Individual Tax Planning

Individual tax planning comes down to a simple question. Would you rather have greater tax and financial certainty or reactively deal with surprises? We recommend planning based on life changes that can be predicted, and adjusting to unforeseen changes, so you can minimize the risk of an unnecessarily high tax bill.

Planning for Life Changes and Adapting to Unpredictable Events

As a general rule, if you can predict something, you can plan for it. This is why individual tax planning always begins with the question, “Are you expecting any major life changes in the next year?”

Predictable life changes could include:

Changing jobs
Retiring
Paying for college or going back to school
Starting a business
Moving
Buying a second home or rental property
Refinancing a mortgage
Getting married
Having a baby
Ending alimony payments (sending or receiving)
Having stock options vest
Receiving an inheritance

As part of our individual tax planning process, we look at previous tax returns, discuss potential life changes, gather information, prepare projections based on this data, and make recommendations for the year. For example, if you plan to start a consulting job, we can tell you approximately how much your quarterly estimated tax payments should be. If you owed the government taxes last year, we might suggest increasing your withholding elections.

Of course, you can’t predict every life change. If you lose a loved one, deal with a serious injury or illness, lose your job unexpectedly, get a divorce, or stumble upon a new job or business opportunity, any of these events could affect your taxes. It’s important to stay in touch with us during the year to discuss these life changes and update your tax plan if necessary.

Tracking Data that Can Affect Your Taxes and Maintaining Records

Our individual tax planning services also include making sure you understand exactly what data you need to track over the course of the year. This eliminates the headache and risk involved with backtracking at tax time and trying to gather a year’s worth of data. Due to changes in the new 2018 tax law, you might need to adjust your approach. We may recommend using technology to keep this information organized and accessible.

While you don’t need to keep tax records and related data forever, there are general rules of thumb for saving different types of information. For example, did you know the IRS has three years to decide if they’re going to audit your return? We’ll recommend what information you should keep and for how long.