Smart Summertime Tax Moves For High-Net-Worth Clients

Last tax season brought some nasty surprises for taxpayers who noticed how reform strike their individual results. Now’s the time of year for advisors to make next April less painful for their rich clients. “Most taxpayers didn’t take time to study the personal impact of the taxes legislation changes,” said Dean Mioli, a CPA/CFP and director of investment planning at Independent Advisor Solutions by SEI in in Oaks, Pa. “For example, more taxpayers than ever are taking the typical deduction because of the apparent changes to Plan A itemized deductions.

“For some, tax withholding was inadequate,” said Kathy Buchs, a director and CPA in MAI Capital Management’s customer taxes group in Cleveland. “Run a projection with a CPA to ensure they’re on track. Year The high-net-worth customer should first take stock of where they may be relative to last.

“Is income about the same, pretty much? The calendar year Is the customer anticipating any big income items before the end of, like a stock option exercise? Filing status forward is worth a look, regarding Martin Abo, a CPA with Abo Cipolla Financial Forensics in Mount Laurel, N.J. If one partner has significant unreimbursed medical expenditures, she or he may pay less tax by choosing the “married filing separately” position, assuming deductions are itemized by both spouses on their respective comes back.

Another big change post-reform: deferring capital increases through investments in certified opportunity zones. “There’s a time limit, 180 times from the identification of the gain generally, so it’s essential to start taking a look at options once the gain occurs,” Bucks said. After the equity markets’ strong first fifty percent of the entire year, charitably inclined individuals seeking to increase itemized deductions should contribute valued securities now. “The taxpayer will get a deduction and steer clear of paying tax on the gain on the sale,” Mioli said. This season “If we do visit a sizable pullback on the market later, a high-net-worth customer should be seeking to do tax-loss harvesting.

Stock also figures in a well-publicized new deduction for skilled business income. “Small-business owners should determine if they are taking maximum advantage of the Section 199A deduction,” said Jack Oujo, a CPA/CFP in Wall, N.J. For taxes savings, “we continue to like high-yield municipal relationship funds also. “What we have this season is more answers in regards to the way the tax law is usually to be interpreted,” said Cory Gallivan, a principal and CPA in the Alton, Ill., office of Scheffel Boyle. “Section 199A, business structuring, and income are a few examples.

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