What can one line do for you?

• Author: Hoff, David
• Position: Personal financial planning

ONE OF THE COMMON AND ONGOING challenges facing CPA practitioners is identifying ways to both grow and diversify sources of revenue. In uncertain times (especially over the past several years), planning for and preparing to overcome this challenge has taken on increased importance for accounting practices across the country. One area where many CPA practitioners can consider offering expanded services is in personal financial planning (PFP).

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Although there may be widespread and differing viewpoints on what constitutes PFP, the AICPA created the Personal Financial Planning Section for members in 1986 to serve CPAs who work in a range of financial planning areas, including estate, tax, retirement, risk management, and investment advisory services. The AICPA's emphasis in this area goes well beyond what is often the traditional perception of PFP as simply selling products and strives to support practitioners in providing comprehensive trusted advice to clients (which in many instances does not involve the sale of financial products).

Case Studies

In preparing annual tax returns for individual clients, the tax practitioner is uniquely positioned to gain insight into a number of areas where value can be added to a client relationship. This column focuses on a single line--Line 15a, "IRA distributions"--from Form 1040, U.S. Individual Income Tax Return, to highlight and provide several real-life examples of the array of PFP possibilities that can develop from the information provided and questions asked during the tax return filing process.

Through the presentation of these cases as well as an introduction to the resources available through the AICPA, the goal of this column is to assist practitioners in thinking about and outlining the first steps to a potentially more diversified financial future and a more holistic approach to serving individual clients. Please note that any regulatory issues to consider in the area of insurance or investment planning are not addressed in this discussion.

The Black Family: Estate Planning

Mr. and Mrs. Black recently retired and have started taking distributions from Mr. Black's IRA account. In addition to Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., reporting the distribution, Mr. Black provides Form 5498, IRA Contribution Information, to the CPA for purposes of completing his 2011 income tax returns. The Form...