For Tax Savings, Don’t Just Look to Your CPA



April 22, 2014JRW_WW.jpg


In a recent WEALTHWISE I told you about a client who saved $80,000 in taxes after we called a meeting with their other advisors. But sometimes collaboration comes about in a different way. Sometimes our clients’ advisors come to us.


The CPA of a couple named Fred and Tracy—who are our clients—called us recently with a concern. The CPA knew Fred and Tracy were expecting a similar tax bill to the one they had last year. But he also knew that was not going to be the case. The couple had withdrawn a considerable sum from a teacher’s retirement plan as well as an IRA. The actual tax bill would be about $40,000 higher.


Did we have any ideas on reducing this figure? the CPA asked us.


It was a smart question. The CPA was familiar with our role as Fred and Tracy’s PERSONALCFO. He knew we had a larger point of view on their financial lives than he did. He also knew we could serve as a conduit to their other advisors. After some discussion we learned that a $38,000 contribution to a different retirement plan had not been communicated to the CPA. The simple act of closing this “information gap” saved $15,000 of that $40,000 bill.


We see, and resolve, these types of issues all the time. For financially successful households, barriers to communication between different advisors can be substantial. Sometimes advisors behave territorially. Other times they simply don’t think to reach out to their clients’ other advisors. Sometimes the client doesn’t think to communicate to everyone. However it happens, the result is lost opportunities to avoid losses and make gains.


Someone needs to have a bird’s eye view of your financial life in order to pull your advisors into a team working together for your benefit. That’s the reason that if you only look to your CPA to find tax savings, you may be looking in the wrong place. The tax code is much more black and white than it once was. There is only so much a CPA can do. In my experience, a much better source of tax savings comes from having someone with a holistic view of your financial picture, someone who can integrate and optimize the efforts of all of your advisors.  


By playing this role, PARTNERSINWEALTH allows our clients to gain time and focus on other aspects of their life, while having confidence that their advisors are coordinated and looking out for their best interests. We would like to do the same for you. For more information, helpful guidance or professional assistance with your financial big picture, please contact Jim Waters, CFP®, at PARTNERSINWEALTH 713.964.4028 or