Regardless of what you may have thought of President George W. Bush, there is an important chapter coming to a close at the end of 2010.
And it hits you in your wallet directly.
What is it? Tax rates are rising! Tax rates are rising!
As the following article points out, unless Congress acts, tax rates will be going up for everyone – not just the “rich” as President Obama has promised.
http://www.smartmoney.com/personal-finance/taxes/how-the-expiring-bush-tax-cuts-affect-you/
But won’t Congress act?
Maybe, but think about the record budget deficits and debt that our nation has. No one likes higher taxes, but at some point the government’s fiscal policy can’t continue this way forever.
So what does this mean?
What are you doing to minimize the tax drain on your money? Are you taking advantage of tax free accounts with your money?
What are you doing to lock in tax rates before they rise? Have you done a Roth conversion yet?
Normally, accountants tell you to defer income (to pay taxes later) and accelerate deductions (to save taxes now), but this advice may have to be reversed for 2010.
I’m not suggesting that taxes are the only consideration when it comes to your money. But why pay more than you have to?
This chapter is coming to an end. And unfortunately we have a pretty good idea of how the next chapter starts.
What are you going to do about it?
Answer to last week’s trivia question: E – All of the above. Many people mistakenly think that now with the CARD act, credit card companies can’t raise their interest rates. As Lee Corso of ESPN would say “Not so fast my friends”. Any of those circumstances allow the interest rate to rise.
This week’s trivia question: Does money buy happiness? According to a recent Gallup poll of people in 132 countries, at what level of income does happiness start to plateau (i.e. starts to level off)? Is it?
A - $50,000
B – $75,000
C - $100,000
D - $150,000
