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2008 Year-end Tax Planning - before it is too late
Year-end tax planning has taken on a news sense of urgency for many
people. The downturn in the economy has everyone asking what they
can do to recover from setbacks such as job and investment losses,
regroup and rebound. Tax planning is always fluid and it is even
more so in this time of economic uncertainty. Fortunately, there are
some strategies that can give you peace of mind and confidence. At
the same time, it’s important to keep in mind that 2009 is likely to
bring even more changes with a new Administration and Congress in
Stock losses. Many people have taken huge hits in their investment and retirement portfolios from the crisis in the financial markets. Not only have many stocks declined in value in recent months; others have become worthless.
Retirement savings. According to the Congressional Budget Office, nearly $2 trillion in retirement savings has been lost in the last 15 fifteen months. In response, Congress may – before the end of 2008 – temporarily suspend the required minimum distribution (RMD) rules for IRAs and qualified retirement plans.
Mortgage meltdown.
The collapse of the housing market has brought about higher
default rates on subprime, adjustable rate and other mortgage loans
made to higher-risk borrowers.
At the same time, financial institutions holding
mortgage-backed assets are saddled with trillions of dollars in bad
debt.
Employment. Year-end is the most common time of the year for employers to announce layoffs and job cuts. If you’re uncertain about the future of your employment, you may want to liquidate some assets to have more cash on hand. You may also be able to borrow from a life insurance policy.
We’ve covered a lot of information. Please contact our office by e-mail with any additional questions - Happy Holidays