Monthly Archives: October 2006


If you wait until after the year ends, there is very little if anything that can be done other than finding expenses that you forgot or never knew were deductible.

Now is the time to see if there are ways to minimize your personal income tax or business taxes for businesses with a calendar year end.  Sometimes minimizing income is not the answer.  If you have losses that cause you not to use all your itemized deductions and you have the ability to accelerate income increasing your income may be the correct answer.

Since medical expense is limited to a percentage of income earned, it may be a benefit to bunch up your medical expenses from the current to next or from next year back to the current.

If you will be buying glasses or contact lenses soon, it might make sense to buy them this year if your income is expected to be lower than next year’s income and you have a large amount of medical expenses this year or postpone the acquisition until next year if next year is when your income may be lower and medical expenses higher.

Also, if you have a windfall of income this year you may want to accelerate your charitable contributions for next year this year.

Certain itemized deductions are disallowed for alternative minimum tax (AMT) purposes.  Itemized deductions that are not deductible to reduce the AMT are taxes: state income or sales tax, real estate, personal property, auto excise and other miscellaneous taxes.  In addition to taxes most other deductions including unreimbursed business expenses, dues, tax preparation costs, investment fees, legal fees, etc.

Over the last several years more and more people have become subject to the alternative minimum tax.

Tax planning is as much an art as it is a science.


It is important to know that the IRS never sends unsolicited e-mails to taxpayers. 

These e-mails may look exactly like it might be coming from the IRS; however, the IRS never requests information over the internet to confirm social security numbers, bank account numbers or credit card information.   Be very suspicious, try to determine if the e-mail is coming from another entity.  When non government or financial institutes purport to be either the government or financial institutes they are phishing.  

If you are not sure if this is a legitimate e-mail check the reply address, if it does not appear to have the government name and .gov, or the financial institute’s name, or you are still not sure you should check with (call) the IRS, the government agency or financial institution that supposedly sent the e-mail.  Do not use the telephone numbers in the e-mail; check the yellow pages yourself.

The IRS telephone number is (800) 829-1040.  This phone number can be found in any telephone book or IRS office.  

Your personal identity is too valuable and every effort should be made to keep it private.

 Other places to look for information relating to Phishing are:

Federal Trade Commission (FTC) How Not to Get Hooked by a ‘Phishing’ Scam

Phishing and Pharming

Recognize phishing scams and fraudulent e-mails -Microsoft report

If you want to learn more about phishing scams, perform a search the web “phishing”.


Although most people think that an accountant’s final product, the tax return, is where all the work happens, the fact is the tax return is just the final product.  Determining how the tax return will look and what will be in it is really where the work occurs.  This occurs by Tax Planning.

 Tax planning is a tool that allows taxpayers to potentially and legally minimize their income taxes. 

The IRS’s mission is not to collect the most taxes from each person (although it tends to appear that way).  The IRS’s mission is to “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all”. 

Therefore, each taxpayer has the right to use every tax law available to minimize their income taxes.

In some cases there may be no way to change the outcome of the income taxes.  Even in those cases, it is helpful to know how much money will be owed on April 15th.  In a case where there will be overpayments it may be possible to reduce federal and state withholdings or quarterly estimates. 

There is no requirement to give the government an interest free loan; however, there is a requirement to not underpay taxes either.

Taxplanning involves taking the actual year to date tax information and determine the additional tax transactions through the end of the year and prepare a tax calculation, a expected tax return.

From this expected or estimated  tax return, I can advise my client if they have the ability to control certain transactions, whether to accelerate or postpone income, expenses or equipment acquisitions.

Sometimes the tax planning is calculated to determine the tax that will be due if a certain business assets (buildings, equipment or businesses in general) are sold.

One thing I always explain to my clients, taxes should not be the only reason to determine if an investment should be sold.  The economics of the transaction should be the primary reason. 

An example of this if a stock is owned for less than 1 year (the sale of which would create a short term gain subject to regular income tax rates), should the investor wait until the stock becomes a long term capital gain to obtain the reduced tax rates (Tax Facts About Capital Gains and Losses).

If you are not sure if the investment will maintain its value it may make sense to sell it before it becomes a long term capital gain. 

The results of tax planning can provide advise relative to investment strategies.  Should the investor invest in more growth, municipal bonds or other investments. 

Florida State Tax Change

Florida State Law Changes:

In keeping up with various tax matters, I learned that Florida repealed the intangible property as of January 1, 2007.

The intangible tax is a tax on the market value of mutual fund shares and other investments. The repeal of the tax may also broaden your investment opportunities, so it’s important to review your personal financial and tax plans. Additional information can be located at the Florida Department of revenue. Click here

Small Business Trends

Trend watching is an important part of maintaining and growing a business.  You don’t want to be the last company selling buggywhips or the last to get into internet sales.  The hot trends now seem to be Generation Y spending.  It appears that Generation Y will soon be a major force in the spending world.  In addition, other trends appear to be Green Power issues, Quality of Life and the Internet.  It appears that whenever there is either a new group that is going to be purchasing large quantites of products, small business should look into how they can get a piece of the financial pie.  Whether that be relative to selling on the internet, having a website or gearing up for the wants and desires of a specific group.  Get there before the rest of the world.  Click here for more details Hottest Small Business Trends .

Record Retention Best Practices

While surfing through the Mass Society of CPA‘s website I found a great resource on what are the best practices for small companies and record retention. Check it out here.

Download it here.

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