Tax Planning Advice: Look at Last Year’s Return—Bernard Kiely

Yes, The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, whose provisions became effective Jan. 1 after a compromise was reached between President Obama and Congress, changed many provisions of the tax code, especially when it comes to estate planning and other tax planning issues of interest to advisors and their clients.

However, Bernie Kiely (left) still recommends that when doing any kind of income tax planning that you start at the beginning, that is, with last year’s return. In his presentation for NAPFA University, where he serves as the dean of the fee-only planning group’s School of Taxation, this is the first step that Kiely suggests to other planners as a way to forecast the coming year and find any mistakes that might have been made the year before.

A two-year trend analysis, he argues, will pinpoint differences in income, gains and losses, taxes and the phaseout of deductions that may need to be replaced in the coming year, as well as highlighting anything that might have been missed.

See our Tax Planning Special Report calendar for a list of all the topics covered in our month-long special report.