SOURCE: BMO Harris Bank Financial Advisors

March 28, 2014 08:00 ET

Eighty-Seven Percent of Minnesotans Surveyed Confident in Tax Planning: BMO Harris Financial Advisors Study

MINNEAPOLIS/ST. PAUL, MN--(Marketwired - Mar 28, 2014) -

  • The overwhelming majority are confident that they take advantage of all tax breaks, but most admit they are not tax smart when investing
  • Majority of those Minnesotans surveyed hire a professional to do their taxes
  • Of those expecting a refund for the 2013 tax year, close to half plan to save or invest the money

BMO Harris Financial Advisors today announced the results of a national tax study which found that the overwhelming majority of those Minnesotans surveyed (87 percent, versus 83 percent nationally) 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. Additionally, more than half (60 percent) hire a professional to prepare their tax returns.

Despite this sense of self-assurance, almost half (43 percent) admitted they are not knowledgeable about tax smart investment solutions 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:

  • Half understand how capital gains are taxed.
  • Only 45 percent of respondents understand how dividend income is treated from a tax perspective. 

"It's important to have an understanding of the available tax smart investment options in order to ensure you are getting the maximum return possible from your investments," said Pete Schmidt, Regional Sales Manager, BMO Harris Financial Advisors. "Understanding how taxes may impact investments can play a critical role in helping you reduce your overall tax burden."

A financial professional can assist in making an investment portfolio more tax efficient. For example, BMO Harris Financial Advisors works with clients to determine investment solutions which best fit their specific needs and goals. This may include reducing one's tax liability and transitioning assets to the next generation in a tax-efficient manner.

What are Minnesotans planning to do with their tax refunds this year?

The study also examined what those who expect a tax refund (nearly 80 percent) plan to do with the money:

  • Forty-four percent will save or invest.
  • Thirty-five percent plan to pay household bills and/or reduce their debt.
  • Nine percent will fund vacations or purchase leisure items.

"Even though people have different financial priorities and situations, it's heartening to see that a significant percentage of those who expect to receive a tax refund plan to save and/or invest at least a portion of it for the future," added Mr. Schmidt.

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.
  • Just under half (45 percent) of the respondents admitted they are not knowledgeable about tax-smart investment solutions designed to reduce their overall tax liability.
  • Just 44 percent understand how capital gains are taxed and only 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 will save and/or invest the money; 16 percent will fund vacations or the purchase of leisure items.

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

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.

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.

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