Talk Strategy with Your CPA
While it may just seem like 2021 started, in reality we're nearly in the fourth quarter which means tax season is right around the corner. 2021 was a big year for professional and financial changes and while we all know what we need to have ready for our CPA to file taxes, now is a great time to sit down and talk strategy. In the last final months of the year, you can make tweaks critical to your income and expenses which can wind up saving you thousands in the next year. But what kind of information can you have ready at hand to make sure that the time you spend with your CPA is productive? Here are my top 3:
1) Personal Financial Statements: You could gather statements from your bank, retirement accounts, and other investments but then you’ll be spending time with your CPA on information compiling instead of strategizing. Your personal financial statement will show your CPA a summary of your overall financial health. It is a breakdown of all your assets (i.e. funds held in checking and savings accounts, retirement account balances, trading accounts, and real estate) minus liabilities (i.e. debts, personal loans, credit cards, student loans, unpaid taxes, and mortgages) and ultimately tell you your personal net worth.
2) Tax Owing Projections: This is a big one. Find your most recent paystub for yourself and your spouse, if filing jointly, and annualize what you are paying for the rest of the year. Likewise, if you own a business, you’ll want to run a P&L and annualize it out to the end of the year. This will give you a rough idea of how much you might owe at the end of the year and will be a great launching pad for the conversation with your CPA.
3) Investment Activity Review: If you are an active investor, there can be a lot to consider as we near the end of the year. You’re going to want to give your CPA a clear picture of your investment activity over the course of the year. We recommend getting your Q3 statements and projecting out your activity for the remainder of the year. Equally important, if you are working with an investment advisor you should find out if there has been any other gain from harvesting capital losses.
Danielle Holden
Family Office Advisor
This is just the start of information and reports you could gather together to ensure that when you sit down with your CPA, you’re spending the time effectively talking about strategy. You could spend time putting together all this information on your own, or let us do it for you!
Reach out to me at dholden@breakawayadvising.com to learn more about my upcoming promotion “Get Ready to Talk Strategy with Your CPA.”