Happy New Year Resolutions
New Year Resolutions?
As we move from year to year, many people make New Year’s resolutions, and they also make financial plans as taxes must be filed shortly after January 1st. Personally, I like to make plans, but not set myself up with New Year’s resolutions that I may not keep. This only makes me feel guilty. I do make goals, but I don't beat myself up when the are not met.
I decided last year to eat healthier this year and lose some weight, which I have accomplished. The result has been good as I have more energy and I was able to stop taking two medications. This was not a New Year goal as I started in the summer.
I also try to spend as much time with my family members as I can. Three friends of mine have died this past year, so I have decided that each day is precious. Make each day count is my new motto.
Protect Your Finances
We are making some decisions about our finances also. My husband had a stroke at age 59, which meant he could not work until age 65 as he had planned. We have learned to live on a budget, yet I do not feel deprived at all. We still try to make good decisions and look ahead to protect our future. This is a time that many people may make decisions concerning finances.
As there is so much uncertainty due to the fiscal cliff and what one might owe in taxes, it makes sense to make some decisions to protect your financial situation. Regardless of what the government does, many of us are already living on a strict budget. Since there is a good probability that taxes will increase, it might be wise to divert 401K money to a Roth IRA. Taxes will be higher down the road so this is a savings in the long term. Capital gains tax is scheduled.
Additionally, the new 1.45% Medicare payroll tax increase also takes effect next year. Beginning in 2013, a Medicare tax may also be owed on net investment income. Taking a good look at your retirement program is probably advisable at this time.
Another thing that can help for people who write off deductions would be to make the January 1st house payment in December in order to write-off the interest in this tax year. Pay off any medical bills this year if you write off your medical expenses, if at all possible.
Is it worth moving to live in a state with lower taxes? That is certainly a question that each individual must consider. California is the most expensive state to live, and many people are moving away. They are trying to pass legislation that will triple the vehicle license fee required to register your cars. Some states have no state income tax, such as Texas and Florida, which make them a popular place to live.
Good News for Vets
There is some good news for military personnel returning home. A program called “the returning heroes and wounded warriors work opportunity tax credit” gives a business that hires a vet a credit up to $9,600. The amount is based on the amount of time the vet has been unemployed.
The facts are that many people are unemployed or underemployed. Prices are rising on almost everything but typically income is not. Spending your money wisely just makes sense. There is so much uncertainty for the financial future of Americans that it is wise to budget and plan for the year. Give to those less fortunate when you can and sometimes giving your time is the most important thing. Live each day to the fullest and enjoy your life!