RTS #064 Congratulations! Do your clients ever hear that?

We spend a lot of time (actually, almost all our time) working alongside taxpayers who work with Financial Advisors. One of the things I go out of my way to do is congratulate taxpayers on their tax and financial successes, and they love it.

It may seem like a simple thing but most of the time, even when they already work with a great Financial Advisor, no one has ever stopped and said “hey I just want to say congratulations on the level of income you’ve reached, that’s a ton of hard work and not many people ever achieve that”. I say this to almost every new client an Advisor introduces to us and people’s faces just light up.

And it’s not a throw-away line or something I say to patronize anyone. When I’m talking to a new client, I have already reviewed their tax return and can see the level they’ve achieved (it does not take nearly as much as you think to be in the top 10% of income earners in this country). So often when taxpayers work with financial professionals it is all business and no celebration, I can promise you that your clients would love to hear more of the celebrations.

Starting this early also helps build a foundation. I tell clients and advisors both that the best way to get ahead with the IRS (aka minimize their lifetime tax bill) is to consistently take small actions over time. Small actions add up, but they aren’t always exciting in the moment if no one is bringing attention to the impact they are having.

So when we are working alongside our Premiere Members or simply completing an annual tax return filing we are on the lookout for planning we have done together and showcasing how it comes through on the tax return. Which means you can take your 37 point checklist for reviewing tax returns a step further and use it as a guide for things you can highlight to clients on their next tax return.

Things like:

• Roth conversions
• Retirement plan contributions
• Capital gains and dividends that were taxed at a preferred rate
• Intentional charitable giving
• Elimination of underpayment penalties
• Improvements in the outcome at tax time (helping them have the refund or payment they want in April)
• Business expenses you helped identify
• Investment income

The list can go on and on and you should be customizing it for the clients you serve.

And you should be quantifying the impact of these for your clients. Remember that people don’t naturally think in percentages, don’t stop at pointing out the QCD you helped them complete, highlight the amount AND the amount of taxes that were saved.

Taxes by default are painful and frustrating, little things like this help reshape a clients experience around taxes.

Happy Tax Planning!