Questions you Should Ask your Accountant About your Tax Return ...

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Your accountant may be helping you with financial planning and forecasts, loan applications, investment advice, audits and many other things. However, do you know all you need to know about your?taxes? Most accountants know a lot about the complicated?tax?system, but may not know everything there is to know. Here are three questions you should ask your accountant about your?taxes.

1. Does your accountant have an arrangement with a third party?tax?support service?

Even though accountants know a lot about?taxes, they cannot be experts in all aspects and will need to consult?tax?specialists sometimes. Your accountant should know when they are out of their depth and need an expert opinion.

Your accountant may try to do some research to find answers or they may contact a larger accounting firm that has dedicated support for smaller accountants. They may also call help lines where organisations provide support for accountants and?tax?advisers.

2. Does your accountant know all of the?tax?savings your business could be making?

People ask this question all the time, but it is good to be a little more specific.

• Ask your accountant if you are claiming everything you possibly can including use of home for work, mileage, your telephone and subsistence.
• Are there any VAT schemes for smaller businesses that would help reduce your?taxes?such as using cash accounting or a flat rate scheme?
• Would it be a good idea to set up a company for your business to get more?tax?benefits?
• Are you paying yourself or your employees in the most?tax?efficient way? You may be giving dividends, drawings or wages.

3. Are your accountant?s?tax-reducing strategies legal?

It is legitimate to minimise your?tax?liabilities and claim all available allowances and reliefs.?Tax?relief can be claimed for expenditure that has been incurred exclusively and wholly for business purposes. Your accountant can plan your business affairs to keep your?tax?liabilities as low as possible as long as it is within the law.

What your accountant should not be doing is deliberately or dishonestly allowing you to evade paying?tax. They should not claim?tax?relief for expenses that have not been incurred and for expenses that do not relate to your business. They should also not exclude any of your taxable income from your accounts or?tax?returns.

There are severe consequences to illegal?tax?returns?for you and your accountant. There will be revenue investigations and possible huge backtaxes?to pay. There will also be interest on the back?taxes. Penalties may be up to 100 per cent of the?taxes?owed. This is all a huge waste of time and money and isn?t the worst. If your accountant has done all of the above, you could be prosecuted and sent to prison.

It is tempting to let a professional accountant take care of the?taxes, but to protect your business and yourself as well as to pay the least amount of?tax?that you legally can, it is wise to ask your account a few questions.

Dale is a Business and Finance Writer from Sydney, Australia. He writes for many leading business and finance news sites and believes these questions are important for getting the most out of your accountant and tax return. Dale is currently writing his second book on Accounting Practices.

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Source: http://www.howimportantisyourfinance.com/2012/08/23/questions-you-should-ask-your-accountant-about-your-tax-return/?utm_source=rss&utm_medium=rss&utm_campaign=questions-you-should-ask-your-accountant-about-your-tax-return

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