ADA TAX PROFESSIONALS 9140 Ustick Road Boise ID 83704 377-4303 by lifemate


         ADA TAX PROFESSIONALS 9140 Ustick Road Boise ID 83704 377-4303

                                                                                                  January 2008
                                                                                            January 2007
                                                TAX NEWS

You have probably seen the headlines – Some                 audit? You might want to pull out your camera
refunds will be delayed. Congress dragged their             and take photos of your donations before giving
heels regarding the AMT exclusion creating a                them away, especially if you are taking a large
problem for IRS in setting up their computers to            deduction.
process tax returns. We anticipate that only a
                                                            Kiddie Tax This refers to children’s investment
very small number of our clients will be affected.
                                                            income over $1700 taxed at the parent’s higher
Home foreclosures are becoming more a reality               rate. For years it has applied to children under
for Americans. If you find yourself in this                 age 14, now those under 18 who do not support
situation you may have taxable income due to                themselves, and in 2008 age 24.
debt foregiveness. Recent legislation and old
                                                            In an important development for recently-
rules covering specific situations will eliminate
                                                            widowed spouses, a new law extends the period
most taxes due to foreclosures.
                                                            of time during which a surviving spouse may use
Get a new mortgage in 2007 to acquire your                  the joint-return filers’ $500,000 home sale gain
home or make major improvements? Are you                    exclusion before being treated as a single
being charged for mortgage insurance on this                individual entitled only to a $250,000. This law
new mortgage? It may be deductible.                         takes effect starting with sales on or after
                                                            January 1, 2008.
IRS is requiring that your noncash charitable
contributions be in good or better condition to
qualify as a deduction. The question not yet
answered: How to prove this in the event of an

                                           FOR BUSINESSES
Businesses and Rentals: The Business mileage rate for 2008 is 50.5 cents per mile. For 2007 it is 48.5
cents per mile. Keep good records or you miss out on the valuable deduction.

Corporate reminders: 1) The filing deadline for corporate returns is March 15. 2) Are you having official
director and shareholder meetings? Important decisions need to be recorded in the minutes. This helps
protect your corporate shell.

   Check out our website at for helpful links to federal and local government sites and to read our
   current and past newsletters. Also, our Questionnaires and Appointment Checklists can be downloaded from our
   website. In addition, you will be able to check on the status of your tax refund.
                                  OTHER ITEMS OF INTEREST

We now have 3 methods for you to pay us for our           Ada Tax Professionals = Teamwork. During our
services. Cash, check or debit. We experimented           off season you may have had the opportunity to
with debit last year and decided that despite the         speak with someone other than the person who
extra cost to us we want to give you that extra           usually handles your return. We try to take care of
convenience.                                              your needs immediately rather than having you
                                                          wait for our return to the office. We do hope this
Extensions - We have been charging a $50
                                                          has been a positive experience for you. We also
deposit to immediately compensate us for the
                                                          help each other throughout the year analyzing
extra handling. This created an unacceptable
                                                          your different issues. As some of us start cutting
administrative expense. Soooo we are changing
                                                          back on our work schedules it will take even more
our policy. We will charge a fee at the time we do
                                                          of a team effort. If at any time we don’t handle
the extension. The fee will depend on the amount
                                                          your situation properly, please share your
of time we need to prepare the extension plus any
                                                          concerns with your preparer.
estimates calculated. Most of you who file
extensions can expect a $20 - $30 fee.

SO – YOU RECEIVED A NOTICE FROM IRS or perhaps the State
Don’t panic! We are finding both entities don’t always read the attachments or added forms. They may just
need more information. Of course, there are always other reasons to receive a notice. Bring it in or otherwise
get a copy of the notice to us to review. In most cases there is a simple cure.


Idaho Green Expo – May 17 and 18 Boise Centre on the Grove. FREE It promises to be comprehensive and
practical!! See the website –

Most of our clients are doing a wonderful                        next step? Are you shopping the
job of documenting and taking advantage of                       thriftstores? You will be amazed at the
the deductions and credits available for                         quality and prices which can be found.
donating their castoffs. Have you taken the

Give Toastmasters a try. The club structure (over 11,000 clubs worldwide with nearly 30 in the Treasure
Valley) provides a supportive environment with a proven format. To find a location that fits your needs
check out Elke belongs to the Lunchrappers Club which meets at the Boise Plaza,
1111 Jefferson (entrance on Bannock) from 12:05 – 1:05 pm Thursdays. They are having a special guest day
January 24 on the 1st floor. All are welcome.

Often the question arises: “How much money can I give my child without them paying taxes?” Here is some
information to help answer that question.

   1. The recipient, i.e., the child, does not pay taxes on gifts given to them.

   2. The giver may need to file a gift tax return, but is rarely liable for a gift tax. The amount given and
      reported will go against a gift tax and estate tax exclusion.

   3. When do you need to file a gift tax return? Whenever you give someone more than the annual
      exclusion in cash and/or value. For 2007 and 2008 it is $12,000 for any one person.

                    Example: You gave the following gifts in 2007.

             You give each of your children and grandchildren $10,000 at Christmas.
          Additionally you gave your son your car which had a fair market value of $6,000,
          birthday gifts to each of the grandchildren of $100 cash, and $15,000 to your daughter
          as a loan for a down payment on her house. You do not draw up a note and assume you
          will never see the money again. You need to file a gift tax return and report the gifts to
          the son ($16,000) and daughter ($25,000.) The gifts of $10,100 to the grandchildren are
          under the exclusion amount and do not need to be reported.

   4. When giving property instead of money be sure to provide the recipient with the basis you have in it.
      Should they sell the property in the future they need to know this information. Basis generally is the
      price you paid. Common examples: stock, real estate, antiques.

   5. The gift tax filing requirement applies to each taxpayer. Therefore, you and your spouse can both
      give $12,000 per person without reporting the transaction.

On October 11 our employees and spouses joined almost 500 people celebrating integrity in business at the
Better Business Bureau’s “Integrity Counts” awards banquet. In a stiff competition we were proud to receive
Honorable Mention. Thank you to all of you who helped us.

Community Tax Education – One of the “Integrity Counts” award” winners was Life’s Kitchen. We were
impressed with their efforts to teach young adults marketable skills and life skills. Miri and Amy will be
presenting their participants with a basic income tax class. Participants in SHIP’s program will also benefit
from an education session.

We welcome Jenn Ciszewski!! She brings with her a couple of years of tax preparation
experience which we will capitalize on to continue bringing you the best accurate service possible.

BEGINNING JANUARY 28, WE WILL BE OPEN FROM 8:30-6:30 M-TH, 8:30-6:00 FRI, & 10:00-2:00 SAT.
                             PREPARING FOR YOUR RETIREMENT:

Setting aside adequate funds for retirement can keep you independent longer. Building the retirement nest
egg can minimize the burden placed on your children - financially, physically and often emotionally. Let’s
look at some of the retirement plans to which you could contribute. If you are low income you can even get
a credit to help fund your contribution.

   Employer offered plans: If your employer offers a tax deferred plan, i.e., 401(k) or 403 (b), take
   advantage of the tax savings. If your employer matches your contributions, make a point to contribute
   enough to maximize the amount of free money you can receive.

   IRAs: Traditional (tax deferred) and/or Roth (earnings tax free) are available to most taxpayers.

   Self Employed: SEPS, SIMPLES, SE 401(k)s, and KEOGHs are all possibilities with different rules.

The sooner you start taking advantage of these retirement opportunities the more financially secure you will
be later.

                       ACTIVE IN YOUR CHURCH OR A NONPROFIT?

Although these organizations generally have tax exempt status, it is for income tax. Here are some tax related
and informational reporting requirements to be aware of:

        Employment: As employers, nonprofits are subject to the same rules as for profits. Churches
           have special rules especially for their ordained clergy.
        Sales: These organizations must pay sales tax on the goods they buy for their own use and collect
           sales tax on their sales.
        Unrelated Business Income: Income collected outside the purpose of the nonprofit is taxed.

Informational Reporting
      Fm 1099 Misc should be issued to individuals and partnerships who are paid to perform services
        for the organization or from whom property is rented.
      Fm 990 must generally be filed by nonprofits with more than $25,000 of gross income. The
        main purpose for the reporting is to make sure the tax exempt purpose of the organization is
        being served and that nobody in control is benefiting unreasonably.

The barrels are gone. The cones are gone. Construction is gone from our doorstep – Hooray! The road is
beautiful. It has 4 lanes with a turn lane.
Our parking lot is to the east of our building with plenty of room. Although temporarily just gravel it is
definitely an improvement from our former situation.

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