What do you hear when you listen to your customers?
It’s tax season and, whether it’s virtually or in person, we meet many of our clients. In some cases, this is the only time of the year that we will hear from them. We need to collect the proper financial information so that we can prepare their tax returns and, for some, annual personal financial statements. While your customers share their financial activity with you, are you really listening to the information they provide? Here are some ideas for learning more about your customers by paying more attention to what they’re saying.
Does your customer have an inventory sales report of 1099B? Beyond recording those sales on the tax return, take the time to ask your client about stock sale decisions. Was there a need for additional money? If so, this information could help you start a discussion about budgeting and financial management. Or maybe the taxpayer is using the money to buy other goods or help a family member. Tax and planning ideas can sprout from discussions of why items were sold. And don’t forget to talk to your client about tax issues related to the timing of stock sale decisions.
Likewise, if your client invests in stocks or other assets, your expertise in the tax ramifications of owning those items may allow you to provide useful tax information to your client for continued ownership of additional stocks, d a vacation home or any other investment could be.
Have your clients contributed to charities? For many, the deduction allowed for contributions is lower than in the past, but careful planning can help a taxpayer make itemized deductions in a year and perhaps get the tax benefit of higher contributions to charities. favorite charities. But don’t stop there, because a narrow deduction doesn’t change the emotional reasons for choosing charities to support. Talk to your client about the decision-making process behind choosing the organizations to which the taxpayer contributes. You might suggest that your client get more involved with the charity, perhaps in an advisory capacity or on a board of directors, or your client might be able to help the charity connect with other potential donors by helping the charity explain to potential donors the impact of recent changes in tax law. deductions for donations.
Does your client have children? Have you had any discussions about education fees, financial assistance, education savings plans, and the tax implications of all of these? Otherwise, tax time is a good idea to start that conversation and help your client plan for their future. If your client’s children are already in college or are paying off student loans, be sure to discuss current COVID-related information on student loan cancellation and employer-sponsored student loan payments, as well as tuition tax credit options.
Does your client contribute to an IRA or 401 (k) retirement account or other tax-deferred retirement account? Here is an opportunity to discuss investment alternatives, borrowing, loan options, withdrawal requirements, and retirement planning in general. Many clients do not even mention the company’s pension plan to the tax accountant, believing it to be irrelevant to current taxes. So you can start the discussion by asking for information on how your client is planning for retirement.
Be sure to include questions in your meeting with the client about family members, the impact of COVID-19 on job security, and expectations for the future. You may find that these questions lead to additional opportunities to provide useful services to your clients.