Tax Planning | What To Expect When You Meet With Your CPA

With the 2022 deadline just behind us, it may seem premature to start tax planning now, whether your 2022 return is on extension or you are looking ahead to 2023. However, it’s important to remember that tax law is changing at an unusually rapid pace, which means maximizing your benefits and minimizing your tax exposure may take some extra planning this year. 

The complexity of tax planning differs greatly by client and tax year, but all taxpayers need to consider their financial goals, potential tax benefits, and savings opportunities. With the Build Back Better Act stalled, a great deal of tax-related legislation remains in limbo. To ensure you receive the extra lead time needed to implement any changes, you should consider regrouping and scheduling a meeting with your CPA. Here’s what to expect when you meet with your CPA. 

Personal & Financial Goals

Tax planning can help you reach your financial goals, whether those goals are personal or business-related. Your CPA will go over your financial goals with you to help you strategize and uncover tax advantages. If one of your personal goals is to purchase a home in 2023, for example, your CPA can help you explore whether, based on your circumstances, it is prudent for you to show the most income for 2022. If it is not, they can help you focus on an expense strategy to minimize your 2022 tax burden.

Budgets, Forecasts, & Projections

Working with an up-to-date budget and accurate forecasts and projections are significant contributing factors to reaching your financial goals. These tools help you determine the financial viability of future financial endeavors and act as a roadmap as you work to reach your goals. Your CPA can work with you to maintain a balanced budget and produce forecasts based on a projection of income. 

Estimated Tax Payments

For some taxpayers, it often makes sense to use the prior year’s tax as a basis for their current year’s estimated income tax. For others, estimated tax may need to be calculated based on actual income every quarter. Your CPA will help you understand your options, so you can control your payments and decrease the likelihood of incurring underpayment penalties or diminishing cash reserves by overpaying. 

Self-Employment & Business Owner Concerns

When you are a business owner or self-employed, there are unique tax concerns to address. If you are self-employed, your primary goal may be to minimize taxable profit. When you meet with your CPA, they can assist you with maximizing deductions, such as those for your home office, vehicle, single-participant 401(k) contributions, or applicable health insurance premiums. Your CPA may revisit tax deductions, such as the Qualified Business Income Deduction, to ensure you are maximizing your available benefits. 

Investments and Capital Gains Transactions

While CPAs are not investment advisors, they understand the ins and outs of related tax consequences. Ahead of investing, your CPA can walk you through the tax advantages and disadvantages so that you can go into the transaction with your eyes wide open. When it is time to sell an asset, your CPA can help you strategize to minimize your capital gains tax liability. 

Retirement & Estate Planning

Whether you plan to retire soon or further on down the road, your CPA can incorporate retirement planning into your tax planning meeting. Your CPA may provide an analysis of your pension benefits or discuss whether you would benefit from converting an eligible retirement account to a ROTH IRA. As part of your estate plan, you and your CPA may discuss trust and charitable foundation creation, fiduciary tax and trust matters, or the tax implications of various wealth transfers. 

Contact Livingston & Haynes 

At L&H, we help individuals and their families meet their personal and business-related financial goals in the most tax-efficient manner. I provide tax planning, compliance, and consulting services so that my clients have the tools they need to avoid negative impacts and succeed. Contact me today to get started. 

by Debra Christensen, CPA

Debra Christensen, CPA, joined Livingston & Haynes, P.C. in December 1999, became a Partner in 2012, and became the Managing Partner of the Ware office in 2019. She provides comprehensive tax planning and compliance services to individuals. Debra also provides audit, tax, and business consulting services to a diverse clientele, including retail, manufacturing, small privately-held companies, and nonprofit organizations.