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TAX TIPS AND FACTS
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ROGER A. KAHAN Certified Public Accountant and Advisor Serving the tax and financial needs of individuals and small to medium sized businesses 11 Jeanne Road, Randolph, MA 02368 TEL: (781) 963-RAK-1 (963-7251) E-mail: kahan@rak-1.com Copyright © 1997 Roger A. Kahan, CPA ALL RIGHTS RESERVED |
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You are the person to access this issue!
Best of the Web On October 31, we were informed that our web site was picked as the "Best of the Web" by the editors of Snap! Online. Snap! editors choose Best of the Web (BoW) from the thousands of offerings in a given channel. These are the sites that we tell our friends about and bookmark for return visits. BoW is a designation given to sites that are:
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| THANK YOU | |
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A friendly "Thank You!" for your patronage and for the confidence you have placed in us. We will always
do everything we can to assure complete satisfaction. We are looking forward to many more opportunities
of serving you in the future.
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Taxes, business, funds and management;
rise and fall. If you have a question, give us a call. No matter how big or how small, we can handle it all. |
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| THE NEW CAPITAL GAINS TAX | |
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MK called and asked what he thought was a quick question which should have resulted in a quick answer:
"What is the tax effect of me selling a piece of property now that the new capital gains rates are in
place?" I answered by telling him there was no quick answer to his question.
The October 22 Wall Street Journal states (page 1): "INVESTORS WILL FACE a more taxing job filling out next year's return. Because of extensive capital-gains tax rate changes in the new law, the IRS had to redesign Schedule D, the form investors use to report capital gains and losses. The just released new form has 54 lines. The old form had only 19 lines, plus a separate 13 line worksheet. The IRS says it couldn't complete the new form until now because of ambiguities in the new law that weren't resolved by Congress until recently. Those changes are part of a "technical corrections" bill now moving through the legislature. "Unfortunately," an IRS spokesman says, "the time needed to reprogram the agency's computers to reflect the expected technical corrections means the IRS won't be able to accept electronically filed returns with Schedule D until sometime around mid-February." Schedule D filers who use paper returns and file before the IRS completes its programming may experience "a slight delay" in the processing of their returns, he warns.
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| Many accountants view their goal as minimizing their clients' taxes. NOT ME! I like to see my clients pay more taxes - because their earnings and profits are increasing dramatically. I can make a major difference in achieving those profits. Talk to me and find out more. | |
| BLANK CHECK STOCK | |
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Some clients have asked about blank check stock for printing their own checks. Several companies can
supply you with blank stock acceptable to the banking industry.
If you use blank check stock, PLEASE be sure to store the stock in a locked cabinet or drawer. Restrict access to a minimum number of trusted employees, and have control numbers printed on the back of the stock for added security. Thanks to DMJJ Sales, Inc. for this pointer.
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| WE NEED YOUR SUPPORT | |
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If you like our work, recommend us to a friend. If you are not happy with our work, please call me and
let's talk about it. We will both appreciate it.
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Remember, "It's not what you make that counts, it's what you keep."
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| YEAR-END INCOME & DEDUCTION STRATEGIES | |
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The end of the year is fast approaching. However, there is still time to significantly alter your tax
picture for 1997 and set a winning strategy into motion for 1998. Because of the Taxpayer Relief Act of
1997 and the effective dates of the various provisions, the acceleration or deferral of income and
expenses take on added importance. Some changes, such as the new capital gains tax rates and the home
sale exclusion, are based upon holding periods that must be met to achieve favorable tax treatment.
Other changes, such as the new child credit and the "Roth IRA's" are not available until AFTER 1997 and
their use may be restricted due to the phaseouts based upon adjusted gross income levels. In the
remaining weeks, it is important that you familiarize yourself with some of the options that are
available to shift income and expenses into 1997 or 1998, depending upon how the 1997 tax act affect you.
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| INTERNET ACCESS | |
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We are officially kahan@rak-1.com (that is a "one" and not a small
"L") and an active user of the INTERNET. You can E-mail us from any service connected to the NET. Our
Internet provider is the Xensei Corporation of Quincy. Because of
the information that is available, a subscription to a site on the Internet can be far more valuable than
any individual on-line service. For more information about Xensei and a reasonably priced and easy to
use unlimited-time local internet access, call me or E-mail
info@xensei.com.
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.
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| WINDOWS 95 TIP | |
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Hold down the Shift key when you press the Delete key to delete a file. This will immediately delete the
selected file or folder rather than send it to the Recycle Bin. This works for deleting selected Notes
e-mail as well.
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| No one is required to pay more in taxes than the law demands. If you pay too much, you have less resources to meet your other financial goals. We can help find tax deductions and credits, and help you plan so your taxes will be as low as possible, year after year. And we can also assist you with business and estate tax planning. | |
| MASS. BECOMES INTERNET TAX FREE | |
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Massachusetts lawmakers have finally exempted on-line services from having to collect the sales tax.
They made the law retroactive to September 1, 1990. Now they have to figure out how to give it back to
the customer that paid it. Check with your Internet or on-line provider.
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| FEATURES WANTED | |
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We want to feature our clients in future editions of TAX TIPS AND FACTS. If you would like to have a
FREE spot to sell us on your company, its products or services, simply send us a brief story about your
company, an overview of your company's products and future plans. We may edit the information and
include it in a future edition. Send the information to Roger A. Kahan, CPA via mail,
E-mail or FAX it.
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| IS YOUR AREA CODE CHANGING? | |
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DMJJ SALES, INC. has a special for you. For a limited time, DMJJ allows you to take a 10% discount on
any order of products where only the area code number is changed. To take advantage of this
special promotion, please indicate when ordering that you are placing an area code change reorder and
mention Priority Code 08430. Offer valid until December 15, 1997. Call DMJJ SALES, INC. at
(781)963-5800.
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| BECAUSE GOD KNOWS YOUR KIDS WON'T SUPPORT YOU: | |
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People approaching age 60 should really think about buying long-term care insurance. As an individual
grows older, there is an increased likelihood that they will require long-term care services. Whether
the care is provided in a nursing home or at home, the costs can be staggering.
The Internal Revenue Code provides some tax benefits to individuals who purchase long-term care insurance. Within certain dollar limits, both the premiums paid for a qualified long-term care insurance policy and the cost of qualified long-term care services are treated as deductible medical expenses. Limitations and restrictions do apply.
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| TAX TIP OF THE WEEK | |
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I am now writing a TAX TIP OF THE WEEK that is distributed over the Internet to a select list of people
each week. Some items will appear in the printed monthly version. If you would like to be included in
the weekly electronic distribution, just send me your e-mail address by e-mail, snail-mail, telephone or
fax.
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| MEALS AND ENTERTAINMENT | |
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One-half of the cost of meals or entertainment with customers/clients while discussing business either
before, during or after the meal or entertainment function should be deductible. This includes the cost
of meals, beverages, tips and a reasonable cost of entertainment and must be substantiated with a bill or
receipt, showing the date, place, who was present and the business relationship. It is your
responsibility to keep contemporaneous records to document these expenses.
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| TAX ADVANTAGES OF HIRING RELATIVES: | |
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An individual owning a business (as self-employed, partnership or corporation) can control the flow of
income to family members by placing them on the payroll. If handled properly, the employer gets a tax
deduction for compensation paid and the family member gets taxable cash income, and in some cases, other
economic and tax benefits with little or no tax cost.
As long as the family member actually performs services for the company and the services rendered bear a reasonable relationship to the compensation paid, the employer is entitled to a tax deduction for the compensation paid to the family member. In addition to "income splitting", the family member may also qualify for participation in a company sponsored retirement plan or up to $2,000 in a deductible contribution to his/her own IRA plan.
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| HAVE A CPA ON YOUR TEAM! | |
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Ever since Luca Pacioli founded the accounting profession in the Middle Ages, people have associated
accounting only with numbers. memberS. Members of the Massachusetts Society of Certified Public
Accountants perform services that go far beyond numbers. In addition to the traditional services, today's
CPA can help you develop a business plan, review your software and hardware needs, advise you on
resolving management or other business problems. The list highlights the wide range of services the
modern CPA offers to individuals, small businesses, government, education, and corporations.
Why should you choose a CPA? Massachusetts CPAs must adhere to strict certification and licensing regulations to maintain their license to practice including a minimum level of education in accounting, pass a rigorous two day uniform national exam and have at least three years of experience in public practice. Membership in a professional organization plays an important role. Massachusetts Society of Certified Public Accountants members receive the latest tax and accounting & auditing information from the Society and in addition, they must adhere to our strict ethical standards.
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| ROTH IRA'S | |
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From a reader on the Internet: With the "Roth IRA's" will I be able to make a contribution to 1997
tax year like I can for a regular IRA?
ANSWER: Hi Ryan; First, thank you for reading TAX TIPS AND FACTS. The answer to your question is YES!! Fortunately, if you read the new law a little further, you will see the Roth IRA's are effective for years AFTER 1997. They take it away now, and give it back later.
TTFN,
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| STUDENT LOAN INTEREST DEDUCTION | |
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Beginning January 1, 1998, taxpayers who have taken loans to pay the cost of attending an eligible
educational institution for themselves, their spouse, or their dependent generally may deduct interest
they pay on these student loans. The maximum deduction each taxpayer is permitted to take increases from
$1,000 in 1998 to $2,500 in 2001 and thereafter. There are many restrictions and limitations. If you
think you may qualify for this deduction, be sure to seek professional advice.
Thanks to Mostad and Christensen (a CPA marketing firm) for this reminder.
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| A MARK GLADSTONE JOKE | |
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Last month, I printed what I thought was a Mark Gulko joke and titled it as a Mark Gladstone joke in
error. Mark Gladstone, "SOUTH SHORE'S MOST PROMINENT ATTORNEY," has asked for equal time for his own
sort of humor, (since he didn't recognize the joke in last month's edition of TAX TIPS AND FACTS). Mark
sent me some jokes to consider and told me that some would be unprintable. So, I searched the lists and
found: oops, hmmmm, wow. Gee, I will have to look at Mark's future lists for next month's edition.
Mark, thanks for reading TAX TIPS AND FACTS. BTW, did I quote you correctly?
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| A MARK GULKO JOKE | |
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"As long as there are bathroom stalls, we will never be a PAPERLESS society."
-- Mark Gulko, 1997
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TAX TIPS AND FACTS is published periodically by Roger A. Kahan, CPA. Subscription is free to clients,
prospective clients and friends of Roger A. Kahan, CPA. If you know of someone interested in a
subscription to TAX TIPS AND FACTS allowing him or her to obtain valuable comments on national,
Massachusetts or local tax issues, call (781) 963-RAK-1.
The information contained in this publication has been obtained from sources I believe to be reliable at the time of writing, but I do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation by me of the purchase or sale of any securities or other investment. This material, or any portions thereof, may not reproduced without prior written permission of Roger A. Kahan, CPA. |
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Web design and hosting by the Xensei Corporation. |
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