Reminds me, kids and dh had a quiet week at home - they spent no money. They did things like go to the park and the library. I had asked him if he anything planned and he didn't. I didn't exactly say "don't spend any money," but did say, "Glad you don't have anything expensive planned."

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MORTGAGES

Mortgages mortgages mortgages

A client came in and bought a second home with 3% down. {They can barely afford the first?} Many clients have been requesting pay information for lower income employee's mortgage applications. One I know is a single mom with a $25k-$30k income. I wondered what on earth kind of bank loan this woman was applying for. (Homes aren't exactly affordable/cheap here - nothing that works with that income - not even a condo). Her mom is the office manager and when I talked to her later she said, "I don't think she can afford it - I don't know what she is doing - but she really wants this house." She said what I had already figured as an extremely removed third party. IF it's a house it would have to be $200k+ for anything even remotely liveable, for reference. If she *really wants it* maybe it is even more.

So, yeah, did I mention NOTHING has changed around here? I am sure she was putting $0 down or something like that - like the most of them.

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I did my parents' taxes. Dad is 61 and bummed that this is the first year *ever* that he can not contribute to an IRA. {No Earned Income}.

He had unemployment (paltry) and that was tax-free. All of his capital gains/dividends were tax-free (15% tax bracket). HE did a $50k ROTH conversion that was taxed at 15% - no state taxes (because state does not tax unemployment - no taxable income with deductions). We did good tax planning. When unemployment runs out it will be even better. Well, presuming he still wants to spend the cash to convert.

It will probably be the same the next several years, except he is still hoping to find employment again. But in the interim, no other income and just investments. Social security, IRA distributions and all the like will push up their taxable income *significantly* down the road. I could at least warn them about that. I have a lot of retired tax clients - I bet money on higher taxes down the road.

Reminds me, I wonder if dh's parents did their taxes yet. I am worried they are in for a *huge* tax hit. This was their first year of retirement and MIL seemed to act like they were rolling in it. I glimpsed enough of their finances to see their social security/pension/side work income was very high. I wondered if they were withholding any taxes. Will see. I might get an ear full about it later. Or they may surprise me by being prepared. But the thing is my dad is VERY financially savvy but he didn't even realize social security income is taxed if you have other income. So, if *he* didn't know it, I think it's safe to say that in-laws are in for a surprise. I Was going to talk to them about it but just never did.

Will see...

FIL retired more due to the economy than anything else. Most our entire family was out of work the entire year of 2011. Economy on the rebound? Ha! Frankly it only seems to be getting worse around here. Like I said, the last year my dad went an entire year with no earned income, was *never.*