• Employer Must Report New Employees
• More Year End Tax Planning
• Too Much Inventory Is Not Too Good
• We Need Your Support
• Mailing Your Tax Returns
• Internet Access
• We Can't Say It Enough
• Peachtree Software Problem
• Features Wanted
• Retirement Plan Highlights
• Tax Tip of the Week
• From The Internet
• Networking Tip
• A Mark Gulko Joke

This issue of TAX TIPS AND FACTS will appear on our own World Wide Web (WWW) page, making it available to the rest of the WORLD. You can find us at (our URL is) http://www.rak-1.com/.

Last month, our Web site had 16,278 "hits" from as many as 31 different countries. The busiest time was on Fridays from 12:00 noon to 1:00 in the afternoon.

KEY FEATURES
Higher deductible limits. Thanks to a higher income ceiling, more of you will be able to deduct the maximum $2,000 allowed for deductible IRAs. Also, more individuals whose spouse is already participating in an employer retirement plan will be eligible for their own deductible IRAs. Penalty-free withdrawals. The IRS 10% penalty on early withdrawals will no longer apply to distributions for first-time home buyer expenses, or for higher-education expenses incurred by the taxpayer, his/her spouse, child or grandchild.

NEW IRAs
Roth IRA. Although contributions are not deductible, earnings in a Roth IRA are tax- and penalty-free as long as they are withdrawn after five years AND after age 59«, or due to death, disability, or to pay or first-time home buyer expenses (up to $10,000). The Roth IRA also permits contributions after age 70« and does not require mandatory withdrawals at that age.
Educational IRA. Through an Education IRA, you will be able to save up to $500 annually per beneficiary (child) to defray the costs of higher education. Although contributions are not deductible, earnings are tax- and penalty-free as long as they are part of a qualified withdrawal that does not exceed school expenses. After age 30, the beneficiary will be required to pay taxes and penalties on any undistributed balance unless it is rolled over for another qualified beneficiary.

HOWEVER, a word to the wise: Some parents and grandparents have provided for future education expenses by setting up UGTMA or UTTMA accounts as custodian for a child or grandchild. This type of account is considered to be owned by the child or grandchild and will be considered in the calculation of government aid (and it is not in your favor).

Remember, their are certain restrictions and limitations. Contact this office if you are thinking about any of the above savings plans.

ANSWER: Kam: Here is the rule. Unfortunately, you cannot sell and buy-back within that 60 day window and still take the loss.
Good luck.

Wash Sale Losses Denied.
A loss sustained upon a sale or other disposition of stock or securities is not allowed if, within a period beginning 30 days before the date of the sale or disposition and ending 30 days after that date, the taxpayer has acquired, or has entered into a contract or option to acquire, substantially identical stock or securities. Similarly, a loss realized on the closing of a short sale of stock or securities is disallowed if within 30 days before or after the closing substantially identical stock or securities are sold or another short sale of substantially identical stock or securities is entered into. The term stock or securities includes contracts or options to acquire or sell stock or securities (except as provided in regulations).

An acquisition by gift, bequest, inheritance, or tax-free exchange that is made within the 61-day period does not bring the wash sale rule into play. The proscribed period is not cut off by the end of a tax year. Also, non-recognition of loss cannot be avoided by arranging for delivery outside the 61-day period since the contract date fixes the date of loss if the obligation to deliver becomes fixed on that date. The wash sale rule applies to all classes of taxpayers, including corporations, except that it does not apply to stock or securities dealers for losses sustained in a transaction in the course of business.

No, Windows is not a virus. Here's what viruses do:

1. They replicate quickly - okay, Windows does that.
2. Viruses use up valuable system resources, slowing down the system as they do so - okay, Windows does that.
3. Viruses will, from time to time, trash your hard disk - okay, Windows does that too.
4. Viruses are usually carried, unknown to the user, along with valuable programs and systems. Sigh... Windows does that, too.
5. Viruses will occasionally make the user suspect their system is too slow (see 2) and the user will buy new hardware. Yup, that's with Windows, too.

Until now it seems Windows is a virus but there are fundamental differences: Viruses are well supported by their authors, are running on most systems, their program code is fast, compact and efficient and they tend to become more sophisticated as they mature.

So Windows is not a virus.

It's a bug.