The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) initiated a series of tax cuts, including reductions in the income and estate tax rates. However, the act included a ‘sunset provision,’ which takes effect December 31, 2010. This means that as of that date, various tax laws revert to pre-2001 status, as if EGTRRA had never happened—unless additional legislation has been passed between 2001 and today. We are midway through 2010 and many clients want to know which provisions are expiring and which are here to stay. A few major EGTRRA provisions of importance to many of our clients are summarized here.
April 27, 2010 2:49:10 PM
What is this new 3.8 percent Medicare tax everyone is talking about? If your income is defined as ‘high,’ meaning you earn more than $200,000 as a single filer and more than $250,000 as a married couple filing jointly, this new tax will affect you. Fortunately, we have some time to digest the concept and potentially plan accordingly, because the tax does not go into effect until 2013.
April 26, 2010 2:29:21 PM
As the holiday season quickly approaches, we are reminded of our charitable commitments yet to be fulfilled for 2009. Given the current state of the economy, many donors, as part of financial belt-tightening, may consider deferring or canceling gifts. But there may be alternatives to cash or checks that can help maximize the value of gifts to you and your charities.
April 22, 2010 2:48:21 PM
Recently, the Wall Street Journal reported that the index of leading economic indicators posted a large gain in March, 2010, capping a full year of increases. Mortgage delinquencies declined in March for the second month in row. Housing starts are improving for home construction companies. Financial companies, such as Citigroup, are reporting improved profits and earnings as the dust settles from strategic moves undertaken during the height of the financial crisis. These reports are only a sampling of the positive news currently impacting the U.S. economy and contributing to one of the most significant 12-month rallies in U.S. stock market history. At the end of the first quarter 2010, the stock market, as measured by the S&P 500 Index, is up an astounding 49.8 percent on a trailing 12-month basis (April 1, 2009 to March 31, 2010). The Russell 2000 Index, a proxy for smaller U.S. companies, is up even more—plus 62.8 percent for the same period.
March 29, 2010 2:15:14 PM
You’ll note that I last discussed the topic of rebalancing in September, 2008. The market was in a tailspin, to put it mildly. The Dow Jones Industrial Average was at 10,800, off considerably from its October, 2007, high of 14,000. Bear Stearns was gone. Lehman Brothers was gone. AIG was effectively owned by the U.S. Taxpayers. The credit markets were in complete disarray and confidence in our financial system seemed to be worsening every day.