Don’t go cheap when filing

To keep things running smoothly, have all records handy, and consider a long-term relationship. Not only is it advantageous to file taxes through a CPA, it’s also smart to have all relevant records readily available – no matter who is helping with the return.

“Not only do I strongly advise you to use a reputable CPA that you can trust, I also think you should try to establish a long-term relationship with him or her,” Marriage says. “Think of a financial professional as similar to a doctor or lawyer – the better they know you, the better off you’ll be.” 

Remember that high-income earners pay the vast majority of income taxes – don’t volunteer more. Taxpayers with incomes exceeding $100,000 earn 60 percent of the country’s income; yet contribute 95.2 percent of the income taxes, according to recent estimates from Congress’s Joint Committee on Taxation. Additionally, those earning more than $100,000 – a bit more than 20 percent of taxpayers – pay for 75.7 percent of total federal taxes, excluding the burden on corporate and investment taxes.

“There are many high-income earners who are passionate about their careers and love what they do; they care more about their work than their income,” he says. “These tend to be the folks who need reminders that there are legal avenues available for protecting their hard-earned money.”

High-net-worth individuals should consider Charitable Remainder Annuity Trusts (CRAT). Many people, even financial professionals with years of experience, do not know about CRAT, a form of financial protection that Marriage often teaches to CPAs. CRATs are a flexible and effective instrument used in financial and estate planning that provides a significant tax shelter for any assets and property placed within it. That allows any assets to increase in value without being taxed on the increase. A well-constructed CRAT can provide financial security for the annuitants.