The Remarkable Added Value of a CFP CPA Financial Planner in Sonoma County

Managing your financial life often requires bringing together many separate elements. You have a holistic financial plan to help you manage your spending, saving and investing, but within each of these elements is a need to manage the tax consequences of your strategy.

The challenge for many investors, however, is that their financial planner and tax advisor are often in two separate offices. This can make financial planning inefficient, as you’re forced to not only make two separate appointments for your wealth and tax planning needs, but must then relay the information from one expert to the other. When your financial planner and tax advisor are housed under the same roof, everyone’s lives become much easier.

Chapter 1

Enter: The CFP CPA

A CFP CPA is an advisor who holds both the Certified Financial Planner (CFP) and Certified Public Accountant (CPA) designation. These are two of the most widely recognized and sought-after certifications in the financial industry, and for good reason.

The CFP is considered the standard of excellence in financial planning. CFPs are dedicated to providing the best possible holistic advice to their clients. The CPA certification is regarded equally highly in the tax planning profession.

Both CFPs and CPAs are required to always act in the best interest of their clients. CFPs who are also CPAs have the knowledge and experience in both financial and tax planning to ensure you receive comprehensive wealth management.

To give you a better idea of what it’s like to work with a CFP CPA, here is how such a wealth manager in Santa Rosa, California could help you in each element of your financial life, from creating a financial plan to preparing your estate documents.

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Chapter 2

Financial Planning

Taxes are an integral part of the financial planning process. Taxes play an integral role at each stage of your financial life. How you earn, save, spend and invest your money all factors into how much taxes you pay each year.

A good advisor will make sure to discuss the tax implications of a financial decision before you commit to it, but an advisor’s ability to do this is limited by his or her tax expertise. While a CFP must understand the fundamentals of tax planning, it’s nowhere near the breadth of a CPA’s tax knowledge. Combining the two is the best way to ensure you’re getting the best possible financial plan that will help you reach your financial goals in the most tax efficient manner possible.

A CFP CPA advisor will work with you to create a comprehensive financial plan to guide you through your entire life. Your plan will include saving and investing strategies for your earning years and a spending and investing plan for retirement. It will ensure you have enough cash flow to do the things you want to do in the present without risking your future financial wellbeing.

When you work with a CFP CPA, you get financial and tax advice at the same time, ensuring your financial plan is always as tax efficient as possible. They’ll provide this guidance throughout your life, too, by always monitoring and revising your plan as necessary. Both CFPs and CPAs must also meet continuing education requirements that ensure they’ll always be abreast of any financial or tax law changes.

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Chapter 3

Investment Management

Investing is essential to reach your long-term financial goals. Without the returns generated in the financial markets, it’s far harder to achieve the growth necessary to create long-term wealth. For this reason, financial planning involves strategic investment management to help you make sure your money is working for you towards achieving your financial goals.

Inside every good financial plan is a solid investment strategy designed around your short- and long-term financial goals. Creating this strategy often begins by evaluating your current assets, liabilities and cash flow and comparing that to your financial needs. Once we are certain your current needs are adequately met, we can look at putting your extra cash flow to work in the stock market.

A CFP CPA can provide the expertise necessary to help you create a personalized investment plan designed around your short- and long-term financial goals and risk tolerance. Risk tolerance is an important consideration because in order for your investments to achieve that long-term growth we’re after, you need an investment plan you can stick with. If you invest too aggressively, you may feel inclined to sell your investments when the stock market gets rocky, which is generally the worst thing you can do.

A CFP CPA advisor can walk you through the various investment options and their degree of risk available to you to help you determine the best combination of securities to reach your goals. A CFPs investment knowledge coupled with a CPAs understanding of how each investment is taxed guarantees your plan will be optimized to achieve maximum return with minimum tax liability.

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Chapter 4

Tax Planning

Taxes are a fact of life, but the amount of taxes you pay is not set in stone. How you manage your wealth will dictate just how much of your money goes to the IRS and how much you get to keep. The key to minimizing taxes is to make tax planning a year round part of your finances. If you wait until the tax filing deadline to think about tax planning, you may miss out on tax-saving strategies you could have used throughout the tax year.

Just as you meet with your financial advisor throughout the year, you should also be speaking with your tax advisor to ensure you’re taking advantage of these year-round tax planning strategies — which is why it helps when your CFP is also a CPA.

A CFP CPA will be able to help you identify tax-saving strategies throughout the year, and make sure you don’t leave tax planning until it’s too late to utilize them. A CFP CPA will also design the most tax-efficient financial plan to ensure you never pay more taxes than strictly necessary.

A CPA financial advisor is the best resource for determining the long- and short-term tax consequences of your financial decisions, from how you spend and save to how you invest. CPAs must meet continuing education requirements to ensure they stay abreast of tax law changes, so you can trust you’ll always be getting the most up-to-date information.

A CFP who is also a CPA means your advisor can also help you prepare your tax documents.

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Chapter 5

Retirement Planning

Retirement planning should be a lifelong process. The sooner you start planning for retirement, the better prepared you’ll be when it arrives. One element of retirement planning that often takes retirees by surprise is the impact of taxes. You’ll owe taxes on your retirement income just as you did during your working years.

How you manage that taxable income in retirement and how you prepare for it in your working years can have a major impact on your overall wealth in retirement.

A CFP and CPA advisor in Sonoma County is uniquely suited to set you up for long-term success in retirement by helping you create a holistic retirement plan. Such an advisor can help you identify your primary sources of retirement income and structure them in a way to minimize taxes both before and during retirement.

The combination of a CFP’s extensive financial planning and retirement income planning expertise coupled with a CFAs detailed knowledge of tax laws in Northern California guarantees you’ll have the most tax-efficient retirement plan possible.

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Chapter 6

Estate Planning

Estate planning is the process of planning for how your assets will be distributed and managed after you pass away. It usually includes documents such as your will, powers of attorney, advanced health care directive, trusts, insurance documents and beneficiary designations, among other documents.

How you structure your estate will determine how much of your wealth gets passed to your heirs and how much ends up with the IRS. Working with a CFP and CPA is the best way to ensure your estate is managed in the most financially and tax efficient manner.

A CFP CPA advisor will help you develop a strategy that ensures your wishes will be honored while sheltering as much of your wealth from taxes as possible. CFP CPAs can explain the different methods of transferring property available to you and how estate tax rules apply at the federal and state level. They stay abreast of estate planning legislation and its possible future changes so you can make sure your assets are always well protected.

When necessary, your CFP CPA will also work with other professionals on your financial team, such as attorneys, appraisers and insurance brokers, to ensure that every element of your estate plan is properly valued and addressed.

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Chapter 7

Putting it All Together

Every financial decision you make has tax implications. How you earn your money, how you spend and save, where you invest and how you turn those investments into retirement income all affect how much taxes you pay each year. For this reason, financial planning and tax planning should be inextricably linked.

A CFP CPA is uniquely suited to helping with all of your wealth and tax planning needs. CFP CPAs can help you at every stage of your financial life, from financial planning to education planning, retirement planning, estate planning and of course tax planning. An advisor who is knowledgeable about both financial and tax planning is the best way to ensure you’re getting the best guidance and value for your money when receiving financial advice.

Since wealth and taxes go hand-in-hand, your wealth and tax planning should, too. With a CFP CPA in Sonoma County, you can trust you’re getting the highest standard of competence and integrity the industry has to offer.