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Volume 4, Issue 4, April 2006

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Taxpayer Information is Safe with Us

Recent media attention has focused on the issue of third party disclosure of taxpayers’ private information when taxes are submitted for e-filing. Certain large corporate tax preparation services and do-it-yourself software programs may be in the practice of outsourcing tax return preparation, either here in the United States or overseas. While the tax code prevents the government from disclosing tax returns, it does allow private tax preparers to share your data with affiliates, provided the preparer obtains a signed information disclosure form. If you consent to this disclosure, your tax return information can be used for the solicitation of additional services.

With regards to this very serious matter, the partners and staff at  Kemper CPA Group LLP wish to inform you that information submitted to us for use in processing tax returns or any other service is not shared. We adhere to a strict privacy policy and treat client information with the utmost confidentiality.

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Business Expenses – What Can You Deduct?

The IRS defines business expenses as the cost of carrying on a trade or business, and allows deductions for these expenses, provided that the business is run to make a profit. In order for a business expense to be deductible, it must be both ordinary (common and accepted in your trade or business) and necessary (helpful and appropriate for your trade or business).

Business expenses must be separated from the following:

Expenses used to figure the cost of goods sold – Some of the expenses you incur if your business manufactures products or purchases them for resale may be included when you figure the cost of goods sold. Expenses used in figuring the cost of goods sold cannot also be deducted as business expenses.

Capital expenses – Costs associated with going into business, business assets, and business improvements must be capitalized, not deducted, as they are a part of your investment in your business.

Personal expenses – Personal and living expenses generally cannot be deducted, unless you have an expense that is part business/part personal, in which case you can only deduct the business part as a business expense.

Some qualifying business expenses include the following:*

Business use of your home – If you use part of your home for your business, you may be able to deduct a portion of your mortgage interest, insurance, utilities, repair, and depreciation. Additional information can be found in IRS Publication 587, Business Use of Your Home.

Business use of your car – You can deduct some car expenses if you use your car for your business. Additional information can be found in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.

Employees’ pay – Usually, you can deduct the income you have paid your employees.

Retirement plans – When you set up a retirement savings plan for you and your employees, there are tax-related benefits.

Rent expense – If you rent property for your business and do not receive equity from the property, you can generally deduct rent as a business expense.

Interest – Interest paid on money borrowed for business use is deductible.

Taxes – Various federal, state, and local taxes attributed to your business qualify as business expenses.

Insurance – Ordinary and necessary insurance for your business is generally deductible.

*Not all business expenses that qualify for deduction have been included in this list. For a complete list of business expense deductions, consult  IRS Publication 535, Business Expenses.

If you would like additional information concerning how to figure your business expense deductions, the tax professionals at  your local Kemper CPA Group LLP office can provide guidance relevant to your specific business situation.  Contact Kemper CPA Group LLP today.

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Time for a Financial Check-Up

Tax season is behind you, and now is a good time to review your financial health, while finances are still on your mind. Taking the time to check up on various aspects of your fiscal fitness can save you from a variety of headaches: inadequate retirement savings, under-reporting penalties, insufficient insurance coverage, and higher-than-necessary interest rates. So, before you file your financial records away for the year, perform an annual check-up by reviewing the following:

Net worth – Review this year’s net worth calculation (total liabilities subtracted from total assets), and compare with last year’s to see if you are still on track.

Retirement calculations – Go over your retirement calculations with a professional, so that, together, you can determine whether your retirement savings accounts are on target.

Asset allocations – Make an appointment with your financial advisor to review your accounts and adjust your allocations.

Social Security statements –Take a few minutes to read through your annual Social Security benefits statement to make sure there aren’t any errors or omissions; if there are, take the time to correct them now.

Withholding – Adjust your withholding to avoid under-paying or over-paying this year’s taxes.

Mortgage terms – If your interest rate is high, or you are still paying PMI on your mortgage, investigate your other options; it may be possible to obtain a lower-interest mortgage, and if real estate prices have gone up, it is possible that you may no longer need to be paying PMI.

Insurance – Review your insurance coverage annually to ensure that you’re keeping up with inflation and rising home prices.

Credit reports – Check your credit reports with all three credit bureaus, and review your FICO score annually to keep ahead of errors or identity theft, which could cost you in terms of a higher interest rate.

Because there are a number of factors that play a role in your financial health, it is important to consider each element alone and in terms of your entire financial picture. The certified public accountants and consultants at Kemper CPA Group LLP can help you make sense of it all. Contact us today to set up a consultation.

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Loose Change

The March/April 2006 issue of the “Loose Change” newsletter includes the following articles:

Contact Kemper Capital Management LLC for all of your investing needs.

Investment advisory services offered by KCPAG Financial Advisors LLC, a registered investment advisor. Securities officered through Securities America, Inc., a registered broker/dealer. Member NASD/SIPC. Thomas A. Moore, John D. Porter, Polly Reynolds, Shawna D. Horne, Jeffery C. Holt, CA insurance Lic. #0E38034, Jessica Daugherty, Sheila R. Lautenbacher, Joseph M. Mendes, CA Insurance Lic. #0C62535, Regina S. Hughes, Gregory Meador, Marcia Elder, Registered Representatives. Insurance services offered through KCPAG Insurance Services LLC. Kemper Capital Management LLC and its subsidiaries are not affiliated with Securities America.

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IT Staffing Solutions from Kemper Technology
Consulting

Finding IT staffing that suits your business needs is difficult, but it is also key to remaining profitable. In order for IT staffing ventures to be successful in your business, you need to find IT staff who work well with your employees and who take the time to understand your specific business needs. At Kemper Technology Consulting, a division of Kemper CPA Group LLP, we can provide you with exactly what you need – experienced information technology professionals, at a price you can afford.

Adding an employee to your workforce can be costly – each new employee adds hiring, orientation, and training expenses, in addition to increasing the cost of employee administration. We can effectively help you fill temporary or permanent workforce shortages, whether you need a single IT specialist, a team to staff an entire networking or development project, or ongoing staff augmentation services. Our IT professionals are well-trained, so you can trust that you have qualified individuals on the task, without the hassle and expense of hiring additional employees.

We are committed to keeping up with IT trends in order to better serve our clients. Kemper Technology Consulting works with a variety of industry partners, including Microsoft, Sage Software, Hewlett Packard, Symantec, Cisco, Novell, Gateway, Intuit and many others.

Contact us today to learn more about our IT staffing services and see what Kemper Technology Consulting can do for your business!

Kemper Technology Consulting
Robinson, IL
618-546-5633
www.kempertc.com
Evansville, IN  •  Indianapolis, IN  •  Paducah, KY  •  Effingham, IL

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Please be advised that, based upon current Internal Revenue Service (IRS) rules and standards, the advice herein is not intended to be used, nor can it be used, as the sole basis for decisions. Additional issues may exist that could affect the treatment of the individual transactions, and this narrative does not provide a conclusion with respect to all such issues.

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