In a recent Forbes article, Tony Nitti, Forbes Contributor, lays out five 2017 New Year’s resolutions for every tax pro. In this humorous and easy-to-read list, tax professionals, as well as their clients will find timely & relevant resolutions that ensure you are on your game in 2017 and, better yet, they don’t require a gym membership….
Here is a summary of what Nitti laid out in his list:
- Learn the Trump Tax Plan. Significant tax reform is more likely for 2017 than the past several years. With the new President’s strong desire to change the tax law, and a Republican-controlled House and Senate, change is very likely. You can read the PKF Texas Post-Election Tax Policy Update here for more information.
- Be Able to Explain the Difference Between Static and Dynamic Scoring. New tax plans are scored two different ways. Statically and Dynamically. Knowing the two types of scores and what they are used to analyze is critical in advising your clients on questions they have.
- Understand the Tax Consequences of Entity Conversions. With impending changes to the tax law, clients may look to you for advice on how to classify their business in order to gain the greatest tax benefit. Knowing the types of entities, what tax benefits they each have, and the laws that come with changing business structure will position you as a valued advisor to clients exploring their options.
- Learn the Ins-and-Outs of Section 1202. In relation to the above resolution, understanding Section 1202 can greatly help your clients who operate as C Corporations. Section 1202 says that if you sell qualified small business stock that you’ve held for five years, you can exclude 100% of the gain. Check out our blog on qualified small business stock here.
- Understand How to Compute and Minimize S Corporation Built-in Gains. Despite the simplicity that comes with being taxed as an S Corporation, entities electing to be taxed this way are often deterred by the built-in gains tax. Until recently, gains of a newly-electing S Corporation had to be tracked for ten years. That time period has been shortened to five years, which might make this option more viable and attractive to clients. Be sure to fully understand how these rules work and how to best advise your clients during this decision-making process.