The effects of the Tax Cuts and Jobs Act on FinTech

January 5, 2018 by John Heinen

The United States Capitol where the Tax Cuts and Jobs Acts was passed

about the author:

John Heinen

Chief technology officer

As chief technology officer, John provides strategic, operational, and programmatic support of our products to the greater Advicent organization, our partners, and the industry. He leverages his decades of software development and product management experience to define business and product strategies, work directly with clients in providing technology solutions, and build product and service delivery organizations that deliver results while meeting regulatory requirements.

With the passage of the Tax Cuts and Jobs Act, many financial professionals and consumers are concerned about the effects of this legislation on both personal and business finances. Advicent has been closely monitoring the various iterations of the Tax Cuts and Jobs Act and are in the process of determining the impact to our software.

The final version of the legislation includes tax rate cuts for individuals, corporations, and businesses. Furthermore, there are eliminations of various tax deductions and the personal exemption and larger exemptions for estate tax and the Alternative Minimum Tax (AMT).

From a planning perspective, it appears that middle-income taxpayers will save money on their final Federal tax bill. Other changes will also influence retirement planning beyond individual and pass-through business taxation, including the re-characterization of IRA contributions, the elimination of the deduction of investment expenses, elimination of the personal exemption reduction of the mortgage deduction, and others.

Because every situation is unique and with the reduction of certain exemptions, however, working with a tax planner on the full impact is very important for consumers.

It is our goal to analyze and incorporate the changes applicable to our software quickly so financial professionals can continue leveraging the calculation accuracy of NaviPlan that they have come to expect.

I recently spoke with John Manganaro of PLANADVISER to discuss the industry effects of the Tax Cuts and Jobs Act and how it not only impacts our technology but also FinTech at large.

To read the full article on PLANADVISER, click here.