Paying taxes is probably nobodyâ€™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 firmâ€™s tax requirements.
But itâ€™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 youâ€™re paying taxes, it means youâ€™re making money.
Savvy businesses â€“ and their accountants â€“ keep tax planning on their radar all year long (not just during â€œtax seasonâ€).
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, itâ€™s wise to connect with your accountant for a â€œmid-year check-upâ€ of your (or your firmâ€™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 firmâ€™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? Â 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? Â For solo professionals or small firms, this can be a particularly important aspect of your tax planningâ€¦ and it can be a bit tricky to nail down. Â 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 firmâ€™s future exit strategy? Â Your accountantâ€™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 â€œtax seasonâ€ at the beginning of the calendar year.
And a great accountant is a delight to work with. Â They return your calls and answer your questionsâ€¦ they are always on your side, keeping the Tax Man happy enough while helping you pay only what you truly oweâ€¦ theyâ€™re helpful, not scolding, when problems come upâ€¦ and theyâ€™re proficient in all areas of your firmâ€™s financial health (including tax planning).
Itâ€™s smart to get a mid-year review of your tax plan. Â Set up a consultation with your expert accountant, and let them give you the comfort of knowing youâ€™re on the right track. Â You run the businessâ€¦ let your accountant run the numbers. And remember: professional help from your CPA almost always makes or saves you more money than it costs. Â Often, a lot more.