Be Careful About Getting Excited

[Kram BergGold]

This was my first client in 2018 for 2017. In 2017 married client has $14,900 of itemized deductions. At first glance I thought the new tax act would be a help to them. Then I realized they were losing $8100 of exemptions so their approximate tax savings will be about $130. Seems more like tinkle down then trickle down to me. Although doing their taxes next year will be simpler as they won't be using Schedule A.

[spanel]

This was my first client in 2018 for 2017. In 2017 married client has $14,900 of itemized deductions. At first glance I thought the new tax act would be a help to them. Then I realized they were losing $8100 of exemptions so their approximate tax savings will be about $130. Seems more like tinkle down then trickle down to me. Although doing their taxes next year will be simpler as they won't be using Schedule A.

Don't forget the smaller tax brackets help more than you think as well.

Chris

[Twin Turbo Z]

Plus if there are children involved the higher CTC. Many variables involved next year.

[Kram BergGold]

I Take it Back

Prior to seeing spanel's response I looked a the effect of the tax rate reduction. They get a 3% break which is about $1600. They have no children. More so than ever, I am convinced these tax reductions are going to put the government in way more debt than they figured. I am guessing close to 3 trillion or double their projection.

[oceanlovin'ea]

estimate for next year

I am going to do the estimate calculation for all my clients this year. It only takes a couple of minutes. I will just do it using the same figures that we are using on this years return. I tell them if all your information is the same next year as it was this year, this is how your tax return would be. More back or less back. I am also telling them to look at their withholding on their paychecks. If it seems they are getting a bigger paycheck they need to look at their withholding and see if less is being taken out as this will affect their refund or amount they owe.

I think this will be a great benefit to them and to me next year when they say "what happpened?".

Linda F.

[Twin Turbo Z]

Prior to seeing spanel's response I looked a the effect of the tax rate reduction. They get a 3% break which is about $1600. They have no children. More so than ever, I am convinced these tax reductions are going to put the government in way more debt than they figured. I am guessing close to 3 trillion or double their projection.

Guess the government needs to trim the fat or should I say "drain the swamp"

[SHADE TREE TAX SERVICE]

Our software gives us a look at next year's impact assuming nothing changes. 30 seconds and we can tell the client how it effected them.
It's pretty nice.

[ToledoEd]

Our software gives us a look at next year's impact assuming nothing changes. 30 seconds and we can tell the client how it effected them.
It's pretty nice.

Remember that next years withholding will be less than 2017's unless they make changes. Make sure that they realize that and have them compare paystubs from March to the ones in January. If not they will be disapointed with their lower refund.

Ed Shotwell

[Kram BergGold]

Fe

In 2018 my clients will switch from $14,900 of itemized to $24,000 of standard but their $8,100 of personal exemptions will no longer exist.
So plus $9,100 and minus $8,100 leaves them $1,000 ahead which will save $120.

[Twin Turbo Z]

Remember that next years withholding will be less than 2017's unless they make changes. Make sure that they realize that and have them compare paystubs from March to the ones in January. If not they will be disapointed with their lower refund.

Ed Shotwell

Yes in deed. I have seen clients already that have had the new rates taken effect.

[ttbtaxes]

Our software gives us a look at next year's impact assuming nothing changes. 30 seconds and we can tell the client how it effected them.
It's pretty nice.

What software do you use?

[Twin Turbo Z]

Proseries planners work fine for roughing next year. But as mentioned above , you have to know how the taxpayers federal withholding has changed. And in my experience payroll companies screw crap up all the time. So we are telling our clients if they want to know the impact for next year, let us see paycheck stubs once they see a take home change.

[Burke]

One thing I have learned over the decades is that it is a futile argument to discuss "refunds." ( Not to mention the comments such as "Joe at work makes the same income I do, but his refund was much larger than mine." Translation: "Are you sure you know what you're doing?" ) My job is to get their taxes as low as legally possible, which is a completely separate issue from the size of any refund.
FE

I would get this argument from time to time. I would tell them if your income and deductions are exactly the same, then the other party is getting a bigger refund because he is paying more in than you are. Or bring me their tax return and I could tell you exactly why their refund is bigger. I used to try to determine other factors that might influence the result, like does his wife work, how much does she make, how many children do they have and what ages they are. The client rarely knew all this info.

[geekgirldany]

My tax software is printing out a comparison to 2018 Tax Reform but I've found it to be incorrect. One thing is the child tax credit... unless I am missing something the child still has to be under 17. My tax software is giving the child tax credit to taxpayer's whose dependent turned 17 last year. I need to bring it to their attention. I am opting to stop including the worksheet in the client's tax return. If they ask I will print it out and have a discussion.

Just got my second "fussin' out" this week from a client that was not getting a refund or lower than expected. I can't wait for next year.

I got so tired of the "well Joe Bob at work always gets a refund" I now tell clients they are welcome to go to his/her preparer. If they can't take my word...especially after years of preparing their return..I am not going to get into a argument.