If you are brave enough to turn your television on these days, you might get the impression that most people are going to significantly decrease (if not cease entirely) their gift giving this year because of the state of the economy. But whether you celebrate Christmas, Kwanzaa, Hanukkah, Winter Solstice or Festivus, the holidays are a time marked by generosity; gifts are given and received.

I sat down to write specifically about family gifting, and how things might be tight this year, but I honestly couldn’t generate much enthusiasm for writing about the economy and its affect on this season of giving. And if you are anything like me, you are probably ready to take a break from the headlines and enjoy the final days of 2008 with family and friends. So, instead of belaboring the subject of the economy, I decided to write something I hope is worth thinking ...

Those of us who saw headlines last week surrounding the release of the 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds (status of Social Security and Medicare) saw a date that most likely triggered an immediate mathematical calculation, which might have gone something like this: Social Security will be bankrupt in 2037, which is 28 years away (round to 30), and in 30 years I will be X.  If your ‘X’ is 110 years old, that headline was probably not too worrisome. However, if your ‘X’ is somewhere between 70 and 90 years old, the headline probably caused an uneasy feeling in your stomach. 

I am going to focus my comments only on Social Security, but there will be a future discussion about the Medicare problems, which are much more imminent and much more complicated. They are, ...

What is this new 3.8 percent Medicare tax everyone is talking about?  If your income is defined as ‘high,’ meaning you earn more than $200,000 as a single filer and more than $250,000 as a married couple filing jointly, this new tax will affect you. Fortunately, we have some time to digest the concept and potentially plan accordingly, because the tax does not go into effect until 2013. 

The tax results from the new health care reform law. First, let’s review the current Medicare tax:  At present, the Medicare tax is a “payroll” tax of 2.9 percent.  Employees pay 1.45 percent and their respective employers pay the other 1.45 percent.  Self-employed workers pay the entire 2.9 percent. 

Under the new law, high income households will pay (at least) an additional 0.9 percent on income over the thresholds listed above. This means that taxpayers will pay 2.35 percent total ...