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Dec 14, 201610:27 PMFinancial Perspectives

with Michael Dubis, CFP

Year-end tax ideas — be careful about speculating on Trump’s policies

(page 1 of 2)

It’s time to start making year-end tax plans. There is a lot of opinion and speculation on President-elect Trump’s policies and I think some investors are making decisions without knowing for sure what the actual policies will be. We’re a long ways away from actual law changes.

I think it is speculative to assume Trump will pass all of his proposed tax law changes. Further, if you are trying to manage year-end, don’t just rely on us “financial planners” for pointed tax advice. While we do have training in this area and we’re grateful we can be of service this way, it doesn’t qualify any of us as a dedicated tax-advisor unless we’re certified and most importantly experienced in specific tax advice. Experience requires a lot of attention and time to this very granular discipline. Normally that’s best found with a CPA (certified public accountant) and/or EA (enrolled agent). Given the potential complexities between this year and next year, working with a qualified tax advisor is important.

Here are some practical reasons why I personally don’t/won’t serve as the dedicated tax advisor to my clients, and why I think it’s very important they have their own tax advisor separately — but coordinated — with their financial planning advice:

  1. A firm like mine simply wouldn’t have the infrastructure in place. Dedicated tax advice is both intellectually and technologically capital intensive. Similarly, a dedicated tax firm usually lacks the infrastructure for what people like myself do, which is why most qualified tax advisors don’t attempt to be both a tax advisor and financial planner; they’d be spread way too thin.
  2. Tax law changes over the past decade have made tax preparation and analysis exponentially more complex. Tax detail and advice requires full-time concentration. Further, the professional standard of care a tax attorney, CPA, or EA offers is specific to tax advice and is much higher than that of a certified financial planer (CFP).
  3. Only a qualified tax advisor, like a CPA or tax attorney, can properly represent you in an IRS tax audit. Having an existing relationship with a CPA or tax attorney would be invaluable if an audit occurs.
  4. Further, if you work with a tax attorney, you also get client-attorney privilege of confidentiality, which a CFP like myself, or even a CPA, cannot provide. This is a critical benefit if you might face any legal questions in your tax advice. Your financial advisor and even CPA should never be giving you legal advice, especially sensitive confidential advice.
  5. Finally, and something that’s a core house philosophy of mine: You simply should have multiple, independent, professional “voices” working as a team to help you with your wealth. Ideally, I think separate, independent (i.e., not conflicted) firms should provide these services.


Dec 15, 2016 03:18 pm
 Posted by  Anonymous

Basically it was easy- when Trump got elected I put my retirement on hold and we decided against any large expenditures until we saw what health care costs and social security look like. As the bulk of the population stats look at details of proposals we may see similar shifts in the market as a lot of people in the population are affected by the health care and social security changes and the tax changes are not just cuts but reforms- cuts will be accompanied by major changes in personal deductions. As this sinks in it will slow the economy a bit. Expect also some major changes as the Affordable Care Act goes down in the self-employment area- who will be available there and who will be rejoining the workforce working for someone else. A lot of changes and until people see the actual details- we'll not know the effects.

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About This Blog

It is an understatement to say the world has experienced a radical shift in capital markets. There are more layers of information and opinions on the direction of the world than we've seen in decades. The internet and the media do not always make it easier, but Michael Dubis' contribution through IB blogs will help you sift through the noise and give you some perspective. You can find his company online.

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