It’s April and Spring is here! The birds are chirping and the flowers are blooming. It’s also the deadline to file your taxes. Filing taxes is a stressful time for everyone. Being prepared and armed with knowledge can help make tax time less stressful. Having a conversation with your accountant can help you figure out how to make the best decisions for your finances. You have probably met with your accountant by now to file 2018 taxes, but before you finish with them for the year, ask these questions so you can be better prepared for your 2019 taxes.
1. Should I change my filing status to avoid owing the government next year? It’s a good idea to ask your accountant if the filing status on your W4 should be changed. If you owed a lot of money to the government this year, you likely need to adjust your W4 deductions or flat amounts to have more taken out throughout the year to avoid a large balance at the end. Also, if you received a large refund, you may want to adjust your deductions so less is taken out, and you can have access to your money throughout the year. Your accountant should be able to advise you on what option is best for you.
2. Is there a list of credits and deductions I should use throughout the year to increase the likelihood of getting a refund? Your accountant should be familiar with your unique situation as well as knowledgeable of possible credits and deductions you may be able to take on your next tax return. Being aware of these credits and deductions ahead of time allows you to be able to keep proper documentation and take appropriate action throughout the year so you can pay the lowest possible taxes.
3. What advice do you have for me? This a good open-ended question to ask your accountant. It will make him or her think outside of the box. Maybe it is as simple as suggesting a filing status change, or maybe it is something larger that could reshape what you do throughout the year. Your accountant is the expert in this field, and it is a good idea to pick her brain for your benefit.
4. Is my return putting me at risk for an audit? No one wants to have their tax return audited. Your chances of being audited are very low. According to the IRS, in 2016 approximately 0.5% of all returns were audited. There are some things on your tax return that may increase your chances of being audited, such as failing to report all of your taxable income or claiming large charitable deductions. Ask your accountant if there are any red flags on your tax return that may lead to an IRS audit.
5. Will my life changes affect my taxes? 2019 might bring some big changes for you. Are you getting married or divorced? Are you having a baby? Are you buying or selling a home? All of these life changes may change your tax liability. Be sure to inform your accountant of any of these changes that will be taking place in 2019 and find out what changes you may need to make for your taxes.
We love to hear from our readers! Please share what questions you asked your accountant this year.