|Accounting Today editor-in-chief, Daniel Hood, recently interviewed NCCPAP President, Stephen Mankowski, CPA, to discuss some of the major tax changes, issues, concerns and uncertainty for individuals and businesses.
| For the Average Taxpayer: One of the major issues that will affect the average taxpayer is a significant increase in the standard deduction. Associated with that, most taxpayers are not aware that personal exemptions are going away.
199A Deductions for Pass-Through Entities: Taxpayers with their own businesses or pass-through entities will encounter added complexities related to the 199A Deduction. We're still looking for guidance from the IRS regarding QBI/QBL (Qualified Business Income/Loss) and potential eligibility of an 'up to 20 percent' deduction.
Determination of Meals and Entertainment: Clients doing the bookkeeping themselves are looking to us for guidance, and we are looking to the IRS regarding the determination of meals and entertainment. While entertainment is no longer deductible, meals still are; therefore, there's some work to be done regarding how to treat the re-allocation to make sure things are classified properly.
IRS TRIO: Taxpayers, CPAs, and banks should align with the IRS TRIO (Tax Reform Implementation Office), a group of higher-level executives within the IRS representing various divisions. Their job is to oversee other departments regarding implementation of the new Tax Bill, in enough time for the software companies to make their changes, and for everyone else to be able to meet deadlines.
Where NCCPAP CPAs Can Shine: Overall, this is a great opportunity for CPAs to show their value and strategy to clients by helping clients think long-term. By starting to collect data now, looking for new opportunities, and meeting with clients, CPAs can begin to save taxpayers a lot of money over the next few years. Specifically, we'd like the taxpayer to meet with their tax professional as early as possible to see how the 199A Deduction may apply and what they can do to best take advantage not only this year, but potentially over the next 5-7 years. Even though it's now September, four months of data can go a long way in terms of planning. What we can do today, can have a long-term effect in future tax years even though practically, most taxpayers will wait and see what they "could have done" in 2018 tax season as a precedent for future year savings.
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