6 Questions You Should Be Asking Your CPA This Time Of Year

With 2019 fast approaching, it will soon be time to file your taxes for 2018. There are specific, important questions that you should be asking your CPA in preparing for the 2019 Tax Season. Knowing the right questions to ask will not only help your CPA understand your needs, it will also help you to prepare for your specific tax scenario.

Now is the best time to ask these questions, because you still have time make adjustments.

How different will my taxes be in 2019 because of the new tax laws?
At the end of 2017, the news was all abuzz with the politics and implications of the new tax laws. There were major changes to the tax rates and brackets, exemptions, allowable deductions, and tax credits. Last December, we covered this in a pretty comprehensive, easy to read blog post, that you can find HERE.

Should I change my withholdings?
This is a great question to ask because it is affected by the current circumstances of your life. For example, if you have a life changing event such as marriage or a child, it might be a good time to change your withholdings. You may want to withhold more from your last few checks so that you are not stuck with a huge tax bill. On the other hand, you may find that you’ve been withholding too much, and it could be a good time to make an adjustment so that you can take home a little extra money in time for the holidays! Using the current Form W4, you can enter a number of allowances which is used to determine how much to withhold based on your salary and pay frequency. Alternatively, you can enter a fixed dollar amount to be withheld or a combination of the two options.

Should I adjust my estimated taxes?
Many people who are obligated to make estimated tax payments (i.e., the self-employed, sub-contractors, etc), determine the quarterly payment amounts early in the tax year. As the year comes to an end, you may find that the bases for the estimates have changed – you made more money than expected or incurred more expenses than planned. Now is a good time to review your situation to determine if you should adjust your last quarterly payment, which is due January 15, 2019.

Should I boost my contributions to my 401(K)?
This is another great question. To lower your tax bill, you can contribute to a traditional retirement account such as a 401(K) or an IRA. If you haven’t already maxed out the contribution limits of $18,000 or $5500 to your 401(K) and IRA, respectively, then you should boost your contributions by the end of the year. On the flip side, if lowering your 2018 tax bill is not the primary focus, and you want consider a long-term strategy, read our blog about Roth IRAs and Roth 401(K) HERE.

I had a life changing event. How is this going to affect my taxes?
In addition to the new tax laws, life changing events such as getting married or having a child can greatly impact your taxes. With this in mind, now is a good time to talk to your CPA to not only see how your taxes will be impacted, but also to understand what sort of documents you should be gathering and be looking out for in the mail.

What sort of documents should I be gathering?
Most people get their tax forms the first week of February, with W2s and certain 1099s due to be sent out by January 31. While you wait for those forms, however, you can be collecting other documents in preparation for filing. You may want to have a folder in which you collect important documents such as daycare receipts, property taxes, bank statements, expense receipts, etc. This is particularly important if you’re self-employed and haven’t been keeping good records of your income and expenses.

Of course you should ask as many more questions as you need to feel prepared for the new year, but we hope these questions help to get the conversation flowing.

Written by Desnoyers CPA

Desnoyers CPA

Known for her friendly, outgoing nature and her rare talent for financial foresight, Lydia Desnoyers has been serving individuals and small businesses in Florida since 2010. After earning her Master’s Degree in Accounting from Nova Southeastern University and her Bachelor’s Degree in Accounting from Florida State University, she became a Certified Public Accountant and a Certified Fraud Examiner.

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