GRAND RAPIDS (WZZM) -- Now that Washington leaders avoided many of the consequences of the fiscal cliff, how should we prepare for future changes to our finances?
Turns out, that's a million dollar question right now.
What we know at this point is what the Senate and now the House have finally agreed upon, a fiscal deal.
The plan includes tax cuts and an extension to unemployment benefits. But there's still a lot of number crunching to do before we find out our fiscal future.
We can say it's not our fault America went off the fiscal cliff, but now it's up to you to turn fiscally responsible with your finances, to avoid your own mess down the road. Even if that road looks a little foggy right now.
"Tune out the noise because we just don't know what the deal is going to look like even today," said Jim Schipper. Schipper is a financial advisor with Grand Rapids-based Schipper & Osterink, and his firms works with 400 clients.
He's been fielding a lot of phone calls lately.
Is it a good idea to leave the stock market? He says, no.
"Continue down the course of having a fully diversifed portfolio, understand your risk," he said. In essense, don't make any drastic changes just yet.
"Most middle class Americans, they might not see a whole lot of change in their tax situation, at all," said Schipper.
The wealthy though, those making more than $400,000 a year, and couples making more than $450,000 will see an increase of almost 4 percent. They represent about 25 percent of his clients.
He's telling clients to pay down debt on real estate, and he offers this advice to those with capital gains:
"Sell those withholdings because capital gains will likely be higher this year," he said.
These are just a few examples. Schipper says depending on what kind of tax hikes affect you, it may be a good idea to max out your IRA and 401k contributions.
"If you could tell me with certainty that tax rates would go up, I would advise all my clients to take out Roth IRA's because you're paying tax rates today at one level and if they go up in the future, that's a good thing because all earnings on those dollars aren't taxed later," he said.
His best advice is to call your financial advisor to see what's right for you.
"Undoubtedly, with everything that's going on in Washington with the fiscal cliff, there are going to be changes, so even though we put a plan in place, January, February 2013, it's very likely by June, things are going to be a bit different," he said.
A more immediate concern is filing your 2012 taxes.
Although the fiscal cliff involves tax rates for 2013, Congress still has to figure out some 2012 issues.
So until a tax policy is finalized, you'll have a hard time filing not just federal, but state taxes.
And that means you won't get your refund early either.