With the TCJA was passed on December 22, 2017, people worried their tax liability would increase because they could no longer itemize deductions they had itemized for years. This is where expert tax planners come in. When meeting with a tax consultant for the first time, you may discover there is a huge difference between expectations and reality.
MEETING LENGTH
People often think that meeting with a tax consultant will take at least two hours. However, the truth is, your consultation with a CPA will take only around 15 minutes. She only needs to gain an understanding of what has happened in your life financially during the prior tax year. All necessary documentation can be sent over e-mail at your convenience.
YOU ARE NOT UNDER SCRUTINY
One of the most common misconceptions about meeting with a tax consultant is you will be put under a microscope. This is not the case. You do not need to provide original receipts for every deduction you will be claiming. Nor do you need to print out PayPal or bank statements to document every penny of income, even if you do not have a 1099.
Remember, while you do not need to go to your tax consulting meeting with shoeboxes full of receipts, you should keep receipts for all business expenses. We recommend digitizing these receipts and organizing them by tax year on your computer. The IRS can come back and audit you for up to three years after you file your taxes, and they can extend this timeframe if they believe they have discovered a significant error.
“I CAN’T AFFORD A TAX ADVISOR”
Many people believe tax advisors cater exclusively to the rich. This could not be farther from the truth. While a tax advisor may cost you a few hundred dollars between the initial consultation and the rest of the work completed, it can save you thousands of dollars. Everyone who does not feel confident they cannot maximize their own tax savings should consult a professional.
TAX CONSULTANTS ARE NOT BUSINESS CONSULTANTS
The word “consultant” may erroneously lead some to believe you will be given advice on how to more efficiently run your business if you are a freelancer or small business owner. There are CPAs and other professionals who can give you business operation advice, but a professional tax planner specializes in reducing your tax liability or maximizing your tax refund.
YOU WILL NOT BE NICKLE-AND-DIMED
You may expect to walk into a tax consultation meeting and be asked dozens of questions ranging from medical procedures to whether you traveled and ate out for work. However, this is not the case. If you are a freelancer, review Freelancer Union’s ultimate list of deductions for freelancers. Then advise your tax planner of the deductions you qualify for this year. He can help you plan what you do this year, such as buying a new computer or contributing to an IRA to reduce your taxable income next year.
Remember, whether you are a freelancer or not, you can contribute up to $11,000 by the time taxes are due each year. The first $5,500 reduces your taxable income for the prior tax year. Anything over that, up to an additional $5,500, reduces your taxable income for this tax year. Also, it is almost always advantageous to deduct professional expenses, such as those you pay when you meet with a tax preparer or tax planner.
SCHEDULE YOUR INITIAL CONSULTATION TODAY
Meeting with a tax consultant is not an intimidating or time-consuming situation. In fact, it can take the weight of the world off your shoulders. A helpful, experiences tax planning professional can help you prepare now for next year. Contact us today to schedule your initial consultation or learn more about how we can help you plan your future.
