Take the time to look back at the questions your clients raised when you prepared their tax returns, review their tax returns, and examine their financial conditions. Consider what they should have asked but didn't, and listen to their concerns.

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Anyone can do that! Why do so many tax pros avoid calling their clients to give them advice? The general misconception this industry seems to have is that we should be waiting for clients to call us if or when they have a problem. Some pros are afraid that clients won't want to pay if we initiate the call.

Wrong! Your clients will be happy to pay you for helping them out. They rely on your guidance, experience, and wisdom. And the truth is – often they don't know they're having a problem. And many times they think they've done something clever with their finances -- until they come to us and we bring them back down to earth. Then, it's too late.

Eva Rosenberg, EA, is the Internet’s TaxMama, publisher of www.TaxMama.com. She offers ten topics that you can discuss with clients this summer. Chances are, at least one of these topics will lead to new business.

1) SIMPLEs

A SIMPLE plan is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees' retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or non-elective contributions. All contributions are made directly to an IRA set up for each employee. SIMPLE plans must be set up before Sept. 30. This is often misunderstood. Since the plans are not tied to a percentage of wages or income, they can be powerful savings tools. A full $10,500 can be deposited, per employee, plus $2,500 catch-up for those 50 or older.

The employer does not have to fund the contributions - it comes from the employee's (or owner employee's) own wages. And that little extra 3% that the employer can match? It isn't 3% of the $10,500 - it's 3% of the employee's earnings. Note that earnings are either wages, tips and related income, or if self-employed, earnings are net profits on Schedule C.

2) W-4 Updates

How many times have your clients come to you for tax preparation and made your life miserable because they owe too much money? If your clients are underwithheld or haven't made estimated payments, there's still time to fix the damage. Call them in and have them bring in their year-to-date paystubs and income information. Or have them fax the information to you. If you can change their withholding, help them save money, help them plan extra deductions before the end of the year - you'll be a hero.

3) Tax-deferred retirement contributions

Call your clients who have not taken advantage of their 401ks, IRAs, SEPs and other deferred income resources in previous years. Do some planning now, even though, some of the plans can be funded until the last extension next year.

If you think you're confused about retirement plans, think of your poor clients! If you're not really clear on the rules, find someone who is and set up appointments so you can both meet with your clients. They need to know the alternatives and how to use them. For example, when is a Roth IRA good for them -- and when is it not appropriate? If you don't meet with them, some financial planner or broker, referred by a friend, family member, or even someone in the grocery line will. Get there first and protect your clients from strangers. Summer is the time to discuss long-range planning, when the crunch of tax return preparation is behind both you and your clients.

4) Help clients who pay the SE tax

If you have clients who had really high self employment taxes, you might want to help them form S-Corps to reduce those. One rule of thumb is - if Schedule C profit is above $40,000, it's time to take a look at an S-Corp. Why S, not LLC or LLP? Because the other two alternatives don't solve the self-employment tax problem. If this move only saves them $5,000 per year -- isn't that a nice start? And you can charge them a few hours of your time to set them up and teach them to operate a corporation. You might even pick up their payroll and bookkeeping work. Don't rule out LLCs. These entity types might be interesting as the base entity, depending on your state of residence, or gross income level.

5) Make sure corporate clients have their ducks in a row

For your clients with corporations, review their books and records to make sure they have the officer's payroll documented correctly, proper minutes, and so on. This is a nice time to reinforce the fact that they need books, and verify that they have a separate bank account for the corporation. On the larger corporations, make sure all their decisions and compensation are reflected in the minutes and that the compensation doesn't conflict with pension rules.

6) Let's make some money!

For clients in business who have been showing losses, it's time to have them come in and review their P & L to see how to make them profitable. You have lots more business experience; you can probably help them cut costs, or perhaps make contacts with other clients who can be helpful. If the business can't become profitable, you must discuss the hobby loss issues with them. In fact, if they really believe it's a business, but there's no hope for it to turn a profit, you'd be doing them a big favor if you convinced them to cut their losses and close down.

7) Discuss employee issues

For clients with employees, sit down with them and help them set up some employee benefit plans. 125 plans, 401k's, and SIMPLEs all save the employer money as well as help the employees. Cafeteria plans can help the employees save a substantial amount of tax dollars if they pay for medical insurance, braces, visual care or laser surgery, or if they have child care costs. And every time the employee saves money, so does the employer -- all those pre-tax wages reduce the employer's FICA, Medicare, state and federal unemployment taxes, and Worker's Compensation insurance. Even after administration costs for these plans, the employer makes a profit! And often, the employer can participate in the plans too.

8) Help with savings plans

Look at your clients with high earnings and no savings, and help them start building savings and retirement monies. Sometimes, they have reasons for not having savings. More often, it's a matter of not having discipline. This is the time to help your clients define some financial goals. Do they want to own a home? Be able to take a specific trip? Retire without worries? Pay for long-term medical care because they have some family history of medical problems? It's not that hard to help them set up automatic transfers from their bank account to a savings or brokerage account. If they are young, and make deposits in increments of $50 to $100 per month, they could be worth a million dollars when they retire. Or they could put a small amount of money in a self-directed Roth IRA or Roth 401(k) and have their fortune, tax-free when they retire. You will be such a hero!

9) Create new homeowners

Consider your clients with no Schedule A's. If there's a way to help them buy a home, take the time to help. Often, due to tax or credit problems, low self-esteem, ignorance, or even laziness, people don't believe they can really afford a home of their own. Once you sit down with them and work out some numbers, you can usually help them work out a budget to save for that down payment; adjust their withholding to free up cash; show them how to borrow against their 401k or 403b retirement plans if that is an option. Those clients never leave you.

10) Stay in touch

If you can't think of anything that will help, just call and say, "Hi!" They'll find it refreshing that you are not calling with bad news for a change. Remind them you're their friend and open to their ideas. You'll also find out if they bought/sold any property, moved, changed addresses or jobs, had babies, got married, divorced, died ... made any changes to their lives you need to know about.

I know, I only promised you 10 reasons. But, here's one more. And it's a doozy!

11) Take their business online

Everyone is aware of the Internet, but many smaller businesses have yet to make their presence known online. Your clients know that many businesses have web sites and even do business online, but they might not know if this is appropriate for them or not. Be there for them. Stop them if it's inappropriate. Guide them if it is a good decision.

When you're all done with this summer checklist -- you'll get paid lots of fees for all your trouble. Your client will get some powerful tax reductions and find themselves either saving money or building equity or building a successful business. Actually, this can be a win-win situation. Why not take a moment and see whom you can help? They will not only love you for it -- but your referrals will skyrocket.

By Eva Rosenberg, EA
Eva Rosenberg, EA, is the Internet's TaxMama, publisher of www.TaxMama.com, the voice behind the daily TaxQuips podcasts at www.TaxQuips.com and the passionate force behind TaxMama's EA Exam Review Class at www.irsexams.com, advocating for improvements in the EA Exam system.

robert fligel , 21 June 2007 @ 13:25 PM  What a great article. Implementation question I think this article is terrific as have always felt that the client service/money making opportunities for CPAs are limited only by their imagination. Here's the catch though for many smaller CPA firm owners. Your clients may really appreciate your interest and all the great ideas but they are on a fixed monthly or quarterly fee and either don't want to or cannot afford to pay more. I know the answer lies in that overused but accurate word VALUE. Sure, if they think it will save them or make them more money, they should be receptive, but I hear from many CPAs that they still have a hard time getting a buy in on additional services which entail fees above the retainer. Please share some of your ideas about this