Tax reform comparison WHAT it is and How to use it

Type question. AFTER entire question is entered, click SEND. Q&A Best Practices EMAIL before the webinar begins TaxCompliance@jtax.com especially for questions containing personal information or complicated scenarios “All Panelists” Mention that we are accepting questions AND remind them to type in the whole question, it is difficult for panelists to follow along if the question gets separated on different lines and sometimes an additional question can pop up between thoughts if SEND is hit before the entire question is entered. For more complicated questions, send an email to TaxCompliance@jtax.com Type question. AFTER entire question is entered, click SEND.

Tax reform impact comparison form New ‘Tax Reform Impact Based on 2017 Income’ form: Highlights expected 2018 tax for client’s specific situation Prints after Tax Tips ~ client takeaway Helps you demonstrate your (and JH) tax expertise Gives clients a chance to plan for next year Builds loyalty ~ offer to work on W-4 in late May/June

What we did & why We developed the ‘Tax Reform Impact Based on 2017 Income’ form to help you explain the EXPECTED impact of the new tax laws on each clients tax return. We provide a comparison of how their taxes would look based on this years tax return information and the new tax laws.… there are still lots of questions and to date the IRS has not updated their website with information on the new laws. IMAGINE what taxpayers – our clients – are worried about if even the “people in charge” haven’t got it all straightened out yet….

Let’s take a quick look at the new “form” … this is an example of Ted Tax-Reform’s situation. EVERY client will have different numbers print on THEIR specific Tax Reform Impact Based on 2017 Income form. The Tax Reform Impact Based on 2017 Income is a new “form” that prints out after Tax Tips … the differences that clients will see on their tax returns are summarized on the new form so you can easily help clients get an idea of what their 2018 tax return will look like.

Tax reform comparison 1 - 7 1. New standard deduction amount

Tax reform comparison 1 - 7 2. No personal exemptions beginning in 2018. The same information for all dependents is still required so we can determine which dependent-related credits you qualify for.

Tax reform comparison 1 - 7 3. For 2017 and 2018, the lower deductible floor of 7.5% of AGI means a larger Medical deduction.

Tax reform comparison 1 - 7 4.Total taxes, the deduction is limited to a total of $10,000 from state and local income/ sales taxes, and property taxes.

Tax reform comparison 1 - 7 5. Interest, mortgage interest on up to $750,000 principal and equity interest is only allowed on a loan used to substantially improve your home. Equity to pay off other bills or for personal use no longer allowed.

Tax reform comparison 1 - 7 6. Casualty and theft is only allowed for federal disaster areas.

Tax reform comparison 1 - 7 7. Job expenses and certain miscellaneous deductions, no deductions for employee business expenses, investment expenses, or tax prep fees allowed.

Tax reform comparison 8 - 15 8. For 2017, losses from hurricanes and wildfires are added to the standard deduction; “Includes Disaster Loss” prints on the line.

Tax reform comparison 8 - 15 9. Potential QBI deduction is a new deduction of 20% of small business income before taxes.

Tax reform comparison 8 - 15 10. Tax is based on 2018 Tax Rates.

Tax reform comparison 8 - 15 11. Other taxes such as self-employment, 10% early withdrawal.

Tax reform comparison 8 - 15 12. Withholding/Estimated Payments/Other credit is based on 2017 amounts.

Tax reform comparison 8 - 15 13. Family Tax Credit - nonrefundable is a new credit for dependents not qualifying for the child tax credit such as child 17 or older, parent, or dependent with an ITIN

Tax reform comparison 8 - 15 14. Child Tax Credit is now $2,000 per child with only $1,400 refundable. The balance is a nonrefundable credit. .

Tax reform comparison 8 - 15 15. Refund or balance due varies based on your deductions, credits, and withholding and prints accordingly. Remind clients to review their Form W-4.

Tax reform comparison 8 - 15

Now we’ll go through line by line with this example so you get an idea of how to walk clients through the form and help them understand what to expect and what YOU are going to do to help them.

Resources Search the Ask Jackson solutions on JHnet first. Review job aids on JHnet: Tax Reform Comparison Talking Points and corresponding example “Tax Reform Impact Based on 2017 Income” form on JHnet: https://www.jhnet.com/Library/Download/?TaxReformComparisonTal kingPointsandImpactForm Explaining Tax Reform Impact to Clients job aid: https://www.jhnet.com/Library/Download/?JobAidExplainingTaxReformImpacttoClients Tax Compliance webinars: https://www.jhnet.com/Library/?TaxComplianceWebinars/View Call the Support Center - 800-668-8264, choose Option 3 for your Tax Questions. IRS Website: Tax Reform

THANK YOU Email topic suggestions to taxcompliance@jtax.com Ask additional questions or send us comments to taxcompliance@jtax.com