December 2009

New CPAs             We welcome two new CPAs to the firm.  First, Jana Johnston Cox brings over 12 years of experience to the firm after having worked in public accounting in Monroe, New Orleans, and Baton Rouge.  Jana and her husband, James, live in Shreveport and have 4 children.               Our  second  new  CPA  is  Matthew  Van Devender who has been  with the  firm since December 2005.  In November, he received word that he has now completed the requirements for his certificate.  We are very happy with Matt in his success and feel fortunate to have him with the firm.               We look forward to the opportunity of working with these new CPAs and have high expectations for their careers in public accounting.
________________________________________________________              New Law Expands Homebuyer Tax Credit
In November 2009, the President signed into law the Worker, Homeownership, and Business Assistance Act of 2009.  Among its many tax provisions, the Act provides an extension and expansion of the first-time homebuyer tax credit.  As you will probably recall, under prior law a refundable federal tax credit of up to $8,000 was allowed for qualifying first-time homebuyers who purchased a home between April 8, 2008 and December 1, 2009.  To qualify for the credit, a homebuyer must have had no ownership interest in a principal residence during the three-year period before the purchase of the home.  In addition, the allowable credit was phased out for most single taxpayers with adjusted gross income between $75,000 and $95,000 ($150,000 and $170,000 for married taxpayers filing jointly).               The new Act generally extends the first-time homebuyer credit for contracts to purchase entered into before May 1, 2010 and closed before July 1, 2010.  The  new  law  also makes the credit available to higher-income		taxpayers, as well as to some individuals (long-time residents) who are not first-time homebuyers.  A long-time resident is a homeowner who has maintained the same principal residence for five consecutive years during the eight-year period ending on the date of the purchase for a subsequent residence.               The maximum credit for qualifying long-time residents is generally the lesser of $6,500 or 10 percent of the purchase price of the principal residence.  The credit phases out for most individual taxpayers whose adjusted gross income is between $125,000 and $145,000 ($225,000 and $245,000 for married taxpayers filing joint returns) for the year of the purchase.  In addition, for purchases after November 6, 2009, the credit is unavailable if the purchase price of the residence exceeds $800,000.               We will be glad to discuss how this credit might affect you.
________________________________________________________  FDIC Insurance Limits Extended through 2013
Earlier this year, we discussed the higher FDIC insurance coverage for deposits maintained at federally insured banks and savings and loans institutions. The temporary coverage of $250,000 on most accounts was scheduled to revert back to the old limit of $100,000 on January 1, 2010. In late May, the President signed a bill that postponed the expiration of the $250,000 FDIC insurance limit until December 31, 2013.   This new law does not nowisthetimeforallgoodmen xyzbtu		change or extend the coverage applicable to IRAs and certain other retirement accounts, which will continue to be covered beyond December 31, 2013 for up to $250,000 as was the case before any of the limits changed last year.       For more information on FDIC insurance, you can visit the FDIC website at www.fdic.gov or contact your local bank or banker for more specific information.
________________________________________________________        Expansion of Section 529 Plan Expenses
As many of you know, distributions from Section 529 college savings plans are completely free of federal and Louisiana income tax as long as the distributions are used for qualified college expenses. For this purpose, qualified expenses have until now included room and board, tuition, fees, books, supplies, and equipment required by an educational institution for enrollment or attendance. The American Recovery and Reinvestment Tax Act of 2009 expanded the definition of qualified higher education expenses to include the purchase of any computer technology or equipment or internet access and related services if the equipment and services will be used by the beneficiary during xyzbtu		any of the years in which the beneficiary is enrolled at an eligible educational institution. This expansion of the scope of Section 529 accounts is effective for expenses paid or incurred during 2009 and 2010. With appropriate documentation, a Section 529 account may pay directly or reimburse the beneficiary for qualifying expenditures free of federal and Louisiana income tax. If you maintain or are involved with a Section 529 account, you might want to ensure that, in addition to the traditional qualifying expenses, any computer equipment and internet access are paid from the account. We will be happy to discuss the application of this new rule with you.
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Second Best (Louisiana during Recession)
A recent study by Portfolio.com of how the states and the District of Columbia have fared during the recession ranks Louisiana as the second best of the 51.  Using data from the U. S. Bureau of Economic Analysis, Federal Housing Finance Agency and the U. S. Bureau of Labor of Statistics, the survey examined six areas including job growth, current  nowisthetimeforallgoodmentocometotheir		unemployment, income growth, wage growth, home value growth, and construction job growth over the past year.   Louisiana continues to lag in many significant areas, but we have certainly been blessed with a relatively good economy over the past year.
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Odometer Reading on Business Vehicle Required December 31   To claim a business expense deduction for vehicle usage, the total miles driven during the year, as well as the number of business miles and personal miles, must be reported in the tax return in which the deduction is claimed.  On December 31, you should record the odometer reading of any vehicle used for business for which a deduction will be claimed.
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Time to Compute Personal-Use Value of an Employer-Provided Vehicle           Early January 2010 is the time to compute the 2009 personal-use value of employer-provided vehicles that must be reported on the employees’ 2009 Forms W-2, and on which FICA and possibly federal income tax must be withheld and paid. Click here for a form that you may use to compute the personal-use value of an employer-provided vehicle. ________________________________________________________

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