Thursday, December 23, 2010

Some Things to Realize for 2011

Well, 2011 is almost here. As you are frantically shopping for those last minute gifts, don't forget that things will be changing soon....

Fidelity Investments has created a nice, one page summary of the change in the new tax law. "After weeks of heated Congressional negotiations on Capitol Hill, President Obama has signed the tax bill into law. The new law temporarily extends the 2001 and 2003 federal income tax rate cuts, extends unemployment insurance for 13 months, provides new payroll tax breaks, reinstates the estate tax, and more."


One of the big changes is a reduction in the social security tax from 6.2.% to 4.2% for folks making up to $106,800. For most of us that means a 2% "raise" in 2011! Now I don't agree with the amount of money the government takes from us in taxes. Much of it is
wasted and you have to work way to long each year to pay your taxes. However, 2% is 2%! So what will you do with that "extra" money the government has decided NOT to take from you?

Each of us has our own unique situation. Maybe you want pay down some credit card debt; maybe you can save for something you've always wanted; maybe you'll increase your 401k contribution and get a bigger "raise" with the company match you receive. The point, as always, is you need to educate yourself about how these tax code changes affect you and decide what's best to do in your situation.

Happy New Year and don't forget to tell folks about the book!

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