The Tax Cuts and Job Act was signed into law by President Donald Trump on December 22, 2017. This massive tax reform act, an attempt to encourage economic growth, will have wide-reaching effects on all Americans across various income levels. While the majority of middle-income Americans will enjoy a noticeable break come tax time, investors have an important responsibility to be proactive in educating themselves and preparing for the effects this tax reform bill will have on them personally. If you haven't already done your homework here, waiting until tax time to see what happens is not the best approach. Being proactive will help you best prepare for the upcoming tax season and avoid surprises down the road.
Start With an Advisory Team MeetingOne of the best steps you can take now is to set up meetings with your advisory team to discuss how this tax reform bill could affect you, your investments, and your business (if you own one). Some of the key players you should be scheduling meetings with include your financial advisor, your CPA, bankers, insurance agents, and even your lawyer. These professionals will be able to paint a clearer picture of what you can expect and provide you with some valuable guidance moving forward. From there, you can prepare an agenda based on your unique situation.
During these meetings, you should be seeking answers to important questions as they apply to you, such as:
- Do I have the right legal entities to be the most tax-efficient?
- What deductions and changes will affect my personal tax situation?
- Is my company taking full advantage of new tax benefits?
Take a Break From DIY Taxes
If you tend to handle preparing and filing your own taxes, you might want to re-think this in the coming tax seasons. At the very least, consider working with an experienced tax professional this upcoming tax season to make sure you're not leaving any money on the table or making any filing mistakes that could come back to haunt you. It's the job of a tax professional to stay on top of all these tax reform changes and help you make decisions that are in your best interest, after all.
Set Goals and Meeting Schedules
Once you have a better idea of how the new tax reform bill will affect you, work with your professional advisors to set actionable goals that you can work on and measure over the next couple of years. Throughout the year, set up recurring meetings with your advisory team to make sure you're staying on-track.
A little foresight and planning goes a long way in understanding how the Tax Cuts and Jobs Act could affect you in the coming years. And remember, the battle of the tax bill is still very much alive; do the best you can to pay your fair share. With your tax savings, consider giving back to a cause or organization that's meaningful to you. And if you need further guidance, contact our team at Richard Brothers today.
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