By Tom Schiller, CPA, CFP®
Ask any CPA what they wish their clients would do differently, and you will hear a version of the same answer: start earlier. By the time most people sit down with their accountant, the year is already over, the numbers are locked, and the best opportunities have quietly expired.
A smooth tax season usually comes down to a handful of things done before December 31. Here is what your CPA would love to see from you before the year closes.
Start the Conversation Before the Year Ends
The most common wish is simple: talk before December 31, not after.
Once the calendar turns, your accountant can only report what happened. Before it turns, there is still room to change the outcome. A conversation in November or early December is worth far more than the most thorough appointment in March. By then, the return is a history lesson.
Know Which Deadlines Are Real
Not every year-end deadline is actually December 31, and mixing them up leads to missed opportunities in both directions.
Several moves generally must happen by December 31 to count for this year: employee contributions to a 401(k) or similar plan, Roth conversions, selling investments to realize gains or losses, charitable gifts, and required minimum distributions for most people who are subject to them. Others can wait. IRA and health savings account contributions for the year can generally be made up to the filing deadline next spring.
Knowing which is which keeps you from rushing what can wait and from missing what cannot.
Get Your Documents in Order Now
Nothing slows down a return like a scramble for missing paperwork. Your CPA would much rather you start gathering things now, while they are easy to find, than reconstruct the year under deadline pressure.
That means knowing where your income documents will come from, keeping receipts and acknowledgment letters for charitable gifts, tracking the cost basis on investments you sold, and holding onto records of any major financial events. Our tax season checklist covers what to have ready for both your accountant and your advisor.
Tell Them About the Big Stuff
This is the one that causes the most avoidable pain. Your CPA cannot plan around an event they do not know happened.
Did you change jobs, exercise or sell equity compensation, sell a property, start a business, take a large retirement distribution, or receive an inheritance? Each can meaningfully change your tax picture, and each is far easier to handle well when it is known in advance rather than discovered on a tax form in February. If something significant happened this year, the time to mention it is now.
Look Ahead at What You Will Owe
If any of those big events happened, your CPA’s next question is whether enough tax has been paid in along the way. Withholding from a paycheck rarely keeps up with a stock sale, an equity vest, or a large distribution, and the gap usually surfaces as a balance due in April, sometimes with a penalty attached.
A quick projection before year-end shows whether you are on track. If you are short, there are still options, such as increasing withholding from your final paychecks or making an estimated payment, with the last one for the year generally due in mid-January. Both are far easier to handle now than a surprise in April.
Plan the Moves That Touch Each Other
Here is something your CPA knows that many people do not: the big year-end decisions are connected.
A Roth conversion changes your taxable income. A charitable gift changes your deductions. Harvesting investment losses changes your gains. Adjusting withholding changes what you owe at filing. Made separately, these decisions can work against each other. Your accountant would much rather see them planned together as one coherent tax strategy than arrive piecemeal and sometimes in conflict.
The challenge is that your CPA usually sees only the tax piece, while your investments, your giving, and your broader plan sit elsewhere.
Make Sure Someone Is Connecting the Dots
Your CPA focuses on your taxes. Your attorney focuses on your estate documents. Your financial advisor focuses on your investments and your plan. Each is excellent at their part, but unless someone takes responsibility for the whole, gaps form. A tax strategy that conflicts with an investment decision. A charitable plan that does not match the estate documents. Opportunities that fall through the cracks because everyone assumed someone else was watching.
At Wealth Dimensions, connecting those dots is central to how we work. Rather than leaving you to relay information between your advisors, we coordinate directly with your CPA and your attorney so your year-end decisions reflect the same set of facts. That is how the moves your accountant hopes for actually get made, on time and in concert.
Beat the December Rush
One more thing your CPA would quietly appreciate: do not wait until the final week. December fills up fast, and the best planning happens with a little room to breathe. Acting in November or early December means each decision gets the attention it deserves.
For a closer look at the specific moves worth considering, read our companion piece, Year-End Tax Planning: The Moves That Still Make Sense Before December 31. And if you would like to go into this year-end with a plan rather than a scramble, we are glad to help and to coordinate with your CPA so nothing falls through the cracks. Call (513) 554-6000 or visit wealthdimensions.com.
Frequently Asked Questions
When should I meet with my CPA for year-end planning?
Ideally in November or early December, while there is still time to act on what you discuss. Once December 31 passes, most planning opportunities for the year are closed and your accountant can only report what happened. At Wealth Dimensions, we coordinate with clients’ CPAs ahead of year-end so decisions are made while they still count.
Which year-end deadlines are actually December 31?
Employee contributions to workplace retirement plans, Roth conversions, sales of investments to realize gains or losses, charitable gifts, and most required minimum distributions generally need to happen by December 31. IRA and health savings account contributions can generally be made up to the filing deadline. The Wealth Dimensions team helps clients separate the true deadlines from the flexible ones.
What should I tell my CPA before the year ends?
Share any major financial events from the year, such as a job change, equity compensation activity, a property or business sale, a large retirement distribution, or an inheritance. Each can change your tax picture, and they are far easier to plan around when known in advance. Wealth Dimensions works alongside your CPA so these events are reflected in both your tax plan and your financial plan.
About Tom
Tom Schiller, CPA, CFP®, is a Partner and Financial Advisor at Wealth Dimensions, an independent wealth management firm based in Cincinnati, Ohio, where he specializes in wealth transfer, tax minimization, and planning for liquidity events. Drawing on his extensive background in tax, assurance and wealth management at a national accounting firm, he delivers comprehensive, tailored financial planning to high-income clients and business owners. He holds an MBA from Northern Kentucky University and the CERTIFIED FINANCIAL PLANNER® designation.
Disclosure
Not an offer of tax advice. For informational and illustrative purposes only.
For informational purposes only. Not intended as investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000. Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.