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How to get rid of a timeshare

Dear Dave,

My husband and I purchased a timeshare in 1999 in Gatlinburg, Tenn. It is now three years later and we’ve never even used it once. We know it was a mistake to buy it, and now all we want to do is get rid of it! What’s the best way for us to get this timeshare off our hands?

Sandy

Owensboro, Ky.

Dear Sandy,

Don’t go through companies or real estate agents that offer to list your properties for a prepaid commission, because nothing guarantees that your property will ever sell. I hate to break it to you, but I’ve never met one person that was able to sell a timeshare that had a prepaid commission.

Since the company you purchased from is still selling in that area, you need to contact the executive director of sales. Tell him or her that you will sell it for half of the going rate and will pay double the commission.

You’re going to lose money on this, but the faster you get rid of this, the better. Timeshares go down in value worse than cars! Take the loss now and never, never buy a timeshare again.

Dave


How do you pay taxes if you are self-employed?

Dear Dave,

I am 25-years-old and up until now, I have been punching a time clock for other companies, but now I have started to work for myself. I am wondering how to work out the FICA and all of the other taxes that I will have now that I am self employed. Is it any different if I am just doing odd jobs? How should I handle paying these taxes?

Travis

Sioux City, Iowa

Dear Travis,

You will not have FICA if you are self-employed. The only thing you have is your income tax, and you pay what is called self-employment tax, which is both sides of the social security, so it is 15.3 percent. Even if you are doing odd jobs, you have to do that. If you are making over $650 in a quarter of a year, you have to file an estimated quarterly return with some money.

So what I would suggest you do is for any money that you are making on odd jobs or any other source of self-employed income, open up a separate checking account called ‘Travis’s Business Account’ or what ever you are going to call your business. You can do that by just using your social security number. You don’t have to be incorporated or anything like that. It doesn’t have to be anything complicated, just so you have the business account separate. Put all of your business income into that account, and any expenses for the business comes from that account.

Any profit that you make from the business, I would suggest that you set aside one-fourth of every dollar you take home. You kind of withhold on yourself. If your profit is $1,000, write yourself a check for $750 and then write a separate check for $250 and deposit it into a separate savings account called ‘Travis’s Tax Account’ That will cover your income tax and your self-employment tax which is all of your taxes unless you make over $60,000 or $70,000 net profit from this business. By then you will need to set aside more. But by then you would be able to hire a bookkeeper or a CPA to take care of that for you.

Doing it this way will save you from having a huge IRS bill at the end of the year. A lot of people face that because they haven’t done their quarterly estimates or haven’t withheld on themselves and they get into a mess.

Dave


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