Nonprofit Revitalization Act of 2013 Fred M. LaMarca CPA, CFP® Zoltan Kemeny, CPA.
AdvancedPlanning4Docs.com Tax Planning by Greg Lewis, CPA/PRS, CFP
-
Upload
ellscpas -
Category
Economy & Finance
-
view
255 -
download
1
Transcript of AdvancedPlanning4Docs.com Tax Planning by Greg Lewis, CPA/PRS, CFP
Advanced Planning Tax Presentation
Presented by: Greg Lewis, Shareholder
Date: December 5, 2015
Timing Income & Deductions to your Tax Advantage
The Alternative Minimum Tax (AMT)
Home-Related Breaks
Charitable Donations
Limit on Itemized Deductions
Additional 0.9% Medicare tax
THE ALTERNATIVE MINIMUM TAX (AMT) Separate tax system that limits some deductions
& disallows others State & local income tax deductions Property tax deductions Misc. itemized deductions subject to the 2% of AGI
Investment advisory fees Unreimbursed employee business expenses
HOME-RELATED BREAKS Property tax deductions
Before paying your bill early, review your AMT situation Mortgage interest deduction
Deduct interest on up to a combined total of $1M or mortgage debt incurred to purchase, build, or improve your principal and 2nd residence
Home equity debt interest deduction Can be used for any purpose (debt limit of $100K) Consider using a home equity loan or line of credit to
pay off credit cards or auto loans Interest isn’t deductible and rates may be higher
CHARITABLE DONATIONS Qualified charities are generally fully deductible
Regular tax AMT purposes
Appreciated publicly traded stock you’ve held more than 1 year Deduct current fair market value Avoid capital gains tax you’d pay if you sold property
Subject to tighter deduction limits Excess contributions can be carried forward for up to 5 years
LIMIT ON ITEMIZED DEDUCTIONS If your AGI exceeds the applicable threshold,
certain deductions are reduced by 3% of the AGI amount that exceeds the threshold Not to exceed 80% of allowable deductions
Thresholds for 2015: $258,250 (single) $284,050 (head of household) $309,900 (married filed jointly) $154,950 (married filing separately)
ADDITIONAL 0.9% MEDICARE TAX Applies to FICA wages and net self-employment
income exceeding $200K/year $250K/year for joint filers $125K/year for separate filers
Family & Education Tax Breaks Make Raising Kids Less Costly
IRAs for Teens
The “Kiddie Tax”
529 Plans
IRAs FOR KIDS Many years to let accounts grow tax-deferred or tax-free
2015 contribution limit is the lesser of $5,500 or 100% of earned income
Traditional IRA contribution typically are deductible
Roth IRA contributions are not deductible, but qualified distributions will be tax-free
529 COLLEGE SAVINGS PLANS
Prepaid tuition program to secure current tuition rates or a tax-disadvantaged savings plan to fund college expenses
Contributions are not deductible for federal purposes, but plan assets can grow tax deferred
Some states offer tax incentives in the form of deductions or credits
Distributions used to pay qualified expenses are income-tax free for federal and state purposes Tuition, mandatory fees, books, supplies, room and board
Tax Planning for your Investments: What you need to know Capital Gains & Tax Timing
Loss Carryovers
The 3.8% NIIT
CAPITAL GAINS TAX & TIMING Time is the key to long-term investment success
Timing can have a dramatic impact on the tax consequences of investment activities
Long-term capital gains rate might be as much as 20 percentage points lower than your ordinary income-rate
CAPITAL GAINS TAX & TIMING CONT. Use unrealized losses to absorb gains
To determine capital gains tax liability, realized capital gains are netted against any realized capitalized losses
See if a loved one qualifies for the 0% rate Applies to long-term gain that would be taxed at 10%
or 15% based on taxpayer’s ordinary income rate Consider transferring appreciated assets to adult
children in one of these tax brackets Sell the assets at 0% rate
LOSS CARRYOVERS Deduct $3K ($1500 for married taxpayers filing
separately) of the net losses per year against dividends or ordinary income (wages, self-employment, business income and interest) if net losses exceeds net gains
Carry forward excess losses indefinitely
THE 3.8% NIIT Taxpayers with modified adjusted gross income
(MAGI) over $200K/year may owe the net investment income tax $250K/year for joint filers and $125K/year for
married filing separately
NIIT = 3.8% of the lesser of your net investment income or the amount by which your MAGI exceeds the applicable threshold
WHATS THE MAXIMUM CAPITAL GAINS TAX RATE?
Assets held 201512 months or less (short term)
Taxpayer's ordinary income tax rate
More than 12 months (long term) 39.6% ordinary-income tax bracket 20%25%, 28%, 33%, or 35% ordinary-income tax bracket 15%10% or 15% ordinary-income tax bracket 0%Some key exceptions Long-term gain on collectibles, sch as artwork and antiques 28%Long-term gain attributable to certain recapture of prior depreciation on real property 25%
Implement a Robust Tax Plan Projecting Income
Depreciation
NOLs
PROJECTING INCOME Deferring income to next year
Cash method of accounting: defer billing for products or services
Accrual method: delay shipping products or delivering services
Accelerate deductible expenses into the current year Cash-basis taxpayer may make a state estimated tax
payment by Dec. 31 (deduct this year rather than the next)
DEPRECIATION Section 179 Expensing Election
Deduct cost of purchasing eligible new or used assets (equipment, furniture, off-the-shelf computer software) rather than depreciate over a number of years
Expensing limit for 2015 is $25K
DEPRECIATION CONT. 50% bonus depreciation
Additional 1st year depreciation allowance expired 12/31/14, with a few exceptions
Congress may revive bonus depreciation
DEPRECIATION CONT. Cost Segregation Study
Recently purchased or built a building or are remodeling existing space
Identifies property components that can be depreciated much faster, increasing your current deductions
NET OPERATING LOSS (NOLs) Operating expenses and other deductions for the
year exceed revenues
NOL may be carried back 2 years to generate a refund
Any loss not absorbed is carried forward up to 20 years to offset income
Questions