Buying a home can be complex. Since it’s probably one of the most significant purchases you will make in your lifetime, it’s a good idea to assemble a team to guide you through the process. Having a solid support team in place will take some of the burden off you as a buyer, as you can rely on experts to make sure everything is just right before and after you make your purchase. Below, we will discuss the benefits of building a team, who will be on it, and their specific roles.

Benefits of Building a Team

Going through the home buying process can be likened to an obstacle course. You could find it challenging to navigate on your own, especially if this is your first home purchase. However, having the expertise of a team of professionals can protect your interests as they guide you through finding a home, making an offer, getting financing, and finalizing the sale. Let’s look at a few advantages of the team approach to home buying.

Core Members: Who Does What?

Each of the core members of your house buying team brings expertise and benefits to the home purchase process. These core members and functions include the below:

The Bottom Line

Buying a home can be complex, stressful, and exciting simultaneously, but if you have the right team, it can be relatively easy, and you can rest assured you’re getting a good deal for the property you are buying. If you don’t know where to start, you can always begin with an agent, and they can help you find the rest of the team members.

Building a Home Buying Team

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You have finally received the phone call or email you have been waiting on regarding your recent job interview. But, the excitement begins to fade when you realize that the offer isn’t exactly what you were looking forward to when you initially applied for the job. When that happens, you can either take up the offer anyway or negotiate better terms — the latter is always the best thing to do, even though it may seem a little bit uncomfortable at first. For this reason, this article discusses the art of negotiating a job offer, hoping you will find the much-needed courage to ask for what you believe you deserve before taking on a new job.

What to Negotiate

The answer is simple — you can negotiate anything that does not meet your requirements as far as the job offer is concerned, as long as it is reasonable and negotiable. Here are some examples:

Why Negotiate Your Salary?

According to studies, most managers expect new and potential employees to negotiate their salary and benefits, despite not mentioning that the job offer is negotiable. So even if the job offer does not state that it is open to negotiation, this should not stop you from negotiating. If you are reasonable, there is often nowhere to go but up! It is therefore advisable to negotiate your salary if:

Tips For Negotiating Your Salary

Now that you have decided to negotiate your salary, your next move will determine whether the potential employer will accept your proposal. Here’s what to do:

The Aftermath

One of the most important things to know before negotiating a job offer is that you do not need to challenge every offer element. You do not want to seem like a dissatisfied employee even before working at your new job. Instead, choose two to three issues that you want to discuss with your potential employer and then build your case around them. Also, for the best results, remember to keep a positive attitude throughout the negotiations.

Negotiating a Job Offer

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A cash-free world might be on its way sooner than you think. According to the Federal Reserve Bank of San Francisco’s May 2021 “Diary of Consumer Payment Choice” study, cash use accounted for only 28% of all non-bill payments. That was down seven percentage points from 2019. There’s little doubt that the COVID-19 had a meaningful impact on the number of cash-less transactions, as retailers, merchants and restaurants increasingly encouraged the use of ‘touchless’ credit and debit cards. Whether that behavior will continue as the pandemic eases is unknown. But the direction is pretty clear. The increasing popularity of cashless payments has led to alternative digital payment methods, such as PayPal, Zelle, Venmo, and many others. For this reason, a cashless society is now a question of ‘when’ not ‘if.’

What Does ‘Cashless’ Mean?

Cashless is a term used to describe a system where people rely entirely on electronic payments rather than paper money. Processing such transactions usually occur through channels, such as:

The Benefits of Going Cashless

Ditching cash payments for electronic payments comes with lots of benefits for both individuals and businesses. They include:

Reduction of Illegal Transactions

Electronic payments always leave behind a trail, unlike cash payments. For this reason, it’s easy for law enforcement agencies to identify individuals behind illegal transactions by simply following the trail. Most black market trades, such as selling recreational drugs and unlicensed weapons, complete transactions using cash. Therefore, getting rid of cash payments could significantly reduce such deals. Additionally, white-collar crimes, such as money laundering, will be challenging to pull off because electronic payments always leave behind a digital paper trail.

Easier International Payments and Transfers

Exchanging foreign currency at a forex bureau can be pretty challenging, especially if you aren’t familiar with the exchange rates. But if all countries adopt electronic money and digitized payments, there will be no need to visit a forex bureau to exchange money received from or sent to another country.

No Cash Management Costs

Physical paper is costly to print, store, protect, and transfer in large amounts. In addition, hard printing cash requires many resources and minerals, such as paper, copper, zinc, cotton, linen, etc. But such expenses won’t be necessary when the world goes cashless.

Reduced Operating Expenses

Employees who deal with physical money in banks, grocery stores, and other industries must be trained to handle cash registers and account for the money at the end of every shift. But on the other hand, electronic transactions are easier to account for, significantly reducing such operational expenses.

More Secure Than Hard Cash

According to FBI data, banks lost approximately $482 million due to robberies in 2019 alone. However, it would be possible to reduce this significantly if businesses, individuals included, did not keep any cash on hand.

Better Customer Experience

Businesses that only accept cash payments from customers often experience long queues during peak times. Typically, cash exchanges take longer to process, thanks to the calculations involved. Going cashless would tremendously increase a business’s efficiency and improve customer experience. Cashless transactions don’t require complex human calculations that often lead to impatient clients’ frustration and workers’ exhaustion.

Electronic Payments Improves Budgeting

Unlike cash payments, electronic payments leave a trail, making it easy for individuals to track their spending habits and budget their money accordingly. For example, some banks have mobile applications displaying data about their customers’ spending habits by day, week, month, year, among other parameters.

Significantly Reduces ‘Lost Cash’

Lost cash or small change loss is solid cash lost due to individual errors, such as unknowingly dumping it in a trash can at home, at the gas station, or anywhere else. If you’ve experienced a ‘lost cash’ moment in your life, you probably know how frustrating it can be. But, unfortunately, the worst thing about this kind of loss is it happens even to the most careful person. But with cashless transactions, you may misplace your wallet and not your money, just as long as no one else has your PIN. But if they do, you can log into your online account and block future transactions.

Where to Begin: How to Go Cashless as an Individual or Business

You can take concrete steps to move to a mobile wallet and digital transactions only as an individual. Here are tips to get you started. As a businessYou can play a significant role in transitioning from paper to cashless payment. Here are some great tips on how to begin:

The Bottom Line

There’s no doubt that the world will soon go completely cashless, thanks to the popularity and benefits of electronic payments. However, the transition to electronic payment requires collective effort both at the individual and corporate levels. And, whether you’re transacting and cash, cards, mobile payments, or a digital platform, there are risks. So, as with money, it’s essential to protect and manage your finances wisely.

Going Cashless

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Child identity theft is nothing short of heartbreaking. Unfortunately, many victims of this crime only find out about it when they are older and need essential services, such as student loans. As a result, their applications suffer rejection due to damaged credit history. According to a study by Carnegie Mellon University’s CyLab, children are 51 times more likely to be victims of identity theft than adults. Also, the Federal Trade Commission reports that over one million children are vulnerable to identity theft crimes every year. These shocking statistics explain why it is becoming increasingly important for parents to learn more about the possible signs of identity theft involving their children. As a parent or guardian, here is all you need to know about this notorious crime.

What Is Child Identity Theft?

A child identity theft crime occurs when an individual accesses a child’s personal information and uses it to commit fraud. It mostly begins when the criminal steals a child’s Social Security number and uses it to illegally apply for a job, loan, or government benefits. When this happens, the criminal usually leaves the innocent child with debt worth thousands of dollars. Children are prone to identity theft because they have clean credit records. Criminals then use their victim’s details to apply for loans, given that they stand a higher chance of being approved thanks to the clean credit history. Additionally, children may never need to apply for such services until they are older, providing plenty of time for the fraudsters to go unnoticed. As a result, child identity theft can ruin the future of these innocent kids if not dealt with soon enough. Criminals can access a child’s information through data breaches, phishing, or even physical theft. Also, since parents are usually the custodians of their child’s private information, criminals may use any means possible to steal such information from the parents.

Protecting Your Child’s Information

Parents need to do all they can to keep their children’s information safe from identity theft. If you’re a parent or guardian, here are some valuable tips to protect your child.

Warning Signs of Child Identity Theft

So, how do you know that your child is suffering from identity theft? Here are some warning signs to watch out for: It’s also important to note that if the criminal changes the physical address of the child’s residence, the identity theft incident may go unnoticed for several years. Criminals do this to divert mail and calls to a new address.

Dealing with Compromised Information

Have you recently discovered that your child’s identity has been stolen, or are you suspecting something along the lines? Here’s what to do:

The Bottom Line

Child identity theft is a serious crime that can ruin a child’s future, given that it often stays unnoticed for years. Additionally, children are the most sought-after victims of identity theft because their clean records are attractive and hard to detect. Therefore, parents should be vigilant in protecting their children’s information from third parties, online and offline.

Protecting Your Family Against Child Identity Theft

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Regardless of how you earn income, you will still need proper tax forms. The two primary documents you focus on as a traditional employee are forms W-2 and W-4. Your W-4 determines your tax withholdings, while your W-2 shows how much income you received and how much you owe in taxes. However, not everyone works directly for an employer. Self-employed individuals, freelancers, independent contractors, or others that receive income outside of a traditional employee relationship need to rely on IRS Form 1099. We will discuss what Form 1099 is, its use, and how to file it.

What is Form 1099?

There are multiple types of Form 1099; however, they are all used for the same reason. Form 1099’s primary purpose is for taxpayers who receive income outside the traditional employer-employee relationship. Like Form W-2, Form 1099 provides information to both the IRS and the taxpayer regarding their income for the fiscal year. Once the IRS receives this information, they can determine how much the individual owes in taxes. Typically, the company or firm paying you sends you a Form 1099 following the end of the tax year. For example, a firm providing a freelance platform to connect customers with workers will send 1099 forms to those freelancers and the IRS to report income earned through that relationship. “Gig workers” typically fit this category, providing ride-sharing and food delivery services and design, programming, and other temporary project help.

Using Form 1099

Form 1099 provides income and tax information to the IRS regarding an individual’s income outside of a traditional W-2 employer. This type of income is from non-employment-related sources. In other words, it’s for those that receive payment other than a standard salary from an employer. Form 1099 also allows you to report dividends from investments and interest from banks. Also, tax refunds from the state or local authority can go on Form 1099 for income. Essentially, Form 1099 handles all forms of income that are not part of a traditional salary. If you want to avoid receiving an audit from the IRS, taxpayers need to report all sources and amounts of income.

Exemptions

If you earn less than $600 from non-employment-related sources, you are exempt from filing Form 1099. However, if you exceed that amount, you must report that income with Form 1099.

Form 1099 Types

Although every type of Form 1099 serves the same income reporting purpose, there are different versions of the 1099 form for reporting different types of income. The two most common types are the following: Other types include: There are several more types of Form 1099, with each one representing a specific type of income. The main takeaway with Form 1099 is that if you receive any form of payment that is not traditional, you should report it.

Filing Your 1099 Form

Generally, taxpayers do not need to complete Form 1099 to report their income. Instead, taxpayers receive Form 1099 from their sources of income, which could be anything from a business to a financial institution. Similar to Form W-2, Form 1099 has a deadline of January 31st, which means that the taxpayer should get their copy by mid-February at the latest.

If You’re a 1099 Employee

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As a self-employed or small business owner, you can secure your retirement and your employees with a Simplified Employee Pension (SEP) Plan.

What Is a SEP Plan?

A simplified employee pension plan is an Individual Retirement Account (IRA) that provides a streamlined approach to retirement planning for self-employed and small business owners. The primary advantage of this pension plan is that it is easier to set up and has a lower operating cost than that of a traditional IRA. SEP Plan Benefits SEP Plan Drawbacks Eligibility Requirements An employee or a self-employed person who is eligible for a SEP plan: Employers can relax some eligibility criteria but cannot impose stricter requirements. Employee exclusions from the SEP plan are:

How Does a SEP Work?

You can open a SEP if you are self-employed or a small business owner and want to secure a retirement option for yourself and your employees. You can set up a SEP plan by filling out Form 5305-SEP or a prototype of the same. You can choose a financial institution or a broker with whom you want to set up the account. Though not necessary, all employee’s SEP funds typically use the same financial institution. SEP Plan Contribution Limits: Employers can contribute to each employee’s SEP plan up to: When you are self-employed, you also contribute to your plan as you treat yourself as both employer and employee. To determine the amount you can contribute and deduct, you will need to do the following:
  1. Determine your net profit.
  2. Multiply your Self-Employed tax deduction by 0.50
  3. Subtract your reduced Self-Employed tax from your net profit.
  4. Multiply new net profit by your reduced plan contribution rate.
  5. The final total will be the amount you can contribute and deduct.
Withdrawing From a SEP Plan: Maintaining Your SEP Plan You can maintain a SEP plan for yourself or your employees by opening an account with any broker or financial institution. The contribution so made would be invested in a wide range of stocks and shares, ETFs, mutual funds, and CDs to get the best returns on the investments in the long run. Making Contributions To maintain a SEP plan, you need to contribute to the fund anytime before the due date of filing your income tax return for the year. After making the contributions, employees can make their own investment decisions. Your contribution to your employee’s SEP accounts is automatically vested in them. To ensure your SEP operates as per the rules, you need to conduct an annual check-up.

Takeaway

Simplified employee pension plans are a simple way for self-employed people and owners of small businesses to have a tax-deferred benefit and a pension fund to secure their future after retirement.

Simplified Employee Pension (SEP) Plans

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Tax season can be a headache, but it doesn’t have to be. One effective way to make filing your taxes easier is by better understanding one of the necessary tax forms: Form W-2. You should receive your W-2 by mid-February at the latest. Employers must send out W-2s to their workers by January 31st each year (or a few days later if the end of the month falls on a weekend). If you haven’t received it by then, contact your employer. You cannot file your taxes until you’ve received your W-2, which is essential to the process. Form W-2 helps the IRS determine how much income employees should be claiming and confirms what they have already paid in taxes and need to pay in taxes (if any). Form W-2 is a necessary component for tax returns and tax filing.

What is Form W-2?

Form W-2, or the Wage and Tax Statement, is the annual statement provided by your employer that reports your taxable income to you and the IRS. The form shows you and your employer’s payments for Medicare and Social Security and taxes withheld from your pay. All of the taxes withheld from your pay are on Form W-2. Information on Form W-2 goes to state and federal taxing authorities. It helps determine how much you should be paying in taxes for the given year.

Reading Form W-2

Reading a W-2 can be daunting if you do not understand the listed information. Form W-2 has multiple boxes explaining different aspects of your earnings and withholdings. Even if you’re not trying to file your taxes, you should still be able to read your W-2. Below is a short explanation of every box on Copy B of the W-2, which is the one you will file with your tax return: Boxes A – F: Lists the following: Box 12: All of the codes your employer needs to report to the IRS: Box 13: These options are not subject to federal income tax withholding. The checkboxes include: Box 14: A miscellaneous field. This field could include: Boxes 15 to 20: These boxes contain local and state income tax information from your employer. The boxes include: You will also need to attach Copy 1 to any other tax returns you’re required to submit (including state, city, or local).

Filing Form W-2

Once you receive Form W-2, you will be able to file for your tax return using Form 1040, your W-2, and any other financial and tax documents.

Understanding Your W-2 Form

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When someone hears the words “identity theft,” they immediately think of a stolen name or even social security number, but no one thinks about medical identity theft. The usual culprits for medical identity theft typically are individuals, health providers, or even remote hackers. According to the American Association of Retired Persons, or AARP, more than 45 thousand people in 2020 fell victim to medical identity theft. This specific form of identity theft can wreak havoc for years to come as it adds questions to an individual’s past medical history. Therefore, it is essential to understand what medical identity theft is and protect yourself and your personal information.

What is Medical Identity Theft?

Medical identity fraud is a type of fraudulent activity that occurs when someone uses the personal information of someone other than themselves. This information may include: Stealing this information happens for several reasons, including seeing a doctor under a presumed identity, receiving medical treatments, medications, surgeries, or purchasing medical devices. In addition to these, dishonest employees will either sell your protected information to an outside source or use your personally identifiable information to submit one or more fraudulent claims to your insurance company.

Protecting Your Information

Protecting your personal information is one of the most important things you can do for yourself. Through constant monitoring of several aspects, you can ensure that you do not fall victim to medical identity theft. Review and read thoroughly through all notices you receive from a health provider’s office, whether by mail or during an in-person visit. Even your primary care physician’s offices, laboratories, and pharmacy could be susceptible to unusual activity. Your health insurance information holds personally identifiable data within it; therefore, you must not share this information with just anyone. Also, be wary of companies claiming to offer any free services or products as these are likely a scam. In addition, if you have lost your health insurance card, or feel it was stolen, request a new insurance card and identification number immediately. Protect yourself by shredding the following documents that contain personally identifiable information: By monitoring your credit report and keeping a personal copy of your medical records, you can stay on top of your personal information and detect any errors quickly.

Dealing With Stolen Information

Medical identity theft is a form of fraud that is punishable with the potential of a felony offense with several years of jail time. While it may not be easy to determine who has stolen your medical identity, several entities are put into place to help. It is essential to know that medical identity theft can occur in several ways. For example, your medical provider’s office employees may sell your information because individuals will pay big money for your identity. In addition, individuals can steal your medical information when you incorrectly dispose of paper documents. Theft also occurs when hackers penetrate medical records databases. If you find yourself a victim of medical identity theft, file an official report as soon as possible. Utilize outside resources to monitor your credit report, health insurance claims, and take the necessary measures to protect your personally identifiable information.

Protecting Yourself Against Medical Identity Theft

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If meeting your retirement goals while getting tax benefits sounds like a great idea, you should consider investing in a 401(k) plan.

What Is a 401(k)?

An employer provides a 401(k) plan as an employee benefit. It offers tax advantages to help employees save for their future retirement. In a 401(k) plan, employees can contribute a part of their salary to a specific account. Employees receive tax advantages from the amount contributed while also growing their retirement nest egg. Some things to consider about a 401(k) plan are: Employee Benefits. A 401(k) plan is a tool you can use as an employee for tax-deferred savings and investments towards your retirement. Your employer usually matches your contribution and applies it to the designated account. You can choose the amount you decide to invest, and your employer can contribute accordingly. In addition, you can set up your 401(k) plan to automatically deduct a specific percentage of your income so that you continue to build your savings. The amount transferred, also called deferred wages, is not taxed and is not shown in your income tax return. Employer Benefits. Employers also receive tax benefits for matching the contributions of their employees’ 401(k) accounts. Employers can take deductions on their corporate income tax returns for those contributions. Investing as an Employee. Although your decision depends on your financial situation, lifestyle, and retirement goals, a typical 401(k) investment rate is about 10% of your salary. When your employer contributes a matching percentage to your 401(k) fund, you should put in the minimum amount required to maximize your earnings. If you start investing early, every paychecks’ contribution to a 401(k) plan will help you build retirement savings over the long term.

Choosing a 401(k) Plan

There are two primary types of 401(k) plans: Traditional 401(k). You can contribute a percentage of your salary every month to this plan, which your employer then matches. Sometimes, employers can contribute for the benefit of all participating employees even when they do not contribute to the fund. Usually, employers provide a matching contribution towards their plan. In addition, employee contributions are eligible for tax deductions. A traditional 401(k) plan requires an employer to conduct annual tests to verify that they do not discriminate in favor of better-paid employees. Other plans similar to the traditional 401(k) are: Roth 401(k). A significant difference between a traditional and a Roth plan is that in the Roth 401(k) plan, employees pay taxes on their income before contributing to their plan. That way, they can avoid paying taxes at the time of withdrawal.

Maintaining Your 401(k)

As described, a 401(k) plan is a contribution fund where employees put aside a specific percentage of their monthly income to secure their retirement goals. Employers usually make a matching contribution to the fund. While you, as an employee, can determine the percentage of income you want to contribute, the maximum amount that both employer and employee can contribute to the fund adjusts for inflation. For 2022, no more than $305,000 of an employee’s compensation can be considered when determining contributions. The employer must report the employee contributions in Form W2 or wage and tax statement even though it is tax-deductible under income tax laws.

Withdrawing From Your 401(k)

You can withdraw funds in both traditional and Roth 401(k) plans only by reaching the age of 59 1/2 years or after meeting specific criteria set by the IRS. In addition, you’ll need to consider your vesting percentage because your plan may require the completion of a particular number of years of service for vesting in matching contributions. If you make an early withdrawal while not following IRS rules, you could receive a 10% penalty on top of the required tax. In a traditional 401(k) plan, an employee must pay taxes on the amount withdrawn. In contrast, for a Roth 401(k), the employee pays taxes on their income before contributing.

Takeaway

The main benefit of having access to a 401(k) plan is that employees can invest funds for their retirement goals while at the same time getting tax benefits out of it. The employer also pitches in and makes a matching contribution towards the fund to secure the employees’ financial future even after retirement.

An Overview of 401(k) Plans

View Resource An Overview of 401(k) Plans
A company can provide multiple benefits for its employees. Examples include vision and dental plans, retirement benefit plans, long-term care insurance plans, and more. In addition, employee stock ownership plans, or ESOPs, are an exceptional benefit that companies may choose to provide. ESOPs can motivate employees to grow and improve the business due to their direct connection with profitability. If the company is doing well and its stock is up, the employees gain value in their investments. In addition, ESOPs also offer retirement benefits for the employees by giving them partial ownership within the company.

What is an ESOP?

Essentially, an ESOP is a retirement plan provided by a company for its employees, set up as a trust fund. ESOPs are different from employee stock option plans. The stock option plans allow employees to purchase their company’s stock at a set price after a given amount of time. ESOPs provide employees with partial ownership of the company by increasing their stock holdings over time. Afterward, company stock can be sold for cash when the employee retires. ESOPs benefit both employees, who gain partial ownership within the company, and its shareholders, which helps the company overall. In addition, they are commonly used to provide a market for any exiting owners.

Understanding ESOPs

Essentially, ESOPs are trust funds. A company can contribute shares or cash directly to the trust fund, or it can borrow money to purchase additional shares. All contributions are tax-deductible. Employees do not pay any taxes on these contributions until they exit the company, giving them the option to either sell on the market or back to the company.

Benefits of Setting Up an ESOP

ESOPs are qualified plans providing tax benefits for both the company and its participants. The main reasons a company uses an ESOP plan are the following:

Using Your ESOP

ESOP participants get an annual statement showing them the number of shares allocated to them that year and their net account balance. The number of shares typically takes the employee’s overall compensation into account. Vesting provisions are also a vital element of an ESOP. There are two types: Benefit distribution methods can vary, and there are other options; however, the employee will receive equal installments of their stocks over five years. Participants will not receive the vested portion of their ESOP until either they retire, quit their job, or die. Then the individual can sell the shares back to the company or sell them on the market.

How Do Employee Stock Ownership Plans (ESOPs) Work?

View Resource How Do Employee Stock Ownership Plans (ESOPs) Work?