Monday, December 29, 2008

IRA CONTRIBUTION

Larry, I am 63 and plan on retiring at the end of the year. Can I still make an IRA contribution for 2008? Henry

Henry, the answer is yes. For the 2008 tax year you can contribute $5,000...that is assuming that you have earned $5,000. In addition, since you are over age 50 you can add an additional $1,000 for a $6,000 total. It does not matter when during the year you retire so long as you meet the compensation requirement. But you can no longer contribute to an IRA after you reach age 70 ½.

It is a pleasure serving you.

Larry Kopsa CPA

Wednesday, December 24, 2008

FIVE REASONS WHY THE ECONOMY MIGHT RECOVER FASTER THAN YOU THINK IN 2009

Here is Some Optimistic News

(U.S. News & World Report) -- There are a number of reasons to think that the economy might, just might, shift back into gear faster than most of us think or hope. One is plunging oil prices. Now they're below $40 thanks to slowing global demand. At the same time, gas prices have plunged from over $4 a gallon to around $1.67 nationally. (And some analysts think they're heading to a buck a gallon.) JP Morgan Chase economist James Glassman estimates that the drop in oil prices represents "a boost equivalent to a $350 billion stimulus." Another reason is falling mortgage rates. Rates for a 30-year, fixed-rate mortgage fell to a low, low 5.19% last week. That should help housing affordability and the ability of current homeowners to refinance their mortgages. Other reasons are the actions by the Federal Reserve, which has made it clear that the Fed will buy various debt securities to unfreeze the credit markets, and President-elect Obama's stimulus plan, as the new Democrat-controlled Congress will likely spend somewhere between $750 billion and $1 trillion over the next two years to boost the economy. The final reason is America's deep fundamentals. Overall, the core U.S. economy is in far better shape than it was in the 1970s, with a higher productivity and a better tax and regulatory system. Even though the U.S. economy finally succumbed to the oil shock and the credit crisis in 2008, it held up longer than many predicted thanks to its deep strengths. Who knows, maybe it will surprise the bears again in 2009.

Monday, December 22, 2008

TEST TIME

This Math test can predict who can give you the best information to help you to be more profitable. Try it without looking at the answers...No cheating!

Ok get your fingers at the ready.....Pick a number from 1-9.....times this number by 3.....then add 3.....then times by 3 again.....You should have a two digit number.....Add these two numbers together.....You then should be left with a single digit number which will tell you who your best business advisor is.

1. The IRS
2. Your banker
3. Your neighbor
4. Your bartender
5. The federal government
6. Your brother in law that has made every mistake imaginable
7. Oprah
8. Your insurance guy
9. Kopsa Otte CPA’s and Advisors :>)
10. Your momma

Friday, December 19, 2008

DEAR PRESIDENT ELECT OBAMA,

Taxing small business will not fix the healthcare crisis.

When it comes to addressing the nation's healthcare crisis, there is a right way and a wrong way to implement change. Unfortunately, many public officials think the easiest way to reduce the number of uninsured Americans is to require employers to contribute toward their employees' healthcare costs. These types of proposals are often referred to as employer-responsibility initiatives or "pay or play" legislation.

As small business owners struggle to stay afloat during difficult economic times, it's unfortunate that some elected officials choose to burden our nation's job creators with more costs they likely can't afford. The reality is that these types of proposals, which set a dangerous example are gaining support in statehouses, cities and courthouses across the country.

HERE IS WHAT'S HAPPENED IN SAN FRANCISCO

Recently, the 9th Circuit Court of Appeals ruled in favor of San Francisco's healthcare security ordinance, which requires employers with 20-99 employees to pay $1.17 per hour per employee for healthcare costs. Employers with 100 or more employees must pay $1.76 per hour per employee. These rates will increase in January 2009 to $1.23 and $1.85 respectively, and will continue to increase annually.

Employer healthcare payments can be made either to the employee through at traditional employer-sponsored plan, directly to employees as reimbursements for healthcare costs or to the city to fund its Health Access Program.

Thursday, December 18, 2008

TAX REMINDERS

Here are our final tax reminders for this year to help you avoid problems:
  • If you have a flexible spending account balance you must clean it out by Dec. 31 if your employer still has not adopted the 2½-month grace period which is now permitted by the IRS. If your employer has not made the change, any money left in your flex spending account is forfeited.
  • Mail checks for deductible items before year end to ensure a 2008 write-off. You get to claim the deduction this year even if the checks do not clear until January.
  • Make sure you know the rules if you are charging deductible items.
  • For charges that you make with a retail store credit card, you are allowed to claim the deduction for the item only in the tax year in which you pay the bill.
  • For transactions made with a bank credit card, you take the deduction in the tax year that you charged the goods, even though you pay the bill next year.
And our final suggestion for this year:

  • Have a happy holiday season!

The income tax forms will start to arrive in mailboxes in less than three weeks.

Wednesday, December 17, 2008

JOE THE PLUMBER

I don’t know how I had missed the following joke during the election season, but thought that you might enjoy. It is about applying the tax policy change philosophy to plumbing bills.

Barack Obama discovers a leak under his sink and calls Joe the plumber to come and fix it.

Joe drives to Obama’s house, which is in a very nice neighborhood where it’s clear that all the residents make more than $250,000 per year (or $200,000 per year or $150,000 per year, depending on who’s speaking and when).

Joe arrives and takes his tools into the house. He’s shown the room that contains the leaky pipe under the sink. Joe figures it’s an easy job that will take less than ten minutes. Obama is standing near the door and asks Joe how much it will cost.

Joe immediately says, “$9,500.”

“$9,500?” Obama replies stunned. “But you said it’s an easy job!”

“Yeah, but what I do is charge a lot more to my clients who make more than $250,000 per year so I can fix the plumbing of everybody who makes less than that for free,” responds Joe.

Obama tells Joe there’s no way he’s paying that much, so Joe leaves.

A week later the leak gets so bad that the Obamas have had to put a bucket under the sink, and it fills up every two hours, so they call Joe back. Joe goes back to the Obamas’, looks at the leaky pipe, and says, “It’ll cost you about $21,000.”

Obama exclaims, “A few days ago you told me it would cost only $9,500!”

Joe explains, “Well, a lot of rich people are learning how to fix their own plumbing, so there are fewer of you paying for all the free plumbing we’re doing for the people who make less than $250,000 - and I refuse to charge the lesser income people for plumbing work.”

Obama tries to straighten out Joe. “But don’t you get it? If all the rich people learn how to do their own plumbing and you won’t charge the poor people, what will you do for money?”

Joe immediately replies, “I guess I’ll run for President.”

YEAR-END TAX TIPS

Here are some year-end tax tips from the IRS. Check out the IRS summary at FS-2008-26.

If you are making year-end contributions to charity, keep in mind several important tax law provisions that have taken effect in recent years. Another good summary is in the IRS release
IR-2008-138. Remember that Dec. 31 is the last day for most of these actions to occur.

Monday, December 15, 2008

IF YOU CAN'T GET ENOUGH OF LOOKING AT TRACTORS

Check out this web site. It is kind of like YouTube for tractors. It originates from Ireland. Be careful... I found watching it addicting.

Wednesday, December 10, 2008

POLITICALLY CORRECT GREETING

For those of you so inclined, here’s a Christmas greeting that will offend no one whatsoever. Well, let me re-phrase that…it might very well offend Christians but no one else.

A Politically Correct Holiday Greeting

Best wishes for an environmentally conscious, socially responsible, low-stress, non-addictive, gender-neutral, winter solstice holiday, practiced within the joyous traditions of the religious persuasion of your particular choice, but with respect for the religious persuasion of others who choose to practice their own religion, as well as those who choose to not practice any religion at all. Additionally, a fiscally successful, personally fulfilling, and medically uncomplicated recognition of the generally accepted calendar of 2009, but not without due respect for the calendars of choice of other cultures, whose contributions have helped make our society great, without regard to race, creed, color, religion or sexual orientation.

(Disclaimer: This greeting is subject to clarification or withdrawal. It implies no promise by the wisher to actually implement any of the wishes for him/herself or others, and no responsibility for any unintended emotional stress these greetings may bring to those not caught up in the holiday spirit.)

The American Legion Magazine, December 2008

Monday, December 8, 2008

WATCH OUT FOR THESE NEW PHONE AND EMAIL SCAMS

Just another reminder to not give out private information to anyone that calls you on the phone.

The latest one is a Jury Duty Scam. I have personally gone out to the FBI website to verify this report.

This scam appears to be spreading fast so be prepared should you get this call. Most of us take those summonses for jury duty seriously, but enough people skip out on their civic duty that a new and ominous kind of fraud has surfaced. The caller claims to be a jury coordinator. If you protest that you never received a summons for jury duty, the scammer asks you for your Social Security number and date of birth so he or she can verify the information and cancel the arrest warrant. Give out any of this information and bingo; your identity was just stolen. The fraud has been reported so far in 11 states, including Oklahoma, Illinois, and Colorado. This swindle is particularly insidious because they use intimidation over the phone to try to bully people into giving information by pretending they are with the court system. The FBI and the federal court system have issued nationwide alerts on their web sites, warning consumers about the fraud.

Don't believe me, check it out here:


FRAUDULENT GRAND JURY SUMMONS CONTAINING MALWARE

04/17/08
—The IC3 warns consumers of recently reported spam e-mail containing a fraudulent subpoena notifying recipients they are commanded to appear and testify before a Grand Jury. The e-mail attempts to appear authentic by containing a court case number, federal code, name and address of a California federal court, court room number, issuing officers’ names, and a court seal. Recipients are directed to click the link provided in the e-mail in order to download and print associated information for their records. If the recipient clicks the link, malicious code is downloaded onto their computer.

The e-mail also contains language threatening recipients with contempt of court charges if they fail to appear. Recipients are also told the subpoena will remain in effect until the court grants a release. As with most spam, the content contains multiple spelling errors.

If you receive this type of notification and are unsure of its authenticity, you should contact the issuing court for validation.

Be aware; if you receive an unsolicited e-mail, especially from an unknown sender, it is recommended you do not open it. If you do open the e-mail, do not click any embedded links, as they may contain a virus or malware.

If you have received an e-mail similar to this, please file a complaint at
www.ic3.gov.

Saturday, December 6, 2008

GULF OIL EXEC SAYS GAS COULD HIT $1.00/GALLON

'Gulf Oil CEO says gas could hit $1 next year'

(Patriot Ledger, Quincy, Mass.)
-- Gulf Oil CEO Joe Petrowski said on Wednesday that the price of oil could sink to $20 per barrel, and there is a chance gasoline prices could drop as low as $1 per gallon by early next year. He said that after speculators drove oil prices up, there is a chance that the market will overshoot on the way back down, resulting in much lower prices at the pump. Petrowski said that policymakers should make low-cost energy a goal by investing in alternative energy sources, increasing domestic oil reserves, and diversifying the foreign origins of oil so as to be less dependent on unfriendly countries. While he said he believes global warming is a danger, Petrowski is not sure there is as much of a correlation between carbon and global warming as some environmentalists claim. “Carbon is our greatest threat – there’s another myth,” he said. “I do think economic devastation and reliance on foreign supplies of oil (are).” Gulf opened its first E85 ethanol fueling station at Logan Airport in October – just as gasoline prices sank and the demand for ethanol decreased. “Ethanol’s not a great business right now, but it will be,” Petrowski said. He said that cellulosic ethanol will eventually replace corn-based ethanol, and that he thinks the U.S. should eventually get rid of the import tax on ethanol from places like Brazil.

Friday, December 5, 2008

IMPORTANT PENSION INFORMATION

IF YOU ARE OVER 70 ½ AND HAVE NOT TAKEN YOUR REQUIRED MINIMUM DISTRIBUTION FROM YOUR PENSION, THIS IS IMPORTANT
Required payouts from IRAs and plans may yet be waived for 2008, even though Congress decided not to do anything for this year. In light of the stock market’s decline this year, lawmakers considered not requiring folks who are at least 70½ to take payouts for 2008. That way, they wouldn’t be forced to sell investments in their plans with the market near the bottom. New legislation that may be taken up in Dec. would waive payouts for ’09. That’s no help for 2008. Treasury is still seriously considering providing relief for 2008 payouts. Our advice is to delay withdrawals to late Dec. if you don’t need the money. That way, you can take out less if Treasury decides that it can ease the payout rules.

NEED A CHRISTMAS GIFT IDEA - CHECK THIS OUT

State Ag department offers Nebraska holiday gift, Christmas tree brochures

(NDA Press Release) -- According to Greg Ibach, the Director of the Nebraska Department of Agriculture (NDA), the NDA Nebraska Holiday Brochure is a good resource for Nebraska-made gift ideas. Among the pages of the brochure, consumers will find Nebraska food and meat companies that package food products year-round in a variety of different ways. The products range from Nebraska-made candies, jellies, and wines, to dried fruit, meats, and seasonings. A Nebraska Christmas Tree Growers Directory is also available to help consumers find the right Nebraska Christmas tree farm to visit. Free copies of the brochures are available by calling 800-422-6692 or e-mailing
agr.promo@nebraska.gov. The brochures are also available online at http://www.agr.ne.gov/.

Thursday, December 4, 2008

ECONOMIC CRISIS AFFECTS NEBRASKA CATTLE PRODUCERS

(KOLN/KGIN TV, Lincoln, G.I.) -- The effects of the rocky economy have been felt around the nation for quite some time. Now, Nebraska's cattle industry is feeling the pinch. As commodity prices fluctuate, and input costs rise, cattle producers are finding it much more difficult to survive the tough economic times. "Outside factors are influencing us in the cattle business," said Todd Schroeder of the Nebraska Cattlemen. Just like other start-up businesses, feeding cattle takes a lot of capital, which is becoming more difficult to get with the nation's current economic situation. According to the Nebraska Cattlemen, Nebraska is the largest producer of beef per square mile. Nebraska also ranks number two in live animal and meat exports, and harvests 7 million head annually.

HITLER ON YOU TUBE

How would Adolf have handled the current financial crisis? Click on Zer Dunkoff to find out.

Wednesday, December 3, 2008

NEW MILEAGE RATES ISSUED

The Internal Revenue Service has issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

· 55 cents per mile for business miles driven
· 24 cents per mile driven for medical or moving purposes
· 14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.

The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.

BE ON THE LOOKOUT FOR THESE ERRORS

Watch out for an error in the instructions for Forms 1099, 1098 and W-2G, and similar information returns. The correct due date for businesses to give a copy of the form to taxpayers is Feb. 17, 2009; not March 2 as the instructions state. The IRS can slap penalties on late issuers. The earlier date was OK’d by Congress in Oct.

Tuesday, December 2, 2008

CATTLEMEN OPOSE LIVESTOCK TAX PROPOSED BY EPA

(Grand Island Independent) -- A proposed Environmental Protection Agency tax on livestock operations would be devastating to Nebraska's billion dollar livestock industry, according to Dave Wright, president of the Independent Cattlemen of Nebraska. The EPA proposal would establish a greenhouse gas "tax" of $87.50 on each head of beef cattle produced and $175 per head on each dairy animal and $20 for each hog. The proposal is essentially a tax on livestock operations, Wright said. The EPA is seeking public comments until Nov. 28. To comment directly to the EPA visit www.regulation.gov.

MORE THREATS TO ETHANOL MARKET SHARE

(Lincoln Journal Star) -- Due in part to oil prices and national energy policy, the market penetration of ethanol In Nebraska recently reached an all-time high of almost 90 percent. Now turmoil in the ethanol industry has cast doubt on ethanol marketers' ability to keep the dime advantage they have held at the pump in Nebraska elsewhere for most of the past five years. Gas prices continue to plummet. In its daily report delivered Wednesday, AAA says the Nebraska statewide average sits at $1.81 for a gallon of regular, down from $3.13 a year ago. As of last week, regular unleaded gasoline was the cheaper option at the seven BP stores owned locally by Salem Oil Co. A Journal Star check of other Lincoln service stations gave the price advantage to regular unleaded in eight of 14 cases, typically $1.69 versus $1.79. This suggests that ethanol, despite its connection to Nebraska agriculture, doesn't have nearly the brand loyalty of, say, Husker sweatshirts. But despite recent developments at the pump in Lincoln and elsewhere, Todd Sneller of the Nebraska Ethanol Board said the ethanol industry will stay afloat because ethanol sales nationally are anchored in a federal renewable fuels standard (usage requirement) and clean air initiatives in California and numerous other places. The federal mandate is scheduled to get bigger over the next few years.

HERE IS A GIFT IDEA FOR CHILDREN OR GRANDCHILDREN

If your child or grandchild worked this year and had wages or other earned income, funding a Roth is a great gift. You can give $5,000 or what the child earned, whichever is less. But keep in mind that the gift does count toward the $12,000 annual gift tax exclusion. This does not create a tax deduction but a Roth can grow into a nice nest egg, especially if you keep making pay-ins each year.

Monday, December 1, 2008

IF YOU ARE A SINGLE MEMBER LLC, TAKE NOTE

If you have a single member LLC and you pay wages, you will need to have an ID number starting January 1, 2009. Per new IRS rules, single member/single owner limited liability companies are required to change how they report wages and pay federal employment taxes in 2009.