Posts Tagged ‘income’
Thursday, May 6th, 2010
The tax cuts instituted under President Bush are going to expire at the end of this year. Maybe you believe those in Washington will extend the current tax law, but that would take an act of Congress. If they’re not extended, how serious will this be to the average person? How will this tax increase of $2.4 trillion affect the average tax payer?
This lack of repeal will increase taxes for 17 million seniors an average of $2,034 per year according to the Heritage Foundation, a Washington D.C. non-profit think tank. That is approximately $170 per month! Many seniors will find themselves dipping into savings to pay the taxes, if they have savings at all. (more…)
Tags: business, debt, financial, income, money, retirement, save, tax
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Wednesday, March 24th, 2010
In the nineties I was involved with a number of companies that brought Russian technology to the United States to develop businesses. At one point I asked one of the Russian gentlemen what he thought of our country. He said he was particularly taken by our privileged class. When I asked him to clarify the statement, he said, “You know, your teenagers.” He went on to explain how they drive the cars, buy the clothes and the electronic equipment, and they do it all at little to no cost to themselves. However, they are not the only group that has favor in this nation. There are other groups with favor based on age, health, income, net worth, and occupation.
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Tags: business, debt, family, financial, health, healthcare, income, inflation, medical, MEDICARE, money, retirement, save, tax
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Friday, December 11th, 2009
We live in such a complex world today. Each day brings more legislation to add to the complexity. How does the average person cope? Having counseled multitudes of people over the years, I find it fascinating that so much money is wasted by even the brightest people. We live under the belief that an accountant, a financial planner, a business executive, a banker, an insurance advisor, a lawyer, a physician, a mortgage broker, and a financial aid officer will provide our needed knowledge. I have counseled all of these types of advisors and found significant money they had thrown away because of their lack of knowledge. Are we all bright enough or have we as a people entered into such a specialized world that no one is taking time to address the bigger picture? There is money to be saved for everyone.
Proverbs 19:2 says, “It is not good to have zeal before knowledge.” We live in a society that has zeal and limited knowledge so we miss out on the hidden manna that is available to everyone. (more…)
Tags: appliances, business, debt, energy, financial, food, house, income, money, save, tax, utility, water
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Friday, October 16th, 2009
Tax Strategies to Consider Before 2010
If the recession has touched your life financially, you might want to do some tax planning to either postpone or accelerate your tax deductions and/or income. For those anticipating more income this year than next, it may be prudent to accelerate deductions and postpone income. For those anticipating less income this year than next, consider postponing deductions and accelerating income. Here are some ways to do that.
One example might be to do a conversion of a Traditional IRA to a Roth IRA. This will result in more income in the year completed, but will reduce taxes in future years, particularly after the Roth has been in place five years. It will be necessary to look at how the additional income will affect your taxes this year before you do complete the process. (more…)
Tags: business, car, employment, family, financial, income, money, tax
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Monday, September 14th, 2009
Increasingly we are seeing more families facing a financial crisis because of their inability to make mortgage payments. The reasons vary from unemployment to too much credit card debt, reductions in salary caused by overseas competition or significant changes in cost of living. Many people are struggling in today’s economy. The question of course is, “What are the options for the family?”
The first option is to sell the home so as to have a more affordable housing expense. Many times homeowners are reluctant because the home would sell below what the family originally paid. This would obviously result in the seller losing money and leave the mortgage company with an unsecured loan for the remainder of the debt. We would call this type of sale a short sale. For such a sale to take place, the mortgage company would have to agree. The homeowner would then have to pay off the unsecured portion of the debt. The advantage would be to protect the family’s credit rating and avoid bankruptcy. (more…)
Tags: debt, family, financial, house, income, money, tax
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Friday, August 28th, 2009
In the year 2011 when the first baby boomer reaches 65 years of age there will be a significant tax increase without an act of Congress. This will happen when the tax cuts put in place under President Bush expire. What I have observed since the Bush tax cuts took effect was an increase in taxes at the state and local level as federal funds were cut back. When the tax increase takes place we will see taxes, at least in Ohio, at an unprecedented level.
What will this mean to the average family earning $50,000 per year? Using standard deductions a family earning $50,000 will pay an extra $200 per month in federal taxes. If this was the only tax to be concerned with it might be possible for a family to survive. But it’s not. (more…)
Tags: business, employment, energy, fuel, gas, income, inflation, tax
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Friday, June 26th, 2009
HELPING OTHERS
The complexity of good stewardship for today’s family has gone way beyond the average person’s comprehension and understanding. As an independent financial advisor for over forty years, I have found it increasingly difficult to stay abreast of the constant changes in government programs, tax law, health care, debt management, portfolio analysis, technology, food cost reduction, consumer products, automobile maintenance, estate planning, retirement planning, college cost reduction, home financing, extended health care (nursing homes, assisted living, etc.), career management, employment benefits, and personal budget management. Living expense reduction and asset management is my life’s work, but few financial planners specialize in both of these areas. If I have trouble keeping up with all the changes, do you think most people in our society have missed taking full advantage of their resources?
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Tags: business, debt, financial, health, income, money, save, tax
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Friday, June 19th, 2009
CHARITABLE GIVING REFORM
Congress and the current administration are now considering doing away with deductions for charity. While this plan may initially be targeted toward those with high incomes (in excess of $250,000), it will affect all socio-economic classes when finalized. With the anticipated inflation, those now considered middle-class may find themselves losing their deductions as incomes rise to meet the inflation demand. The poor and lower middle-class lose the benefits from charities.
The deduction for charitable contributions is one of the oldest deduction provisions in our tax law, enacted in the War Reform Act of 1917. While many changes and adaptations have been made to this provision over the years, Americans are still ‘rewarded’ for supporting, what the 1981 Joint Committee on Taxation said, were “…organizations which provide services that otherwise might have to be provided by the Federal Government.”
This plan comes at a time when the need for charity in the United States is greater than it has been in the last several decades. Non-profits are currently facing the ‘perfect storm’ of issues: contributors’ wealth evaporation, cutbacks by cash-strapped states and municipalities, and skyrocketing need. A study by the Center of Philanthropy at Indiana University estimated that the tax change could reduce affluent households’ overall itemized charitable giving by nearly 5 percent — or about $3.87 billion — based on an analysis of the Internal Revenue Service’s most recent deduction data. (more…)
Tags: income, inflation, money, tax
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Friday, June 12th, 2009
Health Care for the Future
Current health care costs are estimated to be, on average, more than $8,000 for every man, woman, and child in the United States. I think we can all agree that there is not enough money available to pay for that. At the center of the problem is the need for law changes limiting excessive lawsuit settlements related to health care that cause the liability expenses for physicians and hospitals to soar. In addition, the vast majority of physician offices are run inefficiently. For the most part they are “mom and pop” organizations. A uniform standard for reporting and for claims processing would go a long way in reducing costs.
I recently met with a physician who does research on longevity and asked him what the most essential steps are to extend life. His answer surprised me. Meditation (prayer) was number one, followed by stretching, aerobic and anaerobic exercise, and finally, nutrition. As individuals we need to take control of our own health. Most of us know how to be healthy, but we often lack the discipline to follow through to make it happen. (more…)
Tags: business, debt, health, income, medical, money, tax
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Friday, May 29th, 2009
Maximizing Compensation
Having been engaged in financial planning for over forty years I am fascinated by the lack of care taken by employees, business owners, ministry leaders and their advisers in the structure of compensation. Too often significant dollars are spent needlessly because of a lack of understanding of some of the fundamental tax laws. Structuring compensation properly can benefit the owner, the business or ministry, and the employees, saving thousands of dollars.
I always begin this process by reviewing the personal budget of the owner or ministry leader. From there we identify future goals of the decision maker so that we can look at what new employee benefits we may want to introduce in the future. Next, a review of the business budget is done to identify tax liability levels for the company and how money is being spent. We begin to methodically look at reducing any items in the business budget that may decrease operating expenses. Businesses can be structured to pay healthcare costs, dental, long term care insurance, eyeglass care, childcare, transportation, parking, adoption, life insurance, disability insurance, educational reimbursement, prescriptions, and moving costs on a pre-tax basis. Additional deductions can be realized with retirement plans and, in some cases, utilities and housing allowances. (more…)
Tags: business, financial, income, money, save, tax
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