The Dolans share tax strategies to keep you from over-paying Uncle Sam.
Tags:the truth about your taxes,Credit cards,credit smarts,debt management,dolans.com,estate planning,insurance,invest wisely
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Ken: I've been hearing about a lot of people are going to pay less taxes, I think that’s great.
Daria: Pay attention to me for a minute here. Walter Mondale when he was running for president came claiming with the American people saying when I'm president your taxes are going to go up. He carries this home estate in the District of Columbia.
So Bill Clinton run on no tax relief for the middle class that promise was broken. As soon as he got on office and everybody got hit with higher taxes. So you tell me. And then we were working on having not a deficit.
Ken: Will you stick to the title here? This is the truth of all taxes, a little history lesson.
Daria: And then we didn’t have a deficit, we actually have a surplus and he raised taxes on us. Well now not only do we have a deficit but we’re adding to it every time Hank Paulson gets to sneeze.
Ken: Hold on you're young you may not remember this. Do you remember when billions use to be a lot? Here’s a truth about taxes, taxes are going up no matter who is elected. It’s hard to think about taxes when we’re talking about trillions. 750 billion bail off to go, it’s going to be at least a piece if not more than that. So our point here, we’re going to give you a few tax tips that will glaze over here because now and the end of the year maybe—not maybe, there are some things you can do to save some bucks.
Daria: But I will say this with the caveat, since I cannot probably guarantee you although I won't stick myself that for out on a limb that you're going to have higher taxes to pay next year. You may not want to take some of these deductions in this calendar year when you know what you’ve got and know it is what it is. You may want to save some of the stuff for next year when it’s going to mean a whole lot more to you.
Ken: No matter what we tell you here because we’re talking general tax, you should always talk with your tax adviser before you make any tax moves. And you don’t make investments just because of tax it’s part of it. But you may want to take a look at some corporate bonds or some unibonds, some tax free money market accounts.
Daria: Not corporate bonds because they're fully taxable but look at the longer treasuries because they're at least free from state and local taxes.
Ken: But you also may want to look at something called tips and we’ll put you a whole video one of these days on tips with treasury inflation protected securities and it basically says it’s good basically for long term investors. The value increases as inflation worsens. Will inflation worsen? Well people say it will but clearly when you're investing in those I don’t like the word betting but you're assuming that inflation will continue. There's no credit risk since the US government although you could lose money if we had deflation.
Daria: Can you promise me there's no credit risk with the US government? Isn’t that got us into this mess in the first place?
Ken: You should know what they are anyway; take a look at the 10 to 15 year tips treasury inflation protected securities.
Daria: In retirement accounts, in tax deferred accounts because you don’t get that interest on annual basis but they do tax you on it every year.
Ken: You can go to treasurydirect.gov to learn more. Give me some quick non-fancy ways that maybe by the end of the year if it makes sense to me I should consider.
Daria: Or if you think next year you could be unemployed wit the way the economy is going, prepay your properties in this calendar year. If you do estimate taxes prepay your estimated taxes in December rather than January 15. Max out your retirement contributions. Organize your financial records so you have some idea of what you're up against and what could possibly happen.
If you got big medical bills pending and you can afford to do it do the procedure now.
Ken: Deductible over 7.5% of your drafted gross income. And if you send in the beginning you may want to consider prepaying if in fact you're MIDUS fail you. A lot of are prepaying in January tax. You could pay this year too.
Daria: Not everybody pays in January.
Ken: But you may want to look at it. Clearly there's a lot of stuff you could do, all what we’re trying to do with this video to our friends and family members at douglins.com is to tell you taxes are not going down, don’t bury your head in the sand find somebody that you can trust tax wise if you can't do it all yourself because the Tax Code is 18,500 pages long. You need help. If you didn’t need help before you need help now. Never pay a penny more than you should in taxes.
Daria: But always pay what you owe.
Ken: Higher taxes are coming.
Daria: One more quick thing. I think in this economic crisis is the tax payer’s revenge even though we’re going to end up taking it next year, but the fact of the matter is they created this mess in DC that’s why we’ve all lost money in the stock money, that’s why people are having problems with their banks and everything else, we are all worth less than we were at the beginning of the year. Air go fewer tax dollars congress at least for 2008 take that.