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Volume 6, Issue 8, August 2008

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The Housing Assistance Tax Act of 2008

In light of the recent turmoil in the housing market, Congress passed The Housing Assistance Tax Act of 2008. The act contains a number of tax provisions, including incentives targeted to home ownership.

First-Time Homebuyer Tax Credit: First-time homeowners who purchase a principal residence on or after April 9, 2008 and before July 1, 2009 may be eligible for a temporary refundable tax credit. The taxpayer (and the taxpayer’s spouse) must not have owned another principal residence in the U.S. in the three-year period before purchasing the new home. Thus, the home doesn’t literally have to be the taxpayer’s first home.

A special rule allows taxpayers who purchase a principal residence in the first six months of 2009 to treat the purchase as if it was made on December 31, 2008. This allows the taxpayer to claim the credit for 2008 rather than 2009.

The amount of the credit is equal to 10% of the purchase price of the home, up to $7,500 ($3,750 for married taxpayers who file separately). The tax credit begins to phase out for taxpayers with adjusted gross income of more than $150,000 for joint taxpayers or $75,000 for individuals. The credit is unlike other credits in that it must be repaid in equal installments over the course of 15 years. Repayment begins two years after the year the home is purchased and is made on the individual’s tax return. If the home is sold prior to the credit being repaid, the remainder of the credit will become due in the year that the home is sold.

Property Tax Deduction: Individuals who elect to take the standard deduction in lieu of itemizing their deductions can take advantage of a limited deduction for state and local real property taxes. For those who are eligible, the amount of the standard deduction can be increased by the lesser of the amount of property taxes paid during the year or $500 ($1,000 for married taxpayers who file jointly). This deduction is available only for 2008.

Mortgage Revenue Bonds: The new law temporarily expands the mortgage revenue bond program, normally used to finance below-market mortgages for first-time homeowners, to include refinancing of existing sub-prime loans. First-time homeowners with sub-prime loans might be able to use their state’s mortgage revenue bond program to refinance their loan to one with a better interest rate. For the purposes of the new law, a sub-prime loan is defined as an adjustable rate single-family mortgage loan made after December 31, 2001 and before January 1, 2008. The bond issuer must determine that the conditions of the existing loan would be reasonably likely to result in financial hardship for the homeowner if it is not refinanced.

A number of other tax provisions are also outlined within the law. The tax professionals at Kemper CPA Group LLP can identify the specific ways that the new law impacts your tax situation. Contact an office near you to set up an appointment to talk with one of our professionals today.

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University of Southern Indiana Accounting Team – National Champions!

Many congratulations to the University of Southern Indiana (USI) College of Business accounting team on winning a national championship in the Institute of Management Accountants (IMA) National Student Case Competition!

Selected to be one of four finalists for the third year in a row, the USI team advanced past the first round of the IMA competition when their presentation was selected by a panel of judges to be presented live on June 15th in Tampa, Florida at the IMA’s Annual Conference and Exposition. Their presentation and case study was selected as the winner in a competition with finalist teams from Western Illinois University, Wright State University, and Rider University.

Members of the National Champion team from USI include Amy Oglesby of Galatia, Illinois, Andy Dill of Princeton, Indiana, Brad Greene of Georgetown, Indiana, and Angela King of Santa Claus, Indiana. The team’s faculty sponsors were Dr. Brian McGuire, who is an accounting professor and chair of the Department of Accounting and Business Law at USI, and Jeanette G. Maier-Lytle, an accounting instructor at USI, and the coach of the USI accounting team since 2004.

Partners from the Evansville, Indiana office of Kemper CPA Group LLP were proud to again assist the USI team this year with critiques and rehearsals of their presentation.

The University of Southern Indiana College of Business Accounting and Business Law Department has a history of excellence, with USI accounting teams having won the Indiana CPA Society state Case Study Competition for the past four years. The partners and staff at Kemper CPA Group LLP are very proud of the national champion USI accounting team. Congratulations!

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Hey, Mom and Dad! I Need Money…

Ok, now how many times have you heard that? We understand perfectly…

If you have a college student getting ready for the fall semester, you know that finances are one of the biggest challenges you face as a parent. Tuition increases, room and board costs, gas, books, pizza, etc., etc. It seems to go on and on, and you likely feel as though your checkbook has a huge target on it that only your child and his/her college can see.

While it may seem out of control, there are some things that you can do to help your college student keep the costs down as much as possible. It begins with educating them on what they should do, and that list should include ‘Avoid Credit Card Offers at all Costs’ as item #1.

College students are favorite targets of aggressive credit card companies, who set up shop in student unions and common areas at colleges across the country, offering Frisbees, t-shirts and free food coupons in exchange for applying for their particular card. Because college students are usually young and have a nonexistent or very limited credit history, they typically are given cards with 19-20% interest rates or higher. Without you there to oversee their spending, students can quickly spend themselves into some serious debt and a poor credit history if they do not pay the bill on time, or exceed their limit and incur fees. And Mom and Dad may end up footing the bill for their now indebted student, adding to their financial stress.

Parents – talk to your student about finances before they head to campus this fall. Make sure that you involve them in setting up a budget, so that they do not feel as though it is being forced on them. Help them set up a checking account with a debit card that they can use for everyday expenses, as debit card funds are limited to the amount in the checking account. Show your student how to balance their checking account and review their account online, if their bank offers that service. What may seem to be common knowledge to a parent may be a foreign language to a student, so take some time now to avoid problems later.

Good habits now will help with their future credit rating, as well as your stress level. And hey, Mom and Dad, some deep breathing exercises wouldn’t hurt either!

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Loose Change

The July/August 2008 issue of the “Loose Change” Newsletter includes the following articles:

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

Securities offered through Securities America, Inc., Member FINRA/SIPC. Insurance products offered through KCPAG Insurance Services LLC. Advisory services offered through KCPAG Financial Advisors LLC. Kemper Capital Management LLC is the holding company for KCPAG Insurance Services LLC and KCPAG Financial Advisors LLC. Kemper Capital Management and its subsidiaries are not affiliated with Securities America.

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What to Look for in a Point of Sale or Retail
Management System

Consider your existing retail management system, and all that it could be doing for you, but isn’t. Whether your business is large or small, you can benefit from a system that reduces the amount of time you spend tracking merchandise, allowing you to spend more time growing your business.

A comprehensive retail management system allows you to:

Set up and use easily. Minimize disruptions with a solution designed for rapid installation and ease of use.

Track and manage inventory. Track item movement and supplier histories, quickly generate purchase orders, and add items on the fly. Take advantage of a software system that offers real-time visibility into inventory, purchasing, sales performance, and trends.

Streamline transaction processing. Expedite checkouts with immediate access to prices, availability, and stock location. Utilize a software system that automates discounts, promotional items, and sales.

Improve marketing efforts. Target your marketing efforts based on accurate customer data, including preferences and detailed purchase histories.

Analyze data with flexible reporting options. Put your information to work with straightforward reports, as well as reports you create and save using industry standard Crystal Reports and SQL utilities.

Save time and money with integrations. Help eliminate duplicate data entry by integrating with popular accounting software such as Intuit QuickBooks. Improve e-commerce processing with seamless integration. Incorporate credit card processing to facilitate easier end-of-month reporting and transaction reconciliation.

Provide fast, accurate, and secure credit card processing. Reduce the need for separate credit card terminals with built-in processing. Provide as little as two to four second processing time per credit card.

Protect your investment with rich support and maintenance offerings. Minimize information technology costs with support and maintenance options that help you maximize uptime and adapt to changing business requirements. Our Microsoft certified consultants are looking to help you succeed.

We can provide you with a complete retail solution that allows you to manage your operations efficiently, from your point of sale brick-and-mortar store to your e-commerce store, and from your back office through the supply chain to your general ledger.

Contact Kemper Technology Consulting to learn more about what a retail management system can do for your business.

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Kemper Technology Consulting
Robinson, IL
618-546-5633
www.kempertc.com

Evansville, IN  •  Indianapolis, IN  •  Paducah, KY  •  Effingham, IL

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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