The Wealth Counselor
Help Your Clients Save at Tax Time
2016 WORKSHOP SERIES. Our last workshop in the 2016 series will be held on October 27th, from 4:00 - 5:00 pm, at First Financial Northwest Bank in Edmonds. This free workshop will cover year-end tax tips. Space is limited, so please make sure to register by clicking the "Upcoming Events" box at www.soundestateplanning.com.
6 Important Conversations to Have with Your Clients Before the Hustle and Bustle of the Holidays
As summer gives way to fall, it’s time to start thinking about year-end tax planning. This is an opportunity to communicate with your clients, offer solutions, and deepen your relationship by helping them save thousands of dollars next spring at tax time.
To help your clients make the most of these opportunities, here are five conversations you can have with them before the holiday season sets in.
1. Discuss any tax changes for 2016 that might affect the client. Yearly changes in the tax rules can either save or cost them at tax time. Since you’re already familiar with your clients’ financial structures and strategies, you can determine which of your clients are affected by tax law changes, using that conversation as an entry point to a discussion about year-end tax planning. By acting now, your clients can optimize their outcomes.
Earlier this year, the IRS released perhaps the most significant regulation change in decades. You’ve undoubtedly heard about these in the news or on a webinar as the “2704” regulations, the “valuation” regulations, or the “minority discount” regulations. Although these regulations are not yet final, they might substantially impact your clients’ estate plans when the IRS finalizes them, potentially as early as January 2017. If you have any questions about these new regulations or have any clients that you think might be affected, we’d be happy to discuss their impact on you and your clients.
2. Offer a review of your clients’ investment portfolios.
A year-end review of a client’s investments can often reveal unseen opportunities to reduce taxes. For example:
For clients who do not yet have an IRA, 401(k) or other retirement savings account, opening a new one now gives the client an immediate opportunity to manage his/her tax burden. Since taxes are deferred on these accounts until they are cashed out, any extra income that can be put into the account between now and the end of 2016 will reduce your client’s taxable income for the year, as well as start building wealth for the future, a win-win.
4. Discuss options for year-end giving.
Year-end giving is another proven method for reducing your clients’ tax burdens for the following year, and opening up this conversation with your clients can also lead to additional opportunities to discuss longer-term tax savings and wealth building strategies. For example:
5. Suggest other tax-saving strategies.
Since everyone’s financial situation is different, there may be other specific year-end financial moves that do not fit into any of the other categories above, but which would still effectively reduce your client’s tax burden. For example, after review, you might suggest some of the following:
During the year, many people get raises, lose jobs, start new businesses, sell homes, refinance, and so on. Any significant increase (or decrease for that matter) in income calls for an adjustment in tax planning to prevent unwanted surprises, and the fall season is an ideal time to assess these changes. For most tax problems, there’s a solution.
If you would like to know more about opportunities between tax planning and estate planning, such as charitable giving or the "2704" regulations, just give us a call.
Sound Estate Planning, PLLC • 152 3rd Ave. South, Ste. 107 • Edmonds, WA 98020 • (425) 967-7287