PWA, LLC - Tax Relief for 2011 and 2012

Tax Relief for 2011 and 2012:

Tax Relief for 2011 and 2012

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3 The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 signed on December 17, 2010. This reprieve is only temporary, as most of the new tax provisions expire at the end of 2012. This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation.

Individual income tax rates:

4 Individual income tax rates Rates will remain at the 2010 levels for 2011 and 2012 for all taxpayers. The lowest marginal tax bracket 10 % The highest rate is 35% Capital gains and qualified dividends Long-term capital gains and qualified dividend rates will remain at a maximum tax rate of 15 percent. Taxpayers in the 10-percent and 15-percent brackets qualify for a 0 % tax rate on all or some of their capital gain income.

Itemized Deductions and Personal Exemptions :

5 Itemized Deductions and Personal Exemptions Taxpayers may use their itemized deductions and personal exemptions regardless of their income. A repeal of the itemized deduction and personal exemption phase outs will continue through 2012. Marriage Penalty The standard deduction for married couples who file jointly will continue to be double the deduction for single filers through 2012.

Alternative Minimum Tax :

6 Alternative Minimum Tax AMT exemptions were increased Personal credits can be used to offset AMT liability for 2010 and 2011 Charitable IRA Direct transfers for $100,000 from an IRA to Charity for 2010 and 2011. Transfers made in January 2011 can be treated as 2010 transfers.

Payroll Tax Reduction :

7 Payroll Tax Reduction In 2011, payroll taxes will be reduced 2 percent Energy-efficient Improvement Credit Credit extended through 2011, but only at $500 Business Tax Extenders Bonus depreciation Section 179 expensing Off the shelf software expensing Payroll tax forgiveness 11 other industry targeted credits

Other deductions:

8 Other deductions Student loan interest Coverdell education savings deductions State and local sales tax Higher education tuition, and teacher’s classroom expense Other Credits The refundable Child Tax Credit The expanded Child and Dependent Care Credit American Opportunity Tax Credit (formerly the Hope Credit)

Estate and Gift Tax:

9 Estate and Gift Tax The new act reunifies the gift and estate tax exemption and increases it to $5 million per taxpayer. Lifetime gifts are still $13,000 annually, per donee. Executors for decedents who died in 2010 have the choice of: A $5 million exemption and a 35% top estate tax rate, or No estate tax, but a cap on an income tax basis increase for estate assets. A new provision: Portability provision, which permits a spouse to apply the unused portion of a deceased’s spouse’s $5 million exemption. 2011 is a good time to have your estate planning documents reviewed.

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10 Identify and reconfirm short-term and long-term goals Maintain customized investment strategies that supports individual objectives Provide guidance through fluctuating markets, avoiding emotion-driven mistakes Deliver access to a broad selection of diversified investment strategies Provide advice during any market crisis: the upcoming bull market and the next market dip Provide information and education you can understand so you can make good investment decisions We Work With You To . . . Finally, if you have questions or desire to talk through your situation, please, contact any of us.

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11 This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation.