2010 Retirement Guide

8/9/2019 2010 Retirement Guide

1/15

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031 www.entrustfreedom.com

Entrust FrEEdom, L.L.C.

2010 rEtirEmEnt GuidE
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2/15


2

2010 rEtirEmEnt GuidE

thE nEwAGEoF rEtirEmEnt PLAnninG

Retirement Planning Will we haveenough? That is the big question. Will youhave enough to live a liestyle that you eelcomortable with? Less than hal o workingAmericans have even begun to save or theirretirement, and most believe they will live18 years ater they retire. Retirement is nothard, but saving or retirement is.

That is why we have assembled thisretirement guide or 2010. The rules orretirement are changing. We have askedexperts in various elds o nance tocontribute their expertise and compiledthe best o these to help you get started orevaluate your current progress and adjust totodays nancial climate. You will read aboutspecic strategies involving setting goals,using real estate in your plan, alternatives to

traditional retirement accounts and more.

The earlier you begin to plan or retirement,the more choices you have and the greateryour chances are or success. Retirementplanning is much like planning a vacation.Any trip begins with determining your

destination, or goal, and a timetable ortaking each step toward that goal.

Retirement is one o the most signicant lieevents many o us will ever experience. Fromboth a personal and nancial perspective,realizing a comortable retirement is an

incredibly ar-reaching process that takeswise planning and continued determination.Even when goals are reached, managing yourretirement is an ongoing process that mustnot be neglected.

Please eel ree to call Entrust Freedomor any o the other authors that havecontributed to this guide.

We wish you all the best and hope thisguide proves helpful as you pursue yourretirement goals.

Dave Owens

Dave Owens, CPA, CES isthe managing member oEntrust Freedom, LLC andcan be contacted at [email protected] or practicingtax accountant or over 20 years.

1

1. Welcome Letter Dave Owens

2. Retirement Contribution Limits Daniel Fisher

3. Rebuilding Nest-Egg Brian OConnell

5. Enhanced Life Estate Edward Hale6. Mortgage Planning - David A. Wright

7. Diversify Retirement Investments Dave Owens

8. Saving Money With 1031 Theresa Knower

9. The Total Control IRA Brandon Hall

10. Goal Setting is S.M.A.R.T. Business Heather Christie

11. Save On Your Taxes in 2009 Randy Wright

12. Roth 2010 Is At Hand Dave Owens
http://www.entrustfreedom.com/http://www.entrustfreedom.com/


3/15


2010 rEtirEmEnt Contribution Limits AnnounCEd

2

By Daniel Fisher

Now is the time to meet with your CPA, Financial Ad-

visor or Planner to discuss your current IRA contribu-

tions and your IRA contributions or the coming year.

You need to be sure that you have not contributed in

excess o the contribution limits or 2009 and that you

are eectively planned or 2010. The majority o IRA

contribution limits or 2010 have remained unchanged.

However contribution limits or Health Savings Ac-

counts have been slightly increased or 2010. The ol-

lowing tables show the limits or 2009/2010:

Traditional IRA Contribution

Limits and Roth IRAContribution Limits

2009/2010

Up to age 50 $5,000

Catch Up ContributionsProvision Age 50+

$6,000

SEP IRA Contribution Limits 2009/2010

SEP IRA Contribution Limits $49,000*

SIMPLE IRA Contribution Limits

SIMPLE 401(k) Contribution Limits

2009/2010

Up to age 50 $11,500*

Catch Up Contributions ProvisionAge 50+

$14,000*

Health Savings Ac-counts

2009 2010

Defnition o High Deductible Health Plans -Deductibles/Out o Pocket Limits

Single Coverage -Minimum/Maximum

$1,200/$5,950

Family Coverage -Minimum/Maximum

Health Savings Account Contribution Limits

Single Coverage $3,000 $3,050

Family Coverage $5,950 $6,150

Proft Sharing/401(k)Contribution Limits

Roth 401(k) Contribu-tion Limits

2009/2010

Up to age 50 $49,000

Catch Up ProvisionAge 50

$54,500

Daniel FisherNew Account Specialist

Entrust Freedom

4560 Via Royale #1

Fort Myers, FL33901

239-333-1031 ext.

[email protected]

Get Social with

entruSt FreedomJoin uS on

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4/15


The nancial-market crisis that transpired and

eventually waned during the past year has let investors

wondering whether they are still on track regarding

their plans or retirement. The unortunate truth is

that most investors suered some orm o nancial

setback during the past year, causing the need to adjust

their retirement orecasting. Worse yet, many investors

who had chosen to manage their retirement assets

on their own (instead o through a nancial advisoryrelationship) ound themselves in a state o shock

ater watching a signicant portion o their retirement

savings disappear over the six month period between

October o 2008 and March o 2009.

Not surprisingly, investors with shorter investment time

horizons (particularly those who are already retired or

are nearing retirement) are likely to have been most-

aected by the recent nancial market turmoil, while

younger investors with longer investment time horizons

may not even need to alter their plans or retirement.

Based on this premise, the commentary below isintended to provide some direction to the three general

age/career groups which comprise the majority o the

investment community.

Assuming that you already use a nancial advisor

or your retirement planning, the topics below can be

used to initiate a discussion regarding whether you are

on track to meet your goals with respect to your

retirement unding. I you determine that there is a

shortall in your retirement unding, your advisor should

be able to provide some guidance on how to right the

ship.

Investors Over the Age of 55 (presently retiredor nearing retirement)

Although this might be dicult or some investors to

stomach, retirement planning assumptions should be

adjusted to refect current investment values rather

than investment values at the market highs in 2007.

Although it was only a short time ago, we are currently

in a much dierent economic and nancial market

environment. By working with your nancial advisor,

you will be able to determine whether you might need to

spend less, save more, or put o retirement or several

years in order to recoup the value o the portolio

declines experienced between October o 2008 and

March o 2009.

Avoid the temptation o repositioning your portolio in

an overly-aggressive manner (in an attempt to recoup

recent losses) or in an overly-conservative manner (in

an attempt to avoid any uture losses). Aggressive

positioning will likely result in a more volatile portolio,

possibly compounding investment losses; while an

overly-conservative approach, or instance moving

completely into money market assets, is not likely to

keep up with long term infation.

Discuss with your nancial advisor, the amount o

annual income you might expect to need to withdraw

rom your investment portolio during retirement,in order to help determine the most appropriate

investment strategy or your particular needs-one that

is tailored to providing or your annual income during

retirement without taking on undue investment risk.

Investors Between the Ages of 40 -55(maximum earning potential)

As you make the transition rom early-career into

a seasoned-proessional, you are likely benet rom

signicant increases in annual income. Consider using

additional income to max out annual contributionsin company sponsored retirement plans (i.e. 401(k))

on a pre-tax basis. Discuss with your nancial advisor

ways to maximize the long term growth o any other

discretionary retirement savings, possibly on a tax-

advantaged basis through a Roth IRA or tax-deerred

annuity.

PErsPECtivEonrEbuiLdinGyourrEtirEmEntnEst-EGG

Did the Financial Market Train-Wreck of 2008

Derail Your Retirement Plan?

3


5/15


By continuing to make regular contributions into your

retirement savings during a down market period, you

have eectively purchased a larger quantity o mutual

und shares or the same cost in dollars. As the stock

market resumes its long term upward trajectory, yourportolio will benet as a larger number o shares

should magniy the growth o your investment base.

Consult with your nancial advisor to conrm that

your strategic long term asset allocation is consistent

with your appetite and capacity to take on investment

risk. As your portolio gains critical mass, you should

consider transitioning rom the more aggressive

positioning o your portolio to a more balanced

investment strategy. Your investment horizon (time

until you need to use retirement reserves to meet

expenses) is now somewhat shorter than it was than

when you were just beginning your career.

Investors Under the Age of 40 (early career)

You have the longest investment horizon o any o the

age-groups listed in this article. Begin making invest-

ments on a regular basis (this can be done through on-

going payroll deduction). This will provide you with the

best advantage o allowing your investments to work

or you through the power o compounding returns

over a period o 30-40 years prior to retirement.

Recognize that there are dierent asset classes (stocks,

bonds, etc.) in which you can invest. Mutual unds

are considered to be excellent investment vehicles or

new investors, rom the standpoint that they generally

provide instant diversication via a pooled investment

und consisting o a wide array o portolio holdings,

and managed in a specied ashion (i.e. large company

U.S. stocks).

Generally speaking, stocks are known or having

a higher risk prole than bonds or cash, which is

also why they oer higher rates o return. As a

result, consider investing a signicant portion o

your retirement reserves in stock mutual unds (orindividual stocks).

For investors who do not presently have a nancial

advisor and would appreciate some additional

guidance, you may want to consider contacting a

ee-based Registered Investment Advisor (advisors

who have obtained the Certied Financial Planner

Proessional designation are ideal candidates). Unlike

many insurance and broker-dealer relationships which

generally compensate an advisor through a product-related sales commission, ee-based investment

advisors are generally compensated or their time on

either an asset-based or hourly-based ee structure.

Please eel welcome to contact Marquis Wealth

Management Group toll-ree at 877-454-1117

with any questions or comments regarding the

topics outlined within this article. Marquis Wealth

Management Group is an independent Registered

Investment Advisor based in Ft. Myers, Florida.

Brian P. OConnell, RFC

Financial Advisor

4

entruSt Freedom haS

Some Great claSSeS

planed For 2010.

Check out the completewebinar schedule on the front

of our website.


6/15


EnhAnCEd LiFE EstAtE dEEds

By Ned Hale, Esq.

An enhanced lie estate deed is a great,inexpensive, easy way to avoid probate or a realestate asset while maintaining almost all o the

benets o standard ee simple ownership.

So oten a decedents only asset o any real valueis their home. But unortunately, usually that assetmust go through sometimes lengthy and alwaysexpensive probate proceedings. That is because bythe time a decedent dies, it is too late or him orher to plan his or her estate. The estate is whatit is at death. The heirs are let to do the work andpay the attorneys to probate the estate.

Fortunately, the living can still plan their estate.Where ones main asset is their home, I oten

recommend that they execute an enhanced lieestate deed.

What is it? It is a simple warranty deed wherebythe owner states in the deed that he or she is theowner o the property or the span o his or herlie. During his or her lie, the deed states thathe or she maintains control o the property. Thedeed states that he or she can sell the property(at air market value) or mortgage the propertyand keep all o the proceeds generated thereby. Italso states that he or she can improve the property

or even let it all into disrepair. He or she can doall o this with needing anyone elses signature.And i the property is homesteaded, there isno eect on the homestead tax exemption andFlorida constitutional homestead protection romcreditors. And only nominal documentary stamps(all o seventy cents) are due when he or she signsthe enhanced lie estate deed, since there is nochange in the benecial ownership o the property.

The deed goes on to state that upon the ownersdeath (and only then), the property automatically

goes to whomever is named in the deed. Thosenamed parties are called remaindermen. (Theremainermen are usually the decedents children).The remaindermen would just record the deceasedowners death certicate in the public records.Then the property is theirs. No probate necessaryor that asset. Fully insurable by a title company

(or better yet, ully insurable by my law rm)Thats it. No expensive and lengthy probate.

The only minor drawback o an enhanced lieestate deed is that i the owner does want to sell

the property during his or her lie, then it must beat air market value or consideration. In otherwords, the owner cannot simply disinherit one ormore o the remaindermen by signing new deedback to himsel or hersel, or by signing a newenhanced lie estate deed, but leaving out the childthat they wish to disinherit. I consider that to bea very minor drawback, because again, the ownercan still sell the property at air market valueduring his or her lie, or mortgage it to the hilt(including by a reverse mortgage), and keep all othe money generated thereby.

Edward W. (Ned) HaleAttorney at LawHale Law Group, P.A.

5

are you an attorney,cpa/accountant, or

Financial planner?

Join the Entrust Advisors to gainmore exposure to clients that areinterested in self-directed IRAs

and need your service!

Contact us to discuss getting started:

239-333-1031.For more information on the

Entrust Advisors Program,

visit www.entrustfreedom.com


7/15


6

By David A. Wright

Many peoples retirement strategy includes a paid-

or home. No mortgage and no mortgage payments

help diminish cash outfows or housing and allow

each months dollar to be allotted or some othertask. A solid notion and certainly not one a mortgage

lender would take issue with, but there is an alternate

strategy that may merit consideration, especially at this

moment. I will expound.

For the past 11 months our Federal government has

attempted to stimulate our nations housing market

through a concerted policy o support or the mortgage

industry. The Federal Reserve allotted $1.4 trillion

dollars to purchase mortgage backed securities, and

their participation in the market has resulted in 30

year xed rate loans priced as low as 4.750% andseldom higher than 5.125%. Our intention here is

not to discuss the wisdom or mechanics o this policy

action but simply to note that, wow, money is cheap.

As one considers his or her retirement strategy,

a question worth asking is, Can I protably put

$417,000 leveraged dollars to work or my retirement

i the cost o unds is a pre-tax 5.000% or so? I one

answers yes, perhaps mortgage loan secured by ones

home becomes part o the conversation regarding ones

retirement planning.Clearly the advice o an experienced nancial planner

would be invaluable in this discussion because as

the conversation unolds, questions o anticipated

returns, risk tolerance, income tax strategies and

lie style would be o paramount importance. And

to be sure, I am not advocating borrowing to und

retirement. However, it seems to me that there may be

circumstances when inormed planning takes

advantage o Washingtons largess or the benet o a

retired borrower.

David A. Wright

Sanibel Captiva Bank

Library Way

Sanibel, Florida 33957

do mortGAGEs PLAyAroLEin rEtirEmEnt PLAnninG?

real eState in your ira?

Broaden your investment horizons put some real estate in your

IRA. Entrust has a free guide to purchasing real estate in your

IRA account. Email [email protected]

to get your copy today.


8/15


7

By Dave Owens, CPA, CES

There are two acts that have converged to make some

exciting news or your retirement planning. First,

todays interesting real estate market is making or

some great opportunities. Second, with the power oIndividual Retirement Accounts (IRAs), all gains inside

an IRA account are tax ree. These two points come

together given the quiet act that you can own real

estate in your IRA.

Why Real Estate IRAs? All the proceeds rom the sale

o a piece o real estate in an IRA can be reinvested in

to your next property without giving that large percent-

age to the government as ederal and state taxes. This

will allow you to have more principal or you to grow

or your retirement. I you are a successul real estate

investor this could be your opportunity. Real estate ina IRA can be a powerul investment tool. You can buy

real estate as easily as you can mutual unds with the

money in your IRA! What a time to buy at historically

low prices and reap the benets tax ree in the uture.

It is important or all investors to note that every deal

or piece o property is unique, and it is important that

you have adequate inormation and representation. The

author advises all investors to properly consult tax or

legal counsel when making an investment. Also, proper

planning can go a long way toward a successul trans-

action. Sel-direction means reedom o choice, but

it also means the responsibility is yours to be sure the

real estate you are investing in is the right t or you.

Over time, real estate investments have opened up a

world o appreciation and income to many investors.

The purchase o real estate through a sel-directed re-

tirement plan is a popular investor choice or this and

other reasons.

A sel-directed IRA or real estate IRA gives you the

reedom to invest in many dierent types o real estateincluding:

single-amily and multi-unit homes

apartment buildings

co-ops

condominiums

improved or unimproved land

Commercial property,

Foreclosures and more

Please note: investing in real estate takes hard work.

There are also nuances (prohibited transaction and dis-

qualied persons) involved exclusively with real estate

IRAs that require you to stay on top o the investment

and ollow all rules. Please be sure to consult your

nancial advisor or real estate advisor beore starting

any transaction.

Dave Owens, Managing Member

4560 Via Royale #1

Fort Myers, FL33901

239-333-1031 ext. 203

[email protected]

divErsiFyyourrEtirEmEnt invEstmEntswithArEALEstAtE irA

1031 Exchanges are

making a comeback!

Learn what you need to know byrequesting our free 1031 hand-

book or by visiting our website:

www.entrustfreedom.com

call today to requeSt

your Free real eState

ira handbook,

written by

dave owenS!

239-333-1031

EntrustFreedomGuideTo

RealEstateIRAswww.EntrustFreedom.com


9/15


8

By Theresa Knower, CES

Despite the current market conditions, there is a

glimmer o hope as we ease our way into 2010.

What is that glimmer o hope, you ask? Well, it has

something to do with a long lost riend known as the1031 exchange. There has been a serious infux o

calls rom people wanting to know more about this real

estate based tax-saving strategy. More importantly,

these people not only want the inormation, they

actually want to do one! How is this relevant to the

rest o us? First let me walk you through the exchange

process, what is involved, and how this might help you.

1031 is a section o the tax code that enables an

investor to sell a piece o investment real estate and

deer the capitals gains taxes, depreciation recapture

taxes and applicable state taxes as long as theypurchase another piece o investment real estate o

equal or greater value within the allotted time rame.

Here is an example. A recent client sold some o his

armland in Ohio or approximately $200,000. He

reinvested those unds into several smaller xer-uppers

here in Southwest Florida. He purchased property that

was equal to or greater than $200,000.00, and thus

paid no taxes. He couldnt be happier over the act

that he was able to purchase several properties at such

great prices. He has since xed each house up and has

tenants in each o them. He was able to sell vacant

land and exchange it or income producing propertywithout paying taxes.

Now lets get back to why this is a good sign. I more

people are doing exchanges, this means that they

actually have some gain in their property that they

want to shelter. I there is gain to shelter, this is an

indication that things are turning around or the better.

Call me an optimist, but I see this as a very good sign.

For many o you out there, 1031 exchanges have been

pushed to the back o your mind. Its time to brush up

on your 1031 know-how because they are making a

comeback. The basic rules still apply. For those o youwho need a reresher, here are the ve basic rules:

Property sold and property purchased must be

investment/business use property. You cannot exchange

your primary home or second home.

In order to deer all o the capital gains (as well as

any other applicable taxes), you must purchase a

property that is o equal or greater value to the

property you are selling.

You must use a Qualied Intermediary to acilitate theexchange. It must be an independent third party, and

thus cannot be you CPA, Attorney, Realtor, etc.

You have a total o 180 days to complete your

exchange. This means that you must close on all

intended purchase within 180 days o closing on

your sale.

You must identiy up to 3 possible replacement

properties within 45 days o closing on your sale.

So while times have changed, the rules o exchanging

are still the same. Knowing about 1031 exchanges canprove to be a valuable tax-saving opportunity or you

or someone you know.

Theresa Knower

4560 Via Royale #1

Fort Myers, FL33901

239-333-1031 ext.

[email protected]

sAvinG monEyon tAxEsisAs EAsyAs tEn thirtyonE

an entruSt

SelF-directed ira

haS a Good deal

oF Gold.

Did you know your self-directed IRA

can purchase gold?This has become a growing trend

among clients. For more information,

please visit www.entrustgoldira.com


10/15


9

By Brandon Hall, CISP

Ever since IRAs were established in 1975, Wall Street

has convinced investors that stocks, bonds, and mutual

unds are the best and only way to create long term

wealth. You could choose or sel-direct your IRA in-vestments, as long as you chose what they were selling.

But what about other choices to build wealth? What

about buying raw land, rental property, lending money,

or starting new business ventures? Since these assets

are not traded on the major stock exchanges, there is

little incentive or commission-based sales people and

their brokerage houses to publicize their availability.

Knowledgeable, high net-worth individuals have known

about broader choices in their IRAs or years. Due to

the internet and educational outreach o sel-directed

IRA administrators such as Entrust Freedom, thegeneral public is beginning to awaken to the power o

choice as well.

Many people hear the term sel-directed IRA and

think that it is a special type o IRA. However, in real-

ity, the IRS doesnt recognize a sel-directed IRA as

a type o IRA.

Any IRA, whether it be a Traditional, Roth, SEP or

SIMPLE IRA can be Sel-directed. The key to TRUE

sel-direction is the administrator. I you want to invest

in real estate, or example, you dont need a special

IRA. You need a special administrator. For over 28years, Entrust Group has been providing sel-directed

IRA administration without the limitations o the typi-

cal brokerage houses.

There are a ew regulations and limitations that the

IRS places on IRA accounts. Your IRA is not allowed

to invest in Lie Insurance or Collectibles. Also, your

IRA cannot invest in anything that provides a benet to

you or your linear descendents. For example, the IRS

would prohibit an IRA purchasing a vacation home

that the IRA owner wants personal use o. A rental

home could be purchased by an IRA, but the tenantmust be unrelated to the IRA owner. Also, the rental

income would need to be paid to the IRA, not the

IRA owner.

There are a lot o savvy investors that come up with

creative ways to use their IRA. At Entrust Freedom,

we are more than happy to discuss these options with

you. While we cannot give direct nancial advice, we

can discuss available options and provide importantinormation in regards to IRS regulations.

For instance, did you know that an IRA can partner up

with other IRAs or even non-IRA money to purchase

an asset that is more than the IRA can aord alone?

Did you know an IRA can borrow money through a

non-recourse loan? Feel ree to take advantage o

the knowledge that the proessionals at Entrust can

provide. We are always available to answer any ques-

tions you may have and eager to help you on the road

to sel-direction.

Brandon Hall, CISP

Director of Operations

Entrust Freedom

4560 Via Royale #1

Fort Myers, FL33901

239-333-1031 ext. 211

[email protected]

thE totALControLirA

how healthy iS

your retirement

portFolio?

Call Entrust Freedom today to

learn how a self-directed IRA may

be just what the doctor ordered to

help you reach your

retirement goals.

239-333-1031 or

www.entrustfreedom.com


11/15


10

By Heather Christie, Action Coach

Goal setting is as important in personal lie as it is in

business. The common denominator in all the sel-help

literature and books is the importance o goal setting.

Were told to set long-term goals, short-term goals,lietime goals and personal goals.

The benets o Specic, Measurable, Achievable,

Results orientated, Time-ramed (S.M.A.R.T) goals

have been written about in sel-help books or years.

So, it ollows that goal setting is obviously a powerul

process. It is about laying a oundation one brick at

a time and turning vision into achievable, actionable

things. Its the common denominator o successul

individuals and businesses.

Despite their obvious value, our experience with goals

has shown that while some people are good at settinggoals and achieving great results, others cant keep a

New Years resolution to stop smoking or two days

in a row. Failure to set goals can be seen as a ear

o ailure. That is, the blow to our integrity when we

dont reach our goals prohibits us rom setting them

in the rst place. When we dont achieve our goals,

we lose condence in our ability to make and keep

commitments and to trust ourselves. However, when

we make and keep commitments, such as setting and

achieving goals, it refects the amount o trust we have

in ourselves. We increase our condence in ourselves to

make and keep commitments to others and ourselves.

There are many reasons why we dont achieve our

goals. Sometimes the goals we set are unrealistic. New

Years resolutions are typical examples. Suddenly, we

expect to change the way we eat or the way we exercise

just because the calendar changes. Its like expecting

a child thats never ridden a bike to suddenly jump

on and go or to run a marathon without months o

training. These goals are based on illusion with little

regard to natural growth. You must be able to crawl

beore you walk.

So, how do we set and achieve goals? Stephen R. Covey

says it best in his book 7 Habits o Highly Eective

People. To begin with the end in mind means to start

with a clear understanding o your destination. It

means to know where youre going so that you better

understand where you are now so that the steps you

take are always in the right direction.

An example o a S.M.A.R.T. goal might look something

like the ollowing:

WHAT

My goal is to maintain a healthy body.

WHY

So that:

I can be t to do the things I enjoy.

I can be an example to my children in health

management.

I can build my personal character strength.

HOW

Good Nutrition. I will increase my intake o reshruits and vegetables and decrease my intake o sugar,

ats, salt and red meat.

Physical. I will exercise aerobically 3 times a week or

30-minute periods.

Focus. I will be aware o my body and look out or any

health problems.

By concentrating on the smaller, short-term steps and

achieving success at those, you will gain condence to

set other goals. So, remember, set your goals based on

the S.M.A.R.T. principle to have the best chance o

achieving your goals.

I you would like learn more about how you can set and

achieve the goals within your business, call your local

Action coach Heather Christie at 239-220-5900. For

more inormation on ActionCOACH, you may visit our

website at www.ActionCoachFLA.com.

Business Coach Heather Christie

Professional Business Advisor/Attorney

ActionCOACH & Phoenix Law12800 University Drive, Suite 240

Fort Myers, FL 33907

Direct: 239-322-1481 or

Cell: 239-357-4052

Fax: 239-220-5901

GoALsEttinGis s.m.A.r.t. businEss


12/15


By Randy Wright, CPA

While many changes have recently been enacted and moreare sure to come, there are still some things you can doto save on your taxes in 2009. The ollowing is a list o

tax planning opportunities, some tried and true tips andsome new ideas to help minimize how much you pay intaxes this year. Please eel ree to call me with specicquestions about your situation.

For Individuals:

Deduct state and local sales and use taxes instead ostate and local income taxes.

Take a standard or itemized deduction or state salestax and excise tax on the purchase o vehicles.

Utilize the above-the-line deduction or qualiedhigher education expenses.

Take advantage o tax-ree distributions or those age70 1/2 or older rom IRAs or charitable purposes.

Use the $8,000 rst-time homebuyer credit, iqualied.

Increase the amount you set aside or your healthfexible spending account.

Realize losses on stock while preserving yourinvestment position.

Postpone income until 2010 and acceleratedeductions into 2009.

Consider converting traditional-IRA money into aRoth IRA.

Consider using a credit card to prepay expenses thatcan generate deductions this year.

Accelerate big ticket purchases into 2009 or salestax deduction.

Make energy saving improvements to your residenceto qualiy or tax credits.

Save git and estate taxes by making gits shelteredby the annual git tax exclusion.

I you receive Social Security benets, you can takesteps to reduce tax on your benets.

Donate appreciated stock.

Boost your margin interest deduction by taking short-term gains.

For Businesses:

I you own an interest in a Partnership or S-Corp youmay need to increase your basis in the entity so youcan deduct a loss rom it or this year.

Make expenditures that qualiy or the businessproperty expensing option.

Make expenditures that qualiy or 50% bonus rstyear depreciation i bought and placed in service thisyear.

Deer a debt-cancellation event until 2010.

Worker, Homeownership & Business Assistance Act

For Individuals:

The rst-time homebuyer tax credit [FTHTC] has been

extended until April 30, 2010 and, with a valid contract,closing may occur as late as June 30, 2010.

The FTHTC cant be claimed unless a taxpayer is 18or his/her spouse meets that requirement.

The FTHTC cant be claimed by a taxpayer i (s)hecan be claimed as a dependent by another taxpayeror the tax year o purchase.

A new FTHTC credit o $6,500 or prior homeownersi youve maintained the same home or veconsecutive years out o the last eight beore buyingthe new residence.

For Businesses:

The expanded period or the carry-back o NetOperating Losses [NOL] has been extended.

The NOL can be used to oset up to 50% o thetaxable income or the th tax year preceding theloss, and 100% o taxable income in the remainingourcarry-back years.

It allows the opportunity to revoke a previous waivero the carry-back period. The taxpayer has until theextended due date o its last tax year beginning in

2009 to make the election.

Randy Wright, CPAMarham Norton Mosteller WrightFort Myers, FL239-433-5554

thErE ArE stiLLoPPortunitiEsto sAvEonyourtAxEsin 2009

11


13/15


12

Major changes are coming to retirement accounts

in January, 2010. I you are not amiliar with ROTH

IRAs, read on. Roth IRAs are one o the most unique

and popular retirement planning tools. Roths have a

great eature that not only allows retirement earnings

to grow tax ree but when the unds are withdrawn, the

distributions are tax ree! With a traditional IRA, the

distributions are usually 100% taxable. The down side

o a Roth is that money going in to the account goes in

post tax, which means you do not get a tax deduction on

the contributions. But beauty o the Roth is that i you

grow the account, all withdrawals will be tax ree to the

beneciary.

Many taxpayers are currently locked out o ROTH IRAs

and not allowed to have one. I you have adjusted gross

income o greater than $100,000, you cannot convert

your Roth IRA to a Traditional IRA. Eective January1st, the law will allow everyone, no matter what your

income is, to convert to a Roth IRA and start making

contribution. Please note i you do not have an earned

income you cannot put contributions in a ROTH. Please

consult your tax advisor or the details o this particular

case. In January, 2010, you will be allowed to convert

your Traditional IRA to a Roth no matter what your

annual adjusted gross income is.

The benet o converting lies in the act that

distributions rom a Roth are tax ree versus taxable

in a Traditional IRA. Below are some examples owhen a conversion would be avorable.

Asset value o retirement assets appreciates rom

time o conversion

Increasing income tax rates

Ability to pay the income tax on the conversion rom

assets outside o the Roth IRA, and no uture need

or the Roth IRA

No need to ever withdrawal rom the Roth IRA

Ability to pay the income tax on the conversion rom

assets outside o the Roth IRA, and no uture need

or the Roth IRA

Passing wealth to amily

Longer lie expectancy o the participant ater

conversion

Roths have many benets that Traditional IRAs

do not have. These benets include the opportunity

to make contributions ater age 70 , something

you cannot do with a Traditional IRA. Also, a

Roth IRA is not subject to Required Minimum

Distributions (RMDs) so money can be let in the

IRA to appreciate. And nally, a Roth may be let

to a beneciary tax ree. This can be a huge estate

planning tool or many retirees.

I you are considering making a conversion, there are

several actors that must be considered.

Value o the asset being converted Based on current

market condition, it might be an excellent time to do a

conversion. When you do a conversion to a Roth, you do

have to pay regular tax based on the current value. I you

own a piece o land in your IRA, now maybe the time to

do the Roth conversion because most values are downand this will minimize the taxes due. I you own gold, you

might want to hold o because gold prices are at an all

time high. As noted above, you will have to pay income tax

on the converted amount but you are not subject to IRA

early distribution penalties o 10%.

(*When you convert a traditional IRA to a Roth, the

conversion is taxed at the current Fair Market Value. What

is air market value?- IRS Denition o FMV - The air

market value is the price at which the property would change

hands between a willing buyer and a willing seller, neither

being under any compulsion to buy or sell and both having

reasonable knowledge o relevant acts. )

Do you have the money to pay the tax on the conversion?

Typically you do not want to use IRA conversion money to

pay the tax. It is best to use personal unds so that all tax

sheltered retirement money can continue to grow tax ree.

What will your income be in the year o conversion? I

you know that your income will be down in 2010 that

might be a better year to convert versus uture years when

the income is greater. When you do a conversion you are

still taxed but try to do a conversion when you are in a

lower tax bracket.

Finally any Roth Conversion in 2010 will let you deer the

tax payment or two years. This is a special one-time tax

law change. So i you do a conversion in 2010, you will

report no income in 2010, hal the conversion amount as

income in 2011 and the other hal in 2012. That means

the nal tax payment could be delayed until

April o 2013.

roth 2010 isAt hAnd


14/15


Let me give you an example o the tax consequences with

a Roth IRA with the new tax law:

Bill decides to do a Roth Conversion. He has a lot in an

IRA worth $25,000 on 1/1/2010

The lot is appraised on 1/1/2010 Traditional IRA is

converted to a Roth

2010 No income is picked up

2011 - $12,500 in income is picked up, tax paid in 2012

2012 - $12,500 in income is picked up, tax paid in 2013

Roth IRAs and the upcoming law change can be a boom

or taxpayers. Rarely does Congress make opportunities

like Roth IRAs available to all taxpayers. It is worth

evaluating Roth 2010 to see i it can benet you. Pleaseconsult your tax advisor beore doing a Roth Conversion.

Everyone has a unique tax situation so please take the

time to learn the law and understand these changes.

Dave Owens, Managing Member

4560 Via Royale #1

Fort Myers, FL33901239-333-1031 ext. 203

239-466-5496 Fax

[email protected]

Dave Owens, CPA, CES, is the managing member o

Entrust Freedom, LLC. I you have any questions about

this article and would like more inormation please eel

ree to contact the author. Dave can be contacted at

[email protected] or 239-333-1031.

Dave has been a practicing tax accountant or

over 20 years.

13

38%Retirees who have a formalwritten plan for retirement

40%People aged 55 or older thathave less than $100, 000 in

their retirement account.

1/2Represents the fraction ofemployees that cash out

their 401K when leaving

their job instead of rolling the

funds to an IRA to avoid tax

implications.

2 5Employees who say that

they are willing to cut backtheir spending to save for

retirement.

64%Employees that do not expect

their standard of living todecline upon retirement.

16%amount of income that social

security will replace for acouple making between $50K

$100K. That is, if social

security is still around when

its time to retire.

retirement StatiSticS - dec., 2009


15/15


whotoCALL?

ContACt PAGE Entrust FrEEdom, LLC

Dave Owens, CPA, CES, Managing Member

Call for 1031 or Self Directed IRA information

Phone 239-333-1031 x203 or Email [email protected]

Brandon Hall, MBA, CISP

Self Directed IRA questions and technical issues

Phone 239-333-1031 x211 or email at [email protected]

Theresa Knower, CES, Chie Operating Ocer

1031 Exchanges and all real estate closings


Austin Hardy, MBA. Director o Marketing and Business Development

Self Directed IRA questions


Doug Robertson

Self Directed IRA purchase and sale transactions


Aaron Prida, MBA

North Florida RepresentativeSelf Directed IRA questions/new accounts

Phone 352-378-7833 or email at [email protected]

Daniel Fisher

Self Directed IRA questions and new accounts


Tricia Enke

Accounting and Bill Paying


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2010 Retirement Guide

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