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Six Ways to Show Your Business Accountant Some Tax Prep Love

David Scheidel, CPA/PFS
February 2, 2022

Tips for a More Efficient Tax Season – for Small-Business Owners & Their CPAs

Most individuals and business owners usually focus on their taxes at this time of year. However, tax matters happen year ’round. To avoid the scramble that often happens at tax return time, Scheidel, Sullivan & Lanni offers these helpful tips. They’ll make your tax preparation process more efficient for everyone. Read what we advise our clients below, and get in touch with us if you have any questions.

How to Improve Your Small Business Tax Prep

1) Be organized

Have your business and financial records in good shape. Ensure your accounting is up to date (all general ledger entries correctly entered and categorized), payroll reports are accurate, and all bank accounts are reconciled. The more organized your documentation and reports, the faster your tax preparation process will go. Bonus tip: Update your accounting records monthly so that you always have a handle on your business cash flow and can pull accurate financial statements for your CPA. You’ll both see your company cash flow and can gauge actual income and expenses against your annual budget, among other key financial factors.

2) Summarize your tax planning questions in a concise list

Are you wondering how to categorize certain expenses or deposits? Have questions about which costs can be expensed on the tax return? A summary will be easy for your tax professional to address. Bonus tip: Don’t wait until the end of the year to ask questions! Tap your tax accountant for answers when the issue is fresh and it’s easy to track (not when your sleep-deprived tax preparer is trying to sort through it all, or too much time has gone by to address it appropriately).

3) Inform us of major business transactions or life transitions in advance

Knowledge is tax-planning power! With advance notice of big changes in your personal or professional life, your tax planning professional can make the appropriate adjustments throughout the year. Examples are changes in marital status, a new child, a large inheritance coming, or buying or selling a business. Each situation will affect your tax return and possibly your tax rate. This also helps with estate planning.

4) Fill out the tax preparation organizer

That big envelope is not a large coaster for your morning coffee! At Scheidel, Sullivan & Lanni, we send out comprehensive tax organizers to our clients for a good reason—to have all the information we need for efficient tax preparation. The more complete the form, the fewer questions we’ll have, the smoother your tax filing process will be. We promise. And we’ll love you for it. Bonus tip: Send all supportive documents as PDFs, not JPGs (photo format). Otherwise, it becomes costly to convert the files so we can save them

5) Don’t be the last to come into the office. Plan ahead!

The earlier you meet with your business accounting professional, the smoother the tax preparation process will be. In fact, early fall is the ideal time for business owners to start the year-end process. That way, if your income or your business has changed in ways that will affect your tax return or tax structure, there is time to plan or make necessary course corrections. For instance, we may need to adjust your quarterly estimated taxes for the fourth quarter, or plan for a heavier tax bill at filing time. We can also review your financials to see if there are ways to reduce taxes before the end of the year. Bonus tip: It’s always better to talk to your business accountant or tax planning professional BEFORE tax season when they’re fresh. Bringing chocolate to the meeting is another plus!

6) Leverage your inner circle relationships

It’s always best when all the players on your business team can collaborate. Introduce your accountant, lawyer, financial advisor and other “centers of influence” so they can be involved together in strategic planning and provide you, the business owner, with a 360° view of your business. Imagine undergoing a merger or acquisition or working on a succession plan without all parties bringing their expertise and knowledge base to the situation. When we work as a team with clients’ other advisors, everyone benefits. An open dialogue avoids surprises and ensures all contingencies are covered.

Categories: Articles, Tax Planning

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