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Charitable Giving, Business Structure, and Estate Plans Top List of Adjustments Post Tax Reform: Survey of CPA Financial Planners
[December 13, 2018]

Charitable Giving, Business Structure, and Estate Plans Top List of Adjustments Post Tax Reform: Survey of CPA Financial Planners

As 2018 comes to a close, CPAs are working with their clients to harvest losses, bunch charitable contributions and make other year-end financial planning moves to put them in the best possible position for when they file their taxes. However, this flurry of activity is nothing compared to late 2017 when tax reform was being actively debated. After monitoring the discussion, within roughly a month of the Tax Cuts & Jobs Act passing, two-thirds of CPA financial planners (67 percent) had already discussed the impact of tax reform with their clients. And more than half (56 percent) had started the process of making changes to their clients' financial plans by the end of January. This according to the American Institute of CPAs (AICPA) recent Personal Financial Planning Trends Survey, which includes responses from 631 CPA financial planners.

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Tax reform optimism vs anxiety (Graphic: Business Wire)

Tax reform optimism vs anxiety (Graphic: Business Wire)

This quick action by CPAs in the wake of tax reform passing resulted in widespread changes across multiple broad areas of their clients' plans. Topping the list were charitable giving (50 percent), business structure (49 percent) and estate plan changes (42 percent). Other common plan modifications included adjustments to their clients' retirement savings (32 percent) and housing decisions (27 percent) such as home equity loan or line of credit. Additional changes were made to the investment source of clients' retirement income (24 percent) and their investment allocation (22 percent).

"As the most recent tax reform was being finalized, we were reviewing every client's situation for last minute planning opportunities and the long-term impact it would have," David Oransky, CPA/PFS member of the AICPA PFP Executive Committee. "This allowed us to create multiple contingency plans so that when the final bill became law, all we had to do was execute the appropriate plan. This resulted not only in savings for our clients, but also served to reduce their anxiety about the changes."

During initial discussions about tax reform, clients were more optimistic (45 percent) than anxious (40 percent) about the impact it would have on their finances. However, the extremes tell a different story. The proportion of very anxious clients (9 percent) was one and a half times that of those who were very optimistic (6 percent). Client anxiety was primarily fueled by the loss of tax deductions (41 percent) and uncertainty about the amount of tax they would pay (40 percent). Conversely, their optimism was largely bolstered by anticipated savings (78 percent). The benefit from higher estate and gift tax exemptions (10 percent) also generated some optimism.

"The relationships I've cultivated with my clients over the years has enabled me to anticipate their concerns and help them work through those matters before they unfold," added Oransky. "Dealing with the unknown can be unsettling, but through communication and established trust, we are able to assess and revise financial plans with confidence."

And while the TCJA brought about largescale change to the tax code and generated widespread media coverage, CPAs say that their client's life events trump tax reform when it comes to the impac on their plans. In fact, by a 13 to 1 margin (77 percent vs. 6 percent), major life events such as marriage, divorce, or retirement, were found to be more impactful to their clients' financial plans than the impact of tax reform. Seventeen percent of CPA financial planners said both have an equal impact. Furthermore, at the intersection of significant life events and tax reform, more than a quarter of CPA financial planners (27 percent) said that after the elimination of the alimony payment deduction they have seen an increase in the number of clients seeking to finalize their divorce before 2019, with 6 percent citing a substantial increase.

"A personal financial plan is, above all, personal. And while laws may change, the role of the CPA financial planner is to make sure that the plan is working for their client in any environment to support their life goals and to keep them and their family secure," said Andrea Millar, CPA/PFS, Association of International Certified Professional Accountants Director of Financial Planning.

Between guiding clients through the financial planning process and making adjustments to their plans post tax reform-- there is a lot of value in working with a CPA financial planner. In fact, by a 99 to 1 margin, clients valued the role their CPA played in the financial planning process post-tax reform, with 88 percent of planners saying their clients found them to be extremely or very valuable.

Looking ahead to tax season 2019, members of the AICPA Personal Financial Planning Division have these last-minute tax planning tips.

Bunch Charitable Contributions
Deadline: December 31, 2018
Quote: "For those individuals who are considering the standard deduction instead of itemizing, consider bunching your charitable contributions into alternate years if it will enable you to take the standard deduction one year and itemize the next. If you do not want to give the money to charity at one time, contribute to a donor advised fund and then make the distributions to charity over time." - Lisa Featherngill, CPA/PFS member of the AICPA PFP Executive Committee

Gift to Heirs Today to Reduce Future Estate Tax
Deadline: December 31, 2018
Quote: "The year-end is a great time to make annual exclusion gifts. For those looking to reduce their estate tax exposure, individuals can give up to $15,000 to an unlimited number of beneficiaries per year without decreasing their lifetime estate tax exclusion amount or paying a gift tax. These planning opportunities will be lost once the year ends and should be top of mind to review now." - Robert Westley, CPA/PFS member of the AICPA PFS Credential Committee

Leverage Your Losses
Deadline: December 31, 2018
Quote: "Harvest your losses! It's been a strong year for US equities, but international stocks and fixed income have had negative returns for the most part. Therefore, take advantage of tax loss harvesting to offset any of the gains you've taken throughout the year. Bear in mind, though, that you can't buy back the same holding you sold at a loss within 30 days or else you'll run afoul of 'wash sale' rules." - Michael Landsberg, CPA/PFS member of the AICPA PFP Executive Committee

More year-end financial planning tips are available here.


The AICPA's PFP Trends Survey is administered as an online survey to CPAs who are members of the AICPA Personal Financial Planning Section, including those holding the CPA/PFS credential. It was conducted from August 20 through September 24, 2018.

About the AICPA's PFP Division

The AICPA's Personal Financial Planning (PFP) Section is the premier provider of information, tools, advocacy, and guidance for CPAs who specialize in providing estate, tax, retirement, risk management, and investment planning advice to individuals, families, and business owners. The primary objective of the PFP Section is to support its members by providing resources that enable them to perform valuable PFP services in the highest professional manner.

CPA financial planners are held to the highest ethical standards and are uniquely able to integrate their extensive knowledge of tax and business planning with all areas of personal financial planning to provide objective and comprehensive guidance for their clients. The AICPA offers the Personal Financial Specialist (PFS) credential exclusively to CPAs who have demonstrated their expertise in personal financial planning through testing, experience and learning, enabling them to gain competence and confidence in PFP disciplines.

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world's largest member association representing the CPA profession, with more than 431,000 members in 137 countries and territories, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at

About the Association of International Certified Professional Accountants

The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA (News - Alert)) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 667,000 members and students across 184 counties and territories in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.

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