Tag Archive | "Taxes"

Extended Business Tax Returns Due Soon – Are You Ready?

You already filed an application for an extension on your 2012 business taxes. Now, you must file your tax return. But when? It depends on your business type.

Extension Due Dates:

Corporate tax returns were originally due March 15. Extensions are for six months, so the tax return is now due September 16, 2013 (September 15 is a Sunday in 2013).

Partnership tax returns were originally due April 15. Extensions on partnership returns are for five months, so the tax return is now due September 16.

Multiple-member LLCs file taxes as partnerships, and these partnership tax returns are also due on September 16.

Sole proprietors and single-member LLC members filing on Schedule C along with personal tax returns have until October 15 to file extended tax returns.

If you have not started on your tax return:

  • Contact your tax advisor to review your financial situation and possible tax savings
  • Collect documents you will need to file your tax return
    • For corporate tax returns
    • For S corporation tax returns
    • For partnership tax returns
  • Use the correct income tax form for your business type.

Answers to commonly asked questions about Business Tax Return Extensions

Keep up to date with the latest on legal and tax issues affecting your business  – subscribe to my newsletter or Twitter feed or check out my Facebook page.

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Who Would You Pick as Fed Chair?

This fall,  President Obama will pick a new Federal Reserve Chairman. The Current Chair, Ben Bernanke, has already indicated he would like to return to academia when his term expires in January 2014. The two top contenders are current Fed Vice-Chair Janet Yellen and former Treasury Secretary Larry Summers.

Yellen is most likely to follow Bernanke’s policies, being cautious about tapering Quantitative Easing, keeping interest rates relatively low, and focusing more on reducing unemployment. In fact, as a professor at she focusing on measuring true unemployment as her specialty. For this reason, she is more favored by Wall Street and Republicans.

Summers is more concerned about inflation, and has gone on record to say that Quantitative Easing hasn’t really helped the economy. He is an advocate of expansionary fiscal policy. He was the architect of the Economic Stimulus Act in 2009. He is favored by the Obama administration. However, many Democrats in Congress would oppose him on the grounds that he was active in repealing Glass-Steagall, and would therefore be less aggressive in regulating banks.

How It Affects You

The leader of America’s central bank is the most powerful person in the world. That’s because the Fed’s ability to raise and lower interest rates is more effective than the ability of the President and Congress to change taxes and government spending. Whatever the U.S. does greatly impacts the rest of the world. Therefore, your personal finances will be immediately impacted as soon as Obama makes his selection.

What will happen? If Yellen is appointed, not much will change. She will continue Bernanke’s policies, and even has his same calm demeanor. If Summers is appointed, then expect a long battle in Congress as his many critics oppose him. It will also create some turmoil in the financial markets, as investors fret over whether he will cut QE too fast, or allow interest rates to rise too soon.

Related Reading

  • How Are Interest Rates Determined?
  • A Quick Guide to the Federal Reserve
  • How Does the Fed Control Inflation?

Connect with: NEWSLETTER | E-COURSE | TWITTER | GOOGLE PLUS | FACEBOOK

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Lift the Debt Ceiling or Cut Spending?

A reader asks:

Economists, such as Paul Krugman, argue the US Government and Federal Reserve should initiate further stimulus, acquiring more debt / widening the monetary base, to bring the economy out of a recession. His argument is that whilst there is a long-term debt problem, unemployment is affecting people’s lives and stagnating the economic recovery now and therefore this issue takes priority over the debt problem. Of course, this would be a viable solution under Keynesian thinking; bolstered by the US being the reserve currency and showing signs of a recovery (even if the economic data is manipulated) which is much better than the U.K. or Europe which have implemented austerity. My question is: if the US continue to “lift” the debt ceiling and provide expansionary monetary policy this will:

  1. Weaken the dollar’s strength as a reserve currency.
  2. Decrease the image of US as a safe haven for foreign investors (pushing up interest rates).
  3. Perhaps bring the economy to a speedier recovery.
  4. Perhaps lead to too much inflation (which could be delayed) “Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.” – last FOMC STATEMENT JULY 2013.

If the US decide to increase taxes (implement restrictive fiscal policies) to combat the debt problem and baby boomer issue and the Federal Reserve taper drastically or remove stimulus this will:

  1. Send bond yields higher; again raising the value of debt owed (decreasing the US’s image as a safe haven).
  2. Dampen the economic recovery making the ability to pay off the debt harder as GDP decreases and surplus cash used by US  to pay their debt will also decrease.
  3. Again weaken the US currency (because of a lack of confidence from investors).
  4. Strengthen the dollar as other countries eg. Japan seek to weaken their own currency – weakening trade.
  5. Lead to more deflation  (James Bullard [FOMC] wary of low inflation & wants to continue bond buying).
  6. OR cause stagflation as producers decide to go to developing countries where disposable income is higher and the price of goods is rising (using the law of supply; lower price = lower ambition to supply) ; lack of supply will then increase prices (stagflation).

Which is the better option?

Option 1 is the best until GDP growth is solidly in the 2-3% ideal growth range. Once growth goes to 4%, then option 2 is best.

It all depends on which phase of the business cycle you’re in. Right now, the U.S. is still struggling to shake off the remnants of the Great Recession. Unemployment must be reduced to spur more consumer spending and demand. Weaker U.S. currency can help spur exports, and attract foreign investors. Once growth reaches the “Peak” phase of the business cycle, then raise taxes and interest rates, and cut spending, to tone down “irrational exuberance.”

How It Affects You

Before making any financial decision, know where you are in the business cycle. The expansionary phase can last years, and you’re better off if growth is 2-3%, not 4-5%. When GDP growth reaches those high levels, get ready for the recession that’s sure to follow.

The contractionary phase, usually a recession, normally lasts 18 – 24 months. The Great Recession was unusual in that it’s lasted much longer. The official definition of a recession is when GDP growth is negative. However, by then it’s too late to do anything.

You can’t time the market, but you can assess where you are in the business cycle, and take appropriate action. When times are good, pay off debt, sell your house, and save money. When times are bad, you can use these assets to support you if you lose your job. If you’ve saved enough, you can increase your wealth by buying things cheap, like real estate, stocks and loans.

Related Articles

  • Who Owns the U.S. Debt?
  • Watch the Video: What Is the National Debt?
  • Beware the Asset Bubble

Connect with: NEWSLETTER | FACEBOOK | TWITTER | E-COURSE

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Paying Taxes on 1099 Income

A reader asked me what he should do with a 1099-MISC form he had received. I often discuss 1099-MISC and other 1099 forms from the standpoint of the employer, but I realized I had never discussed 1099s from the viewpoint of the receiver, the contract worker.

1099 income is income you receive as a non-employee. If you have received a 1099-MISC form, you worked for someone as a contractor or outside business owner. Yes, you must pay taxes on all of this income, even if you didn’t receive a 1099-MISC form. (Employers don’t need to submit a 1099-MISC if they pay someone less than $600 a year).

Most small businesses report 1099 income on Schedule C of their personal tax returns. The net income from each business is shown on a separate Schedule C form and it’s added to your other employment and other sources of income, for a grand total of taxable income on your tax return.

The reader also asked about withholding on 1099 income. There is no withholding on federal and state income taxes from 1099-MISC forms (except in the case of backup withholding), and there’s no withholding of self-employment tax (Social Security and Medicare tax). But you still must pay these taxes, so it’s a good idea to plan, by making estimated payments or just saving some of your business income.

One last note on 1099 income: You can deduct all legitimate business expenses from this income because taxes are paid on the net income, not gross income. So gather up your business records so you can claim all those business expenses and reduce your business taxes.

More on Starting a Business as an Independent Contractor

More on 1099 Income and Taxes

More on Business income and Employment Income

Keep up to date with the latest on legal and tax issues affecting your business  – subscribe to my newsletter or Twitter feed or check out my Facebook page.

 

 

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Does Obamacare Destroy Full-time Jobs?

A reader asks: “I saw that 90% of new jobs were due to part time jobs. Isn’t that corporations getting ready for Obamacare? That’s not going to help the economy, is it?”

The article in question states, “Since January 2009 the country has added a net total of 270,000 full-time jobs, but it has added 1.9 million part-time jobs, according to the House Ways and Means Committee.” The Republicans on the Committee assume that businesses are adding part-time jobs only to avoid providing health insurance to full-time employees, as mandated by Obamacare.  (Source: Washington Times, Obama Economy: Part-time Jobs Swamp Full-Time Jobs, August 5, 2013)

There are a couple of fallacies with the Committee’s assertion. First, Obamacare wasn’t signed into law until 2010, so the part-time jobs added in 2009 weren’t in reaction to the Affordable Care Act. Second, part-time and temporary jobs are always added during a recession and the early parts of a recovery. That’s because businesses are trying to ramp up production without taking the risk of adding full-time workers.

With or without Obamacare, employers don’t want to add the 40% extra cost of benefits until they’re sure demand is strong. Third, this recovery — especially — has seen a transition to employers hiring part-time, temporary and freelance workers. Employers have found that, overall, this gives them the flexibility to switch production in response to changing demand.

Therefore, there are lots of reasons for the shift to part-time workers. Some of it probably is in reaction to Obamacare, but there are lots of other powerful reasons, too. I noted back in 2009 that this was probably a permanent trend. See Welcome to the Freelance Economy.

As for whether this is good for the economy, it’s good for businesses, but bad for workers. Businesses can respond more quickly, which makes them more competitive with those in foreign countries. As U.S. companies maintain market share, they will be able to hire even more part-time workers.

It’s bad for workers, who have been losing perks for years. (Just try to find a job that offers a pension instead of a 401k plan.) Many workers are finding they have to take two part-time jobs, without benefits, to try and replace the full-time job they lost. Fewer benefits means that disposable income must be spent on health care and insurance instead of new cars and furniture. That’s one reason income inequality continues to worsen in this country.

How It Affects You

Check out these sources to Find Jobs in the Freelance Economy. Most of these position don’t pay well, and of course don’t have benefits, but they do give you the opportunity to try on different types of jobs and different industries to see if you find something better. They can also lead to full-time, better paying positions. For some workers, they could lead to a career change into something they enjoy better.

Second, get familiar with the Obamacare health care exchanges. You’ll be able to compare plans in just six weeks, when they open for business. However, you can get familiar with how they work, the subsidies you might be eligible for, and the essential health benefits that all insurance plans must provide.

Related Articles

  • How Does Obamacare Work?
  • Obamacare Pros and Cons
  • How Obamacare Taxes Affect You

Connect with: NEWSLETTER | E-COURSE | TWITTER | GOOGLE PLUS | FACEBOOK

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

For Those of You Still Wondering Whether Wall Street Is Overpaid…

We’ve known that the consensus layperson answer to this question has been a resounding yes for a while now, but now economists have given hard evidence and analysis that workers at the top of the financial spectrum are in fact overpaid.

Even though the issue seems straightforward on the surface, it’s actually pretty difficult to analyze rigorously, mainly because it’s surprisingly difficult to come up with a precise definition of “overpaid.” The authors of the study take a values-neutral approach to the definition (i.e. they don’t insert their own opinions), and they argue that many high earners are collecting economic “rents” above and beyond the compensation that would get them to continue supplying labor in the market for…well, whatever it is that people on Wall Street do. (for context, the term “economic rents” is generally used to describe monopoly profits or other spoils to those who benefit from market inefficiencies.) This distinction is important from a policy perspective, not only because of how it shapes the public’s opinion on the fairness of taxation but also because it implies that these rent-earners wouldn’t lower their productivity or labor supply in response to a (modest) increase in taxes.

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

LLC or Partnership – Which is Better for Business Startup?

Starting a new business? One of your most important decisions is which business legal type to use. The LLC business form is basically a partnership, for tax purposes, so is there any benefit to an LLC over a partnership? Well, yes. Some points to consider and the major difference:

  • A partnership can be formed simply, without registering with your state. But it’s always a good idea to get an attorney involved to have a partnership agreement. An LLC must be registered with a state, but it’s not a big deal to do that. An LLC also should have an agreement between owners, called an “operating agreement.”
  • Both LLC’s and partnerships are “pass-through” taxing entities, with profits and losses passing to the owners in their personal tax returns.
  • As I mentioned, a multiple-member LLC is taxed as a partnership, but it also has the option to be taxed as a corporation or an S corporation. (A single-member LLC is taxed as a sole proprietorship, filing business taxes on Schedule C on the owner’s personal tax return.)

The biggest difference between an LLC and a partnership is in liability. All partners are liable for debts of their partnership, and each partner is liable for actions of other partners. An LLC, as its name suggests, is a separate entity from its members (owners), and owners are only liable up to the amount of their investment.

The liability difference is significant, and it is one you should discuss with your attorney and your tax advisor when considering which business form to choose.

More details on LLC or Partnership decision

Keep up to date with the latest on legal and tax issues affecting your business  – subscribe to my newsletter or Twitter feed or check out my Facebook page.

 

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Wage Garnishments – What Employers Need to Know

Do you know what to do if you receive a garnishment notice on an employee? I’m not usually so tough on this kind of thing but the consequences for companies that don’t obey the law are pretty serious.

A garnishment is a way to force someone to pay, through payroll deductions. The most common garnishments are for court-ordered judgements like taxes or child support.

Theresa at the Payroll Department reminds business owners about garnishments.

  • You as the employer must garnish wages; you don’t have an option.
  • You don’t have to have the employee’s permission before you begin garnishing wages
  • No one can prevent a garnishment or change the amount.
  • Federal garnishment laws limit the amount of money that can be taken from an employee’s wages.

What happens if an employer fails to comply with a garnishment order?

LegalMatch says that Failure to comply with a garnishment order can result in a fine, or in serious cases, criminal consequences such as a jail sentence. Lack of compliance also includes changing the amount of a garnishment.

Firing an employee illegally for a garnishment can result in a fine up to $1,000 and imprisonment for a maximum of one year for such violations. Following the law and any instructions you receive from the IRS or a state agency regarding garnishment of a specific employee is your best policy.

Answers to common questions on wage garnishments.

Read more about the Consumer Credit Protection Act

 

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Are Sales Tax Holidays Good for Business?

July and August are sales tax holiday season in the state tax world. Kay Bell at Don’t Mess with Taxes reminds us that 12 states have sales tax holidays this weekend.

Sales tax holidays are a period of a few days when consumers can buy specific products in a state without paying state sales taxes. Typical products are school supplies, computers, clothing, disaster preparedness supplies, and energy saving appliances. Retail business get the benefit of advertising for these events but must deal with the issues of figuring out which products get taxes and the limits.

Do these days of no-sales-tax on purchases benefit consumers? businesses? states? The Tax Foundation says sales taxes might be a great marketing gimmick but they do little for any of the stakeholders.

No-sales-tax days might seem to benefit retailers, but they cost companies in increased accounting (some products are not taxed, while others are) and reporting to state tax agencies. Many states hold these holidays during prime back-to-school buying time, when consumers are already planning to buy, so do these marketing gimmicks really attract more buyers? Or do they just force people to buy during one weekend as opposed to another?

The Tax Foundation concludes with this statement: “Despite their political popularity, sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform.”

Check the Tax Foundation article for a complete list of 2013 state sales tax holidays.

Read about How to Prepare Your Business for a State Sales Tax Holiday

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in EconomyComments Off

Teresa Giudice of Real Housewives of New Jersey

‘Real Housewives’ Star Indicted on 39-Counts of Fraud

Teresa Giudice of Real Housewives of New Jersey

The Real Housewives of New Jersey star Teresa Giudice and her husband Giuseppe “Joe” Giudice have been indicted on 39 counts of fraud.

New Jersey’s U.S. Attorney Paul Fishman said in a statement to The Star-Ledger. “Everyone has an obligation to tell the truth when dealing with the courts, paying their taxes and applying for loans or mortgages.”

“That’s reality,” he added, making an obvious reference to Giudice’s role on The Real Housewives of New Jersey. Teresa has starred on the reality show since it launched in 2009. Her brother, Joe Gorga is married to RHONJ cast mate Melissa Gorga.

Teresa also competed on The Celebrity Apprentice Season Five.

The Giudices appeared in federal court Tuesday morning for a hearing and were each released on a $500,000 bond pending their arraignment August 14, 2013.

No word yet how this might impact RHONJ.

Get the full story here.

Photo © Bravo.

Source: About.com


1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...



Posted in TelevisionComments Off

See Fresh News

From Around The World

News By Month

News By Date

August 2017
M T W T F S S
« Sep    
 123456
78910111213
14151617181920
21222324252627
28293031