Personal Finance

Considerations for the New Tax Bill

Senior Estate Planner, Mike Repak, highlights some important considerations for the new tax bill.



Understanding the Changes

The greatly anticipated tax bill emerged from conference late on Friday, December 15. The law, at almost 1,100 pages long, and the accompanying Congressional statement of 570 pages, should prove beyond any doubt that simplification is difficult. Of course, the law is complex because life is complex. This law represents a massive overhaul of the tax code in a way that touches just about everybody. Tax experts everywhere are scrambling to absorb these changes so they can advise people who may be most significantly impacted. From these tax experts, we can expect a steady stream of information about the effect that these changes might have on existing plans, as well as information on planning opportunities as they emerge.

Surprises are often found each time a law is changed, and that understanding will likely be true here as well. Most of the major changes have been exposed in advance of the bill’s passing. For those keeping score, in the case of differences between the House and Senate versions of the bill, the more significant changes essentially adopted the Senate point of view. The combination of rate reductions and changes to itemized deductions/ personal exemptions make it challenging to generalize about the impact of this bill on any taxpayer’s bottom line. For many taxpayers, the net effect may be negligible. Because tax advice needs to match a person’s particular situation, taxpayers should seek advice from a qualified advisor specifically on their individual circumstances. And, as the old maxim goes: The tax tail shouldn’t wag the dog.

Of particular interest for business owners and equity investors: Many of the rate reductions, capital recovery provisions, and other liberalizations were aimed at increasing profitability and overall economic activity, especially in the U.S. However, we will have to wait to see if the ultimate results are as intended.

In the meantime, the following charts highlight just a selection of the changes to consider.

Proposed New Rates



Source: Joint Explanatory Statement of the Committee of Conference from the Joint Committee on Taxation


Items of Interest

The following page contains highlights of many of the provisions that will affect individuals and business owners. For a complete summary of all provisions in the bill, please visit http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf or view the Joint Explanatory Statement found at http://docs.house.gov/billsthisweek/20171218/Joint%20Explanatory%20Statement.pdf.

As the tax law reform moves at a rapid pace, there are many complex aspects of the new bill that remain unclear. That being said, Janney continues to educate clients on the different components of this bill and their implications to the best of our ability. However, we always recommend that clients seek advice from their individual tax advisor on all tax-related matters.


Tax Term Abbreviations

MFJ: Married Filing Jointly
S: Single
HOH: Head of Household


Michael Repak, CPA/PFS, JD, LLM
Vice President/Senior Estate Planner
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Mike provides advice and guidance in all aspects of financial, tax, and estate planning issues. He earned his Bachelor’s degree from William Paterson University in Wayne, New Jersey, and has a Master’s degree from the University of Wisconsin in Madison, Wisconsin. He has a CPA/PFS credential, and Series 7 and 66 securities licenses. He received his J.D. from the University of Florida and his LL.M. in Tax Law from NYU. 

He has been an adjunct professor in the MBA program at Temple University and is a sought-after speaker for professional conferences and events. He is also frequently featured as a Money Doctor on www.360financialliteracy.org, the public education site of the American Institute of Certified Public Accountants. Mr. Repak has served on several non-profit and civic boards, is a graduate of Leadership Philadelphia, and a member of the Union League of Philadelphia.

The information presented herein is taken from sources which we believe to be reliable, but the accuracy and completeness of such information is not guaranteed by us. Please consult with your tax advisor for specific guidance relative to your particular situation.

Janney Montgomery Scott LLC Financial Advisors are available to discuss the suitability and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Please note that the information provided includes reference to concepts that have legal, accounting, and tax implications. It is not to be construed as legal, accounting, or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Janney Montgomery Scott LLC nor its Financial Advisors (in their capacity as Financial Advisors) give tax, legal, or accounting advice. We would urge you to consult with your own attorney and/or accountant regarding the application of the information contained in this letter to the facts and circumstances of your particular situation. Janney Montgomery Scott LLC is a full-service investment firm that is a member of the NYSE, FINRA, and SIPC.


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