Category Archives: Financial

Looking On The Bright Side of Exchanges

The Mystery of Capital Gains Tax

If you’re selling any capital asset, you should know that you may be subject to capital gains tax. And as the Internal Revenue Service says, almost every property you have may be considered a capital asset, whether you bought it as an investment, like real estate or stocks, or for personal use, such as your car or home theater equipment.

If you sell something for an amount that exceeds your “basis” for that item, then the rest is a capital gain and it must be reported as such on your taxes. Your basis is what you spent to get the item, including sales, excise and other taxes and fees, as well as charges for shipping and handling fees, and installation and setup. Also, all expenses you paid for the improvement of an asset, which led to an increase in its value (for example, renovating your rental property), may count towards your basis. Using the same principle, asset depreciation reduces your basis.

More often than not, a taxpayer’s home will be exempt from capital gains tax. The biggest asset people usually have is their home, and depending on market conditions, they can make a huge capital gain when they sell it. The good news is you can exclude a part or even all of such a gain from the capital gains tax, provided the following conditions are met:

> You owned the property and used it as your primary residence for at least two years within the five-year period prior to the sale; and

> You haven’t excluded the gain from a previous home sale occurring within two years before the latest sale.

If these conditions are actually met, you can have up to $250,000 excluded from your gain if you’re unmarried and $500,000 if you’re married and filing jointly with your spouse.

How Length of Ownership Matters

Selling an asset you have owned for over a year, your gain will be considered a “long-term” capital gain. If the asset has only been your property for less than a year, it is called a “short-term” capital gain. And taxes for short-term gains are substantially higher than those for long-term gains. The capital gains tax rate on investments you’ve had for less than a year is higher – usually from 10% to 20% or even more.

This tax treatment is one of the best advantages of a “buy-and-hold” investment technique, compared to that which requires frequent buying and selling (for instance, day trading). Also, taxpayers in the bottom brackets typically don’t have to pay taxes on long-term capital gains. Hence, the difference between short-term and long-term capital gains could actually mean to pay taxes or not to pay any taxes.

Capital Losses Offsetting Capital Gains

Selling an asset for lower than its basis produces capital loss. However, only investment capital losses may be used to offset capital gains, and not capital losses from a personal property sale.

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Practical and Helpful Tips: Businesses

New Federal Student Loan Repayment Plan Gives Borrowers Debt Relief

Student loan debt nowadays is bringing down a lot of college graduates. If you check the records, it can be seen that student loan defaults are now in a whole new level. With that being said, college loan borrowers are crying out for debt relief. In order to help those who have loaned repay their college debts, President Obama proposed quicker government-backed loan consolidation and loan forgiveness plans, which also in turn surge the American economy.

It is believed that President Obama’s decision to further develop education loan forgiveness to more students can result to a much easier process of paying out the loans for college. As of now, the details of the President’s new “Pay As You Earn” program, which lists down the new rules for repayment, are still being developed.

The main focus and objective of the plan is a loan consolidation at a lower interest rate. There are three major features of the plan that will benefit college graduates who are striving to pay their monthly education loan payment:

First is the interest rate.

There will be a fixed rate (not more than 8.25%) after applying the 0.25% interest rate drop to qualifying loans being combined. With a lesser interest rate, students are able to pay more of the monthly payment resulting to more decrease in the principal balance.

The Repayment Term

For every loan that is consolidated, original repayment term is retained.

The Electronic Debit Payment Benefit

For those who will apply for the new consolidation plan is entitled to an additional 0.25 percent interest rate reduction if their loan is repaid via the Department of Education’s automatic debit system.

The government has indicated that they want those people holding both private and government student loans to be permitted to consolidate their debts at the moment into one new government loan. The implementation of such action helps in reducing their interest rates.
The thing is that college graduates would still be responsible in making sure that they are paying their loans, but those revised payment would be capped at just 10 percent of their salary.

The best thing is that for those who borrowed money for college education will have their loans forgiven after 20 years.

As of now, it is not yet fully determined how many students the new law will be able to help but it is estimated to reach at least 450,000 up to 6 million.

The new law passed by the Congress took a while to become a reality. Fortunately, it has become a reality and the new terms has been effective since 2012.

Apparently, the low-income borrowers are the ones who can really get the most out of the plan.

Where To Start with Funerals and More

Why Is It Important For Anyone To Get A Funeral Plan For Themselves?

There are certainly other priorities that must be considered before deciding to get a funeral plan or even a funeral insurance and it is surely an understandable thing however, that also does not mean that these things are never necessary, there are just those things that must be taken into consideration first for they are more important. Due to the fact that there are so many financial responsibilities that one must take into consideration first that many of the people these days have still not get a funeral insurance for themselves hence they also would never get the chance of knowing the many benefits and advantage that a funeral insurance policy provided to them can do for them.

It has always been and it will forever be an undeniable fact that life is certainly unpredictable. Due to life’s unpredictability, we should always be prepared for as much as we can of the unknown possibilities that may come our way. And one of those unknown possibilities is death itself. And of course, death will always be a tragedy for anyone. Hence, why would you add salt to the wound by not having a funeral insurance to cover for this tragedy? The grieving family of the deceased will be assured that the expenses to be paid will be covered thus enabling them to save time and money and making the mournful feeling they have to be bearable at the least if the deceased has a funeral cover for himself. A opportunity to say the final goodbye as well as getting a wonderful provider of comfort, mourners often times get that feeling in a funeral. For them to be able to make the funeral as respective as possible, they will do anything for to achieve it including spending the money that they does not have. Aside from looking after the best financial interest for them, the funeral plan also allows them to bury their deceased family member with dignity.

The funeral insurance will certainly pays out the definite amount of money that the deceased deserves being the one insured. The amount of money being paid to the nominated beneficiaries can certainly be used to pay the cost of the funerals by the insured members as well as the others necessary expenses. Since you have a spotless financial state by the time that you died, your assets, such as the property that you have will be tied up for quite some time, in short, the money that you might get from your estate may not be immediately available.

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5 Lessons Learned: Taxes

Most Important Things You Need To Understand About Capital Gains

A capital gain occurs when you are selling something for more than you have actually spent for it. This occurs a lot with investments, but it also applies to personal property. You can purchase a car for $5,000 and resell it a week or two later at $7,000 – giving you $2,000 worth of capital gain. And although the concept is pretty straightforward, and made even simpler by capital gain tax calculators, it still is advisable for every tax payer to learn a few basic facts about capital gains taxes.

Capital gains aren’t just for the rich

Anyone who’s interested to sell a capital asset should expect that capital gains may be applied. And according to the Internal Revenue Service (IRS), just about everything you possess can be qualified as a capital asset. That’s the case whether an investment was bought, such as property or stocks, or for personal stuff like your car or your huge flat screen TV.

If you sell something above your “basis”, you get your capital gain from the difference and you are required to report your gains on your taxes.

The basis is basically the amount you paid for the item. It involves not only the price of what you’re selling but also any other costs you had to pay to get it -including, but not limited to sales taxes, excise taxes, and other fees, handling or shipping costs, setup or installation charges, money you spent for improvements to boost its value.

Most of the time, you home is an exemption.

Your home, just as for many people, is the single biggest asset you have, and depending on the real estate market, you might realize a large capital gain if you put it on sale. It’s good though that tax code will let you exclude some, if not, all of this sort of gain from your capital gains tax, as long as (1) you owned the property for a minimum of 2 years within the 5-year period before its sale, (2) it’s been your primary residence for a minimum of two years within the same 5-year period, and (3) you haven’t excluded the gain from another home sale within a two-year period prior to the sale.

Your business income is not part of your capital gain.

If you own a business that involves buying and selling items, your gains from sales will be tagged and taxed as business income and not capital gains.

Loss on capital may mean an offset on capital gains.

Anyone with enough investment experience would agree that things don’t always rise in value – sometimes, they flunk. So if you sell something less than its basis price, then capital loss happens instead.

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What You Should Know About Lenders This Year

Brief Facts about Obama’s Student Loan Forgiveness

Being a learner, especially in a college university could be tough. It is not just because of the academic challenges but also because of other factors such as in finances. Students that who are facing monetary problems will have no choice but to borrow money just to finish schooling. However, while doing so, their supposedly solved financial issue later on becomes a nightmare because of the high interest rate. Their principal loan gained substantial interest rate and most of the time they are just able to pay the monthly interest but not the main loan. In more serious situations, their interest accumulated an additional interest, and this gets to become a greater trouble.

College students having financial loan situation is getting to be an increasing predicament in every region like in the states.

But big applause to US President Obama considering that he is able to deal with it and make some important remedy to this issue. The President has offered the student loan absolution to help the college student on paying out their loan obligations, and thus providing alleviation to the country’s economic condition.

The Obama Loan Forgiveness is striving to aid men and women who obtained loans for educational functions in a hassle-free manner. The plan is basically involving paying while earning. The words called debt consolidation is the basic focus on of Obama’s plan. This is by definition merging of multiple loans into a single loan making it easier for students to pay their debt. The 3 fundamental things of this plan that are quite beneficial to each student would be the payback term, interest rate, and electronic debit transaction system.

In Obama’s loan method, each financial loan that is joined will get back to its principal settlement terms. By doing this, the accumulated interest present in many standard consolidating plans will be handled properly making it less complicated for learners to pay out.

When speaking about the amount of interest, right after getting qualified and processing loan relief with the interest decrease of 0.25%, there would be a set amount of less than or equal to 8.25%. Naturally, lessened monthly interest is quite vital in that it signifies improved ability and bigger pay out to the principal loan. College individuals who processed their loan merging are suitable for a further 0.25 percentage decrease of their interest amount given that the loan repayment are done by way of the digital debit settlement system of the Division of Education. And again, this would be valuable to any lender and the government body is presently making an attempt to work on this system.

Obama Loan Forgiveness is really a great venture not just for college students but essentially to the entire United States. So if you are an American student with loans, just opt for this program, spread this good news, and you will surely help yourself and your entire country.

Where To Start with Resources and More

Things You Need To Know When It Comes To 1031 Exchanges

Tax experts may be able to tell you what Internal Revenue Code Sections are, but what most people learn will not go beyond 401(k). (Yes, the workplace retirement savings plan that you have has actually been named after a section found on the tax code.)

So the question here is what do they mean by 1031? When you talk about 1031 exchange (also termed as like-kind exchange), it is the swapping of one business asset or investment asset for another. Although you might have known of most swaps being taxable as sales, if the exchange is within 1031, you will either be required to pay limited tax or you may actually have no tax at all at the time of the exchange.

As an effect of this, you are now free to change the form of your investment without worrying yourself on things like recognizing or cashing out a capital gain. This is the way for you to continue the growth of your investment tax deferred. And there is absolutely no limit on how frequently you are allowed to do a 1031.

You also need to understand that there are complications doing a 1031 which is why it will be necessary for you get some help from a professional. If you’re considering doing a 1031, or you’re simply curious about it, here are the things that you should know.

1031 Exchange Is Not For Personal Use

You should know that this is for investment and business property only, which would mean to say that there is no way for you to swap your primary residence with some other home. There may be some other ways for you to use a 1031 in swapping vacation homes, however, doing so could be a lot trickier than it used to be as the loophole may be much narrower.

But some of your personal property may qualify

1031 exchanges deal with real estate most of the time. However, there are also some exchanges that may involve some personal properties (say a painting).

“Like-kind” has a broad sense in meaning

Majority of the exchanges should only be of “like-kind” – whose meaning might not be exactly what you think it means. You can always do an exchange of your ranch for a strip mall, or if you have an apartment building, you can choose to exchange it for raw land. The rules can be that liberal. But again, you should be aware that there are quite a lot of traps set up for those who are not really familiar with it.

You may always choose to have a “delayed” exchange

When it comes to property exchange, it simply involves two people where one swaps his property for the other’s. But the truth is that it could be quite difficult to find another person who has that very property you want to swap for, who also wants the exact property that you currently have.

Understanding Lenders

Student Loan Forgiveness: Must-Know Facts

Student Loan Forgiveness is a combination of different programs that motivate people to go for careers in low-salary fields or in areas that call high student loan debt. As an exchange to the years of service you render in the field, the entire or a part of your balance in federal student loan can be cancelled. When the balance is cancelled, it means that you are no longer under obligation to pay it. It is, therefore, a great way of relieving yourself from a student loan.

As a person who is about to pursue a career, it is important that you take time to think over what Student Loan Forgiveness program can provide to you. If you are interested in getting a career in public service but are worried about receiving a low salary, then the program can be best for you. The program can also be considered good for you if you have already applied for a loan and you are currently on a job that belongs to volunteer service or public service.

The program comes in different types. It is essential to take time knowing each of them and the way they can benefit you, so you can decide which of them is best to use.

Up-front Student Loan Forgiveness

This program works by cancelling or forgiving a part of your student loan for each year that you are on the service. If you cannot complete the entire number of years of service needed to cancel the entire loan, you will still get the benefit of having a part of your loan cancelled for the number of years you have rendered in the service.

Back-end Student Loan Forgiveness

Back-end Student Loan Forgiveness is another program and it is different from the first one mentioned in this article. What it purposes to do is to forgive or cancel the entire balance of your student loan debt. However, you need to be able to serve for the full-period demanded. Failure on your part to complete the entire period will make you forfeit the benefit.

Prior to choose a program in Student Loan Forgiveness, comparing the different programs against each other is highly recommended. Through it, you will know which program will work for you in a more favorable way. It is also important to check the respective requirements of each program. For instance, some programs may need to make monthly payments. See to it that you are well-informed before you arrive at any decision.

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Overwhelmed by the Complexity of Resources? This May Help

All About Public Service Loan Forgiveness

The Public Service Loan Forgiveness or known simply as PSLF Program is focused on forgiving the remainder balance on Direct Loans after making 120 qualifying monthly payments under the qualifying repayment plan while working for a full time job for qualifying employer.

Well, you might be wondering what is a qualifying employment. Well, keep in mind that the qualifying employment for PSLF Program is not only about a certain job that you’re doing for your boss. Instead, it is more on who your employer is. The employment with government organizations at any level be it tribal, local, state or federal, not-for-profit organizations that are tax exempted of the Internal Revenue Code and other kinds of not-for-profit organizations that are providing certain kinds of qualifying public services are the type of organizations qualified for PSLF Program. Whether you believe it or not, serving in full time Peace Corps or AmeriCorps position is deemed as qualifying employment for PSLF Program.

On the other hand, employers who aren’t qualified for PSLF include labor unions, for-profit organizations, partisan political organizations and non-profit organizations that aren’t tax exempted and not providing qualifying service.

But what is considered as full time employment for PSLF? Basically, you will be considered to work full time if you have met your employer’s definition of full time or, has worked at least 3 hours per week or whichever is greater. If you’re employed in more one qualifying part time job at the same time, then you might meet full time employment requirement if you’re working a combined average of at least 30 hours every week with your different employers.

As for the borrowers who’re still employed by not-for-profit orgs, the time spent on worship services, religious instruction or any kind of proselytizing might not be counted toward meeting a full time employment requirement.

Another question that many people are wondering is what is a qualifying payment? Truth is, qualifying monthly payment is the payment that you make under qualifying repayment plan, no later than 15 days after due date, for full amount due as shown on the bill and while you’re employed full time by qualifying employer. You can even make qualifying monthly payments throughout periods when you are required to make the payment. With this being said, you can’t make qualifying monthly payments while your loans are in the grace period, in-school status, a forbearance, deferment or default. In addition to that, you have to know that your 120 qualifying monthly payments don’t have to be consecutive.

You can receive credit only for one payment every month even if you make more of the required amount for your monthly payments.

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The 9 Most Unanswered Questions about Loans

What You Should Know About The President of The United States’ Student Loan Program Before Enrolling

A lot of Americans have become qualified to avail of a helpful student loan repayment program.

The repayment plan knocks off monthly bills to 10 percent of their earnings and they wouldn’t need to pay the loan after 20 years of payments. Previously, the provisions were only for those who have really low income compared to their debt and for those who got their loans after 2007. The administration made the program accessible to people no matter their income and the time they availed of the loan.

These plans don’t apply to all. These can be your guidelines:

Qualified loans: If your federal loan is not in default, then you are eligible.

Payments every month: The calculation depends on what you are earning above 150 percent of the federal poverty line. If your salary is not big, you don’t have to pay until your pay will increase.

It is important to keep your financial information updated every year so as your income increases, you would be paying more. Depending on how your income will change over time, you could be paying more.

Forgiveness of debt: When after 20 years, you still have a loan balance to pay, the amount left will be erased. Your pardoned balance could end up being added to your income and thus increasing your position in the tax bracket.

When your plan is already income-driven: You have an option to update your plan from your old one. Take note that if some interest are not settled, this will be added to the principal of your loan and can cause a higher interest. When you process old bank-based loans into the new plan, any payments you made previously wont be counted toward the time needed to be qualified for forgiveness.

Provisions for graduate debt: If you have a loan for graduate school, you would need to pay payments for 25 years which is longer than the normal time of 20 years if you want the balance to be forgiven. This term was made in order for grad students, who are often borrowing more, to have a lesser cost of forgiving debt.

Penalty for matrimony: Those borrowers who marry cannot lower the amount of their payments by not including their spouse’s income, except if they are separated or are victims of domestic abuse.

How to apply: You have choices on how to sign up. Apply online and also send your tax return information electronically. You can also ask your student loan advisor for a hard copy application form.

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Learning The “Secrets” of Machines

The Benefits of Buying a Wireless Credit Card Terminal

Any business will tell you that the most important thing at the end of the day is for them to get paid for their service. Finding a customer with cash on hand can be nearly impossible. Many individuals do not carry enough cash to handle most transactions that will occur in their daily life. Your customers are going to be paying with credit or debit, and you need the technology to satisfy that desire. While you may have a card reader, you might not have explored the wireless credit card terminal option that is available to you. You will be very happy to have a wireless credit card terminal at your side. In this article, we will explore exactly how.

The freedom a wireless card terminal will give you is priceless. Accepting payments will no longer be confined to a single space within your building. Instead, you can walk around the store, expediting the process for everyone involved. Now, customers can be met by your employees wherever they please, instead of having to go up front to check out. This means more sales for you, since going wireless means more sales done more quickly. Time is money, and going wireless saves the first while gaining the second. Both you and the customer want the transaction to be processed in as little time as possible.

Because of this added freedom of movement, your store will gain a reputation for being with the times. While having a single space for payment processing is traditional, it is also becoming outdated. Not only can people purchase products at home, but they can do so anywhere with the help of smart phones. Going with the flow of technology’s latest trends is virtually always the best decision. Going wireless with your payment processing will make you one with the future, earning praise and great reviews from customers new and old. Your business will operate as fluidly as the customer’s at-home and mobile transactions, creating a sense of comfort and trust.

Customers can be fickle, and giving them more time to decide against a purchase is no good. Being stuck in line will make a customer wonder whether your product is worth the wait. This will no longer be a problem once you have a wireless card reader. The less time spent second guessing is more time spent swiping cards and making profits.

A wireless card reader is the next step to making your business great. There is quite a bit your business will gain for having gone wireless with its transactions. The customer will be happy, and so will you. Long lines are undesirable on both ends of the process. The more accommodating you are for the customer’s needs, the more your business will be regarded among the best. The more positive experiences you generate, the more chances you have of netting return customers. A wireless credit card terminal will help your business become the powerhouse of profitability it is meant to be.

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