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This Year’s Tax Documents Can Help You Plan for the Future

This Year’s Tax Documents Can Help You Plan for the Future

February 12, 2020

There are two words that strike fear into the heart of every American: tax season. And, unfortunately, I can’t sugarcoat it for you – tax season isn’t fun for anyone.

What I CAN do is help you make the most of your efforts. Getting your paperwork ready to submit your taxes either to the IRS or to hand over to a CPA for assistance can be a time-consuming task. So, let’s make the most of it!

For example: Your expense worksheet is an important part of your prep for tax time – especially for business owners. Let’s make it work for your past AND future spending; your CPA will use this to help determine write-offs from the previous year, but your financial advisor can also use it to look for opportunities and improvements for the future.

Here are some other examples of paperwork that can do double duty.

Your Tax Return

Your tax return is invaluable when it comes to telling the story of your financial life. Financial advisors will take a close look at this information and determine where improvements and modifications can be made.

For example: If high income taxation of your investment portfolio is noted, an advisor might suggest updating your portfolio to make the most of tax-advantaged investments. Or an advisor might look at your current mortgage and suggest new opportunities for refinancing.

In short, your tax return is a key component to creating a custom Financial Roadmap.

Your W-2 and 1099

Many people don’t think much about their W-2s or 1099s and their value to their overall financial picture. However, these documents are crucial when it comes to your workplace benefits.

As we discussed in a previous post, “I’m particularly passionate about looking at my clients’ benefit packages because I know that benefits can account for almost 50% above an employee’s wage (Source). You read that right: FIFTY PERCENT. This means that if you’re making $20 per hour, your benefits could bring the value of your wage up to $30 per hour because your employer is paying for them on your behalf.

So, not looking at what’s available could be like leaving money on the table.”

In other words, looking at your W-2 and 1099 helps us kick-start your complete financial planning.

Your Retirement Planning

For business owners, the results of your tax return provide us with the necessary data for identifying dollar limits to the amount you may defer/invest to your retirement plan. It’s important for us to look at all of the options; Solo 401(k)s, SEP-IRAs, KEOGHs, and Defined Benefits Plans are just a few of the things we’ll investigate.

So, as you move into tax season, remember that gathering all of these documents is not just about the previous year’s spending. Do your future self a favor and use this information to create a Financial Roadmap that works for you. It’s simple to create another set of copies or send one extra email to your financial advisor and give them everything they need to get you on the right path!

Debbie Charpentier has been serving clients since 1989 by using a holistic, comprehensive approach that helps clients create the life they value and the legacy they envision. Charpentier Wealth Strategies is a Bakersfield, CA Financial Planning practice that offers fee-based financial planning services. To contact Debbie, email Debbie Charpentier is a registered representative offering securities and investment advisory services through Lincoln Financial Advisors Corp., (Member SIPC). Charpentier Wealth Strategies is not an affiliate of Lincoln Financial Advisors. CRN2957047-021820