Minimize Tax Issues in 2022 by Scheduling Meetings and Reminders
After a year of significant capital gains and a fluid tax situation since Biden’s proposed tax legislature did not pass through Congress, we are now faced with a volatile market and no stability in sight as we finish out the second quarter of 2022. The ongoing changes with investment portfolios require a proactive approach for tax planning strategies and increased communications with your CPA and financial advisors to minimize tax issues in 2022.
Plan Ahead
In addition to scheduling a time to speak with your CPA or financial advisor about strategies, below are events that may trigger paying higher taxes if you do not stay abreast of changes to your income throughout the year. We recommend setting reminders before specific occurrences to give you enough time to discuss the situation with your CPA and learn tax strategies to limit or reduce tax consequences before December 31st.
WM WISDOM:
The ongoing changes with investment portfolios require a proactive approach for tax planning strategies and increased communications with your CPA and financial advisors to minimize tax issues in 2022.
Quarterly Payments
Set a reminder a few days or weeks in advance of a quarterly payment and repeat throughout the year for each quarter.
Rationale: If significant changes to your income or deductions happen during 2022, be certain to speak with your CPA to review your current estimated payments and make certain the payment is in line with the change in income.
IRA Distributions
You will want to adjust your quarterly payments if you withdraw more than your Required Minimum Distribution (RMD) in 2022.
Rationale: To avoid the surprise of a larger tax bill, if you plan to withdraw more than your Required Minimum Distribution in 2022 for a major purchase or other life event, remember that the distributions are taxable income.
S-Corps Report Health Insurance Premiums on a W-2 for 2% Shareholder-Employee
Set a reminder on your calendar in November to make certain this information is included on the W-2 and completed on time.
Rationale: This can help avoid the need for filing corrected payroll returns.
Monitor Regularly to Minimize Tax Issues
We want to emphasize the importance to stay apprised of any new developments with your income or life events. We are all waiting to learn if any of the proposed tax changes will be approved and if the market stabilizes, but in the interim, we want to be prepared as best we can to help with your tax liabilities.
Questions?
As always, should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.
DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update COVID-19, COVID-19 Business Resources, COVID-19 Client News Alerts and other related communications are intended to provide general information, including information regarding legislative COVID-19 relief measures, as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.
