Welcome to Craft, Noble and Company's e-news update. Now that half of the fiscal year is over, here's the most current news. 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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Make summertime tax-saving time

Summertime fun can be made even more enjoyable by adding tax savings. Here are some tax-saving ideas to consider.

• If you have summer travel plans and the primary purpose of your trip is business, you can deduct all the travel costs to and from your business destination and all other business-related costs even if you add on a few extra days for pleasure. You can't deduct costs related to the pleasure portion. Including a spouse or friend on your trip is permissible, but you can't deduct the additional costs for that person.
• If you itemize your deductions, you can deduct the mortgage interest and property taxes paid for your vacation home. A boat or RV can qualify as a vacation home if it has sleeping quarters, cooking facilities, and a bathroom. If a retreat also serves as rental property, you can control your tax deductions by changing the number of days you use it for vacation.
• If you and your spouse work, the cost of sending your children to a summer day camp may qualify for the child care credit.
• If you own a business, consider hiring your child for the summer. Your child can earn up to $5,800 tax-free this year, and your business is entitled to a deduction for the wages paid. You must pay your child a reasonable wage for the work performed. If your business isn't incorporated, a child under 18 is not subject to FICA taxes.

If you have any questions please contact Craft, Noble & Company.

What's New: Unemployment benefits: Are they taxable?

Unemployment compensation can provide a welcome buffer while you're transitioning to a new job. But with the help comes a tax effect, because the benefits provided under federal or state laws are usually includable in your income in the year you receive them.

As a result, you may want to complete Form W-4V, Voluntary Withholding Request, to have federal income tax withheld from your benefits. You can also ask the unemployment office to withhold state income tax. Alternatively, you can adjust or begin making quarterly estimated tax payments.

However, if you make repayments in a year following the receipt of the benefits, the tax treatment depends on how much you repay, and can be claimed either as an itemized deduction or a credit against your current-year tax.

Please contact us if your employment situation changes. We can help with tax and benefit related issues such as severance pay, retirement account rollovers, and deductions related to job hunting.

Keeping an eye on your company's cash

Do you regularly monitor your company's cash accounts? You should. Even if you leave the job to your bookkeeper or accountant, you should stay aware of where the cash is going and how the spending is approved. Along with inventory "shrinkage," theft or improper expenditures of cash are among the chief sources of loss for small companies.

Periodically, you hear about a huge loss caused by an employee who's been quietly embezzling cash for years. And it's not always employees at fault. In fact, the vast majority of employees are honest and loyal. Outsiders can be stealing your cash too, by submitting false or inflated invoices that are paid without proper review.

How to reduce risk of loss

What can you do to reduce the risk of losses? The textbook answer is "internal controls." Unfortunately, many small companies don't implement proper controls -- either because there's not enough staff or because they think it's too much trouble.

Regardless of the size of your business, here are some steps you can take:

• Maintain a strict rule that all invoices must have an approval signature before being paid. Nothing focuses a person's mind like having to sign his or her name on something.
• Have a policy that all employee expense reports must be signed off by a higher-level employee.
• Make it a rule that the person who prepares a company check can't sign that check.
• Ask your bookkeeper or accountant to give you a signed note each month affirming that the bank statement reconciled.
• Every few months, ask to see the bank statement and canceled checks for the prior month. Review them in detail. The owner/manager's review of the bank statement puts a bookkeeper on notice that the boss is keeping an eye on transactions.

Please contact Craft, Noble & Company for details or for assistance in improving controls over your company's cash.

Wedding bells are pricey...

June is the month for weddings. According to a survey of 19,000 brides who married in 2010, the average cost of the wedding was $21,592. This didn't include the engagement ring (an extra $5,392 on average) or the honeymoon (an additional $4,446). The average spent on each wedding guest: $194.