Read The Transcript Here:

Steven Jarvis, CPA (00:53)
Hello everyone, and welcome to the next episode of the Retirement Tax Services Podcast, Financial Professionals Edition. I’m your host, Steven Jarvis, CPA, and I am so excited to wish you all a happy new year and happy tax planning in 2026. As we kick off the new year, I wanna take a minute to share some year-end reflections from the end of 2025 and some great year-end tax planning that I saw and got to participate in. And then set some expectations for 2026. Talk about some things that you need to be keeping in mind for this coming tax filing season. A couple of reminders on 03BA, the big beautiful bill act, as well as some other exciting things coming from RTS this year. So we’ll get back to having some really exciting guests in the coming weeks, which we’ve got a great lineup. The Retirement Tax Services podcast was featured on the Kitces top list of podcasts this last year, alongside the summit on the list of top conferences for financial advisors. So a lot of exciting things going on. So a huge thank you to all of you who listen so regularly. And if you haven’t recently, please go ahead and give us a five star review and leave a comment wherever you listen to podcasts so we can keep sharing the good word on tax planning. So a couple of things from this last year and tax planning kind of time of year. There’s a lot that goes on in December. You certainly see plenty of it online. You get the email campaigns, you get the TikTok and LinkedIn, I’m sure a lot of it from me, but there’s plenty of hype around the end of the year about getting tax planning done before the calendar turns over. And while December 31st is clearly an important date when it comes to taxes, there was certainly one very consistent theme that I saw throughout the month of December of what tax planning was actually the most impactful for the clients I got to work with alongside great financial advisors. And it wasn’t a particular tax strategy or a certain amount of tax savings. The most consistent theme for great experiences and great tax results for the clients involved was that December was about execution. It wasn’t about idea generation. It wasn’t about education in that moment. It was advisors who had been talking to clients who had been laying the foundation, who maybe even had been mostly executing a strategy before December and who are putting the final touches on it.

(03:20)
While the end of the year gets all the attention, because the calendar literally is about to turn over, for tax planning to be really effective, it needs to be happening throughout the year. So even as I record this episode for the very beginning of 2026, we can’t just say and a half months from now until I need to worry about that. We’ve got to be putting these things on the calendar now and laying the groundwork now if you want to have great tax planning happen later. Now, of course, you need to make sure that we’re being conscientious of deadlines and timing. As we’re here in January, the focus really, except for clients who are having big life events, when big life events happen, let’s address those as they come up. But outside of that, the beginning part of the year really is about getting clients ready for…this coming tax filing season, which is still gonna be about 2025. If you do a 1099 letter or a year-end tax letter, this is about putting the finishing touches on quality control so that those can go out later in the month. It’s about sharing that information your client needs to have a great experience this tax filing season. But even as we go through that, we can be reinforcing the value of the tax plan that we did last year, so that we’re setting ourselves up to do more great tax planning this year. Because when we communicate to our clients or their tax preparers, the key things that we did together in the previous year to make sure it gets reported correctly. We wanna make sure that we’re always reinforcing the value of what we did. Don’t just remind a client that, we did a Roth conversion, you’re gonna get a 1099R and you need to make sure that that’s reported or that your tax preparer reports that on an 8606. We wanna make sure we reinforce that value proposition to say, hey, just as a reminder, we work together to put X amount of dollars in your tax-free bucket through a Roth conversion, which is gonna set you up for and then we’re reinforcing the goals that we’re working with them to accomplish. Because while it’s fun to joke about on podcasts and online, sticking it to Uncle Sam isn’t really the reason that anybody leans into consistent tax planning over time. This is about helping clients accomplish goals that they’re passionate about. I love working with advisors and seeing the changes and updates they made to 1099 letters each year. By far my favorite advisors to work with as we do tax prep or retirement tax services are the ones who send us those 1099 letters. Some recent improvements I’ve seen over the last couple of years that I love seeing on the topic of Roth conversions. The actual timing of the Roth conversion is actually super helpful for a tax preparer to know, because if you haven’t revisited it recently, we’ve got to keep in mind that the IRS expects income taxes to be paid as income is earned and by default the IRS assumes that all income is earned evenly throughout the year. So where this becomes critical with Roth conversions is that if you’re like, we’ll call them Bob and Sue because that’s my favorite generic client name, but I’m thinking of a specific client we worked with in December to do $130,000 Roth conversion. And so at the end of the year is they do $130,000 Roth conversion, and that’s a significan amountt, it was over 50 % of their total income for the year. And that all happened in December. And to maximize the amount that went into Roth, they went ahead and made an estimated payment. They didn’t have a withholding. And that’s important because the IRS treats estimated payments as having been paid when the IRS actually receives the money as compared to withholdings, which are treated as if they had been received evenly throughout the year.

(06:37)
So if you’re not letting your client’s tax preparer know, hey, this Roth conversion happened in December, they’re not gonna know that they need to fill out Form 2210, which is how we let the IRS know, hey, we’ve got uneven income throughout the year. And if we fill out that form 2210, we can say actually most of this income was earned in December, which is why the payment related to that income wasn’t made until the January 15th deadline. And now we can remove all those underpayment penalties. So that was a great addition. I saw advisors start making here recently, I think my good friend, Micah Shilanski was the first one to…Make that improvement and i’ve been sharing it as as widely as I can because I love seeing those what might seem like little things right that what gets the the clicks and the views and and the reactions are the the shiny objects the exciting things that really almost never apply and so i’m going to proudly be that guy who just focuses on the simple thing things consistently over time so definitely the time of year to be thinking about how do we make sure that the great tax planning we did, and really not even just tax planning, all of the financial planning that you do has a tax impact. So as you think about the financial planning, the tax plan that you did with your clients in 2025, how are you ensuring that that all gets reported on the tax return correctly? And hopefully that’s through some version of a 1099 letter or a year-end tax letter. And when I say How are you as the financial advisor, ensuring that it gets done correctly, I’m not suggesting that you have to prepare the tax return, but you should take responsibility for making sure that information gets over to the tax preparer, whether the client uses a professional or does it themselves. Now, to give another example of why this is important and one that’s particularly relevant for 2025, because the reporting’s changed just a little bit, let’s talk about qualified charitable distributions or QCDs.

(08:29)
So when a client makes a QCD, it’s gonna generate a 1099R. And 2025 is gonna be the first year where there actually is a distribution code now on the 1099R that indicates, hey, there was a QCD included as a distribution from this account. Now, a couple of words of caution around this, particularly for 2025. The first one being that the custodians that I’ve reached out to have pretty much acknowledged that they aren’t actually going to be using that code in 2025. The IRS made it optional this first year. And I mean, I’ll give them a little bit of the benefit of the doubt that there is a lot of behind-the-scenes logistics and data that goes on that makes it challenging to commit to accurately reporting that information. And so for the most part, I don’t think we’re gonna see that code really get used a lot in 2025 because the custodians just aren’t ready for it. Even when they do start using it, there’s still limitations on what the 1099R even allows to be reported. So even if we assume that a custodian goes ahead and says, yep, Bob and Sue had a $10,000 QCD, so on the 1099R, we’re gonna go ahead and mark that code for the QCD. What you won’t see is that that IRA still only gets one 1099R for all distributions during the year. So if that client had an RMD that they had to satisfy and then they did a QCD, then they had some more distributions just to support their lifestyle. mean, they might’ve had a $10,000 QCD out of a total distributions for the year of 100,000 or more. And so now we’ve got these different codes, but we’re not really told exactly how much the QCD was. And if your clients or anything like clients that I work with, it’s never 100% of their charitable giving that actually gets done through QCDs. And so if I’m just asking the clients to remember, come tax time, like hey, how much was QCD versus you gave directly? We’re not setting, we’re not giving our clients the best chance possible to report on this correctly, which another great thing to be including on a 1099 letter or year in tax letter. If you really wanna go just rockstar level of how you manage QCDs for clients.

Commercial (10:42):
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Steven Jarvis (12:05):
At this point, I think my good friend, Micah Shalinski, who will be a…recurring guests on the podcast. You’ll hear him again here in the next couple weeks, so stay tuned for that. He actually goes out of his way to create separate charitable accounts for his clients. Now if you’re thinking, wait charitable IRA is not a real thing, you’re absolutely right. He’s using nicknames. He’s naming the account charitable IRA, which is simple genius because no tax preparer is going to get a 1099R that says charitable IRA and not pause for at least a second and say, hey, what the heck’s going on here? It’s going to immediately prompt those questions. And so the beautiful thing is, if I have a client with a million-dollar IRA, and then I create a charitable IRA, it’s not that I have to move all of the money into the charitable IRA. I don’t have to guess how much needs to go into the charitable IRA to support the rest of their lifetime giving. Each year as they go to make a QCD, we can move that money from their traditional IRA to the charitable IRA and then distribute it from there. So the only 1099R they’re going to get from that account is for the QCD for the year. So that way, regardless of whether the custodian appropriately uses that code or not, we’re going to have very clear records at tax time that, hey, this amount was a QCD, and we’re gonna get that reported correctly. Because probably the worst way to tip the IRS is to pay income tax twice on the same income and that’s exactly what happens with a QCD if it’s not reported correctly. Because then we are going to pay we’re going to pay income tax on an IRA distribution that we did not have to pay that should have come out tax-free. So just there’s plenty of reasons that we should be doing 1099 letters or year-end tax letters if you if you’re listening to this podcast and you’ve never done a year-end summary like this i would definitely start like right now, it might be a little late for 2025. Maybe you do it for, you test it for some of your clients this year, or you get busy real fast getting this ready. This is something that you want to have the framework in place for the foundation in place so that your team can help with this. Because there definitely is a lot of work to it, but it makes all the difference.

(14:12)
And this isn’t just about making CPAs’ lives easier, although maybe not direct or the directly intended benefit, but certainly an outcome will be that this is a great way to set yourself apart from other financial advisors that the tax professionals in your network work with, and definitely a key driver of referrals. When I talk to advisors who generate a significant number of referrals from centers of influence, including tax preparers, one of the key differentiators is that, that other professional, that COI’s ability to say, okay, how is this financial advisor delivering value to their clients? How are they different? And so being able to do something like a 1099 letter is just such a simple way to show other professionals, hey, I do something different. I’m serious about providing value to my clients. As you’re listening to this, the beginning of 2026, most 2025 tax planning is…You know, the book’s closed, we’ve all moved on, but let’s not forget that there are certain things that can still happen through the tax return being filed. There are contributions that can still happen. We just want to make sure that we’re doing everything we can to make sure that great record keeping happens. We could do a whole podcast, I have before written articles on the types of accounts that can be contributed to after the 12/31 deadline certain types of retirement plan accounts, HSA contributions. There’s a variety of things that can still be done, but we’ve got to make sure that we are correctly identifying to the custodian, here’s the year this is applicable to. The last thing we want to do is attempt to help our clients through tax planning and just create bigger messes. And I certainly have seen that happen. So I want to make sure that if we’re going to do things in the next couple of months that affects 2025, we’re being super clear, both the client with the custodian, what exactly is going on.

(16:02)
A couple of other things that, here we are in the beginning of 2026, I’m still gonna keep talking about 2025, that’s the tax preparer in me, because I’m gearing up for the tax filing season, but we had this big, beautiful bill act in 2025 that did take effect for 2025 in certain areas. so, especially for any of you who haven’t prepared a tax return before, which I’m guessing is probably most of you. Anytime there’s a tax law change, we’ve got to keep in mind that there’s a few levels to how these things work. There’s the back and forth in the media about, what may or may not happen. And then Congress finally passes something and they write a bill. Hundreds, if not thousands of pages of rulemaking that they do that then has to be interpreted and implemented by the IRS, which then has to be put onto IRS forms and then has to be reported by tax preparers. And so sometimes these things can take a couple of years to fully sort out, but we’ve already got new forms for the 2025 tax year as a result of 03BA. So one that covers a few of the new areas of tax rules out of 03BA is Schedule 1A. And if you have clients who will be impacted by the new tax on tips or the tax on…not tax, the no income tax, they still call it, I’m looking at the schedule 1A as I’m recording this, it literally says part two, no tax on tips, which what they mean is no income tax. Same thing with part three, no tax on overtime. What they really mean is no income tax on overtime. And only as it relates to certain income thresholds, certain definitions of what overtime and tips are, and so we want to make sure that if you are impacted, or if your clients are impacted by these areas, get the actual form out and read through this, because your clients are gonna go through it, they’re gonna have questions, and most likely, their tax preparer isn’t going to have time during the tax filing season to spend time on these questions with them. Now, those might not feel super relevant to, depending on what your client base looks like, but this is also the form where the new, what they’re calling enhanced deduction for seniors. That’s $6,000 potentially per person, depending on their AGI and age. That is also on Schedule 1A. So I would guess that 99.9 % of people listening to this podcast have clients who are going to be impacted by some of these new rules that are going on Schedule 1A. So put it on your calendar. Take 30 minutes and read through this form. If you wanna go a step further, put an hour on your calendar, read through the form and the instructions. Maybe go through it and think about how it would apply to your situation or pick a client or two to go through with. And to be honest, it’s not a long form. It’s not actually gonna take you an hour. But I’m a huge fan of getting our hands on reality and not just doing things in theory. So yes, I’m sure you’ve listened to me talk about this on a podcast. You’ve read articles about it and that’s all great information. Get your hands on the actual documents so that you know what your clients are going to experience. It’s also good to spend some time on this as we’re going through the tax filing season, because it’s possible it’s been a few months since you’ve had questions from clients on this big tax law change that happened this last year, and the tax return filing is going to bring these things back up. And my guess is going to be that if we’re not proactive about how we talk about these topics, it’s going to come up in probably some less than positive ways, because the media attention was so strong on the, there’s no tax on overtime, there’s no tax on tips, social security is gonna be tax free. There were all these headlines that our clients saw over and over and over again that if they haven’t had someone go through this with them, there’s still gonna be a lot of misconceptions about where things really ended up. So you might have clients, they’re like, hey, hold on a second, why wasn’t my social security tax free? Hold on a second, why am I getting taxed on tips? or overtime or whatever it might be. And so we wanna be real familiar with what our clients are gonna see so that we can answer those questions as well. And yes, in a perfect world, their tax preparer would be going through that with them, but you probably have clients who DIY, you likely have clients who are with traditional CPA or tax firms that are grinding out 1040s that are doing as many of these as they possibly can, which means as little as communication as possible so that they can just… Increase the volume that they’re putting out so they’re probably not getting a lot of proactive communication on this

(20:30)
So if you haven’t recently this is a great time as we kick off the year to go back and say okay What were the provisions of O3BA that most directly in it impacted my clients? Where are my notes? Where’s the webinar? I watched the session I attended the podcast I listened to let’s go back and revisit those things. So I’m prepared to answer those questions as they inevitably come up over the coming months. Now let’s talk about a couple of things that are coming up in 2026 that I’m really excited about from retirement tax services to continue to help advisors improve what happens on tax planning. mean, a big part of that is why I started with, here’s some things that stood out to me from 2025, the end of the year of 2025. I always want to be giving you as many real life examples as possible and helping you ahead of time. As much as I enjoy doing office hours with our premier members and getting to see people in person more more about that in a minute I really do love those experiences and a lot of the questions that come up when people Do liveQ&A with me are about situations that have already happened and how do we triage things that have already happened? But again that the best just like the best year in planning Is the you the execution of ideas that have already been discussed the next best tax planning in general is when we’re being proactive and intentional. And so if you want to do more with tax planning in 2026, you need to pull out your calendar and figure out where this is going to live. Whether that self study that you’re going to do for RTS, essentials and premiere members listening, the advice I give as you sign up, and I’m going to reinforce as often as I can make make sure you have actual time on your calendar to get into the member section to look at the newest newsletter and reference guide that we’ve put out to revisit the master classes that you’ve taken. You’ve got to have a place for us to live on your calendar or six months is going to go by, nine months, 12 months is going to go by. And you’re to be right back to saying, I wish I would have. So, a couple of specific ways that we’re going to be helping advisors this year do more with tax planning. The first is if you haven’t recently, make sure you go out and download the RTS desktop tax guide. That’s free to everybody in the industry. We want to do as much as we can to help advisors do great stuff around taxes. I have a laminated copy on my desk. Take them everywhere I go. It’s been downloaded thousands of times. It’s a great resource because there’s so much going on in the tax code. You shouldn’t try to commit it all to memory. It changes too often. I certainly don’t have it committed to memory. So go to retirementtaxservice.com, download the RTS desktop tax guide. It’s just a great resource to have. Put it in your conference room, use it in client meetings, put a picture on LinkedIn and tag me and I will gladly announce to my network what a great and committed tax planner you are. Maybe that’s not your thing, but it’s always a little bit fun to see the pictures of people including these in their comments rooms. Going a little bit deeper, we’re also going to be doing a monthly webinar series in 2026, and we’re going to do it monthly to make sure that everyone has a chance to attend it. It’s going to be a similar theme and format because there’s some of these simple things that are just so critical for advisors to understand. And so if you haven’t been if you’re not on our email list Make sure you go out to retirement tax services comm get subscribed so that you can see when the next one’s going to be we’re gonna do them every month and we’re gonna cover some key principles that allows advisors who are committed to tax planning to use tax plan as a silver bullet for growth in their practice it’s really going to be about how taxes can be a huge value add for you and your clients, but what we’ve seen is that it’s one of the most common themes of advisors who are really crushing it and setting themselves apart from, you know, the big names that have bigger ad spends than you do, even without having to have a CPA full-time in-house. So go out to retirementtaxservices.com, get the next webinar on your calendar so that you can really lean into this in 2026. And of course, for me at least, the highlight of the year as far as opportunities to impact what advisors are doing on tax planning is the summit 2026. September 27th through 30th in Scottsdale, Arizona. So excited. It was once again named as a top conference by the Kitces team this year. It actually replaced the AICPA conference as their top tax conference for financial advisors. And the lineup just keeps getting better and better. Obviously I say that with a small amount or maybe a large amount of bias as I organize the event, but we keep having advisors come back every single year. It grows every year. We have partners that come and share just incredibly valuable information. This year, we’re starting to bring in more outside speakers to cover topics that go beyond just tax planning and financial planning. We’re gonna be doing role play this year led by Phil Jones, a incredible public speaker who talks about how the words you say matter. We’ll have a massive guest on the podcast to get you excited about not just, not just get excited about the summit, but start to share some of his expertise. We have a former IRS agent who’s going to come and speak and give us really like insider knowledge about where things can go wrong, how you stay on the good side of the IRS, and just helping us really understand where we need to be careful with that line of tax planning versus tax advice. And my takeaway is always there’s so much more advisors can be doing. We don’t… Unless you’re setting out to commit crimes, we don’t need to be scared of the IRS. We need to be proactive, and another session i’m super excited for we’re gonna great, great speaker that I was recently introduced to Raquel Hopkins She’ll be on the podcast as well leading up to the summit who she lists herself as a capacity expert, which i’ll be honest. I was a little bit skeptical when I saw that on paper But her whole thing is about helping people realize there is more they can be doing and getting past the self-imposed challenges we put in front of us that limit how we use the 24 hours that we’re given in a day. the list, we’ve built out the agenda. The list of financial planning and tax planning topics are going to be incredible. There’s gonna be so many, not just experts on stage. When I say expert, I mean people who are doing this stuff in practice every day. We’re not bringing in people who used to do this 20 years ago. These are advisors, these are your peers, these are the people that you aspire to be. And then we’re bringing in these other great speakers who aren’t financial planners themselves, but are going to come and talk about the things they are experts in so that you’re going to leave not only with the knowledge and the tools to be incredible financial planners and to level up what you’re doing around tax planning, but you’re going leave with the other skills you need to put that into practice when you get back to your office and meet with clients and serve clients.

(27:02)
I could go on for hours. You’ll hear me talk about it plenty as we go throughout the year. At the end of the day, whether we’re talking about the summit, these webinars, just listening to the podcast or tax planning in general, my whole goal is to help people take action. That’s what I look for. Anytime somebody gives me feedback, that’s what I’m looking for is you were able to do something? So that’s my challenge to all of you as we kick off 2026 is whether it’s one of RTS events, whether it’s our membership, our resources or any others, I’m going to high five and be excited about what you’re doing, if you will take action on tax planning in 2026. So take the time to put on your calendar, commit to something. If it’s not the summit, commit to something that’s going to help you level up this year, because this is one of the biggest expenses that your clients will have during their life and certainly in retirement and an area that you can make a huge difference. So get it on your calendar, commit, take action. I’m looking forward to an incredible 2026 and as always, thank you for being here and until next time, remember to tip your server, not the IRS.