Don't miss valuable deductions
  As year end approaches, take time for tax planning.  In your planning, consider moves that make economic, as well as tax sense.

  If you're self-employed, consider setting up a 401(k) or Keogh retirement plan.  You must set up a 2002 plan by December 31, even though you can make 2002 company contributions up until the due take of your tax return.
 
  You can make annual tax-free gifts, up to $11,000 each, to as many family members (or others) as you desire.

  Squeeze in last-minute deductions by making charitable contributions, paying state or local taxes, or by making January's mortgage payment by year-end.

  Consider selling underperforming investments or those that no longer fit your financial goals.  You can offset losses against capital gains, plus $3,000 or other income.

  Be tax-wise if you borrow money.  Consider restructuring or refinancing existing debt to take advantage of low interest rates and tax breaks.

   Each year hundreds of thousands of tax payers overpay their taxes because they claim the standard deduction when itemizing would be more beneficial.  They cause may be poor record keeping or simply overlooking valuable itemized deductions.  A basic review of itemized deductions may prevent this from happening to you.

    Taxes.  State and local income taxes, real estate taxes, and personal property taxes are deductible to qualify, the taxes paid must be your responsibility.

    Medical Expenses.  You can deduct un-reimbursed medical expenses for you, your spouse and your dependents to the extent they exceed 7.5% of your adjusted gross income.  This includes amounts paid for doctors and dentists, hospital care, prescriptions, nursing services, and medical aids.
  You can deduct health insurance premiums, long-term care insurance premiums (within limits), and transportation and lodging costs related to receiving medical care.
  You can even deduct the cost of weight-loss programs (except diet food) provided you're under a doctor's orders to lose weight for health reasons. 

  Interest.  Interest paid on your main home and one other home is tax deductible.  This includes interest on your first and second mortgages up to $1 million and on home-equity loans (where available) up to $100,000.  To qualify, the home must be security for the debt, and you must be legally liable for the loan.
  Points paid to obtain a mortgage are deductible, and points paid for refinancing are generally deductible over the loan's term.
  Interest paid on money used for investment is deductible within certain limits.

  Contributions.  Donations to qualified organizations are deductible to the extent you don't receive anything in return.  Deductible contributions can be made to churches, schools, libraries, and qualified charities.
  Donations can be made by cash, check, or credit card.  You can also deduct the faire market value of noncash donations, such as clothing and household items, vehicles, stocks and bonds, and real estate.  There are specific records required based on the size and type of your donation.

  Casualty or theft losses.  Losses from a theft, fire, or natural disaster are deductible within limits.

  Miscellaneous deductions.  Other deductible expenses include unreimbursed job expense, investment expenses, gambling losses, and fees for tax planning and preparation.  Most miscellaneous expenses are only deductible up to the extent they exceed 2% of your adjusted gross income.

  An awareness of the deductions that may apply to you and good record keeping are important.  Call us for planning assistance.Please call.

 
What's new in taxes...
Take a fresh look at health reimbursement plans
  Thanks to new guidance from the IRS, health reimbursement arrangements or HRAs may be more popular.
  With an HRA, an employer agrees to reimburse an employee's uninsured medical expenses up to a predetermined annual limit.  Reimbursed amounts are tax-deductible by the employer and tax-free to the employee.
  Employees can't contribute to an HRA, but they can control how the allotted benefit is used.  If permitted by the plan, the IRS allows employees to carry over any unused portion of the annual limit to increase the maximum dollar amount available the

following year.
  For more information about these plans, please contact our office.

Social security taxes and benefits change next year. 
  The Social Security Administration has announced that both social security taxes and benefits will go up in 2003.  
  Effective January 1, 2003, the amount of wages and self-employment earnings subject to social security taxes will increase from $84,900 to $87,000.  All earnings remain subject to Medicare taxes.
  Also starting in January, there will be a 1.4% inflation adjustment to social security benefits.

Improve your Workplace Security
  Most business owners and manager are aware of external security risks, but there are also internal risks that you can't afford to ignore.  Lacking the resources of large corporations have to hire their own security firms, what can you do to improve security in your workplace?  Here are some suggestions.

  Hiring and training employees Perform pre-employment background checks with an eye for criminal history, workplace violence, or malicious mischief.  Enlist the help of you local police department or other community organizations to help train employees how to react in dangerous situations.

  Establishing internal controls  The lack of internal controls is the number one case of fraud against businesses.  Establishing simple internal controls, such as cross-training employees and limiting the duties assigned to any one employee, can do wonders to reduce the chances of employee 

 fraud and mischief.  
  An added benefit:  Many small business owners have found that establishing and maintaining adequate controls improved the effectiveness and efficiency of operations.

  Protecting information Take advantage of security features built into computers and network operating systems.  Configure your system to give only authorized employees access to files.  Perform regular computer backups and store them securely off the premises.
  Inexpensive firewall software can block unauthorized access to your computer system and protect it from viruses.  Keep the most current update of this software install on your computers.
  While there's no such thing as absolute security, implementing these simple suggestions may discourage would-be troublemakers and make it easier to detect them.  For assistance call us. 

Interesting money facts...

  Counterfeiters print and estimated $250,000 worth of fake U.S. money daily.  

  Every day, U.S. mints make 37 million pennies, 4.6 million nickels, 6.6 million dimes, 5.8 million quarters, and 14,4000 half-dollars.

  More money is printed daily for Monopoly than by the U.S. Treasury.

  The first U.S. coin with the words, "United States of America" was a 1787 penny.  It also had this unique motto inscribed: "Mind Your Own Business."

  One million $1 bills weigh 2,040 pounds.

  No living person can be pictured on U.S. currency.

  The lowest denomination of currency ever printed was three cents.

  The $100 bill is the highest denomination of U.S. currency in circulation today.  The highest denomination notes ever printed were the $100,000 gold certificates issued in 1934.

All material presented in this newsletter is for general information only and should not be acted upon without further details and/or professional assistance.