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TIMONIUM, MD • COLUMBIA, MD • BEL AIR, MD
Steven A. Gershman, CPA, PFS, CFELori L. Kirk, CPA
James F. Eaton, CPA, MBA
1. Bonuses / Timinga. Income deferralb. “Catch-up” withholding @ year-end
2. 401(k) / 403(b)a. Limitsb. Strategies – Regular vs. Roth
1. Timing – Cash basisa. Accelerate expenseb. Defer income
2. Depreciationa. Section 179b. Tangible personal property regulations
1. Required minimum distributions (RMD’s)
a. 70 ½ years of age
b. First year deferral
c. Roth considerations
1. Passive activity treatment – Default
2. Do you manage property? – Real Estate Professionals
3. Vacation rentals
Maximum limits 2014/2015
Single $3,300/$3,350
Married $6,550/$6,650
Over 55, extra $1,000
Qualified distributions
All gains are taxable
Losses allowed are limited to gains
Documentation
Amounts of gains/losses
Calendar of “events”
Document source of funds
1. .9% Additional Medicare tax
2. 3.8% Net Investment Income Tax (NIIT)
3. ACA “Shared Responsibility” payments
LIFETIME EXEMPTION 2014 - $5,340,000 2015 - $5,420,000
GIFT TAX ANNUAL EXCLUSION $14,000 Will remain the same in 2015
NEED TO FILE A FEDERAL ESTATE TAX TO MAKE THE ELECTION TO CARRYOVER THE DECEASED SPOUSE’S UNUSED EXEMPTION AMOUNT
The Maryland estate tax exemption will remain $1 million for decedents dying in 2014; thereafter, it will increase as follows:$1,500,000 for a decedent dying in 2015;$2,000,000 for a decedent dying in 2016;$3,000,000 for a decedent dying in 2017;$4,000,000 for a decedent dying in 2018;
and For a decedent dying in 2019, the Maryland
exemption will be equal to the federal exemption amount ($5,000,000, indexed for inflation from 2011).
Once the phase-in period is complete, Maryland’s estate tax will have effectively incorporated “portability,” a rule allowing a married person to give any unused estate tax exemption at death to his or her spouse.
Must file a return to elect portability
Further, a bill has been introduced in the Maryland Senate to make portability available immediately; if passed, that bill would be applicable to decedents dying after December 31, 2013.
Maryland’s top estate tax rate of 16% remains unchanged.
Additionally, the new law does not affect Maryland’s inheritance tax.
REMEDIES MAY BE AVAILABLE TO FIX PROBLEMS EVEN AFTER DEATH THROUGH: REFORMATION
MODIFICATION
DIVISION
DECANTING
DISCLAIMERS
Review your estate planning documents and update if necessary
Review titling on accounts
Review beneficiary designations
Review gifting strategies
Who gets what? – Fair vs. Equal Satisfy the Cash flow Needs of the Owner Satisfy the Owner’s desire for
Control Who is entitled to equity in
the business? Who is entitled to Employment
in the business? Should the Company be Retained or Sold?
Steve Gershman, CPA, PFS, CFE410.290.3288
James Eaton, CPA, MBA410.307.2248
Lori Kirk, CPA410.307.6416