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GCFLASH
Hot Off the Press!
Tuesday, February 12, 2008 - Edition #441
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Weekly Spotlight
GCF Bank is proud to be a sponsor of the Gloucester County Cares About Hunger 2008 Food Drive. Donate a non-perishable food item at any of our branches between February 11 and 15. Learn more.
Correction
Last week's GCFlash erroneously reported the block on international usage of our VISA ATM/Debit card to be effective immediately. In fact, the block will be in effect after March 1, 2008. Watch for further details in future issues of GCFlash, on our Web site and accompanying your account statements. We apologize for any confusion this may have caused.
1st Flash:
'TIS THE TAX SEASON
It's hard to miss the fact that tax season is in full swing. A mailbox stuffed with W-2s, 1099s, 1098s and array of other official forms is a dead giveaway. According to the Tax Foundation, Americans worked 120 days in 2007 simply to pay for taxes. Food, clothing and housing combined took only 105 days. Before you file, know the changes in this year's tax laws that might help you keep a bit more of your hard earned money. Foreclosure was only one result of this year's housing crisis. Some homeowners were able to rewrite a loan where the principal was less, with the lender writing off the excess. Others had their home foreclosed on and sold by the lender for less than the original principal in full satisfaction of the debt. In both cases, the debt forgiveness amount was considered taxable income. But under the Mortgage Debt Forgiveness Act of 2007, some homeowners won't have to pay taxes on that amount. The law allows for debt forgiveness up to $2 million, $1 million for a married person filing separately. It only applies to mortgage debt discharged by a lender in 2007, 2008 or 2009. And the loan must have secured the debtor's primary residence, not a second or vacation home. Debt forgiveness on additional properties is still considered taxable income. Private Mortgage Insurance (PMI) is standard when the borrowed amount exceeds 80 percent of the home's value. PMI is a separate insurance that guarantees the balance to the lender should the homeowner default. For some loans taken out in 2007, 2008, 2009 or 2010, PMI payments may be deductible. To qualify for the deduction, your adjusted gross income (AGI) must be less than $100,000 or $50,000 if married filing separately. The deduction is reduced by 10 percent for every $1,000 AGI over the base amount, eliminating it totally for filers earning over $110,000. Lawmakers reached a temporary agreement to patch the alternative minimum tax (AMT). The tax system was not indexed for inflation, catching many middle-income families in its grasp. For 2007, the exemptions were raised to $66,250 for married taxpayers, $44,350 for single or head of household filers and $33,125 for married couples filing separately. In previous years, receipts for charitable contributions were only required for gifts of $250 or more. Not so as of 2007. Charitable gifts of any amount need documentation. A canceled check, credit card or bank statement, or a receipt printed on the charity's letterhead are acceptable forms of documentation. Don't send the receipts along with your return, but you must be able to provide them in case of an IRS audit or the deduction will not be allowed. If your donation was in the form of clothing or household items, they must be in good or better condition. Don't even consider unloading the junk sitting in your spare room for years as a donated item. Charitable giving by folks 70 1/2 and older was made a bit easier for 2007. Money could be transferred directly from their IRA, both traditional or Roth, to the charitable organization. This works for those of you required to take a minimum distribution since the donated amount isn't included in your taxable income. But if you choose this option, you're not eligible for the itemized deduction. It benefits most those taking the standard deduction. The Pension Protection Act of 2006 gives participants in a 401(k) whose employer went bankrupt in a prior year the option to contribute up to $7,000 to their IRA rather than the current limits. This is called the Enron IRA catch-up provision. The employer must have been indicted or convicted in connection with business transactions related to the company's bankruptcy, hence the nickname. To qualify, you must have been a participant in a 401(k) plan where the employer matched at least 50 percent of your contribution with company stock. You must have been a participant for six months before the employer filed for bankruptcy and the employer must have been a debtor in a bankruptcy case in an earlier year. But you can't contribute the extra $1,000 for the over-50 catch-up in this case. For more information, refer to IRS Publication 590. The Energy Tax Incentives Act of 2005 gives taxpayers a credit for energy-efficient home improvements. The Act expired in 2007, but any improvements made last year must be in combination with any made in 2006. The two-year total is only $500. Solar related credits will continue for 2008. Tax credits for fuel-efficient automobiles are phased out once a carmaker sells 60,000. Toyota reached that mark in 2007. Those who purchased a Toyota after October 1, 2007 are not eligible for this credit. Deductions for state sales tax, college tuition and fees and classroom expenses were extended through this year. Congress is expected to renew them when they expire. If you're deducting tuition and fees, you'll need to submit IRS Form 8917 along with your 1040 or 1040A. If you haven't gathered all your paperwork to begin filing yet, you had better get started. April 15th will be here before you know it! 2nd Flash:
VALENTINE'S DAY FACTS, MYTHS AND LEGENDS
Valentine's Day dates back to the Roman Empire. People paid homage to the god of fertility on February 14th, their Feast of Lupercalia. Young men held a lottery to decide which girl they would marry. At the time, it was thought to be the first day of mating season for birds. During Medieval times, girls ate unusual foods on Valentine's Day to dream of their future husbands. By the middle ages, young men and women drew names from a bowl to see who their valentines would be. They would wear these names on their sleeves for one week. Hence we use the term "wearing your heart on your sleeve" when we make it easy for other people to know how we're feeling. Cupid became associated with Valentine's Day because he was the son of Venus, the Roman god of love and beauty. He is believed to use magical arrows to inspire feelings of love. The quest for love has driven folks throughout the ages. Want to get lucky? Here are a few traditions handed down over time. We won't guarantee they work, but they sure are fun to read. For girls: Place a peeled onion under your pillow on St. Thomas' Eve (December 21) and say "Good St. Thomas do me right; bring my love to me this night." Throw a herring membrane against a wall. You'll find the small piece of fat underside the fish's backbone. If it sticks in an upright manner, so will your husband be. If it sticks crooked, you'll marry a crook. Don't sit at the corner of a table or you will never find a husband. Set out bread, cheese and ale on a clean white tablecloth and leave the front door open on Midsummer Eve (June 23). A lover will appear. Don't try this if you live in an area where homeless congregate where you might attract someone who isn't the marrying kind. For guys: For nine nights, make three notches in a gate that has five bars on it. You'll see your true love on the last night. Don't say "good night" three times at the end of a date. It's bad luck. For both: It's unlucky to write a love letter with red ink. If you court on a Friday, you'll never see the person again. Throw an apple peel over your left shoulder. It will fall in the shape of your lover's initial. Meet in advanced of a new moon to be "noosed" together in matrimony. Sunday's wooing draws to ruin. Grasp even cloves in your hand and think about a loved one. Burn the cloves. But not while they're still in your hand. Have a happy Valentine's Day! Financial News
Finally an economic stimulus plan is passed - one that will actually reach the majority of working Americans! The rebate is determined based on your 2007 tax return and will automatically be calculated and sent. The basic rebate is $600 per person or $1,200 per couple. An extra $300 would be given for each child that qualifies as a dependent. If a person earned at least $3,000 but not enough to pay income taxes, they will still get $300. Now, of course, these rebates are income limited. The "phase out" begins with earned income for people who earned $75,000 filing individually and $150,000 for couples who filed jointly. So a single person earning $87,000 will phase out (i.e. $600 minus 5% of the $12,000 over the $75,000 limit ($600),) and $174,000 for couples. Now is the time of year that people consider IRA's - individual retirement accounts. If you want to take the tax deduction, you would contribute to an IRA before April 15, 2008. A deductible IRA defers the tax on principle and earnings until you draw down on the IRA, ideally at retirement. However, you should consider the Roth IRA. The Roth IRA is tax-free as long as you do not draw down on the IRA for five years! Given the compounding of earnings, this can be a considerable sum. Consult your tax advisor for the investment that is appropriate for you. Today's National Market Rates
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In This Issue... 1st Flash: 'TIS THE TAX SEASON 2nd Flash: VALENTINE'S DAY FACTS, MYTHS AND LEGENDS Today's Market Rates On the World Wide Web Tip of the Week Financial News Past issues of GCFlash: February 5, 2008 Edition #440 January 29, 2008 Edition #439 January 22, 2008 Edition #438 January 15, 2008 Edition #437 Looking for articles from a past issue of GCFlash not listed above? Find them in our Knowledge Base!
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