Talking taxes can be tricky for advisors, yet it is a critical piece of retirement planning. Regulations, and industry standards limit who can provide “tax advice.” At the 2018 T3 Advisor Conference this week, Covisum, the developer of SmartRisk™, Social Security Timing® and Tax Clarity™ software solutions for financial advisors, announced the release of a white paper written to help advisors gain a clearer picture of what exactly constitutes “tax advice.” The paper titled, “The Elephant and The Snowball,” tackles how advisors can talk taxes with their clients, while overcoming the “taxable income” challenge.
“Taxable income represents a complex set of interactions between different rules related to different types of income – as advisors, it’s important that you can distinguish and communicate the difference,” said Covisum President Joe Elsasser, CFP®, RHU®, REBC®. “Financial advisors and their clients cannot afford to get this wrong. A client’s financial plans, retirement planning and Social Security strategy all depend on how well an advisor understands the consequences.”
The paper, written by Elsasser, identifies three of the biggest hurdles advisors face when talking taxes with their clients – defining tax advice, identifying taxable income and discussing tax implications.
“Advisors will no longer be able to hide behind disclosures stating that they do not provide tax advice,” stated Elsasser. “When it comes to withdrawal strategies and tax time, clients expect their advisors to know and understand the benefits and potential landmines of their financial strategy.”
Advisors attending the T3 Advisor Conference in Ft. Lauderdale February 6-9, 2018 can pick up their copy of “The Elephant and The Snowball” at the Covisum booth #717. The paper is also available as a free download here.
NEW TAX LAWS CAN PRODUCE TAX TORPEDOS
Elsasser will also offer a Tax Clarity Lightning Demo during his breakout session on February 9, 2018 from 9:10 AM – 9:19 AM in the Caribbean Ballroom – Salon I-III. Those attending will see how the new tax rules can result in a Tax Torpedo of up to 49.95% for their clients. “Clients often don’t understand the relationship between ordinary income, Social Security and capital gain, leading to potentially significant tax inefficiency in their retirement strategy,” Elsasser said. “The goal is to help clients visualize the new tax landscape and make better decisions about which income streams to use at which points in retirement.”
Covisum recently announced the roll out of more than a dozen changes to its Tax ClarityTM software. With these changes, advisors can now confidently perform tax simulations for 2017 and 2018, showing their clients comparison reports based on various tax strategies and scenario planning.
Advisors attending the conference are also invited to stop by booth #717 for a demo of Tax Clarity software, which calculates a client’s effective marginal rate.
Covisum provides financial advisors with software, training and support to deliver retirement income plans that improve the lives of clients by facilitating better decisions. As the name represents — “co” means joint or shared, and “visum” means vision — Covisum helps advisors and their clients create a shared vision of the future. For more information, visit www.covisum.com.