Did your clients wait until this week to file their taxes?
If so, they are not alone. According to IRS data, nearly 13% of taxpayers wait until the final week of tax season to file, and the more taxpayers earn, the more likely they are to be a part of that 13%.
While clients owing taxes might have financial incentives to wait, the majority are simply busy and do not carve out the time to prepare taxes until the deadline is upon them. Considering taxpayers filing a Form 1040 spend an average of 16 hours on their returns, it’s not a big surprise so many taxpayers wait until the deadline.
The time spent determining the amount of taxes owed is likely significantly more than the average American spends planning their financial future. Taxes have a hard-deadline requiring dedicated effort to prepare and file tax returns each year, which isn’t the case for financial planning. For your clients, you are the encouraging force to ensure they take the time to prepare for their financial future and make necessary adjustments as situations change each year.
The end of tax season is a great time to ask your clients to dedicate time towards planning for their financial future, especially those who have not set aside time in the past year. Setup a meeting to have a planning discussion and ask them to bring in a copy of their tax return and an updated net worth statement.
The Analysis of a Tax Return for Personal Financial Planning checklist from AICPA® is a helpful resource to use as part of a planning review.
Remind them of the time spent preparing, organizing and filing their taxes. Rather than that effort being used purely to report the amount of taxes they owe, their tax filing can be put to good use towards planning their financial future, offering much greater returns.