The Sharing Economy Can Make You Money

Taxation of this Sharing Economy:

The Internet, along with its rising social media, has created some very new opportunities for people to earn extra cash. This ‘sharing economy’ theme is defined as this – Putting up some unused resource either for sale or for rent (like a skill, parked vehicle, or empty room). This might seem a bit minor at first, but according to one statistic, this sharing economy actually represents as much as a $110 Billion dollar market.

One community marketplace for finding or listing or booking lodging all over the world, is Airbnb. This is done on the Internet and by mobile phones. They carry more than 500,000 listings for 33,000 cities, in 192 countries worldwide.

The Benefits:

If a taxpayer rents out a property for less than 15 days a year, they don’t have to report that income or the expenses on their tax returns. This enables them to rent out property for short periods of time with NO TAX liabilities. In order to qualify for this exception, all you have to do is use your home personally for over 14 days, or for 10% of the overall number of days, that you rented it out to other people for a fair price.

Another Investment Possibility: Prosper and LendingClub

If you are not someone with a spare bedroom or car that you can share, but you have available cash sitting around, you can make some money this way. Peer to peer lending through sites like Prosper or LendingClub gives you the opportunity to earn some extra cash. They allow individuals to either lend or borrow money, with a certain degree of anonymity, using interest rates that are credit score based. Risk levels are also factored in. Both of these sites will allow investors to lend out their money in increments as low as $25.

Create Your Post-College Budget In 6 Easy Steps

Establish A Post-College Budget In Just 6 Steps

Congratulations on having earned your diploma and on having received a job offer. This time of life is guaranteed to be exciting.

As you begin planning your next moves, it is vital to have a budget. How do you create a post-college budget? Following are several things that I discovered after having graduated and started my first adult job.

Consider Your Monthly Income

Investment
Investment (Photo credit: LendingMemo)

You might have an awesome starting salary, but you should not use this figure to write out your budget. Determine how much you’re going to be bringing in after taxes every month instead. Remember that federal taxes, social security and Medicare are all going to be deducted from your check.

Employees are going to have to pay 6.2% of their wage earnings, up to minimum wage. A tax rate of 1.45% is paid for Medicare. If you are self-employed, however, these rates are going to be double.

Next, figure your federal income tax rate according to your projected earnings. You will be surprised by how much is going to be deducted from your check.

Think About Retirement
Decide how much you are going to invest in your 401k. Will your employer be matching your 401k? Use this match to your benefit as it is included in your compensation. Invest the minimum in order to receive this match.

If you are able to, make an immediate effort to max out your 401k. Should you invest with pre-tax money, this is going to lower the rate for your federal income tax at the year’s end. Always use low-cost funds to invest.
H&R Block gives amazing tips for investing.

Take Advantage of Pre-Tax Dollars

Use a Health Savings Account or a Flexible Savings Account to save pre-tax dollars. Do you have forthcoming medical expenses that you can cover with pre-tax money? Braces, contacts, glasses, doctor visits and prescriptions are things that you can use this money for. These savings are automatic.

Wisely Choose Your Housing
It is very easy to move into a luxury apartment after graduating. This is what I did. In retrospect, I wish I chose an apartment that was more affordable.

Housing advice varies. Some people say that you should spend no more than 30% of your earnings for a rental or 28% for your mortgage.

List Your Monthly Expenses
List all of the bills that you need to pay each month including sewage, water, rent, Internet, electricity, groceries, cable, car insurance, gym fees, debt payments, renter’s insurance, cell phone services, etc. You will have to allocate you monthly earnings for these expenses. Budgets are used to track and manage this spending.

Save Money!
Put aside monies to create an emergency fund. You never know when car maintenance issues and other expenses will arise.

You can also invest in a traditional IRA or ROTH to take your savings plan a bit further.

Creating a solid financial house early in life will assure you of a comfortable financial future.

Tips on Doing Your Own Taxes

If you would like to do your own taxes, you will be happy to know that the process is actually simpler than most people think. Paying tax accountants to prepare your taxes may not be the best option especially if your finances aren’t complicated. To do your own taxes, you will need three things; accurate records of your annual income, some basic knowledge of the country’s tax code, and adequate time to work on your returns. The following is a step-to-step guide on doing your own taxes. If you have any outstanding questions, make sure to post your question here.

Income Tax Forms
Income Tax Forms (Photo credit: Manchester Library)

Tax Filing Tips
1
Keep all your receipts for the year in an organized manner. Ideally, you should have a binder or a dedicated filing system for keeping all your tax-related documents. When it comes to doing your taxes, having everything neatly organized can be very helpful.

2
Go over your expenses and decide whether to itemize or claim the standard deduction. You can do the calculations on your own and use the higher amount. You may want to consider taking the standard deduction if you do not have high medical costs, or if you don’t pay real estate taxes or a high mortgage interest rate.

3
There are many tax forms, but the 1040 is the most popular. You will need to attach the W-2 form from your employer to show your annual income. If you have done some freelance work outside your regular working hours, you can declare it under business income if it exceeds $400.

4
For accuracy and simplicity, consider filing online or using a tax software. For instance, you can use free software like TurboTax and TaxAct online. The USAA, as well as many other banks, offers eFile services free of charge. Therefore, you may want to check with your bank first to see if this service is offered.

5
When filing your taxes, all you need to do is enter your personal details, annual income, tax credits and deductions into the appropriate tax forms or software. You can choose to send the W-2 form together with other forms, or enter the information in the corresponding boxes when eFiling. Tax forms usually have instructions to guide users on how to add and subtract different entries as required. Be sure to use a calculator for accuracy.

6
After submitting your tax returns electronically or through mail, you will need to enter the details of your bank account for withdrawal or direct deposit. While you can simply write a check to the IRS, this is not a popular option. After filing, you will receive an email from the IRS confirming receipt of returns.

Warnings and Tips

If your finances are complicated, be sure to consult with tax accountants.

Be sure to watch out for red flags because they can make your tax returns more likely to be selected for auditing.

Income Tax Considerations And Changes

Politicians across the country debate about ways to fund worthwhile programs, and the new mayor of New York City has received considerable attention regarding his proposed agenda. Mayor de Blasio has outlined a progressive agenda aimed at funding afterschool and early education programs, and his approach pushes for higher tax rates for wealthy individuals. You may have a lot of tax questions regardless of your income level, but using Turbo Tax 2013 may help you make sense of current and future tax scenarios.

Bill de Blasio
Bill de Blasio (Photo credit: Kevdiaphoto)

Mayor de Blasio would like to impose a tax increase on residents who report an excess of $500,000 in taxable income, and he wants this tax increase to be in effect for five years. Taxes 2013 and beyond may be affected by such a measure, and the rate would move from 3.88% to 4.41% under the de Blasio proposal. New York city resident tax rates have been as high as 4.46% under previous administrations, and the additional funds were intended for education and crime prevention.

A little over one percent of New York city residents would be affected, and the additional tax revenue raised would be approximately $500 million annually. This is in line with the goal of establishing continuous funding for education programs, and having this additional revenue may give Mayor de Blasio time to establish other funding sources once the higher tax rate has expired. Any discussion about proposed tax rate changes can lead to numerous questions, but Turbo Tax 2013 may help you find good ways to save at tax time.

Important Dates For Filing Your Tax Return Forms

Important Dates For Filing Your 2013 Tax Return Forms

As the year comes to an end, it is important to start thinking about filing your 2013 taxes. While it is true that taxes are not due on the first of the year, it is still important to understand the important dates on the IRS calendar for 2014. There are a few dates you should know.

January

On the 15th all estimated taxes for the last quarter of 2013 are due. Also the 31st is the deadline for employers to send out tax information. This is also the deadline to file your 2013 tax return forms without penalty if you did not pay your taxes for the previous year.

March

The 17th is the date when corporations must file their taxes by.

April

The 15th is recognized as tax day for individuals and partnerships.

June 16th

If you got an extension on your individual tax return, then this is the date it is due. This only applies to military personnel and people traveling abroad.

September

The 15th is the deadline for business extensions on tax returns to be filed.

October 15th

This is the due date for individuals who were granted a 6 month extension on their tax returns.

Keep in mind that these are only dates that are specifically related to fling your 2013 tax return forms. There will be other dates you will want to keep in mind with your taxes and for these you can turn to the IRS website. Here you will find all the information you need as well as great resources for ensuring you pay your taxes correctly.