Dear Friends and Family,

We would like to share this quote from Warren Buffett which appeared in his annual letter to shareholders: “We’ve put a lot of money to work during the chaos of the last two years. It’s been an ideal period for investors; a climate of fear is their best friend.”

On this note, we are still experiencing the fallout from the chaos of the past two years. For instance, as of the end of March, the S&P is still down 25% from the high of October 2007. At that time the S&P was 1562; at the end of March 2010 it was 1169. Sometimes it is difficult to keep things in perspective.

Tax time is fast approaching! If you have not yet made your 2009 IRA contribution, the deadline is April 15th, so don’t delay. If you cannot remember if you made your contribution, please give us a call. You may be able to lower the amount of taxes you pay by taking advantage of some excellent tax breaks available for the 2009 tax year. Tax breaks come in the form of tax credits and tax deductions. A tax deduction directly reduces your taxable income. A tax credit reduces your tax liability dollar for dollar. Here are some tax breaks being offered this year:

• Federal Housing Tax Credit
• Earned Income Credit
• Student Loan Interest Deduction
• American Opportunity Tax Credit
• Making Work Pay Tax Credit
• Energy Star Tax Credit

Visit the official IRS website for details on each tax incentive. Also, do not forget that our fees may be deductible on your taxes—check with your tax advisor. We have found it is difficult to locate this information on Fidelity.com, so please call us and we can email or provide your year-end statement with the fee details.

What’s in the “Bill”? Here is a Health Care Reform Bill summary:

• Coverage: Would expand coverage to about 32 million Americans who are currently uninsured.
• Uninsured and self-employed individuals would be able to purchase insurance through state-based exchanges with subsidies for those with income between 133% and 400% of the poverty level.
• Separate exchanges would be created for small businesses to purchase coverage beginning in 2014.
• Subsidies: Individuals and families making between 100% and 400% of the Federal Poverty Level can receive subsidies if purchasing their own insurance on an exchange. They must not be eligible for Medicare, Medicaid, or employer coverage. Premium credits and caps on contributions will be applied on a sliding scale.

Next month, we will take a look at the cost and how we will pay for the plan.

Sincerely,

Katz Family Financial