Real Estate Newsline, by Fred Flores, January 15, 2007

It is that time of the year again; time to start thinking about doing your taxes for 2006. I am a CPA and Real Estate Broker. In a two part article, I will first discuss some common tax deductions and then I will discuss some new tax law changes that may apply to you.

Your automobile expense deduction is probably your single largest deduction. You can elect to deduct the actual expenses incurred (this would include gas, rent or lease payments, depreciation, insurance, tires, and oil) for the business-related portion of your auto or simply take the 2006 standard mileage of 44.5 cents per business mile. This election is made in the first year you use your auto for business.

Most of your business related taxes you pay are deductible from your taxable income. You may be able to deduct personal property taxes on business assets, employer share of Social Security and Medicaid taxes on employee wages, federal unemployment taxes, sales taxes and real estate taxes.

Your home office may offer you some tax advantages. You may deduct some of your mortgage interest paid, real estate property taxes, home insurance as well as some of the maintenance and repair expenses associated with the property. The cost of utilities and business supplies associated with the business use of are also deductible. The part of your home that is used exclusively for the business divided by the home’s total square footage is used to determine the business percentage.

Meals and Entertainment are only 50 percent deductible that are directly associated with your business.

You may be able deduct professional fees, such as those paid to a CPA or lawyer.

Depreciation may be taken on passenger cars, equipment (cell phones, copiers and computers). Basically any assets purchased for the use of your business may be depreciated or written off (Section 179 Depreciation deduction).

You may be able to deduct 100% of health insurance premiums as an adjustment to income on your tax return. This deduction is limited to your net profit. You may also be able to open a Healthcare Spending Account (HSA). With an HSA you do not pay taxes on medical cost paid from this plan.

There a many tax options to fund your retirement as a self employed person. While the options are many, they are one of your most important tools. You can choose between 401(k), SEP (Simplified Employee Pension) plans, SIMPLE plans or Qualified plans. Each plan has unique qualifications, funding limits and tax treatment of contributions and distributions. Please review your plan options at the beginning of each tax year.

There are many tax law changes for 2006.

The limits have increased for the Hope Credit. The maximum Hope Credit has increased to $1650. This is 100% of the first $1,100 of qualified education expenses and 50% of the next $1,100 of qualified education expenses.

The maximum Health Savings Account (HSA) deduction has increased to $2,700 ($5,450 for family coverage). The maximum additional deduction for individuals 55 or older has increased to $700.

The standard deduction for most people will be higher in 2006. The actual amount will depend on your filing status, how old you are and can you be claimed as an exemption on someone else’s tax return.

The amount that you can deduct for each personal exemption has increased to $3,300. The exemption amounts are subject to phase out depending on your income levels and filing status.

You may be able to take a credit equal to the sum of 10% of the amount paid in 2006 for qualified energy efficiency improvements installed during 2006 and any residential energy property costs paid in 2006. There is a limit on the amount of the credit. The credit is limited to $500 for all tax years and there is an accumulated credit limit of $200 for windows. The credit limit for residential property costs for all tax years of $50 for any advanced main air circulating fan:$150 for any qualified natural gas, propane or oil furnace or hot water boiler; and $300 for any item of energy efficient building property.

Beginning in 2006, the maximum adoption credit has increased to $10, 960. This amount is subject to phase out based on your income and filing status.

Real Estate Newsline, by Kathy Myers, February 1, 2007

In less than three months, many self-employed individuals will be asking for an extension . . .Once again, tax time suddenly appeared! The biggest problem I run into is newly self-employed people not setting aside money for their estimated income tax, opens Fred A. Flores, Jr. owner of Fred Flores, CPA. Once you get to crunch time at tax time and you owe taxes for the entire previous year AND you have to pay estimated taxes for the coming year, you are already way behind financially. Entering self-employment is not an easy set-up in the first years. Business expenses, start-up cost and taxes take a huge portion of your budget. That is where my company can help.

Fred Flores CPA provides accounting, bookkeeping and taxation assistance. We’re small enough to provide a more personal service to our clients. It is as easy as a phone call to my office to begin a consultation. We stress a one-on-one environment for our clients and have the experience and knowledge to carryout out a variety of financial services for both individuals and businesses, continues Flores. Our mission is to provide reliable, accurate, timely and convenient services to our customers while at the same time helping each of them achieve their own individual and personal goals. Our clients are our most important asset and all their information is confidential.

Flores has an impressive resume of experience. He has owned and operated Fred Flores CPA accounting and tax practice since 1997. His past experience includes tenures as a tax specialist with KPMG Peat Marwick, tax senior with Caneiro Chumney & Co., internal auditor with Frost National Bank and industry experience with KCI. In October, we will celebrate 10 years of service. We want to be a responsible business both professionally and in civic service. Flores is an active member of the San Antonio Hispanic Chamber of Commerce and the San Antonio Board of Realtors. He also sits on the board of the New Frontiers Charter School, provides charitable work and consulting to the San Antonio Hispanic Heritage Society, is the treasurer of his subdivision homeowner’s association and very involved with YMCA soccer.

Flores is exceptionally well versed in real estate issues and acquired his real estate licenses in 2001 and his broker’s license in 2004. Combining my tax business with real estate has been a seamless effort. The tax business generally runs from January to May and I found I was in need of a challenge from that June to December period. I now have nine REALTORS at Fred Flores & Co. Real estate transactions involve one of the biggest financial investments most experience in a lifetime. Whether it is personal property or investment property, we are ready to assist from the purchase to the tax filing.

As a business owner, Flores is available for consulting services (type of entity selection, financial planning, start-up, strategic tax planning, assistances in business transaction of sales, acquisitions and more); accounting services (financial statement preparation, bookkeeping and payroll); and taxation services (partnerships, C-Corporations, S-Corporation, Limited Liability Companies, income tax, trusts and sales tax). We can work with individuals, families, teams and limited partnerships on their business needs. Most importantly, we understand this is more than your business, it’s your life.

Fred Flores, A Brief Autobiography

I acquired my Master of Professional Accounting Degree with a concentration in taxation from the University of Texas at San Antonio. I have 17+ years of accounting experience, including tenures as a tax specialist with KPMG Peat Marwick, tax senior with Caneiro Chumney & Co., internal auditor with Frost National Bank and industry experience with KCI.

I have owned and operated my accounting and tax practice since 1997. In 2001 I acquired my real estate license and my broker's license in 2004, successfully combining both businesses in 2001.

Providing both financial and real estate services gives my company the unique opportunity to advise clients on ways to maximize their real estate investments and align those investments with their financial goals. This allows my company to offer a wider range of services.

I am an active member of the San Antonio Hispanic Chamber of Commerce and the San Antonio Board of Realtors. I sit on the board of the New Frontiers Charter School, and am very involved with the YMCA soccer program.