Financial Forecast and Projections

• Home Foreclosure – Home foreclosures have a substantial impact on your tax strategy. In the past you may have received big fat refund checks from the IRS. You may be withholding at a higher rate, because in the past you were entitled to a large home interest deduction at the end of the year. If you do not adjust your withholding to compensate for the foreclosure, you may owe the IRS instead of receiving a refund.

• 401K Distributions and Contributions – Have you withdrawn from your 401K or other savings vehicle prior to age 65? Have you withheld enough money to cover the tax liability and penalties associated with the withdrawal? Have you stopped 401K contributions because of an income reduction? Retirement accounts provide as many opportunities for tax shelters and just as many penalties and tax implications as well.

CPAs are experts in the financial forecasting and planning that is required to ensure that your retirement vehicle does not become a tax liability prior to retirement.

It is never too late to hire a CPA to assess your current tax strategy; actually, the sooner you do so, the better. A CPA is trained to review your current financial strategy to ensure that your tax liability is minimized. Accountants are also highly skilled in projecting your future tax liabilities and developing a strategy, which is right for your individual situation. Some people like overpaying to the IRS and getting a big refund check at the end of the year. Other people need to have every dollar they can in their weekly paycheck and prefer to pay the IRS what their estimated tax liability will be for the year, and no more.

No matter what your preference, you need the advice of an experienced accountant to implement a realistic tax strategy.