Tax Time: 10 Questions to ask your Tax Accountant

Recently we’ve been in discussion with a number of small business owners and there was a consistent feeling when it came to end of financial year and tax time - dread. As a business owner, you know that filing a tax return is required for compliance, but you don’t feel like there’s any value in it for you. You know you will be receiving a big bill from the tax office and a big bill from your accountant, but don’t always understand why you have to pay this and if there’s anything you can do about it.

It doesn’t have to be like this. Tax time should be an opportunity for business owners to review their business performance and consider new strategies for the next financial year.

Here are 10 questions to ask your Tax Accountant to get more value our of your discussion and make tax time an opportunity to improve business performance. This is particularly important for business owners and CEOs who don’t have a CFO leading these conversations.

1. What Documents Do I Need to Provide?

Before diving into the specifics, start with the basics. Ask your tax accountant what documents you need to gather. Typically, this includes financial statements, receipts, invoices, payroll records, and previous tax returns.

For some businesses, this might mean there’s a mad scramble to gather these documents and prepare financial statements. That’s ok, but to avoid it next year, consider setting up some processes to manage this during the year. Olive Business Partners can help to implement processes and systems for you if you need help. Having these documents ready will streamline the process and ensure nothing is overlooked.

2. What Deductions Am I Eligible For?

Maximising deductions is key to reducing your tax liability. This also doesn’t mean that everything is deductible! Ask about all possible deductions you might be eligible for. This could include expenses related to home office, travel, equipment, and more. Your accountant can provide insights into what you can claim for your specific business and industry.

3. Are There Any Recent Changes in Tax Laws That Affect My Business?

Tax laws frequently change, and staying updated is crucial for compliance and planning. Ask your accountant about any recent changes that could impact your business. Knowing these updates can help you avoid surprises and make informed decisions throughout the year.

4. Can You Help Me Understand My Financial Statements and Their Impact on My Tax Return?

Understanding your financial statements is essential for making informed business decisions. Ask your accountant to explain your financial statements and how they affect your tax return. This knowledge can help you identify areas for improvement and better manage your finances.

5. How Can I Improve My Cash Flow Management to Manage Tax Liabilities?

Effective cash flow management can minimise tax burdens and enhance business operations. Discuss strategies with your accountant to improve your cash flow, such as optimising receivables and payables, to ensure you can meet your tax obligations without straining your finances. Olive Business Partners can help you with cash flow management strategies if you need support in this area.

6. What Tax Saving Strategies Should I Consider for the Upcoming Year?

Proactive tax planning can help you take advantage of tax saving opportunities. Ask your accountant about strategies you can implement in the coming year, such as timing income and expenses or capital investments, to reduce your tax liability and improve your financial position.

7. Are There Any Industry-Specific Tax Issues I Should Be Aware Of?

Each industry has unique tax challenges and opportunities. Seek guidance from your accountant on any industry-specific tax issues that could affect your business. This tailored advice can help you navigate complex regulations and optimise your tax strategy.

8. How Does My Business Structure Affect My Taxes, and Should I Consider Changing It?

The structure of your business, whether a sole proprietorship, partnership, or company, can significantly impact your tax situation. Discuss with your accountant whether your current structure is the most tax effective and if considering a change could benefit your business financially.

9. What Are the Implications of Any Recent Large Purchases or Investments on My Taxes?

Significant transactions, such as property or equipment purchases, business acquisitions, or large investments, can have substantial tax implications. Ask your accountant about how these transactions affect your taxes and if there are ways to optimise the timing or structure of these investments for better tax outcomes.

10. What Should I Do If I Can’t Pay My Taxes?

Sometimes, cash flow issues make it challenging to pay taxes on time. If this happens, it's essential to know your options. Discuss with your accountant what steps you can take if you're unable to pay your tax bill. They can provide guidance on payment plans or other solutions to manage this situation.

You may also like to read this article from Olive Business Partners on How To Deal With An Unexpected Tax Bill.

Conclusion

Asking the right questions during tax time can transform your tax experience from stressful to manageable. Your tax accountant is a valuable resource, and utilising their expertise can lead to significant benefits for your business. Stay informed, plan ahead, and keep the lines of communication open to ensure you're making the most of your tax strategy.

It is important to note that Olive Business Partners are not tax agents and do not provide specific tax advice. Therefore, having a qualified tax accountant is essential. A proficient tax accountant will be more than happy to answer the questions outlined in this article. If you do not currently have a reliable tax accountant, Olive Business Partners can recommend excellent professionals to assist through this tax season.

Olive Business Partners specialise in helping businesses establish the right processes and systems to implement advice from their accountants. Additionally, we can offer support in developing effective cash flow management strategies, ensuring that the insights gained from these discussions can be effectively utilised in next year's financial planning.

If you would like to know more, please get in contact.