Tax Planning with a Huberty CPA Advisor
Tell us about tax planning. What does it mean to clients of Huberty CPAs?
Many factors affect an individual’s or company’s taxes: Family changes, management restructuring, retirement plans, acquisitions, retirement. Huberty CPAs’ first goal in tax planning is to find every way these factors can be managed, to mitigate the client’s tax liabilities. The second goal of tax planning is preparedness. Huberty CPAs’ calculations inform clients what taxes to expect, and when they are due. And when changes occur, we advise what immediate actions offer the client’s greatest tax savings and preparedness. Tax planning is all about not waiting for the last minute.
We pay a variety of taxes—daily, monthly, and annually. How does Huberty CPAs help us minimize our tax obligation?
Timeliness is important. It’s best to analyze a lifestyle change or business decision having tax ramifications when it happens (or before, when possible). By first addressing the event at the end of the year, it might be too late to realize any tax mitigation. There are numerous ongoing factors and major changes that affect taxes. One ongoing factor is how well a business performs. That has tax implications. With Huberty CPAs’ analysis tools and advice, management can consider whether to set aside money for a large tax liability at the end of the year, or allocate it elsewhere. Setting up a payroll is a major change. Huberty CPAs ensures the client is fully aware of what taxes are owed and when they are due. Required payments are anticipated and paid each period, instead of popping up at year’s end as an unpleasant surprise. Huberty CPAs works with the client throughout the year, keeping everything up to date and calculating tax implications as changes arise. As our partnership develops, we explain the meanings behind the numbers. As knowledge and understanding grow, so does a client’s confidence in knowing what to watch for, what actions to take, and when to ask for advice, to minimize tax obligations.
How does Huberty help client to maximize Social Security benefits?
Huberty CPAs works with clients to consider anything affecting Social Security benefits. Not all such factors are obvious, but our associates are well-versed in finding every one. Selling fewer assets, or selling less frequently—our calculations will show exactly where it makes a difference. A related service of Huberty CPAs, wealth management, factors in Social Security benefits when planning the level of post-retirement income needed for a happy, financially comfortable life.
What ongoing training do tax experts at Huberty CPAs complete to stay up to date with the ever-changing tax code?
The American Institute of Certified Public Accountants (AICPA) requires its members to take at least 40 hours of continuing education each year. Huberty CPAs requires every one of its employees to engage in continuing education, whether they’re CPAs or not. There is a wide range of training available, to which Huberty CPAs associates will travel as necessary. Topics can be very specific, delimited, and brief; or wide-ranging overviews lasting several days. Huberty CPAs also conducts its own training, updating all associates on tax changes of the previous year. Associates are kept informed of tax law updates with daily e-mail alerts. Professional journals offer research and other articles that relate directly to tax planning services.
What is your favorite client success story? (No names will be mentioned.)
So many of our small business clients lack familiarity with tax laws. They don’t realize the actions causing their taxes to be higher than need be; that there are other options. When they show us how much they paid in taxes the previous year, and we tell them, “If you’d done this, it would have cut your taxes in half”—that is the exciting start of success. It’s gratifying enough to know we’ve reduced a client’s taxes once. But the real pleasure comes on seeing them repeat that savings, year after year, with knowledge we’ve given them. Huberty CPAs doesn’t just tell clients what to do. We explain why it should be done. We give businesses what they need to know. If we set up their payroll system, we teach them to independently manage it. Huberty CPAs associates experience the kind of pleasure a teacher gets, seeing a student first grasp a subject, then use it to advantage. Huberty CPAs’ approach is more than just doing a tax return. It’s more than giving the client numbers. It’s all about education, which is a core value of our firm.
What type of situations, circumstance, events, or life changes create a need for a review in Tax Planning?
Tax planning for individuals should be reviewed with any significant life change, such as marriage, divorce, having a child, a child starting college, moving, a different job, or preparing for retirement. For a business, taxes can be affected by a merger, acquisition, change in management, or a major purchase of equipment or buildings. A financial backer might require a different level of service; whereas a simple tax return had been sufficient, now an audit is required. If the company’s accountant or bookkeeper changes, a review helps prevent anything being overlooked in the transition.
What are the typical or average costs associated with Tax Planning process? Is there a major difference between individuals and businesses?
Tax planning is done on an hourly rate, so time spent determines cost. Businesses usually have a higher cost because there is greater complexity. There are more factors—both internal and external—affecting a business, and many are changing constantly. The need to forecast business performance is just one factor, yet it adds significant complexity. An individual’s tax planning depends on life changes: A change in income or expenditure (for which we can quickly calculate how that will affect taxes), retirement, change in employment, an addition or loss in the family. An individual is also affected by external factors: Stock market performance, changes in tax laws.
About the authors:
Kim Thome (email@example.com) is a Manager at Huberty CPAs and Trusted Advisors.