Accounting News and Notes

Now that April 15th has come and gone, it is time to dig deep down and pull all of your personal information together.  If you are among the millions who extended the due date of filing their return legally from April 15 to October 15th, you should be in no less of a rush to file and pay all 2007 taxes because:

• A delay to file is not a delay to pay as both the IRS and individual states access a late payment fee/penalty and interest for all monies paid after April 15th
• Now is the time to see what you can begin to do to legally lower your 2008 tax bill rather than being past oriented.  There’s a reason for many success’s of business owners and that is their ability to think and plan ahead.  A good steward is always contemplating what comes next and how to always be prepared.

Tax planning is not for the meek or ill prepared so be sure to get all past filings done today so that you can focus on the success’s and planning for 2008 and beyond.

I believe that in information in the hands of a wise business owner is a wonderful thing. However, that information has to be both timely, informative, and useful. Absent these three factors being fully satisfied then I would suggest changes should be in order.

First: I believe financial should be issue on longer that the fourth workday after the close of a month. Absent their timely relevance, financial’s should not be distributed as much of the cause of their need would have lapsed.

Secondly: I believe that financials should be clear and concise and not uduly culletered with unnecessary accoutns will little or no monies in them or even subaccounts. If an account is not substantive enough to stand on its own merits then it should not exist at all.

Thirdly: And equally as important is that all financials should tell a story but often the subleties and interpetations of their significance can only be adequately expalined or clarified by narratives or substantiating statistics and infromation.

Providing timely and usefuly information is a financial departments primary and most important task and must be achieved in order for the business to both survive and thrive.

Although there has been a general lessening of the lack of rain in recent months, the drought continues and even worsens. To date no substantive proactive directions have been taken to both lessen the use of water, to plan for management of our present resources, and to set up procedures and policies in place to ensure that we do not ever find ourselves in this situation again. We need a public outcry from all citizens to contact their elected officials now to help them know we are not satisfied with our present situation and are determined to see that it does not happen again. We need policies today which stress the vitality and livelihood of people rather than mollusks. Though we always need to pay attention to special interest/need groups we should ever determine that the needs of a few will not outweigh the needs of many. Though we all have rights and valid expectations we should never expect those to be give up or surrendered to others without our consent or valid and wise discernment.

To stay abreast of Georgia’s lake levels you can visit the National Weather Service Forecast Service web site where at http://www.srh.noaa.gov/ffc/html/rrm.php There you can monitor and review lake levels which are updated every twenty four hours, full pool levels, rainfall in the areas listed. Though we often discuss oil as our biggest need and worry, if we were to be honest, we would soon find out that it is water. Also at the National Weather Service’s web-site you can find satellite and radar images, current forecast, and even articles on weather safety. For the sake of all and the continued economic viability of our region we need action today.

Incorporating in Georgia is still the most important decision for all initial business owners. If you have developed your business model, written your business plan, and are now ready to set about the task of actually beginning your business you will want to take care care of this critical tax step. Although you are not indefinitely locked in to a entity choice as an LLC or a C Corporation can elect to be an S Corporation and an S Corporation can become a C Corporation, you initial election is most apt to be the most critical business choice you can make.

While being an LLC or LLP can be most advantages for a law firm or multiple physicians practice, these selections will generally pay more in taxes than an S Corporation as all of their net earnings are subject to FICA/Medicaid taxes while only ones W-2 from an S Corporation would be. I would suggest all multiple physician practices greatly consider the advantages of an LLC or LLP can bring as professional liability statutes allow them to be responsible for professional liability. However a normal tort issue/civil liability cannot be assessed personally so these same concerns will not be of importance to a retail, commercial, wholesaler, distributor, etc. as they would not be subject to professional liability statutes. Real estate ventures are often well suited to considering whether being an LLC,  LLP, or partnership might be in their best interests as you can move real estate both in and out of these entities without any gains being recorded and taxed.

For those looking to consider setting up an S Corporation there are four basic requirements which include being an U.S. citizen or registered alien, having one class of stock, having a calendar year-end, and having less than 100 shareholders. S Corporations continue to be a popular choice among many who do not need/have to be another entity type because of the nature of their operations or needs.

Incorporating is not for the faint of hear so be sure to consult with your CPA to get started as well as periodically to ensure that the entity selection you are presently using is best for you and your business, your tax bill, and legal liability limitation issues.

Congress is working feverishly in conjunction with the White House in an effort to provide a needed kick start to the U.S. economy. Certainly in a recession, and perhaps teetering on a depression our economy is in need of a stimulus to help get consumer and retail goods moving again. In an effort to help get monies into consumer hands the tax rebate act would give most taxpayers from $600 to $1200 with an additional $300 per child. Although many parties varied on the final form the act should include, there was great impetus on both the Republican and Democrat side to see what they might jointly accomplish to get our economy moving. As always it is good to see both parties work together, it is disappointing that more joint efforts to improve our country and world cannot be a consistent point in all of their sessions and dealings.

Now is the time to be pulling together all of the information you will need to prepare your personal return which is due April 15th. Care and due diligence should be exercised to ensure that you have all of the information that you will need to process to prepare both an accurate and timely return. It is recommended that you put all of the information that you will need to prepare your returns in a specific file for preparation of taxes and that you utilize a checklist to ensure that will have all of the information you will need to prepare your returns. The best source of what you will need for this year is a check of your prior years return and then to compare it to any changes that happened during the year such as a new child, starting a new business, moving, or any other expenses/income which will have potential tax consequences. It is always best to list all potential items for a tax review so that they might best apprise of what is taxable and deductible. In this way you are most apt to pick up all of the items you will need to file a just and fair return.

As each every taxpayer is unique it is best to re-visit this list several times annually to stay abreast of what all will be needed by year end. Also, it is well to be reminded that the IRS as well as individual states expect that the taxes due them are due as you earn the money and that otherwise (unless you meet certain very limited exceptions) that late payment will result in additional penalties and interest being assessed. So plan early and plan often so you might avoid the last minute rush and perhaps the filing of an incomplete return.

In an unprecedented move the FED just announced a .75% reduction in the prime rate of lending. This was done in an effort to try to kick life into an already sluggish economy and to strive to keep the U.S. economy from sliding deeper into a recession. Recent economic news for the real estate industry and other sources sent the FED into an emergency session looking to help breathe some life into the marketplace. The Prime Rate of lending is the rate that banks charge their best customers as an interest rate. With the rate reduction in tow, interest payments will fall generating excess cash and hopefully enthusiasm in the marketplace for the already sluggish dollar. Stay tuned for more financial news.

With a general uneasiness over economic news, the housing sector, and the unprecedented turns during the election process, the DOW continues its slide. Peaking at 14,000 plus in October, 2007 the DOW is now lingering in the 12,600 range. I predict that the market will continue to ebb and flow and that the market will continue to soften over at least the first half of this year. As a persistent/consistent investor I believe this is a good time to get into the market and to buy when the market is low thereby maximizing your return when the market recovers. I remain committed to the stock market and believe that it is still a great place to invest for the long haul.

As the primaries continue I believe that some semblance of clarity will be achieved as to who our next Presidential candidates will be. In so doing, I think that this will help quell come of the recent past uncertainties. As always I suggest you work with a Certified Financial Planner to ensure that you invest wisely given your overall portfolio, business, and family needs.

The Internal Revenue Service is working with taxpayers, consumer agencies, and other regulatory agencies to help stop identity theft. Recently scammers have begun to utilize the Internet to steal both your identity and your assets. Fraudulent use of the Internet to steal your identity is called phishing.

Suspicious e-mail is where a scammer uses messages luring potential victims into releasing their confidential personal information which can then be used to steal a victims’ identity. This fishing for information has gained wide popularity recently as fraudsters attempt to gain access to your bank account, credit card, and date of birth information that they can then use to gain access to your personal accounts and even apply for new loans in the victims’ name. The IRS has recently discovered an e-mail scheme whereby phony e-mails are sent pretending to be from the IRS luring the unsuspecting victim by stating they are due a tax refund. To discover sources/examples of items to help protect you from unscrupulous schemes visit:

• Sample of a suspicious/phishing e-mail
• Is it a phishing Web site?
• How to Protect Yourself from Suspicious E-Mails or Phishing Schemes

Stopping Internet fraud of all types is something in which you can take an active role. By turning in Phishing Schemes to the IRS at phishing@irs.gov. There you can follow the links to reporting suspicious e-mails which the IRS will then utilize to trace the hosting Web site and to help shut down fraudulent sites.

Identity Theft can occur through any myriad of ways by stealing of your personal mail, phone and fax records, and the stealing of your trash. Identity Theft is when a thief utilizes your personal data such as your Social Security number or name to commit financial fraud. Usually this type of theft results in a victims’ bank accounts being emptied, obtaining unauthorized credit cards, and even new loans in the victims name. Those who are unduly have their identity stolen often spend untold months striving to protect their credit and their good name. Often the wake of the crime itself leaves victims unable to get loans they would otherwise qualify for and to be harassed for actions they did not commit. You can call the TIGTA toll-free hot-line at 1-800-366-4484 or visiting the TIGTA Web site to report phishing schemes and to report fraudulent misuse of the IRS name and logo. Also you can learn more about what can be done by visiting:

Stopping Identity Theft is something we can all do to help make the Internet as well as our families, homes, and financial future a safe place for us all.

If you build it they will come. The Gwinnett County Government Court system has its own special web site with a plethora of useful information you will want to come back to time and again. By visiting their web site at http://www.gwinnettcourts.com/#home/ you gain great insight into the Gwinnett County Court system as well as many free resources.

Material on how the traffic court process works as well as the magistrate and civil courts can be easily gleamed from the easy to follow prompts. There you can also discover information on Parenting Seminars, Alternative Dispute Resolution, Filing Continuances, Garnishments, and a wide variety of legal forms can be easily downloaded. You can also gain assess to Legal Assistance for Victims, the Sex Offender Registry, Partnership Against Family Violence and many other valuable resources and materials. You can also read about important changes regarding changes which are effective 1-1-08 for handling of child custody changes as well new requirements affecting both parties to a child custody case.