Original air date: Nov. 8, 2017 Rebroadcast and recording info at http://www.mhmcpa.com Please join us for this webcast in which we will identify and assess effective individual year-end strategies including interactions with trusts and estates, S corporations and other pass-through entities for optimal tax minimization for 2017 and beyond. We will cover techniques for managing overall income tax liabilities, the timing of income and deductions, and the latest regulatory developments applicable to individual taxation.

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CBIZ & MHM
Executive Education Series™
Individual Year-End Tax Planning Tips
for 2017 and Beyond
Naomi Ganoe & David Levi
November 8 and December 7, 2017

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About Us
• Together, CBIZ & MHM are a Top Ten accounting provider
• Offices in most major markets
• Tax, audit and attest and advisory services
• Over 2,900 professionals nationwide
A member of Kreston International
A global network of independent
accounting firms
MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm that provides audit, review and attest services, and works closely with CBIZ, a business consulting,
tax and financial services provider. CBIZ and MHM are members of Kreston International Limited, a global network of independent accounting firms.

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Before We Get Started…
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CPE Credit
This webinar is eligible for CPE
credit. To receive credit, you will
need to answer periodic
participation markers
throughout the webinar.
External participants will receive
their CPE certificate via email
immediately following the
webinar.

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Disclaimer
The information in this Executive Education Series
course is a brief summary and may not include all
the details relevant to your situation.
Please contact your service provider to further
discuss the impact on your business.

6. CBIZ & MHM 6
Naomi is a director with CBIZ and has 17 years experience providing
advisory services to individuals and closely held businesses on estate,
fiduciary, gift, business and personal tax planning matters. She is a
trusted advisor to CEOs and high net worth individuals. She is an active
member of CBIZ's Private Client Service technical community and
presenter at the CBIZ National Level Training.
330.668.6500 • nganoe@cbiz.com
Naomi D. Ganoe, CPA
Director
Presenters

7. CBIZ & MHM 7
David is based in our Minneapolis, MN office and specializes in providing
services to companies in the real estate, law and hospitality industries,
and their owners, as well as tax and estate planning to individuals.
David joined the organization over 35 years ago.
612.376-1208 • dlevi@cbiz.com
David Levi, CPA, PFS
Senior Managing Director

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Agenda
Individual Tax Planning Tips & Top Year-End
Income Tax Reduction Ideas
02
01
03
04
Top Estate and Gift Tax Planning Ideas
Navigating the AMT
Reduce Net Investment Income Tax
05 Items to Consider for your Business
06 Tax Reform Update
07 IRS/Admin Matters
08 Questions

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INDIVIDUAL YEAR-END TAX PLANNING TIPS FOR
2017 AND BEYOND

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Extended Tax Return Due Dates for Taxpayers affected by
Hurricane IRMA
• IRS extended filing deadline for taxpayers who live in one of the affected areas or owns a
business in one of the affected areas to Jan. 31, 2018 (for deadlines falling after Sept. 4,
2017 and before Jan. 31, 2018).
• Individuals who reside or have a business in Alachua, Baker, Bay, Bradford, Brevard, Broward,
Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Escambia, Flagler, Franklin,
Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough,
Holmes, Indian River, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee,
Marion, Martin, Miami-Dade, Monroe, Nassau, Okaloosa, Okeechobee, Orange, Osceola, Palm
Beach, Pasco, Pinellas, Polk, Putnam, Santa Rosa, Sarasota, Seminole, St. Johns, St. Lucie, Sumter,
Suwannee, Taylor, Union, Volusia, Wakulla, Walton, Washington counties may qualify for tax relief.
This represents all 67 counties of Florida.
• Under section 7508A, the IRS gives affected taxpayers until Jan. 31, 2018, to file most tax returns
(including individual, corporate, and estate and trust income tax returns; partnership returns, S
corporation returns, trust returns; estate, gift, and generation-skipping transfer tax returns; annual
information returns of tax-exempt organizations; and employment and certain excise tax returns),
that have either an original or extended due date occurring on or after Sept. 4, 2017, and before Jan.
31, 2018. Affected taxpayers that have an estimated income tax payment originally due on or after
Sept. 4, 2017, and before Jan. 31, 2018, will not be subject to penalties for failure to pay estimated
tax installments as long as such payments are paid on or before Jan. 31, 2018.
• Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related
casualty losses on their federal income tax return for either the year in which the event occurred, or
the prior year. See Publication 547 for details.

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Extended Tax Return Due Dates for Taxpayers affected by
Hurricane Harvey
• IRS extended filing deadline for taxpayers who live in one of the affected areas or
owns a business in one of the affected areas to Jan. 31, 2018 (for deadlines falling
after Aug. 23, 2017 and before Jan. 31, 2018).
• Individuals who reside or have a business in Aransas, Austin, Bastrop, Bee, Bexar, Brazoria,
Burleson, Caldwell, Calhoun, Chambers, Colorado, Comal, Dallas, De Witt, Fayette, Fort Bend,
Galveston, Goliad, Gonzales, Grimes, Guadalupe, Hardin, Harris, Jackson, Jasper, Jefferson, Jim
Wells, Karnes, Kleberg, Lavaca, Lee, Liberty, Madison, Matagorda, Milam, Montgomery,
Newton, Nueces, Orange, Polk, Refugio, Sabine, San Augustine, San Jacinto, San Patricio,
Tarrant, Travis, Tyler, Victoria, Walker, Waller, Washington, and Wharton Counties may qualify
for tax
• Under section 7508A, the IRS gives affected taxpayers until Jan. 31, 2018, to file most tax
returns (including individual, corporate, and estate and trust income tax returns; partnership
returns, S corporation returns, trust returns; estate, gift, and generation-skipping transfer tax
returns; annual information returns of tax-exempt organizations; and employment and certain
excise tax returns), that have either an original or extended due date occurring on or after Aug.
23, 2017, and before Jan. 31, 2018. Affected taxpayers that have an estimated income tax
payment originally due on or after Sept. 4, 2017, and before Jan. 31, 2018, will not be subject
to penalties for failure to pay estimated tax installments as long as such payments are paid on
or before Jan. 31, 2018.
• Affected taxpayers in a federally declared disaster area have the option of claiming disaster-
related casualty losses on their federal income tax return for either the year in which the event
occurred, or the prior year. See Publication 547 for details.

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TOP YEAR-END INCOME TAX REDUCTION IDEAS

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Challenges You are Facing Today:
• Uncertainty with the new administration
• Higher and More Progressive Tax Rates
• Federal
• State(s)
• Longer Time Horizons
• Lower Expected Returns
• Greater Tax Complexity of Investment Alternatives

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Tax Savings Considerations
• Sell investments with capital gains to offset recognized
capital losses (consider end-of-year mutual fund capital
gain dividends)
• Sell investments with capital losses to offset recognized
capital gains (consider wash sale rules)
• Transfer/gift mutual funds to children prior to December
dividend record date (consider kiddie tax, gift tax) and
consider 529 accounts
• Maximize 401(k) or SEP contributions*
• Pay 4th quarter state estimated tax payments and 2017
real estate taxes by Dec. 31 (if not in AMT)
*SEP and certain other retirement contributions can be made well into latter part of 2018 for 2017 deductions

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Tax Savings Considerations
• Pay January mortgage by Dec. 31
• Make charitable donations, especially appreciated
stock, and consider D.A.F.
• Bunch miscellaneous itemized deductions to exceed
2% AGI floor (if not in AMT)
• Bunch medical deductions to exceed 10% floor
• Review withholdings, especially if subject to 0.9%
Medicare tax on earned income
• Consider IRA Withdrawals/Roth Conversions if current
year income is low.

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Key Questions
Core Capital:
• Are your core assets sufficient to support your
lifestyle?
• Can Income Tax Deferral help you meet your
spending goals?
• Opportunity to reserve more for Long-Term
Care?
Surplus Capital:
• How much will stay in estate without estate
tax exposure?
• What are the income tax characteristics of
capital earmarked for wealth transfer?
• What are the income tax consequences to the
beneficiary upon liquidation?
• Lifestyle Spending
• Personal Reserve
• Extra Spending
• Children and
Grandchildren
• Charity

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Wealth Considerations:
• Financial Goals
• Liquid Assets
• Illiquid Assets
• Spending Requirements
• Risk Tolerance
• Tax Rates
• Time Horizon
• Retirement Date
• Future Tax Domicile
• Pension Alternatives
• Asset Allocation
Personal Profile: Personal Decisions:

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Retirement Tax Deferral
• In order to secure your retirement, you may need to
increase your pre-tax savings rate late in your career
to make up for earlier years inefficiencies
• Increasing tax deferral through a cash balance or
similar plan can significantly increase your savings
rate
• State income tax differentials can have a dramatic
effect on retirement security

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Other Planning Opportunities
• Private Investments – are they worthless?
• Section 1244 rules
• Max out cafeteria plan election
• Wages to your children under 18 – fund retirement
• Contributions to Roth IRA or Conversion
• Contribution to non-deductible IRA and then Convert
to Roth
• State Income Tax considerations:
• State of Residency
• Non Resident Tax consequences
• Consequence of Investments

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TOP ESTATE AND GIFT TAX PLANNING IDEAS

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Estate and Gift Taxes
Item Rate/Threshold
Maximum Gift/Estate Tax Rates 40%
Lifetime Gift/Estate Exclusion (2017)
Lifetime Gift/Estate Exclusion (2018)
$5,490,000
$5,600,000
Annual Gift Exclusion (2017)
Annual Gift Exclusion (2018)
$14,000
$15,000

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Estate and Gift Considerations
• Gift to charitable organizations that are supporting
hurricane victims as these contributions are not
subject to limitations (but beware of the AMT)
• Gifts made directly to educational/medical
institutions are not gifts for gift tax purposes
• Gift annual exclusion amount each year ($14,000 per
person for 2017)
• Split gifts with spouse to maximize annual
exclusion/lifetime exemption

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Estate and Gift Considerations
• Gift assets with high appreciation potential
• Use a grantor retained annuity trust (GRAT) or sale to
intentionally defective grantor trust to remove
appreciation from estate
• Use a charitable lead trust to remove appreciation
from the estate

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Estate Planning in the Current Environment
• Tax reform leaves fate of estate tax uncertain, but stay
the course with plans to minimize estate tax exposure
• Small percentage of population subject to transfer tax
• Cannot ignore GST tax
• Increased importance of income tax issues
• Traditional credit shelter trust/marital trust needed?
• Portability approach has become more predominant
• Planning is more difficult for planners

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Estate Planning in the Current Environment
• Transfer planning still important for wealthy families
• Be careful before making lifetime gifts of low basis
assets
• Grantor trust planning still advantageous
• Undoing prior planning strategies
• Basis adjustment planning
• Trust planning
• Estate and trust distribution planning
• State estate taxes

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NAVIGATING THE AMT

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Top Expenses NOT Deductible for AMT
• State and local income taxes
• Real estate taxes
• Personal property taxes
• Interest on home equity loan (not used to improve
residence)
• Investment expenses
• Unreimbursed employee business expenses
• Other 2% miscellaneous itemized deductions

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AMT Can Be An Opportunity
• All AMT is not the same.
• Items such as depreciation and Qualified (ISO) stock
option adjustments can cause AMT, but also generate
credit that can be carried forward.
• Approaching /being subject to the AMT can allow for
lower effective tax rate for ordinary income items
• Bonuses
• Short term capital gains
• Exercise of Non Qualified Stock Options
• Other Controllable Ordinary Income

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Top Ideas to Reduce
Net Investment Income Tax (NIIT)

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Net Investment Income Tax
Rate 3.8% x lesser of:
Net Investment Income, or
MAGI in excess of threshold
MAGI Threshold – Single Taxpayer $200,000
MAGI Threshold – Married Filing Joint $250,000
Included in Net Investment Income Interest and Dividends
Capital Gains
Annuity Distributions
Rents and Royalties
Income from Passive Activity
NOT Included in Net Investment Income Salary and Wages
Self-Employment Income
Distributions - qualified retirement plans
Gains on sale of active interests
Income excluded from federal income

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Net Investment Income Tax Considerations
• Fund a charitable remainder trust with appreciated
securities to reduce or avoid NIIT on recognized gains,
and spread out investment income to lower income
years
• Group passive activities that comprise an appropriate
economic unit to qualify them as non-passive
• If current investments generate passive income,
consider new investments that generate passive
losses
• If you loaned money to your C Corp, then consider
reducing interest rate and increase wages (3.8 to .9)

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Net Investment Income Tax Considerations
• Shift investments to tax-exempt bonds, deferred
annuities, insurance products.
• Taxpayer’s age 70 ½ or older can donate required
minimum distributions from IRA—can reduce AGI,
thus reducing NIIT risk.
• Shift assets to relatives not subject to NIIT (consider
gift tax)

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2017 ITEMS TO CONSIDER FOR YOUR BUSINESS

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Business Considerations for 2017
• Consider capital additions that can be placed in
service before December 31.
• 50% bonus depreciation and/or up to $500,000 of
Section 179 deduction may be allowed to reduce
taxable income.
• Note: not all states recognize these accelerated
deductions and some state adjustments may be
required.
• Over and above bonus/Section 179, new Tangible
Property Regulations permit assets purchased for less
than $2,500 to be expensed.

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Business Considerations for 2017-Continued
• Consider R&D Credit Opportunities. The credit has been
enhanced
• Consider bonus payments for employees and/or owners.
• Consider establishing retirement plans.
• Funding for many plans can occur in 2018, but plans likely
need to be established in 2017.
• Review business balance sheet to consider disposing of
worthless assets (inventory, accounts receivable, etc.)
• Business sense should NOT be overridden by possible tax
benefits.

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TAX REFORM UPDATE

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House Tax Reform Bill
• On Nov. 2, 2017, House Republicans released draft tax
reform legislation, the Tax Cuts and Jobs Act
• Revisions are underway and House leaders want a
vote on the bill by Thanksgiving
• Senate plans to releases it own tax bill the week of
November 13
• The Committee for a Responsible Federal Budget
estimates that the Tax Cuts and Jobs Act would add
$1.51 trillion to the debt

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How Taxes Would Change Under the House Tax Reform Proposal
Individual Income Tax Current House Proposal
Individual Tax Rates 7 brackets with a top rate of 39.6% 4 brackets: 12%, 25%, 35%, and 39.6%
Itemized Deductions Allow for medical, state/local income
taxes, property taxes, certain
mortgage and investment interest,
charitable donations and
miscellaneous itemized
Some enhanced charitable deductions, more
restricted mortgage interest deduction
(limitation lowered to $500,000), property tax
deduction (limitation lowered to $10,000) and
certain fees; no deductions for state and local
income taxes,
Standard Deduction/Personal
Exemptions
$12,700 Standard Deduction (married)
$6,350 Standard Deduction (single)
$4,050 personal exemption
All Subject to Potential Phaseout
$24,000 Standard Deduction (married)
$12,000 Standard Deduction (single)
No personal exemption
Alternative
Minimum Tax
26%/28% Tax Rate, with exemption
amount of $53,900 (single); $83,800
(married);$23,900 Trusts
Eliminated
Rates on Capital Gains/Dividends Top rate of 20%, 1-year holding period Retained
Surtax on Net Investment Income 3.8%, above $200,000 AGI (single),
$250,000 (married)
Trusts with income over $12,400
Retained

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Estate/Gift Tax Current House Proposal
Estate Tax $5,490,000, as adjusted for
inflation, with top tax rate of 40%.
$5,600,000 for 2018
Eliminated for years after 2023
Portability of Estate and Gift Tax
Exemption
Unused exemption of deceased
spouse available (with limitations)
Eliminated
Lifetime Gift Tax Exemption $5,490,000, adjusted for inflation
$5,600,000 for 2018.
Increased to $10 million per person until the 2023 tax
year
Basis of Inherited Assets Stepped up to fair market value
at death
Retained
How Taxes Would Change Under the House Proposal

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Estate/Gift Tax Current House Proposal
Gift Tax Annual Exclusion $14,000 per donee
as indexed for inflation.
$15,000 2018.
No Change
How Taxes Would Change Under the House Proposal
Business Taxes Current House Proposal
Corporate Income Tax Top rate of 35% Top rate of 20%, excluding professional
service businesses
Pass-Through Business Income Top rate of 39.6% Top rate of 25%, including passive
investors. Active participants would have
30% of pass-through business income
subject to special rate and 70% taxed as
ordinary income, excluding professional
service businesses

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IRS/ADMIN MATTERS

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• 401K –2017 max $18,000 and 2018 max $18,500
• 401K catch up (age 50)– 2017 and 2018 max $6,000
• IRA contribution –2017 and 2018 max $5,500
• IRA catch up (age 50) – 2017 and 2018 max $1,000
• HSA contribution – 2017 $3,400 ($6,750 family); catch up
(age 55) - $1,000; 2018 $3,450 ($6,900 family), catch-up
$1,000
• Social Security Wage Base –2017 $127,200; 2018 $128,700
• For 2017 Deductible IRAs will phase-out by income
• 2017 Lifetime Exemption (Estate and Gift) is $5,490,000
(unless changed by Trump administration)
2017 and 2018 Considerations

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IRS Audit Rates
• Individuals
• Businesses
• IRS Commissioner Koskinen said he anticipates the new rules will increase
the number of partnerships examined. The IRS has shed nearly 4,000
enforcement personnel in the past decade tied to hiring freezes and budget
cuts.
FY 2015 FY 2014 Change
Overall 0.84 0.86 (0.02)
> $1 million 9.55 7.50 2.05
> $200K 2.61 2.71 (0.10)
FY 2015 FY 2014 Change
Partnerships 0.51 0.43 0.08
S Corps 0.40 0.36 0.04

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New Partnership Audit Rules
• On November 2, 2015 President Obama signed into law
the Bipartisan Budget Act of 2015 (BBA).
• The new provisions are generally effective for partnership
tax years beginning after Dec. 31, 2017.
• Partnerships may elect however, to apply the new rules to
any returns filed for tax years beginning after Nov. 2,
2015.
• New “Opt In” regulations were issued August 4 with
requests for comments by October 4
• The BBA provides a fundamental change in the way that
examination and collection of tax from partnerships will
be conducted.

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Consequences of the Change
• New rules default to assessment and collection of underpaid taxes, penalties and
interest at the partnership level
• Current partners effectively bear the economic burden of such payments, even though
they may not have been partners during the year to which the underpaid taxes relate
• Under the “default rule” current law, an adjustment that only moves an allocation from
one partner to another partner still results in underpaid taxes, because the decrease
adjustment must be ignored
• Tax computed at the highest rate for individuals or corporations (whichever rate is highest
applies to all partners There are two fundamental reasons for the new regime:
• There has been a significant increase in the number of partnership (LLC) returns
that are filed each year.
• There were many challenges to administering an IRS examination under the old
rules.
• The Joint Committee on Taxation has estimated that the new partnership audit rules
will raise $9.3 billion over the next 10 years. Clearly, Congress is giving a mandate to
the IRS to audit more large partnerships.

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?
QUESTIONS

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If You Enjoyed This Webcast…
Upcoming Courses:
• 11/16 & 11/28: Implementing the New Not-for-Profit Financial Statement Presentation
• 12/4 & 12/14: Critical Disclosures- New Revenue Recognition Requirements
• 12/6 & 12/13: Opportunities to Offset Payroll Tax Liabilities with Research and
Experimentation Credit
• 12/14: Tax Considerations for Debt-Financed Distributions from Partnerships Owned by
Private Equity
Recent Publications:
• The Houses Releases Tax Bill: One Step Toward Tax Reform?
• 2017 Individual Tax Planning Supplement
• 6 Accounting Updates You Don’t Want to Forget for Year End
• 2018 Tax Rates and Inflation-Adjusted Figures Released

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THANK YOU
CBIZ & Mayer Hoffman McCann P.C.
cbizmhmwebinars@cbiz.com