New Tax Break for IRA Owners
An IRA owner who is 70½ or over can directly transfer, tax-free, up to $100,000 per year to an eligible charitable organization in 2007.Eligible owners can take advantage of this regardless of whether they itemize their deductions. SIMPLE IRAs and SEP IRAs are not eligible.To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity.These amounts are neither taxable, nor deductible on the taxpayer’s return. Some charities are not eligible for such a donation.Consult us in regards to your specific situation before making a decision.
Small Businesses get a Break
The Senate Finance Committee approved an amendment to the Fair Minimum Wage Act of 2007 that creates tax breaks for small businesses intending to offset the minimum wage increase.These breaks include:
- One-year extension of increased small business expensing under Section 179;
- Extension and expansion of the 15 – yeasr depreciation of leasehold improvements in include business owners that own their own stores;
- Increased the threshold to $10 million for the use of the cash basis of accounting.
For more information, visit www.senate.gov/finance/sitepages/bacus.htm.We can help implement such laws as they pertain to your specific business.
Benchmarking: A way of life
Whether you are a business person, an artist, or a baseball player, benchmarking plays an important role in your decisions.Take for example, Derick Jeter.He makes $21.6 million a year playing for the NY Yankees.However, as great as he is, when compared to other Yankees, he is third behind Alex Rodriguez and Jason Giambi.Do you think this information is important to his agent when he renews his contract?
Like baseball players, and artists, businesses should compare their performances to other companies in their industry.If a business’s sales are up 15%, the CEO may start popping the bubbly.However, when it is compared to the rest of the industry, which is up 25%, the CEO will find it hard to re-cork the enthusiasm.
But comparing metrics is not as easy as it sounds. There are some caveats you must follow if you are comparing your company to others;
- When looking at industry data, what is their sample size?
- How often is the industry data updated?
- Where is it derived from?
These questions are very pertinent, allowing you to compare your company to realistic data.But another issue is how, and how often to monitor your company. With the sophistication of dashboard and accounting software, the measurements can be made as often as needed.Using “stoplights” and “alerts” to gauge your business is excellent if you do the due diligence to analyze what they mean.Using our example, if the company compares their sales to last year, the 15% increase would show up as “green” on fancy dashboard software.However, when compared to an external measure of 25%, it would show up as “red” prompting management to implement changes.
You must be aware that information without adequate software is not timely and many times not accurate.On the other hand, software without the information is just a waste of money.We can help management bridge that gap.