Highlights from our 2013 Business Planning Forum

Last month, Matt Syverson, along with Greg Owens (Keller & Owens), Troy Redstone (PhD Consulting), and Brian Johnston (Polsinelli), hosted our 2013 business planning forum to address the topic of Federal tax law changes and Obamacare and their effect on businesses and business owners. If you’d like to see Matt’s full presentation on “Investing in Light of Obamacare”, you can check it out by clicking here.

Here’s the cliff notes version of the day’s discussion:


The Affordable Care Act has far reaching consequences that even congress, health insurance companies, and those tasked with implementing the program can’t even fully comprehend yet. In the small business world, only businesses with 50+ employees will feel the full effect of Obamacare at this time. However, premiums for healthcare coverage are likely to increase across the board. If your business has more than 50 employees and you can support a self-funded insurance plan, now may be the time to consider that option.

Retirement Plans

Now that our government has “fixed” healthcare, they’re turning their attention toward retirement plans. Retirement plans are beginning to come under more scrutiny for upholding fiduciary standards. Two of the biggest things to look out for are understanding plan fees and having a reasonable and thought-out process for which investment options are made available in your plan and why.

Tax Law Changes

The American Taxpayer Relief Act of 2012 (ATRA) has far-reaching effects. Many of the features of the Bush tax cuts were made permanent for individuals earning less than $200,000 and families earning less than $250,000 annually. However, for individuals and families who earn more than those amounts, taxes will be going up across the board. One area that all taxpayers are seeing an increase is on Social Security tax. The payroll tax holiday, a 2% cut to the employee contribution to Social Security for 2011 and 2012, was allowed to expire at the end of 2012.

Another aspect of ATRA is the return of Pease limitations and personal exemption phase-outs. Pease limitations limit the amount of itemized deductions high-income earners can claim and the personal exemption phase-outs limit the amount of personal exemptions high-income earners enjoy.

The Medicare surtax of .9% on earned income and 3.8% of net investment income also goes into effect for 2013. These taxes are assessed on earned income and/or investment income above the $200,000 threshold for individuals and $250,000 threshold for those filing a joint return.

Investing in Light of Obamacare

Because of the far-reaching effects of ATRA and the new Medicare surtaxes introduced with Obamacare, it’s more important than ever for individuals and families to have a strategic plan for investing. Advisors have been talking about asset allocation for years, but few have practiced asset location. Placing the right types of assets in the right types of accounts can reduce the tax drag on your portfolio and, according to one study, possibly net you an extra 1% after-tax return on your investment portfolio.

You’ll hear us talk more and more about the Tax Planning PentagonTM. The idea is to invest as tax-efficiently as possible using the account types that are available to you. For instance, take advantage of favorable long-term capital gains rates by using equity investments in your taxable accounts, deferring tax from bond income inside your  IRA’s, and holding highly-appreciable assets in your Roth IRA.

All-in-all, there are many important changes to be aware of regarding taxes, healthcare, and employer-sponsored retirement plans. If you need help navigating all the changes for yourself and/or your business, don’t hesitate to call us or one of our trusted professional peers: Troy Redstone (401k/Employee Benefits Consultant), Greg Owens  (CPA), Brian Johnston (Employee Benefits/Executive Compensation Attorney).

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