New Way to Invest.

I wanted to tell you about a interesting way to invest a few bucks. The name of the website is Prosper.com. It is a peer-to-peer lending community, where you choose loans to "bid" on. There are tons of listing to choose from, so I use ProsperPicks.com to narrow down the selections. Give it a try.

The FAIR TAX - Finally a Solution to our Income Tax System.

I have been an avid listener to the Neal Boortz show, I also make it a point to read "Neal's Nuze". He has done a great job over the last few months explaining how the travails of our current tax system can be fixed by the "Fair Tax." Through my experience as a CPA, I have seen both low income and high income taxpayers for lack of a better word...screwed by our tax system.


With a consumption tax, you are taxed when you spend...but don’t worry, there will be no 4 dollar gallons of milk. Under the current system, when you pay for that gallon of milk you are paying for the income taxes of the dairy farmer, the dairy/bottler, the wholesaler, the truckers that distribute the milk, and the grocery store. Under the "Fair Tax" that all goes away plus you keep 100% of your income (look ay your pay stub that will probably be a 30-50% raise...not bad).

On top of this, all taxpayers will be given rebate checks for the amount that the average person would spend on basic necessities.

This is a truly fair system...you don't spend...you don't pay tax. Rich or poor there are no loopholes and you don't have to pay me $300 to find out how much you owe (I hope I still have a job).

'You absolutely need to check out this book, I can't wait to get my copy.

SUV Loophole Closed.

Until October 22, 2004 tax profit planning for businesses was as simple as “Go and buy a Hummer or two.” Then you could expense them up to $100,000. This step was so common that it was widely reported on the internet that some of the luxury SUV makers “added” a few extra parts to get to the 6,001 lbs of gross vehicle weight required to get the deduction.

This is no more. So be careful if anyone suggests that you buy a large SUV and expense it.

Max out your 401(k)!

The end of the year is fast approaching, and of you are on a bi weekly payroll, then you likely only have 4 payroll checks left. How can you keep more of them? By giving them up of course! If you are covered by an employer sponsored retirement plan, many employers will allow you to make a one time deposit to your account. Depending whether you are covered by a Simple IRA, 401(k), or another type of plan there are limits to your total contributions but an extra deposit can go a long way to juice up your retirement savings. Most employers offer a match on some percentage of your contributions, so at the very least take advantage of the free money your employer is offering.

You have until April 15, 2005 to contribute to your personal IRA account, but you have to act now to get the benefits of your company sponsored retirement plan.

Teachers...Would You Like $250?

Are you a teacher? If you are, great! I can’t think of a better profession. Unfortunately, in our society a healthy wage does not come with this noble profession. On top of that, state budget gloom has led to cuts in funding for schools.

Some teachers though have felt the responsibility to use some of their own funds to help purchase supplies needed to make the classroom environment better. To these teachers the IRS would like to say “thank you.” They will express their appreciation by offering you an adjustment to income of up to $250.00.

This is not a truckload of money by any stretch of the imagination, but if you’re a teacher, you deserve it.

The IRS wants to help you buy a car.

New legislation enacted for this year, will enable taxpayers to continue to claim an adjustment to income up to $2,000. So if you purchase a NEW hybrid vehicle the government will help you buy it.

Qualifying Vehicles

• 2004, 2005 Toyota Prius
• 2004 Honda Insight
• 2004 Honda Civic Hybrid

You will notice that neither Honda has been certified for 2005, but I can’t think of any reason why the IRS will not certify them in the near future.

The hybrid cars cost considerably more than their gas guzzling counterparts, but with gas over $2.00 a gallon, 60 miles to the gallon is worth something.

NOTE: Just remember that a $2,000 adjustment is only worth roughly $500 in the 25% tax bracket.

Welcome!

It is hard to believe that the end of the year is already upon us. This unfortunately means that we also have to think about filing our taxes. I hope that this will be a place were taxpayers and tax professionals will be able to meet and discuss year-end tax planning for the next month or so. Then as we get into the New Year we can tackle some of the technical tax issues that we will be facing as we start to fill out the forms. Over the next month I will be posting (in plain English) some of the changes that our tax code has taken over the past year, and how it will affect the average taxpayer. So stay tuned more.