Dow Drops 500 Points as China Punches Back in Trade War

Written by adminAugust 5, 2019
Politics

In an escalating trade war, nobody wins until a deal is done and the war is finished. There are casualties on both sides as both Pres. Trump and China’s President Xi continue to trade blows in an attempt to declare victory over the other. The problem is, China and the United States are both two of the world’s largest economies. This isn’t settling well with the rest of the world.

After Pres. Trump threatened to add new tariffs on Chinese goods, Beijing responded in a way that shows that they will not take this lightly. As Americans woke up this morning, the Dow futures were tanking upon news that China was going to allow their currency to sink to a new historical low. They are also telling state-owned companies not to buy U.S. agricultural products, signaling that the uneasy truce declared a few weeks ago is now over.

By lowering the value of the Chinese Yuan, it makes Chinese goods much easier to buy from foreign countries because those products are much cheaper. This is really one of the main areas of attack for China, as the United States dollar is one of the strongest currencies out there. That means more people are going to be buying Chinese products because they’re cheaper.

Recently, Mexico took the place of China is our country’s top trading partner. The number of imports we have coming from China has fallen about 12% at the start of the year. That means we’re buying less Chinese goods. The Pres. Trump is not happy about what he calls “currency manipulation.” It’s these tactics that have forced him into fighting this trade war to begin with.

“China dropped the price of their currency to an almost historic low,” Trump tweeted on Monday. “It’s called “currency manipulation.”

New Tariffs

Despite receiving many objections from his own advisors, Pres. Trump announced that he would place a 10% tariff on all remaining Chinese goods beginning September 1. Even stated that he could do much more than he is when it comes to placing tariffs, threatening that he could go from 10% to 25% or higher. He’s already backed up his threat by placing a 25% tariff on over $250 billion worth of Chinese goods, escalating the matter further.

One weakness China knows the US has is the impact of the trade war on our agricultural products. Our farms have taken a major blow, forcing the government to send billions of dollars in aid to our struggling farmers. A wetter than average spring also forced many farmers to get a late start on planting, if they even got a chance to plant at all, which will only add to the chaos come harvest time.

This is probably why Beijing also ordered state-owned companies to stop buying US agricultural products. This puts even more pressure on the system. China used to be the largest buyer of US soybeans, as much a 70%. But soybean imports to China have fallen 97% since the start of the trade war.

“China has strategically gamed the tariffs by slashing their prices and by devaluing their currency,” White House trade advisor Peter Navarro told “Fox News Sunday.”

“Since the tariffs were put in place back in 2018, the Chinese yuan fell by almost 10 percent, so they have offset virtually all these tariffs and the consumers are not seeing any price hikes in any significant way … We could have a bigger question about whether tariffs, in general, might cause rising consumer prices, but not in this case.”

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How to Prevent a Tax Offset from Your Student Loan Debt

Written by adminJune 26, 2019
Student Loan Consolidation

One of the worst things about that paying your student loan debt is that the government will try to get its money any way it can. They don’t care what you’re going through or dealing with. As long as they’re getting their money, they’re happy. But if you go into default and start struggling to pay back your loans, they will come after you.

The process is such a burden on so many Americans that every single Democratic candidate is making student loan debt one of their top priority campaign issues. One of the ways that come after you is by stealing your tax refund right out from underneath you. The Department of Education will refer your account to the Department of Treasury for collection. They can even steal your spouse’s refund.

So, if you owe the Department of Education any money, they won’t hesitate to take your and even your spouse’s tax refund to get what they’re owed. That can cost you thousands of dollars, especially if you’re expecting a tax refund this year. The best thing to do, especially if you’re well into default, is to expect this to happen and not to receive your refund. But, if you need your refund, there are a few ways around it.

The first step in knowing whether your taxes will be offset is whether the department has issued your defaulted student loan with a collection agency. This collection agency one sure that your refund is withheld by the IRS to go directly into student loan debt. Using this method, the IRS must send you a letter with the proposed offset so that you can see for yourself where your money is going.

How to Prevent the Offset from Happening

You may not have any choice in the matter, as the government will get their money anyway they can. But there are a few ways that you can help prevent them from stealing your tax refund. One of those ways is getting back on the books and out of delinquency. There are several ways to do this, but you must return to paying your monthly payments.

The first is by consolidating into a direct loan program. This mean that all of your loans are bundled up with a new lender, essentially pulling alone out of default and forcing it into good standing. You’ll even be able to choose the right type of repayment program that is right for you so that you’re not paying more than you can afford each month.

There’s also the long way of rehabbing your standing with your lender. You have to come together and agree on a new affordable and reasonable repayment plan and get back into making on-time payments. It might take about nine months to get back in the green, but at least doing something and they won’t steal your tax refund from you.

It’s important to understand that your student loans are your responsibility. It’s not a responsibility that you can or should try to avoid. Not paying your student loans will always hurt you in the end. Whatever you have to do to get current, do it. Re-consolidate your loans, refinance your loan, pick up the phone and talk to the creditor and work out a better deal.

These are simple solutions for taking care of a complex problem. Sitting around waiting for the government to make all the decisions for you will not help you. We may never get a new law that wipes away all of our student debt regardless of what presidential candidates say. Take a look at the options you have and go from there.

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How Often Do Americans Cheat on their Taxes?

Written by adminMay 30, 2019
Taxes

It can sure be tempting, right?

It wasn’t but a few years ago that an article came out claiming that Americans spend more on their taxes than they do housing, clothing, and food combined.

Of course, it depends on your income bracket. If 35% of your budget goes towards food, rent, and clothing, but you’re under the poverty line, you’re not paying another 35% in taxes. But, on the flip side, there are a lot of Americans paying more than that, especially the more they make.

The tax rate in the United States was at 39.6% before the recent tax reform law was passed this winter. Paying 40% of your income to the government isn’t exactly ideal for anyone, but it gets worse.

Our 7-bracket system is a nightmare to navigate. If you happen to make a little extra, receive a large gift, or have a quick side job, it can push you from the top of one bracket into the bottom of the next, increasing the rate you pay.

Do Americans Cheat?

Does this mean Americans are more likely to push the envelope by fibbing on the amount of money they made?

According to a survey conducted by Credit Karma Tax, despite heavy complaints about high tax rates and the complicated system, the vast majority of Americans do their due diligence and pay their taxes honestly.

94% of those surveyed said they never cheated on their taxes knowingly, with 6% admitting to small fibs in areas where they didn’t think it mattered much.

The survey, as a means of measuring the honesty of those surveyed, asked if they ever cheated on a significant other, their diet, or on tests. The fact that 20% admitted to cheating on a spouse, 25% on tests, and 56% on a diet reveals a lot about us, but only 6% on taxes reveals a lot about us.

“Americans overwhelmingly value honesty when it comes to filing their income taxes, even if we’re willing to cheat on our diets and other aspects of our lives,” said Credit Karma Tax spokesman Rick Chen, in an interview with Fox Business.

How did the 6% respond when asked how they cheated? Here’s what they said:

-3% of them claim they didn’t report any gambling wins.

-5% paid an employee under the table.

-5% didn’t report gifts.

-7% exaggerated on the number of dependents they had.

-7% didn’t report the income they made under the table.

As much as we hate paying taxes, there seems to come with it a sense of civic pride. We enjoy the good things that come with being an American, like having good roads, the best military in the world, great schools, and beautiful communities.

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Why You Should Consider Using Your Tax Refund to Pay Off Debts

Written by adminMay 3, 2018
Saving

We understand the temptation. From the moment you send in your taxes, your mind goes straight into thinking about how you want to spend that money.

Did you want to put that down payment on a new car? Are you thinking it’s time to upgrade your wardrobe? Are you going to sock it away for that family vacation?

Hey, you won’t receive any judgment from us! We completely get it. Yet, we’re here to advise you that maybe there is a better option for that money than buying more stuff, which is to put it towards your debt.

It’s certainly not the sexiest of options, or the most fun, but it can certainly save you a lot of heartache in the long run.

Here are three excellent reasons why you should put your tax refund towards your debt:

1) It Will Show You’re Serious About Your Debt

If you have debt, then you know that the quicker you pay it off, the less you’ll pay on it over time. The longer you have the debt, the more interest you’ll have to pay on it. The difference between paying it off early or not can be thousands of dollars in additional interest added. That means you’ll have more money in the long run.

If you have a lot of debt, it doesn’t make sense blowing your refund on a large vacation or adding to your debt by getting a new vehicle. Not to mention, paying a large chunk of it down can only help your credit score. Putting your refund towards your debt shows you’re becoming financially responsible.

2) Savings Might Get Spent

Putting money into your savings or rainy-day fund is always a good idea. You never want to go without an emergency fund stashed away. If you have no emergency savings, then it’s a decent option, but what you put into savings might be difficult NOT to spend. People have a difficult time saving money because the temptation is there to use it on frivolous things.

If you put it towards your debt, then it’s spent and a large chunk of your debt is gone, which is ultimately the best option. It might sting a little bit right now, but later on, you’ll save more money in the long run getting your debt paid off sooner.

3) There Are Better Ways to Save for a Vacation

One of the top ways people spend their refund is on a vacation. There’s no doubt that you deserve one after working hard all year, but there are just better ways to pay for it. A vacation is fleeting and won’t be something tangible to invest your money in. You might get a sick tan, but you’ll still have the same amount of debt as you did when you went in.

The best option is to pay off a chunk of debt and find another option for a vacation. Maybe take a shorter weekend trip somewhere until you have your debt paid off. Your vacation doesn’t have to be super expensive. Maybe pick up a small side job for a few months and sock away the money for a nice trip or save as much money as you can throughout the year

Either way, going on vacation while you have a ton of debt isn’t the most responsible decision someone can make. Adding to your already significant debt isn’t good either. The best thing you can do is buckle down until your debts are paid off. You’ll have a lot of time in the near future to enjoy debt-free living!

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Not Going to Make the Tax Deadline? Here’s What You Should Know.

Written by adminApril 17, 2018
Taxes

Today is the day. Tax Day. The bane of every American’s existence.

Every year, 80% of the population manages to get their returns in on time to receive their refund. It’s such a complicated and frustrating experience that most Americans wait until the deadline to get it done.

According to Ted Kurlowicz, tax professor at The American College of Financial Services, the best plan of action is to pay your taxes right away. People often miss the deadline because they didn’t have the money to pay by the deadline or they just ran out of time, an error that can get quite expensive.

“You should do the least harm and file as soon as possible and pay the tax as soon as possible,” said Kurlowicz during an interview with Fox Business. “The late-filing penalty could actually be higher than the late-tax-payment penalty so you should file as soon as possible to do the least harm to your personal finances.”

The amount you can pay if you’re late is 5% of what you owe each month, up to about 25% of the total. Moral of the story: if you don’t want to pay more than what you owe, don’t procrastinate!

What about the 20% of people who don’t file on time? Will the IRS come pounding on your door and threaten to haul you off to tax prison?

The simple answer is no. It’s okay to miss the deadline, but there are a few things you must do to stay compliant.

1) File an Extension.

If you need more time to get your taxes in, the government understands. Not everything works perfectly, even if you were 100% prepared to have your taxes prepared by the 17th. Maybe there was a problem with filing and they’re waiting for assistance. Sometimes it takes a little longer to get all your sources of income identified so you can complete your taxes on time.

Either way, the IRS has graciously offered an extension, giving you until October 15th. To take advantage of this, you must submit Form 4868 the moment you realize you might miss the due date.

While you have until October to send in your proofs, that doesn’t mean you have that long to pay what you owe. The due date to pay is still April 17th and they will expect you to pay at least 90% in order qualify for the extension or you will probably get hit with nasty interest and late fee charges.

2) Take the Situation Seriously

If you know you’re going to be late, the best thing you can do is be proactive. You know the tax man is going to come. They will not just forget you owe them money and leave you alone. They WILL come for you, but if you want to lessen the penalties/burden of paying late, then do everything you can to show you’re trying your hardest to remedy the problem.

Again, the IRS understands the things happen. Hardships come and go. As long as your open and honest about what’s going on, pay as much as you can, file an extension as early as possible, you can usually negotiate a settlement.

3) Get Help

Tax time is stressful for everyone, but it’s especially true if you’re unsure about whether you can pay on time. You might even have April 17th with skull and crossbones marked on your calendar drawn with a black Sharpie. If there’s any question or stress over filing (especially if you’re working a new job or started your own business and just aren’t sure), get help!

Yes, it will cost you a little bit, but not paying on time will cost you a lot more in the long run. There are thousands of amazing tax advisors out there, along with new software that makes filing easier than ever.

Happy Deadline!

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