Key Conversations To Have With Your CPA
Scheduling a meeting with a CPA is a smart step toward better financial management. To maximize the value of your time, it helps to come prepared.
Addressing the following key topics will better equip you to make informed financial decisions.
Whether you’re optimizing your personal finances or managing a business, having these conversations can guide you in the right direction.
PERSONAL FINANCES
Tax Planning and Optimization
Questions to ask:
What tax deductions or credits can I take advantage of?
How can I lower my tax liability?
Are there recent tax law changes that could impact me?
Am I making tax-efficient investments?
Should I focus on paying off debt or building savings?
Maximizing tax savings requires proactive effort throughout the year. Many miss out on available credits and deductions, so it’s important to check with your CPA. Also, tax laws change frequently and these shifts can affect your strategy. Be sure to ask about recent updates.
Major Life Events
Questions to ask:
How will this event impact my tax situation?
Are there tax benefits for my new situation?
Should I adjust my financial or estate plan?
Life changes like marriage, having children or buying a home bring both new opportunities and challenges. These milestones may affect your tax situation, deductions and credits. Ensure your CPA is updated and discuss adjustments to your estate plan to safeguard your loved ones.
Retirement Planning
Questions to ask:
Which retirement accounts suit me best (IRA, 401(k), etc.)?
How can I minimize taxes on my retirement savings?
Should I be maxing out my retirement contributions?
Retirement planning is about more than just saving — it’s also about doing so in the most tax-efficient way. Maxing out retirement accounts can reduce taxable income and boost savings, but discuss with your CPA to ensure you’re balancing contributions with liquidity needs.
BUSINESS FINANCES
Financial Planning and Projections
Questions to ask:
Can you help forecast my cash flow for the next year?
How do I decide whether to finance or pay cash for equipment?
What financial reports should I review regularly?
How can I improve profitability and cash flow?
Business owners need clear financial forecasts. Your CPA can help you understand financial data and make decisions that improve profitability and cash flow. Ask about leveraging debt to support growth and positioning your business for future success.
Tax Strategies for Business
Questions to ask:
Is my business structure still the best for minimizing taxes?
How can I reduce tax liability this year?
Am I using all available tax credits and deductions?
Your business structure (LLC, S-Corp, etc.) affects taxes significantly. Regularly assess if your setup is still the most tax efficient. Your CPA can help optimize tax strategies and identify tax-advantaged investments, like those that qualify for Section 179 or bonus depreciation.
Employee Compensation and Benefits
Questions to ask:
As a business owner, how should I compensate myself?
Are there tax incentives for providing certain benefits?
Should I give raises or bonuses to high performers?
Compensation packages must balance employee satisfaction with cost. Discuss with your CPA how to structure pay to take advantage of available tax incentives and whether to offer raises or bonuses, based on your financial situation.
Financing Growth
Questions to ask:
Can my business accommodate growth, based on my financials?
What financing options are available for expansion?
What are the tax implications of growing my business?
If you plan to expand, your CPA can assess whether your financials can support growth and help identify financing options. Discuss how expansion impacts your tax situation and adjust your financial projections accordingly.
Succession Planning and Exit Strategy
Questions to ask:
What’s the best option for exiting my business — selling, transferring or passing it down?
What should I have ready if I plan to sell?
How can I minimize taxes during the transition?
Whether you plan to sell your business, pass it down or transfer ownership, your CPA can guide you through the process. From preparing financial records for buyers to minimizing taxes, ensure your exit strategy is well planned.
FINANCIAL GOALS
The Importance of Ongoing Communication
Your relationship with your CPA should align with your unique financial goals. While this list provides essential topics, it’s not exhaustive. Regular communication with your CPA ensures you’re making informed decisions throughout the year. It also helps you avoid potential issues and adapt to changes in your financial situation.
