Key Points:
- What Tax Planning Is and Why It’s Important
- Tax Planning: An Integral Part of Comprehensive Financial Planning
- Identifying Tax-Saving Opportunities
- Must have deliverables:
- Current Year Analysis
- Multi-Year Tax Forecast
- Scenario Analysis (easily understood graphics are preferred)
Introduction
Diverging from the standard long-form blog post, this is really just an intro for the video I did diving into the topic of tax planning, an area I consider a strength of Purpose Built since tax preparation is integrated into financial and tax planning. We’re starting from a position of already intimately knowing your tax situation.
Integrated tax planning is an invaluable asset for our clients. In fact, the only thing a planner can offer of higher value than tax planning is behavioral coaching to deliver high returns, making it a service you can’t afford to ignore.
As a flat-rate fee-only planner, we also provide this service to all of our clients. We don’t rank our clients behind the scenes as is the industry standard for the percentage of AUM advisors, with only the top A-clients getting proper tax planning (did you look at the chart? Do you know what tier you are?!?!).
Each of our clients receive the same high-quality deliverables.
What deliverables do our clients get?
- Current Year Analysis:
- We provide a detailed breakdown of your expected tax scenario for the year, identifying potential tax-saving opportunities within the current year.
- Multi-Year Tax Forecast:
- This includes forecasts for the current year and extends for several years, as well as the initial year of Required Minimum Distributions (RMDs) to quantify and analyze how your tax rate will change over time.
- Scenario Analysis:
- The ability to play “what if” by examining how various strategies will impact tax rate and liability. Our scenario analysis tool will allow you to graphicly see the impact, helping you better understand the recommendations.
But without further ado, here is the video:
Frequently Asked Questions (FAQ)
Q: Who is tax planning for?
A: Tax planning is for anyone interested in minimizing their overall lifetime tax liability.
Q: What are some of the tax opportunities that might be identified?
A: Tax-efficient retirement vehicles, capital gains forecasting, “filling up” lower tax brackets, charitable giving strategies, and Roth IRA conversions are some of the key areas we focus on but there could be many more if you are a solo entrepreneur.
Q: What does a Multi-Year Tax Forecast involve?
A: It begins with the prior year’s tax return. Then we use your current year paystubs to pace out income and withholding information, layering on information from you on bonus forecasts and other income. Subsequent years are completed using income information jointly prepared with you. The initial year of Required Minimum Distributions (RMDs) information is forecast using your comprehensive plan detail.
Q: What is covered in a Current Year Analysis?
A: It provides a detailed breakdown of your expected tax scenario for the year, including the identification of potential tax-saving opportunities.
If you have any questions about tax planning, about what tier you think you’re on with your current advisor or want to explore how a Flat-Rate Fee-Only structure can help you achieve your goals, set up a time to talk.
Your financial well-being is too important to leave to chance. Choose wisely.
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