I think that’s a reasonable way to handle it. You still need to collect the paperwork/forms, but you’ll avoid the major pain. You should receive most (but maybe not all) forms by end of January. You may want to compare to last year’s folder as a sort of “checklist” for prior forms.
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I enjoy tax law. It is like a puzzle to me and I actually read about it and have come up with some very creative ways to reduce taxes that are legit but that my accountants did not know about. But, I stopped doing our returns many years ago.
When I worked for a wealthy family’s investment company on Wall Street years ago, we used the top tax partners at Deloitte and they were very good. They would have suggestions that could save, say, $1 MM in a transaction. When I moved back to Boston and started my own business, I could not afford the top tax partners at a Big 4 firm but asked around for suggestions for a tax accountant who would proactively find ways to reduce taxes and would be a creative problem-solver who started with my goals first. Several people suggested one person. I engaged him and his firm. He set up the structure of my companies in a way that has probably saved me $10K a year for perhaps 20 years. He also suggested other things that saved a lot of money as well.
I have several companies, a beneficiary defective dynasty trust, stock options, and foreign income from my work and at times foreign board positions. We used to have real estate investments. The time I would have to spend to fill out the forms would be daunting. And some of the forms (like the foreign tax credit and AMT in the years when it applies) are mind-numbing – it is pretty hard to figure out what the formula is underlying the form.
It is really helpful if the accountant does the work both for you and your company as they can often find ways to optimize across the two entities.
That said, in my not inconsiderable experience working with professional service providers like lawyers and accountants over the years, I have found most to be disappointing in the following sense. A great service provider starts with your goals and objectives and helps you figure out how to reach them. They suggest several strategies with the risks associated with each. Most accountants I’ve dealt with tell me what I can’t do. I then suggest a way around the problem they have identified. They identify a problem with my new solution. Then, reading tax law, I find a way around that problem. Ultimately, I find a solution but the process is slow and painful and doesn’t always work. So finding a tax person who is proactive and a good problem-solver can make a big difference. Again, that person/firm should do your returns and figure out strategies to reduce your taxes. Most CPAs probably won’t do much more than you would do on your own.
I don’t know if this is helpful to you.
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Most CPA’s are not tax experts. Yes, the CPA exam does include questions on tax, but those are rather basic questions that most businesses face. For complex deals, you need a CPA who also has deep expertise in Tax, as you found when you went searching.
Ditto. When we were ready to file our S1, we had an issue due to stock grants. (Grants were made in ignorance when the company had only 5 employees.) Our Big Four auditors, PwC got their DC tax gurus on it and wrote a 25-page opinion that was accepted by teh Service when we got audited. (Our VC was skeptical so they even sent it to their tax experts before they would sign off.). Saved the original founders – and company – thousands, and it only cost us $37.5k for the study. Best money we ever spent.
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Our taxes are definitely not that complicated. But I do see value from what you said. If I can find an accountant that specializes in timber/forestry taxation, then that could be worthwhile. Otherwise, I don’t know that I would be able to find someone who would be worth the money.
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Out of curiosity, I looked up forestry taxation in our state, and there seems to be some additional minor headaches involved… B&O above certain limit etc.
https://www.wafarmforestry.com/taxes
I’d ask around for referrals. Sorry can’t help as I don’t know anyone. I’d think there would be just a handful of such pros as it is a relatively small practice.
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Yeah, additional headaches for sure. We took a forestry class and got our forest designated as a stewardship forest, so we’re eligible for state assistance funds for certain work. I can only hope we have to pay B&O taxes (have to gross over 100K I believe), and we have to pay the excise tax.
We’re getting a consulting forester to manage our timber harvest, so I’m sure he has some recommendations. We also have access to a gargantuan amount of online info from the class, but I skipped over the tax stuff because it wasn’t relevant at the time. I’m thinking it might be worth getting a specialist to do our taxes, but only if we can get someone who specifically does that work.
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I assume you’ve seen this… or perhaps a newer/2023 version
https://www.fs.usda.gov/sites/default/files/fs_media/fs_document/2022-Tax-Tips-for-Forest-Landowners.pdf
Skimming it over, looks complicated. But maybe just a matter of keeping good records. It did look like they have Examples - I love a document with examples 
Sidebar - I once worked with a tech writer who explained, “No matter what you create… some people will say it’s too basic, and other people will say it is too detailed. But everybody likes examples!”
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Looks familiar, thank you. Honestly, when we took the class, it was really overwhelming, there was so much information, so I just breezed over the tax stuff because it wasn’t relevant at the time. It is complicated, but I think that we are going to have to be responsible for figuring out most of this, unless we can find a specialist. They gave us access to a ton of resources. I would hope that the tax programs direct you through this, too.
I love examples, also!
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Looks like you have a new job - forestry investment and management!
You’ll get it figured out. A new adventure for you.
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There were a few years that Turbo-Tax was not sufficient for some estate type stuff – so I printed my stuff off and submitted one year, knowing I was overpaying on taxes. I had found a good CPA that was a reasonable cost guy – he spotted what needed the correction immediately (and then reviewed more thoroughly after my appointment), and we filed a correction. He only charged me for the few hours (less than 3 but I believe maybe 1 or 1 1/2 hours) he actually spent, and saved us thousands. One year when our children were in the midst of lots of things and DH was away a lot, I used the firm my former employer used (I knew they were being charged reasonable on the business side). Well they gouged me, but that was also the year someone stole DD2’s ID and used her as a dependent – she was 17 at the time and they could get ‘extra’ tax credits with her. The CPA firm got identified with the IRS that DD2’s social security number was used on a prior return. So now, DD2 is the only one of the family that has to get assigned a 4 digit code from the IRS each year to file her taxes.
I get it on how employers are cutting benefits - they are trying to save on cost of doing business and maximizing on profits. It is a balancing thing on keeping good employees and developing loyalty. Some people have no loyalty on both ends - employer and employee.
We lived through some of these changes with pensions, 401(k), other retirement benefits cut. When companies (and government too) had people that were on the former retirement stuff and the newer employees on the lesser stuff. Friends with Wyle, Northrup-Grumman to name a few. DH’s company changed hands, so that is how our benefits went from pension plus 401k to just 401k.
In our 50’s to now, we have spun off money from DH’s 401k to purchase insurance company annuities for our retirement cash stream, supplementing our social security. We are slowly converting some 401k money into Roth IRA prior to required minimum distribution time, to save some on taxes - or spread out the tax load.
On recent years, Turbo-Tax has got everything we need, but if I have another issue, will go back to my user friendly CPA firm.
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H was an accountant and systems analyst before law school. He refuses to hire an expert, figuring that he has the skills and the ability to research tax code for anything complicated. At least our taxes are simple (as a financial regulator, we are significantly restricted as to potential investments and outside income, and we have to do the financial disclosure as well). However, we STILL don’t have wills. Could never agree on a guardian for the guys (obv no longer an issue!), but we have different ideas on splitting assets down the road. Hard for me to do anything without him also coming to the table.
Would be nice if he’d be willing to discuss where we might like to live after he retires (and a timeline for that would be nice, too).
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This has probably been discussed here before, maybe even multiple times.
What are people here planning, or already doing, regarding taking social security - 62? Full eligibility date? 70?
My husband will get his first SS check very soon…waited until 70.
I am subject to the offset and windfall provisions of the SS act, so my SS benefit barely covers my Medicare premium. So…I decided to take it at age 62 and enjoy the three years of SS (all $220 a month of it) for those three years. I knew that after that, I would have almost zero net deposit, and that is true.
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Because we didn’t figure SS into our retirement picture, both our financial planner and tax attorney told us to take it whenever we wanted especially given that we are both in good health with longevity on both sides, so taking it early might even pay off for us. We both took it when we turned 64.
When we talked about this a while back, I posted:
Waiting only means higher SS payments. If SS will be the primary source of retirement income, waiting for the higher payout makes sense. Depending on how SS fits into your retirement finances and strategies, there are many nuances to consider regarding the timing of withdrawals. Calculators are fine as a place to start, but a good accountant or tax attorney will be able to apply your specific financial context to that raw information. In our case, we will take both early (but not 62) because our combined SS payments are more than we need to cover our current lifestyle and mean that we don’t need to touch our retirement portfolio if we don’t want to. Allowing the portfolio to continue to grow with none to minimal withdrawals beats the incremental returns of waiting for slightly higher SS payments later. We do plan to spend the portfolio, but the growth and tax benefits of taking SS early make the most financial sense for us.
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We are holding off until 70. It gives us more time to do Roth conversions. The increase in SS due to waiting is guaranteed, so we know what we will get in exchange for using our IRA money while waiting. However, if we decide beforehand that it makes sense for one or both of us to take it earlier, we will. In other words, we’re being flexible about it.
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70 here. Roth conversions and longevity insurance.
If you are coming of age, suggest you run your numbers on the free website site. Click on the button top middle of page to add specific details.
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That’s true, but not great Finance, which woudl use a discount rate for similar assets. Discounting guaranteed SS payments with the same discount rate as you would use for a riskier stock portfolio is generally not recommended in Finance 101.
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We plan to wait until 70 to take H’s social security.
Mine is lower and we might take it earlier. Our financial planner said we can evaluate on a year-by-year basis starting when I reach 62 and decide depending on where we are with Roth conversions, how much we need for health care, etc.
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Similar situation here.
I have only reluctantly been on board with hubby (older) about him waiting til 70 for SS. Our pensions are not what we had once hoped for, so it does mean we are spending down assets while waiting. We are not sure yet what we’ll do for me - might not wait til 70. The thing I still struggle with is that based on family history and gender, I’m the one likely to live longer but hubby is the one waiting. (Our earnings were in the same range, so we’ll likely each be doing our own SS not spousal benefit.) But I’ve been following advise of those who have studied our situation more closely.
I’m still so confused by spousal benefit. I have a mental block where that is concerned.