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Straight Talk About Small Business Success


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									              A Warm Welcome To                                          Business Question/Tip:                                           Straight Talk About Small Business Success
              New Business Clients                            Q. I own stock which became worthless last year. Can
                                                                                                                                                Tips and Trends For The New Jersey Small Business Owner
                                                              I take a bad debt deduction on my tax return?                                       By Salim Omar, CPA. The Leading Authority For Small Businesses in New Jersey
                                                                                                                                                   (732) 566-3660 • Email: • Issue 16, September 05
                                                              A. If you own securities and they become totally worthless,                          Main Ofce: 49 Cliffwood Ave, Suite 200, Cliffwood, NJ 07721 • 2nd ofce: 79 Main Street, Woodbridge, NJ 07095
                                                              you can take a deduction for a loss, but not for a bad debt.
 Deborah Walker and Andrew Koerner of Koerner, Walker
 Wealth Management LLC located in Princeton, NJ.                                                                                      Welcome and Happy Labor Day                                                     Free Gift To Small Business
                                                              The worthless securities are treated as though they were
 Telephone (609) 452-7801.                                    capital assets sold on the last day of the tax year if they were                                                                                         Clients Is A Real “Winner”
                                                              capital assets in your hands. Report worthless securities
 Mike Erickson of Innovative Remodeling Solutions Inc.        on line 1 or line 8 of Form 1040, Schedule D, whichever
 located in Cranford, NJ. Telephone (908) 245-3994.
                                                              applies. In columns (c) and (d), write “Worthless.”
 Gani Barakaev of Hair N Now located in Greenbrook, NJ.
 Telephone (732) 968-0737.
                                                              FREE Report Just Released
                                                                                                                                                                                                              If you are my small business client, you should have received by
 Atef Alame of OK Pizza Corporation located in Dumont,                                                                                                                                                        now a copy of a book I recently read titled “The Winner Within”
                                                              WARNING: Not Reading This New Report Can and Will HURT
 NJ. Telephone (201) 385-1944.                                Your Small Business. Local insurance expert and author, Art                                                                                     by Pat Riley. After we mailed the book, I was swamped with
                                                              Bernaducci reveals his groundbreaking secrets in his latest                                                                                     emails of Thanks. While I have not been able to individually
 George Kassay and Jay Larson of Eclipse Irrigation Inc.      report “What Every Business Owner Must Know To Protect Their                                                                                    respond to each email, I want to collectively respond here with
 located in Matawan, NJ. Telephone (732) 583-8783.            Wealth.” To order a free copy of the report, call the pre-recorded                                                                              a “You are welcome.”
                                                              24 hour hotline: (800) 335-9953 Ext. 9008.                                   Salim resting on the top of Mount Washington
                                                              Limited to rst 27 people who respond.                                                  after a hard days climb.

                                                                                                                                   The saying goes “Time Fly’s When You Are Having Fun.”
               The Omar Group, CPA                                                                                                 This Summer was a lot of fun. The Grande Finale for
 “Accounting Guidance in Plain English That Will Grow
Your Business and Improve Cash Flow and Protability”                                                                              me was a three day trip to Mount Washington in New
                49 Cliffwood Avenue, Suite 200                                                                                     Hampshire. I had never taken on a mountain of this
                      Cliffwood, NJ 07721
                                                                                                                                   magnitude (almost 6,300 feet). Wow, what an experience it
                         (732) 566-3660
       2nd ofce: 79 Main Street, Woodbridge, NJ 07095                                                                             was. The scenery was absolutely breathtaking. The steep
                                                                                                     hike, although extremely challenging at times, was fun.

                                                                                                                                                 Free Tickets Inside
                                                                                                                                   Shifting gears, the Fall season is upon us and it’s time
    What’s Inside?                                                                                                                 to focus in and take your best shot at making the last
    - Welcome & Happy Labor Day!
    - NJ CPA Gets Downright Frustrated.                                                                                            phase of 2005 a successful one. The best and most
    - FREE Gift To Small Business Clients Is A Real Winner.                                                                        powerful resource I can offer you is my New Small Business
    - A Warm Welcome To New Clients.
    - Donating Cars To Charity - Beware Of New Tax Rules.                                                                          Success Seminar. I will share with you a whole lot of
    - Quotes Of The Month.                                                                                                         valuable strategies, ideas and techniques, things that I
    - Are Ya Nuts - Personal Letter From J. Squirrel.                                                                              would typically share with my high paying consulting clients
    - A Crafty Entrepreneur.
    - Did You Know?                                                                                                                only. The admission fee is $195 (FREE if you receive this
    - On Eating Your Words.                                                                                                        newsletter). Don’t wait. Call Dorothy at (732) 566-3660 to
    - Can I Take A Bad Debt Deduction?                                                                                             validate the two tickets enclosed with the insert.
           Unsolicited Testimonial                                            Donating Cars To Charity -                                     Are You My Client Of The Month?.                                              On Eating Your Words
Jimmy and Madeline Daif of Villa Pizza and recipient of the                   Beware Of New Tax Rules                                       Every month I will choose a very special Client Of The            A vacuum salesman wound his way into a remote valley. Once
Client Of The Month Award in August 2005 recently wrote:                                                                                    Month. It will be my way of acknowledging small business          there he found a little house and went up and knocked on the
                                                                      On June 3, 2005, the IRS released guidance on charitable              owners and saying “thanks” to those who support me and            door.
“We are very happy we were referred to your accounting rm a          deductions for donated vehicles. The American Jobs Creation           my business with referrals, word of mouth and repeat              “This machine is wonderful,” he crowed to the woman who
few years ago. You have helped us minimize our business and           Act (AJCA) radically changed the amount of the deduction                                                                                answered. “Just look at this.” He then took a bag full of dirt and
                                                                                                                                            business or have taken my advice to take their business to
personal taxes. Your timely and professional services give us         taxpayers can claim for their donated car.                                                                                              poured it on the carpet in the living room. “Watch,” he said. “If
the peace of mind that this area of our lives is well taken care
                                                                                                                                            the next level.                                                   this machine doesn’t pick up every last piece of dirt. I’ll lick it up
of. Thank you.”                                                       Fair Market Value v. Actual Sales Price                                                                                                 personally for you.”
                                                                      When donating a car to charity, a taxpayer traditionally was
                                                                                                                                                                                                              The woman smiled and said, “Would you like some ketchup to
            A Crafty Entrepreneur                                     allowed to deduct the fair market value. The new law changes
                                                                                                                                                                                                              go with that. We don’t have any electricity out in these parts.”
                                                                      this valuation to the actual sales price of the vehicle when sold
A little boy was selling lemonade                                     by the charity. The taxpayer is also required to get written and
at a stand. At the front of the                                       timely acknowledgment from the charity in order to claim the
stand he had a sign that said                                         deduction
                                                                                                                                                                                                                               Did You Know?
CAN DRINK.                                                                                                                                                                                                         - Julius Caesar was known as a great
                                                                      The AJCA does provide some limited exceptions under which
A woman who was passing by                                                                                                                                                                                         swimmer.
                                                                      a donor may claim a fair market value deduction. If the charity
thought about it, and even though
                                                                      makes a signicant intervening use of a vehicle --such as regular
the cup the boy stocked at his                                                                                                                                                                                     - There are more than 600 million
                                                                      use to deliver meals on wheels -- the donor may deduct the full
stand looked small, she decided to                                                                                                                                                                                 telephone lines today, yet almost half the
buy a lemonade since it was only                                      fair market value. For example, driving a vehicle a total of 10,000
                                                                                                                                                                                                                   world’s population has never made a phone
55 cents.                                                             miles over a one-year period to deliver meals is a signicant
                                                                                                                                                       Melanie at her store in Aberdeen                            call.
The boy handed her a cup and lled it up and she drank the            intervening use.
entire contents straight down and then held her cup out for a
                                                                                                                                                                                                                   - Alexander Graham Bell never phoned his
rell. However, the boy rmly shook his head no to her request.       The AJCA also allows a donor to claim a fair market value
                                                                                                                                            This months Client Of The Month is Nick and Melanie                    wife or mother because they were deaf.
“But it says ‘All you can drink’ on your sign for 55 cents,” the      deduction if the charity makes a material improvement to the
woman protested.
                                                                                                                                            Staneiro of Flowers By Melanie located in Aberdeen, NJ.
                                                                      vehicle. Under the guidance, a material improvement means
“That’s right,” the boy said. “It’s all you can drink.” (I had to                                                                           Telephone (732) 441-7741.                                              - Leonardo da Vinci could write with
                                                                      major repairs that signicantly increase the value of a vehicle,
re-read the ending punch line a couple of times before I got it.)     and not mere painting or cleaning.
                                                                                                                                                                                                                   the one hand and draw with the other
                                                                                                                                            Flowers By Melanie is a full edged ower shop that offers             simultaneously.
              Just For Fun TRIVIA                                     Interestingly, the IRS has also added an exemption not included
                                                                                                                                            a wide selection of gifts including: topiary plants, Brite Lite
                                                                                                                                            fragrant candles, candy trees, junk food baskets, pottery,             - In 1973, Swedish confectionery salesman
                                                                      in the AJCA. On its own, the IRS has determined that taxpayers
1. What do these people have in common?                                                                                                     ceramic plaques and many more thoughtful gifts.                        Roland Ohisson was buried in a coffin
                                                                      can claim a deduction for the fair market value of a donated
Howard Hughes, Helena Rubenstein, Walt Disney, Frank Lloyd                                                                                                                                                         made entirely of chocolate.
Wright, Bill Gates.                                                   vehicle if the charity gives or sells the vehicle at a signicantly
                                                                                                                                            Congratulations to Nick and Melanie Straneiro for being
                                                                      below-market price to a needy individual, as long as the transfer
                                                                                                                                            my Client Of The Month.
2. What do these people have in common?                               furthers the charitable purpose of helping a poor person in need
Frank Lloyd Wright, Walt Disney, H.J. Heinz, J.C. Penny.              of a means of transportation.

3. What do these people have in common?
                                                                                                                                                   Quotes of the Month                                             Do You Have A Tough
                                                                      If you intend to assert one of these exemptions, how do you
Mark Victor Hansen and Jack Caneld, co-authors of the
                                                                      determine the fair market value? Generally, vehicle pricing                The real act of discovery consists not in nding new
                                                                                                                                                                                                                 Accounting / Tax Question
“Chicken Soup For The Soul” book series; Richard Bach, author
of the mega best-seller “Jonathan Livingston Seagull”; Robert         guidelines and publications differentiate between trade-in,                        lands, but in seeing with new eyes.                       You Want Answered?
Ringer, author of “Winning Through Intimidation”.                     private-party, and dealer retail prices. The IRS consider the fair                            -Marcel Proust
                                                                      market value for vehicle donation purposes to be no higher than                                                                         I love hearing from my small business clients and
Trivia answers:                                                       the private-party price.                                                         Teach thy tongue to say: “I do not know.”              friends who enjoy reading my monthly newsletter.
1. College drop-outs or never attended college.                                                                                                                    Hebrew proverb                             I’m always looking to answer pressing questions you
2. All failed in business and went bankrupt early in their business   The new provisions of the Americans Job Creation Act certainly                                                                          might have about anything relating to small busi-
lives.                                                                                                                                          The pen is mightier than the sword, and considerably          ness. If you have a question, tip or idea, please
                                                                      make it less attractive to donate a car to charity. Using the
3. They had their book ideas and manuscripts rejected by                                                                                                        easier to write with.                         feel free to call me at (732) 566-3660 or email me
multiple publishers. However ultimately their rejected books          exemptions, however, you can still create a sizeable deduction
                                                                                                                                                                  -Marty Feldman                              at Perhaps I’ll feature
became bestsellers and they had great careers as authors.             while helping others who are less fortunate.                                                                                            you in a future issue!

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