The Tax Cuts and Jobs Act (TCJA) is probably the most vital overhaul of the U.S. tax code since 1986. Even the professionals are nonetheless engaged on wrapping their heads round how the modifications will influence tax planning and preparation. Some shoppers haven’t felt the impression of the tax reform – most new guidelines don’t impression the 2017 returns being filed proper now. Nevertheless, tax reform has been within the headlines sufficient to get most individuals considering and questioning about how 2018 will change for them, and what they will do now to organize.
For practitioners, new steerage and analyses are popping out day by day. Shoppers, however, aren’t actually all for digging into the nuts and bolts of the brand new regulation. As an alternative, they’re within the huge image. Will they be higher or worse off on their 2018 returns?
So, what can accounting and finance professionals do to assist make clear tax reform for his or her shoppers?
Talk about 2018 Tax Submitting Now
Tax season is likely one of the greatest alternatives to get in entrance of shoppers when taxes are entrance of thoughts. This yr, it’s extra necessary than ever. Talk about 2018 modifications when your shoppers are available to gather their 2017 returns over the subsequent couple weeks
Many tax software program packages now present a fast computation of how shoppers’ returns would have turned out if the TCJA took impact in 2017. In case your software program has it, it may be very helpful for illustrating how the brand new regulation will impression them subsequent yr.
In case your software program doesn’t supply this function, the shopper’s 2017 return continues to be a superb place to start out. Put together your personal evaluation of what their 2017 return would seem like underneath the brand new legal guidelines. Or, create a projection for what is going to change in 2018 and the way it will have an effect on their tax legal responsibility. Evaluation these projections together with your shoppers and talk about tax planning alternatives.
Create Worth-Added Alternatives
Informal recommendation given in the course of the tax preparation course of may get tax reform in your shoppers’ radar, however few individuals act upon free, casual recommendation. So take this chance to interact shoppers in new, value-added tax planning and enterprise technique engagements.
Schedule an appointment after the deadline to speak about planning for the approaching yr. Though tax reform will have an effect on nearly everybody not directly, pay specific consideration to:
- Shoppers who’ve traditionally benefitted from claiming vital unreimbursed worker bills. They’ll lose these deductions in 2018, so they could need to speak to their employer about utilizing an accountable plan for these deductions going ahead.
- Employers with out an accountable plan for worker reimbursements.
- Shoppers with vital funding bills claimed on Schedule A. They could be concerned about taking a look at lower-fee funding options since they’ll lose this deduction going ahead.
- Excessive incomes people who’re contemplating getting married. The TCJA eradicated the wedding penalty for everybody however taxpayers within the 37 % tax bracket. Two high-earners who get married might see a big tax penalty if their mixed incomes push them into the very best tax bracket.
Talk and Educate
Talk with shoppers early and sometimes by way of newsletters and emails to teach them about what tax reform might imply for them.
Contemplate establishing a tax reform useful resource middle as part of your organization weblog to offer thought management. It will assist shoppers type out what modifications may very well imply to them and what they need to be doing now. You possibly can add to it because the Treasury Division releases steerage and technical corrections.
Conducting seminars for present and potential shoppers is one other good approach to educate shoppers on essential tax provisions. Design these seminars to deal with problems with curiosity to your area of interest shoppers, together with high-net-worth people, contractors, agricultural companies, pass-through entities, and so forth.
In the long term, many modifications specified by the current tax reform might mitigate the tax burden for a lot of small companies and people. Assist your shoppers assess the impression of those new guidelines and make plans which might be proper for them.