May 31, 2008

Mileage Rates Rise

          The IRS has responded to the Taxpayers’ pain.  Business mileage rates will rise effective July 1, 2008 from 50.5 cents per mile to 58.5 cents per mile and medical and moving expense mileage rises to 27 cents from 19 cents per mile. IR 2008-82

Riding the Wave of America’s Silver Tsunami

          America’s “Silver Tsunami” began quietly this year with the first members of the baby boom generation turning 62 and starting to take their Social Security benefits.  I was reminded of this when I received a “Birthday Card” for President Bush who along with former President Clinton turned 62 this year.
          This is just the beginning of the problem.  Demographers predict Baby Boomers will live longer, need more money, rely less on Social Security and pay greater medical expenses than any other generation in history.
          New retirees will discover that investing during retirement can be even more challenging than investing for retirement.  As a result, questions abound:
                     · How many years can they expect to live?
                     · How much should they withdraw each month for expenses?
                     · How great an investment return do they need to make?
                     · How might future tax rates and inflation affect their savings?

          If they estimate incorrectly, retirees could run out of money too soon or compromise their lifestyles needlessly by being too conservative. American Funds Investor Spring/Summer 2008
          We feel that as both Certified Public Accountants and Investment Professionals we are uniquely qualified to help you navigate the shoals of retirement.

Have You Been to Jersey City Lately?

          I remember when it was all piers and warehouses.  Wow, was I surprised!  Tall glass highrises going up everywhere and it seems like more construction cranes than in all Manhattan.  Just a subway ride away.  With 65,000 residential units planned it looks to become another Manhattan Midtown complete with its own residential Murray Hill.

ROTH IRAs for Grandchildren

                If your child or grandchild will be toiling at a summer job, making a ROTH IRA payin for him or her this year is a great idea.  The limit is $5,000, but not more than the child’s earnings.  That sum counts toward the $12,000 annual gift exclusion.
               The ROTH can grow into a tidy sum for the child.  A 16 year old with $5,000 in a ROTH IRA that earns 7% each year will have $137,000 at age 65.
                ROTHs are tax favored too.  All payouts after age 59 ½ are tax free.  The Kiplinger Tax Letter 5/30/08

1099 Alert

          If you give a W-2 and a 1099 to the same worker in one year you will get extra scrutiny from the IRS during payroll tax examinations.  That is a red flag, signaling possible misclassification of employees as contractors.  The Kiplinger Tax Letter 5/30/08

Wii

          I find it amazing that a child’s video sports game has become the newest weapon in the arsenal to help seniors stay fit and engaged.  Washington Post 5/31/08 B.1
 
         If you have any questions about the foregoing or any other financial matters, please call us.  If you want to read more, visit the AOHL Newsletter Archives at www.lisch.com

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