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Wealth Management

Most individuals who want to build wealth make the mistake of putting financial advisors alone in charge of their financial plans. Why is that a mistake? It isn’t the financial advisor’s advice that’s the problem, it’s putting them in charge. The financial planner you work with should not be the person in charge. Think of them like the first mate of your crew. They have plenty of advice to offer, but you are the captain of the ship. You control the boat, not your first mate.

Relying on advice from our dependable advisors at Wealth Management Accounting (WMA) allows you to retain control. A captain of a cruise ship needs to rely on his crew, and WMA’s team of experts works together to provide a similar cohesive response to your needs. Just as a captain depends on his crew, you can rely on each member of the WMA team to be proactive in their departments. WMA CPAs, the bookkeeping department, attorneys, and financial advisors all work together to identify problems while agreeing on possible solutions.

A successful wealth management plan revolves around your and your family’s goals. Taking ownership of your wealth management is the best way to build massive wealth. Our team can offer recommendations and relevant professional advice. Still, you should understand and direct your investments, tax plan, and wealth-building management choices. Our team’s job is to provide the “checks and balances” necessary to offer the most accurate choices when action is required.

Understanding Your Tax Plan

How can Taxes Build Wealth?

A tax plan will lower your tax liability, reducing the amount you pay. Effectively, you are creating additional dollars to invest in any manner you desire. Turning the tax code into a guide for building wealth is the opposite of the typical approach to tax preparation. Typical tax preparation has nothing to do with a tax plan or diversification. Its intent is not to help grow your wealth but rather to incentivize strong decision-making. Tom Wheelwright, CPA and author of “Tax-Free Wealth,” claims that “[t]he tax law is a tool the government uses to shape the economy” (Wheelwright, 2018). The standard practices don’t intend to be predatory or incompetent; they are just not interested in growing your wealth or using tax law to your advantage. WMA’s sole interest is what is the best method to increase your wealth.

We expect our clients to lower the amount of tax they pay by 50 percent or more. Of course, that is not a guarantee, but it has proven to be the case for most of our clients using the WMA system.

Actual tax planning supplemented by the proper tax diversification tool requires a team that consists of:

  1. An accounting firm supported by a CPA with an Enrolled Agent (EA) with in-depth experience and tax law knowledge to enhance the Wealth Management Accounting team.
  2. A top-notch bookkeeping department. Proper record-keeping is a required part of an effective tax plan. Far beyond making it easier to prepare tax returns the following year, it is crucial that you know your numbers. You must recognize your expenses and lifestyle to design a plan accommodating those accordingly; we cannot stress this enough. The bookkeeping department will make this possible. Proper bookkeeping is essential for an excellent year-round tax plan to be effective.
  3. A seasoned financial advisor. The advantage of tax-diverse, tax-efficient structures and entities will create tax optimization for your investments. These tax planning techniques lead our clients to significant savings in their tax bills. However, it is not enough that these savings have been achieved. A financial advisor will then utilize savings to continue creating wealth beyond initial returns from the increased tax efficiency.
  4. The ProDocs Document Preparation Firm ensures that the ProDocs Tax Attorney has reviewed the necessary operating documents and that they are readily available. Any relevant legal entities must consider tax diversity, efficiency, and optimization within their structure and documentation.

Our tax planning and diversification follow an honest approach by conforming to the taxation law framework provisions. This planning uses advantages in law typically not used for the benefit of most taxpayers. We are not developing new techniques in tax preparation but instead making available tools otherwise not offered.

What is Tax Efficiency?

Often, clients are unfamiliar with the term “tax optimization” or what it means to be enhanced by “tax diversity tools.” Tax compliance or tax preparation differs significantly from tax optimization and tax efficiency. How and where do clients start understanding or applying these techniques to create tax efficiency? Just thinking about taxes makes most people nervous, which is where the WMA team can help.

Tax efficiency has one objective: to increase wealth. This increased wealth is only achieved through an optimized tax plan. This plan must include the current reality of your finances and income and weigh that against your goals for your wealth to facilitate efficiency in taxes. Considering these factors, WMA will create and design a unique tax plan for you that includes diversifying your tax exposure in some capacity. The process extends further as we use these savings to enhance your wealth and cash flow.

Business owners and most investors focus on growth. This is natural; you are very passionate about growing your wealth and are successful at creating that wealth. Most people don’t want to consider taxes until it’s time to pay them. You may feel taxes are beyond your control, and as the old saying goes, the two things in life you cannot control are death and taxes. You may worry that there may be other options and are not receiving advice to maximize your hard-earned dollars. Have you considered if your current financial advisor or tax preparer is suggesting tax plan choices and options that reduce your tax liability and create tax efficiency?

Tax Diversification

Tax optimization is different from the typical practice of CPAs. Most tax preparers, CPAs, enrolled agents, and accountants specialize in tax compliance, management, and preparation. These practices are designed to ensure you pay all your taxes when they are due and do not account for any means to reduce the spending that goes to taxes.

While most investors understand the benefits of spreading risk exposure across asset classes, many tax preparers don’t recognize that tax diversification and efficiency are equally important. Using tax-diverse entities and proper tax-efficient structuring of your business entities will positively impact your tax obligations. Many investors and financial professionals alike do not understand how essential diversifying tax exposure is to wealth management. With so many different kinds of entities to choose from, it is easy for financial professionals to get caught up in the confusion. They don’t see the lack of understanding they have and how they are ignoring the importance of the tax-diversity tools and the tax savings being left on the table.

Tom Wheelwright reminds us that the tax law code “… is a series of incentives for entrepreneurs and investors” (Wheelwright, 2018) Not using tax law essentially ignores a vital tool in your wealth accumulation toolkit. Paying less in liability through diversifying your taxes and creating efficient structures should be considered a crucial aspect of increasing revenue. However, it is not taught as such or recognized by typical tax preparers.

Wealth Management Accounting Tax Plans

Making choices and goals for your future must involve creating a plan to help manage, defer, and reduce taxes. Our clients take control of their tax liability by developing an ongoing tax plan with WMA seasoned tax preparers as part of their financial advice.

DO NOT BE fooled by financial advisors that claim to offer tax reductions. Often they are not, in fact, part of a functioning team of professionals with a history of working together. Your team must include tax preparation professionals with years of experience. A team applying proven legal tax strategies has demonstrably enhanced our clients’ net worth. A team of seasoned professionals working together is the WMA advantage, ensuring our clients have every tool available to Create, Preserve, and Retain wealth.

Why Wealth Management Accounting?

Wealth Management Accounting develops a tax-savings plan unique to each client. Though paying taxes is unavoidable, there are efficient ways to minimize taxes to reduce your overall tax burden. That is where tax planning comes into the picture and why it is essential to proper wealth management.

Reducing your tax liability enables you to reinvest those savings to build wealth. Creating a diverse plan involves choosing the types of assets you will acquire; developing the criteria for accumulating these assets; and a team to help you acquire, manage, and dispose of real estate assets or businesses in a tax-efficient manner. These things are what is entailed in an optimized tax plan. All of this cannot be accomplished by a single advisor; you must have a team working together to truly build and protect wealth.

Our clients’ wealth strategy also ensures that their financial legacy will continue to provide security for their families for generations. Wealth Management Accounting can change the lives of anyone who wants their businesses and investments to work and grow for them.

The Wealth Management Accounting System

We help our clients create long-lasting habits through dedicated efforts to continue increasing knowledge. We teach our clients how to: set clear financial goals, create permanent tax efficiency that will reduce their taxes, supercharge building wealth, and achieve their goals much quicker than possible before using our team.

WMA’s time-tested planning has helped clients save and create wealth successfully for years. They have also aided in the cohesion of financial planning. The Wealth Management Accounting team and educational courses help determine which tax strategies fit your situation and meet your needs and goals.

What is Your Current Tax Plan?

A tax plan is a coordinated action structured around your clearly defined goals. A good tax plan will reduce taxes and enhance asset protection and estate planning. A tax plan designed to enhance wealth while creating asset protection is valuable regardless of your current investment in business or investment situation. A good tax plan is more than just wishing you could pay fewer taxes; it is tangible action to reduce taxes through utilizing tax law to your advantage.

If your current tax plan is non-existent or does not consider the above, re-evaluation is critical. Overpaying taxes is one of the most considerable barriers to accumulating wealth. Not only are you paying more in taxes, but you lose the opportunity to use that money for reinvesting, which could grant increased returns.

A tax plan created by the WMA team using tax optimization will create tax efficiency that will affect how business income and personal spending are structured. Our team will also analyze your current business structure and suggest options and choices. These may include changing, adding, or modifying your existing entity structure. Our tax plan will affect your payroll and income taxes, which of your expenses are deductible, and how you can most efficiently add to your wealth. Again, this is not just about reducing taxes; it is about how to make those savings benefit you most effectively. The WMA team will detail how you can reduce your taxes based on current tax law. Doing this allows our team to maximize your deductions based on your individually designed tax optimization plan.

Who Needs Wealth Management Accounting?

Everyone who wants to enjoy financial freedom needs WMA. Freedom allows our clients to live life on their terms and reduce taxes through a corresponding Wealth management plan. These strategies are not offered anywhere else and are proven to be the most consistent means of accumulating wealth.

Steps to Take Before Establishing a Tax Plan

Step 1: Clarify your Wealth Vision and Goals

Taking ownership of your wealth management plan requires clarifying your goals and objectives. WMA’s first objective is to understand each client’s description of their ultimate lifestyle and goals.

Step 2: Take Ownership

It is impossible to build wealth by putting one advisor in charge of everything; no single person knows enough about every facet of tax planning. The financial advisor’s advice is not the problem; it’s putting them in control of managing your wealth. Wealth Management Accounting firmly believes every client needs the “checks and balances” provided by a team of experts who work together daily. Attorneys will offer a different approach than CPAs; however, both have equally valuable advice. Trusted advisors with varying expert professions should work together to provide unique choices that create wealth, but YOU must always be in charge. Remember, you are the ship’s captain, and you pick the direction and speed of your journey. Ultimately, you evaluate our recommendations and unique choices and decide what looks like the best option for you. It is imperative that you understand and direct your investments, tax strategies, and wealth-building techniques.

Step 3: Choose Your Risk Level

As we build your wealth management plan, managing your market risk is essential. Preparing for the worst-case scenario (for example, a 2008 market decline), but hoping for the best, is always part of a WMA plan. We help to implement a risk ratio strategy that changes with age but always has a competitive rate of return.

Step 4: Establish Your Buffer Fund

We believe retaining at least 30% annual penalty-free, tax-neutral, liquid funds in your plan for life’s unexpected twists and turns is essential.

Step 5: Identify Qualified Funds from Non-Qualified Assets

Identifying qualified funds from non-qualified assets and implementing a tax management plan to reduce future tax liability is critical.

Your risk level must complement your asset protection plan and enhance a well-thought-out EXIT strategy (Retirement Income Goals).

Step 6: Establish Your Wealth Management Accounting Plan

All that is left is establishing a tax plan according to your needs. The steps above are essential predecessors to ensure all necessary information has been considered.

How to Create Your Plan

Step 1: Visualize your Goals Happening

Our process requires you to dream and clearly define your goals. First, we will take a snapshot of where you are financially today. Then we will help you create a goal that is clearly defined. Our next step is to move you toward where you want to be in the future. Then we will help you imagine what financial freedom will look like when your dreams happen. Finally, we will help you visualize what your plan and life will look like when it succeeds.

Our process will create your wealth management plan. Why is that important? The goals you have for the growth of your wealth will heavily influence your tax plan and provide the foundation for your wealth management plan.

A successful tax plan is a holistic look at your wealth management goals. Asset protection and estate planning are as important as growing your wealth. Never settle for a tax plan that doesn’t enhance asset protection, estate planning, and wealth management.

Step 2: Entity Flow Chart

Our team will provide a detailed review of your existing ownership structure to determine what needs to change. Remember, the ownership structure can and should enhance your tax, estate, and asset protection plan.

Our onboarding process begins with identifying the current facts about how your business and income are structured. Understanding these facts helps our team recommend changes and develop identifiable goals to grow your bottom line and wealth. Following this, a new entity flow chart will be created, clearly illustrating the new entity structure, and documenting changes to assist in implementing our tax plan.

As much as 50% of your tax incentives depend on how your entities are taxed. Our tax plan flow chart will assist our team of experts clearly communicating to your family as we enhance your ability to create and manage wealth. You will know where your money goes and, most importantly, when and how you will utilize your tax savings down the road.

Step 3: Deductions

With our flow chart in place, you will receive timely advice about how and when to implement your tax plan. Our team will identify any additional deductions you are not currently using.

New clients, many times, are afraid to take deductions because they think it may create a red flag with the IRS. Tax deductions exist to provide capital for economic expansion that will create jobs. These deductions are there SO THAT YOU CAN TAKE THEM. Taking deductions is not illegal; this will not raise any red flags from the IRS. Our team works diligently to be sure each client takes advantage of all deductions available.

Much of the tax code exists to provide these deductions, yet clients often needlessly pay excessive taxes due to a lack of sound advice. The WMA team will assist you in understanding how to use new entities to maximize and protect your tax plan that will create and enhance your wealth.

Annual Review

Wealth management planning is for the long haul, so there’s no need to create a new wealth plan every year. However, it is crucial that you review your Wealth Management Accounting plan at least annually.

During your annual personal review, we will discuss:

  1. Where are you on the path to reaching your goals?
  2. Have your goals changed since we created your tax plan?
  3. Do you understand your tax plan’s components and how your wealth can grow?
  4. What are your cash flow needs? How is it changing over time?
  5. How much equity have I built, and what is the total return on my portfolio this year? What are my future projections?
  6. How much tax am I paying? Does my tax plan need attention?

Upon completing your review, you can make informed adjustments to your plan to keep your wealth-building momentum moving in the right direction.

Why Do You Need a Tax Plan?

Like every aspect of life, no one plans to fail; they just fail to plan. Your tax situation will improve if you develop a plan. An effective tax plan will enable you to shift from having taxes as one of your most significant expenses to having your tax plan assist in creating and building wealth. Your taxes will evolve with your business and investments. WMA plans will adjust annually and make the necessary changes as tax laws change, ensuring that you continually pay the least amount of tax allowable.

Furthermore, the WMA process of creating a tax plan forces each client to get a clear financial picture of where they are. Our team will equip and teach the techniques to accelerate growth progress and manage your wealth. It is not just about reducing your taxes but about making you more aware of your finances. You will soon help our team by considering additional deductions only you may be mindful of as the business owner. Developing this communication concentrated on making your goals happen sets us apart from the usual tax preparation services.

WMA and your tax plan are here to serve you and your financial goals, not to confuse or overwhelm you. Following the Wealth Management Accounting system and the advice of our team will guide you to feel more confident in your plan and decisions.

Wheelwright, T. (2018). Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes (2nd ed.). BZK Press.