How to guide your clients through tax reform changes

 

The Tax Cuts and Jobs Act is the largest piece of tax reform legislation in 30 years and was signed into law on Dec. 22, 2017. Tax professionals are viewing this sweeping tax reform as both a challenge and an opportunity for their tax practice. Most of the legislation applies to tax year 2018, so tax professionals are busy learning about the new tax laws, answering client questions, preparing tax returns and providing tax planning advice. In this article, l discuss how tax professionals can learn about the tax law changes and leverage the new legislation to best service their clients and attract new ones.

Education

Tax professionals are subject matter experts and should make sure they’re fully up to speed on the legislation and the impact on their individual and small business clients. Intuit® ProConnect™ provides the following free resources for tax professionals to help them learn about these important tax law changes:

• Webinar-based training:
  • Five tax reform topics
  • Three tracks demonstrating tax reform functionality for each ProConnect professional tax product
• Tax Reform Resource Center: Detailed answers and articles on tax reform topics

Consider turning the vital tax law measures into layman’s language, and communicating the material to clients and prospects. This can be a service to existing clients and an avenue to grow your tax practice by educating prospects. Here’s some information you can share with clients and prospects:

• Tax Reform Deductions Infographic
• Infographic: How Tax Reform Impacts Your Clients
• Client letter: Tax Reform: What Clients Should Know (PDF)
• Client letter: W-4 Essentials (PDF)
• Policy Highlights

Various methods of communication include:

• Social media
• Client newsletters
• Post information on firm website
• Meet with clients
• Conduct presentations, either in person and/or via webinar

Tax Planning

You may think about expanding your practice beyond providing just tax compliance services and into the realm of tax planning. This new tax reform legislation presents the perfect opportunity. Tax professionals can look at their clients’ 2019 tax situations and determine the impact and planning opportunities/tax savings the tax reform measures provide, such as the following:

• Complete Form W-4 to make sure withholding allowances are right (standard deduction and child tax credit increased; personal exemption eliminated; and other changes).
• Review 2018 estimates with your small business/self-employed clients (new 20 percent deduction on qualified business income and lower corporate tax rate).
• Consider bunching itemized deductions and taking the standard deduction every other year for optimization.
• Plan for new alimony rules that take effect in 2019.
• Plan for capital property purchases (bonus depreciation, Sec. 179 deduction and vehicle limits have all increased).
• Optimize tax savings through choice of entity (tax rates have been reduced for sole proprietorships, flow-through activities and C corporations).

One More Step

Think about this broad-based tax reform as an opportunity to enhance your standing as your clients’ trusted advisor. To set yourself apart from the competition, you may decide to circulate and educate your clients and prospects about the latest tax law changes. You may also look their individual tax situations, crunch the numbers and explore planning opportunities that surface to save tax dollars.

Resources

• Tax Reform Resource Center
• Training Center
• IRS tax reform webpage
• Joint Explanatory Statement
• Legislative text
• 5 Tips for Better Tax Planning
• Building Service Models for Handling Uncertainty and Tax Reform

Editor’s note: This article was originally published on Feb. 22, 2018, and republished with updates on Jan. 2, 2019.

Comments are closed.