Recent studies show that too many Baby Boomers are aging faster than their savings for retirement is growing.  Many have placed a high priority on educating their children; others have faced issues with their own aging parents needing care.  Now in their 40s and 50s, Baby Boomers have a lot of catching up to do, according to Phyllis Bernstein in a recent issue of the Journal of Retirement Planning.  Retirement planning as an industry so far will be dwarfed by what lies ahead with the Baby Boomers, and now is the time to get Baby Boomer clients in gear to save for retirement.  How?  Bernstein uses the "Cup of Coffee" example.  Today, you can buy a cup of coffee for about $2.00 at Starbucks.  That same cup of coffee is expected to cost $4.36 in 2030—the year that today's 40-year-olds will want to retire.  Think about what that will do to retirement savings, she notes.

Tax practitioners may increasingly find themselves doing two sets of calculations in the coming years as the Alternative Minimum Tax spreads into the ranks of middle-income taxpayers.  The AMT is rapidly becoming a "cash cow," leaving Congress slow to act to fix the problem caused by a lack of inflation adjustments to the AMT.  In the 1990s, only 600,000 taxpayers were affected by the AMT; in the 2004 tax year the Treasury Department expects more than 3 million taxpayers to file using AMT.  Last year, the AMT brought in $11 billion on 2 million returns. And, to further complicate matters, where you live could make the AMT either go away or worsen, notes Linda Fitz of Kochis, Fitz, Tracy, Fitzhugh & Gott, Inc. of San Francisco.

With more and more companies providing mixtures of services and tangible personal property in recent years, states have responded with taking aggressive positions on taxes.  Many states have attempted to find an entire transaction taxable even though the sale of tangible personal property is just a small part of a transaction that otherwise involves providing non-taxable services.  In Catalina Marketing Sales Corp. v. Dept. of Treasury, the Michigan Supreme Court threw out the state's "real object" test and replaced it after finding the Treasury Dept. was going too far in its use.  The case has been sent back to the Tax Tribunal to apply the new test, so the final result remains in the balance on how the new test will be applied.