Broker Check

Tax Planning/Preparation

How We Work at Frank Advisory Services

Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your objectives for future living. Long-term relationships that encourage open and honest communication have been the cornerstone of our foundation of success. At Frank Advisory Services  we have built our practice on the consideration of tax implications on investment strategies. This allows us to coordinate investment decisions with the tax liabilities of our clients. We offer income tax planning and preparation, year-end planning and projections.

What To Look For In Form 1040

Your dependents…status updates

Review the dependents claimed and ask about each one. Changes may trigger discussions relating to college savings, planning or preparing a long-range plan for elderly parents.

Are you self-employed? Reap the potential benefits

Review Schedule C forms which show self-employed business income or loss. With that in mind, discuss how the client is saving for retirement, and evaluate the application of a sep or other retirement savings vehicle that can potentially boost the rate of savings or decrease one’s tax liability.

Short-term gains…a tax burden

Examine the client’s Schedule D and evaluate the capital gains reported. This is the perfect time to remind the client that short-term gains are taxed at “regular” income rates which, for high wage earners, could easily double their tax burden on those same investments. Long-term gain tax rates are much lower and therefore, advantageous. Ask the question…is there capital gains distributions from mutual funds?

Charitable giving…make it work for you, as well

Review Schedule A where deductions are itemized. Charitable giving can benefit from a strategy, as well. Know what your options are. If the client has reached age 70 ½, remind them that they have the option of donating directly from their IRA (there can be tax benefits to this). Consider that appreciated assets/stock can be donated in lieu of cash. If philanthropic discussions are appropriate, consider the benefits of a donor-advised fund or even a foundation.

Your health…don’t ignore the inevitable

Discuss the impact of sizeable medical expenses…hospitals, doctors, prescription, rehabilitation etc. that populate Schedule A. This may uncover issues that are unresolved relative to dependent care.  Discuss wellness plans, long-term care insurance options, as well as any eldercare concerns.

Mortgages…what’s up in this market? What’s right for you?

It may seem too simple, but have a conversation regarding mortgage interest deductions, and the current interest rates offered in the market. It may make sense to discuss refinancing options.  Case in point, if an older client has paid off his home, and circumstances warrant it, perhaps a reverse mortgage is in order.

Partnerships…not always what they seem

Review Part II of Schedule E where supplemental income from partnerships is noted. These types of investments are generally illiquid and can cause some adverse tax consequences. At a minimum, they add complexity to tax filings. States are becoming more aggressive in the collection of taxes due, and many partnerships report income in multiple states.  

The value of advice/advisory fees

Examine Schedule A miscellaneous itemized deductions where investment advisory fees are reported. This will enable you to see what clients are paying for investment advice. Probe as to whether they are happy with the advice they are receiving.

The structure of your business

Anyone reporting more than $100,000 in gross income on Schedule C is a decent target for an audit from the IRS. This is an appropriate moment to discuss the structure of their business. Might it be wise to incorporate into an LLC, S-Corp or C-Corp? If so, the client may be able to take advantage of other benefits and reduce potential liability.

Marginal tax bracket

Review the client’s marginal tax bracket to determine whether solutions like Roth conversions make sense. There may be opportunities to shift assets to other family members, depending upon relative tax brackets.