The obvious answer to the above question is, “When it’s time to get your taxes done,” and yes, you want your tax returns prepared correctly, but there are other times in the year when you may benefit from a meeting with your tax accountant.
A New Job
Starting a new job often means filling out a W4 and you want to make sure you’re taking the correct number of withholdings. If you have too little withheld from your paycheck, you could owe at tax time. If you have too much withheld, you’ll get a large refund, which feels good, but you could have had that money in your bank account during the year. A quick chat with your tax professional can position you for tax season.
A Side Job
Maybe you’ve been offered an independent contractor opportunity or perhaps you’ve decided to pick up some extra cash working a gig economy job. If taxes aren’t taken out of your pay ahead of time, you may end up owing federal, state, and/or local taxes. Your tax professional can calculate quarterly tax payments for you, help you stay in compliance with local tax laws, and let you know what expenses you should track. It could be the difference between a heartbreaking tax bill and a pleasant little refund.
Starting a New Business
Do you have that great idea or special talent people want to pay money for? Even if it’s something you do only on the weekends, the IRS, Pennsylvania, and Philadelphia still consider it a business. It’s a good idea to meet with a tax professional and find out if you need to register a fictitious name with the state, get a city business account number, or if it makes sense for you to incorporate. Consulting with a tax professional at the very start can save you trouble later and help you solidify the goals for your business.
A Change in Marital Status
It’s no surprise that divorce can cause financial headaches, but a new marriage can complicate things as well. It’s not unheard of for newlyweds to owe money on their taxes when in the past they both got refunds. Combined incomes might bump you up to a higher tax bracket. Asking a tax professional to look over your pay stubs and last year’s returns can help the honeymoon last a little longer.
Purchasing or Selling a House
Buying a home comes with a mountain of paperwork. Some of those papers you’ll need at tax time. Some of them you’ll need years later when you sell the home and must pay capital gains. It’s a good idea to check in with your accountant when you’re buying or selling a home to make sure you’re saving the paperwork you need to save and tracking the expenses you need to track.
Moving to a New Town
Even if you didn’t purchase or sell a house, moving to a new municipality can affect your tax liability since local tax laws, even within the same state, can vary. If you had to move for work, you may be able to claim some expenses on your returns. Your accountant will let you know if you need to close or open any tax accounts and what documents to save for tax time.
A Notice from the IRS or other Tax Agency
What do you do when you receive a letter from the IRS? One glimpse of those three dreaded initials might be enough to spike your anxiety. You can’t ignore it and yet you’d be surprised how often clients hand over an IRS notice dated from October when they give us their tax documents in February. Time may heal all wounds, but it only compounds tax issues. As soon as you receive a letter from a tax agency (federal, state, or local), send a copy to your tax accountant. They’ll let you know if immediate action is required or if it can wait. Soothe your anxiety by letting a tax professional take care of it for you.
Working with a tax professional who is in the office year-round means you don’t have to wait until January to address an issue or get advice. Schedule your appointment for a consult with Walter Moyer at The Bottom Line Inc. by going to https://calendly.com/thebottomline