1. WAYS TO MAXIMIZE INCOME AND TAX BENEFITS IN THE CURRENT TAX CLIMATE Presented by: Charles Bennett Sachs Principal Private Wealth Counsel (305) 444-1610 charles.sachs@pwcounsel.com112/10/2013

2. FOR THOSE WHO LIKE TO PAY TAXES212/10/2013 3. FOR THE REST OF US312/10/2013 4. TODAYS OBJECTIVE: 1. Understand how the new tax lawimpacts you 2. Learn strategies to lower your taxes before year end 3. Leave here learning at least one thing important to you412/10/2013 5. THE AMERICAN TAX PAYER RELIEF ACT OF 2012 (ATRA)More like indigestion than relief for higher earners512/10/2013 6. Quiz Question #1 The New Income Tax rules for 2013 make giving to charity more desirable.612/10/2013 7. True There is an increased tax savings forhigher wage earners The phase out of deductions will typically not affect your charitable donation712/10/2013 8. HOW TAX CHANGES IMPACT A MARRIED COUPLE:Income Below $250,000 No changes for you812/10/2013 9. HOW TAX CHANGES IMPACT A MARRIED COUPLE: INCOME ABOVE $250,000Additional 3.8% Surtax on Unearned Income (includes dividends, interest and capital gains (any income that was not earned from employment.)912/10/2013 10. HOW TAX CHANGES IMPACT A MARRIED COUPLE: INCOME ABOVE $300,000 1. Personal exemptionsreduced by 2% for each $2,500 of income 2. Itemized deductions reduced by 3% of income 1012/10/2013 11. HOW TAX CHANGES IMPACT A MARRIED COUPLE: INCOME ABOVE $450,000 1. A new top income taxrate of 39.6% 2. a new long term capital gains & qualifying dividends rate of 20%1112/10/2013 12. THE DOUBLE WHAMMY! Happens when you add the 3.8% (Unearned Income Tax) on top of: The Top Income Tax bracket: 39.6% + 3.8% =43.6% The Top Capital Gains Tax: 20.0% +3.8% = 23.8%1212/10/2013 13. HOW TO REDUCE TAXABLE INCOME (THE USUAL SUSPECTS) GIVE DIRECTLY FROM YOUR REGULAR IRA If you are at least 70& years of age, give asmuch as $100,000 directly to charityBENEFITS Counts toward your required minimumdistribution Not counted as income No income tax due Cant push you into one of the higher tax brackets No risk of losing any of the charitable deductiondue to the new itemized deduction phase out 1312/10/2013 14. GIVE DIRECTLY FROM YOUR REGULAR IRA EXAMPLE (PHYLLIS, 72) Required to take a distributionfrom her IRA for 2013 of $15,000. Wants to make a gift to Weizmann for the same amount, but is concerned about having to pay income tax. She contacts her investment professional who fills out a distribution form requesting the withdrawal from the IRA directly to Weizmann. 1412/10/2013 15. HOW TO REDUCE TAXABLE INCOME (THE USUAL SUSPECTS) DEFER EARNED INCOME Contributions to retirementaccounts up to $23,000 a year into a 401k and A 457 (if available) BENEFIT: Pay tax later when you are hopefully in a lower tax rate Even if youre not, you received a tax free loan from the IRS SAVINGS: As much as 39.8% on your 15 tax bill12/10/2013 16. HOW TO REDUCE TAXABLE INCOME (THE USUAL SUSPECTS) TAX FREE BONDS (MUNICIPALBONDS) The top tax rates on taxable bonds Florida: 39.6% + 3.8% = 43.6% New York: 39.6% + 3.8% +9% = 52.4%1612/10/2013 17. HOW TO REDUCE TAXABLE INCOME (THE HIDDEN SUSPECTS) Elimination Of Capital Gains From An Appreciated Asset: EXAMPLE: Shari has a huge gain in shares in XYZ Corp. her grandma gave her 20 years ago1712/10/2013 18. WHICH WOULD YOU RATHER DO? Sells Shares & Donates ProceedsMarket Value $110,000 Cost: 10,000 Gain: $100,000 Top Rate: 23.8% Tax Due: $23,800 18Weizmann Gets:Gives Shares Directly To WeizmannMarket Value $110,000 Cost: 10,000 Gain: $100,000 Top Rate: 0% Tax Due: $0 Weizmann Gets:12/10/2013 19. DONATE APPRECIATED ASSETS Youve Held At Least A Year Stocks, Bonds, Privately-Held Stock, S-Corp Stock, Restricted Stock Tangible personal property including works of art and other collectibles* Commercial and Residential Real Estate (Full or Partial Interest) Net leased property Limited Partnerships and LLCs, Operating partnership units Timber deeds, Royalties Notes, Deeds and Mortgages Mineral rights including oil & gas partnerships 19* To obtain a full market value deduction for a gift of tangible personal property, the use by the donee institution must be related to its 12/10/2013 charitable purposes or functions. If not, the deduction is for cost basis only 20. I want to make a large gift, but I am afraid I will outlive my assets and be left with no income 21. Donor age 80, gives $100,000 and the charity pays $6,800 per year for life Initial GiftWeizmann One Hundred Thousand and Institute no/1001/1/2018 1/1/201712/3/20131/1/2016100,00 01/1/2015Annual Payments1/1/2014 Donor 6,800FiveThousandand no/100Annual PaymentsCharity 22. 65 70 75 80 85 904.7% 5.1% 5.8% 6.8% 7.8% 9.0%Rates are for illustration only. Other factors apply. Seek your own legal and tax advice on all gifts.Exampl e donor ages & rates 23. DONOR ADVISED FUNDS Donor makes a charitable contribution, receivesan immediate tax benefit and then recommends grants from the fund over time A donor-advised fund is like a charitable savings account: a donor contributes to the fund as frequently as they like and then recommends grants to their favorite charity when they are ready2412/10/2013 24. A Great Strategy Before Year End Use Highly appreciated Stock youve held more than one year to establish a Donor Advised Fund. Benefits: 1. Elimination of the capital gain you would have paid when you sell the stock 2. Weizmann sells the stock and immediately gets cash 3. The fair market value of the gift is tax deductable 4. Make gifts whenever you want 2512/10/2013 25. BE TAX SMART WITH YOUR MONEY Give directly from yourregular IRA Give securities that have a large increase in value Establish a charitable gift annuity Establish a donor advised fund 26. PRESENTER Mr. Sachs was a frequent guest commentator on the Nightly Business Report and has addressed many National and South Florida organizations with regard to charitable giving techniques. Charles provides fee only, fiduciary representation to affluent and ultraaffluent clients, their families, and businesses as part of a long-term consultative approach to help them achieve their investment, financial planning, and charitable goals. He is a Principal with Miami based Private Wealth Counsel and was most recently a Principal of nationally recognized Wealth Management firm. Mr. Sachs is a CERTIFIED FINANCIAL PLANNER Professional, Chartered Financial Analyst, and earned a Masters of Business Administration with Honors from Florida International University. He serves as President of the Financial Planning Association of Miami, Vice President of the Estate Planning Council of Greater Miami, Board member of the American Committee for the Weizmann Institute of Science, and Professional Advisory Council member of the United Way and University of Miami. Mr. Sachs is host of the radio show Straight Talk on Your Money which 12/10/2013 27 airs on 880AM the BIZ (WZAB Miami) 3pm on Thursdays. He can be reached at www.pwcounsel.com or (305) 444-1610. 27. IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein 2812/10/2013 28. SIGNIFICANT TAX CHANGES FOR HIGH WAGE EARNERS: A new top income tax bracket of 39.6% for couples earning29more than $450,000 (this 4.6% higher change in the rate is a 13% increase in taxes due for amounts over the $450,000 threshold. Couples with $250,000 or more of earnings will also be subject to a 0.9% additional Medicare tax. A new 3.8 % Medicare tax on unearned income for couples with income of $250,000. Unearned income includes dividends, interest and capital gains (any income that was not earned from employment.) A new 20% capital gains rate for those with income over $450,000. In this case the capital gains rate increases form 15% in 2012 to 23.8% since the 3.8% Medicare tax will be due as well. (This is nearly a 60% increase in the amount of tax due.) As a result of these changes high wage earners in 12/10/2013 particular need to focus more on strategies to minimize 29. Weizmann Institute of Science The American Committee for the Weizmann Institute of Science,30founded in 1944, develops philanthropic support for the Weizmann Institute of Science in Israel, one of the worlds premier scientific research institutions. TheWeizmann Institute is a center of basic multidisciplinary scientific research and graduate study, addressing crucial problems in technology, medicine and health, energy, agriculture, and the environment. The American Committee engages in various activities in order to develop philanthropic funds for the Weizmann Institute from individuals, families, foundations, and the business community; educates the American public about the Institutes research; and represents the Institutes interests in the U.S. Through their generous philanthropy, the American Committees supporters become partners with Weizmann Institute scientists in the search for answers to the most difficult challenges facing humanity. Together, the American Committee, other committees throughout the world, and the Weizmann Institute comprise a flourishing humanitarian enterprise 12/10/2013 dedicated to improving the quality of life for all humankind through scientific research.