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May 2004
Dear Clients & Friends:
This tax season was a very busy one. It seems that the majority of the
tax work came in between March 15 and March 30 and this created a
tremendous amount of work that had to be accomplished in the first two
weeks of April. In the future, I would appreciate it if you can send us
your information earlier.
To our new clients, I would like to welcome you to the firm. I hope that
our relationship will be a mutually beneficial one. To those who have
referred these clients, I would like to thank you for the confidence you
have shown. I thank you for your loyalty and I hope that your faith and
confidence in us continues. We still have several issues that need to be
addressed. The first relates to our clients who use discount brokers or
change stock brokers and their brokerage firms. You must make sure that
you have your historical cost information. When you sell a security, you
need to know what your original cost basis was. Most full service
brokerage houses will provide you with that information. If you use a
discount brokerage firm, you must find out from them if they will
provide you with that information or if you need to track this
information on your own.
Another major issue has developed regarding our clients who have
retirement plans. Your retirement plans require an expertise regarding
formation, record keeping and tax filings. Please speak to a retirement
specialist for your retirement needs. If you do not have one, we will be
happy to recommend one to you.
Regarding our business entity clients, we still have an issue regarding
payment of expenses with credit cards. We need quarterly and annual
credit card reports so we can determine how to allocate these expenses.
I would also recommend that you do not use a debit card with your
business accounts since these transactions do not give the backup
required to accurately determine what these expenses are.
A tax issue that has reared its ugly head is Alternative Minimum Tax
(AMT). AMT is a separate tax calculation that penalizes taxpayers who
itemize and are located in metropolitan areas. More upper income
taxpayers fell into AMT in 2003 and it is projected to only get worse in
the future. According to estimates released by the House of
Representatives Joint Committee on Taxation, AMT taxpayers under the
present law will increase from 3.3 million in 2004 to 26.2 million in
2010. In the future, middle income Americans will be subject to a tax
which was originally intended for very wealthy individuals who had no
income tax liability. AMT is widely viewed as discriminatory against
high-tax state residents along with large families who can not take
deductions and exemptions under AMT rules. AMT reform has been on
accountants radar for years. The problem with fixing it is that there
would be substantial revenue loss especially at a time when the nations
budget deficit is at a record high. I am on the Board of Directors of
the National Conference of CPA Practitioners for Nassau/Suffolk. We have
been invited to Washington on May 20 to address the AMT issue with
Congress. Hopefully, some sort of reform will be enacted soon.
We are a full service financial firm and are here to assist in all
aspects of your business and individual tax planning. Before making any
major financial decisions, please contact us to review your situation.
To the more than 240 clients on extension, please do not wait until the
last minute to provide us with your information. We have both an August
1, 2004 and October 1, 2004 deadline. These are the dates we must have
your information in order to prepare your individual tax returns by
August 15, 2004 or October 15, 2004.
Please remember that the key to financial planning is both communicating
with us along with you keeping detailed records of your income and
deductions.
We thank you for your continued support and look forward to serving you
in the future.
Sincerely,
Eliot H. Lebenhart, CPA
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Eliot H. Lebenhart, CPA 2001© All Rights Reserved
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