Rule of 72
Employment tax deposit regulations
Charitable donations bring big savings
First impressions
The Homesteader
Review your portfolio
Certified?
New publications from IRS
Economic security beyond age 50
Take advantage of compound interest
Why do I need a CPA
Legislative news/current news

The Rule of 72 is an investing rule of thumb that says your savings will double, approximately, in the number of years you determine by doing the following.

1. Start with the number 72.
2. Divide by the interest rate you earn on your deposits.

For example, if the interest rate you receive on your deposits is 7.2 percent, you would double your money in about 10 years:

1. Start with the number 72.
2. Divide by 7.2 to get a result of 10.

Keep in mind that the Rule of 72 does not include taxes or
inflation. Also, the rule assumes that you compound your interest yearly
at a fixed rate of return over a long period of time. If you compound more
frequently, you could save more or double your money sooner.

Investments generate fluctuating returns so the period of time in which an
investment can double, cannot be determined with certainty. This is a
hypothetical example and is not intended to represent a real
investment. Both principal and returns of investments vary over time.

The IRS has adopted final regulations relating to the deposit of federal employment taxes that change the de minimis deposit rule for quarterly and annual return periods. Under the final rules, a taxpayer does not have to make deposits of federal employment taxes for an annual or quarterly return period if the tax for the period is less than $2,500 and the taxpayer remits its full liability with a timely filed return for the period.

Although the new rules are applicable with respect to quarterly and annual periods beginning on or after January 1, 2001, it may still be better for the smaller business to continue making deposits on a weekly or monthly basis. Making more "smaller" deposits could be better than making one "LARGE" deposit with the tax return.

You've probably been approached by a number of charitable organizations suggesting ways you can save tax dollars through the use of planned or deferred giving techniques.

Indeed, much of the revenue of many charities comes from the use of such techniques (which is why they promote them so heavily). However, not all charities have the resources to be able to offer the more sophisticated arrangements. Even those that do might tailor the arrangement more to their needs than to yours in the absence of professional guidance.

A planned or deferred gift is a present commitment to make a gift in the future, either during your lifetime or pursuant to your will. Aside from assuring your favorite charities of a contribution, planned or deferred giving brings with it certain tax benefits.

Note: There are several types of planned and deferred gifts: (1) life insurance, (2) charitable remainder annuity trust, (3) charitable remainder unitrust, (4) charitable income or lead annuity trust, (5) charitable income or lead unitrust, (6) charitable gift annuity, (7) pooled income fund.
Charitable gifts made pursuant to your will reduce the amount of your estate that is subject to estate tax. Lifetime gifts have the same estate tax effect (by removing the assets from your estate), but also might offer a current income tax deduction.

If you have property that has significantly appreciated in value but does not bring in current income, you may be able to use one of these techniques to convert it into an income-producing asset. Further, you will be able to avoid or defer the capital gains tax that would be due on its sale - all the while helping a charity.

TIP: Many variables affect the type of planned or deferred giving arrangement you choose, such as the amount of your income, the size of your estate and the type of asset transferred (e.g., cash, investments, business interests, real estate, retirement plan) and its appreciated value.
Professional guidance is even more important here than in the garden-variety type of contribution program because of the complexity of these gifts. Call us for more information and some of the ways to carry out your gifts.

Did you know we do more than just prepare, compile, and crunch numbers? We are not "bean-counters." We can also advise you on business planning and strategies to meet your goals. As your CPA, we know your needs better than any other professional.

When clients, customers, or any other person telephones your office or business or enters your reception area, is the first person they encounter a gum-chewing employee whose only knowledge about your business is where the rest rooms are or where and when are coffee breaks? A first impression stays with your visitor and is hard to change.

If you think about it, that first impression could be a permanent reflection of your company.

Employees having knowledge about your organization's operations and its benefits should fill those positions.

You can now find additional tax tips concerning home ownership in THE HOMESTEADER, the South Shore's new homeowner newspaper. Tax Tips are now featured in the monthly edition. For a copy, write to The Homesteader, 99 Court St., Plymouth, MA 02360. Mention my name in your request.

By the way, our participation began with the September edition of The Homesteader. This edition was distributed at the annual NEW ENGLAND HOME SHOW held September 22 to 24. Back issues of The Homesteader can be obtained from the same address in Plymouth.

After evaluating your own situation, speak with your financial advisor. We may be able to recommend investments that fit your evolving needs. Call us.

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

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.

The report also emphasizes the heightened problems facing retirees due to healthcare costs. Greater planning by the nation in general, and individuals in particular, is required.

Roger A. Kahan is a Certified Public Accountant, Business Advisor and Financial Services Provider 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

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.

If you save $2,000 per year beginning at age 25, and earn the market's historical average annual return of 11%, you'd have a nest egg of $1.2 million when you retire in 40 years. If you wait until you're 45 to start saving and double your yearly investment, you'd only have $285,000. Pretty persuasive, huh?

This is a hypothetical example for illustrative purposes only and is not intended to represent any specific investment. This example does not consider any costs associated with investing. Investments involve risk and you may incur a profit or a loss. Seeing higher rates of return involves higher risks.

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.

In 1999, the Massachusetts Legislature, under the leadership of Senate President Birmingham, enacted a program to provide certain elderly homeowners and renters (age 65 and older) with state funded relief for their local property tax and water/sewer assessments. Beginning next year (for tax year 2001), these senior citizens will be eligible to receive $375 (increasing to $750 in subsequent years) upon filing a state tax return. The "Circuit Breaker" credit is authorized by the provisions of St. 1999, c.127, s.80, 81 (to be codified at M.G.L. c. 62, s 6 (k).

An important provision of this law is that, in order to receive this credit, those eligible persons must file a Massachusetts tax return beginning in 2002. Many senior citizens are not required to file state tax returns, and may be unfamiliar with the process of filing either paper returns or electronically. They will, undoubtedly, need help calculating their eligibility for the so-called "Circuit Breaker" credit as well.

Thanks to my friends at the Massachusetts Society of Certified Public Accountants for this tip.