Cla july 2010


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“CLA USA, Inc. is a financial services company with a safe and conservative approach to asset preservation philosophy. From IRA’s to surviving spouse needs...CLA USA focuses on the areas that concern you the most.”

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Cla july 2010

  1. 1. 2011 Tax Changes By Stephen Hill, Advanced Planning, CLA-USA, Inc. With less than half of 2010 still remaining, now is a good time to review all of the 2010 tax benefits that are set toexpire at the end of this year. Heres a list of the major federal tax changes that are scheduled to occur in January 1,2011: • Individual income tax rates go from: 2010 10% 15% 25% 28% 33% 35% 2011 15% 28% 31% 36% 39.6% • Child credit falls from $1,000 per child to $500 per child • Standard deduction increase: The standard de- duction should increase from $5,700 to $5,800 for single filers and from $11,400 to $11,600 for those married filing jointly • Capital gains tax rates would revert back to 10% and 20% (depending on AGI), while they are cur- rently at 5% and 15% • Dividends would once again be taxed at the ordi- nary income rates, while today they are currently taxed at 5% and 15% • Roth conversions will require ALL tax payments to be made in the following year (retracting the current 2 year payment availability) • Estate step up basis on qualified assets will revert back to a true step up, leaving behind the “graduating scale” of basis from 2010. Currently, the executor of the deceased’s estate may increase the income tax basis of the estate assets by up to $1.3 million in the aggregate. In addition, if the deceased is married, the executor may allo- cate an additional $3 million increase to the basis of assets that pass to the surviving spouse. • The individual lifetime gift-tax exemption remains unchanged at $1 million for 2010 and 2011. For 2010, the maximum federal gift tax rate has decreased to 35 percent. In 2011, the maximum federal gift tax rate will increase to 55 percent. • Estate tax is scheduled to be fully reinstated with exemptions going down to the previous levels of only $ 1 million dollars a top rate of 55%. So, how can you take advantage of current code during the last remaining months of 2010? If considering converting any IRAs into Roth IRAs in the next few years, take advantage of the lower tax brackets available in 2010. In addition, take advan- tage of the two year payout rule available for all conversions made in 2010. You can choose to recognize the additional income from the conversion either in full in 2010 at the presumed lower rates, or in 2011 and 2012 and break the addition into two equal parts to keep marginal brackets lower. Another benefit to converting is the reduction for some estate values. Individuals that are on the verge of estate tax obligations find this strategy useful to ultimately lower their estate taxes. This strategy only proves useful for estates that are margin- ally above expected limits.
  2. 2. Determine if any capital gains should be recognized before year-end to lock into the lower rate. Perform a “netreturn” analysis on dividend earning accounts to ensure their advantages still exist in 2011. Take advantage of current gifting strategies. No changes are expected to the current allowable annual gift exclu-sion of $13,000 per donor. Even in the most certain of times, individuals should consider reviewing their estate plans every year. In the cur-rently unpredictable estate-planning climate, individuals may want to take steps to review and adjust their estate plansto ensure that they are up-to-date with both their objectives and current law. If you have any questions regarding this article, please contact our offices to schedule an appointment with one of our agents. Our toll free number is 1-888-404-6848, Monday-Friday, 8:30am-5:00pm Central Time. ALMONDS CANTALOUPE MANGO APPLE CORN MUNG BEANS ASPARAGUS DATES ONION AVOCADO FIGS ORANGE BANANA GRAPES PARSLEY BARLEY GUAVA PEACHES BITTER MELON KIWI PEANUTS BLACK BEANS LEGUMES PEAR BRAN LEMON PRUNES CLA does not give legal, investment or tax advice. Only an attorney can provide legal advice. You should consult with your own attor- ney to discuss your specific estate planning needs. You should always consult with your tax professional on issues related to taxes.
  3. 3. │ ASCLA LUSA │ JULY 2010 │ 1-888-404-6848 CLA A USA │ JULY 2010 │ 1-888-404-6848 U C
  4. 4. Does your financial plan cover everything it needs to? By Stephen Hill, Advanced Planning, CLA-USA, Inc.Every financial plan starts with a serious look at what the future may hold for you. This year, approximately 9 mil-lion Americans over the age of 65 will need long-term care services. By 2020, that number will increase to 12 mil-lion Americans.These figures represent nearly 75% of all the people in that age range, yet only 37% of those people feel that theywill ever be in need of long term care. Contingency planning now for this can help to prepare for life’s uncertainevents in the future.It is difficult to predict how much or what type of care any one person might need. Service and support needs varyfrom one person to the next, and often change over time. CLA USA agents are available to explain the differentalternatives and how these options may be best planned for including:• What are your typical costs for this care and what might the costs be in the future?• What options will you have should you need care?• Is it prudent to use retirement assets to pay for these LTC costs?• What additional resources are available to you if you need help?Long-term care is a variety of services that help people with health or personal needs and activities of daily livingover a period of time. Long-term care does not mean a complete loss of independence or control over your life.The keys to owning your future are planning early and wisely, knowing your options, and taking action. It is aboutliving well.CLA USA can help you determine which plan is right for you to give you and your family the peace of mind thatyou deserve. If you have any questions regarding this article, please contact our offices to schedule an appointment with one of our agents. Our toll free number is 1-888-404-6848, Monday-Friday, 8:30am-5:00pm Central Time.Across Down1. Crew need 1. Big galoot4. Thwack 2. ___-bodied7. Assist, in a way 3. "Get ___!"9. Honey 4. Commanded10. Whip 5. Cousin of a bassoon11. Aroma 6. The "p" in m.p.g.12. Target of fungus 8. The sound made by beating a drum14. ___ de deux 9. Russian soup15. Skin lesion 13. "The Joy Luck Club" author19. Distinctive flair 15. Blockhead20. Drag 16. Aesops also-ran22. Small boat 17. Police action23. Radial, e.g. 18. Continental coin24. "___ to Billie Joe" 19. Tokyo, formerly25. Bucks mate 21. Attorney F. ___ Bailey
  5. 5. The Happiness Project Philosophers, psychologists and self-help gurus all have advice on how we can be happier—but what really works? JournalistGretchen Rubin decided to find out. She devoted a year to "test-driving" happiness strategies and gathered feedback from visitors toher popular website. She called her research "The Happiness Project." Different happiness strategies work for different people, but a few strategies stand out... Seek novelty and challenge even if you value consistency and comfort. I didn’t expect exploring new challenges to make mehappier—familiarity and comfort are very important to me—but I was wrong. Trying new things is one of the most effective pathsto happiness that I have encountered. The human brain is stimulated by surprise and discovery. Successfully coping with the unfamiliar can provide a high level ofhappiness. Repeating what we’ve done many times before can be comfortable, but comfortable is not the same as happy. Example: Launching and updating a daily blog havebrought me great happiness, though initially I fearedthat I lacked the necessary technical skills. Challenge yourself to do something that sounds in-teresting—even if it’s different from anything you’vedone before or it requires skills that you’re not sure youhave. Take a class... try a new hobby... learn a lan-guage... or visit a different town or museum everyweekend. Try doing whatever you enjoyed doing at age 10.The person we are in adulthood has more in commonwith the person we were at age 10 than we realize. Re-nowned psychiatrist Carl Jung started playing withbuilding blocks as an adult to recapture the enthusiasmhe had felt in his youth. If fishing made us happy whenwe were 10, odds are it will make us happy today... ifplaying the drums made us happy then, it probably stillwill. Example: I was given a blank book when I was a child and really enjoyed filling it with clippings, notes, cartoons, anything thatinterested me. So as part of my happiness project, I bought myself a scrapbook and started clipping items from magazines andnewspapers to paste into it. I was amazed by how much happiness I still could derive from this. Read memoirs of death and suffering. Paradoxically, sad books can increase our happiness. These books put our own problems in perspective and remind us how fortu- nate we are. Examples: I became happier with my own life when I read Gene O’Kelly’s Chasing Daylight, the former CEO’s memoir about learning that he had three months to live... Stan Mack’s Janet & Me, about the death of the author’s partner... and Joan Didion’s The Year of Magical Thinking, about the death of her husband. It’s not that I’m happy that other people have been unhappy. It’s just a way of appreci- ating everything that I do have. Declutter your home. A few minutes of cleaning can substantially improve one’s mood by giving us the sense that we have accomplished something positive. Cleaning also creates an impression of order that can contribute to serenity. And it helps remove a source of stress—conspicuous clutter is a visual reminder of a responsibility that we have neglected. Try a brief burst of cleaning the next time you feel overwhelmed or anxious even if you don’t think it will work for you. Even people who are not particularly fastidious discover that this boosts their mood. Examples: For me, cleaning out a drawer... organizing my medicine cabinet... or just making my bed in the morning provides a real boost to my happiness.
  6. 6. Be appreciative of people’s good traits rather than criti-cal of their bad ones... be thankful for what they do for you,and stop blaming them for what they don’t. Example: I stopped getting angry at my husband for forgetting to withdraw cash before we went out. Instead, I started taking it upon myself to make sure that we had the necessary cash. I also made a point to be more apprecia- tive of all the things that my husband does do, such as dealing with the car. Enjoy today even if there’s still work to do. Many of us assume it’s normal to live with limited happinessuntil some major milestone is reached—we earn that big pro-motion, have a family or retire. We tell ourselves, I’ll be happywhen I achieve my goals. Example: As a writer, I imag-ined how happy I would be whenthe book I was working on was fi-nally published. Unfortunately, people who pintheir happiness on a distant goal COACH JOHN WOODENusually spend most or all of theirlives less happy than they could be. John Robert Wooden (October 14, 1910 – June 4, 2010) was anOften they set ever more distant American basketball coach. He was a member of the Basketballgoals as the original targets ap- Hall of Fame as both a player (inducted in 1961) and as a coachproach... or they discover that the (inducted in 1973).goal that they thought would bring John Woodens UCLA teams scaled unmatched heights that nohappiness actually brings added stress. Some never reach their future organization in any sport is likely to approach. Undergoals at all. Woodens masterful guidance, the Bruins set all-time records in- I’m much happier now that I remind myself to be happy cluding four perfect 30-0 seasons, 88 consecutive victories, 38about making gradual progress toward my goals, even if the straight NCAA tournament victories, 20 PAC 10 Championships,goals themselves remain far in the distance. and ten national championships, including seven in a row. Woodens approach rested on the idea that basketball is a game Bottom Line/Personal interviewed Gretchen Rubin, an at- of threes: forward, guard, center; shoot, drive, pass; ball, you,torney and former Supreme Court clerk. Based in New York man; conditioning, skill, teamwork. Considered one of basket-City, Rubin is founder of The Happiness Project, a blog and balls finest teachers, his ability to instill these principles in hisnewsletter, and author of the best-selling book The Happiness players made Wooden a master of developing talent.Project (Harper), for which she personally tested happinessstrategies. Career Highlights:Reprinted with the permission of: • NCAA College Basketball Coach of the Year, 1964, 1967,Bottom Line Publications 1969, 1970, 1972, 1973Boardroom Inc. • The Sporting News Sportsman of the Year, 1970281 Tresser Blvd., 8th floor • Sports Illustrated Sportsman of the Year, 1973Stamford, CT 06901 • Compiled a 885-203 (.813) record during 40 years of Famous Quotes: Moving? Be sure to contact our offices at • “Be more concerned with your character than your reputation, because your character is what you really are, while your repu- 1-888-404-6848 and update your address tation is merely what others think you are.” & phone number so we may continue to • “If you dont have time to do it right, when will you have time provide you the excellent service you have to do it over?” come to expect. • “Failure is not fatal, but failure to change might be.”