“…if you are familiar with the term, you know this is a gathering storm made up of tax breaks expiring, automatic spending cuts beginning, the debt ceiling rising and millions of more taxpayers getting hit with something called the Alternative Minimum Tax.” Mary Hunt, Debt Proof Living.

I blogged about the tax cut bill two years ago. I am posting those blogs below. We need to be proactive. I recommend three things:

  1. Do not spend more on Christmas gifts than the amount of cash you have on hand.
  2. Keep any money you receive for Christmas until after you get your 2013 paycheck.
  3. Use the tax guidelines on the 7-6-2010 blog to set a new budget.

Congress may extend the cuts for two more years, like they did in 2012, but I wouldn’t count on it.


The Tax Cut was extended for two more years. I am glad that taxes will not increase, but I am also glad that I had several months believing that it would. It forced me to examine my spending on a deeper level than I had before.

It also made me look at my sources of income. What would I do if this source were suddenly to stop?

It relieves a lot of stress if you have a plan B. My kids ask me what I would do and I told them the steps I would take. I let them know we would not be homeless or run out of food. They have watched as our taxable income has decreased every year since 2007.

They weren’t as thrilled as we were when we paid off our credit card and auto loan in 2009. But the next time we had to tighten our belt it was easier because we did not have those payments.

I look forward to 2011. I plan on growing more of my own food. We are taking steps to make our home even more energy-efficient. (I plan on taking the drawers out of the kitchen cupboards and caulking the space between the molding and the floor behind them.)

There is always room for improvement!



Yesterday, I read an article at “Americans for Tax Reform”,, reporting the rates taxes will rise.

-The 10% bracket rises to an expanded 15%

-The 25% bracket rises to 28%

-The 28% bracket rises to 31%

-The 33% bracket rises to 36%

-The 35% bracket rises to 39.6%

Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The ‘marriage penalty’ (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.” Americans for Tax Reform

I still choose to be proactive. I am saving as much money each payday as I can. I am only charging what I can pay off in that month.

What are you doing to prepare?

Is your garden doing well? Are you canning, freezing and drying your produce?

Are you paying down debt?

Are you making decisions that will lower your bills?

Use cash for Christmas gifts.



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