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• Last chance to see The Will Rogers Follies.
• Thank you!
• San Jose Mercury interview incites "rush" to buy Employee Stock Options.
• Employee Stock Options supplement published.
• Social Security benefit for people over age 64 and under age 70.
• California EDD requires independent contractor reporting.
• Congress passes legislation repealing estate tax and marriage penalty.
• That toaster you received for opening a new bank account may not be taxable!
• Parents lose dependency exemptions for children without Social Security numbers.
• You can help make our newsletter more valuable.
• Visit our new articles.
• Subscribe to Michael Gray, CPA's Tax and Business Insight.

This is probably your last chance to experience Michael Gray as Florenz Ziegfeld in The Will Rogers Follies.

The last two performances of the West Valley Light Opera production, The Will Rogers Follies - A Life in Review will be this Friday and Saturday, July 28 and 29. I will be performing offstage as the voice of Florenz Ziegfield. There are still a few tickets left, and you might be able to get a seat by "walking in" on the nights of the performances. The location is the Saratoga Civic Theater, 13777 Fruitvale Ave., Saratoga (across from West Valley College.) For tickets, call (408)268-3777. For more information, visit the West Valley Light Opera Web Site at www.wvlo.org.

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Thank you!

Jacqueline Sullivan wrote a beautiful testimonial letter for our firm. In appreciation, she received tickets to see The Will Rogers Follies. Thanks again, Jacque!

Here are some of the client referrals we received during the past month. Rajan Bhatt referred Jeff and Ann Toillion. Dick Blakely of Smith Barney referred Kerry Veenstra. David Gurovich of Netscape referred John Johnston. Michael Agah referred Bill Kellogg.

Thanks to all of you for your confidence in us. Welcome to our new clients!

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San Jose Mercury interview incites "rush" to buy Employee Stock Options.

On Saturday, July 15, the San Jose Mercury published an interview, "Options psychology", with Gabriel Fenton on Page 3C (Business/Personal Finance.) Gabriel Fenton is the co-author with Michael Gray and Joseph Stern , III of the book, Employee Stock Options. As a result, many people placed orders to buy the book, which is available at Amazon.com.

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Employee Stock Options supplement published at www.taxtrimmers.com.

I posted some corrections and additions for the book, Employee Stock Options. You can find them at the home page of our web site, www.taxtrimmers.com.

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If you are over age 64 and under age 70, you may be eligible for a Social Security benefit.

You should know the Social Security laws were recently changed so people who reach age 65 may continue to work and receive Social Security benefits. In order to receive your benefits retroactively to January 1, 2000, you must apply to the Social Security Administration by July 31, 2000.

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California EDD requires independent contractor reporting starting 2001.

Most California employers should know they are required to report information about newly-hired employees to the Employment Development Department. Effective January 1, 2001, this requirement is being extended to independent contractors. The purpose of the program is to help locate parents who aren't paying child support.

The information must be reported within 20 days of entering into a contract for $600 or more. If there is no contract, the information must be reported within 20 days after the aggregate payments exceed $600.

The arrangements for which reporting is required is the same as for issuing 1099 forms. That means trade or business payments to incorporated law firms and medical corporations must be reported, in addition to any other non-corporate business or individual that provides services to another trade or business. (Yes, even fees paid to unincorporated CPA firms must be reported!)

Unfortunately, these reporting requirements are very intrusive. In addition to the contractor's name and identification number, the date the contract is executed and the total dollar amount of the contract is part of the information that must be disclosed. (The EDD will issue forms for reporting.) Once the rules go into effect, many business owners will be screaming.

If you are unhappy with these new rules, I suggest you contact your representatives in state government.

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Congress passes legislation repealing estate tax and marriage penalty. Don't celebrate yet!

Preparing for the coming election, the Republican Congress is passing many pieces of legislation changing tax laws they believe are unpopular. Clinton has promised to veto these bills as fiscally irresponsible.

If George Bush is elected, will these changes be enacted? I suspect not. Most of the changes would be "phased in." All we need is a downturn in the economy and we will soon see backpedaling for scheduled tax cuts. Although certain special interest groups would like to see tax reform (I vote for the repeal of the alternative minimum tax!), most voters aren't inclined to fool with what seems to be working.

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That toaster you received for opening a new bank account may not be taxable!

The IRS recently announced that, for administrative convenience, it will no longer require a depositor to include a de minimus (small) premium in taxable income. In addition, the depositor's tax basis in the account is not reduced by the premium. The premium is a tax-free "fringe benefit." The new rule is effective for de minimus premiums provided after December 31, 1999.

In order to qualify, the premium may not cost the financial institution more than $10 for a deposit of less than $5,000. For a deposit of $5,000 or more, the cost to the financial institution may not exceed $20.

Cash awards and premiums that cost more than the de mimimus amounts are still taxable.

(Rev Proc 2000-30.)

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Parents refuse to provide Social Security numbers for children, lose dependency exemptions.

The Tax Court recently ruled that, even though parents refused to provide Social Security numbers for their children based on their religious convictions, the government has a compelling reason for the requirement. Therefore, the dependency exemptions were denied. (Miller v. Commr, 114 TC 32.)

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You can help make our newsletter more valuable to yourself and others.

Share the ideas that have helped your business be successful or sharing your business problems, ads for critique, etc. Your business will get valuable publicity and our readers and I might have some valuable suggestions for you. Please write to me. My email address is mgray@taxtrimmers.com; my fax number is 408-998-2766 and my "snail mail" address is 1265 S Bascom Ave., Ste. 106, San Jose, CA 95128-3533.

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Visit our new articles!

• "Rich Dad, Poor Dad" Book Review
• Your Business Can Beat the "Wal-Marts"!

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P.P.S.

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.