Client letters:
2009 Year End Tax Planning Tips

Year 2009 will soon be drawing to a close. Here are some year-end tax planning tips as we wrap up the year:

• If you have investments in which you have an unrealized loss, you should consider whether you should realize those losses by selling the investments before the end of the year.
• If you have any trusts that make discretionary distributions, you should consider how much should be distributed in 2009 in order to have the income taxed on the return in the lower tax bracket, the trust or the beneficiary.
• If 2009 will be a relatively low tax year for you, you may wish to consider selling investments in which you have an unrealized gain, in order to pay tax on those gains at relatively low rates. For some taxpayers, capital gains will be taxed at a zero rate in 2009; or you may wish to convert some or all of your IRA or other retirement accounts to Roth accounts if your income is less than $100,000.
• If you have a household employee, remember the payroll tax filings are due by January 31, 2010.

For more tax planning tips, please click here. And of course, you are always welcome to call or email.

We Are Getting Ready to Prepare Your 2009 Income Tax Return
It is time to begin planning to prepare your 2009 income tax return. We very much hope you will again be allowing us to assist you in this important task. In today’s challenging economic conditions, it is especially important that you have qualified tax professionals on your team.

Meet Your 2010 Tax and Financial Planning Team
Your CPA is not one person, but a team of professionals who work together to serve you. All of us are excited to work with you again this year.

We are pleased and proud to tell you that Nick Stewart is now a CPA. He has met stringent education and experience requirements and passed a tough four part CPA exam. This will be Nick’s third year working with our clients on their personal and business taxes.

Alisa Dodd continues as our office administrator, with responsibility for much of the investment related recordkeeping and reporting, appointment scheduling, bookkeeping and tax return processing.

Amanda Chang, CPA, is beginning her third year as a shareholder in the firm, and vice president. She has assumed primary responsibility for our firm’s tax practice and is increasingly taking on more roles in client and firm management. We benefit from her considerable expertise with business clients, including corporate, partnership, and multi-state tax matters. She has worked with the majority of our individual tax clients as well. She is looking forward to working with all of you again this year. Amanda has a Master of Science in Taxation and is also an investment adviser representative.

Adele Bolson is devoting more time to general business consulting, personal financial planning, and management. She very much looks forward to seeing our clients again.

It is a great joy for all of us to help our clients meet their financial and life goals.

We Appreciate Referrals
The highest honor you can bestow on us is referring someone you care about. Your generosity in referring your friends and colleagues to us has enabled our firm to grow. And we want you to know that we appreciate your trust and confidence in us and will take good care of everyone you send us.

Have You Seen Our Website?
We encourage you to periodically visit our website at www.bolsoncpa.com, where you can find more information about our firm and services we offer, answers to frequently asked questions, and links to other valuable websites. We also periodically post articles about topical tax and financial subjects. You may request appointments directly on our website, including an appointment to prepare your income tax return.

Services We Offer
Many people think primarily of taxes when considering the services of a certified public accountant, and indeed tax return preparation is a major core of our work. In addition to income tax preparation, we provide several other services.

For our business clients, we review or compile financial statements, consult on a wide variety of business issues, assist with recordkeeping, and assist new companies with a wide variety of start-up issues.

We provide investment management and financial planning, always with our clients’ best interests as our only concern. We have been especially gratified that since becoming a registered investment adviser in 2000, many of our clients have entrusted us with managing their money.

As the years pass, more of our clients have needs for estate planning, trust administration, and estate administration. We have experience and knowledge in the complete estate administration process, including preparation of federal estate tax returns (the 706), state inheritance tax returns, and estate income tax returns.

Tax organizers
Use of tax organizers helps to minimize errors caused by omitted data. We will print organizers for all of our clients and mail them to you, unless by December 31 you send an email to alisa@bolsoncpa.com requesting that we instead email a pdf file of your organizer, which you can print yourself, or that we do not send an organizer. We don’t use electronic organizers, since we have found that completing them on line is a lot of work for our clients and doesn’t reduce the time we will spend in tax return preparation. The organizer does contain personal information. It is possible for this information to be stolen and misused, whether it is sent by U.S. Mail or email.

Tax Interviews
Our experience is that you will receive more value from our services, and the tax return preparation process is more efficient and accurate, if we meet to go over your tax data. Please don’t feel you must have every document before we meet. We understand that K-1s from other parties may arrive later, and you may receive corrected 1099s. As long as we receive those final items by April 1, we will do our very best to complete your tax return, or draft it for your extension payment, by April 15. But let’s not wait for them to get started on your tax return; please schedule the appointment for the earliest date by which you can summarize the data over which you have some control.

We schedule these appointments from February 1 through March 18. Investment brokers have until February 15 to send 1099s. In order to complete your tax return by April 15, or to draft it so that an accurate estimate can be made of taxes to be paid with your request for extension, it is important that we receive the bulk of your data no later than March 18. We need the time between March 18 and April 15 to complete tax returns and extension estimates with the information you have brought to us.

We will start scheduling appointments January 11, so if you get your appointment request in by then, you will be given first priority in your choice of appointment times. If you wait until later to schedule your appointment, it may be difficult to schedule you at your preferred time. Please complete your appointment request on our website at www.bolsoncpa.com under “contact us”, or email your appointment request to alisa@bolsoncpa.com, or mail back the appointment request form at the end of this letter.

Extensions
April 15, 2010 is the deadline for paying your 2009 income tax, and either filing your return or requesting an extension until October 15, 2010. If your taxes are not paid in full by April 15 interest will be charged, and often penalties too. And of course you will still need to make your April, June, and September estimated tax payments for 2010 even though your 2009 tax return has been extended. By March 18 we need all of your data that we are to use in drafting your income tax return so that we can advise you of how much should be paid.

If we are going to take your check with your extension request to the IRS to obtain proof of delivery, we need your check made out to the United States Treasury in our office by 5:00 p.m., Friday, April 9.

For a copy of a brochure explaining the extension process in more detail, please call or email Alisa.

Schedule Recap

• March 18:
  We must have the bulk of your tax data in order to prepare your tax return for filing by April 15.
• March 18:
  If we are going to draft your tax return to estimate taxes due by April 15, we need all the data you wish us to consider in that draft today.
• April 1:
  We need your final open items such as missing K-1s.
• April 15:
  Taxes must be paid, and returns or extensions filed.
• April 15:
  Your first 2010 estimated tax payment is due.
• June 15:
  Your second 2010 estimated tax payment is due.
• September 15:
  Your third 2010 estimated tax payment is due.
• September 24:
  We need every last bit of your tax data! This time we really mean it!
• October 15:
  Extended tax returns are due.

Of course we do our best to work on tax returns whenever we receive your data, but we may not be able to complete returns by IRS deadlines when data is received late.

Auto Logs
Any deduction claimed for business use of an automobile is likely to be disallowed in an IRS audit unless you have kept records of the number of miles driven for business, the date, where you went and for what purpose. We would be happy to mail you auto logs for that purpose, or send you by email an Excel template that you can use to record business miles. To request either the auto log or Excel template, please call Alisa, send her an email, or write your request on your appointment request.

Billing Policy
We strive to be fair in our billing: fair to you, the client; fair to other clients that we are providing similar services to; fair to us, the professionals that are providing you with quality service. How much we bill for each tax return depends on the complexity of the tax situation and time spent on the return. Your prior year fee can be a good indication of your 2009 fee. We will be happy to provide you with a fee quotation any time. Our minimum fee for a personal income tax return (1040) for 2009 is $400.

Privacy
We respect your privacy. The personal, non-public information we collect about you has been derived from information that you have provided to us directly or indirectly and from transactions with us. We do not disclose personal information about you to anyone, except at your specific request, or as required by law.