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How to help clarify tax reform for your clients

The Tax Cuts and Jobs Act (TCJA) is the most significant overhaul of the U.S. tax code since 1986. Even the pros are still working on wrapping their heads around how the changes will impact tax planning and preparation. Some clients haven’t felt the impact of the tax reform – most new rules don’t impact the 2017 returns being filed right now. However, tax reform has been in the headlines enough to get most people thinking and wondering about how 2018 will change for them, and what they can do now to prepare.

For practitioners, new guidance and analyses are coming out daily. Clients, on the other hand, aren’t really interested in digging into the nuts and bolts of the new law. Instead, they’re interested in the big picture. Will they be better or worse off on their 2018 returns?

So, what can accounting and finance professionals do to help clarify tax reform for their clients?

Discuss 2018 Tax Filing Now

Tax season is one of the best opportunities to get in front of clients when taxes are front of mind. This year, it’s more important than ever. Discuss 2018 changes when your clients come in to collect their 2017 returns over the next couple weeks

Many tax software packages now provide a quick computation of how clients’ returns would have turned out if the TCJA took effect in 2017. If your software has it, it can be very useful for illustrating how the new law will impact them next year.

If your software doesn’t offer this feature, the client’s 2017 return is still an excellent place to start. Prepare your own analysis of what their 2017 return would look like under the new laws. Or, create a projection for what will change in 2018 and how it will affect their tax liability. Review these projections with your clients and discuss tax planning opportunities.

Create Value-Added Opportunities

Casual advice given during the tax preparation process might get tax reform on your clients’ radar, but few people act upon free, informal advice. So take this opportunity to engage clients in new, value-added tax planning and business strategy engagements.

Schedule an appointment after the deadline to talk about planning for the coming year. Although tax reform will affect virtually everyone in some way, pay particular attention to:

  • Clients who’ve historically benefitted from claiming significant unreimbursed employee expenses. They’ll lose those deductions in 2018, so they may want to talk to their employer about using an accountable plan for these deductions going forward.
  • Employers without an accountable plan for employee reimbursements.
  • Clients with significant investment expenses claimed on Schedule A. They may be interested in looking at lower-fee investment alternatives since they’ll lose this deduction going forward.
  • High earning individuals who are considering getting married. The TCJA eliminated the marriage penalty for everyone but taxpayers in the 37 percent tax bracket. Two high-earners who get married could see a significant tax penalty if their combined incomes push them into the highest tax bracket.

Communicate and Educate

Communicate with clients early and often via newsletters and emails to educate them about what tax reform could mean for them.

Consider setting up a tax reform resource center as a part of your company blog to provide thought leadership. This will help clients sort out what changes may actually mean to them and what they should be doing now. You can add to it as the Treasury Department releases guidance and technical corrections.

Conducting seminars for existing and potential clients is another good way to educate clients on crucial tax provisions. Design these seminars to address issues of interest to your niche clients, including high-net-worth individuals, contractors, agricultural businesses, pass-through entities, etc.

In the long run, many changes laid out in the recent tax reform could mitigate the tax burden for many small businesses and individuals. Help your clients assess the impact of these new rules and make plans that are right for them.


Accounting Principals

We're Accounting Principals--a leader in finance and accounting staffing. In fact, since 2010, we've been part of Adecco Group, a Global 500 company and leader in staffing services around the world. But this isn't staffing as usual. We take quite a different approach than most staffing agencies. A people-focused approach. We believe in forming real relationships with both our clients and our candidates. We want to understand the needs on both sides.