How Accountants Can Help You in Your Personal Life
Accounting & Your Personal Life
Though accounting may seem like it’s exclusively for accountants, the reality is that accounting can be useful for many different types of people. Accounting can even be helpful in your personal life. According to reputable data, roughly 4 out of 10 Americans live paycheck to paycheck. This means that there is a sizable percentage of the population which struggles with financial literacy and can benefit from some knowledge of accounting principles.
Learning even the most basic of principles can help you not only manage your money more efficiently but can also help you see when you are spending money the wrong way.
Cultural Shifting
When many of us were growing up, it was a common practice to carry a checkbook and balance it as you spent money. In today’s society, people are writing checks less and less frequently and are now commonly having to balance checkbooks on the go. That is, people are balancing checkbooks on the go in cases where they even have checkbooks at all; it’s quite commonplace these days for people to manage their finances without a physical checkbook at all.
Electronic Banking
Many people now use alternative methods such as online bill payments, automatic monthly withdrawal, and debit cards for purchases and for cash withdrawals. Electronic banking has made it harder to keep your eyes on your finances, and this makes an accountant even more important.
Counting the Ways
Curious to know what other ways an accountant can help you personally? Here are a few:
- When you’re about to start a new job
- After you Get Married
- After You Have a Baby
- Right Before Tax Time
In what other ways do you think it’s valuable to have an accountant? Leave your comments below.
Image credit: Jenni C
Four Taxpayer Friendly Cities
Deciding on your future residence can be affected by a range of factors including local tax rates. Local tax rates and personal income tax traditionally are the main ingredients in determining one’s residence.
Tampa, Florida
The great sunshine state of Florida collects a 6% sales tax and absolutely no income tax. This combination makes Tampa’s taxes lower than any other major city in Florida.
Fargo, North Dakota
Fargo is the perfect environment for families with its very low tax rate. Both city and state don’t collect a large amount of the taxpayer’s total tax gains. The majority of North Dakota’s tax revenue comes from oil and gas fees.
Cheyenne, Wyoming
Cheyenne has one of the lowest tax rates in the United Sates. Small families earning a low income would have had approximately a 9.7% tax rate in the last few years.
Anchorage, Alaska
Anchorage is the holy grail of low tax living locations. Anchorage, Alaska is the one of the only places in the United States to have both a zero income tax and sales tax. The state has always been known for its taxpayer friendly policies and even provides a dividend for those that live in the area. An annual payment of up to $2,000 is paid to all residence that can withstand the cold each year.
Conclusion
Choosing a location to live with your family can be a tough decision when considering the environment, your occupations, and future plans for living. Incorporating the location’s taxable rates is an important factor to consider.
Image credit: Tom
Bad News for Inside Traders
The Securities of Exchange Commission (SEC) and the US Supreme Court have been cracking down on a stock market trend called “insider trading.” A number of regulations have been passed to combat this trend. What exactly do these regulations mean for the future of the stock market?
What is Inside Trading?
Inside (or insider) trading refers to the process of trading stocks while possessing valuable non-public information about the corporate entities involved. An insider is legally allowed to trade shares of the firm as long as these transactions are properly registered.
Is Insider Trading Legal?
Although there are legal versions of insider trading, the more notorious version is the illegal use of information for profit. Inside trading can be done by anyone who knows information which is not publically disclosed; this includes company executives, employees, and anyone within their network.
SEC Regulations
The SEC has placed additional regulations on insider trading, such as the “Fair Disclosure” act. This particular act requires that if a company intentionally releases sensitive material to one person, it must simultaneously disclose that information to the public. This includes cases of unintentional disclosure.
Judicial Involvement
In 2014, the US ruled that in order for a “tippee” to be guilty of insider trading, they must be aware that the information was private, and was released for personal benefit. A “tippee” is a person who has been the recipient of insider information.
Closing Thoughts
With the increase in rules and regulations, the SEC and the Supreme Court have been cracking down on illegal forms of insider trading. Illegal trading has made it more difficult for those who inside trade legally as they must be aware of (and comply with) new regulations.
Image credit: Wagner T. Cassimiro
Why Do Illegal Immigrants Steal Social Security Numbers for Taxes?
Illegal immigrants often obtain the social security numbers of the deceased in order to create an appearance of legality. One of the biggest problems surrounding this matter is that the IRS really isn’t doing anything about it. The IRS has stated that it is not actively making corrections to current policy reflecting this issue.
Obtaining Employment
Immigrants need to work to support their families just like everyone else. Sometimes, however, they go about obtaining proper documentation in an improper fashion. It is creating a false identity, and in most cases, the name and profile of that deceased person isn’t even a close comparison. Even so, oftentimes this false identity is sufficient for them to obtain some type of employment in the U.S.
Obtaining Housing
In order to rent or purchase property, you have to show that you can legally reside in the United States. Questions on applications clearly ask if the applicant can legally live in the U.S. and if proper documentation is available. The thing here is, most rental agencies do not check thoroughly into the social security number supplied by the applicant.
Obtaining Benefits
Even when a social security number does not match the number on the photo ID of an immigrant, they can still obtain state-paid benefits like food stamps and healthcare coverage. Some programs, city-funded, also require proper documentation.
Bottom Line
Many agencies do not double check numbers and often bypass incorrect matching notifications. For these reasons it seems likely that the issue may never be solved. If the government and IRS say that they ignore notifications of mismatches, who’s to say that other institutions don’t do the same thing? What many don’t realize is that this will create a much larger issue in the future as Social Security claims may attempt to be made from those invalid numbers.
Image credit: DGDA RD Congo
The Debate about Taxes on Tampons and Diapers
Tampons and diapers are taxed at local sales tax rates. Several countries, including Canada and the United Kingdom, have stopped taxing tampon and diaper purchases. Many lawmakers and representatives wish to see the same happen in the U.S.
Tampon Tax
Arguments regarding feminine hygiene products being a necessity, just like food, have stemmed the discussions of stopping the taxing of these products. The trouble here is that each state would have to adopt new systems where tampons would be treated as non-taxable items.
Many argue that women are being taxed on something that is out of their control, something which occurs naturally.
Diaper Tax
Some states in the U.S. have already adopted legislation which does not tax disposable diapers and incontinence supplies. As with tampons, this is something which is an unavoidable purchase and necessary at different stages in life. Some argue that taxes are necessary since diapers are not all created to be 100-percent biodegradable.
Controversy on Taxing Essentials
The taxing of essential items, such as hygiene products, toilet paper and diapers has sparked a lot of controversy. Many civilians and lawmakers believe that these items should be exempt from sales tax since they are basic necessities.
Some argue that other options are available for purchase, such as cloth diapers. However, there are no substitutions for tampons and sanitary napkins. These items, regardless, are still necessities and should not be taxed. Some states have already done away with taxing items like toilet paper and some hygiene products. Petitions for local legislatures to review are becoming more frequent around the country.
Image credit: Ron McLinden
Hot Tax Issues Making News in 2015
Tax always makes the news, and that’s no surprise considering how much we have to pay on an annual basis. However, some tax issues have become hot stuff. We are going to go through the main tax issues which had us all collectively shaking our heads throughout 2015.
Tax Extenders
Many tax breaks expired at the end of 2014. Senators tabled a bill to have many of these tax breaks extended. However, right now, we have reached an impasse and nothing has happened. It means these tax breaks are in limbo and we can no longer use them.
Internet Tax Freedom Act
It’s been illegal to tax access to the Internet since the close of last century. However, this isn’t a law. It’s a moratorium. We’ve recently seen it extended again, but what made news was the postponing of a bill that would make this state of affairs permanent.
While it passed the House, we have seen no additional movement on this issue.
The Highway Bill
The Highway Trust Fund, which is responsible for managing the nation’s roads, has been losing money for years. This year a multi-year extension was signed, but Congress refused to approve it. Instead, they demanded changes, such as allowing the US government to revoke your passport if you don’t pay your taxes.
Conclusion
These top three tax issues made the news this past year. Expect them to resurface again because they have yet to be fully resolved. Add in the chaos of the Presidential election and you have a lot to keep an eye on.
Image credit: Binuri Ranasinghe
Fortune 500 Companies Which Didn’t Pay Federal Taxes in 2014
Fortune 500 companies are the cream of the crop in the US. And yet so many of them do not pay any amount of taxes. They all had an income, but through creative accounting, they managed to get away with paying nothing at all, much to the outrage of the average person.
Let’s take a look at some of the main offenders.
Ryder
Ryder used accelerated depreciation to pay nothing in 2014. This tax break lets companies to write off capital investments. The key is they can write them off at a faster rate than they depreciate, so their tax rates literally plunged overnight.
Priceline
Priceline relied on a single tax break to pay nothing. They wrote off the value of their executive stock options. They zeroed out their tax liability, and they repeated the trick in the three years previously. It can offset up to $1.2 billion going forward.
Mattel
Mattel is the famous company involved in video games and in action figures. Over the last five years, they have used a similar strategy as Priceline to get $140 million in tax breaks in the last five years.
Qualcomm
Research and development comes with massive tax breaks. This company has managed to write off $290 million by investing it in itself.
General Electric
GE used active financing as a tax break to remove their US income tax entirely. This break enables multinational financial companies to avoid paying income taxes to all governments, as long as it relates to their international financing efforts.
Image credit: Dean Hochman
Worst States to Live in Because of Taxes
It is wrong to think that we are all taxed equally in the US because the IRS is an arm of the Federal government. Every state levies its own taxes, such as the much-maligned sales tax. When it comes to taxation, some states are clearly better than others.
Below is a list of states which can be considered among the least tax friendly.
- California
It is no surprise to see the Golden State make this list. California has long hammered its taxpayers with things like an annual vehicle duty of 0.7%, which came in just last year. Residents pay the highest state income tax rates. In addition, capitals gains are taxed as regular income.
Sales tax is also the highest in the county at 7.5%.
- Connecticut
The Constitution State making this list probably shocked you, but it shouldn’t. It reaches this list for one reason: the one-two combination punch it hits its residents with. The property taxes are the 4th highest in the US, and taxes on gas are the 5th highest in the US.
- New Jersey
The Garden State is a nightmare for homeowners because of the property taxes. The Tax Foundation says that these taxes are the highest in the US by a substantial margin. The median property tax on the state’s median home value is $7,331.
The sales tax is also 7%, although there are a considerable number of exemptions.
- Hawaii
The Aloha State has free sunshine for all. It may be paradise, but it comes with the 2nd highest income tax in the country. Another thing you have to remember is that everything is fair game when it comes to tax. There are almost no exemptions here.
Of course, there are advantages to living in all of these states. It really depends on where your income comes from and what you want to do with your life if you want to determine whether a move to these states is a good one for you.
Image credit: AlexDraco
Three States Where Taxes are Going Up
If you live in a state where you have to pay taxes now is the time to check the state tax rate. Today, we are listing a few states where taxes are going up. Check to see if yours is on the list.
Connecticut
Yachts and luxury items are going up to 7.75%. Additionally, if you were purchasing clothing and shoes under $50 for the tax exemption, think again because the 6.35% sales tax applies to them now as well. Lastly, cigarettes have increased from $3.40 to $3.65.
Kansas
Kansas has a new tax rate of 6.5%, which means you are going to pay more on everything that you purchase now in the state so they can close up the $400 million budget deficit. Hopefully, you enjoyed the lowest tax cut ever a few years ago because now the state is determined to get its budget back on track. Kansas is now ranking in as the state with the eighth highest sales tax in the country and they increased the tax on cigarettes to $1.29 per pack too.
Nevada
What happens in Vegas definitely stays in Vegas ― this includes the additional money you’ll be spending on account of Nevada’s increased tax rates. When riding in a taxi you will see a 3% excise tax on the fares (yes, Uber is included) and cigarette tax is now at $1.80. When you are out for entertainment you will be taxed at a 9% ticket tax rate and the sales tax has been boosted by 0.35%.
Image credit: Mot the barber
NPR’s Social Media Experiment
Huddleston Tax CPAs is an accounting firm in Bellevue, Redmond and throughout the greater Seattle area.
This is Lauren Katz: https://twitter.com/laur_katz. She works for NPR and it was her idea to see what would happen if NPR “swapped humans for robots” late last month.
Katz’s idea came from manually tweeting out select stories from NPR’s RSS feed at night after they’d already been tweeted by the automatons. Apparently, people pick on the human touch and she noticed increased engagement with her manual tweets. This positive reception convinced her that livetweeting NPR’s entire tweeter feed for 5 days would be a good idea.
“During the five days of manual updating, there were 142,219 visits to NPR’s website from @nprnews tweets — a 45 percent increase from the average (98,213) of the five weeks leading up to the experiment … Links tweeted by @nprnews were clicked on nearly 100,000 more times than links shared automatically the week before, information from its bit.ly account revealed. And the account gained 5,010 followers — about 14 percent more than the week before.”
Those are amazing numbers … and certainly a great PR stunt … which obviously you can’t rule out as a factor in the spike of followers and retweets, but a 45% increase? That’s huge, and more importantly it’s entirely organic and sustainable. Those followers, after all, were picked up fair and square–with engaging content.
There were some drawbacks, of course … Primarily, the drain of livetweeting for a national news organization “every eight to 10 minutes.” Katz said:”…I found it really hard to write human tweets and keep up with everything else I was doing. I did it, and we were there all week, but it takes more manpower if we want to continue it.”
The real question then is how practical is it to continue with livetweets? What do you think? Leave us a comment in the comment section …
If you enjoyed this article, why not follow us on Twitter and friend us on Facebook while you’re at it? You can always expect interesting, engaging content on our blogs geared towards educating our clients and contributing to our online community.
Socialize with us!
-
Follow BizX Online:
