march2021 - 4

FROM THE EDITOR

What Do You Hear When
You Listen to Your Clients?

IT'S TAX TIME and, be it virtually or in person, we're meeting with many of our clients.
In some cases, it's the only time all year we will hear from them. We need to gather the
appropriate financial information so that we can prepare their tax returns and, for some,
annual personal financial statements. While your clients are sharing their financial activity
with you, are you really listening to the information they are providing? Here are some ideas
for learning more about your clients by paying closer attention to what they are saying.

Does your client have a 1099-B
reporting sales of stock? Beyond
recording these sales on the tax
return, take the time to ask your
client about stock selling decisions.
Was there a need for additional
cash? If so, that information might
help you begin a discussion about
budgeting and financial management. Or perhaps the taxpayer is
using the cash to purchase other
assets or help a family member. Tax
and planning ideas can germinate
from discussions of why items were
sold. And don't forget to talk to your
client about tax issues relating to
the timing of decisions on selling
stocks.
Likewise, if your client is investing in stocks or other assets, your
expertise in the tax ramifications
of owning these items might enable
you to provide helpful tax-related

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Today's Technology for Tomorrow's Firm

information to your client for ongoing ownership of additional stocks,
a vacation home, or whatever the
investment might be.
Did your clients contribute to
charitable organizations? For many,
the allowable deduction for contributions is lower than in the past,
however careful planning can help a
taxpayer lump itemized deductions
in one year and perhaps get the tax
benefit of higher contributions to
favorite charities. But don't stop
there, because a restricted deduction doesn't change the emotional
reasons for choosing charities to
support. Talk to your client about
the decision-making process behind
the choice of organizations to which
the taxpayer contributes. You
might suggest your client get more
involved with the charity perhaps
in an advisory or board position, or

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your client might be able to help
the charity connect with other
potential donors by helping the
charity explain to potential donors
how recent changes in the tax law
impact deductions for donations.
Does your client have children?
Have you had any discussions
about college costs, financial aid,
college savings plans, and the tax
implications of all of these? If not,
tax time is a good idea to start that
conversation and help your client
plan for the future. If your client's
children are already in college or
are paying back student loans, be
sure to discuss current COVIDrelated information on student loan
forgiveness and employer payments
of student loans, as well as options
for tax credits relating to college
costs.
Does your client contribute to an

Today's Technology for Tomorrow's Firm

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GAIL PERRY, CPA

Editor-in-Chief
gail.perry@cpapracticeadvisor.com
@gperrycpa

IRA or a 401(k) or other tax-deferred
retirement account? Here's an
opportunity to discuss investment
alternatives, borrowing, loan
options, withdrawal requirements,
and retirement planning in general.
Many clients don't even mention the
company retirement plan to the
tax accountant, thinking it's not
relevant 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 client meeting about
family members, how COVID-19
has impacted job security, and
expectations for the future. You
might find that these questions
lead to additional opportunities to
provide worthwhile services to your
clients. ■
- Gail Perry, Editor-in-Chief

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march2021

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