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by Stephen Parezo

Guy Mullen, who helps man Fiducial’s Tax Hotline, discusses the new domestic production activities deduction during last week’s Year-End Professional Conference at the company’s Technical and Administrative Support Center (TASC) in Columbia, MD.

December 19, 2005—Tax professionals from across Fiducial’s nationwide network attended last week’s Year-End Professional Conference at the company’s Technical and Administrative Support Center (TASC) in Columbia, MD. Whether it’s viewed as a pre-tax season tune-up, brainstorming session or just the chance to go one-on-one with the company’s national office tax experts it was time well spent for corporate staff and franchisees alike.

“Year-end tax seminars are an important tool in keeping up with new developments in tax and to refresh your memory of the tax code,” said Jim Layton, Fiducial’s director of system support and development. “This year’s seminar included topics on the new production deduction, the new rules for the charitable contribution of automobiles and the usual inflation adjustments for 2005.”

Layton says that the seminar covered the typically difficult topics of Partnership and S-Corporation basis and Like-Kind Exchanges as well as the tax planning opportunities of using Family Limited Partnerships. The two-day session also offered attendees the chance to earn 16 Continuing Professional Education (CPE) credits in taxation.

“With the ever changing tax laws, the only way to remain abreast is through recurring professional education,” Layton said.

There were not a lot of major changes to the tax code this year but Randy Penn, branch manager of Fiducial’s Arvada, CO, office noted that the seminar provided the opportunity to go over some details on complex and interesting cases that will make a difference for small business and high income taxpayers.

Good solid reminder

“We spent a lot of time on passive income and how to take the deductions for passive losses,” said Penn. Passive income and losses are generated from activities that the taxpayers do not really spend much time working on, such as real estate investments. “The rules are really detailed but the session served as a good solid reminder of how that particular process works.”

One of the more significant tax changes that did occur came in the aftermath of Hurricane Katrina with the passage of the Katrina Energy Tax Relief Act of 2005.

“It’s big and it affects people outside of the disaster zone such as allowing people to help relatives who were directly impacted,” Penn said. “For example, you can take money out of a retirement account or a 401(k) in order to help yourself or a family member there if you’re outside of the area.”

The Act applies not only to victims of Katrina but those affected by Hurricanes Rita and Wilma, too.

Annapolis, MD-based franchisee Bob West commended the tax staff for its usual thorough presentation and welcomed the chance to get answers to some difficult questions.

Answering tough questions

“Other tax seminars highlight changes in the tax laws which are very important, however, the staff of the tax department actually shows you how to fill out specific forms,” said West. “In addition, you have the staff available, as a captive audience, to ask any questions you want. I have always used this time to get some tough questions answered. Also, you get to hear about issues other associates are having.”

Scott Dickens, a senior business advisor in Fiducial’s Reistertown, MD, office found the conference atmosphere conducive to soaking up the latest tax updates from the company’s resident experts in an informative, relaxed environment.

“What I enjoyed most was the tax staff informing you of the tax rules, giving you examples of various tax situations, showing you the correct way to fill out the forms and showing you the finished form,” said Dickens. “They went over in detail many important situations that not many tax conferences go into enough detail on.”

As a result of what he’s learned, Dickens will spend more counseling time teaching clients the importance of using the Minutes Book which verifies that all important company events are logged in the book. This includes its officers, information on retirement plans, medical plans, bonuses to officers and loans to/from shareholders. He believes that many small business S-Corporations and C-Corporations simply do not fill out these books correctly.

“Without a well-documented Minutes Book the clients are subject to losing the protection of a corporation,” he said.

Stephen Parezo is the Media Manager for Fiducial.

Whatever your small business needs, your Fiducial tax and financial professional can analyze your situation and recommend an appropriate action plan. To locate a Fiducial office nearest you on fiducial.com, see the Zip Code Locator located in the upper right hand corner of the page. Do you have a particular topic that we should be writing about that can help your business? Please send your suggestions to: stephen.parezo@fiducial.com.

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