- Financial advisors say consumers should focus on current tax law when making year-end moves to cut their tax bill.
- Once there's a final version of the bill, however, be prepared to consult with your accountant and advisor.
Unless and until Congress finalizes the Tax Cuts and Jobs Act, financial advisors warn, be cautious about making big moves to sway your tax bill.
Senate Republicans said Friday they are confident they have the support needed to pass their tax bill. Should that happen, the Senate and House will need to reconcile the differences in their bills before presenting President Trump with a final version.
Financial advisors tell CNBC that uncertainty around what might or might not make it into that ultimate bill means that consumers should tread carefully. You don't want to do something that would be financially damaging if a particular change doesn't go through, said Erika Safran, a certified financial planner and founder of Safran Wealth Advisors in New York.
For now, focus on making moves that will benefit your overall financial situation regardless of legislative changes, she said — such as maxing out pre-tax contributions to your 401(k) plan and making charitable donations.
"Do all the things you can within the current framework," Safran said.
Once there is a final version of the tax reform bill, quickly coordinate with your financial advisor and tax professional, said Kevin Meehan, a certified financial planner and regional president for Wealth Enhancement Group in Itasca, Ill. They can run projections to figure out how tax reform provisions are likely to affect you, and what the right steps are to take.
"The main areas you're going to want to look at: Should I defer or accelerate income or deductions?" Meehan said.
Depending on the timing, there could be last-minute moves to make this year, as well as shifts in strategies going forward, said certified financial planner Barry Glassman, founder and president of Glassman Wealth Services in Vienna, Va.
"You've got to be nimble," he said. "Now that we know what we have, what do we do about this?"