Moody CPAs and Advisors LLC

Tax benefit? Jumbo shrimp? Oxymoron?

At this time of the year, we hear ”IRS” a lot. Almost every conversation contains a reference to that agency. But, there are some interesting things happening at the state level that deserve some comment as well.

For instance, homeowner’s insurance premiums have gone up dramatically. To help, the SC Department of Revenue established a credit (max = $1,250) for homeowners whose insurance costs exceed 5% of their AGI. In this economy, when many incomes are lower, we see more taxpayers getting some benefit from the credit, if not the maximum.

Then, there is a credit for beefing up your home’s resistance to damage from wind related disasters. That credit could net you up to $1,000, and an additional credit for sales tax on the materials to do the retrofit! (This may lower your insurance rates, too.)

Both of these credits are available for your 2009 SC income tax return, as well as 2010. Yes, there is always fine print. But, it’s worth a look.

For 2010, there is also a new Federally-funded/State-administered rebate program for purchasing energy saving appliances, and other items for your home. Just like the “Cash for Clunkers” program, it has limited funding and when it’s gone, it’s gone. The South Carolina program tentatively begins March 31, and the state has been granted $4,200,000+. Rebates range from $50 to $500. So, if you’re in the market, you might want to check out this program.

As always, we stand ready to help you determine your eligibility for these and other benefits available from both the IRS and the SC Department of Revenue.

I’ve always felt that one of the most important jobs of the business community is to try and be upbeat and positive about each other and our economic prospects. After such a turbulent year, even the most hopeful among us has had that optimism tested and then some. I’ve heard from so many folks about the gut wrenching and impossibly difficult decisions that we’ve all had to make. It’s not going to go down as one of our favorite years from an economic standpoint.

I worry that we’re making so many short term decisions that the long term view is getting lost in some way. It’s not being at all political to ask if we’re spending too much in the near term if we’re poised to damage our long term recovery. I think we all would like some signs that the people in charge understand the dilemma and have a strategy. In an effort to be as nonpartisan as possible, I didn’t think our strategy was right a year ago and I haven’t changed my mind 12 months later. I was taught when you have less, you spend less. Maybe if we could start with that premise some day soon….

The truly wonderful thing about taking stock at this time of year, though, is my faith in our country’s resilience. I’m absolutely positive that the things that have always made us great will pull us out once again. I remain hopeful that the belt tightening now will pay off, and pay off soon.

Until then, let’s all be thankful for those things that have held fast for us this year, just like they do every year. Our family, friends, coworkers and clients. Here’s to a healthy, happy and prosperous New Year.

The hardest part about posting a blog might just be the title. Maybe if I post more often, titles will be easier to come by. Impressive, right? No matter your sporting interest, there’s nothing quite like the enthusiasm of sporting fans in the South come September. Whether it’s football, hunting or whatever you enjoy, there are so many stories that aren’t exactly work related. The good news is that half of the teams in football are undefeated after week 1 and the 8 point bucks still have months to be harvested. Hope springs eternal.

Speaking of hope, I was nominated to serve on the South Carolina Tax Realignment Commission and our first meeting is September 9th at the state house. The commission is being served by some very prominant South Carolinians(myself excluded, of course) and it will be interesting to see if we can cobble some sense out of a very disjointed and often uncompetitive tax system. This is something that everyone will have an opinion on and I hope to hear from many people as we go through this review. It’s hard to predict what direction this will take because this group will have to study the current system, try to come up with some smart fixes and craft them in a way that’s politically viable because whatever we bring to the General Assembly has to pass their review or it’s just another report on the shelf. I’m certain that none of us wants that outcome and I’m hopeful we can do some good. Let me hear from you if you have any suggestions about making our tax system fairer and more competitive.

It’s been an unusual time to begin a new business. Vendors are providing big price cuts to develop new customers especially in the software arena. While the signs of recession seem to be subsiding, the folks I’m talking to are not sure we’re out of the woods quite yet.

This got me to thinking about what businesses and individuals should be doing now to make sure that when the sun pops out again in earnest that they’ll be ready to capitalize on those better times. Most companies have cut almost as deeply as they can and still survive. The cuts went deeper than marginal performers. Some very solid people are out there desperately hunting for work, especially in South Carolina. Households have already made similar lifestyle changes and are watching for better prospects. While I’ve witnessed first hand the opportunities that this year has presented, my counsel is to grin and bear it where you work at least in the short run. Use this time to get better at what you do and make sure you’re indispensable to your employer. Study and learn something new. Be ready when the tide turns. I’m talking to a lot of you who are itching to move..patience grasshopper.

For the small business owner, the grinning and bearing it period passed some time ago. If you’re not lean and mean already, it might be too late. For so many years, we always carried a few extra people to “grow into” and this last economic jolt has changed this mind set for the forseeable future. My advice is to take a long look at your business and decide what you do really well and focus on that. Your billing cycle needs to change. You can’t be providing interest free loans in this environment. However, let me know if you’re in that business and I can send some work your way! Inventory needs to be cut in every way possible and, again, focus will help you make those decisions on what to carry and how much. Make sure you pay on time. You need that credit and those terms. Finally, communicate with your team. They are petrified in many cases and they want you to make it through this and will go to no small length to help you get there. This is no time to be in a bunker without your army.

You can’t sugar coat some of the very real challenges we all still face. With that said, I think we owe it to each other to be as optimistic as possible. The credit crunch is improving and stocks are back to November 2008 levels. I think making sure that we do business with each other makes a lot of sense too. I’m banking on a great 4th quarter and I hope you are as well.

Thanks to all of you for your kind words and well wishes. We’re very grateful for the response to our new firm. I’ve watched so much of the social networking craze with an amused and somewhat wary eye, but it strikes me as important to be able to communicate with your audience, no matter how big or small, in the places where they want to meet you. In that vein, we’ll try to be topical, informative and do our best to keep the blog up to date. I’ve been informed by so many people that I respect that these social network activities can be a time drain(my word). They usually tell me this as they type in their latest friend request. Maybe we’ll get addicted but my bet will be that we’ll use this space to the degree that you find it useful. I’m pretty sure the world isn’t quite ready for a depository of my inner thoughts so we’ll keep this safe for children and would love to hear from you any time.

The Obama administration has come out with an aggressive agenda and I find it interesting that there hasn’t been much tax talk thus far. That’s not a political statement but both parties talked up tax code changes during the election so I find it mildly surprising that this hasn’t been talked about too much. I guess there’s been plenty of other activity so the tax code may have to wait. With that said, should the code remain the same, there are some pretty good tax planning ideas available that we’d like talk to you about as we get closer to the end of the year.

Thanks for visiting and enjoy the rest of the summer.

Brian