Losi encourages long-term tax planning for clients with significant fluctuations in income, such as those who recently left full-time positions for consulting work. “The individual gets a W-2 their whole life, then decides to venture out into the world of independent contractor,” he said. “Instead of W-2, they get 1099 and think, ‘Wow I’m being paid more!’ They don’t realize that the taxes aren’t taken out.”
“For clients who have a lot of moving parts with their tax situation, we meet throughout the year and review all aspects of their income and assets. We want to discover all taxable events as soon as possible,” MacCollum said. “We want to project the tax balance so it can be dealt with proactively and doesn’t become an unwelcome surprise.”