RTS #020 Another tax deadline down, now what?

Hopefully, this doesn’t come as a surprise to anyone, but last Monday, October 16th, was the extended tax filing deadline for individual returns. This hopefully comes as a surprise to no one and means the book can officially be closed on 2022. The only question left is, “How will you make sure 2023 is different?”

You may be one of the few who is totally crushing tax planning and feel like 2023 is really just about doing more of the same (I would challenge that, but more on that later). But for most of your clients, taxes were likely still painful this year, and there is almost guaranteed to be fear and uncertainty when they think about taxes in the future. Tax planning is not about eliminating taxes entirely (let’s keep things legal), but having an intentional, proactive strategy makes all the difference.

As so many Advisors head into fall surge (if you are not yet familiar with Surge, check out how the team at The Perfect RIA are delivering massive value through this incredible approach), year-end tax planning should be top of mind. If tax planning isn’t already on your fall meeting agenda, it might be too late to pivot for this round, but this has to be added to your calendar NOW for the next cycle, or you’ll get to a year from now and still be left wishing you had made a change.

There are still over 2 months until the end of the year, which means you absolutely have time to do meaningful tax planning with clients, even if you are just starting out. Every Advisor, regardless of years in the business or years doing tax planning, can look for areas to improve each and every year. If you are new to tax planning, that might be a simple step like requesting tax returns or reviewing withholdings and estimated payments to prevent surprises at tax time (don’t overcomplicate getting started, ask for a year-to-date pay stub for working clients, for retired clients you might already have access to most of the data). If you already have a solid tax planning base, the changes might be more subtle or even as simple as revisiting your existing approach and improving the delivery and experience, even if your focus is on the same strategies.

We work with Advisors who have 20+ years of experience with taxes and still find ways to level up each and every year. A recent example that Micah Shilanski shared at the RTS Tax Planning Summit was adding the timing of Roth conversions to his 2023 1099 letter for all of his clients. This is a value add because it helps tax preparers know when the taxes should have been due and can help avoid unnecessary underpayment penalties.

What can you do about it?

Take the time to ask yourself and your team, “What have we done to improve how we deliver value on tax planning in 2023”. If you can’t come up with a concrete answer, you still have 10 weeks to make a change.

Happy Tax Planning!

About The Newsletter

The tax code is 80,000+ pages and Google has 875,000,000 results when you search “Tax Planning”, so each week we are going to help you wade through all of that noise and get to the Relevant Tax Stuff.