With tax season around the corner, delivering guidance to help your clients with their filing requirements has never been more critical. Envestnet | Tamarac has you covered with a wide array of tax planning tools to help you get the tax data your clients need. From our Capital Gains Tax Budget tool to comprehensive client reporting — and new updates in our February month-end release — you can feel more confident that your clients’ tax reporting is on track.

Here’s a closer look at six of our innovative tax tools:

1. Reconciliation of open lots and custodian integration for realized gain/loss reporting

For each position on the Tamarac platform, cost basis is calculated based on an account’s transaction history. Because some transactions, such as account transfers or corporate actions, may not provide cost basis, we offer daily reconciliation and reset to match the custodian’s open lot data for all accounts where cost basis data is available.

For closed lots, as an alternative to transaction-based calculated realized gains or losses, we can integrate custodian closed lot data directly so that data reflected in year-end tax reporting matches the custodian. This integration is available for accounts custodied at Schwab, Fidelity, TD Ameritrade, Pershing, and Raymond James. Our service team can easily set up and monitor these integrations for you.

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. Capital Gains Tax Budget tool

Our powerful 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, 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.

6. Tax Overlay Services and Customized Investment Solutions

As you help clients think about managing taxes throughout the year, Envestnet has the solutions you need. If you are interested in applying holistic tax management to client assets, look to the Envestnet | PMC Tax Overlay Services offering. When combined with the Tamarac Unified Managed Account Solution, you can tailor investments to specific client circumstances and needs.

Coming Soon: More Tax-Planning Data Points to Save You Time

With our end of February enhancement release, we’re thrilled to add more than 40 new tax planning data points to our Comparative Review Report. These new data points provide greater visibility into dividends, interest, expenses, and capital gains, supporting your tax planning preparation with clients. We’ll have more details available to you soon.

Learn More

Learn more about how our innovative Tamarac tax tools can help you provide more value to clients in tax planning conversations and so much more. For more details on the Tamarac platform and our advanced tools, visit www.tamaracinc.com, or give us a call at 866-525-8811.

Neither Envestnet, Envestnet | Tamarac, nor its representatives 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.

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.

Written by Dan Miller

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.

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