Newsletter Vol.2, Issue 1

For May 2008

May 31 Deadline for IRA, SEP, SIMPLE, Roth IRA, MSA, and education savings account trustees to file annual statements (Form 5498) with the IRS, with copies to participants.

NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

Employers generally must deposit Form 941 payroll taxes on either a monthly or semiweekly deposit sched-ule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.

* Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fif-teenth of the following month.

* Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid.

Tax laws seems to be changing all the time. Here’s an overview of tax saving opportunities for 2008.

* To minimize tax damage from the “kiddie tax”, keep investment income of children below or near the annual threshold ($1,800 for 2008). For example, have a child switch funds into tax-deferred or tax-free investment vehicles. The age limit has been increased from 18 to 19. For full-time students, the kiddie tax will apply until age 24.

* The maximum tax rate on net long-term gain and qualified dividends for taxpayers normally in the 10% or 15% regular income tax brackets is reduced 5% to 0% for 2008—and will remain in effect through 2010. Push your taxable income below the cut-off point for the regular 25% tax bracket, and you could qualify for the 0% rate.

* Under the new economic stimulus law, your business can deduct up to $250,000 of assets placed in service in 2008. In addition, a business may elect “bonus depreciation” in 2008 equal to 50% of the cost of qualified assets. Your business can combine the Section 179 deduction with bonus depreciation. Regular depreciation deductions may be claimed for any remainder.

* The new mortgage relief law calling for a full deduction for taxpayers with an AGI of $100,000 or less extends this tax break through 2010. Therefore, you may qualify for a 2008 deduction for amounts paid or accrued this year.

* Although, deductible IRA contributions are generally not available to high-earning taxpayers if either spouse participates in an employer’s retirement plan, contributions may still grow on a tax-deferred basis until withdrawn. The contribution limit for the 2008 tax year has increased from $4,000 to $5,000. If you’re age 50 or older, you can add a “catch-up contribution” of $1,000. The contribution deadline for 2008 is April 15, 2009, but you may earn more by contributing earlier.

* Finally, a word about the new economic stimulus payments the IRS had been distributing: These rebates aren’t available until you’ve filed your 2007 return. Individuals who normally aren’t required to file return—such as those receiving social security benefits—may follow a simplified filing procedure.

To discuss the tax-saving ideas best suited for your business, give Craft, Noble & Company’s office a call.

In today’s economy, the job market is not secure. Companies are downsizing, reducing hours, or cutting salaries to remain competitive. Losing your job or having your pay cut can be financially devastating. Here are things you can do to protect yourself, whether your job is threatened or you’re suddenly terminated.

* Take stock of your finances. List all of your debts and the monthly payments. Estimate what your monthly living expenses would be if you were not working.

* Line up sources of extra cash in case you need it. It’s easier to obtain credit while you’re still employed.

* Consider an equity line of credit if you own a house. You can draw this down, as you need it, tapping into the equity in your home. Check whether it would pay to refinance your mortgage.

* Start your job search immediately. Resist the temptation to take a vacation to “recover.”

* Set yourself an aggressive budget and stick to it. It’s better to reduce spending now than regret it later.

* If you begin to have problems making loan payments, talk to the lenders before you fall into arrears, and try to work out a payment plan.

* Tap into retirement savings such as IRAs or 401(k)s only as a last resort.

Hopefully you’ll never find yourself in this situation. While you’re working, develop a regular savings habit. Try to build a reserve equal to six months of living expenses for job loss or other disasters. Then at least you’ll have a financial cushion if the worst should happen.

Top of Page | Go to Page 1



	For May 2008 May 31 Deadline for IRA, SEP, SIMPLE, Roth IRA, MSA, and education savings account trustees to file annual statements (Form 5498) with the IRS, with copies to participants. NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business. Employers generally must deposit Form 941 payroll taxes on either a monthly or semiweekly deposit sched-ule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less. * Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fif-teenth of the following month. * Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid. Tax laws seems to be changing all the time. Here’s an overview of tax saving opportunities for 2008. * To minimize tax damage from the “kiddie tax”, keep investment income of children below or near the annual threshold ($1,800 for 2008). For example, have a child switch funds into tax-deferred or tax-free investment vehicles. The age limit has been increased from 18 to 19. For full-time students, the kiddie tax will apply until age 24. * The maximum tax rate on net long-term gain and qualified dividends for taxpayers normally in the 10% or 15% regular income tax brackets is reduced 5% to 0% for 2008—and will remain in effect through 2010. Push your taxable income below the cut-off point for the regular 25% tax bracket, and you could qualify for the 0% rate. * Under the new economic stimulus law, your business can deduct up to $250,000 of assets placed in service in 2008. In addition, a business may elect “bonus depreciation” in 2008 equal to 50% of the cost of qualified assets. Your business can combine the Section 179 deduction with bonus depreciation. Regular depreciation deductions may be claimed for any remainder. * The new mortgage relief law calling for a full deduction for taxpayers with an AGI of $100,000 or less extends this tax break through 2010. Therefore, you may qualify for a 2008 deduction for amounts paid or accrued this year. * Although, deductible IRA contributions are generally not available to high-earning taxpayers if either spouse participates in an employer’s retirement plan, contributions may still grow on a tax-deferred basis until withdrawn. The contribution limit for the 2008 tax year has increased from $4,000 to $5,000. If you’re age 50 or older, you can add a “catch-up contribution” of $1,000. The contribution deadline for 2008 is April 15, 2009, but you may earn more by contributing earlier. * Finally, a word about the new economic stimulus payments the IRS had been distributing: These rebates aren’t available until you’ve filed your 2007 return. Individuals who normally aren’t required to file return—such as those receiving social security benefits—may follow a simplified filing procedure. To discuss the tax-saving ideas best suited for your business, give Craft, Noble & Company’s office a call. In today’s economy, the job market is not secure. Companies are downsizing, reducing hours, or cutting salaries to remain competitive. Losing your job or having your pay cut can be financially devastating. Here are things you can do to protect yourself, whether your job is threatened or you’re suddenly terminated. * Take stock of your finances. List all of your debts and the monthly payments. Estimate what your monthly living expenses would be if you were not working. * Line up sources of extra cash in case you need it. It’s easier to obtain credit while you’re still employed. * Consider an equity line of credit if you own a house. You can draw this down, as you need it, tapping into the equity in your home. Check whether it would pay to refinance your mortgage. * Start your job search immediately. Resist the temptation to take a vacation to “recover.” * Set yourself an aggressive budget and stick to it. It’s better to reduce spending now than regret it later. * If you begin to have problems making loan payments, talk to the lenders before you fall into arrears, and try to work out a payment plan. * Tap into retirement savings such as IRAs or 401(k)s only as a last resort. Hopefully you’ll never find yourself in this situation. While you’re working, develop a regular savings habit. Try to build a reserve equal to six months of living expenses for job loss or other disasters. Then at least you’ll have a financial cushion if the worst should happen. Top of Page \| Go to Page 1