In the “old days,” you went to the general store for your dry goods, the blacksmith for your horseshoes or tool repair and likely had your own cow and chickens for milk and eggs. Fast forward, you went to a lawyer to get a will, an insurance rep to get a policy and an accountant to get your taxes done. There was no internet, so information was something you had to gather and organize yourself. You would talk to a few co-workers, a family member, a mentor and then take actions based on the limited intel. Back then, you would sit with a financial advisor, and if they were a big deal they might have a stock ticker pumping out tape right there in their office. WOW!
They didn’t do their own taxes. They used a CPA and recommended that you do the same. When you asked a question about how the trades they recommended would affect your tax bill they said, “Don’t let the tax tail wag the dog!”
Perhaps before information was so plentiful and free flowing into everyone’s pocket through the supercomputer we all carry around and call a cell phone, that answer was in some ways the best answer for the situation. Or perhaps it was a cop-out from someone who didn’t want you to know that they should know the answer to your tax-based query, and even be able to craft advice with those considerations in the mix, but didn’t.
Fast forward to now. You can have a three-way face-to-face meeting, all in your own homes and offices, on those same pocket-sized super computers mentioned before. You can ask, “If I sell this stock I’ll make a tiny profit, but what will Uncle Sam take back for his share of the win?”, directly to the CPA, while the financial advisor listens. These days, many tax people now also have financial licenses, so they can provide combined advice. Even more financial advisors own tax offices, employ CPAs or EAs, and whether done face to face or over cloud technology, provide tax planning and financial planning under one roof.
If you are looking to invest, are seeking advice from an insurance agent or a financial planner, or looking to get an annuity in the Lake Forest, CA area and you ask the question, “How will this affect my taxes?” and the response is “Don’t let the tax tail wag the dog!” or any other non-answer for that matter, stand up and don’t walk out of their office, RUN! Go home and find a new one, ASAP.
Schedule a consultation with our Lake Forest, CA financial planning and tax planning office, Signature America Wealth Management, where a Certified Financial Planner & Fiduciary can help optimize your portfolio for both growth and tax savings.