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It’s key to get ahead of the 2018 tax season: Advisors

  • There's no one-size-fits-all approach to addressing tax law changes, say advisors. They caution taxpayers to just roll up their sleeves and start planning for 2018.
  • Advisor clients in high-tax states such as California and New York will have extra work to do as so-called SALT deductions for state and local taxes disappear.
  • Short-term tax relief is fine, but the jury is out on the long-term economic effects of recent tax reforms — and that's keeping some advisor clients up at night.

The new federal tax-reform law made some substantial changes to the U.S. tax code and obviously has a major impact on American taxpayers' financial plans.

We spoke with several members of the CNBC Digital Financial Advisor Council and had them weigh in on strategies they are recommending to their clients based on the new tax law.

The new law will affect millions of taxpayers in 2018, when most of the provisions kick in. That's why understanding how it will impact you is so important, these advisors said. Planning now can help you sidestep some pitfalls while maximizing your returns next year, they explained.

"It's an individual thing on how it impacts people," said Ron Carson, founder and CEO of Carson Wealth Management Group. Since the tax law changes will have an impact next year, Carson said it's key for taxpayers to "just get out, sit down and talk to your advisor."

Carson said it's important to anticipate if there are any changes or adjustments that need to be made.

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"For example, with interest rates so low, maybe some of the things you are doing to defer taxes no longer make any sense," he said. "It's an individual decision.

"There isn't any rule generalization," Carson added. "You need to roll up your sleeves and do the planning."

The GOP tax law caps state and local tax deductions at $10,000, which is well below the average amounts claimed by individuals residing in states such as New York, California and New Jersey.

Cathy Curtis, founder and owner of Curtis Financial Planning in Oakland, California, said that's a big concern for her clients in the Golden State.

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"Tax reform is a big deal for my clients in California, because we're a high-tax state and they are looking at the loss of several SALT deductions," she said. "It's going to cause a lot of my clients a bigger tax bill.

"Some of that will be offset by the lower tax rates, of course, but it kind of depends on what tax bracket you're in."

The national economy has been strong, and forecasts for next year have been bumped up a bit due to the tax cut. However, there's a lot going on right now, and there's no way to tell what the long-term economic impact will be from the tax changes. With that said, that's what is keeping her clients awake at night, said Carolyn McClanahan, founder and director of financial planning at Life Planning Partners.

"My clients are excited about saving money now, but they're worried about what [tax changes] are going to do to the economy and its impact on the deficit," she said.

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