This newsletter is our first newsletter to be sent to you electronically. Our goal is to provide information that will help you take the necessary steps to save tax dollars by taking advantage of the rules and regulations that surround the Tax Law and Regulations. We will send these e-mails to you on a regular basis as well as posting them to our internet site, www.agmtax.com. If you do not want to receive these letters, please send a return e-Mail to nothanks@agmtax.com requesting that you be taken off our mailing list.

We see the same economy you do. We know it is getting hard to make ends meet for lots of folks. Our employers are often on the ropes and our investments are losing value nearly every day. We can’t do much about the lagging economy, but we at AGM will hold our prices in line for your 2008 tax returns. So, if your Income Tax return(s) are substantially similar to their 2007 version, our fee to you will not increase for your 2008 returns. We look forward to continuing to serve your income tax needs for years to come.

"What records should I keep ?" and "For how long ?" are questions we hear regularly. There is no real good, short answer, but general rules work for most of us. You should keep a copy of all income tax returns forever. The IRS may say, at any time, that you did not file a particular return. It becomes your problem to prove that you did. A copy of the return you filed is a good start. In most cases, the IRS may only question a return for three years from the due date of the return or the filing date, whichever is later. However, Georgia can assess additional taxes up to five years after your return is filed. So, five years after April 15 for a timely filed return or the actual filing date of late filed returns, you may dispose of documents relating to that return. You must keep records of incomplete transactions–such as a home purchase or improvements, stock transactions, IRA’s, and business or rental property–until three years have passed from a closing transaction such as a sale.

Regardless of our first story, this may be the best time in years to purchase a new home. Inventories are up, prices are down, and sellers are in the mood to sell. Why are all of these things happening in these troubled times ? No buyers…. In an effort to stimulate the purchase of homes, Congress has a new tax credit in the recently enacted Housing and Economic Recovery Act of 2008 for "first time" home buyers. For homes purchased after July 1, 2008 and before July 1, 2009, if you qualify as a first-time buyer, you can receive a $7,500.00 refundable tax credit if you purchase a new home. See our Internet site article, TAX CREDIT FOR HOMEBUYERS.htm

Many of you used Pro Diem or Flight Line Data Services (FDS) per diem reports last year. In fact, we encouraged many of you to do so. We have received reports of increased interest in the expense allowance claims of flight crew members on their 2006 tax returns. Over 100 American Airlines flight attendants are speaking with the IRS about this issue. Recently three of our clients have received audit notices concerning their per diem expenses as reported on previous year tax returns. That is a very large percentage of our sample size considering that we don’t see many more audit notices than that in a normal year for all reasons! All three crew members had per diem reports as prepared by their airline or an outside service. All have now completed the audits and they resulted in "no change," which is what we want as an outcome.

In the past, we have calculated allowable per diem amounts from your records–be they a kitchen calendar, logbook, printed flight logs or some other record–like your memory--in our office for you. We have told you we erred to the conservative side in our calculations. We usually urged you to get a more accurate report prepared. With the higher risk of audit, we strongly suggest a prepared report. We have seen many FDS and Pro Diem reports and believe them "audit proof." Your "best guess" at your layover cities will not be sufficient for the preparation of your tax returns in the future. To lock down your deduction, you must provide us with either a report prepared by FDS or a similar service OR computer printouts from your airline showing the dates, layover locations, and times of arrival and departure.