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April 4, 2018
This piece is presented by Cain Ellsworth & Company LLP.
Tax season is winding down but signing your return really is just the start of how you should be using it.
Stacie Dykstra, director of business development at Cain Ellsworth & Company, explains.
First, we know April 15 is the filing deadline for individuals, but when should your tax return be done?
Ideally, you want to get your tax return completed by the original due date. For different entities, that’s at different times. It’s surprising how many tax returns actually get extended. Sometimes there are good business reasons for the extension, but often it is a matter of convenience. In most situations, it is good business practice to get your return filed by the original due date. A lot of times third parties rely on your tax return. If you’re renewing or extending your line of credit, the bank will want to see your tax return. Other vendors use that information as well, including insurance or bonding agents. As much as possible, you want your return completed by the original due date.
It’s done. Now what do you do with it?
A lot of times I think what people want to do or maybe do is they stick the return in a drawer and think, “Thank goodness, we’re done.” And that’s the wrong thing to do. Your tax return contains great, valuable information, and you need to be looking at and analyzing it with your provider.
How do you maximize your time with your accountant when it’s done? What should happen when you discuss your return?
You should talk about how this year’s return compares with prior years. You may talk about next year and what your quarterly estimates might look like. But you also want to talk with your accountant about trends. We like to look at trends, five to seven years of history. What are the concerning and positive trends? How does this compare to the prior year? How does this compare to other businesses in your industry? We provide information on that, so you can look at businesses of the same size and determine if you’re ahead of the curve or lagging behind. And if you’re lagging behind, we can look at ways you might improve.
If you’ve taken the time to analyze the return and aren’t satisfied with where you ended up in 2017, what should you do?
The first thing is to start making change. Develop a plan. There are options. You can work with providers who will get your returns or financials completed on time and help you analyze and talk about proactive change. Nothing changes if nothing changes. If you think you can do the same thing as 2017 and it will yield a different result, it won’t. That’s what Cain Ellsworth is all about. We encourage our clients to work with Matt Heemstra, our director of growth and profit solutions. His objective is to help clients succeed and generate change in their organization.
So now I’m done with my taxes. When should I be meeting with my accountant again?
I think that answer is a little different for every business. For small-business owners, having a resource or adviser is very important. So meeting with their accountant on a regular basis is ideal. Things change and evolve. Often they want to sit down and look at where things are at, and if a plan is in place, there needs to be some accountability to check in and see how things are progressing. A lot of times we suggest meeting quarterly or at least semiannually. That can be difficult because business owners see it as a pull on their resources, whether it’s time or financial. But it’s an investment. We sometimes talk to owners who are so uncertain about how the year is going to end, and that can cause a lot of anxiety. Wouldn’t you rather know if you’re on target? We can give guidance, so you can have a better sense of where you’re at.
Tax season is mostly over. Is it too late to change providers if I’m not happy? Or when should I do that?
It’s never too late. You can always talk to someone else. But it’s better to be proactive, and if you give your new provider some time, they will be better prepared, will know more about you and your needs, and how to best help you. And if your return is finished for 2017 and you’re not happy with how it went, don’t delay. Reach out and contact providers and go through an interview process to make sure you’re working with someone who’s a good fit for you. If you’re a small-business owner, you should be getting in and talking to your tax provider and you should be having conversations to make sure your needs align with their service philosophy.
If businesses want to learn more, what should they do?
We would love to have them give us a call at 605-610-4611 or check out our website at cainellsworth.com. We’re always willing to meet for a free initial consultation. This is an opportunity for us to ask questions and for the business owner to learn more about who Cain Ellsworth is to ensure that the fit is right and that they feel comfortable. That’s very important. You want to feel like you can ask questions and your provider will get answers and you have confidence in them.
Tax season is winding down, but signing your return really is just the start of how you should be using it.