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Daily money managers frequently work collaboratively with other professionals to help their clients obtain the services they need. Here is a recent example of a DMM-CPA collaboration to help.

The Scenario

An elder law attorney referred us to her client, a man with a severe physical disability who needed a financial power of attorney (POA). His sister, who had been helping him, was no longer able to after she suddenly became ill.

The Needs Assessment

We began, as we often do, by analyzing his checking and credit card data to get a better understanding of his daily financial needs. We did this by downloading the current and previous years of banking and credit card transactions into Quicken® software. We categorized each transaction, which enabled us to create detailed records of all his expenses and income.

We saw that he had huge medical expenses, primarily due to the cost of extensive home health care. However, we also noticed that he was making significant quarterly estimated tax payments that seemed unnecessary considering his income and medical expenses. This red flag pointed to an obvious accounting issue.

Building the Professional Team

In my role as a daily money manager, I help clients create budgets, pay their bills, process insurance claims, and deal with the daily demands of their financial lives. In order to provide clients with the services that they need, I build relationships with other professionals who can help my clients with other aspects of their lives. These include: attorneys, financial advisors, care managers, insurance agents, and others.

After seeing the anomalies in our new client’s data, we reached out to one of our accountant “partners”.  We are fortunate to know a number of professionals in each specialty so we can choose to recommend the one who we think is a good fit, and have others to choose from if that individual is unavailable. In this case I reached out to a Certified Public Accountant (CPA) we have worked with before in similar circumstances.

Team Member Roles and Resolution

During tax season we provide each client’s accountant with W2s, 1099s, K-1s and other financial documents that are required by the IRS. We also look at our client’s IRA statements to determine if Required Minimum Distributions (RMDs) need to be taken. When necessary, we’ll also follow up on any estimated tax payments that need to be made.

The client approved bringing the CPA onto the team to act as his POA with the IRS, so back tax returns could be obtained. The CPA reviewed the tax returns and determined that more than one year should be considered when taxes were filed. This action reduced the cash drain of the estimated tax payments and provided financial relief to resolve the issue for our client.

How DMM-CPA Teamwork Can Help You During Difficult Times

When you have a sudden or complex situation, ask your DMM or your CPA about a collaboration. In our daily money management work, we use the services of our trusted CPA partners frequently. We consider CPAs to be an intrinsic part of our client service teams.

Peter Gordon is a Certified Daily Money Manager, Certified Senior Advisor, and President of New York Financial Organizers, Inc. in New York City.

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