Do your CPA and financial advisor talk to each other?

Two professionals, two separate conversations

Most people have a CPA for their taxes and a financial advisor for their investments. It is easy to assume the two are talking to each other. In many households, they never do.

A financial advisor can be great at the big picture: putting a long-term plan in place, managing your investments, and planning your retirement timeline. Some will even review your tax return. But tax law runs deep, and it can get complex fast depending on your situation. That depth is what a CPA works in every day.

Why it matters for your taxes

Retirement and investment decisions carry real tax consequences. A few common examples:

• IRA withdrawals: money you take out of a traditional IRA counts as income on your tax return.
• Roth conversions: moving money from a traditional IRA into a Roth adds to your taxable income for that year.
• How accounts are held: the type of account an investment sits in can change what gets taxed and when.

Financial decisions affect your tax situation more often than most people realize. When the person making the decision and the person preparing the tax return are not looking at the same plan, the tax side can show up as a surprise in April.

Planning on two timelines

Good planning works on two timelines at once: your tax bill this year, and the taxes you pay over your whole lifetime. Sometimes those pull in opposite directions. A move that raises this year’s tax bill may lower your lifetime taxes, or the other way around, and the real work is balancing the two.

That balance is easier when one firm handles both, so the people managing your investments and planning your retirement are also the ones responsible for your tax situation. If your CPA and advisor work separately, a good first step is to make sure each one knows what the other is planning before a big move like a withdrawal or a conversion.

How we handle it

At Sansone CPA & Financial, we coordinate your tax, investment, and retirement decisions as your advisor and your CPA in one relationship. That is what our fee-only wealth management in Crystal Lake, IL is built to do.