How advisors can become forward-thinking on taxes

investmentnews.com:

For some advisors, tax season is well behind them. For others, the conversation about has just begun.

Certainly, that’s the case for Catherine Valega, founder of Green Bee Advisory, who recently became an enrolled agent, a credential awarded by the IRS that allows her to be a more tax-smart advisor and do tax prep not only for her firm but other clients as well.

“It’s crazy the things that I have been learning,” she says.

Even though the April 15 deadline to file income tax returns has passed, Valega plans to go back to her clients, review their taxes, and strategize tax prep for the years ahead.

“No one understands anything about taxes,” she admits. “I became an enrolled agent to learn more and learn how to help my clients. I’m probably the only one who’s going to be talking about taxes just a little bit more and be proactive moving forward.”

Valega noted that what she’s been learning in her tax prep course will also help her clients. “Can we increase retirement plan contributions? Can we make Roth contributions? What types of tax-efficient portfolio management should we start for the year?”

Valega said the main reasons she decided to focus on tax planning strategies, and why other advisors should be following her lead, are because most people don’t understand how the tax system works and clients tend to care more about saving on taxes than maximizing their returns.

“They certainly don’t understand how to use it to the best of their advantage,” she said. “Because it’s convoluted and scary, and no one learns this stuff, so I’m going to take all of my knowledge back to my client base, and really start doing tax-forward thinking.

“No one wants to pay $1 more than they should in taxes, nor should they, but no one really