Write three hundred words on taxes; that’s what they told me. Just to be clear, according to Taxfoundation.org, the tax code is almost 4 million words. To put that in perspective, the Bible has approximately 750,000 words. Further, between the years of 2001 and 2012, the code changed 4,680 times. Let me boil 300 words down to three letters: C.P.A.
As a CPA myself, and having worked with some of the best in the field, I’m a little biased, but the tax code is only getting more complex and its changes are becoming so frequent that utilizing a professional could save you time, money, and hassle. Not just in terms of potential mistakes, but also in missed opportunities. Consider just some of the changes over the past few years:
- Income tax rates changed, including a new tax bracket
- Capital gains rates increased
- A Medicare surtax was implemented on net investment income
- Phase-outs to itemized deductions were imposed
- Changes were made to indirect IRA rollover rules
- Penalties for not having health insurance were first implemented, then increased
- The allowable Section 179 deduction for businesses fell back to $25,000 from $500,000 in 2015 and we will wait to see whether Congress acts at the last minute to increase that amount to its previous level again this year.
We view CPA’s as an integral part of your team of professional advisors and believe they offer great value to their clients. While they can help you avoid mistakes, they can also help you be opportunistic as things change in the tax code and in your life. We often talk to our clients about managing their wealth like a business, and a good CPA can help you manage risk and be opportunistic.
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