Congress has announced its intention to make the largest change in the U.S. tax code in almost 30 years. The proposed "Tax Reform Act of 2014" will have a huge impact on all taxpayers, both individual and corporate. While nobody knows what the final language of the Tax Act of 2014 will be, it is vital that you know as much about the proposed changes as possible. While we don't expect Congress to pass this legislation this year, it will benefit you to be in-the-know. View slides from Gray, Gray & Gray's recent "Preview of the 'Tax Reform Act of 2014'" webinar to learn more about the proposed legislation.

2. Presented By:
Michael D. Koppel,
CPA, MBA, PFS, CITP

3. Today’s Presenter
Michael D. Koppel, CPA, MBA, PFS, CITP
mkoppel@gggcpas.com
mike@thekoppels.com
P: (781)407-0300 | D: (781)407-3254
C: (617)775-2129

4. Today’s Goal
 Not to be political
 Not favor any specific position
 Make people aware so they can
make informed decisions during the
upcoming discussion
 Make their desires known

5. Tax Reform Act of 2014
UNLESS RELEVANT

6. Tax Reform Act of 2014
UNLESS YOU ASK

7. Tax Reform Act of 2014
SOME HISTORY
TAX REFORM ACT OF 1986
RULE OF UNINTENDED CONSEQUENCES!

8. Tax Reform Act of 2014
CAMP’S GOAL:
Simplicity and Fairness

9. Tax Reform Act of 2014
Only 2 Individual Rates
SINGLE MARRIED
JOINT
PRESENT
LAW
PROPOSED
<$9,200 <$18,400 10% 10%
$9,201-$37,400 $18,401 15% 10%
$37,401-$90,600 $74,801-$151,100 25% 25%
$90,601-$189,000 $151,000-$230,000 28% 25%
$189,001-$410,950 $230,101-$410,950 33% 25%
<$412,650 >$464,200 39.8% 25%

10. Tax Reform Act of 2014
10% Surtax MAGI Over
$400,000 / $450,000
Marriage Penalty!

11. Tax Reform Act of 2014
But wait, there is more!

12. Tax Reform Act of 2014
 Eliminates deduction state & local taxes
 Increase in standard deduction with higher
phase-out
 Reduce cap for mortgage deduction to
$500,000 (phased-in)
 New exemption of dividend and capital gain
 Investment interest expense reduced by tax-
exempt interest
 Increased restriction & phase-out of residence
gain exclusion
More:

13. Tax Reform Act of 2014
 Limitation on charitable donation (excess
of 2% of AGI)
 Percentage deduction reduced
 Repeal of most individual credits
 4 higher education provisions rolled in
American Opportunity Credit
 Expands child care credit
 No personal exemptions
 NII surtax remains
Even More:

14. Tax Reform Act of 2014
 Reduces by half available 401(k)
 Other half can be made a Roth type account
 Employers with more than 100 employees
must offer Roth accounts
 Remove income limits on Roth IRAs
 No new contributions to regular or
nondeductible IRAs
 Repeal exceptions to 10% early
withdrawal penalty
Retirement

15. Tax Reform Act of 2014
AMT Repealed for All
Provisions for unused credits
WHY?

16. Tax Reform Act of 2014
 Repeal of MACRs
 Usually longer lives (ADS)
 Straight line
 But can elect additional depreciation for inflation
 No bonus depreciation
 Repeal special rules for pollution control facilities
 90% limitation on NOLs
 Special 5 year life for R&D expenses
 Advertising expense 50% deduction remainder 10 year
life
 Does not apply to first million but phase-out
 §179 $250,000 phase-out starting at $800,000
Business Provisions

17. Tax Reform Act of 2014
 Goodwill and most other intangibles now 20 year
amortization
 End of LIFO/lower of cost or market
 Like-kind exchanges gone or minimized
 New limitations on entertainment etc.
 Repeal of “small business” tax exemption
 New rules for gain on contribution of assets for capital
 New rules or repeal of most credits
 Reduction of installment sales interest to $150,000
 Repeal of production deduction (sort of)
Business Provisions

18. Tax Reform Act of 2014
Limitation on the Cash Method
 All entities with revenue of $10 million or
more
 Except
 Farms
 Sole proprietors

19. Tax Reform Act of 2014
Self-Employment Tax
 History - bifurcation – sense of the senate
 70% subject to S/E tax ($15.3 billion over 10
years)
 Repeal of exception for certain students
($13 billion over 10 years)

20. Tax Reform Act of 2014
Carried Interest

21. Tax Reform Act of 2014
Big Bank Tax

22. Tax Reform Act of 2014
 New limitation on completed-contract method
 New rules on derivatives
 Sale of securities must use LIFO
 Income from private activity bonds taxable
 Simplification of certain S Corp rules
 Repeal partnership guaranteed payment rules
 New REIT rules
 New deferred compensation rules
 New safe harbor for worker classification
Other “Stuff”:

23. Tax Reform Act of 2014
 New restrictions and changes to foreign
income
 New UBTI rules for not for profits
 Changes to cruise ship, and employees
taxation
 Taxation of excess compensation of officers of
tax-exempt organizations
 Excise tax on certain investment income of
private colleges
 Taxations of “professional football leagues”
 Taxpayer Bill of Rights
Other “Stuff”:

24. Tax Reform Act of 2014
Estate & Gift

25. Questions?
Michael D. Koppel, CPA, MBA, PFS, CITP
mkoppel@gggcpas.com
mike@thekoppels.com
P: (781)407-0300 | D: (781)407-3254
C: (617)775-2129

26. Contact Us

27. Disclaimer
The content of this webinar is intended for educational purposes only.
This webinar provides a brief summary based on our understanding and interpretation of current law. All
tax references are to federal tax law only, unless otherwise stated.
The information contained in this webinar is general in nature and is based on authorities that are subject
to change. It is not, and should not be construed as accounting, legal or tax advice or opinion provided
by Gray, Gray & Gray, LLP. The material presented may not be applicable to, or suitable for, specific
circumstances or needs, and may require consideration of non-tax factors and tax factors not described
herein. Contact Gray, Gray & Gray or another tax professional prior to taking any action based upon this
information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis the
information contained herein; Gray, Gray & Gray assumes no obligation to inform the reader/webinar
attendee of any such changes.
The material presented in this webinar is not intended to, and cannot be used to, avoid IRS penalties. This
material supports the marketing and promotion of accounting services. Seek advice based on your
particular circumstances from independent tax, legal accounting, insurance, investment and financial
advisors.
Michael D. Koppel, CPA, PFS is a Certified Public Accountant in Massachusetts and serves as Tax Advisor
at Gray, Gray & Gray, LLP.