By Mark Milbrod, CLU, CLTC

Over the next few weeks, our clients will start receiving their annual tax documents in preparation for the filing of their 2020 Tax Returns.  Although many people have had a difficult year, it is still important that planning gets done.  Taxes still need to be paid and as American as apple pie, our favorite Uncle has his hand out for his piece of it.

Tax season is upon us and with it comes our best prospecting tool, THE TAX RETURN.

There are countless sales opportunities that arise out of this time of year.   The clients themselves will be focused on the financial aspect of their lives. Whether its retirement plan contributions, annual gifts, charitable contributions, etc., it will be fresh on their minds.

As stated above, a tax return is probably our best sales prospecting tool.   As financial professionals, where else can you get a blueprint that leads you directly to all facets of someone’s finances?

Here are some examples of line items on a standard 1040 Tax Form that can lead you to where potential sales opportunities exist:

  • Dependents– knowing how many dependents raises the question to whether there is enough life insurance in force to protect those family members who are reliant on someone. For younger dependents, the college planning conversation usually starts.
  • Taxable Interest– See where this income is coming from.  There can be a more tax efficient way to invest funds.
  • Business Income– knowing where business income comes from can start the conversation for business succession planning, key employee coverage’s, etc.
  • Qualified Plan Contributions– this opens up the retirement planning conversation.  Are they maxed out in qualified contributions? What about retirement goals? Perhaps some supplemental non-qualified vehicles could be appropriate.
  • Partnership/S-Corp Income– knowing if there are partnerships and K-1 Income, perhaps buy-sell planning can be in order.
  • Social Security Benefits– are they receiving SS benefits?  Do they need it?  For a couple, one income would be lost upon a first death. Perhaps a more efficient use of those funds can be the answer. Maybe they need life insurance to make up for the drop in income?
  • Capital Gains– where are their assets? Is there a better use of those assets? Perhaps annuities would be suitable?
  • Medical Expenses– knowing what their medical expenses are can open up the Long Term care conversation.  Do they have any or what assets would they tap into if they had an LTC event? Perhaps repurposing assets for the sake of LTC benefits would be appropriate?
  • Interest Paid– mortgage interest paid can tell you more about their home.  For clients older than age 62, a Reverse Mortgage can be an option
  • Gifts to Charity– if someone is charitably inclined, you can discuss the leverage of life insurance for legacy gifts.

As you can see, there are a number of sales opportunities that exist by utilizing the 1040 Tax Form.  The examples above are just the tip of the iceberg.  By using this approach, you can start conversations with your prospective and current clients.

In addition, before the CPA’s get too deep into their season, this is also a great opportunity to reach out to those relationships and discuss with them some key items to watch out for when they are preparing returns for their clients.

Once they know what to look out for, they can become a great source of referrals for you.  Perhaps creating a “cheat sheet” as a leave behind for the CPA would be a great tool that they can keep handy.  This “cheat sheet” will identify those line items and how they may lead to creative solutions for their clients.  I have been using this approach for many years to huge success.

At ASG, we have tools designed to help you with this approach to marketing. Contact us today so we can guide you through the process and navigate you through this blueprint provided by our favorite uncle. 


Mark Milbrod

About Mark Milbrod

Mark’s Barks Blog is authored by Mark Milbrod. Mark brings over 30 years of experience to his insightful commentary on the insurance industry. Through his Blog posts, you will learn about new sales trends, be educated on selling techniques and overall, think differently about your role as an insurance professional.

One Response to “Tax Returns As A Blueprint”

  1. Mark Ehrenreich

    Mark, excellent article. If I may add another line item, HSA Contribution. You can use money from your HSA tax-free to pay your Long Term Care insurance premiums, up to the age-based maximum.


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