In this “unprecedented time of mass unemployment,” the advisor services tax deduction that was eliminated as part of the sweeping tax overhaul that went into effect in 2018 is needed by struggling Americans and should be restored, according to Skip Schweiss, managing director, Retirement Plan Solutions and Advisor Advocacy at TD Ameritrade Institutional.
“Now more than ever, Americans need financial planning and investment advice help and we think that they ought to have a tax deduction to access that help,” he said Thursday during a Live Q&A Washington policy update webinar.
Before the tax overhaul, the deduction was allowed only for taxpayers whose advisory fees exceeded 2% of adjusted gross income (AGI).
The deduction “ought to be available to everybody,” including the “35 million people who have lost their jobs” so far during the COVID-19 pandemic, he said.
This is “something we’re really pushing” for, he said, noting TD Ameritrade joined a letter-writing campaign to push for it with the Financial Planning Association, Investment Adviser Association and other groups that have been directing clients to send letters to elected representatives in Congress to convince them to support the deduction’s restoration.
Professional services firms including RIAs are also among the companies who did not benefit from the law’s pass-through tax dreduction of 20% that many companies were allowed to claim, he said, noting his firm continues to push for a change there also.
“We have been making our views known to Congress…. that we really think that should apply” to advisory firms also, and it’s something “we continue to work on,” he said.
SEC Reg BI Deadline Approaching
On the Securities and Exchange Commission’s Regulation Best Interest front, Schweiss said it’s been the “culmination of a long and twisted road in terms of raising the standards of care for investors.”