Archives for February 2018

When is a Worthless Stock Worthless

Writing Off Worthless Stock Investments

Nobody likes to see his/her stock investment decline in value. It is even worse when the hopefully next Apple or Google stock declares bankruptcy. Is there some solace in that the stock investment can be written off as worthless for tax reporting purposes?

While taxpayers can write off as a deductible tax loss a wholly worthless security held by them, they cannot claim a loss when the stock becomes partially worthless. The challenge is to determine the year in which the stock becomes wholly worthless. The loss can be claimed [Read more…] about When is a Worthless Stock Worthless

Gig Economy Continues to Grow

Tax Trap for the Unwary

For purposes of this posting, let’s define the gig economy as workers who are primarily freelancers or independent contractors who have chosen to work for themselves for a variety of reasons, which could include the flexibility to work when and where the person desires, work only on projects of interest, or for work-life balances.

The National Bureau of Economic Research reported that 95% of employment growth in the U.S. between 1995 and 2015 was in the gig economy. A study by McKinsey Global Institute found that between 20% and 30% of workers are engaged in some type of independent contractor work. Intuit, the software company that offers QuickBooks software for business owners, estimates that the number of on-demand workers will more than double by the year 2020. The study also showed that 79% of existing on-demand providers are part-time workers and that this market will grow by 18.5% a year over the next five years.

Since the majority of self-employed individuals operate as a Sch. C business, they need to realize that there are some very significant differences between a self-employed business worker and an employee working for an employer. Self-employment means that the worker is responsible [Read more…] about Gig Economy Continues to Grow – Tax Trap for the Unwary