(Bloomberg) — Republican lawmakers said they wanted to simplify the tax code so you could file your return on a postcard. It turns out the new tax law will be anything but simple for many affluent Americans, who are now inundating their accountants for advice.

“They made it a lot more complex for a lot of people,” said Jody Padar, CEO of New Vision CPA Group in Mt. Prospect, Illinois.

Clients are already asking how to exploit the changes, according to certified public accountants, lawyers and financial advisors. In some cases, the best advice is clear. For others, especially business owners, tax experts are scrambling to understand the full implications of the 500-page law, which changes the rates on individuals and corporations and eliminates or limits many popular deductions.

As a result, the new law could change the financial consequences of major life decisions for millions of Americans, such as who you work for, whether you move or re-model your home, how you get to work, and even whether you get married or divorced. If you make a substantial amount of money, the right decisions could save thousands of dollars.

President Trump signed the bill into law on Friday. That allows the Internal Revenue Service to begin writing regulations on exactly how the law’s more complicated provisions — notably the deduction for pass-through businesses — would be implemented. But many advisors are already starting to plan, and calculate options, for their clients.

Among the law’s most controversial and confusing provisions is a new 20% tax deduction for pass-through businesses, which are privately owned firms whose owners pay individual rates on the income they earn. That, along with a slashing of the corporate tax rate from 35% to 21%, is raising big questions about how to structure companies in 2018.

“I can’t believe this is going into effect in two weeks,” said K. Davis Senseman, founder of the Minneapolis-based Davis Law Office, who specializes in small businesses.
Senseman is dumbfounded because a different corporate structure might make sense for each of her 800 clients, she said. And that means each of them needs to re-examine the situation fast. The earlier changes are made in 2018, the more potential for tax savings.

Bloomberg News

But even the country’s leading tax experts say they don’t yet fully understand the implications of the new rules to calculate which option is best for clients. An analysis by a dozen tax professors identified a number of potential loopholes created by the pass-through break, and by the lower rate on regular corporations known as “C-corps.”

“We know we’re going to spend a lot of time in 2018 thinking about entity structure and helping clients decide whether they should be in a C-corp or a pass-through entity,” said David Scott Sloan, co-chair of global private wealth services at Holland & Knight in Boston. “We’re still trying to figure that out.”

The pass-through deduction could also create an incentive for more workers to quit their jobs and become independent contractors. But the law also could complicate the taxes of many Americans who are self-employed now, including so-called gig economy workers such as Uber drivers, New Vision’s Padar said.

Another frothy area of planning next year will be around transfers of money to heirs. The tax law maintains the federal estate tax, but it doubles the amount of wealth that is exempt from the levy after death and a related tax on gifts during a person's life. Starting in 2018, single people who die with about $11 million would not be subject to the estate tax, up from $5.5 million. Married couples can shield about $22 million from estate and gift taxes.

That should keep Sloan busy. "We're lining up appointments for January because of the tax-free gifting opportunities," he said. The higher thresholds expire in 2026 so some wealthy taxpayers may want to move now to transfer more money to the next generation tax-free.

Many salaried workers across the country — of varying income levels — will need advice on how much should be withheld from their paychecks next year after most of the law’s provisions go into effect in January. If they don't get withholding right, they could end up with a big tax bill in 2019 or an unnecessarily large refund, Padar warned. “That’s uncertainty for Joe Taxpayer that, to me, is something to be unnerved about,” she said.

Employees should also note that buried in the tax law are changes affecting commuters. The tax law eliminates a break that currently allows companies to deduct some of the cost of providing parking and transit passes. It also ends a $20 a month benefit to help cover the costs of employees who bicycle to work. The provisions could push employers to stop subsidizing their workers’ tabs for parking, mass transit and bike maintenance.

The legislation will also impact finances at home. That's because it caps at $10,000 the amount of state and local income and property taxes that taxpayers can deduct each year. Groups representing the real estate industry have said they’re worried that this could lower home prices, especially in high-tax, high-cost areas of the U.S. Also affecting homebuyers is a new cap on the mortgage deduction. For new purchases of homes, the deduction would be capped at loan amounts of $750,000, down from $1 million.

In addition, the law ends a deduction for home equity loans, which could make it harder for homeowners to borrow to fund projects like home renovations.

If you really want to maximize your tax situation, the law could even adjust your romantic decisions. Under current law, many two-income couples end up paying more in taxes by getting married. The law eliminates that marriage penalty for couples making less than a combined $600,000. So, if you've held off on getting hitched because of a tax hit, 2018 may be your wedding year.

But be advised: Those individual tax-rate changes are set to end in 2026 — after that, your marriage might have to be just about love. And top earners should still be aware that marriage could be expensive at tax time. Adding to tax bills for some couples is the cap on state and local tax deductions. It's limited to $10,000 for married couples, even though two single people can deduct $10,000 each.

Tax considerations are even changing for those getting a divorce.

Under the law, divorced taxpayers who pay alimony would no longer be able to deduct those payments from their income, and recipients of alimony would also no longer need to report the money as income. However, the provision doesn’t go into effect right away and instead applies to divorces finalized after Dec. 31, 2018. So, depending on whether you’re set to pay or receive alimony, you might want to speed up or slow down those divorce proceedings.

No matter what, accountants to affluent Americans aren't likely to have a restful holiday season. “We don’t have a year to figure it out,” said Greg Rosica, a contributing author to the EY Tax Guide 2017. “We have to begin planning today.”

Bloomberg News