Paying taxes is probably nobody’s favorite chore.
Of course, your professional accounting firm can do a lot to help ease the burden by ensuring you minimize your tax liability and manage your cash-flow to meet your firm’s tax requirements.
But it’s generally still not a lot of fun.
That said, a business owner can find a fair amount of consolation in the fact that, if you’re paying taxes, it means you’re making money.
Savvy businesses – and their accountants – keep tax planning on their radar all year long (not just during “tax season”).
Individuals also derive a strong benefit from having their accountants take a look at their tax planning at various points throughout the year.
And as the half-way point of 2019 approaches, it’s wise to connect with your accountant for a “mid-year check-up” of your (or your firm’s) financial health in general, and specifically, the effectiveness of your tax plan.
Elements Of A Solid Mid-Year Tax Planning Check-Up
When your firm’s accountants review your tax planning, they take a look at several key aspects of your business:
- Where do things stand at the annual mid-point, with regard to sales, profits, costs, and cash flow?
- Can reasonable projections be made, so that the company can have the cash readily available to make quarterly tax payments (and make them on time)?
- How will the predictable seasonality of your business affect your cash flow, and your tax planning?
- Is this the year to make investments or capital improvements you may have been putting off? And if so, how can those outlays be timed to take advantage of markets, of the seasonality of your business, and of other key success factors?
- Are you paying yourself enough? For solo professionals or small firms, this can be a particularly important aspect of your tax planning… and it can be a bit tricky to nail down. The advice of an expert CPA can be invaluable when it comes to getting your paycheck just right.
- And is the mid-point check-up a good time to take a look at other long-term financial planning, such as retirement, succession, or your firm’s future exit strategy? Your accountant’s advice can also come in handy in these other non-tax-specific areas.
- And for individuals (typically W-2 employees), the mid-year check-up is a great time to consider whether your withholding is at the right level to help you properly manage your household cash flow, too.
A good accountant thinks about your tax planning all year long, not just during the traditional “tax season” at the beginning of the calendar year.
And a great accountant is a delight to work with. They return your calls and answer your questions… they are always on your side, keeping the Tax Man happy enough while helping you pay only what you truly owe… they’re helpful, not scolding, when problems come up… and they’re proficient in all areas of your firm’s financial health (including tax planning).
It’s smart to get a mid-year review of your tax plan. Set up a consultation with your expert accountant, and let them give you the comfort of knowing you’re on the right track. You run the business… let your accountant run the numbers. And remember: professional help from your CPA almost always makes or saves you more money than it costs. Often, a lot more.