Four important things your accountant wishes you knew

by TaxJar November 1, 2023

This guest post is brought to you by TaxAlli. Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

Do you get the feeling your accountant dreads you walking through their door? It’s not just a feeling – after you leave, they’re quietly mumbling a huge list of things they wish you would learn before you came back in. Want to get an inside look at their brains? We asked a few accountants to fill us all in about how we can be better clients to our accountants:

1. Ask questions

Above and beyond anything else, your accountant wants you to understand what’s going on with your finances. They’re not there just to “fix everything” for you; they want you to take a real interest and know what you’re getting into.

“Give me a call if you have a question,” says Chris Peden of The Accounting Scribe, “no matter how insignificant the matter may seem.” Something that seems silly or insignificant to you may help your account help you. So ask!

This is especially true when it comes to sale tax.

“I’m often asked how all states would treat a specific transaction or tax a specific product or whether a certain activity would create sales tax nexus,” says Sylvia Dion of PrietoDion Consulting Partners LLC. “But the sales tax laws are not uniform and there isn’t a cut and dry answer.”

Not asking questions and failing to understand your big picture situation can be hazardous to your business’s financial health. Ask questions so no tax time bugaboos sneak up on your or your accountant!

2. Be proactive

On top of understanding your money, you should take action when needed. Don’t just hand things off on your accountant – they’re there to aid you, not baby you. If you see a problem with your money or taxes you should be proactive and fix it.

“Spending the time to review your business operations on an annual basis can be a time to create opportunities for tax savings or keep your compliance in check,” says Lauren Stinson from Windward Tax. “We are here to help you.”

“If you discover you should have been paying or collecting sales tax in the past – the best thing to do is be proactive and take the steps to get into compliance because the exposure will only get worse if you fail to act,” Dion continues. “Many business owners simply panic when they realize they have had nexus in a state for a long while, but there are avenues available to businesses that want to deal with their prior liabilities under favorable terms.”

3. Understand sales tax nexus

Nexus is an incredibly complex thing, and most business owners realize this. However, they may not realize just how complicated it is when it comes to differences between state to state. While you may have pawned most of this off to your accountant for a reason, it’s important to know how it affects your business.

“So many business owners think that their business must have a very obvious physical presence in a state for them to have nexus,” Dion continues. “You see nexus can be created by many less than obvious activities such as sending independent sales reps (non-employees) into a state to solicit sales, leasing space on a third party server that’s in a state, contracting with in-state marketing affiliates  – individuals or other businesses that post web-link on the affiliate’s website that refer customers to the out of state online seller’s store, or using a third party fulfillment agent in a state.

Dion continued: “Yes, the various state tax laws are quite complex and not always uniform from state to state. If you have some serious concerns, it really is better to allow your CPA or tax advisor to research the specific state laws than to try to get a high-level generic answer that may not consider your specific facts and circumstances.”

4. Set realistic time limits

Remember, you’re not the only client your accountant has. Even if you were they still have a ton of work to do to keep your business on the up and up. Setting unrealistic time limits causes them stress, meaning you’re more likely to encounter errors.

“I cannot get your return done in an hour,” says George Sleeman of Tax Man to You, putting it bluntly. Treat your accountant like a professional or risk incurring an extra charge or even errors in your return.

“I wish they would realize that yes, you need to pay me before I give you the return,” is another complaint Sleeman has. You don’t give your products away for free, so why would your accountant do work for nothing? Keep in mind even if you go fishing with your accountant on the weekends, you should treat your relationship with him or her as a serious business transaction.

Zach Olson is the Founder & CEO of TaxAlli. At Tax Alli, we pair you with real life accountants and use cloud software to make small business accounting awesome. So you can do what you love while we handle the rest.

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