ri | blumshapiro - 2010 tax planning presentation.ppt tax planning... · 2018-10-22 · • large...
TRANSCRIPT
![Page 1: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/1.jpg)
2010 Tax Planning Seminar2010 Tax Planning Seminar2010 Tax Planning Seminar2010 Tax Planning Seminar
Presented by
BlumShapiroBlumShapiro
![Page 2: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/2.jpg)
The clock is ticking on savingsThe clock is ticking on savings….….The clock is ticking on savingsThe clock is ticking on savings….….
![Page 3: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/3.jpg)
Tax Rate ForecastTax Rate ForecastTax Rate ForecastTax Rate Forecast
2010 20112010 201110% Eliminated
15% 15%25% 28%28% 31%33% 36%33% 36%35% 39.6%
![Page 4: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/4.jpg)
Tax Credits and DeductionsTax Credits and DeductionsTax Credits and DeductionsTax Credits and Deductions
Credits: reduce tax dollar for dollar
Deductions: lower your taxable incomeDeductions: lower your taxable income
![Page 5: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/5.jpg)
2010 Child Tax Credit2010 Child Tax Credit2010 Child Tax Credit2010 Child Tax Credit$1,000 per child$1,000 per child
Income Phaseout Ranges*
Single FilersSingle Filers Starts at $75,000
J i t FilJ i t Fil St t t $110 000Joint FilersJoint Filers Starts at $110,000*Adjusted Gross Income
![Page 6: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/6.jpg)
Education CreditsEducation CreditsEducation CreditsEducation CreditsHope Scholarship Credit
(American Opportunity Tax Credit) = $2,500 maximumLifetime Learning Credit = $2,000 maximum
![Page 7: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/7.jpg)
Making Work Pay CreditMaking Work Pay CreditMaking Work Pay CreditMaking Work Pay Credit
A dit fA credit for wage earners and the self-employed
• 6.2% of earned income or
• $400 a year for single filers
• $800 a year for joint filers
![Page 8: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/8.jpg)
Standard DeductionStandard DeductionStandard DeductionStandard Deduction
• Single Filers: $5,700
• Joint Filers: $11,400
M i d Fili S t l $5 700• Married Filing Separately: $5,700
• Head of Household: $8 400• Head of Household: $8,400
![Page 9: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/9.jpg)
Itemized DeductionsItemized DeductionsItemized Deductions Itemized Deductions Reduce Taxable IncomeReduce Taxable Income
• Medical expenses• Nonbusiness taxes• Interest expenses• Investment expenses• Professional fees• Professional fees• Charitable contributions
![Page 10: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/10.jpg)
Donating to Charity?Donating to Charity?Donating to Charity?Donating to Charity?
• Donations of cash or property toDonations of cash or property to qualified charities are deductible.
• Charitable donations are limited to 50% of your adjusted gross income50% of your adjusted gross income.
D d ti f hi l d ti• Deductions for vehicle donations are limited for vehicles worth more than $500.
![Page 11: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/11.jpg)
Health InsuranceHealth InsuranceHealth InsuranceHealth Insurance
• Individual Coverage Mandate• Individual Coverage Mandate begins in 2014.
• Subsidies will be provided f th i dfor the uninsured.
• New taxes will be levied to cover the costs of subsidies..
![Page 12: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/12.jpg)
Retirement Savings = Tax SavingsRetirement Savings = Tax SavingsRetirement Savings Tax SavingsRetirement Savings Tax Savings
![Page 13: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/13.jpg)
EmployerEmployer--Sponsored PlansSponsored PlansEmployerEmployer Sponsored PlansSponsored Plans
• Defined Benefit Plans• Defined Benefit Plans
• Defined Contribution Plans
![Page 14: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/14.jpg)
401(k) Contribution Limits 2010401(k) Contribution Limits 2010401(k) Contribution Limits 2010401(k) Contribution Limits 2010
Under Age 50: $16,500
Additional “Catch-Up”Additional Catch Up for those Age 50 and Older: $5 500and Older: $5,500
![Page 15: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/15.jpg)
The Roth 401(k)The Roth 401(k)The Roth 401(k)The Roth 401(k)
C t ib ti d ith ft t d ll• Contributions are made with after-tax dollars.
• Earnings grow tax free.
• Distributions are tax free in retirement.
![Page 16: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/16.jpg)
H h f iH h f iHow much of your incomeHow much of your income
will you need in retirement?will you need in retirement?
![Page 17: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/17.jpg)
IRA Contribution LimitsIRA Contribution LimitsIRA Contribution LimitsIRA Contribution Limits
2010
Under Age 50 $5,000
A 50 d Old $6 000Age 50 and Older $6,000
![Page 18: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/18.jpg)
Roth IRAsRoth IRAsRoth IRAsRoth IRAs
• Make contributions with after-tax dollarsMake contributions with after tax dollars
R i t f di t ib ti• Receive tax-free distributions
![Page 19: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/19.jpg)
Roth IRA Income Limits*Roth IRA Income Limits*Roth IRA Income LimitsRoth IRA Income Limits
Contributions Reduced Ineligible
Single Filers
$105,000 – $120,000 Over $120,000FilersJoint Filers $167,000 – $177,000 Over $177,000
*Modified adjusted gross income
![Page 20: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/20.jpg)
Roth IRA ConversionsRoth IRA ConversionsRoth IRA ConversionsRoth IRA Conversions
Income limits on conversions have been eliminated in 2010.
You will be taxed on the conversion amountYou will be taxed on the conversion amount.
You will not owe a penalty
![Page 21: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/21.jpg)
Tax Tip:Tax Tip:Tax Tip:Tax Tip:
IRA iIRA savings can be used without penalty for qualified college expensescollege expenses or to help pay for
fi t hyour first home.
![Page 22: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/22.jpg)
Which IRA Is Best for You?Which IRA Is Best for You?Which IRA Is Best for You?Which IRA Is Best for You?Roth vs. TraditionalRoth vs. Traditional
![Page 23: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/23.jpg)
Taxes Reduced for Capital GainsTaxes Reduced for Capital GainsTaxes Reduced for Capital Gains Taxes Reduced for Capital Gains and Dividends through 2010and Dividends through 2010
![Page 24: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/24.jpg)
Capital Gains Tax RatesCapital Gains Tax RatesCapital Gains Tax RatesCapital Gains Tax Rates
• 15% for investors in the top four bracketsthe top four brackets
• Zero tax through 2010 for investors in the 10% %and 15% brackets
![Page 25: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/25.jpg)
WARNING!
No Tax Relief for No Tax Relief for ShortShort Term Gains!Term Gains!ShortShort--Term Gains!Term Gains!
![Page 26: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/26.jpg)
Capital Gains AdvantageCapital Gains AdvantageCapital Gains AdvantageCapital Gains Advantage
Gain Tax Net Cash
11 months $50,000 $17,500 $32,500
12 months $40,000 $ 6,000 $34,000
![Page 27: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/27.jpg)
Other Gains Rates UnchangedOther Gains Rates UnchangedOther Gains Rates UnchangedOther Gains Rates Unchanged
Collectibles 28%Collectibles 28%
Real estateReal estate depreciation recapture 25%
![Page 28: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/28.jpg)
WARNING!WARNING!
Large Gains Can Trigger the AMTLarge Gains Can Trigger the AMT
![Page 29: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/29.jpg)
AMT Danger ZonesAMT Danger ZonesAMT Danger ZonesAMT Danger Zones• Large capital gainsg p g• Numerous dependency exemptions
Large state income tax deductions• Large state income tax deductions• Large deductions for unreimbursed
l b iemployee business expenses or miscellaneous expenses
• Substantial medical expenses• Incentive stock optionsp
![Page 30: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/30.jpg)
2010 AMT Exemption Amounts2010 AMT Exemption Amounts2010 AMT Exemption Amounts2010 AMT Exemption Amounts(without further reform)
$45 000 f j i t fil• $45,000 for joint filers, down from $70,950 in 2009
• $33 750 for single filers• $33,750 for single filers, down from $46,700 in 2009
![Page 31: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/31.jpg)
Tax Tip:Tax Tip:Tax Tip:Tax Tip:
Offset gains in your portfolio with losses at the end of the tax year.losses at the end of the tax year.
![Page 32: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/32.jpg)
Dividend Tax RatesDividend Tax RatesDividend Tax RatesDividend Tax Rates
• 15% for investors in the top four bracketsp
• Zero tax through 2010• Zero tax through 2010 for investors in the 10% and 15% bracketsand 15% brackets
![Page 33: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/33.jpg)
Dividend vs. Ordinary IncomeDividend vs. Ordinary IncomeDividend vs. Ordinary IncomeDividend vs. Ordinary Income
Ordinary income rates 10% – 35%
Dividend rates 0% – 15%
Rates apply for both regular tax and AMT.
![Page 34: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/34.jpg)
Qualifying DividendsQualifying DividendsQualifying DividendsQualifying Dividends
• Domestic corporations
• Certain foreign corporationsCertain foreign corporations
Certain mutual fund dividends• Certain mutual fund dividends
![Page 35: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/35.jpg)
NonNon--Qualifying DividendsQualifying DividendsNonNon Qualifying DividendsQualifying Dividends
• Retirement plans or IRAsRetirement plans or IRAs
M t l f d i t t• Mutual fund interest and short-term gains
• Money market interestMoney market interest
S ti di t ib ti• S corporation distributions
![Page 36: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/36.jpg)
15% dividends 15% dividends cannot offset investmentcannot offset investmentcannot offset investment cannot offset investment
interest expense.interest expense.
15% di id d15% di id d15% dividends 15% dividends also cannot offsetalso cannot offsetalso cannot offset also cannot offset
capital losses.capital losses.
![Page 37: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/37.jpg)
Ordinary Ordinary 15%15%Income Income InterestInterest
15% 15% DividendsDividends vs.vs.
InterestInterest
![Page 38: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/38.jpg)
No 15% rate for dividendsNo 15% rate for dividendsNo 15% rate for dividends No 15% rate for dividends in retirement plansin retirement plans
Hold stock earning dividends taxed at 15% outside of retirement accountsat 15% outside of retirement accounts
![Page 39: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/39.jpg)
• Not all stocks are created equal.c ea ed equa
Some stocks do• Some stocks do not pay dividends.
• Choose investments that make senseChoose investments that make sense for you.
![Page 40: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/40.jpg)
Capital Capital Current Current vs.vs.AppreciationAppreciationIncomeIncome
vs.vs.
Focus on Total ReturnFocus on Total Return
![Page 41: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/41.jpg)
Sell appreciated stock andSell appreciated stock andSell appreciated stock andSell appreciated stock anduse the proceeds to…use the proceeds to…
• Buy dividend-paying stocky p y g
Diversify investment holdings• Diversify investment holdings
• Change asset allocations
![Page 42: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/42.jpg)
What isWhat isWhat is…What is…
LongLong--TermTerm
![Page 43: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/43.jpg)
Tax Goals vs Investing GoalsTax Goals vs Investing GoalsTax Goals vs. Investing GoalsTax Goals vs. Investing Goals
Always consider:• Portfolio balance• Portfolio balance
• Risk tolerance
• An investment’s impact on your situationimpact on your situation
![Page 44: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/44.jpg)
Plan around the “Kiddie Tax”Plan around the “Kiddie Tax”Plan around the Kiddie TaxPlan around the Kiddie Tax
Applies to children under age 19Applies to children under age 19, or age 24 for full-time students.
![Page 45: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/45.jpg)
Good NewsGood NewsGood News Good News for Business Ownersfor Business Owners
• Tax incentives for hiring gand retaining workers
• Tax breaks for providing health insurance
• Increased Section 179 expensing
![Page 46: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/46.jpg)
Hiring IncentivesHiring IncentivesHiring IncentivesHiring Incentives
• New Hires: Social Security tax liability is waived throughliability is waived through December 31, 2010.
• Retained Hires: A $1,000 credit for each qualified new hire who is retained for one year.is retained for one year.
![Page 47: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/47.jpg)
Work Opportunity Tax CreditWork Opportunity Tax CreditWork Opportunity Tax Credit Work Opportunity Tax Credit (WOTC)(WOTC)
• Available through 2011
• Eligibility expanded through 2010
![Page 48: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/48.jpg)
“Green” Business Tax Breaks“Green” Business Tax BreaksGreen Business Tax BreaksGreen Business Tax Breaks
• Deduction for energy saving improvements• Deduction for energy-saving improvements • Renewable energy production credits:
– SolarBi– Biomass
– GeothermalWi d– Wind
![Page 49: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/49.jpg)
Health Insurance ReformHealth Insurance ReformHealth Insurance ReformHealth Insurance Reform
• No employer requirement• No employer requirement
• “Pay or Play” rules starting in 2014
• Tax Credit for premiums in 2010
![Page 50: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/50.jpg)
Section 199 DomesticSection 199 DomesticSection 199 Domestic Section 199 Domestic Manufacturing DeductionManufacturing Deduction
9% f QPAI i 2010• 9% of QPAI in 2010
• 50% of wages apply
![Page 51: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/51.jpg)
Section 179 Expensing 2010Section 179 Expensing 2010Section 179 Expensing 2010Section 179 Expensing 2010
Expense allowance $250,000p
Ph t th h ld $800 000Phaseout threshold $800,000
![Page 52: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/52.jpg)
Deduct $25 000 forDeduct $25 000 forDeduct $25,000 for Deduct $25,000 for Heavy SUVs or TrucksHeavy SUVs or Trucks
![Page 53: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/53.jpg)
Plan Your AssetPlan Your AssetPlan Your Asset Plan Your Asset Purchases WiselyPurchases Wisely
Make large purchases before 2011
![Page 54: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/54.jpg)
Don’t forget aboutDon’t forget aboutDon t forget about Don t forget about depreciation recapturedepreciation recapture
![Page 55: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/55.jpg)
Cost Cost S tiS tiSegregation Segregation
Nets $$$Nets $$$Nets $$$Nets $$$
![Page 56: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/56.jpg)
Cost SegregationCost SegregationCost SegregationCost Segregation
Shorter Lives = Quicker Write-Offs
![Page 57: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/57.jpg)
Capital Gains TipsCapital Gains TipsCapital Gains Tips Capital Gains Tips for Businessesfor Businesses
H ldi i d• Holding period
• Character of assets
![Page 58: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/58.jpg)
Installment SalesInstallment SalesInstallment SalesInstallment Sales
• The 15% capital gains rate is good through 2010is good through 2010.
• Beyond 2010, plan for the increased tax rate when negotiating sales.
![Page 59: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/59.jpg)
TT D f dD f d T blT blTaxTax--Deferred Deferred vs.vs. TaxableTaxable
R id T D f l T h iReconsider Tax-Deferral Techniques
![Page 60: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/60.jpg)
Business StructureBusiness StructureBusiness StructureBusiness Structure
Is it time to switch to a pass-through entity?g y
![Page 61: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/61.jpg)
Take Out Earnings PriorTake Out Earnings PriorTake Out Earnings Prior Take Out Earnings Prior to Making an “S” Electionto Making an “S” Election
• Take advantage of capital gain rates
• Reduce passive income concerns
• Reduce C corporation earnings concerns
![Page 62: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/62.jpg)
S CorporationsS CorporationsS CorporationsS Corporations
• Permissible number of shareholders is 100.shareholders is 100.
• Eligible members of the same family may be treated as a y ysingle shareholder.
![Page 63: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/63.jpg)
Closely Held CompaniesClosely Held CompaniesClosely Held CompaniesClosely Held Companies
• Shift appreciation
• Shift income
• Pay tax at a yreduced rate
![Page 64: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/64.jpg)
Plan for Business ContinuationPlan for Business ContinuationPlan for Business ContinuationPlan for Business Continuation
• Transfer control according to your wishes
• Minimize your tax liabilitiesMinimize your tax liabilities
• Fund your retirement
• Preserve wealth for your family
![Page 65: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/65.jpg)
The Benefits of Estate PlanningThe Benefits of Estate PlanningThe Benefits of Estate PlanningThe Benefits of Estate Planning
•• Preserve assets
• Minimize taxes• Minimize taxes
• Distribute property
![Page 66: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/66.jpg)
Why Plan?Why Plan?Why Plan?Why Plan?
Y t t b l th thi k• Your estate may be larger than you think.
• Changes in tax laws do not eliminate the need for estate planning.
• Failure to plan your estate may result in p y ylegal and financial problems for your heirs.
![Page 67: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/67.jpg)
Gift and Estate Tax ExemptionsGift and Estate Tax ExemptionsGift and Estate Tax ExemptionsGift and Estate Tax Exemptions
Year Estate Tax Exemption
Gift Tax Exemption
2010 Estate tax $1 000 0002010 Estate tax repealed
$1,000,000
20112011 and after $1,000,000 $1,000,000
![Page 68: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/68.jpg)
Carryover BasisCarryover BasisCarryover Basis Carryover Basis Rules Take Rules Take Effect with Effect with Estate TaxEstate Tax
WARNING!Estate Tax Estate Tax
Repeal!Repeal!
![Page 69: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/69.jpg)
“Gifting” Your Way to Savings“Gifting” Your Way to SavingsGifting Your Way to SavingsGifting Your Way to Savings
• You can make tax-free gifts of up toYou can make tax free gifts of up to $13,000 per person, per year.
• Married couples can gift a total of• Married couples can gift a total of $26,000 per person, per year.
• You can make unlimited tax-free gifts by setting up direct payments t d ti l i tit ti dto educational institutions and medical providers.
![Page 70: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/70.jpg)
Gifting AdvantagesGifting AdvantagesGifting AdvantagesGifting Advantages
• Post gift appreciation escapes estate tax• Post-gift appreciation escapes estate tax.
• To the extent of the $13,000/$26,000 per donee, per year annual exclusion, no transfer tax is ever imposed.
• Gift tax paid reduces your taxable estate.
• Post-gift income is taxed to the recipient.
![Page 71: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/71.jpg)
WARNING!
Beware of the GenerationBeware of the Generation--Beware of the GenerationBeware of the GenerationSkipping Transfer Tax!Skipping Transfer Tax!
![Page 72: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/72.jpg)
Commonly Used TrustsCommonly Used TrustsCommonly Used TrustsCommonly Used Trusts• Credit Shelter or Bypass TrustCredit Shelter or Bypass Trust
• Dynasty TrustDynasty Trust
• Irrevocable Life Insurance TrustIrrevocable Life Insurance Trust
• Charitable Remainder TrustCharitable Remainder Trust
• Qualified Terminable Interest Property TrustQualified Terminable Interest Property Trust
![Page 73: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/73.jpg)
Wondering how toWondering how to pay estate taxes?
ConsiderConsiderConsiderConsiderLife InsuranceLife InsuranceLife InsuranceLife Insurance
![Page 74: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/74.jpg)
Plan to Save!Plan to Save!Plan to Save!Plan to Save!
We can help you it h i tmonitor changing tax
laws and update pyour strategies
accordinglyaccordingly.
![Page 75: RI | BlumShapiro - 2010 Tax Planning Presentation.ppt Tax Planning... · 2018-10-22 · • Large state income tax deductionsLarge state income tax deductions • Large deductions](https://reader035.vdocuments.site/reader035/viewer/2022070702/5e69a2b125fa13065c5e767a/html5/thumbnails/75.jpg)
2010 Tax Planning Seminar2010 Tax Planning Seminar2010 Tax Planning Seminar2010 Tax Planning Seminar
Presented by
Your Firm Name