Jones and Kolb Chronicles

Work on Being Happy

2010-07-16T11:39:00.000-04:00

“Happiness is not a station you arrive at, but a manner of traveling.” ~~ Margaret Lee Runbeck

Now that things have slowed down a bit, I have re-discovered an old hobby – people watching. Everywhere I go, whether running errands, shopping, or dining, I find myself watching people. I am dazed and amazed at how many people project an unhappy persona. Age, creed, or national origin does not appear to matter; many people just do not appear to be happy. There are times when it is understandable. Health, personal, financial, business, or family problems can cause people to be down on themselves, life, or everyone around them. At the same time, there are individuals in worse conditions than most of us. Maybe, just maybe we can help. The wonderful thing is that you may be able to help and it may not cost you a cent. As a matter of fact you will profit. It may be as simple as a kind word, a smile, holding a door for someone. You never know.

The next time you are interacting with strangers, concentrate on presenting a positive mood. Smile, let someone go first. Once a month pay for the person behind you at the toll booth on Georgia 400 (OK, so it costs you 50 cents). Practice random acts of kindness and you will be surprised on how it makes you feel. It may be a combination of happy and just the good feeling of being alive. It may also be the first time anyone has been nice to that person in days, weeks, or longer. Happiness can be contagious.

“Happiness is inward and not outward and so it does not depend on what we have, but on what we are.” ~~ Henry Van Dyke

This is a powerful quote. You are whatever you think you are. If you think that you are happy and act as though you are happy, you will be happy. Try this experiment. The next time you are talking on the phone with someone (unless it's a serious discussion or an emergency) smile while you are talking. You will immediately notice that your tone of voice will convey a happy, positive disposition. It is very difficult to display a negative tone while smiling. Usually I can tell that it has a positive impact on the person on the other end. Think about Christopher Robin's friend Eeyore. He is always matter of fact, monotone, and depressed in his speech pattern. Even when Eeyore is in a good mood he sounds depressed, dejected and like he really wants to be left alone. “Happiness will never come to those who fail to appreciate what they already have.” ~~ Author unknown.

“The supreme happiness in life is the conviction that we are loved, or rather, loved in spite of ourselves.” ~~ Victor Hugo

Sometimes you have to make a concerted effort to be happy and positive. It may not come naturally, but I can say that a positive, happy approach to life is without a doubt more enjoyable and sweeter than any of the alternatives.

“Everything can be taken from a man but the last of human freedoms, the right to choose one's attitude in any given set of circumstances--the right to choose one's own way.” ~~ Dr. Viktor E Frankl

There is a phenomenal video making the rounds about overcoming problems. It is on golf, but it is worth the time to watch it. http://www.thegolfchannel.com/golf-videos/meet-butch-lumpkin-9477/?ref=26000.

~~ Colin, Shareholder

One more quote (and one of my favorites):

"Love me when I least deserve it, because that’s when I really need it." ~~ Swedish Proverb

Georgia Student Scholarship Tax Credit Program

2010-06-08T09:27:00.000-04:00

As I finished estimating our tax return recently, I hollered into the living room and told my wife that we are getting a little money back from the federal government and we owe a little more to the state. She asked/yelled, “How can we owe more money? We have been paying all year long!” It left me wondering how we could have somehow mitigated our tax liability during the year. Then I remembered that during audit fieldwork in 2009, some of our private school clients told me about a scholarship program they have been promoting which gives taxpayers a unique tax advantage while helping students at the same time.

This program is the Georgia Student Scholarship Tax Credit Program. A couple of years ago, a Georgia law was passed which permitted taxpayers, both individuals and corporations, to receive state tax credits for amounts contributed to certain scholarship organizations. The scholarships are for qualifying students currently in public education who wish to attend private school. As this program continues to grow, this tax incentive should help private schools with enrollment figures and also help with the overcrowding of the public school systems.

This is a refundable state tax credit and is limited to the amount contributed or $1,000 for a single taxpayer and $2,500 for married taxpayers who file jointly. After crunching all of the numbers for all of the different tax situations taxpayers could be in, it was determined that taxpayers who itemize will receive a 94% tax benefit from making the contribution. If you are in an alternative minimum tax situation, you could receive a tax benefit of 129% for making the contribution.

Corporations wishing to utilize the credit are limited to the amount contributed or 75% of the state tax liability. This would result in a tax benefit for the corporation ranging from 96%-99%.

So when you are wondering if there is a way to help minimize your tax liability, remember this program. To read more information about the Georgia Student Scholarship Tax Credit Program, please visit the website at http://public.doe.k12.ga.us/pea_policy.aspx?PageReq=PEAHB1133. As always, do not hesitate to contact us here at Jones and Kolb if you have any questions.

~~ Brian, Supervisor

Retirement: What a Novel Idea!

2010-03-19T13:40:00.000-04:00

Until recently, I never gave much thought to retirement. That was something for old people, right? My father, who lived until the ripe old age of 85 and worked until a few months before his passing, didn’t want to have anything to do with retirement. Maybe it had something to do with being part of the “Greatest Generation” and having lived through the Great Depression. But that was his choice, not mine.

Although I know financial considerations are forcing millions of Baby Boomers to remain part of the workforce, I’ve decided to retire at the still young age of 59. As empty nesters, my wife and I may move to the coast. The good life. No worries. Well, as I’ve discovered, don’t grab the fishing gear and sunscreen so fast.

The path to easy street is filled with some tough decisions. Some of them are downright frightening. Starting with healthcare. If you’re like me and you’ve always been covered under an employers’ group policy, prepare to be shocked. Searching for individual coverage in the present insurance environment is, to say the least, an eye-opening experience. After wrestling with the healthcare issue for a few days, I called our firm’s insurance broker for help. She’s now helping me consider the options and shop for the best deal.

So that’s my first piece of advice: Consult a professional. Looking through the Yellow Pages (my age is showing) and searching the Internet may not be the best way to go unless you want to sort through about 43,900,000 (yes, I really Googled it) Web sites and bits of information.

If you’re currently covered under a company group plan, start there, and ask for advice from the company’s healthcare administrator or the broker who helped your employer shop for the group plan. That’s how I discovered that if I form a corporation or limited liability company owned by my wife and me, we might be considered a small group and qualify for coverage through the corporation. This may work for us since we plan on providing accounting services on a contract basis after retirement; we’ll simply use the new company for that activity. As I understand it, even a small group plan may be more affordable than an individual policy. Also, apparently the insurance industry isn’t overly eager to issue individual coverage, no matter how healthy the individuals. A small group seems more attractive in their eyes.

Then there’s the Medicare question. (There is another one of those words I didn’t think applied to me.) Even though I won’t be eligible for Medicare for another six years, I’m trying to learn more about how it works and the steps I should be taking now to plan for Uncle Sam becoming my group plan. When my father-in-law was sick in the 1990s, I remember that his supplemental private insurance was a reassuring way to fill the gap. Great planning on his part and another lesson learned from “The Greatest Generation.”

If you find yourself thinking about retirement – and let me tell you, the anticipation is great – I encourage you to give some thought to the health insurance coverage issues. A little planning on the front end may help you rest a lot easier about your decision. I mean, who wants to be worrying about health insurance when there are fish to be caught?

~Doug, Shareholder

Eat A Live Frog Everyday And Be Better For It?

2010-03-05T14:37:00.000-05:00

Here at Jones and Kolb, we are moving into "high gear of busy season." It reminds me of the hours people have to invest to be successful in their jobs and careers. Some words to consider:

"Working hard overcomes a whole lot of other obstacles:
• you can have unbelievable intelligence,
• you can have connections,
• you can have opportunities fall out of the sky-
But in the end, hard work is the true, enduring characteristic of successful people." Author: Marsha Evans

I am providing a two-for (2 quotes for the price of 1) today.

"Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome." Author: Booker T. Washington

The trick is to not only work hard but work in an efficient and productive manner. The biggest problem I have this time of year is procrastination. There are tasks I do not really want to do albeit I know they need to be done. How do you accomplish your goals? In Mac Anderson's book, The Nature of Success, he presents an interesting approach. He talks about an old saying that goes: "If the first thing you do when you get up in the morning is eat a live frog, then nothing worse can happen to you the rest of the day."

Brian Tracy, in his book Eat That Frog, says that your "frog" should be the toughest task of the day, the one you're most likely to procrastinate on. Eating that frog or completing that task, can give you energy and confidence that will provide momentum for the rest of the day. If you keep procrastinating it will sit on the plate and continue to grow.

That is an excellent illustration. I have spent several hours the last couple of days eating frogs. I must admit it is hard to get in the habit of "eating frogs," but I have found it to be very effective. This time of year there are multiple frogs, but I can usually identify the biggest frog without much trouble. If you focus on the task at hand and devote your energy on your most challenging tasks you will be amazed at how satisfying your work can be and much you can accomplish in a day.

Here's to eating your biggest frog. Bon appétit!

~ Colin, Shareholder

Are You Considering Starting a New Business?

2010-02-18T11:00:00.000-05:00

My brother, Craig, is starting a new business and since I am a small business consultant and his sister (i.e., free), he has asked for my help. He asked a lot of good questions and didn't ask some that are also key to getting started on the right track. Following are some of the important things for Craig to consider:

• What is the best structure for his new business? Is he going to be a sole proprietor or have business partners? There are a number of possibilities including forming a C corporation, an S corporation, a limited liability company or a limited partnership. These are decisions he should discuss with an attorney or CPA to make sure he understands the implications, both from a legal and a tax perspective.

• After coming up with a great idea for a business and mustering the nerve to make the jump, one of the first things Craig will need is an accounting software program to maintain the financial records of the business. He is planning to have inventory so, although an off-the-shelf program should be sufficient, choosing the right one is important. This is one example where a small business consultant can be really helpful. A consultant can help him with the selection and setup of the software as well as providing on-going software support after he is up and running.

• Craig plans to hire people to work with him in his new venture. They may be classified as employees or as independent contractors, which basically will depend on how much control Craig has over their work performance. If they are classified as employees, there are numerous forms that have to be filed with the IRS and the Georgia Department of Labor. A consultant can help him apply for the proper identification numbers and educate him on the implications of paying payroll and withholding payroll taxes. The penalties for not doing these things correctly can be substantial.

• The other registrations and requirements that new businesses often overlook include applying for a business license, registering with the Secretary of State's office and filing annual business personal property tax returns.

As you can see, the business side of starting a business can be complicated. I hope that each person reading this who is considering such a venture will seek the same professional advice that my brother is lucky enough to get from his sister.

~ Pam, Small Business Department

Parenthood: More than a tax deduction

2010-02-05T08:38:00.000-05:00

I can't believe it has almost been a year since my son was born. As my husband worked on the third and fourth coats of navy blue paint, I was preparing for my son's birth by reading every book, magazine and website I could find. Little did we know that there was nothing we could do to fully prepare for this past year and all the joys of parenthood. Now that my son is rolling and giggling all over the house and I am preparing our individual tax returns, I realize all of the ways he has not only impacted our lives but also our tax situation.

In addition to claiming a child as a dependent, there are the child tax and the dependent care credits to consider. The child tax credit for 2009 and 2010 is $1,000 with the AGI phaseout beginning at $75,000 for singles and $110,000 for married couples. The dependent care credit allows you to claim a percentage of qualifying expenses up to $3,000 (one child) or $6,000 (more than one).

Once I returned to work, I enrolled in a flexible spending account. This account allows me to pay up to $5,000 of daycare expenses with pre-tax dollars. Taking advantage of my company sponsored flexible spending account allowed me to save more taxes than the dependent care credit.

Even though college is many years away, we opened a Georgia 529 account. All Georgia taxpayers can deduct up to $2,000 in contributions to their Path2College 529 plan account on their Georgia income tax return, per beneficiary. Any earnings from these accounts are free from federal and Georgia income tax when used for qualified education expenses.

Also, since becoming new parents, we decided to purchase a new vehicle to help protect our precious cargo. Buyers of new vehicles (not used) purchased after February 16, 2009 and before 2010 can potentially deduct the sales tax paid on the vehicle.

As you are preparing for a new child, don't forget to consider how he or she will impact your tax situation.

~Julie, Manager

COBRA Subsidy Extension Update

2010-01-28T14:39:00.010-05:00

The Internal Revenue Service announced (IR-2010-9) that The American Recovery and Reinvestment Act of 2009 (ARRA) was amended to extend eligibility for the COBRA premium subsidy. This amendment extends the length of the COBRA subsidy period from nine months to 15 months for individuals who are eligible for COBRA continuation coverage related to an involuntary termination occurring between September 1, 2008 and February 28, 2010.

For eligible individuals whose nine months of COBRA subsidy payments has ended, the new law provides an extended period for them to make retroactive payments for their 35% share of COBRA premiums.

Employers must provide COBRA coverage to individuals who are eligible for the subsidy and who pay 35% of the COBRA premium. Employers are reimbursed for the other 65% by claiming a credit for the subsidy on their payroll tax returns. Employers must maintain supporting documentation for the claimed credit.

Group health plan administrators and others responsible for administering a federal COBRA subsidy program must notify assistance-eligible individuals by February 17 to inform them that the plan has been extended and expanded. The U.S. Department of Labor issued updated model notices reflecting these extensions.

If you have questions, please contact us at 404-262-7920 or via our website at http://www.joneskolb.com/.

Haiti and Charitable Donations

2010-01-25T10:27:00.016-05:00

We at Jones and Kolb join others in concern for the victims of the recent Haiti earthquake. Many individuals, businesses and charitable organizations wish to provide assistance to the victims. To help you find information about how to provide assistance through a charitable organization, consult Disaster Relief Resources for Charities and Donors on IRS.gov.

Contributions to domestic tax-exempt, charitable organizations that provide assistance to individuals in foreign lands qualify as tax-deductible contributions for federal income tax purposes, provided that the U.S. organization has control and discretion over the use of funds. Donors should ensure that they make contributions to qualified charities. Use the Search for Charities function on IRS.gov to see if the charity you intend to support is a qualified charity listed in Pub. 78. Certain organizations, such as churches or governmental organizations, may be qualified to accept charitable contributions even though they are not listed in Pub. 78.

On January 22, President Obama signed a bill (H.R. 4462) allowing taxpayers to deduct charitable cash contributions on their 2009 tax returns. These contributions must be made before March 1, 2010 to be eligible. The IRS has also issued Notice 2010-6 designating the Haiti earthquake as a qualified disaster for federal tax purposes.