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Delinquent Tax Debt Representation and Service Act

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To promote and ensure the protection of taxpayers from unfair and deceptive advertising claims from unscrupulous delinquent tax debt representation providers.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS

(a)

SHORT TITLE – This Act may be cited as the “Delinquent Tax Debt Representation and Service Act”.

(b)

TABLE OF CONTENTS – The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and declaration of purpose.

Sec. 3. Definitions.

Sec. 4. Exemptions.

Sec. 5. Fees.

Sec. 6. Duty to client.

Sec. 7. Bond.

Sec. 8. Conditions of providing service.

Sec. 9. Customer service.

Sec. 10. Right of cancellation.

Sec. 11. Disclosures.

Sec. 12. Advertising and solicitation.

Sec. 13. Due diligence.

Sec. 14. Return of client’s records.

Sec. 15. Prompt disposition of pending matters.

Sec. 16. Knowledge of client’s omission.

Sec. 17. Prohibited practices.

Sec. 18. Requirement of good faith.

Sec. 19. Retention of records.

Sec. 20. Severability.

Sec. 21. Civil liability for willful noncompliance.

Sec. 22. Civil liability for negligent noncompliance.

Sec. 23. Jurisdiction of courts; limitation of actions.

Sec. 24. Good faith reliance defense.

Sec. 25. Effective date.

SECTION 2. FINDINGS AND DECLARATION OF PURPOSE

(a) The Legislature makes the following findings:

 

(1) Tax law is complex and changes frequently;
(2) Tax law and tax law procedural requirements require that taxpayers have access to and representation from delinquent tax debt representation providers;
(3) Delinquent tax debt representation providers are an essential part of ensuring that taxpayers have competent representation when addressing the Internal Revenue Service regarding delinquent taxes;
(4) Taxpayers facing delinquent tax debts are vulnerable and may be subject to engage providers of services to resolve problems that are potentially unfair and deceptive; and
(5) The Treasury Department’s rules and regulations governing practice before the Internal Revenue Service are aimed at protecting the integrity of a tax system that depends upon voluntary compliance.
(b) Purpose:

 

The purpose of this title is -
(1) To protect clients from unfair and deceptive advertising claims and inappropriate practices of some delinquent tax debt representation providers; and
(2) (2) To balance taxpayers’ rights and interests against improper conduct by some delinquent tax debt representation providers

SECTION 3. DEFINITIONS

(a) As used in this title -

 

(1) The term “agreement” means an agreement between a provider and an individual for the performance of tax debt relief services;
(2) The term “client” means any person who owes a tax debt and enters into an agreement with a provider for delinquent tax debt representation services;
(3) The term “delinquent tax debt representation services” means a program or strategy provided to a client by a provider for a fee to effect the settlement, forgiveness, suspension, release, abatement, reduction, adjustment, compromise, payment by installment or discharge of any tax debt;
(4) The term “good faith” means honesty in fact and the observance of reasonable standards of fair dealing;
(5) The term “inadvertent error” means a mechanical, electronic, or clerical error that was not intentional and occurred notwithstanding the maintenance of procedures reasonably adapted to avoid such errors;
(6) The term “interest abatement” means forgiveness, suspension, release or reduction of assessed interest in a person’s unpaid tax debt by the Internal Revenue Service;
(7) The term “offer in compromise” means a settlement between a person and the Internal Revenue Service that discharges the person’s tax debt for less than the full amount owed subject to specified terms and conditions;
(8) The term “payment” means any transfer of money, property, other thing of value;
(9) The term “penalty abatement” means forgiveness, suspension, release or reduction of an assessed penalty in a person’s unpaid tax debt by the Internal Revenue Service;
(10) The term “person” means an individual, husband and wife jointly, corporation, business trust, estate, trust, partnership, limited liability company, association, unincorporated association, joint venture, or any other legal or commercial entity. The term does not include a public corporation, government, or governmental subdivision, agency, or instrumentality;
(11) The term “practice before the Internal Revenue Service” means all matters connected with a presentation to the Internal Revenue Service or any of its officers or employees relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service. Such presentations include, but are not limited to, preparing and filing documents, corresponding and communicating with the Internal Revenue Service, rendering written advice with respect to any entity, transaction, plan or arrangement, or other plan or arrangement having a potential for tax avoidance or evasion, and representing a client at conferences, hearings and meetings;
(12) The term “provider” means a person that provides representation to individuals or companies before the Internal Revenue Service, or before a State taxing authority, as defined below. This term shall include any person or entity who receives money or other valuable consideration or expects to receive money or other valuable consideration for:

(A) Soliciting or receiving an inquiry from a person for services;
(B) Forwarding or providing a completed inquiry for services to a Provider;
(C) Referring a person to another Provider, if the person is a Provider; or
(D) Providing a person’s name, address or other information that identifies the person to a Provider for the purpose of arranging the providing of services.
(13) The term “record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;
(14) The term “services” means delinquent tax debt representation services.
(15) The term “state” means any state, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States;
(16) The term “state tax” means a tax demanded by a state based on income, payroll, sales tax or use tax. The term does not include an assessment for real property tax, personal property tax, or any tax assessed on a specific item, purchase or service;
(17) The term “tax debt” means the amount of state tax or federal tax including principal, interest, additional amount, addition to the tax, or assessable penalty, imposed by law on the person against whom the tax is assessed;
(18) The term “tax return” includes an original tax return, substitute for return or amended tax return;
(19) The term “unenrolled return preparer” means a person who prepares and signs a tax return as the preparer, or who prepares a tax return but is not required by the instructions to the tax return or regulations to sign the tax return, and to that end does not provide tax debt representation services.

SECTION 4. EXEMPTIONS

(a) The requirements of Sections 7 and 9 shall not apply to:

 

(1) An unenrolled return preparer; or
(2) A person other than an unenrolled tax return preparer that is authorized to practice before the Internal Revenue Service pursuant to Title 31 Code of Federal Regulations, Subtitle A, Part 10 and provides tax debt relief services.

SECTION 5. FEES

(a) A provider may not charge an unconscionable fee to a client to provide delinquent tax debt representation services.
(b) A provider shall enter into a written fee agreement with any client which sets forth the compensation to be paid to the provider.
(c) Any statement of fee information concerning matters in which costs may be incurred must include a statement disclosing whether a client will be responsible for such costs.
(d) A provider may not impose charges or receive payment for services until the provider and the client have entered into a written agreement. The provider may obtain credit card information from a client, but may not charge the client until the written agreement is signed by the client.

SECTION 6. DUTY TO CLIENT

(a) A provider shall not provide services:

 

(1) To a client that will be directly adverse to another client to whom the provider provides services; or
(2) When a significant risk exists that providing services to a client will be materially limited by the provider’s responsibilities to others.
(b) Notwithstanding a conflict of interest, a provider may provide services to a client if:

 

(1) There exists a reasonable belief that the provider is able to provide competent and diligent services;
(2) Providing services is not prohibited by law; and
(3) A written, informed waiver of the conflict by each affected client is signed no later than 30 days after the conflict is known by the provider.

SECTION 7. BOND

(a) Any person engaged in providing delinquent tax debt representation services shall obtain and maintain at all times a surety bond in the sum of $100,000 conditioned on the faithful performance and payment of obligations of such provider arising in connection with providing services, and for the payment of all claims for damages for which the provider may become liable in the course of business as a provider.

SECTION 8. CONDITIONS OF PROVIDING SERVICE

(a) A provider shall not provide services without conducting a good faith analysis of the information available to the provider before entering into an agreement with a client that the provider’s services are suitable for the client.
(b) A provider shall not knowingly make any false statement when providing information to the Internal Revenue Service.
(c) A provider shall make reasonable inquiries if information received or assumptions appear incorrect or incomplete.

SECTION 9. CUSTOMER SERVICE

(a) A provider shall maintain a toll-free communication system, staffed at a level that reasonably permits a client to speak to a customer-service representative, as appropriate, during ordinary business hours.

SECTION 10. RIGHT OF CANCELLATION

(a) (a) A client may cancel an agreement before midnight of the third business day after the client assents to it. To exercise the right to cancel, the client must give written notice in a record to the provider.

SECTION 11. DISCLOSURES

(a) If a provider offers services for offers in compromise, it shall disclose in a clear and conspicuous manner in any agreement between the provider and the client:

(1) The fact that the Internal Revenue Service has stringent requirements to accept an offer in compromise and that not all clients will qualify;
(2) The conditions of an offer in compromise including, but not limited to, the potential for the client to relinquish all current assets and future income, or the monetary equivalent, to the Internal Revenue Service to qualify for an offer in compromise; and
(3) The fact that the IRS will not remove the original amount of the tax debt from its records until the client has met all the terms and conditions of the offer, the tax debt will remain a valid tax debt until the client meets all the terms and conditions of the offer, if the client files for bankruptcy before the terms and conditions of the offer are completed any claim the Internal Revenue Service files in the bankruptcy proceedings will be a tax claim and that the client must comply with all provisions of the Internal Revenue Code relating to the filing of tax returns and paying required taxes for 5 years or until the offered amount is paid in full, whichever is longer.
(b) If a provider offers services for penalty abatement, it shall disclose in a clear and conspicuous manner in any agreement between the provider and the client:

(1) The fact that the Internal Revenue Service has stringent requirements for penalty abatement and that not all clients will qualify; and
(2) The fact that penalty abatement will normally occur only where the taxpayer exercised ordinary business care and prudence in determining their tax obligations but nevertheless failed to comply with those obligations. Examples of situations that may justify a penalty abatement include: death, serious illness, or unavoidable absence; fire, casualty, natural disaster, or other disturbance, inability to obtain records; erroneous advice or reliance; and ignorance of the law.
(c) If a provider offers services for interest abatement, it shall disclose in a clear and conspicuous manner in any agreement between the provider and the client:

(1) The fact that the Internal Revenue Service has stringent requirements for interest abatement and that not all clients will qualify; and
(2) The fact that interest abatement will normally occur only in instances of error on the part of the Internal Revenue Service.
(d) An agreement between a client and a provider shall disclose in a clear and conspicuous manner the provider’s cancellation and refund policies.
(e) If a provider has a policy of not making refunds or cancellations, the agreement between the client and a provider shall disclose in a clear and conspicuous manner the terms and conditions of the provider’s policy.
(f) If a provider makes a representation about a refund or cancellation the agreement between the client and a provider shall disclose in a clear and conspicuous manner the terms and conditions of the provider’s policy.
(g) A provider shall disclose in a clear and conspicuous manner in any agreement between the provider and the client any limitations and alternatives available in a delinquent tax case and the responsibilities of all parties;
(h) A provider shall disclose in a clear and conspicuous manner opportunities, if available, for a client to avoid penalties through disclosure and the requirements for an adequate disclosure.
(i) A provider that maintains an internet web site shall disclose on the home page of its web site or on a page that is clearly and conspicuously connected to the home page by a link that clearly reveals its contents:

(1) Its full legal name and all trade names under which it does business; and
(2) Its principal business address, telephone number, and electronic-mail address, if any.

SECTION 12. ADVERTISING AND SOLICITATION

(a) A provider shall not make, directly or indirectly, any solicitation to provide services if the solicitation violates federal or state law.
(b) Any solicitation made by or on behalf of a provider must clearly identify the solicitation as such.
(c) A provider may state that it is “enrolled to represent taxpayers before the Internal Revenue Service,” “enrolled to practice before the Internal Revenue Service,” or “admitted to practice before the Internal Revenue Service.” only if such statement is true.
(d) If a provider advertises on radio or television broadcasting, the broadcast must be recorded and the provider must retain a script of the actual transmission.
(e) If a provider advertises through direct mail and e-commerce communications, the provider must retain a copy of the actual communication, along with a list or other description of persons to whom the communication was mailed or otherwise distributed.

SECTION 13. DUE DILIGENCE

(a) A provider shall exercise due diligence when preparing, providing and filing tax returns, documents, affidavits, and other records on behalf of a client to the Internal Revenue Service.

SECTION 14. RETURN OF CLIENT’S RECORDS

(a) A provider shall, at the request of a client, promptly return any and all records of the client that are necessary for the client to comply with his or her state tax or federal tax obligations. A provider may retain copies of the records returned to a client.

SECTION 15. PROMPT DISPOSITION OF PENDING MATTERS

(a) A provider may not negligently or intentionally unreasonably delay the prompt disposition of any matter before the Internal Revenue Service.

SECTION 16. KNOWLEDGE OF CLIENT’S OMMISSION

(a) A provider who has knowledge that a client has not complied with the revenue law of the United States or has made an error in or omission from any return, document, affidavit, or other paper which the client submitted or executed under the revenue laws of the United States, must advise the client promptly of the fact of such noncompliance, error, or omission. The provider must advise the client of the consequences as provided under the Internal Revenue Code and regulations of such noncompliance, error, or omission.

SECTION 17. PROHIBITED PRACTICES

(a) A provider shall not, directly or indirectly:

(1) Use the phrase “bail-out” or any variation thereof in a manner that inaccurately implies that the service offered by the provider is related to any program or benefit of the United States government or any agency or department thereof;
(2) Use the phrase “stimulus” or any variation thereof including “stimulus act”, “stimulus plan”, “stimulus program” or “stimulus notice” in a manner that inaccurately implies that the service offered by the provider is related to any program or benefit of the United States government or any agency or department thereof;
(3) Use the phrase “government program,” or any variation thereof including “government agency”, “government sponsored” or “federally regulated program,” in a manner that inaccurately implies that the service offered by the provider is related to the United States government or any agency or department thereof;
(4) Use any logo or image of the White House, U.S. Capitol Building or any other United States landmark or government building in a manner that inaccurately implies that the service offered by the provider is related to the United States government or any agency or department thereof;
(5) Use any form, envelope, letterhead, image or communication which simulates or is falsely represented to be a document authorized, issued, or approved by the United States government or any agency or department thereof, or which creates a false impression as to its source, authorization, or approval;
(6) Use any emblem, logo or other sign or device that is similar to an emblem, logo, sign or device that a government agency or department uses to identify the government agency or department or a product or service the government agency or department provides, including but not limited to an eagle, flag or crest;
(7) Use in an agreement or advertising a name other than the true legal name and/or any trade name of the provider;
(8) Use false or misleading information to deceive a client or prospective client;
(9) Misrepresent the amount, type or quality of tax debt reduction a client will receive as a result of a service the provider performs or offers to perform;
(10) Misrepresent that using provider’s service will stop collections, levies, attachments or garnishments;
(11) Misrepresent that the fees paid by a client to a provider are tax deductible, unless true;
(12) Represent that a client in a “currently not collectible” status with the Internal Revenue Service has the tax debt forgiven, discharged or eliminated;
(13) Misrepresent that a provider can eliminate interest or penalties that have accrued or that will accrue on a client’s tax debt;
(14) Misrepresent that a provider can reduce a client’s liability to a specific dollar amount;
(15) Misrepresent that a provider can secure a specific monthly payment amount for the client as part of an installment agreement;
(16) Represent, state, indicate or suggest that a client or potential client “qualifies”, “qualify” or “is qualified” or words of similar import for any Internal Revenue Service program without confirmation of the client’s qualification by a good faith review of the client’s financial situation and tax history;
(17) Misrepresent the provider’s affiliation with, endorsement or sponsorship by, any person or government entity;
(18) Misrepresent the provider’s qualifications, training or experience or the qualifications, training or experience of the provider’s employees, agents or affiliates;
(19) Promise or guarantee any specific outcome or result to a client without a good faith basis for so doing;
(20) Compensate its employees solely on the basis of a formula that incorporates the number of persons the employee induces to enter into agreements with the provider;
(21) Exercise or attempt to exercise a power of attorney after a client has terminated an agreement;
(22) Initiate a transfer from a client’s account at a bank or with another person unless the transfer is:

(A) A return of money to the client; or
(B) Before termination of an agreement, properly authorized by the agreement, and for payment of a fee.
(23) Advise a client to stop making their monthly installment payments to the Internal Revenue Service unless justified after a good faith analysis of the client’s situation;
(24) Advise or imply that a client is not obligated to continue making their monthly installment payments to the Internal Revenue Service, unless justified after a good faith analysis of the client’s situation;
(25) Utilize when describing a provider’s professional designation the term “certified” unless true;
(26) State or imply that the provider has an employer/employee relationship with the Internal Revenue Service;
(27) Assist, or accept assistance from, any person who, to the knowledge of the provider, obtains clients or otherwise provides services in a manner forbidden under this title;
(28) Imply endorsement by Internal Revenue Service;
(29) Give false opinions based on knowing misstatements of fact or law;
(30) Cause the unauthorized disclosure or use of tax return information;
(31) Assist a client to evade any assessment of tax in violation of any federal tax law; or
(32) Knowingly provide assistance or resources a person to provide services or practice before the Internal Revenue Service who is ineligible, suspended or disbarred.

SECTION 18. REQUIREMENT OF GOOD FAITH.

(a) A provider shall act in good faith in all matters under this title.

SECTION 19. RETENTION OF RECORDS.

(a) A provider shall maintain records required to be retained under this title and for each client for whom it provides services for 3 years after the final action with the client. The provider may use electronic or other means of storage of the records.

SECTION 20. SEVERABILITY

(a) If any provision of this title or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.

SECTION 21. CIVIL LIABILITY FOR WILLFUL NONCOMPLIANCE

(a) In general – Any provider who willfully fails to comply with any requirement imposed under this title with respect to any client is liable to that person in an amount equal to the sum of:

(1) Any actual damages sustained by the client as a result of the failure or damages of not less than $1,000; and
(2) In the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney’s fees as determined by the court.
(b) Attorney’s fees. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this title was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party, attorney’s fees reasonable in relation to the work expended in responding to the pleading, motion or other paper.

SECTION 22. CIVIL LIABILITY FOR NEGLIGENT NONCOMPLIANCE

(a) In general – Any provider who is negligent in failing to comply with any requirement imposed under this title with respect to any client is liable to that client in an amount equal to the sum of:

(1) Any actual damages sustained by the client as a result of the failure; and
(2) In the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney’s fees as determined by the court.
(b) Attorney’s fees. On a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this title was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney’s fees reasonable in relation to the work expended in responding to the pleading, motion or other paper.

SECTION 23. JURISDICTION OF COURTS; LIMITATION OF ACTIONS

(a) An action to enforce any liability created under this title must be commenced by a client in any court of competent jurisdiction not later than the earlier of (1) one year after the date that the client discovers, or through the use of reasonable diligence should have discovered, the facts constituting the violation that is the basis for such liability; or (2) three years from the date of the wrongful act or omission that constitutes the violation that is the basis for such liability.

SECTION 24. GOOD FAITH RELIANCE DEFENSE

(a) A provider shall not be held liable in any action for a violation of this title if the provider shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction, and programming and printing errors, except that an error of legal judgment under this title is not a bona fide error.
(b) A provider may rely in good faith, without verification, upon information furnished by a client.

SECTION 25. EFFECTIVE DATE

(a) This title takes effect upon the expiration of 180 days after the date of its enactment.
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How to Protect Your Social Security Number and When Not to Give It Away

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Most of you likely learned early on to keep your Social Security numbers safe, protected, and private. These nine digits are your primary personal identification numbers, the key to your accounts and private data. As technology has developed, vulnerability to identity theft increases, yet many folks are getting more lax about securing their Social Security numbers.

It appears that virtually everyone needs your Social Security number before they’ll do anything for you or with you. So where do you draw the line?

The government provides some guidance by stipulating that you are just required to give out the number in particular situation:

Filing income taxes

Entering into an employment situation

Running business through financial institutions

Applying for authorities benefits

Trying to get a driver’s license

So why does it feel like you need to type, print, and share your ID numbers on a daily basis?

While giving out your Social Security number is technically voluntary, refusing to give it outside may mean you can not access a service or purchase a product. Meaning that the regular routine as a consumer is issue to some colossal gray area. This enormous can of worms causes it to be difficult to figure out when it makes sense to give out your Social Security number. To clear up the confusion, consider these seven times to be wary about giving out your number.

When to Not Give Out Your SSN

1. Email

From online shopping orders to e-mailing customer support, e-mail is a basic – if not the main – means to do business. But since it’s also part of your regular routine for private contacts, it is simple to feel very comfortable sharing info over e-mail. In fact, most individuals do not even realize they’ve let their guard down before it is too late. When a company, particularly one you trust, asks for your Social Security number over email, it’s natural to reply and discuss the information. It’s easy and quick. But you have three reasons to cease and think before you are doing.

Unlike paper files that a business can securely file in a fast drawer, the e-mail you send can get forwarded (accidentally or on purpose) and end up in the wrong hands. Digital records are easy to duplicate, and hackers can locate their way into the most risk-free system. Once you hit send, your name and SSN are exposed and available.

Even when dealing with a recognizable business, you still can’t be sure just who will get your email. Saving a customer service representative’s name in your contact list, for instance, doesn’t mean that you’re necessarily in touch with that man every time. Do Not trust the “answer-to” discipline every time.

Your system may be safe, but is your virus software up so far? Can you be sure the business’s email server is safe? How about the Internet connection you are using: Is it public Wi-Fi access? Though we had like to think we are safe all the time, malicious folks may be seeing.

In summary, even though we had like to believe that one on one emails are private, they’re not constantly actually just between the sender and receiver. It’s not a safe location for sharing your Social Security number.

2. Internet

Similarly, the rest of the Internet is dangerous for your own Social Security number. But as it pertains to online kinds on protected sites, sharing can appear inevitable. Most online stores and businesses can and will take your credit card number as satisfactory advice. But if your SSN is a needed field, what else are you supposed to do? If you frequently do business on the internet, notably if you are applying for occupations or running your own company, you may find which you must provide your number more generally than you’d like.

If that is the case, apply for a federal identification number through the IRS, and use that number instead. This number is a valid citizen ID for business and tax purposes, but it isn’t one that identity thieves could use to apply for credit or access your personal accounts.

3. Phone

When you are on the telephone, you might have a little more control of the situation than you would over email – at least sometimes. Safety on the phone is about trust and control. Only share your number with accredited organizations, & most importantly only after you have verified the call is valid. The biggest problems come from calls you receive, not the ones you make.

Say they are from a particular firm but caller ID lists an “unavailable” or “limited” amount. If that’s the case, ask when you can call them back through the routine customer care line. If they say they’re from your phone company, for instance, you should be competent to telephone the number on your recent statement and reach someone that will help. Don’t take a hazard by coping with someone you don’t understand, can not authenticate, and can not call back or report if there is trouble.

Call from numbers you do not recognize. Take some time to search for the number online to try and check where they’re calling from. If you take the call, ask for the man’s name and firm up front, and look online for confirmation. If you screen the call, dig just a little deeper to learn if other folks have gotten the call also. Do Not just accept what you see on reverse number lookup sites; constantly go back to the company’s official site to strive and find the number.

If anyone ever contacts you asking for the amount, find out who they symbolize, and inform them you will call them back at their official number.

Once you know you’re dealing with the right those who are actually calling from the correct firm, you’ll be able to feel more comfortable. But don’t let your guard down fully. Cell phones, VoIP services, and dwelling telephone landline options are exposed to hacks and attacks, so make an effort to take these calls from house, instead of a public space. And remember that in addition to the call being recorded on another side, people standing around maybe you are listening too. Don’t give your number when you’re standing on a busy street corner or taking a call while shopping at the mall.

4. Anyone Promising to Be Your Bank or Financial Institution

If someone promising to represent your bank (or other financial institution) emails or calls and asks for your Social Security number, it’s a scam. It’s not your bank. It’s not your credit card business. And it is not the urgent situation the individual is saying necessitates them to get your number over the telephone or email.

Your bank may ask for one to verify the last four digits before finalizing a trade, but they’ll never ask for your whole number. They have it on file. The same manner that Internet service providers remind you that they’ll never request you for your password, your financial institutions should never request you for your full nine digits.

5. Curriculum vitae and Job Applications

If you are used to companies asking, you might be tempted to merely put your Social Security number in the header of your cv. Resist the urge. Your goal would be to get your cv shared among as many potential employers as possible, and you don’t want that many copies of your number floating around. But what about job applications?

To establish citizenship, you’ll need to give your SSN to companies. But that doesn’t contain future companies. Most areas where you’ll apply for a occupation will only require your number after they hire you.

However, some businesses comprise it on a job application. In some scenarios, they’re only attempting to save time, but in others they just don’t recognize that it is not needed. Do Not be afraid to pass on sharing this advice. Only write “will provide upon offer of employment.” If an interviewer mentions that it’s for a background check, you can describe that you’ll provide it at the end of the interview.

It’s your judgment call on if it feels premature to provide this personal information. You don’t want to jeopardize the job opportunity, but you also don’t desire to work someplace that will not honor that you protect your identity.

6. Checks

With the lone exception of tax payments to government revenue agencies, never write your Social Security number on a check. Your check already has your bank’s routing number, your personal account number, and your mailing address. Even if the check is for a close, trusted friend, you just do not want all of this advice in the same area. If your buddy by chance loses the check or is the victim of a stolen wallet, you will be a likely casualty too.

If your seller ever insists that you add your SSN for your check, summon the heart to talk with a supervisor. Offer to add your phone number and sometimes even driver’s license number instead, or threaten to take your business elsewhere. Be company. You should never need to provide these records on a check.

7. Retailers and Other Sellers

Even if you’re not using a check, you could think you’ve got to give your Social Security number to anyone you do business with. They presume they desire it, and you presume they are right. Nothing could be further from the truth. If you’re paying someone by cash, credit card, or debit card, they already have what they must get paid. If they insist on your SSN, you have ample reason to suspect foul play, and should refuse to do business with them and potentially even report them.

Our society is becoming incredibly relaxed about providing and requiring 1 of the most significant security measures that we have: the Social Security number. Since the laws surrounding this issue are quite obscure, you must be completely alert to the possible risks that come with providing your SSN.

Only give it out in scenarios where it is either lawfully demanded or you’re assured the party asking for it is legitimate and trustworthy. If you ever have any uncertainty, err on the side of caution and work your way around having to give out your number. Do Not be afraid to delay your purchase, say no to a sales telephone, or take your business to another firm.

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What Is a Real Estate Investment Trust – Investing in REITs

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For many, real estate is the gold standard of investments. It has a great long-term track record, can provide a steady income, and is an investment that is tangible and usable. There is something filling in taking a look at a building you possess, versus staring at shares of stock on a computer screen.

Unfortunately, real estate as an investment has barriers to entry, such as money for a deposit, the skill to get a substantial loan, the time and instruction to run a prosperous enterprise, and the mandatory cash for upkeep, repairs, property taxes, and insurance.

Luckily, there is a way to put money into real estate without owning individual properties. It Is referred to as a Real Estate Investment Trust (REIT).

What’s a REIT?

A REIT exists to invest in income-creating properties. It does this directly through the purchase of real estate, or indirectly by supplying loans or purchasing preexisting mortgage contracts. To qualify as a REIT (and avoid corporate income tax), at least 90% of its gain must be disbursed to shareholders as dividends.

REITs are usually broken down into three types:

1. Equity REITs

The most used and well known kind of REIT, equity REITs focus on getting, handling, and developing investment properties. Since REIT limitations require that properties are held and grown over an extended time frame, their primary source of earnings is rental income from their holdings. They commonly purchase specific kinds of property, which normally fall into the following categories:

Office and Industrial

Residential

Hotel and Resort

Health Care

Self Storage

Raw Property

Not as popular as equity REITs, these funds loan cash to real-estate investors or invest in existing mortgage loans on properties (rather than investing directly in the properties themselves). Their primary source of earnings is interest in the loans they hold.

3. Hybrid REITs

A blend of both equity and mortgage REITs, hybrid REITs diversify between owning properties and making loans to real-estate investors. Their sales comes from both lease and interest income.

Advantages

Like all investments, you will find advantages and disadvantages to REITs which should be weighed before investing:

Advantages

Investors can diversify within the real-estate market by holding an interest in multiple properties with minimal dollars.

Risk is pooled among many investors versus a single property owner.

REITs pay high cash dividends.

Many REITs offer high liquidity, relative to outright real estate ownership, by enabling investors to sell shares immediately.

Investors share ownership in substantial properties, like leading office buildings or resorts, that they’d otherwise be hard to afford.

Properties are professionally handled.

Foreign individuals, otherwise limited from possessing property, can have an interest in such property via a REIT.

Depreciation expenses can minimize shareholder taxes on dividends.

Typically, dividends are taxed the year they’re received and as ordinary income. When depreciation expenses are passed down by the REIT, those expenses are viewed as a return of capital to the stockholder and offset an equal portion of investor dividends. This delays the payment of taxes on that portion of dividends until REIT shares can be purchased.

Moreover, when shares are sold, the amount is taxed as a capital gain rather than as ordinary income. For example, in case a shareholder was paid a 0 dividend, but could claim $10 of that as a depreciation expense, the shareholder would simply pay income tax on $90 that year. Nevertheless, the $10 subtracted would be taxed as a capital gain after, when the fund is sold.

Because ordinary income is taxed at a much greater rate than capital gains, this can be a major edge over the tax treatment of standard REIT dividends.

Disadvantages

REITs typically show low increase since they must pay 90% of income back to investors. Therefore, just 10% of income can be reinvested back into the business.

REIT dividends are not treated under the tax-friendly 15% rule that most dividends fall under. They’re taxed as regular income at a considerably higher rate.

Investment risk can be substantial. Do your due diligence before investing and consider all variables in the real estate market (i.e. property values, interest rates, debt, geography, and shifting tax laws).

REIT investors cede control of all the operational decisions that an individual property owner would make.

Some REITs will incur high direction and trade fees, leading to lower payouts for shareholders.

Freely Traded vs. Non-Traded REITs

Now that we’ve researched how REITs work and the three principal sorts, let’s delve into the important differentiation between openly traded and non-traded REITs:

Freely Traded REITs

Freely traded REITs are registered with the SEC and recorded on a national exchange.

Pros:

They can be purchased and sold in a brokerage account.

They offer almost immediate liquidity since the fund can be sold anytime.

The market promptly represents an increase in share worth.

These funds are usually quite substantial and diversified.

Cons:

Share price can be greatly determined by market conditions versus the genuine value of the underlying properties. As a consequence, investors may experience volatility in a publicly traded REIT portfolio.

The additional expense to run a freely traded fund may lower an investor’s prospective dividends.

Non-Traded REITs

Although a non-traded REIT is regulated by the SEC, it isn’t recorded on an exchange. Investors must meet minimum net worth or liquidity guidelines so that you can maintain the stability of the REIT and protect investor interests.

Now, investors must have a liquid net worth of 0,000 (exclusive of their houses), or income of $70,000 per year and $70,000 in assets. Shares in non-traded REITs are usually purchased at a set price of $10 per share. They’re designed to be held for a particular time period (normally five to seven years depending on the REIT strategy) and pay a pre-stated dividend.

This sort of REIT will generally raise money for the first few years and then close its doors to new investors. There are 4 common ways the fund may be unwound, either before or after the holding period is over:

The REIT could be obtained by a larger freely traded REIT with the sale profits passed along to shareholders.

The REIT could go public, by which case the investors would receive new shares that would be sold on an exchange for, theoretically, a substantially higher price.

The REIT could sell individual properties and pass a predetermined portion of the profits to the stockholders.

If the economy dictates that none of these options are prosperous, the REIT, through stockholder voting, could extend the normal operations until market conditions improve.

A set share price eliminates the daily cost changes and unpredictability connected with publicly traded REITs.

Dividends are usually higher in non-traded REITs, and may be paid monthly or quarterly. These higher dividends are a result of lower expenses and a method to compensate the investor for low liquidity.

There is possibility for major appreciation at the conclusion of the holding period.

Investors may hold foreign real estate that they’d otherwise be prohibited from possessing. These properties are comparatively immune to the volatility of foreign stock markets.

The share price and dividends are not ensured, although they are “set.” In reality, some REITs have had to cut dividends and reduce share values because of the economic decline and increased vacancies in their own properties.

The products are not liquid. Because of minimum holding requirements, an investor must remain in the investment for a very long time. Unlike their publicly traded counterparts, investors can’t sell shares upon important drops in share worth. This appreciably raises the danger of buying a non-traded REIT.

There is less monetary transparency of fund operations. Because non-traded REITs aren’t publicly recorded, they are subject to less oversight.

Leading appreciation in the share price isn’t recognized until the end of the span of functioning (though dividends can be raised).

Suggestions for Investing in REITs

REITs can supply outstanding income and increase opportunities for the right investor. If you are contemplating making the leap, here are a few suggestions to consider before investing:

Comprehend the types of properties you are investing in. Most REITs specialize in a specific sector which should be simple to find in the fund summary. Understand the risks of each sector. For example, REITs holding undeveloped land or retail shopping centers in a poor market will carry more risk than high end flats in a important metropolis.

Look at the amounts. It’s important to see if dividends are being paid from operations or if the fund is being driven to use added capital. A nicely-run REIT should rely on its operations to purchase expenses and dividends. Additionally, be skeptical of big, one time real-estate sales that might skew the financials upwards.

Learn when the REIT began investing. If investments were made before a market slowdown, the REIT could hold properties which are underperforming or need to be refinanced. In such cases, REITs might need to lower dividends or sell additional shares in order to raise cash in the near future. However, if the fund is made after a home market downturn, it could own and be buying valuable properties at low prices.

Understand your time horizon. Notably in a non-traded REIT, investors could hold shares for at least five years before seeing a yield of principal. Ensure you can handle this potential deficiency of liquidity.

We have seen considerable increase in many marketplaces as our market finds its way out of a deep downturn. Nonetheless, the property marketplace has lagged behind.

The good thing is there are amazing long term investment opportunities, particularly in the type of real-estate. REITs are a means to diversify in the real-estate marketplace and can be an alluring income producing investment in a low interest rate surroundings.

If you need to prevent stock market unpredictability and you fulfill minimal guidelines, non-traded REITs could play a significant part in your personal investment portfolio. As with all investments, it is important to do your homework and understand where you are placing your cash and why.

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Credit Card Chargebacks 101

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When credit cards are used sensibly, they offer a remarkably convenient method to pay for goods and services. They fit neatly in your wallet, you don’t have to carry batch of cash, and you can readily shop from the privacy of your own dwelling via the Internet – all thanks to a little piece of plastic.

Another bonus? When you pay for things with a credit card, you might be guaranteed by law to receive them as assured. If you do not, national regulations require that credit card issuing banks rescind transactions in these kinds of cases in the type of a chargeback.

A chargeback is an exceptionally powerful instrument to compel companies to do the right thing. Read on to find out more.

Using Credit Card Chargebacks

When to Use a Chargeback

While credit card firms can address fraud internally, a chargeback can be requested in cases when you’ve got legitimately authorized payment for goods or services which were either not received or were not delivered as described. In these situations, your first step should be to give the retailer every chance to refund your money or reach another settlement that’s okay for you. Only once you have exhausted all of your options in trying to reach a resolution with the merchant should you then contact your credit card business and start the chargeback process.

In some instances, there may not be a company left to contact. For instance, I once had VoIP telephone service with a company that went from business. Absent any means to request my cash back, I was competent to have my credit card business issue a pro rata refund of the payments I ‘d already made.

How to Achieve a Good Settlement Without Issuing a Chargeback

For retailers, chargebacks are very serious. In addition to incurring the substantial hassle in defending themselves from your accusations, they suffer large fiscal punishments with their credit card chip every time a chargeback is issued against them. Eventually they’re going to be paying more cash for each credit card transaction they procedure and in extraordinary instances they will lose their ability to accept credit cards altogether.

For these reasons, notifying an boisterous retailer of your intention to file for a chargeback is one of the best hints to outmaneuver customer service strategies. Representatives at businesses big and small-scale are trained to take these threats seriously and are empowered to solve issues in your favor in these cases.

The Procedure of Requesting a Chargeback

After you have attempted everything, for example, menace of a chargeback, there may be no other recourse than to telephone your bank to really request one. Your bank should take down details of your complaint over the telephone and issue a temporary credit for the amount in dispute.

Next, you may receive an application in the mail requesting you for additional details and documentation to support your claim. Once the bank receives your documentation, the retailer will have the chance to respond.

Finally, the bank will notify you of their choice to approve or deny your chargeback request. When it is denied, the contested sum will again be billed to your account.

How you can Win a Chargeback

You should begin by collecting documentation in the instant you guess a merchant may not be dealing fairly with you. Like the threat of a chargeback, presenting that documentation may also compel another party to do the right thing.

Once the chargeback has been requested, fill out your bank’s form in a timely manner. Be concise, restricting your case to only the pertinent details while providing ample supporting documentation.

Remember that your submission will be read by someone who values chargeback requests all day long. That person will be searching for strong evidence that the goods or services you paid for were not received, or that they were considerably distinct than their description. As an example, if an item you received has an alternate specification than the advertisement, this would be a much better case than one where you believed that its general quality did not match the description.

By utilizing your credit card as a method of payment, you might be guaranteed by law to receive the services or products that you paid for. Not only must you receive them in a timely fashion, but they must additionally be delivered as described. When things go wrong, the representatives at a big company will generally be unable or reluctant to do the right thing when it comes to refunding your money.

In other instances, smaller unscrupulous company will deny a legitimate request for a refund in the hope which you will not request a chargeback. By utilizing this choice as a final resort, you can realize your legal rights and prevent being the victim of dishonest or incompetent merchants.

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Price Earnings P/E Ratio Definition Clarified – How to Value a Stock

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If you are new to investing, learning how to choose stocks and investing in the stock market can be overwhelming. Likely the largest blunder that youthful investors make will be to take a look at the price of a stock as a measure of its value. In reality, the price of a stock is virtually useless when attempting to value a business.

So what metrics should investors use when appraising a prospective stock investment opportunity? While there are numerous factors to take into consideration, typically the most popular and well-known metric is called the price to earnings ratio, or the P/E ratio. But before we get into describing this ratio, let’s look at why the cost of the stock doesn’t tell the entire storyline.

Stock Prices – Cheap vs. Pricey

Think about something in your life that you know very well. Maybe you are obsessed with computer upgrades and functionality. You understand everything there is to understand about computers and when you go to a computer store; when you take a look at the prices and the specs, you really understand what signifies a buy.

If you’re helping a friend pick out a computer, you might inform them that a computer on sale for $2,000 may be a better bargain than a computer on sale for 0. Maybe the $2,000 computer has a larger display, more storage space, and 0 of preloaded applications on it. With the 0 computer, not only is the hardware quite shoddy, but there is also no preloaded applications, meaning you will need to shell out additional cash once you bay the computer. You might say “you get more bang for your dollar” with the $2,000 computer. It’s this same line of thinking which should be applied to stocks.

Sadly, many young investors do not use the same reasoning to stock picking. Instead, they look at a 0 stock like Apple and call it expensive. So they head to a little known penny stock which is selling for 50 cents and purchase it up like it’s pure gold. The fact of the matter is when you simply have $1,000, there’s a good opportunity that you’ll make more money buying three shares of Apple rather than 4,000 shares of that low-cost business. Why? Because Apple is a considerably more steady business with not only an established reputation for making investors money, but also strong growth possibility.

The P/E Ratio Defined

Now that we have fixed the flaw in the young investor’s logic, let us look at how to gauge worth. It’s a bit more complicated to value stocks than it really is to evaluate computers since you will find a wide variety of factors included.

Yet, there’s one metric which, while it doesn’t make up the whole narrative, offers an significant piece of the puzzle when valuing a firm: the price/earnings ratio, frequently referred to as the P/E ratio or P/E multiple. This ratio, while just one among many that sophisticated investors use, is typically the most popular and discussed ratio in many investment books.

So how does the P/E ratio work? Think of it this way: let’s say you’re contemplating investing in two public companies, both of which are selling for $20 per share today. One manner of deciding which company to invest your money in is analyzing how much you’ll have to pay for $1 of gains from every firm. If last year, Company A bring in $5 per share and Company B earned only $4 for share, it would intuitively make sense to pick Company A over Company B since it represents a more affordable trading opportunity. Without even understanding it, you have made this selection by calculating each company’s P/E ratios.

The P/E ratio is calculated by choosing the present price and break up it by the earnings per share. In the example above, you’ll choose the cost of $20 and break up by $5 for Company A and $4 for Company B, affording ratios of 4x and 5x, respectively. If you’re not good with mathematics, you may also easily locate the P/E ratio in the fundamental analysis section of your agent’s research screens for the stock you are reviewing or on various stock market investment news and research websites.

Disadvantages of the P/E Ratio

While the P/E ratio is a valuable metric for investors, you don’t desire to make the blunder of thinking that a P/E ratio only tells the entire storyline. Here are the principal limitations of the P/E ratio:

Healthy P/E ratios may differ between industries. The theory of using a set P/E ratio to establish if a stock is overpriced neglects to take into account the individual nature of the fundamental business. Stocks in high-growth sectors like the technology industry often have higher P/E ratios. On the other hand, some sectors like utility firms tend to trade at substantially lower multiples. Before you can decide if your stock is under or overpriced, you need to think about the sector where it manages. Continuing with the example above, let’s say Company B was a high-growth tech firm predicted to make $15 per share next year and $25 per share the following year, while Company A was a low-increase oil company which was forecasted to earn $6 per share next year and $7 per share the next year. Now that you have a more total image of the two companies, it becomes clear that Company B would actually be the better company to put money into due to its enormous increase potential. Company B’s stock price will likely skyrocket if the forecasts are correct, while Firm A’s stock price may not budge by much over the following year or two. Therefore, by ignoring other facets of the company, an investor might have falsely presumed that Firm A represented the more valuable stock opportunity.

Neglects to consider the debt of an organization. The cost of a stock represents the equity value of a business. Nevertheless, it is also very important to contemplate how much debt the business holds. An investor should never dismiss a company’s debt standing when purchasing a stock since debt is a strong index of a company’s fiscal well-being and future.

Earnings can be manipulated easily. Intelligent cpas have a million and one means to make companies seem more attractive. This can involve shifting depreciation schedules, using different inventory management strategies, and including non-recurring increases. These strategies are not limited to tainted organizations like Enron, as firms are given some legal flexibility in how they choose to report their gains. As a result, because businesses have an incentive to make gains seem as attractive as possible, P/E ratios can be presented as being unnaturally low.

Growth companies trade at higher P/E ratios. Since P/E ratios represent not only a company’s current monetary scenario but also it’s future growth potential, growth stocks trade at significantly higher P/E multiples than worth businesses. Thus, without comprehension what type of company you’re considering as an investment, you might carelessly overlook some valuable growth businesses just because of their P/E ratios. The truth is, some of the largest winners of time have been businesses with high P/E ratios. Based on Investors Business Daily, in a recent evaluation, the top 95 businesses had a typical P/E ratio of 39 before gaining impetus and reaching a typical P/E ratio of 87 at their peak. Yet according to the models of the majority of investors who rely completely on P/E ratios, all of these companies would happen to be ruled out as being overpriced.

False assumption that low P/E ratios represent low-cost trading chances. Many investors suppose a business trading at a P/E ratio must represent great worth. As we understand, because of many of the factors stated previously, low P/E ratios don’t automatically make the best investments. For example, Countrywide Financial was a company that was trading at single digit P/E ratios before it crashed.

P/E ratios are a priceless instrument for investors, but they are not adequate to identify the feasibility of an investment unless used in combination with other metrics and firm features.

Regardless of your view on the P/E ratio, you must always examine other ratios as well before purchasing a stock. These metrics, which help investors evaluate other facets of an organization, contain Enterprise Value/EBITDA, Enterprise Value/EBIT, Enterprise Value/Earnings, Cost/Cash Flow, and Cost/Book Ratio.

The P/E ratio is a fantastic beginning to understanding a business’s value proposition as a possible investment. With that said, do not forget that there are many other ratios and factors to contemplate other than the P/E ratio. The P/E ratio is just one piece of the puzzle. And if you simply take one lesson from this post, remember this nugget of advice: the cost of a stock, in and of itself, is a poor indicator of value!

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Just how to Paint Walls in Your House – Supplies, Hints

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A residence is just as exquisite as the quality of its paint job – but, of course, that’s awful news if you’ve dingy paint throughout your house.

Luckily, it’s comparatively uncomplicated and cheap to update the interior of your home with fresh paint within just a couple days, or perhaps hours. If you have never taken on a home painting job, don’t forget to stock up on supplies and acquaint yourself with the proper technique before beginning. You may even desire to enlist a buddy for extra help and agreeable business as you roll an attractive, fresh coat of paint onto your walls.

Painting Equipment List

Before starting, round up these supplies so you do not have to trek back and forth to the hardware store in the middle of your endeavor:

Tape Measure. Be sure to measure the areas you plan on painting in order to tell the paint specialist the dimensions you need to cover. This will help him or her discover the quantity of paint you need to purchase for complete coverage of the room. Estimated price: $10.

Wall Repair. In the event that your walls seem like Swiss cheese from all the photographs you have hung over time, keep a small amount of spackle or hole filler on hand to rapidly and easily repair the walls before painting. Estimated price: $5.

Stirrer Stick. A free wooden stick will get to you when you buy paint. Keep it so you’ll be able to stir the paint if it starts to separate in the can.

Paint Can Opener. The opener can also be freely provided when you make the paint purchase. It makes it possible for you to pry open the can when it’s time to commence the project. It is possible to use a flat-head screwdriver if you misplace the opener.

Primer (Optional). A coating of primer is a measure that many homeowners omit when they’re painting their walls. Nevertheless, you must prime your walls if you have new drywall, if your drywall is patched, if you’re painting over lustrous paint, or if you are changing your wall color from dark to light. The primer keeps you from having to use multiple coats of paint for coverage in these scenarios. You can buy a gallon of primer to cover a regular sized room, or you are able to ask for the primer to be added to your own paint for an extra fee. Estimated price: $17 for the stand alone primer, or $30 for paint plus primer joined.

Paint. The choices for paint colours are endless, and it is possible to have a lot of entertaining with your selections. Yet, if you are intending to set your home up on the market, you will have to choose into colours which are unbiased and universally liked. One gallon of paint generally covers 400 square feet, thus use your room’s measurements to compute how much you want. If you have primed the walls or added primer to the paint, you only have to compute based on one coat of paint. Estimated cost: $25 per gallon.

Drop Cloths. Use plastic drop cloths to protect your floors and furniture from paint drips. You may even desire to contemplate taping the drop cloths for your base molding to prevent paint from seeping past the fabric and into the carpet. Estimated price: $10 for a pack of six.

Painter’s Tape. A well-employed line of painter’s tape can help shield molding and perpendicular walls from getting unwanted paint on them. You are able to use a line of painter’s tape along the wall’s border, the ceiling, and the baseboards for protection. If you’re really intent on preventing paint leakage, paint a thin coating of primer over the tape to further seal out the paint. Estimated price: $6 for a 60-yard roll.

Paper Towels and Sponges. Keep a moist sponge and paper towels available for those ominous instants when the paint sloshes or gets on molding. You’ve got a couple of minutes to wipe the paint of tile flooring, hardwood, or glossy molding when you have a moist towelette on hand. Estimated cost: $2.

Tray and Lining. You Will need a paint tray and a tray lining if you plan on rolling primer or paint onto your walls. Pour the paint or primer into the tray so you could easily roll the liquid onto your roller. The tray helps with simple clean-up at the conclusion of the project. Estimated price: Less than $5 for both.

Paint Roller and Cover. You undoubtedly need a paint roller and covers if you’re thinking about painting a lot more than merely a small wall. It’ll help the endeavor move rapidly from start to finish. Search for a roller and covers in a 3/8-inch size for good coverage on interior walls. Estimated price: $15 for the roller and a pack of covers.

Roller Extension (Elective). If you’ve got quite high ceilings, purchase an extender for your own roller so you do not develop fatigued reaching to paint the wall. Estimated cost: $10.

Various Brushes. Unfortunately, you will not be capable to roll paint or primer onto every inch of the wall. Buy a couple of brushes of various sizes to edge and reach small spaces. You Will definitely want an edging brush and a four-inch flat brush. Estimated cost: Both brushes can cost less than $15.

Screwdriver. The screwdriver enables you to remove the wall plates that cover sockets and light switches, so you won’t have to squander time taping them or removing paint from them. Estimated cost: Less than $5 for a decent one.

Pouring Spout (Elective). Pouring paint into the tray can get disorganized when drips of paint roll down the side of the can. Prevent a flooring catastrophe through the use of a pour spout to get a clean pour into the tray. Estimated price: $2.

Paint Pail (Optional). If you’re using more than a gallon or two of paint for your rooms, buy a paint bucket. Unfortunately, there’s occasionally variation between gallons of paint which are the same shade, however you can prevent color difficulties by combining all the gallons in one bucket prior to starting the job. Estimated price: $30 for a five-gallon pail.

Paint Bucket Display (Optional). Should you use a paint bucket, buy a display to go over the bucket. This manner, you will not have to purchase a paint tray and lining. The screen lets you remove excessive paint from your own roller before applying it to the wall. Estimated price: Less than $5.

The final price of your project mostly depends on how big the room or rooms you need to paint, since the paint itself is the most pricey part of the update. However, if you’re painting merely one room, you could finish the endeavor for less than 5. And the next time you start a painting endeavor, you’ll already have most of the supplies you need on hand, so the closing price per room will be much less the second time around.

Paint Selection

A gallon of paint from a particular brand costs the same regardless of the colour or finish you select (unless, of course, you add primer to the paint). Nevertheless, there are several things to keep in mind when you’re buying paint that determine the closing look of your endeavor:

Paint Color. Nothing matters more than the paint colour you choose. If you’re preparing to record your house on the market, choose for neutral colours like beige, taupe, or offwhite for worldwide attractiveness. These colours appear bright for the illusion of cleanliness and space. Nonetheless, this isn’t to say that bold colours do not have their location. If you plan to stay at home for a while and would love to test having an orange, green, or purple color, feel free to try out an interesting hue. However, before you purchase a shade, take a few paint chips home from the shop to see how the colors appear in the room. Variants in light and design could make a amazing colour seem really horrible if you’re not cautious. If the paint chips don’t give you a great notion of what you’re getting yourself into, most hardware stores allow you to purchase a small sample to apply to the walls prior to a big purchase.

Paint Finish. Once you select a colour, you’ll be asked to choose a finish for the paint. Paint can come in matte, eggshell, satin, semigloss, or gloss. Generally speaking, a more level finish now is easier to touch up but harder to clean than a more lustrous finish. Contemplate using glossier finishes for high-traffic areas or places that need frequent cleaning, like the kitchen, bathroom, and children’s rooms. You should additionally consider using more lustrous finishes in dark rooms, because the sheen in the paint can reflect light to brighten a space. Stick to matte or eggshell paints in areas that do not need to be cleaned as often.

Paint and Primer United. If you pick to add primer to your own paint, the gallon will cost about $10 more than only a gallon of paint. But the added $10 is still less in relation to the estimated $17 for a gallon of primer or one more gallon of paint for $25. Keep in mind that adding the primer to your own paint can assist you to complete the occupation in only one layer, which could save both cash and time.

For the job available, you will be fairly safe from brutal paint fumes. Specialists recommend that you simply use water-based paint instead of oil-based paint for interior walls, as the water-based paint is much less likely to generate irritating fumes than its oil-based counterpart. Simply be sure to open windows in the room and turn on the fan so the atmosphere can circulate.

If you are especially worried about fumes, make sure you buy a zero-VOC or low-VOC paint. VOC stands for “volatile organic compounds,” which are what cause fumes. If you are feeling lightheaded at any point during the project, take a break and acquire some clean atmosphere. Do Not return to the room until you open more windows and turn on added fans.

Just how to Apply Paint

The steps below outline the process you’ll follow if you decide to use a gallon of paint and primer combination. Nevertheless, if you prime individually, then you’ll need to apply the primer before painting.

1. Shield the Room

Drape drop cloths over the flooring and furniture in the room, focusing on the sections that are perpendicular to the walls. You may need to remove furniture in the room so you can move about more freely. If you are concerned with paint dripping onto your baseboards, consider taping the drop cloth along the baseboard so paint cannot leak through.

2. Tape as Crucial

Some folks who are skillful with an edging brush do not tape the walls at all, but amateur painters benefit from taping at least the basics. Use your painter’s tape to create straight lines against the ceiling, molding, baseboards, and perpendicular walls of different shades. The tape prevents paint smudges.

This step can be time consuming but is important for creating crisp, clean paint lines. Make sure that the tape is employed in a straight line and there are no gaps between the tape and the wall once it is applied.

3. Remove Wall Plates

Unscrew the plates that cover outlets and light switches, and set aside.

4. Repair the Walls

If necessary, use your hole filler or spackler to smooth out your walls. Apply in accordance with the instructions on your own package, and allow to dry before painting. You may need to sand the filler if it is noticeable upon drying.

5. Open the Paint and Stir

Use your paint can opener to pry open the gallon of paint. Set the lid aside within an area you won’t inadvertently step on. Use the stirrer stick to smoothly blend together the paint, being careful to not slosh any paint out of the can. Once it is sufficiently stirred, you will see one uniform shade in the can.

If you are painting shortly after buying the paint from the hardware store, you will hardly need to mix the paint because the store vigorously trembles paint within the blending procedure. But if you wait several weeks or months, you will need to stir a great deal to create the appropriate mix. If you’re unable to mix the paint adequately after the paint is stored for several weeks or months, take it back to the hardware store to remix it with a machine.

6. Pour the Paint Into the Paint Tray

Place your tray liner in the paint tray. If you have one, affix the pour spout to the can of paint to prevent spillage. Pour the paint into the paint tray until the lining is about midway full. You don’t need the bumpy parts of the lining to be flooded with paint.

7. Moisten Your Brushes

Run your brushes underneath a drip of water in the sink, and use a paper towel to blot them dry. The wetness prepares them to accept paint.

8. Load the Brush With Paint

Dip your paint brush – whichever one you use first – into the paint until the bristles are coated with paint about a third of the way up the brush. Swirl the brush in the paint so the paint has a chance to fill the bristles. Let surplus drips of paint to fall back into the paint tray before you go the brush to meet the wall.

Use your edging brush around the corners of the walls and trim, and use larger brushes as required to fill in disparities between the roller-applied paint and the edger-applied paint.

9. “Cut In” Around the Edges of the Wall

Using your edging brush, paint with small strokes horizontally out from the border of the wall, then use a long, smooth, vertical stroke to make the paint appear smooth. When you “cut in” against the ceiling, use small vertical strokes before masking them with a long, smooth, horizontal stroke. This technique lets paint to reach into the corners of the walls. Once you have “cut in” against a three- to four-foot section of the wall, put aside your brushes to start rolling on the paint.

10. Moisten Your Roller

Just like you moistened your brushes, run a small trickle of water over your roller and blot it dry.

11. Roll Paint Onto the Walls in Small Sections

Once you have blotted the roller, put it in the paint tray and roll it through the paint and onto the bumpy surface until it is coated. If it drips when you pick it up, remove excessive paint by rolling it repeatedly against the bumpy part of the paint tray.

Put the roller on the wall and transfer it downwards at an angle, and then upwards, as though you’re writing the letter “V.” Keep repeating this pattern in a back and forth way until a three- to four-foot section (corresponding with the section you have already “cut in” on) is entirely covered with paint. Place the roller aside in the paint tray until you’re prepared to utilize it again.

12. Smooth the Finish

Now that you have a complete three- to four-foot portion of wall painted, complete with edging and rolling, smooth any differences between the two sorts of use with 1 of your brushes.

13. Repeat the Process

Continue edging around the walls, ceiling, and baseboards, and pause with your edging so you’ll be able to roll on paint for a smooth finish with no gaps. Keep doing this until the whole wall is covered in paint, and move onto the subsequent walls as essential.

14. Clean Up Paint Drips

As you go, use your moist sponge or paper towels to remove paint drips from molding or trim. If you see any paint dripping down the wall from your roller or brush, take care to smooth out the drip before it has the opportunity to dry.

15. Allow to Dry

Paint is typically dry to the touch within just a couple hours, and fully cured within a day. You can transfer the furniture back into place by the time it’s dry to the touch.

16. Touch Up, If Necessary

Once the coat of paint dries, it’s going to be noticeable if you need another layer or only a few touch-ups. Search for any portions of the wall that lack appropriate paint coverage, and use your brushes to fill in the differences. Apply another layer, if needed.

17. Replace Wall Plates

Finally, screw the wall plates back into the wall to complete your job.

There Is a reason realtors imply painting the walls of your house prior to putting it on the market: A fresh coat of paint in a neutral color gives prospective home buyers the feeling that the home is finished, well-kept, and clean prior to making an offer. Any time a house seems move-in ready, it’s likely to gain more interest available on the market and better offers from would-be buyers.

Yet, whether you’re listing your dwelling or not, a fine paint job is likely to add to the perceived worth of your dwelling, although painting endeavors will not cost you more than a couple hundred dollars. And if you’ve never completed a DIY project in your home, painting is a excellent endeavor to try as a beginner – it’s uncomplicated, cost-effective, and completely reversible if you do not enjoy the ending result. There is little to lose and much to gain from attempting your hand with a paint brush and roller.

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What Exactly Is an Annuity and How Does It Work? – Annuities Explained

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If you’ve a 401k or Roth IRA, you probably feel like you’re doing everything you can to be fiscally prepared for retirement, right? Maybe you are, but you might also gain from incorporating an annuity into your savings strategy.

So just how do you understand if you need an annuity?

Let’s look at the fundamental features of these unique economies vehicles, how they work, and above all, if you’d reap the benefits of having one.

What Exactly Is an Annuity?

An annuity, by definition, is purely an agreement to make a string of payments of a particular sum of money into a given party for a predetermined period of time. Annuities additionally refer to a commercial insurance contract offered by a life insurance company.

Function of Annuities

Annuities are designed to insure the contract owner against the threat of superannuation, which means outliving one’s income. Senior investors who run out of money to support themselves confront a frightening predicament. Annuities were thus created so as to mitigate this danger.

These contracts are promised to pay out at least a certain minimum sum on a periodic basis to the beneficiary until passing, even if the total payments exceed the sum paid into the contract plus any accrued interest or gain. Because of this type of protection and the fact that you cannot draw funds penalty-free until you’re age 59 1/2, annuities are considered retirement savings vehicles by nature.

History of Annuities

Annuities have existed in one sort or another since the Roman Empire. Citizens at that time would buy annual contracts from the Emperor. They would pay a lump sum to the Roman government in return for receiving an yearly payment for the remainder of their lives. European governments also offered a series of payments to investors in return for a lump sum investment now as a means of financing their wars during the 17th century.

Annuities came to America in the 18th century as a means of supporting church ministers. A Pennsylvania life insurance company was the first insurance company to advertise commercial annuity contracts to the public in 1912. Fixed annuities grew in popularity over time and have become a mainstay of conservative investors. Although the first variable annuity was created in 1952, they did not become common until the ’80s, and were followed by indexed contracts in the ’90s.

Basic Features of Annuities

Although there are many kinds of annuities, all annuity contracts are alike in several respects.

They stand alone as the only commercially-accessible investment vehicle that grows on a tax-deferred basis without needing to be put inside any kind of IRA, qualified or other retirement plan.

Unless the contract is held in an IRA or qualified retirement plan, there’s no limitation to the sum of money that will be invested and contributions are non-deductible. (Of course, most annuity insurance company have proprietary limits on the amounts that they will accept, but this is normally somewhere around 5 million dollars or so.)

Most annuity contracts also contain a declining surrender-charge schedule that eventually evaporates after a given time period, such as 5 or 10 years. For instance, a 10-year fixed annuity contract may assess a 7% early withdrawal penalty for cash taken out during the first year of the contract, a 6% fee for money taken out during the second year etc until the surrender fee program expires. Variable and indexed annuities generally levy similar prices for early withdrawals. Nevertheless, many contracts will enable the investor to pull out 10-20% of principal each year without fee as a means of easing this restriction as long as the investor is at least age 59 1/2.

Purchasing Annuities

Annuity contracts are available either inside or outside of an IRA or qualified plan. A check is written to the annuity carrier in either instance. They could additionally be acquired via 1035 exchange, where a maturing contract in a preceding annuity coverage, life insurance policy, or endowment coverage is moved tax free into an annuity coverage with your favourite firm. In terms of life insurance, any kind of cash value life insurance, for example whole, universal, or universal changeable insurance can also be exchanged into an annuity.

How Annuities Work

The way these merchandises were initially designed, the contract owner made either a lump-sum payment or a series of payments into the contract and then started receiving payments at retirement. The payments into an annuity are used to purchase accumulation units inside the contract, which, as their name suggests, pile up inside the contract until the full time that payments to the beneficiary must be made.

Afterward a one-time event known as annuitization takes place. This occasion marks the conversion of accumulation units into annuity units, which annuity contracts can pay out to beneficiaries in several distinct ways. Either way, the contract owner basically swap the dollar sum in their annuity for a string of promised payments. This means they give up accessibility to the larger, lump-sum, amount to be able to receive a promised life income. Beneficiaries can pick among several kinds of payout choices, including:

Straight Life. The contract will pay out an actuarially-computed sum to the beneficiary based upon his or her life expectancy only. This sum will be paid even if the entire payout surpasses the amount paid in and interest or other gains. Nonetheless, payments cease upon the passing of the beneficiary, even if less compared to the worth of the contract is paid back out. Theoretically, the insurance company keeps the contract worth even if the beneficiary dies after receiving only one payment.

Life with Period Certain. The contract will pay out either for life or for a certain period of time, like 10 or 20 years. This prevents the chance described above from happening. If the beneficiary dies shortly after payments start, afterward the insurance company must pay out the period certain’s worth of payments to the beneficiary, either as a number of payments or a lump-sum.

Joint Life. Similar to straight life, joint life annuities will continue to pay as long as one of the two beneficiaries is alive.

Joint Life with Period Certain. Joins the period specific payout with joint life expectancy.

Or, without annuitizing, contract owners can withdraw cash in the following ways:

Systematic Withdrawal. An easy payment of either a fixed dollar amount or percentage of contract value paid out each year, either monthly, quarterly or yearly.

Lump Sum. As the name suggests, lump sum is one payment of the entire contract worth. This payment can be taken as a distribution or rolled over into another annuity contract.

As mentioned formerly, all cash placed inside an annuity contract grows tax-deferred until it’s withdrawn, provided the beneficiary is at least age 59 1/2. If not, then a 10% penalty is determined upon the withdrawal, just as with an early distribution from an IRA or qualified strategy.

All distributions, whether early or standard, are additionally taxed as ordinary income to the recipient and reported on Form 1099-R. The exclusion ratio can be used to calculate the taxation of annuity payments. This formula allocates a proportionate amount of each payment made as a tax free return of principal.

As an example, if an investor places 0,000 inside an annuity and it grows to 0,000 and then receives monthly payments of 0, then 5 of each payment will be considered a yield of principal and hence be tax exempt. The 5, which is 25% of 0, arises from the fact the initial principal amount, 0,000, makes up 25% of the present value of the contract, 0,000.

Nevertheless, annuities will not be subject to ERISA (Employee Retirement Income Security Act) regulations unless they are set inside an IRA or qualified strategy.

Other Advantages of Annuities

Although their tax-advantaged standing is among their biggest advantages, annuities offer several other unique benefits as well. Annuity contracts are exempt from probate; that is, upon the passing of the contract owner, the contract value will pass to the beneficiary without going through probate.

Annuity contracts may also be mostly exempt from creditors in several cases, although the exact rules for this vary somewhat from one state to another. Texas is one state that unconditionally exempts these contracts from creditors; O.J. Simpson lived on money he’d in annuities after the civil judgment against him in 1994 (but before his more recent incarceration).

Kinds of Annuities

You will find three main types of annuities: fixed, indexed, and changeable.

Fixed Income Annuities pay a guaranteed interest rate like a certificate of deposit or bond.

Equity-Indexed Annuities promise some part of any increase in the stock market while guaranteeing principal.

Variable Annuities feature mutual fund sub-accounts that invest in stocks, bonds, real estate, and commodities such as precious metals and energy. Unlike the other two types of annuities, the principal is not guaranteed in varying annuities, which implies these annuities may lose value.

Annuities also can be categorized as either immediate or deferred.

Immediate annuities start paying a stream of income to the beneficiary when the contract is bought

Deferred annuities do not begin paying out until a later time.

All three kinds of annuities can fall into either of these groups; a fixed annuity can be either instantaneous or deferred, and so can an indexed or varying contract.

Would You Need an Annuity?

The most comprehensive reply to the question is that anyone who wishes to save more for retirement than they are permitted to in their IRAs or business retirement plans should consider an annuity as a supplemental financing vehicle.

There are additionally a couple of other reasons why those whose companies offer annuity contracts inside their retirement plans should consider them. For instance, annuities can be used as tax shelters by the wealthy and as sources of guaranteed income by the risk-averse.

With all this said, the limitations built-in to annuities may make them unsuitable for some investors.

The Cons

Fees and Expenses. In varying annuities, the investor pays a mortality and expense (M

Cash Locked Up. When you put money into an annuity, you give to keeping your money in 1 until the surrender interval expires and you’re at least 59 1/2. The insurance company will charge surrender fees to withdraw more than an allowed percent during the surrender span, and the IRS will take 10% if you draw before 59 1/2. Be sure you have an emergency savings fund accessible to you (without punishment) if you decide to purchase an annuity.

Fiscal Guarantee. Annuities do not carry FDIC insurance which means they are not ensured by the federal government like bank CDs. The promise to ensure an investor’s principal is only as good as the insurance company’s fiscal strength. Future investors should study an insurance company’s fiscal standing with an independent standings agency for example www.weissratings.com before investing.

Taxes. When earnings are withdrawn from an annuity, they are taxed as ordinary income and are not eligible for the lower long-term capital gains rate.

Commissions. Unfortunately, even good-hearted financial professionals can be carried out of their client’s best interest by a substantial commission. Annuities offer some of the greatest on the market. An investor should feel confident in her financial advisor and consider pros, cons and other options before investing.

Annuitization. This is a pro along with a minus. While annuitization can guarantee an eternity flow of income, it comes at the cost of irrevocably handing over the larger account value to the insurance company.

How Should Annuities Be Used within an Investment or Retirement Portfolio?

There is no single right solution to this question. Not only should the investor’s age, time horizon, investment risk tolerance, and other aims be weighed, but the special type of annuity in question should be thought about also.

Some types of investors may be better off with merely bonded fixed annuities, although some should seek the increase possibility of a changeable contract. There is also no set urged investment portfolio allotment percent for these vehicles, as some investors can get along good with every cent of their savings locked up inside these vehicles while some should confine their contract holdings to just a modest percent of the entire portfolio value.

The appropriate use and allocation of these items can simply be done effectively on a case-by-case basis. There is no one size that fits all. Make sure you take ample time to consider the advantages and disadvantages with a trustworthy financial advisor.

Annuities, like retirement accounts, are a type of insurance to be sure you receive a constant flow of cash nicely after your working years are over. You can find many benefits to annuities, and they provide risk-free retirement savings for countless Americans annually.

If you had enjoy more info or need to know if an annuity is right for, talk it around with your financial advisor. The more financially prepared you are for retirement, the more joyful your golden years will be.

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