May 2010
Issue: 81
Sound, visionary stewardship


As a gardener, one must learn patience and perspective. You plant bulbs in the fall and they bloom in the spring. You have, what you thought was, a thriving plant and it doesn't come back after the winter.
Too little rain & sun and you get little results.

About four or five years ago, a friend was totally rebuilding his seaside home. All the gardens would be torn up. We rescued a ton of iris plants that had recently been submerged by the sea.
irisWe took them and planted them in a few places in our yard. In one full sun spot we got a few blooms the first year. I learned that I had the crowns too deep in the ground and that was inhibiting the blooms. Fixed that. Still, not much happened in the big bed of iris. About two days ago, I looked at the big bed and to my surprise and delight there must be 60 stems about to burst in to a brilliant purple mass. Our patience has paid off!

One needs to adopt some patience and perspective with the current state of the stock market these days. If you'd like to read the Market Commentary we sent out to clients this month, please do.

As always, if we can be of assistance, reach out.

Paula Signature

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From Bill's Corner...

Get ready for new Medicare-Related Taxes in 2013

The new health-care reform legislation includes new Medicare-related taxes, and these new taxes will take effect in 2013. Get ready to pay more.

Most of us who receive a paycheck are aware of payroll taxes.  This combined tax of 7.65% (6.2% (OASDI portion and 1.45% Medicare portion) is matched by your employer for a total tax of 15.3%.

Beginning in 2013, the new health reform legislation increases the Medicare portion by 0.9% (to 2.35%). It will be blended or tiered rate for anyone making over certain amount.  The income threshold will be based on your filing status, but for most taxpayers the threshold will be $200,000 of wages. Here's a quick example of how the new tax will work: take a single individual with wages of $230,000 in the year 2013.  That taxpayer will owe 1.45% on the first $200,000 of wages, and an additional tax at a rate of 2.35% on the remaining $30,000 of wages for the year.

There's more...

In 2013, a new 3.8% Medicare contribution tax will be imposed on the unearned income of high-income individuals, estates and trusts. The tax is equal to 3.8% of either of the following which ever is less:
  1. Net investment income which includes income from interest, dividends, annuities, royalties and rents, and capital gains, as well as income from a business that is considered a passive activity or a business that trades financial instruments or commodities, or
  2. Modified adjusted gross income that exceeds $200,000 ($250,000 if married filing a joint federal income tax return, $125,000 if married filing a separate return)
Put another way, you'll be subject to an additional 3.8% tax if your adjusted gross income exceeds the dollar thresholds listed above.

Does anything escape this tax?

Yes! Interest on tax-exempt bonds, veterans' benefits, and excluded gain from the sale of a principal residence excluded from gross income are not considered net investment income for purposes of the additional tax. Qualified retirement plan and IRA distributions are also not considered investment income.

Bill signature
In This Issue
Time to Share. Create a Buzz.
100 best money moves you can make
The truth about health care reform
10 things gas stations won't tell you.
5 billionaires living below their means
Your 5-minute guide to protecting your identity
About us
Time to Share. Create a Buzz.

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100 best money moves you can make

Money Magazine's annual guide to the best stocks and funds, credit cards, career moves, retirement strategies, and much more.

The truth about health care reform

After months of debate that has played out across every conceivable form of media, more than half of Americans say they still don't understand how they'll be affected by this nearly $1 trillion blob of insurance regulations, tax credits, and new programs, according to a recent CBS News poll.

Read on...

10 things gas stations won't tell you

They share your pain when gas prices soar but not your nostalgia for service bays. And although they accept debit cards, using one might cost more than you think.

Read on...

5 billionaires living below their means

Each of these men is worth a fortune, though you might not know it to look at them. Frugal, no-frills approaches have paid off in their businesses and their lives.

Read on...

Your 5-minute guide to protecting your identity

Here are 22 steps to protect yourself from identity theft -- and 8 ways to clean up things if you become a victim.

Read on...
About us

WH Cornerstone Investments, LLC provides wealth management services to a select group of clients. Regardless of their background or future vision, all of our clients commit to a plan that targets their long-term financial growth and stability. While some of our clients concentrate on one part of their investment strategy, others opt for a more holistic approach.

WH Cornerstone clients demand customized objective, expert advice, which they know can come only from a firm that is truly independent-a firm not tied to financial institutions. As an independent Registered Investment Advisory firm, we are fee-only and therefore free from any outside institutional influence.


Paula Harris and Bill Harris, CFP
WH Cornerstone Investments

Sound, visionary stewardship