|
TAX TIPS AND FACTS
|
||||
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 © 1998 Roger A. Kahan, CPA ALL RIGHTS RESERVED |
||||
|
You are the person to access this issue!
|
|
| Direct deposit your refund | |
Consider having your refund directly deposited into your bank account. To
do that, you just have to complete two extra lines on your Form 1040. For
a quicker refund, have us file your return electronically with your refund
being directly deposited into your bank account. For a small fee, our
office can take care of electronic filing most US and Massachusetts income
tax returns. We are an "Authorized IRS e-file Provider." Call us!
|
|
|
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. |
|
| ENTREPRENEURS FREQUENTLY ACT ALONE | |
|
The heads of large companies rely on their boards of directors for advice
and counsel. You may find unbiased business advice by forming your own
advisory board of experienced executives. Directors can be expensive and
can be hard to find. A board of di rectors can cost up to $25,000 per
year, not including liability insurance and other fringes. How ver, some
directors work for "small change." If a small business owner is ready to
create his/her own board of advisors (or board of directors), the benefi
ts can quickly outweigh the cost. You may be able to obtain expert advice
without relinquishing any control over policy, compensation and other
operating or management matters. Because a board of directors does not
own the company, they do not force own ers into decisions; they just
attempt to steer them into the right direction. Look to business associates, friends and family members to get your board started. Business owners from non-competing businesses similar in type and size to yours could be great advisors. Look for members with a broad range of business experience.
|
|
| 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. | |
| CERTIFIED? | |
|
Your doctor is certified. Your lawyer is certified. Is your accountant certified? If your accountant isn't a Certified Public Accountant, think twice about where you are getting your advice. Who do you want handling your financial and business matters? If your accountant isn't a CPA, it's time to seek professional help. 
|
|
| WE NEED YOUR SUPPORT | |
|
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.
|
|
|
Remember, "It's not what you make that counts, it's what you keep."
|
|
| MASS UNEMPLOYMENT REPORTING | |
|
You must tell workers who are fired or laid off how to apply for
unemployment compensation insurance. The Department of Employment and
Training has been mailing pamphlets explaining how to file a claim.
Employers who fail to pass out the pamphlets could forfeit the right to
challenge an ex-worker's unemployment insurance claim. Some attorneys are
instructing clients to get a signed acknowledgment from all departing
employees indicating they received the form at the time of layoff or job
termination. I f you do not have the pamphlet, call (617)727-6560.
|
|
| INTERNET ACCESS | |
|
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 23,329 "hits" from as many as 33 different countries. The busiest time was on Mondays from 11:00am to 12:00 noon
|
|
|
Roger A. Kahan is a Certified Public Accountant and business advisor with
an office in Randolph, serving the tax and financial needs of individuals
and small to medium sized businesses. Roger is always looking for more business and individual clients. With the advent of the Internet, fax machine and overnight delivery, our client base now covers many states in the USA. If you know of someone seeking professional tax or business advice, or funds management, please let us know. Also let me know if I can use your name in a welcome letter to the prospective client. Professional or business questions can be addressed, E-mailed or faxed to Roger A. Kahan, CPA at any the above addresses. A response, may appear in a future edition of TAX TIPS AND FACTS. We do accept "a friend" or "anonymous" suggestions or questions, although we reserve the right to edit them. |
|
| TRAVELER'S E-TICKETS | |
|
The Internal Revenue Service has issued a private letter ruling (PLR
#9805007) indicating that itineraries or receipts issued by travel agents
can be sufficient documentation to substantiate business travel where an
airline has issued a paperless ticket. You still have to establish the
amount, date, place and business character of the expenditure.
|
|
| 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. | |
| TAX TIP OF THE WEEK | |
|
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.
|
|
| FEATURES WANTED | |
|
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.
|
|
| EFFECTIVE TAX PLANNING | |
|
Recently, a client complained that he was paying a lot of payroll taxes on
his salary. The bottom line of his business was marginal, and at times
during the year the cash flow was not sufficient to cover the payroll.
What do you do? A review of the sit uation revealed the following: the
client was comfortable with his net weekly check (although he had to skip
one ever-so-often) and was receiving a large refund when filing his
personal income tax returns. The answer was easy. Lower the amount of
taxes withheld each week by filing a new Form W-4 with his employer to
claim additional "exemptions" for excess itemized deductions. Using the
old net pay as a start, work the chart backwards to determine the gro ss
pay. The results were a lower tax liability (about $90 less), and a lower
gross pay, while taking home the same net payroll check. Now he can
afford to take a paycheck every week. He is happy now! This is a part of
effective tax planning.
|
|
| RETIRED INSURANCE AGENTS WIN | |
|
The Internal Revenue Service lost a recent Tax Court case holding that
amounts received by a retired insurance agent as "termination payments"
were not self-employment income because the payments were not derived from
the carrying on of an insurance business. The self-employed tax rate is
15.3%.
|
|
| EFFECTIVE TAX RATES | |
|
Did you know there are 22 "hidden" tax provisions that can create
effective marginal tax rates and increase a taxpayer's actual liability
well beyond the statutorily set rate? Did you know it is possible for the
interaction of the "phaseouts" to create a n excessive marginal tax rate?
Some 25% of all taxpayers will pay an effective tax rate higher than their
tax bracket rate. Responsive tax planning must take account of this
ever-growing discrepancy between effective tax rates and tax bracket rates
as Congress places greater reliance on provisions with phase-outs of tax
benefits to keep budget costs on track. Awareness of effective marginal
tax rates, particularly how the amount of Adjusted Gross Income (AGI)
affects a taxpayer's real rate, is especially important in 1998 because of
Roth conversions and capital gains realized from the stock market run-up.
Thi s additional income can push you into an unusually high AGI level that
is in turn likely to reduce certain tax benefits unexpectedly.
|
|
| EDUCATIONAL IRA | |
|
Question: Can I and all of my brothers and sisters contribute $500 to an
Educational IRA for the benefit of my child? Answer: While the new Tax Relief Act of 1997 permits as much as a $500 contribution, the same mechanism that discourages taxpayers from circumventing the $2,000 annual limit on regular IRAs applies to annual contributions greater than the $500 limit on e ducation IRAs. Specifically, the IRS will impose a 6% excise tax on excess contributions. An excess contribution is the (1) amount by which contributions to all education IRAs for a single beneficiary exceed $500, plus (2) contributions to a qualified s tate tuition program on behalf of the beneficiary. In other words, only ONE $500 contribution can be made for each child, each year. Thanks to WS for this question.
|
|
| IRA WITHDRAWALS | |
|
QUESTION: When do I have to start making withdrawals from my IRA?
ANSWER: The first minimum distribution is made for the calendar year in which you reach 70« . The first distribution does not have to be paid until April 1 of the year following the year you turn 70« . The minimum distribution for any subsequent year must be made not later than the last day of such year. Therefore, if the initial distribution is delayed until April 1, you will have two minimum distributions made in a single year. If you do not take the minimum distribution as called for, you will be subject to a nondeductible EXCISE TAX of 50% on the amo unt by which the required minimum distribution exceeds the distribution actually made. In other words, you must take the complete "minimum distribution" each year, anything less will subject you to the 50% penalty. (From Tax Tips and Facts, January, 1992)
|
|
| TAXPAYER RELIEF ACT OF 1997 | |
|
Did you know a self-employed person paying his/her own medical insurance
should be able to deduct 40% of the premiums for 1997 and 45% in 1998 as
an "above the line" item. Did you know you can directly expense up to $18,000 in 1997 and up to $18,500 in 1998 of the cost of equipment, furniture or fixtures purchased for your business? Did you know you may be able to deduct some of the cost of interest on a student loan paid after 1997 and during the first 60 months for you, your spouse or your children? A recent poll proves that most Americans can't make heads or tails of the Taxpayer Relief Act passed by Congress last summer. It seems that only one in six people have even the faintest understanding of the numerous federal tax law changes made by the law. Even less understand the differences between federal and state tax laws. Tax professionals expect to be hired by many people to prepare tax returns this year. Next year when many of the provisions really kick in, more people will have to hire a tax professional. Please keep in mind one very important point. The Taxpayer Relief Act of 1997 made hundreds of changes that you may never hear about, but any one of them could affect your tax situation.ÿ That's one reason why it is so important to have a "tax review" with a professional from time to time. The other reason is when your circumstances change, for example, when your children become self-supporting.
|
|
|
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. |
|
|
||
|
Web design and hosting by the Xensei Corporation. |
|
