Here are a few key points about payroll taxes and mandates in relation to the broader tax policy debate:- Payroll taxes (Social Security and Medicare taxes) are a major revenue source for the federal government, accounting for over 30% of total revenues. However, payroll taxes are capped at a certain income level ($113,700 for Social Security in 2013), so higher income individuals pay a smaller share of their income in payroll taxes.- The Affordable Care Act included new taxes and mandates related to health insurance. This includes a 3.8% surtax on investment income for higher income taxpayers, an excise tax on high-cost employer-sponsored health plans ("Cadillac tax"), and an individual mandate requiring most
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Similar to Here are a few key points about payroll taxes and mandates in relation to the broader tax policy debate:- Payroll taxes (Social Security and Medicare taxes) are a major revenue source for the federal government, accounting for over 30% of total revenues. However, payroll taxes are capped at a certain income level ($113,700 for Social Security in 2013), so higher income individuals pay a smaller share of their income in payroll taxes.- The Affordable Care Act included new taxes and mandates related to health insurance. This includes a 3.8% surtax on investment income for higher income taxpayers, an excise tax on high-cost employer-sponsored health plans ("Cadillac tax"), and an individual mandate requiring most (10)
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Here are a few key points about payroll taxes and mandates in relation to the broader tax policy debate:- Payroll taxes (Social Security and Medicare taxes) are a major revenue source for the federal government, accounting for over 30% of total revenues. However, payroll taxes are capped at a certain income level ($113,700 for Social Security in 2013), so higher income individuals pay a smaller share of their income in payroll taxes.- The Affordable Care Act included new taxes and mandates related to health insurance. This includes a 3.8% surtax on investment income for higher income taxpayers, an excise tax on high-cost employer-sponsored health plans ("Cadillac tax"), and an individual mandate requiring most
1. 4th Annual Tax Update
Presented by
Steven Mills, CPA, Partner, Insero & Company CPAs, P.C.
Don Susswein, Principal, McGladrey LLP
Mark Peterson, President & CEO, Greater Rochester Enterprise
June 18, 2013
Insero & Company CPAs, P.C. presents the
2. StevenMills,CPA
Steven Mills, CPA is a Partner and Tax
Practice Leader for Insero & Company
CPAs, P.C. with over 25 years of
experience in public accounting. His
experience includes domestic,
international and state and local taxes
with a focus on planning and research.
Steve is a hands-on leader responsible
for all of the firm's tax services including
recurring compliance as well as the
development, design and
implementation of tax strategies.
3. DonSusswein
Don Susswein, Principal, McGladrey LLP
leads the Washington National Tax team
in the areas of partnerships (subchapter
K) and the taxation of debt and other
financial instruments or products. His
extensive background in government
and consulting includes serving as
Majority Tax Counsel to the U.S. Senate
Committee on Finance, an attorney in
the Honors Program of the Appellate
Section of the Tax Division of the
Department of Justice, and as a partner
at KPMG and PwC.
4. MarkPeterson
Mark Peterson, President & CEO of
Greater Rochester Enterprise (GRE) has
an outstanding background in regional
economic development, financial
administration, and high-value fund
raising. Recruited to join GRE as
Managing Director in 2005, Mark was
named President & CEO in early 2009
and charged with the continued creation
and execution of GRE's strategic plan.
5. “Anyone may arrange his affairs so that his taxes shall be as
low as possible; he is not bound to choose that pattern
which best pays the treasury. There is not even a patriotic
duty to increase one’s taxes. Over and over again the courts
have said that there is nothing sinister in so arranging affairs
as to keep taxes as low as possible. Everyone does it, rich and
poor alike and all do right, for nobody owes any public duty
to pay more than the law demands.”
- Judge Learned Hand
Gregory V. Helvering (1934)
- Timothy Cook
Apple CEO (2013)
6. Selected Tax Issues as
of 1/1/13
What Was Scheduled
to Happen
What Did
Happen
1. All Individual Tax Brackets Go up to 2001 rates
Stayed as is except for
top bracket (39.6%)
2. Alternative Minimum Tax
Exemption
$45,000
$78,750
(“permanent” and
indexed for inflation)
3. Dividend Rates According to Tax Bracket
Treated as LTCG
(“permanent” change)
7. Selected Tax Issues as
of 1/1/13
What Was Scheduled
to Happen
What Did
Happen
4. LTCG Rates 20%
0/15/20%
(“permanent” rate)
5. Medicare tax on net
unearned income at
$250,000 (MFJ) of AGI
3.8% 3.8%
6. Section 179 $139,000
$500,000 for 2013
then $25,000
thereafter
8. Selected Tax Issues as
of 1/1/13
What Was Scheduled
to Happen
What Did
Happen
7. Limitation on Itemized
Deductions at $300,000
(MFJ) of AGI
Reinstated Reinstated
8. Phase out of Personal
Exemptions at $300,000
(MFJ) of AGI
Reinstated Reinstated
9. Bonus Depreciation % 0%
50% in 2013 (0%
thereafter)
9. Selected Tax Issues as
of 1/1/13
What Was Scheduled
to Happen
What Did
Happen
10. Medicare tax on earned
income over $250,000 (MFJ)
of AGI
0.9% 0.9%
11. Payroll tax (employee
portion)
6.2% 6.2%
12. Estate Exemption $1,000,000 not portable
$5,250,000 portable
(permanent)
10. Selected Tax Issues as
of 1/1/13
What Was Scheduled
to Happen
What Did
Happen
13. Estate Tax Rates 50% + 40% (from 35%)
14. R & D Credit Expired Extended to 12/31/13
11. Recommendations
1. Time your capital gains in portfolio if possible
• Coordinate with pass thru losses
• Harvest other capital losses
• Spread gains over multiple tax years if you can take the
risk
12. Recommendations
2. Do not try to form a 501(c)(4) organization with the
words “Tea Party,” “Constitution,” etc.
13. Recommendations
3. Get tax planning/projections done if you really want
to know the tax effects of a transaction or for
withholding purposes. It is IMPOSSIBLE to do tax
planning/projection without some effort.
14. Recommendations
4. Know that Big Brother is watching ever more
carefully
• IRS has been issuing “Review” letters
• First time I’ve ever seen these
• The word “Audit” is not mentioned
• Matching by computer is expanding (Example of Small
Business Health Care Credit form)
• More auditors
• Employee Benefit Audit Checklist now surfacing
• Affordable Care Act – alleged increase in IRS employment
of 14,000 people – what will they do?
17. ThankYou
Thank you for your attendance at
today’s program.
For more information regarding the topics discussed
today, please feel free to contact:
Steven Mills, CPA
steven.mills@inserocpa.com
585.697.9629
Insero & Company CPAs, P.C.
www.inserocpa.com
18. MaterialDisclaimer
These materials were prepared solely for the
purpose of continuing professional education. They
are distributed with the understanding that Insero &
Company CPAs, P.C. and its employees are not
engaged in rendering legal, accounting, or other
professional service as part of this CPE presentation.
If advice or other expert assistance is required, the
services of a competent professional person should
be sought. Please contact an Insero & Company
team member with any questions.
60. Greater Rochester Enterprise’s
Mission
Greater Rochester Enterprise supports
business attraction and expansion, as
well as entrepreneurship and innovation.
GRE collaborates with companies,
universities, not-for-profit organizations
and government leaders to deliver a
unified approach to regional economic
development.
61. Finger Lakes Region
Finger Lakes Region Population: 1,216,188
Total Workforce: 608,500
Geographic Size:
Comprised of 9 counties in
Upstate New York:
Genesee, Livingston, Monroe,
Ontario, Orleans, Seneca,
Wayne, Wyoming and Yates
6,727 total square miles – Bigger
than Connecticut, Delaware,
Rhode Island, and DC
Sources: U.S. Census data, 2011; NYS Dept of Labor, November 2012
62. Rochester – Steady and Stable
Largely a small to mid-size company town
• “Big Four” no longer dominate local
economy
• 97% of companies employ fewer than 100
people
Highly diversified economy
• Rich agricultural as well as high tech assets
• Healthcare and education leading sectors;
steady despite downturn in economy
63. Food Processing and
Agriculture
Education and Knowledge Creation
Major Industry Strengths
Optics and Imaging
Life Sciences
Energy Innovation
Business Services
and SoftwareAdvanced
Manufacturing
Health Care
64. Competitive Advantages
Size, breadth, and quality of higher education
Proximity to major metropolitan areas without the
high cost
Rochester is within 500 miles of 1/3 of the US and
Canadian population
Availability of
7% of world’s fresh water is right here
Other regions of the country envy our water supply
Fresh Water
Low Cost, High Quality Health Care
Workforce – “Labor Cubed”
High caliber – skilled and educated
Available – Competitive wages
65. National Accolades for Rochester
#1 Best Place to Buy a Home (Zillow & Forbes)
3rd Best Place in the Country to Raise A Family
7th Fastest-Recovering City
14th Most Innovative City in the U.S.
America’s 10th Smartest City
One of Safest Weather Cities
in the U.S.
3rd Best Economy in the U.S.
46th Best Economy in the world
One of Editor’s Top 7 Location Picks
4th Best Food Processing Region in U.S.Best City in U.S. for Commuters
5th Best City for Families
10 Greater Rochester high schools
among top 3% of
“America’s Best High Schools”
Most Livable Bargain Market
One of 35 innovation
hubs in the country
10 Cities Poised for Greatness in 2012
One of Ten Underrated
Hotbeds of American
Innovation
32nd Best City
in U.S.
69. Multiplier Effect is Significant
$500 Million in New Capital Investment
from top 10 projects
Creation of Thousands of New Jobs
Initial capital investment plus impact of
job creation equals total wealth
creation output of $1.2 Billion
71. $165 Million
2011-2012 Priority Projects
• EBP Revitalization / NY BEST
• Health Sciences Center for
Computational Innovation
• Finger Lakes Business Accelerator
Cooperative
• GRE Regional Economic Gardening
• Seneca AgBio Green Energy Park
• Finger Lakes Museum
• Finger Lakes Health Collaborative
• 1-390 Southern Corridor
72. $165 Million
2011-2012 Priority Projects (cont’d)
• Golisano Institute for Sustainability
Building
• Regional Revolving Loan Fund
• Midtown Tower
• College Town
• Workforce Development - Middle
Skills Jobs
• STAMP
• Finger Lakes Small Business
Expansion Fund
73. Benefits of Regional Councils
Develop 5-year strategic plans
– Focus on long-term, sustainable regional
economic growth
Align state resources with priority projects
Identify public and private sector resources
Reduce obstacles to growth
Continually update and improve strategies
74. GRE Going Mobile – Keep
Competitive Advantage
Free Mobile app - RochesterBiz
• Why Rochester Rocks
• Available Sites & Buildings
• Podcasts of Radio Show
• Workforce Data