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Archive for September, 2009


Autos Purchased in 2009

2009 September 25
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The “Cash for Clunkers” program this summer was a big hit with consumers. Today the Department of Transportation announced that almost 700,000 cars were purchased under the program, netting consumers credits of $3400 – $4500 off the purchase price with no federal tax consequence. In most states, the sales tax was charged on the full price of the automobile, before the credit was applied. This was not popular with some buyers who viewed the credit as a reduction in the price of the auto, rather than as a government assist in paying the full price of the car.

In any event, sales and excise tax on new automobiles has long been a deductible item on Schedule A for those eligible to itemize. The great news is, for new vehicles purchased between 17 February and 31 December 2009, these taxes may be deductible, even for those who do not itemize. The deduction is limited to taxes paid on vehicles valued up to $49,500; it is phased out for high income taxpayers.

Taxpayers living in states with no sales tax, such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon, can deduct “fees or taxes … assessed on the purchase of the vehicle and … based on the vehicle’s sales price or as a per unit fee.”

Should I Upgrade to Windows 7?

2009 September 25
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Windows 7 is launching on October 22 with the big marketing blitz already underway. By many accounts it is the best operating system Microsoft has ever produced. So, the question is, “Should I upgrade?” The short answer is, “Not right away.”

For a business owner, there are just too many issues and risks associated with being an “early adopter” of something that can profoundly affect the operation of your business. It is best to take a wait and see approach to these things.

Among the many issues you must address, compatibility with existing computer hardware and with applications you use to run your business are primary concerns.

  • From a hardware perspective, if you are running Windows XP, your hardware probably does not support Windows 7. Even if it does, the upgrade process – Microsoft calls it a “custom install” – is not for the faint-of-heart. You will need to copy all of your files to a backup device, wipe out everything on your hard drive, install Windows 7, copy all of your files from the backup, and then to reinstall all of your applications from their original CDs. If you are running Microsoft Vista, and if you choose just the right upgrade path, you may be able to do an “in-place upgrade” which does not require wiping your hard drive.
  • From an applications perspective, while Microsoft has given software developers ample time to prepare, the norm is for some to be ready and some not. If your software maker is ready, it may require a paid upgrade to get a Windows 7 compatible version. For example, Intuit, maker of QuickBooks accounting software used by many small businesses, is only supporting the just-released QuickBooks version 2010 on Windows 7.

Our advice for most business owners is to wait until you are ready to buy new hardware and then buy it with Windows 7 already installed. Of course, be sure your business applications will run under Windows 7 before you upgrade your systems.

The Wall Street Journal’s Walt Mossberg writes excellent technology columns for non-techies. His Windows 7 upgrade articles are here, here, and here.

In summary, unless you have very new hardware running Windows Vista and your business applications already support Windows 7, do not upgrade.

If you really want to migrate from Windows XP to Windows 7, in most cases you should buy a new computer with Windows 7 already installed and plan on purchasing upgrades to your business applications.

But, we recommend waiting until the initial bugs are shaken out of Windows 7 and until all of your vendors have produced Window 7-compatible versions of their software.