It’s tax season.

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Which means two things:

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1️⃣ Borrowers are about to start asking you tax-related questions you’re not legally allowed to answer.

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2️⃣ You might be about to make a tax mistake that could quietly cost you thousands.

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Let’s talk about both.

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🚨 Mistake #1: The “LO Tax Advisor” Trap

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Every year, around this time, borrowers start hitting you with questions like:

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“Can I write off my mortgage points?”

“How will this new home affect my tax return?”

“I am renting my primary residence to buy a new primary”

(the last question is one where many LOs completely miss an opportunity to explain capital gains taxation on investment properties)

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Here’s what you can’t do: Give tax advice.

Here’s what you can do: Position yourself as the bridge to a trusted tax professional.

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Most LOs don’t realize that your borrower’s CPA or tax advisor could be your next referral partner.

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Think about it…

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Who do financially responsible homeowners listen to when making money moves?

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Their tax professionals and financial advisors (hopefully, lol). 

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Now, most of the time, you can certainly answer the basics like:

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“Where can I find my 1098 statement?”

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But, instead of just dodging any specific tax questions, flip the script:

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"That’s a great question, and while I’m not a tax expert, I work with some fantastic CPAs and tax pros who specialize in homeownership-related tax strategies.

Would you like a recommendation?”

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Boom.

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Now you’re:

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✅ Providing value without overstepping legal boundaries.

✅ Helping your borrower make an informed decision.

✅ Building relationships with tax pros who can send you referrals year-round.

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🚨 Mistake #2: Overpaying on YOUR Own Taxes

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Let’s talk about your money for a second.

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A lot of LOs -- especially those who had a strong Q1 -- are about to get slapped with a massive tax bill, especially the ones on a W2 without the proper tax withholding. 

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Why?

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Because they didn’t plan ahead and maximize deductions.

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A few key things to double-check:

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✔ Are you structured correctly? (S-corp vs. LLC vs. sole prop)

✔ Did you track all business expenses? (Marketing, coaching, software, etc.)

✔ Are you maximizing your retirement contributions?

✔ Are you setting aside enough for quarterly payments?

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Too many LOs act reactively regarding taxes -- just paying whatever the accountant tells them in April.

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Top-earning LOs? They plan proactively with a CPA who knows how to optimize for business owners.

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If you don’t have a CPA who specializes in self-employed professionals, now is the time to find one.

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Because the difference between tax strategy and just “filing taxes” could be five to six figures in extra cash in your pocket.

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So the takeaways here…

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1️⃣ Don’t give tax advice, give tax connections. 

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Build relationships with 2-3 Accountants who can refer business back to you.

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2️⃣ Don’t just file your taxes, optimize them. 

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Ensure you’re keeping more of what you earn by properly structuring and planning.

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Smart LOs don’t wait until April to think about taxes.

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They make moves now that keep more money in their pockets later.

Oh, and one last pro tip: this could be a great time to send a mass message to your entire closed database that you have great tax advisor contacts should any of them want one.

Continue to add value at EVERY touch point. 

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You got this.

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