Knowledge Base - Banking & Financing

Smart Questions for Your Accountant

Article Excerpt from Inc.

Come year end, forget the holiday shopping. It’s the time to huddle with your CPA and make year-end tax moves that will shave Uncle Sam’s bill. Here are a few questions to ask your number cruncher.

What are my projected taxes this year and for the next two?

Without these estimates, it’s impossible to know whether you should defer or take income, accelerate or cut spending before the ball drops in Times Square.

What tax strategies are your other clients trying?

Their tax moves might be smart to follow. Your CPA might have a client that switched to a high-deductible health plan and cut its taxable income by contributing to employees’ health savings accounts. There may be industry-specific strategies, too.

Can I deduct excess inventory that’s lying around?

You can’t take a write-down if you’re trying to sell the goods at full price, says Edward Mendlowitz, a CPA at WithumSmith+Brown in New Brunswick, New Jersey. Your accountant will want proof that you’ve offered it at a discount, like an e-mail promotion sent to your favorite customers. Even if the inventory doesn’t move, you can claim it as a write-down.

Do I have to depreciate the computers I bought this year?

Not necessarily. Under tax code section 179, you can immediately deduct up to $108,000 worth of new business equipment and property as long as it’s placed in service by the end of this year. It doesn’t matter whether you pay cash or put it on your credit card. There are certain restrictions; your accountant will know which apply to you.

Should I put my kids on the books?

Can you look over my QuickBooks?

Click here to read the answers to these and other questions.