When seeking a financial advisor, you may be looking for any number of qualities—personalized service, responsiveness, and a disciplined investment approach, just to name a few. But there’s an additional factor that is too often overlooked in the search for a financial advisor: integration with a CPA.

Integrating the roles of your tax advisor and financial advisor can significantly enhance the effectiveness of your financial planning. This collaboration allows tax planning to shift from a reactive approach—typically reviewing and reporting past events—to a more proactive strategy that aligns with your overall financial goals. By coordinating these two critical areas, investment decisions can be made with a comprehensive understanding of their tax implications, leading to better long-term outcomes.

When does it benefit you to have your CPA and financial advisor work together?

Year-end decisions: Consider the decision to realize capital gains for the purpose of portfolio rebalancing at the end of the year. Working together, your CPA and financial advisor may find opportunities to defer these capital gains with minimal impact on your investment strategy, allowing you to potentially reduce your overall tax burden.

Year-round strategies: The benefits of ongoing coordination extend beyond year-end decisions. Even routine financial choices become more manageable when your tax and investment strategies are aligned. For instance, deciding whether to contribute to pre-tax retirement accounts or post-tax Roth accounts can be influenced by a comprehensive tax strategy. This decision is not just about current tax savings or benefits, but also about optimizing your tax situation over the long term.

More critically, a coordinated approach is invaluable when developing a withdrawal strategy for retirement. Effective planning in this area requires careful consideration of how withdrawals will impact your tax situation, Social Security benefits, and overall financial health. Without integrated planning, you risk creating unintended tax consequences, such as possible increased taxability of Social Security benefits or higher Medicare premium surcharges based on your income.

Additionally, the structure of your taxable account portfolio can be optimized through tax integration. By incorporating tax considerations into portfolio management, you can make informed decisions about the selection of money market funds, the structure of bond portfolios, and the timing of trades. This approach helps ensure that your investment decisions align with your tax strategy, allowing for more effective cash management and rebalancing.

Investment Topics Your Tax and Financial Advisors Can Optimize Together

• Managing capital gains
• Structuring taxable account portfolios
• Timing trades
• Choosing pre- or post-tax retirement savings vehicles
• Retirement withdrawal strategies
• Managing Social Security and Medicare

A unified strategy to manage investment returns and tax efficiency

Ultimately, having a coordinated team working on your behalf provides a holistic approach to financial planning. By leveraging CCM’s in-house team of CPAs, you benefit from a seamless integration of investment and tax strategies. This coordination not only enhances the efficiency of your financial planning, but also ensures that critical aspects are addressed with a unified strategy. Our goal is to deliver comprehensive, strategic financial solutions that align with your long-term objectives, maximizing both your investment returns and tax efficiency.