Friday, January 28, 2011

Will My Online Earnings Be Taxed? - Important News

More and more people are drawn to the thought of running an internet business through the perception that whatever income attained on the internet will be exempt from taxation. This regrettably is a prevalent disbelief in view that those who own internet businesses are still required to pay their tax dues.

In reality there's been considerable controversy behind internet businesses and taxation leaving many of the entrepreneurs who begun their online businesses with this false perception wishing they had done their due diligence before starting out.

"But I Am Working At Home"

And Other Pointless Excuses Not To Pay Taxes

With an influx of individuals now working in the comfort of home and receiving earnings from their online endeavors the obvious pretext is that given that they acquired the income at home they don't have to pay taxes. These people fail to realize that taxes are actually centered on the sources and quantity of the income in addition to the kinds of products and services sold; not on the location of the business.

With that in mind you should fully grasp that you are certainly required to pay your tax dues even when you earned it online.

Internet Tax is paid in the same manner every other business pays tax. As a matter of fact the government does not collect income taxes based on how a business works but rather it concentrates on the type of business.

If your business is based on the Internet you still have to register for GST and PST (if appropriate) the same as any other business. Based on the framework of the enterprise, sole proprietorship or incorporated, you'll still need to fill out the required documents so that your online business could be deemed as legal and so that you can pay the proper taxes regularly.

There is really no big difference between the tax responsibility of an online business and any other business.

Online Businesses And Federal Taxes

Even when you operate an online business you are still required to pay federal taxes. It may seem unfair to you but it is crucial that you understand this upfront rather than find out at a later point that you owe money to the IRS. The federal taxes that you need to pay will vary according to your business framework.

If your business is set up as a sole proprietor for an online business any revenue you earn through your online business is going to be taxed as income on your PTR or personal tax return.

Aside from that you will need to pay for your part of social security and medicare taxes using schedule SE.

On the other hand in case you have incorporated your business the tax schedule will be very distinct from a sole proprietor of an online business.

At times, the tax you have to pay as an incorporated online business will also depend on the kind of business. You'll either pay tax at a corporate level or it will be handed down to you as an income.

Mastering taxes as it applies to your online business can be quite perplexing but it is critical to get a picture of what is needed that allows you to minimize complications down the line. You might want to seek professional advice from a lawyer or public accountant if you're not 100 % certain what taxes are required for your online business.

Obtain free access to a List of Business Tax Deductions and get answers to pressing questions concerning business tax filing

Thursday, January 27, 2011

5 Ways to Prepare and Organize Yourself for the Dreaded Tax Season

You've probably heard the saying, "The best defense is a good offense." This is a relevant saying when it comes to preparing for the dreaded tax season. For those who lose sleep as the April 15th tax filing deadline looms, it's especially important to do a bit of homework throughout the year to save you from months of anxiety leading up to April 15th.

Here are five ways to prepare and organize yourself for the dreaded tax season.

1. Divide and conquer.

Fortune 500 companies are obligated by the U.S. Securities and Exchange Commission (SEC) to submit quarterly financial reports to keep shareholders and other relevant players abreast of their performance throughout the year. Take a cue from these successful companies and divide your year into seasons (instead of financial quarters) to keep better track of your finances throughout the year.

In summer, organize your records. Make sure your filing system is up to snuff and is complete with updated records.

In autumn, estimate what your annual income will look like at the end of the year, as well as your taxable income. You should be able to estimate your taxable income, so you know if you're behind on tax payments.

In winter, prepare to file your tax return. Make sure needed records are complete and readily available. Also, gather any tax forms you'll need. Separate pertinent receipts from those you won't need.

In spring, file your taxes! If you've followed the guidelines above, this should be a breeze.

2. Keep good records.

This may seem redundant, but it can't be emphasized enough. If you keep good records throughout the year, you'll have an easier time come tax season. Additionally, keep certain types of documents secure: birth certificates, wills, deeds, and bond or stock certificates.

3. Adjust your W4 to reflect appropriate withholding.

There's a school of thought that believes that if you're paying too much taxes throughout the year (even if you get a large refund at the end of the year) you're actually giving the government a free loan! This is because you could be saving the difference each month to put into a savings account that's earning you interest instead. However, if you lack self-discipline, you might want to think of receiving a tax refund as a forced savings plan. Whether you'd rather adjust your W4 to get a refund or pay as little as possible toward taxes each month to maximize your income and minimize the taxes paid is up to you.

4. Keep receipts.

Keeping receipts will give you ammunition if you get audited. Pertinent receipts include paycheck stubs, 1099 or W2 forms, receipts for deductible items, records of charitable donations, and medical and insurance documents, among others.

You can also use software like NeatDesk to electronically keep track of your receipts, too.

5. Pay your taxes before April 15th.

The IRS charges penalties if you don't pay estimated taxes throughout the year. Therefore, adjust your W4 withholding amount appropriately during the year to keep the IRS at bay. If you're unsure how much to withhold, use turbo tax coupons to get affordable help with your taxes.

With a little forethought and basic record-keeping skills, you'll feel prepared to file your taxes come April 15th.

Wednesday, January 19, 2011

Are Reverse Mortgages a Viable Option for Older Americans?

Reverse mortgages are special types of home loans that enables the borrower to convert a portion of his home’s equity into cash. Unlike traditional home equity loans, repayment is not required until the borrower moves or dies. Reverse mortgages are garnered by the FHA through its Home Equity Conversion Mortgage program.

Qualifications for these reverse mortgages include: the homeowner needs to own the home outright or have a low mortgage balance that can be paid off with the proceeds from the loan, the homeowner must be at least 62 years of age, and the home must be the primary residence of the homeowner. HECM counseling is also a requirement of the financing process to make sure the homeowner understands the process, is really in need of the reverse mortgage, and can afford to stay in the home even after loan approval.

There has been a change to the HECM rules, though. There are a couple of options that are now available. One is the HECM Standard option and the other is HECM Saver option. The saver option can cut the initial insurance premium, which is one of the biggest costs associated with these types of loans, from 2% of a home’s value, which is the current HECM Standard option, to 0.01% of the home’s value.

In addition to the new HECM option, many lenders are also cutting deals on fees. Fees can potentially add up quickly. For example, origination fees can be as much as $6,000 and closing costs are also required, which includes appraisal and title insurance fees. These potentially high upfront fees have previously stymied interest in these types of loans. Lenders, though, are now more than likely to pay at least half of the initial premium and waive origination fees.

The choice between the types of loans can be complicated, though. Monthly payment options are available as well as getting a lump sum, at a variable or fixed rate. Another option is a variable rate credit line. The new HECM Saver constitutes another hurdle in which the amount that can be borrowed normally is lower than with an HECM Standard loan. For example, a 65 year old in a paid off $300,000 home could net only $146,000 with an HECM Saver but can net about $182,000 with a traditional loan or an HECM Standard loan. Of course, these numbers are relative to the area lived in as well.

Further, if the option of receiving payments is chosen, the process can become even more complicated because there are currently five options available. These are Tenure, Term, Line of Credit, Modified Tenure, and Modified Term. The Tenure option is set as equal monthly payments as long as the borrower continues to live on the property for as long as the borrower lives. The Term option is basically equal monthly payments for a fixed period of months. A Line of Credit is just that, unscheduled payments in the amounts chosen by borrowers until the line of credit is exhausted. Modified Tenure includes a line of credit along with fixed monthly payments. Modified Term is a line of credit with monthly payments for a fixed period.

Susan Redfield - Real Estate Broker at

Tuesday, January 18, 2011

Four Ways to Consolidate Debt

Robert Zangrilli is the CEO of Franklin Debt Relief, a leading debt reduction service for consumers.

When you’re carrying balances on several different credit cards, the majority of your monthly payments goes towards interest. Only a small portion of your payments actually goes towards reducing the existing balance. Consolidating all of your debt into one payment enables you to pay down the balance more quickly. There are several different ways to accomplish this.

Consolidate Into One Credit Card
If one of your credit cards has enough available credit, it might save you money to transfer the balance of all your other credit cards onto it. To determine if this option is right for you, you’ll need to consider the interest rates on all your cards. If you have several credit cards with low balances and are paying a special introductory interest rate of five percent, you’ll ultimately end up spending more by moving that debt to a card with an interest rate of 14 percent. The best option would be to move all of your existing debt onto the card with the lowest interest rate.

Use the Equity in Your Home
Home equity loans and lines of credit usually offer a much more competitive interest rate than credit cards. And because they’re secured by your home, these types of loans usually offer a higher borrowing limit as well. A home equity loan is very similar to a traditional mortgage with a set start and end date, while a home equity line of credit is like a credit card where the balance can be reused as it’s paid down. These are excellent options for credit card debt consolidation with one caveat: if for some reason you can no longer make payments your home would be at risk of foreclosure.

Borrow from Your Life Insurance Policy
If you have a life insurance policy, you might be able to borrow against its cash value. Most insurance companies will not require you to make monthly payments on the loan as long as the amount you’ve taken is less than the cash value of your policy. Once your debt is under control, you should pay back the loan on your life insurance policy as quickly as possible. Otherwise, your death benefit will be reduced by the amount of your loan, and your survivors may not receive the money they need to make ends meet.
Borrow from Your Retirement Fund
Many retirement plans provide for loans at enticing interest rates, but there are some significant drawbacks to consider. The loan must be repaid within five years or you will be hit with penalties on your income taxes. If you change jobs, the loan will be due within two months or you will also be hit with penalties. As a result, this method of debt consolidation should be considered as your last option.

Friday, January 14, 2011

Annuities – Blessing For The Retirees

An annuity is a contract between an individual and an insurance company. Annuities are the schemes that have been introduced with an aim of providing a fret-free life to the senior citizens after retirement. Being dependent on family members and relatives compels them to kill several desires rousing in their heart. Annuities are the programs which act as the most effective financial solutions for the retirees as they allow them fulfill all their desires whenever they feel like doing so. These schemes allow the old aged individuals receive a steady income after retirement either for lifetime or for a specific period of time, as per their choice.

Due to the benefits that they provide, these plans have grabbed the attention of majority of retirees to make sure that their old age is free of any kind of financial worries. The payment that you receive after enrolling for these annuity deals is not a sudden process, but it is, actually, the result of the investments that you make during your service tenure. The money that you invest acts as the ultimate source of income for you in case of the plans of annuities. It is up to you whether you choose to receive the income on monthly or quarterly or annual basis or opt to obtain a lump sum at once. The payment size, however, completely depends upon the length of your payment period.

Two types of basic annuities are there, namely, fixed and variable. In case of the former, the payout that you choose is fixed and guaranteed, while in case of variable annuity, the stream of paying out is determined by your annuity's performance. However, it is up to you which of the above options do you go for. Before involving yourself in the deals of annuities, you must research all its aspects carefully and choose a relevant plan based on your basic needs and requirements.

Friday, January 7, 2011

Financial Matter‭ –‬an easy solution to all your financial matters

Financial solution is a main problem every businessman & individual are facing in today's changing dynamic world .Mostly everyone is in debt about something or that and you unfortunately don’t have the sufficient funds to pay off the debts, then you can easily seek the advice of some financial consultant who will guide you to the best gain of your all left funds. Sometimes Government also offers free grant money for those people who are in financial crisis. As per you don’t even require to have a such a good credit score in order to qualify for the grants by the government . However, you will be asked to show your income statement in order to get the grant money by the government .

All financial Matter will help you or guide you to get the free help from the financial consultant Mark Johnson who is also an Investment Banker .he loves to write on today's Investment sector of the world where you can get the most out of your funds . Thus, it will help you or try to solve your financial problem & live a debt-free life. There are many options to solve your financial problem. Though the main option available for you is to first stop spending more on impulse purchase or window shopping.

Plan and estimate you expenses beforehand & use cash instead of credit card. Shop as much as you need only don't buy uselessly be a limited shopper so as to control your unnecessary spending on lavish products .Have a frugal mind.

Invest you money in various sectors like shares ,gold, forex, real-estate etc. so that it will help you get returns on your investment more when you need it rather than spending on only one particular sector. Get help from some good financial consultant or advisors to be relived from your debt problems fully. They will surely show you some good and right path to get relief options from your financial burden like debt management, debt settlement or debt consolidation.

Saturday, January 1, 2011

Personal finance 2011......Predictions and Tips

With the beginning of new year 2011 everyone has started predicting what will be this year resolution, for the betterment of personal as well as financial matters.Last year was a year of ups and down in-spite several cost cutting and other measures to cut the budget deficit taken by the government.There were few investors who got good return,very few become rich.others struggle and overall it was a mixed result.As we are heading towards new year everyone has started assuming what will be new this year,what to get the best out of it,each of us a goal to achieve.Some one is planning,some already planned and others still waiting and predicting.Many experts had already put their views and opinions on different subject matters.

My suggestion for this new year from a investor point of view will be to invest in real estate,mortgage,this industry is booming and if we are willing to invest definitely we will get return,other then this you can invest in gold,prices of gold is going to touch the sky in recent time.If you are willing to invest in the commodity market and luxury goods item if you definitely be a gainer this year.Specially on some branded products.recent trend in the commodity market and luxury items has shown a high rise in income.People are more and more concerned about their standard of living and this has increased a high standard of living among the people and accumulation of luxury goods.Another very good place to invest is in Food items as the cost of food items are growing to increase day by day and each one of us is aware of it.Investment in paddy farm,tea state,dairy products will make you rich this year.This are few of my simple tips to be rich this year,many more details are yet to come,Hoping for the best,

So invest but Smartly.

Wish all my readers a very happy and prosperous new 2011.

Best regards