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.
Welcome to the Retirement Tax Services podcast! Steven is doing some myth-busting on this Tax Q&A Friday. In fact, he’s tackling half-truths we sometimes repeat as facts—though we’ve never bothered to look them up.
For example, he was at a gathering recently: Someone stated matter-of-factly that the Great Wall of China can be seen from space. Steven could have humiliated that person, but he chose to say “Why don’t we just check?” instead. We’re not picking on anyone, but this approach is overdue when it comes to taxes.
Intelligent financial advisors sometimes believe similar tax myths.
We all make mistakes. It’s human nature to assume something that fits with how we see the world is true. Therefore, many of us are often guilty.
When time is short, it’s tempting to bypass the appropriate amount of homework. Consequently, we’re all capable of spreading half-truths—unless we verify them first.
No, we don’t want to be your mother. However, Steven’s point is that you have to start keeping this in mind where taxes are concerned.
Running with tax myths can seriously harm clients, so be honest. What assumptions have you been overly confident about?
Business owners can even rent their personal property to their business tax-free, as well. For those who qualify, the Augusta Rule can yield a 2-week break.
Let’s move on to the hard facts: Only CPAs or enrolled agents can legally talk about taxes, right?
Wrong! Pat yourself on the back if you’re a listener who already knew. You can offer tax–planning strategies without straying into tax preparation.
In fact, you may be missing the boat, professionally, if you don’t. Don’t close the door on this fertile ground for providing valuable opportunities.
But seriously: Tax planning is only for business owners and retirees. Why would anyone in their right mind say otherwise?
Because they’ve done their homework, they’ve been listening to Steven, or both. In other words, taxes can get complicated in some clients’ circumstances, but they’re always relevant.
If you make money, you have to pay taxes. This gives tax planning inherent value. So, pay attention in order to find those potential opportunities.
Last but not least, some financial advisors view their firm’s Compliance department as an obstacle to tax planning. However, they’re not your enemy.
Working with Compliance as part of your team—not as an adversary—often gets advisors to their goals faster. Think of them as a resource. Win with them by working to limit risks to yourself and your client.
Thank you for listening.
Hello everyone, and welcome to the next episode of the Retirement Tax Services podcast: 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. Today is once again a tax Q&A Friday. So you’re going to have to bear with me for just a minute; It’s going to sound like we’ve gone way off the deep end here, but we’ll bring it back to taxes, I promise.
I was recently at a great conference put on by the perfect RIA, their live 2021 event, and as I was there with a bunch of other great advisors, at one point we were hanging out and one of the advisors says to the group, ‘Hey, did you guys know that you can see the great wall of China from space?’ Most of the group responded with, ‘oh yeah, that’s right. I knew that.’ But I looked around and said, ‘I’m pretty sure that’s not actually true.’ Now, I knew for a fact it wasn’t true, mostly because I had been guilty of saying the same thing at some point in the past and had been called out on it. But it really rarely does any good to aggressively tell people they’re wrong. Just usually doesn’t get the reaction that you’re hoping for. So instead I said, ‘why don’t we just check really quick?’ Now of course we all had smartphones. So we all pull it out and start simultaneously looking for the answer. The advisor who brought up the so-called fact, actually was the first to Google it and excitedly started reading something on his phone to the effect of, the well-known fact that the great wall of China is the only man-made structure you can see from space is – and then the smile melts off his face as he finishes the sentence – not in fact true. So you cannot in fact, see the great wall of China from space. Some of you I’m sure are skeptical because of how many times you’ve heard this or said it confidently yourself. So I will make sure I include a link in the show notes to NASA’s website, so that you can read NASA’s take on this. When you stop and think about it, it’s going to make sense that this isn’t true. How would you be able to see the great wall of China from space and not a major freeway or an international airport or a sports stadium? These are all man made structures that are clearly larger and could be more easily seen from space, if you could, in fact, see any of them. Many of us are often guilty of hearing things like this fact – about the great wall of China – that fit with how we already see the world, and are just taking it for granted that they are true. We don’t really take the time to question some of these things that we hear on a regular basis.
So, let’s bring this back to taxes. What does the great wall of China possibly have to do with taxes? So, as I was having this conversation with these advisors, really, it got me thinking; what are so-called facts about taxes that you’ve never taken the time to research yourself? Or tax facts that you state with confidence, but are either flat out wrong, or at least not as clear-cut as you make them out to be. So, let’s talk about maybe some examples of some of these things that we say a bit more confidently than maybe we should. How about the fact that, all income is taxable? This of course is wrong. Now, probably the first answer that comes to mind as well, of course, there’s the 0% capital gains bucket that we’ve got some tax free income there.
If you’re really on your game with tax planning, you probably also know about the Augusta Rule that allows individuals to have up to 14 days of tax-free rental income in a year. And if you’re really next level, then you know that, uh, business owners can actually rent their personal property to their own business for up to 14 days a year, tax-free. So, although the IRS does a pretty good job of making sure they get their cut of anything you do, there are some exceptions. So just assuming that general statements such as, ‘all income is going to be subject to tax’ is true, can lead us to missing out on opportunities. How about the fact that once you hit a certain income level, you can’t make retirement plan contributions anymore, right? No, of course this is wrong as well. What about backdoor Roth contributions now?
I’m sure we’ve all had horror stories with form 8606 getting forgotten, or filed incorrectly, but just because the execution takes precision, it doesn’t mean we should avoid the opportunity. How about the fact that, only CPAs or enrolled agents can talk about taxes? Now, hopefully, unless this is the first episodes you’ve listened to, you know, you can confidently say that that is just not true. We’d love working with people who spend all their time or experts in these fields, but that doesn’t mean they’re the only ones that get to bring these things up. So recently talking to an advisor that the way he put it, that really stuck with me was that if you have a tax preparer, you don’t necessarily have a tax planner. These are two different things. So while the compliance, the tax preparation piece is of course, really, really important that doesn’t automatically mean you’ve got the tax planning or the forward-looking piece covered.
How about… Here’s what I hear from advisors at times, tax planning is only for business owners and retirees. Again, depending on how long you’ve been listening to this podcast. You definitely know that that’s not true. Now, taxes are certainly varying degrees of complicated, depending on a specific client’s circumstances, but they are always relevant. If you make money, if you pay taxes, then tax planning has value. So we want to make sure that we’re paying attention to where those opportunities might be. Not as directly related, but how about this one that comes up quite often related to taxes and is a big hesitation for some advisors in providing tax planning.
The so-called fact that compliance is your enemy or that compliance prevents you from being able to serve your clients. Now, I am not a compliance expert. Please don’t try to take this podcast as an approval of what you are doing. Please keep working with your compliance department. But, I do feel very confident that if you’ll work with your compliance department, as a member of your team and not your adversary, you can find ways to get this done. And I say that confidently because of the number of advisors I work with, who are able to do just that. When you stop seeing compliance as an obstacle and start seeing it as what it is, which is a resource, a way to make sure that you’re protected, that you’re limiting your risk and that you are providing value to your client and not exposing them to unnecessary risk, then you’ll be able to get a lot more done.
Last one I’ll touch on is how about the fact that, CPAs never give referrals. Now that may feel true for you personally, depending on your experience in the industry, but I’ve been to enough CPA industry conferences that I can promise you that there’s no conspiracy going on, where we all get together and collude to make sure that no referrals get sent to financial advisors. In fact, I was having lunch with a CPA just this last week who absolutely loves sending referrals to one particular financial advisor. Now, he knows dozens of others that he would never in a million years send referrals to. And this CPA actually, he doesn’t listen to the podcast yet. We’ll get him on it. But he really went through some of the same things that we’re talking about. That the one advisor he does send referrals to, is an advisor who started with here’s how I provide value to my own clients. He never came to the CPA and asked for referrals. He didn’t ask him for a list of his clients. A situation had come up and the advisor just openly and freely gave his thoughts on how the situation should be resolved for the client without any discussion of, ‘oh, and I have to be the one to do it’. So, when you approach CPAs or other centers of influence the right way, and you build relationships that are based on how you demonstrate value, this so-called fact that CPA’s never give referrals gets thrown right out the window, but it’s up to you to change that dynamic.
Now we started with the great wall of China being visible from space or not visible from space, which if you weren’t driving, as you listen to this podcast, you’ve probably taken the time to pull out your phone and validate by Googling it. That’s a pretty easy question to Google. Some of these other things related to taxes that I’m talking about are a lot more challenging to Google and find answers to. I totally get that. That’s actually pretty much the exact reason that Retirement Tax Services – or RTS as we like to call it – was created, because there were advisors constantly looking for better answers on the how of providing value through taxes to their clients, and simply typing these questions I’m talking about into Google, wasn’t giving them the answers they were looking for. It wasn’t providing the value they were expecting.
So, this podcast is really all about content and action. But I do want to take just a minute to let you know that at RTS, our cart is currently open for new members to join and get access to tax planning resources focused completely on financial advisors. Really these resources are designed to take you beyond just Googling these answers and making sure that you’re getting answers and resources that you can be confident in, not just that they’re accurate, but that they’ve been tried and tested by real advisors who are currently doing this in their practices. That it’s not just theory. It’s doing what works in the trenches. So, at least when this podcast is released on June 25th, I’m not sure when you’re listening to it, the cart will be open, but it will only stay open through June 30th. Just like you, our team wants to dedicate as much time as possible to delivering massive value to our clients, which are the financial advisors who are members of our network. So our cart will only be open for just those few days. And then our focus goes back entirely to that value we are providing. So go ahead and go out to retirementtaxservices.com or you can send an email to email@example.com, and we can get you the link. Really excited to expand our network of advisors once again, as our carts open this time.
So we still want to end with action items as we do on all of our episodes. So the first one I would challenge you to do is to write down a tax fact that you’ve always taken for granted, but never vetted on your own. Even if it turns out to be true, because I’m certainly not accusing you of having all the wrong information on taxes, taking the time to do this is going to build your confidence on these topics.
And that’s a common theme I hear from advisors, especially as they’re starting out or looking at new topics to address with clients – that it can feel a bit intimidating when you first start talking about new topics. The more time that you can spend researching these topics from trusted sources, the more confidence you’re going to have as you go into that meeting with the client. And of course you can always still end that conversation and probably should with, and we’ll work with your tax preparer to make sure this gets implemented correctly, but take at least one thing. One tax topic that you think is applicable to your niche and take the time to do do that.
The next action item I would recommend is that you find a great resource now, of course, I’m partial to RTS, but there are a lot of great resources out there. So commit to using them. We’d love to have you join our members, but like I said, regardless of which resource you pick, make sure that you commit to having that resource so that you are providing the most value possible to your clients when it comes to tax planning.
The last action item I’m going to throw out of course, is to make sure that you’re getting tax returns for all of your clients, every single year. So that as you continue to build your knowledge base and your confidence in these different tax topics, you have the information you need in front of you to be able to uncover these opportunities for your clients and work with them to see that value through tax planning. All right everyone, that’s all I have for today. Really appreciate you listening in, take a few minutes to go out to retirementtaxservices.com so that you can see the full list of benefits of becoming a member. Until next time, good luck out there, and remember to tip your server, not the IRS!
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.