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Hub Blogs
Why choosing the right Finance App is so important
By Emily Roberts
For the Financial Independence Hub
So many areas of our lives were impacted by the Coronavirus pandemic that it’s easier to pick one that wasn’t massively altered by locking down, staying at home and avoiding touching strange surfaces at all costs. It should come as no surprise that there has been a massive increase in the use of personal finance apps in 2020, with 59% of people in the UK using a mobile banking app.
But picking the right finance app for you will depend on what you need it for. Are you in desperate need of some guidance for managing debt repayments? Or are you looking for the perfect platform to manage your investment portfolio? Or are you simply looking for something that will help you keep track of your day to day spending?
Staying on top of your invoices
Any freelancer will tell you that getting the work is only part of the battle; the biggest challenge is getting paid. If you run your own business or you’re set up as your own limited company, you need a finance app that helps you stay on top of your invoices, manage your budgeting and accounting, and help calculate your tax returns. Software like FreeAgent, Coconut, Paymo or Fyle all offer different kinds of banking and finance support for freelancers and self-employed people so you can keep track of work going out and money coming in.
Easy access to your investment portfolio
If you have an investment portfolio set up, you’re going to want to be able to access it at all times to see how well your money is working for you, and to check if any urgent changes need to be made. Some investment apps are set up to help you get started, others are aimed more at the veteran investor who knows exactly what they’re looking for. Continue Reading…
Study: Coronavirus Pandemic creating Tax Problems that could get worse in 2021
By Mike Brown, LendEDU
Special to the Financial Independence Hub
Americans struggling to repay their 2019 taxes in the midst of a recession has been just another issue to deal with during the coronavirus pandemic.
Recognizing this, the Internal Revenue Service (IRS) actually extended the filing and payment deadline for 2019 tax obligations from April 15, 2020, to July 15, 2020.
The extension may have temporarily stopped the bleeding, yet there’s a looming tax debt crisis that has the potential to boil over in 2021 when 2020 taxes are due.
That’s because millions of Americans took to relying on unemployment benefits, retirement funds, or stock sales to stay afloat amidst the pandemic recession.
All of those things could lead to a heavier tax obligation in 2021, and with many people still out of work and struggling to get by, the country could be looking at staggering tax debt numbers next year.
The U.S. tax gap (total outstanding tax debt) currently hovers around $400 billion, but that figure could approach crisis levels after next year’s tax season.
To capture the struggles from the 2020 tax season and also the fears regarding the 2021 tax season, LendEDU surveyed 1,000 adult Americans to better understand what the average taxpayer has been dealing with during these unprecedented times.
Observations & Analysis
All data is based on an online survey of 1,000 adult Americans commissioned by LendEDU and conducted by research firm Pollfish. The survey was conducted on December 1, 2020. For some questions, the answer percentages may not add up to 100% exactly due to rounding.
17% of Americans laid off because of Pandemic unable to pay all 2019 Taxes
As mentioned above, the IRS extended the deadline to pay 2019 taxes by three months given the financial hardships experienced by many as a result of the coronavirus pandemic and recession.
However, paying all taxes owed by the July 15th deadline was still impossible for many Americans, especially those who have lost jobs due to the pandemic.
Amongst respondents who have lost their jobs during the coronavirus pandemic, 17% were not able to pay their 2019 taxes on time and in full.
Many still haven’t filed Tax Returns
Even if you are unable to fully pay all tax obligations by the filing deadline during any given year, you should always file your tax returns on time.
When dealing with the IRS, a failure-to-file penalty is much worse (5% of unpaid taxes for each month your tax return is late, up to 25%) then a failure-to-pay penalty (.5% of unpaid taxes for each month you don’t pay, up to 25%).
Yet still, data from our survey found many Americans that couldn’t pay all their taxes on time also didn’t file on time.
32% of taxpayers who couldn’t pay all 2019 taxes on time didn’t file their taxes by July 15th either. Even worse, 72% of these taxpayers who missed the July 15th filing deadline still have yet to file their tax returns for 2019, which could lead to serious financial and legal troubles.
Amongst respondents who at least have filed their 2019 tax returns despite not being able to fully pay all taxes by July 15th, here’s how many have been able to finally repay all 2019 taxes owed…
With 53% of applicable taxpayers still having tax debt from 2019, we wanted to see how much they have left…
For American taxpayers that still have some amount of tax debt from the 2019 tax year, the average amount remaining is $3,662.
If you are someone that is currently repaying tax debt, you may want to learn more about tax relief as a possible way to settle or reduce your tax bill.
The data from our survey makes it clear that repaying 2019 taxes has been unusually tough, and mass unemployment brought on by the coronavirus pandemic has been a big reason for the struggles.
But the coronavirus pandemic’s impact on the tax system won’t end in 2020 and likely will be more damaging in 2021 as taxes from this unprecedented year will be owed.
Over half worried about next year’s Tax Debt
The 2021 tax season is shaping up to be a brutal one as the full financial ramifications of the coronavirus pandemic and recession develop. Continue Reading…
The Evolution of ESG
By Preyesh Patel (ESG Analyst, Franklin Templeton Investment Management Limited)
(Sponsor Content)
Environmental, social and governance (ESG) investing has been around in different forms for over three decades now but has really become a key focus for the industry over the past five years. Previously, this kind of investing was considered somewhat niche and exclusionary in approach, focusing on “values” regarding tobacco, weapons and companies working with repressive regimes. Nowadays, acceptance of fiduciary duty, climate change and human rights is a common requirement among investors of all stripes. The flow of capital into ESG also makes it the fastest-growing type of investing across the global marketplace right now.
Pension Planning
The change in attitudes towards ESG was reflected in November when CEOs of Canada’s eight leading pension plan investment managers issued a joint statement on the subject. AIMCo, BCI, Caisse de dépôt et placement du Québec, CPP Investments, HOOPP, OMERS, Ontario Teachers’ Pension Plan and PSP Investments — representing approximately $1.6 trillion in assets under management between them — called for economic growth that was both sustainable and inclusive.
This kind of growth can only be achieved through stronger ESG disclosure standards for companies, they said, allowing investors to better assess their risk exposures. Stronger standards will mean standardization of how data is collected on issues such as diversity & inclusion, human capital and climate change. To achieve this, the pension plan leaders called for the adoption of the Sustainability Accounting Standards Board (SASB) standards, as well as the Task Force on Climate-related Financial Disclosures (TCFD) framework.
Responding to the statement, Tiff Macklem, Governor of the Bank of Canada, expressed how making ESG a priority was the right approach on many different levels.
“A strong commitment to environmental sustainability, diversity and inclusion and good governance principles will not only make our economy and financial system more resilient, it’s also the right thing to do. Leadership from Canada’s financial sector is essential as we focus on building an enduring and more equal economic recovery from the pandemic.”
Finding industry-wide consistency on how to measure ESG performance remains a challenge. The Corporate Reporting Initiative is another example of the various attempts to standardize ESG reporting, but there is still work to be done to ensure that these three letters represent much more than a branding tool.
For us at Franklin Templeton, it means seeking out material ESG insights and incorporating them into our decision-making process in a manner that best fits our investment philosophy.
For example, in its most recent update, the Templeton Global Macro (TGM) team outlined how it applied ESG criteria to its investment processes, focusing on: integration; forward-looking data points; projected “tails,” which signal major ESG shifts; a long time horizon; as well as engagement with policy makers.
Pandemic Impact
For investment teams like TGM, the past 12 months have only increased the need for sound ESG policies. Even before COVID-19, analysis by TGM revealed a decline in the number of countries that showed improving ESG momentum: the pandemic has only worsened this trend. Continue Reading…
Four effective ways to make your business more efficient and profitable
By Sia Hasan
Special to the Financial Independence Hub
A phrase you’ll hear over and over again when you run a business is “time is money.” And, for the most part, it’s true. Especially when you have workers paid by the hour, it’s tough not to see their time as a reflection of your business’s value. Most modern offices have lots of wasted time that could easily be trimmed to save everyone a headache, and save you money. These tips will give you some good ways to start saving time.
1.) Software and Automation
Managing a team of people can be tough on your own. Requests for breaks, time off, and sick days add up over time, and you can wind up with a lot of money thrown out the window. Relying on pen and paper systems will frequently become a headache and errors are inevitable. Investing in good management software will save time in more ways than one.
If you’re supervising a team and want a good way to manage their time clocks, a time card calculator is a great tool to have. You can track their productivity as well as their reported hours, giving you a better idea of how their time has actually been spent on a certain task. Automation is also a necessity in modern business, as certain tasks just can’t be done as well by a human as by a machine. Give the monotonous tasks to your software and watch as you gain time back.
2.) Minimize Distractions
A lot of wasted time during the workday comes down to unnecessary distractions. While it’s good for employees to bond over a conversation in the break room and feel comfortable stopping by each other’s desks for a chat, it’s best to keep these interactions at a reasonable minimum. Encourage employees to take their lunch breaks together to cut down on the need for conversations throughout the work day.
But time can be wasted by work-related interactions, as well. Most meetings can be summarized easily by a mass email, and chat software can easily interrupt an employee’s train of thought, so consider replacing longer meetings with a shorter daily one. Allow employees to turn off their notifications, encouraging them to check their email during specific times, and allow them to have plenty of time for focused and productive work.
3.) Go easy on multitasking
Some individuals truly are great at multitasking, but the truth is, many of us are challenging ourselves to a task we’re not up to. Productivity doesn’t come down to the number of things you’ve worked on in a day, but the volume of work you’ve completed. Allow yourself to prioritize a certain task and work on it until it’s complete. Continue Reading…
