Tax “Reform” and the Impact on Your Finances
Through much of 2017, there were hints at and whispers about the possibility of dramatic changes to the American tax code. “A complete overhaul” – “More significant than the Reagan-era reforms” – “The biggest re-envisioning of the tax laws in a century” – these were the sorts of things that we heard from the pundits.
Oddly, though, we got NO details from Congress. This fall, the Republican majorities in the House and Senate worked up two different bills in near secrecy, not following the open and accountable procedures that have traditionally accompanied such far-reaching legislation. Thrown together in a hurry, and passed on party-line votes with no substantial debate or public hearings, the resulting law is … well, perhaps underwhelming. Certainly not the “complete overhaul” we were led to believe was coming.
Unless you happen to be immensely wealthy, that is. Trump and his one-percenter friends will see their tax bills drop significantly, while the rest of us will get almost nothing – and even that is only temporary (here’s a summary from The Guardian). And the damage done or promised to the social safety net is incalculable. We fear for our collective future, and hope that a more reasonable Congress can undertake the hard work of setting this all right – and perhaps even provide us with the serious overhaul of the entire tax system that we thought we might get. We will do what we can to help elect legislators that will take on that hard work, and we hope you’ll join us!
In the meanwhile, we do have some ideas about how to help in the short-term. While we aren’t tax experts ourselves, we know how much of an impact the financial planning and investment management recommendations we make can have on your tax situation. As in the last few years, in order to help get accurate information out into the world, we’ve been able to make available a couple of “Key Financial Data” documents.
As you prepare your 2017 taxes, you may find this summary (free PDF download here) of the important numbers useful – it has all the tax brackets, retirement plan contribution limits, and credits / deductions / exclusions that you might qualify for. We hope that this data will help get you ready for the tax filing process – whether you do that yourself, or hire a professional. And we hope that you’ll take a moment to review your retirement plan contributions for 2017, to make sure that you’ve made the maximum allowable contributions before the deadline.
And as you try to plan for your 2018 taxes, this new summary (free PDF download here) has all the same sort of information, as our expert strategic partners at Horsesmouth have compiled them. If and when significant changes are made that impact the current year’s tax planning, this document will be updated and we’ll be sure to post an announcement about that here.
If you’re planning to work with a tax advisor this year, we hope you’ll share these Key Financial Data documents with them – so that they know who we are, and can work with us throughout the coming year. After all, the more closely your financial professionals can coordinate with one another, the better the job we can all do on your behalf. And we would love it if you’d share this with everyone you know who’s dreading the tax prep process this year, or worried about the changes for the coming year; maybe it can help make the process a little easier for them, too.
If you have specific questions about your particular situation, or general comments or concerns, please don’t hesitate to contact us. We’re happy to help however we can!