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Maximize Your Tax Deductions by Asking Your Accountant These 5 Questions Thumbnail

Maximize Your Tax Deductions by Asking Your Accountant These 5 Questions

Meeting your accountant at tax-time isn’t just showing up, running the numbers, and then leaving. Or at least it shouldn’t be.

While you may walk away with a tax refund, you’ll be missing out on much more – like a plan to minimize the impact of taxes on your income.

That, after all, is the main purpose of getting an accountant to do your taxes. So, why is it that so many small business owners overlook everything an accountant can do for them?

To help you take advantage of everything your accountant can do for you, we’re going to cover 5 questions you can ask to open up the conversation and get the most out of your experience.

#1 Is there anything I can do to minimize the impact of my tax bill this year that I’m not doing now?

Everyone wants to know how to lower their tax burden, unfortunately, not everyone is asking this question.

Although your tax year is probably over by the time you strike up that conversation with your accountant, there are sometimes a few things you can do, like contributing to an RRSP, that can help you save some money.

While there are only a few possibilities for saving when you’re doing your taxes, now is the perfect time to get advice on what to do in the coming year to ensure your tax bill stays low.

Often, this can include:

  • Improving the way you handle payments

  • A more efficient use of available tax deductions

  • Better record-keeping

As the laws regarding each of these changes with new years, new politicians and new promises, your accountant should be able to keep you up to date.

Because your accountant is familiar with your business, they may also have more suggestions that will help you lower your tax bill.

Simply by asking this question, you’ll gain better insight into a part of your business that often gets lost as day-to-day operations take over your priorities.

#2 Is this still the right business structure for me?

The way you structure your business isn’t ‘set it and forget it’. Whatever your business, getting your accountant’s view on whether it’s offering the most tax advantages can help make sure you’re using the right structure for you and your business.

This can include moving from a Sole Proprietorship to a Corporation, or even moving to a Limited Liability Partnership if you have a medical or law practice.

By keeping on top of your business structure, you can save both money and time.

#3 How can I better manage my cash flow?

Cash flow is king, which makes it a royal pain in the butt sometimes. Many small business owners struggle with maintaining positive cash flow in their business, even though it’s an essential skill for maintaining a healthy business.

Your accountant can help analyze your cash flow and pinpoint problems or areas that need improvement, then help you make plans to deal with each of these problems. Because they look at your business from a different angle, they will often see things you miss.

#4 What can I do to make this process easier?

If you ask your accountant this, they’ll love you. Often, accountants are forced to work around missing or partial information. This makes their lives harder, but it also makes it impossible to do their best work for you.

Your accountant will be able to give you the best practices for the information you should collect, as well as how to obtain it throughout the year.

#5 Are there any tax deductions I should be aware of for my industry/business?

The tax code can get incredibly complex, even down to how it affects specific industries. If you aren’t completely up to date on all tax laws that can affect your business, you could be paying more taxes than you need to.

This maze of rules is compounded by industry-specific subsidies, grants and other regulation that may be available to you. 

By giving your accountant a little more of your time, you may be able to come up with a plan to save you money or take advantage of subsidies and grants you didn’t know existed.

Getting the most out of your accountant

Just like every resource out there, you only get as much value as the energy you put into leveraging it. That means, your accountant can just get your taxes done, or they can be part of the team of people around you that help your business achieve success.

For that to happen, you need to arm yourself with information. Your financial advisor is an important part of helping you leverage every member of your team to make sure you get the greatest value.

For more information about how to get the most value, talk to your financial advisor today.