How Will the 2018 Tax Changes Affect Your Clients?
While 2017 tax returns filed by the April 16, 2018, deadline are generally unaffected by the Tax Cuts and Jobs Act changes that took place on January 1, understanding these changes now will help your clients determine how the new tax code may impact their take-home pay and their 2018 tax returns.

While it may take some time for your clients to fully understand the implications of the new tax code for their specific personal situations, one thing remains certain. Your clients need to stay attuned to their retirement agenda and continue to save to help meet their retirement goals.

Help them take advantage of an opportunity to make last year’s Traditional and/or Roth IRA contributions this year!1  The maximum contribution of $5,500 ($6,500 at age 50) can be made to a Traditional and/or Roth IRA by the tax filing deadline of April 17, 2018. Using IRS Form 8888 can help facilitate the process.

Our Retirement and Tax Planning Reference Guide allows you to compare the 2017 schedules and rates to current ones.  It includes the schedules for Traditional and Roth IRAs, the new federal tax brackets and corresponding rates, retirement limits, standard deductions, and much more.

The provisions for individual tax payers generally will sunset after 2025.  This means that individual and estate tax cuts will revert to normal adjusted rates.

Federal Income Tax Rate Comparison
Pre- TCJA Rates (2017)10%15%25%28%33%35%39.6%
TCJA Rates (2018)10%12%22%24%32%35%37%
Differenceunchanged-3%-3%-4%-1%unchanged-2.6%
 
  1. ^Talk to your financial advisor and consider whether or not a Traditional or Roth IRA is suitable for you. Prior to a decision, you should understand the benefits and limitations of your available options and consider factors such as differences in investment-related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, and other concerns specific to your individual circumstances.