A lesson for FIs at tax time

Since mid-February, my social media feeds have been filled with posts from disgruntled connections who have filed their 2018 taxes. Also, there has been no shortage of news stories covering taxpayers’ shock and anger at either receiving a smaller return or owing money to the IRS. Even some well-educated taxpayers, who recognize that receiving a refund at the end of the year means the government held too much of their money are miffed about the changes.
The situation presents a huge opportunity for Financial Institutions and financial literacy advocates.
The number one reason FIs promote financial literacy is to create a community of independent depositors, who manage their own money. The hope, of course, is that these individuals will partner with the FI that provides them education and solutions. Is that your FI?
If you have not educated your constituents about income taxes, what are you waiting for?
Even if you didn’t warn depositors early in the year that a tax cut would result in a smaller refund, it is not too late to step in and help depositors manage their income and deductions through 2019.
In the words of Simon Sinek, Start with Why! The basic reason to become educated about payroll deductions and quarterly filing (for the self-employed) follows the logic of Financial Literacy 101—it encourages us to manage our own money, making us independent.

FIs can engage and educate account holders by making these suggestions:
  • Take the fear out of tax filing by consulting a trusted financial institution and accountant.
  • Opt for lower deductions, and then invest added income wisely.
  • Learn to discern. Some claim they would rather overpay for 12 months than owe at the end of the year because of a lack of self-control. As wage earners, we should be the boss of our own money.
  • Take the percentage of income that would be applied to overpaying taxes each month and apply it to a designated account where it can earn interest. Then use that money to pay end-of-year taxes when reconciling.
  • Consider a short-term CD or club account! Usually both will render money unavailable while   paying greater interest than a standard savings account.
Each of the above bullet points presents an opportunity for relationship building, aka, sales.
The important lesson individuals learned from filing 2018 taxes is that it is best to plan and be in control.
The important lesson FIs should have learned is that individuals thirst for solutions. Be that solution and watch your business grow.
Lorraine Ranalli

Lorraine Ranalli

Lorraine Ranalli is Chief Storyteller & Communications Director, as well as published author. Her most recent work, Impact: Deliver Effective, Meaningful, and Memorable Presentations, is a pocket book of public ... Web: LorraineRanalli.com Details