1. TAX AND ESTATE PLANNING
Proper attention to tax issues on an
annual basis, in addition to a clearly
drafted and well executed estate
plan (even if only the creation of a
simple will) can have a huge impact
on your quality of life. Don’t let
others make decisions; they may
not satisfy your goals!

2. Medicare Tax of 2013
The Patient Protection and Affordable Care Act
(PPACA) creates a new Medicare tax for 2013 of
3.8% on income exceeding $200K (single) & $250K
(married)
IRA & pension income does apply to $200K &
$250K limits

3. Retirement Planning
Year Maximum Contribution (if under age 50) Maximum Contribution (if over age 50) Contribution Deadline
2012 $5,000 $6,000 4/15/2013
2013 $5,500 $6,500 4/15/2014
Year Maximum Salary Deferral (if under age 50) Maximum Salary Deferral (if over age 50) Contribution Deadline
2012 $17,000 $22,500 12/31/2012
2013 $17,500 $23,000 12/31/2013
Year Maximum Contribution (if under age 50) Maximum Contribution (if over age 50) Contribution Deadline
2012 $50,000 $55,500 4/15/2013 (plus extensions)
2013 $51,000 $56,000 4/15/2014 (plus extensions)
Year Maximum Contribution (if under age 50)
2012 $50,000
2013 $51,000
Year Maximum Contribution (if under age 50) Maximum Contribution (if over age 50) Contribution Deadline
2012 $11,500 $14,000 4/15/2013 (plus extensions)
2013 $12,000 $14,500 4/15/2014 (plus extensions)
Year Annual Gift Tax Exlusion
2012 $13,000
2013 $14,000
Annual Gifting Amounts
4/15/2013 (plus extensions)
Simple IRA Contribution Limits and Deadlines
IRA & Roth IRA Contribution Limits and Deadlines
401(k) & Qualified Plan Contribution Limits and Deadlines
SEP IRA/Profit Sharing/Money Purchase Contribution Limits and Deadlines
Contribution Deadline
4/15/2014 (plus extensions)

4. Personal Income Tax Rates
The income tax rates for most individuals will stay at
10%, 15%, 25%, 28%, 33% and 35%. However, a 39.6% rate will apply
for income above the applicable threshold. The applicable threshold is
$450k for joint filers and surviving spouses, $425k for heads of
household, $400k for single filers, and $225k for married taxpayers
filing separately. These dollar amounts are inflation-adjusted for tax
years after 2013.

5. Capital Gains Tax Rates
The top rate for capital gains and dividends will permanently rise to 20 % (up
from 15%) for taxpayers with incomes exceeding $400k ($450k for married
taxpayers). When taking into account the above mentioned new 3.8%
Medicare surtax on investment-type income and gains for tax years
beginning after 2012 the overall rate for higher income taxpayers may be as
high as 23.8 %.
However, for taxpayers whose ordinary income is taxed at the 15% or lower
rate, capital gains and dividends will permanently be subject to a 0% (ZERO)
rate. Taxpayers who are subject to a 25% or greater rate on ordinary
income, but whose income levels fall below the $400k/$450k
thresholds, will continue to be subject to a 15%rate on capital gains and
qualified dividends. (The combined rate will be 18.8%for those individuals
subject to the new 3.8% Medicare tax.)

6. Dividend Income Taxes
The Act extends capital gains rate treatment for qualified dividends.
Under the Act, qualified dividends will be continue to be taxable at 15%
for most taxpayers, but the rate will increase to 20% for taxpayers with
income above $400k(for single filers) or $450k(for joint filers).
Generally, qualified dividends include dividends received from a domestic
corporation or a qualified foreign corporation on stock held by the
taxpayer for more than 60 days during a specified 121-day period. Note
that dividends may also be subject to the 3.8% Medicare tax, depending
on the individuals income levels.

7. Estate Tax Changes
Estate Tax Exclusion. The Act permanently maintains the $5 million estate tax
exclusion amount. This amount is adjusted for inflation each year, beginning with
2012. For 2013, the inflation-adjusted estate tax exclusion amount is $5.25 million.
This means that a person dying in 2013 can transfer up to $5.25 million ($10.5
million for a married couple) (reduced by lifetime taxable gifts) at death without
paying estate tax.
Gift Tax Exclusion. The Act makes permanent the unification of the gift and estate
tax exclusion amounts. This means that in 2013 each person can make lifetime gifts
up to $5.25 million without paying gift tax. However, all gifts that use a portion of
this gift tax exclusion will reduce the donor's estate tax exclusion available at death.
For example, if a parent makes a $2 million lifetime taxable gift to a child, the
parent's remaining estate tax exclusion amount is reduced by $2 million at death.
The lifetime gift tax exclusion only applies to gifts in excess of the annual gift
exclusion (i.e., the annual amount a person may gift to any person tax-free). For
2013, the annual gift exclusion is $14,000 per person (or $28,000 per married
couple).

8. Estate Tax Changes
GST(Generation Skipping Tax) Exclusion. The Act makes permanent the unification of
the estate tax and GST exclusion amounts. This means that in 2013 each person can
make transfers to grandchildren (or multi-generational trusts) of up to $5.25 million
without paying a GST tax.
Maximum Estate, GST, and Gift Tax Rates. The Act permanently caps the maximum
estate, gift, and GST tax rates at 40 percent. This is a five percent increase from the
maximum rate in 2012, but 15 percent less than what the maximum rate would have
been if the Act had not been enacted.

9. MORE QUESTIONS? CALL
TODAY TO SCHEDULE YOUR
FINANCIAL ROADMAP
DISCUSSION
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