It’s tax planning season — here’s how a CPA can help

“Tax planning is about taking a proactive — rather than a reactive — approach to taxes,” says Brendan Garay, CPA at Fisher, P.A.

Background: Fisher, P.A. is a boutique accounting firm in Charlotte that helps individuals and local businesses manage their finances.

With the 2020 tax deadline behind us, it’s already time to start thinking about next years’ taxes (yup, sorry).

“You want to be able to take advantage of all opportunities and start planning early in the year so that at the end of the year, you’ve set clients up for success,” says Kristen Shiring, CPA, Tax Manager at Fisher.

Sound daunting? No worries, that’s what the pros are for. We asked Garay and Shiring for the inside scoop on how tax planning works and who needs to do it.

What is tax planning?

Tax planning is a service provided by a CPA that’s designed to help a client prepare for tax filing day so that there aren’t any surprises in April.

The goals of tax planning can be boiled down to three main points:

• Mitigating tax burdens.
• Planning for liabilities to come.
• Creating awareness around someone’s financial situation.

“It also depends on the client and their long-term plan,” says Shiring.

Who should leverage tax planning services?

Individuals and business owners can both benefit from tax planning. The more complex a financial situation is, the more important tax planning becomes.

With the rise in cryptocurrencies, Garay says tax planning for individuals has become more popular.

• Owning rental properties can also make your situation complex enough to warrant a consultation to review calculations on the year.

“Most business owners really do need tax planning of some sort,” says Shiring.

How does tax planning work?

First, the pros at Fisher will take a look at your financial situation and go over your goals. Then, they will suggest different strategies to help you reach those goals. These strategies can include:

• Retirement accounts
• Health Savings Accounts (HSAs)
• Asset timing
• Paying out bonuses

Tax planning is separate from tax filing, but both are included in Fisher’s monthly accounting services. Businesses usually need ongoing tax planning, while individuals can stick to a more as-needed basis.

How has the pandemic affected tax planning?

“If COVID-19 has taught us anything, it’s that a lot of unexpected things can come up and things can change in the middle of the tax year,” says Garay.

From regulations to financial situations, we’ve seen that nothing is set in stone, so a little extra planning and professional advice never hurts — even if you think you have a “basic” tax return.

“I’d urge business owners to keep in contact [with a tax professional] and take a proactive approach. They’re there to focus on running their business and we’re here to focus on the tax aspects,” says Garay.

What can Fisher clients expect?

Fisher offers a monthly accounting service that allows them to have a more hands-on approach with their clients.

• “We’re in those books every month, so once we write a tax plan we’re monitoring it in case anything changes,” says Shiring.

Fisher prices by the project — not the hour — for optimal transparency.

Ready to get started? Get in touch with Fisher, P.A. about tax planning and other financial services.

This content was created in partnership with Fisher, P.A. Cover photo by Laura Sumrak.