Tax Holiday? Did I read that right? Yes!
If you are an employee being paid w-2 wages, the tax package passed last week included Tile VI - TEMPORARY EMPLOYEE PAYROLL TAX CUT. (as of this writing, the IRS has not issued information on this (www.IRS.gov). Tax Holiday as defined in the legislation means 2011.
The payroll tax withholding will change from 6.2% to 4.2% on the FICA taxes being withheld. If you make $10/hour and work 40 hours, that will mean a net increase of about $8 per week. While that might not seem like much, in the course of a year, that is $416, enough to buy a flat screen TV.
On the surface it has a net effect of lowering your Social Security contributions, too. However it appears there is a provision transferring funds from the general fund to the Retirement funds. That is suppose to keep Social Security from falling behind.
No determination has been made as to how that will apply to self employment income.
For brokers and agents with paid w-2 assistants, please be sure to make the appropriate adjustments for your employees. There is no change in the amount of employer contributions.
If you want to look at the whole thing, please check out Thomas.gov. You can find all the info by referencing HR 4853.
Thursday, December 23, 2010
Tuesday, December 21, 2010
Lessons From Scrooge
Last year I posted a piece in another venue I called "Christmas Ponderings". I want to continue that tradition with a similar post for this year. If you read that post, some of this might be a repeat. If you know me, you will have heard some or all of this before.
George Barna recently reported a growing trend among believers: an increase in scriptural illiteracy. Why is that a big deal? If we don't know and understand the big picture how can we understand our place in the scheme of things. Some of the most common phrases uttered at this time of year come from our Christian heritage and the heavy Christian influence on the holiday.
PEACE on Earth
Good will toward all men
Joy to the World
Immanuel, God With us...
But how much of what we say so we truly understand or believe? Why are those the components many would like to remove from the conversation.
A friend recently shared the following: "I once heard a rabbi say that the first question anybody asks God in the Bible is, 'Am I my brother's keeper?' And, the rabbi said the rest of the Bible was God's answer to that question. I take that a step further. The last question anybody asks God in the Bible is, 'Why have you forsaken me?' See, if you answer the first question correctly, the second question becomes moot. But, Christians keep (missing the point)of the first question, leaving them with the second question, which they (also) fail miserably."
I have spent a little more time with Ebenezer Scrooge this year than in many year. I dare say, I have watch more versions of Dickens classic, "A Christmas Carol" than I knew existed. And I was struck by how much they varied. Some more faithful to the dialog of the book than others. But there were two sequences that particularly caught my eye. One at the beginning; the other at the end. Together, they do a good job of reminding us of the true meaning, and the Christian heritage of the holiday... If fact they remind us that it is a Holy day.
The nephew broaches these points in his explanation of why Christmas is important:
PEACE on Earth: "There are many things from which I might have derived good, by which I have not profited, I dare say," returned the nephew. "Christmas among the rest. But I am sure I have always thought of Christmas time, when it has come round
Immanuel, God With us... "-- apart from the veneration due to its sacred name and origin, if anything belonging to it can be apart from that" ... And therefore, uncle, though it has never put a scrap of gold or silver in my pocket, I believe that it has done me good, and will do me good; and I say, God bless it!"
Joy to the World "-- as a good time: a kind, forgiving, charitable, pleasant time:"
Good will toward all men: "the only time I know of, in the long calendar of the year, when men and women seem by one consent to open their shut-up hearts freely, and to think of people below them as if they really were fellow-passengers to the grave, and not another race of creatures bound on other journeys."
With the transformation, we see that Ebenezer became a new creation. "Scrooge was better than his word."
He became his brothers' keeper: "He did it all, and infinitely more; and to Tiny Tim, who did not die, he was a second father. He became as good a friend, as good a master, and as good a man, as the good old city knew, or any other good old city, town, or borough, in the good old world."
He shared good will with all men: "Some people laughed to see the alteration in him, but he let them laugh, and little heeded them;" He was at peace: for he was wise enough to know that nothing ever happened on this globe, for good, at which some people did not have their fill of laughter in the outset; and knowing that such as these would be blind anyway, he thought it quite as well that they should wrinkle up their eyes in grins, as have the malady in less attractive forms."
And he had the Joy of God in his heart: "His own heart laughed: and that was quite enough for him."
If we want to live as Scrooge was said to have lived after his transformation, I am convinced we need Biblical literacy. While doctrine is important, I want you to look at the explanation of the Rabbi that the Bible is God's lesson of how we love Gd and love one another. I think that is a lesson even those of you who don't believe in the Gd of the Christians and Jews (and I think Muslims, too), can learn. So what is the lesson of Scrooge. Instead of being caught up in the hustle and bustle of the world at this time of year, let's let our "own heart laugh; and (let) that (be) quite enough for (us).
MERRY CHRISTMAS!
LETS KEEP CHRISTMAS EVERY DAY!
George Barna recently reported a growing trend among believers: an increase in scriptural illiteracy. Why is that a big deal? If we don't know and understand the big picture how can we understand our place in the scheme of things. Some of the most common phrases uttered at this time of year come from our Christian heritage and the heavy Christian influence on the holiday.
PEACE on Earth
Good will toward all men
Joy to the World
Immanuel, God With us...
But how much of what we say so we truly understand or believe? Why are those the components many would like to remove from the conversation.
A friend recently shared the following: "I once heard a rabbi say that the first question anybody asks God in the Bible is, 'Am I my brother's keeper?' And, the rabbi said the rest of the Bible was God's answer to that question. I take that a step further. The last question anybody asks God in the Bible is, 'Why have you forsaken me?' See, if you answer the first question correctly, the second question becomes moot. But, Christians keep (missing the point)of the first question, leaving them with the second question, which they (also) fail miserably."
I have spent a little more time with Ebenezer Scrooge this year than in many year. I dare say, I have watch more versions of Dickens classic, "A Christmas Carol" than I knew existed. And I was struck by how much they varied. Some more faithful to the dialog of the book than others. But there were two sequences that particularly caught my eye. One at the beginning; the other at the end. Together, they do a good job of reminding us of the true meaning, and the Christian heritage of the holiday... If fact they remind us that it is a Holy day.
The nephew broaches these points in his explanation of why Christmas is important:
PEACE on Earth: "There are many things from which I might have derived good, by which I have not profited, I dare say," returned the nephew. "Christmas among the rest. But I am sure I have always thought of Christmas time, when it has come round
Immanuel, God With us... "-- apart from the veneration due to its sacred name and origin, if anything belonging to it can be apart from that" ... And therefore, uncle, though it has never put a scrap of gold or silver in my pocket, I believe that it has done me good, and will do me good; and I say, God bless it!"
Joy to the World "-- as a good time: a kind, forgiving, charitable, pleasant time:"
Good will toward all men: "the only time I know of, in the long calendar of the year, when men and women seem by one consent to open their shut-up hearts freely, and to think of people below them as if they really were fellow-passengers to the grave, and not another race of creatures bound on other journeys."
With the transformation, we see that Ebenezer became a new creation. "Scrooge was better than his word."
He became his brothers' keeper: "He did it all, and infinitely more; and to Tiny Tim, who did not die, he was a second father. He became as good a friend, as good a master, and as good a man, as the good old city knew, or any other good old city, town, or borough, in the good old world."
He shared good will with all men: "Some people laughed to see the alteration in him, but he let them laugh, and little heeded them;" He was at peace: for he was wise enough to know that nothing ever happened on this globe, for good, at which some people did not have their fill of laughter in the outset; and knowing that such as these would be blind anyway, he thought it quite as well that they should wrinkle up their eyes in grins, as have the malady in less attractive forms."
And he had the Joy of God in his heart: "His own heart laughed: and that was quite enough for him."
If we want to live as Scrooge was said to have lived after his transformation, I am convinced we need Biblical literacy. While doctrine is important, I want you to look at the explanation of the Rabbi that the Bible is God's lesson of how we love Gd and love one another. I think that is a lesson even those of you who don't believe in the Gd of the Christians and Jews (and I think Muslims, too), can learn. So what is the lesson of Scrooge. Instead of being caught up in the hustle and bustle of the world at this time of year, let's let our "own heart laugh; and (let) that (be) quite enough for (us).
MERRY CHRISTMAS!
LETS KEEP CHRISTMAS EVERY DAY!
Monday, December 20, 2010
TAX BILL HIGHLIGHTS
With the tax relief package passed and signed at the end of the week, we see numerous extensions and some revision in numbers. I have been reviewing the contents of the bill and overall don't see major changes. Some apply to many. Most seem to apply to special circumstances. This post is simply a grocery list of some of the more common applications. My aim is to help you see what might affect you... to provide you with some talking points to review with your tax pro.
While I have opinions on the wisdom of the credits and adding $850B + in expenses to the federal budget, that is not my focus. I will say this much as far as analysis goes: There do appear to be some credits in this package to stimulate new manufacturing. Maybe that can jump start a real economic recovery.
SEC. 709. ENERGY EFFICIENT APPLIANCE CREDIT. This section will be good for next year. In short, it is promoting purchase of the 2011 models of appliances. Looks like a chance to spark that industry.
An extension of SEC. 710. CREDIT FOR NONBUSINESS ENERGY PROPERTY. ”(1) 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year, and `(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.”
Some of the other points:
SEC. 721. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS
SEC. 722. DEDUCTION OF STATE AND LOCAL SALES TAXES.
SEC. 723. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION PURPOSES.
SEC. 725. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR CHARITABLE PURPOSES.
There are also extensions of Estate Taxes, extensions of an investment incentive to generate business expansion, and finally a payroll tax holiday. A number of business credits were also extended.
Stay tuned for more on these and other changes in the tax code. Be sure to talk to your tax professional about how these changes will impact you. It might be worth taking a look at tax planning to help you maximize your return.
While I have opinions on the wisdom of the credits and adding $850B + in expenses to the federal budget, that is not my focus. I will say this much as far as analysis goes: There do appear to be some credits in this package to stimulate new manufacturing. Maybe that can jump start a real economic recovery.
SEC. 709. ENERGY EFFICIENT APPLIANCE CREDIT. This section will be good for next year. In short, it is promoting purchase of the 2011 models of appliances. Looks like a chance to spark that industry.
An extension of SEC. 710. CREDIT FOR NONBUSINESS ENERGY PROPERTY. ”(1) 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year, and `(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.”
Some of the other points:
SEC. 721. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS
SEC. 722. DEDUCTION OF STATE AND LOCAL SALES TAXES.
SEC. 723. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION PURPOSES.
SEC. 725. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR CHARITABLE PURPOSES.
There are also extensions of Estate Taxes, extensions of an investment incentive to generate business expansion, and finally a payroll tax holiday. A number of business credits were also extended.
Stay tuned for more on these and other changes in the tax code. Be sure to talk to your tax professional about how these changes will impact you. It might be worth taking a look at tax planning to help you maximize your return.
Friday, December 17, 2010
A Winning Attitude
I originally wrote this to celebrate the 2009 State Semi-finalists. It is still applicable today. Once again the Vikings made us proud. I saw signs all over the county wishing them well. From Schlarman High School's message board to the Westville Public Library, Vermilion County was showing it's pride in what the Vikings had accomplished. THANKS, VIKINGS!
I want to go off topic with this note. Instead of focusing on stats, or tips, or tax credits, I want to examine a that has concerned me for much of my tenure are a Realtor in Danville and Vermilion County. It is a defeatist attitude, as a new acquaintance called it. It permeates the county in general, and the city in particular. It is such a sad state that even those in the county will look down on the city. A major component of the attitude is a desire to live in glory days of the past. Unfortunately I was not in Danville during those times.
We moved to Danville in Sept, 1996, after GM closed. All I heard was how terrible things would be now that GM was gone coupled with a longing for the good old days of the 1970's when Danville was at it's peak. I have had agents tell me and prospective buyers: "You don't want to see that property" or "You don't want to buy in that neighborhood." I remember one instance when the listing agent had to show us through several apartment buildings. At each stop he lamented the decline of Danville. He would try to steer my buyers away from certain neighborhoods as not being worthy of their time or investment. That attitude persists.
I want to revisit some local news and contrast a trend in the city we should all learn from. I would like to congratulate the Danville High School football team on a tremendous season. This group of young men has given us something in which we can take pride. The Danville Vikings have won a school record tying 12 games in two consecutive seasons!. That is no small feat for a program many thought should be dismantled a little more than 5 years ago. The football team last won a share of the conference championship in 1996. Their last undefeated season and state semifinal appearance before last year were in 1976 during those famous golden years of Danville. "Only one other time in Danville school history have the Vikings had four straight playoff appearances and that was from 1975-78 under legendary coach Paul Shebby. " (Posted in SPORTS by Robert Hirschfeld & Matt Campbell on Tuesday, October 20, 2009 at 1:00). This year they extended that streak to 5 years.
"Conference nobodies since the mid-1990s" I believe the DHS football program fell victim of that attitude. Football games were played in the afternoon before nearly empty bleachers. When night football returned, the program had fallen into a string on winless seasons. The sins of the parents were being visited upon the children. But then something happened. Things became so bad opponents recognized all they had to do was play hard for a half and Danville would fold. "We were pretty sure we were going to win the game (at halftime)," said BHS quarterback Kyle Eash. "We knew Danville is a team that can get down on itself. (Published August 30, 1997, in The Pantagraph - Bloomington, Illinois)
The attitude prevalent in Danville reminds me of the story of the Israelites wanderings in the desert. Exodus recounts a scouting mission when 12 men went to gather information about the promised land. Two young men said "we can do this"; while 10 older, experienced men said, we will surely die. Repeatedly the Israelites (people of Danville) said things were so much better back then. "Why can't we go back," they ask? Their doubts and desire for the old days kept them wandering for forty years until that generation died out. The young people restored the nation and took over the promised land. Does our community have to wait on us to die and the young people to take control to reverse the trend? A group of young men were introduced to a positive influence who convinced them it was possible to create new glory days. He didn't just say, "back when Danville was great"; but, "Let's make DHS football great again."
Here is a brief clip from an Article in the Commercial News the morning after the Vikings won the conference title in 2009. It shows the character these young men have developed. "Luke said that’s because this group of Vikings are just good ol’ fashion football players. 'The kids played football. It was bad night, crummy weather, bad things happen against us, but the kids kept playing football until they won the game... the kids didn’t care. They just went out and played football,’ ... Our kids stood up to adversity and they did a heck of a job. 'Our kids got punched in the mouth by Normal, a great program, and they responded by standing up to it and getting it done.'’’
I spoke with a local amateur historian who told me of previous periods in our community's history in which there was major upheaval. In the previous episodes, the community rallied to restore Danville to it's best. When the brick industry died, mining replaced it. When mining died, heavy industry was introduced. Now those days are gone. It is time we look for the new source of jobs. I look forward to the city learning the same lessons that DHS football has learned.
It's time to get back to the business of making our city what it can be. It is time we quit being conformed to the thinking that says Danville is dying. It is time our minds are transformed, much as the young football players were, into believing we can make a difference and that we can usher in a new era, a new set of glory days. I hope we learn what these young men have. We can make the future brighter by standing up to adversity and getting on with business. Thanks Vikings for a lesson well taught. I hope we're up to it!
I want to go off topic with this note. Instead of focusing on stats, or tips, or tax credits, I want to examine a that has concerned me for much of my tenure are a Realtor in Danville and Vermilion County. It is a defeatist attitude, as a new acquaintance called it. It permeates the county in general, and the city in particular. It is such a sad state that even those in the county will look down on the city. A major component of the attitude is a desire to live in glory days of the past. Unfortunately I was not in Danville during those times.
We moved to Danville in Sept, 1996, after GM closed. All I heard was how terrible things would be now that GM was gone coupled with a longing for the good old days of the 1970's when Danville was at it's peak. I have had agents tell me and prospective buyers: "You don't want to see that property" or "You don't want to buy in that neighborhood." I remember one instance when the listing agent had to show us through several apartment buildings. At each stop he lamented the decline of Danville. He would try to steer my buyers away from certain neighborhoods as not being worthy of their time or investment. That attitude persists.
I want to revisit some local news and contrast a trend in the city we should all learn from. I would like to congratulate the Danville High School football team on a tremendous season. This group of young men has given us something in which we can take pride. The Danville Vikings have won a school record tying 12 games in two consecutive seasons!. That is no small feat for a program many thought should be dismantled a little more than 5 years ago. The football team last won a share of the conference championship in 1996. Their last undefeated season and state semifinal appearance before last year were in 1976 during those famous golden years of Danville. "Only one other time in Danville school history have the Vikings had four straight playoff appearances and that was from 1975-78 under legendary coach Paul Shebby. " (Posted in SPORTS by Robert Hirschfeld & Matt Campbell on Tuesday, October 20, 2009 at 1:00). This year they extended that streak to 5 years.
"Conference nobodies since the mid-1990s" I believe the DHS football program fell victim of that attitude. Football games were played in the afternoon before nearly empty bleachers. When night football returned, the program had fallen into a string on winless seasons. The sins of the parents were being visited upon the children. But then something happened. Things became so bad opponents recognized all they had to do was play hard for a half and Danville would fold. "We were pretty sure we were going to win the game (at halftime)," said BHS quarterback Kyle Eash. "We knew Danville is a team that can get down on itself. (Published August 30, 1997, in The Pantagraph - Bloomington, Illinois)
The attitude prevalent in Danville reminds me of the story of the Israelites wanderings in the desert. Exodus recounts a scouting mission when 12 men went to gather information about the promised land. Two young men said "we can do this"; while 10 older, experienced men said, we will surely die. Repeatedly the Israelites (people of Danville) said things were so much better back then. "Why can't we go back," they ask? Their doubts and desire for the old days kept them wandering for forty years until that generation died out. The young people restored the nation and took over the promised land. Does our community have to wait on us to die and the young people to take control to reverse the trend? A group of young men were introduced to a positive influence who convinced them it was possible to create new glory days. He didn't just say, "back when Danville was great"; but, "Let's make DHS football great again."
Here is a brief clip from an Article in the Commercial News the morning after the Vikings won the conference title in 2009. It shows the character these young men have developed. "Luke said that’s because this group of Vikings are just good ol’ fashion football players. 'The kids played football. It was bad night, crummy weather, bad things happen against us, but the kids kept playing football until they won the game... the kids didn’t care. They just went out and played football,’ ... Our kids stood up to adversity and they did a heck of a job. 'Our kids got punched in the mouth by Normal, a great program, and they responded by standing up to it and getting it done.'’’
I spoke with a local amateur historian who told me of previous periods in our community's history in which there was major upheaval. In the previous episodes, the community rallied to restore Danville to it's best. When the brick industry died, mining replaced it. When mining died, heavy industry was introduced. Now those days are gone. It is time we look for the new source of jobs. I look forward to the city learning the same lessons that DHS football has learned.
It's time to get back to the business of making our city what it can be. It is time we quit being conformed to the thinking that says Danville is dying. It is time our minds are transformed, much as the young football players were, into believing we can make a difference and that we can usher in a new era, a new set of glory days. I hope we learn what these young men have. We can make the future brighter by standing up to adversity and getting on with business. Thanks Vikings for a lesson well taught. I hope we're up to it!
Thursday, December 16, 2010
Tis the Season
Well, the days are getting shorter. The snow is on the ground and the temperatures are falling. All are signs of the season. If we look a little closer we also see people scurrying back and forth to the accountant, H&R Block doing lines of credit, and people thinking about how much they can charge in December and pay-off with tax refunds in January and February.
Yup, tis the season! Tax Season...
2010 has seen a lot of change on the tax front. It is a great time to start looking at what you will need for your tax return, what credits might be available to you and what changes to start planning for. Over the next 3 weeks or so, I will be out lining several things related to home sales and taxes.
Look for info on the home buyers tax credit for those of you who purchased a home early this year. I will also be sharing info about tax consequences for foreclosures and short sales. This subject will will be helpful to home owners and investors. Energy and improvement credits, tax deductions and potential consequences of the health care program will be other aspects we'll try to touch on.
I hope this series will be informative and beneficial. Please be sure to address specific questions about your situation with your tax professional.
Yup, tis the season! Tax Season...
2010 has seen a lot of change on the tax front. It is a great time to start looking at what you will need for your tax return, what credits might be available to you and what changes to start planning for. Over the next 3 weeks or so, I will be out lining several things related to home sales and taxes.
Look for info on the home buyers tax credit for those of you who purchased a home early this year. I will also be sharing info about tax consequences for foreclosures and short sales. This subject will will be helpful to home owners and investors. Energy and improvement credits, tax deductions and potential consequences of the health care program will be other aspects we'll try to touch on.
I hope this series will be informative and beneficial. Please be sure to address specific questions about your situation with your tax professional.
Thursday, April 8, 2010
NATIONAL OPEN HOUSE DAY
Join us for the NAR's annual kick off to the spring selling season. April 10 & 11 we will be participating with our friends and colleagues in National Open House Days. Please be sure to register to register for a chance to win a $100 gift card from Danville Gardens.
This should prove to be an exciting month as we see more listings hit the market every day. We also have the Buyers Tax Credit quickly drawing to a close. While I suspect our legislators will use an extension to buy votes as they stand for re-election this fall, there is officially nothing going on. So, if you plan to buy soon, try to get a home under contract by April 30th to take advantage of the 10% refundable tax credit. Oh, and there is no need to wait for next income tax season to get your money. The credit allows you to amend your 2009 taxes and get cash back for needed repairs before the summer is over.
Good luck and good buying.
This should prove to be an exciting month as we see more listings hit the market every day. We also have the Buyers Tax Credit quickly drawing to a close. While I suspect our legislators will use an extension to buy votes as they stand for re-election this fall, there is officially nothing going on. So, if you plan to buy soon, try to get a home under contract by April 30th to take advantage of the 10% refundable tax credit. Oh, and there is no need to wait for next income tax season to get your money. The credit allows you to amend your 2009 taxes and get cash back for needed repairs before the summer is over.
Good luck and good buying.
Tuesday, September 8, 2009
HOME START
The State of Illinois has finally caught up with many of our neighbors. The Home Start Loan Program is now available through Illinois Housing Development Authority. Home Start features two different programs. While this is good news, there are no Vermilion County lenders appearing on the site's data base of participating institutions.
For our purposes we will be focusing only on the Tax Credit Advance Loan, today. You must first qualify for the 30 Year Fix Rate Loan. You may borrow 3.5% of the loan amount not to exceed $6000. This is an interest free loan if it is repaid by June 30, 2010. Failure to do so will lead to the loan becoming a 10 fixed rate loan. You will be required to attend a homebuyer education program. And finally, if you close on or before 11/30/2009, you will earn the First Time Home Buyer tax credit. So don't forget to file form 5405 with your taxes. For complete details please besure to read the plan overview provided by IHDA.
On a related note HR 2801 currently in committee is a promising piece of legislation. Hear are the high lights:
For our purposes we will be focusing only on the Tax Credit Advance Loan, today. You must first qualify for the 30 Year Fix Rate Loan. You may borrow 3.5% of the loan amount not to exceed $6000. This is an interest free loan if it is repaid by June 30, 2010. Failure to do so will lead to the loan becoming a 10 fixed rate loan. You will be required to attend a homebuyer education program. And finally, if you close on or before 11/30/2009, you will earn the First Time Home Buyer tax credit. So don't forget to file form 5405 with your taxes. For complete details please besure to read the plan overview provided by IHDA.
On a related note HR 2801 currently in committee is a promising piece of legislation. Hear are the high lights:
- Extend the eligibility for the tax credit to all who are purchasing their primary residence.
- Extending the purchase date through 12/31/2010.
- To take effect upon passage of the bill.
There are rumors the top rebate will go up from the $8000 offered in the current legislation. This is in Ways and Means at the moment. But I will keep tracking it and keep you posted.
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