What Are the Contribution Limits for My SIMPLE IRA?
SIMPLEs allow higher employee deferrals than most retirement accounts. Employees are only able to make salary reduction contributions. As of 2016, they are able to defer up to $12,500 a year, but if an employee is over 50, they may defer an additional $3,000 as a “catch-up” contribution. However, an employee may choose not to contribute anything to their SIMPLE IRA. Employers, on the other hand, are required to make either a dollar-for-dollar matching contribution of 3%, or a non-elective contribution of 2% of the employee’s pay. The 3% match can be reduced to 1% in two out of five years if employees are notified before they make contributions. Continue reading...
Am I Eligible for Social Security Benefits?
Social Security will pay benefits to those who have paid into the system, their beneficiaries in many cases, and also to some disabled individuals who have not paid into the system. In general, Social Security Benefits will only be paid in cases where individuals paid into the system. The exception is Supplemental Security Income (SSI), which is actually paid from the general tax revenue of the government, and not the actual Social Security trust funds, though it is administered by the Social Security Administration. Continue reading...
What is IRS Publication 521 on Moving Expenses?
IRS Link to Publication — Found Here Publication 521 details the methods and requirements for tax deductions related to moving expenses, where the move is necessary to start a new job or maintain a job that requires relocation. The IRS requires that the situation passes tests regarding the distance of the residence to the new job and the time spent at the new job. If an individual moves in order to take a new employment opportunity, he or she may re Moving expenses include travel expenses as well as storage, transportation, and labor costs connected with moving furniture and whatnot. Continue reading...
How Do You Buy Litecoin?
Similar to other cryptocurrencies, litecoin can be purchased through major cryptocurrency exchanges and wallet apps. Many reputable exchanges exist for buying and trading cryptocurrencies, and several of these will allow you to purchase litecoin with credit cards, wire transfers, and bank deposits. There may be issues with buying enough litecoins to suit your fancy if you aren’t willing to verify your identity, or if the exchange simply won’t allow you to exchange for a large balance of litecoin in single transactions. One option that may open more doors is to purchase bitcoin first, and then exchange those for litecoin. Many people search for good ways to buy litecoin or Bitcoin with Paypal, but it is probably more trouble than it’s worth. Paypal has a somewhat over-active reversible charge system, which favors some buyers or sellers over others by default and can be used by bad actors to reverse the payment owed to someone transacting business in cryptocurrencies. Continue reading...
What is the Three Rising Valleys (Bullish) Pattern?
The Three Rising Valleys pattern forms when three minor Lows (1, 3, 5) arranged along an upward sloping trend line. It often appears at the end of a declining trend – an indication that buyers are overtaking sellers, which ultimately pushes the price higher. This type of formation happens when investors shift into buying mode following a consolidation period. Once the price breaks out from the top pattern boundary, day traders and swing traders should trade with an UP trend. Consider buying a pair or a call option at the breakout price level. To identify an exit, compute the target price level by adding the pattern’s height (highest price minus the lowest price within the pattern) to the breakout level (the highest high). When trading, wait for the confirmation move, which is when the price rises above the breakout level. Continue reading...
What is the 'Fixed Assets to Net Worth' Ratio?
The fixed assets to net worth ratio is a calculation intended to measure the solvency of a company. It generally tells the analyst what percentage of a company’s assets are cash vs. fixed assets. To calculate the ratio, you divide net fixed assets into net worth. A fixed assets to net worth ratio greater than 0.75, generally, means that a company has too much of their net worth tied up in assets like equipment, machinery, land, and so on. Continue reading...
What is Accrual Accounting?
Accrual accounting is the counterpart to cash accounting, and the accrual method puts expenses and revenues on the books as soon as they are contractually agreed-upon. Accrual accounting is required by GAAP conventions for all publicly traded companies who have over $5 million in annual revenues. This method is the counterpart to cash accounting, which may be more useful to smaller businesses. In accrual accounting, the expenses and revenues which are agreed upon are written onto the business’s ledger at the current time, regardless of when payment will actually settle on the transaction. When a sale is made or service is performed, the revenue from the activity is documented, even if no cash is received in the current period. Continue reading...
What is Foreign Investment Funds (FIF) tax?
New Zealand and Australia, in particular, have instituted a tax regime for offshore investments that fall into the definition of Foreign Investment Funds (FIFs). FIFs will generally be mutual fund companies that are based overseas, but can also include cash value life insurance underwritten by a foreign company and some stock portfolios from overseas stock exchanges. The US has the PFIC tax, which is a passive foreign investment corporation tax. The PFIC category generally applies to mutual funds or pooled investment companies from foreign countries. Continue reading...
What is residual income?
Residual income is a stream of income that persists from one work project or investment. Residual income is also known as passive income, and is income which comes from an investment of money or work in the past, where minimal or no additional money, work, or maintenance is required. Residual income could come from investments such income-generating real estate, or work completed such as a published book or acting in a commercial. Continue reading...
What are 'non-marginable' securities?
Some securities, such as penny stocks and IPOs, are prohibited from being purchased on margin or for serving as margin for other purchases. Stocks and other securities that are too volatile to serve as margin collateral - or to be purchased on margin - are called Non-marginable Securities. The Federal Reserve Board has defined certain criteria for determining which securities are non-marginable, and brokers often have their own house rules for traders. Continue reading...