Archive for December, 2009
Question: can selling stuff on the internet be considered taxable?
can selling stuff through websites, blogs, or ebay be taxable? please an individual answer to each one
Answer: For income tax purposes, the IRS looks at how you acquired the item and how you are selling it.
Items purchased for resale would be a business or a hobby and tax would be paid on the profit.
Personal use items sold at a gain are taxable. Personal use items sold at a loss are not deductible.
What counts as self-employed?
If you make all or part of your living by working for yourself – not through a salary or commission from an employer – then you’re considered self-employed.
Question: Should I cash in my whole life insurance policy?
I purchased a whole life insurance policy about ten years ago. I know, bad decision. Now I have acquired some debt from a divorce and if I cash in the policy minus any taxes and/or fees I can wipe this debt out. I still have an SGLI policy currently for 200K and can increase this after I close the other policy. Is this a good decision?
Answer: What makes you think a whole life policy is automatically a bad decision? Becuase a TV talk show host says so? A couple of books and TV shows have fired out some biased and very general information whole life insurance that have completely misguided people into thinking whole life insurance is a bad thing all together. If whole life isurance is bad, why do so many HUGE companies have billions of dollars worth of whole life insurance? Read "No Salesman Will Call" by Lyle Manery. It takes a critical analisys of the Buy Term and Invest the Rest strategy and and shows several flaws and misinformation from over 10 books and authors. Most people don't understand how a whole life insurance product actually works and the fact that it has nothing to do with an "investment portion", which causes the premiums to be higher. It's the fact that you pay a little more now, so the cost doesn't skyrocket when you are older (like term insurance does). Term insurances skyrocket when you get older and can cost around $500 a month or more (not even exaggerating!), where as your whole life policy will cost you the same $50 or whatever for your entire life.
Term and whole life have 2 seperate purposes and anyone that suggests strictly one over the other is giving you misinformed advice. Plain and simple.
Anyway, I would look into all your options prior to cancelling your insurance policy. Perhaps creating a plan to pay it back?
Have you inquired about a policy loan? Policy loans don't have to be paid back on any specific terms and if your policy collects dividends, you can use those each year to pay off the loan.
Typically if you've been paying into a whole life policy for that long it's not worth cashing in. If the cash value is more than the face amount it's worth while to cash in, or if you've only been paying in for a couple years and the 'loss' of all the premiums you paid is very small, it would be worth while.
I just personally think selling an asset that increases in value over time is not the best way to deal with a debt. If you have an asset that is useless to you sell that, not something that is of value. Paying off debts are very important though, so do what you need to do.
Keep in mind, that SGLI is a group term insurnace and it will eventually expire at a certain point when you may need it. Also with a group insurance you have no control over what happens with it. The group administrator can raise rates or discontinue coverage at any time without even notifying you in advance. I woulld just hate to see you at age 65 having to convert your insurance to whole life and paying the premiums of a whole life policy based on a 65 year old, when you have one that would be far cheaper than that right now.
I would contact an insurance agent and have them review your situation taking a look at the details of your whole life policy and such and having them help you with your decision. The policy you currently have might have some features that are no longer offered that might be worth keeping.
Questions and Answers on Life Insurance: The Life Insurance Toolbook
Questions and Answers on Life Insurance is an extremely useful and one of a kind resource for anyone looking for a simple way to understand life insurance. It covers all the basics and the advanced information that you need to know. And all this in a format where can go directly to the information you need without having to sort through information you're not looking for. Author Tony Steuer brings...
The EUREKONOMICS(TM) Dazzling Dozen: The Overlooked and Under Reported Benefits of Whole Life Insurance
EUREKa! ecONOMICS - EUREKONOMICS™ The power, flexibility, and versatility of participating whole life insurance has served and saved the personal economies American families for over one hundred-fifty years. Whether you are a single person, member of a family, matriarch, patriarch, owner of a business, executive at a large company, or an insurance and financial advisor— you will benefit from ...
Taxed ... to death: clients need to be aware of the links between state and federal estate taxes.(Life: Selling Insight)(Law overview): An article from: Best's Review
This digital document is an article from Best's Review, published by A.M. Best Company, Inc. on February 1, 2010. The length of the article is 550 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Taxed ... to death: clients need to ...
Matt Osborne: Cadillac Plans, Mandates, and the Proletariat
Perhaps my worst job ever was the better part of two years at a pharmacy benefits call center. Among the calls I remember was a...
Are life insurance policy proceeds always tax free?
Question: How I calculate the FIT and FICA for disability of the employee?
Spike Shoe Company employees are covered by a short-term disability plan through a private insurance carrier. Employee Sadie Smith has a $15.00 payroll deduction and Spike Shoe Company pays the remaining $20.00 of the insurance premium. In Sadie's first five months of disability she received $850.00 in benefits. Calculate the amount of FIT and FICA taxable wages for the employee
Answer: Maybe you need to go back and read your textbook again. After all, you likely won't have access to the Internet when it comes time to take the test...you'd be better off knowing how to do this yourself!
Richard (RJ) Eskow: Too Old to Rock 'n' Roll, Too Young to Die Ruin Social Security
Don't Fear the Boomers. Despite the scaremongers' attempts to incite generational war, people born between 1946 and 1964 are not going to destroy Social Security. But don't just take my word for it. Ask an actuary.
Question: I owe the IRS $41k in back taxes and a friend has offered to loan me the money. What r tax consequences 4 us?
If he gives me the $41k, will it count FOR ME as taxable income so I can't use the full amount? I'm unemployed so I'm not making any money this year anyway. Plus what are the tax consequences for HIM--if any--for giving me the money? I've heard of "gifting". What is it, and does it apply to my situation?
Answer: Getting a loan is not income but .. a loan!
Usually you have to pay it back with interest.
If your "friend" wants to make it a "bus." loan, then both of your would need to draw up papers specifying that the money he gave you is a loan and that you'll have to pay interest on that amount.
He may want to claim a bad debt expense if you choose to default on that loan in the future but, technically, he'll have to get legal action first before claiming it on a personal bad debt.
He could just "gift" you the money (because he really cares about you and don't want the money back). A gift up to $13,000/per year per person can be made in 2009 and in 2010 without affecting the gift tax exclusion. He could "gift" you $13,000 by 12/31/09 and then "gift" you another $13,000 in Jan. 2010 so at least you have $26,000 to repay your loan.
You can also ask for an Offer In Compromise with the tax agency (IRS or state tax agency) and negotiate on your ability to repay your taxes over a set period of time at a reduced rate but you'll need to prove to them your available net worth!
You should contact a local tax profession to assist you!
The Wall Street Journal Complete Estate-Planning Guidebook
Let’s face it: you can't avoid death or taxes. But you can create an estate plan that will make both a whole lot easier for your loved ones and put you in control of how your assets will get passed to your heirs. Here, Wall Street Journal personal-finance reporter Rachel Emma Silverman walks you step-by-step through the process. Chock-full of clear and solid advice on how to get the most out...
Family-Centered Treatment With Struggling Young Adults: A Clinician's Guide to the Transition From Adolescence to Autonomy
Family-Centered Treatment With Struggling Young Adults is an indispensible guidebook to the unique set of problems and opportunities that families face when young adults are experiencing difficulty pulling anchor and setting sail. Renowned clinician Brad Sachs, PhD, provides both a conceptual framework for understanding the reasons behind the increasing number of young adults who are unable to ach...
U.S. Taxes for Non-Citizens Made Easy!
Income, payroll, gift, estate and exit taxes for the non-US citizen visiting the U.S. for a day, temporarily or indefinitely are very complicated. This easy to read and understand book identifies the tax traps that await the non-U.S. citizen. These traps can be avoided if you know where they are. It is important to learn about them before you come to the US so you can rearrange your assets to m...
Ukraine's leading English-language newspaper since 1995
A new law bans advertisement of tobacco, alcohol, brands for goods and services and other objects of intellectual property, under which tobacco and alcohol are produced, in all printed mass media, apart from special editions.
Cash Gifting Videos, Are The Cash Gifts Taxable?
Question: Pennsylvania tax return-need to attach W2?
When mailing in my Pennsylvania return, am I supposed to attach my W2s and 1099-misc? If yes, should I staple them or use tape?
Do both the W2 and the 1099-misc get attached to the Pennsylvania Tax return if I am mailing it in?
Answer: Just the W2 and it gets stapled on the left side of the form about mid way down the return. Keep the 1009 in case the IRS ever ask for proof.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
BP's payments help, but don't match the loss
BP is wading into compensating Gulf Coast fishermen and businesses affected by the spill.
ReceiveTax Credit? You May Owe Money to the IRS