113 Maple Road — Lexington, SC 29073 — Phone: 356-1963

I hope you have had a pleasant year. I would like to wish you a Merry Christmas and a Happy New Year. My year has been very busy as usual. Thank goodness this wasn't a year that IRS and SC decided to completely redo everything. My husband and I went to Key West in July and we got to see a beautiful sunset and sunrise. I gave up on the sunrise and the dog and I went back to bed. Well I finally cut my hair. Still haven't sent it to the Children's Cancer unit where they make wigs for children going through chemotherapy, but it is still on my desk waiting for me to find the address.

If anyone is interested, my husband and I are both in the Christmas Play at Faith Baptist Church. It will be December 22, 2002 at 7:00 p.m. The church is on South Maple just off Rosewood Drive. If you are looking for a small church with a family atmosphere this is the one. We meet at 7:30 p.m. on Wednesdays and on Sunday we have Sunday School at 10:00 and Church at 11:15. Four times a year we have a singing group on Sunday morning and the last Sunday of January through October we have a meal where all the people bring food. In November and December a date is announced for a Thanksgiving and Christmas meal. See You There!

Now on to taxes:

It's never too early to begin gathering, sorting and organizing your paperwork. Be sure to bring the following with you to your tax appointment.

W-2's: Be sure you have one for each employer you worked for during 2002. Employers have until January 31, 2003 to mail the forms to you, but sometimes delays happen.

Child Care Expenses: I need the name, address, and identification number of who you paid, as well as how much was paid per child. If you used the same child care provider I will have the name, address and identification number on file.

1099's: You will receive a 1099-INT from every payer of interest and a 1099-DIV from every payer of dividends. Your 1099-INT for checking or savings accounts at a bank may be on your 12/31/02 statement. A 1099-B is used to report the gross proceeds from the sale of securities and mutual fund shares. Sale of stock requires knowing when you purchased the stock and how much you paid for it as well as the sale price and sale date.

Other 1099 forms that may come to you include 1099-S for the sale of real estate, 1099-SSA to report social security benefits, and 1099-R for distributions from pensions, annuities and IRAs. State Unemployment, state income tax returns, and gambling winnings are also reported on separate 1099 forms. Independent contractor fees, director fees, executor and trustee fees are all reported on 1099-MISC.

Form 1098: This form reports interest you paid on a mortgage or home equity loan. Real estate taxes paid from an escrow account with the lender are also shown on this form. Mortgage interest is allowed on up to two homes. A home can be a boat, camper, motor home, etc. if it has kitchen, bath and sleeping facilities.

Schedule K-1: If you were a partner in a Partnership, a shareholder in an S Corporation or the beneficiary of an estate or trust you should receive a K-1 which is needed in order to prepare your tax return. Most of the time, K-1's are not sent by January 31st. Not all estates will have K-1's.

Purchase/Sale/Refinance of Personal Residence: Bring your closing papers. If you sold property you will need to information on when you purchased the home, what you paid for it and the cost of any improvements on the home. If you have the closing papers when the home was purchased bring them. Was any part of the home ever used as an office in the home for tax purposes?

Business Purchases: If you purchased new equipment for your business or for use as an employee, I will need the date purchased, cost and description of the item. If you purchase or trade in a vehicle I need to see the paperwork. There is an additonal 30% first year depreciation available on the federal return (not SC).

For 2002 business mileage is $.365, charitable mileage is $.14 and medical and moving is $.13 per mile. I need the number of miles and I will calculate the amount.

Charitable Deductions: A receipt is required for a single contribution of $250 or more.

Estimated Tax Payments: I need the date and amounts for each estimated tax payment. I need all payments made in 2002 and the payment made in January 2003 for the year 2002. If you make SC estimated payments I need to know the payment amount in January 2002 which would have been for the 2001 year. (This is an itemized deduction for the year paid.)

Hope and Lifetime Learning Credits: Don't forget the amounts you paid for education expenses for you, your spouse and your dependents and the interest on student loans.

New Dependents: If a child was born in 2002 or you completed the adoption process for a new dependent, please provide a copy of the social security card, and the complete date of birth.

IRA's and other Retirement Plans: IRA contributions has been increased from $2000 to $3000. Most retirement plans, including IRA's have catch up provisions for people age 50 or more by 12/31/02. This allows you to put more in your retirement plan. Most plans have to be established by 12/31/02 but still allow for money to be put in by 4/15/02.

Educators: (teachers, instructors, counselors, principals who work in elementary or secondary education and work at least 900 hours in a year) You can now deduct up to $250 in qualified expenses (books, supplies and equipment) even if you do not itemize. This is allowed only on the federal return.


Happy Holidays!!!

Adoption Credit is now $10,000 per eligible child. (No you can't adopt your spouse's, girlfriend's or boyfriend's child and get this credit.)

If your company or the company you work for does not have a retirement plan, there is a $500 credit for Pension Plan startup costs.


Now to items even more depressing, do you have the following?
  1. Will: If you can't afford an attorney, there are computer programs and fill in the blank forms available, however, attorneys are not that expensive for a will. If you do not have a will the state decides who receives your assets. I do not know about you, but most people have personal items that have been passed down from generation to generation or collectibles that are valuable. Do you want to designate who receives these items? If you have young children make sure you have something in writing to who will take care of your children. Make sure the person you select is willing to take care of your children. You should select who will be in charge of handling your estate for you. Please talk with them to make sure they are willing and let them know where to find your will and other important papers.
  2. Living Trust: This may or may not be something you want. It is used more for people who have large estates in order to avoid taxes but there are reasons others may want to have them. It is especially useful when there are young or handicapped children. In a Living Trust you will assign a trustee to handle the trust. Make sure the person is available and knows your wishes.
  3. Durable Power of Attorney (POA): This is a power of attorney where someone can handle your business or financial affairs if you become unable to.
  4. Health Care Power of Attorney: This is a power of attorney for Health Care matters.
  5. Living Will: Under what conditions do you want to receive medical care?

On the Powers of Attorney, make sure you can trust whom you designate, list a 2nd designee in case the first is unable. Make sure they know your wishes.

This section is not meant to disturb you but I can not stress how important these matters are.

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