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Ok, so why is the fall the best time for Tax Planning? 

                Many (read as Most) of the clients I have (yes, that means you!) wait until they see their Tax Pro before they even consider tax planning.  This is not the best time for most.  I feel really bad when a client sits before me with a tax problem that I could have helped in advance if only they had seen me first.  Let me give you an example: 

A few years ago, a couple informed me that they were considering taking money out of their pension (401k) to finance the down payment on a house.  I asked them a few easy, but very important questions, and then advised them to first roll the money ($10,000) into a Traditional IRA.  They could then withdraw the money at a savings of $1,000.00. This is because money used for a first home, up to $10,000, is penalty free when taken from an IRA, but NOT a 401K.  These particular clients were very pleased with me the next time they sat with me, especially because another couple had just learned of the 41,000 penalty they had to pay for doing the same thing, but from their 401k.

There is no guarantee that I am going to save you money because you speak to me in advance.  But I am able to declare with 100% accuracy that if you don’t talk to your tax advisor before making large money moves, I won’t save you anything.

I recently returned from a beautiful New Hampshire vacation with Annette and my triplets John, Kevin and Amy.  We spent some time at Story Land, Mount Washington and Santa’s Village.  All great places to take young children.  Unfortunately, when we were gone, Connecticut legislature passed a budget that  is going to be a fiscal disaster.  Sure, they balanced spending with Tax increases so that there is no deficit, but when are politicians going to learn to cut costs.  When I start running out of money, I spend less, not tell my boss that she has to pay me more.  But this is just what they did.  They are spending money they do not have, then telling their bosses, the tax payers of Connecticut to pay them more.  I think we should enact some realistic term limits and restrict lobbying so that we can have legislators be free to make the hard decisions without owing any one (or being owned by anyone) and without worrying about being re-elected. 

If you want a copy of a short power point presentation I am preparing to describe the Connecticut Tax Changes, Please email me at ana@maggiemayer.com">Dana@maggiemayer.com and I will be glad to send it on. 

That’s all for today.  Thanks for reading my rants!

Dana, the Tax Geek

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