Tax Tips and Facts

TAX TIPS AND FACTS

Issue Volume 14, No. 6

As written by Roger A. Kahan, CPA

September, 2000

ROGER A. KAHAN
Certified Public Accountant, Business Advisor and Financier
Serving the tax and financial needs of individuals and small to medium sized businesses
Randolph, MA 02368-1865
VOICE: 781.963.RAK-1 (963-7251)
E-mail: kahan@rak-1.com

Copyright © 2000 Roger A. Kahan, CPA
ALL RIGHTS RESERVED

LD9887-8/00


	Back issues on-line A Little About Roger A. Kahan

TOPICS COVERED IN THIS ISSUE
	Recommendations From Me to You An Award From Smart Computing Can You Answer These Questions? I Just Love Microsoft Cafeteria Plan My Broker/Dealer Laptop Suggestion Tax Equivalent Yield Table Features Wanted Internet Access Certified? The IRS Has Moved We Need Your Support Too Much Inventory is Not Good Why Do I Need a CPA? Lost Money More Lost Money What is Long-term Insurance

*RECOMMENDATIONS FROM ME TO YOU:*
	Whether you are a new client, a client of long standing or a potential client thinking about joining our growing client list, the more I know about you, your family, your business and your tax and investment philosophies, the more I can tailor recommendations to your lifestyle and goals. The next time we speak or we are together, please be sure to fill me in on your objectives and feelings.

AWARD FROM SMART COMPUTING

"The Editors of Smart Computing selected your site as a "Top Site" for our directory based on the overall usefulness of the site. We ask ourselves whether the site provides the kind of content Web users would consider when looking for information in a particular category. We look for breadth and depth of content first, but also take into account the organization and presentation of the information. Is it current? Is the site easy to use? All of these factors contributed to your inclusion as a 'Top Site'. Congratulations!"

We share this award with the following recipients: Deloitte & Touche, Ernst & Young, H&R Block, IRS, Jackson Hewitt, Microsoft, National Tax Association, Smart Money, and The Tax Foundation.

This is a link to Smart Computing's list "Where to Find Income Tax Information."


	Remember, "It's not what you make that counts, it's what you keep."

CAN YOU ANSWER THESE QUESTIONS???

Do you have a plan for financial independence?
When did you last review your entire financial portfolio?
Do you expect any significant financial changes within the next five years?
Do you have savings accounts or investments that create taxable income?
Do you own annuities?
How are you funding your children's education?
What plans have you put in place in case of your death or disability?
Would you like an independent review of your insurance coverage?
If you die tomorrow, will there be any Estate Taxes to pay?
And most important: From whom do you seek professional investment advice?

I WANT TO BE THE ANSWER TO QUESTION NUMBER TEN! As your Principal Financial Advisor, my job will be to help you answer questions one through nine to your satisfaction. My job will be to guide you through the wide array of choices that may best meet your financial goals and needs.

I JUST :-) LOVE :-) MICROSOFT.....

When Bill Gates died, he went up to Heaven, where Saint Peter showed him to his house; a beautiful 20-room house, with grounds and a tennis court. Bill Gates was pleased, and spent many months enjoying the amenities of Heaven.

One day, he was enjoying one of Heaven's many fine parks, when he ran into a man dressed in a fine tailored suit.

"That is a nice suit, my friend," said Gates. "Where did you get it?"

"Actually," the man replied, "I was given a hundred of these when I got here. I've been treated really well. I got a mansion on a hill overlooking a beautiful hill, with a huge 500 acre estate, a golf course, and three Rolls Royces."

"Were you a Pope, or a doctor healing the sick?" asked Gates.

"No," said his new friend, "Actually, I was the captain of the Titanic."

Hearing this made Gates so angry that he immediately stalked off to find St. Peter. Cornering Peter, he told him about the man he had just met, saying, "How could you give me a paltry new house, while you're showering new cars, a mansion, and fine suits on the Captain of the Titanic? I invented the Windows operating system! Why does he deserve better??!!!!"

"Yes, but we use Windows," replied Peter, "and the Titanic only crashed once."

CAFETERIA PLAN

A cafeteria plan allows an employee to choose between cash and certain nontaxable qualified benefits that are not included in income. These benefits include coverage under an employer provided accident or health plan, group-term life insurance, elective contributions under a qualified cash or deferred arrangement, dependent care assistance, and adoption assistance. For additional information or help with the establishment of a cafeteria plan, call our office.

MY BROKER/DEALER

InterSecurities, Inc. (ISI) is an independent broker/dealer located in Clearwater FL with a branch office in Braintree MA. ISI, like other broker/dealers, relies on products that boost growth and serve clients, and look for technological and support services to enhance operational efficiency. Since 1939, Pershing, a division of Donaldson, Lufkin & Jenrette Securities Corporation (DLJ), has provided comprehensive correspondent brokerage execution, clearance, information management, and financial products and services to independent broker/ dealers. ISI has affiliated with Pershing. This opens your financial world through DLJ. I am a Registered Representative with and offer securities through:

Intersecurities, Inc., Member NASD, SIPC
100 Grandview Road, Suite 300
Braintree, MA 02184

781-849-9200.

LAPTOP SUGGESTION
	Leaving your laptop plugged in to the Internet at your hotel room can cost you a lot more than you think. Although you may be hooked up to a local access number, many hotels have started charging by the minute for a local and some toll-free calls. Be sure to call the front desk and find out what it will really cost you to "surf the net."

TAX EQUIVALENT YIELD TABLE

If you are thinking about buying municipal bonds and want to compare the municipal bond rate to a fully taxable bond rate, you can use this table. For example, if the municipal bond rate is 6% and you are in the 28% tax bracket (33.85% in Massachusetts), you would have to earn interest at the rate of 8.33% (9.07% if you are a Massachusetts resident) to earn the same dollar amount of interest after taxes. To follow this sample, look where the two columns come together. In the 6% column, move down to 28% (or 33.85% for Massachusetts) and read the space where the two columns meet.

TAXABLE EQUIVALENT YIELD TABLE
US TaxBracket 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%

15.00% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24%

28.00% 5.56% 6.25% 6.94% 7.64% 8.33% 9.03% 9.72%

31.00% 5.80% 6.52% 7.25% 7.97% 8.70% 9.42% 10.14%

36.00% 6.25% 7.03% 7.81% 8.59% 9.38% 10.16% 10.94%

39.60% 6.62% 7.45% 8.28% 9.11% 9.93% 10.76% 11.59%

US plus Mass Bracket 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%

20.85% 5.05% 5.69% 6.32% 6.95% 7.58% 8.21% 8.84%

33.85% 6.05% 6.80% 7.56% 8.31% 9.07% 9.83% 10.58%

36.85% 6.33% 7.13% 7.92% 8.71% 9.50% 10.29% 11.08%

41.85% 6.88% 7.74% 8.60% 9.46% 10.32% 11.18% 12.04%

45.45% 7.33% 8.25% 9.17% 10.08% 11.00% 11.92% 12.83%

FEATURES WANTED
	We want to feature clients in future editions of TAX TIPS AND FACTS.� If you would like a FREE spot to tell us about your company, its products or services, send a brief story about your company, an overview of company 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.

INTERNET ACCESS

We are 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. For more information about Xensei and high quality web hosting solutions, call me at (781) 963-RAK-1 or Xensei at (888) 740-7007, e-mail info@xensei.com.

TAX TIPS AND FACTS will appear on our World Wide Web page, at http://www.rak-1.com making it available to the rest of the WORLD.

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.


	Planning for the future is a lot like planting a tree. You've got to do it today if you want your family to enjoy it tomorrow.

THE IRS HAS MOVED
	The Internal Revenue Service has shortened its Web site address to www.irs.gov. The agency's old address www.irs.ustreas.gov still works.

Roger A. Kahan is a Certified Public Accountant, Business Advisor and Financier with an office in Randolph, serving the tax and financial needs of individuals and small to medium sized businesses almost anywhere in the United States. And with the advent of the Internet, professional consultation extends to several other countries. Roger is always seeking additional clients and professionals wishing to save money and better manage their own, a friend, a relative or a client's personal or business life. Please let us know if we can use your name in an introductory letter to the prospective client. Thank you.

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.

TOO MUCH INVENTORY IS NOT GOOD
	Carrying too much inventory hurts cash flow. It lowers a company's profitability - and not just because of the money spent to produce all those goods that are sitting unsold on your shelves. Excess inventory also eat up additional warehouse space; boost needs for security, production, and warehouse staff, and require the purchasing of additional hazard insurance (with the resulting cost).


	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.

SELF-EMPLOYED BORROWERS

WHY DO I NEED A CPA?

CPAs do much more than just prepare tax returns and "count beans." A Certified Public Accountant can assist with all of your personal financial planning needs to help you achieve your goals.

Whether you're saving to buy a house, send your children to college or secure your retirement, you need a member of the Massachusetts Society of CPAs to assist you. Roger A. Kahan is an active member of the Massachusetts Society of CPAs and maintains the financial planning licenses and experience to help you.

LOST MONEY

Have you ever moved and simply forgotten about an account or a deposit, only to discover years later that the company holding the funds has turned your property over to the state? Or maybe you received a check and tucked it in a drawer and then forgot about it. Do you have a name that is commonly misspelled? Such clerical errors can cause mail to be returned as undeliverable. And then there is your recently deceased relative. Just how familiar is the executor with the estate?

Each year billions of dollars are turned over to the states by companies throughout the U.S. who cannot locate the rightful owners.

Find out more about the abandoned property laws of your state. Call you state Attorney General or State Treasurer as ask for help.

MORE LOST MONEY

A lot of refund checks were returned to the Internal Revenue Service and the state tax authority as undeliverable by the US Postal Service. These checks could not be delivered because of incorrect names and addresses, or because the taxpayers have moved and did not give the IRS or Post Office their forwarding address. Taxpayers who did not get a federal refund can call 1-800-829-1040 and ask about it.

If you have moved, notify the Internal Revenue Service by using Form 8822 (Change of Address Notice). Send a copy to your state tax agency. Remember to send those forms by Certified Mail, Return Receipt Requested.

BANKS WANT TO LEND MONEY!

WHAT IS LONG-TERM CARE INSURANCE?
	Private, long-term care insurance helps pay for the high cost of nursing home care or of home health care. The average cost for a year's stay in a nursing home is $40,000; the cost is considerably higher in many areas of the country. Long-term care insurance premiums and other costs associated with receiving long-term care are tax deductible as a medical expense (subject to limitations). Call us.

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 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.

ROGER A. KAHAN
Certified Public Accountant, Business Advisor and Financier
Randolph, MA 02368-1865
VOICE: 781.963.RAK-1 (963-7251)
FAX: 781.961.RAK-1
E-mail: kahan@rak-1.com

A member of:
Massachusetts Society of Certified Public Accountants
Massachusetts Association of Public Accountants
Randolph Business and Industrial Commission
South Shore Women's Business Network
Computer Organizations of New England, Inc.
Randolph Chamber of Commerce, Inc.
National Society of Tax Professionals
South Shore Chamber of Commerce
US Financial Advisors, LLC.
National Notary Association
Knights of Pythias


	This page and its contents Copyright © 2000 Roger A. Kahan. Web design and hosting by the The Xensei Corporation.