Executive Summary

TAX REFORM
Tax Reform is a very volatile subject as Congress prepares to move on changes for the
upcoming tax season. As a tax preparation company, understanding the reform will be
paramount to the success of any business completing individual income taxes, either as a fee
paid service or for free. Understanding how the public understands sections of the tax reform,
as well as general knowledge of how tax liability is determined. The best way to determine the
ability of these individuals to fully understand the impact of these changes we need to first
determine where the center of knowledge exists.
For this purpose, a ten-question survey was created and shared through social media and email
to find individuals of different demographic characters. For this survey, individuals of all filing
statuses, other than widowed, were targeted and responded to the survey. Portions of the
survey were centered on the Student Loan Interest deduction. It has been my experience as a
Sr. Tax Consultant, that most individuals who pay this interest do not understand the process
and how it potentially decreases their tax liability.
Out of the fifteen responses, 53% of the individuals were unaware of the basic tax reforms
currently in front of congress. Only 29% are currently using the deduction on their taxes. The
student loan deduction is an above-the-line deduction and reduces tax liability by decreasing
the Adjusted Gross Income (AGI). The survey asked individuals, if they understood how the
above the line deductions impacted the AGI and 80% do not. When asked directly if there was a
deduction on their prior return for the interest 67% replied yes. The outcome of these directed
questions shows that when clients are having their taxes prepared, they will not understand
how the elimination of the student loan interest deduction has increased their tax liability.
Overall knowledge of the tax preparation for individuals, was reported at 3 or below on a scale
of 1-10 by over 50% of the respondents. It is apparent that the knowledgeable tax consultants
within our offices can make an impact on these results by educating their respective clients
regarding their return. Research has not been completed by 80% of the respondents, giving us
another avenue to educate theses same individuals on what impact they may have for changes
they are in control of.
In conclusion, it is apparent that our associates can make an impact on our clients by
understanding tax reform issues and being able to apply the changes on everyones return this
season. By educating them on hot tax topics, such as student loan interest, that may impact
them in a negative way we can continue to build loyalty within our returning client base. The
overwhelming response to the final question on the survey, indicates that most individuals feel
that taxes in general are a larger burden on the middle-class. Our final call to action, as their
tax advisors is to arm them with the knowledge they need to understand these changes.