January 15, 2008

Tax Season - 2007 Income Tax Return Preparation

Important Dates

Individual Data Organizers Due – Monday, March 10, 2008

Individual Tax Returns Due – Tuesday, April 15, 2008

Individual Extension Requests Due – All Available Tax Data Due – Monday, March 31, 2008

Electronic Filing Cut Off Date – Monday, March 31, 2008

Entity Financial Data Due Date – Corporations, Partnerships, LLCs – Monday, February 11, 2008

Entity Tax Returns Due – Corporations – March 17, 2008 and Partnerships & LLCs - April 15, 2008

New This Year

Major Tax Law Changes - We continue to anticipate numerous corrected Forms 1099 from brokerage firms reporting interest, dividend and capital gains & losses. These anticipated corrected Forms 1099 will, again this year, cause delays in completing many of our clients' income tax returns for 2007. Individual extension requests will now be for a full six month period through October 15, 2008. The second extension request, normally due August 15th, is no longer necessary. In addition, California requires that 100% of tax returns prepared by the larger paid preparer firms, including Jorstad Incorporated, be filed electronically for 2007. We began using electronic filing to expedite the receipt of tax refunds several years ago. The process has been improved in the past few years and almost every return, regardless of complexity, can be e-filed. You will be provided with a paper copy of your income tax returns to review before you authorize us to release your income tax returns for electronic filing. This will require that you sign, date and return to our office Form 8453 which will be provided to you with your paper copy of your income tax returns. We would appreciate your reviewing and returning Form 8453 to our office as soon as possible after receiving your income tax returns to allow us to get your tax returns filed as soon as possible and to expedite the processing of your refunds. If there is tax due with your return, you may electronically file early in the season and delay your payment until April 15th.

Employees - Consistent with the 2006 tax filing season, John Kirk, CPA/MA Tax and Radoslav Simeonov, MBA along with Gaylene DeBisschop will handle the bulk of the income tax interviews and tax return preparation. Steve Miller, CPA continues to provide contract services to a number of our firm’s clients.

Nance Dunev will once again join us for the 2007 income tax season to provide accounting and bookkeeping support for our clients as they organize their financial information to the income tax preparation process.

Appointments - We have not pre-assigned appointments this year. Please call Nyree Hotchkiss to make your tax appointment now since meeting times fill up quickly. Most of you will be seeing Gaylene, John or Rado for your initial tax preparation meeting. Tim will be available for the latter part of the tax appointment to do planning for 2007 and answer questions that may come up during your tax return interview meeting.

E-Mail & Web Site - Jorstad Incorporated's web site provides company information, financial tools such as loan amortization calculators, newsletters and other articles concerning financial and tax matters and a calendar of important due dates and deadlines. Please take a minute to tour our web site. All staff members have e-mail addresses as well.

You should have received your 2007 organizer in early January to assist you in the assembly and organization of your 2007 income tax return information. If you have not received your 2007 data organizer by the end of January, please call our office as soon as possible and one will be mailed to you or we can e-mail you a PDF copy. Please complete this data organizer as thoroughly as possible. The better organized you are, the faster your income tax returns can be completed which, in turn, will reduce the preparation time and costs. We are planning to use CCH Prosystems to process your 2007 income tax returns. We have used CCH Prosystems services for off-site printing for thirty years and we have been very pleased with their confidential and professional processing of returns.

Your 2007 income tax returns are due Monday, April 15, 2008. We can promise to have your returns completed and back to you by April 15, 2008 only if your organizer, tax information and engagement letters are in our office on or before Monday, March 10, 2008.

Extensions of Time to File -

We are happy to assist you in the preparation of your 2007 extension requests, if necessary. Because of the tax preparer liability associated with completing extension requests, we will not provide this service to our clients unless we have sufficient information to prepare a complete and accurate extension request in our possession by Monday, March 31, 2008. We encourage you to complete your organizer and, unless there has been a significant change from 2006, mail your completed organizer to the office, as soon as possible, especially if you are expecting a refund. If you have any questions regarding the completion of your organizer, please call our office for assistance. You may be called to review your tax information, as necessary, before your returns are finalized. Please send in your organizer if it is nearly complete except for missing partnership K-1 forms, etc. Please note in your organizer which forms are missing. If information in your organizer is no longer applicable, please line through it. If you are responsible for assembling information for partnership, corporation or trust income tax returns, please get this data to us on or before Monday, February 11, 2008. You should have received a data organizer for the trust income tax returns. (There is no such data organizer for corporate or partnership entities). . The following firm's hourly billing rates are effective January 1, 2008 (and remain unchanged from 2007):

Timothy J. Jorstad, CPA tim@jorstad.com $350. John H. Kirk, CPA john@jorstad.com $210. Radoslav Simeonov, MBA rados@jorstad.com $220. Steven P. Miller, CPA steve@jorstad.com $200. Gaylene DeBisschop, gay@jorstad.com $160. Nancy Mallonee, Manager Nancym@jorstad.com $200. Ratna Ross, Bookkeeper Ratna@jorstad.com $135. Liz Simpson, Bookkeeper Liz@jorstad.com $135. Deb Jorstad, Bookkeeper deb@jorstad.com $120. Nance Dunev, Bookkeeper nance@jorstad.com $120. Nyree Hotchkiss, Office Manager Nyree@jorstad.com $100. Administrative $100. We look forward to hearing from you soon.

Sincerely,

Timothy J. Jorstad