As a business owner, it’s important to have a good working relationship with your accountant. Not only can they help you keep your books in order and prepare your tax returns, but they can also provide valuable advice on how to structure your business, minimize your tax liability, and plan for future taxes.
Most of us as business owners absolutely loathe tax time, after all, you’re baker, not a tax expert! But trust me, when you have a great accountant and/or bookkeeper, it’s not so painful. I’ve had good accountants that are proactive and answer all of these questions without me prompting them, and ones that are more laissez-faire. At the end of the day, no one will care for your business as much as you do. Your business, your problem. I hope this blog empowers you to get in the drivers seat when it comes to your finances, and ask questions that will set you up for financial success.
Here are some questions you should ask your accountant to help ensure that you’re getting the most out of your financial relationship:
1. What deductions am I eligible for?
Your accountant can help you identify deductions that you may not have been aware of, such as home office expenses or business-related travel expenses. In this video, I interview an accountant who shares some benefits you may not have heard of.
2. What is the best way to structure my business?
Your accountant can advise you on whether it’s best to operate as a sole proprietor, partnership, LLC (🇺🇸), or corporation, and which structure will provide the most tax benefits. Make sure you share your personal goals and aspirations with them. For example, are you looking to purchase a home in the next few years? That may impact the structure.
3. What tax credits am I eligible for?
Your accountant can help you identify tax credits that you may be eligible for, such as research and development credits or hiring credits. These are gold so take advantage.
4. How can I minimize my tax liability?
How can I minimize my tax liability? – Your accountant can help you explore strategies for reducing your tax liability, such as deferring income or maximizing retirement contributions through your RRSP.
5. How can I stay compliant with tax laws?
Your accountant can advise you on tax compliance issues, such as which tax forms to file and when they are due, to avoid penalties and interest. They may share information such as how often you need to remit taxes to the government and other tips that will help you avoid the wrath of the CRA and IRS.
6. How should I keep my financial records organized?
Your accountant can provide guidance on how to keep accurate and organized financial records, which will help ensure that you are taking advantage of every available tax benefit and avoid potential problems with the IRS and CRA. Remember, audits in Canada can happen up to 7 years after you file so you want to keep your documents organized so that you are always ready. Stay ready so you don’t have to get ready! Your accountant may provide templates and tools to help.
7. How can I plan for future taxes?
Your accountant can help you develop a tax planning strategy that takes into account your current and future financial goals, which will help you make informed decisions about your businesss
In conclusion, your accountant can be a valuable partner in helping you manage your business finances. By asking the right questions and taking advantage of their expertise, you can ensure that you’re maximizing your tax benefits, staying compliant with tax laws, and planning for a successful financial future.
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