TaxCoach Briefs:    April 12, 2007

Volume 2, Number 15

* Marketing Minute: The Flip Side of the 'Tax Gap'
* Correction: Last Week's Marketing Minute
* Subscriber Q & A: Selecting the New 'Clergy' Module

TaxCoach Briefs archives . . .

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TAX STRATEGIES FOR MEDICAL EXPENSES
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Are you showing your self-employed clients how to use a Section 105 Medical Expense Reimbursement Plan to deduct family medical costs as business expenses? If not, they may be leaving thousands in tax dollars on the table. And you may be losing even more in referrals! Your TaxCoach subscription includes template plan documents, enrollment and reimbursement forms, and even a 'due diligence' kit with IRS guidance. If you're not already a subscriber, click here for your 30-day trial.

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MARKETING MINUTE
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THE FLIP SIDE OF THE 'TAX GAP'

Once again, USA Today, 'The Nation's Newspaper,' offers fodder for this week's Briefs. This time, it's the April 11 lead editorial, 'When cheaters evade taxes, everyone else fills the gap.' The discussion outlines how cheaters of all shapes and sizes cost the Treasury an estimated $300 billion per year -- and how that uncollected tax could wipe out the 2007 budget deficit, finance the war in Iraq, or cover the federal commitment to Hurrican Katrina relief.

I've discussed this tax gap in my seminars. But as with most debates, there's a flip side. How much tax do you think Americans overpay because they don't take advantage of the planning and preparation strategies we can offer? Do you think it replaces some, or even all, of that revenue the cheaters don't pay? And how can you show your tax and financial planning clients how you keep them from paying more than their fair share?

The USA Today editorial offered these examples of tax cheats:

* plumbers, electricians, farmers, restaurants, and gift shops underreporting their business income

* investors underreporting capital gains

* Ebay sellers failing to report auction income

But consider these clients who pay more than their fair share:

* the real estate agent who claims $6,000 in car expenses using the mileage allowance -- who could claim $8,000 using actual expenses

* the Ebay seller who enlists her teenage daughter to create web pages for her auctions -- but who fails to pay her to shift income to be taxed at the daughter's lower rate

* the plumber who enlists his wife to keep his books -- but who fails to set up a medical expense reimbursement plan and write off his family's medical bills as a business expense

When I'm home, I read The New York Times and The Wall Street Journal. I don't read USA Today unless I'm traveling -- generally because it's USA Today sitting outside my hotel room door. Yet I admit, almost every time I pick it up, I find something I can use in my business.

(Years ago, when I had just left Dick Cheney's office and was still in law school, I had lunch with talk-show host and former mayor of Cincinnati Jerry Springer, at a function for the Cincinnati law firm where I was clerking. Jerry appreciated my take on the newspaper 'pecking order' at the time - specifically, that the people who read The New York Times run the country. The people who read The Washington Post think they run the country. The people who read The Wall Street Journal think the people who own the country ought to run it. And the people who read USA Today don't care who runs the country as long as the weather map is in color.)

But no matter what paper you read, the next time someone mentions the 'tax gap,' remind him that Americans may pay just as much, or more, in taxes they don't legally have to pay. Then tell him how your tax planning services saves him from being the one filling in that tax gap!

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CORRECTION
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In last week's Marketing Minute, we stated that 'the Justice Department is trying to shut down 125 Jackson Hewitt offices that they claim were responsible for filing false returns with over $125 million in bogus deductions.'

In reality, the bogus deductions figure is $70 million - the 125 was a typo from the number of offices. Sorry about the confusion, and thanks to Briefs readers who pointed it out to us.

The song remains the same, however - your clients will appreciate the difference between 'proactive' and 'aggressive.' They'll be happy to hear that you're saving them money, but staying on the conservative side of the line, with 'the good guys.'

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SUBSCRIBER Q & A
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Q: Hi Keith - I need to run a plan for a minister. How do I get the Clergy Module included?

A: Hi - good to hear from you. For the module Tax Strategies for Clergy, you just have to select it manually. (There aren't any questions in the client info that will trigger it). It's at the bottom of the Family Home & Job section on the Reports screen. Same with the Military module.

Just in case it would help, let me review the process:

Clearer than mud, hopefully? Don't hesitate to call or email if you need help!

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We're happy to answer your questions on TaxCoach content, features, marketing, or general taxation. Call the support line at 513/321-2820, or email support@taxcoachsoftware.com. If we can't answer immediately, or we think the answer will be useful to all of our subscribers, we'll publish it (anonymously) here in the 'Subscriber Q&A' section of TaxCoach Briefs.

Regards,

Ed Lyon
Keith VandeStadt
www.taxcoachsoftware.com

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