There are other criteria useful for determining immediate family besides blood and lineage. Some of the more common are: How Does Immediate Family Work? The composition of immediate family for a person may vary for different legal or financial purposes. For example, if you have a family member receiving care at the hospital, you may be required by hospital rules to be an immediate family member in order to have visitation privileges....

Risk and reward usually go together. If you take a risk, you pay a price when things go badly, and you can come out ahead if the risk pays off. But when “moral hazard” is at play, things work differently. For example, an insured person or organization may have an incentive to take more risks than they otherwise would, because they don’t have to pay for them. If they take a risk and it goes well, they win....

Alternate name: Coefficient of determinationAcronym: R2 R-squared does not measure how well a mutual fund or your portfolio performs. Instead, it compares your portfolio’s returns to a benchmark and expresses that as a percentage between 1 and 100. The higher the figure, the more your portfolio mirrors the index or benchmark. For example, an R-squared of 100% means that your mutual fund’s growth (or decline) is fully in sync. For example, the S&P 500 stock market index is mirrored by the Vanguard 500 Index Admiral (VFIAX)....

For example, the company might merge with or purchase another business, and the outcome could affect both cash flow and profits. Alternatively, the organization might need to make a major equipment purchase, and it’s important to know the financial impact of that transaction. In both cases, a pro forma could detail the expected results. Alternate name: Pro forma financial statement While pro forma often refers to assumptions about future events, it can also refer to financial reports with irregular transactions removed....

Property insurance is a contractual agreement between the insurer and the insured. The insured makes premium payments to the insurance company each month or year. In return, the insurance company agrees to protect the customer from financial loss in the case of damage to the customer’s property. Policies for individuals can cover only a dwelling’s exterior, the exterior and interior, or the interior only. Property insurance for owned property covers the structure itself and your property inside....

Typically, a county or city assessor sets property values, and the county treasurer collects property tax payments. Depending on the location of a property, the relevant jurisdiction will typically send a property tax bill to the property owner based on the assessed value, payable in quarterly, annual or biannual payments. Property taxes are an example of an ad valorem tax and are calculated based on a property’s assessed value. The assessed value may equal what the property would sell for on the open market, depending on local tax rules, or a percentage of that market value....

Alternate name: Equity analysis Stock analysis can fall into one of two categories, or it can be a mix of both. Fundamental Analysis This type of stock analysis looks at a company’s fundamentals, meaning the business and financial information that ultimately tends to affect stock prices. For example, fundamental stock analysis might include analyzing a company’s quarterly revenue growth to make predictions about whether the stock is a good investment at this time....

The amounts within retirement and college education accounts often grow without the growth being subject to income taxes. There’s usually some type of tax advantage when withdrawals begin, too. An Example of Tax Recapture You get to claim tax deductions or tax credits over the years when you contribute to a college 529 savings plan with the promise that the money will be used for your child’s educational purposes. The gains portion may be subject to a federal income tax penalty if that’s not what the money is used for....

For example, paying a toll accounts for how much someone drives over a certain road or through similar infrastructure. The more frequently you drive that road, the more often you’ll pay the toll. Other taxes, such as fuel taxes, are also somewhat based on benefits received. After all, the more you drive, the more gas you need to purchase. Each time you purchase gas, you pay a gas tax of 18....

CAPM was a breakthrough because it was the first model to measure the relationship between risk and return, so investors could set expectations. CAPM was introduced in the early 1960s as a way to calculate expected returns based on risk. CAPM represented two major innovations in financial theory, Dr. Thomas Smythe, Professor of Finance at Florida Gulf Coast University told The Balance in an email. “First, it breaks risk into its two components: unsystematic risk (risk unique to the firm) and systematic risk (risk that all stocks are exposed to),” Smythe said....

The exclusion for tax year 2022 is $12.06 million. For 2023, the exclusion amount is $12.92 million. Any funds after that will be taxed as they pass on to heirs, at a rate that varies by the amount being passed on. Learn how the estate tax has changed over time, the impact it has, and how it can impact you at tax time. Changes in Estate Tax Over Time The amount an estate can pass on before facing taxes is known as the “lifetime gift tax exemption....

At the end of the third quarter of 2022, the U.S. debt-to-GDP ratio was 122%. How Do You Calculate the Debt-to-GDP Ratio? To get the debt-to-GDP ratio, you divide a nation’s debt by its GDP. You can use several sources to find the information you need to calculate a country’s GDP. For example, you can use the U.S. Treasury’s Debt to the Penny website, which gives a complete breakdown of how much the government owes....

Collecting and processing tax returns that individuals and businesses file.Making sure you pay any taxes that are due.Issuing refunds if you overpaid taxes during the year.Overseeing certain retirement plans.Conducting criminal investigations.Guiding you through your tax payment process and any tax issues you may have. What Does the IRS Do? In 2021, the IRS dedicated 36.7% of of its total budget to enforcement, and 37.3% of its total budget to operations support....

Alternate name: Variable supplementary medical insurance premium Say the Medicare Part B premium rises from $225 one year to $250 the next year. The SSA announces it won’t increase the Social Security COLA in the upcoming year, which means that the Part B premium increase is bigger than your COLA. Because of that imbalance, there’s a good chance you’ll be eligible for the hold-harmless provision if you can meet certain income requirements....

The U.S. Treasury Department manages the trust funds under the direction of a six-member board. Each year, the board reports to Congress on the financial and actuarial status of the trust funds. How the Social Security Trust Fund Works Three sources of income fund Social Security: payroll taxes, interest on excess funds held by the Treasury, and taxes on benefits for current beneficiaries. Payroll taxes are the primary source of funding for the trust funds....

How the Transportation Sector Works The transportation sector is comprised of several types of companies within the transportation industry: Air freight: Companies that provide shipping and logistics services requiring aircraft carriers.Airlines and aviation services: This can include companies that service or manufacture airlines, air traffic control systems, heliports, and landing strips.Marine transportation: Companies involved in transporting goods or people across waterways.Highway and motor carriers: Companies involved in transporting goods or people across highways and roads....

While USMCA continues to aim to eliminate trade barriers as NAFTA did, it takes additional measures to address key issues like U.S. job losses in the automobile industry, rules surrounding e-commerce, and intellectual property rights. Let’s take a closer look at what the USMCA covers. Definitions and Example of the USMCA The USMCA, or United States-Mexico-Canada Agreement, is a free trade agreement that replaced the North American Free Trade Agreement (NAFTA)....

To better understand how thematic investing works, let’s take a look at large international brokerage firm BlackRock’s thematic investing philosophy as one example. Its philosophy for thematic investing focuses on a few different megatrends, all of which are driven by technological breakthroughs. These include: Rapid urbanizationClimate change and resource scarcityShifting economic powerDemographic and social change There’s a growing interest in thematic investing, as it fills a need to identify future drivers of return from equity investments....

Understanding APR APR is an annualized rate. In other words, it describes how much interest you’ll pay if you borrow for one full year. Let’s say you borrow $100 at 10% APR. Over the course of one year, you’ll pay $10 in interest (because $10 is 10% of $100). In reality, though, you’ll probably pay more than $10. You might not borrow for an entire year, or the amount that you borrow might change throughout the year (as you make purchases and payments on your credit card, for example)....

Follow these below steps if your account has been sent to debt collections. You will need to ask for a statement from the debt collections company that outlines the original amount of the debt, as well as any fees that have been added to your account. You may be surprised at the fees that can accumulate with an unpaid bill. If a collections company contacts you and tries to collect a debt on an account you do not remember having, be sure to request account information to ensure it’s really yours....