Welcome back to the Retirement Tax Services Podcast! Steven’s returning guest today is advisor Matthew Jarvis of The Perfect IRA. Their focus is his annual 1099 letter sent during tax season. If you don’t have one, your clients need you to start one.
It began as an act of desperation. Matthew Jarvis is a little reluctant to admit it, but it’s true.
Clients were calling all tax season, asking where their Form 1099s were. Meanwhile, others weren’t consistently getting their 1099s in to their tax preparers.
It turned out that in the latter cases, someone had gotten a 1099 from their IRA because they took a distribution. However, in the next year, they didn’t.
Conversely, other clients took a distribution this year but not last year. As a result, since they didn’t get a 1099 for last tax season, they didn’t think to keep an eye out for this year’s form.
As a normally proactive advisor, Jarvis knew something had to be done. So, he took it as a value-adding opportunity: Closing this gap would make both his clients’ and their CPAs’ lives easier.
Accountants aren’t mind readers. Nevertheless, if a shared client takes their first distribution without watching for their 1099, their CPA may get blamed for the resulting mess.
This is no fairer to them than it would be to blame the financial advisor. In fact, when the IRS sends the client a mismatch letter—and things descend into a finger-pointing standoff—nobody wins.
The solution Jarvis developed is to send out an annual 1099 letter. It’s much more than just correspondence, though. It’s an integrated part of his process.
All accounts under a client’s name are reviewed; those generating a 1099, along with those that aren’t. Specifics are given for each one to avoid confusion.
However, not all 1099s arrive on a specific date. Since there’s usually a last day of the year for their generation, he encourages everyone to expect theirs around this date. Anytime sooner is a bonus.
An annual 1099 letter has even more potential uses. Don’t waste the chance to warn clients against common trouble spots, for example.
Closed accounts can easily be missed. Someone may have closed one earlier in the year and then forgotten about it.
That’s why Matthew Jarvis always has a bold line about it at the top. This encourages clients to share a copy of his letter with their tax preparer. While he’s at it, he also reminds them to keep wary of tax-time scams.
Many frauds are conducted by thieves pretending to represent the IRS, Medicare, or the Social Security Administration. These scammers call the uninformed and demand thousands of dollars over the phone—though real US government agencies never do this.
The IRS, for instance, will always start with a letter. So, anytime someone claims to be an agent, it’s best to end the call, look for a letter (if there is one) and call the number listed on it.
As the saying goes, forewarned is forearmed. At the same time, mentioning fiscal security concerns helps position you as a resource for clients to share questions with.
Especially during tax season—when most CPAs are buried under looming deadlines—reminding them that you’re still accessible adds a lot of value, too.
Whether they’ve gotten a possible scam call or they just have a tax-related question, you can provide both information and reassurance.
Steven and guest Matthew Jarvis have lots more to help you systematize a great 1099 letter in this edition of the Retirement Tax Services Podcast. Feedback, unusual tax-planning stories, and suggestions for future guests can be sent to advisors@rts.tax.
Are you interested in content that provides you with action steps that you can take to deliver massive tax value to your clients? Then you are going to love our powerful training sessions online. Click on the link below to get started on your journey:
Retirementtaxservices.com/welcome
Thank you for listening.
Steven Jarvis:
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 in this show, I teach financial advisors how to deliver massive value through tax planning. Uh, I’m almost a little reluctant to introduce my guest today, just cause you gonna steal my spotlight. But here with me is my brother Matthew Jarvis, the one and only Matt. Welcome to the show!
Matthew Jarvis:
Steven. Thanks for having me, man. It’s, it’s hard to believe. I think I was either on the first, your second episode of the Retirement Tax Services Podcast. And uh, at that point it was kind of just you and I recording it and we’re like, well, hopefully other advisors are excited about tax planning. And now you’ve spoken at conferences all across the industry. This podcast has thousands, tens of thousands of followers. Amazing to see how many advisors are committed to tax planning.
SJ:
I did have a little bit of a surreal moment before we get into the tax piece. Uh, you and I were at the X, Y P N conference together in the fall. And someone comes up to me and says, “oh, oh, you’re, you’re the Jarvis guy from the podcast. I was like, well, that’s my brother. He’s here. I’ll introduce you. And they’re like, no, no, no, no. The, the tax one, right? You talk about”, it’s like, wait a second. He, yeah, yeah. He knows who I am. This is perfect. So that was a good moment for me.
MJ:
It’s exciting. It’s giving advisors and, and me, by the way, like, like so much more tax information that I used to have to struggle. Like we’d have to dig forever to find how to do this. And now we’ve created this community or you’ve created this community of advisors collaborating on how they’re doing this. Even the 1099 letter that we’re gonna talk about today. I’m learning things from other advisors that no one ever talked about before, which is so exciting.
SJ:
Yeah, it does really reinforce us how much value there is in community, uh, and sharing these ideas with people, just openly sharing it to say, okay, what can I do to keep improving this? Cause really we wanna hit record and have this conversation because you and I were working on a newsletter together for our RTS members, something we do every month and for January the newsletter, that’s out there for our members on the website is all about how does an advisor be their client’s hero during tax season? And we wanna share some of those thoughts with our audience.
MJ:
Yeah. See, I Have to confess a little secret for our listeners. I, I do. I get the opportunity to collaborate with you from time to time on those newsletters. Uh, but I always make sure to print them and leave them outta my office. And don’t mention that I had any involvement because then my team will come say, wow, did you see this newsletter? Steven’s got these. We should really, ah, that’s a good idea. That’s Steven, he’s a smart one. So that’s that’s, that was one of my guilty pleasures is, sort of like tricking the team into doing more tax planning.
SJ:
That’s perfect. Happy, happy to be part of that for you. I love it. So you, you mentioned it already, but one of those things, as we talk about how can advisors be a hero for their clients during tax season is this 1099 letter. And, and you talked about it in your book, that this is something that, that you implemented in your practice. It’s been a few years now. So maybe start with, how, how did you come to, this was gonna be something that I should be doing?
MJ:
Yeah. The 1099 letter really came out of, and I’m, I’m almost reluctant to confess this, but it almost came out of desperation during tax season. So, I mean, I love the idea of proactively delivering value, but what we were finding out during tax season is a couple of, uh, unfortunate things were happening. One clients were calling all the time asking when their 1099s were gonna be ready because clients don’t know, clients think it’s the first of the year. Therefore my 1099 should come out. Where is it? So we had, we had that issue. Our phones were being blown up by clients asking, uh, the other was, we were discovering that clients were not consistently getting the 1099s to the tax preparer. How does this happen? Well, this happens if one year they got a 1099 from their IRA because they took a distribution and the next year they didn’t. So in that scenario, they’re looking for a 1099 that won’t exist. Or conversely, last year they did not take a distribution this year. They did, they weren’t looking for a 1099, one was generated and it’s missed.
SJ:
Yeah. So this isn’t, you, you were bored one day and it’s like, Hey, why don’t I help out all the local CPAs? It, this, this comes back to even if it came outta desperation, this comes back to how do I deliver value to my clients? And if I can make the CPA’s life easier along the way, the tax preparer’s life is easier. Now, not only have you benefited your client, but your strengthening relationships with centers of influence with potential referral sources, with other professionals who can also serve your clients.
MJ:
Yeah, that’s right. Because if the client doesn’t know to look for a 1099, let’s say it’s the first year they’ve taken an IRA distribution, the CPA, the tax charge. They have no way of knowing that there was a 1099 generated. So then the tax return gets filed without that 10 99, either somebody catches it or eventually the IRS sends a mismatched letter. The CPA looks like a bomb. The CPA says, Hey, this isn’t really my fault. Your advisor should have told me. I had no idea. You get a lot of finger pointing. Nobody is happy in that scenario.
SJ:
Yeah. Just to clear up any confusion for our listeners, uh, CPAs do not have some sort of magic access to a list of all 1099. <laugh> They are completely relying on the client or someone in the client’s life saying, Hey, here’s the list of 1099 you should expect.
MJ:
Yeah. You know, one other thing that we discovered in doing the 10 99 letter is so we use fidelity as our custodian just because that’s just who we use. And instead of, and fidelity, if you’re listening, I’m sure you are, they they’re tax report is terrible. So instead of sending a 10 99, they send this giant packet that says tax report on the front 10 pages later is the 10 99 data. What would happen is clients would get it. They would think it was just another statement because it did not say 10 99 and they would throw it away and it wouldn’t get reported. And so we even updated our 1099 letter. We’re gonna talk about, to say, “Hey, for this account, look for a tax report/1099.” So clients knew what to look for, uh, for fidelity accounts. Yeah.
SJ:
Fidelity, isn’t really doing, uh, the end user any favors. I was recently looking at a fidelity report and not only is it not clear where the 1099 R, which is where the distributions usually get reported, but, uh, depending on, on what type of accounts you have, you can have a 1099 INT and a 1099 B. I mean, you can have several 1099s in the same document. And so you’ve got box one six different times, and yeah. So if you’re not pointing this out to your clients and making sure they’re getting it to their tax preparer things are gonna get lost.
MJ:
Yeah. Yeah. And so when it comes to tax season and specifically 1099s are the same is true for K one heaven forbid, uh, I think it sort of exists on a spectrum as I talk to advisors, Steve, I know as you talk to advisors, right. Sort of like the, the very basic default level would be, do nothing, right. Be just reactive when the client calls deal with it, that would sort of be the worst. I think on the furthest, other extreme would be to pull all the 1099s yourself and deliver those to the client in a, in a password per day PDF and, or deliver it to their tax preparer. Right. So we sort of have the spectrum of 100% reactive or like 100% proactive. And I think advisors can fall anywhere in that space. You just need to be intentional about where you wanna fall.
SJ:
Yeah. And so I I’d like to hope just the fact that advisors are listening to this podcast, they’re at least not on that far end of “I’m not gonna do anything.” Yeah. And so let, let, let’s talk through some of the, how you can make this a reality, cause it is a spectrum, but let’s at least give people a place to start. You know, I mean, this is something you built over years, thankfully. Again, you’re willing to share this with different communities. And so some of our listeners who are either TPR and Invictus members or RTS members kind of have a leg up on this because we we’ve provided some tools, but even if you’re not yet a member of one of those communities, really, this is a matter of having like so many things, having a process or a system of how are you gonna go through and, you know, focus on the accounts that you manage so that you have the clarity of what’s going on to say, great, here’s Bob and Sue. Here’s the five accounts they have. These three of ’em are, should, they should expect to receive 1099s. Notice that I said all five accounts, even if only three have 1099s. Mm-hmm <affirmative> Because you wanna have that clarity. You wanna make sure they know, oh, and I won’t get one for this, Matt. I know you like to include some additional language in there of maybe reminders about fraud alerts of, Hey, there’s a lot of scams that go on related to this. I mean, what are some other things that you always include in that 1099 letter?
MJ:
That’s, those are great points. Uh, for our 1099 letter that we send out from Jarvis Financial we list, as you said, all their accounts through our office and then what kind of tax document, if any, they could expect. So it would say like tax report/1099, it would say 10 99. It would say none. It would say K one. And then if they had one and then on the letter we also wanna put, when is the latest date by when, uh, 10 99 S have to be generated at think it’s, is it February 16th this year? I don’t recall off the top of my head, but I wanna make sure they know that that way we say, Hey, listen, anytime before then, if you get it, that’s a bonus. Don’t expect to get ’em before that date.
SJ:
Yeah. That’s a great way to phrase that because it, it actually depends a little bit on the type of 10 99 mm-hmm <affirmative>. So some are the end of January. If the sender doesn’t file for an extension, which gives them an extra 30 days, some of ’em it’s the middle of February. So setting that expectation, getting clear with clients, and it probably saves you a lot of phone calls. If you say, “Hey, this is the latest date you should expect them by.” And so now they’re not picking up the phone constantly starting on January 5th to say, “Hey, Matt, where’s my 1099?”
MJ:
Yeah. Or they get a 1099 from one account, even at fidelity. Right. I I’m using Fidelity’s example cuz that’s where I custody at. They might get one of their 1099s the second week of January. They might not get the next one until the middle of February. So sometimes they think where’s my other one? It also helps that my team has these scripts. So when Collin answers the phone and client says, “Hey, I got one, but not the other.” She knows, “Hey listen, the 1099s don’t have to be generated until February 16th. So it may not be until the 16th that you see that other 1099.” Of course she’s also gonna log into fidelity and see if it’s been generated online. Cuz we’re trying to white glove that service for clients.
SJ:
Yeah. That’s great. That’s such a better experience for the client. Something else that that’s great to think about as you’re, as you’re building this letter of what am I communicating to the client? Uh, great. So we’ve got the accounts, we’ve got whether they’re receiving a 1099, go ahead, uh, and include other things that happened that are significant activity for that account. Was there a Roth conversion? Was there a rollover, did an account close, was there a QCD, some of these other things that I, I mean, they’re good reminders for the client, honestly, just so that they’re seeing, “Hey, these are all the things that the advisor did for me during the year.” And then they’re, they’re crucial for the tax preparer because some of those things don’t just naturally get reported on the 1099 and sometimes there’s errors. Matt, I know on a, on a previous podcast that, that you’re on with me, you’ve shared an example of a rollover getting reported as a taxable distribution. Yeah. So great. The tax preparer picks it up, see, sees what it says on the 1099, which they have no way to know that’s an error. Type it in and you know, a couple hundred thousand dollars in tax later, you ‘re amending returns. Whereas we’ve got this 10 99 letter that not only says, Hey, you should expect a 1099, but oh, by the way, that was a rollover. Now everybody’s life is easier.
MJ:
Yeah. That, that’s a great point. And you mentioned closed accounts. That’s a really easy one for everyone to miss. Hey, I’m looking at my list of accounts at the end of the year. I there’s four accounts. I have four, 1099s. I’m good. But there was a fifth account closed at some point earlier. That’s a good one to miss or, or bad one to miss. We do always at the top of the letter and put in bold, “please give a copy of this to your tax preparer.” We like to include a second copy. So they have one for their records, one to give to the tax repair. And then I do also, if I have space on the letter, I like to put a reminder about all the fraud that goes on under the guise of the IRS and social security. And you can look up these statistics. I think the last one I saw was something like 20 million a year is lost to people claiming to be from the IRS, calling up clients, saying, “Hey, I’m from the IRS and you’re gonna go to jail. If you don’t send us $10,000.” And so I try to use this as an opportunity to remind clients that the IRS does not call them, social security does not call them. Medicare does not call them, especially not asking for money. Yeah.
SJ:
Yeah. That’s a great reminder of, um, the IRS is always gonna start with letters. They’re gonna send them. And even though those are written in archaic font that make you feel like you’re going to jail, that’s probably not the case. Yeah. Somebody calls and says I’m from the IRS, hang up and look for the letter and, and call the number that’s listed there.
MJ:
Yeah. Yeah. It’s such a rampant, uh, uh, fraud. In fact, I get those calls too. Like I’ll, I’ll get ’em voicemails. I don’t answer calls that I don’t ever recognize. And they’ll be voicemails. Like, you know, this is we’re calling from social security. We’re calling from the IRS and the calls are getting more and more convincing, right? It used to be like, I’m a prince from Nigeria and I wanna leave you my fortune. And now they know I’ve had clients who they say, “Hey, Bob Smith, date of birth, this, this, and this. We’re the IRS calling” because they got that information from a leak database. So these are becoming more and more convincing, especially for elderly clients.
SJ:
Yeah the other thing that letter does is reinforced to your clients that you are a resource for them so that when things come up, they feel comfortable reaching out to you of, uh, great. You know, so it’s February, March, maybe they can’t get ahold of their tax repair cuz they’re, you know, just buried under an upcoming deadline, but they know, Hey, I, I can call my advisor and call Matt Jarvis. He clearly cares about taxes. I got this call. I don’t understand from the IRS. Let me call him.
MJ:
Yeah. Steven, you mentioned this briefly earlier you’re back to the 10 99 letter, which would be, uh, QCD, right? If you’re doing qualified charitable distributions. I, and I believe RTS recently did an entire newsletter on this. There’s no way currently for the tax preparer to know that a QCD was made, it just shows up as a taxable distribution on the 1099. And so that you need some way to alert the tax preparer of that or you’re setting yourselves all up for failure.
SJ:
And as this podcast airs, it’s the middle of January. So there’s still time for people listening to, to take action on this, this, this tax year, right. This isn’t a nice idea for the end of 2022 or end of 2023. Get intentional about this right now. Like I said, in Invictus members under TPR or our RTS members, we’ve got, we’ve got tools to help you out with that to make it a little bit easier. But if, if you’ve ever had any pain or frustration with the tax preparation process for your clients, which I’m assuming is all of our listeners, here’s an intentional step you can take to deliver value to your clients.
MJ:
Yeah. And for the advisors in the audience, right. That are in a more compliance, heavy environment that perhaps can’t do 1099 letters, right? Cause it might fall under some kind of label of tax planning or whatever that case may be. You can still do tax education. Right? You can send an email to all your clients say, “Hey, I know it’s tax season. If you have any questions or concerns about the documentation needed, if you want our help getting these from the website, just let us know.” So don’t hit that wallet. If, if you show your compliance department the 1099 letter and they say, absolutely not, perfect. What can we do? What can we do to educate clients to make sure that they’re getting all their tax documentation?
SJ:
Yeah. I would even suggest if you’re in a highly compliant, focused environment, I mean go out to the IRS’s website. Um, they’ve got deadlines, they’ve got things that it, I mean, pull it right from that website and send that to clients. I, I mean, I, if you can, there are certainly better ways to communicate that than what the IRS has, but if you’re dealing with really strict compliance requirements, start there.
MJ:
Yep. For RTS members, right. Whether it’s a direct or through Invictus, you know, a lot of times you can take the, the RTS newsletters to compliance and say, can we quote this newsletter? Right. So it’s not me, the advisor writing this. Can I quote this newsletter? Can I include these excerpts, these one pagers and send those out? So there’s, there’s a lot of ways to approach that. Don’t let the first no stop you all together.
SJ:
Yeah. And even if you’re not an RTS member yet, we’ve got a lot of articles publicly available on the website that talk about a lot of these things. And so again, to, to your point, if, if you can, if you can reference someone else that doesn’t have to be, uh, according to Joe, the advisor, Hey, there’s a CPA over there@retirementtechservices.com. Here’s some publicly available information. Yeah. Any, any way we can help. We’re, we’re happy to, to cuz this is just such a great way to take some of the pain out of the process.
MJ:
Yeah. Something else that you can do, uh, cuz again, right now, while this is being aired, you’re running out of time though. You’re gonna wanna do it within the next week or so. Is any of your clients that, you know, their tax preparer, it’s a great time to email the client, adding the tax preparer on one email and say, if you need any help Mr. Or Mrs. Client getting tax documents, feel free to have your tax repair, reach out to me, glad to help them out. Now again, the tax repair is gonna have their own information sharing agreement and whatnot, and your compliance department may have their own, but that’s an easy way to establish or build that relationship with the tax repair. Even if you don’t have the ability to do a full blown 1099 letter.
SJ:
Yeah. Great points in there, Matt and I just, I wanna highlight that. I mean, you even said in there, there, there’s probably a couple of, of hoops you might have to jump through of, information sharing agreement or making sure compliance is on board with it, but really your mindset needs to be, that’s why this is valuable and why most advisors don’t do it. As we talk about different things on this podcast, we never intend to give the impression that this isn’t going to be extra work. It is, but that’s where the value comes from. If it was easy, everyone would do it. And none of us would make money. Right?
MJ:
Yep. Yeah. It is definitely work. So the, the 1099 letter that we sent out, which is the same one that you’ve got inside of RTS. I mean, we have to pull the, on a list of all the client accounts. We’ve gotta group them by household for we, we know that non-qualified accounts, right? Brokerage accounts they’ll get a 10 99 every year. Assuming there was any money in there. We know that Roth accounts will only get a 10 99. If there was a distribution, we know that IRA accounts will only get a 1099. If there’s a distribution we’ve got watch. As you mentioned earlier, were there any closed accounts or roll over accounts? So that is work. Like you’ve gotta screen through that and you’ve gotta make sure that you’re looking at that correctly. Uh, one, one of the thing that came to mind, Steve, as far as letting clients know any clients, of course, as you know, that have retirement accounts are gonna get a form 54 98, that confuses a lot of clients. So, you know, we advise them and say, Hey, most of the time you don’t need that form 54 98, but be sure to give it to your tax preparer anyway, those types of things. Yeah.
SJ:
And for anyone listening, who’s thinking, okay, great. It’s the middle of January. You’re saying I need to do this in the next couple of weeks. That sounds like a lot of work. The exercise that you really should be going through is okay. Think back to last tax season. How many phone calls did you get from clients about where their 1099s are? How many times did you have to unwind a mess because a QCD didn’t get reported? Think about the time that you’re spending reactively right now, reactive is almost never a win for the client, right? Mm-hmm <affirmative> even if you get it sorted out, they were still confused. They were frustrated. They were upset. Their tax preparer probably felt the same way. So even if you got to the right answer, that’s not a winning situation. So think back just the last year of how much time did you or your team spend on that type of reactive of behavior and with spending a day or two of your team’s time, a week of your team’s time, whatever it takes that first time. Cause you gotta build the process and doing that proactively, which now is a win for the client now is an exciting thing for the client. Cause you’re taking care of them. How valuable would that be compared to the reactive approach?
MJ:
If that’s a great lens to look at that, Steven, of course the other one is also our another one is how often are you getting referrals from centers of influence and, and we’ve talked, I know you talked about this on the podcast all the time. If you are not doing a 1099 letter, you look like every other advisor and the center of influence has no way to know that you are any different from another advisor. And by the way, you may not be any different. But if you’re an advisor who’s proactively delivering value. If you’re the only advisor who’s sending the tax repair a 1099 letter to make their job easier, suddenly they send out suddenly when five or 10 or 500 advisors are asking them for the referral, they’re gonna say, oh wait, that man, Jarvis guy, his clients are so easy to work with. Cuz he tells me what 10 and 9s they need. And if I ever need him, he’ll send ’em over to me. He’s a great guy to work with, let me send my clients there.
SJ:
Well, and then, you know, tying this into a topic that you and I have talked about before on the podcast of, of working with centers of influence and building those relationships. You sending this 10 99 letter gives you a great launching point for having more powerful conversations with centers of influence, whether they’re the tax repairs who get the letter from you and then you can reach out to ’em after taxi and say, Hey, uh, I just wanted to follow up. I, you know, we sent this out this year. I would love to pay for an hour of your time and hear how we can improve this, make your life easier. And if it’s a tax repairer who doesn’t currently work with your clients, great, send them an example and say, Hey, we send this for all of our clients. I would love to pay for an hour of your time and get your input on, you know, things that other advisors do to make your life miserable that I can avoid. Or what else could I add to this? Because, you mentioned it early on that as, as we share this more in our community, we hear great, not just great feedback, but suggestions on how to keep improving it
MJ:
Yeah. In fact, I got a message on LinkedIn from an advisor just last week who said, Hey, I, I had read your book, delivering massive value. I used your CPA strategy, which Steven you and I have talked about several times, went and met with a CPA, got a referral that day from that CPA. And I, I had to warn him. I said, I’ve never heard it happen that quickly, but it does work now a word of warning, given timing again. So this is the middle of January. This, this podcast is coming out. Do not bother your centers of influence until at least May. So if you’re trying to call them in March and April to get ’em eating, that is not gonna work. They don’t want to hear from you. They don’t wanna be bothered. They’re so deep in tax prep that you need to wait.
SJ:
That’s a great point. Because as, as we talk about this 1099 letter, this isn’t something you should prepare and then try to schedule a meeting with the tax preparer and sit down and walk through it with them, this is a summary. This is a reference guide that you can give to your clients to provide to the tax preparer when they provide the rest of their tax documents, that’s going to make their life easier. And then to your point, after the deadlines, then you’re following back up to try to have that more involved conversation.
MJ:
Yeah. Now something you can do during tax season and this, this is gonna really necessarily set you out, cuz lots of advisors do this, but it’s still a good one is to send a fruit basket or something healthy to the tax her that you’re working with. And you know, some kind of know like, “Hey listen, I know you’re really busy helping our, our mutual clients really appreciate you, uh, excited to circle around with you after tax season.”
So the small thing, some people view that as cheesy, I kind of go back and forth on it, but I’ve had a lot of luck with that as well.
SJ:
. Yeah. I certainly always remember the people who send me baskets. I can’t say that. That means that I’m giving somebody a referral, but I, I, they do stand out in my mind.
MJ:
No, it’s, it’s definitely not gonna tie directly to a referral, but it will get you a couple of real relationship credits.
SJ:
Yeah, definitely. So this is the middle of January. Some other things to, to keep in mind as, as we’ve got this tax season going on, we’ve received a ton of great feedback from, from everyone who’s seen it on our RTS tax reference guide. It’s just, uh, it’s a, a, a one page front and back document that you can print and keep on your desk. If you’d like to get a copy of that, uh, go, go out to retirement tax services.com. There’s a button you can download that. We are gonna ask for your email address, but we’re gonna send you more tax content. So I think it’s a fair trade there. Matt, I know that you, you you’ve loved having that.
MJ:
Yeah. I keep that guide laminated on my desk and in my conference room as well. So that’s, that’s a must have reference. I love that the state tax guide is on the back, living in Washington, state myself, where there’s no state income tax. I often forget that. And then a client says, “Hey, I’m gonna move to whatever state and I can just flip that over. Well, let’s take a look at what the potential tax applications are, at least on a high level.” So brilliant piece that I’m really excited to have that every year.
SJ:
Yeah. Matt is, as you typically go through this kind of tax time of year, even though you’re not preparing returns in your office. I mean, what are some other things that stand out in, in your mind of, of ways that advisors can have this positive impact on their clients?
MJ:
Well, of course I wanna keep the door open. The 1099 letter has a reminder on this that I want to get a copy of the client’s tax return. Of course, for our clients who are using RTS for their tax prep, that’s coming through the 88, 21 system through the IRS tax transcript system. So it’s a little bit less of a pressure, but for clients who aren’t using RTS for their tax prep, right. We wanna make sure we’re getting a copy of that tax return every single page. And so I wanna plant that seed, uh, early on. Steven, to be honest, I’ve given up trying to get those from tax preparers because of the rules and whatnot. So we just tell the client, Hey, once you get it back, stop by the office, we’ll scan it or, you know, email it to us if you got it digitally.
SJ:
Yeah. Setting that expectation early is really important. I know other advisors, including Micah Shilanski, who spends a lot of time working with tax preparers to make sure they get a draft tax return before it’s even filed coz that can save a lot of headache. A and again, as, as we’ve started working with, uh, more advisors directly and we can easily provide that draft directly to them, but you’re gonna have to start early and often if you’ve got other tax preparers you’re working with, if you wanna see a draft return, which which can be really powerful.
MJ:
Yeah. I think you’ve gotta have a pretty good relationship with the tax preparer before you ask to see a draft before it’s, it’s filed that that’s a pretty audacious ask in my mind. I’m not saying it can’t be done. I know advisors, like I said, Micah does this all the time for you really gotta position that well, because what it sounds like is let me double check your work, which A nobody likes and B they’ve already got enough going on. Like the last thing they wanna do is have to correspond back and forth with you to be slowed down, to wonder where the return is at. Cause it’s waiting for your sign off. So be very careful with that. But there are certainly situations where it makes sense.
SJ:
Yeah. That’s a great caveat to that because really that that’s something that long term you can build towards that is not the first thing that’s gonna happen in that relationship. But especially as you think about how do I deliver more value to my clients and putting that effort into building those center of influence relationships. There, there are these types of things you can work towards if you’ve built that relationship of trust.
MJ:
Yeah. The only thing that comes to mind for me is that when we’re doing all this tax discussion right now, I’m also planting the seed for our fall surge meetings. I’m saying that, “Hey right now we’re doing the reporting for last year. And in October when we get together for our fall review, we’re gonna look at any year end tax planning that needs to be done based on what gets reported on your tax return.” So I’m already planting the seed for this is when we’re gonna meet again as part of the search meeting concept.
SJ:
Yeah. That’s so great of constantly prepping your clients for what comes next. Letting them know what it is you’re doing for them. That’s part of the dishwasher rule of, “Hey we’re you might not see it, but we’re actively doing these things and then here’s when we’re gonna connect on it and take next steps.”
MJ:
Yeah, I love it. It’s just an incredible way to add value to the relationship. And, and to, like I said, get so many bonus points with the client, with the CPA, et cetera.
SJ:
So I mean, now lot of this stuff we’ve been talking about in this episode has really been action oriented, but we wanna make sure that we always kind of take a step back and put this back into really concrete steps of, of what do listeners do next. So as you think about the conversation we’re having, what are your key takeaways of action steps that advisors should be taking?
MJ:
Yeah, I would say action item number one, which we didn’t touch on a whole lot, but actually number one is to get as versed as you possibly can be on your niche’s tax situation. Right? So I just work with retirees, not just that’s, who I work with is retirees and I know their tax situation inside and now RTS shameless plug is a great resource for that. I read those newsletters end to end because they gimme a lot of great, not just technical knowledge, but also the scripts to use with clients. It’s also something I ask other advisors. I know that they have that similar niche. Great. How are you helping your clients with tax finance? Cause I always wanna know what works, not what someone is theorizing about.
SJ:
Yeah. That’s really great as this errors in the middle of January. The other action step is get clear on what you are going to do for your clients this tax season. Maybe that’s the 10 99 letter. Uh, maybe that’s just an education piece, but well, I mean only do this for your clients that pay taxes. I mean, that’s, that’s, that’s fine. You can, you can skip the ones that don’t <laugh>, but tax is such an integral piece of, of the planning process that you should have some very specific action you are taking for all of your clients at this, this tax time of year.
MJ:
Indeed. Yeah. Yeah don’t let this opportunity go to waste right? At the end of the day, this is an opportunity for you to deliver massive value to, to clients and to their, their tax repairs.
SJ:
Yeah. And then of course the last action item I’ll throw out is that if you haven’t already, or if you haven’t recently go out to retirement tax services.com, you can get that tax reference guide. I mentioned and learn more about the content we’re putting out that is specific for advisors. This isn’t just, Hey, let’s quote the tax code. How does this work in practice for advisors? So Matt, thanks so much for being here with me today. Yeah. It’s my pleasure. It’s always fun to talk taxes. Yeah. And everyone listening, uh, good luck out there. And until next time, remember to tip your server and not the IRS. One
