Top 10 CD's of 2007

Here's my list:

10. Okkervil River - Stage Names
9. LCD Soundsystem - Sound of Silver
8. Battles - Mirrored
7. The National - Boxer
7. Animal Collective - Strawberry Jam
6. Arcade Fire - Neopn Bible
5. Wilco - Sky Blue Sky
4. Modest Mouse - We Were Dead Before the Ship Sank
3. Radiohead - In Rainbows
2. The national - Boxer
1. Spoon - Ga Ga Ga Ga Ga

Mike

AMT Patch Explained

The AMT Patch is not as exciting as it looked to be. The "patch" merely raised the exemption for taxpayers by a few dollars. Had no action been taken exemption amounts would have been rolled back to 2005 levels.

So the AMT has not been repealed and most taxpayers who were subject to AMT last year will continue to be subject to this ridiculous law.

AMT Patch Approved

Congress has passed what is being called an AMT "patch" for the 2007 tax year. Unfortunately, they have yet to provide details as to what this patch is, but details should be released in the next few days.

As mentioned in previous posts, AMT is an alternate tax calculation that recomputes the tax liability by using a flat tax rate and eliminating several deductions such as state taxes and exemptions.

The reason Congress is acting is primarily due to the fact that approximately 20,000,000 taxpayers will be ensnared in the system this year and no one wants to confront voters in 2008 if so many people are subject to a tax that makes little sense.

Racine Dental Front Line Staff Complete Circore Customer Service Training

Racine Dental Group took the first step in their commitment to world class customer service by training their front line staff. Fifteen members of the front desk team, patient account representatives and their managers completed Circore's Customer Service training.

"It is a customized program tailored to the needs of each client we serve," says Denise Cawley, a principal at Circore.

Staff were lead by Lynn Moore & Denise Cawley through an intensive four part series focusing on body language, customer service nuances like tone of voice, wording choice, quality programs in customer service, customer service follow up, world class customer service and more. It is a very comprehensive program teaching our clients how to be consistently attentive to their patients.

"With all the competition businesses face, it is important for dental offices to pay more attention to customer service," says Moore.

"There is a big difference in saying: I see you have a $250 Lab fee today – I hope that is OK with you. Otherwise we can bill you… and instead saying: Mr Jones you have a $250 copay today. We accept cash, check, mc or visa" says Cawley.

"We teach clients how to ask for payment, and how to make on-time payments a benefit to the patient," says Moore.

"I felt the most valuable things from the training were labeling desired behavior as “detective” and “tour guide.” Simply putting that descriptive title helped articulate the action required by the employee to deliver good customer service and they get it! Also your identifying that our policies are visible to patients and therefore actually contribute to a reduction in customer service was enlightening. Offering suggestion for ways to measure the service process so we can determine our success as well as give the employee a feeling of accomplishment was great. The positive manner in which you presented information and coached the individuals, identifying their weaknesses and areas where improvement was needed yet keeping it constructive really motivated them to try harder, states Carolynn Chapin, Racine Dental Group.

Holiday Bonus With a Twist at Bridgeview Dental

Oshkosh, WI, Bridgeview Dental

Dr. Jacci Belter surprised her staff on Friday by having a white stretch limousine pull up in front of the office to take them shopping as their holiday bonus. Rather than passing out a Christmas bonus based on length of time with the company or doing away with it completely as many companies have, Dr. Belter chose to make it a team building experience.

“I have a great mix of new and senior staff. I wanted a way to thank them for what they have done and what they will do in the coming year to make Bridgeview Dental the best office in Oshkosh.”

Dr. Belter gave each staff member $200 and required that they spend it on themselves. They drove to Mayfair Mall, in Milwaukee in order to have the treat of shopping somewhere new and giving them more time to celebrate together in the limo.

“It was the best Christmas present ever that a boss could possibly give.” Says Melissa Salm, dental assistant.

Cassie Fry, receptionist says, “I was happily surprised that Dr. Belter took me and the other new staff, on the trip. After all, I have only been with Bridgeview Dental less than two months. It was awesome.”

“It was a great opportunity for all the staff, me included, to get to know one another. We had so much fun. They (the staff) are all begging me to make it an annual tradition” says Dr. Belter.

IRS Placing Emphasis on Charitable Contribution Documentation

One of the main concerns the IRS has grappled with in the past few years is the "tax gap". In short, this is the difference between what income is reported and what the reality actually is. One area that many people have taken liberties with is their reporting of charitable contributions. Based on research conducted by the IRS it is clear that the amounts reported for charity do not reflect the reality.

In an effort to close the tax gap the IRS has come up with a new strategy. The strategy is to essentially subject tax preparers to penalties should teheir clients under report income or over report their deductions.

So how does this affect our clients:

1) We will be reminding everyone that they must have documentation for any charitable deduction they take. Documentation can be in the form of a letter from the charitable organization or a bank record.

2) We will have all clients sign a document that they do in fact have records of these contributions that can be produced in the event of an audit.

In other words, tax preparers should no longer be taking your word for these deductions as we are now on the hook with the taxpayer.

Some Third Ward Things You Should Check Out

We are located in Milwaukee's Third ward which has continued to be a changing area over the last few years. As we complete our first year in the area we wanted to promote a few businesses that we feel are worth the trip:

MILWAUKEE PUBLIC MARKET: It appears that they have finally figured out what they want the Market to be and the vendors have stepped up their game.

Ceriello's has opened up a Butcher's shop that is diverse and has some things that you just will not find in other stores, In addition to this upgrade they are also selling many items that you can take home and simply reheat as well as several pastas and olive oils.

The Spice House continues to be a great destination for anyone who takes cooking seriously. They have a great variety of spices that are hard to find elsewhere and we find the quality of the product to be better.

Kehr's Candy brings something unique to the area being a full service candy shop.

Add to all this a great bakery, fish shop and cheese shop and its a destination worth seeing.

COQUETTE CAFE: This restuarant consistantly rated in Dennis Getto's annual Top 30 list and it's easy to see why. The Food and Service are always top notch and the prices are very reasonable. It is an especially good destination for lunch.

THE IRISH PUB: I've been to Ireland and this Pub is a very close approximation to pub over there. They have all the requisite Irish beers and whiskey as well as a menu that is very authentic. County Clare in Milwaukee gets a lot of attention, but this spot is equally as good.

BREW CITY TEA: They have a tremendous assortment of loose teas on hand that rivals Teavana that can be purchased in bulk.

The Eagles, Exclusively at Wal-Mart?

The Eagles released their first CD of new material since the Carter Administration yesterday. What's unique about their release is that you can only get the CD at Wal-Mart or Sam's Club. As many of you know the Eagles are well known for taking shots against corporations and purport to be for the little guy.

Our company has tried to make it a core value to support local businesses. This is not because we feel that chain stores are evil, rather we feel that supporting the local vendor has a greater ecomonic benefit for the area. So when possible, we buy books from Harry Schwartz instead of Borders. We use Brew City Tea in our office instead of a national brand. We grab lunch at the Coquette Cafe instead of the Olive Garden.

When Local Music stores eventually die it will be for a variety of reasons, but a huge contributor to their death will be the artists (who say they are for the little guy) signing distribution deals like this.

Feds Cut Rates, Oil Prices Surge

Today the reserve cut their rate by 1/4 point. Other rates are generally impacted by this rate, so it continues to be a good time to be a borrower. Rates continue to stay low despite a weak dollar and other economic indicators that would generally suggest rates being raised.

The other trend to watch is the price of oil. A barrell of oil has surged past $90. It's hard to imagine this will not have a negative impact on fuel prices and will start to indirectly impact other prices.

Expect Larger Taxable Income From Mutual Funds in 07

One of the more difficult things to do as a tax planner is predict how much investment income a client's mutual funds will produce. According to a report in the Wall Street Journal it is expected that investment income this year will be at all time highs.

If you are tax planning with someone other than us, be sure that your plan recognizes that your mutual fund income could very likely be up 15% to 20%. It may also be helpful to contact your financial planner as they may have some insight as to what income your specific investments might produce.

Circore Suggestions For Increasing Your Website Rank In The Search Engines:

- Make sure your website is listed on all your print media
- Update your site at least once a month
- Let any groups/associations you are part of know about your site.
- You may want to offer reciprocal links. (I’ll add your’s if you add mine.)
- Buy Google Adwords: You can also designate a certain amount of $$ each month to paying for google search words which would increase your placement in the engines. You may want to look into Google Adwords (https://adwords.google.com/select/Login)to get more hits, too. Adwords is a program that lets you choose which words you want people to come to your site from, how much you will pay per click and what your budget is. So, a company like Circore may offer $.10 for "wisconsin marketing designer" and $.25 for "Milwaukee logo designer". Check out your competitors and see what they get high rankings for.

Last, but not least, you never know what a search engine will latch onto for keywords. It does come down to patience and getting folks to your site other ways than just via the search engines.

Thank you Elaine, Circore’s webmistress for helping Denise with this article. For other tips visit http://www.circore.com/web.htm

Circore’s Tips for Search Engine Optimization

Welcome to the wonderful, uncontrollable and unpredictable world of search engines. For the most part, you won't see your site showing up in the search engines for at least a few weeks after it has been placed into cyber space. It usually takes six weeks. The spiders (programs that read through sites and categorize them) have thousands of sites an hour to add. We always register the sites we create with some fun code to Google, which helps search engines to list you sooner than six weeks. If you had an old site and are replacing it with a new site, the listing where you showed up right away may be an older listing so it gets first dibs, so to speak. The longer your site is out there, the better it tends to do. You will also do better as you get more links to your site.

Your main page should have text that spells out key words you want searched. If you are a dental office, then the front page should have the word dental on it for example. While we have hidden keywords, titles on the pages, image descriptions and we register you with lots of keywords, sometimes just having a simple paragraph of text about you on the main page will give you a boost.

Maybe today you come up 6th on the page, tomorrow it might be 10th or 2nd. There is a lot of math involved in how search engines work. They look for best matches to what you have in the site. It is a mathematical match.

Swapping links with complementary businesses is a good way to up your placement in the search engines. Your name will come up higher depending upon how many other sites you trade links with or are referenced on other pages. Search engines look to see if your site is relevant and it measures relevancy by other sites referring to your site. Over time, your site will go higher or lower on the page based on how often the page is updated and how relevant it is. We have had clients who were high on the search engines at one time. Then they never update their site and they start to slide down. These other companies may be doing that. A lot is also influenced by your front page. If you have little text on the front page - it isn't going to come up very high as there is less for the search engine to match your most relevant page to. Search engines also look at headers.

Thank you Elaine, Circore’s webmistress for helping Denise with this article. For other tips visit http://www.circore.com/web.htm

Most Missed Tax Deductions

An article in the Wall Street Journal today highlighted the two most missed tax deductions in 2006.

The first one simply would not impact a Wisconsin taxpayer except in a very rare case. In 2006, the IRS allowed taxpayers to deduct sales taxes paid instead of state income taxes paid. As our State income tax rate is higher than the sales tax rate and it's hard to spend more than you earn, it's unlikely you paid more in sales taxes than you did in state income taxes. We used this deduction heavily in states that do not have a state income tax such as Washington, Texas, Florida and Tennessee.

The next is the phone excise refund that everyone was entitled to. Depending on your status you could get between $40 and $60 back. Thankfully, our software automatically took the deduction as did most tax software programs. However, if you prepared your return the old fashioned way you may want to take a look to see if you claimed this deduction.

Mike

AMT - Why it's a Problem

One tax that seems to annoy both Republicans and Democrats on an equal basis is the AMT (Alternative Minimum Tax). The AMT was designed several years ago to prevent the richest of taxpayers from shielding their income through deductions. Whether or not you think that is a fine tax policy, what cannot be questioned is that the tax no longer serves its original purpose. The bulk of the people I have seen that are impacted by the AMT are married taxpayers with a combined income of $100,000 to $175,000 that own a home and have a few kids. In fact, very few taxpayers who are "rich" are affected by the AMT as their tax rate exceeds the AMT tax rate and many of their deductions and exemptions are phased out by current tax law.

AMT computes an "alternative tax" by eliminating a taxpayer's exemptions, real estate taxes, state income taxes and a few other items. In place of these deductions the taxpayer is given a standard deduction that is subtracted from their income. The result of that calculation is then multiplied by a rate of 26% or 28% depending on the taxpayer's income and this tax is compared to what the tax would be under the regular system. The higher of these two taxes is paid.

So why are so many people getting hit by the AMT?

1) The standard deduction used in the AMT calculation has simply not been indexed for inflation over the years.

2) Over the years, state and local taxes have continued to go up and these are not allowed in the AMT calculation. Put it this way, your real estate tax bill is probably a lot higher now than it was 10 years ago. The AMT deduction has not recognized this simple fact.

3) Reagan's 1986 tax act actually closed several of the loopholes that allowed the super wealthy from shielding their income. That act put limits on the deductibility of passive income and contained other provisions that made it much more difficult to shield income.

There are a lot of proposals out there right now to eliminate or restructure the AMT, but it's hard to see anything being done because it's been a nice revenue boon for government. As it is an "alternate" tax it is not a simple supply side issue either whereby eliminating the tax or cutting the rate will spur increased collections. In other words, it's not a tax policy that influences a person's economic behavior that much. As the proposals come out, we'll look at the pros and cons.

Mike

New Radiohead CD

Radiohead has been one of the more influential bands over the last 10 years and they have just released a new CD (although CD isn't technically what they released, but that's what I'm used to saying). While the music is outstanding as usual, it is not the music that is newsworthy. Rather it is the way that Radiohead has chosen to release the music.

You can only download the music from a website, www.inrainbows.com. What's more, you can name your own price to do the download. If you want to pay $1, you are perfectly able to do that.

If this works, we could see an acceleration in the way music and other media is distributed. Why split the profits with the record store, Itunes or record company when you can set up an website and keep all of the profits yourself?

The only qulam I have with this is I believe this is the death knell of the independant music store if they were not already dying a slow death. It is hard enough for these companies to compete against the Best Buy's and Itunes of the world, but having a best selling artist like Radiohead bypass selling CD's entirely certainly cannot help them. In fact, if record stores are to die, I put the blame squarely on the artists. Several artists put exclusive songs on services like Itunes or sign exclusive distribution deals with places like Starbucks or Target. If you are a fan of an artist it has become increasingly difficult to get all of their music at a record store. Just something to think about the next time an artist is talking about being for the little guy.

Mike

Capital Gains - Should you sell now?

One of the biggest questions I have been getting as we start this tax planning season is whether or not the client should sell a capital asset this year or continue to hold onto it. As you may know the capital gains tax is levied on the sale of property such as stock and real estate.

Why is this question coming up?

Currently, the capital gains tax is 15% for any asset held longer than one year. Without offending anyone's political sensibilities all the major Democratic presidential candidates have proposed raising the rate. Clinton is on record for bumping the rate to 20% and Obama and Edwards both favor a 28% plan. It's reasonable to expect that any of these candidates could win in 2008 and they could have a Democratic congress to work with. So it is realistic to think that the rate might go up to 28% by 2009.

Here's the question I have been asking clients: Is this an asset you want to sell? If the answer is yes, by all means the client should sell the asset and pay the tax this year. My reasoning is that I know one thing to be true right now and that is capital gains are at the lowest rate they have been since I've been doing taxes. I don't forsee a scenario where the rate will go down, but I can envision a situation where the rates jump back up to 28% in the very near future.

Mike

Like Kind Exchanges

In an article that appeared yesterday in the Wall Street Journal, the IRS has indicated they would be examining like kind (Starker) exchanges much more closely in the coming years. It was also noted that the IRS is planning on issuing further clarification on what qualifies for a like kind exchange. For example, is an apartment building and a piece of land similar enough to qualify for the tax deferral? Right now, opinion would be split amongst tax professionals.

A like kind exchange allows a taxpayer to defer a gain on a property they sell provided that they purchase an asset that is alike in nature. In order to qualify for this tax treatment, several steps must be followed correctly and I advise the use of an attorney in these transactions to ensure that all of the i's are dotted and t's are crossed.

The important thing to keep in mind is that if you choose this tax treatment be sure that you have the proper documentation. The IRS has noted that many taxpayers simply have not documented their transactions properly and this has been a concern for them.

The issue of like kind exchanges is likely to become a larger issue if the Capital Gains rate is raised in the next few years as more taxpayers will seek to defer their gains.


Mike

LIBOR - An Interest Rate Alternative

If you are concerned about the volatility of the current interest rate markets one alternative is to tie your loan to LIBOR (London Inter-Bank Offered Rate). Generally a bank will charge a borrower 2.25% premium over that rate in offering a loan depending on the borrowers credit worthiness. Over the course of the last 10 years the this rate has been pretty close to the prime interest rate that many borrowers have used.

So what's the point in considering LIBOR? In my opinion, LIBOR has tended to be a more stable rate throughout history. It tends not to have the peaks and valleys of our prime interest rate and may be a good vehicle for a borrower who is concerned about interest rates rising.

Mike

Interest Rates

As many people know the Federal Reserve has recently cut their interest rates. A cut in their interest rates generally triggers a drop in the rates that banks offer for business financing so many people have asked me whether or not they should wait to lock in their loans.

While no one has a crystal ball when it comes to rates, I think the following needs to be taken into consideration:

1) Interest rates are still relatively low when viewed through in a historical context.

2) Other economic factors such as the weak dollar seem to indicate that rates should rise in the upcoming years. It is though that the "cheap" money that has been offered through low interest rates has devalued the dollar.

3) It would appear that commodity prices will be rising over the years and to offset potential inflation, the Reserve tends to raise rates.

4) We are heading into an election year and it seems that the Reserve tries not to rock the boat too much during these times. It is very possible the the Reserve may make changes to their rate, but I don't think we will see anything overly dramatic.

Again, no one has a crystal ball when it comes to this stuff, but if I were to take out a business loan my tendency would be to try and lock a rate for a period of 5 years as I believe their is a greater chance of rates rising than falling during that period.

Mike