Why Employment Numbers Matter So Much

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Employment numbers, or unemployment numbers depending upon your perspective, are a very important metric for the U.S. economy. As such, investors watch monthly employment reports released by the government very closely. But, why is the rate of employment, or unemployment, so important to the economy and Wall Street? At the very macro level, the American economy is made up of two parts, private spending and government spending. Broken down further, private spending can be split into spending by business and spending by individuals. In this country, spending by individuals makes up the largest part of economic spending. In a very real way, whatever direction consumer spending is going in, the economy is going in as well. Some times, there is a lag, but generally, if consumers are spending less, then the economy is shrinking. While it is true that people who are unemployed will be spending less money, their presence actually creates a bigger effect on the economy. When you see on television that a company is laying off workers, that impacts your mental state on a certain level. If the company isn’t in your state and not in your industry, it may barely register. On the other hand, if …

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Taxes Due April 15 2013

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Don’t forget (as if you could) that your federal income taxes are due on April 15 in 2013. For the past two years, taxes were actually due on April 16th, thanks to weekends and a holiday last year in Washington D.C. No such reprieve this year, Monday April 15 is the income tax deadline for 2012 taxes being filed in 2013. If you don’t file your taxes on time, there can be some pretty stiff penalties and interest. Don’t forget, you can get an automatic six month extension to file your taxes by submitting a Form 4868 to the IRS by April 15th instead of your actual 1040 tax forms. You still have to pay your best estimate and you’ll be on the hook for any taxes due that you miss, but it is still better than not filing. If you don’t pay your taxes, they can always come after your wages and hold any future refunds. For small business owners and the self-employed, it sometimes gets lost in the shuffle of the bigger income tax deadline, but the first estimated quarterly tax payment for 2013 is also due to the IRS on April 15th. The next estimated quarterly tax payment for 2013 will …

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Stock Market Records Is It Time to Buy

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Nothing gets the financial press in tizzy quite like a run of “up days” for the stock market. And, nothing gets the mainstream media interested in the financial media’s excitement like a new RECORD! Dow Jones Record High The Dow Jones Industrial Average has notched some record high closes lately. The S&P 500 Index isn’t far behind, within striking distance of its record high as well. So, what do these new stock market records mean for smart investors? First, the recent stock market records are a lesson to be learned for long-term investors such as retirement investors. When the market looked terrifying in  2008 many people sold off stocks in their 401k plans and other retirement savings, often after much of the damage had already been done. That was a foolish strategy then, but now, five years later, those investors are officially the fools. You were better off to have just stayed put. Harsh? Maybe, but if you are investing for retirement or other long-term horizons, this is a critical lesson to learn. In a recent discussion someone said to me that he was sure he did better by getting out when things were bad and getting back in now …

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Do Taxes Faster with these Tax Tips

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Doing your taxes is never fun. The potential of having to pay even more money than has already come out of your paycheck looms over your every move. The thought of missed tax deductions, or unused tax tricks makes you constantly wonder if you could have done better on your taxes. Searching for receipts and other records takes time and adds to the stress. Add to that the threat of a tax audit if you mess up, and it’s no wonder people spend hours stressing out of their taxes. How To Do Your Taxes Faster There are some tax tricks you can use to speed up doing your taxes. Mostly, it comes down to knowing when and where it is worthwhile to spend your time, and where you can just keep plunging ahead and filling out those IRS forms. Remember, not everyone qualifies for everything. In fact, most people don’t qualify for a lot of the tax deductions and credits out there. Unfortunately, some personal finance publications and websites could do a better job of letting you taxpayers know when they just won’t qualify for that really great “frequently missed tax deduction.” High Tax Deduction Floors One of the ways to waste a lot …

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2012 Tax Season

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Talking about taxes is always a little tricky for the first four months of the year. During that time, people usually mean the previous year’s taxes, which they are working on filing, but savvy financial folks are always planning and minimizing taxes, so they could be talking about the current year taxes too. Using the year doesn’t always help. Although 2012 taxes mean taxes that were incurred during 2012, folks filing 2012 taxes do so during 2013. That being said, the 2012 tax season refers to the taxes we are compiling and filing now, in 2013. The IRS started officially accepting tax returns on January 31st, the signs are out in front of H&R Block, and TurboTax deals have started showing up in ad forms everywhere. 2012 Tax Forms Depending upon how old you are, or more specifically, how long you have been filing taxes, you can remember back when getting paper tax forms was not done via the internet. Once upon a time you could get Form 1040, and others at the Post Office. When they stopped doing that, you could get them at most public libraries. If you still lived at the same address you filed from the previous year, you …

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Amazon Stock vs Apple Stock

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The stock market does not always make a lot of sense, especially over the short-term. Stock price changes occur for silly reasons a lot of times, whether a news event around the world, or the comments of a TV personality. I think perhaps the most instructive lesson comes from the fictional movie Wall Street where you can hear the financial news on a TV in the background explaining what happened with Blue Star Airlines stock, which, of course, is not at all what happened. However, over the long-term, the stock market tends to shake off the manufactured volatility from trading programs and over/under reaction to news and eventually move stocks in the general vicinity of where they should actually be priced. This can take a very long time; witness the completely irrational internet bubble of the late 90s, which lasted years. What makes trading stocks so tricky is that it doesn’t matter if you are right. All that matters is what everyone else thinks is right. Amazon vs Apple Earnings and Stock Prices One of the latest head scratchers that has everyone talking is what happened with Amazon’s stock price and Apple’s stock price following their earnings announcements and press …

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New Tax Withholdings for 2013

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The deal to avert the so-called fiscal cliff held most taxes steady for most taxpayers. This was, after all, the overlapping part of the political goals of Democrats and Republicans. Democrats wanted the Bush tax cuts extended for taxpayers making less than $250,000 per year, and Republicans wanted them extended for taxpayers at all income levels. The final deal keeps the tax cuts for more Americans than the Democrats wanted, and less than the Republicans wanted. To put a more specific point on this issue, however, is that the IRS issued guidance to businesses on December 31st to begin withholding higher amounts from worker’s paychecks. Since no deal was reached by the end of the year, the IRS had to move forward with the current law. On January 3, 2013, the IRS issued revised guidance that kept the withholding for everyone making under $400,000 (filing single), or $450,000 (married filing jointly), the same. Taxes Up for Everyone in 2013? Depending upon how you choose to view things, the fiscal cliff deal meant no tax increases for most Americans. However, most taxpayers will actually see a smaller paycheck in 2013. For part of President Obama’s stimulus plan, the amount employees pay …

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Finance Gourmet iPad WordPress App

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Did you know that there is a WordPress app for the iPad? I didn’t. While it doesn’t look like I’ll be able to type fast enough to write long personal finance advice blog posts, it does look like a handy little tool for keeping an eye on things and making smaller updates. Well, I guess this is a successful test of a new finance blog tool.

Why Facebook Doesn’t Count as Public Disclosure

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Reed Hastings’ post on Facebook does not count as public disclosure according to the SEC. The agency sent a notice to Hastings and Facebook to that effect soon after the post. Since then, Hastings’ defense has centered around the contention that the information was not material. No claim that a Facebook post is public has been made. Facebook Is Not Public Disclosure Regulation FD requires that publicly traded companies disclose all material information publicly. It prevents the practice of selectively telling Wall Street analysts or other people news about the company. While the technology community thinks otherwise, the SEC does not consider a post on Facebook as public for this purpose. The SEC published guidance in 2008 regarding the disclosure of material information online by publicly traded companies. A central tenet of that piece was that the company must make it clear that is does, and will, publish such information online. In addition, the company must make it clear WHERE such information will be published. Finally, investors must EXPECT that material information will be posted in such a location. Since 2008, most publicly traded companies have gone on to include in their traditional printed materials a notice stating that the …

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IRS Tax ID Number ITIN

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It seems that more than a few readers end up here on FinanceGourmet because they are searching for information about taxpayer identification numbers. As a result, they end up here where I discuss IRS tax id numbers for businesses, specifically, the EIN and FEIN numbers. While that article is a good discussion of business tax numbers, it leaves out an important tax identification number for individuals. ITIN Individual Taxpayer Identification Number For most people, your taxpayer id number is your Social Security number. The IRS requires to use your SSN for tax filing purposes if you have one. However, there are some people who need a tax id number to file documents or forms with the IRS, who do not have a Social Security number, and who cannot get one. For these people, the IRS offers a special Taxpayer Identification Number or ITIN. An ITIN is a faux Social Security number generated by the IRS specifically for the purposes of filing required tax documents. It is not a Social Security number and is not supposed to be used as one. Obviously, as a pseudo-SSN, it cannot be used for employment purposes or for filing for Social Security benefits. Likewise, is …

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