Have you outgrown your CPA
Have you outgrown your CPA? Whoever's doing your tax services, have you outgrown them? I think that's something that we need to ask ourselves and reflect on every so often because I know, personally, I've outgrown a CPA before. I know a lot of my clients have outgrown whoever does their taxes. So there's really two points I want to drive home in this subject matter. One, let's just say you came from corporate.
You had a 9 to 5 job, like many of us had at some point in time. Whoever was doing your taxes was treating you like an employee, right? But now, maybe you have an LLC, you have a side hustle, you have some kind of business activity going on. If you're using that same accountant, that same tax service company, chances are they just work with employees.
They don't really work with entrepreneurs. They might dabble and work with people that have some business activity but that is not their niche. That is not who they specifically work with. And since you've evolved, and you're growing, and you might be making more money, and you might have this new LLC, and a business bank account, and all of these moving parts, if you're still seeing the same CPA working with the same accounting company, it might be time for a change because there's a lot of CPAs out there, tax service companies out there, where they specifically work with entrepreneurs.
Maybe you've got an e-commerce business, you've got an LLC or real estate business, you have some business activity going on, there's tax service companies out there that specifically work with business owners. So it might be time for a second set of eyes if you're truly evolving the way that you are. That's the first point. The second point I want to drive home is offense versus playing defense, right? The example is if you are doing your taxes, you're working with your accountant, your tax service company.
Playing defense is not tucking them a whole lot during the year and then when it's tax time, you're rushing to talk to them. You're waiting for them to talk to you, to reach out to you and say "Hey, I need this from you." So it is very, very reactive and that is not a good strategy if you are an entrepreneur because at the end of the day, having tax strategies, maximizing your tax deductions, and saving as much money as you can, can be the difference between making money one year and losing money the next year.
So, the point I want to make is if you're waiting for your CPA, if you're waiting for the company you're working with who does your taxes to reach out to you, you might need a new tax service company, you might need a new CPA. You need to be playing offense. Offense, the way I look at it, is you getting on the same page with your CPA.
At least once a quarter, meet with your CPA. Go over how are you paying yourself. Are you paying yourself a W-2? Are you just taking out a distribution every so often? What are you writing off? What are you not writing off? What expenses do you have coming up over the next quarter or two?
Really, really plan and forecast your tax strategies, and your deductions, and the flow of your money so if you're meeting with your CPA three, four, five, six times a year, you're going to stay ahead of the curve, you're going to be able to maximize the deductions that you need to make sure that you are taking advantage of, and you're strategizing. You're playing offense.
You're not just playing a defensive game where you're just reacting to everything. Let's be proactive. Let's play offense and let's save as much money as we can when it comes to our taxes.