Happy New Year!

We like to start by wishing you a happy, prosperous, and profitable 2010.

Recently, Robert Palmer and Associates mailed out your tax organizer to be used as a guide in collecting the information necessary to complete your 2009 tax return.  These organizers were sent to you if we prepared your tax return last year.  If we did not prepare your tax return last year and you would like an organizer, please call or email our office for a copy.  Most of our clients will start scheduling appointments in February when all of your tax return documents begin dropping on your doorsteps.  It is not too early to go ahead and call to schedule a time to get together and talk about 2009. Call us today at 803.547.7676.

2009 tax law changes and changes yet to be finalized will make the preparation of 2009 tax returns more complicated.  We have new credits and deductions associated with purchasing homes, energy improvements, and purchasing vehicles.  In addition, we have the new “making work pay credit” changing the withholding tables earlier this year which could result in under withholding of federal taxes on your W2.  This negative change could affect married filing joint returns leaving many taxpayers owing more taxes than expected.

For our corporate filers, the process is just as complicated.  The addition of expanded loss carry back statutes will require us to run additional scenarios to test to see if it is advantageous to carry the loss back.  In addition, we have legislation yet to come which may have retroactive adjustments.

The IRS continues to employ new agents and examiners trying to fill open positions created both due to retirement as well as new audit strategies.  We can expect increased audits and examinations in the near future.  Please continue to be very thorough in keeping documentation for all areas of your return.  Areas of interest to the IRS continue to be mileage logs, un-reimbursed business expenses, and the profit motive for schedule C filers.  If any of these items concern you personally, we should discuss them during your initial review at our office.

We look forward to seeing everyone this tax season.  Please contact Robert Palmer and Associates by telephone at (803) 547-7066 to schedule your initial appointment.

1. Meticulously evaluate expenses.
   Question your assumptions about “necessary” expenses verses benefits. Are your employees using the benefits you offer? It may be time to drop benefits that offer no value and increase administrative costs. Review all those software and maintenance agreements. Look for new suppliers, quote insurance costs again, be fair to suppliers you have been using for years, but check their pricing verses service. Resolve to cut at least 10% from your supplies and outside services budget in 2010.
   
   
2. Collections.
   Collect, Collect, Collect or damage their credit. “Problem payers” are not good clients and need to be reexamined to see if you can be more aggressive in the collections process. Cash flow is not a favorite topic to talk about, but it is critical to the well being of your business.
   
   
3. Plan for Growth AND Recession.
   Not an easy task, but you need to make sure you are planning for economic growth and the worst-case scenario recession recovery and be sure you have cash reserves available. Consider meeting with your banking partners and discussing the need for a line of credit to get you through the slow recovery.

Remember, expectations of rising costs presented in our media outlets are not something to always include in your base for your business budget and planning model. You are the owner and have to control your business costs by working with your suppliers and employees. How about creating a bonus based compensation centered on reaching sales and profit targets instead of increasing wages? You as the business owner have to take all the risks in this economy, hedge your risk by creating incentives instead of raising your costs day one of the year.

SAVINGS tips for 2010:

• Review your insurance policies and consider risk/reward of raising deductibles or quoting competitors.
  
• Take off extras – remove that extra movie channel, remove those extras from your cell phone plan.
  
• Conserve fuel – plan your weekly trips in order to reduce consumption. Write a list of items to buy and stick to it.
  
• Conserve energy – wash only full loads of dishes, clothes, etc. Purchase those new energy efficient bulbs.
  
• Watch Ebay, Craigs List, and consider making a game of how low you can make the deal.
  
• Coupons are everywhere – start cutting them.
  
• Sign up for all those “free reward” programs and maximize their use.
  
• Consider switching banks to increase interest on savings. At least work them against each other to keep your business. Banks want deposit accounts.
  
• Don’t spend money to remove stress. Don’t go to stores or shopping centers as a stress reducer or for entertainment.
  
• Always ask for a discount. Always ask for fees to be waived. Call credit card companies for a lower interest rate.