Important Life Events To Share With Your Accountant

Informing your accountant about crucial life changes is essential for proper financial management and tax planning. Firstly, if you move to a different state, notify the IRS and update your address for tax purposes. Different states have varying tax rates and regulations that can impact your liabilities and deductions.

Secondly, changes in marital status, such as getting married or divorced, affect your filing status and dependents. Your accountant can guide you on how these changes alter your tax obligations and benefits, ensuring accurate filings.

Thirdly, the birth of a child should be reported to include them as a dependent on your tax return. Your accountant can help you explore tax credits and deductions associated with having children, maximizing your savings.

Additionally, saving for college or retirement is significant. Contributions to qualified 529 plans may offer tax benefits related to education savings. Discussing contributions to qualified Individual Retirement Accounts (IRAs) with your accountant ensures you understand tax advantages and contribution limits.

Next, when buying or selling investments, report capital gains, losses, and dividends. Different investments have distinct tax implications. Your accountant can help you navigate these complexities, optimizing your investment-related tax strategies.

Lastly, inform your accountant about major purchases like a house or car. This information helps in determining potential deductions related to mortgage interest or sales tax. Additionally, if you make energy-efficient home improvements, such as installing solar panels, you might qualify for tax credits.

By communicating these life changes promptly, you empower your accountant to provide tailored advice, ensuring your financial records are accurate and you benefit from available tax advantages. This proactive approach safeguards your financial well-being and helps you make informed decisions about your money.

Always consult with a tax professional and your investment advisor for personalized advice.

Christine Murphy, EA