A tax professional can be a great resource, not just during tax filing season

Wolters Kluwer Tax & Accounting looks at the taxpayer advantages of working with a tax & accounting professional.

What: The COVID-19 pandemic has been a useful reminder that tax issues are best addressed more frequently rather than just once per year at tax return preparation and filing time. We have had three rounds of Economic Impact Payments in 2020 and 2021 that need to be considered in determining the Recovery Rebate Credit on the tax return. In 2021, many taxpayers started receiving monthly advance Child Tax Credit payments which also factor into the calculation of the Child Tax Credit on the 2021 tax return. It has also long been the case that most of the planning to be done for a tax return due on April 15 has to be done during the prior year. 

Why: If the only time you worry about taxes is when you are gathering your documents together after the end of the year, you have probably already missed out on many opportunities to take advantage of the ways the tax laws permit you to reduce your taxes. The following are some of the advantages of turning your tax return preparation to a professional: 

• The tax laws are changing all the time. New provisions are enacted and others sunset. As your advisor, a tax professional can keep you up to date on tax law changes so you can take action to take advantage of those changes during the tax year 
• There are many tax deadlines throughout the year in addition to the tax return filing deadline. There may be estimated tax payments due four times a year. Businesses have payroll tax deadlines and possible personal liability for failure to remit payroll taxes to the Internal Revenue Service (IRS). For example, in 2021 taxpayers have had opportunities to opt-out of the advance Child Tax Credit. Having a tax professional as an advisor by your side and available to assist with those issues throughout the year can help avoid costly mistakes 
• A tax professional becomes familiar with your background and situation and can on his or her own initiative advise you of tax developments relevant to your personal situation in time to take appropriate action 
• Many common life situations come with tax issues that a tax professional can help address, including home ownership, starting and operating a business, renting real estate, planning for retirement, marriage and divorce, adopting a child, educating children, charitable giving, changing jobs, working in more than one state, caring for aging parents, foreign investments and business activity, investment gains and losses, or cryptocurrency transactions 

Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst, for Wolters Kluwer Tax & Accounting, can help discuss the issues taxpayers should consider when engaging with a tax & accounting professional.

PLEASE NOTE: These materials are designed to provide accurate and authoritative information in regard to the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering tax advice or accounting, legal, tax or other professional service.

Contact: To arrange an interview with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact Bart Lipinski.