Every election that we can remember there are promises of change to Taxation, most of the time for less tax but always Big Reform is one of the topics that seems to attach itself to every political candidate. Then after the new blood gets into the “Big Chair”, or the old guard settles back down, the budget gets opened and the talks begin, and usually, taxes are added or deductions get eliminated. Many people expected the corporate tax rates to already be 15% from the election rhetoric of late but, no surprise, the changes to cut tax are always way harder to implement than changes to increase tax.
It is also common that because of promised change that we have a somewhat harder time getting people to engage in Tax Planning as they are “waiting to see what happens.” It’s very human, but often a veiled excuse for procrastination instead. Most Tax Planning is not directly attached to a tax change; for instance, a common personal tax plan might include adding an HSA account as a tool so people will stop paying for health care with after-tax dollars and instead pay those same bills with pre-tax dollars. If the latest Trump tax code changes did happen, how will it affect the advice to open an HSA? Answer: IT WOULDN’T! If the new code lessens your tax bill from 25% to 15% then the HSA advice would look like this: do the HSA now and pay your doctor’s co-pays with a pre-tax dollar and save 25% and after Trump pushes through the tax cuts you are waiting for you’ll only save 15%. Why are we waiting to open an HSA until after Trump’s tax cuts go in? Ohhhhhh, so we can save 10% less! Wait…what?
We could give example after example but the point is Tax Code change is constant and so are planning ideas but waiting until change happens so you can see, means never doing anything!
Come in now and let’s talk about how we can save you taxes now and we will tell you the current savings and, if those savings change, when and if new planning goes in.
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