As advisors head into the final weeks of 2020, all eyes are focused on year-end tax planning and how to deliver the guidance clients need to manage their tax burdens. Envestnet | Tamarac provides the tax tools you need to efficiently manage your clients’ tax liability for their investment accounts.
From tax-loss harvesting to capital gains tax budgeting, we’ve got you covered — with innovative tools that can help you translate data analytics into action before year’s end. Here’s a closer look at five of the tools available as you prepare for year-end trades and reporting:
1. Sync of open lots and direct realized gain/loss reporting
Tamarac Reporting offers the sync of open lots and direct realized gain/loss reporting. This tool is available for advisors who utilize custodians such as Schwab, Fidelity, TD Ameritrade, Raymond James, and Pershing. It ensures that the data in Tamarac Reporting and Tamarac Trading is as accurate as the custodian’s data used in the preparation of year-end tax documents.
2. Comprehensive client reporting that shows current tax data
We offer several dynamic and PDF reports that provide you and your clients with an enhanced look at current tax data:
- Comparative Review Report gives you an account-by-account breakdown for all accounts in a relationship, and it can include withdrawals, income, fees, and realized gain/loss information.
- Holdings and Unrealized Gain/Loss Report shows data at the combined group level or down to the tax lot level.
- Realized Gain/Loss Report includes sale transactions on taxable accounts at the position or lot level. You can also include gain distributions from mutual fund positions.
3. New Capital Gains Tax Budget tool
Our powerful new tool, Capital Gains Tax Budget, can set a gains budget in Tamarac Trading to help you monitor a client’s realized gain information against an agreed-upon budget. This tool is available as a saved search or on our Rebalance page in a dashboard format. The tool also provides an early warning to alert you when a proposed trade might exceed the annual budgeted amount.
4. Trade types for tax-loss harvesting
With many advisors taking advantage of tax-loss harvesting opportunities for their clients this year, we offer several ways to support this strategy:
- Tax-loss harvest and rebalance trade type allows you to set a threshold for tax-loss harvest trades at the account level in either dollar or percentage. You can sell losses (at the lot level for supported custodians) and either leave the proceeds in cash or buy underweight portions of the model, including any substitute securities identified.
- Directed trade for tax-loss harvest allows for a security-specific trade across many accounts when you know a specific security is held at a loss.
- Selected lot trading capabilities, available for supported custodians, allow you to send specific lot trade instructions from Tamarac, so you have more precise control over sale transactions.
5. Cash reserves for required minimum distributions (RMDs) and periodic withdrawals
With Tamarac Trading, you can take advantage of our cash reserve tool to support the needs of clients planning for retirement. For example, you can utilize the Tamarac Trading cash reserve functionality to set up RMD cash needs for either one time or periodic withdrawals.
You also have the option to upload this information at the beginning of the year when RMD amounts are calculated, supporting lump-sum or monthly/quarterly distributions. In addition, custom fields and bulk reports allow you to build a dashboard of RMD status per account, so you will always be aware of the current withdrawal position.
Learn more about how our innovative Tamarac tax tools can help you provide more value to clients in year-end planning conversations. For more details on the Tamarac platform and our advanced tools, visit www.tamaracinc.com, 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.
Brian has been a member of the Tamarac team since 2010. He has worked with hundreds of firms as they have adopted the Tamarac platform, from the smallest single-person firms to organizations with over a hundred offices located throughout the country. Most recently, Brian has focused most of his time working with the largest Tamarac organizations to streamline and make more efficient their use of technology as it relates to Client Portal, Billing, Client Reporting, Trading, and Workflow. Brian joined the sales organization in 2019 to assist RIA organizations in the decision-making process for improving their back office and client-facing technology.
Dan joined Tamarac in 2009, coming from a role in operations and trading with a large RIA. Dan started in the support organization and has since held many different roles, including Senior Consultant on Tamarac Trading, Relationship Manager, and most recently as a Platform Consultant. In those roles, Dan completed hundreds of consulting engagements with Tamarac clients, and now uses the knowledge he gained in those engagements to guide his work as a Product Manager.