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Year after year it never fails that the age-old misconception about tax preparation rears its ugly head in the form of comments like “I want you to get me back as much as possible” or “Last year my tax guy let me deduct my dry cleaning expenses for my suits.”
The misconception I’m talking about is that tax preparation is some sort of black magic whereby CPAs have conspired against the general public to keep people from getting money back. WRONG. CPAs do not have it out for you, but we are bound to abide by certain rules and principles.
When you’re doing tax planning you’re trying to predicte your income and expenses for the next year and how much in taxes you’ll owe then. Then timing expenses to be paid at certain times and withholding the proper amounts so you don’t remember a surprise tax bill.
While I can’t give you tips on how to get more money back, I can share ways that can help your CPA help you prevent owing Uncle Sam money when tax time rolls around.
While there are even more ways to do year end tax planning and lower the taxes you owe, the one thing that remains constant no matter what kind of taxpayer you are is that you need to plan ahead. Once the tax year has already ended, you’ve lost virtually any flexibility available to you to manage your tax liability.