Autumn is a popular time of year. In Houston, residents can visit local farms for fresh seasonal produce, take their families to area pumpkin patches, wear their favorite cozy sweaters, enjoy crisp fall weather, and take a drive to see colorful foliage, all while enjoying a pumpkin spice latte or treat.
The season between summer and winter, fall reminds us that the hustle and bustle of the winter holidays is fast approaching, not to mention that 2021 is winding down. Thus, fall is an ideal time to invest in your financial future by scheduling an appointment with a certified public accountant (CPA) to start planning your taxes.
Consulting a CPA is particularly essential if you requested an extension to file your 2020 tax returns, as the last day to do so is Friday, October 15. However, the Internal Revenue Service encourages filing as soon as possible to avoid missing the extension deadline and potentially incurring penalties.
Ideally, it would help if you were continuously considering your financials, including your taxes. An excellent way to do this is to establish a working relationship with an experienced CPA in your area like Hollis Lewis & Company, PLLC, who offers reliable tax planning and preparation throughout the year rather than only during the regular or extended tax season.
Continuous Tax Planning and Preparation Benefits
Organize Financial Records
Whether you file tax returns annually or pay estimated tax payments, the IRS recommends developing a recordkeeping system, keeping your important information together so that they are readily available for your CPA. The IRS adds that you should keep income documentation, currency transactions, year-end forms, returns from previous years, Forms 1099 from banks and other payers, etc., in either an electronic or paper recordkeeping system. Your CPA can advise you on what to keep.
Know What Changes May Affect Your Taxes
It is essential to know how recent tax changes or life events may affect your eligibility for certain credits or deductions or, in the event of the latter, your filing status. Events that can cause your filing status to change from last year include your marital status and family situation. Scheduling an appointment with a CPA will help you gain a complete understanding of these changes as they apply to your specific situation, ultimately allowing you to avoid any surprises when it comes time to file your 2021 tax returns.
Gain a Better Understanding of Adjusted Gross Income (AGI)
The IRS defines Adjusted Gross Income (AGI) as “gross income minus adjustments to income.” The agency considers gross income from all sources, including business and employed income, while it considers contributions to a retirement or health savings account as adjustments to that income. To determine what other adjustments may affect your taxes and gain a better understanding of AGI and how it directly affects your tax rate, schedule an appointment with a tax planning and preparation expert.
Discuss Tax Planning and Preparation with a CPA Today
Hollis Lewis & Company, PLLC is a Houston CPA firm committed to providing our clients with professional and personalized tax preparation, accounting solutions, and business services. Our certified public accountants are respected financial advisors with two conveniently located offices in Harris and Montogomery counties and more than 90 years combined experience. Please don’t hesitate to contact us today to discuss your unique accounting, business, or tax planning and preparation needs.
“Definition of Adjusted Gross Income.” Internal Revenue Service (IRS), February 25, 2021.
“October 15 deadline approaches for taxpayers who requested extensions to file 2020 tax returns.” Internal Revenue Service (IRS), September 16, 2021.
“Year-round tax planning is for everyone.” Publication 5349 (Rev. 10-2020), Department of the Treasury, Internal Revenue Service (IRS).