Introduction

Tax Season once again!  Our office has been buzzing with activity as we get ready to do your taxes!  For existing clients, the pre-scheduled appointments and organizer packages will be arriving at your door any day.  For those of you who live outside of Bellingham, you will be receiving a mail-in package, but if you are inclined to visit our office for a face-to-face meeting, please call for an appointment; we would love to see you!  And for those of you who are not currently using our tax preparation services, we would love to have you as a new client!  With all the recent tax law changes (some of which are highlighted below) and more coming down the pike, you might want to consider using a professional tax firm.  Saving taxes is a major component of increasing your net worth!

As the holidays come to a close and kids are back in school, we want to remind you that Multop Financial clients (tax or financial planning) can nominate students, whether family or friends, for the Multop Financial Scholarship. Our $2,000 Scholarship is offered each year to one student enrolled in full-time study at an accredited institution of the student’s choice.  The winner is determined by our Client Advisory Board, based on the application, essay and general impression.  Applications must be received by us no later than March 31st, 2010. For further details you can download the scholarship application from the link below.

Multop Financial Scholarship

Financial Tip – Roth IRA Conversion

Roth IRAs allow investors to invest after-tax dollars today, and withdraw both their principle investment and earnings in the future tax free.  Unfortunately there are income limits that disallow contributions for some that earn “too much.”  In 2010 those earning $120,000 (singles) or $176,000 (married filing jointly) are ineligible to contribute to a Roth IRA.

A Roth IRA conversion can allow some investors who have been unable to fund a Roth IRA in the past, to invest in one today by moving “pre-tax” dollars from an IRA or old 401k to a Roth IRA.  Normally those who earn more than $100,000 and want to convert a Traditional IRA to a Roth IRA would be out of luck.  However in 2010 due to the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), the income test no longer applies.  Any amount that is converted will be taxed as income in the year it was converted.  However in 2010 the investor also has the option of spreading that tax liability equally over 2 years, 2011 and 2012.  This can ease some of the tax shock.

Tax Tip – 2009 Tax Law Updates

In early November 2009, Congress passed a bill with several significant tax changes, including the extension of the homebuyers’ tax credit and the expanded loss deduction for businesses.  Many of these stimulus provisions expire after 2010 so it is important to take advantage of these tax breaks.

• Homebuyer’s Credit Extended through April 30, 2010 ($8,000 credit)
• All businesses with a loss in the 2008 or 2009 tax year, because their gross income was less than their business deductions, can use the loss to offset profits from five previous years (rather than two years).
• New deductions for state and local sales and excise taxes imposed on a new car purchase.
• Property and vehicle sales tax may be added to standard deduction.
• The Hope credit has been extended for 2009 and 2010 to higher income earners; tuition, related fees, books and other required course material all qualify ($2,500 per student).
• For 2009 and 2010 computer equipment and internet access can be paid by qualified  tuition program (529 Plan)

For every new tax bill that makes it through Congress, some will benefit your situation and some will increase the burden. Even if your tax burden increases due to the new 2009 changes, most likely there are ways to rearrange your personal and business affairs to minimize any additional burden for 2010.  For more information or to speak with a tax specialist, please call Multop Financial at (360) 671-7891.

About Multop Financial

Multop Financial is comprised of Financial Advisors, Tax Specialists and CPA's working together to provide financial management over a client’s lifetime.  We employ a team approach to ensure the continuity of your planning.  What can we do for you today?

www.Multop.com

Multop Financial
333 Calluna Ct
Suite 205
Bellingham, WA 98226

Phone: (877) 671-7980
Fax: (360) 671-4963
Email: info@multop.com

* Please note that individuals who are selected by Goldline Research as Wealth Management Leading Providers do not pay a fee to be included in the research or the final list of wealth managers, however, there is a fee associated with the use of the Goldline Research logo and other marketing materials. Wealth Managers who are included on the Goldline Research Wealth Manager list must meet the following criteria:

• Fee Only, Fee Based or RIA
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• Advanced Certifications Held
• Comprehensive Range of Wealth Management & Financial Planning Services Offered
• 20+ Years of Industry Experience

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