Although most of the continental U.S. is still feeling the crisp air of fall, next spring will be here soon—and with it, tax season. Monday, April 15, 2019, is the due date for the first returns to be filed under the sweeping changes made by the Tax Cuts and Jobs Act (TCJA). How can tax professionals (and their clients) prepare?
Stay the Course
There have been rumblings that Congress is working on a proposal for additional changes to the Tax Code changes to be implemented before the 2018 midterms. If these changes are passed by both the House and Senate, they could be effective before 2018 returns are due.
But until then, tax professionals should advise their clients to stay the course. This means continuing to make estimated payments, tracking income patterns, and occasionally checking withholdings to make sure taxpayers aren't having too much (or too little) withheld. Sending clients quarterly letters or emails reminding them to check their withholdings and make estimated payments in a timely fashion can avoid future surprises.
Cut Through the Misinformation
When the TCJA was passed, it was the subject of extensive news coverage—but with the many last-minute changes to the bill and the general complexity of the U.S. Tax Code, much of this news coverage contained outdated or inaccurate information. Attend continuing education courses and make sure you have the most up-to-date tax software to help cut through this misinformation and provide the most relevant guidance to your clients.
Select Some Sample Cases
Often, analyzing just one or two clients' tax situations can help you formulate more broadly applicable advice. For example, you can use a new homeowner's numbers to illustrate how the new SALT cap combined with the larger standard deduction affects the decision whether to itemize. Anonymizing any identifying details and including these examples in a newsletter to your clients can get them thinking about certain tax issues before April 15 rolls around.
Keep an Eye Out for New Regs
The IRS has continued to issue regulations to guide taxpayers and preparers who have questions about changes the TCJA made. One recent regulation scolded states that have tried to bypass the SALT caps and informed taxpayers in those states that it would scrutinize the substance, not just the form, of certain tax-deductible charitable contributions. By staying up-to-date as regulations are issued, you can provide your clients with relevant advice and avoid any potential missteps.