Posts Tagged ‘taxes’

The Fiscal Cliff Deal…what it means to you.

Thursday, January 3rd, 2013

What a huge disappointment.
Not only did Obama and Congress NOT reduce spending and the deficit, they increased taxes and will continue to pile on the debt!  In all the media hyped “noise” and grand standing by politicians one important component was left out…the American peoples’ desire for fiscal responsibility. Here’s a rundown of what politicians enacted, when they had the opportunity to achieve some very positive things for the United States and its citizens:

•    Taxes on income, capital gains and dividends on high earners increased

•     A 3.8% surcharge (tax) from the Affordable Care Act

•    Every American who works will see their payroll taxes increase by about 2%
 (See the Tax Foundation’s Tax Policy Calculator)  Once you’ve filled out the information, there are three columns showing your 2012 tax liability, what you will pay in 2013 (provided President Obama signs the compromise bill), and what you would have paid if we had gone fully “over the cliff.” Nearly everyone will see a slight increase from 2012 to 2013 because of the expiration of the payroll tax holiday, but everyone will pay less than if Congress had done nothing. The Tax Foundation’s Tax Policy Calculator is available here.

•    5% increase in the Estate Tax to 40%


Originally, the Simpson-Bowles deficit reduction committee (also known as the Super Committee) had a target of reducing the federal government’s deficit by $4 trillion over 10 years. Instead, the new legislation will increase America’s federal deficit by $4 trillion over the next decade according the congressional budget office.

Is something backwards about this, or is it just me?

In any event, as my previous email stated after the November elections, Obama and Congress ran out of time and still have to deal with the mandatory spending cuts that were suppose to go into effect on 1.1.13 (that was pushed out 2 months), and agree on whether to raise the government’s debt ceiling (we top out at about $14.6 trillion and are due to hit that level in one to two months.) Obviously, since politicians are against fiscal prudence, the debt ceiling will have to be raised, and we will have to borrow even more money from foreign governments to finance our spending.
Here are three things you can do to protect your personal economy now and going forward:

1.)    Make sure you have confidence in your wealth advisor, tax advisor and estate planning advisor and communicate with them regularly.
(A good resource to use to check out a new advisor is )

2.)    Vote smarter – check your representatives’ voting records and what their visions are for how our country should run and what government’s  role should be.

3.)    Avoid the media “noise”.  Limit your exposure to over-dramatic headlines and lead stories.  Instead, focus on the facts and the fact that you (and your advisor) have taken all necessary measures to put you in the best possible position to ride out volatility and uncertainty. (See this Forbes article for 8 good tips to protect your finances).

As always, our investment models will focus on our clients’ risk tolerance, time horizon, quality and diversification. It’s amazing just how well the best run companies have done whatever is necessary to focus on their earnings, cash positions, management team, dividends, etc.  Rest assured that at Murray Financial Group, we always strive to provide authentic leadership and knowledge resulting in conservative wealth strategies.

This columnist makes a great point…

The United States has now acquired an electorally powerful liberal bourgeoisie who are convinced, as their European counterparts have been for several generations, in spite of all evidence to the contrary, that public spending is inherently virtuous, and that poverty can be cured by penalizing wealth creation. and that government intervention can engineer social ‘social fairness.’ but just when some of Europe’s political class has begun to appreciate the dangers of this philosophy-that taken to its logical conclusion, it leads to economic stagnation and social division-America seems to have decided that it is the quintessence of enlightened sophistication.”
                                                                                                                                                         -Columnist Janet Daley, writing in the London Telegraph, 11/10/12

How Would the Fiscal Clilff Affect Typical Families in Each State? This week on Your Financial Editor.

Thursday, December 6th, 2012

Dramatic changes to both tax and spending policy will take place at the end of this year unless Congress acts.  My guest this week is Nick Kasprak, Programmer & Analyst at the Tax Foundation.  Nick will explain what the tax changes will mean to the typical family.

Listen from anywhere by logging onto WFMD and clicking the listen live button – Saturday morning at 8:00 on AM 930 WFMD.

About this week’s guest:

Programmer & Analyst

Nick Kasprak is a programmer and analyst at the Tax Foundation. Nick focuses on building interactive, web-based tools to educate taxpayers. Before joining the Tax Foundation, he worked as a math teacher at the Loomis Chaffee school in Windsor, Connecticut and coached its debate team. Nick is a graduate of Bowdoin College and holds a B.A. in Physics and Astronomy.

Nick was the primary programmer for the interactive calculator at, which allows people to compare their federal income tax burden for 2011 under various policy scenarios.

Well the election has come and gone….and things are status quo.

Friday, November 9th, 2012

The impact on the economy (global) and financial markets (also global) will be more of the same: high unemployment & under-employment, high food and energy costs, volatile investment environments, American, Europe and Asian debt troubles, etc.  In addition to these existing conditions, elected officials will be forced to deal with the “Fiscal Cliff.”

If I may, I would like to break down exactly what the term means, so as you hear and read more about it, you will have a basic understanding of its real impact:

1.  Income tax cuts set to expire will cost $400 to $500 billion and include:

*  President George W. Bush’s tax cuts of 2003 which significantly lowered marginal tax rates.

*  The payroll tax rates are currently at 4.2 percent. If this expires, they will go to 6.2 percent.

*  Other tax cuts that will expire include the AMT patch, Affordable Care and Research tax credits.

2.  Spending cuts that would be initiated under the Budget Control Act would cost $100 to $150 billion:

*  One-half of this stems from automatic defense budget cuts.

*  The other one-half is in the non-defense sector.

3.  Government benefits that will expire would cost consumers $50 to $100 billion and include:

*  Extended unemployment benefits.

*  Medicare doc fix.

If Congress (which is status quo – Senate (D) and House (R)) takes no action, tax rates will increase, spending cuts will begin, and benefits will be suspended.  A “no-action” approach could lead to a $500 to $750 billion hit to our economy in 2013.

Regardless of the amount, it would be very difficult to absorb this hit as it would create a 3 to 5 percent hit to the gross domestic product (GDP) next year.  With Wall Street forecasting 2 percent GDP in 2013, falling off the cliff would send us into negative GDP growth territory and a recession.

So, you will be hearing much about the Fiscal Cliff now that the elections are over.  Unfortunately, politicians don’t have enough time to deal with these very serious problems before year end.  I expect to see an extension of the current policies so additional time and attention can be given to research options. (See the Tax Foundation’s “A Guide to the Fiscal Cliff and the Options for Congress” for further information.

At Murray Financial Group we always strive to provide authentic leadership and knowledge that results in conservative wealth strategies. Our mission remains clear, and we will continue to adjust and modify our clients’ investment models as appropriate for each client’s situation.

Now Money, Later Money, and Never Money…how do the three money types impact your life?

Friday, November 2nd, 2012

The way you relate to your money has a very real and tangible impact on your life, and the lives of your loved ones.  There are three “money types” that people tend to deal with:

1.) NOW Money – the money that is for your current and everyday needs.

2.) LATER Money – money that you save and invest for future income needs (child’s college tuition, retirement, vacation home, etc).

3.) NEVER Money – money that you don’t think you will ever have to touch.  In other words, money/assets that you would like to leave to children, grandchildren, charity, etc).

This post is going to focus primarily on your NEVER Money.  Never Money can take a variety of forms – stock portfolios, IRA’s that you and your spouse created and grew over the years, real estate investments, and many more.  Whatever it is, it is critical to take steps to ensure that it goes to the right person or organization, and in the right way.  Below are 10 common legacy/estate planning mistakes that people often make:

10 Common Estate Planning Mistakes

1. Procrastination.  Simply failing to get around to it.

2. Believing that estate planning is only for the wealthy.  When taking into account the people are often surprised at the size of their “estate.”

3. Not reviewing or updating your beneficiaries and will.  Life changing events such as births, deaths of family members, divorces, and changes in general in your family structure can have a significant impact on how your assets are distributed.

4. Not having a tax-planning strategy in place.  Current tax laws are complex and ever changing.  There are strategies available to help you minimize taxes and avoid estate tax penalties.  Sit down with your tax professional to implement advanced tax and estate planning strategies.

5. Take advantage of gifting.  The government allows tax-free annual gifting of $13,000 per individual or $26,000 per couple annually to as many individuals as you choose.  This is a means of giving away some of your estate tax free to family members.

6. Joint titling of assets.  It is true that joint titling of assets may allow you to avoid probate, but do not overlook the additional risks; misappropriation of assets by the joint title holder, exposing of assets to a divorcing spouse of the joint account holder, exposing assets to creditors of the joint account holder.

7. Failure to provide someone you trust with the location of important documents.  All of the work you have gone through in planning the distribution of your assets is worthless if nobody can find the documents.

8. Leaving everything to your spouse.  The government offers an estate tax credit (repealed for 2010) by leaving all of your assets to your spouse you are sacrificing their share of estate tax credit.

9. Doing it yourself.  Not seeking out expert advice.

10. Naming your estate as the beneficiary.  By directing your assets to be paid to your estate   “pursuant to the terms of your will” assets that would normally avoid probate-will become subject to probate which can be both time consuming and expensive.

As you can see, tax issues are mentioned in several of these 10 mistakes.  With a proper tax strategy, there are ways to leave money in a legacy that doesn’t include a huge tax bill for your heirs.  Life insurance is one option to consider when planning your legacy.  It is unique because it is designed to create a lump sum benefit when you pass away that is paid to your beneficiaries, and they don’t pay income tax on the benefit.  Properly designed and structured, it can be one of the most flexible and efficient financial tools you can use.

Ask these 6 questions before purchasing a term life insurance policy:

What are your income needs?
It’s important to consider your family’s income needs over the course of your policy, including expenses such as mortgages, college tuition, medical bills and funeral costs.

What length of term do you want?
The length of your term will depend on your long-term income outlook. For example, if you’re working for 10 more years and then have retirement benefits and Social Security, a 10-year term may work for you.

Can you convert the policy?
If you outlive your term life insurance policy, you may want to convert it near the end of the term without needing another medical exam. Be sure to read the fine print on the conversion option, as there can be time limitations for conversion.

What other benefits do you want?
Riders – such as disability waivers that pay your premiums if you become disabled – are more common on whole life insurance policies than on term life insurance policies. But they are available, so look into them.

How applicable are advertised rates?
Even if you’re relatively healthy for your age, the rates promoted in online or newspaper ads may be based on an applicant with exceptional health. The price quoted may not be applicable to you.

Is the insurance company stable?
Life insurance companies are usually in excellent financial health, but you should still check out their rating. Agencies that rate life insurance companies include A.M. Best Company, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s Ratings Services.

My last point relates to mistake #3 – not making sure beneficiary information is up-to-date.  A periodic beneficiary review  (video) is a critical tool to ensure that you leave the legacy that you want to the people you want to leave it to.

If you want to learn more about the three money types and how they impact your life, tune in to Your Financial Editor – this Saturday morning @ 8 on AM 930 WFMD.  Listen live


3 big myths are stopping entrepreneurs from restoring a successful U.S. economy? This week on Your Financial Editor.

Wednesday, September 5th, 2012

This week on the show, my guest and I will explore these three myths and how they are creating an ever increasingly hostile environment for small businesses:

  1. It is the government’s duty to provide for the general welfare…FALSE
  2. The growing gap between the rich and the poor proves that capitalism has failed…FALSE
  3. The government has the authority to redistribute wealth through regulations and taxes…FALSE

Don’t miss this myth-busting show – join me Saturday morning at 8 on AM 930 WFMD.

Listen from anywhere by logging onto WFMD and clicking the listen live button – Saturday morning at 8:00 on AM 930 WFMD.

About this week’s guest:

Robert Ringer is a New York Times #1 bestselling author and host of the highly acclaimed Liberty Education Interview Series, which features interviews with top political, economic, and social leaders on the most vital issues of the day.

Ringer has appeared on Fox News, Fox Business, The Tonight Show, Today, The Dennis Miller Show, and Good Morning America, among others, and has been the subject of feature articles in such major publications as Time, Fortune, and The Wall Street Journal.

The IRS is paying close attention.

Thursday, April 5th, 2012

Think tax evasion is a small problem? The Tax Justice Network released a report at the end of 2011 which showed that tax evasion amounts to $337.3 billion per year in the US. Yes, that’s billion with a “B”.

This was based on numbers from 1999 to 2006, and is probably even higher in recent years, as the weak economy may have led more people to hide money from the government. As an example, the average tax refund decreased by $100 in 2011 — perhaps people are reporting less income in order to keep more of their money.

Now, it’s hard for us wrap our heads around how much money that really is. Here’s a way to do so: Recently, Congress was unable to agree on a plan which would reduce the national deficit by $1 trillion over 10 years. Over that same time period, tax evasion will cost us well over $3.3 trillion.

Given my profession, perhaps it’s obvious that I’m a big proponent of everyone following the tax rules. When we don’t, it means that everyone else has to pick up the slack. And the consequences of all of this reporting about tax fraud is greater scrutiny on honest taxpayers, and higher tax rates.

The IRS is Catching More Tax Evaders

The “good” news is that the IRS is doing a better job of catching people who aren’t paying their fair share of taxes. Fraud investigations increased by 14% in 2010, while prosecution recommendations (cases that the IRS thinks should be brought to court) increased 18% and convictions increased by 4%.

Again, it’s possible that some of these increases are due to the economic situation of the past few years, but the fact that the IRS decreased its investigation time by nearly 40 days is a sign that the IRS is doing a better job.

Don’t Give In To The Pressure; Avoid Taxes — LEGALLY

Here’s what you should understand — the rise in tax evasion means that the IRS is continuing to increase its scrutiny on every return. But that doesn’t mean you have to give up the fight! There are innumerable LEGAL ways to avoid paying too much in taxes. And, unfortunately, software programs and fly-by-night tax shops don’t do a very good job of proactively seeking them out for you.

You can’t avoid death or taxes, but you can have control over how your assets are passed to your loved ones. This week on Your Financial Editor.

Friday, October 7th, 2011

My guest this week is Wall Street Journalpersonal-finance reporter Rachel Emma Silverman. We’ll walk you step-by-step through the process of good estate planning. Chock-full of clear and solid advice on how to get the most out of the main estate planning tools – including wills, trusts, life insurance, guardianship papers, and powers-of-attorney documents – Ms. Silverman’s book, Wall Street Journal Complete Estate-Planning Guidebook, will help make your estate-planning process as simple, smooth, and un-intimidating as possible.

Join me this Saturday morning at 8am on AM 930 WFMD, or listen from your pc by logging onto WFMD’s website and click the listen live button.

About this week’s guest:

Rachel Emma Silverman is an editor and reporter at the Wall Street Journal, where she has worked since 1998. She currently edits and co-writes The Juggle, the Wall Street Journal’s work-and-family website and reports on career, workplace and family issues. Before that, she covered personal finance, focusing on estate planning, wealth management, insurance, philanthropy, art and collectibles, and financial aspects of marriage and divorce. She graduated summa cum laude from Harvard University and was elected to Phi Beta Kappa. She now lives in Austin, TX with her husband and two young sons.

The “ins” and “outs” of Charitable Giving – this week on Your Financial Editor.

Friday, March 4th, 2011

 In today’s tough times of government budget cuts and scarce grant monies available, charitable giving becomes critical for many charitable organizations to survive.   Join Chris Murray this week on Your Financial Editor to learn about the different types of giving and the advantages and disadvantages to each.  Minimize your taxes and maximize your gift.

Join us this this Saturday morning at 8am on AM 930 WFMD, or listen from anywhere on your pc by logging onto and clicking the listen live button.

This week’s guest is Mike Delauter of Miles & Stockbridge P.C.  Mr.  Delauter is the managing principal of the Frederick office of Miles & Stockbridge P.C.

Mr. Delauter is a business and transactional lawyer concentrating primarily in the areas of commercial real estate transactions, commercial financing, general business transactions and estate planning and administration. In the area of general business and real estate transactions, Mr. Delauter represents area businesses by providing counsel in the formation of corporations, partnerships and limited liability companies, in the acquisition, sale and merger of businesses, and in the acquisition and leasing of commercial real estate. In the area of commercial financing, Mr. Delauter has represented area banking institutions in real estate-based and asset-based lending, with representative clients including regional and national banks. He also has over 15 years of experience as an estate planner and estate administrator, which includes the preparation and administration of wills and trusts and other estate planning and tax planning instruments.

Mr. Delauter joined Miles & Stockbridge in September of 1990 as a tax lawyer in the firm’s Baltimore office, and in 1993 transferred to the Frederick office where he engages in his current practice. With his tax background, Mr. Delauter teams with our experienced tax lawyers often in providing business and transactional tax planning and counsel. He has extensive experience in structuring forward and reverse tax-free exchanges. He is also a participant on the firm’s Life Sciences Team and BRAC Team.

Lower Taxes, Reduced Deficits, Job Creation…This Week on Your Financial Editor w/ Chris Murray

Friday, June 25th, 2010

Chris Murray, Your Financial Editor

Joining Chris this week on YFE will be Governor Gary Johnson, former Republican Governor of New Mexico and honorary chairman of the Our America Initiative to talk about his recently released “Three Point Plan for Economic Prosperity”.  Tune in this Saturday morning at 8am on AM 930 WFMD, or listen from your pc by logging onto and clicking the listen live button.

About this week’s guest:

Governor Gary Johnson, former Republican Governor of New Mexico and honorary chairman of the OUR America Initiative.  This national advocacy initiative allows Governor Johnson, a longtime advocate of responsible government spending and limited government intervention, the ability to travel across the country to engage the public in open dialogue regarding pertinent issues of the day, including: lowering taxes, reducing deficits, creating jobs, a strong national defense and protecting our civil liberties. 

Governor Johnson has garnered significant national press and media coverage since the launch of OUR America late last year, and recently released his “Three Point Plan for Economic Prosperity.” In addition, he has been a featured speaker at several high profile events in the past weeks, including the Southern Republican Leadership Conference (SRLC) in New Orleans. Governor Johnson has shared his message of limited government intervention and a return to common-sense governing with huge crowds at Tea Party events in California, Arizona and South Carolina.  Governor Johnson is also a longtime advocate of the legalization of marijuana, and has discussed the economic and crime reduction arguments for legalization on national media programs and websites.