“Before taking action, talk to your tax advisor.” It is familiar advice, yet many taxpayers wait until after a decision has been made, and by then, the tax consequences may be difficult to undo.
Plan ahead for life and financial changes
Consulting your CPA before major changes can help you avoid costly mistakes and uncover valuable planning opportunities. Contact your advisor before:
- Getting married or divorced
- Buying or selling a home
- Starting or selling a business
- Approaching retirement
- Welcoming a new child
- Changing dependent status
- Donating investments or high-value items
- Selling stocks, investments, rental properties, or other assets
- Planning your estate or Social Security strategy
- Making decisions about retirement accounts
Avoid tax surprises from extra income
A second job, freelance project, or side hustle can affect your taxes in unexpected ways.
- Confirm your classification. Ask whether you will be treated as an employee or independent contractor and whether you will receive a W-2 or 1099.
- Review your withholding. Each employer may calculate withholding as though it is your only source of income, leaving you short at tax time.
- Plan for contractor taxes. Taxes are not withheld from 1099 income, and estimated quarterly payments may be necessary.
- Separate your expenses. Keep business and personal spending separate so eligible expenses are easier to identify.
When life or income changes, contact Alloy Silverstein. A quick conversation can help you plan ahead, keep more of what you earn, and avoid costly surprises later.
