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CPAs mull, offer advice, on new tax bill

The new federal tax bill has made new rules for the nation’s tax laws, and that means changes for taxpayers in Forsyth County.

The federal Tax Cuts and Jobs Act of 2017 was signed into law by President Donald Trump on Dec. 22, and Chris Smith, a CPA with CB Smith and Associates, said the majority of Forsyth County would pay a lower amount in taxes in 2018.

“I think that in general probably 80 percent of us are probably going to see a little bit of a tax cut. I think our taxes will go down,” he said. “I think a certain portion of us may not see that, but I think a good portion of us will, and mainly that’s where the tax brackets have changed and the income strata for each bracket has also changed.”

CPA Rick Lee, of Lee and Associates, said the new law might not have exactly what everyone is looking for but was a good start.

“All in all, I think it’s a step in the right direction,” Lee said. “Is it perfect? No, it’s Congress. I think it’s a step in the right direction, and I don’t think we can get where we need to be all in one fell swoop. It needs to be done in stages.”

Nationally, a change in property taxes with the new law caps federal tax deductions for state and local taxes at $10,000, prompting some to try to pay their 2018 property taxes before the new year, when the rules took effect.

“Certainly, I think if you have been assessed a property tax by your local municipality, I think you can go ahead and pay that,” Smith said. “I don’t think that is the case here in Georgia. Many times, the assessment of the property tax is done in August, and those property taxes are due in November.”

Forsyth County Tax Commissioner Matthew Ledbetter said he had not yet gone over the law but confirmed his office couldn’t accept future taxes since those had not yet been levied.

Smith said he believed the new rules would also benefit smaller businessmen thanks to a change that would reduce the taxes for pass-through entities — businesses that don’t pay income tax at the corporate level — by 20 percent.

“Our small business owners, certainly, I think, will also see a tax reduction,” Smith said. “Particularly in our county here, most of our clients are small and medium-sized businesses, and those businesses are typically pass-through entities.”

Both Smith and Lee said it remains to be seen whether the removal of the personal exemption, or the amount an individual is allowed to claim as a tax deduction against personal income, would be offset by a tax credit for those with children.

“There are some positives in the law, which I think are the doubling of the standard deduction, but the interesting part will be if the child tax credits that they’ve done make up for the difference of losing the personal exemptions,” Lee said.

Similarly, changes to itemized deductions had some taxpayers make donations ahead of the new year, which Smith encouraged.

“There’s going to be a lot of folks where maybe their itemized deductions today are sitting in the $15,000-$20,000 range based off some charitable donations they have and so on and so forth,” Smith said. “Next year, they’re not going to be able to itemize any deductions because if their itemizations remain the same, they’re going to wind up with a standard deduction.”

Lee said individuals should work with a tax professional to see how the new law impacts them personally.

“I think what individuals need to do is take a step back and if their tax preparer/CPA and their software has the ability once it is implemented to run an analysis to show them what their taxes would have been under the old law versus the new law,” Lee said. “We’re going to be doing that for a variety of our clients to show them what that is going to look like so that they can know for themselves without having to guess.”