Over the past two weeks there has been A LOT going on in Washington DC affecting two major categories of our spending: Taxes and Healthcare. These two categories matter hugely for our present and future financial security.
A few of my personal thoughts:
An assumption I have heard from a number of clients and friends is that they believe tax rates are going down. Although lower rates were proposed in the Trump Tax Plan, I believe we are more hopeful than anything that rates will go down. It is simply too early to tell.
Although, doubling the standard deduction (a proposal) AND lowering the top Federal tax bracket (proposed) could lower lots of peoples’ taxes (middle- & upper-classes).
The doing away with deductions for State & Local taxes is far from a done-deal. In fact, it is unlikely (my opinion, not based in tax theory).
Making decisions in 2017 based on what we think may happen in 2018 is most likely premature. Even the most qualified CPAs are hesitating to make recommendations based on what has been proposed in the President’s tax plan.
Even though most people reading this edition of TGIF 2 minutes have either employer-provided healthcare through their own job or a spouse’s or they buy their own health insurance, I believe the latest news still matters.
I frequently talk to business owners and parents who state that younger eligible participants in healthcare plans (and sometimes their own kids) opt out of employer health plans more often than you would think. You may ask,
“Why?” but the reasons are mostly financial. For example,
“Why pay for healthcare coverage when it is so expensive? I can go to the doctor when I need and pay by the visit.”
“Shouldn’t the government provide me with healthcare?” (Feel the Bern)
“How come I can’t decide for myself how to pay for my healthcare?”, as in encouraging the use of Health Savings Accounts, or HSAs. Please ask me more about HSAs.
Friday’s Executive Order signed by the President was exciting, in my opinion, for a lot of these reasons. At first blush (always a dangerous time to make generalizations) the executive order expresses the desire to listen to the people asking the questions stated above.
Healthcare will continue to be one of our BIGGEST expenses — today and in our future. Insurance is most always a big and necessary expense. However, having lower-cost choices and more choice (similar to Term Life versus Whole Life) can make this necessary healthcare expense more manageable.
More to come on these critical personal spending items. Please let me know if this information is helpful.