August 9, 2018
Tax Reform and You
Tax Reform and You
By Wilke & Associates, CPAs
Anyone who is following developments of the TCJA (Tax Cuts and Jobs Act) of 2017 is already aware of
AMT exemption increases
Limits on excess business losses
The new 20% deduction for certain qualified business income
Limits imposed on home mortgage interest – grandfathered vs. new debt
Limits on charitable contributions
Repeal of some miscellaneous deductions
Repeal of moving expense deductions and implementation of making moving allowances taxable
Estate tax exemption increases
Standard deduction raised
Changes in individual tax rates
According to professional outlets, this legislation was designed to theoretically make tax filing simpler by lowering the tax rates and encouraging taxpayers to choose the standard deduction versus itemizing. Additionally, there are immediate short-term advantages through 2025 and long-term advantages beyond 2025 should TCJA be made permanent that impact GDP, wages, and job creation. Noted disadvantages are an increased national deficit due to decreased tax revenue and TCJA will presumably benefit the top 1% of taxpayers and big business.
How can you apply this information, other changes that have already been made public, and future rules updates?
Watch vlogs or read reliable professional articles. Many nonprofits and professional organizations report developments on tax legislation. For instance, KPMG and Ernst & Young have groups that focus solely on tax reform. Many articles are written at a non-technical level that are relatively easy to understand and will lead you to formulate questions to evaluate your financial situation. The AICPA (American Institute of Certified Public Accountants) is another good source for updated information.
Attend workshops and seminars. It will be very easy to find a lunch and learn and breakfast break hosted by local CPAs, attorneys, universities, and financial advisors near you. There is typically a Q&A session where you can develop your newly acquired knowledge or simply begin to understand how you may apply this information personally. Through reading, watching, or attending the more you know, the better your ability to have a fruitful and meaningful conversation with your accountant or financial advisor when you meet for estate or tax planning.
The real question is, how does it affect YOUR estate and income tax liability? As with any legislation and rules updates, it is to your advantage to continually review your tax plan. Make it a habit to meet consistently with your CPA or financial advisor and prepare to make timely decisions in response to any new tax reform developments.
If you are in need of tested advice from an experienced CPA, we invite you to meet David Wilke at our September 20 Lunch and Learn by registering here. Enjoy a complimentary lunch, and be prepared to add to your knowledge base as you participate in the discussion of “the most sweeping overhaul of the tax system in 30 years.”