Major Tax Deadlines

Review your 2008 Tax Strategy

Prepare for job loss

Welcome to the second issue of Craft, Noble and Company's e-news update. Our clients have told us they appreciate receiving tax updates, notification of filing deadlines and other informative business and tax news. So we've designed a convenient and timelier way of keeping you informed.  If you would prefer to receive a print copy of each quarterly e-newsletter, please call our office to place that request.

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Perhaps you’re thinking of helping one of your children get started in business. Since the failure rate for new businesses is high, you need to do whatever you can to increase your child’s chances success.

Evaluate the proposed business. Find out how much time, thought, and effort your child has already devoted to the proposed business.Suggest approaches to researching the market and determining the resources, knowledge, and skills that will be needed. Your input should be limited to guidance and ideas.

Once your child has completed the necessary groundwork, and if the project still seems reasonably feasible, you’ll be ready to consider the next steps.

Follow these financial guidelines:

Don’t just spend a tax refund or rebate check; put it to work improving your financial well-being.

1. Pay off consumer debt. You probably won’t save quite as much by paying off other types of loans, but you should consider that as well.

2. A contribution to an IRA is a good idea whether it’s tax-deductible or not because IRA earnings grow tax-deferred. If you’re self-employed and show a profit for the year, you can also make a tax-deductible contribu-tion to a Keogh plan.

3. Start or add to an education fund. Consider investing your extra money in stock or bond mutual funds earmarked for your child’s education. We can help you decide whether your education fund should be held in your name, your child’s name, or in trust.

4. Invest in yourself. Have you put off training for new job responsibilities or a new career because you couldn’t afford it? You may be entitled to a tax deduction for education expenses that are your employer requires or that improve the skills required on your current job.

Please contact Craft, Noble & Company for more suggestions. We are here to help.

Never put up more money than you can comfortably afford to lose.

Try not to be the sole source of capital. Risk is part of the business experience. Although loans from outside sources may also be part of the mix, they should be limited.

Set limits. Make it clear that you’ll lend or invest a specific amount and no more. You also may wish to set restrictions on the use of the funds within the business.

Put everything in writing. Signed notes that stipulate repayment terms and require interest at market rates should support loans. Investments should be supported by partnership agreements, shareholder agreements, or similar documents that describe operating arrangements, profit and loss sharing, buyout provisions, and closing contingencies.


Don’t forget tax planning. You probably will want to allocate any taxable income to your child, and you will want to be able to write off your loss if the business goes bad. Proper documentation will be paramount, since the IRS closely scrutinizes family transactions.

Offer guidance. Explain the reasons behind each of your requirements, and make it clear that the child must consider your input as a condition of accepting your money. Offer advice freely, but let your child make more of the business decisions. Mistakes are part of the learning process.

We can assist with the reviews and planning necessary for your child’s business’s success. Give Craft, Noble & Company’s office a call.

The first-year limit for new cars is $10,960; for used cars, it’s $2,960. Depreciation limits for later years are the same for both new and used cars: $4,800 in year two, $2,850 in year three, and $1,775 in all following years.

The 2008 first-year depreciation limit for trucks and vans is $11,160 for new vehicles and $3,160 for used vehicles. Limits for both new and used vehicles in year two are $5,100, in year three $3,050, and in each suc-ceeding year are $1,875.

Contact Craft, Noble & Company if we can assist you further.

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