balance sheet

the winter newsletter

balance sheet

the
president’s
message
Welcome to the first edition of our client newsletter. We have some
really interesting information to pass along to you, but first I’d like to
introduce my staff. Key staff is critical for success and I think I have
a publication of the very best.

Caroline Huebert, CPA and I have been working together since

October 1983. She is responsible for handling the easiest questions
to the most challenging tax, accounting and auditing issues. Feel free
to call her with any of your accounting or tax questions. She is just at
David E. Harris the other end of the telephone.
President/CEO
David E. Harris, CPA
Mary Ivester, our office manager, has been with us for 21 years. She is
Accountancy Corporation the first person you speak to when you call the office. Married with
two children, Mary and her husband, Hal, enjoy their weekly bowling
league.

Mike Tyrcha, CPA was hired in January 2006. He has a great deal of
545 E. Alluvial Ave., #113 experience in the food and beverage industry. In addition, he is our
Certified QuickBooks Pro advisor. He’s the go-to guy when it comes
Fresno, CA 93720-2826 to QuickBooks questions.

• Tom Harris (yes, he’s my son) started with us in April 2007 and is
currently preparing to sit for the CPA exam later this year. Tom is
fresno responsible for new business development. Don’t hesitate to call him
559-431-4205 if you know of someone you feel could use our services.

• In this first edition of our newsletter we are shining the spotlight on

our community, highlighting an organization that is providing a
fascimile
valuable service for the young boys and girls of Fresno and the
559-431-0927
surrounding communities.
• Len Ross, his wife Vel, and their son Randy, operate the Fresno Greater
monterey San Joaquin Valley Junior Golf Foundation. Randy Ross is the execu-
831-649-4451 tive director of the Foundation and is great working with the kids.
There is a dedicated group of volunteers helping out with the
• Foundation center on Teilman Ave.

www.deharriscpa.com The Foundation is always looking for donations of cash and used golf
clubs. Please call me if you can help in any way.
Fresno, CA 93720-2826
545 E. Alluvial Ave., #113
I look forward to a new year together…
Accountancy Corporation
David E. Harris, CPA
 the balance sheet
Office Buzz FAQ
Here at the office we are currently gearing up for tax season. We’ve been What’s the deal with my 2008 CA
state tax refund?
working hard finishing our year end engagements in preparation of the If we can be of service to
upcoming tax deadlines. We’re excited to be starting some new ven- As of February 1, the CA State someone you know, we would
tures, offering bookkeeping services to our clients, as well as providing Controller has announced that 2008
clients with a new avenue for obtaining mortgages and refinancing tax refunds will be delayed 30 days appreciate the opportunity
options. If you’d like to know more about these services, please call our
for personal income tax and business to discuss how we can help.
Please allow our firm the
entity taxpayers. This is necessary
office at (559) 431-4205. due to the current economic crisis
and budgetary issues in the state of privilage of doing so by
tax tip California. For more information and
the latest updates, please visit providing us with a name
For our first newsletter tax planning tip, the experts at money must be added back to income to offset the full
www.ftb.ca.gov. and phone number of the
DEH thought it would be pertinent to mention some of deduction of the lease payments. The amount depends person to contact regarding
the benefits to Internal Revenue Code Section 179, the
“Election to Expense Certain Depreciable Business
on the year the auto expense is being deducted. There
are no deduction limitations to vehicles over 6,000 lbs.,
an appointment.
Assets.” If you have enough income, you can use Sec. which usually includes most SUVs. The allowable
179 to expense certain depreciable assets and deduct amount of the cost of an SUV that can be deducted as
the expense on your tax return. There are, of course, Sec. 179 cannot exceed $25,000; however, the rest of
restrictions and limitations that go along with this the cost can be deducted as depreciation over the class
deduction. The taxpayer cannot create or increase a life of the vehicle. The dollar limitation on the federal
loss with the deduction, for one. The asset must be return deduction for the current 2006 tax year is up to
purchased in the current year and can only be $108,000. The taxpayer can deduct any amount up to Contest Corner
expensed once. Section 179 property must have a that $108,000. This limitation does begin to phase out
useful life of 15 years or less, therefore real property like if the cost of the asset(s) is greater than $400,000 for Find the typo and win a $25 gift card to
homes, land, & improvements to either do not qualify. federal purposes ($200,000 for state). If the item one of our favorite places. Be the first
In addition, there are limitations to luxury autos and exceeds these thresholds, the amount of the deduction to call in and win!
how much can be deducted on the tax return. The IRS ($108,000 or less) is reduced by one dollar for every
defines a luxury auto as any vehicle costing more than dollar over the $400,000 cost threshold.
$15,000. For these “luxury autos,” a certain amount of

Mary Ivester Caroline Huebert, CPA Michael Tyrcha, CPA Thomas Harris
Office Manager Sr. Account Manager Account Manager Account Executive
Client Development

.
sheet Spotlight on Community:
The Fresno-Greater San Joaquin Valley Jr. Golf Foundation
The Fresno-Greater San Joaquin Valley Jr. Golf Foundation is a chari-
table, non-profit corporation dedicated to teaching the game of golf to
underprivileged youth, and is available to any and all youngsters with
the desire to learn the game.
The foundation strives to provide a positive environment for youth
living in challenged neighborhoods, and to instill in the minds and
hearts of all youth they come in contact with that all people are created
equal. All are given mutual consideration and opportunity. The
foundation is dedicated to the belief that the lessons golf instills –
courtesy, discipline, sportsmanship, and compassion – will create a love
and understanding among junior golfers.
The organization began as the dream of one man, Mr. Len Ross. Grow-
ing up, he earned money by caddying at local golf courses, where he
managed to acquire a few golf clubs and learned the game by watching
and listening. In college, Len again pursued his love of golf, recognized
as the captain and cofounder of the first lettered golf team at CSU
Fresno. Len believed that golf taught many lessons about life – honesty,
integrity, sportsmanship, compassion – in a healthy environment. It was
after an encounter in his early years with two little boys outside a local
golf course simulating a golf game with sticks that Len’s dream for the
foundation was born. He then made the decision to ensure that golf
was available to all children desiring to learn the game.
Len first created a tournament for junior golfers. In 1947, with the help
of Grant Halstead, the first Fresno City Junior Amateur
Championship was held during spring vacation. Eventually, the
tournament was renamed the “Len Ross Fresno City Junior Golf Amateur
Championship”. The popular tournament has now progressed into a 4
day tournament on 7 local golf courses with 8 flights, the final round
alternating among the local country clubs. Children not having reached
their 18th birthday are eligible, and children as young as three years old
have participated.
In 1972, while also working full time as an educator in Fresno Unified
School District, Len and two others co-founded the Junior Golf
Association of Northern California, which presently has a membership of
over 2000 youth. Since that same year, Len has also been a USGA Junior
Committeeman, responsible for the annual U.S. Junior Amateur
Championship qualifying held in Fresno.
Despite his many accomplishments making the game of golf
available to children, Len still felt that it was not truly available to
all boys and girls in the San Joaquin Valley. He was particularly
concerned about those who were falling through the cracks and
needed an activity such as golf and the many lessons it teaches.
Len soon realized that essentials such as equipment, instruction,
and course access were missing for these kids. Unable to
accomplish such a feat alone, Len sought help. After many years,
through the help and encouragement from many, the
Fresno-Greater San Joaquin Valley Junior Golf Foundation was
finally formed in March of 1992.
It began humbly but earnestly, conducting six-week clinics at local
elementary schools and driving ranges in its effort to make junior
golf available to all youth. Through the generosity of many caring
individuals and organizations, the foundation was able to stockpile
enough equipment for schools and any child not having the
necessary funds to purchase their own. Yet, it soon became
increasingly difficult for the directors to travel to and from schools
lugging equipment, thus, the need for a center became prevalent.
Building a center for the foundation was no easy task. Challenges
with finding a location and raising funds, arose. After many
disappointments, success prevailed. In 2002, the perfect site was
found at 1604 S. Teilman in Fresno, sufficient funds were finally
raised, and the center eventually opened its doors to any and all
youth wishing to learn the game of golf.
The Fresno Junior Golf Learning Center is free for all youth, includ-
ing the physically challenged and blind. There are no membership
dues, and directors volunteer their services – the center is funded
through grants and donations. The center boasts a classroom, a
putting green, a driving range, and equipment for each child. There
are currently three tournaments for junior golfers to be involved in:
The Len Ross-Fresno City Jr. Amateur Championship, The CA State
Junior Amateur Championship, and The US Junior Boys Champion-
ship – Qualifying, the Fresno qualifying tournament for USGA.
The foundation is a family affair, run by Mr. and Mrs. Ross and their
son Randy. As it continues to grow, it is always in need of funding
and volunteers. If you’d like to help, please contact the Fresno-
Greater San Joaquin Valley Jr. Golf Foundation by phone at
(559) 255-7126, or by email at jrgolf1188@aol.com.
“Golf is truly a game of life, and my
only regret is that I do not have another
58 years to devote to junior golf.”
– Len Ross
 the balance
White House and Congress start work on
economic stimulus package
Congress and the new Obama Administration are working to quickly
enact a massive economic stimulus package to jump start the U.S.
economy. Democrats in the House and Senate have unveiled an $816
billion stimulus package including roughly $275 billion in tax
incentives. The fact that Democrats control both the House and the
Senate should speed delivery of a final stimulus bill to the White House
before the end of February.
Economic Recovery
Coming into office, President Obama pledged to make an economic
recovery his number one priority. The federal government will spend
billions of dollars on infrastructure projects, in aid to state and local
governments and in job creation programs, especially in alternative
energy.
Second in size to the spending component of the stimulus bill is the tax
cut package. Although Congress is still debating the number and scope
of tax incentives, lawmakers are likely to settle on a mix of individual
and business tax breaks.
Individual tax incentive
Individuals will likely benefit from a temporary payroll tax cut along with
enhancements of existing tax breaks. Democrats have proposed a new
Making Work Pay tax credit, which would reduce payroll withholdings
for lower and middle income wage earners. The credit would reach
$500 for eligible single taxpayers and $1,000 for married couples.
Democrats would also create a new partially refundable $2,500 tax
credit for each year of post-secondary education, lower the floor for the
child tax credit and enhance the earned income tax credit.
Similarly, Republicans in Congress have also proposed some individual
tax cuts. Their proposals include repealing the alternative minimum tax
(AMT) and increasing the child tax credit to $1,000.
Marginal tax rates
Seven years ago, Congress lowered the individual marginal tax rates
and created the new 10 percent rate. The highest rate, at 39.6 percent
gradually fell to 35 percent, where it is at today. The lower rates,
however, are temporary and will expire after 2010.
Obama has promised to renew the lower rates for all but high income
individuals. The top two old rates (39.6 and 36 percent) would return
after 2010 if not sooner.
At this time, it is unclear if the economic stimulus bill will restore the top
two old rates. Some senior Democrats in the House want the bill to
immediately raise the top individual marginal tax rate to 39.6 percent.
However, Republican opposition could postpone the increase until after
2010.
Business tax breaks
Unlike past tax cuts, this one is not expected to be heavy on business
tax incentives. Congress will likely extend bonus depreciation and
increased Code Sec. 179 expensing as well as provide for a five-year,
rather than two-year, carryback of net operating losses. The latter
provision would generate refunds for cash-strapped businesses.
Before taking office, Obama proposed a tax break for employers that
create or retain jobs in the U.S. Obama appears to have backed away
from this proposal after many lawmakers said it would be very difficult
for the IRS to determine which employers would qualify for the tax
credit.
Republicans are expected to push for a reduction in the corporate tax
rate. During the campaign, President Obama supported lowering the
corporate tax rate in exchange for closing unspecified corporate tax
“loopholes.”
Energy
Consumers and businesses can look forward to enhanced and extended
energy tax breaks. Congress is expected to significantly expand the
current tax incentives that encourage the development and produc-
tions of alternative energy, such as solar, biomass, and wind energy.
These tax breaks are connected to Obama’s plan to create new “green
collar” jobs in alternative energy.
Retirement savings
Many individuals have seen the value of their retirement savings
plummet in recent months. There is little Congress can do, if anything,
to restore value to these accounts. However, it has already suspended
required minimum distributions from IRAs, 401(k)s and similar arrange-
ments for 2009 and could extend that treatment to 2010. Some
lawmakers have also proposed relaxing the rules for early distributions
from IRAs and similar plans so cash-strapped individuals can access
these funds for non-retirement purposes.
Capital gains
Congress lowered taxes on capital gains and dividends in 2003 and
renewed those cuts in 2006. The top rate on capital gains and dividends
is 15 percent. A zero percent rate is available for individuals in the 10
and 15 percent income tax brackets. These lower rates are temporary
and will expire after 2010. Although many Democrats in Congress are
not keen on the lower capital gains and dividends tax rates, they are
unlikely to push for an accelerated sunset date.
If you have any questions about these or any economic stimulus
proposals, please contact our office. We’ll keep you posted on any
developments.
 the balance sheet
Office Buzz FAQ
Here at the office we are currently gearing up for tax season. We’ve been What’s the deal with my 2008 CA
state tax refund?
working hard finishing our year end engagements in preparation of the If we can be of service to
upcoming tax deadlines. We’re excited to be starting some new ven- As of February 1, the CA State someone you know, we would
tures, offering bookkeeping services to our clients, as well as providing Controller has announced that 2008
clients with a new avenue for obtaining mortgages and refinancing tax refunds will be delayed 30 days appreciate the opportunity
options. If you’d like to know more about these services, please call our
for personal income tax and business to discuss how we can help.
Please allow our firm the
entity taxpayers. This is necessary
office at (559) 431-4205. due to the current economic crisis
and budgetary issues in the state of privilage of doing so by
tax tip California. For more information and
the latest updates, please visit providing us with a name
For our first newsletter tax planning tip, the experts at money must be added back to income to offset the full
www.ftb.ca.gov. and phone number of the
DEH thought it would be pertinent to mention some of deduction of the lease payments. The amount depends person to contact regarding
the benefits to Internal Revenue Code Section 179, the
“Election to Expense Certain Depreciable Business
on the year the auto expense is being deducted. There
are no deduction limitations to vehicles over 6,000 lbs.,
an appointment.
Assets.” If you have enough income, you can use Sec. which usually includes most SUVs. The allowable
179 to expense certain depreciable assets and deduct amount of the cost of an SUV that can be deducted as
the expense on your tax return. There are, of course, Sec. 179 cannot exceed $25,000; however, the rest of
restrictions and limitations that go along with this the cost can be deducted as depreciation over the class
deduction. The taxpayer cannot create or increase a life of the vehicle. The dollar limitation on the federal
loss with the deduction, for one. The asset must be return deduction for the current 2006 tax year is up to
purchased in the current year and can only be $108,000. The taxpayer can deduct any amount up to Contest Corner
expensed once. Section 179 property must have a that $108,000. This limitation does begin to phase out
useful life of 15 years or less, therefore real property like if the cost of the asset(s) is greater than $400,000 for Find the typo and win a $25 gift card to
homes, land, & improvements to either do not qualify. federal purposes ($200,000 for state). If the item one of our favorite places. Be the first
In addition, there are limitations to luxury autos and exceeds these thresholds, the amount of the deduction to call in and win!
how much can be deducted on the tax return. The IRS ($108,000 or less) is reduced by one dollar for every
defines a luxury auto as any vehicle costing more than dollar over the $400,000 cost threshold.
$15,000. For these “luxury autos,” a certain amount of

Mary Ivester Caroline Huebert, CPA Michael Tyrcha, CPA Thomas Harris
Office Manager Sr. Account Manager Account Manager Account Executive
Client Development