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January 2010 letter to clientsDear Clients and Friends:
This month we would like to make you aware of a few tidbits of information as we start the new 2010 year. Here we go. Seminars at Schlenner Wenner & Co. Schlenner Wenner & Co. along with some of our business associates will be sponsoring several seminars in January. On Wednesday, January 13th, we will be presenting a seminar titled “Farm Transition and Estate Panning: Build Your Exit Strategy.” This seminar will cover topics like farm transfer strategies, related tax issues, wills, trusts and the transfer process. The presenters will be Bob Hengel, a partner and Fran Larson, a tax manager with our firm. This seminar will be presented in conjunction with the University of Minnesota Extension Educators. Brian Bastian, an audit partner with our firm will be presenting a seminar called “Understanding and Interpreting Financial Results for Better Management Decisions.” Anyone interested in learning more about financial statements, financial ratios and becoming more profitable will want to attend this seminar. The seminar is scheduled for Thursday, January 14. Seminar sponsors include the Central Minnesota SCORE Chapter 468, St Cloud State University Small Business Development Center and the Anderson Center. Mark Skaj, a tax manger with our firm will be presenting two seminars titled “2010 Roth Conversion Strategies.” If you are interested in learning about converting your traditional IRAs to Roth IRAs you need to attend one of these seminars. The first seminar will be on Thursday, January 14th and will be co-sponsored with Johnson, Carriar, Kruchten, Anderson & Associates. The second seminar will be Tuesday, January 19th and Thursday, January 21st and will be co-sponsored with Mahowald Financial Partners. If you are interested in attending any of these seminars, please contact Kelly in our St Cloud office and she will have all the details. Kelly’s number is 320-251-0286. 2010 Standard Mileage Rates The IRS has announced new standard mileage rates used to calculate the deductible cost of operating an automobile for business, charitable, medical and moving purposes. Starting January 1st , 2010 the new rates will be as follows: 50 cents per mile for business miles driven 16.5 cents per mile driven for medical and moving purposes
14 cents per mile driven in service for a charitable organizations
The new rates are slightly lower than last year. This generally reflects lower transportation costs compared to a year ago. Remember you have the option of calculating the actual cost of using your vehicle rather than using the standard rates. 2010 Tax Planning. Already? It’s never too early to start tax planning. 2010 is going to be a unique year in that many of the favorable tax provisions we have had in the past years are set to expire or change after this year. Personal tax rates will remain the same in 2010. But they are scheduled to go up in 2011. The maximum personal tax rate in 2010 is 35%. The maximum rate is 2011 will be 39.6%. If there are no changes, a strategy would be to move income into 2010 at the lower rates and move expenses into 2011 at the higher rates. The maximum capital gain rate is 15% for 2010. This rate will rise to 20% in 2011. Strategies to generate capital gain in 2010 would be more valuable than waiting until 2011. For example, if you are carrying a contract for deed generating capital gain, you may want to consider discounting the contract for early payment in 2010. Estate Tax in Limbo With the House and Senate arguing over health care reform, almost all tax legislation is taking a back seat. A big topic that needs attention in 2010 is estate taxes. The current law has the estate tax being eliminated as of 12:01 am January 1, 2010. We’ve recapped the current law as of today:
It is very unlikely that the estate tax will be eliminated in 2010. Both the House and Senate have stated that any legislation in the estate tax area in 2010 will most likely be retroactive to the beginning of 2010. We will have to wait and see. As you can see the tax landscape is constantly changing. Consequently tax strategies must also be changing. Because every taxpayer’s circumstances are different, there is no one strategy that fits all situations. We would be happy to help you start developing your 2010 tax strategies based on your individual financial goals. Give us a call. Thank you for your business and referrals. We wish you a Happy and Prosperous New Year. Sincerely, SCHLENNER WENNER & CO. Certified Public Accountants & Business Consultants
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