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February 2013 | Volume 10 | Issue 2

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Federal Benefits Payments to Go Electronic

Make the Switch by March 1, 2013

If you currently receive a Social Security check in the mail each month, you will need to choose an electronic payment method by March 1, 2013. The Treasury Department is phasing out paper checks and will now require federal benefit recipients to get their money electronically. There are two options: Direct Deposit to a bank account or a Direct Express Debit MasterCard account. Electronic payments are faster and safer than traditional paper checks. The money is deposited and available on payment day and there are no lost or stolen checks or mail delays to worry about.

To sign up for either option, go online 24/7 at www.godirect.org, or contact the U.S. Treasury Electronic Payment Solution Center at (800) 333-1795, Monday-Friday 8:00 am to 8:00 pm. For faster service when calling, it is recommended to call mid-month, avoiding Wednesdays. You will need to have your 12-digit federal benefit check number and the amount of your last benefit check available. For Direct Deposit, also have the checking or savings account number and the financial institution's routing transit number.

If you are an account holder at First Community Bank and Trust, one of our customer service representatives will be happy to help you make the switch. If you do not choose one of the options by March 1, you may automatically receive your payments via the Direct Express card. If you already receive your federal benefit payments electronically, this change will not affect you.

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First Community Investment Center News

The Fiscal Cliff Deal and Your Taxes

What will change (and won’t change) as a result of the new legislation?

Presented by Clint Squier & Jim Ulman, Registered Representatives | Prepared by MarketingLibrary.Net Inc.

Several tax hikes, some tax breaks. Now that the fiscal cliff deal assembled in Congress is becoming law, it is time to look at some of the tax law changes that will result. Here are the major details in the bill, which will bring significant tax hikes to some households in an effort to increase federal revenues by $600 billion over the next ten years.1

The Bush-era tax cuts will be preserved for at least 98% of taxpayers. Individuals with incomes of $400,000 or less and households with incomes of $450,000 or less will not see their federal income tax rates rise. The EGTRRA/JGTRRA cuts have been made permanent for such earners. 2,3

The wealthiest Americans are looking at a major income tax hike. The top marginal tax rate will rise 4.6% in 2013 to 39.6%. Individuals with more than $400,000 in taxable income and couples with more than $450,000 in taxable income will be affected. This is the first major income tax increase on the highest-earning taxpayers in 20 years. 2,3,4

Now when you take that 39.6% top rate and pair it with the oncoming 3.8% Medicare surtax, what is the impact for the wealthiest taxpayers in dollar terms? It is major. The non-partisan Tax Policy Center calculates that in 2013, households with incomes between $500,000 and $1 million should see their federal income taxes rise by an average of $14,812. What about households with incomes above $1 million? The TPC projects taxes rising an average of $170,341 for these couples and families this year. 3

Practically speaking, all working Americans will see taxes rise in 2013. The payroll tax holiday of the past two years officially ends with the new bill’s passage. In 2011 and 2012, employee payroll taxes were reduced by 2% as an economic stimulus – an idea that came from the White House. In 2013, the payroll tax rate returns to its old level and employees will pay 6.2% in Social Security taxes rather than 4.2%. This tax break saved a worker making $50,000 annually about $1,000 last year. Employee earnings up to $113,700 will be taxed. 3, 4

Estate taxes now top out at 40%. Additionally, the individual estate tax exemption falls slightly to $5 million. Both of these changes are permanent. 4

The AMT has been patched - permanently. Congress no longer has to arrange an annual fix for the Alternative Minimum Tax that was never indexed to inflation. This patch is retroactive to 2012, of course. 4

The Pease provision & personal exemption phase-outs are back. As a result of the deal, 80% of itemized deductions will be eliminated in 2013 for individuals with adjusted gross incomes of more than $250,000 and couples with adjusted gross incomes of more than $300,000. That threshold is also where personal exemption phase-outs will start in 2013. 4

Dividends will not be taxed as ordinary income. Single filers with taxable incomes of more than $35,350 and joint filers with table incomes above $70,700 will see a top dividend tax rate of 15% this year. Dividends coming to individuals making more than $400,000 and households making more than $450,000 will return to the 20% level, 5% higher than they were in 2012. Investors in the 10% and 15% tax brackets will pay no taxes on dividends. 2, 4

The top capital gains tax rate is now 20%. Wealthy investors paid a 15% tax on long-term capital gains and qualified dividends in 2012. That will rise 5% this year. Single filers making more than $400,000 and joint filers making more than $450,000 will face this tax hike. Those in the 25%, 28%, 33% and 35% federal tax brackets will pay 15%, and those in the 10% and 15% brackets will face no capital gains taxes.4
Long-term unemployment benefits live on. They will be sustained through the end of 2013 for roughly 2 million people.2
Another “doc fix” has been made. Drastic cuts in Medicare payments to physicians will be avoided for 2013 as a result of the new legislation. 2

The EITC, AOTC & Child Tax Credit will be extended through 2017. President Obama has long sought to preserve the $2,500 American Opportunity Tax Credit for college expenses, the Earned Income Tax Credit and the Child Tax Credit – and that will occur thanks to the fiscal cliff deal. The $250 deductions for teachers' classroom expenses will also be extended into 2013. 4

50% bonus depreciation is preserved for 2013. The tax break that permits companies to accelerate depreciation schedules for major capital investments lives on for another year. 4

The R&E tax credit & wind production tax credit are both sustained. Both federal tax breaks are available again for 2013. 2

The charitable IRA rollover provision returns. You can practically hear the cheers ringing out at non-profits across the country: thanks to the fiscal cliff deal, people over age 70 will again be permitted to make tax-free transfers from an IRA to a charity, university, or other qualified non-profit organization in 2013. 4

The “sequester” will be delayed 2 months. The automatic federal spending cuts that were set to occur January 2 will be postponed until March while Congress tries to craft a plan to replace them.2
Clint Squier and Jim Ulman may be reached at First Community Investment Center located at First Community Bank and Trust, 708/946-2246.

Citations.
1 – www.npr.org/templates/story/story.php?storyId=168366341 [12/31/12]
2 – www.cnbc.com/id/100348205 [1/2/13]
3 - latino.foxnews.com/latino/politics/2013/01/02/what-fiscal-cliff-deal-means-for-american-taxes/ [1/2/12]
4 - online.wsj.com/article/SB10001424127887323820104578216092043022764.html [1/1/13]

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFGIS Insurance Agency), member FINRA/SIPC. Cetera is not affiliated with the financial institution where investment services are offered. Investments are: * Not FDIC/NCUSIF insured * May lose value * Not financial institution guaranteed * Not a deposit * Not insured by any federal government agency.

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2013 Customer Appreciation

We LOVE our customers! Each and every day we strive to show you just how much by offering high-tech, high-touch products and services coupled with unbeatable customer service. We know you expect an exceptional banking experience each and every time you visit, which is why we go above and beyond in our efforts to exceed those expectations. Throughout the year we will have giveaways and events for our customers to celebrate just that. Here's a tentative schedule:

View the entire 2013 Customer Appreciation Calendar

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Gold Club News

What a Glorious Feeling

Thursday, May 16, 2013 | Theatre at the Center, Munster, IN

Inspired by true events, this dance musical brings to life the tempestuous love triangle behind the scenes during the filming of the beloved movie musical, Singin' in the Rain. The star and co-director (Gene Kelley) is in love with his assistant, who happens to be the ex-wife of his co-director. The show features great songs and dance routines from the film. Important real-life figures are also part of the fun - young Debbie Reynolds and producer/songwriter Arthur Freed. Cost is $65 per person and includes transportation, lunch (Roast loin of pork or lemon chicken breast) and snacks on the bus ride home. Bus departs from Beecher at 11:30 a.m. Reservations must be made by April 15th. Payment must be made with the reservation.

Upcoming Casino Trips

Last chance to sign up for Horseshoe Casino!

Another trip is being planned for April 25 to Four Winds Casino. Enjoy a day on Lake Michigan’s Gold Coast and experience the excitement of the games, shopping and dining at Four Winds Casino. We will have two pick-up/drop off locations, departing from our Peotone facility at 9:00 a.m., and from our Beecher location at 9:30 am and return at 4:00 and 4:30 pm. The cost is $30 ($2 discount for FCBT customers) and includes transportation, refreshments on the bus, a $10 food voucher and a $15 instant slot credit.

Gold Club Dinner

The Spring Gold Club Dinner is planned for Wednesday, May 22. Save the date on your calendar. More details will be provided in upcoming newsletters.

View First Community Gold Club Web Page

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Our Gold Club is for those customers who are 55 years of age or better and have at least $1,000 in any combination of accounts with our bank. Members receive increased rates on CDs, free check offers, two free dinners per year, and much more. First Community Caravan is open to anyone and can be enjoyed by customers and non-customers alike. If you are interested in signing up for our Gold Club or for one or more of our trips, contact Irene Brothers today at 708.946.2246.

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Do You Qualify for a HARP Loan?

What It Is and How It Could Help You Refinance Your Mortgage Loan

Mortgage interest rates are still incredibly low but qualifying for a refinance of your current mortgage may be tricky if you are "underwater" (when your current loan balance is greater than the appraised value of your home). Even responsible homeowners in this situation who have consistently made their monthly payments on time may find it nearly impossible to qualify due to the rigorous standards being imposed on lenders.

There is hope, however, in the form of the Home Affordable Refinance Program (HARP). HARP loans first were introduced in 2009, but have been updated to help boost participation. They address the need for refinancing options for homeowners who, while able to afford their current mortgages, want to lower their interest rate but don't qualify for traditional refinancing due to being underwater.

Read More

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Equal Housing Lender An Equal Housing Lender | Member FDIC

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Eco Challenge #29

Upgrade Your Banking to a New Shade of Green!

With the recent upgrades to First eBanc and First eBiz, our online banking products, there's never been a better time to switch to the greenest way to bank.

Our newest version of First eBanc is loaded with convenient features that make it faster and easier than ever. When you log in you will immediately notice the improved Landing Page and the ease with which you can do all of your online banking. With one click of the mouse you can transfer money, pay bills, view your spending, search transactions, watch educational videos and so much more.

The Landing Page features quick access to the most-used tools, including a QuickPay Zone, which offers First ePay users the ability to quickly pay one bill at a time directly from the Landing Page. Another new feature is Popmoney™. Send, request and receive money directly from your online bank account using a text message or email address. It’s a breeze to sign up and can be accessed from First eBanc (through First ePay).

First eBanc gives you the ability to bank day or night, weekdays or weekends, even holidays! Your account information is at your fingertips whenever you need it, and you can do most of the same things you can do in one of our lobbies. This is truly a powerful banking tool and you can use it for free.

For businesses, First eBiz has also been upgraded. Similar to First eBanc, the Landing Page allows you to access all of your account information and perform your banking transactions from one screen. View account balances, search transactions, quickly pay bills or transfer money, all from the Landing Page. The Favorites pane allows up to 12 accounts to be displayed, giving you quick access to your accounts in any order you like. Have more than one transfer? The Transfer List lets you complete multiple transfers with just one click. And now, you can change or cancel transfers on your own, giving you more power and ease of use.

  • Interested in taking your business online? Contact Karen Burgess today at (708) 946-2246 to discuss the many time saving features of First eBiz.

Whether for your personal banking or business, choose a new shade of green and make the switch to online banking. It will save you time, money and resources.

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