The older you get, the more complicated life gets. That goes for your finances too, which makes an accountant invaluable.
No, we are not on the take of the accounting industry or pushing for full employment of actuaries everywhere. But there is simply no getting around the fact that life is complicated, the U.S. tax code is complicated, and everyone can benefit from good advice.
For taxes, help can be as simple as buying a computer program that assists you in itemizing deductions. Help can also be had in the spring of each year by walking into the local office advertising tax filing aid in the window of an office on Main Street. Earners and investors can also spend thousands of dollars a year for an ongoing relationship with a local accountant with a staff of people working for them.
Help can be especially important as investing activity grows. There are different tax treatments for gains from long- and short-term stock holdings, dividends, corporate bond interest, government bond interest, options gains and losses, and any other financial product — even Bitcoin — that finds its way into a portfolio.
What’s more, timing can matter. Investors can — legally — minimize taxes by selling losers at the right time and holding winners into a new tax year. If nothing else, a tax accountant can keep track of all the tax implications of an investors’ trades and products.
Bottom line: Take the help. Yes, it costs money, but it’s money well spent. And just think about how much fun it will be to tell your friends about “your people” helping you manage your finances.
I’ll tell you more about taxes — and how an accountant can help manage them — in the video.
But first, a pop quiz:
How long do you have to be out of a losing investment to preserve the loss for tax purposes?
Watch this video for the answer and much more.