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Tax Tips Newsletter
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July 2009 - Vol 4, Issue 5
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Greetings!
Linda Head Short 0608

I hope that you and your family had a wonderful 4th of July holiday. It's nice to finally get rid of the June gloom. Enjoy the rest of the summer.

We are working on extensions now. If you need to get your information to us, please meet the following deadlines:

Corporations, S Corporations, LLCs, Partnerships and Trusts - August 1, 2009

Individuals - September 1, 2009

If your returns are on extension, a reminder postcard will be mailed to you by my office in the next several days. Please get your information to us as soon as possible to avoid a rush as we get closer to the due dates.

Mom with 2 kids
As the rules currently stand, up to $3.5 million of an estate's value is exempt from federal estate tax for deaths occurring in 2009. In 2010, the estate tax is scheduled to disappear completely, but just for one year. In 2011, the tax will return with a lower $1,000,000 exemption.

Congress has made it clear that they will not let the estate tax expire even for one year, but the details of what the new exemption amount and tax rates will be have yet to be worked out.

In the meantime, a bit of planning can put you in a tax-saving position no matter what Congress finally decides to do.

Some strategies to consider:

* Many married couples have wills that leave everything to the surviving spouse. This can work well for some people. For others it can mean sizable and unnecessary estate taxes when the second spouse dies. Some simple planning moves can often shield the estate of the second spouse to die from taxation.

* Using the annual gift tax exclusion of $13,000 per recipient can reduce the size of your estate. If your spouse joins in the giving, you can transfer up to $26,000 to any number of recipients during the year.

* Generally, if you own a life insurance policy, the proceeds are subject to tax as part of your estate. Establishing an irrevocable life insurance trust to own the policy can shelter the proceeds from estate tax.

The larger your estate, the more essential planning for taxes will be. If you would like to discuss planning strategies suitable for your personal situation, give us a call.For assistance in filing for an NOL refund, contact my office.
Printing Press
The tax law passed last February included important incentives for business investment.

The law extended the $250,000 limit for the first-year expensing of new or used equipment purchased for use in your business. This deduction is gradually phased out once you purchase more than $800,000 of equipment in 2009.

In addition, brand new equipment, software, and qualified leasehold improvements can qualify for 50% bonus depreciation if placed in service by the end of 2009.

The two benefits can be combined on the same purchase. For example, you can use the expensing option on a piece of equipment and apply bonus depreciation to the remaining cost if the property qualifies.

For details and help in making the best use of these tax breaks in your business, give us a call.
Golden Egg
The Tax Tip this week deals with capturing tax breaks when you refinance.

The Business Tip of the Month deals with hazards when buying a franchise.

The Financial Tip of the Month gives pointers when a Roth IRA is not always the best type of IRA.

The Fraud Alert has to do with lost pet scams.

Photos © Bigstockphotos.com, istockphoto.com

Sincerely,
Linda Heineman
Linda L. Heineman, CPA, CITP

phone: 626-577-0979
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