IS IT TIME TO FIRE MY ACCOUNTANT?

Uncle,

I am self-employed and have pretty good income. However, I think I am paying far too much income tax. I don't know anything about taxes but when I call my accountant it takes weeks for him to return my call and nothing changes anyway. I think it is time to look for a new accountant. Do you think I'm right and how do you pick a good one?

Nephew needs help

Nephew,

Jimism: There are two elements to running a business, the product and the business of doing business.

Without reviewing your records I can not pass judgement on your net income or an opinion on your accountant.

Accountants (and other businessmen) under-perform either because the client account is insignificant or the accountant is not tending to the business of his business. Mention the deficiencies and remind them of your prompt payment. If there is no change, it is time to move on.

A good accountant not only crunches numbers -- he cares. He informs you that virtually every expense of running a business is tax deductible. He explains general deductibility then brings a sharp pencil to your particular needs.

He will help you work in gray areas.
Example:
If you are using credit cards for personal and business expenses, pay up all personal credit debt first. Interest on personal debt is not deductible, interest on business debt usually is.

Example:
Charitable contributions may be more effective as business deductions. Taxpayers that take standard deductions gain no benefit from charitable contributions. Small business operators that plan well can deduct qualifying charitable deductions as a business expense.

Attention to accounting is an essential part of running your business, not an option. Price is a consideration in all business matters but "cheap" can be very expensive


Accountants face financial realities. Accountants that monitor and advise all year long can not compete price-wise with "tax perennials." Tax hawks look for every deductible penny and can save you thousands of tax dollars.

Corner store tax perennials charge $100 to transfer raw figures from a questionnaire to a tax form with indifference to the tax consequence. What's better, a service with higher fees that saves you thousands or a $100 wonder than costs you thousands?

Schedule C is the heart of a Sole Proprietor's return. You don't have to become a tax expert, but understanding this one form can help you make an educated choice of accountants, improve client to accountant communication and save uncountable sums over the lifetime of your business.


Everybody's Uncle