No one knows with certainty when the economy will begin to recover.
To help ease anxiety among investors and business owners alike, Donald Karlewicz says, “We have to tell everyone ”“ whether it is their personal finances or their business ”“ to budget somewhat conservatively.”
Karlewicz is a certified public accountant with Goldstein, Karlewicz and Goldstein in Chestnut Ridge.
“We were feeling OK when the stock market was going up, but the past few weeks have been very unsettling,” he said. “Broker and 401K statements are getting scary. Wild swings on Wall Street are making many people tread gingerly ”“ because they don”™t know what”™s coming next. The recession is becoming very real to everyone.”
But there are opportunities out there. “Several Wall Street firms see prices of companies have come way down ”“ and they are buying them. For the business person on Main Street who has been playing it conservatively all along, the time to acquire another business and expand could be right now.”
New York”™s infamous reputation as the most business-unfriendly state in the nation doesn”™t help, even though Gov. Andrew Cuomo has made a real effort to change the state”™s image and deliver on his promises, Karlewicz said.
Still, it doesn”™t take the sting out of the budgetary shortfalls that land on the shoulders of business; the most recent, the $95 million shortfall in the Department of Labor”™s unemployment insurance division, was passed along to businesses, which had to pay their assessed share by Aug. 15.
“It”™s one thing after another. That”™s what”™s going on in the state today … and it makes it very difficult for most people to think of investing in a new business or expanding the one they have.”
The MTA payroll tax is another sore point for Hudson Valley businesses. With 33 cents of every $100 of payroll being extracted from every business in the 12 counties the MTA serves, Karlewicz says, “It is time for New York to find a way to balance the MTA without doing it on the backs of the upstate counties. Let”™s not forget the rising fuel prices, which are outrageous, but people are starting to accept as the norm. There are not many of them using the services of the MTA to get back and forth to work.”
Business owners and private individuals ”“ even if they are financially cushioned ”“ are taking a careful looks at their expenses, cutting out unnecessary spending and keeping one eye on the balance sheet at all times.
Business is also watching the nation”™s capital, waiting to see the next move the Obama administration will make.
“The president keeps talking about increasing taxes. The other side of the aisle has kept that in check ”“ so far. The Bush-era tax cuts are due to expire December 31st, 2012. Unless some action is taken to extend them again, we”™ll be looking at a tax increase that will go from 35 percent to 39.5 percent.
“That is going to affect single people who make $200,000 or more and married couples who earn $250,000 or more. All things considered, we are paying the highest taxes in the nation and are inundated with fuel pass-alongs, governmental surcharges and other fees tacked on to just about everything. Two hundred and fifty-thousand dollars a year income may sound like a lot of money in other places, but it is not a lot for those who live in the Hudson Valley.”
Add to that the Medicare surcharge that will go into effect in less than two years, said John Rosenberg, tax manager at Goldstein, Karlewicz and Goldstein.
“The Medicare surcharge for people earning $200,000 or more will be on their overall income as well as on their investment income ”“ $250,000 for couples ”“ is part of the Affordable Health Care Act.”
The surcharge, 0.09 percent, may sound insignificant, but depending on your income, “2013 could be a very tough year,” Karlewicz said. “Many people don”™t realize this is coming and are going to be surprised. There”™s a lot of talk about the health care act being repealed, but it is going to be some time before that happens ”“ it will probably take a new president and Congress ”“ and some of the provisions that impact business will not be repealed.”
