The year 2013 is going to be full of changes. Sure, the November elections left us with a virtual status quo in Washington – Obama is still president, the Republicans are still in charge of the House, the Democrats are still in charge of the Senate – but 2013 could still be rife with drama and new policies.
First of all, the fiscal cliff is sure to get almost daily attention until our political leaders come to an agreement. Bloomberg has already reported that the wealthy are in a race against the clock to find legal tax shelters before President Obama increases taxes for those making above $250,000, as if it’s a foregone conclusion. One tax haven we already know will disappear in 2013 is the $5 million exemption on the gift and estate tax, which Forbes reminds us drops to just $1 million on January 1st.
It’s the end of that higher limit for the estate tax that has Libby at Smart Money Focus wondering what to do with an extra $13,000 she recently received. Her grandmother, whose health is failing, doesn’t want the government to get any more of her money should she die in 2013, so she’s trying to get her estate under $1 million before the ball drops in Times Square. The result? Everybody – from Libby, to her parents, to her cousins – gets a $13,000 gift to use however they like:
“It was quite a shock to see the $13,000 pop up overnight; it essentially doubled our emergency fund in a matter of hours. But since no one really needs a $26,000 emergency fund (I’ve never even dipped into my existing emergency fund!), my husband and I are now at odds over just what to do with it.”
So Libby’s turning to her readers to help her evaluate her options. They include boosting their fund for a down payment on their next house, adding to their retirement investments, and putting it toward their kids
Here are some other forward-thinking posts:
FSA Limits Reduced for 2013 [Five Cent Nickel]
If you contribute to your employer-based flexible sending account (FSA), your account is about to get a new federally-mandated limit in 2013 thanks largely to Obamacare. “Until now, FSA limits have been determined by employers, and many (if not most) families have been able to set aside upwards of $5,000 per year,” writes Nickel. Check out your contributions to make sure they’re in line with the new requirements, and start thinking about how to reallocate any contributions that put you over the limit.
What Is the Fiscal Cliff? [20 Something Finance]
Did the Democrats get a mandate to overhaul the tax system with their election victories? Is it fair to ask the top earners to pay more in taxes? Will a balanced approach to paying down our debt actually work? G.E. at 20 Something Finance really wants to spark a debate on these topics.
Will We Fall Off the Fiscal Cliff in 2013? [Saving to Invest]
Wondering what impact the so-called fiscal cliff could have on your household in? I know I have, but I’ve had a tough time finding specific numbers. That’s why this post caught my attention. It breaks the numbers down based on your household income, making it easy to understand exactly what’s at stake.
The Year’s Nearly Over – How to Get Your Finances in Order So You Don’t Ruin the Next One [Money Ning]
The holiday season can put you in a financial hole before the new year even begins. To ease the stress, Vincent suggests, “Give the gift of you. When you offer your time, you’re giving a special gift that can’t be bought in a store. This eases the burden on your wallet while strengthening the quality of your relationships.”
Mortgage Forgiveness Debt Relief Act to Expire in 2013 [Quizzle Wife]
Long before most Americans realized we were in a recession or housing crisis, the government passed debt relief for struggling homeowners to protect those who lost their home to foreclosure or sold it at a loss from facing certain taxes. However, this 2007 act is saying farewell in 2013. Marco at Quizzle breaks it down for you.
The Five Year-Plan Will Soon Become a Four-Year Plan [No More Spending]
Laura’s got a five-year plan that, on January 1st, will become a four-year plan, as she and her family inch closer to living their financial dreams by 2016. See what it’ll take in 2013, 2014, and 2015 to get there.