Wednesday’s deadline will end as all the other April 15ths have on calendars past, a mad rush on Monday (mentally the last day) to get data tweaked, lost deductions resolved and the returns that simply took too long done.
When those clients are called at the last minute the messages conveyed are far too often regretful and should not be!
If your clients have complex assets, K-1`s and or other kinds of investments that are allowed to push out the reporting forms late in March those filers getting documents just before the deadline should be coached by you to turn a mental and behavioral corner in their lives.
“Before retirement bob you’re holdings were simple and w-2s came out first and February is when you filed. You did that for 25 years so it became a habit.”
Now that your retired and managing your assets with the complex ideals of Tax effective retirement income and with an estate planning as a second agenda you are using different tools that cannot and do not release documents until mid-March.
You need to get used to the “retired tax calendar” which is two dates per year. Let’s set the first date now for somewhere between Thanksgiving and Christmas which is when we are going to meet next, review the year and make sure next year’s cash needs are in liquid form. Then we will rough in your 2015 tax return and “guestimate” the last months income and see what we are looking like. That way if there is a problem we have a few weeks to fix it. Perhaps you inherited a sisters estate and she had IRA`s, we can un convert planned Roth conversions we accomplished this June because the surprise additional IRA income would change the plan (sorry for killing off your sister!)
Or what if we had a big winner in the stock portfolio…we could sell to take the capital gain but also cherry pick some losers to sell as well so the line 13 entry on your 1040 is negative (3000) the most the IRS allows.
Don’t worry if you want to keep your losers well rebuy them in your IRA, buy an ETF equivalent or purchase options so you won’t miss the opportunity you feel they represent.
Plan on the “tax rough in” date every November or December as the new normal Tax Day not February the following year when it’s too late to fix problems. The second date is April first. YOU ARE NEVER FILING AN ACTUAL RETURN AGAIN BEFORE THAT DATE!
That’s the new normal and since you’ll already know from the planning meeting what it’s going to look like within a few dollars it isn’t a surprise. Getting the paperwork in is just the proving our November planning was correctly done.
Change your client’s habits, change your mindset and theirs!
The Tax What if Doctor;-)