Tag: Income

How to File Federal Income Taxes for Small Businesses – TurboTax Tax Tips &

#business tax

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How to File Federal Income Taxes for Small Businesses

Depending on your business type, there are different ways to prepare and file your taxes.

When it s time to file a federal income tax return for your small business, there are various ways you can do it, depending on whether you run the business as a sole proprietorship or use a legal entity such as an LLC or corporation.

Each type of entity requires a different tax form on which you report your business income and expenses. Regardless of the form you use, you generally calculate your taxable business income in similar ways.

TurboTax has two products to serve business owners – TurboTax Home Business is designed for sole proprietors and 1099 contractors, while TurboTax Business helps you prepare taxes for corporations, partnerships and LLCs.

Step 1 – Collect your records

Gather all business records. Before filling out any tax form to report your business income, you should have all records in front of you that report your business earnings and expenses.

If you use a computer program or a spreadsheet to organize and keep track of all transactions during the year, calculating your income and deductions is much easier than trying to remember every sale and expenditure that occurred during the year. TurboTax works with programs like QuickBooks and Quicken, so you can import information directly into your tax return.

Step 2 – Find the right form

Determine the correct IRS tax form. You always need to report your business earnings to the IRS and pay tax on them, but choosing the right form to report earnings on depends on how you operate your business.

Many small business owners use a sole proprietorship which allows them to report all of their business income and expenses on a Schedule C attachment to their personal income tax return. If you run the business as an LLC and you are the sole owner, the IRS also allows you to use the Schedule C attachment. However, if you use a corporation or elect to treat your LLC as one, then you must always prepare a separate corporate tax return on Form 1120.

When you use TurboTax Home Business (sole proprietors and contractors) or TurboTax Business (corporations, LLCs and partnerships), you just need to answer simple questions about your business income and expenses, and we ll fill in all the right forms for you.

Step 3 – Fill out your form

Fill out your Schedule C or Form 1120. If you will be reporting your business earnings on Schedule C, you can search the IRS website for a copy or use TurboTax to generate the form for you after you input all of your financial information.

Schedule C is a simple way for filing business taxes since it is only two pages long and lists all the expenses you can claim. When complete, you just subtract your expenses from your business earnings to arrive at you net profit or loss. You then transfer this number to your personal income tax form and include it with all other personal income tax items.

However, if you use a Form 1120, you calculate your taxable business income in the same way, but the form requires more details that may not always apply to a small business. The biggest disadvantage of filing a Form 1120 is that it is separate from your personal income tax return.

Step 4 – Pay attention to deadlines

Be aware of different filing deadlines. When you use a Schedule C, it becomes part of your Form 1040 and therefore, no separate filing deadlines apply. It is generally subject to the same April 15 deadline.

If you need to file a Form 1120, you must file it by the 15th day of the third month following the close of the tax year, which for most taxpayers is March 15. You cannot send this form to the IRS with your personal income tax return.

Remember, when you use TurboTax to prepare your taxes, we ll determine which forms you need and put the information in all the right places. All you need to do is answer simple, plain-English questions.

Business and personal
taxes in one

Just answer simple questions about your business and life, and TurboTax Home & Business takes care of the rest.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

* Important Offer Details and Disclosures

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9 Ideas to Make a Side Income While Growing Your Business #small #business #insurance


#side business ideas

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9 Ideas to Make a Side Income While Growing Your Business

February 18, 2015

Being an entrepreneur is synonymous with being financially unstable at times. While you re growing your company, it s important to be focused. But what if you could get a side hustle that would help bring in a healthy secondary income to alleviate some of that financial stress? And, best case, what if this side hustle could also help you grow your core business?

The good news is that there are a lot of companies that create opportunities for entrepreneurs that don t require full-time work and can become a great companion to the work you re doing. Better yet, they take out the hassle of having to create a second company to supplement your income because they do the legwork and allow you to plug in your skills and time.

Here are nine examples of opportunities that might be the perfect side hustle for you as you continue to grow your company!

1. Invest in real estate.

There are a lot of methods for making money in real estate, many of which don t require your full time effort. Josh Dorkin, CEO and founder of BiggerPockets says you should consider land lording, flipping houses or wholesaling. His company s website will help you manage and understand all of the different state laws and regulations, as well as leverage the largest worldwide network of real estate investors who come to his site to ask questions and help one another.

He also recommends finding people in your area with skill sets and expertise that you don t have, and to partner with them or use them as a place to park your investment cash. You can join BiggerPockets for free and he recommends reading its Ultimate Beginner s Guide . a free eight-chapter book on real estate investing for novices.

2. Drive a taxi.

Most of us are familiar with Uber and Lyft. the companies that took limo and town car services and gave them riders in their down time, and then expanded into recruiting regular citizens to utilize their free time to become taxi drivers. Have you considered being one of them?

I ll never forget one of my UberX rides where the driver told me that he uses his spare time to make money driving as well as to leverage the networking he can do with each of his passengers as he grows his new business — genius!

One of the greatest things about the Uber platform is that it offers economic opportunity for a variety of drivers — full time, part time, teachers in summer, full-time students, military spouses, etc. — in more than 260 cities around the world, says Molly Spaeth, an Uber spokesperson.

So if you re in one of the 260 cities, you could be making your car into a money-generating experience and a networking opportunity on wheels!

3. Host the next-gen of tupperware parties.

There are many companies that do at-home parties and trunk shows where you can utilize the company s products, marketing and operations infrastructure to build a side income by plugging in your network.

One that has proven to be very successful is Stella and Dot. where you become a jewelry consultant and host parties at friend s homes, local boutiques or events. Other popular brands include Rodan + Fields and Pure Romance .

4. Outsource your skills.

Can you do graphic design, data mining, website development, video editing, software development or customer service? Then you can parlay those skills by signing up on sites such as TaskRabbit or ODesk and get hired by their members to do jobs in any of these areas. You can pick and choose how often you want to work and what jobs you take!

5. Be a temp.

Long gone are the days of temp agencies and scouring the Internet for part-time or short-term work. Enter Wonolo. which helps people work now locally.

Wonolo is a company that allows anyone to work for a few hours or a day at real companies doing real work, says AJ Brustein, the company s co-founder. Want to help an ecommerce company fulfilling orders when they are busy, help out at a conference taking tickets, or assist in data entry at a wealth management firm? You can get numerous career experiences around the flexibility of your own schedule.

You can get alerted of jobs available in your area immediately via Wonolo s app. Sounds perfect for a busy entrepreneur!

6. Rent out your pad.

Are you traveling for a business meeting and leaving your home empty? Do you have a spare room or guest house? It s time to put them to work and list them on Airbnb or VRBO and make money on your property when you re not using it!

7. Rent out your car.

If you can get on board with renting out your home, you ll certainly understand the model created by companies such as RelayRides and FlightCar. which allow you to rent out your personal vehicle to their users.

I recently used RelayRides during a trip in San Francisco and had a great experience that didn t require me to find a rental car center, and the cost was right. I even was able to get acquainted with the car s owner, to whom I offered to help find a job.

It s another way to make money and network when you re not using your car (like when you re parked at the airport thanks to FlightCar)!

8. Don t just buy on eBay, sell there.

You can simply sell your own items, or you can make it into a side business.

I run an eBay franchise in which I teach people how to run a re-sale business on eBay, says Garrett Brustein. I do one-on-one training to show them where to get their inventory and how to list and ship items the same way I do so they can emulate the process and take all of the guess work out of the business. They are then able to do this as a part-time job in their free time.

Just think — you can unload the stuff you don t want and go shopping to resell items all in the name of making money!

9. Get paid to network.

I know this one from personal experience! After founding my first company, a credit card processing brokerage, I began to organize networking events in my city to help young professionals interact in an environment where they wouldn t fear getting sold to or hit on. I quickly realized the events were not only helping those in attendance to make valuable connections, but that there was real money to be made, as well.

Over time, I packaged the operations of Network Under 40 to enable entrepreneurs in other markets to bring the events to their cities. By becoming the epicenter of the network, it naturally parlays into building their full-time businesses as well as creates a healthy side income.

If you re looking to make some money on the side and/or find channels through which you can build your primary business, it s time to look into some of these options.


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9 Ideas to Make a Side Income While Growing Your Business #business #careers


#side business ideas

#

9 Ideas to Make a Side Income While Growing Your Business

February 18, 2015

Being an entrepreneur is synonymous with being financially unstable at times. While you re growing your company, it s important to be focused. But what if you could get a side hustle that would help bring in a healthy secondary income to alleviate some of that financial stress? And, best case, what if this side hustle could also help you grow your core business?

The good news is that there are a lot of companies that create opportunities for entrepreneurs that don t require full-time work and can become a great companion to the work you re doing. Better yet, they take out the hassle of having to create a second company to supplement your income because they do the legwork and allow you to plug in your skills and time.

Here are nine examples of opportunities that might be the perfect side hustle for you as you continue to grow your company!

1. Invest in real estate.

There are a lot of methods for making money in real estate, many of which don t require your full time effort. Josh Dorkin, CEO and founder of BiggerPockets says you should consider land lording, flipping houses or wholesaling. His company s website will help you manage and understand all of the different state laws and regulations, as well as leverage the largest worldwide network of real estate investors who come to his site to ask questions and help one another.

He also recommends finding people in your area with skill sets and expertise that you don t have, and to partner with them or use them as a place to park your investment cash. You can join BiggerPockets for free and he recommends reading its Ultimate Beginner s Guide . a free eight-chapter book on real estate investing for novices.

2. Drive a taxi.

Most of us are familiar with Uber and Lyft. the companies that took limo and town car services and gave them riders in their down time, and then expanded into recruiting regular citizens to utilize their free time to become taxi drivers. Have you considered being one of them?

I ll never forget one of my UberX rides where the driver told me that he uses his spare time to make money driving as well as to leverage the networking he can do with each of his passengers as he grows his new business — genius!

One of the greatest things about the Uber platform is that it offers economic opportunity for a variety of drivers — full time, part time, teachers in summer, full-time students, military spouses, etc. — in more than 260 cities around the world, says Molly Spaeth, an Uber spokesperson.

So if you re in one of the 260 cities, you could be making your car into a money-generating experience and a networking opportunity on wheels!

3. Host the next-gen of tupperware parties.

There are many companies that do at-home parties and trunk shows where you can utilize the company s products, marketing and operations infrastructure to build a side income by plugging in your network.

One that has proven to be very successful is Stella and Dot. where you become a jewelry consultant and host parties at friend s homes, local boutiques or events. Other popular brands include Rodan + Fields and Pure Romance .

4. Outsource your skills.

Can you do graphic design, data mining, website development, video editing, software development or customer service? Then you can parlay those skills by signing up on sites such as TaskRabbit or ODesk and get hired by their members to do jobs in any of these areas. You can pick and choose how often you want to work and what jobs you take!

5. Be a temp.

Long gone are the days of temp agencies and scouring the Internet for part-time or short-term work. Enter Wonolo. which helps people work now locally.

Wonolo is a company that allows anyone to work for a few hours or a day at real companies doing real work, says AJ Brustein, the company s co-founder. Want to help an ecommerce company fulfilling orders when they are busy, help out at a conference taking tickets, or assist in data entry at a wealth management firm? You can get numerous career experiences around the flexibility of your own schedule.

You can get alerted of jobs available in your area immediately via Wonolo s app. Sounds perfect for a busy entrepreneur!

6. Rent out your pad.

Are you traveling for a business meeting and leaving your home empty? Do you have a spare room or guest house? It s time to put them to work and list them on Airbnb or VRBO and make money on your property when you re not using it!

7. Rent out your car.

If you can get on board with renting out your home, you ll certainly understand the model created by companies such as RelayRides and FlightCar. which allow you to rent out your personal vehicle to their users.

I recently used RelayRides during a trip in San Francisco and had a great experience that didn t require me to find a rental car center, and the cost was right. I even was able to get acquainted with the car s owner, to whom I offered to help find a job.

It s another way to make money and network when you re not using your car (like when you re parked at the airport thanks to FlightCar)!

8. Don t just buy on eBay, sell there.

You can simply sell your own items, or you can make it into a side business.

I run an eBay franchise in which I teach people how to run a re-sale business on eBay, says Garrett Brustein. I do one-on-one training to show them where to get their inventory and how to list and ship items the same way I do so they can emulate the process and take all of the guess work out of the business. They are then able to do this as a part-time job in their free time.

Just think — you can unload the stuff you don t want and go shopping to resell items all in the name of making money!

9. Get paid to network.

I know this one from personal experience! After founding my first company, a credit card processing brokerage, I began to organize networking events in my city to help young professionals interact in an environment where they wouldn t fear getting sold to or hit on. I quickly realized the events were not only helping those in attendance to make valuable connections, but that there was real money to be made, as well.

Over time, I packaged the operations of Network Under 40 to enable entrepreneurs in other markets to bring the events to their cities. By becoming the epicenter of the network, it naturally parlays into building their full-time businesses as well as creates a healthy side income.

If you re looking to make some money on the side and/or find channels through which you can build your primary business, it s time to look into some of these options.


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Foreign Direct Investment Definition from Financial Times Lexicon #income #investment #definition


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Definition of foreign direct investment

Investment from one country into another (normally by companies rather than governments) that involves establishing operations or acquiring tangible assets, including stakes in other businesses. [1]

The purchase or establishment of income-generating assets in a foreign country that entails the control of the operation or organisation.

FDI is distinguished from portfolio foreign investment (the purchase of one country’s securities by nationals of another country) by the element of control. Standard definitions of control use the internationally agreed 10 per cent threshold of voting shares, but this is a grey area as often a smaller block of shares will give control in widely held companies. Moreover, control of technology, management, even crucial inputs can confer de facto control.

FDI is not just a transfer of ownership as it usually involves the transfer of factors complementary to capital, including management, technology and organisational skills.

Example
Strategically FDI comes in three types:

– Horizontal: where the company carries out the same activities abroad as at home (for example, Toyota assembling cars in both Japan and the UK.

– Vertical: when different stages of activities are added abroad. Forward vertical FDI is where the FDI takes the firm nearer to the market (for example, Toyota acquiring a car distributorship in America) and Backward Vertical FDI is where international integration moves back towards raw materials (for example, Toyota acquiring a tyre manufacturer or a rubber plantation).

– Conglomerate: where an unrelated business is added abroad. This is the most unusual form of FDI as it involves attempting to overcome two barriers simultaneously – entering a foreign country and a new industry. This leads to the analytical solution that internationalisation and diversification are often alternative strategies, not complements.

FDI can take the form of greenfield entry or takeover.

Greenfield entry implies assembling all the elements from scratch as Honda did in the UK, whereas foreign takeover means the acquisition of an existing foreign company – as Tata’s acquisition of Jaguar Land Rover illustrates.

Foreign takeover is often covered by the term ‘mergers and acquisitions’ (M ?>

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Total Return Swap (TRS) #swap, #swaps, #total #return #swap, #trs, #asset #swap, #bond #swap,

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Total Return Swap (TRS)

A Total Return Swap (TRS) is a bilateral financial transaction where the counterparties swap the total return of a single asset or basket of assets in exchange for periodic cash flows, typically a floating rate such as LIBOR +/- a basis point spread and a guarantee against any capital losses. A TRS is similar to a plain vanilla swap except the deal is structured such that the total return (cash flows plus capital appreciation/depreciation) is exchanged, rather than just the cash flows.

A key feature of a TRS is that the parties do not transfer actual ownership of the assets. as occurs in a repo transaction. This allows greater flexibility and reduced up-front capital to execute a valuable trade. This also means Total Return Swaps can be more highly leveraged, making them a favorite of hedge funds.

Total Return Swaps (TRS) are also known as Total Rate of Return Swaps (TROR).

The Total Return Swap market is strictly institutional over the counter (OTC). Market participants include investment banks (Goldman Sachs, JPMorganChase), commercial banks (Bank of America, Sumitomo), mutual funds (Prudential, Merrill Lynch Asset Management), hedge funds, funds of funds, private equity funds, pension funds (CalPers), university endowments (Harvard, University of California), credit card lenders (American Express, MBNA/Bank of America), insurance companies (AIG, State Farm), governments, non-governmental (NGO) organizations (World Bank, Inter-American Development Bank), home loan banks (FHLB, Fannie Mae, Freddie Mac), and the Treasury departments of large multinational corporations (Wal-Mart, British Petroleum). A variety of special purpose vehicles (SPVs) such as CDOs and real estate investment trusts (REITs) also participate in the TRS market.

The TRS market was traditionally between commercial banks where one party (Bank A) had exceeded its balance sheet limits, and the other (Bank B) had balance sheet capacity available. Bank A could shift assets off its balance sheet synthetically and gain additional income with less risk. Bank B could “lease” the assets of Bank A by paying some regular cash flows and offering a guarantee against any capital losses.

In the last 10 years, hedge funds and special purpose vehicles have become a major force in the TRS market. Now the most common use of a TRS is for “leveraged balance sheet arbitrage”, whereby a hedge fund lacking a large balance sheet and seeking leveraged exposure to particular assets pays for that exposure by “leasing” the assets from a major bank, mutual fund, or securities dealer. The hedge fund hopes to generate high asset returns without having to tie up its capital by buying those assets for its own account. The bank, fund, or dealer hopes to generate additional cash flow by charging a spread over and above the market returns it receives from lending or other activities, and receiving a guarantee against depreciation of the assets.

A TRS can be structured on any type of reference asset. including single equities, indexes, leases, oil-backed credit obligations, baskets of corporate bonds, mortgages, municipal bonds, other swaps or derivatives, real property, credit card ABS, residential MBS, CDO notes, investment grade convertible bonds, etc. This makes the range of potential market participants extremely broad.

TRS Transaction Structure

A TRS is made up of two legs, the Return Leg (or Total Return Leg) and the Funding Leg. The reference asset or basket of assets exists on the Return Leg. The cash flow payment stream exists on the Funding Leg.

The Return Leg is generally made up of two components: cash flows and capital appreciation of the reference asset(s). The Funding Leg also has two components: floating coupons based on LIBOR +/- a spread and payments to offset any capital depreciation of the reference asset(s).

Additional legs may be structured to account for reinvestment of returns, interest payments on collateral / haircuts, multi-currency flows, or differing payment schedules. Fees, spreads, principal payments, etc. may be added in a customized structure.

The Return Leg counterparty is called the Total Return Payer, Swap Seller, Buyer of protection, or Beneficiary. Here, we will use the term Total Return Payer or TRP. The TRP (typically a bank, fund, or dealer) has a long position in the reference asset or basket of assets, holding them on its balance sheet. The TRP “buys protection” on these asset returns by agreeing to pay all of the future returns of the reference asset(s) in exchange for a floating stream of payments, usually LIBOR +/- a spread, plus a guaranteed offset of any capital losses incurred by the reference asset(s). The TRP gives up one set of expected future returns (capital appreciation, coupons, fees, dividends, etc.) in exchange for another set of future returns (LIBOR coupons +/- a spread) and capital loss insurance. This allows the TRP to lock in the value of its asset(s) and receive additional income.


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Priszm – s recipe for disaster – Canadian Business – Your Source For Business

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Priszm’s recipe for disaster

John Bitove has eaten six Double Down sandwiches in the past three weeks. I love them, he says of the KFC offering, which consists of bacon and cheese nestled between two pieces of fried chicken. If everyone enjoyed deep-fried fare as much as Bitove, who operates 432 KFC, Taco Bell and Pizza Hut franchises in Canada through the Priszm Income Fund, then perhaps his business wouldn t be in a cash crunch today.

The fund disclosed this month it is not in compliance with one of its debt covenants, and reported there is significant doubt it can repay the $65.6-million loan as required by Dec. 31. Priszm, which franchises from Yum Restaurants International, also can t pay $15 million this year to renew licences and refurbish 75 properties. Around 225 more restaurants are up for renewal through 2013. But with little cash and weak sales, Priszm s future is in question.

Bitove, the Toronto entrepreneur behind new wireless entrant Mobilicity, downplays the situation. The business has strong brands that are profitable, he says. It s just not as profitable as it was. Priszm lost $30.7 million in the past two years, and is in the hole $1.5 million so far this year as same-store sales declined every quarter. Units traded at $11 three years ago, but go for just 30? today. Executive turnover has been high. When you have declining sales, it causes turmoil in any business, because people start pointing fingers, says Bitove, who is in talks with lenders.

KFC restaurants make up the bulk of Priszm s franchises, and the fast-food chain has struggled to adapt to healthier eating trends. Prizsm s structure is causing further woes. Other restaurant trusts, such as A W Revenue Royalties Income Fund, earn money on royalties paid by franchisees, whereas Priszm pays royalties to Yum and shoulders operating costs. Minimum-wage increases have hurt Priszm, as well as marketing spending. The fund used to handle marketing for all Yum brands in Canada, but turned over the duties last year as costs mounted and Yum strengthened its international marketing arm. My biggest regret is that we didn t hand back marketing three or four years ago, Bitove says.

A former Priszm executive who requested anonymity argues the fund also failed to properly upgrade old assets to entice customers, and open new locations in growing markets. Much of the fund s cash went to unitholders in the form of distribution payments, meaning it wasn t able to adequately reinvest in the business. By the time Priszm stopped distributions last year, its ability to pay down debt was already in doubt. They d been paying distributions out a little too long, says the former executive.

The largest individual holder, with 1.2% of the units, is Bitove. (Combined with his voting shares, his Priszm stake is roughly 40%.) He maintains every decision, including when to cease distributions, was made in the best interest of the business. The fund is now working with lenders to refinance (it was already supposed to find a new lender by June 30, but failed to do so), and is considering selling restaurants. Priszm cautioned in its recent earnings report there is no guarantee it can work out agreements on either front. Bitove remains optimistic, however. Businesses go through cycles, he says. Sales will rise again.

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    OCBC – s Q4 net profit down 18%, bad debt charges rise #net #profit,debt,charge,income,lender,life

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    OCBC s Q4 net profit down 18%, bad debt charges rise

    OCBC s Q4 net profit down 18%, bad debt charges rise

    SINGAPORE: Oversea-Chinese Banking Corp (OCBC), Singapore’s second-biggest lender, on Tuesday (Feb 14) reported a bigger-than-expected 18 per cent drop in quarterly net profit, weighed down by a 57 per cent jump in net allowances for loans and other assets.

    OCBC’s net profit after tax came in at S$789 million in the three months ending December, versus S$960 million a year earlier and an average forecast of S$856 million from six analysts polled by Reuters.

    Net allowances for loans and other assets rose to S$305 million from S$105 million the quarter before.

    Net interest income for the quarter was 7 per cent lower at S$1.25 billion, the bank said, citing the “continued compression” in customer loan yields. Non-interest income was down 4 per cent at S$926 million, as fee income growth was more than offset by lower net trading income and life assurance profit.

    Net profit after tax for the year was S$3.47 billion, down 11 per cent from the previous year. Against a record-performing prior year, the OCBC statement added that the decline in overall earnings for the year was driven by a rise in net allowances and lower trading and insurance income.

    Total net allowances for loans and other assets rose to S$726 million, compared to S$488 million a year ago, with increases coming mainly from the oil and gas support services sector corporate accounts.

    “Despite difficult business conditions that prevailed throughout the year, the Group delivered a resilient performance. Our results were underscored by the strength of our well-diversified franchise that continues to drive consistent and balanced long-term growth,” said OCBC CEO Samuel Tsien.

    Tsien also said “there continue(s) to be stresses in parts of the portfolios particularly within the oil and gas support services sector, which drove increases in non-performing loans and allowances”.

    “Looking ahead, while the headwinds facing the broad economy are likely to persist, we are confident that we are well-positioned to support our valued customers through this difficult period,” he said.

    The bank has proposed a final dividend of S$0.18 a share, bringing the FY16’s total to 36 cents a share, unchanged from the previous year.

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  • Income Tax Liability for Deficiencies on a Mortgage #income #tax #debt #forgiveness


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    Income Tax Liability for Deficiencies

    If you default on your mortgage, and you or your lender eventually sell the property for less than you owe on it in a short sale or a foreclosure auction, your lender may either go after you for the difference (called the deficiency) or forgive the debt. (In some states the lender is unable to sue you for the deficiency). If your lender forgives the debt, you may be asked to pay income tax on the amount of the forgiven debt. The theory is that you are receiving a gift of this amount, because you don’t have to pay it back.

    The IRS learns of the forgiven deficiency when it receives an IRS Form 1099C from your lender. This is a form on which a creditor reports to the IRS as income the amount of a loan that they no longer expect to be repaid—such as in a short sale or foreclosure.

    When is Cancelled Debt Considered Income? When is it Not?

    Whether or not you’ll owe income tax on the amount of a forgiven deficiency depends on your circumstances. Here are the basic rules.

    • Loans for your principal residence. In 2007, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007. Under this Act, most homeowners whose debt was forgiven in the calendar years 2007 through 2013 are not required to pay income tax on the forgiven amount after a foreclosure or short sale of their principal residence. Unfortunately, the Act expired on December 31, 2013. However, since Congress is considering a bill that would extend the Act through 2014, you don’t need to worry yet if you think you might have mortgage debt forgiven in 2014.
    • Loans for other real estate. If you default on a mortgage that’s secured by property that isn’t your primary residence, you will owe income tax on any forgiven deficiency. So, for example, if you walk away from a loan on your second house in the country, expect a Form 1099C in the mail. The same is true for loans on non-residential real estate.
    • Loans not used for real estate. Similarly, if you take out a home equity loan and spend it on that round-the-world trip you’ve dreamed of, instead of using the money to improve your house, you will likely owe taxes on the amount of forgiven deficiency.

    How to Avoid Paying Taxes on Cancellation of Debt Income

    If you do face income tax liability on cancelled mortgage debt, you have two possible ways of getting out from having to pay it: the insolvency exclusion and bankruptcy .

    To use the insolvency exclusion, you’ll have to prove to the satisfaction of the IRS that your liabilities exceeded the value of your assets at the time your debt was cancelled. Cancelled debt is not included in income to the extent you were insolvent.

    Filing for bankruptcy will help you avoid income tax liability for cancelled debt because debt wiped out (discharged) in bankruptcy is not considered taxable income. You will have to file for bankruptcy before your debt is cancelled. And, of course, you’ll want to file for bankruptcy only if it otherwise makes sense for you.

    More Information

    For more detailed information on how the IRS treats cancelled debts due to a foreclosure or short sale, see the IRS’s website page on The Mortgage Forgiveness Debt Relief Act and Debt Cancellation and IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments .

    Talk to a Foreclosure attorney.


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    How to Fill Out Form 1040: Preparing Your Tax Return #how #to #fill #out

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    How to Fill Out Form 1040: Preparing Your Tax Return

    Many people opt to pay a pro to prepare their tax returns for them. Others like to use software. Call me old-fashioned, but I think that preparing one s own return using the actual forms is an excellent experience for most people. If you ve never done it before, you can t help but learn something in the process. Here, I take a look at preparing a Form 1040:

    Step 2: Fill-in your personal information.

    (Click on any of the images to enlarge.)

    The top of the form simply asks for some basic information such as your name, SSN, address, etc. It also asks for your filing status. For the majority of people, this is either Single or Married Filing Jointly. If you re unmarried and paying to support a dependent, you may be able to file as Head of Household, which will give you some additional benefits.

    Step 3: Determine How Many Exemptions You re Eligible For.

    Generally, you are entitled to one exemption for yourself, one for your spouse, and one for each of your dependents. In 2010, each exemption reduces your taxable income by $3,650 .

    Step 4: Lines 7-22: (Income)


    • For Lines 7-21, list each of your types of income on the appropriate line. Most of this information can be gathered from documents that have already been provided to you. For example, Line 7: Wages, Salaries, and Tips is taken from the W-2 provided to you by your employer.
    • Sum up all of the amounts entered on Lines 7-21, and enter the total on Line 22. This is your Total Income.

    Step 5: Lines 23-37 (Deductions to Arrive at Your Adjusted Gross Income )

    • On Lines 23-35, you ll enter any of your above the line deductions. (Common above the line deductions include the deduction for contributions to a Traditional IRA. the Tuition and Fees Deduction. and the deduction for contributions to a Health Savings Account.)
    • These above the line deductions are particularly valuable, because they save you money regardless of whether or not you choose to itemize your deductions. (More on this in the next section.)
    • On Line 36, enter the sum of all amounts entered on Lines 23-35.
    • Subtract Line 36 from Line 22. Enter the difference on Line 37. This is known as your Adjusted Gross Income. (When people reference above the line and below the line deductions, Line 37 Adjusted Gross Income is the line that they re referring to.)

    Step 6: Lines 38-55 (Tax and Credits)

    • For Line 38 (at the top of Page 2) just carry over your Adjusted Gross Income from Line 37.
    • On Line 40, enter the greater of the sum of your itemized deductions (such as home mortgage interest and charitable contributions) or your standard deduction. (The amount for your standard deduction depends upon your Filing Status and is listed in the left margin of the form.)
    • Subtract the amount on Line 410 from the amount on Line 38. Enter the difference on Line 41.
    • Multiply the amount of exemptions you claimed (on Line 6d) by $3,650. Enter the total on Line 42.
    • Subtract Line 42 from Line 41. Enter the difference on Line 43. This amount is known as your Taxable Income.
    • You then use the tax tables in the instruction booklet to determine the corresponding amount of tax for your taxable income. Enter this amount on Line 44.
    • If you re subject to the Alternative Minimum Tax, enter your AMT amount on Line 45.
    • On Lines 47-53, enter any credits for which you re eligible. Common credits include the education credits (specifically, the Hope Credit and Lifetime Learning Credit), the Retirement Savings Contribution Credit. and the Credit for child or dependent care expenses.
    • Total your credits, and enter the amount on Line 54.
    • Now subtract Line 54 (Total Credits) from Line 46 (Total Tax). This is the total amount of income tax that you re responsible for over the course of the year. [Note: As you can see, credits are particularly valuable because they reduce your tax on a dollar-for-dollar basis.]

    Step 7: Lines 56-60 (Other Taxes)

    In this section, you enter any other taxes for which you re responsible. (Things such as Self-Employment Tax and the additional 10% tax for early withdrawals from an IRA go here.)

    Step 8: Lines 61-76 (Payments, and Refund/Amount Owed)

    • On Lines 61-70, you ll enter any payments you have already made toward your tax liability for the year. (Most commonly, these payments are in the form of withholding from your wages, or in the form of quarterly estimated tax payments.)
    • If you qualify for the Earned Income Credit, enter your EIC on Line 64a.
    • Sum all of your payments, and enter the total on Line 71.
    • If the sum of your payments was greater than your total tax, enter the difference on Lines 72 and 73a. This will be the amount of your refund.
    • If the sum of your payments was less than your total tax, write the difference on Line 75. This is the amount you still owe. (So go ahead and get out the checkbook. There s no sense in waiting.)

    Step 9: Sign Your Return

    Now just sign your return, and you re all done! Nice job.

    For More Information, See My Related Book:

    Treasury Circular 230 Notice

    Any U.S. tax advice on this blog is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another party any transaction or matter addressed on this blog.

    Disclaimer: By using this site, you explicitly agree to its Terms of Use and agree not to hold Simple Subjects, LLC or any of its members liable in any way for damages arising from decisions you make based on the information made available on this site. I am not a financial or investment advisor, and the information on this site is for informational and entertainment purposes only and does not constitute financial advice.

    Copyright 2017 Simple Subjects, LLC – All rights reserved. To be clear: This means that, aside from small quotations, the material on this site may not be republished elsewhere without my express permission. Terms of Use and Privacy Policy


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    9 Ideas to Make a Side Income While Growing Your Business #business #names #available


    #side business ideas

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    9 Ideas to Make a Side Income While Growing Your Business

    February 18, 2015

    Being an entrepreneur is synonymous with being financially unstable at times. While you re growing your company, it s important to be focused. But what if you could get a side hustle that would help bring in a healthy secondary income to alleviate some of that financial stress? And, best case, what if this side hustle could also help you grow your core business?

    The good news is that there are a lot of companies that create opportunities for entrepreneurs that don t require full-time work and can become a great companion to the work you re doing. Better yet, they take out the hassle of having to create a second company to supplement your income because they do the legwork and allow you to plug in your skills and time.

    Here are nine examples of opportunities that might be the perfect side hustle for you as you continue to grow your company!

    1. Invest in real estate.

    There are a lot of methods for making money in real estate, many of which don t require your full time effort. Josh Dorkin, CEO and founder of BiggerPockets says you should consider land lording, flipping houses or wholesaling. His company s website will help you manage and understand all of the different state laws and regulations, as well as leverage the largest worldwide network of real estate investors who come to his site to ask questions and help one another.

    He also recommends finding people in your area with skill sets and expertise that you don t have, and to partner with them or use them as a place to park your investment cash. You can join BiggerPockets for free and he recommends reading its Ultimate Beginner s Guide . a free eight-chapter book on real estate investing for novices.

    2. Drive a taxi.

    Most of us are familiar with Uber and Lyft. the companies that took limo and town car services and gave them riders in their down time, and then expanded into recruiting regular citizens to utilize their free time to become taxi drivers. Have you considered being one of them?

    I ll never forget one of my UberX rides where the driver told me that he uses his spare time to make money driving as well as to leverage the networking he can do with each of his passengers as he grows his new business — genius!

    One of the greatest things about the Uber platform is that it offers economic opportunity for a variety of drivers — full time, part time, teachers in summer, full-time students, military spouses, etc. — in more than 260 cities around the world, says Molly Spaeth, an Uber spokesperson.

    So if you re in one of the 260 cities, you could be making your car into a money-generating experience and a networking opportunity on wheels!

    3. Host the next-gen of tupperware parties.

    There are many companies that do at-home parties and trunk shows where you can utilize the company s products, marketing and operations infrastructure to build a side income by plugging in your network.

    One that has proven to be very successful is Stella and Dot. where you become a jewelry consultant and host parties at friend s homes, local boutiques or events. Other popular brands include Rodan + Fields and Pure Romance .

    4. Outsource your skills.

    Can you do graphic design, data mining, website development, video editing, software development or customer service? Then you can parlay those skills by signing up on sites such as TaskRabbit or ODesk and get hired by their members to do jobs in any of these areas. You can pick and choose how often you want to work and what jobs you take!

    5. Be a temp.

    Long gone are the days of temp agencies and scouring the Internet for part-time or short-term work. Enter Wonolo. which helps people work now locally.

    Wonolo is a company that allows anyone to work for a few hours or a day at real companies doing real work, says AJ Brustein, the company s co-founder. Want to help an ecommerce company fulfilling orders when they are busy, help out at a conference taking tickets, or assist in data entry at a wealth management firm? You can get numerous career experiences around the flexibility of your own schedule.

    You can get alerted of jobs available in your area immediately via Wonolo s app. Sounds perfect for a busy entrepreneur!

    6. Rent out your pad.

    Are you traveling for a business meeting and leaving your home empty? Do you have a spare room or guest house? It s time to put them to work and list them on Airbnb or VRBO and make money on your property when you re not using it!

    7. Rent out your car.

    If you can get on board with renting out your home, you ll certainly understand the model created by companies such as RelayRides and FlightCar. which allow you to rent out your personal vehicle to their users.

    I recently used RelayRides during a trip in San Francisco and had a great experience that didn t require me to find a rental car center, and the cost was right. I even was able to get acquainted with the car s owner, to whom I offered to help find a job.

    It s another way to make money and network when you re not using your car (like when you re parked at the airport thanks to FlightCar)!

    8. Don t just buy on eBay, sell there.

    You can simply sell your own items, or you can make it into a side business.

    I run an eBay franchise in which I teach people how to run a re-sale business on eBay, says Garrett Brustein. I do one-on-one training to show them where to get their inventory and how to list and ship items the same way I do so they can emulate the process and take all of the guess work out of the business. They are then able to do this as a part-time job in their free time.

    Just think — you can unload the stuff you don t want and go shopping to resell items all in the name of making money!

    9. Get paid to network.

    I know this one from personal experience! After founding my first company, a credit card processing brokerage, I began to organize networking events in my city to help young professionals interact in an environment where they wouldn t fear getting sold to or hit on. I quickly realized the events were not only helping those in attendance to make valuable connections, but that there was real money to be made, as well.

    Over time, I packaged the operations of Network Under 40 to enable entrepreneurs in other markets to bring the events to their cities. By becoming the epicenter of the network, it naturally parlays into building their full-time businesses as well as creates a healthy side income.

    If you re looking to make some money on the side and/or find channels through which you can build your primary business, it s time to look into some of these options.


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