Many people use the terms “MLM” and “pyramid scheme” interchangeably. And while they’re not entirely the same thing, some MLM companies are pyramid schemes and in violation of federal law. An illegal pyramid scheme is a company that recruits distributors, just like an MLM would. But in the case of a pyramid scheme, participants can’t really make money selling a product or service; rather they make money by recruiting new distributors to join under them....
A bond can be purchased from the original issuer—a corporation or a municipality, for example—or from another party that purchased the bond but does not wish to hold onto it until it matures. When a bond is purchased from the original issuer, it is typically purchased at its face value. When a bond is purchased on the open market, it is purchased at its current value, which is affected by current interest rates....
Budget billing means your utility company (like the power or gas company) will offer you a set amount due each month for a certain utility. To determine this amount, the company will add up the amount you spend last year on that particular utility, then divide that number by 12, assuming that your usage will generally stay the same. While budget billing may seem to be a great idea to help you with your budget, carefully consider several things before you sign up....
A person who purchases shares of stock in a company has equity ownership in that company. The total number of shares outstanding that are available for trading is known as the “public float.” If the company decides to issue additional shares of stock in a secondary offering, the float increases and the value of shares held by the initial shareholders decreases. For example, electric carmaker Tesla has issued new shares of stock numerous times since its initial public offering (IPO) in 2010....
For example, when exercise equipment company Peloton Interactive, Inc. recalled all of its treadmill models due to safety concerns in May 2021, it filed Form 8-K with the SEC explaining its action and what steps consumers could take. Below is a sample from Peloton’s Form 8-K: Who Uses Form 8-K? Companies use Form 8-K to file major events with the SEC. Both individual and institutional investors can use Form 8-K to better understand the company they’re investing in....
In theory, IRC conformity simplifies a state’s implementation of its own tax policy—and tax preparation for individuals—by using federal taxable income as a base point. Modifications are made from there to adapt to state policies and revenue needs. Here’s a 2020 example from The Arizona Department of Revenue, which publishes a yearly update on its website as to the state legislature’s decisions regarding IRC conformity: How IRC Conformity Works Because IRS tax codes change annually, state tax conformity statutes are typically updated each year as well....
You must file Form 4137 with your tax return if any amount appears in your W-2’s “Allocated Tips” box (Box 8). Unfortunately, in some cases, reporting and paying tax on allocated tips can create a significant tax bill. You could potentially end up having to pay a penalty if you pay late because taxes weren’t withheld by your employer at the time you received the tips. Who Uses Form 4137?...
Typically, mediation covers a wide range of disputes, according to attorney John Shea, who spoke with The Balance by email. Dispute areas include: CustodyParenting schedules Division of assets (real estate, personal property, etc.) Child supportAlimonyRetirement benefitsHealth insuranceLife insurance You may even be able to resolve your issues in your first session with the mediator. Once you’ve reached your resolution, it takes around two weeks for your mediator to draft a settlement agreement and send it to you and your spouse....
Learn what presidential election cycle theory is and what it means for individual investors. Definition and Example of Presidential Election Cycle Theory Presidential election cycle theory is a stock market performance theory that claims, based on historical data, that stock market performance in the first two years of a U.S. president’s term will likely outperform stock market performance in the last two years of a U.S. president’s term. Some have suggested this is because presidents seeking reelection focus on economic stimulus in the last half of their terms....
Who Uses Schedule C of Form 1040? Businesses that operate as a sole proprietorship or a single-member limited liability company (LLC) must fill out Schedule C of Form 1040. Taxpayers who earn income from a personal business, such as freelancing or independent contracting, are also considered by the IRS to be self-employed. Where To Get Schedule C You can find Schedule C of Form 1040 on the IRS website or anywhere else where you may find free tax forms....
Even though it was released by FICO more than a decade ago, Score 8 is the version utilized most often by all three of the major credit reporting companies: Equifax, Experian, and TransUnion. These for-profit companies, which are also referred to as “credit bureaus,” compile credit reports on borrowers, and each one offers its own FICO credit scores based on the credit information it has available. Lenders look at a potential borrower’s credit reports and credit scores to make decisions about mortgage, car loan, and credit card applications....
Sounds simple enough, but like any model, the Gordon Growth has assumptions built-in. It works well in some circumstances but not in others. Learn how the model works, when it’s useful, and what its limitations are. Definition and Examples of the Gordon Growth Model There are two ways you can go about valuing a stock. You can use a relative valuation to other stocks, similarly to the way you would value your home using comparables....
Understanding current tax rules regarding higher education expenses help students and parents save thousands of dollars. Definition and Examples of the Hope Credit The Hope Credit was a tax credit for college students that offered up to $1,500 (increased over time to $1,800) that students could claim for the first two years of higher education. The credit was created as part of the Taxpayer Relief Act of 1997 and was in effect from 1998 to 2008:...
Learn more about the opening bell and what it signifies. Definition and Example of the Opening Bell Stock market trading begins at a set time on all exchanges. The opening of trading usually starts with the sounding of a bell. This is where the term “opening bell” comes from. For instance, the New York Stock Exchange (NYSE) opens at 9:30 a.m. ET. This is when the opening bell is rung both physically and metaphorically....
Hannah Mentz / Getty Images Exporting TXF data from your financial software and then importing it into your tax software saves time that you would otherwise have to spend entering data into the tax software to prepare your income tax return. The TXF file extension has also been used for compressed archive files, which combine multiple files into one that can be compressed. Alternate name: Tax exchange format One example of TXF includes software that reduces or eliminates redundant tasks....
Depending on the source of information, there are generally six accepted stages of a supply chain. The stages relative to vertical integration are materials, suppliers, manufacturing, and distribution. One example of a company that is vertically integrated is Target, which has its own store brands and manufacturing plants. It creates, distributes, and sells its products—eliminating the need for outside entities such as manufacturers, transportation, or other logistical necessities. Manufacturers can also integrate vertically....
Weekend Images Inc. / Getty Images Beacon scores are based on personal financial information included in Equifax credit reports. Lenders may use different versions of the Beacon credit scoring model when deciding whether to approve you for loans or lines of credit. For example, Fannie Mae’s mortgage underwriting process uses the Equifax Beacon 5.0 score, along with the Experian/Fair Isaac Risk Model V2SM, and the TransUnion FICO Risk Score, Classic 04....
High Demand Demand for oil and gas typically follows a predictable seasonal swing. Demand rises in the spring and summer due to increased driving for summer vacations. Demand drops in the autumn and winter. Even though heating oil use rises in the winter, it’s not enough to offset the post-vacation drop in gasoline demand. Commodities futures traders anticipate increased demand. They usually start bidding oil prices higher in January or February....
Partnership Agreements Defined When you form a partnership, the most important document is a partnership agreement. Partnership agreements are legal documents subject to state laws, and each state has different requirements for language in these agreements. The partnership agreement sets out all the terms and conditions agreed to by the partners. In this document, every possible contingency is included. The following is a list of points to be covered when preparing your agreement....
The schedules are a portion of the paperwork that’s required to file for bankruptcy relief. They’re actually a series of documents that every debtor (the person filing the bankruptcy case) prepares and submits to the bankruptcy court. Together, they form a snapshot of your financial circumstances as of the day you file your case. Schedule A Bankruptcy Schedule A/B, Official Form 106 A/B, requires that you list all of your real and personal property....
