What Will the Coming Tax Changes Mean To You?


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Like it or not, most of us have had financial change this year and we’re going to have even more things change in the coming few years. There is a lot of energy going into trying to predict where and when the next crash, or boom, will be. Trying to predict the future can drive you crazy. And that’s especially true if you want to be the one who is in charge of your own financial destiny.

Would you like to feel more in control? The questions you ask determine the answers you get. If you don’t like how you feel right now, change your question. Instead of “What will the coming changes mean to me?” or even worse, “How on earth can I ever hope to live, retire, save, survive, if _______ happens?” , change your question to, “What can I do to prepare so that I am ready no matter what?”

Being prepared means that NO MATTER WHERE the next boom is – real estate, stocks, business – you are ready to pounce on the opportunity, or know when to sit it out. Being prepared means that NO MATTER WHAT happens in the stock market in the next few days – you are safe. Being prepared means that NO MATTER WHO is making tax law changes – you are paying the least amount of tax legally possible. Being prepared doesn’t mean sitting in your basement with cans of food and ammunition. Instead, picture a world class tennis player. She’s gripping her racket with both hands, slightly bent at the waist, with both knees flexible and she’s bouncing on the balls of her feet. Her gaze is intently fixed on the other side of the net. She’s ready to take advantage of whatever comes, whenever it comes. That could be you. Your question really is:

Are You Prepared to Create Outrageous Amounts of Money and Freedom Over the Next Four Years?

There is going to be huge opportunity for you if you’re ready to think (and act) opposite of the regular mainstream. You’ll have to be flexible and nimble and so will your business and business structures. You will see a lot of change coming with the new administration. It’s never been more true that knowledge is power, as long as it’s the RIGHT KIND of knowledge. And as long as you’re prepared to take that knowledge and immediately put it to work for you.

Here are just a few of the things you’ll want to stay on top of:

• Barack Obama has called for greater financial sector oversight via creation of a financial market oversight commission to oversee liquidity, capital and disclosure requirements.

• He wants to streamline regulatory agencies to prevent overlap.

• He is looking for a greater role of SEC in preventing market manipulation.

NOTE: Bottomline, more government. The SEC is a huge powerhouse and sometimes just doesn’t make a lot of sense in their regulations. More power here could make it much tougher for entrepreneurial start-ups to raise capital. There’s an opportunity here.

• A ninety-day moratorium on home foreclosures and modification of bankruptcy laws.

NOTE: The mucking about Congress has done in the foreclosure process has created even more abandoned homes sitting around. Banks are not moving ahead with short sales because they don’t know what the next program is going to look like. Meanwhile, homeowners have just given up and moved on. There’s an opportunity here.

That’s just a few of the things that have been discussed. There is also the increase in capital gains tax, increased tax on dividends, no caps on Social Security tax (meaning a whole lot more payroll tax), loss of 401(k) deductibility, and increase to 39.6% for the federal income tax rate. Plus, don’t forget in 2010 we lose all the current estate tax laws and revert to a much more expensive program.

The talk is that this will only affect the rich. The problem is that “rich” keeps getting defined downward. Right now, if you’re making over $150,000 per year you are about to get thrown under the bus for huge tax increases. (Congratulations! You’re now rich!)

All of this is prediction. We don’t know what will happen and when it will happen. For you, the question is, “Are you prepared?” Here are five questions to check in with yourself on:

• Do you have a good source of current information that is reliable and most importantly, relevant? (In other words, whom do you trust for sound financial and tax information?)

• Do you have good advisors who tell YOU in advance when tax law changes and financial winds are shifting? (As opposed to constantly hunting them down to bring them up to speed so they can then advise you…and bill you.)

• Do you have a flexible business structure and asset protection plan that has been updated for 2009 changes?

• Can you look at a financial statement (your own or someone else’s) and know at a glance what the future challenges and opportunities will be?

• Are you prepared to CREATE and KEEP outrageous sums of money over the next few years? And, do it all with keeping and creating the maximum amount of freedom and happiness in your life?

We have an exciting time of change coming. Is it good news? Or is it bad news? It all depends on you. Prepare!

P.S. Do you want powerful answers to the five questions above? Please visit the First Class Lounge Forum at TaxLoopholes over the next week. I’ll be highlighting strategies you can use right now to be in the best possible position.



2 Comments

  1. Dear Dianne,

    I sold my house in California for short sale and lender forgiven the debt for almost $300,000. I heard that I may need to pay the State Tax as the extension was expired on 12/31/08.

    Would you please let me know whether Obama government is extending it or how can we know the most updated news or any other way to work with IRS to reduce the tax on the debt forgiven ?

    Thanks for your help,
    Ramana.

    • Hi Ramana, Sorry for the delay in response. I’m still getting the hanging of comments on this site!

      I think the Act you’re talking about is this one: http://www.irs.gov/individuals/article/0,,id=179414,00.html The forgiveness goes through 2012, for federal tax purposes. So, as far as federal income tax goes, you should be fine. (Take a look at the info, though, and make sure that you meet the qualifications)

      The problem is that California does not have a similar act. You may be subject to state income tax.

      Was this your principal residence?

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