By Mark Milbrod, CLU, CLTC

As we approach this year’s tax deadline (everyone’s favorite day), our clients have been preparing their tax documents and will be filing their 2021 Tax Returns.  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?
  • HSA Contributions – For clients making HSA contributions, it is possible to use those pre-tax contributions to pay long term care premiums. The maximums are subject to specific rules based on age, but it can be used nonetheless.
  • 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 and assist them in the planning process.

In addition, it’s a great way to open discussions with CPA’s and tax preparers (after tax season of course), to discuss how you may be able to help their clients with a number of those solutions through the various products and services that you offer.  Once they know what to look out for, they can become a great source of referrals for you.

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.