President Trump has said that he’s open to tweaking final legislation to appease lawmakers who want to let constituents continue to deduct state income taxes. Nevertheless, a number of other deductions of concern to your high-net-worth clients are on the block, and those clients may be asking tough questions.

“‘With the elimination of some tax deductions, will my effective tax rate go up? If so, should I consider moving to a state with no state tax such as Florida, Nevada or Texas?’” said Raffaele Mari, a CPA and RIA in Corona del Mar, Calif.

“My [HNW] clients are especially interested in the reduced pass-through tax rate,” said Lawrence Pon, a CPA with Pon & Associates in Redwood City, Calif. “Many clients seem to be in a hurry to incorporate to take advantage of this. Some are also living in senior facilities that provide medical services. The loss of the medical deduction will be a big deal for them.”

James McGrory, a CPA and shareholder with Drucker & Scaccetti in Philadelphia and member of the Pennsylvania Institute of CPAs, said his HNW clients living in New York, New Jersey, Connecticut and California are troubled that the state and local income tax (SALT) deduction is being eliminated. “They’re asking if they should prepay their SALT and real estate taxes for 2017,” he said.

“The answer,” McGrory added, “as to most tax-related questions, depends. If a HNW individual is subject to the alternative minimum tax (AMT) in 2017, he or she won’t receive any additional income tax benefit for making prepayments of SALT and real estate taxes. This leads to another question: ‘Will I be in the AMT in 2017?’”

“As a general rule, if your year-end tax projection indicates you’ll be in the AMT in 2017, paying the state and local taxes before the end of the year won’t matter as they aren’t deductible in computing AMT and you will not receive a tax benefit from the deduction,” added Martin Abo, a CPA and managing member of Abo and Company in Mt. Laurel, N.J. “Keep in mind that the more you prepay, the more likely you will end up in the AMT. You’ve got to run the numbers.”

If your HNW client isn’t projected to be in the AMT in 2017, he or she should try to prepay as much SALT and property tax as possible. “That would also apply to miscellaneous itemized deductions such as investment expenses and unreimbursed employee expenses,” Abo said.

One little-noted potential deduction change might affect HNW clients who are divorcing. “What’s proposed is that the payor spouse (typically the husband) will no longer be able to deduct alimony for any divorce and separation agreements and any changes to existing agreements executed after 2017,” Abo said.

Under the House bill, the deduction for alimony paid to an ex-spouse will be eliminated beginning Jan. 1. “The proposed law would preserve the deduction for those with alimony obligations in place on or before Dec. 31,” McGrory said. “The Senate bill retains the alimony deduction. In the wrangling expected during reconciliation between the House and Senate versions of [the bill], this may be one of those items that does not have a strong lobbying effort behind it. It could likely slip through the cracks to become law.”

McGrory is also recommending HNW clients consider contributions of appreciated long-term securities to a donor-advised fund before year’s end. Benefits include avoidance of income tax (at the capital gains rate) and the net investment income tax on the appreciation in the security; a charitable contribution deduction for 2017; and removal of these securities from the client’s taxable estate if they’re over the applicable lifetime exemption amount for gifts.