L I N D E M A N,  H U G H E S  A N D  C O M P A N Y
Certified Public Accountants
4486 Pepperwood Road
Dayton, Ohio 33321

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The "Single Participant"
401(k) Plan

       The 401(k) has been around for more than 20 years, permitting Americans to amass billions of dollars in retirement assets. Thanks to a more generous contribution calculation provided by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), millions more self-employed or small business owners with no employees (other than their spouse) have an incentive to set up a 401(k) plan. As a result, 401(k) plans have become more attractive options than SEP-IRAs, SIMPLE IRAs, profit-sharing or money purchase plans.

      You may have read about "Solo (k)," "Uni(k)," or "Individual (k)" plans. These are not new types of plans, but, rather, are just new products reflecting the more liberal contribution calculations under EGTRRA. Mutual fund companies and retirement plan providers are beginning to offer single-participant 401(k) plans that give owner-only businesses the advantages of a traditional 401 (k)—including higher contribution limits and the ability to borrow from the plan—at an affordable price.

Deducting Combined Business
Aand Vacation Travel

      If you're thinking of combining business with pleasure by adding a few days of vacation to your business trip,take the time to understand the tax implications!

      While supporting elderly parents can be financially draining, qualified taxpayers can get some financial assistance form Uncle Sam. Individuals who provide financial support for their parents may qualify for a dependency exemption on their tax returns. In addition, they may qualify for a medical expense deduction as well as a credit for dependent care expenses.

Appeal Rights

    One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

Structuring Loans to
Family Members

      Clearly, loaning money to family members is not something that should be done casually, It can damage personal relationships and cause income tax and estate planning problems, Given the complexity of the imputed interest rules and the related exceptions, it's wise to seek professional advice in structuring loans to family members.

Frequently Asked Question

Q. Can I contribute to a traditional IRA and a Roth IRA in the same year?

A. The answer is yes, but there is a single overall limit that applies to your total contributions to both types of IRA. For 2004 the limit is $3,000 ($3,500 if you're over 50). If you meet all requirements, you can put $3,000 in a Roth, or $3,000 in a traditional IRA, or you can divide the $3,000 between the two in any proportion you like. But if you put $3,000 in each (total of $6,000) you'll have an excess contribution, and the IRS will hit you with a penalty unless you correct it in time