Here is that time of the year when you are into deep thinking about taxes, and the right questions you must ask your tax preparer. Take out some quality time to spend with your preparer or chalk out some questions for them while sending them your return.
What kind of tax questions should you ask?
· Retirement - if this is in the plans during the next year, your preparer can help you understand proposed changes. And don’t forget to ask about Social Security if you will start drawing it during the next year.
· Divorce or Marriage – either can play with an expected refund.
· Children - what effect could a new baby have on your taxes? Or, what happens when a child goes to college or starts working.
· Starting a business – get an overview of what records you will need to keep. You can always get more info later.
· Making a withdrawal from your 401K or IRA – if you are thinking about doing this, ask about the tax consequences. The same goes for taking a loan against your 401K.
· Credits and deductions – ask about those credits you’ve heard about on the news. Do you qualify and why/why not?
· Review your return – ask about items that didn’t come out the way you thought they should.
· Are you paying a penalty - a big balance due may trigger a penalty. Should you make estimates or change your withholding?