The new 3.8% surtax on income, known as the net investment income tax (NIIT), is going sneak up on a lot of clients when it shows up for the first time ever on 2013 tax returns. You are about to run out of time to check in with clients to see if they can avert this new tax on net investment income and a bad tax surprise. That's not a lot of time, especially with the holiday this week, but it's enough time to make a phone call, ask a few questions, and possibly save a few clients a few thousand dollars.
Robert Keebler gave a webinar
about the NIIT yesterday and it received a 4.7 star-rating, the kind of rave reviews from advisors that have become customary of Bob Keebler webinars. If you listen to that webinar replay, you'll probably have a very good idea of which of your clients might be "NIIT-picked" and you can give them a call and maybe save them some money.
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Only the most dedicated professionals would attend a session about the NIIT on a Friday at 4 ET less than a week before Christmas, but attendees were amply rewarded. Bob didn’t drill down into taxation the way he would when speaking to CPAs. He did something better. Keebler tailored his lesson to financial advisors.
Because the A4A audience is comprised of financial advisors and not tax-preparers, your entry point and role in advising clients on NIIT is different from a CPA’s, and Keebler’s remarks addressed what financial advisors need to know to advise clients on NIIT. Classic Keebler!
Keebler says the tax practice at accounting firms these days does not provide revenue year-round. So accounting firms are more interested in advising businesses and other services more lucrative than personal taxation. Your local CPA is typically less focused on tax practice, especially outside of the January 1 to April 15 filing season.
However, when this surtax was adopted by Congress, it was expected to raise tax revenue of $20.5 billion in 2013 and projected to generate about that amount annually for 10 years. Keebler expects it to affect about 5% of taxpayers, but a much larger number of advisor clients.
The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above statutory thresholds
Financial advisors can play a meaningful role in educating clients about this tax because you know about the investment side of the client’s life. So please view this webinar and get on the phone with some of your clients who might subject to the NIIT. While it is kind of late in the year to be doing this, they'll appreciate the call and that you were trying to save them money on taxes.
Here are the reviews from attendees of Bob Keebler's session on the NIIT:
· Excellent but a lot to digest and he went a little fast over some complex issues...
· Excellent update and presentation.
· Mr. Keebler does a beautiful job of explaining a complex topic.
· Well worth the time to identify problem areas that could require additional research.
· Bob's presentation was excellent as always. He takes the IRC and makes it simple to understand and explain to clients. Thanks
· Very precise and helpful.
· Very excellent
· Superb discussion of combining tax planning with financial planning.
· If a planner has a big case, is Bob available to provide inpuit - does he do hourly? Rate? What information would be needed? Does he have a questionnaire?
· As Andy put it so well, it was another blockbuster presentation by Bob Keebler and the focus on the 3.8% surtax (without introducing a lot of other tangential topics) was effective because it allowed everyone to try and focus on just that one issue. This is conducive to mastering the single topic of the 3.8% surtax and the use of examples was illustrative. I would suggest that similar focus be made on future Keebler webinars on a single aspect of the new law as was done today. Thank you.
· Very Timely. Thank you
· Bob Keebler is always very helpful w/relevant content and an easy to follow presentation.
· Wow. This is just what I needed to help wrap the year. My focus since December 7th has been on Atlas program 33, an oil and gas partnership that offers a 94% writeoff for 2013. Thanks very much for aiding my understanding of a problem area begging for a solution right now.
· Bob, Excellent as always. The examples were beneificial and thanks so much for the clarification about what's included and not included. Big help!!!