Is Your CPA Doing Everything They Can For You?

by Jan 13, 2022Blog0 comments

This is an important question to think through. How do you know if your CPA is doing everything they can to help you? It is disturbing to hear business owners and individuals rattle off several things they dislike about their CPA.

When you dig further and ask the question “What do you like about your CPA?” there aren’t many answers. We have seen several instances of clients loving their CPA, but the person isn’t actually delivering any real tax saving strategies. Your CPA should be doing more than just filling out forms, their real goal should be to save you money on taxes. Most people don’t even realize what their CPA can really do for them. It’s about planning, not just preparing.

Here are a few of items to look for when verifying if you have a good CPA:

They Take Tax Planning Seriously

Tax planning is what generates actual ROI. Your tax needs have to start with a solid foundation. If you don’t have a good plan in place, you’re almost certainly missing some key tax-saving strategies. Savings are not a one-time thing; you should expect strategies to guide your business decisions and highlighted items that’ll create future tax-saving opportunities.

UPSIDE CFO| CPA and customer going over numbers and strategies

Change With Your Business

A good CPA will adapt and change with your business as you grow. Different strategies are applied depending on if you are in startup, growth, expansion, or have a mature business. If you’re thinking about selling the business, that will also change the best approach. Typically, as your business grows, so does your taxable income. This creates different problems, opportunities and necessary solutions.

Stay Up to Date

As of 2017 and now in 2022, there will be different tax laws in effect. Is your CPA up to date with current tax laws and how they apply to you and your success with the IRS? Are they learning about new trends and strategies? As an example, let’s take crypto…most CPAs are conservative by nature, based on personality profiles. New items make tend to make them uneasy. At this point, you can’t ignore crypto anymore – it’s been accepted world-wide and has become a commonplace strategy. Your CPA doesn’t necessarily have to be an expert on the subject, but they do need to know a little about it and how it works, or you might be missing another opportunity. There are a ton of inexpensive courses available to gain a basic education on the latest trends.

Sacrifice Long Term Success to Save Tax Now

Your CPA has to understand your overall tax and wealth picture as of today, and where you are heading in the future. Let’s look at a very simple example.  The 401k. This is often loaded with fees and is simply a way to defer taxes, NOT a tax-savings tool. Yes, you reduce your taxable income today, but what about tomorrow?

The US just printed trillions of dollars during COVID, and we are experiencing some of the lowest tax rates of all times. Is deferring tax now really the right move? What if your effective tax rate is 15% and based on the fact that we don’t know future tax rates, it could be 50% when you are required to take this money out in retirement. Did it make fiscal sense to save 15 cents on the dollar now to pay 50 cents on the dollar down the road? Many CPAs and financial planners don’t think through items like this, but they should.

Upside CFO | CPA tax savings

Don’t Use Jargon

Taxes are complicated and technical. Not everyone is a finance/tax/money person, and frankly, some people don’t really like numbers. Your CPA should use language to make sure you understand the options, whether it is legal or not, and help guide you to the best course of action.

Talk Throughout the Year

The most successful relationships between clients and CPAs have one thing in common. Multiple talking points throughout the year and an open line of communication. It is important to understand what is going on with both you and your business. It cannot be a quick touch base in September to get an update, then call it a day. Some years may need more meetings than others, but a lot can change in one year for a business. Make sure your CPA knows about it.

To conclude, there are a lot of good CPAs out there. Unfortunately, there are also a lot who aren’t so great. It’s important that you know how to identify a good CPA vs. a bad one. A good CPA can save you tens of thousands or even hundreds of thousands per year. Tax savings is often ignored when people talk about generating wealth. You must be able to select a CPA who can help you grow your net worth and not just complete a tax return.


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