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mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} </style> <![endif]--> </head> <body lang=EN-US link=black vlink=black style='tab-interval:.5in' alink="#000000"> <div class=WordSection1> <p class=MsoNormal style='margin-left:120.0pt;text-indent:-120.0pt;tab-stops: 120.0pt;mso-layout-grid-align:none;text-autospace:none'>&nbsp;</p> <div align=center> <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=782 style='width:586.5pt;mso-cellspacing:0in;background:white;border:solid #660000 1.5pt; mso-yfti-tbllook:1184;mso-padding-alt:7.5pt 7.5pt 7.5pt 7.5pt'> <tr style='mso-yfti-irow:0;mso-yfti-firstrow:yes;height:275.25pt'> <td width=750 colspan=2 valign=bottom style='width:562.5pt;background:black; padding:7.5pt 7.5pt 7.5pt 7.5pt;height:275.25pt'> <p align=center style='text-align:center'><img border=0 width=750 height=367 id="_x0000_i1025" src="http://img-ak.verticalresponse.com/media/a/e/8/ae887556f4/d48be386bb/20d4801db6/library/mainbanner.jpg" alt=mainbanner.jpg align=bottom></p> </td> <td valign=bottom style='padding:7.5pt 7.5pt 7.5pt 7.5pt;height:275.25pt'> <p align=center style='text-align:center'><img border=0 width=200 height=51 id="_x0000_i1026" src="http://img-ak.verticalresponse.com/media/a/e/8/ae887556f4/d48be386bb/20d4801db6/library/TaxThinkAboutIt.jpg" alt=TaxThinkAboutIt.jpg><br> <span style='font-family:"Trebuchet MS","sans-serif"'>Tax Think a division of Taryle and Associates, CPAs, PLLC&nbsp;<br> <strong><span style='font-family:"Trebuchet MS","sans-serif"'>PHONE: 480-948-9510</span></strong><br> </span><span style='font-size:10.0pt;font-family:"Arial","sans-serif"; color:navy'>email: <a href="mailto:info@tacpas.com"><span style='font-family: "Trebuchet MS","sans-serif"'>info@tacpas.com</span></a></span><br> <a href="http://cts.vresp.com/c/?TaxThink/d48be386bb/7bc87d807d/e0548c944b/main_page="><span style='font-size:10.0pt'>Visit the Tax Think Website &gt;&gt;</span></a> </p> </td> </tr> <tr style='mso-yfti-irow:1'> <td width="20%" valign=bottom style='width:20.0%;background:#7C3A00; padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p align=center style='text-align:center'><strong><span style='font-size: 13.5pt;font-family:"Verdana","sans-serif";color:white'>Warren's Events &amp; </span></strong><b><span style='font-size:13.5pt;font-family:"Verdana","sans-serif";color:white'><br> <strong><span style='font-family:"Verdana","sans-serif"'>Deadlines</span></strong></span></b><span style='font-family:"Trebuchet MS","sans-serif"'> </span></p> </td> <td width="60%" valign=bottom style='width:60.0%;background:#7C3A00; padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p align=center style='text-align:center'><b><span style='font-size:24.0pt; font-family:"Verdana","sans-serif";color:white'>A Tax Perfect Storm</span></b><b><span style='font-family:"Verdana","sans-serif";color:white'> </span><span style='color:white'><o:p></o:p></span></b></p> </td> <td width="20%" valign=bottom style='width:20.0%;background:#7C3A00; padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p align=center style='text-align:center'><strong><span style='font-size: 13.5pt;color:white'>&nbsp;</span></strong><strong><span style='font-size: 13.5pt;font-family:"Verdana","sans-serif";color:white'>Thursday Night Calls:</span></strong><strong><span style='font-size:13.5pt;font-family:"Trebuchet MS","sans-serif";color:white'> </span></strong></p> </td> </tr> <tr style='mso-yfti-irow:2'> <td width="30%" valign=top style='width:30.0%;border:solid #E3BF77 1.0pt; mso-border-alt:solid #E3BF77 .75pt;background:#E3BF77;padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p class=MsoNormal align=center style='text-align:center'><span style='font-size:13.5pt'><br> </span>&nbsp;<strong><span style='font-size:13.5pt'>S Corporations, C&nbsp;Corporations with&nbsp;a 12/31 year end&nbsp;and Partnership tax returns are due&nbsp;September 15th</span></strong> <br> There are no further extensions and the late filing penalties can be very high. Please make sure we have all your information as soon as possible.&nbsp; </p> <p class=MsoNormal align=center style='text-align:center'>&nbsp; </p> <p class=MsoNormal align=center style='text-align:center'><br> &nbsp;<br> <strong><span style='font-size:13.5pt'>Personal Tax Returns are due October 15th&nbsp;</span></strong>&nbsp;<br> There are also no further extensions for these either. Please make sure we have your information as soon as possible.&nbsp; </p> <p class=MsoNormal align=center style='text-align:center'>&nbsp; </p> <p class=MsoNormal align=center style='text-align:center'><a href="http://cts.vresp.com/c/?TaxThink/d48be386bb/7bc87d807d/46bf5bc8a8">2009 Tax Origanizers&gt;&gt;</a>&nbsp; </p> <p class=MsoNormal align=center style='text-align:center'><br> <br> <strong>C Corporations with a June 30 year end are due September 15th</strong> <br> These returns can be extended for six months but you must pay any taxes due by the&nbsp;September 15th due date.<br> <br> &nbsp; </p> </td> <td valign=top style='padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'>This e-mail is rather lengthy but in it I describe many of the major tax increases that we are facing in 2011. There are just too many headed our way to keep this e-mail short. If congress makes no further changes on January 1, 2011 the United States will see the largest tax increase in its history. We have been hearing about a small increase here and a phased out deductions there for at least a year. Many of us just listened and never paid much attention to all the talk. After all they are just small increases on things that probably won t even apply to most of us.&nbsp; Unfortunately all of those little drips will culminate in a tax perfect storm in another 170 days. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> You might be thinking that you have nothing to worry about; after all we have been promised that any tax increase will only be for those making over $250,000 and you are not making anything near that amount.&nbsp; This is a promise you cannot count on. Smokers and tanning salon users have already seen this promise broken. The rest of us will discover the broken promise when we file our 2011 tax returns or when you read about the tax increases below. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> Before I go into the tax increases, let s talk briefly about what can be done about them.&nbsp; What is my answer to the approaching tax tsunami? Planning, strategic tax planning is now more important than ever.&nbsp; <br> <br> This year many of us want to focus on accelerating the recognition of income. That is we want to move as much income into 2010 from 2011 as possible. The corollary is also important to reducing our overall tax burden. We want to push as many expenses from 2010 to 2011 as possible. This is exactly what the publicly traded big corporations are doing. This is why corporate profits are up this year and why we expect them to fall next year.&nbsp; Our situations are all very different, so you should take your particular circumstances into account before making any changes. The best advice I can offer is to schedule a tax strategy season with me and my team.&nbsp; </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The tax increases are scheduled to hit us on three fronts with a fourth possible.</span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> <strong><span style='font-family:"Verdana","sans-serif"'>The first front is the expiring Bush tax cuts</span></strong>. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The major impact of the expiring tax cuts is an increased tax rate at every bracket (that includes at least three increases for people making less than $250,000). In addition to the rate increases, itemized deductions and personal exemptions will again be phase out, which has the same effect as increasing the tax rates. The new tax rates (without considering the phase outs) will be:<br> " &nbsp;The 10% bracket increases to an expanded 15%<br> " &nbsp;The 25% bracket increases to 28%<br> " &nbsp;The 28% bracket increases to 31%<br> " &nbsp;The 33% bracket increases to 36%<br> " &nbsp;The 35% bracket increases to 39.6%</span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The  marriage penalty will return from the first dollar of income.&nbsp; The child tax credit will be cut in half from $1000 to $500 per child.&nbsp; The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut. This is all true even if you make less than $250,000. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> There is no estate tax this year.&nbsp; For those dying on or after January 1 2011, there is a 55 percent top estate tax rate on estates over $1 million.&nbsp; A person leaving behind two homes and a retirement account could easily pass along a sizable estate tax bill to their loved ones. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> If you save or invest your money, your taxes are increasing (makes sense why would we want to encourage investment). The capital gains tax will rise from 15 percent this year to 20 percent in 2011.&nbsp; The dividends tax will rise from 15 percent this year to as much as 39.6 percent in 2011.&nbsp; These rates will increase another 3.8 percent in 2013. Again these increases are all slated to happen even if your income is less than $250,000. </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> <strong><span style='font-family:"Verdana","sans-serif"'>The second tax increase front is from the Health Care Reform bill. Several new or increased taxes are scheduled to go into effect on January 1, 2011.&nbsp; They include:</span></strong></span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The so called  Medicine Cabinet Tax &nbsp; You will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).&nbsp; </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The  Special Needs Kids Tax This provision imposes a cap on flexible spending accounts (FSAs) of $2,500 (Currently, there is no federal government limit).&nbsp; This change will especially hit parents of special needs children.&nbsp; Care for these children can easily cost ten times the new federal cap.&nbsp; </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> The HSA Withdrawal Tax Hike. This provision increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent while penalties for IRAs and other tax-advantaged accounts are only 10 percent. With the economic slowdown many families are forced to pull money out of their HSA just to make ends meet. If they do this after December 31, 2010 the penalty will double.&nbsp; </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> My solution to the medicine cabinet tax, the special needs kids tax and the HSA withdrawal tax is a medical expense reimbursement plan. This is just one of the many tools we use in our tax strategies.</span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> Many other tax increases are already on the books because of the healthcare bill but they will not take effect until 2013 (after the elections).</span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> <strong><span style='font-family:"Verdana","sans-serif"'>The third front is a variety of tax increases that includes subjecting&nbsp; seven times as many people to the Alternative Minimum Tax than in 2010 and other damaging changes some of which I will explain below :</span></strong> </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> Small businesses can normally deduct rather than depreciate equipment purchases up to $250,000.&nbsp; This will be cut by 90% down to $25,000. Larger businesses will not even be allowed the $25,000. In addition businesses will be hit with scores of tax hikes.&nbsp; The biggest is the loss of the  research and experimentation tax credit, but there are many, many others.&nbsp; </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> Education will also take some major hits. The deduction for tuition and fees will not be available. Tax credits for education will be severely limited.&nbsp;Teachers will no longer be able to deduct classroom expenses.&nbsp; Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance will be curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.</span> </p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> Charities will not be spared from the tax hit either. One costly change is that under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual  required minimum distribution. &nbsp;This has been a valuable tool for many higher income retirees with charitable organizations being the benefactor. This tool will no longer be available and we can expect charitable contributions to drop.&nbsp; </span></p> <p class=MsoNormal><strong><span style='font-family:"Verdana","sans-serif"'>Finally the possible forth front are tax increases that have not yet been enacted.</span></strong><span style='font-family:"Verdana","sans-serif"'> </span></p> <p class=MsoNormal><span style='font-family:"Verdana","sans-serif"'><br> With all of the tax increases already scheduled to hit could there possibly be more? In November after the elections, the debt commission is going to release its recommendation for reducing the ever growing deficit. Is there any doubt it will include even more tax increases? Several trail balloons have already been floated the largest one being a value added tax.&nbsp; The value added tax is a new hidden tax added to the price of all the goods we buy. </span></p> <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana","sans-serif"'>I am sorry that today s message is not a more positive one but these are things you must know and prepare for. This was not meant to be political because well frankly I am afraid that it is too late for a political solution. We must each structure our own affairs so that we can not only survive in this new high tax environment but thrive in it. And yes for all the doom and gloom that is being reported it is still possible to thrive.</span><span style='font-family:"Verdana","sans-serif"'> </span></p> <p class=MsoNormal>&nbsp; </p> </td> <td width="30%" valign=top style='width:30.0%;border:solid #E3BF77 1.0pt; mso-border-alt:solid #E3BF77 .75pt;background:#E3BF77;padding:7.5pt 7.5pt 7.5pt 7.5pt'> <p align=center style='text-align:center'><strong><span style='font-family: "Verdana","sans-serif"'>Don't forget, as a subscriber to TaxThink About It! you may attend our Thursday night calls</span></strong><span style='font-family:"Verdana","sans-serif"'>.<br> </span><span style='font-family:"Trebuchet MS","sans-serif"'><br> </span><span style='font-family:"Verdana","sans-serif"'>Call is every Thursday (except holidays) 3:00 pacific time </span><span style='font-size: 10.0pt;font-family:"Trebuchet MS","sans-serif"'><o:p></o:p></span><span style='font-family:"Verdana","sans-serif"'><br> <br> <br> Today's subject was kind of heavy&nbsp;so how about a video on the lighter side?<br> <strong><span style='font-family:"Verdana","sans-serif"'>WANT A SMOKING HOT REAL ESTATE DEAL</span></strong><b><br> </b><a href="http://cts.vresp.com/c/?TaxThink/d48be386bb/7bc87d807d/5451c9716b/v=Mm7-dgZKeTU"><strong><span style='font-family:"Verdana","sans-serif"'>watch the video&gt;&gt;</span></strong> </a></span><span style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif"'> <o:p></o:p> </span></p> <p align=center style='text-align:center'><span style='font-family:"Trebuchet MS","sans-serif"'><br> </span><span style='font-family:"Verdana","sans-serif";color:#B35408'><a href="http://cts.vresp.com/c/?TaxThink/d48be386bb/7bc87d807d/c9cef3996a/v=cYkTemApxms">Get your free subscription to Bob Proctor's Insight of the Day&gt;&gt;</a></span><span style='font-size:18.0pt;font-family:"Trebuchet MS","sans-serif"'>&nbsp; </span><span style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif"'><o:p></o:p></span></p> <p align=center style='text-align:center'><span style='font-size:10.0pt; font-family:"Verdana","sans-serif"'><br> </span><span style='font-family:"Verdana","sans-serif"'><br> </span><b><span style='font-size:13.5pt;font-family:"Verdana","sans-serif"'><br> <br> <strong><span style='font-family:"Verdana","sans-serif"'>This Week's Quote</span></strong></span></b><span style='font-size:18.0pt;font-family:"Trebuchet MS","sans-serif"'> </span><span style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif"'><o:p></o:p></span></p> <p align=center style='text-align:center'><span style='font-family:"Verdana","sans-serif"'>Unquestionably, there is progress. The average American now pays out twice as much in taxes as he formerly got in wages. <br> H. L. 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