What documentation do you need, in order to deduct the business use of
- cell phones and similar telecommunications equipment?
- passenger automobiles and trucks?
- home computers and peripherals?
- cameras?
- audio-visual recorders and players?
- other property of a type generally used for entertainment, recreation or amusement?

The above are examples of "Listed Property," which means that the IRS finds them susceptible to non-deductible personal use. The business use of Listed Property is subject to stringent documentation requirements in order to be deductible. The personal use is not deductible.

The required documentation is 1) the amount of the expense, 2) the time and place of the use of the listed property, and 3) the business purposes of the use. In addition, the total non-business use must be identifiable, even if each personal use is not documented.

For cell phones, itemized call lists from the service provider, while not conclusive, are the beginning of the required documentation. These need to be expanded with notations that document the purpose of each business call.

Most of us are familiar with logging requirements for passenger autos and trucks and the mileage books that help document business use. A similar log for the business use of a camera or a/v equipment will meet the strict requirements.

Obviously, this process is burdensome. Nevertheless, Listed Property has been singled out by the IRS as needing special documentation to substantiate and defend a tax deduction for business use.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, but implementation at any time starts saving you money, so act now!

States scraping for additional tax revenue from non-filers

As an example, effective Jan. 1, 2010, Indiana will allow for a penalty of $10 per day (to a maximum of $500) to be assessed on taxpayers that fail to file an annual individual income-tax return — even if they do not owe tax or are due a refund. Indiana has required taxpayers to file an individual income tax return under these circumstances for decades. However, the possibility of a penalty being assessed is new.

The State says the penalty will not be automatically assessed on taxpayers who have acted on their own to file voluntarily after the annual filing deadline. However, if the Department identifies a non-filer through its own cross-checks and other discovery methods, a penalty will be assessed.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!

Pick your poison - paying your taxes with credit or debit cards

If a taxpayer is paying tax liabilities with a credit card, he probably has not strategically planned for reducing his taxes. Sometimes, however, this method of payment may be the only way to pay the taxes. The companies that process the payment charge the taxpayer a convenience fee of 2.49% of the tax payment for credit card payments. That's a $25 fee on a $1,000 tax bill.

The same service providers process debit card payments of tax liabilities, but for those they charge only a flat fee of $3.95, regardless of the amount of the tax payment.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!

Nov. 30 is the deadline to reverse, replace or reinvest any unwanted 2009 Required Minimum Distributions (payouts) from retirement plans.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!

Is your tax planning impacted by how many public employees and retirees are on the state dole?

Who pays the benefits for public employees and Medicaid benefits in your state? These authors (http://www.forbes.com/2009/11/11/taxes-employment-government-business-beltway-tax-burdens.html) argue that private sector employment pays and the ratio of private employment to public employees and beneficiaries is an indicator of your state's financial health and future prospects. New Mexico and Mississippi have almost a 1:1 ratio. Increases in benefit enrollment and government pensions coupled with decreases in private employment would further impact state budgets and ability to pay contractural obligations. Tax strategies should consider this indicator among other inputs; for example, are some states' tax-free municipal bonds going to be adversely impacted by these conditions in poor economic times?


The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!

The worst states for taxes

The Tax Foundation in Washington, D.C., has released its annual State Business Tax Climate Index. Based upon 112 variables in five component indexes, the best rankings reward those states that more completely and consistently apply the following principles:

•Good state tax systems levy low, flat rates on the broadest bases possible, and
•they treat all taxpayers the same. Variation in the tax treatment of different industries favors one economic activity or decision over another.
•The more riddled a tax system is with politically-motivated preferences the less likely it is that business decisions will be made in response to market forces.

The ten worst states (from least worst to ultimate worst) are: Vermont (#41),
Wisconsin, Minnesota, Rhode Island, Maryland, Iowa, Ohio, California, New York, and New Jersey (#50).

Anyone in any state would benefit from pro-active tax planning, but if you live in these states, you stand to benefit the most from tax strategies that minimize the amount of tax that you legally owe. If you live in those states, you stand to lose the most as you continue to postpone active strategies that could reduce your overall tax burden.

Tea party protests don’t reduce your taxes – pro-active tax strategies do!

The full study can be found on the Tax Foundation website: www.taxfoundation.org/files/bp59.pdf.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!

Bloomberg News Service reports that the Internal Revenue Service will audit 6,000 U.S. companies to determine whether they pay all their required employment taxes.
The IRS said the audits will show how often companies (a) misclassify workers as contractors in order to reduce tax obligations, (b) fail to pay taxes on fringe benefits such as personal use of company cars, and (c) improperly pay taxes for company executives.

The IRS is especially suspicious of Sole Proprietorships. Expect the bulk of the audits to hit unincorporated small businesses.

Part of strategic tax planning is taking action that will increase your chances of surviving an audit.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!