Why tax preparers are essential beyond tax season

[UNITED STATES] Gone are the days when tax preparers were only relevant during the frantic weeks leading up to April 15th. In today's complex financial landscape, tax professionals have evolved into year-round advisors, offering invaluable guidance that extends far beyond simply filing your annual tax return. This shift in role reflects the increasing complexity of tax laws and the growing recognition that effective tax planning is a continuous process.

Why Year-Round Tax Planning Matters

Tax planning isn't a one-time event; it's an ongoing strategy that can significantly impact your financial health. By working with a tax preparer throughout the year, you can:

• Stay ahead of tax law changes
• Identify tax-saving opportunities as they arise
• Make informed financial decisions with tax implications in mind

"Tax planning should be a year-round process," says Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Service. "Life changes, business decisions, and investment choices all have tax consequences that are best addressed proactively rather than reactively."

The Benefits of Ongoing Tax Professional Relationships

Proactive Tax Strategy Development

Working with a tax preparer year-round allows for the development of proactive tax strategies tailored to your specific financial situation. This approach can lead to substantial tax savings and help you achieve your long-term financial goals more efficiently.

Timely Response to Life Changes

Life events such as marriage, divorce, having children, or changing jobs can have significant tax implications. A tax preparer can help you navigate these changes in real-time, ensuring you're making tax-efficient decisions throughout the year.

Optimized Investment Decisions

Tax professionals can provide guidance on tax-efficient investment strategies, such as tax-loss harvesting or choosing investments that align with your tax situation. This expertise can help maximize your after-tax returns and build wealth more effectively.

Key Areas Where Tax Preparers Add Value Year-Round

Business Tax Planning

For business owners, tax planning is a crucial aspect of financial management. A tax preparer can assist with:

• Structuring your business for tax efficiency
• Planning for quarterly estimated tax payments
• Identifying deductible business expenses
• Navigating complex business tax credits

"Business owners who work with their tax professionals throughout the year are better positioned to take advantage of tax-saving opportunities and avoid costly mistakes," explains Lisa Greene-Lewis, CPA and tax expert for TurboTax.

Estate Planning and Wealth Transfer

Tax preparers play a vital role in estate planning and wealth transfer strategies. They can help you:

• Develop strategies to minimize estate taxes
• Plan for efficient wealth transfer to heirs
• Utilize gift tax exemptions effectively
• Structure trusts and other estate planning vehicles

Retirement Planning

Effective retirement planning requires a deep understanding of tax implications. Your tax preparer can assist with:

• Choosing between traditional and Roth retirement accounts
• Planning required minimum distributions (RMDs)
• Developing tax-efficient withdrawal strategies in retirement
• Maximizing tax-advantaged savings opportunities

How to Make the Most of Your Tax Preparer Relationship

To fully benefit from year-round tax planning, consider the following strategies:

Schedule regular check-ins: Set up quarterly meetings with your tax preparer to review your financial situation and discuss any changes or upcoming decisions.

Keep thorough records: Maintain organized documentation of your income, expenses, and life events throughout the year to facilitate more effective tax planning.

Communicate proactively: Inform your tax preparer about significant financial decisions or life changes before they occur to receive timely advice.

Leverage technology: Many tax preparers offer secure portals or apps for easy document sharing and communication throughout the year.

Ask questions: Don't hesitate to reach out to your tax preparer with questions or concerns as they arise – that's what they're there for!

The Impact of Recent Tax Law Changes

Recent years have seen significant changes to tax laws, making the role of tax preparers even more crucial. The Tax Cuts and Jobs Act of 2017 and subsequent legislation have introduced new complexities and opportunities that require ongoing attention.

"With the ever-changing tax landscape, it's more important than ever to work with a tax professional who stays current on tax law changes and can help you navigate their impact on your specific situation," advises Alison Flores, principal tax research analyst at The Tax Institute at H&R Block.

Preparing for Tax Season: A Year-Round Endeavor

While tax season may seem far away for much of the year, preparing for it is an ongoing process. By working with your tax preparer throughout the year, you can:

• Gather and organize tax documents systematically
• Address potential issues before they become problems
• Take advantage of tax-saving opportunities as they arise
• Reduce stress and avoid last-minute scrambling

The Role of Technology in Year-Round Tax Planning

Advancements in technology have made it easier than ever to engage in year-round tax planning. Many tax preparers now offer:

• Secure online portals for document sharing and communication
• Mobile apps for tracking expenses and uploading receipts
• Integration with financial management software for real-time tax projections
• Virtual meeting options for convenient consultations

These tools facilitate ongoing collaboration between you and your tax preparer, making it easier to stay on top of your tax situation throughout the year.

Choosing the Right Tax Preparer for Year-Round Support

When selecting a tax preparer for ongoing support, consider the following factors:

• Credentials and experience in your specific areas of need
• Availability for year-round consultations
• Proactive communication style
• Technology offerings for seamless collaboration
• Compatibility with your financial goals and values

"Finding the right tax preparer is about more than just credentials," says Jaime Eckels, CFP, partner and senior client advisor at Plante Moran Financial Advisors. "Look for someone who takes the time to understand your unique situation and is committed to helping you achieve your long-term financial goals."

Working with a tax preparer isn't just for tax season – it's a year-round partnership that can significantly impact your financial well-being. By engaging in ongoing tax planning, you can make more informed financial decisions, take advantage of tax-saving opportunities as they arise, and work towards your long-term financial goals more effectively.

As tax laws continue to evolve and financial landscapes become increasingly complex, the value of year-round tax planning becomes even more apparent. By viewing your tax preparer as a trusted advisor rather than a seasonal necessity, you can unlock the full potential of this professional relationship and take control of your financial future.