Tax Savings for 2009

Following is a quick run down of 10 important tax savings available on the 2009 Form 1040. However, many of the tax savings come with limitations, so if you have any questions about these changes, please don’t hesitate to contact your Ghirardo CPA tax professional. 
1. AMT exemption. The maximum alternative minimum tax (AMT) exemption has increased to $70,950 from $69,950 for married filing joint filers and surviving spouses, $46,700 from $46,200 for unmarried individuals, and $35,475 from $34,975 for married individuals filing separately in 2009.

2. Child tax credit. The child tax credit remains the same at $1,000 for each qualifying dependent child under age 17, however the refundable portion of the credit has increased to 15% of earned income in excess of $3,000 as opposed to 15% of earned income above $8,500.

3. College expenses tax credit. The Hope Scholarship credit has been expanded and renamed the American Opportunity Credit. Currently, the maximum credit is expanded to $2,500 from $1,800 and the credit is allowed for the first four years rather than only two years of post-secondary education. The modified adjusted gross income range for phase out of the credit is increased from $80,000 to $90,000 for individuals and from $160,000 to $180,000 for joint filers.

4. Personal energy property credit. Make energy-efficient home improvements and you can claim up to $1,500. The credit is calculated as 30% of the purchase price, subject to the $1,500 credit limit, for qualifying solar heating, insulation, windows, doors, roofs, heat pumps, hot water heaters, or boilers. This credit can also be used against AMT!

5. Homebuyer credit. You’ve probably already heard about the First-Time Homebuyer Credit which gives a tax credit of $8,000 towards the purchase of your home if you don't already own one. The extension bill (which extended the program through April 30, 2010) also included a provision for some current homeowners to be eligible for a $6,500 credit on the purchase of a new home.

6. Kiddie tax threshold. The “kiddie tax” rules generally tax excess investment income of those under age 19, or under age 24 at the end of 2009, if full-time students, at their parents’ highest marginal tax rate. For 2009, the threshold to which these rules apply is unearned income in excess of $1,900.

7. Making work pay credit. In 2009 the new making work pay credit reduces tax liability by up to $400 per person (up to $800 per couple on a joint return). However, watch out for the eligibility rules, as some people whose withholding was reduced are not actually eligible for the credit due to phase out in the modified adjusted gross income range of $75,000 to $95,000 per persona and $150,000 to $190,000 per couple.

8. Motor vehicle sales tax. Sales tax paid on the purchase of a new motor vehicle from February 17 through December 31, 2009 is deductible, whether you itemize your deductions or not. The deduction is limited to the tax on up to $49,500 of the vehicle’s purchase price, and the deduction phases out for a taxpayer with modified adjusted gross income between $125,000 and $135,000 and $250,000 and $260,000 on a joint return.

9. Standard deduction. The basic standard deduction amounts are $11,400 for joint return filers and surviving spouses, $8,350 for heads of households, and $5,700 for others in 2009, an increase from $10,900, $8,000, and $5,450, respectively, in 2008. So, for some individuals who itemized deductions in prior years, it may be more beneficial to claim the standard deduction for 2009.

10. Unemployment compensation. Up to $2,400 of unemployment compensation benefits per person are completely tax-free in 2009. These benefits are not included in your adjusted gross income, so could help you to qualify for other tax benefits that have AGI restrictions.

How a SBA Loan Can Help Your Business - Workshop

Spend 75 minutes with Paul Breimayer, Director of Business Consulting at Ghirardo CPA and John Connally, Vice President and Client Relationship Manager at Circle Bank to learn what you need to know about the major recent improvements in the Small Business Lending loan programs and how you can put these loans to use in financing your business. Plus we'll help you discover:

  • What are the big advantages with SBA financing
  • What businesses qualify for SBA financing
  • How long does it take/what do I have to do to obtain SBA financing

**Limited space available for only 15 particpants!**

Seminar Details

Date: August 13, 2009

Time: 12:00 to 1:15 p.m.

Location: Circle Bank, San Rafael Branch 1200 Fifth Ave., San Rafael

Admission: No cost - invitation only!

Reservations: Paul Breimayer at 415-408-5021

Lunch will be provided.

Strategies for Success 2009

We are pleased to announce an upcoming seminar, "Strategies for Success 2009", hosted by the Novato Chamber of Commerce and jointly sponsored by Ghirardo CPA, Circle Bank and Warren Capital Corporation. This event will feature four experts in bank and non-bank financing options for small business owners in today's challenging economy. The workshop will cover:

  • What to look for and expect from a lender
  • Bank and non-bank financing solutions
  • How to get better prepared to increase your chances of success

The seminar will be held on July 9, 2009 from 7:30 to 9:30 a.m. and located at Unity in Marin, 600 Palm Drive, Novato.

Meet the Presenters

Paul Breimayer, has an extensive background that includes 10 years as a CPA with a Big Four accounting firm, 5 years as a Chief Financial Officer and 10 years as the Managing Director of a division of a Fortune 500 company. He is the Director of Business Consulting with Ghirardo CPA and focused on providing CFO services to small businesses, including assistance in obtaining bank and non-bank financing.

John Connelly, Vice President and Client Relationship Manager at Circle Bank, has a 17 year career in the banking industry. Previously a Senior Vice President at Bank of America, John’s principal experience is in delivering financial solutions to small to mid-sized businesses through his background in commercial banking and product management.

For 36 years, Patrick Kilkenny worked for various banks including Redwood Empire Bancorp, Allied Savings Bank, California Valley Bank and Wells Fargo Bank. He is now an Advisor/Consultant for Business Financing and is the Principal of Kilkenny Advisors.

Clay Stephens is founder and CEO of Warren Capital Corporation, a specialty finance company, headquartered in Novato. Warren Capital's 25 year history includes completing over 3,000 transactions for a value in excess of $1.5 Billion. They offer a variety of equipment financing and asset based financing products. Warren Capital has an investment banking affiliate, Wood Warren & Company, located in Emeryville, CA.

For additional information and to register for the event, please visit the Novato Chamber of Commerce web site.

SBA Loans Now on Sale!

That's right, major improvements to the Small Business Administration loan programs have been recently announced. Two of the most important changes:

  • The SBA will increase it's guarantee to 90% on certain loans, reducing lender risk. What this means is that lenders will be more likely to approve SBA applications than they were just a few weeks ago.
  • The SBA is waiving the guarantee fees for all SBA 7(a) loans with maturities exceeding 12 months. This is big.....SBA fees range from 2% to 3.75% of the guaranteed portion of the loan. So while the SBA interest rate is usually acceptable, the SBA fees, on top of the lender's fees, are expensive. Think of this as a one-time sale on SBA financing!

So if you're worried about your company's financing or maybe you were recently turned down, it's a good time to take another look at SBA financing.

Frequently Asked Questions:

1. Why SBA? With the current economic recession and increasing bank capital and regulatory pressure, SBA financing has become one of the strongest remaining sources of financing for small businesses. Loans that would otherwise be turned down under traditional lender guidelines may qualify under the frequently more lenient SBA loan guidelines. SBA loan programs also allow longer important factor in today's uncertain economy.

2. Who offers SBA financing? Many local banks and financial institutions participate in the SBA lending programs.

3. How do I begin? You should begin by determining what your short and medium-term financing needs are. A cash flow projection which can be stress-tested under different scenarios is a good place to start. Once you know what your financing requirements are, it's time to approach the appropriate lender. You need to be ready to prepare a full application package (streamlined SBA loan programs are available in certain limited instances) including a business plan and financial projections (while the SBA lending guidelines may be more lenient, the documentation standards are generally higher than with traditional bank financing).

4. Is there any help? Glad you asked! At Ghirardo CPA we specialize in SBA financing for our clients. If you need help calculating your financing needs, selecting the appropriate lending source, preparing/presenting your application package or negotiating the rates and fees, we have experienced professionals ready to help. Contact our Director of Business Consulting, Paul Breimayer at 415-408-5021 for more information.