Monthly Archives: April 2016

Tax Season Procedures for Family Offices

Daniel Serrano
By Family Office

While the exertions of 2016’s Tax Season are still fresh in your mind, now is a good time to take stock of the year-end reporting procedures you recently followed. The sheer volume of work at that time of year can sometimes feel overwhelming. To assist you next year, we offer some ideas to help keep you organized and to simplify your review process. The goal is to stay on-track and in control.

We believe Financial Navigator’s built-in reports, guides and features allow you to more easily manage the recurring challenge of Tax Season, next year and thereafter, if you follow the checklist of action steps below:

Year-End Family Office Tax Procedures:

  1. Backup the Database – Make a backup copy of the entire .mdb database in the root FN directory, to ensure the safety of your data.
  2. Balancing of Data File – Set Financial Navigator (FN) to Test Mode by double clicking the FN logo on the opening screen, then hitting the keyboard key “T” and clicking OK to both modal pop-ups. Under the Utilities dropdown menu in FN, first run the Compact and Repair Database option, then run the Test & Correct Files option for All of the Above.  Doing so will eliminate any errors the system catches.
  3. Reconcile Accounts – Run the Reconciliation Statement under the File dropdown menu in all journals to speed up the system’s processing.
  4. Check FMV, Cost Basis, and Unrealized Gains – Run the Cost Basis Balance Sheet report to display all three of these values for easy viewing.
  5. Check Private Equity and other Long-Term Investments – Run the Private Equity Investment Analysis and Long-Term Investment reports to display all related assets at once.
  6. Check Balances of All Other Accounts – Make sure the balance of your Unrealized Gains/Losses is zero in the Cost Basis column of the Cost Basis Balance Sheet report.
  7. Check Capital Gains and Losses – Run the Income Statement report and compare gains/losses to the broker statements and the Schedule D – Capital Gains and Losses report.
  8. Check Income and Expense Accounts – Run the Income Statement report to compare dividends, interest, expenses, and other amounts to broker statements.
  9. Review Chart of Accounts and Qualifiers – Check to see that your Qualifiers and Account Tax Codes are consistent for all grouped accounts in the Chart of Accounts report.  
  10. Review Performance Reports – Review the Security Performance Summary, Security Return vs. Indexes, and Security Growth vs. Indexes reports and confirm that all investment returns, contributions, withdrawals, and unrealized gains/losses appear reasonable.
  11. Review Consolidated Statements – Run the Consolidating Summary Balance Sheet and the Income Statement reports for each family, to ensure categories are consistent across entities and that all Due To/From Affiliates, Trust Receipts/Distributions, and Contribution to IRA accounts self-eliminate to zero.
  12. Review Transfer Clearing Account balances – Search for non-zero amounts.

Before preparing the corporate tax documents, download the FN Reference Guide (available at the FN Support Center) and review the Tax Schedules, such as Form 1040 Summary and Schedules A through F (p. 293). See below a list of items that will improve the efficiency of running these reports:

  1. Review Chart of Accounts and Tax Codes: Get information on how making changes to the Chart of Accounts and to Account Tax Codes affect reports needed for tax purposes (p.35 and p.76).
  2. Review Qualifiers: See how making changes to Qualifiers can affect reports needed for tax purposes (p.299).
  3. Review Deferred Tax Rate: Find information on how to change the Deferred Tax Rate (p.286).
  4. Review reporting options for Tax Planning purposes: Discover how to best use the options for Budgets and for Projected Amounts in reports (p.299).

Information from the following reports can also be useful when preparing corporate tax documents:

  • 12 Month Income Statement
  • 12 Month Balance Sheet
  • 12 Month Cash Flows
  • Summary Income Statement
  • Summary Balance Sheet  
  • Summary Cash Flows
  • Summary Trial Balances

While last year’s tax season is still fresh in your mind, think about these procedures relative to the family office accounting work you did. Would following these procedures make your work go better? If so, make a commitment now to do a better job next year.

Don’t worry. We will remind you with the above list again before the next tax season starts. Look for our newsletter coming out just after the year-end of 2016.

As always, Happy Navigating!

Faris Masarweh
Business Development Associate  

Editor’s Note: For an in-depth checklist of other procedures, contact our support team by emailing

Further Tax Reading



Tax Schedule Reports
Simplify income tax preparation and gain insights for income tax planning. Transfer tax information directly to tax preparation software for a streamlined solution.