Non Tax Related Points of Interest

Published on Tuesday, December 28, 2010

Happy holidays and (almost) New Year. If your holiday break is anything like mine you don’t mind getting back to the office. Don’t misinterpret the meaning of that comment however as I said “don’t mind”. This is different than “can’t wait” or “look forward to”. Hopefully everyone looks forward to the holidays like I do. Festivities, family, friends, food and drink (I don’t know a word for drink starting with “F”). All of these are enjoyable; especially the family and friends part because you get to see those who you may not otherwise see as regularly. But you can’t argue that the holidays are busy and tiring. Hence my comment about not minding getting back to the office. Lots to do around the office as we, and most CPA firms, are planning and preparing for another “tax season”. Making lists, checking them twice, preparing tax estimates for clients who have been naughty and nice.

Much gets written about yearend tax planning and other tax-related action to take before the New Year arrives. There is no shortage of that type of commentary. Our representatives in Congress have outdone themselves this year in waiting until the last minute to finalize legislation that had been expected. Consequently you can find a wealth of articles on the internet and in paper media dealing with things to do before the end of the year (what’s left of it) and interpreting the new law. The Internal Revenue Service just recently announced they won’t be able to begin processing certain types of tax returns until February. That may be a good thing. For those of you who receive 1099’s from brokerage houses, it has become commonplace over the past few years to receive the first 1099 version in late January and several other “corrected” versions in February and March. Perhaps if the IRS could hold off processing returns until May or June, more CPA’s would be able to enjoy the ski season.

I thought I would provide a few non-tax related thoughts today. Things that don’t get the headlines and are often overlooked. First, go to the website of the Idaho State Tax Commission. Along the left hand side of the home page you will find a list of links. The last link is “Unclaimed Property”. Click on this and follow the yellow brick road to where you can search for treasure. If you have never checked into whether or not you have unclaimed property being held by the state, you might be surprised what Idaho has been holding for you all these years. If you do not live in Idaho, your state’s tax commission or department of revenue should have a similar department.

Next, record retention. With all your spare time over the holiday you may have noticed the large amount of paper being stored someplace in your home or garage. Even your office. I usually recommend generally that “records” be retained for 7 years. There are important exceptions however. For instance, if you own a piece of investment real estate that was purchased 15 years ago you should retain all the records related to its acquisition, improvements and other basis-related items for at least 3 years after the property is sold. Bank statements, canceled checks, invoices, etc. should fall into the category of records that can be tossed. I would strongly suggest however that you check with your advisor on specific types of records. Also please be aware that the IRS website advises that you keep your records indefinitely if you file a fraudulent tax return (I’m not making this up).

Last, if you are an employer and have a SIMPLE or SEP plan for your business and employees, Publication 4284 and Publication 4285 are annual checkup “checklists” you can use to make sure the plan is being administered correctly and to identify problem areas. SIMPLE and SEP plans are popular because of their lack of administrative burden and cost. Unfortunately, they can be complex but without a third party administrator, decent guidance can be difficult to find. These publications put out by the U.S. Treasury Department might be useful.