The Value of a Mid-Year Check-In

Many people assume that the only time of the year they need to talk to their accountant is around tax time, but you should actually be in regular contact with your accountant – or, at the very least, have a mid-year check-in. Here are a few reasons you should schedule an appointment with your tax preparer before the Halloween decorations are out. 

See if you are on track with your estimated payments

Have you been making estimated payments? (The correct answer is yes!) Even so, your accountant can help you re-evaluate based on how things are actually going this year. Maybe business is booming, so you need to up those estimated payments to make sure you don’t owe a fortune next year. Or maybe things are a bit slower than last year, but staying with your current estimated payments puts you in good shape for the end of the year. You’ll only know if you meet with your accountant and find out.  

Update your accountant on any big changes in your life or business

Are you expecting to sign a huge new contract? Is your spouse getting a large raise? Let your accountant know because huge financial changes could push you into a new tax bracket. Understanding what’s coming up can help your accountant determine the best steps for you to mitigate some tax liability if possible – like choosing to purchase a large item before the end of the year to offset some of the new income. 

Is your family going through changes? Maybe you’re expecting a new baby, or your baby has grown up and is headed to college. Your accountant needs to know if there will be more or fewer dependents claimed for the year and if you qualify for certain tax credits. 

Make sure you know what you need to be saving and tracking for year-end

With more than half the year over, you likely have a better idea of how your business is doing and what to expect for the rest of the year. After talking with your accountant, you should know how much you should be saving for taxes, but you should also discuss any big purchases or events that are coming up.

Maybe you’re planning to take some time off around the holidays, which will affect your cash flow. Or maybe you need to upgrade your computer system. Whatever the reason, your accountant can help you determine how much cash to stash, and what to track to make sure you make the most of any additional expenses. And don’t forget to ask how you need to treat those big purchases, like a new company vehicle. Tax depreciation is different and you might need some guidance from your accountant. 

Review expenses and Accounts Receivable

It’s incredibly easy to let our subscriptions get out of control. When you subscribe to software, magazines, newspapers, or other services, sometimes you forget to unsubscribe when you stop using them. Many of these types of subscriptions are less than $10 month, but those subscriptions add up quickly. Take some time to go through every single subscription you have and cancel anything you haven’t used in the last three months.  

Are you collecting on your outstanding invoices? One of the biggest reasons small businesses struggle to collect is they simply aren’t invoicing in a timely manner – or following up on outstanding invoices. If your accounts receivable is becoming more than you can handle, it might be time to work with a bookkeeper! She may be able to help you collect on those invoices as well as brainstorm systems for keeping the cash flowing. It’s well worth paying for help if it means collecting on the thousands of dollars you are owed. 

In addition to all these things, you may also want to ask your accountant about additional ways to offset taxable income like creating a SEP IRA, maximizing a traditional or ROTH IRA, or creating 529 savings plans for your children. If you already have these accounts, find out if you are using them to their maximum benefit. And don’t forget to talk to your accountant about your taxable investments, as well. You may consider selling some investments before the end of the year to offset some of the gains you’ve experienced. 

But remember, your accountant can only help you as much as you help yourself. Schedule an appointment with your accountant today!