TAX PLANNING - AN ONGOING PROCESS

Fall, 2009

The 2009 tax filing season is near and as we interview our clients this season, we will try to bring things to their attention that would be helpful in planning for 2010.  We have updated our website, www.grstarbuck.com, to provide more helpful information as follows:

• Tax Tips – These are published weekly with prior tax tips available for viewing.
• Financial Tips – These are updated monthly and again, you can look at prior months.
• Newsletters – View all newsletters to find the topic of interest to you.
• Tax Organizers – We have added our tax organizer to the website so if you are missing a page, you can print it from the website.

Please use our website as a tool throughout the year to answer questions, to provide information, and to help you in your planning process.  When you find an item that you know will be of interest to a co-worker, friend, family member, etc, you can right click to e-mail that page.

IMPORTANT:  AMT change for 2009.  The AMT exemption amount increased to $46,700 ($70,950 if married filing jointly or qualifying widow(er), $35,475 if married filing separately).  In 2008, the exemption was $46,200, $69,950, and $34,975 respectively.  As you know, more taxpayers are being subject to AMT and in 2008, those affected along with the tax consequences will increase substantially.  Middle-income taxpayers and taxpayers with dependents will be hit the hardest.  Items that contribute to AMT liability include exemptions, standard deduction, state and local taxes, interest on second mortgages, miscellaneous itemized deductions.

Retirement Accounts:  Anyone with earned income can contribute to an IRA.  Earnings are tax deferred.  Depending on your tax situation, you can contribute to a Roth IRA or a traditional IRA.  The traditional IRA can be deductible, partially deductible or non-deductible.  Self-employed’s with a profit can contribute to a SEP retirement account as much as 25% of net profit, not to exceed $49,000.

Section 179:  Allows property that is used in business to be fully deductible against profits.  In 2009, the maximum deduction is $250,000.

As U.S. Supreme Court Judge Leonard Hand said, “There are two systems of taxation in our country:  one for the informed, and one for the uninformed.”  To make sure you are informed, review your tax, AMT, retirement, etc. situation on an ongoing basis.  We at G. R. Starbuck & Co. can help.  Give us a call.