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STRATEGIC ISSUES...ONLINE 
For week of July 31, 2006, Issue #271
Featured Articles:
1.  Do You Know What Your Business is Worth?
2.  Don't Let AMT Become a Last-Minute Tax Surprise
3.  Tech Tip Weekly:   Time for the Annual Clean-A-Fest
4.  Compliance Calendar
 
If you would like to have further information on any of these articles, let us know.  We would appreciate receiving your comments and/or suggestions, anytime!
acarroll@pmcpa.com
 
1.  Do You Know What Your Business is Worth?
 
If not, Prangley Marks, LLP can help!  Call either Les Prangley or Harold Marks, our two Certified Valuation Analysts (CVAs).  Find out today what your business is worth!
 
2.  Don't Let AMT Become a Last-Minute Tax Surprise
 
Are you at risk for the alternative minimum tax (AMT) in 2006?  This "parallel" tax system has caught more and more middle-income taxpayers in recent years, often showing up as a nasty, last-minute tax surprise.  The recently signed Tax Act provided some relief, but only for this year.  And the relief provisions won't help everyone escape the tax.  That's why it pays to plan ahead and see whether you might be liable this year or next.
 
The AMT was set up in the 1960s to make sure wealthy taxpayers didn't use deductions and exemptions to avoid paying any tax.  It applies a 26% or 28% tax rate to income above a certain exempt amount.  The problem is that the exempt amount was never indexed for inflation, so more and more middle-income earners find themselves above the threshold.
 
For 2006 only, the exempt amount is $62,550 for married filers, $42,500 for singles.  This may sound generous.  But you can't claim personal or dependent exemptions, the standard deduction, or some itemized deductions against the AMT.  So if you have a large family or pay high property and state income taxes, you could be vulnerable.  Exercising incentive stock options can also trigger an AMT bill. And unless Congress acts again, the amounts will fall back to lower levels next year.
 
It's wise to find out if you're likely to be affected by the AMT, this year or next.  If you are, you may be able to take steps to minimize your overall tax bill.  Strategies might include adjusting when you make tax payments or charitable contributions, accelerating income, or changing how you exercise stock options.
 
Please contact us if you think you might be affected.  We can assess the risk and help you develop solutions.
 
 
3.  Tech Tip Weekly:  Time for the Annual Clean-A-Fest
 
Should old acquaintance be forgot...But over the course of a year many computer acquaintances can be forgotten. Or dropped. Or misplaced. Or whatever.  Creating an annual checklist to keep your MS Windows system lean, mean, and clean is a good idea.
 
-Review all data files on your computer and archive as necessary:  Perhaps the biggest annual task is doing a comprehensive review of the data files on your computer.  If you have been doing monthly archives, you can now add other files to the annual pile and shuffle them off to archive media.
 
-Review your Web browser's favorite list and delete items you don't use anymore:  You should also plan on firing up your Web browser and reviewing the items in your favorites list.  Chances are good that what you considered your favorites a year ago no longer qualify as such.  Keeping your favorites list pared down helps you find what you need faster.
 
-Visit manufactureres' Websites to check for updates:  Take some time to visit the Websites for the manufacturers of your system hardware.  Check for new drivers for printers, scanners, cameras, and so on, that have been released during the previous 12 months.  Updating your drivers can improve speed and reliability.
 
-Review your security precautions and update them as necessary:  It's a cruel, cruel world out there, and some of the perpetrators of cruelty want to get up close and personal with your computer.  Your job is to stop them.  You should, at least on an annual basis, make sure that you review your security precautions.  Make sure you do your review with an eye toward major security changes in the past year and how you can be prepared for the coming year.
 
-Update your program inventory:  Work habits change; tools come and go.  You need to make sure that your MS Windows system always reflects the way you currently use your computer.
 
 
4.  Compliance Calendar
 
August 4
-Employers deposit Social Security, Medicare and withheld income tax for July 29, 30, 31, and August 1.
 
August 9
-Employers deposit Social Security, Medicare and withheld income tax for August 2, 3, and 4.
 
August 10
-Employers file Form 941 for second quarter 2006, if the tax for that quarter was deposited in full and on time.
 
-Employees receiving $20 or more in tips during July report them to employer on Form 4070.
 
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Prangley Marks, LLP
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