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How Advisors Can Keep Up With Tax Changes: Jeff Levine

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As chief planning officer at Buckingham Wealth Partners, Jeffrey Levine’s expertise on the tax, estate and overall financial planning landscape is well-known across the industry.

Levine, a CPA and certified financial planner, sees his mission as a simple one: Never stop learning and helping to simplify the complexity of IRA rules, taxes and estate planning strategies for advisors, so they can use cutting-edge strategies developed to help clients keep more of their hard-earned money.

Via email, we asked a series of questions that touched on not only his professional knowledge but what he does off the clock as well.

1. What market indicator, industry statistic, regulatory change or advisor trend are you watching most closely right now and why?

Jeffrey Levine: It would be hard to come up with anything that’s been more top of mind lately than the proposed tax changes.

While it now appears that many of the larger potential changes that had concerned advisors and clients earlier this year (e.g., increases to the top ordinary income and top capital gains rates, decreasing the estate/gift tax exemption) will no longer occur, there’s still a lot on the table that has the potential to impact planning for years to come.

2. How has it been changing recently (2021) and how do you expect it to change (2022)?

Tax changes for 2022 and beyond have been a moving target all year. Earlier this year, President Biden submitted his formal budget request to Congress, which largely mirrored the proposals he had campaigned on en route to the presidency.

But when the first proposed draft legislation emerged from the House earlier this fall, its proposed changes were dramatically different than those which had been supported by President Biden.

And, since the release of that first draft legislation, the bill has undergone a number of substantial revisions, most of which have reduced the proposed changes’ potential impact on high-income and high-net-worth individuals.

Ultimately, I expect Congress to move the pared down (but still impactful to many clients) bill through before the end of the year. That said, 2022 could be another year where advisors and clients will want to keep a keen eye on Washington.

More specifically, earlier this year, the House Ways and Means Committee unanimously approved more significant changes to retirement account rules via what’s come to be popularly known as SECURE Act 2.0. In addition, there are a number of potential changes to the Social Security rules being discussed that could impact both workers and recipients of benefits.

Ultimately, it comes down to one simple idea: the only thing constant with our laws is change.

3. What would you suggest advisors do now or consider doing in the future about it?

Keeping track of changes in the law can be a daunting task for advisors, especially for solo advisors and small ensemble practices, where the same person often has to wear many hats.

But the reality is there’s no way you can possibly deliver the best possible advice to clients if you don’t know the rules of the game. It would be like trying to play poker without knowing that three-of-a-kind beats two pair. Sure, you can win a few hands thanks to good old fashioned luck, but if you play enough hands, you’re almost certainly going to be a loser.

4. Who or what critical source of information do you track, or follow online, to keep up with this or other trends?

When it comes to keeping tabs on potential tax legislation, I pretty much divide how I keep up with things into two separate areas.

First, there’s keeping track of where things stand at the current moment with respect to any changes. For that, I follow CSPAN, all the major news outlets, as well as a bunch of Washington insiders. Twitter is awesome for this as well, and when it comes to potential tax changes, three of my favorite follows are @LisaDNews, @RichardRubinDC and @elwasson.

On the other hand, there’s how I keep up with the actual potential changes and, for that, I go right to the source. Anyone who follows me on Twitter probably knows that anytime there’s a major change in the law or a really significant piece of proposed legislation, I’m reading the actual legislative (or regulatory, or other authoritative) text directly, and interpreting it and breaking it down myself.

That means keeping a close eye on both houses of Congress, a bunch of congressional committees, various federal agencies (e.g., the Department of Labor, the Treasury Department), as well as a number of other rule-making bodies.

Of course, once I finish my own breakdown, I’m reading just about everything I can get my hands on to see if there’s any other angle or interesting quirk I may have missed, so that I can be sure to share that with the broader tax and financial planning community as well.

5. Are you changing any of your work habits at this stage of the pandemic? Why/why not?

Yep. Starting to get back to something that more closely resembles “normal,” although I think that “normal” will never quite be the same as it was two years ago. At the very least, we’re still years away from that level of normalcy.

Nevertheless, I’ve begun to travel again to speak at conferences, for industry groups, etc. And after working from home almost exclusively for nearly two years, I’m starting to spend a little bit of time in the office, especially when there’s an opportunity for collaboration with others.

For the foreseeable future, when not traveling, I think I’ll be working from home about half the time, and in the office the other half of the time. Honestly, I really like that potential balance.

6. What’s your biggest hobby and what was the last event/activity you did related to it?

I love sports. I’m a hyper-competitive person and sports give me a great outlet to exercise those competitive demons. While I’ll play just about anything, if given my choice, I’d probably play basketball a few times per week. I had just started to play again in NY before moving to St. Louis late this summer. Have yet to find a good game (for me) here, but definitely on the lookout!

7. How about your latest community/charitable activity/event/cause?

A few years ago, we started what we wanted to be an annual tradition: buying holiday gifts for children in homeless shelters and delivering them on Christmas. A few years ago, we met up with Tyrone Ross to donate a bunch of stuff to a homeless shelter he’s passionate about supporting.

Last year, the pandemic kept us from delivering the gifts in person, but this year, we plan to resume the tradition by delivering gifts to a shelter in the St. Louis area. We’ve already started shopping and will continue to add to the haul over the coming weeks, before wrapping everything and getting it ready for the big day.

8. What book are you reading now and why?

I’m always reading something, because knowing “stuff” is a really big part of my job. But outside of work-related reading, I’m currently in the middle of reading Quantum by Manjit Kumar. I’m sort of obsessed with physics and why things are the way they are.

Quantum is largely the history of how the current quantum model came to be and the incredible debates that surrounded its development, most notably between Einstein and Bohr, two titans of physics and absolute scientific royalty. As luck would have it, quantum mechanics may be one of the few things in life more complicated than the U.S. tax code!

9. Any special holiday plan, activity or focus you’d like to share as we near year-end? Or a New Year’s resolution that you’ve decided on?

I’m not big into resolutions because it seems silly to me to delay making a change which you believe will provide some benefit until a future arbitrary day.

Instead, I try to adhere more to the Japanese business philosophy of kaizen. Roughly speaking, kaizen is a philosophy that espouses continuous improvement. There’s always something we can do better, some way in which we can improve. That certainly goes for me.

With that in mind, recently, I decided to make a significant change to my responsibilities to allow me to spend more time focusing on my family and my health. So, overall, just making an effort to tip the work-life scale a little more towards life this coming year.

10. Is there any other update/fact about you or a piece of advice/wisdom you’d like to share with our advisor audience? 

I’d simply say that, as noted earlier, the one thing constant in our industry is change. That presents advisors with an incredible ongoing opportunity to attract new business. Anytime that there’s change, there’s going to be people who want to understand that change, people looking to see how that change will impact their families, and people looking to know what steps to take in light of those changes. That person [who helps them] can be you. You just have to put in the time and effort.