Do You Have a Trump Card for the New Tax Landscape?

The New Tax landscape

KEY TAKEAWAYS

Don’t make any major decisions while we’re in a wait-and-see mode. But, that doesn’t mean you should duck your head in the sand. See the helpful charts at the end of this post.

  • Tax changes are not permanent and proposed tax changes may look quite different from what is actually signed into law.
  • The proposed House GOP plan is not identical to the Trump proposal.
  • State estate tax planning here in Washington State may remain unchanged.

 

My career has always been focused on helping people find solutions to their financial challenges, no matter how complex or varied those challenges may be. I began my working life as a CPA and though I consulted with clients on a variety of issues, much of my time as the tax partner in our firm was spent helping our clients navigate the complexity of the tax law. Fifteen years ago, I started a new venture that eventually became Soundmark Wealth Management, LLC. What has inspired me the most about helping to build Soundmark has been the opportunity to get to know our clients so well. It’s also been very rewarding to understand our clients’ financial goals in depth, and to put in place a structured investment philosophy and proactive planning process that helps clients move toward those goals.

My business may have changed over the years, but I can tell you that tax and estate planning is still integral to all of the work that we do for our clients. This year is clearly no exception. With a new President and Congress taking the reins of government, we are keeping a close eye on potential changes to the tax law and how those changes may affect each of you.

Based on my years of experience, here are some points to keep in mind as we go through this process:

  1. What is proposed may look significantly different from what is signed into law. This is the case even if the President and Congress are on the same side of the aisle, especially considering the factions within Congress and the potential effect these proposals will have on the national debt.
  2. Tax changes are not permanent. Just as the new administration is going to change the law, a change in the political makeup could easily swing things back to where we currently reside. For example, even if they repeal the estate tax, long-term estate and gift planning may be applicable.
  3. State estate tax planning may still be applicable, At least here in Washington State, where individual estates in excess of $2,129,000 are taxed, the current estate tax threshold may still be applicable unless, or until, the states repeal their estate tax law.

As this post goes live, we remain in a wait-and-see mode when it comes to individual income taxes, business taxes, and estate and gift taxes. I do not recommend making any important decisions based on what may happen. We have a long way to go before we actually gain some clarity about the new U.S. tax landscape. However, I’ve attached some brief charts below that should help you gain a mental snapshot of the current tax laws and the proposed tax laws from both the House GOP plan and President Trump’s proposal.

As always, we are here to help, if you have questions or concerns about how you and your loved ones may be impacted by the proposed tax law changes, please call or contact us any time at 877-726-4040 or info@soundmarkwealth.com.

Todd Flynn, CPA, CFP ® is a Principal at Soundmark Wealth Management, LLC. Todd works closely with physicians, business owners, and other high-net-worth individuals to help them define their financial goals and implement an ongoing financial planning process