“Recession” seems to have become the new “Y2K.” In other words, it is the popular catch phrase on everyone’s lips this year as they foretell the catastrophic decline of our society as we know it. All those doom-and-gloomers back in 1999 found that the Y2K problem turned out just fine, and I am optimistic that this recession will as well.
As a recent Duke graduate who has dozens of bright friends still struggling to find jobs, I am acutely aware of the negative impact of the recession. There is no denying the pain it has caused through lay-offs, bankruptcies, and lost opportunities.
However, to put a little more positive spin on things, here are some reasons why the recession maybe ain’t so bad after all:
1) Now is one of the best possible times to make big purchases such as a home or a car, as there are unprecedented discounts and perks included. Builders and dealers are desperate, and their desperation translates into big savings for customers.
2) With the market as low as it is, the smallest of investments now can end up paying off tremendously in the next ten years.
3) There is a vacuum for entrepreneurship. In times like this, it is important to re-evaluate the systems that brought us to where we are today and strive to come up with innovative ways to revive the economy. And, with so many intelligent, talented people who have been laid off, the recession is the perfect opportunity for them to step out of the rat race and re-evaluate how they want to be using those talents of theirs.
4) If you are graduating college and can’t get a job, you can just blame the recession!
It is important for us to accept the recession for what it is and to look with a creative and open-minded attitude at what opportunities it may reveal. What do you think, NSJ readers?
Apparently, the recession hurts less at Walmart. A recent survey of American consumers had some interesting results: people are a lot less interested in shopping than they have been in decades and are turning to discount retailers like Walmart to ease their financial pain.
“This is the first time in 30 years of consumer surveys that we’ve seen this low interest in shopping,” said Britt Beemer, CEO of America’s Research Group.
The principal reason for low discretionary spending is that 48.5% of consumers feel pressure from credit card bills, the survey said.
The change in consumer behavior also has a philosophical basis, said Beemer.
You might expect discount retailers to attract shoppers in a recession. Makes sense, right?
Well an interesting addition to this recession success is that Walmart reported much higher than expect sales in April. Same-store sales, which are often the most reliable indicators of a store’s health, were up 5% in that month. Well, I guess we’ll see you at Walmart (if we haven’t already).
All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service.
“This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax,” said IRS Commissioner Doug Shulman. “I urge all unemployed workers to take this special tax break into account as they plan their tax withholding and quarterly estimated tax payments for the year. This change offers a helping hand to millions of Americans who are out of work and struggling to make ends meet.”
Under the American Recovery and Reinvestment Act, enacted last month, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their tax return next year. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.
The new law doesn’t affect the return taxpayers are filling out now. Unemployment benefits received in 2008 and prior years remain fully taxable.
Unemployed workers can choose to have income tax withheld from their unemployment benefit payments. Withholding on these payments is voluntary. However, choosing this option may help avoid a surprise year-end tax bill or a possible penalty for having paid too little tax during the year. Those who choose this option will have a flat 10 percent tax withheld from their benefits.
Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount. Those unemployed workers who have already chosen to have tax taken out of their benefits, should consider the $2,400 exclusion in determining whether to continue to have tax withheld.
Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end. Form W-4V is also available on IRS.gov or by calling the IRS toll-free at 1-800-TAX-FORM (829-3676).