Tax Talk: 10 Questions Every Entrepreneur Should Ask Their Tax Advisor
“A person doesn’t know how much he has to be thankful for until he has to pay taxes on it.”
– Ann Landers
If you’ve been around for a while, then you know one of the most important things I iterate to the Finance Savvy CEO® community is the importance of finding domain experts for your business needs!
Think of it this way…
Sure, I could go to my general physician for many things from a rash to a sprained toe, but I’m going to have far more success if I head to the dermatologist for that rash and to the podiatrist for that painful toe.
It works similarly in the finance world my friends, and I could not recommend enough that you head to a TAX ADVISOR for tax support.
Now, I know I am going to get pushback on this recommendation, saying “But I have an accountant, can’t they just do it?” I’m not saying that they CAN’T, BUT I hold firm on my recommendation…
Read my physician analogy I just wrote, then go book an appointment with a TAX ADVISOR who studies tax policy day in and day out, and you’ll be back to thank me later. 🙂
Now I get it, tax advisor meetings can be intimidating as it feels a bit like an asymmetry of information where tax advisors know far more than you.
But don’t worry! To help you get prepared and build your confidence to be able to engage in helpful dialogue, I’m sharing 10 questions you should be asking your tax advisor during your meeting.
Let’s dive in :
TAX CREDITS
1. Are there specific tax credits available to me based on my business location or industry?
2. Are there any new or existing deductions that my business may be eligible for?
Exploring tax credits specific to your business location or industry can uncover potential opportunities for savings. By asking your tax advisor about available tax credits your goal is to:
- Maximize your deductions
- Minimize your tax liabilities
- Gain insight into industry-specific incentives or government programs that may benefit your business.
This knowledge empowers you as a Finance Savvy CEO® to make informed decisions that optimize your financial outcomes.
TAX PLANNING
3. What are the key tax planning strategies I can implement for my small business this upcoming year?
4. How often should we review our tax strategy and make adjustments based on changes in tax laws or business circumstances?
5. Do you see ways that I can optimize my business expenses for tax purposes?
Effective tax planning is essential for small business success. By discussing key tax planning strategies with your tax advisor your goal is to:
- Proactively manage your tax obligations
- Position your business for financial growth
- Stay compliant
- Capitalize on opportunities to minimize taxes.
Engaging in these discussions builds your confidence as a Finance Savvy CEO®, empowering you to take a proactive approach to financial management.
BUSINESS STRUCTURE
6. Based on what you’re seeing, Is my current business structure still the most tax-effective, or should I consider making changes?
Your business structure plays a significant role in your tax obligations. By consulting with your tax advisor about the tax implications of your current business structure your goal is to:
- Assess whether it remains the most tax-effective option or if changes are warranted.
- Be able to make strategic decisions that optimize your tax efficiency and financial performance.
This strategic approach reinforces your confidence as a Finance Savvy CEO®, giving you the ability to navigate complex financial decisions with clarity and foresight.
TAX LAW
7. Are there any anticipated or foreseeable changes in tax laws in the near future that could affect my business?
8. Can you provide a summary of important tax deadlines that my business needs to meet throughout the year (i.e., estimated tax payments)?
Staying informed about changes in tax laws is crucial for small business owners. By seeking insights from your tax advisor:
- You can proactively adapt your tax strategy to mitigate risks and capitalize on opportunities.
- You can stay organized and compliant throughout the year.
This proactive approach to tax compliance and planning instills confidence in your ability to navigate regulatory complexities as a Finance Savvy CEO®.
TAX AUDIT
9. If needed, can you assist with IRS tax audits? And what steps should I take if I get audited?
10. Are there any specific records or documents that I should prioritize keeping for tax filing purposes?
Facing an IRS tax audit can be daunting, but proper preparation and guidance from your tax advisor can ease the process. By discussing your tax advisor’s ability to assist with IRS audits and understanding the steps you should take if audited:
- Helps you to feel reassured and prepared for any potential challenges.
- Empowers you with the information to maintain accurate documentation to support your tax returns and defend against audit inquiries.
This proactive approach to tax compliance and audit readiness helps you to take actions aligned with financial integrity and accountability.
THE BOTTOM LINE
Tax season doesn’t have to be a daunting time for small business owners and entrepreneurs. By seeking guidance from a qualified tax advisor and asking the right questions, you can better position your business for financial success while staying compliant with tax laws and regulations.
Remember, your tax advisor is there to help you navigate the complexities of the tax landscape and maximize your savings. They are a part of your financial trifecta! So don’t hesitate to schedule that meeting and come prepared with these essential questions. You’ll thank yourself later for taking proactive steps to secure your business’s financial sustainability and become a Finance Savvy CEO®!
Need help in getting ready to meet your tax advisor? You can apply for private advisory here and ensure that your financial data is accurately presented before your meet-up with your tax advisor!
BONUS: Download this summary guide with the 10 questions with a list of tax deductions for small businesses.