The 5 Words You Don't Want To Hear From Your Accountant
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Did you know you could potentially save serious money or get help recruiting and motivating your employees just by leveraging a bunch of deductions and tax credits offered by the IRS?
For example, are you aware of the tax benefits available to both you and your employees for reimbursing them for educational, dependent care, adoption and commuting expenses? Did you know you can take huge deductions for capital equipment purchases and not even have to pay for these purchases upfront? Or that there are significant credits available for you to encourage the hiring of welfare recipients and veterans, disabled people, starting a 401(K) plan or just paying a portion of the salary for those employees taking time off under the Family and Medical Leave Act?
Do you have an ESOP? An HSA? A 529?
I bet you don’t know all this. But don’t feel bad. This was news to a lot of the business owners and managers I spoke to at a recent conference. Is it news to you? More importantly, is it news to your accountant? Does he say to you “Hey, that’s a great idea!” when you bring something to his attention? Those are not the five words you want to hear from him. Or any expert or advisor.
Look, I'm sure your accountant’s a nice guy. To you, he seems to know his stuff. You've been using him for years. You generally enjoy speaking with him. But you're just not entirely sure he's providing you with the best tax or financial advice. Then again, what do you know? You're not an accountant. You're no financial expert. How can you be so sure your accountant is really doing the best job for you?
Actually, there's actually a very simple way to know. Just ask yourself: who's the expert?
Think back over the past few years. Have you ever read an article about saving taxes that you sent to your accountant in passing and he responded with something like "Hey, that’s a great idea!"? Or maybe you picked up an interesting piece of financial advice from another parent at your daughter's soccer game that your accountant also found worth investigating? Did he say “Hey, that’s a great idea” to that too?
Perhaps you're one of those people who pays an above average amount of attention to the numbers. Good for you. You attend a financial seminar now and then, or you listen to a CPA speaking at an industry event like I did. You read your financial statements closely every month and make note of the things that catch your attention. You discuss your operations with colleagues in a business group or an old college friend. You stay on top of the news.
Is your accountant doing this stuff? Is he coming to you with suggestions, ideas and recommendations throughout the year? Or are you the one going to him? Who's the financial and tax expert here, you or your accountant?
Related: How to Hire an Accountant
If these things are not happening then he's not the expert and he's not an advisor. He's just a form-filler, a task-completer, a clerk. If you're the person telling your "expert" how to do his job, then what good is that person? Whether it's an accountant, lawyer, tech “guru” or AdWords consultant, you want your advisor proactively coming to you with...well...advice, and not the other way around. The last thing you want to hear is “hey, that’s a great idea!” from the one person who’s supposed to be giving you the great ideas.