Broker Check

                                                                                                                           June 30, 2005

The Check 21 Act

          In order to create a more streamlined banking system, Congress enacted a key piece of legislation called the Check Clearing for the 21st Century Act better known as the Check 21 Act.  The law provides for a new, negotiable instrument called a "substitute check" that banks exchange electronically in place of the traditional paper check which needs to be physically transferred between financial institutions.
          Your key concern is what this will mean to you and your business.  Checks will now clear in a matter of hours instead of days.    Both yours and your customers'.  One of the strongest arguments for paying by check has been the financial leverage it provides-better known as "the float".  Many have used that window of opportunity to their advantage.  Now that window of opportunity has closed and people need to take steps to maintain their cash flow. 
          The new rule of thumb?  Pay only those bills for which funds are available at the time you write the check.  This will require you to monitor your balance more frequently and to time your payments more carefully, especially when large bills come due.  You may also want to put purchases on your credit card so that you can obtain a deferral of up to thirty days.
          If you need further consultation or advice in this area, please contact Howard Lisch at our office.

Summer Reading

          I recommend 1776 by David McCullough as a very timely read for those who like history and those who appreciate a good book.  It is the story of that fateful year in the life of our nation that takes the reader from the victorious siege of Boston through the defeats of the Battle of Brooklyn (Long Island), Battle of White Plains, Battle of Fort Washington, Battle of Fort Lee, to the surprising victory on Christmas Day in Trenton.  It describes the political landscape by which religious and ethnic groups were Rebel or Loyalist in sympathy.  The book recounts battles won and lost, as well as retreats made possible by the efforts of singular men, whether American or British.  You will find out who Henry Knox was and why he was so important to saving our independence, and how much we owe to twenty-somethings and to chance and blunder to secure our independence.
          I also note that David McCullough, recent author of the award-winning book, John Adams, and one of our country's foremost historians, credits his good friend, Thomas Fleming, for his contributions to the book.

Company Retirement Plans To Be Audited

           The IRS will examine more than 9,000 plans in 2005 and 12,000 in 2006, up from 6,000 in 2003 to halt a rise in plan abuse.  High on the IRS audit list is IRC 412 (i) defined benefit plans that minimize the tax burden on withdrawals but maximize the deduction for employers.  Kiplinger Tax Letter 5/20/05

            If you have any questions about the foregoing or any other financial matters, please call us. 

Remember, We’re Here For You!!