AHLBECK & COMPANY MERGES WITH
PARKER & MELTZER

Ahlbeck & Company has merged with the full-service auditing and consulting firm Parker & Meltzer effective July 1, 2008. After the merger, services will be provided under the name Ahlbeck & Company.

“We are committed to high quality personalized service, and the continuing expansion of our firm allows for greater efficiency and expertise in serving our clients,” said Thomas H. Ahlbeck, principal. “We welcome our new clients,” added Dirk T. Ahlbeck, principal, “and look forward to serving them with the experience and professionalism to which they are accustomed.” Ahlbeck & Company was established in 1962 by Harold A. Ahlbeck and has been managed by his two sons since 1990.

This merger is the second transaction this year to expand the firm. Ahlbeck & Company acquired James P. Karol and Associates, Ltd. this past May. Firm development and growth have also been driven in recent years by the merger with Walton, Joplin, Langer & Co. in 2004 and the 2005 acquisition of Boxleitner Financial Services.

“The professionals at Ahlbeck & Company are committed to client service, and we look forward to a smooth transition between the firms,” said Richard J. Meltzer, CPA and William J. Parker, Jr., CPA. Parker and Meltzer started their full-service auditing and consulting firm in 1983 and serve a variety of clients including both individuals and corporations.

Thomas H. Ahlbeck, CPA, Principal, recently provided tax advice on the FM radio show "Impact," a segment on WTMX-FM 101.9.

"Taxpayers need to understand basic concepts to minimize tax liability and plan for the future," said Ahlbeck. During the show Ahlbeck addressed a variety of topics including the kiddie tax, charitable contribution rules, alternative minimum tax (AMT) pitfalls and IRA options. With nearly 30 years of tax expertise and public accounting experience, Ahlbeck has been featured annually on "Impact" during the past tax seasons.

Hosted by Oakton Community College (OCC) faculty member Bob Burton, "Impact" focuses on issues and trends of concern to the community. Sponsored by THE MIX and OCC, the show aired on Sunday, February 24 and April 6 at 6:25am. To hear the radio broadcast, click here.

In December 2007, Ahlbeck was featured on "Impact" to discuss saving for college as well as various education deductions and credits. "Escalating college expenses make saving for education a real challenge. It's important to understand what options are right for you," noted Ahlbeck.

AHLBECK & COMPANY EXPANSION CONTINUES

Ahlbeck & Company has acquired the accounting and tax practice of James P. Karol and Associates, Ltd. effective May 1, 2008. After the merger, the businesses will operate under the name Ahlbeck & Company. "Our firm is committed to serving all of our clients with the highest quality service through efficiency, accuracy and experience," stated Thomas H. Ahlbeck, principal. "We welcome our new clients," added Dirk T. Ahlbeck, principal, "and look forward to serving them with the expertise and personal service to which they are accustomed."

Ahlbeck & Company was established in 1962 by Harold A. Ahlbeck and has been managed by his two sons since 1990. Firm development and growth have been driven in recent years by the merger with Walton, Joplin, Langer & Co. in 2004 and the 2005 acquisition of Boxleitner Financial Services.

"Ahlbeck & Company is a well-established firm with a heritage of excellent client service and I am looking forward to working with their professionals," said James P. Karol, CPA. In private practice since 1982, Jim Karol will continue to work with his clients in making a smooth transition between the firms.

MANUFACTURING MACHINERY AND EQUIPMENT EXEMPTION

What is it? The Manufacturing Machinery and Equipment Exemption provided by the state of Illinois has been expanded to include purchases on production-related tangible personal property. By filing the appropriate forms, companies can receive a 5% refund of sales tax paid on these items.

What Qualifies? The credit applies to any purchases of production related tangible personal property from July 1, 2007 to June 30, 2008. Related tangible personal property is anything used or consumed in a production related process by a manufacturer including items used in research and development, material handling, receiving, quality control, inventory control, storage, staging, and packaging for shipping and transportation purposes. It does include fuels, coolants, solvents, oils, lubricants, cleaners and adhesives.

These purchases must be items that you paid sales tax on when purchased. Also, the amount of sales tax paid is excluded when calculating the amount of the credit.

An Illinois Department of Revenue publication provides additional information as well as how to file for the exemption with references to the two related forms (Form ST-60 and Form ST-61).

If you have any questions or would like some help completing these forms, please contact our office and we will be happy to assist you.

Pursuant to Internal Revenue Service Circular No. 230, be advised that the information contained herein was not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding any Internal Revenue Code penalties that may be imposed on the taxpayer. It was written with the intent of disseminating general information related to the transaction(s) or matters(s) addressed herein.

TAXES: THE GOOD NEWS AND BAD NEWS

Tax Rebate Checks
Under the Economic Stimulus Act of 2008 (ESA), nontaxable rebate checks will be sent out beginning in May. Eligible taxpayers must have a valid Social Security number, qualifying income of $3,000 and file a 2007 federal tax return. Individuals who are eligible will receive up to $600 ($1,200 for married couples) and parents will receive an additional $300 for each eligible child younger than age 17. There are phase-out income levels, so those with higher income may receive a reduced payment or none at all.

You won’t get a stimulus payment if (1) you don’t file a 2007 return, (2) your net income tax liability is zero and your qualifying income is less than $3,000, (3) you can be claimed as a dependent on someone else’s return, (4) you do not have a valid Social Security number or (5) you are a nonresident alien.

Retirees, disabled veterans and low-wage workers usually exempt from filing must do so this year in order to receive a stimulus payment. The ESA allows recipients of Social Security, certain veterans’ benefits and Railroad Retirement benefits to count these benefits toward the qualifying income requirement of $3,000. To get the payment, they must file a 2007 tax return using either Form 1040 or the short Form 1040A.

Business Tax Incentives
The ESA also contains provisions to encourage businesses to increase investment in new equipment in 2008. Under the ESA, the IRS Code Section 179 depreciation expense limit in 2008 is increased from $128,000 to $250,000, subject to phase-out when asset purchases exceed $800,000 (previously $510,000). The ESA also allows a bonus first-year depreciation deduction of 50% of the adjusted basis of qualified property placed in service during 2008. Qualified property includes new MACRS property with a recovery period of 20 years or less, which applies to most business equipment and machinery.

Increase in Sales Tax Rates
Effective April 1, sales tax rates will increase .25% in Cook County and .5% in the collar counties (DuPage, Kane, Lake, McHenry and Will). In addition, effective July 1, the Cook County Board approved an increase in its share of the state sales tax, raising rates an additional 1%. This means Chicago will have a 10.25% sales tax rate, the highest of any major U.S. city. Since home-rule municipalities can set higher rates, how much more you’ll actually pay depends on where you shop. Business owners that collect sales tax may need to adjust their cash register and any computer programs for these upcoming increases to collect and pay the correct amount of sales tax.

Note: If you make estimated tax payments, the first 2008 estimate is due April 15, 2008!

Financial & Business Information is emailed periodically by Ahlbeck & Company. Since the information contained herein is of a general and summary nature, no final conclusion should be made without further review. For additional information, please contact a member of our firm.

CHANGES TO ILLINOIS INCOME TAX WITHHOLDING LAW
(new payment and filing due dates)

Effective January 1, 2008, Illinois withholding deposits will be due when federal deposits are due. All taxpayers who withhold Illinois tax will be assigned to one of three due date schedules (semi-weekly, monthly or annual) determined by total tax withheld during the "look-back" period (July 1 through June 30 of the immediately preceding year).

If you are assigned a semi-weekly due date schedule, your schedule will not change during the year. If your withholding exceeds $12,000 during any quarter, you must begin to make your payments and file your returns in the following quarter, the remainder of the year and the subsequent year using the semi-weekly due date schedule.

Also, starting in 2008, Form IL W-3 will no longer be required.

For more specific details as well as payment and filing due date schedules, see
http://www.revenue.state.il.us/Publications/Bulletins/2008/FY-2008-05.PDF or contact a member of our firm.

A rigorous independent peer review of the accounting and auditing practice of
Ahlbeck & Company was recently completed with positive results. The
reviewer concluded the firm successfully complies with the applicable
professional standards as well as the stringent quality control standards set by the American Institute of Certified Public Accountants (AICPA).

Since 1991, Ahlbeck & Company has participated in the AICPA Peer Review Program in fulfillment of the AICPA requirement dictating an independent review
of the accounting and auditing practice of members in public practice every three years. “Our participation in peer review demonstrates our firm’s desire to measure up to the profession’s high standards and our commitment to maintaining and improving the quality of our practice,” commented Dirk Ahlbeck, co-principal.

A peer review is performed by a qualified licensed, independent CPA. The
objective is to determine whether a CPA firm has an adequate system of
quality control and has adhered to established professional standards. Ahlbeck & Company has consistently received an unmodified opinion as a result of their peer reviews, an accomplishment achieved in about 85% of peer reviews.

“Ahlbeck & Company is proud of the continuing positive results of our peer
reviews. This is an ongoing dynamic process we use to foster quality performance, maintain and strengthen internal controls and better serve the needs of our clients,” declared Ahlbeck.