Lots of financial news this week.
Here’s a Top 3 Recap so you can show off around the virutal water cooler…
1. Inflation’s Down
CPI clocked in at 8.5% for July. That means stuff is 8.5% more expensive than it was LAST July.
BUT, the CPI for June was 9.1%, so that’s good. So it’s “less” more expensive than last month.
The main reason for the inflation slowdown was from gasoline which was down 7.7%.
(HOWEVER, you might want to fill your gas tank this week. Oil prices are on the rise and it will be a short matter of time before it’s reflected at the pump.)
2. Market’s Up
The market rallied on the “good” inflation numbers and the S&P 500 is now up 14.7% since the low on June 16th.
And we’re now down “only” 11.7% on for the year.
3. You Might Get Audited
The Inflation Reduction Act is all but a done deal.
The most impactful thing for you will be a higher chance of an IRS audit.
After many years of getting gutted, the Act will nearly double the amount of IRS employees with a goal of collecting on taxes that should have been paid but weren’t.
Even if you pay your taxes and keep good records, an IRS Audit is not fun. So if the cup’s half empty that’s a bummer.
HOWEVER, it’s estimated that ~$400 BILLION is the annual amount of taxes that are owed but go unpaid.
If they collect all of that, then isn’t that $400B they don’t have to tax us for?
So if the cup is half full, I’d probably rather get audited once than pay more in taxes for who-knows-how-long.
(For the record, I am 100% politically agnostic. So that’s not a right or left thing, it’s just my 2 cents.)
That said, I always recommended people don’t cut corners on taxes. Reduce taxes through legal strategies, not from “forgetting” to report income or gains.
If you do get audited and they find your “forgotten” income, you could set yourself up to get audited regularly for a long time to come. Eek!
The Takeaway
1. Fill up your tank
2. Your portfolio’s up (but don’t look just yet)
3. Pay your taxes
