As a financial planner, I’ve certainly been getting my share of questions about the recently passed tax reform. In this article, I’ll address some of the most common concerns I’m hearing from clients, but how the changes in the tax code will affect you specifically is something you should discuss with your tax accountant.

What’s changed about 529 plans?

These educational savings plans were previously limited to use for college. They have actually been expanded to allow their use for K-12 education — to pay for private or religious schools or home schooling — with annual cap of $10,000. That cap is not in effect for monies targeted for college expenses.

How about IRA conversions?

There have been some major changes when it comes to how IRA conversions are taxed, so certainly consult with a financial planner or tax accountant before you do anything in this arena.

Should home-buying or financing plans be rethought?

That depends. The mortgage deduction has been reduced to only be applicable to the first $750,000 — down from $1 million — so you may want to keep that in mind as you shop around for real estate.

How should the change in the standard deduction be dealt with?

The standard deduction being doubled may cost you money or allow you to save; it depends on your specific circumstances. The deductions for things like tax preparation, moving expenses and advisory fees are gone — but you still may be OK. The $10,000 cap on state and local taxes may hurt those in high tax states like California and New York, and with the deduction for dependents eliminated, those with kids — especially larger families — will be negatively affected.

Can you provide some good news about the change in handling deductions?

Yes! You’ll be able to deduct more medical expenses. The previous limit was 10% of gross income; for 2019  it will be 7.5%. And, those who choose to take the standard deduction will save time by not having to focus all year on recordkeeping. Some of my retired clients are pretty happy about that.

Will it be advantageous for business owners to change their operating structure?

This is a question for a tax accountant, but it certainly seems worth exploring. Businesses that can show pass-through income — like LLCs and partnerships — are treated kindlier in the new tax code. Definitely be cautious when making any change, as moving from being an employee of the business to the business may mean you’re responsible for your own healthcare and you may have increased liability if something goes wrong.

Is the IRS going to be able to keep everyone in line?

More than a few clients are concerned about this, since the tax code has gone through such a huge change that certainly will take a while to digest. They wonder if there will be widespread cheating — but all I can say is to listen to the advice of their tax accountant.

What kind of tax planning should be done now?

Certainly, that’s up to you, but I’d suggest not doing anything major until we see how the dust settles. You probably won’t be paying as much in taxes in 2018 and 2019, but the long-term outlook is murky at best.

What are you hearing about the changes in general?

Overall, my clients seem to be resigned about this major change, seeing it as being politically motivated but understanding this is what it is and now we have to live with it. People in California and the Northeast seem to be the most concerned.

My clients also see this as something that’s advantageous to the very wealthy, but they’re unsure how it benefits the average person. And, they wonder how the tax cuts are being paid for, hoping Congress isn’t sacrificing future generations by increasing the deficit.