IMPORTANT DATES AT ROSS TAX & ACCOUNTING:

• August 2nd: 2009 RETIREMENT OR EMPLOYEE BENEFIT RETURNS (5500 series) DUE.  The normal deadline is July 31st, but since that day is a Saturday, the deadline moves to the next business day, August 2nd.

• August 14th: HAPPY BIRTHDAY, JORDAN.  We hope you have a wonderful day.

• September 15th: 2009 CORPORATE TAXES DUE. You must have your 2009 corporate taxes filed by this date (it is the final deadline for extensions).  If your taxes are not yet done, and you have not dropped off your information, please do so now.  Jordan will be calling to remind you that the deadline is six weeks away. 

HOMEBUYER TAX CREDIT IS EXTENDED

If you signed a contract before May 1, 2010 to buy a new home, but have not been able to close the deal, you still are eligible to apply for the homebuyer tax credit.  The deadline for finalizing the paperwork on your new home has been extended through September 30, 2010.

Here's what you need to know:

• The extension applies only if you already had a contract in place by April 30, 2010.  The new deadline is available for both first-time homebuyers and long-time residents.

• The maximum credit remains unchanged ($8,000 for first-time homebuyers and $6,500 for long-term residents), as do previously stated qualifying rules.

• You can claim the credit on your 2009 or 2010 personal tax return.  If you have already filed for 2009, we can help you amend that return and file again.  During preparation, we will assist you in completing Form-5405 (First-Time Homebuyer Credit & Repayment of the Credit) and will make sure the necessary proof-of-purchases are attached to fulfill the tax credit requirements. 

Not sure if you qualify?  We can help.  Please contact us for more information.

DO YOU HAVE A CASH RESERVE?

If not, it's time to start building one.  Yes, we know ... somehow after the bills are paid and the expenses are met, there's hardly a dime left over for your savings account.  With much of the population living close to their financial limit these days, saving has taken a back-seat.  And this is a dangerous situation.  If faced with an emergency, which is happening more often than not, your financial situation can very quickly change from adequate to critical.  Without a cash reserve, you could find yourself in serious trouble. 

The best way to begin saving is to set aside each month an amount that you are comfortable with.  Setting up automatic withdrawals from your checking account, to be deposited into your savings account, is a fool-proof way to make sure you save.  Once you've built your fund, avoid all temptation to raid it for non-essentials.  We suggest that you invest the money into a safe and liquid account.  The goal is for the money to be accessible ASAP without losing too much in interest.  Short-term bank CD's, savings accounts, or money market accounts are all good options.  Expert opinions vary, but we suggest that you have a cash reserve of at least three month's living expenses at-hand at all times. 

No matter how carefully you plan your expenses, you can never anticipate an unexpected emergency that will be lethal to your budget.  With job security being practically non-existent, it is critical to have cash at hand.  As Wally always says, "cash is king!" 

So do us all a favor and start saving today - no matter the amount.  And once you reach your cash reserve goal, you can start considering other financial goals.  If we can be of assistance in helping you plan, please contact us.

WORKING AFTER RETIREMENT

There seems to be a new trend for the retirees of today's world.  No longer does everyone wish to move to Florida, join a retirement community, or take care of their grandchildren.  Now that individuals are living longer and healthier lives, people want to use these years to earn additional income and to stay active.  The extra money can be used to offset the high cost of today's living, to help fund a nestegg that was never fully filled, or to make up for a hard hit that a 401K took when the stock market crashed.  No matter the cause for continuing to work, extending your work life affects your taxes and retirement benefits. 

"Normal" retirement age, as seen by the department of social security, is between 65 & 67 depending on your birth date.  If you were born in 1937 or earlier it's 65; if you were born in 1938 or later, "the age gradually increases until it reaches 67 for people born after 1959."  However, you can elect to start receiving lower payments as early as age 62, or you can maximize your benefits by forgoing them until you are 70.  Once you reach age 70, there is no incentive to postpone your social security benefits any longer.  Below are a few key pointers we suggest that you keep in mind:

• Earnings Limit - If you are working, we would advise you to forgo the early payment option.  Benefits received before full retirement age will be reduced by $1 for every $2 earned over an annual limit (currently $14,160).  However, you will receive a compensating increase when you do reach full retirement age, and your payments will not be reduced thereafter no matter how much you earn. 
• Taxable Benefits- Whether or not you draw benefits, you will continue to pay social security and Medicare taxes on any income you earn.  Up to 85% of your benefits may become subject to income tax, depending on the amount of your other income.
• Medicare - Medicare eligibility begins at age 65.  The program encompasses four types of coverage: hospital insurance, general medical insurance, Medicade Advantage, and prescription drug coverage.  For further info, check out the official Medicare website: www.medicare.gov

Working beyond retirement can involve several complex decisions.  If any of your concerns or questions center around the tax or financial side of retirement, please contact us and we can assist you in planning the outcome that is best for you.

GIVE YOUR BUSINESS A COMPETITIVE EDGE

With Super Wal-Mart's going up on every corner, it is no surprise that smaller companies are being squeezed out by their higher-volume and lower-priced competitors.  When competition is based solely on price, it is a burdensome struggle for small or mid-size business to survive.  Therefore, as a small-business owner, how do you differentiate yourself?  How do you create a niche or identify your business by something that isn't based on cut-rate pricing?  Obviously you need to offer something that your competitors don't.  Something different - the competitive edge. 

So where do you begin?  We suggest you start by identifying your target customers and their needs.  Let's say your company sells beanbags.  You might decide to focus only on beanbags with high quality fabric and the best beans inside.  These top-of-the-line beanbags will attract customers that will most likely pay a premium for the higher quality product.  Since your beanbags last longer than the ones at the lower-priced store, you have created your competitive advantage.  Or, perhaps you've dined at expensive restaurants that offer an unusual menu, a remarkable atmosphere, or superior service.  Such eating establishments are often packed at night.  Why?  Because customers perceive value in the products and services that these businesses offer, a value they're willing to pay for. 

The key is to identify the qualities that make your company different.  How do you discover such qualities?  One way is to study your competition.  Clip their ads, examine their websites, buy their products.  Essentially, do your due-diligence so that you can determine what makes your product or service different and more valuable than that of the other guys.

Once you've identified the qualities that could set your company apart, prioritize them.  Decide which would be the easiest thing to develop, which would address your customers' most important buying criteria, and which would be the hardest for your competitors to emulate. 

Finally, seek to convey that value to your target customers.  The goal is to "brand" your product - so be clear about what you want to be in your customers' minds.  Sometimes this can be easier-said-then-done, so if you need help identifying your business' competitive edge, give us a call.

Don't Forget:  If you filed an extension and have not brought us your 2009 tax information, now's the time!  

Corporate Taxes Due:  September 15th

Personal & Partnership Tax Dues: October 15th 

This newsletter provides business, financial, and tax information to clients and friends of our firm. This general information should not be acted upon without first determining its application to your specific situation. For further details on any article, please contact us.