Why zero inflation is bad for you. Why zero inflation is bad for you. You might be happy if store prices aren't rising, but at the same time, Social Security checks aren't getting any bigger, and your CD might pay only a penny on the dollar.
Government benefits and tax breaks designed to keep pace with inflation through annual cost-of-living adjustments and indexing won't budge in 2010. You won't earn much on your savings either.
Welcome to the year of the un-COLA.
No hike for interest rates: Yields on one-year certificates of deposit continue to hover around 1%, on average, and the typical money market account pays less than half that much.
Income tax status quo: Normally, tax brackets are indexed to inflation. More income gets included in lower brackets, lowering everyone's tax bill. For 2010, there will be only minor adjustments.
And the vast majority of taxpayers who don't itemize will get the same standard deduction as they did the year before: $5,700 for individuals and $11,400 for married couples. The personal-exemption amount will remain steady at $3,650 for every taxpayer, spouse and dependent.
Social Security freeze: For the first time since automatic cost-of-living adjustments were instituted in 1975, Americans won't see an increase in their retirement or disability benefits. (For more on retirement funding, see "How long can Social Security last?") But Congress might agree to send each of the 57 million beneficiaries a check for $250.
Some good news: High-income workers, rejoice. The maximum amount of wages subject to Social Security taxes will remain at $106,800, the first time the index hasn't changed since 1971. The tax rates will stay the same, too: 6.2% for Social Security and 1.45% for Medicare, paid by both employers and employees. The Medicare portion is not capped and applies to all wages. ( msn.com )
No comments:
Post a Comment