2011 Tax Tips on the Ilyce Glink Show February 6 2011

2011 Tax Tips on the Ilyce Glink Show

Georgia Retirement Exclusion

We had a call today from Marie who wanted to know about establishing residency in Florida before she and her husband received a big chunk of deferred compensation. She is thinking about moving to a state without any tax in order to save the 6 percent she’d have to pay in Georgia.

She and her husband are in their mid-50s, but if they can wait until they’re a little older, they might find that they qualify for the Georgia Retirement Exclusion, which could wind up greatly reducing the state income tax they’d have to pay.

Georgia Retirement Exclusion

If you’re 62 or older with earned or unearned income, can take advantage of the GRE which should be called Georgia Seniors Exclusion. First $4,000 of earned income not taxed at Georgia level and up to $35,000 of other income isn’t taxed. There is an enhanced Georgia Retirement Exclusion that kicks in 2012, with an exclusion of $65,000 income and floats up to 2016 where an unlimited amount of income not taxed at state level. Except if you’re working, then only $4,000 is excluded. It’s Retirement Income.

It’s worth checking this out to see if it applies to you and what it would mean. I suggest you spend some time with a tax preparer or enrolled agent who can help you figure out what this means given the type of income you’re expecting and when you’d expect to receive it.

Employment Numbers For the Week

The January unemployment numbers were released this week and in a word, they were confusing.

The official unemployment rate dropped from 9.4 percent to 9 percent. Which seems great, except that about 300,000 people decided to just give up and drop out of the job market. A meager 36,000 jobs were created, some of which was clearly the result of all the bad storms in December. But, everyone was expecting job creation at 140,000 to 150,000 – so, very big difference.

Also, the average workweek was off by one-tenth of one percent (0.1%) while the manufacturing workweek rose by that much, Barron’s reported.

The U-6, which is the broadest measure of unemployment, came in at 16.1 percent, but without seasonal adjustment, was really 17.3 percent.

The labor force has contracted by a massive 500,000 and Barron’s quoted Gluskin Sheff’s Dave Rosenberg who said “the participation rate continues to slide fully 19 months into the economic expansion, which is an off-the-charts development.”

Think about it – at 19 months into an economic expansion, we should have been creating 500,000 to 700,000 jobs per month, and instead, 450,000 people are filing for first-time unemployment claims. Not so good. The numbers are all over the place, but only 117,000 jobs were added, which is down from 297,000 jobs created in December. There was an erroneous AP report that claimed that 500,000 jobs were created, but if that were true, it would have been front-page news in the Wall Street Journal.

We took some calls on the show about how perhaps seniors were taking retirement en masse now that their 401k portfolios have come back into play. Someone suggested the problem is with oil prices and we need more drilling locally. I think we need to make some investments into renewable energy and into innovation so that we can figure out what we’ll do for energy thirty years from now when the oil runs out.

I announced Glink2012, which sounds like I’m running for President – which I’m not. But I’m inspired by my WSB Colleague Herman Cain who did announce he is exploring a run and has taken a haitus from WSB. What I want to do is create some user-generated ideas to help find solutions to the economic mess we’re in.

I also announced that our next Real World Seminars event will take place in the third quarter, and will focus on Building a Better Business. I want to find some success stories, innovators, and other folks to help answer your questions and help you build a better business. More on this later.

Thanks for listening. Please your comments here, on the blog. And, have a great week.