Know When to Hire An Expert, or … Just Say No to Breakfast

Think your taxes went up because of the new tax law, think again. It may be time to hire an expert!

Caution! Don’t have breakfast at my house. Those who know us, know that even though the coffee is amazing, our refrigerator is usually bare. Of course if we know you will be visiting we will pick up bagels and cream cheese and you are in luck if we are able to pick tomatoes and cucumbers from our garden to go with them. The main reason to “Just Say No to Breakfast” is because anything you say can turn into a blog post or video like this one …

“Are You Wondering if the New Tax Law Costs You Money?”

During a recent breakfast I shared with someone who is really really bright, my guest started discussing his tax return, complaining that he was not able to itemize this year and was paying higher taxes due to the new tax law.

I asked “How do you know”? He explained that this year his refund was so much lower than prior years, about $4,000 lower, even though his employment situation had not changed.

Ouch, I was not so sure his taxes had actually increased, so I asked him if he questioned his accountant about this

Turned out he was a DIY, did not work with an accountant, and I thought, hmm “maybe he was just reacting to the reduced refund he received this year”.

I wondered if he,

  • like many others who were not tax experts was probably reading his tax situation incorrectly
  • even knew that many states had decoupled from the new federal rules and allowed for itemized deductions, even when the standard deduction yielded a better result on his federal income tax return
  • realized that the Tax Cuts & Jobs Act had opened up new opportunities for strategic tax planning

Even when someone is really smart and competent, when they do their returns themselves they are probably doing themselves a disservice. They are certainly saving money on the technical tax preparation fees but they may be missing out on tax saving strategies.

I explained that yes he may have used the standard deduction this year, causing his taxable income to rise, but then I explained that the tax rates were also lowered and as such the withholding tables adjusted. The reduced refund could have been caused by a reduction of the amount that was withheld from his pay check.

I recommended that he hire an experienced accountant who he could consult with to gain a better understanding of his circumstances and to request a strategy meeting as well.

Our team continues learning new skills and reviews opportunities for tax saving strategies under the new law, the TCJA to bring added value to our client meetings, and we’ve been doing this for over 25 years.

What next?

If you need help with your accounting, want to create a tax minimization plan, want to discuss your business growth plan or your finances, are concerned about retirement goals or need to be held accountable for your 90 day action plan, contact us for a complimentary discovery session or an appointment to just get started.

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