Chris O'Shea took a pay cut to become a financial advisor. Then he left the firm for nearly a decade to coach high school sports and work with students at his church. He came back with a completely different sense of what this work is really about. Read his story.
Four People Came to Us Thinking Their Finances Were Covered. Here’s What We Found.
Justin Linthicum, CPA, CFP®
Do you feel confident that you are maximizing all the tax breaks your particular situation offers? Whether you use a CPA or prepare your tax returns yourself, we often identify overlooked opportunities by reviewing your returns from a financial planning perspective rather than just doing basic tax preparation. We have found that even if you have a CPA and work with a financial advisor, this does not guarantee that the two professionals together have a complete view of your wealth.
Your CPA works from the documents in front of them. Your financial advisor works from the investment accounts they manage. Unless those two people are in regular, detailed communication, there is a middle ground that neither sees. It is in that middle ground where some of the most impactful planning happens.
At Financial Consulate, nearly half our advisors are CPAs themselves, which allows us to look at financial planning and tax preparation as a single conversation. Even the advisors who are not CPAs, work alongside our CPAs assisting our clients annually to develop a tax strategy that fits their financial situation and future goals. We use tax planning software to generate a blueprint for the tax return to be compared to at tax time.
As you’ll read in the client stories below, this integrated process found a $26,000 Roth conversion with zero tax owed. We recovered an $8,500 refund from amended returns and identified a $3,420 annual tax saving from one simple reclassification. We also found a Maryland state tax benefit worth 42% of a couple’s IRA contributions. Their previous professionals had not mentioned any of these opportunities.
Here is how each situation unfolded.
Can a Roth Conversion Be Done With Zero Tax?
The Jenkins1 were over 65 and still contributing to Roth IRAs each year. While they felt their tax ground was covered, a look at Maryland’s tax thresholds revealed an overlooked opportunity. Maryland has a specific adjusted gross income (AGI) threshold of $150,000 for married filers.
Crossing this line by even one dollar causes personal exemptions to be cut in half, dropping from $3,200 to $1,600 per person. Furthermore, Maryland offers a $1,750 senior tax credit to couples who stay below that $150,000 threshold. By recharacterizing the Jenkins’ Roth contributions as traditional, deductible contributions, we pulled their AGI below that line. This preserved their full exemptions and the senior credit. The combined benefit equaled 42% of the $15,000 they had contributed—a saving their prior returns never captured.
We then advised them to convert the $15,000 to their Roths since the reclassification happened in a subsequent year in which their income situation changed to a 30% combined income tax rate between Federal and State. The result was the same with the Jenkins having $15,000 in their Roth IRAs, however, our strategy kept 12% in our clients’ pocket rather than the government’s.
The Retired Couple Sitting on a Window Nobody Mentioned
The Smiths2 had just started receiving Social Security and had no other income. Because Social Security is not fully taxable at lower income levels, a portion of their income was effectively sheltered. This created a planning window between their taxable income and the top of the standard deduction.
Their previous CPA just looking at the documents in front of them never considered it and just advised them no tax return was required.
We converted $26,000 from their traditional IRA to a Roth that year with zero federal tax owed on the conversion. Every dollar moved now will grow tax-free and will never be subject to required minimum distribution (RMD) rules later.
The Couple Who Turned a Difficult Year Into a Planning Opportunity
The Wilsons3 came to us with rental-property debt that made retirement feel further away than their account balances suggested. Their property in another state had been generating paper losses for years. Because their income was too high, those passive losses could not be deducted currently; they were just accumulating in the background.
When their income dropped significantly one year, those accumulated losses became deductible upon the sale of the property. We recommended a $125,000 Roth conversion through their 401(k). The passive losses and the capital loss from the property sale combined to offset the conversion. Because they had no traditional IRA, we executed an in-plan conversion directly through their employer plan (an option many do not realize exists). The sale proceeds went to clear their debt, turning a discouraging year into a highly productive planning period.
A Classification Error That Cost Thousands
The Net Investment Income Tax (NIIT) is a 3.8% federal surtax on certain passive income for filers with an AGI over $250,000. However, a specific distinction in the tax code states that income from a self-rental is treated as nonpassive if the business itself is nonpassive for the owner.
When John4 came to us a new client, his AGI had recently crossed that $250,000 threshold. We reviewed his return and found $90,000 in self-rental income was being misclassified as passive and hit with the surtax. Correcting this saved John $3,420 that year and every year going forward. In a separate case involving a client’s adult child, we caught a preparer listing an active partner in a partnership being listed as passive income producing an $8,500 refund after the NIIT was eliminated.
What These Situations Have in Common
None of these outcomes happened because previous professionals were doing their jobs poorly. They happened because the opportunities required looking at the tax return and the financial plan at the same time.
The work I find most valuable isn’t catching errors after the fact but building a process where the financial plan and the tax return inform each other throughout the year. This way planning windows get noticed before they close and situations get reviewed before they’re finalized. For people with real complexity in their financial lives, especially as retirement approaches, that kind of coordination matters.
If you’ve ever wondered whether your advisor and your CPA are truly seeing the same picture, we recommend exploring that question before you’re further into retirement, when some of these windows close for good.
We welcome the chance to look at your situation with fresh eyes. Schedule a complimentary introductory call to start the conversation.
1 Name changed for confidentiality purposes.
2 Name changed for confidentiality purposes.
3 Name changed for confidentiality purposes.
4 Name changed for confidentiality purposes.
Frequently Asked Questions
Do I really need both a financial advisor and a CPA, or can one person handle both?
You do not necessarily need two separate professionals if you work with a firm that integrates both financial advisory and CPA services under one roof to eliminate the planning gap. While many people hire a financial advisor for investments and a CPA for taxes, these two areas are often treated as separate silos, which leads to missed opportunities. For example, a CPA might not know your investment timeline, and an advisor may not realize a specific tax threshold is approaching.
Am I paying more in taxes than I should be in retirement?
You may be paying more in taxes than you should be in retirement because of the complex new phase-outs introduced in 2026, including the One Big Beautiful Bill (OBBBA) senior deduction. Under the 2026 tax code, married couples receive a new $12,000 additional deduction, but this benefit begins to phase out once your income crosses $150,000. Additionally, the SALT cap has been raised to $40,000, meaning many retirees who previously took the standard deduction could now be itemizing their property taxes and charitable gifts. Failing to coordinate your RMDs and Social Security timing could push you into these phase-out ranges, costing you thousands in avoidable taxes.
How do I know if my financial advisor and CPA are actually coordinating?
You can tell if your financial advisor and CPA are coordinating by asking them specifically when they last spoke about your situation and whether they have compared your investment projections to your actual tax returns. True coordination means your CPA is aware of planned Roth conversions before year-end and your advisor knows your exact tax liability before you make a withdrawal. If their answers are vague, or if they are simply exchanging documents once a year, they are likely working in isolation, which leaves your plan vulnerable to surprises at filing time.
Should I be doing Roth conversions before I retire?
You should consider performing Roth conversions after you stop working but before your Social Security and RMDs begin to take advantage of your lowest-income years. In 2026, these strategic conversions are especially valuable because they help manage your future income to stay below the new $150,000 phase-out threshold for senior tax deductions. By converting strategically in your 60s, you can shrink the size of your future RMDs and reduce the likelihood of triggering higher Medicare premiums (IRMAA) or taxing a larger portion of your Social Security later.
Why does my state of residence matter so much for retirement tax planning?
Your state of residence is critical for retirement tax planning because of specific 2026 updates like Maryland’s HB 707, which now allows residents age 65+ to exclude 30% of their IRA distributions from state taxation. Beyond this new exclusion, Maryland residents over 65 must still manage their income to stay below the $150,000 AGI threshold; crossing this by even one dollar causes personal exemptions to be cut in half and can trigger the loss of the $1,750 senior tax credit. Without an advisor who understands these Maryland rules, you could miss out on significant state-level savings that aren’t mentioned on a standard federal tax document.
Disclaimer: The client situations described in this article are based on real cases but have been anonymized. Names and certain identifying details have been changed to protect client privacy. Nothing in this article should be construed as personalized tax or financial advice. Tax laws are subject to change, and individual circumstances vary. Please consult a qualified tax professional or financial advisor regarding your specific situation.
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