Are You Purchasing a New Home?

If so, you need to understand when points are deductible.

In order for points to be fully deductible in the year they are paid, all six of the following requirements must be met:

1. The settlement statement must clearly identify the amount of points paid. They can be referred as loan origination fees, maximum loan charges, loan discount or discount points;

2. The points must be computed as a percentage of the principal amount;

3. The points paid must not exceed the normal rate charged in the area;

4. The points must be paid on a loan for a taxpayer's principal residence and the loan must be secured by the principal residence;

5. The points must be paid from the taxpayer's own funds not from mortgage loan proceeds. Earnest monies and other amounts paid at closing will generally satisfy these requirements and;

6. Taxpayer must use the cash method of accounting.

Don't miss out on this important tax deduction! If you need assistance, please contact a Strategic Financial Group accountant today!

Taxpayer Wins!!!!!!

This is a good story that applies to many people. This individual died leaving a percentage of her estate to her children, and the remaining percent to her favorite charity in her will. Her estate included a house, cash, and an Individual Retirement Account. Her executor, with the help of professional advisors, requested a private letter ruling from the Internal Revenue Service allowing the estate to assign the Individual Retirement Account to the Charity. The IRS granted this request last month.

What does this mean? It means a HUGE TAX SAVINGS to the estate and the beneficiaries. If the estate would have cashed in the Individual Retirement Account and given the funds to the charity, the estate could have paid up to $34,145 in federal income taxes ($100,000 IRA using the 39% tax bracket)! Instead, the Internal Revenue Service allowed the estate to assign or transfer the Individual Retirement Account to Charity without incurring any tax liability. When the Charity cashes in the Individual Retirement Account, there is no income tax on this transaction since non-profit organizations are not subject to income tax.

If you desire to leave part of your estate to a charity, we strongly suggest that you do not wait for post-mortem estate planning; instead, we urge you to consult one of our advisors today to see how to pass more of your estate to your loved ones.

Manage your business finances more effectively with our:

QuickBooks^® WEBINAR

Are You in Business, Know Someone in Business, or Are Thinking About Starting a New Business . . .?

Then you need to take advantage of the QuickBooks® Training Webinar offered by Strategic Financial Group, LLC.

Hosted by Denise De St. Jean, CPA, the QuickBooks® Webinar will help you get organized and run your business more profitably without leaving your office. The Webinar training format allows you to view the presentation over the internet and listen in via conference call saving you time. This 50-minute Webinar is designed to help you better understand several QuickBooks® strategies.

Ms. De St. Jean will guide you through steps and short cuts that will save you time and increase your accuracy. She will also demonstrate how to understand and use various reports generated by the QuickBooks® program.

Join our QuickBooks® training from the comfort of your own office.

WEBINAR TOPICS:

$25.00 per login

PRE-REGISTRATION IS NECESSARY 

Call DEE or LINDA 219-736-8902 or 1-888-363-7147

 We will accept your reservation by VISA/MC

July 27, 2005

9:00AM login

Pre-register by:

July 20, 2005

The Gift That Keeps On Giving…Back  

In a retirement cash flow pickle ?   If your investment portfolio is largely made up of one highly appreciated company stock that pays a low dividend, you have some serious investment and tax issues that need to be addressed. 

The option for most people is to sell those highly appreciated stock holdings to create more income.  That means that you will have to pay capital gains tax today which is not the most cost effective way to generate fixed income and diversify. 

Or have you considered a charitable gift annuity?  This is an excellent way to diversify, increase your retirement income, avoid capital gains, and offer a unique way of helping charity(s) of your choice. 

Here is how it works.  You, the taxpayer, will gift the stock to a charitable entity and as part of a contract will receive an annual income for life.  The Charity will sell the stock and diversify the investment holdings so that the proceeds will generate the cash flow for the annual income payments.  There are five benefits to this tax savings strategy: 

1. Diversify a portfolio without paying capital gains tax.

2. Taxpayer will have an annual income stream for a period of years.

3. Taxpayer will receive a charitable deduction for the transfer of stock shares to the charity.

4. Taxpayer will receive a 1099 for the income stream that will be made of interest earned, capital gains, and return of principal.  This allocation can help lower current income taxes.

5. The Charity will receive a donation at the time the gift annuity is established.

If this tax saving idea is of interest to you and you need more information, please contact Strategic Financial Group, LLC or check out the website:  www.sfgweb.com