Essential Tax Topics for Year-End

eReview #671423.1.0Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. © 2013 FMR LLC. All rights reserved.

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Welcome & meet today’s presenters

Lauren Brouhard, Senior Vice President, Retirement

Ken Hevert, Vice President, Retirement Products–

– Carlos Cartaya, Vice President, Tax

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Today’s Agenda

• Year End Tax Planning and Tax Law Changes

• Tax Efficient Investing

• Year End Options Ideas to Consider

• Mailing dates for Tax Forms and Statements

• Additional Fidelity Tax Resources

*Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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Wealth Planning OverviewThis Wealth Planning Overview provides a simplified view of a complex and personal topic—your plans for your financial future. Please

look it over, think about your goals, and bring it along when you have a conversation with your Fidelity Investment Professional

YOUR FAMILY

Investment Strategy

• Asset Allocation

• Tactical Allocation

• Asset Location

• Tax-Efficient Investing

• Taxable Savings Strategy

Retirement Planning

• Savings Strategy

• Income Strategy

• Personal (taxable, IRA, annuity)

• Workplace Investments

• Benefits and Social Security

• Health Care/ Long-Term Care

Income Protection

• Disability

• Premature Death Protection

• Outliving Income

AssetProtection

• Estate Planning

• Wills

• Trusts

• Wealth Transfer

• Charitable Giving

Family Assistance

• Education

• Living Expenses – Children

• Assisting Parents

• Living Expenses – Parents

• Health Care/ Long-Term Care

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Year-End Tax Planning Challenges & opportunities to consider for 2013

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Current events that may impact you• American Taxpayer Relief Act of 2012

• Increased tax rates for higher income individuals

• Patient Protection and Affordable Health Care Act of 2010

• 3.8% surtax on capital gains and dividend income for taxpayers with the following modified adjusted gross income (MAGI):

– Individuals > $200,000 (MAGI)

– Joint filers > $250,000 (MAGI)

• 2014 tax season to start later following government closure

• Current estimation is a delay of approximately one to two weeks – could impact timing of refund checks

For Illustrative purposes only

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What’s staying the same:• Marginal income tax rates for those with MAGI under $200K (single) and $250K (married, filing joint returns)• Tax relief provisions – marriage penalty relief, child tax credit, American Opportunity Tax Credit and lower capital gains

tax rates - remain

What’s new or changing:• The alternative minimum tax (“AMT”) exemption is permanently patched (with inflation adjustments)• The employee share of payroll taxes will return to its 2010 level • People with MAGI greater than $200,000—$250,000 for couples—may be impacted by a new Medicare surtax on net

investment income. Taxpayers with earned income above $200,000—$250,000 for couples—will also pay a higher Medicare payroll tax.

• Anyone with an AGI above $250,000—$300,000 for married couple filing jointly—may have their personal exemptions and itemized deductions reduced.

• Taxpayers with taxable income greater than $400,000—$450,000 for couples—should get ready for a new 39.6% top marginal income tax rate and higher qualified dividend and long-term capital gains rates.

What’s on the horizon• The Foreign Account Tax Compliance Act

2013 Tax Landscape Overview

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What is the Foreign Account Tax Compliance Act?What?

• A new tool for the IRS to use in its efforts to ensure that U.S. taxpayers report all of their income – including income that is paid into an account outside the U.S.

• FATCA is an adjunct to existing reporting requirements – it does not replace existing U.S. tax withholding and reporting requirements

Why?

• To help prevent tax evasion by providing greater transparency to the IRS on income paid to U.S. residents

Who?

• FATCA is far reaching and can touch any investor or financial institution that has any contact, direct or indirect, with the U.S.

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Tax Efficient Investing•Tax-Loss Harvesting and Offsetting Gains

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Harvesting Tax Losses - How it works

Sell an investment that has lost value to help reduce capital gains elsewhere in your portfolio.

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Harvesting Tax Losses - How it works

For illustrative purposes only.

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Harvesting Tax Losses - How it works

Good recordkeeping is critical (purchase timing and cost basis).

Watch your asset allocation. Beware of “wash sales.”

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Tax Efficient Investing

• Roth IRA Conversions

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Fidelity’s Point of View on Roth Conversion

Source: Fidelity Viewpoints®

Nine compelling reasons to consider a Roth, eReview# 643247.1.0

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Roth IRA Conversion Considerations

• You want more flexibility managing retirement withdrawals

• Expect the income tax rate during the withdrawal period to be higher than it is currently

• Don’t plan on taking withdrawals from the converted assets for at least five years

• Have retirement assets you want to leave free of income taxes to heirs

• Expect to be in a lower tax bracket during retirement

• Do not have the money to pay the taxes on the conversion

• Plan to leave eligible account balances to a tax-exempt charity as part of your estate

• Anticipate filing for federal financial aid in the near future

A Roth IRA conversion may make sense if:

A Roth IRA conversion may not make sense if:

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Converting To A Roth IRAHow It Works

The Slaters:

Married; Ages 57 and 56; expect to retire in 10 years

Goal: Evaluate whether a Roth IRA conversion may make sense

$177,500 current gross income

Expect about $38,000 in deductions

28% federal tax bracket and no state income taxes; do not expect

taxes to rise when they take withdrawals

Income expected to slightly grow with time (1% more than inflation)

$480,000 in pretax retirement savings in rollover IRAs from previous

employers

Could afford to pay up to $50,000 in taxes on a Roth conversion with

assets from a taxable account

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Additional Year End Ideas to Consider• Accelerate Payments and Bunch Deductions in Years with

Higher Income

• Reduce Taxable Income

• Asset Location

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• Make an extra mortgage payment

• Pay your estimated state tax

• Pay your real estate taxes in advance

Accelerate payments and bunch tax deductions in years with higher income

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1. Contribute more to your qualified plan

2. Make a tax deductible IRA contribution (if eligible)

3. Contribute to your Health Savings Account - HSA (if eligible)

4. Consider Charitable Giving

5. Utilize Your Annual Gift Exclusion

5 Ways to Help Reduce Taxable Income

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Asset Location

For Illustrative purposes only

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Mailing Dates for Tax Forms & StatementsWhat to expect and when

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The IRS deadline is February 18 – here is when you can expect to receive tax forms from FidelityTax Form Type of Account Last Mailing Date

(subject to change)

5498 and 1099-RFidelity Mutual Fund retirement accounts

Brokerage retirement accounts

January 31, 2014

January 31, 2014

Tax Reporting Statement

(May include forms: 1099-DIV, 1099-INT, 1099-OID, 1099-B, 1099-MISC)

1. Fidelity Mutual Fund accounts and Brokerage accounts holding:

• Mutual Funds, Equities

If no adjustments to tax lot data are anticipated.

January 27, 2014

2. Any remaining Fidelity Mutual Fund accounts or Brokerage accounts holding:

• Mutual funds, Equities, Fixed income securities, Real estate investment trusts (REITs)

If no adjustments to tax lot data are still anticipated.

February 11, 2014

3. All remaining Brokerage accounts (except as noted in 4 & 5, below) –holdings may include:

• Non Fidelity mutual funds, Foreign and domestic Equities, Fixed income securities, Real estate investment trusts, Unit investment trusts (UITs), Original issue discounts (OIDs), Widely held fixed investment trusts

February 18, 2014

4. Brokerage accounts holding securities incorporating late adjustments February 28, 2014

5. Special UIT Tax Statement Mailing - Brokerage accounts holding Unit Investment Trusts

March 14, 2014

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What’s new & different about the Tax Reporting Statement

• Other Income reported on the 1099-MISC was previously a separate mailing - will now be part of the Tax Reporting Statement

• Based on customer feedback, sub-total columns have been added for Wash Sale & Gain/Loss figures to the 1099-B

For illustrative purposes only

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What are the most common reasons for reclassification?

• A mutual fund pays a dividend

100% = non-qualified dividend

• Reclassification occurs, then

60% = return of capital40% = qualified

dividend • Cost basis is adjusted –revised tax forms are sent to customer and IRS

Reclassification complete

Category Type of Reclassification

Equities Qualified dividend to return of capital

Foreign Equities Non-qualified dividend to qualified dividend

Mutual Funds • Non-qualified dividend to qualified dividend• Non-qualified dividend to qualified dividend, different

capital gains, or return of capital• Foreign tax paid gross up

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Fidelity ResourcesHelping you prepare for the 2014 filing season

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Fidelity’s Tax Center: It’s always tax time

Use Fidelity’s Tax Center to:

• Find answers to your top tax questions

• Review educational tools

• Locate resources for filing your taxes, including a TurboTax discount

For illustrative purposes only.

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Leverage Fidelity’s Viewpoints

• Read our Viewpoints special report: Take on taxes

• Locate thought leadership pieces that can help you identify ways to save and invest – all year long, not just during tax season

For illustrative purposes only.

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Review your year-to-date tax information

Go to Fidelity.com:

• Select Accounts & Trade, then Portfolio

• Use Select Action menu and choose Tax Info (Year-to-Date)

For illustrative purposes only.

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Upcoming Webcasts and Videos

1. Income Investing (webcast) – December 12, 2013

2. Getting Ready for Tax Season (recorded webinar) - December 16, 2013

3. Defer, manage, & reduce: How to invest tax-efficiently

4. Current Market Perspectives, Fidelity Viewpoints webcast with Jurrien Timmer - Wednesday, January 22 at 4 PM EST

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Take the next steps

Click Fidelity.comto get more information and insight on taxes

Call 800-544-6666to speak to one of our knowledgeable representatives

Visit a Fidelity Investor Centerfor a consultation with one of our investment

professionals

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Q & A

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Important Information

Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. © 2013 FMR LLC. All rights reserved.

The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.