2018 Tax Projections
As practitioners prepare Forms 1040 this season, it is vital to help clients to plan for the effects of the new tax law.
Tax software should include a planning or similar worksheet to allow practitioners to compute an estimate of the effects of the new tax law for their clients using their estimated income for the 2018 tax year.
In addition, since the income tax withholding tables have also changed, practitioners should compute the expected withholding for 2018 for clients.
When comparing the projected tax liability for 2018 to the estimated withholding for the year, clients may need to adjust their withholding and/or estimated tax payments for the 2018 tax year.
Higher-income clients in the New York area might face an increase in their tax liabilities in 2018, if their income is mostly from salary. In contrast, many higher-income clients who own business activities may see an overall tax reduction from the new law.