Why You Should Meet with a CPA before the End of the Year

CPA written on tablet screenThe holiday season is here, and that means the New Year is just around the corner. While you probably already have a long list of things to do before the ball drops on New Year’s Eve, there’s one other thing you should add to that last: meeting with a CPA. Why is it so important to meet with a CPA before the New Year rolls around? Keep reading to find out.

Plan Your End-of-Year Deductions

Tax deductions can be a great way to reduce your tax liability, but most of those qualifying contributions, donations, and purchases must be made before the end of the year if you hope to include them on your 2022 tax return. Examining your finances and tax situation now can allow you to get a better grasp on which financial moves will be the most beneficial to your taxes come spring.

For example, many people choose to give to charities during the holidays. Perhaps you have a set amount that you donate to your favorite charity every year; but what if donating just $500 more could drop your taxable income into a lower tax bracket? Most people would gladly make that higher donation for a bigger tax break, but you wouldn’t be aware of that benefit unless you sat down with a CPA to go over your finances in detail.

Regular tax planning can help you to save significantly on your taxes, because you can take advantage of strategies like “bunching” your deductions. Let’s say that your income this year was about average as compared to what you normally earn; but next year, you’re expecting a big increase in your income. You could choose to hold off with your normal tax-deductible donations until after New Year’s. Then, come next holiday season, you would make your normal donations around Christmas time. This would double up your deductible donations for your higher-income year to provide a bigger tax benefit, and you could take the standard deduction amount for this year instead. Bunching often provides huge tax benefits to those who take advantage of it, but only if you take the time to sit down with your CPA and plan out the right time to make those donations.

Make Important Business Decisions

For business owners, the benefits of meeting with a CPA before the end of the year are even greater. There are many important financial decisions business owners need to make, which can shape the future of their business for the next year. A CPA with experience handling business taxes can help you to make decisions about:

  • Additional equipment purchases
  • Upgrades to your business fleet
  • Employee bonuses
  • Charitable donations
  • End-of-year invoice collections
  • And more

Each of these issues needs to be carefully examined to determine the tax implications and financial impact it will make on your company. Rather than making these decisions based on gut instinct or even an educated guess about the payoff, your CPA can provide you with expert guidance on how those decisions will impact your business tax return, and offer advice on last-minute tax moves you can make to improve your business’s tax situation when spring rolls around.

Get More of Your CPA’s Time

It’s no secret that accounting firms like ours become incredibly busy once tax season gets underway. Waiting until then to sit down with your CPA often means that you can’t get an appointment at an ideal time for your schedule, or that your meeting will need to be shorter than you would have liked. When you schedule your appointment for the end of the year instead, you can take advantage of our greater availability and get the one-on-one time that you need from your CPA for a thorough tax planning session.

If you’re ready to get a head start on your taxes for 2022, and want to reap the benefits of tax planning before the year ends, contact Demian & Company CPAs today to schedule an appointment with one of our experienced tax planners. We’ll find a time to sit down with you and go over your finances in detail so that we can help you tax advantage of every deduction available to reduce your overall tax liability. Call now to schedule your tax planning session!