Bonus Section: Financial Advisor Referrals from the 1st Two Pages of a Tax Return (PT3)

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 fourth part of the series, click here.

Ok, here’s a big one.

LINE 12 Business Income

If there is something filled out here, it usually means this person is a self employed business owner. There are a ton of financial planning opportunities for the self-employed that are typically not being utilized. This is one of the best opportunities to refer your core 7 financial advisor partner.
So, if box number 12 is filled out, there are a few referral generator opportunities.

Number one is very simple, it’s just saying “Mr. Smith, being self employed, there are many financial products to help you be more tax efficient. How is your relationship with your financial advisor who specializes in financial planning for the self-employed business owner?”

Number 2, if box 12 is filled out, and there is nothing listed in box number 17 Rental real estate , royalties, partnerships, S-Corporations, trusts, etc., that typically means they are not incorporated. I believe that almost every business should be incorporated for protection reasons. This creates the opportunity to say “Mr. Smith, we are filing taxes as a sole proprietor on your Schedule C. It may make sense to incorporate for protection reasons. We should review this together with a financial advisor. How is your relationship with your financial advisor who specializes in working with the self employed?”

Noticing a client is self-employed by seeing the number in line 12 also corresponds to line 28 which shows if they have a SEP Ira, creating the opportunity to ask if there maximizing their deduction with a SEP or other retirement vehicle.

Basically, you want to see if there are any opportunities to create a qualified plan. Always ask are you funding your qualified plan? Is your spouse funding a qualified plan? That’s one of the great things about a sep. IRA, you can fund your spouse’s retirement plan with the proper business structure.

There are so many opportunities for a self-employed business owner, let’s illustrate one more great opportunity. Many times, there are partners, and there is a need to discuss an exit strategy. This may include a buyout plan insuring a key man, or buying out a spouse. Many of these factors need to be discussed. Ask these questions, and look to make introductions to your financial advisor partner when there is a need, and your client needs advice.


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