2014 Tax Changes

2014 Open Cases

I’m sure by now that the client has met with their tax advisor for 2014 planning and gotten the news on increased rates and reduced or eliminated deductions and are now coming to grips with the new tax laws. This new tax “reality” includes big changes occurring in the federal income tax code with top bracket personal Federal income tax rates growing from 35% to almost 40%. Additionally, the phase-out of deductions and exemptions for earners over $254k is challenging for many clients. These federal tax increases as well as others (including state income taxes) means that many clients are now paying income tax rates of over 50% and more for the tax year 2014! Finally, this year, your business clients will see a significant reduction in the deduction levels allowed under IRC 179 (formerly allowed at $500,000 per year down to $25,000 per year for 2014!). This is the deduction that allows a business to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the property to be capitalized and depreciated. In summary, it is becoming increasingly difficult to find significant tax mitigation opportunities and your clients know it.

With the changes in tax structure in the last year, now is a great time to revisit past cases that we have worked on together but which have not been closed. We’ll be glad to reopen those cases, work on them with you and help your clients and their tax advisors understand the tax-advantages of a Section 79 plan. Business Planning Group looks forward to working with you and your clients this year to make your 2014, the best year ever. We have just over 80 days to get any 2014 cases adopted, written and funded so this is the time to get it done!

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