Accountants emphasize year-round tax planning benefits in New York

While tax preparation may happen once a year, tax planning is becoming increasingly proactive. Accountants say working with clients year-round helps identify opportunities, minimize tax liability and avoid costly surprises before filing season arrives.

“Tax work used to be mostly ‘rearview mirror compliance’ – we’d gather documents, prepare the return, file it, and everyone moved on until next season,” said Mario Di Luigi, CPA, AEP, partner, tax & business services, EFPR, a Springline company. “Today, the role has evolved into a year-round planning and advisory function.”

Di Luigi said the shift has been driven by increasingly complex tax laws, evolving reporting requirements and clients seeking guidance before making major financial decisions. Advances in technology have also made it easier for accountants to share timely information and stay connected with clients throughout the year.

“We can stay in closer contact through newsletters, articles, blogs and timely updates from the IRS and state taxing authorities,” Di Luigi said. “As a result, clients increasingly see their tax professional as a resource before they make major financial decisions, not after.”

That ongoing relationship has become even more important as IRS and state tax agencies have expanded their own technology. Di Luigi said clients are receiving more notices and correspondence questioning return items, increasing the need for accountants to respond quickly and navigate issues after tax returns have been filed.

“Working with a tax advisor throughout the year delivers two major advantages: fewer surprises and better decisions,” Di Luigi said. “Instead of discovering issues after the fact when the return is being prepared, you can make proactive moves while there’s still time to influence the outcome – maximizing tax savings before deadlines close and before transactions are finalized.”

For individuals, Di Luigi said year-round planning helps coordinate tax strategy with investment and financial decisions that may otherwise have unintended consequences.

“For example, a portfolio rebalance may trigger unexpected capital gains and a larger tax bill than anticipated,” he said. “Reviewing those moves in advance can help manage the tax impact, adjust timing and avoid penalties by fine-tuning withholding or estimated tax payments.”

Businesses see similar benefits when tax planning is integrated into broader operational and strategic decisions rather than treated as an annual compliance exercise.

“That includes evaluating business structure, planning for the tax implications of equipment or property purchases, forecasting the timing and payment of taxes, and assessing opportunities to acquire another business or prepare for a sale,” Di Luigi said. “The result is more confident decision-making, better cash-flow planning and a smoother, less stressful tax season—because the return becomes the final step in an ongoing plan, not a once-a-year scramble.”

Waiting until tax season, however, often means those opportunities have already passed.

“Many of the best tax-saving ‘levers’ are timing-dependent, so the most common missed opportunities show up when clients wait until the W-2s and 1099s arrive because by then, a lot of decisions are already locked in,” Di Luigi said.

Those missed opportunities often involve retirement contributions, estimated tax payments, withholding adjustments, capital gains planning, charitable giving and business purchases—decisions that generally must be made before key deadlines have passed.

Di Luigi cited New York’s Pass-Through Entity Tax (PTET) election as one example of why timing matters.

“We worked with clients well ahead of tax season who were anticipating major transactions, such as the sale of a business or the sale of a building,” he said. “Because we knew the transaction was coming, we were able to evaluate whether the PTET election applied, model the impact and get the election filed on time – before the deal was already in motion.”

Di Luigi said the greatest benefit wasn’t simply reducing taxes but preserving options and improving cash-flow visibility before major financial decisions were finalized.

Kristina Stamatis, CPA, partner at MMB+CO, said one of the biggest misconceptions is that tax planning happens when a return is prepared.

“The biggest benefit is that many of the most valuable tax planning opportunities are only available before a transaction takes place, not after the year has ended,” Stamatis said. “The key is to be proactive rather than reactive.”

For businesses, year-round planning can help maximize deductions and credits, improve cash flow and revisit business structure, succession plans and growth strategies as circumstances change.

For individuals, ongoing planning helps coordinate retirement contributions, investment decisions, charitable giving, estate planning, and withholding strategies.

“It can also reduce surprises at tax time, improve financial predictability, and provide greater confidence in decision-making throughout the year,” Stamatis said.

She recalled working with a growing business that was planning significant capital investments while also evaluating future ownership and succession strategies.

“Rather than waiting until year-end, we met with management throughout the year and prepared multiple tax projections under different scenarios,” Stamatis said. “Those projections helped the owners determine the optimal timing of equipment purchases, evaluate available depreciation incentives and coordinate compensation strategies with projected business income.”

The result, she said, was meaningful tax savings, stronger cash-flow forecasting and greater confidence in several important business decisions.

“More importantly, ownership was able to evaluate multiple scenarios and make strategic decisions based on projected outcomes rather than reacting after the fact,” Stamatis said.

Stamatis said that’s the real value of year-round tax planning. Rather than simply reducing taxes, proactive planning gives clients the clarity and insight needed to make better business decisions before critical decisions are finalized.

“A tax return tells the story of what happened last year,” she said. “Tax planning focuses on what happens next.”

Caurie Putnam is a Rochester-area freelance writer.