With all the new changes in the tax laws, I am worried about an IRS audit. I know about prepaid legal plans, but is there a plan that will cover income tax returns?

Yes there is a prepaid tax representation plan known as Advance Tax Representation (ATR). This service covers both federal and state returns. It costs less than $100 per year.

I operate a small landscape architectural firm (10 employees). What are my options in setting up a retirement plan?

You can set individual IRA accounts which limit you to $2,000 (or $2,250 for you and your non-working spouse). Note: If your spouse has sufficient earned income, both of you will obtain the $2,000 deduction.

Another option is to set up a Keogh (HR-10) plan if you are an “owner-employee.” You must include coverage for full-time employees. You can contribute up to 20 percent of earned income (up to $30,000). You can set up a “defined benefit plan” whereby the contributions could go up to $90,000. This is an ideal vehicle if you are getting up in years and have to do some catch-up in providing an adequate income for retirement.

There is also the Simplified Employee Pension (SEP-IRA) which is designed to give employers an easy method of making tax deductible contributions for their employees’ retirement. Under SEP-IRA you pay directly to the IRA of each employee. The limit is 15 percent, up to $30,000.

I have accumulated a sizeable amount in several IRA accounts which are held by different banks. Is there any way I can improve their performance over the money market rates they presently earn?

Banks like to keep your money tied up in their own fund accounts. Consider combining all your IRA accounts into one “self-directed” account. This will give you the flexibility and control of investing those funds in any number of authorized investments?EUR??,,????'??+such as mutual funds, limited partnerships, stocks and bonds.

How can I tell if I should itemize my deductions for income tax?

Before you spend a lot of time gathering up your bills and receipts, determine whether it will be to your benefit to use them. Only the amount that is in excess of the increased standard deductions will count. These amounts are based on your filing status; Joint returns have a base of $3,760, individuals $2,540, elderly couples with a joint return $6,200, and elderly couples filing a separate return $3,750.

Carl Shield is an account and financial planner in the state of California, specializing in financial and tax planning.