Tax Cuts and Jobs Act: Individual Tax Planning InsightRea & Associates
The new Tax Cuts and Jobs Act managed to pack in a lot of changes for individual filers, many of which have left more than a few of us scratching our heads. This webinar will dive into the provisions that will have the most impact on individual tax strategy, including changes associates with trusts and estates. Cindy Kula, CPA, PFS, CFP, and Inez Bowie, CPA, CSEP, have already spent countless hours combing through the legislation and additional guidance so you don’t have to. Join us for this session to find out what they found.
Status of Estate and Gift Tax Law as of Jan 2010; planning opportunities in 2010; cautions and traps if retroactive estate tax passed in 2010; planning for 2011.
The 2014 Essential Tax and Wealth Planning Guide discusses opportunities available through the final few months of 2013, and the planning environment beyond as policymakers continue a tax reform debate that could fundamentally change how individual taxpayers compute their taxes.
The tax-related decisions you make today, and at various points in your career, may have a marked effect on how you save for retirement and how much you will have down the road to support your goals. Many tax decisions you make about retirement are one-time choices that can be very costly to change, so it pays to plan.
For more information, visit http://www.deloitte.com/us/taxandwealthguide
This is a short description of how all the tax changes in 2010 impact your 2011 tax year. This was drafted presented on January 27, 2010, so additional changes might have occurred to impact the posted information. Check with your attorney or CPA to confirm this information.
Post-Election Estate Planning and Tax Mitigation StrategiesMelinda Merk
The outcome of the November 2020 election will likely prompt wealthy individuals and families to identify, assess and mitigate potential legal and tax risks when it comes to their personal tax and estate planning. This webinar will assist wealthy clients and their advisors in assessing potential tax law changes and discuss mitigation strategies, including the possibility of retroactive tax legislation to January 1, 2021. Presented by Melinda Merk, JD, LLM, CFP®, AEP® of McCandlish Lillard, PC and Marnette Myers, CPA, JD of Prager Metis CPAs.
Tax Cuts and Jobs Act: Individual Tax Planning InsightRea & Associates
The new Tax Cuts and Jobs Act managed to pack in a lot of changes for individual filers, many of which have left more than a few of us scratching our heads. This webinar will dive into the provisions that will have the most impact on individual tax strategy, including changes associates with trusts and estates. Cindy Kula, CPA, PFS, CFP, and Inez Bowie, CPA, CSEP, have already spent countless hours combing through the legislation and additional guidance so you don’t have to. Join us for this session to find out what they found.
Status of Estate and Gift Tax Law as of Jan 2010; planning opportunities in 2010; cautions and traps if retroactive estate tax passed in 2010; planning for 2011.
The 2014 Essential Tax and Wealth Planning Guide discusses opportunities available through the final few months of 2013, and the planning environment beyond as policymakers continue a tax reform debate that could fundamentally change how individual taxpayers compute their taxes.
The tax-related decisions you make today, and at various points in your career, may have a marked effect on how you save for retirement and how much you will have down the road to support your goals. Many tax decisions you make about retirement are one-time choices that can be very costly to change, so it pays to plan.
For more information, visit http://www.deloitte.com/us/taxandwealthguide
This is a short description of how all the tax changes in 2010 impact your 2011 tax year. This was drafted presented on January 27, 2010, so additional changes might have occurred to impact the posted information. Check with your attorney or CPA to confirm this information.
Post-Election Estate Planning and Tax Mitigation StrategiesMelinda Merk
The outcome of the November 2020 election will likely prompt wealthy individuals and families to identify, assess and mitigate potential legal and tax risks when it comes to their personal tax and estate planning. This webinar will assist wealthy clients and their advisors in assessing potential tax law changes and discuss mitigation strategies, including the possibility of retroactive tax legislation to January 1, 2021. Presented by Melinda Merk, JD, LLM, CFP®, AEP® of McCandlish Lillard, PC and Marnette Myers, CPA, JD of Prager Metis CPAs.
Post Election Special Edition Whitepaper: Eye on WashingtonCBIZ, Inc.
*Key Issues in the Tax Reform debate
*Important Dates
*What Happened in Congress?
*The Fiscal Cliff
*The PAYGO Rules
*The Tax Writing Committees
*The President’s Tax Reform Plan
*Other Tax Issue
For more information, visit www.cbiz.com or contact the author.
Income Tax Tips for PFMs Working with Military Familiesmilfamln
This is a free webinar hosted by the Personal Finance concentration area of the Military Families Learning Network.
This 90-minute webinar will address updates to tax changes that affect military families and service members. Barbara O’Neill will discuss tax basics and common tax errors during the first half hour of this interactive webinar. In the second half Taylor Spangler of University of Florida Extension will talk about the specific tax issues of concern to military families, as well as provide military specific resources for tax help and support. Carol Kando-Pineda of the Federal Trade Commission will close the session with an update on the resources available through identitytheft.gov. Find more info: https://learn.extension.org/events/3191
C-Suite Snacks Webinar Series: There’s No Vaccine for This - State and Local ...Citrin Cooperman
Sign up for our weekly C-Suite Snacks webinars here: https://www.citrincooperman.com/infocus/c-suite-snacks
Our C-Suite Snacks webinar series provides the middle market with brief, strategic, and tactical business improvement information for 30 minutes every week. Join Citrin Cooperman live every Thursday at noon for snack-sized insights for business executives.
The pandemic has affected everything in our lives, all the way down to how we run our businesses and our personal finances. In this session, State and Local Tax Partner Eugene Ruvere covered business and personal income tax considerations connected to the pandemic.
An overview of current tax reform proposals and potential implications. Overview of business implications with Chairman Camp's 2014 discussion draft, Senator Hatch's 2014 report on tax reform, corporate integration, House tax reform task force, and The Trump Plan.
Get the very latest on important tax law changes that will impact returns for Tax Year 2013. There are so many changes to keep track of each year. Let us us do the legwork and keep you up to speed on the current status of tax law changes and extenders. Topics will include the Defense of Marriage Act, Post 2013 Affordable Care Act changes and other IRS initiatives.
In this webinar, CARES Act Funding and Single Audit Update, Withum’s Devin Desmond and Jennifer Stewart discuss recent developments related to Coronavirus Aid, Relief and Economic Security (CARES) Act funding in addition to revisions to Uniform Guidance and Single Audit implications. Viewers are able to identify recent developments related to CARES Act funding and better understand revisions to Uniform Guidance and impact on Single Audits.
Post Election Special Edition Whitepaper: Eye on WashingtonCBIZ, Inc.
*Key Issues in the Tax Reform debate
*Important Dates
*What Happened in Congress?
*The Fiscal Cliff
*The PAYGO Rules
*The Tax Writing Committees
*The President’s Tax Reform Plan
*Other Tax Issue
For more information, visit www.cbiz.com or contact the author.
Income Tax Tips for PFMs Working with Military Familiesmilfamln
This is a free webinar hosted by the Personal Finance concentration area of the Military Families Learning Network.
This 90-minute webinar will address updates to tax changes that affect military families and service members. Barbara O’Neill will discuss tax basics and common tax errors during the first half hour of this interactive webinar. In the second half Taylor Spangler of University of Florida Extension will talk about the specific tax issues of concern to military families, as well as provide military specific resources for tax help and support. Carol Kando-Pineda of the Federal Trade Commission will close the session with an update on the resources available through identitytheft.gov. Find more info: https://learn.extension.org/events/3191
C-Suite Snacks Webinar Series: There’s No Vaccine for This - State and Local ...Citrin Cooperman
Sign up for our weekly C-Suite Snacks webinars here: https://www.citrincooperman.com/infocus/c-suite-snacks
Our C-Suite Snacks webinar series provides the middle market with brief, strategic, and tactical business improvement information for 30 minutes every week. Join Citrin Cooperman live every Thursday at noon for snack-sized insights for business executives.
The pandemic has affected everything in our lives, all the way down to how we run our businesses and our personal finances. In this session, State and Local Tax Partner Eugene Ruvere covered business and personal income tax considerations connected to the pandemic.
An overview of current tax reform proposals and potential implications. Overview of business implications with Chairman Camp's 2014 discussion draft, Senator Hatch's 2014 report on tax reform, corporate integration, House tax reform task force, and The Trump Plan.
Get the very latest on important tax law changes that will impact returns for Tax Year 2013. There are so many changes to keep track of each year. Let us us do the legwork and keep you up to speed on the current status of tax law changes and extenders. Topics will include the Defense of Marriage Act, Post 2013 Affordable Care Act changes and other IRS initiatives.
In this webinar, CARES Act Funding and Single Audit Update, Withum’s Devin Desmond and Jennifer Stewart discuss recent developments related to Coronavirus Aid, Relief and Economic Security (CARES) Act funding in addition to revisions to Uniform Guidance and Single Audit implications. Viewers are able to identify recent developments related to CARES Act funding and better understand revisions to Uniform Guidance and impact on Single Audits.
Intuit Presents Tax Law Changes for Tax Year 2012intuitaccts
Get the very latest on important tax law changes that will impact returns for Tax Year 2012 from Intuit's Mike D'Avolio. These changes seem to come later and later each year. Let’s us do the legwork and keep you up to speed on current status of tax law changes and extensions.
ACA, Health Insurance, and Taxes--A Full-Plate Discussion for Small BusinessesPYA, P.C.
A recent “Lunch & Learn,” jointly presented by PYA and Careadigm, provided businesses with answers to often-asked questions about healthcare reform, the Affordable Care Act (ACA), and the effects on health insurance coverage and taxes.
This presentation discusses the American Taxpayer Relief Act of 2012, better known as the “fiscal cliff” legislation, extended many key tax provisions from the Bush era for both individuals and businesses. Also addressed were the key tax provisions contained in this Act as well as a number of other tax planning issues that you should be aware of this year.
This presentation was part of a CPE webinar. Full details at http://www.macpas.com/webinar-recap-2013-tax-update/.
More info at www.macpas.com
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
The election is over - now what? We recently held free tax planning and preparation seminars discussing the tax consequences of the 2012 election.
The seminar featured Steven Hartstein, CPA, JD - Partner, and Jenna Staton, EA - Manager, and covered several topics including:
•Year end tax planning for individuals and businesses
•Year end tax planning using the estate and gift tax laws for 2012
•2013 tax law if no changes are made
•What the future holds based upon post-election Congress
If you have questions, please feel free to contact our Tax Planning & Preparation Group at 440-449-6800.
2018 Pennsylvania Tax Update: The State Budget, Legislation, and Multistate T...McKonly & Asbury, LLP
This webinar was hosted by McKonly & Asbury Senior Tax Manager and SALT Leader, Michael Eby, and Tax Supervisor, Lindsey Waltemyer.
It provides an overview of the enacted 2017-2018 Pennsylvania State Budget; a brief update on recently passed Pennsylvania tax legislation and court decisions of interest; and discusses how states, including Pennsylvania, are addressing these changes at the Federal level in their own respective tax structure.
Tax Planning Update by Tracy Monroe, CPA. Presented at Cohen & Company's Client CPE Day. Covers business as well as individual tax updates.
www.cohencpa.com
Tax Foundation University 2017, Part 1: Why Tax Reform? Why Now? Why Not Just...Tax Foundation
This presentation reviews key considerations in tax reform – balancing revenues, growth, and tax equity.
Charts describe the current tax system, its general framework, progressive structure, complexity, biases, and distorting features.
It also explores who pays taxes, and how markets shift the tax burden.
Similar to Business Whitepaper 1: Fiscal Cliff & Tax Issues/ Assessing and Mitigating the 2014 Health Care Reform Employer Penalties (20)
BIZGrowth Strategies — Cybersecurity Special Edition 2023CBIZ, Inc.
As cybercriminals continue to advance and evolve, a stagnant cyber risk management approach is simply not an option. Further, the prevalence of cyber breaches means cybersecurity is not solely an IT concern. It takes a robust set of processes and people from across your organization, working together toward a common goal. We offer fresh insights to help protect your organization from cyberthreats in multiple operational areas. Articles include:
- How Cybercriminals Are Weaponizing Artificial Intelligence
- Employee Benefits Cyber Risk Exposure Scorecard
- Closing the Security Gap: Managing Vendor Cyber Risk
- Retirement Plan Sponsor Cybersecurity Checklist
- Protect Your Digital Frontline With Employee Training
BIZGrowth Strategies - Back to Basics Special EditionCBIZ, Inc.
Amid the increasing complexity of today’s business landscape, it can be of great benefit to shut out the noise and simply get back to the basics. Summer offers the rare opportunity for organizations to slow down and sweat the small stuff.
In this issue, our experts address seven key topics intended to help leaders guide their teams to stability and refocus on the foundational elements of success, including:
- Talent Management 101: How to Attract & Retain Great Employees
- Exploring the What, Why & How Behind the Employee Experience
- The Shifting Normal: 3 Ways Leaders Can Embrace Change & Conquer Challenge
- What is Financial Wellbeing & Why Should Employers Care?
- D&O Insurance Application Basics to Protect Your Leaders
- Your Life Insurance Policy May Be One of Your Biggest Assets
- Understanding Labor Law Poster Compliance
Welcome to our newly branded newsletter, "The Advantage." The articles in this issue provide insights to help you:
■ Have conversations around tough decisions during periods of economic uncertainty
■ Evaluate fast-growing artificial intelligence tools like ChatGPT
■ Recognize colleagues who are key allies in supporting women in the workplace
■ Navigate career shifts along the path to successful leadership
■ Manage workplace culture in a hybrid model
■ Garner inspiration from the 2023 Women Transforming Business finalists and winners
BIZGrowth Strategies - Workforce & Talent Optimization Special EditionCBIZ, Inc.
Amid today’s economic uncertainty, we know you need strategies and solutions that will help your business thrive. With workforce and talent concerns running high for employers across the nation, our experts developed these articles with those critical issues top of mind. We offer fresh insights designed to attract, retain, engage and motivate your employees — all while protecting your bottom line and managing emerging risks. Articles include:
- Unlock Success with Effective Performance Management
- How Employers Can Benefit from Financial Wellbeing Programs
- How to Talk About Hard Decisions During a Recession
- Cost-Effective Health Plan Perks to Consider in 2023
- 3 HR Strategies to Recession-Proof Your Organization
- Responding to Employment Practices Liability (EPL) Claims
- Versatility — Important in Life & Life Insurance
BIZGrowth Newsletter - Economic Slowdown Solutions Special EditionCBIZ, Inc.
The "Economic Slowdown Solutions Special Edition" newsletter includes articles that present tips, strategies and ideas to help your organization master economic uncertainty and recessionary concerns. Topics include:
- Considerations for a Reduction in Force
- Tips to Prepare for Risk Management Challenges
- Tactics to Recession-Proof Your Benefits Strategy
- HR Best Practices
- Recruitment Strategies to Keep You Competitive
- 3 Innovations to Stay Nimble
- Disability Insurance for Business Owners
BIZGrowth Strategies - Cybersecurity Special EditionCBIZ, Inc.
Cyberattacks are becoming more frequent and sophisticated, making a recovery from them increasingly difficult. Without preparation, a cyberattack can be devastating to your business, having severe operational, financial, legal and reputational implications.
The prevalence of cyber breaches also means cybersecurity is no longer solely an IT concern. Elevating your information security from functional to effective takes a robust set of elements, processes and people working together toward a common goal.
Our professionals have developed these articles and resources to help you protect your organization from these attacks.
Connections Help Law Practice Efficiently Obtain $5 Million Line of CreditCBIZ, Inc.
A 15-attorney law firm operated on a contingency and hourly fee basis. While it had a strong outlook for contingency cases, the costs incurred to work...
Custom Communication Plan & Active Enrollment Result in Increased ConsumerismCBIZ, Inc.
The firm embarked on a multi-year strategic plan to build a culture of wellbeing and engagement. They wanted
to educate employees to become more engaged and wise health care consumers...
Experienced Consulting Approach Leads Engineering Firm to the Right CFOCBIZ, Inc.
The Chief Financial Officer of a leading multi-disciplined engineering and consulting
firm indicated he was considering retiring. After initially considering a search process as an in-house project, the company’s leadership agreed...
Check out the latest edition for articles on Preventing Social Engineering Attacks, Triumphing in the Talent War, 3 Signs It’s Time for a Compensation Study, Strategies to Protect Your Retirement & Tips for a Successful OSHA Inspection.
Inflation, Interest Rates & the Disruption to CRECBIZ, Inc.
From assessing the various sectors to analyzing the future of your investments, learn more from our experienced team leaders on the wide-spread trends of commercial real estate property and sales.
CBIZ Quarterly Manufacturing and Distribution "Hot Topics" Newsletter (May-Ju...CBIZ, Inc.
CBIZ Quarterly Manufacturing and Distribution "Hot Topics" Newsletter (May-Jun 2022) provides you with news and guidance on the labor crisis, how to retain top talent during the Great Resignation, the business impacts of the Russia-Ukraine War, and the benefit of long-term bonus plans.
Rethinking Total Compensation to Retain Top TalentCBIZ, Inc.
Even with a developed recruiting program, strong company culture and great work-life balance, it’s difficult for companies to attract and retain the best employees without an all-inclusive compensation strategy. Add in the combination of high inflation, talent shortages and the Great Resignation, and we’re left with a hyper-competitive labor market. As a result, employers must think outside of the box to retain top performers and explore new ways to increase the value of total compensation offered. Learn how in this article.
Common Labor Shortage Risks & Tips to Mitigate Your ExposuresCBIZ, Inc.
No industry is safe from the risks of the current labor market. Employee shortages can influence multiple liabilities, but a proactive strategy can help protect your organization. In this article, learn measures to minimize labor shortage liability risks across all industries, as well as influential industry risks for construction, manufacturing and trucking.
How the Great Resignation Affects the Tax FunctionCBIZ, Inc.
Talent shortages remain a challenge universally, but it may be hitting financial roles within businesses particularly hard. The
pressures to meet tax reform obligations coupled with the
job changeover opportunities that emerged during the Great Resignation have left many tax departments feeling under-resourced. If your company is experiencing a similar situation, here are steps you can take to support your tax function.
While employee turnover is inevitable, there are several strategies companies can implement to help combat the Great Resignation, and at the center of all these strategies is technology that can benefit employers and their staff. In this article, learn how your organization can use technology to enhance the recruiting and onboarding processes, which will help attract top talent, while setting new hires up for success.
Experienced Consulting Approach Leads Engineering Firm to the Right CFOCBIZ, Inc.
The Chief Financial Officer of a leading multi-disciplined engineering and consulting firm indicated he was considering retiring. After initially considering a search process as an in-house project, the company’s leadership agreed to secure the assistance of an executive search professional.
BIZGrowth Strategies - The Great Resignation Special EditionCBIZ, Inc.
The Great Resignation continues to plague organizations across the country. It has exacerbated a host of employer challenges, including attraction, retention and engagement of top talent, as well as mitigating new risks. Our experts have developed these articles and linked resources to help your organization combat the mass employee exodus.
Kansas businesses have an opportunity for state tax incentives of which you may want to be aware.
Recent changes to the Kansas High Performance Incentive Program (HPIP) make it more broadly available
than it was in the past.
CBIZ Quarterly Commercial Real Estate "Hot Topics" Newsletter (Jan-Feb 2022)CBIZ, Inc.
The January 2022 issue of CBIZ’s Commercial Real Estate Quarterly Hot Topics Newsletter is now available! Learn about the impact of changes lease accounting, post-pandemic calculation companies are using to reassess office space needs, tax planning knowns and unknowns and the impact of rising construction costs on insurance costs. Plus – access strategies to combat the great resignation and safeguard against the unexpected.
In the Adani-Hindenburg case, what is SEBI investigating.pptxAdani case
Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
2. Welcome!
Roundtable Panel
Bill Smith, Managing Director Zack Pace, Senior Vice President
CBIZ MHM National Tax Office CBIZ Benefits Consulting
Stu Anolik, Managing Director Larry Kline, Line Managing Director
CBIZ MHM National Tax Office Tax Practice Leader
International Tax Practice Leader CBIZ MHM Bethesda
CBIZ and MHM Mid-Atlantic Leadership
Greg Allender Michael Marchini
Senior Managing Director President
CBIZ MHM Financial Services CBIZ Insurance Services
3. “Housekeeping” - Circular 230 Notice
Any tax advice contained in this program is not
intended to be used and cannot be used for the
purposes of avoiding any penalties that may be
imposed by the Internal Revenue Code.
3
4. Today’s Agenda
• Roundtable Part 1 - Fiscal Cliff & Tax Issues
– Bill Smith, Larry Kline, Stu Anolik
• Roundtable Part 2 – Assessing and Mitigating the
2014 Health Care Reform Employer Penalties
– Zack Pace and Bill Smith
• Q&A
4
5. Roundtable Part 1 - Fiscal Cliff & Tax Issues
• Fiscal Cliff
• American Taxpayer Relief Act of 2012
– Payroll Tax Cut (Expired) – Limitations to Personal Exemptions
– Revised income tax rates and Itemized Deductions
effective 2013 – Estate and Gift Tax Provisions
– Revised capital gains and – Extension of 179 and Bonus
dividend rates Provisions
– AMT Patch retroactive for – Individual and Business Extenders
2012, indexed 2013 and after
• New Medicare Taxes for 2013 under the Health Care Act
• State Taxes and International Tax Provisions
• Potential Tax Reform
5
6. Roundtable Part 2 – Assessing and Mitigating the
2014 Health Care Reform Employer Penalties
• Key Penalty Risks • Variable Hour Employees
• Five Steps to Determining • Seasonal Employees
Your Risk • The Exchanges
– Eligibility Waiting Period
• Summary, Next Steps
– Employer Size
– 30 Hour Rule
– Premium Affordability Test
– Plan Design Affordability
6
8. Fiscal Cliff - Overview
Combination of tax increases due to the expiration of tax
provisions, new taxes under the Affordable Care Act, and the
$1.2T of mandatory spending cuts put in place by the Budget
Control Act of 2011 (known as “sequestration”). All would have
been effective as of January 1, 2013.
Expiring Taxes New Taxes
• 2001 and 2003 tax cuts • Health care taxes
• Payroll tax cut
• Extenders Spending
• Estate tax relief • Automatic spending cuts
(“Sequestration”)
8
9. Fiscal Cliff – Impact
• CBO projected that the automatic spending cuts plus
expiration of tax cuts and extenders would send the US
into a recession in 2013
• Stock market could drop due to higher rates on capital
gains and dividends
• Nearly 90% of US taxpayers would pay more tax
• Middle income household average tax increase: $3,000
• IRS warned Congress if they don’t act by the end of the
year it could delay the tax filing season
9
11. American Taxpayer Relief Act of 2012 –
Ordinary Income Tax Rates
• Current income tax rates of 10%, 15%, 25%, 28%, 33%
and 35% permanently extended
– Rates would have increased to 15%, 28%, 31%, 36% and 39.6%
• A 39.6% rate will apply to individuals with taxable income
over $400,000 ($450,000 for joint filers; $425,000 for
heads of households) beginning in 2013
– Caution: the rate could be as high as 43.4% on investment income
if subject to the 3.8% Medicare surtax
11
12. American Taxpayer Relief Act of 2012 –
Capital Gains and Dividend Rates
• Current capital gains and qualified dividend rate of 15%
permanently extended for individuals with taxable income
of $400,000 or less ($450,000 or less for joint filers)
beginning in 2013
– Caution: the rate could be as high as 18.8% if the income is subject
to the 3.8% Medicare surtax
– Rate still 0% for taxpayers in 10%/15% ordinary income brackets
– Capital gain rate would have increased to 20% and qualified
dividend rate would have increased to ordinary income rates
12
13. American Taxpayer Relief Act of 2012 –
Capital Gains and Dividend Rates (continued)
• A 20% rate will apply to individuals with taxable income
over $400,000 ($450,000 for joint filers) beginning in 2013
– Caution: the rate could be as high as 23.8% if the income is subject
to the 3.8% Medicare surtax
13
14. American Taxpayer Relief Act of 2012 –
Permanent AMT Relief
• The AMT “Patch” expired 12/31/11
• The patch has routinely been extended in the past
• The patch temporarily increased the AMT exemptions,
which are not indexed for inflation
– For example, in 2011 the exemption for MFJ increased from
$45,000 to $72,450
• The Act makes the higher exemption amounts permanent
which saves an estimated 30 million taxpayers from
having to pay the AMT on their 2012 returns
14
15. American Taxpayer Relief Act of 2012 –
Permanent AMT Relief (continued)
• The higher exemptions amounts are retroactively
effective to the beginning of 2012
• The increases in the exemption amounts are as follows:
– Singles, from $33,750 to $50,600
– MFJ, from $45,000 to $78,750
– MFS, from $22,500 to $39,375
• The exemption amounts are now indexed for inflation
beginning in 2013
• In addition, many nonrefundable personal credits will now
reduce the AMT liability as well as the regular tax liability
16. American Taxpayer Relief Act of 2012 –
Personal Exemption Phase-out (PEP)
• Beginning in 2013, the Act reinstates the previously
suspended Personal Exemption Phase-out for taxpayers
with AGI over the following thresholds:
– Single filers $250,000
– Married couples $300,000
– Heads of Household $275,000
• Under the phase-out, the total amount of personal
exemption that can be claimed is reduced by 2% for each
$2,500 (or portion thereof) by which the taxpayer’s AGI
exceeds the applicable threshold
16
17. American Taxpayer Relief Act of 2012 –
“Pease” Limitation
• Beginning in 2013, the previously suspended limitation on
itemized deductions is reinstated for taxpayers whose
AGI are above the following thresholds (same as PEP)
– Single filers $250,000
– Married couples $300,000
– Heads of Household $275,000
17
18. American Taxpayer Relief Act of 2012 –
“Pease” Limitation (continued)
• For taxpayers subject to the limitation the total amount of
their itemized deductions is reduced by 3% of the amount
by with the taxpayer’s AGI exceeds the above thresholds
• The reduction is limited to 80% of the otherwise allowable
itemized deductions
18
19. American Taxpayer Relief Act of 2012 –
Estate and Gift Tax
• The estate and gift tax rates and lifetime exemption were
set to go back to 2001 levels with the expiration of the
Bush-Era tax provisions
– Top Rate of 55% (35% in 2012)
– Exclusion amount of $1 million ($5.12 million in 2012)
• Popular opinion was that Congress would eventually
come up with a 45% rate with a $3.5 million exclusion for
estates, while the gift tax exemption would go back $1
million
19
20. American Taxpayer Relief Act of 2012 –
Estate and Gift Tax (continued)
• Under the Act, for individuals dying and gifts made after
2012, the $5 million exemption (adjusted for inflation)
remains for both estate, gift and GST taxes
– 2013 exemption projected to be $5,250,000
• The top rate is permanently increased from 35% to 40%
• The top rate kicks in on taxable estates and gifts over $1
million (after taking into account the exemption)
• The Act also maintains the portability rules for a
deceased spouse’s unused estate tax exemption
20
21. American Taxpayer Relief Act of 2012 –
Expiration of the Payroll Tax Cut
• An extension of the temporary 2% reduction of the social
security payroll tax rate for employees and self-employed
persons was not included in the bill
– On January 1 2013, the employee’s share of FICA increased from
4.2% to 6.2%
– FICA portion of self-employment tax increased from 10.4% to
12.4%
21
22. American Taxpayer Relief Act of 2012 –
Individual Tax Extenders
• The election to deduct state and local general sales taxes
instead of state income tax which expired at the end of
2011 was extended through 2013 and was retroactively
reinstated for 2012
• The child tax credit remains at $1,000 (was to revert back
to $500 after 2012)
• The exclusion in income from the discharge of
indebtedness for a personal residence was set to expire
at the end of 2012 and is now extended through 2013
22
23. American Taxpayer Relief Act of 2012 –
Individual Tax Extenders
• Tax free distributions from IRAs for charitable purposes
– Originally expired at the end of 2011
– Under the new law, qualified distributions from IRA’s for
charitable purposes made prior to February 1, 2013 may be
deemed to be made in 2012
– Also, cash distributions taken from IRA’s after November 30,
2012 and transferred to charity prior to February 1, 2013 may
qualify as tax-free distributions in 2012 (assuming the
distributions otherwise qualify for the exclusion)
23
24. American Taxpayer Relief Act of 2012 –
Section 179 Expensing
• The Section 179 expensing provision is retroactively
extended by the Act through 2014:
– The limit dropped from $500,000 in 2011 to $139,000 in 2012 and
was set to revert back to $25,000 in 2013
– The Act keeps in place the 2011 level of $500,000 for the years
2012 and 2013
– The deduction begins to phase out when total qualified purchases
for the year exceeds $2 million
– The Act also reinstated the 2011 provision that allows the
immediate deduction of up to $250,000 of qualified leasehold
improvements, restaurant and retail improvements
24
25. American Taxpayer Relief Act of 2012 –
Bonus Depreciation
• The percentage dropped from 100% in 2011 to 50% in
2012 and was set to expire starting in 2013
• The Act extends the 50% bonus depreciation provision to
assets placed in service before January 1, 2014
• The original use of the property must begin with the
taxpayer, so used equipment will not apply for bonus
depreciation
25
26. American Taxpayer Relief Act of 2012 –
Bonus Depreciation (continued)
• The property must have a recovery period of 20 years or
less
• Bonus depreciation is mandatory, but taxpayers can elect
out (the election applies to all property in the class or
classes of property for which the election is made)
26
27. American Taxpayer Relief Act of 2012 –
Business Tax Extenders
• The following business tax provisions that had expired at
the end of 2011 were extended through 2013, retroactive
to the beginning of 2012, including, but not limited to the:
– The research and experimentation (R&E) credit
– The 15 year straight line cost recovery for qualified leasehold
improvements, qualified restaurant property and qualified retail
improvements
27
28. American Taxpayer Relief Act of 2012 –
Business Tax Extenders (continued)
• The following business tax provisions that had expired at
the end of 2011 were extended through 2013, retroactive
to the beginning of 2012, including, but not limited to the:
– Five-year recognition period for S corporation built-in gains tax
(originally was a 10 year period)
– 100% exclusion of gain from sale of qualified small business stock
– New markets tax credit
– Work opportunity tax credit (WOTC)
28
29. American Taxpayer Relief Act of 2012 –
Energy Incentives Extenders
• Several energy incentives, most of which had expired at
the end of 2011, were extended through 2013, including,
but not limited to the:
– Residential energy property credit
– Energy efficient new homes credit
– Energy efficient appliances credit
– Renewable electricity production credit, and
– Credit for biodiesel and renewable diesel used as fuel
29
30. American Taxpayer Relief Act of 2012 –
Other Notable Provisions
• The automatic spending cuts scheduled to go into effect
on January 1st were deferred until March 1, 2013
• Taxpayers may now transfer amounts from a qualified
retirement plan to a qualified Roth plan (e.g. Roth 401(k))
without paying an early withdrawal penalty
30
31. American Taxpayer Relief Act of 2012 –
Other Notable Provisions (continued)
• The provision that would have drastically reduced
Medicare payments to physicians has been deferred for
another year
• Federal long-term unemployment benefits have been
extended for one year
• The Federal milk subsidy has been extended for one year
31
33. New Medicare Taxes
• Effective in 2013
• Two new taxes:
– Additional 0.9% tax on earned income
– 3.8% surtax on unearned income
• Generally impacts couples with income over $250,000
and individuals with income over $200,000
• Enacted as part of 2010 healthcare reform legislation
(Affordable Care Act or “ACA”)
• IRS recently issued proposed reliance regulations on the
operation of the two new Medicare taxes 33
34. Additional 0.9% Medicare Tax on Earned Income
• Change in 2013:
– Additional 0.9% HI tax on wages (to 2.35%) and net SE income
(to 3.8%) in excess of the thresholds below
– Additional tax is on employee’s contribution only (or ½ of SE
individual’s contribution)
Filing Status Threshold
Married Filing Jointly $250,000
Single/Head of Household $200,000
Married Filing Separately $125,000
34
35. Additional 0.9% Medicare Tax on Earned Income
• Unlike the OASDI ceiling which is applied based on the
employee’s wages, the 0.9% additional Medicare tax is
applied based on the combined wages of married
couples filing jointly
• This causes additional complications as it pertains to
employee withholding
35
36. Withholding on 0.9% Medicare Tax
• Employers are required to withhold the additional 0.9%
tax on wages in excess of $200,000 whether married or
not
• Employers must disregard the wages received by the
employee’s spouse
36
37. Withholding on 0.9% Medicare Tax (continued)
• Implications:
– If an employee’s wages are below $200,000 but when combined
with the spouse’s wages they exceed $250,000, the couple may
be under-withheld
– If an employee’s wages are between $200,000 and $250,000 and
the spouse has no wages, the couple may be over-withheld
– The 0.9% tax is a tax for purposes of the underpayment of
estimated tax penalty
37
38. 3.8% Medicare Tax on Unearned Income
• Surtax on Net Investment Income (NII)
• First time that FICA/Medicare taxes have been assessed
on unearned income
• Applies to individuals, trusts and estates
• Considered a tax for purposes of the underpayment of
estimated tax penalty
• The proposed regulations attempt to define NII subject to
the 3.8% tax
38
39. 3.8% Medicare Tax – Individuals
• Individuals
– 3.8% of the lesser of:
• Net investment income, or
• Excess of Modified AGI over the threshold amounts below
– Modified AGI = AGI + foreign earned income exclusion
Filing Status Threshold
Married Filing Jointly $250,000
Single/Head of Household $200,000
Married Filing Separately $125,000
39
40. 3.8% Medicare Tax – Trusts and Estates
• Trusts and Estates
– 3.8% of the lesser of:
• Undistributed net investment income, or
• AGI over the amount at which the highest tax bracket is applicable
($11,950 for 2013)
– Does not apply to simple trusts since, by definition, all income is
distributed annually (but would apply to income distributed to
beneficiaries)
– Does not apply to grantor trusts since they are disregarded for
income tax purposes (but would apply to income reported by
grantor)
40
41. 3.8% Medicare Tax – Net Investment Income
• Net Investment Income – Defined as investment income
less otherwise allowable deductions properly allocable to
such income
41
42. 3.8% Medicare Tax – Net Investment Income (cont’d.)
• Includes three categories:
– Gross income from interest, dividends, annuities, royalties and
rents (other than such income derived in the ordinary course of an
active trade or business)
– Other gross income from any passive trade or business or
business in the trading of financial instruments or commodities
– Net gains attributable to the disposition of property (other than
property held in an active trade or business)
• Less:
– Deductions properly allocable to such gross income or net gain
42
43. 3.8% Medicare Tax – Key Points
• Taxpayer’s must have both NII and gross income over the
applicable thresholds in order to be subject to the tax
• The thresholds are NOT adjusted for inflation
– This may cause a problem similar to the AMT in the future
• The inclusion of passive activities in NII represents a
huge shift in traditional tax planning
– More emphasis will be placed on treating profitable activities as
active instead of passive to avoid the 3.8% surtax, however
• Passive losses may go unused
• Net income from an active trade or business may be subject to
self employment tax 43
44. 3.8% Medicare Tax – Key Points
• Only property sold that was not held in a trade or
business is included in net investment income
– In the case of sales of interests in a partnership or S corporation
we have to do some calculations in order to determine how much
of the gain or loss is attributable to an active trade or business
– The Proposed Regulations include a complex four step process to
achieve this
• The surtax also applies to income attributable to “working
capital”
44
45. 3.8% Medicare Tax – Key Points
• Net investment income reduced by “properly allocable”
deductions
– Examples include investment interest expense, investment fees,
expenses related to rents, trade or business deductions and state
and local income taxes
• Allocation of state and local taxes between net investment income and
other income can be determined under “any reasonable method”
• The proposed regs provide a safe harbor method of allocating state
and local taxes based on the ratio of NII to gross income
– Carryovers from years prior to 2013
• Capital losses, passive losses and investment interest expense
45
46. 3.8% Medicare Tax – Key Points
• The 3.8% Medicare tax does not apply to distributions
from qualified retirement plans
• However, those distributions still increase MAGI which
could either
– raise the taxpayer’s MAGI over the threshold amount,
thus subjecting the taxpayer to the tax, or
– increase the amount subject to the tax by increasing
the spread between MAGI and the threshold amount
46
47. 3.8% Medicare Tax – Key Points
• The 3.8% Medicare tax does not apply to investment
income excludible from taxable income (e.g. municipal
bond interest, excluded gain from sale of personal
residence)
47
48. 3.8% Medicare Tax – Case Study
Interest income from various corporate bonds and bank $10,000
accounts
Income Tax-exempt interest income from various municipal bonds $8,000
Scenario: Qualified dividend income from various mutual funds and $12,000
stock investments
Net long-term capital gains from the disposition of various $40,000
mutual funds and stock investments
Regular IRA distribution $100,000
Net rental income from a building that Joe owns $15,000
Distributive ordinary trade or business income from an LLC $20,000
in which Joe does not materially participate
Distributive net Section 1231 gain from the same LLC $10,000
Distributive ordinary trade or business income from an S $60,000
corporation in which Joe materially participates
Distributive net Section 1231 gain from the same S $50,000
corporation
49. 3.8% Medicare Tax – Case Study
Interest income from various corporate bonds and bank $10,000
Net accounts
investment Qualified dividend income from mutual funds and stock $12,000
income is investments
calculated
as follows: Net long-term capital gains from the disposition of $40,000
investments
Net rental income $15,000
Ordinary trade or business income from LLC in which Joe $20,000
does not materially participate
Net Section 1231 gain from the LLC $10,000
Net investment income $107,000
49
50. 3.8% Medicare Tax – Case Study
Interest income from various corporate bonds and bank $10,000
accounts
Modified Qualified dividend income from mutual funds and stock $12,000
adjusted gross investments
income is Net long-term capital gains from the disposition of $40,000
calculated as investments
follows:
Regular IRA distribution $100,000
Net rental income $15,000
Ordinary trade or business income from the LLC $20,000
Net Section 1231 gain from the same LLC $10,000
Ordinary trade or business income from the S corporation $60,000
Net Section 1231 gain from the same S corporation $50,000
Modified AGI $317,000
51. 3.8% Medicare Tax – Case Study
Modified AGI $317,000
The 3.8% Less Threshold $200,000
Medicare
contribution Modified AGI in Excess of Threshold $117,000
tax is
calculated Lesser of Net Investment Income and Modified AGI in $107,000
as follows: Excess of Threshold
Medicare Tax Rate 3.8%
Medicare Contribution Tax $4,066
51
52. Planning Strategies to Reduce 3.8% Medicare Tax
• Convert to a Roth IRA so future qualified retirement plan
distributions don’t increase MAGI
– Although regular IRA distributions are not subject to 3.8% tax,
they are included in modified AGI
– In prior example, if IRA distribution was from Roth IRA, modified
AGI would have been reduced to $217,000, so the maximum
subject to 3.8% tax would be reduced to $17,000
– If modified AGI (minus threshold amount) is greater than net
investment income even without IRA distributions, no benefit to
switching to Roth
52
53. Planning Strategies to Reduce 3.8% Medicare Tax
• Taxable conversion amount would be subject to 3.8% tax
– Time Roth conversion in a year with minimal NII
• Realign Investment Strategies
– Shift investments to growth securities that don’t produce
dividends, i.e. tax-exempt bonds, insurance (with cash buildups)
and annuities
– Take advantage of installment sale treatment to spread passive
income over several years
53
54. Planning Strategies to Reduce 3.8% Medicare Tax
• Realign Investment Strategies (continued)
– Time gains and losses to offset
• Be careful of wash sale rules on loss positions
• Gains not subject to wash sale rules
– Shift investments to children
• Avoid 3.8% tax if MAGI less than threshold
• Kiddie tax may tax income at parents’ marginal rate (under 19
or under 24 and full time student)
54
55. Planning Strategies to Reduce 3.8% Medicare Tax
• Passive Activities
– Evaluate profitable passive activities to see if changes could be
made to reach to the level of material participation
– Watch self-employment income from partnerships and LLC’s
– Review passive activity rules to see if passive activities can be
grouped with non passive activities to avoid passive income
• Factors to consider include similarities, common ownership,
geographical locations, interdependence of operations
• Consider passive loss investment opportunities to offset
passive income
55
57. Estate Taxes
• The state “Pick-Up” tax permanently repealed
• Many states have a lower exemption that the Federal
exemption
• Many states lost lots of revenues with these changes
• Watch for state legislators to look at this area for future
revenue increases
57
58. Business Provisions
• Bonus Depreciation extended
– As most states decouple anyway (31 states do), no new impact
– Concern for business – monitoring the differences between
Federal and state
– For multi-state business, can have multiple depreciation
schedules!
• Renewable Energy Credits
– No direct benefit, but potential increases in utilization of state
credits and/or increased sales tax receipts
58
59. Future Impact
• Will more states decouple from the Federal code?
• Politically, many states have one party in charge – could
make it easier to push through major tax changes.
59
61. American Tax Relief Act of 2012 –
International Tax Provisions
• Active Financing Exception
– Certain income from the active conduct of a banking, financing or
similar business, or from the conduct of an insurance business is
excluded from the definition of Subpart F income through 2013.
– Allows banks, finance, insurance and similar companies to defer
active financing income offshore for tax years beginning before
January 1, 2014.
61
62. American Tax Relief Act of 2012 –
International Tax Provisions
• Look through rule for payments between related CFCs
– Look-through treatment applies to dividends, interest, rents, and
royalties received by one CFC from a related CFC; allows payments
to be treated as non-subpart F income.
– Look-through rules similar to those that a U.S. shareholder uses to
allocate interest, rent, royalty and dividend income received from a
CFC to separate foreign tax credit baskets applied
62
63. American Tax Relief Act of 2012 –
International Tax Provisions
• 20% Withholding Rate on Sales of USRPIs
– The IRS may, to the extent provided in regulations, reduce the
withholding rate on distributions from a partnership, trust or estate
attributable to the disposition of a USRPI from 35% to 20%.
63
64. IRS Enforcement - Compliance
• Foreign Account Tax Compliance Act (“FATCA”)
– IRS has entered into several inter-governmental agreements to
facilitate enforcement of FATCA provisions.
– New in 2011: Form 8938 requires reporting of certain foreign
financial assets – may require disclosure of foreign bank accounts
that are already reported on FBAR.
64
65. IRS Enforcement - Compliance
• Report of Foreign Bank and Financial Accounts (“FBAR”)
– FBAR filing deadline extended to June 30, 2014 for certain
individuals with signature authority but no financial interest in foreign
accounts.
– January 2012 offshore voluntary disclosure program (“OVDP”)
continues to be available.
– Publicly, the IRS acknowledges its 2011 OVDP assumed willfulness
in imposing penalties, and is making an effort to avoid this “one size
fits all” approach within the 2012 OVDP
65
66. International Tax – Planning Examples
• IP Migration
– Transfer of intellectual property assets outside U.S. taxing jurisdiction
– Requires valuation of assets, tax-efficient structuring of the
transaction, and transfer pricing study to move taxable income in tax-
favored countries.
– May also involve use of an offshore company, e.g. Cyprus.
66
67. International Tax – Planning Examples
• Expatriation Planning
– US citizens and residents are subject to U.S. gift tax and estate tax
on transfers of any property; non-citizens and non-residents are
subject to gift tax and estate on transfers of real or tangible property
located in the US (including stock in a U.S. corporation).
– US taxpayers are taxable on gifts from “covered expatriates” –
nonresident aliens can take steps to avoid being a covered
expatriate (e.g., no green card).
– Use of foreign trusts to hold assets until heirs become expatriates.
– Before expatriating, a US person can make gifts up to the estate and
gift exclusion amount ($5 million adjusted for inflation, per the
American Taxpayer Relief Act of 2012). 67
69. Potential Tax Reform
• Upcoming Budget Negotiations
– Raising the Debt Ceiling
– Automatic Cuts Under Sequestration – March 1, 2013
• “We can’t simply cut our way to prosperity”. “The deficit
needs to be reduced in a way that is balanced. Everyone
pays their fair share.” [President Obama, January 2, 2013]
• “Simply put, the tax code is a nightmare. The Ways and
Means Committee will pursue comprehensive tax reform
in the new Congress.” [Rep. Dave Camp, Chairman of the House
Ways and Means Committee, January 2, 2013]
69
70. Top 5% Income Earners paid 58.7% of the Taxes
Category AGI Cut Off Number Share of
Income Tax
Top 0.1% $1,432,890 137,982 17.1%
Top 1% $343,927 1,380,000 36.7%
Top 5% $154,653 6,899,000 58.7%
Top 10% $112,124 13,798,000 70.5%
Top 25% $66,193 34,496,000 87.3%
Top 50% $32,396 68,991,000 97.7%
Bottom 50% <$32,396 68,991,000 2.3%
Source: Tax Foundation, based on IRS returns 2009
70
71. Potential Tax Reform
• The issue on individual rates my be settled but some
popular deductions may be in jeopardy down the road as
Congress looks to raise more revenue
• Various tax reform studies have looked at eliminating or
capping many popular deductions including:
– Mortgage interest deduction
– Charitable deductions
– Employer sponsored health insurance exclusion
– State and local taxes
– Interest exclusion on state and local bonds
71
72. Obama Tax Plan – Individuals
• What did not get in the new law
– Cap certain deductions or exclusions at 28% for taxpayers in the
36% and 39.6% brackets
– Eliminate the carried interest “loophole” for hedge fund managers
and other similar service providers
– Eliminate a special depreciation “loophole” for corporate jets (this
would increase the period for depreciation from 5 years to 7 years
and would raise $2 billion over 10 years)
– Replace the AMT with the “Buffett Rule” – taxpayers with income
over $1 million must pay an effective federal income tax rate of at
least 30%.
72
73. Potential for Corporate Tax Reform
• February 2012-The President’s Framework for Business
Tax Reform (the Framework)
– Rough blueprint for the President’s plan
• To cut corporate tax rates to internationally competitive levels
• Simplify the corporate tax rules
• Reduce or eliminate tax loopholes in the current system
73
74. Corporate Reform Under the Framework
• Reduce top corporate rate from 35% to 28%
• Reduction or elimination of many popular deductions and
credits, for example:
– Accelerated depreciation
– Interest expense deduction
– LIFO inventory accounting
– Oil and gas tax preferences
– Other tax breaks for specific industries
• According to the Framework these tax expenditures create a
tax system that distorts business decision making and results
in a less efficient allocation of capital as seen by the various
tax rates by industry
74
75. Industry Tax Rate
Agriculture, forestry, Fishing and Hunting 22%
Effective Actual
Mining 18%
Corporate Tax
Utilities 14%
Rates By Selected Construction 31%
Industry 2007- Manufacturing 26%
2008* Wholesale and Retail Trade 31%
Transportation and Warehousing 19%
Information 25%
Insurance 25%
Finance & Holding Companies 28%
Real Estate 23%
Leasing 18%
All Services 29%
Average Effective Actual Tax Rate 26%
*Source: U.S. Treasury, Office of Tax Analysis
76. Corporate Reform Under the Framework
• Proposes to strengthen U.S. manufacturing by offering
incentives, including cutting the top corporate rate on
manufacturing to 25% by
– Increase in Domestic Production Activities Deduction (DPAD)
– And an even lower rate (approximately 18%) for “advanced
manufacturing”
• Establish greater parity between large pass-through
entities and C corporations
– Previously the Treasury had proposed taxing any business with
more than $50 million in gross receipts as a corporation
76
77. Corporate Reform Under the Framework
• Framework calls for simplification for small businesses
and adding incentives, such as
– Allowing companies with up to $10 million in gross receipts to
use the cash method of accounting (current limit is $5 million)
– Allowing small businesses to expense up to $1 million under
IRC Section 179
– Expanding and simplifying the Small Business Health Care Tax
Credit (including an increase in the eligibility cut-off from 25 to
50 employees)
77
78. Potential State Reaction to Federal Tax Reform
• Multi-state tax issues – more states moving towards a
weighting of the sales factor and/or considering where the
revenues are generated from, versus sold to
• State sales tax nexus – could Congress actually take
action on this much delayed area?
78
79. International – Obama Proposals
• Retain the worldwide taxation system vs. territorial tax
system
– A territorial system would not tax the foreign income of U.S.
individuals or corporations
• Impose a minimum tax on foreign profits of U.S. companies
to discourage taxpayers from keeping funds outside the US
(current estimate is up to $2 trillion in cash overseas)
• Protect U.S. jobs by:
– Draw manufacturing investments to the U.S. by providing a 20% tax
credit for locating jobs and business activity in the U.S.
– Prohibiting tax deductions for shipping jobs overseas
79
80. Summary / Key Takeaways
• Fiscal Cliff
• The American Taxpayer Relief Act of 2012
– Payroll Tax Cut not included
– AMT Relief for 2012
– Equipment Expensing for 2012
• 2013 Changes
– Changes to Individual Income Tax rates
– Changes to the Estate and Gift rates
– New Medicare Taxes
• 0.9% Medicare tax on earned income
• 3.8% Medicare tax on unearned income
80
81. Summary/Key Takeaways
• Potential Future Tax Reform
– Effect on Individual Deductions
– Capping Itemized Deductions
– Buffet Rule
– Potential Corporate Tax Reform
• Broaden the tax base and lower the rate
– Establish parity between corporations and large passthroughs
– International Taxation
81