Impact Of Higher Interest Rates Mixed Tax Underpayment Penalties Investing In Collectibles

In this episode of the Planned Solutions Incorporated Podcast, Interest rates have increased sharply in the past 18 months as the Fed attempts to slow the economy and bring inflation down to its 2% target. However, several areas of the economy have reacted in unusual ways as the job market has remained strong and single-family home prices remain elevated, while commercial real estate prices have dropped. In addition, the level of household debt, commercial business debt, and even government debt have all increased despite higher interest rates. Also, The interest rate applied to tax balances that were not paid within the quarter that the income was earned was 7% for the third quarter and increased to 8% for the fourth quarter. These high interest rates may lead to substantial tax underpayment penalties for taxpayers who do not monitor their taxable income and tax withholdings during the year, making it more important to engage in tax planning during the tax year Also, Collectibles can be an attractive investment opportunity for those who enjoy collecting items that may appreciate in value and have the time to invest in becoming an expert in the field. However, investing in collectibles comes with its own risks such as the risk that the collectible items will be lost or destroyed. In addition, when a collectible is sold at again, the tax code applies a higher tax rate to the gain than it does for other investments that are sold after they appreciate in value. Plus a look at the Planned Solutions Incorporated Office Bulletin Board- Our Podcast moderator, Jason LaChance, has a day job working for a non-profit called Parents and Addicts in Need (PAIN) located in Fresno, California. This organization focuses on providing support to their community in the areas of addiction recovery by providing resources to both addicts and their families. It goes without says that this is important work given the impact that drug overdoses are having in communities across America. PAIN is largely funded through individual donations. On Friday, October 13th they will be hosting their big annual fundraiser, the Oh So Thankful Dinner & Fundraiser, in Fresno, CA. However, most of their funding comes from individual donations, not necessarily from those who can attend the event. We understand that everyone has a limited budget when it comes to charitable giving but if helping to fund addiction and recovery services is on your list of charitable causes, we would strongly recommend considering PAIN: https://painnonprofit.org/. Chase Armer's book- Financial Planning Insights is now available at: https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected] The Personal Finance Review is published and distributed biweekly by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action. Planned Solutions, Inc.