4 Tax Tips for Wealth Managers
Hiring a CPA can help you bring a much deeper level of understanding to a client's tax situation.
Click through to see some of the reasons having a CPA on staff will help clients, or read this as a single-page story here.
Read the cover story: Are CPAs Key to Financial Planning's Future?
1. Understand implications of investment income.
Will selling an investment this year produce gains big enough to trigger the Medicare surtax? Should municipal bonds be pursued as a source of tax-free income? Do you want your tax-oriented financial planning from someone who has one course in tax or from someone who does it all the time? asks Michael Kitces, director of financial planning at Pinnacle Advisor Group in Columbia, Md.
2. Get smarter about asset location.
Where assets are housed is a key component of Morningstars gamma factor, a way to calculate an advisors value. Proper asset location can boost returns by 20 to 50 basis points a year, Morningstar researchers have concluded.
3. Adjust retirement withdrawal strategies.
They are going to need financial advice on how to minimize taxes and generate enough income, says Roger Ochs, CEO of independent broker-dealer HDVest.
4. Probe tax returns to see what youre missing.
Can your clients shift income into another year to be eligible for a federal subsidy for health insurance on the new exchanges? (A family of four can earn up to $94,200 to be eligible.) Are they contributing enough to tax-deferred retirement accounts or too much?
Read more:
Are CPAs Key to Financial Planning's Future?
How a CPA Partnership Helped Build a $3.5B RIA
Expert Resources: Who Should Be on Your A-List?