Life happens – and as it happens, we experience change. While some changes are bigger than others, even small changes in your business can affect your taxes. There can be serious consequences to making large changes without talking to your CPA or lawyer first. After you’ve signed a contract or made a large change, it’s too late to turn back. Talking to your CPA about these changes ahead of time can help minimize missteps that could potentially cost you. What changes should you report to your accountant? Here’s a look.
A change of address can affect your taxes, especially if you’ve moved (or are planning to move) to a new county or state. Your CPA can help make you aware of tax laws in your new zip code. Be sure to update your accountant with your new address and phone number as soon as you know it. Since some post offices won’t forward mail from the government, your accountant can make sure your address is up-to-date with important organizations such as the IRS.
You want to change your business structure.
Thinking of incorporating? Your accountant should be the first to know and can help you identify tax-related issues that may arise as a result – issues that could affect your bottom line. Your CPA can help with strategy surrounding which business structure would be best and also assist with preparing necessary filing forms. The SBA also provides some great information about choosing a business structure.
You’re considering ownership changes.
It’s important for your accountant to know the key players in the business. Have you taken on a new business partner? Did an owner depart the business? Your accountant should know, especially if it changes any key contacts at the company.
You’re thinking about signing a new agreement or contract.
Your accountant must know about any large contractual obligations that you are entering. Contracts can carry special accounting and tax treatments that need consideration and depend on the terms of the contract. Utilizing your CPA’s expertise prior to signing is the best option and will help you determine the financial impacts of such agreements or contracts. If you have already signed the dotted line, discuss it with your accountant as soon as possible to be ahead of any potential impacts for you and/or your business.
You want to make a major purchase.
You’d like to buy out a competitor? Let your accountant know. Likewise, you should inform your accountant of any large capital expenditures for building upgrades, equipment, or other necessary items. The accountant can help you make necessary adjustments to your bookkeeping resulting from the purchase. On the flip side, your accountant should also be informed if you’ve sold off a piece of your business.
You’re going out of business.
Closing your doors? Your accountant should be one of the first to know. You can get help navigating the financial issues related to shutting down and assistance with closing out your books.
Something’s changed in your personal life.
For better or worse, your business and personal life are intertwined as a small business owner. Let your accountant know of any major changes in your life outside of work, including marriage, divorce, new babies, or change of residence.
We can help.
Are you navigating changes to your business? Our experienced team of CPAs can help you identify financial benefits or issues that may arise as your business changes. Reach out today for your free 30-minute consultation!