Ladolcetta CPA, P.A.

Pembroke Pines, Florida.  Phone 954-436-8733 Ask for Don or Patty

Email us at don@ladcpa.com

 

 

Volume 4 November 1998

Thanks to our friends and clients, our little office continued to experience 

phenomenal growth this year. For the third tax year in a row our revenue base

 (in terms of total receipts) nearly doubled. If we continue this pace in 1999 the 

family may finally return to income levels it hasn’t seen since Don left the 

Banking industry. An analysis of our new clients reveals that the #1 source of 

new business came via referrals from our friends and existing clients. 

THANK YOU!I While we must be doing something right, we couldn’t do it 

without you. We are still a small office and can only be secure if we continue 

to grow like the past 3 years. So, we are asking you to help us again. 

Please tell your friends and relatives about our good service. Tell them we do:

I. Income taxes-Personal and Business

2. Payroll taxes-State and Federal

3. Incorporation Service-New Business Start Up

4. Accounting-Bookkeeping 

 5. Financial Consulting

Banner Year For Firm
Early Filing requirements.
Seasons Greetings
Highlights of the ~Taxpayer Relief Act of 1977

Thought for the Day

Because of our growth we expect a real busy year here during tax season. If you want your work to be filed timely, you need to get your materials out to us as soon as possible. Remember, if you are a corporation or business you may need to issue 1099s or W2s by January 31 as well as file any quarterly payroll work. You also need to get your partnership/corporate returns completed by March 16. Have mercy on us and get your materials in to us early. If we receive these items late, we may need to put you on extension.

1.  The Child Tax Credit. In 1998, the IRS now gives a $400 direct credit per child for children under 17. The credit begins to be phased out when joint income exceeds $110,000. Families with 3 or more children may receive a credit in excess of tax liability. 

2. The Hope Scholarship Credit. For 1998 taxpayers can now claim a tax credit up to $1500 for any family college expenses in 1998.

3. The Lifetime Learning Credit. As an alternative to the Hope Scholarship Credit, the taxpayer may instead elect to claim an education credit up to $5,000 for an amount equal to 20 percent of expenses incurred. This can be for degree or non- degree seeking activities and can be used to acquire or improve job skills.

4. Limitations to the education credits. The taxpayer may elect to chose either but not both of the credits for each qualifying child. The credits begin to get phased out with joint incomes exceeding $8OM/year and the credits may not be taken if the taxpayer elects to exclude income from certain distributions from an education IRA.

5. Education Individual Retirement Account. An education IRA is now available. Contributions must be made beginning 1/1/98. Contributions to the account are not deductible. Earnings made in the account will not be taxable until distributed. Annual contributions are limited to $500 per beneficiary under age 18. Contribution limits are phased out for higher income taxpayers. Distributions from the account including previously untaxed earnings are not taxable as long as they do not exceed education costs. Distributions in excess of education costs receive a 10% penalty as well as induce a portion of the excluded taxable earnings to become taxable.

6. Education loan interest deduction. $1,000 of education loan interest expense in 1998 for the interest on the first 60 months of a loan’s life can be deducted from income. The amount is increased in subsequent years and is phased out for higher income taxpayers.

7. Individual Retirement Account Changes. Participants in pension plans will be able to make fully deductible contributions to IRA’s. Deductions for higher income taxpayers will be limited. The 1998 income phaseout amount has been increased to $30M-$40M for singles and $50M to $60M for joint filers. The amounts will increase significantly each year through 2007. Also in 1998 spouses will be unlinked. Thus when one spouse is covered under a pension plan and the 2nd spouse is not, the second spouse will be able to make contributions to an IRA unless there is a significantly large joint income. Penalty free withdrawals will be allowed for first time home buyers and payers of higher education expenses

8. The Roth IRA. A new type of IRA for 1998 allows taxpayers to invest $2,000/year with a phaseout for higher income taxpayers. The contributions will not be deductible the earnings will not be taxable, and qualified distributions from the account will not be taxable. Distributions may take place after taxpayers reach age 59 & %, and must be invested for 5 years first. Contributions can be made regardless of age.

9. Capital Gains. Maximum tax rate for individuals on capital gain from long term sales will be 20%. The rate is 18% for 5-year property.

10. Principal Residence Sale. Married couples can exclude $500M of gain on sale of a residence after May 6,1997. People will get an exclusion each time they sell a principal residence. The taxpayer must have lived in the residence for 2 of the last 5 years.

11. Estate Taxes. The amount of exemption from estate taxes will begin to increase to eventually reach $1,OOOM.

12. Home Office Deduction. Some of the rules regarding a home office will be relaxed

 

Wake up today and pretend like it is the first day of your life, which would thus be filled with wonder and newness. Go thru this day as if it were the last day of your life and thus treasure every moment that remains. Today is the tomorrow you worried about yesterday and as you can see your worries were unfounded. Today is also the yesterday you’ll reminisce over tomorrow.