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Inside Baseball - The Strategy Menu π±
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[Welcome to our new subscribers from the most recent webinar on the One Big Beautiful Bill - remember that any time you want to unsubscribe, there is a link at the bottom of every email. But this email brings practical tax and accounting alpha, so we hope you stay and enjoy.] I don't consider myself a fast learner - if I need to learn something I have to obsess over it until it makes sense. So when I changed career paths from being an audit partner to learning tax, I had my work cut out. It took a year of working effectively two roles and years more of reading and obsessing over technical tax items until I felt half-way competent. When it all started to click is when I grouped clients and tax strategies into buckets. While it doesn't always mean every client fits in a bucket, or strategies are restrictive - it allowed me to start somewhere. Today, I'm sharing the most basic component of how we think about clients and tax strategy - the Client x Strategy Matrixβ’ βοΈ Reminder that I offer paid consulting calls for 30 minutes or an hour. I've done 15 or so this year already and have had great results. Happy to chat anything Operating Agreements, Tax, CPA Firm management, Accounting, etc. Reply to email and I can send you the link. βοΈ This entire concept is based on the Phases of Life that impact tax planning decisions. I'd plotted them out and shared previously but here it is again:
The premise is that as a taxpayer matures through life, his tax strategies evolve with him. And while that's never linear, it is (on average) directional. For example, a mature employee client would be looking at deferral strategies more than an early career client because of the difference in tax rate. The mature career employee would be paying taxes at higher rates than his Lifetime Effective Tax Rate (h/t Mitchell Baldridge). Conversely, the early career client would be looking at ways to accelerate income and defer expenses into higher tax rate years. The other axis of the matrix is then the types of strategies we have in our toolkit. Again, these are broad generalizations but do help to get the mind to thinking in groups: Structure, Elections, and Timing. Some examples of each -
I go further into these in the full Life Plan of Tax whitepaper [shameless plug to check out the "Store" tab to access it - it's paywalled]. When plotted out, the matrix looks something like this: Each practitioner can likely fill out their buckets with their own niche specialties - we have and it accelerates the ability to advise and see opportunities. In the coming weeks, we'll use this as a reference tool to dig into each matrix section and go deeper into how to choose the right strategy. π«‘ π₯ Hottest Finance Posts This Week π₯β
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