September is a good tax-planning checkpoint

In just a few days, we’ll have hundreds of advisors together in Scottsdale talking about tax planning, implementation, and what it really looks like to put good ideas into practice with clients.

I always enjoy those conversations.

But there’s something I think is easy to lose sight of when we spend so much time talking about what’s next:

Sometimes the best place to find your next planning opportunity is by looking at what already happened.

Right now is actually a pretty good time to go back to your clients’ prior-year tax returns.

Not because you’re trying to redo last year.

Because you’re trying to understand this year.

By September, you usually have enough information to see where the current year is heading. Income has started to take shape. Investments have moved. Business activity has changed. Maybe there have been some big financial decisions.

And when you put that information next to the prior-year return, things start to become a lot more interesting.

Maybe there’s a carryforward that needs to be accounted for.

Maybe the client’s income has changed enough to create a new planning opportunity.

Maybe something that happened last year should have been addressed earlier this year.

Or maybe the return simply tells you that everything is going according to plan.

That’s useful information too.

The point is that you can’t really know what to do next if you haven’t taken the time to understand what you’re starting with.

That’s one of the reasons we created the 37-Point Checklist for Reviewing Tax Returns.

It’s not meant to turn every tax return review into a three-hour exercise or have you searching for problems that aren’t there.

It’s there to give you a repeatable process for looking at the return and asking the questions that can lead to better planning conversations.

And I think that’s a good exercise to do before the Summit.

We’re going to spend several days talking about strategies, ideas, and ways to create more value for clients.

The more you understand about your clients’ actual tax situations going into those conversations, the easier it is to take those ideas and figure out where they might actually apply.

Because ultimately, tax planning isn’t about collecting good ideas.

It’s about knowing which ideas matter for which client and having enough time to do something about them.

So if you haven’t done your prior-year tax return reviews yet, September is a pretty good time to get them on the calendar.

Happy Tax Planning,
Steven Jarvis, CPA