8 Key Planning Issues for 2013
According to Wilton, N.Y.-based planner and author Bill Losey of Bill Losey Retirement Solutions, planners should take the following eight scenarios into consideration.
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1. Consider Prioritizing Tax Reductions
2. High Earners May Want to Watch Their Incomes
Losey points to several issues regarding this second surtax: It would actually be levied on the lesser of two amounts either a clients net investment income or excess modified adjusted gross income above the $200,000/$250,000 levels. Most investment income derived from material participation in a business activity would be exempt from the 3.8% surtax, along with tax-exempt interest income, tax-exempt gains realized from selling a home, retirement plan distributions and income that would already be subject to self-employed Social Security tax.
The bottom line, Losey maintains, is that a bonus, an IRA distribution, or a sizable capital gain may push a clients earned income above these thresholds and it will be wise to consider what impact this could have.
3. Clients Take-Home Pay May Drop in 2013
4. Any 2013 Social Security Cost-of-Living Increase May Be Minor
5. Medical Expense Deductions May Shrink
6. Clients May Find a Better Medicare Advantage Plan for 2013
7. Anyone Without Work May Find a Safety Net Gone
8. Estate and Gift Tax Exemptions May Shrink Significantly
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