Taxes

We have only 2 weeks left to the end of the year, my how time flies. This means that we are 4 months away until we have to pay our taxes on April 15th. Our government has given us ways to reduce our tax obligation if we act before December 31st, more on this in the middle section. The first section is from Vanguard. The last part is a link that tells the Christmas story in social network language, just copy and paste.


Vanguard

The U.S. economy is showing enough momentum to keep the Federal Reserve in wait-and-see mode, though risks from abroad continued this past week. Europe's drift back toward recession and signs of slowing in Asia remained potential stumbling blocks for the U.S. recovery. Meanwhile, the sovereign bond market's cool reaction to a plan to enforce fiscal discipline in Europe kept alive concern that nations could default—with uncertain repercussions for the fate of the Eurozone and the global economy. For the week ended December 16, the S&P 500 Index fell 2.8% to 1,220 (for a year-to-date total return—including price change plus dividends—of about -1.0%). The yield on the 10-year U.S. Treasury note fell 21 basis points to 1.86% (for a year-to-date decline of 144 basis points).


Common Ways to Reduce Your Taxes

Here are few actions for your consideration that can reduce your tax obligation:

1) Sell assets like stock that have gone down in value in a non-retirement account. It is important to avoid the wash sale rule if you repurchase it within 30 days so wait 31 days. A similar asset can be purchased during this 31 day period to keep a portfolio in balance.

2) Contribute to a traditional IRA or 401(k). A contribution to a traditional account is tax deductible while a contribution to a Roth IRA or Roth 401(k) is not tax deductible.

3) Make a donation to a charity. A church or charity can always use your support.

4) Make your January house payment in December to deduct the interest.

5) Contribute to your medical expense account if you have one, either a FSA or HSA.

I would be glad to review this you on an individual basis if you have a question.


A Social Network Christmas - You Tube Link

http://www.youtube.com/watch?v=sghwe4TYY18