Entrepreneurship Finance

How to Prepare for the Upcoming Tax Season

By Tayler Cusick Hollman

Expert advice from 2 Certified Public Accountants

Tax season is a stressful time of the year for a lot of people and for a lot of reasons. Because, with documents to dig up, numbers to crunch, and questions to answer that sometimes make you feel like you don’t know your business as well as you thought you did, it’s no surprise that business owners can put off the preparation. But, don’t fret because we have some expert advice for you today from Certified Public Accountants Amy Northard and Nadia Anderson—and they are here to get you pointed in the right tax-prep direction. Read on for questions to ask as you prepare your taxes, how to vet a tax professional if you are going to bring one on, as well as what you can do now to make future tax seasons go as smoothly as possible. 

Advice on how to prepare for the upcoming tax season from Amy Northard, CPA

You likely have lots of questions swirling around your head when it comes to taxes. And while you should work to get them all answered by a trusted professional, Amy also recommends adding these to your list: 

• Should I take the standard deduction or itemize?
• Are there any tax credits from the recently passed legislation that I can take advantage of?
• What is the best business structure for me to be from a tax perspective?
• What common tax deductions am I missing?

And, in the event you are in the process of hiring an accountant for your business, here is her advice on the questions to ask to help you find the best fit:

Who is your target client? This is important to ask because you want to make sure any accountant you hire truly understands your business. The wedding industry, creative and small business space is not one that every CPA is well versed in, so be sure to find out if they are familiar with the nuances of this industry.

Are you a Certified Public Accountant (CPA)? Not everyone who works with money is a Certified Public Accountant, and it is important to hire one because the title comes along with a license that must be maintained. It also requires continuing education and is evidence of being a highly trusted professional.

What are your fees? You want to work with someone who is transparent about what it costs to work with them, so if you are interviewing a tax professional who is hesitant to give you a price sheet, keep your search going.

Do you provide any education or training? If one of your goals is to grow as a business owner by becoming more financially literate, you want to work with someone who is going to help you understand things. Ask this question to see if the person is willing and able to support you in this way.  

Do you have any references? An obvious question but still very important to ask since you want to make sure they have experience working with small or creative businesses in the wedding industry.

 

Advice on how to prepare for the upcoming tax season from Nadia Anderson, CPA

As we approach the individual income tax deadline of April 15, we hear more and more about “tax season”. I believe and promote the idea that tax preparation is a process, not an event. Therefore, I never race toward a tax appointment or a filing deadline. In my personal and professional opinion, the period between late January and April 15 is tax preparation season, but “tax season” is all year long. You are always in the process of “tax season” because the way that you operate your business all during the year and how you manage financial transactions with your couples and vendors impacts the taxes that you owe. Often, February or March is too late to begin a conversation with a tax professional (because they’re busy preparing returns) or to begin to understand your tax position (because it is too late to have an impact on the previous year– the year has already ended).

Start now to set yourself up for smooth sailing with all your business money matters by committing to these three steps in 2023:

1. Maintain a system (digital or paper) for keeping financial documents and records in order.
2. Implement a process for financial tracking and reporting
3. Review your reports monthly and estimate your taxes quarterly

I strongly encourage wedding pros to consider an accountant and advisor as a part of their business dream team. In the same way that weddings require upwards of 16 vendors each doing their part to make sure a wedding day runs smoothly, it takes a dream team of professionals working together with wedding pros to make business management smooth. Bookkeepers and tax preparers are important members of the team. However, accountants and financial advisors are critical team members that are often overlooked or taken for granted.  Business owners must build a relationship with an accounting professional who you can reach out to during the year while they’re making decisions to understand how those decisions will impact their money matters overall, as well as their income taxes.

Rather than frantically seeking out a tax preparer who files the forms, but can’t help with strategy, make sure you have a trusted advisor on your team (and on speed dial) to talk through decisions during the year and make sure your decisions align with your overall money strategy and your desire to pay less in taxes.

 

Please note: WeddingPro and the materials and information it contains are not intended to, and do not constitute, financial or tax advice and should not be used as such. You should always consult with your financial and tax advisors about your specific circumstances. This information contained herein is not necessarily exhaustive, complete, accurate or up to date and we undertake no responsibility to update. In addition, we do not take responsibility for information contained in any external links, over which we have no control. 

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