Hi Leonard:

 I have performed a good amount of the research, but I still have a preliminary question for you.  If I (personally) purchase something essential for use for “the company”, do I have to wait until after I incorporate, or can it still be “worked into the mess”?  (i.e. computer, software, incorporation, legal fees, etc.)  Don’t worry, I WILL schedule an appointment prior to doing anything really foolish!    -Jeff

Hello Jeff,

 You are well advised to be thinking about this before the inception of your business.  The IRS allows a deduction for “start-up” expenses for your business.  The requirement is that you list each expense and the date it was incurred.  These expenses may include all expenses related to the start of the business but only those incurred before the first day you are able to provide your product or service to customers.  Don’t forget to include travel expenses such as mileage and tolls.

 I hope this helps.

 -Lenny

Clients have been talking a lot about a change, which is a requirement for businesses to report the value of employer-provided health care benefits on their employees’ Form W-2. The requirement will take effect in 2011 and be reported in Forms W-2 issued in early 2012.

Notwithstanding some rumors to the contrary, the value reported will not be considered taxable income. The benefits’ value statement will not have any effect on an individual’s federal income tax. The Form W-2 reporting requirement will help IRS verify that people have health care coverage, because the law will eventually penalize people who are not insured.

 For Immediate Release                      

Contact: Leonard D. Rea

H.D. Vest Investment Services

Sturbridge, MA June 15, 2010 – H.D. Vest Advisor Leonard D. Rea of Sturbridge recently attended the 24^th annual National Conference of H.D. Vest Financial Services^®. The National Conference was held at the Sheraton New Orleans and Marriott New Orleans hotels in New Orleans, LA, June 7-10, 2010.  At the conference, Rea chose from customized courses and sessions by top experts, including breakout sessions, and general sessions as well as exhibits and special events. Rea gathered new ideas for helping his clients work toward their financial goals.

“H.D. Vest Advisors who attend National Conference always learn new ways to support their clients,” said Roger Ochs, H.D. Vest president. “This year’s National Conference provided Advisors with the tools and knowledge to help their clients and network with other Advisors and solution providers.”

Rea heard from informative keynote speakers this year, including H.D. Vest President Roger Ochs, Director of Investment Strategy and Asset Allocation with Wells Fargo’s Wealth Management Group Ron Florance, and International Performing Artist and Communications Catalyst Victoria Labalme.   

Leonard D. Rea has been an Advisor with H.D. Vest since 1995. He has owned Leonard D. Rea & Co. Financial Services since 1986.

Leonard serves the needs of individuals, corporations, partnerships, trusts, estates and foundations providing traditional brokerage accounts, fee-based managed accounts, private money management, individual and business retirement plans, education planning, mutual funds, life, disability and long-term-care insurance, variable and fixed annuities, multi-generational estate planning, comprehensive tax reporting, online account access, check writing and debit cards, account consolidation and systematic investment plans.

About H.D. Vest, Inc.

Based in Irving, Texas, H.D. Vest Financial Services supports an independent network of tax and non-tax professionals who provide comprehensive financial planning solutions, including securities, insurance, money management services and Wells Fargo banking products. Approximately 5,200 independent contractors manage over $26 billion in assets for some 1.8 million individuals, families and small businesses in all 50 states. H.D. Vest became a non-bank subsidiary of Wells Fargo & Company in July 2001.

Securities offered through H.D. Vest Investment Services^SM, Member SIPC, Advisory services offered through H.D. Vest Advisory Services^SM, non-bank subsidiaries of Wells Fargo & Company, 6333 N. State Highway 161, Suite 400, Irving, TX 75038   (972) 870-6000.

In an effort to keep you informed I am going to post each time I attend an educational meeting.  I will either post something I learned that is new tax law or information that may be helpful to you.  I do need to tell you that I spend a lot of time at meetings to keep up on what is new and to refresh myself on different topics related to taxes and financial planning.

An example:

On June 24 I attended an 8 hour meeting which explained the tax treatment of estates and trusts and examples of how these types of tax returns are completed.  Bear in mind that there are 2 types of estate tax returns:  one reports  the assets of the deceased and the other reports the income of the estate.  The following discussion deals with an estate income tax return.  An interesting item presented at this meeting dealt with the treatment of distributions from the estate of a deceased person when there are taxable items in the estate.  Distributions from the estate that are not bequests could be taxable to you if they are the first items distributed.  An example of this:  Your close relative dies with taxable items in their estate and has a will that bequests all of their possessions except a car.   If it were decided that you were to receive the car and it were distributed before the taxable part of the estate, you would owe tax on the value of the car up to the taxable amount of the estate.  From this information you can immediately see planning can avoid unintended consequences.