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© 2020 Brickley Wealth Management
Most high-income taxpayers have a CPA and a financial advisor — but rarely do those two professionals share the same picture of your finances in real time. Brickley Wealth Management breaks down where the coordination gap costs the most and what a truly integrated approach looks like.
Blog Post
by Steve Brickley, CPA

Your CPA and Financial Advisor Aren't Talking — and You Paid for It in April

Tax Planning
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Please see important disclosures at the end of this post.

If you wrote a larger-than-expected check to the IRS this April, you probably felt two things in sequence. First, the sting of the number itself. Then something harder to name — a vague sense that this shouldn't have happened. That someone, somewhere, should have seen this coming.

That instinct is correct. And it points to a structural problem that affects a surprisingly large number of high-income taxpayers: two qualified professionals managing two pieces of the same puzzle, with no one coordinating the picture.

Two Advisors, Two Silos

Here is how the relationship typically works. Your CPA prepares your tax return. They do it accurately, often brilliantly, and they send it to you in the spring. Your financial advisor manages your portfolio. They make sound decisions about asset allocation, risk, and long-term growth. Both are doing exactly what they were hired to do.

What neither is doing — in most cases — is talking to the other. Not in real time. Not in a way that connects your investment activity to your tax liability as it accumulates through the year.

The result is a coordination gap. Income arrives. Withholding doesn't keep pace. Quarterly estimates are set based on last year's numbers. The portfolio generates taxable events your CPA won't learn about until January. And by the time the picture comes together, it's April — and the only question left is how large the check will be.

This is not a failure of either professional individually. It is a failure of the system most people have in place, where tax and investment decisions live in separate conversations.

Where the Gap Costs the Most

The coordination gap is not the same for every client. It shows up differently depending on how income arrives and how financial decisions get made throughout the year. Four profiles, in particular, carry the highest exposure.

Equity compensation recipients. RSUs vest. Bonuses land in Q4. Stock options get exercised when the opportunity looks right. Each of these events creates ordinary income or capital gain that may not be reflected in your withholding — because your W-4 was set when your compensation looked simpler. Your financial advisor may know about the vesting schedule. Your CPA may not learn about the exercise until tax prep season. If the two aren't in the same conversation, the tax consequence of each event goes unplanned until it's too late to do anything about it.

Business owners. K-1 income is notoriously hard to anticipate. Partnership distributions, S-corporation flow-through, and year-end profit allocations can swing dramatically from one year to the next. A strong business year is good news — but if your estimated payments were calibrated to a more modest year, the tax bill in April reflects the gap. The business grew. The estimates didn't.

RMD recipients. Required minimum distributions from IRAs and other qualified accounts are, by definition, taxable income. The question is not whether taxes will be owed — it's whether they're being withheld, and whether the withholding amount is calibrated to your actual tax rate in the context of your other income for the year. Many retirees choose minimal or no withholding on their RMDs, pay quarterly estimates instead, and find that the interaction between RMD income, Social Security, investment distributions, and potential portfolio capital gains pushes them into a higher bracket than anticipated.

Trust income recipients. Trusts that distribute income to beneficiaries pass that income's tax character along with it — ordinary income, qualified dividends, capital gains. Beneficiaries often receive a Schedule K-1 long after the income was distributed, and well after any opportunity to adjust estimated payments. The timing mismatch between when trust income flows and when the tax obligation is understood is one of the more quietly expensive coordination failures we see.

What Coordination Actually Looks Like

Proactive tax planning does not begin in March when the documents arrive. It begins when the tax return is filed — which is the moment when the most complete picture of last year's liability exists, and the best starting point for projecting the year ahead.

At Brickley & Company CPA Inc., completing a tax return triggers a forward-looking projection for the coming year. That projection incorporates the prior year's return as a baseline, adjusts for what we know is coming — vesting events, planned distributions, changes in business income, RMD amounts — and produces an estimated liability for the year ahead. From there, the planning conversation becomes specific: how much needs to be paid, in which quarters, and from which sources.

That last question — where does the money come from — is where investment management and tax planning meet most directly. Federal estimated tax payments are due on a fixed quarterly schedule. For 2026, those dates are April 15, June 16, September 15, and January 15, 2027. Underpayment carries a penalty currently calculated at 7% annualized, compounded daily, assessed separately for each quarter. The cash to meet those obligations has to exist and be accessible when each deadline arrives.

For clients with the right integrated setup, payment can be arranged directly from an investment account, from a banking account, through adjusted withholding on wages, or through withholding on IRA distributions and RMDs. Each approach has different implications for cash flow, tax efficiency, and investment continuity — and the right choice depends on the full picture of a client's financial situation. That analysis only happens when the advisor and the CPA are working from the same information.

There is also a technical planning layer worth understanding. For high-income taxpayers — those with prior-year adjusted gross income above $150,000 — the IRS safe harbor requires estimated payments equal to 110% of the prior year's tax liability, not 100%. This distinction is frequently overlooked by people whose income has grown year over year. Meeting last year's liability is not enough to avoid underpayment penalties if your income crossed that threshold. A well-coordinated plan accounts for this before the first quarterly payment goes out, not after the return is filed.

The Conversation That Should Be Happening

The professionals managing your taxes and your investments are, in most cases, working with incomplete information about each other's decisions. Your CPA may not know about portfolio rebalancing that generated capital gains in October. Your financial advisor may not know your effective tax rate, or whether an additional distribution would push you across a bracket threshold. Neither may be tracking the quarterly cadence of your estimated tax payments against your real-time liability as the year unfolds.

That coordination — connecting the tax return, the forward projection, the investment decisions, and the cash planning for estimated payments — is not a service most people have. It is, however, the service that prevents April from being a surprise.

If you found yourself writing an unexpected check this year and wondering why no one flagged it sooner, we'd be glad to walk through what a more integrated approach might look like for your situation.

Why do high-income taxpayers often owe more than expected at tax time despite working with both a CPA and a financial advisor?

In most cases, it comes down to a coordination gap — CPAs and financial advisors are typically working in separate silos, without real-time visibility into each other's decisions. Investment activity, equity compensation events, and portfolio rebalancing can all generate tax liability that isn't accounted for until it's too late to do anything about it. When tax planning and investment management share the same information throughout the year, that kind of April surprise becomes far less common.

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Brickley Wealth Management is a Registered Investment Adviser*. Advisory services are offered only to clients or prospective clients where Brickley Wealth Management and its representatives are properly licensed or exempt from licensure.

The information provided is for informational purposes only and is not intended as investment, tax, or legal advice. The content is based on sources believed to be reliable, and reasonable due diligence is conducted; however, accuracy and completeness cannot be guaranteed and information is subject to change without notice. Past performance is no guarantee of future returns. Investing involves risk, including possible loss of principal.

Readers should carefully consider their own investment objectives, financial situation, and risk tolerance before making any investment decision, and should not rely solely on any communication, chart, or illustration as the basis for action. No investment or tax advice is provided unless a client service agreement is in place with Brickley Wealth Management or Brickley & Company.

Brickley Wealth Management does not provide legal advice. Please consult your investment, tax, or legal professional regarding your individual circumstances. For additional information about our firm, our services, and our advisers, please refer to our latest Form ADV, Part 2 Brochures, and Client Relationship Summary. Our Privacy Notice is also available for review.

*Please note that the term "registered investment adviser" and description of our firm and/or our associates as "registered" does not imply a certain level of skill or training.

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Key Financial Terms 
Related to this Post:

This is some text inside of a div block.

Quarterly Tax Estimates

Periodic tax payments made by self-employed individuals or those with significant non-wage income.
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Restricted Stock Unit (RSU)

Restricted Stock Unit, a form of employee compensation involving company stock that vests over time.
This is some text inside of a div block.

Adjusted Gross Income (AGI)

Adjusted Gross Income, your total income minus certain deductions. Used to determine eligibility for tax deductions and credits.
This is some text inside of a div block.

Capital Gains Tax

Capital Gains Tax: The tax on the profit from the sale of assets like stocks or real estate.

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Contact@brickleywealth.com
(650) 638-0111

Brickley Wealth Management is a Registered Investment Adviser*. Advisory services are offered only to clients or prospective clients where Brickley Wealth Management and its representatives are properly licensed or exempt from licensure.

The information provided is for informational purposes only and is not intended as investment, tax, or legal advice. The content is based on sources believed to be reliable, and reasonable due diligence is conducted; however, accuracy and completeness cannot be guaranteed and information is subject to change without notice. Past performance is no guarantee of future returns. Investing involves risk, including possible loss of principal.

Readers should carefully consider their own investment objectives, financial situation, and risk tolerance before making any investment decision, and should not rely solely on any communication, chart, or illustration as the basis for action. No investment or tax advice is provided unless a client service agreement is in place with Brickley Wealth Management or Brickley & Company.

Brickley Wealth Management does not provide legal advice. Please consult your investment, tax, or legal professional regarding your individual circumstances. For additional information about our firm, our services, and our advisers, please refer to our latest Form ADV, Part 2 Brochures, and Client Relationship Summary. Our Privacy Notice is also available for review.

*Please note that the term "registered investment adviser" and description of our firm and/or our associates as "registered" does not imply a certain level of skill or training.

2020 Brickley Wealth Management. All rights reserved.

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