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CAN YOU BE SELF-EMPLOYED WITHOUT HAVING A BUSINESS?

The IRS states that if you work odd jobs for money, occasionally sell short stories or have both a day job and a side business, you are considered to be self-employed in the USA.

Even if you occasionally declare a loss, what matters is that you operate your firm with the aim of generating a profit.

Your firm is a sole proprietorship unless you choose to establish a corporation, an LLC, or another sort of business structure.

Schedule C is used to report self-employment income, which is subject to personal income tax.

The difference between a self-employed business owner and a hobbyist

If you run a trade or business for profit, you are a self-employed company owner. If you perform what you do more often for enjoyment than for profit, the IRS contends that you are a hobbyist.

You can decide if what you’re doing is a business or a hobby by using the IRS’s list of requirements.

Think about putting your homemade pies, muffins, and bread up for sale. If you advertise, set up shop at the local farmer’s market, or bargain with local merchants to sell your goods, you are operating a business.

If you only sometimes bake, only when someone asks you to, or only sell your goods at cost, you’re undoubtedly a hobbyist.

The 400-dollar cut-off

In the world of the self-employed business owner, $400 is a major benchmark.

Consider the scenario when you launch a home business while still living with your parents. If your net business income is less than $400 after deducting costs, according to the IRS Small Business Tax Guide, you might not need to file any taxes.

Having a business without forming a company

Without a formal business entity like a partnership, S corporation, or limited liability company, one can be self-employed.

The simplest form of business structure is a sole proprietorship, which has no organizational structure at all.

According to the Small Business Administration, there is no formal need for establishing a sole proprietorship that is equivalent to filing articles of incorporation (SBA). All that is needed is the decision to start a business.

If you’re currently making money singing in local bars, making jewelry at home, or doing the grocery shopping for housebound neighbors, you’re a sole proprietor unless you’ve chosen another legal structure.

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How to Avoid Credit Card Interest?

The main reason that credit cards try to lure you in with welcome bonuses, rewards, and travel perks is to improve your chances of earning interest on your credit card. Credit card interest, also known as APR, or annual percentage, can easily add up to more than late fees and annual fees combined. As a cardholder, it’s in your best interest to avoid credit card interest rates, especially as interest rates rise as the Fed battles inflation throughout the year.

Credit card issuers charge interest on any balance that is not paid in full at the end of your statement cycle. The average credit card interest rate is around $19, according to survey data collected by CNET Bankrate’s partner website.

Though some credit cards feature lower interest rates and others come with a promotional 0% APR period, you can avoid racking up interest charges with any credit card as long as you don’t carry a balance. Here’s a breakdown of how credit card interest works — and how you can avoid it.

How credit card interest works

Interest will be charged on any remaining balance on your credit card after the payment due date. You can multiply the balance by the APR to see how much interest you will owe on that balance over the course of a year.

Let’s say you made a $3,000 emergency purchase on your credit card. To avoid late fees, which can leave a trail on your credit score, you make the required minimum payment. Let’s say – as is the case with many credit cards – the minimum payment is 2% of your balance and the average APR is 18.68%.

In the chart below, we see how making only the minimum payment reduces your chances of reducing your balance over time. By making only the minimum payment each month, the accrued interest on the remaining balance consumes about 75% of your monthly payment.

If you can avoid late fees and credit card interest entirely, the perks and benefits of a credit card are all gravy. Here are the three best ways to avoid credit card interest altogether.

1. Make your credit card payments in full

Every credit card has a “grace period” that lasts for approximately four weeks before interest is applied to your statement balance. Even though you just need to pay the minimum amount due on your credit card account by the due date, your balance and interest fees will be added to the bill you receive the following month. You won’t be assessed interest if you always pay your statement in whole and on time.

A reserve for emergencies might assist you to avoid unintentionally missing, paying late, or leaving payments unfinished. If you have a tendency to forget things, another option is to set up credit card autopay, which will automatically draught your bank account on the due date.

2. Use a 0% APR card

To entice applicants, several credit cards provide promotional 0% APR periods. As long as you make your minimum payments on time, you can make purchases after your card has been accepted for up to 21 months without any interest being charged. This can offer you some extra time to pay off a big purchase, cover an unexpected expense, or move a balance from one credit card to another with a higher interest rate.

The secret to using these cards is to pay off your entire balance before the 0% introductory APR incentive expires; else, interest fees will apply.

3. Use a debit card or cash

If you are used to overspending and want to save yourself from the temptation, you can always use a debit card or cash to transact. Prepaid debit cards prevent you from spending more than the amount in your account. Many banks will issue a debit card with your checking account.

Additionally, there are some secure credit cards that don’t require a credit check, require a security deposit to act as a credit limit and help you build credit. They are similar to debit cards with minor modifications and can be a good intermediary solution. If you miss a payment, some secured credit cards will take the balance directly from your secured deposit, keeping you from overspending.

Some examples include the Chime Credit Builder Visa® credit card and the SuperCash™ card.

Ultimately, whichever path is best for you, it’s increasingly important to avoid credit card interest rates. Make a plan to get more out of your money.

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thefintech.info

Banks return to finance plans for Elon Musk’s $44bn Twitter takeover

Banks have started to send $13bn in cash backing Elon Musk’s takeover of Twitter according to people familiar with the matter, the latest sign the $44bn deal for the social-media company is on track to close by the end of the week after months of twists and turns.

Musk late on 25 October sent a so-called borrowing notice to the banks that agreed to provide him with the debt for the purchase, one of the people said. That kicked off a process that is currently underway by which banks will deposit funds they are on the hook for into an escrow account after hammering out the final details of the debt contracts, the people said.

Once final closing conditions are met, the funds will be made available for Musk to execute the transaction by the 28 October deadline.

It indicates the deal is on track to close after Musk visited Twitter’s San Francisco office on 26 October. “Enter Twitter headquarters – let him in!” Musk tweeted, accompanying a video of him entering Twitter headquarters with a basin of white water.

Twitter informed employees in an internal message that it would hear directly from Musk on October 28, according to an internal memo reviewed by The Wall Street Journal.

The billionaire also changed his Twitter profile description to “Chief Twit” and added his location as “Twitter HQ”.

Grant notices are usually sent three to five days before funds are needed. Under normal circumstances, these documents are part of the usual closing procedures handled by office staff with little or no mention. But after Musk spent months trying to pull out of the deal to buy Twitter before tipping and agreeing to do so earlier this month, Wall Street and Silicon Valley were wary of evidence that he would indeed follow through.

If Musk goes ahead with the deal as current indications suggest, it will end a six-month corporate drama and Twitter will cease trading publicly, with existing shareholders. receive 54.20 USD per share. The outspoken billionaire entrepreneur is expected to steer the influencer platform in a new direction, having come up with ideas to change Twitter, including limiting content censorship and ushering in a new business model.

Most recently, earlier this month, Musk faced Twitter in a Delaware court over the stalled deal. He argued that the company misled him about his activities, including the amount of spam on his platform. Twitter countered that it was looking for an exit after a market downturn left it cold.

Then, in the days leading up to his removal, Musk changed his mind again and offered to close the deal at the original price. The judge presiding over the legal clash adjourned a trial scheduled for October 17 and gave Musk until October 28 to conclude the case.

Prime Minister Kathaleen McCormick has said that if the deal is not closed by that date, the parties should contact her to schedule a hearing for November

Closing the agreement will not be the end. close the story to the banks that have agreed to help fund it, including Morgan Stanley, Bank of America and Barclays. People familiar with the matter said they were more likely to hold onto the debt than sell it to third-party investors, as is customary in such transactions, until the new year or later. These lenders could face losses of more than $500 million if they try to sell Twitter’s debt at current market levels, as many investors worry about a recession, left exposure to new bonds and risky loans.

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thefintech.info

Blockchain Tech for Finances Other Than Crypto

The origins of blockchain technology can be traced to David Chaum, who first proposed the idea in the early 1980s. You might be most familiar with blockchain today as the home of cryptocurrencies like Bitcoin. In an effort to increase transparency, blockchain technology keeps track of all Bitcoin transactions. However, blockchain technology is not just for cryptocurrencies. Because it provides a safe means of completing transactions, blockchain has a wide range of applications in the financial sector today. Let’s look at a few of these applications.

Blockchain Finance Use Cases

#1: International Transactions

The capacity to conduct financial transactions internationally has grown crucial across many businesses as the world grows increasingly economically connected. These issues may be challenging and time-consuming due to bank and credit card regulations. Due to their sensitivity, they also run the danger of fraud and cybercrime. Blockchain technology may help to alleviate certain money-related problems.

#2: Insurance Claims

One of the biggest sectors in America is insurance, which has benefited greatly from blockchain technology. Almost everyone you know is covered by insurance, whether it be for health, auto, life, or another type of property. With so many various types of insurance available, blockchain has applications throughout the sector due to its capacity to increase process security and efficiency.

Blockchain, for instance, tremendously benefits insurance businesses by lowering administrative expenses. Organizing administration with blockchain technology can improve operations and reduce costs because the administration can be time-consuming and expensive. Reduced fraud is among the biggest advantages of blockchain for insurance businesses. Customers will be able to submit a single claim for an occurrence by using smart contracts, saving insurance firms the headache of dealing with bogus claims.

#3: Inheritance Money

Although it is a new concept, people are starting to use blockchain technology for their assets. Inheritance can be a complex concept and many money heirs do not achieve the best results without care and planning. It is common practice to plan for tangible assets like cars and homes, but doing so for cryptocurrencies presents many challenges. Currently, there are no regulations regarding the transmission of cryptocurrencies. After your death, the cryptocurrency you own will not be automatically transferred to your spouse or children. It will stay on the blockchain forever unless someone can access your public or private key. One of the solutions offered by the companies is financial services dedicated to cryptographic inheritance.

Businesses can allow customers to lock their crypto keys among other private keys and make those passwords available to designated people. Once the crypto owner passes, the heirs can initiate a secure process to access the cryptocurrency. For example, a person can give the key to his/her spouse. After the person dies, the spouse can activate the lock and access the inheritance after a certain period of time. If the person is not dead, they can stop the transfer. These blockchain security measures help reduce instances of financial fraud in real estate.

#4: Real Estate

The market for real estate will be worth $370 billion in 2022, making it a significant and complicated sector of the economy. Rent, mortgage payments, and title transfers to new owners are all common real estate transactions. By introducing an additional layer of protection, blockchain can aid in handling a huge volume of financial transactions. By lowering the quantity of paperwork and expediting transfers and other processes, this technology can improve processes.

#5: Musician Royalties

To make their music available, musicians use streaming sites like Bandcamp, Apple Music, and Spotify. The musicians receive royalties when their music is made available on these platforms. Blockchain can help stop music piracy when an artist releases their song solely on one service. Blockchain technology can guarantee that a musician’s music file only exists on their affiliated service, which makes piracy more challenging. By utilizing smart contracts, blockchain technology can help streaming services. They can increase the transparency and security of payments made to artists on their platform using this technique.

Blockchain Becomes Mainstream

Although you may have only ever heard of blockchain as a mechanism to store cryptocurrencies, new applications for this technology are being developed in fields like finance. Companies are beginning to embrace blockchain for international transactions, insurance claims, and real estate because it makes transactions transparent and secure. Even though blockchain is a relatively new idea, as bitcoin investment grows in popularity, people are starting to use it for inheritance.

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How Blockchain Tech Can Build Trust & Transparency In Supply Chain?

Customers in today’s market expect excellent delivery experiences. They aim to improve parcel movement visibility, traceability, transparency, and sustainability. In fact, if their cherished brand falls short of these expectations, customers are willing to switch to alternatives.

It is obvious that a lack of visibility into supply chain operations won’t do. How then, can supply chain executives respond to the growing issue around the lack of transparency and trust in intricate supply chains?

Blockchain is a perfect technology solution for enhancing supply chain traceability, security, transparency, and trust since it is a decentralized, distributed ledger that cannot be altered. Let’s examine how blockchain makes this possible.

Facilitating Operational Excellence

Multiple parties, different locations, and various components are all involved in logistical processes. Engaging with many of these aspects on a regular basis can cause inefficiencies, inaccurate data, and inappropriate integrations across management functions.

With the use of blockchain, the shared network infrastructure may be automated and digitalized, promoting more effective teamwork and communication. Through automation and auditing, it considerably minimizes manual operations and ensures the transparency of export-import procedures. Additionally, it lessens the chance of billing fraud and the duplication of orders. Smart contracts automatically carry out contracts when certain conditions are satisfied, allowing for a quicker, more accurate, and more timely cash reconciliation.

Creating Greater Visibility

Supply chain visibility is one of the most important problems facing the logistics sector. Despite rising global spending (almost $75.5 Bn by 2026) on digital transformation in logistics, only 6% of companies in the industry claim full supply chain visibility, according to a survey. Blockchain also stands out as the best option in this case.

To enable secure, dependable, and verifiable information transmission, blockchain can interact with other technologies including the Internet of Things, smart sensors, process automation, and RFID (Radio Frequency Identification). Additionally, one of the benefits of blockchain is that while some information, like the shipping number, is open to everyone, other data is only accessible dependent on the level of authorization in the supply chain. Therefore, when utilizing blockchain, logistics firms do not need to worry about security.

Facilitating Traceability

Ingredient traceability is a crucial consideration for three out of every four consumers when making a purchase. In fact, close to two-thirds of consumers would transfer brands to a product that offers specific information regarding ingredient lists, such as the precise source and date of manufacturing.

In the end, this is essential to creating a better store-to-shelf trip. Because of the tamper-proof nature of blockchain, data about things like product origins, real-time tracking, visibility into shipment health, and other things are kept confidential.

Enabling Secure Transactions

Transactions in business are prone to fraud, inefficiency, and other inconsistencies. The threat also exists from the collapse of the central banking system and from the manipulation of shipments while they are in transit.

Transactions are more secure, transparent, and verifiable using blockchain. The most recent version of the universal ledger, which is updated by peer-to-peer replication, is distributed across all participants. Additionally, smart contracts are the most reliable records for B2B payments, delivery evidence, localized failures, tax responsibilities, and financial audits across all supply chain participants.

Ensuring Cost Optimisation

The procurement procedure requires a lot of time and resources. Repeated manual negotiations do not, however, ensure fair decisions. Blockchain tracks buy quantities, collects real-time data from partners, and ensures that volume-purchasing benefits are affordable.

The logistics industry benefits greatly from technology. However, in order to benefit from this or any other cutting-edge technology, digitization is a requirement. Innovative solutions for logistics management use the Amazon Quantum Ledger Database as a standalone append-only ledger database.

The use of such cutting-edge technologies can guarantee the highest level of security, traceability, and confidence among logistics stakeholders and open up opportunities that could propel the sector to previously unimaginable heights.

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TOP 4 TAX BENEFITS OF PERSONAL LOANS?

There are a few aspects of personal loans that we all are aware of. They are currently available, versatile, and simple to use. Personal loans, like home loans and business loans, allow you to receive some tax benefits while making your payments.

Are Personal Loans Taxable?

The loan amount you get from a personal loan cannot be regarded as part of your income because personal loans are non-taxable loans. However, there are specific situations when the Income Tax Act provides large tax savings on the interest paid on personal loans for salaried workers and businessmen. Both the loan’s origin and its intended use are taken into account in this.

Tax Benefits of Personal Loans:

  1. Personal Loans for Home Construction & Renovation – if you avail of a personal loan for home improvement, purchase, or renovation, the interest amount is tax deductible. If you own the property and live in the house, you are eligible for up to ₹ 2 lakh from the interest paid towards your loan. The total interest paid on the loan can be deducted from your taxable income if it is a rented house.

  2. Personal Loan for Self-Employed – If you run your own business, you fall under self-employed individuals. Personal loans for self-employed professionals are also eligible for tax exemptions. The interest paid on the personal loan for business is deducted from your business’s gross income, and taxes are imposed on the remaining amount. This way, the interest paid on your loan reduces your total tax liability.

  3. Personal Loan for the Purchase of an Asset – A personal loan for the purchase of an asset such as gold, bonds, shares, etc., can also offer some tax benefits on personal loan interest. However, in the year of the purchase, you cannot avail yourself of any tax benefits. In the year of selling the asset, you can add the interest amount to the acquisition cost and get tax benefits on this purchase. The interest paid on the personal loan is reduced from capital gains earned from the asset’s sale, and the tax is calculated on the remaining amount. Thereby reducing your tax liability.

  4. Personal Loan Tax Exemptions – Under some circumstances, there are personal loan tax exemptions for salaried people and people in business. The effect of personal loans on your tax liability is lesser than that of taking a home loan or student loan. But, keeping yourself aware can help you get substantial tax benefits even through a personal loan. Here’s a look at the summary of personal loan tax exemptions –

End Use of Loan Amount

Tax treatment of Interest Expenses

Implications for the Borrower

Exemption Limit

For Business

The interest expense is deducted from the business profits before calculating the tax

Tax liability gets reduced as per applicable marginal tax rates

No limit

For the Construction / Renovation of a Residential Property

Allowed as a deduction from the Annual Net Value of the residential property.

Tax liability is reduced as per the applicable marginal tax rate

Up to ₹2,00,000

For the Purchase of Any Other Asset

Not allowed in the year of the purchase. Interest expenses are added to the acquisition cost when selling the asset. Thus, reducing capital gains.

Tax liability is reduced in the year of asset sale as per the applicable rate of capital gains tax. (Short term or long-term)

No Limit

A personal loan might help you get the money you need right now. Some people use personal loans to pay off existing debt, while others use them to fund major purchases like weddings, trips abroad, or large purchases. Personal loans, despite having high-interest rates, can support you in trying times by allowing you to repair your home or pay off debt.

Even though there are fewer tax advantages associated with personal loans than with home loans or student loans, a little bit of knowledge can go a long way. Under the three conditions outlined above, the interest paid on the personal loan may lower your taxable income or be counted as an expense for tax deductions.

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