Bless the Government Accountability Office, which does so like to scare us.
Right now, the GAO is saying that millions of people may have misunderstood certain provisions of the Tax Cuts and Jobs Act of 2017, leading them to under-withhold their taxes.
With a skeleton staff working at the IRS right now, matters could get ugly, particularly for your high-net-worth clients, at tax time, it seems. Is it time for emergency calls to clients or is the GAO – as is its wont – exaggerating the gravity of the issue? Let’s see what our featured author has to say.
Is a big tax bill in your wealthy clients’ future? Maybe not, specialists say. One CPA in California, who deals with a high-net-worth clientele, said that most of his customers have made sufficient withholdings to avoid disappointment in April. Some might receive a smaller refund than in previous years, though.
Many of his clients had been anxious, troubled by alarming news reports. In the final analysis, careful planning in tandem with a skilled tax accountant saved most wealthy people from trouble. While precisely predicting the final tax bill was impossible in some cases, it certainly was possible to structure withholdings to avoid major surprises and set aside funds to cover any extra tax payments.
A lot of clients chose to run a tax projection at the end of 2018. For wealthy individuals, W-2 income does not account for the bulk of their earnings – business holdings and other investments are often key sources. A tax projection served to alleviate these clients’ anxieties, the specialist said.
For more information, please read:
How Wealthy Clients Can Head Off A Surprise Tax Bill | Financial Advisor Magazine