june2021 - 10

FROM THE TRENCHES
■ See how each strategy is calculated
and edit every single input
■ Analyze thousands of strategy
combinations in seconds
■ Automatically calculate the effect
of all strategies against all legal
entities
■ Export & edit proposals and plans
to review with the click of a button
Moving your tax planning practice
from compliance to advisory
is good for your clients and good
for your firm. With the old way of
compliance, you prepare returns for
compliance, implement one strategy,
not a complete plan, help clients for
free, look at last year only, you don't
plan during tax season, partners/
owners are the only planners at the
firm, and you are " eyeballing " savings
rather than calculating to the dollar.
In the new way of advisory tax planning,
you reduce taxes with proactive
planning, calculate thousands of
strategy combinations, review multientity
savings and planning, project
savings and plan for multi-year, you
get the client to pay for the planning,
implementation, and quarterlies, and
you use automation to enable staff/
managers to sell and fulfill plans
without the owner.
ANOTHER AREA OF
OPPORTUNITY AND NEED
- CRYPTOCURRENCY
Are you confident you filled out those
8949's correctly this year? Do your
clients have cryptocurrency trades
with no broker, no statements, and
no basis information? Did any of your
clients make you nervous about the
cryptocurrency question?
Practitioners are reporting many of
their high-value clients are investing in
cryptocurrencies. Perhaps you've put
off dealing with the crypto for your
client's return because your client can't
find documentation associated with
the trades, and you decided to file an
extension. You know that the information
exists, and the IRS is aggressively
targeting cryptocurrencies. In short,
you and your client need help now
to avoid unpleasant surprises later.
Consider using the Crypto Compliance
Checklist (https://tinyurl.com/
p3fx936n), available free from Ledgible
and developed with professionals from
my K2 team.
It would be best if you had tax
tools that can gather transaction data
from most major cryptocurrencies and
exchanges, that has the data needed
to calculate the basis and fair value
of transactions in many cryptocurrencies,
and generates reports for
supported currencies that can be
used for gain/loss reporting and an
inventory of open positions. Based on
my research, I've concluded you can't
handle cryptocurrency on a tax return
without wasting a lot of time unless
you have a tool.
While there may be more options,
Ledgible by Verady and LukkaTax are
two trustworthy solutions. Ledgible
has automated interfaces that support
the major blockchains, exchanges,
wallets and accounting platforms, and
more added interfaces every month.
If you only take away a second thing
from this column, know that a product
like Ledgible is mandatory to handle
cryptocurrency tax clients. We expect
cryptocurrency to be an ongoing advisory
need of clients. Recent reports
(polling by Harris Polls and Mizuho
Securities) suggest as many 10% of
all Americans invested some of their
relief funds in cryptocurrency during
the past two years.
SO, WHAT CAN WE DO
TODAY?
While we could have produced
another whole article on estate planning
tools and the complexities of
trust accounting, I wanted to get you
thinking about the " whole-of-client "
approach to advisory services. All
advisory services should start with
what the client wants, and you need
to address the personal needs at the
same time as the business needs. It
doesn't matter whether someone is
self-employed or works for a Fortune
500 company; all individuals have
personal needs and are trading their
lives for income.
In a book by Peter Vessenes, the
author noted that " Capitalism is an
exchange of goods or services wherein
all parties in the trade believe that the
value received is equal to or greater
than the value offered. " He goes on
to say, " At the time of being hired,
you are bartering your work efforts in
exchange for a compensation package
and other 'intangibles.' People usually
regard what the company offers to
them in exchange for service in the
tangibles, that is, wages, bonuses,
health care, stock options, and other
perks. Some include career growth
opportunities, continuing education,
and retirement programs. Though
all of these are important parts of
the trade, studies of employees have
shown that these tangibles never
appear at the top of surveys that question
job satisfaction (value received
in trade by the employee). Appearing
ahead of the tangibles are comments
such as 'being appreciated,' 'a sense
of belonging,' 'acknowledged for my
contributions,' 'the great corporate
culture, a sense of security.' " While I
don't know the original origin of the
acronym, I'm reminded of an old Zig
Ziglar saying that people listen to
WIIFM - What's In It For Me?
Most CPAs I know serve their
clients well. Do you want to have the
client's best interest in mind? If so,
you need to apply advisory thinking
to your practice, and pick technology
tools to support those efforts. Use the
whole-of-client advisory approach to
build a practice and relationships that
can last for decades and generations.
And always look for ways to create the
very best client experience! ■
10 JUNE 2021 ■ www.CPAPracticeAdvisor.com
https://www.tinyurl.com/p3fx936n https://www.tinyurl.com/p3fx936n http://www.CPAPracticeAdvisor.com
june2021

Table of Contents for the Digital Edition of june2021
