The Value of a Mid-Year Check In
Everyone is familiar with the trials of tax season. It’s a time that’s stressful and in turn, calls to accountants become more and more frequent. However, it’s important to remember that accountants work year-round for a reason. They want to work with you to help you achieve your financial goals while limiting the amount of money that comes out of your pockets year after year. The way to accomplish this isn’t by waiting until tax season. Instead, it’s by keeping in contact with your accountant throughout the year, or at the very least, twice a year. To achieve the most out of your relationship with your accountant, a mid-year check in is crucial. In order to better understand this, we wanted to exemplify the value of a mid-year check in.
Benefits of Mid-Year Check Ins
A year is a long time. Things change, probably multiple times. To avoid stress, anxiety, and a general feeling of overwhelm, we recommend a mid-year check in. Not only will these feelings dissipate and leave you feeling refreshed and ready to tackle the remainder of the year, you’ll get to experience the following benefits:
If you experience major changes either in your personal life or your business, a mid-year check in is the perfect time to update your accountant. Doing so will give them a chance to determine the best course of action for you to reduce your tax payout. It also ensures that your planning stays up-to-date and if you change tax brackets, it can be accounted and planned for. If you wait until the end of the year and move up in a tax bracket, there are hundreds of dollars you could have mitigated with credits, write offs, or liabilities.
If you get married or have children, always inform your accountant as soon as possible as it will change your profile and qualifications.
In today’s world, monthly subscriptions are taking over a majority of services. While they’re seemingly inexpensive on their own, these subscriptions add up. Use your mid-year check in to review what subscriptions you currently have and which ones you’re actively using. Cancel the rest. Having a mid-year check in is the perfect time to go over all of these expenses and make sure you’re on track for financial success.
Review Accounts Receivable
In the same aspect, you need to make sure you’re reviewing accounts receivable. Don’t let outstanding invoices remain outstanding for too long. Instead, stay on top of your clients so you don’t lose any profits.
Track Estimated Payments
Hopefully you’ve been making estimated payments throughout the year. If not, talk to your accountant today! A mid-year check in is the perfect time to track and review your estimated payments to ensure you’re in good shape when tax season comes. Tracking estimated payments allows you to avoid spending a huge lump sum at the end of the year by paying a little each month. It’s a great way to reduce stress and analyze your profits, expenses, and goals.
Plan for Savings
Your original yearly financial goals can change quickly depending on how your business is doing. If you anticipated a slow year, but ended up with a more successful year than anticipated, you’ll need to re-evaluate your savings. Working with an accountant during your mid-year check in is a great time to adjust your cash flow. This ensures your year-end is on track and you can make more educated financial decisions throughout the remainder of the year.
Working with a financial planner is great, but an accountant can give you insight on your investments too. Review all of your stocks and bonds to see if things are still going the way you’d hoped and if you need to make changes, do so now. This allows you to double check that you’re still in line with your portfolio goals.
Maximize Credits and Deductions
As you work with your accountant during your mid-year check in, you’ll start to see if your overall taxable income has changed. Even if it hasn’t, now is the time to understand what you need to do to maximize all of your tax credits and deductions. You may choose to increase your charitable giving, move money to a retirement account, utilize education tax credits, or vamp up your deductions. Whatever it is, make sure you do it before the end of the year to guarantee that you get the most out of your money.
This is also the time to discuss medical expense deductions. These are often dependent on household details so you should talk to your accountant about your options and schedule any doctor’s appointments you or your family will need for the remainder of the year.
Like most small businesses, it’s likely that you have a set of goals that was determined at the start of the fiscal year. Rather than waiting until next year you should make adjustments as things change. Look at retirement, education, business expenses, charitable donations, or any other financial goals you’ve put in place. Revisit your goals regularly to make changes.
Review Tax Law Changes
Tax law changes more frequently than you’d imagine. While 2019 brought in some major federal changes at the start of the year; things continue to change as the year progresses. Talk to your accountant about inflation, health care, medical expenses, mortgages, and tuition at your mid-year check in to make sure you’re educated on the most up to date tax laws.
Whether you need an accountant or want to work with a certified tax coach, Del Real Tax Group is here to help. Our team is comprised of experienced professionals who will work hand-in-hand alongside you to make sure you don’t overpaying yearly taxes. With a mid-year check in, we’ll work with you to confirm that you’re on the right track for success. As always, our goal is to make sure our clients get the best attention possible while saving thousands of dollars of taxes each year. To learn more about mid-year reviews or schedule a consultation, visit our website or call us at 708-788-0082 today!
Maribel Del Real, CPA
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