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Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How did Bill Gates actually make his money? ### Answer: Bill gates is founder of microsoft along with his friend allen.in microsoft as its vast empire increasing the wealth and enormous property of bill gates is increasing ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Selling an app, sharing income, how does it work tax-wise? ### Answer: There are a few different ways to organize this, but mostly I think you need to talk to a lawyer. The 50/50 split thing should be in writing along with a bunch of other issues. You could have one of you doing a sole proprietorship where the other person is a contractor that receives half of all revenues/profits. The person that owns the sole proprietorship may be entitled to deduct certain costs of running the entity. The other person would then be 1099'd his share of revenues. You could set up a partnership, again legal paperwork is necessary. You could also setup an S-Corp, where each of you is a 50% owner. You could also setup an LLC that is organized as any of the above. I would only do this if you can self fund some additional tax preparation costs. Figure about $600/year at a minimum. There are a lot of options with a sole proprietorship being the easiest. Your first step on the new venture would be to apply for an EIN (free), and then opening a business bank account. Good luck. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Calculating NPV for future cash inflows ### Answer: When calculating the NPV, is there anything I need to do in between the project start date outlay (Nov 2017), and the first cash inflow (July 2019). Do I need to discount the cashflow to the present, and if so, how? Yes, you need to discount every cash flow to the present time, not just the first one. When discounting cash flows, the appropriate discount rate needs to represent the opportunity cost of the initial cash outlay. Meaning if you were to use that money for something else, what rate of return would you expect? You could be safe and assume only a risk-free return (like 2-3%) or use the average rate of return of other investments (e.g. 10-15%). Another common approach is to use your cost of capital if you're raising funds for the project, or would instead have use the funds to pay off existing debt. Once you find a relevant discount rate, then just discount each cash flow by dividing them by e^rt, where r is the annualized discount rate (e.g. 0.10 for 10%) and t is the decimal number of years between now and the cash flow (e.g. 1.5 for 18 months) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do online referal systems work? ### Answer: Yeah, I'll take the challenge...:) How trustworthy these are and what are their sources of income? These are in fact two separate questions, but the answers are related. How trustworthy? As trustworthy as they're clear about their own sources of income. If you cannot find any clue as to why, what for and how they're paying you - you probably should walk away. What's too good to be true usually is indeed too good to be true. For those of the sites that I know of their sources of income, it is usually advertisements and surveys. To get paid, you have to watch advertisements and/or answer surveys. I know of some sites who are legit, and pay people (not money, but gift cards, airline miles, etc) for participating in surveys. My own HMO (Kaiser in California) in fact pays (small amounts) to members who participate in enough surveys, so its legit. Are these sites worthwhile to consider for extra income? Not something you could live off, but definitely can get you enough gift cards for your weekly trip to Starbucks. What do I need to consider tax wise? Usually the amounts are very low, and are not paid in cash. While it is income, I doubt the IRS will chase you if you don't report the $20 Amazon gift card you got from there. It should, strictly speaking, be reported (probably as hobby income) on your tax return. Most people don't bother dealing with such small amounts though. In some cases (like the HMO I mentioned), its basically a rebate of the money paid (you pay your copays, deductibles etc. Since the surveys are only for members, you basically get your money back, not additional income). This is in fact similar to credit card rebates. Is there a best practice for handling the income? If we're talking about significant amounts (more than $20-30 a year), then you need to keep track of the income and related expenses, and report it as any other business income on your taxes, Schedule C. Is there a good test to determine what is and isn't a scam? As I said - if it looks too good to be true - it most likely is. If you're required to provide your personal/financial information without any explanation as to why, what it will be used for, and why and what for you're going to be paid - I'd walk away. Otherwise, you can also check Internet reviews, BBB ratings, FTC information and the relevant state agencies and consumer watchdogs (for example: http://www.scamadviser.com) whether they've heard of that particular site, and what is the information they have on it. A very good sign for a scam is contact information. Do they have a phone number to call to? Is it in your own country? If its not in your own country - definitely go away (for example the original link that was in the question pointed to a service whose phone number is in the UK, but listed address is in Los Angeles, CA. A clear sign of a scam). If they do have a phone number - try it, talk to them, call several times and see how many different people you're going to talk to. If its always the same person - run and hide. Do they have an address? If not - walk away. If they do - look it up. Is it a PMB/POB? A "virtual" office? Or do they have a proper office set up, which you can see on the map and in the listings as their office? And of course your guts. If your guts tell you its a scam - it very likely is. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Foreign currency conversion for international visitors to ecommerce web site? ### Answer: Central banks don't generally post exchange rates with other currencies, as they are not determined by central banks but by the currency markets. You need a source for live exchange rate data (for example www.xe.com), and you need to calculate the prices in other currencies dynamically as they are displayed -- they will be changing continually, from minute to minute. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Foreign currency conversion for international visitors to ecommerce web site? ### Answer: For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Foreign currency conversion for international visitors to ecommerce web site? ### Answer: You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers. If you Google currency converter the first result is just that: a currency converter. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: As a sole proprietor can I charge a fee for being paid by check or card ### Answer: You can charge a fee to accept checks, although I think the better solution might be to offer a small discount for early payment of your invoices. As some people here have suggested, why not add a small bit to your fees to begin with to cover your inconvenience in the case they choose to pay by check? I often will give clients a small discount of 1.5% for paying my invoices within 10 days, which does motivate some to pay sooner, depending on the client and the amount of the invoice. If you've already added a small amount to your fees in the first place then providing the discount is good public relations that doesn't actually cost you anything. You can always add a "convenience fee" for accepting checks, but this is a more negative approach, as though you're penalizing the client for paying by check rather than electronically. Some people do see it this way, despite any efforts you make to explain otherwise. As to your question about adding fees for accepting credit cards, be very careful! There are sometimes state or local laws on this, and you could find yourself in trouble very quickly if you run afoul of one. Here's a good article to read on the subject: Adding fees for accepting credit cards from CreditCards.com Site I hope this is helpful. Good luck! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Equity or alternative compensation in an LLC? ### Answer: I'm not sure 1099-MISC is what you should expect. Equity means ownership, and in LLC context it means membership. As an LLC member, you'll get distributions and should receive a K-1 form for tax treatment, not 1099 or W2. If the CEO is talking about 1099 it means he's going to hire you as a contractor which contradicts the statement about equity allocation. That's an entirely different situation. 1) Specifically, would the 1099-MISC form be used in this case? 1099-MISC is used to describe various payments. Depending on which box is filled, the tax treatment may be as of employment income (subject to SE taxes) or passive income (royalties, rents, etc - subject to various limitations in the tax code). 3) If this is the only logical method of compensation (receiving a % of real estate sales), how would it be taxed? That would probably be a commission and taxed as employment income. I suggest to get a professional tax adviser consultation on this issue, with specific details, numbers, and kinds of deals involved. You can get gain or lose a lot of money just because you're characterized as a contractor and not LLC member or employee (each has its own benefits and disadvantages, and you have to consider them all). 4) Are there any advantages/disadvantages to acquiring and selling properties through the company as opposed to receiving a % of sales? Yes. There are advantages and there are disadvantages. For example, if you're using a corporation, you can get salary, if you're a contractor you cannot. There are a lot of issues hidden in this distinction (which I've just discussed with KeithS in this argument). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How common is “pass-through” health insurance? ### Answer: Even though this isn't really personal finance related I still feel like there are some misconceptions here that could be addressed. I don't know where you got the phrase "pass-through" insurance from. What you're describing is a self-funded plan. In a self-funded arrangement an employer contracts a third-party-administrator (TPA), usually one of the big health insurance carriers, to use it's provider network, process and adjudicate claims, etc. In addition to the TPA there will be some sort of stop-loss insurance coverage on each participant. Stop-loss coverage usually provides a maximum amount of risk on a given member and on the entire population for a given month and/or year and/or lifetime. The employer's risk is in between the plan deductible and the stop loss coverage (assuming the stop-loss doesn't have a maximum). Almost all of the claim dollars in a given plan will come from very very few people. These costs typically arise out of very unforeseen diagnoses not chronic issues. A cancer patient can easily cost $1,000,000 in a year. Someone's diabetes maintenance medicine or other chronic maintenance will cost no where near what a botched surgery will in a year. If we take a step back there are really four categories of employer insurance. Small group is tightly regulated. Usually plan premiums are filed with a state authority, there is no negotiating, your group's underwriting performance has zero impact on your premiums. Employers have no way of obtaining any medical/claim information on employees. Mid-market is a pooled arrangement. The overall pool has a total increase, and your particular group performs better or worse than the pool which may impact premiums. Employers get very minor claims data, things like the few highest claims, or number of claims over a certain threshold, but no employee specific information. Large-group is a mostly unpooled arrangement. Generally your group receives it's own rating based on its individual underwriting performance. In general the carrier is offloading some risk to a stop-loss carrier and employer's get a fair amount of insight in to claims, though again, not with employee names. Self-funded is obviously self-contained. The employer sets up a claims checking account. The TPA has draft authority on the account. The employee's typically have no idea the plan is self funded, their ID cards will have the carrier logo, and the carrier deals with them just as it would any other member. Generally when a company is this size it has a separate benefits committee, those few people will have some level of insight in to claims performance and stop-loss activity. This committee will have nothing to do with the hiring process. There are some new partially self-funded arrangements, which is just a really low-threshold (and relatively expensive) stop-loss program, that's becoming somewhat popular in the mid-market group size as employers attempt to reduce medical spend. I think when you start thinking on a micro, single employee level, you really lose sight of the big picture. Why would an employer hire this guy who has this disease/chronic problem that costs $50,000 per year? And logically you can get to the conclusion that with a self-funded plan it literally costs the company the money so the company has an incentive not to hire the person. I understand the logic of the argument, but at the self funded level the plan is typically costing north of half a million dollars each month. So a mid-level HR hiring manager 1. isn't aware of specific plan claims or costs and is not part of the benefits executive committee, 2. won't be instructed to screen for health deficiencies because it's against the law, 3. a company generally won't test the water here because $50,000 per year is less than 1% of the company's annual medical expenses, 4. $50,000 is well below the cost to litigate a discrimination law-suit. Really the flaw in your thought process is that $50,000 in annual medical expense is a lot. A harsh child-birth can run in the $250,000 range, so these companies never hire women? Or never hire men who could add a spouse who's in child bearing years? Or never hire women who might have a female spouse who could be in child bearing years? A leukemia diagnosis will ratchet up $1,000,000 in a year. Spend a bit of time in intensive care for $25,000 per day and you're fired? A few thousand bucks on diabetes meds isn't anything relative to the annual cost of your average self-funded plan. The second flaw is that the hiring managers get insight in to specific claims. They don't. Third, you don't hand over medical records on your resume anyway. I typed this out in one single draft and have no intention of editing anything. I just wanted paint a broad picture, I'm sure things can be nit-picked or focused on. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do you compare the sales of a company like Coca Cola against another company like JPMorgan Chase to figure out the best investment opportunity? ### Answer: The question isn't sales but profits. Banks traditionally profit by making loans. Just as with a physical product, there are costs involved, income produced, and the difference between the two is gross profit. From there you can get net profit, and from there you can look at efficiency or profit per share or whatever other metric floats your boat. Or you can just buy index funds, get average rates of return, and not have to think about it. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are there tax liabilities (in the US) for having a US bank account while I am abroad? ### Answer: I don't think so in your case. Unless the account generates so much interest income that it became reportable (I don't know the exact limit, but I think it's in the hundreds if not thousands of dollars, you might get a 1099 form if it generates over $10 of interest income, but you don't have to file taxes if your overall income is too low anyways). The US does not typically tax assets, only income. There are some states (Florida is the only one I can think of) that has odd tax treatment of intangible assets, but I doubt that would apply in your case. If this were a large enough amount, usually over $10,000, it might trigger some reporting requirements (possibly by your home country). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: quid has expressed some of the disadvantages with this approach, but there is another. Vendors will not want to give you any goods you buy with your credit card until they are sure they will get the money. With your suggested approach buying something with a credit card now looks like: No vendor is going to stand for this for even moderate sized transactions, so in reality they will just decline your card if you have this facility enabled. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: Credit card fraud is an extremely (to stress, EXTREMELY) small proportion of total credit card transactions. The card issuing entities all offer zero fraud liability, even on debit cards. There are millions of transactions every day and fraud loss just isn't worth developing, and supporting, an additional authentication layer that faces the consumer. To be clear, the downside is cost. Cost to develop, cost to implement, cost to maintain, cost to support. All of this to stop something that millions of people have yet to even experience. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: The other answers touch on why having two-factor auth or some other additional system is not worth it compared to simple reactive systems (cancelling lost cards, reversing fraudulent charges etc), but it should also be noted that this goal can be achieved with a method similar to what you describe. My bank (TD Canada Trust) has an app (I'm on android) that gives you a notification immediately after your card is charged (even test charges like at the gas station). It's really simple, does not slow down authorization, and makes fraud detection super easy. (I'm sure some other banks have similar apps). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: Credit cards and debit cards make up the bulk of the transactions in the US. Visa and Mastercard take a percentage of each credit card transaction. For the most part, this fee it built into the price of what you buy. That is, you don't generally pay extra at the grocery store if you use a credit card (gasoline purchases are a notable exception here.) If you were getting something like 2% of a third of all the retail transactions in the US, you'd probably not want to rock the boat too much either. Since there is little fraud relative to the amount of money they are taking in, and it can often be detected using statistical analysis, they don't really stand to gain that much by reducing it through these methods. Sure they can reduce the losses on the insurance they provide to the credit card consumer but they risk slowing down the money machine. These companies want avoid doing something like reducing fraud by 0.5% revenues but causing purchases with the cards drop by 1%. More security will be implemented as we can see with the (slow) introduction of chip cards in the US but only at a pace that will prevent disruption of the money machine. EMV will likely cause a large drop in CC fraud at brick-and-mortar stores but won't stop it online. You will likely see some sort of system like you describe rolled out for that eventually. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why don't banks allow more control over credit/debit card charges? ### Answer: A few years ago I had a US bank credit card that was serviced (all support, website, transaction issues) handled by FIA Card Services (part of Bank of America). I could create one-use credit card numbers, or time-limited (for example, 3 months) numbers. I could also create ("permanent)) extra card numbers. All of these could have a max charge value (IIRC, even a fixed value), so you could have a separate card number, with a limit, just for a subscription service or gym membership. The Bank issuing the card cancelled the entire card offering, so I lost these features. Maybe FIA still provides these features on cards they service. As a note to pjc50 (can't comment in this SE yet), Japan has had contactless cards for >10 years, but during use they tend to place them in a special tray (with the sensor underneath) during the transaction. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to receive packages pseudonymously? ### Answer: I've done this before for startup companies where I didn't want the mailing address to really obviously be my apartment or home address. Just for appearances. What you should be Googling are terms like "private mailbox center." If I recall correctly, I used to do this with Mail Boxes Etc before they were bought by UPS. This seems to be the equivalent offering these days: https://www.theupsstore.com/mailboxes I haven't looked at a dummy office for receiving mail -- I imagine that is a bit more expensive. Unless people are delivering things in person I think that would be overkill -- the Fedex guy doesn't care if his package delivery is to a UPS mailbox center. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do “held” amounts appear on statements and affect balances of traditional credit cards? ### Answer: The "hold" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't "holding" your money, your bank or card provider is protecting itself from you overdrawing. In general, it takes 1-3 days for a credit transaction to settle. With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance. I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Steps/Procedures to open an online stock trading account in the US ### Answer: Since you are not starting with a lot of cash the commissions may eat into your account. So go with somebody that has no inactivity fee and low/free commission. I think there are number of sites and the ING sharebuilder.com comes to mind. Scottrade also one of the cheaper ones that i used. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I need to file a 1099 form for contractors associated with hobby income? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: GnuCash, how do I book loan from credit card, being paid back with salary? [duplicate] ### Answer: When you pay the flight, hotel, conference attendance fees of $100: When you repay the credit card debt of $100: When you receive the gross salary of $5000: Your final balance sheet will show: Your final income statement will show: Under this method, your "Salary" account will show the salary net of business expense. The drawback is that the $4900 does not agree with your official documentation. For tax reporting purposes, you report $5000 to the tax agency, and if possible, report the $100 as Unreimbursed Employee Expenses (you weren't officially reimbursed). For more details see IRS Publication 529. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can a custodian refuse prior-year IRA/HSA deposit postmarked April 15? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can a custodian refuse prior-year IRA/HSA deposit postmarked April 15? ### Answer: The slips from your bank for your HSA account are for an account already established and thus the bank is willing to accept your deposits even if they arrive at the bank after the April 15 deadline, as long as the postmark is April 15 or earlier. The account exists in the bank, they know who you are, and that the payment is received after April 15 is just due to the normal (or even abnormal) delays in postal delivery. For the new account that you tried to establish (with appropriate notarization and timely postmark etc), the credit union could not have received the paperwork as of the close of business on April 15 (except in the very unlikely circumstance that a local letter deposited in the mailbox in the morning gets delivered the same day by USPS: don't extrapolate from stories of how mail was delivered in London in Victorian times). Ergo, you did not have an HSA account in the credit union as of April 15, and they are perfectly correct in refusing to open an account with a April 15 date and put money into it for the previous tax year. To answer the question asked: Are they allowed to ignore the postmark date? Yes, not only are they allowed to ignore the postmark date, the IRS insists that they ignore the postmark date. The credit union prefers to report only the truth: as of April 15, you had not established an HSA account as of April 15; to say otherwise would be making a false statement to the IRS. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can a custodian refuse prior-year IRA/HSA deposit postmarked April 15? ### Answer: I had a situation like this also. A client deposited an IRA check to his local P.O. prior to collection p/up, thinking this meant it would be postmarked April 15. It may have been picked up, but wasn't postmarked until the next day, and my firm refused to consider it as timely. I do remember discussing it w/my Retirement Services Dept. Maybe they made an exception for me and my client, but maybe not. I don't remember. Good luck. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Insurance for a house which is not homeowners insurance? ### Answer: What you need will depend on a number of factors that aren't clear from the question. This coverage is simply called "Vacant home insurance", but not all companies are willing to offer this coverage. Unfortunately, in New York, insurers can also legally drop your standard homeowners' coverage if they become aware that your property has become vacant for 30 days or more. The Insurer's Concerns Typically, a "standard" homeowners policy will have an exclusion clause for vacant homes. The insurance company's concern is that without someone in the home, they will be at risk for break-ins, squatters and vandalism. If you've ever seen "Flip Men" on Spike, you'll know this is a serious concern (great show, by the way). They will use a risk model to calculate an estimated risk for the property (this is why a seasonal vacation home in a sparsely-populated area is often less of a concern than a family home in an urban area). If they estimate the risk to be low, some insurance companies will allow to you buy back that exclusion so that vacant properties are covered. In your case, they have probably decided that either: Your Options First, you need to find a company that is comfortable with taking on the extra risk of a vacant home. This will vary quite a bit by location, but the main ones are Farmer's (they use the Foremost brand name in New York) and Castle Rock. There are lots of insurance agencies that also advertise these products, but most of them are middlemen and use one of these two companies to actually write the coverage. Additionally, since this is a specialty policy, make sure you understand all of the details of the policy, and how they vary from a regular policy including: How to Reduce your Premium costs These are general tips from the Murray Group's website (an independent broker in NY) on how to lower the additional cost of vacant coverage: This may sound expensive, but these steps will all reduce the risk of something really bad happening when you're not there. Additionally, do you know anyone you completely trust (relative, unemployed friend) that might want to live in your old house rent-free for a while? This could work out for you if they are willing to keep the place 100% clean around the clock so that you can show the house at any time. If you have additional/specific questions, you should be able to find an independent insurance broker in your area that would be willing to advise you on your specific situation for a flat fee. Best of luck with getting the home covered and sold quickly! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do disputed debts work on credit reports? ### Answer: You're not missing anything. Consumer protection in the US is very basic and limited, if at all. So if someone claims you owe them something, it would be really hard for you to prove otherwise unless you actually drag them to court. Especially if there actually was a relationship, and there probably is some paperwork to substantiate the claim. I suggest talking to a consumer issues attorney. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do disputed debts work on credit reports? ### Answer: If you tell the collector that the claim isn't valid, they're obliged to go back to the creditor to verify it. Sometimes that gets a real person, instead of their automatic billing system, to look at the claim, and if you're right, they'll drop it. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should withheld income tax be included as income? ### Answer: Does it make sense to report withheld tax income as an additional income? Is it required by the IRS? Is $T deductible? This is what is called imputed income. The ticket is an income for you, but the company doesn't want you to pay tax on it. But you have to. But they want to be nice to you and give you the ticket on their buck. But that's the law. So what have the accountants invented? Imputed income. The company raises your salary in the amount of taxes paid (+some, but that's negligible), in addition to the actual ticket. So it seems, to you, that you got the ticket for free. The IRS doesn't see the ticket, it just sees that you got a $T+$X bonus and paid $T taxes. The fact that the $X you got in form of a ticket doesn't matter to them. Re your edit - you cannot deduct anything, since you can only deduct unreimbursed expenses, whereas $X is not at all an expense for you (you didn't buy that ticket, the company did), and $T is taxes, which are not deductible (its not an expense). In other words, had C not have been nice, I would be in a better position! No. Your net pay shouldn't be affected, technically, so from your perspective you just got a plane ticket for free. Had C not been nice, you would still not be able to deduct the whole cost of $X, because unreimbursed employee expenses have a 2% AGI threshold. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should withheld income tax be included as income? ### Answer: This very topic was the subject of a question on workplace SE https://workplace.stackexchange.com/questions/8996/what-can-relocation-assistance-entail TL/DR; From tax publication 521 - Moving expenses table regarding how to report IF your Form W-2 shows... your entire reimbursement reported as wages in box 1 AND you have... moving expenses THEN... file Form 3903 showing all allowable expenses,* but do not show any reimbursements. There are tax implications Covered in tax publication 521 - Moving expenses and Employers tax guide to Fringe Benefits related to moving expenses. From the Employers View: Moving Expense Reimbursements This exclusion applies to any amount you directly or indirectly give to an employee, (including services furnished in kind) as payment for, or reimbursement of, moving expenses. You must make the reimbursement under rules similar to those described in chapter 11 of Publication 535 for reimbursement of expenses for travel, meals, and entertainment under accountable plans. The exclusion applies only to reimbursement of moving expenses that the employee could deduct if he or she had paid or incurred them without reimbursement. However, it does not apply if the employee actually deducted the expenses in a previous year. Deductible moving expenses. Deductible moving expenses include only the reasonable expenses of: Moving household goods and personal effects from the former home to the new home, and Traveling (including lodging) from the former home to the new home. Deductible moving expenses do not include any expenses for meals and must meet both the distance test and the time test. The distance test is met if the new job location is at least 50 miles farther from the employee's old home than the old job location was. The time test is met if the employee works at least 39 weeks during the first 12 months after arriving in the general area of the new job location. For more information on deductible moving expenses, see Publication 521, Moving Expenses. Employee. For this exclusion, treat the following individuals as employees. A current employee. A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Exception for S corporation shareholders. Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Exclusion from wages. Generally, you can exclude qualifying moving expense reimbursement you provide to an employee from the employee's wages. If you paid the reimbursement directly to the employee, report the amount in box 12 of Form W-2 with the code “P.” Do not report payments to a third party for the employee's moving expenses or the value of moving services you provided in kind. From the employees view: The not be included as income the expenses must be from an accountable plan: Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home. You must adequately account to your employer for these expenses within a reasonable period of time. You must return any excess reimbursement or allowance within a reasonable period of time. Also what is interesting is the table regarding how to report IF your Form W-2 shows... your entire reimbursement reported as wages in box 1 AND you have... moving expenses THEN... file Form 3903 showing all allowable expenses,* but do not show any reimbursements. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Being a 1099 for a company I part-own? ### Answer: The contract he wants me to sign states I'll receive my monthly stipend (if that is the right word) as a 1099 contractor. The right word is guaranteed payment, which is what "salary" is called when a partner is working for a partnership she's a partner in. Which is exactly the case in your situation. 1099 is not the right form to report this, the partnership (LLC in your case) should be using the Schedule K-1 for that. I suggest you talk to a lawyer and a tax adviser (EA/CPA) who are licensed in your State, before you sign anything. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Need a formula to determine monthly payments received at time t if I'm reinvesting my returns ### Answer: How does compounding of annual interest work? answers this question. It's not simple compound interest. It's a time value of money calculation similar to mortgage calculations. Only the cash flow is the other way, a 'deposit' instead of 'payment'. When using a finance calculator such as the TI-BA35 (Note, it's no longer manufactured, but you can find secondhand. It was the first electronic device I ever loved. Seriously) you enter PV (present value) FV (future value) Int (the interest rate) nPer (number of periods) PMT (payment). For a mortgage, there's a PV, but FV = $0. For you, it's reversed. PMT on this model is a positive number, for you it's negative, the amount you deposit. You also need to account for the fact that a mortgage is paid on day 31, but you start deposits on Day 1. See the other answer (I linked at start) for the equations. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Need a formula to determine monthly payments received at time t if I'm reinvesting my returns ### Answer: With 10% return over three years, depositing $900 each month, in three years $34,039.30. Re. downvote. I guess this is too brief and without explanation, but I was rushing. If you want further explanation of how this is calculated check the link already posted by JoeTaxpayer, and have a look at the formula for continuously compounded return. Also, try out the numbers in the simplified example below yourself. E.g. Addendum mhoran_psprep has pointed out that I didn't read the OP's post closely enough. With rolling investments the total return will be: Where n is the month number i.e. 36, 37, etc. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: The main reason for paying your mortgage off quickly is to reduce risk should a crisis happen. If you don't have a house payment, you have much higher cash flow every month, and your day-to-day living expenses are much lower, so if an illness or job loss happens, you'll be in a much better position to handle it. You should have a good emergency fund in place before throwing extra money at the mortgage so that you can cover the bigger surprises that come along. There is the argument that paying off your mortgage ties up cash that could be used for other things, but you need to be honest with yourself: would you really invest that money at a high enough rate of return to make up your mortgage interest rate after taxes? Or would you spend it on other things? If you do invest it, how certain are you of that rate of return? Paying off the mortgage saves you your mortgage interest rate guaranteed. Finally, there is the more intangible aspect of what it feels like to be completely debt free with no payments whatsoever. That feeling can be a game-changer for people, and it can free you up to do things that you could never do when you're saddled with a mortgage payment every month. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: Considering that it's common for the monthly mortgage payment to be 25% of one's income, it's an obvious advantage for that monthly burden to be eliminated. The issue, as I see it, is that this is the last thing one should do in the list of priorities: The idea of 'no mortgage' is great. But. You might pay early and have just a few years of payments left on the mortgage and if you are unemployed, those payments are still due. It's why I'd suggest loading up retirement accounts and other savings before paying the mortgage sooner. Your point, that rates are low, and your expected return is higher, is well presented. I feel no compulsion to prepay my 3.5% mortgage. As the OP is in Canada, land of no mortgage interest deduction, I ignore that, till now. The deduction simply reduces the effective rate, based on the country tax code permitting it. It's not the 'reason' to have a loan. But it's ignorant to ignore the math. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: I used to think that paying off ahead of time made sense, but I no longer do, at least in most cases. The upside is that you can get a return on your money equal to the mortgage interest rate (it's less than that in the US, where mortgage interest is deductible, so it's roughly the mortgage interest rate * 1 - your marginal income tax rate). There are a few downsides. The biggest is that cash is the most liquid asset you can have; you can get at it with no restrictions. If you put that cash into your house, you are converting that into an asset with a lot of restrictions; you can't get at it without fees, nor can you get at it if you don't have a job, which is when you would need it most. So, you are putting your money in a hard-to-get-at place for a small interest rate. I don't think it is worthwhile. (edit) One complication is PMI. If you are currently paying PMI, it may make sense to put money towards the mortgage until you get to 20% and can get rid of the PMI. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: It depends on where you are in life, and where you want to be at some point in the future, and the taxes, expenses and income at those points in your life. You don't get a mortgage to save on taxes, or keep a mortgage to save on taxes. But if somebody said they want to have the house paid off before they retire, that sounds to me like a great plan. They do need to balance it with saving for retirement, emergency fund, and college costs for themselves or their children. Without having the whole picture it is impossible to say doing X is always a good idea. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: The financial reasons, beyond simply owning your home outright, are: You're no longer paying interest. Yes, the interest is tax-deductible in the U.S. (though not in Canada), but the tax savings is a percentage of a percentage; if you paid, say, $8000 in interest last year, at the 25% marginal rate you effectively save $2000 off your taxes. But, if you paid off your home and had that $8000 in your pocket, you'd pay the $2000 in taxes but you'd have $6000 left over. Which is the better deal? In Canada, the decision gets even easier; you pay taxes on the interest money either way, so you're either spending the $8000 in interest, lost forever as cost of capital, or on other things. Whatever you're earning is going into your own pocket, not the bank's. Similar to the interest, but also including principal, a home you own outright is a mortgage payment you don't have to make. You can now use that money, principal and interest, for other things. Whether these advantages outweigh those of anything else you could do with a few hundred grand depends primarily on the rate of return. If you got in at the bottom of the mortgage crisis (which is pretty much right now) and got a rate in the 3-4% range, with no MIP or other payment on top, then almost anything you can do with the amount you'd need to pay off a mortgage principal would get you a better rate of return. However, you'll need some market savvy to avoid risks. In most cases when someone has pretty much any debt and a big wad of cash they're considering how to spend, I usually recommend paying off the debt, because that is, in effect, a risk-free way to increase the net rate of return on your total wealth and income. Balancing debt with investments always carries with it the risk that the investment will fail, leaving you stuck with the debt. Paying the debt on the other hand will guarantee that you don't have to pay interest on that outstanding amount anymore, so it's no longer offsetting whatever gains you are making in the market on your savings or future investments. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the advantages of paying off a mortgage quickly? ### Answer: From my experience and friends' experiences, I can say that there are advantages and disadvantages for paying off your mortgage quickly. Basically, it depends on these factors: the type of the mortgage, its interest rate, your financial stability, your skills in making investments and other outside factors, such as inflation, liquidity, oppurtunity cost, etc. Paying it off means you save on interest ratings, you decrease investment risks and your investment rates are taxable. Disadvantages are that you cannot use this money for investing, you cannot use this money for tax deductions and that in a state of inflation, not paying it off in advance could save you a lot of money. However, I always recommend to read some more on websites that deal with mortgages, and speak with the mortgage expert in your bank.Just acquire enough information to make a good assessment. An interesting article on this topic - The Advantages and Disadvantages of Paying Off Your Mortgage ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: As a contractor, I have done this exact calculation many times so I can compare full time employment offers when they come. The answer varies greatly depending on your situation, but here's how to calculate it: So, subtracting the two and you get I've run many different scenarios with multiple plans and employers, and in my situation with a spouse and 1 child, the employer plans usually ended up saving me approximately $5k per year. So then, to answer your question: ...salary is "100k", "with healthcare", or then "X" "with no healthcare" - what do we reckon? I reckon I would want to be paid $5K more, or $105K. This is purely hypothetical though and assumes there are no other differences except for with or without health insurance. In reality, contractor vs employee will have quite a few other differences. But in general, the calculation varies by company and the more generous the employer's health benefits, the more you need to be compensated to make up for not having it. Note: the above numbers are very rough, and there are many other factors that come into play, some of which are: As a side note, many years ago, during salary talks with a company, I was able to negotiate $2K in additional yearly salary by agreeing not to take the health insurance since I had better insurance through my spouse. Health insurance in the US was much cheaper back then so I think closer to $5K today would be about right and is consistent with my above ballpark calculation. I always wondered what would have happened if I turned around and enrolled the following year. I suspect had I done that they could not have legally lowered my salary due to my breaking my promise, but I wouldn't be surprised if I didn't get a raise that year either. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: As others have said, it depends entirely on what benefits are provided, and how much of the cost of those benefits is paid by the employer and how much is paid by the employee, and compare that to what it would cost to obtain the necessary/equivalent coverage without employer assistance. In my case, my employer pays more than $10,000 per year toward the cost of medical, dental, vision, disability, and life insurance for myself and my family. That's almost 20% of the average total household income in my state, so it is not an insignificant amount at all. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: While the other answers try to quantify the value of health care the question you ask is about employee vs contractor. The delta between those regarding benefits goes way beyond health care. In fact because almost every full time employee must have health care offered by their employer the option of "you can have X with healthcare, or Y with no healthcare" is no longer an option. I have seen situations in the last few years where employees who had no need for healthcare coverage (retired military) were offered additional vacation days to compensate for their lower cost to the employer. For employee vs contractor what is different isn't just healthcare. It also includes holidays, vacation days, sick days, employer portion of social security, education benefits, and 401k. Insurance benefits include not just healthcare but also dental, vision, short term and long term disability, and life insurance. The rule of thumb to cover all these benefits that are lost when you are a contractor is an amount equal to your income. Of course some of these benefits depend on single vs married and kids or not. But unless the rate they are paying the contractors is approaching twice the rate they are paying employees the contractor will be hard pressed to cover the missing benefits. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: Equation: (M x 12) + MOOP = Worst case scenario cost Where M equals the monthly cost and MOOP is the maximum out of pocket amount. So, if a plan costs $500 a month and the maximum out of pocket amount is $12,000 - which in a worst case scenario you would pay (it's almost always over the deductible) ... ($500 x 12) + 12,000 = $18,000 Most people look at the deductible, but be aware this is incorrect in a worst case. The last one (maximum out of pocket) really hurts most people because they overlook it: Deductible vs. out-of-pocket maximum The difference between your deductible and an out-of-pocket maximum is subtle but important. The out-of-pocket maximum is typically higher than your deductible to account for things like co-pays and co-insurance. For example, if you hit your deductible of $2,500 but continue to go for office visits with a $25 co-pay, you’ll still have to pay that co-pay until you’ve spent your out-of-pocket maximum, at which time your insurance would take over and cover everything. New in 2016: embedded out-of-pocket maximums One change in 2016 is that, even with an aggregate deductible, one person cannot pay more than the individual out-of-pocket maximum within a family plan, even if the aggregate deductible is more than the individual out-of-pocket maximum, which is $6,850 for 2016. For instance, even if the overall aggregate deductible was $10,000, a single person in that family plan could not incur more than $6,850 in out-of-pocket expenses. (In 2017, the out-of-pocket maximum will increase to $7,150.) After they hit that number, insurance covers everything for that person, even as the rest of the family is still subject to the deductible. From your question: Thanks - not sure I totally follow you. My question is, essentially: "Say a typical large employer X gives you 'healthcare' as a benefit on top of your salary. In fact, how much does that cost corporation X each year?" ie, meaning, in the US, about how much does that typically cost a corporation X each year? That's a good question because they may qualify for tax advantages by offering to a number of employees and there may be other benefits if they encourage certain tests (like blood work and they waive the monthly fee). More than likely, using the above equation may be the maximum that they'll pay each year per employee and it might be less depending on the tax qualifications. You can read this answer of the question and it appears they are paying within the range of these premiums listed above this. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: For the person being hired this is a tricky situation. Specially with the new laws. There is no real magic number that can be applied as a lot will depend on what benefits you want, and what is actually available. This will really shift the spectrum quite a bit. Under the affordibal care act, everyone has to have insurance or pay a ?fine? (were really not sure what to call this yet) but there are two provisions that really mess with the numbers you look at as an employee. First, the cost of heath care has skyrocketed. So the same benefits that you had 5 years ago now cost maybe 10-15 times as much as they used to. This gets swept under the rug a bit because the "main costs" of insurance has only increased a tiny amount. What this actually comes down to is does your new ACA approved heath plan cover exactly the benefits you need, or does it cut corners. Sorry this is complicated, and I don't mean it to come off as a speech against the ACA so I will give an example. My wife has RA, she really has it under control with the help of her RA doctor. This is not something she ever wants to change. Because she has had RA from the age of 15, and because it's degenerative, she doesn't want to spend 5 years working with a new doctor to get to the same place she is with her current doctor. In addition, the main drugs she takes for RA are not covered under any ACA plan, nor are the "substitutions" that her doctor makes (we are trying to have kids so she has to be off the main meds, and a couple of the things this doctor has tried has been meds that reduce inflammation, are pregnancy safe, but are not for the treatment of RA) You now have to take into effect rather the cost of health insurance + the cost of the things now not covered by the heath insurance + the out of pocket expenses is worth the insurance. Second the ACA has set up provisions to straight up trick those people that have lower income and are not paying close attention. When shopping for insurance, they get quotes like "$50 a month" or "$100 a month". The truth is that the remainder of the actual cost is deducted from their tax returns. This takes consideration, because if you thing your paying $50 a month for insurance but your really paying $650 then you need to make sure your doing your math right. Finally, you need to understand how messed up things are right now in the US with heath care. Largely this goes unreported. I'm not really sure why. But in order to do this I will have to give examples. For my wife to see a specialist (her RA doctor) the co-pay is $75. So she goes to the doctor, he charges her $75 and bills the insurance $200. The insurance pays the doctor $50. With out insurance, the visit costs $50. At first you want to blame the doctor for cheating the system, but the doctor has to pay for hours of labor to get the $50 back from the insurance company. From the doctors perspective it's cheaper to take the $50 then it is to charge the insurance company. And by charging the insurance company he has no control over the cost of the co pay. He essentially has to charge more to make the same money and the patient gets the shaft in the process. Another example, I got strep throat last year. I went to the walk in clinic, paid $75, saw the doctor got my Z-Pack for $15, went home crawled in bed and got better. My wife (who still had separate insurance from before the marriage) got strep throat (imagen that) went to the same clinic, they charged her $200 for the visit ($50 co-pay) and $250 for the z-pack ($3 co-pay). The insurance paid the clinic $90 for the visit and $3 for the drugs. Again the patient is left out in this scenario. In this case it worked better for my wife, unless you account for the fact that to get that coverage she had to pay $650/month. My point is that when comparing costs of heathcare with insurance, and without out insurance, its often times much cheaper for the practices to have you self pay then it is for them to go through the loops of trying to insurance to make them whole. This creates two rates. Self pay rates and Insured rates. When your trying to figure out the cost of not having insurance then you need to use the self pay rates. These can be vastly different. So as an employee you need to figure out your cost of heath care with insurance, and your cost of heath care without insurance. Then user those numbers when your trying to negotiate a salary. The problem is that there is no magic number to use for this because the cost will very a lot. For us, it was cheaper to not have insurance. Even with a pre-existing condition that takes constant attention, it's just better if we set aside $500 a month then it is to try to pay $750 a month. That might not hold true for everyone. For some people or conditions it may be better to pay the $750 then to try to handle it themselves. So for my negotiations I would go with x+$6,000 without insurance or x+$4,500 with insurance. Now as an employer it's a lot simpler. Usually you have a "group plan" that offers you a pretty straight $x per year per person or $y per year per family. So you can offer exactly that. Salary - $x or Salary - $y. AS a starting point. However this is where negotiations start. If your offering me $50,500 and insurance, I would rather just have $57,000 and no insurance. Of course your real cost is only $55,000 cause you don't care about my heath care costs only about insurance costs. So you try to negotiate down towards $55,000 and no insurance. But that's not good enough for me. So I either go else where and you loose talent, or I accept $50,500 and insurance (or somewhere in between). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: You could probably see prices at one of the Obamacare websites. I'm on Obamacare in Massachusetts, and the premiums for me ranged from about $300-600 per month. For a couple, you just multiply by two (couples don't get any discounts over single people). So for a couple, the cost is about $600-$1200 per month. I never looked at family prices because I don't have kids, but I think the family plans are not that much more than the plans for a couple. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: Many answers here have given what look to be useful perspectives on your question. I want to point out an interesting technical issue. If an employer contracts with an insurer, it agrees to cover all employees (or all that fill some pre-specified definition and no one else), and to offer only a limited range of options. If you buy insurance directly, you obviously have a huge range of choices, including the (technically illegal) one of no insurance at all. Your first thought is probably, "Hey, that's great! More options, more chances to pick the plan that's right for me." Sorry, no. Yes, you have more options, but so does everyone else. If you are working for some large company, you get insurance, period. If you suspect you have an expensive health condition, you cannot buy more insurance; if you believe yourself to be healthy as a horse, you cannot get skimpier insurance and pocket the difference. Healthy people and sick people are all in the same predictable pool. If you buy insurance freely, the insurer knows that the sicker you are, the more likely you are buy insurance, a phenomenon called adverse selection. As a result, the premiums (fees) a person buying his own insurance pays are much higher, because most of his fellow policy-holders are sickly -- even if he himself is just risk-averse. On the other hand, if you are risk-neutral, if you can survive a $10,000 bill if it happens to arise, you can save big by finding the skimpiest imaginable insurance, where all your fellow policy-holders will be hale and healthy people like yourself. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: There is some magic involved in that calculation, because what health insurance is worth to you is not necessarily the same it is worth for the employer. Two examples that illustrate the extreme ends of the spectrum: let's say you or a family member have a chronic or a serious illness, especially if it is a preexisting condition - for instance, cancer. In that case, health insurance can be worth literally millions of dollars to you. Even if you are a diabetic, the value of health insurance can be substantial. Sometimes, it could even make financial sense in that case to accept a very low-paying job. On the other extreme of the scale, if you are very young and healthy, many people decide to forego insurance. In that case, the value of health insurance can be as little as the penalty (usually, 2% of your taxable income, I believe). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ballpark salary equivalent today of “healthcare benefits” in the US? ### Answer: Healthcare for the employee is more valuable to the employer than is providing healthcare for the rest of the family members. Depending on the family situation, you're going to see significant differences in price between out of pocket costs for insurance of just the employee, vs cost for insuring the entire family. This is because in the first instance the insurance is more subsidized by the company (as a percentage of the total cost). The costs to the company for insuring just the individual (mid-career) are in the neighborhood of $5000 per year. If this is all that's being negotiated (single person coverage) then I would use that amount as a baseline. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to get a grip on finance? ### Answer: I think this question is perfectly on topic, and probably has been asked and answered many times. However, I cannot help myself. Here are some basics however: Personal Finance is not only about math. As a guy who "took vector calculus just for fun", I have learned that superior math skills do not translate into superior net worth. Personal finance is about 50% behavior. Take a look at the housing crisis, car loans, or payday lenders and you will understand that the desire to be accepted by others often trumps the math surrounding a transaction. Outline your goals What is it that you want in life? A pile of money or to retire early? What does your business look like? How much cash will you need? Do you want to own a ton of rental properties? How does all this happen (set intermediate goals). Then get on a budget A budget is a plan to spend your money in advance. Stick to it. From there you can see how much money you have to implement various goals. Are your goals to aggressive? This is really important as people have a tendency to spend more money then they have. Often times when people receive a bonus at work, they spend that one bonus on two or three times over. A budget will prevent this from happening. Get an Emergency Fund Without an emergency fund, you be subject to the financial whims of people involved in your own life and that of the broader marketplace. Once you have one, you are free to invest with impunity and have less stress in a world that deals out plenty. Bad things will happen to you financially, protect against them. The best first investments are simple: Invest in yourself. Find a way to make a very healthy income with upward mobility. Also get out and stay out of debt. These things are not sexy, but they pay off in the long run. The next best investment is also simple: Index funds. These become the bench mark for all other investments. If you do not stand a good chance of beating the S&P 500 index fund, why bother? Just dump the money in the fund and sleep well at night. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Hired with W-9, will I owe estimated tax quarterly? ### Answer: You must pay your taxes at the quarterly intervals. For most people the withholding done by their employer satisfies this requirement. However, if your income does not have any withholding (or sufficient), then you must file quarterly estimated tax payments. Note that if you have a second job that does withhold, then you can adjust your W4 to request further withholding there and possibly reduce the need for estimated payments. Estimated tax payments also come into play with large investment earnings. The amount that you need to prepay the IRS is impacted by the safe harbor rule, which I am sure others will provide the exact details on. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How should one refuse to father in law (Chinese) when he wants to borrow money? ### Answer: In these situations, one solution is to use the "I was just about to ask you the same thing..." response. This is kind of a famous way to deal with people asking you for money, whether it's someone asking to borrow "$10 at lunch time" or "$3000 for a car" or the like. So: Person X asks you for money, say $2000. Your reply: Ah, that's bad luck, I was just about to ask you the same thing... Follow this immediately - just keep talking - by launching in to a really incredibly detailed discussion of why you need to borrow money (pick a slightly larger amount, slet's ay $3500). Just "keep talking" and don't let the other person get a word in. Go in to great detail about just what you need the $3500 for and why. It's a good trick. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Combined annual contribution limits for individuals [duplicate] ### Answer: You're correct about the 401(k). Your employer's contributions don't count toward the $18k limit. You're incorrect about the IRAs though. You can contribute a maximum of $5500 total across IRA and Roth IRA, not $5500 to each. There are also limits once you reach higher levels of income. from IRS.gov: Retirement Topics - IRA Contribution Limits: For 2015, 2016, and 2017, your total contributions to all of your traditional and Roth IRAs cannot be more than: ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Combined annual contribution limits for individuals [duplicate] ### Answer: Your contribution limit to a 401(k) is $18,000. Your employer is allowed to contribute to your 401(k), usually a "matching contribution". That matching contribution comes from your employer, so is not subject to your personal contribution limit. A contribution to a regular 401(k) is typically made with pre-tax money (i.e. you don't pay payroll taxes on the money you contribute) so you pay less taxes for the current tax year. However when you retire and you take money out, you pay taxes on the money you take out. On one hand, your tax rate may be lower when you have retired, but on the other hand, if your investments have appreciated over time, the total amount of tax you pay would be higher. If your company offers a Roth 401(k) plan, you can contribute $18,000 of after tax money. This way you pay the tax on the $18,000 today, as you would if you did not put the money in the 401(k), but when you take the money out at retirement, you would not have to pay tax. In my opinion, that serves as a way to pay effectively more money into your 401(k). Some firms put vesting provisions on the amount that they match in your 401(k), e.g. 4 years at 25% per year. So you have to work 1 full year to be entitled to 25% of their matching contribution, 2 years for 50%, and 4 years to receive all of it. Check your company's Summary Plan Description of the 401(k) to be sure. You are not allowed to invest pre-tax money into a Traditional IRA if you are already contributing to a 401(k) plan and have reached the income limits ($62,000 AGI for single head of household). You are allowed to contribute post-tax money to a Traditional IRA plan if you have already contributed to a 401(k), which you can then Roll-over into a Roth IRA (look up 'backdoor IRA'). The IRA contribution limit applies to all IRA accounts over that calendar year. You could put some money in a traditional IRA, a Roth IRA, another traditional IRA, etc. so long as the total amount is not more than the contribution limit. This gives you an upper limit of 5.5k + 18k = 23.5 investments in retirement accounts. Note however, once you reach age 50, these limits increase to 6.5k (IRA) + 24k (401(k)). They also are adjusted periodically with the rate of inflation. The following approach may be more efficient for building wealth: This ordering is the subject of debate and people have different opinions. There is a separate discussion of these priorities here: Best way to start investing, for a young person just starting their career? Note however, a 401(k) loan becomes payable if you leave your company, and if not repaid, is an unauthorised distribution from your 401k (and therefore subject to an additional 10% tax penalty). You should also be careful putting money into an IRA, as you will be subject to an additional 10% tax penalty if you take out the money (distribution) before retirement, unless one of the exceptions defined by the IRA applies (e.g. $10,000 for first time home purchase), which could wipe out more than any gains you made by putting it in there in the first place. Your specific circumstances may vary, so this approach may not be best for you. A registered financial advisor may be able to help - ensure they are legitimate: https://adviserinfo.sec.gov ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are residential investment properties owned by non-professional investors and not large corporations? ### Answer: Because the returns are not good. One of the big drivers in Australia is "negative gearing": if your investment loses money you can offset losses against your tax on other income. Institutional investors and corporations are in the business of making money: not losing it. Housing market investors are betting that these year to year revenue losses will ultimately be made up in a big capital gain: for which individuals get a huge tax break that is also not available to corporations. Capital gains are not guaranteed. Australia has benefited from 25+ years of economic, employment and wages growth: a result of good government planning, strong corporate governance and a fair slice of luck. If this were to end housing prices would plateau at best and crash at worst. A person who has negative cash flow investments has to sell them urgently if they lose their job. A glut of mortgagee sales and property prices could easily come off 20-30%. Rental yields on residential property in Sydney are about 4% with a capital gain of currently 10% but this has been flat or negative within the last 5 years and no doubt will be again within the next 5. Rental yields for residential property are constrained by mortgage rates: if it significantly cheaper to buy then to rent, why would anyone rent? In contrast, industrial and commercial property gets a yield of about 7% and gets exactly the same capital gain. This is because land is land and if the price of industrial land doesn't grow at the same rate as the residential land next door eventually one will be converted into the other. Retail rentals are even higher. In addition commercial tenants are responsible for more outgoings and have fewer legal rights than residential tenants. Further, individual residential properties are horribly illiquid and have large transaction costs. While it is possible to bundle them up into property trusts so that units can be sold on the stock exchange it is far more common to do this with office and retail buildings. This is what companies like Westfield and AMP Capital do. Notwithstanding, heavily geared property trusts can get into deep water because of the illiquid nature of property as the failure of Centro illustrates. That said, there are plenty of companies that develop residential houses and units for sale to owner occupiers or investors because that's where the money is. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are residential investment properties owned by non-professional investors and not large corporations? ### Answer: Your experience is anecdotal (outside Australia things are different). There are many companies and real estate investment trusts (REITs) that own residential properties (as well as commercial in many cases to have a balanced portfolio). They are probably more common in higher-density housing like condos, apartment buildings, flats, or whatever you like to call them, but they are certainly part of the market for single family units in the suburbs as well. What follows is all my own opinion. I have managed and rented a couple of properties that I had lived in but wasn't ready to sell yet when I moved out. In most cases, I wish I would have sold sooner, rather than renting them out. I think that there are easier/less risky ways to get a good return on your money. Sometimes the market isn't robust enough to quickly sell when it's time to move, and some people like the flexibility of having a property that a child could occupy instead of moving back in at home. I understand those points of view even if I disagree with them. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are residential investment properties owned by non-professional investors and not large corporations? ### Answer: Economy of scale on one side versus "person monetizing an illliquid asset" on the other. Most multifamily rental buildings are owned by professional real estate investors (as well as individuals growing an empire to become a professional real estate investor whom I will count in this group). The rental difference between a 2000 Sq foot two bedroom apartment and 2000 Sq foot two bedroom standalone house is not large. The construction cost per square foot for a standalone house is higher than for a multifamily building (of similar height and materials). Maintenance calls, landscaping, and new roofs, dealing with permits and inspections, etc are much more efficient with multifamily properties. On the supply side, most single family rentals tend to be the nonprofessional single property owner because they happen to already own the place, and for one reason or another a. Don't want to sell and b. Want to gain cash flow on the asset. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are residential investment properties owned by non-professional investors and not large corporations? ### Answer: As other answers have pointed out, professional real estate investors do own residential investment properties. However, small residential units typically are not owned by professional real estate investors as your experience confirms. This has a fairly natural cause. The size of the investment opportunity is insufficient to warrant the proper research/due diligence to which a large investment firm would have to commit if it wanted to properly assess the potential of a property. For a small real estate fund managing, say, $50 MM, it would take 100 properties at a $500K valuation in order to fully invest the funds. This number grows quickly as we decrease the average valuation to reflect even smaller individual units. Analogously, it is unlikely that you will find large institutional investors buying stocks with market caps of $20 MM. They simply cannot invest a large enough portion of total AUM to make the diligence make economic sense. As such, institutional real estate money tends to find its way into large multi-family units that provide a more convenient purchase size for a fund. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are residential investment properties owned by non-professional investors and not large corporations? ### Answer: None of the previous answers calls out an important factor to residential property ownership bias towards individual investors. The amount of time spent managing (leasing, maintenance and rent collection) on single properties is much higher, per property, than larger investments. But what is mentioned in passing is the bias towards smaller investments. Fewer individuals have the capital to purchase and engage in the leasing of multi-tenant properties, but they are more likely to have the funds for smaller investments. So the smaller investor can both afford the entry costs, and the time investment, while the larger corporate entities benefit from the opposite proposition. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offered a job: Should I go as consultant / independent contractor, or employee? ### Answer: 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: ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offered a job: Should I go as consultant / independent contractor, or employee? ### Answer: To be honest I don't know how any of this work in the US so my answer will be of very limited value to yourself, I suspect, but when it comes to the UK if you're going to get the same pay gross either way than being independent makes very little sense. Running your own business is hassle, is generally more risky (although possibly not in your case) and costs money. Some of the most obvious costs are the added NI, probably the need for an accountant, at around £1200 p/a for basic accountancy service, you are obliged by law to have liability insurance and you probably want professional indemnity insurance, this will be around £600 p/a minmum, and so on and so forth. On top of that, oficially anyway, as a contractor, you really shouldn't be getting any benefits from the client, and so health insurance, company car, even parking are all meant to be arranged by, and paid by, your company, and can't (or rather - shouldn't) be charged to the client. So - I would say - if you're seriously thinking about setting up a consultancy company, and this client is first of many - set up a company, but take into account the sums you need to earn. If you're really thinking about employment - be an employee. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offered a job: Should I go as consultant / independent contractor, or employee? ### Answer: Linkedlinked, You might want to seriously take another look at the links that Chris provided you. Specifically the ones on the IRS website: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html From the IRS website: Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination. Perhaps more importantly... pay attention to what happens if you're WRONG: Consequences of Treating an Employee as an Independent Contractor If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information. I would STRONGLY recommend that you and your partners give your accountant a call and discuss the matter. They will be able to help you make the right decision. One of biggest mistakes businesses make in this are is to classify their employees as independent contractors. The IRS (who happens to be hungry for money right now) comes in and says, "Nooooooooo... those are employees." ...and the COMPANY gets to pay the employment taxes. I actually have person experience with this as I worked for a company this happened to. Every contractor was re-classified as an employee except for two (myself and one other). The key reason in that case was that none of the other contractors had any other clients. While I understand that you have other clients, I would still recommend talking to your accountant for an hour or so... just to be 100% sure. Sincerely, Andrew Smith TaxQueries.com ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offered a job: Should I go as consultant / independent contractor, or employee? ### Answer: I think it really depends on what work/lifestyle you are looking for. I'm sure your more than capable of going down either route, but you should weigh up the pros and cons of each A consultant would be great, you'd be your own boss and you have overall say on how your business/career plans out, but be prepared to put in a hell of a lot of work to get it off the ground. Long hours, little time for social/family etc. But in the long run it'll pay off Employee, no worries about running your company, just turn up and perform your duties. You'll get the whole benefit package: healthcare/pension etc. You can probably go on expense paid training courses etc It depends, do you want to just be an employee working "for the man" or do you want to be "the man"? I wish you luck in whatever you do! :D ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What happens when a non-U.S. citizen who's been making money from the U.S. moves to the U.S.? ### Answer: Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do you declare an interest free loan? ### Answer: In principle, the US taxes both income and gifts. Simply thinking good thoughts is not necessarily sufficient to avoid filing or payment obligations. Giving somebody money with no repayment date, no interest, and no enforceable note looks an awful lot like either income or a gift. A loan normally has interest, money sitting in a savings account is insured, and other investments generally have an expected return. Why would somebody give a loan with no interest, with only flexible or informal payment expectations, in a way where it has neither deposit insurance nor any expectation of net returns? That looks a lot like a gift - at the very least, a gift of the time value and the default risk. The IRS definitely polices loan rates. The latest release is Revenue Ruling 2014-13. The AFR is useful for tax concepts such as Original Issue Discount (when issuers sell low-interest or no-interest bonds or loans at less than face value, attempting to recharacterize interest income as return of principal), various grantor trusts (e.g. GRATs), and so forth. It's a simple way for the IRS to link to market rates of interest. Documentation and sufficient interest, as well as clear payment schedule (and maybe call or demand rights) make it a bona fide loan. There is no real way for the IRS to distinguish between an informal arrangement and a post-hoc lie to conceal a gift. Moreover, an undocumented loan is generally difficult to enforce, so it looks less like a true loan. The lender declares the interest payments as income on his Form 1040, line 8a and if necessary Schedule B. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do you declare an interest free loan? ### Answer: I am neither a lawyer nor a tax accountant, and if you're dealing with serious money I suggest you consult a professional. But my understanding is: If you make a loan at zero interest or at below-market rates, the IRS will consider the difference between the interest that you do charge and the market rate to be a gift. That is, if someone could get a loan from a bank and he'd pay $1000 in interest for the year, but instead you loan him the money as a friend interest free, than as far as the IRS is concerned you have given him a $1000 gift, and you could potentially have to pay gift tax. Or they might "impute" the interest to you and tax you on $1000 of additional income. If you have no agreement on repayment terms, if it's all, "Hey Joe, just pay me back when you can", then the IRS is likely to consider the entire "loan" to be a gift. There's an annual exclusion on gifts -- I think it's now $13,000 -- so if you loan your buddy fifty bucks to tide him over until next pay day, the IRS isn't going to get involved in that. They're worried about more serious money. And yes, the IRS does "police loan rates". The IRS examines exact numbers for all sorts of things. If, say, you go on a 100-mile overnight business trip, and the company gives you $10,000 for travel expenses, the IRS is likely to say that this is not a tax-deductible travel expense at all but a sham to hide part of your salary from taxes. Or if you donate a pair of old socks to charity and declare a $500 charitable contribution deduction, the IRS will say that that is not a realistic value for a pair of old socks and disallow the deduction. Etc. A small discrepancy from market rates can be justified for any number of reasons. If the book value of a used car is $5000 and you sell it to your neighbor for $4900, the IRS is unlikely to question it, there are any number of legitimate business reasons why you had to give a discount to make the sale. But if you sell it to him for $50, they may declare that this is not a sale but a gift. Etc. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Avoiding sin stock: does it make a difference? ### Answer: Yes, it does matter. You are right that lower demand for a stock will drive its price down. Lower stock prices can hurt the company. Take a look at Fixee's answer to this question: a declining share price will make it hard to secure credit, attract further investors, build partnerships, etc. Also, employees are often holding options or in a stock purchase plan, so a declining share price can severely dampen morale. In an extreme case, if share prices plummet too far, the company can be pressured to reverse-split the shares, and (eventually) take the company private. This recently happened to Playboy. If you do not want to support a company, for whatever reason, then it is wise to avoid their stock. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Avoiding sin stock: does it make a difference? ### Answer: This question drives at what value a shareholder actually provides to a corporation, and by extent, to the economy. If you subscribe for new shares (like in an Initial Public Offering), it is very straightforward to say "I have provided capital to the corporation, which it is using to advance its business." If you buy shares that already exist (like in a typical share purchase on a public exchange), your money doesn't go to the company. Instead, it goes to someone who paid someone who paid someone who paid someone (etc.) who originally contributed money to the corporation. In theory, the value of a share price does not directly impact the operation of the company itself, apart from what @DanielCarson aptly noted (employee stock options are affected by share price, impacting morale, etc.). This is because in theory, the true value of a company (and thus, the value of a share) is the present value of all future cashflows (dividends + final liquidation). This means that in a technical sense, a company's share price should result from the company's value. The company's true value does not result from the share price. But what you are doing as a shareholder is impacting the liquidity available to other potential investors (also as mentioned by @DanielCarson, in reference to the desirability for future financing). The more people who invest their money in the stock market, the more liquid those stocks become. This is the true value you add to the economy by investing in stocks - you add liquidity to the market, decreasing the risk of capital investment generally. The fewer people there are who are willing to invest in a particular company, the harder it is for an investor to buy or sell shares at will. If it is difficult to sell shares in a company, the risk of holding shares in that company is higher, because you can't "cash out" as easily. This increased risk then does change the value of the shares - because even though the corporation's internal value is the same, the projected cashflows of the shares themselves now has a question mark around the ability to sell when desired. Whether this actually has an impact on anything depends on how many people join you in your declaration of ethical investing. Like many other forms of social activism, success relies on joint effort. This goes beyond the direct and indirect impacts mentioned above; if 'ethical investing' becomes more pronounced, it may begin to stigmatize the target companies (fewer people wanting to work for 'blacklist' corporations, fewer people buying their products, etc.). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Save money in company for next year ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are stock indexed funds and how do they lower taxes? ### Answer: who computes the S&P 500? Standard and Poor's. Why are they sharing this information and Because that's what they do. This is a financial research company. how do they recuperate the costs inherent in computing the S&P 500? By charging clients for other information. The computing of the index itself is not all that complicated, its coming up with the index that's a problem. Once they've come up with the formula, and it became widely accepted, the computation itself is not an issue. But the fact that its so popular leads to the S&P brand recognition, and people come and pay good money for their other services (ratings and financial analysis of securities). They do more work for free. For example, the ratings of various government debts are being done by S&P for free (governments don't pay for that), while private bonds are rated for a fee (corporations pay to have their bonds rated). Also, as noted by JBKing, there are probably some licensing fees for using the index name in the fund name (and other users are probably paying the licensing fee, like the news agencies and the exchanges). S&P500 is a registered trademark, and as such cannot be used without the owner's permission. Why is then "active management" not required for indexed funds Because no research and stock picking is required. In fact, these funds don't really require a manager, they can be managed by a simple script. and how does it lower taxes? (perhaps this could be a different question if this has become too broad) Actively managed funds perform a lot more buy/sell operations, each leading to tax consequences to the fund (which rolls them over to the investors). Index funds only buy and sell to re-balance back to the index (or when the makeup of the index changes, usually once a year or half a year), leading to much lesser realized capital gains to the fund, thus much lesser tax consequences. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Canadian in California - filing taxes as a non-resident ### Answer: What do you mean by "Canadian income"? Was it income paid to you as wages for the job you did in the US? Or rental/interest income in Canada? If the former - then it doesn't go to NEC, it goes to the main part of the return. If the latter - it doesn't appear on your NR return at all. Yes, it is to validate your residency status. It has no other effect on your taxes. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Schedule C: where to deduct service fees on income? ### Answer: Putting them on line 10 is best suited for your situation. According to Quickbooks: Commissions and Fees (Line 10) Commissions/fees paid to nonemployees to generate revenue (e.g. agent fees). It seems like this website you are using falls under the term "nonemployees". ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Recourse with Credit Card company after victimized by fraud? ### Answer: Concealing parts of a document in order to obtain a signature is illegal. The company committed signature forgery because they effectively modified the document after you signed it (i.e. unfolded the parts that were previously folded). I suggest that you go to your local police department to file a report, citing "signature forgery". Once you have the police report, call your bank's fraud department (not the general billing dispute line) and cite the police report right away, specifically calling out "signature forgery". I would be surprised if you don't get a favorable outcome. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Recourse with Credit Card company after victimized by fraud? ### Answer: If the business is being investigated by your state's Attorney General's office, then your first call should be to that office. They will be able to help you in a few ways, even if they can't explicitly resolve the situation, and they also would undoubtedly appreciate your information to add to their case as well. First, they may be able to tell you how other victims have had their cases resolved, particularly if any went to court on their own. While they won't be able to provide you with personal information of the other victims unless it is public knowledge (via a court case), the information about how the other victims resolved the cases may be helpful - both to show what to do, and what not to do. Second, they may be able to put you in contact with an attorney who is handling other cases like yours. That may reduce the cost of the attorney (as they'll have already done some of the work), and may mean that the attorney is willing to work with no up front fee on the assumption of winning the case. Third, if there are options for getting your money back without a court case, the AG's office may be able to help provide those as well. If the Attorney General's office is unable to help you, then your best bet is to contact an attorney on your own - look for one who specializes in consumer protection and fraud. This is the purpose attorneys exist for: pursuing your interests against another's. Let them do their job. Do make an effort to find a good, honest attorney; you may find some help on how to do this on law.se if you need it (not actual recommendations, mind you, just help with how you would go about finding one). It sounds like your claim would be above and beyond the level of a small claims court lawsuit, but verify this in your jurisdiction; if small claims court goes up to $10,000, you may be able to pursue it there on your own - but I would still get some help from an attorney, at least finding out what you would need to win. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Recourse with Credit Card company after victimized by fraud? ### Answer: I agree that you shouldn't give up trying to get your money back, but I strongly feel that this is not sufficient. If they are trying to victimize you, they are trying to victimize others. Taking care of getting your own money back should be your top concern, but contacting any Attorneys General and District Attorneys that have jurisdiction should also be a priority to help others--past, present, and future--that might be caught in this scam. Contact them, contact the police, contact the BBB, contact the local media. Shine a light and make the cockroaches pack up and get out of town. "We got you... you have no recourse" should always be met with the response, "I will shut you down." ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Options on the E-mini S&P 500 Futures at the CME: what's the expiry date of the underlying future? ### Answer: I don't see EWQ6 in any of your links, so I can't say for certain, but when you buy an option contract on a future, the option will be for a specific future (and strike). So the page you're looking at may be for options on E-mini S&P 500 futures in general, and when you actually purchase one through your broker, you pick a specific expiry (which will be based on the "prompt" future, meaning the next future that expires after the option) and strike. UPDATE: Based on this page mirror, the option EWQ7 is an option on the ESU7 (SEP 2017) future. The next 3 monthly options use ESZ7 as the underlier, which confirms that they use the next prompt future as the underlier. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When amending a tax return to include a futures loss carry back, are you not allowed to include a Schedule C? ### Answer: Is it true that you cannot amend a tax return to include both a futures loss carry back and a Schedule C at the same time? No, it is not true. You can include all the changes necessary in a single amended return, attaching statement explaining each of the changes. However you're talking about two different kinds of changes. Futures loss carryback is a Sec. 1212 carryback and not a correction of an error. Adding Schedule C would be a correction of an error. I'm guessing your CPA wants to separate the two kinds to avoid the situation where the IRS refuses to accept your correction of an error and by the way also doesn't accept the Sec. 1212 carryback on the same return. Or the CPA just wants to charge you twice for amendments. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If the former owner of my home is still using the address, can it harm me? ### Answer: Give it to your mailman to return to sender. For this kind of material, return service is always requested, and it will let the bank know that they have incorrect address information. If the owner needs the cards, he'll contact the bank, or the bank will contact him to verify the address. Either way, as long as its not in your name, I don't think you should be worried. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If the former owner of my home is still using the address, can it harm me? ### Answer: Don't worry about it. One of the big banks who like to whine a lot about defaulting borrowers is sending credit cards to a former resident of my home. The guy died in the late 90s. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Primary residence converted to a rental property & tax implications ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Primary residence converted to a rental property & tax implications ### Answer: Schedule E is the form you'll use. It lists nearly all deductions you can take for a rental. TurboTax Deluxe will handle it and it includes State Filing. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Administrator vs Broker vs Custodian for a Solo 401(k)? ### Answer: Their paperwork should help you along. Schwab is the broker and custodian, you are the administrator. There's virtually no paperwork after the account is opened, until you hit $250K in value, and then there's one extra IRS form you need to fill out each year. See One-Participant 401(k) Plans for a good IRS description of form 5500. Disclosure - I use the Schwab Solo 401(k) myself, and the only downsides, in my opinion, the don't offer a Roth flavor, and no loans are permitted. Both of these features would offer flexibility. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Faster degree with debt or slower degree with no debt? ### Answer: Basically do some math on the 2 schools. Let's say you know it will take 4 years if you go the cheaper route, at $8k/yr, plus the $300/month, total cost: $46,400. If you (for these purposes) do not have to pay back new loans until school is completed, (and depending on the rate of those loans), you would need approx $6k/yr in loans, plus the same costs ($300/month + $8k/yr to cover the other part of tuition). Let's say the expensive school takes 3 years to complete, which means you're out of pocket $34,800 and in debt an additional $18,000, totaling $52,800. This means that to make the 2nd school worth it (assuming your rates don't kill you, etc) you should have an increased earning potential of at least $6,400/yr after you get your degree. If you can finish in 2 years, your costs are: $23,200 + $12k, and you don't even have to change your earning potential to come out ahead. Other factors to consider are: If you aren't following any of the math, or want to post more information, just comment back to me, and I'll try to explain further. Best of luck! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I want to invest in a U.S.-based company with unquoted stocks, but I am a foreigner. How to do this? ### Answer: The recommendation is not to make the investment. In general, a company does not have to sell their shares to you or allow you to become an investor, because, as you have stated, it is a private company not quoted on the stock market. If everyone were trustworthy, you could buy the tools for $11000 -- so that you own the tools -- and sign a lease of the tools to the company whereby they pay you $X/month. The lease should be reviewed by a lawyer before it is signed, and perhaps give the buyer the right to demand back the tools at any time. However, even this arrangement is very risky, because the "company" could simply steal or damage the tools and disappear. It is not an investment that I would make, because it sounds too good to be true. $2800/mo steady cash flow for $11,000 invested. No, I don't think so. The following information may also be useful, either to you, or future readers: If you still want to make this investment, then you should know that: The offering for sale of shares by companies located in the USA is subject to a wild array of complex laws. This is true in many other countries as well. These laws, called securities laws or regulations, can require certain disclosures, require that investors have a high net worth so that they can afford to lose the money or conduct their own investigations and legal actions, or require that the investors know the company founders personally, and can prohibit or limit resale by the buyer/investor. Promoters who say you can still invest and are ignoring or disobeying the securities laws are being at least negligent, but more likely are dishonest and probably criminal. Even if you trust in the investment, can you trust negligent managers to do a good job executing that investment? What about dishonest managers? What about criminals and thieves? ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I want to invest in a U.S.-based company with unquoted stocks, but I am a foreigner. How to do this? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Appropriate model for deferred costs as a line-of-credit ### Answer: There's no standard formula. You can compare the going rates on the market for unsecured LOCs and take that as the starting anchor. Unsecured lines of credit run in the US at about 8-18%. Your risk should be reflected in the rate, and I see no reason why the rate would change throughout the loan. As to the amount of principal changing? Just chose one of the standard compounding options - daily (most precise, but most tedious to calculate), monthly average balance, etc. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can I deduct the cost of software and/or computer that I need to do my job? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it normal for brokers to ask whether I am a beginner? ### Answer: Brokers need to assess your level of competency to ensure that they don't allow you to "bite off more than you can chew" and find yourself in a bad situation. Some brokers ask you to rate your skills, others ask you how long you've been trading, it always varies based on broker. I use IB and they gave me a questionairre about a wide range of instruments, my skill level, time spent trading, trades per year, etc. Many brokers will use your self-reported experience to choose what types of instruments you can trade. Some will only allow you to start with stocks and restrict access to forex, options, futures, etc. until you ask for readiness and, for some brokers, even pass a test of knowledge. Options are very commonly restricted so that you can only go long on an option when you own the underlying stock when you are a "newbie" and scale out from there. Many brokers adopt a four-tiered approach for options where only the most skilled traders can write naked options, as seen here. It's important to note that all of this information is self-reported and you are not legally bound to answer honestly in any way. If, for example, you are well aware of the risks of writing naked options and want to try it despite never trading one before, there is nothing stopping you from saying you've traded options for 10 years and be given the privilege by your broker. Of course, they're just looking out for your best interest, but you are by no means forced into the scheme if you do not wish to be. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it normal for brokers to ask whether I am a beginner? ### Answer: In Canada, for example, they are expected or required to find out. They call it, The “Know Your Client” rule, part of which is knowing your "Investment knowledge and experience". They say it is, "to ensure their advice is suitable for you". I have always been given that kind of form to fill in, when opening an account. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it normal for brokers to ask whether I am a beginner? ### Answer: Yes, this is common and in some cases may be required. They may use it for marketing at some level, but they also use it for risk management in deciding, for example, how much margin to offer and whether to approve access to "riskier" products like stock options. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it normal for brokers to ask whether I am a beginner? ### Answer: In many places there are legal requirements to do so, essentially made to prevent brokers from selling high-risk products as if they were deposits with guaranteed safety of your funds. There also may be prohibitions on offering high-risk/high-return products to beginner customers, e.g. requiring accredited investor status claiming that yes, you really know how this works and are informed of the involved risks or you're not allowed to invest in that product. Making untrue claims of being not a beginner may limit your options if your broker does cheat you in some manner, as it gives them a solid argument that you confirmed that you understand how their pump-and-dump scheme works and are yourself responsible for losing your money to them. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: 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. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: A value of zero or a negative value makes the percent change meaningless. Saying 100% when going from 0 to some other value is simply wrong. I have seen a similar situation several times when looking at a public company with a loss last quarter. On Google Finance or some other service, the PE ratio will be blank, N/A, or something like that. If the company does not currently have earnings, then the PE ratio is meaningless. Likewise, if the company previously did not have earnings, then the percent change of the earnings is meaningless. Also consider the example where the previous value was negative. If the previous value was negative 1 and the current value is positive 99, then this happens: A negative change? But the value went up! Obviously that value does not make sense and should not be shown. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: I'd personally display "n/a" The only other answer that makes sense to me other is "infinity" (phone keyboard doesn't allow me to input the symbol). This would at least allow you to show direction by using positive and negative infinity and mathematical as the the initial value approaches zero the percentage change approaches infinity which is the closet you can get to a meaningful value ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: In general, when dealing with quantities like net income that are not restricted to being positive, "percentage change" is a problematic measure. Even with small positive values it can be difficult to interpret. For example, compare these two companies: Company A: Company B: At a glance, I think most people would come away with the impression that both companies did badly in Y2, but A made a much stronger recovery. The difference between 99.7 and 99.9 looks unimportant compared to the difference between 100,000 and 40,000. But if we translate those to dollars: Company A: Y1 $100m, Y2 $0.1m, Y3 $100.1m Company B: Y1 $100m, Y2 $0.3m, Y3 $120.3m Company B has grown by a net of 20% over two years; Company A by only 1%. If you're lucky enough to know that income will always be positive after Y1 and won't drop too close to zero, then this doesn't matter very much and you can just look at year-on-year growth, leaving Y1 as undefined. If you don't have that guarantee, then you may do better to look for a different and more stable metric, the other answers are correct: Y1 growth should be left blank. If you don't have that guarantee, then it might be time to look for a more robust measure, e.g. change in net income as a percentage of turnover or of company value. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: As has been said before, going from nothing to something is an infinite percent increase! It is not 100%. Maybe you had a dollar and now have $101 that is a 10000% increase! Quite remarkable. I often work with symmetrized percent changes like: spc = 100 * (y2-y1)/(0.5 * (y1+y2)) Where I compute the percent with respect to the average. First this is more stable as often measurements can have noise, the average is more reliable. Second advantage is also that this is symmetric. So going from 95 to 105 is a 10 % increase while going from 105 to 95 a 10% decrease. Of course you need to explain what you show. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: Anyone who has any business looking at growth numbers will know thay are meaningless in the first year, So all they need to know is that it's the first year. It's no different than the Billboard music charts' treatment of the "last week's chart ranking" and "movement up/down" columns. It will help with visual layout if the figure used is about the same size as a percentage number. "New" fits nicely. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: In computing, you'd generally return naa%, for 'not a number'. Could you not put '-%' to show there is no value at this point? Surely the people seeing this aren't idiots and understand the charge on 0 is 0? ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct answer for percent change when the start amount is zero dollars $0? ### Answer: What is the probability of a real occasion (meaning not just an example) being exactly zero? Even if you have 0.1 you can still do the math. Also, it is kind of depending on the occasion. For example, you want to calculate the ROI of an investment for which you had zero capital and you made that investment with leverage, meaning you got a loan. In order to get that loan you should have provided a collateral, so in this case as a starting sum you use the collateral. In another example, say EAT it's difficult to have exactly zero. So, in most cases you won't have to deal with zero values, only positives and negatives. ###end

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