2010 tax planning seminar
Download
1 / 75

2010 Tax Planning Seminar - PowerPoint PPT Presentation


  • 202 Views
  • Updated On :

2010 Tax Planning Seminar. Presented by. Your Firm Name. The clock is ticking on savings …. Tax Rate Forecast. Tax Credits and Deductions. Credits: reduce tax dollar for dollar Deductions: lower your taxable income. 2010 Child Tax Credit $1,000 per child. Education Credits.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about '2010 Tax Planning Seminar' - Mia_John


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
2010 tax planning seminar l.jpg

2010 Tax Planning Seminar

Presented by

Your Firm Name




Tax credits and deductions l.jpg
Tax Credits and Deductions

Credits: reduce tax dollar for dollar

Deductions: lower your taxable income


2010 child tax credit 1 000 per child l.jpg
2010 Child Tax Credit$1,000 per child


Education credits l.jpg
Education Credits

Hope Scholarship Credit

(American Opportunity Tax Credit) = $2,500 maximum

Lifetime Learning Credit = $2,000 maximum


Making work pay credit l.jpg
Making Work Pay Credit

A credit for wage earners and the self-employed

  • 6.2% of earned income or

  • $400 a year for single filers

  • $800 a year for joint filers


Standard deduction l.jpg
Standard Deduction

  • Single Filers: $5,700

  • Joint Filers: $11,400

  • Married Filing Separately: $5,700

  • Head of Household: $8,400


Itemized deductions reduce taxable income l.jpg
Itemized Deductions Reduce Taxable Income

  • Medical expenses

  • Nonbusiness taxes

  • Interest expenses

  • Investment expenses

  • Professional fees

  • Charitable contributions


Donating to charity l.jpg
Donating to Charity?

  • Donations of cash or property to qualified charities are deductible.

  • Charitable donations are limited to 50% of your adjusted gross income.

  • Deductions for vehicle donations are limited for vehicles worth more than $500.


Health insurance l.jpg
Health Insurance

  • Individual Coverage Mandate begins in 2014.

  • Subsidies will be provided for the uninsured.

  • New taxes will be levied to cover the costs of subsidies..



Employer sponsored plans l.jpg
Employer-Sponsored Plans

  • Defined Benefit Plans

  • Defined Contribution Plans


401 k contribution limits 2010 l.jpg
401(k) Contribution Limits 2010

Under Age 50: $16,500

Additional “Catch-Up” for those Age 50 and Older: $5,500


The roth 401 k l.jpg
The Roth 401(k)

  • Contributions are made with after-tax dollars.

  • Earnings grow tax free.

  • Distributions are tax free in retirement.


How much of your income will you need in retirement l.jpg
How much of your incomewill you need in retirement?



Roth iras l.jpg
Roth IRAs

  • Make contributions with after-tax dollars

  • Receive tax-free distributions



Roth ira conversions l.jpg
Roth IRA Conversions

Income limits on conversions have

been eliminated in 2010.

You will be taxed on the conversion amount.

You will not owe a penalty


Tax tip l.jpg
Tax Tip:

IRA savings can be used without penalty for qualified college expenses or to help pay for your first home.


Which ira is best for you roth vs traditional l.jpg
Which IRA Is Best for You?Roth vs. Traditional


Slide23 l.jpg

Taxes Reduced for Capital Gains and Dividends through 2010


Capital gains tax rates l.jpg
Capital Gains Tax Rates

  • 15% for investors in the top four brackets

  • Zero tax through 2010 for investors in the 10% and 15% brackets


No tax relief for short term gains l.jpg

WARNING!

No Tax Relief for Short-Term Gains!


Slide26 l.jpg

Capital Gains Advantage

Gain Tax Net Cash

11 months $50,000 $17,500 $32,500

12 months $40,000 $ 6,000 $34,000


Other gains rates unchanged l.jpg
Other Gains Rates Unchanged

Collectibles 28%

Real estate depreciation recapture 25%


Large gains can trigger the amt l.jpg

WARNING!

Large Gains Can Trigger the AMT


Amt danger zones l.jpg
AMT Danger Zones

  • Large capital gains

  • Numerous dependency exemptions

  • Large state income tax deductions

  • Large deductions for unreimbursed employee business expenses or miscellaneous expenses

  • Substantial medical expenses

  • Incentive stock options


2010 amt exemption amounts l.jpg
2010 AMT Exemption Amounts

(without further reform)

  • $45,000 for joint filers, down from $70,950 in 2009

  • $33,750 for single filers, down from $46,700 in 2009


Tax tip31 l.jpg
Tax Tip:

Offset gains in your portfolio with losses at the end of the tax year.


Dividend tax rates l.jpg
Dividend Tax Rates

  • 15% for investors in the top four brackets

  • Zero tax through 2010 for investors in the 10% and 15% brackets


Dividend vs ordinary income l.jpg
Dividend vs. Ordinary Income

Ordinary income rates 10% – 35%

Dividend rates 0% – 15%

Rates apply for both regular tax and AMT.


Qualifying dividends l.jpg
Qualifying Dividends

  • Domestic corporations

  • Certain foreign corporations

  • Certain mutual fund dividends


Non qualifying dividends l.jpg
Non-Qualifying Dividends

  • Retirement plans or IRAs

  • Mutual fund interest and short-term gains

  • Money market interest

  • S corporation distributions


15 dividends cannot offset investment interest expense l.jpg
15% dividends cannot offset investment interest expense.

15% dividends also cannot offset capital losses.


Slide37 l.jpg

Ordinary Income Interest

15% Dividends

vs.


Slide38 l.jpg

No 15% rate for dividends in retirement plans

Hold stock earning dividends taxed at 15% outside of retirement accounts


Slide39 l.jpg

  • Not all stocks are created equal.

  • Some stocks do not pay dividends.

  • Choose investments that make sense for you.


Slide40 l.jpg

Current Income

Capital Appreciation

vs.

Focus on Total Return


Slide41 l.jpg

Sell appreciated stock anduse the proceeds to…

  • Buy dividend-paying stock

  • Diversify investment holdings

  • Change asset allocations


What is l.jpg
What is…

?

Long-Term


Tax goals vs investing goals l.jpg
Tax Goals vs. Investing Goals

Always consider:

  • Portfolio balance

  • Risk tolerance

  • An investment’s impact on your situation


Slide44 l.jpg

Plan around the “Kiddie Tax”

Applies to children under age 19, or age 24 for full-time students.


Slide45 l.jpg

Good News for Business Owners

  • Tax incentives for hiring and retaining workers

  • Tax breaks for providing health insurance

  • Increased Section 179 expensing


Hiring incentives l.jpg
Hiring Incentives

  • New Hires: Social Security tax liability is waived through December 31, 2010.

  • Retained Hires: A $1,000 credit for each qualified new hire who is retained for one year.


Slide47 l.jpg

Available through 2011

Eligibility expanded through 2010

Work Opportunity Tax Credit (WOTC)


Green business tax breaks l.jpg
“Green” Business Tax Breaks

  • Deduction for energy-saving improvements

  • Renewable energy production credits:

    • Solar

    • Biomass

    • Geothermal

    • Wind


Health insurance reform l.jpg
Health Insurance Reform

  • No employer requirement

  • “Pay or Play” rules starting in 2014

  • Tax Credit for premiums in 2010


Section 199 domestic manufacturing deduction l.jpg
Section 199 Domestic Manufacturing Deduction

  • 9% of QPAI in 2010

  • 50% of wages apply


Section 179 expensing 2010 l.jpg
Section 179 Expensing 2010

Expense allowance $250,000

Phaseout threshold $800,000


Slide52 l.jpg

Deduct $25,000 for Heavy SUVs or Trucks


Slide53 l.jpg

Plan Your Asset Purchases Wisely

Make large purchases before 2011


Don t forget about depreciation recapture l.jpg
Don’t forget about depreciation recapture

!


Slide55 l.jpg

$

Cost Segregation Nets $$$


Slide56 l.jpg

Cost Segregation

Shorter Lives = Quicker Write-Offs


Slide57 l.jpg

Capital Gains Tips for Businesses

  • Holding period

  • Character of assets


Slide58 l.jpg

Installment Sales

  • The 15% capital gains rate is good through 2010.

  • Beyond 2010, plan for the increased tax rate when negotiating sales.


Slide59 l.jpg

Tax-Deferred vs. Taxable

Reconsider Tax-Deferral Techniques


Business structure l.jpg
Business Structure

Is it time to switch to a pass-through entity?


Slide61 l.jpg

Take Out Earnings Prior to Making an “S” Election

  • Take advantage of capital gain rates

  • Reduce passive income concerns

  • Reduce C corporation earnings concerns


S corporations l.jpg
S Corporations

  • Permissible number of shareholders is 100.

  • Eligible members of the same family may be treated as a single shareholder.


Slide63 l.jpg

Closely Held Companies

  • Shift appreciation

  • Shift income

  • Pay tax at a reduced rate


Plan for business continuation l.jpg
Plan for Business Continuation

  • Transfer control according to your wishes

  • Minimize your tax liabilities

  • Fund your retirement

  • Preserve wealth for your family


Slide65 l.jpg

The Benefits of Estate Planning

  • Preserve assets

  • Minimize taxes

  • Distribute property


Why plan l.jpg
Why Plan?

  • Your estate may be larger than you think.

  • Changes in tax laws do not eliminate the need for estate planning.

  • Failure to plan your estate may result in legal and financial problems for your heirs.



Carryover basis rules take effect with estate tax repeal l.jpg

WARNING!

Carryover Basis Rules Take Effect with Estate Tax Repeal!


Gifting your way to savings l.jpg
“Gifting” Your Way to Savings

  • You can make tax-free gifts of up to $13,000 per person, per year.

  • Married couples can gift a total of $26,000 per person, per year.

  • You can make unlimited tax-free gifts by setting up direct payments to educational institutions and medical providers.


Gifting advantages l.jpg
Gifting Advantages

  • Post-gift appreciation escapes estate tax.

  • To the extent of the $13,000/$26,000 per donee, per year annual exclusion, no transfer tax is ever imposed.

  • Gift tax paid reduces your taxable estate.

  • Post-gift income is taxed to the recipient.


Beware of the generation skipping transfer tax l.jpg

WARNING!

Beware of the Generation-Skipping Transfer Tax!


Commonly used trusts l.jpg
Commonly Used Trusts

  • Credit Shelter or Bypass Trust

  • Dynasty Trust

  • Irrevocable Life Insurance Trust

  • Charitable Remainder Trust

  • Qualified Terminable Interest Property Trust


Wondering how to pay estate taxes consider life insurance l.jpg
Wondering how to pay estate taxes?ConsiderLife Insurance

?


Plan to save l.jpg
Plan to Save!

We can help you monitor changing tax laws and update your strategies accordingly.


2010 tax planning seminar75 l.jpg

2010 Tax Planning Seminar

Presented by

Your Firm Name


ad