Scope of Services
In a financial planning environment, your role in developing tax planning strategies is broadened by the need to coordinate your analyses and recommendations with the goals, analyses, and strategies of other financial areas. Areas of personal financial planning that involve some aspect of tax planning include:
Your role in gathering data is to develop a core information base. This includes not only financial data, such as recent income tax returns, current brokerage statements, trust documents, employee benefit documents, but also detailed information about your client's established financial planning goals. If your income tax planning services are a component of a broader or comprehensive personal financial planning engagement, you may be generating those goals concurrently.
Developing Appropriate Tax Planning Strategies
Your role in developing appropriate tax planning strategies can be summarized as follows:
Prepare an initial income tax projection as a benchmark against which to evaluate alternative tax and financial planning strategies
Develop alternative strategies to meet your client's income tax and other financial planning goals
Revise your income tax projections to reflect the impact of the alternative financial planning strategies on income tax liability and the impact of tax planning strategies on other financial planning goals
Implementing and Monitoring
If engaged to do so, you may also have a role in the implementation of your various recommendations, such as gifting of income producing assets or establishing a retirement plan account. You may also be engaged to monitor both changes in your client's family, health, business, and other life situations, as well as changes in federal and state tax laws to assess the continuing validity of your income tax planning strategies.