1. More is Better
The more we know, the more we can help you optimize your tax liability. If your CPA gives you a tax organizer – answer the questions! They’re there for a reason, and you may be missing deductions if you fail to fill in the info.
2. Review Before Signing
The time to review your prepared return is not when you get the notice that it’s been E-Filed. Make sure you review and ask any questions before your CPA submits you return. It will save you time and money in the long run.
3. Don’t Be Afraid of Extending
If you review your return, and realize that you’ve forgotten to tell your CPA about a new piece of equipment, ask about a potential deduction, etc. but it’s close to the deadline, don’t panic! Extensions are easy to file, and more cost-effective than filing a return by the deadline and later finding a deduction.
Additionally, your CPA may have reasons for extending your return (especially a first-year return or a start-up practice) that – while it may be frustrating – will likely benefit you going forward. The need to properly document expenses, clean up shoddy bookkeeping, and time to implement tax-saving strategies such as retirement contributions are all reasons for filing an extension. It has also true that filing later in the year has the potential to decrease your risk for audit.
4. Extensions are for Paperwork – Not Payments
One of the key mistakes filers make is thinking that because they filed an extension, that means they don’t have to make their tax payment until their return is filed. Not true. If you’re filing an extension, you’ll need to make an estimated tax payment, calculated by your CPA, and turned in by the filing deadline. If you’ve overestimated, you’ll get a refund. If you ignore it, you’ll pay a penalty.