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Volume 6, Issue 9, September 2008

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Time for Fall Tax Planning

As summer winds down and fall approaches, it is the perfect time to schedule a meeting with your tax professional. As with most things, advance planning and preparation can make all the difference in the world – you wouldn’t expect a long vacation, a comfortable retirement, or the perfect wedding ceremony to go according to plan without a little advance preparation, and the same holds true for taxes. Tax planning can help you proactively anticipate some of the variables that directly influence your tax situation. With a little planning now, you will have a clearer picture of what your tax situation will look like when you file your 2008 taxes.

Following is a list of tax-saving strategies worth discussing with your tax professional:

Contributing the maximum to your tax-deferred retirement plan

Investing in a 529 college savings plan

Planning for applicable tax deductions and using them to your advantage to maximize tax savings

Structuring your estate plan to reduce estate taxes

Taking advantage of the gift tax exclusion to reduce your taxable estate

Giving to a charity

Implementing a retirement savings plan at your small business

Taking advantage of business-related tax incentives that were created by the Economic Stimulus Act of 2008, including the fixed-asset expensing election under Section 179 and bonus depreciation on some assets placed in service in 2008

Our certified public accountants are available to help you determine which strategies may be advantageous for you. Tax planning involves an understanding of the way your income, assets, deductions, and credits work together, and our professionals can help you make sense of it all. If you believe that you would benefit from any of the tax-saving ideas mentioned above, or if you have any other questions related to your tax situation, contact your local Kemper CPA Group office to set up an appointment with a knowledgeable professional today.

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Form 990: Revised Tax Return Form for
Tax-Exempt Organizations

The IRS has been working to redesign Form 990, Return of Organization Exempt From Income Tax, and, as the final step in the redesign process, the revised instructions for filling out the new Form 990 have been released. Instructions for the 2008 Form 990 can be found on the IRS website.

The new form must be filed by tax-exempt organizations beginning for the 2008 tax year (to be filed in 2009). Charities and other tax-exempt organizations are required to file Form 990 in order to retain their tax-exempt status, and information gathered from the return is released to the public.

Following are some key changes to the 2008 Form 990:

The new Form 990 consists of an 11-page, 11-part core form that is required for all organizations that complete the form. It also includes 16 schedules, which are to be completed by the organizations that meet the requirements for each schedule, as determined by Part IV of the Core Form, Checklist of Required Schedules.

A new governance section that asks questions about the organization’s governance structure, policies, and practices gives the IRS a better indication about whether the organization is operating in compliance with federal tax law.

A new section consolidates the reporting of compensation of the organization’s officers, directors, trustees, key employees, highest compensated employees and independent contractors. All tax-exempt organizations will now be required to report compensation-related information for their five highest-paid employees and independent contractors, and the threshold for reporting compensation for those individuals has been raised to $100,000.

For organizations described in sections 501(c)(3) or 4947(a)(1), revisions to Schedule A emphasize reporting of charity status and public support.

Schedule D has been revised to include new reporting requirements for organizations that maintain donor advised funds or other similar funds or accounts; conservation organizations, museums and other organizations that maintain collections; credit counseling organizations and others that hold funds in escrow; and organizations that maintain endowments.

Schedule G now requires reporting of certain information regarding arrangements with professional fundraisers, special events, and gaming activities.

Schedule O, Supplemental Information to Form 990, was added to allow organizations to supplement information provided elsewhere in the form.

Other new schedules include:

Schedule C: Political Campaign and Lobbying Activities

Schedule F: Statement of Activities Outside the United States

Schedule H: Hospitals

Schedule K: Supplemental Information for Tax-Exempt Bonds

Schedule L: Transactions with Interested Persons

Schedule M: Non-Cash Contributions

Schedule R: Related Organizations and Unrelated Partnerships

To ease the burden the new form places on smaller organizations, the 2008 Form 990 will be phased in over three years as these organizations transition from form 990-EZ to the new Form 990. For tax year 2008, most organizations with gross receipts of less than $1 million and total assets of less than $2.5 million may choose to file either Form 990 or Form 990-EZ, Short Form Return of Organization Exempt From Income Tax. The gross receipts and total assets thresholds used to determine an organization’s eligibility to file Form 990-EZ are reduced for tax years 2009 and 2010. Additional information about form 990-EZ, including eligibility requirements, is available here.

Also, because of the enhanced reporting requirements incorporated in the redesign of Form 990, the IRS and Treasury Department have issued new regulations that eliminate the “advance rulings process” for organizations that are seeking tax-exempt status as publicly supported charities. The advance rulings process had granted public charity status for five years, after which exempt organizations had to prove that they received a substantial part of their support from public sources.

The certified public accountants and consultants at Kemper CPA Group LLP can provide further guidance about the filing requirements for tax exempt organizations. Contact an office near you to set up an appointment to talk with one of our professionals today.

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Stimulus Payments – Still Available for Some…

If you have not yet filed a tax return for 2007, you can still do so and receive a stimulus payment.

It’s not too late! However, you must file a return by October 15, 2008 in order to receive a stimulus payment this year. If you are a veteran or receive Social Security benefits and do not normally file a tax return, you may still receive a stimulus payment by filing a return prior to the October 15 deadline.

If you have filed a 2007 return, but have not received a stimulus payment, a number of issues could be a factor, including:

Address change – have you moved since you filed your 2007 return? If so, and you did not provide a forwarding/new address, you will need to file a Change of Address Form 8822 so that the IRS will have your correct mailing address. Also, be sure to notify your local post office of your new address. If your stimulus payment will be a paper check which had already been mailed prior to your notifying the IRS of your new address, the check will most likely be returned to the IRS. Call 1-866-234-2942 in order to update your mailing address and find out how to have a new check sent to the correct address.

Timing – the stimulus payments are processed in an eight-to-twelve week timeframe; however, if it has been more than eight weeks since your return was filed, and you have not received a stimulus payment for which you are qualified, you may call the IRS Rebate Hotline at 1-866-234-2942. You may also contact a local Taxpayer Assistance Center in your state.

If you have questions about your return or a stimulus payment, our friendly professionals can assist you. Contact us today for an appointment!

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Loose Change

The September/October 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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New Features Available in QuickBooks 2009

QuickBooks 2009, to be released in the coming months, offers a number of improvements and new features to help you simplify necessary business operations. If you are a current QuickBooks user, now is the perfect time to upgrade; if you have never used QuickBooks, now is a great time to give it a try!

The following new features will be available in both QuickBooks Pro 2009 and QuickBooks Premier 2009:

Company Snapshot is a brand new feature that provides you with a high-level overview of your business and can help you better manage your business. The new dashboard feature enables you to see income and expense graphs, customer balances, and reminders all on one screen.

Multi-User Enhancements make it easier for more than one user at your location to access QuickBooks at the same time. Data can be backed up in multi-user mode, and users can communicate with each other instantly using QuickBooks Messenger.

Online Banking has been improved to save time during data entry and reduce errors. You can download banking, credit card, and credit union transactions directly into QuickBooks. Transactions can be mapped automatically to the appropriate QuickBooks accounts. A new wizard simplifies set-up, and more than 3,000 financial institutions are now participating.*

A Free Business Website, up to three pages, and website hosting for 12 months can help you grow your business.*

QuickBooks Live Community is a new feature that allows you to ask other QuickBooks users questions specific to your business. You can ask questions as you work in QuickBooks and get answers quickly. Relevant questions and answers from the Live Community are displayed as you work with various features in QuickBooks.*

Multi-Currency Support now makes it easier to conduct business with international customers or vendors, as QuickBooks 2009 supports all global currencies. You can track sales and expenses abroad just as easily as you do for local customers, and QuickBooks automatically converts foreign transactions into the currency that you designate.*

Kemper Technology Consulting can provide you with additional information about QuickBooks 2009. Our Certified QuickBooks ProAdvisors are available to answer your questions and help you find the QuickBooks product that is right for your business. Contact us today!

*Terms and conditions apply. Contact an authorized QuickBooks seller for details.

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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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