A good accountant is worth the extra expense and here are a few tips to ensure you have the right person in place working for you.
1. Have your accountant prepare both your business and personal taxes.
This way they have an accurate picture of how your business income impacts your personal taxes. They should also be able to give you recommendations on whether it makes sense for your corporation to pay you a salary vs pay income distributions as each are taxed differently.
2. Have your accountant give you tax planning advice before the end of the year.
Good accountants will meet with their clients in November/December and give them advice on year-end tax write-offs so their clients don’t pay massive corporate/personal taxes in April. If your current accountant doesn’t do this or is too busy to work with you at the end of the year, then it is time to find a different accountant that has your best interests in mind.
3. If you have doubts about the quality of service your accountant is providing, it is worth the extra expense to hire a different accountant to prepare the same returns.
Each accountant prepares returns differently, some even have different depreciation schedules or utilize different software that can make a massive impact on how your income gains are taxed. Years ago, I ran a comparison of the same return between 2 accountants (my existing accountant and a referral I had from a business associate). The newly referred accountant was able to save me $8,000 in payable income tax that the first accountant had missed. Your accountant should be fighting for your business and your tax prep/return fees are tax deductible as well. Spending an extra few grand on a good accountant that saves you $20,000 or more annually is worth the investment.
If you feel you may need to look for a new accountant, here are a few tips on how to choose the right one:
1. Are they well versed/experienced in your industry.
For example, do they handle other small business owners in manufacturing or construction. If your accountant doesn’t have multiple clients in the same industry, then they won’t have the in-depth industry knowledge needed to help maximize your savings.
2. Check what memberships they are members of.
Are they members of the National Association of Tax Professionals, American Institute of CPAs, or any other professional trade associations?
3. How does your accountant bill?
Do they bill a charge every time you ask a question, or hourly, or have bundled services they offer at a discount? If they charge hourly, then find someone else to handle your financials
4. How much technology does your accountant use?
At the very least they should be able to e-file and electronically send you copies of your returns. When they send tax returns are they password protected? With identity theft on the rise having password protected files is becoming the standard.
Keep in mind both you and your accountant are a team working to enhance the profitability of your business. Make sure you get your accountant financial information in a timely fashion. If you are continually waiting to the last minute to get your paperwork to your accountant and then expecting them to give you superior service then you are making a mistake. The more time the accountant has to work on your statements the better job they will do and appreciate you more as a client.
A good accountant is worth the extra expense and here are a few tips to ensure you have the right person in place working for you.
1. Have your accountant prepare both your business and personal taxes.
This way they have an accurate picture of how your business income impacts your personal taxes. They should also be able to give you recommendations on whether it makes sense for your corporation to pay you a salary vs pay income distributions as each are taxed differently.
2. Have your accountant give you tax planning advice before the end of the year.
Good accountants will meet with their clients in November/December and give them advice on year-end tax write-offs so their clients don’t pay massive corporate/personal taxes in April. If your current accountant doesn’t do this or is too busy to work with you at the end of the year, then it is time to find a different accountant that has your best interests in mind.
3. If you have doubts about the quality of service your accountant is providing, it is worth the extra expense to hire a different accountant to prepare the same returns.
Each accountant prepares returns differently, some even have different depreciation schedules or utilize different software that can make a massive impact on how your income gains are taxed. Years ago, I ran a comparison of the same return between 2 accountants (my existing accountant and a referral I had from a business associate). The newly referred accountant was able to save me $8,000 in payable income tax that the first accountant had missed. Your accountant should be fighting for your business and your tax prep/return fees are tax deductible as well. Spending an extra few grand on a good accountant that saves you $20,000 or more annually is worth the investment.
If you feel you may need to look for a new accountant, here are a few tips on how to choose the right one:
1. Are they well versed/experienced in your industry.
For example, do they handle other small business owners in manufacturing or construction. If your accountant doesn’t have multiple clients in the same industry, then they won’t have the in-depth industry knowledge needed to help maximize your savings.
2. Check what memberships they are members of.
Are they members of the National Association of Tax Professionals, American Institute of CPAs, or any other professional trade associations?
3. How does your accountant bill?
Do they bill a charge every time you ask a question, or hourly, or have bundled services they offer at a discount? If they charge hourly, then find someone else to handle your financials
4. How much technology does your accountant use?
At the very least they should be able to e-file and electronically send you copies of your returns. When they send tax returns are they password protected? With identity theft on the rise having password protected files is becoming the standard.
Keep in mind both you and your accountant are a team working to enhance the profitability of your business. Make sure you get your accountant financial information in a timely fashion. If you are continually waiting to the last minute to get your paperwork to your accountant and then expecting them to give you superior service then you are making a mistake. The more time the accountant has to work on your statements the better job they will do and appreciate you more as a client.
