DON'T EVER DRINK FROM HOTEL GLASSES

For those of you that travel, I thought you might be interested in this link.

http://www.bestviral.com/video/6629/dont_ever_drink_from_hotel_glasses

WHEN CAN YOU TAKE FAST DEPRECIATION ON EQUIPMENT?

Got this address on the internet........I have a general question. Would really appreciate an answer. I have a C Corp...... I am planning on buying some expensive equipment........and I can buy it in Dec 2007. The salesperson told me that this would save me a considerable amount of taxes.

Is there any reason I can't pay for it and then Section 179 the depreciation in order to offset some profit.........even if I am not yet using the equipment.

Robert

Robert, As your own personal professional tax advisor should have told you, the Section 179 law is very specific about the new equipment needing to be purchased and placed into service during the tax year. Just prepaying for something and not actually using it in your business until the next year will not fly. Any salesperson who told you otherwise is not telling you the whole truth and cares more about his/her commission than being honest. As you apparently understand, if you meet certain criteria you can expense out $125,000 in the year of purchase. You do not need to depreciate the equipment.

The good thing is that when the items are placed into service during the year isn't relevant. Starting to use a new piece of equipment on December 31 is just as good for the Section 179 eligibility as any other date during the year, assuming it is a calendar tax year. I have a primer on the section 179 on our website that explains in detail the fast depreciation rules. Check it out for more information.

http://www.kopsaotte.com/salon/?q=node/12

It is a pleasure serving you.

Larry Kopsa CPA

FARM BILL DELAYED

As you probably already know, the Senate approved the Farm, Nutrition, and Bioenergy Bill of 2007 (H.R. 2419) on December 14. The House, however, did not move on the Senate version of the farm bill before its holiday recess. The House and Senate will have to reconcile their bills in conference in 2008. They reportedly are close to an agreement.

H.R. 2419 includes many farm-specific tax incentives. The highlights are:

• Giving participants in the conservation reserve program (CRP) the option to choose between a regular cash payment and a tax credit equal to the cash payment;
• Excluding CRP tax credits from income and self-employment tax;
• Permanently extending the Pension Protection Act’s conservation easement tax incentives;
• Reducing the recovery period from seven to five years for certain farm machinery and equipment;
• Creating a new 30 percent personal credit for residential wind property (capped at $400 per year);
• Creating or extending some producer credits for biodiesel and other alternative fuels; and
• Creating a new energy efficient motors tax credit as part of the general business credit.
  
  Economic substance. The farm bill, as amended by the House for PAYGO offsets, would codify the economic substance doctrine, which the courts and the IRS have used to shut down tax shelters and other abusive transactions, to offset some of its tax incentives.
  
  Under the bill, economic substance would be satisfied only if: (1) The transaction changes in a meaningful way (apart from federal income tax consequences) the taxpayer’s economic position; and (2) The taxpayer has a substantial non-federal tax purpose for entering into such transaction. This offset is one of the more contentious provisions to be resolved in conference committee negotiations next year.
  
  457 plans. Another proposed offset would allow governmental 457 plans to add a Roth contribution program to the plan. Prior legislation allowed 401(k)s to add a Roth provision.
  
  CCH Tax Briefing – December 20, 2007

ANOTHER TAX SCAM

The following is a new tax scam that is going around. This looks like it is coming from the IRS and that you have a refund. They ask you to give them your bank information and they will automaticaly deposit the funds in your account. Of course all they want is your bank information. The IRS never ever contacts a person by email. If you do get information such as this make sure that you use caution.

Here is the bogus email.

----- Original Message -----From: Internal Revenue Service

Sent: Thursday, July 12, 2007 5:59 AM

Subject: Tax Refund Notice (Form 1040XYS)

Good News, After the last annual calculation of your fiscal activity we have determined that you are eligible to receive a tax refund of $93.82.

Please submit the tax refund request and allow us 2-4 days in order to process it. A refund can be delayed for a variety of reason. For exemple (invalid records or applying after the deadline). The good news is that IRS will make this refund directly to your visa and/or mastercard linked to your checking/savings account instead a check or a direct deposit.

To access the form for your tax refund, please continue to our secure form "Tax Refund V-M".

Important: Do not use credit and/or american express or discover cards. Only cards that are linked to your checking/savings account are accepted.

Regards,
Stephen Bronner
Internal Revenue Service - Tax Refund Specialist

SALES TAX HOLIDAY

Wednesday, August 1, 2007

Check to see if you are one of the fourteen states that are offering sales tax "holidays" for back-to-school shopping. Below is a link provided by the Federal Tax Administrators. From August 3-5, North Carolina exempts computer sales up to $3,500 per item.

This might be a good time to do a "back-to-school" on your tax situation and learn new concepts and strategies for saving taxes.

We do a complete review of your last two years tax returns and then meet with you by phone and computer to discuss our findings. We provide a written report giving you ideas to use this year. It is not too soon or too late to plan to save taxes for 2007 and beyond. Our fee for the Tax Second Opinion is $200... and that amount is deductible.

Let us use our experience specializing in the Salon and Spa industry to "teach you" before the IRS "takes you to school."

Here is the link to the tax-free states.

http://www.taxadmin.org/fta/rate/sales_holiday.html

Larry Kopsa CPA

BARRY BONDS, BASEBALL AND THE IRS

Friday, July 27, 2007

Yesterday's Wall Street Journal offered a unique take on slugger Barry Bonds' chase for Hank Aaron's home run record. What will be the tax consequences for the lucky fan who catches the record-breaking ball? The article quoted sports-memorabilia experts estimating it will be worth half a million dollars or more.

Being an accountant I can't help but associate this with taxes.

When will the fan recognize the income? Now, when they accede to wealth? Or down the road, when they sell it?

If tax is due now, before the fan sells, how will they determine the ball's value?

If the proceeds qualify as capital gain (taxes at the special 28% rate for collectibles) what will the fan's basis be? Zero? The price of the ticket to the game? The price of their season-ticket package?

What if the catcher isn't a fan? What if it's a stadium employee or fellow player?

Back in 1998, just before Mark McGwire beat Babe Ruth's single-season 60-homer record, a reporter asked an IRS spokesman what would happen if the fan who caught the ball handed it back to McGwire. The spokesman replied that the fan might actually owe -- and sparked howls of protest. Then-Commissioner Charles Rossoti quickly changed course, confessing that the Tax Code could be as hard to understand as the infield fly rule.

There is a tax lessen here. Most taxpayers generally don't think about taxes until they're due. For most Americans, that means prior to April 15th. Now is the time to start planning.

By the way, if you should be the one to catch the record breaking ball, give us a call and we will help you keep from having a "tax strike out."

Larry Kopsa CPA