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Who knew? Tax talk can be used for more than just political debates

(BUSINESS FINANCE) Knowing how states collect taxes can help individuals and companies decide where to start or where to move. Do you know about your state?

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Time to talk about taxes

Don’t run! I promise, this will be neither a) a godawful political screed on how The Fedral Gubmit should or should not be dealing with your funds nor b) a dust-dry finance tract riddled with the kind of economic obscurities that would make Andy Dufresne doze off.

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Instead, courtesy of Pew Charitable Trusts, here’s an easy-to-read breakdown of how and how much every state in the Union bring in their taxes.

8 flavors of taxes

Per Pew, state taxes come in eight conveniently color-coded flavors:

Personal income, the “ouch” that comes with the paycheck, the money taken out of what individual citizens earn.

Corporate income, the literal cost of doing business.

General sales, a little bit of extra money charged for (almost) everything. When by some weird, wee little number the price tag matcheth not the receipt, this is your guy.

Licenses, the little extra fee you pay for your official license to do anything worth licensing. Hunting, marriage, surgery: if you want the government to recognize that you can do it, pony up.

Other, where the tax code honors what makes your state… what’s a nice word? Special. What makes it special. Nevada skims about 8% of its annual revenue off casino and lottery winnings. That kind of thing.

Property, tax paid for the privilege of actually owning a thing, rather than borrowing it, renting it, or just generally hanging out with, on or by it.

Selective sales, tax applied to particular products as opposed to just everything. Rates are usually higher than general sales, and they’re frequently applied to things your state would rather you use less of. Alcohol, gasoline and tobacco are the big hitters.

Severance, the tax you pay for pulling nonrenewable resources out of a state so you can sell them, because then they’re not there anymore.

Matt’s Glossary of People Taking Your Money

What’s the value of Matt’s Glossary of People Taking Your Money, you ask?

The value is that understanding how the tax structure works, and above all what places do it in which ways, is how you keep as much of your coin as possible.

Try it like this

Imagine, if you will, the life of a prospector in North Dakota. I assume you have a mule, some overalls, one of those helmets with the little light on it (I have never been to North Dakota).

Like any self-respecting member of your profession, your dream is a comfy digging operation where you can cook your sourdough and play your harmonica in profitable peace.

Before you pound in your tent stakes, it might just be worth your time to know that your home state makes 41.8% of its tax revenue in severance tax, which is to say, taxes levied on your business model. Hop the border to Montana? 6.3%. Oh, and if you can find something to dig up in Iowa, guess what? No severance tax. At all.

That’s how it works everywhere

AG’s beloved home of Texas lives and dies by general sales tax: 62% of state tax revenue. There is no, repeat no, personal income tax at the state level. Instead, we charge 6% extra on everything. That makes Texas utterly rad if you roll with comparatively high income and comparatively few purchases.

By contrast, Oregon gets 70% of its state income from personal income tax.

Ouch, right?

But there’s no sales tax. If your lifestyle, business plan or both involve a whole lot of buying and selling, going Evergreen rather than Lone Star, much as I hate to say it, could be what it takes to bring your business to life.

That’s why this matters

“Taxes” aren’t one thing. They’re a field, a complex interaction of policies, and understanding how – and where – they work is make-or-break knowledge for any serious entrepreneur.

Dig in the right spot.

#MattsGlossary

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Business Finance

Facebook is raising funds to launch a cryptocurrency #ThanksIHateIt

(BUSINESS FINANCE) Love or hate Facebook, their choices often lead the path and dictate what is normal for business, so what does their potential cyrptocurrency mean for you?

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The promises of blockchain have circulated throughout the Internet for several years and Facebook is now getting into the game. It’s not exactly a bleeding edge move, but could eventually be a move that impacts the business world.

Since blockchain is a secure system of handling two-party transactions, what does it mean for businesses if Facebook utilizes this tech for their own cryptocurrency? The company is currently seeking to raise $1 billion for this cryptocurrency endeavor.

Facebook has been researching and experimenting with digital currency tech for some time according to CB Insights. Should this interest continue, how long before we see the rise of FaceCoin? Additionally, what would this mean for the rest of us?

Since Facebook is one of the most used identity layers for nearly 2.5 billion users, its “single sign-in” system creates a universal access point for users to login to other sites.

Here are just several of the possible implementations if the company adopts blockchain cryptocurrency:

  • Micropayments for content creators and services
  • Banking apps (a branchless challenger bank)
  • Identity technology (decentralized apps could use a Facebook login)
  • FaceCoin incentives for e-commerce
  • And unfortunately, illegal activities

Mass implementation of what we’re guessing will be called FaceCoin will bring all users and anyone who interacts with a Facebook-related platform into this system.

The benefits are seamless transactions and cross-platform movement for businesses. However, this could rattle the digital payment industry across the globe as users have their Facebook identities tied to their FaceCoin wallets. L

ikewise, stablecoins will become easier to use with Facebook’s hat in the cryptocurrency ring. Mainstream popularity, anyone?

If FaceCoin is the future, e-commerce will get sucked in.

Businesses should be keeping a close eye on this development—US dollar-pegged cryptocurrencies are already growing rapidly, regardless. These projects bring new services and products to the global market.

If Facebook ends up in the crypto game, it’s likely many others will follow suit.

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Business Finance

Calculator for what your freelance rate should be

(FINANCE) When every second on the clock counts and saving is imperative, where can you go to figure out your optimal freelance rate?

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The issue of what your freelance rate should be is daunting for most, but is especially stressful for those who aren’t particularly mathematically gifted. When every second on the clock counts and saving is imperative, where can you go to figure out your optimal rate? A new calculator has an answer.

What Is My Day Rate is a salary calculator which determines the hourly (and daily) amount you’d have to charge in order to meet your optimal salary.

The calculator itself is intuitive enough: upon landing on the What Is My Day Rate webpage, you simply enter your preferred annual income and wait for the results to load. You’ll see both a daily and an hourly sum appear shortly thereafter.

The process of figuring out how much to charge is simple, but that doesn’t mean the process is simple.

What Is My Day Rate draws from similar geographical, workplace, and demographic data to give you a number which reflects post-holiday, post-fee, post-non-billable work results.

By clicking the “See how we calculated this” link at the bottom of the page, you can see a specific breakdown of how What Is My Day Rate determined your rate.

You’ll notice that they take into account weekends, holidays, sick leave, bonuses, benefits, and more.

If division is a strong suit for you, you may also notice that What Is My Day Rate operates on a 40-hour workweek model, meaning your rate might even be optimistic for your standards.

One problem with the calculator is that it doesn’t account for taxes of any kind; while it factors in a rather generous benefits percentage and adds in things like mandatory vacation time and unpaid sick leave, there’s still a noticeable gap between the calculator’s projected expenses and what you would probably have to pay.

On the plus side, tax brackets change, so you’ll be able to plug the day rate results into a separate tax calculator without worrying about accuracy issues.

What Is My Day Rate is a valuable tool for any freelancer looking to establish their daily freelance rate without necessitating a spreadsheet and several hours of botched accounting—or a more expensive alternative. If you’re worried about undercharging, head over to their site to lock in your rate ASAP.

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Business Finance

How to spot and avoid crowdfunding scams

(TECH NEWS) Crowdfunding has become ripe for scams, don’t be a sucker — here’s how to spot ’em.

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When it comes to your personal life, you don’t want to be on the receiving end of a crowdfunding campaign because if you’re turning to GoFundMe or YouCaring, it means your house has burned down, you have cancer or your dog has died.

We regularly see these campaigns pop up in our social feeds and for the most part, we believe them because they’re our friends, they’re in need and we trust them so, of course, we pitch in.

However, some people use crowdfunding to fleece you. By now, you’ve probably heard of the couple from New Jersey who teamed up with a homeless man to raise over $400,000. The campaign was a scam, the cash was split and now these crooks are facing some serious consequences in court. Ugh.

We shouldn’t need to write this article, but some people suck and they’re out there duping us. Here’s how to spot them.

This should be obvious, but do not give money to people you do not know or do not at least tangentially know. It never hurts to scroll through the donor list to see if you recognize any of your friends or acquaintances there. If you do and have questions, reach out to them before you reach deep into your wallet.

What about victims of natural disasters? Offer your money to emergency funds run by non-profit organizations. Anyone can create a crowdfunding campaign, but in times of crisis many platforms create verified campaigns.

If the objective of the campaign is unclear, do not donate. We’ve all come across campaigns that are strangely worded or lack enough specifics to piece together a plausible story. If it feels like a Nigerian Prince is the campaign administrator, close the tab.

If a campaign’s photo looks fishy, do a reverse image search on Google to help validate that fishy feeling. If the search yields a lot of results for the photo, scammers have stolen it and are using it to tug at your heartstrings.

Most campaigns run for a very short amount of time, typically a couple of weeks and rarely more than a month. While there is generally a final social push to get to an unmet goal, there are rarely open-ended campaigns. Again, if the goal is unclear or out-of-reach, move on.

We’ve all seen campaigns that are truly gut-wrenching – deaths of loved ones, fights with cancer, entire villages wiped out. As with the case of the three jerks from New Jersey, if it feels too good to be true, it probably is. While some sites may be able to reimburse your donation, others won’t and nothing feels worse than falling for a scam AND losing your money.

And so, dear friends, this is why we at The American Genius almost never, ever write about crowdfunded projects. We care about you and we want you to use your money to help your real friends, fund YOUR next project or pay off your student loans.

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