Gregory J. Cook, EA, CPA
Accredited Tax Advisor |
If your 2009 tax returns are under extension, I
encourage you to call for an appointment as soon as
possible.
The tax law changes that will take effect
next year will change everyone's tax picture. There may be
actions you can take before year-end that will work to your
advantage. In addition to allowing more time for planning,
scheduling your appointment now will avoid the rush of all
those that put it off to the very last minute.
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Proposed Regulations Expand the Use of Electronic Payment System and
Discontinue Paper Coupons Next Year
The proposed regulations (REG 153340-09) would eliminate the rules for
making federal tax deposits by paper coupon because the paper coupon system
will no longer be maintained by the Treasury Department after Dec. 31, 2010.
Deposits can only be made online with a computer or by telephone.
Income Tax Rates Set
To Change
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Important: Capital Gains and Ordinary Income Tax Rates to Change
Next Year In 2011
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NOW
Ordinary
Income Tax Rate
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NOW
Short-term
Capital Gains
Tax Rate
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NOW
Long-term
Capital Gains
Tax Rate
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2011
Ordinary
Income Tax Rate
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2011
Short-term
Capital Gains
Tax Rate
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2011
Long-term
Capital Gains
Tax Rate
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10%
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10%
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0%
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15%
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15%
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10%
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15%
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15%
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0%
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28%
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28%
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20%
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25%
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25%
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15%
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31%
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31%
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20%
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28%
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28%
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15%
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36%
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36%
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20%
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33%
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33%
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15%
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39.6%
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39.6%
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20%
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35%
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The reduced 15% tax rate on qualified dividends and
long term capital gains, previously scheduled to expire in 2008, was
extended through 2010 as a result of the Tax Reconciliation Act signed
into law by President George W. Bush on May 17, 2006.
As a result: In
2008, 2009, and 2010, the tax rate on qualified dividends and long term
capital gains is 0% for those in the 10% and 15% income tax brackets.
After 2010, dividends will be taxed at the taxpayer's ordinary income
tax rate, regardless of his or her tax bracket. After 2010, the
long-term capital gains tax rate will be 20% (10% for taxpayers in the
15% tax bracket).
After 2010, the qualified five-year 18% capital gains
rate (8% for taxpayers in the 15% tax bracket) will be reinstated.
Tax Planning
has taken on an increased sense of
urgency between now and year-end.
In some instances the best course of
action may exactly the opposite of what
one would normally surmise.
A good example is, if
you are holding investments with market
values that would result in a long-term
capital loss, you might want to wait
until after the first of the year to
recognize those losses.
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2011 Tax Brackets
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Plan Now!
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| Tax Bracket |
Married Filing Jointly |
Single |
| 15% Bracket |
$0 – $70,040 |
$0 – $35,020 |
| 28% Bracket |
$70,040 – $141,419 |
$35,020 – $84,872 |
| 31% Bracket |
$141,419 – $215,528 |
$84,872 – $177,006 |
| 36% Bracket |
$215,528 – $384,860 |
$177,006 – $384,860 |
| 39.6% Bracket |
Over $384,860 |
Over $384,860 |
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Developing a tax
strategy now can result in significant
savings. There are a lot of
false rumors being circulated about the
tax law changes. Don't assume that
what you have heard is true and be
surprised at filing time.
Call us for an
appointment to project your 2010
liability, see where you stand and what
you can do to lower your taxes.
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As a Small Business, What Can I Deduct On My Taxes?
At Cook and Company, we want to help you make the
most of tax opportunities specific to your circumstances. Taking full
advantage of tax relief strategies can make a significant difference in
your bottom line and financial situation. Efficient tax planning is
important, but may require a separate appointment from your 2009 tax
preparation appointment.
But my brother-in-law or uncle took a deduction for it ...
The difference between personal and business expenses.
Where is my Alabama income tax refund?
You can expect a delay in receiving your
refund from the State of Alabama, due to a cash shortage in
Montgomery.
You can check the status of your refund online at the
Department of Revenue. If you are receiving delayed
refunds from the State of Alabama year after year and the
amount of your refund is more than $1,000, ask your Cook &
Co. agent about adjusting your state withholding for the
future. It's not just the State of Alabama, we are seeing
the same thing with Hawaii, California and a few other
states as well.
Alabama Residents Filing Sub-Chapter S Corporation Returns - Look
For a Letter From The State
You can expect a delay in receiving your
refund from the State of Alabama, if you are a shareholder
in a Sub-Chapter S Corporation. The problem arises when your
individual tax return is filed electronically. The State of
Alabama does not have the ability to receive your S-Corp
Return electronically. The Pass-Through Entity Section at
the Alabama Department of Revenue says it can take them 4 to
6 weeks to process the paper S-Corp Return.
Therefore, a Revenue Examiner in the Individual and
Corporate Section will send you a letter stating that they do not have a
record of an S-Corp return being filed. The reason they don't have the
record is because the other department has not processed the paper yet.
$250 Economic Recovery Payments (ERP) that were made last
year to Social Security retirees, disabled individuals, SSI
recipients, disabled veterans and railroad retirees causing
delays!
You know the $250 ERP payments had little
impact when people can't even remember if they received the
payment or not. Line 10 on the new Schedule M (Making Work
Pay and Government Retiree Credit) asks if the taxpayer or
spouse received the $250 payment last year. If we answer the
question incorrectly, your return will reject and we must
correct it and re-transmit it to the IRS. The IRS sent an
email to me today announcing a special toll-free number they
have set up to help with this problem.
If you are unsure about whether you
received the advance payment, you can
call the IRS toll-free at 1-866-234-2942 prior to your
appointment and verify whether you got the payment or
not. The only information you will need for this automated
response call is your Social Security number, date of birth
and the zip code you used on last years tax return. If you
need to retrieve this information for you and your spouse,
you must place a second call to the number.
Considering the risk and volatility of the markets coupled
with low interest rates, should I use my savings to pay off
my home mortgage?
This seems to be a popular question this
year. Our best guidance would depend on your individual
circumstances, however as a rule of thumb here are some
generalizations. If you are below age 45 and you don't view
the current home as the last home you will buy, then lock in
the lowest interest rate on your mortgage and keep the
mortgage. If you are over age 45 and view your current
residence as your retirement home, then consider paying the
mortgage off early.
If I pay off my home mortgage, what impact will it have on my taxes by
losing the home mortgage interest deduction?
The home mortgage interest deduction is a "personal itemized deduction"
which is claimed on Schedule A along with other items such as, medical
expenses, property taxes, tax on your car tags, sales tax on a new car,
charitable contributions and employee business expenses, union dues,
etc. Because the federal government will give you a Standard Deduction
of $11,400 for a married couple or $5,700 for a Single taxpayer, you
must exceed these dollar amounts before you gain any advantage.
We really must look at this on a case by case basis to determine the
outcome. Generally speaking, the taxpayers that would be hurt the most
by losing the deduction
are those people that have a lot of other personal deductions, for
example those who give a significant amount to their church each year.
It is important to remember that for every $3 you pay in mortgage
interest, the most you get back on your taxes is $1, so you are still
out of pocket $2 financially speaking. At times it may be better to base
your decision of whether or not to pay the mortgage off early on factors other than taxes. The interest rate you have on
the mortgage is a big factor. For example, if your interest rate is 4.5%
and you are getting the full benefit of the deduction, your true
after-tax interest rate may be 2.97%.
Cook and Company Welcomes Mike Tankersley, EA, CFP
I'm pleased to announce the
addition of Mike Tankersley, EA, CFP in the Tax Department.
Mike holds a BS degree in Industrial and Systems Engineering
from the University of Alabama in Huntsville and received
his MBA from the University of Colorado. Mike has been a
Certified Financial Planner since 1997 and recently received
his Enrolled Agent license and U.S. Treasury card after
successfully writing the EA exam.
Have you ever received a tax document that has bold print that reads
"CONSULT YOUR TAX ADVISOR"?
Bring it to us! The reason for those disclaimers is because
of the potential liability associated with providing tax
advice. Providing tax advice is what we do. But please
remember that when you are with your agent working on the
2009 tax returns, if you have tax questions about the
future, try to hold those until the end of the interview.
Once your agent has gathered all of your information and
keyed it into our computer system, he will have an updated
snapshot picture of your tax and financial situation on his computer
screen and will be better equipped to answer questions about
the future.
2009 Tax Returns Have Tax
Breaks For Almost Everyone!
The 2009 tax year is a unique one to say
the least. All of the tax breaks for higher income
individuals that President Bush pushed through back in 2001
and 2003 are still in effect, and President Obama has pushed
through a number of generous tax breaks for lower income
individuals. In particular, for those who have adjusted
gross incomes under $160,000 and children in college.
The American Opportunity Tax Credit for college tuition, books and
computers is extremely helpful to taxpayers with a spouse or child
attending college.
Those who made energy savings improvements to their homes are getting
tax credits of up to $1,500. The Making Work Pay tax credit is available
to everyone with adjusted gross income below $150,000 (married filing
joint) and $75,000 (single taxpayers). There are special tax breaks for
those who purchased homes, automobiles, motorcycles or motor homes last
year. There is even a tax credit for buying a "street legal" golf cart.
In general, I have to say that on average the 2009 tax filings are
yielding the best results for taxpayers that I have seen in the last
twenty years. I don't particularly like statistical averages, because if
a person took their shoes off, rolled up their pants and placed one foot
in a tub of ice and the other in a tub of scalding hot water, on average
they would feel pretty comfortable. Right? Well, there will always be
someone, that due to their particular circumstances will feel like they
just stuck their foot in that tub of scalding hot water at tax filing
time. For those people, I promise that we will do everything we can to
lessen the pain.
Want to "Go Green" and Help us Save Trees?
The number of trees
required to produce the paper we generate at our office each year is
16.2. We would like to lower this number, but it will require assistance
from you. One tree produces about 16.67 reams of paper, or approximately
8,335 sheets of standard business paper. We can provide your "keep
copies" of tax returns in password protected pdf format. To learn more
about going green, just ask your agent. These numbers represent just the
client "keep copies" of tax returns each tax season. Twenty years ago we
reduced our paper consumption by one third when we started filing the
government copies electronically. Ten years ago we cut the paper usage
in half when we began storing our office copy in electronic format. Now
it's your turn.
New Regulatory Requirements Placed On
All Paid Tax Return Preparers and The Impact On Fees We Charge For
Tax Return Preparation
Registration and payment of user fees to the IRS, competency testing,
continuing education, compliance checks, due diligence and ethical standards are areas
where sweeping changes were made by the IRS.
Our review and
documentation processes have been burdened with additional procedures.
It seems that the IRS wants the paid preparers to virtually audit the
taxpayer before filing the tax return, based on the penalties in place
now, which include a minimum $1,000 penalty for taking an unreasonable
position to a $5,000 minimum penalty for understating a tax liability
due to reckless or intentional disregard of these rules and regulations.
These
regulatory requirements coupled with increased costs in every
facet of our business are forcing us to increase the fees we charge.
While we make every effort to hold our fees to a minimum and have not
increased our fees in over three years, we must implement this increase
in order to maintain our tax practice. Even with the new fee increase,
you will find our rates very competitive.
Our commitment to you
has never been stronger. We anticipated these changes and began
implementation of steps and measures that have been phased in over the
last two years. For example, we scan all of the documents our clients
bring to the office for use in preparation of their tax returns. We
return the originals to the taxpayer, and maintain our secured digital
copies should one of these items on your return be questioned in the
future. This has the added benefit of a backup copy should your
documents be lost or destroyed.
We are honored to have our website used as a source
reference by the U.S. Department of Commerce, International
Trade Administration. The hyperlink to our website from this
document certainly boosted our search rankings with Google.
The
reference to our website came under the heading
Safeguard U.S. Industries and Jobs Against Unfair Trade
and the subheading Mission and Goals for FY 2009. The
report was created on May 7, 2007 under President Bush and made
public on February
1, 2008 .
New Year tax tip for anyone that uses
their automobile for business purposes.
Take your car or truck
in to be serviced as close to the end of the year or beginning of the
year as possible. Save the printout or receipt that shows the mileage
(odometer reading) of your vehicle. Even if you are claiming the mileage
rate and not actual expenses, this will serve as a third party
verification of the odometer should you be audited. The IRS is routinely
checking the mileage deduction more and more.
The President signed
HR 3548 Worker, Homeownership and
Business Assistance Act of 2009.
Important aspects of the new tax legislation include a provision for
homebuyers who have owned a home for 5 of the previous 8 years, and buy
a new home to get a tax credit of up to $6,500. The Bill also extends
the $8,000 credit for first-time home buyers through April 30, 2010.
I Just
Received a Notice from the Internal Revenue Service. What Should I Do?
If you have received a
notice or letter from the Internal
Revenue Service, you should pick up the nearest telephone and call us at
1-800-551-6253 immediately. If we prepared your tax return for the year in
question, all we need is a copy of the notice or letter by fax, email or
regular mail.If we did not prepare your return, then we will need a copy
of your tax return for the year in question in addition to a
copy of the IRS letter. Our fee for assisting you will be well
worth it. Never just write a check to the IRS without
investigating the issue, they do make mistakes. Many of the
recent IRS letters we see have to do with
self-employment tax
or cancellation of
debt.
When I first heard about this, I thought it was
the craziest proposal I'd ever heard. After reading it, I still do. If you are like me
and think "that is just too crazy to be true", believe it! I've posted the
full text of HR 45 here so you can
read it for yourself. Tax Settlements – Are They Real?
You’ve seen the advertisements on TV, “settle
your tax liability for pennies on the dollar”. The IRS does have a
program called Offer In-Compromise (OIC) by which a taxpayer can have
their tax debt settled for “pennies on the dollar”. To qualify, a
taxpayer must meet strict criteria.
The American Recovery and Reinvestment
Act (ARRA) provides numerous tax
incentives for individuals; First-Time Homebuyer Credit Expands.
Homebuyers who purchase in 2009 can get an $8,000 credit with no payback
requirement. Money Back for New Vehicle Purchases. Taxpayers who
buy certain new vehicles in 2009 can deduct the state and local sales
taxes paid as an "above the line deduction" even if you don't itemize.
Enhanced Tax Credits for Tax Years 2009, 2010. A new higher
education benefit, increased earned income tax credit, additional child
tax credit and the American Opportunity Credit. Up to $2,400 in
Unemployment Benefits Tax Free in 2009. Individuals that will
receive more than this amount should check their withholding because the
excess will be taxable. $250 for Social Security Recipients, Veterans
and Railroad Retirees. The Economic Recovery Payment will be paid by
the Social Security Administration, Department of Veterans Affairs and
the Railroad Retirement Board. Energy Efficiency and Renewable Energy
Incentives. Too much to list here. Health Coverage Tax Credit.
The credit increases from 65 percent to 80 percent of qualified health
insurance premiums, and more people are eligible.
There are several tax law changes that
may have a negative impact for you this year. Specifically, the Making
Work Pay Tax Credit means you will have less tax withheld this year. To
make sure enough tax is withheld, we should review your withholding.
The IRS has issued a special warning to
married persons about the "Making Work Pay Tax Credit"... married
couples with two incomes should pay particular attention to their
withholding as you could have less than you need or want withheld from
your paychecks.National Taxpayer Advocate Delivers 2010 Report to
Congress
National Taxpayer
Advocate Nina E. Olson released her 2010 report to Congress that
identifies the priority issues the Taxpayer Advocate Service (TAS) will
address during the coming fiscal year. The report expresses concern
about the adequacy of IRS taxpayer service, particularly as the IRS
begins to implement health care reform, about new information reporting
burdens facing small businesses and others, and about certain IRS
collection practices.
What kind of
Financial/Tax Strategy should I have in these uncertain times?
If you have an IRA
(Individual Retirement Account) that has dropped 45% in value, there may be
no better time than right now, to convert to a ROTH IRA if you qualify.
Consult your agent or advisor before taking any action.
Help Us, Help You - By Holding Down Costs, We Can Pass Those Savings On
To Our Clientele ...
Please
be sure that we have your most current email address. If you are
comfortable communicating by email, it will help lower our significant
telephone costs. In addition, if you are using a cell phone plan where
you have unlimited long distance service, please call us on
256-586-4111. You will rarely get a busy signal because we pay for extra
phone lines where incoming calls will automatically flip or rotor to the
next available line when this number is dialed.Do you have a tax problem?
What to expect on your visit to see us...
First, call and schedule an appointment at a time that is convenient for
you (see hours and
appointment times in the grey box). When you arrive at the office you
will check in with the Receptionist in the lobby. She will get some general
information from you and create a new file for us. Greg Cook will come to
the lobby to greet you, give you a short briefing about the firm and our
process, then escort you to the Tax Department to your assigned
Agent. If you have
a tax problem, we can help.What are your fees and rates for Individual Tax Preparation?
Our Fee Schedule is based on the Forms and Schedules required
to prepare your returns. Our Control Card is a work
order that is attached to each file. The Control Card also has a place for
each member of our firm that works on your file to initial off and date that
your file passed through that station. We have a
Ten Step Process that each file goes
through from start to finish. ...read more and
see Fee ScheduleWhy should I pay to have my taxes done, when I can prepare them?
Save Time - The average person that
prepares their own tax returns spends 16 to 81 hours on the project (IRS
Reference). With us you spend 30 minutes to an hour. What's your time
worth? ...read more about the
benefits of retaining us We celebrated 50 years in business at the same location in 2007!
We celebrated
50 years in business in 2007, from the same location in Arab, Alabama, just
19 miles south of Huntsville. Cook and Company invites you to experience what
life can be like, with a team of trusted professional advisors on your side,
on call for you year-round, to help with business, tax and financial matters.
Call us today. You'll be glad you did! Listen to client testimonials
...
Audio #1,
Audio #2,
Audio #3,
Audio #4 or
Audio #5 - Listen
to client testimonials. After clicking a link at left you may be
prompted to "open" or "save", just click open. U.
S. Sales Tax Rates Hit Record High according to Forbes Magazine
...
"The country's highest rate is now 12%, in the tiny portion of tiny
Arab, Ala. (population 7,500) sticking into Cullman County. The rest of
the northern Alabama town, in no-sales-tax Marshall County, pays just
8%. The tiny sliver of this northeastern Alabama city of 7,500 jutting
south into Cullman County has the dubious distinction -- by far -- of
the country's highest local sales tax rate. Here's the breakdown: 4% to
Alabama, 4% to the county and 4% to Arab. The city's name comes from
Washington, D.C., bureaucrats who a century ago misread Arad on an
application to open a post office."
Read the full story from Forbes.com and at
Yahoo! Finance. Posted by Garry Youngblood, MBA
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I'm often asked about
the old pictures in the
lobby, see and hear about
them in this test video.
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We are experimenting with combining some new technologies to
bring video to our website in a way that will be seamless
and fast. Anytime you see an article on our site that has
the video image above by the title, there will be a short
video about that subject matter by clicking on the video
image. |
| Anytime Online Access To Us |
CONTACT
Cook & Co.
Bara Business Center
124 South Main Street
Arab, Alabama 35016-1351
- Main Tel: 256-586-4111
- Nationwide: 800-551-6253 or 6254
- Birmingham (Direct): 322-7452
- Huntsville (Direct): 534-6922
- Fax: 256-586-4138
- Email: info at bara dot net
- Directions:
Map
- Office Directory
- We accept VISA, MasterCard, Discover and American Express
OFFICE HOURS
Tax Season (Feb 1 - Apr 15)
Mon - Fri
9:00 a.m. - 8:00 p.m.
Saturdays 9:00 a.m.
- 4:00 p.m.
After Tax-Season (Apr 16 - Jan 31)
Mon - Thu 9:00 a.m.
- 5:00 p.m.
Closed on Fri and Sat
Scheduling an
Appointment:
With the majority of our clientele being in the Huntsville and
Birmingham metropolitan areas, we maintain direct phone lines from
those areas. In Huntsville call 534-6922. In Birmingham call
322-7452. Our local Arab telephone numbers are (Area Code 256)
586-4111, 586-4112, 586-4113 and 586-4114 (if using a cell phone,
please use one of these numbers). If you need to call toll-free,
dial 1-800-551-6253 or 1-800-551-6254.
Available appointment times on the hour are: Mornings
9, 10 or 11, Afternoons 1, 2 or 3 and Evenings 6, 7 or
8 (no evening appointments on Saturdays).
HELPFUL INFO
Our sitelinks are divided into four main categories:
The Accounting Department, where you
will find information related to; accounting, bookkeeping and
payroll.
Our Tax Department has answers to many
questions you may have regarding federal, state and local taxes,
including; income tax, sales tax, privilege tax and use tax.
In the Financial Department you will
find articles and information on; managing your finances, banking,
investing, different types of investments, cash and debt management.
The Technology Department contains
helpful information on; computers, software, information systems,
automated processes, the internet and email.
Many hours of work have gone into our effort of providing the
information contained in this website, not only to our many clients,
but the public in general. As of June 2010 we have more than 2,000
pages. To quickly find the answers to your accounting, tax,
financial or technology related questions, please use our search
box, which is in the upper left corner of every page.
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Are you looking for the right Business Accounting
Software?
If you are looking for
business management software that; will meet your needs
for information reports, is user friendly and has
affordable support (local to you, by phone and internet)
that is readily available (in English). Read this
Two Minute Executive Summary on "What to Look for in
Business Accounting Software" before you make a
buying decision.
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"Let Us Put Our Knowledge, Technology and Resources To Work For
You!"
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