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Small Business Owners: 8 Smart U.S. Tax Questions to Ask Your Accountant at Tax Time

Make filing business taxes in 2021 more manageable and more streamlined by starting a conversation with your account before filing your taxes this season.

Filing business taxes is a chore that most of us would like to avoid. It is time-consuming and complicated, and it can be challenging to know whether you got it right, even if you work with a tax professional.

Asking your accountant the right questions can make the process easier and ensure that your business is taking full advantage of the deductions and credits it can receive. Make filing business taxes in 2021 more manageable and more streamlined by starting a conversation with your account before filing your taxes this season.

1. How can I help you do a better job for me?

Although your accountant works for you, as a business owner, making your accountant’s job easier is actually a huge benefit for you. When an accountant can easily track expenses and income, for example, they are much more likely to spot potential areas where additional deductions or credits might be available. Keep in mind that your accountant can only be as good as the information you provide.

Organizing documents a certain way or ensuring that you deliver necessary information by a certain date may also be an easy way to help your accountant do better work for you.

2. Which documents should I keep?

Document retention is a big deal when it comes to taxes. You should not only know which documents your accountant needs, but you should also ask how long you need to retain documents. Asking whether your accountant keeps documents for you is also a good idea.

Some of the most common documents you will need include:

  • Prior year business tax returns
  • Financial statements, such as income statements and balance sheets
  • General ledgers
  • Business agreements and contracts
  • Payroll records and forms
  • Business licenses and permits
  • Insurance documents

The information you should retain will depend on the type of business that you have. How long you should keep them will vary based on what they are, too. Your accountant will be able to help you create a checklist that fits with your business needs.

3. What is the best way to prepare for the upcoming tax season?

It is no secret that gathering information to do your taxes can be very time consuming. However, you can often take steps throughout the year to help you with organization and document retention. Your accountant can often work with you to develop a plan to prepare you, so you are ready when January comes around. Accounting software and record organizational systems might both be helpful options for your company.

4. What do I need to know about estimated tax payments?

Most business owners will have to pay quarterly tax payments. These income tax payments address the quarterly payment that an employer would have to make on your behalf if you were paid as a W-2 employee. Because no one is making that payment for you, you need to take that step on your own.

Have a conversation with your accountant about how to go about making these payments, how much they should be, and how you can prepare for them. If you do not make the payments or the amount you paid is below a certain level, you run the risk of incurring penalties and fees on late payments.

5. How can I better manage my cash flow?

Some businesses make the mistake of assuming that money in the bank means that they have money to spend. In reality, making poor spending choices today can put your business in jeopardy for years to come. Instead, talk to your accountant about the best way to track income and expenses and get tips on how you can manage your cash flow better.

Your accountant should be able to explain your general cash flow to you and point out problem areas. They can also often assist in creating a plan to improve your cash flow as well, whether that means creating projections for the year or a few years ahead or simply making more accurate monthly projections and estimates.

6. How can I make this tax season better than last year?

If you had nightmares getting ready for tax season because of last year’s horrible experience, you likely need to make some changes in filing your business taxes in 2021. Ask your accountant for some tips targeted to your business about how to make the experience better. Maybe that means tracking transactions better throughout the year or reviewing your expenses in-depth for missed deductions and credits.

7. What is my break even point?

Your break even point is where your total sales equal your total expenses. Hopefully your company surpasses the break even point, but it can take small businesses several years to get there.

Businesses should keep a close eye on the bottom line. However, if you are just starting out or if you have only been in operation for a few years, you may not realize how much money you need to bring in the door to cover all of your expenses.

8. What law changes have occurred that will affect my business?

Tax laws have gone through more changes recently than they have in decades. Have a conversation with your accountant about the changes and ask whether they will affect you. Asking this question will often trigger a discussion about compliance needs or ways to save money on your tax obligations as a business.

Each industry is different as well. Ask about industry-specific rules and regulations that might affect you and your tax situation.

You can save yourself and your accountant the headache this year when it comes to filing your taxes by asking these questions. If you’re looking for a way to better log and track expenses and more for your business, BQE CORE can help. See how our powerful, award-winning accounting software helps your business crunch numbers.


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