Advising your clients on year-end tax planning

December 13, 2018 by Alex Noonan

about the author:

Alex Noonan

Technical writer

Joining Advicent as a partner support specialist in 2013, Alex provided high-quality support for partners within NaviPlan and Profiles. In 2015, he took that product knowledge to the learning development team as a technical writer, creating detailed documentation for partners with a practical focus on what they need to know. Alex received a BSBA from Drake University in Marketing/Advertising Creative in 2013.

As the end of the year approaches, clients may be too distracted to fully assess their year-end tax planning needs. Or, as many advisors have experienced, they may be rushing in for help at the last minute. These situations are perfect opportunities for advisors to show their value and are exactly where NaviPlan® is built to help. With its detailed tax calculation engine, which is complete with the most up-to-date tax rules and values, NaviPlan helps advisors give their clients peace of mind for year-end tax planning.

Let’s go over some of the most common areas that advisors will work with during year-end tax planning in 2018 and how NaviPlan is suited to handle them.

The Tax Cuts and Jobs Act

2018 was the year the Tax Cuts and Jobs Act (TCJA) was implemented, which has brought expanded standard deduction benefits for most Americans and has lessened the potential of Alternative Minimum Tax (AMT) for higher tax bracket households. Clients may ask how these changes impact their tax situation compared to previous years, which NaviPlan can fully answer through various detailed tax analysis reports.

The TCJA also changed how charitable contributions impact deductions. With the reduction of benefits, a client may want to compare how much their charitable contributions will influence their tax burdens. NaviPlan allows for easy side-by-side report comparison with alternative planning all on one page. To learn more about advising clients on charitable giving, see our recent blog “Advising HNW clients on charitable giving.”

Health care thresholds

Retirees may also have questions about recent changes to qualified medical expenses (QME) thresholds. NaviPlan has expanded its qualified medical support with the inclusion of Health Savings Accounts (HSA) and qualified medical expense tagging. These changes allow you to expand QME itemization and show any potential tax implications on both a tax and cash flow level.

Required minimum distributions

Required minimum distributions (RMD) are a common occurrence for most retirees and are something many clients still have questions about, despite their commonality. Clients must wait to withdraw this calculated amount from their qualified accounts until after the age of 70 and a half or they will suffer serious tax penalties. While the calculation of these withdrawals can seem daunting, NaviPlan automatically calculates not only what RMDs will be, but also any tax implications from the withdrawals. NaviPlan also supports inherited IRAs and calculates their implications even if a client is not at traditional RMD age.

While the end of the year can be hectic for both clients and advisors, NaviPlan is here to help accurately navigate situations such as these and remove the stressors of financial uncertainty.

To learn how a private wealth advisory practice with $130 million in AUM increased their revenue, prospects, and conversions rates by implementing NaviPlan, click here.

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