Having a proactive tax team in your corner is a significant advantage. But even the best tax strategy falls apart when life moves faster than the communication does. If you ended up with an unexpected tax bill this year, there’s a good chance something slipped through the cracks.
Here are the most common reasons clients unintentionally create their own tax surprises.
You skipped your estimated payments
Getting behind on estimated tax payments is easy to do, even when you know how much you need to pay each quarter. Life gets busy and cash flow gets tight. But the math falls apart quickly when you miss or skip a payment or two.
Paying your quarterly estimates consistently spreads your tax liability evenly across the year and helps you avoid penalties and interest.
At the start of the year, be sure to mark estimated tax due dates into your calendar so this necessary tax planning strategy doesn’t slip your mind.
You sold something without a conversation first
This is one of the most common and costly surprises we see:
- You sold a rental property and didn’t realize how much depreciation recapture was sitting on that asset
- You liquidated a brokerage account or sold concentrated stock without considering your capital gains exposure
Timing and structure matter enormously in these situations. Always discuss future plans for the year during your annual tax planning meeting to understand tax implications before you sell.
Your situation changed and you didn’t mention it
Your tax picture is built on the information your team has. When that information changes and they don’t know about it, the plan falls apart.
Marriage, divorce, a new income stream, a spouse going back to work, a business expansion or contraction, a raise or bonus, a new rental property, changes to your retirement plan contributions. All this stuff needs to be brought up during planning.
If you’re not sure whether something is worth mentioning, mention it anyway.
