Free eNewsletter & Special Promotions

Volume 4, Issue 1, January 2006

If the images in this newsletter don't appear, make sure you are connected
to the Internet and click here.

Intestate Rules vs. Surviving Spouses

By W. Lee Vernon, CPA, CFP
Kemper CPA Group LLP
Evanville, Indiana

W. Lee Vernon, CPA, CFP is a partner in the Evansville, Indiana office of Kemper CPA Group LLP and has over 40 years of experience in public accounting. His specialty is estate planning for higher net worth individuals. He received his Bachelor of Science
Degree in Accounting from Indiana University.

Estate planning is contingency planning. Although we never know when that last day will arrive, it is human nature to procrastinate when it comes to planning for that event. It is small wonder that so many of us do not have a will.

There are two issues in every estate, no matter how large or small. The first issue considers the transfer of ownership of property – who gets your “stuff”? The second is a tax issue – will there be federal and state death taxes, and if so, how much?

The purpose of this article is to discuss the first step in estate planning, which is determining and communicating how and to whom your property is to be transferred after your death. The next step, which will not be discussed in this article, is how you can accomplish the transfers in the most tax-efficient way.

We can classify property transfers into two categories: transfers “by law” and transfers “by will.” Transfers by law are contractual in nature – examples would be:

Joint ownership of real estate or personal property,

Beneficial interest in life insurance policies or retirement plans,

Beneficial interest in revocable trusts.

Transfers by will are concerned with your individually-owned property. It is this property that will make up your probate estate. Your will, or the one provided by your state, determines how this property passes to your heirs.

To read the remainder of this article, click here for the full PDF version. If you have any questions about intestate rules as they relate to your estate, contact a Kemper CPA Group professional near you.

Back to the Top

Energy Tax Incentives Act of 2005

The Energy Tax Incentives Act of 2005 contains a series of tax breaks aimed at encouraging conservation and fuel efficiency by individuals and manufacturers. Broadly speaking, the Act provides tax incentives for consumers to buy energy-efficient assets and for manufacturers and builders to provide them.

Here's a summary:

New 10% personal tax credit for energy-efficient improvements to existing homes. The lifetime maximum credit per taxpayer is $500 and applies for property placed in service after Dec. 31, 2005 and before Jan. 1, 2008.

New business tax credit for contractors for the construction of new energy-efficient homes. The credit is either $2,000 or $1,000 per home, depending on the type of home and the energy reduction standard it meets. The credit applies to homes whose construction is substantially completed after Dec. 31, 2005, and which are purchased after Dec. 31, 2005 and before Jan. 1, 2008.

New tax credits for the purchase of hybrid, fuel cell, advanced lean-burn and other alternative power vehicles. The size of the credit varies depending generally on the weight class of the vehicle and the rated fuel economy. The credit applies to vehicles placed in service after 2005, with termination dates varying with the type of alternative power vehicle. Additionally, Code Sec. 179A (the pre-Energy Tax Act law deduction for certain clean fuel vehicles and refueling property) now sunsets after 2005 (instead of after 2006, as was originally scheduled).

New 30% tax credit for the purchase of qualifying residential solar water heating, photovoltaic equipment, and fuel cell property. The maximum credit is $2,000 (for solar equipment) and $500 for each kilowatt of capacity (for fuel cells). The credit applies for property placed in service after 2005 and before 2008.

If you would like more information on the Energy Tax Incentives Act of 2005, contact the tax professionals at Kemper CPA Group LLP.

Back to the Top

Should You Itemize or Take the Standard Deduction?

Depending on how much you spent on expenses like medical care, mortgage interest, taxes, charity, and other deductible expenditures, you may benefit from itemizing when you file your 2005 income tax return. If your total expense in these categories exceeds the standard deduction, choosing to itemize on your tax return usually benefits you.

The standard deduction amounts for 2005 are:

Single - $5,000

Married Filing Jointly - $10,000

Head of Household - $7,300

Married Filing Separately - $5,000

Certain taxpayers, such as those age 65 or older and those who are blind, have a higher standard deduction, while those who can be claimed as a dependent have a lower standard deduction.

Additionally, it is important to remember the following:

If your adjusted gross income is more than $145,950, or $72,975 for Married Filing Jointly, your itemized deductions may be limited. Medical and dental expenses, casualty and theft losses, gambling losses, and investment interest are excluded from the limit.

If you and your spouse file Married Filing Separately, and one of you chooses to itemize, the other must do so as well.

Non-resident aliens, dual-status aliens, and individuals who file returns for less than 12 months are not eligible for the standard deduction.

If you would like to know more about itemizing and the standard deductions as they apply to your tax situation, contact the tax professionals at  your local Kemper CPA Group LLP office. We can help!

Back to the Top

Loose Change

The January/February 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.

Back to the Top

Client Solutions – Regional Electric Company

Problem

The client, a regional electric company, was having problems with a DOS-based application that allowed them to create custom invoices. Unfortunately, the application was no longer supported, and they did not want to invest a lot of time learning how to use a new product. They contacted Kemper Technology Consulting for a solution.

Solution

Kemper Technology Consulting developed a custom application using Microsoft Access that had the same look and feel as the original DOS-based application the client was familiar with. Kemper Technology Consulting personnel were also able to improve the application with a few welcomed enhancements.

Benefit

Due to the custom programming, the client was able to upgrade/modernize their application without retraining all of their employees. Additionally, the client was able to save thousands of dollars and several man-hours in employee retraining.

Contact Kemper Technology Consulting today for solutions to all of your technology problems. Our certified professionals can help design a solution that works for you!

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

Back to the Top

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.

You are currently subscribed as: EMAIL_ADDRESS