Young couple siting on couch
Bookmark and Share

2019 Planning Perspective

Don't Wait for Washington When Making Your Financial Plans

We never advise clients to wait for things like tax policy changes before making long-term financial plans, and the newly divided Congress in Washington is a prime example why.

In 2018, the Republican Congress introduced three new bills collectively referred to as "Tax Reform 2.0." One of the key proposals was an extension of provisions from 2017's tax legislation (currently scheduled to expire after 2025). The likelihood of this passing today seems extremely remote.

In fact, since most major initiatives lately have required one-party control of the White House and both arms of Congress, it's unlikely that we'll see any major tax overhaul in the next couple of years. But that doesn't mean there couldn't be movement on specific issues with potential implications for you.

AN APPETITE FOR SALT? Republican and Democratic representatives from states with high tax rates may find common ground around the $10,000 state and local tax (SALT) deduction cap. But because no- and low-tax states also have both Republican and Democratic reps, debate could get interesting. Potential compromises might involve talk of increasing the corporate tax rate (reduced in 2017 from 35% to 21%) or the rate on individual earners in the top income bracket. Both have been on Democratic wish lists for some time.

COMMON INTEREST IN RETIREMENT Reps from both parties have expressed interest in retirement planning reforms. Some of these ideas – like making it easier for employers to offer retirement plans – were included in Tax Reform 2.0 and could make their way back to Congress in another form. President Trump has been particularly interested in changing some provisions around Required Minimum Distributions, but his ability to do that may depend on bipartisan support.

FOCUS ON YOUR GOALS Regardless of what the new Congress does or doesn't do, your financial plans should be based on what you need to accomplish and when. The changes made to tax laws in 2017 have real implications for the returns you'll file this April, and the kinds of life events you make financial plans for generally won't wait for the most financially convenient time. You should work with your Baird Financial Advisor to ensure all of your plans are in sync with your goals and any applicable rules as they exist today.


Photo of Mike Schroeder

Letter from Mike Schroeder

PWM President Mike Schroeder on the significance of Baird's 100th anniversary.

Baird 100 logo

The Past Is Prelude

It's not so much the number of years as it is the successes we've helped our clients achieve.

Sail boat on a calm lake

2019 Market Outlook

Baird's Investment Strategy Team makes the case for caution and patience in the New Year.

Female CPA working at desk

Be a Good Partner to Your CPA

Advice for keeping the tax return preparation process simple and cost-effective.

Two women working at a table

What Women Need to Know About Social Security

Tips for women looking to maximize their Social Security benefits.

Mother hugging two sons

Wealth Management in Real Life

A new Digest feature that helps readers tackle their most pressing wealth management concerns.

Close up of hand writing a donation check

A Smarter Way to Give

With donor-advised funds, you can respond to a natural disaster in a way that fits your broader financial plans.

Female hand holding a model of a house

Don't Put Off Your Estate Plan!

No matter the size of your family or bank account, the conversation about estate planning needs to be had.