Planning for 2014: A Year of Change! Presented by: Advisor Name of Firm

Tonight’s Agenda  Historical Facts  Overview of Critical Tax Law Changes  Other Key Areas to Watch in 2014  Strategies to Consider  Questions & Answers 2 All examples provided are hypothetical and meant for illustrative purposes only. State income tax laws can be different from Federal income tax laws depending on your state. Be sure to take this into account before making any decisions. Individual situations will vary so please consult a tax advisor to address your specific situation.

Five Key Areas of Financial Planning 3 Protection Retirement Plan Retirement Plan Investments Investments Tax Planning Tax Planning Estate Planning Estate Planning

Over 100 Years… In 2013 both the Federal Reserve and the IRS celebrated their 100 th Birthday

Money Supply The Federal Reserve In 2010 created $970 Million Dollars Monopoly $30 Billion dollars of Monopoly money is printed annually Sources: Yahoo! and Federal Reserve Bank of Minneapolis

Not Everyone is a Good Saver! According to a study by Harvard professor David Wise and his colleagues, 46.1% of Americans die with less than $10,000 in assets. According to Gallup, 51.3% of Americans consider themselves "thriving," 45.1% say they are "struggling," and 3.6% say they're "suffering."

Volatility is NOT a NEW Concept! Since 1928, the Dow Jones has increased more than 10% in a single day 8 times, declined more than 10% in a single day 4 times, and gone either up or down more than 5% in a single day 136 times. Since 1928, the Dow Jones has increased more than 10% in a single day 8 times, declined more than 10% in a single day 4 times, and gone either up or down more than 5% in a single day 136 times. Since 1928, the S&P 500 has closed at a new all-time high 1,024 times, or 4.8% of all trading days.

History of Blue Chip Stocks "Blue Chips" is a term borrowed from poker where the blue chips are the most valuable, and refers to the stocks of the largest, most consistently profitable corporations.

Are Interest Rates Low?

Tax History The first income tax ever was in 1404 in England. The first income tax ever was in 1404 in England. King Henry IV of England

U.S. Tax History Source: CCH Inc.

The first 1040 form appeared in It was three pages long. Today, one estimate puts the federal tax code at more than 70,000 pages.

Many of the tax law changes from 2013 will be realized in 2014

A New Bracket The year 2013 brought taxpayers a NEW TOP tax bracket that will be used on all returns filed on or before April 15, 2014 The year 2013 brought taxpayers a NEW TOP tax bracket that will be used on all returns filed on or before April 15, Top Ordinary Income Rate- Salary35%39.6% Top Ordinary Income Tax Rate – Investment Income 35%39.6%

A Rise in Long Term Capital Gains Rates The year 2013 brought taxpayers a rise in Capital Gains Taxes that will be used on all returns filed on or before April 15, 2014 The year 2013 brought taxpayers a rise in Capital Gains Taxes that will be used on all returns filed on or before April 15, Top Capital Gain Rate15%20% Top Tax Rate on Dividends15%20%

Estate, Gift, and GST Tax Rate and Exclusion Amount  Tax rate is 40%, up from 35%  Applicable exclusion amount is $5,340,000 for 2014  Portability made permanent  GST Provisions extended 16

Payroll Taxes Return from Vacation  The Social Security Tax reprieve that we enjoyed from 2011 – 2012 is gone.  We now pay 6.2% and so do our employers on the first $113,700 you earn (12.4% for self-employed). 17

NEW Healthcare Surtax Began January 1, 2013

19 0.9% Healthcare Tax on Earnings An additional 0.9% surtax on higher income households. The tax applies to wages and self-employment income in excess of threshold. There is no employer match on the 0.9 percent tax. Single taxpayers Married taxpayers filing jointly $200,000 $250,000

NEW Medicare Surtax The year 2013 brought taxpayers the NEW Medicare Surtax for High income earners that will be calculated on all returns filed on or before April 15, 2014

21 3.8% Medicare “Surtax” Overview “Threshold amount” is a key factor in the formula for purposes of calculating the surtax. Threshold amounts  Single taxpayers - $200,000  Married taxpayers - $250,000  Estates/trusts - $11,950 (i.e. top income tax bracket in 2013  Estates/trusts - $11,950 (i.e. top income tax bracket in 2013 )

Some Other Tax Law Changes: Penalties for failure to comply with Individual Healthcare mandate Penalties for failure to comply with Individual Healthcare mandate Tax Credit for Buying Health Insurance Tax Credit for Buying Health Insurance

1.Option to deduct state and local sales tax 2.Deduction for higher education tuition and related fees 3.Charitable donations from IRAs 4.Energy efficient home credits 5.$250 deduction for teacher paid school expenses Tax Breaks that Expired in 2013 Include: 23

In 1986, the top 1% of earners reported 11% of all income and paid 26% of the income taxes; the lower-earning 50% made 17% of the income and paid 6% of the nation's individual income tax bill. Who Pays all of the Tax ?

2014 provides an opportunity to review your situation Summary 25

Tax Planning Can Be Confusing! 26

The only thing constant is change The only thing constant is change! 27

All Tax Changes Require Planning 28

2013 was a tale of 2 Different Returns S & P 500Barclay’s Aggregate Bond Index %-2.13%

Wall Street sees S&P 500 rising 6% in 2014 There are no guarantees that these results will be achieved.

The Stock Market vs. Your Portfolio  An index, whether S&P 500 or the Dow Jones, isn’t a measure of your portfolio  It’s what your portfolio is doing, not what “the market” is doing, that is important  Your portfolio doesn’t always move in lock step with any single market or index Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs and expenses. 31

How about interest rates? As interest rates rise, bond prices fall!

What Should YOU do for 2014? 33

Review ALL Your Sources Of Income 34

Know Your Options 35

36 Explore ROTH IRA Conversion Opportunities This might be a good time to review the pros, cons and consequences of a partial or full ROTH IRA conversion. If converting a Traditional IRA to a Roth IRA, you will owe ordinary income taxes on any previously deducted Traditional IRA contributions and on all earnings. A conversion may place you in a higher tax bracket than you are in now. Because Roth IRA conversions may not be appropriate for all investors and individual situations vary we suggest that you discuss tax issues with a qualified tax advisor.

Consider Your Alternatives 37

What Can You Do?  Analyze your sources of income and true cash flow requirements  Review your overall tax planning strategies  Re-evaluate your investment goals  Re-evaluate your investment timelines o Short Term / Longer Term  Re-evaluate your risk tolerance. o Conservative / Moderate / Aggressive  Review your emergency fund needs 38

Markets can remain irrational longer than you can remain solvent.” “ Markets can remain irrational longer than you can remain solvent.” John Maynard Keynes John Maynard Keynes

“If past history was all there was to the investment game, the richest people would be librarians.” Warren Buffett

We Review Changes for Our Clients Regularly! 41

What can you expect from us? Constant communication More frequent discussions More frequent discussions We are constantly reviewing economic, tax, estate and investment issues for our clients We are constantly reviewing economic, tax, estate and investment issues for our clients 42

43 Our Role as Your Advisor  We won’t be making panicky decisions  We will maintain a non-emotional objective  We will avoid knee-jerk reactions  We will assist you in making decisions that are always in your best interest! - and  WE WILL BE HERE FOR YOU!!! 43

Available Today Tax Report 44

Available Soon Our Next Quarterly Economic Report 45

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Thank You! We Appreciate the Opportunity to Assist With YOUR Financial Needs ! 47

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The views expressed are not necessarily the opinion of Insert Broker-dealer name. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Contents provided by MDP, Inc. Copyright 2014 MDP, Inc.