LEARN MORE ABOUT THE CARD CHECK BILL ON A MARCH 4TH WEBCAST

As I have reported in prior blogs the so-called Employee Free Choice Act (EFCA) — also known as the "card check" bill — is federal legislation that would strip employees of their right to a secret ballot vote in union organizing elections. The bill would also give the federal government the power to set wages, benefits, and work rules, regardless of business size or type of industry. Here is another opportunity to learn more from an expert panel of labor lawyers, labor relations specialists and public relations professionals on how the card check legislation would negatively impact business and employees.

To participate in this Webcast, go to

http://www.infiniteconferencing.com/Events/mcafeetaft/register.php.

You may view the event live at 12 p.m. CT on Wednesday, March 4. Or you can view the recorded Webcast anytime after 3 p.m. CST March 4 simply by clicking on the link .

WARREN BUFFETT LETTER TO SHAREHOLDERS

If you want to get a very interesting view on not only the economy, but business practices you need to read Warren Buffett's letter to his shareholders. Unlike most CFO's he takes responsibility for errors in judgement. The report came out Saturday February 28, 2009. He reported that 2008 was the legendary investor's worst year ever. It also reported a grim fourth quarter, though it eked out a slight gain. (Berkshire's annual letter to shareholders.)

I think that Warren Buffett, called the Oracle of Omaha, is the only person the can write a report to the shareholders that is interesting to read. In one statement on a acquisition he quoted a country and western song lyric that went "I liked you better before I got to know you."

It is worth the time to read. Check it out.

EMPLOYEE FRAUD ON THE RISE

According to this ariticle in the Wall Street Journal fraud has increased because of the recession, and small businesses, which often lack internal controls, are particularly vulnerable. Experts say employees often are driven to steal cash or forge checks under pressure from family and friends to maintain their lifestyles or because they resent the owners. The Wall Street Journal

Listen to this... 100% of the clients that I work with that experienced embezzelment have said "I never expected that person to steal from me." 100%! Make sure that you have controls in place.

HERE IS WHERE THE $819 BILLION OF STIMULUS IS GOING

The Washington Post has great visuals of how the $819,000,000,000 where and when the stimulus money will be spent. Check it out.

http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html?referrer=emaillink

HERE COME THE TAX INCREASES

Back in October, as it became clear that Barack Obama would win the election, we started planning how to help our clients plan for the tax increases. Since then, the economy has fallen completely off the cliff. Taxpayers across America stopped worrying about potential Obama tax hikes and started worrying they wouldn't have any income to be taxed.

Shortly after the election, Obama discussed deferring tax increases to avoid squeezing the economy.Then last week, President Obama signed an economic stimulus bill offering nearly $300 billion in tax breaks (see previous blog entries). For a while there, it looked like raising taxes on "the rich" was just a political practical joke. (Unless, of course, you think jokes should be funny.)

Now Obama has begun releasing more detailed budget proposals. And now we're starting to see plans for future tax hikes -- tax hikes that will be costly either directly or indirectly to many taxpayer.Specifically, Obama proposes to let the Bush tax cuts expire for households making over $250,000 (to start with.) Marginal rates would climb back up to 39.6%. Capital gains taxes would climb back to 20% or even 28%. And Obama would cap the value of itemized deductions at 28%, so that even taxpayers in higher brackets save no more than 28 cents tax for each dollar of deduction. According to Bloomberg News, this would mean an extra trillion in tax over the next 10 years.

These proposed increases won't take effect until 2011 but we wanted to you to hear it from us first. We will be keeping you informed. Planning is going to be very important this year.

MORE INFORMATION ON CARD CHECK

In the last post I discussed the the so-called Employee Free Choice Act — also known as the "card check" bill — is federal legislation that would strip employees of their right to a secret ballot vote in union organizing elections. The bill would also give the federal government the power to set wages, benefits, and work rules for employers in a wide variety of industries throughout the economy.

To see an ad featuring former Democratic presidential nominee George McGovern, go to http://www.youtube.com/watch?v=afjp4Cx-3W0.

To see an ad from the Coalition for a Democratic Workplace, go to http://www.youtube.com/watch?v=N6yrZtq27e0.

MORE COMPANIES REDUCING PAY AND CUTTING HOURS

(Lincoln Journal Star) -- More businesses are freezing or cutting pay, reducing hours or requiring unpaid days off, and cutting contributions to retirement plans. Several companies with Nebraska operations have recently announced pay and/or benefit cuts. Some of those companies have yet to lay people off. Others have done so but are trying to avoid doing it again.

A Watson Wyatt survey of 117 companies across a broad range of industries in December found that 19% planned to freeze salaries during the next 12 months. It is only recently that companies have begun thinking of pay cuts, said John Bremen, global practice director of Watson Wyatt’s compensation practice in Chicago. Keeping employees on the payroll leaves a company in better shape to respond when the economy eventually turns around, said Ben Blackford, a doctoral student in the Department of Management at UNL.

MORE INFORMATION ON THE UNION CARD CHECK BILL

As I reported in an earlier blog entry the card check bill that President Obama pledged to support during his campaign is going to impact all businesses. Below is an article from the Washingon Post.

Below the editorial is an additonal update on the status from the State Chamber of Commerce.

If you would like more information on this subject please let me know.


EDITORIAL: 'Yes, they do want to unionize your gas station

(Washington Times) -- In a Feb. 12 editorial, U.S. Rep. Howard P. "Buck" McKeon (R-Cal.), the ranking minority member on the House Education and Labor Committee, writes that organized labor's top priority — replacing secret ballots with "card-checks" — would have "dire consequences" on America's small businesses. "Workers will lose their right to be heard, both on the question of whether to unionize and on the details of their first contract," McKeon writes. "Businesses will be unable to communicate with their own employees about what's best for their shared future."

He writes that some entrepreneurs and observers wrongly believe that firms with fewer than 100 employees are already or soon will be exempt -- and won't be affected by the "Card Check" bill. "Under current law, card check could indeed be applied to the corner grocery store-and probably will," McKeon write. "The local deli with a few high-school students washing dishes and working the cash register after school? They're a target too."

Small businesses are an obvious target for union organizing, he says. "Small businesses are the largest source of new jobs in this country. With nearly 600,000 workers being hit with pink slips last month, crippling the small-business community with card check might just be the worst thing we could possibly do for job creation and retention. But that is exactly what Congress is poised to do."

'Nebraska labor union chief denounces ‘lies’ in labor law dispute'

(Lincoln Journal Star) -- The biggest fight in years between labor and business interests is engaged. The Nebraska AFL-CIO has started a campaign against what its president calls “downright lies” presented on television ads and in other media by business interests opposing a proposed law that could make it easier for a union to organize a workplace.

Most business groups, including the Lincoln and Omaha Chambers of Commerce, have signed on to fight against the Employee Free Choice Act. They characterize the bill as a dangerous retreat from the traditional secret-ballot election to decide whether a union will represent employees for collective bargaining at a workplace.

Ken Mass, president of the Nebraska AFL-CIO, and other local labor representatives gathered Wednesday to promote what they called the advantages of union labor to the economy.

Last week, almost 200 state and local chambers of commerce from all 22 right-to-work states, including the Nebraska, Lincoln and Omaha chambers, sent letters to Congress opposing the legislation they call “Card Check.” Right-to-work states such as Nebraska make it illegal to require union membership or union dues payment in a union-represented workplace. “Given these difficult times, it is more critical than ever that businesses have the flexibility necessary to meet the needs of a challenging economy if we are to create an environment in which businesses can grow and create jobs,” the letter states. Card Check “is inconsistent with this critical goal.”

CAN I PUT GOLD COINS IN MY IRA?

Because of the economic downturn over the last few months my IRA has taken a big hit. I was thinking about moving from mutual funds to gold coins. One of the guys at coffee said that IRAs could not be invested in gold coins. Is he correct?

Justin

Justin, you aren't the only one that took a hit. Before I answer your question I want to make sure you realize that I am not a investment advisor. I am not making any type of judgement for or opposed to investing in gold. If I knew exactly how to invest I would not be sitting in my office but rather on the beach.

Okay, so much for the disclaimer.

It is possible for your IRA account to hold gold coins. Realize that you cannot actually hold them, they must be held by your IRA trustee. For example if you have $30,000 left in your IRA that is held by the Forth National Bank, the bank trust department that administers your IRA would have to purchase and keep the coins in the name of your IRA account. I presume that you could occasionally go to the bank and touch and fondle the coins but they could not be in your possession.

What is probably confusing the "expert" at the coffee shop (there seem to be a lot of experts at the coffee shop) is that the law states:

The acquisition of an IRA of any collectible is considered a distribution and therefore taxable. The law goes on to list precious metals as a collectible. But... to make things confusing the law later states that gold and silver coins are not considered collectibles. Go figure.

TAX DEDUCTIONS FOR POST SECONDARY EDUCATION

I was wondering if you could get me some information. My son will be going to school this fall. Are here some credits that will give us a tax break for education?
Rene

Rene, President Bush was not called the "Education President" for nothing. Under his watch there were several tax insentives put in the books the help defray the cost of education. Unfortunately everybody in Congress jumped on the bandwagon so we have several laws that we can select from. This makes it a little confusing. In addition the the credits below there may be some deductions.

You are right in that education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. Because they are credits rather than deductions, you may be able to subtract them in full, dollar for dollar, from your federal income tax.

The Hope Credit
The credit applies for the first two years of post-secondary education, such as college or vocational school. It does not apply to the third, fourth, or higher years of undergraduate programs, to graduate programs, or to professional-level programs.

• 
  It can be worth up to $1,800 ($3,600 if a student in a Midwestern disaster area) per eligible student, per year.
• 
  You're allowed a credit of 100% of the first $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified tuition and related fees paid during the tax year, plus 50% of the next $1,200 ($2,400 if a student in a Midwestern disaster area).
• 
  Each student must be enrolled at least half-time for at least one academic period which began during the year.
• 
  The student must be free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.

The Lifetime Learning Credit
The credit applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills, regardless of the number of years in the program.

• If you qualify, your credit equals 20% (40% if a student in a Midwestern disaster area) of the first $10,000 of post-secondary tuition and fees you pay during the year, for a maximum credit of $2,000 ($4,000 if a student in a Midwestern disaster area) per tax return.
• 
  You cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year. You also cannot claim either credit if you claim a tuition and fees deduction for the same student in the same year.
• To qualify for either credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent.
• The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.

These credits are phased out for Modified Adjusted Gross Income over $48,000 ($96,000 for married filing jointly) and eliminated completely for Modified Adjusted Gross Income of $58,000 or more ($116,000 for married filing jointly). If the taxpayer is married, the credit may be claimed only on a joint return.For more information, see Publication 970, Tax Benefits for Education, which can be obtained online at IRS.gov

HOW DO YOU GET YOUR STIMULUS CREDIT

Larry, I here that I am supposed to get some money from the government because of the law that the president passed. How do I get my share?

Edeth

Edeth, don't get too excited. What you are talking about is what the government calls the "Making Work Pay Credit." I have detailed information on this in a previous posting.

If you are an employee you will see the credit in your paycheck. The IRS will issue revised tables for your employer very soon. The 12 months of the credit will be crammed into about nine months of paychecks. That’s about $10-$20 extra per week. WHOOPEE!

If your are self-employed to get any advance benefit from the credit you will have to reduce quarterly estimated payments. Here is the rub.

The exact amount of the payroll tax credit for the year will be calculated when you file your 2009 return. If your income (adjusted gross income to be exact) is over $75,000 for individuals or $150,000 for married you will have to pay the money back with your 2009 return.

WHAT CAN THE STATE CHAMBER DO FOR YOU?

As you may know I am on the board of the Nebraska State Chamber of Commerce and also chair the Small Business Committee. Being on the board I have seen first hand the impact of the State Chamber on businesses large and small.

The following link shows some of the positive results of the State Chamber. If you are not a member I urge you to consider joining this worthwhile organization. In these economic times we need representatives in the capital making sure that the legislators understand the consequences of their action. By the way, your membership is deductible.



http://www.nechamber.com/pdfs/2008%20Scorecard%20brochure.pdf



For more information feel free to contact me or go straight to the chamber website at www.nechamber.com

FOLLOWUP QUESTIONS ON THE STIMULUS BILL

Congress has approved new economic stimulus legislation, the American Recovery and Reinvestment Act of 2009.

Following are a few questions and answers on the legislation from the IRS website.

Could the new legislation affect 2008 tax returns? Generally, no. The new legislation does not have any major impact for the vast majority of individuals preparing their 2008 tax returns due April 15. Instead, these changes will largely impact 2009 tax returns filed next year, in 2010. Taxpayers should continue to prepare their 2008 tax returns as they normally would.

There are a few limited areas in the legislation that could impact 2008 tax returns. For example, for some small businesses, changes in the net operating loss provisions could affect 2008 tax returns. More details on this and other changes — such as the first-time homebuyer’s credit — will be available soon.

When and how will people get the $400 to $800 “Making Work Pay” tax credit? Taxpayers will not get a separate, special check mailed to them like last year’s economic stimulus payment.

For many taxpayers, the additional credit will automatically start showing up in their paychecks this spring. For people who receive a paycheck, the credit will typically be handled by their employers through automated withholding changes. For some other people, the credit can be claimed when they file their 2009 tax return next year.

Does this new stimulus legislation have any impact on the recovery rebate credit for 2008 tax returns being filed now? No.

For those of you that would like to review a 11 page summary here is a link to the Senate Finance Committee website. summary of the key provisions

HERE IS HOW THE STIMULUS BILL WILL AFFECT YOUR TAXES

As you surely know, President Obama has just signed the "American Recovery & Reinvestment Act." While much of the news focuses on the spending provisions, it also includes $287 billion in tax cuts:

• 
  The act includes a new "Making Work Pay" credit for 2009-10 to offset the first $400 of Social Security tax you pay ($800 for joint filers). It phases out as your adjusted gross income (AGI) tops $75,000 ($150,000 joint).
• 
  There's a new higher education tax credit of up to $2,500 for your first $4,000 in college expenses. The credit phases out as your AGI tops $80,000 ($160,000 joint). You can also use Section 529 plan funds for computer-related expenses, including software and online access (2009-10 only).
• 
  Buying a car? You can deduct state and local sales and excise tax you pay on a new (but not used) car, light truck, RV, or motorcycle you buy between January 1 and November 30, 2009. The deduction is limited to purchase amounts up to $49,500 and phases out as your AGI tops $125,000 ($250,000 joint).
• 
  Buying a home? The act increases the "first-time homebuyer" credit from $7,500 to $8,000, extends the purchase period through November 30, 2009, and eliminates the requirement to repay the credit for homes purchased in 2009. This credit phases out as your AGI tops $75,000 ($150,000 joint).
• 
  Buying business equipment? The act extends the current $250,000 first-year expensing limit and 50% bonus depreciation provisions for purchases through 2009.
• 
  Finally, the bill "patches" the Alternative Minimum Tax, to protect 24 million mostly middle-income filers from the AMT's bite.

Congress passed these new rules with less deliberation than usual, so there's bound to be confusion. To learn more, call us at 402.362.6636.

USDA OFFERS RURAL GRANTS FOR EMERGING BUSINESSES

(AP) -- Groups that want help energizing their communities can apply for grants from the U.S. Department of Agriculture. The department is seeking applications for the Rural Business Enterprise Grant program, which is open to public bodies, nonprofits and American Indian tribes that want to finance small and emerging private businesses in rural areas. Grants may be used for technical assistance, acquisition of land, buildings and other things. Rural is defined as communities and cities with a population of 50,000 or less. The deadline to apply is March 31. For more information, visit http://www.rurdev.usda.gov/rbs/busp/rbeg.htm.

COMMENTARY: Ruin Your Health With the Stimulus Plan

On www.bloomberg.com, former New York Lt. Gov. Betsy McCaughey, now a senior fellow at the Hudson Institute, writes that no one from either political party is objecting to the health provisions slipped in the federal economic stimulus bill (H.R. 1) without discussion. Senators and congressmen "should read these provisions and vote against them because they are dangerous to your health," McCaughey writes.

The bill’s health rules will affect “every individual in the United States” by creating a new bureaucracy, the National Coordinator of Health Information Technology, which will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective, according to McCaughey. The goal is to reduce costs and “guide” your doctor’s decisions. Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time.”

McCaughey writes that many of the health reform provisions in the stimulus bill come from former Sen. Tom Daschle’s book, which says that aging Americans should be more accepting of the conditions that come with age instead of treating them. "That means the elderly will bear the brunt," McCaughey writes. "Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost-effectiveness standard set by the Federal Council."

She adds: "The health-care industry is the largest employer in the U.S. It produces almost 17% of the nation’s GDP. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry. Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This stimulus is dangerous to your health and the economy."

I CAN'T GET MY 1099'S

Larry, I am trying to file my tax return but I can’t get the information from my broker. He says I have to wait. I thought you said that the 1099’s have to be out by January 31st. What’s the deal?

Olivia

Olivia, I know that this is frustrating. We have several clients that are trying to get their returns done for school financial aid, or that have refunds coming but are in the same boat.

Here is the deal. Last year, Congress changed the due date from Jan. 31 to Feb. 15 for several forms: 1099-Bs, 1099-Ss and any 1099-MISC forms showing payments of lawyer fees or payments by brokers of substitute dividends or tax-exempt interest. The change also applies to brokers’ annual composite reporting statements sent to customers. This year, issuers get two extra days because Feb. 15 is a Sunday and the 16th is a holiday.

It is a pleasure serving you.

Larry Kopsa CPA

IF YOU ARE ABOUT READY TO PURCHASE A PERSONAL RESIDENCE YOU MIGHT WANT TO WAIT.

If you are about ready to purchase a personal residence you might want to wait. The current credit of $7,500 for first-time home buyers may be expanded to 10% of the purchase price, but no more than $15,000, and will not be limited to first-time buyers.

In addition, unlike the current credit, the new one would not have to be repaid over 15 years, although the House may insist on a phase out for higher-incomers.

The new credit would be fully refundable and would apply to residences bought within 12 months after Obama signs the bill. The current credit, along with the repayment obligation and phaseout for upper-incomers, would continue to apply until the bill is signed.

MORE ON BIG NUMBERS - YOU AND EACH MEMBER OF YOUR FAMILY NOW OWE $4,000.00

Recently I posted a ditty that I titled The Law of Big Numbers. See the January 28th posting. Here is more on that topic, which I find scary.

The Congressional Budget Office is forecasting a U.S. budget deficit for the 2009 fiscal year of nearly $1.2 trillion dollars. That's close to $4,000 for every man, woman, and child in the US.