The Santa Barbara Bookkeepers Assoc. met for its general meeting at 11:30 a.m., Tuesday, April 16, 2002, at Mulligans Café. There were 21 in attendance. Don Zellet and Heidi Scherbarth were our newest attending members. Isumi Kiesel is a joining member. Guests in attendance were Ida Wall and Erin Kendrick.

Lilia P. Rochester, handwriting consultant and examiner, was our speaker and was absolutely fascinating! She gave us samples of Charles Manson’s and Thomas Jefferson’s handwriting and discussed how their individual personalities, both emotional and intellectual, are reflected in their handwriting. Lilia has been in this field since she was 18. She explained that she does personality assessments for bank hiring of new employees. She also works for attorneys in many areas, such as jury screening and defendants too. She also helps transitioning women set goals and better define their purpose. She used the letter "T" explaining how variations of crossing and closing shows personality character. Lilia also used the letter "I" for samples of how the dot means certain things. Lilia has spoken to us before and we certainly hope she comes back soon.

So Much to Remember…So Little Time
Submitted by Monica Dittrich

I wanted to share a tip I use for keeping track of the valuable "how to’s" and reminders that come our way via e-mail, web sites, or sometimes even the mail. This is for those REALLY good ones that I wish I had somewhere when the occasion arises in which I could use that bit of information. And it’s funny, it’s like I have a sixth sense about what piece of information will come in handy later, and so I follow through on that feeling.

When I receive, for example, an e-mail from the SBBA list with a great idea or reminder—Ken’s e-mail regarding filing DE 6s online or Sandy O’Meara’s recent explanation of how to use a Cash Flow Statement—I will print it out and place it in my briefcase, which goes to every appointment. I have a file in there just for these types of instructive and helpful print outs. Now, I can’t say I always know what great tips I have collected and saved in there at any given time, so I will check through it every now and then to refresh my memory. It has served me well. It’s like carrying around my very own consultant. Even some tasks (detailed or outlined) which may only be performed occasionally, are perfect candidates for this file as well. It’s my way of being able to find and utilize information at the tip of my fingers, and serve my clients better.

Separately stated charges for shipping taxable merchandise are generally not subject to sales tax if:

• The charges are for shipping the merchandise directly to the purchaser using U.S. mail, an independent contract carrier, or common carrier; and
• The amount charged is the actual cost of the transportation.

The amount charged in excess of the actual cost of transportation is taxable. Handling charges are generally taxable. A charge made for delivery by the company truck, for example, rather than by mail, is taxable.

SWEEPING TAX CONFORMITY BILLS

Governor Gray Davis signed "sweeping tax conformity bills" May 8, according to the Los Angeles Times of May 10. The bills are retroactive to the beginning of 2002 and finally make it possible for Californians to "take full advantage of the enhanced savings options approved by Congress last summer."

Our legislators "initially estimated that tax conformity would cost $44 million, but they were able to make changes—including collecting tax money sooner—to mitigate the lost revenue." Members of the California State Assembly said that they had received numerous telephone calls recently from constituents who wished to take full tax advantage of "a variety of tax changes that had been enacted last summer in federal law."

Among the changes in federal law now matched by California’s tax code:

• The limit on yearly contributions to 40l(k) and 403(b) plans is raised to $11,000 from the previous limit of $10,500 in 2002.
• Contribution limits to 457 plans—a public employee defined contribution plan that is similar to a 401(k)—are increased to $11,000 a year from $8,500.
• Annual contribution limits on IRAs are increased to $3,000 from $2,000.
• Maximum contributions to so-called SIMPLE retirement plans are raised to $7,000 in 2002 from $6,000.
• Those 50 or older [editor’s note—hurray] are allowed catch-up payments. Those contributing to an IRA or SIMPLE account may put in an extra $500 this year.
• Annual contributions to education IRAs are increased to $2,000 from $500.
• Distributions from 529 plans are tax-free when used for education. 529 plans are state-sponsored education savings accounts that do not offer an upfront tax deduction, but allow earnings to grow on a tax-deferred basis.
• Education IRA money can be used to finance private elementary and secondary school expenses.
• Individuals can contribute to an education IRA and a 529 plan in the same tax year, which was previously not allowed.
• The child and dependent care credit has been made more generous in conformity with changes in federal law. The credit will now be worth a maximum of $907 in California versus the previous limit of $416.
• Charitable contributions of appreciated property such as stock, land and art will be exempt from the alternative minimum tax.

The Times’ article notes that although there "are many differences between state and federal tax law…only a few—such as the fact that California does not differentiate between ordinary income and capital gains—affect individuals."

"Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible."
                                                             Judge Learned Hand

Just remember—legally!

A company called Tech CPAs based in Salt Lake City is seeking "to partner with a QuickBooksÒ Consultant" in our area, according to a letter I received late last month. I have never heard of them, but they claim to have developed "a highly profitable QuickBooks consulting Model." They will "present and explain this Model in a one-day course, How to Profit from QuickBooks."

If you are interested, you may visit their Website at partners.techcpas.com and click on QuickBooks Partners or QuickBooks Training, or call 800-536-5741.

An article, "Aim Low, Win Big," in the May issue of Practical Accountant talks about "lower-end" accounting software. "Accounting firms are cashing in by installing, training, and consulting on this software."

The number of users of each program is interesting:

• Simply Accounting (ACCPAC)—300,000
• Choice Technologies—6,000 plus
• MyBooks CPA Referral Program—several hundred
• MYOB—400,000
• Oracle Small-Business Suite—20,000
• Peachtree—1,000,000
• QuickBooks—2.5 million

One of my guilty pleasures (akin to reading tabloid headlines in the grocery check-out line) is reading about our elected officials’ tax returns when they make them public. For example, the Los Angeles Times reported that Vice President Cheney had an effective tax rate of 39.5% on taxable income of $4,356,625 and reported $778,068 of non-taxable municipal bond interest. President Bush had taxable income of $711,453 and an effective tax rate of 35.2%. Enron paid no corporate income four of the last five years.

Your editor this month was Julie Raffety. Jo Rogers kindly proof-read. Next month’s editor will be Jo Rogers. Thanks to those who submitted information!