LWA NEWS

Diahann was featured in the November issue of Entrepreneur Magazine as an entrepreneur making use of technology while traveling titled “Packing Light.”

Jodi Cirignano, CFP®, sat for the CPA Exam in November after an intense study and preparation period. 

Diahann was profiled in Florida State University’s Annual Business School Magazine.   She was also listed in Who’s Who in NJ Business.

Congratulations to Zuzana and her husband Michael.  They just closed on a new home.  We know they are very excited about the move. 

The spring issue of the New Jersey Society of CPA’s Magazine ran an article titled “Financial Planning Across Generations” authored by Diahann with much help from Jodi and Clare.

Diahann appeared 12/16/02 via satellite link from Florida on CNBC’s the “Closing Bell” show with hosts Maria Bartiroma and Tyler Mathison talking about year-end tax planning moves.  Diahann is scheduled to appear on CNBC’s “Make Your Money Work” segment of Power Lunch on March 10^th and May 12^th.  We hope you tune in!

LWA had our Annual Meeting on December 10^th.   This is our opportunity to review the results for the year and to recognize employees who have contributed to our successes.

Tax Cuts and You – What You Should Know

by Diahann W. Lassus, CFP®, CPA

There is a lot of discussion going on about the President’s proposed tax package and about the Democrat’s counter proposals.  Much of the discussion is about economics and the stock market.  What is the bottom line and what does it mean to you?

Here are some of the key areas and our take on what could be passed and how it might affect you.

·        Dividend tax cut. Currently dividends are taxed as corporate profits and then taxed again when they are received by individuals.  This proposal could be as much as an elimination of all dividend income being taxed at the individual level or possibly a percentage being taxed.  This could be a positive for many folks who are living on invested assets and generating high dividend income.  It could assist in reducing adjusted gross income and therefore, reduce the amount of Social Security that is taxed.  For others it may have no impact.

There are many ways this could impact investments.  The first is that the market value of dividend-paying investments may appreciate.  Another is that it may indirectly affect municipal bonds.  Bond issuers may have to raise the coupon rates in order to maintain their competitive status.  There are still many questions concerning how mutual fund dividends will be handled, but we will keep you posted.

·        Increasing losses that can be deducted from ordinary income.  Possible increase from $3,000 to as high as $8,250.  This would enable investors to use accumulated capital losses to shelter more ordinary income and gain a much higher and quicker benefit.

·        Accelerate income tax rate reductions for all brackets from 2004 and possibly even 2006.  This will affect all tax payers at some level.  Here’s the current structured reductions that could be pulled into 2003.  The 2004 rate reductions have a good chance of being pulled forward and 2006 could possibly be pulled forward.

      2003          2004-05           2006-10

      38.6%        37.6%               35%

      35              34                     33

      30              29                     28

      27              26                     25

·         Decrease marriage penalty tax more quickly.  Current law phases in on a graduated schedule and eliminates the penalty tax by 2009.  Married couples have continued to pay more in taxes than they would as single individuals.  This type of relief could have a positive impact on many people but the dollars would still be relatively small.

·        Extend unemployment benefits which lapsed last month when congress failed to approve an extension.   This will assist people who have been unsuccessful in finding new jobs. 

·        Bring forward the $400 increase in the child tax credit scheduled for 2010.  Rebate checks would be issued in 2003.

·        Tax incentives to prompt more spending by businesses.     This involves letting small firms expense the cost of more assets instead of forcing them to depreciate them over long periods of time.  The proposed plan is to triple the amount to $75,000.  This could have an impact on small businesses that have held off purchasing new equipment and systems.  The intent is to speed up the capital spending process.

Is there something different that we need to do as investors based on these potential changes? There may be eventually, but not yet.  There may be many changes to the proposals before they are finally approved.

This is the time to review the changes to estimate the impact they may have on your finances.  Spend some time thinking about whether the impact is significant enough for you to consider changes to your overall financial plan.  The odds are they won’t warrant any change.

There is also the risk that states will increase taxes to deal with their deficit problems and reduce the benefits of any federal tax cuts.

ENJOY THE WINTER…  STAY WARM, STAY SAFE AND KEEP IN TOUCH.  YOU ARE WHY WE ARE HERE AND WE REALLY DO LOVE TO HEAR FROM YOU! J

back