Questions Remain for FAs Pondering New Tax Bills

November 20, 2017

Questions Remain for FAs Pondering New Tax Bills

November 20, 2017 | Alex Padalka | Financial Advisor IQ

United States Capitol Building, Washington, DC

Plenty of questions have been left on the table over how the latest round of Washington tax bills will affect financial advisors — particularly those set up as partnerships and other pass-through entities, InvestmentNews writes.

Sen. Ron Johnson, R-Wis., says the current plan favors corporations over pass-through entities, according to InvestmentNews. The proposed tax cut on pass-through businesses from 39.6% to 25% would not apply to advisors and other service businesses such as accounting firms, but it could present advisors with an opportunity to help their clients navigate the tax break to their advantage.

Treasury Secretary Steven Mnuchin, however, said Friday that 98% of pass-throughs bring in $500,000 or less in income, and the current plan would bring “substantial” tax reductions to them, according to Reuters.

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