NEWS FROM BPS

Now This is Columbia

Local arts leaders announced in September their plans for a weeklong festival (to be held in the Spring of 2007) that will showcase Columbia arts, theater and dance groups. Marvin Chernoff and Donna Sorensen are co-chairs of the festival.

BPS will be providing accounting assistance to the festival.

Softball Update

No “official” softball report was filed this month—not usually a good sign.

We’ll try to get everyone an update in the October newsletter.

In-House Seminars

We had a very good turnout for our September 23 seminar. Approximately 35 people heard a variety of accounting and tax topics.

Our next seminar will be held on Friday, October 28.

As in the past, seminars will be four hours followed by lunch.

If you are interested in the best free CPE around, contact Tom Pietras.
 

Looking for Outstanding Professionals

Our practice continues to grow (thanks to our clients) and we continue to look for additional outstanding staff.  If you know of someone who might be interested in working with us, please have them send a resume to Tom Pietras.

Still More Seminar News

Beth Bauknight and Cherie Kallio will be teaching “South Carolina/Federal Fiduciary Income Tax Workshop” in North Charleston on November 3, 2005 and in Columbia on November 4, 2005. The seminar is sponsored by Professional Education Systems Institute, LLC.

If you are interested in attending, Beth or Cherie can give you the details (803-771-8943).
 

TELECOM INDUSTRY SEMINARS
BACK BY POPULAR DEMAND!

In October, we will again be presenting our wireless telecommunications industry seminar in Las Vegas, presented in association with CoBank and Moss Adams. Please contact Chris Stormer if you are interested in attending.

Client News
Clients in the news

If you have not seen it already, you should pick up a copy of the September issue of Greater Columbia Business Monthly. The September issue includes articles about our clients: Lorick Office Products (president Jeanne Brutschy on the magazine cover) and Rising High Natural Bread Company (with a picture of Kirkman Finlay, III).

TECHNICAL ISSUES

IRS Mileage Allowance

In September, the IRS raised the mileage allowance to $0.485 in order to respond to higher fuel prices.

Education tax breaks can ease the financial pain of back-to-school

It's back-to-school time and many families are looking for ways to stretch their education dollars. To help, there are some generous tax breaks. Deductions and credits are available and while they won't lower the cost of education, they can lower the tax bill.

Hope Scholarship credit

The Hope Scholarship credit can help pay for college as well as vocational training. The credit reaches $1,500 per student for the first two years of post-secondary education. It is a 100 percent credit for the first $1,000 and a 50 percent credit on the second $1000 paid in tuition and expenses other than books, healthcare costs, room and board or transportation.
 
Tax-free grants lower the amount of tuition that is eligible for the credit. The student must attend a qualified institution and no two taxpayers can claim the credit in the same year. This means that either the student or the student's guardian may take the credit, but not both.

The Hope Scholarship credit has special qualifications. The student cannot have completed the first two years of post-secondary education, must be enrolled at least half-time and cannot have been convicted of a felony drug charge.

 Lifetime Learning credit

The Lifetime Learning credit is much akin to the Hope credit. It helps to offset the same expenses. However, this credit can be used in any year that the Hope is not taken. It's available for 20 percent of eligible expenses, up to a maximum of $2,000 per taxpayer, not per student.

Coverdell education savings accounts

Coverdell education savings accounts (ESAs) can also help pay for college, as well as secondary and elementary, schooling. The maximum annual contribution is $2,000 per beneficiary. Any distribution not made for education costs, will be taxed, and an additional 10 percent penalty will be added. This is also true of students whose distributions fund attendance at a military academy, if the student is expected to serve upon dismissal from the institution. Distributions are treated like gifts and may be used for tuition, books, supplies, and equipment.

Scholarships/ fellowships

Scholarships and fellowships, both for merit and financial need, are excluded from income if they are used to pay for tuition, and other related expenses such as books and supplies, but not incidentals, such as room and board. Some grants, such as those in exchange for services the student provides, for example, research, are treated like wages and are included in gross income. Athletic scholarships are not considered exchange for service.

 Student loan interest payments

Student loans may also produce a tax break. There is a valuable above-the-line deduction for interest paid on education loans. For taxpayers making less than $50,000 ($100,000 for joint filers), $2,500 is deductible annually. Only the loan holder can take this deduction. If the loan is taken out in the student's name, but the parent is paying for it, the parent cannot deduct the interest.
 
Education costs are going up every year and these tax breaks, when they are used well, can help you save some money. Give our office a call today. We'll review your educational expenses and design a tax strategy that maximizes these valuable tax breaks.

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