If this year's tax return was more painful than you expected, you're not alone. Surprises can happen when you're not actively planning. Still, a surprise bill or a smaller refund than you'd hoped for can throw off your entire financial rhythm. That's why right now is the best time to take control of next year's outcome instead of waiting for the tax season to catch you off guard again. Meeting with a CPA in the off-season can help you analyze the previous year, gain an understanding of what happened, and make recommendations as to what to do differently going forward.
What Is a Tax Projection?
A tax projection is an estimate of what your tax bill might look like next year. It's based on your current income, deductions, and other known factors. CPAs often use tax projections to help clients prepare for what they may owe in the future or to maintain realistic expectations regarding a potential refund. It can help you avoid surprises and adjust your finances ahead of time.
What Is Tax Planning?
Tax planning is the process of applying strategies to reduce your future tax burden. It uses data from projections to help you decide when to take income, when to pay expenses, and how to structure financial decisions. Think of it like tuning up your car before a long road trip. You wouldn't wait for smoke to start pouring out of the hood. Tax planning works in the same way; it keeps your finances running smoothly by catching minor issues before they become major expensive problems.
Why You Should Reconnect After Tax Season
Tax filing is backward-looking. It reports what has already happened. Tax planning, on the other hand, is forward-looking. It helps you shape what your next return could look like. Following up with your CPA after filing gives you a chance to discuss anything that has changed or may change. Planning like this helps ensure that next year's return reflects your current reality, not just last year's paperwork.
Life Changes That Can Affect Next Year's Taxes
Even small updates can change how much you owe or how much you can deduct. Common examples include:
- Getting married or divorced
- Having a child or becoming a caregiver
- Starting a new job or taking on freelance work
- Buying or selling a home
- Launching or closing a small business
- Retiring or pulling income from investments
- Receiving an inheritance or trust distribution
If any of these apply, your CPA can help you update your tax strategy for the current year.
How a CPA Helps You Prepare for Next Tax Season
A good CPA helps you to file the right tax forms, but a great CPA helps you interpret what those numbers mean. With the right data, they can build scenarios, run projections, and recommend strategies that fit your situation.
FAQs
How often should I check in with my CPA?
It depends on your situation, but a mid-year or post-filing check-in is often the right time to adjust your plan.
Can I estimate my own tax liability?
You can make a rough estimate using online tools, but a CPA can help account for complex factors like self-employment income, trusts, or new tax laws.
Does tax planning always lower my bill?
Not always, but it helps you make the most of available deductions and credits. It can also help you avoid penalties or unexpected payments.
Take Control of Your Next Tax Return
If you're looking to make a change, start with a follow-up meeting. Bring a list of any changes in income, household, or business activity. Be prepared to ask questions about adjustments to withholding or whether estimated payments are needed.
If this year's return left you with more questions than confidence, let's change that. Myrick CPA can help you map out a better tax year with no surprises and no scrambling. Schedule a check-in with Myrick CPA. We'll walk through your current situation and help you plan ahead for the tax season to come.
