Income taxes are a common pain point for CRE brokers. Your current process of giving last year’s tax forms to your CPA likely has you missing opportunities to save taxes because many decisions must be made before the end of the tax year. This needs to change.
CPAs work in a high-volume business and often times don’t have the appropriate time to spend with you making adjustments and changing strategy throughout the year. You get one look during tax season and they are on to the next tax return.
CPAs are generally historians looking at last year’s numbers. As a sports analogy, CPAs are scorekeepers while financial advisors are coaches on the field making game time decisions and adjustments to the plan.
A common game time adjustment is when income comes in higher or lower than expected. If income spikes so should the estimated tax payments you are making. It is also possible an adjustment to your salary should happen if you’re setup as an S-corp and paying yourself wages as an employee.
Increasing your retirement account contributions or changing the type of retirement plan you are using to allow for greater contributions ought to be considered. Should you add your spouse as an employee to increase your opportunity for retirement account contributions?
Cash flow can be pretty erratic for CRE brokers. It’s possible your income will be the same as last year but you don’t have your first transaction close until April. With income taking so long to arrive and cash flow being tight it might make sense to delay running payroll and lowering or entirely eliminating the first quarter estimated tax payment.
So many things can happen throughout the year that deserve more attention and conversation with your CPA than the one-look per year they give while preparing your tax returns. Your financial advisor is better suited for developing strategy but is often left out of the loop with taxes. Or you are put in the position to facilitate the conversation between your CPA and financial advisor. We’ve seen this game of telephone lead to missed opportunities and mistakes.
Worse yet, many financial advisors are not allowed to give tax advice because their compliance department will not allow them. This puts you in the undesirable position of having to lead the conversation and strategy with your CPA.
The more time you are spending coordinating between two financial professionals or having to learn much of it on your own to communicate to your CPA means the less time you have for working on your business to increase revenue.
We have long understood the importance of coordinating financial advice with tax planning. This is why our financial advisors are tax experts. We have an in-house team of tax professionals, a CPA and Enrolled Agents, preparing tax returns and delivering tax planning throughout the year that adapts with the constant changes CRE brokers experience throughout the year and throughout their careers.
Having the CPA and tax team within the same office as your financial advisor creates great efficiencies to deliver integrated financial advice to you.
Stop playing middleman and missing out on opportunities to lower taxes and keep more of what you earn.
