How to Make Tax Time Less Taxing

Statera Financial Planners |

Tax time can be stressful. If you’re retiring or recently retired, self-employed or own a business, a commissioned salesperson, or are going through another significant life change, your taxes may have a new level of complexity that often benefits from professional support. Traditionally, you think of a bookkeeper and/or an accountant, but there is one more expert worth considering as a valuable member of your tax team: a Certified Financial Planner® (CFP), like those on the Statera Financial Planners team.


Getting your taxes done by an accountant can be a smart move for anyone—not just those with more complex tax situations. Accountants keep on top of regular changes to the tax code and engage in ongoing professional development to ensure they’re using the best strategies for their clients at tax time.


So why would you add a CFP into the mix? Simply put, while an accountant’s job is to file your taxes with the maximum benefit to you at tax time, a CFP professional will make sure that your taxes fit with your short and long-term financial strategy throughout the entire year. An accountant files your taxes―but a CFP professional plans for them.


A CFP will identify the sources and types of income a client has, how these will change over time, and how tax will evolve with them.  An accountant may not see everything because they’re focused on the tax return. A CFP takes a holistic view of the entire financial picture, rather than just the taxes. They can also help make tax time easier by ensuring that your tax slips and paperwork are all accounted for and assist in obtaining what your still need. If your accountant doesn’t know about the accounts you have, they aren’t going to ask you for a tax slip for them—they just work with what you provide.


Life events— career changes, marriage, divorce, children, health issues, retirement—can materially impact the taxes you pay as well, and this information should all be discussed with your CFP in your planning process. It’s not always a topic that may come up with your accountant so naturally. A CFP will be instrumental in helping you sort out the financial impact of all the transitions you’ll encounter throughout your life.


Career changes can be a challenge at tax time, especially if you have encountered a change in income or benefits. So, a CFP can help you optimize your current situation through effective tax planning. Those who are self-employed have additional considerations and many don’t have the time or energy to manage their taxes and/or tax payments effectively. Organization with a CFP to avoid surprises is important.


A CFP can also play an important role as a “translator” between an accountant and their mutual client. They are a good go-between to help educate the client and ensure that tax planning fits into the client’s long-term financial strategy. Taking tax language and converting it back to simple terms that someone can understand too helps the client pull it all together and ultimately achieve more financial knowledge and control.


For many Canadians, taxes are withheld and submitted by their employer. But for others, it isn’t always that simple. If you’re self-employed, you have to remit taxes periodically. Or if you’re retired, you may have investment income where there is no tax withheld, so you’ll need to pay it yourself. A CFP will help map out how taxes are paid and ensure you’re setting aside enough funding so you’re prepared for the payments you’ll need to make.


If you want to minimize the anxiety generally associated with tax time and avoid surprise bills and penalties, consider adding a CFP, like Statera Financial Planners, to your professional network!


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