Doing freelance or side hustles involves tax considerations. Even if it's your first time dealing with it, it's manageable. Always report all income, deduct business expenses, and pay self-employment taxes. If possible, consider an S corporation to reduce tax burden. Think creatively to find more deductible expenses that support your business. Get actively involved in tax planning, use separate bank accounts, and document expenses. Seek professional help if needed.
New home construction has taken a surprising nosedive, raising concerns about the housing market's health. While the rental market remains strong, the supply of new homes is slowing down, making it harder for buyers to find affordable homes. Despite this, the Federal Reserve is keeping an eye on the housing market as they consider interest rate decisions. The economy is showing mixed signs, so it's important to monitor trends over a period of time to get a clearer picture.
Global economic growth remains steady at 3.2%, but below past averages due to factors like declining productivity and reduced investment. Artificial intelligence shows potential for growth, but its impact is uncertain. Inflation is projected to decline, but geopolitical tensions could affect it. Interest rates may change, depending on factors like inflation. Trade disruptions and fragmentation pose risks, but early action can mitigate them. China's economy remains resilient, despite property sector challenges, and support measures are encouraged.
The Federal Reserve (Fed) is monitoring inflation and using core PCE inflation as a key indicator. Despite a recent decline in inflation, core PCE inflation remains slightly above the Fed's target of 2%. The Fed's goal is to keep inflation around this level to maintain price stability. While inflation has shown no signs of returning to target, the Fed is cautiously optimistic that its current policy can address risks and support economic growth by adjusting interest rates as needed.
Despite initial hopes, the Fed has indicated no immediate cuts to interest rates, disappointing investors. However, strong corporate earnings are expected to drive stock performance, as seen in companies like Morgan Stanley. While some companies are performing well and boosting the market, others like Bank of America and Johnson & Johnson have faced challenges, leading to stock declines. The market is still influenced by Fed decisions, but company earnings are also a significant factor.
Bitcoin's value has skyrocketed, with the upcoming "halving" adding to the excitement. The halving reduces the production of new Bitcoins, potentially boosting prices due to reduced supply. Experts debate the halving's impact, with arguments for further price hikes due to increased demand and institutional adoption, but also caution against historical volatility and skepticism about Bitcoin's long-term viability. The discussion also considers Bitcoin versus gold as an investment option, highlighting their different characteristics.
President Biden and Vice President Harris released their tax returns for 2023. Biden's income rose slightly while Harris's income decreased slightly. Both couples paid federal income taxes and incurred small penalties for underpaying estimated taxes. The returns highlight the complexities of the tax code, including handling multiple income sources and managing tax liabilities. Tax experts advise higher earners with complex financial situations to consider working with professionals to optimize their tax strategies.
The Biden administration released a new student loan forgiveness proposal, targeting specific groups and focusing on interest cancellation. Borrowers under a certain income threshold could have all of their accrued interest forgiven. Those who have been repaying for more than 20 years or have attended low-quality schools could receive full debt cancellation. However, the proposal has already faced legal challenges, signaling potential delays in its implementation.
The rate for Series I savings bonds, also known as I bonds, could drop below 5% in May, experts predict. This would be less than the current 5.27% rate for bonds purchased before May 1st but still higher than the 4.3% offered for bonds bought between May 1st and October 31st. Despite the expected decline, experts still consider I bonds a good investment, especially for long-term savers.
Trump Media is a new publicly traded company that has attracted investors because of its association with former president Donald Trump. The stock is known for its volatility, and experts say it's a risky investment due to the company's size, valuation, and potential risks related to Trump himself. Like Tesla, which was backed by belief in Elon Musk, Trump Media's stock is largely driven by support for the former president rather than the company's financial performance.
Inflation in the UK slightly eased from 3.4% to 3.2% in March, but it's still higher than expected. The core inflation rate, which excludes energy and food, was 4.2%, higher than the 4.1% forecast. This has led many investors to believe that inflation will take longer to fall than expected, and that the first interest rate cut by the Bank of England may happen later than June, as previously anticipated.
High valuations of companies may pose a risk to the economy, warns the IMF. This optimism has pushed valuations to unsustainable levels, making them vulnerable to shocks. Credit markets, especially for riskier borrowers, are a particular concern, as well as commercial real estate, due to the shift to remote work. The IMF highlights that inflation remains a risk, as does uncertainty around interest rates.