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December 2006
Don’t overlook these business tax deductions As a small business owner, you probably don’t need one more thing to do during the busy holiday season. But before you say goodbye to 2006, consider adding this: a search for missing business tax deductions. Where do you start? First, think about the things you use in your daily work life. Are you taking full advantage of the home office deduction rules? If you use a portion of your home exclusively and regularly as your principal place of business, you might qualify. Similarly, the business use of your personal vehicle can be deducted. While keeping track of business miles can be tedious, it can be worth the effort come tax time. Deductions you might not have thought of include the business use of a personal cell phone and the business portion of your monthly Internet access fee. Qualifying meals and entertainment expenses are also deductible, including the cost of entertaining at home — just as long as there is a legitimate business purpose.
Self-employed taxpayers should also remember that 100% of health insurance premiums paid for themselves and their families can generally be deducted from their business income. If you are considering a major business purchase, you might want to act before year-end. In 2006, up to $108,000 of qualifying property can be expensed immediately. (If you operate in a Hurricane Katrina-related Gulf Opportunity Zone, the limit is higher.) One important way to save taxes is to maximize your self-employed retirement plan contributions. Otherwise, you might be leaving money on the table. And certain retirement plan contributions can be made as late as the due date of your return, even with extensions. During this busy holiday season, take time to give yourself a break — a tax break! Call us for a year-end review to help you find those tax deductions you might otherwise miss.
Give financial gifts this holiday season When planning gifts for children on your holiday list, you might want to think beyond the traditional retail offerings. Consider financial gifts that can bestow benefits for many years to come. Some financial gift options you might consider:
Please call us if you would like to review the tax issues related to any of these financial gift options, especially if you are considering a larger amount.
November 2006
Major Tax Deadlines
Do a year-end tax-cutting review for your business Many small businesses and self-employed business owners make the mistake of not thinking about taxes until it's time to file their returns. That's simply too late — most moves must be made before year-end. Here are a few tax-cutting ideas that could help you reduce your 2006 business taxes.
The best way to maximize your business deductions is to meet with us before the end of the year, so give us a call to review your 2006 tax picture. What's New: Stock market hits new high
The big news for stock investors came October 19, 2006, when the Dow closed at 12,000 for the first time in history. The Dow is comprised of 30 major companies and is generally seen as one measure of market activity. You might find it interesting to review Dow benchmarks on the way to this latest all-time high. The Dow was created May 26, 1896, at 40.94. The first close above each level thereafter were as follows: LEVEL DATE 1000……………November 14, 1972 2000……………January 8, 1987 3000……………April 17, 1991 4000……………February 23, 1995 5000……………November 21, 1995 6000……………October 14, 1996 7000……………February 13, 1997 8000……………July 16, 1997 9000……………April 6, 1998 10,000…………March 29, 1999 11,000…………May 3, 1999 12,000…………October 19, 2006
Change and taxes go together A report by the Tax Policy Center reminds us taxpayers that we've had a lot of tax law change to digest over the past 25 years. A major tax law has been passed every two years since 1981, and since 2001 we've had one, and sometimes more than one new tax law every year. 2006 saw two tax revisions — the Tax Increase Prevention and Reconciliation Act and the 900-plus page Pension Protection Act. OCTOBER 2006 Major Tax Deadlines
NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business. Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees' pay and both the employer's and employees' share of social security taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.
What's New: IRS begins using private collection agencies Despite safeguards, the IRS expects scam artists to jump on this chance to extract money from unwary taxpayers. You can expect to see bogus letters, telephone calls, and e-mails, all pretending to be official IRS collection efforts. Here’s what you need to know to protect yourself: Know the rules for claiming dependents
To be claimed as your dependent, an individual must meet five tests: 1. The dependent must be either a relative or a member of your household. Relatives who need not live with you include lineal descendants (children, grandchildren, etc.), lineal ancestors (parents, etc.), stepparents and stepchildren, siblings, in-laws, and (if related by blood) aunts, uncles, nieces, and nephews. People who aren't relatives must live with you all year, except when attending school, going on vacation, or recovering in a hospital. 2. The dependent's 2006 gross income must be under $3,300. However, your dependent children need not meet this test if at year-end they are either under age 19 or under age 24 and full-time students. Nontaxable income (such as social security benefits) is not considered "gross income" for this purpose. If you're supporting your father who receives $10,000 in social security benefits and taxable income of $3,000 in 2006, you may claim him — if he meets the other four tests. 3. You must provide more than half the dependent's support for the year or qualify to claim the exemption under a multiple support agreement. "Support" includes food, lodging, medical care, clothing, education, transportation, recreation, and entertainment. In the previous example, if your father spends $4,000 on his own support and invests the rest of his income, you would meet this test by providing support of at least $4,001. What if you and your sisters support your mother, but nobody contributes over 50 percent? You can claim an exemption for your mother if you provide at least 10 percent of the support, and your sisters and you sign Form 2120, a "multiple support agreement," agreeing to give you the exemption for the year. (You and your sisters may take turns claiming the exemption for your mother, or simply allow the deduction to the individual in the highest tax bracket.) 4. The dependent must be a resident of the U.S., Canada, or Mexico, or be a U.S. citizen or national. 5. The dependent, if married, cannot file a joint return with his or her spouse, unless a joint return is filed just to get a refund for withheld taxes. In divorce situations, the parent with custody of a child for the greater part of the year generally gets the exemption. However, a custodial parent may release the exemption to the other parent by executing Form 8332. Even if you can claim a dependent, you may not get the deduction. Deductions for you and your dependents begin to be phased out when your adjusted gross income exceeds $150,500 if you're single or $225,750 if you are married filing a joint return. Planning will enable you to maximize your dependency deductions. Contact our office if you have questions or feel a review of your dependency exemptions is in order. New Business: Focus on healthy habits to cut health care costs The rising cost of health care is a major concern to most businesses. As insurance premiums and the price tag for medical services increase every year, your company may want to pay more attention to your employees' fitness and eating habits. Some companies are encouraging healthier eating by removing fatty, sugary snacks from vending machines and cafeterias and offering healthier, lower-calorie choices instead. One company subsidizes healthier lunches for its employees, but does not provide the subsidies for unhealthy meal choices. Offering incentives for employees to exercise is another way some companies are trying to combat high health care costs. Even small businesses are finding inexpensive ways to encourage healthier behavior in their employees. Some examples: letting employees attend weight-loss meetings on company premises, paying all or part of fees charged for exercise activities, such as swimming or aerobics, providing on-site health screenings, such as blood pressure and cholesterol checks, and organizing company walks during lunch or organizing team sports, such as softball or bowling.
What's New: New pension law eases rules on inherited retirement plans
The new rule becomes effective in 2007. It's an important change to know about for children, siblings, and other nonspouse beneficiaries of retirement accounts. The law still has strict requirements for these rollovers, so if you need details, be sure to give us a call.
Invest with an eye on inflation
A penny saved? What is a penny worth these days? Do you pick up a penny when you see it lying on the ground? Or do you, like many, consider pennies a nuisance and think they ought to be discontinued? It now costs 1.23 cents to produce a penny, according to the U.S. Mint. High metal costs, combined with production expenses, transportation, and labor, have resulted in penny minting costs rising 27% in the past year. So what's a penny made of? From 1793 to 1837, a penny was pure copper. Then it was switched to bronze and various other metals down through the years. The latest change occurred in 1982 with the penny being made of 97.5% zinc and 2.5% copper.
SEPTEMBER 2006 Major Tax Deadlines September 15 - Due date for individuals to pay third quarter installment of 2006 estimated tax. September 15 - Due date for filing 2005 tax returns for calendar-year corporations that had an extension of the March 15 filing deadline. October 2 - Deadline for businesses to adopt a SIMPLE retirement plan for 2006. NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business. Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees' pay and both the employer's and employees' share of social security taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less. Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fifteenth of the following month. Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid. For more information on tax deadlines that apply to your business, contact our office. What's New in Taxes: In early August, Congress passed a major new law on pension plans. But buried in the fine print were some unexpected tax provisions. Some could affect your ability to claim deductions for charitable contributions. And others change the tax rules for retirement savings. If you make charitable contributions and claim them as itemized deductions, be aware of two changes: * New rules apply to contributions you make by cash or check, regardless of the amount. Starting in 2007, you'll need either a formal receipt from the charity, or evidence such as a cancelled check or an entry in your bank records. Previously, for amounts up to $250, you could rely on your own written records provided they met certain standards. * From now on you can claim a deduction for used clothing or household items only if they are in "good" condition. Unfortunately, the new law doesn't define "good." To back up your deduction, you might want to snap a photograph of the items using your digital camera or cell phone. Print it out and keep it with the receipt. Other changes affect retirement saving. For example, if you change jobs, you might find yourself automatically enrolled in the new company's 401(k). You'll have the ability to opt out, of course, but it's part of a plan to encourage higher participation. The new law also extends the ability to make certain hardship withdrawals from 401(k) plans, and allows active-duty members of the Reserves to make penalty-free withdrawals from IRAs and other plans. If you think these changes might affect you, please contact our office. We'll be happy to provide more information tailored to your specific situation. Take action now to trim 2006 taxes The end of the year will be here before you know it. That means you should put some tax planning on your agenda now. Here are some ideas you might consider to trim your 2006 taxes. * Invest in dividend-paying stocks. Because of the favorable 5% and 15% tax rates on dividend income, holding stocks that pay dividends can reduce your taxes immediately. This might make such investments more attractive than interest-generating securities, such as bonds. * Hold stocks long-term. Dividends aren’t the only type of income given favorable tax treatment. Long-term capital gains are also taxed at a maximum 15% tax rate. So when you decide to sell stocks, bonds, or other investments, remember that meeting the 12-month holding period for long-term gains provides significant tax savings. * Save for your retirement. Make sure to take advantage of the more liberal contribution limits to tax-deferred retirement accounts. By contributing to your employer-sponsored retirement plan, such as a 401(k), 403(b), or 457 plan, you’ll reduce your taxable income, and you’ll defer taxes on the account until you take future distributions. With the 2006 contribution limits raised to $15,000 for most plans, you could slash your tax bill simply by saving for the future. And don’t forget: If you’re age 50 or older in 2006, you can make an additional $5,000 “catch-up” retirement contribution. * Make your home energy-efficient. New in 2006, you may claim a lifetime credit of up to $500 for making qualifying energy-saving improvements to your home. Qualifying expenditures include installation of certain energy-efficient insulation materials, exterior windows and doors, electric heat pumps, and central air conditioning. * Go solar. Also new for 2006, you may claim a 30% credit (with certain dollar limits) for installing solar water-heating, photovoltaic, or fuel-cell equipment in your home. No credit is allowed for equipment used to heat a swimming pool or hot tub. * Buy an energy-efficient car. A tax credit is available for a variety of alternative fuel vehicles. New hybrid vehicles are eligible for a tax credit of up to $3,400, depending on the vehicle’s fuel-efficiency. However, this credit is limited to the first 60,000 vehicles sold this year per auto manufacturer. These are just a few ideas that you should consider to cut your 2006 taxes. Contact our office for a review of tax-cutters to consider in your particular situation. New Business: Roth IRA change important for your company's 40l(k) plan A new rule in 2006 lets 40l(k) plans offer employees the option of designating plan contributions as Roth IRA contributions. The benefit of a Roth is that, though the contribution isn't tax-deductible, qualifying distributions are completely tax-free. Many employers have been reluctant to revise their 40l(k) plans to permit Roth contributions by employees because Roth IRAs were scheduled to end after 2010. Pension legislation signed by President Bush on August 17 made Roth IRAs permanently available. So if your company offers a 40l(k) to employees but you haven't added the Roth option, you might want to reconsider. The new law means Roth 401(k)s are here to stay. What benefits does your company offer? To motivate or reward your employees, consider giving them a tax-free benefit. The cost of certain benefits can be nontaxable to employees and tax-deductible to your business. Offering as many tax-free benefits as your business can afford might also help you hire and retain the workers you need. * Insurance * FSAs * Retirement plan * Other benefits Most of these benefits must be provided equally among all your employees. If you discriminate in favor of certain key or highly compensated employees, the benefits could be taxable to them. For a review of the fringe benefits you might want to offer your employees, give us a call. What's New in Finance: No estate tax change yet The latest attempt to modify the law on estate taxes failed to pass Congress last month. In an effort to make the bill more acceptable, Congress had included an increase in the minimum wage and extension of several expired and expiring tax breaks. Despite these "sweeteners," the bill failed to attract the needed votes. That leaves a confused outlook for estate taxes over the next few years. Currently up to $2 million of any individual's estate is exempt from tax. Above that amount, a top tax rate of 46% applies. The exemption will increase to $3.5 million in 2009, and in 2010 there will be no estate tax. But only for that year. Beginning in 2011, rates and exemptions are scheduled to return to more onerous 2001 levels. Nobody thinks Congress will let that happen. Expect another attempt to pass estate tax legislation in the months ahead. For example, the recent proposal called for increasing the exemption amount to $5 million for an individual, or $10 million for a married couple. Above that exclusion amount, estates up to $25 million would be taxed at the capital gains rate (currently 15%). These numbers may change in any new proposal. Meanwhile, don't ignore estate planning completely. Even if your estate is small, you still need certain basic estate planning documents. These include a will or trust, medical directives, and guardianship directives for your minor children. Make sure these items are up to date and let Congress worry about the tax rates. Are you too invested in your company? It seems that the recent failure of Enron and other corporations did not teach workers the primary rule of investing: diversify your investments. A recent study revealed that workers still hold too much of their company's stock in their retirement accounts. As a general rule, you should avoid being too heavily invested in any one company's stock. When that company is also your employer, your risk of loss increases. A downturn for your company will not only diminish your portfolio, it could adversely affect your next raise or bonus. It might even cost you your job. You may believe the additional risk is okay, because you know your company and its industry. Or you think you'll see problems coming before it's too late. Unfortunately, there's no guarantee that you will detect problems sooner than anyone else. Your company may provide incentives for you to acquire its stock, such as purchase discounts, matching, or stock options. You may feel these incentives are too good to pass up, but keep them in perspective. For example, even a hefty stock discount can quickly disappear in a market downturn, and a discount or other incentive may not be worth the risk of overweighting your portfolio with company stock. If more than 10% of your total investment portfolio is in your company's stock, you may want to reduce your holdings or take other measures to diversify. Don't risk your financial future by putting too many of your "eggs" in your company's "basket." Take a Break Carrying a grudge From Buddy Hackett. . ."Don't carry a grudge. While you're carrying a grudge, the other guy's out dancing."
AUGUST 2006 Major Tax Deadlines
NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business. Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees' pay and both the employer's and employees' share of social security taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.
What's New: After numerous losses in court, the IRS is admitting defeat on the issue of telephone excise taxes. The Service will no longer collect the 3% excise tax on long-distance telephone services. In addition, the IRS will issue credits or refunds of all excise taxes paid on long-distance service billed after February 28, 2003, along with interest. Consider the tax benefits of annual gifts
But each year you can make an unlimited number of gifts free of tax, provided they’re below a certain amount. The limit for 2006 is $12,000 given to any one individual. A husband and wife each have their own separate limit, so they can jointly give up to $24,000 to any one person. Use the annual exclusion You can put the gift exclusion to good use in several situations. For example, you could use a multi-year gifting program to decrease the size of your estate and reduce estate taxes. A married couple giving to each of their three children could reduce their estate by a total of $72,000 every year, for example. You could also use the gift exclusion in an income-shifting strategy. You could make gifts of income-generating assets to your child who is in a lower tax bracket. If done carefully to avoid the “kiddie tax,” the result can be a lower overall tax bill for the family unit. Three types of gifts are exempt from the $12,000 limit. You can make unlimited gifts for tuition expenses or medical expenses on behalf of any person, provided you make the payments directly to the educational institution or health care provider. You can also make unlimited gifts to your spouse. Before you give away money or other assets, be sure you will not need them yourself to provide income in later years. Consider the impact inflation will have on your resources. Planning is essential in this area, so contact us for any assistance you need before making 2006 gifts. New Business:
One study estimated that a paperless payroll could cut costs for a business by 75%. The payroll cards store a dollar value similar to debit cards and can be used to withdraw cash at ATMs or make purchases. Fees for using the cards can make them less attractive to employees, and the drawback to direct deposit is that it’s not an option for employees who don’t have bank accounts
Consider cross-training your employees
You can do cross-training in several ways. At its simplest, you rotate employees to learn different job skills within a department. Or you might move people to different departments for a formal three or six-month assignment before they return to their original position. In some cases, it’s a regular progression of assignments designed to move an employee up the career ladder. How you implement cross-training will depend on the size and nature of your business. Advantages for the company include:
For the employees, the advantages are:
However, cross-training is not without its costs and risks. Managers may resist having to train new employees, and productivity may suffer in the short term. Employees are always nervous about change, and they may be worried about having to learn new skills. It’s critical to think through the goals of your program very thoroughly beforehand. Communication is the key. It’s essential to get everyone involved before you start and to stay involved yourself to deal with problems or issues that arise. A good tip is to start with a small pilot program. You can expand it later as you gain experience. If you are willing to do it right, cross-training can produce benefits for all concerned. What's New:
Even more alarming is the fact that this study did not take into account the “wild card” of medical expenses, a retirement expense that is difficult to estimate and one that could be a major item in people’s retirement budgets. The conclusion that can be drawn from the study is that today’s workers need to save more now if they hope to have a comfortable retirement.
Don't cash out the equity in your home just because it's there
Although instant cash is always tempting, you should think carefully before cashing out the equity in your home. Whether it's a good or bad idea depends on your financial situation and how you intend to use the cash. For example, using the cash to pay off high-interest credit card balances might seem like a good idea. But first you should look carefully at your personal economic situation. If you can't make the loan payments, you stand to lose your home. Before you increase the size of your mortgage, consider your financial situation. Is your job secure, or is there a possibility of losing your job? If you lose your job, how are you positioned to meet your monthly payments? How quickly could you find another job? What if you need to relocate, but you can't sell your home for enough to cover the mortgage? Do you have a cash reserve for unexpected financial emergencies? While refinancing might make sense to lower your interest rate or shorten your loan's term, exercise caution when it comes to cashing out your home's equity. Call us to discuss whether refinancing makes sense in your situation. Telephone tax The 3% federal telephone excise tax was first imposed in 1898 to raise money for the Spanish-American War. At the time, only the wealthiest Americans had telephones, and the tax was considered a luxury tax. Since 1898, the IRS has collected more than $90 billion from the telephone tax.
JULY 2006
Manage your income to maximize tax benefits What do the following have in common: itemized deductions, personal exemptions, child tax credits, student loan interest deductions, and Roth IRA contributions? The answer is that they’re all reduced or There are many deductions, credits, and other tax breaks that depend on your AGI level. When you begin to lose these deductions and credits as your AGI increases, you’re effectively increasing your tax rate. Deductions affected by AGI include those for medical expenses, casualty losses, job expenses, IRA contributions, student loan interest, and total itemized deductions. Credits affected include the adoption credit, dependent care credit, child tax credit, earned income credit, and various education credits. An important part of tax planning is managing income to minimize the loss of these tax breaks. There’s still time for 2006 planning to preserve tax deductions and credits. Here are some suggestions. To find out more about minimizing your AGI and maximizing the tax deductions and credits you’re allowed to claim, please give us a call.
Cell phones have made it easier for business people to communicate, but they are not always a plus in the work environment. A recent survey by Randstad USA, a staffing company, revealed that about a third of employees considered ringing cell phones at work to be their number one pet peeve. Cell phones are becoming enough of a drain on productivity that more and more employers are banning them at work. Even more of a concern to employers is the liability issue connected with cell phones. There is the potential for exposure when employees cause traffic accidents while driving and talking on cell phones.
Map out a plan before opening for business
A business plan is a map, your company’s written guide into the future. Not only does a good plan let you know where you are and where you’re headed, it provides potential lenders and investors with a portrait of your company. For new businesses, the written business plan helps in the start-up process. It provides a clearer understanding of the business and its goals. Often, businesses spend a lot of time and money on product development, equipment, and marketing — without analyzing the feasibility of the basic business idea. Writing a business plan gives you a better understanding of your ideas. It allows input from others before wasting time and resources. Each plan will differ, but certain items are essential.
Most business plans fail because they lack detail. A well-developed plan gives a new company immediate respect in the eyes of lenders, not only because it shows you to be thorough and far-sighted, but because lenders rarely see good business plans. Wayne Gretzky, when asked the reason for his success said, “Some people skate to where the puck is. I skate to where the puck is going to be.” A good plan should help you do the same for your business.
JUNE 2006
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The amount increases to $97,500, up from $94,200 for 2006.
If you can name the two new tax bills passed by Congress this year, you might be a master of trivia. But there is nothing trivial about the Tax Increase Prevention and Reconciliation Act and the Pension Protection Act. These laws could have an impact on your taxes.
The IRS has issued the 2007 standard mileage rate that businesses can use to calculate the deductible costs of driving an automobile for business. 
Finding one of these deductions might give you real tax savings.
Did you know you may qualify for an extra refund when you file your 2006 taxes? And if you qualify, you can claim the refund by filling out just one extra line on your 2006 tax return.
1. Organize your finances. Get a handle on your income and spending. How much are you really spending on those dinners out? Many widely available financial software programs can help you track finances and provide insight into your spending habits. By reviewing how you spend money, you can focus on potential problem areas.
A 2004 tax law authorized the Internal Revenue Service to use private collection agencies to assist with the collection of taxes due the government. By the end of this year the IRS will have turned over about 40,000 taxpayer files for such collection.
You are allowed a tax deduction of $3,300 for each dependent this year. Therefore, knowing who qualifies as your dependent could cut your tax bill.
Businesses are cheated out of millions of dollars every year with invoices for goods or services that were never delivered. Phony invoices once paid often will be followed by additional billings for publications, services, or supplies not delivered. Such schemes are successful because many businesses have slipshod procedures for approving and paying bills.
If you inherit a retirement account from someone other than your spouse, you will soon be able to roll over the account to an IRA, an option that can save significant taxes. Prior to the recently enacted Pension Protection Act of 2006, rollovers of inherited retirement funds were permitted only for spouses. 
Like the boy who cried "wolf," experts' warnings of inflation have been largely ignored over the last decade. Inflation, even at modest levels, can seriously reduce real investment return. Is your portfolio structured to succeed in periods of inflation? Consider these fresh ways to combat an old foe.
Did you know that this year you can give gifts of up to $12,000 to as many individuals as you want without being liable for gift tax? Normally, the gifts you make count towards your lifetime exemption from gift and estate taxes. That’s so you don’t just give away your estate shortly before death to avoid estate taxes.
Companies looking for ways to cut costs might want to consider this new idea: Instead of issuing paper paychecks, pay employees with payroll “plastic cards” or with direct deposit to the employee’s bank account.
Have you considered cross-training your employees? Cross-training, or job rotation as it’s sometimes called, can be a win-win situation for you and your employees. Large companies often use it to prepare managers for high-level corporate positions. But it can be equally useful for employees on the shop floor or in general office positions.
A new study done by the Center for Retirement Research at Boston College revealed that 43% of working Americans are probably not going to have enough retirement funds to maintain their current standard of living. The study assumed that retirees would need 65% to 85% of their pre-retirement income to maintain the same living standard.
With today's low interest rates, homeowners have been flocking to refinance their mortgages. But instead of reducing their payment by the maximum amount, many have increased the size of their mortgage to tap into the home's equity. Part of the new loan pays off the old mortgage, and the remainder is paid in cash. These "cash-outs" have accounted for well over half of all refinancings in recent months.
eliminated when your adjusted gross income (AGI) reaches certain levels. For example, this year couples begin to lose the full benefit for child tax credits when their AGI reaches $110,000. Other deductions and credits begin to phase out at even lower levels.
Taking a trip without a map may get you lost, and trying to run a business without a plan is likely to have the same result.
The high price of homes and rising interest rates have brought a new financing option to the marketplace — the 50-year mortgage. Available currently from only a few lenders, the 50-year mortgage is intended to help those who otherwise could not afford to buy a home because of high monthly payments.
401(k) account. The total amount that you can contribute is substantial ($15,000 for 2006; up to $20,000 if you’re 50 or older). In many cases, your employer matches a portion of your contributions. These funds avoid current income taxation and are allowed to grow tax-deferred.