How many of these forms of income did you know were subject to federal taxes? vchal / Shutterstock.com
Everyone knows that wages are taxed by the federal government, but Uncle Sam has a far-reaching definition of “taxable income.” It covers numerous types of earnings that many people don’t realize are subject to federal income taxes. Following are several examples of taxable income that may come as a surprise.
With more money in their bank accounts, women may feel more confident about their financial situations.
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Despite having a longer life expectancy, women make less money than men. According to the National Partnership for Women and Families, on average, women employed in the United States lose a combined total of almost $1.6 trillion yearly due to the wage gap. With this in mind, it’s no surprise that women have less money in their bank accounts. However, women can thrive financially by taking a few key steps. Here are a few ways for women to boost their bank account balances.
With today’s high living costs, it can feel impossible to save. Women can boost their bank account balances by making saving a priority. It’s okay to start small; every bit of money saved adds up and makes a difference. For example, if you commit to saving even just $25 each week, you’ll have $1,300 at the end of the year. That’s much better than having saved $0.
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The key to making saving a priority is to pay yourself first. Before you spend your next paycheck, save a small portion of it. To save time, you can set up automatic transfers through your bank. Doing this ensures that money is transferred from your checking account to your savings account regularly, so there’s no forgetting to make saving a priority.
If you’re not cautious, it’s easy to overspend, and for many people, this can lead to credit card debt. Monitoring your spending can help you learn where your money is going and see what changes you need to make. Using budgeting apps is an excellent way to set and track your budgeting progress. By cutting out unnecessary spending, you could boost your bank account balance.
Make sure you have a savings account. Most checking accounts don’t pay interest, so there is little benefit to keeping extra savings there. However, you can earn interest with a high-yield savings account. This is an easy way to boost your account balance with minimal effort. Review our list of the best high-yield savings accounts to learn more.
Interest rates have been climbing. While that’s bad news if you need an auto loan or mortgage, it’s good news for interest-earning bank accounts. Many banks continue to increase the annual percentage yields (APYs) for these accounts. For example, some online-only savings accounts are currently paying 3% to 4%. Switching to a bank that offers higher interest rates could help you significantly boost your bank account balance.
Boosting your bank account balance can be challenging when you don’t have a lot of extra money coming in. But it can be easier if you boost your income. Here are a few ways women can increase their income:
Work a side hustleGet a part-time jobNegotiate a raiseApply for a better-paying job
Knowledge is power — so don’t be afraid to talk about pay. Through these discussions, you may learn that you’re being underpaid for your work. This knowledge could help you set new income goals and better advocate for yourself and other women in your life.
Women are financially disadvantaged, and it’s up to us to change the narrative. You’re not alone if you’re a woman looking to improve her financial health. The good news is it’s not too late to learn more and change your daily spending and saving habits to feel more confident about your personal finance situation.
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What happenedThis week the SEC brought a slew of charges against Justin Sun, the man behind Tron (TRX) and BitTorrent (BTT) cryptocurrencies. The SEC also charged eight influencers, including well-known names like Lindsay Lohan and Jake Paul, for promoting the cryptos on social media without disclosing that they were paid for it. Sun denies any wrongdoing and six of the celebs agreed to pay settlements of $400,000 each without admitting or denying the charges.So whatThe charges against Sun include the unregistered sale of crypto assets and wash trading, a form of fraud that involves buying and selling the same security to boost trading volumes. The SEC alleges Sun generated over $30 million through “illegal, unregistered offers and sales” of the TRX token.
Discover: Best places to buy bitcoinMore: Check out our updated list of best crypto apps including one offer with a $100 crypto bonus
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC Chair Gary Gensler. The SEC says the celebrities — Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon) — were specifically told not to disclose their payment for shilling the tokens.Now whatThis case is just one of several charges the SEC has filed against main players in the crypto industry in recent months. While lawmakers consider how the industry might be regulated, bodies like the SEC are using existing rules to prosecute cryptocurrency cases.Outside of the specific charges around Tron and BitTorrent, there’s a wider issue for crypto investors that could have a profound impact on the whole industry: The SEC considers many cryptos to be securities. If that’s the case, much of your crypto portfolio could be deemed unregistered securities. There are strict rules about how securities can be traded and how they share information with the public. Given that many top crypto exchanges do not have licenses to trade securities, that distinction could make it hard to buy or sell crypto, and could mean heavy fines and reporting requirements for crypto projects.The shilling charges against the celebrities highlights the dangers of investment advice on social media. Here are three reasons to tread carefully:You don’t know if the celebrity was paid to make the endorsement.The account could be a fake — and even if it’s a real account, it could have been hacked. Many influencers are not financial advisors and won’t know your situation.If an influencer does promote a particular product or service, look at the post to see if they’ve been paid to do so. See if that person has a background that qualifies them to give financial advice. Also, look for red flags such as advice that feels too good to be true.Ultimately, only you know what risk you’re comfortable with and what investments might fit into your portfolio. Whether it’s cryptocurrency or another investment, don’t take a celebrity’s word for it. Do your own research and consider whether you’re buying an asset that will help you build long-term wealth.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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This week the SEC brought a slew of charges against Justin Sun, the man behind Tron (TRX) and BitTorrent (BTT) cryptocurrencies. The SEC also charged eight influencers, including well-known names like Lindsay Lohan and Jake Paul, for promoting the cryptos on social media without disclosing that they were paid for it. Sun denies any wrongdoing and six of the celebs agreed to pay settlements of $400,000 each without admitting or denying the charges.
The charges against Sun include the unregistered sale of crypto assets and wash trading, a form of fraud that involves buying and selling the same security to boost trading volumes. The SEC alleges Sun generated over $30 million through “illegal, unregistered offers and sales” of the TRX token.
Discover: Best places to buy bitcoin
More: Check out our updated list of best crypto apps including one offer with a $100 crypto bonus
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC Chair Gary Gensler. The SEC says the celebrities — Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon) — were specifically told not to disclose their payment for shilling the tokens.
This case is just one of several charges the SEC has filed against main players in the crypto industry in recent months. While lawmakers consider how the industry might be regulated, bodies like the SEC are using existing rules to prosecute cryptocurrency cases.
Outside of the specific charges around Tron and BitTorrent, there’s a wider issue for crypto investors that could have a profound impact on the whole industry: The SEC considers many cryptos to be securities. If that’s the case, much of your crypto portfolio could be deemed unregistered securities.
There are strict rules about how securities can be traded and how they share information with the public. Given that many top crypto exchanges do not have licenses to trade securities, that distinction could make it hard to buy or sell crypto, and could mean heavy fines and reporting requirements for crypto projects.
The shilling charges against the celebrities highlights the dangers of investment advice on social media. Here are three reasons to tread carefully:
You don’t know if the celebrity was paid to make the endorsement.The account could be a fake — and even if it’s a real account, it could have been hacked. Many influencers are not financial advisors and won’t know your situation.
If an influencer does promote a particular product or service, look at the post to see if they’ve been paid to do so. See if that person has a background that qualifies them to give financial advice. Also, look for red flags such as advice that feels too good to be true.
Ultimately, only you know what risk you’re comfortable with and what investments might fit into your portfolio. Whether it’s cryptocurrency or another investment, don’t take a celebrity’s word for it. Do your own research and consider whether you’re buying an asset that will help you build long-term wealth.
Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
You should read Ramsey’s advice when deciding how much to put into your savings account.
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Deciding what to do with your money can be pretty complicated. For many people, a savings account seems like a quick and easy option. You can put your money into savings without a lot of effort just by researching high-yield savings accounts (or opening a savings account with the bank where you maintain a checking account). You don’t have to pick investments and, as long as you are below the FDIC insured limits, you shouldn’t risk any financial loss.
But while you need to have some money in savings, you don’t want to overdo it. In fact, finance expert Dave Ramsey warns that you actually take a bigger risk by over-investing in your savings account than you would by making investments in other assets like a 401(k) or brokerage firm. Here’s why.
According to Ramsey, putting too much into savings is actually a bigger risk than investing because a savings account will not pay enough interest to help you avoid losing ground as the cost of goods and services rise. That means you’re likely to end up with a savings account that has far less buying power over time.
Ramsey explains: “If you bury your hard-earned money into a savings account or CD hoping to avoid risk, guess what? You may have avoided short-term risk, but you’ve also guaranteed that your money won’t grow enough to keep up with inflation long term. Which sounds riskier?”
Ramsey is 100% spot on that over-investing in a savings account is an extremely risky strategy and not one you want to employ.
You see, over time, the price of goods and services naturally goes up. This is called inflation. The Federal Reserve aims to keep the annual rate of inflation at around 2%, which means that overall, prices go up pretty slowly and steadily. But in most cases, a savings account will not pay you a 2% annual interest rate — or, if it does, it won’t pay you much above that rate.
If you get less than 2% interest and inflation is at 2%, your money loses ground. It’s worth less when you take it out of your savings account than it was worth when you put it in. That’s no way to build wealth. Even if you get 3%, your real rate of return would be less than 1% after taking taxes and inflation into account.
You need your money to work harder for you than that if you want to grow wealth without having to invest an absolute fortune. If you can put money into an S&P 500 index fund and earn average annual returns of around 10%, then you would obviously be able to grow your money more easily since those higher returns could also be reinvested and compounded over many years.
So, to avoid taking a huge risk of inflation eating away at your money, put only enough into savings to cover emergencies and purchases you’ll need to make over the short term, and invest for your longer-term goals — just as Ramsey recommends.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The Fed just raised interest rates for the second time this year, and that could lead to some very precarious economic conditions.
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Inflation has been a problem for U.S. consumers since the second half of 2021. And at this point, a lot of people have landed in credit card debt or completely depleted their savings just to do things like put food on the table and keep up with their essential bills.
The Federal Reserve, meanwhile, isn’t happy with where inflation is sitting. As of February, the annual rate of inflation was 6%, as per that month’s Consumer Price Index. Now that’s an improvement from mid-2022, when inflation peaked at 9.1%. But the Fed wants inflation at 2%, and right now, we’re nowhere close.
To combat inflation, the Fed has been raising its benchmark interest rate, which tends to indirectly drive up the cost of borrowing for consumers. The Fed’s first rate hike this year came in February, and earlier this week, it followed up with a second one. Both 2023 rate hikes amounted to 0.25%.
The problem, though, is that the Fed has been raising interest rates since early 2022, and borrowing costs have been exploding. At some point, consumers are apt to take an “enough is enough” attitude and cut their spending.
But if they do so to an extreme, it could be enough to fuel a recession. And that could lead to a world of economic pain.
Lawmakers have, in the past, turned to stimulus checks to boost the economy during prolonged slumps. In March of 2021, for example, the American Rescue Plan sent $1,400 stimulus checks into consumers’ bank accounts, and it’s those very checks that helped fuel inflation by giving the public money to spend at a time when supply chains were slowing down.
If the Fed’s interest rate hikes drive a huge pullback in consumer spending, it could be enough to cause a recession. And if it’s a bad recession, stimulus aid on the part of the federal government might come into play once more.
But for stimulus checks to go out again, we’d need to land in a pretty dire economic situation. And that’s not something anyone should want.
The Fed’s goal in raising interest rates is to cool inflation — not spur a recession that hurts Americans in many ways. In fact, the whole reason the Fed wants inflation to shrink is that its job is to promote a healthy, stable economy. So the last thing the Fed wants is a broad downturn.
If the Fed gets its way, the result of its rate hikes will be a soft landing — a modest pullback in consumer spending that cools inflation without sending the economy into a freefall. But that’s a very delicate balance to strike. And since the central bank isn’t done raising interest rates to fight inflation, we can’t say with certainty that a recession won’t hit in the near term — and that stimulus checks aren’t once again in Americans’ future in some shape or form.
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Men, on average, bring in $218 more each month from side hustle income than women do.
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As more people look to boost their checking account balances, side hustles are becoming more popular. Unlike traditional job opportunities, many side hustles are flexible — which is attractive to busy Americans. Both men and women work side hustles. But their average earnings differ.
Many people seek unconventional ways to boost their income. Side hustles are becoming more common due to their flexibility. A study by Zippia found that 45% of Americans are working a side hustle in 2023. Income amounts vary, but the average monthly side hustle income is $483. However, there is a noticeable difference between what men and women make.
Zippia found that the average monthly income for men is $596. On the other hand, the average monthly income for women who work side hustles is only $378. This stat isn’t surprising as many financial disparities exist between men and women, even in 2023.
Many women rely on their side hustles to stay afloat, and 61% of those surveyed said they would struggle financially without a side hustle. But men also rely heavily on this income, with 54% of saying they would struggle financially without a side hustle. Rising living costs may be a significant factor that leads people to take on side gigs. With increased income, it’s easier to get by.
You might consider getting a side hustle to increase your income. Finding a side hustle that is a good fit for you may take time, so don’t give up. But you can make money with the right one.
Here are a few tips that may help you increase your side hustle income.
While some side hustle gigs can be lucrative, not all are. As you begin to try side hustles, track your income alongside the time you’re putting in. If you’re finding that you’re spending a lot of your free time on your side hustle but only bringing in a meager amount of money, you may want to consider a different opportunity that pays better.
If you work a side hustle where you set your own rates, consider charging more as you gain more experience and improve your skills. You want to ensure that you’re getting paid fairly for your work, so don’t miss out on the chance to increase your earnings over time.
Improving your organization and time management skills can be beneficial when you work a side hustle. With good organization and better use of time, you can get more done and earn more. Look for ways to automate or handle some of your tasks faster with free apps and tools.
If you’re new to working a side hustle, it may be beneficial to work on more than one opportunity simultaneously. Doing this could help you boost your income, and it can help you determine which gigs are more profitable. For example, if you’ve been delivering Uber Eats orders, you may also want to spend a few hours a week delivering DoorDash orders.
You may think that it’s safer to stick with a side hustle that requires skills that are already familiar to you. But you may miss out on higher-earning gigs by doing this. It’s never too late to learn new skills. You may be able to earn more by stepping outside of your comfort zone and trying something new. You’ll never know if you’re good at something (or enjoy it!) unless you try.
A side hustle may be an excellent way to bring in more money to achieve your personal finance goals sooner. Many side hustlers take on extra work in their free time to pay off debt, save for a future home purchase, or to have extra fun money. If you plan to work a side hustle to increase your income, make decisions with profitability in mind.
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