01 Feb Client Bulletin Select Feb 2019
Practice development tip
Use tax returns as a teaching tool
This year’s tax filing season brings the first returns under the Tax Cuts and Jobs Act (TCJA) of 2017. Some features of the TCJA will be new to clients and may be startling. You can use these returns to trigger conversations and generate future tax-planning sessions. For example, many married clients who generally itemize deductions will be taking the standard deduction for 2018, mainly due to the $10,000 cap on state and local tax (SALT) deductions.
(The impact on single filers won’t be as great because the $10,000 cap on SALT deductions is not far from the $12,000 standard deduction for singles; couples have the same $10,000 SALT cap and a $24,000 standard deduction.) Clients who take the standard deduction, rather than itemizing, will not benefit from charitable contribution deductions or large medical deductions. In planning for 2019, you might point out the benefit of taking qualified charitable distributions from IRAs once clients reach age 70½, so that reduced taxable income from required minimum distributions will offset the absence of charitable
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