Tax Increase Survival Advice

By Debra Wheatman

On January 3, 2013

In General

About money, tax increases


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We survived the end of the Mayan calendar and we will survive a drop off the fiscal cliff.  From all reports, it looks like taxes will rise for some, if not most, Americans.  Even if your tax increase is minor, you will see others’ tax increases passed along to you in the form of higher prices for goods and services.  Bloggers and news talk shows are giving tips on how to cut back on expenses.  One woman comments that she will have to eliminate weekly massages. Another man said he will not be able to be as charitable. Why must we make cuts?  Why not increase our income to sustain our lifestyle?  I don’t want to eliminate things I have worked hard to afford.  I see it as a personal challenge to make up that gap and raise my net income this year, despite any tax increases!

Side Projects

You can find a wide variety of part-time jobs, freelance positions, and side projects spanning multiple occupations.  Side work could include Web design, accounting, math tutoring, waitressing, freelance technology support, call center support, or retail.  It’s a great way to earn extra income.  In many cases, you can control it like a faucet, working the number of hours that fits your lifestyle.  Another benefit is the chance to learn new skills that you can’t learn during your primary job.

Increase Your Current Salary

Why not get paid more for working your same hours?  I like this idea even better than side projects!  If you are consistently contributing to your employer’s success, this may be a good time to talk about an increase in your compensation.   Prepare a list of your recent contributions, carefully noting results that you delivered and how you achieve them.  Remember to mention things that elevated revenue, reduced expenses, enhanced customer loyalty, and improved efficiency.  If you are denied a raise, ask what you can do to continue to be a top performer and if you can revisit the subject in three or six months.

Passive Income

Real estate or financial investments are traditional forms of passive income.  Do you operate a blog?  You can sell text links or ads to generate an ongoing monthly income.  Consider writing an e-book that you can sell as a download.  When selecting a passive income vehicle, be sure it is risk-free, hassle-free, requires little to no time to operate, and is legal.

Bartering With Other Professionals

Bartering may sound like something that only works among farmers with different crops. However, it can work in many circumstances. For example, your neighbor may agree to design your new website in exchange for you using your expertise as a lawyer to set up his family trust.  You would both set a value the services provided and agree to the exchange.  Just as you would in your normal practice, you would sign work agreements or contracts.  Check with your tax professional regarding any federal or state tax implications.  

The more you take charge of your financial situation, the more successful you will be.  I have found over the years that by focusing on solutions, I will achieve better results in almost any situation.   I hope the above suggestions inspire you to achieve new heights of prosperity in 2013!

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