Monthly Archives: April 2013

Run your home on a balanced budget? If so, Crunch this!

Most of us run our homes on a balanced budget – because we have to. Otherwise, bankers and debt collectors are breathing down our necks to make those payments, even at highly inflated interest rates.

Government, as we know all to well, dances to a different beat. The Fed prints more money or relies on other red ink absorbing tricks to stay afloat. The State of Illinois, on the other hand, raises taxes, lets bills slide at avalanche speed or stiff former employees’ hard-earned pensions. And we keep re-electing the same crew that’s sailing our boat over the fiscal cliff.

Look out below! Illinois is now only $8 billion-plus in the red.

But Crain’s Chicago Business, that now-you-hate ‘em now-you-love ‘em feisty business mag, is giving you a shot at bringing Illinois’ sinking budget back to the surface at — a crafty do-it-yourself state budget-balancer.

Give it a whirl. It may not be as hard as Springfield’s leaders try to make us think it is. Yes, we’ll have to do without some things. But Johnny can’t always play travel baseball or Susie might forego sleepover summer camp if we can’t make ends meet at home. Or maybe our kids will have to look at a local junior college instead of ivy-covered walls to further their studies.

Something’s gotta give.  What’s in Illinois’ wallet?

Prez O, How’s your tax planning for next year?

My wife and I are both basically self-employed. I consult and Karen is a real estate agent for Dream Town Realty, a cool, internet-savvy agency in metropolitan Chicago. As April 15th rolled around, we got socked pretty good by federal and state taxes. But, that’s to be expected, living in the land of the free and the home of the brave.

We heed the advice of our tax consultant, Bob Rounsfull & Associates, whose sharp pencil does a great job helping us understand and avoid the big tax hammer as much as possible.  But in Bob’s post tax-day blog that I received today, he points out how President Obama and his wife do it at 1600 Pennsylvania Avenue. Here’s Bob’s analysis:

“For 2013, the Obamas reported $608,611 in adjusted gross income. This included $400,000 for leading the Free World, $258,772 in book royalties, $11,462 in interest, and a whole $2 in dividends. They also reported $3,000 in long-term capital losses, with an additional $115,516 to carry over to future years or offset future gains. Of course, they enjoy some nifty tax-free perks, too — helicopters, airplanes, personal chefs and other staff. They also enjoy the use of a 132-room mansion in the heart of Washington, DC, which has been appraised at anywhere from $110 million to $302,021,348.

“On the “deduction” side, the Obamas stashed $50,000 into a retirement plan. (That should be reassuring in the event they can’t support themselves on the speaking circuit.) They also deducted $45,046 in mortgage interest, $63,305 in state and local tax, and a total of $150,034 in charitable gifts to 33 separate organizations. (The largest single gift, $103,871, went to the Fisher House Foundation, which provides free or low-cost lodging to veterans and military families receiving treatment at military medical centers.)

“The Obamas finished up with $335,026 in taxable income. The regular tax on that amount is $87,465, which is more than most voters make in a year. But they got whacked for another $21,221 in Alternative Minimum Tax, plus $6,930 in self-employment tax on the book royalties. Subtract $3,402 in foreign tax credits, and the total bill settles in at $112,214.

“What’s ahead for next year? Well, if the Obamas report the same income and expenses in 2013, they’ll avoid the new 39.6% bracket that kicks in for taxable incomes over $450,000. But they’ll lose 3% of their itemized deductions and 2% of their personal exemptions for each dollar of adjusted gross income over a $300,000 threshold. They’ll pay an extra 0.9% payroll tax on earned income over $250,000, plus a 3.8% “unearned income Medicare contribution” on their investment income.

“Presidents usually find themselves solidly in the “top 1%” that dominated the conversation in last year’s election. George W. and Laura Bush reported $784,219 in AGI in the fourth year of his presidency, including nearly $400,000 in interest and dividends. Bill and Hillary Clinton reported $1,065,101 in AGI in the fourth year of hispresidency, including $742,852 in Hillary’s book royalties that went to charity. And who can forget 1991, when George and Barbara Bush’s dog Millie “earned” $889,176 in royalties for “her” memoir, Millie’s Book? Of course, thebig money comes after leaving office — these days, Bill Clinton earns as much as $10 million per year from speaking.

“We prepare every return to stand up to the same level of scrutiny as the President’s. But we understand our real value comes from tax planning. And you don’t have to earn a presidential income to take advantage of our proactive approach. So call us when you’re ready to pay less!”

Thanks, I needed that!

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So, winter in Chicago’s hanging on like a bad cold!

And you feel like it’s a two-ton elephant sitting on your chest that isn’t about to get up.

And you think you might not be able to get your golf clubs out of the garage until July or August.

And you’re tired of running outside at the first glimpse of sunshine only to realize the wind chill is still below freezing.

Well, it is Chicago. And while you might be singing the Chicago Winter Blues a little longer, take a look at Eric Hines’ brilliant masterpiece of the most beautiful city in North America, thanks to It’s bound to warm you up.

Amazing Chicago Timelapse Video | Smithsonian Magazine*

So your Caddie doesn’t matter?

I wouldn’t ask Tiger Woods this morning if your caddie doesn’t matter.

After leaving Augusta National with a late Masters’ charge boosting him no closer to another Green Jacket than fourth place Sunday, Tiger watched as his former caddie, Steve Williams, dished a resounding high-five on the 18th green as his latest employer, Adam Scott, drilled a 20-foot birdie to take a momentary lead in golf’s most prestigious outing.

It was the quiet, confident coaching from Williams, a New Zealander, to his young, fit pro, Scott, an Aussie, that helped him don the Green Jacket for the first time. Scott became the first Australian to win Masters’ glory after sliding in a winning 12-foot putt on the second playoff hole, past a valiant effort by Argentinian statesman Angel Cabrera, whose ball rested a half-a-roll short of continuing the competition.

As an old, late golf mentor of mine would have exclaimed, “jingle jangle!”

You’ve got to hand it to Scott to rise above what could have been one of his biggest mistakes if he ‘d canned Williams following Scott’s historic meltdown last year at the Open Championship. Though there was a lot of finger-pointing as Scott bogeyed the last four holes to fall to Ernie El’s victory, Scott kept Williams on his bag to make another run.

Even if Williams’ advice to Scott led to the younger Aussie’s 2012 colossal collapse in Lancashire, England, Scott was mature enough to know that his New Zealand caddie had a lot of pure golf knowledge to impart, despite knowing what came out of Williams’ mouth was not always the right stuff. He had been known to utter racist and defamatory comments on and off the course.

On what now is etched in Masters’ history as the defining putt of the 77th Tournament, the 32-year-old golfer turned to his 49-year-old caddie and asked for help.

“I said, `Do you think it’s just more than a cup?’ He said, `It’s at least two cups. It’s going to break more than you think,'” Scott later recounted. “He was my eyes on that putt.”

“The winning putt might be the highlight putt of my career,” Williams said later. “Because he asked me to read it.”

That’s quite a statement from a caddie who had been on Tiger’s bag for 13 majors. Now his advice was sought and he gave it. But not only did Williams give great counsel this time, Scott listened.