Getting Your Money’s Worth

Working with CPA Firm may likely pay off in the long run because they are thorough. Many tax offices can drop numbers in software. However, a CPA will analyze the situation to look for tax savings opportunities and help you plan for next year – in short, they become your trusted advisor.

There are several actions you can take to make working with a CPA more affordable:

• Build a Relationship: If you are comfortable with your CPA, stick with them. By working with the same CPA each year, they become familiar with your situation and can quickly spot discrepancies or big changes.
• Be Organized: Generally, CPAs charge by complexity, value, and time. If you have a lot of contributions to deduct, consider providing a simple spreadsheet with the donation total listed along with documentation. Or summarizing your business/farm income and expense numbers for the year in a clear format with totals by category. This assists the firm in keeping costs low.
• Don’t Make Assumptions: We have consulted on several occasions regarding common misconceptions in the law. Just a few noteworthy ones are:
  • If I sell my house there will be capital gains unless I reinvest the funds in a new house.
    Not true! Tax law generally allows for a $250,000 (single) or $500,000 (married) gain exclusion on a primary residence if you’ve occupied the property for at least two years (some variations may apply). Tax-free. No reinvested funds necessary.
  • We want to gift money to a child but are limited to $15,000 per year.
    Not true! Current laws allow for per-person gifting. This means a married couple gifting to a child and their spouse can reach $60,000 in gifts without triggering gift taxation. In addition to those amounts, grandchildren are also eligible for the per-person gifting.
• Consult your CPA in Making Decisions: Drafting a will is a great strategic planning tool for you and your beneficiaries. But often overlooked is the beneficiary designation on your life insurance, IRAs, and retirement plans; which will supersede the beneficiaries of a will. This may create confusion in your estate and may cause a lost opportunity to pass taxable income to tax-exempt charitable organizations upon your death.
• Don’t Lie to Your CPA: It’s like lying to your doctor, it only hurts you. Sometimes clients can be embarrassed to share information like gambling earnings or certain medical expenses. Your information is private and helps your CPA determine the best way to claim that expense or report those earnings.

We enjoy working with you through our ongoing partnership. Consider these tips and more to keep us efficient and maximize your value.