You can obtain a status report on your refund by accessing these web sites
Federal or Colorado

The standard mileage rate for the cost of operating your car, van, pickup, or panel truck in 2006 is 44.5 cents a mile for all business miles.

If you are a US citizen or resident, you must file a return if you are under 65 and :
Single and gross income is at least $8,200
Married Filing Jointly and gross income is at least $16,400
Married Filing Separately and gross income is at least $8,200
Head of Household and gross income is at least $10,500

Or, if you are over 65 and:
Single and gross income is at least $9,450
Married Filing Jointly and gross income is at least 18,400
Married Filing Separately and gross income is at least $8,200
Head of Household and gross income is at least $11,750

There are additional exceptions and requirements, but these will vary on an individual basis.

You must comply with both the U.S. and your country's filing requirements, if any. In the United States, you generally are required to file a return if you have income from the performance of personal services within the United States for the majority of the tax year. However, under certain circumstances, that income may be exempt from payment of U.S. tax pursuant to the one of the U.S. income tax treaties held with other countries. You need to determine what type of visa you have, and how that impacts your residency status in the United States. If, based on the tax code and your visa status you are treated as a U.S. resident, then your entitlement to treaty benefits will be impacted. You must contact your country’s government to determine whether you must file a tax return and pay taxes in your current country of residence.

Individual returns must be filed each year by April 15.

If you cannot file your return by April 15, you may request a six month extension on Form 4868. This extension must be filed by April 15. It is important to note that this extension is only an extension to file your return, not an extension to pay. You will owe interest and penalties if you owe tax and the tax is not paid in full by April 15th.

Here are the web sites that you can visit to obtain forms and make additional inquiries or you can contact The Shafer Group to find out how.

For Individual
Federal or Colorado

For Businesses
Federal or Colorado

Filing Status - Single
If taxable income is  over--	But not over--	The tax is:
$0	$7,550	10% of the amount over $0
$7,550	$30,650	$755 plus 15% of the amount over 7,550
$30,650	$74,200	$4,220.00 plus 25% of the amount over 30,650
$74,200	$154,800	$15,107.50 plus 28% of the amount over 74,200
$154,800	$336,550	$37,675.50 plus 33% of the amount over 154,800
$336,550	no limit	$97,653.00 plus 35% of the amount over 336,550

Filing Status - Married Filing Jointly or Qualifying Widower
If taxable income is  over--	But not over--	The tax is:
$0	$15,100	10% of the amount over $0
$15,100	$61,300	$1,510.00 plus 15% of the amount over 15,100
$61,300	$123,700	$8,440.00 plus 25% of the amount over 61,300
$123,700	$188,450	$24,040.00 plus 28% of the amount over 123,700
$188,450	$336,550	$42,170.00 plus 33% of the amount over 188,450
$336,550	no limit	$91,043.00 plus 35% of the amount over 336,550

Filing Status - Married Filing Separately
If taxable income is  over--	But not over--	The tax is:
$0	$7,550	10% of the amount over $0
$7,550	$30,650	$755.00 plus 15% of the amount over 7,550
$30,650	$61,850	$4,220.00 plus 25% of the amount over 30,650
$61,850	$94,225	$12,020.00 plus 28% of the amount over 61,850
$94,225	$168,275	$21,085.00 plus 33% of the amount over 94,225
$168,275	no limit	$45,521.50 plus 35% of the amount over 168,275

Filing Status - Head of Household
If taxable income is  over--	But not over--	The tax is:
$0	$10,750	10% of the amount over $0
$10,750	$41,050	$1,075.00 plus 15% of the amount over 10,750
$41,050	$106,000	$5,620.00 plus 25% of the amount over 41,050
$106,000	$171,650	$21,857.50 plus 28% of the amount over 106,000
$171,650	$336,550	$40,239.50 plus 33% of the amount over 171,650
$336,550	no limit	$94,656.50 plus 35% of the amount over 336,550

The contribution limits for both the Traditional and Roth IRA for 2006 and 2007 is $4,000 with a “catch up” contribution of $1,000 for those age 50 and over. There are several factors to determine the deductibility of Traditional IRA contributions and the eligibility of Roth IRA contributions based upon adjusted gross income and participation in other retirement plans. Each situation is different and there are penalties for contributing to these accounts when not eligible, so it is best to contact your tax advisor before making any contributions.

While the Traditional and Roth IRA have different eligibility requirements, the main difference between the Roth IRA and the Traditional IRA is when taxation occurs. A traditional IRA is considered “Pre” tax thus reducing your taxable income in the year contributed. A Roth IRA is “Post” tax thus not reducing your current year taxable income. When distributions are taken after 59 ½ from a Traditional IRA both the contributions and the earnings will be part of your taxable income. Roth contributions and earnings will be distributed free of tax. In short you pay tax on a Roth now and a Traditional later.

HSA's are savings accounts formally set up with a financial institution and specifically designated for the purpose of allowing individuals to save for current and post-retirement qualified medical expenses on a tax-free basis.  Contributions are tax-deductible (within limits), earnings are not taxable, and distributions to pay for qualified medical expenses are not includible in income.

Below is a partial list of items which may be eligible as a deduction for businesses. Some of these items may be partially deductible. See IRS Publication 17 for more information.

Cost of Goods Sold Examples
Purchases / Materials
Salaries & Wages
Supplies
Subcontractors

Expenses Examples
Accounting
Advertising
Amortization
Auto Expense
Bad Debt
Bank Charges
Charitable Contributions
Commissions
Contract Labor / Temp Labor
Credit Card Processing Fees
Delivery & Freight
Depreciation Expense
Desk Fees
Dues & Subscriptions-deductible
Dues & Subscriptions (non-deductible)
Employee Benefit Programs
Equipment Rental
Franchise Fees
Gifts
Insurance-Autos & Trucks
Insurance-General Property & Liability
Insurance-Group Health/Life
Insurance-Officers' Life (non-deductible)
Insurance-Workers' Compensation
Interest
Internet / On-line Services
Janitorial
Laundry & Cleaning
Lease Expense
Legal & Professional
License & Permits
Management Fees
Meals & Entertainment
Meetings & Conferences
Miscellaneous
Office Expense
Outside Services
Parking & Tolls
Payroll Processing Fees
Pensions, Profit-sharing plans
Postage
Printing
Professional Development / Education
Promotion
Rent
Repairs & Maintenance
Salaries & Wages - Administrative
Salaries & Wages - Officers
Security
Supplies
Taxes-Payroll, Property
Telephone
Tools
Trash Disposal
Travel
Uniforms
Utilities
Warehouse & Storage

A taxpayer must itemize deductions, file Form 1040 and Schedule A to deduct charitable contributions for income tax purposes. IRS Publication 78 provides a comprehensive list of organizations that qualify to receive charitable contributions that are deductible for income tax purposes. When a taxpayer makes a contribution to a charitable organization, the organization should also be able to communicate to the taxpayer whether a contribution to the organization is deductible for income tax purposes.

As a general rule, money or property given to the following types of charitable organizations are deductible for income tax purposes:

Churches, synagogues, temples, mosques, and other religious organizations.
Federal, state, and local governments, if contribution is solely for public purposes.
Nonprofit schools, hospitals, and volunteer fire companies.
Public parks and recreation facilities.
Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy / Girl Scouts, Boys / Girls Club of America, etc.
War veterans’ groups.
Please consult IRS Publication 78 or your tax advisor for additional information.

In addition, the following is also deductible for income tax purposes to a qualifying organization:

Charitable travel (actual expenses or 14 cents per mile for 2006).
Volunteer out-of-pocket expenses when serving for a qualified organization.
Delegate to a church convention – Unreimbursed expenses of attending.
Exchange students – Deduct up to $50 per school month for housing an exchange student (grade 12 or lower) sponsored by a qualified organization. The student does not have to be a foreign student as long as the student becomes a member of the taxpayer’s household under a written agreement between the taxpayer and the charitable organization.

Foster parents – If there is no profit motive, deduct expenses exceeding payments received from a charitable organization for providing support for qualified foster care individuals placed in the home.

As a general rule, money or property given to the following types of organizations are not deductible for income tax purposes:

Civic leagues, social and sports clubs, labor unions, and chambers of commerce.
Foreign organizations.
Groups that are run for personal profit.
Groups whose purpose is to lobby for law changes.
Homeowners’ associations.
Individuals.
Political groups or candidates for public office.
Cost of raffle, bingo, or lottery tickets.
Dues, fees, or bills paid to country clubs, lodges, fraternal orders or similar groups.
Qualified tuition expenses.
Value of blood given to a blood bank.
Value of time or services rendered by the taxpayer.
Rental value of a timeshare donated to charity, such as the right to stay at it for one week. The ownership interest in the timeshare must be donated to charity to make the contribution deductible.

There are limits on the deductibility of charitable contributions. Donations of cash or unappreciated property to an organization that qualifies as a 50% limit organization cannot exceed 50% of the taxpayer’s AGI. There are special rules and exceptions for capital gain property and other types of property donated to organizations that may not exceed 20% or 30% of a taxpayer’s AGI. Please consult IRS Publication 526 or your tax advisor for additional information.

The IRS provides certain guidelines for substantiating a deductible charitable contribution if a cash donation is for less than $250.

Cancelled check or account statement.

Receipt (letter or statement from the organization, with the date and amount of the contribution) or there reliable written records with the date and amount given and the name of the organization.

For cash donations that are for $250 or more, a charitable organization is required to furnish to the taxpayer an acknowledgment letter that includes the deductible charitable contribution amount and contribution date.

General recordkeeping requirements for noncash contributions:
Name of charitable organization.
Date and location of contribution.
Reasonably detailed description of contributed property.
Fair market value and method of valuing the property.
Cost or other basis of the property if FMV must be reduced.

Please consult IRS Publication 526 or your tax advisor for additional information.

Taxpayers must be prepared to substantiate auto deductions with adequate records or sufficient evidence, either written or oral.

Taxpayers should be able to substantiate the following terms:
The amount of each expenditure for the vehicle, including purchase price, vehicle improvements, gas and oil expenditures, repairs and maintenance, insurance, auto license, personal property taxes, lease payments, and car loan interest (only in certain situations).
The total mileage on the vehicle each year and a breakdown of the business, personal, and commuting miles.
The date of each expense or use, and the business or investment reason for each expense or use of the vehicle.

Records should be maintained in an account book, diary, log, trip sheet or similar record near the time of usage. Without a written record of business or investment mileage, a taxpayer will have to convince an IRS agent with other corroborating evidence alone.

Actual expenses can be tracked with ease. A gas / credit card will aid a taxpayer in tracking gasoline and oil change expenditures for a particular vehicle that is used for business purposes. Repairs and maintenance may also be tracked through the use of a credit card or maintaining receipts. The remaining actual auto expenses listed above a taxpayer will be able to substantiate through bill / payment receipts or third party verification.

For mileage tracking, several methods are available for a taxpayer to utilize:
1)  Record beginning odometer mileage at the beginning of the tax year and the ending odometer mileage at the end of the tax year – this will equal your total mileage driven for that particular tax year. Calculate the business use % or business miles driven during the tax year.
2)  Once again, record beginning odometer mileage at the beginning of the tax year and the ending odometer mileage at the end of the tax year. Maintain a log or spreadsheet of the daily / weekly business miles driven during the tax year.

A taxpayer should maintain records to substantiate both mileage information and actual auto expenses. The IRS permits a taxpayer to deduct the greater of the standard mileage rate calculation or actual expenses (there are exceptions to this). Remember that commuting mileage (from the home to the office) is not deductible. Please consult your tax advisor for additional information.

Usually, there are no taxes to the beneficiaries on inherited property or money and no need to report such inheritances on their income tax returns. However, if the item has not been subjected to income tax at the decedent's level, it will be subject to income tax at the beneficiaries' level. Common examples of items inherited that would be taxable to the beneficiary include annuities, certain IRA's, interest, deferred compensation, dividends, pensions and installment sales.

A Gift Tax is applied on the transfer of wealth to a non-spouse for which adequate consideration has not been received. A gift tax return will need to be filed by the person making the gift (donor) if a gift to a single recipient (donee) of more than $12,000 is made in a single year. Although, the Gift Tax Return is required at this level of gifting, there is still a "lifetime exclusion" amount which each donor is allowed before any tax will be due.

You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips and other compensation, federal and state withholdings, social security and Medicare taxes. Use 1099-MISC, Miscellaneous Income, to report certain payments you make in your business. These payments include the following:
Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants or directors.
Rent payments of $600 or more, other than rents paid to real estate agents.
Royalty payments of $10 or more.
You also use Form 1099 MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment.

In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence is considered.

Facts that provide the evidence to the degree of control and independence are determined by 20 common law factors which fall into the following three basic categories:

I. Behavioral Control

Determine whether the business has a right to direct and control how the worker does the task for which the worker is hired.

II. Financial Control

Determine whether the business has a right to control the business aspects of the worker’s job.
The extent to which the worker has unreimbursed business expenses.
The extent of the worker’s investment.
The extent to which the worker makes his or her services available to the relevant market.

III. Type of Relationship

Determine whether or not the business provides the worker with employee-type benefits (insurance, pension plan, vacation pay) and / or have specific written contracts.
Permanency of the relationship.
For more information, see the Internal Revenue Service Publication 15-A

To receive a more thorough analysis to determine if you are an employee or sub-contractor please contact The Shafer Group.

105 and 125 Plans refer to IRS Code Sections 105 and 125 which regulate "Cafeteria Plans" (also known as flexible benefit plans).  Cafeteria plans are employer-sponsored benefit plans that allow employees to choose from a "menu" of cash and non-taxable benefits (such as accident and health coverage, group-term life insurance coverage, or coverage under a dependent care program) while providing tax advantages to both employees and employers

The sale of a principal residence is generally not reported on a taxpayer's return unless the taxpayer has gain and:
Does not qualify to exclude all of the gain (see exclusion rules below), or elects not to exclude the gain

Sale of Residence Exclusion Rules (Section 121 Exclusion)

A taxpayer can exclude from income up to $250,000 (Single) and $500,000 (Married Filing Jointly) of gain under the following conditions:

Ownership and Use:
The taxpayer must have owned and used the home as a principal residence for at least two out of the five years prior to the sale (the two years do not have to be consecutive). There are special ownership and use exceptions for members of uniformed services.
Reduced exclusion rules apply if ownership and use test is not met when the primary reason the taxpayer sold a main home was due to:  1) A change in place of employment; 2)  Health; or 3) Unforeseen circumstances.

Frequency Limitation:  The exclusion applies to only one sale every two years.