Developing a New Organizer

Organizers seem to be getting longer and longer while tax practitioners strive to reduce taxes for their clients. Here are two reasons why this is happening. With regard to a vehicle purchase, the IRS just certified that the 2005 Ford Escape is eligible for the clean-burning fuel deduction. Taxpayers who purchase this vehicle may claim a tax deduction of $2,000, the incremental cost that is related to the vehicle's electric motor and related equipment. They don't have to itemize to claim the deduction. Similarly, eligible educators may deduct up to $250 in qualified purchases of books and classroom supplies. This is also an "above-the-line" deduction.

Whether you produce your own organizer or send out a commercially produced one, you should review the changes made by the recent laws to make sure no needed questions are left out.

Seems a little tedious? Maybe we can develop an organizer that will make your life simple and insure the minimum reduction in taxes for your clients. We can require all payments be made with credit or debit cards, and using the latest technology classify and record all purchases by the exact types.

So when a Ford Escape is purchased, the system identifies the tax ramifications including the possible deduction of state and local sales taxes and the qualification for the $2,000 hybrid fuel deduction. For teachers, the system would automatically identify expenses eligible for the $250 deduction. You don't have to worry about a year-end tax law, because the application would automatically red flag purchases made earlier that are impacted by the new law.

Version two of the program could have a tax reduction warning. In December, clients would receive e-mails reminding them to pay state estimated income tax by the end of the year, and if the client is a teacher, it might also say that they only made $186.65 in purchases eligible for their special $250 deduction. Unlike the year-end newsletters that you currently send out to all your clients, this system's push e-mail would be customized to the particular client.

Of course, there is a major kink in my suggestion as many clients already fail to utilize the organizers that you supply them. So, before we begin work on this new organizer and to ensure its success, I think we should first outlaw shoeboxes. 

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