Ø      June 16^th is the due date for your second installment for estimated taxes!

Ø      Estate taxes continue to be a political football.  In 2009, the estate tax exemption goes from $2 million to $3.5 million.  In 2010, the estate tax is eliminated.  But in 2011, the estate tax exemption reverts back to $1 million with a 55% top tax rate!  Will this be resolved?  Yes, but to what extent, no one knows.  We continue to advise those wanting to reduce their estate tax liability to make the maximum $12,000 gifts.  If you have questions, please call.

Ø      The capital gain tax rate for taxpayers in the 10% and 15% bracket will go from 5% to 0% for this year, and will be in effect until 2010.  This rate can offer you some tax planning opportunities this fall.  We can cover this when we meet!

Ø      Quote of the Month:  “When you have three boys in the backyard, you have a ball game.  When you have three girls, you have a fight!”

                          -Cathy Reed (1930-2008)

Ø       Runner-Up Quote of the Month:  “I always keep a supply of liquor handy in case I see a snake -- which I also keep handy.

                                             -W. C. Fields 

Ø      When Roland Scott was confronted by a robber in Baltimore, Md., he didn't stand for it.  Even though the robber was pointing a sawed-off shotgun at him, Scott grabbed the man's gun and got it away from him, and turned the tables. The robber, now looking down the business end of his own gun, was ordered to strip, and to hand over his money. The robber took off his clothes, and handed over $800.  That apparently didn't satisfy Scott, he started beating the man. "He is beating him with the butt of a sawed-off shotgun," said Detective Sgt. Dennis Rafferty, Jr. While Scott was beating the man, the shotgun discharged, shooting Scott in the stomach. He was killed; a witness corroborated the robber's story, and investigators are ruling Scott's death accidental. "You can't make this up. You just can't," Rafferty said. "It is sort of like one for the books." (Baltimore Sun)

Ø      We certainly don’t want to diminish the problems being reported in the housing industry, but we have to make this observation.  A report by the Mortgage Bankers Association found that the rate of foreclosures on home mortgages “soared to 0.99%.”  That means less than 1% of mortgages are in foreclosure.  Although these numbers are at historical highs, less than 1% doesn’t sound as grave as you might be led to think.

Ø      The Kiplinger Tax Letter reports that builders may start to receive more attention from auditors.  If you use the completed-contract method of accounting, be careful!  Apparently, they are looking for inappropriate income deferrals.

Money Corner:

Ø      Clients often ask us about saving for college and how to go about saving.  According to the College Board’s 2007 Trends in College Pricing Report, the average cost of a four-year public college for the 2007/2008 school year was $17,336.  For a four-year private school, the cost was $35,374.  There does not seem to be an end to the escalation in costs for the near term.  What should you do as a parent?  To give you an idea of how much you can accumulate, if you saved $100 per month and earned an 8% annual return, you will have accumulated $34,604 in 15 years.  If your goal is to pay all of your child’s educational expenses, you will need to start early and be consistent.  We continue to highly recommend the Indiana College Choice Savings 529 plan if you are an Indiana resident because of the Indiana income tax credits associated with this program.  If you have questions, please call.

Gettings Reed Corner:

Ø      By far, the most often asked question we get is, do I have enough money to retire?  The answer to this question is never as simple as it may seem because we are usually dealing with many unknown variables.  Regardless of your age, this question should be pondered regularly.  We don’t mean to be obsessed by it, but to merely be mindful of it, and plan for it.  Factors that need to be considered are insurance, income taxes, estate taxes, cash flow, and quality of life issues.  For a complimentary confidential meeting to discuss your personal situation, call our office.

Ø      Annuities have seemed to be in the news a great deal lately.  Annuities are a great tool if used correctly.  Much of what is heard and read regards instances where the investment representative oversells annuities for objectives that are not appropriate.  If you have any questions about these types of investments, please call us.