TaxTemplates with Jay Goodis | E286
Enabling tax planning advice in Canada.
On this episode of Fintech Impact, Jason talks to Jay Goodis, the CEO of Tax Template Sync, a software designed to help advisors in Canada assess different tax scenarios for their clients. The software allows users to analyze current tax situations, run test scenarios, and optimize tax strategies.
Episode Highlights
01:06: Jay Good, the CEO of Tax Template Sync, explains that Tax Templates is a software solution aimed at addressing the complex tax situations faced by professionals in the wealth management field, including financial planners, lawyers, insurance advisors, and tax specialists.
01:57: Jay explains that the genesis of the company was driven by the need to save time and improve efficiency.
02:23: While working in public practice, Jay constantly sought ways to be more efficient and identified opportunities to develop software solutions for the complex challenges faced by professionals in the wealth management industry.
02:51: Jay explains that they started building solutions one at a time, gradually expanding their suite of software solutions over the course of a decade. While they initially used Excel, they have now embarked on the journey of transitioning to a web-based environment to better support their clients, especially in light of the increased comfort with cloud technology resulting from the COVID-19 pandemic.
03:40: Jay explains that when assessing tax outcomes, it can be done from both a corporate and personal perspective. From a personal perspective, individuals can download tax tables from their websites to determine their marginal tax rate.
04:38: Jay highlights the importance of understanding the marginal tax rate and its impact on individuals' overall tax situation. He mentions that many people earning less than $50,000 or $100,000 may be subject to higher marginal tax rates than those in higher income brackets. The software helps individuals in these income ranges assess their specific situations, plan accordingly, and determine their marginal tax rate more accurately.
05:52: Jason explains that individuals at the lower end of the income spectrum may face high marginal tax rates due to clawbacks, such as the guaranteed income supplement, which effectively results in close to 70% taxation.
07:01: Jay explains that their software goes beyond running calculations by incorporating optimization calculations, adding another layer of complexity to their solutions.
07:51: Jay highlights that their program incorporates calculations related to transfer payments, deductions, and income to assist clients in optimizing their tax strategies and finding the most efficient solutions.
08:57: Jay discusses a scenario where a professional with a shareholder debit balance of $200,000 wants to find a tax-efficient way to withdraw that amount from the corporation using as few corporate cash dollars as possible.
11:14: Taxes can be perceived as both simple and complex, depending on individuals' level of understanding and experience.
11.38: Jason raises a concern about the perception of taxes being simple or complex. He mentions two categories of people: those who believe taxes are simple because they use tax software without fully understanding the complexities and those who recognize the complexity.
12:38: Long-term optimization poses a different challenge. Planning beyond a few years requires considering various factors such as clawbacks, retirement savings accounts (RSPs and TFSAs), the new FHSA, non-registered accounts, the presence of corporations, pensions, life insurance, and more. Bringing all these elements together, along with the complexities of the Income Tax Act, presents an enormous opportunity to provide value to clients.
14:08: Jay mentions that their focus for the long term is to amplify their optimization algorithms. They aim to extend their optimization capabilities beyond a year or two, considering factors such as optimization for couples, donation optimization, and pensions. By looking at these complex elements over a longer time horizon, they can assess the impact of actions like claiming the capital gains exemption and the alternative minimum tax (AMT).
16:59: Jay explains that there are two popular use cases for their software. The first is personal tax planning solutions, which are widely used by advisors working with individuals on personal tax matters. The second use case, though not specifically mentioned, can be inferred as corporate tax planning solutions.
18:22: The software developed is primarily used for personal tax planning and corporate tax planning with shareholders, says Jay.
19:38: The lack of software dedicated to anything outside of financial planning and investment in this industry is horrible.
24:01: Jay emphasizes the need for specialized software that goes beyond basic tax planning and integrates with other aspects of financial planning, such as investments, insurance, and estate planning.
29:43: Jay discusses the importance of simplifying the tax code and the challenges faced in finding professionals with expertise in tax and programming.
3 Key Points
Jason and Jay discuss the impact of government benefits and income testing on tax calculations. Jason mentions that in the US, these are referred to as phase-outs, where entitlements are based on income and may result in different calculations.
Jason shares his perspective on the challenges faced by business owners who often have surprise tax bills at the end of the year.
Jason and Jay discuss the use cases and value of software in the financial planning industry, particularly in the areas of personal tax planning and corporate tax planning with shareholders.
Tweetable Quotes
“Many advisors focus on corporate tax and personal tax, so that's where most users begin. They work with their clients to assess their tax situations and determine what deductions, credits, or planning strategies are available to optimize their tax outcomes.” – Jason
“The software aims to address both the total tax amount and the cash flow implications for clients.” - Jay
“Some people believe taxes are simple because they use tax software that handles basic individual slips, while others recognize the complexity and the potential knowledge gaps that exist.” – Jason
“There is a lot of time spent by me and my colleagues reading tax legislation, putting that tax legislation into an interface that's easier for others to understand and to keep it current.” - Jay
Resources Mentioned:
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