May Issue                                                                                                 June 3, 2012
Congrats to LaShanda 
Roberts on Becoming May's Client of The Month
XNE Financial May Client of the Month - LaShanda Roberts
XNE Financial Advising, LLC is proud to announce Miss LaShanda Roberts of New York as May's recipient for the Client of the Month Award. Miss Roberts will receive a $50.00 check from XNE Financial Advising, LLC in recognition of her outstanding diligence in taking control of her finances.

 

 
 
 

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 Expiration of Taxes

EXPIRATION OF TAX CUTS & THE AFFECTS ON YOUR INCOME
XNE Financial Advising, LLC April Newsletter
Follow-Up Corner

 

In our April newsletter "FEDERAL SUBSIDIZED STUDENT LOAN RATES MULTIPLED BY 2" we spoke about the possible doubling of interest rates on Federal subsidized student loans on July 1, 2012 (now approximately less than one month away from today). Since issuing our newsletter about the interest rates as well as speaking about it on the Talk BIG! Live w/Eva & Tia DeShay Blog Talk Radio Program (click here to to listen online Online Blog Talk Show in May 2012), Congress hasn't passed any bill that calls for the extension of the current rate or not (current rate at 3.4%, expected to go to 6.8% come July 1, 2012).

EXPIRATION OF TAX CUTS & THE AFFECTS ON YOUR INCOME

 

Come January 1, 2013, we could possibly see our prior and current Presidents' federal tax cuts expire causing a negative ripple effect across all American's income/earnings unless Congress takes action to extend the tax cuts or propose a new tax bill. We want to highlight the biggest tax cuts that will expire and how these expirations will affect individuals and families across the country.

  

1. Just About Everyone's Tax Rates Will Increase - With the expiration of the prior Presidents' tax cuts, we'll see tax rates go up for everyone (not just the rich). If you normally receive a tax refund every year with everything being constant besides the tax increase, your tax refund will likely be smaller than it has been when these tax rates increase. Please see our table below for Single individuals change with the tax rate and click the Other Tables link to see for Married and Head of Household - Other Tables

  

XNE Financial - Tax Rates

 

 2. Capital Gains & Dividends Face Increased Taxation - Currently, the max Federal rate on long-term capital gains and dividends is 15%. Beginning January 1, 2013, this 15% tax will go to 20% for capital gains and 18% for gains on assets that were acquired after year 2000 that's been held for 5-years. Dividends will be taxed at 39.6% instead of the 15% today.

 

XNE Financial - Capital Gains

*If gain on asset wasn't held for 5 years and purchased after December 31, 2000

 

XNE Financial - Dividends

 

3. Phase-Out Rule for Itemized Deductions - This phase-out in the itemized deductions could eliminate up to 80% of your mortgage interest, charitable donations, state taxes paid and qualified mortgage insurance premiums. The phase-out on these deductions will affect higher income earning individuals that have an adjusted gross income of $175,000 for singles and $87,500 for married couples filing separately.

 

4. Child Tax Credit Sliced in Half - A major issue as many struggling families looked to this credit of $1,000 per child to offset any possible tax liability remaining after other credits and deductions haven't washed out their taxes due. Come January 1, 2013, this credit will be reduced from $1,000 per child to $500 per child.

 

These are just a few issues individuals and families could be facing come January 1, 2013, if Congressional officials don't take immediate action. Most of the current tax cuts have been around for a decade now and if extended, it will cost the government approximately $1.01 trillion between 2013 and 2015 (based on CBO). Another expiring tax cut also takes place on January 1, 2013 which is the current PAYROLL tax cuts (more specifically the Social Security tax) which was passed by our current President. If not extended, come January 1, 2013, all wage earners will see their Social Security tax payments rise from the current level of 4.2% to 6.2%, which will decrease the amount of pay you bring home each pay. Please see our table below on how the expiring tax rates will affect single individuals.

 

XNE Financial - Expected Taxes

XNE Financial Advising, LLC is a financial service company that focuses on core financial management of individuals and small businesses. An independent, fee-only firm located in the state of Virginia that provides services to individuals & businesses on financial and business management matters with concentration of clients inside the tri-state area of Metropolitan area of the District of Columbia, (DC, MD, and VA) with minor concentration of other states.

 

Mr. Epps has a bachelor's degree in Information Systems Management and graduated Cum Laude of his class. Mr. Epps spent nearly eight years with a middle market investment banking firm and within his recent capacity at the firm, Mr. Epps served as a Registered Representative (Broker) where he was responsible for preparing, collecting, maintaining, and disseminating financial analysis for the banking sector. Mr. Epps is a current holder of FINRA Securities Licenses 7 and 63, an IRS Registered Tax Return Preparer (December 2011), Certified Microsoft Office User Specialist, Intuit QuickBooks Certified User (Pro/Premier Versions) and he's company is an Authorized IRS e-file Provider.

 

Sincerely,

 

Xavier Epps
XNE Financial Advising, LLC

 

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