Tax Planning Advice: Create an Efficient Process for Clients—Andrew Rice

Helping clients create an efficient process for gathering tax papers can result in better, more effective tax planning all around. No more shoeboxes

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This is the 14th in a series of 23 tax tips that AdvisorOne will publish on each business day in March as part of our Tax Planning Special Report (see our Special Report calendar for a more complete list of topics to be covered and experts who will deliver their insights).

The tax tip today comes from Andrew Rice (below), vice president and CFO of Money Management Services, Inc., an independent RIA firm in Birmingham, Ala. He is an Accredited Investment Fiduciary, Certified Tax Specialist and Wealth Management Specialist. Rice holds a BS in accounting from the University of Alabama-Birmingham. Rice writes regularly for AdvisorOne about tax planning issues.

The Tip: Create a Process and Make it Efficient: Part 1

You may have seen the TV commercial by H&R Block, “Never Settle for Less,” which offers a second look at the tax returns for the residents of Greenback, Tennessee, to see if H&R Block can get additional money back for them. What a great advertising strategy to build customer loyalty and branding. 

Simply asking questions and looking at information which the taxpayers overlooked or didn’t know was deductible can result in a tax refund for many clients. It’s that time of year, so I’d like to recommend a basic tax-saving strategy, which will serve your clients well this year and for years to come:

Create a Process: With everything we do--whether it’s our job, fixing dinner, mowing the lawn, paying our bills or getting ready for work--we each have some general process that becomes repeatable. So encourage your clients to establish an easy, repeatable process that will help them prepare throughout the year, all those tax receipts and documents they will need for tax filing season.

Make the Process Efficient: Not only will a process help save your clients money come tax time, but the more efficient the process is determines how much it will save them. The old method of throwing documents in a shoe box and dropping it off at the accountant’s office is surely not a process and completely inefficient. So have your clients create a process efficient enough that there’s no need to search high and low for all the tax documents come January and February, and eliminate the final “give-up strategy” which defaults to “file the basics and pay the rest.”

Of course, it’s always your clients’ money and they’re welcome to give the government more than they deserve each year, but I suggest you help them “never settle for less” by recommending they have a process, and make it efficient, organize their documents and hire a qualified expert.     

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