Clients may not be fond of filing taxes, but advisors can limn clients’ financial lives using the 1040 form
Every spring, advisors help their clients get their tax information together for their accountants. They may even do the tax returns themselves. But how many advisors see Uncle Sam’s 1040 form as more than just a collection of boxes and numbers that results in either a check to be made out to the Treasury or a check you get from Washington? Benjamin Tobias is one advisor who sees more. A CPA, CFP, and president of Tobias Financial Advisors in Plantation, Florida, Tobias also teaches other advisors how to mine clients’ tax returns for questions and answers that may lead to new planning business.
In a presentation at this year’s FPA Retreat in Colorado Springs, Colorado, Tobias went through a number of questions advisors might pose after poring over a client’s 1040. For example, an item as simple as alimony payments can trigger a discussion of a client’s marital status and any obligations to previous spouses. Or an entry for rental property income on Schedule E might get the advisor and client talking about what the property is and whether it’s something that is being rented to the client’s business. Entries for real estate taxes, meanwhile, can lead an advisor to ask whether the client has a vacation home and whether it is being rented out.