Year End 2008

Wow—how I hate this cliché—but it is so true! Where has the time gone? 2008 has been a wild year. The alpaca industry continues to provide us with a very good living despite the issues with the economy. Prices may be a tad softer than a year ago but they are holding strong and continue to prove that the industry is and will remain viable.

For those of you who have been to our farm--here is an unusual shot--and it also displays what the alpacas on the Oregon coast think of snow. If you look really close you can see a couple of heads--but when there is snow they only seem to venture out to the pastures when the sun does.

This blog update is mainly made up of tax issues—not a surprise this time of year. The provision that continues to be one of the largest tax benefits all small businesses enjoy is Section 179. You only have four more days to take advantage of the increased deductions available in 2008. The limit for this year is $250,000 on qualifying asset purchases not exceeding $800,000. That deduction will be reduced to $133,000 on qualifying asset purchases not exceeding $530,000 next year.

Also available in 2008 is the 50% bonus depreciation deduction. There is no similar provision for 2009. This deduction only applies to new asset purchases. A maiden female alpaca qualifies as new for this deduction.

So review your tax position and seize the opportunity to take full advantage of these deductions before the clock strikes midnight on the 31st. It is not too late. Should you make the decision that buying your first alpaca or adding to your existing herd is the correct move for your particular tax situation be assured that contracts can be finalized up until that time. Much of the work can be accomplished via email, phone and fax. You do not need to take possession of the animals by midnight on the 31st.

If you have questions about any of the topics in this update feel free to contact us—we don’t want you to miss out on a single deduction.

Enjoy the remainder of the holiday season. We wish you a rewarding and productive 2009.

Don't look now--but tax time is almost upon us!

Call me Scrooge--but this is just a little reminder to encourage you to start thinking about the items that need to be completed by December 31st. The IRS has recently published two very helpful releases.

One details the various credits available as well as deductions you may be entitled to if you take action by the end of the year. Just click on the title above for the full text. Not specifically listed--but very important--is your Section 179 deduction for the year. You must have purchased (financing is OK) and placed in service your qualifying asset by December 31 for Section 179 to apply. Don't forget the limits in 2008 are significantly greater ($250,000) than they will be in 2009 ($133,000).

The second announcement relates to the download version of Publication 17. The IRS has placed its comprehensive tax guide for individuals on IRS.gov, updating it for tax year 2008. The updated on-line version of IRS Publication 17, “Your Federal Income Tax,” contains more than 900 interactive links. Publication 17 has been updated with important changes for 2008, including information on the new recovery rebate credit, new first-time-homebuyer credit, and an additional standard deduction for real estate taxes. It has been published annually by the IRS for more than 65 years and has been available on the IRS Web site since 1996. As in prior years, the publication provides information on how to file an individual tax return, what to include as income, how to calculate capital gains and losses, how IRAs and other expenses can affect how much income to report, whether to take the standard deduction or itemize, and how to figure taxes and credits. Publication 17 is available on line, however, those who do not have access to the Internet can call 1-800-829-3676 to request a free copy from the IRS. Printed copies will be available in January 2009.

Wow--just about anything you would want to know about income taxes. Enjoy the holidays--but do spend some time reviewing these releases so you can take advantage of every credit and deduction to which you are entitled.