How to Help Your Tax Advisor Help You
Business owners consistently identify their tax preparer as their most trusted advisor. A good tax preparer can advise you on everything from how to save money to what kind of financing to pursue. At tax time, a tax preparer can help you avoid mistakes and significantly reduce your tax liability.
If you decide to work with a tax preparer – or even if you already have one – it is important to know how to get the most from your relationship. These tips can help:
As most tax preparers charge by the hour you will want to make it easy for them to work with you. Have all your expenses assembled and categorized as best you can, ideally in a spreadsheet (or even better, in a secure hosted application). It might be easier for you to bring receipts and statements in a shoebox, but you’ll end up paying your preparer to sort them out.
You need to be honest with your tax preparer so they can do an effective job. For example, if you are charging personal expenses to your business credit card, let your preparer know which ones are true business expenses. Your preparer will alert you to which expenses qualify as valid deductions to help protect you from fines or an audit.
Keep your tax preparer up to date on events at your company throughout the year, and consult with them about any big decisions before you make them. They are there to help you make smart financial decisions; take advantage of their expertise. For example, it might make sense to buy computer equipment in the current year to get the depreciation or tax deduction instead of waiting for next year when you may have more cash available for the purchase.
If you work with the same tax preparer for several years, they can get to know your business as well as your personal financial situation, and they can advise you accordingly. They will know in advance what to ask, for example, for your mortgage interest statements or real estate taxes. They can spot significant changes in revenues or expenses and recommend appropriate action(s) to minimize the tax impact and move you closer to your business and personal financial goals.
A tax preparer who knows your industry, your business and your personal financial situation can be an invaluable partner for your business and financial success. A strong relationship with your tax preparer can enable you to focus on the key aspects of running your business, such as winning new customers or developing new products.Print this article