3 Reasons to Sit Down With Your Accountant in December
KEY POINTS
- The end of the year is a good time to eke out some last-minute tax savings.
- Meeting with your accountant could also spare you the stress of underpaying the IRS or struggling to complete your 2022 return.
It pays to make that appointment.
We've reached the time of year when people are deep into holiday mode. And so if your thoughts are largely centered on shopping lists, holiday dinner plans, and late December travel, you're in good company.
But while it's easy to get wrapped up in the holidays in December, it's also a good month to have a meeting with your accountant. Here are a few good reasons to sit down with your go-to tax professional before 2022 comes to an end.
1. You're self-employed and want to reconcile your final estimated tax payment
If you're self-employed, you don't have taxes taken out of your wages. That means it's on you to pay taxes to the IRS on a quarterly basis.
The final quarterly tax payment for 2022 is due on Jan. 17, 2023. And so now's the time to get your records in order and calculate that payment. The more accurate you are, the less of a hassle you might encounter when you file your 2022 tax return in 2023.
But calculating your estimated tax payments can be difficult. That's because it's not just earnings from your work that need to go into that number. Rather, you should be accounting for all of your income, including interest you earn in your savings account and gains in your brokerage account. And so it pays to sit down with an accountant and have a professional crunch those numbers for you so you get them right.
2. You're worried about a large tax bill and want help minimizing it
Maybe your income has increased in 2022. Or maybe you're earning a lot more money in your savings account than you were in the past because interest rates are up.
Either way, if you're worried about owing the IRS a lot of money in taxes for 2022, then now's a good time to meet with an accountant. A professional might be able to offer up last-minute tips to shrink your 2022 IRS bill.
You might, for example, be able to sell some stocks in your brokerage account at a loss. That loss could then be used to offset capital gains or even some of your ordinary income. And if you're self-employed, your accountant might advise you to hold off on invoicing some clients this month to defer income to 2023, or to make purchases for your business that can serve as a tax deduction.
There's still time to lower the amount of money you owe the IRS for 2022. But if you don't get that advice from your accountant soon, you might miss out on the opportunity.
3. You want up to make the upcoming tax-filing season easier on yourself
Tax season can be stressful. And depending on your situation, there may be a lot of paperwork to gather. That's why it wouldn't hurt to at least have a quick preliminary meeting with your accountant this month. That way, you can get a sense of what's in store and potentially gather documentation in advance so you're less frazzled during the first few months of 2023.
While many people aren't focused on taxes in December, it's a good time to talk to your accountant nonetheless. And if you don't already have an accountant you work with, now's a good time to get one so you're prepared to dive into the tax-filing process early next year.
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