March 11, 2009

Dear Clients and Colleagues,

It's tax season. How exciting! Actually there are some low-hanging fruit that you should look at carefully. Your circumstances may have changed in the last year and you now qualify for goodies (that's a CPA technical term) that you didn't before.

First, did you receive your "Recovery Rebate Check" last year? If you did not receive one or did not get the full amount ($600 for singles and $1,200 for married filing jointly), you might qualify for more now. The checks were based on 2007 income. But you might have had investment losses in 2008, reducing your income and increasing your rebate. Or i you had a baby in 2008, you might be eligible for $300 more. Bryna and I blew it, our twins were born in 2009.

Second, did you contribute the full amount to your IRA? You have until April 15, to do so. The limits are $5,000 per person with an additional $1,000 for those of you over 50 years young, as long as you had at least that amount in wages. If you are covered by a retirement plan at work and earned over $63,000 for single filers or $105,000 for married filers, you cannot deduct your contributions. However, you still can contribute and your money will grow tax-deferred until you withdraw it during retirement. At retirement, your withdrawals will be taxed as ordinary income.

Another terrific strategy is a Roth IRA. Your allowable contribution will be reduced if you made more than $101,000 as a single filer, or $159,000 as a married filing jointly filer. With a Roth IRA, you contribute after-tax money, but when you withdraw it, it is completely tax-free.

Finally, grandma and grandpa can each give an adorable grandchild up to $13,000 gift-tax-free. So together they can give each grandchild up to $26,000. If you do this through a 529 College Savings Plan, you maintain control of the money, but your grandchild can withdraw funds tax-free to pay for college. Another great deal! Ask us how to set up one.

There is a lot more to discuss, but it will have to wait until my next newsletter. I want to keep this short and sweet.

If you have any questions or need any help, please contact my Financial Assistant, Evan Press, at 818.887.9401 or by Email at evan.press@lpl.com.

In fact, if you have any questions about your tax or financial situation, need advice before you set up a 529 College Savings Plan, make an investment or a big purchase, or want help making sure that you can meet your financial goals, please contact us. Also, if you know someone who could benefit from our services, please contact us. We would love an introduction. We are a full-service financial firm, with experts in estate planning, taxes and investments.

Steve H. Hornstein, CPA, Esq., LL.M., CFP™
Hornstein Financial
20335 Ventura Blvd., Suite 203
Woodland Hills, CA 91364
Office: (818) 887-9401
Fax: (818) 887-7173
Toll-free: (888) 280-8100
www.hornsteinfinancial.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult myself or your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

This document is for information purposes only and is not intended to be an offer or solicitation. The past performance of securities or other investments does not necessarily indicate or predict future performance.

The information in this document is not intended to provide individual tax advice. You should consult either your tax advisor or me for specific guidance.