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    Register for a webcast on February 5 from 2-3:45pm ET, First Quarter Sophisticated Tax and Investment Planning Strategies.


    PFP News


    Member-Exclusive News, Resources and Events


    January 28, 2015

    In This Issue

    First Quarter Sophisticated Tax and Investment Planning Strategies

    Watch Your Inbox for Quarterly Trend Survey Next Week

    AICPA Calls for Missed Tax Election Relief

    Advanced PFP Conference Session Recaps

    Forefield Alert: New Veterans Pension Rates Announced

    Bob Veres Media Reviews: A Good Executive Assistant Will Change Your Life

    AICPA Seeks Nominations for Distinguished Achievement in Accounting Education Award



    PFP News & Resources


    February 5: First Quarter Sophisticated Tax and Investment Planning Strategies


    Timing is important when looking for ways to help clients reduce taxes and save more for retirement. Beginning of the year tax strategies are valuable and under-utilized. In this webcast on February 5th from 2-3:45pm ET with Bob Keebler and Bob Gordon, you will learn:


    How to add value by timing retirement plan contributions, Roth conversions, and the exercise of incentive stock options

    Information about option strategies and the taxation of investments - including Master Limited Partnerships.


    Learn how to be a more tax conscious-advisor! This webcast is free without optional CPE or discounted CPE for purchase for PFP/PFS members.



    Watch Your Inbox for Quarterly Trend Survey Next Week


    A PFP Division Media Advisory Board comprised of CPA/PFS credential holders will oversee the creation and implementation of a quarterly trend survey of CPA financial planners. This short 5-10 minute survey will be used to create media message points, demonstrate the importance of CPAs in their clients' financial planning relationships, and raise the awareness in the CPA community and the media of the issues CPA financial planners face. If you are a member of the PFP Section, inclusive of PFS credential holders, we encourage your participation in the initial survey, deploying early next week, which will focus on retirement planning issues. Watch your inbox for an invitation to respond!



    Leg/Reg Update: AICPA Calls for Missed Tax Election Relief


    If you or your client missed a deadline for one of 26 tax elections that are set by law, you (or the client) are out of luck. That's why the AICPA is calling on Congress to allow the IRS to grant relief as it does now for missed elections with deadlines set in regulation instead of statute. Elections with deadlines set by law include installment payments for estate tax, innocent spouse relief and claiming an unused portion of the estate tax exclusion (known as portability). Read the AICPA's letter requesting relief for taxpayers in certain situations when they miss a statutory deadline or make an error in choosing an election.



    Did You Miss the AICPA Advanced Personal Financial Planning Conference? Read Session Recaps!


    The 2015 AICPA PFP Conference was held at the Bellagio in Las Vegas from January 18-21. Over 1,300 CPAs and financial planners gathered in-person and online to learn from the thought leaders of the profession. Presentations ranged from the relevance of strategic asset allocation, safe withdrawal rates in retirement, practical applications of the AICPA PFP standards, generating TAX ALPHA™, creating a mobile office, and more. The conference had a vast array of sessions designed to meet the needs of all advisors. Find out what all the buzz was about by searching #AICPApfp on Twitter. We hope to see you next year in-person at the Bellagio, Las Vegas or attending virtually on January 18-20, 2016! In case you missed it, here are some of the highlights:

    Standards: Dirk Edwards led a session covering practical applications and frequently asked questions on the Statement on Standards in Personal Financial Planning Services ("the standard"), which became effective on July 1, 2014.


    Dirk reinforced that the AICPA Code of Professional Conduct is the cornerstone of the standard. The Code requires that members act with integrity, objectivity, due care, competence, fully disclose any conflicts of interest (and obtain client consent if a conflict exists), maintain client confidentiality, disclose to the client any commission or referral fees, and serve the public interest when providing financial services.

    The key elements of the standard include documentation of the PFP engagement, communication and disclosures to the client, and the use of professional judgment.

    In an interactive discussion, Dirk gave examples of what constitutes a personalized recommendation.

    He also discussed various compensation scenarios and how to comply with the disclosure requirement when a dollar amount is not known.


    Dirk encouraged everyone to access to the Standards in PFP: Compliance Toolkit (available free to PFP/PFS members), to help understand the standard and put it into practice. The toolkit includes checklists, sample engagement letters, and more.

    Retirement Planning: Ted Sarenski presented "New Developments in Social Security Planning" to help advisors wade through the media hype in order to give clients the facts about what they can and cannot do with Social Security.


    New Compassionate Allowances - Social Security added 28 conditions (making the total 225) to the list of conditions that qualify for an expedited (many times just a week) processing for disability benefits. These are typically conditions that are so serious that they obviously meet disability standards.

    In 35 states, the District of Columbia, and the city of St Louis, same sex married couples are now eligible of Social Security benefits. However, same sex married couples in the remaining 15 states are encouraged to file a protective claim to preserve their eligibility dates in the event their state of residency becomes eligible in the future.

    The file and suspend strategy for the major wage earner enables the spouse to claim their spousal benefit. One additional benefit is that once filed, the wage earner can reverse the file and suspend decision back to the filing date and receive a lump sum payment for past benefits and ongoing payments at the full retirement age (FRA) benefit monthly rate. This would be very beneficial for someone who filed and suspended at age 66 (FRA), and then prior to age 70 was diagnosed with a life threatening condition. For this reason, it is a good policy to have all clients, married and single, file and suspend at FRA if they are not planning on taking their benefits at that time.

    The Social Security Administration does not recognize a power of attorney (POA) for a person receiving a benefit. Instead a person must apply to become a representative payee (SSA Guide available). This involves an application and an interview by the Social Security Administration. For example, if the bank receiving the Social Security payment must be changed, but the payee is not able to sign, it can delay receipt for Social Security payments if the cognitive spouse only has a POA. The process to become a representative payee can take six months or more, so having each spouse become the representative payee for each other in advance can avert a potential problem, particularly in light of the increase in dementia related illnesses.


    Ted is the author of The CPA's Guide to Social Security Planning, which provides answers to common adviser questions and planning situations. Further, Ted recommended that the audience utilize the Social Security Retirement Benefit Calculator for married couples from Forefield Advisor's Social Security Resource Center to run different scenarios.

    Jim Shambo presented "Simulating Retirement: Integrating Human Beings into the Process" where he discussed both sides of retirement planning - savings and withdrawals. Here are some strategies that he recommends:


    Create a Retirement Savings Policy Statement to establish a clear understanding as to savings goals and objectives. This includes calculating retirement savings rate, creating new retirement savings guidelines, identifying conflicting goals and ranking them relative to retirement goals, and other parameters that influence your clients' savings philosophy.

    Many clients should aim to save 15% of income for retirement.

    Using his proprietary Hedonic Pleasure Index allows simulations to adjust the client's spending inflation to a level more consistent with their spending behavior. This index measures the extent by which a particular client will likely differ from CPI in their spending.

    Use a build-up approach to refine the drawdown rate.


    Jim is the author of a new guide from the PFP Section on the art and science of retirement planning, which will be available later this year. Stay tuned to you PFP News for more information!

    Best Planning Ideas: This session, moderated by Lyle Benson and featuring panelists Bob Keebler, and Michael Kitces, Daniel Rubin, and Ted Sarenski has become a conference favorite. Panelists discussed planning ideas for estate, retirement, asset protection, insurance/risk management as well as recent IRS rulings. The panelists shared too many great strategies during the session to capture all here, but here are some highlights:


    Capital gains harvesting is important for clients in the 15% tax bracket to take advantage of the 0% capital gains rate. For example, taxpayers can sell assets with large unrealized gains, incur 0% capital gains, immediately purchase the assets back at the higher price and receive a stepped up basis (without having to die!). 73% of audience members polled are engaging in capital gains harvesting strategies.

    Multi-year tax projections are helpful in order to consider the benefits of potential Roth conversions and smooth your clients' tax rates over time; in fact, nearly 80% of the audience members polled at the conference are doing multi-year projections for this purpose.

    Even with portability, large estates may still benefit from funding a bypass trust. Portability is not applicable for purposes of the GST exemption and there are creditor protection advantages to using a bypass trust. One disadvantage would be if market values decline, portability may be a better strategy.

    Any client putting a large amount of money into trusts should add the trust as a beneficiary on their IRA account because it controls access to the IRA after death and may be a protection from creditors. However, the panel noted that inherited IRAs are generally not protected from creditors under state law; further, a 2014 Supreme Court decision ruled that inherited IRAs are not treated as retirement funds and thus not protected from creditors. Despite the recommendations from the panel, the majority of audience members polled have few clients designating a trust as the beneficiary of IRAs or qualified plans.

    Starting in 2015, you can roll all after-tax accounts (old after-tax and Roth 401(k) accounts) into Roth IRAs. Since there are no income limits on these rollovers it might incentivize people to max out after-tax 401(k) contributions for the sole purpose of rolling to Roth IRAs in the future.

    Most clients should delay taking Social Security in order to get the largest possible benefit. Delaying SS benefits is an extraordinarily high rate of return - 70% above current market rate for annuities based on current interest rates.

    When looking back at market returns in the last year, remind clients that diversification is not a mechanism that increases returns, but rather increases risk-adjusted returns.

    Consider planning strategies that may be tax advantageous to protect wealthy clients in light of Obama's recent State of the Union address, where he proposed eliminating the step-up in basis for assets transferred at death and raising the top tax rate on capital gains and dividends.


    Visit the PFP Section's Webcast Library for recordings and presentation materials from industry experts on these topics and more.



    Forefield Alert: New Veterans Pension Rates Announced


    The U.S. Department of Veterans Affairs offers a pension to eligible veterans and their families to supplement income they may already receive. Each year, Congress announces maximum annual pension rates used to determine whether, and how much, a veteran may be eligible to receive as supplemental income. The new rates may be found on the U.S. Department of Veterans Affairs website,

    The Veterans Pension provides income to those men and women who've bravely served their country and are facing financial challenges. Additional aid and attendance or housebound benefits are also available to eligible veterans who are disabled, live in a nursing home, or who need help performing everyday functions.

    Forefield has created a client alert to help your clients and prospects understand these pension benefits and determine whether they or their family members may be eligible.



    Bob Veres Media Reviews


    Bob Veres Media Reviews are designed to save you hours of reading time each month -- giving you time for more productive activities. Read Bob's write-ups of articles in January's Investment Advisor magazine, including:


    "SEC Tests Effectiveness of Disclosures, Fiduciary Rule Pending" by Melanie Waddell

    "Navigators: How to Guide Clients Through Big Life Changes" by Olivia Mellan and Sherry Christie

    "Hire Slow, Fire Fast" by Mark Tibergien

    "Republicans Get Tough with SEC Over User Fees" by Melanie Waddell

    "A Good Executive Assistant Will Change Your Life" by Angie Herbers

    "Make 2015 a Transformational Year" by Dan Skiles

    "The SEC Exam Process Lacks Consistency" by Tom Giachetti

    "Age No Impediment to a Successful Succession Plan" by Cam Marston


    Access other editions of media reviews, Inside Information and e-columns.



    AICPA Seeks Nominations for Distinguished Achievement in Accounting Education Award


    The AICPA Distinguished Achievement in Accounting Education Award recognizes full-time college accounting educators distinguished for excellence in teaching and for national prominence in the accounting profession. The award has a dual function; to extend profession-wide recognition to the recipient and promote role models in academia. State CPA societies and individuals may submit nominations for the annual award. Self-nominations are not accepted. Nominations are due by 11:59pm Eastern Time on March 2, 2015.





    Webcasts recordings and materials are posted to if you would like to listen again or if you are not able to attend the live event. Conference recordings are available at aicpaconference
    . Unless otherwise noted, PFP Section-sponsored webcasts are offered free without optional, discounted CPE for PFP/PFS members.

    First Quarter Sophisticated Tax and Investment Planning Strategies
    February 5, 2-3:45pm ET
    Free | Discounted CPE

    Tax Power Hour: Annual Tax Season Debrief
    April 23, 1-2:45pm ET
    Free | Discounted CPE

    Save the Date! Decanting: Understanding the Income, Gift, Estate and GSTT Aspects
    May 14, 1-2:45pm ET
    Watch future issues of PFP News for a registration link.

    Upcoming Conferences:

    Tax Strategies for the High-Income Individual
    May 18-19
    Aria, Las Vegas
    Live | Virtual
    PFP/PFS members save an additional $100 on the early bird AICPA member price.

    Practitioners Symposium and Tech+
    June 7-10
    Orlando, FL
    Register. PFP/PFS members save an additional $100 on the early bird AICPA member price.

    Advanced Estate Planning
    July 20-22
    Salt Lake City, UT
    Live | Virtual PFP/PFS members save an additional $100 on the early bird AICPA member price.

    2016 Advanced Personal Financial Planning January 18-20 Bellagio, Las Vegas Live | Virtual PFP/PFS members save an additional $100 on the early bird AICPA member price.


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