I don't talk about my professional interests here much, because I don't want to nerd anyone out. But there are several interesting things going on with the new tax bill and one exciting item for TN coming up in a few weeks.
2010 promises to be an exciting year, not because everyone will have died in 2009 to escape the death tax (which comes back in 2010 and was NOT addressed in this latest bill), but because people with incomes over $100K will be able to convert their regular IRAs to Roth IRAs and even spread the tax bill over two years. The current income limitation is ridiculously low and another penalty on the married who earn two incomes. If you do not already have a Roth IRA, go get yourself one and put as much as you can in it, up to $4K this year, and/or flip your regular IRA to a Roth as soon as you can afford the taxes on it. It's a great tax strategy to pass money to your future generations (if you have anything left over after raising them) tax free and without mandatory withdrawals, unlike other retirement accounts.
My biggest gripe with the new bill is they have raised the kiddie tax limit from age 14 to age 18. That means if you plan to invest money on behalf of your kids outside of their college savings accounts and they earn more than a certain amount, they have to pay taxes at the higher parent's rate. This is not their summer job wages, this is their mutual funds earnings, etc. Not that kids usually have that much saved, but this is usually the money from birthdays set aside for the purchase of a first car. Daniel is not going to have much, but I'll be darned if he is going to have to pay a higher tax rate just because he's not 18 yet. We have a few years so I hope this one gets changed.
And finally, if you're not asleep yet, Tennessee, with one of the highest sales tax rates in the US, is finally having a SALES TAX holiday from August 4-6th. It's about time. Only certain things are exempt, although I will not want to be in Walmart that weekend (or be the one figuring out their sales tax computation at the registers). Here is the
link with more info.
You may now go back to your regularly scheduled interests....