Tax the Rich..Tax the Rich.. Tax the Rich… Again!

Aegis Group Holdings, Inc a Colorado Company
8400 East Prentice Avenue, Suite 660 Denver, CO 80111
T: 303-770-3664 info@aegiscompanies.com
Copyright © 2009-2010. All rights reserved.
Tax the Rich..Tax the Rich.. Tax the Rich… Again!
As a continuation of my last article, “tax the Rich…Tax the Rich…Tax the Rich…,” I asked Brian
Seifert, CPA to fill in some additional tax changes that would affect our clients as we approach
the year end and look forward to 2010. Brian is a new Aegis Council member who is helping
our clients prepare for the onslaught of new taxes by identifying tax planning opportunities,
assist the clients taking advantage of their planning opportunities then preparing the tax returns
as part of the Aegis Council Tax Planning Package. Every Aegis Council member has
undergone a thorough background check and peer reviews to insure only the best and brightest
professionals are provided to our clients.
Brian wrote:
While the new law tax changes in the health reform legislation and the hiring legislation were the
most significant developments in the first quarter of 2010, many other tax developments may
affect you, your family, and your livelihood. These other key developments in just the second
quarter of 2010 are summarized below. These and other changes should be reviewed carefully
with your Planning Team to assess how they affect you and how to minimize their negative
impact on your cash flow.
Deadline extended for closing home purchase to qualify for homebuyer credit.
Relief has been provided to taxpayers who couldn't meet a key June 30, 2010, closing date for
qualifying for the homebuyer credit. In general, both the regular first-time homebuyer credit of
$8,000 and the reduced credit of $6,500 for long-term residents expired for homes purchased
after Apr. 30, 2010. However, if a written binding contract to purchase a principal residence was
entered into before May 1, 2010, the credit could be claimed if the purchase closed before July
1, 2010. Under the relief measure, if a written binding contract to purchase a principal residence
was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before
Oct. 1, 2010. Thus, this extension allows home buyers who signed a contract no later than the
April 30th deadline to complete their closing by the end of September.
Guidance addresses tax breaks for hiring new employees.
Employers are exempted from paying the employer 6.2% share of Social Security (i.e., OASDI)
employment taxes on wages paid in 2010 to newly hired qualified individuals. These are
workers who: (1) begin employment with the employer after Feb. 3, 2010 and before Jan. 1,
2011, (2) certify by signed affidavit, under penalties of perjury, that they haven't been employed
for more than 40 hours during the 60-day period ending on the date the individual begins

employment with the qualified employer; (3) do not replace other employees of the employer
(unless those employees left voluntarily or for cause), and (4) aren't related to the employer
under special definitions. The payroll tax relief applies only for wages paid from Mar.
19, 2010 through Dec. 31, 2010.
Employers may qualify for an up-to-$1,000 tax credit for retaining qualified individuals. The
workers must be employed by the employer for a period of not less than 52 consecutive weeks,
and their wages for such employment during the last 26 weeks of the period must equal at least
80% of the wages for the first 26 weeks of the period.
The IRS has issued guidance on these tax breaks in the form of frequently asked questions.
They carry valuable information on subjects such as the scope of the exemption, how it interacts
with other tax breaks, and when an employer must receive the employee's certification of former
unemployment status. For example, the IRS explains that the exemption and credit can be
claimed for a new employee replacing a downsized employee.
Detailed guidance released on new small business health care credit.
The IRS has issued detailed guidance on the small employer health insurance credit created by
the recently-enacted health reform legislation. Under the new law, effective for tax years
beginning after Dec. 31, 2009, an eligible small employer (ESE) may claim a tax credit for non-
elective contributions to purchase health insurance for its employees. An ESE is an employer
with no more than 25 full-time equivalent employees (FTEs) employed during its tax year, and
whose employees have annual full-time equivalent wages that average no more than $50,000.
However, the full credit is available only to an employer with 10 or fewer FTEs and whose
employees have average annual full-time equivalent wages from the employer of not more than
$25,000. The new guidance adopts a liberal approach to the new law's requirements, including
three alternative methods for figuring total hours of service (important for determining how may
FTEs an employer has), and also explains how small employers claim the credit if their State
provides a credit or subsidy for employee health coverage. The IRS has released a state-by-
state table of average health insurance premiums for the small group market for
the 2010 tax year. The table is needed to calculate the credit for this year.
Guidance issued on new under-age-27 rule for health coverage of children.
The IRS has issued guidance on the tax treatment of health coverage for children under age 27
under the new health reform law. The new under-age-27 rule, which went into effect March
30,2010, applies broadly to employer-provided coverage or reimbursements, cafeteria plans,
flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), voluntary

employees' beneficiary associations (VEBAs), and the above-the-line deduction for a self-
employed individual's medical care insurance costs.
Availability of FICA exception for medical residents to be resolved.
The Supreme Court has agreed to review a 2009 decision of the Court of Appeals for the Eighth
Circuit, which upheld the validity of regulations that generally prevent medical residents from
qualifying for the FICA student exception. Under these regulations, an employee includes a
medical resident who works 40 hours or more for a school, college or university is not eligible for
the student exception. The Supreme Court will now decide their validity. Its decision will have
important ramifications for the many teaching hospitals and their residents.
States address estate planning uncertainty.
As of now, there is no estate or generation-skipping transfer (GST) tax for individuals who die
this year. There are issues as to how formula clauses in wills and trusts using estate or
GST taxterms (e.g., “the applicable exclusion amount,:“ or “the marital deduction“) will be
construed, if the decedent dies in 2010. Several states have addressed this situation by
enacting laws providing a special rule of construction under which formula clauses that refer to
certain estate and GST tax terms generally will be construed as referring to the federal
estate tax and GST tax laws which applied to estates of decedents dying on Dec. 31, 2009.
These statutes could impact the amount that will pass under one's will to a person's spouse and
children.
Deadline extended for retirement plans in federally declared disaster areas in eight States.
The IRS has administratively extended to July 30, 2010, the April 30, 2010, deadline for
restating affected pre-approved defined contribution plans and, if applicable, for submitting
determination letters to the IRS, and the Code Sec. 401(b) remedial amendment period for
these retirement plans. The relief applies to sponsors of defined contribution plans that were
affected by the storms and other severe weather in counties in Alabama, Connecticut,
Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia that were
federally declared disaster areas in the period from March 1 through May 31, 2010.
Therapeutic Discovery Project Program implemented.
The IRS has established the guidelines for applying for the new Therapeutic Discovery Project
Program created by the recently enacted health reform legislation. The program will
provide taxcredits and grants to small firms that show significant potential to produce new and
cost-saving therapies, support good jobs and increase U.S. competitiveness. Small firms may

apply for certification for tax credits or grants under the program on Form 8942, which must be
postmarked no later than July 21, 2010.
Temporary regulations fill in statutory gaps on new indoor tanning tax.
The IRS has issued temporary regulations on the health reform's legislation's new 10%
excise tax on indoor tanning services provided on or after July 1, 2010. The regulations address
practical considerations that may not have been contemplated when the law was drafted. For
example, they addresses prepayments for tanning services and services provided as part of a
gym membership.
And T.J. has a critical addition so let’s not forget:
Required Minimum Distributions “RMDs”
In 2008, amidst the harrowing days of the financial and economic meltdown, President Bush
signed into law the Worker, Retiree and Employer Recovery Act which, amongst its many
designated stimulus provisions, allowed retirees over 701/2 to forgo taking required minimum
distributions “RMDs” from 401(k), IRAs and other retirement plans for 2009. The idea was to
allow the retirement accounts time to recover losses suffered as the global financial market
collapsed. But now Congress feels that you have all recovered sufficiently and you will be
required to start taking RMDs in 2010. A failure to start or resume taking RMD carries
significant penalties so this a critically important rule to not violate.
However, and there is always a however in the tax code, you can avoid RMDs permanently by
converting you retirement accounts into a Roth IRA. And, remember that if you do your
conversion in 2010 you can spread the tax liability of the conversion over 2011 and 2012. The
conversion to a Roth IRA can be done in the form of a self directed account so that you can take
control of your investments and invest directly in stocks, bonds, annuities, mutual funds or real
estate of your choice.
Alternatively, if you will not need the money in your retirement account and would like to donate
it to charity you have only until 12/31 of 2009 to do this. Thereafter, Congress has decided that
no more IRA monies should go to charities. A gift of an IRA to charity can be accomplished
using a Donor Advised Fund (“DAF”) which will allow you to retain advisory control over when
and how the funds are distributed. Additionally, a DAF allows the funds to be reinvested so they
continue to grow creating a larger benefit for your charities of choice. DAFs are like having your
own public charity without all of the cost or administration associated with running a charity.
See AegisWorldFund.org for more information.

Final Note:
The tax policy and our corresponding strategies continue to evolve as our government faces the
reality of paying for a $1.4 trillion national debt when unemployment hovers around 16.5%
resulting in lower tax revenue. At the same time government expenditures continue to rise and
are predicted to continue to rise. Aegis Council is your financial quarterback and we continue to
work with advisors, CPAs, tax attorneys and other trained professionals to cultivate and expand
the pool of talent our clients have at their disposal. Contact Aegis Council now and be smart
about your preparation for the coming onslaught of tax changes and take action in 2009 while
still can.
___________________________________________________________
More information on Thomas Agresti can be found here: http://aegiscompanies.com
T.J. Agresti, J.D., LL.M, CEO
Founder and Chairman of the Board, Aegis Holdings, Denver, Colorado
Thomas Agresti (JD LLM) from Denver, Colorado began a successful career as a tax attorney
after finishing an extensive and well-planned education that included the University of Maryland,
Seton Hall University School of Law, University of Parma School of Law in Italy, and University
of Denver School of Law. He is currently registered with the Bar of Colorado.
In law school he focused on taxation and transactional law. He also went to Italy to understand
the intricacies of international law and finance, again with a focus on taxation and transactions.
He then took his taxation skills to the ultimate level receiving a Masters in Taxation from the
University of Denver School of Law. He immediately became a highly sought after professional
with a rare educational background. He chose to work with a large multinational public
accounting firm, due to the extensive tax and transactional experience he could gain in a
condensed time period.
While a taxation specialist for a "Big Six" international accountancy firm, he specialized in
domestic and international strategic tax planning or, quite simply, how to reduce a client's
overall tax burden. His responsibilities also included financial and estate planning, income, gift,
and estate tax reduction, compliance for individuals, trusts, and estates, partnerships,
corporations, and tax-exempt entities. After leaving public accounting he practiced tax law with a
boutique law firm before forming his own firm. He has lived and worked overseas representing a

broad range of clients. He has practical experience planning and implementing multi-national
transactions, sophisticated wealth transfer planning, sophisticated life insurance structures,
captive insurance, private equity and structured debt instruments.

Tax the Rich..Tax the Rich.. Tax the Rich… Again!

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Tax the Rich..Tax the Rich.. Tax the Rich… Again!