vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Well you've got to think about the process, but first make sure the thing you want to pay for is actually a qualified dependent care expense.  Here is a list of eligible expenses from a national FSA administrator. This process will tie up your money for some amount of time.  Your deduction will come out like clockwork.  But there is a time-delay of potentially months between your deduction and receipt of a reimbursement. Dependent care plans are money-in money-out.  You can only file a reimbursement on funds that have actually been contributed, which is different than a medical FSA.  Additionally, you can only file a claim on expenses that have actually been incurred.  Dependent care FSA elections can be changed through the year on an as needed basis.  This would add an administrivia burden to the person running your payroll, and if there is a payroll vendor in place, likely an actual cost.  The administrator in this situation would likely be the company.  In the formalities of employee benefits there must always be a named administrator. If your employer currently offers no benefits you should press healthcare first.  Paying healthcare premiums pretax would likely save you more money and be less administration than this.  Additionally, if your employer is paying for or reimbursing you for your individual health insurance that's currently illegal under the ACA.
"how is the money the FDIC has collected Fees collected from the banks: The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. http://www.fdic.gov/about/learn/symbol/index.html They also use the proceeds from liquidating the assets of failed banks to make payouts. Are there country specific agencies with a similar mission? Canada Deposit Insurance Corporation Instituto para la Ptotección al Ahorro Bancario (Mexico) Financial Services Compensation Scheme (UK) not quite like the FDIC You'll have to search for others yourself. :) Most importantly, are there any examples of a similar system that has failed? As the Mythbusters say, ""failure is always an option.""   There is a statement on FDIC's website to the effect that they are backed by the ""full faith and credit"" of the U.S. government. That said, the FDIC maintains its own fund to make insurance payouts. Granted, in the shakiness of the 2008-2009 financial crisis they did start waving a red flag about their realistic ability to cover their obligation. Practically speaking, the government will likely step in if necessary. This 2008 article regarding a propsed revamp of the UK's FSCS should be of general interest to you on this topic, though it does not answer the question of failed systems.  (Well, as far as I know.  I have only skimmed the article.)"
401(k) withdrawals - early or otherwise - are not subject to FICA or Medicare taxes.  That's because they already were taxed when they were contributed.  (And of course, the earnings from the 401(k) contributions are not earned income and thus are not subject to payroll taxes for that reason.) While 401(k) contributions are exempt from federal (and generally state) income taxes, they aren't exempt from payroll taxes - and as such, you'll see two separate amounts on your W2 and paystub if you contributed: the amount that is subject to those taxes, and the amount that is subject to income tax. So, no, you don't have to pay payroll (FICA, Social Security) taxes on your early withdrawal.  As for the penalty, that is basically an extra tax - so if you withdraw $1000, you pay income tax at your marginal rate plus 10% penalty; if your marginal rate is 25% [and you're not moving across a rate step boundary], you will pay 25%*(1000) + 10%*(1000).
The point is this: just because you have to ""work"" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant ""income"" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:"
Once the money leaves the HSA account the employer has no choice but to change it to income and if they don't, your son must declare it as such (which it sounds like he is prepared to do). This doesn't really answer your question of whether or not the employer can be penalized- I would assume yes, but not too badly. The worst case scenario for them would probably be just having to pay all the back FICA on those funds if they aren't doing so already. Maybe an interest penalty as well. All that being said, I'd recommend talking to an accountant. The most important thing you want to be sure of is that your son cannot possibly be liable for any wrongdoing. Particularly I would get confirmation on pulling money out of the HSA that you know shouldn't be there in the first place, just to make sure there is no possible way to get dinged for that."
"LLC is, as far as I know, just a US thing, so I'm assuming that you are in the USA. Update for clarification: other countries do have similar concepts, but I'm not aware of any country that uses the term LLC, nor any other country that uses the single-member LLC that is disregarded for income tax purposes that I'm referring to here (and that I assume the recruiter also was talking about). Further, LLCs vary by state. I only have experience with California, so some things may not apply the same way elsewhere. Also, if you are located in one state but the client is elsewhere, things can get more complex. First, let's get one thing out of the way: do you want to be a contractor, or an employee? Both have advantage, and especially in the higher-income areas, contractor can be more beneficial for you. Make sure that if you are a contractor, your rate must be considerably higher than as employee, to make up for the benefits you give up, as well as the FICA taxes and your expense of maintaining an LLC (in California, it costs at least $800/year, plus legal advice, accounting, and various other fees etc.). On the other hand, oftentimes, the benefits as an employee aren't actually worth all that much when you are in high income brackets. Do pay attention to health insurance - that may be a valuable benefit, or it may have such high deductibles that you would be better off getting your own or paying the penalty for going uninsured. Instead of a 401(k), you can set up an IRA (update or various other options), and you can also replace all the other benefits. If you decide that being an employee is the way to go, stop here. If you decide that being a contractor is a better deal for you, then it is indeed a good idea to set up an LLC. You actually have three fundamental options: work as an individual (the legal term is ""sole proprietorship""), form a single-member LLC disregarded for income tax purposes, or various other forms of incorporation.
The employer most likely has already sent that money that was withheld to the IRS. Therefore they cannot refund you any money. Instead you need to get the money back from the IRS. You do this by filing a tax return.  Your W2C will show that taxes were withheld (I.e., that you paid taxes). The rest of the return will show that no taxes were due and therefore you are entitled to have your money refunded. If you have already filed for that tax you, you just need to file an amended return with the new data. That amendment will show that you are to be refunded the extra money. Then just wait several weeks for the payment from the IRS.  As pointed out user102008, if it is Medicare and social security taxes that have been withheld in error, then you need to file a different set of forms with IRS. It would be nice if refunding FICA also occurred via the tax return.
FSA is a convenience to allow you to pay day care expenses with pre-tax money.   It sounds like neither you nor your wife are eligible through an employer, so you can't use one. If you do not use FSA, then at tax time you can deduct the cost of day care from your gross income.  In the end the effect is the same.  Just keep track of your expenses.
"The FSA, in contrast to the HSA, is not an ""account"" that you put money in. FSA stands for ""Flexible Spending Arrangement,"" not ""Account."" Technically, it is a defined-benefit plan. Here is the difference: With an account such as an HSA, you put money into the account, and you get that same money out. You can't take money out unless you first put money in. The FSA doesn't work that way. Instead, you pick an annual amount that your FSA will cover, and work out a monthly fee to pay for it. For example, you might decide on a $1800 FSA, which will cost you $150 per month. However, the $150 you pay each month does not go into an account for you; instead, it goes to your employer, who is managing the plan. Let's say that in January, at the beginning of the plan year, you have a large medical expense of $1000. You've only had $150 taken out of your paycheck so far this year, but you are covered for $1800, so you get reimbursed the full $1000. This is referred to as ""uniform coverage"", meaning that you get the full $1800 of coverage on day 1 of the year. Now let's say that you leave your job in March. You've only paid $450, and you've received $1000 in benefit. You do not owe your employer the rest of the money; your employer eats this cost. This is the trade-off that the FSA offers over other types of accounts: depending on an employee's circumstances, an employer might make money (use-it-or-lose-it) or might lose money (uniform coverage) on an individual employee. The idea behind the use-it-or-lose-it provision of the FSA is to help the employer pay for the uniform coverage provision. The details behind the FSA (and other types of health plans) are outlined in IRS Publication 969.
The Mad Fientist has an article on this. He gives these following benefits: He also gives the caveat that your employer may not match things in their entirety. Like you mentioned, this mostly applies to 401(k)s and not to HSAs where the employer tends to contribute a fixed amount (in my experience). Anecdotally, my wife and I front-load our IRAs; but not our HSA and 401(k) because we don't have that option. In the comment section of the linked article, several big-name early retirees confess to front-loading before it was cool.
This is the trade-off that the FSA offers over other types of accounts: depending on an employee's circumstances, an employer might make money (use-it-or-lose-it) or might lose money (uniform coverage) on an individual employee. The idea behind the use-it-or-lose-it provision of the FSA is to help the employer pay for the uniform coverage provision. The details behind the FSA (and other types of health plans) are outlined in IRS Publication 969. I'm sure that a secondary reason behind the use-it-or-lose-it provision is that it encourages an employee to keep his FSA plan small, so he can use it all up and not have to lose too much of it at the end of the year. And a smaller FSA contribution means more tax money for the government. To address your point that it shouldn't be this way: I'm personally not a fan of the FSA because of the use-it-or-lose-it provision. But participation is voluntary, for both employers and employees. You proposed an alternative set of rules for the FSA, but you are basically describing an HSA, in which you cannot spend more than you have, and you get to keep whatever is left over. The recent rules changes that allow plans to feature a grace period or a small carryover balance were an attempt to make the FSA a little more attractive/useful, but if you want the ability to keep your money and not have to spend it at all, use an HSA instead."
In the US, pension benefits promised by employers are tightly regulated by a law called ERISA. One of the requirements is that money be deposited in a trust that is out of the reach of the employer and the employer's creditors, so even if the employer falls on hard times or goes bankrupt, the money to pay the pensions is still there. In addition, the benefits are guaranteed by the federal government through the Pension Benefit Guaranty Corporation (usually called the PBGC). Relative to most investments, pensions are a safe bet.
"I assume you get your information from somewhere where they don't report the truth. I'm sorry if mentioning Fox News offended you, it was not my intention. But the way the question is phrased suggests that you know nothing about what ""pension"" means. So let me explain. 403(b) is not a pension account. Pension account is generally a ""defined benefit"" account, whereas 403(b)/401(k) and similar - are ""defined contribution"" accounts. The difference is significant: for pensions, the employer committed on certain amount to be paid out at retirement (the defined benefit) regardless of how much the employee/employer contributed or how well the account performed. This makes such an arrangement a liability. An obligation to pay. In other words - debt. Defined contribution on the other hand doesn't create such a liability, since the employer is only committed for the match, which is paid currently. What happens to your account after the employer deposited the defined contribution (the match) - is your problem. You manage it to the best of your abilities and whatever you have there when you retire - is yours, the employer doesn't owe you anything. Here's the problem with pensions: many employers promised the defined benefit, but didn't do anything about actually having money to pay. As mentioned, such a pension is essentially a debt, and the retiree is a debt holder. What happens when employer cannot pay its debts? Employer goes bankrupt. And when bankrupt - debtors are paid only part of what they were owed, and that includes the retirees. There's no-one raiding pensions. No-one goes to the bank with a gun and demands ""give me the pension money"". What happened was that the employers just didn't fund the pensions. They promised to pay - but didn't set aside any money, or set aside not enough. Instead, they spent it on something else, and when the time came that the retirees wanted their money - they didn't have any. That's what happened in Detroit, and in many other places. 403(b) is in fact the solution to this problem. Instead of defined benefit - the employers commit on defined contribution, and after that - it's your problem, not theirs, to have enough when you're retired."
You get to put money away with special tax incentives (ie - no or less taxes to pay)  They are state sponsored and therefore pretty reliable, but some states are better than others. Like with many of these tax incentive type accounts (FSA, Dependent Care Spending Accounts) they are use it or lose it.  (In a 529, use it or transfer it).  So the money put away is a sunk cost towards education and cannot be repurposed for something else should your kid not want to attend school. http://money.howstuffworks.com/personal-finance/financial-planning/529.htm
"It will count as income, and you can deduct as much of your moving expenses as allowed by tax laws.   If you also count it as a reimbursement, then you're double-taxed - once for the income and again by reducing your moving deduction. The ""reimbursement"" amount is designed for when you get literally reimbursed for exact expenses directly, bypassing the tax on that compensation. The only difference will be that you (and your employer) pay FICA and medicare on the ""relocation bonus"" that you wouldn't if you were reimbursed.  Also, with a reimbursement you are not incentivized to minimize the cost of your relocation (since it's not your money you're spending).  With a bonus, since you get to keep whatever is left over, you have a vested interest in keeping your expenses down."
US corporations are allowed to automatically enter employees into a 401K plan.  A basic automatic enrollment 401(k) plan must state that employees   will be automatically enrolled in the plan unless they elect otherwise   and must specify the percentage of an employee's wages that will be   automatically deducted from each paycheck for contribution to the   plan. The document must also explain that employees have the right to   elect not to have salary deferrals withheld or to elect a different   percentage to be withheld. An eligible automatic contribution arrangement (EACA) is similar to   the basic automatic enrollment plan but has specific notice   requirements. An EACA can allow automatically enrolled participants to   withdraw their contributions within 30 to 90 days of the first   contribution. A qualified automatic contribution arrangement (QACA) is a type of   automatic enrollment 401(k) plan that automatically passes certain   kinds of annual required testing. The plan must include certain   features, such as a fixed schedule of automatic employee   contributions, employer contributions, a special vesting schedule, and   specific notice requirements. You generally have a period of time to stop the first deposit. One I saw recently gave new employees to the first paycheck after the 60 day mark to refuse to join. You also may be able to get back the first deposit if you really don't want to join. If you don't want to participate look on the corporate website or the Fidelity website to set your future contributions to 0% of your paycheck. Keep in mind several things: Personally I'm against any type of government sponsored investments or   savings. I can save money on my own and I don't care about their   benefits. Some companies provide an annual  contribution to all employees regardless of participation in the 401K. They do need to establish an account to do that. Again that is free money Does it mean if I never contribute any money so I will have 0 I might   go below 0 and owe them money in case they bankrupt or do bad   investments? Even in total market collapse the value of the 401K could never go below zero, unless the 401K was setup to allow very exotic investments.
"The presenter suggested we keep records of our claims for 10+ years in paper form. This seemed to be overkill. It would be overkill if you're taking distributions regularly and you have enough valid (and otherwise unreimbursed) medical receipts each year to correspond to your distributions. However, if you are pumping money into the HSA without regular distributions, then you may need to keep receipts for a long time, possibly since the beginning of your HSA. For example: If the IRS was to audit my HSA deductions would the Aetna online claims be adequate? It's better than nothing, but it is not ideal. You need to provide proof of what you actually paid, not just what was billed. (How would the IRS know if you actually paid the bill?) So, the bill and receipt together would be preferred. Also, there are many eligible expenses for HSA that would not be covered by your health insurance and would not appear in your Aetna statements (dental work for example). Personally I have an excel spreadsheet with every eligible expense listed, every contribution and distribution I make, and a box of receipts since I opened the HSA account. Should I also archive screenshots of these claims digitally somewhere? If you have the time and diligence to do it, then it wouldn't hurt. I personally am only one house fire away from having to make a lot of phone calls if I wanted to re-build my receipts folder from scratch. I actually have ""scan my HSA receipts"" on my todo list (where's it been for years as a pretty low priority). Lastly it makes sense to spend the money in my HSA on anything eligible because you can never roll it over into a retirement account, its shaky if another person (spouse) could get reimbursed for eligible medical expenses if you die, and if you lose your receipts you may not be able to spend all of the HSA money tax free. Is this an accurate assessment or is there a reason why I should not touch the HSA money at all and wait to reimburse my eligible expenses. First off, if you are married the HSA can be transferred to your spouse.
For Federal Return, Schedule H and its Instructions are a great start.  You are the nanny's employer, and are responsible for FICA (social security and medicare) withholding, and also paying the employer portion.  You will offer her a W4 so she can tell you how much federal and state tax to withhold. You'll use Circular E the employer's tax guide to calculate withholding. In January, you'll give her a W-2, and file the information with your own tax return.  For State, some of the above applies, but as I recall, in my state, I had to submit withholding quarterly separate from my return. As compared to Federal, where I adjusted my own withholding so at year end the tax paid was correct. Unemployment insurance also needs to be paid, I believe this is state.  This issue is non-political - I told my friends at the IRS that (a) the disparity between state and federal to handle the nanny tax was confusing for those of us trying to comply, and (b) even though we are treated as an employer, a 'guide to the nanny tax' would be helpful, a single IRS doc that doesn't mix non-nanny type issues into the mix.  In the end, if a service is cost effective, go for it, your time is valuable, and thi is something that only lasts a few years.
"A TFSA is a tax free savings account.  It is a type of account where you can buy various investments like stocks, bonds, or funds (mutual, exchange traded, and money market).  There are some other options but it's best to see what your bank or broker will allow. You probably specified the type of investment when you opened the account.  You can look at your statements or maybe online to see what you're invested in.  My guess is some kind of HISA (high interest savings account).  This is kind of the default option for banks. The government created these accounts for a variety of reasons.  The main stated reason was to encourage people to save.   Obviously they also do things to get votes.  There was an outcry after the change to a type of investment called ""investment trusts"".  This could be seen as a consolation prize.  These can be valuable to seniors for many reasons and they tend to vote more often.  There was also an election promise to eliminate capital gains taxes in some fashion. It's not profitable for the government, in fact it supposedly cost the federal government $410 million in 2013.  Banks make money by investing your deposit or by charging fees. You can see what every tax break 'costs' the government in lost revenue here http://www.fin.gc.ca/taxexp-depfisc/2013/taxexp1301-eng.asp#toc7"