Do you have an unusual situation in comparison to last year? If so, please go see your tax adviser. Otherwise you could be surprised by a tax bill in April. Even if your adviser charges a little, the advice could be worth well more than what you pay. We don't charge for tax planning if they are a current client. Ask your tax professional if that's included. Paying a little more for that inclusion would be well worth the extra.
For instance, if you normally get the Earned Income Tax Credit with several kids as exemptions and the only income you have this year is unemployment, you may be in for a rude awakening, especially if you did not choose to withhold taxes on that unemployment. Under the tax code unemployment is not considered earned income and you will not be entitled to any EIC which for many is a very substantial credit and is the driver for getting a refund. Instead you may be looking at a balance due. Working even a minimum wage job is far better than staying on unemployment, even if at a glance the unemployment is more on a take home pay basis.
The EIC, the additional child tax credit, and the making work pay credit all snowball and become a dynamic threesome of refundable credits that push up a tax refund to almost absurd levels when compared to the income earned. For instance, a single person making $15,000 in unemployment would get no refund at all. The same person making $15,000 in wages would get a windfall refund of at least $7,850. You read that correctly -- at least 52% of what they made annually due to those three credits.
There are many other scenarios I could outline, but the more common ones for year end planning are: Withholding adjustments, charitable giving methods, capital gains taxation, buying or selling real estate, buying equipment (for businesses and landlords), social security impacts (getting credits or early retirement planning), paying projected state or local balances due, setting up or contributing to pension plans, and medical expense payment timing.
If you do your own taxes and your situation is different, it is well worth an afternoon to sit down and do a projection based upon last pay stubs and estimated amounts. The well of opportunity and tragic consequences run equally as deep without planning. I urge you to thwart the latter.
Thursday, December 23, 2010
Friday, December 17, 2010
Kicking it Down the Road
Now there's a phrase that everyone should know. You can think of it as the anti-thesis of Truman's "The Buck Stops Here". Politics have devolved into a "not on my watch" mentality. The person at the end will be left holding the bag, when the music stops. Problem is the music hasn't stopped yet.
We elect officials that are suppose to look out for us in the long term. But unfortunately the electorate only seems to elect officials with a "what have you done for ME lately" attitude. We all need to wake up. We can not continue to pile on debt and make believe that problems will go away. We need action now. We can not kick it down the road any longer. The debt will pile up to enormous levels and the whole system will collapse. For my analogy, the music will stop.
No more government handouts -- no tax credits, education, military, police, etc. It WILL happen. It's a certainty. Just like defunct businesses, banks will only lend for so long and they'll cut their losses. They will stop giving. The government's lenders will do the same. They will stop. Interest rates will climb. We will pay more and the debt will bury us.
Congress and the President needs to stop "Kicking it Down the Road". That solves nothing. There ought to be a law.... Good luck in getting that passed.
We elect officials that are suppose to look out for us in the long term. But unfortunately the electorate only seems to elect officials with a "what have you done for ME lately" attitude. We all need to wake up. We can not continue to pile on debt and make believe that problems will go away. We need action now. We can not kick it down the road any longer. The debt will pile up to enormous levels and the whole system will collapse. For my analogy, the music will stop.
No more government handouts -- no tax credits, education, military, police, etc. It WILL happen. It's a certainty. Just like defunct businesses, banks will only lend for so long and they'll cut their losses. They will stop giving. The government's lenders will do the same. They will stop. Interest rates will climb. We will pay more and the debt will bury us.
Congress and the President needs to stop "Kicking it Down the Road". That solves nothing. There ought to be a law.... Good luck in getting that passed.
Friday, December 10, 2010
Pop Up Ads on Internet Pages
Don't get me wrong. Advertisers have to advertise to get their messages out. I understand that. But do they really have to cover up the article I'm reading to do that? Really? I'm reading an article and some ad over at the side just expands and covers up my entire article, making it impossible for me to read.
To top that off it's usually some drop-dead gorgeous model or buff dude that's pushing something that I don't want or use. If anything, I'll remember that ad negatively. You see I don't see supermodels in my daily life. Yeah, I'm like any other guy and fantasize about meeting one, but honestly, I'm not going to. So why interrupt my reading of an article that I know some writer slaved over to put together? The ads on the side get my attention enough. If I'm interested it's just a mouse click away.
The worst are the video ads that cover the article. I might have moused over something that triggered "the ad from hell". If I'm in a quiet office space, I've got to tell you... that's embarrassing. I'm quietly reading my article. Possibly doing research for work or just keeping up to date on things and bam! There's suddenly a hot chick blaring on about a $80,000 car that I can't afford, nor do I even care about. Of course the volume on the ad is about three times too loud and everyone turns their heads in your direction.
Thank you Chevrolet! I know the programmers that you hired to insert that ad on my web page think they're clever and all, but quite frankly you can take your car and shove it. The annoyance factor is something everyone should consider when buying. I certainly do. Perhaps we'd see less of that.
To top that off it's usually some drop-dead gorgeous model or buff dude that's pushing something that I don't want or use. If anything, I'll remember that ad negatively. You see I don't see supermodels in my daily life. Yeah, I'm like any other guy and fantasize about meeting one, but honestly, I'm not going to. So why interrupt my reading of an article that I know some writer slaved over to put together? The ads on the side get my attention enough. If I'm interested it's just a mouse click away.
The worst are the video ads that cover the article. I might have moused over something that triggered "the ad from hell". If I'm in a quiet office space, I've got to tell you... that's embarrassing. I'm quietly reading my article. Possibly doing research for work or just keeping up to date on things and bam! There's suddenly a hot chick blaring on about a $80,000 car that I can't afford, nor do I even care about. Of course the volume on the ad is about three times too loud and everyone turns their heads in your direction.
Thank you Chevrolet! I know the programmers that you hired to insert that ad on my web page think they're clever and all, but quite frankly you can take your car and shove it. The annoyance factor is something everyone should consider when buying. I certainly do. Perhaps we'd see less of that.
Thursday, December 2, 2010
Our Political System
Is it me, or is our political system spinning out of control? Our representatives seem to have lost all motive for what they are there for -- take care of the people's money. But they just can't get along. They argue. They backbite. They can't agree on anything. I swear that one political party thinks the sky is orange and the other one thinks it's yellow. In fact, it's blue!
The problem that this creates is that our country is attempting to go in two vastly different directions and we, the taxpayers, are funding BOTH. We can't seem to compromise as each party blames the other for the ills of society, and insists that their direction be chosen. It's maddening!
Of course slicing up the budget into categories and seeing what we might be able to cut is a difficult, tedious process, but it must be done (1). Here's a two part article that outlines things fairly well. We must realize that our military is too big and we give away too much to people who are act irresponsibly to begin with. I know one of those statements don't sit well with you if you are a Republican and/or Democrat. I'm sorry, but we have to cut some things. Those are areas where we can.
With the average salary of a Federal employee trumping that of the private sector by quite a margin (2), I also believe a 15% pay cut for all Federal employees is in order. Apples to apples or not, Federal employee total compensation (with benefits) is simply something we can't afford as a society given the "parasitic" nature of those employees (3). Government should not be paying this kind of compensation vs the private sector. Even taking into consideration the differences, the Federal employee's pay comes out on top.
Additionally, we need to take a good hard look at our military spending. Look at our budget: Any way you slice it, the military part is too big. We can not afford to be the world's policeman any longer. We can not afford to fund over 700 bases outside the U.S. We can't afford two wars. I'd much rather reduce our troop levels, scale back the weapons of war, and put 10% of the money we save back into prevention and intelligence. Remember the adage: A stitch in time, saves nine. It's true. It's what our forefathers subscribed to. While there was a lot of disagreement back then, common sense seemed to prevail more often than not. We need to get back to that. We need to balance our checkbook. Issues be damned. Our house needs to be in order.
(1) http://thefalconpost.com/archives/406
(2) http://mjperry.blogspot.com/2010/03/blog-post.html (yes, a blog, but see his cites)
(3) http://blogs.federaltimes.com/federal-times-blog/2010/08/19/cato-federal-employment-is-parasitism-on-private-sector/
The problem that this creates is that our country is attempting to go in two vastly different directions and we, the taxpayers, are funding BOTH. We can't seem to compromise as each party blames the other for the ills of society, and insists that their direction be chosen. It's maddening!
Of course slicing up the budget into categories and seeing what we might be able to cut is a difficult, tedious process, but it must be done (1). Here's a two part article that outlines things fairly well. We must realize that our military is too big and we give away too much to people who are act irresponsibly to begin with. I know one of those statements don't sit well with you if you are a Republican and/or Democrat. I'm sorry, but we have to cut some things. Those are areas where we can.
With the average salary of a Federal employee trumping that of the private sector by quite a margin (2), I also believe a 15% pay cut for all Federal employees is in order. Apples to apples or not, Federal employee total compensation (with benefits) is simply something we can't afford as a society given the "parasitic" nature of those employees (3). Government should not be paying this kind of compensation vs the private sector. Even taking into consideration the differences, the Federal employee's pay comes out on top.
Additionally, we need to take a good hard look at our military spending. Look at our budget: Any way you slice it, the military part is too big. We can not afford to be the world's policeman any longer. We can not afford to fund over 700 bases outside the U.S. We can't afford two wars. I'd much rather reduce our troop levels, scale back the weapons of war, and put 10% of the money we save back into prevention and intelligence. Remember the adage: A stitch in time, saves nine. It's true. It's what our forefathers subscribed to. While there was a lot of disagreement back then, common sense seemed to prevail more often than not. We need to get back to that. We need to balance our checkbook. Issues be damned. Our house needs to be in order.
(1) http://thefalconpost.com/archives/406
(2) http://mjperry.blogspot.com/2010/03/blog-post.html (yes, a blog, but see his cites)
(3) http://blogs.federaltimes.com/federal-times-blog/2010/08/19/cato-federal-employment-is-parasitism-on-private-sector/
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