A careful review of a client’s tax returns can provide insight into their insurance and financial planning needs. A review of the lines on a tax return can lead to conversations about:
• Basic needs analysis and college funding
• Retirement and extended care planning
• Legacy & charitable planning
• Business planning
Additionally, comparing last year’s tax return to this year’s tax return can shed light on planning opportunities due to major changes in the client’s life.
Form 1040 was redesigned in 2018. Now, everyone will use Form 1040* and Forms 1040A and 1040EZ will no longer be used. The new Form 1040 is shorter, but not necessarily simpler. The new form has numbered schedules in addition to the lettered schedules. Many people may only need to file the 1040 Form and none of the schedules. However, more complex returns may need to file one or more of the schedules.
Tax planning remains an essential aspect in any work with clients at all income levels. A review of your client’s tax return should allow you an opportunity to assist them in addressing decisions that can impact their overall income tax, accumulation, and retirement planning. Life insurance provides features that can help clients particularly in a changing tax environment.
This guide focuses on Form 1040, and Schedule A. The guide is designed to help you review and uncover opportunities within your client’s income tax return. In addition to paying attention to what is disclosed in the client’s tax return, note what is missing. This may also result in opportunities.
*Starting with tax years 202, seniors may use Form 1040-SR.