As the year winds down and advisors look to lock-in several 2020 tax bill changes for their clients, the focus is frequently on tax planning. But for many advisors, the manual process of maintaining countless tax spreadsheets can make it tough to monitor and track taxes as efficiently as they would like.

That’s why we launched the Tamarac Annual Capital Gains Tax Budget tool, a new way to build all the tax information you need into the Tamarac Reporting platform — so you can let the system do the work for you. High-performing advisors have found the tool to provide great value in the tax-planning process and help differentiate the services they offer to their clients.

Here’s an in-depth look at our Annual Capital Gains Tax Budget tool and how it can help you manage your clients’ tax burden. With insights from successful advisors who are using the tool, you can see what they are doing and how they find the tool to make a difference.

1. Get started in the most efficient way

When advisors get started with our Annual Capital Gains Tax Budget tool, they first look to assign a budget they have agreed upon with their clients for taxes incurred from trading, in either specific accounts or a rebalancing group. Our tool is set up to use the direct realized gain/loss data from various custodians. And our Tamarac Support Team is always available to help ensure that the realized year-to-date gain/loss data is accurately captured in the estimated tax amounts.

As part of our tool’s flexibility, you can set up your Rebalance page to add the following columns:

  • Annual Capital Gains Tax Budget
  • Tax Budget Used
  • YTD Capital Gains Taxes

You can easily set up a saved search to find accounts that have reached a specific percentage of the budget so you can address the situation and offer smart tax strategies for consideration.

Here’s a closer look at the home screen on our Annual Capital Gains Tax Budget tool, offering a simple and easy way to see where each client stands from a tax perspective:

For Illustrative purposes only. Not based on actual client data.

2. Evaluate your clients’ tax needs throughout the year

Once you have the tool set up to meet your specific requirements, you can easily use the saved search to identify clients who are either close to or over their capital gains budget for the year. This is done by merely placing the accounts on hold and indicating that you may not want to trade again this year. By sorting on the Rebalance page, you can find clients with the highest percentage of their budget used for the year.

When trading an account, our tool provides specific warning messages to help you stay on top of tax issues. For example, if a client exceeds an agreed-upon budget, you can change a trade — either trading a different security for fewer gains or removing a trade that will put the client over the top of the budget. You can also get updated information about the expected gain/loss impact of the trade, both at the position level and the total account level.

For some advisors, this may also present an opportunity to explore our ‘Sell based on tax optimization’ Rebalance Option. This option allows you to manage potential taxes more efficiently in taxable accounts.

3. Connect tax conversations with periodic client reviews

When advisors connect our tax tool insights with their CRM system, this can lead to another level of service excellence. Advisors simply create a CRM task to follow up with any client who may require a tax budget conversation. This item then becomes part of the agenda for the next client review meeting. At the start of the year, some advisors use the tool to pull a bulk report and review all their clients’ tax budgets to ensure data accuracy before heading into tax season.

Learn More

Learn more about how our Tamarac Capital Gains Tax Budget tool can help you provide more value to clients as they look for ways to manage taxes. For more details on the Tamarac platform and our innovative tools, visit, or give us a call at 866-525-8811.

The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

Envestnet and its representatives do not render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor.

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