What Your Tax Professional Needs to Know - Don't Keep Secrets!
Taxes can be a maze, but with a trusted tax professional by your side, you're not alone in the labyrinth. However, to ensure they guide you through the twists and turns effectively, there are some key pieces of information you shouldn't keep secret. Whether it's about your personal life or your business, here's what you need to share:
Personal Insights:
Life-Changing Events: From weddings to babies, relocations to retirements, and career shifts, these milestones are more than personal—they can have significant tax implications.
Education Plans: If you or your family members are headed to college, there might be valuable education-related tax credits or deductions waiting for you.
Dependent Details: If your dependents' situations change, whether due to age, residency, or divorce agreements, it can affect your tax situation. Keep your tax pro in the loop.
Business Insights:
First-Time Business Filing: If it's your maiden voyage in the world of business taxes, don't hesitate to inform your tax preparer. They can provide essential guidance and ensure compliance.
Experience Level: Even if your business has been running for a while but hasn't filed taxes, it's not too late. Ask your tax pro about amending prior year returns, which can go as far back as 2017 in some cases.
Planned Large Purchases: Major investments like buildings, vehicles, or equipment can have significant tax implications. Share your plans with your tax pro to optimize the tax treatment of these acquisitions.
Bookkeeping Details: Accuracy matters. Let your tax pro know if you're managing your business's books or if someone else is handling this vital aspect of financial reporting.
Partnerships: Entering into or dissolving partnerships can trigger changes in your business's tax situation. Keep your tax pro informed to ensure proper tax reporting.
Financial Disagreements: If financial disputes arise within your business, don't keep them under wraps. Your tax pro can help navigate these issues and ensure accurate tax reporting.
Now, let's talk about finding the right tax preparer. Consider these three essential factors:
Heart of a Teacher: Seek a tax professional who's willing to patiently explain, educate, and answer your questions. You don't need to become a tax expert, but you should grasp what's happening with your finances.
Clear Communication: Your tax preparer should communicate their strategies clearly, without overwhelming jargon. If their plan is a mystery, it might be time to explore other options.
Comfort and Trust: Trust your instincts. Your tax pro should be someone you feel comfortable discussing your financial life with—a partner you trust without hesitation.
Remember, your tax professional is your ally in navigating the tax labyrinth. Sharing essential information and choosing the right preparer can transform tax season from a daunting challenge into a productive partnership. Stay vigilant against tax scams, and remember, the IRS doesn't reach out to taxpayers via email, text, or social media for personal or financial information. Stay safe, stay informed, and conquer those taxes!
