We are reaching the home stretch – only a few more weeks left in the year! Even though the end of the year is close, it’s not too late to schedule a meeting to talk with your CPA or tax professional about taxes.
“But taxes don’t have to be paid until the Spring.”, you might protest. Even so, without an advance meeting with your CPA or tax professional, you may find yourself with a looming tax bill – and no means to pay for it! Rather than facing the fallout, there are things you can do now to prepare.
If you schedule a meeting with your CPA or tax professional, what items should you discuss? Here are five important questions you should ask:
1. What are the most recent tax law changes?
In the last few years, it seems like every tax deduction went through a revision. Treatment of entertainment and meal expenses, as well as corporate tax rate changes, are some of the most talked-about issues among our clients.
Even if you have read up on the tax changes, you should sit down and talk with your CPA or tax professional about how all of these changes will affect your business and you as an individual taxpayer.
2. Should I consider an entity change for my business?
Recent changes in corporate tax rates as well as pass-through deductions might result in some businesses having to pay more in taxes this year. Exploring an entity change with your CPA is an excellent way to determine if you can lower the amount of taxes you owe. Much of this conversation will depend on your total revenue year to date, so be sure to bring in a copy of your most recently reviewed Income Statement for them to consider.
3. How do I treat fixed assets that were sold or purchased this year?
If you have purchased or sold any fixed assets for the business, now would be a good time to talk to your CPA or tax professional and let them know. Be sure to furnish them with a recent Balance Sheet as well as a list of all current assets.
Together you can determine which fixed assets should be written off this year and which ones should be depreciated. It would be good to discuss with them any upcoming fixed asset purchases as well, particularly purchases of property.
4. What should be my strategy for taxes this year?
A review of your Year to Date totals will assist your CPA or tax professional in estimating the potential business and individual taxes owed for the year.
In addition, they can provide guidance on the most effective strategy to reduce your tax liability. Perhaps there are additional deductions or tax credits applicable to your business. In some cases, they may recommend making estimated tax payments to lower the overall bill come tax time.
Keep in mind that the most effective tax strategy may change from year to year, so consider scheduling more meetings to talk about tax strategy throughout the year.
5. How will my business plan impact my future taxes?
One of the objectives of a CPA or tax professional is to assess the tax implications of business decisions. That means they can be a great resource for discussing the future of your business.
You may find after consulting with them that there are challenges and obstacles you hadn’t thought of. If you also employ a bookkeeper or internal accounting team, a CPA can also provide insight on how to better maintain your financial records.
It’s not too late to get that tax conversation scheduled! Did you know that our bookkeeping firm refers our clients to expertly qualified CPAs and tax professionals for their taxes? Contact us to learn the other benefits of a financial partnership with us!