Client Alert
Divorce and Taxes
“Timalyn, Alyssa and I filed for divorce, and we will finalize everything before Thanksgiving. Does this change things for our taxes?” “No! Can we wait until January 1?” were my initial thoughts. But then I realized that if this news blindsided me, the seemingly happy couple was probably also scrambling for answers. They were looking to me to be calm during an upcoming storm. To give you some context, I had helped this family lower their back taxes by $16,000 and get a payment plan that worked well with their cash flow. Then, by implementing a few strategies they had just saved an extra $20,000 on their last tax return. We were planning on saving them even more money in upcoming years. Then, that is when it happened. Divorce. I never saw this happening, so I never prepared for it. But if it happened to me, it will happen to you. Clients divorce. Some of the things we are going over today may seem obvious to you. But remember what is obvious to us as tax experts is not obvious to our clients, especially if they are going through a life-changing event such as divorce. Here are four things you need to inform your client about when it comes to their divorce and taxes...
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How Things Go Criminal
If you were to ask most taxpayers what they worry about when it comes to their tax returns, they might say an unexpectedly high tax liability or even a late penalty. Next to none will worry they are at risk for criminal prosecution. There is a sound reason for this. In the fiscal year ending September 30, 2021, taxpayers filed over 261,000,000 tax returns. During that same period, IRS Criminal Investigation (CI) initiated only 2,581 investigations—a paltry 0.00098% of all tax returns filed. While CI entanglements are not a common experience, there are still lessons to be learned from looking at how things can go awry. So what types of scenarios have resulted in criminal investigations by the IRS, and what can this teach the everyday taxpayer? First of all, working with an expert, such as a Certified Tax Planner, will help you better understand what is permissible by the IRS and reassure you that your returns are fraud-free. For a few tips on what not to do, read the cases below and review our key takeaways for each one.
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How to Deal with Huge Tax Debt
The only thing scarier than owing Uncle Sam a lot in taxes is being unable to pay the bill. Luckily, the Internal Revenue Service has ways for you to whittle what you owe. Just make sure which method works for you, depending on such factors as the size of your tax debt and what you can afford to pay and when. Don’t panic. Here’s how individual taxpayers can proceed – and what to watch out for.
Client Retention Strategies for Accountants: Building Long-Term Relationships
Client acquisition is crucial for business growth in the fast-paced accounting world. However, retaining existing clients is equally important, if not more so. Servicing long-term client relationships is a testament to your firm’s reliability and is critical to sustained success. My first client is still with me, now more than seven years. Our relationship has grown and changed over time but has also strengthened.
Loyalty and commitment are two of my core values. I’m always looking to provide value to my prospects and clients to attract and retain them long-term. However, some clients do not fit those values, and I have decided to forgo working with them.
I believe that attracting and retaining the right clients starts with your mission, vision, and core values. However, it is also essential to have effective client retention strategies to ensure clients remain loyal and satisfied for the long haul.
Health Savings Accounts vs Flexible Spending Accounts
With the rising cost of healthcare, our clients are looking to save money where they can, especially if they can save money on their healthcare costs and taxes at the same time. As their trusted advisor, you can offer them a basic understanding of what savings tools are available to your clients. Some of the tools available will come in handy if there is a minor unexpected tax bill this spring.
That is why today we’re going to look at the triple tax advantaged health savings account (HSA) and the health flexible spending account (FSA). We’ll look at what they are, who is eligible to open one, and how they can save your clients money each year.