I will be on vacation June 25 through July 16, 2007

Milt Baker CPA

Foreign Bank Accounts / Currency Transaction Reports

File your information reports (TD F 90-22.1) (Due June 30 - July 2 this year, as June 30 is on a Saturday) and don't structure your transactions.

Posted by Russ Fox on Wednesday June 20, 2007 at 9:38am

Take Advantage Of Federal Tax Credits Available For Home Energy Efficient Improvements Made In 2007

Tax credits of up to $500 are available to customers who purchase and install energy-efficient windows, insulation, doors, roofs and heating and cooling equipment in their principal residence in the United States . Credits vary according to the improvement made. Specific tax benefits for the home include:

$50 for purchasing an advanced main air circulating fan;
$150 for installing a highly efficient furnace or boiler;
$200 for installing energy efficient windows; and
$300 for purchasing a highly efficient central air conditioner, heat pump or water heater.
$500 for insulation and exterior doors.

Understanding Tax Deferral

The parity principle revealed
By Kaye A. Thomas Posted June 17, 2007

The benefit of tax deferral isn't what most people think.

Tax deferral — legally postponing a tax until a later year — is a common theme in strategic investing. It’s the key benefit of traditional IRA and 401k accounts. Knowledgeable investors manage their capital gains to achieve tax deferral as well. Despite its importance, tax deferral is often misunderstood. People tend to believe they’re receiving one kind of benefit when in reality they’re receiving another.

Give Yourself a Mid-Year Financial Checkup

If you’re one of the many people who set goals and made financial resolutions for 2007, it’s time for a reality check. With half of the year gone, where do you stand?

Michigan Association of CPAs

Congress Instructs IRS To Conduct More Audits

In an effort to raise more revenue, the GAO has directed the IRS to focus on the following types of taxpayers for audits:
* Schedule C filers
* Partnerships and S Corporations, especially S Corp owners who do take appropriate salaries
* Gamblers
* Part-time farmers
* Individuals who file Schedule A and claim large amounts of medical deductions, charitable contributions and job-search expenses
* Investors who do not properly report sales of investment properties

about.com

The Pros and Cons of 529 College Savings Plan

According to The College Board, total annual charges for tuition, fees, and room and board for full-time college students have topped $12,700 at the average four-year public

Michigan Association of CPAs

Agreement Reached On New Michigan Business Tax

LANSING - June 13, 2007 - Governor Jennifer M. Granholm, Senate Majority Leader Mike Bishop, and House Speaker Andy Dillon today said they have reached an historic agreement on a new Michigan Business Tax (MBT) to replace the Single Business Tax (SBT) that will expire at the end of the year. The new Michigan Business Tax will make Michigan's business climate competitive, serving as a tool to attract jobs and job providers.

Deducting "Other" Business Expenses

The Internal Revenue Service has issued a number of educational fact sheets reminding taxpayers to know the rules for deducting several specific business expenses. This fact sheet, the tenth in the series, reminds taxpayers to follow appropriate guidelines when deducting expenses that fall under the category of “Other” on the Schedule C, Profit or Loss from Business.

“Other” business expenses account for just part of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses incurred in conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Although many common expenses are deducted on designated lines of the tax schedule, some expenses may not fit into a particular category. Taxpayers can deduct these as “other” expenses. A breakdown of “other” expenses must be listed on line 48 of Form 1040 Schedule C. The total is then entered on line 27.

IRS Updates National Research Program For Individuals

Internal Revenue Service officials have announced plans to launch a new National Research Program (NRP) reporting compliance study for individual taxpayers that will provide updated and more accurate audit selection tools and support efforts to reduce the nation’s tax gap.

The latest NRP study will be the first of an ongoing series of annual individual studies using an innovative multi-year rolling methodology. The study will start in October 2007 and examine about 13,000 randomly selected tax year 2006 individual returns. Similar sample sizes will be used in subsequent tax years.

IRS Publication Summarizes Responsibilities And Resources For Small Businesses

Summarizes in one convenient location essential information for small businesses and the self-employed and Web links to find it on IRS.gov. You can also call 800.829.3676 to order

Internal Revenue Service

When Does It Pay To Take Social Security Benefits Early?

About half of all Americans apply for Social Security at age 62, despite the penalties. But the decision makes financial sense only for a few distinct groups.

Christian Science Monitor

State Tax Debate Heads Into Extra Innings

With the December 31, 2007 expiration of the Single Business Tax looming on the horizon, policy-makers in Lansing are under increased pressure from interest groups and the business community to answer questions regarding the future of Michigan’s business tax structure.

Michigan Association of CPAs

Paying For a Child's College Education When You Failed to Save Enough

School may be coming to a close in the coming weeks, but parents of school-age children should begin planning now to meet the rising costs of a college education. This is especially...

Michigan Association of CPAs

Warning on Scam E-Mails

Members of the public are receiving phony e-mails falsely claiming to come from the IRS. Take steps to protect yourself.

Internal Revenue Service

NONSPOUSAL HEIRS OF 401(k)s

Such heirs can take payouts over their lifetime once the funds are rolled into an IRA, IRS says, as long as the plan permits rollovers.

Previous IRS guidance implied that distributions from the heir's new IRA would have to follow the rules of the decedent's 401(k) plan. Many plans require that heirs must clean out the accounts in five years or less

But nonspousal heirs face a deadline. To beat the five-year rule, the 401(k) funds must be transferred to an IRA no later than the year after the year the 401(k) owner died. So if the owner died in 2006, the IRA transfer must be done by the end of 2007 to get lifetime payouts. Otherwise, the heiir is required to quickly clean out the account

Kiplinger

CONGRESS CLOSES A TAX PLANNING LOOPHOLE FOR FAMILIES

The 2007 Small Business Tax Act extends the reach of the "kiddie tax" by raising the age limit to include (1) all children under age 19 (previously under age 18) and (2) studenta under age 24. Both changes are effective for tax years beginning after May 25, 2007

There is some bad news It is not until 2008 that capital gain for those in the 15% or lower tax bracket fall to zero rather than the 5%. That zero no-tax rate remains through 2010. Many lawmakers earlier this year called for preventing dependents under age 24 from using the zero percent rate. The new law covers this 'loophole' and more by expanding the kiddie tax

Kiplinger