It’s tax season! And I just realized this is the 20 year anniversary of my last busy season preparing tax returns. Fond memories – truly. As I reflect on those years, aside from the tax planning strategies I gleaned, I learned so much about HOW financial advisors can best work with tax preparers. Here are some best practices that shape how The Joseph Group works with our clients’ tax professionals:
- Stay in our lane: At The Joseph Group, we like to let other professionals do what they do best so we can do what we do best. As examples, we counsel our clients on estate and insurance planning, but we don’t draft estate documents or place insurance coverage. Likewise, we advise on and implement tax planning strategies, but we don’t prepare tax returns or tax projections. Instead, we partner with our clients’ tax professionals to determine the best planning strategies and let those professionals quantify and report the outcomes.
- Communicate: Oftentimes, advisors implement tax strategies without informing a client’s accountant. When that happens, the strategy breaks down. Planning strategies such as the Back Door Roth IRA contribution or the Qualified Charitable Distribution are not obvious from the 1099-R tax document provided during tax season. These strategies require someone to let the tax preparer know what took place. For that reason, The Joseph Group builds into our process a step to let our clients’ tax preparers know when these types of planning strategies are employed.
- Sense of urgency: Everything is time sensitive during tax season. That’s always been the case, but in 2008 when the IRS changed the deadline for 1099s from January 31st to February 15th, that put even more pressure on tax preparers. Quick responses from advisors and clients is very appreciated! To that end, we are always quick to turn around requests for tax documents or to assist with any other need accountants may have during busy season.
The Joseph Group’s commitment is to simplify, clarify, encourage our clients’ great lives. Do you see any connection to the best practices above? That commitment isn’t just a saying, it’s how we work. Our hope is that our accountant friends can say the same thing mid-April. Be encouraged!
Written by Todd Walter, Partner and Chief Wealth Planning Officer