Many Americans who don't earn as much as they'd like think that being a high earner would solve all their financial problems. But high-income earners face a variety of their own challenges when it comes to their finances.
If you find yourself dealing with late payments, high taxes, a lack of savings, or confusion over how to plan for retirement, you could use help no matter what you earn. And a CPA (certified public accountant) can help. Here's how.
1. Organize and Do Bookkeeping Tasks
Whether you're busy with a demanding career, have kids to care for, or are always on the road, it's hard to get organized and keep up with common bookkeeping work. But this is an important foundation of all financial success.
You need to pay bills on time, avoid unnecessary fees, know how your cash is flowing in and out, avoid fraud, and understand what you spend in various categories. Your accountant may take on some or all of these basic tasks themselves or they may outsource it to reliable bookkeepers or staff.
2. Improve Your Tax Strategy
Lowering your taxes when earning a significant income is a multi-faceted project. It may involve investing in tax-advantaged accounts or assets. It often includes harvesting tax losses and minimizing capital gains taxes. You may be able to time or adjust taxable compensation, use gift tax exemptions, and utilize business entities to lower personal taxes.
Unfortunately, most people aren't familiar with all the possible tax strategies they could be using. Your accountant is.
3. Bolster Retirement Planning
How prepared for retirement do you feel? Many Americans, including those who earn higher incomes than average, do not feel confident.
How can an accountant help? They have access to financial planning and forecasting tools to help you identify target numbers and earnings. They can also assist you in understanding the financial and tax implications of options like annuities, tax-advantaged savings, and using business entities for passive income.
4. Do Estate Planning
If you may have a large estate when you pass away, the time to start organizing it and preparing for tax issues is now. To plan correctly, you need to understand the effects taxation will have, the variations in net results for different assets given to different heirs, and how to prepare some assets (such as a business) for succession. A financial planner can help with some of this, but the vast majority of these issues call for a trained CPA.
Where to Start
Could you use help in any of these important areas? No matter what financial challenges you feel that you aren't winning, a certified public accountant can help. Make an appointment today to learn more about their bookkeeping, tax planning, retirement planning, and estate services.