If you think tax planning is reserved for springtime, think again! Getting started early is always better, so that makes autumn a great time to look ahead. Before the holidays hit and your local accounting company gets swamped with tax prep, why not take some time to update them on what’s been going on in your world? Then you’ll be prepared for a strong start to the new year.
6 Reasons to Rethink Your Tax Planning
As a general rule, going through any major life change is a good reason to give your accountant a call. If you’ve navigated any of these events in the past year (or are still fine-tuning some of the details), you’ll want to be sure to tell your accountant.
1. Marital Status
Has your tax status changed? Depending on how you file, getting married can make a big difference with your taxes. You might have new deduction amounts, income limits, or even a marriage penalty to consider. It’s nice to understand these changes before you file your tax return so you can plan accordingly. Getting divorced will make this year’s taxes different too. Talking with your accountant can help you figure out how dividing your assets and managing child support will impact your tax planning.
2. Growing Family
Do you have a new child? Then you’ll be looking at a small tax break. Paying attention to how you file can help offset some of those new childcare expenses! Also note: Growing your family through adoption has its own tax credit.
3. Job Changes
Are you expecting a raise? It’s always nice to have your hard work acknowledged, but you’ll want to keep an eye on how your tax bracket might change. That could lead to a surprise tax hit. A quick discussion with your accountant can give you a better idea of what to expect. Accepting a new job offer can change your tax situation too. An onboarding benefit package might have its own taxes to pay.
4. Home Purchase
Did you make a move? Buying or selling a home will definitely impact your taxes. This is especially true for buying or selling investment properties. When you know a little more about how your financial situation will change, you can feel better about heading into tax season.
5. College Expenses
Have you checked your tax break options? Whether you’re making payments for your own college education or you’re helping to cover your child’s expenses, it’s a good idea to talk with your accountant about some budgeting tips. You might also qualify for some college tax breaks. Discussing your options with the American Opportunity Tax Credit or 529 plans can help you and your accountant get the best plan in place for your taxes.
6. Retirement Planning
Do you have a solid strategy in place? Everyone’s circumstances are different. Taking a closer look at your available cash and future earnings can help you prepare for the lifestyle you want. Working with your accountant can help give you some guidance, both for this year and years to come.
If you’re wondering what will happen with your tax requirements next year, please give NSO and Company a call at (317) 588-3131. We’re always happy to hear from new clients! Let’s schedule a time to talk so we can avoid tax surprises next year. A little prep now can help.