Have you scheduled your midyear meeting with your tax accountant? Many American taxpayers only meet about their income taxes once per year. But this schedule often means many opportunities that ensure a smooth process and a lower tax bill have already passed by. So, what should you discuss with your accountant during a summer review? Here are a few of the most important.
1. Confirm Estimated Payments.
If you send in estimated payments regularly, such as on a quarterly basis or more, ensure that they have been correctly credited to your account with the tax agency. Most tax payments are automated, so errors and omissions are lower than in the past. But mistakes do still happen.
2. Verify Income and Expenses.
Are your income and expenses working out as you expected them to for the current year? If your income is trending higher, or you have an unexpected source of income, for instance, this may affect your tax credit eligibility or put you in a higher tax bracket. Similarly, fewer expenses may mean more taxable income to declare.
3. Reconcile Advance Credits.
Some modern tax credits, such as health insurance subsidies, are paid in advance throughout the year and then reconciled with income at the end of each year. However, if your projected income and expenses don't align with what you actually made, you may end up repaying some of this money. Or you may be receiving less in advance than you should be. Most people will check in the summer because it is a good time to check how correct the advance payments are.
4. Plan the Second Half.
Tax planning can help make sure you pay the lowest tax bill you have to. But most planning must be done in advance rather than next spring. At your midyear meeting, discuss events, sources of income, and purchases you're considering for the second half of the year. Your accountant can help you squeeze any tax savings available from them.
5. Organize Your Papers.
Do you have a lot of documentation to provide to your tax accountant? Then get a jump start on things like entering business expenses, tracking mileage, or organizing your receipts. For procrastinators, this additional deadline helps prevent a mad rush in April. Plus, activities in winter and spring are still fresh in your mind, so you're less likely to miss out on opportunities.
Could your tax preparation benefit from any of these midyear tasks? If so, make an appointment with a local accountant today. Don't have a professional tax accountant? Use this time to find one that will help you lower your taxes and keep them that way.
Share7 July 2021
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