How Financial Coaching Can Help You with Tax Preparation

Dealing with taxes every year is challenging, especially when you do not have any preparation before tax season comes around. When I started managing my finances for the first time, I thought I could manage everything properly. But when tax season was knocking at the door, I became confused thinking how to move forward. I was concerned about overlooking deductions, making sure everything was filled correctly, and the overall anxiety that comes with organizing money. 

However, things took a different direction when I started working with financial coaching. They made tax preparation easier and also showed me the best way to manage my finances. It has really transformed everything that I never expected. And I can't wait to share how financial coaching can help you with tax preparation too.

What to expect from a financial coaching

Most individuals do not understand what services they are supposed to get from financial coaching. Rather, they are confused about the job responsibilities of a financial advisor and financial coach. This is exactly why you should know about the process of financial coaching and what services they usually offer to their clients.

Coaching process

The process of financial coaching always focuses on the money management approach of the clients, in a step-by-step manner. The steps that financial coaching follows to serve their clients are given below:

• Understanding the clients: In the initial phase, the coach uses some resources like forms or visuals to understand the client's financial situation. 

• Determining client’s objective: Coaches determine the personal and financial goals of the clients by asking them various questions and using some activities.

• Identifying financial complications: They investigate the client’s overall financial situation using reports and ratings to find out what financial challenges the client is facing. 

• Setting target: The client and financial coach together set goals and discuss how to stay organized before the tax season.

• Figuring out clients’ priorities: The coach helps clients understand which goal is most important and how to focus on the goal. 

• Providing knowledge: Financial coaches provide access to various helpful resources like study materials and online learning opportunities to the clients. These are important to help improve their financial knowledge.

• Providing assistance: The coach provides all kinds of support to encourage the clients and make sure that they are staying on track. 

• Assessing progress: The coach keeps progress reports of the clients and talks with them to evaluate their progress over time. 

Types of services offered by the coaching

Financial coaching offers a variety of services intending to assist people to manage their financial resources properly. Personalized assistance is the service that financial coaches commonly offer to their clients. This type of support involves the coach working directly with the clients, typically via the use of phone calls or emails. 

Coaches help to establish their financial goals, develop a budget plan, or improve credit ratings. Moreover, some coaches offer educational resources like written materials or courses to their clients. And a few of them even provide individualized financial plans that are suited to clients’ requirements. On top of that, certain services include follow-up sessions to bring some changes to the initial plan as needed. 

Financial coaching fees and packages

A lot of coaches plan to talk with their clients every month or three months. There are some financial coaching services available that charge based on hours. Similarly, others charge according to their specific particular targets such as making a budget plan or developing clients’ credit scores. In the beginning, new clients usually get three coaching calls each month at a fee of $1,750. This involves providing clients with email support and helping them establish a strong financial basis. 

After that, clients have the option of limiting their monthly call count to two calls for a cost of $1,200. This is a cheaper alternative that still offers the necessary support. Financial coaching services do not maintain any long-term contracts. That means clients can withdraw their subscription anytime without extra fees. 

• Note: Financial coaches do not provide any investment advice unless they have authorization to do so. 

How can a financial coach help you with tax preparation?

Financial coaches assess and evaluate all parts of a client's financial life and provide guidance on his/her spending habits and targets. They help their clients in the following ways to prepare for taxes. 

• Reducing tax-associated stress: Financial coaches understand your financial situation and guide you on what to do during tax season. This will make you stress-free and confident about the process. 

• Getting recommendations for free services: According to the referrals of financial coaches, you can connect with no-cost tax preparation services. IRS-certified tax preparers will provide you with such services and help you save more money. 

• Developing financial knowledge: They can educate you about taxes and better management of your finances. Then, you can make smart financial decisions throughout the year, not even during the tax season.

• Understanding your options: They will help you find the best free tax filing options, ensuring you select one that is truly free and trustworthy. As a result, you don't have to pay any hidden fees. They can also inform you about additional tax preparation sites like cash rewards and saving products. These can help you make the best use of your tax refund. 

• Encouraging to focus on the long-term goal: Most people only focus on their current needs without saving money for the upcoming needs. Financial coaches always encourage clients to plan for the future to improve their financial stability. 

• Organizing documents: A financial coach can help you collect and organize financial documents, so that you can prepare for upcoming taxes easily. 

• Bypassing expensive tax errors: Making errors in your tax returns can lead to penalties or charge more money. A financial coach can examine your documents and assist you in ensuring that all the tax records are accurate and reliable. 

• Getting prepared for future tax obligations: A financial coach can guide you about how to organize your money, property, and business to reduce tax liabilities, showing saving strategies and investment options. 

• Staying updated: Financial coaches can help you stay informed about the latest tax rules including free online tax filing options. 

Importance of financial coaching 

People involved in employment or business, feel devastated most of the time while handling all the financial decisions for different situations. Enrolling in financial coaching can help them make better decisions from saving for the future to managing debt.

• Preparing a budget plan: You will learn certain skills through financial coaching. This involves creating a budget, keeping track of your expenses, and better managing your income. 

• Getting support with taxes: Coaches provide free services on tax related matters like organizing the documents and better utilization of tax benefits.

• Minimizing debt: They can show you the pathways of reducing debt and improving your credit scores. 

• Improving personalized plans: If you are starting your financial journey or dealing with any specific issues, financial coaching services are always there to help you. It is important for people who are struggling to manage disability benefits, ensuring individualized support. 

• Ensuring employee benefits: Consulting with financial coaches leads to a supportive work environment for employees, ensuring security about their finances. 

• Interpreting complex financial data: Financial coaches observe the overall situation of their clients’ financial health and figure out where they might lose money. They also help the clients understand the importance of planning for taxes early to avoid unforeseen circumstances. 

Wrapping up: How are financial coaches different from financial advisors?

Financial coaches mainly help people set and reach their financial targets, but they do not provide any specific product related advice. They help anyone who needs financial advice including tax preparation or anything related to it.  On the other hand, financial advisors only work with individuals who have notable assets. So, if you are struggling with tax preparation, you should enroll in a financial coaching program to enhance your knowledge on taxes. 

Throughout this conversation, I have discussed how a financial coach can help you with tax preparation. You can share this discussion with anyone who wants to get prepared for taxes earlier. And if you have any queries about financial coaching, comment below. I will respond as soon as possible.