As I reflect on my career as a tax professional within the environment of a wealth management firm, I think about the types of client situations that have given me the greatest satisfaction: “Doing taxes” for a husband and wife; continuing to serve them as their family grows; giving advice as their financial situation becomes more complicated; and then handling the taxes for their children and sometimes even grandchildren. Developing strong relationships such as these with multiple generations of a family is one of the most gratifying aspects of my career. Being in the position to serve as a trusted advisor to such fine individuals is a privilege. Also, being able to select and build an amazing team of tax professionals to create a full service, in-house tax department is another great source of pride. The team we have at Pennsylvania Trust — the wealth management team and the tax department team, in particular — includes some of the most talented, hardworking and compassionate professionals I know.
After almost 40 years as a CPA in the business of tax planning and preparation services, I suppose I’ve prepared more than 5,000 returns for clients. That’s a lot of 1040s! I’ve seen the tax laws change significantly, experienced the transition from paper to electronic filing, handled personal returns as well as fiduciary returns, and I’ve adapted to multiple changes in software systems that help us do our work. As the tax season approaches each year, my team and I buckle down and undertake a rigorous work schedule that is different from the rest of the firm. Mandatory six-day weeks and 14-hour days are the norm from about the third week in January until April 15. Our team works closely to support one other during this time, knowing that the extra hours are required to get the job done.
This year, we have the new tax law to consider as we prepare our clients’ returns. The Tax Cut and Jobs Act of 2017 changed the way people have looked at taxes for the past 35 years. From reducing tax rates to eliminating many itemized deductions, to raising the Alternative Minimum Tax threshold (AMT), to almost doubling the standard deduction and allowing a higher amount of deductible charitable giving (60% of AGI)… these changes and more are the issues we will consider as the tax season unfolds in earnest.
A few comments on specific tax law changes: For individuals who are age 70 ½ or older, making charitable donations directly from their IRA in full or partial satisfaction of their required minimum distribution (RMD) may be the most tax efficient method of giving. Their gross income is reduced by the amount of the donations. The AMT threshold and standard deduction are both increased this year, while the deduction for state and local taxes is now capped at $10,000. We will need to evaluate whether each client will still file by itemizing deductions or by using the now-increased standard deduction.
Upon my retirement, I will continue in a part-time capacity during the 2019 tax season — my 40th. My successor, managing the Tax Services Group, is my very capable colleague, Senior Vice President Francis (“Fran”) Mehaffey. Fran came to Pennsylvania Trust in 2014 after 25 years in the tax department at Glenmede in Philadelphia. With deep knowledge of our company, our clients, and the tax code, he has a particular specialty in dealing with nonprofit clients, and he handles all types of personal income tax and fiduciary returns. Fran will continue to be supported by the other members of our tax team: Vice President Diane Ferrie; Vice President Jeff Biberman; Tax Officer Sue Schafer; and our temporary tax season professionals. As I continue to help out during “busy season,” I will keep my eye on Lewes, Delaware where I plan to spend more leisure time. As the weather improves, I will also relish taking time to ride my motorcycle — the one hobby I enjoy. No more waking up routinely at 4:00 a.m. to get to work by 6:00 a.m. during tax season. Time to smell the roses!
Randy G. Thomas, CPA CFP®