What You Should be Discussing with Your Accountant Each Quarter
A business accountant’s value is not in just filing your taxes each year. Their greatest value is in tax planning and helping you to legally pay the smallest tax bill possible each year. Many of the decisions you make in business involve income, expenses, and taxes, and planning in advance can mean a lower tax bill.
Meeting with your accountant each quarter may seem like overkill to some small business owners, but there are valid reasons to do so that can put more money into your pocket at tax time.
Are your quarterly payments accurate and sufficient?
Most small business owners pay quarterly estimated tax payments based on estimated taxable income and the previous year’s tax bill. If the current year’s income and expenses change significantly, it is possible that an adjustment should be made to the quarterly payments. This could mean paying more or paying less, but can help to avoid surprises at tax time or penalties and interest.
Get current information on tax law changes.
One thing you can count on when it comes to government and taxes is that changes happen. They could be immediate, but often changes are announced in advance. If announced coming changes affect your business and tax bill, discussing them with your accountant when they’re first announced gives you time to make adjustments in your spending or other areas that can save tax dollars or avoid surprises at tax time. At this quarterly meeting, you can work out a plan if needed for adjustments to avoid tax surprises or penalties.
Discuss possible or planned business operations changes.
Small business operations involve constant decisions involving employees, staffing, purchases, products/services changes, overhead expenses, and more. Perhaps you are thinking of hiring or shrinking staff. You may be considering changes in insurance coverages or other overhead items. The quarterly meeting with your accountant gives you the opportunity to discuss them in the context of your tax bill.
Discuss large expenses involving depreciation.
Depreciation is a deduction that can be managed for maximum tax savings or cash flow reasons. If you are considering the purchase of real estate, vehicles, production, or business equipment, discussing the timing and method of depreciation with your accountant will assure that you are timing the purchase well and depreciating the asset properly.
Check your bookkeeping and recording procedures.
The quarterly meeting provides an opportunity to check your processes with the accountant. Are you recording expenses properly? Will your records, especially related to high risk audit items like home office or vehicle expenses stand up to an audit? This is a validation of the old saying that “an ounce of prevention is worth a pound of cure.”
Do some long-range planning for growth.
You want to grow your business, increase profits, and possibly expand facilities in the future. Throwing out these ideas at the meeting with your accountant can help you to plan for how to fund growth, when to make changes, and how to document them for tax purposes.
The bottom line is that you are making decisions almost daily that can impact the health of your business, income, expenses, and your tax bill. You know your business, and your accountant knows theirs. Meet with your accountant quarterly to take advantage of their expertise.
With Tax Hive’s years of experience in tax and business services, we use our expertise to make your life easier so you can focus on building your business. Ever changing rules require a team who knows you, your business and the tax implications. Our tax professionals meet your needs while helping you manage tax risk, control costs and reap maximum benefit. If you’re ready to get started, CLICK HERE to see if you qualify for a FREE strategy session with one of our specialists today.