We believe that effective financial management requires a holistic approach, especially when it comes to taxes. At Finomenon Investments, we have a North Star metric – reducing lifetime effective tax.
We discuss some strategies for this in our blog here. Our collaboration with client CPAs is a cornerstone of this service, ensuring that all aspects of tax planning, reporting, and filing are in sync with Investments while handled with transparency and care.
One of the key tools in this collaboration is F2ON, or Finomenon Family Office Network – A Zero commission platform, that offers Clients hassle free services from professionals like CPA, Estate Planner and other professionals.
Presenting a United Front
When it comes to filing taxes and providing information to your CPA, we use the Account Summary Report (ASR), a document designed to streamline the tax preparation process for our clients and their CPAs, offered by our custodian Charles Schwab. ASR is an informational report that provides a detailed summary of dividend and interest income received, as well as buy and sell transactions in Client’s portfolio.
While an ASR closely resembles the Form 1099 Composite in content, it is important to note that the ASR is not submitted to the IRS. Instead, it serves as a valuable resource for our clients and their CPAs during tax season, helping to ensure accuracy in tax reporting and filing.
Account Summary Report (ASR)
The ASR is automatically generated for eligible accounts, making it a convenient tool for both clients and their CPAs. To receive the ASR, Client account must meet the following criteria:
- Non-taxable (but subject to tax reporting) account or S Corporation: The ASR is tailored for accounts that, while non-taxable, still require reporting of income and transactions.
- One or more tax-reportable transactions during the calendar year: This ensures that the ASR is relevant and comprehensive, capturing all necessary information for tax purposes.
- Active as of December 31: Accounts must be actively managed by us at Finomenon Investments to qualify for the ASR.
- Open as of December 31: The account must be open at the end of the calendar year to ensure a full year of reporting.
- Enrolled to receive the report by January 31 of the following year: Clients must be enrolled to receive the ASR to ensure timely delivery before the tax filing deadline.
Designed to be comprehensive, it offers a range of features that makes it a valuable tool for CPAs to do tax preparation
- Dividends and Distribution Information: This section reports on all dividend income received throughout the tax year. It differentiates between qualified and non qualified dividend income, capital gains distributions, nontaxable distributions, liquidation distributions, and partnership distributions. Additionally, it provides information on foreign taxes paid and any taxes withheld, ensuring that all income and related tax implications are clearly documented.
- Interest Information: The ASR reports all interest earned from interest-bearing securities, including accrued interest from the sale or exchange of securities and principal payments received. It also includes details on margin interest charges and any taxes withheld, offering a complete picture of the client’s interest income for the year.
- Investment Activity: This section provides a summary of all investment transactions that took place during the previous year. It includes purchases, sales, option trades, dividend reinvestment, principal payments, and any reorganization activity. By documenting these transactions, the ASR ensures that clients and their CPAs have a clear record of all investment activity that may impact tax reporting.
Lifetime Effective Tax Reduction and Planning
At Finomenon Investments, we understand that tax planning is an integral part of wealth management. Our collaboration with client CPAs ensures that all tax-related information is accurate and up to date, facilitating a smooth and efficient tax filing process.
F2ON platform is designed to offer clients a family office experience and Account Summary Report (ASR) is an example of a powerful tool, that enhances our collaboration with client CPAs, and reduces risk of errors, by providing a clear and comprehensive overview of investment income and transactions that impact tax reporting.
For more information on how we can assist with your tax planning and filing needs, or to learn more about F2ON, book a complimentary call with us.
Disclaimer: Nothing here should be considered an investment advice. All investment carry risks, including possible loss of principal and fluctuation in value. Finomenon Investments LLC cannot guarantee future financial results.
