Bank Failures, Higher Interest Rates To Make Keeping Up With Taxes Harder

Blog July 5, 2023 By Admin

In spite of recent claims that banks are passing stress tests with flying colors, they don’t all agree that they are in as good shape as the Fed has made them out to be.


Continued rate hikes, as well as the potential for more bank failures, may only make it harder for many to keep up with their taxes over the next year.


Bank Of America Predicts Billions In Losses


While the Fed has forecast BofA will enjoy great revenues and few losses, the bank itself is estimating that in just nine months it will have lost over $52B.


This is one of the four largest banks in the country. One that held on during the Great Recession and acquired others. If they go down, then no bank is solid.


More bank failures are bound to mean more massive bailouts funded by taxpayers, who are also losing their money in the process. Not to mention the simple interruption of being able to access your money, which can lead to late payments on bills, and financial penalties for that.


Higher Rates And Living Costs


The Fed is expected to continue hiking rates this year. In turn, that is normally justification for businesses to increase prices, while credit gets much more expensive. Even for things you purchased years ago and haven’t paid off yet.


Rent Controls Versus Declining Rental Income


Rental property owners are especially finding they are wedged between a rock and a hard place.


Recent, very limited increases in rents in NY, while expenses have often tripled are putting a lot of pressure on landlords. One data company also reports that Airbnb hosts are suffering a 50% drop in revenues. While some Hamptons rentals are leasing for half price this year.


All of this makes it tough to keep up with rising tax bills at the same time. So, what can you do?


Quick Tips For Keeping Up With Your Taxes


1. Redo Your Budget


Remake your financial budget. Anticipate the potential for 30% real inflation across all bills in the next year again. As well as accounting for the likelihood of unemployment or a drop in income and lower bonuses, if you’re not an AI developer, or specialize in bank workouts, or work for the IRS.


2. Maximize Tax Deductions


If you have excess money, consider donating for deductions. Apply for any property tax exemptions you should be eligible for.


3. Plan Ahead For Larger Expenses


Plan for bigger expenses, and save for them, rather than borrowing or covering with credit. For example; birthdays, holidays, and vacations.


4. Challenge Your Property Tax Bills


Let Property Tax Adjusters, Ltd, get your property tax bills reduced, and free up more cash for other purposes.