Bank finance articles and tips

The current economic crunch is pushing many to look for ways to augment their income and one of the options seriously considered by many of them is to buy a business that already exist. Buying an existing business is better than starting a business from scratch. You have instant cash flow from day one coming from its existing customers. Besides, the foundations of an existing business have already been established and there is no more need for the new owner to go through the rigmarole of the groundwork involved with starting up a new business.

However, there are various drawbacks that one must seriously consider before deciding to buy a business that already exists.

Do you own an S Corporation and are wondering if you must make federal quarterly estimated tax payments? Read on to find out.

Generally speaking, an S Corporation usually does not incur any federal income tax. This is because it is what is called a "pass-through entity" for tax purposes. In other words, even though corporate profit does get reported on the federal corporate tax return, this return (Form 1120S) is really for information purposes only. Rather than have the S Corporation pay the income tax on its profits, those profits are passed on to the shareholders via a form called Schedule K-1. The shareholders must then report the corporate profits from Schedule K-1 on their personal tax returns, and that's where any income tax is reported and paid.

Sharing has a whole new meaning for anyone conducting a tax preparer job in California for same-sex couples. The recognition of domestic partnerships - when combined with community property laws - results in equal sharing of all income. Therefore, each individual shares in half the income regardless of who earned it.

A California tax preparer is familiar with how this situation affects state and federal reporting of income. The community property states of Nevada and Washington have created the same circumstances with their domestic partnership laws.

The income tax preparation for state returns must divide the income equally according to the community property laws of the state. But federal income tax returns still report only separately earned income. The individuals in these cases use a filing status of single since that's the only option for domestic partners under IRS rules.

When a debtor files a voluntary bankruptcy, a change in circumstances may occur which justifies dismissing the case. While it is rarely recommended that a debtor dismiss their bankruptcy case, there are some issues which can arise that justify a dismissal. Let's take a look at a few:

Job Changes

If a debtor files Chapter 13 bankruptcy they are doing so because they earn enough income to pay some of their unsecured debts and hold onto property attached to loans. Under a Chapter 13 bankruptcy plan, a debtor's income allows them to make monthly payments for three to five years until the terms of the repayment plan is satisfied. However, if a debtor's income decreases significantly or they lose their job, they may want to dismiss their bankruptcy case. A dismissal may be the best course of action if a change in income occurs before plan confirmation or before the debtor has begun making payments. However, if the debtor has already begun making payments on their debts they might prefer a conversion to Chapter 7 bankruptcy instead.

Buying a roof over your head can be very difficult, especially if you haven't planned it right. Things seem hunky dory until unforeseen circumstances cause you to skip a mortgage plan; and from thereon it's a downward spiral. But a home loan calculator can help you plan your investment well.

A home loan calculator is an online tool that tells you the anticipated mortgage payment that you would be paying for different home loan amounts, interest rate and the term of loan. While some are very basic and offer just the monthly mortgage payment, there are others that allow you to factor in extra income.

Variations to the simple loan calculator include the home loan comparison calculator (allows you to compare home loans), split loan calculator (calculates repayment and long-term interest rates under different scenarios), lump sum repayment calculator (allows to determine if you would be profiting from a lump sum repayment), and even a refinance calculator (allows you to determine if refinancing is a better option).

Subpart F rules limit deferral of foreign income by owners of foreign corporations. Earnings of a foreign corporation owned by U.S. taxpayer(s) are generally not taxable in the U.S. until remitted. This general rule is subject to several anti-deferral regimes, including Subpart F. U.S. shareholders (generally U.S. persons owning 10% or more of the vote) of a controlled foreign corporation (CFC) must include in their income currently certain types of income earned by the CFC, under the provisions of Subpart F. These inclusions are accompanied by a deemed-paid credit for corporate shareholders that operates identically to the deemed-paid credit for dividends. A Subpart F inclusion, however, is not a qualified dividend eligible for the reduced 15% tax rate.