Help Clients Pay Less in Taxes — Case Exmp #1
Everyone loves paying taxes. I don’t know about you, but I regularly call up Uncle Sam and ask how I might be able to pay more than my fair share? Wait… no, that’s not right. So, let me tell you about a recent client case where such a scenario almost happened.
Ms. Tessler, a delightful woman in her late 70’s, came to my office for consule. She was recently widowed, only a short time, and concerned that she may be paying too much in taxes. In addition, Ms. Tessler was unclear about whether or not she was being taxed on her social security. She wanted to do the right thing, but also felt like she had probably paid enough taxes for one lifetime.
After looking into her assets and inputting the values into the system, I was able to show Ms. Tessler, in a way that she could understand, that she was paying more than $7000 to the government each year and 79% of her social security was being taxed. Astonished at this figure, she asked if there was anything that could be done. With the assistance of the SIPS Retirement Planning Software, we were able to work together to create a plan that would reduce her marginal tax rate down to zero.
Let me repeat that. We were able to reduce her marginal tax rate down to zero!! She was eager to move forward with implementing the new plan.
Taxes can be a confusing issue for anyone. Often on the bright side, there are a number of ways to move money around to be shielded from the IRS. This is an integral part of income planning, which provides a unique opportunity for the financial advisor to instill confidence in the client.
Just imagine being able to work with a client to create an income plan that reduces the pain of the taxman. Using the SIPS Retirement Planning System, I was able to point out to Ms. Tessler why her tax bill was so high and create a few scenarios to help her overcome the concern. She nearly skipped out of our office she was so excited. The feeling of accomplishment was incredible and the client left confident knowing I was on her side.
The government is not going to call your clients and explain how to save money, especially on your taxes. However this is what a financial advisor can and should do, for their clients. Creating a comprehensive plan includes a solid tax strategy. Giving both client and advisor good reason to be proud of the service provided.
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