TaxCoach Briefs:    July 31, 2008

Volume 3, Number 31

• Marketing Minute: "Dog Day" Marketing
• Client Alert: Housing Act Tax Provisions
• Updated Content: Housing Act Tax Provisions

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MARKETING MINUTE (EAL)
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"DOG DAY" MARKETING

While I was driving to work this morning, I heard the radio announcer say that we're in the "dog days" of summer. I wanted to ask my Guatemalan Wiener dog Agador exactly when they started, but he was back home lying on a cool hardwood floor with his eyes closed and his tongue hanging out. No help there. So I checked Wikipedia, and saw the "official" start date, according to the Old Farmer's Almanac, was actually July 3. There's your trivia for the day.

Summer is usually a slow time in our business. Kids are out of school, clients are taking well-deserved vacations, phones are quiet (or at least quieter than usual), and the pace is easy. So we'll keep this week's Briefs short so you can enjoy your afternoon siesta.

You might think that since the "dog days" are a slow time to work, they're also a slow time to market. But you'd be surprised how much business you can find while your competitors take their siestas.

Here are five good reasons you should be marketing tax planning services now:

1. Your competitors aren't marketing. During "the season," everyone competes for the same clients -- the same new homeowners, the same new businesses. It's hard to stand out from the crowd. But now, in the middle of the "dog days," even a weak message stands out.

2. If prospects you reach are unhappy with this year's returns -- either because they paid too much or service was lousy -- your message will reach them now, while they're still stinging.

3. You can lock in new clients now, before your competitors gear up to get them next year. TaxCoach is particularly valuable here. Without TaxCoach, you can meet a client today, "wow" them with your knowledge and skills, and plan on seeing them in March -- yet still lose them to a competitor's marketing next year. With TaxCoach, you can prepare a proactive plan today, get paid now, and virtually guarantee they'll come back next year to implement it.

4. You emphasize your commitment to year-round planning and proactive service. Clients often perceive taxes as a once-a-year transaction, not a year-round process. Marketing during "the season' does nothing to change this attitude. We can tell clients in April that we're committed to planning in August -- but actually marketing it now emphasizes that commitment.

5. You can still create a sense of urgency to act now. Giving them a deadline or reason to act now is crucial to closing engagements. We think of April 15th as an obvious deadline and, to a lesser extent, December 31. But there's another deadline looming soon that prospects aren't thinking about, and that's September 15, when third-quarter estimates are due. If your prospect pays estimated taxes, you can give them a shot at saving money just six weeks from now -- if they act before then.

Now -- take a look back at each of those five benefits and see what word I've emphasized. Pay attention to it, because your competitors aren't. Act on it, and you'll get the new business your competitors won't!

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CLIENT ALERT (EAL)
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HOUSING ACT TAX PROVISIONS

On Wednesday, July 30, President Bush signed the “Housing and Economic Recovery Act of 2008.” While the bill focuses on protecting lenders and preventing foreclosures, there are three tax provisions worth reporting to clients.

1. The new law gives “first-time homebuyers” (those who have not owned a principal residence within three years) a refundable tax “credit” equal to 10% of the home’s purchase price up to $7,500 ($3,750 for married individuals filing separately). The “credit” is available for purchases from April 9, 2008 through June 30, 2009. But – if clients take the “credit,” they have to repay it, in equal installments, over the next 15 years. So it’s really just an interest-free loan, not a true tax credit. It phases out for single taxpayers with “modified adjusted gross incomes” between $75,000 and $95,000 ($150,000 to $170,000 for married couples filing jointly).

2. The law creates a temporary deduction, for 2008 only, for property taxes for non-itemizers. The deduction is limited to $500 ($1,000 for married couples filing jointly).

3. Finally, the law eliminates tax breaks on the sale of your principal residence for periods you don’t use it as your principal residence. Under old law, you could take a rental property or vacation home, use it for at least two years as your primary residence (five years if you acquired it in a Section 1031 exchange), then sell it and exclude up to $250,000 of gain from your income ($500,000 for married couples filing jointly). This held true even if most of the gain occurred while you were renting the property or using it as a vacation home. The new law taxes you on any gain after 2008 attributable to periods you don’t use it as your primary residence.

When you click on the 'Client Alerts' button in TaxCoach, you'll see a list of alerts, with this latest on top. The file 'housetax08.doc' contains letters addressed to each of your clients who indicate they don't currently own their home or who indicate they own a vacation home.

You can download the file to your system, and print on your letterhead using MS Word, or any word processor which supports Rich Text Format ('RTF'). You'll find instructions on the Client Alerts page.

As always, whether or not your clients will be materially affected by these changes, hearing the news from you reinforces the value of your service and your relationship. Feel free to call us if you have questions.

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UPDATED CONTENT (EAL)
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HOUSING ACT TAX PROVISIONS

Yesterday, just hours after President Bush signed the 2008 Housing Act, we updated the system to incorporate the first-time homebuyer credit and reduced home sale exclusion provisions. You'll find information on the first-time homebuyer credit in the "own Your Home" module in the "Family, Home, and Job" Section. And you'll find information on the reduced home sale exclusion in the home sale module in the "Cashing Out" Section.

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We're happy to answer your questions on TaxCoach content, features, or marketing. While we give first priority to our All-Star and Hall of Fame members, we work to answer all questions. For best response, email support@taxcoachsoftware.com. If we can't answer immediately, or we think the answer will be useful to all of our members, we'll publish it (anonymously) here in the 'Member Q & A' section of TaxCoach Briefs.

Regards,

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