Summer 2008

Unlock a Hidden Asset
Many of our clients have Key Person Life insurance or insurance policies to fund a buyout through their business. When retirement occurs or their business is sold, the need for the life insurance often no longer exists. Typically, the individual has two choices. Read more...

Should You Go “Solo” with a 401(k)?
The retirement plan options available to sole proprietors have expanded in recent years. Case in point--if you file taxes as a self-employed individual, you can take advantage of a 401(k) plan the same as a corporation with hundreds of employees. Many of the obstacles to this arrangement, including the high costs for administering such a plan, have been eliminated. Read more...

Are You Minimizing the Financial Risks of Your R&D
In the past the research tax credit was largely reserved for the large manufacturers because the IRS required an academic approach to conducting a process of experimentation. Around 2001 the IRS eased up on that stance, realizing that most companies cannot take an academic approach to research and development because it is not cost effective. Read more...

Charitable Volunteers: Step Forward to Claim Deductions
Unfortunately, you cannot deduct the value of the time and effort you devote to charitable causes. However, if you incur expenses in the course of your charitable activities, you may be able to deduct your out-of-pocket costs on your personal tax return. Read more...

How to Save Tax Dollars by “Going Green”
The latest trend in the business sector has less to do with profitability and more to do with accountability. It is all about taking steps to protect the environment. Fortunately, there are a number of ways that employers and employees can implement environmentally friendly changes while saving taxes and money in the long run. Here are several areas for your consideration. Read more...

Step Up to Higher Section 179 Deductions
The Economic Stimulus Act of 2008 increased the annual limits for the Section 179 “expensing” deduction. For 2008, your business can currently write off up to $250,000 of qualified business assets placed in service during the year. Prior to the new law, the maximum deduction was $125,000 (inflation-indexed to $128,000 for 2008).  Read more...

Q & A for Your Retirement
Have you started planning for retirement yet? It is not something you can put off much longer, especially if you hope to call it quits before you are eligible to receive full Social Security benefits. Here are several questions and answers to think about as part of an overall process. Read more...

Federal Minimum Wage Rate Increase
As of July 24, 2008, the federal minimum wage rate increased to $6.55 per hour, up from $5.85. This is the second of three increases provided for by the enactment of the Fair Minimum Wage Act of 2007. A third minimum wage increase to $7.25 per hour becomes effective on July 24, 2009. Indiana minimum wage laws follow the federal rate, but many states have minimum wage laws with provisions that differ from the federal law. To find out about applicable minimum wage laws for your state, visit the U.S. Department of Labor's website.

IRS Increases Optional Standard Mileage Rates for Second Half of 2008
In recognition of increasing gasoline prices, the IRS has announced an increase in the optional standard mileage rates for the second half of 2008. The standard mileage rate for business miles driven from July 1, 2008 through December 31, 2008, will be 58.5 cents per mile, an increase of eight cents over the rate for the first half of the year. The standard mileage rate for medical and moving expenses has been increased to 27 cents per mile from 19 cents per mile. The standard mileage rate for charitable purposes, however, remains unchanged at 14 cents per mile.

Reduction in Length of Extension for Partnerships, Trusts and Estates Tax The IRS has issued regulations reducing the length of time partnerships, trusts and estates can extend the filing of their annual tax returns from six months to five months. For example, in the case of a calendar-year partnership that files an extension, Form 1065 will need to be filed by September 15, rather than October 15. This change should enable individual taxpayers to obtain the Schedule K-1 information necessary to complete their tax returns by their October 15 six-month extended due date. This one-month reduction in the six-month extension period is effective for returns due on or after January 1, 2009. Please contact us if you have any questions regarding this change.

Somerset CPAs News
Calling All Bloggers - We are taking our blogging project to the next logical level. We started the Somerset Success Strategies Blog back in February, and it has been a success. We have received approximately 2,000 visits per month since March. We would now like to include our community of clients, prospects, referral sources and friends of the firm in the project by allowing Guest Posts. Learn how...

Seminars and Training Classes - Crystal Reports and FRx Training, Value Chain Analysis & Competitive Analysis, College Funding Strategies and Investing for Women are just a few titles of our upcoming seminars and training classes.  Please visit the Seminars page of our web site for details and our full 2008 calendar.

Community Events - Somerset is a proud sponsor of the Penrod Arts Fair again this year. Indiana's nicest day in 2008 will be Saturday, September 6 when the 42nd Annual Penrod Arts Fair is held on the beautiful grounds of the Indianapolis Museum of Art. Please visit their site for additional information.
 

Wherewithal is provided by Somerset for our clients and other interested persons upon request. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review.

For additional information on the issues, please contact a member of the firm. Somerset provides total financial solutions, including accounting, assurance, information solutions, litigation & valuation, tax, wealth management and management consulting to entrepreneurs and their businesses. This document is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer.