Are You Ready to Fall Off the Fiscal Cliff? What You Need to Know if the Bush Tax Cuts Expire

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The times they are a changin’ for taxes in the United States if legislation doesn’t change things soon.  Most americans are unaware of their taxes will be reshaped by the impending “fiscal cliff.”

The phrase that is being tossed around in the media is “falling off the fiscal cliff” or “taxmageddon”, and both are fairly accurate as to the repercussions.

Understanding exactly what is going to happen if we fall of the fiscal cliff is critical to your personal finances for 2013, so we’re going to break down some of the big points for you.

Repercussions of Falling Off the Fiscal Cliff

This list is pretty terrifying unless you enjoy paying higher taxes.

Expiration of Payroll Tax Cut

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What are Real Estate Closing Costs Made Up Of

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Any time you buy or refinance a house there’s a litany of expenses that go with it.

There are many “hands” in the soup that is a real estate transaction, and each one of them demands some money to do what they do.

If you’ve ever wondered what those charges mean, here’s some inspiration…

What Real Estate Closing Costs are Made Up Of

Lender charges

Here’s a not so well-kept secret: mortgage “lenders” aren’t direct lenders, but middlemen who arrange mortgages then sell them to Fannie Mae, Freddie Mac, or Ginnie Mae.  In the process, there’s a fee for nearly everything they do.

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Sandy’s Impact and Election 2012 and Links

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New York City and the rest of the northeast took a big hit from Hurricane Sandy this week.

Millions are still without power, potable drinking water, or the ability to get to and from work.  It is a scary situation that will take several weeks to truly get over.

Edit: If you know someone impacted by Hurricane Sandy, they can apply online for FEMA assistance at http://www.disasterassistance.gov/ or by calling 1-800-621-3362.  If you’re on a smartphone you can check m.fema.gov  Help them out by passing on this info and help them communicate with the agency.

Meanwhile, the nation’s Presidential election happens on Tuesday.  Will New Yorkers get to vote?  Does it even matter on a national scale since New York tends to be a super-blue state?

Imagine not being able to get to work, cash a check, or buy groceries for two weeks.  Are you financially ready for a natural disaster?  Here are some articles to help you manage your money better:

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7 Ways Your Finances are Scarier Than Zombies

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Thanks to the Walking Dead zombies are more popular than ever this Halloween.

You might even say they’re cool.

But do you know what’s scarier than zombies?  Facing yet another Halloween with your financial demons!

Here are 7 Ways Your Finances are Scarier Than Zombies…Read on…IF YOU DARE!!!

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How the IRS Decides Whether You Have a Business or a Hobby

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As the end of the year approaches, and tax season rears its head, it’s important to start figuring out what deductions and credits you are eligible for.

Many consumers are excited to learn that they can take deductions for hobbies as well as for businesses.

However, what is allowed when it comes to these tax deductions depends a great deal on whether the IRS thinks you have a legitimate business, or whether what you are doing is really a hobby.

Tax Deductions: Business vs. Hobby

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11 Ways to Prepare Your Home for Winter, Conserve Energy, and Save Money

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The changing of seasons is the perfect time to check your home’s energy efficiency, especially when much of the country will be facing cold temperatures in a few months (except for those lucky few living in warmer climates).

As temperatures cool, now is the time to make some updates to your home to save energy and efficiency and avoid costly repairs.

Here are 11 ways to prepare your home for winter and conserve energy:

Clean the gutters

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Microsoft Launches Windows 8 and Slate Tablet and Links

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With one of the most radical changes in Microsoft’s history, the company launched a new tablet as well as a new version of Windows this week.

The software behemoth from Redmond, Washington is drastically altering the Windows operating system in hopes that you will use it on your PC, your tablet, wherever you are.  They’re also launching retail stores that look very similar to Apple stores to try and compete for the hearts and minds of consumers.

Initial reviews of Windows 8 have been positive, but I’m not yet convinced that having one operating system to rule them all is the best move.  I like my Windows desktop and wouldn’t enjoy a tile based interface.  (Little known fact: you can change everything to look like Windows 7 with the Start bar and everything.)

Plus the Slate tablets are competing in an arena that Apple practically invented and there are two versions of Windows 8: Windows 8 RT (for low power devices with huge battery life) and normal Windows 8 for tablets.

I think this is going to lead to a lot of confusion in the mind of consumers.

Thankfully you and I don’t have to worry about launching any historic products this week. Let’s focus on getting our personal finances straight:

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Would You Sell Yourself to Pay for College (or Anything Else)?

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During my freshman year in college, while visiting another college campus, I grabbed one of the school newspapers.  While looking through the pages, I noticed an ad, asking for women to allow their eggs to be harvested.

Women of average height, in good health, and possessing a good GPA were encouraged to basically sell their eggs.  Not only would the medical procedure be covered, but there was also a stipend involved.

The American Society for Reproductive Medicine points out that egg donors can receive between $5,000 and $10,000, depending on what is involved.

I was briefly tempted to participate.

I met the requirements listed in the ad.  I cut out the ad and took it back to my own school.  Then I did the research on what donating entails.  There are risks involved with becoming an egg donor, from health issues, to medical screening, to injections.

I decided that, between the scholarship and the student loans, not to mention the part-time job, I would be just fine.

But that experience has stuck with me, and I know that many others find that they can do reasonably well if they are willing to sell a little bit of themselves to help pay for college (and other things).

What Can You Sell of Yourself to Pay for College?

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Using a Roth IRA as an Emergency Fund – Pros and Cons

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Roth IRAs are by far my favorite type of investment holding account available.

I love the idea of setting aside $5,000 in after-tax money in order to never pay taxes on the amount ever again.

There are other perks to using a Roth IRA besides never paying income tax on your nest egg.  One of the most prominent: you can withdraw your contributions at any time, even before retirement.  (This isn’t recommended, of course, but it is possible.)  You won’t pay any penalty or taxes for withdrawing your contributions under normal situations.  You will pay tax and penalties if you withdraw your investment earnings, so never do this.

This unique withdrawal capability has some people counting on their Roth IRAs as an emergency fund.

But is this a wise choice or a fool’s gamble?

Should I Use My Roth IRA as an Emergency Fund?

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Is the Curtain Finally Coming Down on the Payroll Tax Cut?

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In what seems like an annual rite in Washington, DC, the extension of the social security payroll tax cut—a.k.a., the “payroll tax cut”—is once again up for debate.

The cut was first implemented in 2010 under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  It provided for a 2% reduction in the employee portion of the social security payroll tax, from 6.2% to 4.2%.

The cut was set to expire at the end of 2011, but was extended to the end of February, 2012, and then ultimately through the end of the year.

But this year it’s looking like an another extension of the cut may not happen.

No political consensus to extend the payroll tax cut

With the presidential election and the prospect of a lame duck Congress looming there is little debate on the Payroll Tax Cut extension.  Concern is also centering on the still large federal budget deficits which will be partially reduced through the expiration of the payroll tax cut.  If anyone has serious intentions of extending the cut they’re laying low right now.

Very low.

If things stay as they are on January 1st, 2013 the Payroll Tax Cut will expire.

Why the payroll tax cut is a true middle class tax cut

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