More On Tax Planningfrom The Advisor's Professional Library
- Annuities: Estate Tax The value of certain types of annuities may be included in an estate’s value. Understanding the intricacies of these inclusions is a critically important aspect of estate planning.
- Annuities: Variable Annuities Annuities are hot. The tax rules vary with the circumstances. Advisors must be aware of these intricacies when discussing annuities with clients.
This is the 18th in a series of 23 tax tips thatAdvisorOne 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: Hire a Qualified Expert
You would think that every taxpayer would try to take as many deductions as possible, yet because the tax code has become so complex and complicated, many would rather just “file the basics and pay the rest,” instead of spending their free time trying to learn the tax code in order to have a chance of saving more money. (Although I doubt most folks have that much free time!)
Once your clients have created a process for saving their tax documents, made it efficient, and organized their tax papers, they are ready for one of the most valuable pieces of advice you can give them:
Hire a Qualified Expert: The old saying “you get what you pay for” is very true, especially in the tax world. Help your client build a relationship with a qualified tax expert that will spend time answering their personal tax questions, helping them tax plan through life’s major events and working to continuously educate them on the changing tax laws. Remind your clients that the greatest tax savings never come at tax preparation time, because what they pay is based on the previous year’s tax decisions, making the need for a qualified tax expert throughout the year a must.
This approach isn’t rocket science, nor does it require anyone to extensively learn or research the tax code to save money year after year. But it can help your clients pay what they owe, with the help of a professional, instead of spending their time keeping up with an ever-changing tax code.