The recently-passed Tax Cuts and Jobs Act has generated a slew of new opportunities for business gurus and financial professionals, but too few are taking advantage of the new tax regime in the way they could be. The positive side effects of the new tax bill for accountants are wider than many know, and with the right strategy, you could be saving your firm serious dollars in no time with relatively minor adjustments.
Here are some of the opportunities from the new tax bill you should be following up on, and the key facts you’ll want to keep in mind as you plot out your future in the market.
Understanding the impacts of the bill
The Tax Cuts and Jobs Act is packed full of dizzying details that will take quite some time to fully wrap your head around, but the basics of the bill are easy to digest, and smart accountants should have little trouble understanding the most essential opportunities now laid bare before them. Massive changes to the overarching federal tax system can seem intimidating, but keep these essential tips in mind and you’ll do fine.
First and foremost, you can’t forget that this bill will generate certain winners and losers, and that you can be positioning yourself to do business with those who are about to receive a major gust of wind in their sails. Luxury developers, for instance, are set to gain huge benefits from the recent tax reform efforts that could unleash a splurge of spending in their industry. In cases such as this, companies ready to invest heavily in their future thanks to their new tax breaks will need smart accountants to ensure their money is well-spent.
Familiarize yourself with which industries will be soaring thanks to the tax breaks they’ve gotten from the tax reform efforts, and you’ll be one step ahead of your competitors. If your existing clients are set to receive serious windfalls from the government, you should also use this opportunity to push them to expand their investment portfolios and savings accounts. After all, an essential part of your job is reminding wealthy clients that sometimes the best time to save is immediately after a boon’s been dropped at your door.
The recent changes to the tax code were extensive, and seriously shuffled up the way mortgage rates and charitable contributions were handled. These are both ideal topics to bring up with clients who are interesting in leveraging the recent tax bill to chase new opportunities.
Get the most out of your gifting
Individuals who are looking to do more gifting will be pleased to hear that the new tax bill makes positive changes to the charitable contributions regime. Significantly more can now be exchanged without having to pay taxes thanks to adjustments to estate and gift taxes, and the increased exemptions your clients can now enjoy should be brought up with them immediately.
Take an extensive dive into the new gifting opportunities that await following the Tax Cuts and Jobs Act to make sure you’re doing the best possible job for your clients. Check websites that offer a free criminal background check to make sure the gifts are legal. While state specific considerations must always be taken into mind, efforts to enable more gifting opportunities are perhaps one of the most sizable parts of the recent tax reform.
Finally, accountants should be addressing opportunity zones in their long-term planning when it comes to adjusting to the new tax regime. The Treasury and IRS recently announced the first slew of opportunity zones that were brought about by the Tax Cuts and Jobs Act, and firms that don’t get a head start preparing their opportunity zones strategy will soon find themselves left in the dust. Low-income communities in particular are set to receive a huge stimulus shot from the new tax regime, so catering to your clients in opportunity zones should be a major blip on your radar right now.
Of course, you’ll need to do long-term planning as well. Not all of these newly announced opportunity zones are spread across the fifty states, for instance; at first, only 18 or so states will be impacted by these directly. Even if your firm isn’t directly doing business in one of the areas in or near an opportunity zone, you can nonetheless start preparing for their additional expansion in recent years. Accountants who aren’t planning for the long-term will never be able to make the most of the opportunities presented by the new tax bill.
In the end, a comprehensive understanding of the new tax bill will serve your firm well when it comes to plotting your future course. Accountants will want to keep their finger on the pulse of Washington, however, as sudden political changes could bring in a slew of new opportunities that they can cash in on.
Gary Eastwood is a CPA licensed senior accountant from Seattle, Washington. He received his CPA license from the Washington State Board of Accountancy in 2001 before relocating to Onawa, Iowa in 2008. Over more than 15 years of accounting experience, Gary has worked with multinational health service providers and independent CPA firms. He has a proven ability in dealing with business clients from a variety of backgrounds as well as leading companies to greater efficiency and profitability. He is familiar with both US GAAP and China GAAP.