Lots of us set New Year’s resolutions, some of which we keep, and many of which we don’t. But there’s one resolution you should absolutely follow through on: the one about having a sit-down conversation with your accountant in January.
Most people only sit down and talk with their accountant once a year, if that. And usually it’s in April when they feel that tax deadline breathing down their necks.
But we highly recommend you do it at the beginning of the year: after your previous year’s financial picture is complete, but before the pre-tax rush.
Because You May Not Realize What’s Changed
The Tax Cuts and Jobs Act of 2017 brought some significant changes to everyone, but it had an especially large impact on the way small business owners handle their taxes.
Even if you got through the 2018 tax season relatively unscathed, you may not realize how the new regulations will impact your taxes this year.
In addition, a lot of things that occurred over the past year could affect your taxes in surprising ways, including large-scale investments, business purchases, and even depreciation of existing equipment.
Major personal life changes such as getting married, having a child, or going back to school can also make a big difference on your taxes.
The earlier you sit down with your accountant, the sooner you can figure out the impact and what you need to complete your taxes in the coming year.
Because You’ll Need That Time to Prepare
For many small business owners, taxes are complicated. Especially if this is your first time working with an accountant, you may not realize what documentation you need to provide and you don’t want to be stuck looking for important documents at the last minute.
Your accountant can establish a system and practices for you that will make handling your taxes easier and less time consuming. But if you’re just getting started with that system, having extra time to find the right documents and records can be invaluable.
Your accountant should help you clarify what documents you need to provide, including account statements, receipts, purchase records, and documentation of major life events that impact your taxes.
Ideally, you’ll leave your meeting with a clear idea of what’s needed, and how to get the information if you don’t have it.
Because You’ll Get More Out of the Process
Accounting and bookkeeping is a business with one big, looming deadline: April 15. The large majority of clients wait until close to the deadline to schedule an appointment with their accountant. And if you do that too, you could encounter some problems.
First, waiting until the last minute means you’ll be competing with all the accountant’s other clients to get a timely and convenient appointment.
Second, the more time you give your accountant to work on your tax return, without having to deal with the crush of everyone else who got their paperwork in later, the more time they’ll have to fine-tune your return and find deductions.
The bottom line: the earlier you sit down with your accountant, the more it could pay off later in your tax refund.
Because the Time to Reduce Next Year’s Tax Bill is Now
Among your accountant’s superpowers is the ability to take a comprehensive look at your taxes and identify what changes you can make starting now, at the beginning of the year, to reduce your tax bill next year.
For instance, is your current business structure (sole proprietorship, C-corp, LLC) the best one for you when it comes to your taxes? Each has major tax implications and you could potentially save a great deal by switching to a different designation.
There are plenty of other strategic moves you could potentially be making too, everything from what equipment to purchase and when, to which retirement plan you use.
Have your accountant cast an expert eye on your entire financial life and help you find those hidden, lucrative opportunities.
Because Your Quarterly Payment Strategy Could Use Some Adjusting
Most small businesses pay quarterly taxes throughout the year, an estimated amount based on what they believe they’ll earn during the year.
The challenge is that small business owners can’t see into the future and it’s a system that works best for those who earn a relatively predictable amount. That’s not always the reality for many small business owners.
If you don’t pay enough, you could face underpayment penalties, but if you pay too much, you could face cash flow issues throughout the year.
Your accountant can help you assess income trends and determine the best quarterly payment strategy. And the best time to talk about that is in January.
Because Taxes are Stressful Enough Without a Challenging Deadline
Getting your taxes out of the way as early as possible means you can get a big, looming task off your plate immediately and focus on other things as you begin the New Year.
The earlier you sit down with your accountant, the more time you have to sort out complicated financial questions, locate all necessary documents, get organized, and get the most out of your deductions in the upcoming tax season with minimal stress.
It’s also less stressful for your accountant. While many accountants are used to the challenge of working with numerous clients close to tax time, you’ll get more of their time and attention if you start early.
Schedule Your Free Consultation With a Professional Accountant Today
Our professional accountant will sit down with you, take a comprehensive look at your finances, and help you determine your strategy for the coming year. You’ll have the time you need to get your documents in order and get your taxes off your plate.
Meeting with your accountant in January is a very effective step you can take toward getting a strong start in the New Year.