10 Important Questions to Ask Your Tax Advisor

Having a tax advisor is invaluable to ensure that you only pay the taxes you have to and are compliant with tax laws. To make the most of your relationship with your tax advisor, it’s important to ask the right questions. Here are some essential questions to consider.

1. How Can I Maximize My Deductions and Credits?

  • Why It Matters – Deductions and credits can significantly reduce your tax liability. Your advisor can help identify which ones you qualify for.

  • Follow-Up – Ask about any recent changes in tax law that might affect your eligibility for certain deductions or credits.

2. What Should I Know About Estimated Tax Payments?

  • Why It Matters – Understanding how estimated tax payments are calculated and knowing they are correct can help avoid penalties and manage cash flow.

  • Follow-Up – Request guidance on setting aside funds for these payments and any adjustments needed throughout the year.

3. How Can I Better Plan for Retirement?

  • Why It Matters – Retirement planning involves various tax-advantaged accounts and strategies that can impact your long-term financial health.

  • Follow-Up – Inquire about the best retirement plans for your situation, such as IRAs, 401(k)s, and SEP IRAs, and how to maximize contributions.

4. What Are the Best Strategies for My Business?

  • Why It Matters – Business owners need to know about deductions, credits, and structuring options that can save money and improve profitability.

  • Follow-Up – Discuss strategies like depreciation, the August Rule, accountable plans and home office deduction.

5. How Can I Prepare for Tax Law Changes?

  • Why It Matters – Tax laws change frequently, and staying informed can help you take advantage of new opportunities and avoid paying taxes you don’t need to.

  • Follow-Up – Ask about upcoming changes that could impact your tax situation and how to adjust your plans accordingly.

6. What Records Should I Keep?

  • Why It Matters – Proper record-keeping is essential for supporting your tax returns and handling any audits.

  • Follow-Up – Seek advice on what documents to retain and for how long, including receipts, invoices, and financial statements.

7. How Can I Reduce My Tax Liability This Year?

  • Why It Matters – Reducing your tax liability requires proactive planning and timely action.

  • Follow-Up – Discuss potential actions you can take before the end of the year.

8. What Should I Know About My State and Local Taxes?

  • Why It Matters – State and local taxes can vary widely and impact your overall tax burden.

  • Follow-Up – Ask about specific state and local tax obligations and any available credits or deductions.

9. How Do Life Changes Affect My Taxes?

  • Why It Matters – Major life events like marriage, divorce, the birth of a child or buying a home can significantly impact your tax situation.

  • Follow-Up – Discuss any recent or upcoming life changes and how to adjust your tax strategy accordingly.

10. What Can I Do to Prepare for an Audit?

  • Why It Matters – Being prepared for a potential audit can save time and stress.

  • Follow-Up – Ask about audit triggers and steps to ensure your records are audit-ready.

Asking these questions can help you get the most out of your relationship with your tax advisor and ensure you’re taking full advantage of tax-saving opportunities. Regular communication and proactive planning are key to effective tax management.

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