Michael Gray, CPA's Tax and Business Insight

Table of Contents

• Final extension due date for individuals is October 15.
• It's time for year-end planning.
• On the World Trade Center disaster.
• On the stock market.
• Is your information protected in case of a disaster?
• Trouble can mean opportunity.
• Will there be another tax cut passed this year?
• Filing deadline relief for World Trade Center victims.
• If you have employee stock options...
• PS Marché Aux Fleurs.>
• Visit our new articles.
• Subscribe/Unsubscribe from Michael Gray, CPA's Tax and Business Insight.

Final extension due date for individuals is October 15.

A few clients still haven't delivered their tax information. It seems the last few tax returns are some of the toughest ones. Time is up!

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It's time for year-end planning.

Can you believe this year is already three-fourths over? It's time to see how things are developing for 2001. Will you have enough withholding to avoid underpayment penalties?

Many clients have tons of capital losses. Have you "locked them in" by making a sale? Remember the wash sale rules! You can't buy similar stock for 30 days before or after the sale or the loss is disallowed. Do you have some gains to realize that you can apply your losses to?

Recent tax law changes make Scholarshare, now called Qualified Tuition Plan, accounts very attractive for planning education funding. Starting in 2002, distributions from these accounts for education expenses will be tax free. Have you set one up for your children or grandchildren?

Make your reservation soon for a planning appointment. My availability may be limited during the next three months.

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On the World Trade Center disaster.

If you had any friends or family members who were affected by the attack at the World Trade Center, please accept our sincere condolences. Let's pray for wisdom and guidance for our national leaders and emotional strength for our country and our allies. Prepare for war. Pray for peace. I think we all realize that this is going to be a long campaign and different from anything we have seen before.

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On the stock market.

For what it's worth, remember the old slogans, "Buy low, sell high" and "In a down market, cash is King!" It appears the stock market is going to be a rough ride for a while. There should be some good opportunities available, if you have the stomach for investing.

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Is your information protected in case of a disaster?

The only location for some businesses was at the World Trade Center. Unless they planned in advance for a disaster, they may have lost all of their information. There are services available for off-site redundant computer data storage. I take last week's back up tape home. It might be a good idea to keep an extra copy of a recent back up tape in a safe deposit box. Have you provided for your information in case of a disaster? Is your anti-virus software current?

Another related question. What if something happened to you or key persons in your organization? Do you have a contingency plan to recover if something does? (This an especially hard issue for single owner businesses.) Do employees have a telephone number to call and a location to meet to regroup?

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Trouble can mean opportunity.

With all the concern and caution, remember that times of trouble often provide opportunities. Some companies have made fortunes providing relief supplies, including replacement office supplies and furniture for displaced businesses, when disaster strikes. In many cases, your competitors may be wringing their hands and doing nothing. It may be an excellent opportunity for you to fill the void and serve more prospective customers.

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Will there be another tax cut passed this year?

Just last month, I was predicting the tax cut provisions passed earlier this year might not become effective. Now Congress is entertaining proposals to pass more tax relief for economic stimulus. Proposals include cutting the long-term capital gains rate and reducing employment taxes (social security and medicare).

If you have proposals for tax relief that you think should be considered, like repealing the AMT for ISOs, write your representatives in Congress again to include them.

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Filing deadline relief for World Trade Center victims.

The IRS has issued an announcement, Notice 2001-63, granting relief to victims of the September 11, 2001 attack on the World Trade Center. Under the relief provisions, certain taxpayers who extended their tax return due date to October 15, 2001 will receive an additional extension to February 12, 2002. The due date for the third quarter extension payment has been extended to January 15, 2002. Corporations that had an extended filing date of September 17, 2001 receive an additional extension to January 15, 2002. In addition, penalties for late payment of tax won't be computed for these taxpayers from September 11, 2001 until January 9, 2002.

Some of the people covered include all taxpayers in New York City and Arlington County, Virginia, which have been declared disaster areas by the President, victims in the airplanes and on the ground, relief workers affiliated with a recognized government or philanthropic organization and who is assisting in the disaster area, any individual, estate or trust whose records necessary to meet a filing or payment deadline were maintained in the disaster area, businesses located in the disaster area and taxpayers who were employed in the disaster areas.

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If you have employee stock options, have you subscribed to the ESOAA Option Alert?

To subscribe, go to http://www.stockoptionadvisors.com. You can review past issues at http://www.stockoptionadvisors.com/optionalert/.

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P.S.

My daughter and her husband, Holly and Dan Baker, have opened a Southern French Restaurant at 23 Ross Common, Ross, California, about 15 minutes north of the Golden Gate Bridge. The name of the restaurant is Marché Aux Fleurs. For the best meal of your life, call 415-925-9200 for a reservation and give them a try soon! For more information, visit their website at www.marcheauxfleursrestaurant.com. For directions, visit our directions page.

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Visit our new article!

• The Ultimate Sales Letter Book Review

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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.