A group of financial services associations in the US has urged the Congress to restore the deductibility of investment and financial planning advice to enable its citizens to navigate the crisis caused by the Covid-19 pandemic.
The tax benefit was repealed in 2017 with the introduction of the Tax Cuts and Jobs Act (TCJA).
The groups seeking the restoration are the Investment Adviser Association (IAA), Certified Financial Planner Board of Standards (CFP Board), the Financial Services Institute (FSI), the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).
The associations are also seeking to expand the tax deduction for financial planning advice.
Previously, only those taxpayers whose advisory fees were more than 2% of Adjusted Gross Income (AGI) were eligible for the deduction.
The associations are now calling for the elimination of the 2% threshold.
CFP Board CEO Kevin Keller said: “The repeal of the deduction may have appeared inconsequential with 2017’s rising stock market, sustained job growth and slowly increasing real wage growth.
“But in this moment of crisis, millions of Americans, including many near retirement, are watching the money they worked so hard to earn and to save evaporate virtually overnight. It is crucial that they have affordable access to competent, ethical advice now and in the foreseeable future.”