Thursday, September 30, 2010

Nice try Mr. President

President Obama hit the backyard trail and was hit with the questions he did not want to hear. It's about time someone brought this out.

I wish that I had good news about the tax cuts, but the wimps in Congress have departed Washington without doing what needed to be done, so I say don't let them return, throw them all out and let's start with a new group.

To determine how Congressional inaction will affect your taxes, give Saggio Management Group a call right now. We are offering a $99 year-end check up.

Obama Faces Policy Doubts in Backyard Meeting

Sep 29, 2010 2:18 PM EDT

President Barack Obama on Wednesday defended his economic policies as he faced tough questions from skeptical Americans less than five weeks before congressional elections that threaten his fellow Democrats' grip on Congress.

Holding the latest in a series of backyard meetings with middle-class voters, Obama heard one small business man's fears that his tax plans could "strangle job creation." The president also fielded concerns about high unemployment and the impact of his health care overhaul.

It was a marked contrast to the enthusiastic university crowd that greeted Obama on Tuesday in Wisconsin when he sought to fire up his youthful base of support, and showed the obstacles his Democratic Party faces in the Nov. 2 elections.

Obama stood up for his economic agenda but acknowledged that the country faced "hard decisions" as he works to shore up the struggling economy and rein in huge budget deficits.

"We're not going to be able to address our big problems unless we honestly address them," he told several dozen people gathered at an Iowa home.

One questioner brought up her 24-year-old son, who graduated from college with honors and campaigned enthusiastically for Obama in 2008, but has been unable to find a full-time job.

"He and many of his friends are struggling. They are losing their hope, which is a message that you inspired them with," she said.

A small businessman who runs a promotional products firm expressed concern about Obama's proposal to extend Bush-era tax cuts only on personal income of $250,000 or less, and also bemoaned policies he said would discourage hiring.

"As the government gets more and more involved in business and gets more involved in taxes, what you're finding ... you're sort of strangling the engine that does create jobs," the man said.


Obama defended his tax proposal, which he says is aimed at helping middle-class earners while avoiding what he sees as unneeded tax breaks for wealthier Americans. The issue has sparked heated debate between Democrats and Republicans with elections approaching.

"I'd like to keep taxes low so that you can create more jobs," Obama said. "But I also have to make sure that we are paying our bills and we're not putting it off 'til the next generation."

Obama drew more than 25,000 people to a rally on Tuesday at the University of Wisconsin, where he appealed to young voters -- who generally tend to favor Democrats but are less likely to go to the polls -- to turn out and back his party.

"We need you to stay fired up because there is an election on Nov. 2 that is going to say a lot about the future -- your future and the future of our country," he told the crowd. The event was reminiscent of his triumphant rallies late in his 2008 presidential campaign.

Questioners at Wednesday's backyard event were polite and respectful, with some expressing appreciation for Obama's hard work in the presidency. But some of the questions were more pointed than he has faced at other such events.

Obama's four-state trip was meant to re invigorate his party's base.

Democrats, in fact, are showing signs of gaining ground on Republicans in their enthusiasm for voting. This month, 79 percent of Democrats said they were certain to vote, compared to 67 percent in August, according to Reuters/Ipsos poll results released on Tuesday.

Republican enthusiasm remained largely unchanged, with 91 percent saying they are certain to vote.

Obama appealed to Hispanics in two interviews that aired during the weekend on Spanish-language television and with an education-focused backyard event in New Mexico. Then he targeted young voters in Madison, and on Wednesday was making his economic case to the middle-class with backyard events in Iowa and Virginia.

Wednesday, September 29, 2010

Adoption Credit Update

IRS Issues Guidance on Expanded Adoption Credit Available for Tax-Year 2010

WASHINGTON — The Internal Revenue Service today issued guidance on the expanded adoption credit included in the Affordable Care Act. The IRS also released a draft version of the form that eligible taxpayers will use to claim the newly-expanded adoption credit on 2010 tax returns filed next year.

The Affordable Care Act raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can get it even if they owe no tax for that year. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply.

In addition to filling out Form 8839, Qualified Adoption Expenses, eligible taxpayers must include with their 2010 tax returns one or more adoption-related documents, detailed in the guidance issued today.

The documentation requirements, designed to ensure that taxpayers properly claim the credit, mean that taxpayers claiming the credit will have to file paper tax returns. Normally, it takes six to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. The IRS encourages taxpayers to use direct deposit to speed their refund.

Taxpayers claiming the credit will still be able to use IRS Free File to prepare their returns, but the returns must be printed out and sent to the IRS, along with all required documentation.

When you are ready to file for the credit, give Saggio Management Group, Inc. a call.

Think Fed Taxes are High?

Here is a great report on the impact of the federal income tax increase on the States.

Saggio Management Group can assist in reducing your tax burden. Right now we are offering a $99 year-end tax checkup. Call us today.

States are Bleeding, Brace for High Taxes

Sep 28, 2010 3:47 PM EDT

We are a little more than three months away from what could be the largest tax hike in American history.

But as we all fret about the Bush tax cuts expiring, you should be aware: It's not just income taxes that are on the rise.

Facing record budget deficits, states are having to reach further into your pockets on everything from property taxes to sales taxes just to make ends meet.

After reaching new lows last year, tax revenue for states are back up--some because more people can afford to pay as the recession eases (albeit slightly) and also some states are just raising taxes.

The Wall Street Journal put it all together showing property taxes are up more than 3% and sales taxes are up 5% since last year.

While income taxes remain unchanged, it's still pretty high at nearly $76 billion.

But not all states are created equal; at least they don't all tax equally!

Taxes are up the most in states like New Mexico m which saw personal income taxes skyrocket nearly 99%. Kansas residents have seen a 30% increase and Delaware up nearly 18%.

But such taxes are down nearly 35% in Louisiana, more than 26% in North Dakota and more than 22% in Tennessee.

But for some states it's the sales tax that will hit you the hardest: especially if you live in Virginia, North Carolina or Arizona - which saw taxes up 37.5%, 35.5% and more than 27% respectively.

Shoppers in North Dakota, California and Minnesota will also be paying a lot more.

But your sales tax is down significantly if you live in Wyoming or Connecticut of all places--they're actually down nearly 30%.

Michigan, New Mexico and Nebraska also seeing major drops since 2009.

As much as I hate anytime Uncle Sam comes to me for my money - states are so far in the red, many have no dreams of reversing their troubles for years and years - especially states like California.

With unemployment still shockingly high and federal stimulus money starting to fade - state and local legislators may have no other choice.

Tuesday, September 28, 2010

Are Annuities the Best Choice?

I get many calls about annuities and whether they are the best fit for my clients. Here's a great tutorial on the basics of annuities.

When your ready to move forward, give Saggio Management Group a call so we discuss the specific tax implications for your situation.

The A, B, Cs and 1, 2, 3s of Annuities

Sep 24, 2010 5:20 PM EDT

"The Boomer" is a column written for adults nearing retirement age and those already in their "golden years." It will also promote reader interaction by posting e-mail responses and answering reader questions. E-mail your questions or topic ideas to

We've discussed the pros and cons of opting for annuities in your retirement planning. Earlier this month, the Labor and Treasury departments held a joint hearing to discuss the role, if any, that annuities should play in employer-offered 401(k) plans. Whether or not you think they make sense for your future, one thing is clear: We should have a general knowledge of the subject.

When speaking to an advisor about annuities, the different types alone -- variable, fixed, indexed, deferred, immediate - can be overwhelming.

Here's a simple breakdown on what you should know from Dana M. Pedersen, vice president of annuity product development at The Phoenix Companies, Inc.

No. 1: Immediate or deferred?

The two primary categories that people are most familiar with are the immediate and deferred categories.

An immediate annuity is appropriate for somebody who wants to begin receiving income immediately, so somebody who is into or just starting retirement. A deferred annuity is most appropriate for somebody who needs to accumulate assets on a tax-deferred basis -- in most cases for a specified period of time -- and then at some future date most likely will have an income stream. Deferred annuities in a lot of cases work best for somebody who would like to save or accumulate assets for a certain number of years and then start to take income out of the annuity.

No. 2: Variable or fixed? Traditional or index?

Once you decide on whether immediate or deferred is right for you, then you can get into choosing between a variable or a fixed annuity, and when you are talking about a fixed annuity you can further break that down to a traditional fixed or an index annuity.

Variable annuities are much more popular in the deferred form. In a variable annuity, the client amount by which a client's account value is going to accumulate or grow each year is going to be change, and it is going to vary based on the return of the sub accounts that the client were to elect. With a variable annuity, there is a little bit more risk, but a very simple level. The account value can go up and the account value can go down, all depending on the index the sub accounts are tied to.

With a fixed annuity, there is usually a specified rate of return, so when the client purchases the fixed annuity on the deferred side, he knows how much he is going to earn each year. With this, clients are going to have a credit very similar to a savings account at the bank where they know they are going to earn "X" percent per year on the fixed deferred annuity.

Then you get into the sub-category offerings of fixed index annuities. With an index annuity, basically the client is assured that they will never lose money. Here there is no potential for any type of investment loss, but there is the potential for some upside. This makes an index annuity most appropriate for people who really can't tolerate the risk of a variable annuity because they don't want to take any chance for loss of principal, but at the same time they want the potential for a little bit more upside than a guaranteed-rate fixed annuity would provide.

With an index annuity, the actual performance of the account value is a function of the performance of an outside index of some kind. For example, if your index annuity is based on the performance of the S&P 500, if the index is down significantly in a year, you would have no return. You wouldn't lose any money -- you would just have a flat account value, whereas if the S&P 500 was up in a particular year, your credited amount would be a function of some portion of the performance of the S&P 500.

No. 3: A, B, C, L or X?

When you get into variable-deferred annuities, that is where we see the widest product offering and a lot of the acronyms or abbreviations that are out there can sometimes be confusing to somebody that doesn't know exactly what these abbreviations mean.

Here we get into the categories of an A, B, C, L and/or X share. What the letter corresponds to for the most part is the length of the surrender charge period, so as long as you leave your money in for the length of the surrender charge period, you pay no penalties when you begin to withdraw. If the client has to withdraw money prior to the end of the end of the surrender charge, most annuities allow the client to take out at least 10% of the account value per year without any penalties. However if they have to take out an amount in excess of that they will pay a fee.

Monday, September 27, 2010

Home Office Technology

Here's a great article on home office technology. Saggio Management Group can assist you with some great technology ideas that will allow your home based or small business really look and operate professionally.

Must-have Technology for a Home Office

Apr 13, 2010 1:59 PM EDT

The Web was one of the first technologies to enable a certain level of parity between small and large businesses. By paying careful attention to the design of their websites, small businesses could appear as large as they wished.

Today, small business owners can take advantage of new technologies to gain many of the same capabilities that large businesses have without incurring the same costs.

"All of us come from a corporate background," said Sally Pedley, CEO of Pedley Richard, an executive search firm that specializes in emerging technology companies. ( "We know that there's one way to perform a task when you have an entire corporate infrastructure at your disposal, but that that's not the only way. We look for technologies that allow us to perform the same tasks without the head count and expensive hardware."

According to Pedley, working with technology firms gives her business a bit of an advantage because the firms are happy to share information about new technologies. "But we keep an eye out when we visit prospective clients or talk to our vendors and suppliers too," said Pedley.

Though her business does have an office, Pedley says that the same technologies that work for her home-based employees are a natural fit at the office as well. "We'll take a money-saving technology wherever we find it, as long as the ramp time for learning to use it is manageable."

USB flash drives

Sharing files through email is fast and efficient, but many e-mail services limit the size of the files you can send. In a large business, you might be able to share large files by placing them on a network. But if your business hasn't set up a network yet, you can use a USB flash drive, sometimes referred to as a memory stick or a memory key, to share very large files.

Wendy Lopez, President of WCI Entertainment, an event management firm specializing in live music, says USB flash drives have helped her cut costs. "We record many of the events that we stage, and the recordings are huge," said Lopez. Since many of the video files her business produced were too large to fit on a CD, they burned them to DVDs, but DVDs are costly. "With a flash drive, you load up the file to give to the client, then just delete the file after the transfer. We don't have to buy and burn new DVDs every time we want to give someone a recording."

Flash drives plug into an open USB port on your computer. Your computer recognizes the flash drive as a type of external hard drive. You can then copy files onto the drive, then simply unplug the drive and hand it to someone else. Once they plug the flash into their computer, they'll have access to the files you placed on it, and can copy them from the flash drive to their computer.

USB flash drives have fixed storage capacity, some storing a few megabytes of data, and some as much as 64 gigabytes. Prices vary widely, with 2 GB flash drives commonly available for under ten dollars. (

Online Backup
According to Symantec's recent survey, "SMB Disaster Preparedness Survey - Global: September 2009," ( most small business owners believe they could quickly recover after losing all their business's data. However, the survey also shows that their confidence may be misplaced. The average small business only backs up 60 percent of its company and customer data.

Large businesses may have system administrators who regularly create backup copies of important information and store the copies off site. But small businesses can get the same benefit by using on online backup service.

These services automatically create backup copies of the files you choose by connecting to your computer and copying the files to a remote server for storage. When you need the files, you can log into the remote server and retrieve the backup copies. These services cost as little as four to five dollars per month.

Internet Phone
Although Internet phone services only recently began reaching the small business mainstream, the technology has already begun to prove itself useful.

You use an Internet phone service much as you would a phone provided by the phone company. The difference is that an Internet phone uses your high-speed Internet connection to place and receive calls rather than a phone line. Since you already pay for high-speed Internet, you can eliminate the cost of a separate phone line altogether.

Depending on the provider you choose, an Internet phone may offer some or all of the same features as a traditional phone line, including voice mail and call waiting and forwarding. High-profile vendors such as Vonage make it particularly easy to switch to Internet phone service by providing a simple adaptor. You connect the adapter to your high-speed Internet line, and then plug your phone into the adapter just as you would a wall outlet.

Internet phone services range in price, but you can expect to pay about $25 per month for a service with unlimited long distance. (

Sunday, September 26, 2010

Home office Tax Tips

Here are some great Home Office tax tips. When you are ready for your tax filing, give Saggio Management Group a call.

Work From Home? Get These Tax Write-offs

Sep 03, 2010 1:56 PM EDT

Working from home usually requires a desk, computer and self-motivation, but it always requires knowledge of how to maneuver through the often confusing tax laws that can cost some entrepreneurs a serious headache if not understood correctly.

When working from home, it's imperative to know what you can write off as a business expense and what you cannot, lest the IRS some day come knocking on your door.

First and foremost, you must have a clearly defined "home office."

Cliff Ennico, a nationally recognized expert on small business law, author and former host of the PBS television series, "Money Hunt," explained that a "home office" is any part of the home considered the "principal place" you conduct business. He advises clients to hire a contractor to measure the space, since people often underestimate the size of their "office."

"As long as you don't have a place of business elsewhere, the IRS will treat this space as a 'home office' for tax purpose," Ennico said. "While having a separate room or outbuilding is helpful, even part of a room can be a 'home office' as long as it's used exclusively for business purposes."

A type of deduction the IRS will not allow: An attorney uses the den in his home to write legal briefs or prepare clients' tax returns, while his family also uses it for recreation. In this example the den is not used exclusively for the attorney's profession, so a business deduction cannot be claimed.

What if you don't have a separate room for your office? Ennico recommends using duct tape to mark the floor and walls to clearly indicate where the office is. It's not pretty, but effective.

"It's not very pleasing aesthetically, but if you are ever audited by the IRS it will show that you are following the rules closely and taking yourself seriously as a 'real' business," he said.

The biggest rule to follow is to make sure your office space is strictly used for business. That means decorating your office space for work, not your personal life, Ennico added. Picture of the spouse and kids are OK, but items like a crib or doggie-bed are no-nos.

"And make sure your artwork is appropriate to your business - anime prints are okay if you sell anime related artwork on eBay, but it's not appropriate if you sell European antiques on eBay," Ennico said.

According to Uncle Sam, in order to deduct certain storage, rental or daycare-facility use, you are required to use the property regularly but not exclusively. The IRS also says the amount you can deduct depends on the percentage of your home used for work; expenses are limited if your gross income is less than your total business expenses. The government says that to be deductible, a business expense must be both "ordinary" in your field of work and "necessary" for your business.

Here are some home office deductions to consider when filing your taxes:

-The home office itself. When deducting "home office" expenses, you can take only the "home office percentage" of the total amounts -- the square footage of your home office divided by the square footage of your entire home. So, Ennico explained, if your home office is 1,000 square feet and your entire home is 4,000 square feet, you can deduct 25 percent (1,000/4,000) of each eligible "home office" expense.

-Office computer, office phone, and other business equipment used exclusively for business.

-Depreciation on office equipment or other capital expenses that usually have a life of a year or more and increase the quality and quantity of products and services you can offer. The current maximum deduction is $250,000, so most small businesses simply "expense" their equipment purchases without depreciating them. If a business buys more than $250,000 in equipment in a given year, however, the excess amount must be depreciated.

-Mortgage interest and real estate taxes may be able to be deducted under certain conditions. It's best to check the IRS Web site for when you can do this.

-Home office repairs, maintenance expenses, utilities.

-Off-the-shelf computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. This can be any program designed to cause a computer to perform a certain function.

Saturday, September 25, 2010

Is the tax system even fair?

I heard this morning again how the Congress wants to cut taxes for the middle class, but they are divided over cutting them for everyone. I actually heard a commentator this morning say, "Why should Congress give a seven hundred billion dollar tax cut to less than 2% of the taxpayers?"

Well, the simple answer is that the two percent he was referring to pay almost 60% of the US taxes, so I say why shouldn't we give them a break. Those people are movers and business leaders in this country, they are the ones who provide jobs for the other 98%. It's time to wise up and realize that to solve our economic woes, we need to put some trust in the economic leaders who can actually make the economy work instead of those Obama academics who have never run a business or created any jobs. I really think it's time to throw out all of the members of Congress and send some common sense Conservative business friendly representatives. If we want morning in American again then we need to move all the ding bats out of Washington.

Friday, September 24, 2010

SEP IRA Tax Issues

Here's a great Q&A about SEP withdrawals. When you consider a withdrawal, call Saggio Management Group and let us provide with guidance and strategies to help reduce the potential tax burden.

Avoiding an Early SEP IRA Withdrawal Penalty

Sep 23, 2010 9:02 AM EDT

Dear Tax Talk,
I withdrew $40,000 from my SEP IRA due to being unemployed. I want to spend $10,000 on going to a tech school to get certifications and increase my chances to find work. I do not plan on getting financial aid next year. The IRS rules state an accredited institution can reduce the 10 percent (early withdrawal) penalty, but the school does not know if it is an accredited institution and refers me back to the IRS rules. How do I find out if it is an accredited institution? It is here in the United States; they do not offer financial aid, Pell grants and such.

Thank you for your time and advice.

Dear Dale,

You were fortunate to have had a business that allowed you to create the SEP, or Simplified Employee Pension, IRA. Now, it's a shame that you're giving away a good chunk to the government. With a little creativity, there may have been a better way to structure the withdrawal. While you're asking about some relief on the 10% early withdrawal penalty, you'll still end up paying federal and state income taxes.

You're hoping to save a grand while you're looking at giving away 10 times that in taxes and penalty. If you had converted your SEP into an appropriate retirement plan established under your business (the business that allowed you to create the SEP) you could have borrowed up to half of the balance tax-free. You can't borrow or pledge a SEP IRA, but you can with a profit-sharing plan. And you can move that IRA to a qualified plan very simply.

From the IRS website:

Can an IRA be rolled over into a qualified retirement plan (e.g., 401(k), profit-sharing, etc.)? An IRA can be rolled over into a qualified retirement plan, assuming the qualified retirement plan has language permitting such rollovers.

IRS Publication 560 explains the types of retirement plans available to small businesses. If you're still within the 60-day rollover window, I suggest you seek professional advice from a CPA. With a few dollars of costs, you may get good advice on how to keep more of your money.

While I hope you can get a better result as well as a good vocation, don't count on relief from the 10 percent penalty for your educational expenses. For most of the available education benefits, the school has to be accredited. The fact that the school can't tell you if it is accredited may be an indication that it's not. An accredited educational institution is any college, university, vocational school or other postsecondary educational institution eligible to participate in a federal student aid program administered by the U.S. Department of Education.

Publication 970 discusses the tax benefits of higher education. After reviewing it, you may want to reconsider your choice of schools.

Ask the adviser

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.

Let's Waste More Time and Money

Here's some great news if you like more government spending. Let's throw more money at the weak economy! This madness needs to stop, we need to return to fiscal responsibility. This is just another attempt at government control of small business. Who's in charge of the lending decision anyway? Here's the headline from Fox News.

House Approves $30B Small Business Lending Bill; Heads to Obama for Signature

Sep 23, 2010 4:13 PM EDT

Democrats controlling Congress are sending President Obama a long-delayed bill to help struggling small businesses with easier credit and give them other incentives to expand and to hire new workers.

The legislation passed by a 237-187 vote that split along party lines. It establishes a $30 billion government fund to help Main Street banks lend to small businesses and cut taxes on both big and small businesses.

The legislation is aimed at easing a small-business credit crunch that worsened dramatically after the financial crisis two years ago.

It's a modest victory for Democrats, whose jobs agenda has otherwise mostly been stalled by Senate Republicans opposed to new spending programs.

Thursday, September 23, 2010

IRS Getting Tough on Employers

Watch out, the Internal Revenue Service is getting tougher on employers and payroll taxes. If you find yourself with these issues, call Saggio Management Group and we can help.

The Health care Debacle Premiers Today

It starts today, we shall see the problems surface. Here's a great article.

New Health Care Reform Rules Debut Sept. 23

Sep 20, 2010 11:24 AM EDT

The Affordable Care Act, part of the sweeping health care reform law, was enacted about six months ago. Now, on Sept. 23, the "Patient's Bill of Rights" gets some teeth. It articulates priorities designed to restore fairness to health insurance coverage, improve access to preventive care and promote strong relationships between patients and health care providers.

Health care reform beginning Sept. 23, 2010:

No pre-existing condition exclusions for children under age 19. In the past, health insurance companies could deny coverage to sick children, either by citing benefit rules barring coverage for pre-existing conditions or by refusing to insure the child at all. The new health care reform law requires insurers to cover children of insured patients. "Grandfathered health plans" established before March 23, 2010, may continue their existing policy until 2014, at which time all health insurance discrimination based on pre-existing conditions will be prohibited.

No arbitrary rescissions of health insurance. Rescission is a widely criticized practice whereby insurers have been able to rescind insurance when a patient becomes sick. The rescission is based on an unintentional mistake on the initial enrollment paperwork by either the patient or employer. Health care reform eliminates this practice, except in cases of patient fraud or intentional misrepresentation. All insurers are subject to this new rule.

No lifetime limits on health insurance coverage. Over 100 million Americans have plans that set caps on the total amount of coverage. The caps expose patients to the risk of exhausting coverage in the midst of a costly procedure, when they need it most. For example, a leukemia patient in need of aggressive chemotherapy, a bone marrow transplant and hospital stays could exhaust the typical $1 million dollar lifetime limit in less than a year. The new provision prohibits lifetime limits on any plan issued or renewed after Sept. 23.

No annual limits on coverage. Similarly, annual limits will be gradually phased out beginning Sept. 23. Initially, health insurance plans will not be able to set annual limits lower than $750,000 per year. That minimum limit rises to $1.25 million next year on Sept. 23, 2011, and $2 million the following year. Beginning Jan 1, 2014, annual limits will be prohibited for most health plans.

These measures remedy some of the most controversial practices in the health industry. With the Sept. 23, 2010, effective date, the reform legislation ensures that patients who need care the most -- those recently diagnosed with or currently battling serious illness -- have the health insurance they need.

Patient choice and access to care

Also going into effect on Sept. 23, 2010, are provisions to strengthen patients' access to medical care, particularly preventive services.

Protecting choice of health care provider. Patients will have the option to select and keep a primary care doctor from among the insurance company's participating provider network. In addition to promoting a long-term relationship between patient and doctor, this provision encourages patients to seek preventive care, which lowers hospitalization rates and costs. The rule also prohibits insurers from requiring a referral for obstetric or gynecological care.

Improved access to emergency services. Health insurance companies will no longer be able to deny coverage or demand that patients pay co-insurance for the use of out-of-network emergency services. This protects patients who become ill on the road or far from a network hospital.

Preventive services covered. Beginning Sept. 23, all new or renewed health insurance plans must cover preventive services such as vaccinations, mammograms, colonoscopies, and nutrition counseling for obese patients. These services must be free to the patient, with no applicable deductible, co-pay or co-insurance.

Adult children covered to age 26. Children will have extended access to health insurance coverage under their parents' health insurance plan until age 26, unless they qualify for health insurance through their employer.

More health care reform coming

Health care reform ultimately affects all Americans, whether you have an individual or employer plan, or are uninsured. Some subscribers and employers may choose to stay with their current plans, many of which are exempt from some Sept. 23 provisions. By 2014, however, all plans will have to conform to these and other standards. Health care reform innovations still ahead include electronic health records, discount prescription drugs for seniors and state-run insurance exchanges to encourage competition.

Legislators have wasted no time putting into effect some of the Affordable Care Act's key provisions. If you or your employer subscribe to a new health insurance plan or renew a current plan, these changes will likely apply to your health insurance.

This article originally appeared on

Wednesday, September 22, 2010

Great Debt Advice

Here is a great article from Fox Business

4 simple steps to getting rid of credit card debt

Sep 22, 2010 11:00 AM EDT

Dear Opening Credits,
I have a son who has about $18,000 in credit card debt. He has a Jeep paid off. He can borrow against it and pay about $13,000 of it off and maybe sell a boat for the rest. Do you think this is a good thing to do? -- Mary

Dear Mary,
If I had a nickel for each time parents asked how they could help their kids deal with their debt -- well, I could pay off your son's bill and finance my own daughter's college education. I suppose it's all part of being a caring mom. When we see our child having a hard time, our first instinct is to jump in and do what we can to alleviate the pain.

Is it the best idea, though? Not necessarily. I get that you want to give your son some guidance about how he can deal with that debt, but it would be far better for him to reach out instead. Though you don't reveal his age, I presume he's at least 18 -- and an as adult, he should be the one to pursue the answers he needs. More importantly, he needs to figure out a way to not get into the same situation again.

That said, while your boy has clearly made some financial mistakes, they are solvable. And since you're his mouthpiece, I'll tell you what to tell him.

1. Suspend use of the credit card. If his intention is to delete the balance, it doesn't make any sense to keep using it and acquiring more debt. Don't close it formally; just tuck it away in a private and secure place for a while.

2. Sell the boat and anything else of value he doesn't need. Notice I said "need," not "want." Unless your son is a fisherman or takes people out on paid charter tours, that item is absolutely unnecessary. Hanging on to $18,000 is horribly expensive. If the account's annual percentage rate (APR) is 17 percent, the interest alone is about $255 per month! That is a dreadful waste of money. Therefore, he should sell what he can and put the proceeds toward the balance.

3. Forget borrowing against the car and look into getting a much less expensive vehicle instead. The last thing your son needs is another loan to deal with. So how about selling the Jeep and trading down to a nice, simple used car that's a few years old? Or he could try a motorcycle, scooter or, heck, even a bicycle? What I'm proposing may seem outrageous to him, but it's not. Plenty of people make far more difficult and painful financial choices every day.

4. Develop a plan to eradicate the remaining balance. Once your son as reduced his balance by liquidating extraneous stuff, he still may have some debt to deal with. Now he has to come up with a feasible plan to pay it off ASAP. Credit card debt should be considered a short-term loan only, so I would like him to be debt-free in 12 months.


Well, let's say he's able to knock his debt down to $8,000. By sending $730 each payment cycle, he'd be out of the red in a year. If he's young and healthy and has few other obligations, he just may be able to swing it. For example, with a full-time job making $10 per hour, he could net $1,300 or so per month. After paying the credit cards that fixed sum, he'd have $570 to live on for the rest of the month. Sure, it would be tight, but I bet he could do it.

After conveying this information, resist the urge to help your son further. Nothing teaches better than a bit of suffering. Downsizing from a cool car to a rickety bucket isn't fun. Nor is living hand-to-mouth, selling precious possessions and working really, really hard. When your baby clears up the debt with such effort, he'll be a man who will not only be proud of himself, but who will be less apt to repeat past mistakes.

More from

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You're eligible for Chapter 7 bankruptcy, but should you file?

Politics of Inactivity

Well, it looks like Congress is going to high tail out of Washington early because of the impending doom of losing their seats. I would expect that this means the "Bush" tax cuts will not be extended. So the question is what happens in the lame duck session after the election? I expect that the Democrats will still not pass extensions to the tax cuts because they will be bitter over their losses, so I think we need to plan on some last minute tax extensions once a new Congress is sworn in. This is going to be a tax preparation mess.

We will keep you up to date as this moves forward and The Saggio Management Group is poised to prepare these taxes regardless of the changes, even if they are last minute.

Call your Congressional Representative and let your voice be heard about all of this. It's time for all of us to stand up and shout to them to do what is right! The economy is still in the basement and the expiration of the tax cuts will only make it worse.

Tuesday, September 21, 2010

So, the recession is over?

I heard in the press yesterday that the current recession ended last June, are you kidding me? What kind of knuckle headed economist would have the audacity to even say this and what kind of reporter would even report that news? I look at my clients, many who are struggling and I know the recession is far from over. With unemployment still well over 9% I hear the economists say this is a jobless recovery, in other words, the poor economy is the new normal.

Well, it's not acceptable to me and it should not be the same for anyone else. The American

Great Article

Dream is based on the ability of all of us to succeed with hard work and determination. It's time to return to that by eliminating burdensome taxes and reducing out of control government spending. This will lead to a true recovery with jobs and opportunities for everyone who is willing to buckle down and work hard.

When your ready to take the next step and build your business or start a new business, give Saggio Management Group a call and put us to work for you.

Monday, September 20, 2010

A name for your business

Great ideas for naming your business. Once your ready to open your business, give Saggio Management a call to assist you in entity selection and start-up assistance.

Picking the Best Name for Your Business
Sep 17, 2010 12:09 PM EDT
For small businesses, the answer to what's in a name is everything.
Experts say naming your business should require consideration comparable to naming your baby.
"Your name really requires almost as much attention as your business model," says John Gerzema, author of Spend Shift, out in October. "Many entrepreneurs and start-up founders will spend a lot of time planning the business model and the name becomes a bit of an afterthought."
The name of your business can give people a perception of the quality of services or products you are offering.
"It's the first and most lasting impression that a person will ever have of your business; your name really is a representation of what your company finds important," says marketing and branding expert, Patrick Goodness of the Goodness Company. "If you haven't taken the time or the energy to create a name or brand that helps people better understand the experience that they're going to have with your business, they're not going to give it much thought."
Here's how to choose a name that best suits your business.
Take the World Wide Web Into Consideration
A name that is easily accessible online is crucial to your company's success, according to the experts.
"Choosing a name that you can find easily on Google is the most important factor," says Lauren Teton, principal at Name One! New York. "People are going to look on the Internet to find your business."
Do some research to see what domain names are available to avoid trademark infringement, warn the experts. Pick a name that is easy to spell so people will find you easier.
It is also important to pick a unique name that distinguishes you from similar Web addresses.
"The last thing you want to do is create a domain name that directly leads to a competitor's web site," says Goodness.
Keep Creativity in Check
While it can be fun to come up with super creative names, be careful not to get carried away and make it hard on customers.
"If it has mechanical flaws in it where people can't spell it or pronounce it, that would be going too far," says Teton.
Incorporate Brand Recognition
It's important your business' name reflects its values and products.
"It makes more sense to name your business in relation to the service it provides and to try to be clever and creative without losing sight," says Goodness. "Our goal of naming is to create a positive first impression that is indicative of a service that you're going to offer."
A name that consumers identify with can create a buzz about your business. You may want to explore the possibilities that advertising and marketing have to offer in augmenting brand recognition.
Test it Out
It's easy for small business owners to get wrapped up in the naming process and lose track on how the outside world will perceive the name.
"Get people whose opinion you trust, some key personnel that are representative of your target demographic," says Goodness. "Ask them some specific questions about the experience that they want to have, about the type and quality that they are looking for."
Teton recommends forgoing the market research route and suggests asking your friends and family members for their opinions.
"There might be negative connotations to a name that you haven't thought of," says Teton. "You want to make sure there aren't 'street definitions' [of your name]."
Customers Come First
Goodness encourages business owners to be willing to put their own preferences to the side; you might have a name that you don't personally love but if it is well-received by your target audience, it may be better for your business in the long run.
"If you have a poor company name or brand, over the lifetime of the business, you will spend nearly three times as much to successfully market the company as a competitor will with a good name and brand," he explains. "For a business owner, it becomes a real priority to ensure that their business name and logo and brand are on par for successful growth of their business."

Sunday, September 19, 2010

What stimulus summer?

Here's a great article from the Fox Business Network

Stimulus: What a Disaster  

Sep 17, 2010 5:46 PM EDT

Life is getting harder for Americans - from close to 10% of us not having a job, to not making very much if you do.

And it's not just the last year or two... it's the last decade... or "the lost decade," according to the Wall Street Journal.

The Census Bureau shows for the first time in a generation, American income fell over a decade. In fact, between 2000 and 2009 incomes plummeted nearly 5%.

To compare, for those of us who remember the 70s, incomes rose nearly 2%; the median income for a household is now less than $50,000 a year.

Again looking back into history, income drops are nothing new.

The 80s and 90s saw big down swings in what people earned, but by the end of the decade the pendulum usually reversed itself.

Not this time.

And an even more startling number: Those Americans living below the poverty line is up more than 1% since 2008, that's more than 43.5 million Americans living in poverty!

Breaking it down further:

More than 40% young adults -many of whom had to turn back to mom and dad- are living below the line of making less than $12,000 a year!

So what to do in light of these tragic numbers?

The administration has said from Day 1: spend, spend, spend. But as I'm sure you well know,  that's not working!

The numerous stimulus bills have failed to produce the results we were promised. That money was misspent, misappropriated and  frittered away.

A report out of the LA Times today reports $111 million was spent on just 55 jobs in Los Angeles. The money went to just two agencies  who had predicted they would bring in hundreds of jobs fixing up streets, bridges, sidewalks and storm drains. Instead of fixing the problems, the bail outs and stimulus plans became pots of cash to irresistible to for politicians to use for their own purposes. And no pot of federal cash was bigger than TARP.

Take One united for example: the bank allegedly getting special treatment thanks to its connections to Congresswoman Maxine Waters.

It turns out there was a lot about this bank  Congress didn't know before shelling out $12 million to save it.

The Washington Post says the bank did not meet the eligibility requirements of TARP--in fact Waters' buddy Barney Frank had to create a new provision just for One united for it to get the funds.               

Despite the evidence piling up against them , Democrats on the hill and in the White House keep saying we need more spending, that the stimulus wasn't enough.

We can agree on one thing: the stimulus wasn't enough,  it was a disaster.

Charitable Giving

Now that the kids are back to school it may be a great time to do some fall cleaning. When you find those items which are not useful to you, but could be a treasure for others, consider donating them to charity.
When you make your donation, be sure to keep a detailed list of each of the items you donate and their corresponding values. Also make sure you get a receipt from the charity. Many of our clients miss these opportunities and this can be a great deduction.
If you have specific questions about charitable giving, give us a call at Saggio Management Group and we can discuss tax savings alternatives with you.

Saturday, September 18, 2010

Investment Traps

I spoke with a friend last evening and his financial advisor was pushing him to take his money out of the stock market and roll it all into an Annuity. The broker promised a 5% annual return on the annuity and my friend thought that was a great deal! When we spoke last night he asked me about my opinion and I have some reservations. A 5% return on an investment choice right now is a great choice since most standard "Bank" investments are paying miserably low rates. That's today - but I see inflation on the horizon. To lock your money into a 5% return in a time of low interest rates may be appealing, but what happens when market interest rates return to the higher levels we have seen in the past. If you will remember the interest rates of the late 70's when Jimmy Carter had taken our economy to the brink of collapse, I recall having a simple savings account paying 6% interest. I think we are going to see similar circumstances in this country over the next several years. I think inflation is the unwelcome visitor sitting right by the door, just lurking outside in the bushes waiting to pay a visit. When that happens those 5% great paying annuities will be a bad choice. When inflation hits and the costs of everything goes soaring, those who are locked into fixed rate investments, like these annuities are going to find their costs of living increasing, but no increases in their income. So, before you jump to what seems to be a great deal today, take a look at your tomorrow and decide if it's worth it.
At Saggio Management group we can assist client's will building sound financial decisions. Although, we don't offer financial advice, we do assist clients in developing the tax strategies that will produce investments. We work with a trusted partner from Edward Jones investments in working with clients to make wise investment choices. Give us a call and we can assist you with navigating the potential pitfalls of the market..

Friday, September 17, 2010

Do we really want to soak the rich?

All that I have been hearing for the last several days is how we need to give tax breaks to the middle class and soak it to the rich. I am very concerned that what we are seeing is an attempt to develop class warfare. It's easy for a politician to promote such a plan because they realize that the bulk of their constituents are middle to lower income. It’s also easy for the vast public to accept this since it comes down to, "It won’t affect me!" Well, it will affect everyone. The so called "Rich" are already paying an enormous burden of the tax in this country and to increase that tax burden is only going to lead to further damage to the already weakened economy. The truth is the "Rich" are the business owners that employee the middle class. If the "Rich" are taxed more, they will no doubt reduce employment levels and some may even decide to close their businesses all together.


I think it's time to take a look at reducing taxes for everyone and let's get this economy going again. I remember when Ronald Reagan was elected and he reduced the tax burden for everyone. It led to one of the greatest economic expansions in this country's history. It also brought hope to people who had suffered through the Carter years with unreal interest rates, gas lines, and despair. I remember Reagan saying, "It's morning in America." It's time to start a new day now also. It's time to realize that you cannot continue to lay the enormous tax burden on our people. Of course, this is going to require sacrifice because it is my understanding that the entitlement rolls have swelled to where 44% of Americans receive some form of hand-out. We need to take personal responsibility and fend for ourselves and stop looking to government to save us. I think that is the major issue. Everyone has their hand out, but nobody wants to pay for it. Tough economic times are ahead, don’t let the politicians fool you.


Thursday, September 16, 2010

Are you kidding me?

I am not sure how many people are aware of this, but as part of Health Care Bill all businesses will be forced to issue 1099 forms to all vendors whom they spend in excess of $600 annually. Currently businesses are not required to report this information unless they pay an unincorporated subcontractor. I can see that the goal of the government is to track more of the money moving in the economy, but this is crazy! Small business owners are now forced to track information for all purchases so they may be in compliance at year-end. The old shoe box full of receipts dropped off at the accountant on April 1st will be a huge problem. The fines for not issuing the mandatory forms is drastic so unless Congress changes the law, business owners better get in line for compliance. Speak to your accountant and we can assist in setting up the necessary tracking mechanisms to keep you out of trouble. This had nothing to do with health care, but more to do with raising money for the government so Congress can say the cost of the health care plan is reduced. Looks like we are all going to pay even more for the health care debacle.

This gives me a headache, shouldn't the health care system make me feel better? I for one think it's time to repeal the health care bill and really work to improve our economy instead of putting more on the backs of small business.

Wednesday, September 15, 2010

Real Hope and Change

I woke today and the sun just seems a little brighter. For the first time since Obama was elected, I feel that we may actually be headed for real hope and change. The victory by O'Donnell against the establishment candidate Castle just proves to me that people are mad as hell and they want change in Washington. I hope this translates to a better environment for businesses. I truly believe that we need to return to the days where the reigns on business success are no longer tied down by the burdensome tax code. Let's all work as hard as we can to throw them all out and let's put some common sense in Washington. Let's return to a country where we can work hard and get ahead without the burden of government intervention. Let's all look at ourselves more clearly and work to improve our country by using the gifts we each have. Let's march on to November with our sights on rebuilding the American Dream. Do your part because their is no room for simple bystanders. Move on or get out of the way.

Tuesday, September 14, 2010

Watch out for this internet scam!

One of my clients an e-mail message today in reference to his tax deposit payment. It asks the client to go to an internet site It claims their tax deposit was rejected because the taxpayer identification number field is not valid. It's a scam e-mail from someone trying to get business tax information. I wanted to share this with everyone and remind everyone that the Internal Revenue Service does not contact anyone via e-mail for this type of issue. It is interesting that the reply to address for the email goes to a gmail address.

Be on the lookout for these types of e-mails and make sure that you check their validity. If you have an questions, please feel to contact me to discuss this further.

Monday, September 13, 2010

A Tax Return is not an audit

I was listening to the Dan Gaffney Show this morning on WGMD and a caller was speaking about the embezzlement case where an employee reportedly stole $900,000. The caller seemed to think that an accounting firm which prepares a tax return should have found these problems. I called into the show and expressed that when we prepare tax returns, we don't audit a client's books. In many cases when we prepare a tax return we are just given the year-end "financial" reports and we use those reports to create the tax returns. We don't review bank reconciliations, look at all the cancelled checks or perform procedures to look for embezzlement. Businesses need to expand these year-end engagements to include at the very least a review of the banking records and payroll records.

Clients may also want to consider a monthly accounting relationship which includes monthly bank reconciliations, preparation of payroll reports, and creation of financial statements. These services are very affordable and may reduce the potential pitfalls.

Monthly accounting relationships may also assist a business in improving their bottom line because we will review the financial performance on a routine basis instead of at the end of the year when it's usually too late to make any tax beneficial moves.

Using the services of an independent, professional and experienced accountant is an investment that will produce dividends for years to come and in many cases could actually save a business. I always tell clients that successful business people start with a strong foundation and surround themselves with qualified professionals.

Sunday, September 12, 2010

Another Embezzlement - When will we learn?

I read in the News Journal again today about another embezzlement from an area employer by an employee of their business. This particular employee stole $900,000 over seven years. This is just another story of local employees embezzling thousands of dollars from unsuspecting employers. I have personally handled several embezzlement cases to the tune of about $1.5 Million dollars during my career. The stories are very similar. It's start with a business trusting an employee to handle sensitive financial affairs and then not following up to make sure that the employee is handling those affairs in an appropriate manner. The case today was probably uncovered when the State of Delaware contacted the employer to request payment of payroll taxes. This seems to be the way most of these cases are finally brought to the attention of the owners or management. Business owners need to take a hard look at the procedures and processes they employee in their businesses and even though we should all have trust in our employees, we need to trust - but verify. I think it was Ronald Reagan when he was dealing with the Soviet Union in regards to nuclear arms reduction who said that first, but he was right on target.

As public accountants we can assist businesses in monitoring these issues and develop specific procedures to limit their exposure to these kinds of problems. We cannot uncover everything, but we can certainly develop plans that will segregate duties or outsource parts of the operational chain to limit the ability of exposure to the embezzlement. For example, public accountants can provide monthly bank account reconciliation which will give us a chance to take look at the financial transactions of the business from another perspective and provide some level of assurance that the books are not being manipulated. We can also offer complete payroll services which provide businesses with complete trust that their employees are being paid as directed and that all necessary payroll taxes and reports are being filed.

These services are very affordable and certainly cost a great deal less than the thousands of dollars which are misappropriated on an annual basis. I guess we all need to take a hard look at how we run our businesses and find ways to limit our exposure to fraud. We need to be frugal during these tough economic times, but we also need to seek the assistance of experts, like public accountants who can assist in developing programs to ensure continued business success and limit the opportunities for employee theft. If you are interested in discussing this further, feel free to give us a call and we can develop a plan for your business, don't wait until it's too late!

Saturday, September 11, 2010

Home Buyer Tax Credit Extension Reminder

IR-2010-80, July 2, 2010

WASHINGTON — Eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April now have until Sept. 30, 2010 to close the deal, according to the Internal Revenue Service.

The Homebuyer Assistance and Improvement Act of 2010, signed by the President today, extended the closing deadline from June 30 to Sept. 30 for any eligible homebuyer who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010. The new law addresses concerns that many homebuyers might be unable to meet the original June 30 closing deadline.

The IRS reminds taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit. To avoid refund delays, those who entered into a purchase contract on or before April 30, but closed after that date, should attach to their return a copy of the pages from the signed contract showing all parties' names and signatures if required by local law, the property address, the purchase price, and the date of the contract.

Besides filling out Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, all eligible homebuyers must also include with their return one of the following documents:

  • A copy of the settlement statement showing all parties' names and signatures if required by local law, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
  • For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
  • For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Besides providing a tax benefit to first-time homebuyers and purchasers who haven’t owned homes in recent years, the law allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. Homebuyers claiming this credit can avoid refund delays by attaching documentation covering the five-consecutive-year period:

  • Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
  • Property tax records or
  • Homeowner’s insurance records.

There are three options for claiming the credit on a qualifying 2010 purchase:

  • If a 2009 return has not yet been filed, claim it on Form 1040 for tax-year 2009. Though these returns cannot be filed electronically, taxpayerscan still use IRS Free File to prepare their return. The returns must be printed out and sent to the IRS, along with all required documentation. The IRS urges taxpayers claiming refunds to choose direct deposit.
  • If a 2009 return has already been filed, claim it on an amended return using Form 1040X.
  • Whether or not a 2009 return has been filed, wait until next year and claim it on a 2010 Form 1040.

More details on claiming the credit can be found in the instructions to Form 5405, as well as on the First-Time Homebuyer Credit page on

Friday, September 10, 2010


This is a great article from Fox Business.

It takes effort." "It's the little things done every day that make you successful." Advice from a marriage counselor? Maybe, but it could also be instruction from your financial planner. And, like the small kindnesses you offer your spouse every day strengthen your relationship, a little effort on a regular basis can nurture your finances. It's not realistic to skip feeding the family a couple of nights a week, but here are some ideas for getting the most from your money.

Starting Small Helps You Save Big

Financial advisors sometimes mention eliminating your daily drive through at your favorite coffee place as a great way to save money. Sure, but if you're hooked on caffeine, it's not much of a motivation to save. Instead, consider modifying your coffee purchases. Visiting your favorite place twice a week, and buying cheaper brew at a convenience store three times a week can save about six bucks a week, depending on your order. You can save about $26 a month this way, and more if brew your own joe and take it with you. Making changes like this can save an additional $50 to $100 a month without giving up everything that you enjoy.

It's Time for Change: Feed the Change Jar

In a time when our leaders are promoting change, don't ignore your piggy bank or change jar! Empty pockets, purses, and wallets daily. When you pay for anything in cash, pay with bills, and add the change to your change jar. It's amazing how fast change can add up. Use it as mad money, or add it to your savings. If you're carrying credit card debt, use that spare change for paying down debt.

Cutting Down on Spending May Mean Cutting Up Credit Cards

How many times have you bought something on impulse and paid for it with a credit card? How stuffed is your closet with clothes you don't wear or your garage with stuff you don't use? Would you have bought most of this stuff if you had to pay cash instead of using that trusty plastic?No? If you're carrying a credit card in your wallet, replace it with a debit card.

As mortgage and savings rates reach historically low levels, credit card companies typically charge much higher annual percentage rates (APRs.) Paying off credit card debt can provide a higher yield than liquid savings, certificates of deposit (CDs), and money market accounts. If your credit card APR is 12%, and you carry a balance of $5000 for a year, you're paying approximately $600 annually for finance charges! Keep funding your deposit accounts, but avoid increasing credit card balances. And those platform shoes that cost a paycheck,and you only wore them twice? Sell them online or at your next garage sale! You already know what to do with the money.

The original article can be found at
Savings Is Like Love: It's the Little Things That Make it Work

Thursday, September 9, 2010

City of Wilmington Greed

The City of Wilmington has decided to tax all income from S Corporations as wages and assess the 1.25 percent on those earnings. Currently the wage tax is only imposed on any W2 earnings taken. S Corps are required to take a reasonable salary, so why does the City of Wilmington feel that they can be totally unreasonable with this tax? I guess the only good option is for all the businesses to move. We certainly welcome all of you to join us out here in the county. For a city who needs an increased tax base, I really don't understand the game being played here. I guess they will figure it out when the city has more commercial space available for lease and you can hear a pin drop at noon on Market Street. The City of Wilmington, no longer a place to be somebody, but rather a place to tax everybody!

Ten Years

A personal note today. I want to say Happy Anniversary to my soul mate Jennifer today. We celebrate our tenth anniversary today and I feel like the luckiest man alive. She has been a great companion, a wonderful mother to our children and the best business partner one could ask for. Here's to the next 50 years! Love you.

Wednesday, September 8, 2010

Much talk, little action, waiting for the next shoe to drop!

It is my understanding that President Obama intends to support the extension of the "Bush" tax cuts, but not to anyone making more than $250,000, then in the next breath he says that they should not be for anyone making more than $100,000. It seems like this target continues to move and I think we should all be ready for the inevitable, the "Bush" tax cuts are not going to be extended unless something amazing happens. The truth is that the Republicans are not going to bargain on this because of their perceived victory in the fall elections. I am beginning to agree with many who say we should throw them all out of Congress and just start over. I will stay off the political soap-box, but the truth is that neither party has any great ideas for how to get us out of the position we are in and the more they meddle with the free market, the more turbulent the economy becomes. The sad reality is that right now many of my business clients want to expand their business, hire new employees, purchase new assets, but they simply don't know what to expect expect next. It will be interesting to watch the political theatre for the next two months. My bet is we hear much, but as normal not much is done. I will keep everyone in the loop with the impact these "proposals" will have on the bottom-line.

Here is a great article

Tuesday, September 7, 2010

Business Tax Incentives

I understand that President Obama will put forth several tax incentives for businesses. The first of these incentives is said to be a 100% write-off of capital expenditures. What this means in basic terms is that any business assets purchased would be eligible for immediate write-off in the year they are purchased, instead of over time as required by current depreciation requirements. For example, if your business purchases a new machine for operations which costs $250,000, the full-cost of the machine would be deducted against current year income. For client's who are S-Corporations or LLC's this basically results in costs savings equal to your tax rate. So, in the example of the $250,000 machine, if we assume you fall into the 30% tax bracket, then the effective costs savings would be ($250,000 x .30 = $75,000). You would basically be paying a net $175,000 for a machine which actually costs $250,000, that's a real savings.

We will see where this proposals goes. I will keep everyone aware of the other business incentives which are supposed to be released later in the week.

Monday, September 6, 2010

I just saw the reports from the President's economic speech today. It was full of incentives building new roads, bridges, etc., but no mention of any tax incentives. We really need some middle class tax relief since the Bush tax cuts will expire at the end of the year. We'll see what the November elections bring.

Economic Update

I just heard that President Obama is going to speak this afternoon and layout some ideas for jump starting the economy. I hope we hear some mention of the idea of tax cuts. I have heard some rumors that the administration is considering a payroll tax holiday, I am not sure what that means at this point, but I will keep everyone in the loop once I hear something. Don't forget about the Delaware Primary elections on September 14th, make sure your voice is heard from Delaware to Washington.

Labor Day!

Happy Labor Day!

Welcome to the Uncle Saggio Blog. I plan to share tips, ideas, news items and other interesting things each day. Enjoy!

Now that we are in September, it's really time to start thinking about your taxes for 2010, now is the time to do that home clean-up and take items to charity, make sure you get a receipt and list the value of each of the items donated, so we can take a deduction on your tax return. My wife always says, if you haven't used it in six months, you probably don't need it!