Tax season can be beyond stressful, leaving you awake at night, wondering whether you made some mistake while filing taxes. The latest tax law changes can also be confusing, especially with the new inflation-adjusted income tax brackets and standard deduction amounts.
No wonder that 53 percent of Americans use a tax professional to file taxes. A tax preparer or accountant can relieve the pressure and make things easier but ensure you’re leveraging the full potential of their expertise and knowledge.
You can make better-informed decisions by asking relevant questions before 2023 ends. Besides understanding recent tax changes, here’s how else talking with your accountant helps.
Why You Should Discuss Tax-Related Matters with Your Tax Preparer Questions Before 2024
Effective tax planning is more than a mere fiscal chore. – It sets your financial well-being up for success.
The aftermath of overlooking this critical aspect extends beyond monetary fines. In fact, inadequate tax preparation can lead to missed opportunities for deductions and credits, resulting in an unnecessary financial strain.
You can avoid that by understanding the implications of tax decisions and empowering yourself to make well-informed choices. Here are the critical questions to ask your tax preparer.
10 Tax Questions to Ask Your Accountant
The next time you meet your accountant or tax preparer, here are the questions you should ask to prepare for 2024.
1. What Recent Changes in Tax Laws Should I Be Aware Of?
According to Forbes, the IRS announced its 2024 inflation and tax bracket adjustments. Instead of navigating these changes alone, ask your accountant to help you understand what that means for you.
Inquire how to prepare for these adjustments and adapt your financial strategy accordingly. You can also ask whether they know about other upcoming tax law changes, whether it’s amendments to credits, deductions, or overall tax structures.
2. What Tax Credits Can I take Advantage Of?
Learn about the available tax credits to maximize financial benefits. This question will prompt your accountant to identify opportunities that align with your circumstances and possibilities.
For instance, you might want to know about the upcoming educational credits, energy-saving incentives, or child-related advantages, as understanding and leveraging these credits can significantly impact your tax liability. Taking a proactive approach minimizes your tax burden and helps capitalize on every avenue for potential savings.
3. How Can I Optimize Tax Deductions for My Situation?
Inquiring about tax deduction optimization can minimize taxable income. Encourage your tax preparer to have a personalized conversation about the deductible expenses and write-offs.
Understand how to optimize this aspect of your tax strategy and enhance your financial position by learning about the most common deductions related to mileage and vehicle costs, home supplies, travel expenses, etc. This question is especially critical if you’re a business owner because it may help you reduce the amount you owe in state or federal taxes.
4. What’s the Best Retirement Savings Strategy for Tax Benefits?
Start creating a tax-efficient retirement plan by understanding various savings options. Ask your accountant for insights into tax-advantaged accounts and strategies that match your financial objectives.
5. Are There Any Tax-Efficient Investment Opportunities?
Reinforce wealth accumulation and start discussing investments that offer financial growth while minimizing tax implications. Consider capital gains and explore tax-friendly investment vehicles, including municipal bonds and index funds.
6. What Record-Keeping Practices Should I Follow?
Seek guidance on record-keeping practices to lay the groundwork for a smooth tax filing process in 2024 and beyond. Ask your tax preparer for advice on organizing receipts, tracking expenses, and maintaining documentation to substantiate deductions.
7. How Can I Plan for Estimated Tax Payments?
The best way to plan your future tax payments is through foresight and strategic financial management. Initiate a conversation about managing quarterly tax obligations and get your accountant’s insights into income projections, potential windfalls, and deductible expenses.
8. What Steps Can I Take to Avoid a Tax Audit?
Minimize audit risks by asking about wise prevention techniques and prompting a discussion on common triggers and proactive measures. Aim to understand the nuances of record-keeping, documentation, and adherence to tax laws, as that helps establish a solid risk-mitigation strategy.
9. How Would Having a Side Hustle Impact My Taxes?
Perhaps you’re considering joining the gig economy to improve your financial outlook, requiring you to investigate whether that would complicate your tax situation. After all, self-entrepreneurs, digital nomads, and freelancers must handle different tax forms compared to long-term employees. If you plan to be among them, ask your accountant whether you’ll have to pay the self-employment tax on your side hustle income.
10. What Are Your Fees, and How Can I Maximize Value?
Discover the full scope of tax services costs by initiating a transparent conversation about the fees. Explore the fee structure and assistance they entail to understand the value proposition. Ask your tax preparer whether they can tailor services to your unique needs, ensuring the outcome aligns with your financial goals.
