McCarter & Greenley, LLC

Are you, like the federal government, having more debt than you have income?  You are not alone.  The question is what to do about it?

The news seems to be telling us that the federal government does not have enough tax dollars to pay the costs of governmental operations and that it must borrow money to stay in business.  That sounds familiar.  But, do we have the added problem that when we go to the bank to borrow money to pay our bills, the bank says No.

As I understand it, the government has an “out” you and I do not have.  The government can obtain more money to pay its bills by increasing the debt-limit previously set by Congress.  Once that limit is increased the government can borrow more money and pay its bills.

President Obama and Congress are arguing about all of this with the President saying to Congress: Authorize an Increase in the Debt-Limit.  If you don’t, Social Security Checks and Veterans’ benefits could be delayed and government workers and vendors would not get paid and another economic crisis could be upon us.

Congress is saying to the President:  Before we authorize an increase in the Debt Ceiling government spending must be reduced.  Again, on the personal level, such approach sounds familiar.

The question then is: What government costs (and at the personal level what operating costs) can be reduced?  There are certain costs that are “musts” if the government and us, at the personal level, must incur just to keep going.

Of course, there is another way.  At the government level, increase taxes.  At the personal level, increase sale prices.

Which should it be, reduce expenses or increase sales?  If it is to be to reduce expenses, what expense reductions can the government, or those of us seeking to make enough to care for our family, put into effect?

I would be pleased to hear from anyone reading this commentary their answers to the questions raised herein.  My e-mail address is cmccarter@mccartergreenley.com. My post office address is Suite 2100, One Metropolitan Square Building, St. Louis, Missouri 63102-2751.  No phone calls please.

Do You know that if you operate a business in Missouri under a fictitious name, you must renew that fictitious name every five years with the Secretary of State? It’s true. And it does not matter whether you are operating just as a person or as a general partnership, a corporation, a Limited Liability Company, or other form of business organization.

This statutory requirement came into effect on August 28, 2004 and provided that the registration is only good for five years. So, unless you have renewed your registration, it has now expired and you need to renew such registration right a way.

If your company is out of date, call us and we will take the needed steps to re-establish your identity as a business organization here in Missouri.

Thought You’d Like to Know

As you may know from the public media, President Barack Obama and Select Members of Congress struck an agreement regarding various forms of taxation.  The recommendations of the group now go to Congress for consideration and possible enactment into law.  The Wall Street Journal reports that if Congress acts affirmatively and the President signs the bill Congress passes, most of the following tax laws will be in effect for the next two years.

Estate Tax:

1. The first $5,000,000 of property will be exempt from estate taxation.
2. The top estate tax rate will be 35% down from 55%.

Gift Tax:

Current Law remains in effect.  You can give up to $13,000 per donee using the “Annual Exclusion,” plus you have a “Lifetime Exemption” of up to $1,000,000.  Gifts of the “Annual Exclusion” amounts will not be subject to Estate Taxation at your passing.  Plus, increases in value of “Annual Exclusion” property will escape Estate Taxation.  On the other hand, gifts using the $1,000,000 Lifetime Exemption are subject to Estate Taxation at your passing, however, as with Annual Exclusion gifts, increases in value of Lifetime Exemption property will escape Estate Taxation at your passing.

Income Tax:

Employees’ share of Payroll Tax is reduced from 6.2% to 4.2%

Extension of credit for college students to offset tuition costs granted.

Some 22 million families are exempted from the Alternative Minimum tax.

Expansion of $1,000 Child-Tax Credit to more families.

Up to 100% expensing  of business investments, including plants and equipment will be possible.

There will be an extension of Credits for Research and Development.

For Unemployed Workers, there is an unemployment benefit package.

As you know, our office concentrates its practice in the fields of estate and gift tax planning and implementation, income tax law, business law, trust law, probate law, as well as other laws.

Once the above laws are enacted, we plan to hold several Free Seminars and there explain the new laws to those interested in knowing how to save taxes as they proceed with their daily lives.

We plan to invite only 16 to each seminar, so everyone attending can ask questions and learn how to plan their lives to take full advantage of all of the new laws.

These new laws come to us as hoped for remedies for the vestiges of the recession our country is experiencing.  We need to take full advantage of them and do our part, not only for our personal benefit, but also for the benefit of our Country.

We hope to see many of you at our Seminars.  They will fly under the banner of Legal Ease (Law Made Easy). And we will try to do just that and make our comments understandable and useful.

We will be in touch again soon.

Charles and Bev

By: Charles C. McCarter