Newsletter

Making Work Pay Credit is Set to Expire

Taxes could go up for millions of Americans in 2011 if Congress does not extend the Making Work Pay tax credit. Created as part of the stimulus package in 2009, the tax credit boosted paychecks for single filers by about $400 per year and up to $800 per year for households.The tax credit was designed to benefit the middle class, with those making less than $75,000 receiving the full credit and higher earners receiving only partial credit.

The tax credit may be allowed to expire because of its $60 billion annual cost. While President Obama's fiscal 2011 budget includes a one-year extension for the tax credit, to date Congress has shown no sign of taking action to extend the Making Work Pay tax credit.

What do you need to know?

Your paychecks will automatically be slightly lower in 2011 as the federal tax withholding tables are adjusted to account for the elimination of this tax credit.

Are You Too Invested in Your Employer?

Like many employees, you may have the option of purchasing stock in your company through your 401(k) or other investment program. While believing in the company you work for is a good thing, having two of your top financial assets--your job and your investments--tied to the success of one business can be a risky financial gamble.

Many employees at Enron and WorldCom learned this lesson the hard way when they lost both their jobs and their life savings as their company's stock plummeted. Your company may also place restrictions on your ability to buy or sell stock, particularly if you acquired the stock through the company's 401(k) matching program.

So what should you do?

Set a goal for the amount of company stock you wish to own.This can be a percent of your portfolio (like no more than 10%) or as a factor of your annual income (one to three times your annual pay).

Experts generally recommend that you keep the value of any one company's shares below 10% of your total investment portfolio, although there can be exceptions.

Take advantage of employee stock purchase plans wherever possible.These plans often provide an opportunity to purchase shares at a beneficial rate or through share builder programs.If you are at your company ownership target amount, then sell the excess shares after you acquire them.

Diversify your retirement plans. If you currently purchase stock automatically through your 401(k), check to see whether you can redirect the money to other investment options. If the company retirement plan provides limited investment options, consider developing a supplemental plan somewhere else.

Remember, while loyalty to your company is important, protecting your retirement must also be one of your top priorities.

Is Your Favorite Charity at Risk?

Online Accounts After Death

What happens to your online accounts after you or a loved one dies? Your online presence lives on after death and may include emails, photos, social networking, and online financial accounts.The best protection is to keep a hard copy document listing your online accounts and passwords in a safety deposit box with your other important life documents. However, what happens if you or a loved one dies without having taken this precaution?
	Email: Both Hotmail and Gmail will send a CDto you with all of the deceased person's emails upon receiving a death certificate and proof of power of attorney. In addition, Gmail requires a copy of an email that the deceased sent to the petitioner granting this transfer authority. In contrast, Yahoo! has a strict privacy policy and will permanently delete the account on receipt of a death certificate without allowing access to anyone.
	Photos: Photo sharing websites like Flickr will generally keep the account up and the photos available for viewing, but any photos that had been marked private will not be accessible.
	Social Networking: MySpace does not allow family members to "inherit" a deceased user's page. Facebook, however, will follow the family's wishes to either take down or keep up the deceased's profile. Family members may also choose to keep the profile up in a "memorial state" which removes features like status updates and only allows confirmed friends to view or post messages to the deceased's wall.
	Financial Accounts: Policies vary by institution, but there are now several companies that help you manage your online passwords. Sites like Legacy Locker, Entrustet, and DataInherit help users manage their online passwords and set up "digital executors" to manage your digital assets after death.