Financial Advisors and Tax Planning

A financial services professional with a career spanning two decades, Cubby Bice is currently pursuing a PhD in finance at Liberty University. Since 2004, Cubby Bice has served as the president of Bice Wealth Management, a Mooresville, North Carolina-based full-service financial consulting firm which offers an array of financial services, including retirement planning and tax planning.

Some financial advisors have the educational background and the tax-related knowledge required to help clients prepare taxes, provide tax advice, and provide tax planning. That said, it’s important to know the distinction between tax preparation and tax planning and consulting. Tax preparation involves creating a tax report (a document which primarily entails income and expenses and helps determine tax liability) on behalf of a client. Tax preparation only ensures that a client fulfills their tax obligations and may serve no further benefit.

Tax planning, on the other hand, requires scrutiny of a client’s (individual or business) goals and how they can leverage existing tax laws and benefits to minimize tax liabilities in both in the current year and long term. For clients who are not well versed in tax issues, financial advisors who offer tax planning and consulting services can provide answers to complex questions. For example, a client may want to know if there’s an ongoing tax benefit they are not utilizing and how they can access those benefits (if available). Tax benefits, also called tax deductions, reduce tax liabilities. Tax planning can also help clients optimize the timing of income (and losses) and leverage this to reduce their tax burden.

Financial advisors who provide tax planning and consulting services can also serve clients in legal capacities. For example, they can help clients file requests for abatement of tax penalties.