Finance

Social Security is heading towards a $20 trillion hole. The thing to remember is that America’s main pension system will […]

Social Security is heading towards a $20 trillion hole. The thing to remember is that America’s main pension system will

Many foreign-policy specialists have believed for decades that economic globalization promotes peace around the world. As more companies reach countries beyond their own borders, war with other nations becomes less attractive to governments. Thomas Friedman, a New York Times columnist, famously stated that global capitalism’s supposed armistice-inducing effect makes countries less likely to engage militarily with one another if they both have a McDonald’s.

The ongoing Russian invasion of Ukraine might require Friedman to reconsider his so-called Golden Arches Theory of Conflict Prevention. Multinational corporations are actually caught in the middle Russian President Vladimir Putin’s unprovoked act d aggression.

The Big Mac shopper is now participating in the Russian commercial backlash. McDonald’s joined other restaurant chains, including Burger King and Starbucks, in closing down their Russian operations. Chris Kempczinski, CEO of McDonald’s, cited the “needless human suffering” in Ukraine as the reason for his boycott.

According to a Yale School of Management tracker, hundreds of Russian companies had either ceased operations or withdrawn from Russia by March 16. This list includes iconic brands from everything, including apparel, pharmaceuticals and technology. WarnerMedia pulled “The Batman”, its blockbuster movie, from Russian cinemas.

Subway, Papa John’s and Domino’s are among the brands that have condemned Russia’s aggression. They are now trying to counter any resistance from their franchisees in Russia. The majority of Russian McDonald’s restaurants are owned by McDonald’s, so the company can close the stores without creating any friction. However, Papa John’s in Russia has closed its corporate functions, so that the country’s store owners can continue making pizzas.

According to the Securities and Exchange Commission, the pizza company stated that it could face a one-time, non cash hit of up $15.2 million. This was primarily due to loans related to its Russian franchisee. However, 2021 royalties from its Russian operation represented less that 1% of total revenue and 1% of operating income.

Papa John’s is a good example of the reputational risk associated with franchisors operating in international markets. Subway faces a similar problem with its many independently-owned Russian stores. According to the Yale corporate tracker, Subway is being described as “defying requests for exit or reduction in activities.” The sandwich chain claims that it will donate profits from Russian-based businesses to Ukrainian relief efforts rather than securing them. Subway also stated that it is working with European franchisees in order to provide meals for the refugees who were displaced by the invasion.

Russia wants corporations operating within its borders to think they are more trouble than franchisees. Moscow threatens to retaliate by confiscating assets and arresting executives who criticize the government. Putin has signed legislation that allows Russian airlines to seize foreign aircraft owned by lessors who have left the country. Russia also indicated that patent enforcement will cease for companies from countries not in agreement with Russia. (No enforcement occurred in the first instance.

Recent disclosures indicate that the Kremlin’s talk may be showing up on companies’ radar screens. In a 10-K filing, Omega Therapeutics Inc. stated that it is at risk from governments in countries where it nationalizes private enterprises. Omega specifically mentioned Russia’s invasion in Ukraine as an example of a situation that could threaten its international operations. Kamada Ltd., a biopharmaceutical firm, stated in a Form-20-F filing that Russia’s sanctions and Moscow’s subsequent blowback could hinder its ability to deliver its products to Russia and collect sales payments.

Russia’s retaliatory threats were predictable so it is unlikely that these companies will reconsider their decision to leave. They might not be back for a while.

Tax Day is quickly approaching. Here are some forms that you might need as you prepare for Form 1040, your individual federal income tax return. These forms will also be required if you have to file a state income taxes return.

Formulas W-2G and W-2G

Each employer that you worked for last year will send you a W-2. This document includes your wages and any taxable benefits received. It also shows the tax withheld from your wages. W-2 forms must be sent out by employers no later than January 31, each year. They are usually available online through a payroll provider.

You will receive a form W-2G if you won any gambling money last year. This form will contain the amount of your winnings and how much federal income tax they were subject to.

Forms 1099 – NEC and 1099 -MISC

This form is for earnings earned from gig work or freelance. It’s similar to a W-2 for contract workers. You should get a 1099-NEC form from the payor if you have earned more than $600 from this source of income last year.

You can also use Form 1099-MISC to report other types of income, such as rent, prizes, awards, or prizes. This form would be issued to you if you were awarded cash or prizes in a television game show.

Form 1099-INT

You will receive a 1099-INT if you have earned more than $10 in interest from a savings or moneymarket account or Certificate of Deposit (CD) and it reports the amount of taxable income you earned. This interest will be added to the appropriate line of Form 1040.

If you have earned more than $1500 in interest last fiscal year, Schedule B must be filed. It lists the names of all institutions that paid interest to you and the amount you earned.

Form 1099-G

Your state agency will send Form 1099-G to you if you received any unemployment benefits in the past year. This form will show how much you were sent and what taxes you withheld.

Formula 1098

This form comes in four versions. One will be issued to you if you have paid more than $600 on your mortgage (1098), student loan (1098E), or received college tuition assistance (1098T), or if you donated a car or boat to charity (1098C).

What forms should I use to file my taxes?

These are the forms that you or your tax professional will use to prepare your tax return and send it to the IRS.

Forms 1040-SR

Also known as the U.S. Income Tax Return. This is also known as the U.S. Individual Income Tax Return. It is the most basic form of tax used by Americans to prepare their federal tax returns.

• Form 1040: Individual tax filings use this form for reporting their income to IRS. If you use tax software, this form will not be filled out directly. Instead, you will go through a question and answer process that populates your form. After you have submitted your return, you can download a complete copy of it for your records.
• Form 1040 SR: This version is for seniors. This version is only for people 65 years and older. It uses larger fonts and has bigger boxes to report numbers.
• 
  You will need basic personal information to fill out Form 1040
  
  • Name and address
  • Social security number
  • Status filing
  • This will be based on the tax documents that you receive from banks, employers, and other entities that paid you during the year.
  • Names and Social Security numbers for dependents

If your taxes were simple, you could file Form 1040A and Form 1040EZ in the past. These forms were eliminated starting in the 2018 tax year and replaced by a shorter Form 10040.

Because many lines from the previous form have been transferred onto additional schedules, there are now fewer boxes on Form 1040. While your Form 1040 is shorter, it may mean that you will have to file additional IRS forms.

Additional Forms You Might Need for Your 1040

Schedules are the supplemental forms that must be filed with Form 1040. Each corresponds to a specific type of income, or deduction.

Here is a list of most commonly used Schedules and their purpose.

• Schedule A To report itemized deductions such as mortgage interest and gifts to charity
• Schedule B For reporting interest or ordinary dividends.
• Schedule A: For reporting income and losses as sole proprietor.
• ScheduleD: To report capital gains or losses that are not reported on any other form or schedule, non-business bad debts and gains from involuntary transformations of nonbusiness capital assets.
• Schedule E To report income or losses from rental property, royalties and partnerships, S corporations estates, trusts and residual interest in real-estate mortgage investment conduits.
• Schedule EIC To report information on qualifying children to claim an Earned Income Credit
• Schedule F To report farm incomes and expenses.
• Schedule H To report taxes paid on cash wages to household employees.
• Schedule J To choose to calculate your income taxes for a fishing or farming business using a 3-year average.
• ScheduleR:To determine a credit for the elderly or disabled.
• Schedule SE To calculate the tax on self-employment net earnings.
• Schedule 881: To calculate the various Child Tax Credits, report Child Tax Credit Advance Payments starting in 2021 and calculate any additional tax due to overpayment.
• Schedule 1 To report income not listed on Form 1040. This includes income from a business or unemployment compensation.
• Schedule 2 To report any additional taxes such as an alternative minimum tax, excess premium tax credit for insurance or self-employment taxes.
• Schedule 3 To report additional taxes payments and non-refundable tax credits.

Continue reading: Guide for Filing Your Taxes by 2022

The author is not a client at Personal Capital Advisors Corporation. He is paid as a freelancer.

This blog post contains general information and is not intended to be legal, tax, or accounting advice. No compensation exceeding $500. For your particular situation, you should speak to a qualified tax or legal professional. Remember that investing comes with risk. Your investment’s value will fluctuate over time. You may lose or gain money. Personal Capital Advisors Corporation is a subsidiary owned by Personal Capital. Any reference to advisory services means that Personal Capital Advisors Corporation is referring to them. Personal Capital Advisors Corporation (SEC) is an investment advisor registered with the Securities and Exchange Commission. Registering does not imply any specific skill or training, nor does it imply endorsement of the SEC.

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