Things To Let Your Accountant Know

Staying in close communication with your accountant can save you time, money, and stress. Here are some key life events and financial changes that you should share with your accountant to avoid unexpected taxes and penalties and not miss out on tax saving opportunities.  

1. Job Changes or Significant Wage Shifts 

If you’ve changed jobs or have a dramatic shift in wages (+/- 10%), it is important to inform your accountant. Changes in W2 wages can impact your tax bracket and may require adjustments to your withholdings. A quick email or phone call can help you evaluate if all is in order during this transition. 

2. Selling Rental or Investment Property 

Selling a rental or investment property can come with significant tax implications. We can help evaluate any associated capital gains/losses associated with the transaction and offer valuable tax planning suggestions. 

3. Moving Your Primary Residence 

While this one may seem straightforward, notifying your accountant of a change in your primary address is important. We sometimes use snail mail correspondence, and without your current address, you may miss important mailings from our firm. 

4. Welcoming a New Child  

Things To Let Your Accountant Know

Whether you have a new child or adopt, letting your accountant know is essential. There are numerous tax benefits available such as child tax credits, dependent care tax benefits, 529 plans, etc. Let us help you plan for the new addition to your family.

5. Planning for Retirement 

If you are planning to retire or have retired recently, adequate tax planning is crucial for financial success in your golden years. Informing your accountant of this change allows them to help you develop a plan that ensures your retirement funds are optimized.  

6. Making Large Gifts 

The IRS allows individuals to give away a specific amount of assets or property each year tax-free. For 2024, the annual gift tax exclusion is $18,000, meaning a person can give up to $18,000 to as many people as he or she wants without triggering a gift tax implication. Contact us before a large gift is made so that we may advise you on an optimal strategy.  

7. Generating Significant Self-Employment Earnings 

Being a contract worker (receiving a 1099-NEC) offers many tax saving benefits, but it also means paying quarterly estimated taxes. Planning the deductions available and the taxes owed will save you time and money. Let us help you be proactive and plan your tax strategy throughout the year.  

8. Purchasing Marketplace Health Insurance 

If you obtained Marketplace coverage during the year it is important to let your accountant know, especially if you are receiving an advanced payment of the premium tax credit. Your cost for Marketplace health insurance is based on the income you file on your tax return. Your reported income also determines your eligibility for the tax credits associated with Marketplace health coverage. If there is a difference between the amount of advanced tax credit you receive and the amount you actually qualify for based on your income levels, it will impact your refund or the amount of taxes you may owe. 

9. Create a New Business or Obtain an Employee Identification Number (EIN) for an Existing Business 

Let your accountant know if you have started business operations so that they can assist you with any initial disclosures that may need to be made. By obtaining an EIN, the business is telling the IRS of its existence so the number will need to be disclosed on any associated tax filings.  

It can be difficult to know exactly how these changes impact your financial situation. By keeping your accountant informed about these life changes and financial shifts, you can ensure you are taking advantage of all available benefits. Don’t hesitate to reach out whenever you experience a change in your financial situation.