As a business owner or entrepreneur, it’s essential to ask the right questions to your CPA or tax preparer to ensure your business is compliant with tax laws, taking advantage of all possible deductions, and planning effectively for the future. Here’s a structured list of questions to ask:
1. Business Structure and Tax Strategy:
•Is my current business structure (LLC, S-Corp, C-Corp, etc.) the most tax-efficient?
•Should I consider restructuring my business for tax benefits?
•What are the tax implications of changing my business structure?
2. Deductions and Credits:
•What deductions am I eligible for, and how can I maximize them?
•Are there industry-specific deductions or credits I should be aware of?
•How can I properly document and track my expenses to ensure I can claim all deductions?
•Are there any COVID-19 relief tax credits or programs still available to my business?
3. Tax Compliance and Deadlines:
•What are my tax filing deadlines, and what penalties exist for missing them?
•Do I need to make estimated quarterly tax payments? If so, how much should I set aside?
•How can I ensure my payroll taxes, sales taxes, and other required taxes are accurately calculated and paid on time?
4. Business Income and Reporting:
•How should I report business income, especially if I have multiple income streams?
•What records and documentation do I need to maintain to ensure proper reporting?
5. Retirement and Benefits:
•What retirement savings plans (like a SEP IRA, Solo 401(k)) should I consider for tax benefits?
•What are the tax implications of providing health insurance, retirement plans, or other benefits to myself and my employees?
6. Growth and Tax Planning:
•How should I plan for future tax liabilities as my business grows?
•How can I prepare for potential changes in tax laws that may impact my business?
•Can you help me develop a tax strategy that aligns with my long-term business goals?
7. Capital Investments and Depreciation:
•What are the tax implications of purchasing new equipment, property, or vehicles for the business?
•How should I handle depreciation of assets, and how does it affect my taxes?
•Can I take advantage of Section 179 deductions or bonus depreciation for capital investments?
8. Audit and Risk Management:
•What steps should I take to reduce the risk of an audit?
•If I’m audited, how will you assist me, and what should I expect?
9. Personal and Business Tax Integration:
•How does my personal income tax situation interact with my business taxes?
•What is the best way to manage income distribution between myself and the business (e.g., salary vs. dividends)?
•How can I optimize my personal tax situation with regard to my business income?
10. State and Local Tax Considerations:
•Are there any state or local tax credits, deductions, or incentives I should take advantage of?
•How do I handle sales tax or use tax if my business operates in multiple states?
11. Record-Keeping and Software:
•What bookkeeping software or practices do you recommend for maintaining accurate financial records?
•What financial reports should I be reviewing regularly to understand my business’s tax situation?
12. Exit Strategy or Succession Planning:
•What are the tax implications of selling or transferring my business?
•How should I plan for taxes related to my business exit strategy, whether through sale or succession?
By asking these questions, you’ll not only gain a clearer understanding of your current tax situation but also identify ways to save money, plan for the future, and remain compliant with tax laws.
