1. Taxes: Start Your Money Plan Here Take Charge: Your Money. Your Life. Brought to you by 360 Degrees of Financial Literacy and America's CPA Financial Planners 1

2. Personal Financial Planning Section360 Degrees of Financial Literacy Let’s get this out of the way … The general information contained in this web seminar is provided by the American Institute of Certified Public Accountants as a service to the public and our members. It is not intended to serve as tax, legal or any other professional advice applicable to any particular person or matter. 2

3. Personal Financial Planning Section360 Degrees of Financial Literacy Your Host 3 Gina Chironis, CPA/PFS CEO, Clarity Wealth Management PFP Executive Committee Member AICPA member PFS credential holder CalCPA PFP Committee Chair

4. Personal Financial Planning Section360 Degrees of Financial Literacy The Stats A recent poll conducted for the AICPA and 360 Degrees of Financial Literacy found: 94% of Americans have financial concerns. 40% are concerned about basic living expenses 25% are concerned about the long-term Source: Harris Interactive 4

5. Personal Financial Planning Section360 Degrees of Financial Literacy The Benefits of Planning Ahead 02.09.12 % Living comfortably % Not feeling behind on any specific goal % Feeling very confident in managing money, savings and investments Statistics for households with incomes of $100,000 or more. 2012 Household Financial Planning Survey, Certified Financial Planner Board of Standards, Inc. and the Consumer Federation of America. July 23, 2012. Source: BAM Advisor Services

6. Personal Financial Planning Section360 Degrees of Financial Literacy Where are you now? Where do you want to be in the future? The Plan: Your roadmap to get there! 6 The Takeaway: Americans Need a Plan

7. Personal Financial Planning Section360 Degrees of Financial Literacy Your tax return tells a story. In it you will find: Details of your cash flows. Information important to your investment, retirement and estate planning strategies. Overlooked opportunities to help you achieve your financial goals. 7 Where Are You Now:

8. Personal Financial Planning Section360 Degrees of Financial Literacy Your Tax Return Provides Valuable Info on Where You Are Now: Estimate of Total Annual Spending 1040 IRA Contributions/Distributions 1040 Marginal Tax Bracket 1040 Big Ticket Expenses: Schedule A Interest & Dividend Income: Schedule B Capital Gains (Losses) and Investment Trading Activity Schedule D 8

9. Personal Financial Planning Section360 Degrees of Financial Literacy How much are you saving? Company retirement plans IRAs Personal savings Estimate your total current spending: Gross Income:1040 Line 22 – Savings –Taxes:1040 Line 61 = You Spent the Rest How Much are you Saving and Spending? 9

10. Personal Financial Planning Section360 Degrees of Financial Literacy Tax Bracket Current Marginal Tax Bracket: the tax rate that applies to the next dollar of income earned. Find your Total Taxable Income on Line 43 of 2013 Form 1040. 10

11. Personal Financial Planning Section360 Degrees of Financial Literacy 2014 Federal Tax Brackets 11 2014 Federal Taxable Income Brackets and Rates RateSingle FilersMarried Joint Filers Head of Household Filers 10%$0 to $9,075$0 to $18,150$0 to $12,950 15%$9,076 to $36,900$18,151 to$73,800$12,951 to $49,400 25%$36,901 to $89,350$73,801 to $148,850 $49,401 to $127,550 28%$89,351 to $186,350 $148,851 to $226,850 $127,551 to $206,600 33%$186,351 to $405,100 $226,851 to $405,100 $206,601 to $405,100 35%$405,101 to 406,750$405,101 to 457,600 $405,101 to $432,200 39.6%$406,751+$457,601+$432,201+ Source: Internal Revenue Service

12. Personal Financial Planning Section360 Degrees of Financial Literacy Schedule A: Expenses Medical expenses >10% AGI Mortgage Interest Expense (no principal payments) Charitable contributions State Taxes Misc. Expenses >2% AGI Phaseouts 12

13. Personal Financial Planning Section360 Degrees of Financial Literacy 360-Degree View Your tax return gives you a 360-degree view of your finances that you can use to improve your future. File Taxes Evaluate Tax Strategy Evaluate Retirement Strategy Evaluate Investment Strategy Improve Future You 13

14. Personal Financial Planning Section360 Degrees of Financial Literacy Tax Planning: The Bridge to Financial Planning Think about taxes year round. Save money tax efficiently for future needs. Spend money tax efficiently so you keep more to invest in your future. Hint: Visit www.360taxes.org for year-round tax tips.www.360taxes.org 14

15. Where do you want to be in Retirement? Taxes: Start Your Money Plan Here What lifestyle do you want? How will your expenses change? Are you planning for medical expenses? Do you have an overall game plan? 15

16. Personal Financial Planning Section360 Degrees of Financial Literacy 360-Degree View File Taxes Evaluate Tax Strategy Evaluate Retirement Strategy Evaluate Investment Strategy Improve Future You  Save money tax efficiently  Identify future deductions  Spend money tax efficiently 16

17. What's Your Tax Strategy? Taxes: Start Your Money Plan Here How are you timing income and deductions? Have you considered ways to bunch deductions? Are you losing deductions due to phaseouts? Do you have a system for tracking expenses? 17

18. Personal Financial Planning Section360 Degrees of Financial Literacy Decrease Debt or Invest? 18 Pay down debt when you can’t invest at a higher rate 401(k) Match* Credit Card InvestmentMortgage Interest Paid / Received 100.0%18.0%8.0%6.5% Tax effect @ 25%--0.0%-2.0%-1.6% Net Paid / Received100.0%18.0%6.0%4.9% * Assumes 100% matching of first 3% of your pre-tax 401k contributions

19. Personal Financial Planning Section360 Degrees of Financial Literacy Planning Bonus Estate Planning Tip: While reviewing retirement documents, check beneficiary information to ensure it is accurate and up to date. 19

20. Personal Financial Planning Section360 Degrees of Financial Literacy 360-Degree View File Taxes Evaluate Tax Strategy Evaluate Retirement Strategy Evaluate Investment Strategy Improve Future You  Maximize deferral opportunities  Reduce unnecessary complexity  Maximize Social Security benefits  Ensure sustainable withdrawals 20

21. Personal Financial Planning Section360 Degrees of Financial Literacy Retirement—Planning Key Document Form 1040 Key Questions: Do you have a plan for retirement? -Divide your total spending by 3- 4% Are you maximizing deferral opportunities? -401(k), 457, 403(b), IRA Do you have multiple retirement plans? -Consider consolidating them. Have you considered a Roth conversion? -Run the numbers on your plan 21

22. Personal Financial Planning Section360 Degrees of Financial Literacy Retirement—Distributions Key Document: Form 1040 Key Questions: Are you withdrawing at a sustainable rate? -Don’t run out of money before you run out of life expectancy. Are you taking required minimum distributions? -Over 70 ½ you have to take a required minimum distribution. Are you drawing from the right place? -Pull money from the right pool for tax efficiency. Are you maximizing Social Security benefits? -Know rules for spouses, divorcees. 22

23. Personal Financial Planning Section360 Degrees of Financial Literacy 360-Degree View File Taxes Evaluate Tax Strategy Evaluate Retirement Strategy Evaluate Investment Strategy Improve Future You  Review asset allocation  Match returns to goals  Manage risk  Reduce unnecessary complexity 23

24. Personal Financial Planning Section360 Degrees of Financial Literacy 3.8% Tax on Net Investment Income Applies to individuals with modified AGI above certain thresholds: $250,000 for married couples filing jointly $200,000 for single taxpayers Includes capital gains, interest and dividend income from investment assets May also apply to rental and royalty income

25. Personal Financial Planning Section360 Degrees of Financial Literacy Increased Tax Rates on Dividend Income and Capital Gains The dividend income and long-term capital gains tax rate jumped in 2013 from 15% to 20% for high earners (23.8% if the new net investment income tax applies). The dividend and long-term capital gains rates for other taxpayers remained the same, ranging from 0 to 15%.

26. Investments Taxes: Start Your Money Plan Here Is your plan consistent with your goals? Does asset allocation consider risk tolerance? Are your investments tax efficient? Have you considered the safety of your assets? Does your asset allocation consider cash flow? 26

27. Personal Financial Planning Section360 Degrees of Financial Literacy Investment Considerations Key Document: Schedule B—Interest & Dividends Key Questions: Are you properly diversified? -Risk and return are married. Do you have enough cash? -3 months savings might not be enough. Do you have too much cash? -Balance inflation with interest rates. Do you have too much cash in one bank? -Watch FDIC limits. 27

28. Personal Financial Planning Section360 Degrees of Financial Literacy Investments Key Document: Schedule D—Capital Gains/Losses Key Questions: Are investment decisions coordinated with tax planning? -Lower capital gains rates; Medicare tax -Asset location: where are you holding taxable vs tax free investments Are you harvesting losses? -Offset capital gains by taking losses. Are you carrying losses forward? -Reduce your future tax bill. 28

29. Personal Financial Planning Section360 Degrees of Financial Literacy 360-Degree View File Taxes Evaluate Tax Strategy Evaluate Retirement Strategy Evaluate Investment Strategy Improve Future You  Assess insurance needs  Review estate plan  Create an emergency fund 29

30. Future You Taxes: Start Your Money Plan Here Have you set clear goals? Do you have protection for your family and assets? Are you ready for emergencies? 30

31. Personal Financial Planning Section360 Degrees of Financial Literacy Future You Planning is only as good as your goals. Know where you’re headed. Develop a clear picture for retirement. Evaluate the education needs of your children. -Will you pay the entire cost of tuition? -What percentage will you commit to? It is a continuous process, not a one time event Protection is as important as planning. Without proper insurance you could jeopardize all the saving and planning you have done. Estate planning is not just for the wealthy. It’s for everybody. An emergency fund helps bridge difficult times. 31

32. Personal Financial Planning Section360 Degrees of Financial Literacy Future You Planning is only as good as your goals. Know where you’re headed Establish a budget and savings goals Develop a clear picture for retirement It is a continuous process, not a one time event 32

33. Personal Financial Planning Section360 Degrees of Financial Literacy Questions and Resources Q&A www.findacpapfs.org www.aicpa.org/pfp/consumer www.360financialliteracy.org Among them: Checklists to use with your own return. Today’s PowerPoint presentation. Archived recording of today’s webinar. Tips on choosing the right financial advisor. 33