$14,000 Georgia Dream NSP Down Payment Program

Homebuyers should begin planning now to take advantage of Georgia Dream NSP Down Payment Program included in the recently enacted Housing and Economic Recovery Act of 2008 (HERA). The program was created to encourage the purchase of foreclosed properties in Georgia from federal funds received by the Georgia Department of Community Affairs.

The NSP Purchase Program

• Applies to foreclosed homes purchased on or after April 1, 2009 and before June 30, 2010.

• $14,000 is available for eligible borrowers for required repairs and/or down payment assistance

• Funds are disbursed in the form of a second mortgage lien with no interest and no monthly payment

• The lien is released over a period of five years and six months.

• Available in conjunction with FHA and VA loan only.

Homebuyer Qualification

All homebuyers are eligible for the program who purchasing a home as a primary residence who meet the criteria. Buyers are required to complete eight hours of pre-purchase counseling from an approved HUD-approved housing counseling agency. This incentive is not limited to First Time Home Buyers like the $8,000 Tax Credit. If the borrower is a First Time Home Buyer, they can use both the $8,000 Tax Credit along with the $14,000 Purchase Program if they meet all requirements of both programs.

Eligible Counties

The Department of Community Affairs determined the areas of greatest need in Georgia based on requirements of the Section 2301(c)(2) of HERA. All of the counties in the Atlanta Metro areas are eligible. There are several counties not eligible for the program primarily located in south and east Georgia. For a map of all eligible counties, please contact The Bearland Group directly.

Income Limits

There are income limits for the program based on family size and location of the property. The limits are based on the FY 2008 Income Limits for 120% of HUD Median Income. An example of the income limits for a family of four purchasing a property in Fulton County, would be a total household income of $85,450. All household income is used to determine the eligibility even if the spouse or family member is not included on the mortgage. For income qualification of this requirement, please contact The Bearland Group directly.

Purchase Discount Requirements

To be eligible for the incentive, the purchase price must be discounted by 15% of the current market value of the home as determined by an appraisal. An appraisal for the purposes of determining this statutory purchase discount is required.

Recapture

If the property is sold, refinanced or is not occupied as the Borrower’s primary residence during the first five years and six months, a repayment is required based on a schedule ranging from 100% down to 20%. An example, if the property is sold in the 31st month, 60% of the $14,000 would have to be repaid. To read more visit http://www.dca.state.ga.us/housing/Homeownership/programs/gadreamnspdownpayment.asp

The Bearland Group is eligible to offer this program along with 203K FHA loans if repairs are required. For additional mortgage information including free pre-qualification, please feel free to call Stephen Gowen at 770-886-7786 ext 3, or by email at sgowen@thebearlandgroup.com. Their office is located at 407 East Maple Street, Suite 108, Cumming, GA 30040. Website: www.thebearlandgroup.com GA  Discover the

The Bearland Group, We are Distinctively Different!

Award Winning CPA Serving Roswell, Johns Creek and Roswell Advises on How Using Net Operating Losses can Save Thousands

How Using the Services of a CPA can Get You Refunds You Never Expected

Tax Law  has allowed for decades the Net Operating Losses (NOL) of  both individual and corporate taxpayers to utilize losses to legally shelter the otherwise taxable profits of other tax years. This allows taxpayers to receive a tax benefit, and perhaps a refund, on taxable income, which would otherwise would be due. The loss itself is created in a tax year where you allowed deductions are more than your income for the year, thereby potentially creating a  NOL, what can be used to either carry-forward or carry-back. You are able to gain benefit from your NOL from deducting it from your income in another year or years.

Generally NOL losses are generated most often from deductions from a trade or business. Generally speaking a Partnership, LLC, LLP, or S Corporation cannot use an NOL as partners/members/shareholders will receive a K-1 for their respective portion of a loss. There on an owners individual return shareholders will report their proportionate earnings and will determine their eligibility for a NOL on their personal income return/IRS Form 1040.

There are some items are not eligible to be included in the NOL determination. The most common items not allowed to be considered are for any deduction for personal exemptions, capital losses in excess of capital gains, and non-business deductions in excess of non-business income. Non-business deductions, for example that would not be allowed to be considered for calculation purposes include alimony paid or deductions to an IRA or a self-employed retirement plan.

Generally speaking NOL’s for the 2008 tax year must be carry-back the NOL to the two prior tax years (oldest first) and then forward any remaining NOL for twenty years. If you have revenues of less than $5 million for the last three years, then you can elect, if you qualify, for a 3, 4 or 5-year carry-back period. Farming losses can be carried back for five years.

You can chose not to carry-back your NOL by attaching to a NOL tax loss year (for a tax return that was timely filed, including extension) a statement that you chose to forgo the carry-back period under IRS Code Section 172(b)(3). Please be advised that once you make this election that it is irrevocable. You must make the election for all NOL tax years for which you so elect. A timely filed IRS Form 1045 can be used to reflect NOL losses to claim a quick refund or you can use IRS Form 1040X.

It is widely encouraged that all tax elections and tax return preparation be done only by an well-experienced CPA. Tax Law surrounding the Use of Net Operating Losses (NOL’s) for Individuals, Estates and Trusts is covered in IRS Publication 536 can be viewed at the IRS web-site at http://www.irs.gov/pub/irs-pdf/p536.pdf

To read more about John Dillard CPA and his CPA practice, business consulting and IRS representation visit http://www.hiscpa.com/

To read about his books A Voice of One, Overcoming Life’s 9/11’s and Charleston Dawn and his speaking ministry visit http://www.john-dillard.com/

Serving Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond

Atlanta CPA on Understanding Tax Rules for Property Contributions to Charities

Though we all appreciate the value of what we buy and what we can  do for others, the IRS is not as concerned. Charitable giving to charity has long been a deduction that the IRS has allowed when taxpayers, who itemize, prepare their personal income tax return. However it is one of the most misunderstood areas of tax law and one which continually needs clarification.

For purposes of valuing items given to charity, IRS rules do not allow us to consider the original purchase price but rather the present fair market value. A good rule of thumb and another way to look at it might be to evaluate what we might pay for an item, for example, at a flea market. This would not necessarily even be the list price at a garage sale but what at item would actually sell for. For it is when two independent people agree to a sales price in a normal sales environment, can true value be determined.

For example, for a couch, chair and ottoman that you might have shopped and shopped and purchased at a great reduced sales price of $3000 would be worth much less the day they are purchased. Most retail items lose half to two-thirds of their initial purchase price in just a few short weeks/months and then even more if we keep them longer. For example if the same couch, chair and ottoman were later given to a charitable organization (even if in excellent condition) would be valued/worth only a small portion of the original purchase price. In fact, the best way to fairly value property items given to charity would be to ignore the original purchase price altogether and to value items at what they would sell for at a flea market.

There have been many in the news over the years for unduly valuing items well in excess of their true worth. Following these guidelines will do much to ensure that you do not become one of them.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

The Economic Stimulus Plan and Your Business

President Obama’s economic stimulus plan means change — and Paychex is ready. Is your business prepared? Paychex has been monitoring the stimulus plan, as well as several additional economic proposals, to help you understand how they may affect you, your business, and your employees.

What is the Economic Stimulus Plan?

Signed into law on February 17, the American Recovery and Reinvestment Act of 2009 is a plan to grow the economy through tax relief and investments in health care, energy, and education.

What Does It Mean for Your Business?

Paychex has been following several provisions that could have a significant impact on your payroll, taxes, and retirement plans.

Click the links below for more information

• A tax credit for workers, administered through employer payroll. Updated 2/26/09
• Premium assistance, a special election period, and an additional plan enrollment option for COBRA recipients. Updated 2/26/09

What is the Status of Other Economic Proposals?

Beyond the economic stimulus plan, Paychex is monitoring several proposals for economic growth, including:

Click the links below for more information

• A federal minimum wage increase.
• Penalty-free withdrawals from retirement accounts.

A provision to suspend the required retirement plan distribution for those aged 70½ and older was passed in December, 2008.

Are You Ready for What’s Next?

Every year, Paychex monitors thousands of changes in local, state, and federal laws that affect our more than 572,000 U.S. business clients. No matter the outcome of the stimulus plan and other economic proposals, you can be assured that we will continue to take care of the administrative details — so you can focus on running your business.

Keep Up with the Latest Legislation

Please bookmark this page and visit often for the latest updates on the economic stimulus plan, as well as other pending government legislation.

For information about Paychex products and services, please complete our product request form for a no-obligation quote or feel free to contact Martha Jane Walker of Paychex at 678.699.5988.

Any information provided by this website may no longer be viable subsequent to its issuance. Any information it provides is developed at the time of its issuance based upon facts and circumstances known at that time. 

Provide here by John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Atlanta CPA Advises on Completing the Election by a Small Business Corporation and Form 2553

Beginning with the 2009 filing season for 2008 S Corporation Income Tax Returns, the IRS has just made the process easier for those who inadvertently the election late. For years the S Corporation Election, or Form 2553, was to be file within seventy five days of the first day or beginning of the tax year to which a electing corporation desires to make it effective. For example, if you are a brand new corporation who just incorporated on June 1, 2008, then you would have seventy five days from 6-1-08 to make the election. Similarly if you were a corporation that had been a C Corporation for years and would like to be an S Corporation for the 2008 tax year, then under the old rules you would have had to made the election by March 15th or seventy-five days after 1-1-08.

Starting 1-1-08, if you qualify, corporations who neglect to have satisfied the old 75 day requirement can still do so if they qualify. To be an S Corporation you have to:

-Have only Resident Aliens or U.S. citizens as shareholders.

-Generally have a calendar year-end.

-Have less than one hundred shareholders.

-Have one class of stock.

Under the new rules a company desiring to be a S Corporation can elect to do so with the filing of their Corporate Return, Form 1120S, as long as:

-They attach a properly Form 2553, Election by a Small Business Election including the effective date of the election, signed approval of all of the company’s shareholders.

-They attach a reasonable cause for the late election.

-Form 1120S is filed either by the original due date or plus the automatic six month extension, if timely elected.

-None of the shareholders have filed their personal returns showing reflecting that the company is not an S Corporation.

Please note that similar relief is available for an entity eligible electing to be treated as a corporation, such as an LLC converting from a partnership to a corporation for tax purposes.

Generally speaking the IRS will respond to S Election request within sixty days of their original filing. For those not receiving their acceptance on a timely basis you can call the IRS at 800.829.4933. If a company fails to meet the new relaxed filing requirements for S Corporation status, they can still request a Private Letter Ruling and pay a user fee.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

 The National Sales Tax and the Flat Tax Explained by Atlanta CPA

Touted as the great fix to the issues of the IRS, both the national sales tax and flat tax may cause many more problems that they attempt to resolve. There is a lot of confusion in both understanding and compliance with tax law.  Unequivocally our tax system is fraught with layers upon layers of interpretations, case law, and frequent changes that have often left the remaining legislation even more difficult to manage than before.

Over the years there have been many simplification rules that have truly made our tax system easier to understand and apply but items such as the alternative minimum tax, depreciation rules, and automobile expense recording remain impossible for the layman to understand and for the professional to interpret. Often our tax law is so difficult to understand those whose job it is to ensure their compliance are as confused as taxpayers.

Our initial response in life is to “shoot the messenger” and it is to that end that much of the undue criticism has been levied. People often fail to recall that the IRS did not create itself but instead was created over time by our elected officials. Essentially most every, if not every, law was created by Congress and then signed into law by the President. Though certainly we cannot abolish Congress or the Presidency, nor would we want to; we do need to collectively combine our efforts as a people and demand simplification to our tax code. It is only through this means that we will ever have a system that is easier to understand and easier to comply.

By having a system that the majority of citizens view as fair will, we all have an opportunity to have a system that we are all proud of and that works to collect the just and fair taxes from each of our citizens. There is no doubt that all citizens who live in this country and call the U.S. their home should pay their just and fair taxes whether they are here legally or not. It is only by all people participating together and by pulling their own weight can our system obtain true compliance and success.

For Who is Given Much; Much is Expected

If you will look back to the beginning to time, through the time of the Roman Empire, and up until today that a predominant portion of wealth was held by a minority of our world’s inhabitants. In third world countries this discrepancy is even greater. If you were to go back even to the time that Jesus walked the earth, you will find in his teachings that “for who is given much, much is expected.” I believe his teachings make this clear that this applies not only to our talents and skills but also to our financial resources.

Our present tax system is a graduated tax plan, which assesses no income tax on those with little to no taxable income and this slowly graduates upwards with each substantive change/increase in income. Thus a taxpayer in the highest federal income tax brackets will pay a dramatically higher rate than those at the lower income strata. Our system has long held the standard of charging more to those who have more. I believe charging those who are in the upper income brackets, based upon their heightened wealth, should be able and should pay a substantially higher tax in both terms of dollars and percent. If we were to discredit our present hierarchy of taxes with the more affluent paying a higher portion of the overall tax bill needed to run our federal government then the deficiency would have to be made up elsewhere.

Flat Tax

The premise of a flat tax in its utopianism is not challengeable. It sounds great because it is great as it is fair, with everyone paying the same percentage. As all tax systems would have to be revenue neutral in their application and collection, the flat tax would fail for two substantial reasons. First it will not be fair. The affluent people in the U.S. who now control much of the country’s wealth would soon control even more. It is true that everyone would pay the same tax rate as this would be “fair” but this would result in the poorest of our citizenry paying the same tax rate as our country’s richest.

In order for the tax itself to be revenue neutral, the lowest paid taxpayers would take more of a bite economically in terms of both dollars and percent.  Obviously our tax system itself would be easier as people would pay a percent of their gross income, however most of our people would indeed be financially worse off than before if a flat tax ever passed.

National Sales Tax

The national sales tax program, sometimes known as the Fair Tax, has more intellectual appeal as buyers of goods and services would pay a higher sales tax which would replace the federal income tax system we presently now have in place. This also fails on many levels. Foremost is a concern that instead of being a boom to our economy, a bust is much more likely to occur as the products and goods we now buy would be substantially more expensive.

Sure we would have no income taxes being withheld from our paychecks as the IRS as it exist today would be gone, however when goods and services become immediately much more expensive you will face issues such as runaway inflation as people strive to cope and grapple with the inflated values. Also, you will see many of the larger purchases, on which our economy is largely based, come to a standstill as car buyers are shell shocked as the price of vehicles sky rocket because of the new prices. At the least this would cause a major recession and at its worst potentially a depression.

Furthermore, the national sales tax program is supposed to be an asset in making sure all who live and buy here pay their part so that taxpaying citizens are not bearing the burden for those who are either here illegally or do not pay their just taxes. To some degree this intended effect would certainly be attained. However, those who are willing to do a deal under the table to avoid paying taxes would have a much greater temptation and unfortunately a much greater reward if consumer purchases and business dealings were not done in an ethical standard. In fact, the worst fear is that rather than stopping a leak in our economic system, the national sales tax would soon start a series or problematic events. In addition as the most affluent typically spend more in dollars but less in percentage of their gross income, the affluent would again gain more benefit rather than less resulting in the middle and lower class again paying more rather than less in taxes.

At HIS CPA PC we care much more about you than your taxes. As a CPA I remain unconcerned about my livelihood in the event of a change to either a Fair Tax or National Sales Tax for my concern is our people and their right to make just and informed decisions for themselves and their families.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Atlanta CPA Teaches Understanding Georgia S Corporation Returns

If you own your own business and have set up as an S Corporation you are certainly surprised by many of the nuances of Form 1120S for the IRS and Form 600S for the state of Georgia. Like its federal counterpart Form 1120S, the Georgia Form, the 600S, the return is due by March 15th of each year or by the fifteenth of the third month, after the end of the company’s fiscal year-end. Also, as S Corporations are a “flow through” entity the profits or losses of the business show up on a individual shareholder’s personal return. Thus, there are no income taxes paid with either the filing of the IRS’s Form 1120S or Georgia’s Form 600S. However there is a net worth tax which is assessed and paid on the Georgia Form 600S based upon a company’s net book value, which is essentially the combined total of their retained earnings accounts. Returns are filed to the Georgia Department of Revenue.

As part of the Federal 2008 Economic Stimulus package passed Section 179 Depreciation (what taxpayers can write-off in full for fixed asset purchases) was increased to $250,000. As with past years this limit applies both at the corporate and individual shareholder level. The Georgia limit for Section 179 Depreciation, with the passing of the state’s Small Business and Work Opportunity Act of 2007, was increased to $128,000. Thus Georgia Corporations when making the full deduction at the federal level on Form 1120S must make an adjustment to the Form 600S. A complete copy of the federal return should be attached to the Georgia Return prior to filing. If the Georgia Form 600S is amended at the corporate level, there is no separate return and prepares should check the appropriate box on the form to indicate an amended return is being filed. If for any reason a federal return is adjusted, amended or changed due to an audit the corresponding Georgia Return should be amended as well within 180 days of any IRS change. Amendments to Georgia are reported on Form 500X. If any Georgia Corporation does business or owns property within the state then Form 600S and the Allocation and Apportionment of Income schedules should be completed.

If the Georgia Return or Form 600S needs to be extended it can be by filing a Form 7004 with the Internal Revenue Service that Georgia accepts as having been sufficient notice to them. If you are going to owe any taxes with the Georgia Return you will want to pay them via Georgia Form IT 560C by the original due date of the return as otherwise penalties and interest will be assessed on late payment. Keep in mind at all times, that an extension to file, is not an extension to pay.

In general terms the tax imposed and assessed by the state of Georgia is based upon the portion of business income that is reasonably attributable to Georgia sources, property owned and business done in the state. For tax years beginning January 1, 2008 or later the allocation is calculated by using the 100% gross receipts factor.

If you have a non-resident shareholder (an individual owner of the S Corporation who does not reside in Georgia), they are required to attach a consent agreement acknowledging their responsibility to file a individual or personal Georgia Return, a Form 500, to report and apportion their income to Georgia as well as other states where they file individually.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Financial Considerations for Atlanta Georgia Business Owners

For those who own their own business, it’s no secret that personal financial security is very closely tied to the success of the business. And with the never-ending task of overseeing day-to-day operations, owners may find it difficult to focus on broader financial issues associated with running a business. Following is a brief checklist of some of the most important items business owners should consider, along with an explanation of how each fits in the big picture. 

Qualified Retirement Plan.  To help you with the all-important task of planning for retirement — both for yourself and for your employees — a qualified retirement plan allows you to build a portion of your wealth independently from your business. For you personally, such a plan offers several advantages. For one thing, you can reduce your personal taxes by contributing to a retirement plan. In addition, these plans allow for tax-deferred growth on your plan investments that may provide a significant amount for your retirement. 

Aside from the personal benefits, you may also be eligible to receive a business tax deduction for the cost to establish and maintain the plan, and for the employer contributions you add to your employees’ accounts. A good retirement plan will also help attract, reward and keep good employees, which could prove to be a competitive advantage for your business. 

Compensation.  While a qualified retirement plan can be a good start to building wealth for retirement, it may not address all your needs and objectives. In some cases, you may need to provide additional options for the owners or other highly compensated individuals within your business. Though they only apply in limited circumstances, nonqualified deferred compensation plans allow you to address these unique needs through several options. Some plans let executives defer a portion of their compensation, while others let employers provide tax-deferred compensation to this select group.  There are also excess deferral plans for highly compensated individuals who may be subject to contribution limits with qualified plans. 

Beyond the salary and deferral issues, there are several other elements that make up total compensation. You may want to provide life insurance as an employee benefit.  Group term life insurance, individual and group disability insurance and individual and group long-term care insurance are additional benefits that could be offered for employees. In addition, you might consider other benefits such as 529 college savings plans, which can help employees save money to send their children to school. 

Insurance.  In business, you face many risks you cannot control. In that light, it only makes sense to try to reduce the effects of those risks to the extent possible. Remember, one of the most valuable assets of the business is you. For this reason, you should make sure to have adequate life and disability insurance for yourself, in order to provide financial security for both you and your family. 

If the owner of a business or a key employee dies unexpectedly, the business could suffer as a result. Key-person insurance can provide cash to help your business continue operating in difficult times, and it may surprise you how affordable it is to effectively reduce a serious risk to your business. 

While these are just a few of the major concerns business owners face, you may want to take time to consider the many options available to help you address these issues.  A financial advisor can be one key member of your team to help put your finances in order, so that you can spend your time doing what’s most important — building your business. 

The accuracy and completeness of this article are not guaranteed. The opinions expressed are those of the author(s) and are not necessarily those of Wachovia Securities/Wachovia Securities Financial Network or its affiliates. The material is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. 

This article was written by Wachovia Securities and provided courtesy of The Strong Gaddy Lilly Wealth Management Group in Gainesville, GA.  They can be reached at 770-532-6361 or 1-800-332-6361.

Wachovia Securities is the trade name used by two separate, registered broker-dealers and nonbank affiliates of Wachovia Corporation providing certain retail securities brokerage services: Wachovia Securities, LLC Member, NYSE/SIPC, and Wachovia Securities Financial Network, LLC (WSFN), Member FINRA/SIPC.  

Investments in securities and insurance products: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE    

Presented here my Atlanta Christian CPA, Author and Speaker John Dillard CPA who can be reached at www.HisCPA.com or by calling at 770.814.9304

 2009 Year-End Tax Planning

The end of the year is a good time to focus on tax planning and assess your financial status and goals. These strategies may help minimize your tax bill.

Thinking about your taxes will almost always give you a headache, especially around the holidays. But staying on top of your finances as the year comes to a close can mean the difference between owing thousands of dollars in federal taxes and receiving a sizable check from the government in the spring.

Martin Scoll, Vice President of Life Event Services for Wachovia Securities, says it is paramount to start preparing as early as possible. “Good tax preparation and planning starts on January 1,” he says. “Don’t wait until December to start dealing with your year-end planning. Reviewing your finances and giving some thought to your taxes in October and November will not only keep you ahead of the game — it will also likely save you money.”

Here are some tax-efficient strategies to consider as the end of the year approaches.

Review Your Investments

Real Estate. For many people, a home is their best investment. Not only does a home typically rise in value over the long term — it also provides one of the best tax advantages out there, since the interest paid on a mortgage is generally deductible from your federal taxable income.

Stocks and Mutual Funds. Scoll says it is important to give your entire portfolio a review as the year comes to an end. If you have taken a loss from some stocks this year, it might be wise to sell them off before the end of December. Losses in equity markets can be used to offset any capital gains on stocks that have been realized during the year, and any excess losses can offset up to $3,000 of ordinary income, with any remainder carried forward for use in future years.

If you do decide to sell off stocks, make sure to do it before December31, the last day of the year the stock market is open. Getting stuck holding stocks with losses will not decrease your tax bill.

Also, if you are expecting capital gain to be returned from a hedge fund in which you are invested, try to defer that event until the beginning of next year, unless you think the rates will be substantially higher next year

Retirement. If you are receiving distributions from your qualified plan, you can roll over the entire balance or distributions in excess of any RMD (required minimum distribution) into a traditional IRA. If you do this custodian to custodian or within 60 days (subject to limitations), you will not have to pay taxes on those distributions. Be sure to speak with your Wachovia Securities Financial Advisor before setting up the IRA account.

Give Away Money, Increase Your Deduction

Often people donate money in the fourth quarter to increase their tax deductions. “Philanthropy is definitely something to consider,” says Scoll. “But there are limitations to how much you can give to charity and use the deduction.” You should talk to both your tax advisor and your Financial Advisor before embarking on a philanthropic giving plan.

There are also other kinds of gifts you can make to reduce taxes for long-term estate planning. First, you can give up to $12,000 per donor per recipient to family members and others each year without triggering gift taxes. You can also give to your children’s or grandchildren’s education through 529 savings plans. You can gift $12,000 a year to a 529 plan tax-free — or better yet, take advantage of a law that allows you to give a single contribution, covering five years, to a 529 plan. That means you can give a maximum of $60,000 (five years of gifting) per donor per recipient tax-free in one year — and still be able to move that money between heirs’ education funds.

Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 plan..

Additional Tax-Saving Tips

In addition to reviewing your investments, there are other strategies that can help save you money come tax time.

Scoll believes it is always cost-effective to hire a good accountant. “Very often a good tax preparer is going to save you more money than he is going to cost you,” Scoll says. “It pays to have a smart professional help you prepare your taxes.”

While spending some time at year-end preparing your taxes is a smart idea, it’s also a good time to assess your financial status and goals for next year — so that when the end of next year rolls around, your investment and tax planning will already be off to a strong start.

Be Sure to Consider:

• Making the necessary adjustments in your portfolio to help maximize your tax savings this year.
• How you should approach and adjust your IRA to avoid paying unnecessary taxes.
• Gifting money to family members or your children’s education fund to reduce your future estate taxes.

Withdrawals are subject to ordinary income tax and may be subject to a federal 10-percent penalty if taken prior to age 59½.

This article was written by Wachovia Securities and provided courtesy of The Strong Gaddy Lilly Wealth Management Group in Gainesville, GA. You can contact Mr. Michael Gaddy at 770-532-6361.

The Truth about Taxes (by Anonymous)

Let’s put tax cuts in terms we all can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men-the less well off would pay nothing;
The fifth would pay $1:
The sixth would pay $3;
The seventh $7;
The eighth $12;
The ninth $18.
The tenth man-the richest-would pay $59.

That’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement-until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” So now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six-the paying customers? How could they divvy up the $20 windfall so that everyone would get his “fair share?” The six men realized that $20 divided by six is $3.33. But if they subtracted that from every-body’s share, then the fifth man and the sixth man would end up being *paid* to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth. “But he got $7!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got seven times more than me!” “That’s true!” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short! And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

Our tax system heavily depends on the upper class paying a predominant portion of our national operating budget. Let’s all work together to be sure that Tax Re-Allocation does not threaten the very fiber or our free enterprise system. Working together in a bi-partisan way is our best bet to success for American, her liberty and economic success.