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Financial Planning Newsletter• Dec 28th 2009 

Financial Planning Newsletter
2009 Year End Wrap Up

This month: Golf Cart Tax Credits, Property Taxes, SS questions & S&P Fair Values

As we wind down this crazy year I wanted to touch on a list of topics. Some topics are from client inquires and others are just items of interest. Feel free to email or phone me with any questions.

Golf Carts for Free?:

Okay maybe not free, but with tax credits up to $5500 it is pretty close. So here is the deal: It appears that the American Reinvestment and Recovery Act does provide for a significant tax credit that can be applied toward the purchase of "low speed" electric vehicles as long as they are street legal (lights, seatbelts, mirrors, horn, etc) which basically means that a souped up Golf Cart qualifies. I can't tell if this credit extends 100% into 2010, so if you are in the market for a Cart, then get shopping this week. Do your due diligence and make sure that the dealer can prove to you the cart qualifies. For further reading I have linked the Wall Street Journal article along with another link discussing the same issue.

WSJ Golf Cart article

CM Law discussion


Appealing your Property Taxes

The Atlanta Journal recently ran a good series of articles on Property Taxes. Basically, homeowners watched as their taxes went higher right along with the property values during the boom years of 2003 through 2007. The problem is that the taxes have not come back down to reflect the post real-estate bubble valuations. With municipal governments strapped for cash they are not willing to proactively lower your assessments. If you feel your property is being assessed at a value that doesn't really seem realistic in today's market you need to take steps to get your tax valuations in line. With governments strapped for cash the next step we will more than likely see is an increase in milage rates, which will mean higher taxes in the coming years. Getting your property tax valuation closer to market reality today will save you some cash in the future. Here is a link to the AJC article outlining steps to take:

AJC Article on Property Taxes

(for you out of state folks this info applies to you as well. Just do a quick google search for your county tax assessors office to get more info )

Social Security info for those retiring:

This question came up a couple of months ago and for the benefit of everyone I wanted to give you some info directly from the SS website:

A special monthly rule
Sometimes people who retire in mid-year already have earned more than the yearly earnings limit. That is why there is a special monthly rule that applies to earnings for one year, usually the first year of retirement.
Under this rule, you can get full Social Security benefits for any whole month you earn under a certain limit, regardless of your yearly earnings.

In 2009, a person younger than full retirement age (age 66 for people born in 1943-1954) is considered retired if monthly earnings are $1,180 or less.
For example, John Smith retires at age 62 on August 30, 2009. He will make $45,000 through August. He takes a part-time job beginning in September, earning $500 per month. Although his earnings for the year substantially exceed the 2009 limit ($14,160), he will receive a Social Security payment for September through December. This is because his earnings in those months are less than $1,180, the special "first year of retirement"
monthly limit
for people younger than full retirement age. If Mr. Smith earns more than $1,180 in any of those months (September through December), he will not receive a benefit for that month.

Beginning in 2010, only the yearly limits will apply to him because he will be beyond his first year of retirement and have already used the special monthly rule during that year.

S&P 500, where is the fair value?

We definitely can't end the year without a discussion of where the market is headed. As I was doing some research on fundmental valuations for the S&P (which seems an oxymoron considering the the S&P has gone from 667 to 1100 in 8 months!) I came across this interesting article on the seekingalpha website. The author does a good job of explaining where the S&P index should be given estimated earnings and PE ratios. Although the article was written in September he pegged 1181 as the level for year end. Not a bad estimate on his part. If company earnings continue to increase for 2010 then a higher PE ratio is justified (and higher market), however the market can turn on a dime as seen earlier this year. If earnings begin to level out or soften in the early quarters of next year then the market has a way of revaluing stock prices very quickly. Here is the link:



I wish you all a Happy New Year!

If you have any questions on this months topics or want to discuss your Financial Planning feel free to email or phone me.

James A. Daniel,

This newsletter if for informational purposes only. The information contained within should not be considered as financial advice nor soliciation for financial services. Consult with your financial professional if you have any questions.

The Advisory Firm, LLC is a fee-only financial planning company and registered investment advisor.

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