Tag: Video


New Financial Help Coming From Feds

Sanjiv Gupta CPA - 8 years ago
Although Federal Reserve has been thinking about introducing some new stimulus to help deal with the financial pressure it is still debating whether to implement it. The reason for this hesitation stems from the average interest rate being 3.5% on a 30-year-old mortgage. While these rates are still above zero making a lot of officials believe that economic growth is possible by lowering these rates but at the same time these rates are at an all-time low triggering the doubt of how long these rates can sustain without damaging the normal activities of the financial market.It is being concluded by the fed officials that the economy is not developed enough to reduce the increasing levels of unemployment and that extra action is needed to help the economy bounce up. However, the federal officials are divided among themselves on whether these additional actions will prove beneficial or will put more pressure on an already stressed economy.Many are concerned about the effectiveness of the tools of the feds. It is under speculation that if the Fed pulls out assets in circulation, it can lead to major market downsize. Many are also skeptical about the feds reducing the interest rates as there is also a possibility that they go back up creating more pressure on the financial stability of the market. The federal decision-maker Brenanke understands the risk of implementing these tools and therefore would not take any decision unless the majority of the officials agree to it.The feds have already taken a number of actions to stabilize the weak economy. They have reduced the borrowing costs for businesses and customers. As a result the interest rates on short term loans are almost zero and will continue to be so till 2014. They have acquired 3 trillion mortgage-backed securities and treasury securities. The acquiring of these securities has resulted in the lowering of the supply of assets which in turn has resulted into the lowering of the interest rates. It has also pushed the investors to accept a lower rate of return as the scarcity of assets has led to a rise in price. The result of the implementation of these policies coupled with a weak economy has resulted into lower demands for loans and has pushed the borrowing cost to lower levels. The feds have also given a boost to the stock market and controlled the value of exports by regulating the value of the dollar.The benefits of these lower rates have been reaped by both the homeowners who can buy better homes and also the companies that can refinance their budget.

Single Member LLC’s gets Charitable Contribution Deduction

Sanjiv Gupta CPA - 8 years ago
Before getting into the details of Single and dual member LLC, one must be sure about the facts that constitute LLC. The Limited Liability Companies or enterprise has the unique capability of blending corporate elements and partnership structures whereby one can reap rich profits. In this form, the company is legal where both the partners enjoy limited liability. The prior motive of LLC’s may not be entirely profit-oriented, it may be a partnership for other social causes as well.Based on this there was a recent announcement from the IRS that any contribution to a national LLC which is totally owned and managed by an IRC organization shall be treated like any other that has been made in the name of charity. There is a condition though, that the LLC is not liable for taxation as any other corporation.The IRS although had been earlier provided with guidance to conduct both public charities and private foundations in case of tax treatment for operating through single-member LLC. The release of a Notice 2012 – 52 which came to the fore only after 31st July 2012 acted as the initial guide for both the corporate and individual contributors which stood tantamount to the deductibility of various contributions. If left unaddressed or not the treatment of tax to an individual member, or “disregarded entity” these limited liability companies are organized in a place of the foreign jurisdiction. Limited Liability Company AdvantagesThe advantages of a limited liability company are  as followsThey have the flexibility to choose and get elected to be taxed as a single owner, partnership firm, hence a great deal of flexibility is enjoyed by an LLC Member of an LLC are liable to enjoy the distributive share of profit and loss, income or expenditure and so there is a sense of moderation in the practices of an LLC.Members are greatly protected compared to other firms as per the state corporate laws.There is hardly much paperwork or recordkeeping one has to get involved in LLC.Only one person can also set up an LLC.The advantages are aplenty and one only needs to arm oneself with full knowledge to deal with such matters intelligently and successfully.

Solo 401k Plan Explained for Self Employed

Sanjiv Gupta CPA - 8 years ago
Last week I talked about the 401K plan and how shared an example explaining how your 401k plan contribution can earn you a 25% return on investment.Today, I want to continue with that conversation and how to explain how an independent contractor or self-employed person can save even more taxes by investing in their solo 401k plan.In today’s video, I am going to explain the following.A.) How much money can you contribute to your solo 401k plan?B.) What are some of the limitations with a solo 401k plan?C.) Where to open a solo 401k plan?D.) How much does it cost to open a 401k plan?E.) What kind of tax benefit you can get by investing in your 401k plan?We have about 2 months before the end of this tax year.  Self-employed personals can contribute up to $50,000 to their solo 401k plan and reduce their tax liability accordingly.There are fees associated with the solo 401k plan, but you can borrow funds from your 401k to help you with cash flow and you can pay the money back within 5 years.  You can also move the 401k plan to another company in the future.  In the video, I will tell you how you can open a solo 401k plan for free.A self-employed person with income of $75,000 will have to pay about $7500 in federal income tax.  However, this person can contribute up to  $30,941 to the solo 401k plan and reduce the federal income tax to only $2,304. Savings of over $5000.Moreover, a contribution to a 401k plan can be made as profit sharing.  In this case,  Up to $13,941 can be contributed as profit share further reducing the tax to about $600.In other words, you can earn up to $75,000 and pay almost no federal income tax if you contribute fully to your 401k plan and take advantage of a few other deductions. Have you checked your retirement plan this year?This is a good time to review your retirement account for the year 2012.  Single tax filers can contribute up to $17,000  to their 401k retirement plan.  Contributing to your 401k can significantly reduce your tax liability for the year 2012.1099 Contractors and Small Business Owners can also reduce their tax liability by taking advantage of various retirement plans.  You still have time to set up a proper retirement plan for this year and save thousands of dollars in taxes.Want to come in for a consultation to discuss your retirement plan?  Please make sure to bring your retirement statement and current year income statement.Free Solo 401k plan for self-employedWatch this video to learn how you can deduct up to $50,000 this year.
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