Personal Financial Planning
Basics and the Tax Return
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[venue]
[contact information]
Introduction
About the PFP Section & PFS Credential
• The AICPA PFP Section provides information,
resources, advocacy and guidance for CPAs who
specialize in providing estate, tax, retirement, risk
management and investment planning advice to
individuals and their closely held entities
• The CPA/Personal Financial Specialist (PFS)
credential distinguishes CPAs as subject-matter
experts who have demonstrated their financial
planning knowledge through experience, education
and testing
Personal Financial Planning Section
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Why use tax returns to develop personal
financial planning
Overall picture of clients’ financial situation
Uncover opportunities for planning that client has
overlooked
Details of cash flow/income situation
Use in conjunction with client balance sheet
Personal Financial Planning Section
Dependents
Children
Elderly parents
Personal Financial Planning Section
Income – Understand the Sources
Deferral opportunities
Retirement Plans/IRA’s
Roth Conversions
Personal Financial Planning Section
Interest – Schedule B
Taxable vs. Tax-Exempt
Bank Accounts – FDIC limits
Cash levels – emergency fund
Personal Financial Planning Section
Dividends – Schedule B
Source
Alternative Investments?
Titling and Custody?
Stock Concentration
Personal Financial Planning Section
Schedule C
Succession planning
Income Shifting
Business Structure
Home Office
Personal Financial Planning Section
Schedule D
Carryovers
Trading activity
Loss harvesting
Investment Strategy
Personal Financial Planning Section
Retirement Plans/Distributions
Required Minimum Distributions being
taken?
Net Unrealized Appreciation (NUA) from
401(k)
Beneficiary elections
Source of Withdrawals
Has a Roth Conversion been considered?
Withdrawal Rate
Personal Financial Planning Section
Schedule E – Real Estate
Risk management
Multiple owners
Estate planning
Passive activity loss rules
Personal Financial Planning Section
Schedule E – Partnerships, S-Corps
Valuation issues
IRS attack on Family Entities
Investment partnerships
Negative Basis Issues
Personal Financial Planning Section
Schedule E - Trusts
Trust Management
Investment Strategy
Trustee Adequacy
Trust Purpose
Distributions
Personal Financial Planning Section
Simple, SEP, IRA
Investment choice
Deferral Opportunities
Qualified plan/defined benefit plan
Personal Financial Planning Section
Schedule A - Medical Expenses
Long Term Care Insurance
Health Insurance
Medicare Rules
Impact of Obama Health Care Act
Health Savings Accounts
Personal Financial Planning Section
Schedule A - State Taxes
Residency rules
Multiple state residency
Potential tax liability in other states
Timing of payments and AMT
Personal Financial Planning Section
Schedule A - Interest Expense
Limitations
Carryover of Inv. Interest Exp
Margin Interest
Personal Financial Planning Section
Schedule A - Charitable
Appreciated securities
Timing
IRA distribution – direct to charity
Carryovers
Documentation Rules
Personal Financial Planning Section
Schedule A - Miscellaneous
Investment fees
Limitation
Planning opportunities
Personal Financial Planning Section
Partnership Tax Returns
Partnership agreement
Valuation
Employee benefit plans
Profit Allocation
Multi-state operations
Personal Financial Planning Section
Corporate Tax Returns
Compensation of officers
Shareholder agreement
Multi-state operations
S-Corp vs. C Corp
Personal Financial Planning Section
Gift Tax Returns
Number of donees
Split gifts
529 plans – special rules
Valuation discounts
Basis and date
Personal Financial Planning Section
Alternative Minimum Tax
Impact on overall planning
Current/proposed changes
Stock options
• Planning opportunities for ISO exercise
AMT Credit Carryover – potential loss of credit
Personal Financial Planning Section
2011 Changes
Impact on your clients’ situations
Potential future impact of tax rate increases
Potential expiration of Bush tax cuts - status
Estate tax status
Personal Financial Planning Section
Summary
We can learn a lot about someone through their tax
return. Many tax and investment planning
opportunities can be uncovered with a thorough
review of your tax return.
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Q&A
[insert contact information here]
Special thanks to Lyle Benson, CPA/PFS, CFP® and Glenn Freed, CPA/PFS for
contributing content.