Tuesday, March 31, 2009

EDITORIAL - WHAT WOULD IT BE LIKE IF THE GOVERNMENT RAN EVERYTHING?

Recently I was in Philadelphia speaking at the Raylon Art of Business Conference. Philadelphia is a great and historic city. I have always wanted to walk where Ben Franklin and the framers of our Constitution walked. I was touched by my visit to Independence hall where the Declaration of Independence and the Constitution were signed. I was not disappointed with my historic tour of Philadelphia.

I did have a problem though; it was ‘off season’ so everything closed exactly at 5:00 p.m. Independence Hall; the Liberty Bell exhibit; Franklin’s court; the grave yards; Betsy Ross’s house; all of the historic locations. I was not the only tourist that was disappointed by this. I talked to at least 20 to 30 visitors that, like me, were left disappointed standing at the door.

As I thought about the ‘business practice’ of closing early, I could only think about my my talk to small business owners at the conference where I had pointed out that many of our clients are expanding hours in reaction to the economy.

Then it hit me- all of these great historical exhibits were managed by the US Park Service – a branch of the Federal Government. The workers, managers, and those making the decisions were all government workers... bureaucrats. Realizing that the government was running the show it made sense that they didn’t care, they just followed the bureaucratic rules.

Then it really hit me! “Would I want the Federal Government running my health care and the banks?” That seems to be the way we are going.

Scary- really scary… I hope that if they do take over our financial institutions and our health care system that they do a better job taking care of their customers.

Larry Kopsa CPA

Monday, March 30, 2009

A MESSAGE FROM ABRAHAM LINCOLN

"You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people's initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves."

Abraham Lincoln

Saturday, March 28, 2009

FYI - JUST HOW IMPORTANT IS THE INTERNET?

The Internet is very important to our accounting business. We do so much with the Internet, from on-line meetings to filing forms to tax research. In addition in our meetings with distance clients the we use the Internet. It is just like we are at the clients location. We would really be lost if we did not have cyber space technology.

But that is nothing compared to the Germans. A new study found that 84% of Germans in their 20’s would do without their significant other before they gave up the Internet. They explain that they could always find another partner to love, but life without the Internet was unthinkable. WOW!

Larry Kopsa CPA

Thursday, March 26, 2009

NEBRASKA SALES TAX SUNSET WOULD HURT LIVESTOCK PRODUCERS

Elimination of all Nebraska sales tax exemptions considered

(Nebraska Unicameral Update) -- The Legislature's Unicameral Update reports that on March 20, the Revenue Committee heard a bill that "would sunset every sales tax exemption offered by the state of Nebraska, eventually eliminating the entire sales tax system by 2016."


LB385 has been prioritized by Omaha Sen. Rich Pahls. "Ron Sedlacek, representing the Nebraska Chamber of Commerce & Industry, testified in opposition to the bill. He said it would create uncertainty and potential disruptions for businesses operating in Nebraska." The Nebraska Power Association is also opposed LB385, since "taxes on fuel used to generate electricity would be passed on to consumers." "Jay Rempe of the Nebraska Farm Bureau also opposed the bill," saying "the bill would result in substantially higher taxes for consumers, because animal sales would be taxed “four or five times … before it gets to the end consumer.

The committee took no immediate action on the bill.

See the story at <http://unicameralupdate.blogspot.com/2009/03/elimination-of-all-sales-tax-exemptions.html>

NO DROUGHT IN NEBRASKA FOR THE FIRST TIME IN YEARS

(Omaha World-Herald/Omaha.com) -- The Omaha World-Herald reports that "for the first time in eight years, no part of Nebraska is in a drought as the state heads into spring" and that "the good news is reflected in reservoirs that are healthier than they've been in some time." On the other hand, the "western Panhandle is abnormally dry and stream flows and soil moisture levels are below normal. So conditions are in place for a slip back into drought." In central and eastern Nebraska, soils remain saturated from last year's heavy rains.

"Lake McConaughy near Ogallala, Nebraska's largest reservoir, is 48.5% full and about 8 feet higher than it was a year ago at this time." Inflows into the lake are about 69% of normal, while snowpack in the Rocky Mountains is about normal, Svoboda said, although behind last year. "Harlan County Reservoir, another major Nebraska lake, is at its normal water level." See the story at <http://www.omaha.com/index.php?u_page=2798&u_sid=10591602>

Sunday, March 22, 2009

COMMENTARY FROM EDITORS ON PRESIDENT OBAMA'S PLAN TO HELP SMALL BUSINESS

On Monday, March 16, 2009, President Obama announced a new plan to help small businesses. The plan is mainly centered around easing SBA loans. The plan calls for the government to buy up SBA loan securities to free up the secondary markets so banks can sell their SBA loans; it cuts SBA loan fees; and it increases the Federal guarantee on SBA loans to 90%. It also calls for the 21 largest banks getting Federal funding to report on their volume of small business loans each month. The rest of the announced provisions for the most part were already included in the Stimulus package and not new.

So: thumbs up or thumbs down?
I’d say the plan is mildly positive, but mostly it’s just not relevant to the majority of small businesses. Here’s why:

To the extent small businesses actually want SBA loans, this could help. However, not every small business wants or needs a loan. Demand for small business loans is down significantly, according to the U.S. Treasury. As Dawn Rivers Baker noted, lack of loans is not what ails many small businesses. In times when the economy is down, going into debt doesn’t necessarily look all that attractive. Battening down the hatches to get through to better times in the economy, does.

The Small Business and Entrepreneurship Council makes a similar point — saying the President’s focus on SBA lending merely helps on the margins: “While these may help some small businesses that are in a position to borrow money, many small firms are not in sound financial shape or don’t feel it is prudent to increase their debt during the rough economic period.”

Consider, also, how few small businesses actually get SBA loans. For instance, as this Washington Post article reports, SBA loans counted for just 4% of loan volume for small businesses in 2006.

More SBA loans are not a cure-all for every small business — although you would hardly know that based on some reports. For instance, this article on Forbes.com is bizarrely titled “Small Business Loves Obama’s Plan.” However, there are no small business owners interviewed in the article. The title makes it sound as if small business owners spontaneously erupted in applause in favor of the plan. Wishful thinking perhaps … but not what the article says … nor the real-world reaction.

We will just have to wait and see what happens.

Thursday, March 19, 2009

AN ANSWER TO DROUGHT? DROUGHT-TOLERANT CORN MAY BE ON THE WAY.

(Brownfield News) -- Brownfield News reports that "Monsanto’s drought-tolerant corn trait is another step closer to reality. This week, the company announced it has applied for USDA approval, which completes its regulatory submissions in the U.S. and Canada." The market launch for drought-tolerant corn is still scheduled for 2012.

See the story at http://www.brownfieldnetwork.com/gestalt/go.cfm?objectid=019164DA-5056-B82A-D0B909803E75FF7C

Tuesday, March 17, 2009

HAPPY SAINT PATRICKS DAY

It's no use boiling your cabbage twice.--

Irish proverb

Thursday, March 12, 2009

IS THE RECESSION HITTING AGRICULTURE?

(Agriculture Online) -- Agriculture Online reports that there has been "a rise farm loan delinquencies in the last twelve months, according to a commercial lending research company." "Bill Phelan, president of PayNet, Inc., which tracks commercial lending activity in 23 different markets ... says lending trends show that the agricultural industry has the largest increase in borrowers falling behind on loan payments by 90 days or more, for the last 12-month period." "While the numbers don't yet indicate the sky is falling on U.S. farmers, it does show there may be more who are having trouble making ends meet" and that "the weak economy is catching up with the entire agricultural industry." But Phelan adds that "farmers are still in pretty good shape" and that "farmers still maintain just an average rate of loan delinquencies."

See the story at

http://www.agriculture.com/ag/story.jhtml;jsessionid=EXYBN00T4ICVZQFIBQNR5VQ?storyid=/templatedata/ag/story/data/1236608481911.xml

WHAT IF YOU HAVE MORTGAGE DEBT FORGIVEN

Thanks for all the information you send out. I have a question. A relative of mine had a portion of their mortgage forgiven. I told him that he would have to pay tax on the forgiveness. He said I was wrong. Who is right?

Eagle


Depends. If a mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income. You are correct in that normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

Here is the catch. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.

Also, debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision.

COMMON QUESTIONS ON THE STIMULUS TAX PROVISIONS

If you don't already have the tax provisions of the Stimulus Bill figured out, the American Institute of Public Accountants has prepared a Q&A on individual and business tax-related provisions in the American Recovery and Reinvestment Act of 2009. This is only a couple pages and answers many questions that we have been receiving. Among the subjects covered for individuals are the first-time home-buyer credit, college-funding tax credit, unemployment benefits, benefit for use of public transit and the alternative minimum tax exemption. For businesses, the Q&A highlights depreciation, expensing, capital gains, work opportunity credit and penalty relief from underestimating taxes.

Wednesday, March 11, 2009

DEMOCRATS SAY FARM PROPOSAL IS STUPID

(The Washington Times) -- The Washington Times reports that "the top House Democrat on the Agriculture Committee punctured yet another hole in President Obama's $3.6 trillion budget proposal Wednesday, saying the president's plan to save money by reducing farm payments is 'more than dead on arrival.'"

Rep. Collin C. Peterson (D-Minn.) "scoffed at a proposal to eliminate direct payments to farmers earning more than $500,000 annually as a misguided idea from "some bean counter over at [the Office of Management and Budget]." Peterson told attendees of a farmers convention that the owner of a 100-cow dairy would likely exceed $500,000 in gross income. See the story at

http://www.washingtontimes.com/news/2009/mar/10/democrat-hits-farm-proposal-as-misguided/

Tuesday, March 10, 2009

REQUEST FOR INCREASE IN ETHANOL CAP

Eleven States Ask President to Raise Ethanol Cap

(WOWT TV, Omaha) -- On Monday, Nebraska Dept. of Agriculture Director Greg Ibach of Nebraska and ten other Midwest state agriculture directors sent a letter to President Obama requesting the acceptance of 15% or 20% ethanol blends. Some ethanol producers say that without a change in this limit, "it could be difficult to complete the congressional mandate for renewable fuel use set forth in the 2007 energy bill." "By moving beyond the 10% cap, we can improve domestic investment, stimulate our economy with green jobs, and enable our country to comply with the existing Renewable Fuels Standard," the letter says. To see the full text of the letter, go to


http://www.wowt.com/news/headlines/40959902.html

Thursday, March 5, 2009

FOUR CREDITS THAT CAN REDUCE YOUR TAX BILL

Check it out! You might be eligible for a tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are even refundable. That means you might receive a refund rather than owe any taxes. Here are five popular credits you should consider before filing your 2008 Federal Income Tax Return:

1. The Earned Income Tax Credit is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the credit.

2. The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work.

3. The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child (under age 17). This credit can be claimed in addition to the credit for child and dependent care expenses.

4. The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low- and moderate-income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply.

If you need more information let me know.

Wednesday, March 4, 2009

CORPORATE FARMING BAN GETS HEARING

(Associated Press/Journalstar.com) -- The AP reports that a "watered-down version of Nebraska’s strict corporate farming ban that was struck down by the courts in 2006 is being considered" by the Legislature -- again. The bill (LB593) received a hearing on Tuesday. "To comply with the court decision, the measure wouldn’t keep out-of-state individuals or family corporations off Nebraska farmland. Only nonfamily corporations would be blocked." The State Chamber, along with several farm and livestock organizations, testified in opposition to LB593. "A similar measure" failed to get first-round approval in the Legislature last year.

See the story at http://journalstar.com/articles/2009/03/04/news/politics/doc49ad9cc826e8a457156587.txt

ECONOMY'S STRUGGLE IMPACTS BEEF INDUSTRY

(Grand Island Independent) -- The Grand Island Independent reports that as the economy slows, "a new study from Kansas State University and Michigan State University shows how the beef industry can help strengthen beef demand despite the economic downturn." The beef industry is vital to Nebraska’s economy, as cash receipts for cattle and calves in 2007 accounted for 49% of all agricultural cash receipts that year. The study's authors found that "U.S. consumer demand for beef declined about 4% during 2008."



See the story at



http://www.theindependent.com/articles/2009/03/02/news/ag/doc499a441ac8522778499252.txt

Tuesday, March 3, 2009

COURT ALLOWS EPA TO REGULATE FARM DUST

(Associated Press/JournalStar.com) -- The AP reports that dust -- "a fact of life for farmers" -- is not being exempted for agriculture under new environmental regulations. "'It’s such a non-commonsense idea that you can keep dust within a property line when the wind blows,'" according to Iowa's U.S. Sen. Charles Grassley. "Under rules imposed in 2006, rural areas would be kept to the same standards as urban areas for what the EPA calls 'coarse particulate matter' in the air. ... The U.S. District Court of Appeals in Washington ruled Tuesday that the EPA had already provided the evidence necessary to determine farm dust 'likely is not safe.'" A lawyer for livestock interests said this means "farmers now face the daunting task of proving a negative — that the dust is not harmful."

Read more at http://journalstar.com/articles/2009/03/02/news/business/doc49a8682ec2acf009412008.txt