speculation of mine. In that case you might gain some portion of the medicare tax (with the recent law changes at the levels you're talking about you'll pay some medicare anyway). There are a lot of accountants who take more aggressive position saying that not all of the distributions are liable for SE taxes, even if you're the sole employee of the corporation. These cases often end up in the Tax Court, and whatever the outcome, your legal fees become higher than the FICA savings. What is probably missing in your picture is the SS limit of (currently $112K) above which you don't pay social security tax, so whether you get it as a salary or as a distribution - that limit is the same. That is why you don't see a significant difference. I know there are a lot of accountants who'd disagree, but I would argue that for a sole employee of your company, S-Corp doesn't provide significant benefits over the disregarded LLC taxation, but has some additional overhead that adds to your expenses. Here's a link to a lawyer's blog where he suggests (and says many accountants follow) 60/40 division between salary and distributions. I.e.: his take, similarly to mine, is that most of the earnings have to be treated as salary. In your case, when the total is about 300K - you indeed will not get any FICA savings with such a division other than some of the medicare. Unusually low wages when compared to distributions can draw unwanted IRS scrutiny and an audit. An unfavorable audit will likely result in some portion of the distributions being reclassified as earned income for federal income tax purposes, which results in a deficiency assessment (i.e., a tax bill), interest on those unpaid taxes, and IRS penalties. The article also talks about the Watson case (one of the Tax Court cases I referred to), which can be used as the guidelines for determining the \"\"reasonable\"\" compensation. Talk to your tax adviser. I'm neither a tax adviser nor a tax professional. For a tax advice contact a CPA/EA licensed in your state. This is not a tax advice, just my personal opinion.\"", "title": "" }, { "docid": "0d5db709426ecd7f9d7fbe0d9e7ed547", "text": "They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm.", "title": "" }, { "docid": "077e69dfbbb8d8112c446114db179a4c", "text": "As a nonresident sole proprietor or partnership You are not a sole proprietor or a member of a legal partnership. You are an employee for a corporation. Does the nature of your work require you to be present in New York regularly? If you are in New York for personal reasons, you are simply telecommuting. You must pay taxes personally for your W-2 income, but your business entity never moved from Wyoming. If this were not true, companies would have to pay corporate income tax to every state in which they have a telecommuter. For example, I live in Florida but telecommute to a company in Michigan. Does my employer pay Florida business tax? Of course not. Your business would only owe New York if the nature of the business requires a consistent and regular business presence in New York, such as maintaining an office for a portion of every year so clients could see you.", "title": "" } ]	fiqa
a44f98a0b1a001917415fe82cd7b0445	W-8BEN? What's the tax from selling my software to a U.S. company, from abroad?	[ { "docid": "115d0a051dd222f63829ad5e3d860058", "text": "You should not form a company in the U.S. simply to get the identification number required for a W-8BEN form. By establishing a U.S.-based company, you'd be signing yourself up for a lot of additional hassle! You don't need that. You're a European business, not a U.S. business. Selling into the U.S. does not require you to have a U.S. company. (You may want to consider what form of business you ought to have in your home country, however.) Anyway, to address your immediate concern, you should just get an EIN only. See businessready.ca - what is a W8-BEN?. Quote: [...] There are other reasons to fill out the W8-BEN but for most of you it is to make sure they don’t hold back 30% of your payment which, for a small company, is a big deal. [...] How do I get one of these EIN US taxpayer identification numbers? EIN stands for Employer Identification Number and is your permanent number and can be used for most of your business needs (e.g. applying for business licenses, filing taxes when applicable, etc). You can apply by filling out the Form SS-4 but the easier, preferred way is online. However, I also found at IRS.gov - Online EIN: Frequently Asked Questions the following relevant tidbit: Q. Are any entity types excluded from applying for an EIN over the Internet? A. [...] If you were incorporated outside of the United States or the U.S. territories, you cannot apply for an EIN online. Please call us at (267) 941-1099 (this is not a toll free number) between the hours of 6:00 a.m. to 11:00 p.m. Eastern Time. So, I suggest you call the IRS and describe your situation: You are a European-based business (sole proprietor?) selling products to a U.S.-based client and would like to request an EIN so you can supply your client with a W-8BEN. The IRS should be able to advise you of the correct course of action. Disclaimer: I am not a lawyer. Consider seeking professional advice.", "title": "" }, { "docid": "d8b09ee2638ceb7294e3fcb01aaeee55", "text": "I realize this is a stale topic, but to anybody who may swing by looking for an answer to this question (on the recently revised W-8BEN), a foreign taxpayer can get an individual taxpayer identification number (ITIN) without being resident in the US. However, an ITIN will often not be necessary for W-8BEN purposes if you have a tax number from your local jurisdiction. Check the Form W-8BEN instructions for your specific situation, but some taxpayers will need neither a US-issued ITIN nor a foreign-issued TIN. Forming a Delaware or Nevada LLC would be expensive and generally subject to federal and state tax and filing obligations. It would also moot the need for a W-8BEN, which only applies to foreign taxpayers; the equivalent form for domestic taxpayers is Form W-9.", "title": "" } ]	[ { "docid": "e4a96168ebf9048f2eaba2e0c6ff53fc", "text": "\"As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question \"\"Does a US LLC owned by a non-resident alien have to pay US taxes\"\" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice.\"", "title": "" }, { "docid": "682533ea6458ceb27586506887e053bb", "text": "Since you're a US citizen, submitting W8-BEN was wrong. If you read the form carefully, when you signed it you certified that you are not a US citizen, which is a lie and you knew it. W9 and W8 are mutually exclusive. You're either a US person for tax purposes or you're not, you cannot be both. As a US citizen - you are a US person for tax purposes, whether you have any other citizenship or not, and whether you live in (or have ever been to) the US or not. You do need to file tax returns just like any other US citizen. If you have an aggregate of $10K or more on your bank accounts outside of the US at any given day - you need to file FBAR. FATCA forms may also be applicable, depending on your balances. From foreign banks' perspective you're a US person, with regard to their FATCA obligations. Whether or not you'll be punished is hard to tell. Whether or not you could be punished is easy to tell: you could. You knowingly broke the law by certifying that you're not a US citizen when you were. That is in addition to un-filed tax returns, FBAR, etc etc. The fact that you were born outside of the US and have never lived there is technically irrelevant. Not knowing the law is not a reasonable cause for breaking it. Get a US-licensed tax adviser (EA/CPA licensed in the US) to help you sort it out.", "title": "" }, { "docid": "e7e18992948f103e302b59bfe41d5930", "text": "Does my prior answer here to a slightly different question help at all? Are there capital gains taxes or dividend taxes if I invest in the U.S. stock market from outside of the country?", "title": "" }, { "docid": "3e29685e4fc19ff48e0634c8621dfe68", "text": "If you're waiting for Apple to send you a 1099 for the 2008 tax season, well, you shouldn't be. App Store payments are not reported to the IRS and you will not be receiving a 1099 in the mail from anyone. App Store payments are treated as sales commissions rather than royalties, according to the iTunes Royalty department of Apple. You are responsible for reporting your earnings and filing your own payments for any sums you have earned from App Store. – https://arstechnica.com/apple/2009/01/app-store-lessons-taxes-and-app-store-earnings The closest thing to sales commissions in WA state seems to be Service and Other Activities described at http://dor.wa.gov/content/FileAndPayTaxes/BeforeIFile/Def_TxClassBandO.aspx#0004. When you dig a little deeper into the tax code, WAC 458-20-224 (Service and other business activities) includes: (4) Persons engaged in any business activity, other than or in addition to those for which a specific rate is provided in chapter 82.04 RCW, are taxable under the service and other business activities classification upon gross income from such business. - http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-224 I am not a lawyer or accountant, so caveat emptor.", "title": "" }, { "docid": "71cc81f950ab08f4457fb8f094df23fa", "text": "\"Donate buttons are meaningless with regards to taxes. This is payment for something you provided, and you cannot claim that you've received a gift. Any money you receive in this way is payment for your software. Remember, for gifts - no consideration should have been provided to the donor. Anything for which a consideration was provided - cannot be a gift. In your case the consideration is the software, and it's value is the amount you were paid. Since every person can decide how much to pay you on his own - any payment is for the software, not a gift. Any money you get is taxable to you, and you cannot claim it as \"\"gifts\"\" without exposing yourself to risks of making fraudulent claims. Consult a licensed tax adviser (EA/CPA licensed in your State) for a qualified tax advice.\"", "title": "" }, { "docid": "5a285a126c4ec7591bb3e03afcd6adc6", "text": "I agree with Joe, having the money deposited to the US bank account may land you in trouble. Technically, a US business paying a foreigner must withhold 30% of the payment, unless a tax treaty says otherwise. The US business should do that based on your W8-BEN/W8-ECI form that you should have given to the business before being paid. I'm guessing, that by paying to your US bank account, you (and your American counterpart) are trying to avoid this withholding. That may cause trouble for both of you. I would suggest you talking to a professional (EA/CPA licensed in the State where the business is located) and having the situation resolved ASAP. You may not be liable for the US taxes at all, but because of incorrectly reporting the income/expense - you and the US business may end up paying way more than the $0 you otherwise would have, in penalties.", "title": "" }, { "docid": "8675e5ed784b05da168b42c094e4005b", "text": "I believe I have to pay taxes in US since it is a US broker. No, not at all. The fact that the broker is a US broker has nothing to do with your tax liabilities. You should update the banks and the broker with your change of status submitting form W8-BEN to them. Consult a tax professional proficient with Indo-US tax treaty as to what you should put in part II. The broker might withhold some of your income and remit it as taxes to the IRS based on what you put in W8-BEN and the type of income, but you can have it refunded (if it exceeds your liability) by submitting a tax return (form 1040-NR). You do have to pay tax in India, based on the Indian tax law, for your profits in the US. Consult with an Indian tax accountant on that. If I'm not mistaken, there are also currency transfer restrictions in India that you should be aware of.", "title": "" }, { "docid": "0cf658c6d4727ceda9b94342ac66bd0e", "text": "\"Earned income is what your software is doing, so it is taxable. So you can't really make it tax exempt. You can form a business and claim the revenues from that business as income and deduct expenses it costs you to earn that revenue. If you buy a server to run your software, then that is an acceptable expense to deduct from your revenues. Others can be more questionable and the best thing to do is to consult a CPA. If you are still in the testing stage and the revenues will be small then it should not matter. Worry about the important things, not if you paid the IRS a few hundred to much. Are you in a state/country that allows online gambling? In most states here in the US you are operating on shaky legal ground. Before \"\"Black Friday\"\" I used to earn a nice part-time income playing online poker.\"", "title": "" }, { "docid": "36b316dae8931cbafc1732ebfdf62123", "text": "The US has a tax treaty with Ukraine (unlike Singapore), so you should be in a similar situation to Canadians etc. who choose to use a foreign broker. You'll have to file a W8BEN to reduce withholding taxes, and they'll want identification documentation and so on, and I imagine they'll want a wire transfer to fund the account. In many places now they are requiring permission to share information with the tax authorities in your home country (you waive your privacy), but that may not be true with Ukraine, and should not be a problem in any case if you're being upfront.", "title": "" }, { "docid": "5712bdc7208402f56051e2fd71d54a61", "text": "Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.", "title": "" }, { "docid": "f4fb1e7d340adf085ae9e86ec77b6f00", "text": "I thought the line is much blurrier than that though. Say you have a company with divisions. An overseas division makes an item, sells it to another division overseas for final packaging, then it's sold domestically. The domestic division should only pay taxes on the profits they earn, and overseas on the profits from what they ship. But the company only wants to pay minimal taxes, so they set the foreign price high so that a majority of profits are made overseas. Who will argue that this isn't correct? Isn't that it? It's not foreign sales but interdivisional markup?", "title": "" }, { "docid": "a92d69a63d8683745d8154be66e811f5", "text": "Most countries tax income in its various ways, but not moving money. If this is a movement of already owned money, it is not tax-relevant. If it is a payment for services done, it is income, and it is the recipient's duty to pay taxes on it. Note that transferring large amounts of money (10k+) between countries can trigger a review, which - worst case - results in questions where it came from. The point of that is solely to verify it was legally earned money (not drug money or such). There is nothing to worry about if the money was legally earned.", "title": "" }, { "docid": "df5f23b76dff4d3d4a7efb790e61a420", "text": "For tax optimization, cash is stored mostly overseas, according to the New York Times. For Apple, everytime a song or an app is bought in Europe, Africa or Middle East, money flows to iTunes Sàrl, in Luxemburg. Royalties on patents flow internally from Apple in California to Apple in Ireland. Then profits flow to the Carribean. The problem is that cash cannot be brought back to the USA without huge taxes.", "title": "" }, { "docid": "9a1679e489500cf3c6141c20737206ed", "text": "You can't currently avoid it. The reason the legislation was introduced was to prevent the big-name developers from setting up shop in a low-VAT country and selling apps to citizens of EU countries that would normally be paying a much higher VAT. You need to register for VAT and file quarterly nil-returns so that you get that money back. It's a hassle, but probably worth it just to recoup those funds. From an article in Kotaku from late 2014: You see, in the UK we have a rather sensible exemption on VAT for businesses that earn under £81,000 a year. This allows people to run small businesses - like making and selling games in your spare time, for instance - without the administrative nightmare of registering as a business and paying VAT on sales. Unfortunately, none of the other EU member states had an exemption like this, so when the new legislation was being put together, there was no exemption factored in. That means that if someone makes even £1 from selling something digital to another person in another EU country, they now have to be VAT registered in the UK AND they have to pay tax on that sale at whatever rate the buyer’s country of residence has set. That could be 25% in Sweden, 21% in the Netherlands, and so on. [...] There’s one piece of good news: even though anyone who sells digital stuff now has to be VAT-registered in the UK, they don’t actually have to pay VAT on sales to people in the UK if they earn less than £81,000 from it. (This concession was achieved earlier this month after extensive lobbying.) But they’ll still have to submit what’s called a “nil-return”, which is essentially a tax return with nothing on it, every quarter in order to use the VAT MOSS service. That’s a lot of paperwork. Obviously Brexit may have a significant impact on all this, so the rules might change. This is the official Google Link to how they've implemented this and for which countries it affects: https://support.google.com/googleplay/android-developer/answer/138000?hl=en Due to VAT laws in the European Union (EU), Google is responsible for determining, charging, and remitting VAT for all Google Play Store digital content purchases by EU customers. Google will send VAT for EU customers' digital content purchases to the appropriate authority. You don't need to calculate and send VAT separately for EU customers. Even if you're not located in the EU, this change in VAT laws will still apply.", "title": "" }, { "docid": "6bd9d272d2c1f443beb8f7f2851e50c7", "text": "\"(Selling apps is AFAIK business, not freelancing - unless the type of app you produce is considered a freelancing subject. The tax office will give you a questionnaire and then decide). As Einzelunternehmer, you can receive the payments for the apps to the same account where your wages go. However, there are lots of online accounts that do not cost fees, so consider to receive them on a separate account so you have the business and private kind of separate (for small Einzelunternehmer, there is no legal separation between business and private money - you have full liability with your private money for the business). The local chamber of commerce can tell you everything about setting up such a business, ask them (you'll probably have to become a member there anyways). They have information as well on VAT (Umsatzsteuer, USt) which you need to declare unless you get an exemption (probably possible), and about Gewerbesteuer (the income tax of the business) etc. For the tax, you have \"\"subforms\"\" for the income tax e.g. for wages and for business income, so you just submit both with the main form. You'll get an appropriate tax number when registering the business. Social security/insurance: as long as the app selling is only a side business, the social insurance payments for your main job completely cover the side job as well. You need to make sure that your employment contract is compatible with the app business, though. A quick search indicates that there is a tax treaty between Germany and the Ukraine, Wikipedia says there are no contracts about social insurance in effect (yet).\"", "title": "" } ]	fiqa
ec349e7fbd854389ecaf7037bb1d239a	My tenant wants to pay rent through their company: Should this raise a red flag?	[ { "docid": "5d256f69d73c1c1546971bffb32a663d", "text": "\"I disagree with the other respondents. If your tenant is an individual, renting in their individual capacity, there is no reason they need your SSN. They will not be sending a 1099 to you. If your tenant is a business, then your property is not a residential property. It is at least a \"\"corporate housing\"\", and you would have noticed that the contract was signed by a company representative in the capacity of being a company representative, not an individual person. In that case, that representative would also ask you to fill a form W9, on which your tax ID should be reported. I would suggest let the tenant figure out their tax avoidance issues without you being involved.\"", "title": "" }, { "docid": "cf4a17e7e53a23ab14726c1951d8ddf1", "text": "The company that's apparently going to pay this rent wants to treat it as a business expense. They are asking for your SSN because they expect to issue a 1099-MISC. (They probably gave you a Form W-9? It's not mandatory but it's common to request a taxpayer ID on this form.) There are a couple of issues at play here:", "title": "" }, { "docid": "7c4fb00e6b3071eec30e978b68f7d54e", "text": "Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN.", "title": "" } ]	[ { "docid": "cfd81576bb7bf35d9fa0c764680262f3", "text": "\"No. The full text of the Landlord-Tenant Act (specifically, section 554.614 of Act 348 of the year 1972) makes no mention of this. Searching the law for \"\"interest\"\" doesn't yield anything of interest (pardon the pun). Specifically, section 554.604 of the same law states that: (1) The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state and acceptable to the attorney general to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00. The attorney general may find a bond unacceptable based only upon reasonable criteria relating to the sufficiency of the bond, and shall notify the landlord in writing of his reasons for the unacceptability of the bond. (2) The bond shall be for the benefit of persons making security deposits with the landlord. A person for whose benefit the bond is written or his legal representative may bring an action in the district, common pleas or municipal court where the landlord resides or does business for collection on the bond. While it does sound like the landlord is required to deposit the money in a bank or other secured form, e.g. the Secretary of State, he/she isn't required to place it in an account that will earn interest.\"", "title": "" }, { "docid": "5143aeb0b0a00bf3eeba177754bca3aa", "text": "\"Without the specifics of the contract, as well as the specifics of the country/state/city you're moving to, it's hard to say what's legal. But this also isn't law.se, so I'll answer this from the point of view of personal finance, and what you can/should do as next steps. Whenever paying an application fee or a deposit, you need to ensure that you have in writing exactly what you're applying for or putting a deposit in for. Whether this is an apartment, a car, or a loan, before any money changes hands, you need to get in writing exactly what you're putting that money to. So for a car, you'd want to have the complete specifications - make, model, year, color, extra packages, and any relevant loan information if applicable. You wouldn't just hand a dealer $2000 for \"\"a Toyota Camry\"\", you'd make sure it was specified which one, in writing, as well as the total you're expecting to pay. Same for an apartment: you should have, in writing (email is fine) the specific unit you are putting a deposit for, and the specific rate you'll be paying, and the length of time the lease is for. This is to avoid a common tactic: bait and switch, which is what it looks like you've run into. A company puts forth a \"\"nice\"\" model, everything looks good, you get far enough in that it seems like you're locked in - and then it turns out you're really getting a less nice model that's not as ideal as whatever you signed up for. Now if you want to get what you originally signed up for you need to pay extra - presumably \"\"something was wrong in the original ad\"\", or something like that. And all you can hear in the background is Darth Vader... \"\"I am altering the deal. Pray I don't alter it any further.\"\" So; what do you do when you've been bait-and-switched? The best thing to do is typically to walk away. Try to get your application fee back; you may or may not be able to, but it's worth a shot, and even if you cannot, walk away anyway. Someone who is going to bait-and-switch on you is probably not going to be a good landlord; my guess is that rent is going to keep going up beyond the level of the market, and you probably can kiss your security deposit goodbye. Second, if walking away isn't practical for whatever reason, you can find out what the local laws are. Some locations (though very few, sadly) require advertised prices to be accurate; particularly the fact that they re-advertised the unit again for the same rate suggests they are falling afoul of that. You can ask around, search the internet, or best yet talk to a lawyer who specializes in this sort of thing; some of them will be willing to at least answer a few questions for free (hoping to score your business for an easy, profitable lawsuit). Be aware that it's not exactly a good situation to be in, to be suing your landlord; second only to suing your employer, in my opinion, in terms of bad things to do while hoping to continue the relationship. Find an alternative as soon as you can if you go this route. In the future, pay a lot of attention to detail when making application fees. Often the application fee is needed before you get into too much detail - but pick a location that has reasonable application fees, and no extras. For example, in my area, it's typical to pay a $25 application fee, nonrefundable, to do the credit check and background check, and a refundable $100-$200 deposit to hold the unit while doing that; a place that asks for a non-refundable deposit is somewhere I'd simply not apply at all.\"", "title": "" }, { "docid": "9b5ad6c50ddd6f92617ff2bf39a2fb69", "text": "That may become complicated depending on the State laws. In some States (California for example), LLCs are taxed on gross receipts, so you'll be paying taxes on paying money to yourself. In other States this would be a no-op since the LLC is disregarded. So you need to check your State law. I assume the LLC is not taxed as a corporation since that would be really stupid of course, but if it is then it adds the complexity of the Federal taxes on top as well (corporate entity will pay taxes on your rent, and you'll pay taxes on your dividends to get the money back). The best option would be to take that property out of the LLC (since there's no point in it anyway, if you're the tenant).", "title": "" }, { "docid": "1569f93563ab208396b84015c60d687d", "text": "* Absolutely agree with /u/IsAnAlpaca * You /must/ not agree to this without seeing his balance sheet. * That means assets and liabilities, but also ask for the last 12 months' cash flow * Inability or unwillingness to provide any of those things is a HUGE no-go red flag.", "title": "" }, { "docid": "fab868581152d6464183e52963bacff7", "text": "\"To the best of my knowledge, in California there's no such thing as registering a place as a business. There's zoning (residential/commercial/mixed/etc), and there's \"\"a business registered at a place\"\". But there's no \"\"place registered as a business\"\". So you better clarify what it is that you think your landlord did. It may be that the place is used for short term rentals, in which case the landlord may have to have registered a business of short term rentals there, depending on the local municipal or county rules. Specifically regarding the deposit, however, there's a very clear treatment in the California law. The landlord must provide itemized receipt for the amounts out of the deposit that were used, and the prices should be reasonable and based on the actual charges by the actual vendors. If you didn't get such a receipt, or the amounts are bogus and unsubstantiated - you have protection under the CA law.\"", "title": "" }, { "docid": "7f8fdfaf770de8745e3b0fcaa705afcc", "text": "\"This arrangement is a scam to get around certain tax and benefits laws, both State and Federal. I know they can't get away with this with a person-as-contractor, but this \"\"he's not a contractor, he's a business owner\"\" may move it into a gray area. (I used to know this stuff cold, but I've been retired for a while.) The fact that they asked you to do this is at all is, IMNSHO, a Red Flag®. They think that this way they won't be paying 1/2 your FICA, your Workman's Comp, health insurance, overtime, sick leave or vacation time ... you will. A somewhat simplistic rule of thumb for setting contracting rates is to take your targeted annual salary as a full-time, full-benefits employee and double it. So $50,000 becomes $100,000 a year; $25/hour becomes $50/hour. You can tell them that driving to their workplace from your company's location is now a \"\"site visit\"\" and charge them your hourly rate for the one-way commute time. You could also tell them that your company charges 150% for hours worked over 40 hours/week, plus 150% on Saturdays and 200% on Sundays. Your company may also have a minimum 30 days notice of termination with a penalty kicker. Get it all in writing and signed by someone who has the authority to sign it. Also, Get A Lawyer. The most expensive contracts I've ever signed were ones I thought I was smart enough to draw up myself.\"", "title": "" }, { "docid": "a40bb98efec6409b70151dd126776cff", "text": "I'm assuming this is the US. Is this illegal? Are we likely to be caught? What could happen if caught? If you sign an occupancy affidavit at closing that says you intend to move in within 60-days, with no intention of doing so, then you'll be committing fraud, specifically mortgage/occupancy fraud, a federal crime with potential for imprisonment and hefty fines. In general, moving in late is not something that's likely to be noticed, if the lender is getting their money then they probably don't care. Renting it out prior to moving in seems much riskier, especially if you live in a city/state that requires rental licensing, or are depending on rental income to carry the mortgage. No idea how frequently people are caught/punished for this type of fraud, but it hardly seems worth finding out.", "title": "" }, { "docid": "7b73465541b505fd29eecafb445ece16", "text": "The money your tenants spent on repairs and maintenance that is otherwise your responsibility is considered rent paid to you (and deductible to the extent you can deduct maintenance expenses, provided you have documentation etc etc). The money your tenants spent on utilities, which is their responsibility anyway, is not considered rent paid to you. Since in your question you seem to be mixing both together, it is hard to accept a claim that the additional $300 spent on utilities and maintenance is enough to bring the rent to the FMV level. Especially since the transaction is between related persons, it may bring additional scrutiny of the IRS.", "title": "" }, { "docid": "b5adc69cca3d027f18083e62afca7523", "text": "From the apartment owners perspective what was the purpose of $300? They promised they wouldn't rent it to somebody before you had a chance to see it. But lets say you did see it, and decided you didn't like the view. Would they have to give the money back? if so, why would they promise not to rent it if somebody showed up first? I would have made it clear, as the owner, what the money was for. It was a $300 fee to delay rental. You would have essentially bought x number of days of delay. You could view it as a mini-short-term rental. Of course there should have been paperwork involved. There should have been been a receipt that at least mentioned the amount of money involved. You may need to pay the amount owed, and may need to determine if you want to sue in small claims court. Of course your agent may have some liability based on your contract with them and any paperwork they signed when the money was sent to the owner. The fact that the bank sided with you doesn't mean the courts will.", "title": "" }, { "docid": "669e68311bbc565174483b8e4fc5519f", "text": "\"I'd say your tenant is out $750, not you. How you handle it is totally personal preference. If you want to be the super-nice landlord and eat the loss this one time, then you might gain some karma and hopefully they'll be awesome tenants for the remainder of their stay. Are they the kind of tenants you want to be nice to because they deserve it? You (and she) have no way to prove she ever actually tried to pay you. Sound like she is learning a $750 lesson. \"\"Don't leave cash in a mailbox, and always get a receipt for rent paid.\"\" Your insurance company would likely not pay out as it'd be below a typical deductible and you can't really prove the money ever existed. You'd be better off just taking the loss. Think about it this way: How would you expect a bank or utility company to respond to this situation? \"\"Yeah, I left my mortgage as a cash-filled envelope on your doorstep. You didn't get it? I told you I'd do it!\"\" Guess who's paying double mortgage and a late fee? You're not stuck with option 1, you're choosing to do it. She could refuse and fight you on it, which might not be worth the headache and potential small-claims court. But you're entitled to receive the rent and she is obligated to pay it. And \"\"paying it\"\" means making sure you actually receive it.\"", "title": "" }, { "docid": "dcfb94807ecbf6a57b0435b1d135e4c6", "text": "\"Assuming the renter was properly vetted, the only question worth asking is \"\"what has changed in your life?\"\" Perhaps one of the earners has lost a job, or has moved out because a couple has broken up. If nothing has changed but they just don't feel like paying you, start the eviction process. If something has changed and you assess that it's temporary (I lent my brother money and he didn't pay me back - I'll be behind for a few months but I will catch up; my employer went out of business and didn't pay me for the last two weeks - I have a new job already and am waiting for my first paycheque) then perhaps you are willing to wait. If something has changed and it seems pretty permanent then you might reluctantly start the process. Depending on how long it takes where you live, the renter might get things under control before you finish.\"", "title": "" }, { "docid": "cc944b121bd06b9a75a12eae2177827d", "text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5", "title": "" }, { "docid": "d7c29e9c4ebb6e172ec8547493df051c", "text": "\"If you pay her rent, how do you differ from a tenant in the eyes of the law? I ask this to show that you are in a business relationship first and foremost. If you don't want to file jointly, there is nothing compelling about your situation to force it. (Grant you, in most countries, there is a benefit to filing jointly) but here, I would argue it would be difficult to make the case. There are, to the best of my knowledge, no laws barring opposite sex landlord-tenant rental situations. Furthermore, there are no laws barring romantic relationships amongst landlords and tenants. Indeed, you would need to prove your relationship in some fashion for it to even be considered. In establishing a date of separation from my soon-to-be-ex-wife, for example, I merely needed to prove that we were not \"\"presenting ourselves as husband and wife.\"\" Once I showed that we didn't sit together at church and that she was attending parties I wasn't, that was sufficient. Proving you are in a relationship is actually a lot harder than proving you're not.\"", "title": "" }, { "docid": "2d3841fc3f6ff1124683964bd1c14213", "text": "Because you're not married, its a partnership agreement, and unless there's a written contract, either the two of you agree on how to handle the home, or it's off to court you go. If you were both supposed to pay for the home, and he failed to for a a while, that would put him in breach of contract which I would think gives you a good position in court. On the other hand, if you are at all concerned about your safety from this louse, remember, he knows exactly where the house is.", "title": "" }, { "docid": "a2b34353f037de897b420fd6ac257afe", "text": "\"Should you negotiate? Yes, what harm can it possibly do? The landlord is unlikely to come back and say \"\"Because you tried to negotiate, I'm putting the rent up by 10% instead.\"\", or to evict a paying tenant merely because they tried to negotiate. Is the proposed rent increase \"\"normal\"\"? Yes. Landlords will generally try to get as high a rent as they can.\"", "title": "" } ]	fiqa
b079ca5fde42796315e34c9b43893703	Tools for comparing costs between different healthcare providers?	[ { "docid": "10dad58de53089d15cf755545b887fc9", "text": "\"There really isn't any good ways that I'm aware of. (The exception is in New York or California, where hospitals must post prices.) The law sets price floors on many procedures by setting Medicare and Medicaid reimbursement rates. As a result, the \"\"list price\"\" for a given procedure is dramatically inflated, and various health insurers negotiate rates somewhere in the middle. I'd recommend talking to the business offices or financial counselors at medical groups that you do business with. Ask about \"\"self pay discounts\"\" or other programs appropriate for folks in your position.\"", "title": "" }, { "docid": "f185953aed490ec9c110be633b433b9c", "text": "When I had a high-deductible healthcare plan, I used http://www.ehealthinsurance.com/ to do comparisons among the plans. As far as comparing the costs of specific procedures across providers, I'm not aware of any good ways either.", "title": "" } ]	[ { "docid": "263ebfef8a5f308be4a90c24ac0a5afd", "text": "A competent Indian VA cost about 4-6 an hour. Realistically speaking, with that budget, nobody is going to be on the phone 8 hours a day 5 days a week. But small tasks and data entry could work. Western VAs are a much pricer but they you can find some for 200 a month. I have a biz that offers similar services, but the price you are looking for is a bit low, but I can work something out if your interested. Otherwise, it would be best to search for NYC based VA companies that have a team of indians working. But what you get is a luck of the draw.", "title": "" }, { "docid": "318d1517ba7429f4cad193d5cae9c59d", "text": "If you are disputing the size of the charge for specific services, like you think that they overcharged for lab work, you can try disputing it with the business office staff at the doctor's office. If, on the other hand, you just think that the overall bill is too expensive then you really only have one option. You can ask if they will reduce the bill for you. Most hospitals and clinics I've dealt with have programs set up for this, but you usually access them by filling out paperwork demonstrating financial hardship (along with supporting documents). It never hurts to ask. But with the services already rendered the only person with an interest in reducing the bill is you. The reduction, if any, will probably depend on what the clinic thinks your ability to pay is compared with the cost to them of pursuing you for payment, as well as the amount of funding they have for bill reduction. When I worked in the financial services office of a hospital a $400 bill would not even have been reviewed for discounting-- the balance would be too low to devote staff time to reviewing. It's frustrating, and even asking in advance might not have given you accurate (or any!) information on what the cost of the visit would be, so your ability to shop around is limited. Unfortunately, that doesn't give you any additional options in this case.", "title": "" }, { "docid": "9b677bf9fd32eb6bc39174c40ce70a5b", "text": "If the hospital is run like hospitals in the US it can take a long time just to determine the bill. The hospital, Emergency room, ER doctors, surgeons, anesthesiologists, X-Ray department, pharmacy and laboratory are considered separate billing centers. It can take a while to determine the charges for each section. Is there an insurance company involved? When there is one involved it can take weeks or months before the hospital determines what the individual owes. The co-pays, coverages, and limits can be very confusing. In my experience it can take a few months before the final amount is known. You may want to call the hospital to determine the status of the bills.", "title": "" }, { "docid": "ccde069c7755ed62ee56a93b5a2fb5fd", "text": "I would suggest that you try ClearCheckbook. It is kind of like Mint, but you can add and remove things (graphs, features, modules) to make it as simple or diverse as you need it to be. It should be a workable solution for simply tracking both income and expenses, yet it will also provide extra features as needed. There is a free option as well as a paid option with added features. I have not used ClearCheckbook before, but according to their features page it looks like you may have to upgrade to the paid option if you want to have complete tagging/custom field flexibility.", "title": "" }, { "docid": "2e73af8ed93d1669a723747bf0477a5f", "text": "\"Yes, you've successfully proved that I think NPV and marginal utility are the same thing. Let me state this explicitly. You didn't hesitate to throw out tools that don't agree with your prescriptions. You invoked the false premise that indivuduals manually and exhaustively calculate NPV of possible decisions. Instead of refuting the points of the argument you resorted to personal attacks. That's fine, I've already lowered my expectations after reading your first comment. If NPV should be thrown out because you claim noone explictly uses it to guide their decisions what does that say about marginal utility? Why should 1 tool be thrown out but the other kept? Essentially you are saying we should keep all of the tools that confirm your absurd assertions and throw out the tools that may cast doubt on them. But hey, maybe I should \"\"stop acting like I know what I'm talking about\"\"\"", "title": "" }, { "docid": "57e1115d5f30efd13813bb51c89ac504", "text": "Hey, I was thinking back to that X-Ray you got done at the hospital, that you said was cheaper than 90% of the population. I am wondering if maybe that hospital wasn't one of the many that qualify for DSH reimbursement payments. What could have happened is that they saw that you are uninsured, and made a decision that they would only charge you for the portion that they didn't think Medicare / Medicaid would reimburse. If that happened, it wouldn't even show up on your credit report, as the hospital is the one that would file a credit claim. Likely, if they have to go through this a lot, they wouldn't even waste time filing a credit claim, they would just go after a reimbursement through Medicare / Medicaid. And thus, to you, it would just look like a very small bill, but in reality it would only represent a smaller portion of the true bill. I would also wonder, if they do a lot of these, if they aren't also one of the hospitals that article I linked to showed was super-inflating the prices of uninsured in the hopes of getting a larger portion reimbursed.", "title": "" }, { "docid": "7539b9988f0a814c141ac2ad49451470", "text": "Keep in mind there are some examples of combination medications that have improved outcomes. I'm thinking specifically of HIV meds, HEP C medications, and other combo meds for infectious disease. Truvada for example. It's one pill. Emtricitibine and tenofovir. Taken alone emtricitibine and tenofovir have complex and tedious pill regimens (like most other HIV meds regimens) but for patients to be able to take one pill, once a day has made their compliance with the med regimen much better. Lower viral load, higher cd4 counts, and improved management of their HIV. I'm not saying the absurd price hikes of these other meds are warranted. They're not. But when dealing with public health issues, and infectious disease in a population that has a difficult time being compliant with their meds, combo meds are worth the cost.", "title": "" }, { "docid": "f0ead864c41156712a3fe4d3e8335176", "text": "Determining the value of a service is an art, not a science. It depends on what others are charging, the quality and complexity and annoyance factor of the work, availability of people with the skill to do the work, etc. This topic can and does fill books, plural, and can't be answered fully here. As a customer, the answer is to get multiple quotes, understand how they differ, and pick the one you are most comfortable with. Last job I priced, I got three quotes, discarded the lowball who didn't know PT from cedar, discarded the one with the luxury price, and went with the guy in the middle who did adequate (not great) work for a tolerable fee. For a different kind of job I might have decided otherwise, or chucked all three and looked for more quotes from respected firms.", "title": "" }, { "docid": "2b0e332ffa8a284d5b2e0173613b0944", "text": "CrimsonX did a great job highlighting the primary pros and cons of HSAs, so I won't go into detail there. However, I did want to point out another pro - HSAs are (or can be) easy to manage. You said: Is this a better way to approach health care costs instead of itemizing health care expenses on yearly federal taxes? I'm not sure which company you are looking at establishing your HSA with, but with mine I have a debit card that I use when paying for medical care and then at the end of the year I get a 1099-SA that provides the amount of money spent on qualified purchases that calendar year. Yes, there are a few extra boxes I need to fill in for my 1040 come tax time, but I don't need to itemize my healthcare costs over the year. It really is pretty simple and straightforward. Also, one con that is worth noting is that you become much more sensitive to healthcare costs due to the high deductible healthcare plan an HSA requires. For example, in all the years we've had an HSA we've not yet met our deductible, which means we pay out of pocket for any non-routine doctor visits. (The health insurer pays 100% of routine visits, like my wife's annual, well-baby check ups for the little one, and so on.) So, when you're feeling really sick and think a doctor's visit would be warranted, you have to make a decision: After being faced with this decision a time or two you will start to envy those who have just a $20 copay! Of course, that's just an emotional con. Each year I run the numbers on how much we spent per year on out of pocket plus premiums and compare it to what it would cost in premiums for an HMO-type plan, and the HSA plan always comes ahead. (In part because we are a pretty healthy family and I work for myself so do not get to enjoy group discount rates.) But I thought it worth mentioning because there are certainly times when I know I need to see a doctor or specialist and I cringe because I know I am going to be slapped with a big bill in the not too distant future!", "title": "" }, { "docid": "f5bec49fc704181aa03613c3ead464a2", "text": "\"Lets put glib non-answers into perspective. - There is not a single number: how many wounds. Then, dividing the total per this value, you'd know a bit more. - They are generous in a lot of other percentages which, of course, mean crap without this. 5.8% of what? Is that 5 people shot, or 50000? - The % of people without insurance is interesting, but a far more interesting value would be: X of the value is uninsured, in Y of the wounds. Then you'd know whether uninsured wounds are costlier on average. - There is a 20 to 1 differential in 5000 to 100 000. Doesn't really tell us either average or median. - What cost is accounted? Cost first billed? Values actually paid? Accounting cost of the actual care? Same price measure for the ones insured, and the ones uninsured? A standardized cost per types of wounds? If an hospital charges 100000 for the same another asks 20000 for, its meaningless. Societal cost is one thing, the billing fantasies of the american health system another. If you fail to understand what is contained in what you read, and then again fail to understand when it is pointed out, then you do waste a lot of resources. For those that CAN read, you can see how a full article can be read and published that contains no real information or original thought or research about a problem, being useless to define it. Its a \"\"feel this\"\" piece, knowledge is optional.\"", "title": "" }, { "docid": "99e521f85fb70eeed53177745a07f388", "text": "I'm not disputing that. I just said in answer to the guy pointing out that indonesian people earn less that this price might be higher than what the locals pay. Often hospitals will have higher prices for foreigners with insurance etc. So I was actually strengthening your point.", "title": "" }, { "docid": "24a78ce01e579101c6b2cf6529438d5b", "text": "It is meant to be a Valuation Model. So the data I have collected are for the Addressable Markets in potential countries( i.e. population currently affected by the disease and potential growth of the disease in the future). Possible competition for the drug. And most importantly the expenses of the drug (how much it cost to create the drug and clinical trails etc.) I need to create a Revenue chart and the Pricing for the drug as well. What I am looking for is someone who is familiar with creating a valuation model or has a template and can give me advice on how to structure this. thanks.", "title": "" }, { "docid": "64c4ccde4ee50cfa5b1328ff7781c804", "text": "\"I had a similar issue take place at a hospital when the repeatedly billed the \"\"wrong me\"\" -- a stale insurance record left behind from when I was a dependent on my parent's insurance a decade earlier. They ended up billing me for anesthesia when I had a major surgery (everything else was billed to the correct insurance.) The outsourced billing people were pretty unhelpful (not usually the case with hospitals), so I became the squeaky wheel. I sent certified letters, had my priest rattle the cage (it was a Catholic hospital) and eventually talked myself into a meeting with the VP of Finance, who started paying attention when the incompetence of his folks became apparent. Total cost: $0 + my time.\"", "title": "" }, { "docid": "6d8b5d2d18ca80beb458fb984738ce57", "text": "\"Whoa whoa whoa, let's not twist that data and make an assertion that it doesn't support. Yes, medical inflation has outpaced the CPI for ages, but when you disaggregate spending into Medicare (US single-payer) and private insurers, [Medicare is able to better contain costs](http://content.healthaffairs.org/content/22/2/230.full) (my hypothesis: likely due to its ability to leverage its scale and keep costs low, while private insurers are fragmented against strong provider networks). But wait! you're thinking: shouldn't market forces keep insurance outlays low? It's Econ 101, right? Theoretically they should, but this ignores the industrial structure of healthcare providers and assumes perfect competition that doesn't exist. Typically, providers (doctors groups, hospitals, etc) are [highly localized and able to exercise significant market power in a community](http://content.healthaffairs.org/content/23/2/8.full) relative to several insurance plans who are competing to contract that provider \"\"in-network.\"\" For example, when Aetna, Cigna, and BCBS go up against, hypothetically, Cedars-Sinai to negotiate payment rates, Cedars has the ability to obtain high reimbursement rates because the three insurers have to have that provider in-network to remain competitive. Ironically, the less competition on the insurer side in that market, the better reimbursement rates would be observed since the sole insurer would capture a large fraction of patients in the geographic area served and could use that volume to negotiate better rates. Finally, there's the overhead issue. Medicare has lower overhead expenses than private insurers do (again, my guess: greater economies of scale and lower advertising and marketing costs, coupled with no profit motive). [Even health insureres themselves agree (.pdf warning)](http://www.cahi.org/cahi_contents/resources/pdf/CAHI_Medicare_Admin_Final_Publication.pdf) that Medicare has lower overhead costs, and that includes some questionable addition of what the authors claim are hidden Medicare expenses. I'm inclined to believe that a single-payer is probably more efficient and cheaper than a fragmented private insurance market. That said, I also find some sympathy to the argument that maintaining a robust private insurance market may spur innovation on payor innovation (e.g., increased participation in wellness programs for enrollees, or increasing the likelihood that patients be more sensitive to costs and benefits when seeking care). After all, countries like Germany and Switzerland are able to maintain a private insurance market while ensuring nearly universal coverage. Either way, though, arguing that health inflation alone makes single payer systems \"\"mathematicaly unsustainable\"\" isn't a strong argument, since private insurers are currently doing worse on cost containment.\"", "title": "" }, { "docid": "3986b8ad3cefc7cfe6ef7d44ea9dd44b", "text": "On topic of Healthcare needs, I think it depend on individual. For example, my employer's dental plan offer PPO $34 per month and DMO $12 per month. I have my favor dentist that I have been going for years. He only accept PPO. I already had most of my dental works done so I only use him for teeth clean. He charge $100 without insurance and free with insurance. I can only use my insurance for teeth clean twice a year so $34x12 = $408 vs $200. If I go with DMO, I won't get to see my doctor and since I get my teeth once a year why not just save that money and go to my favor doctor instead the DMO doctors and if I need major dental works done which isn't immediate. I can go to Taiwan for dental works that is way cheaper than U.S. I think if you're a healthy young man/women. You should put more money toward your retirement and only keep insurance for emergency. You can do a medical tourism mentioned in 60 minutes that can be more cost effective and those doctors are U.S. trained. For older folks, a full Health care insurance is more needed than retirement. Just my two cents.", "title": "" } ]	fiqa
b64683f2e01788d90f6dd6137c938f5e	How are investment funding valued when invested in a company before it goes public?	[ { "docid": "87b5c999ab6c956258894265f2a2b654", "text": "This is a question of how does someone value a business. Typically, it is some function of how much the company owns, how much the company owes, how risky is the company's business, and how much the company makes in profit. For example if a company (or investment) make $100/year, every year no matter what, how much would you pay for that? If you pay $1,000 you'll make 10% each year on your investment. Is that a good enough return? If you think the risk of the company requires a 20% payoff, you shouldn't pay more than $500 for the company.", "title": "" } ]	[ { "docid": "b77ce1eda52bbf046d67670793dc2e8d", "text": "You have a lot of different questions in your post - I am only responding to the request for how to value the ESPP. When valuing an ESPP, don't think about what you might sell the shares for in the future, think about what the market would charge you for that option today. In general, an option is worth much less than the underlying share itself. For the simplest example, assume you work at a public company, and your exercise price for your options is $.30, and you can only exercise those options until the end of today, and the cost of the shares on the public stock exchange is also $.30. You have the same 'strike price' as everyone else in the market, making your option worth nothing. In truth, holding that right to a specific strike price into the future does give you value, because it means you can realize the upside in share price gains, without risking any money on share losses. So, how do you value the options? If it's a public company with an active options market, you can easily compare your $.30 strike price with the value of call options in the market that have a $.30 strike price. That becomes the value to you of the option (caveat: it is unlikely you can find an exact match for the terms of your vesting period, but you should be able to find a good starting point). If it's a public company without an active options market, you will have to do a bit of estimation. If a current share is worth $.25 (so, close to your strike price), then your option is worth a little bit, but not much. Compare other shares in your industry / company size to get examples of the relative value between an option and a share. If the current share price is worth $.35, then your option is worth about $.05 [the $.05 profit you could get by immediately exercising and selling, plus a bit more for an option on a share that you can't buy in the open market]. If it's a private company, then you need to be very clear on how shares are to be valued, and what methods you have available to sell back to the company / other individuals. You can then consider as per above, how to value the option for a share, vs the share itself. Without a clear way to sell your shares of a private company [ideally through a sale directly back to the company that you are able to force them to agree on; ie: the company will buyback shares at 5x Net income for the previous year, or something like that], then the value of a small number of shares is very nebulous. There is an extremely limited market for shares of private companies, if you don't own enough to exert control. In your case, because the valuation appears to be $2/share [be sure that these are the same share classes you have the option to buy], your option would be worth a little more than $1.70, if you didn't have to wait 4 years to exercise it. This would be total compensation of about $10k, if you were able to exercise today. Many people don't end up working for an early job in their career for 4 years, so you need to consider whether how much that will reduce the value of the ESPP for you personally. Compared with salary of 90k, 10k worth of stock in 4 years may not be a heavy motivating compensation consideration. Note also that because the company is not public, the valuation of $2/share should be taken with a grain of salt.", "title": "" }, { "docid": "5467dcadbea676578ee66dca23e951b4", "text": "\"I think it's easiest to illustrate it with an example... if you've already read any of the definitions out there, then you know what it means, but just don't understand what it means. So, we have an ice cream shop. We started it as partners, and now you and I each own 50% of the company. It's doing so well that we decide to take it public. That means that we will be giving up some of our ownership in return for a chance to own a smaller portion of a bigger thing. With the money that we raise from selling stocks, we're going to open up two more stores. So, without getting into too much of the nitty gritty accounting that would turn this into a valuation question, let's say we are going to put 30% of the company up for sale with these stocks, leaving you and me with 35% each. We file with the SEC saying we're splitting up the company ownership with 100,000 shares, and so you and I each have 35,000 shares and we sell 30,000 to investors. Then, and this depends on the state in the US where you're registering your publicly traded corporation, those shares must be assigned a par value that a shareholder can redeem the shares at. Many corporations will use $1 or 10 cents or something nominal. And we go and find investors who will actually pay us $5 per share for our ice cream shop business. We receive $150,000 in new capital. But when we record that in our accounting, $5 in total capital per share was contributed by investors to the business and is recorded as shareholder's equity. $1 per share (totalling $30,000) goes towards actual shares outstanding, and $4 per share (totalling $120,000) goes towards capital surplus. These amounts will not change unless we issue new stocks. The share prices on the open market can fluctuate, but we rarely would adjust these. Edit: I couldn't see the table before. DumbCoder has already pointed out the equation Capital Surplus = [(Stock Par Value) + (Premium Per Share)] * (Number of Shares) Based on my example, it's easy to deduce what happened in the case you've given in the table. In 2009 your company XYZ had outstanding Common Stock issued for $4,652. That's probably (a) in thousands, and (b) at a par value of $1 per share. On those assumptions we can say that the company has 4,652,000 shares outstanding for Year End 2009. Then, if we guess that's the outstanding shares, we can also calculate the implicit average premium per share: 90,946,000 ÷ 4,652,000 == $19.52. Note that this is the average premium per share, because we don't know when the different stocks were issued at, and it may be that the premiums that investors paid were different. Frankly, we don't care. So clearly since \"\"Common Stock\"\" in 2010 is up to $9,303 it means that the company released more stock. Someone else can chime in on whether that means it was specifically a stock split or some other mechanism... it doesn't matter. For understanding this you just need to know that the company put more stock into the marketplace... 9,303 - 4,652 == 4,651(,000) more shares to be exact. With the mechanics of rounding to the thousands, I would guess this was a stock split. Now. What you can also see is that the Capital Surplus also increased. 232,801 - 90,946 == 141,855. The 4,651,000 shares were issued into the market at an average premium of 141,855 ÷ 4,651 == $30.50. So investors probably paid (or were given by the company) an average of $31.50 at this split. Then, in 2011 the company had another small adjustment to its shares outstanding. (The Common Stock went up). And there was a corresponding increase in its Capital Surplus. Without details around the actual stock volumes, it's hard to get more exact. You're also only giving us a portion of the Balance Sheet for your company, so it's hard to go into too much more detail. Hopefully this answers your question though.\"", "title": "" }, { "docid": "235d9911f024b3047fa915c0789caa18", "text": "There are different ways to determine the value of a company: When an entrepreneur starts a new company himself and owns 100% of the company, the Fair Market value is unknown. He has put his own money into the company, so it has a high Investment value to him, meaning he has a lot at stake in the company. The Asset value is probably less than the Investment value, meaning if he closed the company, he would lose some of the money he invested. Now, using your example, a Venture Capitalist comes along and takes a look at the company. She believes that the company has a great future potential to make money, which means that she believes that the Intrinsic value is very high. She decides to invest $1 Million in the company for a 10% stake, and the founder agrees. The Fair Market value of the company at that moment is $10 Million. The VC believes that the Intrinsic value of the company is more than $10 Million and that she is making a good investment. The Asset value of the company just went up by $1 Million. To answer your question, the $1 Million is not the founder's to spend on a new house. It is the company's money. However, the founder owns 90% of the company. The new capital will allow the company to buy whatever assets the company needs to meet the potential that the founder and the VC see in it, and make the company grow and earn money for the two investors. A crooked founder could, theoretically, close down the company immediately and pocket 90% of the new cash, but there are certainly legal protections in the contract they signed when the investment was made that prevent him from doing that.", "title": "" }, { "docid": "821e3eecf2857fc1405d1f4b33e8d359", "text": "The value of a company is, simplified, the sum of the value of the equity and the value of the debt. There are some other things to add/subtract to that, but just think about those for now. You could also say the value of a company is the value of its assets, or more precisely the value of the net cash flows those assets will generate in the future. So let's say you want to start a company, so you want to buy some assets. Maybe you want to buy a $200 asset. Well, you only have $100, so you take out a loan (debt) for $100 for the remainder. You buy the asset and start generating income. Let's say after a month you get bored and decide to sell the company. Let's assume the value of the assets hasn't changed. Your equity is worth $100, and you find a buyer who is willing to pay $100 for your company. Great! Right? Well there's still the $100 loan you owe, so you have to pay that back. And suddenly you now have $0. So in fact, you should have negotiated $200 with the buyer, because that's what the assets are actually worth. Then you can pay back the loan and still have the $100 in equity you deserve. (Alternatively, you could have negotiated the buyer to assume responsibility for the loan; same outcome for you.) Did that help?", "title": "" }, { "docid": "c4bef758a078cff5aded80dbc6fc24be", "text": "\"Matt explains the study numbers in his answer, but those are the valuation of the brand, not the value of the company or how \"\"rich\"\" the company is. Presuming that you're asking the value of the company, the usual way for a publicly traded company to be valued is by the market capitalization (1). Market capitalization is a fairly simple measure, basically the total value of all the shares of stock in that company. You can find the market cap for any publicly traded company on any of the usual finance sites like Google Finance or Yahoo Finance. If by rich you mean the total value of assets (assets being all property, including cash, real property, equipment, and licenses) a company owns, that information is included in a publicly traded company's quarterly SEC filing and investor releases, but isn't usually listed on the popular finance sites. An example can be seen at Duke Energy's Investor Relation Site (the same information can be found for all companies on EDGAR, the SEC's search tool). If you open the most recent 8-K (quarterly filing), and go to page 8, you can see that they have $33B+ in assets, and a high level breakdown of those. Note that the numbers are given in millions of dollars For a privately held company this information may or may not be available and you'd have to track it down if it is available. I picked Duke Energy because it's the first thing that popped into my mind. I have no affiliation with Duke, and I don't directly own any of their stock.\"", "title": "" }, { "docid": "c214d560ed54ea4495c8526b2894adf6", "text": "The worth of a share of stocks may be defined as the present cash value of all future dividends and liquidations associated therewith. Without a crystal ball, such worth may generally only be determined retrospectively, but even though it's generally not possible to know the precise worth of a stock in time for such information to be useful, it has a level of worth which is absolute and not--unlikely market price--is generally unaffected by people buying and selling the stock (except insofar as activities in company stock affect a company's ability to do business). If a particular share of stock is worth $10 by the above measure, but Joe sells it to Larry for $8, that means Joe gives Larry $2. If Larry sells it to Fred $12, Fred gives Larry $2. The only way Fred can come out ahead is if he finds someone else to give him $2 or more. If Fred can sell it to Adam for $13, then Adam will give Fred $3, leaving Fred $1 better off than he would be if he hadn't bought the stock, but Adam will be $3 worse off. The key point is that if you sell something for less than it's worth, or buy something for more that it's worth, you give money away. You might be able to convince other people to give you money in the same way you gave someone else money, but fundamentally the money has been given away, and it's not coming back.", "title": "" }, { "docid": "34bbcb90aefee6b1b90f85ab10a1b6d5", "text": "While there are many very good and detailed answers to this question, there is one key term from finance that none of them used and that is Net Present Value. While this is a term generally associate with debt and assets, it also can be applied to the valuation models of a company's share price. The price of the share of a stock in a company represents the Net Present Value of all future cash flows of that company divided by the total number of shares outstanding. This is also the reason behind why the payment of dividends will cause the share price valuation to be less than its valuation if the company did not pay a dividend. That/those future outflows are factored into the NPV calculation, actually performed or implied, and results in a current valuation that is less than it would have been had that capital been retained. Unlike with a fixed income security, or even a variable rate debenture, it is difficult to predict what the future cashflows of a company will be, and how investors chose to value things as intangible as brand recognition, market penetration, and executive competence are often far more subjective that using 10 year libor rates to plug into a present value calculation for a floating rate bond of similar tenor. Opinion enters into the calculus and this is why you end up having a greater degree of price variance than you see in the fixed income markets. You have had situations where companies such as Amazon.com, Google, and Facebook had highly valued shares before they they ever posted a profit. That is because the analysis of the value of their intellectual properties or business models would, overtime provide a future value that was equivalent to their stock price at that time.", "title": "" }, { "docid": "98ec745c6a8e74d555e9e026298ed9a2", "text": "It is difficult to value a private company. Most of the valuations is based on how one feels the idea would translate into revenue in some future time. The VC firms take into account various factors to determine the price, but more often then not, its their hunch. Even VC don't make money on all picks, very few picks turn out to be stars, most picks lose money they have invested. Few picks just return their money. So if you feel that the idea/product/brand/people are great and would someday make good money, invest into it. Else stay away.", "title": "" }, { "docid": "e656547f1bc1d937b6442ccc45a63ab2", "text": "When a stock is going to become public there's a level of analysis required to figure out the range of IPO price that makes sense. For a company that's somewhat mature, and has a sector to compare it to, you can come up with a range that would be pretty close. For the recent linkedin, it's tougher to price a somewhat unique company, running at a loss, in a market rich with cash looking for the next great deal. If one gives this any thought, an opening price that's so far above the IPO price represents a failure of the underwriters to price it correctly. It means the original owners just sold theirvshares for far less than the market thought they were worth on day one. The day of IPO the stock opens similar to how any stock would open at 9:30, there are bids and asks and a price at which supply (the ask) and demand (bid) balance. For this IPO, it would appear that there were enough buyers to push the price to twice the anticipated open and it's maintained that level since. It's possible to have a different system in which a Dutch auction is used to make the shares public, in theory this can work, it's just not used commonly.", "title": "" }, { "docid": "718c94c2f02d2b07d82175dba8776ff6", "text": "\"The company gets the proceeds from the sales of shares on the open market. If a company is selling 1,000,000 shares at $12/share then they will receive $12,000,000 from the underwriter minus some fees that the underwriter will collect. The part that ties into valuation is to consider what percentage is the company selling of itself that is coming from its own holdings. If the company is putting out 10% of its shares in the IPO from treasury holdings on a $10B valuation then it will get $1B minus the fees I'd suspect. Where I worked in late 1990s/early 2000s had an IPO where the underwriter did a bridge loan and the IPO so that the company didn't get all the money raised but did get enough to run operations for a while before ending operations. Public Offering notes that after an IPO other offerings would be called \"\"seasoned equity offering\"\" that may or may not be dilutive as they could come from new or existing shares.\"", "title": "" }, { "docid": "145a5decacc13be14030121db03b4578", "text": "The (assets - liabilities)/#shares of a company is its book value, and that number is included in their reports. It's easy for a fund to release the net asset value on a daily basis because all of its assets (stocks, bonds, and cash) are given values every day by the market. It's also necessary to have a real time value for a fund as it will be bought and sold every day. A company can't really do the same thing as it will have much more diverse assets - real estate, cars, inventory, goodwill, etc. The real time value of those assets doesn't have the same meaning as a fund; those assets are used to earn cash, while a fund's business is only to maximize its net asset value.", "title": "" }, { "docid": "1343c7ed17d2c9d9ea47022e828c951c", "text": "Not sure of the question here if by IPO(initial public offering) you mean private company then: A company can invest its excess money into other companies, to earn returns. Also a company that is private can attract private investment if the sector is doing well on publicly traded markets. Finally a company can diversify away risk, by holding shares of a company that would benefit in the event of a disruption in their own industry.", "title": "" }, { "docid": "e30c1a9481ded4a26c6feb5502718faa", "text": "My understanding is you can create a company 0 value. Then you need to either loan the company the money to buy the building (it will still have 0 value as it will have a debt equal to it's assets) or sell share to investors at any price you like to raise the money to buy the building. Once shares have value (as valued by a chartered accountant - not anyone can do this) then anyone recieving shares will have to pay income tax. This is why keeping the shares as no value for as long as possible can be preferable. Also a benefit of using share options. talk to your investors, see what they require.", "title": "" }, { "docid": "a3f2365912ad92fdb6806f5009bb20a8", "text": "As far as I know, the AMT implications are the same for a privately held company as for one that is publicly traded. When I was given my ISO package, it came with a big package of articles on AMT to encourage me to exercise as close to the strike price as possible. Remember that the further the actual price at the time of purchase is from the strike price, the more the likely liability for AMT. That is an argument for buying early. Your company should have a common metric for determining the price of the stock that is vetted by outside sources and stable from year to year that is used in a similar way to the publicly traded value when determining AMT liability. During acquisitions stock options often, from what I know of my industry, at least, become options in the new company's stock. This won't always happen, but its possible that your options will simply translate. This can be valuable, because the price of stock during acquisition may triple or quadruple (unless the acquisition is helping out a very troubled company). As long as you are confident that the company will one day be acquired rather than fold and you are able to hold the stock until that one day comes, or you'll be able to sell it back at a likely gain, other than tying up the money I don't see much of a downside to investing now.", "title": "" }, { "docid": "59c4d3ea50aad7d39d3a7495aa8e3924", "text": "Book value = sell all assets and liquidate company . Then it's the value of company on book. Price = the value at which it's share gets bought or sold between investors. If price to book value is less than one, it shows that an 100$ book value company is being traded at 99$ or below. At cheaper than actually theoretical price. Now say a company has a production plant . Situated at the most costliest real estate . Yet the company's valuation is based upon what it produces, how much orders it has etc while real estate value upon which plant is built stays in book while real investors don't take that into account (to an extend). A construction company might own a huge real estate inventory. However it might not be having enough cash flow to sustain monthly expense. In this scenario , for survival,i the company might have to sell its real estate at discount. And market investors are fox who could smell trouble and bring price way below the book value Hope it helps", "title": "" } ]	fiqa
9748bb94b4b9e7d3a5febf35da129f5c	If a employers supposed to calulate drive time pay with your weekly gross pay	[ { "docid": "798170778594d0e501f31a16af9790d5", "text": "\"Reimbursements for business expenses are generally not taxable, but the commute from home to the job and back is not considered business travel and if they're paying for that it is taxable income. I don't think carpooling changes that, but I am not a tax lawyer or accountant. The rest of your questions seem to be company policy issues. There is no \"\"should\"\" here. You aren't required to pick up the other guys, but he isn't required to reimburse those miles (or employ you) so think carefully about your priorities before pushing back. Never invoke what thou canst not banish.\"", "title": "" }, { "docid": "b7a3cbe87c7d49cdb8cc02b7f7fdec32", "text": "\"You're getting paid by the job, not by the hour, so I don't see why you think the employer is obligated to pay you for the drive time. The only way that might be true, as far as I can see, is if he were avoiding paying you minimum wage by structuring your employment this way. It looks like to me you're over the minimum wage based on what you wrote. At maximum \"\"unpaid\"\" drive time (59 min each way) and maximum length of job (4 hours as you stated it), gives your minimum hourly rate of $8.83/hr. The federal minimum wage is currently $7.25/hr, so you're over that. A quick search online suggests that NV does have a higher minimum at $8.25/hr under some conditions, but you're still over that too. The fact that you're required to pick-up the helpers and that you have a company car at home probably does mean that you're \"\"on the clock\"\" from the moment that you leave your house, but, again, you're not actually being paid by the clock. As long as no other law is being broken (and it appears from your telling that there isn't), then the employer can set any policy for how to compute the compensation that he wants. Regarding taxes, the employer probably has no discretion there. You're making what you're making, and the employer needs to tax it in total. Since you're driving a company vehicle from home, I don't think that you're entitled to any reimbursement (vs. wages) that would not be taxed unless maybe you pay for gas yourself. The gas money, if applicable, should be reimbursable as a business expense and that generally would not be taxed.\"", "title": "" } ]	[ { "docid": "ea751480073d65d4e870329fddcd427f", "text": "\"IANAL, but I had heard (and would appreciate someone more qualified commenting on this) that one reason these things were often found unenforceable is that there is no consideration. The contract is to bind you for your work each day, but once you stop working, they allege you have a continued obligation that transcends your time at the company. Claiming that your day-to-day compensation covers this is as if to say some part of that compensation is not for your work but to pay you for not going elsewhere. It would be nice to see at minimum a requirement to separate these two concepts into separate contracts as bundling them creates a blur, and most importantly doesn't allow you to negotiate or walk away from the terms of one part without the other. At the heart of any \"\"market\"\", which the job market purports to be, is a sense that a fair price is reached when both parties can walk away from a bad deal. This is not so in the case of employment because, as Adlai Stevenson said, \"\"a hungry man is not a free man\"\", so someone who needs to eat (or feed a family) has a need to take an offer that is already biasing their acceptance of work, and this quasi-duress is compounded when a company can attach additional pressures that work agains that person's ability to fairly negotiate possible improvements of what may already have been a bad situation. I'm of the impression that duress itself has been argued to be a reason to hold a contract invalid. But more abstractly and generally, any time two parties are bargaining asymmetrically (I'm not sure the legal definition, but intuitively I'd say where one party has the ability to force a contract change and the other party is not), then those terms have to be suspect. Also, for the special case the pay is anything near minimum wage, I would suggest asking the question of whether the part of the compensation that is salary, not \"\"keeping you from working for the competition\"\", is the wage paid consistent with minimum wage, or does it have to draw from the pool of money that is not about wage but is about incentivizing you to not move. And, finally, if they stop paying you, and each day you've been paid a little to work and a little to incentivize you to leave, then are you getting a continued revenue stream to continue to incentivize you not to work for the competition? If not, there would seem again not to be consideration. As I said, I'm not an expert in this. I just follow such matters sometimes in the news. But I don't see these issues getting discussed here and I hope we'll see some useful responses from the crowd here, and also the smart folks at reddit can help through their discussions to form some useful political and legal defenses to help individuals overcome what is really a moral outrage on this matter. Capitalism is an often cruel engine. I worked at a company where one of the bosses said to me, after contributing really great things that added structurally in fundamental ways to the company, \"\"don't tell me what you've done, tell me what you've done lately\"\". Capitalism makes people scrap every day to prove their worth. So it's morally an outrage to see it also trying even as it beats down the price of someone and tells them they aren't entitled to better, to tell them that they may not go somewhere else that thinks they are better. That is not competition and it is not fair. Indentured servitude, not slavery, is more technically correct. And yet it is a push to treat people like capital, so slavery is not inappropriate metaphorically. The topic is non-competes, but really it's about businesses not wanting to have to compete for employees; that is, about businesses not wanting capitalism to prevail in hiring. Sorry for the length.\"", "title": "" }, { "docid": "bae6e8d76b98b2ba96a5520be36c2c8f", "text": "I believe moving reimbursement has to be counted as income no matter when you get it. I'd just put it under miscellaneous income with an explanation.", "title": "" }, { "docid": "e9724203d4f5b5c13be3e4ffa92717c5", "text": "I would think that the real teeth here would be the IRS, should they look into it (and they should). Splitting paychecks to avoid overtime also reduces taxes paid, which is large scale tax fraud, which generally leads to a sentence in gently-caress-my-bum-Federal-Penitentiary.", "title": "" }, { "docid": "3aa263038384b8ba5f32d1e559ba0291", "text": "\"It is like you are your own boss on the side... Could seem reasonable, but... Let me guess, this will NOT count as part of a regular 8 hour day, be applicable toward a 40 hour work week, qualify anyone for over time, and/or qualify workers on the borderline of qualifying for full time benefits as full time. Also, if packages come up missing it will count directly against the employee and/or be deducted from their normal wages BEFORE the employee receives them. Walmart will also find a way not be responsible for the administrative overhead required to use one's car in a work capacity. With employees feeling the social pressure to provide the service \"\"for the team\"\" while Walmart doesn't put the procedures in place to make sure that employees ALWAYS have the proper car insurance. What could go wrong?\"", "title": "" }, { "docid": "5bf4aa4f68b173fc56b2b036fda4b580", "text": "One point that I don't see covered in the other answers yet: How does this affect the months that have 5 weeks. Do we actually lose two weeks a year? I get paid every two weeks, and pay day is always a Friday. Some months, I get paid 3 times - which is always great. If you live within your means, it's like an extra paycheck. All other months, I get paid two times. How many months a year do I get paid 3 times? 2. It will always be two, because there are 12 months. If you get paid twice a month, that's 24 pay checks, which is 2 shy of 26 pay checks - what we would expect if we were paid every two weeks. That means those 2 extra pay checks need to fall somewhere, and they will be on the months where your pay day is hit 5 times. For example, in 2014, there are 4 months with 5 Fridays: Jan May Aug Oct I got paid the second Friday of January, so I only got 2 checks in January. I will be paid on the first Friday of May, which means I will get 3 checks in May. My other triple-check month this year is October, so of course I am only going to be paid twice in August.", "title": "" }, { "docid": "a57851d680f06d0d027cbc370f7c762e", "text": "I contacted Stephen Fishman, J.D., the author of Home Business Tax Deductions, to let him know that this question was missing from his book. He was kind enough to send a reply. My original phrasing of the question: If your car is used for both business and personal use, and you deduct via the actual expense method, do trips to the mechanic, gas station, and auto parts store to service or repair the car count as business miles, personal miles, or part-business-part-personal miles? What about driving the newly-purchased car home from the dealership? And his response: Good question. I can find nothing about this in IRS publication or elsewhere. However, common sense would tell us that the cost of driving to make car repairs should be deductible. If you use your car for business, it is a business expense, just like transporting any other piece of business equipment for repairs is a business expense. This should be so whether you use the standard mileage rate or actual expense method. You should probably reduce the amount of your deduction by the percentage of personal use of the car during the year. The same goes for driving a car home from the dealer.", "title": "" }, { "docid": "9ae88354d918c5f09d1b21baec41180e", "text": "\"Take a look at IRS Publication 15. This is your employer's \"\"bible\"\" for withholding the correct amount of taxes from your paycheck. Most payroll systems use what this publication defines as the \"\"Percentage Method\"\", because it requires less data to be entered into the system in order to correctly compute the amount of withholding. The computation method is as follows: Taxes are computed \"\"piecewise\"\"; dollar amounts up to A are taxed at X%, and then dollar amounts between A and B are taxed at Y%, so total tax for B dollars is AX + (B-A)Y. Here is the table of rates for income earned in 2012 on a daily basis by a person filing as Single: To use this table, multiply all the dollar amounts by the number of business days in the pay period (so don't count more than 5 days per week even if you work 6 or 7). Find the range in which your pay subject to withholding falls, subtract the \"\"more than\"\" amount from the range, multiply the remainder by the \"\"W/H Pct\"\" for that line, and add that amount to the \"\"W/H Base\"\" amount (which is the cumulative amount of all lower tax brackets). This is the amount that will be withheld from your paycheck if you file Single or Married Filing Separately in the 2012 TY. If you file Married Filing Jointly, the amounts defining the tax brackets are slightly different (there's a pretty substantial \"\"marriage advantage\"\" right now; withholding for a married person in average wage-earning range is half or less than a person filing Single.). In your particular example of $2500 biweekly (10 business days/pp), with no allowances and no pre-tax deductions: So, with zero allowances, your employer should be taking $451.70 out of your paycheck for federal withholding. Now, that doesn't include PA state taxes of 3.07% (on $2500 that's $76.75), plus other state and federal taxes like SS (4.2% on your gross income up to 106k), Medicare/Medicaid (1.45% on your entire gross income), and SUTA (.8% on the first $8000). But, you also don't get a refund on those when you fill out the 1040 (except if you claim deductions against state income tax, and in an exceptional case which requires you to have two jobs in one year, thus doubling up on SS and SUTA taxes beyond their wage bases). If you claim 3 allowances on your federal taxes, all other things being equal, your taxable wages are reduced by $438.45, leaving you with taxable income of $2061.55. Still in the 25% bracket, but the wages subject to that level are only $619.55, for taxes in the 25% bracket of $154.89, plus the withholding base of $187.20 equals total federal w/h of $342.09 per paycheck, a savings of about $110pp. Those allowances do not count towards other federal taxes, and I do not know if PA state taxes figure these in. It seems odd that you would owe that much in taxes with your withholding effectively maxed out, unless you have some other form of income that you're reporting such as investment gains, child support/alimony, etc. With nobody claiming you as a dependent and no dependents of your own, filing Single, and zero allowances on your W-4 resulting in the tax withholding above, a quick run of the 1040EZ form shows that the feds should owe YOU $1738.20. The absolute worst-case scenario of you being claimed as a dependent by someone else should still get you a refund of $800 if you had your employer withhold the max. The numbers should only have gotten better if you're married or have kids or other dependents, or have significant itemized deductions such as a home mortgage (on which the interest and any property taxes are deductible). If you itemize, remember that state income tax, if any, is also deductible. I would consult a tax professional and have him double-check all your numbers. Unless there's something significant you haven't told us, you should not have owed the gov't at the end of the year.\"", "title": "" }, { "docid": "81e8e8a67a6655b2089007919ee45413", "text": "No. Regular W2 employees cannot deduct housing or transportation costs related to their employment. However, in the US, many employers offer Parking and/or Transit FSA programs which are usually collectively referred to a Commuter Benefits FSA programs, this is particularly common among larger employers with locations in major metropolitan cities. Under Commuter benefits FSAs employees can defer up to $255 per month from their gross pay, tax-free, for parking and/or transit expenses. Eligible expenses include things like bus and train passes or parking at a train or bus station. These are money-in/money-out arrangements so expenses can only be claimed against contributions that have been made, unlike a Health FSA. Though, like a health FSA, contributions are subject to use-it or lose-it provisions. These programs must be sponsored by the employer for an employee to take advantage of them though. Some jurisdictions mandate that employers above a certain threshold must offer commuter benefits.", "title": "" }, { "docid": "1ef572d74f547abb3dee28a7951c7242", "text": "It's difficult to quantify the intangible benefits, so I would recommend that you begin by quantifying the financials and then determine whether the difference between the pay of the two jobs justifies the value of the intangible benefits to you. Some Explainations You are making $55,000 per year, but your employer is also paying for a number of benefits that do not come free as a contractor. Begin by writing down everything they are providing you that you would like to continue to have. This may include: You also need to account for the FICA tax that you need to pay completely as a part time employee (normally a company pays half of it for you). This usually amounts to 7.8% of your income. Quantification Start by researching the cost for providing each item in the list above to yourself. For health insurance get quotes from providers. For bonuses average your yearly bonuses for your work history with the company. Items like stock options you need to make your best guess on. Calculations Now lets call your original salary S. Add up all of the costs of the list items mentioned above and call them B. This formula will tell you your real current annual compensation (RAC): Now you want to break your part time job into hours per year, not hours per month, as months have differing numbers of working days. Assuming no vacations that is 52 weeks per year multiplied by 20 hours, or 1040 hours (780 if working 15 hours per week). So to earn the same at the new job as the old you would need to earn an hourly wage of: The full equation for 20 hours per week works out to be: Assumptions DO NOT TAKE THIS SECTION AS REPRESENTATIVE OF YOUR SITUATION; ONLY A BALLPARK ESTIMATE You must do the math yourself. I recommend a little spreadsheet to simplify things and play what-if scenarios. However, we can ballpark your situation and show how the math works with a few assumptions. When I got quoted for health insurance for myself and my partner it was $700 per month, or $8400 per year. If we assume the same for you, then add 3% 401k matching that we'll assume you're taking advantage of ($1650), the equation becomes: Other Considerations Keep in mind that there are other considerations that could offset these calculations. Variable hours are a big risk, as is your status as a 'temporary' employee. Though on the flip side you don't need to pay taxes out of each check, allowing you to invest that money throughout the year until taxes are due. Also, if you are considered a private contractor you can write off many expenses that you cannot as a full time employee.", "title": "" }, { "docid": "168c75be45ba473b7391fb8a0554acb8", "text": "Not if the bonuses are also on a grid. At my work it's the same way -- you get paid a certain amount for every year of tenure you have at the company (outside experience generally doesn't count) and then the bonus varies depending on how your performance rating goes. Everybody knows what the bonus levels are.", "title": "" }, { "docid": "0de7e6aed1729871b322f5ff71e320c1", "text": "This sounds like it makes no difference if you behave in the same manner (i.e. take the same vacation time). For example, say you work 1 hour and take 1 hour of vacation and the current hourly rate is $1/hour. You would make $2. Using your formula, new rate = 1* (1+1)/1 = 12 = $2. So they would pay you $2 for the hour you worked and then you would take the 1 hour of vacation with no pay. If you plan on taking LESS vacation than used in the formula, you make more money. If you plan on taking MORE vacation, you make less money.", "title": "" }, { "docid": "afc203f282f5079672ba3daa2e0812b1", "text": "Biweekly pay for salaried employees is typically calculated as Annual-salary / 26. Twice a month pay for salaried employees is typically calculated as Annual-salary / 24. If you were getting paid twice a month and now are getting paid every other week, your paycheck will be roughly ( Twice-a-month-paycheck-amount 24 / 26 ). If you were paid $1000 twice a month, you'll be paid $923 every other week. $1000 * 24 = $24K and $923 * 26 = $24K. You will get paid every other week regardless of month boundaries on a biweekly pay cycle.", "title": "" }, { "docid": "a8b07cdddb2d7d038e84779c08abb29c", "text": "Temporary flex time is just fine. During crunch time, put in 60 hours a week and then when the crunch is over, do a few weeks of 30 hours, wind down, take a day off, charge for the next crunch. That's how flexible hours should work, to both directions.", "title": "" }, { "docid": "60692161b8b350f107c09ff2893b31e6", "text": "\"I believe there is an overtime meal allowance. That is, if an employee works \"\"overtime\"\" (defined as 7:00 p.m. for a 9:00 start, or ten-plus hours after the shift starts), the company can provide a non-taxable meal free of charge, or give a \"\"reasonable\"\" allowance ($15-$20) that must be spent outside on a meal (no drinks). This is because the employee is working extra hours at the convenience of the company. Lunches can be subsidized. That is the company can provide lunch on company premises, and must charge employees the direct costs of the food and preparing it, but can forego charging for \"\"overhead\"\" (e.g. the implied rent for the lunch facility) and profit.\"", "title": "" }, { "docid": "b13f719477e0d0f36451f0425affb9dc", "text": "Not really. For moderate length (5-6hr) that is a lunch break. Leave at 6, break after 3hr for lunch, extra charge at 2:30pm for 20m, break at dinner, drive. Meal alignment and you drove 6am to 8pm or so with only one extra stop. If you hyper optimize your time that sucks, but was minor imo.", "title": "" } ]	fiqa
39c87d91d52668d6dafc4f59ae9dadf1	How to manage 20 residential apartments	[ { "docid": "4947e3208e0f0fd6a510771e77a0b9e3", "text": "If he can't manage, best is he sells it off. Its easier to manage cash. Not sure what tax you are talking about. He should have already paid tax on fair market value of the 20 flats. If the intention of Mr X is to gift to son by way of death, then yes the tax will be less. Else whenever Mr X sells there will be tax. how to manage these 20 apartments? Hire a broker. He may front run quite a few things like showing the place etc. There is a risk if he is given a free hand, he may not get good quality tenant. There are quite a few shark brokers [its unregulated] who may arm twist seeing the opportunity of an old man with 20 flats. See if you can do long term lease with companies looking for guest house etc, or certain companies who run guest house. They would like the scale, generally 3-5 years contracts are done. The rent is good and overall less hassle. The risk is most would ask to invest more in furnishing and contracts can be terminated in months notice. If the property is in large metro [Delhi/Bangalore/Chennai/etc] These places have good property management companies. Ensure that you have independent lawyer; there are certain aspects of law that may need to be studied.", "title": "" }, { "docid": "c5a6e5ffd6b132189f7b39f5213d9725", "text": "I have no idea about India, but in many countries there are companies that specialize in property management. This means they will take on the business of maintaining the properties, finding tenants, doing paperwork and background checks, collecting rents and evicting tenants if necessary. Obviously for this they require a fee, but essentially the owner gets to sit back and do nothing except collect a cheque every month. In my country some real estate agents are in this business as well, though for 20 apartments I would be looking for a specialized firm.", "title": "" }, { "docid": "8daccb4c7d1963417fafccde3f1149a4", "text": "There are many property management companies are available in India. You can easily find trusted companies just searching on the google. They manage all these things legally. You just try this", "title": "" } ]	[ { "docid": "4ac2c64ce70259bde39978411a151518", "text": "\"with 150K € to invest to \"\"become a landlord\"\" you have several options: Pay for 100% of one property, and you then will make a significant percentage of the monthly rent as profit each month. That profit can be used to invest in other things, or to save to buy additional properties. At the end of the 21 years in your example, you can sell the flat for return of principal minus selling expenses, or even better make a profit because the property went up in value. Pay 20% down on 5 flats, and then make a much a smaller profit per flat each month due to the mortgage payment for each one. At the end of the 21 years sell the flats. Assuming that a significant portion of the mortgage is paid off each flat will sell for more than the mortgage balance. Thus you will have 5 nice large profits when you sell. something in between 1 and 5 flats. Each has different risks and expenses. With 5 rental properties you are more likely to use a management company, which will add to your monthly cost.\"", "title": "" }, { "docid": "32f65fc97fd635d2e2758c4e3e51da9d", "text": "I owned and managed a few residential properties. At one time the net cash flow was on the order of $1000 per month. But it was work. Lots of work. I was managing about 7 units. This does not count the gains in capital appreciation which were significant. Using a management company would have put the cash flow at 0 or in the negative and would have lowered the quality of management IMO. Nothing comes for free...", "title": "" }, { "docid": "186949c06eb488b98bb884fff413d4d4", "text": "Renting a house out using a management company is mostly passive income. Earning affiliate income from companies that pay on a recurring basis is closer to passive income.", "title": "" }, { "docid": "d0255b03e9b26ac7886bc7db1ca7075a", "text": "\"I agree with Joe Taxpayer that a lot of details are missing to really evaluate it as an investment... for context, I own a few investment properties including a 'small' 10+ unit apartment complex. My answer might be more than you really want/need, (it kind of turned into Real Estate Investing 101), but to be fair you're really asking 3 different questions here: your headline asks \"\"how effective are Condo/Hotel developments as investments?\"\" An answer to that is... sometimes, very. These are a way for you-the investor-to get higher rents per sq. ft. as an owner, and for the hotel to limit its risks and access additional development funding. By your description, it sounds like this particular company is taking a substantial cut of rents. I don't know this property segment specifically, but I can give you my insight for longer-term apartment rentals... the numbers are the same at heart. The other two questions you're implying are \"\"How effective is THIS condo/hotel development?\"\" and \"\"Should you buy into it?\"\" If you have the funds and the financial wherewithal to honestly consider this, then I am sure that you don't need your hand held for the investment pros/cons warnings of the last question. But let me give you some of my insight as far as the way to evaluate an investment property, and a few other questions you might ask yourself before you make the decision to buy or perhaps to invest somewhere else. The finance side of real estate can be simple, or complicated. It sounds like you have a good start evaluating it, but here's what I would do: Start with figuring out how much revenue you will actually 'see': Gross Potential Income: 365 days x Average Rent for the Room = GPI (minus) Vacancy... you'll have to figure this out... you'll actually do the math as (Vacancy Rate %) x GPI (equals) Effective Potential Income = EPI Then find out how much you will actually pocket at the end of the day as operating income: Take EPI (minus) Operating expenses ... Utilities ... Maintenace ... HOA ... Marketing if you do this yourself (minus) Management Expenses ... 40% of EPI ... any other 'fees' they may charge if you manage it yourself. ... Extra tax help? (minus) Debt Service ... Mortgage payment ... include Insurances (property, PMI, etc) == Net Operating Income (NOI) Now NOI (minus) Taxes == Net Income Net Income (add back) Depreciation (add back) sometimes Mortgage Interest == After-tax Cash Flows There are two \"\"quickie\"\" numbers real estate investors can spout off. One is the NOI, the other is the Cap Rate. In order to answer \"\"How effective is THIS development?\"\" you'll have to run the numbers yourself and decide. The NOI will be based on any assumptions you choose to make for vacancy rates, actual revenue from hotel room bookings, etc. But it will show you how much you should bring in before taxes each year. If you divide the NOI by the asking price of your unit (and then multiply by 100), you'll get the \"\"Cap Rate\"\". This is a rough estimate of the rate of return you can expect for your unit... if you buy in. If you come back and say \"\"well I found out it has a XX% cap rate\"\", we won't really be qualified to help you out. Well established mega investment properties (think shopping centers, office buildings, etc.) can be as low as 3-5 cap rates, and as high as 10-12. The more risky the property, the higher your return should be. But if it's something you like, and the chance to make a 6% return feels right, then that's your choice. Or if you have something like a 15% cap rate... that's not necessarily outstanding given the level of risk (uncertain vacancies) involved in a hotel. Some other questions you should ask yourself include: How much competition is there in the area for short-term lodging? This could drive vacancies up or down... and rents up or down as well How 'liquid' will the property (room) be as an asset? If you can just break even on operating expense, then it might still make sense as an investment if you think that it might appreciate in value AND you would be able to sell the unit to someone else. How much experience does this property management company have... (a) in general, (b) running hotels, and (c) running these kinds of condo-hotel combination projects? I would be especially interested in what exactly you're getting in return for paying them 40% of every booking. Seasonality? This will play into Joe Taxpayer's question about Vacancy Rates. Your profile says you're from TX... which hints that you probably aren't looking at a condo on ski slopes or anything, but if you're looking at something that's a spring break-esque destination, then you might still have a great run of high o during March/April/May/June, but be nearly empty during October/November/December. I hope that helps. There is plenty of room to make a more \"\"exact\"\" model of what your cash flows might look like, but that will be based on assumptions and research you're probably not making at this time.\"", "title": "" }, { "docid": "9f47d532ee2ff1cd4da42aa86e7f3042", "text": "Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt) have different end of term dates but by less than a month. Both have summer sessions, but most students do not stay over the summer. You can rent over the summer, but prices fall by a lot. Thirty to forty thousand students leave over the summer between the two. Only ten to twenty thousand remain throughout the year and not all of those are in Oakland (the neighborhood in Pittsburgh where the universities are located). So many of the landlords in Oakland have the same problem. Your competitors will cut their rates to try to get some rent for the summer months. This also means that you have to handle eight, nine, and three month leases rather than year long and certainly not multiyear leases. You're right that you don't have to buy the latest appliances or the best finishes, but you still have to replace broken windows and doors. Also, the appliances and plumbing need to mostly work. The furnace needs to produce heat and distribute it. If there is mold or mildew, you will have to take care of it. You can't rely on the students doing so. So you have to thoroughly clean the premises between tenants. Students may leave over winter break. If there are problems, the pipes may freeze and burst, etc. Since they're not there, they won't let you know when things break. Students drop out during the term and move out. You probably won't be able to replace them when that happens. If you have three people in two bedrooms, two of them may be in a romantic relationship. Romantic relationships among twenty-year olds end frequently. Your three people drops back to two. Your recourse in that case is to evict the remaining tenants and sue for breach of contract. But if you do that, you may not replace the tenants until a new term starts. Better might be to sue the one who left and accept the lower rent from the other two. But you likely won't get the entire rent amount for the remainder of the lease. Suing an impoverished student is not the road to riches. Pittsburgh is expected to have a 6.1% increase in house prices which almost all of it is going to be pure profit. I don't know specifically about Pittsburgh, but in the national market, housing prices are about where they were in 2004. Prices were flat to increasing from 2004 to 2007 and then fell sharply from 2007 to 2009, were flat to decreasing from 2009 to 2012, and have increased the last few years. Price to rent ratios are as high now as in 2003 and higher than they were the twenty years before that. Maybe prices do increase. Or maybe we hit a new 20% decrease. I would not rely on this for profit. It's great if you get it, but unreliable. I wouldn't rely on estimates for middle class homes to apply to what are essentially slum apartments. A 6% average may be a 15% increase in one place and a 3% decrease in another. The nice homes with the new appliances and the fancy finishes may get the 15% increase. The rundown houses in a block where students party past 2 AM may get no increase. Both the city of Pittsburgh and the county of Allegheny charge property taxes. Schools and libraries charge separate taxes. The city provides a worksheet that estimates $2860 in taxes on a $125,000 property. It doesn't sound like you would be eligible for homestead or senior tax relief. Realtors should be able to tell you the current assessment and taxes on the properties that they are selling you. You should be able to call a local insurance agent to find out what kinds of insurance are available to landlords. There is also renter's insurance which is paid by the tenant. Some landlords require that tenants show proof of insurance before renting. Not sure how common that is in student housing.", "title": "" }, { "docid": "de2f8020f2afe5a02fa537ebb9f85250", "text": "\"To be completely honest, I think that a target of 10-15% is very high and if there were an easy way to attain it, everyone would do it. If you want to have such a high return, you'll always have the risk of losing the same amount of money. Option 1 I personally think that you can make the highest return if you invest in real estate, and actively manage your property(s). If you do this well with short term rental and/or Airbnb I think you can make healthy returns BUT it will cost a lot of time and effort which may diminish its appeal. Think about talking to your estate agent to find renters, or always ensuring your AirBnB place is in good nick so you get a high rating and keep getting good customers. If you're looking for \"\"passive\"\" income, I don't think this is a good choice. Also make sure you take note of karancan's point of costs. No matter what you plan for, your costs will always be higher than you think. Think about water damage, a tenant that breaks things/doesn't take care of stuff etc. Option 2 I think taking a loan is unnecessarily risky if you're in good financial shape (as it seems), unless you're gonna buy a house with a mortgage and live in it. Option 3 I think your best option is to buy bonds and shares. You can follow karancan's 100 minus your age rule, which seems very reasonable (personally I invest all my money in shares because that's how my father brought me up, but it's really a matter of taste. Both can be risky though bonds are usually safer). I think I should note that you cannot expect a return of 10% or more because, as everyone always says, if there were a way to guarantee it, everyone would do it. You say you don't have any idea how this works so I'd go to my bank and ask them. You probably have access to private banking so that should mean someone will be able to sit you down and talk you through. Also look at other banks that have better rates and/or pretend you're leaving your bank to negotiate a better deal. If I were you I'd invest in blue chips (big international companies listed on the main indeces (DAX, FTSE 100, Dow Jones)), or (passively managed) mutual funds/ETFs that track these indeces. Just remember to diversify by country and industry a bit. Note: i would not buy the vehicles/plans that my bank (no matter what they promise, and they promise a lot) suggest because if you do that then the bank always takes a cut off your money. TlDr, dont expect to make 10-15% on a passive investment and do what a lot of others do: shares and bonds. Also make sure you get a lot of peoples opinions :)\"", "title": "" }, { "docid": "a66f38ae2cba550a0b1745a99f4782ac", "text": "Approach property management companies. I work for one with hundreds of properties and we need plumbers all the time. On the business side it simplifies your marketing and repeat business. We get potted flowers and candy from vendors all the time. Or they bring in pizza for lunch once a quarter to keep the relationship up.", "title": "" }, { "docid": "8ad92aef2db18e00c11a34e335a8493c", "text": "Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is.", "title": "" }, { "docid": "1e912dbff135225ac31d53bff72a6ff8", "text": "\"I am surprised at the amount of work this contract wants done. I'd question if it's even legal given the high costs. I suspect it's only there to remind abusive tenants of responsibilities they already have in law for extraordinary abuse beyond ordinary wear-and-tear: they are already on the hook to repaint if they trash the paint (think: child writing on walls, happens a lot), and already need to fumigate (and a lot more) if they are a filth-type hoarder who brings in a serious infestation (happens a lot). The landlord can already go after these people for additional money beyond the deposit. But that's not you. So don't freak out about those clauses, until you talk to the landlord and see what he's really after. Almost certainly, he really wants a \"\"fit and ready to rent\"\" unit upon your departure, so he doesn't have to take the unit off the market for months fixing it. As long as that's done, there's no reasonable reason for further work -- a decent landlord wouldn't require that. Nor would a court, IMO. The trouble with living in a place for awhile is you become blind to its deficiencies. What's more, it's rather difficult to \"\"size up\"\" a unit as ready when it's still occupied by your stuff. A unit will look rather different when reduced to a bare room, without furniture and whatnot distracting you. Add to it a dose of vanity and it becomes hard to convince yourself of defects others will easily see. So, tread carefully here. If push comes to shove, first stop is whether it's even legal. Cities and states with heavy tenant populations tend to have much more detailed laws, and as a rule, they favor the tenant. Right off the bat, in most states the tenant is not responsible for ordinary wear-and-tear. In my opinion, 6 years of ordinary, exempt wear would justify a repaint, so that shouldn't be on the tenant at all. As for the fumigation, I'm not in Florida so I don't know the deal, maybe there's some special environmental issue there which somehow makes that reasonable, it sure wouldn't fly in CA. Again that assumes you're a reasonable prudent tenant, not a slob or hoarder. As for the pro carpet cleaning, that's par for the course in any of the tough rent control areas I've seen, so that's gotten a pass from the legislators. Though $600 seems awfully high. Other than that, you can argue the terms are \"\"unconscionable\"\" -- too much of a raw deal to even be fair. However, this will depend on the opinion of a judge. Hit or miss. I'm hoping your landlord will be happy to negotiate based on the good condition of the unit (which he may not know; landlords rarely visit tenant units unless they really need to.) You certainly should make the case that you make here; that the work is not really needed and it's prohibitive. Your best defense against unconscionable deals is don't sign them. Remember, you didn't know the guy when you initially signed... the now-objectionable language should have been a big red flag back then, saying this guy is epic evil, run screaming. (even if that turned out not to be true, you should't have hung around to find out.) You may have gotten lucky this time, but don't make that mistake again. Unless one of the above pans out, though... a deal is a deal. You gave your word. The powerful act here is to keep your word. Forgive me for getting ontological, but successful people say it creates success for them. And here's the thing. You have to read your contracts because you can't keep your word if you don't know what word you gave. It's a common mistake: thinking good business is trust, hope, faith, submission or giving your all. No. In business, you take the time to hammer out mutually beneficial (win-win) agreements, and you set them on paper to eliminate confusion, argument and stress in the future as memories fade and conditions change. That conflict resolution is how business partners remain friends, or at least professional colleagues.\"", "title": "" }, { "docid": "4d2dca01d9cfa77aa73046505321e972", "text": "\"I see two important things missing from your ongoing costs: maintenance and equipment. I also don't see the one-time costs of buying and moving. Maintenance involves doing some boring math like \"\"roofs go every 20 years or so and a new roof would cost $20k, so I need $1000 a year in the roof fund. Furnaces go every 20 years and cost $5k, so I need $250 a year in the furnace fund.\"\" etc etc. Use your own local numbers for both how long things last and how much they cost to replace. One rule of thumb is a percentage of the house (not house and land) price each year keeping in mind that while roof, furnace, carpet, stove, toilets etc all need to get replaced eventually, not everything does - the walls for example cost a lot to build but don't wear out - and not all at a 20 year pace. Some is more often, some is less often. I've heard 5% but think that's too high. Try 3% maybe? So if you paid $200,000 for a $100,000 house sitting on $100,000 of land, you put $3000 a year or about $250 a month into a repair fund. Then ignore it until something needs to be repaired. When that happens, fund the repair from the savings. If you're lucky, there will always be enough in there. If the house is kind of old and on its last legs, you might need to start with a 10 or 20k infusion into that repair fund. Equipment means a lawnmower and trimmer, a snow shovel, tools for fixing things (screwdriver, hammer, glue, pliers, that sort of thing.) Maybe tools for gardening or other hobbies that house-owners are likely to have. You might need to prune back some trees or bushes if nothing else. Eventually you get tools for your tools such as a doo-dad for sharpening your lawnmower. Well, lots of doo-dads for sharpening lots of things. One time expenses include moving, new curtains, appliances if they don't come with the house, possibly new furniture if you would otherwise have a lot of empty rooms, paint and painting equipment, and your housewarming party. There are also closing costs associated with buying a house, and you might need to give deposits for some of your utilities, or pay to have something (eg internet) installed. Be sure to research these since you have to pay them right when you have the least money, as you move in.\"", "title": "" }, { "docid": "2f433e95de68c23d93cf4fae5295ecc2", "text": "You will need to look at the 27.5 year depreciation table from the IRS. It tells you how you will be able to write off the first year. It depends on which month you had the unit ready to rent. Note that that it might be a different month from when you moved, or when the first tenant moved in. Your list is pretty good. You can also claim some travel expenses or mileage related to the unit. Also keep track of any other expenses such as switching the water bill to the new renter, or postage. If you use Turbo tax, not the least expensive version, it can be a big help to get started and to remember how much to depreciate each year.", "title": "" }, { "docid": "5a1293a666b8079d199978def4663f03", "text": "Getting the first year right for any rental property is key. It is even more complex when you rent a room, or rent via a service like AirBnB. Get professional tax advice. For you the IRS rules are covered in Tax Topic 415 Renting Residential and Vacation Property and IRS pub 527 Residential Rental Property There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you reach that reporting threshold the IRS will now expect you to to have to report the income, and address the items such as depreciation. When you go to sell the house you will again have to address depreciation. All of this adds complexity to your tax situation. The best advice is to make sure that in a tax year you don't cross that threshold. When you have a house that is part personal residence, and part rental property some parts of the tax code become complex. You will have to divide all the expenses (mortgage, property tax, insurance) and split it between the two uses. You will also have to take that rental portion of the property and depreciation it. You will need to determine the value of the property before the split and then determine the value of the rental portion at the time of the split. From then on, you will follow the IRS regulations for depreciation of the rental portion until you either convert it back to non-rental or sell the property. When the property is sold the portion of the sales price will be associated with the rental property, and you will need to determine if the rental property is sold for a profit or a loss. You will also have to recapture the depreciation. It is possible that one portion of the property could show a loss, and the other part of the property a gain depending on house prices over the decades. You can expect that AirBnB will collect tax info and send it to the IRS As a US company, we’re required by US law to collect taxpayer information from hosts who appear to have US-sourced income. Virginia will piggyback onto the IRS rules. Local law must be researched because they may limit what type of rentals are allowed. Local law could be state, or county/city/town. Even zoning regulations could apply. Also check any documents from your Home Owners Association, they may address running a business or renting a property. You may need to adjust your insurance policy regarding having tenants. You may also want to look at insurance to protect you if a renter is injured.", "title": "" }, { "docid": "2b3f26a15ae57922ab21582901c89a67", "text": "You may have to ask each tenant to provide copies of bank statements or copied of deposited checks indicating what was paid, to whom and when. Using a spreadsheet is a good idea. It doesn't have to be complicated. If everyone co-operates then this exercise might not be too much of a hassle. But if anyone is combative or unwilling to produce these records, I would recommend reminding them that their other choice is to take each other to court where these records would be required anyway - or face eviction if the landlord doesn't get paid.", "title": "" }, { "docid": "1e78a7689dc55077eb13c694a60c5654", "text": "\"When you say \"\"apartment\"\" I take it you mean \"\"condo\"\", as you're talking about buying. Right or no? A condo is generally cheaper to buy than a house of equal size and coondition, but they you have to pay condo fees forever. So you're paying less up front but you have an ongoing expense. With a condo, the condo association normally does exterior maintenance, so it's not your problem. Find out exactly what's your responsibility and what's theirs, but you typically don't have to worry about maintaining the parking areas, you have less if any grass to mow, you don't have to deal with roof or outside walls, etc. Of course you're paying for all this through your condo fees. There are two advantages to getting a shorter term loan: Because you owe the money for less time, each percentage point of interest is less total cash. 1% time 15 years versus 1% times 30 years or whatever. Also, you can usually get a lower rate on a shorter term loan because there's less risk to the bank: they only have to worry about where interest rates might go for 15 years instead of 30 years. So even if you know that you will sell the house and pay off the loan in 10 years, you'll usually pay less with a 15 year loan than a 30 year loan because of the lower rate. The catch to a shorter-term loan is that the monthly payments are higher. If you can't afford the monthly payment, then any advantages are just hypothetical. Typically if you have less than a 20% down payment, you have to pay mortgage insurance. So if you can manage 20% down, do it, it saves you a bundle. Every extra dollar of down payment is that much less that you're paying in interest. You want to keep an emergency fund so I wouldn't put every spare dime I had into a down payment if I could avoid it, but you want the biggest down payment you can manage. (Well, one can debate whether its better to use spare cash to invest in the stock market or some other investment rather than paying down the mortgage. Whole different question.) \"\"I dont think its a good idea to make any principal payments as I would probably loose them when I would want to sell the house and pay off the mortgage\"\" I'm not sure what you're thinking there. Any extra principle payments that you make, you'll get back when you sell the house. I mean, suppose you buy a house for $100,000, over the time you own it you pay $30,000 in principle (between regular payments and any extra payments), and then you sell it for $120,000. So out of that $120,000 you'll have to pay off the $70,000 balance remaining on the loan, leaving $50,000 to pay other expenses and whatever is left goes in your pocket. Scenario 2, you buy the house for $100,000, pay $40,000 in principle, and sell for $120,000. So now you subtract $60,000 from the $120,000 leaving $60,000. You put in an extra $10,000, but you get it back when you sell. Whether you make or lose money on the house, whatever extra principle you put in, you'll get back at sale time in terms of less money that will have to go to pay the remaining principle on the mortgage.\"", "title": "" }, { "docid": "4ca1b59e45e7dd98ad3c7f6ba8724c30", "text": "They call you because that is their business rules. They want their money, so their system calls you starting on the 5th. Now you have to decide what you should do to stop this. The most obvious is to move the payment date to before the 5th. Yes that does put you at risk if the tenant is late. But since it is only one of the 4 properties you own, it shouldn't be that big of a risk.", "title": "" } ]	fiqa
ca04b0b64a5200696b4e4c4a211db0b2	My boss wants to buy me a gift. How do I account for taxes for this?	[ { "docid": "45390f1ecd215cbde66ecaa8e7578bd6", "text": "\"Gifts given and received between business partners or employers/employees are treated as income, if they are beyond minimal value. If your boss gives you a gift, s/he should include it as part of your taxable wages for payroll purposes - which means that some of your wages should be withheld to cover income, social security, and Medicare taxes on it. At the end of the year, the value of the gift should be included in Box 1 (wages) of your form W-2. Assuming that's the case, you don't need to do anything special. A 1099-MISC would not be appropriate because you are an employee of your boss - so the two of you need to address the full panoply of employment taxes, not just income tax, which would be the result if the payment were reported on 1099-MISC. If the employer wants to cover the cost to you of the taxes on the gift, they'll need to \"\"gross up\"\" your pay to cover it. Let's say your employer gives you a gift worth $100, and you're in a 25% tax bracket. Your employer has to give you $125 so that you end up with a gain of $100. But the extra $25 is taxable, too, so your employer will need to add on an extra $6.25 to cover the 25% tax on the $25. But, wait, now we've gotta pay 25% tax on the $6.25, so they add an extra $1.56 to cover that tax. And now they've gotta pay an extra $.39 . . . The formula to calculate the gross-up amount is: where [TAX RATE] is the tax rate expressed as a percentage. So, to get the grossed-up amount for a $100 gift in a 25% bracket, we'd calculate 1/(1-.25), or 1/.75, or 1.333, multiply that by the target gift amount of $100, and end up with $133.33. The equation is a little uglier if you have to pay state income taxes that are deductible on the federal return but it's a similar principle. The entire $133.33 would then be reported as income, but the net effect on the employee is that they're $100 richer after taxes. The \"\"gross-up\"\" idea can be quite complicated if you dig into the details - there are some circumstances where an additional few dollars of income can have an unexpected impact on a tax return, in a fashion not obvious from looking at the tax table. If the employer doesn't include the gift in Box 1 on the W-2 but you want to pay taxes on it anyway, include the amount in Line 7 on the 1040 as if it had been on a W-2, and fill out form 8919 to calculate the FICA taxes that should have been withheld.\"", "title": "" }, { "docid": "05a2f8e0a28b65ca24ec68ecb84e114d", "text": "The way I have seen this done in the past is the business will withhold taxes on the amount of the gift. Very much like receiving a bonus. There are probably other ways to do it where taxes are avoided like you boss could buy the gift for you personally. Not sure about all the legal ways to avoid taxes on this.", "title": "" } ]	[ { "docid": "33815eb947ceaf1d6ce9d49424d4d5eb", "text": "As was once famously said, Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. — Benjamin Franklin, 1789 It's very likely that either the company or you personally is going to have to pay taxes on that money. Really the only way to avoid it would be if the company spent that money on next year's expenses, and paid the bill before the end of this year. Of course you can only do that if the recipient is willing to receive their money so far in advance, which isn't necessarily the case since they would pay more taxes this year as a result. As for whether it's better to have the company pay the tax or for you to do as your accountant suggests, there are a lot of factors that go into that equation, and my gut feeling is that your accountant already ran it both ways and is suggesting the better choice.", "title": "" }, { "docid": "39f3a8221f16c84c72aefff9e8144049", "text": "To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes:", "title": "" }, { "docid": "9f5ea3293efbf96f1c81666d56f4562a", "text": "\"I transfer all their funds to my bank account Are they paying tax on that transfer? Gifts under $14,000 are excluded from taxation in the US, but they're going going to have a hard time arguing that it is a gift (since they expect it back). The taxes are almost certainly going to exceed the amount you can make from your investments in the short term, and if they aren't paid then your \"\"clients\"\" are going to be in hot water with the IRS. You need to have something set up that establishes you as merely managing the funds, and not receiving them personally as a transfer. The other answers have good suggestions.\"", "title": "" }, { "docid": "94f593b5521152a87c5459a25f4a9088", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"", "title": "" }, { "docid": "388064e6784725aed42532bb9245f0f4", "text": "\"Yes, it's taxable. If anyone suggests it's a gift, they are mistaken. There's a line on the 1040 for \"\"other\"\" and as long as you claim it, you're fine with the IRS. It's 2012 income as you already got it. Edit - mhoran makes two good points I'm not really able to address. (a) does a late bonus such as this effect one's penalty? (b) since it skipped payroll, will there be an issue by not having FICA withheld?\"", "title": "" }, { "docid": "52fd8c46f1c0418a056dc8204ca347e9", "text": "It is generally best to avoid such situations. Any credits to your accounts need to be explained to tax authorities whenever they enquire. This cannot be treated as income as you did not work in exchange for the amount. It can be treated by tax authorities as GIFT. Gift upto certain amount is tax free. Beyond the amount its taxable. Gifts from close relatives has not amount limit and is tax free. Whenever the scrutiny happens, if you can convince the tax authorities that the action was more for convenience, it maybe fine.", "title": "" }, { "docid": "ffd08dea7dad0b41a6ed09bda545c60a", "text": "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.", "title": "" }, { "docid": "046c3a367b30527c5d320c397e8de7c7", "text": "If you are in the US and a regular employee, this will have to show up on your year-end W2 form as income. If it doesn't, there is some funky accounting business going and you should probably consult a professional for advice.", "title": "" }, { "docid": "12145f28caf8629f91f0f822a8de3b2c", "text": "Don't overthink it. As an employee, whether of your own corporation or of someone else, you get a salary and there are deductions taken out. As the owner of a business you get (hopefully) business profits as well. And, in general, you often have other sources of income from investments, etc. Your estimated tax payments are based on the difference between what was withheld from your salary and what you will owe, based on salary, business income, and other sources. So, in essence, you just add up all the income you expect, estimate what the tax bill will be, and subtract what's been withheld. That's your estimated tax payment.", "title": "" }, { "docid": "16975eb82ac74d9be6a9f09e50a0f753", "text": "Yes, if you gift him with a large amount you may be liable for gift tax. I believe the current limit is still $17k per person per person per year, so between you and your spouse you could give him up to $34k per year without triggering gift tax. If you want to give a larger sum, the standard workaround is an intra-family loan. Websearch for that phrase to learn more about it, but basically you loan the money and then gift the payments on the loan. This gives him the money up front, spreading the gift over subsequent years --but it requires that you declare the interest that he is supposedly paying you as income. There is a lower limit on the interest rate for these loans, but it's a fraction of a percent so this generally isn't a significant cost. (If you are able to structure the loan as a mortgage, he may be able to deduct the interest from his taxes. That usually requires a few hundred dollars if paperwork to set up.) I've done it. It works. And one of the advantages is that it puts the exact terms of the lian on paper where everyone can agree to them, which could be useful should there be arguments later on. When doing business with friends and relatives, keeping it on a clear business contract basis is the best way to avoid destroying the friendship.", "title": "" }, { "docid": "26ce60fef4f08824a11abf3f8009ba3b", "text": "The IRS defines income quite specifically. On the topic What is Taxable and Nontaxable Income, they note: You can receive income in the form of money, property, or services. This section discusses many kinds of income that are taxable or nontaxable. It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Bartering, or giving someone wages (or similar) in something other than currency (or some other specifically defined things, like fringe benefits), is taxed at fair market value: Bartering Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. For additional information, Refer to Tax Topic 420 - Bartering Income and Barter Exchanges. Bartering is more specifically covered in Topic 420 - Bartering Income: 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 for information on filing an amended return. More details about income in general beyond the above articles is available in Publication 525, Taxable and Nontaxable Income. It goes into great detail about different kinds of income. In your example, you'd have to calculate the fair market value of an avocado, and then determine how much cash-equivalent you were paid in. The IRS wouldn't necessarily tell you what that value was; you'd calculate it based on something you feel you could justify to them afterwards. The way I'd do it would be to write down the price of avocados at each pay period, and apply a dollar-cost-averaging type method to determine the total pay's fair value. While the avocado example is of course largely absurd, the advent of bitcoins has made this much more relevant. Publication 525 has this to say about virtual currency: Virtual Currency. If your employer gives you virtual currency (such as Bitcoin) as payment for your services, you must include the fair market value of the currency in your income. The fair market value of virtual currency (such as Bitcoin) paid as wages is subject to federal income tax withholding, Federal Insurance Contribution Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement. Gold would be fundamentally similar - although I am not sure it's legal to pay someone in gold; assuming it were, though, its fair market value would be again the definition of income. Similarly, if you're paid in another country's currency, the US dollar equivalent of that is what you'll pay taxes on, at the fair market value of that currency in US dollars.", "title": "" }, { "docid": "a99219ec5f173dad91f95b2103fdc1f1", "text": "Get the worker put it in writing, and deduct it in December under constructive receipt rules. The fact that you're getting the actual cash in January isn't significant as long as you've secured the payment. Verify this with a tax adviser, but that's what I would do.", "title": "" }, { "docid": "56596fac5107f6f0af730a04194202f2", "text": "\"A little terminology: Grant: you get a \"\"gift\"\" with strings attached. \"\"Grant\"\" refers to the plan (legal contract) under which you get the stock options. Vesting: these are the strings attached to the grant. As long as you're employed by the company, your options will vest every quarter, proportionally. You'll become an owner of 4687 or 4688 options every quarter. Each such vest event means you'd be getting an opportunity to buy the corresponding amount of stocks at the strike price (and not the current market price which may be higher). Buying is called exercising. Exercising a nonqualified option is a taxable event, and you'll be taxed on the value of the \"\"gift\"\" you got. The value is determined by the difference between the strike price (the price at which you have the option to buy the stock) and the actual fair market value of the stock at the time of vest (based on valuations). Options that are vested are yours (depending on the grant contract, read it carefully, leaving the company may lead to forfeiture). Options that are not vested will disappear once you leave the company. Exercised options become stocks, and are yours. Qualified vs Nonqualifed - refers to the tax treatment. Nonqualified options don't have any special treatment, qualified do. 3.02M stocks issued refers to the value of the options. Consider the total valuation of the company being $302M. With $302M value and 3.02M stocks issued, each stock is worth ~$100. Now, in a year, a new investor comes in, and another 3.02M stocks are issued (if, for example, the new investor wants a 50% stake). In this case, there will be 6.04M stocks issued, for 302M value - each stock is worth $50 now. That is called dilution. Your grant is in nominal options, so in case of dilution, the value of your options will go down. Additional points: If the company is not yet public, selling the stocks may be difficult, and you may own pieces of paper that no-one else wants to buy. You will still pay taxes based on the valuations and you may end up paying for these pieces of paper out of your own pocket. In California, it is illegal to not pay salary to regular employees. Unless you're a senior executive of the company (which I doubt), you should be paid at least $9/hour per the CA minimum wages law.\"", "title": "" }, { "docid": "7da971f8aec74ab1da208c8d182c2eb1", "text": "\"Context: My parents overseas (Japan) sent me a little over $100,000 to cover an expensive tuition payment and moderate living expenses in 2014. They are not US residents, Green card holders or citizens. They did not remit the tuition payment directly to the school. I am a resident (for tax). This is enough to answer yes. That's basically the set of requirements for filing: you received >$100K from a non-US person and you yourself are a US person. You have to report it, and unless it is taxable income - it is a gift. Taxable income is reported on the form 1040, gifts are reported on the form 3520. The fact that in Japan it is not considered a gift is irrelevant. Gift tax laws vary between countries, some (many) don't have gift taxes at all. But the reporting requirement is based on the US law and the US definition of \"\"gift\"\". As I said above, if it is not a gift per the US law, then it is taxable income (and then you report all of it regardless of the amount and pay taxes). Had they paid directly to the institution, you wouldn't need to count it as income/gift to you because you didn't actually receive the money (so no income) and it went directly to cover your qualified education expenses (so no gift), but this is not the case in your situation. Whether or not this will be reported by the IRS back to Japan - I don't know, but it was probably already reported to the authorities in Japan by the banks through which the transfers went through. As to whether it will trigger an audit - doesn't really matter. It was, most likely, reported to the IRS already by the receiving banks in the US, so not reporting it on your tax return (either as income or on form 3520) may indeed raise some flags.\"", "title": "" }, { "docid": "3db51ddabf9b2150a0a0e9952e75348c", "text": "Generally for tax questions you should talk to a tax adviser. Don't consider anything I write here as a tax advice, and the answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Does IRS like one payment method over other or they simply don't care as long as she can show the receipts? They don't care as long as she withholds the taxes (30%, unless specific arrangements are made for otherwise). She should withhold 30% of the payment and send it to the IRS. The recipient should claim refund, if the actual tax liability is lower. It's only consulting work at the moment, so most of the communication is done over phone. Should they start engaging in written communication to keep records of the work done? Yes, if she wants it to be a business expense. Is it okay to pay in one go to save money-transferring fees? Can she pay in advance? Again, she can do whatever she wants, but if she wants to account for it on her tax returns she should do it the same way she would pay any other vendor in her business. She cannot use different accounting methods for different vendors. Basically, she has not outsourced work in previous years, and she wants to avoid any red flags. Then she should start by calling on her tax adviser, and not an anonymous Internet forum.", "title": "" } ]	fiqa
408261340dbd7bb14145fd4b69dccf5b	What types of careers consistently make the most money entering with no background or social skills?	[ { "docid": "de739c66d71c43b7ed7b810b9d702bc1", "text": "\"You may think it sucks to have learned a crap ton of category theory, which is seemingly useless outside of academia, but have you considered picking up a \"\"functional\"\" programming language, e.g. Haskell? How about Java or, more recently, Scala? I would bet that you would love Haskell. And then you can make a fortune working at Jane Street Capital, which uses OCaml, another functional programming language. Time to get your hands dirty with some programming experience. Minimal social skills required, as you had wished for, plus maximal compensation, plus you get to keep using math that was sort of close to your research area. Good luck.\"", "title": "" }, { "docid": "bce48e2907397d3a7870a47c5e64fbfa", "text": "\"It sounds like you're massively under-selling yourself. You presumably have a degree to get into the PhD program, and you now have work experience as well. But you're applying for jobs in fast food restaurants. You may struggle to get a job because they will expect you to only be there a few weeks until you find a \"\"proper\"\" job.\"", "title": "" } ]	[ { "docid": "d8215c6954706a094273f3a834a35d61", "text": "I went through a very self damaging phase in my teens and wound up having to get a GED. I eventually followed it up with a punt for college and got a 2yr Assoc in Business. When I finally got my head out of my ass around my 30s, I realized how much I was stuck in the ~$25-30k bracket. I got an entry level job doing computer repair and started hitting the books & web. Soon, I was taking on web design and basic server admin duties. I got downsized and wound up looking again. Wound up in an entry level again doing first level support & inventory for a local ISP. I took an interest in networking and self studied for and got my Net+ and Sec+. I was acting as their local level network engineer but they weren't willing to change my pay or title so I began looking. I wound up getting picked up by a recruiter who helped me land a job that over doubled my pay and got me into a position where I'd get a lot of experience with high demand technologies and they'd sponsor my security clearance. I'm now closing in on the magical 6 digits but it's all about self motivation on constant education and learning. It should also be said that patience must be remembered. I knew I had dug a hole for myself and it wouldn't be overnight... I'm now in my early 40s so it's been a full decade of effort and just getting by.", "title": "" }, { "docid": "706fc4c602a14d6d7a58d167df266569", "text": "Florida. Piece work. Gutters. Oh and the industry is in such demand you can company hop all day all over the country. It's not much just climbing a ladder all day in the sun in 110 heat index 100% humidity hardly able to move after work. Oh that's also if you don't mind basically working minimum wage for the first year until you get good. Yeah no medical but no one seems to care if you're a junkie or alcoholic. Or call out every day. Or show up late because you can't be fired because there is no one to replace you.", "title": "" }, { "docid": "66dd66bcab65f67540b450c111ddba7b", "text": "Everything in life is a combination of luck and skill. Startups are no different. The risks are higher and most sensible people know and understand that. You know why we worship the successes? Because against all odds, those startups stood up to your salaried buddies who work for faceless large corporations and have tons of people and kicked their asses. At some point, they deserve it. You see startups as gambling, others see it as betting on yourself. Especially founding or joining an early stage startup. It's also taking on huge responsibility. In a mega-corp your failures and shortcomings will be covered and almost certainly won't tank the company. Your creativity probably won't flourish and their is an incentive to do just well enough. Why should you work your ass off for a company that you're not invested in other than a paycheck? Startups aren't for everyone. Hell, startups probably aren't for most people. But there are some people, those select few, who simply can't imagine not working for themselves, creating things, tinkering, trying to change the world. It's not even gambling to them, it's a way of life.", "title": "" }, { "docid": "b8b8662496d3ff734aa0b957108abe71", "text": "\"This quote has it almost backwards. Thomas J. Stanley's recent book (he's one of the duo who researched and wrote about The Millionaire Next Door) claims that the top occupation of millionaires is \"\"business owner / self-employed\"\" (28%). \"\"Real estate investor\"\" is lumped in with \"\"other\"\" (9%), and if the ordering is correct in the list, it's no more than 2% of the total. (source)\"", "title": "" }, { "docid": "d5afca16ee485c9157d01ff29ff09333", "text": "Hey OP, Don't listen to the negative comments, they don't know what they're talking about. I just got hired as an associate i-banker at the top investment bank in my country , which is roughly at the level of American bulge bracket banks. I'm an introvert. Yes, I like to drink and socialize, and part of the interview process involved cocktails and dinner with other candidates and several ibankers at all levels . But I-bankers are just geeks in suits. As long as you are comfortable in social settings , you don't need to be an alpha male or frat jock. I recommend meeting as many ibankers as possible. Have coffee chats and learn about the people that work in the industry. Good luck.", "title": "" }, { "docid": "31cc1b414ce9879753cb345ab95d2af5", "text": "\"Even the Wall Street jobs require skill, knowing how the stock market work, knowing how people work, etc. Even saying \"\"that luck is the main factor in the majority of cases of great wealth\"\" is still wrong. Really the only time luck is the real reason is non skill based gambling games (lottery, slots, etc), inheritance, and finding a wallet on the side of the road/street\"", "title": "" }, { "docid": "f16eb5e1d56ec6965130ccdeaf8313ae", "text": "70 isn't all that bad. And being a fund manager at a top fund is not the highest paying job per se. What's critical is to be a partner, or found your own fund, or have some ownership stake. There are sales people and lawyers who make more than PMs because they own/run the firm. And I would say it's impossible to do anything in finance anymore without a degree.", "title": "" }, { "docid": "b80363c7a594c079da8718c39651df41", "text": "It's all really personal preference and dependent on how your lifestyle/hobbies are. I have a friend who majored in Marketing and is now making 80k/yr out of college as he is also into web design. However, in my opinion, Finance would be the most exhilarating and Accounting would be the most stable.", "title": "" }, { "docid": "d92328b094a5df3c5d586bf8a4e5f54f", "text": "\"In finance What kind of amorphous bullshit is that? There are literally hundreds of different things that can varyingly be termed \"\"in finance\"\". If you want the traditional big bank job working as a spreadsheet monkey, very fucking difficult right now. Masters in finance doubling down on a BS: if it's from Princeton, great, if it's from Blue Mountain State, whatever. A CFA is getting common but it might help - it probably won't hurt at least. If you mean \"\"as a big shot trader for a hedge fund\"\" the answer is precisely impossible with only that on your resume. If you mean entry corporate finance, it's certainly possible (although you should not listen to anything I say in this regard as I've successfully avoided learning much about the subject thus far and have no intention of changing that, thus am as roughly as reliable on that as a wet paper towel).\"", "title": "" }, { "docid": "a8b3c91cd485070546d4ccdae881febf", "text": "Yes it is! You don't need the candidate waving a university diploma to find out in 5 minutes if they can read, write or understand. As someone who work with many interns, some of them from ivy league universities, I can confirm that many of them, 30%, have terrible attitudes, immaturity, spoiled, disorganized, and it all goes together with being not so smart, despite the degree. In the past, to be a teller in a bank, you did not have to finish high school. Just needed to be good with basic math.", "title": "" }, { "docid": "9f3cd600693eeed79ee84d83fd546f80", "text": "I work in marketing. Finance is probably the safest route with regards to opportunity and stability. Marketing can be expendable. Finance usually can't. That being said, it really depends on your personality type. Marketing people and Finance people are two different breeds. If you're the type that likes a very linear, matter-of-fact field, stick to finance where numbers don't lie. If your more of an extrovert who likes to think creatively in a field of a lot of unknowns, marketing may be the way to go.", "title": "" }, { "docid": "370abae7f82206dca7db05458d1152bf", "text": "Yeah, I've heard of actual people, like Jim-down-the-hall, making 1M due to those beautiful, god damned, golden handcuffs known as RSUs. This was at a valley tech giant though, so common, no. But in the realm of possibility without autism level natural abilities, yes.", "title": "" }, { "docid": "cbfd1c4095aaa7fb7d8ce00026bad72a", "text": "One overarching thing to keep in mind is that wherever you go with Finance if you work hard enough and climb the ladder, you can make decent money. I know CIO's, Market Stragesits and even CFO's, Portfolio Managers and CPA's that all live extremely comfortably, and all of them work outside of the IB industry, basically, IB isn't the end-all for making large sums of money. The main reason why it pays so much upfront is that of the hours you have to work if you look at their salary at an hourly rate, it's around 10-12 bucks an hour. Definitely think about the Double major thing though, or potentially just doing a minor. It would definitely look good on a resume, especially if it's something you also enjoy, but you've gotta keep that GPA high, and getting a 4.0 in CS is quite a challenge, to begin with. Pretty much any of the Series certifications can help you depending on where you want to go career-wise, obviously for some positions have certain series certifications won't be useful at all. It's also worth looking into the CFA program if you plan on doing Financial Analysis, but you'll need a sponsor for this, just like the Series certifications. Happy to help man, if you've got any other questions feel free to reach out. I'm in the same boat just trying to figure out what I want to do with my life to make decent money so I can take care of my friends and family, and live life to the fullest.", "title": "" }, { "docid": "3074a94094ff46b32f84a6d94a0651eb", "text": "Another way to do this is go to work for that company. Companies in this situation normally offer low pay, long hours, and stock options. Given a sufficient grant, it could be all very lucrative or worthless. Even if you have no electronics background you might be able to work in a different capacity. There were secretaries at various companies that became wealthy off of their stock options.", "title": "" }, { "docid": "bab1f2c4e07d0694af1c5867122fa73b", "text": "\"I used to run a telecommunications construction company and left to go back to school so that I could find a job in a \"\"white collar\"\" industry. Trade work is great when the money flows, but it's so cyclical that the downturns can rip your company/bank account apart. My sister that stayed in it is making 85k a year and I'm about to start a 45k a year job out of college. I guess I'll know in 5 years if I made the right choice, but I at least have a lot more job mobility than she does.\"", "title": "" } ]	fiqa
d058c73c3bca6b02bf0c0609b88648f9	In Canada, can a limited corporation be used as an income tax shelter?	[ { "docid": "c76a49480c763077c8874d844213b235", "text": "\"(Disclaimer: I am not an accountant nor a tax pro, etc., etc.) Yes, a Canadian corporation can function as a partial income tax shelter. This is possible since a corporation can retain earnings (profits) indefinitely, and corporate income tax rates are generally less than personal income tax rates. Details: If you own and run your business through a corporation, you can choose to take income from your corporation in one of two ways: as salary, or as dividends. Salary constitutes an expense of the corporation, i.e. it gets deducted from revenue in calculating corporate taxable income. No corporate income tax is due on money paid out as salary. However, personal income taxes and other deductions (e.g. CPP) would apply to salary at regular rates, the same as for a regular employee. Dividends are paid by the corporation to shareholders out of after-tax profits. i.e. the corporation first pays income tax on taxable income for the fiscal year, and resulting net income could be used to pay dividends (or not). At the personal level, dividends are taxed less than salary to account for tax the corporation paid. The net effect of corporate + personal tax is about the same as for salary (leaving out deductions like CPP.) The key point: Dividends don't have to be paid out in the year the money was earned. The corporation can carry profits forward (retained earnings) as long as it wants and choose to issue dividends (or not) in later years. Given that, here's how would the partial income tax shelter works: At some point, for you to personally realize income from the corporation, you can have the corporation declare a dividend. You'll then have to pay personal income taxes on the income, at the dividend rates. But for as long as the money was invested inside the corporation, it was subject only to lesser corporate tax rates, not higher personal income tax rates. Hence the \"\"partial\"\" aspect of this kind of tax shelter. Or, if you're lucky enough to find a buyer for your corporation, you could qualify for the Lifetime Capital Gains Exemption on proceeds up to $750,000 when you sell a qualified small business corporation. This is the best exit strategy; unfortunately, not an easy one where the business has no valuable assets (e.g. a client base, or intellectual property.) * The major sticking-point: You need to have real business revenue! A regular employee (of another company) can't funnel his personally-earned employment income into a corporation just to take advantage of this mechanism. Sorry. :-/\"", "title": "" }, { "docid": "a7f7384d35c387d2c34d790377bb93df", "text": "\"This scheme doesn't work, because the combination of corporation tax, even the lower CCPC tax, plus the personal income tax doesn't give you a tax advantage, not on any realistic income I've ever worked it out on anyway. Prior to the 2014 tax year on lower incomes you could scrape a bit of an advantage but the 2013 budget changed the calculation for the tax credit on non-eligible dividends so there shouldn't be an advantage anymore. Moreover if you were to do it this way, by paying corporation tax instead of CPP you aren't eligible for CPP. If you sit with a calculator for long enough you may figure out a way of saving $200 or something small but it's a lot of paperwork for little if any benefit and you wouldn't get CPP. I understand the money multiplier effect described above, but the tax system is designed in a way that it makes more sense to take it as salary and put it in a tax deferred saving account, i.e. an RRSP - so there's no limit on the multiplier effect. Like I said, sit with a calculator - if you're earning a really large amount and are still under the small business limit it may make more sense to use a CCPC, but that is the case regardless of using it as a tax shelter because if you're earning a lot you're probably running a business of some size. The main benefit I think is that if you use a CCPC you can carry forward your losses, but you have to be aware of the definition of an \"\"allowable business investment loss\"\".\"", "title": "" }, { "docid": "348ecf0fe173c503a0275e31aa820056", "text": "Revenue Canada allows for some amount of tax deferral via several methods. The point is that none of them allow you to avoid tax, but by deferring from years when you have high income to years when you have lower income allows you to realize less total tax paid due to the marginal rate for personal income tax. The corporate dividend approach (as explained in another answer) is one way. TFSAs are another way, but as you point out, they have limits. Since you brought TFSAs into your question: About the best and easiest tax deferral option available in Canada is the RRSP. If you don't have a company pension, you can contribute something like 18% of your income. If you have a pension plan, you may still be able to contribute to an RRSP as well, but the maximum contribution amount will be lower. The contribution lowers your taxable income which can save you tax. Interest earned on the equity in your RRSP isn't taxed. Tax is only paid on money drawn from the plan because it is deemed income in that year. They are intended for retirement, but you're allowed to withdraw at any time, so if you have little or no income in a year, you can draw money from your RRSP. Tax is withheld, which you may or may not get back depending on your taxable income for that year. You can think of it as a way to level your income and lower your legitimate tax burden", "title": "" } ]	[ { "docid": "ee0f34fa27cb4ca84be860d651f060f3", "text": "You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider.", "title": "" }, { "docid": "cdfa745942f12fffa09d6b579f5b9403", "text": "That's the foundation of Limited Liability. There is a corporate veil that protects your personal assets from that of your business. The corporate veil can be pierced if you do certain stuff and thus your personal assets will get effected. This allows people to start companies and innovate more and take more risks knowing that they could not be personally liable if the business folds.", "title": "" }, { "docid": "e8edffa2e7f767881481e995bd8dca08", "text": "\"My late answer is: Be aware of the difference of being a contractor and being an employee. I am not sure of the laws in Canada, but in the United States lots of small companies like to hire people as \"\"contractors\"\" but make them work under rules that fall into employee. The business is trying to avoid paying payroll taxes, which is fine, but make sure you know your rights and responsibilities as a contractor vs employee. You can check with your state's Bureau of Labor and Industry in the US, but I am sure wherever you are from there is a government agency to do the same thing.\"", "title": "" }, { "docid": "e7e01f4693da28ecd3ef88fbcc7b66c1", "text": "\"Not normally, for a limited liability company anyway. In extreme circumstances a court may \"\"lift the veil\"\" of incorporation and treat shareholders as if they were partners. If you are an office bearer or a director that is found to have breached duties/responsibiities then that is another matter. Dim views can be taken of shonky arrangents for companies formed for activites not of a bona fide business nature too.\"", "title": "" }, { "docid": "7fd6d379a23acdd8369d63e87fb51d0e", "text": "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.", "title": "" }, { "docid": "b2c740c35ddf20f575c2c47f14a14738", "text": "The only way you can save taxes is by starting a limited company, not paying yourself any salary, so you pay 20% corporation taxes, you can take I think £5000 a year dividends tax free, and leave the rest in the company account, and don't touch it until you make less money.", "title": "" }, { "docid": "7455173c32b84deeccb016729e52c76d", "text": "You don't have to wait. If you sell your shares now, your gain can be considered a capital gain for income tax purposes. Unlike in the United States, Canada does not distinguish between short-term vs. long-term gains where you'd pay different rates on each type of gain. Whether you buy and sell a stock within minutes or buy and sell over years, any gain you make on a stock can generally be considered a capital gain. I said generally because there is an exception: If you are deemed by CRA to be trading professionally -- that is, if you make a living buying and selling stocks frequently -- then you could be considered doing day trading as a business and have your gains instead taxed as regular income (but you'd also be able to claim additional deductions.) Anyway, as long as your primary source of income isn't from trading, this isn't likely to be a problem. Here are some good articles on these subjects:", "title": "" }, { "docid": "ce251ce6d31823ac7124eae816392f7c", "text": "Do you have any insight on average effective rates paid by SE owners? As a counterpoint to your (very valid) links, filing as S-corp allows for taxes on distributions to be exempt from payroll tax and taxed at much lower rates. Also, being SE allows for various deductions not possible for wage earners. There's probably other examples not immediately coming to mind. Also, SE taxes equal taxes otherwise paid by employer + employee. It's just that those employer taxes don't appear on the employee's paystub so not everyone realizes this.", "title": "" }, { "docid": "e48543d05d46d98fd78d2a185a230f59", "text": "The only possibility that I've seen in the past is if some of the income is for deferred services which are to be delivered in the following tax year, a portion of the income can be deferred. Also, agree that you should be an S-corp and talk to another CPA if yours hasn't told you that yet.", "title": "" }, { "docid": "a03156df5f0b04b4961d56ac075f92a1", "text": "I think you are overcomplicating the scenario by assuming a benefit that doesn't exist. Assume an employee earns 50k, before considering the MSP. The corporation wants to cover the MSP. They have two options: increase the salary to $50,900, or keep the salary the same and pay for the MSP directly. Both options increase the employee's taxable income by $900. Both options decrease the corporation's income by $900. Net tax for each is unchanged. *Note - I couldn't find any specific reference to the MSP in income tax documentation on either BC Finance's or CRA's website. I am assuming that it is treated as a regular cash benefit, though I am not 100% convinced this is the case. If I am wrong in this please provide a comment below.", "title": "" }, { "docid": "ae5066c9a5bc07ef196332219cdba89b", "text": "\"I'm no lawyer and no expert, so take my remarks as entertainment only. Also see this question. If you have a U.S. SSN which is eligible for work, they may be able to pay you on 1099 basis with your SSN as a sole proprietor, unless they have some personal reason for avoiding that. So perhaps try asking about that specifically. HR policies can be weird and tricky, maybe a nudge in the right direction will help. Not What You Asked: regardless, I might recommend you register as an LLC and get an EIN (sort of SSN for companies) for a variety of reasons. It's called a \"\"limited liability\"\" company for a reason. You may also have an easier time reaping various business-related rewards, like writing off expenses. If you do so, consider a state with no income tax like Wyoming. (Or, for convenience sake, WA if you live in BC, or maybe NH if you live in Ontario.. etc.)\"", "title": "" }, { "docid": "bc5e4cb4631274d24c6ed6886da7d9c4", "text": "\"There are countries out there that are known as tax havens, where they offer companies low or no taxes on earned revenue. I haven't looked into this in over a decade, but recall that countries like the Cayman Islands, Switzerland, Ireland, and Nauru, to name a few fit that tag. But like bstpierre stated, there's a reason why the IBM's of the world can pull that off easier then us mere mortals. They have the financial clout to make sure they have accountants that dot every i, cross every t, and close every loophole that would give an \"\"in\"\" to the folks at the IRS, CRA, Inland Revenue, or who have you.\"", "title": "" }, { "docid": "8c53d1b2149e29a06ade529876aca990", "text": "An LLC is a very flexible company when it comes to taxation. You have three basic tax options: There are other good reasons to create an LLC (mainly to protect your personal assets) so even if you decide that you don't want to deal with the complications of an S-Corp LLC, you should still consider creating a sole proprietorship LLC.", "title": "" }, { "docid": "103006facd061e7a355e43dcd43e9eaf", "text": "You would report the overall income on your T1 general income tax return, and use form T2125 to report income and expenses for your business. Form T2125 is like a mini income-statement where you report your gross revenue and subtract off expenses. Being able to claim legitimate expenses as a deduction is an important tax benefit for businesses big and small. In terms of your second question, you generally need to register for a business number at least once you cross the threshold for GST / HST. If you earn $30,000/year (or spread over four consecutive quarters) then charging GST / HST is mandatory; see GST/HST Mandatory registration. There are other conditions as well, but the threshold is the principal one. You can also register voluntarily for GST / HST even if you're below that threshold; see GST/HST Voluntary registration. The advantage of registering voluntarily is that you can claim input tax credits (ITC) on any GST that your business pays, and remit only the difference. That saves your business money, especially if you have a lot of expenses early on. Finally, in terms of Ontario specifically (saw that on your profile), you might want to check out Ontario Sole Proprietorship. There are specific cases in which you need to register a business: e.g. specific types of businesses, or if you plan on doing business under a name other than your own. Finally, you may want to consider whether incorporating might be better for you. Here's an interesting article that compares Sole Proprietorship Versus Incorporation. Here's another article, Choosing a business structure, from the feds.", "title": "" }, { "docid": "af84ae777b49e1156576a487ed32528f", "text": "Taxing citizens on global income caused by tax inversion, not the cause of tax inversion. If yourwebsite.com makes $1mil, and you pay yourwebsite.ca $1m for rights to the name, that's inversion. Your company, and you, as the owner, have $1m income in Canada. All of which came from US revenue. I'm not saying the tax system is great or anything. There just seems to be a miss understanding.", "title": "" } ]	fiqa
603e9bded7c73db3c690c70edd611968	When does a pricing error become false advertising?	[ { "docid": "6f74e06785dd589d7d2e3505795b36bf", "text": "\"It's definitely annoying, but it's not necessarily false advertising. There is no rule or law that says they have to fix a pricing error at all, let alone within a certain period of time. Unfortunately they have no obligation to do business with you unless they take (and keep) your money. If they canceled the order and returned your money you have no binding agreement with them. On top of that, in the US... 'misleading advertising' usually refers to \"\"Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities\"\" (Lanham Act, 15 U.S.C.A. § 1125(a)). The main criteria that they evaluate before taking legal action is whether or not someone has suffered harm or loss due to the reliance on the bad information. But you're in Europe. The EU ideas behind misleading advertising tend to focus a lot more on comparing one product to someone else's and making subjective claims or false promises. Pricing does come up, but still, you need to have an ability to prove that you suffered harm or a loss from the business' actions. Even if you were able to prove that, to force the business to change its price catalog, you would need to go through legal proceedings, demonstrate the harm that you've sustained, and then have a judge decide in your favor and order the supplier to comply. My guess is that it's just not worth it for you, but you haven't specified if this is just an annoying shoe-shopping experience or if you are regularly experiencing bait-and-switch tactics from a supplier that is a crucial part of a business operation. If it's the former, just like a physical shop reserves the right to kick you out if you're not behaving, (but usually doesn't because they'd like to keep you as a customer), an online shop can update its prices whenever they like. They can change their prices too, and cancel orders. If it's the latter, then start putting together some documentation on how many times this has happened and how it has damaged your business. But before you get on the warpath I would recommend you look for another place to buy whatever you have in mind, or else try a pound of sugar in your approach to this supplier... My own business experience has shown that can go a lot way in figuring out a mutually beneficial resolution. If you want to see a bit more... Here is the EU Justice Commission's website on false advertising, Here is a PDF leaflet from the UK Office of Fair Trading that spells out what is explicitly not allowed from a business by way of advertising & business practices.\"", "title": "" } ]	[ { "docid": "ed704cf268161edfe870f77e2aa24052", "text": ">I don’t really like when apps show me ads pasted all over their interface, so this option was instantly crossed out. I did a double-take when the author said the above. It's an article about using empirical evidence to set price and he discards an option based on personal preference.", "title": "" }, { "docid": "e513a42cc62175045e50d61a634a5d83", "text": "If an offered price is below what people are willing to sell for, it is simply ignored. (What happens if I offer to buy lots of cars as long as I only have to pay $2 each? Same thing.)", "title": "" }, { "docid": "817577b7bcd07bbd91bb72275efb94be", "text": "Dispute the charge. Receiving the wrong product is grounds for dispute.", "title": "" }, { "docid": "24f8ef68a02f2c845e9305c18857f6f0", "text": "There are a few scenarios I see possible: 1. Risk parameters in the algo were set very conservatively. Putting quotes out and canceling them is very common. 2. It was looking to exploit situations where someone rips through the book with a market order. 3. It was reacting too slowly to signals, and chasing opportunities that had already passed. Other comments: What do you believe front running is? Your version differs from the textbook definition. Quote taxes are more effective than minimum order durations. I wrote about how that works in a previous post in this thread.", "title": "" }, { "docid": "1c7c83c86016cc0041271214675e9c13", "text": "We actually have [a thread](http://www.reddit.com/r/GroceryStores/comments/10sldg/im_so_tired_of_this_grocery_shrinkray_bullshit/) about that going on right now in r/grocerystores. It is a fine line to walk. No one wants to visibly raise prices. But they are still showing price per pound/ounce on the tag (right? Every store I have been in shows that). The consumer is partly to blame for allowing those shenanigans.", "title": "" }, { "docid": "26064c80f92e50da1d5c5af2ca98d9d9", "text": "When I ran a gas station, our price was largely set by our neighbors-- the other gas stations in the area. We couldn't go below the current cost of replacement gas, but other than that we wanted to be at .05 over the average. (We got away with charging more because we were the last station on a major road.) Everybody else did the same thing. Also, we only set prices once a day, early in the morning before the commuter rush. Changing prices while somebody is pumping gas Was Not Done, for fairly obvious reasons. So, you'd get these ripples of price-changing, as one station changed its price, and then all its neighbors would react to that the next day, and then THEIR neighbors would change the day after that, and so on.", "title": "" }, { "docid": "f48a4f2f79c6876582055e16e3166128", "text": "\"Ah to be clear, \"\"bad customer\"\" here means someone that ends up costing the company more money than they are worth to you. The article explictly says that a lot of the problems that Bob had were nothing to do with their product.\"", "title": "" }, { "docid": "c30bf41ef74f9c650df65cedcfa60092", "text": "As I understand it, the correct price is any point between the minimum the seller is willing to accept and the maximum the buyer is willing to pay. These values are influenced by a number of factors, including market conditions, cost of production and immediate need. There's also a sense of fairness and expectation that influences these numbers. People don't want to pay a much higher price or accept a much lower price than they think the other party should agree to. For example, in the event of a sudden actual or anticipated shortage in some commodity consumer good, say... gasoline, it would make sense for sellers to raise the price significantly. In the short term, consumers of gasoline are very price-insensitive and most will pay more than double the usual price to obtain it. This behavior is commonly seen as unfair on the part of the seller - to the point that certain variations of it are illegal in some jurisdictions. Economists would describe it as rational. Oddly, people don't seem to be as upset about buyers offering low prices in the event of a sudden increase in highly motivated sellers. When people do tend to get upset is if the buyers have a profit motive; they know the price decrease is temporary and are willing to buy and hold the asset to make a profit later. Even so, it seems to me that it's much rarer for such behavior to be illegal. The underlying objection, as far as I can tell is to what is perceived as greed.", "title": "" }, { "docid": "9deab02a93f8610d92c4ad9185f964b0", "text": "You are confusing manufacturing cost and listed price. They are being sold for less than listed price. There is no way they are being sold for 1/3rd of manufacturing cost. They could be sold for less than manufacturing cost but future support will be factored into that sale so they would still be a loss leader.", "title": "" }, { "docid": "137a3e87be092013b7b45a65eb330fc6", "text": "The sales manager and/or finance manager applied a rebate that did not apply. It's their fault. They have internal accounts to handle these situations as they do come up from time to time. The deal is done. They have no legal ground.", "title": "" }, { "docid": "6232478af3a94f2588dfd3e1e8f816da", "text": "This has happened to me several times while trying to travel. See a flight listed for one price, go through the process and it ends up being 50-100 more. Not sure which airlines just in general. I dont see how 2 seperate sites can have the same price problem. and what changes in the 5-10 minutes it takes someone to enter their info? do gas and costs go up that much in 10 minutes? Just like extra ticket fees and everything....i just wish companies would start putting the FULL price up front. extra fees and all.", "title": "" }, { "docid": "02bb688428d59b63300e88a3256cc5c7", "text": "Just the opposite, if you can, offer all prices! Make a premium product, and regular one, a lite version, and so on. Capture all price points. The premium version's price gives you anchoring so your less expensive product will appear cheap even if it isn't. This also gives users an upgrade path so the way to full price is baby steps.", "title": "" }, { "docid": "a31a26bc40d98a655b0e3bc57f2a9c89", "text": "\"However, it also anti-correlates: advertising these features of their product lets them charge more, and the higher price means they can afford better inputs. And customers who are willing to spend extra money on \"\"natural\"\" are also more willing to spend extra money on taste.\"", "title": "" }, { "docid": "db3816bf403891ee9fd6cf579b261951", "text": "What you found is that when your were on website X on day y when you clicked on the link they told you to buy 7 stocks and you performed an experiment, but the values went down. Somebody else on website A on day B saw a lightly different list, they may have been flat. But if you were on website W on day D that list hit the jackpot. Which of the three decided that the people running the ad knew what they were talking about? They could have tailored the list based on the nature of the website. Sports and recreation ones on ESPN, high tech on a computer focus site. They could have varied the size of the lit, they could have varied the way they described their analysis. They could have even varied the name of the expert to make it sound familiar or authoritative. What you found was a marketing plan. It may have been a scam, or it may have been just a way to try and convince you they know what they were doing. If you clicked on the wrong list, they probably lost you as a potential customer, unless you can convince yourself that they were close, and deserve a second look....", "title": "" }, { "docid": "99a1c389d5216cd5cdf955b049a2fac6", "text": "A lower Price/Book Value means company is undervalued. It could also mean something horribly wrong. While it may look like a good deal, remember;", "title": "" } ]	fiqa
1b093e5da6e3ba9540866d230eae6347	Where can I find a Third Party Administrator for a self-directed solo 401K?	[ { "docid": "c86927a383eb005d90ee36730dcda654", "text": "You setup a self-directed solo 401k by paying a one time fee for a company to setup a trust, name you the sole trustee, and file it with the IRS. None of these companies offer TPA because it opens them up to profit leaching liability. After you have your trust setup, you can open a brokerage account or several with any of the big names you want (Vanguard, Fidelity, Ameritrade, etc), or just use the money to flip houses, do P2P lending, whatever, the world is your investment oyster. If the company has recurring fees you need to ask what is going on because if they aren't offering TPA services, then what the heck could they be charging you for? I did see one company, I think it was IRA Financial Group, that had the option of having a CPA do TPA for you for a recurring fee, but I would pass on that. The IRS administration requirements are typically just the 5500-EZ that you have to file as a hard copy by July 31 if your investments are worth more than $250k, on December 31. Yes, you have to get the actual form from the IRS, write on it with a pen and mail it to them every year, barbaric. You can either have your accountant do it or do it yourself. If you're below $250k just google solo 401k rule change two or three times a year and don't try to launder money. If anything, the rules will loosen with time, I don't imagine the Republican Congress cracking down on small business owners any time soon.", "title": "" }, { "docid": "e0f8c5f28061ad8e75404c5fcc51dbaf", "text": "Fidelity Investments offers Solo 401(k) plans without any management fees. The plan administrator is typically the employer itself (so, your business, or you as the principal manager). You (as the individual employee) are the participant.", "title": "" } ]	[ { "docid": "27190f396673fa1761500386491ffe9a", "text": "My former accountant, used to provide this service as part of him doing my taxes. During the off season, he would provide a planning session and he would review strategies that I might look into. Since he did not make any money off of providing investments, he was about as unbiased as one could be. However, something like that might not be enough for you guys. You could go with someone online, Scottrade is going into the business of providing advice, as well as Charles Schwab or Fidelity, but you might need someone more personal. In that case, I would use my network. Talk to people, ask who they use, like, and respect. I would say it is very easy to find mediocre investment advisers, the good ones are hard. I would look for one that teaches. It is very easy to tell someone what to do, much harder to teach them what is the right thing. One thing that is easy about your situation: Planning to buy a home. Put money for a down payment in a high interest savings account. What I mean by high interest, is they still pay almost nothing. You can't really make a mistake. If you find one with .5% instead of .85%, what is the real difference after 5 years? About $180?", "title": "" }, { "docid": "1a179f846cd675420143bd596b5d26a9", "text": "Can't tell you where to go for a good policy, but I can tell you that most brokers make a hefty commission out of your payments for at least a year before you even start funding the tax sheltered investment account that you're trying to buy under the umbrella of life insurance. You'll have to do a lot of homework to hunt down a reputable discount broker or a direct policy purchase from the insurance company. Life insurance requires insurable need. The description is vague enough, that you can probably still get the account despite being a single male with no apparent heirs to benefit, but it raises the question of why you are buying the insurance. Whole life policies require you to maintain a certain ratio of investment to premium payment and you will likely never be able access all of the money in the account for your own personal usage. Compare several policies from several brokers and companies. Read all the critical sources you can about the pitfalls and dangers of commissions, fees and taxes eating the benefits of your account. Verify that the insurance company you buy the policy from is financially stable after the market crash. You are paying a commission to pool your money into their investment fund, and if your insurer goes under, you'll have to get a portion of your money (possibly only the principle) back from the state insurance commissioner. Some companies sold pretty generous policies during the bubble and have cut their offerings way down without fixing their marketing literature and rosy promises. Finally, let us know what you find. It never hurts to see hard numbers and to run multiple eyes over the legalese in these contracts.", "title": "" }, { "docid": "fb7429f700bf206a2c989ac07d7b563b", "text": "From the employer side there are A LOT of legal duties attached to sponsoring a 401(k). If you are asking this question I would not suggest attempting to meet all of the regulations related to handling employee money internally. There are certain annual filings, periodic notices, accounting etc related to these kinds of plans, and the fines for non-compliance are extraordinary. You would be far better off seeking a separate vendor, in my opinion.", "title": "" }, { "docid": "8eabb4ee0cac8a619ce1562d3648991d", "text": "\"Your 401K (and IRA) is a legally distinct entity from yourself. In fact, it is a \"\"trust,\"\" and your Administrator is a \"\"trustee,\"\" while you are both creator and benefactor. This fact, and the 10% early withdrawal penalty, makes it immune from most judgments. The IRS can \"\"levy\"\" your 401K or IRA for back taxes, but must waive the 10% penalty (under the 1997 Tax Reform law). That gives them the power to do what most others can't. A \"\"tricky\"\" banker may persuade you to take money out of your 401K to pay the bank. If you do, s/he has won. But s/he can't go after your 401k.\"", "title": "" }, { "docid": "4217f4b58b17bf01e6deb8e2a43bf894", "text": "The Employee Benefits Security Administration within the US Department of Labor is tasked with keeping track of pension and 401K programs. The even have a website to search for abandoned plans: it helps participants and others find out whether a particular plan is in the process of being, or has been, terminated and the name of the Qualified Termination Administrator (QTA) responsible for the termination. The Employee Benefits Security Administration discuss all types of details regarding retirement programs. This document What You Should Know About Your Retirement Plan has a lot of details including this: If your former employer has gone out of business, arrangements should have been made so a plan official remains responsible for the payment of benefits and other plan business. If you are entitled to benefits and are unable to contact the plan administrator, contact EBSA electronically at askebsa.dol.gov or by calling toll free at 1-866-444-3272. There are also EBSA offices spread thought the United States", "title": "" }, { "docid": "7656ef45cba6e4625dec01393a52132b", "text": "My employer matches 1 to 1 up to 6% of pay. They also toss in 3, 4 or 5 percent of your annual salary depending on your age and years of service. The self-directed brokerage account option costs $20 per quarter. That account only allows buying and selling of stock, no short sales and no options. The commissions are $12.99 per trade, plus $0.01 per share over 1000 shares. I feel that's a little high for what I'm getting. I'm considering 401k loans to invest more profitably outside of the 401k, specifically using options. Contrary to what others have said, I feel that limited options trading (the sale cash secured puts and spreads) can be much safer than buying and selling of stock. I have inquired about options trading in this account, since the trustee's system shows options right on the menus, but they are all disabled. I was told that the employer decided against enabling options trading due to the perceived risks.", "title": "" }, { "docid": "07c75adfe6ef2da84f3e05878e67e85f", "text": "My employer matches 6% of my salary, dollar for dollar. So you have a great benefit. The self-directed side has no fees but $10 trades. No option trading. Yours basically allows you to invest your own funds, but not the match. It's a restriction, agreed, but a good plan.", "title": "" }, { "docid": "447c3f654c405b11900b5814b150328a", "text": "Alright, team! I found answers to part 1) and part 2) that I've quote below, but still need help with 3). The facts in the article below seem to point to the ability for the LLC to contribute profit sharing of up to 25% of the wages it paid SE tax on. What part of the SE tax is that? I assume the spirit of the law is to only allow the 25% on the taxable portion of the income, but given that I would have crossed the SS portion of SE tax, I am not 100%. (From http://www.sensefinancial.com/services/solo401k/solo-401k-contribution/) Sole Proprietorship Employee Deferral The owner of a sole proprietorship who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A sole proprietorship may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (1) the deduction for half of self-employment tax and (2) the deduction for contributions on your behalf to the Solo 401(k) plan. A business entity’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline. Single Member LLC Employee Deferral The owner of a single member LLC who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A single member LLC business may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (i) the deduction for half of self-employment tax and (ii) the deduction for contributions on your behalf to the Solo 401(k). A single member LLC’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline.", "title": "" }, { "docid": "8e33d3966285f67dd5f2d0f6ae221bcf", "text": "401(k) plans, 403(b) plans, IRAs etc all require more paperwork than a non-tax-advantaged investment. As a result, most such plans (with Vanguard as well as with other management companies) offer only a small set of investment options, and so it costs the plan sponsor (you wearing your Employer hat) money if you want to add more investment options for your Solo 401(k) plan). Note that with employer-sponsored retirement plans, investments in each mutual fund might be coming in small amounts from various employees, much less than the usual minimum investment in each fund, and possibly less than the minimum per-investment transaction requirement (often $50) of the fund group. Taking care of all that is expensive, and it is reasonable that Vanguard wants to charge you (the Employer) a fee for the extra work it is doing for you. When I was young and IRAs had just been invented (and the annual contribution limit was $2000 for IRAs), I remember being charged a $20 annual fee per Vanguard fund that I wanted to invest in within my IRA but this fee was waived once my total IRA assets with Vanguard had increased above $10K.", "title": "" }, { "docid": "0eb36cb23e54bb663852701290267fcd", "text": "My two-cents, read your plan document or Summary Plan Description. The availability of in-service withdrawals will vary by document. Moreover, many plans, especially those compliant with 404(c) of ERISA will allow for individual brokerage accounts. This is common for smaller plans. If so, you can request to direct your own investments in your own account. You will likely have to pay any associated fees. Resources: work as actuary at a TPA firm", "title": "" }, { "docid": "f36ca2639d4852d8262d20e589d6ad31", "text": "You can open a self-employed 401k, here's an example. You can deposit up to 50K (including the personal cap and the profit sharing/matching portion).", "title": "" }, { "docid": "09831bc94519dff461f2559278ffa955", "text": "Read the Forbes article titled IRA Adventures. While it's not the detailed regulations you certainly need, the article gives some great detail and caution. You may be able to do what you wish, but it must be structured to adhere to specific rules to avoid self dealing. Those rules would be known by the custodians who would help you set up the right structure, it's well buried within IRS regs, I'm sure. Last, in general, using IRA funds to invest in the non-traditional assets adds that other layer of risk, that the investment will be deemed non-allowed and/or self-dealing. So, even if you have the best business idea going, be sure you get proper council on this.", "title": "" }, { "docid": "b36177c86a000963a421bfef2ab82829", "text": "I use the self-directed option for the 457b plan at my job, which basically allows me to invest in any mutual fund or ETF. We get Schwab as a broker, so the commissions are reasonable. Personally, I think it's great, because some of the funds offered by the core plan are limited. Generally, the trustees of your plan are going to limit your investment options, as participants generally make poor investment choices (even within the limited options available in a 401k) and may sue the employer after losing their savings. If I was a decision-maker in this area, there is no way I would ever sign off to allowing employees to mess around with options.", "title": "" }, { "docid": "1fa75ab8a23b7d77ea05b2bba4111506", "text": "\"You want a fee-only advisor. He charges like an architect or plumber: by the hour or some other \"\"flat fee\"\". That is his only compensation. He is not paid on commission at all. He is not affiliated with any financial services company of any kind. His office is Starbucks. He does not have a well lit office like the commission broker down the street. He does not want you to hand him your money - it stays in the brokerage account of your choice (within reason - some brokerage accounts are terrible and he'll tell you to get out of those). He never asks for the password to your brokerage account. Edit: The UK recently outlawed commission brokers. These guys were competitive \"\"sales types\"\" who thrive on commissions, and probably went into other sales jobs. So right now, everyone is clamoring for the few proper financial advisors available. High demand is making them expensive. It may not be cost-effective to hire an advisor; you may need to learn it yourself. It's not that hard. Ever hear of a plumber who works totally for free, and makes his money selling you wildly overpriced pipe? That's what regular \"\"financial advisors\"\" are. They sell products that are deliberately made unnecessarily complex. The purpose is first, to conceal sales commissions and high internal fees; and second to confuse you, so the financial world feels so daunting that you feel like you need their help just to navigate it. They're trying to fry your brain so you'l just give up and trust them. Products like whole life and variable annuities are only the poster children for how awful all of their financial products are. These products exist to fleece the consumer without quite breaking the law. Of course, everyone goes to see them because they have well lit offices in every town, and they're free and easy to deal with. Don't feel like you need to know everything about finance to invest. You don't need to understand every complex financial product that the brokerage houses bave dreamed up: they are designed to conceal and confuse, as I discuss above, and you don't want them. The core of it is fairly simple, and that's all you really need to know. Look at any smaller university and how they manage their endowments. If whole life, annuities and those complex financial \"\"products\"\" actually worked, university endowments would be full of them. But they're not! Endowments are generally made of investments you can understand. Partly because university boards are made of investment bankers who invented those products, and know what a ripoff they are. Some people refuse to learn anything. They are done with college and refuse to learn anything more. I hope that's not you. Because you should learn the workings of everything you're investing in. If you don't understand it, don't buy itl And a fee-only financial advisor won't ask you to. 1000 well-heeled, well-advised university endowments seek the most successful products on the market... And end up choosing products you can understand. That's good news for you.\"", "title": "" }, { "docid": "bb7e57438c6ed8ba47bd2bd2a7ae324a", "text": "I use healthequity. It's just the one I was given, but they actually have really good fund options. There's a .396% yearly administration fee to access their low-cost funds, but the fund fees are really low (.02% for VIIIX, .03% for VBMPX)", "title": "" } ]	fiqa
ab628cd1cdd55010c13798286b6bdd4b	Why do some online stores not ask for the 3-digit code on the back of my credit card?	[ { "docid": "59ffc40b4113b4fcee9b4be04039d9c9", "text": "As a general premise: In most of the online transactions in case of dispute the benefit of doubt is given to the customer. IE if the customer refuses to pay and claims that its not his transaction, the card company reverses the charges and does not pay the merchant (or recovers if its already paid). There are many types of online vendors who use a variety of methods to ensure that they are not at loss. Some of these are:", "title": "" }, { "docid": "c84f0f572bfc3e7a3e4c9442340d5088", "text": "Given that the laws on consumer liability for unauthorized transactions mean no cost in most cases, the CVV is there to protect the merchant. Typically a merchant will receive a lower cost from their bank to process the transaction with the CVV code versus without. As far as the Netflix case goes, (or any other recurring billing for that matter) they wouldn't care as much about it because Visa/MC/Amex regulations prohibit storage of the CVV. So if they collect it then it's only used for the first transaction and renewals just use the rest of the card info (name, expiration date, address). Does the presence of CVV indicate the merchant has better security? Maybe, maybe not. It probably means they care about their costs and want to pay the bank as little as possible to process the transaction.", "title": "" }, { "docid": "5fee4c2ada624f9f9dfd3cf43e073b65", "text": "There are different ways of credit card purchase authorizations. if some choose less secure method it's their problem. Merchants are charged back if a stolen card is used.", "title": "" }, { "docid": "d41d8cd98f00b204e9800998ecf8427e", "text": "", "title": "" }, { "docid": "e7c109089f649f7783cff28efe4472e4", "text": "Some businesses verify the shipping address with the credit card company, and refuse to ship to an alternate address without additional, offline verification. Of course, this is only useful for physical goods.", "title": "" }, { "docid": "8862161d023090a19e10c93cd537f166", "text": "@Jeremy Using CVV doesn't decrease the transaction cost. I know this because I have quotes for CC transactions and the cost/transaction doesn't depend on using CVV. That said we don't plan to use CVV because we sell insurance and the likelihood that someone who steals CC will buy insurance is very low.", "title": "" }, { "docid": "a7af83dec07deef1a5cd58c68bc6ad1c", "text": "The truth is that Visa does not require a merchant to enter the cvv number before authorizing a transaction. The only information that is really needed is the credit card number and expiration date.", "title": "" } ]	[ { "docid": "fe6c6b035064b9df1adf8d9f29e0d9c0", "text": "In some case the customer wants the name to be cryptic or misleading. They don't want to advertise the true nature of the business they visited. In other cases the transaction may be reported through another business. A few years ago the local PTA was having a silent auction as a fundraiser. A local business allowed the PTA to use their credit card reader to process transactions over a certain amount. Of course when the credit card statement arrived it looked like you spent $500 at the florist. I have seen PayPal listed when donating to some small charities. I have noted another case where confusion can occur. I used a debit card to buy a soda from a vending machine: the name and location were the name of the vending machine company and the location of their main office. It didn't say soda machine city A. It said Joe's vending company city B. In most cases the business and the credit card company want to make it easy to identify the transactions to keep the cost of research and charge backs to a minimum.", "title": "" }, { "docid": "77f11f50bbd997629b688c1747b28103", "text": "The reason is in your own question. The answer is simple. They use that code to tax the product otherwise it would just be out of pocket expenses.", "title": "" }, { "docid": "58798764a5f701a63768787f72841c06", "text": "Chip and Pin cards are popular in Europe, however in the US we don't have them. Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them. Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway).", "title": "" }, { "docid": "1efe012004c978e7b829c44528c40646", "text": "Lol you moron. Chip and pin significantly reduced physical retailer fraud when we introduced it in Europe (a decade ago? 15 years?) - a signature is absurdly easy to fake and retailers have little to no way of protecting against it.", "title": "" }, { "docid": "a27715be676e47c2c991c5717c23bdfa", "text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account: It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be more secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were made after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement after that window for any charges has expired, - When that final statement is paid (or if it is zero), THAT is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"", "title": "" }, { "docid": "898499ec5c013cb2425c03238bfdc185", "text": "Credit card companies organize types of businesses into different categories. (They charge different types of businesses different fees.) When a business first sets up their credit card processing merchant account, they need to specify the category. Here is a list of categories that Visa uses. Grocery stores and supermarkets are category number 5411. Other types of businesses, such as the examples you provided in your question, have a different category number. American Express simply looks at the merchant category code for each of your transactions and only gives you rewards for the ones in the grocery store category. It's all automated. They likely don't have a list of every grocery store in the US, and even if they did, they would probably not provide it to the public, for proprietary reasons. If you are in doubt about whether or not a particular store is in the grocery category, you'll just have to charge it to your card and see what happens. Often, the category of transaction will be shown for each transaction on your credit card's website.", "title": "" }, { "docid": "f7c2a78b891bb6313aa4aef5e470df86", "text": "\"Do not store credit cards on your servers! You will get into HUGE trouble if they get stolen. Instead, the whole credit card transaction should be done in a \"\"frame\"\" on a web that is handle by a credit card processor you chose. Once the transaction is finished, you get a code for the credit card number (masked credit card number) that no-one can convert back to a credit card number (except the processor). When you need to charge more or give refund, you use that code to tell the processor what credit card to make the charges/credits to.\"", "title": "" }, { "docid": "398bfb864e3bdee31e346f5c9836893b", "text": "It depends on the seller. If the seller wants, they can collect the information from you and send it to the payment gateway. In that case, they of course have everything that you provide at some point. They are not supposed to keep the security code, and there are rules about keeping the credit card number safe. The first four digits of the credit card number often indicate the bank, although smaller banks may share. But for example a Capital One card would indicate the bank. Other sellers work through a payment gateway that collects the information. Even there, the seller may collect most of the information first and send it to the gateway. In particular, the seller may collect name, email, phone, and address information. And in general the gateway will reveal that kind of information. They will not give the seller credit card info other than the name on the card, expiration date, and possible last four digits. They may report if the address matches the card's billing address (mismatched addresses may mean fraud). Buying through someone like PayPal can provide the least information. For a digital good, PayPal can only expose the buyer's name (which may be a business name) and email (associated with the payment account). However PayPal still has the other information and may expose it under legal action (e.g. if the credit card transaction is reversed or the good sold is illegal). And even PayPal will expose the shipping address for physical goods that require shipping.", "title": "" }, { "docid": "d8ece65eb6ec4ccdf42ad3ecc6bfaf9a", "text": "Merchants are only supposed to verify the presence of a signature, which signifies that the card owner has accepted the terms and conditions of the card / account. It was never really intended to be used to authenticate the card holder, nor is it used as such in practice.", "title": "" }, { "docid": "28349274456d5728c148fd4f35165880", "text": "This is a question with a flawed premise. Credit cards do have two-factor authentication on transactions they consider more at risk to be fraudulent. I've had several times when I bought something relatively expensive and unusual for me, where the CC either initially declined and sent me a text asking to confirm immediately (after which they would approve the charges), or approved but sent me a text right away asking to confirm (after which they'd automatically dispute if I told them to). The first is legitimately what you are asking for; the second is presumably for less risky but still some risk transactions). Ultimately, the reason they don't allow it for every transaction is that not enough people would make use of it to be worth their time to implement it. Particularly given it slows down the transaction significantly (and look at the complaints at the ~10-15 seconds extra EMV authentication takes, imagine that as a minute or more), I think you'd get a single digit percentage of people using that service.", "title": "" }, { "docid": "d18beb46cb0338a631f4fa4b4b77fcea", "text": "My understanding it that the signature requirement is at the retailer's discretion. If the merchant decides to require a signature it protects them against fraudulent charge-back claims, but increases their administrative costs. In some situations it just isn't practical for a retailer to require a signature. Consider for example mail-order or online purchases, which I've never had to sign a credit card slip for.", "title": "" }, { "docid": "fc2ade6041922447eedfb53677d9184a", "text": "\"Here's another rational reason: Discount. This typically works only in smaller stores, where you're talking directly to the owners, but it is sometimes possible to negotiate a few percent off the price when paying by check, since otherwise they'd have to give a few percent to the credit card company. (Occasionally the sales reps at larger stores have the authority to cut this deal, but it's far less common.) Not worth worrying about on small items, but if you're making a large purchase (a bedroom suite, for example) it can pay for lunch. And sometimes the store's willing to give you more discount than that, simply because with checks they don't have to worry about chargebacks or some of the other weirdnesses that can occur in credit card processing. Another reason: Nobody's very likely to steal you check number and try to write themselves a second check or otherwise use it without authorization. It's just too easy to steal credit card info these days to make printing checks worth the effort. But, in the end, the real answer is that there's no rational reason not to use checks. So it takes you a few seconds more to complete the transaction. What were you going to do with those seconds that makes them valuable? Especially if they're seconds that the store is spending bagging your purchase, so there's no lost time... and the effort really isn't all that different from signing the credit card authorization. Quoting Dean Inge: \"\"There are two kinds of fool. One says 'this is old, and therefore good.' The other says 'this is new, and therefore better.'\"\"\"", "title": "" }, { "docid": "697575f46e2273d12899964f4cc6796b", "text": "\"I don't think the reason is \"\"to verify that it is truly me\"\". It should be possible for someone else (friend, relative...) to make a payment on your behalf, using their own card. It is common that \"\"gift cards\"\" are not per-authorized for \"\"Card Not Present\"\" (CNP) use like on the internet, or over the phone. In many cases, you can register your card, online or by speaking to a representative over the phone. After that, you should be able to use it to pay your phone company. Also, depending on where you got the card, you may be able to go to a teller at the issuing bank, and withdraw cash (or get a check), possibly without a fee.\"", "title": "" }, { "docid": "37f1468d33edbdf2cc73c45e8868ae69", "text": "\"Actually in Finland on some bank + debit/credit card + online retailer combinations you type in your card details as you normally do, but after clicking \"\"Buy\"\" you get directed to your own bank's website which asks you to authenticate yourself with online banking credentials. It also displays the amount of money and to which account it is being paid to. After authentication you get directed back to the retailer's website. Cannot say why banks in US haven't implemented this.\"", "title": "" }, { "docid": "5e788b9c0aaa2183ef5c768ba4be1f73", "text": "I used to work for a online payment posting company. Anytime a payment is made via Credit Card to a company that does not have PCI DSS(aka the ability/certification to store credit card information) there is a MD5 checksum(of the confirmation code, not the Credit Card information) that get sent to the company from the processor(billing tree, paypal, etc). The company should be able to send this information back to the processor in order to refund the payment. If the company isn't able to do this, to be honest they shouldn't be taking online credit card payments. And by all means do not send your credit card information in an email. As said above, call the company's customer service line and give them the info to credit your account.", "title": "" } ]	fiqa
5d1289ef7cd288cda5c8031eda11c67c	Do Americans really use checks that often?	[ { "docid": "ef31f1e5df5e9daf7d1a3ba4e3c6ab4a", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually.", "title": "" }, { "docid": "8fda556ad6cb96a5357c78be226dbea8", "text": "In my business (estate planning law practice), probably 60-70% of my income is in the form of checks, with the balance as credit/debit cards. I prefer to get paid by check so I don't have to pay the approx 2.5% merchant fee, but I don't push clients to choose one method over the other. I offer direct deposit to my employees but most of them choose to be paid by check. Also, check processing is becoming more and more electronic - when I get paid by check, I scan the checks in a dedicated desktop scanner, and upload the check images to the bank at the end of the day, and the checks are processed very quickly. I also make deposits to my personal credit union account by scanning checks and uploading the images. So, yes, there's technically a paper check, but I (as the merchant/recipient/depositor) keep the check for a few months to make sure there's no problem with the deposit/payment, then shred them. The bank never sees the actual paper check.", "title": "" }, { "docid": "1612c66234ab9b4f19b31a9a740465c8", "text": "\"A very interesting topic, as I am moving to the US in a month. I realise this thread is old but its been helpful to me. My observations from my home country \"\"Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day labourer who expect to work for a different person each day or week\"\" --- well here a contractor would still be paid by a direct deposit, even if he was working for many different people. On the invoice the contractor provides Bank account details, and customer logs onto their internet banking and pays electronically. It is a a very simple process and is the preferred method of payment by most businesses even small contractors. Many accounting software programs are linked to bank accounts and can quickly reconcile accounts for small business. Many businesses will not accept a cheque in Australia anymore as they are considered to be a higher risk. I started work in 1994 and have never received any payment except via direct deposit.\"", "title": "" }, { "docid": "c1e1220560ce3d4ece5ce7f64ee937e5", "text": "I still use checks to pay rent and occasionally some bills/liabilities. That said, I did notice an (elderly) lady paying by check at the supermarket a while ago. So is it really common to get a paycheck in the sense that you get a piece of paper? Yes and no. There are some people that opt for the physical paycheck. Even if they do not, there is a pay stub which serves as a record of it. My last employer went to online pay stubs and a bunch of us opted out, sticking with the good old paper in an envelope. We sure were glad of that when there were technical issues and security concerns with the online service.", "title": "" }, { "docid": "e01aba077b19ab21e245ef66e69f8aa5", "text": "Sorry for this late reply. I currently live in Iceland (I am a United Statesian). People here told me they thought checks were just something that were in movies. I was amazed by this. So here are some reasons that I see to being why it works still in the usa. 1. Social Security system. Most Euro, Nordic countries have their lives, bank accounts, ect tied to their 'Social Security' number and that number is not top secret like it is in the USA. In fact here in Iceland you throw your number around to anyone who wants it because they cant do anything with it but pay you money really. 2. Banks. In the USA there are millions, MILLIONS of small town banks. That means that doing direct deposits or transfers is much much harder to achieve. Example: Iceland has two banks. The most common way of loaning a friend money or paying for that hotel room if you forgot to bring cash or your card is to say 'Give me your SSN and I will transfer to you'. It takes about 30 seconds to do a funds transfer. In the USA you can't do that. They would think you are lying or not want to give they bank info or because of the fees from small town banks it would be pointless. Also a lot of these small banks will not accept direct deposit (I had a bank growing up that still does not) These are some of the main reasons that I think cause the flow of checks in the usa.", "title": "" }, { "docid": "20f1faf11e9fc76bc2216ed86c83a0e7", "text": "\"I know this an old thread, but one that caught my interest as I just moved to the USA from Australia. As per the OP I had never written a check in my whole life, and upon arriving in the US I was surprised as to their proliference. In Australia pretty much all bills you receive can be paid in a number of ways: For small amounts between friends cash is probably used most, but for larger amounts direct transfer is popular. Your friend/landlord will give you their bank account number and BSB number, which identifies their bank, and then you transfer the money in. We don't have a SSN like some other countries. Cheques are still used by some however, esp by the older generations. Now that I'm in the US initially I had tried to set up direct transfer to pay my rent however the bank has a $1000 daily transfer limit. I contacted the bank to get this increased however I was informed that this limit applies to ALL accounts at the bank. I asked how do people pay their rents with this low limit and was told that most people used cheques. (This explains the strange look I got from my landlord when I asked for their bank account details so I could pay the rent!) I now have some bills to pay here and I use online banking. You enter the biller's name and address and then the bank actually prints off a cheque and posts it to the biller on your behalf! My first couple of pays here were also cheques, which were the first actual \"\"paychecks\"\" I had ever received.\"", "title": "" }, { "docid": "c7f899827d3aae4754d6c612163051a6", "text": "Typically your paychecks are direct deposited into your bank account and you receive a paycheck stub telling you how much of your money went where (taxes, insurance, 401k, etc.). Most people use debit or credit cards for purchases. I personally only use checks to transfer money to another person (family, friend, etc.) than a business. And even then, there's PayPal.", "title": "" }, { "docid": "45d5bbbb109433ec4decc5f783d5ee72", "text": "There are some people that still get an old-fashioned paycheck but for the most part if you are an employee at a company you get a paystub while the money is direct deposited into your accounts. Paying for stuff at a store with a check is not very common. Most people use credit cards for that purpose. A significant percentage of the population still use checks for paying there regular bills through the mail. Although the more internet savvy people will most likely use online bill pay from their bank so they don't have to mail checks. Personally I have only written about 15 checks in 5 years. Mostly to people and not to businesses setup for receiving bill payments electronically.", "title": "" }, { "docid": "ccd9c4730192f7cd2f124af4769cec68", "text": "Many small businesses are still cash and check. For example my landlord does not take credit card or online transfer. My choices are cash and check, and I prefer checks for the paper trail.", "title": "" }, { "docid": "dce2e7d55d8aed2b088a1fd27ce27f39", "text": "\"People who rent an apartment will typically pay by check. Probably 90% of the checks I have written are for rent. To some extent this falls under the previously mentioned \"\"payments to another person\"\" rule.\"", "title": "" }, { "docid": "e726704aa3a047d7e8672b6868a8e179", "text": "Ever since my apartment complex started accepting rent payments online, I've almost never written a check. I use my debit card for everything. And I get paid by direct deposit.", "title": "" }, { "docid": "67a6bbba7f13b2a6635133848ebf9e54", "text": "I receive checks from my tenant. Also, from our medical reimbursement account. I'm sure there's an option somewhere to get that direct deposited, just haven't yet. My wife will write checks for school functions. Funny, they haven't cashed one since february, and this is the one item to look for every time I reconcile her account. A few select others don't take credit or debit cards. Our tailor (losing weight, needed pants pulled in), among others. The number of checks is surely down an order of magnitude over the years, but still not zero.", "title": "" }, { "docid": "14db4aaccba207332c28e3d8235ba523", "text": "From a Canadian point of view, I think we are generally very similar to how you describe Austria. The only thing I use cash for, is to pay for my coffee at a local micro-roaster who only accepts cash. Cheques, I only use to pay friends. Everything else is debit or credit card. Very few businesses around here will even accept cheques anymore.", "title": "" }, { "docid": "005e07c2a709929f6b8fb66f86f38363", "text": "It is possible to not use checks in the US. I personally use a credit card for almost everything and often have no cash in my wallet at all. I never carry checks with me. If we wanted to, we could pay all of our monthly bills without checks as well, and many people do this. 30 years ago, grocery stores didn't generally accept credit cards, so it was cash or check, though most other kinds of stores and restaurants did. Now, the only stores that I have encountered in years that do not accept credit cards are a local chicken restaurant, and the warehouse-shopping store Costco. (Costco accepts its own credit card, but not Mastercard or Visa.) Still, we do pay the majority of our monthly bills via check, and it would not be shocking to see someone paying for groceries with a check. I can't name the last time I saw someone write a check at a store exactly, but I've never seen any cashier or other patrons wonder what a check-writer was trying to do. Large transactions, like buying a car or house, would still use checks -- probably cashier's or certified checks and not personal checks, though.", "title": "" } ]	[ { "docid": "90f4a09fd47702b34fd698aa96b6fdb0", "text": "\"You can spend the money quite quickly. The problem is that if there is something wrong with the check, the bank will ask you for the money back. If the check is from a trusted source (a trusted friend, a business with good reputation etc.) that's fine. If the money is from an untrusted source, make sure that having to pay back the money doesn't get you into trouble. Since most people are honest, this is fine for a small amount, but if it's more than you can afford to pay back, don't spend it. A simple scam is that people send you checks, \"\"by mistake\"\" the check is for the wrong amount, say $910 instead of $190, and they ask you to send the difference back. So you put $910 into your account, send them $720, and six weeks later your bank asks for their $910 back. If someone pays you too much on a check and asks you to pay them the difference, you know it is a scam.\"", "title": "" }, { "docid": "cdc5937ee4679065bb4a2878b10d27dc", "text": "Check use is declining here too, but it still has some practical advantages over electronic means:", "title": "" }, { "docid": "593a607429bbea53a8c549008657a60f", "text": "\"The real reason credit cards are so popular in the US is that Americans are lazy and broke, and the credit card companies know how to market to that. Have you ever heard of the $30k millionaires? These were individuals that purchased as if they were some of the wealthy elite, but had no real money to back it up. American society has pushed the idea of \"\"living on credit\"\" for quite some time now. An idea that is even furthered by watching the US government operate solely on credit. (Raise the debt ceiling much?) Live in America for more than six months and you will be bombarded with \"\"Pre-Approved Deals\"\" with low introductory rates that are designed to sucker the average consumer into opening multiple accounts that they don't need. Then, they try and get you to carry a balance by allowing low minimum payments that could take in the neighborhood of 20 years to pay off, depending on carried balance. This in turn pads the credit companies' pockets with all of the interest you now pay on the account. The few truly wealthy Americans do not purchase on credit.\"", "title": "" }, { "docid": "4e906b74b083c9b0c9370ece62cffc5b", "text": "Not just America, and I assume not ALL companies, but heaps in Australia are doing the same thing. I work for one that does, I mean all of the Visa workers in here are wonderful people so it's not a big deal to me. I can definitely relate to people being annoyed about this though, especially as many foreigners send a lot of their money overseas instead of spending it here.", "title": "" }, { "docid": "0ff97fdc7a3510f25ff7d3820da6ec25", "text": "A lot of Americans have used Swiss bank accounts to avoid paying taxes. However recently several large Swiss banks have started disclosing the details on some of their customers to the IRS. There isn't much security in Swiss banking at this point in time.", "title": "" }, { "docid": "4e728f67b84c940c2e23ee8334471085", "text": "Because it makes money for all parties, and because the general public is reluctant to any change. Who should have an interest to change that? People. And they have no say in it. You can actually do a lot without paper checks nowadays (I only use one per year for car taxes, as they do not accept anything else), but many people shake their heads about even online banking and would never trust it.", "title": "" }, { "docid": "de5b3b9faab2ae254ca546bb6740d4e1", "text": "In the US, paper checks are still the rule, and there is a large amount of the population that does not care to use online banking. As a result, those people need to go to the bank once a week or more often, to deposit checks they get from anywhere, to get cash, etc.; so all those little banks have traffic. This is slowly changing, and banks start to automatic the processes even in the brick-and-mortar location, but for now, they are around.", "title": "" }, { "docid": "ee98cdc37024de3dac00fdb75f6e1d98", "text": "Believe it or not, this is done as a service to you. The reason for this has to do with a fundamental difference between a credit card account and a checking account. With a credit card account, there is no money in the account; every charge is borrowed money. When you get to your credit limit, your credit transactions will start getting declined, but if the bank does for some reason let one get approved, it's not a big deal for anyone; it just means that you owe a little more than your credit limit. Note that (almost) every credit card transaction today is an electronic transaction. A checking account, however, has real money in it. When it is gone, it is gone. When a balance inquiry is done, the bank has no way of knowing how many checks you've written that have not been cashed yet. It is a customer's responsibility to know exactly how much money is available to spend. If you write more checks than you have money for in your account, technically you have committed a crime. Unfortunately, there are too many people now that are not taking the responsibility of calculating their own checking account balance seriously, and bad checks are written all the time. When a bank allows these transactions to be paid even though you don't have enough money in your account, they are preventing a crime from being committed by you. The fee is a finance charge for loaning you the money, but it is also there to encourage you not to spend more than you have. Even if you use a debit card, it is still tied to a checking account, and the bank doesn't know if you have written enough checks to overdraw your account or not. It is still your responsibility to keep track of your own available balance. Every time this happens to you, thank the bank as you pay this fee, and then commit to keeping your own running balance and always knowing how much you have left in your account.", "title": "" }, { "docid": "23641425a136902b14a888a56d82c9b1", "text": "Because of the way checks are processed, you can't write a check for $100 million or more: http://www.bankingquestions.com/checksyoureceived/q_limitfunds.html The field used for 'amount' has 10 digits, so anything at/above 10^10 cents (which would require 11 digits) can't be processed, at least not by normal means.", "title": "" }, { "docid": "2d797e0c5aeb688f536cd46d2b3308dd", "text": "\"Here's a hack for getting the \"\"free\"\" checking that requires direct deposit. Some effort to set up, but once everything is in place, it's all autopilot. (If your transfer into savings is higher than your transfer out of savings, you'll build up a nice little stash over time.) I don't know if there are deposit amounts or frequencies that you must have to qualify for the free account, if these are public or secret, or if this works everywhere. If anyone else has experience using this kind of hack, please leave a comment.\"", "title": "" }, { "docid": "dc9beba134af860f63df40315c9b5caa", "text": "\"Two typical responses to articles/surveys making such claims: 1. People use other forms of asset for emergency savings because interest rates are low - clearly false. 2. People use other forms of saving than a saving account therefore such surveys as the X% can't handle a $500 emergency are wrong on their face - this is false the vast majority use a savings account. I've chosen a topic that absolutely annoys the shit out of me every time it comes up, how people save their money. Every time this topic comes up about X% of americans can't come up with $Y dollars in an emergency or have less than $Z in savings someone inevitably chimes in with the linked response. I have never seen anyone attempt to source their hand waving response beyond their own anecdote, which is usually a thinly veiled brag about how financially savvy they are with their wealth. Perhaps people who have no assets, or crippling debt don't go out of their way to brag about it... I could link multiple reddit posts making a similar response, which I address with my own stock response about once every 1-2 months. Instead I've decided to expand with data from several other sources. This is the prototypical good/bad research problem. If you're asserting something, but qualify your statement with, \"\"I\"\"m sure we'd find...if we looked into...\"\" then you're doing it wrong. A good researcher or journalist doesn't put bullshit like that in their work because it's their job to actually look for sources of data; data which should exist with multiple government and independent groups. So let's get started (all data as recent as I could find, oldest source is for 2010): * [Most americans don't invest in the stock market](https://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf) About 48.8% of americans owned publicly traded stock directly or indirectly, with a much smaller percent (13.8%) owning stock directly - pages 18 and 16 respectively. It's important to note the predominance of indirect ownership which suggests this is mostly retirement accounts. It's entirely possible people are irresponsible with their emergency savings, but I think it safe to say we should not expect people to dip into their retirement accounts for relatively minor emergency expenses. The reason is obvious, even if it covers the expense they now have to make up the shortfall for their retirement savings. This is further supported by the same source: >\"\"The value of assets held within IRAs and DC plans are among the most significant compo-nents of many families’ balance sheets and are a significant determinant of their future retirement security.\"\" Ibid (page 20, PDF page 20 of 41) There is also a break down of holdings by asset type on page 16, PDF page 16 of 41. * [This data is skewed by the top 10% who keep more of their wealth in different asset types.](http://www2.ucsc.edu/whorulesamerica/power/wealth.html) For a breakdown between the 1st, 10th, and 90th percentiles see table 3. So far it seems pretty hard to maintain a large percent of americans have their wealth stored outside of savings accounts, mattresses aside. * [Here's my original reply as to the breakdown of americans assets by type and percent holding.](https://imgur.com/a/DsLxB) Note this assumes people have assets. [Source for images/data.](https://www.census.gov/people/wealth/data/dtables.html) Most people use savings accounts, with runner up falling to checking accounts. This will segue into our next topic which is the problem of unbanked/underbanked households. * [A large number of individuals have no assets; breaking down by asset types assumes people have assets in the first place.](https://www.fdic.gov/householdsurvey/) To quote the FDIC: >\"\"Estimates from the 2015 survey indicate that 7.0 percent of households in the United States were unbanked in 2015. This proportion represents approximately 9.0 million households. An additional 19.9 percent of U.S. households (24.5 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system.\"\" That's right there are millions of households so finance savvy they don't even have banks accounts! Obviously it's because of low interest rates. Also, most people have a checking account as well as savings account, the percent with \"\"checking and savings\"\" was 75.8% while those with \"\"checking only\"\" were 22.2% (page 25, PDF page 31 of 88). It's possible in some surveys people keep all their money in checking, but given other data sources, and the original claim this fails to hold up. If the concern was interest rates it makes no sense to keep money in checking which seldom pays interest. This survey also directly addresses the issue of \"\"emergency savings\"\": > \"\"Overall, 56.3 percent of households saved for unexpected expenses or emergencies in the past 12 months.\"\" (page 37, PDF page 43 of 88) Furthermore: >\"\"Figure 7.2 shows that among all households that saved for unexpected expenses or emergencies, savings accounts were the most used savings method followed by checking accounts: more than four in five (84.9 percent) kept savings in one of these accounts. About one in ten (10.5 percent) households that saved maintained savings in the home, or with family or friends.\"\" Emphasis added. * [Why don't people have wealth in different asset classes? Well they don't save money.](http://cdn.financialsamurai.com/wp-content/uploads/2014/06/savings-rates-by-wealth-class.png) This is further supported by the OECD data: * [Americans \"\"currency and deposits\"\" are 13% vs 5.8% for \"\"securities and other shares\"\" as % of total financial assets.](https://data.oecd.org/hha/household-financial-assets.htm) Additionally: * [Interest earning checking accounts: 44.6% of american households (second image)](https://imgur.com/a/DsLxB) * [\"\"Among all households that saved for unexpected expenses or emergencies, savings accounts were the most used savings method followed by checking accounts...\"\" (page 7, PDF page 13 of 88)](https://www.fdic.gov/householdsurvey/2015/2015report.pdf) * ~70% saved for an emergency with a savings account vs ~24% who used checking. Ibid. In fairness the FDIC link does state banked americans were more likely to hold checking accounts than savings accounts (98% vs ~77% respectively) but that doesn't mean they're earning interest in their checking account. It's also worth noting median transaction account value was for 2013 (this is the federal reserve data) $4100.\"", "title": "" }, { "docid": "1e3057c1fc6c4cd285ff605bf4f2e8ef", "text": "Yes. I've spoken to mortgage officers from various banks who will do conventional loans with anything as low as 3.5% down, however there are many more restrictions (e.g., normally you can borrow funds from a parent or relative for a down payment, in this case that was prohibited). If you are already pre-approved, then your approval letter should state the specifics you need to adhere to. If you would like to modify that (e.g. put a smaller amount down), then you could still get the loan, but your pre-approval won't be valid. I would recommend speaking with your lender (and perhaps with a few others as well) about the new home you are looking at.", "title": "" }, { "docid": "bcb9eaeafb6185e76ad564d565950eaf", "text": "Sorry to hear about your spouse's health issues. May he have a speedy and, as far as possible, full recovery. The Patient Protectection and Affordable Care Act (PPACA, aka Obamacare) is now the law of the land. Among its many provisions are that insurers may no longer deny coverage for pre-existing conditions, they may not put lifetime caps on benefits, and they may not charge different premiums based on any criteria except age cohort and geographic area (i.e. rates may be higher for 50 year olds than 30 year olds, but sick and healthy 50 year olds living in the same area pay the same). If he gets government health coverage because he's on disability, this may not matter. On the other hand, you might find it better to put him on your employer's policy, because you like the coverage better, the employer covers part of the dependent premium, or some other reason. In any case, they can't discriminate against him or you based on his condition. ETA: Rates may vary by geography as well as age.", "title": "" } ]	fiqa
570fba075522daf304f52a67822d695c	Anyone please explain the meaning of turnover in this pic?	[ { "docid": "8a189b80c56ab2a8eb314620583105a8", "text": "\"The Business Dictionary has three definitions of \"\"turnover\"\". When it comes to share dealing, the most likely one is the total value of shares traded on the stock exchange in a given period.\"", "title": "" } ]	[ { "docid": "fb52419d4872fd7d43717254d06fd548", "text": "\"On 3# - My company is constantly complaining about saving money, cutting costs. Then we have these events, and banners, and trinkets and bullshit about our new \"\"mission statement\"\" - everyone here just sees them pissing away money (millions) while bitching about money. That's a fucking drag on company morale. Then again, #8 - my job is being phased out, so it's not like I really like this place anyway.\"", "title": "" }, { "docid": "8be21d05ed1779908307183b4400187e", "text": "That was a quote from the article itself... There's a good link involved in that excerpt... Read it... Job lock is a real thing... That's the only reason people remain at the large corporations that treat them just like a number and don't give a crap about them... People work for large companies with fucked up schedules, commutes and often health detrimental duties... Yet they don't want to adventure to the unknown where there's a chance they will not get the same benefit package... As anecdote, I live in Rural Washington state, a lot of Union people travel to Seattle for work... This is a very long, and stressful commute, I-5, 16, and 405 are not fun... Some of them will spend upwards of five or six hours a day just on the road... when you ask them why... It's because of the pay and the benefit package... when you factor in the extra hours of driving, the pay really is not that huge of a difference, and the toll on your body that that kind of commute takes is horrific... But they wouldn't dare look at small companies Closer by that may not be able to offer them the pension, and health insurance plan that is mandated when working for Amazon, or building for JP Morgan... So they just give in, become a number, and on paper, and empirically, it is a net gain... But the intangible effects on their psyche, happiness, are quite clear....", "title": "" }, { "docid": "8a38bafeb735f43826f9b6342241c2be", "text": "So to translate that to US English: taking an early retirement in lieu of impending layoffs. If you have a layoff you're saying you have no need for the work and if you replace the workers then they come back to sue you (which seems to be what you're saying, and we have the same concept) but an early retirement is a voluntary exit with a compensation package such that any right to sue is forfeit because it was a consensual exit rather than mandatory. Got it. Thanks. :)", "title": "" }, { "docid": "9fd6b1bfb16e4b4349123fb95103e97c", "text": "\"It means price movements in the past do not affect price movements in the future. Think of the situation of a coin, if you flip it once, and then you flip it a second time, the results are independent of each other. If the first time, you flipped a HEAD, it does not mean that the coin will remember it, and produce a TAIL the second time. This is the meaning of \"\"memoryless\"\". FYI, stock markets are clearly not memoryless. It is just an assumption for academic purposes.\"", "title": "" }, { "docid": "b6bd677c1e3ea129e086763705a7bdad", "text": "\"The \"\"c.\"\" is probably circa, or \"\"about.\"\" Regulatory settlements is in blue because it's negative; the amount is in parentheses, which indicates a loss. WB and CB might be wholesale banking and commercial banking? BAU probably means \"\"business as usual\"\" or things that don't directly apply to the project. Incremental investment is the additional cash a company puts towards its long-term capital assets. FX is probably foreign exchange.\"", "title": "" }, { "docid": "84db8928e71914d29c1ede1652c8857d", "text": "That looks like a Bloomberg terminal. And like @Jer said, it would appear to be the symbol for the S&P 500 E-mini index future. Although it doesn't look right all on its own, as it should have a modifier indicating the month (or quarter) of expiry. However, since it appears on a Bloomberg terminal in the image, I checked a source for Bloomberg Symbol Lists and found one of two possibilities for ES1. It is most likely the S&P 500 e-mini future: CME E-Mini Futures E-Mini S&P 500 ES1 INDEX the only alternative was LIFFE 3 Month Euroswiss ES1 COMDTY I think the former is far more likely, as the latter has the COMDTY commodity tag instead of INDEX as the tag in the image. Also, it isn't the ESI which pertains to Ethibel Sustainability Indices and something with the Eurozone (also Bloomberg Indices). Here we go! Excerpt straight is from a presentation presentation on charting from a business school PDF see pp.12-13, and appears to be a straight excerpt from September 2007 Bloomberg documentation. I didn't know any other way to imbed it besides taking a screen shot then uploading to imgur. Or of course, see pp.12-13 in the referenced PDF I've attached. See", "title": "" }, { "docid": "91d757f3506cda4e6a14d708282d8c13", "text": "Rather large, incorrect assumption for someone who wants to chat about logic. I think it's a clickbait article that doesn't articulate anything other than defending Damore, which isn't the point of the article, based on the title. Please, if you're going to suggest the CEO of Google should resign over this manifesto in the NYT, you better have something more than some emotional digs and crying about leadership by someone who doesn't have the slightest clue of what it entails in total. That's why I don't think he should write another piece, sure as hell not on this subject. But I appreciate your armchair analysis bub.", "title": "" }, { "docid": "2647687762360c49bb6114991554d0de", "text": "I think you are having trouble understanding what 'liquid' means. Liquidity refers to how easily an asset can be converted to cash. More liquid = more easily converted to cash, less liquid, less so. Any kind of exit load is going to make an asset less liquid due to the penalties associated with making the sale. So, the whole point of liquid funds is to give people the option of selling quickly if they need to. Since an exit load is meant to discourage this behavior, liquid funds tend not to have one. The point isn't what the financial institution 'gets', it's about offering a service to clients with a particular investment need.", "title": "" }, { "docid": "059208f33a4bafb29026f32af0cbcc61", "text": "\"I would look at the wording of the question. \"\"Expect\"\" does not necessarily mean that they plan to work until they die, or that they want to work until they die. \"\"Expect\"\" here likely means that they think they will have to work until they die - in particular, think that they will not be able to save up enough to retire. Thinking that you will have to work until you die doesn't mean you shouldn't save money - that's just giving up if you don't, right? Instead you save up money and hopefully you're one of the luckier ones.\"", "title": "" }, { "docid": "d85158f0a82f5d0aa198c6541dd827e0", "text": "Thank you very much. >Corporations are really a means of removing risk beyond initial investment This made my light bulb just go off. Thank you! --- I'm going to have to digest the rest of the material slowly. It makes sense, but I want to get it 100%. Thanks a lot!", "title": "" }, { "docid": "56721438fa6acaf9a0b838542836851b", "text": "This is where someone hand waves: innovation, competitive spirit, technology, hard work, and values -- code words for -- cut everything to the bone, replace with automation as much as possible, and/or acquire work-slaves, rinse-repeat until an exit strategy is found, bail out at optimal point and leave someone else to clean up the mess.", "title": "" }, { "docid": "630322d6c195ac675508693c89b9b106", "text": "\"Ordinarily a stock split increases all shareholders' share counts, so that there is no change in anybody's voting power. For example, if you owned 1% of the company before the split, after the split you now have twice as many shares, but there are now twice as many shares outstanding, so you still own 1% of the company. Also, stock splits are not ordinarily \"\"triggered\"\". Usually they happen when the board decides that for one reason or another it's desirable to increase the number of shares in circulation, which causes the price of each share to decrease proportionally. I'm not familiar with the show, and in particular I don't know what the action is that the character being addressed is thinking of taking, but it sounds like they are describing something akin to a \"\"poison pill\"\". In these arrangements, the \"\"pill\"\" is triggered by some predefined condition, say a party acquiring shares in excess of a defined threshold. What typically happens is that shareholders other than the ones who triggered the pill get a chance to buy shares at a substantial discount, thereby diluting the shares of the party that triggered it. Because the other shareholders have to buy their additional shares, albeit at a discount, and because it applies only to certain shares, it's not really a split, but it's close enough that the writers of the show may have felt it was worth using the term that is more familiar to the public.\"", "title": "" }, { "docid": "3a1e9da8ed7b56d4014e73204605cf7e", "text": "Ideally, you would be correct. There is an inverse correlation between wages and turnover rate... to a point. We live in an economy where, unfortunately, there is a ready supply of labor to take the place of those who quit or otherwise leave the company. This brings the value of your current employees down.", "title": "" }, { "docid": "03765888936dcdd3e8e5bb21462ea911", "text": "Owning a home is cheaper than paying rent. You ever think the turnover is so high because it's a shitty work environment for what their paid? How about you go sit at the Walmart employee smoke area. All they do is bitch for their 30 minute break about how their job is miserable.", "title": "" }, { "docid": "a2687a838a4c2f0effb07b4ec3585b60", "text": "Im an actor preparing for a role. I play a trader in the UK during the late 80s. I have a very basic understanding of the stock market and am unsure what some of the dialogue is referring to. For example: “bid 28 at the figure” “sell at 3” “5 march at 28” “9 for 5” “bid 4 at 6” “closing out now at 4”. What do these numbers mean exactly. It doesn’t help that im Australian and this is a UK production, or that im an idiot", "title": "" } ]	fiqa
349ac19ce85d662b9f5d1b2e9f9e8209	Finding out actual items bought via credit card issuer and not the store receipt?	[ { "docid": "07d96288f612a95c2bbec1db71f046b7", "text": "The store keeps track of what you buy. It is all part of their big data. The knowledge of what you buy helps them project future sales. It allows them to target their marketing. But maybe even more importantly they can sell this knowledge to outside companies. They aren't going to give away that information to another company that would love to have that data, just so they could sell it. Stores use those loyalty cards to be able to link your household to those purchases. Those discounts, or free products, are what they use to entice you to give up your privacy. The fact that in your town young adults love caramel apples, even more than the town next door, makes them confident that your town will love caramel apple scented shampoo. Thus they send you coupons when it become available. They will also sell this knowledge to the shampoo companies. Do some stores make it possible for you to download the data? Yes they do. Apple stores send all receipts via email. Kohls allows me to see detail information about my transactions on line. There must be others. I don't know if any are grocery stores.", "title": "" }, { "docid": "543f4652e82ee1c5329dcd9006612b55", "text": "As a merchant I can tell you that the only thing the bank gets from me. Is the total amount and a category for my business. No detail, not ever.", "title": "" }, { "docid": "83826f181cbed6fb08aa3d823a249337", "text": "The stores track the individual items for inventory planning and marketing purposes. Having worked in the transaction processing business for a time (writing one), I can say with confidence that the credit/debit card companies do not receive an itemized list of the items involved in the transaction. There is usually a description field in the information transmitted to the processor, which may or may not contain useful information. But it is not big enough to contain an itemized grocery list of any size. And it is not standardized in any way that would facilitate reliable parsing. There may be an amount of metadata about the transaction that would indicate the types of products involved in the transaction, which they can also infer from the merchant reporting the transaction. There are efforts to increase the amount of data reported, but they are not widely used yet, due to the overwhelming numbers of banks that would need to be upgraded. These efforts are rolling out only in specific and limited uses where the banks involved are willing to upgrade software and equipment. For now, the best way to know what you bought is to keep your receipts from the store. Shoeboxes work great for this. So do smartphone cameras and a folder on your hard drive. There are also mobile apps that track receipts for you, and may even try to OCR the data for you.", "title": "" } ]	[ { "docid": "88009ffa9f0e9233ee90f4ca2dbdd79c", "text": "Keeping a receipt does allow you to verify that the expected amount was charged/debited it also can help when you need to return an item. Regarding double charging, the credit card companies look for that. If the same card is used at the same vendor for the same exact amount in a short period of time the credit card company will flag the transaction. They assume either a mistake was made, or fraud is being attempted. The most likely result is that the transaction is denied. A dishonest vendor can write down the card number, expiration date and CVV number. Then after you leave make up a new transaction for any amount they want. You of course wouldn't have a paper receipt for this fraudulent transaction. The key is reviewing your transaction history every few days: looking for unexpected amounts, locations, or number of transactions.", "title": "" }, { "docid": "39ce77a9a6f73da8194f996943405e13", "text": "\"It's very straightforward for an honest vendor to refund the charge, and the transaction only costs him a few pennies at most. If you initiate a chargeback, the merchant is immediately charged an irreversible fee of about $20 simply as an administrative fee. He'll also have to refund the charge if it's reversed. To an honest merchant who would've happily refunded you, it's unfair and hurtful. In any case, now that he's out-of-pocket on the administrative fee, his best bet is to fight the chargeback - since he's already paid for the privilege to fight. Also, a chargeback is a \"\"strike\"\" against the merchant. If his chargeback rate is higher than the norm in his industry, they may raise his fees, or ban him entirely from taking Visa/MC. For a small merchant doing a small volume, a single chargeback can have an impact on his overall chargeback rate. The \"\"threshold of proof\"\" for a chargeback varies by patterns of fraud and the merchant's ability to recover. If you bought something readily fungible to cash - like a gift card, casino chips, concert tickets etc., forget it. Likewise if you already extracted the value (last month's Netflix bill). Credit card chargeback only withdraws a payment method. Your bill is still due and payable. The merchant is within his rights to \"\"dun\"\" you for payment and send you to collections or court. Most merchants don't bother, because they know it'll be a fight, an unpleasant distraction and bad for business. But they'd be within their rights. Working with the merchant to settle the matter is a final resolution.\"", "title": "" }, { "docid": "c6b6c0b21e83c57a3b62918af7f3f1bf", "text": "\"* Don't underestimate the power of facial recognition wizardry. * No, you don't have to show ID to activate the cards. But keep in mind that they know which cards were activated. There is a paper trail. I'm sure Amex, Visa, MC would happily deactivate the cards for them. Target just has to report that the cards were activated using fraud/theft. * If you took advantage of this \"\"deal\"\" your best bet is to get the prepaid credit cards and spend the money asap at another store (walmart) before they are deactivated. * If indeed this legally is considered fraud, and they go after you for it, you could end up in a giant heap of trouble as many laws have been broken. And, if you use any of the \"\"fraudulent\"\" CC's to make online purchases from a company in another state you could face even more federal charges.\"", "title": "" }, { "docid": "fe6c6b035064b9df1adf8d9f29e0d9c0", "text": "In some case the customer wants the name to be cryptic or misleading. They don't want to advertise the true nature of the business they visited. In other cases the transaction may be reported through another business. A few years ago the local PTA was having a silent auction as a fundraiser. A local business allowed the PTA to use their credit card reader to process transactions over a certain amount. Of course when the credit card statement arrived it looked like you spent $500 at the florist. I have seen PayPal listed when donating to some small charities. I have noted another case where confusion can occur. I used a debit card to buy a soda from a vending machine: the name and location were the name of the vending machine company and the location of their main office. It didn't say soda machine city A. It said Joe's vending company city B. In most cases the business and the credit card company want to make it easy to identify the transactions to keep the cost of research and charge backs to a minimum.", "title": "" }, { "docid": "b5825b7937a3c46f4dad210d283bc7aa", "text": "Also see who has the authority to delete bills or items on bills. This was a huge scam with some servers I've worked with. If you can delete an entire bill that was paid in cash then that's money in your pocket.", "title": "" }, { "docid": "846cc8abedf02be2afab8ad9cbc9cfd9", "text": "You have paid the vendor (school?), etc, $75.75 too much, for whatever reason. They can send you back this money, or it can apply against a future bill. This is common when I pay my credit card in full, but also have a store return. The bill can show a credit, but it will quickly get used up by new purchases.", "title": "" }, { "docid": "4e18a3c6cbff373b8ab0f583250150a6", "text": "A friend of mine has two credit cards. He has specifically arranged with the card issuers so that the billing cycles are 15 days out of sync. He uses whichever card has more recently ended its billing cycle, which gives him the longest possible time between purchase and the due date to avoid interest.", "title": "" }, { "docid": "f66e25bacedbdcc71660c7a8b122bb2e", "text": "The only issue I can see is that the stranger is looking to undervalue their purchase to save money on taxes/registration (if applicable in your state). Buying items with cash such as cars, boats, etc in the used market isn't all that uncommon* - I've done it several times (though not at the 10k mark, more along about half of that). As to the counterfeit issue, there are a couple avenues you can pursue to verify the money is real: *it's the preferred means of payment advocated by some prominent personal financial folks, including Dave Ramsey", "title": "" }, { "docid": "39f3a8221f16c84c72aefff9e8144049", "text": "To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes:", "title": "" }, { "docid": "30c431a4738f2c89c49acec373d3c91a", "text": "\"Every legitimate claim I've filed regarding fraudulent charges on my card includes signing a legal document. If your \"\"friend\"\" completes such a document and you can verify that it is untrue, he's in deeper trouble than you. Unfortunately, if he's successful in filing a claim that is later proven to be fraudulent, it puts your account in a poor status until it's fully cleared. Even then, corporate inertia may result in longer duration inaccurate information. Once you've cleared the fraudulent claim, you'll want to contact your credit agency to ensure they are provided with correct and proper documentation.\"", "title": "" }, { "docid": "69eacef6ab630c1a74ab135faf233369", "text": "\"When processing credit/debit cards there is a choice made by the company on how they want to go about doing it. The options are Authorization/Capture and Sale. For online transactions that require the delivery of goods, companies are supposed to start by initially Authorizing the transaction. This signals your bank to mark the funds but it does not actually transfer them. Once the company is actually shipping the goods, they will send a Capture command that tells the bank to go ahead and transfer the funds. There can be a time delay between the two actions. 3 days is fairly common, but longer can certainly be seen. It normally takes a week for a gas station local to me to clear their transactions. The second one, a Sale is normally used for online transactions in which a service is immediately delivered or a Point of Sale transaction (buying something in person at a store). This action wraps up both an Authorization and Capture into a single step. Now, not all systems have the same requirements. It is actually fairly common for people who play online games to \"\"accidentally\"\" authorize funds to be transferred from their bank. Processing those refunds can be fairly expensive. However, if the company simply performs an Authorization and never issues a capture then it's as if the transaction never occurred and the costs involved to the company are much smaller (close to zero) I'd suspect they have a high degree of parents claiming their kids were never authorized to perform transactions or that fraud was involved. If this is the case then it would be in the company's interest to authorize the transaction, apply the credits to your account then wait a few days before actually capturing the funds from the bank. Depending upon the amount of time for the wait your bank might have silently rolled back the authorization. When it came time for the company to capture, then they'd just reissue it as a sale. I hope that makes sense. The point is, this is actually fairly common. Not just for games but for a whole host of areas in which fraud might exist (like getting gas).\"", "title": "" }, { "docid": "9ca7447f38a27e878762e5755e08b164", "text": "You will need to first try and get the seller to refund. (Get the name of the person you talked to and a date and time). Then you can contact the bank the card was issued through and dispute the charge. I would make sure that you retain any proof that you purchased one item and received something other than what you purchased. The seller does have recourse if they did fulfill their side of the transaction but if they are a legitimate merchant and actually sent you the wrong product most will not bother.", "title": "" }, { "docid": "f9c2e358eafa3b0780056c5c7b722068", "text": "Can they? Sure. Should they? Absolutely not. You're exactly right that it's dishonest, but it's not like it's a crime. Your best recourse, as is often the case, is simply to stop buying from this site, and cancel any existing orders. Shop with companies that exhibit trustworthy behavior.", "title": "" }, { "docid": "1321dc071d64c45d197ac4f381d77ac9", "text": "\"It surely doesn't HURT to keep a receipt. I tend to pile up receipts in my desk drawer, never look at them, and then every few months throw them all out. If a vendor writes a receipt by hand or if the cash register is not tied in to the credit card system, keeping a receipt could give you evidence against mistakes or fraud. Like if the vendor gives you a receipt for $10 and then sends a transaction to the credit card company for $20, you could use the receipt as evidence of the problem. But if the vendor is trying to really cheat you, the most likely thing for him to do is run the legitimate transaction through, and then some time later run a fake transaction. So say today you go to vendor X, buy something for $20, and he bills your credit card $20. Then a few days later he bills you another $100 even though you never came back to the store. Sure, you have a receipt for $20. But you don't have a receipt for the $100 because you never authorized that transaction. Your receipt proves nothing -- presumably you're not disputing the $20. If you complain to the bank or go to the police or whatever, saying, \"\"Hey look, I don't have a receipt for the $100\"\" doesn't prove anything. How do they know you didn't just throw it away? It's difficult to prove that you never had such a receipt.\"", "title": "" }, { "docid": "38ec38eaad11c8b8a112cf547e69262e", "text": "I think you're dancing with the line here, this question is hard to back up without opinions and could really be three different questions. I'm going to push aside the part about quality and reliability, that could be an emotional subject. So from a price standpoint, there's virtually no disagrement that it makes financial sense to buy a used car instead of a new car. The majority of new cars lose the majority of their resale value within the first year or two. If you purchase said car after someone else has used it for the first two years, you just avoided all of that depreciation yourself, and you're still going to be purchasing a perfectly reliable car as long as you are diligent in the buying process.", "title": "" } ]	fiqa
bc0a76fa376429866712501cf3caacb5	Is income from crypto-currencies taxed?	[ { "docid": "4f64ef46bb0260c8b78aaf58038bcb06", "text": "Mining is income at the value at time of earning, I would use an index like XBX to determine price. Asset appreciation is capital gains. These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now.", "title": "" }, { "docid": "229d3ecda58289b259fc5368abefe568", "text": "In Canada, it is similarly taxed as CQM states. Mining is considered business income and you need to file a T1 form. Capital appreciation is no different than treating gains from stock.", "title": "" } ]	[ { "docid": "1c7beebb3549c75c9dd76f80232f5e9c", "text": "What you are looking for is a 1031 exchange. https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031 Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free. You may also sell your house for bitcoin and record the sales price on the deed with an equal or lesser amount that you bought it for.", "title": "" }, { "docid": "0dcde7237c2f07188a3d6d58976f32e7", "text": "Crypto will make us all rich when it becomes the new standard highly volatile currency. As we all know how attractive a highly volatile currency is. Who doesn't want to save on 1% banking fees for cross border transactions when you could use crypto and potentially make or lose 20%. /s", "title": "" }, { "docid": "a87688fb747cdc8f66ebfc69393bdf18", "text": "This is taxed as ordinary income. See the IRC Sec 988(a)(1). The exclusion you're talking about (the $200) is in the IRC Sec 988(e)(2), but you'll have to read the Treasury Regulations on this section to see if and how it can apply to you. Since you do this regularly and for profit (i.e.: not a personal transaction), I'd argue that it doesn't apply.", "title": "" }, { "docid": "b72c7f112014ad0f2539574456e73e5f", "text": "\"As cryptocurrencies are rather new compared to most assets, there hasn't been a lot of specific guidance for a lot of situation, but in 2014 the IRS announced that it published guidance in Notice 2014-21. I'm not aware of further guidance that has been published beyond that, though it wouldn't surprise me if treatments changed over time. In that notice, the answer to the first question describes the general treatment: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Your specific questions (about what constitutes a \"\"business\"\", and when you're considered to be \"\"selling\"\" the cryptoproperty) are likely to be considered on a case by case basis by the IRS. As the amounts involved here are so small (relatively speaking), my recommendation would be to read through what the IRS has published carefully, make reasonable assumptions about what scenarios that are described are closest to what you're doing, and document doing so clearly as part of your tax preparations. And when in doubt, erring on the side of whichever option incurs more tax is unlikely to be objected to by them. Of course, I'm not a lawyer or tax advisor, I'm a stranger on the Internet, so for \"\"real\"\" advice you should contact somebody qualified. I doubt you'd be faulted too much for not doing so given the amounts involved. You could also attempt contacting a local IRS office or calling them with your specific questions, and they may be able to provide more specific guidance tailored to you, though doing so may not save you from an auditor deciding something differently if they were to examine your return later. There are also phone numbers to contact specific people listed at the end of Notice 2014-21; you could try calling them as well.\"", "title": "" }, { "docid": "ef1aa2e4d657518b6e67bb4c8e7ff483", "text": "Under what section do I declare my profits when I pay tax? You have to declare this as income from other source and pay tax as per tax brackets. I'm from India and have been trading in binary options for a while now Trading in India on binary options is illegal. If you are using Forex from India for trading, this is not allowed as per Foreign Exchange Management Act.", "title": "" }, { "docid": "d50c7fdfce08325fca77e8f189c16e91", "text": "It's important to note that the US is also the country that taxes its expats when they live abroad, and forces foreign banks to disclose assets of US citizens. Americans are literally the property of their government. America is a tax farm and its citizens can't leave the farm. Wherever you go, you are owned. And that now appears to be true of your Bitcoin as well. Even if you spend 50 years outside the USA, your masters want a piece of what you earn. Land of the Free.", "title": "" }, { "docid": "67363603df95dbf02c5c4c322d2c4a61", "text": "It should be very obvious that getting X Euro cash in your hand is better than deducting them from taxable income. You would need to have a tax rate of over 100% to do better otherwise.", "title": "" }, { "docid": "f047a86a26ffe9decad612ab2b5ed4e0", "text": "Note the above is only for shares. There are different rules for other assets like House, Jewellery, Mutual Funds, Debt Funds. Refer to the Income Tax guide for more details.", "title": "" }, { "docid": "ac6ae89f7f5eb0d3df5301a48dd439f6", "text": "If you are a non resident Indian, the income you earn and transfer to India is tax free in India. You can hold the funds in USD or convert then into INR, there is no tax implication.", "title": "" }, { "docid": "b86d06b83930b46c910d7c04b1b8f98e", "text": "It should be reported as Miscellaneous Income. Congratulations for wanting to report this income.", "title": "" }, { "docid": "b66aecaca3cfc6d1bf0b48153f487a92", "text": "Yes, at that stage income is income regardless of source. Assuming you're talking about overall profit, not just the individual wins when gambling.", "title": "" }, { "docid": "d0924928f7f5f7194bd15333e140dbae", "text": "\"In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it's property like any other, capital gains if and when you sell are taxed. As with any capital gains, you're taxed on the \"\"profit\"\" you made, that is the \"\"proceeds\"\" (how much you got when you sold) minus your \"\"basis\"\" (how much you paid to get the property that you sold). Until you sell, it's just an asset (like a house, or a share of stock, or a rare collectible card) that doesn't require any reporting. If your initial cryptocurrency acquisition was through mining, then this section of that Notice applies: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. That is to say, when it was mined the market value of the amount generated should have been included in income (probably on either Line 21 Other Income, or on Schedule C if it's from your own business). At that point, the market value would also qualify as your basis. Though I doubt there'd be a whole lot of enforcement action for not amending your 2011 return to include $0.75. (Technically if you find a dollar bill on the street it should be included in income, but usually the government cares about bigger fish than that.) It sounds like your basis is close enough to zero that it's not worth trying to calculate a more accurate value. Since your basis couldn't be less than zero, there's no way that using zero as your basis would cause you to pay less tax than you ought, so the government won't have any objections to it. One thing to be careful of is to document that your holdings qualify for long-term capital gains treatment (held longer than a year) if applicable. Also, as you're trading in multiple cryptocurrencies, each transaction may count as a \"\"sale\"\" of one kind followed by a \"\"purchase\"\" of the other kind, much like if you traded your Apple stock for Google stock. It's possible that \"\"1031 like kind exchange\"\" rules apply, and in June 2016 the American Institute of CPAs sent a letter asking about it (among other things), but as far as I know there's been no official IRS guidance on the matter. There are also some related questions here; see \"\"Do altcoin trades count as like-kind exchanges?\"\" and \"\"Assuming 1031 Doesn't Apply To Cryptocurrency Trading\"\". But if in fact those exchange rules do not apply and it is just considered a sale followed by a purchase, then you would need to report each exchange as a sale with that asset's basis (probably $0 for the initial one), and proceeds of the fair market value at the time, and then that same value would be the basis of the new asset you're purchasing. Using a $0 basis is how I treat my bitcoin sales, though I haven't dealt with other cryptocurrencies. As long as all the USD income is being reported when you get USD, I find it unlikely you'll run into a lot of trouble, even if you technically were supposed to report the individual transactions when they happened. Though, I'm not in charge of IRS enforcement, and I'm not aware of any high-profile cases, so it's hard to know anything for sure. Obviously, if there's a lot of money involved, you may want to involve a professional rather than random strangers on the Internet. You could also try contacting the IRS directly, as believe-it-or-not, their job is in fact helping you to comply with the tax laws correctly. Also, there are phone numbers at the end of Notice 2014-21 of people which might be able to provide further guidance, including this statement: The principal author of this notice is Keith A. Aqui of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information about income tax issues addressed in this notice, please contact Mr. Aqui at (202) 317-4718\"", "title": "" }, { "docid": "7167ec18e71daaffb58292000094dc2c", "text": "Would I have to pay some kind of capital gains tax? And if so, when? Converting Tax paid USD into CAD is not a taxable event. A taxable even will occur if you convert back the CAD into USD. If you receive interest on the CAD then the interest is also a taxable event. Also, is there any reason this is a terrible idea? That will only be known in future. Its like predicting that in future this will turn out to be advantageous, however it may turn out the other way.", "title": "" }, { "docid": "fe4d51ea49dc69c61e96c23aedb34e51", "text": "Normally, yes, you would have to pay. If you are in the US, or a citizen of the US, then IRC Sec. 61 would levy tax on all income. Even if you find money on the ground, that will generally be taxable income (the treasure trove doctrine). If you are paying foreign income taxes, the US may allow credit.", "title": "" }, { "docid": "85e79ba38e7a9b761ad1d0665011ddf6", "text": "It has properties of both. Tax authorities will eventually give their opinion on this. Through its properties of finite quantity, fungibility, and resistance to forgery/duplication, it acts as a commodity. It can be sent directly between any two parties anywhere on Earth, without regard for the quantity transacted or physical distance, to act as a currency. By the way, establishing trust in a trust-free environment through cryptographic proof-of-work is a remarkable invention. Sending economic value, cheaply and securely, around the world in minutes, not days/weeks, is a remarkable invention. This is where the value comes from.", "title": "" } ]	fiqa
37ed90b6ca29e111ce8ed254644f3a69	Can I cash a cashier's check at any bank?	[ { "docid": "56e501ad9e345426d2297fbcb1c91911", "text": "The classic Nigerian scam involves sending fraudulent cashier's checks to unwitting recipients who then deposit them in their account. The bank reverses these deposits once they discover the check is not valid. At least in the US and in the parts of the EU I'm familiar with (the Netherlands), the method of the Nigerian scam is consistent and banks will reverse the deposit after some holding period. Given this, it's unlikely that most banks will convert an arbitrary cashier's check to cash without any means to recover the amount should the check be fraudulent.", "title": "" }, { "docid": "7317fb4f46b375b628a969a195c49b5f", "text": "\"At least in the US, a Cashier's Check is just like a regular personal check - only it's guaranteed by the bank itself, so the person accepting it can be pretty certain the check won't be returned for insufficient funds...if the check is genuine! Most banks therefore have a policy for cashier's checks that is very similar to their policies on regular checks and money orders: if you are a member with an account in good standing, they'll make all or part of the money available to you according to their fund availability policy, which is usually anywhere from \"\"immediately\"\" to 7-10 days. With amounts over $5,000, banks will tend to put a hold on the funds to ensure it clears and they get their money. If you are not a member then many banks will refuse to cash the check at all, unless the cashier's check is drawn on on that brand of bank. So if the cashier's check is issued by, say, Chase Bank, Chase banks will usually be willing to cash out the entire check to you immediately (with properly provided ID). Because the bank is guaranteed by them they are able to check their system and ensure the check is real and can clear the check instantly. This policy isn't just up to individual banks entirely, as it is defined by United States federal banking policies and federal regulations on availability of funds. If you really must cash the check without a holding period and won't/can't have a bank account of your own to perform this, then you will generally need to go into a branch of the bank that is guaranteeing the check to be able to cash it out fully right away. Note that since the check might be issued by a bank with no branch near you, you should have a back-up plan. Generally banks will allow you to setup a special/limited savings-only account to deposit your check, even if you don't have a checking account, so if no other option works you might try that as well. The funds availability policies are the same, but at least you'll be able to cash it generally in 10 days time (and then close the account and withdraw your money).\"", "title": "" }, { "docid": "37794866268a27f723559f431c8a31d9", "text": "Normally if the amount of a cashiers check is over $5,000, a bank (like Wells Fargo) may put a 10 business day hold on it to make sure the transaction is sound.", "title": "" }, { "docid": "9e401011b92d6c89b508ce9f8b78789e", "text": "Cashiers check is as good as cash. I use them all the time as banks don't carry over 2-3k anymore. I can bring the cashiers check anywhere and thus cash it for u without an account. It's basically a piece of paper that says these funds are set aside from the issuers account just for and only for the check. That's why it's accepted anywhere. It's a gurantee from one bank to another that the funds are there waiting to be transferred. The whole point of the check is so the funds are available immediately. The bank will call the issuing bank verify the Check is real and than cash it immediately. You don't pay a fee to buy the cashiers check just to wait for it to clear like a normal free check. Its immediate and just as good as cash. I use them weekly/monthly for amounts from 5k up to over 100k.", "title": "" } ]	[ { "docid": "253360e3cafdc6b07b20398e7ba38969", "text": "\"If you forgot to put the name on the \"\"pay to the order of\"\" line then anybody who gets their hands on the check can add their name to the check and deposit it at their bank into their account. If it goes to the correct person they will have an easy time making sure that the check is made out correctly. They don't have to worry about that picky teller who doesn't know what to do with a check made out to Billy Smith and a drivers license for Xavier William Smith. On the other hand... a criminal will also be able to make sure it is processed exactly the way they want it. If I made it out to a small business or a person I would let them know. You might not have a choice but to wait and see what happens if it was sent to a large business, the payment processing center could be a long way from where you will be calling.\"", "title": "" }, { "docid": "f25fafb34d78ed0c7ffedc3a21440848", "text": "Ask your bank or credit union. Mine will let me issue recurring payments to anyone, electronically if they can, if not a check gets mailed and (I presume) I get billed for the postage.", "title": "" }, { "docid": "25e2790f0097e1553fcb935da1c4396a", "text": "\"This answer is based on my understanding of the US banking system. We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what \"\"cash it for free at the bank\"\" really means, and why it might not be an option for everyone. One key issue is \"\"which bank?\"\" As an example, suppose that I have an account at ABC Bank. I take out my checkbook for that account and write you a check for $500. (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee. Disclaimer: \"\"You\"\" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account. (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.) XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ. (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.) This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person. They will verify on the spot that the check is valid and that you are in fact user54609. If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all. There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it. They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town. You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit. Maybe the nearest one is a long way away, in another city or across the country. Or maybe ABC is an online bank with no physical branches at all. Maybe it's in the same city, but you don't have transportation to get you there. Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, \"\"cash it at the bank\"\" might not be a viable option, and so you might reasonably turn to a check cashing business instead. As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them. But there's this storefront on the corner that says \"\"Check Cashing\"\", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money. As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business. Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check. There are sometimes steps they can take to minimize this risk. Sometimes they can call ABC Bank and check that I have sufficient money in my account. Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub. And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud. But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses.\"", "title": "" }, { "docid": "591374af295eea181078c11fff644f7f", "text": "How often do you need to actually go to a bank? atm's, debit and credit cards work where ever. you can even deposit checks by taking a picture of them. dealing with cash would be more troublesome though.", "title": "" }, { "docid": "6aa022f401826c82028f3335f5cd8c4d", "text": "I'm going to give the checkmark to Joe, but I wanted to convey my personal experience. I bank with TD in New Jersey and was informed by the teller that I simply needed to endorse the check myself and indicate Parent of Minor. I cannot attest if other banks will accept this, but it at least works for TD and my situation in particular.", "title": "" }, { "docid": "31c281eb2eb9a00f332080b149465ff9", "text": "Years ago, I had a tenant who bounced a check now and then. I started going to the bank where his account was. With my ID they were agreeable to cashing the check against his account. The teller first checked his balance and only cashed when there were enough funds. One time he was $10 short. I wrote a deposit slip and added the $10 it took to clear the check. As they say, your mileage may vary, I hear some banks won't even break a large bill for a non customer.", "title": "" }, { "docid": "f11642ee9a141532e6f6837656985f1b", "text": "\"How does this get any business? You'd be surprised on how much profit these type of businesses can bring in and the number of people who cash their checks this way. They make profit off people who want their checks cashed ASAP. Usually cheques written to \"\"cash\"\" or something can just be cashed for free at the bank right? Yes, most banks cash your check for free. Some may not cash it right away and may require a few days to process. Some charge a small fee if the check is not from the same bank. Some personal checks may not even be processed the same day as well. Wouldn't the only cheques that people would cash at these places be bad cheques? Yes and no. Yes because it may be \"\"easier\"\" to try to cash a fraudulent check at these type of check cashing places. However, some places may only cash business checks and require your ID in which they write down the information in order to possibly track you down in the future. Also some places only cash a check to a certain amount. And wouldn't this mean that the business will lose a lot of money since it pays out cash but then has the cheque bounce? Of course the business loses money if the check bounces or is fake. That is why they try to minimize their losses with certain requirements that needs to met before the check can be cashed. Who uses these services exactly? Just about anyone who needs their check cashed ASAP or like ChrisW stated in his answer is trying to keep their money on the low. There is a demand for this service even though it may seem shady to you.\"", "title": "" }, { "docid": "1ea22f3848d931782d35dccdbe5fdeed", "text": "The only certain way is to have the issuer confirm it. You'd think there would be a better way, but no there isn't. I suggest you read this story about what can happen even if you are the innocent victim trying to cash a fraudulent Cashier's Check. The consequences included some jail time and huge attorney fees for this unlucky person.", "title": "" }, { "docid": "bfd3eb0b7e5e8a780a7c355f643759a2", "text": "\"Legally, a check just needs to have a certain list of things (be an instruction to one's bank to pay a specific amount of money to bearer or to a specific entity, have a date, have a signature, etc.) There are anecdotes around of a guy depositing a junk mail check and it accidentally qualifying as a real check (which he turned into a live show), or of writing a check on a door, cow, or \"\"the shirt off your back\"\". What kind of checks your bank will process is technically up to them. Generally, if you get your blank checks printed up by any reputable firm, they'll have similar information in similar places, as well as the MICR line (the account and routing number in magnetic ink on the bottom) to allow for bank to process the checks with automated equipment. As long as it's a standard size, has the MICR line, and has the information that a check needs, your bank is likely to be fine with it. So, there are some standards, but details like where exactly the name of the bank is, or what font is used, or the like, are up to whoever is printing the check. For details on what standards your bank requires in order to process your checks, you'd have to check with your bank directly. Though, it wouldn't surprise me if they just directed you to their preferred check printer provider, as they know that they accept their check format fine. Though as I said, any reputable check printer makes sure that they meet the standards to get processed by banks without trouble. Unless you're a business that's going to be writing a lot of checks and pay a lot of fees for the privilege, a bank is not likely to want to make exceptions for you for your own custom-printed octagonal checks written in ancient Vulcan.\"", "title": "" }, { "docid": "17e57e485e12f83d79d5bfe9251e82e5", "text": "Some Walmart stores have a surcharge-free ATM in their Money Center. If that doesn't work, look for the logo of the interbank network on the back of your card that your bank uses (e.g. Star, Cirrus, Allpoint, MoneyPass) and Google them. If you're lucky, they'll have a surcharge-free ATM locator (e.g. https://www.star.com/locator/).", "title": "" }, { "docid": "7d886d70fde7e58daf8a86ac00e1884c", "text": "Nowadays, all checks you write will not be send to your bank anymore, but instead the bank where they get deposited does an ACH from your bank. That implies that not allowing this to happen, your bank would not be able to honor any checks you wrote (without enforcing paper check delivery in the mail, but the Check21 bill does not allow such enforcing anymore). Basically, your bank would not be able to do business with anyone. The obvious conclusion is that no such bank exists.", "title": "" }, { "docid": "830598775e637c5f87e5ecf2bbbf7e59", "text": "I don't know that. I know mine has a great mobile app where I can deposit a check online. And all the smaller banks I've seen dont build their own sites or apps, they white label generic ones from common vendors.", "title": "" }, { "docid": "ffa2250acc63d88f31a6961a58f380b9", "text": "I've been a landlord and also a tenant. I have been able to deposit money in an account, where I have the account number, and/or a deposit slip. In a foreign bank you can deposit by a machine if in the bank or someone is there for you and knows the account number. With regards to cashing a check in another country, it is up to the bank and the time is at least 14 to 21 business days, with a fee is added. As of a winning check, since its in your name, if you are in another country sign the check, for deposit only with a deposit slip and send it to your out of country bank by FedEx - you will have a tracking number, where as regular mail it might get there in 3 months. I hope by now you came to your solution.", "title": "" }, { "docid": "f824ec9564ba86142f8aecb01947433a", "text": "\"No, you cannot do that. You can't just debit someone because \"\"he said so\"\". You'll need a document in writing, that would show the routing number, account number, the amount to withdraw and who is allowed to withdraw it. This document must be signed by the account owner and dated. Usually, these documents are called \"\"checks\"\". But legally speaking, in most countries you can write this on any piece of paper and it would be valid. But better use a standard check. Once you have a check - you can cash/deposit it in any bank, that part is true.\"", "title": "" }, { "docid": "eaa1f2198f2b2841062db955e8b4bbd2", "text": "When I moved banks. I had my old bank cut a cashier's check. It isn't a check you write. They write it and give it to you. I then took the cashier's check to my new bank to deposit it.", "title": "" } ]	fiqa
fe8faae0880fa4780315126c382d5e83	How is Massachusetts state tax on unrealized capital gains calculated?	[ { "docid": "5215319ee6dd5ebecf3ec9185d2c25c8", "text": "\"Massachusets does no such thing. The 5.25% tax is only on realized gains. \"\"Unearned\"\" means \"\"doesn't tie to your trade/business\"\", i.e.: is not gained through your personal performance.\"", "title": "" } ]	[ { "docid": "2c3122d7636f15842b326dc32f0f5598", "text": "The sale of shares on vesting convolutes matters. In a way similar to how reinvested dividends are taxed but the newly purchased fund shares' basis has to be increased, you need to be sure to have the correct per share cost basis. It's easy to confuse the total RSU purchase with the correct numbers, only what remained. The vesting stock is a taxable event, ordinary income. You then own the stock at that cost basis. A sale after that is long or short term and the profit is the to extent it exceeds that basis. The fact that you got these shares in 2013 means you should have paid the tax then. And this is part two of the process. Of course the partial sale means a bit of math to calculate the basis of what remained.", "title": "" }, { "docid": "2fd055035118e9368579e888c579bdf7", "text": "It depends to some extent on how you interpret the situation, so I think this is the general idea. Say you purchase one share at $50, and soon after, the price moves up, say, to $55. You now have an unrealized profit of $5. Now, you can either sell and realize that profit, or hold on to the position, expecting a further price appreciation. In either case, you will consider the price change from this traded price, which is $55, and not the price you actually bought at. Hence, if the price fell to $52 in the next trade, you have a loss of $3 on your previous profit of $5. This (even though your net P&L is calculated from the initial purchase price of $50), allows you to think in terms of your positions at the latest known prices. This is similar to a Markov process, in the sense that it doesn't matter which route the stock price (and your position's P&L) took to get to the current point; your decision should be based on the current/latest price level.", "title": "" }, { "docid": "4b7cd157197402aa1a8b2a3dc933137c", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"", "title": "" }, { "docid": "4911f9a1e0f23dca3556083c61350494", "text": "\"Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference between the two. This link describes it in more detail and provides some references: http://www.maximadvisors.com/2013/06/foreign-residence/ That link also discusses additional potential complications if you have a mortgage on the house. This link gives more detail on the court case referenced in the above link: http://www.uniset.ca/other/cs5/93F3d26.html The court cases references Rev. Rul 54-105. This link from the IRS has some details from that (https://www.irs.gov/pub/irs-wd/0303021.pdf): Rev. Rul. 54-105, 1954-1 C.B. 12, states that for purposes of determining gain, the basis and selling price of property acquired by a U.S. citizen living in a foreign country should be expressed in United States dollars at the rates of exchange prevailing as of the dates of purchase and sale of the property, respectively. The text of this implies it is for U.S. citizen is living in a foreign country, but the court case makes it clear that it also applies in your scenario (house purchased while living abroad but now residing in the US): Appellants agree that the 453,374 pounds received for their residence should be translated into U.S. dollars at the $1.82 exchange rate prevailing at the date of sale. They argue, however, that the 343,147 pound adjusted cost basis of the residence, consisting of the 297,500 pound purchase price and the 45,647 pounds paid for capital improvements, likewise should be expressed in U.S. dollar terms as of the date of the sale. Appellants correctly state that, viewed “in the foreign currency in which it was transacted,” the purchase generated a 110,227 pound gain as of the date of the sale, which translates to approximately $200,000 at the $1.82 per pound exchange rate. ... However fair and reasonable their argument may be, it amounts to an untenable attempt to convert their “functional currency” from the U.S. dollar to the pound sterling. ... Under I.R.C. § 985(b)(1), use of a functional currency other than the U.S. dollar is restricted to qualified business units (\"\"QBU\"\"s). ... appellants correctly assert that their residence was purchased “for a pound-denominated value” while they were “living and working in a pound-denominated economy,” ... And since appellants concede that the purchase and sale of their residence was not carried out by a QBU, the district court properly rejected their plea to treat the pound as their functional currency.\"", "title": "" }, { "docid": "7ec4040c3ac8334ab36c650435360cd4", "text": "\"As Dilip said, if you want actual concrete, based in tax law, answers, please add the country (and if applicable, state) where you pay income tax. Also, knowing what tax bracket you're in would help as well, although I certainly understand if you're not comfortable sharing that. So, assuming the US... If you're in the 10% or 15% tax bracket, then you're already not paying any federal tax on the $3k long term gain, so purposely taking losses is pointless, and given that there's probably a cost to taking the loss (commission, SEC fee), you'd be losing money by doing so. Also, you won't be able to buy back the loser for 31 days without having the loss postponed due to the wash sale that would result. State tax is another matter, but (going by the table in this article), even using the highest low end tax rate (Tennessee at 6%), the $50 loss would only save you $3, which is probably less than the commission to sell the loser, so again you'd be losing money. And if you're in a state with no state income tax, then the loss wouldn't save you anything on taxes at the state level, but of course you'll still be paying to be able to take the loss. On the high end, you'd be saving 20% federal tax and 13.3% state tax (using the highest high end tax state, California, and ignoring (because I don't know :-) ) whether they tax long-term capital gains at the same rate as regular income or not), you'd be saving $50 * (20% + 13.3%) = $50 * 33.3% = $16.65. So for taxes, you're looking at saving between nothing and $16.65. And then you have to subtract from that the cost to achieve the loss, so even on the high end (which means (assuming a single filer)) you're making >$1 million), you're only saving about $10, and you're probably actually losing money. So I personally don't think taking a $50 loss to try to decrease taxes makes sense. However, if you really meant $500 or $5000, then it might (although if you're in the 10-15% brackets in a no income tax state, even then it wouldn't). So the answer to your final question is, \"\"It depends.\"\" The only way to say for sure is, based on the country and state you're in, calculate what it will save you (if anything). As a general rule, you want to avoid letting the tax tail wag the dog. That is, your financial goal should be to end up with the most money, not to pay the least taxes. So while looking at the tax consequences of a transaction is a good idea, don't look at just the tax consequences, look at the consequences for your overall net worth.\"", "title": "" }, { "docid": "bf0540111a2051185227f72005547c32", "text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"", "title": "" }, { "docid": "0e4deccb755d9c7a79fd4d572b047302", "text": "If you just want to know total return, either as dollars or a percentage, just add up the total amount spent on buys and compare this to current value plus money received on sales. In this case, you spent (310 x $3.15 + $19.95) + (277 x $3.54 + $19.95). So your total investment is ... calculator please ... $1996.98. You received 200 x $4.75 on the sale minus the $19.95 = $930.05. The present value of your remaining shares is 387 x $6.06 = $2345.22. So you have realized plus unrealized value of $2345.22 + $930.05 = $3275.27. Assuming I didn't mix up numbers or make an arithmetic mistake, your dollar gain is $3275.27 - $1996.98 = $1278.29, which comes to 1278.29 / 1996.98 = 64%. If you want to know percentage gain as an annual rate, we'd have to know buy and sell dates, and with multiple buys and sells the calculation gets messier.", "title": "" }, { "docid": "71895907b50a404d9be614264fbc3feb", "text": "I did the reverse several years ago, moving from NH to MA. You will need to file Form 1-NR/PY for 2017, reporting MA income as a part-year residence. I assume you will need to report the April capital gain on your MA tax return, as you incurred the gain while a MA resident. (I am not a lawyer or tax professional, so I don't want to state anything about this as a fact, but I would be very surprised if moving after you incurred the gain would have any affect on where you report it.)", "title": "" }, { "docid": "2c3f715ad21d7342bb9dcc0b681bad51", "text": "\"As ApplePie discusses, \"\"tax bracket\"\" without any modifiers refers to a single jurisdiction's marginal tax rate. In your case, this is either your California's \"\"tax bracket\"\" or your Federal \"\"tax bracket\"\" (not including marginal Social Security and Medicare taxes). But if someone says \"\"combined state and federal tax bracket\"\", they probably mean the combination of your state and federal income tax brackets (again, lot including sales taxes, business and occupational taxes, social security taxes, and medicare taxes). The math to combine the state and federal marginal tax rates is a bit tricky, because most people can deduct either their state and local income taxes, or their state and local general sales taxes when computing their income for federal income tax purposes. (The federal \"\"alternative minimum tax\"\" restricts this deduction for some people.) For a single person earning $ 100,000 of salaries and wages in California, whose state income taxes are close to their standard deduction, the calculations for the combined marginal income tax rate look something like this: As mentioned above, this understates the tax bite on marginal \"\"earned income\"\". To find the true marginal rate, we need to add in Social Security taxes, Medicare taxes, sales taxes, and business & occupation taxes. The Social Security and Medicare taxes are sometimes called \"\"self employment taxes\"\". This math omits unemployment insurance and workers' compensation insurance, because those taxes are typically capped well below $ 100,000 per year of income. This math also omits B & O taxes, because this question is California specific. If an employer wishes to increase an employee's pay by $ 1,076.50, the first $ 76.50 will go to the employer's share of Social Security and Medicare taxes. The remaining $ 1,000.00 will be subject to the combined marginal income tax rate discussed above, plus will have $ 76.50 go to the employee's share of Social Security and Medicare taxes. The employee might buy some extra things with some of their extra money, and pay sales tax on them. In 2016, a 9 % sales tax rate was common in California's largest cities. The IRS estimated that (for a single person with no dependents making $ 100,000 per year who did not buy a boat, RV, motor vehicle, or major home construction), about 9 % of their marginal gross income was subject to sales tax.\"", "title": "" }, { "docid": "b17e88382f97661d723cef5bbbb871a6", "text": "First of all, I've been out of college for over a decade, so good job on the assumptions. /s Secondly, when calculating capital gains, you have to take into account the depreciation of the asset. As you would have it, a house owned for 20 years would be fully depreciated, and so no capital gains would apply to such a case. But don't let facts or knowledge get in the way of your trolling, please.", "title": "" }, { "docid": "25da61f49242a3389fbc379b3e8e8c64", "text": "You bought a rental property in 2001. Hopefully you paid fair value else other issues come into play. Say you paid $120K. You said you have been taking depreciation, which for residential real estate is taken over 27.5 years, so you are about halfway through. Since you don't depreciate land, you may have taken a total $50K so far. With no improvements, and no transaction costs, you have $50K in depreciation recapture, taxed at a maximum 25% (or your lower, marginal rate) and a cap gain of the 5-10K you mentioned. Either can be offset by losses you've been carrying forward if you suffered large stock losses at some point.", "title": "" }, { "docid": "f30925cada52ee4b7ba9ce02215c0385", "text": "Is that normal? Yes. It's in fact pretty low. Just the FICA taxes you pay are ~7.5%, so you're paying ~21% for State and Federal. Pretty reasonable, especially if you live in a high-tax state (which MA is ~5.3% on all income).", "title": "" }, { "docid": "a09cd21f070cc0902cff893c3827266a", "text": "\"Stocks (among other property) currently is allowed a \"\"stepped-up basis\"\" when valuing for estate tax purpose. From the US IRS web page: To determine if the sale of inherited property is taxable, you must first determine your basis in the property. The basis of property inherited from a decedent is generally one of the following: The fair market value (FMV) of the property on the date of the decedent's death. The FMV of the property on the alternate valuation date if the executor of the estate chooses to use alternate valuation. See the Instructions for Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. If you or your spouse gave the property to the decedent within one year before the decedent's death, see Publication 551, Basis of Assets. Your question continues \"\"the person that died still has to pay taxes on their profits in the year they died, right?\"\" Yes. The estate would be subject to tax on realized gains/losses prior to death.\"", "title": "" }, { "docid": "841f67a51fe5b559c4ce1db46e0b290f", "text": "The point of a total return index is that it already has accounted for the capital gains + coupon income. If you want to calculate it yourself you'll have to find the on-the-run 10y bond for each distinct period then string them together to calc your total return. Check XLTP if they have anything", "title": "" }, { "docid": "0eaa489227b57eec5f75fc86beefaa81", "text": "You are absolutely correct, incorporation and the fiduciary responsibility that comes with it almost always leads to a sacrifice in product quality and long-term business principles. I always think of the difference between McDonalds and In-n-Out hamburgers as examples of where each road leads.", "title": "" } ]	fiqa
5a5f8ad3288f2cb621f7ca5831446fbe	Is it possible to get life insurance as a beneficiary before the person insured dies?	[ { "docid": "32fc43e946560f7aece913aec3c0d849", "text": "I recall the following business from the AIDS crisis: viatical settlement But because there were life-extending treatments developed in the 1990s, many third parties which engaged in these took a bath and it's not as common.", "title": "" }, { "docid": "b2c799c21cbf7e9fc6f2c8ab23de5d35", "text": "If the insurance policy is a whole-life (or variable life) policy, it might have a surrender value that the owner of the policy might be able to get by surrendering the policy in whole; if it is a term life policy, it has no surrender value. In many cases, the owner of the policy is also the insured and so ask Uncle Joe whether he would be willing to surrender the life insurance policy and give you the proceeds now instead of making you wait till he passes away. If it is a term life policy, ask him to consider not renewing the policy and from now on, just give you the premium he would have been paying to the insurance company. Whether he will pay you increasing amounts in later years (as a renewable five-year level term policy might require) is a more delicate matter that you can negotiate with him. On the other hand, if the policy owner is Aunt Annie but the insured is Uncle Joe (and you are the beneficiary), talk to Aunt Annie instead; she is the one who can cancel the policy, not Uncle Joe. And for heaven's sake, don't grease the skids to facilitate Uncle Joe's first step onto the stairway to heaven; there are, depending on where you live, various laws prohibiting payments to beneficiaries who have had a hand in arranging for the happy event to occur.", "title": "" }, { "docid": "328e79ef60ec002d959f06cda2b2b17a", "text": "Generally no. It does not make sense for insurance company to alter terms and if there are such rules it can be subject to misuse.", "title": "" }, { "docid": "b1234f8cb5c80b9ebe1fd888e157d3d7", "text": "\"The short answer is \"\"No\"\". There a 2 ways to get cash from a life insurance policy. If the policy has cash value greater than the surrender value, then the difference can be borrowed, but will generally increase premiums in the future. The other method, available on many term policies allows the owner to receive part of the death benefit if the insured has a physician willing to certify that he/she will probably pass away within a 12 month period. Several carriers also offer cash benefits for critical care.\"", "title": "" } ]	[ { "docid": "3393f7c349cd30df4749a2c59947f9ae", "text": "To add to JoeTaxpayer's answer, the cost of providing (term) life insurance for one year increases with the age of the insured. Thus, if you buy a 30-year term policy with level premiums (the premium is the same for 30 years) then, during the earlier years, you pay more than the cost to the insurance company for providing the benefit. In later years, you pay somewhat less than the cost of providing the insurance. The excess premiums that the insurance company charged in earlier years and the earnings from investing that money covers the difference between the premium paid in later years and the true cost of providing the coverage. If after 20 years you decide that you no longer need the protection (children have grown up and now have jobs etc) and you cancel the policy, you will have overpaid for the protection that you got. The insurance company will not give you backsies on the overpayment. As an alternative, you might want to consider a term life insurance policy in which the premiums increase each year (or increase every 5 years) and thus better approximate the actual cost to the insurance company. One advantage is that you pay less in early life and pay more in later years (when hopefully your income will have increased and you can afford to pay more). Thus, you can get a policy with a larger face value (150K for your wife and 400K for yourself is really quite small) with annual premium of $550 now and more in later years. Also if you decide to cancel the policy after 20 years, you will not have overpaid for the level of coverage provided. Finally, in addition to a policy with larger face value, I recommend that you include the mortgage (if any) on your house in the amount that you decide is enough for your family to live on and to send the kids to college, etc., or get a separate (term life insurance) policy to cover the mortgage on your home. Many mortgage contracts have clauses to the effect that the entire principal owed becomes immediately due if either of the borrowers dies. Yes, the widow or widower can get a replacement mortgage, or prove to the lender that the monthly payments will continue as before, (or pay off the mortgage from that $150K or $400K which will leave a heck of a lot less for the family to survive on) etc., but in the middle of dealing with all the hassles created by a death in the family, this is one headache that can be taken care of now. The advantage of including the mortgage amount in a single policy that will support the family when you are gone is that you get a bit of a break; the sum of the annual premiums on ten policies for $100K is more than the premiums for a single $1M policy. There is also the consideration that the principal owed on the mortgage declines over the years (very slowly at first, though) and so there will be more money available for living expenses in later years. Alternatively, consider a special term life insurance policy geared towards mortgage coverage. The face value of this policy reduces each year to match the amount still due on the mortgage. Note that you may already have such a policy in place because the lender has insisted on you getting such a policy as a condition for issuing the loan. In this case, keep in mind that not only is the lender the beneficiary of such a policy, but if you bought the policy through the lender, you are providing extra profit to the lender; you can get a similar policy at lower premiums on the open market than the policy that your lender has so thoughtfully provided you. I bought mine from a source that caters to employees of nonprofit organizations and public sector employees; your mileage may vary.", "title": "" }, { "docid": "4f1a6600c7d5167d1c80460f44dc3060", "text": "You have asked this question but provide very little information. As others have stated, what country are you in? Was there a will or any other agreement? Basically any estate will go to the beneficiaries once all debtors have been paid off. How this is done will largely depend on which country/state/region you are in and what documentation was in place at the time of death. You might want to check out this website for details on passing away without a will: http://www.nolo.com/legal-encyclopedia/how-estate-settled-if-theres-32442.html", "title": "" }, { "docid": "d3e80c45ba965e888546e407bc8bf122", "text": "Life insurance is not an investment -- by definition, since the companies need to take a profit out of it, the average amount paid in exceeds the amount paid out, yielding a negative rate of return. Get life insurance if your death would cause severe financial hardship for someone. If you have sufficient savings that your wife could recover and move on with her life without hardship, and your kids are grown, you probably DO NOT need life insurance.", "title": "" }, { "docid": "cbe60d47428c4fd61da728a2ede6e83f", "text": "I just went through this and life insurance money generally does not go into Probate. However, since there was no beneficiary, you will have to ask the probate court. I would advise you not to spend any of the money yet. Make a meeting with the probate court in the county where they lived. You will need the death certificate and the will. If you do not have a will, the estate generally does not need to go into probate. But if it does, then they will definitely let you know what to do with the insurance money. Just make sure you use the estate accounts to pay off all of his debts before you distribute the left over money. The entire process should take an absolute minimum of 6 months.", "title": "" }, { "docid": "2d29f10957e2b14100a27d8ab2ce1cbd", "text": "\"There are two types of insurance: whole life and term. I don't recommend whole life insurance, because you are insuring against something that will happen, your death. Maybe you could buy it if members of your family have a history of outliving the averages. This is called \"\"adverse selection.\"\" Term is different: it insures against your UNTIMELY death. Many people I know take term insurance for the X years until their last child leaves college, or some other well defined \"\"term.\"\" They don't want to die before this term but will be satisfied with the insurance as a \"\"consolation\"\" prize.\"", "title": "" }, { "docid": "fa80e2066fab165e86db3de8af6d86ac", "text": "Does such insurance make any sense or is it just wasting money for passengers? As with most insurance, it depends. If you just look at the probability of a payout, the cost of the insurance, and the payout amount, then statistically it will always be better to avoid buying insurance. This is because there is a certain amount of overhead in an insurance company, like the commissions and salaries you mentioned. The goal when buying insurance should be to avoid a cost that you cannot afford or is inconvenient to be able to afford. For example, if your family would be devastated financially by your death then it would make sense for you to buy some sort of life insurance. Whether or not this particular insurance makes sense for you depends on your financial situation and risk tolerance.", "title": "" }, { "docid": "5e37f85cd922fdb9702e05ac45d345b6", "text": "So far all insurances start from the perspective of the insurance taker. However, I find it much more intuitive to look from the perspective of the insurance giver: Note that the exact amount may differ, but management fees of a few dozen percent are quite realistic. Note that it is not as unreasonable as it may sound at first, some costs: And of course most insurance companies will want to keep some profit as well. If you are completely risk averse, typically it is only financial beneficial to get insurance if you have a significantly higher risk profile. Examples of this (not an expert on boats): Note that piece of mind may also be worth getting the insurance for, for instance if you frequently put others in the position to crash your boat, and don't want to create an awkward financial discussion when they do.", "title": "" }, { "docid": "730ad7c986ba008c4a3dfbaf3aed190d", "text": "At their age, the likely did not even need the coverage anymore unless they were doing some major estate planning. If that's the case then it sound like they purchased the wrong policy to begin with since OP's account of the information makes it sound like a term policy. If it is a term policy, the term was also probably about to end as well. In the end, this will likely not be a bog deal.", "title": "" }, { "docid": "a5345be7d605b0afce14d92988730fc0", "text": "Here's the issue with LTC and, really, underwritten insurance in general; no one has a crystal ball. Based on today's available rates where's the sweet spot to buy LTC? Probably right around the mid-60s, because you probably won't pay much in before you start gutting the carrier (assuming you can make it through underwriting in your mid-60s). The issue is, what happens when some life event changes your underwriting status? Would you rather buy prematurely or be excluded entirely? Those are generally your two options when it comes to individual LTC. The underwriting eligibility window on LTC is very narrow. There's a very very small space between the best possible underwriting and being flatly declined. Look for an LTC agent in your area. Likely someone in your circle of friends and family will know a reputable/knowledgeable insurance agent who can run up some quotes at various underwriting classes. Try to avoid looking at quotes for your age + 10 years to see what the quote will look like 10 years from now. 10 years from now the rate tables will be significantly different. Whether or not you should buy LTC now rather than waiting will depend on a whole host of other criteria. Personally, if I was 50 and my biggest health concern was improving my run time and LTC is on my mind, I'd just pick up a policy now while I will likely be in a preferred underwriting class rather than waiting and hoping my health doesn't betray me. Obviously I'm a stranger on the internet and none of this is actual advice. You should find an agent local to you and talk about your options and situation.", "title": "" }, { "docid": "d446846369a78284f7692921324ee4c6", "text": "\"Careful with saying \"\"no need\"\". Look careful at the cost of life insurance. That cost depends obviously on the amount, but also on the age when you start paying into the insurance. If you take out a $100,000 insurance at 20, and someone else takes it out at 30, and a third person at 50, they will pay hugely different amounts when you reach the same age. You will pay less when you are 50 then the person taking out insurance at 30 when they reach the age of 50, and less again than the person who just started with their life insurance. And as mhoran said, once you have insurance you can keep it even if you get an illness that would make you uninsurable.\"", "title": "" }, { "docid": "caf48708dcdc273ce87c8acb2d58e838", "text": "I think the chances of them changing the rules without grandfathering in people of retirement age (pun intended) are pretty small. The general rule of thumb on this issue seems to be to wait to get the full amount if you have sufficient resources that you don't expect to need the money earlier. That is, unless you have some reason to not expect much longevity (family history of dying young, current medical condition, etc.) Ultimately, however, this is a big financial decision that is best made with the help of a good financial adviser/actuary. There are a large number of variables to be considered.", "title": "" }, { "docid": "fc5200a551eb8da86019269ffc0be7db", "text": "Here's a good rule of thumb. In any situation where you are required to purchase insurance (Auto Liability, Property Mortgage Insurance, etc.) you can safely assume that you aren't the primary beneficiary. You are being required to buy that insurance to protect someone else's investment.", "title": "" }, { "docid": "43bfcb307ebfd5d196bfaafbe1c6da53", "text": "If someone recommends a particular investment rather than a class of investments, assume they are getting a commission and walk away. If someone recommends whole life insurance as an investment vehicle, walk away. Find someone whose fiduciary responsibility is explicitly to you as their client. That legally obligated them to consider your best interests first. It doesn't guarantee they are good, but it's done protection against their being actively evil.", "title": "" }, { "docid": "af02b3b52407fb1095c82f3e24c29f34", "text": "If there are no dependents, there is no need for life insurance. You mention getting insurance when it is not needed, to protect you against some future risk. If you have a policy and a disease crops up that would normally make you un-insurable, you can keep your insurance for the rest of the term. The cost for this would be very high. You would have to have a term that would last decades to cover you until some future child is out of college. If you never have somebody that depends on you for income, there never is a need for life insurance.", "title": "" }, { "docid": "e29bc8c9c4d905e2a43a95cbb0da7cc1", "text": "\"As others have said, if you don't have dependents, there's little need for life insurance. If you can't think of any obvious beneficiary for an insurance policy, than you probably don't need one. \"\"Dependents\"\" here should be understood broadly. It wouldn't necessarily be limited to wife and children. If you're the only support for your handicapped cousin, for example, you might want to provide for him. But I take it from your question that you have no such special case. Of course even if you have no dependents now, you might pick some up in the future. And if and when that does happen, your medical situation may have changed, making it difficult to get life insurance. But if you have no immediate plans so that any such even is likely to be far away, a serious alternative to consider would be to invest the money you would have paid in insurance premiums. Then if someday you do acquire dependents, you have a pot of money set aside to provide for them in case something happens to you. If it's not enough and you can get insurance at that time, then great, but if you can't get insurance, at least there's something. If you never do acquire dependents, you can consider that pot of money part of your retirement fund.\"", "title": "" } ]	fiqa
5bc88083377c42e4326cf6f70ad4aeee	If I go to a seminar held overseas, may I claim my flights on my tax return?	[ { "docid": "1ba79cc552d47f900a08881f2c79d879", "text": "You can deduct this if the main purpose of the trip is to attend the seminar. Travel expenses relating to the attendance at conferences, seminars and other work-related events are deductible to the extent that they relate to your income-producing activities. You will need to apportion your travel expenses where you undertake both work-related and private activities. Travel costs to and from the location of the work-related event will only be deductible where the primary purpose of the travel was to attend the event. Accommodation, food and other incidental costs must be apportioned between work-related and private activities taking into account the types of activities that you did on the day you incurred the cost. You might like to consider in advance what you would tell them if they questioned this - for instance you might say (if they are true):", "title": "" }, { "docid": "691b6d6029c2f362848881780986f078", "text": "I think you can. I went to Mexico for business and the company paid for it, so if you are self employed you should be able to expense it.", "title": "" }, { "docid": "081f555c38ac6fb2c9bc41996fc7ad5a", "text": "\"Disclaimer: My answer is based on US tax law, but I assume Australian situation would be similar. The IRS would not be likely to believe your statement that \"\"I wouldn't have gone to the country if it wasn't for the conference.\"\" A two-week vacation, with a two-day conference in there, certainly looks like you threw in the conference in order to deduct vacation expenses. At the very least, you would need a good reason why this conference is necessary to your business. If you can give that reason, it would then depend on the specifics of Australian law. The vacation is clearly not just incidental to the trip. The registration for the conference is always claimable as a business expense.\"", "title": "" } ]	[ { "docid": "8cb4e274c228cb0a2282d036447a0de5", "text": "\"Books would be considered Personal-Use Property according to Canada's income tax laws. The most detailed IT I was able to find is IT-332R, which says: GAINS AND LOSSES 3. A gain on the disposition of personal-use property is normally a capital gain within the meaning of paragraph 39(1)(a). Where the property is a principal residence, the gain > is computed under paragraph 40(2)(b) or (c). 4. Under subparagraph 40(2)(g)(iii), a loss on a disposition of personal-use property, other than listed personal property, is deemed to be nil. [...] This part of the bulletin indicates that a gain might be considered a capital gain - not income. However, you don't get to book a loss as a capital loss. This is the first hint that your book sale - which is actually an exempt capital loss - shouldn't go on your tax return unless it's one of the \"\"listed\"\" items: LISTED PERSONAL PROPERTY 7. Listed personal property is defined in paragraph 54(e) to mean personal-use property that is all or any portion of, or any interest in or right to, any (a) print, etching, drawing, painting, sculpture, or other similar work of art, (b) jewellery, (c) rare folio, rare manuscript, or rare book, (d) stamp, or (e) coin. So unless you're selling rare books, the disposition (sale) of them is essentially exempt as income, regardless of whether you sold it at a profit or at a loss. If it is rare, then you might be able to consider it a capital loss, which doesn't help you much unless you had other capital gains, but you can carry over capital losses to future years. There's also a newer IT related to hobbies and \"\"collecting\"\" items, IT-334R2. This one says: 11. In order for any activity or pursuit to be regarded as a source of income, there must be a reasonable expectation of profit. Where such an expectation does not exist (as is the case with most hobbies), neither amounts received nor expenses incurred are included in the income computation for tax purposes and any excess of expenses over receipts is a personal or living expense, the deduction of which is denied by paragraph 18(1)(h). On the other hand, if the hobby or pastime results in receipts of revenue in excess of expenses, that fact is a strong indication that the hobby is a venture with an expectation of profit; if so, the net income may be taxable as income from a business. The current version of IT-504, Visual Artists and Writers, discusses the concept of \"\"a reasonable expectation of profit\"\" in greater detail. Where a hobby consists of collecting personal-use property or listed personal property, dispositions should be accounted for as described in the current version of IT-332, Personal-Use Property. (emphasis mine) In other words, if it's not the type of thing where you'd make a tax deduction when you bought it in the first place, then you clearly don't need to report it as income when you sell it. Just to be absolutely clear here: The fact that you are selling them at a loss is not actually what's important here. What's important is that, if the books aren't collectibles, then you would have had no expectation of profit. If you did have that expectation then you could have made a tax deduction when you first purchased them. So in this case, it is probably not necessary for you to report the income; however, for the benefit of other readers, in some cases you might need to report it under \"\"other income\"\" or book it as a capital gain/loss, depending on what those personal items are and whether or not you made a net profit.\"", "title": "" }, { "docid": "c2c0ee6cdbc67b58bdec4983dbec7a49", "text": "\"It depends on what the \"\"true\"\" reason for the trip is. If you decide to deduct the trip as a business expense, then during an audit you will be asked why you had to go there. If there was nothing accomplished via the travel (that is, you worked from the hotel, met with no clients, visited no tradeshows, etc) then the expense is unlikely to be allowed. Yes, on a business trip you can do sightseeing if you wish (though you can't deduct any sightseeing specific expenses, like admission to a tourist attraction), but if you are just working while on vacation, then the trip itself is not deductible, since there was no business benefit to traveling in the first place.\"", "title": "" }, { "docid": "61dba5aecad8bc42dfa6168de21ab588", "text": "\"For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the \"\"refund\"\" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a \"\"don't ask, don't tell\"\" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this \"\"loophole\"\". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a \"\"donation\"\" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash.\"", "title": "" }, { "docid": "a87688fb747cdc8f66ebfc69393bdf18", "text": "This is taxed as ordinary income. See the IRC Sec 988(a)(1). The exclusion you're talking about (the $200) is in the IRC Sec 988(e)(2), but you'll have to read the Treasury Regulations on this section to see if and how it can apply to you. Since you do this regularly and for profit (i.e.: not a personal transaction), I'd argue that it doesn't apply.", "title": "" }, { "docid": "943bdfb9bd4b87b033901c6b9f9b209a", "text": "You can do that, you aren't missing anything. It is supposed to be punishment, but as you are moving to a European country your non-penalized income would likely be taxed higher as is. I don't have info on whether you will be taxed a second time by the European country.", "title": "" }, { "docid": "6681aab67e513952ed9e5130e3f33fcc", "text": "\"If you're a US citizen, money earned while in the US is sourced to the US. So you can't apply FTC/FEIE to the amounts attributable to the periods of your work while in the US even if it is a short business trip. Tax treaties may affect this. Most tax treaties have explicit provisions to exclude short trips from the sourcing rules, however due to the \"\"saving clause\"\" these would probably not apply to you if you're a US citizen - you'll need to read the relevant treaty. Your home country should allow credit for the US taxes paid on the US-sourced income, and the double-taxation avoidance provision should apply in this case. The technicalities depend on your specific country. You would probably not just remove it from the taxable income, there probably is a form similar to the US form 1116 to calculate the available credit.\"", "title": "" }, { "docid": "efa51fe7c17d14246a73d36a35151dd5", "text": "\"I would say similar rules apply in the US. If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut. If you are a \"\"real estate professional\"\", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a \"\"real estate professional\"\", then your rental income is considered a \"\"passive activity\"\" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation.\"", "title": "" }, { "docid": "2ce69c9552cebe89bb7ae5454f950e65", "text": "So the EU is forcing its ~~green religion dogma~~ taxation policies on US airlines flying in international airspace? Or is it just taxing the fuel that is burned while flying through EU airspace? If the tax applies to all of the fuel that is burned, even that which is burned in international and US airspace, who gets the money?", "title": "" }, { "docid": "e316d41336ca3bda6eb126bcc4115790", "text": "\"Can I use the foreign earned income exclusion in my situation? Only partially, since the days you spent in the US should be excluded. You'll have to prorate your exclusion limit, and only apply it to the income earned while not in the US. If not, how should I go about this to avoid being doubly taxed for 2014? The amounts you cannot exclude are taxable in the US, and you can use a portion of your Norwegian tax to offset the US tax liability. Use form 1116 for that. Form 1116 with form 2555 on the same return will require some arithmetic exercises, but there are worksheets for that in the instructions. In addition, US-Norwegian treaty may come into play, so check that out. It may help you reduce the tax liability in the US or claim credit on the US taxes in Norway. It seems that Norway has a bilateral tax treaty with the US, that, if I'm reading it correctly, seems to indicate that \"\"visiting researchers to universities\"\" (which really seems like I would qualify as) should not be taxed by either country for the duration of their stay. The relevant portion of the treaty is Article 16. Article 16(2)(b) allows you $5000 exemption for up to a year stay in the US for your salary from the Norwegian school. You will still be taxed in Norway. To claim the treaty benefit you need to attach form 8833 to your tax return, and deduct the appropriate amount on line 21 of your form 1040. However, since you're a US citizen, that article doesn't apply to you (See the \"\"savings clause\"\" in the Article 22). I didn't even give a thought to state taxes; those should only apply to income sourced from the state I lived in, right (AKA $0)? I don't know what State you were in, so hard to say, but yes - the State you were in is the one to tax you. Note that the tax treaty between Norway and the US is between Norway and the Federal government, and doesn't apply to States. So the income you earned while in the US will be taxable by the State you were at, and you'll need to file a \"\"non-resident\"\" return there (if that State has income taxes - not all do).\"", "title": "" }, { "docid": "a9fce735a06d3dd36302147dbd99a66d", "text": "It depends and I would not just jump into conclusion as I have seen cases where offering some services are not U.S. sourced income. I'll advise you speak with a knowledgeable tax professional.", "title": "" }, { "docid": "c11d1781a910fe53b160db6f0ac43cb5", "text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate", "title": "" }, { "docid": "f41ce7e0d2fa9c6ff52ac387f7808299", "text": "The committee folks told us Did they also give you advice on your medication? Maybe if they told you to take this medicine or that you'd do that? What is it with people taking tax advice from random people? The committee told you that one person should take income belonging to others because they don't know how to explain to you which form to fill. Essentially, they told you to commit a fraud because forms are hard. I now think about the tax implications, that makes me pretty nervous. Rightly so. Am I going to have to pay tax on $3000 of income, even though my actual winning is only $1000? From the IRS standpoint - yes. Can I take in the $3000 as income with $2000 out as expenses to independent contractors somehow? That's the only solution. You'll have to get their W8's, and issue 1099 to each of them for the amounts you're going to pay them. Essentially you volunteered to do what the award committee was supposed to be doing, on your own dime. Note that if you already got the $3K but haven't paid them yet - you'll pay taxes on $3K for the year 2015, but the expense will be for the year 2016. Except guess what: it may land your international students friends in trouble. They're allowed to win prizes. But they're not allowed to work. Being independent contractor is considered work. While I'm sure if USCIS comes knocking, you'll be kind enough to testify on their behalf, the problem might be that the USCIS won't come knocking. They'll just look at their tax returns and deny their visas/extensions. Bottom line, next time ask a professional (EA/CPA licensed in your State) before taking advice from random people who just want the headache of figuring out new forms to go away.", "title": "" }, { "docid": "ac752fb104fc90705e42850f151aec14", "text": "What I'm going to write is far too long for a comment, so I'll put it here even though its not an answer. That's the closest thing to an answer you'll get here, I'm afraid. I'm not a tax professional, and you cannot rely on anything I say, as you undoubtedly know. But I'll give you some pointers. Things you should be researching when you have international clients: Check if Sec. 402 can apply to the pension funds, if so your life may become much easier. If not, and you have no idea what you're doing - consider referring the client elsewhere. You can end up with quite a liability suit if you make a mistake here, because the penalties on not filing the right piece of paper are enormous.", "title": "" }, { "docid": "b7c69995a03600169bdd569cdbd3f7af", "text": "I can't find anything specifically about holding international real estate as a US taxpayer, but the act of transferring the money to (I presume) an account of yours in Italy, and any other associated accounts, will trigger requirements for reporting under FBAR and FACTA. Even with this, it is primarily a reporting requirement. I do not believe you will incur any additional taxes unless you do rent out the property (or allow someone not a reported dependent to make use of the property). Note that if you do not report and should, the penalties are quite steep, so please do comply. NOTE: I am not a tax expert, nor a lawyer, nor an accountant, nor an agent of the IRS. Please consult one or all of these before making any decisions.", "title": "" }, { "docid": "c630aeb467186a71cce758e33cc14d9f", "text": "ML is a brokerage firm. Tell them to sell. If you can't or don't know how to do it on-line - call them and do it over the phone. Your citizenship might come in effect when tax are withheld, you need to fill form W8-BEN if you haven't done so yet. If US taxes are withheld, you can file 1040NR to request refund, or get it credited against your local tax liabilities.", "title": "" } ]	fiqa
a0924aeaa3a313090bcde3e09ba44f71	Double entry for mortgage	[ { "docid": "e31d8c3f836d3ec8d604107df90b5081", "text": "For the purpose of personal finance, treating $500 as Interest Expense is sufficient. For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan.", "title": "" }, { "docid": "0bcbb94c232d3c08232b50344bfc12be", "text": "The £500 are an expense associated with the loan, just like interest. You should have an expense account where you can put such financing expenses (or should create a new one). Again, treat it the same way you'll treat interest charges in future statements.", "title": "" } ]	[ { "docid": "409ac925651cc4ebb63b381c55fee2a8", "text": "Sounds fishy - taking out more debt to pay the main mortgage down faster? There are a couple of issues I can see: I would think that a much more sensible strategy with a lot less risk is to save up extra cash and send your lender a check every quarter or six months.", "title": "" }, { "docid": "9480629b3fcd1e52c37b21d24bc2587a", "text": "\"I took a second mortgage when I moved house because I had a long-term fixed rate mortgage that would have incurred punitive fees if I had cancelled it. Rather than doing that I took a second mortgage over the same term for the difference. As my second mortgage was with the same lender, they still had \"\"First Charge\"\" on the property (This means that in the event of default they have first call on the property to recoup their losses), so the interest rate was not higher (actually it was slightly less than my first mortgage). My case is not that usual, normally a 'second mortgage' is with a separate provider that takes a \"\"Second Charge\"\" on the property. The interest rates are normally higher as a result as there is more chance that the lender will not recoup their money in case of a default as the first charge has priority. The second mortgage may still be cheaper than an unsecured loan, as the second charge provides some collateral, this might make it attractive if a sudden expense needs to be covered.\"", "title": "" }, { "docid": "bfa0272d5b3a2671dfda9ee449eee319", "text": "\"littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line \"\"extra principal.\"\" By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage.\"", "title": "" }, { "docid": "aa1f9c1214d7c33fb2a1e73c46fcb482", "text": "\"You don't. No one uses vanilla double entry accounting software for \"\"Held-For-Trading Security\"\". Your broker or trading software is responsible for providing month-end statement of changes. You use \"\"Mark To Market\"\" valuation at the end of each month. For example, if your cash position is -$5000 and stock position is +$10000, all you do is write-up/down the account value to $5000. There should be no sub-accounts for your \"\"Investment\"\" account in GNUCash. So at the end of the month, there would be the following entries:\"", "title": "" }, { "docid": "48868ffe482149e6978a8f1257960eff", "text": "The calculations you suggest have some issues, but I think they are not necessary to answer the question: It sounds like you are buying the house either way. So the question really is simply whether to pay toward your house first or your loan first. In that case, the answer is simple: pay whichever has the highest interest rate first. Make the minimum payment on the other until the first is paid off. Remember this and make it your mantra for the rest of your life. If you have any debts (such as credit cards) that charge a rate higher than the two options you have presented, do them first. Now, be careful as you compute the interest rates. Most likely you can deduct interest on your mortgage, so its effective interest rate is lower [it is (1-T)*R instead of R, where T is your marginal tax rate]. For a while, the cost of mortgage insurance will make your effective mortgage rate artificially high, but it sounds like you intend to get to that 20% hurdle pretty fast, so my guess is that this is not a big factor. Congratulations on your bonus and good luck with your new home.", "title": "" }, { "docid": "f31499789d7290c5909610351f06461a", "text": "I can't give you a specific answer because I'm not a tax accountant, so you should seek advice from a tax professional with experience relevant to your situation. This could be a complicated situation. That being said, one place you could start is the Canada Revenue Agency's statement on investment income, which contains this paragraph: Interest, foreign interest and dividend income, foreign income, foreign non-business income, and certain other income are all amounts you report on your return. They are usually shown on the following slips: T5, T3, T5013, T5013A To avoid double taxation, Canada and the US almost certainly have a foreign tax treaty that ensures you are only taxed in your country of residence. I'm assuming you're a resident of Canada. Also, this page states that: If you received foreign interest or dividend income, you have to report it in Canadian dollars. Use the Bank of Canada exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. You should consult a tax professional. I'm not a tax professional, let alone one who specializes in the Canadian tax system. A professional is the only one you should trust to answer your question with 100% accuracy.", "title": "" }, { "docid": "3afb0883ae38ba9c71dcea12eef9398c", "text": "I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books.", "title": "" }, { "docid": "7da7f4bfd86810b55a4c938eb892ef0a", "text": "As pointed out in a comment, it would be more natural to get a regular mortgage on the second house, which is essentially using the second house as collateral for its own loan. If you are to use the first house, either mortgage it or get a home equity line of credit on it and use that money to buy the second house. The relative merits of the options may depend in part on where you live, whether or not you live in the homes, and the relative cost of the two properties. For example, in the US, first and second homes get preferred tax treatment in addition to rates that are typically better than commercial loans (including mortgages for investment properties). If you're going to get a better rate and pay less taxes on one option and not on the others, that's definitely something to weigh.", "title": "" }, { "docid": "1c2347a4ed4cd25bf7adcbdf7126f9d7", "text": "The rules of thumb are there for a reason. In this case, they reflect good banking and common sense by the buyer. When we bought our house 15 years ago it cost 2.5 times our salary and we put 20% down, putting the mortgage at exactly 2X our income. My wife thought we were stretching ourselves, getting too big a house compared to our income. You are proposing buying a house valued at 7X your income. Granted, rates have dropped in these 15 years, so pushing 3X may be okay, the 26% rule still needs to be followed. You are proposing to put nearly 75% of your income to the mortgage? Right? The regular payment plus the 25K/yr saved to pay that interest free loan? Wow. You are over reaching by double, unless the rental market is so tight that you can actually rent two rooms out to cover over half the mortgage. Consider talking to a friendly local banker, he (or she) will likely give you the same advice we are. These ratios don't change too much by country, interest rate and mortgages aren't that different. I wish you well, welcome to SE.", "title": "" }, { "docid": "d137f8ba2fc7c051f2118309f7059b59", "text": "There is no such thing as double taxation. If you pay tax in the US, you CAN claim tax credits from India tax authority. For example, if you pay 100 tax in USA and your tax liability in India is 200, then you will only pay 100 (200 India tax liability minus 100 tax credits on foreign tax paid in the USA). This is always true and not depending on any treaty. If there is a treaty, the tax rate in the United States is set on the treaty and you CAN claim that final tax rate based upon that treaty. If you operate an LLC, and the income is NOT derived from United States and you have no ties with the US and that LLC is register to a foreign person (not company but a real human) then you will not have to submit tax return in the US... I advice you to read this: http://www.irs.gov/businesses/small/article/0,,id=98277,00.html", "title": "" }, { "docid": "3902ff75b95b17d3da9bb9b7e00e3bdb", "text": "\"If you have enough earned income to cover this amount you should be all set. If I understand you correctly you proposed two transactions. The first, a withdrawal from the beneficiary IRA. Some of which is an RMD the rest is an extra withdrawal of funds. Next, you propose to make a deposit to a combination of your IRA and your wife's IRA. As long as there's earned income to cover this deposit, your plan is fine. To be clear, you can't \"\"take a bene IRA and deposit the RMD to an IRA.\"\" But, money is fungible, the dollars you deposit aren't traceable, only need to be justified by enough earned income. A bene IRA is a great way to get the money to increase your own IRA or 401(k) deposits. Further details - The 2016 contribution limit is $5,500 per person, so I did make the assumption you knew the $9000 deposit need to be split between the 2 IRAs, with no more than $5500 going into either one.\"", "title": "" }, { "docid": "042b242265023ff11bf09c68b010334d", "text": "If you can qualify for two mortgages, this is certainly possible. For this you can talk to a banker. However, most people do not qualify for two mortgages so they go a different route. They make offers on a new home with a contingency to sell the existing home. A good Realtor will walk you through this and any possible side effects. Keep in mind that the more contingencies in an offer the less attractive that offer is to sellers. This is how cash buyers can get a better deal (no contingencies and a very fast close). Given the hotness of your market a seller might reject your offer as opposed to first time home buyer that does not need to sell an old home. On the other hand, they may see your contingency as low risk as the market is so hot. This is why you probably need a really good agent. They can frame the contingency in a very positive light.", "title": "" }, { "docid": "5118f344d1af3a18c3adfa1c3264fd1f", "text": "If your mortgage is an interest only one then the full amount of the payment you make should be to an expense account perhaps called mortgage interest. If the mortgage is a repayment mortgage you need to split the amount of the payment between such an expense account called mortgage interest and between a liability account which is the amount of the loan. In practice I have not found it very easy to do all this as the actual amounts vary depending on number of days in the month and then there are occasional charges etc made by the mortgage company so some approximations seem to be needed unless one is to spend hours trying to get it exactly correct...... Steve", "title": "" }, { "docid": "252746493a0e4309e5f8a4c89e7e6467", "text": "I'll preface this with saying that I'm not a finance or real estate professional, this is just how I understand the situation and what I'm doing: We just got a 30year/FHA mortgage, there's no prepayment penalty, and no fees associated with paying it biweekly. In fact (Wells Fargo), while the payments get withdrawn biweekly, they don't actually post to the mortgage until there's enough for a full payment. So essentially here are the benefits I'm realizing:", "title": "" }, { "docid": "8f92ce53db50ec532e8395af9da6f0bb", "text": "I think you are running into multiple problems here: All these together look like a high risk to a bank, especially right now with companies being reluctant to hire full-time employees. Looking at it from their perspective, the last thing they need right now is another potential foreclosure on their books. BTW, if it is a consolation, I had to prove 2 years of continuous employment (used to be a freelancer) before the local credit union would consider giving me a mortgage. We missed out on a couple of good deals because of that, too.", "title": "" } ]	fiqa
660f19ee869d017a20ba8ba2c00b5477	Why doesn’t every company and individual use tax-havens to pay less taxes?	[ { "docid": "6a79cda350d7160731ebebf084b0ff5c", "text": "\"I believe that an understanding of the taxation system can help to understand our place in it, and how that impacts each of our personal finances. I will try to remain unbiased here but this is a somewhat subjective question, so please bear with me if you disagree on any point. Some of these tax savings are well-advertised, and can be used by many people, such as tax credits for mass-transit passes which exists in some countries. But some of these tax savings are things you never heard of before, until it winds up on the news. Why do some people seem to get tax savings that you and I cannot get, and why do those people always seem to have so much more money than us? A simplistic answer can show this in three parts: (1) The source of one's income; (2) Transaction costs; and (3) \"\"tax loopholes\"\". Tax savings occur proportionately to one's income, and if the savings apply to investment income, they occur proportionately to one's wealth. If someone living paycheck to paycheck with a minimal amount in a bank account \"\"saves tax on investment income\"\", they might reduce their taxable interest from $50 to $0. That's because they simply don't have any other investment income to reduce. All of their income comes in the form of employment, which is typically very hard to save taxes on. Most governments have a very firm grasp on the taxation of employment income, because it is a huge proportion of income in the country (and therefore has the largest amount of tax associated), and because it is very straightforward (work for someone = employment income). A more cynical person than I might point out that investment income is earned by the very wealthy, who can afford to lobby for politicians to pass favourable investment income laws. Even very straightforward tax saving opportunities may cost money to enable. The simplest example would be: if a tax saving opportunity is so complicated that an average person can't understand it themselves, then an accountant, lawyer, or banker will need to be the one to explain it. And that can cost you money. If your tax isn't so much to begin with, then the transaction costs to achieve the tax savings could be higher than the tax savings themselves. For example, most countries have tax savings / deferrals if you start a corporation. These rules typically exist to promote investment in the local economy. But someone who earns $10k in a side-business might not be able to afford the $3k in incorporation costs just to save $2k in taxes. The more income and wealth you have, the more these transaction costs become worthwhile. I'm going to generally define \"\"tax loopholes\"\" for the purposes of this answer as something where a somewhat arbitrary situation allows for taxes that a layman would consider unfair or unexpected. This often occurs with good intentions but poor legislation - the government tries to provide a benefit to a deserving group or to promote an activity, but ends up allowing another group to take advantage. For example in Canada, there existed until a few years ago tax saving rules about passing on wealth to children at lower tax rates, only when a close family member is near-death [setting up a 'testamentary trust' between a grandparent and a grandchild could in some circumstances allow that trust to be created with additional 'tax brackets', meaning more income would be taxed at a less-than top tax rate before being distributed to the grandchildren]. The rules were put in place with the idea that \"\"oh gee, a family member has died, and the dang ol' family is grieving so hard they can't distribute the wealth to the next generation for a few months on account of all the crying. We should make it so that the estate is taxed like a person, and if they earn only a little income, they have a low tax rate, and they only get taxed at the full rate if they have a lot of income\"\". Seems reasonable enough, but if a family is ready to pass on wealth at the same time as someone is nudging the bucket with their foot, a morbid discussion with your lawyer and accountant could set your children up for life with forever reduced taxes on massive inheritances. In the case of the Panama / Paradise leaks, tax savings are due to all 3 of the above: Those who have massive wealth (and therefore earn the majority of their income from investments instead of employment) can afford the transaction costs associated with taking advantage of specific \"\"tax loopholes\"\". The simplest example of which is just that income earned in a foreign country might have a lower tax rate than income earned domestically. This is often a result of \"\"cracks\"\" in the foreign tax treaties between countries, which exist generally to promote business between countries and prevent double-taxing individuals who need activity in both countries for whatever reason. Take for example the \"\"Apple loophole\"\". Apple has operations around the world. Some activity occurs in low-tax jurisdictions. Apple reports a high percentage of the value of R&D as being associated with those jurisdictions. Those branches in low-tax jurisdictions charge the high-tax branches (such as the US) with fees for use of their valuable research. So much of Apple's income is reported in those foreign jurisdictions. It won't be taxed in the US until Apple \"\"repatriates\"\" the cash back to the US. Until then, the cash sits in the foreign jurisdiction, accruing less tax. This and similar rules can be used by individuals wealthy enough to hold corporations in foreign jurisdictions with low tax rates. How each particular rule / \"\"loophole\"\" works will depend on the nature of a specific case - tax law is complex, and the rules between countries are even more so. These foreign tax loopholes are closing every year. It is getting harder and harder to hide money offshore, and it is getting less and less likely that you will be able to find a country with juuuust the right loopholes for your own offshore wealth. These types of news leaks will only help to expedite those changes.\"", "title": "" }, { "docid": "bd2b59be1209888981f7fe29cf6b6e0d", "text": "\"Your \"\"average company and taxpayer\"\" generally wouldn't have significant off-shore/foreign income. In the U.S., for example, even if you have your employer deposit all of your salary to an account at a foreign bank, they would still report it to the IRS as income. Removing the money from your home country isn't what gets it out of being taxed, it's that the money was never in your home country.\"", "title": "" }, { "docid": "4b10baf24c0aa7867791b8ae4fe55005", "text": "In a nutshell, there are significant entrance hurdles, legally and especially financially. The fixed cost and effort to get it set up is high (although later, the proportional cost and efforts are negligible). Therefore, this is only of interest for taxable amounts of seven digits or more - which most people don’t reach.", "title": "" }, { "docid": "614098cccc7c2833b8fc3c2452d2e12c", "text": "\"Ditto @GradeEhBacon, but let me add a couple of comments: But more relevantly: GradeEhBacon mentioned transaction costs. Yes. Many tax shelters require setting up accounts, doing paperwork, etc. Often you have to get a lawyer or accountant to do this right. If the tax shelter could save you $1 million a year in taxes, it makes sense to pay a lawyer $10,000 to set it up right. If it could save you $100 a year in taxes, paying $10,000 to set it up would be foolish. In some cases the tax savings would be so small that it wouldn't be worth the investment of spending $20 on a FedEx package to ship the paperwork. Inconvenience. Arguably this is a special case of transaction costs: the cost of your time. Suppose I knew that a certain tax shelter would save me $100 a year in taxes, but it would take me 20 hours a year to do the paperwork or whatever to manage it. I probably wouldn't bother, because my free time is worth more than $5 an hour to me. If the payoff was bigger or if I was poorer, I might be willing. Complexity. Perhaps a special case of 3. If the rules to manage the tax shelter are complicated, it may not be worth the trouble. You have to spend a bunch of time, and if you do it wrong, you may get audited and slapped with fines and penalties. Even if you do it right, a shelter might increase your chance of being audited, and thus create uncertainty and anxiety. I've never intentionally cheated on my taxes, but every year when I do my taxes I worry, What if I make an honest mistake but the government decides that it's attempted fraud and nails me to the wall? Qualification. Again, as others have noted, tax shelters aren't generally, \"\"if you fill out this form and check box (d) you get 50% off on your taxes\"\". The shelters exist because the government decided that it would be unfair to impose taxes in this particular situation, or that giving a tax break encourages investment, or some other worthy goal. (Sometimes that worthy goal is \"\"pay off my campaign contributors\"\", but that's another subject.) The rules may have unintended loopholes, but any truly gaping ones tend to get plugged. So if, say, they say that you get a special tax break for investing in medical research, you can't just declare that your cigarette and whiskey purchases are medical research and claim the tax break. Or you talked about off-shore tax havens. The idea here is that the US government cannot tax income earned in another country and that has never even entered the US. If you make $10 in France and deposit it in a French bank account and spend it in France, the US can't tax that. So American companies sometimes set up bank accounts outside the US to hold income earned outside the US, so they don't have to bring it into the US and pay the high US tax rate. (US corporate taxes are now the highest of any industrialized country.) You could, I suppose, open an account in the Caymans and deposit the income you earned from your US job there. But if the money was earned in the US, working at a factory or office in the US, by a person living in the US, the IRS is not going to accept that this is foreign income.\"", "title": "" }, { "docid": "a67e97c315357cc1ac6335a6f29b8e79", "text": "\"There are tax free bonds in the United States. They are for things like public housing and other urban projects. They are tax free for everyone but only rich people buy them. Why? The issue is that the tax free nature of the bond is included in its yield. So rather than yielding say a 5% return, they figure that the owner is getting 20% off due to not paying taxes. As a result, they only give a 4% return but are as risky as a 5% return investment. Net result, only rich people invest in tax free bonds. \"\"Rich\"\" is defined here to mean people paying a 20% tax on long term investment returns. Or take the State and Local Tax (SALT) deduction, which has been in the news recently. Again, it is technically open to everyone. But there is also a standard deduction that is open to everyone. For the typical family, state and local taxes might be 5% of income. So for a family making $100k a year, that's $5k. The same family can take a $13k or so standard deduction instead of itemizing. So why would they take the smaller deduction? As a practical matter, two groups take the SALT deduction. People rich enough to pay more than $13k in state and local taxes and people who also take the mortgage interest deduction. So it helps a lot of people who are rich quite a bit. And it helps a few middle class people some. But if you are lower middle class with a $30k mortgage on a tiny house and paying 4% interest, then that's only $1200 a year. Add in property taxes of $3000 and SALT of $2.8k and that's only $7k. Even if the person gives $3k to charity, the $13k deduction is a lot better and requires less paperwork. Contrast that with someone who has $500k mortgage at 3.6% interest. That's $18k in interest alone. Add in a SALT of $7k and property taxes of $50k, and there's $75k of itemized deductions, much better than $13k. Now a $7k donation to charity is entirely deductible. And even after the mortgage interest deduction goes away, the other $64k remains.\"", "title": "" }, { "docid": "8b4ca1ab5cb8361c56e25a44e7b344cf", "text": "\"And yet, the same law that these individuals and companies use to lower their taxes applies for every citizen and company of the country. Thus, in principle, every individual and company could make use of these methods. Clearly, they do not. Why? Misconception number 1. How did you conclude they do not? Because NY Times didn't spend time doing an expose' on your plumber? The Panama Papers and the Paradise Papers contain the files from merely three companies that help in this large industry. This is a story about poor IT policies of three companies. A potential reason could be the price charged to set up and maintain these services. This is a significant deterrent. The costs of forming offshore entities are perpetuated by the expensive lawyers, registered agents and incompetent government representatives in these tiny jurisdictions. (For what its worth, even most United States are pretty incompetent at these administrative processes. Really only a few financial centers and a few exceptions have it all streamlined.) These are scale problems primarily. The incompetence of different nation/state's public sectors will make you realize everything you take for granted. The main message emerging from Panama Papers, Paradise Papers, and the like, is that it is the rich, powerful and famous who make use of and benefit from tax havens. But not exclusively for tax purposes. Newspapers, and even the organization leaking this information, is driving clicks to a gullible and impressionable public. I've talked with ICIJ (who release and push the discussion on the Panama/Paradise Papers), they really do believe in their \"\"tax expose'\"\" angle, but lack any consideration of how business work. 'Tax Haven'. These are sovereign nations with due process with democratically elected legislatures who looked at their budget and realized they don't need to fund their government via passive taxes. Their governments offer a good and service that people want, and it provides enough revenues to their governments. Many of these jurisdictions have well evolved corporate laws for fast evolving business models. For example, The Segregated Portfolio Company in the British Virgin Islands is more well defined and supported by clearer case law and is more useful entity than a Series LLC in the few United States that support it. There are at least a dozen reasons why someone would use a \"\"tax haven\"\", where only one of them is \"\"tax\"\".\"", "title": "" }, { "docid": "737584b1df2438d3c2880417457d2498", "text": "Many of the Financial intermediaries in the business, have extraordinary high requirements for opening an account. For example to open an account in Credit Suisse one will need 1 million US dollars.", "title": "" }, { "docid": "be55d01ea3210d4e85ba15cac77c8570", "text": "However, if you are employed by a company that exists in a tax haven and your services are provided to an employer by that tax haven company, it is the tax haven company that gets paid, not you. Under various schemes that company need not pay you at all. For example it may make you a loan which is not taxed (ie you don't pay tax on a loan, just as you don't pay tax on the money lent you by a mortgage company). You are bound by the terms of the loan agreement to repay that loan at a rate that the company finds acceptable. Indeed the company may find eventually that it is simply convenient to write off the loan as unrecoverable. if the owners/officers of he company write off your loans, how much tax will you have paid on the money you have had as loans? The taxman can of course state that this was simply set up to avoid tax (which is illegal) so you should have a balancing scheme to show that that the loans were taken to supplement income,just as one might take a bank loan / mortgage, not replace it entirely as a tax scam. Hiring tax counsel to provide this adequate proof to HMRC has a price. Frequently this kind of loophole exists because the number of people using it were sufficiently low not to warrant policing ( if the policing costs more than the tax recovered, then it is more efficient to ignore it) or because at some stage the scheme has been perfectly legal (as in the old offshore'education' trust recommended by the government a few decades ago). When Gordon Brown set out a 75% tax rate (for his possibly ideological reasons rather than financially based ones)for those who had these accounts , he encountered opposition from MPs who were going to be caught up paying high tax bills for what was effctively retrospective taxation, so there was a built in 'loophole' to allow the funds to be returned without undue penalty. If you think that is morally wrong, consider what the response would be if a future Chancellor was to declare all IAs the work of the devil and claim that retrospective tax would need to be paid on all ISA transactions over the last few decades.eg: tot up all the dividends and capital gains made on an ISA in any year and pay 40% tax on all of them, even if that took the ISA into negative territory because the value today was low/ underperfoming. Yet this has been sggested as a way of filling in the hole in the budget on the grounds that anyone with an ISA can be represented as 'rich' to a selected party of voters.", "title": "" } ]	[ { "docid": "ddbfee81b2dd2fedc5864ad12ce58715", "text": "I'm going to guess that now you're going to explain how you shouldn't add up these percentages. That is most certainly wrong. The reason is that countries aren't going to agree on an order in which to tax a company. It wouldn't go like: well UK taxes first then Germany will tax whatever is left in net profits. Why the hell would Germany agree to that? They would each want their percentage of the untaxed pie.", "title": "" }, { "docid": "2948cd0e63af02de801485656a7996bc", "text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States. Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"", "title": "" }, { "docid": "86a58016d685e1775ba7bfe86afae3c2", "text": "\"You mean to tell me that everyone doesn't pay his/her fair share?! Please say it isn't so. :) Therein lies the welfare state: Tax the rich more heavily to subsidize the poor, and hobble the rich's ability to do so on their own accord. In any case, though, in the United States, if you make any money whatsoever, that usually counts as income, and can hence be taxed. Here's the IRS' definition of gross income. Pretty all-inclusive, isn't it? Businesses are allowed to deduct expenses to count against their income, but if one has more expenses than income year after year, (a) this is the road to financial ruin, and (b) the IRS puts an end to the tax losses after enough years of failing to show a profit. So, sure, if a businessperson doesn't have any income, then they're technically using the roads, etc., \"\"for free,\"\" but unless the businessperson wants to live off the land and the kindness of strangers, he'd better turn a profit eventually. Then he'll be taxed.\"", "title": "" }, { "docid": "51b98857496db91ad880cc721db0c57c", "text": "\"That's a very clear explanation, thanks! So a few additional things if anyone will humor my curiosity... 1. By \"\"one-time\"\" tax, does that mean a company that has, say, $5B overseas could bring that back into the US and just be taxed $500M, then keep the remaining $4.5B? 2. Could a company choose a percentage of their overseas money to transfer into the US? Like, only bring in 8% of that $5B ($400M) and be taxed $40M, while keeping all the rest outside the US? Or would it be mandatory to bring it all over? 3. Would most companies just start that same practice of routing to tax havens again after this tax is implented?\"", "title": "" }, { "docid": "085d5ffce51b655747223b981112e7cd", "text": "\"It sounds good, but perhaps they've overlooked several things that would need to be addressed before anything like this could work well. 1) If there is a leak in the overall flow, such as a HFT hedge fund sucking money out of the markets at an enormous rate into a tax haven, such a system would just perpetuate the existing rise of the superwealthy entities. They still get richer without spending much in return. 2) As described they have only talked about one government, one nation, one monetary recycling system, as if nations are closed boxes. They are not. Money flows across borders with ease. Nations compete to maximise the amount of assets they hold within their borders at any given time. These can be fixed capital assets too. So nothing prevents the \"\"global equity investment\"\" they mention from starting to resemble all the powerful corporations concentrated in a single favoured nation over time. That would represent a lot of political power concentrated in ways that are not necessarily favourable to individual sovereign national legal systems elsewhere. It is possible that this could mean that nations would compete to lower taxes to zero to attract corporations, thereby risking bankrupting governments unless the income from the global equity index compensated enough. At 6% it won't match current tax rates. The second point also means that nations cannot unilaterally decide to implement this unless they have a guaranteed additional inflowing income from transnational activities that could compensate for excessive outflow.\"", "title": "" }, { "docid": "adda4a9f88198cd8bcf8f5d44e0473bc", "text": "Many examples in Europe and other countries have shown once you break that barrier people will go to extreme lengths to avoid it. So much so back in the 80s in the UK tax rates over 75% were imposed, needless to say when they reduced it to 40% they actually got more money. Ultimately it does more harm than good to the economy and means well paid jobs leave the country and go elsewhere. The exact same thing is happening right now with the French moving to London. http://www.bbc.co.uk/news/magazine-18234930", "title": "" }, { "docid": "207a39fe2e1a34b9c6cb216915cb9b90", "text": "\"You're confused. This has nothing to do with taxes. It has to do with screwing people out of profit-sharing. The shell company pays bogus/hyper-inflated fees to the parent company, who pays taxes on them. That way, the contract with the shell company that says \"\"you get 5% of the profits\"\" now means nothing.\"", "title": "" }, { "docid": "22134f97c9279b484342d04421ff2d5e", "text": "\"'Note that \"\"to keep an investor from lowering their tax bill\"\" is not an explanation'. Well, yes it is. In fact it is the only explanation. The rule plainly exists to prevent someone from realizing a loss when their economic situation remains unchanged before/after a sale. Now, you might say 'but I have suffered a loss, even if it is unrealized!' But, would you want to pay tax on unrealized gains? The tax system still caters to reducing the tax impact of investments, particularly capital investments. Part and parcel with the system of taxing gains only when realized, is that you can recognize losses only when realized. Are there other ways to 'artificially' reduce taxable income? Yes. But the goal of a good tax system should be to reduce those opportunities. Whether you agree that it is fair for the government to prevent this tax-saving opportunity, when others exist, is another question. But that is why the rule exists.\"", "title": "" }, { "docid": "b0845ea3bb217850b6499a6db3cd4b63", "text": "\"First, I'm not a CPA or international tax accountant; my entire understanding of the French tax system is entirely from what I've read in places like the WSJ, Barrons, WaPo, etc. However, *my understanding* is that French tax law works something like this. Let's say France has a tax rate of 35%. First, it must be assessed where the controlling entity is. In this case, if the majority of production and labor, or if the corporation is primarily based in France, it would proceed as follows. Taxes are initially paid based on transfer pricing to the original local entity (this avoids \"\"double taxation\"\"). So in the example above, you would pay 10% to India on the $3,000,000 in profits ($300,000). You would then reduce the 35% French tax rate by the 10% already paid. This means you would pay an additional 25% to France ($750,000). The premise is that you have an effective \"\"minimum\"\" tax threshold for being in France. In the case above, companies like GE would have to pay the difference (this doesn't get into tax breaks/shelters on previously recorded losses, etc.). Again, *I AM NOT SURE ON THIS. This is my basic understanding and am by no means a tax accountant/lawyer/etc. From what I understand; however, this hasn't necessarily been a good thing for France either (California is likely a similar case study with the Unitary return requirement). The fact is the world is very global nowadays. Its easier and cheaper for the companies to just leave instead of being forced to pay higher taxes... IMO, Germany hit it right on the head. Low corporate tax rates with high personal tax rates. This maintains a very business friendly environment (business move there because of the skilled labor and low corporate taxes), but they effectively pass the burden on to individuals (who also benefit from the pro-business environment). You'd be hard pressed to find an economist that doesn't think Germany's economy has been very strong over the past decade (very good Soros speech that was recently posted about his analysis of the Euro and Germany's unfair benefits, but that's a whole different gear). What I find the issue to be is the whole concept is complex enough that's difficult to explain to the average person with a 2 second attention span. That's why I like writing posts like this, to try to help people understand how finance and businesses operate behind the scenes!\"", "title": "" }, { "docid": "5ee6112f35da0db5c94c7853706cb131", "text": "[90% of their income](https://en.m.wikipedia.org/wiki/Economy_of_the_Bahamas) is from services. And 80% of that income is from the US..... Do some research. Still waiting for this no tax, no government utopia which works so well* (yet there doesn't seem to be a good example of in existence...)", "title": "" }, { "docid": "5edf2f1e73f47cd5ee55c47a59f8e782", "text": "A government is there to serve the people. Under this logic, a government is doing a disservice to its people by allowing a corportation to have a signicantly lower tax rate in relation to the value a corportation would gain from doing business in that country. For all I know, Starbucks would only do business in the UK if the value it sees from doing business there is at the tax rate it is paying out now. However, like a corportation testing the markets for price, the UK government is doing a disservice to its own people for not doing its own research on the value Starbucks is seeing.", "title": "" }, { "docid": "828c11ab1a9dd388af11264f4d0f4c04", "text": "The US is one of the only countries which taxes its citizens on global income. You're ignoring the high fixed costs of compliance with the US tax code, both for individuals and institutions. Compliance is so big an issue that foreign banks are turning away US customers rather than having to comply with FATCA, leaving people unable to open a bank account. Also, renunciations of citizenship are up something like 400%, and they aren't all billionaires.", "title": "" }, { "docid": "768f033ddc2a03c93a62559f41e7f613", "text": "Braeburn is no more a hedge fund than any other off-shore entities corporations create to manage taxes creatively. All of the major corporate entities in the world do the same thing. Apple isn't even very good at it comparatively.", "title": "" }, { "docid": "f1f4c26b3d5b67fd332c4b12fcf33855", "text": "Part of the purpose of a tax haven is retaining more capital for reinvestment. Then you have more control over how, when and where you pay taxes. Once the capital has been retained in your haven you can strategically deploy it to other favorable locations on the globe. Should you ever want part of it to hit a personal account in the US you'd have a tax liability. But at this level you could just put your ownership of that account up as collateral on a loan and buy your boat that way instead.", "title": "" }, { "docid": "90f2ea577546aa2ca83613733b43b7bd", "text": "I don't know enough about international tax law to dispute what you say, but I would think that if it were illegal we would be seeing more repurcussions for nearly EVERY multinational company using these practices. How can you prove that the licensing deal between bluehat9 llc and bluehat9 lp (cayman) is illegitimate?", "title": "" } ]	fiqa
fef07ca2bcbeb2d862d2c24321b830a3	US taxation of stock purchase plan for non-resident alien	[ { "docid": "8eb1a478c19f1e107212313733892c40", "text": "From my research it looks like its an income NOT effectively connected with the trade of business. This page has the exact details https://www.irs.gov/individuals/international-taxpayers/effectively-connected-income-eci", "title": "" } ]	[ { "docid": "43bdaa58a8294a11126f9f82315e045b", "text": "It really depends. If it is offered as compensation (ie in leiu of, or in addition to salary or cash bonus) then it would be reportable income, and if sold later for a profit then that would be taxable as gains. If this share is purchased as an investment at current value then it would be treated like other securities most likely gains realized at sale. Any discount could be considered income but there are some goofy rules surrounding this enacted to prevent tax evasion and some to spur growth. That is the answer in a nut shell. It is far more complicated in reality as there are somewhere around 2000 pages of regulations deal with different exceptions and scenerios.", "title": "" }, { "docid": "81b9092a7fb8eabc369aa9bf0b4a9989", "text": "No Tax would have been deducted at the time of purchase/sale of shares. You would yourself be required to compute your tax liability and then pay taxes to the govt. In case the shares sold were held for less than 1 year - 15% tax on capital gains would be levied. In case the shares sold were held for more than 1 year - No Tax would be levied and the income earned would be tax free. PS: No Tax is levied at the time of purchase of shares and Tax is only applicable at the time of sale of shares.", "title": "" }, { "docid": "a0d77534de7a82cb11f9ea7f796d372f", "text": "However, you might have to pay taxes on capital gains if these stocks were acquired during your prior residency.", "title": "" }, { "docid": "306bbfcbeb9d36a4dfe629c06c6049d9", "text": "\"A nondividend distribution is typically a return of capital; in other words, you're getting money back that you've contributed previously (and thus would have been taxed upon in previous years when those funds were first remunerated to you). Nondividend distributions are nontaxable, so they do not represent income from capital gains, but do effect your cost basis when determining the capital gain/loss once that capital gain/loss is realized. As an example, publicly-traded real estate investment trusts (REITs) generally distribute a return of capital back to shareholders throughout the year as a nondividend distribution. This is a return of a portion of the shareholder's original capital investment, not a share of the REITs profits, so it is simply getting a portion of your original investment back, and thus, is not income being received (I like to refer to it as \"\"new income\"\" to differentiate). However, the return of capital does change the cost basis of the original investment, so if one were to then sell the shares of the REIT (in this example), the basis of the original investment has to be adjusted by the nondividend distributions received over the course of ownership (in other words, the cost basis will be reduced when the shares are sold). I'm wondering if the OP could give us some additional information about his/her S-Corp. What type of business is it? In the course of its business and trade activity, does it buy and sell securities (stocks, etc.)? Does it sell assets or business property? Does it own interests in other corporations or partnerships (sales of those interests are one form of capital gain). Long-term capital gains are taxed at rates lower than ordinary income, but the IRS has very specific rules as to what constitutes a capital gain (loss). I hate to answer a question with a question, but we need a little more information before we can weigh-in on whether you have actual capital gains or losses in the course of your S-Corporation trade.\"", "title": "" }, { "docid": "6c0110c21e3e15f28b53d04cc6b3dc73", "text": "I assume US as mhoran_psprep edited, although I'm not sure IRS necessarily means US. (It definitely used to also include Britain's Inland Revenue, but they changed.) (US) Stockbrokers do not normally withhold on either dividends/interest/distributions or realized capital gains, especially since gains might be reduced or eliminated by later losses. (They can be required to apply backup withholding to dividends and interest; don't ask how I know :-) You are normally required to pay most of your tax during the year, defined as within 10% or $1000 whichever is more, by withholding and/or estimated payments. Thus if the tax on your income including your recent gain will exceed your withholding by 10% and $1000, you should either adjust your withholding or make an estimated payment or some combination, although even if you have a job the last week of December is too late for you to adjust withholding significantly, or even to make a timely estimated payment if 'earlier in the year' means in an earlier quarter as defined for tax (Jan-Mar, Apr-May, June-Aug, Sept-Dec). See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes and for details its link to Publication 505. But a 'safe harbor' may apply since you say this is your first time to have capital gains. If you did not owe any income tax for last year (and were a citizen or resident), or (except very high earners) if you did owe tax and your withholding plus estimated payments this year is enough to pay last year's tax, you are exempt from the Form 2210 penalty and you have until the filing deadline (normally April 15 but this year April 18 due to weekend and holiday) to pay. The latter is likely if your job and therefore payroll income and withholding this year was the same or nearly the same as last year and there was no other big change other than the new capital gain. Also note that gains on investments held more than one year are classified as long-term and taxed at lower rates, which reduces the tax you will owe (all else equal) and thus the payments you need to make. But your wording 'bought and sold ... earlier this year' suggests your holding was not long-term, and short-term gains are taxed as 'ordinary' income. Added: if the state you live in has a state income tax similar considerations apply but to smaller amounts. TTBOMK all states tax capital gains (and other investment income, other than interest on exempt bonds), and don't necessarily give the lower rates for long-term gains. And all states I have lived in have 'must have withholding or estimated payments' rules generally similar to the Federal ones, though not identical.", "title": "" }, { "docid": "48b2fd3b012dabac3583f3775f1f943d", "text": "If you are a US resident (not necessarily citizen) then yes, you do have to pay capital gains taxes on any capital gains, including interest from assets oversees (like interest from a savings account). Additionally you have to report all your foreign bank accounts according to FATCA (https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca).", "title": "" }, { "docid": "ee913e8ea8db7a5465c14f52c1d98bf1", "text": "The tax cost at election should be zero. The appreciation is all capital gain beyond your basis, which will be the value at election. IRC §83 applies to property received as compensation for services, where the property is still subject to a substantial risk of forfeiture. It will catch unvested equity given to employees. §83(a) stops taxation until the substantial risk of forfeiture abates (i.e. no tax until stock vests) since the item is revocable and not yet truly income. §83(b) allows the taxpayer to make a quick election (up to 30 days after transfer - firm deadline!) to waive the substantial risk of forfeiture (e.g. treat shares as vested today). The normal operation of §83 takes over after election and the taxable income is generally the value of the vested property minus the price paid for it. If you paid fair market value today, then the difference is zero and your income from the shares is zero. The shares are now yours for tax purposes, though not for legal purposes. That means they are most likely a capital asset in your hands, like other stocks you own or trade. The shares will not be treated as compensation income on vesting, and vesting is not a tax matter for elected shares. If you sell them, you get capital gain (with tax dependent on your holding period) over a basis equal to FMV at the election. The appreciation past election-FMV will be capital gain, rather than ordinary income. This is why the §83(b) election is so valuable. It does not matter at this point whether you bought the restricted shares at FMV or at discount (or received them free) - that only affects the taxes upon §83(b) election.", "title": "" }, { "docid": "0bfbb3a0f9d2ac58c9bb99f9390209f7", "text": "\"Long term: Assuming you sold stock ABC through a registered stock exchange, e.g., the Bombay Stock Exchange or the National Stock Exchange of India, and you paid the Securities Transaction Tax (STT), you don't owe any other taxes on the long term capital gain of INR 100. If you buy stock BCD afterwards, this doesn't affect the long term capital gains from the sale of stock ABC. Short term: If you sell the BCD stock (or the ABC stock, or some combination therein) within one year of its purchase, you're required to pay short term capital gains on the net profit, in which case you pay the STT and the exchange fees and an additional flat rate of 15%. The Income Tax Department of India has a publication titled \"\"How to Compute your Capital Gains,\"\" which goes into more detail about a variety of relevant situations.\"", "title": "" }, { "docid": "d6d9b9d9394524e7112df5fd6b09f008", "text": "You should talk to a lawyer. One solution I can think of is using a trust. Keep in mind that that may complicate things (non-revocable trusts are taxed on income not distributed, and revocable trust means you effectively keep the owenership of the stock). If you don't mind paying taxes on the dividends and keep the stocks in a living trust - that would be, IMHO, the simplest solution. That would, however, invoke the gift/estate tax at the value of the stock when the ownership actually passes to the intended receipient (i.e.: you die/gift the stock to the child). It would be very hard to pay the gift tax now and avoid getting the childs SSN and opening an account for the child with it.", "title": "" }, { "docid": "2948cd0e63af02de801485656a7996bc", "text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States. Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"", "title": "" }, { "docid": "4121769fdb123d21c420f416189149b8", "text": "Form 8288 is to report to the IRS withholding of capital gains tax that may be due from the seller. Foreign nationals don't always file tax returns, so they often didn't pay capital gains tax on properties that they sold. Congress decided to make the buyers responsible for this tax so that they would have a better chance of collecting it. There is a penalty against the buyer if that tax is not withheld. Your attorney should have filed this form on your behalf as part of the closing papers. I think your first step is to look at your copy of the closing papers and see if money was withheld from the sale. There definitely should be disclosure of these requirements before the sale. You should also follow up with your attorney to see whether he has already filed the forms 8288 and 8288-A on your behalf. If you had purchased for less than $300,000 (and were purchasing for your primary residence), you would not have to file that form, but since the property was under $1,000,000 the withholding rate is only 10% (rather than 15%).", "title": "" }, { "docid": "fcd63746460412b016148057d123dec0", "text": "It looks like your best option is to go with an online broker. There are many available. Some of them won't let you open an account online as a foreign national but will allow you to open one through the mail. See more about that http://finance.zacks.com/can-nonus-citizen-trade-us-stocks-9654.html Also keep in mind that you will need to pay taxes on any capital gains made through selling http://www.irs.gov/pub/irs-pdf/p519.pdf", "title": "" }, { "docid": "28f92e26dcc503d4c07d8bac7f07e7a4", "text": "\"The examples you provide in the question are completely irrelevant. It doesn't matter where the brokerage is or where is the company you own stocks in. For a fairly standard case of an non-resident alien international student living full time in the US - your capital gains are US sourced. Let me quote the following text a couple of paragraphs down the line you quoted on the same page: Gain or loss from the sale or exchange of personal property generally has its source in the United States if the alien has a tax home in the United States. The key factor in determining if an individual is a U.S. resident for purposes of the sourcing of capital gains is whether the alien's \"\"tax home\"\" has shifted to the United States. If an alien does not have a tax home in the United States, then the alien’s U.S. source capital gains would be treated as foreign-source and thus nontaxable. In general, under the \"\"tax home\"\" rules, a person who is away (or who intends to be away) from his tax home for longer than 1 year has shifted tax homes to his new location upon his arrival in that new location. See Chapter 1 of Publication 463, Travel, Entertainment, Gift, and Car Expenses I'll assume you've read this and just want an explanation on what it means. What it means is that if you move to the US for a significant period of time (expected length of 1 year or more), your tax home is assumed to have shifted to the US and the capital gains are sourced to the US from the start of your move. For example: you are a foreign diplomat, and your 4-year assignment started in May. Year-end - you're not US tax resident (diplomats exempt), but you've stayed in the US for more than 183 days, and since your assignment is longer than 1 year - your tax home is now in the US. You'll pay the 30% flat tax. Another example: You're a foreign airline pilot, coming to the US every other day flying the airline aircraft. You end up staying in the US 184 days, but your tax home hasn't shifted, nor you're a US tax resident - you don't pay the flat tax. Keep in mind, that tax treaties may alter the situation since in many cases they also cover the capital gains situation for non-residents.\"", "title": "" }, { "docid": "175a9f550ec56623c289df7f2fe0dc18", "text": "Here is how it should look: 100 shares of restricted stock (RSU) vest. 25 shares sold to pay for taxes. W2 (and probably paycheck) shows your income going up by 100 shares worth and your taxes withheld going up by 25 shares worth. Now you own 75 shares with after-tax money. If you stop here, there would be no stock sale and no tax issues. You'd have just earned W2 income and withheld taxes through your W2 job. Now, when you sell those 75 shares whether it is the same day or years later, the basis for those 75 shares is adjusted by the amount that went in to your W2. So if they were bought for $20, your adjusted basis would be 75*$20.", "title": "" }, { "docid": "c3d239c130b81bd9fa913591c6178870", "text": "The thing you get wrong is that you think the LLC doesn't pay taxes on gains when it sells assets. It does. In fact, in many countries LLC are considered separate entities for tax properties and you have double taxation - the LLC pays its own taxes, and then when you withdraw the money from the LLC to your own account (i.e.: take dividends) - you pay income tax on the withdrawal again. Corporate entities usually do not have preferential tax treatment for investments. In the US, LLC is a pass-though entity (unless explicitly chosen to be taxed as a corporation, and then the above scenario happens). Pass-through entities (LLCs and partnerships) don't pay taxes, but instead report the gains to the owners, which then pay taxes as if the transaction was their personal one. So if you're in the US - investing under LLC would have no effect whatsoever on your taxes, or adverse effect if you chose to treat it as a corporation. In any case, investing in stocks is not a deductible expense, and as such doesn't reduce profits.", "title": "" } ]	fiqa
c4181dde2ab9e4682ab0c03970b398ef	Am I legally allowed to offset the tax I pay on freelance work? (UK)	[ { "docid": "15a68028202202a61ad5b69ba02c6f16", "text": "Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.", "title": "" } ]	[ { "docid": "9c19f9ceaab748d179323a7f07b6ec39", "text": "It is a great advice. I would suggest going to the Companies House (it's in London somewhere), picking up all of their leaflets regarding requirements for different forms of corporate entity, and deciding if you want to have that burden. It is not a lot of work, you can essentially claim VAT on all business purchases (the way roughly it works, is that your company invoices your client, your client has to pay the fee + VAT (usually that VAT is then deducted by your client from it's VAT, so no loss there), and you pay the VAT on the difference between the service sales price, and your costs (computers etc.) ) You have to be careful to avoid excessive double taxation (paying income tax on both corporate income, and then your personal income off said company), but it usually comes off in your favor. Essentially, if you're making more than 50% of your income from services rendered, it is to your advantage to render such services as a business entity.", "title": "" }, { "docid": "1d3b2a9a6abd42118fa040f7b762a52b", "text": "\"In the US, you'd run the risk of being accused of fraud if this weren't set up properly. It would only be proper if your wife could show that she were involved, acting as your agent, bookkeeper, etc. Even so, to suggest that your time is billed at one rate but you are only paid a tiny fraction of that is still a high risk alert. I believe the expression \"\"if it quacks like a duck...\"\" is pretty universal. If not, I'll edit in a clarification. note -I know OP is in UK, but I imagine tax collection is pretty similar in this regard.\"", "title": "" }, { "docid": "acb3ad5a9f87addc77582c3aa113b246", "text": "Yes if you do it as a hobby, as it's still income. But it should be something you can offset against tax Either way, you shouldn't be doing this as you, you should either register as self employed or create a company. You register this income as self-employed income (or income of the company) and offset the expenses of running the server against tax. In the UK, companies (or self employed people, which are basically companies) pay tax on profit not income (unless VAT applies, in which case they're basically just passing the VAT on for their customers). Since you're not making a profit over the whole year (even if some months are profitable) you will pay no tax.", "title": "" }, { "docid": "b1e31c0a10ca632844786eb12a4497e3", "text": "The company will have to pay 20% tax on its profits. Doesn't matter how these profits are earned. Profits = Income minus all money you spend to get the income. However, you can't just take the profits out of the company. The company can pay you a salary, on which income tax, national insurance, and employer's national insurance have to be paid at the usual rate. The company can pay you a dividend, on which tax has to be paid. And the company can pay money into the director's pension fund, which is tax free. Since the amount of company revenue can be of interest, I'd be curious myself what the revenue of such a company would be. And if the company makes losses, I'm sure HMRC won't allow you to get any tax advantages from such losses.", "title": "" }, { "docid": "0405c80b946e2a2c2c2ceae2b78ccae7", "text": "In a simple case as the sole UK resident director/shareholder of a company, with that company as your only income, you are usually best paying yourself a salary of the maximum tax free amount allowed under your tax code (~£11k for most people at present). On this you will have to pay some employer and employee National Insurance (NI) contributions (totalling around £1000). Your salary/employer NI counts as an expense, so that is taken off the company profits. You then pay corporation tax on the remainder (20%). The first £5k you take as dividends is tax free, the remainder at a lower tax rate than the equivalent combined income tax/NI (starting at 7.5% instead of 20% tax plus employee plus employer NI), giving a significant saving compared to salaried income even after corporation tax. To declare and pay the tax, you would need to complete a self-assessment tax return. Your company will also need to file a return. The Contractor UK website, although aimed at IT contractors, has some very useful information on operating Ltd companies. That said, finances are rarely that simple so I would concur with the recommendation you engage an accountant, which is a tax-deductible expense.", "title": "" }, { "docid": "7beb296a45b2f6718fda648042db802f", "text": "\"Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said. This is all about how it goes \"\"on the books.\"\" [emphasis mine] As an independent consultant myself, when I hear something like \"\"the work will be the same either way\"\", I think: \"\"Here thar be dragons!\"\". Let me explain: If you go the independent contractor route, then you better act like one. The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go \"\"on the books\"\" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too. Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee. You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea. But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.) That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent. IMHO, the tax benefits alone wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below. If you're not sure what status to choose, the IRS can actually help you. But be prepared to wait... and wait... :-/ Additional Resources:\"", "title": "" }, { "docid": "c2fe5a2fd10180b48792906009b272fc", "text": "I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.", "title": "" }, { "docid": "caac26bdd391f8e851b7ad6108cc0407", "text": "Yes, you do. Depending on your country's laws and regulations, since you're not an employee but a self employed, you're likely to be required to file some kind of a tax return with your country's tax authority, and pay the income taxes on the money you earn. You'll have to tell us more about the situation, at least let us know what country you're in, for more information.", "title": "" }, { "docid": "8617be6ccb0f198c77c9c8aeab78dcd2", "text": "If you are still a UK resident, then yes. Also, as I understand it, if the contract is only for a year, then unless it happens to exactly match the payroll year, you will have to remain a UK resident and hence, yes you will have to pay tax. See here for more info (from HMRC FAQ questions)", "title": "" }, { "docid": "c8cb781b721834ee11d37597b7ec7030", "text": "There is no tax code I know that would grant you such a privilege. And it just isn't practicable. In your examples, you always sold your product and were thus able, in retrospect, to give a value to your work. What if you don't sell your product? What if in one case your worked hour is reimbursed with one price, with the next product at another (i.e. difference in margin)? No, it won't work like that. And by the way, I think you might have got some definitions upside down. What you want is a salary that your own company pays out to yourself and you can deduct from other profits. But as long as you can't afford to pay yourself a salary, and you don't have access to investors who are willing to front you the money, the time invested is your personal investment and cannot be deducted anywhere - though it might pay off nicely in the long run. That's the risk entrepreneurs take.", "title": "" }, { "docid": "68ef32bfccf785eb45abd36e22f3fe2c", "text": "\"I think the £35K band applies to the \"\"dividend income\"\" not the \"\"dividend paid to you\"\", and so you would only actually get £31.5K (90% of £35K) in your pocket before the next tax band kicked in. If your company will only supplying large VAT registered entities, then register for VAT yourself and elect the Flat Rate scheme - depending on your area of business, given that you have no expenses, your company will get an extra 7% - 14% on its income for free. Your clients won't care that you charge them VAT because they'll claim it back. Finally, depending on what your company is for, beware of the dreaded IR35\"", "title": "" }, { "docid": "4a9011e433785e61732b017579a786a1", "text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward.", "title": "" }, { "docid": "b3647fabeeeeda60c6fe140cefcf0735", "text": "\"As you clarified in the comments, it is not a contract work but rather an additional temporary assignment with the same employer. You were paid for it in form of a \"\"bonus\"\" - one time irregular payment, instead of regular periodic payments. Irregular wage payments fall under the flat rate withholding rule (the 25% for Federal, some States have similar rules for State withholding). This is not taxes, this is withholding. Withholding is money the employer takes from your salary and forwards to the IRS on the account of your tax liability, but it is not in itself your tax liability. When you do your annual tax return, you'll calculate the actual tax you were supposed to pay, and the difference between what was withheld and your actual tax will be refunded to you (or owed by you, if not enough was withheld). You can control the regular pay withholding using W4 form.\"", "title": "" }, { "docid": "735288ea721f87fe49b5c1098226c735", "text": "The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You are still liable to pay tax in India on the salary. If you are out of India for more than 182 days, you can be considered as Non-Resident from tax point of view. However this clause would not be of any benefit to you as are having a Employee / Employer relationship and being paid in India. Edit: This is only about the India portion of taxes. There maybe a UK protion of it as well, plus legally can you work and your type of Visa in UK may have a bearing on the answer", "title": "" }, { "docid": "305d0bb481877f331240bc5ec2e0572e", "text": "I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise.", "title": "" } ]	fiqa
061c0dc2a613e931658f0fd7d66b3abe	Is Bitcoin a commodity or a currency [duplicate]	[ { "docid": "85e79ba38e7a9b761ad1d0665011ddf6", "text": "It has properties of both. Tax authorities will eventually give their opinion on this. Through its properties of finite quantity, fungibility, and resistance to forgery/duplication, it acts as a commodity. It can be sent directly between any two parties anywhere on Earth, without regard for the quantity transacted or physical distance, to act as a currency. By the way, establishing trust in a trust-free environment through cryptographic proof-of-work is a remarkable invention. Sending economic value, cheaply and securely, around the world in minutes, not days/weeks, is a remarkable invention. This is where the value comes from.", "title": "" }, { "docid": "79add24a8545fda941b3158fea0c6d65", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"", "title": "" }, { "docid": "5e6d821a8993439b77890a01220e2930", "text": "I would classify Bitcoin as a hybrid. Currency : It is accepted by e-businesses as a form of payment Commodity : Chart illustrating the volatility and speculative nature of Bitcoin", "title": "" } ]	[ { "docid": "4f64ef46bb0260c8b78aaf58038bcb06", "text": "Mining is income at the value at time of earning, I would use an index like XBX to determine price. Asset appreciation is capital gains. These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now.", "title": "" }, { "docid": "1b6e0840c6ca3acfeab6d19c999c5c21", "text": "\"A perfectly-implemented fiat currency, printed and ordained by a perfectly omniscient, perfectly competent, and perfectly benevolent central bank (let's call it God money\"\"), is the ideal. \"\" Guess I had to come out of the woodwork here. Sounds like you just described bitcoin. :) Plus it is nice because it is much cheaper and easier to digitally transfer than heavy metal. Since bitcoin has a very finite supply, and probably upsets Keynesian economics, I could see an alt-coin that would have an automatic calculation built in to create more money based on inflation.\"", "title": "" }, { "docid": "41d1adf0e83406848f9a4b39a7f698c4", "text": ">$1,000 worth of electricity to generate The cost of Bitcoin always tracks the price of Bitcoin. There is a fixed amount of Bitcoin available to be mined every day. The cost to mine bitcoin rises because of competition (they increase the difficulty of the problems to maintain a fixed supply of Bitcoin). The electricity cost to mine Bitcoin is directly related to the amount of miners, which is directly related to the current cost of Bitcoin. More people want to mine when the price is high. If you really think about it, what you are really saying is that the intrinsic value of bitcoin is the value of Bitcoin. Its a completely circular mirage.", "title": "" }, { "docid": "95849db2b91d8a1f2973c952c3b7651a", "text": "Part of the value of bitcoin is indeed in speculation about its future. Will it be a store of value, like gold is? Will it be the medium of exchange for online and offline transactions? Will it be a representation and insurance for services (to be) rendered? It currently most resembles the first, but don't forget that bitcoin is still in its infancy. There's a lot of room for it to grow, and the technology behind it can grow.", "title": "" }, { "docid": "bb9d15f23da11e1c1e89effd602bfcec", "text": "Can someone please explain how this is not the definition of a Ponzi scheme? Bitcoin has a $100B market cap. This is a financial instrument with very little real value to either consumers or businesses. However, Bitcoin has experienced a meteoric rise in value as more and more people buy in. Is the bottom not going to fall out here?", "title": "" }, { "docid": "9320140934a24403d41e217d806ab81a", "text": "I know I'm late to the party, but a couple of rebuttals as a recent bitcoin advocate. I may be out of place in this subreddit as I come from a primarily technological background, not a financial one. > Bittcoin is not a currency, it's a store of value, because it is not widely accepted as tender by most people. Bitcoin is not a currency yet, but because it does not have widespread adoption yet. Like other revolutionary technologies, there is an [inflection point](https://medium.com/@mcasey0827/speculative-bitcoin-adoption-price-theory-2eed48ecf7da) where adoption goes from hardly anyone to almost everyone very quickly. [Example chart](https://cdn-images-1.medium.com/max/1600/0E4eb7wxHinGNdYQq.) >Even as a store of value, it's not very good. It's volatile and the fact that there is a limited supply of bitcoin is not a good thing. Sure, in the short run it results in speculation that drives up the price of a coin and makes it all the rage among gamblers but I don't think anyone can explain how, if used on a larger scale, wouldn't lead to deflation in the price of goods. To me, this is basic supply and demand, and it would in theory become less volatile and more stable following mass adoption. Bitcoin has virtually no inflation, and I agree that this could lead to the deflation of goods, but only insofar as that valuation is determined in bitcoin. For example, milk is still $2, but as the value of bitcoin fluctuates, I may pay .001 BTC or .0005 BTC for that milk. It's important to remember we're dealing with a digital asset in an increasingly more digitized world, a point-of-sale device like we use for credit cards could certainly tackle that conversion in the future. >Also, at the end of the day, fiat currencies are based on trust and accountability of the government. How does Bitcoin or any other online currency solve that problem? There's no accountability, and it effectively acts as as an anti-currency, fueled by mistrust in the establishment. This is the best part of bitcoin, understanding the incentives. If you follow that supply and demand logic, then it is in the best interest of everyone who uses bitcoin* that the bitcoin software and the system itself be reliable and secure. The software is open source so anyone can see how it works and where its flaws and weaknesses are - and it is still standing strong after 8 years. The biggest weakness so far has been in software updates and changes to the core protocol. Without any central structure (i.e. accountability) it can be slow to reach a democratic consensus is such a way that doesn't split the blockchain or fracture the network. This has led to some of the recent extreme volatility. Bitcoin (and some other cryptocurrencies) have tremendous potential to disrupt existing financial institutions. The private blockchains peddled by banks are at this point [just databases](https://www.youtube.com/watch?v=SMEOKDVXlUo&index=2&list=LL7mI3EyFeE83Ac-VtxNUhxA). At some point, these institutions will realize that they can't create their own Facebook, they need to find ways to become part of the new Facebook market.", "title": "" }, { "docid": "f39d6047af5c4f9ebfafb0c99c198907", "text": "\"Bittcoin is not a currency, it's a store of value, because it is not widely accepted as tender by most people. Even as a store of value, it's not very good. It's volatile and the fact that there is a limited supply of bitcoin is not a good thing. Sure, in the short run it results in speculation that drives up the price of a coin and makes it all the rage among gamblers but I don't think anyone can explain how, if used on a larger scale, wouldn't lead to deflation in the price of goods. Also, at the end of the day, fiat currencies are based on trust and accountability of the government. How does Bitcoin or any other online currency solve that problem? There's no accountability, and it effectively acts as as an anti-currency, fueled by mistrust in the establishment. What do you mean, \"\"cryptocurrencies are growing hundreds of times faster than the market as a whole\"\"?\"", "title": "" }, { "docid": "a9a36dad5328565bc5ddca2e2b3bcdb6", "text": "\"The relative value of Gold (or any other commodity) as measured against any given currency (such as the USD), is not a constant function either. If you have inflationary pressure, the \"\"value\"\" of an ounce of gold (or barrel of oil, etc) may \"\"double\"\", but it's really because the underlying comparator has lost \"\"half\"\" its value.\"", "title": "" }, { "docid": "b5e06ae5797a21d78982d8329f0a8175", "text": "\"A good reference to what encompasses \"\"securities\"\" are detailed in the Securities Act of 1933, which was enacted by the United States federal government. One main exception, which I would still consider securities for your purposes, would be \"\"commercial paper\"\". These are exempt from the securities act because they mature in 270 days of less, but they function much like bonds or promissory notes Therefore though, it would not encompass currencies and commodities. It really comes down to the structure of the agreement for transferring or holding the particular kind of underlying asset.\"", "title": "" }, { "docid": "ab8e2c4f62e90b429e52348b090e65d3", "text": "\"First of all, metals are commodities. So if you're phrasing that as metals and/or commodities, then that's poorly worded. If you're phrasing that as \"\"metal commodity reports\"\" then say as such. Second, and more importantly: what commodities? Power is very different than coffee. Different places specialize in different things, all banks are good in some and weak in others. There's no generic \"\"commodity\"\" market but rather a huge range of specifically different products traded in the future.You learn more than a small fraction of this universe so pick one or two specific products from the macro buckets (i.e. energy, grains, metals) and focus on those.\"", "title": "" }, { "docid": "0020f28be04149c2e9ad46da4ab8aaa7", "text": "This isn't an article discussing the business aspects of bitcoin. It's a comment on the price movement of bitcoin. Do we regularly comment about the gyrations of commodities and currencies on this thread? I tend to find talk of those things on subs like /r/finance and /r/investing.", "title": "" }, { "docid": "379efa836cc7a4c7502ea05e87ecfafc", "text": "Currencies don't have intrinsic value. Just because you have to pay taxes in USD does not mean it has intrinsic value. The government could theoretically switch currency every second, not that that will ever happen. But yes the USD is supported by the US government and that's like a safety net for the value of the USD. Bitcoin doesn't have a government accepting bitcoin in taxes (except maybe liberland or something) so BTC doesn't have that safenet. But with such a liquid market and millions of buyorders bitcoin doesn't really need a safenet. There will always be demand. I prefer a scarce currency with growing demand than an inflationary currency backed by a corrupt government that loses value over time.", "title": "" }, { "docid": "d2cac70eed45ceaa9d24925004cef85f", "text": "\"This is the best tl;dr I could make, [original](http://www.cnbc.com/2017/07/07/strategist-tom-lee-weighs-sees-bitcoin-going-as-high-as-55000.html) reduced by 80%. (I'm a bot) *** > The strategist&#039;s case for bitcoin is a basic supply-and-demand story, similar to the argument other proponents of bitcoin use when playing up its future as &quot;Digital gold.\"\" > While the lack of regulation is what has attracted many buyers, many consider bitcoin the &quot;Wild West.&quot; Three years ago, Mt. Gox, the largest bitcoin exchange then, filed for bankruptcy and said it lost 750,000 of its users bitcoins and 100,000 of the exchange&#039;s own. > Lee acknowledged bitcoin&#039;s volatility in his report, noting that annualized bitcoin volatility is 75 percent, &quot;Substantially higher than gold&#039;s 10%. But as noted, gold&#039;s volatility approached 90% from 1971 to 1980 as the U.S. abandoned the gold standard - hence, we expect this to improve over time.\"\" * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6lved5/first_major_wall_street_strategist_weighs_in_on/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~161687 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: bitcoin^#1 Lee^#2 currency^#3 digital^#4 gold^#5\"", "title": "" }, { "docid": "51a6ca6a32a72b6063be3ac0e7c42d47", "text": "\"Alright, so this is all out of the way. As a further note, I have a degree in computer science so I'm not oblivious to the technical aspects of bitcoin. I reject the idea that banning bitcoin is akin to banning the internet - in fact, I reject the notion that bitcoin is anywhere as revolutionary as \"\"the internet\"\" was (which itself, as a construct, is far older than most people let on). I've always acknowledged that there are many innovative technical aspects to bitcoin which are likely to find their way into our current system of money and transactions. The reality, however, goes back to my original contentions - that bitcoin is difficult (if not nearly impossible) to track, and thus serves as a black-market vehicle for those who wish to transact outside the power of the government. Whether or not you see this as \"\"good\"\" or \"\"bad\"\" doesn't matter; \"\"the government\"\" within any defined national border is the plenary power - period - and thus (for lack of a better phrase) \"\"resistance is mostly futile.\"\"\"", "title": "" }, { "docid": "98327dbb386c1a738abe97f050ef7ca7", "text": "There are forums online (Wall Street Oasis, Poets and Quants) that cover what you need to know for a Wall Street interview. That's the most efficient way. But it's also important to research the company that you're interviewing for. Do they invest in equity or debt? Are they in a specialized industry (e.g., real estate, oil & gas)? A model for a equity research firm is going to have different priorities from a LBO model for a private equity firm or a cash flow model for a bank/lending company.", "title": "" } ]	fiqa
4172f2bea545dd229dcc9a69866d0abf	S-Corp and distributions	[ { "docid": "49b16b6e3edc3ebf47f9e78c863c098a", "text": "Does the corporation need the money for its ongoing business? If so, don't transfer it. If not, feel free. This decision has nothing to do with whether the corporation made money in any particular year.", "title": "" } ]	[ { "docid": "2948cd0e63af02de801485656a7996bc", "text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States. Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"", "title": "" }, { "docid": "b8fded8029447d6371ae0dc5bccd7432", "text": "Withdrawals from a traditional 401(k) plan are always treated as cash income and the taxable portion is taxed at ordinary income tax rates, even if the money was held in stocks within the 401(k) plan and the amount withdrawn is equal to whatever capital gains you made by selling the stock within the 401(k) plan. If your plan permits you to take the distribution as stock shares (transferred to your taxable brokerage account), then, for tax purposes, it is treated as if you took a distribution of cash equal to the market price of the shares as of the day of the distribution and promptly bought the same number of shares in your brokerage account. And yes, if the 401(k) plan assets in your ex-employer's plan consists solely of pretax contributions and the earnings thereon, then the entire distribution is ordinary taxable income regardless of whether you sold the stock within the 401(k) plan or took a distribution of stock from the plan and promptly (or after a few days) sold it. The capital gains or losses (if any) from such a sale are, of course, outside the 401(k) plan and taxable accordingly. Finally, the 10% penalty for premature withdrawal from a traditional 401(k) will also apply if you are not 59.5 years of age or older (or maybe 55 since you are separated from service), and it will be computed on the entire distribution.", "title": "" }, { "docid": "f4303dc4fdce909f8af8b9e3d983cc1f", "text": "Because the distribution date was APR 21, 2011, THAT should be the correct date for ascertainng the stock prices of the GM stock and warrants. The subsequent distributions after April should also be allocated in accordance with their distribution dates, with tax basis being reduced from the original APR 21st date's allocations, and reallocated to those subsequent distributions, taking into account any interim sales you might have made.", "title": "" }, { "docid": "57390fc75c7c0b3a47269f7ea8e90c07", "text": "\"If you have an S-Corp with several shareholders - you probably also have a tax adviser who suggested using S-Corp to begin with. You're probably best off asking that adviser about this issue. If you decided to use S-Corp for multiple shareholders without a professional guiding you, you should probably start looking for such a professional, or you may get yourself into trouble. That said, and reminding you that: 1. Free advice on the Internet is worth exactly what you paid for it, and 2. I'm not a tax professional or tax adviser, you should talk to a EA/CPA licensed in your state, here's this: Generally S-Corps are disregarded entities for tax purposes and their income flows to their shareholders individual tax returns through K-1 forms distributed by the S-Corp yearly. The shareholders don't have to actually withdraw the profits, but if not withdrawing - they're added to their cost bases in the shares. I'm guessing your corp doesn't distribute the net income, but keeps it on the corporate account, only distributing enough to cover the shareholders' taxes on their respective income portion. In this case - the amount not distributed is added to their basis, the amount distributed has already been taxed through K-1. If the corporation distributes more than the shareholder's portion of net income, then there can be several different choices, depending on the circumstances: The extra distribution will be treated as salary to the shareholder and a deduction to the corporation (i.e.: increasing the net income for the rest of the shareholders). The extra distribution will be treated as return of investment, reducing that shareholder's basis in the shares, but not affecting the other shareholders. If the basis is 0 then it is treated as income to the shareholder and taxed at ordinary rates. The extra distribution will be treated as \"\"buy-back\"\" - reducing that shareholder's ownership stake in the company and reallocating the \"\"bought-back\"\" portion among the rest of the shareholders. In this case it is treated as a sale of stock, and the gain is calculated as with any other stock sale, including short-term vs. long-term taxation (there's also Sec. 1244 that can come in handy here). The extra distribution will be treated as dividend. This is very rare for S-Corp, but can happen if it was a C-Corp before. In that case it will be taxed as dividends. Note that options #2, #3 and #4 subject the shareholder to the NIIT, while option #1 subjects the shareholder to FICA/Self Employment tax (and subjects the company to payroll taxes). There might be other options. Your licensed tax adviser will go with you through all the facts and circumstances and will suggest the best way to proceed.\"", "title": "" }, { "docid": "71d5097054e25bcf177dfa43b19c737c", "text": "Ok, so here's the strategy I decided to go with in the meantime: Allocate E1 to A_corp and E3 to A_ira. Here are my considerations which I assume at this stage to be right:", "title": "" }, { "docid": "2af033af3f8b981e4e7147ebc864cc28", "text": "\"You probably don't need S-Corp. There's no difference between what you can deduct on your Schedule C and what you can deduct on 1120S, it will just cost you more money. Since you're gambling yourself, you don't need to worry about liability - but if you do, you should probably go LLC route, much cheaper and simpler. The \"\"reasonable salary\"\" trick to avoid FICA won't work. Don't even try. Schedule C for professional gamblers is a very accepted thing, nothing extraordinary about it.\"", "title": "" }, { "docid": "789c6ee5519a98310ca80232d15d7573", "text": "\"S-Corp is a corporation. I.e.: you add a \"\"Inc.\"\" or \"\"Corp.\"\" to the name or something of that kind. \"\"S\"\" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn't refer to a legal status.\"", "title": "" }, { "docid": "da9ecf6147e0082b20047381cdb41141", "text": "\"There are no dividends from S-Corp. There are distributions. Big difference. S-Corps fill form 1120S and schedule K-1 per shareholder. In the schedule all the income of your S-Corp will be assigned to various categories that you will later copy to your personal tax return as your personal income. It is not dividend income. The reason people prefer to take distributions from their S-Corps instead of salary is because you don't pay SE taxes on the distributions. That is also the reason why the IRS forces you to pay yourself a reasonable salary. But the tax rate on the income, all of it, is your regular income tax rate, unless the S-Corp income is categorized in a preferred category. The fact that its an S-Corp income doesn't, by itself, allow any preferential treatment. If you're learning the stuff as you go - you should probably get in touch with a tax professional to advise you. All the S-Corp income must be distributed. Its not a matter of \"\"avoiding paying the tax\"\", its the matter of \"\"you must do it\"\". Not a choice. My answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer (circ 230 disclaimer).\"", "title": "" }, { "docid": "88ec8414da1e0a42a4da03f9edf304eb", "text": "\"For MCD, the 47¢ is a regular dividend on preferred stock (see SEC filing here). Common stock holders are not eligible for this amount, so you need to exclude this amount. For KMB, there was a spin-off of Halyard Health. From their IR page on the spin-off: Kimberly-Clark will distribute one share of Halyard common stock for every eight shares of Kimberly-Clark common stock you own as of the close of business on the record date. The deal closed on 2014-11-03. At the time HYH was worth $37.97 per share, so with a 1:8 ratio this is worth about $4.75. Assuming you were able to sell your HYH shares at this price, the \"\"dividend\"\" in the data is something you want to keep. With all the different types of corporate actions, this data is extremely hard to keep clean. It looks like the Quandl source is lacking here, so you may need to consider looking at other vendors.\"", "title": "" }, { "docid": "e23eda4b8b64a62749c8eb12447ab724", "text": "\"Generally if you're a sole S-Corp employee - it is hard to explain how the S-Corp earned more money than your work is worth. So it is reasonable that all the S-Corp profits would be pouring into your salary. Especially when the amounts are below the FICA SS limits when separating salary and distributions are a clear sign of FICA tax evasion. So while it is hard to say if you're going to be subject to audit, my bet is that if you are - the IRS will claim that you underpaid yourself. One of the more recent cases dealing with this issue is Watson v Commissioner. In this case, Watson (through his S-Corp which he solely owned) received distributions from a company in the amounts of ~400K. He drew 24K as salary, and the rest as distributions. The IRS forced re-characterizing distributions into salary up to 93K (the then-SS portion of the FICA limit), and the courts affirmed. Worth noting, that Watson didn't do all the work himself, and that was the reason that some of the income was allowed to be considered distribution. That wouldn't hold in a case where the sole shareholder was the only revenue producer, and that is exactly my point. I feel that it is important to add another paragraph about Nolo, newspaper articles, and charlatans on the Internet. YOU CANNOT RELY ON THEM. You cannot defend your position against IRS by saying \"\"But the article on Nolo said I can not pay SE taxes on my earnings!\"\", you cannot say \"\"Some guy called littleadv lost an argument with some other guy called Ben Miller because Ben Miller was saying what everyone wants to hear\"\", and you can definitely not say \"\"But I don't want to pay taxes!\"\". There's law, there are legal precedents. When some guy on the Internet tells you exactly what you want to hear - beware. Many times when it is too good to be true - it is in fact not true. Many these articles are written by people who are interested in clients/business. By the time you get to them - you're already in deep trouble and will pay them to fix it. They don't care that their own \"\"advice\"\" got you into that trouble, because it is always written in generic enough terms that they can say \"\"Oh, but it doesn't apply to your specific situation\"\". That's the main problem with these free advice - they are worth exactly what you paid for them. When you actually pay your CPA/Attorney - they'll have to take responsibility over their advice. Then suddenly they become cautious. Suddenly they start mentioning precedents and rulings telling you to not do things. Or not, and try and play the audit roulette, but these types are long gone when you get caught.\"", "title": "" }, { "docid": "5ee5f967f040a013fe5a5188ca5f7d40", "text": "Capital gain distribution is not capital gain on sale of stock. If you have stock sales (Schedule D) you should be filing 1040, not 1040A. Capital gain distributions are distributions from mutual funds/ETFs that are attributed to capital gains of the funds (you may not have actually received the distribution, but you still may have gain attributed to you). It is reported on 1099-DIV, and if it is 0 - then you don't have any. If you sold a stock, your broker should have given you 1099-B (which is not the same as 1099-DIV, but may be consolidated by your broker into one large PDF and not provided separately). On 1099-B the sales proceeds are recorded, and if you purchased the stock after 2011 - the cost basis is also recorded. The difference between the proceeds and the cost basis is your gain (or loss, if it is negative). Fees are added to cost basis.", "title": "" }, { "docid": "4bf9c168d813c28cba490998fef20d5e", "text": "\"Be careful of the other answers here. Many are wrong or partially wrong. The question implies that you knew this, but for everyone else's benefit, you can keep you LLC organization and still elect to be treated as a S-Corp by the IRS just for tax purposes. You do this by filing Form 2553 with the IRS. (You can also, by the way, elect to be taxed as a \"\"regular\"\" C-Corp if you want, although that's probably not advantageous. See Form 8832.) The advantage of electing to be treated as an S-Corp is that income beyond what constitutes a \"\"reasonable salary\"\" are not subject to social security and medicare taxes as they would when paid was wages or counted as self-employment income on Schedule C. Depending on what you need to pay yourself to meet the \"\"reasonable salary\"\" test, your overall income, and other factors about your business, this could result in tax savings. Contrary to other answers here, making this election will not force you to create a board of directors. You are still an LLC for all purposes except taxes, so whatever requirements you had in organization and governance at the state level will not change. You will have to file a \"\"corporate\"\" tax return on Form 1120S (and likely some corresponding state tax form), so that is additional paperwork, but this \"\"corporate\"\" return does not mean the S-Corp pays taxes itself. With a couple of exceptions, the S-Corp pays no taxes directly (and therefore does not pay at the corporate tax rate). Instead the S-Corp apportions its income, expenses, and deductions to the owner(s) on Schedule K. The owners get their portion reported from the S-Corp on Schedule K1 and then include that on their personal Form 1040 to pay tax at their personal rate. In addition to filing Form 1120S, you will have to handle payroll taxes, which will create some additional administrative work and/or cost. Using a payroll service for this will likely be your best option and not terribly expensive. You've also got the issue of determining your reasonable salary within the rules, which is the subject of other questions on this site and other IRS guidance.\"", "title": "" }, { "docid": "4b673df4129fb2dab004b655c4a601aa", "text": "No. As a rule, the dividends you see in the distribution table are what you'll receive before paying any taxes. Tax rates differ between qualified and unqualified/ordinary dividends, so the distribution can't include taxes because tax rates may differ between investors. In my case I hold it in an Israeli account but the tax treaty between our countries still specifies 25% withheld tax This is another example of why tax rates differ between investors. If I hold SPY too, my tax rate will be very different because I don't hold it in an account like yours, so the listed dividend couldn't include taxes.", "title": "" }, { "docid": "fe9092bd89d9397b81899948937ce3bc", "text": "Shareholder's Equity consists of two main things: The initial capitalization of the company (when the shares were first sold, plus extra share issues) and retained earnings, which is the amount of money the company has made over and above capitalization, which has not been re-distributed back to shareholders. So yes, it is the firm's total equity financing-- the initial capitalization is the equity that was put into the company when it was founded plus subsequent increases in equity due to share issues, and retained earnings is the increase in equity that has occurred since then which has not yet been re-distributed to shareholders (though it belongs to them, as the residual claimants). Both accounts are credited when they increase, because they represent an increase in cash, that is debited, so in order to make credits = debits they must be credits. (It doesn't mean that the company has that much cash on hand, as the cash will likely be re-invested). Shareholder's Equity is neither an asset nor a liability: it is used to purchase assets and to reduce liabilities, and is simply a measure of assets minus liabilities that is necessary to make the accounting equation balance: Since the book value of stocks doesn't change that often (because it represents the price the company sold it for, not the current value on the stock market, and would therefore only change when there were new share issues), almost all changes in total assets or in total liabilities are reflected in Retained Earnings.", "title": "" }, { "docid": "8d1b6d0e815236cc2d30689a315ddbe6", "text": "You report what you contributed (sum of monthly investments that you made) to the bond fund. Distributions are the earnings in the account that stay in the account and have no tax consequences (in particular, you don't report them as income on your tax returns) until you withdraw the money later.", "title": "" } ]	fiqa
845ab8934380957a988f8a0aae7842aa	When filing a US 1065 as a General Partnership, do we combine our expenditures for a home office?	[ { "docid": "ce475229839fec15efb664cd7ad7ac50", "text": "Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense.", "title": "" } ]	[ { "docid": "122f3058c852e263c160735fb876b210", "text": "No. The equipment costs are not necessarily a direct expense. Depending on the time of purchase and type of the expenditure you may need to capitalize it and depreciate it over time. For example, if you buy a computer - you'll have to depreciate it over 5 years. Some expenditures can be expensed under Section 179 rules, but there are certain conditions to be made, including business revenue. So if your business revenue is $3K - your Sec. 179 deduction is limited to $3K even if more purchases can qualify. Not every purchase qualifies for Sec. 179 treatment, and not all the State tax rules conform to the Federal treatment. Get a professional advice from a CPA/EA licensed in your State.", "title": "" }, { "docid": "9fd632a34c4689f4fcdbfb85bb386537", "text": "You have to file and issue each one of them a 1099 if you are paying them $600 or more for the year. Because you need to issue a 1099 to them (so they can file their own taxes), I don't think there's a way that you could just combine all of them. Additionally, you may want to make sure that you are properly classifying these people as contractors in case they should be employees.", "title": "" }, { "docid": "2226740c96f085d39471c7c914edee3f", "text": "If you are paid by foreigners then it is quite possible they don't file anything with the IRS. All of this income you are required to report as business income on schedule C. There are opportunities on schedule C to deduct expenses like your health insurance, travel, telephone calls, capital expenses like a new computer, etc... You will be charged both the employees and employers share of social security/medicare, around ~17% or so, and that will be added onto your 1040. You may still need a local business license to do the work locally, and may require a home business permit in some cities. In some places, cities subscribe to data services based on your IRS tax return.... and will find out a year or two later that someone is running an unlicensed business. This could result in a fine, or perhaps just a nice letter from the city attorneys office that it would be a good time to get the right licenses. Generally, tax treaties exist to avoid or limit double taxation. For instance, if you travel to Norway to give a report and are paid during this time, the treaty would explain whether that is taxable in Norway. You can usually get a credit for taxes paid to foreign countries against your US taxes, which helps avoid paying double taxes in the USA. If you were to go live in Norway for more than a year, the first $80,000/year or so is completely wiped off your US income. This does NOT apply if you live in the USA and are paid from Norway. If you have a bank account overseas with more than $10,000 of value in it at any time during the year, you owe the US Government a FinCEN Form 114 (FBAR). This is pretty important, there are some large fines for not doing it. It could occur if you needed an account to get paid in Norway and then send the money here... If the Norwegian company wires the money to you from their account or sends a check in US$, and you don't have a foreign bank account, then this would not apply.", "title": "" }, { "docid": "28485e0d5f2e225bab5d6de3d6a31d45", "text": "Definitely get a lawyer to write up all the details of the partnership in a formal agreement. If your ex does not want to do this, that is a bad sign. You both need to be clear about expectations and responsibilities in this partnership, and define an exit strategy in the case one of you wants out. This is the most fair to both parties. Generally, what is common is that property is split cleanly when the relationship ends. I would strongly recommend you both work towards a clean split with no joint property ownership. How this looks depends on your unique situation. To address your questions 2 and 3: You have two roles here - tenant and owner. As a 50% owner, you are running a business with a partner. That business will have assets (home), income, expenses, and profit. You basically need to run this partnership as a simple business. All the rent income (your rent and the other tenant's) should go into a separate account. The mortgage and all other housing expenses are then paid from only this account. Any excess is then profit that may be split 50/50. All expenses should be agreed upon by both of you, either by contract or by direct communication. You should see a financial professional to make sure accounting and taxes are set up properly. Under this system, your ex could do work on the house and be paid from the business income. However, they are responsible to you to provide an estimate and scope of work, just like any other contractor. If you as a joint owner agree to his price, he then could be paid out of the business income. This reduces the business cash flow for the year accordingly. You can probably see how this can get very complicated very fast. There is really no right or wrong answer on what both of you decide is fair and best. For the sake of simplicity and the least chance of a disaster, the usual and recommended action is to cleanly split all property. Good Luck!", "title": "" }, { "docid": "839decb72a043b2574f664f4caef55df", "text": "How is the business organized? If as a General Partnership or LLC that reports as a partnership, you will be getting distributed to you each year your % ownership of the earnings or loss. But note, this is a paperwork transfer on the form K-1, which must then carryover to your tax return, it does not require the transfer of cash to you. If organized as an S-Corp, you should be holding shares of the company that you may sell back to the S-Corp, generally as outlined in the original articles of incorporation. The annual 'dividend' (earnings remaining after all expenses are paid) should be distributed to you in proportion to the shares you hold. If a C-Corp and there is only one class of stock that you also hold a percentage of, the only 'profits' that must be distributed proportionally to you are declared dividends by the board of directors. Most family run business are loosely formed with not much attention paid to the details of partnership agreements or articles of incorporation, and so don't handle family ownership disputes very well. From my experience, trying to find an amicable settlement is the best...and least expensive....approach to separation from the business. But if this can't be done or there is a sizable value to the business, you may have to get your own legal counsel.", "title": "" }, { "docid": "6c6506ac79cb6824fd2b472b524cba0f", "text": "Since you both are members of the LLC - it is not a single-member LLC, thus you have to file the tax return on behalf of the LLC (I'm guessing you didn't elect corporate treatment, so you would be filing 1065, which is the default). You need to file form 4868 on behalf of yourselves as individuals, and form 7004 on behalf of the LLC as the partnership. Since the LLC is disregarded (unless you explicitly chose it not to be, which seems not to be the case) the taxes will in fact flow to your individual return(s), but the LLC will have to file the informational return on form 1065 and distribute K-1 forms to each of you. So you wouldn't pay additional estimated taxes with the extension, as you don't pay any taxes with the form 1065 itself. If you need a help understanding all that and filling the forms - do talk to a professional (EA or CPA licensed in your state). Also, reconsider not sending any payment. I suggest sending $1 with the extension form even if you expect a refund.", "title": "" }, { "docid": "d8901ebcbe588b9b70a36bb5f84f71a5", "text": "\"You're a partnership. You should ask the money to be paid to the partnership. You'll have to fill partnership income tax return (form 1065) and each of you will get a K-1 schedule with your own personal portion of the income. For example, you're Adam, Ben and Clara. You work together on a project and are being paid. You get a check for $300 issued to \"\"Adam, Ben and Clara, DBA ABC Partnership\"\". You don't have to have a DBA, it just makes it easier to show you as a single entity. You then deposit the check to an account you set up for your partnership, and from that account you transfer $100 to each of you. Year end, you file form 1065, showing $300 income, and attach K-1 for each of the partners showing $100 income. That $100 income will flow to your individual tax returns. The overhead here is setting up a partnership account, potentially making a DBA, and filing the extra tax return. That's the proper way to do it, especially if it is something you're going to do regularly. For a one-time thing, one of you can get paid, report it as income on his/her Schedule C, and issue 1099 to the rest of you for your parts, and deduct the amount as his/her expense. Here, the overhead is Schedule C for each of you (instead of Schedule E if handling it as a partnership), extra 1099 forms (instead of 1065 and K-1s), and a risk of one partner defrauding the others (depends on how much you trust each other). With proper documentation, each of these is equally legal, and tax-wise the costs are the same (i.e.: either way you pay the same taxes). With partnership the overhead is a bit more expensive (DBA+1065 extra cost), but in the long term it will make your life easier if you do this kind of thing regularly. You may want to consider setting up your partnership as a LLC/LLP (depending on what your State allows), but that would require State paperwork and potentially more fees.\"", "title": "" }, { "docid": "7b9e65e73e1d2ee9ac596a33ff6295d8", "text": "Since from the question it seems that you're talking about the US taxation, I'll assume that. You can definitely continue filing jointly. Being members of a partnership has no bearing on how you file your own tax return. The partnership will distribute K-1 to each of you separately, but you'll report both of them on the same return.", "title": "" }, { "docid": "a0032f41609f12a0c1aab22a62a5e196", "text": "\"Why not start a third account, the \"\"house\"\" account? However you decide to fund it, equally or in proportion to income, you both chip in, and the payments for all joint expenses come from there. Rent, utilities, food, phone, cable.\"", "title": "" }, { "docid": "067252b5ff9ca4e62bf6ff506f4bd7cb", "text": "The general rule is: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: Exclusively seems to be the toughest standard and I do not know exactly how strict the IRS's interpretation is. Working in your living room where you regularly watch TV and have people over on the weekends would seem to fail that test. A separate room with your computer in it would pass it. If it was your only computer and you regularly played online games with it, that would seem to be a grey area. The IRA booklet covering this area is here http://www.irs.gov/pub/irs-pdf/p587.pdf I know people that have rented rooms in other places or made use of rental offices for this purpose.", "title": "" }, { "docid": "32637ccc9962c2adcab62d05df912a25", "text": "The short answer is you are not required to. The longer answer depends on whether you are referring to your organization as a sole proprietorship in your state, or for federal taxation. For federal tax purposes, I would suggest filing each side job as a separate Sch C though. The IRS uses the information you provide about your sole proprietorship to determine whether or not your categorization of expenses makes sense for the type of business you are. This information is used by the IRS to help them determine who to audit. So, if you are a service based business, but you are reporting cost of goods sold, you are likely to be audited.", "title": "" }, { "docid": "f9a15d4ecc758b477a3b68fb24dd21a4", "text": "\"You can hire a good CPA for a really low price. They can advise you on how to do exactly what you said and many other aspects of your business. Mine does this as a courtesy with the filing of my taxes. And the filing of my taxes is not all that much. It is great value for the money. Recently I had to make a decision that is a potential audit situation and can go badly if not properly documented. It was not hard to document (with the CPA's help), but now that it is so I don't lose mental energy on if I am going to get \"\"caught\"\" by the IRS. Let them come, I have the necessary documentation. Beyond the IRS, I really like the documentation that you are trying to put behind this loan. Having this in writing helps smooth this potentially bad situation between you and the BIL. I would go above and beyond writing conditions and contingencies down in order to keep this relationship happy. With these kinds of things, cover the applicable 5 \"\"Ds\"\" of partnership agreements: However, I would add another: Boom. What happens if your business takes off? Perhaps there should be a clause to retire the loan prior to you expanding beyond a certain level. Please understand I am not suggesting that any of these bad things are going to happen to you (except the Boom, I really hope that happens to you), but it is a way to communicate contingent actions if one of the risks of small business materializes. Having agreements ahead of time helps avoid crisis.\"", "title": "" }, { "docid": "7455319de0de59050f5b59e53c48bbe1", "text": "\"I am not a lawyer nor a tax accountant, so if such chimes in here I'll gladly defer. But my understanding is: If you're romantically involved and living together you're considered a \"\"household\"\" and thus your finances are deemed shared for tax purposes. Any money your partner gives you toward paying the bills is not considered \"\"rent\"\" but \"\"her contribution to household expenses\"\". (I don't know the genders but I'll call your partner \"\"her\"\" for convenience.) This is not income and is not taxed. On the off chance that the IRS actually investigated your arrangement, don't call any money she gives you \"\"rent\"\": call it \"\"her contribution to living expenses\"\". If you were two (or more) random people sharing a condo purely for economic reasons, i.e. you are not a family in any sense but each of you would have trouble affording a place on your own, it's common for all the room mates to share the rent or mortgage, utilities, etc, but for one person to collect all the money and write one check to the landlord, etc. Tax law does not see this as the person who writes the check collecting rent from the others, it's just a book-keeping convenience, and so there is no taxable transaction. (Of course the landlord owes taxes on the rental income, but that's not your problem.) In that case it likely would be different if one person outright owned the place and really was charging the others rent. But then he could claim deductions for all the expenses of maintaining it, including depreciation, so if it really was a case of room mates sharing expenses, the taxable income would likely be just about zero anyway. So short answer: If you really are a \"\"couple\"\", there are no taxable transactions here. If the IRS should actually question it, don't refer to it as \"\"collecting rent\"\" or any other words that imply this is a business arrangement. Describe it as a couple sharing expenses. (People sometimes have created tax problems for themselves by their choice of words in an audit.) But the chance that you would ever be audited over something like this is probably remote. I suppose that if at some point you break up, but you continue to live together for financial reasons (or whatever reasons), that could transform this into a business relationship and that would change my answer.\"", "title": "" }, { "docid": "5d86ebab266bf0a5d9f55be7a5222389", "text": "I am assuming this is USA. While it is a bit of a pain, you are best off to have separate accounts for your business and personal. This way, if it comes to audit, you hand the IRS statements for your business account(s) and they match your return. As a further precaution I would have the card(s) you use for business expenses look different then the ones you use for personal so you don't mess another one up.", "title": "" }, { "docid": "cc944b121bd06b9a75a12eae2177827d", "text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5", "title": "" } ]	fiqa
d7bd264b364d26af0addde05bf39811a	ACH processing time of day	[ { "docid": "9f62569be9b7c332637d6eeed835ddb2", "text": "It depends on the bank and network. Banks are to provide outgoing data at the certain time for the processing by the central clearing house (the Federal Reserve system, for ACH), which then distributes incoming data back to the banks. All this has to be done between the closing of the business day and the opening of the next one. If the transaction hasn't completed the full path during that time - it will wait at the position it was stuck at until the next cycle - next night. That's why sometimes ACH transactions take more than 1 day to complete (if, for example, multiple Fed banks have to be involved).", "title": "" }, { "docid": "f0d913bff1f30277e52a1968d3a25cb5", "text": "Each bank is different, so your question needs to be more specific. For instance, I believe Paypal and Chase settles at 7pm EST on business days. Bank of America at 5PM.", "title": "" } ]	[ { "docid": "1c4a0bcd6ec884cb4e38e9035f7e5ffb", "text": "I haven't used it in years, but look at GnuCash. From the site, one bullet point under Feature Highlights:", "title": "" }, { "docid": "3c36672b381c86276903fa1f9237200e", "text": "I was recently at the National Physical Laboratory in the UK and discussing exactly this. By January 2018 financial institutes will be legally required to time stamp all transactions (including high frequency trades) with a UTC time code. Today this is almost exclusively done using GPS satellite time and as the OP states - these can be spoofed but also are vulnerable to certain weather conditions. One of the many innovations of NPL in their recent diversification includes sending ‘time’ into the city by optical fibre which is ‘gold standard and cannot be tampered with’. Very interesting topic ( I thought )!", "title": "" }, { "docid": "e48d0443319cd49f9c32c2c8fba88553", "text": "TARGET2 is a high value realtime settlement system across Europe and for this to be open on weekends would mean all the Banks including Central Banks in the Euro Zone work. Quite a few times to manage intra day liquidity, banks borrow from each other, hence there is an active monitering of the liquidity by Banks. The borrowing happens over phone and fax and the lending bank sending a high value transaction that credits the borrowing banks. These is the day to day job of treasury group [highly paid individuals] to manage liquidity. Now if on weekends the volume is less, it does not make sense to keep these people, the cost of supporting this for very insiginificant business gain is not driving to build such systems. On the other hand on retail transactions, say Cards [Debit / Credit], ATM, the value is not high and hence there is no treasury function involved and there is a huge need, everything is automated. So no issues.", "title": "" }, { "docid": "aa91763d3069df0a5cadff629dfd558f", "text": "\"The second part of your question is the easiest to answer, how much manual work is involved in settlement processes? Payment systems which handle low value (i.e. high volume) transactions work on the basis of net settlement. Each of the individual payments are netted across all of the participant banks, so that only one \"\"real\"\" payment is made by each bank. Some days banks will receive money, others they will pay money. This is arbitrary and depends on whether their outbound payments exceed their inbound payments for that day. The payment system will notify each Bank how much it owes/will receive for the day. The money is then transferred between all of the banks simultaneously by the payment system to remove the risk that some pay and others don't. If you're going to make or receive a very large payment, you're going to want to make certain that its correct. This means that if there's a discrepancy, you need operations people available to find out why its wrong. When dealing with this many payments, answering that question can be hard. Did we miss a payment? Is there a duplicate? Etc. The vast majority of payments will process without any human involvement, but to make the process work, you always need human brains there to fix problems that occur. This brings me to your first question. On every day that settlement happens, a bank will receive (or pay) a very large sum of money. As a settlement bank you must settle that money - the guarantee that every bank will pay is one of the main reasons these systems exist. For settlement to happen, every bank has to agree to participate, and be ready to verify the data on their side and deliver the funds from their account. So there is no particular reason that this doesn't happen on weekends and holidays other than history. But for any payment system to change, it would require the support of (at least) a majority of participants to pay staff to manage the settlement process on weekends. This would increase costs for banks, but the benefits would only really be for you and me (if at all). That means it's unlikely to happen unless a government forces the issue.\"", "title": "" }, { "docid": "5e0b6f7861785caa8fbf307787905843", "text": "\"We have a local bank that changed to a bill pay service. The money is held as \"\"processing\"\" when the check is supposed to be cut and shows as cleared on the date the check is supposed to be received. Because our business checking is with the same bank, we discovered recently that the although the check shows cleared from our account, the recipient has not received the paper check yet - and may not for 2-3 days. We discovered this because the payroll checks we write this way (to ourselves) never arrive on the due date but clear the business account. It appears to be a new way for banks to ride the \"\"float\"\" and draw interest on the money. It happens with every check processed through the bill pay system and not with electronic transfers.\"", "title": "" }, { "docid": "a4ea222c46b78da5d98cec42d6f91562", "text": "I use XE.com for almost the same purpose. They have free transfer options, such as ACH withdrawals and deposits. I normally do a online bill payment through my international bank to XE, and have them deposit it in the US via ACH. It takes 1-3 business days, and there's no fee beyond their small percentage (about 1.25%) on top of the exchange rate.", "title": "" }, { "docid": "8fe5999d61e2c4421932f9a2e290acf0", "text": "When I place an order with Scottrade I also have to specify if I am wanting to trade outside of normal hours.", "title": "" }, { "docid": "f67397e8aa4882f62733d4d80aaabdf3", "text": "They need to spread the work for all customers over the whole month, and they don't work on weekends. Combine the two, and the rule becomes clear - if months have minimum of N working days, 1/N of all customers gets set on each day. You seem to be on day 5: If the month starts with a Monday, the fifth working day is the 5. (Friday); if there is a Sat or Sun in between, it will be the 6th, and if there is both a Sat and a Sun in there, it will be the 7th. However, the statement itself is not very important at all. It is just the day where they print it on paper (or even only on a PDF). You can see your bank account activity every day 24/7 by checking online, and nothing keeps you from printing it on every 1st of the month if you want (or every day, or whenever you prefer).", "title": "" }, { "docid": "7798a497f460a1874486ef14357ec956", "text": "There are banks and credit unions that don't charge fee for incoming wire transfer. You most likely won't get that from big brick and mortar banks like BofA, Citi but if you are doing it regularly, using another bank that offers it free would save you a lot. Since ACH are free, you can transfer money between those banks to your regular bank (e.g. BofA) for free. There would be delay involved in this process due to additional ACH. You could also use one these banks as your primary bank to avoid that delay. Credit unions are also generally fee friendly and many would offer free incoming wire transfer. However you are limited to what is available to you as all of them would have some membership criteria.", "title": "" }, { "docid": "2a6fc6409486bd64dced6e09bdc81cf5", "text": "From Chase FAQ it looks like this is a regular ACH transfer. ACH transactions can be reversed under certain conditions. I haven't been able to find some authoritative link on this, so I suggest this (thenest.com budgeting blog) instead: Allowed Reasons You can have ACH transactions reversed for one of three reasons under the rules: wrong money amount, wrong account or duplicated transactions. For example, if your mortgage bill is for $756.00, but your lender's website messes up and you're charged $856.00, the transaction is reversible it because it's the wrong dollar amount. If the website charges you $756.00 twice, the second duplicated transaction is reversible. Reversal Procedures You might have to bring a mistake to the originator's attention to get it fixed. Only the originator -- the person or company taking or sending money -- can ask for a reversal. For example, if you have a transaction for a wrong dollar amount from your lender's website, the originator is the lender. An originator is supposed to send the reversal within 24 hours of the error's discovery and within five banking days of the original transaction. When a reversal is required because of a wrong amount or wrong account, the originator must send a correcting entry with the right information. Bank's Responsibility A bank should honor an ACH reversal, even if it means debiting a customer's account again because of a correcting transaction. However, the bank doesn't have to debit your account if you closed it or the new transaction would overdraw it. Your bank does have to tell you if a correcting entry is going to take money out of your account, but the bank doesn't need your permission to do it.", "title": "" }, { "docid": "b256309a1cab2e6951e4eb89c9b56c33", "text": "8 am EDT happens when this comment is 5 hours and 51 minutes old. You can find the live countdown here: https://countle.com/424159rwH --- I'm a bot, if you want to send feedback, please comment below or send a PM.", "title": "" }, { "docid": "d65931bcdd9257af1f8355851a61b1f3", "text": "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.", "title": "" }, { "docid": "4059ea0037fe601d67bfb083947ecd6d", "text": "Shop around for a bank that offers lower/no fees for this operation and move your account there... or, yes, change where the direct deposit is routed... or move these accounts into a single bank so it's an internal transfer rather than ACH. Or ask the bank whether there is another way to arrange this which doesn't cost you money. (It costs me nothing to move money within my credit union, whether manually or on a scheduled basis. It costs me nothing to have them send funds to another entity from my checking account. Specific example: Pay comes into my savings account. On the 27th, an automatic transfer moves the cost of a mortgage payment from savings to checking. On the 30th, an automatic payment sends that to my mortgage in another bank. No fees on any of this, 100% reliable.)", "title": "" }, { "docid": "585dcbe697a32ef9df12931509c5c79f", "text": "A couple ways, but its not a guarantee. You have to have special charts. Instead of each tick being 1 min, 5 min, or whatever, it is a set number of trades. Say 2000. Since retail investors only buy and sell in small amounts, there will be small volume per tick. An institutional investor, however, would have a much much higher trade lot size, even if using an algo. Thus, large volume spikes in such a chart would signal institutional activity over retail. Similarly, daily charts showing average trade size can help you pick out when institutional activity is highest, as they have much larger trade sizes. You could also learn how the algos work and look for evidence one is being used. ie every time price hits VWAP a large sell order goes through would indicate an institutional investor is selling, especially if it happens multiple times in a row.", "title": "" }, { "docid": "3f2d02333fab4076506ce124c981619d", "text": "If you're talking about just Theta, the amount of decay due to the passage of time (all else being equal), then theoretically, the time value is a continuous function, so it would decay throughout the day (although by the day of expiry the time value is very, very small). Which makes sense, since even with 15 minutes to go, there's still a 50/50 shot of an ATM option expiring in-the-money, so there should be some time value associated with that one-sided probability. The further away from ATM the option is, the smaller the time value will be, and will be virtually zero for options that are deep in- or out-of-the-money. If you're talking about total time value, then yes it will definitely change during the day, since the underlying components (volatility, underlying price, etc.) change more or less continuously.", "title": "" } ]	fiqa
5b4a7108996e36619a5074cd47c2842e	In what cases can states tax non-residents?	[ { "docid": "9e54f8026b89f25711e7092dcbbaf3e1", "text": "From the Massachusetts Department of Revenue: 1st - Massachusetts Source Income That is Excluded Massachusetts gross income excludes certain items of income derived from sources within Massachusetts: non-business related interest, dividends and gains from the sale or exchange of intangibles, and qualified pension income. 2nd - Massachusetts Source Income That is Included: Massachusetts gross income includes items of income derived from sources within Massachusetts. This includes income: 3rd - Trade or business, Including Employment Carried on in Massachusetts: A nonresident has a trade or business, including any employment carried on in Massachusetts if: A nonresident generally is not engaged in a trade or business, including any employment carried on in Massachusetts if the nonresident's presence for business in Massachusetts is casual, isolated and inconsequential. A nonresident's presence for business in Massachusetts will ordinarily be considered casual, isolated and inconsequential if it meets the requirements of the Ancillary Activity Test (AAT) and Examples. When nonresidents earn or derive income from sources both within Massachusetts and elsewhere, and no exact determination can be made of the amount of Massachusetts source income, an apportionment of income must be made to determine that amount considered Massachusetts gross income. 4th - Apportionment of Income: Apportionment Methods: The three most common apportionment methods used to determine Massachusetts source income are as follows: Gross income is multiplied by a: So if you go to Massachusetts to work, you have to pay the tax. If you collect a share of the profit or revenue from Massachusetts, you have to pay tax on that. If you work from Oregon and are paid for that work, then you don't pay Massachusetts tax on that. If anything, your company might have to pay Oregon taxes on revenue you generate (you are their agent or employee in Oregon). Does the answer change depending on whether the income is reported at 1099 or W-2? This shouldn't matter legally. It's possible that it would be easier to see that the work was done in Oregon in one or the other. I.e. it doesn't make any legal difference but may make a practical difference. All this assumes that you are purely an employee or contractor and not an owner. If you are an owner, you have to pay taxes on any income from your Massachusetts business. Note that this applies to things like copyrights and real estate as well as the business. This also assumes that you are doing your work in Oregon. If you live in Oregon and travel to Massachusetts to work, you pay taxes on your Massachusetts income in Massachusetts.", "title": "" } ]	[ { "docid": "43cc8bc27d099e616f7caa21a347e45a", "text": "No state taxes, but Italy also has a favorable treaty with the US Federal Government. Look into to lowering your federal taxes to 5% ;) its a thick read, http://www.irs.gov/businesses/international/article/0,,id=169601,00.html and also try to determine if the Foreign Earned Income Exclusion applies to you, reducing your Federal tax to ZERO on the first $95,100 earned abroad. http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html but then you may be subject to a 20%+ italy tax. so maybe you should just try for the tax treaty", "title": "" }, { "docid": "4a89404183a0ad268890174c0623c23d", "text": "This question came up again (Living in Florida working remotely - NY employer withholds NYS taxes - Correct or Incorrect?) and the poster on the new version didn't find the existing answers to be adequate, so I'm adding a new answer. NYS will tax this income if the arrangement is for the convenience of the employee. If the arrangement is necessary to complete the work, then you should have no NYS tax. New York state taxes all New York-source salary and wage income of nonresident employees when the arrangement is for convenience rather than by necessity (Laws of New York, § 601(e), 20 NYCRR 132.18). Source: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html Similar text can also be found here: http://www.koscpa.com/newsletter-article/state-tax-consequences-telecommuting/ The NYS tax document governing this situation seems to be TSB-M-06(5)I. I looked at this page from NYS that was mentioned in the answer by @littleadv. That language does at first glance seem to lead to a different answer, but the ruling in the tax memo seems to say that if you're out of state only for your convenience then the services were performed in NYS for NYS tax purpose. From the memo: However, any allowance claimed for days worked outside New York State must be based upon the performance of services which of necessity, as distinguished from convenience, obligate the employee to out-of- state duties in the service of his employer.", "title": "" }, { "docid": "4f54cb2a890547946bb92bb2091023b4", "text": "\"ECI is relevant to non-resident aliens who are engaged in trade or business in the US. For that, you have to be present in the US, to begin with, or to own a business or property in the US. So the people to whom it is relevant are non-resident aliens in the US or business/property owners, not foreign contractors. From the IRS: The following categories of income are usually considered to be connected with a trade or business in the United States. You are considered to be engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant on an \"\"F,\"\" \"\"J,\"\" \"\"M,\"\" or \"\"Q\"\" visa. The taxable part of any U.S. source scholarship or fellowship grant received by a nonimmigrant in \"\"F,\"\" \"\"J,\"\" \"\"M,\"\" or \"\"Q\"\" status is treated as effectively connected with a trade or business in the United States. If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States. You usually are engaged in a U.S. trade or business when you perform personal services in the United States. If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. Gains and losses from the sale or exchange of U.S. real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. You must treat the gain or loss as effectively connected with that trade or business. Income from the rental of real property may be treated as ECI if the taxpayer elects to do so.\"", "title": "" }, { "docid": "7b6283d1a0db1485ca2d42467220e43e", "text": "Prachi - While most non-resident aliens are not allowed to claim the standard deduction here are some exceptions: IRS Law under Article 21: ARTICLE 21 Payments Received by Students and Apprentices This falls under the U.S.A.-India Tax Treaty. Sources: I hope this helps. So, yes, I do believe you would be able to claim the standard deduction, although it's always good to check with a tax adviser.", "title": "" }, { "docid": "b06cf61d9da1756b77f18ecfb634e214", "text": "You do not need to report gifts from US residents (US citizens/green card holders/tax residents due to length of stay) since filing gift tax return is their responsibility. In case of foreigners you need to report gifts in excess of $100K. In any case, transfers between spouses are exempt from gift tax.", "title": "" }, { "docid": "505e9b5d00c1c37a1fa0fc01c0688472", "text": "No, if you are a nonresident alien, you cannot deduct sales tax. You can only deduct state income tax. 1040NR Schedule A (which is page 3 of 1040NR) does not contain an option for sales tax, like 1040 Schedule A does. If you are a resident alien, then you can deduct sales tax.", "title": "" }, { "docid": "93fc4ef00f459bf1627f5af390b72a44", "text": "Completely different. Canadians can be deemed non-residents by severing their residential ties with Canada and emigrating to another country, and no longer required to file unless they have certain sources of Canadian income. See http://travel.gc.ca/travelling/living-abroad/taxation No such classifications exist with US citizenship. You file a return no matter what, even if you haven't stepped foot in the US in decades.", "title": "" }, { "docid": "dd4828eae5fcc94632df84f5418fc8fd", "text": "\"Depends. If you can choose where to relocate to, then I second the \"\"no income tax\"\" states. But even of these chose wisely, some have no income taxes at all, others have taxes on some kinds of income. Some don't have neither individual nor corporate taxes, some tax businesses in some ways. Some compensate with higher property taxes, others compensate with higher sales taxes. On the other hand, you might prefer states with income taxes but no sales taxes. It can happen if your current income is going to be low, but you'll be spending your savings. If you don't have a choice (for example, your employer wants you to move closer to their office), then you're more limited. Still, you can use the tax break on moving expenses (read the fine print, there are certain employment requirements), and play with the state taxes (if you're moving to a state with less/no taxes - move earlier, if its the other way - move later). Check out for cities that have income taxes. In some states it cannot happen by law (for example, in California only the state is allowed to collect income taxes), in others it is very common (Ohio comes to mind). Many things to consider in New York. New York City has its own income tax (as well as Yonkers, as far as I remember these are the only ones in the State of New York). So if you want to save on taxes in NYS but live close to the city, consider White Plains etc. If you work in NYC its moot, you're going to pay city taxes anyway. That is also true if you live in NJ but work in the city, so tax-wise it may be more efficient not to live across state lines from your place of work.\"", "title": "" }, { "docid": "da160fffe8072dca28be2c03e430316a", "text": "There's virtually no way for a person to completely avoid taxation at some point in their lives. Between payroll, sales, excise, and the like, you've been taxed at some point. And whether or not the individual paid is irrelevant to the ownership claim being invalid.", "title": "" }, { "docid": "5bf683f73eaca9db5871c953efed4ff7", "text": "\"This is an answer grounded in reality, not advice. Most states have no means of enforcing their foreign business entity registration statutes. Some states never even codified consequences. (California is a notable exception.). Some states have 'business licenses' that you need in order to defend your entity in court, but will retroactively apply the corporate veil when you get the license. The \"\"do I have to register\"\" question is analogous to asking a barber if you need a haircut. But this doesn't absolve you of looking in the mirror (doing your research). Registration and INCOME taxes are different stories. If a state calls their fee a franchise tax and it is applicable and there are real consequences for not, then you will have to pay that tax. Anyway, this isn't advocating breaking the law, but since it describes ignoring toothless state-chartered agencies, then there are people that will disagree with this post, despite being in line with business climate in the United States. Hope that helps\"", "title": "" }, { "docid": "ed944c03c1e7096cb07630e758530dac", "text": "Both states will want to tax you. Your tax home is where you maintain a domicile, are registered to vote, etc. and you will probably want to keep this as MA since you state that MA is your permanent residence and you are staying in a rented place in PA. But be careful about voter registration; that is one of the items that can be used to determine your state of residence. OK, so if you and your spouse are MA residents, you should file jointly as residents in MA and as nonresidents in PA. Do the calculations on the nonresident return first, and then the calculations on the resident return. Typically, on a nonresident tax return, the calculations are effectively the following: Report all your income (usually AGI from the Federal return). Call this $X. Compute the PA state tax due on $X. Note that you follow the rules for nonresidents in doing this, not the calculations used by PA residents. Call the amount of tax you computed as $Y. What part of the total income $X is attributable to PA sources? If this amount is $Z, then you owe PA $Y times (Z/X). On the resident return in MA, you will likely get some credit for the taxes paid to PA, and this will reduce your MA tax burden. Usually the maximum credit is limited to the lesser of actual tax paid to PA and what you would have had to pay MA for the same income. As far as withholding is concerned, your employer in PA will withhold PA taxes as if you are a PA resident, but you can adjust the amount via the PA equivalent of IRS Form W4 so as to account for any additional tax that might be due because you will be filing as a nonresident. Else you can pay estimated taxes via the PA equivalent of IRS Form 1040ES. Similarly, your wife can adjust her withholding to account for the MA taxes that you will owe on the joint income, or you can pay estimated taxes to MA too. Note that it is unlikely that your employer in Pennsylvania will withhold Massachusetts taxes (and send them to Massachusetts) for you, e.g. if it is a ma-and-pa store, but there may be special deals available if your employer does business in both states, i.e. is a MA-and-PA store.", "title": "" }, { "docid": "6f99de8c7958c0d3021748790f921142", "text": "Yes. Here's the answer to this question from oregon.gov: 3. I am moving into Oregon. What income will be taxed by Oregon? As an Oregon resident, you are taxed on ALL income regardless of the source of the income. This includes, but is not limited to: You may need to pay estimated taxes if you don't have Oregon withholding on your income.", "title": "" }, { "docid": "de65a195799a90cbf017660532c71024", "text": "Multistate Impact of the American Taxpayer Relief Act of 2012 In general, states with rolling conformity will follow this change. States with specific date conformity will continue to follow the date of conformity currently in effect and will not follow the change. A few states may have their own QSBS rules and will not conform to or be impacted by this provision of the Act. The chart that follows summarizes these principles as applied to the enumerated states: STATE: QSBS Exclusion Conformity: California statutes refer to the IRC QSBS provisions but modify and limit their applicability, and would not be impacted by this provision of the Act. However, California’s provisions were ruled unconstitutional in recent litigation and the California Franchise Tax Board has recently taken the position that gain exclusions and deferrals will be denied for all open tax years. Florida Florida does not impose an income tax on individuals and therefore this provision of the Act is inapplicable and will have no impact. Illinois Due to its rolling conformity, Illinois follows this provision of the Act. Because New York effectively provides for rolling conformity to the IRC, through reference to federal adjusted gross income as the state starting point, New York effectively follows this provision of the Act. Texas does not impose an income tax on individuals", "title": "" }, { "docid": "5e749065a0f4b7021263d95af5976c0d", "text": "I agree that double taxation makes no sense regardless of individual or corporation. Having said that, it's my understanding that Murca offers corporations tax credits on foreign taxes paid to avoid double taxation. I'm pretty sure that a similar vehicle exists for individuals as well. My issue is entirely with corporations paying off legislators to avoid taxes that they have an obligation to pay in the country that they operate.", "title": "" }, { "docid": "23b0dfdbfbf5dd51940969b729167d69", "text": "non-resident aliens to the US do not pay capital gains on US products. You pay tax in your home country if you have done a taxable event in your country. http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp#axzz1mQDut9Ru but if you hold dividends, you are subject to US dividend tax. The UK-US treaty should touch on that though.", "title": "" } ]	fiqa
f5a93c1bafe0831a70b23d6c123b5339	Is it possible to borrow money to invest in a foreign country?	[ { "docid": "230984d1dc54df5eba50d8d40e9b1046", "text": "Most likely, this will not work they way you think. First things first, to get a loan, the bank needs to accept your collateral. Note that this is not directly related to the question what you plan to do with the loan. Example: you have a portfolio of stocks and bonds worth USD 2 million. The bank decides to give you a loan of USD 1 million against that collateral. The bank doesn't care if you will use the loan to invest in foreign RE or use it up in a casino, it has your collateral as safety. So, from the way you describe it, I take it you don't have the necessary local collateral but you wish to use your foreign investments as such. In this case it really doesn't matter where you live or where you incorporate a company, the bank will only give you the loan if it accepts the foreign collateral. From professional experience with this exact question I can tell you, there are very few banks that will lend against foreign property. And there are even less banks, if any, that will lend against foreign projects. To sum it up: Just forget banks. You might find a private lender to help you out but it will cost you dearly. The best option you have is to find a strategic partner who can cough up the money you need but since he is taking the bigger risk, he will also take the bigger profit share.", "title": "" }, { "docid": "a7b97f8d1e7cef7a371db32488ca1d52", "text": "Yes it is possible. It would depend on Banks policies whether they would lend. Quite a few large corporations borrow money in one country for business needs in other country", "title": "" } ]	[ { "docid": "10ac79d2ac6be5c20574e7d20547be22", "text": "\"You have a few correlated questions here: Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. You're never too young to start. The power of interest means that the more time you give your money to grow, the larger your eventual gains will be (provided your investment is beating inflation). If your financial situation allows it, it makes sense to invest money you don't need immediately, which brings us to: This is the one you have to look at most. You're young but have a nice chunk of cash in a savings account. That money won't grow much and you could be losing purchasing power to inflation but on the other hand that money also isn't at risk. While there are dozens of investment options1 the two main ones to look at are: bonds: these are fixed income, which means they're fairly safe, but the downside is that you need to lock up your money for a long time to get a better interest rate than a savings account index funds that track the market: these are basically another form of stock where each share represents fractions of shares of other companies that are tracked on an index such as the S&P 500 or Nasdaq. These are much riskier and more volatile, which is why you should look at this as a long-term investment as well because given enough time these are expected to trend upwards. Look into index funds further to understand why. But this isn't so much about what you should invest in, but more about the fact that an investment, almost by definition, means putting money away for a long period of time. So the real question remains: how much can you afford to put away? For that you need to look at your individual situation and your plans for the future. Do you need that money to pay for expenses in the coming years? Do you want to save it up for college? Do you want to invest and leave it untouched to inspire you to keep saving? Do you want to save for retirement? (I'm not sure if you can start saving via IRAs and the like at your age but it's worth looking into.) Or do you want to spend it on a dream holiday or a car? There are arguments to be made for every one of those. Most people will tell you to keep such a \"\"low\"\" sum in a savings account as an emergency fund but that also depends on whether you have a safety net (i.e. parents) and how reliable they are. Most people will also tell you that your long-term money should be in the stock market in the form of a balanced portfolio of index funds. But I won't tell you what to do since you need to look at your own options and decide for yourself what makes sense for you. You're off to a great start if you're thinking about this at your age and I'd encourage you to take that interest further and look into educating yourself on the investments options and funds that are available to you and decide on a financial plan. Involving your parents in that is sensible, not in the least because your post-high school plans will be the most important variable in said plan. To recap my first point and answer your main question, if you've decided that you want to invest and you've established a specific budget, the size of that investment budget should not factor into what you invest it in. 1 - For the record: penny stocks are not an investment. They're an expensive form of gambling.\"", "title": "" }, { "docid": "638947ae1029dd877c240c92506276e6", "text": "Are there banks where you can open a bank account without being a citizen of that country without having to visit the bank in person? I've done it the other way around, opened a bank account in the UK so I have a way to store GBP. Given that Britain is still in the EU you can basically open an account anywhere. German online banks for instance allow you to administrate anything online, should there be cards issued you would need an address in the country. And for opening an account a passport is sufficient, you can identify yourself in a video chat. Now what's the downside? French banks' online services are in French, German banks' services are in German. If that doesn't put you off, I would name such banks in the comments if asked. Are there any online services for investing money that aren't tied to any particular country? Can you clarify that? You should at least be able to buy into any European or American stock through your broker. That should give you an ease of mind being FCA-regulated. However, those are usually GDRs (global depository receipts) and denominated in GBp (pence) so you'd be visually exposed to currency rates, by which I mean that if the stock goes up 1% but the GBP goes up 1% in the same period then your GDR would show a 0% profit on that day; also, and more annoyingly, dividends are distributed in the foreign currency, then exchanged by the issuer of the GDR on that day and booked into your account, so if you want to be in full control of the cashflows you should get a trading account denominated in the currency (and maybe situated in the country) you're planning to invest in. If you're really serious about it, some brokers/banks offer multi-currency trading accounts (again I will name them if asked) where you can trade a wide range of instruments natively (i.e. on the primary exchanges) and you get to manage everything in one interface. Those accounts typically include access to the foreign exchange markets so you can move cash between your accounts freely (well for a surcharge). Also, typically each subaccount is issued its own IBAN.", "title": "" }, { "docid": "0f61c2688a2b82bdbad6909bab943faf", "text": "\"Yes, definitely. Many municipalities and local governments issue bonds to fund various projects (schools, hospitals, infrastructure, etc). You can buy these bonds and in that way invest in these things. In the US these kinds of bonds are tax-free, i.e.: the income they provide is not taxed (by the US government, may be taxed by your State, check local tax laws). There are also dedicated mutual funds that that is all they invest in, if you don't want to deal with picking individual bonds. As to mom-and-pop stores - that would not be as easy, as mom-and-pop stores are by definition family owned and you can invest in them only if you are personally acquainted with them. Instead, you can invest in small regional/local chains, that while not being mom-and-pop, still small enough to be considered \"\"local\"\", but are publicly traded so that you can easily invest in them. You'll have to look for these. You can also use social lending platforms, like Lending Club, which I reviewed on my blog, or others, where you can participate in a lending pool to other people. You can invest in a credit union by opening an account there. Credit unions are owned by their account holders.\"", "title": "" }, { "docid": "d98a1a97eb6179caef1f1e5c9c6958c7", "text": "\"Not at all impossible. What you need is Fundamental Analysis and Relationship with your investment. If you are just buying shares - not sure you can have those. I will provide examples from my personal experience: My mother has barely high school education. When she saw house and land prices in Bulgaria, she thought it's impossibly cheap. We lived on rent in Israel, our horrible apartment was worth $1M and it was horrible. We could never imagine buying it because we were middle class at best. My mother insisted that we all sell whatever we have and buy land and houses in Bulgaria. One house, for example, went from $20k to EUR150k between 2001 and 2007. But we knew Bulgaria, we knew how to buy, we knew lawyers, we knew builders. The company I currently work for. When I joined, share prices were around 240 (2006). They are now (2015) at 1500. I didn't buy because I was repaying mortgage (at 5%). I am very sorry I didn't. Everybody knew 240 is not a real share price for our company - an established (+30 years) software company with piles of cash. We were not a hot startup, outsiders didn't invest. Many developers and finance people WHO WORK IN THE COMPANY made a fortune. Again: relationship, knowledge! I bought a house in the UK in 2012 - everyone knew house prices were about to go up. I was lucky I had a friend who was a surveyor, he told me: \"\"buy now or lose money\"\". I bought a little house for 200k, it is now worth 260k. Not double, but pretty good money! My point is: take your investment personally. Don't just dump money into something. Once you are an insider, your risk will be almost mitigated and you could buy where you see an opportunity and sell when you feel you are near the maximal real worth of your investment. It's not hard to analyse, it's hard to make a commitment.\"", "title": "" }, { "docid": "6470741c89540d9d5adea1af37740f9b", "text": "\"I don't follow the numbers in your example, but the fundamental question you're asking is, \"\"If I can borrow money for a low cost, and if I think I can invest it and receive returns greater than that cost, should I do it?\"\" It doesn't matter where that money comes from, a mortgage that's bigger than it needs to be, a credit card teaser rate, or a margin line from your stock broker. The answer is \"\"maybe\"\" - depending on the certainty you have about the returns you'd receive on your investments and your tolerance for risk. Only you can answer that question for yourself. If you make less than your mortgage rates on the investments, you'll wish you hadn't! As an aside, I don't know anything about Belgian tax law, but in US tax law, your deductions can be limited to the actual value of the home. Your law may be similar and thus increase the effective mortgage interest rate.\"", "title": "" }, { "docid": "4e6b3c3d49316238ac8a589d1dd171d9", "text": "\"The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted. You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment? Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever. If you approached me with this \"\"investment\"\", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned: That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this? A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this? 2K? Why does money need to be borrowed for this? This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult. So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.\"", "title": "" }, { "docid": "478cdde040cedfb6e01af7f6e8296744", "text": "I looked into the investopedia one (all their videos are mazing), but that detail just was not clear to me, it also makes be wonder, if a country issues bonds to finance itself, what happens at maturity when literally millions of them need to be paid? The income needs to have grown to that level or it defaults? Wouldn't all the countries default if that was the case, or are bonds being issued to being able to pay maturity of older bonds already? (I'm freaking myself out by realizing this)", "title": "" }, { "docid": "7526af225add390d4ab164b8fd1d35e2", "text": "The best would be to find someone in that country to make a payment on behalf of you. Other option is to use remittance services like Western union. It allows transfers to bank Account in Poland. You can fund by debiting your Card or Bank Account in US. If you debit your Card, there may be some fees as it would be treated as Cash Advance.", "title": "" }, { "docid": "74b29da71765c7cbe5d01f3f964e4834", "text": "That's a broad question, but I can throw some thoughts at you from personal experience. I'm actually an Australian who has worked in a couple of companies but across multiple countries and I've found out first hand that you have a wealth of opportunities that other people don't have, but you also have a lot of problems that other people won't have. First up, asset classes. Real estate is a popular asset class, but unless you plan on being in each of these countries for a minimum of one to two years, it would be seriously risky to invest in rental residential or commercial real estate. This is because it takes a long time to figure out each country's particular set of laws around real estate, plus it will take a long time to get credit from the local bank institutions and to understand the local markets well enough to select a good location. This leaves you with the classics of stocks and bonds. You can buy stocks and bonds in any country typically. So you could have some stocks in a German company, a bond fund in France and maybe a mutual fund in Japan. This makes for interesting diversification, so if one country tanks, you can potentially be hedged in another. You also get to both benefit and be punished by foreign exchange movements. You might have made a killing on that stock you bought in Tokyo, but it turns out the Yen just fell by 15%. Doh. And to top this off, you are almost certainly going to end up filling out tax returns in each country you have made money in. This can get horribly complicated, very quickly. As a person who has been dealing with the US tax system, I can tell you that this is painful and the US in particular tries to get a cut of your worldwide income. That said, keep in mind each country has different tax rates, so you could potentially benefit from that as well. My advice? Choose one country you suspect you'll spend most of your life in and keep most of your assets there. Make a few purchases in other places, but minimize it. Ultimately most ex-pats move back to their country of origin as friends, family and shared culture bring them home.", "title": "" }, { "docid": "e21d4c1386c08c5618e49b4a77c233f2", "text": "\"Hmm... Maybe I somewhat misunderstood your question then. Yes, trade deficits/surpluses are really the core of the country-level \"\"investment\"\". But yes, it maters what they do with it, which is why so many countries put any excesses into US treasuries. Going back to \"\"personal\"\" finance, if they pay down higher interest debt with their trade surplus, great; if they have no debt and can issue local currency (in PF land, \"\"take out a loan\"\") for under 2%, great; If not... Not so great. \"\"Saving\"\" money that costs over 2% isn't an investment, it's nothing but a loan disguised as one.\"", "title": "" }, { "docid": "3e3d6a2ce2c219ca85fe488f106792ae", "text": "\"While you have asked for general principles, I am going to seize onto a specific example you gave in order to illustrate the difficulties here: Argentina. Argentina's bonds are probably not safer than US treasuries. Argentina is presently in the business of seizing foreign oil businesses (Repsol YPF) while championing leftist causes. At the very least this indicates an elevated level of political risk: S&P, which affirmed Argentina's ratings five notches into junk territory at B, said policies such as those enacted since the country's October presidential election could also weaken Argentina's macroeconomic framework and external liquidity... \"\"Actions of this type continue to shorten the economic planning horizon in the country and contribute to Argentina's deteriorating economic and political links with the international community.\"\" -- \"\"S&P Lowers Argentina Outlook To Negative\"\". The Wall Street Journal, 23 April 2012 You're not going to be able to capture that sort of a risk with raw budget numbers. It's hard enough to figure out creditworthiness for a business; for an entire nation it's even harder. That's why credit-rating firms, as faulty as they may be, employ dozens of people to try and figure this sort of thing out. Additionally, there is a currency risk associated with buying bonds denominated in foreign currencies. It doesn't matter much if $nation repays all its bonds if they have so much inflation that the repayment is worth half of what it used to be (nor is it much help if your own nation's currency rises in value while your investment's value is stable elsewhere). Ultimately the value of a bond is \"\"how much money am I actually going to get back?\"\" and while operating a budget surplus isn't a bad sign in and of itself, it's hardly the complete picture. A fair accounting of the relative creditworthiness of any two nations needs to unite two massive fields of study: Macroeconomics and Politics. It is possible that the right sort of degree in economics, risk management, or a similar field of study could prepare you to know exactly what sort of research is necessary to make a meaningful analysis. :) Now, if you just want some commentary on which bonds are safe to buy, ask a credit-rating agency -- for example, read Standard and Poor's sovereign ratings - or find a mutual fund which may invest in international bonds at its own discretion and have someone else make the decisions.\"", "title": "" }, { "docid": "6fa8022f1a94860b18f850167f8bedd5", "text": "\"Average return on the S&P500 over the last 10 years has been 1.6 %; so if you'd invested in that with money borrowed at 3 % you would have lost (so far). Investing with borrowed money implies you think you can beat the market: that you're a cleverer investor than whoever decided to lend you the money. Whoever decided to lend you the money decided that you are the best (return/risk ratio) investment for their money. It might make sense to invest borrowed money if you don't need to pay it back if things go wrong: if you're an investment professional whose bonus depends on the profit you make, but who won't need to repay any loss. It might also makes sense to borrow money if you're going to 'add value', e.g. sweat equity: for example if you use it to renovate a house or (if you're a business) to hire more staff. But the question was \"\"What guidelines do you use\"\" and the answer is, \"\"I don't make passive investments with borrowed money.\"\" My Dad did it, i.e. didn't repay his mortgage as soon as he could have: but that was because (back in the '70s) he had a long-term (government-sponsored) mortgage for about 1.5 % (designed to help first-time buyers or something like that), at a time when banks were paying higher interest rates on (ultra-safe) deposits.\"", "title": "" }, { "docid": "8a1eeb8bc084a1d378814a548ab4109a", "text": "Usually, you can buy ETFs through brokerages. I looked at London to see if there's any familiar brokerage names, and it appears that the address below is to Fidelity Investments Worldwide and their site indicates that you can buy securities. Any brokerage, in theory, should allow you to invest in securities. You could always call and ask if they allow you to invest in ETFs. Some brokerages may also allow you to purchase securities in other countries; for instance, some of the firms in the U.S. allow investors to invest in the ETF HK:2801, which is not a U.S. ETF. Many countries have ETF securities available to local and foreign investors. This site appears to help point people to brokers in London. Also, see this answer on this site (a UK investor who's invested in the U.S. through Barclays).", "title": "" }, { "docid": "752e054a65d930d5a2efae595a2d3d62", "text": "Are there any laws against doing this? so long as you are truthful in your application for the loan, none that I know of - technically you could use the loan to pay for school and the cash that you would have used instead to invest. Are there other reasons why this is a very bad idea? I think you've already identified the biggest one, but here are my reasons: Will you go broke or go to jail? Likely not, but there is significant risk in investing with borrowed money. You might come out ahead, but you might also lose a bundle. If you're willing to take that risk, that's your right, but I would not call it a good idea under any circumstances.", "title": "" }, { "docid": "b1622d00b8e5930ff7cf8b02cd26ee96", "text": "the best thing to do is file bankrupt. your credit will be shot for 7 to 10 years. however usually 3 years after the bankrupt people will give you small lines of credit. then you rebuild on the small credit lines. and never get into a bad loan again you learn from mistakes. there is no shame in a mistake if you learned from it. I rebuilt my credit by using fingerhut. small credit limit on a cap 1 credit card 300 dollars unsecured card. personal loan of 1500 dollars to buy a old clunk for a car as I did not want to have five years of car payments. you can also get a secured credit card. and build credit with that. the bank will explain how to build credit using your own money. also you should know a lot of banks like your bankrupt stat. because they no you cant file for several more years. meaning if you don't pay your loan they can garnish you and you cant file bankrupt. you can get a new car loan with good interest rate. by taking 5000 dollars of your 15000 dollars savings down on the new loan. making your new car loan have better payments cheaper and better interest. and get a secured credit card of 2000 to build towards a unsecured credit card. keep all your new credit tabs small and pay on time.i would not use all your nest egg savings. that is not smart. get a lawyer and file. stay in school you will have a fresh start and you learned about upside down loans. don't listen to people trying to tell you bankruptsy is bad. it in a lot of ways gives you the upper hand in a no win debt or debts.", "title": "" } ]	fiqa
9eec5400b563f70a346ce2d94208848a	What are the tax guidelines for a Canadian freelancer working for a US company?	[ { "docid": "be8d414a0fd1c029f1c9ad663a449c4d", "text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US", "title": "" } ]	[ { "docid": "a30c7eb9e87bc88e5f6f9fef0e1ae22b", "text": "\"I would suggest you pay quarterly. Or, if you prefer, do the extra withholding. Don't wait until the end of the year. My experience is that of having a day job with freelance work on the side. I've spent a few years just freelancing, and I paid quarterly as requested to avoid the penalties. Now that I have a good day job again, my freelancing is just a small part of my income, and so I end up with a net return and no longer have to pay quarterly. You shouldn't wait until the end of the year to pay. This is assuming your wife is bringing in a decent income. The only scenario where you would want to wait is if her income is only a small amount (such as my wife's plans for an Etsy store). To the IRS, it doesn't really make a difference whether you withhold extra or pay quarterly. Of those two choices, my preference is to pay quarterly - it's easy to set up calendar reminders on the quarterly payment dates, which are always the same. I did the same as bstpierre when estimating my payments: just take last year's tax (for the business) and divide by 4 (adjusting for any obvious situational differences). That's usually close enough. Paying quarterly instead of via withholding means you get to hold on to your money (on average) for 6 weeks longer. Granted, that doesn't mean much with today's interest rates, but it's something. You may prefer the simpler accounting for withholding, though - you can \"\"set and forget\"\".\"", "title": "" }, { "docid": "a16a073fbef02fb2422c039375c8413b", "text": "\"What would be the best strategy to avoid paying income taxes on the sale after I move to another US state? Leaving the US and terminating your US residency before the sale closes. Otherwise consider checking your home country's tax treaty with the US. In any case, for proper tax planning you should employ a licensed tax adviser - an EA, CPA or an attorney licensed in your State (the one you'd be when the sale closes). No-one else is legally allowed to provide you tax advice on the matter. Because the company abroad is befriended, I have control over when (and e.g. in how many chunks) the earnings of the sale flow into my LLC. So I can plan where I live when that money hits my US account. I'm not familiar with the term \"\"befriended\"\" in this context, but form what I understand your description - its a shell corporation under your own control. This means that the transfer of money between the corporation and your LLC is of no consequence, you constructively received the money when the corporation got it, not the LLC. Your fundamental misunderstanding is that there's importance to when the money hits your US bank account. This is irrelevant. The US taxes your worldwide income, so it is taxed when you earn it, not when you transfer it into the country (as opposed to some other countries, for example India or the UK). As such, in your current scheme, it seems to me that you're breaking the US tax law. This is my personal impression, of course, get a professional advice from a licensed tax professional as I defined earlier.\"", "title": "" }, { "docid": "ca9561fce46ca68de2a189227d7c91b2", "text": "\"ITR-4 is for incorporated business. For freelancing, You can fill ITR 2 and declare the freelancing income as \"\"income from other source\"\". Refer to the Income Tax website for more details\"", "title": "" }, { "docid": "27fcc343ed9d01eac9eb28343ef02044", "text": "\"The IRS W-8BEN form (PDF link), titled \"\"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding\"\", certifies that you are not an American for tax purposes, so they won't withhold tax on your U.S. income. You're also to use W-8BEN to identify your country of residence and corresponding tax identification number for tax treaty purposes. For instance, if you live in the U.K., which has a tax treaty with the U.S., your W-8BEN would indicate to the U.S. that you are not an American, and that your U.S. income is to be taxed by the U.K. instead of tax withheld in the U.S. I've filled in that form a couple of times when opening stock trading accounts here in Canada. It was requested by the broker because in all likelihood I'd end up purchasing U.S.-listed stocks that would pay dividends. The W-8BEN is needed in order to reduce the U.S. withholding taxes on those dividends. So I would say that the ad revenue provider is requesting you file one so they don't need to withhold full U.S. taxes on your ad revenue. Detailed instructions on the W-8BEN form are also available from the IRS: Instruction W-8BEN (PDF link). On the subject of ad revenue, Google also has some information about W8-BEN: Why can't I submit a W8-BEN form as an individual?\"", "title": "" }, { "docid": "b0c55747bc1f3a76ac6eb4c80269b2d5", "text": "\"The other answer has mentioned \"\"factual resident\"\", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: You are a factual resident of Canada for tax purposes if you keep significant residential ties in Canada while living or travelling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes. Notes If you have established ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada for tax purposes. [...] I'll emphasize that \"\"considered to be a resident of Canada for income tax purposes\"\" means you do need to file Canadian income tax returns. The Notes section does indicate the potential treaty exemption that you mentioned, but it is only a potential exemption. Note the emphasis (theirs, not mine) on the word \"\"may\"\" in the last paragraph above. Please don't assume \"\"may\"\" is necessarily favorable with respect to your situation. The other side of the \"\"may\"\" coin is \"\"may not\"\". The Determining your residency status page you mentioned in your comment says this: If you want the Canada Revenue Agency's opinion on your residency status, complete either Form NR74, Determination of Residency Status (Entering Canada) or Form NR73, Determination of Residency Status (Leaving Canada), whichever applies, and send it to the International and Ottawa Tax Services Office. To get the most accurate opinion, provide as many details as possible on your form. So, given your ties to Canada, I would suggest that until and unless you have obtained an opinion from the Canada Revenue Agency on your tax status, you would be making a potentially unsafe assumption if you yourself elect not to file your Canadian income tax returns based on your own determination. You could end up liable for penalties and interest if you don't file while you are outside of Canada. Tax residency in Canada is not a simple topic. For instances, let's have a look at S5-F1-C1, Determining an Individual’s Residence Status. It's a long page, but here's one interesting piece: 1.44 The Courts have stated that holders of a United States Permanent Residence Card (otherwise referred to as a Green Card) are considered to be resident in the United States for purposes of paragraph 1 of the Residence article of the Canada-U.S. Tax Convention. For further information, see the Federal Court of Appeal's comments in Allchin v R, 2004 FCA 206, 2004 DTC 6468. [...] ... whereas you are in the U.S. on a TN visa, intended to be temporary. So you wouldn't be exempt just on the basis of your visa and the existence of the treaty. The CRA would look at other circumstances. Consider the \"\"Centre of vital interests test\"\": Centre of vital interests test [...] “If the individual has a permanent home in both Contracting States, it is necessary to look at the facts in order to ascertain with which of the two States his personal and economic relations are closer. Thus, regard will be had to his family and social relations, his occupations, his political, cultural or other activities, his place of business, the place from which he administers his property, etc. The circumstances must be examined as a whole, but it is nevertheless obvious that considerations based on the personal acts of the individual must receive special attention. If a person who has a home in one State sets up a second in the other State while retaining the first, the fact that he retains the first in the environment where he has always lived, where he has worked, and where he has his family and possessions, can, together with other elements, go to demonstrate that he has retained his centre of vital interests in the first State.” [emphasis on last sentence is mine] Anyway, I'm acquainted with somebody who left Canada for a few years to work abroad. They assumed that living in the other country for that length of time (>2 years) meant they were non-resident here and so did not have to file. Unfortunately, upon returning to Canada, the CRA deemed them to have been resident all that time based on significant ties maintained, and they subsequently owed many thousands of dollars in back taxes, penalties, and interest. If it were me in a similar situation, I would err on the side of caution and continue to file Canadian income taxes until I got a determination I could count on from the people that make the rules.\"", "title": "" }, { "docid": "d96a217cfd999cfcfdccb979a8068a15", "text": "\"Q) Will I have to submit the accounts for the Swiss Business even though Im not on the payroll - and the business makes hardly any profit each year. I can of course get our accounts each year - BUT - they will be in Swiss German! You will have to submit on your income from the business. The term \"\"partnership\"\" refers to a specific business entity type in the U.S. I'm not sure if you're using it the same way. In a partnership in the U.S. you pay income tax on your share of the partnership's income whether or not you actually receive income in your personal account. There's not enough information here to know if that applies in your case. (In the U.S., the partnership itself does not pay income tax - It is a \"\"disregarded entity\"\" for tax purposes, with the tax liability passed through to the partners as individuals.) Q) Will I need to have this translated!? Is there any format/procedure to this!? Will it have to be translated by my Swiss accountants? - and if so - which parts of the documentation need to be translated!? As regards language, you will file a tax return on a U.S. form presumably in English. You will not have to submit your account information on any other form, so the fact that your documentation is in German does not matter. The only exception that comes to mind is that you could potentially get audited (just like anyone else filing taxes in the U.S.) in which case you might need to produce your documentation. That situation is rare enough that I wouldn't worry about it though. I'm not sure if they'd take it in German or force you to get a translation. I was told that if I sell the business (and property) after I aquire a greencard - that I will be liable to 15% tax of the profit I'd made. I also understand that any tax paid (on selling) in Switzerland will be deducted from the 15%!? Q) Is this correct!? The long-term capital gains rate is 15% for most people. (At very high incomes it is 20%.) It sounds like you would qualify for long-term (held for greater than 1 year) capital gains in this case, although the details might matter. There is a foreign tax credit, but I'm not completely sure if it would apply in this case. (If forced to guess, I would say that it does.) If you search for \"\"foreign tax credit\"\" and \"\"IRS\"\" you should get to the information that you need pretty quickly. I will effectively have ALL the paperwork for this - as we'll need to do the same in Switzerland. But again, it will be in Swiss German. Q) Would this be a problem if its presented in Swiss German!? Even in this case you will not need to submit any of your paperwork to the IRS, unless you get audited. See earlier comments.\"", "title": "" }, { "docid": "aa6ac06db3552d08eda4e4d6ff3339b3", "text": "Your freelance income will not qualify you for the work-from-home deductions, for that you would need a T2200 form signed by your employer. But, you are allowed to be self employed as a sole-proprietorship while still being an employee of another company. If you take that route, you'll be able to write-off even more expenses than those you linked to. Things like a portion of your internet bill can be claimed, for example. But note that these deductions would only apply to offset the self-employment income, so if you're not earning very much from the freelance work, it might not be worth all the hassle. Filing taxes when self-employed is definitely more complicated, and many people will get professional tax preparation help - at least for the first time.", "title": "" }, { "docid": "e66da98d366e13d9534abe2af2536c82", "text": "$60-$100 US is typical for US 1099 contract IT work, but it varies quite a bit by location and industry. Contract agencies can charge more (sometimes significantly more), but you probably don't have the clout to ask for rates that are on par with those. $85 per hour might be a good starting point. Here are some factors to consider: I am not qualified to comment on the Canadian vs US legal and tax aspects fo your situation. Good luck", "title": "" }, { "docid": "f32db279288b5726c22159492891b6d4", "text": "\"Since as you say, an LLC is a pass-through entity, you will be making income in the U.S. when you sell to U.S. customers. And so you will need to file the appropriate personal tax forms in the US. As well as potentially in one or more States. The US government does not register LLCs. The various States do. So you'll be dealing with Oregon, Wisconsin, Wyoming, one of those for the LLC registration. You will also need to have a registered agent in the State. That is a big deal since the entire point of forming an LLC is to add a liability shield. You would lose the liability shield by not maintaining the business formalities. Generally nations aim to tax income made in their nation, and many decline to tax income that you've already paid taxes on in another nation. A key exception: If money is taxed by the U.S. it may also be taxed by one of the States. Two States won't tax the same dollar. Registering an LLC in one State does not mean you'll pay state taxes there. Generally States tax income made in their State. It's common to have a Wyoming LLC that never pays a penny of tax in Wyoming. Officially, an LLC doing business in a State it did not form in, must register in that State as a \"\"foreign LLC\"\" even though it's still in the USA. The fee is usually the same as for a domestic LLC. \"\"Doing business\"\" means something more than incidental sales, it means having a presence specifically in the State somehow. It gets complicated quick. If you are thinking of working in someone's app ecosystem like the Apple Store, Google Play, Steam etc. Obviously they want their developers coding, not wrestling with legalities, so some of them make a priority out of clearing and simplifying legal nuisances for you. Find out what they do for you.\"", "title": "" }, { "docid": "8fe6f7a9cad2f4520ed898b0c39b47ba", "text": "\"I assume your employer does standard withholding? Then what you need to do is figure what bracket that puts you in after you've done all your normal deductions. Let's say it's 25%. Then multiply your freelance income after business expenses, and that's your estimated tax, approximately. (Unless the income causes you to jump a bracket.) To that you have to add approximately 12-13% Social Security/Medicare for income between the $90K and $118,500. Filling out Form 1040SSE will give you a better estimate. But there is a \"\"safe harbor\"\" provision, in that if what you pay in estimated tax (and withholding) this year is at least as much as you owed last year, there's no penalty. I've always done mine this way, dividing last year's tax by 4, since my income is quite variable, and I've never been able to make sense of the worksheets on the 1040-ES.\"", "title": "" }, { "docid": "0493d4f827147a296d9f105fe8748726", "text": "They might be concerned with having to charge sales tax in California if they have a single employee in California, creating a nexus situation with CA. If that's the case, or even if there is some other issue, you might be able to switch from being a W2 employee to being a 1099 independent contractor. There's a host of additional issues this could cause, but it alleviate the nexus problem (if THAT is the problem). Here's a terrible solution you can bring up, but shouldn't do under any circumstances: offer to set up a mailing address in an allowed State, and give your company plausible deniability with regards to your legal residence. Obviously, this is a terrible idea, but exploring that option with your employer would help you suss out what the actual objection is. Ultimately, anything said here about the reason is just conjecture. You need to talk to the decision maker(s) about the real reason behind the denial. Then you can talk through solutions. Also - don't forget that you can get another job. If you are serious about a future with your girlfriend, you should put that relationship ahead of your current employment comfort and security. If you are willing to walk away from your position, you are in a much better situation to negotiate.", "title": "" }, { "docid": "4a9011e433785e61732b017579a786a1", "text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward.", "title": "" }, { "docid": "107749335103a8ad581ed32e3ba6bdcf", "text": "To answer my own question, at least to the extent of my understanding. Here the IRS says that all income for a foreign person from a US-based company is taxable with 30%. Here the IRS says that this tax should be withhold at source by whomever pays you. In case there is a tax treaty with the country, the tax can even be waived in the US. Of course, if you don't declare it in your home country, the US bank could probably give information requested by the home country authorities. For the other two cases (when there's no US party involved) I can't find anything on the IRS website, which kind of make sense. If I am using an account in the US just to receive and send money shouldn't imply any tax. Thanks to @litteadv for pointing me into the right direction.", "title": "" }, { "docid": "d1b56254525ee1a4d3bd61ecf5a539da", "text": "Before answering specific question, you are liable to pay tax as per your bracket on the income generated. I work with my partner and currently we transfer all earning on my personal bank account. Can this create any issue for me? If you are paying your partner from your account, you would need to maintain proper paperwork to show the portion of money transferred is not income to you. Alternatively create a join Current Account. Move funds there and then move it to your respective accounts. Which sort off account should be talk and by whose name? Can be any account [Savings/Current]. If you are doing more withdrawls open Current else open Savings. It does not matter on whos name the account is. Paperwork to show income matters from tax point of view. What should we take care while transfering money from freelance site to bank? Nothing specific Is there any other alternative to bank? There is paypal etc. However ultimately it flows into a Bank Account. What are other things to be kept in mind? Keep proper record of actual income of each of you, along with expenses. There are certain expenses you can claim from income, for example laptop, internet, mobile phone etc. Consult a CA he will be able to guide and it does not cost much.", "title": "" }, { "docid": "1b9ab1f95c481e326cd7c4f61ba760ec", "text": "I'm not familiar with Canadian taxes, but had your question been written about the United States, I'd advise you to at least consult for a couple of hours with an accountant. Taxes are complex, and the cost of making a mistake generally exceeds the cost of getting professional advice.", "title": "" } ]	fiqa
de102d02bff0c6738334fe2a3082f7bd	What are the consequences of being classified as a day trader, in Australia?	[ { "docid": "f6d2ff48ecc96ad67e1df6ee79fd1f33", "text": "In Australia the ATO can determine if you are considered a shareholder or a share trader. The ATO defines a shareholder as: A shareholder is a person who holds shares for the purpose of earning income from dividends and similar receipts. Whilst they define a share trader as: A share trader is a person who carries out business activities for the purpose of earning income from buying and selling shares. To find out the differences between them you can refer to the following link describing The difference between a share trader and a shareholder. The ATO also describes: To be classed as a share trader, you may be asked to provide evidence that demonstrates you are carrying on a business of share trading, for example: the purchase of shares on a regular basis through a regular or routine method a trading plan use of share trading techniques in managing your share acquisitions, such as decisions based on thorough analysis of relevant market information a contingency plan in the event of a major shift in the market. Losses incurred in the business of share trading are treated the same as any other losses from business. If your activities change from investor to trader, your investment changes from a CGT (capital gains tax) asset to trading stock. This can trigger CGT event for any investments you currently hold as they change from CGT assets to trading stock. Once you have changed over to a trader you will not be entitled to the 50% CGT discount for stocks held over 12 months. You will, however, be able to count any paper losses at the end of Financial Year to reduce your other income.", "title": "" } ]	[ { "docid": "e073371096371d8c81a0098cfabe41f6", "text": "Yeah man, was basically just screwing around. Day-trading stocks is a bit different for me. I usually trade options. Taking a bit getting used to. Not to mention, I probably lost a good bit on spreads. I made all market orders lol.", "title": "" }, { "docid": "9d2af695d255a62e171075d5e2071046", "text": "Short-term, the game is supply/demand and how the various participants react to it at various prices. On longer term, prices start to better reflect the fundamentals. Within something like week to some month or two, if there has not been any unique value affecting news, then interest, options, market maker(s), swing traders and such play bigger part. With intraday, the effects of available liquidity become very pronounced. The market makers have algos that try to guess what type of client they have and they prefer to give high price to large buyer and low price to small buyer. As intraday trader has spreads and commissions big part of their expenses and leverage magnifies those, instead of being able to take advantage of the lower prices, they prefer to stop out after small move against them. In practise this means that when they buy low, that low will soon be the midpoint of the day and tomorrows high etc if they are still holding on. Buy and sell are similar to long call or long put options position. And options are like insurance, they cost you. Also the longer the position is held the more likely it is to end up with someone with ability to test your margin if you're highly leveraged and constantly making your wins from the same source. Risk management is also issue. The leveraged pros trade through a company. Not sure if they're able to open another such company and still open accounts after the inevitable.", "title": "" }, { "docid": "3ffea634afb34ef8300a36b65480bcd8", "text": "\"I assume that whatever you're holding has lost a considerable amount of its value then? What sort of instrument are we talking about? If the margin call is 14k on something you borrowed against the 6900 you're a bit more leveraged than \"\"just\"\" another 100%. The trading company you're using should be able to tell you exactly what happens if you can't cover the margin call, but my hunch is that selling and taking the cash out ceased to be an option roughly at the time they issued the margin call. Being labelled as a day trader or not most likely did not have anything to do with that margin call - they're normally issued when one or more of your leveraged trades tank and you don't have enough money in the account to cover the shortfall. Not trying to sound patronising but the fact that you needed to ask this question suggests to me that you shouldn't have traded with borrowed money in the first place.\"", "title": "" }, { "docid": "9fa967e62946c3b1420aa199448e2f81", "text": "Trading volumes are higher at the end of the day as many traders close their open positions. In the morning however, traders incorporate various factors like performance of worldwide markets overnight, any corporate or government announcements, global macro events, etc.", "title": "" }, { "docid": "59b331357427c7f84ef6709fbdfc5a91", "text": "I've had a small forex investment in the AUDUSD since Oct of 2010 at 50:1 leverage, and have more than doubled my investment on the swap alone. Granted this is high risk with virtually every guarantee that it will fail eventually, but the AUD hasn't dropped at anytime during this trade enough to stop me out so far. With a higher interest rate, there's a natural scarcity in the AUD, especially when compared to the USD. Unless there's another crash like 2008, Asian trading with Aus significantly weakens, or the RBA screws the pooch, the AUD doesn't have many factors with a high probability for devastating impact on the currency.", "title": "" }, { "docid": "56d51d676394b5851cf6c07b46b19b7d", "text": "NYSE started allowing four letter tickers around 2009. NASDAQ allows 4-5 letter tickers. I guess they'll keep increasing when / if needed. Companies are allowed to change tickers, although there are costs. Tickers in the US are assigned through a single entity. Companies that are new need to take something that's open. http://www.wsj.com/articles/SB124296050986346159 I see that you're in Australia, but, since there aren't really that many options to deal with the problem that you mentioned, I'd guess that you'll ultimately do the same. Not sure about how tickers are assigned there though.", "title": "" }, { "docid": "2dc4fec57148f221da98f849fa2699b5", "text": "\"....causes loses [sic] to others. Someone sells you a stock. The seller receives cash. You receive a stock certificate. This doesn't imply a loss by either party especially if the seller sold the stock for more than his purchase price. A day trading robot can make money off of the price changes of a stock only if there are buyers and sellers of the stock at certain prices. There are always two parties in any stock transaction: a buyer and a seller. The day trading robot can make money off of an investment for 20 years and you could still make money if the investment goes up over the 20 years. The day trading robot doesn't \"\"rob\"\" you of any profit.\"", "title": "" }, { "docid": "adcf4d81a16e9141f53d218267ac3b5f", "text": "\"The high frequency trading you reference has no adverse impact on individual investors - at least not in the \"\"going to take advantage of you\"\" way that many articles imply. If anything, high-frequency trading is generally more helpful than harmful, adding liquidity to the system, although it can cause some volatility and \"\"noise\"\" in volume and other data, and the sudden entrance or exit of this type of trading can drive some abnormal market movements. As to research and time needed for trading, most data suggests that the less you try to \"\"beat the market\"\", the better you'll do. Trade activity tends to be inversely related to returns, particularly for individuals. Your best bet is likely to learn enough about investment risks to ensure you're comfortable with them, and invest in broadly diversified asset classes, regions, and sectors, and then mostly leave them alone, or rebalance annually. You'll almost surely do a lot better that way than you will if you spend countless hours researching the \"\"right\"\" stocks to buy.\"", "title": "" }, { "docid": "eaf6c3310231fc85c46cd31aa5e7a832", "text": "The answer is no. Online trading is not premature, and hasn't been for a long time. The presence of online complaints has no bearing on the maturity of this means of trading. I'm sure you can find negative reviews of banks, brokers, grocery stories, online retailers, car manufacturers etc. but no one in their right might would consider those industries premature. Sorry, I think your avoidance based on some online reviews sounds a little paranoid. What exactly are you afraid of? Maybe I could provide a more precise answer if we knew your exact concerns.", "title": "" }, { "docid": "aa12cba86d52e3dec51271ecfec2688a", "text": "I can't think of any more negatives apart from what you mentioned, but the positives might include higher cost base for when you sell the place (this only applies in Australia if it is an investment property) thus having to pay less tax on the capital gains, and being able to borrowing extra funds which may help with your cashflow (especially if you keep the extra funds in an 100% offset account so your interest payable is not increased until you really need the extra funds).", "title": "" }, { "docid": "654bdfe7a7296a4add795b43b2c13276", "text": "Understood. Similar to how doctors who go through/pay for med school prevent me from practicing medicine to profit. Unsure what you think the average bbg user is doing with the terminal, bud. It's definitely not day-trading, at least not in the way you the think.", "title": "" }, { "docid": "4a438d1fb8c6ec13210a1dd6eb9cf28c", "text": "However, is it a risk that they may withhold liquidity in a market panic crash to protect their own capital? Two cases exist here. One is if you access the direct market, then they cannot. Secondly if you are trading in the internal market created by them, yes they can do to save their behind, but that is open to question. They don't make money on your profit or loss, their money comes from you trading. So as long as you maintain the required margin in your accounts, you can go ahead. I had a mail exchange with IG Index regarding this and they categorically refuted on this point. Will their clients be unable to sell at a fair market price in a panic crash? No. Also, do CFD providers sometimes make an occasional downward spike to cream off their clients' cut-loss order? Need proof regarding this, not saying it cannot happen. They wouldn't antagonize the people bringing them business without any reason. They would be putting their money at risk. But you should know, their traders are also in the market. Which might look skimming your money, it would be their traders making money in the free market. After all Google, Facebook etc also sell your personal data for profit, why shouldn't the CFD firm also. Since they are market makers, what is to prevent them from attempting these tricks? Are these concerns also valid for forex brokers serving the retail public? What you consider as tricks are legitimate use of information to make money.", "title": "" }, { "docid": "76b3ed663f72d7d3a4b5b4f8254222b9", "text": "This is often the case where traders are closing out short positions they don't want to hold overnight, for a variety of reasons that matter to them. Most frequently, this is from day traders or high-frequency traders settling their accounts before the markets close.", "title": "" }, { "docid": "db7a27bf0afb30d12a004f760578f6a8", "text": "\"is there anything I can do now to protect this currency advantage from future volatility? Generally not much. There are Fx hedges available, however these are for specialist like FI's and Large Corporates, traders. I've considered simply moving my funds to an Australian bank to \"\"lock-in\"\" the current rate, but I worry that this will put me at risk of a substantial loss (due to exchange rates, transfer fees, etc) when I move my funds back into the US in 6 months. If you know for sure you are going to spend 6 months in Australia. It would be wise to money certain amount of money that you need. So this way, there is no need to move back funds from Australia to US. Again whether this will be beneficial or not is speculative and to an extent can't be predicted.\"", "title": "" }, { "docid": "d488865526296e2db4fd5227db813131", "text": "If you want the cheapest online broker in Australia, you can't go past CMC Markets, they charge $9.90 upto a $10,000 trade and 0.1% above that. There is no ongoing fees unless you choose to have dynamic data (stock prices get updated automatically as they change). However, the dynamic data fee does get waived if you have about 10 or more trades per month. You don't really need the dynamic data unless you are a regular trader anyway. They also provide some good research tools and some basic charting. Your funds with them are kept segragated in a Bankwest Account, so are resonably safe. They don't provide the best interest on funds kept in the account, so it is best to just deposit the funds when you are looking to buy, and move your funds elswhere (earning higher interest) when selling. Hopes this helps, regards Victor. Update They have now increased their basic brokerage to a minimum of $11 per trade unless you are a frequent trader.", "title": "" } ]	fiqa
c3257ecf73330c240a4ee469a5196d3f	How do margins on tracker mortgages (variable rate mortages) vary over time?	[ { "docid": "c7b5e49eac72c5c8079a6d70519277a2", "text": "how do these margins vary over time Depends on a lot of factors. The bank's financial health, bank's ongoing business activities, profits generated from it's other businesses. If it is new to mortgages, it mightn't take a bigger margin to grow its business. If it is in the business for long, it might not be ready to tweak it down. If the housing market is down, they might lower their margin's to make lending attractive. If their competitors are lowering their margins, the bank in question might also. Do they rise when the base rate rises, or fall, or are they uncorrelated? When rates rise(money is being sucked out to curb spending), large amount of spending decreases. So you can imagine margins will need to decrease to keep the mortgage lending at previous levels. Would economic growth drive them up or down? Economic growth might make them go up. Like in case 1, base rates are low -> people are spending(chances are inflation will be high) -> margins will be higher(but real value of money will be dependent on inflation) Is there any kind of empirical or theoretical basis to guess at their movement? Get a basic text book on macroeconomics, the rates and inflation portion will be there. How the rates influence the money supply and all. It will much more sense. But the answer will encompass a mixture of all conditions and not a single one in isolation. So there isn't a definitive answer. This might give you an idea of how it works. It is for variable mortgage but should be more or less near to what you desire.", "title": "" } ]	[ { "docid": "6657c05898ceb7473983e062b054aa66", "text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"", "title": "" }, { "docid": "2aaca1bc531b6eef0e29db9a819bcf72", "text": "Bonds can increase in price, if the demand is high and offer solid yield if the demand is low. For instance, Russian bond prices a year ago contracted big in price (ie: fell), but were paying 18% and made a solid buy. Now that the demand has risen, the price is up with the yield for those early investors the same, though newer investors are receiving less yield (about 9ish percent) and paying higher prices. I've rarely seen banks pay more variable interest than short term treasuries and the same holds true for long term CDs and long term treasuries. This isn't to say it's impossible, just rare. Also variable is different than a set term; if you buy a 10 year treasury at 18%, that means you get 18% for 10 years, even if interest rates fall four years later. Think about the people buying 30 year US treasuries during 1980-1985. Yowza. So if you have a very large amount of money you will store it in bonds as its much less likely that the US treasury will go bankrupt than your bank. Less likely? I don't know about your bank, but my bank doesn't owe $19 trillion.", "title": "" }, { "docid": "7a7a97238901b51b69c23d0c538c7d28", "text": "Mortgages with a prepayment penalty usually do not charge points as a condition of issue. The points, usually in the range 1%-3% of the amount borrowed, are paid from the buyer's funds at the settlement, and are effectively the prepayment penalty. Once upon a time (e.g. 30 years ago), in some areas, buyers had a choice of This last option usually had a higher interest rate than the first two. It was advantageous for a buyer to accept this option if the buyer was sure that the mortgage would indeed be paid off in a short time, e.g. because a windfall of some kind (huge bonus, big inheritance, a killing in the stock market, a successful IPO) was anticipated, where the higher interest charged for only a few years did not make much of a difference. Taking this third option and hanging on to the mortgage over the full 15 or 20 or 25 or 30 year term would have been a very poor choice. I do not know if all three options are still available in the current mortgage market. The IRS treats points for original morttgages and points for re-financed mortgages differently for the purposes of Schedule A deductions. Points paid on an original mortgage are deductible as mortgage interest in the year paid, whereas points paid on a refinance must be amortized over the life of the loan so that the mortgage interest deduction is the sum of the interest paid in the monthly payments plus a fraction of the points paid for the refinance. The undeducted part of the points get deducted in the year that the mortgage is paid off early (or refinanced again). Prepayment penalties are, of course, deductible as mortgage interest in the year of the prepayment.", "title": "" }, { "docid": "98863528ca9a2014fa3bc34c6c060f5a", "text": "yes, i am incorporating monte carlo return scenarios for both equity and real estate. yeah there is a lot to consider in the case of the property being a condo where you have to account for property taxes as well as condo fees. the two projects have entirely different considerations and it's not like the money that is injected to one is similar to the other (very different) which is why i figured there should be differing discount rates. in any case, thanks for the discussion and suggestions.", "title": "" }, { "docid": "35ec6ed1d2beb27b9ab3d584c9de8470", "text": "Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well.", "title": "" }, { "docid": "d74ce0acb761e346e6dfe3323d9ea77c", "text": "The article John cites says no correlation, but this chart from the article says otherwise; One sees the rate drop from 14% to 4% and housing rise from an index of 50 to near 190. (reaching over to my TI BA-35 calculator) I see that at 14%, $1000/mo will buy $84,400 worth of mortgage, but at 4%, it will buy $209,500. 2-1/2 times the borrowing power for the same payment. But wait, my friends at West Egg tell me that inflation means I can't compare $1000 in 1980 to the same $1000 in 2010. The $1,000 inflates to $2611 (i.e. an income rising only with inflation, no more) and that can fund a mortgage for $546,900. This is 6.5 times the original borrowing power, yet the housing index 'only' rose 3.8X. See that crazy chart? Housing actually got cheaper from 1980 to the peak. Statistics can say whatever you wish. Interest rate change drove all the change in housing prices, but not quite as much as it should have. To answer your question - I expect that when rates rise (and they will) housing prices will take a hit. In today's dollars, a current $1000 borrows (at 4%) nearly $210K, but at 6%, just $167K. If rates took a jump from these record lows, that's the nature of the risk you'd take.", "title": "" }, { "docid": "c091e3281e221f90416b841dccd337be", "text": "Ok maybe I should have went into further detail but I'm not interested in a single point estimate to compare the different options. I want to look at the comparable NPVs for the two different options for a range of exit points (sell property / exit lease and sell equity shares). I want to graph the present values of each (y-axis being the PVs and x-axis being the exit date) and look at the 'cross-over' point where one option becomes better than the other (i'm taking into account all of the up front costs of the real estate purchase which will be a bit different in the first years). i'm also looking to do the same for multiple real estate and equity scenarios, in all likelihood generate a distribution of cross-over points. this is all theoretical, i'm not really going to take the results to heart. merely an exercise and i'm tangling with the discount rates at the moment.", "title": "" }, { "docid": "65cf9a90015e47167757486425ce4587", "text": "\"Oftentimes, the lender (the owner of the security) is not explicitly involved in the lending transaction. Let's say the broker is holding a long-term position of 1MM shares from Client A. It is common for Client A's agreement with Broker A to include a clause that allows the broker to lend out the 1MM shares for its own profit (\"\"rehypothecation\"\"). Client A may be compensated for this in some form (e.g. baked into their financing rates), but they do not receive any compensation that is directly tied to lending activities. You also have securities lending agents that lend securities for an explicit fee. For example, the borrower's broker may not have sufficient inventory, in which case they would need to find a third-party lending agent. This happens both on-demand as well as for a fixed-terms (typically a large basket of securities). SLB (securities lending and borrowing) is a business in its own right. I'm not sure I follow your follow-up question but oftentimes there is no restriction that prevents the broker from lending out shares \"\"for a very short time\"\". Unless there is a transaction-based fee though, the number of times you lend shares does not affect \"\"pocketing the interest\"\" since interest accrues as a function of time.\"", "title": "" }, { "docid": "2278504170f25f5ade3ffef9c2df34fb", "text": "The value does change from 12.61% to 13.48%. The difference between re-investing cashflows at 14% vs 12% is not big enough to change the rounded value. Edit: The initial cashflow is discounted at t0, meaning it's already equal to its present value and the finance rate doesn't have an effect. It does impact future outgoing cashflows, as you've noted.", "title": "" }, { "docid": "a18c18f6b6591c375d4587f16548dc7a", "text": "In a strictly mathematical sense, no. Or rather, it depends what 'long run' means. Say today the home average is $200K, and payment is $900/mo. The $900 today happens to be about 20% of the median US monthly income (which is approximately $54,000/yr). Housing rises 4%/yr, income 3%/yr. In 100 years (long enough?) the house costs $10M but incomes are 'only' $1.03M/yr, and the mortgage, even at the same rate is $45K/month, or, to be clear, it rose to 52% of monthly income. My observation is that, long term, the median home costs what 25% of median income will support, in terms of the mortgage after downpayment. Long term. That means that if you graph this, you'll see trends above and below the long term line. You'll see a 25 year bubble form starting in the late 80's as rates dropped from near 18% to the Sub-4% in the early 00s. But once you normalize it to percent of income to pay the loan, much of the bubble is flattened out. At 18%, $1500/mo bought you a $100K mortgage, but at 3.5%, it bought $335K. This is in absolute dollars, wages also rose during that time. I am just clarifying how rates distort the long term trends and create the short term anomalies.", "title": "" }, { "docid": "8eb15fd9cad42cbd62a7309b9306c4e1", "text": "But the notes are always called at par, no? So you have a fixed yield which depends on the coupon and price you bought it at. I still don't see how the company doing better than expected changes the yield on your investment.", "title": "" }, { "docid": "59c81481b8726cfc411fafbc7b7c61d3", "text": "Does the price only start the day based on the previous day's rebalancing? No, the tracker will open at the price according to the stock it is tracking. So for example, if the ETF closed at $10 but the tracked stock continued trading and was priced $15 when the ETF reopened the ETF will open at $15. (Example is for a non-leveraged ETF.)", "title": "" }, { "docid": "bad7733c71b5c618301ebf612cd85e05", "text": "Usually that is the case that when fixed rates are lower than the variable rates, it is an indication that the banks feel the next movement in rates could be down. You also need to look at the fixed rates for different periods, for example 1 year fixed compared to 3 year fixed and 5 year fixed rates. If you find the 3 and 5 year fixed rates are higher than the 1 year fixed rates this could be an indication that the banks feel rates will fall in the short term but the falls won't last long and will continue to rise after a year or so. If the 3 year fixed rates are also low in comparison, then the banks may feel that the economy is heading for a longer term down trend. The banks won't want to lose out, so will change their fixed rates on their perception of where they feel the economy is headed. Since your post in May 2011, the standard variable rate has since dropped twice (in November and December) to be at 7.30%. You will also find that fixed rates have also been dropped further by the banks, indicating additional future cuts in the variable rates. Regards, Victor", "title": "" }, { "docid": "799a9ee5e202bf0686256b32b8c4a361", "text": "\"As Michael McGowan says, just because gold has gone up lots recently does not mean it will continue to go up by the same amount. This plot: shows that if your father had bought $20,000 in gold 30 years ago, then 10 years ago he would have slightly less than $20,000 to show for it. Compare that with the bubble in real estate in the US: Update: I was curious about JoeTaxpayer's question: how do US house prices track against US taxpayer's ability to borrow? To try to answer this, I used the house price data from here, the 30 year fixed mortgages here and the US salary information from here. To calculate the \"\"ability to borrow\"\" I took the US hourly salary information, multiplied by 2000/12 to get a monthly salary. I (completely arbitrarily) assumed that 25 per cent of the monthly salary would be used on mortgage payments. I then used Excel's \"\"PV\"\" (Present Value) function to calculate the present value of the thirty year fixed rate mortgage. The resulting graph is below. The correlation coefficient between the two plots is 0.93. There are so many caveats on what I've done in ~15 minutes, I don't want to list them... but it certainly \"\"gives one furiously to think\"\" !! Update 2: OK, so even just salary information correlates very well with the house price increases. And looking at the differences, we can see that perhaps there was a spike or bubble in house prices over and above what might be expected from salary-only or ability-to-borrow.\"", "title": "" }, { "docid": "a67a9aa56c7f5ce0cb27dd013d0dc2a8", "text": "Mortgage rates tend to track the yield on the 10-year Treasury note. The CBOE Interest Rate 10-Year T-Note, TNX, is a security directly related to this rate. Divide the CBOE price of TNX by 10 to get the yield. One can also track the 10Y T-Note yield at yahoo finance using ticker symbol (^TNX). One can also track the 10Y T-Note yield at yahoo finance using ticker symbol (^TNX).", "title": "" } ]	fiqa
18da748724a332af07aa6aa66e09bdf3	Why charge gross receipts taxes to the customer?	[ { "docid": "90544e3c1e3bf85fdd78b635d8ba2d0f", "text": "\"the state of New Mexico provides guidance in this exact situation. On page 4: Gross receipts DOES NOT include: Example: When the seller passes tax to the buyer, the seller should separate, or “back out”, that tax from the total income to arrive at \"\"Gross Receipts,\"\" the amount reported in Column D of the CRS-1 Form. (Please see the example on page 48.) and on page 48: How do I separate (“back out”) gross receipts tax from total gross receipts? See the following examples of how to separate the gross receipts tax: 1) To separate (back out) tax from total receipts at the end of the report period, first subtract deductible and exempt receipts, and then divide total receipts including the tax for the report period by one plus the applicable gross receipts tax rate. For example, if your tax rate is 5.5% and your total receipts including tax are $1,055.00 with no deductions or exemptions, divide $1,055.00 by 1.055. The result is your gross receipts excluding tax (to enter in Column D of the CRS-1 Form) or $1,000. 2) If your tax rate is 5.5%, and your total gross receipts including tax are $1,055.00, and included in that figure are $60 in deductions and another $45 in exemptions: a) Subtract $105 (the sum of your deductions and exemptions) from $1,055. The remainder is $950. This figure still includes the tax you have recovered from your buyers. b) Divide $950 by 1.055 (1 plus the 5.5% tax rate). The result is $900.47. c) In Column D enter the sum of $900.47 plus $60 (the amount of deductible receipts)*, or $960.47. This figure is your gross receipts excluding tax.\"", "title": "" }, { "docid": "4478326e08817e1c19391c1f9412df4f", "text": "I'll address one part of your question: There are other taxes that companies pay as well, such as income tax, but don't charge to the customer as a fee. So, why are gross receipts taxes charged to the customer? Things like income tax can't be passed on to the consumer in a direct way, because there's no fixed relationship between the amount of the tax and the price of an individual product. Income tax is paid on taxable income, which will incorporate deductions for the costs the company incurred to do business. So the final amount of corporate income tax can depend on things unrelated to the price of goods sold, like whether the business decided to repave their parking lot. Gross receipts taxes, by definition, are charged on the total amount of money taken in, so every dollar you spend on an item at the store will be subject to the gross receipts tax, and hence will cost the business 7 cents (or X% where X is the tax rate). This means there is a direct link between the price you pay for an individual item and the tax they pay on that transaction. The same is true for sales taxes, which are also often added at the time of sale. Of course, businesses could roll all of these into the posted price as well. The reason they don't is to get their foot in the door and make the price seem lower: you're more likely to buy something if you see it for the low, low, one-time-only price of $99.99, act now, save big, and then find out you owe an extra $7 at the register than if you saw $107 on the price tag.", "title": "" }, { "docid": "5538e02a3ed26d84b12fb9db21e19d32", "text": "\"It sounds like \"\"gross receipt tax\"\" is essentially the same thing most states call \"\"sales tax\"\", which is always handled this way -- prices displayed are pre-tax, tax is added when the final price is calculated. One reason for doing it that way is that most prices result in taxes that involve fractions of pennies, and calculating from the total produces a more accurate result than calculating tax on each item individually. It is theoretically possible to set prices so the numbers come out evenly when tax is added. But that requires that the prices be in fractional cents, potentially to many decimal places. And in fact in some places it is illegal to display (only) the with-tax price. Otherwise I'm sure some stores and restaurants would be willing to deal with the mils and micros, purely on principle or as a marketing gimmick. Since customers have learned to expect sales tax, it really isn't worth the effort to fight it. The closest I've seen has been occasional \"\"we'll pay your sales tax\"\" offers, or statewide sales-tax holidays once a year.\"", "title": "" } ]	[ { "docid": "855e6133093fb51ca06e352973a96378", "text": "This is basically done to reduce costs and overhead, with agreement of the credit card issuers. When the card is physically present and the charge is low, the burden of keeping the signed receipts and of additional delays at the cash register is not worth the potential risk of fraud. Depending on the location and the specific charge-back history of the business, the limit above which signature is required differs. In one supermarket in the area I live they require signatures only on charges above $50. In another, 10 miles away from the first one, they require signatures on charges above $25.", "title": "" }, { "docid": "bd9b19a37e4c92262904baf33a754b6d", "text": "What's funny to me is that the sales tax isn't what gives Amazon better prices. It's that stores have to include their costs on the price that's shown on the shelf. Amazon gets to tell you later that there's a shipping fee, Amazon isn't paying a store staff and rental on store front property. In short Amazon can show the customer a price that is making a decent profit, and still be lower than a retail outlet.", "title": "" }, { "docid": "a603e76dd7cf5e499482b89caca47328", "text": "First, they don't have an obligation to provide a service for a non-customer. In theory, the could even refuse this service to account holders if that was their business model, although in practice that would almost surely be too large of a turn-off to be commercially feasible. Non-account holders aren't paying fees or providing capital to the bank, so the bank really has no incentive or obligation to tie up tellers serving them. Maybe as importantly, they have a legitimate business reason in this case as stated. The fact that the bill passed whatever test the teller did does not, of course, ensure that the bill is real. They may (or may not) subject it to additional tests later that might be more conclusive. Making you have an account helps ensure that, in the event they do test it and it fails, that (a) they know who you are in case the Secret Service wants to find you, and (b) they can recover their losses by debiting your account by the $100. This isn't foolproof since any number of bad things could still happen (identity theft, closing account before they do additional tests, bill passing later tests, etc.), but it does give them some measure of protection.", "title": "" }, { "docid": "d072016a2ccc2726e7b3018546b815db", "text": "I'd imagine you want to keep the utility bills around to dispute any historical billing errors or anomalies for perhaps 6 months to a year. Beyond that, you always have the financial records of making the payments -- namely, your bank statements. So what benefit is there in keeping the paper receipts for utility payments around for longer than that? I say shred them, with extreme prejudice -- while wearing black Chuck Norris style.", "title": "" }, { "docid": "8d5478ef1db64563a3c20bda209e11f3", "text": "looks like the US tax system needs an overhaul. You cant charge yourself arbitrary amounts to even out your bottom line. Wel you and I cant, but apparently we just need to make more money to do so....thanks BK for showing me the way!!", "title": "" }, { "docid": "b5ee1e17e8e4b943fe7322831dec28f6", "text": "\"Imagine two restaurants. One has prices 15% higher than the other, and the owner pays this 15% to his wait staff in the form of higher wages. The other has lower prices, but the average customer gifts 15% to their waiter. Clearly, in the first restaurant, the 15% the wait staff receives is taxable income. It is traditional salary. What legitimate, economic justification is their for treating the second restaurant any differently? Imagine a grocery store in a small town that offered long-time customers a \"\"pay nothing\"\" option but made it clear that they'd be subject to social ostracism and no longer welcome in the store if they didn't gift 85% of the usual cost of the items. The customers would save on sales tax and the grocer would argue that all that money was gifts, not income. Of course this doesn't work. The IRS, and the laws, don't care very much about what you call things. They care about the underlying economic reality. If the money was part of the payment for the services rendered, regardless of how it was delivered, what the parties called it, or whether the obligation to pay was legal or social, it's still a payment for the service and it's still taxable. You would have to be able to argue to the IRS that it really was a gift and wasn't any form of payment for the service received. Otherwise, it's just a scheme to evade taxes.\"", "title": "" }, { "docid": "d69a4e4466093ccea9e763adb6374aa4", "text": "Businesses are only required to keep receipts over $751. However for individuals, I would throw them all in a shoebox and not worry about organizing them. There's a small chance you'll need to go through them during an audit, and you can worry about reconciling all of them and putting them in order at that point. Just write 2010 on the box and keep it somewhere easy, and at the end of the year throw it in your basement (or get a scanner, and scan and trash the original).", "title": "" }, { "docid": "e3372ca3e67f71cc946ef94b9f46cfca", "text": "A simple option is to ask your teammates to send you their portion of the tax bill. This option makes everyone's taxes easier, especially since it is very likely that they have already sent in their tax returns.", "title": "" }, { "docid": "a646a739d6aea9022f6c1e0c15a6857d", "text": "\"There is some merit to it, in that [federal gross receipts are largely uncorrelated with tax rates](https://i0.wp.com/wichitaliberty.org/wp-content/uploads/2014/02/top-federal-personal-income-tax-rates-tax-receipts-2014-02.png). There are two somewhat perverse consequences of that fact - First, raising taxes doesn't raise revenues, meaning we can't actually pay for \"\"moar free stuff from Uncle Sam!\"\" merely by adding an offsetting tax increase. And second, raising taxes on group-X (ie, the rich) to make them pay their \"\"fair\"\" share flat-out doesn't work, it's effectively just kicking them in the balls because we grudge them for having more money than we do. Now, as to whether or not lowering taxes really encourages companies to hire more and pay better - That's an entirely separate issue from whether or not it's revenue neutral from the perspective of the federal government. Fortunately, we have a recent historical example - Reagan did exactly that, which ushered in a period of corporate greed and erosion of workers' rights not seen since the end of the days of the Robber Barons. So on the front-end, Trump's not wrong; on the back end, he's trying to sell us unicorn farts.\"", "title": "" }, { "docid": "e13b682ffb08bdfdfb9f4297d66fb225", "text": "If you want to be safe, only claim deductions for which you have a receipt. This explanation may help.", "title": "" }, { "docid": "5343a55d9de262de93da6ee1e7ee768a", "text": "It's always beneficial to have detailed business records. There are any number of reasons where you'd need to prove both the types of services you've rendered and the payment history - you've already noted audits (for IRS taxes). Other possibilities: Whether these records need to be original or electronic might be the topic for another question.", "title": "" }, { "docid": "01e7358c2245eabd5d5287f4ca158ee5", "text": "The other reason you might want to keep receipts is if you do any freelancing or contract work, for your business expenses. You can take a picture of the receipts with your phone, or scan them - you don't have to keep the paper copies.", "title": "" }, { "docid": "da71f9205f2e0eb7c6a2ce25a7af6eb4", "text": "[This is a company's (TradingView.com) customer subscription levels.](https://i.imgur.com/1YIPzOn.gif) Why do they charge a higher price when customers pay monthly? Monthly increases short term cash flow, right? Why do you think they make prices in such a way that it incentivizes customers to be billed every 2 years?", "title": "" }, { "docid": "dc092acc5cde5b1d46766e306480c082", "text": "This is a great answer. It's worth noting that often internal charging is commonly an issue in less clear cut situations like IT departments charging for their services - there is much less of an 'real' value that they could charge for their services to the outside world (as it is an internal service not a physical product that is relatively liquid), yet their chargeable costs gets inflated and can slow down businesses by making projects seem more expensive than they are. I would describe that as one of the most common gripes. Also I'd argue that your latter scenario where profits are shifted around to reduce tax bills IS well understood by the top of the business, and unlikely to create a situation where divisions are mistakenly regarded as unprofitable (unless the CFO / FD is missing from all the board meetings!). It's a situation that is carefully designed by the business.", "title": "" }, { "docid": "bbc665f95d5518c2fc7082a4541d862c", "text": "A) Wrong subreddit. There's probably a legal advice Canada one you should check out. B) You're a cashier. No one cares about your involvement in taxing products/customers. Unless you're directly pocketing money the most you could be is out of a job. C) If you're part of a chain store there is a REALLY good chance they have their inventory/sales numbers looked at regularly by extremely qualified people. Conclusion: Customer was being a dick for no reason.", "title": "" } ]	fiqa
30b0514aa2c0fe255a8c8b57fae8a029	1099 Misc for taking care of foreign exchange students	[ { "docid": "8e67f5d319cbe5f6e7fc12d9ff5115ee", "text": "\"In general, you are allowed to deduct up to $50/month per student (see page 4), but only if you aren't reimbursed. In your case, since you are receiving a stipend, the full $2000 will be treated as taxable income. But the question of \"\"is it worth it\"\" really depends on how much you will actually spend (and also what you'll get from the experience). Suppose you actually spend $1000/month to host them, and if your combined tax rate is 35%, you'll pay $700 in additional taxes each month, but you'll still profit $300 each month. If your primary motivation for hosting students is to make a profit, you could consider creating a business out of it. If you do that you will be able to deduct all of your legitimate business expenses which, in the above example, would be $1000/month. Keeping with that example, you would now pay taxes on $1000 instead of $2000, which would be $350, meaning your profit would now be $650/month. (Increasing your profit by $350/month.) You will only need to keep spending records if you plan to go the business route. My advice: assume you won't be going the business route, and then figure out what your break even point is based on your tax rate (Fed+state+FICA). The formula is: Max you can spend per month without losing money = 2000 - (2000 * T) e.g. if T = 35%, the break even point is $1300. Side note: My family hosted 5 students in 5 years and it was always a fantastic experience. But it is also a very big commitment. Teenagers eat a lot, and they drive cars, and go on dates, and play sports, and need help with their homework (especially English papers), and they don't seem to like bed times or curfews. IMHO it's totally worth it, even without the stipend...\"", "title": "" }, { "docid": "9f813a03faadc324bd6aa1f40bb8fc31", "text": "According to Intuit, you cannot claim the $50 charitable contribution, so the entire $2000 / month will be taxable instead of $1900. That's only an extra $35 if your combined tax rate is 35%. As TTT mentioned, do this for the experience, not for the money. My wife and I have been hosting international students for 10 years now. https://ttlc.intuit.com/questions/3152069-i-received-a-1099-misc-employee-compensation-for-hosting-a-foreign-exchange-student-can-i-complete-a-schedule-c-for-the-expenses", "title": "" } ]	[ { "docid": "d34cb5f443878184b7f7c24914d6b8db", "text": "Since you were a nonresident alien student on F-1 visa then you will be considered engaged in a trade or business in the USA. You must file Form 1040NR. Here is the detailed instruction by IRS - http://www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Nonresident-Aliens", "title": "" }, { "docid": "68a64f99ce3e7b39eb632a8f6aefc86a", "text": "You are expected to file 1099 for each person you pay $600 a year. I.e.: not a one time payment, but the total over the course of the year. Since we don't know how much and what else you paid - we cannot answer this question. The real question you're asking is that if you're treating the enterprise as a hobby, whether you're supposed to file 1099s at all. The answer to that question is yes. You should talk to your tax adviser (a EA/CPA licensed in your state) about this, and whether it is the right thing for you to do treating this as a hobby at all.", "title": "" }, { "docid": "29f435b2c18dc8dbc198bb80a1cabc83", "text": "If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional.", "title": "" }, { "docid": "0980ca2d1a7e51b55220dd25da641b4f", "text": "question #2 - yes, 25% of your 1099 income. Good idea. It adds up quickly and is a good way to reduce taxable income.", "title": "" }, { "docid": "c4da0f6689c697989f3e85d5e528ac56", "text": "\"It says that you are exempt \"\"as long as such interest income is not effectively connected with a United States trade or business\"\". So the interest is from money earned from doing business with/through AirBnb, a US company. So you will have to report it. Even if your bank doesn't send you a 1099-INT, you have to report it, unless it is under $0.49 because the IRS allows rounding.\"", "title": "" }, { "docid": "a6d8246a6d2c372099e8140b3683674e", "text": "Business Apprentice is internship. That is not what is applicable for you. You're a visiting professor/researcher, which falls under Article 22, so you don't get the standard deduction.", "title": "" }, { "docid": "57fbee9831e6442f6cf8d4f9f3c712b6", "text": "I can't find specific information for Form 1099-DIV for this tax year. However, I found this quote for next tax season that talks about Form 1099-B: Due date for certain statements sent to recipients. The due date for furnishing statements to recipients for Forms 1099-B, 1099-S, and 1099-MISC (if amounts are reported in box 8 or 14) is February 15, 2018. [emphasis added] I know many brokerages bundle the 1099-DIV with the 1099-B, so one might assume that the deadlines are the same. February 15 seems consistent with the messages I got from my brokerages that said the forms will be mailed by mid-February.", "title": "" }, { "docid": "fb0647f840b95233af703f5eabf08a32", "text": "\"1. What forms do I need to file to receive money from Europe None. Your client can pay you via wire transfer. They need to know your name, address, account number, and the name of your bank, its SWIFT number and its associated address. The addresses and names are required to make sure there are no typos in the numbers. 2. What forms do I need to file to pay people in Latin America (or any country outside the US) None. 1099s only need to be filled out when the contractor has a US tax ID. Make sure they are contractors. If they work for you for more than 2 years, that can create a problem unless they incorporate because they might look like \"\"employees\"\" to the IRS in which case you need to be reporting their identitites to the IRS via a W-8BEN form. Generally speaking any foreign contractor you have for more than 2 years should incorporate in their own country and you bill that corporation to prevent employee status from occurring. 3. Can I deduct payments I made to contractors from other countries as company expense Of course.\"", "title": "" }, { "docid": "9336d26dd5877928c86ed75d766ddbc7", "text": "\"In general, scholarship income that you receive that is not used for tuition or books must be included in your gross income and reported as such on your tax return. Scholarship income you receive that is used for those kinds of expenses may be excludable from your gross income. See this IRS information and this related question. I believe that as represented on the 1098-T, this generally means that if Box 5 (Scholarships and Grants) is greater than Box 1 or 2 (only one of which will be used on your 1098-T), you received taxable scholarship income. If Box 5 is less than or equal to Box 1/2, you did not receive taxable scholarship income. This TaxSlayer page draws the same conclusion. However, you should realize that the 1098-T is not what makes you have to pay or not pay taxes. You incur the taxes by receiving scholarship money, and you may reduce your tax liability by paying tuition. The 1098-T is simply a record of payments that have already been made. For instance, if you received $10,000 in scholarship money --- that is, actually received checks for that amount or had that amount deposited into your bank account --- then your income went up by $10,000. If you yourself paid tuition, it is likely that you can exclude the amount of the tuition from your taxable income, reducing the tax you owe (see the IRS page linked above). However, if you received $10,000 in actual money and in addition your tuition was paid by the scholarship (with money you never actually had in your own bank account), then the entire $10,000 would be taxable. You do not give enough information in your question to be sure which of these situations is closer to your own. However, you should be able to decide by looking at your bank account: look at how much money you received and how much you spent on tuition. If you received more scholarship money than the tuition you paid out of pocket, you owe taxes on the remainder. (I emphasize that this is just a general rule of thumb and should not be taken as tax advice; you should review the IRS information and/or consult a tax professional to determine what part of your scholarship income is taxable.) In addition, as this (now rather old) article from the New York Society of CPAs notes, \"\"many colleges and universities prepare 1098-Ts incorrectly and report tuition and related expenses inconsistently\"\". This means you should be careful to reconcile the 1098-T with your own financial records of what money you actually received and paid. When I was in grad school there was a good deal of hand-wringing and hair-pulling each year among the students as we tried to determine what relationship (if any) the 1098-T bore to the financial facts.\"", "title": "" }, { "docid": "e20a9c8c36738492aa0363c1113b6ca9", "text": "\"I'm working on similar problem space. There seems to be some working ambiguity in this space - most focus seems to be on more complex cases of income like Dividends and Capital Gains. The US seems to take a position of \"\"where the work was performed\"\" not \"\"where the work was paid\"\" for purposes of the FEIE. See this link. The Foreign Tax Credit(FTC) is applied (regardless of FEIE) based on taxes paid in the other Country. In the event you take the FEIE, you need to exclude that from the income possible to claim on the FTC. i.e. (TOTAL WAGES(X) - Excluded Income) There is a weird caveat on TOTAL WAGES(X) that says you can only apply the FTC to foreign-sourced income which means that potentially we are liable for the on-US-soil income at crazy rates. See this link.. Upon which... there is probably not a good answer short of writing your congressperson.\"", "title": "" }, { "docid": "27b9e5f5f85fe3439903cc3d99d16902", "text": "Students at college employed by the college are exempt from the FICA taxes (Social Security and Medicare). You are not exempt from federal and state income taxes, but if you are a part time employee making a small amount of money, you probably aren't projected to be paid enough between now and the end of the year to trigger the withholding. If you are concerned that your tax burden for the year will require you to send in money at tax time next year, you can estimate what your taxes will be, and if you determine that you will owe too much, you can fill out a new W-4 form with your HR department and request that additional tax be withheld.", "title": "" }, { "docid": "85794d485be3d23157e21a9378a3e00f", "text": "To start with, I should mention that many tax preparation companies will give you any number of free consultations on tax issues — they will only charge you if you use their services to file a tax form, such as an amended return. I know that H&R Block has international tax specialists who are familiar with the issues facing F-1 students, so they might be the right people to talk about your specific situation. According to TurboTax support, you should prepare a completely new 1040NR, then submit that with a 1040X. GWU’s tax department says you can submit late 8843, so you should probably do that if you need to claim non-resident status for tax purposes.", "title": "" }, { "docid": "7eac2e73f8d413f7e41d518f1fd205ce", "text": "\"You may be considered a resident for tax purposes. To meet the substantial presence test, you must have been physically present in the United States on at least: 31 days during the current year, and 183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count: All of the days you were present in the current year, and One-third of the days you were present in the first year before the current year, and One-sixth of the days you were present in the second year before the current year. If you are exempt, I'd check that ending your residence in Germany doesn't violate terms of the visa, in which case you'd lose your exempt status. If you are certain that you can maintain your exempt status, then the income would definitively not be taxed by the US as it is not effectively connected income: You are considered to be engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant on an \"\"F,\"\" \"\"J,\"\" \"\"M,\"\" or \"\"Q\"\" visa. The taxable part of any U.S. source scholarship or fellowship grant received by a nonimmigrant in \"\"F,\"\" \"\"J,\"\" \"\"M,\"\" or \"\"Q\"\" status is treated as effectively connected with a trade or business in the United States. and your scholarship is sourced from outside the US: Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. I would look into this from a German perspective. If they have a rule similiar to the US for scholarships, then you will still be counted as a resident there.\"", "title": "" }, { "docid": "e60c76c4257a2b9514250cba964fb1e6", "text": "I believe it's not only legal, but correct and required. A 1099 is how a business reports payments to others, and they're required by the IRS to send them for payments of $600 or more (for miscalleneous payments like this). The payment is an expense to the landlord and income to you, and the 1099 is how that's documented (although note that if they don't send you a 1099, it's still income to you and you still need to report it as such). It's similar to getting a 1099-INT for interest payments or a 1099-DIV for dividend payments. You'll get a 1099-MISC for a miscellaneous payment. If you were an employee they'd send you a W-2, not a 1099.", "title": "" }, { "docid": "0eb36cb23e54bb663852701290267fcd", "text": "My two-cents, read your plan document or Summary Plan Description. The availability of in-service withdrawals will vary by document. Moreover, many plans, especially those compliant with 404(c) of ERISA will allow for individual brokerage accounts. This is common for smaller plans. If so, you can request to direct your own investments in your own account. You will likely have to pay any associated fees. Resources: work as actuary at a TPA firm", "title": "" } ]	fiqa
b493b330baa676b50da2d4f4c0025081	Why are there so many stock exchanges in the world?	[ { "docid": "9afa9a63cbedc37a3769f61c1b6654ad", "text": "\"Nearly every country has its own exchange because so many countries have their own currency, and currency permeates every part of an exchange's business. Generally, an exchange will support transaction and settlement only in local currency. Securities (except those that explicitly enable FX trading) are denominated and will trade in a single currency-- you can only buy a share of IBM in U.S. dollars. Securities trading always seeks to be a clean, frictionless, scalable process, and adding cross-currency translation to the mix would just complicate things. So it's one exchange, one currency. In most countries, citizens and even businesses are largely restricted to having bank accounts in local currency. There are various political reasons for this, but there it is: it is difficult or impossible to open a domestic bank account in a foreign-denominated currency. A public company headquartered in a given country will be required to publish financial statements in local currency, will be more likely to do business with the local citizenry and businesses in that currency, and so will likely look for investors from that same pool-- which generally means listing in local currency, which means on an exchange in that country. There are exceptions, of course. Big multinationals do business all over the world, and many seek investors all over the world as well. Mechanisms have been created to permit this (American Depositary Receipts or ADRs, for example). But once again, cross-currency translation makes things more complicated, so ADRs and their like are only practical for very big international players. As to why there may be many exchanges in a single country, IMO Nick R has it right. Read \"\"Flash Boys\"\"; many market makers profit from trading between exchanges, and so have an interest in there being many of them. And in the U.S., regulators have expressed an interest in \"\"innovation\"\" in the exchange space, and so permit them. There is also an argument to be made against having a single \"\"Too Big To Fail\"\" exchange just like the argument for banks, but I wouldn't call that a \"\"reason\"\" for the current state of affairs.\"", "title": "" }, { "docid": "19b8fefc80b1480b222601567516f7e6", "text": "Stock exchanges have been undergoing a period of consolidation for the past hundred years for the exact reasons you mentioned. The existence of digital trading, harmonized laws and regulations, and fewer relevant currencies have made it more practical for mergers and acquisitions between exchanges. Stock exchanges are most often times private companies that compete with other exchanges, so that also promotes the existence of many exchanges.", "title": "" }, { "docid": "e2df1f883c931101ae884951adcb3ebc", "text": "\"Why are there so many stock exchanges in the world? The simple answer is that there is a lot of money to be made by charging fees to facilitate the trading of securities, but there are other factors at play here relating to new technologies. Trading volumes have increased rapidly in recent years. According to this ITG data, in 1997, 6.5 billion shares were traded on US exchanges. By 2015 this number had increased to 40.8 billion shares. There are a number of reasons for this rapid increase in volumes. Most significant would be the introduction of new technologies that allow for high volume, high frequency trading. This increase in activity has be accompanied by an increase in the number of stock exchanges. As CQM points out in his answer, there has been considerable consolidation in the ownership of \"\"legacy\"\" exchanges. For example, the NYSE merged with EuroNext in 2007, and the combined group is now owned by the Intercontinental Exchange, which also owns numerous smaller stock exchanges as well as a number of derivative/commodities exchanges. However, this consolidation in ownership has been more than matched by the creation of many \"\"virtual\"\" exchanges. In North America these virtual exchanges are called \"\"Alternative Trading Systems\"\". In Europe, they are called \"\"Multilateral Trading Facilities\"\". These new virtual exchanges, sometimes referred to as \"\"dark pools\"\", have begun to significantly eat away at the volumes of the legacy exchanges. If you look at the ITG data (linked above), you will see that the total volume of shares traded on legacy exchanges actually peaked in 2008, and has since then has decreased. This coincides roughly with the appearance of the virtual exchanges and the new high frequency trading methods. According to this paper from the SEC site, dated 2013, Alternative Trading Systems accounted for 11.3% of total volumes in 2012. This will have increased rapidly in the years since 2012. It is this loss of business that has prompted the consolidation in the ownership of the legacy exchanges. These new exchange are \"\"conceptually the same\"\" as the legacy exchanges and must play by the same regulatory rules.\"", "title": "" } ]	[ { "docid": "4048f622462175257b20a025cffe2227", "text": "The total value of the stock market more or less tracks the total value of the companies listed in the stock market, which is more or less the total value of the US economy (since very few industries are nationalized or dominated by privately held companies). The US economy has consistently grown over time, thanks to the wonders of industrialization, the discovery of new markets, new natural resources, etc. Thus, the stock market has continued to grow as well. Will it forever? No. The United States will not exist for ever. But there's no obvious reason it won't continue to grow, at least for a while, though of course if I could accurately predict that I would be far richer than I am. Why do other countries not have the same result? China is its own ball of wax since it's a sort-of-market-sort-of-command economy. Japan has major issues economically right now and doesn't really have the natural or people resources; it also had a huge market bubble a while back that it's never recovered from. And many European countries are doing fine. German's DAX30 index was at around 2500 in 2004 and is now at nearly 13000. That's pretty fast growth. If you go back further (there was a crash ending in around 2004), you can see around the fall of the Berlin wall it was still around 2000; even going that far back, that's about an 8% annual bump. The FTSE was also around 2000 back then, around 8000 now, which is around 5% annual growth. Many of these indexes were more seriously hurt than the US markets in the two major crashes of this millenium; while the US markets fell a lot in 2008, they didn't fall nearly as much as many smaller markets in 2002, so had less to recover from. Both DAX and FTSE suffered similar falls in 2002 to 2008, and so even though during good periods they've grown quite quickly, they haven't overall done as well as they could have given the crashes.", "title": "" }, { "docid": "b032ce2063c3d7d8952a3ba8ebc1121a", "text": "You don't have to go through an exchange. That wasn't the problem. It was that the people trading on them wouldn't be willing to take your offer. An exchange can't just list a company. They need that company's consent and the company need's the exchange's consent. I don't know if you're aware of this but that was also an entirely new disaster during Facebook's IPO. Computer glitches didn't help. What you're talking about is a called a secondary market, kind of. Stock exchanges offer those too, especially for options. That's the typical stock footage you see of guys on wall street yelling and screaming while throwing paper up in the air.", "title": "" }, { "docid": "d8b1c36e5d1791682dd0255c1fe4c7d4", "text": "I don't know why stocks in some industries tend to have lower prices per share than others. It doesn't really matter much. Whether a company has 1,000,0000 shares selling for $100 each, or 10,000,000 shares selling for $10 each, either way the total value is the same. Companies generally like to keep the share price relatively low so that if someone wants to buy a small amount, they can. Like if the price was $10,000 per share, than an investor with less than $10,000 to put in that one stock would be priced out of the market. If it's $10, then if someone wants $10 they can buy one share, and if someone wants $10,000 they can buy 1000 shares. As to why energy stocks are volatile, I can think of several reasons. One, in our current world, energy is highly susceptible to politics. A lot of the world's energy comes from the Middle East, which is a notoriously unstable region. Any time there's conflict there, energy supplies from the region become uncertain. Oil-producing countries may embargo countries that they don't like. A war will, at the very least, interfere with transportation and shipping, and may result in oil wells being destroyed. Etc. Two, energy is consumed when you use it, and most consumers have very limited ability to stockpile. So you're constantly buying the energy you need as you need it. So if demand goes down, it is reflected immediately. Compare this to, say, clothing. Most people expect to keep the same clothes for years, wearing them repeatedly. (Hopefully washing them now and then!) So if for some reason you decided today that you only need three red shirts instead of four, this might not have any immediate impact on your buying. It could be months before you would have bought a new red shirt anyway. There is a tendency for the market to react rather slowly to changes in demand for shirts. But with energy, if you decide you only need to burn 3 gallons of gas per week instead of 4, your consumption goes down immediately, within days. Three, really adding to number two, energy is highly perishable, especially some forms of energy. If a solar power station is capable of producing 10 megawatts but today there is only demand for 9 megawatts, you can't save the unused megawatt for some future time when demand is higher. It's gone. (You can charge a battery with it, but that's pretty limited.) You can pile up coal or store natural gas in a tank until you need it, but you can't save the output of a power plant. Note numbers two and three also apply to food, which is why food production is also very volatile.", "title": "" }, { "docid": "68091295b7fb6720774adf3dda051fda", "text": "It might be easiest to think of stock exchanges like brokers. If you buy a home, and your broker goes bankrupt, you still own your home, but you could not sell it without the aid of another broker. Same with stocks, you own the stocks you buy, but you would be unable to either purchase new stocks or sell your stock holdings without an exchange.", "title": "" }, { "docid": "27c4e69d2f392f68687ad026b2b9ae91", "text": "The stock market's principal justification is matching investors with investment opportunities. That's only reasonably feasible with long-term investments. High frequency traders are not interested in investments, they are interested in buying cheap and selling expensive. Holding reasonably robust shares for longer binds their capital which is one reason the faster-paced business of dealing with options is popular instead. So their main manner of operation is leeching off actually occuring investments by letting the investors pay more than the recipients of the investments receive. By now, the majority of stock market business is indirect and tries guessing where the money goes rather than where the business goes. For one thing, this leads to the stock market's evaluations being largely inflated over the actual underlying committed deals happening. And as the commitment to an investment becomes rare, the market becomes more volatile and instable: it's money running in circles. Fast trading is about running in front of where the money goes, anticipating the market. But if there is no actual market to anticipate, only people running before the imagination of other people running before money, the net payout converges to zero as the ratio of serious actual investments in tangible targets declines. By and large, high frequency trading converges to a Ponzi scheme, and you try being among the winners of such a scheme. But there are a whole lot of people competing here, and essentially the net payoff is close to zero due to the large volumes in circulation as opposed to what ends up in actual tangible investments. It's a completely different game with different rules riding on the original idea of a stock market. So you have to figure out what your money should be doing according to your plans.", "title": "" }, { "docid": "81e3c658b4c1ad494a06e67bc0a6de25", "text": "Non-electronic stock exchanges still exist because they used to exist. There are a lot of people in trading firms who grew up with floor trading and don't want to give it up, either because they feel more comfortable with it or because they might lose their job if they went away from it.", "title": "" }, { "docid": "f59f4442413d1763b8006e17302d92bb", "text": "The reason a company creates more stock is to generate more capital so that this can be utilized and more returns can be generated. It is commonly done as a follow on public offer. Typically the funds are used to retire high cost debts and fund future expansion. What stops the company from doing it? Are Small investors cheated? It's like you have joined a car pool with 4 people and you are beliving that you own 1/4th of the total seats ... so when most of them decide that we would be better of using Minivan with 4 more persons, you cannot complain that you now only own 1/8 of the total seats. Even before you were having just one seat, and even after you just have one seat ... overall it maybe better as the ride would be good ... :)", "title": "" }, { "docid": "992515091016e92c23ab724308d91cbb", "text": "\"There are people (well, companies) who make money doing roughly what you describe, but not exactly. They're called \"\"market makers\"\". Their value for X% is somewhere on the scale of 1% (that is to say: a scale at which almost everything is \"\"volatile\"\"), but they use leverage, shorting and hedging to complicate things to the point where it's nothing like a simple as making a 1% profit every time they trade. Their actions tend to reduce volatility and increase liquidity. The reason you can't do this is that you don't have enough capital to do what market makers do, and you don't receive any advantages that the exchange might offer to official market makers in return for them contracting to always make both buy bids and sell offers (at different prices, hence the \"\"bid-offer spread\"\"). They have to be able to cover large short-term losses on individual stocks, but when the stock doesn't move too much they do make profits from the spread. The reason you can't just buy a lot of volatile stocks \"\"assuming I don't make too many poor choices\"\", is that the reason the stocks are volatile is that nobody knows which ones are the good choices and which ones are the poor choices. So if you buy volatile stocks then you will buy a bunch of losers, so what's your strategy for ensuring there aren't \"\"too many\"\"? Supposing that you're going to hold 10 stocks, with 10% of your money in each, what do you do the first time all 10 of them fall the day after you bought them? Or maybe not all 10, but suppose 75% of your holdings give no impression that they're going to hit your target any time soon. Do you just sit tight and stop trading until one of them hits your X% target (in which case you start to look a little bit more like a long-term investor after all), or are you tempted to change your strategy as the months and years roll by? If you will eventually sell things at a loss to make cash available for new trades, then you cannot assess your strategy \"\"as if\"\" you always make an X% gain, since that isn't true. If you don't ever sell at a loss, then you'll inevitably sometimes have no cash to trade with through picking losers. The big practical question then is when that state of affairs persists, for how long, and whether it's in force when you want to spend the money on something other than investing. So sure, if you used a short-term time machine to know in advance which volatile stocks are the good ones today, then it would be more profitable to day-trade those than it would be to invest for the long term. Investing on the assumption that you'll only pick short-term winners is basically the same as assuming you have that time machine ;-) There are various strategies for analysing the market and trying to find ways to more modestly do what market makers do, which is to take profit from the inherent volatility of the market. The simple strategy you describe isn't complete and cannot be assessed since you don't say how to decide what to buy, but the selling strategy \"\"sell as soon as I've made X% but not otherwise\"\" can certainly be improved. If you're keen you can test a give strategy for yourself using historical share price data (or current share price data: run an imaginary account and see how you're doing in 12 months). When using historical data you have to be realistic about how you'd choose what stocks to buy each day, or else you're just cheating at solitaire. When using current data you have to beware that there might not be a major market slump in the next 12 months, in which case you won't know how your strategy performs under conditions that it inevitably will meet eventually if you run it for real. You also have to be sure in either case to factor in the transaction costs you'd be paying, and the fact that you're buying at the offer price and selling at the bid price, you can't trade at the headline mid-market price. Finally, you have to consider that to do pure technical analysis as an individual, you are in effect competing against a bank that's camped on top of the exchange to get fastest possible access to trade, it has a supercomputer and a team of whizz-kids, and it's trying to find and extract the same opportunities you are. This is not to say the plucky underdog can't do well, but there are systematic reasons not to just assume you will. So folks investing for their retirement generally prefer a low-risk strategy that plays the averages and settles for taking long-term trends.\"", "title": "" }, { "docid": "bb40365ea193ef944818cd92378da144", "text": "He said he's using MSCI World as a benchmark. MSCI World is not an exchange. The point is the same security listed in different places has different prices, so how do you describe the equity beta of the company to MSCI World if you have multiple and different return streams? This is a real problem to consider and you just dismiss it entirely.", "title": "" }, { "docid": "f59842b4cc87ff6f7e622e7c1b8a5f5e", "text": "\"Pay to play? You mean they pay for beefier data feeds that other firms don't need, sure they do. But everyone can trade on the US exchanges now (NYSE, NASDAQ, BATS, etc) which was not true 20 years ago when NYSE had the specialist monopoly, so yes the markets are more democratic than they've ever been. Side note, the exchanges do directly profit from increased trading volume because they take a small % of every trade, so I'm not sure what you mean they don't directly profit from it. Also I get the feeling you don't understand the scope of HFT activity, HFT peak profits were on the order of 7 billion during the highest volume time of the last decade (2005-2010). They are now around 1B. Compared to the trillions of dollars that change hands in the exchange per year, this is chump change, hardly a \"\"free money faucet\"\". Also Katsayuma opened yet another dark pool that caters to high volume clients (your goldmans and merrils). The only difference in IEX is it got a free marketing campaign to entice clients. Seriously, IEX is nothing more than the existing fixed cross dark pools, which btw screws over retail investors more than the lit exchanges like NASDAQ. Katsayuma got steamrolled in his executions because he couldn't keep up with the time and then hit the lottery jackpot by getting Michael Lewis to paint him as a \"\"hero\"\", honestly I'm confounded at how lucky that dude got. BTW broker dealers get preferential treatment in IEX, meaning they get to cut in front of the line in front of retail investors. Why are you so opinionated about this, did you make a few bad trades on eTrade and need a scapegoat?\"", "title": "" }, { "docid": "4c6b17bfa485445555a5611682e477de", "text": "The suffix represents the stock exchange the stock is traded on. N represents the New York Stock Exchange and O represents the Nasdaq. Sometimes a stock can be listed on more than one exchange so the suffix will give you an indication of which exchange the stock is on. For example the Australian company BHP Billiton Ltd is listed on multiple exchanges so is given a different suffix for the different exchanges (especially when the code is the same for each exchange). Below are a few examples of BHP:", "title": "" }, { "docid": "2827cf778c230ac62baa016936a44c42", "text": "Serious answer: If 7 banks owned the vast majority of houses for sale -- that is, on their balance sheet, at the peak of the housing bubble -- there would be. These 7 LCD companies produced the majority of LCDs globally. Real estate is far more decentralized, and in many times the bank merely provided financing for a third-party sale (from the builder, from any one of a hundred or so real estate companies, etc). (But I am assuming you probably weren't looking for a factual answer, anyway.)", "title": "" }, { "docid": "5d354ffcba653ace3f0d5f2d49614d2d", "text": "First and foremost you need to be aware of what you are comparing. In this case, HSBC as traded on the NYSE exchange is not common shares, but an ADR (American Depository Receipt) with a 5:1 ratio from the actual shares. So for most intents and purposes owning one ADR is like owning five common shares. But for special events like dividends, there may be other considerations, such as the depository bank (the institution that created the ADR) may take a percentage. Further, given that some people, accounts or institutions may be required to invest in a given country or not, there may be some permanent price dislocation between the shares and the ADR, which can further lead to discrepancies which are then highlighted by the seeming difference in dividends.", "title": "" }, { "docid": "14117e82a174430358141e8f5bc52d22", "text": "You must understand that: So, if you -- the prospective buyer -- are in Waukegan, do you take the train all the way to New York City just to buy 100 shares of stock? No. That would be absurdly expensive. So, you hire an agent in NYC who will broker a deal for you in the exchange. Fast forward 100 years, to the time when instant communications is available. Why do we now still need brokerages, when the Exchanges could set up web sites and let you do the trading? The answer is that the Exchanges don't want to have to develop the accounting systems to manage the transactions of hundreds of thousands of small traders, when existing brokerage firms already have those computerized processes in place and are opening their own web sites. Thus, in 2017 we have brokerage firms because of history.", "title": "" }, { "docid": "4d9775c0ff085d4d7023a275e8706142", "text": "\"A huge amount of money in all financial markets is from institutional investors, such as mutual funds, government pension plans, sovereign wealth funds, etc. For various reasons these funds do all of their trading at the end of the day. They care primarily that their end-of-day balances are in line with their targets and are easy to audit and far less about \"\"timing the market\"\" for the best possible trades. So, if you're looking at a stock that is owned by many institutional investors -- such as a stock (like AAPL) that makes up a significant portion of an index that many funds track -- there will be a huge amount of activity at this time relative to stocks that are less popular among institutions. Even just in its introduction this paper (PDF) gives a fair overview of other reasons why there's a lot of trading at end-of-day in general. (In fact, because of all this closing activity and the reliance on end-of-day prices as signposts for financial calculations, the end-of-day has for decades been the single most fraud-ridden time of the trading day. Electronic trading has done away with a lot of the straight-up thievery that floor traders and brokers used to get away with at the expense of the public, but it still exists. See, for example, any explanation of the term banging the close, or the penalties against 6 banks just last month for manipulating the FX market at the close.)\"", "title": "" } ]	fiqa
93fa754dd29e3aeaf3129fb1bd52250d	Are large companies more profitable than small ones?	[ { "docid": "588c6dd2a52de1016e17691809f23a2c", "text": "\"There is no general theory to support the notion that larger companies will be more profitable than smaller companies. Economies of scale are not always positive, one can have diseconomies of scale too. It is more common to talk about an optimal firm size, even going back to Stigler's (1958) \"\"The Economies of Scale.\"\" Intuitively, if economies of scale extended indefinitely, then natural monopolies would dominate all industries in the long run. A profit ratio, unfortunately, wouldn't quite get at scale economies. Consider, for example, that the denominator of your metric would be profit+cost and that you are trying to get at the cost reduction that derives from scale. Then, you are measuring the size of a company by the exact metric that should be reduced if scale economies exist, so the calculation would be a bit confounded. It is my understanding that such assessments are usually conducted at the industry level by determining whether the industry is becoming increasingly concentrated among fewer firms over time. (Again see Stigler). If concentration is increasing, there is an implication that, at current firm sizes, there are economies of scale in the industry.\"", "title": "" }, { "docid": "eb87c7f991935f3e133dc34eafb8e586", "text": "\"This isn't as rigorous as it should be, but may offer some useful insight into how big and small companies differ operationally. Putting Apple aside, larger companies tend to sell larger volumes of products (even if they're MRI devices, or turbines) relative to what smaller companies can sell (obviously, in absolute terms as well). They are also able to negotiate volume discounts as well as payment terms. This allows them to finance sales through their supply chain. However, their large direct competitors are able to do the same thing as well. Competitive forces then drive prices down. Smaller businesses, without these advantages of scale, tend to have to charge higher margins since they have to pay directly (and, if their clients are large businesses, finance the sale). Small businesses still have higher proportional costs of operation. Sadly, my reference here is a study I performed for the South African Revenue Service about ten years ago, and not available online. However, the time taken by a small business to manage admin, tax, HR is a greater proportion of revenue than for larger companies. If the small business is a start-up with big investment from venture finance, then they could subsidise their selling price, run at a loss and try and gain scale. Funnily enough, there is a fantastic article on this by Joel Spolsky (Ben and Jerry's vs. Amazon) For the average highly-competitive smaller company, the best choice is to chase design/quality/premium markets in order to justify the higher margins they have to charge. And that's what makes Apple interesting as a case study. They were a small company in the presence of giants (Intel, Microsoft, IBM). They were \"\"forced\"\" to concentrate on design and premium markets in order to justify their need for higher margins. It almost didn't work but then they broke through. Now they're in the unique position of having gained scale but are still small enough relative to other electronics manufacturers to continue charging that premium (by volume their sales are still relatively small but their margins make them a giant). This type of variation from market to market makes developing some sort of generalised solution very unlikely but the general requirement holds: that smaller companies must charge higher margins in order to create equivalent profits to larger companies which must gain scale through volume.\"", "title": "" }, { "docid": "9dddb677de82e42ec770d23f1c7fe059", "text": "Small companies could have growth prospects. Large companies may not have that many. So look at ROE of companies by quatile to determine which companies have better growth.", "title": "" } ]	[ { "docid": "8e4671bd2d50e27b9b831bf249dd2bf3", "text": "I agree, I am a small business owner. But my original point is that companies large and small got to pay low rates for almost a decade now. And they profited from it. economics tell you that it will swing back eventually. Conceptually you may have to pay more, you may have to charge more, but your clients are probably making more.", "title": "" }, { "docid": "88bbaaa1f478d2d0a6c1994996a4e34d", "text": "Twitter (and Facebook) are media companies. They make money selling (user generated) content to advertisers. To do this affectively, they need people on the ground in each market who speak the language and know the local customs. If your question is why don't they make larger profits, is this their focus? Growth is THE major factor in stock price for a startup / newly floated company.", "title": "" }, { "docid": "db351fb142066f802e9dfed69b44acb6", "text": "In the scenario you describe, the first thing I would look at would be liquidity. In other words, how easy is it to buy and sell shares. If the average daily volume of one share is low compared to the average daily volume of the other, then the more actively traded share would be the more attractive. Low volume shares will have larger bid-offer spreads than high volume shares, so if you need to get out of position quickly you will be at risk of being forced to take a lowball offer. Having said that, it is important to understand that high yielding shares have high yields for a reason. Namely, the market does not think much of the company's prospects and that it is likely that a cut in the dividend is coming in the near future. In general, the nominal price of a share is not important. If two companies have equal prospect, then the percentage movement in their share price will be about the same, so the net profit or loss you realise will be about the same.", "title": "" }, { "docid": "d36e0205b0ac8c7e297c5ca82ec01fd2", "text": "The parent company is likely to own other assets, which can be badly performing. Spinoffs are typically the better performers. There are also other factors, for example certain big funds cannot invest in sectors like tobacco or defense and for conglomerates it makes sense to spin those assets off to attract a wider investor audience.", "title": "" }, { "docid": "4ed57c04ebace079b2c46549a314472d", "text": "There are many reasons but perhaps the most telling is that these small foreign companies usually have not experienced diminishing marginal returns. This means they grow faster, which means higher returns for investment. However a lack of infrastructure, and of political and economic stability, make these investments risky!", "title": "" }, { "docid": "96387f55bb095db0193bdbe95e7499a8", "text": "\"The \"\"coin flip\"\" argument made in the article is absurd. My old boss had a saying, \"\"the harder I work, the luckier I get.\"\" He came from nothing, worked maniacally to become an Olympian, and later in life became a multi-millionaire. This is a common story among self-made people. I DO think that the rich have significant advantages: education, contact networks, access to startup capital, etc. These are very helpful, but don't assure success. Their lack is not insurmountable by the ambitious. I also think those advantages have expanded in recent years. Monetary policy has resulted in a large pool of investable funds being made available to to the financial sector, who earn high incomes with rent-seeking tactics.\"", "title": "" }, { "docid": "019c562381dbf07dddf134fca21b2b8a", "text": "To build off of this, they also generally have logistics and distribution in place already. When a smaller company makes a product that people can't get enough of, the small company has problems scaling up fast enough. The big company has scale, the small company has the right product. Put them together, and 1+1=3", "title": "" }, { "docid": "a26a00ac9aeb9b8f04f1f97a152a9542", "text": "Market capitalization is one way to represent the value of the company. So if a company has 10 million shares, which are each worth $100, then the company's market capitalization is 1 billion. Large cap companies tend to be larger and more stable. Small cap companies are smaller, which indicates higher volatility. So if you want more aggressive investments then you may want to invest in small cap companies while if you lean on the side of caution then big cap companies may be your friend.", "title": "" }, { "docid": "adc6e15089c8a3f5d3ae3a5805a15a08", "text": "In a well-managed company, employees bring more dollars to their employers than the employers pay the employees (salary and benefits). Employees trade potential reward for security (a regular paycheck). Employers take on the risk of needing to meet payroll and profit from the company's income, minus expenses. The potential rewards are much higher as an employer (self or otherwise), so the ones that do make it do quite well. But this is also consistent with your other statement that the reverse is not true; the risk of self-employment is high, and many self-employed people don't become millionaires.", "title": "" }, { "docid": "5adacefbe232ae2fdb5061c62d1ea13b", "text": "This is an interesting discussion. I've never been a part of a large corporation, but aren't these functions good for morale. If they gripe about saving money, and then cut all the employees functions becoming the most uncaring and dispassionate company in all of companydom, wouldn't that also kill productivity?", "title": "" }, { "docid": "bf6022bc93687e36f52a30b212aea8d4", "text": "I think it's safe to say that Apple cannot grow in value in the next 20 years as fast as it did in the prior 20. It rose 100 fold to a current 730B valuation. 73 trillion dollars is nearly half the value of all wealth in the world. Unfortunately, for every Apple, there are dozens of small companies that don't survive. Long term it appears the smaller cap stocks should beat large ones over the very long term if only for the fact that large companies can't maintain that level of growth indefinitely. A non-tech example - Coke has a 174B market cap with 46B in annual sales. A small beverage company can have $10M in sales, and grow those sales 20-25%/year for 2 decades before hitting even $1B in sales. When you have zero percent of the pie, it's possible to grow your business at a fast pace those first years.", "title": "" }, { "docid": "2776ed9cfdd28deaf526993369bf1308", "text": "It depends on which of the big4. Some of them have more revenue and profit from consulting than from audit. Specifically, some of the big4 have failed at growing their consulting business to be competitive with the consulting arms of other firms and/or sold off their consulting groups and are in the process of rebuilding.", "title": "" }, { "docid": "d367c0b197e4d2b19fdd9f60cb97c426", "text": "Of course you wouldn't, and of course data is incredibly important. What I'm saying is that you at least have access to rudimentary data about what people are interested in, public data sources, etc that didn't even exist in the past. In the past, small businesses were flying incredibly blind. The data small businesses do have access to today didn't even exist except in either very expensive data collection firms or in hard to get physical records in the past. A small company is never going to have the resources of a large one - at any point in history", "title": "" }, { "docid": "ec3898a025bd61dafe6b6459d27b46c0", "text": "Of course it's more difficult to grow profits now after they've been having record profits. It's hard to beat the record. Their strategies have been cut salaries in exchange for lowering costs and making higher profits. But when EVERY company cuts salaries, who is left with enough disposable income to buy the products?", "title": "" }, { "docid": "fba48783c305d72d6c1464d65e0f9cd2", "text": "And the truth of the matter is that the majority of entrepreneurs are rich only because they are lucky. Strangely none of them are prepared to admit this either. See if you throw enough mud at a wall, eventually some of it will stick. And if 20,000 people start a business, then most will fail, but some will succeed, and some will go through the roof. The business acumen of the directors is sometimes capable of making a business MORE successful than it otherwise would be, but mostly, it's down to luck.", "title": "" } ]	fiqa
6f9d970cdb0de4e16cea5f9e6b27b95d	Gap in domestic Health Insurance coverage, expect higher premiums?	[ { "docid": "0d5f1455758d9b22e82fe037b6ccc6f3", "text": "The insurance company is must assume you do have a preexisting condition you are unaware of. The reason for that is that Affordable Care Act precludes the Insurance company from denying coverage of them if you do. Insurance companies are businesses. They are in business to make money(unless you have a nonprofit insurer). They can not do that if you can buy insurance only when you need for them to pay out. So even though you may not have a preexisting condition, they are precluded from requiring an examination that would detect the most expensive preexisting conditions (hidden cancers, neurological, autoimmune disorders). So the companies must do what takes business sense and either deny you coverage or charge a rate that covers the risk they would be forced to take. In your question on travel there was a response that suggested you get international health insurance instead of travel health insurance that would be considered credible coverage. You are trying to save money which on a personal level is a good idea. However that is against the societal and business need that you maintain health coverage during your healthy times to cover the costs of those who need expensive treatment. So you will be monetarily penalized should you choose to reenter the society of insured people. Once you have paid the higher rate for up to 18 months you should be able to get a better policy for people who have had continuous coverage. Alternately you may be lucky enough to start working for a company that provides health insurance with out requiring continuous coverage.", "title": "" }, { "docid": "8c8ca4077f27a86a88ff81a4d00b991b", "text": "I bought Health Insurance for myself after a period without it, and my premiums were not terrible. I was a 27 year old man, living in California, no preexisting conditions, and I paid approximately 90$ a month. This was for a standard Health Insurance plan. However, when I moved back to NY a little while later, insurance companies wanted almost $500/month for catastrophic coverage. So, from personal experience, my answer is that price varies widely by state. Different states have different regulations as to what Health Insurance Companies need to cover and at what price. In NY, Health Insurance companies can't charge different rates according to age. Also, in NY, there is a price spiral, where the price is so high, few people buy it, so they have to raise the price because not enough well people are in the pool, so fewer people buy it.... To test it out, go to an online insurance broker, like ehealthinsurace, and put in your proposed information, including that you haven't been covered for a period. This way you will know.", "title": "" } ]	[ { "docid": "8ab61e568e38627d9eac8f57dda56b28", "text": "\"It seems like if that were true, then if everyone were in one group, you'd get the biggest discount of all. My preference has been for single payer, but recently I saw a guy suggesting single-group, multi-payer, or SGMP. This was just a comment from a physician in a medical journal, and I don't have the link and haven't been able to find out anything more about it, but it seems intriguing. It had something to do with insurance companies bidding to provide coverage services. edit: [Here it is](http://www.nejm.org/doi/full/10.1056/NEJMp1211514#t=comments): > JOEL SPALTER, MD \| Physician - Infectious Diseases \| Disclosure: None > FAYETTEVILLE AR > October 02, 2012 > Single Group Multi-Payer > True reform resulting in universal health insurance and access to care is achieved by state mandates for insurance with replacement of individual or group underwriting with underwriting by \"\"Dutch auction\"\" for a percentage of the single group consisting of all of the residents of a State – Single Group – Multi-Payer (SGMP). Each successful insurance company would be responsible for payment of the percentage of the total costs for medical services equal to the percentage of the population insured. This preserves the integrity of the bidding process. > States are free to establish the public contribution to premiums. SGMP prevents exclusion of insurance for pre-existing conditions or due to genetic background, absent individual underwriting; guarantees maintenance of health care insurance independent of place, or even existence of employment; assures equality of access to providers due to a single established remuneration scale; and assures patients' choice of providers free from any empanelling by insurance companies. Market forces will govern providers' attempts to gain and hold market share. > A single group eases statistical comparison, with EMR, of 50, State patterns of care.\"", "title": "" }, { "docid": "9f30b8c0051a86ccbe58cdf955df9ad6", "text": "\">If you have more people in an insurance pool, premium costs go down, which is the whole point of the individual mandate. The costs depend very, Very, VERY much on WHO the people in the \"\"pool\"\" are -- actuarial data shows that older people (almost invariably and by definition) have significantly higher costs, ergo this is why their premiums have been higher (or if a particular pool has an inordinate number of older people in it, why everyone in that pool's premiums are higher, because they are essentially an average; and the younger members are in essence subsidizing the older ones -- conversely if a firm has almost entirely young, single people, premium costs are significantly {significantly} lower). One of the things the legislation does though is place an artificial limitation of the premium price differential -- ergo younger people will (across the board) be seeing a HUGE increase in premium costs (because the law is essentially mandating a major increased operating LOSS on the older pool members, the cost WILL be shifted to the younger people). End result is that premiums for younger people will increase several times over -- which will make buying a policy (which in the past was relatively cheap for young & healthy people) a significantly more difficult burden -- and that will naturally make paying the \"\"fine\"\" far more financially pragmatic. This is especially true since the OTHER provision of the law is that known pre-existing conditions cannot be used to exclude or change the premium cost -- so, should the individual be diagnosed with something they can, after the fact, still purchase coverage. Basically it is like being able to buy a lottery ticket AFTER the number have been drawn. It is an inherently unstable and unsustainable system.\"", "title": "" }, { "docid": "8ce2cb038987b99f545b6709add10e79", "text": "\"This is only partly true. The main problem is that the average person is not a fully informed healthcare consumer. For example if you go to your local doctor with lower back pain: One doctor might prescribe a whole bunch of expensive diagnostics tests; another might tell you to go to a physiotherapist; and yet another might tell you to take some cheap pain killers and come back in six weeks time if nothing has changed. Most people will have no way of knowing which is the best course of action. Then, in a country like the US which is very litigiousness, all the doctors will recommend the most comprehensive and expensive care-package so that they don't get sued. Ultimately economists do not work in healthcare and are not qualified to recommend the best financial model for healthcare delivery. To quote Donney \"\"Who knew that healthcare was so complicated?\"\" certainly not the economists.\"", "title": "" }, { "docid": "498dd9364752e5929bcfce248a0e04f3", "text": "An article linked from cnn.com has some great advice, which I think are good rules of thumb. Also, at least my insurance gives a premium price for those who haven't filed a claim in 5 or more years for homeowners or rental insurance. See if you have a similar discount, will loose it, and guess how much that will cost you over 5 years. My rule of thumb: Your premium might go up quite a bit, possibly as much as triple, especially for a large claim. But, it is certainly worth it if you are going to get more than triple your premium through your claim. The worst case: Mortgage mandated insurance, which will be about triple your current cost.", "title": "" }, { "docid": "1cea69d97c37b6f5dd989a2c3e02b1be", "text": "Health insurance is tough, as you know, because the offerings vary dramatically by State, and there is the added complication of the Affordable Care Act, which depending on where and who you are has had either a good or bad impact on the available options. If you are a sole proprietor or other business person, I'd advise talking to someone at a local chamber of commerce. Also, professional organizations like the IEEE or ACM (for IT professionals) often offer catastrophic medical or other health plans. Some employer plans give you the option to continue coverage at a higher cost when COBRA lapses as well. If you can't afford a comprehensive plan, make sure to get something to protect you against pre-existing conditions or hospitalization.", "title": "" }, { "docid": "65ecdd0c503f0f64599c176748fe89df", "text": "At some point, there will even be non wealthy nations with better healthcare. Anyone who is well travelled, or from another country knows how horrific the US healthcare system is. The media talks about poor people, but it's awful for the middle to upper middle class too in comparison to alternatives. It constantly shocks me this is not a bigger public issue. If only the general population realized what the alternative looks like. Not perfect by any means, but so much better.", "title": "" }, { "docid": "ed4b855ba8358889dad8e7d020ee3190", "text": "\"This is the best tl;dr I could make, [original](https://www.aier.org/blog/academics-lift-veil-medical-protectionism) reduced by 79%. (I'm a bot) *** > In 2011 a total of 538 items required a CON license, and 37 states were enforcing CON laws. > Non-CON states provide higher-quality services, and the costs of unregulated medical care have not risen dramatically, as claimed by proponents of CON programs. > According to him, &quot;So-called &#039;certificate of need&#039; laws increase costs for consumers by protecting inefficient hospitals and other health care providers from competition. The theory behind such laws is that since the government has completely unleashed demand by insulating consumers from the cost of their health insurance and medical care, the government must contain supply to keep spending from getting out of hand.\"\" * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/70ixsd/academics_lift_the_veil_on_medical_protectionism/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211185 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: laws^#1 CON^#2 state^#3 care^#4 Health^#5\"", "title": "" }, { "docid": "7288244b1e70bb0b665ab9461c33d128", "text": "While I can't say how it is in the Philippines, my wife the insurance broker leads me to believe that individual insurance is more expensive than group coverages in the US almost always. So much so that people will go to great extents to form any sort of business just to insure themselves. If however it is cheaper, can't you simply opt out of your employer's plan? If you can opt out, will your employer give you any of the money they aren't paying for your insurance? If you can't opt out, or if you paycheck doesn't grow, I can't see why you would want additional coverage especially at such a young age. Should you lose your job in the near future and you worry about, go get the insurance then. EDIT One big advantage is if you get personal insurance, you might need to get an exam to qualify, and it is likely the younger you are the better you will qualify. But again, you already have insurance that covers you so I would advise keeping the group policy is probably better.", "title": "" }, { "docid": "b7903f7bac6c4a5fce750be794314e88", "text": "According to Money Girl, home insurance premiums are higher if you have a poor credit score. You might self-insure though if you are wealthy.", "title": "" }, { "docid": "99e521f85fb70eeed53177745a07f388", "text": "I'm not disputing that. I just said in answer to the guy pointing out that indonesian people earn less that this price might be higher than what the locals pay. Often hospitals will have higher prices for foreigners with insurance etc. So I was actually strengthening your point.", "title": "" }, { "docid": "a1190abed12e293e1f0971f3dcd56757", "text": "This is very interesting, and I am fully in support of the US moving to a single-payer system such as we have here in the UK, but I am a little confused. US costs are markedly higher than the second most expensive country, that's clear. However, by my reading of the data presented, it seems as though no distinction is made between the government paying for health care, and the individual paying for health care. Much of that 1.4t is coming out of the individual's pocket, rather than the insurance company's, and that for me is the crux of the whole issue.", "title": "" }, { "docid": "985c27490a1fc20d8f94bcadedf22034", "text": "Unfortunately I've seen every single example you've provided from the health care providers perspective. Trust me, they aren't happy about the situation either - hence the reason they will demand up front payment from you based on who your insurance carrier is. I could name a few of the top brand name insurance companies in this country that do all of this to their clients. Medical billing is an incredibly over complicated beast. One that insurance companies have been doing everything they can to make worse over the years. The codes can change annually and there are MANY different codes which can cover the exact same situation. Sure the insurance company might cover gallstones, but if you happen to be pregnant, well, that may not covered even though the treatment is the exact same. What can you do? Consider locating a new insurance company. You do have options and don't have to go with the one your company uses. The downside is that this is going to take quite a bit of research on your part and it will end up costing you more money on your monthly premiums simply because your company won't be footing part of the bill. Talk to other co-workers and see if their experiences match yours. If so, try to get a large enough group together to approach management and demand resolution. A third potential avenue is to get politically involved - but I'm enough of a pessimist that I doubt that would do any good. From what I've seen, neither major political party's current position actually does anything to solve the problem. A fourth option is suing the insurance company - but that is going to be incredibly expensive and take forever. You might have better luck getting together with a bunch of local people and demand your attorney general review the billing/payment practices. Again, this is going to require a LOT of effort. A fifth option is to attempt to cash pay your bills and submit them yourself to the insurance company for reimbursement. If you do this you can likely negotiate lower bills with the medical provider. For anything less than about $2,000 I negotiate the amount prior to service. Believe me when I say that providers are more than happy to give decent discounts if they know they won't have to deal with the insurance companies themselves. Slightly more work for you, but could be far cheaper in the long run.", "title": "" }, { "docid": "4fee06b37c87cee42807c9ce4ebb7e58", "text": "Article was about insurers not liking the uncertainty. Some insurers want Obamacare repealed, some of them want it to stay. But they all don't want to political climate of uncertainty. A situation where people wouldn't be mandated to buy insurance because they don't fear the IRS actually requiring them, but where the actual regulations haven't been changed yet is a nightmare for insurers.", "title": "" }, { "docid": "8925381adc875542b03dff22a1c8477b", "text": "\"Not aying you're wron, but do you have any sources showing that young people's premiums will go up SEVERAL times over? I think your argument would be more convincing with numbers instead of using words like \"\"far\"\" and \"\"significantly\"\"\"", "title": "" }, { "docid": "6fd75e272894c9da2786c006793712de", "text": "Prediction: costs won't go down. The basis for that is the cost of insurance for health has never gone down in the history of that product mainly due to the fixed market. There is competition, but pricing is so rigged as health insurance companies and employers have completely removed pricing from consumers experience. Until everyone has individual/independent insurance away from their jobs, healthcare costs will never be in check. When employers gtfo of your business and stop providing benefits and people have to buy their own insurance, that is the only time there will be any real market or real pricing in healthcare/medical.", "title": "" } ]	fiqa
505dc55df0bc389cd7212fd73df59e34	When is it necessary to apply taxes for web freelancing services in Quebec, Canada?	[ { "docid": "076e0d5e64e17e91c7161a310b3c440e", "text": "\"AFAIK, there are two kinds of taxes your web freelancing income may be subject to in Quebec: On the income taxes: The net income you realize from your web freelancing activities would be considered taxable income. Assuming you are not operating as an incorporated business, you would need to declare the freelancing income on both your federal and provincial tax returns. You should be able to deduct certain costs related to your business – for instance, if you paid for software, hosting, domain name registration, etc. That is, only the profit from your business would be subject to income tax. With income and expenses arising from self-employment, you may want to use a professional to file your taxes. On the sales taxes: You may also need to charge federal GST and provincial QST (Quebec Sales Tax) on your services: You must enroll and charge GST and QST once you exceed the \"\"small supplier\"\" revenue threshold of $30,000 measured over four consecutive quarters. (You can still choose to enroll for GST/QST before you reach that amount, but over that amount enrollment becomes mandatory. Some businesses enroll before the threshold is reached so they can claim input tax credits for tax paid on expenses, but then there's more paperwork – one reason to perhaps avoid enrolling until necessary.) In Quebec, the Ministère du Revenu du Québec administers both GST (on behalf of the federal government) as well as provincial QST. Be sure to also check out their informative booklet, Should I Register with Revenu Quebec? (PDF). See also General Information Concerning the QST and the GST/HST (PDF).\"", "title": "" } ]	[ { "docid": "05443a44fc8d39a49dbe9480afdcbdce", "text": "Assuming that you don't own the business, it would seem to apply. The CRA says: If you were a resident of Quebec on December 31, 2016, and you did not have a business with a permanent establishment outside Quebec, your refundable Quebec abatement is 16.5% of the basic federal tax on line 55 of Schedule 1. If you had income from a business (including income you received as a limited or non-active partner) and the business has a permanent establishment outside Quebec, or you were not a resident of Quebec on December 31, 2016, and the business has a permanent establishment in Quebec, use Form T2203, Provincial and Territorial Taxes for 2016 - Multiple Jurisdictions, to calculate your abatement. For people whose income isn't coming from businesses they own, this seems quite clear.", "title": "" }, { "docid": "7370a33a0e00e3ab8b244ef51854982a", "text": "\"I know this is a little late but here is my answer. No. You do not \"\"need\"\" to incorporate. In fact, incorporating in your situation will cost you in legal fees, administrative headaches, and a fair bit in taxes. The CRA would probably look at your corporation as a personal services corporation and it would not be allowed to claim a number of tax reductions. The tax rate would end up being over the top range (unless you are in Quebec where it would be just under the top marginal range).\"", "title": "" }, { "docid": "cfda73ae0f9dbf89a67f975f4f6047b6", "text": "There is no requirement to open a company. You can work as freelancer. You need to report income and file returns. If your income is more than exempt limit, pay taxes. Apply for a PAN number if you don't have one yet.", "title": "" }, { "docid": "616eeb050776c24607530a993d6be9d5", "text": "\"New York will want to you to pay taxes on income from \"\"New York sources\"\". I'm not sure what this means to a freelance web developer. If your wife is doing freelance web development under the same business entity as she did in New York (ie. a New York sole proprietor, corporation, etc), you probably do need to file. From nonresident tax form manual: http://tax.ny.gov/pdf/2011/inc/it203i_2011.pdf If you were a nonresident of New York State, you are subject to New York State tax on income you received from New York State sources in 2011. If you were a resident of New York State for only part of 2011, you are subject to New York State tax on all income you received while you were a resident of the state and on income you received from New York State sources while you were a nonresident. To compute the amount of tax due, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return. You will compute a base tax as if you were a full-year resident, then determine the percentage of your income that is subject to New York State tax and the amount of tax apportioned to New York State.\"", "title": "" }, { "docid": "0d5db709426ecd7f9d7fbe0d9e7ed547", "text": "They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm.", "title": "" }, { "docid": "ae96ebf7c42b5aa8611e7c1b9890c299", "text": "First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax. At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State).", "title": "" }, { "docid": "0eee29beb739a8a8abb87eff51649618", "text": "Since you say 1099, I'll assume it's in the US. :) Think of your consulting operation as a small business. Businesses are only taxed on their profits, not their revenues. So you should only be paying tax on the $700 in the example you gave. Note, though, that you need to be sure the IRS thinks you're a small business. Having a separate bank account for the business, filing for a business license with your local city/state, etc are all things that help make the case that you're running a business. Of course, the costs of doing all those things are business expenses, and thus things you can deduct from that $1000 in revenue at tax time.", "title": "" }, { "docid": "be8d414a0fd1c029f1c9ad663a449c4d", "text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US", "title": "" }, { "docid": "7b171a55ca69f689ee46c4199f8dc686", "text": "If thinking about it like a business you normally only pay taxes on Net income, not gross. So Gross being all the money that comes in. People giving you cash, checks, whatever get deposited into your account. You then pay that out to other people for services, advertisement. At the end of the day what is left would be your 'profit' and you would be expected to pay income tax on that. If you are just an individual and don't have an LLC set up or any business structure you would usually just have an extra page to fill out on your taxes with this info. I think it's a schedule C but not 100%", "title": "" }, { "docid": "afbca4d29419bb73a19199c8112612b3", "text": "\"If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to send a 1099 to the IRS is $600. Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year. If they do not report it, the IRS will not know about it unless they audit you or something. However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 (\"\"other income\"\") depending on whether you consider this a business or a hobby. If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding.\"", "title": "" }, { "docid": "2ef4e47b64b903efa22be3cfe708549a", "text": "There are no clear guidelines. If you are selling as individual, then what ever profit you make gets added to your overall income as you pay tax accordingly. This is true for sole proprietor or partnership kind of firms. If you are registered as a Company, the profits are taxed as business income. There may be VAT and other taxes. Please consult a CA who can guide you in specifics as for eCommerce, there is no defined law and one has to interpret various other tax laws.", "title": "" }, { "docid": "b2c28bf26ba5ea1a2b8b24af91d571f4", "text": "You need to set your status as self-employed the day you started online work. If that date is a little ambiguous (as is usually the case with online business), you can start with the day you first made any money. Yes, you can deduct expenses from your revenue. But you have to be sure that the expenses were purely business related. This is how it goes: You inform HMRC about the day you started work. HMRC will assign you a UTR (Unique Tax Reference) number. Depending on how much you make you might or might not need to pay Class 2 NI contributions. You'll need to tell HMRC how much you expect to earn in the current tax year. Finally, you'll need to complete a Self-Assessment at the end of the tax year. I highly recommend setting up a business banking account. Here is a link that discusses being part-time self-employed in the UK.", "title": "" }, { "docid": "730bf896fd9945161b247899375340c3", "text": "I'm a freelance programmer, reverse-engineer, and network engineer. I do quarterly 1099 filings using a cheap local accounting firm. I did them on my own at first; not that hard.. You deduct from sum the percentage for that earning-tier issued by the IRS.. $500.00 for writing algorithms on a timer? Yikes.. I did topcoder once but it didn't pay much then it was only good for portfolio.. No way I would race to do algorithms for third-world-rate capital..", "title": "" }, { "docid": "5c340d3fe50a1f2fb12a38f17eda9b95", "text": "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.", "title": "" }, { "docid": "dc55d2f06ed16eb2a0e502d86f342e03", "text": "\"So the main reason that you aren't getting answers is that the question is not really answerable on this site without putting a lot of details about the expenses of your company online. Even then you will need someone who specializes in Canadian taxes to go through those details to be sure. Most of those people feel like they should be paid a decent amount per hour to go through the details. That being said, I dealt with a similar question for my contract work company by just taking a couple weekends and calculating the taxes myself on estimated numbers. It was time consuming but not really that hard. I thought I might have to buy software, but all I needed was a small calculator. Along the way I learned a few details that helped me lower my overall tax exposure. I found that Neil was generally correct that you are \"\"taxed on profits\"\" but it is worth doing the taxes yourself because the details can really matter.\"", "title": "" } ]	fiqa
0fbb54f6922862402090a05b2deb274f	What are the basics of apartment rental finances?	[ { "docid": "8ad92aef2db18e00c11a34e335a8493c", "text": "Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is.", "title": "" } ]	[ { "docid": "554772f1fd22785cb52c3fab4b5a1063", "text": "In Massachusetts, we have a similar law. Each tenant fills out a W9 and the account is in their name. You need to find a bank willing to do this at no cost, else fees can be problematic. With today's rates, any fee at all will exceed interest earned.", "title": "" }, { "docid": "b170129c88dde8aa46a26d51aa91d284", "text": "\"In Britain it's standard practice to use an electronic bank transfer, otherwise known as a \"\"standing order\"\" for the monthly rent payment. Many letting agents insist on it here in Britain. It's rare to hear of fraud. It is possible to setup a Direct Debit with the account numbers, as happened in a famous case where Jeremy Clarkson claimed losing account numbers wasn't a problem. If a direct debit is taken from your account, then you are protected by the the Direct Debit guarantee which means that you get a full and immediate refund if there is any fraud or unexpected payments spotted. Some landlords, particularly of bedsits accept plain old cash, however that's not recommended as there is no trace of it being paid, which could lead to legal disputes.\"", "title": "" }, { "docid": "75afbb044a044305e7c497e1093aa9a4", "text": "In order to arrive at a decision you need the numbers: I suggest a spreadsheet. List the monthly and annual costs (see other responses). Then determine what the market rate for rental. Once you have the numbers it will be clear from a numbers standpoint. One has consider the hassle of owning property from a distance, which is not factored into the spreadsheet", "title": "" }, { "docid": "c5418a183ba63cd8d28a292d6aae000b", "text": "In such cases, it has a EIN, like any business would. Even absent the rent you suggest, the condo should have reserve funds, similar to an individual's emergency account, only more codified as to level and flows. These funds should be earning interest.", "title": "" }, { "docid": "cf60d6c3f98bdfe60fe02e3a4d9ce7e3", "text": "\"Apologize - replied without actually looking at the financials. After reviewing -- Starbuck's financial statements use the line item \"\"Cost of sales including occupancy costs.\"\" This is very different than \"\"hiding\"\" rent in COGS, as they plainly describe what it represents. Anyone who wants to derive true cost of goods sold without occupancy costs can look in the footnotes of the financials to find the lease expense for the year and subtract it. This line item is used by multiple public companies (Whole Foods is one that comes to mind), and regardless of their true motives, they have convinced the SEC that they think it gives the consumer the most accurate view of their business operations. As with all financial statements, the footnotes play a crucial role in understanding how a business works. If you want to find opportunities for future value or an Achilles heel, look in the notes.\"", "title": "" }, { "docid": "9c70ada0fb9fa73631df94b4b4ed6a3f", "text": "\"You are doing Great! But you might want to read a couple of books and do some studying on budgeting and personal finance - education yourself now and you will avoid pain in the future. I learned a lot from reading Dave Ramsey's Total Money Makeover, and I have found some great advice from the simple budgeting guidelines on LearnVest. Budget in these three categories with these percentages, You may find that your \"\"essentials\"\" lower than 50%, because you are sharing room and utilities. You want to put as much into \"\"financial\"\" as you can for the first 1-2 years, to reduce (or eliminate) your student loan debt. Many folks will recommend you save six months (salary/expenses) for emergencies and unexpected situations. But understand that you are in debt now, and you have a unique opportunity to pay off your debt before your living expenses creep up (as they so often do). Since you are a contractor, put aside 2 months expenses (twice what I would normally advise), and then attack paying off your debts with passion. Since you have a mix of student loans, focus on paying them off by picking one at a time, paying the minimum against the others while you pay off the one you picked, then proceed to the next. Dave Ramsey advises a Debt Snowball, paying the smallest one first (psychological advantage, early wins), while others advise paying the highest interest off first. Since you have over $2400/month available to pay down debt, you could plan on reducing your student loan debt substantially in a year. But avoid accumulating other debt along the way. Save for larger purchases. Your bedroom purchase may have been premature, but you needed some basics. But check your contract. Since many 0% furniture loan deals retroactively charge interest if you don't pay them off in full - you might want to make regular payments, and pay the debt off a month early (avoid any 'gotcha's). You might want to open a retirement account - many folks recommend a Roth account for folks your age - it is after tax, but you don't pay tax when you withdraw money. Roth is better when you have lots of deductions (think mortgage, kids). But some retirement account would be great to get started. Open a credit union account (if you can), that will make getting a credit card or personal loan (installment) easier. You want to build a credit file, but you don't want credit card debt (seems contradictory), so opening 2 credit cards over the next year will help your credit. You want a good credit mix (student loans, revolving, installment, and mortgage - wait on that one).\"", "title": "" }, { "docid": "6a811ba05b575681ba2d20adffe6a2fc", "text": "This is something you are going to have to work out with the leasing company because your goal is to get them to make an exception to their normal rules. I'm a little surprised they wouldn't take 6 months pre-payment, plus documentation of your savings. One option might be to cash in the bonds (since you said they are mature), deposit them in a savings account, and show them your account balance. That documentation of enough to pay for the year, plus an offer to pay 6 months in advance would be pretty compelling. Ask the property manage if that's sufficient. And if the lease is for one year and you're willing to pay the entire year in advance, I can't see how they would possibly object. If your employment prospects are good (show them your resume and explain why you are moving and what jobs you are seeking) a smart property manager would realize you'll be an excellent, low-risk tenant and will make an effort to convince the parent company that you should live there.", "title": "" }, { "docid": "fe638c47505fa844419fd4a4523d8fb8", "text": "\"A person can finance housing expenses in one of two ways. You can pay rent to a landlord. Or you can buy a house with a mortgage. In essence, you become your own landlord. That is, insta the \"\"renter\"\" pays an amount equal to the mortgage to insta the \"\"landlord,\"\" who pays it to the bank to reduce the mortgage. Ideally, your monthly debt servicing payments (minus tax saving on interest) should approximate the rent on the house. If they are a \"\"lot\"\" more, you may have overpaid for the house and mortgage. The advantage is that your \"\"rent\"\" is applied to building up equity (by reducing the mortgage) in your house. (And mortgage payments are tax deductible to the extent of interest expense.) At the end of 30 years, or whatever the mortgage term, you have \"\"portable equity\"\" in the form a fully paid house, that you can sell to move another house in Florida, or wherever you want to retire. Sometimes, you will \"\"get lucky\"\" if the value of the house skyrockets in a short time. Then you can borrow against your appreciation. But be careful, because \"\"sky rockets\"\" (in housing and elsewhere) often fall to earth. But this does represent another way to build up equity by owning a house.\"", "title": "" }, { "docid": "ce75620806f026d3c49c678265b60c92", "text": "I use a spreadsheet for that. I provide house value, land value, closing/fix-up costs, mortgage rate and years, tax bracket, city tax rate, insurance cost, and rental income. Sections of the spreadsheet compute (in obvious ways) the values used for the following tables: First I look at monthly cash flow (earnings/costs) and here are the columns: Next section looks at changes in taxable reported income caused by the house, And this too is monthly, even though it'll be x12 when you write your 1040. The third table is shows the monthly cash flow, forgetting about maintenance and assuming you adjust your quarterlies or paycheck exemptions to come out even: Maintenance is so much of a wildcard that I don't attempt to include it. My last table looks at paper (non-cash) equity gains: I was asked how I compute some of those intermediate values. My user inputs (adjusted for each property) are: My intermediate values are:", "title": "" }, { "docid": "18cb1c1a05f67853bb594568740c7fa2", "text": "\"No magic answers here. Housing is a market, and the conditions in each local market vary. I think impact on cash flow is the best way to evaluate housing prices. In general, I consider a \"\"cheap\"\" home to cost 20% or less of your income, \"\"affordable\"\" between 20-30% and \"\"not affordable\"\" over 30%. When you start comparing rent vs. buy, there are other factors that you need to think about: Renting is an easy transaction. You're comparing prices in a market that is usually pretty stable, and your risk and liability is low. The \"\"cost\"\" of the low risk is that you have virtually no prospects of recouping any value out of the cash that you are laying out for your home. Buying is more complex. You're buying a house, building equity and probably making money due to appreciation. You need to be vigilant about expenses and circumstances that affect the value of your home as an investment. If you live in a high-tax state like New York, an extra $1,200 in property taxes saps over $16,000 of buying (borrowing) power from a future purchaser of your home. If your HOA or condo association is run by a pack of idiots, you're going to end up paying through the nose for their mistakes. Another consideration is your tastes. If you tend to live above your means, you're not going to be able to afford necessary maintenance on the house that you paid too much for.\"", "title": "" }, { "docid": "cc944b121bd06b9a75a12eae2177827d", "text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5", "title": "" }, { "docid": "b5adc69cca3d027f18083e62afca7523", "text": "From the apartment owners perspective what was the purpose of $300? They promised they wouldn't rent it to somebody before you had a chance to see it. But lets say you did see it, and decided you didn't like the view. Would they have to give the money back? if so, why would they promise not to rent it if somebody showed up first? I would have made it clear, as the owner, what the money was for. It was a $300 fee to delay rental. You would have essentially bought x number of days of delay. You could view it as a mini-short-term rental. Of course there should have been paperwork involved. There should have been been a receipt that at least mentioned the amount of money involved. You may need to pay the amount owed, and may need to determine if you want to sue in small claims court. Of course your agent may have some liability based on your contract with them and any paperwork they signed when the money was sent to the owner. The fact that the bank sided with you doesn't mean the courts will.", "title": "" }, { "docid": "2d20c592fe9b767d533c4d7ac614c12e", "text": "The bare minimum should be 6-months of expenses. Ideally, it should be at least 1 year. My personal preference is 2+ years, but one thing at a time. Figure out your necessary expenses: food, shelter, transportation and necessary extras. An example of a necessity, beyond the basics, for me is a decent internet connection. Telephone costs is another good example. (Meanwhile, electricity and such bills should be included in the figure for shelter.) You may want to include some allowance for clothing as well; especially for the 2+ year plan.", "title": "" }, { "docid": "ff94a74f6bff825a00d09b2a42624887", "text": "\"Have her chip in for the regular expenses, utilities, food, etc., and a bit for \"\"rent.\"\" Then tell her to be sure to deposit to her retirement account, preferably a matched 401(k). It's admirable to want her to build 'equity' but it's pretty convoluted. You can't actually give her ownership, and in the event you break up (I know you won't, but this is to help other readers) you'll have to pay her back a lump sum when she moves out. That might not be so easy.\"", "title": "" }, { "docid": "2569fe4820d2f35649876d2d8d5144e1", "text": "Exactly, if you can afford the rent on a $1500-2K a month apartment in SO-CA-TOA and were able to pass the credit check for it, no question you can afford a 30 year on a $250K house. Trouble is that $250K houses are now closer to $400-500K in the cities that pay enough for millennials to afford a $2K a month apartment.", "title": "" } ]	fiqa
939594a63e132a79df457e5c29f53d7c	Why do bank statements end on SUCH wildly inconsistent days of the month?	[ { "docid": "b727ae7b43228b83efcdc86a2ddfa0c7", "text": "Looking at your dates, I think I see a pattern. It appears that your statement closing date is always 17 business days before the last business day of the month. For example, if you start at May 31 and start counting backwards, skipping Saturdays, Sundays, and May 30 (Memorial Day), you'll see that May 5 is 17 business days before May 31. I cannot explain why Bank of America would do this. If you ask them, let us know what they say. If it bothers you, find another bank. I do most of my banking (checking, savings, etc.) with a local credit union. Their statements end on the last day of the month, every month without fail. (Very nice, in my opinion.) I have two credit cards with nationally known banks, and although those statements end in the middle of the month, they are consistently on the same date every month. (One of them is on the 13th; the other date I can't recall right now.) You are right, a computer does the work, and your statement date should be able to fall on a weekend without trouble. Even when these were assembled by hand, the statement date could still be on a weekend, and they just wouldn't write it up until the following Monday. You should be able to find another bank or credit union that does this.", "title": "" }, { "docid": "f67397e8aa4882f62733d4d80aaabdf3", "text": "They need to spread the work for all customers over the whole month, and they don't work on weekends. Combine the two, and the rule becomes clear - if months have minimum of N working days, 1/N of all customers gets set on each day. You seem to be on day 5: If the month starts with a Monday, the fifth working day is the 5. (Friday); if there is a Sat or Sun in between, it will be the 6th, and if there is both a Sat and a Sun in there, it will be the 7th. However, the statement itself is not very important at all. It is just the day where they print it on paper (or even only on a PDF). You can see your bank account activity every day 24/7 by checking online, and nothing keeps you from printing it on every 1st of the month if you want (or every day, or whenever you prefer).", "title": "" } ]	[ { "docid": "fa70890a59cb856eb8e66c48a3ef4e05", "text": "I was forced to give my bank permission to cover any overdrafts out of my savings accounts. Or pay the bank a fee. After 6 months I discovered they were still taking out a fee, when I confronted them they said it wasn't the overdraft fee it was just an administrative fee. Banks need to burn in hell.", "title": "" }, { "docid": "1a5a1da92420013f72c201f2ccd6593c", "text": "\"I can't think of any conceivable circumstance in which the banker's advice would be true. (edit: Actually, yes I can, but things haven't worked that way since 1899 so his information is a little stale. Credit bureaus got their start by only reporting information about bad debtors.) The bureaus only store on your file what gets reported to them by the institution who extended you the credit. This reporting tends to happen at 30, 60 or 90-day intervals, depending on the contract the bureau has with that institution. All credit accounts are \"\"real\"\" from the day you open them. I suspect the banker might be under the misguided impression the account doesn't show up on your report (become \"\"real\"\") until you miss a payment, which forces the institution to report it, but this is incorrect-- the institution won't report it until the 30-day mark at the earliest, whether or not you miss a payment or pay it in full. The cynic in me suspects this banker might give customers such advice to sabotage their credit so he can sell them higher-interest loans. UDAAP laws were created for a reason.\"", "title": "" }, { "docid": "300207fb417715762863a5b3d7fa6275", "text": "It's likely that your bill always shows the 24th as the due date. Their system is programmed to maintain that consistency regardless of the day of the week that falls on. When the 24th isn't a business day it is good to error on the side of caution and use the business day prior. It would have accepted using their system with a CC payment on the 24th because that goes through their automated system. I would hazard a guess that because your payment was submitted through your bank and arrived on the 23rd it wasn't credited because a live person would have needed to be there to do it and their live people probably don't work weekends. I do much of my bill paying online and have found it easiest to just build a couple days of fluff into the schedule to avoid problems like this. That said, if you call them and explain the situation it is likely that they will credit the late charge back to you.", "title": "" }, { "docid": "7ec98223bf7d147a121185b9f03fae31", "text": "\"There's something wrong with your story. The IBAN contiains two check digits, and the method used to compute them guarantees that any single digit error will be caught. So it's impossible that \"\"HSBC screwed up the last digit of my IBAN\"\" because if that were the case, the resulting IBAN would not be valid and be rejected by the computer when it was entered at your bank.\"", "title": "" }, { "docid": "0aa076ab8960aa77009c1706bff7e023", "text": "I think they're compounding the interest daily. That means you have to look at the number of days between payments to judge how much the interest charge is. From February 3 to March 2 is 28 days (2012 was a leap year). From March 2 to April 3 is 32 days. That's an increase of about 14% in number of days between payments, which accounts reasonably well to the ~$18 difference in interest charge. Daily compounding also explains the minor fluctuations in the other interest charges. I think if you compute interest/day for each month, you'll find that it is, indeed, decreasing over time.", "title": "" }, { "docid": "52723561ae6945cbce68bd27b38fb019", "text": "It allows companies a time after which they can count the vouchers as part of profit in order to balance their books and also minimize internal fraud that could happen using the vouchers. If they didn't have an expiry date it becomes impossible to reconcile the voucher account as they can still possibly be used in future or may not be used. What do you count that as? If they have an expiry date, when the date passes you can count them as money coming in because they have been paid for though have not been used.", "title": "" }, { "docid": "af08a3158906d68c230fb7a3822377d6", "text": "I can think of a few good reasons: A company, especially public, usually wants their fourth-quarter earnings to be the strongest of the year. That ends each fiscal year on a high note for the company and its investors, which helps public sentiment and boosts stock prices. So, travel agencies and airlines usually like ending their year in October or March, in the lull between the summer and winter travel seasons with a large amount of that revenue falling within the company's fiscal Q4. Oil companies sometimes do the same because fuel prices are seasonal for much the same reasons. December is a really bad month to try to close out an entire year's accounting books. Accountants and execs are on vacation for large parts of the month, most retail stores are flooded with revenue (and then contra-revenue as items are returned) that takes time to account at the store level and then filter up to the corporate office, etc etc. It also doesn't tell the whole story for most retail outfits; December sales are usually inflated by purchases that are then returned in January after all the hullaballoo. As a result, a fiscal year end in January or even February keeps the entire season's revenues and expenses in one fiscal year.", "title": "" }, { "docid": "109c02e73a5b6ca5cb8fb6950efdd18c", "text": "Your bank does not know about any SEPA Mandat you declare, until it gets in use. When the optionees withdraw money from your Account, they have to authenticate with the given Mandat and at this point your bank knows about that Mandat wich has an expiry date. According to the guidelines of the European Central Bank, your bank is not in duty to bookmark the expiration date. However, I'd assume they do anyway due they are allowed to and it makes things easier. Additional, if you can tell who the optionee is, you can block the withdraw before it happened. In any case, you have to call your bank.", "title": "" }, { "docid": "f70265ed3e89fe16f52b76e56bffb18d", "text": "It is because 17th was Friday, 18th-19th were weekends and 20th was a holiday on the Toronto Stock Exchange (Family Day). Just to confirm you could have picked up another stock trading on TMX and observed the price movements.", "title": "" }, { "docid": "4f1b1c566e68e180bc8d2edd76e7676a", "text": "\"But I have been having a little difficulty to include the expenditure in my monthly budget as the billing cycle is from the 16th to 15th of the next month and my income comes in at the end of the month. Many companies will let you change the statement date if you want, so one way to do this would be to request your bank to have statements due at the end of the month or first of month. You can call and ask, this might resolve your problem entirely. How can I efficiently add the credit card expenditure to my monthly budget? We do this using YNAB, which then means our monthly budget is separate from our actual bank accounts. When we spend, we enter the transaction into YNAB and it's \"\"spent.\"\" Additionally, we just pay whatever our credit card balance is a day before the end of the month so it is at $0 when we do our budget discussion at the end of each month.\"", "title": "" }, { "docid": "7be1da953541e9ce40e4598da9a824e4", "text": "\"Debit Cards have a certain processing delay, \"\"lag time\"\", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility)\"", "title": "" }, { "docid": "ffd1a93e5ba8df50304b578f7aee6402", "text": "As far as I can see, this is an issue of the bank's policy rather than some legal regulation. That means that you'll need to work it out with the bank. To give you a couple of ideas to work with when you talk with them, maybe something from this list will work: Good luck!", "title": "" }, { "docid": "e87339fb33848438b29492d4293e6df9", "text": "Bank runs very complex software to detect suspicious activity - terrorism financing, money laundering, etc. How would a program know that some person's activity is suspicious? It uses a set of rules. That set might be imperfect (that likely was not intended) - there might be some rule that triggers a warning on your account dominating the fact you've been with them for 15 years. So it's highly likely that an imperfect program triggered a warning on your account and the bank employer didn't dismiss it.", "title": "" }, { "docid": "b4585c86d5566947354fbb2697a2c873", "text": "You're knowingly providing a payment method which has insufficient funds to meet the terms of the contract, because you are too lazy to comply with the contract. That's unethical and fraudulent behavior. Will you get in trouble? I don't know. I'd suggest getting acquainted with an electronic calendar that can remind you to do things.", "title": "" }, { "docid": "fdde16f02a47c59d0ba7b213478cdd88", "text": "Oh yes, it is absolutely the problem of the consumers. After all how is the bank to know how it should be doing business unless the customer explains it to them? Please read the other comments about how the customer has verified receipt of some critical document and then they claim that they don't have it. Sure they are very nice on the phone, but that doesn't help when I have to take time out of my work day to call them repeatedly.", "title": "" } ]	fiqa
d579a54e44b8b5f105a22b2154463765	Online tutorials for calculating DCF (Discounted Cash Flow)?	[ { "docid": "75a0733bd9cb8aa9b7ca1bc98780f9f2", "text": "\"Here's a link to an online calculator employing the Discounted Cash Flow method: Discounted Cash Flows Calculator. Description: This calculator finds the fair value of a stock investment the theoretically correct way, as the present value of future earnings. You can find company earnings via the box below. [...] They also provide a link to the following relevant article: Investment Valuation: A Little Theory. Excerpt: A company is valuable to stockholders for the same reason that a bond is valuable to bondholders: both are expected to generate cash for years into the future. Company profits are more volatile than bond coupons, but as an investor your task is the same in both cases: make a reasonable prediction about future earnings, and then \"\"discount\"\" them by calculating how much they are worth today. (And then you don't buy unless you can get a purchase price that's less than the sum of these present values, to make sure ownership will be worth the headache.) [...]\"", "title": "" }, { "docid": "081512f0aaafbef6ec324b5e271c4821", "text": "\"Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: \"\"Investment Valuation\"\". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc.\"", "title": "" }, { "docid": "d0c4460f43692954b0a086c354365cad", "text": "what do you mean exactly? Do you have a future target price and projected future dividend payments and you want the present value (time discounted price) of those? Edit: The DCF formula is difficult to use for stocks because the future price is unknown. It is more applicable to fixed-income instruments like coupon bonds. You could use it but you need to predict / speculate a future price for the stock. You are better off using the standard stock analysis stuff: Learn Stock Basics - How To Read A Stock Table/Quote The P/E ratio and the Dividend yield are the two most important. The good P/E ratio for a mature company would be around 20. For smaller and growing companies, a higher P/E ratio is acceptable. The dividend yield is important because it tells you how much your shares grow even if the stock price stays unchanged for the year. HTH", "title": "" } ]	[ { "docid": "c0e0b365c44284f072a16b31557e837f", "text": "I thought it was such a useful suggestion that I went ahead and created them. I'm sure you're not the only one who could derive some benefit from them, I know I will. http://www.investy.com/tools When I have some additional time, I will add the option for grace-periods, but for now I wanted to get them up so you could use the calculations as-is from the article. Enjoy. (Disclosure: I'm the founder of the site they are hosted on and I wrote the code for the calculators)", "title": "" }, { "docid": "6ced8bdf8dd9ea79f75c2faf73ca36f9", "text": "Happy to help. I always recommend you try and solve these types of problems by hand over financial calculators so that you can get a feel for how terms in the equation relate to one another. That's important while you're studying/learning. But for work--by all means you should use the fastest method, which is probably excel.", "title": "" }, { "docid": "89d0451472da336c5b36dca90f59adb4", "text": "Many good sources on YouTube that you can find easily once you know what to look for. Start following the stock market, present value / future value, annuities & perpetuities, bonds, financial ratios, balance sheets and P&L statements, ROI, ROA, ROE, cash flows, net present value and IRR, forecasting, Monte Carlo simulation (heavy on stats but useful in finance), the list goes on. If you can find a cheap textbook, it'll help with the concepts. Investopedia is sometimes useful in learning concepts but not really on application. Khan Academy is a good YouTube channel. The Intelligent Investor is a good foundational book for investing. There are several good case studies on Harvard Business Review to practice with. I've found that case studies are most helpful in learning how to apply concept and think outside the box. Discover how you can apply it to aspects of your everyday life. Finance is a great profession to pursue. Good luck on your studies!", "title": "" }, { "docid": "1ebc364846535cd64021290e9b7af494", "text": "You could create your own spreadsheet of Cash Flows and use the XIRR function in Excel: The formula is:", "title": "" }, { "docid": "e7973c465d42af9e800720223b3f970c", "text": "Stop with all the stupid big words. You sound really pretentious. Just learn your 3 statements from accounting coach and learn statement analysis from streetofwalls. If you're interested into valuation, streetofwalls is a good primer for DCF/public comps/M&A comps/scenario analysis (LBO), but if you want to literally build out the model, Joshua Rosenbaum's investment banking valuation book is great. Everyone in banking I know used it to learn valuation", "title": "" }, { "docid": "70591461ef9fce7e7b32b7b259bf14f6", "text": "The quant aspect '''''. This is the kind of math I was wondering if it existed, but now it sounds like it is much more complex in reality then optimizing by evaluating different cost of capital. Thank you for sharing", "title": "" }, { "docid": "9d77881dc3d8a425eeea4703c169e0b3", "text": "\"First, don't use Yahoo's mangling of the XBRL data to do financial analysis. Get it from the horse's mouth: http://www.sec.gov/edgar/searchedgar/companysearch.html Search for Facebook, select the latest 10-Q, and look at the income statement on pg. 6 (helpfully linked in the table of contents). This is what humans do. When you do this, you see that Yahoo omitted FB's (admittedly trivial) interest expense. I've seen much worse errors. If you're trying to scrape Yahoo... well do what you must. You'll do better getting the XBRL data straight from EDGAR and mangling it yourself, but there's a learning curve, and if you're trying to compare lots of companies there's a problem of mapping everybody to a common chart of accounts. Second, assuming you're not using FCF as a valuation metric (which has got some problems)... you don't want to exclude interest expense from the calculation of free cash flow. This becomes significant for heavily indebted firms. You might as well just start from net income and adjust from there... which, as it happens, is exactly the approach taken by the normal \"\"indirect\"\" form of the statement of cash flows. That's what this statement is for. Essentially you want to take cash flow from operations and subtract capital expenditures (from the cash flow from investments section). It's not an encouraging sign that Yahoo's lines on the cash flow statement don't sum to the totals. As far as definitions go... working capital is not assets - liabilities, it is current assets - current liabilities. Furthermore, you want to calculate changes in working capital, i.e. the difference in net current assets from the previous quarter. What you're doing here is subtracting the company's accumulated equity capital from a single quarter's operating results, which is why you're getting an insane result that in no way resembles what appears in the statement of cash flows. Also you seem to be using the numbers for the wrong quarter - 2014q4 instead of 2015q3. I can't figure out where you're getting your depreciation number from, but the statement of cash flows shows they booked $486M in depreciation for 2015q3; your number is high. FB doesn't have negative FCF.\"", "title": "" }, { "docid": "11bf7e54ddc4e7c2844243fea04bbcb9", "text": "I feel like IRR is the tool you want to use for this, then you can look at your output and determine if it's higher than what your discount rate is likely to be. Similarly, you can just do a traditional NPV analysis and then examine the sensitivity by changing the discount rate. If you're safely in profitable territory then you're probably fine despite not knowing the discount rate.", "title": "" }, { "docid": "ba7bf795e580e31b8c830138b431da26", "text": "The IRR is the Discount Rate r* that makes Net Present Value NPV(r)==0. What this boils down to is two ways of making the same kind of profitability calculation. You can choose a project with NPV(10%)>0, or you can choose based on IRR>10%, and the idea is you get to the same set of projects. That's if everything is well behaved mathematically. But that's not the end of this story of finance, math, and alphabet soup. For investments that have multiple positive and negative cash flows, finding that r becomes solving for the roots of a polynomial in r, so that there can be multiple roots. Usually people use the lowest positive root but really it only makes sense for projects where NPV(r)>0 for r<r and NPV(r)<0 for r>r. To try to help with your understanding, you can evaluate a real estate project with r=10%, find the sum future discounted cash flows, which is the NPV, and do the project if NPV>0. Or, you can take the future cash flows of a project, find the NPV as a function of the rate r, and find r where NPV(r)==0. That r is the IRR. If IRR=r>10% and the NPV function is well behaved as above, you can also do the project. When we don't have to worry about multiple roots, the preceding two paragraphs will select the same identical sets of projects as meeting the 10% return requirement.", "title": "" }, { "docid": "d0f013cb3f6e5e8f6175286a974da69f", "text": "\"By the sounds of things, you're not asking for a single formula but how to do the analysis... And for the record you're focusing on the wrong thing. You should be focusing on how much it costs to own your car during that time period, not your total equity. Formulas: I'm not sure how well you understand the nuts and bolts of the finance behind your question, (you may just be a pro and really want a consolidated equation to do this in one go.) So at the risk of over-specifying, I'll err on the side of starting at the very beginning. Any financial loan analysis is built on 5 items: (1) # of periods, (2) Present Value, (3) Future Value, (4) Payments, and (5) interest rate. These are usually referred to in spreadsheet software as NPER, PV, FV, PMT, and Rate. Each one has its own Excel/google docs function where you can calculate one as a function of the other 4. I'll use those going forward and spare you the 'real math' equations. Layout: If I were trying to solve your problem I would start by setting up the spreadsheet up with column A as \"\"Period\"\". I would put this label in cell A2 and then starting from cell A3 as \"\"0\"\" and going to \"\"N\"\". 5 year loans will give you the highest purchase value w lowest payments, so n=60 months... but you also said 48 months so do whatever you want. Then I would set up two tables side-by-side with 7 columns each. (Yes, seven.) Starting in C2, label the cells/columns as: \"\"Rate\"\", \"\"Car Value\"\", \"\"Loan Balance\"\", \"\"Payment\"\", \"\"Paid to Interest\"\", \"\"Principal\"\", and \"\"Accumulated Equity\"\". Then select and copy cells C2:I2 as the next set of column headers beginning in K2. (I usually skip a column to leave space because I'm OCD like that :) ) Numbers: Now you need to set up your initial set of numbers for each table. We'll do the older car in the left hand table and the newer one on the right. Let's say your rate is 5% APR. Put that in cell C1 (not C3). Then in cell C3 type =C$1/12. Car Value $12,000 in Cell D3. Then type \"\"Down Payment\"\" in cell E1 and put 10% in cell D1. And last, in cell E3 put the formula =D3(1-D$1). This should leave you with a value for the first month in the Rate, Car Value, and Loan Balance columns. Now select C1:E3 and paste those to the right hand table. The only thing you will need to change is the \"\"Car Value\"\" to $20,000. As a check, you should have .0042 / 12,000 / 10,800 on the left and then .0042 / 20,000 / 18,000 on the right. Formulas again: This is where spreadsheets become amazing. If we set up the right formulas, you can copy and paste them and do this very complicated analysis very quickly. Payment The excel formula for Payment is =PMT(Rate, NPER, PV, FV). FV is usually zero. So in cell F3, type the formula =PMT(C3, 60, E3, 0). Obviously if you're really doing a 48 month (4 year) loan then you'll need to change the 60 to 48. You should be able to copy the result from cell F3 to N3 and the formula will update itself. For the 60 months, I'm showing the 12K car/10.8K loan has a pmt of $203.81. The 20K/18K loan has a pmt of 339.68. Interest The easiest way to calculate the interest is as =E3C3. That's (Outstanding Loan Balance) x (Periodic Interest Rate). Put this in cell G4, since you don't actually owe any interest at Period 0. Principal If you pay PMT each month and X goes to interest, then the amount to principal is \"\"PMT - X\"\". So in H4 type =-F3 - G3. The 'minus' in front of F3 is because excel's PMT function returns a negative amount. If you want to, feel free to type \"\"=-PMT(...)\"\" for the formula that's actually in F3. It's your call. I get 159 for the amount to principal in period 1. Accumulated Equity As I mentioned in the comment, your \"\"Equity\"\" comes from your initial Loan-to-Value and the accumulated principal payments. So the formula in this cell should reflect that. There are a variety of ways to do this... the easiest is just to compare your car's expected value to your loan balance every time. In cell I3, type =(D3-E3). That's your initial equity in the car before making any payments. Copy that cell and paste it to I4. You'll see it updates to =(D4-E3) automatically. (Right now that is zero... those cells are empty, but we're getting there) The important thing is that as JB King pointed out, your equity is a function of accumulated principal AND equity, which depreciates. This approach handles those both. Finishing up the copy-and-paste formulas I know this is long, but we're almost done. Rate // Period 1 In cell C4 type =C3. Payment // Period 1 In cell F4 type =F3. Loan Balance // Period 1 In cell E4 type =E3-H4. Your loan balance at the end of period is reduced by the principal you paid. I get 10,641. Car Value // Period 1 This will vary depending on how you want to handle depreciation. If you ignore it, you're making a major error and it's not worth doing this entire analysis... just buy the prettiest car and move on with life. But you also don't have to get it scientifically accurate. Go to someplace like edmunds.com and look up a ballpark. I'm using 4% depreciation per year for the old (12K) car and 7% for the newer car. However, I pulled those out of my ass so figure out what's a better ballpark. In G1 type \"\"Depreciation\"\" and then put 4% in H1. In O1 type \"\"Depreciation\"\" and then 7% in P1. Now, in cell D4, put the formula =D3 (1-(H$1/12)). Paste formulas to flesh out table As a check, your row 4 should read 1 / .0042 / 11,960 / 10,641 / 203.81 / 45 / 159 / 1,319. If so, you're great. Copy cells C4:I4 and paste them into K4:Q4. These will update to be .0042 / 19,883 / 17,735 / 339.68 / 75 / 265 / 2,148. If you've got that, then copy C4:Q4 and paste it to C5:C63. You've built a full amortization table for your two hypothetical loans. Congratulations. Making your decision I'm not going to tell you what to decide, but I'll give you a better idea of what to look at. I would personally make the decision based on total cost to own during that time period, plus a bit of \"\"x-factor\"\" for which car I really liked. Look at Period 24, in columns I and Q. These are your 'equities' in each car. If you built the sheet using my made-up numbers, then you get \"\"Old Car Equity\"\" as 4,276. \"\"New Car Equity\"\" is 6,046. If you're only looking at most equity, you might make a poor financial decision. The real value you should consider is the cost to own the car (not necessarily operate it) during that time... Total Cost = (Ending Equity) - (Payment x 24) - (Upfront Cash). For your 'old' car, that's (4,276) - (203.81 * 24) - (1,200) = -1,815.75 For the 'new' car, that's (6,046) - (339.68 * 24) - (2,000) = -4,106.07. Is one good or bad? Up to you to decide. There are excel formulas like \"\"CUMPRINC\"\" that can consolidate some of the table mechanics, but I assumed that if you're here asking you would have gotten stuck running some of those. Here's the spreadsheet: https://docs.google.com/spreadsheet/ccc?key=0Ah0weE0QX65vdHpCNVpwUzlfYjlTY2VrNllXOS1CWUE#gid=1\"", "title": "" }, { "docid": "fdb0d925b58ea2b1b9af8fe85c545a4c", "text": "E&P can be valid throug Net Present Value methods, on a field-by-field basis. As no field is ever-lasting, and there Are not an unlimited number of fields, perpetuity-formulaes Are shitty. FCFF on a per-field basis with WC and Capex, with a definite lifetime. Thank you for the compliment.", "title": "" }, { "docid": "760403fc809bf4c0a7b1bf52e3218fba", "text": "Does it teach anything else other than the DCF approach? I've already learned that in on of my financing courses. I'm more interested in the more exotic valuation techniques, and how to use and weigh multiple techniques for valuation.", "title": "" }, { "docid": "d304ada0eec7878085696ff363929bd9", "text": "\"To calculate the balance (not just principal) remaining, type into your favorite spreadsheet program: It is important that the periods for \"\"Periods\"\" and \"\"Rate\"\" match up. If you use your annual rate with quarterly periods, you will get a horribly wrong answer. So, if you invest $1000 today, expect 6% interest per year (0.5% interest per month), withdraw $10 at the end of each month, and want to know what your investment balance will be 2 years (24 months) from now, you would type: And you would get a result of $872.84. Or, to compute it manually, use the formula found here by poster uart: This is often taught in high-school here as a application of geomentric series. The derivation goes like this. Using the notation : r = 1 + interest_rate_per_term_as_decimal p = present value a = payment per term eot1 denotes the FV at end of term 1 etc. eot1: rp + a eot2: r(rp + a) + a = r^2p + ra + a eot3: r(r^2p + ra + a) + a = r^3p + r^2a + ra + a ... eotn: r^np + (r^(n-1) + r^(n-2) + ... 1)a = p r^n + a (r^n - 1)/(r-1) That is, FV = p r^n + a (r^n - 1)/(r-1). This is precisely what exel [sic] computes for the case of payments made at the end of each term (payment type = 0). It's easy enough to repeat the calculations as above for the case of payments made at the beginning of each term. This won't work for changing interest rates or changing withdrawal amounts. For something like that, it would be better for you (if you don't want online calculators) to set up a table in a spreadsheet so you can adjust different periods manually.\"", "title": "" }, { "docid": "f04fb092a2a8b06046799dcc5521819c", "text": "\"Both models understand that the value of a company is the sum total of all cashflows in the future, discounted back to the present. They vary in their definition of \"\"cash\"\". The Gordon Growth model uses dividends as a proxy for cashflow, under the assumption that this is the only true cash received by shareholders. (In theory, counting cash is meaningless if there's no eventual end-game where the accumulated cash is divvied up amongst the owners.) The Gordon model is best used to value companies that have an established, reliable dividend. The company should be stable, and the payout ratio high. GG will underestimate the value of firms that consistently maintain a low payout ratio, and instead accumulate cash. There are multiple DCF models. A firm valuation measures all cash available to both equity and debt holders. A traditional equity valuation measures all cash that can be claimed by shareholders. While the latter seems most intuitive and pertinent to a shareholder, the former is very good at showing what a company can do regardless of their choice of capital structure. A small add-on to a firm valuation is the concept of EVA, or economic value add, where the return on capital (all capital -- both debt and equity) is compared to the blended cost of capital. The DCF model is more flexible (optimistic?) than the Gordon in its approach to cash. The approach can be applied to many types of companies, at every stage in their maturity, even if they don't pay a dividend. A simplistic, or single-stage DCF is similar to the Gordon. The assumption is that the company is fully mature, growing at a rate perhaps just slightly above inflation, forever. For younger companies a multi-stage DCF can be employed, where you forecast fairly confident numbers for the next 3-5 years, then 3-5 years beyond that the forecast is less certain, but assumed to be slowing growth, and a generally maturing, stabilizing company. And then the steady-state stage is tacked on to the end. You'll want to check out Professor Aswath Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . He addresses all this and so much more, and has a big pile of spreadsheets freely downloadable to get you started. I also highly recommend his book \"\"Investment Valuation\"\". It's the bible on the topic.\"", "title": "" }, { "docid": "d96196ef83d94bf00b3b41436799afda", "text": "Using your Time Value of Money functions on your calculator N = 3x2 = 6 PV = -914 PMT = (.16 x 1000)/2 = 80 FV = 1000 Compute I/Y Or Step by step calculations 1) Compute the PV of (FV of Bond)1000 in (3x2)6 periods at (16%/2)8% with no payments 2) Compute the PV of an Annuity of (.16/2x1000)$80 payments over (3x2)6 periods with an interest rate of (16%/2)8% and 0 Future Value 3) Combine the values from Steps 1 and 2", "title": "" } ]	fiqa
30bdb0a25e6ed8589cf83decfaec8d3c	If accepting more than $10K in cash for a used boat, should I worry about counterfeiting?	[ { "docid": "91ed2d056035a79ad74f3396e1a59ddc", "text": "When you operate outside of the law, you bear the risks of that decision. When you operate within the law, you have a number of avenues, such as the courts and police to mediate disputes or other problems.", "title": "" }, { "docid": "39a4cb00a0a621b7836cb43948f36ad5", "text": "If you get counterfeit money, then you're dealing with the criminal who is going to be punished by the law for doing that. The portion of the total sum that was paid with the counterfeit currency is considered unpaid and you can claim the money from the criminal and sue him, while he's in jail. He'll work hard on those license plates to pay you off. However, making false statements and assisting in a tax evasion scheme compromises your ability to go to the law enforcement in case of any wrongdoing, and then you should worry about the counterfeit money, because the law won't be on your side to help you. And you don't even get anything out of it... Why on earth are you willing to take this risk? Just so you know, it may also be money laundering, which may get you in trouble even more with the law.", "title": "" }, { "docid": "61c84c0c060ff124671df330fe85ec54", "text": "I'd not do business under these terms. A bill of sale needs a signature, right? Your signature is your word, and your word is your bond. I wouldn't participate in such a fraud, nor would I accept this sum of cash, who knows its origins?", "title": "" }, { "docid": "6a6835a11954cc0f37afcd219db475c0", "text": "I'd worry more about falsifying documents of sale. No good reason at all to do that. Detecting counterfeit bills is easy if they're all new bills. Hold them up to the light and look for the watermark and the numbered tape in the bill. Refuse any bad ones.", "title": "" }, { "docid": "a267f88078a1e0814649c590faee225f", "text": "I'd be a bit concerned about someone who wanted to transact that large of a transaction in cash. Also consider what you are going to do with the funds, if you deposit it, you will need to tell the bank where it comes from. Why does the bank want to know, because most legal businesses don't transact business with large sums of currency.. What does that tell you about the likelihood the person you are about to do business with is a criminal or involved in criminal affairs? The lower bill of sale price might be more than just to dodge taxes, it could be part of money laundering.. If they can turn right around and 'sell' the boat for $10K, or trade it in on a bigger boat for the same amount, and have a bill than says $4K, then they have just come up with a legal explanation for how they made 6 grand. and you could potentially be considered an accomplice if someone is checking up on their finances. Really, is it worth the risk.", "title": "" }, { "docid": "f4c9effc9b9bc9ac895d359b72a771fd", "text": "\"Paying tax is a Good Thing. However, warren has made good point and I would like you to consider this other thing: Go into your payees bank with the payee, get the money withdrawn from the teller and take it with you. Unless I am missing something, or the teller handed your payee fake notes, you are \"\"safe\"\"\"", "title": "" }, { "docid": "f66e25bacedbdcc71660c7a8b122bb2e", "text": "The only issue I can see is that the stranger is looking to undervalue their purchase to save money on taxes/registration (if applicable in your state). Buying items with cash such as cars, boats, etc in the used market isn't all that uncommon* - I've done it several times (though not at the 10k mark, more along about half of that). As to the counterfeit issue, there are a couple avenues you can pursue to verify the money is real: *it's the preferred means of payment advocated by some prominent personal financial folks, including Dave Ramsey", "title": "" }, { "docid": "e9fcbd976aafe88126a61f50631e4a8e", "text": "I would not do a bill of sale for less, but a legal and safe way to reduce the taxes is to write separate bills for the boat, motor and trailer. The taxes are paid at different rates and will represent to full sale price.", "title": "" } ]	[ { "docid": "d4acc1a9edb2c7a9f30e843af3b6bbcf", "text": "I wouldn't say this is a lie. Person 2 just made themselves the offer of 38k. If it sells then they were outbid. If it doesn't sell then they're stuck with the asset as if they had bid themselves. They're paying themselves, or they're representing a party that is paying themselves. That balances out to a $0 profit/loss + ownership of the asset. I think something like this would be unethical: Person 1: I'll buy your car for 30k Person 2: Okay Person 3:That's my car!", "title": "" }, { "docid": "bb31aa53139708b7c3827e7e98a67dc2", "text": "\"As others have noted, US law says that if you have over half the bill, it's worth the full value, under half is worth nothing. I presume if it is very close to half, if even careful measurements show that you have 50.5%, you'll have difficulty cashing it in, precisely because the government and the banking system aren't going to allow themselves to be easily fooled by someone cutting bills in half and then trying to redeem both halves. I've seen several comments on here about how you'd explain to the bank how so many bills were cut in half. What if you just told them the truth? Not the part about killing someone, of course, but tell them that you made a deal, neither of you wanted to bother with complex contracts and having to go to court if the other side didn't pay up, so your buddy cut all the bills in half, etc. As you now have both halves and they clearly have the same serial number, this no real evidence of fraud. Okay, this is technically illegal -- 18 US Code Section 333, \"\"Whoever mutilates, CUTS, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.\"\" But you didn't do it, the other guy did. I presume the point of this law is to say that you can't get a hold of currency belonging to someone else and mutilate it so as to make it worthless. As he's now given you both halves, I doubt anyone would bother to track him down and prosecute him. Just BTW, while checking up on the details of the law, I stumbled across 18 USC 336, which says that it's illegal to write a check for less than $1, with penalties of 6 months in prison. I just got a check from AT&T for 15 cents for one of those class action suits where the lawyers get $100 million and the victims get 15 cents each. Apparently that was illegal.\"", "title": "" }, { "docid": "5b9b2e9c08ae7722a8693d06c547ed4d", "text": "\"The US Customs and Border Protection website states that there is no limit to the amount of currency that can be brought into or taken out of the US. There is no limit on the amount of money that can be taken out of or brought into the United States. However, if a person or persons traveling together and filing a joint declaration (CBP Form 6059-B) have $10,000 or more in currency or negotiable monetary instruments, they must fill out a \"\"Report of International Transportation of Currency and Monetary Instruments\"\" FinCEN 105 (former CF 4790). The CBP site also notes that failure to declare currency and monetary instruments in excess of $10,000 may result in its seizure. Further, the site states that the requirement to report currency on a FinCEN 105 does not apply to imports of gold bullion. However, the legal website The Law Dictionary includes details of how money laundering laws may come into play here : As part of the War on Terror and the War on Drugs, U.S. law enforcement agencies have significantly increased their vigilance over money laundering. To this effect, travelers who carry large amounts of cash without supporting documentation of its legitimate source may be subject to secondary inspections and seizure of funds. In some cases, law enforcement may confiscate cash in excess of $10,000 until supporting documents are produced. So far, I have described the \"\"official\"\" position. However, reading between the lines, I think it is fair to say that in the current climate if you show up at an entry point with a suitcase full of a large amount of cash you would face considerable scrutiny, regardless of any supporting documentation you may present. If you fail to present supporting documentation, then I think your cash would certainly be seized. If you are a US resident, then you would be given the opportunity to obtain satisfactory documentation. If you did present documentation, then I think your cash would be held for as long as it would take to verify the validity of the documentation. Failure to present valid documentation would result in money laundering charges being brought against you and the matter would rest before the courts. If you are not a US resident, then failing to produce supporting documentation would mean your cash being seized and entry into the US would almost certainly be denied. You would then have to deal with the situation from outside of the US. If you did produce supporting documentation, then again I suspect the cash would be held for as long as it takes to verify the validity of the documentation. Whether or not you were allowed to enter the US would depend on what other documentation you possess.\"", "title": "" }, { "docid": "fe070ea6ae198fc4f3e308f45d363088", "text": "If you sell counterfeit goods by claiming that they are real, you're no better than people that just straight up steal money without the pretense of 'business' If you sell counterfeit goods and acknowledge that they are counterfeit, you're in ethically better territory... but you're still taking an enormous legal risk that can't possibly be worth your middling profits.", "title": "" }, { "docid": "289a45ffb14c8b0c60c33176908a22e0", "text": "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.", "title": "" }, { "docid": "b271a049ae22fd6bdb2c111d0e1dc938", "text": "\"Here's what's going to happen: At the last minute, he's going to \"\"discover\"\" that for some reason first you must send him $10,000. He'll tell you not to worry, as he's still going to send you $40,000... now $50,000. In fact, he's going to tell you that he'll send you $60,000 and tell you to keep the $10,000 as a \"\"finders fee\"\". Then you will send him, $10,000 and he will walk away with your $10,000. You'll never hear from him again. This is a very common scam. The best way to avoid it is not to tell him you won't do it for IRS reasons. The best thing to do is to stop accepting email from him and (optionally) report him to law enforcement.\"", "title": "" }, { "docid": "456c1399b8629f00c658ad7617c2ead5", "text": "It's got every sign of a scam. Signatures are needed on contracts, so you should only place them on below one. Free money sounds too good to be true. Money evading banks is a typical sign of money laundering; why are they trying to avoid paper trails? The normal way to gift money is to just hand it over or pay it to a bank account. If anything, you sign a tax declaration, but you would send that to the taxman yourself.", "title": "" }, { "docid": "4611b10dcda9bdcf2a448ddfd061e57b", "text": "http://www.consumerismcommentary.com/buying-house-with-cash/ It looks like you can, but it's a bad idea because you lack protection of a receipt, there's no record of you actually giving the money over, and the money would need to be counted - bill by bill - which increases time and likelihood of error. In general, paying large amounts in cash won't bring up any scrutiny because there's no record. How can the IRS scrutinize something that it can't know about? Of course, if you withdraw 200k from your bank account, or deposit 200k into it then the government would know and it would certainly be flagged as suspicious.", "title": "" }, { "docid": "45ffc7734227178f09bd70790a4af370", "text": "Probably more if the interest rate is above 0%. If it's too much, just pay span the payments longer, or get a cheaper car. Nice thing, assuming you keep it bone stock (or even tastefully modded, or even fully modded), you'll have no problem selling to some rich teenager. They hold their value.", "title": "" }, { "docid": "1db55aaa59f167ad133ccc4f13460d5f", "text": "According to this study put out this year by Judson and Porter, the face value of counterfeit currency relative to the total amount in circulation is about 0.01%: We conclude that the total value of counterfeits in circulation at any moment is on the order of $60 to $80 million, or less than $1 for every $10,000 outstanding, and is highly unlikely to exceed $220 million, or less than $3 for every $10,000 in circulation. Further, we conclude that the incidence of counterfeits is roughly the same inside and outside the United States ... Actual numbers from five years ago suggest about the same: Out of the approximately $759 billion in U.S. dollars held in U.S. currency in the form of banknotes (paper currency) in circulation outside the U.S. Treasury and the Federal Reserve at the end of 2005, the Secret Service reported that about $61 million in counterfeit currency was passed on the public worldwide. Of the counterfeit currency passed, the majority, $56.2 million, was passed in the United States, with the remainder passed abroad. As to why they're checking: Would you want to receive a counterfeit bill? Costco checks my cash when I check out. The guy I got a buggy ride from up in upstate New York checked my bill. It's easy to check certain things on the bill. Why not?", "title": "" }, { "docid": "9cecaef577bdf6b7e09a8f6da5ee2d11", "text": "The $10,000 mark is not a ceiling in importing cash, but rather a point where an additional declaration needs to be made (Customs Form 4790). At 1 million, I suspect you might be in for a bit of an interview and delay. Here's an explanation of what happens when the declaration isn't made: https://www.cbp.gov/newsroom/local-media-release/failure-declare-results-seizure-24000-arrest-two", "title": "" }, { "docid": "6cec0fbc02f791ad8baf221e975ecc00", "text": "Bank-to-Bank wire transfer would be the best option. Dollar is going up nowadays, so if he brought the money not so long ago he might even earn the cost of the transfers back through the difference of the exchange rates. Re the IRS - they don't care. Same goes to the Israeli Tax Authority. What you and your friend need to show, if asked, is the paper trail. I.e.: if he brought you the $10K in cash - that may be an issue unless he kept all the receipts for getting it. But for such a low amount you can always resort to claiming it is a gift from you, in this case.", "title": "" }, { "docid": "b8e66b2d15e7441db3f126594aa65b42", "text": "In the US, the bank is legally required to report any cash transactions over 10k$ to the government. This normally has no consequences, and you will never hear about it. No need to worry about it. If the amount is very high, or you do it repeatedly, or the government has other (pre-existing) reasons to look at your finances sharply, they might ask you where the money came from and what you did with it, but your explanation is perfectly fine (assuming it is true). The idea is to catch money-launderers that try to get large illegal cash incomes into the banking system. Classic example is the drug lord who makes a million a month in cash from selling drugs, and needs to get this million into the banks (as you can't buy houses or luxury cars or yachts with cash without getting FBI attention right away).", "title": "" }, { "docid": "b3ccba376cef3f12a8bad4fc3558abc8", "text": "This may sound a little crazy but I would take $5K of that money and buy whiskey with it (Jack Daniel's would be my preference). My guess is that in 5 years that whiskey will be worth more than the $10K you put in the bank. I just can't see how the dollar survives the next 5 years without a major downward adjustment. If I'm wrong then you have a nice party and give whiskey for Christmas gifts. If I'm right at least you will have some savings instead of $15K of useless dollars. Here is my justification for converting your US dollars into tangible assets. Do you really think the money printing will ever stop?", "title": "" }, { "docid": "ccad5df003233c9e6cdffdce3837c9a4", "text": "\"Speculation is when someone else makes an investment you don't like. The above is tongue in cheek, but is a serious answer. There are several attempts at separating the two, but they turn into moral judgements on the value of a pure \"\"buy and hold\"\" versus any other investment strategy (which is itself doubtful: is shorting an oil stock more \"\"speculation\"\" than buying and holding an alternative energy stock?). Some economists take the other route and just argue that we should remove the moral judgement and celebrate speculation as we celebrate investment.\"", "title": "" } ]	fiqa
5b4afb2cb2f4d15a90920c5cbf38bfc3	How to pick a state to form an LLC in?	[ { "docid": "c63354cffacbd0dd596f593b412164d3", "text": "\"There are very few circumstances where forming an out of state entity is beneficial, but a website is within these circumstances in certain instances. Businesses with no physical operations do not need to care what jurisdiction they are registered in: your home state, a better united state or non-united state. The \"\"limited liability\"\" does it's job. If you are storing inventory or purchasing offices to compliment your online business, you need to register in the state those are located in. An online business is an example of a business with no physical presence. All states want you to register your LLC in the state that you live in, but this is where you need to read that state's laws. What are the consequences of not registering? There might be none, there might be many. In New York, for example, there are no consequences for not registering (and registering in new york - especially the city - is likely the most expensive in the USA). If your LLC needs to represent itself in court, New York provides retroactive foreign registrations and business licenses. So basically, despite saying that you need to pay over $1000 to form your LLC \"\"or else\"\", the reality is that you get the local limited liability protection in courts whenever you actually need it. Check your local state laws, but more times than not it is analogous to asking a barber if you need a haircut, the representative is always going to say \"\"yes, you do\"\" while the law, and associated case law, reveals that you don't. The federal government doesn't care what state your form an LLC or partnership in. Banks don't care what state you form an LLC or partnership in. The United States post office doesn't care. Making an app? The Apple iTunes store doesn't care. So that covers all the applicable authorities you need to consider. Now just go with the cheapest. In the US alone there are 50 states and several territories, all with their own fee structures, so you just have to do your research. Despite conflicting with another answer, Wyoming is still relevant, because it is cheap and has a mature system and laws around business entity formation. http://www.incorp.com has agents in every state, but there are registered agents everywhere, you can even call the Secretary of State in each state for a list of registered agents. Get an employer ID number yourself after the business entity is formed, it takes less than 5 minutes. All of this is also contingent on how your LLC or partnership distributes funds. If your LLC is not acting like a pass through entity to you and your partner,but instead holding its own profits like a corporation, then again none of this matters. You need to form it within the state you live and do foreign registrations in states where it has any physical presence, as it has becomes its own tax person in those states. This is relevant because you said you were trying to do something with a friend.\"", "title": "" }, { "docid": "420bdfb40a54706409ebf250ca7da92c", "text": "\"Generally, you pick the State which you're located at, because you'll have to register your LLC there in any case. In your case that would be either Colorado or Oklahoma - register as domestic in one, as foreign in the other. If your concern is anything other than mere convenience/costs - then you need to talk to a lawyer, however most State LLC laws are fairly alike (and modeled after the \"\"Uniform Limited Liability Company Act\"\". Keep in mind that most of the sites talking about \"\"forming LLC out of state\"\" are either sales sites or targeted to foreigners attempting to form a US company. All the cr@p you hear about forming in Delaware/Nevada/Wyoming - is useless and worthless for someone who's a resident of any of the US States. If you're a US resident - you will always have to register in the State you're located at and do the work at, so if you register elsewhere - you just need to register again in your home State. In your case you already span across States, so you'll have to register in two States as it is - why add the costs of registering in a third one?\"", "title": "" } ]	[ { "docid": "63978fd23fe40497cf25247eafd5fd6c", "text": "Many enterprise owners inside the United States select to form their enterprise as a Delaware LLC because of the felony advantages from the state’s predictable enterprise friendly legal guidelines. Delaware LLC formation is easy, too — there's no need to visit the kingdom and minimal data is needed to form your LLC in Delaware. The method may be accomplished online; IncNow can assist shape a Delaware LLC in your enterprise in just five mins. You can form an LLC in Delaware without visiting, opening an office, or maintaining a bank account in Delaware.", "title": "" }, { "docid": "0c91abc4aaaca3434d8bb14a201d03a7", "text": "Making a game is hard enough, focus on that. If/when you start getting close to having something to sell, then if you're serious and want the company to grow into a full time venture, briefly consult with a lawyer and possibly accountant to set this up. It will save you a lot of time researching what you have to do and a lot of headache from potentially doing things wrong. If you want to try to do it on your own, I'd recommend getting a book on starting a business because there is more to know than a single post can cover. You'll probably have to file for a DBA (doing business as) at your city hall in order to be allowed to refer to yourself as the name of your company (otherwise you have to use your personal name). Initiating that will likely initiate annual business taxes in your town in addition to the cheap filing fee. You also want to consider how you will handle trademark (of your business and game) and copyright (of your game). If this is going to grow, you'll have to have contracts written for either employees or for freelancers who might produce assets for you. You may also need to consider writing an EULA for your game, privacy policies, etc. Additionally, you'll likely have to file with your state to collect and send sales tax. You'll also want to meticulously track costs and revenue related to your business. Formally starting a business will likely open you up to property, sales and income tax. For example, where I am, was even taxed on the equipment the business uses (e.g. computers). This is why it makes sense to wait until you're closer to having a product before you try to formally start a business and to consult with professionals on the best way. The type of business you should form will depend on the scope you plan for the company and the amount of time/money you're willing to put in. A sole proprietorship (what you are by default) means there is no difference legally/financially between you as an individual and you as a company. This may be suitable if this is just a hobby, but not if you intend it to grow because that means any lawsuit directed at your company and its money is also directed at you and your money. The differences between an LLC and corporation are more nuanced and involve differences in legal and tax treatment, however, they both shield you from the previously mentioned problem. If you want this to be more than a hobby you should form either an LLC or a corporation. Do some research on the differences and how they might apply to you and in your state.", "title": "" }, { "docid": "3ea78da0a95244e4bea035ad458a8bed", "text": "\"If you \"\"do business\"\" in a state, then you need to register your business in that state. I suspect that you have a misconception of what it means to \"\"do business\"\" in a state. If you are a 1-man shop, then you very likely are not doing business in any state except the one state where you work. Examples of when you are doing business in a state include having an office in the state or having employees in the state. Merely selling something to a client in that state is NOT enough to be doing business in the state. Each state is different, but unless you are doing something that is, in some sense, close to having an office or an employee in a state, then you have nothing to worry about. For example, if you regularly travel to a state to do work for a client then it is possible that you could be doing business in that state (I have no idea if that would be sufficient in any state). But if you are just working out of your basement running a website, then you are only doing business in your own state.\"", "title": "" }, { "docid": "363e48c2324326a292452607abe56965", "text": "Short Answer: Go to the bank and ask them about your options for opening a business account. Talk to an attorney about the paperwork and company structure and taxes. Long Answer: You and your buddies jointly own an unincorporated business. This is called a partnership. Yes, there is paperwork involved in doing it properly and the fact that you guys are minors might complicate that paperwork a little bit. In terms of what type of account to open: A business account! Running a business through a personal account (joint or otherwise) is a sure way to get that account shut down. Your bank will want to know the structure of the business, and will require documentation to support that. For a partnership, they will probably want a copy of the partnership agreement. For an LLC, they'll probably want a copy of the filing with Ohio Secretary of State as well as the operating agreement etc. That said, pop into a local bank and ask a business banker directly what you should do. They deal with new businesses all the time, and would probably be best qualified to help you figure out the bank account aspect of it. Regarding business structure... this really impacts a lot more than just the type of bank account to open and how you file your taxes. It is something you guys should really discuss with an attorney. What happens if down the road one of you quits? What happens if you want to bring in a new partner later? What if there is a disagreement about something? These are all things that the attorney can help you address ahead of time - which is a heck of a lot easier (and cheaper) than trying to figure it out later. You're brining in enough that you should certainly be able to buy a couple hours of a lawyer's time. Getting the formation stuff right could save all of you a lot of money and heartache later.", "title": "" }, { "docid": "6f1a08ddaabab1b83ced76dfa1bbe930", "text": "Get another LLC. Not that hard and well worth it. I have one business endeavor but have 3 different LLC's to handle the three different aspects of it. That way, should something go wrong with one of the three (and it has in the past), I can kill it without hurting the entire operation. Then start another LLC to take over the aspect of the operation that was killed.", "title": "" }, { "docid": "eb2a95119679e24f2467dcdd08ca9b5b", "text": "Your question mixes up different things. Your LLC business type is determined by how you organize your business at the state level. Separately, you can also elect to be treated in one of several different status for federal taxation. (Often this automatically changes your tax status at the state level too, but you need to check that with your state tax authority.) It is true that once you have an EIN, you can apply to be taxed as a C Corp or S Corp. Whether or not that will result in tax savings will depend on the details of your business. We won't be able to answer that for you. You should get a professional advisor if you need help making that determination.", "title": "" }, { "docid": "fc6c419b68f051b61e59669a64f83b2c", "text": "I'd have a good look at how much anonymity an LLC offers in your state - as far as I'm aware this varies from state to state. Out here in NV an LLC owner's privacy is supposedly fairly well protected, but in other states, not quite as much. Also keep in mind that while the LLC offers some protection (and I'm a big advocate of this sort of structure if you're taking larger risks that might have a big impact on your overall personal finances), this might not apply to financing. A lot of banks tend to require an LLC's owner to guarantee loans to an LLC once they go over a certain amount or even in general. Do some research in this area because the LLC would be worth less as a protective shield to you if you're on the hook for the full amount of the loans anyway.", "title": "" }, { "docid": "21f92446dfd048a11ba3713e97294bf3", "text": "\"No, there are no issues. When you form the corp in DE, you pick a business there to serve as your \"\"agent\"\" (essentially someone who knows to get in contact with you). The \"\"agent\"\" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct).\"", "title": "" }, { "docid": "49af7aa1976b53feba7306586aa787c1", "text": "You may be able to, depending on what state you're in, but it is going to be 10x more complicated than just forming a new LLC. I don't see an advantage to this approach - if you're imagining it will be cheaper, you are imagining wrong.", "title": "" }, { "docid": "8c53d1b2149e29a06ade529876aca990", "text": "An LLC is a very flexible company when it comes to taxation. You have three basic tax options: There are other good reasons to create an LLC (mainly to protect your personal assets) so even if you decide that you don't want to deal with the complications of an S-Corp LLC, you should still consider creating a sole proprietorship LLC.", "title": "" }, { "docid": "58d5bec72003ce53ec409a690cb7298b", "text": "\"If the single active member lives in California and works at home, then you likely need to register in CA and pay the annual $800 franchise tax. California is quite aggressive about enforcing registration of LLCs. A foreign LLC needs to register if it is \"\"doing business\"\" in California. Here is a blog post that covers it in some detail. It looks like you meet at least one of the criteria for doing business in California, such as:\"", "title": "" }, { "docid": "28d9aa347dd6586e63001086f0a889da", "text": "California is very aggressive when it comes to determining residency. While you have a legitimate defense, I suggest talking with a California-licensed CPA or EA practicing in California, which are experienced in dealing with the FTB residency audits.", "title": "" }, { "docid": "362888dad7a489b2fecb115aab213605", "text": "In this case not only that you must register in California (either as domestic, or as foreign if you decided to form elsewhere), you'll also be on the hook for back-taxes if you didn't do it from the start. FTB is notorious for going after out-of-state LLCs that Californians open in other States trying to avoid the $800 fee.", "title": "" }, { "docid": "8c4898f903f252efd310e0f149accf0c", "text": "If you have a new company and you want to attract investors, such as venture capitalists and private equity, incorporating in Delaware LLC probably makes sense. There are actually many investors who will only invest in a Delaware Online incorporation, so starting off by creating a Delaware corporation from the beginning may save a lot of money and stress down the road. You can also choose to form an LLC in Delaware, to begin with, then convert it to a C corporation later.", "title": "" }, { "docid": "c04235b74285a44bf3c488e03b1adb7e", "text": "\"Wyoming is a good state for this. It is inexpensive and annual compliance is minimal. Although Delaware has the best advertising campaign, so people know about it, the reality is that there are over 50 states/jurisdictions in the United States with their own competitive incorporation laws to attract investment (as well as their own legislative bodies that change those laws), so you just have to read the laws to find a state that is favorable for you. What I mean is that whatever Delaware does to get in the news about its easy business laws, has been mimicked and done even better by other states by this point in time. And regarding Delaware's Chancery Court, all other states in the union can also lean on Delaware case law, so this perk is not unique to Delaware. Wyoming is cheaper than Delaware for nominal presence in the United States, requires less information then Delaware, and is also tax free. A \"\"registered agent\"\" can get you set up and you can find one to help you with the address dilemma. This should only cost $99 - $200 over the state fees. An LLC does not need to have an address in the United States, but many registered agents will let you use their address, just ask. Many kinds of businesses still require a bank account for domestic and global trade. Many don't require any financial intermediary any more to receive payments. But if you do need this, then opening a bank account in the United States will be more difficult. Again, the registered agent or lawyer can get a Tax Identification Number for you from the IRS, and this will be necessary to open a US bank account. But it is more likely that you will need an employee or nominee director in the United States to go in person to a bank and open an account. This person needs to be mentioned in the Operating Agreement or other official form on the incorporation documents. They will simply walk into a bank with your articles of incorporation and operating agreement showing that they are authorized to act on behalf of the entity and open a bank account. They then resign, and this is a private document between the LLC and the employee. But you will be able to receive and accept payments and access the global financial system now. A lot of multinational entities set up subsidiaries in a number of countries this way.\"", "title": "" } ]	fiqa
8d234ede99498abb0fb8eeb4d962147c	If a bank has a transfer limit, what happens if another bank pushes/pulls more than that?	[ { "docid": "7b138186eaa370f17d473b616b4c8885", "text": "If bank B has a transfer limit set, you bet that there is a nice reason for that. Either risk of fraud, liability, client preferences, profiling, credit scoring, etc, etc. For a bank, the cost of denying something [1] is way lower than the potential damages and liabilities of allowing something to go through. Regarding your concerns for the ACH, here is the summarized transaction walkthrough source: An Originator– whether that’s an individual, a corporation or another entity– initiates either a Direct Deposit or Direct Payment transaction using the ACH Network. ACH transactions can be either debit or credit payments and commonly include Direct Deposit of payroll, government and Social Security benefits, mortgage and bill payments, online banking payments, person-to-person (P2P) and business-to-business (B2B) payments, to name a few. Instead of using paper checks, ACH entries are entered and transmitted electronically, making transactions quicker, safer and easier. The Originating Depository Financial institution (ODFI) enters the ACH entry at the request of the Originator. The ODFI aggregates payments from customers and transmits them in batches at regular, predetermined intervals to an ACH Operator. ACH Operators (two central clearing facilities: The Federal Reserve or The Clearing House) receive batches of ACH entries from the ODFI. The ACH transactions are sorted and made available by the ACH Operator to the Receiving Depository Financial Institution (RDFI). The Receiver’s account is debited or credited by the RDFI, according to the type of ACH entry. Individuals, businesses and other entities can all be Receivers. Each ACH credit transaction settles in one to two business days, and each debit transaction settles in just one business day, as per the Rules. Take heed of this like: The Originator initiates a direct deposit/payment transaction. In your scenario, the originator would be B. But since the transaction amount is higher than the limit, B would not even initiate the ACH transaction. The request would be denied. So the transaction would look like this: [1] Usually this cost comes down to just the processing costs of the denied transaction (and it is rather fail-fast like). For the other parties involved it may have additional costs (missed deadlines, penalties for not fulfilling an obligation, fines, etc), but for the bank that is irrelevant.", "title": "" }, { "docid": "b23ff02a9ae239a450ff9a158fb4b4b4", "text": "Or at least I saw it do so with Bank of America.", "title": "" } ]	[ { "docid": "76bc67fb64cb88a385b240a90e7935ac", "text": "I'd say it's a limitation of your bank. Every bank I've ever used had instant transfers between accounts at the same bank.", "title": "" }, { "docid": "f1c3f6fb7361b508b4af80dc2e022a07", "text": "\"After this happened the second time, I wonder if there could be a \"\"catch\"\" on this. No I mean, what is my bank's real motivation for allowing me to spend more money. Credit card companies make money in a few ways. By giving you a higher limit the credit card company hopes you will spend more on the card. This immediately gets them more merchant fees and if they are lucky means you will have to carry the balance for a while earning them interest. If they get really lucky you will miss a payment or two earning them some fees. Of course if they let you borrow too much you might never pay it back. So the credit limit is a balancing act. Letting you borrow more money gives them the potential to make more money but also the potential to lose more money. As you build up a history of paying as agreed they feel comfortable lending you more money.\"", "title": "" }, { "docid": "411a0d4eb5c817cf575e82c2ed0d5c25", "text": "It seems possible if the Euro is partially/entirely unwound that policies could be enacted to prohibit exactly this behavior, otherwise what will stop outflow to the stronger countries on a massive scale? (Thus amplifying the resulting decade-long clusterfuck) We've never had this situation in Europe before, and already for Greece and Spain there are suggestions to instigate withdrawal controls. It doesn't seem far fetched to imagine retroactive controls placed on private deposits in newly-foreign-currency banks. If I were concerned about the Euro's collapse I'd be more inclined to move assets out of the eurozone entirely", "title": "" }, { "docid": "25acfc12627b8bc956a648b3eb673eb5", "text": "So this method makes sense and is reasonable and possible. The money multiplier effect ends up capped by the fact that the bank can only lend a percent of its 'cash'. My issue understanding this is I've been told that banks actually don't hold 10% of the cash and lend the other 90% but instead hold the full 100% in cash and lend 900%. Is this accurate? The issue I see with it is that it becomes exponential growth that is uncapped. If the bank lends 900%, it has created this money from nothing, which by itself isn't different that the bank loaning 90% and keeping 10%. The issue comes because the next bank who gets that money deposited will treat that amount as cash as well, so they loan 900% of the 900%. And so on and so forth. How does the system prevent this from happening?", "title": "" }, { "docid": "df4f61b877d8a4b2a47ea5f22cfe2168", "text": "\"Let's divide all bank accounts into savings and checking. The main difference is that checking is easy to get money from; savings is hard to get money from. Because of this, the federal Reserve requires that banks keep more money on hand to cover transactions in checking accounts. Here is a related question from a banking customer regarding a recent notice on their bank statement: Deposit Reclassification. It seems that the bank was moving the customer's money between hidden sub accounts to make it look like the checking account was really a savings account and thus \"\"reduce the amount of funds we are required to keep on deposit at the Federal Reserve Bank.\"\" If they didn't have to transfer the money many times the bank could keep less cash on hand. But once they did 5 hidden transactions the rest of the money in the hidden savings account would be moved by the bank. The 6 transaction limit is done to not allow you to treat savings like checking. Here is a relevant quote from the Federal Reserve Savings Deposits Savings deposits generally have no specified maturity period. They may be interest-bearing, with interest computed or paid daily, weekly, quarterly, or on any other basis. The two most significant features of savings deposits are the ‘‘reservation of right’’ requirement and the restrictions on the number of ‘‘convenient’’ transfers or withdrawals that may be made per month (or per statement cycle of at least four weeks) from the account. In order to classify an account as a ‘‘savings deposit,’’ the institution must in its account agreement with the customer reserve the right at any time to require seven days’ advance written notice of an intended withdrawal. In practice, this right is never exercised, but the institution must nevertheless reserve that right in the account agreement. In addition, for an account to be classified as a ‘‘savings deposit,’’ the depositor may make no more than six ‘‘convenient’’ transfers or withdrawals per month from the account. ‘‘Convenient’’ transfers and withdrawals, for purposes of this limit, include preauthorized, automatic transfers (including but not limited to transfers from the savings deposit for overdraft protection or for direct bill payments) and transfers and withdrawals initiated by telephone, facsimile, or computer, and transfers made by check, debit card, or other similar order made by the depositor and payable to third parties. Other, less-convenient types of transfers, such as withdrawals or transfers made in person at the bank, by mail, or by using an ATM, do not count toward the six-per-month limit and do not affect the account’s status as a savings account. Also, a withdrawal request initiated by telephone does not count toward the transfer limit when the withdrawal is disbursed via check mailed to the depositor. Examiners should be particularly wary of a bank’s practices for handling telephone transfers. As noted, an unlimited number of telephone-initiated withdrawals are allowed so long as a check for the withdrawn funds is mailed to the depositor. Otherwise, the limit is six telephone transfers per month. The limit applies to telephonic transfers to move savings deposit funds to another type of deposit account and to make payments to third parties.\"", "title": "" }, { "docid": "a2e0b3360d9040b962450b64262b6f04", "text": "You may still get an exception hold on the transfer if all of the named account holders on the checking and savings do not match. In my time in banking such an internal hold was exceedingly rare but did occur if other red flags were present. Usually a hold is not an issue when transferring to savings. Further, regardless of the factors above, your institution may require you to complete the transfer with a teller rather than digitally, but that's the institution's choice. Side note about large transfers: When you're doing an internal transfer of $100,000.00 or more, even if named account holders match, some banks' back-end systems will only process this amount in one day as a wire. If so, they will likely waive the wire fee.", "title": "" }, { "docid": "651f98220897b2a34830fade5ce229dc", "text": "\"Probably the most significant difference is the Damocles Sword hanging over your head, the Margin Call. In a nutshell, the lender (your broker) is going to require you to have a certain amount of assets in your account relative to your outstanding loan balance. The minimum ratio of liquid funds in the account to the loan is regulated in the US at 50% for the initial margin and 25% for maintenance margins. So here's where it gets sticky. If this ratio gets on the wrong side of the limits, the broker will force you to either add more assets/cash to your account t or immediately liquidate some of your holdings to remedy the situation. Assuming you don't have any/enough cash to fix the problem it can effectively force you to sell while your investments are in the tank and lock in a big loss. In fact, most margin agreements give the brokerage the right to sell your investments without your express consent in these situations. In this situation you might not even have the chance to pick which stock they sell. Source: Investopedia article, \"\"The Dreaded Margin Call\"\" Here's an example from the article: Let's say you purchase $20,000 worth of securities by borrowing $10,000 from your brokerage and paying $10,000 yourself. If the market value of the securities drops to $15,000, the equity in your account falls to $5,000 ($15,000 - $10,000 = $5,000). Assuming a maintenance requirement of 25%, you must have $3,750 in equity in your account (25% of $15,000 = $3,750). Thus, you're fine in this situation as the $5,000 worth of equity in your account is greater than the maintenance margin of $3,750. But let's assume the maintenance requirement of your brokerage is 40% instead of 25%. In this case, your equity of $5,000 is less than the maintenance margin of $6,000 (40% of $15,000 = $6,000). As a result, the brokerage may issue you a margin call. Read more: http://www.investopedia.com/university/margin/margin2.asp#ixzz1RUitwcYg\"", "title": "" }, { "docid": "246426eb7dd8792a0944eef30d1d2258", "text": "There is nothing to worry about. There is absolutely nothing unusual about moving money between your own accounts, even if they are in separate financial institutions. I moved $200,000 when I was getting ready to by my house; I have moved similar sized chunks for other purposes. A large transfer may get some attention to make sure you aren't doing anything illegal with the money and aren't being scammed... but if the transaction is legitimate, that attention is harmless.", "title": "" }, { "docid": "1d572b9345892ac7846a98e286c53a59", "text": "In addition to @mhoran_psprep answer, and inspired by @wayne's comment. If the bank won't let you block automatic transfers between accounts, drop the bank like a hot potato They've utterly failed basic account security principles, and shouldn't be trusted with anyone's money. It's not the bank's money, and you're the only one that can authorize any kind of transfer out. I limit possible losses through debit and credit cards very simply. I keep only a small amount on each (~$500), and manually transfer more on an as needed basis. Because there is no automatic transfers to these cards, I can't lose everything in the checking account, even temporarily.", "title": "" }, { "docid": "5b213dd622dfb92ca43339dad0d9a256", "text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"", "title": "" }, { "docid": "1e27e77f9b48e65c7e51b05e7102406c", "text": "Here's a point in favor of central banks: With a central bank in the middle making sure payments clear, transactions can happen with near perfect trust. When a bank has a daylight overdraft, the Fed covers it. When a bank needs overnight funding, the Fed provides it. If a bank needs vault cash, a truck shows up from the Fed. Without this, no one could ever be entirely confident the other party was money-good. With a volume of transactions that can amount to annual GDP in as little as six days, this level of trust is critical to a smoothly functioning system of payments.", "title": "" }, { "docid": "f0b948d3ba6bb0db71fe1c892cbab69d", "text": "There are restrictions on transferring money OUT OF Egypt (although less tight than previously: http://www.aawsat.net/2014/01/article55326839 ) but there aren't any such restrictions on sending money INTO Egypt. If you go to HSBC's retail UK banking pages and locate the page for International Money Transfers, http://www.hsbc.co.uk/1/2/international-money-transfer you can see that you can transfer up to £50,000 per day into Egypt via online banking, £10,000 via telephone banking, or unlimited by visiting the branch. I'm not sure exactly what question you asked them or exactly what they said to you in response, but it sounds like there was some misunderstanding along the way.", "title": "" }, { "docid": "9f62569be9b7c332637d6eeed835ddb2", "text": "It depends on the bank and network. Banks are to provide outgoing data at the certain time for the processing by the central clearing house (the Federal Reserve system, for ACH), which then distributes incoming data back to the banks. All this has to be done between the closing of the business day and the opening of the next one. If the transaction hasn't completed the full path during that time - it will wait at the position it was stuck at until the next cycle - next night. That's why sometimes ACH transactions take more than 1 day to complete (if, for example, multiple Fed banks have to be involved).", "title": "" }, { "docid": "a84abc29f80cea29cc9d9ff10b3d315d", "text": "\"Like the old American Express commercial: \"\"no preset spending limit\"\". It is really up to the bank(s) in question how big a cheque they are willing to honour. A larger amount would likely be held longer by a receiving institution to ensure that it cleared properly, but nothing written in law (in Canada, that I am aware of).\"", "title": "" }, { "docid": "945e21f1afc1b42537ad6cdeec998eb5", "text": "The direct debit is an authority to withdraw money from your account. Depending on how it was set up it may limit how much may be withdrawn, how often and for how long. I haven't seen a direct debit agreement that limits the total that may be withdrawn, but they may exist. A reputable creditor will stop taking your money when they're supposed to, which would be when the loan is paid off.", "title": "" } ]	fiqa
d29b025926305d31b44d4feebb55fbfa	How does GST on PayPal payments work for Australian Taxation?	[ { "docid": "1a47af56d5b794e7f58cdb39117264bd", "text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"", "title": "" }, { "docid": "d09736680d57fe1f5d10b4ee8618a603", "text": "\"Regardless of wether or not you are registered for GST, you are legally required to include a GST total on every invoice sent to an Australian customer. This GST total must be 10% of the payment amount if you are registered for GST, or it must be $0.00 if you are not registered for GST. Since all GST transactions with the government are in Australian dollars, this amount on the invoice also needs to be in AUD, or else it's impossible for you and your customer to both be working off the same GST amount. This means you need to transfer your money from USD to AUD in PayPal's \"\"Manage Currencies\"\" area before you can send a tax invoice to the customer, so that you can provide the correct amount in AUD based on the actual exchange rate for the day (and you are required to send invoices promptly). Alternatively, you can collect payments in AUD using PayPal or use a different payment service that collects payments in USD but immediately converts them to AUD for sending an invoice (australian paypal competitors often provide this service).\"", "title": "" } ]	[ { "docid": "79303990e97a86ba0697a81dd873f19a", "text": "This is really a question for the paypal folks. as I understand it however, when you setup a paypal account, you are granting it access to your back account, so when you make a payment using paypal, it takes money directly from your bank account, and if you get paid for something via paypal, the money goes directly into your account. If that's not how they paypal account you have is working, then you need to get help from paypal to figure out how to make it work for you.", "title": "" }, { "docid": "a41efbee5c826099835787e354a813b0", "text": "I just tried doing that on my PP which is in the Netherlands, I have added a USD bank account (from my dutch bank) and they sent the verification amount in Euros, I called the bank and wonder why they didn't let me choose account currency they said it's not possible and if I cashout Dollars that I have in my PP (cause we usually do international business so we set it to dollars) it will be changed to Euros, So we decided to keep the dollars in account to pay our bills instead of getting ripped off by PayPal in xchange rates.", "title": "" }, { "docid": "a7ebe417a11689afa1585e43c14ceded", "text": "(community wiki) Ontario special HST sales tax transition rebate cheques: When and how much? What will happen to quarterly GST cheques when HST starts in Ontario? Ontario HST rebate: When would I qualify? Ontario gas prices & HST: What will happen to prices at the pump on July 1, 2010? How will Ontario’s HST apply to books / textbooks, which were PST exempt before? How can I minimize the impact of the HST? How does the HST affect a condominium purchase? Will I need to pay HST on condo maintenance fees? My Ontario small business collects only PST (beneath GST threshold). How will HST affect me?", "title": "" }, { "docid": "abccce67ea544a8d046a838a129ac919", "text": "\"I haven't seen anything specifically about how PayPal operates, but my guess is that they maintain relationships with banks in many countries via affiliates, and they settle the money transfers internally within the PayPal system. You basically have two types of bank transfers (there are others as well that I'm not getting into): I think PayPal is a hybrid -- they send and receive money using drafts to keep costs down, and manage the international stuff by operating a proprietary network. So if you send money from Indonesia to the US, you pay \"\"PayPal Indonesia\"\", who then tells \"\"PayPal USA\"\" to issue funds to your recipient. So they are cheaper than a wire, faster than a check, but limited in terms of transaction size and some other factors.\"", "title": "" }, { "docid": "f8b70510a8a1740f7e491534b7a2da30", "text": "there is no tax for receiving money from outside of india paypal just take their charges only", "title": "" }, { "docid": "8d031287980a46fd870886fd6610e129", "text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.", "title": "" }, { "docid": "6f3849cc6e6e761b6cb46319f2914a9e", "text": "\"Are you in the US? One thing you can do is prepay taxes at a rate of a 1.8% fee. Much lower than paypal. I would do this on what is \"\"left over\"\". Here are somethings that I would tend to do in your case: Those are some of the things I would be looking at. Do you care to share the details of your offer?\"", "title": "" }, { "docid": "4972d02c5cb0088e316851b3f20b2dee", "text": "Tax is due in India as you offered services from India. So whether the International Client pays via Credit Card, Bank Transfer, Paypal or any other means is not relevant. Even if the International Client pays you in a account outside India; it is still taxable in India.", "title": "" }, { "docid": "3e29685e4fc19ff48e0634c8621dfe68", "text": "If you're waiting for Apple to send you a 1099 for the 2008 tax season, well, you shouldn't be. App Store payments are not reported to the IRS and you will not be receiving a 1099 in the mail from anyone. App Store payments are treated as sales commissions rather than royalties, according to the iTunes Royalty department of Apple. You are responsible for reporting your earnings and filing your own payments for any sums you have earned from App Store. – https://arstechnica.com/apple/2009/01/app-store-lessons-taxes-and-app-store-earnings The closest thing to sales commissions in WA state seems to be Service and Other Activities described at http://dor.wa.gov/content/FileAndPayTaxes/BeforeIFile/Def_TxClassBandO.aspx#0004. When you dig a little deeper into the tax code, WAC 458-20-224 (Service and other business activities) includes: (4) Persons engaged in any business activity, other than or in addition to those for which a specific rate is provided in chapter 82.04 RCW, are taxable under the service and other business activities classification upon gross income from such business. - http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-224 I am not a lawyer or accountant, so caveat emptor.", "title": "" }, { "docid": "761f0139511e6eaccb15eb81532582a8", "text": "For people who frequently submit payments via PayPal, you may want to try and negotiate with them to use Paypal mass payments. Although the mass payment program is designed to send small amounts to many people, you can process payment batches of 1 transaction. In the CA mass payment fees (paid by sender) are 2% capped at 1.25 CAD To CA and US. International payments are 2% capped at 24.00 CAD. No fees for receiver. A business PayPal account is required to enable mass payments. When I mention this to customers, many are unaware Paypal's mass payment program exists! https://merchant.paypal.com/ca/cgi-bin/?cmd=_render-content&content_ID=merchant/mass_pay", "title": "" }, { "docid": "8c51d65c2c00e60d25de6f62f7c4d24a", "text": "Are you sure about either of those? PayPal owns Braintree which can accept Bitcoin, but I've never seen the option in PayPal itself, and I've looked, though not recently. I've also not noticed PayPal in HD, but maybe I'm just not observant. Is that in all their stores?", "title": "" }, { "docid": "a3dda95b6fe5e60b7c1a455d81fc346f", "text": "\"I cannot speak for Paypal specifically and I doubt anyone who doesn't actually work on their internal automated payment systems could. However, I can speak from experiencing in working on automated forex transaction systems and tell you what many institutions do and it is often NOT based on live rates. There is no law stating an institution must honor a specific market exchange rate. Institutions can determine their own rates how and when they want to. However, there is some useful information on their website: https://www.paypal.com/an/cgi-bin/webscr?cmd=p/sell/mc/mc_convert-outside \"\"The most readily available information on currency exchange rates is based on interbank exchange rates. Interbank exchange rates are established in the course of currency trading among a global network of over 1,000 banks, and are not available through consumer or retail channels.\"\" This leads me to believe they pull exchange rates from either Oanda or XE periodically and then use these rates throughout the day to conduct business. Paypal does not disclose who they use to determine rates. And it's highly doubtful they do this for every transaction (using live rates). Even if they did, there would be no way for you to check and be certain of a particular exchange rate as paypal states: \"\" Consumers may use these rates as a reference, but should not expect to use interbank rates in transactions that involve currency conversion. To obtain actual retail rates, contact your local financial institution or currency exchange, or check the rate displayed in your PayPal transaction.\"\" This is partly because rates can change by the second just like stock prices or anything else which is susceptible to the open market's variables of supply, demand news events etc. So, even if you check the rates on Oanda (which you can do here: http://www.oanda.com/currency/converter/) you are not going to get a 100% accurate representation of what you would get by doing an exchange immediately afterwards from Paypal or any other financial institution. However, if you want to estimate, using Oanda's currency converter will likely get you close in most scenarios. That is assuming Paypal doesn't charge a premium for the exchange, which they may. That is also assuming they use live rates, it's also possible they only update their rates based on market rates periodically and not for every transaction. You may want to test this by checking the exchange rate on your transaction and comparing that to the Oanda rates at the same time.\"", "title": "" }, { "docid": "3f27d97c7be11d0fbb46d6ba00904ca8", "text": "From PayPal's website: PayPal offers discounted transaction rates for 501(c)(3) charities for most products, and consistently low rates for all other nonprofits. No extra fees for setup, statements, withdrawals or cancellation. 2.2% + $0.30 per transaction and no monthly fee for charities. There is a reduced rate if the donations total more than $100,000 (which they would for Wikipedia), but PayPal doesn't publish those rates. You have to call and ask about them. One forum I read indicates the rate drops to 1.9% + $0.30 per transaction.", "title": "" }, { "docid": "f832557e480bfac7209f20b9e8aadacd", "text": "\"Best answer I've heard when asking this question is \"\"because they can.\"\" Traditionally Australia was remote enough, and it was justified due to the cost of shipping and importing... but now that's not the case and they're still sticking it to you, and you're still paying it. Even digital media (music, video, software), the poster-child of an item that has zero difference in delivery cost, cost more in Australia and there is absolutely no reason for it outside of the fact that you're going to pay it. Sorry dude... Start finding ways to fight back. Find a US based VPN and route your purchases through the U.S., maybe save some money that way? Make your physical purchases overseas and ship them home when you happen to leave the country (if ever). Have friends do so when they leave the country... Good luck!\"", "title": "" }, { "docid": "29cf5583c86e0216a19eb093e877ba35", "text": "Whenever you pay or withdraw some fund from your account, paypal takes approx 3% of the current currency value along with the fees. i.e. If you are paying/withdraw 100 unit of US Dollars to British pounds and if the current convertion rate is 1$=0.82GBP, then consider reducing 3% of the actual currency rate. So, the approximate magnitude will be 0.82*97% (100-3=97) = 0.7954. So, 1$=0.7954GBP. This formula will not give you 100% accurate value but will help of course. Captain", "title": "" } ]	fiqa
542688f52f03ee752a0b62ee58d1ddb6	Freelancer in India working for Swiss Company	[ { "docid": "6c31cc642447b46b462ffbae99e40bcf", "text": "\"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you. Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via \"\"http://incometaxindia.gov.in/26ASTaxCreditStatement.asp\"\" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see\"", "title": "" }, { "docid": "c2fe5a2fd10180b48792906009b272fc", "text": "I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.", "title": "" }, { "docid": "746c2df9ea5a586fc65a71a374c66c25", "text": "I have some more inputs to investigate: India has dual tax avoidance treaty signed with european countries so that NRIs dont pay tax in both countries. Please check if India has some agreement with Swiss Also for freelance job that is delivered from India, u need to make sure where you have to pay taxes as you are still in India so the term NRI will not hold good here. Also, if Swiss company is paying tax there, and you are a freelancer from India(resident in india) how to tax filing /rate etc has to be investigated. Also, can you apply for tax back from swiss( a portion of tax paid can be refunded eg: in Germany) but I dont know if this is true for Freelancers and also for people out side SWISS. Bip", "title": "" } ]	[ { "docid": "735288ea721f87fe49b5c1098226c735", "text": "The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You are still liable to pay tax in India on the salary. If you are out of India for more than 182 days, you can be considered as Non-Resident from tax point of view. However this clause would not be of any benefit to you as are having a Employee / Employer relationship and being paid in India. Edit: This is only about the India portion of taxes. There maybe a UK protion of it as well, plus legally can you work and your type of Visa in UK may have a bearing on the answer", "title": "" }, { "docid": "ccb7e105475667a71ec73c4f44d5de4d", "text": "From tax perspective, any income you earn for services performed while you're in the US is US-sourced. The location of the person paying you is of no consequence. From immigration law perspective, you cannot work for anyone other than your employer as listed on your I-20. So freelancing would be in violation of your visa, again - location of the customer is of no consequence.", "title": "" }, { "docid": "ad545957f5af34e852059d84dd928377", "text": "\"Finally, I got response from finance center: \"\"It doesn't matter where do you study, what does matter is where you live. So, once you live in Germany, you pay taxes in Germany. And it doesn't matter who you work for.\"\" So, there are two options to pay taxes: it's paid by an employer or an employee: If I would work for Swiss company, I need to show how much money I make every month (or year) to Finance Center.\"", "title": "" }, { "docid": "a6d8246a6d2c372099e8140b3683674e", "text": "Business Apprentice is internship. That is not what is applicable for you. You're a visiting professor/researcher, which falls under Article 22, so you don't get the standard deduction.", "title": "" }, { "docid": "7beb296a45b2f6718fda648042db802f", "text": "\"Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said. This is all about how it goes \"\"on the books.\"\" [emphasis mine] As an independent consultant myself, when I hear something like \"\"the work will be the same either way\"\", I think: \"\"Here thar be dragons!\"\". Let me explain: If you go the independent contractor route, then you better act like one. The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go \"\"on the books\"\" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too. Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee. You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea. But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.) That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent. IMHO, the tax benefits alone wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below. If you're not sure what status to choose, the IRS can actually help you. But be prepared to wait... and wait... :-/ Additional Resources:\"", "title": "" }, { "docid": "387bb2fa0bd5f4c5f4e5caa86fb1ba18", "text": "Chiming with my experience, because I hate generalizations of an entire country. I'm Indian, born and raised, but came to the US to do my undergrad/uni and now work out of the US. I had a lot of the same qualms about working with my Indian peers, but I've found that it also depends on the support structure that companies offer. High turnover is definitely an issue, but that seems to be because companies focus more on hiring and less on retention (offering signing bonuses but then little to no continued progress, limited growth opportunities, rigid hierarchy, terrible working hours). I have someone who reports to me in India now and it's an experiment on how to better engage them, and it's worked better. Turns out you can expect more when you also treat them like an American employee while expecting american results. There are definitely still cultural clashes in work ethic etc. but they can be overcome if you get people to stick around long enough. Of course, this is anecdotal but that's my two cents.", "title": "" }, { "docid": "85f69d0d7ed4f8472a4e2960b0e4213f", "text": "As per Wikipedia of right now, here are unemployment figures for Switzerland and surrounding countries: Liechtenstein, unfortunately, does not have a large job market, given its total population of about 37,000 people. And note that the German figure of 4.5% is the lowest it has been for decades - I'd expect this number to go up and the Swiss one to stay constant. Bottom line: you will have an easier time finding a job in Switzerland. (Plus all the other good points the other answers raised: great mountains, great chocolate, low taxes, clean streets etc.)", "title": "" }, { "docid": "1ed0a848a2c8d9004ffc9aff4fbc6cdc", "text": "\"Nope... as mentioned elsewhere, I hired a lawyer, and my employer absolutely does not own any of my work. I've been extremely careful about that. This is much more common as a developer working for a \"\"for-profit\"\" entity particularly in the US. I work for a government body and not in the US.\"", "title": "" }, { "docid": "296b41f13f2bae4227c9fa310b1b5cba", "text": "Prior to his current job role, Mr. Raphael Lilla operated as the Director, Group and Business Control at Hinduja Bank. Currently, he is working as an Executive Director of SBC Group AG, Switzerland and as Managing Director of Swiss Bullion Company International LLC, Dubai.", "title": "" }, { "docid": "47bdbf1890afe60c5bb5ffc4a785060f", "text": "\"You do not need to inform your employer of your additional activity, but it is your responsibility not to work for more than 48 hours per week as long as you are an employee. So if you are working 38 hours for your employer, you may not work for yourself for more than 10 hours. It is, however, not so easy in practice to draw the line between work and a hobby, as long as you are not being paid by the hour. The main reason to present your employer with an addition to your work contract is to make it legally very clear that he holds no intentions to claim copyright to your work. He may attempt to do something funky like claim your home computer is, in fact, a work computer because you used it once a month to work from home, and your work contract may contain a paragraph that all work performed on a work computer results in copyright ownership for your employer. I have no idea how likely this is in practice, but this is the reason I know is commonly given as legal advice to have a contract. So the normal contract you present your employer with says: In order to earn user contribution money from a website, you need to register as a sole proprietor (Gewerbeanmeldung) and pay trade tax (Gewerbesteuer) and sales tax (Umsatzsteuer, alternatively you claim small trade exception, Kleingewerbe), which also makes a tax return mandatory. I would guess, however, (and this is not legal advice in any way, just my guess), that a couple of contributions towards server cost in a strictly non-profit endeavor is not commercial (\"\"gewerblich\"\") at all but private, in the same way that you may write an invoice to someone you sold your old bike to, or a kid may get paid to mow someone's lawn. Based on that guess, my non-legal-advice recommendation is to take the contributions and do nothing else, as long as the amount is nowhere near breaking even if you count your work input.\"", "title": "" }, { "docid": "5a6c19087f1431dd9a7ab61dc764a70a", "text": "\"Your own site/business. I’m in freelancing and internet business for 15 years, 20 years IT experience. Currently i use freelance websites for cheap Asian employees, very seldom for EU/USA employees, and if only if local competition is heavily out-pricing qualified staff. Till I went \"\"limited\"\" i.e., founded a limited corporation I was jobbing as freelancer and sole proprietor, both with limited success due to the strong Asian competition i myself currently hire. The point where freelancing got \"\"not sustainable\"\" as primary income was 2006 for me, don’t want to get into detail but every freelancer who was active back then knows what I mean, it was like whole India got internet. If you have absolutely no references, do it for the references a limited time and see the fee you pay as service for you to get references, then start your own web identity, either as freelancer or as corporation. Make sure you take your very satisfied customers with you. Every \"\"very satisfied\"\" customer in your contact list means 10 new customers which mean 2 new customers which mean 0.2 new customers and so on. Honestly, this info is solely based on experience of this niche fro ma European citizen perspective, if you’re based anywhere else the situation might be totally different.\"", "title": "" }, { "docid": "e65985c3ab463e6ad723656aa8e16f82", "text": "\"You can file an LLC yourself in most states, although it might be helpful to use a service if you're not sure what to do to ensure it is correct. I filed my LLC here in Colorado online with the Secretary of State's office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is \"\"pass-through\"\", meaning the LLC itself does not have any tax liability. Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can't speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I'll refer back to the NoLo books and web site.\"", "title": "" }, { "docid": "e3eaacc24784c090d2d5bdb857dcd3a9", "text": "\"This doesn't answer your question, but as an aside, it's important to understand that your second and third bullet points are completely incorrect; while it used to be true that Swiss bank accounts often came with \"\"guarantees\"\" of neutrality and privacy, in recent years even the Swiss banks have been caving to political pressure from many sides (especially US/Obama), with regards to the most extreme cases of criminals. That is to say, if you're a terrorist or a child molester or in possession of Nazi warcrime assets, Swiss banks won't provide the protection you're interested in. You might say \"\"But I'm not a terrorist or a pervert or profiteering of war crimes!\"\" but if you're trying so hard to hide your personal assets, it's worth wondering how much longer until Swiss banks make further concessions to start providing information on PEOPLE_DOING_WHAT_YOU_ARE_DOING. Not to discourage you, this is just food for thought. The \"\"bulletproof\"\" protection these accounts used to provide has been compromised. I work with online advertising companies, and a number of people I know in the industry get sued on a regular basis for copyright or trademark infringement or spamming; most of these people still trust Swiss bank accounts, because it's still the best protection available for their assets, and because Swiss banks haven't given up details on someone for spamming... yet.\"", "title": "" }, { "docid": "4972d02c5cb0088e316851b3f20b2dee", "text": "Tax is due in India as you offered services from India. So whether the International Client pays via Credit Card, Bank Transfer, Paypal or any other means is not relevant. Even if the International Client pays you in a account outside India; it is still taxable in India.", "title": "" }, { "docid": "068924eb9246321883828a7b0dcc2acc", "text": "\"I'll chime in here with the \"\"don't do it crowd.\"\" I think it's fraught with ugly possibilities. However, you may, for various reasons, decide to say, \"\"to hell with it, we'll make it work.\"\" If that is the case, treat it like a business transaction and not an emotional transaction. Work up a binding contract with your attorney for how the two of you will handle issues such as: Of absolutely critical importance is the bail-out clause: how will you handle it when one person says, \"\"Sayonara.\"\" None of this ensures a smooth road - god knows I wouldn't do it - but it could help protect your sanity and some of your investment down the road. Good luck.\"", "title": "" } ]	fiqa
ac3cc74e16e4efabeb987b5944829966	What would be the appropriate account for written off loans to friends and family?	[ { "docid": "16ad3228aaa40f39a992b2fcb32a4d4f", "text": "\"A simple way to account debt forgiveness of your receivables is to utilize a \"\"Bad Debt\"\" expense account. Take the following two examples: If you are only forgiving a portion of the principle, another popular term used is Principle Reduction as the expense account.\"", "title": "" } ]	[ { "docid": "1725f7ef8a360ad6fb97628888e9c1b1", "text": "\"Here's a blog by a guy who is trying to do this: Personal Loan Portfolio And here's another one: bobharris.com Do a quick search for \"\"prosper loan\"\" or \"\"kiva\"\" on blog search.\"", "title": "" }, { "docid": "f8d5c327ce6e719e6a82fda9724475de", "text": "While I agree with the existing bulk of comments and answers that you can't tell the lender the $7k is a gift, I do think you might have luck finding a mortgage broker who can help you get a loan as a group. (You might consider as an LLC or other form of corporation if no one will take you otherwise.) That is, each of you will be an owner of the house and appear on the mortgage. IIRC, as long as the downpayment only comes from the collective group, and the income-to-debt ratio of the group as a whole is acceptable, and the strongest credit rating of the group is good, you should be able to find a loan. (You may need a formal ownership agreement to get this accepted by the lender.) That said, I don't know if your income will trump your brother's situation (presumably high debt ratio or lower than 100% multiplier on his income dues to its source), but it will certainly help. As to how to structure the deal for fairness, I think whatever the two of you agree to and put down in writing is fine. If you each think you're helping the other, than a 50/50 split on profits at the sale of the property seems reasonable to me. I'd recommend that you actually include in your write up a defined maximum period for ownership (e.g. 5yr, or 10yr, etc,) and explain how things will be resolved if one side doesn't want to sell at that point but the other side does. Just remember that whatever percentages you agree to as ownership won't effect the lender's view of payment requirements. The lender will consider each member of the group fully and independently responsible for the loan. That is, if something happens to your brother, or he just flakes out on you, you will be on the hook for 100% of the loan. And vice-versa. Your write up ought to document what happens if one of you flakes out on paying agreed upon amounts, but still expects there ownership share at the time of sale. That said, if you're trying to be mathematically fair about apportioning ownership, you could do something like the below to try and factor in the various issues into the money flow: The above has the benefit that you can start with a different ownership split (34/66, 25/75, etc.) if one of you wants to own more of the property.", "title": "" }, { "docid": "a83a30574625b35fba23c608b1b6053c", "text": "I concur with the other answers about not mixing family and money: the one whose loans are paid off second will be taking the credit risk of the other not paying/being able to pay. There may also be tax implications. That said, if you do still want to do this, I think there's a fairly straightforward way to account for the payments. With your scenario, your brother should make you a personal loan at some interest rate inbetween 5% and 10%. That loan would be tracked independently of the actual student loans. Any money that your brother transfers to you to pay off your loans, add to that personal loan, and later on once your loans are paid off you start repaying the loan to him and he uses the proceeds for his own loans. The interest rate will determine how the benefit of paying off the 10% loans is shared: if the rate is set at 10% then your brother will get all the benefit, if 5% you will get all the benefit, and 7.5% would roughly share it out. This means that you can still manage your own student loans separately. Your brother can choose how little or much to commit to the snowball rather than his own loans (of course he should first make the minimum payments on his own loans). Anything he does loan you benefits you both if we ignore the credit and tax issues - he gets more than the 5% interest on his own loans, and you pay less than the 10% interest on your loans. You'll need to track the payments each way on this personal loan and apply interest to it every so often, I'd suggest monthly (beware that the monthly equivalent of 5% annual interest is not 5%/12, because of compounding).", "title": "" }, { "docid": "8125e139939bdcfbcaeb83f843bb2452", "text": "employed under the table and doesn't have a bank account If I could make that size 10,000,000 font I would. Your friend likely also isn't paying taxes. The student loan penalties will be nothing compared to what the IRS does to you. Avoid taking financial advice from that person.", "title": "" }, { "docid": "bbc786f8d44f69979b0e357f265a9b51", "text": "Personal needs? No bank is going to give you that kind of cash without a real reason, usually with some equity backing it. From your post you say you are a student, so I doubt you even have the income to pay it back. If banks just gave out cash like that people would disappear with it all the time.", "title": "" }, { "docid": "bb9ea76eef68b7af44e872e2f37d6569", "text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.", "title": "" }, { "docid": "bfd9f28b5355e5f533b22d0f211b3e57", "text": "Is it inevitably taxed by the government? Which government? Tax treatment of familial loans varies greatly be jurisdiction. What is proper documentation procedure? If you want to get paid back, definitely a lawyer ... each. Is it better to ask several family members to help contribute so each person loans less? Or is it taxed the same? If this is only a tax issue then see above. If it is a means of spreading risk then sure.", "title": "" }, { "docid": "839709aa6287a3c0bdadf5e399de228d", "text": "I would recommend against loans from family members. But if you decide to go down that path take care of the basics: This is a business decision so treat it like one. I would add that the situation you describe sounds extremely generous to your family member. I'd look at standard loan agreements (ie. in the marketplace) and model your situation more on them - if you do this, even with you paying a premium, you'd never come up with something as generous as what you have described.", "title": "" }, { "docid": "37ab19113c26928885755f04ab154a8c", "text": "You will have to write it off as an offset of capital gains or as bad debt against personal income, limited to $3k/ yr. Write off 3k this year, 2k next. Here's the tax code, you'll need to file a form 8949, link below. https://www.irs.gov/taxtopics/tc450/tc453 So, this requires that it is a loan, acknowledged by both you and the borrower, with terms of repayment and stated interest, as well as wording for late payments and time for delinquency. The loan document doesn't have to be fancy, but it must show a reasonable intention of repayment to distinguish it from a gift. Then send out a 1099c for cancellation of debt. This is a starting point, it's a good idea to run everything by your tax processional to make sure you're meeting the requirements for bad debt with your contact and payment communication.", "title": "" }, { "docid": "32cef36b284aa6cef14527c27cb8bca0", "text": "\"The standard double-entry approach would just be to create a Liability account for the loan, and then make a transfer from that account to your Asset (Savings) account when the loan proceeds are distributed to you. After that point, the loan doesn't \"\"belong\"\" to your Savings account in any way. Each account and transaction is tracked separately. So, you might for instance pay that loan back with a transfer from your Checking account, even though the initial disbursement arrived into your Savings account. In order to see how much of a loan you have remaining, you need to look at the loan's Liability account to see what transactions occurred in it and what its remaining balance is. It sounds like what you're really trying to accomplish is the idea of \"\"earmarking\"\" or \"\"putting into an envelope\"\" certain assets for certain purposes. This kind of budgeting isn't really something that Gnucash excels at. It does have some budget features, but there's more about being able to see how actual expenses are to expected expenses for a reporting period, not about being able to ask \"\"How much 'discretionary' assets do I have left before I start hitting my 'emergency fund'\"\". The closest you get is splitting up your asset accounts into subaccounts as you suggest, in which case you can \"\"allocate\"\" funds for your specific purposes and make transfers between them as needed. That can work well enough depending on your exact goals, though it can sometimes make it a little trickier to reconcile with your actual bank statements. But there's not really an accounting reason to associate the \"\"emergency fund\"\" portion of your assets with the remaining balance of your loan; though there's nothing stopping you from doing so if that's what you're trying to do. Accounting answers questions like \"\"How much have I spent on X in the past?\"\" and \"\"How much do I own right now?\"\". If you want to ask \"\"How much am I allowed to spend on X right now?\"\" or \"\"Am I likely to run out of money soon?\"\", you may want a budgeting tool rather than an accounting tool.\"", "title": "" }, { "docid": "11c9b3d0363b550de540aa34f698e3b1", "text": "You haven't mentioned the country. As a general premise, you own them money and the fact that the account was closed has no bearing on the fact that you own them money. My suggestion would be pay them off.", "title": "" }, { "docid": "7a44496c2bd1e2232797a0e4fd167338", "text": "\"Definitely consult a lawyer. Mortgages are highly regulated now, and regardless of how familiar borrower & lender are, the standard contract will be extremely long. (at least in the US) There are no \"\"friends and/or family\"\" exceptions. If the contract does not conform to regulations, it may be invalid, and all the money you lent could simply evaporate since it was the borrower who actually bought the house, and it's the loan contract that's rendered null & void; in that case, it may be better to simply donate the money.\"", "title": "" }, { "docid": "41f0b1acb57b7544bd49bad2965c8fb9", "text": "\"Should is a very \"\"strong\"\" word. You do what makes most sense to you. Should I be making a single account for Person and crediting / debiting that account? You can do that. Should I be creating a loan for Person? And if so, would I make a new loan each month or would I keep all of the loans in one account? You can create a loan account (your asset), you don't need to create a new account every time - just change the balance of the existing one. That's essentially the implementation of the first way (\"\"making a single account for a Person\"\"). How do I show the money moving from my checking account to Company and then to Person's loan? You make the payment to Company from your Checking, and you adjust the loan amount to Person from Equity for the same amount. When the Person pays - you clear the loan balance and adjust the Checking balance accordingly. This keeps your balance intact for the whole time (i.e.: your total balance sheet doesn't change, money moves from line to line internally but the totals remain the same). This is the proper trail you're looking for. How do I (or should I even) show the money being reimbursed from the expense? You shouldn't. Company is your expense. Payment by the Person is your income. They net out to zero (unless you charge interest). Do I debit the expense at any point? Of course. Company is your expense account. Should I not concern myself with the source of a loan / repayment and instead just increase the size of the loan? Yes. See above.\"", "title": "" }, { "docid": "0c509b1b72a4cbf876193786938eb9a1", "text": "Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything.", "title": "" }, { "docid": "a5a8f00d13d6121c63e2703247e507dc", "text": "\"Bookkeeping and double-entry accounting is really designed for tracking the finances of a single entity. It sounds like you're trying to use it to keep multiple entities' information, which may somewhat work but isn't really going to be the easiest to understand. Here's a few approaches: In this approach, the books are entirely from your perspective. So, if you're holding onto money that \"\"really\"\" belongs to your kids, then what you've done is you're taking a loan from them. This means that you should record it as a liability on your books. If you received $300, of which $100 was actually yours, $100 belongs to Kid #1 (and thus is a loan from him), and $100 belongs to Kid #2 (and thus is a loan from her), you'd record it just that way. Note that you only received $100 of income, since that's the only money that's \"\"yours\"\", and the other $200 you're only holding on behalf of your kids. When you give the money to your kids or spend it on their behalf, then you debit the liability accordingly and credit the Petty Cash or other account you spent it from. If you wanted to do this in excruciating detail, then your kids could each have their own set of books, in which they would see a transfer from their own Income:Garage Sale account into their Assets:Held by Parents account. For this, you just apportion each of your asset accounts into subaccounts tracking how much money each of you has in it. This lets you treat the whole family as one single entity, sharing in the income, expenses, etc. It lets you see the whole pool of money as being the family's, but also lets you track internally some value of assets for each person. Whenever you spend money you need to record which subaccount it came from, and it could be more challenging if you actually need to record income or expenses separately per person (for some sort of tax reasons, say) unless you also break up each Income and Expense account per person as well. (In which case, it may be easier just to have each person keep their entirely separate set of books.) I don't see a whole lot of advantages, but I'll mention it because you suggested using equity accounts. Equity is designed for tracking how much \"\"capital\"\" each \"\"investor\"\" contributes to the entity, and for tracking a household it can be hard for that to make a lot of sense, though I suppose it can be done. From a math perspective, Equity is treated exactly like Liabilities in the accounting equation, so you could end up using it a lot like in my Approach #1, where Equity represents how much you owe each of the kids. But in that case, I'd find it simpler to just go ahead and treat them as Liabilities. But if it makes you feel better to just use the word Equity rather than Liability, to represent that the kids are \"\"investing\"\" in the household or the like, go right ahead. If you're going to look at the books from your perspective and the kids as investing in it, the transaction would look like this: And it's really all handled in the same way an Approach #1. If on the other hand, you really want the books to represent \"\"the family\"\", then you'd need to have the family's books really look more like a partnership. This is getting a bit out of my league, but I'd imagine it'd be something like this: That is to say, the family make the sale, and has the money, and the \"\"shareholders\"\" could see it as such, but don't have any obvious direct claim to the money since there hasn't been a distribution to them yet. Any assets would just be assumed to be split three ways, if it's an equal partnership. Then, when being spent, the entity would have an Expense transaction of \"\"Dividend\"\" or the like, where it distributes the money to the shareholders so that they could do something with it. Alternatively, you'd just have the capital be contributed, And then any \"\"income\"\" would have to be handled on the individual books of the \"\"investors\"\" involved, as it would represent that they make the money, and then contributed it to the \"\"family books\"\". This approach seems much more complicated than I'd want to do myself, though.\"", "title": "" } ]	fiqa
327bc52eba90b85eb94099d8e41b832f	Should I buy a house with a friend?	[ { "docid": "1837fcec79a87c1cec6e790d17ca2387", "text": "No. This amount of money is not appropriate for friends to go in on. Although you could consider buying a house with a business partner, have the contracts drawn up, see an attorney, read up on the penalties if one of the partners doesn't hold up their end from the law's point of view. Also, since this is a business arrangement, write and sign all sorts of details regarding the penalties amongst the partners (not just the law) when one person doesn't hold up. It isn't that you don't have good intentions, or that you couldn't do it just fine if no problems ever happen. The issue is that over the course of a mortgage, which is at least several years, something is very likely to come up. If you and your friend aren't prepared to think about all those issues and how to handle them, you will lose a friend, probably a house and your good credit. I wouldn't go into business with my best friend because I want him to stay my best friend.", "title": "" }, { "docid": "68922f8b7da11e444b92f686b6ced412", "text": "Unlike others who have answered the question - I have done this. Here is my experience - your mileage and friendship may vary: I bought a condo years ago with a longtime childhood friend. We did it for all the reasons you mentioned - sick of renting and not building equity, were both young, single professionals who had the money. The market crashed we have both since married and moved on to own other properties with our spouses. Now we rent out the condo as selling in the current market is not doable.. It's not an ideal situation but that is because of the real estate market - not who I bought with. You need to discuss very openly all of the following scenarios, as well as others I can't think of right now I am sure: If you aren't both 100% in sync with these questions then do not do it. I never understand why some people would buy with a girlfriend/boyfriend but not a good personal friend. You're more likely to have a falling out with your significant other then a long time close friend. My advice, have honest, open conversations, about all possible scenarios. If you feel necessary put somethings down into some sort of legal agreement - with us it was not, and still isn't necessary.", "title": "" }, { "docid": "068924eb9246321883828a7b0dcc2acc", "text": "\"I'll chime in here with the \"\"don't do it crowd.\"\" I think it's fraught with ugly possibilities. However, you may, for various reasons, decide to say, \"\"to hell with it, we'll make it work.\"\" If that is the case, treat it like a business transaction and not an emotional transaction. Work up a binding contract with your attorney for how the two of you will handle issues such as: Of absolutely critical importance is the bail-out clause: how will you handle it when one person says, \"\"Sayonara.\"\" None of this ensures a smooth road - god knows I wouldn't do it - but it could help protect your sanity and some of your investment down the road. Good luck.\"", "title": "" }, { "docid": "53290873dfd856411598430966f918f6", "text": "I did this about 8 years ago with a buddy in Chicago for the reasons specified in the original post. As other posters have suggested, we discussed a lot of the same questions listed above, figured out the possible scenarios, and then had a lawyer draw up a contract. We bought a 3 bedroom house, and rented out the 3rd bedroom. Overall, it was a great experience. We both built equity while having a renter pay a third of the mortgage. Plus the property tax and interest on the loan were tax deductible. Compared with renting an apartment, it made us a lot more money. In the end, we sold the house, and split the profits. Assuming you have the personalities to make it work, I say go for it.", "title": "" }, { "docid": "b564a2afd57d6a5281c9edc56494995e", "text": "A real life experience. A friend of mine did that with his housemates. They bought a house together as students and it worked for them. The tricky bit is to have a very good contract with your housemates as to how the venture should work. What if? Somebody can't pay, somebody can't enjoy the house (on an extended trip), somebody wants out (marriage, etc.) It worked for my friend...", "title": "" }, { "docid": "2681455c470c3c82c7109f331a923077", "text": "I'd be curious to compare current rent with what your overhead would be with a house. Most single people would view your current arrangement as ideal. When those about to graduate college ask for money advice, I offer that they should start by living as though they are still in college, share a house or multibedroomed apartment and sack away the difference. If you really want to buy, and I'd assume for this answer that you feel the housing market in your area has passes its bottom, I'd suggest you run the numbers and see if you can buy the house, 100% yours, but then rent out one or two rooms. You don't share your mortgage details, just charge a fair price. When the stars line up just right, these deals cost you the down payment, but the roommates pay the mortgage. I discourage the buying by two or more for the reasons MrChrister listed.", "title": "" }, { "docid": "fb87706cd903e858598cdcafc585d6f1", "text": "Sure, form an LLC with an attorney's advice. You need a buyout clause, operating agreement, etc. If you're not married, never buy a home for personal use with someone else.", "title": "" }, { "docid": "93f5ad59c8cf28ccf4ee874538c5d7cb", "text": "There are lots of good reasons not to do this. HOWEVER if you do decide to, there are four things you need to consider:", "title": "" } ]	[ { "docid": "bb90855308bded6bdcea451a5624a0fe", "text": "\"There are a number of reasons I'm in agreement with \"\"A house that is worth $300,000, or $50,000 of equity in a house and $225,000 in the bank.\"\" So, the update to the first comment should be \"\"A paid off house worth $300K, or a house with $150K equity and $275K in the retirement account.\"\" Edit - On reflection, an interesting question, but I wonder how many actually have this choice. When a family budgets for housing, and uses a 25% target, this number isn't much different for rent vs for the mortgage cost. So how, exactly do the numbers work out for a couple trying to save the next 80% of the home cost? A normal qualifying ration allows a house that costs about 3X one's income. A pay-in-full couple might agree to be conservative and drop to 2X. Are they on an austerity plan, saving 20% of their income in addition to paying the rent? Since the money must be invested conservatively, is it keeping up with house prices? After 10 years, inflation would be pushing the house cost up 30% or so, so is this a 12-15 year plan? I'm happy to ignore the tax considerations. But I question the math of the whole process. It would seem there's a point where the mortgage (plus expenses) add up to less than the rent. And I'd suggest that's the point to buy the house.\"", "title": "" }, { "docid": "f87fe8e98e124dc629edf77abcd2f338", "text": "Considering your question, I have been in the market for a house to buy. There is a house that I like and I wanted to know if I could afford it. You state your Assets: Awesome! Current Income: Great job putting $1000/month into your 401k! That is $12,000/year saved for retirement. Excellent! Current expenses: Why do you want to buy a house for more than 4x your gross income, and 3x median house price (U.S.)? Are you planning on living in the house for at least 5-7 years? There is a risk that interest rates will rise, and that will affect your ability to sell the house. Expected expenses: Adding your other essentials, You are considering increasing your expenses by $1000-1200/month. Looking at the amounts you quoted for direct housing expenses, you will have committed $2600/month to a mortgage payment. Adding your other estimated essentials, you will spend over $3700/month (leaving $2200/month for everything else). You may have higher utilities for a house than an apartment, you are doing well with your food budget, and your cellphone is lower than many. You anticipate $650/month ($7800/year) tax savings (be careful, congress is looking for ways to increase tax revenue). You want to keep your essential expenses under 50% (much more than 50% is difficult, and I am trying to get to 40%). You may live in an area where housing costs are an out-sized expense. But an option would be to save more, and a larger down payment could lower the monthly expenses below that 50% mark.", "title": "" }, { "docid": "ff1b45edc4eca37b570b308f78dab670", "text": "\"The house that sells for $200,000 might rent for a range of monthly numbers. 3% would be $6000/yr or $500/mo. This is absurdly low, and favors renting, not buying. 9% is $1500/mo in which case buying the house to live in or rent out (as a landlord) is the better choice. At this level \"\"paying rent\"\" should be avoided. I'm simply explaining the author's view, not advocating it. A quote from the article - annual rent / purchase price = 3% means do not buy, prices are too high annual rent / purchase price = 6% means borderline annual rent / purchase price = 9% means ok to buy, prices are reasonable Edit to respond to Chuck's comment - Mortgage rates for qualified applicants are pretty tight from low to high, the 30 year is about 4.4% and the 15, 3.45%. Of course, a number of factors might mean paying more, but this is the average rate. And it changes over time. But the rent and purchase price in a given area will be different. Very different based on location. See what you'd pay for 2000 sq feet in Manhattan vs a nice town in the Mid-West. One can imagine a 'heat' map, when an area might show an $800 rent on a house selling for $40,000 as a \"\"4.16\"\" (The home price divided by annual rent) and another area as a \"\"20\"\", where the $200K house might rent for $1667/mo. It's not homogeneous through the US. As I said, I'm not taking a position, just discussing how the author formulated his approach. The author makes some assertions that can be debatable, e.g. that low rates are a bad time to buy because they already pushed the price too high. In my opinion, the US has had the crash, but the rates are still low. Buying is a personal decision, and the own/rent ratios are only one tool to be added to a list of factors in making the decision. Of course the article, as written, does the math based on the rates at time of publication (4%/30years). And the ratio of income to mortgage one can afford is tied to the current rate. The $60K couple, at 4%, can afford just over a $260K mortgage, but at 6%, $208K, and 8%, $170K. The struggle isn't with the payment, but the downpayment. The analysis isn't too different for a purchase to invest. If the rent exceeds 1% of the home price, an investor should be able to turn a profit after expenses.\"", "title": "" }, { "docid": "f9ad0656b5ebff9bb89342abd2b89beb", "text": "Wrong way round. Transitional arrangements are non-binding guidelines that the lenders can observe if they choose to. The borrower - like your friend - doesn't get to choose whether to use them or not. Your friend obviously can't afford the property, so if you do this, all I can say is congratulations on buying your new house, and I hope you got a deal on the mortgage.", "title": "" }, { "docid": "e4afa45e3f9c7762c55cd7b3460f6b61", "text": "In the situation you describe, I would strongly consider purchasing. Before purchasing, I would do the following: Think about your goals. Work with good people. Set a budget. Be able to handle surprises. If buying a home makes sense, you can do the following after buying:", "title": "" }, { "docid": "9dcde1f44c58e9694cf6dd845c37d03b", "text": "Having someone else paying you rent is always going to be the better deal financially. The question is, what does $450k buy in the neighborhood in which you want to live, vs $800k? I'm going to assume you can afford either option (buying a $450k home and not selling, or an $800k home and selling your current one) whether someone's paying you rent or not. Let's make up some numbers here; a $450k home, financed 80/20 (360k principal) at 4% for 30 years will cost you about $1720 in P&I payments per year (plus escrows such as RE taxes, PMI, and homeowners insurance where applicable). An $800k home financed 80/20 (640k principal) at 4% for 30yr will give you payments of about $3,055/mo before taxes and insurance. So, the worst case overall is that you buy a 450k home in the new neighborhood and are not, at any given time, collecting rent on the old property. That would (assuming the mortgage terms on both home loans were comparable) cost you $3440/mo and you'd be living in a $450k home in a neighborhood where 450k may not buy a home as nice as the one you moved out of. The question as I stated above is this; assuming you had a reliable tenant in your home for the entire remaining life of the loan on your current home, which is more acceptable to you: buying $450k of home (which might be a downgrade in sqft or amenities) and paying $2020 in P&I, or paying about a grand more ($3055/mo) for a much nicer home in the new location? Strictly from a money perspective, the renter is going to be the best option, IF you get reliable tenancy for the entire life of the mortgage on that house; you'll be paying $2020/mo for 30 years, which is $727,200, to end up with $950k of total home value (plus adjustments for actual home value appreciation/depreciation). That's the only way you'll come out ahead on any mortgage; have someone else pay most of it for you. If you don't rent, the $800k home will cost you $1,099,800, while two $450k homes will cost you $1,454,400. The percentage of home value over total payments for the 800k home would be 72% (you will have paid 137% of the value of the home), while you will have paid 153% of the value of two 450k homes.", "title": "" }, { "docid": "69cf9c7daa08918e2890331a8d1b7f07", "text": "Adding to what others have said, if the mortgage for the new house is backed by the federal government (e.g., through FHA or is to be sold to Fannie Mae/Freddie Mac) you would be violating 18 USC § 1001, which makes making intentionally false statements to any agent or branch of the federal government a crime punishable by up to 5 years' imprisonment. The gift letter you are required to sign will warn you of as much. Don't do it, it's not worth the risk of prison time.", "title": "" }, { "docid": "8235e95dbdf4a3ee49fa95b34de43948", "text": "The main point to consider is that your payments toward your own home replace your rent. Any house or apartment you buy will have changes in value; the value is generally going slowly up, but there is a lot of noise, and you may be in a low phase at any time, and for a long time. So seeing it as an investment is not any better than buying share or funds, and it has a much worse liquidity (= you cannot as easily make it to cash when you want to), and not in parts either. However, if you buy for example a one-room apartment for 80000 with a 2% mortgage, and pay 2% interest = 1600 plus 1% principal = 800, for a total of 2400 per year = 200 per month, you are paying less than your current rent, plus you own it after 30 years. Even if it would be worth nothing after 30 years, you made a lot of money by paying half only every month, and it probably is not worthless. You need to be careful not to compare apples with oranges - if you buy a house for 200000 instead, your payments would be higher than your rent was, but you would be living in your house, not in a room. For most people, that is worth a lot. You need to put your own value to that; if you don't care to have a lot more space and freedom, the extra value is zero; if you like it, put a price to it. With current interest rates, it is probably a good idea for most people to buy a house that they can easily afford instead of paying rent. The usual rules should be considered - don't overstretch yourself, leave some security, etc. Generally, it is rather difficult to buy an affordable house instead of renting today and not saving a lot of money in the process, so I would say go for it.", "title": "" }, { "docid": "933d4d77ab71aaf0bdb5e1d198ab6f1b", "text": "When I bought my own place, mortgage lenders worked on 3 x salary basis. Admittedly that was joint salary - eg you and spouse could sum your salaries. Relaxing this ratio is one of the reasons we are in the mess we are now. You are shrewd (my view) to realise that buying is better than renting. But you also should consider the short term likely movement in house prices. I think this could be down. If prices continue to fall, buying gets easier the longer you wait. When house prices do hit rock bottom, and you are sure they have, then you can afford to take a gamble. Lets face it, if prices are moving up, even if you lose your job and cannot pay, you can sell and you have potentially gained the increase in the period when it went up. Also remember that getting the mortgage is the easy bit. Paying in the longer term is the really hard part of the deal.", "title": "" }, { "docid": "116bc8e0713546aaf5c0be5a63134aae", "text": "between two people purchasing a house together, one with good and one with bad credit, will having both persons on the loan raise the interest rates. If the house deed is on both names, generally the Bank would insist the loan should also be on both of your names. This to ensure that Bank has enough leverage to recover the house in case of default. If one of you has bad credit, bank would raise the interest rate, assumption that bad credit would drag the good credit and force him to some activities / actions that could stretch the finance of one with good credit. If timely payments are not made, it would make your good credit to bad. If the house deed is on only on your name and you can get the loan on your own, this would be a better position. If the house deed is on only on your name and you would like to loan to be on both names, then the positive side is credit score of the person with bad credit would start showing improvement over period, provided both of you make timely payments. As pointed out by keshlam, there are enough question where people have entered into agreement without deciding what would happen if they separate. There is no right / wrong answer. It would be best you decide how it would be with respect to the ownership in the house and with respect to payments and if in worst case you part ways, how the settlement should look like.", "title": "" }, { "docid": "58027dd226e3ccd44f3b4b10ae0a40ad", "text": "You may want to start a company for a few reasons, the main one would be liability, you don't want your friend to drop a weight on a foot and sue you for millions taking your house away. You'd need to pay taxes on the income, that's after you pay all your expenses, bills, mortgage interest, insurance premiums (!), equipment depreciation. So it's going to be a lot less than you collect from your friends. Whether you incorporate or not you have to pay taxes on your income. If it's $200/year IRS may not notice that, if it's $20K a month it would be very hard to hide. If you pay your friends more than some amount (check the laws) you'd need to tell IRS about it (issue 1099-misc), then your friends must pay taxes on that income.", "title": "" }, { "docid": "a2fdf74a17ba25e4650efadf59e8b366", "text": "The first and most important thing to consider is that this is a BUSINESS TRANSACTION, and needs to be treated as such. Nail down Absolutely All The Details, specifically including what happens if either of you decides it's time to move and wants to sell off your share of the property. Get at least one lawyer involved in drawing up that contract, perhaps two so there's no risk of conflict of interest. What's your recourse, or his, if the other stops making their share of the payments? Who's responsible for repairs and upkeep? If you make renovations, how does that affect the ownership percentage, and what kind of approval do you need from him first, and how do you get it, and how quickly does he have to respond? If he wants to do something to maintain his investment, such as reroofing, how does he negotiate that with you -- especially if it's something that requires access to the inside of the house? Who is the insurance paid by, or will each of you be insuring it separately? What are the tax implications? Consider EVERY possible outcome; the fact that you're friends now doesn't matter, and in fact arguments over money are one of the classic things that kill friendships. I'd be careful making this deal with a relative (though in fact I did loan my brother a sizable chunk of change to help him bridge between his old house and new house, and that's registered as a mortgage to formalize it). I'd insist on formalizing who owns what even with a spouse, since marriages don't always last. With someone who's just a co-worker and casual friend, it's business and only business, and needs to be both evaluated and contracted as such to protect both of you. If you can't make an agreement that you'd be reasonably comfortable signing with a stranger, think long and hard about whether you want to sign it at all. I'll also point out that nobody is completely safe from long-term unemployment. The odds may be low, but people do get blindsided. The wave of foreclosures during and after the recent depression is direct evidence of that.", "title": "" }, { "docid": "7319e7d344e18f21491dba0ebe7e93f6", "text": "All of RonJohn's reasons to say no are extremely valid. There are also two more. First, the cost of a mortgage is not the only cost of owning a house. You have to pay taxes, utilities, repairs, maintenence, insurance. Those are almost always hundreds of dollars a month, and an unlucky break like a leaking roof can land you with a bill for many thousands of dollars. Second owning a house is a long term thing. If you find you have to sell in a year or two, the cost of making the sale can be many thousands of dollars, and wipe out all the 'savings' you made from owning rather than renting. I would suggest a different approach, although it depends very much on your circumstances and doesn't apply to everybody. If there is someone you know who has money to spare and is concerned for your welfare (your mention of a family that doesn't want you to work for 'academic reason' leads me to believe that might be the case) see if they are prepared to buy a house and rent it to you. I've known families do that when their children became students. This isn't necessarily charity. If rents are high compared to house prices, owning a house and renting it out can be very profitable, and half the battle with renting a house is finding a tenant who will pay rent and not damage the house. Presumably you would qualify. You could also find fellow-students who you know to share the rent cost.", "title": "" }, { "docid": "6e1bb7601dea531b298bd690f611f754", "text": "A professional home inspection will clue you in on any problems you might be buying, so it's important in any real estate transaction. If the seller finances the loan, you need a lawyer. It might be a nice opportunity - being in the right place at the right time. You just have to investigate all angles.", "title": "" }, { "docid": "62e4e23c542eb03876d301f4dbd2584b", "text": "I've done this, both as one of the renters and (in a different house) as the landlord. I had roommates I had not lived with before though. It's definitely doable, but can get awkward. Some advice in no particular order Make sure you can afford the house on your own. This avoids the awkward situation of making you financially dependent on your friends. Also, it shouldn't be a problem for a 110k house on a 70k salary. Set the rent below market rates. The arrangement should be financially beneficial to everyone, not just yourself. Expect your roommates to leave eventually. These days people will go where job opportunities take them.", "title": "" } ]	fiqa
7e138753d16cec568a2e061fb87db8af	Online transaction - Money taken out late	[ { "docid": "7be1da953541e9ce40e4598da9a824e4", "text": "\"Debit Cards have a certain processing delay, \"\"lag time\"\", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility)\"", "title": "" }, { "docid": "69eacef6ab630c1a74ab135faf233369", "text": "\"When processing credit/debit cards there is a choice made by the company on how they want to go about doing it. The options are Authorization/Capture and Sale. For online transactions that require the delivery of goods, companies are supposed to start by initially Authorizing the transaction. This signals your bank to mark the funds but it does not actually transfer them. Once the company is actually shipping the goods, they will send a Capture command that tells the bank to go ahead and transfer the funds. There can be a time delay between the two actions. 3 days is fairly common, but longer can certainly be seen. It normally takes a week for a gas station local to me to clear their transactions. The second one, a Sale is normally used for online transactions in which a service is immediately delivered or a Point of Sale transaction (buying something in person at a store). This action wraps up both an Authorization and Capture into a single step. Now, not all systems have the same requirements. It is actually fairly common for people who play online games to \"\"accidentally\"\" authorize funds to be transferred from their bank. Processing those refunds can be fairly expensive. However, if the company simply performs an Authorization and never issues a capture then it's as if the transaction never occurred and the costs involved to the company are much smaller (close to zero) I'd suspect they have a high degree of parents claiming their kids were never authorized to perform transactions or that fraud was involved. If this is the case then it would be in the company's interest to authorize the transaction, apply the credits to your account then wait a few days before actually capturing the funds from the bank. Depending upon the amount of time for the wait your bank might have silently rolled back the authorization. When it came time for the company to capture, then they'd just reissue it as a sale. I hope that makes sense. The point is, this is actually fairly common. Not just for games but for a whole host of areas in which fraud might exist (like getting gas).\"", "title": "" } ]	[ { "docid": "dcd4c837882562e73c64f9b4552eb5af", "text": "Honestly, if you're going to restrict the online payment on your card over this, you may as well just restrict it permanently. Because this is definitely not the only time anyone has had an opportunity to retrieve the information on your card. There isn't really that much information on there - anyone taking more than a cursory look could in theory remember it and use it. We're talking waiters and checkout chicks, anytime you've given your card to anyone really. Banks know this. Credit card numbers are not really secure. They factor this in. And they have software for fraud detection - looking at large or unusual transactions and transactions in foreign countries etc. Of course it's not fool proof, but the best thing you can do isn't to cripple your card, but just be a little bit more diligent about checking your statements, making sure the transactions make sense. Some banks also allow you to set up an alert system so anytime any transactions occur you are notified immediately.", "title": "" }, { "docid": "4f775c51a4bfb6b037a1b0f2153c5a9d", "text": "\"Your bank uses ClearXchange, not you. It is not a website where you open an account, like many others, but an inter-bank transfer system based on email addresses, kind of like free wire transfers between everyone. You don't have to set anything up, just accept the payment, and the money appears in your account (assuming the client used the email address your bank has on file for you). However, if you still don't want it, you can just ignore it. There is a timeout when his transaction gets auto-cancelled, and he gets his money back. Here is an example text from the 'fine print' (my highlighting): \"\"[...]We will continue our attempts by sending a second notice of a transfer to the recipient, and providing the recipient a period of nine (9) succeeding Business Days to register in the Service, or the person-to-person payment service of clearXchange, Zelle or a Network Bank. At the end of this period, if the recipient still has not registered, the transfer request will be Cancelled. The sender may cancel the transfer at any time during this ten (10) day period if the recipient is not registered at the time of cancellation.[...]\"\" (https://chaseonline.chase.com/Public/Misc/LAContent.aspx?agreementKey=chasenet_la)\"", "title": "" }, { "docid": "254b29225b915be822ea4a883a43a442", "text": "\"There are, in fact, two balances kept for your account by most banks that have to comply with common convenience banking laws. The first is your actual balance; it is simply the sum total of all deposits and withdrawals that have cleared the account; that is, both your bank and the bank from which the deposit came or to which the payment will go have exchanged necessary proof of authorization from the payor, and have confirmed with each other that the money has actually been debited from the account of the payor, transferred between the banks and credited to the account of the payee. The second balance is the \"\"available balance\"\". This is the actual balance, plus any amount that the bank is \"\"floating\"\" you while a deposit clears, minus any amount that the bank has received notice of that you may have just authorized, but for which either full proof of authorization or the definite amount (or both) have not been confirmed. This is what's happening here. Your bank received notice that you intended to pay the train company $X. They put an \"\"authorization hold\"\" on that $X, deducting it from your available balance but not your actual balance. The bank then, for whatever reason, declined to process the actual transaction (insufficient funds, suspicion of theft/fraud), but kept the hold in place in case the transaction was re-attempted. Holds for debit purchases usually expire between 1 and 5 days after being placed if the hold is not subsequently \"\"settled\"\" by the merchant providing definite proof of amount and authorization before that time. The expiration time mainly depends on the policy of the bank holding your account. Holds can remain in place as long as thirty days for certain accounts or types of payment, again depending on bank policy. In certain circumstances, the bank can remove a hold on request. But it is the bank, and not the merchant, that you must contact to remove a hold or even inquire about one.\"", "title": "" }, { "docid": "15e81937680d2671eb52c2d6fc94e93e", "text": "If the debit card is associated with the account, there is nowhere else it could go. The chance is nil that there is another account with that 16-digit number. So either it goes there, or the transfer fails and it is right back where it came from, though this could take some days. If you don't want to risk a wait, talk to your bank now.", "title": "" }, { "docid": "4fd0d70975a9e25e6f4df9b653ffceee", "text": "\"I cannot answer the original question, but since there is a good deal of discussion about whether it's credible at all, here's an answer that I got from Bank of America. Note the fine difference between \"\"your account\"\" and \"\"our account\"\", which does not seem to be a typo: The payment method is determined automatically by our system. One of the main factors is the method by which pay to recipients prefer to receive payments. If a payment can be issued electronically, we attempt to do so because it is the most efficient method. Payment methods include: Electronic: Payment is sent electronically prior to the \"\"Deliver By\"\" date. The funds for the payment are deducted from your account on the \"\"Deliver By\"\" date. Corporate Check: This is a check drawn on our account and is mailed to the pay to recipient a few days before the \"\"Deliver By\"\" date. The funds to cover the payment are deducted from your account on the \"\"Deliver By\"\" date. *Laser Draft Check: This is a check drawn on your account and mailed to the pay to recipient a few days before the \"\"Deliver By\"\" date. The funds for the payment are deducted from your account when the pay to recipient cashes the check, just as if you wrote the check yourself. To determine how your payment was sent, click the \"\"Payments\"\" button in your Bill Pay service. Select the \"\"view payment\"\" link next to the payment. Payment information is then displayed. \"\"Transmitted electronically\"\" means the payment was sent electronically. \"\"Payment transaction number\"\" means the payment was sent via a check drawn from our account. \"\"Check number\"\" means the payment was sent as a laser draft check. Each payment request is evaluated individually and may change each time a payment processes. A payment may switch from one payment method to another for a number of reasons. The merchant may have temporarily switched the payment method to paper, while they update processing information. Recent changes or re-issuance of your payee account number could alter the payment method. In my case, the web site reads a little different: Payment check # 12345678 (8 digits) was sent to Company on 10/27/2015 and delivered on 10/30/2015. Funds were withdrawn from your (named) account on 10/30/2015. for one due on 10/30/2015; this must be the \"\"corporate check\"\". And for another, earlier one, due on 10/01/2015, this must be the laser draft check: Check # 1234 (4 digits) from your (named) account was mailed to Company on 09/28/2015. Funds for this payment are withdrawn from your account when the Pay To account cashes the check. Both payments were made based on the same recurring bill pay payment that I set up manually (knowing little more of the company than its address).\"", "title": "" }, { "docid": "5b213dd622dfb92ca43339dad0d9a256", "text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"", "title": "" }, { "docid": "59ffc40b4113b4fcee9b4be04039d9c9", "text": "As a general premise: In most of the online transactions in case of dispute the benefit of doubt is given to the customer. IE if the customer refuses to pay and claims that its not his transaction, the card company reverses the charges and does not pay the merchant (or recovers if its already paid). There are many types of online vendors who use a variety of methods to ensure that they are not at loss. Some of these are:", "title": "" }, { "docid": "3fdb07dc08015b2b1f9f1c3c89777d96", "text": "\"The simplest answer to why you can't see it in your online statement is a design/business decision that was made, most probably originally to make online statements differ as little as possible from old fashioned monthly printed statements; the old printed statements never showed holds either. Some banks and card services actually do show these transactions online, but in my experience these are the rare exceptions - though with business/commercial accounts I saw this more, but it was still rare. This is also partly due to banks fearing lots of annoying phone calls from customers and problems with merchants, as people react to \"\"hey, renting that car didn't cost $500!\"\" and don't realize that the hold is often higher than the transaction amount and will be justified in a few days (or weeks...), etc - so please don't dispute the charges just yet. Behind the scenes, I've had bankers explain it to me thusly (the practice has bitten me before and it bothered me a lot, so I've talked to quite a few bankers about this): There are two kinds of holds: \"\"soft holds\"\" and \"\"hard holds\"\". In a soft hold, a merchant basically asks the bank, \"\"Hey, is there at least $75 in this account?\"\" The bank responds, and then has it's own individually set policy per account type as to how to treat that hold. Sometimes they reserve no money whatsoever - you are free to spend that money right out and rack up NSF fees to your heart's content. Yet some policies are to treat this identically to a hard hold and keep the money locked down until released. The hard hold is treated very much like an actual expenditure transaction, in that the money is locked and shown as no longer available to you. This varies by bank - some banks use an \"\"Account Balance\"\" and an \"\"Available Balance\"\", and some have done away with these dual terms and leave it up to you to determine what your balance is and what's \"\"available\"\" (or you have to call them). The key difference in the hard hold and a real expenditure is, technically, the money is still in your bank account; your bank has merely \"\"reserved\"\" it, earmarking it for a specific purchase (and gently promising the merchant they can have their money later), but the biggest difference is there is a time-limit. If a merchant does not process a completion to the transaction to claim the money, your bank will lift the hold after a period of time (I've seen 7-30 days as typical in the US, again varying by institution) returning your money to your balance that is available for purchasing and withdrawal. In every case, any vaguely decent banking institution allows you to call them, speak to some bank employee, and they can look up your account and inform you about the different sort of holds that are on your account that are not pending/completed purchase transactions. From a strictly cynical (perhaps rightly jaded) point of view, yes this is also used as a method to extort absurdly high fees especially from customers who keep a low balance in their account. I have had more than one bank charge NSF fees based on available balances that were due to holds made by gas pumps, for instance, even though my actual \"\"money in my account\"\" never went below $0 (the holds were for amounts larger than the actual transaction). And yes, the banks usually would waive those fees if you bothered to get someone on the phone or in person and made yourself a nuisance to the right person for long enough, but they made you work for it. But I digress.... The reality is that there are lots of back and forth and middle-men in transactions like this, and most banks try to hide as much of this from you the client as possible, partly because its a huge confusing hassle and its part of why you are paying a bank to handle this nonsense for you to start with. And, as with all institutions, rules and policies become easily adjusted to maximize revenues, and if you don't keep sizable liquid minimum balances (100% of the time, all year long) they target you for fees. To avoid this without having fat wads of extra cash in those accounts, is use an entirely disconnected credit card for reservations ONLY - especially when you are traveling and will be making rentals and booking hotels. Just tell them you wish to pay with a different card when you are done, and most merchants can do this without hassle. Since it's a credit card with monthly billing you can often end up with no balance, no waiting around for a month for payments to clear, and no bank fees! It isn't 100%, but now I never - if I can possibly avoid it - use my debit/bank card to \"\"reserve\"\" or \"\"rent\"\" anything, ever.\"", "title": "" }, { "docid": "18b7559a6edda684caf66c1f0c3a4e40", "text": "\"Your bank will undoubtedly charge you a fee for the \"\"chargeback\"\" and so while you will get your money back faster, you will likely end up with less than you would if you were not so impatient and just waited a few days for the refund to show up. I suppose it depends on whether you consider this a downside or not.\"", "title": "" }, { "docid": "460dca0b3e5b5f08a08830116926fea6", "text": "The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank.", "title": "" }, { "docid": "362f05a523b3b1facc4c35235924f422", "text": "That's how my power company does it. You authorize them to direct debit recurring monthly. If they screw up and withdraw $1000, you're out until it gets fixed. But it varies from company to company. Not everyone's situation is like your online banking.", "title": "" }, { "docid": "7e10f9fb1ebe25140c06de0de01657db", "text": "He has my bank account info, and I just want to know where I stand legally. Legally you can't keep the money. It would either go back to the originator or to Government unclaimed department. I got a bunch of missed calls from an unknown number and a really unprofessional email from a guy who supposedly worked for UNICEF saying I had 4 hours until I am suppose to be visited by police and that there was nowhere I could run to. These are common tactics employed to ensure you take some action and transfer the real money somewhere. Do not succumb to such tactics. The money is still in my account I have not touched it. Advise your Bank immediately that there is this deposit into your account that is not your's. Let the bank take appropriate action. Do not authorize Bank to debit your account. The max you can do is authorize the bank to reverse this transaction. The best is stick to statement that said transaction is not yours and Bank is free to do what is right. There is a small difference and very important. If you authorize bank to debit, you have initiated a payment. So if the original payment were revered by originator bank, you are left short of money. However if your instructions are very clear, that this specific transaction can be reversed, you cannot be additionally debited if this transaction is reversed. He has my bank account info, Depending on how easy / difficult, my suggestion would be monitor this account closely, best is if you can close it out and open a new one.", "title": "" }, { "docid": "62eb9305ec5ccbdfe1d0dd52c7dd9840", "text": "When you swipe your credit card, the terminal at the store makes a request of your bank, and your bank has only a few seconds to accept or reject the transaction. Once the transaction is accepted by your bank, it appears in the Pending transactions. At the end of the business day, the store submits all of the final transactions for the day to their bank in a batch, and the banks all trade transactions in a batch, and money is sent between banks. This is the process that takes a couple of days, and after this happens, you see the transaction move from your Pending transactions into the regular transactions area. Most of the time, the pending transaction and the final transaction are the same. However, there are cases where it is different. A couple of examples: With a credit account, the fact that the final amount is not known for a few days is no big deal: after all, you don't have any money in the account, and if you end up spending more than you have, the bank will happily let you take your time coming up with the money (at a steep cost, of course). With a debit card tied to your checking account, the transaction is handled the same way, as far is the store is concerned. However, your bank is not going to run the risk of you overdrawing your checking account. They also are not going to run the risk of you withdrawing money from your account that is needed to cover pending transactions. So they usually treat these pending transactions as final transactions, deducting the pending transaction from your account balance immediately. When the final transaction comes through, they adjust the transaction, and your balance goes up or down accordingly. This is one of the big drawbacks to using a debit card, in my opinion. If a bad pending transaction comes through, you are out this money until it gets straightened out.", "title": "" }, { "docid": "0088551e56693f9713c06610f68b44f1", "text": "You can't make your bank do a charge back. This function is to assist with straight up fraud, not a customer service mistake. (Think spoofed or stolen card or if a vendor intentionally acted fraudulently.) While you may believe what they did is fraud, your bank will require that you provide the vendor with the opportunity to rectify the situation themselves. Trying to call back and giving up after a long hold time won't meet their standards. If banks started letting anyone unhappy with a vendor start doing charge backs, they would be doing nothing else all day. The issues you're describing has not reached the threshold for the bank to authorize a charge back. Comcast has local and regional offices, and you could go in person to speak with someone. Maybe there isn't one near you. There are non-peak hours which wait times will be less. You'll just have to grin and bear it if you truly want the money back. Then, take your business elsewhere and post bad reviews online. Always keep in mind that when you eventually speak with someone, they will not be the person that messed up, and you should be overly nice and polite to them. I promise it will yield far better results than being surly and demanding. Another way to get Comcast's attention would be to file a complaint with the BBB. It might take longer, but I've had this work with big companies, usually with good results. Again, be nice to whomever contacts you. In reference to your recent duplicate question: Mastercard won't be able to help at all. They play no part in the transaction at all.", "title": "" }, { "docid": "0fe8ad531b8303ea06ea6b21256025fe", "text": "I don't believe Saturday is a business day either. When I deposit a check at a bank's drive-in after 4pm Friday, the receipt tells me it will credit as if I deposited on Monday. If a business' computer doesn't adjust their billing to have a weekday due date, they are supposed to accept the payment on the next business day, else, as you discovered, a Sunday due date is really the prior Friday. In which case they may be running afoul of the rules that require X number of days from the time they mail a bill to the time it's due. The flip side to all of this, is to pick and choose your battles in life. Just pay the bill 2 days early. The interest on a few hundred dollars is a few cents per week. You save that by not using a stamp, just charge it on their site on the Friday. Keep in mind, you can be right, but their computer still dings you. So you call and spend your valuable time when ever the due date is over a weekend, getting an agent to reverse the late fee. The cost of 'right' is wasting ten minutes, which is worth far more than just avoiding the issue altogether. But - if you are in the US (you didn't give your country), we have regulations for everything. HR 627, aka The CARD act of 2009, offers - ‘‘(2) WEEKEND OR HOLIDAY DUE DATES.—If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’’. So, if you really want to pursue this, you have the power of our illustrious congress on your side.", "title": "" } ]	fiqa
ec8c1e67e5b7b3de724e608af68bc636	Does a growing economy mean the economy is becoming less efficient?	[ { "docid": "c3ee2200952b082f62092d65b776999e", "text": "It's a kook movie made by folks who combine conspiracy quackery with repackaged socialism. If you're into socialist theory, read Marx or some other intellectual socialist. That said, growth and efficiency are not the same thing. If I'm running a lemonade stand, I can grow by hiring more people at $X/hr or increase efficiency by purchasing an electric juicer and hiring fewer people.", "title": "" }, { "docid": "5da547d40bc58ce938dde6001001f3f8", "text": "Growth and efficiency can occur independently of each other. For instance, if an economy consists of one inefficient business and then a second more efficient business opens to compete agains the first the overall efficiency increases while the economy grows. New industries tend to be inefficient at the beginning (since initiation is more important than optimisation) and then become more efficient over time. Agriculture is an amazingly efficient business if you consider how many people now produce the amount of food we consume in comparison to only 100 years ago. Plus, efficiency is not only about producing extra widgets. You could produce the same number of widgets for lower cost. Outsourcing to China (taking advantage of their lower cost of production) increases the efficiency of the US economy, but also increases the efficiency of the Chinese economy (since extra work is created producing more things). Lower costs in the US lead to increased investment in other production. Increased production in China leads to the rising wages there. Growth can be achieved in both places for very different reasons. So, no, growth doesn't have to come about through less efficiency.", "title": "" }, { "docid": "460d85a7c8ff70a578985dbad0479ede", "text": "A growing economy should become more efficient because of increased opportunity for division of labor: specialization. External regulation or monetary policy external to the free market can cause parts of the economy to grow in response to said regulations. This creates inefficiencies that are wrung out of the economy after the policies reverse. A couple of examples: Tinkering with the economy causes the inefficiencies.", "title": "" } ]	[ { "docid": "ec7ef0fd83a1c0b24e84f61e5576178f", "text": "I don't understand your question. What the article is talking about is a bit more than circulating money indiscriminately. It is saying that by circulating more of it to rich and less to the poor will result in less growth overall, which I think we can all agree is a bad thing.", "title": "" }, { "docid": "636c82034cad8c30b43c9f13cad4e238", "text": "\"The U.S. economy has grown at just under 3% a year after inflation over the past 50 years. (Some of this occurred to \"\"private\"\" companies that are not listed on the stock market, or before they were listed.) The stock market returns averaged 7.14% a year, \"\"gross,\"\" but when you subtract the 4.67% inflation, the \"\"net\"\" number is 2.47% a year. That gain corresponds closely to the \"\"just under 3% a year\"\" GDP growth during that time.\"", "title": "" }, { "docid": "ae970d86fb613a52eccde066988c16a8", "text": "that was not the argument posited, and it would be superfluous if it were. it does nothing to challenge hanauers argument, as hanauer acknowledges this tenet which further informs his broader view that this phenomenon results in the absence of economic growth.", "title": "" }, { "docid": "17361070131059b6ba867cba09f1d51b", "text": "The President, Democrat or Republican, has very little effect on the growth or performance of an economy. The Federal Reserve has the largest impact, followed by Congress. Interestingly, if US government spending was not frozen in 2010, the US would have grown closer to the historical average of 3%. Government spending, which is controlled by Congress, brought down GDP growth.", "title": "" }, { "docid": "612503d4c8d6c15915c1625fbdbd65ce", "text": "OMG. A recession is coming. Wait...hasn't that been a true statement since forever? No shit a recession is coming. That's like saying a thunderstorm is coming. This is a natural part of economics. Recessions are a necessary part of growth, almost like growing pains. Now the real question is 'when will the recession happen.' However nobody truly knows that, so it's better to spend your efforts making sure you're prepared for when a recession occurs as opposed to worrying about when that will happen.", "title": "" }, { "docid": "2e0a3ac799b763902f5b4ec1ae24189f", "text": "we have massive numbers of people out of work and our infrastructure is crumbling. We put people to work just like we did in the 30's; our infrastructure gets fixed and so does our economy. I totally agree that for an economy to grow we have to make more stuff. We're not making the stuff now because people cannot afford to purchase it. If given funds, people would purchase stuff, and stuff would get made. This got us out of them great depression and has kept Scandinavia strong, and even got Iceland out of it's terrible brush with Libertarianism. Brazil is becoming a first world powerhouse by this sort of redistribution. Redistributing money down the ladder has the benefit of working. Austerity leads to Greece. And Spain. And Portugal. And Ireland. But not Germany, because they deficit-spent their way out of their recession.", "title": "" }, { "docid": "801125f5adf1109ba87736274e2082da", "text": "\"Wealth is not distributed equally in any economy. And, even if it were, differentiation between people would lead to different interests being expressed in different ways. As people either attempt to earn more (to improve their situation) or different people express those interests in different ways (saving money to go on a skiing holiday, or to put a downpayment on a house) people invite new products and services to be created to satisfy those demands. In addition, there is the problem of uncertainty. People save money today to cope with uncertainty tomorrow (healthcare, pensions, education, etc.). Those savings don't remain idle, but are lent to others who believe that they can make a return through investing in new businesses or ideas. The point being that any dynamic economy will experience change in the amount of goods available to the people within that economy. From an economic perspective \"\"growth\"\" is just another permutation. From a political perspective, \"\"growth\"\" implies that people are getting wealthier. If that growth is asymmetrically distributed (e.g. the poor don't experience it and the middle classes don't feel they get enough of it) then that is a problem for politicians. The emerging markets of the world are trying to raise millions of people out of poverty. Growth is a way of measuring how quickly they are achieving that end. Growth, in and of itself, is meaningless. There are some people who believe that \"\"we\"\" (as some proxy of society) have enough stuff and growth is unnecessary but that implies that everyone is satisfied. For as long as some people wish to have more wealth/stuff, and have the means to achieve this, there will be growth. And for as long as there is uncertainty growth will vary.\"", "title": "" }, { "docid": "dc669c07c7a6d3fd0cfcb328b92be3ba", "text": "\"I'm not defending Faber, but from an statistical point your logic is terrible. It's a lot easier to go from 2 to 4 than it is from 200 to 400 - so any undeveloped third-world country should be growing a lot faster than places with existing stable economies. And to put \"\"fastest growing\"\" into context, it's 8.5%, which isn't even as big as I was expecting considering the US is growing at 3% and has a much larger base value.\"", "title": "" }, { "docid": "a15e4181d6f3346f1a74af9ceb01fd59", "text": "No, it doesn't. That would be true if somehow incomes were conserved, but they aren't. What's much more likely is that income growth becomes muted in the first world with the vast majority of income growth happening in developing economies. So, it doesn't require losing income, but it will mean constrained income growth in developed countries.", "title": "" }, { "docid": "9cf796c92ec075db88a0620253a15499", "text": "\"The answer to your question depends on what you mean when you say \"\"growth\"\". If you mean a literal increase in the aggregate market capitalization of companies, across the entire market, then, no, this sort of growth is not possible without concomitant economic growth. The reason why is that the market capitalization of each company is proportional to its gross revenue, and the sum of all revenue from selling \"\"final goods\"\" (i.e., things purchased and used by consumers) is, apart from a few technicalities, the definition of GDP. The exact multiplier might fluctuate up or down depending on investors' expectations about how sales will grow or decline going forward, but in a zero-growth economy this multiplier should be stable over the long run. It might, however, still fluctuate over the short term, but more about that in a minute. Note that all of this applies to aggregate growth across all firms. Individual firms can still grow, of course, but as they must do this by gaining market share from other companies such growth would be balanced by a decline for some other firm. Also, I've assumed zero net exports (that's one of the \"\"technicalities\"\" I mentioned above) because obviously you could have export-driven growth even if the domestic economy were stationary. However, often when people talk about \"\"growth\"\" in the market, what they really mean is \"\"return\"\". That is, how much does your investment earn for you. This isn't really the same thing as growth, but people often think of it that way, particularly in the saving phase of their investing career, when they are reinvesting their returns, and therefore their account balances are growing. It is possible to have a positive return, averaged across the market, even in a stationary economy. The reason why is that there are really only two things a firm can do with its net profits. One possibility is that it could invest it in growing the business. However, there is not much point in doing that in a stationary economy because by assumption no increase in aggregate consumption (and therefore, in the long run, aggregate production) are possible. Therefore, firms are left with only the second option, which is to pay them out to investors as dividends. Those dividends provide a return that is independent of economic growth. Would the stock market still be a good investment in such an economy? Yes. Well, sort of. The rate of return from firms' dividend payouts will depend on investors' demand (in aggregate) for returns on their investments. Stock prices will rise or fall, causing returns to respectively fall or rise, to find that level. If your personal desire for returns is lower than the average across the investing public, then the stock market would look like a good investment. If your desired return is higher than the average, then it will look like a poor investment. The marginal investor will, of course be indifferent. The practical upshot of this is that the people who invest in the stock market in this scenario will be precisely the ones for whom the stock market is a good investment, given their personal propensity to save and desire for returns, and so forth. Finally, you mentioned that in your scenario the GDP stagnation is due to declining population. I am less certain what this means for investment, but my first thought is that you would have a large retired population selling its investments to fund late-life consumption, and you would have a comparatively small (relative to history) working population buying those assets. This would lead to low asset prices, and therefore high rates of return. However, that's assuming that retirees need to sell assets to fund their retirement consumption. If the absolute returns on retirees' assets are large enough to fund their retirement consumption then you would wind up with relatively few sellers, resulting in high prices and therefore relatively low rates of return. It's not obvious to me which effect would dominate, and so it's hard to say whether or not the resulting returns would look attractive to the working-age population.\"", "title": "" }, { "docid": "4eea1266177b47feac63c58f7fe87a70", "text": "Today’s up and coming tech companies are taking value from the existing companies so I believe there can be a net loss. Also, efficiency gains are going to a smaller portion of the population, and if they don’t increase their spending to make up for the decrease in the spending of those who are falling behind, then that might cause a decrease in economic activity. Of course, there are a lot more up and coming people in the word too, so they could very well outnumber those in the US/Western Europe regions.", "title": "" }, { "docid": "c453261c2cf0ac5964870d3679062958", "text": "Some innovations increase productivity quite a bit. So in the long run, innovations is a main driver or economical growth. And innovation is fueled by, indeed, debt. The straight curve in the video, the economical growth, should not be a straight line, but a upwardly curved one. It cannot go down because innovations in productivity are not lost (I challenge you for an example contradicting this. Normally, every upward cycle should create an extra increase in productivity. The government also plays a role in stimulating innovation. I loved this video btw.", "title": "" }, { "docid": "edc8f5acc6acb7c172f0f6631a96b3aa", "text": "You do know that since the shale gas boom started the cost of energy declined significantly, don't you? Your theory is a bit simplistic and had more than a few holes. GDP growth is not that contingent on energy prices. How do you factor in increasing fuel efficiency in your theory?", "title": "" }, { "docid": "55f5cae08ad8656a8f742e86aee56cf7", "text": "While there could be other factors, the chart at the top made me not want to read the article... it's a gain of less than 0.1% in a year in a growing economy. Keep this up and they'll be screwed by 2040.", "title": "" }, { "docid": "362077d02a7056589fbe1c25e18915f3", "text": "\"Check out Irwin Schiff's \"\"How an Economy Grows and Why it Doesn't\"\". It explains how economy's work using a comic format, explaining investment, savings, banking, gov't, taxation,etc, although you may need to be at least 10 to understand some of the concepts. :)\"", "title": "" } ]	fiqa
f612eb51ee229c7d190a5c583f9e2616	How does a Non US citizen gain SEC Accredited Investor Status?	[ { "docid": "8730be753a1406fab4444dcbb40296f3", "text": "Here are the SEC requirements: The federal securities laws define the term accredited investor in Rule 501 of Regulation D as: a bank, insurance company, registered investment company, business development company, or small business investment company; an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; a charitable organization, corporation, or partnership with assets exceeding $5 million; a director, executive officer, or general partner of the company selling the securities; a business in which all the equity owners are accredited investors; a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. No citizenship/residency requirements.", "title": "" } ]	[ { "docid": "6e9ebc57e4df203c6ab584cc9e5ec0ed", "text": "\"First of all, the annual returns are an average, there are probably some years where their return was several thousand percent, this can make a decade of 2% a year become an average of 20% . Second of all, accredited investors are allowed to do many things that the majority of the population cannot do. Although this is mostly tied to net worth, less than 3% of the US population is registered as accredited investors. Accredited Investors are allowed to participate in private offerings of securities that do not have to be registered with the SEC, although theoretically riskier, these can have greater returns. Indeed a lot of companies that go public these days only do so after the majority of the growth potential is done. For example, a company like Facebook in the 90s would have gone public when it was a million dollar company, instead Facebook went public when it was already a 100 billion dollar company. The people that were privileged enough to be ALLOWED to invest in Facebook while it was private, experienced 10000% returns, public stock market investors from Facebook's IPO have experienced a nearly 100% return, in comparison. Third, there are even more rules that are simply different between the \"\"underclass\"\" and the \"\"upperclass\"\". Especially when it comes to leverage, the rules on margin in the stock market and options markets are simply different between classes of investors. The more capital you have, the less you actually have to use to open a trade. Imagine a situation where a retail investor can invest in a stock by only putting down 25% of the value of the stock's shares. Someone with the net worth of an accredited investor could put down 5% of the value of the shares. So if the stock goes up, the person that already has money would earn a greater percentage than the peon thats actually investing to earn money at all. Fourth, Warren Buffett's fund and George Soros' funds aren't just in stocks. George Soros' claim to fame was taking big bets in the foreign exchange market. The leverage in that market is much greater than one can experience in the stock market. Fifth, Options. Anyone can open an options contract, but getting someone else to be on the other side of it is harder. Someone with clout can negotiate a 10 year options contract for pretty cheap and gain greatly if their stock or other asset appreciates in value much greater. There are cultural limitations that prompt some people to make a distinction between investing and gambling, but others are not bound by those limitations and can take any kind of bet they like.\"", "title": "" }, { "docid": "2a8733d681a4084e4ea7750776f7b865", "text": "you dont need any permits or be inside the US to trade the exact same securities on US exchanges. you can literally move your bitcoin from a chinese exchange to us exchange in seconds. i don't see how you can possibly run into legal issues if anyone from outside the country can trade bitcoins on an exchange inside the country without any permit. a lot of these exchanges dont ask for ID or social security number anyways. none of it is government regulated. also trading anything is never a passive income. theres no such thing as an easy or obvious investment. there are always risks- and the actual risk is often deceivingly low", "title": "" }, { "docid": "2343c02755c49de7b8008466b7274762", "text": "You don't need a visa to invest in US equity. You don't need a visa to profit from US equity. There may be other legal considerations, but they aren't visa related, hope that helps", "title": "" }, { "docid": "aad964023bfe20997bec03f865987ce6", "text": "\"Given that such activities are criminal and the people committing them have to hide them from the law, it's very unlikely that an investor could detect them, let alone one from a different country. The only things that can realistically help is to keep in mind the adage \"\"If something sounds too good to be true, it probably is\"\", and to stick to relatively large companies, since they have more auditing requirements and fraud is much harder to hide at scale (but not impossible, see Enron). Edit: and, of course, diversify. This kind of thing is rare, and not systematic, so diversification is a very good protection.\"", "title": "" }, { "docid": "2068ef56056bfdd3913276260dcb0db7", "text": "As far as I know, with ADRs you're essentially trading by proxy -- a depository bank is holding the actual stock certificate, and must provide you with the actual stock on demand. The one thing that is different is that in the event that the ADR is terminated (which sometimes happens with mergers), you have a limited period of time to sell the shares -- otherwise, you get the actual foreign stock that you may or may not be able to trade without transferring to a different broker.", "title": "" }, { "docid": "7e71aab4db2eebd2a6cc2e519ded63c7", "text": "\"Life would be nicer had we not needed lawyers. But for some things - you better get a proper legal advice. This is one of these things. Generally, the United States is a union of 50 different sovereign entities, so you're asking more about Texas, less about the US. So you'd better talk to a Texas lawyer. Usually, stock ownership is only registered by the company itself (and sometimes not even that, look up \"\"street name\"\"), and not reported to the government. You may get a paper stock certificate, but many companies no longer issue those. Don't forget to talk to a lawyer and a tax adviser in your home country, as well. You'll be dealing with tax authorities there as well. The difference between \"\"unoted\"\" (never heard of this term before) and \"\"regular\"\" stocks is that the \"\"unoted\"\" are not publicly traded. As such, many things that your broker does (like tax statements, at source withholding, etc) you and your company will have to do on your own. If your company plans on paying dividends, you'll have to have a US tax ID (ITIN or SSN), and the company will have to withhold the US portion of the taxes. Don't forget to talk to a tax adviser about what happens when you sell the stock. Also, since the company is not publicly traded, consider how will you be able to sell it, if at all.\"", "title": "" }, { "docid": "3a4108de7a8c8f8819cef2931d529cda", "text": "There is a measure of protection for investors. It is not the level of protection provided by FDIC or NCUA but it does exist: Securities Investor Protection Corporation What SIPC Protects SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Most customers of failed brokerage firms when assets are missing from customer accounts are protected. There is no requirement that a customer reside in or be a citizen of the United States. A non-U.S. citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a brokerage firm that is a member of SIPC. SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins. SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments. It is important to recognize that SIPC protection is not the same as protection for your cash at a Federal Deposit Insurance Corporation (FDIC) insured banking institution because SIPC does not protect the value of any security. Investments in the stock market are subject to fluctuations in market value. SIPC was not created to protect these risks. That is why SIPC does not bail out investors when the value of their stocks, bonds and other investment falls for any reason. Instead, in a liquidation, SIPC replaces the missing stocks and other securities when it is possible to do so.", "title": "" }, { "docid": "8a1eeb8bc084a1d378814a548ab4109a", "text": "Usually, you can buy ETFs through brokerages. I looked at London to see if there's any familiar brokerage names, and it appears that the address below is to Fidelity Investments Worldwide and their site indicates that you can buy securities. Any brokerage, in theory, should allow you to invest in securities. You could always call and ask if they allow you to invest in ETFs. Some brokerages may also allow you to purchase securities in other countries; for instance, some of the firms in the U.S. allow investors to invest in the ETF HK:2801, which is not a U.S. ETF. Many countries have ETF securities available to local and foreign investors. This site appears to help point people to brokers in London. Also, see this answer on this site (a UK investor who's invested in the U.S. through Barclays).", "title": "" }, { "docid": "27fcc343ed9d01eac9eb28343ef02044", "text": "\"The IRS W-8BEN form (PDF link), titled \"\"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding\"\", certifies that you are not an American for tax purposes, so they won't withhold tax on your U.S. income. You're also to use W-8BEN to identify your country of residence and corresponding tax identification number for tax treaty purposes. For instance, if you live in the U.K., which has a tax treaty with the U.S., your W-8BEN would indicate to the U.S. that you are not an American, and that your U.S. income is to be taxed by the U.K. instead of tax withheld in the U.S. I've filled in that form a couple of times when opening stock trading accounts here in Canada. It was requested by the broker because in all likelihood I'd end up purchasing U.S.-listed stocks that would pay dividends. The W-8BEN is needed in order to reduce the U.S. withholding taxes on those dividends. So I would say that the ad revenue provider is requesting you file one so they don't need to withhold full U.S. taxes on your ad revenue. Detailed instructions on the W-8BEN form are also available from the IRS: Instruction W-8BEN (PDF link). On the subject of ad revenue, Google also has some information about W8-BEN: Why can't I submit a W8-BEN form as an individual?\"", "title": "" }, { "docid": "3b0513ea719821872a14f80eda6c8c71", "text": "ACWI refers to a fund that tracks the MSCI All Country World Index, which is A market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. The MSCI ACWI is maintained by Morgan Stanley Capital International, and is comprised of stocks from both developed and emerging markets. The ex-US in the name implies exactly what it sounds; this fund probably invests in stock markets (or stock market indexes) of the countries in the index, except the US. Brd Mkt refers to a Broad Market index, which, in the US, means that the fund attempts to track the performance of a wide swath of the US stock market (wider than just the S&P 500, for example). The Dow Jones U.S. Total Stock Market Index, the Wilshire 5000 index, the Russell 2000 index, the MSCI US Broad Market Index, and the CRSP US Total Market Index are all examples of such an index. This could also refer to a fund similar to the one above in that it tracks a broad swath of the several stock markets across the world. I spoke with BNY Mellon about the rest, and they told me this: EB - Employee Benefit (a bank collective fund for ERISA qualified assets) DL - Daily Liquid (provides for daily trading of fund shares) SL - Securities Lending (fund engages in the BNY Mellon securities lending program) Non-SL - Non-Securities Lending (fund does not engage in the BNY Mellon securities lending program) I'll add more detail. EB (Employee Benefit) refers to plans that fall under the Employee Retirement Income Security Act, which are a set a laws that govern employee pensions and retirement plans. This is simply BNY Mellon's designation for funds that are offered through 401(k)'s and other retirement vehicles. As I said before, DL refers to Daily Liquidity, which means that you can buy into and sell out of the fund on a daily basis. There may be fees for this in your plan, however. SL (Securities Lending) often refers to institutional funds that loan out their long positions to investment banks or brokers so that the clients of those banks/brokerages can sell the shares short. This SeekingAlpha article has a good explanation of how this procedure works in practice for ETF's, and the procedure is identical for mutual funds: An exchange-traded fund lends out shares of its holdings to another party and charges a rental fee. Running a securities-lending program is another way for an ETF provider to wring more return out of a fund's holdings. Revenue from these programs is used to offset a fund's expenses, which allows the provider to charge a lower expense ratio and/or tighten the performance gap between an ETF and its benchmark.", "title": "" }, { "docid": "e7b7c93adacde6bc4f0f5a51f59f48c9", "text": "All securities must be registered with the SEC. Securities are defined as (1) The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. thus currencies are not defined as securities. While OTC transactions of securities is not outright forbidden, there are numerous regulations issued by the SEC as a result of the 1943 Exchange Act and others that make this difficult and/or costly. Many other securities are exempted from registration thus trade in a way that could be called OTC. Different countries have variances upon US law but are very similar. Any security could be traded OTC, but law prohibits it expressly or in such a way to make it relatively expensive; further, stock options are so tightly regulated that expiration dates, expiration intervals, strike intervals, and minimum ticks are all set by the authorities.", "title": "" }, { "docid": "6d9303a97a7532a9f39858d68b75bf2a", "text": "Without knowing the specifics it is hard to give you a specific answer, but most likely the answer is no. If they limit the participation in the site to accredited investors, this is probably not something they are doing willingly, but rather imposed by regulators. Acredited investors have access to instruments that don't have the same level of regulatory protection & scrutiny as those offered to the general public, and are defined under Regulation D. Examples of such securities are 144A Shares, or hedgefunds.", "title": "" }, { "docid": "ba94b1b00e70a6501fe7dbcae3af0781", "text": "The UK has historically aggressive financial law, inherited from Dutch friendship, influence, and acquisitions by conquest. The law is so open that nearly anyone can invest through the UK without much difficulty, and citizens have nearly no restrictions on where to invest. A UK citizen can either open an account in the US with paperwork hassles or at home with access to all world markets and less paperwork. Here is the UK version of my broker, Interactive Brokers. Their costs are the lowest, but you will be charged a minimum fee if you do not trade enough, and their minimum opening balance can be prohibitively high for some. If you do buy US products, be sure to file your W-8BEN.", "title": "" }, { "docid": "19c215406af14db05a1acffe9423ae75", "text": "Nothing. Stockbrokers set up nominee accounts, in which they hold shares on behalf of individual investors. Investors are still the legal owners of the shares but their names do not appear on the company’s share register. Nominee accounts are ring-fenced from brokers’ other activities so they are financially secure.", "title": "" }, { "docid": "7fd6d379a23acdd8369d63e87fb51d0e", "text": "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.", "title": "" } ]	fiqa
0cefd805db6c028cf63a2b945ec25dc5	I paid a contractor to make roof repairs to a house in my LLC. How can I deduct this cost?	[ { "docid": "44a4da7d3f9b0a853729ea4b848174d9", "text": "This new roof should go on the 2016 LLC business return, but you probably won't be able to expense the entire roof as a repair. A new roof is most likely a capital improvement, which means that it would need to be depreciated over many years instead of expensed all in 2016. The depreciation period for a residential rental property is 27.5 years. Please consider seeking a CPA or Enrolled Agent for the preparation of your LLC business return. See also: IRS Tangible Property Regulations FAQ list When you made the loan to the LLC (by paying the contractor and making a contract with the LLC), did you state an interest rate? If not, you and your brother should correct the contract so that an interest rate is stated, then follow it. The LLC needs to pay you interest until the loan is paid off. You need to report the interest income on your personal return, and the LLC needs to report the interest expense in its business return.", "title": "" } ]	[ { "docid": "ceeecc34e00810972aa028a778fd4c31", "text": "The LLC will file its own business taxes which may or may not have business level income and expenses. At the end, the LLC will issue Schedule K-1 tax forms to the members, that based on their percentage ownership, will reflect the percentage share of the income/losses. From an individual standpoint, the members need only worry about the K-1 form they receive. This has quite a few pass-through categories from the LLC, but the Income/Loss may be the only used one. The individual will likely include the K-1 by filing a Schedule-E along with their 1040 form. The 1040 Schedule-E has some ability to deduct expenses as an individual. Generally it's best not to commingle expenses. Additional schedule-E expense reporting is generally for non-reimbursed, but related business expenses. If a member paid certain fees for the LLC, it is better for the LLC to reimburse him and then deduct the expense properly. Schedule-E is on a non-LLC, personal level.", "title": "" }, { "docid": "285656fee715b39a89d1eaadd137f3b2", "text": "The LLC (not you) is probably in debt to the California FTB. Any LLC registered in California must pay at least $800 a year, until it is officially dissolved (i.e.: notice of cancellation/dissolution properly filed with the California Secretary of State). The FTB may come after members (including you) personally, if it can prove that the failure to pay was due to your negligence. Talk to a CA-licensed EA/CPA about how to resolve this. Otherwise, at least from what you've described, there were no other taxable events. LLC is a disregarded entity, so the IRS doesn't care about it much anyway (unless someone was stupid enough to elect it to be taxed as a corporation, that is). Keep in mind that when in doubt - you are always better off with a professional (a CPA/EA licensed in your State) advice.", "title": "" }, { "docid": "e65ca832826c13679b69f21901aa6230", "text": "First, you should probably have a proper consultation with a licensed tax adviser (EA/CPA licensed in your State). In fact you should have had it before you started, but that ship has sailed. You're talking about start-up expenses. You can generally deduct up to $5000 in the year your business starts, and the expenses in excess will be amortized over 180 months (15 years). This is per the IRC Sec. 195. The amortization starts when your business is active (i.e.: you can buy the property, but not actually open the restaurant - you cannot start the depreciation). I have a couple questions about accounting - should all the money I spent be a part of capital spending? Or is it just a part of it? If it qualifies as start-up/organizational expenses - it should be capitalized. If it is spent on capital assets - then it should also be capitalized, but for different reasons and differently. For example, costs of filing paperwork for permits is a start-up expense. Buying a commercial oven is a capital asset purchase which should be depreciated separately, as buying the tables and silverware. If it is a salary expense to your employees - then it is a current expense and shouldn't be capitalized. Our company is LLC if this matters. It matters to how it affects your personal tax return.", "title": "" }, { "docid": "b45d5ec4b229bc9bf365f2b849ee8988", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"", "title": "" }, { "docid": "2759de95b6e4abc47e93cbccb708395a", "text": "\"There are way too many details missing to be able to give you an accurate answer, and it would be too localized in terms of time & location anyway -- the rules change every year, and your local taxes make the answer useless to other people. Instead, here's how to figure out the answer for yourself. Use a tax estimate calculator to get a ballpark figure. (And keep in mind that these only provide estimates, because there are still a lot of variables that are only considered when you're actually filling out your real tax return.) There are a number of calculators if you search for something like \"\"tax estimator calculator\"\", some are more sophisticated than others. (Fair warning: I used several of these and they told me a range of $2k - $25k worth of taxes owed for a situation like yours.) Here's an estimator from TurboTax -- it's handy because it lets you enter business income. When I plug in $140K ($70 * 40 hours * 50 weeks) for business income in 2010, married filing jointly, no spouse income, and 4 dependents, I get $30K owed in federal taxes. (That doesn't include local taxes, any itemized deductions you might be eligible for, IRA deductions, etc. You may also be able to claim some expenses as business deductions that will reduce your taxable business income.) So you'd net $110K after taxes, or about $55/hour ($110k / 50 / 40). Of course, you could get an answer from the calculator, and Congress could change the rules midway through the year -- you might come out better or worse, depending on the nature of the rule changes... that's why I stress that it's an estimate. If you take the job, don't forget to make estimated tax payments! Edit: (some additional info) If you plan on doing this on an ongoing basis (i.e. you are going into business as a contractor for this line of work), there are some tax shelters that you can take advantage of. Most of these won't be worth doing if you are only going to be doing contract work for a short period of time (1-2 years). These may or may not all be applicable to you. And do your research into these areas before diving in, I'm just scratching the surface in the notes below.\"", "title": "" }, { "docid": "4e41f2d5ccac706564bf5b0af4e17ff6", "text": "Unless you own a business and the car is used in that business you can't write off your auto repairs. If you start a sole-proprietorship in your own name there are all sorts of things you can write off as long as there is a reasonable expectation of profit. This includes a portion of your car repairs, a portion of your home expenses (assuming it's a home-based business), any tools used in the business, all kinds of stuff. The portion of your auto is based on total miles driven in the year vs. total miles driven for business purposes. Eligible auto expenses include repairs, gas/oil, insurance, parking, and interest on the auto loan. There are some things to remember: I'm no expert on California business law. Talk to a lawyer and an accountant if you wish to go this way. Many offer a half-hour free session for new clients.", "title": "" }, { "docid": "33581ef890c5132455e6fe674fb9e65f", "text": "Have you found a general contractor to rebuild your home? I would imagine that someone with a bit of expertise in the area is used to dealing with insurance companies, floating the money for a rebuild, and hitting the gates to receive payment for work accomplished. Business are used to not receiving payment when work is accomplished and it is part of the risk of being in business. They have to buy materials and pay employees with the expectation of payment in the future. Much like workers go to work on a Monday for the work that day, three Friday's later, business often have to float costs but for longer periods of time. If you are looking to be your own general contractor then you will have to float the money on your own. The money should not be used for living expenses or mortgage payments, it should be used for down payments in order to get the work of rebuilding started.", "title": "" }, { "docid": "e066e481ce1dc4ba46306df1ed00eb97", "text": "I'm a CPA and former IRS agent and manager. Whether you are a cash or accrual basis taxpayer, you get to deduct the expense when your card is charged. Think of it this way: You are borrowing from the credit card company or bank that issued the credit card. You take that money to make a purchase of a product or service. You now have an expense and a liability to a third party. When you pay off the liability, you do not get to take a deduction. Your deduction is when you pay for the expense. Depending on what you purchased, you may have to capitalize it.", "title": "" }, { "docid": "ace0449e9eb6c8462ea87b7445e3b729", "text": "As noted above but with sources An improvement materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses. You must add the cost of any improvements to the basis of your home. You cannot deduct these costs. Source Page 11, Adjusted Basis, Improvements Second, A repair keeps your home in an ordinary, efficient operating condition. It does not add to the value of your home or prolong its life. Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. You cannot deduct repair costs and generally cannot add them to the basis of your home. Source Page 12, Adjusted Basis, Repairs versus improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. You must capitalize any expense you pay to improve your rental property. An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. Source Page 5, Repairs and Improvements Good Luck,", "title": "" }, { "docid": "d402dc885d5d6ef6afda8b49de969880", "text": "You're doing business in the US and derive income from the US, so I'd say that yes, you should file a non-resident tax return in the US. And in Connecticut, as well, since that's where you're conducting business (via your domestic LLC registered there). Since you paid more than $600 to your contractor, you're probably also supposed to send a 1099 to him on that account on behalf of your LLC (which is you, essentially, if you're the only member).", "title": "" }, { "docid": "aab9a61a92f80d3e8a9d19600facd7e8", "text": "On a personal income tax return home improvements are generally not deductible on a federal level. There might be some exceptions made for special tax programs, such as solar panels, but they tend to be the exception rather than the rule.", "title": "" }, { "docid": "a57851d680f06d0d027cbc370f7c762e", "text": "I contacted Stephen Fishman, J.D., the author of Home Business Tax Deductions, to let him know that this question was missing from his book. He was kind enough to send a reply. My original phrasing of the question: If your car is used for both business and personal use, and you deduct via the actual expense method, do trips to the mechanic, gas station, and auto parts store to service or repair the car count as business miles, personal miles, or part-business-part-personal miles? What about driving the newly-purchased car home from the dealership? And his response: Good question. I can find nothing about this in IRS publication or elsewhere. However, common sense would tell us that the cost of driving to make car repairs should be deductible. If you use your car for business, it is a business expense, just like transporting any other piece of business equipment for repairs is a business expense. This should be so whether you use the standard mileage rate or actual expense method. You should probably reduce the amount of your deduction by the percentage of personal use of the car during the year. The same goes for driving a car home from the dealer.", "title": "" }, { "docid": "ee21749916f89670ecfa90cfb2e9c360", "text": "\"While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do I quantify the travel expenses? Generally, \"\"necessary and ordinary\"\" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say \"\"no\"\" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000 miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (\"\"pleasure\"\") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is \"\"business\"\" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the property? Although, again, the \"\"necessary and ordinary\"\" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA).\"", "title": "" }, { "docid": "ac59ace4d85551d12cfedf3a65cd4df0", "text": "\"Your corporation would file a corporate income tax return on an annual basis. One single month of no revenue doesn't mean much in that annual scheme of things. Total annual revenue and total annual expenses are what impact the results. In other words, yes, your corporation can book revenues in (say) 11 of 12 months of the year but still incur expenses in all months. Many seasonal businesses operate this way and it is perfectly normal. You could even just have, say, one super-awesome month and spend money the rest of the year. Heck, you could even have zero revenue but still incur expenses—startups often work like that at first. (You'd need investment funding, personal credit, a loan, or retained earnings from earlier profitable periods to do that, of course.) As long as your corporation has a reasonable expectation of a profit and the expenses your corporation incurs are valid business expenses, then yes, you ought to be able to deduct those expenses from your revenue when figuring taxes owed, regardless of whether the expenses were incurred at the same approximate time as revenue was booked—as long as the expense wasn't the acquisition of a depreciable asset. Some things your company would buy—such as the computer in your example—would not be fully deductible in the year the expense is incurred. Depreciable property expenses are deducted over time according to a schedule for the kind of property. The amount of depreciation expense you can claim for such property each year is known as Capital Cost Allowance. A qualified professional accountant can help you understand this. One last thing: You wrote \"\"write off\"\". That is not the same as \"\"deduct\"\". However, you are forgiven, because many people say \"\"write off\"\" when they actually mean \"\"deduct\"\" (for tax purposes). \"\"Write off\"\", rather, is a different accounting term, meaning where you mark down the value of an asset (e.g. a bad loan that will never be repaid) to zero; in effect, you are recognizing it is now a worthless asset. There can be a tax benefit to a write-off, but what you are asking about are clearly expense deductions and not write-offs. They are not the same thing, and the next time you hear somebody using \"\"write off\"\" when they mean \"\"deduction\"\", please correct them.\"", "title": "" }, { "docid": "be257fcb0ae0253e58681c0f96f3d63a", "text": "\"The answer is \"\"Yes\"\", You can deduct them. As long as you showed that you put in effort to make a profit then you can deduct business expenses.\"", "title": "" } ]	fiqa
9f3f690e9ae40046c0883a363cd660c3	Obtaining Pound Sterling Cheque in US to pay for family history records from England?	[ { "docid": "c86b0d267984e7b5f0929fb77b2bd8f7", "text": "Most US banks don't allow you the ability to draft a foreign currency check from USD. Though, I know Canadian banks are more workable. For instance, TD allows you to do this from CAD to many other currencies for a small fee. I believe even as a US Citizen you can quite easily open a TD Trust account and you'd be good to go. Also, at one time Zions bank was one of the few which lets US customers do this add-hoc. And there is a fee associated. Even as a business, you can't usually do this without jumping thru hoops and proving your business dealings in foreign countries. Most businesses who do this often will opt to using a payment processor service from a 3rd party which cuts checks in foreign currencies at a monthly and per check base. Your other option, which may be more feasible if you're planning on doing this often, would be to open a British bank account. But this can be difficult if not impossible due to the strict money laundering anti-fraud regulations. Many banks simply won't do it. But, you might try a few of the newer British banks like Tesco, Virgin and Metro.", "title": "" } ]	[ { "docid": "de1d1c5642e658bd6ed124fa1b5d5316", "text": "US bank deposits over $10K only need to be reported to FinCEN (Financial Crimes Enforcement Network- a bureau of the US Department of Treasury) if the deposits are made in cash or other money instruments where the source cannot be traced (money orders, traveler checks, etc). Regular checks and wires don't need to be reported because there is a clear bank trail of where the money came from. If your family member is giving you money personally (not from a business) from a bank account which is outside of the US, then you only need to report it if the amount is over $100K. Note, you would need to report that regardless of whether the money was deposited into your US bank account, or paid directly to your credit cards on your behalf, and there are stiff penalties if you play games to try to avoid reporting requirements. Neither deposit method would trigger any taxable income for the scenario you described.", "title": "" }, { "docid": "5549b441b444749bc6bda2b1c5d03f08", "text": "\"Once upon a time (not all that long ago), British cheques used to say something like \"\"Pay to the order of ..,,,, or bearer the sum of ...,..\"\" (emphasis added) and could be cashed by anyone unless the cheque-writer drew two parallel lines in the upper left corner of the cheque. These lines converted the instrument into a crossed cheque which could only be deposited into a bank account of the payee; a bearer of the cheque could not walk into the bank and waltz out with the cash equivalent. Perhaps British banks no longer use this styling (Indian banks still do) but if that cheque for 60k is not a crossed cheque, it better be sent securely with lots of insurance. An uncrossed cheque is the same as cash since it can be cashed by anyone. That being said, I am with @mhoran_psprep in thinking that all this is just a scam with the OP (mug) being asked to send 3600 bucks to \"\"girlfriend\"\" (scammer) to cover the cost of sending the check with full insurance, and when the check arrives and is deposited by OP into his bank, it will turn out to be a dud, and \"\"girlfriend\"\" will be long gone. The description of how the girlfriend signed a contract for 90k and received 60k of this amount upfront, but in the form of a check payable to boyfriend (!) OP reeks of scam; is this scenario realistic? In the past, I have received offers (usually from Nigeria) from \"\"women\"\" wanting to be my girlfriend, and I am sure that such offers will continue to come in the future....\"", "title": "" }, { "docid": "ffa2250acc63d88f31a6961a58f380b9", "text": "I've been a landlord and also a tenant. I have been able to deposit money in an account, where I have the account number, and/or a deposit slip. In a foreign bank you can deposit by a machine if in the bank or someone is there for you and knows the account number. With regards to cashing a check in another country, it is up to the bank and the time is at least 14 to 21 business days, with a fee is added. As of a winning check, since its in your name, if you are in another country sign the check, for deposit only with a deposit slip and send it to your out of country bank by FedEx - you will have a tracking number, where as regular mail it might get there in 3 months. I hope by now you came to your solution.", "title": "" }, { "docid": "d81ccba684d73402c54dbdbd18286fb3", "text": "Once you declare the amount, the CBP officials will ask you the source and purpose of funds. You must be able to demonstrate that the source of funds is legitimate and not the proceeds of crime and it is not for the purposes of financing terrorism. Once they have determined that the source and purpose is legitimate, they will take you to a private room where two officers will count and validate the amount (as it is a large amount); and then return the currency to you. For nominal amounts they count it at the CBP officer's inspection desk. Once they have done that, you are free to go on your way. The rule (for the US) is any currency or monetary instrument that is above the equivalent of 10,000 USD. So this will also apply if you are carrying a combination of GBP, EUR and USD that totals to more than $10,000.", "title": "" }, { "docid": "8802d77ad261cc781967b521c631be38", "text": "\"If the cheque is crossed (as almost all are these days), it can only be paid into an account in the name of the person it was written out to: it cannot be paid into another's account, nor can it be \"\"cashed\"\"1 – see the rules on \"\"Crossed\"\" cheques. Note: that while the recipient of the cheque cannot (legally) alter this state of afairs, the writer of a cheque that was printed pre-crossed can – at least technically – cancel the crossing (see above link). Probably the best the OP can do is pay in the cheque on the friend's behalf (as described in Ben Millwood's answer) and then either lend the friend some money until they are mobile and can get some cash to repay the OP (or have the friend write one of their own cheques which the OP can pay into their bank account). 1 As mentioned in the last section of the rules on crossed cheques, the only exception is that designated \"\"Cheque cashing shops\"\" have special arrangements to deposit cheques which they have cashed (after deducting a fee). However, they would (should?) require proof of identity (of the original payee) and so are unlikely to be of any help (and probably not worth the cost for £35). Having said that, I've never used one, so have no idea how strict they are in practice.\"", "title": "" }, { "docid": "536ccae68d4f08d18c19a5b3116b231e", "text": "You probably can't deposit the check directly, but there are mechanisms in place to get your money through other means. In the US, all states and territories have an unclaimed property registry. Before you contact the company that wrote the check, you should check that registry in your state. You will have to provide proof that you are the intended recipient, having the original check in your possession should make that considerably easier.", "title": "" }, { "docid": "e77a8a7906c26d17cf56d4ed260a758f", "text": "\"There is no doubt that this is a scam (you ask a British solicitor for help with this sort of problem, not an American friend) but it's not as obvious as some answers seem to assume. Inheritance taxes always have to be paid before legacies can be received, and the funds are part of the estate not \"\"in the hands of the government\"\". There are certainly ways round the problem (which vary by country), but if the facts were as the asker sets out, this would be a reasonable request. You can bet they aren't and it isn't.\"", "title": "" }, { "docid": "990c695c06f83b04293bc55ff1980a6d", "text": "I suspect @SpehroPefhany is correct and that your bank will cash a check from the US Department of the Treasury. Especially since they're the same ones who guarantee the U.S. Dollar. They may hold the funds until the check clears, but I think you'll have good luck going through your bank. Of course, fees and exchange rate are a factor. Consider browsing the IRS and US Treasury Department websites for suggestions/FAQs. I suggest you line up a way to cash it, and make sure there's enough left after fees and exchange rate and postage to get the check that the whole process is worth it, all before you ask it to be shipped to you. If there's no way to do it through your bank, through a money exchange business (those at the airport come to mind) or through your government (postal bank?), and the check is enough that you're willing to go through some trouble, then you should look into assigning power of attorney for this purpose. I don't know if it is possible, but it might be worth looking into. Look for US based banks in your area.", "title": "" }, { "docid": "c3ec6d61e453281b731ba7543c99feb8", "text": "\"Money in your NRE/NRO account is your property and moving it to the U.K. is not a taxable event in the U.K. or in India. Extra paperwork is needed for transfer from an NRO account to prove that you have indeed paid taxes (or had taxes withheld) on the money in the NRO account to the Indian Government. Search this site for \"\"15CB\"\" and \"\"15CA\"\" for details.\"", "title": "" }, { "docid": "a86781b481e27f434338b7e0bd423ee6", "text": "Update, 2013: this product is no longer available. As of December 1, 2010, Travelex announced a product, the Travelex Cash Passport, which is chip-and-pin protected. You can buy it in the US and then load it up with either Euros or British Pounds. There are a few things to know about this: Right now, it is not available online at the Travelex website. You must purchase it in person at participating Travelex retail locations. I bought mine right downstairs from the Stack Overflow world headquarters! The fees that Travelex charges for foreign currency transactions will take your breath away. I purchased a £300 card for $547.15, which comes out to a 15% service charge. Travelex will give you better rates if you purchase larger amounts. There is a further 3% fee if you use a credit card (I used a debit card to avoid this). Think long and hard about whether to load it with Pounds or Euros. They charged me 5.5% above the interbank exchange rate to spend my Pound card in Euros. You get two cards, which is very convenient. You can refill the card on the web. Due to the high fees, the Chip and PIN Cash Passport is not a good idea for everyday transactions, for getting cash from an ATM, and certainly not for paying for big-ticket items like hotels. You're going to want to reserve it for purchasing things from those automated kiosks in Europe (especially gas stations, ticket machines in train stations, and toll booths) that will not work with a standard magnetic stripe card. The card worked perfectly buying tickets on the tube in London. I haven't had a chance to check it out in other countries.", "title": "" }, { "docid": "2570c173435745bdfc94803f83bc1151", "text": "Take a look at Transferwise. I find them good for currency conversions and paying people in India from a US bank account.", "title": "" }, { "docid": "20f1faf11e9fc76bc2216ed86c83a0e7", "text": "\"I know this an old thread, but one that caught my interest as I just moved to the USA from Australia. As per the OP I had never written a check in my whole life, and upon arriving in the US I was surprised as to their proliference. In Australia pretty much all bills you receive can be paid in a number of ways: For small amounts between friends cash is probably used most, but for larger amounts direct transfer is popular. Your friend/landlord will give you their bank account number and BSB number, which identifies their bank, and then you transfer the money in. We don't have a SSN like some other countries. Cheques are still used by some however, esp by the older generations. Now that I'm in the US initially I had tried to set up direct transfer to pay my rent however the bank has a $1000 daily transfer limit. I contacted the bank to get this increased however I was informed that this limit applies to ALL accounts at the bank. I asked how do people pay their rents with this low limit and was told that most people used cheques. (This explains the strange look I got from my landlord when I asked for their bank account details so I could pay the rent!) I now have some bills to pay here and I use online banking. You enter the biller's name and address and then the bank actually prints off a cheque and posts it to the biller on your behalf! My first couple of pays here were also cheques, which were the first actual \"\"paychecks\"\" I had ever received.\"", "title": "" }, { "docid": "5317a819de3c515bffdc09816c4468cc", "text": "You should definitely be able to keep the US bank account and credit cards. I'm a UK citizen and resident who worked in the US for a few months (on a temporary visa) many years back and I still have the US bank account from that time. Unless you are planning on moving to the UK permanently, you also should keep your US bank account and cards to make the process of moving back there eventually easier. I would also suggest keeping/moving at least a portion of your savings to the US at regular intervals to insure you against the risk that exchange rates will be against you when you move back. It'll also make things easier when you visit the US as you presumably will every so often - if you use your US account and cards you won't get hit so badly by charges for making each individual payment.", "title": "" }, { "docid": "81d9292743f49bacb9ab796d577cb2ca", "text": "\"Some years ago I was in a similar situation with a CAD cheque. I did not experience any reservation period of months. Within Canada, around a week was usual, and as far as I remember that was the case also for the cheque deposited to the EUR account. You could ask your bank whether a certified cheque (has to be done at the \"\"home\"\" bank of the sender) will have the same reservation period and what the processing time will be anyways. I found a large variation of the (large) fees for cashing foreign cheques. It may be worth asking a few different banks for their conditions (both fees and duration for the whole process).\"", "title": "" }, { "docid": "71dd227a1b8cfb5e02657bcf1c74a81b", "text": "This is so very much a scam. The accepted answer already tells you the basics of it. In addition to the cheque being fake, there is also the possibility that the cheque is a legitimate cheque but has been stolen (or swindled off) from somebody else. In that case, the delay with which the cashing of the cheque will blow up can be considerably longer than the accepted answer states since it depends on the other victim noticing and reporting the fraudulent transfer. The end result is the same: you are not going to be allowed to keep the money. Report this to both your sister's bank as well as her local police. Nothing good can come off this.", "title": "" } ]	fiqa
3d5d691258413a930893ad034e7f2361	Shares in Chinese startup company	[ { "docid": "ce98c234306e5b450314f6d30b23a592", "text": "Setting up an entity that is partially foreign owned is not that difficult. It takes an additional 1-1.5 months in total, and in this particular case, you guys would be formed as a Joint Venture. It will cost a bit more (about 3-5000). If you're serious about owning a part of a business in China, you should carefully examine what he means by 'more complicated'. From my point of view, I have set up my own WOFE in China, and examined the possibilities of a JV and even considered using a friend to set up the company under their personal name as a domestic company (which is what your supervisor is doing), any difference between the three are not really a big deal anymore, and comes down to the competency of the agencies you are using and the business partner themselves. It cost me 11,000 for a WOFE including the agency and government registration fees (only Chinese speaking). You should also consider the other shareholders who may be part of this venture as well. If there are other shareholders, and you are not providing further tangible contribution, you will end up replaced and penniless (unless of course you trust them too...), because they are actually paying money to be part of the business and you are not. They will not part with equity for you. I'm not a lawyer, but think you should not rely on any promises other than what it says on a company registration paper. Good luck!", "title": "" } ]	[ { "docid": "dc61bab52d0f73aaebd7179bee102155", "text": "You will probably never see it. The startup at some point may start issuing dividends to the shareholders (which would be the owners, including you if you are in fact getting equity), but that day may never come. If they hire others with this method, you'll likely lose even that 5% as more shares are created. Think of inflation that happens when government just prints more money. All notes effectively lose value. I wouldn't invest either, most startups fail. Don't work for free on the vague promise of some future compensation; you want a salary and benefits. Equity doesn't put food on your table.", "title": "" }, { "docid": "ebf7f2ffdd88a794594aa313b48eb2d1", "text": "yeah but most likely, it's a 1x liquidation preference. The startup isn't going to generate cash flows enough to pay off the initial investment to the investor. Technically it isn't exactly specified as only triggered on a liquidation event because OP didn't specify the real legal language but it seems likely that's the case. Point 2 is exactly what a liquidation preference is. No way the owner of the company is participating in anything until the investor gets his initial investment back.", "title": "" }, { "docid": "e0d33ac693b9ca5cb85fa08328394996", "text": "\"This is the best tl;dr I could make, [original](http://www.reuters.com/article/us-usa-china-artificialintelligence-idUSKBN1942OX) reduced by 90%. (I'm a bot) *** > WASHINGTON The United States appears poised to heighten scrutiny of Chinese investment in Silicon Valley to better shield sensitive technologies seen as vital to U.S. national security, current and former U.S. officials tell Reuters. > AI&#039;S ROLE IN DRONE WARFARE. Concerns about Chinese inroads into advanced technology come as the U.S. military looks to incorporate elements of artificial intelligence and machine learning into its drone program. > &quot;When the Chinese make an investment in an early stage company developing advanced technology, there is an opportunity cost to the U.S. since that company is potentially off-limits for purposes of working with,&quot; the report said. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6h3wj2/the_united_states_appears_poised_to_heighten/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~143518 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: technology^#1 us^#2 investment^#3 China^#4 Chinese^#5\"", "title": "" }, { "docid": "165abb09aa0fe2cb6a6e68dd5a3391a1", "text": "\"they are entirely free to do whatever they want with the shares. In particular, they can sell them to whomever they choose No. Restrictions on who can sell when and to whom are a common thing with startups. \"\"Publicly traded\"\" companies are regulated in a much stricter way than private companies, so until the IPO the sales are limited to the OTC markets. But even that can be restricted by bylaws - for example ownership can only be limited to a group of investors approved by the board. As an employee - your grant was approved by the board, but when you come to sell, the buyer was not and the company may not agree to vet them. Bottom line is that it is not illegal to impose all kinds of restrictions on what the employees can do with their shares, as long as the shares are not listed on a public stock exchange (even after the company goes IPO with one class, other classes may remain restricted).\"", "title": "" }, { "docid": "b20bcc87aaf2e168aa3e45dbcbdffd65", "text": "If you check out China Stock Markets Web provides details on all things that trade on there. It covers the Hang Seng Index, SSE Index, and SSE Component Index. There is also tons of information for investors on the exchange website here.", "title": "" }, { "docid": "838c715b7d504db807ab5448b6489856", "text": "I think examining the effects and potential implications of China's involvement with the stock market may be productive. Some interesting examples would be the failed market circuit breakers and the restrictions of short-selling in 2016. Not sure that this would qualify as a real topic, but may give you food for thought.", "title": "" }, { "docid": "3d0906a0418371cf2b5a442b1fe2c8f6", "text": "If the company is non-public, your hands are tied. Most startups have a Stock Option Plan with specific rules on the shares. In almost all cases, they have a Transferability clause preventing transfers of options and shares unless approved by the company (who would almost always say no). Additionally, they usually have a Right of First Refusal (ROFR), which states that if shares are going to be transferred, the company gets the chance to buy it first. In your case, the company may argue your friend would sell you the shares for free and the company would exercise their ROFR and buy back the shares for free. There is not much you can do in this case. You may be able to write up a contract between your friend and you, but it would be costly and possibly not worth the effort. You may be better off asking for a lump sum or some other sort of compensation. Additionally, your friend might want to be careful with this idea. You could potentially gain access to sensitive company tools/documents which could get them in a lot of trouble.", "title": "" }, { "docid": "90d5a9029baab5def0887297b77d4aa6", "text": "I wonder in this case if it might be easier to look for an emerging markets fund that excludes china, and just shift into that. In years past I know there were a variety of 'Asian tiger' funds that excluded Japan for much the same reason, so these days it would not surprise me if there were similar emerging markets funds that excluded China. I can find some inverse ETF's that basically short the emerging markets as a whole, but not one that does just china. (then again I only spent a little time looking)", "title": "" }, { "docid": "23f2a228c3c25affe0b9da5c43a3fc75", "text": "\"BigCo is selling new shares and receives the money from Venturo. If Venturo is offering $250k for 25% of the company, then the valuation that they are agreeing on is a value of $1m for the company after the new investment is made. If Jack is the sole owner of one million shares before the new investment, then BigCo sells 333,333 shares to Venturo for $250k. The new total number of shares of BigCo is 1,333,333; Venturo holds 25%, and Jack holds 75%. The amount that Jack originally invested in the company is irrelevant. At the moment of the sale, the Venturo and Jack agree that Jack's stake is worth $750k. The value of Jack's stake may have gone up, but he owes no capital gains tax, because he hasn't realized any of his gains yet. Jack hasn't sold any of his stake. You might think that he has, because he used to hold 100% and now he holds 75%. However, the difference is that the company is worth more than was before the sale. So the value of his stake was unchanged immediately before and after the sale. Jack agrees to this because the company needs this additional capital in order to meet its potential. (See \"\"Why is stock dilution legal?\"\") For further explanation and another example of this, see the question \"\"If a startup receives investment money, does the startup founder/owner actually gain anything?\"\" Your other scenario, where Venturo purchases existing shares directly from Jack, is not practical in this situation. If Jack sells his existing shares, you are correct that the company does not gain any additional capital. An investor would not want to invest in the company this way, because the company is struggling and needs new capital.\"", "title": "" }, { "docid": "8048f155db62bfb0eaa57d8e8fd2e102", "text": "\"[Link 1] (https://www.bloomberg.com/news/articles/2017-06-12/two-chinese-provinces-falsified-economic-data-inspectors-say) [Link 2] (https://www.ft.com/content/a5bf42e2-03cf-11e7-ace0-1ce02ef0def9) [Link 3] (https://www.ft.com/content/0361c1a4-bcfe-11e6-8b45-b8b81dd5d080) China has been cooking their books, just like the U.S. has been doing it the past few years. Just google \"\"U.S. Central banks buying stocks and bonds\"\", then connect the numbers. Insider Information: At my previous company we sold solar manufacturing equipment. I went to said Chinese city that bought our equipment. They were producing ton loads of solar panels, I asked one of the manager's where all of the panels were being sold (domestic, or international?). To my surprise, he said they warehoused the panels they produced; because, there weren't enough customers. And, why were they warehousing the panels? Because, the Chinese government needed to show numbers that jobs were plenty, and manufacturing was still strong.\"", "title": "" }, { "docid": "da824642900236cf08575585381332b9", "text": "As it stands equity contracts in startups are by default structured differently. The standard equity is shares or convertible notes. Having equity that's structured in the way you propose is a bad idea for both sides. VC don't like equity that's not done with standard equity contracts. If the lawyer of the VC has to review your equity document and understand how the exact terms work that makes it more complicated to invest money into the startup. On your end it might not be fair because a company doesn't need to make any income to be successful. Various companies manage to reduce their tax burden to next to nothing by clever accounting that results in having no taxable income. Uber brought the uber.com domain name with 2% equity at the beginning, so there are certainly deals that get made with equity. There are also other kinds of deals where domain names don't get sold for a one-time payment but with regular payment for 8 years where the domain names goes back to the seller if the company folds or otherwise doesn't want to pay anyone.", "title": "" }, { "docid": "5f710bf3dafd6bd265175acae324ef66", "text": "if the consolidated joint venture/sub has a negative net worth, then it is backing out the minority owner's share. if another entity is taking the hit, or responsible for a hit/liability instead of you, then it should improve your valuation. do not confuse net worth with net income. BS vs IS.", "title": "" }, { "docid": "83daadb1d3d40283d29d23eec7043f22", "text": "Could well be a good work enviroment. The story widely reported back in Nov '11 before the IPO was that workers who had been given shares and options in lieu of salaries in the start-up days were then being pressured prior to the IPO to give up their shares or face possible job loss. Maybe just a few senior people were affected, but it didnt sound good.", "title": "" }, { "docid": "bb595ed344c1481e189d877f2ab344dd", "text": "There could also be some degree of dilution at play here. If they are rapidly expanding and hiring, or if they took on another round of funding each share may have a lower amount of value though the company might be worth more than they were previously. The newly issued options may also be of a different class.", "title": "" }, { "docid": "43e1fe24d89c32da09fad3757e725b55", "text": "of course! Currently I am running a digital media company based in Bangkok, we produce a wide array of content, some for web distribution some that is targeted for traditional distribution. I also have equity in a number of tech startups around Asia, everything from e-commerce to smart home to big data. I also recently exited a quantified self company I had built with several co-founders.", "title": "" } ]	fiqa
6b262835b850b9c1462eefe408cc6027	Tenant wants to pay rent with EFT	[ { "docid": "c85b3b1d6b3408c34933fabb60592ed0", "text": "Yes, it is safe, we have been doing it for years. We prefer our tenants to make their rent payments in this manner. In fact, we prefer that they set up an automatic payment for the rent, either through their online banking or through their bank directly. Apart from getting your rent on time, this method also has the added benefit of both parties having their own records of rent payments through their bank statements, in case there is a dispute about the rent sometime down the track. Having a separate bank account just for the rent does make sense as well, it makes it easier for you to check if rent has come in, it makes it easier if you need to compare your statement without having to highlight all the rent payments amongst all other payments (you might not want to show your other incomes and spending habits to others), and you can withdraw the rents to your other account (which might offer higher interest) after it has come in, leaving a small balance most of the time in your rent account.", "title": "" }, { "docid": "7c16950664e3466975125ec2af51493a", "text": "I'd consider this offer. Keep in mind, any time you write a check, there's the information he's asking for. If it makes you feel comfortable, use the small balance account, or set up a 4th one you'll use for these incoming deposits only.", "title": "" }, { "docid": "61b85cead5d73582e622371bb6e9a673", "text": "It's safe. You give people those numbers every time you write a check. If a check is forged, and doesn't have your signature on it, the bank has to return the money to you; they get it back from the other bank, who takes whatever action it deems necessary against the forger. They've been doing this for a few hundred years, remember.", "title": "" }, { "docid": "d7c3ff987e1084e9539909f92796bc8f", "text": "What you've described is the norm in Australia, where it's rare for anyone under sixty to use cheques. Assuming they're transferring the funds using internet banking, I would have the following suggestions: You make it clear that the the funds must reach your account by the due date for rent. It is their (the tenant's) responsibility to allow for the normal transfer delay from their account to yours. This will save unpleasant arguments later if the rent is late. If you're not comfortable with your tenant knowing your banking details, set up another account specifically for receiving rental income payments and paying your costs associated with the property. This may have the added benefit of simplifying things at tax time. Another alternative, which I think others have mentioned, is to use an escrow service like PayPal, but be aware that these kinds of services will usually charge a small percentage when you withdraw your funds.", "title": "" }, { "docid": "35a05cfc4c1ac63cbf2f0d766a3e4561", "text": "\"How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing \"\"money transfer by email\"\" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years.\"", "title": "" }, { "docid": "20ca120add697e990f8a83fa86dcf8f7", "text": "It isn't EFT, but you might mention to your tenant, that many banks offer a Bill Pay service (example) where the bank will automatically mail a check to the right person for you. I have my rent setup this way. My bank will send a rent check directly to my landlord 5 days before it is due.", "title": "" }, { "docid": "d807150ef0e8bb6cb73999ce5fadb96e", "text": "I am able to set this up for my tenants by providing them with a form to fill out so that they provide their name and bank account information, and then I gave that to my bank and they establish a recurring ACH transfer. This way the tenant never gets my bank information. One note about this, I had a tenant break her lease and move out. She notified me a couple of days before the first of the month, and by the time she had moved a few days later the rent had been automatically paid. She called her bank and asked them to reverse the most recent transaction so she could have that month's rent refunded, and much to my surprise, they did. So the financial transfer is not necessarily one-way. This is in the US.", "title": "" }, { "docid": "fe621e763fb92c3e5adc1f896d5837df", "text": "\"The biggest disadvantage to you is that your tenant now knows your bank information, which means he can easily identify your source of money in the event he wins a lawsuit and wins a judgement. He will be able to have a court marshall freeze your account. However, if you deposit your tenant's check into your account as opposed to an EFT, then your tenant can basically still obtain your bank account information and freeze your account, it would just take him a bit longer to get that information. I am definitely anti-landlord in these situations because I've had to deal with so many bad ones here in NYC, but as a landlord, the best thing you can do is to create a \"\"buffer\"\" account for you to deposit tenant rent money into, then transfer the money from the buffer account to your regular account. This would prevent the tenant from knowing your personal bank information and greatly delay the tenant receiving his judgement from an assumed court win against you. My source: I had to take my landlord to court, and after obtaining a judgement, I got a court marshall to begin the process of closing access to her account (she couldn't access the money in that account). The process resulted in her sending me a check (assuming from her other account) for the judgement since her account was frozen and she couldn't access any of her money.\"", "title": "" }, { "docid": "9b72c2b9e50bd860b52afa383f8bbe87", "text": "Other options would be to use paypal, your tenant would only need your e-mail address. Most banks have a similar system to do a person-to-person transfers. My bank uses an e-mail address and only the last 4 digits of the account number.", "title": "" }, { "docid": "6c9e418ba7fef2c6a2d610751412d4cc", "text": "Similar to @SoulsOpenSource's answer, I would suggest Venmo, which works like PayPal but is free for debit-card-to-debit-card transactions. More information here.", "title": "" }, { "docid": "12cc993d5189d5518a747f28b8e28f5e", "text": "The mode of payment mentioned by your bank is called the ACH(Automatic Clearing House) which means that anyone(Trusted payment gateway owners like banks themselves) can process payments. There can be a fraud declared against any payment that you have made and you can get every single penny back. This amount can not be withdrawn in cash at all. However for your situation I would suggest that you ask your bank to block any transactions above the amount of a specific sum, this way they will require your authorization to finalize the payment. You should feel safe after this. Also no one can access any other account apart from the one whose details you are giving out so do not worry about this guy(or anyone else for that matter) to be able to access your other accounts. Hope this helps. (I have experience in payment gateways so I do understand these procedures.) Cheers!!", "title": "" }, { "docid": "f4d79bbf33fad672df6b4207fd7e95a9", "text": "You can consider opening accounts either in Paypal or Google Wallet. In this way, you link your bank information to these accounts and the only information you need to provide your tenant is your e-mail id. Its safe and in this scenario -- just money transfer through bank account, there is no fee either for the sender (your tenant) or the receiver (you).", "title": "" }, { "docid": "c9825f66ddff2952845d37a42b68709f", "text": "\"I live in Kenya, and also here we have corruption. However, we use EFT, RTGS, Mobile Money and its more safe than cheques. Beware, that paper based payments cost you way more than anything electronic. Often the bank charge you for the cheque book, they charge for receiving paper based payment instruments, and settlement is often a day or two, while mobile/electronic settlement is instant. Seen from a tenants perspective, its also easier. Imagine too, the small likelihood that you loose the cheques from your tenants? Your fear for your account is understandable, but you may need to learn a little now, about how accounts are handled. In an online community only the persons with the necessary electronic credentials can withdraw from your account, being it online via your screen, or at the cashier, or by other means. Therefore, your money are safer via the electronic means. The cause of your concern / unease can be that you are relinquishing your control from a paper-based, visible system, into a system which you may not know so much about, maybe because of that you have not done so much on computers, yet. As a most recent caveat, though, don't get into the so called bitcoin technology, it is not safe, and as you saw, most recently, the very owner himself became the perpetrator breaking his very own bank by artificially inflating amounts on his own account, according to Japanese authorities. Now, electronic banking has been in existence since soon 40 years. Its based on cash, so behind the scenes, between the banks, huge deposits of cash are being moved physically, around from vault to vault, in the bank's money exchange / transaction settlement system. Thereby, a bank does not need to physically transfer money from one physical bank building to another - as they have huge loads of cash stashed in central depositories, between which they can now exchange money as compensation for cheques and electronic transfers. So, behind the scene of the electronic world, there are still physical cash being moved around, deep under the ground, in such vaults. I hope this has given you a little bit of confidence in the \"\"modern times\"\". If you have further questions, you are welcome. These were my 50 cents :-). My background is in software development, where I have worked on banking systems for more than 10 years, making banking systems, as part of huge teams, working for the largest banks in the world.\"", "title": "" }, { "docid": "b170129c88dde8aa46a26d51aa91d284", "text": "\"In Britain it's standard practice to use an electronic bank transfer, otherwise known as a \"\"standing order\"\" for the monthly rent payment. Many letting agents insist on it here in Britain. It's rare to hear of fraud. It is possible to setup a Direct Debit with the account numbers, as happened in a famous case where Jeremy Clarkson claimed losing account numbers wasn't a problem. If a direct debit is taken from your account, then you are protected by the the Direct Debit guarantee which means that you get a full and immediate refund if there is any fraud or unexpected payments spotted. Some landlords, particularly of bedsits accept plain old cash, however that's not recommended as there is no trace of it being paid, which could lead to legal disputes.\"", "title": "" }, { "docid": "f2a6a01369be6e9f838ae3ef8d861f60", "text": "You could setup a Ally account to use solely for this. There is no minimum, no opening balance requirement, and you can do up to 6 transfers a month for free. This would partition your money from other accounts, while giving you the flexibility to move it to other accounts with ease.", "title": "" }, { "docid": "dd8abe515e2560fb1e56fac0036c1498", "text": "Given a routing number / account number, it's easy to print a check with those details. All you need is a MICR font. No EFT needed. I would recommend that instead, you get his account information, and set up a direct withdrawal. Of course, then you could potentially use HIS account fraudulently, but that would be true even if he just wrote you a check.", "title": "" }, { "docid": "a68359a66c665d1daba3d8492e89c600", "text": "Alternative solution with possibly better results: Use a 3rd party to transfer money between both of you. 2 Services you may want to look at: Rent share might be the best option. We are using it to split payment between 3 people in our unit. The owner is getting a single check that appears to be coming from all of us. The payment is automatic and goes through every month. I'm not sure if you as the owner could collect money electronically as opposed to receiving a check. It sounded like you didn't necessarily care about that though.", "title": "" } ]	[ { "docid": "72f8c668c9facea97d1fba0ad6d5cdb9", "text": "It depends on the terms of the lease, but it's hard to imagine a lease that would allow to do this unilaterally with no strings attached. That means it actually depends not on how much you like your landlady, but on how much she likes you. In general, by signing the lease you assume a contractual obligation to pay the rent every month for the entire term of the lease. In theory, you can be sued if you don't do that. In practice, a lot depends on your relationship with your landlord, as well as the rental market in your area. If the landlord can easily find a replacement tenant, they may be willing to allow you to leave early. If the rental market is slow, they will be more likely to hold you to the agreement. Obviously, if you have a good relationship with the landlord, they may be more inclined to go easy on you. As far as telling your landlady you want to terminate the lease early, unless she's a particularly nasty person, you can just go ahead and tell her you'd like to leave early. What you can't do is actually stop paying rent. If you're on reasonably good terms with your landlady, you could just tell her your situation and say you'd like to move out. She may be willing to work out an arrangement where she lists the apartment while you're still living there, allows prospective tenants to view it while it's occupied, and then has you move out if and when someone else wants to move in (e.g., at the end of the month). Again, exactly how this works will probably depend on the rental market. Assuming you're in the USA, here is a useful page with some info on breaking a lease. As mentioned there, the legal details vary by state.", "title": "" }, { "docid": "1996cb63df62a460f6fbd2a182ca33f5", "text": "Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid.", "title": "" }, { "docid": "669e68311bbc565174483b8e4fc5519f", "text": "\"I'd say your tenant is out $750, not you. How you handle it is totally personal preference. If you want to be the super-nice landlord and eat the loss this one time, then you might gain some karma and hopefully they'll be awesome tenants for the remainder of their stay. Are they the kind of tenants you want to be nice to because they deserve it? You (and she) have no way to prove she ever actually tried to pay you. Sound like she is learning a $750 lesson. \"\"Don't leave cash in a mailbox, and always get a receipt for rent paid.\"\" Your insurance company would likely not pay out as it'd be below a typical deductible and you can't really prove the money ever existed. You'd be better off just taking the loss. Think about it this way: How would you expect a bank or utility company to respond to this situation? \"\"Yeah, I left my mortgage as a cash-filled envelope on your doorstep. You didn't get it? I told you I'd do it!\"\" Guess who's paying double mortgage and a late fee? You're not stuck with option 1, you're choosing to do it. She could refuse and fight you on it, which might not be worth the headache and potential small-claims court. But you're entitled to receive the rent and she is obligated to pay it. And \"\"paying it\"\" means making sure you actually receive it.\"", "title": "" }, { "docid": "21e37b58efe357aa7b863ccf54074853", "text": "Yes, automatic rate increases are typical in my experience (and I think it's very greedy, when it's based on nothing except that your lease is up for renewal, which is the situation you are describing). Yes, you should negotiate. I've had success going to the apartment manager and having this conversation: Make these points: Conclude: I am not open to a rate increase, though I will sign a renewal at the same rate I am paying now. This conversation makes me very uncomfortable, but I try not to show it. I was able to negotiate a lease renewal at the same rate this way (in a large complex in Sacramento, CA). If you are talking to a manager and not an owner, they will probably have to delay responding until they can check with the owner. The key really is that they want to keep units rented, especially when units are staying empty. Empty units are lost income for the owner. It is the other empty units that are staying empty that are the huge point in your favor.", "title": "" }, { "docid": "ebcb79a96f86abe400f39b4e584aba25", "text": "It's very possible that someone would lie to their landlord/landlady, but not be prepared to lie to the police. So here's what I would do. Advise your tenant that since her money has been stolen from your letterbox, she should report the theft to the police. If she refuses to report the theft to the police, then her story is probably a lie. In which case, treat the rent as deliquent and demand payment in full. Invoke whatever kind of recourse is available in your jurisdiction. If she goes ahead and reports the theft, then it's very likely that her story is true. It's probably in your interest to stay on good terms with such a tenant, so you could offer to split the loss with her. But let her know that this is a one-time offer, and you won't be so generous again.", "title": "" }, { "docid": "ceea8f391e6b368ca4141353e0fed71e", "text": "Normally if you sublet your apartment, the landlord would pay you back the security deposit and the new tenant would need to pay a new security deposit to the landlord. (In my experience) You never want to get in a situation where something like this happens. This is not normally how sublets are structured.", "title": "" }, { "docid": "4ca1b59e45e7dd98ad3c7f6ba8724c30", "text": "They call you because that is their business rules. They want their money, so their system calls you starting on the 5th. Now you have to decide what you should do to stop this. The most obvious is to move the payment date to before the 5th. Yes that does put you at risk if the tenant is late. But since it is only one of the 4 properties you own, it shouldn't be that big of a risk.", "title": "" }, { "docid": "5462c5440487993203311af78d85f3d5", "text": "\"We change it every so often to reduce fraud. If you're absolutely sure you didn't just send money to a scammer impersonating a landlord, this has nothing to do with fraud-- they're playing a game with you. By changing the account number frequently, it makes it more likely you make a mistake in entering the payment account. When they come back to you a few days past due saying \"\"we never received your rent,\"\" you'll eventually realize it got sent to the wrong account. Now you owe them late fees, and there's really nothing you can do about it-- you did not in fact pay them on time; you sent it to the wrong account! It's an easy way for them to collect an additional few thousand dollars a year. Anytime a small business or landlord says they have to do something \"\"weird\"\" to reduce fraud, chances are it's a pretense to you getting hosed in some way.\"", "title": "" }, { "docid": "eda0f6e572c77ee7731c607bd7b2d042", "text": "You are not a landlord. You have choices: The current situation is charity. And that's ok, so long as you acknowledge it. In the big picture, anything less than market rent is a gift that you are giving the person living in your house. A good tenant might keep the place in better shape, and deserve a lower rent, but that's a quid pro quo. In the end, landlording is a business. If you had 10-20 apartments, they would be proving an income to you and you would have a large chunk of your wealth tied up in it. You would keep the apartments in good shape both to be legal and not a slumlord, but you'd also collect market rent. $100/apt would be $1000-$2000/mo income to you and your family. You wife is right. As always. You have a decision to make to stop the bleeding.", "title": "" }, { "docid": "7c4fb00e6b3071eec30e978b68f7d54e", "text": "Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN.", "title": "" }, { "docid": "6a811ba05b575681ba2d20adffe6a2fc", "text": "This is something you are going to have to work out with the leasing company because your goal is to get them to make an exception to their normal rules. I'm a little surprised they wouldn't take 6 months pre-payment, plus documentation of your savings. One option might be to cash in the bonds (since you said they are mature), deposit them in a savings account, and show them your account balance. That documentation of enough to pay for the year, plus an offer to pay 6 months in advance would be pretty compelling. Ask the property manage if that's sufficient. And if the lease is for one year and you're willing to pay the entire year in advance, I can't see how they would possibly object. If your employment prospects are good (show them your resume and explain why you are moving and what jobs you are seeking) a smart property manager would realize you'll be an excellent, low-risk tenant and will make an effort to convince the parent company that you should live there.", "title": "" }, { "docid": "acaf0037dbf1ceb8761d571c06a645fe", "text": "There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go.", "title": "" }, { "docid": "835f85f2adcd12904dc70159172d3f64", "text": "__________ _________ ____________ Therefore, I get the outcome I want. The human brain must think: it can't stop. If you don't believe me, try meditating. The mental process of putting stuff in those blanks is called rationalization. This is a bored mind who wants something. If that mind is not particularly well disciplined, those things will get pretty unrealistic. That is what has happened to your friend. Landlords do not like drama. They do like money. Generally a landlord will be happy to take your money any reasonable way that they can achieve. It sounds like either your landlord lost the ability to do credit cards, or he got sick of paying the 3% overhead, or some other overhead costs that may be higher because he does not have the right credit card merchant service. For instance PayPal Here charges 2.70% flat, but a traditional swiper can cost up to $2000 a year in trumped up fees and charges. As soon as the landlord calls the rent a debt, he has to take cash. But in most places, rental is at-will, and the landlord can evict for any reason or no reason at all (except race, creed, color, national origin, family, running a daycare center and a few other protected reasons)... and there's not a whole lot you can do about it. Even for a lease he can trump up a reason. Your friend would be wise to have a meeting of the minds with the landlord about how he'd like to pay. Business is done by mutual consent, not non-consensual legal tricks. I agree, I wouldn't do ACH either. One problem with ACH (or credit) is the landlord can charge anything he pleases, and that's when they start sneaking in devious surcharges for things. Once he's pulled the money out, you're really at a disadvantage to argue, since he already has the money. And it's really difficult to do a chargeback on part of a payment, so you end up having to chargeback the entire rent check, and now he can evict you.", "title": "" }, { "docid": "f08e59c70e252ece82e7b7443c15b16b", "text": "\"I used to be the sort of person who would tell you that I've left money for you somewhere and in fact not have done so, and I also used to be the last person you'd expect to do something like that. I've not done this exact thing but I've done similar. Not gonna go into detail but at that time I was in a state of poverty, barely able to buy food and drink, and the money I saved by \"\"conning people\"\" in similar ways was spent on food and warmth. Personally, I think she's going through a very hard patch financially and as such has done exactly that. Me? I'm not a landlord and I'm probably far too generous. I would explain that I think she's lying but let it slide this month. Clearly a property owner is more financially capable of soaking up this expense than a tenant. On the other hand, you don't become a property owner and landlord by letting people get away without paying their rent. All in all, I would probably push for a 50/50 decision. She pays half rent this month which alleviates her finances a bit if she is genuinely in trouble and has lied, and you still get something for your efforts. If you're lucky, when you suggest it she will come clean. I would make it clear if you do or don't believe her, as she may well confess if you express your doubts. If she does, I wouldn't hold her to paying the full amount unless she offers to do so. Also, make it very obvious that this can and will not happen again. Next time, she gives you cash or uses a banking service. Goes without saying I guess. You should note that legally speaking, by accepting anything other than full payment you could be acknowledging that she did attempt to make a payment and any future legal cases will not consider that favorably for you. I would strongly recommend discussing this with a solicitor before agreeing to anything other than full payment.\"", "title": "" }, { "docid": "da65d37e11ced3265657280ccf9478aa", "text": "\"For political reasons, almost all governments (including the US) spend more money than they get from taxes etc. There are a number of things a government can do to cover the difference: Most governments opt for selling bonds. The \"\"National Debt\"\" of a country can be thought of as being the sum of all the \"\"Bonds\"\" that are still paying interest, and that the Government hasn't Redeemed. It can all go horribly wrong. If the Government gets into a situation where it cannot pay the interest, or it cannot Redeem the Bonds it has promised to, then it may have to break its promise (\"\"Default\"\" on its payments). This makes the owners of the Bonds unhappy and means potential buyers of future Bond sales are less likely to want to buy the Governments new Bonds - effectively meaning the Government has to promise to pay more interest in the future. Recent examples of this include Argentina; and may include Greece soon. The US is in the fortunate position that not many people believe it will Default. Therefore the new Bonds it sells (which it does on a regular basis) are still in demand, even though its interest payments, and promises to Redeem Bonds are huge.\"", "title": "" } ]	fiqa
8f3cd5e541542469e7d4feeda4744f73	Learning investment--books to read? Fundamental/Value/Motley Fool	[ { "docid": "54ce4f503afc151425f30f55a31e5e08", "text": "You are smart to read books to better inform yourself of the investment process. I recommend reading some of the passive investment classics before focusing on active investment books: If you still feel like you can generate after-tax / after-expenses alpha (returns in excess of the market returns), take a shot at some active investing. If you actively invest, I recommend the Core & Satellite approach: invest most of your money in a well diversified basket of stocks via index funds and actively manage a small portion of your account. Carefully track the expenses and returns of the active portion of your account and see if you are one of the lucky few that can generate excess returns. To truly understand a text like The Intelligent Investor, you need to understand finance and accounting. For example, the price to earnings ratio is the equity value of an enterprise (total shares outstanding times price per share) divided by the earnings of the business. At a high level, earnings are just revenue, less COGS, less operating expenses, less taxes and interest. Earnings depend on a company's revenue recognition, inventory accounting methods (FIFO, LIFO), purchase price allocations from acquisitions, etc. If you don't have a business degree / business background, I don't think books are going to provide you with the requisite knowledge (unless you have the discipline to read textbooks). I learned these concepts by completing the Chartered Financial Analyst program.", "title": "" } ]	[ { "docid": "c2ef4b2ccfc7d4cf242313750d63b89c", "text": "I learned most of this stuff from 3 textbooks in school probably totaling $900 between the 3. I imagine you don't want to spend the cash on that. I would suggest finding a source online. A lot of the surface level stuff you are looking for can be found online on websites like Investopedia. They are a great resource and are free usually.", "title": "" }, { "docid": "5133e8a0da48d7a0a7bccf8988781a6a", "text": "Well, that is why I am asking questions, and seeing if there is any catch. I want to read up before I actually trade. Before I trades stocks I read for like 2 years, learning as much as I could. I am not about to jump in, but it is something I would like to trade eventually. I know I need to do my due diligence on it. The reason I came here was to get information on the topic before I decided on anything, including books and websites.", "title": "" }, { "docid": "1186534fe3cabcce55f68329a7b594c2", "text": "I recall the name Martin Pring. As my fundamental analysis book from grad school was the work of Graham and Dodd titled Security Analysis, Pring was the author of the books I read on technical analysis. If you've not read his work, your education has a ways to go before you hit the tools.", "title": "" }, { "docid": "2a8369588b9b80b75f59f546e868ce3c", "text": "Don't be ridiculous. You are competing with the best graduates out of the harvards in the world and you think reading a couple self help financial books will put you on level playing field? Don't waste your time with bcg or McKinsey.", "title": "" }, { "docid": "a930633f9779b2b637ac4e96d4b0fa93", "text": "\"What part of finance does he want to get into? Investments, Equities and trading, derivatives, finance as a whole, corporate finance? Most academic textbooks are ridiculously priced so if he is looking to learn technical skills he might have to look at splashing out or looking elsewhere... Fundamentals of Corporate Finance 7th is a good one. Covers a lot of the core parts of finance which then extend to all the other areas of finance, starting at the basics of Time Value of Money (though it does gloss over some of the more complex parts). However, it is pretty expensive. This is an academic textbook. On the non-technical side, there are a number of books with which he could get started. Benjamin Graham's \"\"The Intelligent Investor\"\" is a popular and affordable one, but it won't teach much about the technical side of finance.\"", "title": "" }, { "docid": "ed94c996ea2eda52c332ab82b4541cd4", "text": "I really like Value Investing by Bruce Greenwald. It's not a textbook so you can probably pick it up for about $20. While it is dense, I think with some patience you might be able to understand it at the undergrad level. The process outlined in the VI book is very different from the conventional corp finance way of valuing a company. A typical corp finance model would probably have you model cash flows 5 or 10 years out and then assume some sort of terminal growth. The VI book argues that it's nearly impossible to predict things that far out accurately so build your valuation on what we know. Start with the balance sheet. Then look at this year's earnings. Is that sustainable? This is a simplification of course but I describe it only so you can get the idea. I think it's definitely a worthwhile read.", "title": "" }, { "docid": "66b416b5a7b2262ada678903c3bbc1af", "text": "First The Intelligent Investor and then the 1962 edition Security Analysis - which is out of print, you can get it on Amazon.com used or ebay. Then you can read the edition backward but the 1962 edition is the best - IMHO. And don't forget The Rediscovered Benjamin Graham and Benjamin Graham on Value Investing by Jane Lowe", "title": "" }, { "docid": "7739215dc5ad176dd502605902b72e7a", "text": "As a follow-up, I ended up buying: * Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity (Pignataro, Paul; Hardcover) * Mergers, Acquisitions, Divestitures, and Other Restructurings, + Website (Pignataro, Paul; Hardcover) * The Essential CFO: A Corporate Finance Playbook (Nolop, Bruce P.; Paperback)", "title": "" }, { "docid": "707b61081a6c7cf8ec495fe81bd48389", "text": "Reading financial statements is important, in the sense that it gives you a picture of whether revenues and profits are growing or shrinking, and what management thinks the future will look like. The challenge is, there are firms that make computers read filings for them and inform their trading strategy. If the computer thinks the stock price is below the growth model, it's likely to bid the stock up. And since it's automated it's moving it faster than you can open your web browser. Does this mean you shouldn't read them? In a sense, no. The only sensible trading strategy is to assume you hold things for as long as their fundamentals exceed market value. Financial statements are where you find those fundamentals. So you should read them. But your question is, is it worth it for investors? My answer is no; the market generally factors information in quickly and efficiently. You're better off sticking to passive mutual funds than trying to trade. The better reason to learn to read these filings is to get a better sense of your employer, potential employers, competitors and even suppliers. Knowing what your margins are, what your suppliers margins and acquisitions are, and what they're planning can inform your own decision making.", "title": "" }, { "docid": "80d022fd1fffce9b8a0474924205f9a7", "text": "\"Thanks! I came across many books on credit risk in my google searches - what I'm really looking for is which one is the \"\"industry standard\"\" reading (does that make sense?). For example, in derivatives, everybody recommends John C. Hull's Options... book. Why of all the CRM books, do you recommend those three in particular?\"", "title": "" }, { "docid": "808551695901e548c97822ec9534711a", "text": "\"Wow, I cannot believe this is a question. Of course reading the 10Ks and 10Qs from the SEC are incredibly beneficial. Especially if you are a follower of the investing gurus such as Warren Buffett, Peter Lynch, Shelby Davis. Personally I only read the 10K's I copy the pertinent numbers over to my spreadsheets so I can compare multiple companies that I am invested in. I'm sure there are easier ways to obtain the data. I'm a particular user of the discounted free cash flow methodology and buying/selling in thirds. I feel like management that says what they are going to do and does it (over a period of years) is something that cannot be underestimated in investing. yes, there are slipups, but those tend to be well documented in the 10Qs. I totally disagree in the efficient market stuff. I tend to love using methodologies like Hewitt Heisermans \"\" It's Earnings that Count\"\" you cannot do his power-staircase without digging into the 10Qs. by using his methodology I have several 5 baggers over the last 5 years and I'm confident that I'll have more. I think it is an interesting factoid as well that the books most recommended for investing in stocks on Amazon all advocate reading and getting information from 10Ks. The other book to read is Peter Lynch's one-up-wall-street. The fact is money manager's hands are tied when it comes to investing, especially in small companies and learning over the last 6 years how to invest on my own has given me that much more of my investing money back rather than paying it to some money manager doing more trades than they should to get commision fees.\"", "title": "" }, { "docid": "5ac2024a51ee08822de105835d47809c", "text": "\"For learning about finances my main two financial resources are this site, and the Motley Fool. My secondary sources are keeping up with columns by my favourite economic journalists - in the press in the US, Australia, England, and India. Regarding your comment about feeling green on the basics despite the reading - you're not alone. I've been interested in financials for better than 10 years, but there are a lot of questions on this site where I say to myself, \"\"I've no idea of what the answer could be, what are our resident experts saying?\"\" Having said that, there are some topics where I feel as though I can weigh in - and they tend to be where I have a little book knowledge and a lot of personal experience.\"", "title": "" }, { "docid": "77c8e1d09e612404240faca6cb5bba6e", "text": "In the intro to the Big Short, the author talks about how he wrote liars poter to steer people away from wall street, but in the end it became a manual for how to work there. I am not trying to steer you away, or towards anything except the facts. If you want to do well in something, the best idea is to understand it; warts and all.", "title": "" }, { "docid": "3f4d2782016a99449f0364ecead401b2", "text": "https://www.google.ca/amp/s/amp.businessinsider.com/most-important-finance-books-2017-1 Bloomberg, finacial times, chat with traders, calculated risk, reuters, wsj, cnbc(sucks), bnn (if canadian) Audio books on youtube helped me read a lot of finance books in a short amount of time, listen while working out. One thing that helped me stand out at my student terms (4th year here) was learning outside of the classroom and joining an investment club. Learning programming can help if thats a strength, but its really not needed and it can waste time if yoi wont reach a point to build tools. Other than that at 18 you have more direction than i did, good luck!", "title": "" }, { "docid": "8e0cc6474e82e1d2d036cd295fc54b37", "text": "\"You're right, the asset allocation is one fundamental thing you want to get right in your portfolio. I agree 110%. If you really want to understand asset allocation, I suggest any and all of the following three books, all by the same author, William J. Bernstein. They are excellent – and yes I've read each. From a theory perspective, and being about asset allocation specifically, the Intelligent Asset Allocator is a good choice. Whereas, the next two books are more accessible and more complete, covering topics including investor psychology, history, financial products you can use to implement a strategy, etc. Got the time? Read them all. I finished reading his latest book, The Investor's Manifesto, two weeks ago. Here are some choice quotes from Chapter 3, \"\"The Nature of the Portfolio\"\", that address some of the points you've asked about. All emphasis below is mine. Page 74: The good news is [the asset allocation process] is not really that hard: The investor only makes two important decisions: Page 76: Rather, younger investors should own a higher portion of stocks because they have the ability to apply their regular savings to the markets at depressed prices. More precisely, young investors possess more \"\"human capital\"\" than financial capital; that is, their total future earnings dwarf their savings and investments. From a financial perspective, human capital looks like a bond whose coupons escalate with inflation. Page 78: The most important asset allocation decision is the overall stock/bind mix; start with age = bond allocation rule of thumb. [i.e. because the younger you are, you already have bond-like income from anticipated employment earnings; the older you get, the less bond-like income you have in your future, so buy more bonds in your portfolio.] He also mentions adjusting that with respect to one's risk tolerance. If you can't take the ups-and-downs of the market, adjust the stock portion down (up to 20% less); if you can stomach the risk without a problem, adjust the stock portion up (up to 20% more). Page 86: [in reference to a specific example where two assets that zig and zag are purchased in a 50/50 split and adjusted back to targets] This process, called \"\"rebalancing,\"\" provides the investor with an automatic buy-low/sell-high bias that over the long run usually – but not always – improves returns. Page 87: The essence of portfolio construction is the combination of asset classes that move in different directions at least some of the time. Finally, this gem on pages 88 and 89: Is there a way of scientifically picking the very best future allocation, which offers the maximum return for the minimum risk? No, but people still try. [... continues with description of Markowitz's \"\"mean-variance analysis\"\" technique...] It took investment professionals quite a while to realize that limitation of mean-variance analysis, and other \"\"black box\"\" techniques for allocating assets. I could go on quoting relevant pieces ... he even goes into much detail on constructing an asset allocation suitable for a large portfolio containing a variety of different stock asset classes, but I suggest you read the book :-)\"", "title": "" } ]	fiqa
13ed7e77c286c150c5bc04fd35a2c9d5	Creating a personal company	[ { "docid": "2412c5cd1130f007f6f068e6b280e2b3", "text": "\"You're confusing so many things at once here...... First thing first: we cannot suggest you what to do business-wise since we have no idea about your business. How on Earth can anyone know if you should sell the software to someone or try to distribute to customers yourself? How would we know if you should hire employees or not? If you say you don't need employees - why would you consider hiring them? If you say you want to sell several copies and have your own customers - why would you ask if you should sell your code to someone else? Doesn't make sense. Now to some more specific issues: I heard sole proprietary companies doesn't earn more than 250k and it's better to switch to corporation or LLC etc. because of benefits. I heard it was snowing today in Honolulu. So you heard things. It doesn't make them true, or relevant to you. There's no earning limit above which you should incorporate. You can be sole proprietor and make millions, and you can incorporate for a $10K/year revenue business. Sole proprietorship, incorporation (can be C-Corp or S-Corp), or LLC - these are four different types of legal entity to conduct business. Each has its own set of benefits and drawbacks, and you must understand which one suits you in your particular situation. For that you should talk to a lawyer who could help you understand what liability protection you might need, and to a tax adviser (EA/CPA licensed in your state) who can help you understand the tax-related costs and benefits of each choice. On the other hand I heard that if I create LLC company, in case of failure, they can get EVERYTHING from me, what's this all about? No. This is not true. Who are \"\"they\"\", how do you define \"\"failure\"\", and why would they get anything from you at all? Even without knowing all that, your understanding is wrong, because the \"\"LL\"\" in LLC stands for LIMITED liability. The whole point of forming LLC or Corporation is to limit your own personal liability. But mere incorporation or forming LLC doesn't necessarily mean your liability is limited. Your State law defines what you must do for that limited liability protection, and that includes proper ways to run your business. Again - talk to your lawyer and your tax adviser about what it means to you. I'm totally unfamiliar with everything related to taxes/companies/LLC/corporation etc Familiarize yourself. No-one is going to do it for you. Start reading, ask specific questions on specific issues, and get a proper legal and tax advice from licensed professionals.\"", "title": "" } ]	[ { "docid": "052392f5d66b263d95bf4d5e2838e319", "text": "\"Equity does not represent production divisions in a company (i.e. chocolate, strawberry, and vanilla does not make sense). In Sole proprietorship, equity represents 1 owner. In Partnership, equity has at least two sub-accounts, namely Partner 1 and Partner 2. In Corporations, equity may have Common Stockholders and Preferred Stockholders, or even different class of shares for insiders and angel investors. As you can see, equity represents who owns the company. It is not what the company does or manufactures. First and foremost, define the boundary of the firm. Are your books titled \"\"The books of the family of Doe\"\", \"\"The books of Mr & Mrs Doe\"\", or \"\"The books of Mr & Mrs Doe & Sons\"\". Ask yourself, who \"\"owns\"\" this family. If you believe that a marriage is perpetual until further notice then it does not make any sense to constantly calculate which parent owns the family more. In partnership, firm profits are attributed to partner's accounts using previously agreed ratio. For example, (60%/40% because Partner 1 is more hard working and valuable to the firm. Does your child own this family? Does he/she have any rights to use the assets, to earn income from the assets, to transfer the assets to others, or to enforce private property rights? If they don't have a part of these rights, they are certainly NOT part of Equity. So what happens to the expenses of children if you follow the \"\"partnership\"\" model? There are two ways. The first way is to attribute the Loss to the parents/family since you do not expect the children to repay. It is an unrecoverable loss written off. The second way is to create a Debtor(Asset) account to aggregate all child expense, then create a separate book called \"\"The books Children 1\"\", and classify the expense in that separate book. I advise using \"\"The family of Doe\"\" as the firm's boundary, and having 1 Equity account to simplify everything. It is ultimately up to you to decide the boundaries.\"", "title": "" }, { "docid": "6f7b701ecc8101b8fca1533da7369769", "text": "Wow, your experience is definitely not unique. A close friend of 8 years complained about his medium sized company struggling to gain market share. The company I worked for at that time had a product that could dovetail with his product with some effort. I told him about this idea, and the ball was set rolling. I had set up a small company to act as supplier of the integration service between these two companies, with all effort on my side being done at own cost, and the continuous integration cost being carried by my company. The friend found a way to steal most of my source code, and got a developer to complete the integration system, while cancelling the contract with me on ungrounded accusations. I realised that warnings from other friends about this guy's integrity proved accurate, and I decided to cut all ties since no money had been made. If this had happened after I had quit my full-time job as was the plan and started depending on this business for income my family would have lost everything we had. OP has the core truth of it: > you may feel that your company is different from all of those other companies that have problems or interpersonal differences. Don't assume that. Trust your partners, have high standards for your performance and the performance of each individual in the group, but pay attention to protecting yourself along the way. Verbal agreements or goodwill may mean something to you but don't count on everybody else holding themselves to that standard.", "title": "" }, { "docid": "395f71ebcf82988c69e077ef34bba23f", "text": "Turning your fitness passion and experience into a business can open up a number of opportunities. Starting your own gym may seem to be overwhelming, so here is an upportunity about personal training franchise. A partnership like personal training franchise enables even low investments to open home based fitness business, be an entrepreneur and still enjoy the continuous support of a big brand. Like just you fitness franchise helps in designing, building the location, doing some heavy duty marketing and assisting in every step of the way: http://hfbatman.informe.com/profile2769.html", "title": "" }, { "docid": "6491f0618e362b2216da7c27c43dc412", "text": "\"Hello! First of all, I think it's great you're asking the community for help. Asking for help when you need it is a sign of strength and self-awareness of your own limitations (which we all have, even the smartest business people ask questions, in fact they ask the most questions). I'm wrapping up year 2 of doing what you're trying to do and am finally seeing real traction. I am a bit older than you and started out on my own 7 years after grad school, but I have learned a lot and don't mind sharing. Here's some things you might find useful. * Never work for free (working for \"\"equity\"\" or working for \"\"exposure\"\" is working for free). People who offer you this because you're just starting out are parasites looking to sell your talents but not pay for them. The only thing you can take away from attempts to do this is that your talents are in demand, which is good! * Never sell yourself short: would you rather do 10 websites for a $1000 each or do 1 website for $10000? You'll be doing a lot of projects in the middle, but one very important thing to bear in mind is that one $10000 website is a lot less work and may make you the same amount of money (or more) overall. * In the beginning, maybe you think you need to build a portfolio. But you'd be surprised how many prospects don't care what's in your portfolio and in fact never look at the portfolio, which leads me to the most important bit of advice: * Learn to sell yourself. YOU are your company's first and main product. Learn to sell yourself (as the smart kid, future Fortune 500 CEO who stays up all night getting things done, etc) * Always aim high in your proposals. You'd be surprised how many people don't negotiate at all. That being said, always put something in your proposal that is a good idea but it beyond what their asking for. If they ask you to come down in price, remove this feature and come down a little bit. * Develop an ability to read how interested a prospect is in your services before you spring the price on them. At your age, I was waiting tables. This helped me to be able to read a customer to determine which waiter they wanted me to be: the attentive one, the high class one, the friend, or the quiet servile. Consider taking on a side job to help you develop this skill. * As I said above, some prospects will sign on the line without negotiating. You might even take two proposals with you into a meeting with a prospect, one priced high and one low, and present the version that matches their interests. Go high if they need something \"\"right now\"\". * Remember you are your company's first product. This means also that your time is the company's first commodity. Be open to other things. I have a background in mathematics and am most capable as a software developer and a web developer. But I also help other companies sell and support physical products not at all related to technology. Because it's highly profitable, I do it. * When you're a one person business selling your time at the highest price is the name of the game. But growing your business will require the help of others. I found it helpful to first network with other like minded people and split project money according to skill level and time commitment on a per project basis. This will allow you to take on bigger projects. * But growing the company will eventually require you to hire (or contract) someone at a far lower pay rate than what you're bringing in. The laws of supply and demand require you to do this as a business person if you're to grow the business (so that the business has money beyond what you're being paid). This is where the extra money comes from: selling the time of others at a higher price than you're paying them. Be conscious of this. Everyone you work with is not going to be your friend. * Make your website awesome. It doesn't have to be a work of art, but let it reflect the seriousness with which you approach your customers' projects. Make sure there are no grammatical errors. Find a website of someone highly successful who's doing what you're doing and emulate it. You don't have to have a portfolio starting out. Your website is your first portfolio item, and if it's awesome, prospects will think you'll do the same for them. Good luck! I'm sure I'm not the only one here who thinks your early developed entrepreneurship is going to take you far.\"", "title": "" }, { "docid": "4d7b33aeffa1e7947273e1224efc77a8", "text": "This is a great response, thanks. I appreciate Dale Carnegie, Sun Tzu etc, but after reading them I felt they didn't offer anything really specific towards running a business. I've just ordered the personal MBA after reading a bit more on it so thanks for that too. Prince2 methodology looks pretty in depth so that's going on the the 'later' pile for now!", "title": "" }, { "docid": "f62e29901397eb7bcc7105db0830ded8", "text": "Interesting thread - I was going to go the route of writing my own reports on companies I invest in and posting them on my personal blog. A way to hone my research skills, signal to employers my research and writing ability and get feedback from people. Good idea?", "title": "" }, { "docid": "cfda73ae0f9dbf89a67f975f4f6047b6", "text": "There is no requirement to open a company. You can work as freelancer. You need to report income and file returns. If your income is more than exempt limit, pay taxes. Apply for a PAN number if you don't have one yet.", "title": "" }, { "docid": "8df27d653c24a4bab5100cf505a1fb69", "text": "I made the mistake going into business with a friend. I lost the business, a lot of money and that friend. If you do it anyway, be prepared to lose it all, or set it up as one being the other's boss.", "title": "" }, { "docid": "236b1590cb77b8a79e65863d4bfee5cf", "text": "Set up a company or partnership. Generally what you describe is a classic partnership. In the US - the partnership itself is not taxed (as opposed to a corporation), and each partner is taxed separately on the distributions. That is, the partners as a whole will be taxed on the income of one, if it is distributed through the partnership. Exactly what you want. Do consult with a tax adviser familiar with the Federal and the State laws with the specifics of setting it up and managing it, maybe you'll get a better advice from a professional (which I am not, of course).", "title": "" }, { "docid": "f3153f161517c291ba3f59b50c82f271", "text": "If you're creating an S-Corp for consulting services that you personally are going to provide, what would it give her to have 50% of the corporation when you're dead? Not to mention that you can just add it to your will that the corporation stock will go to her, and it will be much better (IMHO, talk to a professional) since she'll be getting stepped-up basis. Why aren't you talking to a professional before making decisions? It doesn't sound like a good way to conduct business.", "title": "" }, { "docid": "1a1a4680db0343b6f74d4777a9110b1a", "text": "\"In studying the great \"\"successes\"\" in business, it's clear that those who do the best have unlimited creative and business ideas, not just one idea, but many ideas all day long everyday. No matter what you decide for your current idea, document (write down) your process of each step that you took from idea to inception and track one or two key metrics alongside, so your list would look like this: 1. Socialize idea, goal revenue $0, total cost $0, time 26 hours 2. monitor money invested, costs, and hours of your time 3. Brainstorm: What's the quickest way to have one paying client 4. How will I track my customers? 5. How will I connect and communicate with my customers? 6. And on and on. From having an idea to implementation to even making money or a profit is quite simple, straightforward, and any book, mentor or online free content can show you how. What is \"\"hard\"\" is maintaining motivation, stamina, and creativity for when REAL challenges come up, because they will! Competition swoops in, in a way you that you (and the sage commenters at Reddit) couldn't have predicted, you are audited by the IRS and then owe way more in taxes than you expected from four years ago, you are sued for a small claims or worse, or you simply get bored or inspiration strikes in your heart on another great idea. Problems like this require REAL and thoughtful \"\"creativity and implementation\"\" on demand, all day, everyday. This is what starting a business is really about. Tracking your steps means that you can easily and quickly review what you've done and backtrack or try another idea instead of wallowing in mistakes, missteps, or hard problems. It's really much harder than it sounds, but once you can invent more ideas to solve a problem than there are problems, you can overcome most challenges. The framework is that, you want to start a business because it serves your customers, brings them enough value and delight to pay you, and you have a way to make a living yourself and/or sell eventually or have some \"\"exit strategy.\"\" You want an exit strategy so that your business doesn't become a poor paying \"\"job\"\" that you're a slave to. Because it does, and if it does, a job is way easier and makes you more money. Write down each step of your business building process, track your costs, revenue, and time, and have fun. Then, you have enough energy to \"\"pivot\"\" or change your ideas because you've set up a repeatable, improvable, process to run your next idea through with modifications along the way. You keep retrying your process for your ideas until your lifestyle is paid for (your salary) or something even greater monetarily.\"", "title": "" }, { "docid": "692ae1c3e6eb2eca7e42bcebfcb1293a", "text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them.", "title": "" }, { "docid": "2ecef843666d67bbc24fc04bf1cc0d6d", "text": "\"I really have to use the business card for personal expenses, please assume that in your answer. This is very hard to believe. You must do that? Why not just have the company pay you $1600 each month? Then you can use that money for whatever you want. Why can't you do this? (I cannot think of a legitimate reason...) How to integrate the personal expenses in company? Anyway, to answer your question, what I've done when I accidentally used my corporate card for a personal expense is to code the expense as a payment to me similar to if a check had been written to me. If you aren't ever paying yourself, then you should just pay the company back the $1600 every month. As a side note, I highly recommend you don't do this. By doing this on a regular basis you are opening the door for piercing the corporate veil. This means that the financial protections provided by the LLC could potentially be stripped away since personal and corporate funds are being mixed. The unfortunate end result is that personal assets could end up being fair game too in a judgement against the company. Even if you aren't an owner, your relative could be considered to be \"\"using business money for personal expenses\"\", namely, letting a relative spend business funds for personal use. How to show more expenses and lessen the profit? If you're referring to the personal expenses, then you absolutely do not want to do this! That's illegal and worthy of stiff penalties, which possibly include jail time for tax evasion. Better to just have the company pay you and then the entire payment is deductible and reduces the profit of the company.\"", "title": "" }, { "docid": "248fc9946966154f50ac26871b0d8361", "text": "\"Actually sounds like an interesting concept for a business, potentially! (grin) You know, depending on where you live and how big the market is, you might see if there's a local \"\"concierge\"\" service. These are companies that will act like personal shoppers/assistants for you in all kinds of ways. I can't speak to the quality of their services or the pricing they use, but it would be a great place to start. I'm sure you can find listings of them on the web.\"", "title": "" }, { "docid": "cdfa745942f12fffa09d6b579f5b9403", "text": "That's the foundation of Limited Liability. There is a corporate veil that protects your personal assets from that of your business. The corporate veil can be pierced if you do certain stuff and thus your personal assets will get effected. This allows people to start companies and innovate more and take more risks knowing that they could not be personally liable if the business folds.", "title": "" } ]	fiqa
bb58d9e3f1394664735d7a5d3cdbb9b7	Question about dividends and giant companies [duplicate]	[ { "docid": "0fd8ecaa4e48f0176054c42c39d7c412", "text": "\"Dividends are a way of distributing profits from operating a business to the business owners. Why would you call it \"\"wasting money\"\" is beyond me. Decisions about dividend distribution are made by the company based on its net revenue and the needs of future capital. In some jurisdictions (the US, for example), the tax policy discourages companies from accumulating too much earnings without distributing dividends, unless they have a compelling reason to do so. Stock price is determined by the market. The price of a stock is neither expensive nor cheap on its own, you need to look at the underlying company and the share of it that the stock represents. In case of Google, according to some analysts, the price is actually quite cheap. The analyst consensus puts the target price for the next 12 months at $921 (vs. current $701).\"", "title": "" }, { "docid": "d0a9a32beb28f2649cd2fb43acf5ee56", "text": "I see a false assumption that you are making. (Almost always) When you buy stock the cash you spend does not go to the company. Instead it goes to someone else who is selling their shares. The exception to this is when you buy shares in an IPO. Those of us who have saved all our lives for retirement want income producing investments once we retire. (Hopefully) We have saved up quite a bit of money. To have us purchase their stock companies have to offer us dividends.", "title": "" } ]	[ { "docid": "af4679f4a8afd4be7e354e3d1b5d4410", "text": "Small companies need not pay out heft dividends. It makes much more sense to invest it directly in to the company to build a stronger company and produce future results. For example just say Mike see's a company called Milk Inc. Milk inc is doing very well and for the last three year's the amount the profits are increasing by has been going up by 10% the company is still small and doesn't do dividends. Mike see's opportunity and snatches up 1000 at 2.20 , He knows this company does not pay dividends. 10 years pass and this company is absolutely booming profits are still going up the company has decided to start paying hefty dividends as it no longer needs as much money to invest in it's growth. Shares are now valued at 6.80 . Mike banks.", "title": "" }, { "docid": "61a3236acf34529cae6bfa96e07ccccb", "text": "\"As Dheer pointed out, the top ten mega-cap corporations account for a huge part (20%) of your \"\"S&P 500\"\" portfolio when weighted proportionally. This is one of the reasons why I have personally avoided the index-fund/etf craze -- I don't really need another mechanism to buy ExxonMobil, IBM and Wal-Mart on my behalf. I like the equal-weight concept -- if I'm investing in a broad sector (Large Cap companies), I want diversification across the entire sector and avoid concentration. The downside to this approach is that there will be more portfolio turnover (and expense), since you're holding more shares of the lower tranches of the index where companies are more apt to churn. (ie. #500 on the index gets replaced by an up and comer). So you're likely to have a higher expense ratio, which matters to many folks.\"", "title": "" }, { "docid": "95016e01b71321938f2cd9859aed3f34", "text": "If you have a public company and shareholder A owns 25% and shareholder B owns 25%, and lets say the remaining 50% is owned by various funds/small investors. Say profits are 100mil, and a dividend is payed. Say 50 mil worth is payed out as dividend and 30 mil is kept as retained earnings for future investment. Can the remaining 20 mil be distributed to shareholders A and B, so that they both get 10mil each? Can certain shareholders be favored and get a bigger cut of profits than the dividends pay out is my question basically.", "title": "" }, { "docid": "972477431e58893d9d8e5cb7f9dea618", "text": "\"Most companies are taken over. One can reasonably guess that company X will be taken over for a price P, at some future point in time. Then the company has a value today, that is less than price P, by a large enough margin so that the investor will likely \"\"make out\"\" when the company finally is taken over at some unknown point in time. The exception is a company like Microsoft or Apple that basically grow too large to be taken over. But then they eventually start paying dividends when they become \"\"mature.\"\" Again, the trick, during the non-dividend paying period (e.g. ten or fifteen years ago) is to guess what dividends will be paid in some future time, and price the stock low enough today so that it will be worthwhile for the buyer.\"", "title": "" }, { "docid": "170633134dd6ddb1de23ee94c3c3f679", "text": "Best as i can tell, the simple answer is: the smartest approach to investing for dividends is to pick a company that is, has, and will continue to make a solid profits. there are lots of them out there. specifically, companies with no debt, a history of long-term and steady growth and a stable market share will, almost always recoup any drop in stock valuation due to a dividend payout...and usually in short order. this is why dividends were created...as a mechanism for distributing profits back to investor without diminishing thier stake in the company. the trick then, is to find such companies with the best ratio between stock price and dividend payout. and again, there are a lot of good options out there. All the trepidation is justified however, as many unscrupulous companies will try to pull investors in with high dividends as a means to simply generate capital. these companies have few of the quality attributes mentioned above. instead, High debt, fluctuating or negative profits, minimal market share or diminishing growth present a very risky long term play and will be avoided by this conservative investor.", "title": "" }, { "docid": "6b197fde811ce81c3d417db1ae47b52d", "text": "Depends on if the stock pays a dividend or not. Some companies in their early years may choose to not pay dividends. Your calculations are off as the dividend stated is annual that you'd have to divide by 4 to get what the quarterly amount would be and there can be variances as Ellison's compensation package may well include options so that the number of shares he owns could fluctuate over the course of a year.", "title": "" }, { "docid": "412af011c70132f78f47a1037f0fc2cd", "text": "Nominal. What you say is true, but I'm guessing it would be too complicated to modelate. Plus, a shareholder of a very large company would not necessarily experience said loss if he/she sells the stock in small chunks at a time.", "title": "" }, { "docid": "ac97477afe8baf421d2bcf1b23bf05dd", "text": "You have a misunderstanding about what it is. Absent differential tax treatment buybacks and dividens are the exact same. period. You're saying it yourself, not buying back stock so they can pay out dividends. What the impetus might be is irrelevant. Dividends are a use of funds competing equally with investments or higher salary.", "title": "" }, { "docid": "d2c022b1449e01b86edb8c305f5f463c", "text": "\"Thanks for your reply. I think a lot of people are confused when talking about ownership, and I think it is a definitional issue. When a company issues stock (the first time or anytime), what they are doing is \"\"selling\"\" the right to a percentage of the dividend. They are not actually selling parts of the company to you. Everyone thinks this way though, and that has to do with the Chicago School economists who perpetuated their ideas of ownership which is what everyone know thinks is the case. This way of thinking about corporations and ownership is just wrong (not ethically), just erroneous. As I stated before, Lynn Stout of Cornell University explains this really well. I would encourage anyone to read more about it.\"", "title": "" }, { "docid": "a855468c03562cdb97effe4bd913e03d", "text": "Are we still discussing Amazon? Their net income has hovered around $1 billion per year for the past three years. If that's profit-free, sign me up. They do have very thin margins, but it's clearly by design. And you really do have to take into account the massive volume of sales they do. Still, like you, I'm curious to see if they'll ever turn into a mature, dividend-paying company. For example, it's been interesting to see Microsoft hike their dividend to a fairly competitive level while Yahoo resists being seen as anything other than a growth story.", "title": "" }, { "docid": "9ff4b83c8e5627b710d84964fc9b0a85", "text": "\"This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think \"\"hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise.\"\" Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, \"\"I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense.\"\" That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose.\"", "title": "" }, { "docid": "0ae7681cfe1d319898337f727b749fc4", "text": "Imagine you have a bank account with $100 in it. You are thinking about selling this bank account, so ask for some bids on what it's worth. You get quotes of around $100. You decide to sell it, but before you do, you take $50 out of it to have in cash. Would you expect the market to still pay $100 for the account? The dividend is effectively the cash being withdrawn. The stock had on account a large amount of cash (which was factored into it's share price), it moved that cash out of it's account (to its shareholders), and as a result the stock instantly becomes priced lower as this cash is no longer part of it, just as it is in the bank account example.", "title": "" }, { "docid": "7bd14724d83214a490d517282be12cd3", "text": "I'm fairly convinced there is no difference whatsoever between dividend payment and capital appreciation. It only makes financial sense for the stock price to be decreased by the dividend payment so over the course of any specified time interval, without the dividend the stock price would have been that much higher were the dividends not paid. Total return is equal. I think this is like so many things in finance that seem different but actually aren't. If a stock does not pay a dividend, you can synthetically create a dividend by periodically selling shares. Doing this would incur periodic trade commissions, however. That does seem like a loss to the investor. For this reason, I do see some real benefit to a dividend. I'd rather get a check in the mail than I would have to pay a trade commission, which would offset a percentage of the dividend. Does anybody know if there are other hidden fees associated with dividend payments that might offset the trade commissions? One thought I had was fees to the company to establish and maintain a dividend-payment program. Are there significant administrative fees, banking fees, etc. to the company that materially decrease its value? Even if this were the case, I don't know how I'd detect or measure it because there's such a loose association between many corporate financials (e.g. cash on hand) and stock price.", "title": "" }, { "docid": "07bfc4bf7cdff666fb929873475d0159", "text": "Large companies whose shares I was looking at had dividends of the order of ~1-2%, such as 0.65%, or 1.2% or some such. My savings account provides me with an annual return of 4% as interest. Firstly inflation, interest increases the numeric value of your bank balance but inflation reduces what that means in real terms. From a quick google it looks like inflation in india is currently arround 6% so your savings account is losing 2% in real terms. On the other hand you would expect a stable company to maintain a similar value in real terms. So the dividend can be seen as real terms income. Secondly investors generally hope that their companies will not merely be stable but grow in value over time. Whether that hope is rational is another question. Why not just invest in options instead for higher potential profits? It's possible to make a lot of money this way. It's also possible to lose a lot of money this way. If your knowlage of money is so poor you don't even understand why people buy stocks there is no way you should be going near the more complicated financial products.", "title": "" }, { "docid": "a732d29b5bdf5178f0c483a2cbbe10aa", "text": "Gotcha. So they essentially are just your normal dude that puts money in the stock market, just bigger money. For example, I may buy a few stocks in Apple in the hopes that I can exit at a higher price and have higher dividends. Those big investors are doing the same thing for the 2 benefits I said earlier, but they have more money to invest. Or do they get other benefits that us average stock holders dont get? Thanks for the first reply.", "title": "" } ]	fiqa
613e0c2191714b89d62b55fab760d27d	Are Chase credit cards commonly accepted for purchases?	[ { "docid": "9b266e4a1a7e3770699243362ffe6040", "text": "If you read the fine print in the Pricing & Terms section of that card, you'll see: By becoming a Visa Business Card cardmember, you agree that the card is being used only for business purposes and that the card is being issued to a public or private company including a sole proprietor or employees or contractors of an organization. So that card is a Chase-branded Visa card, and should be accepted anywhere other Visa cards are. Credit cards are normally either MasterCard or Visa, although many of them make that rather inconspicuous. The only major exceptions I know of are American Express and Discover. (And store cards that are only good at one particular store.)", "title": "" } ]	[ { "docid": "777609ebf107f439f7d88abfd8f47406", "text": "\"In the end, all these fees hurt the average consumer, since the merchant ultimately passes cost to consumer. Savvy consumers can stay at par or get ahead, if they put in the effort. It's a pain, but I rotate between 4 cards depending on time of year and type of purchase, to optimize cash back. My cards are: 1. 5% rewards card on certain categories, rotates each quarter 2. 2% travel/dining card (fee card, but I travel a bunch so it's worth it, no foreign transaction fees) 3. 1.5% rewards card for everything else 4. Debit card (swiped as a CC) for small purchases (i.e. lunches) at credit union for \"\"enhanced\"\" high interest checking account, requiring certain # swipes/month. This alone returns to me ~$800/yr.\"", "title": "" }, { "docid": "71a0b8631383a8b1177ba145a64901c7", "text": "Most corporate policies strictly prohibit the card's use for personal use, even if the intent is to re-pay in full, on or before the due date. I'm certain it has something to do with limitation of liability, i.e. the monetary risk the company is willing to put itself at, in order to offer a corporate card program. In my experience, AMEX Corporate Card Services is the most widely-used card, and in my experience, it is your employer that determines and administers the policy that outlines the card's appropriate use, not the credit card provider, so you're best to check with your employer for a definitive answer to this.", "title": "" }, { "docid": "4149853e53d6d1519fa4d4372b8cada7", "text": "As a previous employee at Target the cashier's were all doing things wrong...you cannot buy AMEX or Visa prepaid cards with target giftcards or you get in big shit. You are also not supposed to sell giftcards for giftcards. This should all pop up automatically when the cashier rings it up...so i'm confused.", "title": "" }, { "docid": "4e18a3c6cbff373b8ab0f583250150a6", "text": "A friend of mine has two credit cards. He has specifically arranged with the card issuers so that the billing cycles are 15 days out of sync. He uses whichever card has more recently ended its billing cycle, which gives him the longest possible time between purchase and the due date to avoid interest.", "title": "" }, { "docid": "240af245a23939104871e35102887363", "text": "Update: Here is a Google Docs spreadsheet that is actively maintained and editable. It contains a list of EMV credit cards. With a few exceptions (UN, existing BMO Diners Club cardholders, employees of the state of North Carolina), it still looks like the Travelex card is the best option for most people. Original answer: The premise of the question may now be outdated. I have found internet articles claiming 4 US banks will now issue Chip and PIN cards. Specifically: The Chase link is for their British Airways card, which multiple sources say is really Chip and Signature (leaving it there so no one else suggests it). The Citi link is to specific chip and PIN information. I could not find specific information for the other two. I have a question into my bank (US Bank) and will update when they get back to me. In looking into this, some of the chip and PIN links I followed ended up being chip and signature, so as always, be careful.", "title": "" }, { "docid": "d7bea73bdc586c06b219ff1563f511dc", "text": "Read the fine print and you will be fine. The big caveat is that if you miss a payment for any reason, you will be in default as far as the promotional financing is concerned and will typically owe ALL of the accrued interest, which is usually computed at 20-25% per year. Personally, I use these sorts of offers all of the time at places like Home Depot for stuff that doesn't generally need warranty service. (Wood, tools, etc) Usually I pay the thing off over time as CDs mature. If I'm buying a TV, computer, etc. I always use my AMEX, because I get an extra year of warranty service and points for free.", "title": "" }, { "docid": "d05eb6c32d1e54ec6b7e038b6de18383", "text": "I actually just did that with my Chase Freedom card. They rotate categories every 3 months, and from April-June it was 5% back at grocery stores. So I bought a ton of gas cards and got my 5% back. Next I figured out I would be clever and buy a ton of store gift cards (grocery gift cards) right at the end of the quarter, then use those in the future to purchase gas cards. Well, I just tried that a couple days ago and discovered the store refuses to sell a gift card if you're paying with a gift card! So now I'm stuck with $1,000 in grocery cards until I use them in actual grocery purchases haha One of the things about this grocery store is they partner with a gas station on their rewards program. They offer 10 cents off a gallon with every $100 spent in store, and they double it to 20 cents off a gallon if you buy $100 in gift cards. Then on the back of the receipt is a coupon for 10 cents off per gallon -- which they double on Tuesdays. Unfortunately I think I'm one of the only people that takes this much advantage of the program :-/ Side note: I actually just changed the billing cycle of my Chase Freedom card to end on the 24th of the month. That way I can charge a bunch of rewards in the final 6-7 days of the quarter. And if I have a $0 balance on the 24th, my bill isn't due for 7 weeks -- interest free! And Chase Freedom has never cared if you purchase gift cards with their quarterly rewards program. I also gave them a courtesy email giving the specific store and $$$ amount that was going to be charged, and of course they still called me with a 'fraud alert'...", "title": "" }, { "docid": "5964e038b78de817efa3fe3d15bc7e0b", "text": "You can use the debit card for practically any purchase that you make. You'll have to take the usual precautions and then a few additional ones. Cards make your life really easy and convenient with some basic precautions. All the best for your travel and stay in the USA. My two cents.", "title": "" }, { "docid": "df4baaa5568774bea88b5aba32f7b7d7", "text": "First, if you live in/around a reasonably populated urban area, and you're in the United States, I can't see why you would choose to bank with Chase, B of A, or another large commercial bank. I think you would be much better served by banking at a reasonably large credit union. There are many differences between banks and credit unions, but in a nutshell, credit unions are owned by the members, and operate primarily to provide benefits to their members, whereas a bank is owned by the shareholders, and operates primarily to make profits for the shareholders (not to benefit the customers). The banking industry absolutely hates the credit unions, so if you've ever been nickeled-and-dimed with this fee and that charge by your bank, I have to ask why you're still banking with a company that irritates you and/or actively tries to screw you out of your money? I live in California, and I've banked at credit unions almost exclusively since I started working nearly 30 years ago. Every time I've strayed and started banking at a for-profit bank, I've regretted it. For example, a few years ago I opened a checking account at a now-defunct bank (WaMu) just for online use: eBay and so forth. It was a free checking account. When Chase bought WaMu, the account became a Chase account, and it seemed that every other statement brought new fees, new restrictions, and so forth. I finally closed it when they imposed some stupid fee for not carrying enough of a balance. I found out by logging in to their Web site and seeing a balance of zero dollars; they had imposed the fee a few statements back, and I had missed it, so they kept debiting my account until it was empty. At this point, I do about 90% of my banking at a fairly large credit union. I have a mortgage with a big bank, but that was out of my hands, as the lender/originator sold the mortgage and I had no say in the matter. My credit union has a highly functional Web site, permits me to download my account activity to Quicken, and even has mobile apps which allow me to deposit a check by taking a picture of it, or check my account activity, etc. They (my credit union) are part of a network of other credit unions, so as long as I am using a network ATM, I never pay a fee. In sum, I can't see any reason to go with a bank. Regarding checks, I write a small number of checks per year, but I recently needed to reorder them. My credit union refers members directly to Harland-Clarke, a major-league player in the check printing business. Four boxes of security checks was around $130 plus shipping, which is not small money. However, I was able to order the very same checks via Costco for less than half that amount. Costco refers members to a check printing service, which is a front/subsidiary of Harland-Clarke, and using a promo code, plus the discount given for my Costco membership, I got four boxes of security checks shipped to me for less than $54. My advice would be to look around. If you're a Costco member, use their check printing service. Wal*mart offers a similar service to anyone, as does Sam's Club, and you can search around to find other similar services. Bottom line, if you order your checks via your bank or credit union, chances are you will pay full retail. Shop around, and save a bit. I've not opened a new account at a credit union in some time, but I would not be surprised if a credit union offered a free box of checks when you open a new account with them.", "title": "" }, { "docid": "fd4e136401631719b477bcecbdb36789", "text": "\"Yes and No. There's always a \"\"fee\"\". The difference in credit vs debit usually determines how much that fee is and how it's paid. Each vendor who accepts the major credit card is under contract to pay for equipment and meet certain standards. The same is true for debt card transactions. How much the \"\"fee\"\" is can vary based on the contract the vendor has with MasterCard/Visa/AMEX. But in general most debt transactions go back to the bank who distributed the card.\"", "title": "" }, { "docid": "5f47a81ac4e95a651ae91ff4749699af", "text": "\"As others have stated, credit (signature required) is processed through their respective networks (Visa, MasterCard, Discover, or American Express). A \"\"debit\"\" card tied to your checking account, still go through the same credit network even though the funds are guaranteed from your checking rather than a free loan 30-60 days which has the potential to be unpaid. This type of debit card purchase may be eligible for a lower processing rate for less risk. Debit cards can also be processed through the debit network (PIN required, no signature). This is typically a straight fee such as $0.35. Fees vary, but let me give you a simple comparison: Say you are at the supermarket and buy $50 worth of groceries with a debit card with Visa logo. You are asked \"\"credit\"\" or \"\"debit\"\": At my supermarket, this is why I am given the option to enter my PIN first. If I want to pay by credit, I have to tap Cancel to process via credit signature.\"", "title": "" }, { "docid": "58642a4c87aeea6dc86c379b8c4a7796", "text": "You will have to read your credit card's terms and conditions to determine exactly how this is handled for your card, but for my Discover this is handled as a purchase (at the Purchase APR), not as an advance. The benefits description is specific: Get cash where you shop the most They have a long list of stores (mostly grocery stores) that participate. Your credit card will have a similar page and similar list.", "title": "" }, { "docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95", "text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"", "title": "" }, { "docid": "62d5c32ad49fc3189ebd8b98819ce212", "text": "Your relative in the US could buy a pre-paid Visa (aka Visa gift card) and give you the numbers on that to pay. They're available for purchase at many grocery/convenience stores. In most (all??) cases there'll be a fee of a several dollars charged in addition to the face value of the card. The biggest headache I can think of would be that pre-paid cards are generally only available in $25/50/100 increments; unless the current SAT price matches one of the standard increments they'll have to buy the next card size up and then get the remaining money off it in a separate transaction. A grocery store would be one of the easier places for your relative to do this because cashiers there are used to splitting transactions across multiple payment sources (something not true at most other types of business) due to regularly processing transactions partially paid for via welfare benefits.", "title": "" }, { "docid": "ad261ad87455c52975dbca247f47df0e", "text": "I think the question relates to the discussion here: http://clarkhoward.com/liveweb/shownotes/2010/10/05/19449/ It was always the case that merchants could discount purchases made with cash. What wasn't allowed is allowing the merchant to charge extra for credit card transactions (presumably to cover the fees the merchants pay). These fees usually carry a flat fee per transaction, plus around 2% of the purchase price. What also wasn't allowed was them to refuse any credit transactions. People could charge a pack of gum, even if the fees put that transaction in the red. What's allowed according to this new development is different levels of discounting for different credit cards. Somewhat related to this discussion is another development that happened this summer: merchants now have the ability to refuse credit card transactions of less than $10. Here's my feeling on all of this. I think we'll see merchants imposing minimum credit transaction amounts before we see them monkeying at the 1-2% level on pricing for different types of credit cards. My feeling is that they'd be wise not to change anything, even though they can. Refusing transactions (or charging more for others) is going to come as a unpleasant shock to enough people that they may take their business elsewhere.", "title": "" } ]	fiqa
2601205e830a2a1f70f1325bac738058	How can I find a lost 401K from a past employer?	[ { "docid": "4217f4b58b17bf01e6deb8e2a43bf894", "text": "The Employee Benefits Security Administration within the US Department of Labor is tasked with keeping track of pension and 401K programs. The even have a website to search for abandoned plans: it helps participants and others find out whether a particular plan is in the process of being, or has been, terminated and the name of the Qualified Termination Administrator (QTA) responsible for the termination. The Employee Benefits Security Administration discuss all types of details regarding retirement programs. This document What You Should Know About Your Retirement Plan has a lot of details including this: If your former employer has gone out of business, arrangements should have been made so a plan official remains responsible for the payment of benefits and other plan business. If you are entitled to benefits and are unable to contact the plan administrator, contact EBSA electronically at askebsa.dol.gov or by calling toll free at 1-866-444-3272. There are also EBSA offices spread thought the United States", "title": "" } ]	[ { "docid": "7ce5540b10329f97641f466f7f7df5df", "text": "If they leave the extra funds in the account the IRS will consider it as employer match. They weren't funds from your paycheck, they were from the employers profits. Because they don't have a formal matching program the extra funds will still keep then under the max match. There is one other explanation that needs to be considered. If the last paycheck from 2011 was near the end of the year (the last Friday of 2011 was December 30th) the 401K funds from that final paycheck may not have been deposited into your 401K until early January 2012. If you count contributions when looking at your 401K statement it will look like one two many for 2012; but the IRS only cares when it was deducted from your paycheck, not when it was deposited into your account. The Department of Labor only requires they be deposited by the 15th of the following month.", "title": "" }, { "docid": "2cb94464a77b00425f9ce06a9382f6db", "text": "Reinvestment creates a nightmare when it comes time to do taxes, sadly. Tons of annoying little transactions that happened automatically... Here's one article trying to answer your question: http://www.smartmoney.com/personal-finance/taxes/figuring-out-your-cost-basis-when-youve-lost-the-statements-9529/ You could also try this thing: http://www.gainskeeper.com/us/BasisProIndividual.aspx But I couldn't tell you if it would help. If it makes you feel better, brokerages are now required by the IRS to track your basis for you, so for new transactions and assets you shouldn't end up in this situation. Doesn't help with the old stuff ;-)", "title": "" }, { "docid": "9b0c3b43773c3ba34fd6b29c828b25c1", "text": "\"The IRS has a FAQ page about Hardship Distributions from a 401(k). The IRS defines a hardship in this case as \"\"an immediate and heavy financial need of the employee and the amount must be necessary to satisfy the financial need.\"\" Included in the list of examples is \"\"certain expenses for the repair of damage to the employee's principal residence.\"\" However, whether your former employer allows this particular reason is up to their plan documents. It sounds like, from what you described on the website, that your plan does include this reason as a possibility for you. Next, you need to decide if the projects you have in mind qualify as \"\"repair of damage.\"\" This uses the same rules as the deductible casualty rules found in IRS Publication 547, which defines a casualty this way: A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. A sudden event is one that is swift, not gradual or progressive. An unexpected event is one that is ordinarily unanticipated and unintended. An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Examples are given in Pub 547. If the projects you have in mind are necessary due to an event (like a flood or a fire), it might be allowed. But most \"\"home improvement\"\" projects would not qualify for this. If you'd like a way to simplify your financial profile, an option for you, since you no longer work at this employer, is to roll over this 401(k) into a Rollover (traditional) IRA. This way, you won't have to deal with your former employer anymore. You could pick an IRA custodian that you already have another account with, if you like, and reduce the number of statements that you get. But the IRA will not let you take money out without penalty for home improvement projects, either.\"", "title": "" }, { "docid": "65005c7763f5008da5d62afca405c5cc", "text": "Yes, there are checks and balances. Employers can be, and have been, prosecuted for failing to pay super before the statutory timeline, which is three months from the pay date. However, it is still in your interests to check for yourself. The most common point for missing super to be discovered is when the company goes broke, at which point it's too late for you. What you should do is Check on your payslips that the right amount is allocated to super. It should be 9% of gross, plus any salary sacrifice or additional component. Check your super fund's half-yearly statements line up the deductions given on your payslip. Consider getting online access to your super account so you can check more quickly. If something is missing, call your super fund and/or payroll office. Resources:", "title": "" }, { "docid": "da3bb20b815bd711a1d70bb82fd9fd3f", "text": "In general you cannot. Once the security is no longer listed on the exchange - it doesn't have to provide information to the exchange and regulators (unless it wants to be re-listed). That's one of the reasons companies go private - to keep their (financial and other) information private. If it was listed in 1999, and is no longer listed now - you can dig through SEC archives for the information. You can try and reach out to the company's investors' relations contact and see if they can help you with the specific information you're looking for.", "title": "" }, { "docid": "559e3242a47e027a1305f24643f9a308", "text": "No, unvested money returns to the employer, its not yours. They should send you W2 which will only show the actual (vested) monies you got.", "title": "" }, { "docid": "801ea4db2047b367902c7cdc3ab51f4b", "text": "You are already doing everything you can. If your employer does not have a 401(k) you are limited to investing in a Roth or a traditional IRA (Roth is post tax money, traditional IRA gives you a deduction so it is essentially pre tax money). The contribution limits are the same for both and contributing to either adds to the limit (so you can't duplicate). CNN wrote an article on some other ways to save: One thing you may want to bring up with your employer is that they could set up a SEP-IRA. This allows them to set a % (up to 25%) that they contribute pre-tax to an IRA for everyone at the company that has worked there at least 3 years. If you are at a small company, maybe everyone with that kind of seniority would take an equivalent pay cut to get the automatic retirement contribution? (Note that a SEP-IRA has to apply to everyone equally percentage wise that has worked there for 3 years, and the employer makes the contribution, not you).", "title": "" }, { "docid": "84a5feca8c5035f6b1cf0e7cf1f8e6ee", "text": "A company as large as Home Depot will have a fairly robust Human Resources department and would probably be able to steer you in the right direction: odds are they know the name of the brokerage and other particulars. I did some googling around, their # is (1-866-698-4347). Different states have different rules about how long an institution can have assets abandoned before turning them over to the state. California, as an example, has an abandoned property search site that you can use. That being said, I had some penny stocks sitting in a brokerage account I never touched for about 20 years and when I finally logged back in there they were, still sitting there.", "title": "" }, { "docid": "35d7b7bfa64a908279a2976bd2f45da3", "text": "The old school way would have been to identify some wealthy zip codes and cold call like a mofo. At present I would prefer to find some retiring advisor and buy his book (that may mean leaving your current firm).", "title": "" }, { "docid": "180e87b8bc2cab1c42dd460fd98a8b67", "text": "\"I'm not sure what you mean by \"\"receive retirement benefits\"\". If the company had a 401k, that probably is the retirement plan. Few companies have both a 401k and an old-style pension plan, you typically have one or the other. So if your 401k was rolled over into some other account, you have already received your retirement benefits. If you mean that the 401k was rolled over into an IRA and you are asking if you can now start withdrawing from the IRA, see Excel Strategies answer. Short answer: Yes you can, but there's a 10% penalty unless you meet one of the exceptions.\"", "title": "" }, { "docid": "5571f9036e7c42555e0de2cabec4d54d", "text": "I work for a hedge fund, not wealth management, but I assume that client information is treated similarly. Misplacing it is a huge deal. The company will probably need to formally investigate it and inform all the clients involved. Even if they can prove that no one looked at the information it's going to make clients question the company's procedures. I could see it being a firing offense,depending on how many clients were affected and the nature of the data. Sorry if that's not what you wanted to hear.", "title": "" }, { "docid": "f7ca42754f8dbcf566f746c495e6325d", "text": "Take The 20k and transfer it to the new employer 401k. You then can take a loan and accomplish the same thing. By the time you pay the tax and 10% penalty, that withdrawal will be worth just over half. The same half you can borrow out, pay yourself the interest and not lose out on 50 years of growth.", "title": "" }, { "docid": "d2c894ede59d3edcf779c575c9a3ed0a", "text": "Most companies put the company match in your account each paycheck, but your are not generally vested for the match. If you leave before the specified time period then they pull back part of the matching funds. I knew somebody who did something similar back in the 1980's with their 401K. They put in 8% of their paycheck after taxes; a 100% match was deposited; then they pulled out the employees contribution every quarter. They did this for the 10 years I knew them. It avoided any tax implications, and they were still saving 8% of their pay for retirement.", "title": "" }, { "docid": "d4dfcb04dd8e29c61194e90ca80b4cde", "text": "\"(Insert usual disclaimer that I'm just a random guy on the Internet, not any kind of certified tax professional.) But once I withdraw the money, how is that money taxable? If I'm understanding your situation correctly, you want to look at the instructions for form 8889, under Excess Employer Contributions. It simply says, \"\"If the excess was not included in income on Form W-2, you must report it as 'Other income' on your tax return.\"\" There doesn't look to be any particular wording beyond that, so I'd just put it on Form 1040 Line 21 Other Income, and label the line really specifically like \"\"Excess Employer Contributions distributed from HSA\"\". Also there is no mention of whether any FICA taxes (social security and Medicare) apply to these amounts. You say that this was entirely contributed by the employer. But even for cases where one contributes directly through payroll with an optional pre-tax deduction, this is usually implemented as a \"\"salary reduction agreement\"\" where the company is actually paying less money in salary (and thus less showing up on the W-2) and just contributing to the HSA account instead. It's listed on the 8889 as an \"\"Employer Contribution\"\", even if in fact one sees it as a deduction on one's pay stub. In either case, since the company didn't pay you the money as salary (and merely contributed to the HSA instead), I wouldn't expect any FICA taxes to be owed on it. The fact that the IRS wants it listed under \"\"Other income\"\" instead of \"\"Wages\"\" also implies to me that it doesn't count as salary that needs FICA taxes. Presumably, if people abused this in some way (like getting their employer to deliberately over-contribute each year and getting a refund in some sort of crazy scheme to try to reduce their SS taxes) the government would get rather upset and probably call it some sort of tax evasion. But for the amounts involved here, particularly as you're following the instructions listed, I just wouldn't worry about it. Assuming that I withdraw excess contribution and report everything on Form 8889 and Form 1040, is there any further action required from my previous employer? It's your HSA, so I wouldn't think so. Since the eligibility for HSAs is based on what you do, and not what they do (you could, for instance, get covered by a different HDHP and they wouldn't be notified nor really care), I don't think they have anything more to do with it. Also I am not sure how to calculate amount of interest attributable to excess contribution. I have only around $0.20 of total interest this year. The bank holding the HSA could probably help with that, as I'd expect it to be a normal part of the excess contribution withdrawal process. If not, I'd just make a reasonable effort based on the interest rate, amount involved, and number of days that the excess was in the account. Also keep in mind that in general when filing taxes, anything under $0.49 can round to $0. At some point, one can only be \"\"as honest as the law allows\"\".\"", "title": "" }, { "docid": "0644bea83d844d62f2f2ef527c2c4574", "text": "In the long run the drivers are getting pulled from the equation. I don't care how much regulatory pressure the self driving car industry faces, they'll have it figured out in 5 years. You are talking about an interest group that includes Google, Tesla, Uber, Lyft, Ford, GM and probably Apple. They are all spending billions on the technology and want a return on that investment.", "title": "" } ]	fiqa
c3d1d4ce96cc4193d21cdeddf2de08f7	Is there any circumstance in which it is necessary to mark extra payments on a loan as going to “principal and not interest”?	[ { "docid": "79d2ca0681ec20663320a4dee527ced1", "text": "It could be a couple of things besides extra principal: I seem to remember hearing that some (shady?) lenders would just pocket extra payments if you didn't specify where they were headed, but I've also been told that this just isn't true.", "title": "" }, { "docid": "1ad8afd66a346863ad67ec813bbba710", "text": "The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine.", "title": "" }, { "docid": "5912fe013d03f8d669c32cb45c42b042", "text": "I had a car loan through GMAC and extra money was applied to future payments. At one point, I received a statement telling me I had 15 months until my next payment was due because I had not marked extra payments as going to principal.", "title": "" }, { "docid": "f0b4a5e9f610b86c5589d5f91ab6dd00", "text": "I would always presume that given a choice of doing what is in its own self interest verses in the customer's interest, a bank will ALWAYS do the former rather than the latter. Banks are in the business of making money, always presume that their policies, processes and contractual terms will be slanted to maximize their ability to make money. It's not being evil or anything, it's just business, they are under no obligation to be altruistic or do what's best for you at the expense of their profits. So, especially since it's not exactly a hardship, I would always make extra principal payments using a separate check and clearly mark it as an extra principal payment.", "title": "" } ]	[ { "docid": "0cc576b5888470d7003f4abf92ab4d38", "text": "No. Net profit is calculated after taxes. Loan interest is an expense, so it will result in the company paying less taxes (it acts as a tax shield), so net profit should still be positive. How much will depend on tax and interest rate. Only the portion of the $1.000.000 that correspond to interest is an expense. Principal payments are not.", "title": "" }, { "docid": "6a7d38f2451ab0d1f6ad2b66b641b5c7", "text": "The reason it's broken out is very specific: this is showing you how much interest accrued during the month. It is the only place that's shown, typically. Each month's (minimum) payment is the sum of [the interest accrued during that month] and [some principal], say M=I+P, and B is your total loan balance. That I is fixed at the amount of interest that accrued that month - you always must pay off the accrued interest. It changes each month as some of the principal is reduced; if you have a 3% daily interest rate, you owe (0.03B31) approximately (plus a bit as the interest on the interest accrues) each month (or 30 or 28). Since B is going down constantly as principal is paid off, I is also going down. The P is most commonly calculated based on an amortization table, such that you have a fixed payment amount each month and pay the loan off after a certain period of time. That's why P changes each month - because it's easier for people to have a constant monthly payment M, than to have a fixed P and variable I for a variable M. As such, it's important to show you the I amount, both so you can verify that the loan is being correctly charged/paid, and for your tax purposes.", "title": "" }, { "docid": "6a32ab6bf72d834302a6fca7bae388b3", "text": "\"So with any debt, be it a loan or a bond or anything else, you have two parts, the principal and the interest. The interest payment is calculated by applying the interest % to the principal. Most bonds are \"\"bullet bonds\"\" which means that the principle remains completely outstanding for the life of the bond and thus your interest payments are constant throughout the life of the bond (usually paid semi-annually). Typically part of the purpose of these is to be indefinitely refinanced, so you never really pay the principal back, though it is theoretically due at expiration. What you are thinking of when you say a loan from a bank is an amortizing loan. With these you pay an increasing amount of the principal each period calculated such that your payments are all exactly the same (including the final payment). Bonds, just like bank loans, can be bullet, partially amortizing (you pay some of the principle but still have a smaller lump sum at the end) and fully amortizing. One really common bullet structure is \"\"5 non-call 3,\"\" which means you aren't allowed to pay the principle down for the first three years even if you want to! This is to protect investors who spend time and resources investing in you!\"", "title": "" }, { "docid": "fc8673c9c96f25059fcf3f3becd6bc98", "text": "\"Depending on how you view the loan, it could either be considered an Asset or a Liability. Since you are not charging interest, it might seem more intuitive to create an \"\"Assets:Cash Loan\"\" account, and transfer money to & from it (when you receive payments) like you would with a bank account. Personally, I prefer to think of all loans as liabilities. Whether it's a debt which you owe someone, or a balance which someone else owes you, since it's an 'unsettled' amount I file it under \"\"Liabilities:Loan\"\". Either way, you record the initial balance as a debit from your bank, and then record payments as credits back to your primary account. The only way that income or expenses ever gets involved would be if you charged interest (income) or if you forgave some or all of the loan (expense) at some point in the future.\"", "title": "" }, { "docid": "508ba9807775aa566286ecb749ae099a", "text": "No offense to any bankers who are reading, but i find it remarkable that they can confuse what I'd expect to be an otherwise simple explanation. If at the end of each day the interest is added, you go to sleep with a new balance. At the moment it's added, you have no interest due, just a higher principal amount than when you went to sleep last night. When I view my loan, I know how much interest added to principal since the last payment. Any amount I pay over that has to go to principal. Forgive me, but the rest sounds like nonsense.", "title": "" }, { "docid": "c8879e48fff18d0db4a657a7bbac0afe", "text": "\"The other answers have touched on amortization, early payment, computation of interest, etc, which are all very important, but I think there's another way to understand the importance of knowing the P/I breakdown. The question mentions the loan payment as \"\"cash outflow\"\". That is true, but from an accounting perspective (disclaimer: I am not an accountant, but I know enough of the basics to be dangerous), the outflow needs to be directed to different accounts. The loan principal appears as a liability on your personal balance sheet, which you could use, for example, in determining net worth. The principal amount in your payment should be applied to reduce the liability account. The interest payment goes into the expense account. Another way to look at it is that the principal, while it does reduce your cash account, can be thought of as an internal transfer to the liability account, thus reducing the size of the liability. The interest payment cannot. Aside: From this perspective, the value of the home is an asset, and the difference between the asset account and the loan liability account is the equity in the house (as pointed out in different language by the accepted answer). Of course, precisely determining the value of an illiquid asset like a house at any given moment pretty much requires you to actually sell it, so those accounts are hard to maintain in real-time (the liability of the loan is much easier to track).\"", "title": "" }, { "docid": "c00d295dd92b63c56bd599f579d7ac83", "text": "\"So, let's take a mortgage loan that allows prepayment without penalty. Say I have a 30 year mortgage and I have paid it for 15 years. By the 16th year almost all the interest on the 30 year loan has been paid to the bank This is incorrect thinking. On a 30 year loan, at year 15 about 2/3's of the total interest to be paid has been paid, and the principal is about 1/3 lower than the original loan amount. You may want to play with some amortization calculators that are freely available to see this in action. If you were to pay off the balance, at that point, you would avoid paying the remaining 1/3 of interest. Consider a 100K 30 year mortgage at 4.5% In month two the payment breaks down with $132 going to principal, and $374 going to interest. If, in month one, you had an extra $132 and directed it to principal, you would save $374 in interest. That is a great ROI and why it is wonderful to get out of debt as soon as possible. The trouble with this is of course, is that most people can barely afford the mortgage payment when it is new so lets look at the same situation in year 15. Here, $271 would go to principal, and $235 to interest. So you would have to come up with more money to save less interest. It is still a great ROI, but less dramatic. If you understand the \"\"magic\"\" of compounding interest, then you can understand loans. It is just compounding interest in reverse. It works against you.\"", "title": "" }, { "docid": "00fb37a7d033be1b653ba67e7b758935", "text": "\"The one thing that I saw in here that raised a big red flag is that you said you \"\"overpaid\"\" on your interest. ALWAYS make sure you tell them that any extra money should be applied to principal only, not to interest. You accrue interest based on your outstanding principal amount, so getting that lower reduces the overall amount of interest you end up paying. Paying the interest ahead saves you nothing. However, make sure you pay the current interest owed that month. They can capitalize past due interest - in affect, change that to be considered an addition to the loan principal amount and you end up paying interest on the interest.\"", "title": "" }, { "docid": "e6d69a6de6af68379bf6eb0bb4cade98", "text": "It used to be much more common, particularly for sub-prime loans. If you do run into someone offering a loan with a prepayment penalty, you should certainly consider other options.", "title": "" }, { "docid": "8481a2039b2bc140fa374e80e6830c32", "text": "If there's no prepayment penalty, and if the extra is applied to principal rather than just toward later payments, then paying extra saves you money. Paying more often, by itself, doesn't. Paying early within a single month (ie, paying off the loan at the same average rate) doesn't save enough you be worth considering", "title": "" }, { "docid": "ce527149471a9f71e42cff35126becb5", "text": "\"Yes, your debt goes up by that amount. It becomes part of the loan, and you'll pay interest on it. That's what \"\"capitalization \"\" means. It's not a bill because you don't have to pay it. We'll, not yet…\"", "title": "" }, { "docid": "530d44ec6a3ba57ef978b22dbab78778", "text": "It is often the case (more commonly in countries other than the USA) that a fixed-term loan has an early redemption penalty, because the lender themselves will incur a cost for settling the loan early, while a variable-rate loan does not. If this is the situation and you think you might want to pay off the loan early, you should definitely consider the variable rate rather than then fixed rate.", "title": "" }, { "docid": "8b43f330c145b3509335301b690bd3eb", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (pI)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (pI)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (pI)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (pI)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan.", "title": "" }, { "docid": "d98fbc6f95845296f3b6efb947d9d778", "text": "If it is a business loan, the borrower would be able to claim a deduction for any interest paid on the loan and the lender would include the interest earned as part of their taxable income. You need to be careful on what you do and don't include as income. If the repayments made to you by the borrower in a year is $10,000 but only $8,000 of that is interest and the other $2,000 is part of the principal being returned to the lender, then you would only claim $8,000 as your income and the borrower would only claim $8,000 as a business deduction. Of course if it is interest only, then you and the borrower would use the full $10,000.", "title": "" }, { "docid": "fa9c14c139e7f18be577416e908b7fd9", "text": "the government wants to tax your money before you die. If you die your 401(k) becomes part of your estate and will not be taxed to as great an extent.", "title": "" } ]	fiqa
fac503b6fec088897ba8c0b188ea100d	How can small children contribute to the “family economy”?	[ { "docid": "f6565dd0aa33decf3ce5cdb619b40921", "text": "Another suggestion I heard on the radio was to give the child the difference between the name brand they want, and the store brand they settle on. Then that money can be accumulated as savings. Saving money is as important a feature of the family economy as earning money. Be careful with what you have a child do for reward vs what you have them do as a responsibility. Don't set a dangerous precedent that certain work does not need to be done unless compensation is on the table. You might have a child who relies on external motivations only to do things, which can make school work and future employment hard. I would instead have my child do yard work, but while doing it explain opportunity costs of doing the work yourself vs hiring out. I would show my kid how saving money earns interest, and how that is essentially free money.", "title": "" }, { "docid": "80a7baf28f607ad43f866848dbc4e9dd", "text": "Similar to the lawn care you mentioned: if you have space, you could have the kids create a mini-farmstand. They could grow flowers for cutting, some vegetables, etc. It would be a different twist on the classic lemonade stand. If the kids are into animals and space and zoning allows, you could keep chickens and add eggs to your mini-farmstand. Upfront costs for the garden would be small enough that they can learn about how investing in a business works at a very small scale. Along with learning about money, they also learn responsibility because it requires commitment and daily attention. It's also seasonal in a way that meshes well with school (though having animals is a constant year-round responsibility).", "title": "" }, { "docid": "7ba5c8e77be27b5bbb0c9e0ac99adff3", "text": "\"@MrChrister - Savings is a great idea. Coudl also give them 1/2 the difference, rather than the whole difference, as then you both get to benefit... Also, a friend of mine had the Bank of Dad, where he'd keep his savings, and Dad would pay him 100% interest every year. Clearly, this would be unsustainable after a while, but something like 10% per month would be a great way to teach the value of compounding returns over a shorter time period. I also think that it's critical how you respond to things like \"\"I want that computer/car/horse/bike/toy\"\". Just helping them to make a plan on how to get there, considering their income (and ways to increase it), savings, spending and so on. Help them see that it's possible, and you'll teach them a worthwhile lesson.\"", "title": "" }, { "docid": "af1efed33cbdfe6f3177ff25c1e7d909", "text": "There is also babysitting, dog walking and house sitting. Depending on their age of course. You should also investigate what is required to get them the ability to setup their own Roth IRA. I know one of the requirements is you can't put more into the Roth then was earned in income in the year. They might also have to file an income tax return (not sure about that one). Just think of how far ahead of the game they will be if they can get a couple of grand or more in a Roth account while in their early teens.", "title": "" }, { "docid": "3048767f63dd94d3d400c5ef3cc67c92", "text": "If you're trying to teach them the value of money and quantifying the dollar difference between prices, one very effective way to do this is by using bar charts. For instance, if a toy is $5, and movie they really want to see is $10, and a vacation they want to go on costs $2000, it can be a useful tool to help explain how the relative costs work.", "title": "" }, { "docid": "11605d7412377e6438ee6df9971add7f", "text": "\"(Although I disagree with the idea of getting a child working a real job to early, (I think kids should learn at school, learn manners, learn what the world offers and have responsibility) Here is a list of ideas that a small child can do. This is all assuming the child is to young for a work permit and a \"\"normal\"\" job. I am assuming your live in the United States. Comedy Answer: Amway. But forget about getting invited to birthday parties.\"", "title": "" } ]	[ { "docid": "4cda418d37f637ca634dd67e846e44ef", "text": "We are a pretty average (professional, used to be fully two-income) family. I have gone part-time (plus a total career change) to be more involved at home - that's minus 50K from our family budget a year. Montessori for the younger one is - 10K. Violin (-5K) and piano (-5K) lessons for each kid... summer science camps... summer golf/tennis plus equipment... dance/sports all year round are around 10K too. We are looking at an 80K hole in our budget (compared to what we could have had). Plus by now I would have been probably more advanced in my previous career had I stayed there, so the hole is potentially even greater.", "title": "" }, { "docid": "691ec3d827e205e1bde8360d73f464b0", "text": "It's simple. Look, children are basically an 18-year debt, and if a couple is poor, they can't adequately pay that debt AND their own lifestyle costs. If those who can't afford that debt simply... delayed or abstained from reproducing... that would very easily solve the poverty problem permanently, so long as the next generation followed the same. This next generation would also have more of a surplus since their parents had to have had a surplus before having kids. Ad infinitum. This is exactly what happened in my own family so I know it's possible. Ultimately, most poor people only have their parents to blame.", "title": "" }, { "docid": "fb4600091bc47c55b4e482237fe59389", "text": "The Child Care Expense Deduction (line 214) dollar limits will each increase by $1000, to new amounts of $8000 for children under 7 and $5000 for children age 7–16. Notes: As a tax deduction, your tax liability gets reduced at your marginal income tax rate, not the lowest tax rate (as would be the case for a tax credit). Yes, you still need receipts from your child care provider to support any claim. The non-refundable child tax credit a.k.a. amount for children under age 18 (line 367) introduced in 2007 is being eliminated starting in tax year 2015 coincident with the UCCB enhancement above. The credit could previously reduce tax liability by ~$340. The Family Tax Cut is being introduced and will be effective for tax year 2014. That is, when you file your 2014 income tax return in early 2015, you may be able to take advantage of this measure for income already earned in 2014. Provided a couple has at least one child under the age of 18, the Family Tax Cut will permit the transfer of up to $50,000 of taxable income from the higher income spouse's income tax return to the lower income spouse's return. While the potential transfer of $50,000 of taxable income to lower tax brackets sounds like a really big deal, the maximum tax relief is capped at $2000.", "title": "" }, { "docid": "5dbce4387c18772fe1658c4462faa563", "text": "I would disagree. Not all children are set to have good life outcomes. Those raised in poverty often experience a great deal of stress and suffering. Raising children to be productive adults in beneficial to society. Raising a child to continue the cycle of poverty and crime is not. Many times, people voluntarily organize into a family unit whereby the husband earns an income which can be considered in paying the wife to raise the child. Individuals are amazing at coming to voluntary agreements which help society.", "title": "" }, { "docid": "990d7cea7a0d872a8b50cca148e7d234", "text": "\"This is a common and good game-plan to learn valuable life skills and build a supplemental income. Eventually, it could become a primary income, and your strategic risk is overall relatively low. If you are diligent and patient, you are likely to succeed, but at a rate that is so slow that the primary beneficiaries of your efforts may be your children and their children. Which is good! It is a bad gameplan for building an \"\"empire.\"\" Why? Because you are not the first person in your town with this idea. Probably not even the first person on the block. And among those people, some will be willing to take far more extravagant risks. Some will be better capitalized to begin with. Some will have institutional history with the market along with all the access and insider information that comes with it. As far as we know, you have none of that. Any market condition that yields a profit for you in this space, will yield a larger one for them. In a downturn, they will be able to absorb larger losses than you. So, if your approach is to build an empire, you need to take on a considerably riskier approach, engage with the market in a more direct and time-consuming way, and be prepared to deal with the consequences if those risks play out the wrong way.\"", "title": "" }, { "docid": "1c020cee61c8b52238f5db2dd9a7d507", "text": "Perhaps this is lasting result of the recession. I realize that the article specifically states that Lego notably grew and profited through the recession. However, other parts of society and other markets didn't. Now, years later, perhaps those other scenarios are affecting Lego's market. Specifically, I'm drawing a parallel to my personal experience. My kids were born just before the recession. Their grade is the largest grade in the school system. Every grade behind them (the kids born during the recession) is significantly smaller. Whatever the driver(s) was, people were having fewer kids during the recession. Further, although the general view is that the recession is over and the stock markets are back, household spending and income continues to stagnate. With fewer kids and a reluctance to spend, perhaps people in the US and Europe just aren't buying as many premium toys.", "title": "" }, { "docid": "e373dddf3f29f86e314a823b7ab4fea6", "text": "Using household income makes sense, as you would hardly expect differences in standard of living for members of the same household. True, more people in a family will mean more expenses, but not proportionally so. For a typical family of four, it wouldn't really matter if one or both parents contributed towards the household income.", "title": "" }, { "docid": "9999e5a243333da3c268cf7929cc9ffc", "text": "> As a parent, I call bullshit on this. I don't see why. You are confident your kids will be have more chances than you did because you are passing your wisdom onto them. Aren't they lucky to have you as parents? > ...a dynastic focus on generational wealth building simply cannot be called only luck. Nobody is suggesting that wealthy people don't work. I think the point of this article is that the poor work just as hard if not harder but kids from less successful households are naturally going to be taught life skills that are less effective.", "title": "" }, { "docid": "6d14d3e1e91df97e32626f27aa2c3dd7", "text": "While personal responsibility plays a vital role in economic mobility, forces outside individual control, such as access to better work, clearly applies as well. Different folks apply different weight to responsibility vs. access to opportunity, but in any case one should be at least mentioned with the other.", "title": "" }, { "docid": "ab3e0d7bf5b04a94b23a3aa950039e98", "text": "> To imply a grand conspiracy... No conspiracy required. All you have to agree with is that having money makes it easier to make money and society will sort itself into classes that become further apart and harder to move between. > How about it is hard work and good parenting? Those are important but exist in both rich and poor areas and it is a simple fact that you would get further with hard work and good parenting in a rich area than in a poor one. I think a good way to describe it is inequality of affluent opportunity and experience.", "title": "" }, { "docid": "18601b9bb18d04a3bb4c64b4b93ce478", "text": "I have lived in communal houses. Most people don't want roommates. Especially if that means having several kids. I feel like your arguments are practical, I suppose, but not realistic. If I had 3 kids right now, if anything I would probably be earning less money because my flexibility would be much less. I couldn't pursue an education to earn more money because I would still have bills to pay for my kids. My parents are poor, and they live in an area that my job options would be about 3, and none would pay much more than minimum wage. I am 26, but I have known plenty of 19 year old single moms who just aren't able to get a job that pays well enough to support them, and again, they have few options to develop new skills. I guess you can say it is their fault, but we can hardly say that subway shouldn't have to pay them overtime or what is really less than a living wage. Economists and reality have shown us time and time again that more wages overall means a healthier economy. Every state that has raised wages in the past few years is better off because of it. Every state that has done so has seen their economy grow, and joblessness go down.", "title": "" }, { "docid": "9a5ea0ebf12eea480e2f7ab2cd55bb9c", "text": "\"I personally believe if one (average) income could support the needs of a family (nothing extravagant) and the parents had options (instead of only one of the parents having the ability to work for an income that supports a family) it would be better. At the micro view, there would be less grudges and more time for family. I feel bad now bc I'm stretched so thin I don't even have time to watch a tv show with our kids during the week. In our situation, my husband never finished school (his mom let him drop out in the 7th grade) so his work options are very limited. He has had to work out of town jobs since before we started dating. I graduated high school but due to having kids early, I put off college. Because of the expense of daycare, I stayed at home with the kids for about 5 years. The plan is I get my degree next fall, get a decent paying job to support the family and he can figure out what he wants to do as a career and be able to pursue it without having the pressure of HAVING to make an income to support a family. I have been nudging him to at least get an online high school diploma in the mean time but I think he is self conscious and scared he can't do it. We aren't the \"\"Keeping up with the Jones\"\" kind of people. I'm just trying to reach some goals and be financially stable and not worry about if we have enough money in the bank for bills or if the car breaks down if we are screwed. A teacher's job is very time consuming so it definitely will be a challenge if you don't work a job that allows you to help out. At my internship this summer the CFO was able to just leave and bring his daughter to work whenever he needed to. That luxury is not afforded to many. Also on a side note- when you have kids, please make an effort to take your paternity leave if your job offers it. You deserve it! Employees shouldn't feel bad for taking the benefits their company offers. Gender equality ftw!\"", "title": "" }, { "docid": "adaef46a8958f4ce4b2d54b72142aa69", "text": "If your skills are at the level of a McDonald's cashier than you should be compensated for that. You should NOT be compensated for a lifestyle which you WANT. Having a kids and a wife is a choice, no one is putting a gun to your head. If your skills are at the minimum(which is 2% in the USA) than you should not be supporting a family, it's simple. The kid with a father/mother at that level will have a terrible life, lazy parents who are not willing to work to better themselves.", "title": "" }, { "docid": "f3e50dd861f531211ef5db6eeca1998b", "text": "Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today. First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed.", "title": "" }, { "docid": "e6b6b282ec2c58732e168245a2809279", "text": "Check out this recent Planet Money podcast on taxes & incentives via allowance for your children. It might not directly answer your question, but it brings up some interesting things to consider when setting up an allowance for your children.", "title": "" } ]	fiqa
d1a074e156500825b1d6fd2b24866819	Optimal pricing of close to zero marginal cost content	[ { "docid": "9921d8af2769d3036fad6452634e8cfe", "text": "With near zero marginal cost, and infinite supply, your prices are going to be decided by entry cost, competition, and what the market will bear. Generally speaking, though, there are no accurate models for getting these kinds of optimal prices in advance - your best bet is to test, experiment, and then build a business and market specific model based on what you observe. Look at the Steam network, as an example. They are in the business of selling 0 marginal cost software (games), in a market with a significant but quickly decreasing entry cost, and with solid competition. Despite being around for years in a mature market, they're still discovering unexpected optimal price points when testing how their customers behave.", "title": "" }, { "docid": "0117102db5c34d86efc6909afcd4cf35", "text": "\"It seems this will be very much driven by price discrimination. If there are some customers who will pay up to $100, sell at that; and if there are others who'll pay $1 sell at that price. For instance you see computer games, which have zero marginal cost of production, sold at \"\"normal new release\"\" prices, at premium prices with a special box or doo-dad, and at discount prices once the game is a bit old.\"", "title": "" }, { "docid": "ae462f9a04f15b5f88d1fcf85cf53f7d", "text": "\"Software or any online service fits this category I suppose. There are two apps I pay for that are \"\"free.\"\" Evernote and Pandora. Evernote is free for 40MB, $45/yr for 500MB/mo transfer. Pandora is free for 40hrs/mo, $36/yr unlimited. When I use a free product and hit the limit it's a sign to me that I value that product and the owners deserve to get paid. To me, both products provide value that's well above the cost they are asking. In this case, both products are annual subscriptions, but offer monthly as well. You don't mention the type of product you have, the two I listed are similar in billing type, but very difference end uses. The question is - How do you provide value and make your customers want to pay you? BTW - the ~$40/yr give or take, seems a good price point. Under $50, it feels a fair price to pay for a useful product.\"", "title": "" } ]	[ { "docid": "656fb040050e21c9676a9f63858ab091", "text": "\"I agree completely. \"\"I don't always agree with John Cochrane, but when I do, I agree completely.\"\" I think heavy reliance on either approach to pricing is generally a bad idea. Equilibrium models always include something that you're supposed to inherently know, but never do. No-arbitrage models don't necessarily say anything that you don't (in some mathematical sense) already know. So you're either stuck with unknown parameters, or you can't explain why you're something is worth what you say it is beyond, \"\"Herp derp, other people are doing it.\"\" So I think if buy-side people made some use of no-arbitrage models, they'd have a better understanding of the parameters they're making up, and if sell-side people sometimes used equilibrium models, they'd have a better grasp of what's going on economically. Also, it would have the beneficial effect of reminding people that their models are always wrong, even if they're frequently useful.\"", "title": "" }, { "docid": "59246ae9b4f3f7ec846b8c47640bb308", "text": "\"I highly recommend http://pages.stern.nyu.edu/~adamodar/ Professor Damodaran. He's written some of the best valuation books in existence (my favorite, simply \"\"Investment Valuation\"\"). On his website you'll find a big pile of spreadsheets, that are models for working the various approaches to valuing a company. Also, he teaches an MBA-level valuation course at Stern School of Business in NYC. And he videotapes it and you can watch it for free. Very smart, kind, generous man.\"", "title": "" }, { "docid": "fc344ddeb302e9c09684e709c545df6f", "text": "ZeroHedge is valuable because it provides an alternative perspective. I rarely, if ever, agree with their conclusions or make investments motivated by them; but they are sometimes insightful and bring up datapoints of interest. Most financial journalism is written by non-finance people; that's why it's so shitty and useless.", "title": "" }, { "docid": "c14c85b4881270541dec1109753070c3", "text": "Hold on a moment - you were getting 5-7.5% commission on a product that only had a 40% gross margin? That's.... amazingly high. Really. Considering that you are saying that the cost of goods sold for a typical TV is 60% (which sounds close enough to be realistic - my business is typically about 56% COGS), and then add to that the overhead of base salary, utilities, leasehold and leasehold improvements, taxes, operating costs... Sears was probably making a final total of about 2% net margin on that TV sale, which isn't particular great. Getting paid a commission that high on commodity goods is really quite good.", "title": "" }, { "docid": "5ff0d2b58a0072ba0922d31010282b2d", "text": "There are companies who sell data gleaned in aggregate from credit card providers to show how much of what category of product is sold online or offline, but that data is not cheap. 1010data is one such data aggregator we are talking to right now. Haven’t seen pricing yet but I expect 6 figures to access the data", "title": "" }, { "docid": "f4be8b659c36934e777b19e337e476a2", "text": "The profit maximising level of employment: Now we consider how many people a business might decide to employ. The profit maximising level of employment occurs when a firm hires workers up to the point where the marginal cost of employing an extra worker equals the marginal revenue product of labour. I.e. MCL = MRPL. This is shown in the labour demand diagram shown below. http://tutor2u.net/economics/revision-notes/a2-micro-demand-for-labour.html So the cost of each additional unit of labor is 8 (MCL = 8) as the wage is 16/hour and Q = 2L in the short run. Find the right quantity produced by taking dP/dQ of your original inverse demand curve, which will give you the marginal revenue of each product. Set it equal to 8 and solve for q.", "title": "" }, { "docid": "ced09ab3262b25c1ad703326db8ecd26", "text": "\"So it seems like a lot of people here aren't exactly sure about why this works and its financial implications. So what you are referring to is in Finance something called Funds Transfer Pricing or FTP (often referred to as just Transfer Pricing). Like anything else, FTP has its place. Most companies; however, don't use it properly. FTP, theoretically, has one primary purpose (although it's developed a second): to properly allocate opportunity costs across divisions. Let's say Company A produces widgets. They sell these widgets for $200 at a TOTAL COST of $150 and book profits of $50. Now to produce the widget Division 1 makes a computer chip at a cost of $50 that it then \"\"sells\"\" to Division 2 for $60. Division 1 then books a profit of $10. Division 2 then makes some plastic stuff and assembles the device. This is labor intensive so Division 2's costs are $100. Company A sells the completed device for $150. Division 2 subsequently books profits of $40, and appears much more profitable than Division 1, on the surface. The problem arises when Division 1 could sell the chip to the open market for $125. Now it costs them $50 to produce, and they could make a theoretical profit of $75. This is MORE than the company makes AS A WHOLE on the entire device. By having Division 2 pay effectively \"\"fair market price\"\" for that chip, you realize that Division 2 is really operating at a loss (the opportunity cost* of not selling the chip to market is greater than producing the completed device). Company A would be better off getting rid of Division 2 and solely focusing on Division 1. In a good FTP system, Division 2 would pay the fair market price of $125. If done properly, management would hopefully realize it should divest Division 2. That's the *fundamental premise* behind FTP. In actuality things get much more complicated because of economics, the company itself, branding, IT, operations, management, PPE, labor laws, etc. Thats why most companies screw it up. All that other stuff falls under whats called cost allocation accounting. It gets VERY complex and entire masters courses are dedicated to it (different methods, etc.) The other thing you can do with FTP is get crazy tax breaks due to various tax laws. The simplified explanation is that divisions pay taxes on profits to the government *that division* is located in (this works on the state level, too btw.). GE does a lot of this and it's a big part of why they pay almost no-taxes. Again, it gets more complicated when you involve audits as there's some grey area legally. For simplicity, assume tax rates are 40% in the US and 10% in India. So let's say GE makes an airplane engine in the US but \"\"finishes\"\" manufacturing in India. These specific engines costs $5,000,000 for the US division to make, up to a certain point. The US division can then sell the engine at a break even to India. So India \"\"pays\"\" $5,000,000 for the engine. The US division then books no profit. India finishes the manufacturing with additional costs of $1,000,000. The India division then sells the engine to the open market for $9,000,000 . Therefore, the India division books a profit of $3,000,000 and pays taxes of $300,000. Now GE as a whole makes a profit of $3,000,000 less taxes of $300,000 = net profit of $2,700,00. Further, let's say the fair market value of the engine, as is, when the US sells to India is $7,000,000. That would mean US *should* book profits of $2,000,000 and India *should* book profits of $1,000,000. Total taxes by GE are now $800,000 (US) + $100,000 (India) = $900,000. However, what's important is that NET PROFIT is now $2,100,000. *GE just saved $600,000 in taxes by doing this. The beauty of this is, divisions are supposed to charge fair market value for products FTP'd internationally; however, it's REALLY hard for the IRS to say what the value of an unfinished product really is (heck, you could be offering bulk discounts, etc.)... The fact is, often, US divisions have skilled labor that is difficult to replicate elsewhere. They just show US divisions operating at losses to make the company as a whole better. The problem, again, arises when top management don't fully appreciate or understand the reasoning behind this stuff. They end up making cuts to US labor because it's \"\"unprofitable\"\" without thinking about the entire story. I know this is very long winded but hope it helps! tldr; companies FTP to recognizes profitability and opportunity costs of divisions as well as use it for overseas tax breaks.* Side note: Politically speaking, people who know how this works are pissed off about it in the U.S. (don't worry though, most politicians on both sides don't have a clue). We have high corporate tax rates relative to other countries and IRS loopholes allow this kind of thing (lobbying $$). It's also why, economically, you can't just raise *corporate* tax rates to increase domestic tax reciepts as more companies will just implement this process (it's complicated to do properly). Also, please don't say 50 years ago tax rates were higher and raising taxes increased receipts. The fact is most companies couldn't even FATHOM doing this 50 years ago, no less even 20. edit: some clarification in wording\"", "title": "" }, { "docid": "6f5601bc847b9b759754505aebe97c44", "text": "Unfortunately I believe there is not a good answer to this because it's not a well posed problem. It sounds like you are looking for a theoretically sound criteria to decide whether to sell or hold. Such a criteria would take the form of calculating the cost of continuing to hold a stock and comparing it to the transactions cost of replacing it in your portfolio. However, your criteria for stock selection doesn't take this form. You appear to have some ad hoc rules defining whether you want the stock in your portfolio that provide no way to calculate a cost of having something in your portfolio you don't want or failing to have something you do want. Criteria for optimally rebalancing a portfolio can't really be more quantitative than the rules that define the portfolio.", "title": "" }, { "docid": "0f370aa2f8d02c5bc57fa70e5c2c3de8", "text": "This article may be a good place to start [Introduction to Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability](http://www.ftpress.com/articles/article.aspx?p=1569334) It gives a brief overview of three pricing strategies, cost plus, competition based pricing and consumer based pricing. Edit -This may also be helpful [Social Science Research Network](http://www.ssrn.com/en/)", "title": "" }, { "docid": "d7bb1920277a6e3077f9af827c5ce15d", "text": "One explanation is that movie patrons are considering their total willingness to pay for the movie experience so that if the ticket price plus the market price of popcorn is less than their willingness to pay (WTP), the theater has an opportunity to extract more consumer surplus by charging higher than market prices for the popcorn (that is, price discrimination). There is a working paper on the subject by Gill and Hartmann (2008), the abstract of which reads: Prices for goods such as blades for razors, ink for printers and concessions at movies are often set well above cost. Theory has shown that this could yield a profitable price discrimination strategy often termed “metering.” The idea is that a customer’s intensity of demand for aftermarket goods (e.g. the concessions) provides a meter of how much the customer is willing to pay for the primary good (e.g. admission). If this correlation in tastes for the two goods is positive, a high price on the aftermarket good allows firms to extract a greater total price (admissions plus concessions) from higher type customers. This paper develops a simple aggregate model of discrete-continuous demand to motivate how this correlation can be tested using simple regression techniques and readily available firm data. Model simulations illustrate that the regressions can be used to predict whether aftermarket prices should be above, below or equal to their marginal cost. We then apply the approach to box-office and concession data from a chain of Spanish theaters and find that high priced concessions do extract more surplus from customers with a greater willingness to pay for the admission ticket. Locay and Rodriquez (1992) make a similar argument in a JPE article. They essentially argue that purchases of things like movie tickets are made by groups; once individuals are constrained by the group's choice, the firm has additional market power: We present models in which price discrimination in the context of a two-part price can occur in some competitive markets. Purchases take place in groups, which choose which firms to patronize. While firms are perfectly competitive with respect to groups, they have some market power over individual consumers, who are constrained by their groups' choices. We find that firms will charge an entry fee that is below marginal cost, and the second part of the price is marked up above marginal cost. The markup not only is positive but increases with the quality of the product. The quote you are looking for is similar, and again attributes the discrepancy to price discrimination. From the Armchair Economist (p. 159): The purpose of expensive popcorn is not to extract a lot of money from customers. That purpose would be better served by cheap popcorn and expensive movie tickets. Instead, the purpose of expensive popcorn is to extract different sums from different customers. Popcorn lovers, who have more fun at the movies, pay more for their additional pleasure. That is, some people like popcorn more than others. The latter idea is that the movie experience for popcorn lovers is worth more than the sum of its parts: that a movie ticket + popcorn is worth more than either of them separately for some people.", "title": "" }, { "docid": "f469aad776f005ed531a025b282f05ad", "text": "This is great! I'm not a CPA, but work in finance. As such, my course/professional work is focused more on the economic and profitability aspects of transfer pricing. As you might imagine, it tended to analyze corporate strategy decisions under various cost allocation models, which you thoroughly discuss. I would agree with the statement that it is based on the matching principle but would like to add that transfer pricing is interesting as it falls under several fields: accounting, finance, and economics. Fundamentally it is based on the matching principal, but it's real world applications are based on all three (it's often used to determine divisional and even individual sales peoples profitability; as is the case with bank related funds transfer pricing on stuff like time deposits). In this case, the correct accounting principal allows you to, when done properly, better understand the economics, strategy, and operations of an organization. In effect, when done correctly, it provides transparency for strategic decision making to executives. As I said, since my coursework tended to focus more on that aspect, I definitely have a natural tendency towards it. This is an amazing explanation (esp. about interest on M&A bridge loans, I get that) of the more detailed stuff! Truthfully, I'm not as familiar with it and was just trying to show more of the conceptual than nitty-gritty. Thanks for the reply!", "title": "" }, { "docid": "a89681bcffbf1b48ff39c8843adcd375", "text": "\"I think \"\"Psychological Pricing\"\" is a similar phenomenon to what you are looking for. This is where retailers use certain numbers in prices because those prices are more appealing to consumers. Since stocks - and in your case bitcoin - have prices, they too will be more or less appealing at different prices based on psychology alone.\"", "title": "" }, { "docid": "294f7578f55527d349d6950e9be9755b", "text": "This is a wonderful comprehensive answer as it relates to transferring goods, and evaluating profitability. I would like to add to your post and comment about a few other costs that are transferred. First though, I disagree with your comment about transfer pricing being about opportunity cost. I think transfer pricing is first and primarily about the matching principal. Properly matching expenses incurred to the revenues generated from those expenditures, or in the case of period expenses, to those entities that received a benefit in the proper period. I don't work in tax, so I'm by no means an expert in this subject, but I am a CPA and I feel I have a solid understanding of the subject. Some additional items going through TP might be: interest, shared corporate services, the amortization of intellectual property, technology fees, and depreciation charges. This is not a comprehensive list, and please don't take it as such. None of these need apply to every company, and certain industries and even individual companies will have exceptions. For example, for various reasons, a multi-national conglomerate may choose to maintain separate treasury functions for it's vastly different businesses, so you may not see much interest TP. Interest is pretty straight forward, and is the interest a company is paying on a debt. Not all interest is transferable, but a classic example might be borrowed funds used for an acquisition. The interest cost associated with that should be transferred in part back to the original entity. Short term borrowing costs used for operating capital is another classic example. Shared corporate services are centralized functions like a legal department, accounting department, executive offices, and the like. This can also be an IT department or in the instance of an international website (maybe google), an operations team monitoring the server loads and up-times. IP could just be patents that have definite lives that a number of businesses are benefiting from. IP is a bit of a mess to get into for various reasons and I'm trying to stay focused in this post. Some reasons for complexity include: the valuation, life of the asset, benefit of use, is the entity even really using it?, etc. I would imagine this is where companies get away with A LOT. Technology fees can be software licenses (Windows ain't free). Depreciation can be capitalized proprietary software. I'm running out of gas and wanted to comment about OP's question. I don't think SLA's and Internal billing services are a matter of directly increasing efficiency, more a matter of not creating inefficiencies. Going anecdotal, anywhere I've worked, the best person to do the job has been whoever's closest to the work. It wouldn't make much sense to me to have accounting gather up internal support during the VERY time sensitive month-end close for something like one division's trade magazine that another division placed an ad in. On the other hand, I think the allocation of copy expenses on an activity basis is an absolute waste of time. It all depends on the specific transaction in question. Great post bctich. Don't mean to detract, just looking to help others understand.", "title": "" }, { "docid": "821da59733550eeaca2635e9099f1e30", "text": "Setting a precedence with demands at the beginning should not be undervalued. Agreed that you emphasize long term value but establishing your requests ( not in demand form) also plays into your long term value because it is retribution to what you offer.", "title": "" }, { "docid": "e67feb54e0801a51758bca20bb4bbec4", "text": "I implemented this in MatLab about 10 years back. You just calculate your conditional variance of the required assets (x_i), use matrix multiplication on the correlation matrix (rho_i_j) from the same asset (this could be a point of research but unless you are using extreme conditions on the VaR it makes little difference) then apply a standard Markiowitz optimisation approach. You can then just use simple Sharpe ratio (marginal return over conditional risk) at every point on the efficient frontier. Then choose the maximum Sharpe ratio point.", "title": "" } ]	fiqa
b9b2e7a9fa3ff8ccb48b02aaed000d1d	Where can I borrow money for investing?	[ { "docid": "77d204a01aa381794682d8311a8a933d", "text": "\"Borrowing to invest is almost always a bad idea. You'd have to take out an unsecured loan, which has a higher interest rate, or a secured loan and put at risk whatever you are securing the loan with. You need some means to make payments on the loan, or if interest is being added to the balance then take the compounding effect into account with regards to the cost of the money and how much you will really end up owning. In order to come out ahead you need to 'invest' in something that will yield a return that is higher than the cost of borrowing the money, such high yields always come with higher risk, meaning that you will actually GET that return is less and less of a sure thing.. so now you are talking about the 'chance' to make money, Or a chance your 'investment' could fail, perhaps badly. Meaning you could well do nothing but end up in debt with little to nothing to show for it. If someone claims to have a 'sure thing' and is encouraging you to borrow money to invest in it, I'd be checking their back for a fin and remembering the lyrics \"\"when the shark bites ... scarlet billows start to spread\"\"\"", "title": "" }, { "docid": "10afd6fe8226baff7b7f9efcdb68932b", "text": "\"The question should read: \"\"Borrow huge money for speculating\"\". This is a bad idea on many levels. The lowest rates available will be from time-limited credit card offers, followed by broker margin accounts. Personal loans are going to be higher. My advice: if you insist on throwing your money away, go to Vegas with $40k. At least you'll get some complimentary food and drink.\"", "title": "" }, { "docid": "bb1cf8423107a911bd071f131354e0dc", "text": "If you are looking for money to speculate in the capital markets, then your brokers will already lend to you at a MUCH more favorable rate than an outside party will. For instance, with $4,000 you could EASILY control $40,000 with many brokers, at a 1% interest rate. This is 10:1 leverage, much like how US banks operate... every dollar that you deposit with them, they speculate with 10x as much. Interactive Brokers will do this for you with your current credit score. They are very reputable and clear through Goldman Sachs, so although reputable is subjective in the investment banking world, you won't have to worry the federal government raiding them or anything. If you are investing in currencies than you can easily do 50:1 leverage as an American, or 100:1 as anyone else. This means with only $400 dollars you can control $40,000 account. If you are investing in the futures market, then there are many many ways to double and triple and quadruple your leverage at the lowest interests rates. Any contract you enter into is a loan from the market. You have to understand, that if you did happen to have $40,000 of your own money, then you could get $4,000,000 account size for speculating, at 1% interest. Again, these are QUICK ways to lose your money and owe a lot more! So I'd really advise against it. A margin call in the futures market can destroy you. I advise you to just think more efficiently until you come up with a way to earn that much money initially, and then speculate.", "title": "" }, { "docid": "95441942b8b50cf2a06698c919810714", "text": "Borrow money and start a business. Follow your business plan and invest in yourself and your entrepreneurship. If you mean invest in the market, do not borrow money. In your plan, you are willing to make payments right? There are lots of things you can do better, but borrowing money to invest in the market for a couple of years is not one of them. Investing is boring, saving is boring, and planning your financial future is boring. It takes a consistent effort and you aren't going to get rich quick.", "title": "" }, { "docid": "d5ed743c1075f892510f4690414f56a4", "text": "Have you considered social lending (for example: Lending Club)?", "title": "" } ]	[ { "docid": "4d0d12071d5a8b1fab1af788a39a6c31", "text": "No. Borrowing is not allowed, but if you take a withdrawal, you have 60 days to deposit into another IRA account. This effectively creates a 60 day loan. Not what you're really looking for. If you take this withdrawal and re-deposit to new account within 60 days, no problem. If not, you owe tax on the untaxed amount as well as a 10% penalty. This comes from IRS' Publication 590, I have the document memorized by substance, not page number.", "title": "" }, { "docid": "6470741c89540d9d5adea1af37740f9b", "text": "\"I don't follow the numbers in your example, but the fundamental question you're asking is, \"\"If I can borrow money for a low cost, and if I think I can invest it and receive returns greater than that cost, should I do it?\"\" It doesn't matter where that money comes from, a mortgage that's bigger than it needs to be, a credit card teaser rate, or a margin line from your stock broker. The answer is \"\"maybe\"\" - depending on the certainty you have about the returns you'd receive on your investments and your tolerance for risk. Only you can answer that question for yourself. If you make less than your mortgage rates on the investments, you'll wish you hadn't! As an aside, I don't know anything about Belgian tax law, but in US tax law, your deductions can be limited to the actual value of the home. Your law may be similar and thus increase the effective mortgage interest rate.\"", "title": "" }, { "docid": "a6538981686b2af921afea0fb21d7b9c", "text": "\"Fool's 13 steps to invest is a good starting point. Specifically, IFF all your credit cards are paid, and you made sure you've got no outstanding liabilities (that also accrues interest), stock indexes might be a good place for 5-10 years timeframes. For grad school, I'd probably look into cash ISA (or local equivalent thereof) -the rate of return is going to be lower, but having it in a separate account at least makes it mentally \"\"out of sight - out of mind\"\", so you can make sure the money's there WHEN you need it.\"", "title": "" }, { "docid": "0f61c2688a2b82bdbad6909bab943faf", "text": "\"Yes, definitely. Many municipalities and local governments issue bonds to fund various projects (schools, hospitals, infrastructure, etc). You can buy these bonds and in that way invest in these things. In the US these kinds of bonds are tax-free, i.e.: the income they provide is not taxed (by the US government, may be taxed by your State, check local tax laws). There are also dedicated mutual funds that that is all they invest in, if you don't want to deal with picking individual bonds. As to mom-and-pop stores - that would not be as easy, as mom-and-pop stores are by definition family owned and you can invest in them only if you are personally acquainted with them. Instead, you can invest in small regional/local chains, that while not being mom-and-pop, still small enough to be considered \"\"local\"\", but are publicly traded so that you can easily invest in them. You'll have to look for these. You can also use social lending platforms, like Lending Club, which I reviewed on my blog, or others, where you can participate in a lending pool to other people. You can invest in a credit union by opening an account there. Credit unions are owned by their account holders.\"", "title": "" }, { "docid": "b117ffc4be3b40ef6e57f576be646797", "text": "\"It may seem like you cannot live without this trip, but borrowing money is a bad habit to get into. Especially for things like vacations. Your best bet is to save up money and only ever pay cash for things that will decrease in value. Please note that while it is a bad idea to borrow money for things that decrease in value, the \"\"opposite\"\" is not necessarily true. That is, it is not necessarily a good idea to borrow money for things that will increase in value; or, will earn you income. False assumptions can cloud our judgement. The housing bubble and the stock market crash of 1929 are two examples, but there are many others.\"", "title": "" }, { "docid": "ecd8bd38a8923493a989fd91c8d71b8e", "text": "In the U.S. it is typical that a stock brokerage account can be set up to buy stock with up to half the cost being borrowed from the broker. This is called a margin account. The stock purchased must remain in the account until sold (or the loan is paid off), as it serves as built-in collateral for the loan. If the market price for the stock goes down too much, you will be required to add money, or the stock will be sold to cover the loan. See this question for some more information.", "title": "" }, { "docid": "20ed40524961487a130ef6c674b35799", "text": "US Treasury securities are the safest investment. You can buy short term by buying T-Bills. You buy T-bills at a discount to face. For example, to buy a four week T-bill the treasury will take $99.98 out of your account. In four weeks the treasury will deposit $100 into your account. The $0.02 difference is your Intrest on the loan. Compounded over a year (13 four week periods) you get a 0.24% interest. But (presumably) more importantly (to you) you get your original $99.98 back. Your government cannot nationalize money that you have on loan to the United States Government. Edit : oops, I dropped a decimal position in my original calculation of compounded rate of interest. It is now corrected.", "title": "" }, { "docid": "a6a908e79622930b75bd84c3ed3768c8", "text": "Peer to peer lending such as Kiva, Lending Club, Funding Circle(small business), SoFi(student loans), Prosper, and various other services provide you with access to the 'basic form' of investing you described in your question. Other funds: You may find the documentary '97% Owned' fascinating as it provides an overview of the monetary system of England, with parallels to US, showing only 3% of money supply is used in exchange of goods and services, 97% is engaged in some form of speculation. If speculative activities are of concern, you may need to denounce many forms of currency. Lastly, be careful of taking the term addiction too lightly and deeming something unethical too quickly. You may be surprised to learn there are many people like yourself working at 'unethical' companies changing them within.", "title": "" }, { "docid": "6e7f88b56677a917045c41db97d6ced0", "text": "\"I'd suggest you start by looking at the mutual fund and/or ETF options available via your bank, and see if they have any low-cost funds that invest in high-risk sectors. You can increase your risk (and potential returns) by allocating your assets to riskier sectors rather than by picking individual stocks, and you'll be less likely to make an avoidable mistake. It is possible to do as you suggest and pick individual stocks, but by doing so you may be taking on more risk than you suspect, even unnecessary risk. For instance, if you decide to buy stock in Company A, you know you're taking a risk by investing in just one company. However, without a lot of work and financial expertise, you may not be able to assess how much risk you're taking by investing in Company A specifically, as opposed to Company B. Even if you know that investing in individual stocks is risky, it can be very hard to know how risky those particular individual stocks are, compared to other alternatives. This is doubly true if the investment involves actions more exotic than simply buying and holding an asset like a stock. For instance, you could definitely get plenty of risk by investing in commercial real estate development or complicated options contracts; but a certain amount of work and expertise is required to even understand how to do that, and there is a greater likelihood that you will slip up and make a costly mistake that negates any extra gain, even if the investment itself might have been sound for someone with experience in that area. In other words, you want your risk to really be the risk of the investment, not the \"\"personal\"\" risk that you'll make a mistake in a complicated scheme and lose money because you didn't know what you were doing. (If you do have some expertise in more exotic investments, then maybe you could go this route, but I think most people -- including me -- don't.) On the other hand, you can find mutual funds or ETFs that invest in large economic sectors that are high-risk, but because the investment is diversified within that sector, you need only compare the risk of the sectors. For instance, emerging markets are usually considered one of the highest-risk sectors. But if you restrict your choice to low-cost emerging-market index funds, they are unlikely to differ drastically in risk (at any rate, far less than individual companies). This eliminates the problem mentioned above: when you choose to invest in Emerging Markets Index Fund A, you don't need to worry as much about whether Emerging Markets Index Fund B might have been less risky; most of the risk is in the choice to invest in the emerging markets sector in the first place, and differences between comparable funds in that sector are small by comparison. You could do the same with other targeted sectors that can produce high returns; for instance, there are mutual funds and ETFs that invest specifically in technology stocks. So you could begin by exploring the mutual funds and ETFs available via your existing investment bank, or poke around on Morningstar. Fees will still matter no matter what sector you're in, so pay attention to those. But you can probably find a way to take an aggressive risk position without getting bogged down in the details of individual companies. Also, this will be less work than trying something more exotic, so you're less likely to make a costly mistake due to not understanding the complexities of what you're investing in.\"", "title": "" }, { "docid": "9ba51d2d9ec2c4cf2b1e53d4321ceaf5", "text": "\"Funds - especially index funds - are a safe way for beginning investors to get a diversified investment across a lot of the stock market. They are not the perfect investment, but they are better than the majority of mutual funds, and you do not spend a lot of money in fees. Compared to the alternative - buying individual stocks based on what a friend tells you or buying a \"\"hot\"\" mutual fund - it's a great choice for a lot of people. If you are willing to do some study, you can do better - quite a bit better - with common stocks. As an individual investor, you have some structural advantages; you can take significant (to you) positions in small-cap companies, while this is not practical for large institutional investors or mutual fund managers. However, you can also lose a lot of money quickly in individual stocks. It pays to go slow and to your homework, however, and make sure that you are investing, not speculating. I like fool.com as a good place to start, and subscribe to a couple of their newsletters. I will note that investing is not for the faint of heart; to do well, you may need to do the opposite of what everybody else is doing; buying when the market is down and selling when the market is high. A few people mentioned the efficient market hypothesis. There is ample evidence that the market is not efficient; the existence of the .com and mortgage bubbles makes it pretty obvious that the market is often not rationally valued, and a couple of hedge funds profited in the billions from this.\"", "title": "" }, { "docid": "c164f3698cace48ad15cbebf89a3c733", "text": "Nowhere. To back up a bit, mutual funds are the stock market (and the bond market). That is, when you invest in a mutual fund, your money is ultimately buying stocks on the open market. Some of it might be buying bonds. The exact mix of stocks and bonds depends on the mutual fund. But a mutual fund is just a basket of stocks and/or bonds (and/or other, more exotic investments). At 25, you probably should just be investing your Roth IRA in index stock mutual funds and index bond mutual funds. You probably shouldn't even be doing peer-to-peer lending (unless you're willing to think of any losses as the cost of a hobby); the higher interest rate you're getting is a reflection of the risk that your borrowers will default. I'm not even sure if peer-to-peer lending is allowed in Roth IRA's. Investing in just stocks, bonds, and cast is boring, but these are easy investments to understand. The harder the investment is to understand, the easier it is for it to be a scam (or just a bad investment). There's not necessarily anything wrong with boring.", "title": "" }, { "docid": "0917b869f6a039582d7eb14689bceea3", "text": "It's worth pointing out that a bulk of the bond market is institutional investors (read: large corporations and countries). For individuals, it's very easy to just put your cash in a checking account. Checking accounts are insured and non-volatile. But what happens when you're GE or Apple or Panama? You can't just flop a couple billion dollars in to a Chase checking account and call it a day. Although, you still need a safe place to store money that won't be terribly volatile. GE can buy a billion dollars of treasury bonds. Many companies need tremendous amounts of collateral on hand, amounts far in excess of the capacity of a checking account; those funds are stored in treasuries of some sort. Separately, a treasury bond is not a substitute investment for an S&P index fund. For individuals they are two totally different investments with totally different characteristics. The only reason an individual investor should compare the return of the S&P against the readily available yield of treasuries is to ensure the expected return of an equity investment can sufficiently pay for the additional risk.", "title": "" }, { "docid": "4e6b3c3d49316238ac8a589d1dd171d9", "text": "\"The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted. You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment? Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever. If you approached me with this \"\"investment\"\", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned: That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this? A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this? 2K? Why does money need to be borrowed for this? This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult. So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.\"", "title": "" }, { "docid": "4bf7100c7874c779c10be1ad9e90e119", "text": "\"Theory of Levered Investing Borrowing in order to increase investment exposure is a time-honored and legitimate activity. It's the optimal way to increase your exposure, according to finance theory (which assumes you get a good interest rate...more on this later). In your case it may or may not be a good idea. Based on the information in your post, I believe that in your case it is not a good idea. Consider the following concerns. Risk In finance, reward comes with risk and in no other way. Investing borrowed money means there is a good (not small) chance that you will lose enough money that you will need to pull significant wealth from your own savings in order to make up the difference. If you are in a position to do this and OK with that possibility, then proceed to to the next concern. If losing a lot of money means financial calamity for you, then this is a bad idea. You haven't described your financial situation so I don't know in which camp you fall. If the idea of losing, say, $100K means complete financial failure for you, then the strategy you have described simply has too much risk. Make no mistake, just because the market makes money on average does not mean it will make money, or as much money as you expect, over your horizon. It may lose money, perhaps a lot of money. Make sure this idea is very clear in your mind before taking action. Rewards Your post implies that you think you can reliably get 10%-12% on an investment. This is not the case. There are many years in which a reasonable portfolio makes this much or more, but on average you will earn less. No ones knows the true long-term market risk premium, but it is definitely less than 10%. A better guess would be 6.5% plus whatever the risk-free rate is (currently about 0%). Buying \"\"riskier\"\" investments means deviating from the optimal portfolio, meaning you took on more risk than is justified by how much extra money you expect to make. I never encourage people to invest based on optimistic or unrealistic goals. If anything, you should be conservative about how you expect things to go. And remember, these are averages. Any portfolio that earns 10%-12% also has a very good chance of losing 25% or more. People who sell or give advice on investments frequently get you charged up by pointing at times and investments that have done very well. Unfortunately, we never know whether the investments and time period in which we are investing will be a good one, a bad one, or an unexciting one. The reality of investing is...well, more realistic than what you have described. Costs I can't imagine how you could borrow that much money and only have an annual payment of $2000 as you imply--that must be a mistake. No individual borrows at a rate significantly below 1%. It sounds like it's not a collateralized loan of any kind, so unless you are some kind of prime-loan customer, your interest rate will be significant. Subtract whatever rate you actually pay from 6.5% to get a rough idea of how much you will make if things go as well as they do on average. You will pay the interest whether times are good or bad. If your rate is typical of noncollateralized personal loans, there's a good chance you will lose money on average using the strategy you have described. If you are OK with taking risk with a negative expected return, consider a trip to Las Vegas. It's more exciting. Ethics I'm not one to make people feel guilty for doing things that are legal but of questionable morality. If that's the case and you are OK with it, more power to you. I'm not sure under what pretense you expect to obtain the money, but it sounds like you might be crossing legal lines and committing actual crimes (like fraud). Make sure to check on whether what you intend is a white lie or something that can get you thrown in prison. For example, if you are proposing obtaining a subsidized education loan and using it for speculation, I could easily see you spending serious time in prison and permanently ruining your life, even if your plan works out. A judge and 12 of your peers are not going to think welfare fraud is a harmless twist of the truth. Summary I've said a lot of negative things here. This is because I have to guess about your financial situation and it sounds like you may have unrealistic expectations of the safety and generosity of investing. Quite frankly, people for whom borrowing $250K is no big deal don't normally come and ask about it on StackExchange and they definitely don't tend to lie in order to get loans. Also $18K a year doesn't change their quality of life. However, I don't know. If $250K is small relative to your wealth and you need a good way to increase your exposure to the market risk premium, then borrowing and investing may well be a good idea.\"", "title": "" }, { "docid": "8082d5dbe8ace4746ececb5fbe53dea7", "text": "Unfortunately the answer is, almost none. Almost everything has a risk of decreasing; but given your short time horizon and presumably given that you want back your principal in full, plus a little bit, you have few choices. (Some of the following may be Canadian specific terms, but hopefully they are generic enough to apply) Savings accounts, money-market funds and the like should be available at any bank. Interest won't pay you much right now, but the money should be safe (I presume Israel has some kind of deposit insurance for normal bank accounts?) Slightly more risky would be a short-to-maturity bond or stripped bond coupon. The entry amount of money for one of these may be more than you have on hand, or the setup fee for an investment account might be more than you want to bother with for a one-off investment. Given that you seem to indicate that you might need access to the money during the time-frame in question, the bank-account option seems to be the only one really available.", "title": "" } ]	fiqa
5c351c4d77761a0c99ec477c69e50156	Why can't 401(k) statements be delivered electronically?	[ { "docid": "286f3c2c2f1e29bc738069cc7684932a", "text": "\"There are a lot of unintended consequences of fairly arbitrary IRS guidelines when it comes to 401Ks, they both close and create tons of loopholes and many companies are left to implement their own policy around these laws. Ultimately what you are left with are a lot of random things, interpreted differently by every single company in the country, that aren't directly codified by the IRS or Congress. If you have a choice regarding what brokerage firm manages your 401(k), then just call around. Be sure to ask the pencil pusher on the phone to double check because they might say \"\"OF COURSE you can get paperless statements it is 2015\"\" but then when you sign up it becomes \"\"ooohhh sorry due to recent guidelines this kind of account isn't eligible for paperless statements\"\"\"", "title": "" }, { "docid": "e20ac0d3405216c3a1019c91e4fbfbf0", "text": "\"Glad my question got bumped. I took it as a sign to get a solid answer out of Schwab. First the rep gave me the same line that it was impossible to provide paperless statements for a 401(k) plan because of \"\"regulations\"\". I pressed the issue and got this from the rep: I just spoke with our dedicated small business plan team. They told me that there are regulations that state that a Qualified Plan, such as this, require to have a statement sent. It is a Schwab policy that we have decided to only allow paper statements for this account type. So to clarify, it is a Schwab business decision to have the statements available only by mail. Hope someone from Schwab with some authority sees this post and is pushed toward helping change their policy. I can't imagine what a colossal waste of paper, postage, and hassle it is for everyone involved.\"", "title": "" } ]	[ { "docid": "da87ad09f8ea417326955b272c8086e8", "text": "\"To answer, I'm going to make a few assumptions. First, the ideal scenario for a pre-tax 401(k) is the deposit goes in at a 25% tax rate (i.e. the employee is in that bracket) but withdrawn at 15%. This may be true for many, but not all. It's to illustrate a point. The SPY (S&P 500 index ETF) has a cost of .09% per year. If your 401(k) fees are anywhere near 1% per year total, over 10 years you've paid nearly 10% in fees, vs less than 1% for the ETF. Above, I suggest the ideal is that the 401(k) saves you 10% on your taxes, but if you pay 10% over the decade, the benefit is completely negated. I can add to the above that funds outside the retirement accounts give off dividends which are tax favored, and if you were to sell ETFs held over a year, they receive favorable cap-gains rates. The \"\"deposit to get the matching funds\"\" should always be good advice, it would take many years of high fees to destroy that. But even that seemingly reasonable 1% fee can make any other deposits a bad approach. Keep in mind, when retired you will have a zero bracket (in 2011, the combined standard deduction and exemption) adding to $9500, as well as a 10% bracket (the next $8500), so having some pretax money to take advantage of those brackets will help. Last, the average person changes jobs now and then. The ability to transfer the funds from the (bad) 401(k) to an IRA where you can control the investments is an option I'd not ignore in the analysis. I arbitrarily picked 1% to illustrate my thoughts. The same math will show a long time employee will get hurt by even .5%/yr if enough time passes. What are the fees in your 401(k)? Edit - Study of 401(k) fees - put out by the Dept of Labor. Unfortunately, it's over 10 years old, but it speaks to my point. Back then, even a 2000 participant plan with $60M in assets had 110 basis points (this is 1.1%) in fees on average. Whatever the distribution is, those above this average shouldn't even participate in their plans (except for matching) and those on the other side should look at their expenses. As Radix07 points out below, yes, for those just shy of retirement, the fee has less impact, and of course, they have a better idea if they will retire in a lower bracket. Those who have some catching up to do, may benefit despite the fees.\"", "title": "" }, { "docid": "47534fd1bf4464af31de30979d1441d3", "text": "\"The \"\"must be postmarked\"\" language might be just from the old bank itself, not from the IRS. The language I see in Publication 969 only says \"\"You can make contributions to your HSA for 2014 until April 15, 2015.\"\" In this case, it is understandable that the credit union you have the new account with does not want to accept the contribution for tax year 2014. You didn't have an account with them in 2014. You didn't even send out the paperwork to them to open the account until last week, and they didn't open your account until this week, after the deadline. It is unfortunate, but I don't think you'll be able to force them to do anything differently here. It is just too late. I do know how that feels. I had a somewhat similar circumstance with my HSA, the first year I had the account. I contributed money to the HSA using my credit union's website, transferring money from my checking account into my HSA, as I was told to do. In January and February of the following year, I made more contributions this way, thinking that I was making them for the previous tax year. However, they never got coded correctly by the credit union, and I later found out that the credit union counted those as contributions for the current year. As a result, I was essentially denied the full contribution limit for that year, and had a bit of a paperwork nightmare. Now, if I have to make a prior year contribution, I only make it in person, and they have a form they have me fill out each time I do.\"", "title": "" }, { "docid": "3310ca6438c55b037eeda66f77b51d14", "text": "\"It becomes \"\"yours\"\" when it leaves the trust. Until that point the Trust owns the shares attributable to your account. There are some different arrangements out there, in the cases of some of the smaller 401(k) providers, where the assets are held in annuity products, or even individual annuities in the case of 403(b) plans. To further answer the question, the trust and trustee own and hold the account before you take a distribution. In a lot of cases the 401(k) recordkeeper has a trust company that they use to serve as the custodian (person or entity who retains the assets). In some plans you have an individual Trustee or a Corporate Trustee. Those setups are not good for that person or company because they are ultimately responsible for backing the assets in the plan, and as you can imagine, leaving that responsibility to one person is not safe for that individual. Hope that helps, glad to answer any other questions you have!\"", "title": "" }, { "docid": "034e29cd4e755643f5e95ac6daae8337", "text": "I got notice from Charles Schwab that the forms weren't being mailed out until the middle of February because, for some reason, the forms were likely to change and rather than mail them out twice, they mailed them out once. Perhaps some state tax laws took effect (such as two Oregon bills regarding tax rates for higher incomes) and they waited on that. While I haven't gotten my forms mailed to me yet, I did go online and get the electronic copies that allowed me to finish my taxes already.", "title": "" }, { "docid": "5dbb47ed381e77ebd0388498fc1456ac", "text": "For this rollover, there are no restrictions of age/income/etc. You need to know - the transfer must be direct, i.e. if you get a physical check, it should be payable not to you, but to the new custodian (broker) for your benefit. Direct is preferable and faster. The assets may not be transferable 'in kind.' This phrase simply means that you may move the value, but if the assets are not shares that are held by the public, but special 401(k) class shares, they must be liquidated before moving, and moved as cash. This is a risk people with large accounts take should the market move dramatically during the time they are liquidated, and why, for them, I suggest doing it piecemeal.", "title": "" }, { "docid": "95dc6c3cf5a52f93fcd1b3e9d148ab64", "text": "\"You mean \"\"I don't understand why someone would sign a contract expecting the employer to observe it\"\"? Pensions are contractual obligations. It's only the massive mismanagement, lack of fiscal responsibility, and evisceration of employee bargaining power that puts us in a position to think that employers wouldn't observe their contractual obligations. I mean, if this were the mortgage market, you would be arguing to banks \"\"What the hell made you think this homeowner would keep paying you 6% interest on this money when you're not providing any kind of value twenty years later?\"\"\"", "title": "" }, { "docid": "490bb8b4274d1c87b42ffd73851a06fd", "text": "\"This article fails to explain that paper gold doesn't \"\"necessarily\"\" guarantee the owner to physical gold. An index fund tracking the price of gold per ounce guarantees the owner the market value of gold at the termination of the contract. This keeps markets liquid, and allows investors to diversify into precious metals without the inconvenience of storage and delivery fees. As long as we are using currency that can be exchanged for gold this shouldn't pose a problem. If we move to a post currency world of barter and trade, you're better invested in weapons and ammunition.\"", "title": "" }, { "docid": "290c7fe6754d823f4f4597f866625b86", "text": "It is typically very easy to roll a 401(k) into an IRA. Companies that provide IRA's are very experienced with it, and I would expect that they will take your calls from overseas. You will likely be able to do it over the internet without using a phone at all. Just open an IRA with any brokerage company (Scottrade, Vanguard, Fidelity, Schwab, Ameritrade, etc.) and follow instructions to roll your 401(k) into it. Most likely they will need your signature, but usually a scan of a form you have filled out will do. Be sure to have information on your 401(k) provider, including your account number there, on hand. These companies are all very reputable and this is not a difficult transaction. There's really no downside to rolling into an IRA. 401(k) plans usually have more limited options and/or worse fee structures and are frequently harder to work with, as you have observed.", "title": "" }, { "docid": "7b4a6de4abd5979bec69ee4ab7328788", "text": "The 401(k) contribution is Federal tax free, when you make the contribution, and most likely State too. I believe that is true for California, specifically. There was a court case some years ago about people making 401(k) or IRA contributions in New York, avoiding the New York state income tax. Then they moved to Florida (no income tax), and took the money out. New York sued, saying they had to pay the New York income tax that had been deferred, but the court said no. So you should be able to avoid California state income tax, and then later if you were to move to, for example, Texas (no income tax), have no state income tax liability. At the Federal level, you will have different problems. You won't have the money; it will be held by the 401(k) trustee. When you try to access the money (cash the account out), you will have to pay the deferred taxes. Effectively, when you remove the money it becomes income in the year it is removed. You can take the money out at any time, but if you are less than 59 1/2 at the time that you take it, there is a 10% penalty. The agreement is that the Feds let you defer paying the tax because it is going to finance your retirement, and they will tax it later. If you take it out before 59 1/2, they figure you are not retired yet, and are breaking your part of the agreement. Of course you can generally leave the money in the 401(k) plan with your old employer and let it grow until you are 59.5, or roll it over into another 401(k) with a new employer (if they let you), or into an IRA. But if you have returned to your own country, having an account in the U.S. would introduce both investment risk and currency risk. If you are in another country when you want the money, the question would be where your U.S. residence would be. If you live in California, then go to, say France, your U.S. residence would still be California, and you would still owe California income tax. If you move from California to Texas and then to France, your U.S. residence would be Texas. This is pretty vague, as you might have heard in the Rahm Emanual case -- was he a resident of Chicago or Washington, D.C.? Same problem with Howard Hughes who was born in Texas, but then spent most his life in California, then to Nevada, then to Nicaragua, and the Bahamas. When he died Texas, California and Nevada all claimed him as a resident, for estate taxes. The important thing is to be able to make a reasonable case that you are a resident of where ever you want to be -- driver's license, mailing address, living quarters, and so on.", "title": "" }, { "docid": "3fdb07dc08015b2b1f9f1c3c89777d96", "text": "\"The simplest answer to why you can't see it in your online statement is a design/business decision that was made, most probably originally to make online statements differ as little as possible from old fashioned monthly printed statements; the old printed statements never showed holds either. Some banks and card services actually do show these transactions online, but in my experience these are the rare exceptions - though with business/commercial accounts I saw this more, but it was still rare. This is also partly due to banks fearing lots of annoying phone calls from customers and problems with merchants, as people react to \"\"hey, renting that car didn't cost $500!\"\" and don't realize that the hold is often higher than the transaction amount and will be justified in a few days (or weeks...), etc - so please don't dispute the charges just yet. Behind the scenes, I've had bankers explain it to me thusly (the practice has bitten me before and it bothered me a lot, so I've talked to quite a few bankers about this): There are two kinds of holds: \"\"soft holds\"\" and \"\"hard holds\"\". In a soft hold, a merchant basically asks the bank, \"\"Hey, is there at least $75 in this account?\"\" The bank responds, and then has it's own individually set policy per account type as to how to treat that hold. Sometimes they reserve no money whatsoever - you are free to spend that money right out and rack up NSF fees to your heart's content. Yet some policies are to treat this identically to a hard hold and keep the money locked down until released. The hard hold is treated very much like an actual expenditure transaction, in that the money is locked and shown as no longer available to you. This varies by bank - some banks use an \"\"Account Balance\"\" and an \"\"Available Balance\"\", and some have done away with these dual terms and leave it up to you to determine what your balance is and what's \"\"available\"\" (or you have to call them). The key difference in the hard hold and a real expenditure is, technically, the money is still in your bank account; your bank has merely \"\"reserved\"\" it, earmarking it for a specific purchase (and gently promising the merchant they can have their money later), but the biggest difference is there is a time-limit. If a merchant does not process a completion to the transaction to claim the money, your bank will lift the hold after a period of time (I've seen 7-30 days as typical in the US, again varying by institution) returning your money to your balance that is available for purchasing and withdrawal. In every case, any vaguely decent banking institution allows you to call them, speak to some bank employee, and they can look up your account and inform you about the different sort of holds that are on your account that are not pending/completed purchase transactions. From a strictly cynical (perhaps rightly jaded) point of view, yes this is also used as a method to extort absurdly high fees especially from customers who keep a low balance in their account. I have had more than one bank charge NSF fees based on available balances that were due to holds made by gas pumps, for instance, even though my actual \"\"money in my account\"\" never went below $0 (the holds were for amounts larger than the actual transaction). And yes, the banks usually would waive those fees if you bothered to get someone on the phone or in person and made yourself a nuisance to the right person for long enough, but they made you work for it. But I digress.... The reality is that there are lots of back and forth and middle-men in transactions like this, and most banks try to hide as much of this from you the client as possible, partly because its a huge confusing hassle and its part of why you are paying a bank to handle this nonsense for you to start with. And, as with all institutions, rules and policies become easily adjusted to maximize revenues, and if you don't keep sizable liquid minimum balances (100% of the time, all year long) they target you for fees. To avoid this without having fat wads of extra cash in those accounts, is use an entirely disconnected credit card for reservations ONLY - especially when you are traveling and will be making rentals and booking hotels. Just tell them you wish to pay with a different card when you are done, and most merchants can do this without hassle. Since it's a credit card with monthly billing you can often end up with no balance, no waiting around for a month for payments to clear, and no bank fees! It isn't 100%, but now I never - if I can possibly avoid it - use my debit/bank card to \"\"reserve\"\" or \"\"rent\"\" anything, ever.\"", "title": "" }, { "docid": "d4f82f6c6877348cee75b199a41339f1", "text": "\"Is it really all that much for me to ask that exchanges not be complicit in my 401k being front-run? I really don't get how you can argue it's a good thing. I guess I should instead be mad at the my 401k management firm for not dragging their own private fiber networks and allowing my 401k to get shaved by \"\"smarter\"\" traders that do. You're ridiculous.\"", "title": "" }, { "docid": "c13247d22b07329cfee1a80df0f5e770", "text": "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.", "title": "" }, { "docid": "fe3622b074be22e2f759e81ccf1b5611", "text": "\"For 401(k) and regular IRA, you pay income tax on withdrawals from the account. At a certain age, there is a \"\"required minimum distribution\"\". This is an amount you must withdraw from the account or you face penalties. I've also read about, but am not familiar with, mechanisms by which you can retire early and start taking withdrawals before the regular official retirement age. (These may or may not be legit, I didn't do any research on it.) A Roth IRA, which is not \"\"tax deferred\"\" and thus not technically covered by your question, there is no tax on withdrawals (assuming you are at retirement age) and no required minimum distribution. Something to watch out for on your accounts are fees that they charge for withdrawals. I was in a 401(k) once that had a $50 fee per-withdrawal. A monthly check from this account would eat your money! I paid the fee once, when I rolled it into an account at a brokerage after leaving the company.\"", "title": "" }, { "docid": "b8a45a3e2b81cc0f49f2d5dd2fa11139", "text": "Not really practical... The real problem is getting the money into a form where you can invest it in something. It's not like E\\Trade will let you FedEx them a briefcase of sequentially numbered hundreds and just credit your account, no questions asked. That is* the hard part.", "title": "" }, { "docid": "f55e29b5b419a1fa47ae9f6fc7d40bd7", "text": "Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash.", "title": "" } ]	fiqa
e8c68f7e79dcf94c463b70afbc0c8cf5	Why would you ever turn down a raise in salary?	[ { "docid": "e3c326b2ea3f1b5e375bbd90af5d2132", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"", "title": "" }, { "docid": "180368ebdb2fa642ae3f540d64e0e4d7", "text": "\"I probably wouldn't turn down a raise, but there are some circumstances in which you might hesitate. Having a disproportionately high salary for your type of role or the value you are providing to the company makes you an attractive layoff target in an economic downturn. I've heard anecdotally of lots of corporate lawyers getting laid off because they were getting raises every year, and ended up with such ridiculous salaries that when the economy went south, the company basically asked \"\"why are we paying these people so much?\"\" Same thing happens in lots of places - Circuit City lays off the experienced, highly-paid salespeople and brings in cheap-o high school students (that didn't work out well for them, but they did it anyway). Still, even knowing that, I'd accept the pay raise. You're making more money the whole time you're employed, and prior salary is the biggest predictor of the salary you can negotiate at a new position.\"", "title": "" }, { "docid": "b746fa726e1723cb28bd6ebb60a627b5", "text": "\"My answer has nothing to do with tax brackets or mathematics (I'm taking advantage of the leeway your question allowed), but rather it has to do with career goals and promotion. Large companies often have large \"\"Policies & Procedures\"\" booklets to go with them. One policy that sometimes exists which would make it a bad idea to accept a raise is: Employee cannot be given more than one salary increase in a 12-month period This means that if you accept a standard-of-living or merit increase of say, 2% or 3% in April, and then you apply for a job that would otherwise warrant a pay grade increase, you may be forced to wait until the following year to get bumped to the proper pay grade. Of course, this totally depends on the company, but it would be advisable to check your company's H.R. policy on that, if you're considering a move (even a lateral one) in the future.\"", "title": "" }, { "docid": "b434b7b7a2e750295a18e50334555552", "text": "If you have children in a university institution, then your annual salary is reported via financial aid forms. The small raise could be the difference between full tuition covered and only half tuition covered.", "title": "" }, { "docid": "79de53b2ca5cd475b5f1a203e519e4fe", "text": "I had a colleague turn down a raise once because he believed that female colleagues were already being paid well below his salary and it was unfair to further increase this gap. For very public figures raises are often declined as a form of leadership: showing that management is willing to forgo bonuses and salary increases as a form of solidarity with the employee population. Some leaders forgo a salary altogether (or take a $1/year salary).", "title": "" }, { "docid": "61c17946cf2d33967b718ffe3db500f1", "text": "I would turn down a 20% raise in salary without thinking, if they would offer that I can have a 4 day work week. I even take a 10% cut for this!", "title": "" }, { "docid": "e0eb8fd7848105c6f127549bf3f6cd33", "text": "Here in Germany there is a special case. I am studying (and working a little on the side) and still receiving child benefits from the state which is like 190€/m. Because I am getting this I don't have to pay tuition which is 1k/y. If my side income would get over the boundary (which is like 9k/y) I would lose those benefits (~3.3k) and would have to pay insurance myself (I dont know how much that would be. 50-100/m I guess.) So getting a raise from 8k to 10k sounds nice as it is a 25% raise, but it actually means getting less.", "title": "" }, { "docid": "71a8f1cfe2081d6b80639bcdb92833ae", "text": "I once turned down a raise because I didn't agree with the employee review that supposedly substantiated the raise. I felt the review to be superficial and incomplete. Then I refused to sign it, or take the accompanying raise, due to that fact.", "title": "" }, { "docid": "ef238d44f6ade1b18699e8e1f245592d", "text": "In the UK, recent changes to pension taxation mean that from April 2011, people earning between £150,000 and £180,000 total and making large pension contributions (>£50,000 or so) will pay a marginal tax rate on additional salary of >100%. This is because pension contributions normally attract tax relief at the highest marginal rate - i.e. 40% if the gross salary is above about £40,000, and 50% for salaries above £150,000. But after April 2011, the rate of relief will be tapered down for gross salaries above £150,000, reaching 20% for a gross salary of £180,000. So for example if you earn £175,000 and make a contribution of £50,000, then an additional £1,000 in salary will incur £500 of direct tax, and also lead to a 1% reduction in tax relief (from 25% to 24%), costing another £500. Once you factor in National Insurance of another 1% or so, the net effect of the pay rise is negative.", "title": "" }, { "docid": "153ac29de4630fcbcea28e9bbe3b1185", "text": "In the UK, the government has recently announced that Child Benefit will no longer be paid to those who earn over £44k. This means that if you currently earn £43,999, and your employer offers you a raise of £10 per annum to £44,009, then you could be over £1k worse off as a result.", "title": "" }, { "docid": "46b2a4930485c93547ff9ffe8c4a39c2", "text": "The only valid reason from a financial point of view is if the raise is a promotion or comes with conditions that are unacceptable to you. You may not want added supervisory responsibilties, for example. You need to use discretion when refusing advancement though, at places where I have worked, declining a raise or promotion is seen as a career killer for some circumstances.", "title": "" }, { "docid": "d5d66cfdc3c1cde6eaaec09ba802a21b", "text": "At least with US tax law where you only pay taxes at the higher rate for the income above the minimum for that tax bracket, you will always wind up ahead taking the raise if you are simply concerned with after tax (FICA) income. For example, assume you were making $8,350 (the top end of the 10% bracket in the US), and got a $100 raise, you would be taxed roughly as follows: After Tax Income Before Raise: $8,350 x (100% - 10%) After Tax Income After Raise: $8,350 x (100%-10%) + $100 x (100%-15%) You can easily see that the second number is always higher than the first as long as the raise is a positive amount (obviously).", "title": "" }, { "docid": "5b9afd809b19ea026a97e23618f37748", "text": "I recently was offered $1/hr raise. I turned it down because 1.)I had been looking for other jobs and the extra $150 per month wasn't enough money to keep me from exploring other options so it would look bad to take a raise and leave a month later. You never want to burn bridges. 2.) Raises aren't given out everyday. The business I work for is having financial troubles and the $1/hr was probably the best they could do at the time. If business picks up and they can afford to give me more money they won't do it because the record will show that I just got a raise. One good extra is that your boss will be flabergasted that you just turned down a raise and you may gain a lot of respect from your superiors. Don't confuse strategically turning down a raise and letting others sway your opinion because they don't wanna cough up the cash.", "title": "" }, { "docid": "51923f3d32c6455dafbdb60e7766dc59", "text": "Sometimes it's not entirely about take-home pay. A pay raise can affect other things like: These things need to be considered since they also affect quality of life.", "title": "" }, { "docid": "9f6526f89de81cff8e4019c891345375", "text": "There is currently a bill in Washington that will change the limit for salaried employees receiving overtime pay. It will be raised to $50400. I work 4 hours of overtime each week, which if the bill is passed, equates to an additional $7800 annually. If my company raises my salary to just above the limit then they would not have to pay the overtime. That would only be a raise of approx. $3000. Why would I want to take the raise, and still have to work the overtime, when I can choose to not take the raise and possibly not have to work it any longer. I would rather have the time off, but if I'm going to have to work it, then I'll take the more than double overtime pay.", "title": "" }, { "docid": "a2999b33798536f587211bf4346238fc", "text": "There are some student loan repayment programs and the like where, if a raise would bump you past a certain threshold, you become ineligible and are suddenly left holding the whole bag, or alternately the payoff for having your loans forgiven/repaid drops considerably. It can make financial sense to avoid crossing those thresholds.", "title": "" }, { "docid": "27e0430f759036c11f1f3a188d4dbd52", "text": "\"This would never apply for tax \"\"brackets\"\". It's not as though making an extra dollar will put you into an entire separate bracket, the IRS isn't that bad. They bump up the \"\"brackets\"\" every $50, so you will never turn down a raise because it would cause you to lose income. However if your raise would preclude you from contributing to your IRA because it pushes you over $110,000 then yes, you could turn it down or explain to your boss that it would need to be just a little bit higher to cover your IRA contribution loss.\"", "title": "" }, { "docid": "befd90c643c2f13546371eefe400dddc", "text": "\"One \"\"economic reason\"\" to turn down a raise is if your company gives bonuses based on performance reviews. When you get a raise in salary, your boss usually expects a better performance from you. That being said, if you get the raise, and your performance review is worse, you might get a smaller annual income.\"", "title": "" }, { "docid": "6469c3c29865963a8e5df4b2ddec26cc", "text": "\"In Australia there are cases for the argument. 1) We have laws against unfair dismissal that do not apply above certain thresholds. Your position is more secure with the lower salary. 2) Tax benefits for families are unfairly structured such that take home pay may actually be less, again due to a threshold. This tends to benefit charities as people need to shed the taxable income if a repayment of benefits would otherwise be triggered. 3) You do not want to \"\"just cross\"\" a tax bracket in a year where levies are being raised for natural disasters or budget shortfall. In this case a raise could be deferred ?\"", "title": "" }, { "docid": "4d031a7f86ad55631c6d625512021e17", "text": "It would make sense to refuse a raise when it pushes your effective marginal 'tax' (including reduced benefits) above 100%. The working poor (family of 4, 20K-40K in the US) often face marginal rates above 100% when you consider the phase out of various government benefits (EITC, insurance, housing,etc.) You can see the research here and here.", "title": "" }, { "docid": "36e4353c63bbbd0351696c2c0894910e", "text": "Jurisdictions will vary but I can imagine calculation methods for child support where the raise could become significant in the present with long future ramifications as well, even if the job is temporary or the parent wanted to step away from working full-time to attend school. The timing of the raise might coincide with disclosure of income to an ex-spouse or to the court related and it might be preferable to postpone the increase. Of course the court would probably frown on declining the raise for only these reasons. If it found out it might impute the higher income anyway. And I'm not suggesting that people dodge responsibility for their kids. We've all seen those cases where child support is not particularly equitable between the two parties and/or the kids do not necessarily benefit by the transfer of money. I wouldn't blame a parent for thoughtfully and unselfishly considering this type of second-order effect and consulting an attorney as with so many other financial implications of divorce. Regardless of personal moral objections it's certainly an answer to the question in technical terms that somebody somewhere has taken into account.", "title": "" }, { "docid": "d8727042c22aefe9e3adf5f21e60d2b2", "text": "I recently rejected an offer at a different firm that would have provided a 14k yearly increase. The reason for the rejection was because I would have had to give up two work from home days, my commute would have been about an hour and half each way, I would have lost about 14 extra days of PTO and holiday pay, and the new company didn't match anything for 401k.", "title": "" } ]	[ { "docid": "27d00415eb2551c200e1cabbf5273d3f", "text": "The problem with this is that it really only works in a small firm where everyone knows everyone else. Once it gets bigger and all the managers don't know all the workers it becomes a matter of who can BS the skill level of their favorites better in the yearly review. Then the resentment isn't about normally unknown salaries, it's about whether other employee's levels are legitimate. Don't get me wrong, opening up the conversation and trying to make it more objective is good, but this isn't some sort of common sense, one size fits all panacea.", "title": "" }, { "docid": "494c5a502d369a1c921ab752b8ff5948", "text": "\"The real question is what can you NOT do! If you track all your monetary actions, you know everything about your monetary situation. That means you have the tools to ask and answer \"\"what if\"\" questions, such as: \"\"If I get a 10% raise, could I take longer vacations?\"\" You could calculate how much you spend per day on vacation and then consider the amount of your raise and how much of it you'd need to allocate to vacations to, say, be able to take a two-week vacation instead of a one-week vacation. \"\"How much more would I have to earn to move to this nicer apartment?\"\" This may seem like a simple question, but a surprising number of people can't answer it in a reliable way, because they don't have a clear understanding of how much money they make and how much of it they can afford to spend on housing. If you find you have lots of spare income, maybe you can move to the nicer place right away; if not, at least you can get a sense of how much more money you'd need to make it happen. \"\"If I started taking the bus to work, how much would I save?\"\" You can look at how much you spend on gas and compare that to the price of a bus pass. By separating out categories like gas, repairs, and car insurance, you can also calculate different scenarios, like if you still kept your car but only used it for occasional trips, versus if you sold the car and used only public transportation. \"\"If I want to take a trip to Tahiti, what can I cut back on to save the money?\"\" Using your table you can pencil out scenarios like \"\"Suppose I stop eating out for lunch at work and just bring my lunch, how long would I have to do that to save enough to pay for a plane ticket?\"\" These are just a few random examples. The general idea is that with a record of hard numbers, you can start to consider potential tradeoffs in an objective way --- that is, you can ask \"\"how much in category X would I have to give up to gain this thing I want in category Y?\"\" The real trick in making use of your data is not so much \"\"what\"\" you can do, but \"\"how\"\" exactly to do it. You may have to become more of a spreadsheet wizard to really delve into these questions. Also, if you have programming expertise, you can even use something like Python to do calculations that might be laborious in a spreadsheet.\"", "title": "" }, { "docid": "0df7234de23fe9441f835f8083b937e7", "text": "This was absolutely true for me. I'm retired now. Until my last company I always got about 5% raise. When I skipped jobs the raise was usually enormous. I went: 19K 25K 30K 35K 50K 75K 85k 75K (last job sucked and this one was stupid simple at first) New company gave me steady raises to $125K and I got to do awesome work and was in complete control. There is no way I would have gone from 19K to 125K at the same firm.", "title": "" }, { "docid": "efbeb66e10cd48131de8e89d2a0fdc6a", "text": "All hearsay and a bad memory, but if I remember correctly, when you dig deep the reason he raised salaries was to help fight some lawsuits against his ex wife and/or ex business partner. These raises effectively made the company make nothing while he was fighting lawsuits. Then it eventually turned into publicity and more clients for his payment processing company.", "title": "" }, { "docid": "a02d314be40e2de7566d5585bb79ddf7", "text": "\"And that is my point: without specific dollar amounts...this is USELESS information. The problem with this crap information is that some crappy operation will find a reason to pay themselves more for being a \"\"good boss\"\" thinking that will make up for any raises. I'd take a better boss over a 5-cent an hour raise (and yes, I worked at McDonalds when raises were 0-5-10 cents an hour...and yeah, I would have liked a better boss for 5 cents). However, for an annual job that pays $500/hr I'll gladly work in horrid conditions with a horrible boss doing awful things.\"", "title": "" }, { "docid": "442ed4cce3fedeeeb99c73feb326f40b", "text": "Not necessarily. You only need to raise prices to maintain current profit margins. Assuming you aren't living on a paper thin profit margin, you can give your employees a raise and suffer a lower profit margin. Now, that could have other negative consequences on your stock value and shareholders might be upset, but that is a different discussion.", "title": "" }, { "docid": "7fa35b69d33d8655a192fae2ddb950b1", "text": "Microsoft doesn't do salary negotiations... The way the salary structure works at Microsoft is similar to how it works in many other huge companies. You have a rank/level/title (eg. developer, Senior developer, Principal developer, and upwards) and your salary is based solely on that. For example, every new college hire starts at a certain rank (whether foreign or not) and every new college hire starts at the same level of pay. When you get a promotion you get a new title and a corresponding pay increase. You can't negotiate for bonuses or salary increases, it's set in stone for everyone. This is for engineering positions, obviously sales/marketing/etc. all have different structures.", "title": "" }, { "docid": "85a7f356bac3336d22f16c480e4c8a41", "text": "its not that hard to figure out Please explain how arbitrarily raising employee wages would raise demand. What kind of 'demand' do you even speak of? Did you mean [Labor Demand](http://en.wikipedia.org/wiki/Labor_demand) ---I think what you talking about is [Consumer Confidence](http://en.wikipedia.org/wiki/Consumer_confidence). Please enlighten me.", "title": "" }, { "docid": "bce8281f921835b728fba8738e1ec55c", "text": "I had a similar decision to make. I got offered a modest salary near Philly, or a better salary plus a nice bonus in New York. I chose New York. I'm loving it so far but who knows what will happen. I'm actually saving a lot of money as I automatically have it deduct from my paycheck and disperse into several savings accounts. I guess it's different for everyone and you have to consider your situation before applying a blanket advice", "title": "" }, { "docid": "4e0f407d03737175db7d72d8f5e9d3e4", "text": "This is bad statistics. If you look at people who jumped ship, of course you're going to see bigger increases in salary because you're not counting those that looked for a new job and didn't find a better offer. They stayed put. People are complacent but companies are, too. Employers aren't putting a lot of effort into firing bad employees as soon as they can. So there are employees that aren't jumping ship and could be paid more but there are also employees that should be kicked off the ship and paid less, but aren't. All that said, staying put is easier than moving and there's a price for it. If you're willing to move around, you might do better. Might not. If you only look around at the ones that did move, of course it's going to look like they did better!", "title": "" }, { "docid": "f4f0df64d1cd7d42776f3b94467ed780", "text": "Recent MBA grad here. I would much rather work at a job that makes me happy than a job that pays more. With that said, I'm feeling pressure to earn a fairly high salary to pay off all the student loans. I will probably spend a few years trying to find a balance between happiness and salary and then completely forget about salary after my loans are paid off.", "title": "" }, { "docid": "215dc7dad7674e2dfac95e80a8d3df64", "text": "\"Many in management seem to live in an alternate reality from those who work for a living. When IBM shunted some techs into another company they put them on probation for a year (even though they were high performers - some with 25+ years at IBM = no job security) and cut their pay 25%. The next time they went to move workers the first question was \"\"how much is the pay cut this time\"\". Management's reply, \"\"No pay cut because we found when we did it before it negatively affected morale.\"\" I thought: \"\"No kidding. They had to actually cut people's pay 25% to figure that out? What planet DO they live on?\"\"\"", "title": "" }, { "docid": "250bf86246dfc46508bdbb932830201a", "text": "> but since that's impossible (due to the bureaucracy) in most jobs Huh? Dude, asking for a raise is never impossible. Go to your manager and make a well thought-out case. This is how it's done. It's not magic. Very rarely, in any professional environment, will anyone just hand you a raise because they think you're a nice guy. Keeping your head down and nose to the grindstone will not get you noticed. Obviously, going elsewhere to get that higher salary should also be an option. I did it once too. But in the situation you describe, you'd be crazy not to go demand a bigger slice of the pie.", "title": "" }, { "docid": "587a65d963fc2a65049684b33ecee4f6", "text": "My doubt is whether Govt./Reserve Bank of India gives any explicit incentives to banks to offer cheaper home loans ? Currently NO. In the past Loan against GOLD was considered priority sector lending [Loans to poor and agriculture etc]. Every Bank need to lead around 25% to priority sector. Hence quite a few Banks gave loans relatively cheaper to todays rate rather than giving it as Farm loan that almost never get recovered. It is no longer the case now as Loan against GOLD is not considered priority lending. If it were just demand/supply, I feel that gold loans should have been cheaper It is demand and supply. There are quite a few reasons for this;", "title": "" }, { "docid": "50d0b42ef54f328df9c633c45a1d2aba", "text": "No, you can't do this indefinitely. For one, you can't just take money out as home equity with no strings attached. The cash out is done as a loan (often a HELOC) or second mortgage and you have to make payments. The lender will always make sure you are able to afford the payments. At some point, you won't qualify for the loan because of insufficient income or too many previous liens on the property. While home values often go up, there's no guarantee. And your examples are more than a bit optimistic.", "title": "" } ]	fiqa
d0a82dcf9061af060c7d549d02fffd07	Employer-Paid relocation as taxable income?	[ { "docid": "61ca24fc9ed4a1d70bc253d5905a22d6", "text": "\"If all of the relocation expenses are paid by your employer to the moving companies, then you should not have any tax liability for those payments. Relocation expenses should be treated as normal business expenses by your employer. Note I emphasize \"\"should\"\" because it's possible that your employer \"\"could\"\" consider it income to you, but companies generally do not go out of their way to classify normal business expenses as income since it costs both them and you more money in taxes. As a side note, the reason your company is paying these expenses directly is probably to lessen the likelihood of these expenses being questioned in an audit (in comparison to if they cut you a reimbursement check which could get more scrutiny).\"", "title": "" } ]	[ { "docid": "7156a9fde48c1a3aec096bab435c99e9", "text": "Yes, you can do what you are contemplating doing, and it works quite well. Just don't get the university's payroll office too riled by going in each June, July, August and September to adjust your payroll withholding! Do it at the end of the summer when perhaps most of your contract income for the year has already been received and you have a fairly good estimate for what your tax bill will be for the coming year. Don't forget to include Social Security and Medicare taxes (both employee's share as well as employer's share) on your contract income in estimating the tax due. The nice thing about paying estimated taxes via payroll deduction is that all that tax money can be counted as having been paid in four equal and timely quarterly payments of estimated tax, regardless of when the money was actually withheld from your university paycheck. You could (if you wanted to, and had a fat salary from the university, heh heh) have all the tax due on your contract income withheld from just your last paycheck of the year! But whether you increase the withholding in August or in December, do remember to change it back after the last paycheck of the year has been received so that next year's withholding starts out at a more mellow pace.", "title": "" }, { "docid": "4df5bb9fc859ff7e608102a75e71a935", "text": "\"If you are a telecommuter and in good terms with your employer, then all you need is contact your employer and explain your situation. Ask them for a short letter that indicates: \"\"1. they require you to work from a privately rented office (or from a home office for those who prefer working from home), 2. this is one of the terms of your employment, and, 3. they will not reimburse you for this expense.\"\" With this letter in your hand, you satisify both the \"\"convenience of employer\"\" test AND the deduction of the rent for your private office as a unreimbursed employee expense. The IRS cannot expect your employer to open an office branch in your city just for your sake, nor can they expect you to commute to your employer's city for work, which is an impossiblity considering the distance. Additionally, the IRS cannot \"\"force\"\" telecommuters to work from home. The key is to get a letter from your employer. You'd be surprised how easily they are willing to write such letter for you.\"", "title": "" }, { "docid": "cf29d354336d2585c9fbaef99b4ae97e", "text": "\"The bill proposed to \"\"Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up \"\"insourcing\"\" labor back into the U.S.\"\" From http://abcnews.go.com/m/blogEntry?id=16816660 as found by beermethestrength. I will explain this in an example below. Lets use allen edmonds. I manufacture shoes and sell them in the US. The facts we will assume is Revenue or sales is $100. Manufacturing cost is $50. Tax rate is 10%. Therefore, Profit before tax is $100 -$50 = $50. Tax is $5. Net profit is $45. However, suppose offshoring to Canada saves money. They say please and thank you at every opportunity and the positive work environment allows them to work faster. Correspondingly to make the same number of shoes our costs has decreased because we pay less for labour. The manufacturing cost decreases to $30. However, we incur costs to move such as severance payments to layoff contracted employees. (I promise to hire you and pay $1 a year for 2 years. I fire you at the end of the first year. To be fair, I pay you $1) However, it can be any legitimate expense under the sun. In this case we suppose this moving cost is $10. Revenue or sales is $100. Manufacturing cost is $30. Moving cost is $10. Tax rate is 10%. Profit before tax is $100 -$40 = $60. Tax is $6. Net profit is $54. Yay more jobs for Canadians. However, the legislation would have changed this. It would have denied that moving expense if you were moving out of the country. Therefore, we cannot consider $10 worth of expenses for tax purposes. Therefore Revenue or sales is $100. Manufacturing cost is $30. Tax rate is 10%. Profit before tax for tax purposes is $100 - $30 = $70. Tax is $7. Net profit for tax purposes is $63. However, my accounting/net/real profit is $53. I must deduct the $10 associated with moving. The difference between the two scenarios is $1. In general our net profit changes by our moving cost * our tax rate. There is no tax break associated with moving. In Canadian tax, any business expense in general can be deducted as long as it is legitimate and not specifically denied. I am uncertain but would assume US tax law is similar enough. Moving expenses in general are legitimate and not specifically denied and therefore can be deducted. Offshoring and onshoring are seen as legitimate business activities as in general companies do things to increase profit. (forget about patriotism for the moment). The bill was to make offshoring more expensive and therefore fewer companies would find offshoring profitable. However, republicans defeated this bill in congress. Most likely the house For completeness let us examine what would happen when we onshore (bring jobs from canada to us :( ). In our example, silly unions demand unrealistically high wages and increase our cost of manufacturing to $50 again. We decide to move back to the US because if it is the same everywhere for the sake of silly national pride we move our jobs back to the US. We incur the same moving cost of $10. Therefore we have Revenue or sales is $100. Manufacturing cost is $50. Moving cost of $10. Tax rate is 10%. Profit before tax for tax purposes is $100 - $60 = $40. Tax is $4. However, we are given a 20% tax credit for moving expense. $10 * .2 = 2. The government only assess us tax of 2. Net profit is $38. Tax credits are a one time deal so profit in the future will be $100 -$50 - $5 = $45. Same as the first example. insourcing = onshoring , outsourcing = offshoring for the purposes of this article. Not quite the same in real life.\"", "title": "" }, { "docid": "173677a1d78c4e8a90b0be22dec7361e", "text": "\"I had experience working for a company that manufactures stuff and giving products to the employees. The condition was to stay employed for a year after the gift for the company to cover its cost (I think they imputed the tax), otherwise they'd add the cost to the last paycheck (which they did when I left). But they were straight-forward about it and I signed a paper acknowledging it. However, in your case you didn't get a product (that you could return when leaving if you didn't want to pay), but rather a service. The \"\"winning\"\" trip was definitely supposed to be reported as income to you last year. Is it okay for them to treat me differently than the others for tax purposes? Of course not. But it may be that some strings were attached to the winning of the incentive trip (for example, you're required to stay employed for X time for the company to cover the expense). See my example above. Maybe it was buried somewhere in small letters. Can they do this a year after the trip was won and redeemed? As I said - in this case this sounds shady. Since it is a service which you cannot return - you should have been taxed on it when receiving it. Would the IRS want to know about this fuzzy business trip practice? How would I report it? Here's how you can let them know. Besides now understanding the new level of slime from my former employer is there anything else I should be worried about? Could they do something like this every year just to be annoying? No, once they issued the last paycheck - you're done with them. They cannot issue you more paychecks after you're no longer an employee. In most US States, you are supposed to receive the last paycheck on your last day of work, or in very close proximity (matter of weeks at most).\"", "title": "" }, { "docid": "7fd6d379a23acdd8369d63e87fb51d0e", "text": "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.", "title": "" }, { "docid": "559b05e48a817e0e9841d2cc181a9a71", "text": "\"You are confusing entirely unrelated things. First the \"\"profit distribution\"\" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as \"\"profits from S-Corp\"\". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case.\"", "title": "" }, { "docid": "78d14bc8caa8db04ea078cca3001630b", "text": "You only need to report INCOME to the IRS. Money which you are paying to a landlord on behalf of someone else is not income.", "title": "" }, { "docid": "a356d7386d41ea9870895ad5fcc771de", "text": "You normally wouldn't pay income taxes on money that isn't income. Transferring money or withdrawing it from a bank isn't an income generating event. I think it is very doubtful that you would need to claim that on income tax forms.", "title": "" }, { "docid": "265d27dfb5d41ee5453592f8dcd0d2bc", "text": "Its one of the main points. Transfer pricing includes discretionary decisions and is part of BEPS. Its also completely unnecessary: Pay taxes on revenue in country earned/sold. Get tax credits/refunds in country were spending is made. The reason why already profitable companies consider BEPS/tax arbitrage for HQ locations is because they get discretionary power over accounting profit allocation. Tax policy should serve the society though, and this proposal encourages the spending that benefits society. Its the usual case that the right answer is different than that being lobbied for.", "title": "" }, { "docid": "04b97a83bcb4ed2eba9355dafbdea597", "text": "The tax is depended upon state where you are registered and the salary paid. More here If you employ contract you need not pay tax.", "title": "" }, { "docid": "d9a780decda5c8e8bb9f5fa69add811c", "text": "\"Even though you will meet the physical presence test, you cannot claim the FEIE because your tax home will remain the US. From the IRS: Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a \"\"tax home\"\" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. ... You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. ... The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. If your new work assignment is for an indefinite period, your new place of employment becomes your tax home, and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite. If you expect your employment to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. For guidance on how to determine your tax home refer to Revenue Ruling 93-86. Your main place of business is in the US and this will not change, because your business isn't relocating. If you are intending to work remotely while you are abroad, you should get educated on the relevant laws on where you are going. Most countries don't take kindly to unauthorized work being performed by foreign visitors. And yes, even though you aren't generating income or involving anyone in their country, the authorities still well may disapprove of your working. My answer to a very similar question on Expatriates.\"", "title": "" }, { "docid": "0ec32c2cac28c0c18576ea7a8a9e5dac", "text": "To answer your question directly, this is a taxable benefit that they are providing for you in lieu of higher wages. It is taxable to the employee as income and through payroll taxes. It is taxable to the employer for their half of the payroll taxes.", "title": "" }, { "docid": "866b5c9cc2f9d0044adca9577f629247", "text": "\"You'll need to read carefully the German laws on tax residency, in many European (and other) tax laws the loss of residency due to absence is conditioned on acquiring residency elsewhere. But in general, it is possible to use treaties and statuses so that you end up not being resident anywhere, but it doesn't mean that the income is no longer taxed. Generally every country taxes income sourced to it unless an exclusion applies, so if you can no longer apply the treaty due to not being a resident - you'll need to look for general exclusions in the tax law. I don't know how Germany taxes scholarships under the general rules, you'll have to check it. It is possible that they're not taxed. Many people try to raise the argument of \"\"I'm not a resident\"\" to avoid income taxes altogether on earnings on their work - this would not work. But with a special kind of income like scholarship, which may be exempt under the law, it may. Keep in mind, that the treaty has \"\"who is or was immediately before visiting a Contracting State a resident of the other Contracting State\"\" language in some relevant cases, so you may still apply it in the US even if no longer resident in Germany.\"", "title": "" }, { "docid": "10d06e9d9bdbf2270cf09d670639571a", "text": "A couple of thoughts. Tax benefits are the usual reasons to decide on one residency or another. International tax law is complex, and it's probably best to consult a professional. Certainly without knowing which the other country is I would not want to hazard a guess. If he is really not going to be taxed on the other country, residing there would seem sensible. But... In Canada residency for tax purposes is established for an entire year. If you are resident for more than six months your salary for the year is taxable. Conversely if you are present for less than six months you are not taxable. (This may have changed - it's been twenty years since I did this.) The other issue is healthcare. If you are not resident in Ontario you are not eligible for free healthcare, I believe. He might have to purchase supplemental insurance if he returns occasionally.", "title": "" }, { "docid": "735288ea721f87fe49b5c1098226c735", "text": "The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You are still liable to pay tax in India on the salary. If you are out of India for more than 182 days, you can be considered as Non-Resident from tax point of view. However this clause would not be of any benefit to you as are having a Employee / Employer relationship and being paid in India. Edit: This is only about the India portion of taxes. There maybe a UK protion of it as well, plus legally can you work and your type of Visa in UK may have a bearing on the answer", "title": "" } ]	fiqa
2a87821a632d2d857cd5b54f5e240b42	Is interest on a personal loan tax deductible?	[ { "docid": "9369686ff9624d06b4a4d5eeb8a3d237", "text": "When you pay interest on a loan used to fund a legitimate investment or business activity, that interest becomes an expense that you can deduct against related income. For example, if you borrowed $10k to buy stocks, you could deduct the interest on that $10k loan from investment gains. In your case, you are borrowing money to invest in the stock of your company. You would be able to deduct the interest expense against investment gain (like selling stock or receiving dividends), but not from any income from the business. (See this link for more information.) You do not have to pay taxes on the interest paid to your father; that is an expense, not income. However, your father has to pay taxes on that interest, because that is income for him.", "title": "" }, { "docid": "2d92d7b11bb193ddd6c7c2b3ed4edf86", "text": "Can you deduct interest paid to your father on your personal income taxes? Interest paid on passive investments can be deducted from the amount earned by that investment as an investment expense as long as the amount earned is greater than the total paid for the interest expense. Also beware if the amount of interest paid is greater than the yearly gift tax exclusion, as the IRS might interpret this as a creative way of giving gifts to your father without paying gift tax. Do you pay taxes on the interest you pay? No, because is an expense, not income, you would not count interest paid to him as taxable income. Does your father owe taxes on the interest he collects from you? Yes, that is income to him. And the last question you didn't ask, but I expect it is implied: Do you owe taxes on the quarterly profits? Yes, that is income to you. The Forbes article How To Arrange A Loan Between Family Members is a bit dated, but still a good source of information. You really should write a formal note (signed by both you and your father) indicating the amount borrowed, the interest rate you are paying on that amount, and when the loan will be repaid. If your father has set the interest rate too low, this could also be considered a gift to you, though we would really be talking about large amounts of money to hit the gift tax limit on interest alone.", "title": "" }, { "docid": "e785065550f472303939fbd42aa24ed0", "text": "\"Assuming USA: It is possible to make the interest deductible if you go to the trouble of structuring, and filing, the loan as an actual mortgage on a primary residence. Websearching \"\"intra-family loan\"\" will find several firms which specialize in this. It costs about $700 for all the paperwork and filing fees as of last time I checked, so unless you're going to pay at least three times that in interest over the life of the loan it probably isn't worth considering. (For an additional fee they'll take care of the payment processing, if you'd really rather be hands-off about it.) I have no idea whether the paperwork fees and processing fees can be deducted from the interest as a cost of producing that income. In theory that ought to be true, but I Am Not A Lawyer. Or accountant. Note: one of the interesting factors here is that the IRS sets a minimum interest rate on intra-family loans. It's pretty low (around 0.3%), so in most cases you can say you gifted the difference if you'd prefer to charge less... but that does set a floor on what the IRS will expect the lender to declare, and pay taxes on. There's a lot more that can be said about this, but since I am NOT an expert I'll refer you to those who are. I have no affiliation with any of this except as a customer, once; it seemed pretty painless but I can't claim to know whether they were really handling everything exactly correctly. The website seemed to do a pretty good job of explaining what choices had to be made and their effects, as well as discussing how these can be used to avoid excess gift taxes by spreading the gift over a number of years.\"", "title": "" } ]	[ { "docid": "9b897b567bfce7028ff83cab009ff20e", "text": "Credit card interest was deductible prior to 1986. Just because it's an expense doesn't mean it needs to be deductible. We need to move toward elimination of the income tax, we're also $20T in debt, there's gonna be cuts that people aren't gonna like but we have to move forward.", "title": "" }, { "docid": "9abd11c4faeca3bc4564dcce7b880472", "text": "Congratulations for achieving an important step in the road to financial freedom. Some view extending loan payment of loans that allow the deduction of interest as a good thing. Some view the hit on the credit score by prematurely paying off an installment loan as a bad thing. Determining the order of paying off multiple loans in conjunction with the reality of income, required monthly living expense, and the need to save for emergencies is highly individualized. Keeping an artificial debt seems to make little sense, it is an expensive insurance policy to chase a diminishing tax benefit and boost to a credit score. Keep in mind it is a deduction, not a credit, so how much you save depends on your tax bracket. It might make sense for somebody to extend the loan out for an extra year or two, but you can't just assume that that advice applies in your situation. Personally I paid off my student loan early, as soon as it made sense based on my income, and my situation. I am glad I did, but for others the opposite made more sense.", "title": "" }, { "docid": "59db4cc4a68d16b98e8754c628bc19af", "text": "\"Mortgage interest in Canada is not generally tax deductible for individuals. (Where did you read otherwise?) As an individual, the only mortgage interest you may be able to deduct is when you borrow the money to purchase an income-producing asset, e.g another property you can rent out, or investments producing dividends or other income. In these cases, the interest you pay on the borrowed funds, i.e. the \"\"carrying costs\"\" for your investments, would be deductible against the income produced by the investments purchased.\"", "title": "" }, { "docid": "0c1f9be2456ff2e8a94d0978c0b7d7c6", "text": "With the information you have given, I would say never. Remember the banker is a salesman, and the line of credit is the product. If you don't need to borrow the money for something specific, then you don't need the line of credit in the first place. Even if you did need something I would tell you to save up and pay cash for it. On the tax advantage: There is none, in the US you can deduct your mortgage interest on your taxes but it's not a tax credit it's a tax deductions. Let me explain further: You spend $10,000 on mortgage interest, and you're in the 25% tax bracket. You send the bank $10,000 in return you get at tax savings of $2500. You are still in the hole $7500 You would have been better off not taking out the loan in the first place. On the Emergency Fund: You should have 3 - 6 months of expenses in cash, like a money market account. This money isn't for investing, it's like insurance, and you don't make money on insurance. The last thing you want to do is have to go into debt right in the middle of an emergency. Say you lost your job, the last thing you would want to do is borrow money, right at the time you have no income to pay it back. The bank is under no obligation to maintain you credit limit and can without notice reduce it, they can in most cases call the loan balance due in full with little or no notice as well. Both of those are likely scenarios if the bank were to become aware of the fact that you were unemployed.", "title": "" }, { "docid": "99ba78f0aedd1f77dd101ffe5d556cae", "text": "If you just make a capital contribution to the company it is not a taxable event. If you're the owner, lending only makes sense if you want the company to pay you interest (if you have partners who aren't lending money, for example) and you want to be compensated for lending, a loan would allow that. But the interest is taxable as income to you (1099-int) and the company can expense it. But a capital contribution is much easier and you can take a distribution later to get paid back. Neither event is taxed, but you cannot take interest.", "title": "" }, { "docid": "f6e1bec4500da2d024b84b66bd887863", "text": "Any money that ScottMcGready gives to the company is a personal loan that must be repaid by the company at some point without tax consequences. Any money that the company gives to ScottMcGready is either salary (Scott pays income tax, company counts this as cost), or a dividend (Scott pays dividend tax), or a loan (Scott must repay the loan).", "title": "" }, { "docid": "e31d8c3f836d3ec8d604107df90b5081", "text": "For the purpose of personal finance, treating $500 as Interest Expense is sufficient. For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan.", "title": "" }, { "docid": "2860f12c36966891eb816cce27702fcc", "text": "You need to report the interest expense, assuming the loans were for your business: You need to report interest expense (only interest, principle is not an expense just as the loan proceeds are not income). The interest expense goes to the appropriate line on your Schedule C or E (depending on whether you used the loan for the online business or the rental). People whom you borrowed from must also report the interest as income to them on their Schedule B. You cannot deduct the interest expense if they don't report it as interest income. If you didn't take the loans for your business then the interest is not deductible. You don't need to report anything. People who lent you money still have to report the interest you paid to them as income on Schedule B. If you paid no interest (free loan) or below/above market interest to a related party (family member), then the imputed interest is considered income to them and gift to you. They need to report it on their Schedule B, and depending on amounts - on a gift tax return. For $1K to $10K loans there probably will be no need in gift tax returns, the exemption is for $14K per year per person. If the imputed interest rules may apply to you, better talk to a licensed tax adviser on how to proceed.", "title": "" }, { "docid": "38b1c484d23f6bd6605e7aa55bb6899f", "text": "Interest payments You can make loans to people and collect interest.", "title": "" }, { "docid": "f8e65433179d144a0fa508ebc7a70957", "text": "Two points You don't really get the full 10,000 annual interest as tax free income. Well you do, but you would have gotten a substantial amount of that anyway as the standard deduction. ...From the IRS.... Standard deduction The standard deduction for married couples filing a joint return is at $11,900 for 2012. The standard deduction for single individuals and married couples filing separate returns is $5,950 for 2012. The standard deduction for heads of household increases by $50 to $8,700 for 2012. so If you were married it wouldn't even make sense to claim the 10,000 mortgage interest deduction as the standard one is larger. It can make sense to do what you are talking about, but ultimately you have to decide what the effective interest rate on your mortgage is and if you can afford it. For instance. I might have a 5% mortgage. If I am in a 20% tax bracket it effectively is a 4% mortgage to me. Even though I am saving tax money I am still paying effectively 4%. Ultimately the variables are too complex to generalize any hard and fast rules, but it often times does make sense. (You should also be aware that there has been some talk of eliminating or phasing out the mortgage interest deduction as a way to close the deficit and reduce the debt.)", "title": "" }, { "docid": "2ce7e28b25577b3d9f1a49cc54eb5a84", "text": "Think about how loans work for you personally. When you charge a $50 dinner for two to your Visa card, you did not earn $50 in income. You did not pay income tax on that $50. The money you use to pay back that $50 at the end of the month is not tax deductible. Interest on a loan is a business expense. Repayment of principal is not a business expense, just as receiving the loan in the first place is not business income. Effectively this means the LLC repays the loan with after-tax dollars. Just like you do with your Visa card. When I do corporate accounting, payment of loan interest shows up on the expense side of the Profit/Loss statement, and it makes the Balance Sheet net assets go down. However payment of loan principal is effectively null. It doesn't appear on the Profit/Loss at all -- and it's a wash on the Balance Sheet, as both Assets and Liabilities fall by the same amount.", "title": "" }, { "docid": "6182d56afcf0b5a8f2439fa618d15295", "text": "\"A loan is not a taxable income. Neither is a gift. Loans are repaid with interest. The interest is taxable income to the lender, and may or may not be deductible to the borrower, depending on how the loan proceeds were used. Gifts are taxable to the donor (the person giving the gift) under the gift tax, they're not a taxable income to the recipient. Some gifts are exempt or excluded from gift tax (there's the annual exemption limit, lifetime exclusion which is correlated to the estate tax, various specific purpose gifts or transfers between spouses are exempt in general). If you trade for something of equal value, is that considered income? Yes. Sale proceeds are taxable income, however your basis in the item sold is deductible from it. If you borrow a small amount of money for a short time, is that considered income? See above. Loan proceeds are not income. does the friend have to pay taxes when they get back their $10? No, repayment of the loan is not taxable income. Interest on it is. Do you have to pay taxes if you are paid back in a different format than originally paid? Form of payment doesn't matter. Barter trade doesn't affect the tax liability. The friend sold you lunches and you paid for them. The friend can deduct the cost of the lunches from the proceeds. What's left - is taxable income. Everything is translated to the functional currency at the fair market value at the time of the trade. you are required to pay taxes on the gross amount Very rarely taxes apply to gross income. Definitely not the US Federal Income taxes for individuals. An example of an exception would be the California LLC taxes. The State of California taxes LLCs under its jurisdiction on gross proceeds, regardless of the actual net income. This is very uncommon. However, the IRC (the US Federal Tax Code) is basically \"\"everything is taxable except what's not\"\", and the cost of generating income is one of the \"\"what's not\"\". That is why you can deduct the basis of the asset from your gross proceeds when you sell stuff and only pay taxes on the net difference.\"", "title": "" }, { "docid": "2e92dac5806716153cdccea6b4a15c79", "text": "I would consult a tax professional for specific help. On my own research, I believe that you could. I know that when I made payments when I was in school for my undergraduate, I made payments on the interest. I believe that I was even told by my financial aid office that I could deduct the interest that I paid. I made not much money so I wasn't anywhere close to the MAGI >75k, but I believe you still could. Not only that but one other thing to consider is that if you have an unsubisidized loan, the interest still accrues when you are in school. In that case, it might be better to make at least some payments. It would save you from the total loan amount ballooning so much while you are in school.", "title": "" }, { "docid": "d6c3643ca3542cc5de3c2eccae8c6fa4", "text": "I would not advise this for two reasons: Your point that the investment could be lower at the end of the 3 years is a concern, although with a safe investment, it is less so, but this reduces the potential gain. While your interest is not gaining interest, your interest charged is based on the principal. If you pay off the loans, you reduce the principal and therefore you pay less interest in the long run, even if the interest isn't capitalized. All that this means is that you are basically being charged simple interest as opposed to compounding interest, but reducing the principal helps in either case. You are mistaken about the benefits of the tax deduction. You reduce your tax bill by the marginal rate times the student loan interest you paid for the year. So if you are in the 15% tax bracket and paid $100 in interest, you save $15. This is not a reason to keep the loans (because you have to pay $100 to get $15), but you are mistaken on the benefit, it has nothing to do with shifting the tax brackets. Also, speaking of taxes, don't forget that you pay taxes on investment gains.", "title": "" }, { "docid": "5d7ecf7c5d091ee8984b5ed7a27e6fa4", "text": "So, child, your goal is to make money? This is usually achieved by selling goods (say, lemonade) at a price that exceeds their cost (say, sugar, water and, well, lemons). Options, at first, are very much same in that you can buy the right to engage in a specific future trade. You make money in this situation if the eventual returns from the scheduled trade cover the cost of purchasing the option. Otherwise you can simply opt out of the trade -- you purchased the right to trade, after all, not any type of obligation. Makes sense? Good. Because what follows is what makes options a little different. That is, if you sell that same right to engage in a specific trade the situation is seemingly reversed: you lock in your return at the outset, but the costs aren't fully realized until the trade is either consumed or declined by the owner of the option. And keep in mind that it is always the owner of the option who is in the driver's seat; they may sell the option, hold on to it and do nothing, or use it to engage in the anticipated trade. And that's really all there's to it.", "title": "" } ]	fiqa
5278432015482d10f96ad71a33dc3073	How can I work out how much a side-job contracting will be taxed for?	[ { "docid": "2b5c0f3ab5a837e85d550225adbb03c7", "text": "I would say you can file your taxes on your own, but you will probably want the advice of an accountant if you need any supplies or tools for the side business that might be tax deductible. IIRC you don't have to tell your current employer for tax reasons (just check that your contract doesn't state you can't have a side job or business), but I believe you'll have to tell HMRC. At the end of the year you'll have to file a tax return and at that point in time you'll have to pay the tax on the additional earnings. These will be taxed at your highest tax rate and you might end up in a higher tax bracket, too. I'd put about 40% away for tax, that will put you on the safe side in case you end up in the high tax bracket; if not, you'll have a bit of money going spare after paying your taxes.", "title": "" }, { "docid": "908841e826e30f96712c7bdec6a1b499", "text": "\"Being self-employed, your \"\"profit\"\" is calculated as all the bills you send out, minus all business-related cost that you have (you will need a receipt for everything, and there are different rules for things that last for long time, long tools, machinery). You can file your taxes yourself - the HRS website will tell you how to, and you can do it online. It's close to the same as your normal online tax return. Only thing is that you must keep receipts for all the cost that you claim. Your tax: Assuming your gross salary is £25,000 and your profits are about £10,000, you will be paying 8% for national insurance, and 20% income tax. If you go above £43,000 or thereabouts, you pay 40% income tax on any income above that threshold, instead of 20%, but your national insurance payments stop.\"", "title": "" } ]	[ { "docid": "54d9bf5d51bfb4434224944a5f19d757", "text": "4 months working from your kitchen doesn't sound like an isolated or incidental transaction. So I think that yes, that income would be taxable by NYS (and NYC/Yonkers if the kitchen is in these cities).", "title": "" }, { "docid": "d3d82e1a48bd6fd8afb26538e78100d8", "text": "I'm not a tax advisor, but I've done freelance work, so... If any of your side-business revenue is reported on a 1099, you're now a business owner, which is why Schedule C must be filled out. As a business owner, minimum wage doesn't apply to you. All revenue is income to you, and you owe taxes on the profit, after subtracting legitimate (verifiable) business expenses. You'll want to talk to a real tax advisor if you're going to start expensing mileage, part of your house (if you use a home office), etc. Don't forget that you'll owe self-employment tax (the employer's half of your payroll tax). You can't save money on business taxes by paying yourself a wage and then counting it as an expense to the business. You'll definitely want to talk to a tax expert if you start playing around with finances as an (the) owner of the business. Income that is not reported on a 1099 should be reported as hobby income.", "title": "" }, { "docid": "3e534876010df78449bbca157d503e14", "text": "\"Chris, Joe's table helps. but think this way: there are two ways you can pay the taxes for your side-gig: either you can send a check quarterly to the Feds, OR, you can overwithhold at your real job to cover taxes at your sidegig. I'd do this in \"\"arrears\"\" -- after you get your first paycheck from sidegig, then adjust your real job's withholding. Except (and Joe neglected this), you're still responsible for Social Security / Medicare Tax from your sidegig. I suspect your income at real-job is high enough that you stop paying Social Security Tax, so at least at this time of year you won't be subject to 15.4% Social Security Tax. However, that's NOT true for the 2.9% Medicare Tax. Remember that because you're an independent contractor being payed without withholding, YOU are responsible not only for the Medicare (and Social Security) taxes you'd be responsible for if a regular employee, but you're also responsible for what your employer's share as well.\"", "title": "" }, { "docid": "edcc0906cab85e7fb383412944be83d2", "text": "Hourly rate is not the determinant. You could be selling widgets, not hours. Rather, there's a $30,000 annual revenue threshold for GST/HST. If your business's annual revenues fall below that amount, you don't need to register for GST/HST and in such case you don't charge your clients the tax. You could still choose to register for GST/HST if your revenues are below the threshold, in which case you must charge your clients the tax. Some businesses voluntarily enroll for GST/HST, even when below the threshold, so they can claim input tax credits. If your annual revenues exceed $30,000, you must register for GST/HST and you must charge your clients the tax. FWIW, certain kinds of supplies are exempt, but the kind of services you'd be offering as an independent contractor in Canada aren't likely to be. There's more to the GST/HST than this, so be sure to talk to a tax accountant. References:", "title": "" }, { "docid": "c2355fd290d4917d14f57a1c73572a49", "text": "Not as you suggest. Since you are sole prop, you are taxed on a cash basis. Within reason, you can prepay vendors - so temp to hire through an agency might appear more attractive than direct hire. But there needs to be a justification other than avoidance of taxes. So pre-paying 100k on 12/25 would look fishy as fuck. Plus your quality of candidate will suffer if you need anything other than low skill labor. Look at your other fully deductible expenses - anything you can prepay-prepay. For example, I set my liability insurance renewal January 15 to provide optionality. But it just shifts one year into another .. Means fuckall if you are in the same marginal bracket next year. The IRS has also relaxed depreciation on office technology. Computers are now fully deductible rather than being capitalized. @ 500k revenue you should have a CPA and legal counsel. Simply incorporating isn't tax magic. The purpose is to limit yourersonal liability, not a tax shelter - but shitty things happen once you have employees, don't create the potential for a disgruntled employee lawsuit put your shelter at risk of court judgment. That said, assuming you aren't dumping a hypothetical on the Internet, congrats - for all the headaches, having employees is the ultimate leverage .. it's like a xerox machine for your labor (including loss of fidelity with each copy) ..", "title": "" }, { "docid": "1f0b77539fde6780785caa9c608426fb", "text": "The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck. Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest. More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more. Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal.", "title": "" }, { "docid": "986c9acc7c40e3a524b8ef9cff81fbe9", "text": "I just scanned in a single sheet summary of my last two years tax returns. It is something our CPA does for us. How would I post it? Don't worry, I marked out all the personal information. What is says is I paid over $50K in taxes in 2015. Last year we had one of our biggest contracts put on hold, so I only paid $20K. I won't have this years figures, because we don't submit them to our CPA until the end of the year. However, this year, we just bought out two other owners at $1.2M, which makes me a 33% owner. The contract is getting restarted (knock on wood), which all together means my personal tax liability is going to be well over $100K. My company is a commercial company, but we work with the government, and matter of fact some of the stuff we produce was designed and developed by the government (as is many of today's modern inventions - I think you would be surprised). So lets tackle it one at a time. Pick one of those things that commercial does better than government. P.s. Higher taxes doesn't mean higher for you, a lot of times it means higher for guys like me or way better than me (which I am perfectly fine with, and matter of fact would support). People who use infastructure more - like large corporations - should pay more for it...", "title": "" }, { "docid": "60833091fb5f878a8610f7b5990ddb4e", "text": "This is how a consulting engagement in India works. If you are registered for Service Tax and have a service tax number, no tax is deducted at source and you have to pay 12.36% to service tax department during filing (once a quarter). If you do not have Service tax number i.e. not registered for service tax, the company is liable to deduct 10% at source and give the same to Income Tax Dept. and give you a Form-16 at the end of the financial year. If you fall in 10% tax bracket, no further tax liability, if you are in 30%, 20% more needs to be paid to Income Tax Dept.(calculate for 20% tax bracket). The tax slabs given above are fine. If you fail to pay the remainder tax (if applicable) Income Tax Dept. will send you a demand notice, politely asking you to pay at the end of the FY. I would suggest you talk to a CA, as there are implications of advance tax (on your consulting income) to be paid once a quarter.", "title": "" }, { "docid": "1a215235050247865d3e2f2c75a3b8eb", "text": "From my blog's discussion on 2017 tax rates. This is the final set of numbers. So, if you currently have, say $120K taxable income, every dollar above that starts getting taxed at 25%, until $153K, then 28%. In other words, forecast your taxes based on the day job, but then the 1099 goes on top of that.", "title": "" }, { "docid": "57b3d386870bef0e400cfece54330643", "text": "\"As an easy and rough rule of thumb, a job for $55,000 per year is $55 per hour as a contractor. That's roughly twice the hourly rate. In return, the company gets the rate to vary your hours or cease your employment with less financial, legal or managerial overhead than a full time employee. You have less stability, less benefits, perhaps need to put some time into finding another job sooner. Of course the ultimate, though less helpful, answer is \"\"whatever the market will bear.\"\"\"", "title": "" }, { "docid": "20c142df943348a0135a62c9553986d0", "text": "\"I don't see why you would need an \"\"international tax specialist\"\". You need a tax specialist to give you a consultation and training on your situation, but it doesn't seem too complicated to me. You invoice your client and get paid - you're a 1099 contractor. They should issue you a 1099 at the end of the year on everything they paid you. Once you become full-time employee - you become a W2 employee and will get a W2 at the end of the year on the amounts paid as such. From your perspective there's nothing international here, regular business. You have to pay your own taxes on the 1099 income (including SE taxes), they have to withhold taxes from your W2 income (including FICA). Since they're foreign employers, they might not do that latter part, and you'll have to deal with that on your tax return, any decent EA/CPA will be able to accommodate you with that. For the employer there's an issue of international taxation. They might have to register as a foreign business in your state, they might be liable for some payroll taxes and State taxes, etc etc. They might not be aware of all that. They might also be liable (or exempt) for Federal taxes, depending on the treaty provisions. But that's their problem. Your only concern is whether they're going to issue you a proper W2 and do all the withholdings or not when the time comes.\"", "title": "" }, { "docid": "c999d9b19f351dca287fcaade93b30dd", "text": "\"The translation scheme is detailed in IRS Publication 15, \"\"Employer's Tax Guide\"\". For the 2010 version, the information is in Section 16 on Page 37. There are two ways that employers can calculate the withheld tax amount: wage bracket and percentage. Alternatively, they can also use one of the methods defined in IRS Publication 15-A. I'll assume the person making $60k/yr with 10 allowances is paid monthly ($5000/period) and married. Using the wage bracket method, the amount withheld for federal taxes would be $83 per pay period. Using the percentage method, it would be $81.23 per pay period. I don't recommend that you use this information to determine how to fill out your W-4. The IRS provides a special online calculator for that purpose, which I have always found quite accurate. Note: \"\"allowances\"\" are not the same as \"\"dependents\"\"; \"\"allowances\"\" are a more realistic estimation of your tax deductions, taking into consideration much more than just your dependents.\"", "title": "" }, { "docid": "d434bac93e59b6bc54b351997abe1226", "text": "\"(I'm assuming USA tax code as this is untagged) As the comments above suggest there is no \"\"right\"\" answer or easy formula. The main issue is that you likely got into business to make money and if you make money consistently you will pay taxes. Reinvesting generally should be a business decision where the main concern is revenue growth and taxes are an important but secondary concern. Taxes can be complicated, but for a small LLC shouldn't be that bad. I highly recommend that you take some time closely analyze your business and personal taxes for the previous year. Once you understand the problem better, you can optimize around it. If it is a big concern, some companies buy software so they can estimate their taxes periodically through the year and make better decisions.\"", "title": "" }, { "docid": "730f045c86fb1fd0f70292b5f620bc95", "text": "\"I'm not 100% certain on boats, since they aren't typically sold for a gain, but the tax base of an asset is typically the cost of the asset plus the cost of any improvements, so your $15,000 gain looks right (check with a CPA to be certain, though, if you can). Your \"\"cost basis\"\" would be $50,000 + $25,000 = $75,000, and your net gain would be $90,000 - $75,000 = $15,000. The result is the same, but the arithmetic is organized a little differently. I am fairly confident you cannot include your time in the \"\"cost of improvements\"\". If you incorporated and \"\"paid yourself\"\" for the time, then the payment would be considered income (and taxed), if it was even allowed. Depending on your tax bracket that may be a WORSE option for you. You can look at it this way - you only pay the tax on the $15k gain versus paying someone else $15k to do the labor.\"", "title": "" }, { "docid": "fa9290fe5300a24c04c6f8ab01f18f66", "text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.", "title": "" } ]	fiqa
3af70c5557c2aabad0773bc62a0c1e3f	Why are American Express cards are not as popular as Visa or MasterCard?	[ { "docid": "bb5d9d9e02c33392ccae4b67b32b3344", "text": "Those extra treat points have to come from somewhere, and they come from American Express charging merchants a higher percentage than Visa or Mastercard. So it's less attractive for those merchants to accept it.", "title": "" }, { "docid": "c00974a2d361c559387d6566f32651b0", "text": "\"American Express was originally a mail business that moved into money-orders. Traditionally their cards have been charge cards instead of a credit card (though they have credit products now as well). They've been marketed specifically as a \"\"premium\"\" product for people who have a significant amount of money (and are willing to pay a significant fee for premium services such as AmEx's good airline miles). As such, Visa and MasterCard are more widespread. Additionally, the fees that Visa and MasterCard charge merchants are typically lower (Wikipedia says 2%, as compared to AmEx's 2.5%, at least in the US). So: American Express gets less business as a company, but they charge higher fees to make up for it. Merchants will only accept the higher fees when they want to serve people who have a lot of money to spend (or if they can negotiate a discount).\"", "title": "" }, { "docid": "22a1be4fe209a2fd1ecad737d0d6f717", "text": "\"I have a merchant account and accept Visa, Mastercard, and Discover but not AMEX. I don't take AMEX because they want me to go through another approval process (on top of what was required to get merchant status) and their fees are a percent or two higher than the other cards. This doesn't sound like a lot - but for a business that grosses $1M per year, an extra 2 percentage points is $20K. I don't gross $1M, but the additional cost for me to take AMEX would still use the word \"\"thousand\"\" and I don't see any reason to jump through extra hoops and fill out more forms for the privilege of giving extra money away. I haven't found anyone yet who wanted to pay me with AMEX who can't pay me with another card or a check instead.\"", "title": "" }, { "docid": "980123d8da7cef03e7dd8c49a9b7197d", "text": "My experience is in the United States only. In the past, American Express marketed its products as more exclusive and prestigious than other cards. There was an attempt to give the impression that cardholders were more qualified financially. In return, fees were higher both to merchants and to cardholders. At the time (early 1990's), it was not common to use credit cards for small purchases, such as groceries or fast food. Credit cards were used for larger purchases such as jewelry or electronics or dinner in a nicer restaurant. Once it became popular to use credit cards for everyday purchases, the demand for customers using credit cards changed to the highest number of people instead of people of higher status. At that point, Visa (and to a lesser extent Mastercard) transaction volume increased dramatically. Merchants needed the largest number of customers with cards, not the most financially stable. As Visa volume grew, and people started using Visa for small purchases, the use of American Express decreased as their habits changed (once someone got used to pulling out Visa, they did it in every situation). Merchants are less willing to go through the extra hassle of accepting cards that are used by fewer people. Over time, I suspect this process led to the gap between Visa and American Express. As a merchant, in order to accept credit cards, you have to set up a bank account and maintain a merchant account. Accepting Visa, MC and Discover can all be done through one account, but American Express has traditionally required a separate relationship, as well as its own set of rules and fees that were generally higher. Since there are relatively few American Express cardholders compared to Visa, there is doubt about whether it is worth it accept the card. It depends upon the customer base. Fine restaurants still generally accept American Express.", "title": "" } ]	[ { "docid": "593a607429bbea53a8c549008657a60f", "text": "\"The real reason credit cards are so popular in the US is that Americans are lazy and broke, and the credit card companies know how to market to that. Have you ever heard of the $30k millionaires? These were individuals that purchased as if they were some of the wealthy elite, but had no real money to back it up. American society has pushed the idea of \"\"living on credit\"\" for quite some time now. An idea that is even furthered by watching the US government operate solely on credit. (Raise the debt ceiling much?) Live in America for more than six months and you will be bombarded with \"\"Pre-Approved Deals\"\" with low introductory rates that are designed to sucker the average consumer into opening multiple accounts that they don't need. Then, they try and get you to carry a balance by allowing low minimum payments that could take in the neighborhood of 20 years to pay off, depending on carried balance. This in turn pads the credit companies' pockets with all of the interest you now pay on the account. The few truly wealthy Americans do not purchase on credit.\"", "title": "" }, { "docid": "22259b6d72da91a9fe3224dbeb616a0b", "text": "Just to make this a little less vauge, I will base everything on the Mercedes Benz American Express (MB AMEX) card, which is the closest to a $100 annual fee I found on American Express's website. The benefits of a card with an annual fee generally are worth the cost if (and only if) you spend enough money on the card, and avoid paying interest to offset the benefit. Using the MB AMEX card as a reference, it offers 5X points for Mercedes Benz purchases, 3X points at gas stations, 2X points at restaurants, and 1X points everywhere else. Even if we only make purchases at the 1X rate, it only takes charging $10,000 to the card in a year in order to make up the difference. Not too hard to do on a card someone uses as their main method of payment. Every dollar spent at the higher rates only makes that easier. There are a number of other benefits as well. After spending $5,000 on the card in a year, you receive a $500 gift card towards the purchase of a Mercedes Benz car. For anyone on the market for a Mercedes Benz, the card pays for itself multiple times with just this benefit.", "title": "" }, { "docid": "9b266e4a1a7e3770699243362ffe6040", "text": "If you read the fine print in the Pricing & Terms section of that card, you'll see: By becoming a Visa Business Card cardmember, you agree that the card is being used only for business purposes and that the card is being issued to a public or private company including a sole proprietor or employees or contractors of an organization. So that card is a Chase-branded Visa card, and should be accepted anywhere other Visa cards are. Credit cards are normally either MasterCard or Visa, although many of them make that rather inconspicuous. The only major exceptions I know of are American Express and Discover. (And store cards that are only good at one particular store.)", "title": "" }, { "docid": "bb0e3e99c7cda972e38413ba3620e23d", "text": "\"There are hidden costs to using rewards cards for everything. The credit card company charges fees to the merchant every time you make a purchase. These fees are a small amount per transaction, plus a portion of the transaction amount. These fees are higher for rewards cards. (For example, the fees might be 35 cents for a PIN-transaction on a debit card, or 35 cents plus 2 percent for an ordinary credit card or signature transaction on a debit card, or 35 cents plus 3.5 percent on a rewards card.) After considering all of their expenses, merchant profit margins are often quite small. To make the same amount of profit by serving a rewards-card customer as a cash customer, the merchant needs to sell higher profit-margin items and/or more items to the rewards-card customer. People who \"\"pay with plastic\"\" tend to spend more than people who \"\"pay with cash\"\". If you pay with a rewards card, will you spend even more?\"", "title": "" }, { "docid": "ef4425720fc7d104b359eb30f87b432a", "text": "In Canada, there are many stores that take debit (Interac) but don't take Visa or MasterCard. For example, a corner store. In the US the reverse is often true: every tiny place seems to take Visa or MasterCard, but not debit. A Visa debit card looks like a Visa card to the merchant. It therefore has the benefit of being usable at places that only take Visa. (Substitute MasterCard as necessary.) This benefit is very small in Canada, less so elsewhere. Meanwhile the money is actually coming out of your bank account just like a debit card, which therefore has the benefit that you're not borrowing money, can't accidentally overspend, and run no risk of incurring interest charges. It is also a way to get what appears to be a credit card when you can't qualify for credit. If you do the majority of your spending in Canada, you don't need a Visa or MasterCard debit card. Your regular debit card (Interac) will work fine for you. If you have a credit card anyway (from another bank or whatever) then again, you don't need a debit card that can pretend to be a credit card.", "title": "" }, { "docid": "0f2840a9a87b9e94321c55c5533ece66", "text": "Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example", "title": "" }, { "docid": "81df40145417627c24bdc2cd2b333f13", "text": "I once called Amex to cancel a card with an annual fee. Instead, they were able to give me a different card with no fee. They were happy to do it. Of course, Amex has fantastic customer service, while Capital One is not known for it. But, its worth a five minute call, and you will retain your good score.", "title": "" }, { "docid": "ac18f121ae9ec8c4697b03740588d5c8", "text": "Michael Pryor's answer is accurate to the actual question asked. The current accepted answer from Dheer is not entirely true but roughly provides an overview of the different entities involved in a typical transaction, with some wrong terminologies, corrected and improved below. The issuing bank, the one that issues the credit card to the customer. When it comes to the service fee split, the issuer bank takes on the majority of the cut in the service fee paid by the merchant to the different entities. For example, on a 2.5% overall fee paid by merchant, roughly 1.5% goes to the issuer, 0.3% goes to the card network (visa, master card, etc) and the remaining 0.7% goes to the acquiring bank. Reward programs have a partnership with participating merchants, where merchants are charged a higher service fee, for the likelihood of driving a higher volume of transactions to the merchant. A portion of the rewards also comes from the issuer, who shares a percentage of their fee back to the customer, in exchange for the same likelihood of making more profit through increased volume in total transactions. For example, a reward program may charge merchants 4.5% fee, with 3.5% of it going to the issuer. Upto 3% of this can be given back to the customer for their loyalty in using the card service. The banks can afford to take as little as 0.5% instead of their regular 1.5% due to the increased volume of transactions and the fixed fee they collect as membership fee. Note that costco has a similar business plan, but they make money entirely of membership fee. So with enough clients, banks can theoretically afford to run their program entirely on membership fees, costing no additional service fee to merchants. The service fee depicted above is arbitrary, and it can be lowered if the merchant is also a client of the issuing bank, that is, both the issuing bank and acquiring bank are the same. So it is kind of a win-win-win situation. And as usual, the banks can afford to make a larger income, if the customer ends up paying interest for their credit - although the rewards program is not designed accounting on this.", "title": "" }, { "docid": "dda027e4c7ce9e11a7a5ef7dee1ae84a", "text": "Kroger is the largest grocery chain in the U.S. and generally not seen as 'expensive'. Unless you are going to Aldi or Save-A-Lot, I don't think you are going to find anything 'lower priced'. You do know you don't have to provide real information when signing up for those cards, right? That's basically a non-issue.", "title": "" }, { "docid": "59c059e2ba0fce0f151b8282b6b3615a", "text": "It is not only merchants that charge for credit card purchases but also service providers. Have you looked at your phone bill lately and even your Council Rates. Most of them charge a small %, usually about 1% on Matercard and Visa, and closer to 2% on Diners, Amex and American Express cards. However, the merchants and service providers that do charge a fee for credit card use, must also provide alternative ways of paying to their customers, so that the customer has the choice to either pay or avoid paying this fee.", "title": "" }, { "docid": "1d0e3cb5d03fee6a794f1471c18fe1e8", "text": "Visa and Mastercard are not consumer-oriented companies. They do not consider individual consumers as their direct clients, and do not sell directly to them. Instead, their clients are financial institutions who participate in their networks (which is what they're selling). The institutions target the individual consumers (merchants and credit card holders). American Express, for example, has a different business model. AX doesn't only sell network services to financial institutions, but also services to individual consumers. You can get a AX credit card/merchant account directly with AX, or through their client bank.", "title": "" }, { "docid": "58798764a5f701a63768787f72841c06", "text": "Chip and Pin cards are popular in Europe, however in the US we don't have them. Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them. Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway).", "title": "" }, { "docid": "44af6e62a7fd75f9cf9513658df55b90", "text": "Trick question dude. Can't be done. Sorry to tell you. I've been hit with this. Credit card companies do not make money on these customers. Why does Amex have an annual fee on all cards and an abnormally large transaction fee for merchants? Because they don't allow you to carry a balance (On traditional cards). Meaning they don't make money on interest, like the customers in question here.", "title": "" }, { "docid": "85667121b3846596f582b1f99bfb2b23", "text": "\"At least in the US, one reason could be the \"\"liability shift\"\" that encourages adoption of chipped and contactless cards by shifting the fraud liability to the party that caused the transaction to not use chip-and-PIN / contactless payment: either the merchant (by not having a new compatible terminal) or the card issuer (by not providing the customer with a compatible card). This means the issuers will try to replace old, magnetic-only cards as soon as possible once adoption of the liability shift is certain. http://usa.visa.com/download/merchants/bulletin-us-participation-liability-shift-080911.pdf\"", "title": "" }, { "docid": "1c2e7a012cf98e72641115df9ad2d8bf", "text": "A few reasons make sense: They have a defined process for rentals, risk assessment, and customer credit. Especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. Such changes for a relatively small customer base might not makes sense. Many rental companies DO allow you to rent with a debit card. Why do some businesses take cash only? With a debit card, there is no third party guarantee. With a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. Even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. It is not surprising they view that as more risk and potentially not worth hassling with debit.", "title": "" } ]	fiqa
e062db6ad4c5cdf33091920626026b00	How do LLC losses affect personal income taxes in the US?	[ { "docid": "a87cca5fbc1756efd03f929a1e73182a", "text": "The short answer is yes, losses get passed through to members. Limits/percentages do apply, primarily based on your share in the business. Check out the final post in this thread: http://community2.business.gov/t5/Other-Business-Issues/Paying-oneself-in-a-LLC/td-p/16060 It's not a bad little summary of the profit/loss pass-through. Regarding your 60K/60K example: the amount of money you earn in your day job will impact how much loss you can claim. Unfortunately I can't find anything more recent at the IRS or business.gov, but see this from 2004 - 40K was the limit before the amount you could claim against started to be mitigated: http://en.allexperts.com/q/Tax-Law-Questions-932/tax-loss-pass.htm HTH", "title": "" } ]	[ { "docid": "662573bb6e4c7fa0c1481bfb27440a7f", "text": "An LLC is a pass-through entity in the USA, so profits and losses flow through to the individual's taxes. Thus an LLC has a separate TIN but the pass-through property greatly simplifies tax filings, as compared to the complicated filings required by C-corps.", "title": "" }, { "docid": "3888310130e7db43d4af9b3324cf9def", "text": "I think I may have figured this out but if someone could double check my reasoning I'd appreciate it. So if my company makes $75000 and I decide to pay myself a $30000 salary, then the quarterly payment break down would be like this: 1040ES: Would pay income tax on non salary dividend ($45000) 941: Would pay income tax, SS, medicare on salary ($30000) (I'm the only person on payroll) So I think this answers my question in that after switching from filing as LLC to S-corp, I won't have to pay as much on 1040ES because some of it will now be covered on payroll.", "title": "" }, { "docid": "78afcaa1e3f306174cdd0ed42651cd2e", "text": "how does a single employee LLC bring in 500k? I mean if you want to have it in a low-tax environment, you can probably invest it in something and then pull them out? I don't think you can put away pre-tax earnings to then use on salary costs.", "title": "" }, { "docid": "6b80141754cd9c7da3082116071ec001", "text": "\"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.\"", "title": "" }, { "docid": "a796f978c46d7d3f1d734ad37fd0d6cc", "text": "If you have no net income or loss, you can usually get away without filing a tax return. In Illinois, the standard is: Filing Requirements You must file Form IL-1120 if you are a corporation that has net income or loss as defined under the IITA; or is qualified to do business in the state of Illinois and is required to file a federal income tax return (regardless of net income or loss). http://tax.illinois.gov/Businesses/TaxInformation/Income/corporate.htm Just keep your filing fee and any business licenses up to date, paying those fees personally and not out of business money (that would make for a net loss and trigger needing a tax return). Frankly, with how easy it is to register a new corp, especially an LLC which has many simplicity advantages from an S-corp in certain cases, you might still be better off shutting it down until that time.", "title": "" }, { "docid": "f30a9ec107309670216d13a57dc49a7d", "text": "Well like a lot of stuff on money.stackexchange there is not a simple answer, but generally it is not a good thing. Take a look at the wikipedia entry on Net Operating Loss. Basically the company is commenting that when they do make money they will receive preferential tax treatment on that income. So whether or not this is a positive or a negative depends on a couple of things: NOL doesn't directly impact book value other than how the actual assets of the company changed over the previous quarter. I believe there is a 1:1 correspondence to how the assets change and NOL, but I am sure someone could clarify that for me in another answer or as a comment.", "title": "" }, { "docid": "2d258d9865dc769c64e985ecef06366c", "text": "1: Gambling losses not in excess of gambling winnings can be deducted on Schedule A, line 28. See Pub 17 (p 201). Line 28 catches lots of deductions, and gambling losses are one of them. See Schedule A instructions. 2: If the Mississippi state tax withheld was an income tax (which I assume it was), then it goes on Schedule A, line 5a. In the unlikely event it was not a state or local tax on income, but some sort of excise on gambling, then it may be deductible on line 8 as another deductible tax. It probably is not a personal property tax, which is generally levied against the value of things like cars and other movable property but not on receipts of cash; line 7 probably is not appropriate. The most likely result, without researching Mississippi SALT, is that it was an income tax. See Sched A Instructions for more on the differences between the types of taxes paid. Just to be clear, these statements hold if you are not engaging in poker as a profession. If you are engaging in poker as a business, which can be difficult to establish in the IRS' eyes, then you would use Schedule C and also report business and travel expenses. But the IRS is aware that people want to reduce their gambling income by the cost of hotels and flights to casinos, so it's a relatively high hurdle to be considered a professional poker player.", "title": "" }, { "docid": "547b4e9e1520ac085e0ddc41d12abe56", "text": "It sounds like something is getting lost in translation here. A business owner should not have to pay personal income tax on business expenses, with the caveat that they are truly business expenses. Here's an example where what you described could happen: Suppose a business has $200K in revenue, and $150K in legitimate business expenses (wages and owner salaries, taxes, services, products/goods, etc.) The profit for this example business is $50K. Depending on how the business is structured (sole proprietor, llc, s-corp, etc), the business owner(s) may have to pay personal income tax on the $50K in profit. If the owner then decided to have the business purchase a new vehicle solely for personal use with, say, $25K of that profit, then the owner may think he could avoid paying income tax on $25K of the $50K. However, this would not be considered a legitimate business expense, and therefore would have to be reclassified as personal income and would be taxed as if the $25K was paid to the owner. If the vehicle truly was used for legitimate business purposes then the business expenses would end up being $175K, with $25K left as profit which is taxable to the owners. Note: this is an oversimplification as it's oftentimes the case that vehicles are partially used for business instead of all or nothing. In fact, large items such as vehicles are typically depreciated so the full purchase price could not be deducted in a single year. If many of the purchases are depreciated items instead of deductions, then this could explain why it appears that the business expenses are being taxed. It's not a tax on the expense, but on the income that hasn't been reduced by expenses, since only a portion of the big ticket item can be treated as an expense in a single year.", "title": "" }, { "docid": "26d40b0256f72a945d5e165e43070be5", "text": "Is this possible and will it have the intended effect? From the US tax perspective, it most definitely is and will. Is my plan not very similar to Wash Sale? Yes, except that wash sale rules apply for losses, not gains. In any case, since you're not a US tax resident, the US wash sale rules won't apply to you.", "title": "" }, { "docid": "829ff126b899af4b65aa225ce89badc3", "text": "Lets just get to the point...Ordinary income (gains) earned from S-Corp operations (i.e. income earned after all expenses for providing services or selling products) is passed through to the owners/shareholders and taxed at the owner's personal tax rate. Separately, if an S-Corp earns capital gains (i.e. the S-Corp buys and sells stock, earns dividends from investments, etc), those gains are passed through to the owners and taxed at a capital gains rate Capital gains are not the same as ordinary income (gains). Don't get the two confused, they are as different for S-Corp taxation as they are for personal taxation. In some cases an exception occurs, but only when the S-Corp was formally a C-Corp and the C-Corp had non-distributed earnings or losses. This is a separate issue whereas the undistributed C-Corp gains/losses are treated differently than the S-Corp gains/losses. It takes years of college coursework and work experience to grasp the vast arena of tax. It should not be so complex, but it is this complex. It is not within the scope of the non-tax professional to make sense of this stuff. The CPA exams, although very difficult and thorough, only scrape the surface of tax and accounting. I hope this provides some perspective on any questions regarding business tax for S-Corps and any other entity type. Hire a good CPA... if you can find one.", "title": "" }, { "docid": "1679f0d2d26beadcd18ecfb9aa29f15e", "text": "What makes you think corporations don't have to pay sales taxes or property taxes (or excise taxes, or environmental impact fees or fuel taxes or any of a million other taxes that we all end up paying) even if they lose money that year?", "title": "" }, { "docid": "efa51fe7c17d14246a73d36a35151dd5", "text": "\"I would say similar rules apply in the US. If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut. If you are a \"\"real estate professional\"\", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a \"\"real estate professional\"\", then your rental income is considered a \"\"passive activity\"\" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation.\"", "title": "" }, { "docid": "fdb91a76bf86f804f924a640938d6f61", "text": "No there is no way to have untaxed earnings. Single Member LLC are taxed on your personal taxes. Partnership LLC is taxed on your and your partners personal taxes. An C-Corp LLC has its own tax bracket. An S-Corp is taxed on your personal taxes (but does not get taxed as self-employment taxes). At $500,000, YOU SHOULD BE AN S-CORP or C-CORP to save on self-employment taxes.", "title": "" }, { "docid": "3a04bc05ccd4edf6b243abc077a0204e", "text": "\"Nothing \"\"happens\"\" to it. It works the same way regardless of whether you are a U.S. citizen or resident or not. Taxes and penalties work the same way on withdrawal. That said, if you are not in the U.S. and don't have any income in the U.S. in a particular year in the future, you can take advantage of the fact that your U.S. tax that year will probably be zero. Then, if you withdraw a little bit, even if they count as taxable income, your U.S. income will still be so low that it may be under your personal exemption, or if not at least it will be taxed in the lowest tax bracket.\"", "title": "" }, { "docid": "ae579dcb50cc14bc3da84900f50b83ed", "text": "I'm no tax expert by any means. I do know that a disreagarded entity is considered a sole proprietor for federal tax purposes. My understanding is that this means your personal tax year and your business tax year must be one and the same. Nevertheless, it is technically possible to have a non-calendar fiscal year as an individual. This is so rare that I'm unable to find a an IRS reference to this. The best reference I could find was this article written by two CPAs. If you really want to persue this, you basically need to talk with an accountant, since this is complicated, and required keeping propper accounting records for your personal life, in addition to your business. A ledger creqated after-the-fact by an accountant has been ruled insufficent. You really need to live by the fiscal year you choose.", "title": "" } ]	fiqa
eb9c47c070f60b897b0dd30c02179c7b	Does Tennessee have anything like a principal residence exemption?	[ { "docid": "ac1b97ec9cf01ad9806026a42d373e8d", "text": "\"There's no homestead property tax exemption in TN. According to the TN comptroller site: Exemptions Exemptions are available for religious, charitable, scientific, and nonprofit educational uses, governmental property, and cemeteries. Most nongovernmental exemptions require a one-time application and approval by the State Board of Equalization (615/401-7883) and there is a May 20 application deadline. There is no \"\"homestead\"\" exemption, but low income elderly and disabled persons and disabled veterans may qualify for a rebate of taxes on a specified portion of the value of property used as their residence. Business inventories held for sale or exchange by merchants subject to the business gross receipts tax, are not assessable. Farm and residential tangible personal property are not assessable.\"", "title": "" } ]	[ { "docid": "7aab38b3269000319e156bc95984f607", "text": "http://www.irs.gov/publications/p936/ar02.html#en_US_2010_publink1000229891 If you still own it, you get to deduct all of it. In my taxes I did online with TaxAct, it asked if I lived there or not and it just mattered which form it filed for me. With having tenants it was a 'business' form and I assume it would be a standard schedule A for personal. Either way the deductions are still mine to take.", "title": "" }, { "docid": "90b272b16d3db982961db359ed6ecedc", "text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.", "title": "" }, { "docid": "a4f1ab12228c85e6c3040b624c4fac10", "text": "It sounds like you do. You earn money in NC, so that's where it is going to be taxed first.", "title": "" }, { "docid": "1cc573e29b794b2fb46d931192a4dacb", "text": "It's rare that you'd start to itemize before you have a house and the property tax and mortgage interest that brings. If your state has an income tax, that's first, but then you'll usually need far more in deductions to be over that standard deduction.", "title": "" }, { "docid": "3519245e2bbed46d3af790588ad319f8", "text": "There are a few loan programs that grant exceptions to bankruptcy requirements in the event of extenuating circumstances that can be proven to be outside of your control (i.e. massive medical bills that you used bankruptcy to settle, etc.) however, in order to make the case for this exemption, you would need to make a strong case for your solvency, shown the ability to re-establish your credit reputation since the discharge of your bankruptcy, and would almost certainly have to go through a bank that offers manual underwriting. Additionally, if you are Native American, the HUD-184 program is a great option for your situation as it allows for a wide latitude in terms of underwriter discretion and is always manually underwritten as there is no automated underwriting system developed for the loan program. There are several great lenders that offer nationwide financing (as long as you're in a HUD-184 eligible area) and would be a great potential solution if you meet the qualifying parameter of being Native American.", "title": "" }, { "docid": "896be0b7de9735410139e90a43cb3306", "text": "\"As an investment opportunity: NO. As a friendly assist with money you don't mind ever getting back, legal depending on amount. A few years back I was in the housing market myself and researching interest rates and mortgages. For one property I was very interested in, I would need about $4K extra in liquid cash to complete the down-payment. A pair of options I saw were a \"\"combo loan\"\" 15yr 4% interest for the house, 1yr 8% interest for the $4K. Alternately, the \"\"bank of mom and dad\"\" could offer the 4K loan for a much lower rate. The giftable limit where reporting is not required was $12,000 at the time I did the review. IRS requires personal loans to be counted as having interest at the commercial rate. Thus an interest free loan of $10K with commercial interest rate of 1% (for easy math) would be counted as a gift of $10,100 for that calendar year. Disclaimer: Ultimately, I did not use this approach and did not have it subjected to a legal review.\"", "title": "" }, { "docid": "da160fffe8072dca28be2c03e430316a", "text": "There's virtually no way for a person to completely avoid taxation at some point in their lives. Between payroll, sales, excise, and the like, you've been taxed at some point. And whether or not the individual paid is irrelevant to the ownership claim being invalid.", "title": "" }, { "docid": "28d9aa347dd6586e63001086f0a889da", "text": "California is very aggressive when it comes to determining residency. While you have a legitimate defense, I suggest talking with a California-licensed CPA or EA practicing in California, which are experienced in dealing with the FTB residency audits.", "title": "" }, { "docid": "a469fc5f2eb59808ad0a45d0d839b03e", "text": "Yes, all the house footage is treated the same. The use of home is a (suspected) audit trigger, so do consult with a tax professional if you want to take this deduction. From the statute (IRC Sec. 280A): The term dwelling unit includes a house, apartment, condominium, mobile home, boat, or similar property, and all structures or other property appurtenant to such dwelling unit.", "title": "" }, { "docid": "65bc5338bad575f4bc0169ee47ffdffd", "text": "The IRS demands and expects to be paid tax on all taxable activity, including illegal activity. If they expect drug dealers, hit men, and smugglers to pay tax, they expect you to pay tax on your basement apartment. The flip side of this is that the IRS keeps reported tax activities confidential. They only share what is required (for example, your taxable income with your state). You can read the details in their disclosure laws. Deductions will work just as they would if your apartment was perfectly legal. In the eyes of the IRS, whether your income is legal or not is none of their business. They care only about whether it is being taxed appropriately. They will not share any information with your zoning authority without a court order.", "title": "" }, { "docid": "551089afd5fcc946ab27a41a8ff485df", "text": "You need an accountant and/or a lawyer who is familiar with the US tax code and the rules in South Korea (assuming from your tag). As the interest will be money generated in the US, you could be required to withhold some of the interest and remit it to the IRS (I believe 30% withholding rate). Since South Korea is a treaty country, your friend can complete and sign a form W8-BEN and give it to you, so you may withhold a lower amount. Your friend would need to file a return if too much was withheld. They may also get taxed in South Korea. There are probably rules in South Korea about minimum interest that must be charged, similar to Applicable Federal Rates for the US, so check with your accountant or lawyer for this. If you craft it correctly, you will be able to have a loan as a mortgage (with the house properly secured), which then would allow you to deduct mortgage interest rates from your return. As far as I am aware, there is no maximum amount for loans.", "title": "" }, { "docid": "8ba0fc654895d48fb795dea7fe3b64af", "text": "Yes, use a separate Form 8829 for each home used for business during the year. The top of 8829 includes that exact instruction.", "title": "" }, { "docid": "6d70f2cae68608a83cef66fb85788404", "text": "@Pete B.'s answer is good, but there's an important note to consider for tax purposes. It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions. This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of: ... A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement.", "title": "" }, { "docid": "ae579dcb50cc14bc3da84900f50b83ed", "text": "I'm no tax expert by any means. I do know that a disreagarded entity is considered a sole proprietor for federal tax purposes. My understanding is that this means your personal tax year and your business tax year must be one and the same. Nevertheless, it is technically possible to have a non-calendar fiscal year as an individual. This is so rare that I'm unable to find a an IRS reference to this. The best reference I could find was this article written by two CPAs. If you really want to persue this, you basically need to talk with an accountant, since this is complicated, and required keeping propper accounting records for your personal life, in addition to your business. A ledger creqated after-the-fact by an accountant has been ruled insufficent. You really need to live by the fiscal year you choose.", "title": "" }, { "docid": "ee21749916f89670ecfa90cfb2e9c360", "text": "\"While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do I quantify the travel expenses? Generally, \"\"necessary and ordinary\"\" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say \"\"no\"\" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000 miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (\"\"pleasure\"\") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is \"\"business\"\" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the property? Although, again, the \"\"necessary and ordinary\"\" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA).\"", "title": "" } ]	fiqa
7efa5332535ee5ba82262394e1bd04e0	Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here?	[ { "docid": "6786bc955c5dbae56ff2fd03047f65da", "text": "\"The rent payment is in principle taxable. However, you should be able to take advantage of the \"\"rent a room\"\" scheme, and the proposed rent falls well under the £7,500/year tax threshold for that. So no tax will be actually payable and you don't have to formally declare it as long as you stay below that threshold. You should also be fairly well legally protected in case you do split up in future and you want to remove her. As you would be living there too, she would just be a lodger, not a tenant (technically, an \"\"excluded occupier\"\"). If you did want her to leave you would only need to give reasonable notice and wouldn't need a formal court order if you needed to force her to go. As JBentley points out, there have been court cases where domestic partners contributing to household expenses while the other partner paid the mortgage have later been able to claim that this implied joint ownership. This was on the basis of a \"\"constructive trust\"\" being implicitly setup by the way they arranged their finances. In your case, if there's a clear intention, formalised in writing, for the money to be treated as rent rather than a contribution towards purchasing the property, I think it should make it very hard to claim the contrary later. I would also suggest you be clear about whether the rent includes a share of the utility bills, and that things like groceries would be handled separately and split 50:50 or whatever. As pointed out in a comment, there are template agreements for lodgers you could use a starting point (e.g. this one), but it's likely you'd need to customise it to your circumstances. Another point made in another answer is that there's potential upcoming legislation to give some rights to cohabiting partners. In the current draft, those would kick in after three years or having children. If the bill does come into effect, you'd also be able to sign an opt out, but only after getting legal advice, and it would still be possible (though presumably hard) to persuade a court to overturn an opt out. Overall that does create a small risk to you, but not one that comes directly from your girlfriend paying rent. It's likely that if you are both on an equal financial footing and had always kept your finances separate, that there wouldn't be any award made anyway. And you can't run your entire life on hypothetical risks.\"", "title": "" }, { "docid": "533849b422ef3b33e57bd133c162eba5", "text": "\"With regard to worries about ownership: I'll point you towards this - The Cohabitants Rights Bill currently in First Reading at the House of Lords. Without a date for even the second reading yet. In short the Bill is attempting to redress is the lack of rights when a non-married relationship ends when compared to married relationships; that is that one of the \"\"cohabitants\"\" can end up with basically nothing that they don't have their name on. So currently you're in the clear and (Part 2) Section 6.2.a says the Bill cannot be used retroactively against you if your relationship is over before it becomes law (I expect with Brexit etc, this Bill isn't a high priority - it's been a year since the first reading). Section 6.2.a: This Part does not apply to former cohabitants where the former cohabitants have ceased living together as a couple before the commencement date; However, if you're still together if/when this Bill becomes Law then basically all of (Part 1) Section 2 may be relevant as it notes the conditions you will fall into this bill: Section 2.1.a: live together as a couple and Section 2.2.d: have lived together as a couple for a continuous period of three years or more. and the \"\"have lived together\"\" at that point counts from the start of your cohabitation, not the start of the Bill being law: Section 2.4.a: For the purposes of subsection (2)(d), in determining the length of the continuous period during which two people have lived together as a couple - any period of the relationship that fell before the commencement date (of the Bill) is to be taken into account If you have kids at some point, you'd also fall under 2.2.a through 2.2.c too. After that, the financial parity decided upon by the court depends on a whole bunch of conditions as outlined in the Bill, but Section 8.1.b is pretty clear: Section 8.1.b: (b)the court is satisfied either— (i)that the respondent has retained a benefit; or (ii)40that the applicant has an economic disadvantage, as a result of qualifying contributions the applicant has made I'm not qualified to say whether your partner helping to pay off your mortgage in lieu of paying rent herself would count as just paying rent or giving you an economic benefit. Sections 12, 13, and 14 discuss opt-outs, also worth a read. The a major disclaimer here in that Bills at this early stage have the potential to be modified, scrapped and/or replaced making this info incorrect. As an additional read, here's an FT article from Feb 2016 discussing this lack of rights of a cohabitant which should alleviate any current concerns.\"", "title": "" }, { "docid": "ae78b765445388e78ff43a789df3076b", "text": "\"Disclaimer: I am a law student, not a lawyer, and don't claim to have a legal opinion one way or another. My answer is intended to provide a few potentially relevant examples from case law in order to make the point that you should be cautious (and seek proper advice if you think that caution is warranted). Nor am I claiming that the facts in these cases are the same as yours; merely that they highlight the flexible approach that the courts take in such cases, and the fact that this area of law is complicated. I don't think it is sensible to just assume that there is no way that your girlfriend could acquire property rights as a rent paying tenant if arranged on an informal basis with no evidence of the intention of the arrangement. One of the answers mentions a bill which is intended to give non-married partners more rights than they have presently. But the existence of that bill doesn't prove the absence of any existing law, it merely suggests a possible legal position that might exist in the future. A worst-case assumption should also be made here, since you're considering the possibility of what can go wrong. So let's say for the sake of the argument that you have a horrible break up and your girlfriend is willing to be dishonest about what the intentions were regarding the flat (e.g. will claim that she understood the arrangement to be that she would acquire ownership rights in exchange for paying two thirds of the monthly mortgage repayment). Grant v Edwards [1986] Ch 638 - Defendant had property in the name of himself and his brother. Claimant paid nothing towards the purchase price or towards mortgage payments, but paid various outgoings and expenses. The court found a constructive trust in favor of the claimant, who received a 50% beneficial interest in the property. Abbot v Abbot [2007] UKPC 53, [2008] 1 FLR 1451 - Defendant's mother gifted land to a couple with the intention that it be used as a matrimonial home. However it was only put into the defendant's name. The mortgage was paid from a joint account. The claimant was awarded a 50% share. Thompson v Hurst [2012] EWCA Civ 1752, [2014] 1 FLR 238 - Defendant was a council tenant. Later, she formed a relationship with the claimant. They subsequently decided to buy the house from the council, but it was done in the defendant's name. The defendant had paid all the rent while a tenant, and all the mortgage payments while an owner, as well as all utility bills. The claimant sometimes contributed towards the council tax and varying amounts towards general household expenses (housekeeping, children, etc.). During some periods he paid nothing at all, and at other times he did work around the house. Claimant awarded 10% ownership. Aspden v Elvy [2012] EWHC 1387 (Ch), [2012] 2 FCR 435 - The defendant purchased a property in her sole name 10 years after the couple had separated. The claimant helped her convert the property into a house. He did much of the manual work himself, lent his machinery, and contributed financially to the costs. He was awarded a 25% share. Leeds Building Society v York [2015] EWCA Civ 72, [2015] HLR 26 (p 532) - Miss York and Mr York had a dysfunctional and abusive relationship and lived together from 1976 until his death in 2009. In 1983 Mr York bought a house with a mortgage. He paid the monthly mortgage repayments and other outgoings. At varous times Miss York contributed her earnings towards household expenses, but the judge held that this did \"\"not amount to much\"\" over the 33 year period, albeit it had helped Mr York being able to afford the purchase in the first place. She also cooked all the family meals and cared for the daughter. She was awarded a 25% share. Conclusion: Don't make assumptions, consider posting a question on https://law.stackexchange.com/ , consider legal advice, and consider having a formal contract in place which states the exact intentions of the parties. It is a general principle of these kinds of cases that the parties need to have intended for the person lacking legal title to acquire a beneficial interest, and proof to the contrary should make such a claim likely to fail. Alternatively, decide that the risk is low and that it's not worth worrying about. But make a considered decision either way.\"", "title": "" }, { "docid": "92e9ecee4cfbe3d7f5e2c7f590b1635b", "text": "\"Edit #2 My whole answer was based on my misunderstanding that you were renting out a totally separate property to your girl friend. I finally understand now that you're renting out a room in YOUR apartment flat to your gf. So, based on my new understanding, I don't think it's necessarily a bad idea. The answer below is my answer to a different question ;) Original Answer My answer has nothing to do with business, but is totally relationship based. If you care about her in a \"\"we might be together a long time\"\" way, then I wouldn't do this. I don't care what arrangements you setup before hand, at some point, you're bound to feel like she owes you something at some point. Let alone the easiest of situations to imagine (she's late on the rent, she loses her job and can't pay, etc) you'll be forced to make decisions about how much your desire to love and care for her outweighs your need to pay your mortgage. You can argue how magnanimous your are all day long, but is this something you want to bring into your relationship? Now, if you don't really care to stay with her that long and you could do life with or without her, then go for it. I think the big question is, is your relationship worth £200? Edit In the interest of supporting my opinion, here are a few articles I found on the subject: Unfortunately, the way renting to friends or family often works out is far from what would be expected between people who care about one another. For the most part, friends and family members will actually make bad renters, because they’ll expect more from you than a tenant who doesn’t know you. You may get a lot of requests for maintenance and repairs, even for minor things, and you may also find that family members and friends think they should be entitled to perks because of your personal relationship with them. When they don’t get special treatment, they can get angry with you, and that hurts both your professional relationship and your personal relationship. American Apartment Owners Association \"\"In my experience, landlords renting to relatives doesn't work out perfectly,\"\" said Ceyhun Doker, a REALTOR® associate at Keller Williams Realty in Burlingame, CA. \"\"When you don't know each other, there are fewer problems.\"\" realator.com\"", "title": "" }, { "docid": "d1ff3cee0decc25182c465a797af4a69", "text": "\"If you are living together 'casually' (no formal partnership agreement) then my option would be to ask her politely to as she has offered make a contribution by buying the groceries or some such which you share. A 'voluntary contribution' not an enforceable one. Just as between flat mates where only one is the actual tenant of the flat but the tenancy allows 'sharing' . Check your tenancy allows you to share lodgings. PS An old Scots saying is \"\"never do business with close family\"\". I.e do not charge your wife or living in partner rent. It mixes emotional domestic life with a formal business life which can set feuds going in case of a break up or dispute. If you enter into child bearing relationship or parent hood or formal partnership or marriage then all this changes at some time in the future.\"", "title": "" }, { "docid": "77db79bc713af652e61e44c5c4c3506a", "text": "I have been renting rooms out of my house for over 7 years now. When renting to non-family, the arrangement is usually successful. People leave for various reasons, an occasionally I will ask someone to move out if they are not working out. In the USA, this works well because by keeping things formal (rental agreements, etc) you actually have a great business with lots of deductions that end up reducing you net income quite a bit. However, US law makes a big distinction about whether or not you're renting to family/relatives, specifically around whether or not they are paying full-market rent for their room. If not, then you are subsidizing them which could disqualify your property (or at least the portion they are using) from being legitimately rented -- and thus no tax deductions for said activity. The other risk, -- again, in the USA -- is the possibility of a long-term relationship falling under rules of common-law marriage. This is rare unless children are involved. A couple who have children, married or not, may have the courts get involved to oversee the division of assets with regards to ensuring the children have a place to live and adequate financial support. For the UK, I would think the laws would be roughly similar. Check out this website for more a detailed review. https://www.citizensadvice.org.uk/family/living-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences/", "title": "" } ]	[ { "docid": "5379e3edcfed336432b98afdd0b7da9e", "text": "Equity means having ownership, and I think that's a REALLY bad idea in the scenario that you described. If you stay together, there's really no upside to either of you in this scheme. If you break-up then you'll have a terrible mess, especially if the break-up goes badly. If she's really building equity, you're going to be faced with several hard questions: If this went bad at the end, it might be worse than a divorce in some sense since at least in the divorce you have established law to sort out the issues. You'll be on your own here without a formal contract. (Marriage being a special case of a contract for our purposes here.) If she wants to share costs (which seems perfectly fair) then agree to rent and a split on utilities. If you really insist on going down the path that you described, I think that you'll need some sort of contract, which probably involves a lawyer. Anything short of that could not be considered having equity at all and will be completely unenforceable in the event of a bad break-up. (There is some notion of a verbal contract, but that's very hard to prove and subject to misunderstanding and misremembering.) Aside from all of these potential problems in event of a break-up, you would probably also be violating the terms of your mortgage, if you have one. From the bank's perspective, you are selling the property that is the collateral for that loan, which you're almost surely not allowed to do.", "title": "" }, { "docid": "6d70f2cae68608a83cef66fb85788404", "text": "@Pete B.'s answer is good, but there's an important note to consider for tax purposes. It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions. This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of: ... A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement.", "title": "" }, { "docid": "e358964ef4d8854056def7c4295833a4", "text": "\"Sheesh, are people kidding here? It's a gift. It's not fraud. Just keep in mind that, because it's a gift, you cannot get it \"\"back\"\" if you break up--you are giving it to her. If you happen to get married at some point in the future, you will then own part of the apartment, but that is a completely separate matter. Give her the money, don't expect it back. Ever.\"", "title": "" }, { "docid": "67fc6e66cbc207b055bcc40eee9d8143", "text": "\"Expenses: IMO, The best way to deal with this situation is by treating you staying at her house as flatting/renting a room as @Pseudonym stated he does with his partner in the comments of another answer. This means you pay X amount of dollars a week to her as rent which she can most likely choose to put it towards house insurance, interest, repayments, repairs and improvements etc etc. From there you split your \"\"living\"\" expenses 50/50. Living expenses include stuff like telephone, internet, utility bills, food, contents insurance etc. Renting Income: Then the earnings/losses you make from renting your apartment out are yours alone. After all if your place gets trashed by a tenant with a meth lab, she won't and shouldn't have to pay the ridiculous amounts of money required to get it fixed up. Determining the rent to pay: Not Ideal, but an easy method: Use your place's renting value as a indicator/market research example to determine how much rent you would pay to her (however since you are only a half resident at her place you would only pay half). Ideal: Your place would have a different renting value to hers, so do some research together and find a median renting value of her house based on similar houses or ask her how much she wants you to pay in rent since after all the owner of the house has final say on the renting value. You \"\"might\"\" want to consider that you staying with her is a more secure tenancy as she knows you won't wreak her place, but the same cannot be said for the tenant you have in your place. (Post in the comments if you think this last sentence should be removed, I'm on the fence about it but it seems relevant.) Disclaimer: Remember you are considering a long-term relationship with her don't get too picky and don't let it get personal/emotional when deciding the renting amounts.\"", "title": "" }, { "docid": "cdfe549e223d987b50180c7313a44aa3", "text": "The simplest way to handle this is for you to rent the apartment and sublet to the girlfriend and friend. I'd split the utilities evenly, one-third from each. The reason for this is that each of you contribute evenly to generating the utility bills. It's not like your income makes the water cost more for you. Utilities are driven by usage. Dividing them other than equally is likely to lead to more problems than it solves. Also, it seems unlikely that a different apartment would use significantly different water, electricity, or internet. Those are driven by the appliances rather than the size or location of the apartment. Only pay more for the utilities if you want something that they don't. For example, maybe you want HBO, etc. It would be reasonable for you to pay the entire premium if that's a luxury that they simply wouldn't buy. I'd also divide the groceries evenly if you share and share alike. If you eat separate meals, you can buy separate groceries. If the rent can't be split evenly but you could afford it alone, then you can just sign up for it. If you break up with the girlfriend and/or the friend moves out, you're still fine. You have your fancy apartment and can afford it. The bigger problem comes if you can't afford the apartment without both the girlfriend and friend contributing. If so, you should probably avoid this situation. It's fragile. Any person leaving would put you in a financially untenable position. You can look for a new tenant to replace your friend, but you can't exactly rely on getting a new move-in girlfriend on demand. Neither the girlfriend nor the friend can afford to be on the main lease. In case of emergency or tragedy, they couldn't replace you as a tenant. That's why they should sublet. Then their obligation is to you, not to the landlord. How much apartment would the girlfriend and friend get if you weren't involved? What rents would they pay? That's probably how much rent they should pay for this apartment. You want a better apartment (or a better location)? That's on you. You should only do this if you want to do it. If you want to share apartments with the girlfriend and friend, then do so. Work out something equitable. If you plan on moving in together to reduce your costs, then you don't sound like you are compatible. Obviously there are reasons to move in with the girlfriend aside from costs. Why can't the friend get his or her own place? The added rent probably won't do more than pay for the added room (you could get a one bedroom without the friend). That points to an alternative way of calculating the friend's contribution: the difference between a two bedroom and a one bedroom apartment. That's the additional cost of the bigger apartment. If the friend can't afford that, then this might not be a good idea. Make sure that you can afford the apartment if one or both of the friend and girlfriend move out. You can eventually replace the friend as the tenant but don't rely on doing the same with the girlfriend. Share utilities evenly. Possibly groceries too. The friend should pay at least the added cost of the additional bedroom. Don't expect either to pay more in the new apartment than they would pay without you. You should be the only one on the main lease; sublet to them.", "title": "" }, { "docid": "68922f8b7da11e444b92f686b6ced412", "text": "Unlike others who have answered the question - I have done this. Here is my experience - your mileage and friendship may vary: I bought a condo years ago with a longtime childhood friend. We did it for all the reasons you mentioned - sick of renting and not building equity, were both young, single professionals who had the money. The market crashed we have both since married and moved on to own other properties with our spouses. Now we rent out the condo as selling in the current market is not doable.. It's not an ideal situation but that is because of the real estate market - not who I bought with. You need to discuss very openly all of the following scenarios, as well as others I can't think of right now I am sure: If you aren't both 100% in sync with these questions then do not do it. I never understand why some people would buy with a girlfriend/boyfriend but not a good personal friend. You're more likely to have a falling out with your significant other then a long time close friend. My advice, have honest, open conversations, about all possible scenarios. If you feel necessary put somethings down into some sort of legal agreement - with us it was not, and still isn't necessary.", "title": "" }, { "docid": "3c0a842e6d4c055a20cee1ebfe6a3b1d", "text": "\"You're making $100k together per year: you're not in the donut hole, you're in the top 25% of all households, and the top 10% of non-family households (as yours would be). To be blunt, you're not in the \"\"rely on assistance\"\" area: you're in the \"\"save up for your downpayment\"\" sector. My suggestion would be to figure out a way to save more than $200-$400 a month for now. $100k gross income means you have about $8k net income per month; $2k for rent and other necessities means you have $6k per month that you can potentially save. Even half of that - $3k per month - means you have $24000 saved by the end of this year, and $36000 on an annual basis. As far as marriage or domestic partnership - I wouldn't get into one based on whether it helps you afford a home. It might be a good idea because it helps you handle some of the details arising when you have joint property, perhaps, but not solely for the financial aspect. And as far as how much home is realistic? $250k is certainly realistic if you can save up enough for a good down payment. Try to get to the 20-25% range. If you're already halfway there, another year of renting won't kill you, and it will mean no PMI and much better rates. Also consider a 15 year mortgage; we're in the same general income category as you and manage a 15 year on a $250k range house quite nicely. It doesn't add all that much to your monthly payment amount, compared to what you'd expect - particularly since the monthly payment includes property taxes which won't increase based on the length of the mortgage. Now that we have actual numbers from the OP: So, without cutting anything, you have $2k yourself you can be saving. (This assumes your rent number of $1345 is your portion of rent, and not the 100% amount.) That's $24000 per year, just by yourself. On top of that, you've got another $40k or so coming from your partner, at least some of which should be available as well if he/she is going to be co-owning? But if not, at least you have about $2000 a month you can be saving. You could also downsize the car, cut cable TV, downsize the phone, and have another $500 or so available - but it doesn't really look like you need to do that, given how much you have available now. I'd look at what you're doing with that ~$2000 per month right now, and see how you can free most of it up. You haven't mentioned a few things like utilities, not sure if that's just forgetfulness or if your partner is paying them; so perhaps not all of it is available. But - even $1000 a month is $12000 to add to the $20000 you have now, which makes a big dent in that down payment.\"", "title": "" }, { "docid": "419c9242f195bf26a718bf4e307dc73d", "text": "You are thinking about this very well. With option one, you need to think about the 5 D's in the contract. What happens when one partner becomes disinterested, divorced (break up), does drugs (something illegal), dies or does not agree with decisions. One complication if you buy jointly, and decide to break up/move, on will the other partner be able to refinance? If not the leaving person will probably not be able to finance a new home as the banks are rarely willing to assume multiple mortgage risks for one person. (High income/large down payment not with standing.) I prefer the one person rents option to option one. The trouble with that is that it sounds like you are in better position to be the owner, and she has a higher emotional need to own. If she is really interested in building equity I would recommend a 15 year or shorter mortgage. Building equity in a 30 year is not realistic.", "title": "" }, { "docid": "0c2838624733017e3b4fd0b74a966f5d", "text": "There is no issue whatsoever, getting a mortgage this way as an unmarried couple. This is very similar to what I did while my wife and I were engaged. We we're on the title as joint tenants. I would expect them to have her as a signee to the mortgage. She won't be able to claim 50% ownership and make things hard on the lender. The title will be contingent on the mortgage being paid. What will be harder is if you guys decide to split. It's not at all uncommon for unmarried couples to buy a house together. Find a broker and get their advice.", "title": "" }, { "docid": "024f190b764183dc722c34c4360e0f90", "text": "The mortgage and title of the house would be under both your names equally. When I applied for a mortgage with my girlfriend, I was the primary applicant because of my credit score and she was the secondary because of her income (she makes more). When all was said and done, it was explained to us that the mortgage was ours equally and so was the house, and that I didn't hold more ownership than her over either. We were approved quickly and hassle free. This is our first house too. This is in Florida.", "title": "" }, { "docid": "146939b11f6b5588c7c46d9512c63c47", "text": "what I should think about. If you decide to do this - get everything in writing. Get lease agreements to enforce the business side of the relationship. If they are not comfortable with that much formality, it's probably best not to do it, I'm not saying that you should not do this - but that you need to think about these type of scenarios before committing to a house purchase.", "title": "" }, { "docid": "5a40eee5445e687b0de14606db987a66", "text": "Well, it sounds like you have two options: 1) Continue to jointly own the house. 2) Compensate her for her equity and get the title transferred. I hate to tell you this, but she is entitled to half of the equity regardless of how much she paid into it. That said, she is still on the hook equally for the loan amount, but it won't do you any good if she is not willing to pay. Also, option 2 probably isn't a good deal for your co-signer as she would still be liable for the entire loan loan (just as you are) regardless of the title.", "title": "" }, { "docid": "8226861e999d5309617e09affbc81fb2", "text": "\"It's a little unusual, but I don't think the financial terms are completely unreasonable on their face. What you describe is similar to an interest-only loan, where you make payments that only cover the interest due each month, and the entire principal is due as a single \"\"balloon payment\"\" on a specified date (in this case, the date on which the condo is sold). Your monthly payment of $500 on a principal of $115K is equivalent to an annual interest rate of 5.22%, which at least is not completely usurious. With a traditional mortgage you might pay a rate as low as 3%, if you had sufficient income and excellent credit - but I don't know, from what you've said, whether that's the case. Did you make the current arrangement because you were unable to get a loan from a bank? The main difference here is that instead of the balloon payment being a fixed $115K, it's \"\"75% of the gross proceeds of the sale\"\". If the condo eventually sells for $155K, that would be $116,250, so that's slightly advantageous to them (assuming that \"\"gross proceeds\"\" means \"\"before deducting commissions for either the buyers' or sellers' realtors or any other costs of the sale\"\"), and thus slightly disadvantageous to you. If the condo appreciates in value, that's more of a win for them and more of a relative loss for you. But it's also possible that the value of the condo goes down, in which case this arrangement is better for you than a fixed balloon payment. So this deal does prevent you from getting a larger share of any gains in the value of the property, but it also helps insulate you from any losses. That's important to keep in mind. There's also the issue of needing their consent to sell. That's potentially problematic - usually in a joint ownership scheme, either owner has the right to demand to be bought out or to force a sale. I guess it depends on whether you think your parents would be likely to consent under reasonable circumstances, or to insist on holding the property against your best interests. It's true that you aren't building equity with this arrangement, and if you thought you were, you are mistaken or misled. But let's compare it with other options. If you would qualify for a traditional 30-year fixed mortgage at 3%, your monthly payment would be slightly lower ($484), and you would be building some equity because your payments would reduce the principal as well as paying the interest. But a 30-year loan builds equity very slowly at first - after 7 years you'd have only about $20,000 in principal paid down. If we assume that 5.2% represents the interest rate you'd otherwise pay based on your creditworthiness, then your monthly payment would be $631. So compared to that, you have an extra $130 per month that you can save or invest in whatever you want - you're not forced to invest it in your house. Note that in either case you'd still be paying the condo fees, property taxes, insurance, and maintenance yourself. So we might as well eliminate those from consideration. It might be a good idea to find out what other options you would have - perhaps try to get an interest rate quote on a traditional mortgage from a bank, based on your income and credit history. Then you can decide what to do, taking into account: your financial situation; how much of a monthly payment could you afford? your relationship with your parents; are they likely to be reasonable about renegotiating? Do they in general tend to respect your wishes? Would it harm your relationship if you tried to get out of the deal, and how important is that to you? To what extent do you actually want to pay for equity in this property? Do you really believe it's a good investment, and have evidence to support that? Your options include: Try to renegotiate the terms of the loan from your parents Try to \"\"refinance\"\" the loan, by getting a loan from a bank and paying off some agreed-upon amount of principal to your parents Try to force the sale of the condo and move to another house, financing it some other way Consult a lawyer as to whether your agreement with your parents is legally enforceable. For instance, do they have a lien on the property?\"", "title": "" }, { "docid": "13ab27f6adec8293954d5fffd3caaefc", "text": "Quite a bit as in, $100K+? If you're a sole operator, not sure what constitutes a real likelihood that a risk of liability will materialize, and in need of a lot of up front financing, I am genuinely concerned that you're going to a lay a giant egg on this one. What is it your business is going to be doing? I don't really want to give a free consultation, but I'm worried you're either misunderstanding something or about to make a mistake, and I don't want to see that happen.", "title": "" }, { "docid": "a1b4b169ac98e5ea279f867e2cdeb691", "text": "No. And just a caution about that super low risk: suppose that you lived during the late 70s and early 80s, when savers in the United States could get interest rates over 10% for savings. You put your money into an account in 1980, knowing that in five years, you'll have made a solid amount of interest. Except that you might have been smarter to convert your money to AUD and save in that currency because it would have moved from 0.88 in value to 1.43 in value (in principal only, not interest - when I look at the RBA's bank interest, it appears they were also paying double digit interest to savers). Now, I get that this may not be the answer that you want to see because it means that if the interest rates were higher in the US, for savers, they might be higher elsewhere too, and it also means that what may appear to be a super low risk could actually be a high risk.", "title": "" } ]	fiqa
9d0b11a59c90156f686d00b1d2bb5cfb	Why do car rental companies prefer/require credit over debit cards?	[ { "docid": "fbb06dfe9438008cec5777b6f5f7541c", "text": "A hotel can accept the debit card because each night they can withdraw the money. If you don't have sufficient funds they can instantly lock you out of your room. They an also limit your ability to access room service, and other extra expensive options. The rental car can't do that once you have the car. Plus they never know if you will bring the car back with damages, toll charges, and an empty tank of gas.", "title": "" }, { "docid": "7b66fd4860d6465b06aeccfdb814d3cd", "text": "Deposit on a Debit Card have a different effect, and many people don't understand it (and make a big stink), or cannot afford it (or both). Either of it results in lots of trouble for the business: In addition, having a credit card showes that some bank trusts the customer with an unsecured credit of this height, which is some reassurance for the business. A debit card proves only that he was able to get a checking account, which needs much less liquidity and stability.", "title": "" }, { "docid": "29e5364098ed267e8d58e3f0f938a9e2", "text": "People with credit cards tend to have better credit than those who only have debit cards. People with better credit tend to not abuse such things as car rentals. It costs money for any company to run your credit. It doesn't cost a rental company any outflow of money to reject debit cards. So the possession of a credit card becomes a stand-in for running your credit before you rent a car.", "title": "" }, { "docid": "f34d15ac316ea041a8bbb7aad7fce72c", "text": "I am not sure if this is the actual reason or not, but all of the major credit cards (Visa, Mastercard, Amex, Discover) provide damage insurance coverage on car rentals. Debit cards do not usually provide this coverage. So, if you use a credit card, the car company knows it will be able to recover the cost of any damage to the car. Of course, this doesn't explain some of the odd debit card policies out there. For example, Alamo will not let you use a debit card unless you provide proof of round trip travel (like a plane or cruise ticket). But you can use a credit card without having a travel ticket. I'm not sure how having a travel ticket makes debit card users less of a risk, but apparently it does somehow.", "title": "" }, { "docid": "1c2e7a012cf98e72641115df9ad2d8bf", "text": "A few reasons make sense: They have a defined process for rentals, risk assessment, and customer credit. Especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. Such changes for a relatively small customer base might not makes sense. Many rental companies DO allow you to rent with a debit card. Why do some businesses take cash only? With a debit card, there is no third party guarantee. With a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. Even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. It is not surprising they view that as more risk and potentially not worth hassling with debit.", "title": "" }, { "docid": "0e1a2504957df50813c4e180e1d4ba47", "text": "I have looked at the conditions of a car rental company, and I believe it provides the answers: Upon pick up of your vehicle, you must present a valid credit card () used to make the booking and which must be in the driver´s name. If you do not have a valid credit card we will accept your debit card when you pick up your vehicle. However, as we cannot reserve credit to cover the potential damage or refueling costs, you will need to take SuperCover and a fuel tank of fuel at the start of the rental. We will refund the value of the unused fuel at the end of the rental unless otherwise agreed with you. () VISA, MasterCard and American Express are accepted. Credit card or Third Party Insurance IMPORTANT: In case of damage, we will charge you the incurred amount up to the excess. You will then need to reclaim this amount from the provider of the credit card or third party insurer. We strongly recommend that you fully read and understand the terms and conditions of any cover provided by your chosen provider before you decline any of our optional services. Without our SuperCover, should you damage the vehicle during your rental period, we will charge you the corresponding amount up to the excess, regardless of whether you can subsequently reclaim this amount from the provider of the credit card or the third party insurer. In the event you would like to dispute any of the above mentioned charges you should send your request by mail or email to the Firefly location state on your rental agreement. https://global.fireflycarrental.com/qualifications-ES.html From that, we can conclude that : It's likely that disputes with customers in case of damage cost a lot to car rental companies, and for the 2 above reasons, demanding a credit card may alleviate it.", "title": "" } ]	[ { "docid": "3eceb7f45d453ce6dae1a02a88cab370", "text": "\"I worked for a major car rental company (not Hertz, but comparable) for quite a while, taking reservations by phone. I completely agree that the reservation system is terrible, and is only vaguely based on the reality of their vehicles in stock at best. The problem is, from a strictly business perspective, taking more reservations than they have cars is currently considered the most profitable model for them. To play devil's advocate just a little, switching to a \"\"take only one reservation per vehicle, reserve it to 100% lock it in\"\" model is a bit more complicated than it sounds. In order to guarantee a specific car for a customer at a specific time, they either have to leave that car sitting on their lot until you rent it (not making money), or keep renting it out to other people in the interim. If they rent it out to someone else before your rental comes up, that removes the vehicle from their control. Bordering on constantly, renters don't return the vehicle within their promised schedule or return it in a damaged or otherwise unsuitable condition. To be clear I'm not trying to make excuses for the rental car company (there are many reasons I no longer work there), but it's objectively hard for them to get a specific vehicle if, say, all but one of them were in wrecks the previous night, and the person renting the last one drove it across the country without warning the rental office and refuses to come back. Those problems all get solved eventually, but that doesn't help you when you show up and can't get the car you reserved. So, they continue to take excessive reservations, and just give people whatever they happen to have when they show up, if they have any cars at all. There's definitely better ways to do it for the customer, but like many businesses, they'll continue to do it whatever way they determine is best for their profits. Edit: Words.\"", "title": "" }, { "docid": "0bdd3abd6181a60196411e1ecab04972", "text": "Credit cards are a golden goose for banks, as they get to issue high-interest loans and simultaneously generate alot of fee income. Debit cards aren't quite as good, but they still generate substantial fee income -- ~2% of every credit/non-PIN debit transaction goes to the bank and credit card network. Credit histories exist because they are the most effective tool available to predict whether you will pay back your loans or not. You don't need a credit history to buy most things, you need a credit history to get a large loan. Think of it from perspective of a lender: Credit scoring is the bank's way screening out people who are expensive to do business with. It's objective, doesn't discriminate on the basis of race, sex or other factors, and you have recourse if the rating agencies have incorrect information.", "title": "" }, { "docid": "5b341f79c0872469203a249e72a7f18f", "text": "\"These are two different ways of processing payments. They go through different systems many times, and are treated differently by the banks, credit card issuers and the stores. Merchants pay different fees on transactions paid by debit cards and by credit cards. Debit transactions require PIN, and are deducted from your bank account directly. In order to achieve that, the transaction has to reach the bank in real time, otherwise it will be declined. This means, that the merchant has to have a line of communications open to the relevant processor, that in turn has to be able to connect to the bank and get the authorization - all that while on-line. The bank verifies the PIN, authorizes the transaction, and deducts the amount from your account, while you're still at the counter. Many times these transactions cannot be reversed, and the fraud protections and warranties are different from credit transactions. Credit transactions don't have to go to your card issuer at all. The merchant can accept credit payment without calling anyone, and without getting prior authorizations. Even if the merchant sends the transaction for authorization with its processor, if the processor cannot reach the issuing bank - they can still approve the transaction under certain conditions. This is, however, never true with debit cards (even if used as \"\"credit\"\"). They're not deducted from your bank account, but accumulated on your credit card account. They're posted there when the actual transaction reaches the card issuer, which may be many days (and even many months) after the transaction took place. Credit transactions can be reversed (in some cases very easily), and enjoy from a higher level of fraud protection. In some countries (and most, if not all, of the EU) fraudulent credit transactions are never the consumer's problem, always the bank's. Not so with debit transactions. Banks may be encouraging you to use debit for several reasons: Merchants will probably prefer credit because: Consumers will probably be better off with credit because:\"", "title": "" }, { "docid": "c8f019a27ed05f78e83063182b5f864b", "text": "In Addition to @JoeTaxpayer's answer, in the UK credit cards offer additional protection than if you were to pay by debit card. This includes (but is not limited to) getting your money back if the company you've bought something from goes bust before your order is complete.", "title": "" }, { "docid": "9e88c6e1c6c8ea228540df3db741c995", "text": "\"You ask about the difference between credit and debit, but that may be because you're missing something important. Regardless of credit/debit, there is value in carrying two different cards associated with two different accounts. The reason is simply that because of loss, fraud, or your own mismanagement, or even the bank's technical error, any card can become unusable for some period of time. Exactly how long depends what happened, but just sending you a new card can easily take more than one business day, which might well be longer than you'd like to go without access to any funds. In that situation you would be glad of a credit card, and you would equally be glad of a second debit card on a separate account. So if your question is \"\"I have one bank account with one debit card, and the only options I'm willing to contemplate are (a) do nothing or (b) take a credit card as well\"\", then the answer is yes, take a credit card as well, regardless of the pros or cons of credit vs debit. Even if you only use the credit card in the event that you drop your debit card down a drain. So what you can now consider is the pros and cons of a credit card vs managing an additional bank account -- unless you seriously hate one or more of the cons of credit cards, the credit card is likely to win. My bank has given me a debit card on a cash savings account, which is a little scary, but would cover most emergencies if I didn't have a credit card too. Of course the interest rate is rubbish and I sometimes empty my savings account into a better investment, so I don't use it as backup, but I could. Your final question \"\"can a merchant know if I give him number of debit or credit card\"\" is already asked: Can merchants tell the difference between a credit card and embossed debit card? Yes they can, and yes there are a few things you can't (or might prefer not to) do with debit. The same could even be said of Visa vs. Mastercard, leading to the conclusion that if you have a Visa debit you should look for a Mastercard credit. But that seems to be less of an issue as time goes on and almost everywhere in Europe apparently takes both or neither. If you travel a lot outside the EU then you might want to be loaded down with every card under the sun, and three different kinds of cash, but you'd already know that without asking ;-)\"", "title": "" }, { "docid": "c35962088635faf13f84983276ec6936", "text": "I haven't had a credit card in fifteen years. I use nothing but my debit card. (I find the whole idea of credit on a micro scale loathsome.) I have yet to encounter a single problem doing so, other than a lower than usual credit score for not keeping 23(!!!) revolving lines of credit open, or that's the number CreditKarma tells me I need in order to be an optimal consumer. In an nutshell, no, you don't NEED one. There are reasons to have them, but no.", "title": "" }, { "docid": "c0b0f2a8a8ad5213aec82f7c592e9d45", "text": "Debit cards with the Visa or Mastercard symbol on them work technically everywhere where credit cards work. There are some limitations where the respective business does not accept them, for example car rentals want a credit card for potential extra charges; but most of the time, for day-to-day shopping and dining, debit cards work fine. However, you should read up the potential risks. A credit card gives you some security by buffering incorrect/fraudulent charges from your account, and credit card companies also help you reverse incorrect charges, before you ever have to pay for it. If you use a debit card, it is your money on the line immediately - any incorrect charge, even accidential, takes your money from your account, and it is gone while you work on reversing the charge. Any theft, and your account can be cleaned out, and you will be without money while you go after the thief. Many people consider the debit card risk too high, and don't use them for this reason. However, many people do use them - it is up to you.", "title": "" }, { "docid": "4571505cd5e76a598b1090e109add091", "text": "\"A lot of credit card companies these days uses what they call \"\"daily interest\"\" where they charge the interest rate for the number of days till you pay off what you spent. This allows them to make more money than the \"\"period billing\"\". The idea of credit, theoretically, is that there isn't really a day when you can borrow without paying interest - in theory\"", "title": "" }, { "docid": "ccd9c4730192f7cd2f124af4769cec68", "text": "Many small businesses are still cash and check. For example my landlord does not take credit card or online transfer. My choices are cash and check, and I prefer checks for the paper trail.", "title": "" }, { "docid": "0d1b5fd24a8e63382d7e89adc5f8419e", "text": "How you can pay your rent is really up to your landlord. They are, however, unlikely to take a credit card, for at least two reasons. Firstly they are unlikely to have the means to take electronic payment Second, and more importantly, merchants get charged a percentage of the transaction. These fees can be quite high to them for premium cards like travel and gold cards; three, four or even five percent of the value of the transaction. This is sometimes why you see cash discounted pricing.", "title": "" }, { "docid": "23f69c6eab821c50c9174ecd592240a8", "text": "I thought this was because credit card companies charge the retailer a fee to accept credit card payments. If you spend $100, the retailer pays $1 (or whatever percentage they have negotiated) to the credit card provider. Handing over $100 cash and paying $1 fee to Visa means a loss to the retailer. The same transaction on $100 worth of product means the loss is accepted out of the profit margin which the retailer accepts to attract custom.", "title": "" }, { "docid": "a2877406bf0777a29e86442ade57fcb8", "text": "Here's one reason that's being overlooked in answers so far. (@ChrisInEdmonton, this is for your comment on @Chad's answer.) How do credit card companies make money? Sure, there's interest charges, but those are offset significantly by the cost of borrowing money, and by people defaulting on their debt / entering bankruptcy. The other way they make money is by processing transactions. They get a cut of whatever you buy. If you're a high-income person, and you're going to process a lot of expenditures with this credit card, your business is worth more. They will be willing to bribe you with things like cash-back, frequent flier miles, and insurance on your auto rentals, so that they can be your #1 go-to card. (This works in concert with the way that some credit card vendors with richer clientele overall - American Express - get to charge higher merchant fees for access to these customers' wallets. But that was mentioned in other answers.) If you're not a high-income person, your business is worth less. If you go somewhere asking for credit, they're going to try and give you a card which will earn them the most money - which probably isn't the one where they give you back 50% of their transaction fee in rewards. It's a calculated risk, since they still have to compete against cash, debit cards, and all the other credit card companies, so they don't have you totally over a barrel, but you shouldn't expect as many freebies, either.", "title": "" }, { "docid": "8d8d1ca1f1ac2f7f965dc501cd5c996e", "text": "My bank charges me on my statement for debit transactions, but rewards me with bogo points when I run transactions as credit. AFAIK, retailers are prevented by contract with VISA et all from recouping the merchant fee from you (instead they can mark up all prices and offer a 'cash discount'), not that you'll be able to convince your vietnamese grocer of this. The difference between debit and credit fees is large enough that even these small tricks by the bank can mean a lot of money for them. Since most retailers accept either, they recruit me into their profit game with carrots and sticks. I've since moved to an actual cash back credit card and haven't regretted it yet.", "title": "" }, { "docid": "2092a8787b318cab157e958b640b32f3", "text": "Credit in debit way - the card simply functions like a debit card for that transaction - pulling cash from your checking account. No difference. You've simply discovered the fact that some banks are using the same piece of plastic for two functions, debit which draws funds directly from your checking, and credit which offers you time to pay a bill the comes in some time later. It's a personal choice.", "title": "" }, { "docid": "ef4425720fc7d104b359eb30f87b432a", "text": "In Canada, there are many stores that take debit (Interac) but don't take Visa or MasterCard. For example, a corner store. In the US the reverse is often true: every tiny place seems to take Visa or MasterCard, but not debit. A Visa debit card looks like a Visa card to the merchant. It therefore has the benefit of being usable at places that only take Visa. (Substitute MasterCard as necessary.) This benefit is very small in Canada, less so elsewhere. Meanwhile the money is actually coming out of your bank account just like a debit card, which therefore has the benefit that you're not borrowing money, can't accidentally overspend, and run no risk of incurring interest charges. It is also a way to get what appears to be a credit card when you can't qualify for credit. If you do the majority of your spending in Canada, you don't need a Visa or MasterCard debit card. Your regular debit card (Interac) will work fine for you. If you have a credit card anyway (from another bank or whatever) then again, you don't need a debit card that can pretend to be a credit card.", "title": "" } ]	fiqa
42a9c6fa3a21a74d28cd8dc4dc7a051a	Do credit ratings (by Moody's, S&P, and Fitch) have any relevance?	[ { "docid": "e5c6267801e51aa7a34b7956252680d5", "text": "They've pretty much shot any credibility they possessed. Follow the money.", "title": "" }, { "docid": "a6acbb37e49c0f1cbf78c1923d813df7", "text": "\"The problems with ratings and the interpretation of ratings is that they are retrospective, and most people read them as prospective. They basically tell you that debtor is solvent right now. What does that mean? It means that the ratings are based on the audited financial statements of a company, government or other organization issuing debt. So, in the best case scenario where the rating agency is acting properly, they are still dependent on folks with fiduciary responsibility telling the truth. And even if they are telling the \"\"truth\"\", accounting rules make it possible to obscure problems for years in some cases. Municipal goverments are a great example of this... the general obligation bonds cities and even states with deep structural budget problems still get good ratings, because they are solvent and have sufficient operating cash to meet obligations today. But towards the end of a 30-year bond's life, that may not be the case anymore unless they dramatically alter their budgets. At the end of the day, ratings are one aspect of due diligence. They are useful screening devices, but you need to understand who you are lending money to by purchasing bonds and diversify your holdings to protect your wealth. The problem, of course, is when the trustees of your pension fund invests in garbage assets after getting a sales pitch on the beach in Hawaii, then conveniently place all of the blame for that bad investment on the rating agency. You unfortunately have zero control over that.\"", "title": "" }, { "docid": "1479bfc3f23662f17bdf12c0074e13f8", "text": "\"I like Muro questions! No, I don't think they do. Because for me, as a personal finance investor type just trying to save for retirement, they mean nothing. If I cannot tell what the basic business model of a company is, and how that business model is profitable and makes money, then that is a \"\"no buy\"\" for me. If I do understand it, they I can do some more looking into the stock and company and see if I want to purchase. I buy index funds that are indexes of industries and companies I can understand. I let a fund manager worry about the details, but I get myself in the right ballpark and I use a simple logic test to get there, not the word of a rating agency. If belong in the system as a whole, I could not really say. I could not possibly do the level of accounting research and other investigation that rating agencies do, so even if the business model is sound I might lose an investment because the company is not an ethical one. Again, that is the job of my fund manager to determine. Furthermore and I mitigate that risk by buying indexes instead of individual stock.\"", "title": "" } ]	[ { "docid": "21bf027dd7d50ab43d1fea90f8798f18", "text": "\"I used to work for one of the three ratings agencies. Awhile ago. First: There are lots of different ratings. The bulk of ratings are for corporate debt and public finance. So senior debentures (fixed income) and General Obligations e.g. tax-free muni bonds, respectively. Ratings agencies are NOT paid by the investment banks, they are paid by the corporations or city/ state that is issuing debt. The investment banks are the syndicate that pulls the transaction together and brings it to market. For mortgage-backed securities, collateralized debt CDO-CLO's, all of which are fancy structured securitizations, well, that is a different matter! Those transactions are the ones where there is an inappropriately close tie between the investment bankers and ratings agencies. And those were the ratings that blew out and caused problems. Ratings agencies continued to do a decent job with what WAS their traditional business, corporate and municipal bond ratings, as far as I know. What khajja said was 100% correct: S&P's fees were paid by investors, the people who were purchasing the bonds, until about 50 years ago. Around the same time that McGraw-Hill purchased S&P, in 1966, they departed from that model, and started charging the bond issuers for ratings. I don't know if that decision was driven by McGraw-Hill or not, though. One more thing: Not all credit ratings agencies are paid by the issuers. One of the 10 NRSRO's (a designation given by the S.E.C.) is Egan-Jones. Their revenue comes from the investors, bond purchasers, not the companies issuing bonds, unlike the S&P/ Fitch/ Moody's \"\"business model\"\". So there is an alternative, which I consider hopeful and reason not to totally despair. EDIT: What xcrunna19 mentions is also totally accurate. The part about Nouriel Roubini (who is a professor at N.Y.U. or Columbia or such and a sensible though slightly high strung sort) is consistent with my impression. As for whether it would require government action to implement the changes advocated by Roubini, yes, I guess it would, but I don't know if the government would do that. It would be better if the credit ratings agencies would find their own way to a different, less conflicted payment-incentive model. Keep in mind too that many of the provisions of Dodd-Frank have removed the existing regulatory requirements for credit ratings on bonds and other securities. This is the scary part though: There isn't anything to replace the credit ratings agencies, not at the moment, as far as I can tell! Eventually the government is supposed to come up with an alternative, but that hasn't happened yet. Which is better: Not requiring ratings at all, or the past situation of sometimes inflated ratings, which imparted a false sense of confidence? I don't know.\"", "title": "" }, { "docid": "b686ae0fe2a548a07dce6642d2d9bc0c", "text": "Yes, the entire financial system is based on trust. As we have seen repeatedly, even the ratings agencies can be wrong and in collusion. You need to understand what products have any insurance/contingency/recourse if things don't go as planned. A lot of people were surprised when they found out SIPC didn't ensure futures when MF Global declared bankruptcy last fall.", "title": "" }, { "docid": "a29d85cfd8c938ef2276ef2eebe0ed11", "text": "The one financial reform we should have passed is to stop the conflict of interest rating agencies have: They get paid by the very companies they are supposed to rate! All it takes is a company to slip a little more in to get that higher rating. I've heard this is also how the BBB operates too.", "title": "" }, { "docid": "68f526be13311ca8c94737394ef90a28", "text": "Some banks are bankrupt, or so close to it that they can only pretend to give real dividends in a desperate attempt to keep investors from fleeing and driving their stock price (and thus credit rating) down into a pit of despair. Other banks (like jpmc) are not in bad shape, have cash, and are quite happy to disburse it.", "title": "" }, { "docid": "e3834023eee46345c1a76dc2fc03ec2f", "text": "Here is one the links for Goldmansachs. Not to state the obvious, but most of their research is only available to their clients. http://www.goldmansachs.com/research/equity_ratings.html", "title": "" }, { "docid": "f6828cfcacc79e64d02085f60c4e19b8", "text": "Just playing devil's advocate: A falling stock price impairs the firm's ability to raise equity capital efficiently. In these times, additional regulatory capital requirements continue to be levied on the banks, and they are faced with raising capital inefficiently, which may impair their ability to pay their debt, which may lead to a ratings downgrade.", "title": "" }, { "docid": "1a6c705c7d87a9ec21079f6c6c637160", "text": "This is not shocking news actually. Nothing happened to these banks that made them lose their ratings. Rather, it's the rating agencies that have set up more strict rules, especially when it comes to triple A status. Specifically, it's no longer possible that banks or similar institutions can have a triple A status.This effectively means that only the richer countries can be triple A.", "title": "" }, { "docid": "9ff04908735ba5c39fd86ede69c1d9ef", "text": "i forget which one, but one of the two majors (S&P, Moodys), for a time, was not paid by issuers, but solely by subscribers. no surprise here, but at that time the issuer had, on average, lower ratings than the other service. after the service switched to subscriber-paid, within a year its ratings were on par with the other service.", "title": "" }, { "docid": "635ce7920fdb62bbb83e572f92765298", "text": "Yeah it was a mix between the issuing agencies and the credit agencies. If the credit agencies didnt rate them as AAA then the financial institutions would just go to the other agency. So there was a conflict of interest in rating them higher. There was mismanagement on both sides of the fence and when the CDOs started to default it created a forced selling environment where people HAD to sell their CDOs/stocks at a steep discount to get enough liquidity to pay their own mortgages.", "title": "" }, { "docid": "f780ede624cc558237341e4335e2dd31", "text": "The answer to your question is no. Your credit rating is the way creditors let each other know whether you are in a good position and have a strong tendency to repay your debts, not whether you are an easy target for making money on interest and penalties associated with failing to repay debts in full. The fact that you make your payments on time will definitely not lower your credit rating. While the banks are not making as much money on you as they would if you carried a balance, they are also not spending a lot of money on you, nor losing a lot of money on people like you failing to repay debts. The transactions charged to the retailers cover the costs of operating your card and then a little bit. That is enough to make you worth keeping as a customer. They are happy with your arrangement. The formula for credit rating computation is proprietary, but we know what the factors are overall. Making payments on time consistently is a positive, not a negative factor. However, they do look at the number of cards and overall mix of cards and other types of debt. For example, if you have a very large amount of credit capacity in your cards and no mortgage, that could possibly be a negative. If you have opened some of those accounts recently, it could be a negative. If you have a larger number credit cards than they think is good, that could be a negative. There are other things as well that could be bringing your score down. Probably worth it to take a look. If you want to get an idea of what factors are adding positively and negatively to your credit score, I'd encourage you to visit CreditKarma.com, Quizzle.com, or another source intended to help you understand and improve your credit rating.", "title": "" }, { "docid": "9cbde01cf5e466b8f1a6ee6fca714dfb", "text": "US government bonds are where money goes when the markets are turbulent and investors are fleeing from risk, and that applies even if the risk is a downgrade of the US credit rating, because there's simply nowhere else to put your money if you're in search of safety. Most AAA-rated governments have good credit ratings because they don't borrow much money (and most of them also have fairly small economies compared with the US), meaning that there's poor liquidity in their scarce bonds.", "title": "" }, { "docid": "1527d960ca0ae909169234ac934632c1", "text": "The credit scale is deceptive, it goes: AAA, AA, A, BBB, BBB-, BB+, BB, B, CCC, CC, C, D. In reality it should be A,B,C,D,E, F, G,H, I, etc. The current scale does not reflect with clarity the ranking of risks and ratings. AA is much worse than AAA, but the uncertainty involved can be scary. Check out these corporate and sovereign debt credit ratings.", "title": "" }, { "docid": "2dc8c9f027bfc2cc21bc6b1d146bfccf", "text": "Apple is currently the most valuable company in the world by market capitalisation and it has issued bonds for instance. Amazon have also issued bonds in the past as have Google. One of many reasons companies may issue bonds is to reduce their tax bill. If a company is a multinational it may have foreign earnings that would incur a tax bill if they were transferred to the holding company's jurisdiction. The company can however issue bonds backed by the foreign cash pile. It can then use the bond cash to pay dividends to shareholders. Ratings Agencies such as Moody's, Fitch and Standard & Poor's exist to rate companies ability to make repayments on debt they issue. Investors can read their reports to help make a determination as to whether to invest in bond issues. Of course investors also need to determine whether they believe the Ratings Agencies assesments.", "title": "" }, { "docid": "80cf25b1ba15930ca2b8aa57dbb8796c", "text": "Your credit score is based on your use of Debt. From wikipedia: Opening and closing bank accounts, buying or selling cars without debt, or even buying or selling houses without debt won't affect your credit score.", "title": "" }, { "docid": "382fded1ed4fb017436f171d9cfcd887", "text": "So their programmers don't have to deal with floating point arithmetic. This is why they're so far ahead in technology!", "title": "" } ]	fiqa
9bb546efc000d23193ae55f112fc01fc	As an independent contractor, should I always charge the client the GST/HST?	[ { "docid": "edcc0906cab85e7fb383412944be83d2", "text": "Hourly rate is not the determinant. You could be selling widgets, not hours. Rather, there's a $30,000 annual revenue threshold for GST/HST. If your business's annual revenues fall below that amount, you don't need to register for GST/HST and in such case you don't charge your clients the tax. You could still choose to register for GST/HST if your revenues are below the threshold, in which case you must charge your clients the tax. Some businesses voluntarily enroll for GST/HST, even when below the threshold, so they can claim input tax credits. If your annual revenues exceed $30,000, you must register for GST/HST and you must charge your clients the tax. FWIW, certain kinds of supplies are exempt, but the kind of services you'd be offering as an independent contractor in Canada aren't likely to be. There's more to the GST/HST than this, so be sure to talk to a tax accountant. References:", "title": "" } ]	[ { "docid": "fa9290fe5300a24c04c6f8ab01f18f66", "text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.", "title": "" }, { "docid": "1a47af56d5b794e7f58cdb39117264bd", "text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"", "title": "" }, { "docid": "c2fe5a2fd10180b48792906009b272fc", "text": "I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.", "title": "" }, { "docid": "a9fce735a06d3dd36302147dbd99a66d", "text": "It depends and I would not just jump into conclusion as I have seen cases where offering some services are not U.S. sourced income. I'll advise you speak with a knowledgeable tax professional.", "title": "" }, { "docid": "d6a98d3d7c90ccb8fe872ecdb9013ed4", "text": "According to the New York State Department of Taxation and Finance, your service would appear to be exempt from taxes. However, if you are charging for tangible items, those would incur a sales tax.", "title": "" }, { "docid": "34fe1827bcc69fdc3fcd8379b228bad4", "text": "As others have said, make sure you can and do file your taxes on a cash basis (not accrual). It sounds like it's very unlikely the company is going to issue you a 1099 for invoices they never paid you. So you just file last year's taxes based on your income, which is the money you actually received. If they do pay you later, in the new year, you'll include that income on next year's tax return, and you would expect a 1099 at that time. Side note: not getting paid is unfortunately common for consultants and contractors. Take the first unpaid invoice and sue them in small claims court. After you win (and collect!), tell them you'll sue them for each unpaid invoice in turn until they pay you in full. (You might need to break up the lawsuits like that to remain under the small claims limit.)", "title": "" }, { "docid": "e6c0ce6d855e23a095166cf2c36b03e8", "text": "Your answer will need loads of information and clarification, so I will ask you to visit the VAT and have a peruse. 1) Obligation is for you to find out the correct rate of VAT, charge and pay tax accordingly. You can call up the HMRC VAT helpline for help, which they will be happy to oblige. Normally everybody pays VAT every 3 months or you can pay once in a year. 2) Depends on your annual turnover, including VAT. Less than £150000 you join the Flat rate scheme. There are schemes for cultural activities. Might be good to check here on GOV.UK. 3) If you pay VAT in EU countries, you can reclaim VAT in UK. You need to reclaim VAT while filing in your VAT returns. But be careful about your receipts, which can be checked to verify you are not defrauding HMRC. The basic rule is that B2B services are, as the name suggests, supplies from one business to another. And, subject to some exceptions, are treated as made where the customer belongs. No VAT is chargeable on B2B supplies to an overseas customer. But where you make a B2C supply, VAT depends on where your customer is located: 1) if they are outside the EU, you don’t need to charge VAT 2) if they are located in an EU country, then you must charge VAT. Source All in all keep all records of VAT charged and paid to satisfy the taxman. If the rules get complicated, get an accountant to help you out. Don' take chances of interpreting the law yourself, the fines you might pay for wrong interpretation might be a deal breaker.", "title": "" }, { "docid": "f1be9d7231a61302958e09ca27c1c4fe", "text": "The Canada Revenue Agency describes in detail here what information businesses must generally include on their invoices so that GST/HST registrants can claim Input Tax Credits (ITCs) for the expenses. Quote: Sales invoices for GST/HST registrants You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you provide taxable goods and services. This information lets them support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. [...] The page quoted continues with a table describing what, specifically, needs to be on a sales invoice based on the total amount of the invoice; the requirements differ for: total sale under $30, total sale between $30 to $149.99, and total sale $150 or more. For the total sale under $30 category, the only things a sales invoice must contain to support an ITC claim are (1) the provider's business name, (2) the invoice date, and (3) the total amount paid/payable. i.e. When the total sale is under $30, there is no requirement for any GST/HST amount to be indicated separately, nor for a business number to be present on the invoice. Hence, IMHO (and I am neither an accountant nor a lawyer), if your Uber rides are for $30 or less, then you shouldn't expect a GST/HST number anyway, and a simple invoice as described should be enough for you to claim your ITCs. Whether or not the provider is registered in fact for GST/HST is beside the point. For amounts over $30, you need a bit more. While the page above specifies that the provider's business number should be included beginning with the next level of total sales, there are exceptions to those rules described at another page mentioned, Exceptions to invoice requirements, that specifically apply to the taxi/limousine case. Quote: Exceptions to invoice requirements GST/HST registrants are required to keep the necessary documentation to support their claim for ITCs and rebates. In certain circumstances the documentation requirements have been reduced. [...] For taxi or limousine fares your books and records must show: So at a minimum, for fare in excess of $30 total, you should ask the driver to note either (a) the amount of GST/HST charged, or (b) a statement that the fare includes GST/HST. The driver's business number need not be specified. Consequently, if your receipt for a ride in excess of $30 does not contain any such additional information with respect to GST/HST, then I would expect the receipt does not satisfy the CRA's requirements for supporting your ITC claim. i.e. Keep your individual rides under $30 each, or else get a better receipt from the driver when it is above that amount. p.s. It should go without saying, but your rides, of course, must be considered reasonable business expenses in order to qualify for GST/HST ITCs for your business. Receipts for rides of a personal nature are not eligible, so be sure to maintain proper records as to the business purpose and destination for each ride receipt so claimed.", "title": "" }, { "docid": "37a8df9320affe0b7287c522247d716f", "text": "If you are being paid money in exchange for services that you are providing to your cousin, then that is income, are legally you are required to declare it as self-employment income, and pay taxes when you file your tax return (and if you have a significant amount of self-employment income, you're supposed make payments every quarter of your estimated tax liability. The deposit itself will not be taxed, however.", "title": "" }, { "docid": "573e48e9b9d4cbbfa1dee18393f88dd7", "text": "The best way is for X to work as Independent consultant fro c.com from India by raising monthly invoices for the work done. This will avoid the complications and paperwork associated by registering a LLC in US by XF and then employing X as independent consultant in India. X may need to fill out W8-BEN forms so that there is no withholding in US Edit: Independent consultant means without having to register any legal entity either in India or in US. There are no legal regulations in US or in India to hire an independent contractor / consultant. There maybe internal policy of C.com not to have independent consultants. Payments can be made via transfer to Bank account.", "title": "" }, { "docid": "563440e7c3bd9c4100cc7605236340c8", "text": "\"I agree that you should have received both a 1099 and a W2 from your employer. They may be reluctant to do that because some people believe that could trigger an IRS audit. The reason is that independent contractor vs employee is supposed to be defined by your job function, not by your choice. If you were a contractor and then switched to be an employee without changing your job description, then the IRS could claim that you should have always been an employee the entire time, and so should every one of the other contractors that work for that company with a similar job function. It's a hornet's nest that the employer may not want to poke. But that's not your problem; what should you do about it? When you say \"\"he added my Federal and FICA W/H together\"\", do you mean that total appears in box 4 of your 1099? If so, it sounds like the employer is expecting you to re-pay the employer portion of FICA. Can you ask them if they actually paid it? If they did, then I don't see them having a choice but to issue a W2, since the IRS would be expecting one. If they didn't pay your FICA, then the amount this will cost you is 7.65% of what would have been your W2 wages. IMHO it would be reasonable for you to request that they send you a check for that extra amount. Note: even though that amount will be less than $600 and you won't receive a 1099 in 2017 for it, legally you'll still have to pay tax on that amount so I think a good estimate would be to call it 10% instead. Depending on your personality and your relationship with the employer, if they choose not to \"\"make you whole\"\", you could threaten to fill out form SS-8. Additional Info: (Thank you Bobson for bringing this up.) The situation you find yourself in is similar to the concept of \"\"Contract-to-Hire\"\". You start off as a contractor, and later convert to an employee. In order to avoid issuing a 1099 and W2 to the same person in a single tax year, companies typically utilize one of the following strategies: Your particular situation is closest to situation 2, but the reverse. Instead of retroactively calling you a W2 employee the entire time, your employer is cheating and attempting to classify you as a 1099 contractor the entire time. This is frowned upon by the IRS, as well as the employee since as you discovered it costs you more money in the form of employer FICA. From your description it sounds like your employer was trying to do you a favor and didn't quite follow through with it. What they should have done was never switch you to W2 in the first place (if you really should have been a contractor), or they should have done the conversion properly without stringing you along.\"", "title": "" }, { "docid": "84802594cb5304ceebedadaed52cb223", "text": "Ethically, you and your landlord should always report both income and expense as there technically exists a service and a rent. So it is subject to taxation. On the other hand, it can be considered an exchange of a simple favour and if it doesn't involve a money exchange or any profits (I am assuming that you are not selling what you or your landlord produce on the market) no value can be calculated thus no taxation can be applied. This changes though if a contract is involved, as a legal value can be estimated. Caution: These subjects can vary on an extreme level of specificity, of what can and cannot be claimed as income and expense, which can vary per country, state, province and even per judge, as well as the nature and sector of the work. Also, if you intend to formalize this relationship, the type of contract and reporting forms do vary per state as well. So it might be best to confirm it with a local legal advisor to avoid unfortunate surprises.", "title": "" }, { "docid": "5cbb996244fc60be4ce51aa99ccabc02", "text": "The short Answer is NO, HMRC do not like disguised employment which is what this is as you fall under IR35 you can bill them via an umbrella company and you should be charging the contractor rate not a permie rate. http://www.contractoruk.com/", "title": "" }, { "docid": "12a6603099f34cd972e1f9f95e9ab8b4", "text": "I am not a lawyer or a tax accountant, but from the description provided it sounds to me like you have created two partnerships: one in which you share 50% of Bob's revenue, and another in which you share 50% of the revenue from the first partnership. If this is the case, then each partnership would need to file form K-1 and issue a copy to the partners of that partnership. I think, but I'm not sure, that each partnership would need an Employer Identification Number (EIN; you can apply for and receive these online with the IRS). You would only pay tax on the portion of profits that are assigned to you on the K-1. (If you've accidentally created a partnership without thinking through all the ramifications, you probably want to straighten this out. You can be held liable for the actions of your partners.) On the other hand, if your contract with Bob explicitly makes you a contractor and not a partner, then Bob should probably be issuing a 1099 to you. Similarly for you and Joe -- if your contract with Joe makes him a subcontractor, then you may need to get an EIN and issue him a 1099 at the end of the year. The money you pay to Joe is a business expense, and would be deducted from the profits you show on your Schedule C. In my opinion, it would be worth the $200 fee paid to a good CPA to make sure you get this right.", "title": "" }, { "docid": "e58a8128222084751b0288d74167d85e", "text": "In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References:", "title": "" } ]	fiqa
f117970f905f4390fa4a9635f454a929	Form 1040 - where to place my stipend?	[ { "docid": "a403d7de68675f08817c02e9104ea567", "text": "If you're correct that it's not taxable because it's non-taxable reimbursement (which is supported by your W-2), then it should not go on your 1040 at all. If it is taxable, then it really should have appeared on your W-2 and would probably end up on Line 7 of your Form 1040.", "title": "" }, { "docid": "f7dda4d298962e5676469e1351ccb15d", "text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"", "title": "" } ]	[ { "docid": "c2796ecbc91f8c0146494e2f952bc726", "text": "\"Well a definitive answer would require a lot of information. Instead of posting that kind of info online, you should take a look at the instructions for Form 2210 and in particular \"\"Schedule AI -- Annualized Income Installment Method,\"\" which corrects the penalty for highly variable income. Using this form you will likely be able to avoid the penalty, but it is hard to know for sure.\"", "title": "" }, { "docid": "65783e7cedfca85f8a5147c9863f6575", "text": "\"I have an indirect answer for you. It is not a numeric answer but it is a procedure. The challenge with paying taxes for an employee besides their share of Social security and Medicare is that you have no idea what their state and Federal taxes are. Are they married, single, head of household? Is this their entire families income, or is it extra money to make ends meet? What about state taxes? It looks like you will need a W-4 from them. As you know the IRS Tax topic 756 has all the info you need. Federal Income Tax Withholding You are not required to withhold federal income tax from wages you pay to a household employee. However, if your employee asks you to withhold federal income tax and you agree, you will need a completed Form W-4 (PDF), Employee's Withholding Allowance Certificate from your employee. See Publication 15, (Circular E), Employer's Tax Guide, which has tax withholding tables that are updated each year. Form W-2, Wage and Tax Statement If you must withhold and pay Social Security and Medicare taxes, or if you withhold federal income tax, you will need to complete Form W-2 (PDF), Wage and Tax Statement, for each employee. You will also need a Form W-3 (PDF), Transmittal of Wage and Tax Statement. See \"\"What Forms Must You File?\"\" in Publication 926 (PDF) for information on when and where to furnish and file these forms. To complete Form W-2 you will need an employer identification number (EIN) and your employees' Social Security numbers. If you do not already have an EIN, you can apply for one using the online EIN application available on IRS.gov. This service is available Monday through Friday, 7 a.m. to 10 p.m. Eastern time. You can also apply for an EIN by mailing or faxing a completed Form SS-4 (PDF), Application for Employer Identification Number. International applicants may apply by calling 267-941-1099 (not a toll-free number) Monday through Friday, 6 a.m. to 11 p.m. Eastern time to obtain their EIN. Refer to Topics 752 and 755 for further information. Don't forget Federal Unemployment Tax. Pub 15 will have tables so you can determine how much you should have been withholding if you had gone that route. It will be easiest to use a spreadsheet to do the calculations so that what you gave them in their checks is their net pay not their gross. The tables are constructed under the assumption you know their gross pay.\"", "title": "" }, { "docid": "36fcccad5602fec5364f2c1f4e6d3235", "text": "Generally stock trades will require an additional Capital Gains and Losses form included with a 1040, known as Schedule D (summary) and Schedule D-1 (itemized). That year I believe the maximum declarable Capital loss was $3000--the rest could carry over to future years. The purchase date/year only matters insofar as to rank the lot as short term or long term(a position held 365 days or longer), short term typically but depends on actual asset taxed then at 25%, long term 15%. The year a position was closed(eg. sold) tells you which year's filing it belongs in. The tiny $16.08 interest earned probably goes into Schedule B, typically a short form. The IRS actually has a hotline 800-829-1040 (Individuals) for quick questions such as advising which previous-year filing forms they'd expect from you. Be sure to explain the custodial situation and that it all recently came to your awareness etc. Disclaimer: I am no specialist. You'd need to verify everything I wrote; it was just from personal experience with the IRS and taxes.", "title": "" }, { "docid": "a89ab2d6bd9760664b9f5741aabdd05f", "text": "I know nothing about this, but found this link which suggests for H&R Block specifically: I kept searching and I found the section. It's at the end in the Credits section under 'other backup withholding'. Hopefully this helps someone else in the future.", "title": "" }, { "docid": "78619ef0b9c3bb98ba6bd974ee9cb02e", "text": "The purpose of the W-4 form is to allow you to adjust the withholding to meet your tax obligations. If you have outside non-wage income (money from tutoring) you will have to fill out the W-4 to have extra taxes withheld. If you have deductions (kids, mortgages, student loan interest) then you need to adjust the form to have less tax taken out. Now if yo go so far that you owe too much in April, then you can get hit with penalties and a requirement to file your taxes quarterly the next year. Most years I adjust my W-4 to reflect changes to my situation. The idea is to use it to manage your withholding so that you minimize your refund without triggering the penalties. The HR department has advised you well. How to adjust: If you want to decrease withholding (making the refund smaller) add one to the number on the worksheet. In 2014 a change by 1 exemption is equal to a salary adjustment of $3,950. If this was spread over 26 paychecks that would be the same as lowering your salary by ~$152. If you are in the 15% tax bracket that increases your take home pay by ~10 a check.", "title": "" }, { "docid": "1d4ba8a949e4138c61188e7132d74980", "text": "You need to file IRS Form 1040-NR. The IRS's website provides instructions.", "title": "" }, { "docid": "b4faf049ea1214f376c1b3ba4effb521", "text": "\"Look at how much tax you paid last year, including withholding and any additional amount that might have been due with the tax return. Look at the instructions for the W-4 form, which sets how much tax you want your employer to withhold. Adjust the numbers on that form until the total withheld during the year is close to what you expect this year's total to be -- remember, though, that there's no penalty for over-withholding but could be for under-withholding. Submit the W-4 form to your employer. Remember that we're a few weeks into the year, so even if you adjust withholding now there will have been several paychecks at the prior setting; you can try to build that into your guesstimate of how to reset the withholding, or just not worry about it. Do the same with your state's withholding adjustments form. Repeat on a yearly basis, to account for raises, changes in other income, changes in filing status, etc. until it's close enough that you're satisfied with it. Then reconsider if/when your financial situation changes. Personally I find that exercise more effort than it's worth, and have simply set my withholding at \"\"close enough\"\". I usually get some money back from the feds and owe some to the state, but either is handled happily by my normal bank account balance.\"", "title": "" }, { "docid": "6fb392db66de88a0af8f251d21c68b04", "text": "\"IRA distributions are reported on line 15b on the standard form 1040. That is in the same Income section as most of your other income (including that 1099 income and W2 income, etc.). Its income is included in the Line 22 \"\"Total Income\"\", from which the Personal Exemption (calculated on 6d, subtracted from the total in line 42) and the Standard Deduction (line 40 - also Itemized Deduction total would be here) are later reduced to arrive at Line 43, \"\"Taxable Income\"\". As such, yes, he might owe only the 10% penalty (which is reported on line 59, and you do not reduce this by the deductions, as you surmised).\"", "title": "" }, { "docid": "6851122f48b8fd967b1633e2c0bdc341", "text": "Do you get cash (or a deposit into your bank account) of your PhD stipend and then you immediately send the university a check to pay the tuition fee (which might be more than the cash you get from the University)? Or does the University simply keep the stipend money, transferring it from one pocket to another in essence, and say, OK, you have paid your tuition except for $X that you still owe us? Or does the university grant you a tuition waiver as part of your assistantship and reports this as income on Form 1099-MISC? In all of these cases, the money reported on Form 1099-MISC is not taxable income to you, and it is neither subject to Self-Employment tax (basically, Social Security and Medicare tax -- both the employee's share and the employer's share) nor to (Federal) income tax.", "title": "" }, { "docid": "177452e08f5bcd1a5ccb6fada4720bcd", "text": "\"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of \"\"How to File Your Income Taxes\"\" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as \"\"Royalty Property\"\". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4. I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income.\"", "title": "" }, { "docid": "df1e56fb20ac2062c3ea4d7c85015ded", "text": "\"If you're single, the only solution I'm aware of, assuming you are truly getting a 1099-misc and not a W-2 (and don't have a W-2 option available, like TAing), is to save in a nondeductible account for now. Then, when you later do have a job, use that nondeductible account (in part) to fund your retirement accounts. Particularly the first few years (if you're a \"\"young\"\" grad student in particular), you'll probably be low enough on the income side that you can fit this in - in particular if you've got a 401k or 403b plan at work; make your from-salary contributions there, and make deductible IRA or Roth IRA contributions from your in-school savings. If you're not single, or even if you are single but have a child, you have a few other options. Spouses who don't have earned income, but have a spouse who does, can set up a Spousal IRA. You can then, combined, save up to your spouse's total earned income (or the usual per-person maximums). So if you are married and your wife/husband works, you can essentially count his/her earned income towards your earned income. Second, if you have a child, consider setting up a 529 plan for them. You're probably going to want to do this anyway, right? You can even do this for a niece or nephew, if you're feeling generous.\"", "title": "" }, { "docid": "58fd1222e8565395bee7290f7a71a3e3", "text": "\"In the U.S., Form 1040 is known as the tax return. This is the form that is filed annually to calculate your tax due for the year, and you either claim a refund if you have overpaid your taxes or send in a payment if you have underpaid. The form is generally due on April 15 each year, but this year the due date is April 18, 2016. When it comes to filing your taxes, there are two questions you need to ask yourself: \"\"Am I required to file?\"\" and \"\"Should I file?\"\" Am I required to file? The 1040 instructions has a section called \"\"Do I have to file?\"\" with several charts that determine if you are legally required to file. It depends on your status and your gross income. If you are single, under 65, and not a dependent on someone else's return, you are not required to file if your 2015 income was less than $10,300. If you will be claimed as a dependent on someone else's return, however, you must file if your earned income (from work) was over $6300, or your unearned income (from investments) was over $1050, or your gross (total) income was more than the larger of either $1050 or your earned income + $350. See the instructions for more details. Should I file? Even if you find that you are not required to file, it may be beneficial to you to file anyway. There are two main reasons you might do this: If you have had income where tax has been taken out, you may have overpaid the tax. Filing the tax return will allow you to get a refund of the amount that you overpaid. As a student, you may be eligible for student tax credits that can get you a refund even if you did not pay any tax during the year. How to file For low income tax payers, the IRS has a program called Free File that provides free filing software options.\"", "title": "" }, { "docid": "c645485700df18057afcf52108eca4f2", "text": "In this situation I would recommend figuring out about what you would need to pay in taxes for the year. You have two figures (your salary and dependents) , but not others. Will you contribute to a 401K, do you itemize deductions, etc... If things are uncertain, I would figure my taxes as if I took the standard deduction. For argument's sake let's assume that comes out to $7300. I would then add $500 on to my total to cover potential increases in taxes/fees. You can adjust this up or down based on your ability to absorb having to pay or the uncertainty in your first calcuation. So now $7800, divide by 26 (the amount of paychecks you receive in a year) = $300 Then I would utilize a payroll calculator to adjust my exemptions and additional witholding so my federal withholding is as close as possible to this number. Or you can sit with your payroll department and do the same.", "title": "" }, { "docid": "f8c569996a42b57bb6a892abe0f18a17", "text": "Your annual contributions are capped at the maximum of $5500 or your taxable income (wages, salary, tips, self employment income, alimony). You pay taxes by the regular calculations on Form 1040 on your earned income. In this scenario, you earn the income, pay taxes on the amount you earn, and put money in the Roth IRA. The alternative, a Traditional IRA, up to certain income levels, allows you to put the amount you contribute on line 32 of Form 1040, which subtracts the Traditional IRA contribution amount from your Adjusted Gross Income (line 37) before tax is calculated on line 44. In this scenario, you earn the income, put the money in the Traditional IRA, reduce your taxable income, and pay taxes on the reduced amount.", "title": "" }, { "docid": "fca04554645e605e1908186d142ee401", "text": "\"This does not apply to Roth IRAs. It defines the difference between the two depending on what your age is when this happens. If you are 59 or younger, you have a 10% penalty in addition to taxes. If you are between 59.5 and 70, there is no penalty, but you do have to pay taxes. If you are 70.5 or older, then you MUST withdraw money, and that withdrawal is called the \"\"required minimum distribution\"\" and you pay taxes on it as if it were income. In terms of investments, the two are the same in that the earnings you make on your investments grow tax free. Here is more information between the two. *Improvements are welcome for my answer.\"", "title": "" } ]	fiqa
f2a391ad32781bd9a15c09a86d117664	Sales Tax: Rounded Then Totaled or Totaled Then Rounded?	[ { "docid": "0660a055e498255f0629f66e7b8303f2", "text": "\"Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's \"\"Good enough\"\", but I'm not trying to provide the \"\"good enough\"\" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the \"\"good enough\"\" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.\"", "title": "" }, { "docid": "7eee3defcfeb74a9808a4cca6339b60d", "text": "\"First of all to answer the basic question \"\"Is one method correct? Might it depend on local laws?\"\" Yes it does depend on local laws. Because ultimately the business will have to file forms with the sate/county/city. These forms are going to ask for the total sales based on the tax category (tax free, x%, y%). Each transaction could have parts that fall into each category. The local taxing authority decides what goes into each category. The local taxing authority also determines how often the business needs to submit the taxes. They can even decide to base the rates used by where the customer lives. A business is not required to charge directly for sales tax. That is why frequently at sporting events, the price on the menu notes that all sales taxes are included. I suppose not directly charging a sales tax makes the monthly calculation harder, but the state will still get their money. Rounding up at the end of the entire transaction is enough to make sure they collect enough taxes, so they don't have to dip into their profits.\"", "title": "" }, { "docid": "974ed9da6e3447681972ae43b6e9b83a", "text": "You should total the items first, to get $3.00, then add the tax, then round up/down accordingly. Your two examples above don't offer this option, even though your second example arrives at the same result. In your first example, a number of items taxed one at a time might result in many .006 results which would round to .01. A long enough list of items would result in an error of many cents depending how many items there are. Totaling first then applying tax results in your saving .004 or losing .005 cents maximum due to rounding. See A Guide to Sales and Use Tax which is a document put out by the Massachusetts Dept of Revenue. In the chart for tax, it shows that $1.09 is taxed at five cents, but at 5%, it would be 5.45. So, at least for this state, I believe I correctly stated the rounding process.", "title": "" }, { "docid": "f7ddaedc3d2c021d60063bc7812ac172", "text": "Taxes should not be calculated at the item level. Taxes should be aggregated by tax group at the summary level. The right way everywhere is LINE ITEMS SUMMARY PS:If you'd charge at the item level, it would be too easy to circumvent the law by splitting your items or services into 900 items at $0.01 (Which once rounded would mean no tax). This could happen in the banking or plastic pellets industry.", "title": "" } ]	[ { "docid": "9136a647ab0179c71a5d473f896d3a87", "text": "\"JoeTaxpayer nailed it. Here's another way to look at it: Generally, we invest in something, then might leave it there for a few years, then take it out, but don't touch it in between. In that case, to get the final amount X(N), we need to take the initial amount, then multiply by growth in the first year, then multiply by growth in the second year, etc. So, for three years, we have: X(3) = X(0) * G(1) * G(2) * G(3) = X(0) * \"\"average annual growth\"\" ^ 3 So, here, we see that we want the average annual growth to the power three equal to the product of the annual growth rates, thus, geometric mean: geometric mean = (G(1) * G(2) * G(3)) ^ (1/3) On the other hand, consider a situation where I have three investments X,Y,Z over one year. Now I have, after one year: X(1)+Y(1)+Z(1) = X(0)G(1,X) + Y(0)G(1,Y) + Z(0)G(1,Z) = ( X(0)+Y(0)+Z(0) ) \"\"average annual growth\"\" Now, in this case, if we assume X(0) = Y(0) = Z(0) = 1, i.e. I put equal amounts in each, we see that the average annual growth rate we want in this case is the arithmetic mean: arithmetic mean = (G(1,X) + G(1,Y) + G(1,Z)) / 3 (if we had unequal amounts at the beginning, it would be a weighted average). TL;DR:\"", "title": "" }, { "docid": "f0322d184b8afaede4eb61aef8169642", "text": "\"in the U.S. (for @Software Monkey) books are treated just like any other donation, you look at comparable sales: IRS Link. Sounds like a pain to do each book manually. TurbtoTax has \"\"ItsDeductable\"\" product that suppose to help you calculate the value of donated items.\"", "title": "" }, { "docid": "a1041cb736e051ec679ade47727045f5", "text": "\"Yes, this is a miscellaneous itemized deduction. https://www.irs.gov/publications/p529/ar02.html For this to impact your taxes, you have to be itemizing deductions (have total deductions greater than standard deduction), and the total of all miscellaneous deductions needs to exceed the \"\"2% floor\"\" described in the IRS link above.\"", "title": "" }, { "docid": "d76b0aa423ae2d10652b65376f7b65d4", "text": "\"I'll assume United States as the country; the answer may (probably does) vary somewhat if this is not correct. Also, I preface this with the caveat that I am neither a lawyer nor an accountant. However, this is my understanding: You must recognize the revenue at the time the credits are purchased (when money changes hands), and charge sales tax on the full amount at that time. This is because the customer has pre-paid and purchased a service (i.e. the \"\"credits\"\", which are units of time available in the application). This is clearly a complete transaction. The use of the credits is irrelevant. This is equivalent to a customer purchasing a box of widgets for future delivery; the payment is made and the widgets are available but have simply not been shipped (and therefore used). This mirrors many online service providers (say, NetFlix) in business model. This is different from the case in which a customer purchases a \"\"gift card\"\" or \"\"reloadable debit card\"\". In this case, sales tax is NOT collected (because this is technically not a purchase). Revenue is also not booked at this time. Instead, the revenue is booked when the gift card's balance is used to pay for a good or service, and at that time the tax is collected (usually from the funds on the card). To do otherwise would greatly complicate the tax basis (suppose the gift card is used in a different state or county, where sales tax is charged differently? Suppose the gift card is used to purchase a tax-exempt item?) For justification, see bankruptcy consideration of the two cases. In the former, the customer has \"\"ownership\"\" of an asset (the credits), which cannot be taken from him (although it might be unusable). In the latter, the holder of the debit card is technically an unsecured creditor of the company - and is last in line if the company's assets are liquidated for repayment. Consider also the case where the cost of the \"\"credits\"\" is increased part-way through the year (say, from $10 per credit to $20 per credit) or if a discount promotion is applied (buy 5 credits, get one free). The customer has a \"\"tangible\"\" item (one credit) which gets the same functionality regardless of price. This would be different if instead of \"\"credits\"\" you instead maintain an \"\"account\"\" where the user deposited $1000 and was billed for usage; in this case you fall back to the \"\"gift card\"\" scenario (but usage is charged at the current rate) and revenue is booked when the usage is purchased; similarly, tax is collected on the purchase of the service. For this model to work, the \"\"credit\"\" would likely have to be refundable, and could not expire (see gift cards, above), and must be usable on a variety of \"\"services\"\". You may have particular responsibility in the handling of this \"\"deposit\"\" as well.\"", "title": "" }, { "docid": "52e65791fa9fc4c61ce5ac8ca1133684", "text": "Simple. Say in 2012 you were up 50% (brilliant) but then in 2013 you were down 50% (sorry). i.e. if you started with $1000, you were up to $1500, then down to $750. You lost $250 overall. If you were to compute the mean of the percentages using each method, then: Arithmetic mean: The average of +50% and -50% (really 150% and 50% of each period's initial value) is zero, not up or down. Geometric mean: 1.5 * .5 = .75, i.e. you are down 25% over 2 years, or about 13.4% per year. It should be clear the Geometric makes more sense in such a case.", "title": "" }, { "docid": "1f25fc1100906dad3d175ba50a5c3a5c", "text": "TWRR = (2012Q4 x 2013Q1 x 2013Q2) ^ (1/3) = ?? (1.1 * .809 * 1.29) ^ (1/3) = 1.047 or 4.7% return. No imaginary numbers needed. But. Your second line there is wrong $15,750 - $15,000 - $4,000 ? The $15K already contains the $4k, why did you subtract it again? This a homework problem?", "title": "" }, { "docid": "31594816af776ae31246dff47b57b5a2", "text": "Your 1&2 are the end of that chapter. You can't convert for that year again, and must wait 30 days to convert in the new tax year. For example, each year for over a decade, I've helped my mother in law with this. In May, we convert a chunk of money/stock to Roth. In April, I'll recharacterize just enough so she tops off her 15% bracket but doesn't hit 25%. 30 days later, the new conversion happens. All the Roth money is money now taxed at 15%, which, in an emergency, a need for a lot of cash, will avoid the potential of 25% or higher, tax. You see, your 3 never really happens.", "title": "" }, { "docid": "d17d924c5b82e1f761143e2f7cd919da", "text": "\"There is no numerical convention in finance that I have ever seen. If you look at statements or reports that measure growth when the starting value is negative or zero, you typically see \"\"n/a\"\" or \"\"-\"\" or \"\"\"\" as the result. Any numerical result would be meaningless. Suppose you used 100% and another company had a legitimate 150% gain - where would the 100% change rank? What do my manager and investors expect to see? As a financial analyst - I would not want to see 100%. I would instead rather see something that indicates that the % change is meaningless. As an example, here's the WSJ documentation on change in Net Income: Net Income percent change is the change from the same period from a year ago. Percent change is not provided if either the latest period or the year-ago period contains a net loss. Thinking about it in another context: Yesterday you and your friend had no apples. Today you have 1 and your friend has 20. What percentage increase did you both have? Did you both have a 100% increase? How can you indicate that your friend had a larger \"\"increase\"\"? In that case (and in finance), the context needs to turn from a percentage increase to an absolute increase. A percentage increase is that scenario is meaningless.\"", "title": "" }, { "docid": "3b36305cf5bd1204e47a99690160c354", "text": "The vendor needs to do this using apportionment, according to the VAT rules for mixed supplies: If you make mixed supplies and the individual supplies are not liable to VAT at the same rate then you need to work out the tax value of each supply in order to calculate how much tax is due. If the tax value is based on the total price you charge (see paragraph 7.3) you do this by splitting that price between the supplies. This is called an apportionment ... There is no special method of apportionment ... However, your calculations must be fair and you must be able to justify them. It is usually best to use one of the methods shown in section 32. The section 32 referred to really relates to apportioning use between business and non-business purposes, but it implies that splitting up the total price in proportion to the original prices would probably be fair. So in your example the vendor might split the £5 discount equally between the spoon and the carrycot as they had the same gross cost, and pay VAT as if each had cost £7.50 gross. The vendor could also do it in proportion to their net (pre-VAT) prices and thus apportion a bit more of the discount to the carrycot than the spoon, but as this would lead to them paying slightly more tax overall they probably wouldn't choose to. However, none of this is likely to be too relevant to a consumer, since in the UK prices must be presented as the gross (VAT-inclusive) amounts and so the discounts will also apply to those amounts. It will of course affect how much of the purchase price the vendor ends up paying on to the government and thus might indirectly affect what discounts the vendor is willing to offer.", "title": "" }, { "docid": "abe49f26f27ffe70f80550ff0b9d841a", "text": "\"Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions. Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income. So now the question becomes, \"\"Do I have to pay income tax on the proceeds from my garage sale?\"\" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due. If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit.\"", "title": "" }, { "docid": "36da6bde98ebe39b832a27c95b80a17e", "text": "\"Total Return is the percent change in value (including andy dividends) of an instrument. The \"\"trailing 12-month\"\" means that your starting point is the value 12 months ago. So the formula is: where V is the value of the instrument on the reference date, V0 is the value of the instrument 12 months prior to the reference date, and D is the amount of dividends paid between the two dates.\"", "title": "" }, { "docid": "06724d4ce9c252533e99ccea2c29973c", "text": "If I is the initial deposit, P the periodic deposit, r the rent per period, n the number of periods, and F the final value, than we can combine two formulas into one to get the following answer: F = I(1+r)n + P[(1+r)n-1]/r In this case, you get V = 1000(1.05)20 + 100*[(1.05)20-1]/0.05 = 5959.89 USD. Note that the actual final value may be lower because of rounding errors.", "title": "" }, { "docid": "5d7fd2ab75b51e221d3095eeb756341c", "text": "So for quarters So, if Q1's value was 10 and Q2's value was 25 For closing or opening prices, I would use closing prices. For instance, some used Adjusted Close or Close on Yahoo Finance (see this example of AAPL). Added Note: In your example, for your example, you'll want to take the absolute value of the denominator (aka: divisor), so an Excel formula might look like the below example ... ... where the new and old are cells.", "title": "" }, { "docid": "acfd957236e4e0b5a3ca51e6a9fd99e6", "text": "Apparently it's based on either the address of the seller or vendor or your shipping address; from the AccurateTax.com blog post Destination and Origin Based Sales Tax: ... a few states have laws that are origin-based, where products that are shipped to the customer are taxed based on the location of the business itself. As of this writing, these states are Most states use destination-based sales tax, which defines the source of the transaction to be the destination at which the product will eventually be used, or the address to which the product is shipped. ... The following states [and districts] operate on a destination-based model at the time of this writing: The page Do I Charge Sales Tax or Not? from about.com seems to (somewhat) clarify that if the business is located in a state (or other jurisdiction) with an origin-based sales tax, then they will charge you the sales tax for their state and, presumably, not the sales tax for the state of the shipping address.", "title": "" }, { "docid": "398402f51ec457500408822627b1c4f2", "text": "Here's how capital gains are totaled: Long and Short Term. Capital gains and losses are either long-term or short-term. It depends on how long the taxpayer holds the property. If the taxpayer holds it for one year or less, the gain or loss is short-term. Net Capital Gain. If a taxpayer’s long-term gains are more than their long-term losses, the difference between the two is a net long-term capital gain. If the net long-term capital gain is more than the net short-term capital loss, the taxpayer has a net capital gain. So your net long-term gains (from all investments, through all brokers) are offset by any net short-term loss. Short term gains are taxed separately at a higher rate. I'm trying to avoid realizing a long term capital gain, but at the same time trade the stock. If you close in the next year, one of two things will happen - either the stock will go down, and you'll have short-term gains on the short, or the stock will go up, and you'll have short-term losses on the short that will offset the gains on the stock. So I don;t see how it reduces your tax liability. At best it defers it.", "title": "" } ]	fiqa
878237f89199edb1358a0b70b7f3b030	Might I need a credit score to rent, or for any other non-borrowing finances?	[ { "docid": "2a7deb3d6c5891fea008a3d261740e7d", "text": "\"Credit scores are not such a big deal in Canada as they are in the US and even some European countries. One reason for this: the Social Insurance Number (SIN number) isn't used for so many purposes like the Social Security Number (SSN) in the US. The SIN number isn't even required to get credit (but with some exceptions it is needed to open an interest-bearing savings account, so that the interest income can be reported). You can refuse to provide the SIN number to most private companies. Canada also has one of the highest per-capita immigration rates of any large country, so new arrivals are expected, and services are geared up for them. Most of the banks offer special deals for \"\"New Canadians\"\". You should get a credit card (even if just a secured credit card) through them with one of these offers to start a credit file anyway, but there's no need to actually use it much. Auto-paying a utility bill through the card, and paying it off in full each month, is one way to keep it active. No need to ever pay any interest. Most major apartment rental firms will expect a good proportion of their renters to be new to Canada, so should have procedures in place to deal with it (such as a higher deposit). You should not give them your SIN for a credit check, even when you're more established. Same for utilities, they can just charge a higher deposit if they can't credit check you. For private landlords, everything is negotiable (but see the laws link at the end of this answer). You will later need a credit rating for a mortgage on a house (if not paying cash), so it's worth getting that one token credit card. Useful for car rental also. Here's a fairly complete summary of the laws on renting in Canada, which includes the maximum deposits that can be asked for, and notice periods.\"", "title": "" }, { "docid": "3b4a71f1757cedfab7de46ccf168bda1", "text": "Alas, institutions do not always act rationally, and being an outlier by never having debt may be bad enough. Therein is your problem. The question, then, is do you want to do business with institutions that are not acting rationally? While I cannot specifically speak to Canadian business practices, I have to imagine that in terms of credit history as a prerequisite to a lease, it can't be too different than America. It is possible to live without a credit score. This is typically done by those with enough resources that do not need to borrow money. To make transactions that commonly use credit scores, such as a lease, they will provide personal financial statements (balance sheets, personal income statements, bank statements, pay stubs, tax returns, etc...) to show that they are credit-worthy. References from prior landlords may also be beneficial. Again, the caveat is to elect to only conduct business with those individuals and institutions that are intelligent and rational enough to be able to analyze your financial position (and ability to pay) without a credit score. Therefore, you'll probably have better luck working with individual landlords, as opposed to corporate-owned rental complexes.", "title": "" }, { "docid": "061be53a5ccdf30b62fe64def74bd484", "text": "Typically one wants to see a credit score, just because you may have money in the bank and decent income does not mean your going to pay, there are plenty of people who have the money but simply refuse to cough it up. Credit is simply a relative way of seeing where one fits against another in a larger group, it shows that this person not only can pay, but does pay. While not having a credit history should make no difference, I can and hopefully easily posited above why it can be necessary to have one. Not all landlords will require a credit check, I was not required to give one, I did not have much credit to begin with, given that, I was forced to cough up a higher degree of a security deposit.", "title": "" } ]	[ { "docid": "d74a74d5aeabef3044cf1f4454d7077d", "text": "Need is a strong word. As far as merchants are concerned, if they accept, e.g., Visa credit, they will accept Visa Debit. The reverse is not necessarily true. Up until lately, Aldi would only accept debit cards (credit cards have higher merchant fees), and when I used to got to Sam's Club, they would accept Visa debit, but not credit (they had/have an exclusive deal with Discover for credit). So, yes, they can tell from the card number whether it's credit or debit. However, I've never heard of a case of the situation being biased against debit.* That said there are some advantages to having a credit card: ETA: I don't know how credit history works in the EU, but in the US having open credit accounts definitely does affect your credit score which directly affects what rate you can get for a mortgage. *ETA_2: As mentioned in the comments and another answer, car rentals will often require credit cards and not debit (Makes sense to me that they would want to make sure they can get their money if there is damage to the car). Many credit cards do include rental car insurance if you use it to pay for your rental, so that's another potential advantage for credit cards.", "title": "" }, { "docid": "2548412c71407b02dd63b488ad8538f5", "text": "No, don't open a credit card. Get used to paying cash for everything from the beginning. The best situation you can be in is not to have any credit. When it comes time to buy a house, put down %30 percent and your 0 credit score won't matter. This will keep you within your means, and, with governments gathering more and more data, help preserve your anonimity.", "title": "" }, { "docid": "3b64b7488d616ae026c37b3cf64919b2", "text": "In addition to the already good answers: I am assuming you are playing a long game and have no specific need for a high credit score in the next couple of years. This list is just good practice that will raise you score.", "title": "" }, { "docid": "7377d2268dcb7cd6f476d5923bce0e6a", "text": "Slightly abbreviated version of the guidance from NOLO.com California state law limits credit check or application screening fees landlords can charge prospective tenants and specifies what landlords must do when accepting these types of fees. (Cal. Civ. Code § 1950.6.) Here are key provisions: I am not a lawyer, but it would seem you have two options if you catch a landlord violating these rules. An idea to avoid the whole problem in the first place: Get a copy of your credit report yourself and take a copy with you to meet the landlord. If they want an application fee, ask why they need it making it clear you know the above law. If they say for a credit report offer to give them a copy in lieu of the fee.", "title": "" }, { "docid": "4f7d7b47297fe882b41f5d99354d601a", "text": "\"Credit Unions have long advocated their services based on the fact that they consider your \"\"character.\"\" Unfortunately, they are then at a loss to explain how they determine the value of your character, other than to say that you're buddies & play pool together so they'll give you a loan. Your Credit History / Score is as accurate a representation of your character in business dealings as can be meaningfully quantified. It tracks your ability to effectively use and manage debt, and your propensity to pay it back responsibly or default on obligations. While it isn't perfect, it is certainly one of the best means currently available for determining someone's trustworthiness when it comes to financial matters.\"", "title": "" }, { "docid": "6de2264a0a9d82015be6c5d897c27ebd", "text": "I have a car loan paid in full and even paid off early, and 2 personal loans paid in full from my credit union that don't seem to reflect in a positive way and all 3 were in good standing. But you also My credit card utilization is 95%. I have a total of 4 store credit cards, a car loan, 2 personal loans. So assuming no overlap, you've paid off three of your ten loans (30%). And you still have 95% utilization. What would you do if you were laid off for six months? Regardless of payment history, you would most likely stop making payments on your loans. This is why your credit score is bad. You are in fact a credit risk. Not due to payment history. If your payment history was bad, you'd likely rank worse. But simple fiscal reality is that you are an adverse event away from serious fiscal problems. For that matter, the very point that you are considering bankruptcy says that they are right to give you a poor score. Bankruptcy has adverse effects on you, but for your creditors it means that many of them will never get paid or get paid less than what they loaned. The hard advice that we can give is to reduce your expenses. Stop going to restaurants. Prepare breakfast and supper from scratch and bag your lunch. Don't put new expenses on your credit cards unless you can pay them this month. Cut up your store cards and don't shop for anything but necessities. Whatever durables (furniture, appliances, clothes, shoes, etc.) you have now should be enough for the next year or so. Cut your expenses. Have premium channels on your cable or the extra fast internet? Drop back to the minimum instead. Turn the heat down and the A/C temperature up (so it cools less). Turn off the lights if you aren't using them. If you move, move to a cheaper apartment. Nothing to do? Get a second job. That will not only keep you from being bored, it will help with your financial issues. Bankruptcy will not itself fix the problems you describe. You are living beyond your means. Bankruptcy might make you stop living beyond your means. But it won't fix the problem that you make less money than you want to spend. Only you can do that. Better to stop the spending now rather than waiting until bankruptcy makes your credit even worse and forces you to cut spending. If you have extra money at the end of the month, pick the worst loan and pay as much of it as you can. By worst, I mean the one with the worst terms going forward. Highest interest rate, etc. If two loans have the same rate, pay the smaller one first. Once you pay off that loan, it will increase the amount of money you have left to pay off your other loans. This is called the debt snowball (snowball effect). After you finish paying off your debt, save up six months worth of expenses or income. These will be your emergency savings. Once you have your emergency fund, write out a budget and stick to it. You can buy anything you want, so long as it fits in your budget. Avoid borrowing unless absolutely necessary. Instead, save your money for bigger purchases. With savings, you not only avoid paying interest, you may actually get paid interest. Even if it's a low rate, paid to you is better than paying someone else. One of the largest effects of bankruptcy is that it forces you to act like this. They offer you even less credit at worse terms. You won't be able to shop on credit anymore. No new car loan. No mortgage. No nice clothes on credit. So why declare bankruptcy? Take charge of your spending now rather than waiting until you can't do anything else.", "title": "" }, { "docid": "7dde74392ae43418f5636c60a710d5c6", "text": "\"I'm not aware that any US bank has any way to access your credit rating in France (especially as you basically don't have one!). In the US, banks are not the only way to get finance for a home. In many regions, there are plenty of \"\"owner financed\"\" or \"\"Owner will carry\"\" homes. For these, the previous owner will provide a private mortgage for the balance if you have a large (25%+) downpayment. No strict lending rules, no fancy credit scoring systems, just a large enough downpayment so they know they'll get their money back if they have to foreclose. For the seller, it's a way to shift a house that is hard to sell plus get a regular income. Often this mortgage is for only 3-10 years, but that gives you the time to establish more credit and then refinance. Maybe the interest rate is a little higher also, but again it's just until you can refinance to something better (or sell other assets then pay the loan off quick). For new homes, the builders/developers may offer similar finance. For both owner-will-carry and developer finance, a large deposit will trump any credit rating concerns. There is usually a simplified foreclosure process, so they're not really taking much of a risk, so can afford to be flexible. Make sure the owner mortgage is via a title company, trust company, or escrow company, so that there's a third party involved to ensure each party lives up to their obligations.\"", "title": "" }, { "docid": "15c158701768c423b56c2ce8adef5483", "text": "I also am paying roughly twice as much in rent as a mortgage payment would be on the type of house I have been looking at, so I'd really like to purchase a house if possible. Sounds like I need to rain on your parade a bit: there's a lot more to owning a house than the mortgage. Property tax, insurance, PMI, and maintenance are things that throw this off. You'll also be paying more interest than normal given your recent credit history. It's still possible that buying is better than renting, but one really should run the detailed math on this. For example, looking at houses around where I live, insurance, property tax and special assessments over the course of a year roughly equal the mortgage payments annually. You probably won't be able to get a loan just yet. If you've just started your new job it will take a while to build a documentable income history sufficient for lenders. But take heart! As you take the next year to save up a down payment / build up an emergency fund you'll discover that credit score improves with time. However, it's crucial that you don't do anything to mess with the score. Pay all your bills on time. Don't take out a car loan. Don't close your old revolving accounts. But most of all, don't worry. Rent hurts (I rent too) but in many parts of the US owning hurts more, as your property values fall. A house down the street from my dear old mother has been on the market for several months at a price 33 percent lower than her most recent appraisals. I'm comfortable waiting until markets stabilize / start rising before jumping on real estate.", "title": "" }, { "docid": "879a2f9d08d157b5b6885499455c88a8", "text": "Generally, banks will report your loan to at least one (if not all three) credit bureaus - although that is not required by law. The interest you're paying, in addition to your insurance isn't justifiable for building credit. I would recommend paying the car off and then perhaps applying for a secure credit card if you are worried about being rejected. Of course, since you have very little credit, applying for an unsecured card and getting rejected won't hurt you in the long run. If you are rejected, you can always go for a secured credit card the second time. As I mentioned in my comments, it's better to show 6 months of on-time payments than to have no payment history at all. So if your goal is to secure an apartment near campus, I'm sure you're already a step ahead of the other students.", "title": "" }, { "docid": "9cc74c0c1cae2db291c3e93b4ee0c806", "text": "If you give me $216k to trash my credit report, I'll take it every time. People place too much value on the ability to borrow rather than having cash up front. I never pay interest (I do use a credit card and pay it off every month). Why would you need to borrow money if you effectively got handed $200k? Of course, if your networth went from -$200k to 0, you are still broke. But considering that you were in that situation in the first place, the inability to borrow money may be a good thing.", "title": "" }, { "docid": "d801729d04778965283fda70247d647c", "text": "Exactly, it's not like there's a shortage of rental properties or housing opportunities. There are a few hundred (if not thousand) within a 5 mile radius of my house alone, and they certainly don't all have the same terms. Maybe you're not going to get into a gated white collar community, but I'm pretty sure you can secure a nice place in a nice neighborhood even if your credit score is somewhere between ass and the toilet.", "title": "" }, { "docid": "8bba82847005e0638501d794ffa3685d", "text": "\"0% furniture loans can hurt your credit rating. I was told by a bank mortgage officer (sorry I can't cite a document) that credit rating algorithms consider \"\"consumer\"\" loans like 0% appliance loans and certain store-specific credit cards as a negative factor, lowering your overall score. The rationalization given was that that taking that type of credit is an indicator that you have zero cash reserves. The actual algorithms are proprietary, so I don't know how you could verify this. If true, it runs counter to the conventional wisdom that getting credit and then paying it off builds your credit score.\"", "title": "" }, { "docid": "426732136eca3b2ab7cf31da061c990a", "text": "I'm the contrarian in the crowd. I think credit scores and debt are the closest thing to evil incarnate. You're in good company. The absence of a credit score simply means the agencies have insufficient data in their behavioral model to determine how profitable your business would be to the bank. The higher your score, the more likely the bank is to make a profit from your loan. IMHO, you're better off building up cash and investment reserves than a credit history. With sufficient reserves, you will be able to shop around for a bank that will give you a good rate, if you ever do need a loan. You'll be surprised at how quickly you get in a position where you don't need a loan if you save and invest wisely. I used to have a (high) credit score, and I was miserable about it because there were always bills due. I gave up debt 14 years ago, paid the last debt 7 years ago, and have never. been happier. Raising kids without debt (or credit score) is much more fun than with debt.", "title": "" }, { "docid": "7f2df010c429e9e77f625177d0a9d392", "text": "\"US based so I don't know how closely this translates to the UK, but generally speaking there are three things that contribute to a strong credit score. Length/volume of credit history. This is a combination of how many accounts appear in your history along with how long they have been open. Having a series of accounts that were maintained in good standing looks better than only having one. Maintaining an account in good standing for a prolonged period (3+ years) is better than a bunch of short term items. \"\"Ideally\"\" your credit history should contain a mix of term loans that were paid per contract and a few (1?) revolving account that shows ongoing use. The goal is to show that you can handle ongoing obligations responsibly, and manage multiple things at the same time. Utilization. Or how much you currently owe vs how much people have agreed to lend you. Being close to your limits raises questions about whether or not you can really handle the additional debt. Having large availability raises questions about whether you would be able to handle it if you suddenly maxed things out. Finding the correct middle point can be challenging, the numbers I have seen thrown around most by the \"\"experts\"\" is 20-30% utilization. Recent Activity. Or how much new debt have you taken on? If someone is opening lots of new accounts it raises red flags. Shopping around for a deal on a auto loan or mortgage before settling on one is fine. Opening 5 new credit lines in the past 6 months, probably going to knock you down a bit. One of the concerns here is have you had the accounts long enough to demonstrate that you will be able to handle them in the long term. One route that was suggested to me in my early years was to go take out a 6mo loan from a bank, and just place the money in a CD while I made the payments. Then repeat with a longer term. Worst case, you can cash out the CD to pay off the loan in an emergency, but otherwise it helps show the type of history they are looking for. All that said, I have to agree with Pete B's answer. Don't play the credit game if you don't really need to. Or play it just enough to stay in the game and plan your finances to avoid relying on it. (Advice I wish I had taken long ago.)\"", "title": "" }, { "docid": "c23a1e24ab98e5bdc93c4eaa97a24cd2", "text": "It may or may not be a good idea to borrow money from your family; there are many factors to consider here, not the least of which is what you would do if you got in serious financial trouble and couldn't make your scheduled payments on the loan. Would you arrange with them to sell the property ASAP? Or could they easily manage for a few months without your scheduled payments if it were necessary? A good rule of thumb that some people follow when lending to family is this: don't do it unless you're 100% OK with the possibility that they might not pay you back at all. That said, your question was about credit scores specifically. Having a mortgage and making on-time payments would factor into your score, but not significantly more heavily than having revolving credit (eg a credit card) and making on time payments, or having a car loan or installment loan and making on time payments. I bought my house in 2011, and after years of paying the mortgage on time my credit score hasn't changed at all. MyFico has a breakdown of factors affecting your credit score here: http://www.myfico.com/crediteducation/whatsinyourscore.aspx. The most significant are a history of on-time payments, low revolving credit utilization (carrying a $4900 balance on a card with a $5000 limit is bad, carrying a $10 balance on the same card is good), and overall length of your credit history. As to credit mix, they have this to say: Types of credit in use Credit mix determines 10% of my FICO Score The FICO® Score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. It's not necessary to have one of each, and it's not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your FICO Score—but it will be more important if your credit report does not have a lot of other information on which to base a score. Have credit cards – but manage them responsibly Having credit cards and installment loans with a good payment history will raise your FICO Score. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly.", "title": "" } ]	fiqa
9382414b39110a301182bc7da416756b	How to properly report income without 1099-MISC	[ { "docid": "b21dfeda453e019b67382d2c7e496610", "text": "You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.", "title": "" } ]	[ { "docid": "1406ad7d12bc3a17399d0be238045b5b", "text": "I am surprised no one has mentioned the two biggest things (in my opinion). Or I should say, the two biggest things to me. First, 1099 have to file quarterly self employment taxes. I do not know for certain but I have heard that often times you will end up paying more this way then even a W-2 employees. Second, an LLC allows you to deduct business expenses off the top prior to determining what you pay in taxes as pass-through income. With 1099 you pay the same taxes regardless of your business expenses unless they are specifically allowed as a 1099 contractor (which most are not I believe). So what you should really do is figure out the expense you incur as a result of doing your business and check with an accountant to see if those expenses would be deductible in an LLC and if it offsets a decent amount of your income to see if it would be worth it. But I have read a lot of books and listened to a lot of interviews about wealthy people and most deal in companies not contracts. Most would open a new business and add clients rather than dealing in 1099 contracts. Just my two cents... Good luck and much prosperity.", "title": "" }, { "docid": "0fb8ad9020bf14fbf901fe9c1f18a4c4", "text": "\"If you receive a 1099-MISC from YouTube, that tells you what they stated to the IRS and leads into most tax preparation software guided interviews or wizards as a topic for you to enter. Whether or not you have a 1099-MISC, this discussion from the IRS is pertinent to your question. You could probably elect to report the income as a royalty on your copyrighted work of art on Schedule E, but see this note: \"\"In most cases you report royalties in Part I of Schedule E (Form 1040). However, if you ... are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).\"\" Whether reporting on Schedule E or C is more correct or better for your specific circumstances is beyond the advice you should take from strangers on the internet based on a general question - however, know that there are potentially several paths for you. Note that this is revenue from a business, so if you paid for equipment or services that are 100% dedicated to your YouTubing (PC, webcam, upgraded broadband, video editing software, vehicle miles to a shoot, props, etc.) then these are a combination of depreciable capital investments and expenses you can report against the income, reducing the taxes you may owe. If the equipment/services are used for business and personal use, there are further guidelines from the IRS as to estimating the split. These apply whether you report on Sch. E, Sch. C, or Sch C-EZ. Quote: \"\"Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.\"\"\"", "title": "" }, { "docid": "11aa0d830ce41e174690756c06ce534f", "text": "(do I need to get a W9 from our suppliers)? Will PayPal or Shopify send me a 1099k or something? Do not assume that you'll get paperwork from anyone. Do assume that you have to generate your own paperwork. Ideally you should print out some kind of record of each transaction. Note that it can be hard to view older transactions in PayPal, so start now. If you can't document something, write up a piece of paper showing the state of the world to the best of your knowledge. Do assume that you need separate receipts for each expenditure. The PayPal receipt might be enough (but print it in case the IRS wants to see it). A receipt from the vendor would be better (again, print it if it is online now). A CPA is not strictly necessary. A CPA is certified (the C in CPA) to formally audit the books of a corporation. In your case, any accountant would be legally sufficient. You still may want to use a CPA, as the certification, while technically unnecessary, still demonstrates knowledge. You may otherwise not be in a position to evaluate an accountant. A compromise option is to go to a firm that includes a CPA and then let them assign you to someone else to process the actual taxes. You are going to have to fill out some business tax forms. In particular, I would expect a schedule C. That's where you would show revenues and expenses. You may well have to file other forms as well.", "title": "" }, { "docid": "b45d5ec4b229bc9bf365f2b849ee8988", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"", "title": "" }, { "docid": "e863c8d274a0822740d59a90181625e4", "text": "Per IRS regulations, if your stipend is not paying you for qualified expenses (primarily, tuition and books; explicitly not room and board or travel), it is taxable. It doesn't require self-employment taxes (which are Medicare and FICA, normally paid in part by an employer), but it is taxable income from an income tax perspective. You can generally deduct your books and such if you have your receipts - expenses 'required' by the institution for the coursework. Do verify that the amount on the 1099-MISC reflects what you actually received in cash above and beyond the tuition waiver - don't assume the college did this the way you expect, or even properly. Your bank statements should match the amount on the form. You should definitely include it in your gross income and pay taxes on it. If you received alternate instruction, you should clarify that with the people doing the filing, and follow up with a supervisor perhaps (it's possible the volunteers helping at an event like this aren't familiar with this part of tax preparation). (Source, in addition to IRS regulations - I was my wife's tax preparer many of the years she was in her Ph.D. program.)", "title": "" }, { "docid": "f3af1afbfbdf47f2c1f93b4371879912", "text": "There are many different types of 1099 forms. Since you are comparing it to a W-2, I'm assuming you are talking about a 1099-MISC form. Independent contractor income If you are a worker earning a salary or wage, your employer reports your annual earnings at year-end on Form W-2. However, if you are an independent contractor or self-employed you will receive a Form 1099-MISC from each client that pays you at least $600 during the tax year. For example, if you are a freelance writer, consultant or artist, you hire yourself out to individuals or companies on a contract basis. The income you receive from each job you take should be reported to you on Form 1099-MISC. When you prepare your tax return, the IRS requires you to report all of this income and pay income tax on it. So even if you receive a 1099-MISC form, you are required to pay taxes on it.", "title": "" }, { "docid": "4a4ea401a7db431a02f515cee6f65660", "text": "\"You can report it as illegal income and you don't have to elaborate any further. For instance, spirit the cash off to a state where pot is legal and set up a dispensary. That is not legal at the Federal level, so it is in fact \"\"illegal income\"\" vis-a-vis your Form 1040 and that's all you say. Make sure you look, walk, and quack like a fairly successful pot distributor. That will most likely be the end of their inquiry, since they're not terribly driven to investigate the income you do report. Having to give 33% of it to the IRS is generally strong motivation for folks to not report fake income. You're not claiming the money is from pot, you're allowing them to infer it.\"", "title": "" }, { "docid": "8f5439eccba9927dbad2c3edb01e31dd", "text": "Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return.", "title": "" }, { "docid": "1b9fe28c51270b476811f2bf99389add", "text": "The correct, legal way to handle this would be to file an amended return for that year (probably best to talk to a CPA). If you don't have the 1099, the IRS has a process to handle that here. It sounds like they would just try to contact the employer themselves, but it doesn't say exactly what would happen if the employer is out of business.", "title": "" }, { "docid": "4f26c99c0f284399995f478057ab7b24", "text": "One of the triggers for audit is when the IRS can't match 1099 income to the tax return. Whoever got the 1099 in her name should include that income on her return.", "title": "" }, { "docid": "45390f1ecd215cbde66ecaa8e7578bd6", "text": "\"Gifts given and received between business partners or employers/employees are treated as income, if they are beyond minimal value. If your boss gives you a gift, s/he should include it as part of your taxable wages for payroll purposes - which means that some of your wages should be withheld to cover income, social security, and Medicare taxes on it. At the end of the year, the value of the gift should be included in Box 1 (wages) of your form W-2. Assuming that's the case, you don't need to do anything special. A 1099-MISC would not be appropriate because you are an employee of your boss - so the two of you need to address the full panoply of employment taxes, not just income tax, which would be the result if the payment were reported on 1099-MISC. If the employer wants to cover the cost to you of the taxes on the gift, they'll need to \"\"gross up\"\" your pay to cover it. Let's say your employer gives you a gift worth $100, and you're in a 25% tax bracket. Your employer has to give you $125 so that you end up with a gain of $100. But the extra $25 is taxable, too, so your employer will need to add on an extra $6.25 to cover the 25% tax on the $25. But, wait, now we've gotta pay 25% tax on the $6.25, so they add an extra $1.56 to cover that tax. And now they've gotta pay an extra $.39 . . . The formula to calculate the gross-up amount is: where [TAX RATE] is the tax rate expressed as a percentage. So, to get the grossed-up amount for a $100 gift in a 25% bracket, we'd calculate 1/(1-.25), or 1/.75, or 1.333, multiply that by the target gift amount of $100, and end up with $133.33. The equation is a little uglier if you have to pay state income taxes that are deductible on the federal return but it's a similar principle. The entire $133.33 would then be reported as income, but the net effect on the employee is that they're $100 richer after taxes. The \"\"gross-up\"\" idea can be quite complicated if you dig into the details - there are some circumstances where an additional few dollars of income can have an unexpected impact on a tax return, in a fashion not obvious from looking at the tax table. If the employer doesn't include the gift in Box 1 on the W-2 but you want to pay taxes on it anyway, include the amount in Line 7 on the 1040 as if it had been on a W-2, and fill out form 8919 to calculate the FICA taxes that should have been withheld.\"", "title": "" }, { "docid": "9346e3e432cbd31c696b86e795de9aa7", "text": "Are the amounts in those boxes taxes that have already been removed? Yes. If they are, how do I report these totals? When I entered the information from the 1099-MISC, it only asked for the total, and didn't ask for (what I thought were) the taxes already taken out. It should appear on your 1040 line 64 (and similar line on your State tax return). If the program doesn't ask for all the 1099 fields (which is stupid), you can add it as additional taxes paid in the Credits section, somewhere in the area where they ask about estimated payments etc.", "title": "" }, { "docid": "0b01955977794a02a7d27bdbfa46c7c1", "text": "Contractors regularly deposit checks like this; if the income is legitimate don't worry. Report it to the IRS as income whether or not the customer issues you a 1099. With deposits like this you should be making quarterly payments to the IRS for your projected income.", "title": "" }, { "docid": "b4bdf77bd6c433338ae2798676b50331", "text": "\"There are many people who have deductions far above the standard deduction, but still don't itemize. That's their option even though it comes at a cost. It may be foolish, but it's not illegal. If @littleadv citation is correct, the 'under penalty of perjury' type issue, what of those filers who file a Schedule A but purposely leave off their donations? I've seen many people discuss charity, and write that they do not want to benefit in any way from their donation, yet, still Schedule A their mortgage and property tax. Their returns are therefore fraudulent. I am curious to find a situation in which the taxpayer benefits from such a purposeful oversight, or, better still, a cited case where they were charged with doing so. I've offered advice on filings return that wasn't \"\"truthful\"\". When you own a stock and cannot find cost basis, there are times that you might realize the basis is so low that just entering zero will cost you less than $100 in extra tax. You are not truthful, of course, but this kind of false statement isn't going to lead to any issue. If it gets noticed within an audit, no agent is going to give it more than a moment of time and perhaps suggest, \"\"you didn't even know the year it was bought?\"\" but there would be no consequence. My answer is for personal returns, I'm sure for business, accuracy to the dollar is actually important.\"", "title": "" }, { "docid": "aa54fda0a92cf027e4c6bb162493e245", "text": "The higher the debt, the higher inflation needs to be to wash the debt away. This is why the debt and US equities move upward hand in hand. The same goes for US housing. Just as homeowners borrow money through mortgages so that house prices rise, the banks borrow the money for mortgages through the central banks. Thus, the cycle circulates. The more debt, the higher the prices! Everybody makes money from debt. That is why the US has the highest external debt on the globe, yet they are considered one of the wealthiest countries in the world.", "title": "" } ]	fiqa
2553da0448e47d1b1d82d9ead613345e	Can I deduct work equipment I am not required to purchase by my employer?	[ { "docid": "84fb32f8ad53e211bbdd5f4eb31af3c8", "text": "No, you cannot. You can only deduct expenses that the employer required from you, are used solely for the employer's (not your!) benefit, you were not reimbursed for them and they're above the 2% AGI threshold. And that - only if you're itemizing your deductions.", "title": "" }, { "docid": "77c89a3b0b819cb75b041ceea06508d1", "text": "\"Old question, but in the comments of the accepted answer, I believe Nate Eldredge is correct and littleadv is incorrect. Nate copied the actual quote from the IRS guidelines, quoted below: An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. Noise cancelling headphones certainly count as \"\"appropriate and helpful to your business\"\" in the software industry, especially with the trend of open office layouts. And because of the ubiquitous distractions inherent in the aforementioned office space, noise cancelling headphones are becoming quite \"\"common and accepted\"\" for use by developers. I'd be more hesitant about the keyboard and monitor, as presumably the employer is providing those already. As using your own could be said to just be a personal preference over those provided, the argument that providing your own version is \"\"appropriate and helpful\"\" is a little more shaky. I am not a tax lawyer, so don't come after me if you get audited, but my guess from reading the actual IRS guidelines is noise cancelling headphones: probably, keyboard and monitor: maybe.\"", "title": "" } ]	[ { "docid": "3772f20a1d02c1a4ae8fc6aef9e9d331", "text": "\"You can deduct what you pay for your own and your family's health insurance regardless of whether it is subsidized by your employer or not, as well as all other medical and dental expenses for your family, as an itemized deduction on Schedule A of Form 1040, but only to the extent that the total exceeds 7.5% of your Adjusted Gross Income (AGI) (10% on tax returns for year 2013 onwards). As pointed out in KeithB's comment, you cannot deduct any health insurance premium (or other medical expense) that was paid for out of pre-tax dollars, nor indeed can you deduct any medical expense to the extent that it was paid for by the insurance company directly to hospital or doctor (or reimbursed to you) for a covered expense; e.g. if the insurance company reimbursed you $72 for a claim for a doctor's visit for which you paid $100 to the doctor, only $28 goes on Schedule A to be added to the amount that you will be comparing to the 7.5% of AGI threshold, and the $72 is not income to you that needs to be reported on Form 1040. Depending on other items on Schedule A, your total itemized deductions might not exceed the standard deduction, in which case you will likely choose to use the standard deduction. In this case, you \"\"lose\"\" the deduction for medical expenses as well as all other expenses deductible on Schedule A. Summary of some of the discussions in the comments Health care insurance premiums cannot be paid for from HSA accounts (IRS Pub 969, page 8, column 2, near the bottom) though there are some exceptions. Nor can health care insurance premiums be paid from an FSA account (IRS Pub 969, page 17, column 1, near the top). If you have a business on the side and file a Schedule C as a self-employed person, you can buy medical insurance for that business's employees (and their families too, if you like) as an employment benefit, and pay for it out of the income of the Schedule C business, (thus saving on taxes). But be aware that if you have employees other than yourself in the side business, they would need to be covered by the same policy too. You can even decide to pay all medical expenses of your employees and their families too (no 7.5% limitation there!) as an employment benefit but again, you cannot discriminate against other employees (if any) of the Schedule C business in this matter. Of course, all this money that reduced your Schedule C income does not go on Schedule A at all. If your employer permits your family to be covered under its health insurance plan (for a cost, of course), check whether you are allowed to pay for the insurance with pre-tax dollars. The private (non-Schedule C) insurance would, of course, be paid for with post-tax dollars. I would doubt that you would be able to save enough money on taxes to make up the difference between $1330/month and $600/month, but it might also be that the private insurance policy covers a lot less than your employer's policy does. As a rule of thumb, group insurance through an employer can be expected to offer better coverage than privately purchased insurance. Whether the added coverage is worth the additional cost is a different matter. But while considering this matter, keep in mind that privately purchased insurance is not always guaranteed to be renewable, and a company might decline to renew a policy if there were a large number of claims. A replacement policy might not cover pre-existing conditions for some time (six months? a year?) or maybe even permanently. So, do consider these aspects as well. Of course, an employer can also change health insurance plans or drop them entirely as an employment benefit (or you might quit and go work for a different company), but as long as the employer's health plan is in existence, you (and continuing members of your family) cannot be discriminated against and denied coverage under the employer's plan.\"", "title": "" }, { "docid": "01146bc5aa9569a2197f4c8911640786", "text": "\"According to this post on TurboTax forums, you could deduct it as an \"\"Unreimbursed Employee\"\" expense. This would seem consistent with the IRS Guidelines on such deductions: An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary. Office rent is not listed explicitly among the examples of deductible unreimbursed employee expenses, but this doesn't mean it's not allowed. Of course you should check with a tax professional if you want to be sure.\"", "title": "" }, { "docid": "316710461de83750af605d1897addf25", "text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses", "title": "" }, { "docid": "c2c0ee6cdbc67b58bdec4983dbec7a49", "text": "\"It depends on what the \"\"true\"\" reason for the trip is. If you decide to deduct the trip as a business expense, then during an audit you will be asked why you had to go there. If there was nothing accomplished via the travel (that is, you worked from the hotel, met with no clients, visited no tradeshows, etc) then the expense is unlikely to be allowed. Yes, on a business trip you can do sightseeing if you wish (though you can't deduct any sightseeing specific expenses, like admission to a tourist attraction), but if you are just working while on vacation, then the trip itself is not deductible, since there was no business benefit to traveling in the first place.\"", "title": "" }, { "docid": "57134808323233c6e7940de4f58cb839", "text": "For the first four months of the year, when you were an employee, the health insurance premiums were paid for with pre-tax money. When you receive your W-2 at the end of the year, the amount in Box 1 of the W-2 will be reduced by the amount you paid for health insurance. You can't deduct it on your tax return because it has already been deducted for you. Now that you are a 1099 independent contractor, you are self-employed and eligible for the self-employed health insurance deduction. However, as you noted, the COBRA premiums are likely not eligible for this deduction, because the policy is in your old employer's name. See this question for details, but keep in mind that there are conflicting answers on that question.", "title": "" }, { "docid": "af94bde04c5e56fce68e17efd75ae0cc", "text": "The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($100012 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses. Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it.", "title": "" }, { "docid": "fab076774b036cd9084c4f5e2bad63c9", "text": "I'm not an expert, but here's my $0.02. Deductions for business expenses are subject to the 2% rule. In other words, you can only deduct that which exceeds 2% of your AGI (Adjusted Gross Income). For example, say you have an AGI of $50,000, and you buy a laptop that costs $800. You won't get a write-off from that, because 2% of $50,000 is $1,000, and you can only deduct business-related expenses in excess of that $1,000. If you have an AGI of $50,000 and buy a $2,000 laptop, you can deduct a maximum of $1,000 ($2,000 minus 2% of $50,000 is $2,000 - $1,000 = $1,000). Additionally, you can write off the laptop only to the extent that you use it for business. So in other words, if you have an AGI of $50,000 and buy that $2,000 laptop, but only use it 50% for business, you can only write off $500. Theoretically, they can ask for verification of the business use of your laptop. A log or a diary would be what I would provide, but I'm not an IRS agent.", "title": "" }, { "docid": "e71919eebf244df80209ad6edf7db3fd", "text": "\"While COBRA premiums are not eligible to be a \"\"business\"\" expense they can be a medical expense for personal deduction purposes. If you're itemizing your deductions you may be able to deduct that way. However, you will only be able to deduct the portion of the premium that exceeds 10% of your AGI. Are you a full time employee now or are you a 1099 contractor? Do you have access to your employers health plan?\"", "title": "" }, { "docid": "2ec447312a423d5378550f6d87afb5a5", "text": "\"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case. Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the \"\"ordinary\"\" test. And since there are lots of other ways to house a computer other than a car, \"\"necessary\"\" seems problematic also.\"", "title": "" }, { "docid": "b53a96763ca7c8a044099cc57e193c1e", "text": "\"I did a little research and found this article from 2006 by a Villanova law professor, titled \"\"No Thanks, Uncle Sam, You Can Keep Your Tax Break\"\". The final paragraph of the article says: Under these circumstances, it is reasonable to conclude that a taxpayer is not required to claim a allowable deduction unless a statutory provision so requires, or a binding judicial precedent so specifies. It would be unwise, of course, to forego a deduction that the IRS considers mandatory such as those claimed by self-employed individuals with respect to their self-employment, whether for purposes of the self-employment tax or the earned income tax credit. Until the statute is changed or some other binding authority is issued, there is no reason taxpayers who wish to forego deductions, such as the dependency exemption deduction, should hesitate in doing so. (The self-employment tax issues in the quote cited by CQM are explicitly discussed in the article as one of a few special kinds of deduction which are mandatory.) This is not a binding statement: it's not law or even official IRS policy. You could never use it as a defense in the event that this professor turned out to be wrong and the IRS decided to go after you anyway. However, it is a clear statement from a credible, qualified source.\"", "title": "" }, { "docid": "039519230ab375aea3fdd45fc09a3a49", "text": "\"The short answer is yes you can, but you have to make sure you do it correctly. If you are employed by a tech company that does contract work at a separate location and you don't get reimbursed by your employer for travel expenses, you can claim the mileage between your home and location B as a business expense, but there's a catch - you have to subtract the mileage between your home and location A (your employer). So if it's 20 miles from your house to your employer (location A), and 30 miles from your house to the business you're contracting at (location B), you can only claim 10 miles each way (so 20 miles total). Obviously if the distance to location B is closer than your employer (location A), you're out of luck. You will have to itemize to take this deduction, by filling out a Schedule A for itemized deductions and Form 2106 to calculate how much of a deduction for travel expenses you can take. Google \"\"should i itemize\"\", if you're unsure whether to take the Standard Deduction or Itemize. Sources:\"", "title": "" }, { "docid": "94f593b5521152a87c5459a25f4a9088", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"", "title": "" }, { "docid": "4d2b45c67ea6e9995d69ebdd9e3bd65e", "text": "Some of the deductions that are only available as payroll deductions are: There are other deductions you can take if you qualify such as HSA or IRA contributions without any employer help.", "title": "" }, { "docid": "c11d1781a910fe53b160db6f0ac43cb5", "text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate", "title": "" }, { "docid": "15a68028202202a61ad5b69ba02c6f16", "text": "Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.", "title": "" } ]	fiqa
96d284ce81466b888d354ed24f45058b	Are cashiers required to check a credit card for a signature in the U.S.?	[ { "docid": "fd2350e9d1d0244e9c469071fa7541d2", "text": "The signature actually harks back to the days before every business checked every transaction online. When charge cards were introduced modems didn't exist. Nowadays, stolen credit cards are usually reported within 24 hours and the card won't work. Businesses that face low fraud rates don't bother checking. They probably figure that a certain percentage of charges get charged back because the cardholder claims that they didn't make them, and the credit card company usually just passes the cost on to the merchant, so it's really the merchant who should be worried about fraud since he or she is going to pay for it. The real question for the merchant is whether checking signatures actually reduces charge backs. If the credit card is stolen, how hard would it be for thieves to practice the signature on the card a few times until they can reproduce it well enough to fool someone? Businesses that face high fraud rates are often more careful. In New York City, try buying some Nikes on 34th Street, and you'll get your signature checked, your driver's license checked, and they'll call up your 5th grade social studies teacher.", "title": "" }, { "docid": "ebb7dea9e666ea6193564987d81e0107", "text": "\"I'm not sure if they're required to do so, but I have been neglecting to sign my cards for some time now. If they do check, that triggers an ID check, where they'll find my signature. I know of at least one person that writes \"\"see ID\"\" instead of signing their cards. He began that practice over 10 years ago.\"", "title": "" }, { "docid": "9ad235adbc365a7f267a915eb6b63ab2", "text": "Per their merchant agreements, Visa and MasterCard say that the signature on the back of the card is the proper way to identify the card holder. If a card is not signed, the merchant is supposed to check your ID and make you sign the card before accepting it for payment. Merchants are not allowed the require an ID for paying with a signed card. Of course, store employees rarely know all these things. Some will gladly accept an unsigned card. Some will try to make you show your ID.", "title": "" }, { "docid": "62f5fdeefee499722b068437210fedfc", "text": "It depends on the business. Some ask for ID and check against the signature (rare); some ask for ID but barely glance at it; some check just that it's signed (also rare); some ask for me to input my ZIP code on the card reader (KMart); and some don't do anything (most common). What they do doesn't seem connected to whether I put the card in the reader myself, or hand it to the cashier for them to scan. It does seem silly to check IDs, etc., as there are places such as gas stations where I never even see an employee, and can spend just as much there as at WalMart, KMart, or the grocery store, all places that tend to do more checking.", "title": "" }, { "docid": "408321035e37e28e13a3b3933ba797ef", "text": "\"Working retail myself, I do not accept an unsigned card without verification. If I received one I would ask for ID and verify the photo with the Name. I would also let the buyer know it was unsigned and remind them that anyone finding it can sign it and use the card without issue. Putting on the back of the card \"\"SEE ID\"\" is the way buyers have protected themselves from thieves as long as people are actually looking at the cards. How does this protect? 1- a lost card cant be signed by a complete stranger as there is already writing on the card. 2- It provides a photo identification for use. I know with today's technology that this is going away and fewer people are actually checking but shame on those companies who handle the cards and don't look. Obviously this process does not apply to self checks, but safety protocols there require a pin of some form that only the authorized user should know.\"", "title": "" }, { "docid": "fd86c575bf2a438ab2443e2b0eaf8ea1", "text": "So my wife was at work today and got yelled at by both a cop and her managers for simply LOOKING at the card. I don't understand I also work in retail and of course I must see the card to ensure it is a real card, it is a very strict policy that we must have a valid physical card to run any credit/debit transactions. People put skimmers everywhere you use your card and can pick up the info off the strip and put it onto another card and use it without you noticing right away. With the right equipment they can put their name on it or the name on their fake I.d. so the only red flag would be them trying to use several different cards", "title": "" }, { "docid": "2ef149a73103b9af313e0ee816669ff9", "text": "Who cares? If your card gets stolen, most cards provide you with 100% liability protection. Just sign the thing!", "title": "" } ]	[ { "docid": "c05c869e4935166e9ed6d58d4660102f", "text": "\"I looked this up on Wikipedia, and was hoping the answer would be \"\"no - stores cannot refuse legal tender\"\", but unfortunately, it's not the case! If the retailer wants to go to the lengths of refusing certain denominations to protect themselves from counterfeit currency, they are fully within their rights to do so. The \"\"Legal Tender\"\" page on Wikipedia says this about Canadian bills: [...] Retailers in Canada may refuse bank notes without breaking the law. According to legal guidelines, the method of payment has to be mutually agreed upon by the parties involved with the transactions. For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit victims [...] What is interesting about what I found out, is that legal tender cannot be refused if it is in repayment of an existing debt (i.e. not a store transaction for which there existed no previous debt). So you could offload your $100 bills when repaying your Sears credit card account (or pay in pennies if you wanted to!) and they couldn't refuse you!\"", "title": "" }, { "docid": "58798764a5f701a63768787f72841c06", "text": "Chip and Pin cards are popular in Europe, however in the US we don't have them. Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them. Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway).", "title": "" }, { "docid": "23667feab337560ee5ea3323e14c23a9", "text": "\"> The bottom line is that everyone would not mind to enter a PIN to get the transaction through, but a stupid ego trip of the credit card companies who don't want to be \"\"like ATMs\"\". That's it. I mind. If a crook standing behind me in line seems me enter my pin he might then try to mug me for my card outside the store. If he sees me sign my name he's less likely to do that. This is obvious. > That's true... if the amount is over $25. Did you notice it? Actually, at Costco is over $50. That is a relatively new policy a specific few merchants. > so I just put couple of lines... That's got less to do with the screen being unable to comprehend your signature, it could d that if they wanted it to, and the fact that many people have terrible signatures. Look at doctors for example.\"", "title": "" }, { "docid": "7317fb4f46b375b628a969a195c49b5f", "text": "\"At least in the US, a Cashier's Check is just like a regular personal check - only it's guaranteed by the bank itself, so the person accepting it can be pretty certain the check won't be returned for insufficient funds...if the check is genuine! Most banks therefore have a policy for cashier's checks that is very similar to their policies on regular checks and money orders: if you are a member with an account in good standing, they'll make all or part of the money available to you according to their fund availability policy, which is usually anywhere from \"\"immediately\"\" to 7-10 days. With amounts over $5,000, banks will tend to put a hold on the funds to ensure it clears and they get their money. If you are not a member then many banks will refuse to cash the check at all, unless the cashier's check is drawn on on that brand of bank. So if the cashier's check is issued by, say, Chase Bank, Chase banks will usually be willing to cash out the entire check to you immediately (with properly provided ID). Because the bank is guaranteed by them they are able to check their system and ensure the check is real and can clear the check instantly. This policy isn't just up to individual banks entirely, as it is defined by United States federal banking policies and federal regulations on availability of funds. If you really must cash the check without a holding period and won't/can't have a bank account of your own to perform this, then you will generally need to go into a branch of the bank that is guaranteeing the check to be able to cash it out fully right away. Note that since the check might be issued by a bank with no branch near you, you should have a back-up plan. Generally banks will allow you to setup a special/limited savings-only account to deposit your check, even if you don't have a checking account, so if no other option works you might try that as well. The funds availability policies are the same, but at least you'll be able to cash it generally in 10 days time (and then close the account and withdraw your money).\"", "title": "" }, { "docid": "f49afe59c2066b628a48a29923719045", "text": "\"This isn't so much a legal issue, the prohibition on giving discounts was written into the merchant agreements that most of the major credit card companies enforced on businesses that accepted their credit cards. That is, until the recent Financial Reform Bill (2010) passed Congress. It changes everything. (The logic on this is a little convoluted, so read carefully) Credit card companies can no longer prohibit merchants from requiring a minimum purchase amount to use a credit card. Meaning: That if merchants want to, they can now stop taking credit cards for a $4 latte. Credit card companies can no longer prohibit merchants from giving discounts for cash. Here is an article with a lot more detail: Financial Reform Bill Good News for Credit Card Holders Here is a link to the actual bill details and content: HR 4173 - Dodd-Frank Wall Street Reform and Consumer Protection Act Here is the relevant part: This subsection is supposed to take affect \"\"at the end of the 12-month period beginning on the date of the enactment of the Consumer Financial Protection Act of 2010.\"\" In other words, July 21st, 2011.\"", "title": "" }, { "docid": "5decb6a6d267bdd7e47d67861b736515", "text": "The only card I've seen offer this on credit card purchases is Discover. I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays. (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not. It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee. Now I very rarely go to the ATM. What is in it for Discover? They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period. And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business. And happier customers. What is in it for the grocer? Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally.", "title": "" }, { "docid": "14dfd4204061a8a6f575f0f1353fff93", "text": "In my experience, you don't need to endorse a check with a signature to deposit it into your account. You do if you are exchanging the check for cash. Businesses usually have a stamp with their account number on them. Once stamped, those checks are only able to be deposited into that account. Individuals can do the same. I have had issues depositing insurance and government checks in the past that had both my and my wife's name on them. Both of us had to endorse the check to be able to deposit them. I think this was some kind of fraud prevention scheme, so that later one of us couldn't claim they didn't know anything about the check.", "title": "" }, { "docid": "27c36d33072f1f3c03abebb2b95e40c9", "text": "\"Yes. \"\"There is, ...no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.\"\" Taken from the US Department of the Treasury.\"", "title": "" }, { "docid": "120e270553633f80af82609eac83f444", "text": "The U.S. Treasury said the same thing on the lawfulness of retailers refusing legal tender at point of sale - retailers are allowed to refuse any denomination of U.S. currency: [...]all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. [...]", "title": "" }, { "docid": "85a8fa3ea0118924eac2c26224b0fb5d", "text": "\"I believe the banks are protecting themselves when they \"\"require\"\" your endorsement. Years ago. they used to ask for your endorsement, and not require it. If you endorse the check, it legally authorizes them to debit your account, if the check is later returned for non-sufficient funds (NSF). It mostly protects the bank, and not the customer.\"", "title": "" }, { "docid": "5823db14aaace486dab89c419822af6d", "text": "If you go to a grocery store and purchase retail gift cards along with other products, and you pay with a credit card, your credit card company generally does not know what you spent the money on; they don't get an itemized receipt.* If this is the case with your rewards card, then yes, you would get the cashback reward on the gift cards, because all the credit card company knows is that you spent $100 at the grocery store; they don't know (or care, really) that $50 of it was for an Olive Garden gift card. This, of course, should be fairly easy to test. Buy the gift card, wait for your statement, and see if they included the purchase when calculating your rewards. * Note: I don't have an American Express card, but from some quick googling I see that it is possible that American Express does actually receive itemized billing details on your purchases from some merchants. If your grocery store is sending this data to AmEx, it is possible that the gift cards could be excluded from rewards. But again, I suggest you just test it out and see.", "title": "" }, { "docid": "f1ff502edeca8b9aa55cce01a654cb0e", "text": "\"A business can refuse cash (paper currency) payment pretty much in all cases provided it's a reasonable policy and/or notified during/in advance of contracting. Details in this link. \"\"all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.\"\" Even if the payment is being made to settle a debt or other obligation, the creditor may refuse payment if their rationale is reasonable (as determined by the courts).\"", "title": "" }, { "docid": "cad8151c8bf74c3cb7cd47218f79ec3c", "text": "Summarized article: Recent mishaps causing supply disruptions at 14 California refineries caused wholesale gas prices to reach an all-time high of $4.39 per gallon. Local gas stations increased prices to 30 cents or more per gallon overnight, with some stations charging as much as $5.79 per gallon. Some stations chose not to buy high-priced wholesale gas for fear they wouldn't be able to sell it. While others shut off their pumps after they ran out of the gas they bought at lower wholesale prices. Some of the refinery mishaps include an oil pipeline problem, a power outage at Exxon Mobil Corp's Torrance refinery and a shutdown of the crude distillation unit at Chevron Corp's Richmond refinery. It is unknown when wholesale prices will come down but one solution may be to allow refineries to switch over from the summer blend to the cheaper winter blend earlier than planned. The California Energy Commission is considering the idea but notes an early switch over could impact air quality. The summer blend reduces evaporation of pollutants during warm weather which would be less damaging to air quality in California's current heat wave. * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit", "title": "" }, { "docid": "c6c91d59a4fc2f74edce1e2045913676", "text": "Yes, depending on what you're trying to achieve. If its just a symbolic gift - you can use a service like this. There are several companies providing this service, look them up, but the prices are fairly the same. You'll end up getting a real stock certificate, but it will cost a lot of overhead (around $40 to get the certificate, and then another $40 to deposit it into a brokerage account if you want to sell it on a stock exchange). So although the certificate is real and the person whose name on it is a full-blown shareholder, it doesn't actually have much value (unless you buy a Google or Apple stock, where the price is much much higher than the fees). Take into account that it takes around 2 months for the certificate to be issued and mailed to you, so time accordingly. Otherwise, you can open a custodial brokerage account, and use it to buy stocks for the minor. Both ways are secure and legal, each for its own purpose and with its own fees.", "title": "" } ]	fiqa
b8ad0d6bc0ff387775472c3a3c13d615	What's the purpose of having separate checking and savings accounts?	[ { "docid": "a539363d63bb5e87844af2f86642e935", "text": "\"For some people, it's easier to stick to a budget if they have separate checking and savings accounts because they can deposit funds directly into their savings account and not have those funds accessible by debit/credit card, checks, etc. This allows people to pay themselves first and accumulate savings, while making it slightly more difficult to spend those savings on a whim. One a more technical/legal note, one key difference in the United States comes from Regulation D. §204.2(d)(2) of the law limits you to six withdrawals from savings and money market accounts. No such limit exists for checking accounts. Regulation D also forbids banks from paying interest on business checking accounts. In the simplest case, checking accounts and savings accounts are a tradeoff between liquidity and return. Checking accounts are much more liquid, but won't necessarily earn interest, while savings accounts are less liquid because of the withdrawal limits, but earn interest. Nowadays, however, sweep accounts blur this line somewhat because they function like checking accounts, in that you can write an unlimited number of checks, make an unlimited number of withdrawals, etc. but you can also earn interest on your account balance because some or all of the funds are \"\"swept\"\" into an investment account when not in use. The definition of \"\"in use\"\" can vary from business to business and bank to bank.\"", "title": "" }, { "docid": "2141f8cd0a89ca1e520fc0df552b41af", "text": "A checking account is instant access. It can be tapped via check or debit card. A savings account is supposed to be used to accumulate cash for a goal that is is longer term or for an emergency. Many people need to separate these funds into different accounts to be able to know if they are overspending or falling short on their savings. In the United States the Federal Reserve also looks at these accounts differently. Money in a checking account generally can't be used to fund loans, money in a savings account can be used as a source of loans by the bank. An even greater percentage of funds in longer term accounts can be used to fund loans. This includes Certificates of Deposit, and retirement accounts.", "title": "" }, { "docid": "b0233932bf2985e1e93b85ca2cdd8221", "text": "If your debit card/ATM card is stolen or lost, someone else might be able to withdraw money from the checking account that it is tied to, or buy things with the card and have the money taken out of the checking account to pay the merchant. Subject to daily withdrawal limits imposed by your bank, a considerable amount of money could be lost in this way. At least in the US, debit or ATM cards, although they are often branded Mastercard or Visa, do not provide the same level of protection as credit cards for which the liability is limited to $50 until the card is reported as lost or stolen and $0 thereafter. Note also that the money in your savings account is safe, unless you have chosen an automatic overdraft protection feature that automatically transfers money from your savings account into the checking account to cover overdrafts. So that is another reason to keep most of your money in the savings account and only enough for immediately foreseeable needs in the checking account (and to think carefully before accepting automatic overdraft protection offers). These days, with mobile banking available via smartphones and the like, transferring money yourself from savings to checking account as needed might be a preferred way of doing things on the go (until the smartphone is stolen!)", "title": "" }, { "docid": "22d7742a2b993821a7cebeef9029d984", "text": "Additionally, it used to be the case that savings accounts would have a noticeably higher interest than checking accounts (if the checking account paid any at all). So you would attempt to maximize your cash working for you by putting as much as you could into the savings account and then only transferring out what you needed to cover bills, etc into the checking account.", "title": "" } ]	[ { "docid": "5d5e4e1d4f9c4dd063b662a9cce9501c", "text": "\"If you ask ten different couples what they do, depending on a variety of factors, you'll get anywhere between two and ten different answers. One personal finance blogger that I read swears by the fact that he and his wife keep their finances totally separate. His wife has her own retirement account, he has his. His wife has her own checking and savings, he has his. They pay fifty-fifty for expenses and each buy their own \"\"toys\"\" from their own accounts. He views this as valuable for allowing them to have their own personal finance styles, as his wife is a very conservative investor and he is more generous. My spouse and I have mostly combined finances, and view all of our money as joint (even though there are a smattering of accounts between us with just one name on them as holdovers from before we were married). Almost all of our purchasing decisions except regular groceries are joint. I couldn't imagine it any other way. It leaves us both comfortable with our financial situation and forces us to be on the same page with regards to our lifestyle decisions. There's also the ideological view that since we believe marriage united us, we try to live that out. That's just us, though. We don't want to force it on others. Some couples find a balance between joint accounts and his and her fun money stashes. You might find yet another arrangement that works for you, such as the one you already described. What's going to be important is that you realize that all couples have the same six basic arguments, finances being one of them. The trick is in how you disagree. If you can respectfully and thoughtfully discuss your finances together to find the way that has the least friction for you, you're doing well. Some amount of friction is not just normal, it's almost guaranteed.\"", "title": "" }, { "docid": "25d8a6bc03bcee11387a8f0d2e9c1679", "text": "\"As others have said, the decision is a very personal one. Personally, I think you have a good idea. For those of us that thrive in structured systems having a detailed breakdown and distribution of assets is a great idea. I recommend going one step further however. Instead of having a single \"\"Necessities\"\" account have a division here. 1 account for \"\"Bills\"\" and another for \"\"Living Expenses.\"\" Your Bills account should recieve the funds to pay your monthly expenses such as Rent, Utilities, Insurance. Living Expenses is for day to day spending. I recommend this because your Bills are generally a fairly fixed expense. Keeping your flexible spending separate allows you to manage it more carefully and helps prevent overspending. I keep my Living Expenses in cash and divide it up by the number of days before my next check. Every day I put my portion of the Living Expenses in my wallet. This way I know that I can spend as much money in my wallet and still be fine for the rest of the pay period. I also know that if I want to go out to a nice dinner on Friday, it would be helpful if I have money left over at the end of the day Monday through Thursday.\"", "title": "" }, { "docid": "834161fd81c5a093c0ceb941342f316b", "text": "\"Current is another word for Checking, as it is called in the US. Savings account is an interest-bearing account with certain limitations. For example, in the US you cannot withdraw money from it more than 6 times a month. Here is the explanation why. Current account is a \"\"general-use\"\" account on which you can write checks, use ATM/Debit cards and have unlimited transactions. It can also have negative balance (if your bank agrees to let you overdraft, they usually charge huge fees for that though). Checking accounts can have interest as well, but they usually don't, and if they do - it's much lower than the savings account interest.\"", "title": "" }, { "docid": "70ea11dccd38402e5345271ba4ee0a4b", "text": "\"This seems like a risky setup. All it takes is one missed or delayed transfer for you to overdraw your \"\"savings\"\". There is a benefit to keeping your regular expenses and savings separate, and I can see some benefits in having multiple checking accounts depending on how you organize your finances, but I don't see a benefit to having a paycheck go to one account and all regular spending (and \"\"savings\"\") come from another. It requires some regular maintenance to transfer money over to use for regular spending. I suppose if you have a checking account that earns interest, but requires direct deposits, and a savings account that earns slightly higher interest you could squeeze out a bit, but it's probably not worth the effort these days unless you have a LOT of money going in and out. Also, it should not be easy to tap into savings, but your day-to-day spending should be very accessible. All those factors suggest (to me) that your paycheck should go into your regular spending account, and keep your savings separate.\"", "title": "" }, { "docid": "c599ab7cdddfa97073e35b163dcfd664", "text": "My wife and I chose to share all bank accounts and credit cards. We did so because we realized that, over the course of a marriage, the pendulum of who is the primary breadwinner may shift repeatedly. Having one account gets us in the habit of thinking about our needs and wants together and eases any transitions that may come as one or the other of us quits a job/returns to school/reduces hours. I should also say that this system would likely not work well if either partner has semi-compulsive spending/consumption habits. I'd recommend separate bank accounts with a joint account for your mortgage in that situation.", "title": "" }, { "docid": "803d7c76518537f98cceee4def5f663f", "text": "Yes a minor can have a checking account, or a savings account. They can even get a debit card. The money in that bank account belongs to the minor. The account can be established as soon as the are assigned their social security number. If they are a newborn the account is generally set up as a joint account with a parent to facilitate transferring money into the account. For us the money was birthday gifts from relatives. The IRS allows minors to receive small amounts of interest, or other unearned income, tax free. In 2015 that is up to $1,050, if they have no earned income. When bank rates were higher some parent's wanted to put all their saving under their child's name, of course in the eyes of the law the money belonged to the child and was only to be spent for items that benefited the child. Credit cards are another matter because the CARD act in 2009 required lenders to only give credit to those under 21 who had proof of sufficient income, unless there was a co-signer. You do have to be careful when talking about owning a house as minor. They generally can't sign a contract. You could gift the house to the minor, but if it was time to sell it the courts would insist on appointing a legal guardian to represent the interest of the child. That could add significant time to the transaction.", "title": "" }, { "docid": "8ecad338e1109d173bd965ba1f489795", "text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"", "title": "" }, { "docid": "cf57118aba653d98bf7eac3e0d361328", "text": "There is no accounting reason that it should be different, there are likely psychological reasons that it should be, however. Assuming that you live in a western country with good banking regulation, you likely have deposit insurance or a similar scheme. Here in Canada we are covered up to $100,000 in a single account with various limitations. At least my rainy-day account plus savings is nowhere near that, so I'm good to go. That said, however, having a large lump of money in an account you regularly use may tempt you more than you can stand. That iPad, car, home improvement, etc., might be too easy to buy knowing you have relatively easy access to that money. So it really becomes a self-discipline question. Good Luck", "title": "" }, { "docid": "9fb5f84f227bcf9ce8d5c1fe5e39467d", "text": "\"I added \"\"Shared money in account\"\" (SMIA) as sub-account of my bank checking (CA) account and moved current difference to that account so total of CA was not changed but now private and shared money is separated. My cases would be handled the following The only downside I see is that now my balance in CA transaction log do not match exactly with bank so reconciliation will be slightly harder.\"", "title": "" }, { "docid": "ad506b5910152fb05fc69f2320f26b2a", "text": "\"In your comment, you said: It just seems a little stupid to me to go and put away money for the explicit purpose of emergencies (presumably in a way that's somehow different from how you would normally save money). Seems better to go and treat the money as you would normally, and then pull whatever you need from the money that you had saved. The problem with that logic is that people save money for many different things. You might save for a vacation, or a new refrigerator, or a new car, or a house, or your kids' college education. If you \"\"pull whatever you need\"\" for such expenses, you may find that when a real emergency occurs, you don't have enough money. The things you used it for may have been legitimate, reasonable expenses, but nonetheless you may later wish you had deferred those expenses until after you had built up a cushion. So the idea of an emergency fund is to designate certain money that is not to be used for \"\"whatever you need\"\", but specifically for unforeseen circumstances. Of course there can be debate about what counts as an emergency, but the main point is to distinguish saving for planned future expenses from saving for unplanned future expenses. Note that this doesn't mean the money has to be in a separate account, or saved in any special \"\"way\"\". It just means the money has to be considered by you as an emergency fund. For some people, it may be psychologically useful to put the emergency fund in a separate account that they never withdraw from. But even if you just have all your money in one savings account and you mentally tell yourself, \"\"I don't want to ever let the balance drop below $10,000, just so I have a safety cushion\"\" then you are effectively designating that $10,000 as an emergency fund.\"", "title": "" }, { "docid": "eb83cd6d3176913addf1ddabb97b7f53", "text": "\"My wife and I maintain seperate accounts. We have the bills split between us so that certain bills are paid by one of us, and other bills by the other. This is not a perfect 50/50 split as we don't make the same amount of money, but comparable enough that neither feels like they're doing all the bills alone. Our investments are similar. That means we each have a pool of money that we can spend on toys or entertainment as we see fit without overspending. Once my bills are paid and my savings are paid for the month, if I want to go buy some DVDs and my wife wants to buy a new lens for the camera, we don't have to agree. We just use our own money and do it. For us that's led to minimal friction or arguments over what to spend money on, simply because we aren't using the same pool. Getting it work requires getting the split right AND having the mindset that the other person is just as entitled to spend their share of the money as you are to spend yours. It really helps to eliminate issues where she spent money that I expected to be able to spend before I could, which can happen in a joint account. (We have no joint accounts, only things like the mortgage are in both our names.) I've been told by more then one person that how we're doing it is \"\"wrong\"\", but it works a lot better for us then trying to combine finances ever did. I think it also helps that we're younger, and this seems far less common amongst older couples.\"", "title": "" }, { "docid": "50a16dcc61998797147b683df541c8cd", "text": "I think the issue here is you're starting with a criteria that doesn't actually exist in reality. A very small amount of research will uncover a plethora of options for savings accounts that pay far more interest than your basic checking account and don't require you to spend on the balance to earn the interest. The point of saving is to have a pot of money that you can dip in to when you need it, or when you're ready to spend it for it's intended purpose. That pot of money is not supposed to experience a lot of transactions. It shouldn't be commingled with funds that come and go on a daily basis. It doesn't make sense to have checks or a debit card attached to your savings account, because you shouldn't need access to that money that way; not to mention that those two things open the door to fraud on the money that's supposed to be there for you when you need it. Could you put your savings funds in to a checking account, sure. If we lived in a world where savings accounts that don't force you to jump through hoops to avoid fees didn't pay 10x more interest than interest bearing checking accounts that have similar ease of administration, more people may choose to house savings funds in checking accounts; but that's not the world we live in. Thanks to the back and forth in the comments below I'm now more certain of my position that if you want a high yielding checking account you'll have pay fees or initiate a certain number of debit card transactions, or both. No one wants fees, and you shouldn't be spending on your savings in order to earn interest on the balance. It is very easy to juice your savings account to the best rates available.", "title": "" }, { "docid": "ded88302704edac9ccacb87a3e81e195", "text": "Personally, I keep two regular checking accounts at different banks. One gets a direct deposit totaling the sum of my regular monthly bills and a prorated provision for longer term regular bills like semi-annual car insurance premiums. I leave a buffer in the account to account for the odd expensive electrical bill or rate increase or whatever. One gets a direct deposit of the rest which I then allocate to savings and spending. It makes sense to me to separate off regular planned expenses (rent/mortgage, utility bills, insurance premiums) from spending money because it lets me put the basics of my life on autopilot. An added benefit is I have a failover checking account in the event something happens to one of them. I don't keep significant amounts of money in either account and don't give transfer access to the savings accounts that store the bulk of my money. I wear a tinfoil hat when it comes to automatic bank transfers and account access... It doesn't make sense to me to keep deposits separate from spending, it makes less sense to me to spend off of a savings account.", "title": "" }, { "docid": "8ee2f604bae71690b9dd02f5ebd3c2a0", "text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"", "title": "" }, { "docid": "dd33cf6470421860ee098c213b08e658", "text": "\"I opened several free checking accounts at a local credit union. One is a \"\"Deposit\"\" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our \"\"Money Day\"\" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like.\"", "title": "" } ]	fiqa
5d30375112bbf49a66b51136a6dd82de	What happens to your ability to borrow money based on our joint finances?	[ { "docid": "d90b5501dc00d0d5a1a79c878c6279d1", "text": "Several factors are considered in loans as significant as a home mortgage. I believe the most major factors are 1) Credit report, 2) Income, and 3) Employment status If you borrow jointly, all joint factors are included, not just the favorable ones. Some wrinkles this can cause may include: Credit Report - The second person on the loan may have poor credit or no credit. This can/will hurt your rate or even prevent them from being listed on the loan at all, which will also mean you can't include their income. In addition, there are future consequences: that any late payments, default, foreclosure, etc. will be listed on all borrower's reports. If you both have solid work history, great credit, and want to jointly own the home, then there shouldn't be any negatives. If this is not the case, compare both cases (fully, not just rates, as some agents could sneakily say you can get the same rate either way but then not tell you closing costs in one scenario are higher), and pick the one that is best overall. This is just information from my recollection so make sure to verify and ask plenty of questions, don't go forward on assumptions.", "title": "" }, { "docid": "e6992373f1b09191f18ab3bef9dc26b8", "text": "The bank will consider total of both parties income for the loan qualification. Provided both parties will be listed on the mortgage.", "title": "" }, { "docid": "191114aa87beae0c543c032e10e7c271", "text": "It might be worth talking to a mortgage broker, even if you don't actually end up doing business with them. Upfront Mortgage Brokers explained Finding an upfront broker near you In a nutshell, upfront brokers disclose what they are paid for their services openly and transparently. Many brokers don't, and you can't be too careful. But a consultation should be free. An experienced broker can help you to navigate the pros and cons mentioned by the other responders. Personally, I would never do business with a broker who can't/won't show me a rate sheet on the day of the lock. That's my personal acid test. You might be surprised by what the broker has to say regarding your situation. That was my experience, anyway.", "title": "" } ]	[ { "docid": "e5d08e321efc507002eba796822e1af0", "text": "\"Is there any way through this? Yes, but you're not going to like it. If your friend has guaranteed the loans, then it's your friend's obligation to pay them when the brother-in-law is not cooperating. That's what it means to guarantee a loan. (Obligatory: \"\"Before lending your friends or family money, ask yourself which you need more.\"\")\"", "title": "" }, { "docid": "69f20bd44d5ef7300d1080dd2bf9ccce", "text": "\"There are different approaches, but here is what we do and what I recommend. Now that you are officially a married couple, open a joint bank account, and eliminate your individual accounts. There are several reasons for this. Having a joint account promotes unity and teamwork. When you only have a joint account, you do not have \"\"your income\"\" and \"\"her income,\"\" or \"\"your expenses\"\" and \"\"her expenses.\"\" You work together in everything. You discuss your goals and set your household budget together. If one of you makes more money than the other, that person is no longer \"\"worth more,\"\" because your incomes are pooled together. If one person with a higher income has more in their account than the other person does, it can lead to envy, which you do not want in your marriage. Having a joint account is more efficient and makes more sense. With separate accounts, who pays the rent/mortgage? Who pays the utilities, or buys the food? If you have separate accounts, it takes a lot of work to worry about what is \"\"fair\"\" when deciding how to divide up the expenses. With a single household budget and a joint account, you decide together what the household expenses are, and they get paid from one account. If one of you has debt, you both have debt. You work together to get it paid off and strengthen your financial situation in the process. Having a joint account forces you to discuss your finances together. Working toward common financial goals together is crucial in a strong marriage, but if you maintain your separate accounts, you might be tempted to put off these discussions until you are forced to by life circumstances. It is better to work together from the start, and joining your finances facilitates that. You are intending your marriage to last. Live your financial life like you believe that you are a team for life. If you live in a community property state, separate accounts are a fiction anyway; everything is treated as if it was pooled together in the event of a divorce. I understand that if you are used to having your own money, it can be difficult to give up that sole control over your income, but in my opinion, it is worth it. You will certainly hear of examples from couples who maintain separate accounts and make it work. In my humble opinion, combining your finances completely is easier to do right.\"", "title": "" }, { "docid": "2cd417b896d953ed5d5f667607a01b85", "text": "There is no issue - and no question - if you get married. The question is only relevant in the event that you go separate ways. Should that happen, you imply that you would want to refund whatever amount your girlfriend has paid toward the mortgage. The solution, then, would seem to be to exempt her from any payments, as you will either give that money back to her (if you break up) or make her a co-owner of the condo (if you get married). If you actually need her contributions to the monthly nut, you could give her a written agreement whereby you would refund her money (plus interest) at her discretion.", "title": "" }, { "docid": "c586d75c50139784c3060279ab46c069", "text": "Myself and my partner do things a little differently to most. We split accommodation and utilities payments by net income proportion to ensure that we both have the same amount of spending money. For example; The really important bit is net income. We take off a whole bunch of payments, e.g; Our contributions go into a joint account and the rest is our money to spend. The upshot is that we both get to enjoy the same minimum quality of life because we both get the same amount to spend at the bar.", "title": "" }, { "docid": "1a9a715a99e75fda4a54ce531c8a5a61", "text": "'If i co-sign that makes me 100% liable if for any reason you can't or won't pay. Also this shows up on a credit report just like it's my debt. This limits the amount i can borrow for any reason. I don't want to take on your debt, that's your business and i don't want to make it mine'.", "title": "" }, { "docid": "d41d68ada443c126523e4d6cddd74138", "text": "Idk if I would ask on reddit, personal finance will tell you the only way is joint bank accounts and relationship advice will tell you to break up. Personally I will always want my own bank account, with a joint account for a mortgage or utilities. I think it depends on if you are both financially savvy, if one of you aren't you might want to have a joint account to keep an eye on spending. I think this site give you a good pro/con: https://www.thebalance.com/should-you-have-joint-or-separate-bank-accounts-1289664", "title": "" }, { "docid": "22f551971d12e3540a68eb3a2b08b774", "text": "Generally speaking, granting rights to one bank account (e.g. making a joint account) does not extend rights to other accounts or otherwise let one joint owner create new obligations on the other owner (e.g. opening a line of credit that the other owner must pay for), except to the extent of the joint account. I assume there are no UK rules that would change this feature. The other party can of course withdraw all the money without need for your approval. This also means that the joint account could be exposed to all the creditors of either party. If your account joint tenant has huge debts, the creditors could theoretically look to the joint account for satisfaction. At least, that would be an issue under US law. Frankly, it may be simpler to get a separate account for the other person (if possible) and make transfers with online banking. It could also make sense to get a rechargeable banking card, if those are in the UK, which works like a debit card and can be reloaded through various means (sometimes a call, sometimes online deposits, sometimes in physical stores). There may be fees to getting such a card or a second account, of course. The benefit is that the cardholder has no access to your account and you control recharging. Such cards are widely available in the US to people who otherwise would not qualify for traditional bank accounts. Note also the FATCA complication with adding a US person to your account. My understanding is that a number of non-US banks will simply close the accounts of Americans, rather than deal with FFI hassles under FATCA.", "title": "" }, { "docid": "4a914636434e452ac8d108f7450b5140", "text": "I can't quite follow your question, so I'm proceeding under the following assumptions: - You paid £31,000 - Your partner paid £4,242 - You have at least one mortgage, which you both pay equally. If the relationship terminates, sell the property. You are reimbursed £31,000 and your partner is reimbursed £4,242. Any remaining proceeds from the sale are split 50-50. If the result is a net loss (i.e. you are underwater on your mortgage), you split the debt 50-50. If you are not both paying the same toward the mortgage, I'd split the profit or loss according to how much you each pay toward the mortgage. Of course, this is not the only possible way you can split things up. You can use pretty much any way you both think is fair. For example, maybe you should get more benefits from a profit because you contributed more up-front. The key thing, though, is that you must both agree in writing, in advance. This is reasonable; this is what I did, for example. Note that if the relationship ends, one or the other of you may wish to keep the property. I'd suggest including a clause in your written agreement simply disallowing this; specify criteria to force a sale. But I know lots of people are happy to allow this. They treat that situation as a forced sale from both people to one person. For example, if your partner chooses to stay in the house, he or she must buy the property from you at prevailing market rates.", "title": "" }, { "docid": "ec55ffc0afb013f63119e61c57879329", "text": "\"Personally, I avoid making business deals with friends and relatives. There's just too much of a possibility that things can go wrong. Let's assume that you're honest people and you have no intention of cheating your mother-in-law. Still, all sorts of things could happen that could make it difficult for you to repay the loan. You could lose your job. You could get some big medical expense. Etc. Then what happens? Then your financial problems become family problems. There's a strong temptation when people borrow from relatives to make paying the loan the lowest priority in their budget. \"\"I know I promised to pay \\$X per month, but things are really tight right now and Mom should understand.\"\" Maybe she does understand and can manage without it. But maybe not. And then it becomes a family fight. \"\"You promised you'd pay it back.\"\" \"\"And we will, we're having a hard time right now. Can't you just give us a break?\"\" Etc. Or she might have some extra expense, and say, \"\"Hey, can't you pay a little more this month? I really need some extra cash.\"\" \"\"I'm sorry, we're struggling just to make the regular payments, we can't.\"\" \"\"Well I was willing to loan you all this money. The least you could do is pay me back when I need it.\"\" Etc. You can end up ruining family relationships over money. Your wife can find herself in the position of having to choose whether to side with her mother or her husband. Etc. I'm sure plenty of people do things like this and it works out just great. But there are big risks. And by the way, apparently this was your idea, not your mother-in-laws. I wonder what her reaction is. Is she eager to help out her daughter and son-in-law and had nothing in particular to do with the money anyway? Or is she feeling very imposed on? It's one thing to ask relatives to let you borrow their car for the weekend. Asking someone to loan you $50,000 is a very big request. If one of my kids asked me to loan them $50,000 from my retirement fund, I'd consider that a very presumptuous request. (Unless they needed the money for life-saving surgery for my grandchild or some such.)\"", "title": "" }, { "docid": "2c0081f11b746bf57c7e9a1076671560", "text": "Basically, what you describe exists in many countries - not in the USA though. In Europe, people have checking accounts with allowed overdraft, typically three month net salaries. You can just this money any day as you like, and pay it back - completely or partially - any day as you like. Interest is calculated for each day on the amount used that day; and the collateral is 'future income', predicted / expected from previous income. In the USA, credit cards have taken its place, with stricter different rules and limitations. In addition, many of the extra rules in loans were invented to take advantage of the ignorance or situation of the borrower to make even more money. For example, applying extra payments to future due payments instead of to the principal makes that principal produce more interest while the extra payments just sit around.", "title": "" }, { "docid": "b54546c7819bdf923482fc996944adb5", "text": "\"Does the money lending between us need to be reported in our tax reports? No. Will he be taxed more because of lending the money to me? Yes. Will I be taxed more because of borrowing the money from him? No. How shall we report it so as to minimize our taxes? You cannot. What is reported on your tax returns is the income. A loan is not an income, so nothing gets reported. However, when you repay the loan, assuming it has interest, the lender has income: the interest. Interest income is reported on schedule B of the regular (1040/1040A) tax return (or, in the case of non-resident for tax purposes, on line 9 of 1040NR). It is taxed as ordinary income, and since you're both foreigners - the lender should look into the treaty provisions that might be relevant. Generally it is not exempt from taxable income based on treaty exemptions for students (which is only for earned income), but there might be other rules in the treaty regarding interest income. If there's no (fair market or higher) interest, then there's \"\"assumed\"\" interest at the IRS mandated rates, which is considered a gift. If it amounts to more than the yearly gift exemption, the lender may be liable for gift tax (depending on the lender's and your status, and again - see treaties). \"\"Loan\"\" without an obligation to repay and without actual repaying will also be considered a gift for tax purposes. If the lender has no intentions of having the loan repaid (i.e.: making a gift), it will be better to pay your tuition bills instead of actually giving you the money: tuition is exempt from gift tax. Talk to a CPA/EA licensed in your state for a proper tax advice on this issue.\"", "title": "" }, { "docid": "f3c3d8a0e3e2f1fc4a8f716e438da535", "text": "After more than 30 years of married life the only thing that has worked is to partner with someone who is your opposite. I am a saver, my wife is a spender. Each pay period we establish a budget. Only those things to which we both agree go into the budget. If we violate the budget the other one holds the violator accountable. Be sure to put some 'slop' into the budget, you cannot perfectly predict the future. The budget can, and will, change throughout the pay period, but only if both agree to the change.", "title": "" }, { "docid": "0f4799662e6609d40e0197bf2d5d1714", "text": "Other than the two answers (both of which recommend waiting until marriage to actually combine finances, and which I agree with), there's the general question: how does a couple choose to manage finances? In our marriage, it's me. I'm more numbers-minded than my spousal-unit. I'm also more a sticker for time. I work and spousal-unit does not. We had some good friends -- upon marriage, spouse1 felt like he should take on the role. He went on a several-week trip (leaving spouse2 at home), and upon returning home asked spouse2 about the late fees. Spouse2 was appalled. Spouse2 ended up keeping the job of managing household finances. There's enough pieces to the puzzle that it can be divided any way you choose -- any way that works for you and your spouse/virtual-spouse. One other point: talk about how to manage your money, before you marry. Dave Ramsey recommends a strict monthly budget. I like listening to Dave Ramsey, but we've never had a budget. Instead, we agreed during marriage counseling two things:", "title": "" }, { "docid": "9021ee044ffe953dad127d98ff65fa9e", "text": "\"I don't think it would be counted as income, and if it's a short-term loan it doesn't really matter as the notional interest on the loan would be negligible. But you can avoid any possible complications by just having two accounts in the name of the person trying to get the account benefits, particularly if you're willing to just provide the \"\"seed\"\" money to get the loop started.\"", "title": "" }, { "docid": "08bddd891e22c3d1673a1357cb9e00c9", "text": "I am in Australia, but I think the banks in the UK would use similar wrkings. Your options 1 and 2 are basically no. Why would the bank consider your wife to be paying you rent when you live together. These are the type of practices that led to the GFC, and since then practices have been tightened. Regarding option 3, yes banks do take into consideration rent in their analysis of your loan. However, they would not include the full rent in their calculations, but about 70% to 75% of the full rent. This allows for loss of rent during vacant periods and adds a safety factor in their caluclations. But they will not include the rent itself, you would have to have other income as well to support your loan. Saying that, we do have Low Doc Loans in Australia (loans with little documentation required to get a loan). With these loans you basically have to make a declaration that you are telling the truth regarding your income sources and you can only usually borrow a lower LVR as these loans are seen as a bigger risk. These type of loans have also been tightened up since the GFC.", "title": "" } ]	fiqa
1040b135f5399c97a348a032f4644682	Working out if I should be registered as self-employed in the UK	[ { "docid": "25c3c0fedb487bda03a9b386cba5a700", "text": "As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business.", "title": "" }, { "docid": "7200a89dbbfa7bb7d5c587cfb8532ebb", "text": "\"Being self employed just means you fill out some more forms in your annual self assessment for your \"\"profit\"\" from being self employed. Profit = all the money you receive, minus any tax deductible cost that you spent for making that money (and all the cost must be documented, which means you have a folder with all the receipts and keep it safe). You pay normal income tax on all the profit, which means it is just added to your taxable income. What you do with the profit is up to you; you don't pay yourself a salary, just take the money (make sure you leave enough to pay your taxes).\"", "title": "" } ]	[ { "docid": "886ce9002e2beda8b5239fc3c002e73a", "text": "As a sole trader you would fill out an Individual Tax Return and complete the Business and Professional Items Section P1 to P19, then enter the amounts from that section into Item 15 in the Supplementary Section of the Tax Return. Any business income as a sole trader will be included into your taxable income for the year together with other sources of income you may have earned in the same income year. Whether you get a tax refund will depend on the amount of taxable income you make, the amount of tax you have already paid in instalments throughout the year, and any tax deductions and tax offsets you can claim.", "title": "" }, { "docid": "acb3ad5a9f87addc77582c3aa113b246", "text": "Yes if you do it as a hobby, as it's still income. But it should be something you can offset against tax Either way, you shouldn't be doing this as you, you should either register as self employed or create a company. You register this income as self-employed income (or income of the company) and offset the expenses of running the server against tax. In the UK, companies (or self employed people, which are basically companies) pay tax on profit not income (unless VAT applies, in which case they're basically just passing the VAT on for their customers). Since you're not making a profit over the whole year (even if some months are profitable) you will pay no tax.", "title": "" }, { "docid": "edb3c7992e52936e50ba0686bb271586", "text": "Firstly, check your visa conditions (if you're not from the EU): http://www.ukcisa.org.uk/Information--Advice/Working/How-many-hours-can-you-work You do need to register for NI, but that's apparently streamlined into registering as self-employed: How to pay N.I contributions when both employed and self-employed? (Realistically, you can almost certainly get away with doing <£50 month in cash-in-hand jobs with no paperwork whatsoever, but in the very unlikely event of being caught it could result in being deported)", "title": "" }, { "docid": "b2c28bf26ba5ea1a2b8b24af91d571f4", "text": "You need to set your status as self-employed the day you started online work. If that date is a little ambiguous (as is usually the case with online business), you can start with the day you first made any money. Yes, you can deduct expenses from your revenue. But you have to be sure that the expenses were purely business related. This is how it goes: You inform HMRC about the day you started work. HMRC will assign you a UTR (Unique Tax Reference) number. Depending on how much you make you might or might not need to pay Class 2 NI contributions. You'll need to tell HMRC how much you expect to earn in the current tax year. Finally, you'll need to complete a Self-Assessment at the end of the tax year. I highly recommend setting up a business banking account. Here is a link that discusses being part-time self-employed in the UK.", "title": "" }, { "docid": "d3223f5dcfefce4327d9d0c5729fd21c", "text": "\"You probably know that the answer is, \"\"it depends\"\". If this is truly a pin money type of operation, then perhaps sole trader is for you. I incline to using a limited company for two reasons, one optimistic and one pessimistic. You are looking at a business to make some money with your talents. If your business takes off, it's much easier to expand a LTD than a sole trader. Getting credit, dealing with suppliers, hiring people, all much easier. And if things go well, you will be expanding. The negative reason is that as a sole trader (you) have unlimited liability for the debts of your enterprise. If you get sued, say your skincare line makes someone's face into a rash, you are on the hook for the whole amount. You don't want to torpedo your family if it goes bad. Being a limited company protects you from that. I can tell you that the overhead of running a small LTD is pretty light so long as you are meticulous about your record keeping. I had an LTD with two toddlers under my feet and it was perfectly doable to handle the paperwork.\"", "title": "" }, { "docid": "ee73e175cba7b0dc61de905351d79019", "text": "If I remember correctly, once you're about to exceed the threshold you really don't have a choice and have to register for VAT. As DumbCoder mentions, the quarterly VAT returns isn't that much of a hassle, plus if you fall under a certain threshold, you can sign up for the annual accounting scheme for VAT, which means you'll have to only put in a single return, but HMRC takes more payments out over the course of the year. This is what I did when I ran my own limited company in the UK.", "title": "" }, { "docid": "5c23d8861855e3bcf784c3306729087a", "text": "If this will be your sole income for the year, going self-employed is the best way to do this: So, here's how to go at it: Total cash in: £2000 Total Tax paid: £0 Admin overhead: approx 3 hours. Legit: 100% :) Edit: Can you tell me that in my case what are the required fields on the invoice? If you're non-VAT registered, there are no legal requirements as to what information you need to put on the invoice -it literally can be a couple of numbers on a napkin, and still be legit. With that said, to make a professional appearance, my invoices are usually structured as follows: Left side: ( Sidenote: why client-specific incremental numbering? Why, so they can't make educated guesses to the number of clients I have at any given time :) ) Right side: Center table: And so far, none of my clients missed any fields, so this should have everything they need to :) Hope this helps, but keep in mind, all of the above is synthetic sugar on the top -ultimately, the relationship you share with your Clients is the thing you will (or will not) get paid for! Edit#2: The voices in my head just pointed out, that I've totally omitted National Insurance contributions in the above. However, and I quote HMRC: If your profits are expected to be less than £5,315 you may not have to pay Class 2 National Insurance contributions. Hence, this won't change the numbers above, either -just make sure to point this out during your registration in the office.", "title": "" }, { "docid": "4bbba28702bd81b8e897599180562e67", "text": "The details of any bank accounts are irrelevant. If you're self-employed, you submit your tax return to HMRC at some point after the end of tax year. HMRC then tell you how much tax you owe and when payment is due, and you then pay it. HMRC don't have access to your bank accounts. Note that interest earned on a bank account is treated as taxable income, and banks normally automatically pay the tax due on your behalf, at the basic rate of 20%. If you're self-employed, you need to declare this income on your tax return. And in the case of a joint account, that interest is treated as being split equally.", "title": "" }, { "docid": "e78b35365288cf3823c4ae0b5e8b957f", "text": "\"It's pretty easy. In the Interview Setup for Ufile, check the box for \"\"Self-employment business income\"\". Then during the process of filling everything out, you'll get a Self-Employment screen. It'll ask for the name of your business, but just put your own name since you don't have one. For the 6-digit classification code, click the ? button and look through the list for the industry that best matches the one for whom you wrote the technical report. Or you can go with 711500: Independent artists, writers and performers. It doesn't really matter that much so don't worry if it's a poor match. It will also ask you for your income and expenses. I don't know exactly what costs you might have incurred to write your report, but you can likely claim a very tiny amount of \"\"home office\"\" expenses. Costs like rent (or mortgage interest + property tax), utilities, and home insurance can be claimed, but they have to be pro-rated for the time you were actually doing the work, and are based on the amount of space you used for the work. For example, if you paid $1000 rent and $200 utilities for the month in which the work was done, and it took you 20 of the 31 days in that month to actually do the work, and you used a room that makes up about 10% of the square footage of your home, then you can claim: $1200 * 20/31 * 0.1 = $77.42 for your home office expenses. If you also used that room for non-business purposes during that time, then you reduce it even further. Say, if the room was also used for playing video games 50% of the time, then you'd only claim $38.71\"", "title": "" }, { "docid": "8d031287980a46fd870886fd6610e129", "text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.", "title": "" }, { "docid": "8e28ce63fad505ea23d7d22aac738b01", "text": "Yes, You will have to pay the taxes at least initially but you'll most probably get a refund when you will file returns depending upon the amount and tax brackets in the UK.", "title": "" }, { "docid": "cf6fcd8dd2402e5e78393771026d802e", "text": "I was just thinking ahead, can I apply for Limited company now, while fully time employed, and not take any business until I get a contract. Yes. You can open as many companies you want(assuming you are sane). There is no legal provisions regarding who can open a company. What happens if I create a company and it has no turnover at all? Does this complicate things later? After you open a company, you have to submit your yearly statements to Companies House, whether you have a billion pounds turnover or 0. If you claim VAT that has also to be paid after you register for VAT. VAT registration is another registration different from opening a limited company. Is it the same if I decided to take a 1,2 or x month holiday and the company again will not incur any turnover? Turnover is year end, so at the year end you have to submit your yearly results, whether you took a 12 month holiday or a week's holiday. Is it a OK to do this in foresight or should I wait weeks before actually deciding to search for contracts. No need to open a limited company now, if you are so paranoid. Opening a company in UK takes 5 minutes. So you can open a company after landing a contract.", "title": "" }, { "docid": "b0fe4f46c95a1af4c1c188eddc55166d", "text": "For tax purposes you will need to file as an employee (T4 slips and tax withheld automatically), but also as an entrepreneur. I had the same situation myself last year. Employee and self-employed is a publication from Revenue Canada that will help you. You need to fill out the statement of business activity form and keep detailed records of all your deductible expenses. Make photocopies and keep them 7 years. May I suggest you take an accountant to file your income tax form. More expensive but makes you less susceptible to receive Revenue Canada inspectors for a check-in. If you can read french, you can use this simple spreadsheet for your expenses. Your accountant will be happy.", "title": "" }, { "docid": "103006facd061e7a355e43dcd43e9eaf", "text": "You would report the overall income on your T1 general income tax return, and use form T2125 to report income and expenses for your business. Form T2125 is like a mini income-statement where you report your gross revenue and subtract off expenses. Being able to claim legitimate expenses as a deduction is an important tax benefit for businesses big and small. In terms of your second question, you generally need to register for a business number at least once you cross the threshold for GST / HST. If you earn $30,000/year (or spread over four consecutive quarters) then charging GST / HST is mandatory; see GST/HST Mandatory registration. There are other conditions as well, but the threshold is the principal one. You can also register voluntarily for GST / HST even if you're below that threshold; see GST/HST Voluntary registration. The advantage of registering voluntarily is that you can claim input tax credits (ITC) on any GST that your business pays, and remit only the difference. That saves your business money, especially if you have a lot of expenses early on. Finally, in terms of Ontario specifically (saw that on your profile), you might want to check out Ontario Sole Proprietorship. There are specific cases in which you need to register a business: e.g. specific types of businesses, or if you plan on doing business under a name other than your own. Finally, you may want to consider whether incorporating might be better for you. Here's an interesting article that compares Sole Proprietorship Versus Incorporation. Here's another article, Choosing a business structure, from the feds.", "title": "" }, { "docid": "a36ebec5f995e73425f1d8eab546d735", "text": "Only if your work on the side is making you at least £60,000 profit a year. The overheads are just not worth it if you make less. Working as a sole trader, you can still claim for expenses incurred in the course of your business. You can also claim a percentage of your computer costs, even though you may use the computer for gaming. This is not unreasonable as the computer is necessary for your work. The Inland Revenue accept the fact that some assets are part work-related. In your case, as a web and mobile phone developer, I expect the percentage to be at least half, if not a lot more. If you need to travel in the course of your work you can claim a percentage for your car. You can include other small expenses such as telephone, stationery, electricity etc but don't go overboard. The important point to remember is that you must be able to defend the expenses claimed as work-related, so long as you can do this there is no problem. Remember to keep good records of all your expenses. This is on-going throughout the year and is much more work than filling out your tax return. The software on the IR self-assessment site is excellent, so it's conceivable that you may not need an accountant if you are prepared to do your own tax return. However, if you feel unsure employ an accountant initially and take it from there.", "title": "" } ]	fiqa
8297a67f3c28b40f5d41138382a5be8f	Other than being able to borrow to invest, how is a margin trading account different from a cash account?	[ { "docid": "651f98220897b2a34830fade5ce229dc", "text": "\"Probably the most significant difference is the Damocles Sword hanging over your head, the Margin Call. In a nutshell, the lender (your broker) is going to require you to have a certain amount of assets in your account relative to your outstanding loan balance. The minimum ratio of liquid funds in the account to the loan is regulated in the US at 50% for the initial margin and 25% for maintenance margins. So here's where it gets sticky. If this ratio gets on the wrong side of the limits, the broker will force you to either add more assets/cash to your account t or immediately liquidate some of your holdings to remedy the situation. Assuming you don't have any/enough cash to fix the problem it can effectively force you to sell while your investments are in the tank and lock in a big loss. In fact, most margin agreements give the brokerage the right to sell your investments without your express consent in these situations. In this situation you might not even have the chance to pick which stock they sell. Source: Investopedia article, \"\"The Dreaded Margin Call\"\" Here's an example from the article: Let's say you purchase $20,000 worth of securities by borrowing $10,000 from your brokerage and paying $10,000 yourself. If the market value of the securities drops to $15,000, the equity in your account falls to $5,000 ($15,000 - $10,000 = $5,000). Assuming a maintenance requirement of 25%, you must have $3,750 in equity in your account (25% of $15,000 = $3,750). Thus, you're fine in this situation as the $5,000 worth of equity in your account is greater than the maintenance margin of $3,750. But let's assume the maintenance requirement of your brokerage is 40% instead of 25%. In this case, your equity of $5,000 is less than the maintenance margin of $6,000 (40% of $15,000 = $6,000). As a result, the brokerage may issue you a margin call. Read more: http://www.investopedia.com/university/margin/margin2.asp#ixzz1RUitwcYg\"", "title": "" }, { "docid": "44e8ffcdaa25fda415f20c71361c7001", "text": "With margin accounts you will be able to use the proceeds from a closed trade INSTANTLY. Without margin accounts this is the time you close the trade + 3 business days for clearing. In practice this means 4-5 days if there is a weekend or holiday involved between those 3 business days. This ties up your capital for an unfavorable amount of time, where as a margin account lets you continue to use the capital over and over again for more opportunities. You CANNOT sell to open a position in cash accounts. This means no short selling. This means no covered calls or spreads and MANY other strategies. These are the real differences you'll notice in a margin account vs a cash account. Then there are the myriad of regulations that dictate how much cash you should keep in your account for any margin position.", "title": "" }, { "docid": "85a00236aa266c91d0603faef7599e53", "text": "\"In summary: In long form: Spreads and shorts are not allowed in cash accounts, except for covered options. Brokers will allow clients to roll option positions in a single transaction, which look like spreads, but these are not actually \"\"sell to open\"\" transactions. \"\"Sell to open\"\" is forbidden in cash accounts. Short positions from closing the long half of a covered trade are verboten. Day-trading is allowed in both margin and cash accounts. However, \"\"pattern day-trading\"\" only applies to margin accounts, and requires a minimum account balance of $25,000. Cash accounts are free to buy and sell the same security on the same day over and over, provided that there is sufficient buying power to pay for opening a new position. Since proceeds are held for both stock and option sales in a cash account, that means buying power available at the start of the day will drop with each purchase and not rise again until settlement. Unsettled funds are available immediately within margin accounts, without restriction. In cash accounts, using unsettled funds to purchase securities will require you to hold the new position until funds settle -- otherwise your account will be blocked for \"\"free-riding\"\". Legally, you can buy securities in a cash account without available cash on deposit with the broker, but most brokers don't allow this, and some will aggressively liquidate any position that you are somehow able to enter for which you didn't have available cash already on deposit. In a margin account, margin can help gloss over the few days between purchase and deposit, allowing you to be somewhat more aggressive in investing funds. A margin account will allow you to make an investment if you feel the opportunity is right before requiring you to deposit the funds. See a great opportunity? With sufficient margin, you can open the trade immediately and then run to the bank to deposit funds, rather than being stuck waiting for funds to be credited to your account. Margin accounts might show up on your credit report. The possibility of losing more than you invested, having positions liquidated when you least expect it, your broker doing possibly stupid things in order to close out an over-margined account, and other consequences are all very serious risks of margin accounts. Although you mentioned awareness of this issue, any answer is not complete with mentioning those risks.\"", "title": "" }, { "docid": "2f3e9c74845865a96e9d863870771b7e", "text": "Two more esoteric differences, related to the same cause... When you have an outstanding debit balance in a margin the broker may lend out your securities to short sellers. (They may well be able to lend them out even if there's no debit balance -- check your account agreement and relevant regulations). You'll never know this (there's no indication in your account of it) unless you ask, and maybe not even then. If the securities pay out dividends while lent out, you don't get the dividends (directly). The dividends go to the person who bought them from the short-seller. The short-seller has to pay the dividend amount to his broker who pays them to your broker who pays them to you. If the dividends that were paid out by the security were qualified dividends (15% max rate) the qualified-ness goes to the person who bought the security from the short-seller. What you received weren't dividends at all, but a payment-in-lieu of dividends and qualified dividend treatment isn't available for them. Some (many? all?) brokers will pay you a gross-up payment to compensate you for the extra tax you had to pay due to your qualified dividends on that security not actually being qualified. A similar thing happens if there's a shareholder vote. If the stock was lent out on the record date to establish voting eligibility, the person eligible to vote is the person who bought them from the short-seller, not you. So if for some reason you really want/need to vote in a shareholder vote, call your broker and ask them to journal the shares in question over to the cash side of your account before the record date for determining voting eligibility.", "title": "" } ]	[ { "docid": "170473bd8e884ff4f8835a20e2c6cc1b", "text": "Disregarding leverage and things alike, I would like to know what's the difference between opening a position in Forex on a pair through a broker, for example, and effectively buy some currency in a traditional bank-to-bank transition The forex account may pay or charge you interest whereas converting your currency directly will not. Disregarding leverage, the difference would be interest.", "title": "" }, { "docid": "a53203e93e54c64b01441646a3c92d95", "text": "\"None of the previous answers (which are all good) mention margin accounts (loans from your broker). You may also have heard them described as \"\"leverage\"\". It may seem odd to mention this rather narrow form of debt here, but it's important because overuse of leverage has played a large part in pretty much every financial crisis you can think of (including the most recent one). As the Investopedia definitions indicate, leverage magnifies gains, but also magnifies losses. I consider margin/leverage to be \"\"bad\"\" debt.\"", "title": "" }, { "docid": "d5469858d8cfd023db94dfea7688ed40", "text": "The major drawback to borrowing to invest (i.e. using leverage) is that your return on investment must be high enough to overcome the cost of finance. The average return on the S&P 500 is about 9.8% (from CNBC) a typical unsecured personal loan will have an interest rate of around 18-36% APR (from NerdWallet). This means that on average you will be paying more interest than you are receiving in returns so are losing money on the margin investment. Sometimes the S&P falls and over those periods you would be paying out interest having lost money so will have a negative return! You may have better credit and so be able to get a lower rate but I don't know your loan terms currently. Secured loans, such as remortgaging your house, will have lower costs but come with more life changing risks. The above assumes that you are getting financing by directly borrowing money, however, it is also possible to trade on margin. This is where you post a proportion of the value that you wish to trade with as collateral against a loan to buy the security. This form of finance is normally used by day traders and other short term holders of stocks. Although the financing costs here are low (I am not charged an interest rate on intraday margin trading) there are very high costs if you exceed the term of the loan. An example is that I am charged a fee if I hold a position overnight and my profits and losses are crystallised at that time. If I am in a losing position at that time the crystallisation process and fee can result in not having enough margin to recover the position and the loss of a potentially profit making position. Additionally if the amount of collateral cash (margin) posted is insufficient to cover the expected losses as calculated by your broker they will initiate a margin call asking for more collateral money. If you do not (or cannot) post this extra margin your losing position will be cashed out and you will take as a loss the total loss at that time. Since the market can change very rapidly, such as in a flash crash, this can result in your losing more money than you had in the first place. As this is essentially a loan you can be bankrupted by this. Overall using leverage to invest magnifies your potential profits but it also magnifies your potential losses. In many cases this magnification could be sufficient to lose you more money than you had originally invested. In addition to magnification you need to consider the cost of finance and that your return over the course of the loan needs to be higher than your cost of finance as well as inflation and other opportunity costs of capital. The S&P 500 is a relatively low volatility market in general so is unlikely to return losses in any given period that will mean that leverage of 1.25 times will take you into losses beyond your own capital investment but it is not impossible. The low level of risk automatically means that your returns are lower and so your cost of capital is likely to be a large proportion of your returns and your returns may not completely cover the cost of capital even when you are making money. The key thing if you are going to trade or invest on leverage is to understand the terms and costs of your leverage and discount them from any returns that you receive before declaring to yourself that you are profitable. It is even more important than usual to know how your positions are doing and whether you are covering your cost of capital when using leverage. It is also very important to know the terms of your leverage in detail, especially what will happen when and if your credit runs out for whatever reason be it the end of the financing period (the length of the loan) or your leverage ratio gets too high. You should also be aware of the costs of closing out the loan early should you need to do so and how to factor that into your investing decisions.", "title": "" }, { "docid": "2141f8cd0a89ca1e520fc0df552b41af", "text": "A checking account is instant access. It can be tapped via check or debit card. A savings account is supposed to be used to accumulate cash for a goal that is is longer term or for an emergency. Many people need to separate these funds into different accounts to be able to know if they are overspending or falling short on their savings. In the United States the Federal Reserve also looks at these accounts differently. Money in a checking account generally can't be used to fund loans, money in a savings account can be used as a source of loans by the bank. An even greater percentage of funds in longer term accounts can be used to fund loans. This includes Certificates of Deposit, and retirement accounts.", "title": "" }, { "docid": "28e6edb222832385511dea101954d223", "text": "\"The broker will charge borrowing fees and sometimes a charge called \"\"hard-to-borrow fee\"\". Other than that you will earn interest on the cash you get from selling the stocks, but you will have to pay dividends. This is because someone else (the party you sold the stocks off to) will now get the dividends and the party who lent you the stocks will miss out on these, that's why you have to remunerate them. The type of account you need is entirely up to your broker (and besides, it depends on what a 'normal' account for you is, you should at least mention your country or your broker).\"", "title": "" }, { "docid": "123b23a493b497031a0d631a994c11dc", "text": "The T+3 settlement date only affects cash accounts. In a cash account, you need to wait until the T+3 settlement date for your funds to be available to make your next trade. But if you convert your cash account into a margin account, then you do not need to wait until the T+3 settlement date for your next trade - your broker will allow you to make another trade immediately.", "title": "" }, { "docid": "57a401b1ba49886d5d4103b0fe6c4bdb", "text": "\"The margin rules are also more complicated. A simple buy on a non-margin account will never run into margin rules and you can just wait out any dips if you have confidence the stock will recover. A \"\"simple\"\" short sell might get you a call from your broker that you have a margin call, and you can't wait it out without putting more money in. Personally I have trouble keeping the short sale margin rules straight in my head, at least compared to a long sale. I got in way over my head shorting AMZN once, and lost a lot of money because I thought it was overvalued at the time, but it just kept going up and I wanted it to go down. I've never gotten stuck like that on a long position.\"", "title": "" }, { "docid": "0da4277cb0f8295a68c9818ea0bd01a8", "text": "That is the maintenance margin required for that position. Whenever you trade using your margin account, you must (by law, and also separately often by stricter policies from the brokerage) have a certain percentage of equity - at least 25%, often higher. That protects the brokerage from significant losses if your position drops in value significantly (hopefully preventing the brokerage from failing outright in the event of a major collapse). If the amount of equity falls below the maintenance requirement, you will have a margin call and be required to put some cash (or equity) into the account to maintain that level. See Maintenance Margin definition on Investopedia for more information.", "title": "" }, { "docid": "13e66e7b5bb601ced10427a971fb9003", "text": "According to Regulation T, you can make as many day trade (round trip) stock purchases using a cash account as long as you have the funds to cover each and every round trip sale. However, the funds generated from the sales cannot be used again to purchase new stocks until the settlement period (T-2 or T-3) is over. For example, say you have $10000 dollars in your cash account and no securities. You buy 1000 shares of XYZ stock in the morning at one dollar per share and you sell the stock 30 minutes later because it went up say by 50 cents. According to Regulation T, you cannot use the money generated from the sale of your 1000 shares until after the settlement date. However, you can use the remaining $9000 dollars in your account to execute other trades just as the first trade. You can do this as many times as you want as long as you have funds available to pay for the transaction the same day it's executed. The only thing to worry about and that isn't clear, is, what happens if you perform this action more than 3 times in a week? Does it mean that your cash account now becomes a margin account subject to margin account rules because you executed more than three round trip trades in a five day rolling period?", "title": "" }, { "docid": "4a478fa0ea54f8f2d9ad677ee7525e5a", "text": "hmmm. I think it's because in both cases, you must pay for it up front, before the positions are closed out. You own nothing except the right to buy the stock re: the call, and the obligation to buy the stock re: the short. You buy a call, but must borrow the stock, for which you must put some margin collateral and there is a cost to borrow. You pay for that, of course. I wouldn't call it lending though.", "title": "" }, { "docid": "25bba446bab6025f3ba5a43c75c5eea3", "text": "In general, investors with a long period of time until they would need to withdraw the cash are best off holding mostly equities. While the dividends that equities would return are less than the interest you would get in peer-to-peer lending, over long periods of time not only do you get the dividends from equity investment but the value of the stock will grow faster than interest on loans. The higher returns from stocks, however, comes with more risk of big downturns. Many people pull their investments out of stocks right after crashes which really hurts their long term returns. So, in order to get the benefit of investing in stocks you need to be strong enough to continue to hold the stocks through the crash and into the recovery. As for which stocks to invest in, generally it is best to invest in low-fee index funds/etfs where you own a broad collection of stocks so that if (when) any one stock goes bust that your portfolio does not take much damage. Try to own both international and domestic stocks to get good diversification. The consensus recommends adding just a little bit of REITs and bonds to your investments, but for someone at 25 it might not be worth it yet. Warren Buffett had some good thoughts on index investing.", "title": "" }, { "docid": "ae55680dde8e88e3fe87424ee733de5e", "text": "I personally spoke with a Questrade agent about my question. To make a long story short: in a margin account, you are automatically issued a loan when buying U.S. stock with a Canadian money. Whereas, in a registered account (e.g. RRSP), the amount is converted on your behalf to cover the debit balance. Me: What happens if I open an account and I place an order for U.S. stocks with Canadian money? Is the amount converted at the time of transfer? How does that work? Agent: In a margin account, you are automatically issued a loan for a currency you do not have, however, if you have enough buying power, it will go through. The interest on the overnight balance is calculated daily and is charged on a monthly basis. We do not convert funds automatically in a margin account because you can have a debit cash balance. Agent: In a registered account, the Canada Revenue Agency does not allow a debit balance and therefore, we must convert your funds on your behalf to cover the debit balance if possible. We convert automatically overnight for a registered account. Agent: For example, if you buy U.S. equity you will need USD to buy it, and if you only have CAD, we will loan you USD to cover for that transaction. For example, if you had only $100 CAD and then wanted to buy U.S. stock worth $100 USD, then we will loan you $100 USD to purchase the stock. In a margin account we will not convert the funds automatically. Therefore, you will remain to have a $100 CAD credit and a $100 USD debit balance (or a loan) in your account. Me: I see, it means the longer I keep the stock, the higher interest will be? Agent: Well, yes, however, in a registered account there will be not be any interest since we convert your funds, but in a margin account, there will be interest until the debit balance is covered, or you can manually convert your funds by contacting us.", "title": "" }, { "docid": "f48f2f7e7684e11a35af00f9f7ed2509", "text": "\"Lending of shares happens in the background. Those who have lent them out are not aware that they have been lent out, nor when they are returned. The borrowers have to pay any dividends to the lenders and in the end the borrowers get their stock back. If you read the fine print on the account agreement for a margin account, you will see that you have given the brokerage the permission to silently loan your stocks out. Since the lending has no financial impact on your portfolio, there's no particular reason to know and no particular protection required. Actually, brokers typically don't bother going through the work of finding an actual stock to borrow. As long as lots of their customers have stocks to lend and not that many people have sold short, they just assume there is no problem and keep track of how many are long and short without designating which stocks are borrowed from whom. When a stock becomes hard to borrow because of liquidity issues or because many people are shorting it, the brokerage will actually start locating individual shares to borrow, which is a more time-consuming and costly procedure. Usually this involves the short seller actually talking to the broker on the phone rather than just clicking \"\"sell.\"\"\"", "title": "" }, { "docid": "ecd8bd38a8923493a989fd91c8d71b8e", "text": "In the U.S. it is typical that a stock brokerage account can be set up to buy stock with up to half the cost being borrowed from the broker. This is called a margin account. The stock purchased must remain in the account until sold (or the loan is paid off), as it serves as built-in collateral for the loan. If the market price for the stock goes down too much, you will be required to add money, or the stock will be sold to cover the loan. See this question for some more information.", "title": "" }, { "docid": "f5135a272a85115fd8dc1016cd7fe317", "text": "They will make money from brokerage as usual and also from the interest they charge you for lending you the money for you to buy your shares on margin. In other words you will be paying interest on the $30,000 you borrowed from your broker. Also, as per Chris's comment, if you are shorting securities through your margin account, your broker would charge you a fee for lending you the securities to short.", "title": "" } ]	fiqa
a1c56f1a8ba343ef6bb510b62d7c5f95	What funds were closed during or after the recent recessions?	[ { "docid": "8d9810fb83e7253b932c4b16a16d9e55", "text": "\"Yes, many hedge funds (for example) did not survive 2008-2009. But hedge funds were failing both before and after that period, and other hedge funds thrived. Those types of funds are particularly risky because they depend so much on leverage (i.e. on money that isn't actually theirs). More publically-visible funds (like those of the big-name index fund companies) tended not to close because they are not leveraged. You say that \"\"a great many companies\"\" failed during the recession, but that's not actually true. I can't think of more than a handful of publically-traded companies that went bankrupt. So, since the vast majority of publically-traded companies stayed in business, their stocks kept some/most of their value, and the funds that owned those stocks stayed afloat. I personally did not see a single index fund that went out of business due to the recession.\"", "title": "" } ]	[ { "docid": "5332ab4fcf9969669a3adebdc5e92194", "text": "\"Bloomberg suggests that two Fidelity funds hold preferred shares of Snapchat Inc.. Preferred shares hold more in common with bonds than with ordinary stock as they pay a fixed dividend, have lower liquidity, and don't have voting rights. Because of this lower liquidity they are not usually offered for sale on the market. Whether these funds are allowed to hold such illiquid assets is more a question for their strategy document than the law; it is completely legal for a company to hold a non-marketable interest in another, even if the company is privately held as Snapchat is. The strategy documents governing what the fund is permitted to hold, however, may restrict ownership either banning non-market holdings or restricting the percentage of assets held in illiquid instruments. Since IPO is very costly, funds like these who look to invest in new companies who have not been through IPO yet are a very good way of taking a diversified position in start-ups. Since they look to invest directly rather than through the market they are an attractive, low cost way for start-ups to generate funds to grow. The fund deals directly with the owners of the company to buy its shares. The markdown of the stock value reflects the accounting principle of marking to market (MTM) financial assets that do not have a trade price so as to reflect their fair value. This markdown implies that Fidelity believe that the total NPV of the company's net assets is lower than they had previously calculated. This probably reflects a lack of revenue streams coming into the business in the case of Snapchat. edit: by the way, since there is no market for start-up \"\"stocks\"\" pre-IPO my heart sinks a little every time I read the title of this question. I'm going to be sad all day now :(.\"", "title": "" }, { "docid": "a519077e8b48ef99b0d20e77a981deb0", "text": "Thank you fgunthar. I was not aware of ILWs, but I agree - this is also the closest thing I've found. As for starting a fund, I'm unfortunately nowhere near that point. But, my curiosity seems to inevitably lead me to obscure areas like ILWs.", "title": "" }, { "docid": "046d9cdbbb9b9aa2eb877b718d47e705", "text": "Try this site for the funds http://www.socialinvest.org/resources/mfpc/ I'm not aware of any etfs. I'm sure some exist though.", "title": "" }, { "docid": "d551a112c05e7e4ad3cf68a202c506dc", "text": "That is such a vague statement, I highly recommend disregarding it entirely, as it is impossible to know what they meant. Their goal is to convince you that index funds are the way to go, but depending on what they consider an 'active trader', they may be supporting their claim with irrelevant data Their definition of 'active trader' could mean any one or more of the following: 1) retail investor 2) day trader 3) mutual fund 4) professional investor 5) fund continuously changing its position 6) hedge fund. I will go through all of these. 1) Most retail traders lose money. There are many reasons for this. Some rely on technical strategies that are largely unproven. Some buy rumors on penny stocks in hopes of making a quick buck. Some follow scammers on twitter who sell newsletters full of bogus stock tips. Some cant get around the psychology of trading, and thus close out losing positions late and winning positions early (or never at all) [I myself use to do this!!]. I am certain 99% of retail traders cant beat the market, because most of them, to be frank, put less effort into deciding what to trade than in deciding what to have for lunch. Even though your pension funds presentation is correct with respect to retail traders, it is largely irrelevant as professionals managing your money should not fall into any of these traps. 2) I call day traders active traders, but its likely not what your pension fund was referring to. Day trading is an entirely different animal to long or medium term investing, and thus I also think the typical performance is irrelevant, as they are not going to manage your money like a day trader anyway. 3,4,5) So the important question becomes, do active funds lose 99% of the time compared to index funds. NO! No no no. According to the WSJ, actively managed funds outperformed passive funds in 2007, 2009, 2013, 2015. 2010 was basically a tie. So 5 out of 9 years. I dont have a calculator on me but I believe that is less than 99%! Whats interesting is that this false belief that index funds are always better has become so pervasive that you can see active funds have huge outflows and passive have huge inflows. It is becoming a crowded trade. I will spare you the proverb about large crowds and small doors. Also, index funds are so heavily weighted towards a handful of stocks, that you end up becoming a stockpicker anyway. The S&P is almost indistinguishable from AAPL. Earlier this year, only 6 stocks were responsible for over 100% of gains in the NASDAQ index. Dont think FB has a good long term business model, or that Gilead and AMZN are a cheap buy? Well too bad if you bought QQQ, because those 3 stocks are your workhorses now. See here 6) That graphic is for mutual funds but your pension fund may have also been including hedge funds in their 99% figure. While many dont beat their own benchmark, its less than 99%. And there are reasons for it. Many have investors that are impatient. Fortress just had to close one of its funds, whose bets may actually pay off years from now, but too many people wanted their money out. Some hedge funds also have rules, eg long only, which can really limit your performance. While important to be aware of this, that placing your money with a hedge fund may not beat a benchmark, that does not automatically mean you should go with an index fund. So when are index funds useful? When you dont want to do any thinking. When you dont want to follow market news, at all. Then they are appropriate.", "title": "" }, { "docid": "a59b5ee28bfa32e75c8c0dafabfc958f", "text": "Well, there are many reasons that Lehman and Bear were allowed to go under. Lehman had much more exposure to real estate than Goldman and JP, and they were also the very first domino to fall, back when people didn't think the crisis was a full-blown crisis yet. As for Bear? I think the Fed harbored some hard feelings after the LTCM thing.", "title": "" }, { "docid": "1417779afe385704661db0ac0cd35bc2", "text": "\"Since these indices only try to follow VIX and don't have the underlying constituents (as the constituents don't really exist in most meaningful senses) they will always deviate from the exact numbers but should follow the general pattern. You're right, however, in stating that the graphs that you have presented are substantially different and look like the indices other than VIX are always decreasing. The problem with this analysis is that the basis of your graphs is different; they all start at different dates... We can fix this by putting them all on the same graph: this shows that the funds did broadly follow VIX over the period (5 years) and this also encompasses a time when some of the funds started. The funds do decline faster than VIX from the beginning of 2012 onward and I had a theory for why so I grabbed a graph for that period. My theory was that, since volatility had fallen massively after the throes of the financial crisis there was less money to be made from betting on (investing in?) volatility and so the assets invested in the funds had fallen making them smaller in comparison to their 2011-2012 basis. Here we see that the funds are again closely following VIX until the beginning of 2016 where they again diverged lower as volatility fell, probably again as a result of withdrawals of capital as VIX returns fell. A tighter graph may show this again as the gap seems to be narrowing as people look to bet on volatility due to recent events. So... if the funds are basically following VIX, why has VIX been falling consistently over this time? Increased certainty in the markets and a return to growth (or at least lower negative growth) in most economies, particularly western economies where the majority of market investment occurs, and a reduction in the risk of European countries defaulting, particularly Portugal, Ireland, Greece, and Spain; the \"\"PIGS\"\" countries has resulted in lower volatility and a return to normal(ish) market conditions. In summary the funds are basically following VIX but their values are based on their underlying capital. This underlying capital has been falling as returns on volatility have been falling resulting in their diverging from VIX whilst broadly following it on the new basis.\"", "title": "" }, { "docid": "9d9444595e7e45564762ff58a6c29bc5", "text": "\"While this figure is a giant flashing-red beacon of inflation, it should be noted that this has been happening during a period of unprecedented writedowns and deleveraging of \"\"hypothetical\"\" assets -- assets that exist on paper only. The result, given the way QE funds have been injected into the market (eg TAF), is that people who should've lost money get to tread water, and the inflation is not apparent in the rest of the economy (unless you are actually aware of the severe repercussions which should've happened but didn't). Also, and separately, I'm not so sure another round of QE is coming.\"", "title": "" }, { "docid": "e3cc2326e8fa93452b5c41bfe54f0584", "text": "Right now, the unrealized appreciation of Vanguard Tax-Managed Small-Cap Fund Admiral Shares is 28.4% of NAV. As long as the fund delivers decent returns over the long term, is there anything stopping this amount from ballooning to, say, 90% fifty years hence? I'd have a heck of a time imagining how this grows to that high a number realistically. The inflows and outflows of the fund are a bigger question along with what kinds of changes are there to capital gains that may make the fund try to hold onto the stocks longer and minimize the tax burden. If this happens, won't new investors be scared away by the prospect of owing taxes on these gains? For example, a financial crisis or a superior new investment technology could lead investors to dump their shares of tax-managed index funds, triggering enormous capital-gains distributions. And if new investors are scared away, won't the fund be forced to sell its assets to cover redemptions (even if there is no disruptive event), leading to larger capital-gains distributions than in the past? Possibly but you have more than a few assumptions in this to my mind that I wonder how well are you estimating the probability of this happening. Finally, do ETFs avoid this problem (assuming it is a problem)? Yes, ETFs have creation and redemption units that allow for in-kind transactions and thus there isn't a selling of the stock. However, if one wants to pull out various unlikely scenarios then there is the potential of the market being shut down for an extended period of time that would prevent one from selling shares of the ETF that may or may not be as applicable as open-end fund shares. I would however suggest researching if there are hybrid funds that mix open-end fund shares with ETF shares which could be an alternative here.", "title": "" }, { "docid": "e400ac547517161dca92438aa601eba3", "text": "\"Thanks for the quick reply. I'd like to point out the post that triggered me to make this request in public is - Reddit post: http://www.reddit.com/r/finance/comments/naboa/fears_persist_that_the_us_labor_market_cannot_be/ Specific response: http://www.reddit.com/r/finance/comments/naboa/fears_persist_that_the_us_labor_market_cannot_be/c37kj2t The sidebar says that political debate is not permitted in this forum, and until recently I would say this request had been adhered to. But this particular FT article, like others, can be dissected politically, and therefore shouldn't be in r/finance. It belongs in r/economics. Unfortunately, any posts that relate to current macroeconomic circumstances, especially central banking and global unemployment, will invite the Ron-Paulites and they really don't add any sort of value to r/finance, and they do politicize the forum and debate. I don't think ZeroHedge _ever_ has a place in this forum. The source is not credible and always has too much of a political angle to be in a forum that has declared itself as \"\"not a place for politics.\"\"\"", "title": "" }, { "docid": "65ee8fe1e4d415e65ad72de915f56166", "text": "I would also like to have this discussed, alongside the issue that the US has gone into some type of [recession](https://upload.wikimedia.org/wikipedia/commons/c/c0/US_Treasuries_to_Federal_Funds_Rate.png) roughly every ten year. So with the prospect of a possible recession with a close to 0% cash rate looming, what tools will the FED employ to keep Banks borrowing while maintaining inflation rates?", "title": "" }, { "docid": "9c913aa51881967e18ada87b98694a77", "text": "\"It sounds like this is an entirely unsettled question, unfortunately. In the examples you provide, I think it is safe to say that none of those are 'substantially identical'; a small overlap or no overlap certainly should not be considered such by a reasonable interpretation of the rule. This article on Kitces goes into some detail on the topic. A few specifics. First, Former publication 564 explains: Ordinarily, shares issued by one mutual fund are not considered to be substantially identical to shares issued by another mutual fund. Of course, what \"\"ordinarily\"\" means is unspecified (and this is no longer a current publication, so, who knows). The Kitces article goes on to explain that the IRS hasn't really gone after wash sales for mutual funds: Over the years, the IRS has not pursued wash sale abuses against mutual funds, perhaps because it just wasn’t very feasible to crack down on them, or perhaps because it just wasn’t perceived as that big of an abuse. After all, while the rules might allow you to loss-harvest a particular stock you couldn’t have otherwise, it also limits you from harvesting ANY losses if the overall fund is up in the aggregate, since losses on individual stocks can’t pass through to the mutual fund shareholders. But then goes to explain about ETFs being very different: sell SPY, buy IVV or VTI, and you're basically buying/selling the identical thing (99% or so correlation in stocks owned). The recommendation by the article is to look at the correlation in owned stocks, and stay away from things over 95%; that seems reasonable in my book as well. Ultimately, there will no doubt be a large number of “grey” and murky situations, but I suspect that until the IRS provides better guidance (or Congress rewrites/updates the wash sale rules altogether!), in the near term the easiest “red flag” warning is simply to look at the correlation between the original investment being loss-harvested, and the replacement security; at correlations above 0.95, and especially at 0.99+, it’s difficult to argue that the securities are not ”substantially identical” to each other in performance. Basically - use common sense, and don't do anything you think would be hard to defend in an audit, but otherwise you should be okay.\"", "title": "" }, { "docid": "bd36cc84ea10cfdc1920099d015b5085", "text": "Why don't you look at the actual funds and etfs in question rather than seeking a general conclusion about all pairs of funds and etfs? For example, Vanguard's total stock market index fund (VTSAX) and ETF (VTI). Comparing the two on yahoo finance I find no difference over the last 5 years visually. For a different pair of funds you may find something very slightly different. In many cases the index fund and ETF will not have the same benchmark and fees so comparisons get a little more cloudy. I recall a while ago there was an article that was pointing out that at the time emerging market ETF's had higher fees than corresponding index funds. For this reason I think you should examine your question on a case-by-case basis. Index fund and ETF returns are all publicly available so you don't have to guess.", "title": "" }, { "docid": "2d664e07aaf29064a1f9ccdfd68672f5", "text": "\"I used the term \"\"bond fund\"\" to mean a mutual fund which invests in bonds. Vanguard has a list. If you live in PA, OH, MA, FL, CA, NJ, or NY there are tax free funds you can invest in on that list.\"", "title": "" }, { "docid": "b30b3318b9b323fa772c7dba51f37718", "text": "Good analysis/point, except you're missing the fact that most pensions allocate only a tiny fraction of their overall portfolios to hedge funds. So say you have a $2 billion pension fund, maybe $50 million of that is hedge funds. So basically, yes the pools of money will get smaller, but there's a lot of the overall pie that the hedge funds aren't eating (yet).", "title": "" }, { "docid": "0da2ace87efea30d3c2c957fdb254806", "text": "If you're talking about TRUPS (Trust Preferred securities) these are all but banned for new issuance under Dodd-Frank and other regulations. Although some companies still have outstanding TRUPS most have either matured, defaulted or been refinanced into some other form of debt. Its not really an available form of capital raising anymore.", "title": "" } ]	fiqa
d0ea3bd6e63f545ef67402cdc21057c7	Is the return on investment better with high or low dividends?	[ { "docid": "3b24411e84ecc56597e67ce068060d8d", "text": "It is a bit more complicated than whether it pays more or less dividends. You should make your decision based on how well the company is performing both fundamentally and technically. Concentrating mainly on the fundamental performance for this question, most good and healthy companies make enough profits to both pay out dividends and invest back into the company to keep growing the company and profits. In fact a good indication of a well performing company is when their dividend per share and earnings per share are both growing each year and the dividends per share are less than the earnings per share (that way you know dividends are being paid out from new profits and not existing cash holdings). This information can give you an indication of both a stable and growing company. I would rather invest in a company that pays little or no dividends but is increasing profits and growing year after year than a company that pays higher dividends but its profits are decreasing year after year. How long will the company continue to pay dividends for, if it starts making less and less profits to pay them with? You should never invest in a company solely because they pay dividends, if you do you will end up losing money. It is no use making $1 in dividends if you lose $2+ because the share price drops. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more for a stable and growing company.", "title": "" }, { "docid": "92388431b9fc8ad3f676a1f056912571", "text": "Let's say two companies make 5% profit every year. Company A pays 5% dividend every year, but company B pays no dividend but grows its business by 5%. (And both spend the money needed to keep the business up-to-date, that's before profits are calculated). You are right that with company B, the company will grow. So if you had $1000 shares in each company, after 20 years company A has given you $1000 in dividends and is worth $1000, while company B has given you no dividends, but is worth a lot more than $2000, $2653 if my calculation is right. Which looks a lot better than company A. However, company A has paid $50 every year, and if you put that money into a savings account giving 5% interest, you would make exactly the same money either way.", "title": "" }, { "docid": "4ed058f7de8d238c01c3ce90f9ae86b7", "text": "\"Someone (I forget who) did a study on classifying total return by the dividend profiles. In descending order by category, the results were as follows: 1) Growing dividends. These tend to be moderate yielders, say 2%-3% a year in today's markets. Because their dividends are starting from a low level, the growth of dividends is much higher than stocks in the next category. 2) \"\"Flat\"\" dividends. These tend to be higher yielders, 5% and up, but growing not at all, like interest on bonds, or very slowly (less than 2%-3% a year). 3) No dividends. A \"\"neutral\"\" posture. 4) Dividend cutters. Just \"\"bad news.\"\"\"", "title": "" } ]	[ { "docid": "db351fb142066f802e9dfed69b44acb6", "text": "In the scenario you describe, the first thing I would look at would be liquidity. In other words, how easy is it to buy and sell shares. If the average daily volume of one share is low compared to the average daily volume of the other, then the more actively traded share would be the more attractive. Low volume shares will have larger bid-offer spreads than high volume shares, so if you need to get out of position quickly you will be at risk of being forced to take a lowball offer. Having said that, it is important to understand that high yielding shares have high yields for a reason. Namely, the market does not think much of the company's prospects and that it is likely that a cut in the dividend is coming in the near future. In general, the nominal price of a share is not important. If two companies have equal prospect, then the percentage movement in their share price will be about the same, so the net profit or loss you realise will be about the same.", "title": "" }, { "docid": "ff6a6b8b9211bde03bed2c76076b87f7", "text": "Usually when a company is performing well both its share price and its dividends will increase over the medium to long term. Similarly, if the company is performing badly both the share price and dividends will fall over time. If you want to invest in higher dividend stocks over the medium term, you should look for companies that are performing well fundamentally and technically. Choose companies that are increasing earnings and dividends year after year and with earnings per share greater than dividends per share. Choose companies with share prices increasing over time (uptrending). Then once you have purchased your portfolio of high dividend stocks place a trailing stop loss on them. For a timeframe of 1 to 3 years I would choose a trailing stop loss of 20%. This means that if the share price continues going up you keep benefiting from the dividends and increasing share price, but if the share price drops by 20% below the recent high, then you get automatically taken out of that stock, leaving your emotions out of it. This will ensure your capital is protected over your investment timeframe and that you will profit from both capital growth and rising dividends from your portfolio.", "title": "" }, { "docid": "e05a30c4c2dd0cf27738493f5d1a2b47", "text": "This investment strategy may have tax advantages. In some countries, income received from dividends is taxed as income, whereas profits on share trades are capital gains. If you have already exceeded your tax-free income limit for the year, but not your capital gains tax allowance, it may be preferable to make a dealing profit rather than an investment income. These arrangements are called a bed-and-breakfast.", "title": "" }, { "docid": "aa896ef199e1088f7bdc3a379dbc2767", "text": "Less shares outstanding means that, holding the dividend per share constant you would have a lower total dividend expenditure. The more likely outcome is that, if you want to return capital to shareholders through a dividend, you just pay a higher amount per share.", "title": "" }, { "docid": "3e3c8d461b7b18ae5317d268334ae9b0", "text": "Dividend Stocks like any stock carry risk and go both up and down. It is important to choose a stock based on the company's potential and performance. And, if they pay a dividend it does help. -RobF", "title": "" }, { "docid": "a13a5183fa18ad97d0487ffeb6827fd9", "text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"", "title": "" }, { "docid": "07bfc4bf7cdff666fb929873475d0159", "text": "Large companies whose shares I was looking at had dividends of the order of ~1-2%, such as 0.65%, or 1.2% or some such. My savings account provides me with an annual return of 4% as interest. Firstly inflation, interest increases the numeric value of your bank balance but inflation reduces what that means in real terms. From a quick google it looks like inflation in india is currently arround 6% so your savings account is losing 2% in real terms. On the other hand you would expect a stable company to maintain a similar value in real terms. So the dividend can be seen as real terms income. Secondly investors generally hope that their companies will not merely be stable but grow in value over time. Whether that hope is rational is another question. Why not just invest in options instead for higher potential profits? It's possible to make a lot of money this way. It's also possible to lose a lot of money this way. If your knowlage of money is so poor you don't even understand why people buy stocks there is no way you should be going near the more complicated financial products.", "title": "" }, { "docid": "1fd4f52a70a3ab8bb2cfc60c534f5106", "text": "Also keep in mind that most REITs have high dividend yields. If you short, you are responsible for payment of the dividend to the party you are borrowing the shares from. This can add costs to your position over time. Short REITS for a long time period is not necessarily an optimal strategy.", "title": "" }, { "docid": "ae148a4b9aca1e2103a1c57a04f56f16", "text": "This is great, thank you. Can you think of any cases where expected return is greater than interest payments (like in #2) but the best choice would still be raise money through equity issuing? My intuition tells me this may be possible for an expensive company.", "title": "" }, { "docid": "12ba592d2f049943973920988ce2b57c", "text": "The general difference between high dividend paying stocks and growth stocks is as follows: 1) A high dividend paying stock/company is a company that has reached its maximum growth potential in a market and its real growth (that is after adjustment of inflation) is same (more or less) as the growth of the economy. These companies typically generate a lot of cash (Cash Cow) and has nowhere to really invest the entire thing, so they pay high dividends. Typically Fast Moving Consumer Goods (FMCG) ,Power/Utility companies, Textile (in some countries) come into this category. If you invest in these stocks, expect less growth but more dividend; these companies generally come under 'defensive sector' of the market i.e. whose prices do not fall drastically during down turn in a market. 2) Growth stocks on the other hand are the stocks that are operating in a market that is witnessing rapid growth, for example, technology, aerospace etc. These companies have high growth potential but not much accumulated income as the profit is re-invested to support the growth of the company, so no dividend (you will be typically never get any/much dividend from these companies). These companies usually (for some years) grow (or at least has potential to grow) more than the economy and provide real return. Usually these companies are very sensitive to results (good or bad) and their prices are quite volatile. As for your investment strategy, I cannot comment on that as investment is a very subjective matter. Hope this helps", "title": "" }, { "docid": "03b5874b3cdae035a4a2bfba3261aedd", "text": "Dividends indicate that a business is making more profit than it can effectively invest into expansion or needs to regulate cash-flow. This generally indicates that the business is well established and has stabilized in a dominant market position. This can be contrasted against businesses that: Dividends are also given preferential tax treatment. Specifically, if I buy a stock and sell it 30 days later, I will be taxed on the capital gains at the regular income rate (typically 25-33%), but the dividends would be taxed at the lower long-term capital gains rate (typically 15%).", "title": "" }, { "docid": "d2644f6e1393dd5456a5622d75f2ca7f", "text": "Yep, there just is no free lunch. So called high dividend stocks are usually from companies that have stable cash flows but relatively little or moderate growth potential. Utility companies come to mind, let's take telecommunications as an example. Such stocks, usually, indeed are considered more conservative. In a bull market, they won't make high jumps, and in a bear market they shouldn't experience deep falls. I mean, just because the stock market fell by 10%, you're not going to stop using your phone. The stock might suffer a bit but the divided is still yielding you the same. However, fundamental data can have a significant impact. Let's say a recession hits the country of the telco. People might not get the newest iPhone and lock in to an expensive contract anymore, they might use cheaper forms of communication, they might stop paying bills, go bankrupt etc. This will have a severe impact on the company's cash flow and thus hit the stock in a double whammy: One, the dividend is gone. Two, the price will fall even further. There are basically two scenarios after that. Either the recession is temporary and your stock became a regular growth stock that at some point might bounce back and re-establish at the previous levels. Or the economy has contracted permanently but regained stability in which case you will again have a stock with a high dividend yield but based on a lower price. In conclusion: High dividend stocks make sense in a portfolio. But never consider their income to be safe. Reduce your risk by diversifying.", "title": "" }, { "docid": "ef5f93bc5a831258afd86f1561b402ba", "text": "\"The difference between dividend and growth in mutual funds has to do with the types of stocks the mutual fund invests in. Typically a company in the early stages are considered growth investments. In this phase the company needs to keep most of its profits to reinvest in the business. Typically once a company gets a significant size the company's growth prospects are not as good so the company pays some of its profits in the form of a dividend to the shareholders. As far as which is the best buy is totally a personal choice. There will be times when one is better then the other. Most likely you will want to \"\"diversify\"\" and invest in both types.\"", "title": "" }, { "docid": "22dfc1874b671568caacf18252b7cbd0", "text": "Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too) Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income Fourthly, dividend pay out ratio of most companies don't exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world Lastly, I trust by instinct a regular dividend paying company more than not paying one in same sector of industry", "title": "" }, { "docid": "3f55bb3f3499c894a67cb3c1ac0d20ce", "text": "If you assume the market is always 100% rational and accurate and liquid, then it doesn't matter very much if a company pays dividends, other than how dividends are taxed vs. capital gains. (If the market is 100% accurate and liquid, it also doesn't really matter what stock you buy, since they are all fairly priced, other than that you want the stock to match your risk tolerance). However, if you manage to find an undervalued company (which, as an investor, is what you are trying to do), your investment skill won't pay off much until enough other people notice the company's value, which might take a long time, and you might end up wanting to sell before it happens. But if the company pays dividends, you can, slowly, get value from your investment no matter what the market thinks. (Of course, if it's really undervalued then you would often, but not always, want to buy more of it anyway). Also, companies must constantly decide whether to reinvest the money in themselves or pay out dividends to owners. As an owner, there are some cases in which you would prefer the company invest in itself, because you think they can do better with it then you can. However, there is a decided tendency for C level employees to be more optimistic in this regard than their owners (perhaps because even sub-market quality investments expand the empires of the executives, even when they hurt the owners). Paying dividends is thus sometimes a sign that a company no longer has capital requirements intense enough that it makes sense to re-invest all of its profits (though having that much opportunity can be a good thing, sometimes), and/or a sign that it is willing, to some degree, to favor paying its owners over expanding the business. As a current or prospective owner, that can be desirable. It's also worth mentioning that, since stocks paying dividends are likely not in the middle of a fast growth phase and are producing profit in excess of their capital needs, they are likely slower growth and lower risk as a class than companies without dividends. This puts them in a particular place on the risk/reward spectrum, so some investors may prefer dividend paying stocks because they match their risk profile.", "title": "" } ]	fiqa
e8e5bc82e66d50d5dc83a423174d2377	Advantages/Disadvantages to refinancing online?	[ { "docid": "726a20f47f3f5bf128c943ade3684687", "text": "If you can deal with phone calls instead of a face to face meeting, for the average person with an average refinance online tools just offer another way to shop for deals. For new mortgages, I think having a person you can meet face to face will avoid problems, but for just a simple refi, online is one of the places you should check. Compete your current mortgage company, your bank (hopefully credit union), a local broker or two and the online places. The more competition you have, the more power you have in making a good choice.", "title": "" }, { "docid": "b0b510c62b5a3e4373f767e7fca65d71", "text": "For what its worth, I recently closed on a 30 year refinance mortage with an agent I found through Zillow. The lender has a perfect 5/5 reputation score, whose office was located within 5 miles of my house, and as suggested by justkt on MrChrister's response, I checked out the business on the better business bureau and its online presence prior to going forward with the bank. The process was relatively painless, and the APR and closing costs were less than my previous loan with a federal credit union which I've used in the past. I can't say if the bank I'll be using going forward is as good as the one I've used in the past, but overall I'm quite happy with it. I never met the individual in person but this saved both of us a fair amount of time honestly.", "title": "" }, { "docid": "dbf2539fe242822b20c9de9c8b5171b8", "text": "If you've been in your house for a few years (and have built some equity up) and the market is active in your area, online is probably fine. The local banks will be better if it's not obvious to someone in Bangor, ME that your neighborhood in San Diego is worth substantially more than the crappy area 2 miles away. I've had 3 mortgages, one from a regional bank, one from a broker-sourced national mortgage company and another from a local bank. The bigger banks had better statements and were easier to do stuff with online. The smaller bank has been a better overall value, because the closing costs were low and they waived some customary fees. In my case, the national mortgage company had a better APR, but my time horizon for staying in the house made the smaller bank (which had a competitive APR, about a half point higher than the lowest advertised) a better value due to much lower up-front costs.", "title": "" } ]	[ { "docid": "59c2fb029f2815e8ac67daeccacb2cd3", "text": "\"I haven't heard 30-year mortgages called unwise. As @jared said, the shorter terms often will be cheaper if you are going to pay off within that term anyway, but the extra cost of the 30 may still be justified because it gives you the \"\"safety net\"\" of being able to fall back to the lower payment if money gets tight. Cheap insurance if you might need that insurance. That wasn't something I was worried about, so I took a 20-year, later refinanced as 15-year, and got a slightly better rate by doing so. Consider how long you expect to own this house, and shop for the best deal you can find. Remember to figure points into the real cost the loan. There are calculators on many bank/credit-union websites that can help you do this comparison.\"", "title": "" }, { "docid": "2120e469025fbd901c6c37965d30050c", "text": "Do you know how SoFi's business model works? They're usually pretty conservative with their loans and refinancing. But I guess if they were looking to expand into riskier loans then it sounds like they've got some red tape that'd hold them back. Thank you for the explanation, much appreciated.", "title": "" }, { "docid": "8dfd8f9551cb41ca84b421e899594d2c", "text": "Our mortgage provider actually took the initiative to send us a refinance package with no closing costs to us and nothing added to the note; took us from a 30-year-fixed ~6.5% note to a 15-year-fixed ~5% note, and dropped the monthly payment in the process. You might talk to your existing lender to see if they would do something like that for you; it gives them a chance to keep your business, and it cuts your costs.", "title": "" }, { "docid": "dec73241df543467b6a36a3a7dc5cb31", "text": "Is this an unusual amount to pay for refinancing a home loan? Yes, I would say it seems pretty high. Although credit unions usually have pretty good deals, I would shop around a bit. Is refinancing not worth it if you might move in the next year or two? Totally not worth it if you'll be moving in a year or two. You need to think realistically about what you could sell your house for though. If you bought it 4 years ago, it's likely gone down in value significantly (depending on your locale). Are you prepared to take a significant loss to sell? If not, you might be forced to stick it out for 3-5 years or more.", "title": "" }, { "docid": "e1b1556891c640ff506cac3ad191e843", "text": "Investopedia has a nice article on this here The Key benefit looks like better returns with lower capital. The disadvantage is few brokers offering that can be trusted. Potentially lower return due to margins / spreads. Higher leverage and can become an issue.", "title": "" }, { "docid": "277d80fd228820ac4ab713d9f9397aa7", "text": "Nope. If there is no prepayment penalty go for it. Find another credit source to use (like a credit card you pay off every month) if you want to get a long history. Saving money on interest is more important to me than minutia in a credit score.", "title": "" }, { "docid": "aa12cba86d52e3dec51271ecfec2688a", "text": "I can't think of any more negatives apart from what you mentioned, but the positives might include higher cost base for when you sell the place (this only applies in Australia if it is an investment property) thus having to pay less tax on the capital gains, and being able to borrowing extra funds which may help with your cashflow (especially if you keep the extra funds in an 100% offset account so your interest payable is not increased until you really need the extra funds).", "title": "" }, { "docid": "b2bbed915d44426de310febe8fe1942d", "text": "\"If you mortgage after the fact you will usually pay an extra .25% higher on the interest rate because a \"\"cash out\"\" refinance is treated as riskier than a new home purchase mortgage. You might save enough on the purchase price of the home with a cash offer to make that higher interest rate worth it, but in most cases, if you are planning to hold the loan for a long time, it's best to get that mortgage at the time of purchase. You might be able to get the same deal with an offer that says you will pay cash if there are any problems getting the loan approved.\"", "title": "" }, { "docid": "3d0fe3e6e7002ef41d8402ddc82e230d", "text": "\"In practical terms, these days, a credit union IS a small \"\"savings and loan\"\" bank -- the kind of bank that used to exist before bankers started making money on everything but writing loans. They aren't always going to offer higher interest and/or cheaper loans than the bank-banks, but they're almost always going to be more pleasant to deal with since they consider the depositors and borrowers their stockholders, not just customers. There are minor legal differences (different insurance fund, for example), and you aren't necessarily eligible to open an account at a randomly-chosen credit union (depending on how they've defined the community they're serving), but they will rarely affect you as an account holder. The main downside of credit unions is that, like other small local banks, they will only have a few branches, usually within a limited geographic area. However, I've been using a credit union 200 miles away (and across two state lines on that route, one if I take a large detour) for decades now, and I've found that between bank-by-mail, bank-by-internet, ATM machines, and the \"\"branch exchange\"\" program (which lets you use branches of participating credit unions as if they were branches of your own) I really haven't felt a need to get to the branch. I did find that, due to network limitations of $50K/CU/day, drawing $200,000 worth of bank checks on a single day (when I purchased the house) required running around to four separate branch-exchange credit unions. But that's a weird situation where I was having trouble beating the actual numbers out of the real estate agents until a few days before the sale. And they may have relaxed those limitations since... though if I had to do it again, I'd consider taking a scenic drive to hit an actual branch of my own credit union. If you have the opportunity to join a credit union, I recommend doing so. Even if you don't wind up using it for your \"\"main\"\" accounts, they're likely to be people you want to talk to when you're shopping for a loan.\"", "title": "" }, { "docid": "4c341364afeab9a693ed255b3f300d17", "text": "\"This is the meat of your potato question. The rephrasing of the question to a lending/real estate executive such as myself, I'd ask, what's the scenario? \"\"I would say you're looking for an Owner Occupied, Super Jumbo Loan with 20% Down or $360K down on the purchase price, $1.8 mil purchase price, Loan Amount is ~$1.45 mil. Fico is strong (assumption). If this is your scenario, please see image. Yellow is important, more debt increases your backend-DTI which is not good for the deal. As long as it's less than 35%, you're okay. Can someone do this loan, the short answer is yes. It's smart that you want to keep more cash on hand. Which is understandable, if the price of the property declines, you've lost your shirt and your down payment, then it will take close to 10 years to recover your down. Consider that you are buying at a peak in real estate prices. Prices can't go up more than they are now. Consider that properties peaked in 2006, cooled in 2007, and crashed in 2008. Properties declined for more than 25-45% in 2008; regardless of your reasons of not wanting to come to the full 40% down, it's a bit smarter to hold on to cash for other investments purposes. Just incase a recession does hit. In the end, if you do the deal-You'll pay more in points, a higher rate compared to the 40% down scenario, the origination fee would increase slightly but you'll keep your money on hand to invest elsewhere, perhaps some units that can help with the cashflow of your home. I've highlighted in yellow what the most important factors that will be affected on a lower down payment. If your debt is low or zero, and income is as high as the scenario, with a fico score of at least 680, you can do the deal all day long. These deals are not uncommon in today's market. Rate will vary. Don't pay attention to the rate, the rate will fluctuate based on many variables, but it's a high figure to give you an idea on total cost and monthly payment for qualification purposes, also to look at the DTI requirement for cash/debt. See Image below:\"", "title": "" }, { "docid": "ff0b15f9cbb3b8000b376045467a9566", "text": "As for refinancing: Many institutions charge up-front fees when doing any type of vehicle loan. Typically this is in the neighborhood of 1% the value of the loan, with a floor of $100 (although this may vary by lender). However, for the loan the be secured by the vehicle, the principle value must be less than the collateral value. In your case, this means there is a collateral shortfall of $4,000. When working with a traditional bank, you would have two options: pay the difference up front (reducing the principle value of the loan), or obtaining a separate loan for the difference. This separate loan would often have a higher interest rate unless you have some other form of collateral to secure it with. I doubt CarMax would do a separate loan. All that being said, if you plan on selling the vehicle within the next twelves months, don't bother refinancing. It won't be worth the hassle.", "title": "" }, { "docid": "1907a57fe43b6cf6cbaa2ac2986d6ec0", "text": "If you're a bit into the loan, then they're probably hoping that you'll take longer to pay off the loan. Is there a fee for refinancing the loan? If so, be sure to take that into account. A smart way to approach it (assuming that the fees are low or zero) would be to continue making the same payment you had been before the refinance. Then you'll end your loan ahead of schedule. (This assumes that there's no prepayment penalty.)", "title": "" }, { "docid": "0e6906c71943738fc5f8b7d44652ea27", "text": "Here are the pros and cons and an analytical framework for making a decision. Pros of walking away: Cons: Here's the framework: compare the value of first and second sections for you [1] http://www.nytimes.com/2009/07/30/business/30serviceside.html?_r=0 [2] http://www.mortgagecalculator.org/", "title": "" }, { "docid": "d6d520bc08473033ee1b797e3b83e260", "text": "Start with the list of mortgage companies approved to work in your area. There are 80 within 10 miles of my house, and more than 100 in my county. Pick ones you know because they are established businesses in your area, region, or even nationally. A good place to start might be with your current lender. The risk you seem to be worried about is a scam or a trick. In the recent past the scams were ones where the home owner didn't understand teaser rates, and the risk of interest only and pick-your-payment loans. The simpler the bells and whistles, the less likely you are to be embarking on a risky transaction. It can't hurt to ask an organization like the BBB or neighbors, but realize that many people loved their exotic mortgage until the moment it blew up in their face. So for 5 years your neighbor would have raved about their new mortgage until they discovered how underwater they were. Regarding how smoothy the transaction is accomplished, is hard to predict. There is great variation in the quality of the loan officers, so a great company can have rookie employees. Unless you can get a recommendation for a specific employee it is hard know if your loan officer is going to give great service. When getting a mortgage for a purchase, the biggest risk is getting a mortgage that results in a payment you can't afford. This is less of a risk with a refinance because you already have a mortgage and monthly payment. But keep in mind some of the monthly savings is due to stretching out the payments for another 30 years. Know what you are trying to do with the refinance because the streamlined ones cant be used for cash out.", "title": "" }, { "docid": "a58078ab7f833f0906be1b19c3205f03", "text": "Your son can gift you unlimited amount of money. It does not fall under income tax. It falls under gift tax. As per gift tax there is no tax for you. Any interest you earn on this is taxable to you. Your son transferred into savings account... if your son is NRI he can't hold savings account. Ask him to open a NRE account and convert savings account to NRO account.", "title": "" } ]	fiqa

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