Tuesday, February 22, 2011

Edition #599

Today's Highlights:

Weekly Spotlight:

GCF Bank proudly participates in the Gloucester County Cares About Hunger Food Donation Collection Drive. Drop off your non-perishable food items at any GCF branch by Thursday, February 24th. Click here for a list of preferred items.

Our Current Rates:

For a listing of our current deposit and loan rates, click here.

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1st Flash

You'll Miss These Breaks

The debates filled the headline news. Would the Bush-era tax rates and cuts be extended?

It became a political issue rather than one of economics.

In the end, the hotly debated provisions were extended. And like most bills presented to Congress, you only heard mention of those items deemed controversial, designed to sway public opinion one way or the other.

The details that impact Americans the most are slipped in under the radar.

Certain tax cuts were offered last year to help folks struggling with the bad economy. As we're finally recovering, several breaks have disappeared.

In 2009, those collecting unemployment compensation could exclude up to $2,400 of benefits from their income. This year, all unemployment payments are subject to taxation.

Those claiming the standard deduction rather than itemizing were able to add disaster losses and real estate taxes to that deduction. They were also permitted a credit if they were a government retiree as well as state, local or excise taxes paid on the purchase of a new vehicle.

These breaks are all gone for 2010 returns. The only exception is for vehicles bought after February 16, 2009 where the tax was not paid until 2010.

The first-time homebuyer's credit has been scaled back. For 2010, it's only available to people who signed a contract before May 1 and closed before October 1. Income limits and other conditions apply. Check with your tax advisor for full details.

This credit was first available on 2008 returns. But at the time, law stated that it had to be repaid over a 15-year period starting two years later. Those who claimed the credit in 2008 have to begin repaying with their 2010 return.

For 2009, the requirement for people over age 70-1/2 to take an annual minimum distribution from their retirement account was suspended to allow portfolios to recover from the tumbling stock market. This requirement was reinstated for 2010, but many seniors forgot to take it.

The price? A hefty 50 percent tax penalty.

If you have good reason for not taking the distribution, such as being hospitalized, take the money as soon as possible. Apply for a waiver of the penalty on IRS Form 5329 along with an explanation for the lapse. Ignorance of the law is not considered just cause.

Tax law changes allowed many people to convert their traditional IRA into a Roth IRA and pay the applicable taxes. If the conversion was made in 2010, taxpayers have the option of reporting the income on their 2010 return or split between 2011 and 2012.

Those who did convert can change their mind up to the due date of their return, even if it's extended to October. It's an option for those who find they can't pay their taxes.

Tax code was not signed into law until December 17, 2010, well after most related publications already went to press. Including official IRS versions. This will create much confusion for both taxpayers and the agency this year.

In fact, the IRS didn't even complete configurations in their computer system to process these changes until February 14th. They held all returns filed before that date until they could be properly processed.

If you bought a tax guide or downloaded forms earlier this year, check with the publisher's web site to learn of any changes that may not appear in the version you already have.

Tax law is always complicated. But never more so than for the 2010 filing year. When in doubt, contact a tax expert to help you wade through the fog. You'll be glad that you did.

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2nd Flash

Winter Driving Tips

If you are like me, you are looking forward to spring. Warm weather, sun, and most importantly - no snow or ice! The last couple of days, Mother Nature lulled me into a false sense of security. I was really hoping I had put away my snow shovel and ice scraper for the last time this winter. Alas, once again this morning I woke up to a blanket of white outside my window… and a pile of snow in front of my car that was left there by the "helpful" snowplow that came through my development. Oh, and in case you haven't heard, they are calling for snow again later this week.

Clearing the snow off your car, driveway, and sidewalk can present its own set of challenges. And then there is a whole new set of challenges for actually driving in the snow. Here are just a few tips to help keep you safe on the roads for what remains of the winter.

First, it really is important to take the time to thoroughly clean the snow and ice off your car before you set out. Trying to maneuver your car down the road while staring through the melon-sized space of glass you cleared on the front windshield is dangerous. It makes it hard to see other cars or objects in the area. In addition, the snow you left on the roof of the car can fly off and become a hazard to those driving behind or around your car.

Second, let's talk windshield washer fluid. If you know bad weather is coming, top off the fluid in your car and carry some extra in the trunk. Flying sand, salt, ice, and snow can leave you driving blind in some circumstances. Don't be caught without fluid! And while we're talking about it, make sure you have WINTER windshield washing fluid. The kind that has an additive that prevents it from freezing.

Now, let's talk tires. You should have your tires checked on a regular basis for wear and tear just as a matter of proper maintenance, but in the winter it is especially important. Proper tread depth can help with traction and grip on wet surfaces. In addition, be sure to have your tires, including the spare, inflated to the proper pressure for winter driving.

Some other important tips are:

• Be sure to leave plenty of room between you and other vehicles.
• Remember to accelerate slowly with your front wheels in a straight position.
• When turning, start moving slowly forward first, then begin your turn. Maintain a steady speed throughout the turn.
• Start breaking sooner than normal to avoid abrupt stops.
• Do not use your cruise control in wet or slippery conditions.

If you do have problems or run into trouble, there are some things you can do to help get you safely through the situation.

• If you start to slide while breaking and your car has antilock brakes (ABS), press firmly down on the brake pedal. Do not "pump" the brake on cars with ABS. When the ABS engages, you may feel the brake pedal pulsing and hear a grinding noise. This is normal. Just keep pressing firmly down on the pedal.
• If you start to slide while breaking and your car does NOT have antilock brakes, you may need to gently pump the brake pedal in order to keep the wheels from locking.
• If you get stuck in the snow, keep the wheels straight and rock the car forward and back by putting the car in drive and then switching to reverse. Stop and change direction as soon as the wheels start to spin. If you car has a second gear or winter mode, use it. Once you get going, don't stop until you reach clear pavement.
• If you are still stuck in the snow, you may need to dig a path in front of each tire or add sand, dirt, or rock salt in your tracks to help you gain traction. It's a good idea to keep some supplies in your trunk for just such an emergency. If you don't have any supplies with you, get creative. Use your floor mats (carpet side down) for traction and your hubcaps as a shovel.

These are just a few tips to help you drive safely this winter. However, the very best tip of all is to simply stay home if you can and wait for the roads to clear before you venture out. If you do have to go out, more tips are available on the Weather Channel's web site and the AAA web site.

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Financial News

The recent unrest in the Middle East and North Africa has caused uncertainty in the price of oil. The price of crude oil futures in the U.S. reached its highest level in 2½ years as Libyan oil exports started falling according to Dow Jones Newswires. The shutdown of one oil company cut Libya's output by 100,000 barrels a day, according to the Dow Jones Newswires. The Associated Press is reporting that several oil companies; including UK based BP, Italy's Eni, Royal Dutch Shell, and Germany's Wintershall, are evacuating employees from Libya.

Libya holds the most oil reserves in Africa. Exporting 1.2 million barrels a day, it is the world's 15th-largest crude exporter, according to the Energy Information Administration. Other countries like Saudi Arabia could quickly increase production to absorb any losses out of Libya. The futures markets are concerned that these political revolts will continue to spread in the Middle East and North Africa. Iran, ripe with potential unrest, is the second-largest producer of oil in OPEC. Other countries in the Middle East and North Africa experiencing political changes are Tunisia and Egypt with protests in Yemen, Bahrain, Iran, Morocco and Jordan.

The U.S. maintains large stockpiles of crude oil, which mitigates this short-term uncertainty to a degree. However, OPEC continues to have a direct impact on the price of oil. Should fuel costs continue to increase, the obvious impact will be increased costs for businesses and consumers, slowing economic growth and hiring.

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