Click Here To Listen To The Retirement Tax Services Podcast
Are you trying to learn how to deliver massive tax value to your clients? Then look no further. Retirement Tax Services Podcast, Financial Professional’s Edition is a show hosted by Steven Jarvis, CPA. Steven aims to bridge the gap between tax professionals, financial advisors and their mutual clients in their quest for reducing tax expenses in retirement.
If you think about taxes as a season rather than something that is ongoing in your practice as a financial advisor, then you are doing a disservice to your clients. Taxes impact our lives all year long, and preparation is something that should be included in your clients’ financial plans. In this episode, Micah Shilanski, CFP, will join the show to share his advice for ensuring your clients are always prepared for their tax bills, regardless of their business type or income level.
Listen in as Micah and Steven discuss how to create a process that leads to a path to success for your clients, as well as how to make a simple system that your clients can follow. You will learn why financial advisors need to do what they recommend for their clients, why it’s essential to get tax returns from your clients every single year, and how to prepare your clients for their tax bills.
Steven and his guests share more tax-planning insights in today’s Retirement Tax Services Podcast. Feedback, unusual tax-planning stories, and suggestions for future guests can be sent to email@example.com.
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We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.
Steven Jarvis: Hello everyone, and welcome to the next episode of the Retirement Tax Services Podcast, financial professionals’ edition. I am your host, Steven Jarvis, CPA. And with me today, I have the one and only Micah Shilanski.
Micah, thank you so much for being back on the show.
Micah Shilanski: Oh, Steven.
Micah Shilanski: Woo! Oh, round of applause.
Steven Jarvis: Yeah.
Micah Shilanski: Well, it’s a live audience crew because we are at the XY event, which is fun. Steven, I really appreciate you having me back on. We have some really exciting things to chat about today.
Steven Jarvis: Yeah, I’m super excited. There’s a couple of specific kind of interaction stories that we’re going to talk about as far as why we’re having this conversation. But really, it fits under kind of this idea that we want to push harder and harder to all the advisors we work with.
And that is the fact that if you think about taxes as having a tax season, a limited time of the year where you should be talking about taxes, you are doing a disservice to your clients. We got to think about this whole thing differently.
Micah Shilanski: That’s really the case, because taxes affect us all year long. Now, clients sometimes may only want to look at it when they get their taxes filed, but that doesn’t mean everything we do throughout the year has a tax effect.
How clients spend money, I’m going to argue, has a tax effect. Because if they’re spending more money and they’re saving all money in retirement accounts, then I got to come back later and I got to fill that income up in retirement, I need more money saved, which has a tax effect.
So, everything we’re doing has a short-term or long-term tax effect, and we need to make sure we’re doing a couple things in my opinion, Steven.
Number one, is we’re constantly bringing it to top of mind awareness to clients about the tax decisions and tax effects and that they need to bring us as the advisors into the mix before they make a big money decision.
Steven Jarvis: Yeah, that’s such a great point. One of the ways we talk about this with our team at Retirement Tax Services as we work with advisors, we make the distinction of tax filing season because there is still a deadline.
Micah Shilanski: That’s right.
Steven Jarvis: But tax season is 13 months of the year. And Micah, I know you bring up this really good point of setting the expectation with your clients, they need to come to us with any question that they have.
And you do a really good job framing this to your clients because some people might think, “Okay great. Well, I’ll tell my clients anything over $10,000 or anything over $50,000.” But you have a better way of explaining this.
So, how do you set this expectation with clients?
Micah Shilanski: Oh great. Now, I’m like, “I hope I say the right thing” because we didn’t pregame this.
So, what I talk about with clients is anytime they’re going to make a big money movement, a big money decision, I would love to be involved before they make that decision.
Now, Steven, the reason I say it this way is I want the client to use in whatever frame they think is a big money decision. Now, I will help narrow that down a little bit for them because sometimes they’ll come back to us saying, “What is a big money decision?”
Number one, anything that you think is a big money decision is a big money decision, and you are more than welcome to run up by us and make sure it’s on the same page.
Number two, the maximum threshold, depending on your tolerance, definitely anything over a $100,000, we would like to be involved in well before you make that decision. So, those are the two thresholds that I give.
Steven Jarvis: I love that you’re setting that expectation with them. And I really want to make it clear to our listeners that you have to set these expectations. People do not by default assume that there is a tax impact. And even if they do assume that, most of us are trained into, there’s a tax season of the year and that’s the only time we talk about taxes.
I was just recently onboarding a new RTS taxpayer and thankfully, they’ve got a great advisor who is very forward thinking with them. But their experience is so jaded with tax preparers that as I’m having this conversation with them, tell them how we work, they said, “Oh, so, that’s probably something we won’t talk about until …” They had questions right now. They said, “Oh, we probably won’t talk about that until February, March.”
And I said, “No.” I said, “Here’s a couple of things I need from you so we can get started, but we’re going to talk about that right now.” Because from my perspective, it’s always tax season because like you said, Micah, taxes affect everything we do.
Micah Shilanski: Now, this is a good time for advisors to (and this is something I’ve had a lot of success with, Steven) — is bringing stories into the case. Now, I never make my clients the bad person in the story.
And I always say, “You know what, Bob and Sue, I think you guys are going to do a fantastic job. You’re making really good decisions. Congratulations again on doing X.”
I do sometimes have clients — so not you guys, I know you’re going to do it right. But I’ve had clients, says, “You know what, I’m going to make this decision on my own.” Which is candid, it’s your money, but they don’t want to bring me into it because it’s not that complex. It’s pretty simple and they’re going to do it.
And then when I look at it, post, I’m like, “Ooh, if only you would’ve brought me in, I could have saved you $20,000 in taxes or $50,000 in taxes.” But it’s something that they hadn’t looked at.
Now, 9 out of 10 times, I may not be able to do that. So, you could come to me most of the time, it’s not like I’m magically going to have a tax wand and save a lot of money because you’re going to make a decision.
But that 1 out of 10 that I’m going to save you tens of thousands of dollars of taxes is really worth us having a conversation before you pull the trigger.
Steven Jarvis: Yeah, because with this tax value, it’s all about consistent actions over time. And so, I certainly can’t guarantee that in every year I’m going to find tax savings.
But that consistent process, having an approach to this, things that we can get our team involved so that there’s specific things that we’re reviewing, maybe even 37 different things that we’re reviewing on a tax return.
But we’ve got to have this consistent process so when those things come up, we’re in a position to do something about it. Because again, getting out of this mindset of there’s this narrow tax season, we’ve got to be doing a lot of this before the calendar year turns over.
And really, the more of it we can do before the decision is even made, even better. Because yes, for me, with a lot of clients, it’s a win if they come to me before the end of the year. But to your point, Micah, it’s an even bigger win, this is really gold standard if they’re coming to us before they’ve made the decision.
Micah Shilanski: Yes. I often tell clients that unfortunately, my time machine is still broke. So, it is hard for me to go back in time and fix things presently. So, if I can know about them in advance, we can really help.
Now, Steven, I think where this really comes up too, I’d love to draw some conversations I was kind of overhearing and kind of jumped into at the conference.
And one of the things that I was kind of hearing, I was hearing a tax preparer out there was talking about kind of the different services they offered and all these different things, but they made a comment that just kind of blew my mind.
They were like, “Well, if all someone needs is a 1040 file and all they are is a retiree, it doesn’t make any sense for them to hire a professional to do their taxes. They should really just jump on TurboTax and get it done.” And I’m like, “Holy crap, did you just say that?”
Now, if they would’ve said, “You know what, that’s not our specialty, that’s not our niche. That’s not where we deliver the most value,” I can a hundred percent back up that statement. Says, “This great. I’m really glad you’re niche-focused of where you’re going to deliver value.”
But to make a blanket statement that every retiree should just use TurboTax because it’s not that complex to do their taxes, is damn near malpractice.
Steven Jarvis: Yeah. And Micah, it’s one of those things where I can make a whole list of reasons that I can add value on a tax return regardless of how simple or complex it is. I mean, we can just go down those things. I mean, we can start really simple with, “Let me just hit the easy button for you so you don’t have to worry about it.”
And that’s for retirees who’d like to be enjoying their life and not having to get in and figure out how TurboTax or H&R Block actually works. Hitting the easy buttons value in and itself. And that’s the lowest hanging fruit you could possibly have.
But even on those relative (I’ll use very sarcastic air quotes here) — those simple tax returns, there’s so much value to deliver if we’re thinking about this outside of tax filing season.
Micah Shilanski: Yes. If all you’re thinking about is preparing a couple of documents, yeah, you’re probably right. I don’t know if you’re going to add … especially if your mindset is you don’t add value, then you’re damn right, you don’t add any value.
Steven Jarvis: Well, and maybe not in fairness, I’ll give just a tiny bit of a break to this person you were talking about because that is how almost the entire tax prep industry is thinking about this. That doesn’t make it okay.
Micah Shilanski: Well, all coke addicts think that coke is fine. So, I don’t really know if that’s a great example, but yeah.
Steven Jarvis: Yeah. So, my point is this is an industry shift that needs to happen. So, don’t listen to this and think Micah met the one tax preparer who thinks that way. This is an industry.
This is why we created Retirement Tax Services, because this model doesn’t exist out there of taking this mindset of we’re going to talk about taxes 13 months of the year. We’re going to make sure that we’re looking for these value-add opportunities to go beyond the transaction of filing a tax return and actually get to how do we deliver value.
Micah, I know another story that came up that I’d love for you to talk through, is this idea of, well, how do we work with someone who has variable income? What if they don’t just have a W-2 or they’re not just pulling social security or they don’t have this steady income state?
How do we work with them throughout the year and add value? And I think it was brought to you as almost this mystery of how could you possibly add value.
Micah Shilanski: Yeah. Again, I was talking with another advisor and it was another tax preparation service and was just chatting with them and just kind of overhearing kind of what they’re doing. And I kind of injected myself in the conversation and just asking some more questions.
And this other advisor had brought up to say, “Hey, well, what about commission clients that are generating commission revenues like real estate or something else, and their income’s not consistent. What do we do?”
Now, in my world, I just call that a variable income client. So, their income is not consistent for whatever reason.
And so, I was talking to the tax service and the tax service was like, “Well, just schedule a call and we can kind of talk about it and we’ll do our projections based on the income that they’ve made.”
And you know what? And again, I’m not trying to rag on the tax service, it’s just an interesting conversation. And it was a very amateur approach to a complex problem.
The amateur approach is … and this are features over benefits, of just saying, “Oh well, we’ll talk about it and fix it.” That’s not solving the advisor’s problem. Because I’m sitting on the advisor’s side. Let me tell you what exactly the problem is.
We help the clients with a tax projection to say where they’re going to be. The client does not report us all the income or that bonus income they get, they spent because they don’t want to tell us about it. Now, we’re off on their taxes at the end of the year. “Damn it, Micah, you said for me to make these quarterly tax payment, now I owe an extra $15,000 at the end of the year. Why can’t you do your damn job right?”
That’s what we get on the other end of this. So, we got to have a better solution then let’s have a one … I mean, we’re all passionate about this. But besides we can have a one-time phone conversation to solve this. That’s a crap answer in my opinion.
Steven Jarvis: Yeah. We need a system to address it. It can’t just be reactive. And again, to that point, this has to be a year-long conversation. If your solution is let’s wait till the end of the year and see what happened, no, that doesn’t work for me.
Especially in a situation with this variable type of income. But we’ve got to give the client a system for success of how are they going to know where they’re at. Because sure, at the end of the year is when I can do the most accurate projection because the year’s over and it’s not a projection anymore.
Super. Now, I know all the real data. Yes, that’s when I can get you the most exact tax amount. But that doesn’t help the clients.
What about in April when they’re wondering in … well, let’s not use April because that’s associated with taxes. What about in May or June when they’re like, “Ah, did I need to save that money for taxes? Am I okay on taxes? Do I need to set aside more for it?” And me saying, “Oh, let’s talk in February.” That’s zero value.
Micah Shilanski: That’s negative value.
Steven Jarvis: So, Micah, let’s make sure we go from complaining to solutions.
Micah Shilanski: I love it.
Steven Jarvis: So, how do you solve this for your clients?
Micah Shilanski: So, dare I say, our system is a process of success that we have in place. So, our process of success with our variable clients. So, we’re going to break this out and see if I’m going to run through a couple of different things. Please don’t feel free to jump in with any questions on this.
Number one, the problem that we have is communicating with clients their income … and let’s just take a self-employed person to make it really easy. This could also work for a W-2 person that’s commission based. But let’s take a self-employed person.
They get their income and they want to spend their income. The problem with that is IRS is a part of that, but they’re just not allocating enough. Or they say, “I’m in a 20% tax bracket,” they’re not. We got federal income tax. Okay, that’s one piece of it. But you also got self-employment tax, you potentially have state tax.
And so, they could be off like by double on their taxes. If they’re withholding 20% and you got 15% self-employment on top of that thing, they’re massively off on their taxes. So, we really got to address that, number one.
So, here’s how we address the income question. With all of our verifiable income clients, I want to level and streamline their pay. That’s really what I want to go for.
So, we cleared Schwab, so I’m going to use Schwab as our example. We’re going to set up an income bucket at Schwab and that’s for the cash flow. So, I want a hundred percent of their paycheck to go into … we also use this, by the way, for high-income earners that have a problem saving money. This can also work the same.
But I want to deposit 100% of whatever their net pay is into a Schwab brokerage account that’s just sitting in cash. And in our self-employed people, that’s their gross deposits are inside of there. Then every single month, we kick them out X amount of dollars.
So, let’s say they normally spend 15,000 a month and their pay range is between 12,000 and 25,000 a month. Great.
Well, then what we’re going to do is we’re going to seed it with a little bit of cash and then as the money comes in, we’re going to be kicking them out $15,000 a month.
Now, clients end up really liking this because now, it’s not like, “Oh crap, this month I only made 12, but I’ve already spent all my extra money.” Now, it’s we’ve streamlined their income, we’re forcibly saving some.
What’s the other thing this really helps them with? I can instantly see what their gross income is for the year. Because all I got to do is look at that account. What are the gross deposits? It’s super easy. And so, now, I get a really good bead on what that gross income is.
We then compliment this by sharing with them a Google sheet (one of our team members put together), which is just the Schedule C. That’s it, we didn’t reinvent anything.
We took the Schedule C from the IRS, we put the categories in a spreadsheet, and we did some basic tax math for them that they can put their gross income, they can put their expenses inside of there, and then it’ll kick out really quickly how much they’re potentially going to owe with self-employment tax, et cetera.
We let them know this is a very, very basic projection. This is not an actual tax return is being prepared. This is just to get us a swag to get us really close.
But what I like about it, Steven, at any time the client needs, they can jump on there and they can see where they’re at. They can put it in their quarterly tax payments. So, if they’re making quarterly tax payments, they can see kind of what that balance is going to be owed. We get to see that information as well. And so, it’s really cut down on our surprises around tax time.
Steven Jarvis: Yeah. That’s so beautiful because it not only helps you be more precise, but it gives you that real-time data.
And we’ve taken some steps out of it for the client, but the fact that it’s going straight into the account and then getting kicked backed out to them, now, you don’t have to ask them to provide year-to-date pay stubs. You don’t have to ask them your bank information.
For me, this is one of the reasons I love collaborating with financial advisors who are taking a proactive approach with their clients because you are describing things that as a CPA, like I don’t have access to do that. I’m not setting up accounts for my clients. That’s not a thing I do. So, that’s a whole level that I can’t even get to on my own.
And so, I love hearing about these kinds of things that advisors are doing. I love sharing with other advisors because I would love for all of the advisors I work with to be doing this. But this is where the collaboration can be so valuable, because there’s things that you can do, I don’t have access to do. And then I can add in the tax insight on top of that. So, this is super cool.
Micah Shilanski: Yeah. And this is not just for the self-employed side too. There’s a couple more things I want to talk about. But I use this a lot for clients that are going to retire in the next couple years.
So, let’s say a client comes to me and says, “Micah, we’re going to want to live on $8,000 a month in retirement income” and they’re spending 10. “But don’t worry when I retire, I’ll magically stop my spending.”
And so, what we’ll do is we’ll set up these same income accounts. I’ll put a hundred percent of their net pay inside these income accounts and start giving them $8,000 a month. And says, “Great news, why don’t we start it today?”
And let’s find out … what I tell clients all the time, Steven, is, “Hey, I’m not looking for the right or wrong inside of this. I’m looking for the real number. I need the real number you’re going to spend in retirement. The worst thing we could possibly do is lie to ourselves on how much you’re going to spend. And then we create an overspending issue. Let’s just work together, find the real number. And let’s see how that fits into the plan and how do we create that income for you that you’ll never outlive.”
Steven Jarvis: That’s so great. I think everyone listening should take a second and acknowledge to themself that we all lie to ourselves about money at times. All of us are guilty of this.
Micah Shilanski: Yes.
Steven Jarvis: So, instead of having some elaborate budgeting process or here’s my spreadsheet for listing all the different types of expenses you have, let’s just put it in account and see what happens. Let’s say, “Okay, if your goal is 8,000 a month, great, here’s 8,000 for the next month. Let’s see if you spent it all or not.” Then we have real numbers.
Micah Shilanski: And one of the other things that we love to do is our clients that are making quarterly tax payments, another easy hack inside of this for clients that are bad about doing that ,is we can do it for them once a month. We can journal money over to a separate tax account.
And no, we’re not making that payment to the IRS, just to be clear. But all we’re doing is a separate bank account. We’re nicknaming it “Taxes” and we’re moving that money into the account.
So, the client’s sees their Schwab statement that comes out, they have an income account and it says income on it, then they have a tax savings account, and we’re putting money aside for that tax bill which is coming up.
So, it’s a little bit more work on our end. But with our clients, they end up really liking it on the client’s variable income side because it’s helped remove some of that burden from them on how much they should be saving, how much they’ll be withholding, et cetera.
And the biggest thing where I made a mistake on this in the past, Steven, is I approached this as a one and done. I said, “Great, I’ll give you this spreadsheet. It’s super easy. You put it in here, tell us where the taxes are, et cetera.” And magically, thinking the clients were going to do this.
And so, it’s definitely something that in our value add process, we have to consistently follow up with the clients. All my self-employed clients, I want to see that P&L, I want to see where they’re at every single time we’re meeting, and let’s make sure we’re on track. I also want to see proof that they’ve made estimated tax payments.
Steven Jarvis: Yes, that proof is really critical. I’d like to just point out really quick for everyone listening that Mike is talking about this as what you should do with clients.
Pro tip, you can do this yourself as well. I definitely, anytime there is income coming into my account, personally, there is a tax piece of that for me. Because we should always be doing the things that we are preaching.
Micah Shilanski: So, in mind, just to share what I do every time, I have a spreadsheet that every time I get paid on a quarterly basis, and I pay myself X amount of dollars for kind of living expenses, et cetera. Then everything’s based on a percentage.
So, I put my gross deposits that come to me and I say, “Great, X amount percent automatically goes to taxes, X percent automatically goes to tithe, X percent goes to my PD budget, X percent goes to a team budget, X percent goes to the household and the rest of it kind of ends up in savings.”
And so, it’s made me live on a fixed cash flow, which is fantastic. That means the more income I make, the more it’s going to be savings, but it’s automatically gets taxes set aside.
Because Steven, I talk to advisors all the time (I’m sure you do), they’re surprised at their tax bill. Why are you surprised? Because, okay great, let’s say you don’t fully understand taxes. Totally fine. Work with Retirement Tax Services or go find somebody-
Steven Jarvis: Find someone.
Micah Shilanski: Find someone and don’t make taxes a surprise at the end of the year. You should know damn well what your tax bill is and your plan to pay that.
Steven Jarvis: Yeah. For me, there’s almost an integrity … not almost, there is an integrity piece to that. If I’m recommending for my clients to do things that I’m not doing personally, like that’s a huge issue. Like start with yourself.
So, you should be listening to this episode thinking both what do I personally need or do different and then what can I implement for my clients as well.
Micah Shilanski: Yeah. I think it’s fantastic. So, another really good takeaway on this is team training. Don’t forget that one. Because clients are going to call in with questions and you’re not going to be available and the team’s going to be like, “I don’t know why you set that account up. I don’t know why you have six accounts.”
And the team’s going to be thinking, “Oh my gosh, all you’re doing is taking what could be done in one account and you’re making it in four accounts” and it’s more paperwork for them.
So, this is one thing to really make sure you’re explaining to the team why this is of benefit directly to the client and how it helps them. Great team education. Anytime we’re doing something for the client, we got to step back and say, “Hey, have I educated, have I taught my team on this to help out?”
Steven Jarvis: It’s a great reminder, Micah, because some people might be listening to this thinking, “Hey, that sounds like more work.” Yes, it absolutely is more work.
But if we set up systems and processes and if we teach our team, if we can delegate to our team, this isn’t endless hours and countless days helping our clients with this. And oh by the way, this is a huge value add, so let’s figure out how to do it efficiently, for sure.
But yeah, we need to get this done. We need to get our team involved.
Micah Shilanski: Yeah, absolutely. Because your team is just a lifeblood in making this thing happen. And this is one of those things as well, this is a constant reminder to clients. And sometimes we can feel that says, “Oh my gosh, we talked about taxes every single time. We’ve talked about this every single time, do I really need to bring it up again?”
Yes, you do. Because while you and think we talk about it all the time, the client’s not thinking that, and we need to reprogram their brain for the last 30, 40 years of them not thinking about this.
Steven Jarvis: And it’s this annoying little thing where the IRS also talks about it every year. They expect you to file your return every year. Yeah, I mean, there’s kind of some mechanisms in place.
Micah Shilanski: But if you don’t want to, you don’t have to, right?
Steven Jarvis: That is true. You won’t be a good fit for Retirement Tax Services if you’re intentionally not filing your returns. That’s not something-
Micah Shilanski: It’s not a good way.
Steven Jarvis: That’s one of our screening criteria, is that we need to have a conversation first if you haven’t filed last year’s tax return yet.
Micah Shilanski: That is one thing we have brought on clients before that haven’t filed tax returns in a long time.
And I think you asked me at one point, “Isn’t that a deal breaker? I won’t work with them.” Or somebody did, forgive me if it wasn’t you. And it’s like it’s not a deal breaker if they haven’t, it’s a deal breaker if they won’t.
Steven Jarvis: They won’t, yeah.
Micah Shilanski: Because we’re all in a different place, we’re all in a different position, et cetera. That’s not our criteria for filtering out a client. But one of our three Ps is productivity. And we got to be productive and that means we got to be doing the things we’re required by law to do. And if you’re choosing not to file tax returns, you got a problem.
Steven Jarvis: Yeah. It’s not that clients can’t come with problems we need to solve, it’s that they’ve got to be willing to take our advice, they’ve got to be willing to work with us to solve it.
I’m a hundred percent there with you because we will have times where clients get engaged with us because of a love letter they got from the IRS, because of an issue they need to sort out.
And of course, we’re going to help them sort out that issue. But we’re going to get really clear upfront of, “Here’s what it’s going to take and are you willing to see that through and finish it out?”
Micah Shilanski: Yeah. I love it. And these are things that as you’re walking a client — at least in my experience, you’re walking a client through, you really got to empower the client, especially when you’re taking a hundred percent of their paycheck and putting it in a new bank account for this.
While we think, “Oh my gosh, it’s super easy,” there’s a little bit of control issues, a little bit of pushback that you get from the clients. So, you got to work with the client on that. You got to make sure they can see the money. You got to make sure they get access to the money.
We turn the Schwab account on. We’re for that account only, but they can transfer money on their own accord without us. Because we’re not trying to restrict them from their money. We’re trying to see their money and help them understand we got to put money aside for taxes and get ahead of it.
Steven Jarvis: A hundred percent. Love that reminder. Now, Micah, of course, we’re all about taking action because information without action has no value.
So, let’s talk about action items that we can recommend to listeners so that they can take this conversation we’ve been having and do something about it. So, you’re the guest, I’ll let you go first. What is an action item that you would recommend to listeners from this conversation we’re having?
Micah Shilanski: Boy, I thought as a guest, I’d be like number two. No, I got to go first? Alright. No, I love it.
I would see the first action, I’m going to take it from something you said, Steven, which was, advisors need to do this. Advisors need to have a spreadsheet or whatever system that you’re going to use.
Now, I use Lacerte to do my own tax projections. I get nerd out on taxes a lot. But I still use every single pay period, a simple spreadsheet that says this is my gross income, here’s where it’s going. And I have separate bank accounts set up for all of the money that I allocated, et cetera, so I can track my own thing.
Again, to your point, I do what I recommend for clients. My wife is really good at this. If we get into a question like, “Alright, should we do A or B?” She turns to me and says, “What would you recommend to a client? And that’s what we need to do.”
Steven Jarvis: Yeah, absolutely. Action item number one is start with your own. Make sure that that you are doing this from a place of integrity.
The action item number two then, is you need to apply this to your clients. There needs to be a system for this that your team understands and can speak to, to set your clients up for success.
And the way I would look at this, because you’re going to have lots of different types of clients, you need to have a process for making sure your client is not surprised at tax time.
So, that’s going to look different for each client depending on their sources of income. But the goal should be that they are not surprised at tax time. That is definitely one of the goals we work on with all of our clients is that we want no … I tell them, “I can’t make your taxes go away but we can work together so you’re not surprised during tax filing season.”
Micah Shilanski: Yeah. And another thing we didn’t talk about too much on this, but I’ll put it as the action item; always be talking about cash flow and any big expenses clients have in your meetings. That has helped me so much in sourcing from them potential big tax issues they may not be thinking about.
When I ask that question, “Any big expenses coming up?” And they can think about and kind of let … car always comes up, “Eventually, I need a new car.” So, that’s a standard one. But then they start talking about these other things and in my mind, I’m like where’s the money going to come from to fill this gap?
And so, that’s a great question you should always be bringing up with your clients because that’ll help you as the advisor foresee tax issues. And if you don’t know what effect that’s going to have on their taxes, that’s totally fine. Bring in a COI, center of influence, bring in someone that understands taxes to help get that answer.
Steven Jarvis: Last action item I’m going to recommend is that you get tax returns for every client every single year. I know I say it all the time, but not everyone’s doing it yet. And so, specific to this conversation to make sure you’ve got the context, to make sure you know this is actually getting reported correctly, if they’re actually following through on doing what you’re helping them try to do, you have to be looking at those tax returns every year.
Micah Shilanski: Absolutely. Steven, this has been an absolute pleasure. I just want to say thank you real fast for having me back on the pod. I really enjoy this. I love the content that you’re producing.
On my desk, on every desk, by your desk, plus in every conference room, we have the Retirement Tax Service Tax Guide. It is laminated, it is sitting there, we get the updated version.
I hear there’s one out there about California floating away. I don’t know about that one. You probably don’t want to bring that up. I want a copy of that one.
But that is handy so often because it has the key information that I need when I’m talking to a client. So, it’s very houndy. So, thank you so much for putting that together.
Steven Jarvis: Yeah, of course, Micah. Thanks for taking the time to be here. If you’re enjoying what Micah has to say, of course, go check out The Perfect RIA Podcast when you go out to wherever you listen to podcasts.
To give this podcast a five-star review, you can find that one. Because if you got to the end of the podcast, you’re enjoying something about what we’re saying.
So, Micah, thanks for being here. Thanks to everyone who is listened. Until next time, good luck out there. And remember to tip your server, not the IRS.
We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.
The information on this site is for education only and should not be considered tax advice. Retirement Tax Services is not affiliated with Shilanski & Associates, Jarvis Financial Services or any other financial services firms.