Volume 1 Issue 1
September, 1996
Ladolcetta Expands Accounting Practice
The accounting practice started by Patricia Ladolcetta, CPA in 1987 has had a history of slow but steady growth catering to the needs of small local businesses and working people. It has historically focused its time and attention to Federal Tax preparation and bookkeeping services to a small base of clients who kept coming back year after year because of the friendly, personal touch in which it offered professional services. Clients also felt that Patty had their best interests at heart when offering good financial advice and direction at reasonable prices. The early years were fairly easy to manage and tax season was always busy but efficiently conducted.
Over time, constant referral by satisfied customers pushed the practice into the growth stage and as a result Don joined in as an apprentice tax preparer who brought a different set of financial expertise to the menu of client services. These talents complemented Patty’s already strong skills and with her skilled guidance as the Senior Partner of the business the firm continued to grow in its ninth tax season.
Recognizing a good thing early on, Don set his mind to sit for the CPA Exam in 1992 and completely passed the exam in his first attempt which is a feat achieved by only 13% of all CPA Candidates. Under the careful tutelage of Patty combined with the existing and ongoing financial experience garnered from his successful Banking career, Don has developed into an extremely talented and knowledgeable financial professional. Today he is seeking your business and aid in helping his business grow.
With the advent of the extremely successful 1995 tax year, it became apparent that the small tax practice could no longer be nurtured on a part time basis by the partners and Don has stepped forward to conduct business on a full time basis while Patty remains as involved as always. With this increase in efforts, the firm plans to expand its financial service products to include Business Plans, Consulting and Aid in Establishing Incorporation, Business Valuation, Financial Planning, and Computer Consulting. These items complement its existing Corporate and Personal Tax and Bookkeeping Services.
Both Partners are fully equipped to provide this scope of service having a combined experience in the finance world of 35 years. Patty and Don are fully Certified Accountants with undergraduate and graduate degrees in Business. The office functions are totally computerized using the latest hardware and software technology to better serve the client. The firm looks forward to serving its current and prospective clients in the future.
IRA and 401K Laws Are Likely to Change For 1997
Congress has a bill that is about to be approved that will probably impact you in 1997 regarding your treatment of IRA and 401K accounts.
Under current law at the age of 70 & 1/2 an owner of an IRA must begin to withdraw money annually from his/her IRA. These withdrawals are then taxed. The new law will allow those who are still gainfully employed beyond 70 years of age to postpone these withdrawals to a future date. Taxpayers who have no need of this money would be wise to allow the money to remain in the account and grow on a tax deferred basis.
A further advantage to taxpayers will go to the One-Earner couple. Historically, these taxpayers were limited to a total of $2,250 in total annual deposits to their IRA accounts. The new law proposes to increase these limits to allow for a deposit up to $2000 each.
Other changes planned relate to contributions to 401K plan’s by highly paid executives. Existing 401k laws have a limit set whereby employees may contribute up to $9,500 per year unless the employee is in the top 20% of company earners and earns $60,000 or more. These so-called high earners had limits set which reduced their contributable amounts. The new law will go on to define a high earner as someone who earns more than $80,000. Anyone who now qualifies under the current restrictions should consider increasing their contributions.
Today’s Advice
In boxing they always say to finish the fight stronger than the way you started it because the audience always remembers how the fight ends
Quote of the Month
Attitude.
Whether you think you can or
think you can’t
YOU ARE RIGHT!
Henry Ford
College Costs-Will The Cost of Tuition For Your Children Truly Bankrupt You?
All the experts have been telling baby boomers that their children may not be so lucky when it comes to acquiring a college education. The price tag for tuition is projected by many as totalling unreachable amounts by mere mortals.
In light of this fear striking at a personal level, the editor of this article decided to make his own investigation to the issues at hand.
In this new age of computer technology, anyone with access to the Internet can gather a wealth of information about any subject. Looking into tuition costs I find that a large majority of American Universities have a home page on the Net with information about their college costs in terms of tuition, room and board. Most of Florida’s State colleges appear to have a price tag with a similar range and by way of example I looked at the University of Central Florida. As of today for Florida Residents, this university wants $1,840 annually for tuition, $1,970 for room and $1,950 for meals for a grand total of $5,760 annually.
Going a step further we need to know what the cost of these items will be when our children will attend school. The Internet also supplies us with historical inflation rates since 1909 and a quick look backwards tells us that we have historically experienced an average annual 5.5 % rate of inflation for the last 87 years. The current estimates by the Federal Reserve suggest that 3-4% inflation over the next 4-6 years is a reasonable expectation. By way of example, this means that a person with an 8 year old child will need to consider inflation at 4% on $5,760 in tuition costs 10 years from now. This number transforms itself into a future amount of $8,527 for the first year of college expenses. The question still remains “How can one save for this amount?”
The key issue here is to begin saving now. Following a simple investment program a parent can put away $486 annually in a 12% mutual fund to have the $8,527 ready for your your child's education. Of course college requires more than one year of expense and most families have more than one child and more expensive colleges exist out there, but the purpose of this exercise is to show that panic over college costs is not necessary. Planning is. To make things even easier for your nerves, consider also that room and board are not going to be new expenses for you. You are now paying for those expenses simply by raising the children (albeit expenses at home are cheaper). Additionally, we assume your salary 10 years from now will also reap the benefit of inflation. This, combined with election year politicians making noise about a tax plan to aid funding college tuition makes the future seem somewhat cheerier.