Planning Ahead: Navigating the Potential Sunset of the 2017 Tax Cuts and Jobs Act
As we look toward the horizon of 2026, the potential sunset of the 2017 Tax Cuts and Jobs Act (TCJA) looms large, leaving many to wonder about the future of their financial plans. In a recent episode of our podcast, “Here’s The Plan For When It Ends,” Kevin Kern, ACM Wealth Co-Founder, and David Fuchs, CFP® ACM Associate Wealth Advisor, sat down with Ben Henry-Moreland, Senior Writer for Kitces.com, to discuss how this impending change could impact clients and what steps you can take now to stay ahead.
Don’t Wait to Plan
One of the key takeaways from the discussion was the importance of proactive planning. While it might be tempting to adopt a wait-and-see approach until the TCJA’s future is officially decided, Henry-Moreland emphasized that this could be a risky strategy. The complexity of effective tax planning means that waiting until the last minute might leave you with few viable options. As Henry-Moreland pointed out, “It’s almost too late to start planning,” underscoring the need for immediate action to protect your assets.
Business Owners: A Call to Action
Business owners, in particular, need to be vigilant. The podcast highlighted how the potential changes could affect everything from estate planning to business valuations. If you’re a business owner with a net worth of $7 million or more, or a couple with a combined net worth of $14 million or more, now is the time to start working with your financial and legal advisors to ensure you’re prepared for whatever changes may come.
Will Taxes Increase for Everyone?
A major point of concern is whether taxes will rise across the board. The reality is that if the TCJA sunsets as scheduled, the unified system for gift and estate taxes could revert to pre-2017 levels. This would mean a lower exemption threshold, potentially leading to higher taxes for many. The podcast delved into the intricate details of how this could play out, with experts advising that individuals with significant estates consider using their current gift allowances to fund irrevocable trusts or other estate planning tools.
Estate Planning: More Important Than Ever
Estate planning was another critical area of focus. The podcast discussed the importance of using irrevocable trusts and other tools to safeguard assets. With the possibility of the exemption being halved in the near future, the window of opportunity to protect your wealth is narrowing. “Now is the time to get started,” advised Henry-Moreland, stressing that estate planning attorneys’ calendars are filling up fast.
Conclusion
The potential sunset of the TCJA is a complex issue with far-reaching implications. While the future is uncertain, what is clear is the importance of planning ahead. Whether you’re a business owner, an individual with a significant estate, or simply someone concerned about the potential tax changes, the time to act is now. Don’t wait until it’s too late—start working with an ACM advisor today to ensure your financial future is secure. www.acmwealth.com
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