I Wish I had a Crystal Ball
It’s tough being a tax advisor. Not only do your clients expect you to help them minimize current taxes, they also expect you to formulate tax strategies to minimize future taxes. When the rules are known, it’s a difficult proposition, but when the rules are likely to change, you need a crystal ball. As our new President begins his administration, there is a likelihood that significant changes will occur. Backed by a Republican controlled Congress, many elements of the President’s tax plan will receive favorable consideration.
Unfortunately, there is no certainty. President Trump’s tax proposals differ from Paul Ryan’s tax plan. The Democratic minority has a decidedly different agenda and could become the majority party in four years (or at some other time in the future) and reverse it all. There is even the overriding concern that the increasing budget deficits could affect the process. Lowering tax brackets, capping itemized deductions, increasing standard deductions, eliminating alternative minimum taxes, and eliminating federal, estate, and gift taxes will bring about “new conventional wisdoms” for tax advisors. Lower current tax rates will reduce the need for tax deferrals. Capping itemized deductions and increasing the standard deduction will impact decisions on charitable contributions, purchasing and financing new homes, and even where to live based upon state and local income and property taxes.