Well…It’s that time of year again…Tax Time! There have been some late changes to IRS tax regulation that we wanted you to be aware of so that you are well ahead of the curve before the tax deadline. There is nothing earth shattering here, but hey, I’d rather see it in your pocket instead of Uncle Sam’s!

IRS Commissioner Mark W. Everson said, “Taxpayers will have a number of new tax benefits and features available this year. We encourage [them] to take a few minutes to review these changes, particularly those involving the recently enacted tax law provisions. The IRS will do everything it can to minimize the impact on taxpayers.” New legislation affects a number of areas of tax law, but the most significant effect on individual taxpayers involves the deductions for state and local sales tax, higher education tuition and fees, and education expenses. We recommend that you contact your tax professional to maximize these new benefits to your advantage. There are a few other new items that I thought you should be aware of as well.

The Telephone Excise Tax Refund is new this year. Individual taxpayers will be able to request a refund if they paid the federal excise tax on long-distance or bundled service. The government stopped collecting the federal excise tax on long-distance service in August and announced plans to provide refunds of these taxes billed after Feb. 28, 2003, and before Aug. 1, 2006. More than 146 million individual taxpayers are expected to request the refund.

To request the refunds, taxpayers have several options:

• Individual taxpayers can request the refund by using the standard amounts, which are based on the total number of exemptions claimed on the 2006 federal income tax return. Choosing the standard amount saves taxpayers the time and trouble of digging through 41 months of old phone bills. The standard amounts are $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four or more exemptions. For example, a married couple filing a joint return with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60. To get the standard amount, eligible individual taxpayers will fill out an additional line on their regular 2006 1040 return. (Line 71 on Form 1040; Line 42 on Form 1040A; Line 9 on Form 1040EZ.)
• Alternatively, individual taxpayers who want to request a refund of the actual amount of tax paid should figure that amount using Form 8913 and report it on their income tax return. • Alternatively, individual taxpayers who want to request a refund of the actual amount of tax paid should figure that amount using Form 8913 and report it on their income tax return.
• Businesses and tax-exempt organizations can also request a refund under a different procedure; more information is available at IRS.gov.

An additional change is the New Split Refund Option. For the first time, taxpayers can split their refunds among up to three accounts held by up to three different U.S. financial institutions, such as banks, mutual funds, brokerage firms or credit unions. To split their direct-deposit refunds among two or three different accounts or financial institutions, taxpayers should complete the new Form 8888, Direct Deposit of Refund to More Than One Account. Taxpayers can also continue to use the direct deposit line on the Forms 1040 to electronically send their refunds to one account.

Possibly my favorite improvement is the Where’s My Refund? service. Once taxpayers file their tax return, they can track their refund through the online tool “Where’s My Refund?” at www.IRS.gov. Taxpayers will need some information from their tax return in order to use the tool. You can access this secure Web site to find out if the IRS has processed the tax return and sent the refund.

Colgan Capital Update

As previously noted in our announcement, Colgan Capital is excited to announce that we have hired an additional Senior Planner. Please join us in welcoming Doug Rose. Doug will be in charge of all life and long term care insurance needs and work alongside me to assist in financial planning and portfolio management. His breadth of expertise will go a long way to improve client satisfaction.

Doug first became a Registered Representative in 1999 while working as a Financial Advisor at Merrill Lynch. He holds Series 7, 63 and 65 state and federal securities licenses as well as life and health insurance licenses. He holds a Masters degree in Finance from the elite William E. Simon Graduate School of Business at the University of Rochester. Doug lives in Pittsford, NY with his wife Wendy and children Sarah, Emily and Zachary.

Doug realizes the importance of our professional and personal relationship and looks forward to assisting you in the achievement of your goals. I trust you will find Doug to be a valuable addition to the firm.

Personal Update

The Colgan Clan is doing well on the home front. Christopher’s vocabulary is beginning to grow and Emily is already sleeping through the night! Kathy and I are so lucky to have these children. They are more fun than I could have ever imagined. Here is a picture taken at the beginning of February: