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BMO Harris Financial Advisors Study: Ninety-Five Percent of Those Missourians Surveyed Are Confident in Tax Planning, but Many Are Not Tax Efficient When Investing

LEAWOOD, KS -- (Marketwired) -- 03/28/14 --


  • Two-thirds of those Missourians surveyed do their own taxes
  • Ninety-five percent are confident that they take full advantage of all tax breaks, but almost half admit to not being tax smart when investing
  • Of those expecting a refund for the 2013 tax year, almost forty percent plan to use the money to pay household bills and/or reduce their overall debt load

According to a study issued today by BMO Harris Financial Advisors (BHFA), 64 percent of those Missourians surveyed prepare their own tax returns (well above the national average of 48 percent) and almost all respondents surveyed in the Show-Me state (95 percent, also above the national average of 83 percent) are confident that their completed tax returns will take advantage of all of the tax deductions, tax credits or other tax savings that may be available to them.

However, despite this sense of confidence, 47 percent of those surveyed in Missouri admitted to not being knowledgeable about tax smart investment solutions that are designed to reduce their overall tax liability, including protecting their investments from a tax perspective and transitioning them in a tax efficient manner to the next generation. Further, the study found:

  • Under one-third (29 percent) understand how capital gains are taxed (well under the national average of 44 percent).
  • Just 43 percent of respondents understand how dividend income is treated from a tax perspective (slightly below the national average of 47 percent).

"With the April 15 filing deadline quickly approaching, it's reassuring to see that Missourians feel confident as they prepare their tax returns," said Tom Thornton, Regional Manager of Financial Advisory Services, BMO Harris Financial Advisors. "However, to maximize returns on your portfolio, it's also important to have a basic understanding on how investments are taxed. Being aware of the tax smart options that are available to you will help you make informed investing decisions."

Mr. Thornton noted that a financial professional can play a critical role in making an investment portfolio more tax efficient. For example, BMO Harris Financial Advisors work with clients to determine investment solutions which best fits their specific needs and goals. That may include reducing one's tax liability and transitioning assets to the next generation in a tax-efficient manner.

How Missourians plan to use their tax refunds

The study also examined what those who expect a tax refund plan to do with the money and found that:

  • Thirty-nine percent (compared to 42 percent nationally) will be using the money to cover household bills and/or reduce their debt load (credit card balances and other debt other than mortgage).
  • One-third (37 percent) will be saving and/or investing the money.
  • Nineteen percent have earmarked the money to cover home renovations.
  • Twelve percent will be using the money to fund vacations or purchase leisure items.
  • Twelve percent will be donating their tax refunds to charitable causes.
  • Seven percent have decided to allocate their refunds to pay down their mortgages.

"Since everyone's financial priorities and situations differ, it's great to see that those of us who are expecting a tax refund are looking to set it aside for the future by saving or investing the funds or using it to reduce personal debt," said Mr. Thornton.

Key National Findings

  • Forty-eight percent of those Americans surveyed are preparing their own tax returns.
  • The vast majority (83 percent) are confident that their completed tax return will take advantage of all tax breaks.
  • Half of the respondents admitted to not being knowledgeable about tax smart investment solutions that are designed to reduce their overall tax liability.
  • Just 44 percent understand how capital gains are taxed and 47 percent are familiar with how dividend income is treated from a tax perspective.
  • Forty-two percent of those Americans surveyed who anticipate getting a tax refund plan to use the money to pay household bills/reduce their debt load; 35 percent are going to save and/or invest the money; 16 percent will be funding vacations or the purchase of leisure items with their tax refunds.

The survey was conducted by Pollara with an online sample of 1,000 Americans 18 years of age and over, between March 7th and March 10th, 2014. A probability sample of this size would be accurate to +/- 3.1%, 19 times out of 20.

About BMO Harris Financial Advisors
BMO Harris Financial Advisors, Inc., offers a comprehensive range of investment advisory products that include financial planning strategies and estate planning strategies to meet the financial needs of high-net-worth clients. Offices are located throughout the U.S. Learn more at www.bmoharris.com/financialadvisors.

BMO Harris Financial Advisors(SM) is a trade name of BMO Harris Financial Advisors, Inc. Securities, investment advisory services and insurance products are offered through BMO Harris Financial Advisors, Inc. Member FINRA/SIPC. SEC-registered investment adviser. BMO Harris Financial Advisors, Inc. and BMO Harris Bank N.A. are affiliated companies. Securities and insurance products offered are: NOT A DEPOSIT - NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY - NOT GUARANTEED BY ANY BANK - MAY LOSE VALUE.

Estate planning requires legal assistance which BMO Harris Financial Advisors and its affiliates do not provide. Please consult with your legal advisor.

Add: United States Department of Treasury Regulation Circular 230 requires that we notify you that this information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Harris Financial Advisors and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.

Media Contact:
Carey Allen
carey.allen@bmo.com
480.558.6383

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