As you already know, Congress recently passed a new tax bill that will likely affect the tax outlook for many of your clients. While eMoney typically updates all taxes on January 2 of each year, that was not possible this year because of the new Tax Cuts and Jobs Act bill that was passed at the end of 2017. This new bill changes approximately 15 tax rules that eMoney handles, including a critical sunset provision that, if left unaccounted for, would result in long-term financial plan projections using incorrect tax assumptions beyond various expiration dates.
Over the next month, we will be coding a significant portion of Congress’s new tax laws in a thoughtful way that accounts for the most impactful changes first and minimizes the initial use of old and new tax rules in plan projections. The result will be a first release available in mid-February, where we’ll update our system for items like sunset provisions, removing the itemized deduction phase out, and many of the other deduction-related rules (standard, SALT, miscellaneous) and exemption-related rules (personal, AMT, Estate taxes).
We will be working diligently on additional releases to ensure other new portions of the law are accounted for thereafter. These releases will account for more complex provisions like business pass-through income and child tax credits as well as new functionality to allow you to do things like toggle on/off sunset provisions and cap the estate tax exemption amount for those who don’t want to assume that exemption will last in perpetuity.
Please note that until mid-February, eMoney will continue to use the old tax rules which we updated on January 2 for all originally expected 2018 tax adjustments.
We understand that you’d prefer to work with the latest tax information prior to mid-February, however, our robust tax estimation engine means that we will be updating many more tax rules than in an average year. Most importantly, we view the inclusion of the sunset rule as essential, since ignoring that rule could result in inaccurate plan projections, placing advisors and clients at risk.
We will continue working to update our software as quickly as possible, and we will be sure to update you regarding our February expectations. Check back on this post for more details about the changes coming in the near future.
And if you have further questions, please contact our Client Engagement team at 888-362-8482 or send us an email.