Taxes are always stressful, whether youâ€™re filing them for yourself or for a small business. There are dozens of regulations to remember, deductions to take, and countless forms to fill out throughout the year to ensure your records are up-to-date. However hectic tax season is, working with an experienced financial advisor and accounting firm can help streamline your recordkeeping and tax filing year after year. Unfortunately, many people arenâ€™t sure when itâ€™s time to hire an experienced tax planning
specialist and we wanted to help. Here are a few simple signs that itâ€™s time to hire a tax planning expert to help you get the most out of your return.
You Have More Than One Job
These days, working more than one job is becoming increasingly normal, especially among younger generations. Though that extra income can help increase your savings and make your budget easier to bear, it can also make your tax situation more complicated. When not properly calculated, you may end up paying more in taxes than you expected. An experienced accountant will help you get the most out of your tax return, finding deductions you didnâ€™t know you qualified for. When combined with the help of an experienced tax planning specialist, youâ€™ll be able to keep more money in your pocket as your investments and savings will be tailored to help reduce your tax liability rather than adding to it.
Youâ€™re Saving for Retirement
Whether youâ€™ve opened an IRA on your own or are contributing to an employer-sponsored 401(k), saving for retirement
can change your tax liability. If youâ€™re not familiar with how each type of retirement account can impact how much youâ€™ll owe or save on your taxes, you need to speak with a tax planner. Theyâ€™ll be able to explain which accounts contribute to reducing your tax liability and help you identify ways to further reduce how much you owe at the end of the year. Best of all, with help from your financial planner, theyâ€™ll be able to help you develop a tax-saving strategy for your retirement accounts, letting you save more and pay less to the government over time.
Tax Credits are Confusing
Many people qualify for some type of tax credit, whether youâ€™re paying for your childâ€™s education or covering the costs of tuition for your continuing education. However, determining which tax credits you qualify for can be difficult, especially if youâ€™re earning a mid to high-level income each year. Accountants and tax planning specialists understand which credits can be applied to each specific situation legally. By working with a tax planner, youâ€™ll know youâ€™re taking the maximum number of available tax credits while still satisfying the legal requirements to avoid an audit.
Your Finances Have Grown Rapidly
Being thrust from one tax bracket into a higher one is proof that youâ€™re doing something right with your finances. However, it does mean that youâ€™ll need to find a way to reduce your tax liability as much as possible. Often people transitioning to a higher tax bracket end up paying more in taxes, often reducing their available income significantly. Letting a tax planning team work with your accountant will help you establish a strategy to save as much as possible on your taxes, further increasing your savings and available income at the end of the fiscal year.
Youâ€™ve Been Audited in the Past
Nothing increases stress around tax season like the fear of an audit. If you accidentally claimed too many deductions or tax credits in the past and were subjected to an audit from the IRS, youâ€™ll do almost anything to avoid it in the future. Working with a dedicated tax planning team in conjunction with your accountant will ensure that your finances and your return are as accurate as possible. Since the only deductions youâ€™ll take will be the ones youâ€™re qualified for, you wonâ€™t have to worry about the stress off an audit. Should the IRS need to look at your accounts, youâ€™ll have the peace of mind knowing that everything was handled properly while also having the backing of industry experts.
You Have Multiple Streams of Income
Investment earnings, interest on certain savings accounts, and other income earned throughout the year is subject to taxes, just like your salary. Understanding which withdrawals and contributions are tax-free or subject to standard federal and state taxes can be difficult. Working with a tax planning expert will help you better plan your investments to keep more money in your pocket rather than going to your annual tax liability. Youâ€™ll be able to make the most of your additional income for years to come, setting you and your family up for financial success.
You Have More Important Things to Do Than Comb Through Tax Law
Tax law is confusing at best and when youâ€™re trying to maximize your tax return while working a full-time job, and fitting in your active social life, you likely wonâ€™t have enough hours in the day to accomplish everything you need to do. Working with a CPA and a tax planner will let you free up your busy schedule so youâ€™ll have more time to do the things you love doing. Certified public accountants understand the ins and outs of tax law, no matter how complicated your tax situation may seem. What might take you hours to clarify will often only take them a few minutes. Best of all, you do not have to be present in the office when theyâ€™re preparing your return. Theyâ€™ll even be able to work with your tax planner to ensure that your investments are as optimized as possible. This allows you to keep more money in your pocket and gives you the freedom to spend your weekends relaxing rather than worrying about your taxes. Â
If youâ€™re looking for help managing your savings and planning for your retirement, contact Foxstone Financial today. Our in-house tax experts can help you find the best financial solutions to maximize your return on investments, whether youâ€™re just starting out or have been saving for years.