Bonus Section: Financial Advisor Referrals from the 1st Two Pages of a Tax Return (PT2)

This is the second of a six-part series of posts on how to use the first two pages of a tax return to identify referral opportunities. Click here to go to the beginning of the series. For the third part of the series, click here.

Line 8a- TAXABLE INTEREST- if you notice there is a lot of taxable interest in this section, there are many reasons your client could benefit from speaking to a financial advisor. The proper way to suggest this is like this “Mr Smith, there may be an opportunity to reallocate these funds into a more tax efficient strategy like a tax-deferred vehicle. Are you earning enough interest on that cash? Is it possible to save on taxes by moving out of taxable interest funds, and into funds that can grow tax-deferred for the long term? How is your relationship with your financial advisor?

LINE 9- ORDINARY DIVIDENDS- if there are high numbers in this section, it would be beneficial to know the rates of returns on the funds, as there may be a better investment strategy? It may make sense to move to a more tax advantaged standpoint. The way I suggest to ask this question is “Mr. Smith, have you considered moving this money into a tax-deferred vehicle, so that you are not paying taxes on it every year?

LINE-10 TAXABLE REFUNDS-Now, if there is a big number here, there may be the opportunity to suggest increasing contributions to their 401k. (Before making this suggestion, always be sure to check the client’s income and the w2 to get a better idea if this suggestion is feasible.

Now as we said earlier, in no way are we pressing our clients to execute this. We are just trying to create opportunities to ask the referral generator question, to suggest a possible discussion with a financial advisor for the benefit of the client. So for example, if an accountant sees a large number in column number 10, and verifies that the client is not maxing out their 401k, the accountant can say “Mr Smith, you have a large amount of taxable interest that you are paying taxes on, and I also noticed that you aren’t maxing out your retirement contribution. There may be a great opportunity to offset some taxes. How is your relationship with your financial advisor who specializes in retirement? It is always beneficial to show a tax benefit when making these suggestions.

Here’s another example, if you notice say a $5,000 to $10,000 here, it may be better served as monthly cash flow and directed towards a 529 plan, or retirement, or just as forced savings just to build up cash reserves. The point is to make the introduction to someone who is an expert that can help your client analyze their options.


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