Any U.S. firm or company will need your name, address, and tax identification numbers to facilitate payments to you and any tax withholding that might be required by the U.S. government. This information is obtained when you complete and submit Form W-8BEN. Form W-8BEN also allows people from countries with which the U.S. has agreements to claim exemptions or special withholding rates. This means that Canadian independent contractors can claim an exemption from withholding....

Alternate name: Normal retirement age For example, if you start collecting benefits at age 62, the earliest age at which you can collect, you could see up to 30% reduction in full benefits. If you delay benefits until after your full retirement age, your benefits are increased thanks to delayed retirement credits. These credits can increase your benefits by up to 8%. How Does Full Retirement Age Work? Full retirement age is not the same age for everyone....

What Is Gross Profit? The gross profit of a business is simply revenue from sales minus the costs to achieve those sales, or, some might say, sales minus the cost of goods sold. It tells you how much money a company would have made if it hadn’t paid any other expenses, such as salaries, taxes, copy paper, electricity, water, or rent. Gross profit (as distinguished from net profit) will not include items like interest paid on loans or debts, taxes, depreciation, or amortization....

One plan, income-based repayment (IBR), can benefit those who have a high debt amount relative to their income, and who need to limit their monthly payments to a portion of their discretionary income. Let’s take a look at the basics of this plan, and review who might qualify for the program. What Is the Income-Based Repayment Plan? With income-based repayment, you pay either 10% or 15% of your discretionary income....

If you have ever made nondeductible contributions to an IRA, SEP IRA, or SIMPLE IRA, you’ll also need to use Form 8606 to report any distributions you take from these accounts, along with all Roth IRA distributions. Form 8606 isn’t required when you contribute to a Roth IRA, because those contributions are never tax-deductible, but the form is required if you convert a traditional IRA, SEP, or Simple IRA to a Roth IRA....

Understanding how limited liability works is important if you are in the beginning stages of forming your business. Learning about the benefits can help prepare business owners as they make decisions about their business structure upon registration. Whether you’re leaning toward running a sole proprietorship or planning to operate a limited liability company, understanding how limited liability works can impact how you decide to conduct business. Limited liability is a structure used in business to protect the owner’s assets, and the investors’....

In comparison, your net income is your income minus any taxes, benefits, and pretax contributions. Your net income is a more accurate reflection of how much money you have available to spend. Once you know your net income, you can use that information to create a monthly budget and pay for living expenses. Example of Net Income When you’re hired for a new job, you may sign on for an agreed-upon annual salary....

While bonds are higher in priority of payout than preferred stocks, preferred shares have priority over common stock dividends. Most companies do not offer preferred stock, but many of those that do are banks and insurance companies, for example. How Does Preferred Stock Work? If a company needs to liquidate assets in a bankruptcy proceeding, preferred stockholders will receive their payments before the common stockholders (but not before the creditors and bondholders—in that order)....

Some states might require that you make estimated tax payments to your home state on your own. Your employer won’t withhold any taxes for other states and forward them to that state, even if they have reciprocity. You’re still the one responsible for making sure your home state gets paid. You may still need to file a second tax return to claim a refund of taxes that were wrongly withheld....

Reskilling programs may target new workers, who will onboard directly from training into available roles at the organization. Alternatively, it may focus on current employees, who will transfer to new jobs within the company once their training is complete. In reskilling, participants learn an entirely new skill set, usually to take a new job. In upskilling, workers improve their current skills on an ongoing basis. Many jobs, especially in technology-dependent industries, demand regular upskilling....

These services might be offered at a local branch or online. They can include daily deposits and withdrawals, checking and savings accounts, loans, credit cards, and more. Retail banking is designed for the everyday needs of the average consumer. Alternate name: Consumer banking, personal banking How Retail Banking Works Retail banks handle financial needs for everyday spending and life events, such as buying a home. The products and services that retail banks offer include:...

Settlement risk is most common in the foreign exchange market. Let’s go over how it works, a few examples, and how to mitigate the risk. Definition and Examples of Settlement Risk Settlement risk is the risk that the counterparty in a transaction will not deliver as promised even though the other party has already delivered on their end of the deal. Settlement risk is a subset of counterparty risk and is most widely considered in the foreign currency exchange markets....

In a normal market economy, slow growth prevents inflation. As a result, consumer demand drops enough to keep prices from rising. Stagflation can only occur if government policies disrupt normal market functioning. The federal government manipulated its currency to spur economic growth. At the same time, it restricted supply with wage-price controls. In 2008, the Zimbabwean government printed so much money it went beyond stagflation and turned into hyperinflation....

Fortunately, we live in a time with more data and information than ever. We’ll help you figure out whether your upcoming pay raise is fair and, if not, what you can do about it. The Average Annual Pay Raise Your average annual pay raise depends on several factors. But in general, according to the U.S. Bureau of Labor Statistics, average compensation in the U.S. increased in 2022 by around 4....

“Procedurally, it’s easier for the owner of an apartment building that started as a rental to convert into a co-op than to a condo,” said Peter Palion. Palion is the CFP and founder of Master Plan Advisory in East Norwich, New York. Other hotbeds for co-ops include San Francisco, Atlanta, Boston, Seattle, Detroit, Chicago, Tucson, Phoenix, and many cities in Florida. But what are the differences between condos and co-ops?...

Pew Research Center defines the middle class as adults whose annual household income is two-thirds to 200% of the national median (adjusted for household size and local cost of living). For 2020, the median household income in the U.S. was $67,521. This meant you were considered middle class if you made $45,014 to $135,042. The Brookings Institute defines the middle class as the middle 60% of households (or middle three quintiles) on the income distribution scale....

The rule of 70 is commonly used to compare investments with different annual interest rates. This makes it simple for investors to figure out how long it may be before they see similar returns on their money from each of the investments. Let’s say an investor decides to compare rates of return on the investments in their retirement portfolio to get an idea of how long it may take their savings to double....

The TSX Venture Exchange serves as a public venture capital marketplace for emerging companies. Canada’s rich natural-resource sectors spawn many new ventures that become listed on the TSX. Before 2001, the exchange was known as the Canadian Venture Exchange (CDNX), but the TSX Group purchased the exchange and renamed it. The TSX Venture Exchange deserves a closer look if you are in the U.S. and looking for a foreign exchange to invest in....

Learn how trading flat works, what it means for your portfolio, and what to do when it occurs. Definition and Example of Trading Flat The term trading flat can slightly vary in meaning, depending on which context it is used in. If someone is using the term in relation to a market or exchange, then trading flat refers to the fact that the exchange index has been unchanged for a certain amount of time....

Alternate name: Average lifeAcronym: WAL For example, let’s say a lender calculated a WAL of 5.0 years on an outstanding term loan. That indicates it would take five years for half of the outstanding principal amount to be repaid. The lower the WAL, the lower the risk for the lender. “While borrowers make principal and interest payments towards their loan balance, only principal payments are taken into account when calculating the WAL,“ Viktor Viktorov, the CEO of REINNO, a commercial mortgage lender in Massachusetts, told The Balance in an email....