News

Turbulent Times Call for Surefooted Advice

The Business Gazette, January 2, 2009

The current economic downturn "is forcing both individuals and businesses to make tough financial decisions, some of which need to be made by year's end," says Charles B. Postal, CPA, managing partner of Santos, Postal & Company, P.C. Certain decisions may have a domino effect - impacting sometimes seemingly unrelated areas - and should not be made  in a vacuum. "When the waters get rough, it's time to huddle with those you trust to guide you through the storm," he
says.

Since 1971, this Rockville-based accounting firm has focused on helping small- and mid-sized businesses as well as individuals, particularly those considered high wealth, navigate the financial seas, regardless of whether the sailing is smooth or rough. "We've been in the game a long time and know all the ins and outs and how they apply to you and your situation," says Postal.

Having experienced recessions before, Postal recommends that individuals quickly figure out where their portfolios stand. "Lots of people are wondering now whether they can afford to meet with a financial planner. In many cases it may be they really can't afford not to," he says.

With the end of the tax year in sight, among the decisions individuals must make is whether to sell stock. "If you had gains earlier in the year, it might be time to incur some losses. Individual situations vary as do the applicability of special rules for capital gains and losses. Now is the time to discuss this with an advisor," he says.

Those eyeing retirement also should meet with a financial planner. "Anyone thinking of retiring soon should be running to a financial advisor," says Postal. "This is not the time to work with amateurs. You need to find someone with experience, who you feel you can trust, and with whom you are comfortable working. The results of this relationship may influence how well you are able to live during your retirement years."

Everyone, suggests Postal, should do a little "soul searching and decide whether you have the stomach for the risk inherent in marketable securities. You, like many others, may find your portfolio is really too aggressive for your personality or for where you are in life. Now is the time to reevaluate your risk tolerance," he says.

The upcoming change in administrations also is cause for portfolio review. "During the campaign, Barack Obama promised to roll back the Bush tax cuts," says Postal. "Since then, his aides have indicated that the cuts might simply be allowed to expire in 2010. We really don't know when things will happen."

Rather than having to scramble later, Postal suggests individuals work out a strategy with their advisors that can be implemented at a certain time or under certain circumstances. "No one likes to pay taxes sooner than they have to. So, many may choose to wait before selling. But those who don't like uncertainty may decide to take capital gains sooner," he says.

The current economy does offer some opportunity for individuals. "It's not all gloom and doom," says Postal. "Someone whose been saving for a car can get a real bargain right now; the same goes for homebuyers."

Businesses, too, find themselves having to make decisions. While many are holding off on major purchases to "build a war chest of cash to see them through these challenging times," says Postal, the Economic Stimulus Act of 2008 offers a first-year bonus depreciation write off that allows an immediate deduction of 50percent of the cost of a qualifying new asset. A near doubling of the Section 179 deduction to $250,000 for qualifying assets placed in service this year can, in certain cases, be combined with the bonus depreciation thereby making late December equipment purchases a smart move for some companies.

In 2009, retailers, restaurant owners and other lessors may benefit from more generous depreciation rules. Given the state of the economy, Santos indicates that Congress might consider increasing the Section 179 deduction, as it is slated to return to $133,000 on December 31, 2008, and extending the bonus depreciation. "We have people pouring over the list of potential and new tax law changes so that we can help you figure out which pertain to your business and offer you the best advantage," says Postal. ''

In addition to the federal tax code, Santos, Postal & Company stays abreast of changes in state laws. "State tax returns have become increasingly complex. The more sophisticated your investments and the more states in which you are operating, the more you need to rely on a seasoned tax professional," Postal says. "Your time is better spent on what you do best. There's no sense muddling through your taxes on your own, with the possibility of costly mistakes, when you can turn to a skilled professional."

Businesses looking to "weather this economic storm and prosper when the time is right, should be consulting with their accountant," says Postal. "They should be doing a cash-flow projection going out a year or so and turning their focus back to the fundamentals."

Having invested heavily in technology, state-of-the-art equipment, and software, Santos Postal is able to provide unparalleled support to its knowledgeable, experienced accountants and financial advisors. "I truly believe," says Postal, "that we at Santos, Postal & Company are the best tool available to guide businesses and individuals through these troubled times."

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