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Getting Ahead
1st Quarter 2016

In this issue:

Taxes: What You Need to Know for 2016

Cutting Pet Care Costs

Buying a Car: Should You Buy at the End of the Month?

Taxes: What You Need to Know for 2016

As we get ready to start a new tax year, what changes are in store that you should be thinking about?

Well, for starters, what's not changing in 2016 are the tax brackets. The top marginal bracket is still 39.6 percent. But the taxable income levels the tax brackets apply to will all increase by about 0.5 percent because the tax law requires these to rise in step with government inflation benchmarks. So, married filers with taxable income in 2016 exceeding $466,951 and single filers with over $415,051 will pay at this top rate.

Taxes Also unchanged in 2016 is the maximum amount workers can contribute to their 401(k) or other similar style retirement plans. This remains at $18,000 ($24,000 for workers over age 50 in 2016). Amounts allowed as contributions to IRAs are also the same ($5,500 and $6,500 for those over age 50).

Families that use Health Savings Accounts (HSAs) will be allowed to contribute an additional $100, for a total of $6,750. In 2016, HSA contributions for individuals remain at $3,350.

However, here are several notable tax changes to keep in mind for next year.

Higher penalties for those without health insurance: If you aren't covered by qualifying health insurance in 2016, the higher penalty for going uninsured will hurt. The maximum penalty will be the national average premium of the Bronze Plan on the federal exchange, or up to about $2,085. To avoid the penalty for 2016, you'll need to be covered under an employer's plan, or you'll need to enroll in a health plan on an exchange in the first two months of 2016.

Higher tax-free benefit for mass-transit commuters: One of the expiring tax breaks the huge new federal spending bill has made permanent is a gift to those who pay for mass-transit commuting costs. The bill raises the monthly amount allowed to be paid with pretax income to $255 starting in 2016. The current limit is $130, so this will be a big benefit. The same amount will also apply to the pretax monthly amount car commuters can use for parking costs (which was $250 per month).

The new spending bill also makes permanent other tax breaks that were set to expire:

IRA charitable transfers: This allows IRA owners age 70-1/2 or older to donate as much as $100,000 to a charity from their IRA tax-free. The charitable transfer also counts toward the IRA owner's required minimum distribution for the year of the transfer.

State and local sales tax deduction: This allows taxpayers to deduct the greater of either sales tax payments or state and local income taxes on their federal returns. This is mostly used by taxpayers living in states such as Florida, Texas and Washington, which have no state income tax.

Educator expense deduction: Many teachers use this to deduct as much as $250 of unreimbursed expenses for classroom supplies.

American Opportunity tax credit: This allows a dollar-for-dollar credit against your tax liability of up to $2,500 per year when you pay for qualifying education costs for as many as four years of post-secondary education.

Finally, you'll have more time to file your tax returns in 2016. That's because April 15 falls on a Friday, which is a holiday in Washington D.C. Because of this, the deadline for filing will be Monday, April 18, 2016. And if your filing processing center is in New England, then filing day is Tuesday, April 19 because those states' processing centers will be closed on the 18th in observance of Patriots Day.

Article courtesy of CBS Interactive Inc.

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Cutting Pet Care Costs

As responsible pet parents, we have an obligation to care for our furry friends in sickness and in health. But as pet care costs rise, how do we do what's best for our pet? Here are a few tips to help you save money on your pet's health care.

Schedule Regular Check-Ups
Don't skip your pet's yearly exam. It's much more expensive - and risky - to treat illnesses than to protect against them. It's also a good idea to shop veterinary practices by comparing fees for preventative care.

DogPersonalize Your Pet's Vaccines
Some vaccines are optional, while others are essential in preventing serious diseases. Never skip any shots required by local laws or mandatory for your pet's protection, but do talk to your vet about personalizing your pet's vaccine protocol.

Spay or Neuter Your Pet
Spaying or neutering your pet can save a lot of money by preventing serious health problems, including uterine, ovarian and testicular cancers. Many local shelters provide resources for low- or no-cost spay/neuter surgeries.

Brush Your Pet's Teeth
Dental disease can lead to heart and kidney problems and expensive procedures. Start a dental routine to keep your pet's teeth and gums healthy. Ask your veterinarian what products to use and how often. Don't use toothpaste made for people, which contains fluoride and may irritate your pet's stomach.

Protect Your Pet from Parasites
Flea and tick infestations can cause a host of costly medical problems from minor skin irritations to life-threatening blood loss. Stick with a topical flea and tick solution to keep the critters at bay. Make sure to only use products as directed. Never use a product intended for a dog on a cat.

Toss the Cigarettes
Secondhand smoke is no joke for pets - it can cause asthma, bronchitis, lymphoma and oral, nasal and lung cancers. Quit now and you'll save money on vet bills. At the very least, avoid smoking around your pet.

Consider Pet Health Insurance
If the cost of an emergency veterinary visit or serious illness would be a financial strain, consider investing in pet health insurance while your pet is healthy. Be sure to read the fine print, though - not all plans are created equal.

Buy High-Quality Pet Food
A good quality pet food - formulated under the guidelines of the American Association of Feed Control Officials - is often more cost-effective than a homemade diet. Avoid overfeeding your pet, which can lead to obesity and other health problems.

Groom Your Pets at Home
Save the price of a visit to your groomer with regular nail-trimmings and brushings. It's good for your pet, it will reduce the amount of hair floating around your home, and your cats will have fewer hairballs.

Article courtesy ASPCA

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Buying a Car: Should You Buy at the End of the Month?

ResolutionsIf you're interested in buying a car, then you've probably heard from friends or acquaintances that you should buy at the end of the month because dealers are usually looking to meet goals during this time. You might get a better deal as a result. Is this line of thinking really correct? We'll explain.

Usually, It's True
In general, the end of the month is, indeed, the best time to buy a new car from a dealership. Even better, you might want to consider buying a car at the end of a quarter -- either March, June, September or December. In those cases, you might get even more savings than you would from simply buying at the end of the month.

Why is the end of the month such a good time to buy? It all comes down to dealership goals. In general, most automakers set sales goals for dealers, and most dealers set similar goals for themselves. Often, these goals include high-dollar bonuses if they're met. That's a big incentive for dealers or salespeople who close extra sales at the end of a month or quarter to help reach a goal.

Last Day Only?
Interestingly, our advice doesn't apply solely to the very last day of the month. If a dealer is closing in on a goal several days before the month's end, that dealer may start giving better deals than usual in those last few days. Additionally, the very last weekend of the month tends to see fairly similar deals to the last day because dealers look at the final weekend of each month as one last push to get extra sales before the month ends. (Weekends tend to be busier than weekdays for car dealerships.) As a result, you might not need to visit a dealer on the very last day of the month; the last few days or the last weekend may suffice.

There are, however, some situations in which buying a car at the very end of the month won't get you the best deal possible. Our best example is a situation in which a dealership has already reached its monthly sales goal. In that case, the dealership probably won't discount a car as much because it doesn't need the sales so badly. If you're especially focused on the bottom-line price and the dealer you've visited isn't meeting your terms, you may want to try another dealership before the month is over.

Shop Early, Buy Late
Because the end of the month is the best time for a good deal, we typically recommend that shoppers follow a simple strategy when it comes to buying a car: Shop for the car early in the month, and buy it later in the month. In other words, get your test drives out of the way early on, and begin narrowing your list by the end of the month. When the last few days come around, start visiting dealerships again to start the final negotiating process.

Article courtesy of

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